Exhibit 2.7
ASSET PURCHASE AGREEMENT
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THIS AGREEMENT is made this 9th day of July, 2004, by and among
XxXXXXX, INC., a Wisconsin corporation, (referred to hereinafter as
"Seller"); Xxxxxxx X. XxXxxxx, Xxxxxxxx XxXxxxx, Xxxxxxx XxXxxxx,
Xxxxxx Xxxx, and Xxxxxxx X. XxXxxxx as Trustee of the trusts (the "Trusts") set
forth on Section 6(a) of the Disclosure Schedule (being referred to
hereinafter collectively as the "Shareholders" and individually as a
"Shareholder"); ULTRA MART FOODS, INC., a Wisconsin corporation and a
wholly-owned subsidiary of Xxxxxx"s, Inc. (being referred to hereinafter as
"Buyer"); and XXXXXX'X, INC., a Wisconsin corporation (being referred to
hereinafter as "Xxxxxx'x");
RECITALS:
WHEREAS, Seller owns and operates a total of seven (7) grocery
supermarkets at the locations set forth in Exhibit A attached hereto (each such
supermarket being hereinafter individually referred to as a "Store" and all
such supermarkets being collectively referred to as the "Stores" and the
business conducted in the Stores being hereinafter referred to as the
"Business");
WHEREAS, the Shareholders are collectively all of the stockholders of
Seller;
WHEREAS, Seller desires to sell and Buyer desires to purchase the
Business and substantially all of Seller's assets used in the conduct of the
Business at all of the Stores upon the terms and conditions set forth in this
Agreement; and
WHEREAS, Buyer is a wholly-owned subsidiary of Xxxxxx'x and Xxxxxx'x
is therefore willing to join with Buyer as a party to this Agreement and
guaranty the obligations of Buyer hereunder;
THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
AGREEMENT:
1. SALE OF ASSETS.
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(a) Assets Sold. On the Closing Date (as hereinafter
defined), subject to the terms and conditions set forth in this Agreement,
Seller shall sell, convey, transfer, assign and deliver to Buyer and Buyer
shall purchase the following assets (collectively the "Purchased Assets") of
the Business:
(i) Inventory. All inventory owned by Seller
and held for sale (or rental) in the ordinary course of business at
the Stores as of the Effective Date, to the extent such inventory is
usable, saleable, and not outdated (as more fully described in
Section 4(a) below) or damaged (the "Inventory");
(ii) Cash. All operating cash (including for
this purpose all food stamps, but excluding checks and coupons) on
hand (the "Cash on Hand") and located in the Stores as of the Effective
Time;
(iii) Trademarks, Trade Names and Other
Intellectual Property. All intellectual property associated with
the Business (including but not limited to all trademarks, service
marks, trade names, pending trademark, service xxxx and trade name
applications and registrations, and copyrights, but excluding the name
"XxXxxxx") ("Intellectual Property");
(iv) Equipment. All fixtures, equipment,
furniture, machinery, tools, racks, partitions, shelving,
exterior signs, refrigeration equipment, leasehold improvements,
software, computer hardware, terminals and peripheral equipment,
scanning systems owned by Seller or in which Seller has any interest,
including any leasehold interest, and other supplies located at and
used in the operation of the Business;
(v) Assigned Contracts. All right, title and
interest of the Seller in, to and under the "Assigned Contracts" (as
hereinafter defined);
(vi) Permits. Only to the extent transferable,
all right, title and interest of Seller in, to and under all
transferable licenses, permits, orders, certificates, approvals
and other government authorizations owned by Seller exclusively in
connection with Seller's occupancy or operation of the Stores;
(vii) Other Personal Property. All other
personal property of every nature or description owned by Seller and
used in the operation of the Business, including, but not limited to,
general intangibles, and the goodwill and going concern value of the
Business.
(b) Excluded Assets. Notwithstanding anything in
Section 1(a) above to the contrary, the following assets, rights,
interests and other properties of the Seller (the "Excluded Assets") shall not
be sold, transferred, assigned, conveyed or delivered to Buyer:
(i) Cash and Cash Equivalents. All cash and
cash equivalents other than Cash on Hand, including all bank deposits
and checking and savings accounts;
(ii) Accounts Receivable. All accounts
receivable (including checks and coupons) relating to any of
the Stores;
(iii) Prepaid Expenses. All prepaid expenses
relating to any of the Stores;
(iv) Non-Operating Assets. The non-operating
assets set forth in Section 1(b)(iii) of the Disclosure Schedule;
(v) Corporate Records. All corporate and
financial books and records, Seller's corporate charter and similar
items; and
(vi) Vehicles. Two (2) 2003 Honda vans and one
(1) Ford Econoline van.
(c) Assignment and Assumption of Contracts. The
"Assigned Contracts" consist of all of those leases, subleases, contracts
and agreements that are set forth on section 6(e) of the Disclosure Schedule
hereto and which are designated thereon as "Assigned Contracts." At the Closing,
effective as of the Effective Time (as hereinafter defined) Seller will assign
and transfer to Buyer all of Seller's right, title and interest in, to and under
the Assigned Contracts, and Buyer will assume, perform and discharge all of
Seller's obligations and liabilities arising after the Effective Time (and
attributable to time periods after the Effective Time) under the Assigned
Contracts (hereinafter "Contract Liabilities"); provided, that the Contract
Liabilities assumed by Buyer shall not in any event include:
(i) any liability or obligation of Seller
under any employment agreement, collective bargaining agreement,
plans or arrangements concerning employee bonuses, insurance, or
other agreement with any employee, officer, or shareholder of Seller;
or any other liability or obligation of any nature whatsoever of
Seller to any employee or former employee, whether pursuant to
contract, arising by operation of law, or otherwise; or
(ii) any liability or obligation attributable
to or arising as a result of any breach, violation, or
non-performance of any Assigned Contract by Seller prior to and
through the Effective Time, including, without limitation, any
breach or violation arising as a result of the transactions
contemplated by this Agreement.
(d) Assumption of Employee Accruals. Buyer will assume
the liability of Seller for employee bonuses, vacation and sick pay due from
Seller to the Transferred Employees (as that term is defined in Section 13)),
but only in the amount and to those persons for which Buyer receives a credit as
provided in Section 5(b) herein (the "Assumed Employee Accruals").
(e) Real Estate Subleases. Seller is currently a
sublessee of Jondex Corp. (an affiliate of Buyer) under two subleases relating
to the New Berlin and Oconomowoc-Olympia Stores (the "Store Subleases") and a
lessee of an affiliate of Seller, XxXxxxx Realty (the "Seller Affiliate") under
five leases (the "Seller Affiliate Leases") for the remaining Stores. At the
Closing, Xxxxxx'x will cause Jondex Corp. to terminate the Store Subleases and
release Seller and the Shareholders from any further liability under the Store
Subleases (to the extent such liability and costs relate to periods following
the Effective Time and/or as otherwise provided in the "Sublease Termination"
described below), and Seller will relinquish its rights under the Store
Subleases and release Jondex Corp. and Xxxxxx'x from any further liability
thereunder, pursuant to and as provided in a Sublease Termination in the form
attached as Exhibit 1(e) hereto (the "Sublease Termination"). Rent, percentage
rent, tenant's shares of real estate taxes, common area aintenance expenses
and other payments payable by Seller under the Store Subleases shall be prorated
as of the Effective Time based on actual amounts incurred or assessed for the
year 2003. With respect to time periods between December 31, 2003 and the
Closing Date, such prorations will be determined on the basis of actual
amounts incurred or assessed for the year 2003, and will not be adjusted after
the Closing Date to reflect actual amounts incurred or assessed for periods
after December 31, 2003.
(f) Termination and Release Agreement. Concurrently
with the execution of this Agreement, Xxxxxx'x, Seller and the Shareholders
shall enter into an agreement among them, to be effective upon the Closing
hereunder, whereby all agreements (including the "Pick 'N Save" trademark
license and supply agreements) entered into between the parties (or their
affiliates) prior to the date hereof, and the obligations of the parties
thereunder, are terminated (the "Termination and Release Agreement").
(g) New Store Leases. At Closing, Seller shall cause
the Seller Affiliate to terminate the Seller Affiliate Leases and cause the
new entities ("New Seller Affiliates") to which the Seller Affiliate has
transferred the Stores that are the subject of the Seller Affiliate Leases to
enter into new leases or subleases with Buyer relating to those five Stores
(the "New Store Leases"), which New Store Leases will be in the form attached
hereto as Exhibit 1(g) (1-5). The terms of the New Store Leases will include
the following:
(i) Lease term: The term of the New Store Lease
for the Stores in Wales, Mukwonago, Muskego and Sussex will be for a
base term of 15 years with three successive renewal options of 5 years
each (each a "Renewal Term"). The term of the New Store Lease for the
Oconomowoc-Plank Road Store will be three (3) years with no renewal
options.
(ii) Rent. The rent under the New Store Leases
for the base term will be as set forth on Exhibit 1(g)(1-5) attached.
For each Renewal Term the rent will increase over the rent in effect
immediately prior to the renewal, by the lesser of 12.5% or the change
in the consumer price index (all urban) over the last five years of the
preceding term.
(iii) Maintenance and Repair Obligations. The New
Store Leases will provide that responsibility for maintenance and
repair of the supporting walls, foundation, roof and similar
structural components of the building, as well as material defects in
the subsurface of the parking lots, will be that of the landlord,
while all other maintenance and repair (including glass and the surface
of the parking lots) will be the responsibility of the tenant.
(iv) Oconomowoc Use Restriction. The New Store
Lease for the Oconomowoc-Plank Road Store will contain a provision
prohibiting its use in a "Competitive Business" (as that term is
defined in Section 11(a) below) for a period of 4 years following the
end of the initial three-year term of such New Store Lease.
2. LIABILITIES.
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(a) Except for the Contract Liabilities expressly
assumed by Buyer under Section 1(c) above and the Assumed Employee Accruals
assumed by Buyer pursuant to Section 1(d) above, Buyer shall not in any manner
assume nor be liable or responsible for any of the liabilities, debts, or
obligations of Seller or any Shareholder, of any nature whatsoever, including,
but without limiting the generality of the foregoing, the following:
(i) Past, current and future liabilities and
obligations of Seller for federal, state or local taxes of any nature
(except for real and personal property taxes to be pro-rated between
Buyer and Seller as provided in Section 5 hereof), including, without
limitation, any taxes occasioned by the sale contemplated by this
Agreement; or
(ii) Liabilities or obligations of Seller of any
nature to employees or former employees relating to services performed
prior to the Effective Time, including, without limitation,
liabilities or obligations for wages, withholding and employment taxes,
vacation, sick pay, bonuses, severance pay, retirement and fringe
benefits, incurred prior to and through the Closing Date, except for
Assumed Employee Accruals.
(b) Seller shall pay and discharge, when due, any and all
of the debts, liabilities and obligations of Seller which are not assumed by
Buyer.
3. PURCHASE PRICE; PAYMENT; ALLOCATION.
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(a) Purchase Price. The purchase price to be paid by
Buyer to Seller for the Purchased Assets (the "Purchase Price") shall be
Sixty-Three Million Dollars ($63,000,000) (i) increased by the amount of
Seller's (i) Cash on Hand, (ii) increased or decreased, as appropriate, by the
difference between the "Final Inventory Value" (as valued and determined in
accordance with Section 4 hereof) as of the Applicable Inventory Date (as
hereinafter defined) and Eight Million Dollars ($8,000,000) (the "Base Inventory
Value"), and (iii) adjusted by the prorations provided for in Section 5 hereof.
The amount described in clause (ii) above is referred to as the "Inventory
Adjustment."
(b) Payment of Purchase Price. Buyer shall pay the
Purchase Price to Seller as follows:
(i) At Closing, the sum of $63,000,000, plus
an amount equal to the parties' mutual good faith estimate of the
Purchase Price attributable to Cash on Hand, shall be paid by wire
transfer of immediately available funds to an account designated by
Seller;
(ii) Upon final determination of the value of
the Cash on Hand and the Inventory Adjustment, and the approval by
Seller and Buyer of the final closing statement, the difference
between the final purchase price, as determined, and the amount paid
by Buyer at the Closing, shall be paid by Buyer to Seller or be
paid by Seller to Buyer, as appropriate. If the Final Inventory
Value and the amount of Cash on Hand has not been finally determined
within fourteen (14) days after the Closing Date, such difference
shall bear interest at an annual rate of five percent (5%), beginning
on the fifteenth day following the Closing Date.
(c) Allocation of the Purchase Price. The Purchase Price
shall be allocated as follows:
(i) The portion of the Purchase Price
constituting Cash on Hand shall be allocated to cash;
(ii) The portion of the Purchase Price
constituting Inventory, as determined pursuant to Section 4
hereof, shall be allocated to Inventory;
(iii) Six Million Five Hundred Thousand Dollars
($6,500,000) shall be allocated to equipment and leasehold
improvements;
(iv) One Hundred Fifty Thousand Dollars
($150,000) shall be allocated to the covenant not to compete set forth
in Section 11 hereof, to be allocated in equal shares among the several
individual Shareholders and the Seller; and
(v) The remainder of the Purchase Price shall be
allocated to goodwill and the going concern value of the Business.
4. PHYSICAL INVENTORY; DETERMINATION OF INVENTORY PRICE; CLOSING.
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(a) As soon as practical after Buyer has received all
of the Licenses and Permits required for its ownership and operation of the
Stores (including, without limitation, liquor licenses, food stamp permits,
retail food dealer licenses and "WIC" permits), or, if later, when the waiting
period under the HSR Filings (as defined below) has duly expired, the parties
will jointly select a date, for each of the Stores, on which the amount of Cash
on Hand, Inventory and store supplies at such Store willbe determined by a
physical inventory tabulation (the date of such inventory for each Store
being hereinafter referred to as the "Applicable Inventory Date" for that
Store). No Applicable Inventory Date shall be more than five (5) days prior
to the "Closing Date" (as defined below). Such physical inventory and the
necessary extensions of the costs for such inventory and store supplies at
each Store shall be conducted by an inventory service mutually acceptable to
Buyer and Seller (it being the intent of the parties to select, if reasonably
possible, a single inventory service that has the capacity to conduct the
inventory of all seven Stores on the same day) (the "Inventory Service").
Buyer and Seller shall each have representatives present during physical
inventory, and the expense thereof shall be borne equally by Buyer and Seller.
The physical inventory tabulation (and the purchase price to be paid by
Buyer for the Inventory) shall not include inventory which is damaged, spoiled,
outdated, obsolete or otherwise unsaleable at normal retail price in the
ordinary course of business at the Stores, and Buyer shall have no obligation
to purchase any of such inventory. For purposes of this Agreement, "outdated"
shall mean any (a) non-perishable merchandise with less than thirty (30) days
remaining shelf life or which has a manufacturer's date by which it must be
sold that is less than thirty (30) days after the Applicable Inventory Date,
or (b) any perishable merchandise with less than the lesser of (X) three (3)
days remaining shelf life or which has a manufacturer's date by which it must be
sold that is less than three (3) days after the Applicable Inventory Date or
(Y) one-half of its original shelf life remaining. At the Closing, the parties
will append to this Agreement a schedule setting forth the Applicable
Inventory Date and the Effective Time (as defined below) for each of the Stores.
(b) For purposes of this Agreement (including
Section 3(a) hereof) the Inventory will be valued at Seller's cost thereof,
determined in the following manner:
(i) the cost of Inventory shall be the retail
selling price thereof as of the Applicable Inventory Date less the
margin percentage by department for the Stores as set forth in
Section 4(b) of the Disclosure Schedule attached hereto, except for
such meat, produce, deli, bakery, seafood, supplies and other
perishable items for which the cost is readily ascertainable in which
case the actual cost of such items shall be used.
(ii) The rental video tape and DVD inventory
shall be valued at six dollars ($6.00) per tape/DVD.
(iii) Supplies will be valued at Seller's actual
cost.
The total value of the Inventory (including supplies, but not
including Cash on Hand) as finally determined in accordance with this
Section 4 is referred to herein as the "Final Inventory Value." If the Final
Inventory Value exceeds the Base Inventory Value, the Purchase Price shall be
increased dollar-for-dollar by the amount of such excess; and if the Base
Inventory Value exceeds the Final Inventory Value, the Purchase Price will be
decreased, dollar-for-dollar, by the amount of such excess.
(c) The complete inventory prepared by the Inventory
Service shall be prepared in accordance with the usual and customary practices
of the industry and shall show the amount of Cash on Hand and the total cost
of Inventory and supplies for each Store determined in the manner provided
above. In the event the parties do not agree on the value of the Inventory and
supplies for any Store because the parties disagree as to whether certain items
are damaged, spoiled, outdated, obsolete or otherwise unsaleable at normal
retail prices in the ordinary course of business or as to Seller's cost thereof,
the opinion of the Inventory Service shall be final and binding on the parties.
(d) Buyer shall be given physical possession of each
Store and the Business conducted thereon immediately upon completion of the
taking of the inventory at such Store. All sales made and expenses incurred
after such time shall be for the account of Buyer.
(e) The transactions contemplated hereby will be
closed, and the sale and purchase of the Purchased Assets thereby consummated,
on a date, selected by agreement of the parties, as soon as practical after the
last of the Applicable Inventory Dates (the "Closing" or "Closing Date").
However, the Closing shall be deemed effective as to each Store as the time of
completion of the physical inventory at such Store on such Store's Applicable
Inventory Date (the "Effective Time"). This transaction shall be closed at the
offices of Xxxxx Xxxxxxxxxxx Xxxxx S.C., 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx, or at such other place as the parties may mutually agree.
5. PRORATIONS and ACCRUALS.
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(a) Personal property taxes applicable to the
Purchased Assets for the year (or other period) in which the Effective Time
occurs shall be prorated as of the Effective Time on the basis of the personal
property tax bills for the year 2003. Utility charges for the billing periods
in which the Effective Time occurs will be apportioned between Buyer and
Seller based on actual meter readings as of the Effective Time.
(b) Buyer will be entitled to a credit against the
Purchase Price for the amount of all accrued but unpaid employee bonuses,
vacation and sick pay due as of the Effective Time to the Transferred Employees
(as that term is defined in Section 13). For purposes of this Section 5(b),
accrued employee bonuses, vacation and sick pay for which Buyer will be
entitled to a credit will include (i) that which each Transferred Employee has
fully earned but not used (and not forfeited) as of the Effective Time, as
well as (ii) a pro-rata portion of that which each Transferred Employee has
accrued through the Effective Time during his or her accrual period during
which the Effective Time occurs (the "Current Accrual Period"), even though
the employee may not be entitled thereto unless he or she would have remained
employed by Seller for the remainder of the Current Accrual Period following
the Effective Time; provided that the amount determined under the preceding
clause (ii) (but not the amount determined under clause (i)) will be discounted
by 20% to reflect the fact that some employees may not remain employed by Buyer
through the end of the Current Accrual Period.
(c) All costs, charges or prepayments paid or payable by
or to Seller under any Assigned Contracts will be prorated as of the Applicable
Inventory Date.
(d) Rent, percentage rent, tenant's shares of real estate
taxes, common area maintenance expenses and other payments payable by Seller
under the Store Subleases and the Seller Store Leases shall be prorated as set
forth in Section 1(e).
6. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDERS.
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To induce Buyer to enter into this Agreement, Seller and the
Shareholders, jointly and severally, make the following representations and
warranties:
(a) Corporate Organization. Seller is a corporation
which is duly organized and validly existing under the laws of the State of
Wisconsin, all filings necessary for the maintenance of its existence have
been made, and there are no proceedings pending for the dissolution of it.
Seller has all requisite power and authority to carry on the Business as it is
now being conducted and to own and lease the properties and assets it now owns
and leases. Section 6(a) of the Disclosure Schedule accurately identifies
the persons and entities that are, collectively, the record and (except in the
case of the Trusts) beneficial owners of 100% of the outstanding capital stock
of Seller and those persons and entities that are, collectively, the owners of
100% of the membership interests in the Seller Affiliate.
(b) Authorization, Validity. Seller has all requisite
corporate power and authority to enter into this Agreement and to carry out
its obligations hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by Seller's stockholders and Board of Directors. No other
corporate proceedings on the part of Seller are necessary to authorize this
Agreement or the transactions contemplated hereby, and this Agreement
constitutes the valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(c) Compliance. Neither the execution nor delivery of
this Agreement by Seller nor the consummation by Seller of the transactions
contemplated hereby, will result in any violation of or be in conflict with,
or constitute a default under, any provision of Seller's Articles of
Incorporation, By-Laws or any contract, agreement, security agreement,
pledge, document, commitment, instrument, judgment, decree, order, statute,
rule or governmental regulation to which Seller or any Shareholder is a party
or by which they are bound, or which is applicable to Seller or any Shareholder,
the Purchased Assets or the Business, or give any third party any right to
terminate or cancel any such contract, security agreement, pledge, document,
commitment or instrument, or accelerate any obligation evidenced thereby.
(d) Good Title. The Purchased Assets (in the case of
leased assets, Seller's leasehold interest therein) are free and clear of all
security interests, encumbrances, liens, mortgages, pledges, charges,
conditional sale or title retention agreements and restrictions, except liens
for personal property taxes not due and payable, and those security interests
described in Section 6(d) of the Disclosure Schedule for which full and
complete releases will be obtained by Seller at or prior to the Closing.
Except as set forth in Section 6(d) of the Disclosure Schedule, there are no
currently effective Uniform Commercial Code financing statements of record
covering any of the Purchased Assets.
(e) Leases, Contracts, Etc. All leases, subleases,
maintenance agreements, service agreements and all other agreements of any
nature, whether written or oral, affecting any of the Stores or the Business or
the Purchased Assets ("Contracts") are listed on Section 6(e) of the Disclosure
Schedule attached hereto. Said Section 6(e) of the Disclosure Schedule
designates those of the Contracts that are Assigned Contracts. Correct and
complete copies of the Contracts have been provided to Buyer. Each such
Contract is in full force and effect and there has not occurred any event which
with or without the lapse or passage of time and/or giving of notice) would
constitute a default thereunder by Seller or by any other party.
(f) Inventory. The quantities and types of items
comprising the Inventory are reasonable in the current circumstances of the
Business and consistent with Seller's historical practices.
(g) Equipment. Section 6(g) of the Disclosure Schedule
is a true, correct and complete list of all items of machinery, equipment and
other personal property (other than Excluded Assets, Inventory and supplies,
but including leasehold improvements) owned or leased by Seller as of the date
of such list, indicating in each case whether owned or leased. All of the
assets set forth on such list (or, in the case of leased assets, the leases
pursuant to which they are leased) are included among the Purchased Assets and
Seller has not disposed of any such assets since the date of such list. All of
the tangible personal property included among the Purchased Assets (as well
as any property leased pursuant to any of the Assigned Contracts) is in good
operating condition and repair, ordinary wear and tear excepted, and suitable
and adequate for the purposes to which it is currently put in the conduct of the
Business.
(h) Financial Statements. Seller has delivered to Buyer
copies of the reviewed financial statements of Seller for the fiscal years ended
October 27, 2001 and October 26, 2002 and October 25, 2003, and unaudited
interim financial statements for the period ended February 21, 2004 (such
financial statements, including all notes thereto, hereinafter being
referred to collectively as the "Financial Statements)." The Financial
Statements (i) have been prepared from and are consistent with the books and
records of the Seller, (ii) are complete and correct in all material respects,
in accordance with generally accepted accounting principles ("GAAP"),
(iii) have been prepared in accordance with GAAP consistently applied during
the periods covered thereby, and (iv) fairly and accurately present the
financial condition, results of operations and cash flows of the Seller as at
the dates, and for the periods, stated therein; provided, that the unaudited
interim financial statements do not reflect customary year end adjustments
and accruals.
(i) Absence of Certain Changes or Events. Since
October 25, 2003, Seller has conducted the Business solely in the ordinary
course and consistent with past practice, and, without limiting the foregoing,
except as set forth in Section 6(i) of the Disclosure Schedule, (i) there has
not been any material adverse change in the financial condition or operation of
the Business and no event has occurred which materially and adversely
affects the Business or the Purchased Assets (provided, that Buyer
acknowledges that the opening of other retail supermarkets that are competitors
of Seller shall not be considered a material adverse change), (ii) Seller has
not waived any rights which are material to the Business, (iii) there has not
been any damage, destruction or loss (whether or not covered by insurance)
which singly or in the aggregate materially and adversely affects the Purchased
Assets or the Business, (iv) Seller has not entered into or terminated any
material agreement, lease, license or commitment which relates to the Business
or the Purchased Assets, (v) Seller has not disposed of any material assets
other than inventory sold in the ordinary course of business, and (vi) Seller
has not made any material change in any method of accounting or accounting
practice.
(j) Litigation and Other Proceedings. Except as set
forth on Section 6(j) of the Disclosure Schedule, no action, suit,
proceeding or investigation before any court, arbitrator, governmental
authority or instrumentality is pending against Seller or any Shareholder, or
to Seller's or any Shareholder's knowledge is threatened against Seller or
any Shareholder, which involves the Business, the Purchased Assets or the
consummation by Seller of the transactions contemplated by this Agreement, and,
to Seller's and the Shareholders' knowledge, no valid basis exists for any such
action, suit, proceeding or investigation.
(k) Fringe Benefit Plans. Section 6(k) of the
Disclosure Schedule lists all employee benefit and fringe benefit plans,
practices, policies or arrangements maintained by Seller, whether formal or
informal, including, without limitation, any bonus, stock option, stock
purchase, deferred compensation, pension, profit sharing, retirement, vacation
pay, sick pay, health, dental, disability, life insurance or other fringe
benefit plan, arrangement or practice. Section 6(k) of the Disclosure Schedule
contains a copy of or an accurate and complete description of each such plan,
arrangement and practice. Seller does not have any commitment, whether formal
or informal, to create any such new plan or arrangement not set forth in Section
6(k) of the Disclosure Schedule.
(l) Consents and Approvals. Except as set forth on
Section 6(l) of the Disclosure Schedule, and except for the filing of notices
with the appropriate authorities under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act ("HSR Filings") and the expiration of the waiting periods
thereunder, no consent, approval or authorization of, or declaration, filing
or registration with, any governmental or regulatory authority or agency,
whether federal, state or local, is required in connection with the execution or
delivery of this Agreement by Seller or the consummation by Seller of any of
the transactions contemplated hereby. Except as set forth in Section 6(l) of
the Disclosure Schedule, no consent of any other entity, agency or person is
required in connection with the execution or delivery of this Agreement by
Seller or the consummation by Seller of any of the transactions contemplated
hereby, including, without limitation, consents from any party to any Contract
(whether or not an Assigned Contract) to which Seller is a party, or which is
applicable to the Business or the Purchased Assets, other than agreements
with Buyer that are to be terminated pursuant to the Termination and Release
Agreement.
(m) Employees. Set forth on Section 6(m) of the
Disclosure Schedule is a complete list by each Store location of all of Seller's
employees (the "Employees"), both full and part time, and their respective wage
rates or salaries.
(n) Taxes.
(i) Seller has properly and timely filed all
federal, state and local tax reports and returns required to be filed
by it, and all taxes, license fees, and charges and levies of every
kind, character and description (including, without limitation, those
due in respect to their properties, income, franchise, occupations,
licenses, sales and payrolls), as shown by such reports or returns to
be due and payable, or levied, assessed or imposed on the Business or
Seller through the date hereof (except for those which by their terms
are not yet due and payable) have been paid. No taxing authority has
asserted against Seller any claim for the assessment of any additional
tax liability.
(ii) There are no tax liens upon any property or
assets of Seller except liens for current taxes not yet due and
payable.
(iii) No examination or audit of any tax return
or report of Seller is in progress or to Seller's or any
Shareholder's knowledge is contemplated.
(o) Condition of Real Estate. The structures, plants,
improvements, systems and fixtures (including, without limitation, storage
tanks or other impoundment vessels, whether above or below ground) located on
the real estate where the Stores are located (the "Real Estate") conform in
all material respects with all Federal, state and local statutes and laws
and all ordinances, rules, regulations and similar governmental and regulatory
requirements, and are in good operating condition and repair, ordinary wear and
tear excepted. Except as set forth on Section 6(o) of the Disclosure Schedule,
the Real Estate, in view of the purposes for which it is currently used,
conforms in all material respects with all covenants or restrictions of record
and conforms in all material respects with all applicable building codes and
zoning requirements, and current, valid certificates of occupancy (or equivalent
governmental approvals) have been issued for the Real Estate to the extent
required by law; and neither Seller nor any of the Shareholders is aware of any
proposed material change in any such governmental or regulatory requirements
or in any such zoning requirements. All existing electrical, plumbing,
fire sprinkler, lighting, cooling, refrigeration, air conditioning, heating,
ventilation, elevator and other mechanical systems located in or about the
Real Estate are in good operating condition and repair, ordinary wear and tear
excepted.
(p) Employment Practices. None of Seller's employees is
represented by any labor organization. During the preceding five (5) years,
there has not been any request by any employees of the Business for an election
or certification of a union to represent them, and there does not exist, and to
the Seller's and Shareholders' knowledge there is not threatened or
contemplated, any strike, slow-down, picketing or work stoppage by any
employees, or any lock-out by Seller of any employees. During the preceding
five (5) years, Seller has not experienced any significant labor dispute, and
there is not currently threatened or contemplated any strike, slow-down,
picketing or work stoppage by any Employees, or any lock-out by Seller of any
employees. Seller is not engaged in any unfair labor practice, no unfair labor
practice complaint has been asserted or is pending or to Seller's Knowledge is
threatened against Seller, no grievance or arbitration proceeding is pending or
to Seller's Knowledge is threatened, and there is no claim, suit or proceeding
filed or to Seller's Knowledge threatened against Seller, alleging
discrimination against any past or present Employee based on age, sex, national
origin, religion or race. Seller has complied at all times and in all material
respects with all laws, statutes, rules and regulations applicable with
respect to employees in every one of the jurisdictions in which it operates
and/or does business, including without limitation, all laws, statutes,
rules and regulations applicable to and/or directed at discriminatory
practices (including, without limitation, discrimination based on race, age,
sex or sexual preference, in particular with respect to employment, equal pay
and/or discharge), labor standards and working conditions, payment of
minimum wages and overtime rates, or otherwise relating to the conduct of
employers with respect to its employees or potential employees, and there
have been no claims made or, to the best knowledge of Seller and the
Shareholders, threatened thereunder against Seller arising out of, relating
to or alleging any violation of any of the foregoing. Seller has complied in
all material respects with the employment eligibility verification form
requirements under the Immigration and Naturalization Act, as amended ("INA"),
in recruiting, hiring, reviewing and documenting prospective employees for
employment eligibility verification purposes and Seller has complied in all
material respects with the record-keeping and reporting provisions and
anti-discrimination provisions of the INA. Seller has obtained and
maintained the employee records and I-9 forms in proper order as required by
law. To the best knowledge of Seller and the Shareholders, Seller is not
currently employing any workers unauthorized to work.
(q) Environmental Matters.
(i) Except (in the case of clauses (W) and (Y) of this
sentence) for Hazardous Substances (as hereinafter defined)
generated, stored, treated, manufactured, refined, handled, produced,
disposed of or used by Seller in the ordinary course of its business,
in compliance with the requirements of currently applicable laws,
rules and regulations or otherwise in a manner which would not give
rise to any liabilities or obligations under such laws, rules and
regulations, and except as set forth on Section 6(q) of the Disclosure
Schedule, (W) neither Seller, nor to Seller's and the Shareholders'
knowledge any other person, has caused there to be any Hazardous
Substances (as that term is hereinafter defined) in, on or under any
of the Real Estate of such a nature or to such an extent that they
could (1) have a material adverse effect on the value of such
Real Estate, (2) limit the ability of Buyer to conduct business on
such Real Estate, or (3) limit the ability of Buyer (or increase
Buyer's cost) to improve or renovate the buildings and structures
on such Real Estate; (X) to Seller's and the Shareholders' knowledge
none of the Real Estate has been designated, restricted or
investigated by any governmental authority as a result of the actual
or suspected presence, spillage, leakage, discharge or other
emission of Hazardous Substances, nor is there any basis for any such
designation, restriction or investigation; (Y) no Hazardous Substances
have been generated, used, stored, treated, manufactured, refined,
handled, produced or disposed in, on or under, and no Hazardous
Substances have been transported, released or disposed of at, from or
to, any of the Real Estate by Seller or by any persons or agents
operating under the control, direction and supervision of Seller,
including, without limitation, all employees, agents and contractors
of Seller; and (Z) neither Seller nor the Shareholders have received
any written or oral notice, order, inquiry, investigation,
environmental audit or assessment or any lien, encumbrance, decree,
easement, covenant, restriction, servitude or proceeding concerning,
or arising by reason of, the actual or suspected presence,
spillage, leakage, discharge, disposal or other emission of any
Hazardous Substance in, on, under, around, about or in the
vicinity of, or the transportation of any Hazardous Substance at, from
or to, any of the Real Estate.
(ii) Except as set forth on Section 6(q) of the Disclosure
Schedule, neither Seller nor any Store premises nor any aspect of the
manner in which the Store's business is or has been conducted is in
violation of, or subject to any liabilities as a result of any past or
current violations by Seller of, any existing federal, state or local
law (including common law), statute, ordinance, rule or regulation of
any federal, state or local governmental authority relating to
occupational health and safety or relating to pollution or protection
of the environment, including, without limitation, statutes, laws,
ordinances, rules and regulations relating to the emission, generation,
discharge, spillage, leakage, storage, off-site dumping, release
or threatened release of Hazardous Substances into ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances
(collectively, "Environmental Laws").
(iii) For purposes of this Agreement, the term
"Hazardous Substance" shall mean any product, substance, chemical,
contaminant, pollutant, effluent, waste or other material whose
presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, emission, discharge, spill,
release or effect, either by itself or in combination with other
materials located on any of the Real Estate, is either:
(a) regulated or monitored by any governmental authority or
(b) defined or listed in, or otherwise classified pursuant to, any
statute, law, ordinance, rule or regulation applicable to the Real
Estate or the Business as "hazardous substances," "hazardous
materials," "hazardous wastes," "infectious wastes" or "toxic
substances". Hazardous Substances shall include, but not be limited
to, (a)(A) any "hazardous substance" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act, (B) any
"regulated substance" as defined in the Solid Waste Disposal Act or
(C) any substance subject to regulation pursuant to the Toxic
Substances Control Act, as such laws are now in effect or may be
amended through the Effective Time and any rule, regulation or
administrative or judicial policy statement, guideline, order or
decision under such laws, (b) petroleum and refined petroleum
products, (c) asbestos, asbestos-containing products, and presumed
asbestos-containing material (as defined in 29 CFR 1910.1001(b),
(d) flammable explosives, (e) radioactive materials, (f) radon,
(g) polychlorinated biphenyls, whether contained or not, and (h) any
other substance that is regulated or classified as hazardous or toxic
under any federal, state or local law, statute, ordinance, rule or
regulation.
(r) All Necessary Assets. Except for the Excluded
Assets and any required working capital (other than inventory), the
Purchased Assets comprise all of the assets, properties and rights (including,
without limitation, intellectual property rights and any data processing
equipment, software and/or data files) required to operate the Business in
the manner in which it has heretofore been operated by Seller.
(s) Compliance with Laws. Seller has complied in all
material respects with all applicable laws and statutes and all ordinances,
codes, rules, regulations, judgments, orders, injunctions, writs or decrees
of any Federal, state, local or foreign court or any governmental body or
agency thereof to which Seller may be subject or which are applicable to or
otherwise affect the operations, Business or assets of Seller, including,
without limitation, rules or regulations of the Food and Drug
Administration and similar state, local and foreign agencies (including,
without limitation, all product labeling requirements thereof). Neither
Seller nor any of the Shareholders has received any notice alleging any such
violation, nor does Seller or any of the Shareholders have any knowledge of any
inquiry, investigation or proceeding relating thereto.
(t) Permits and Licenses. Seller has in force and effect,
and has complied with all of the conditions and requirements imposed by, all
material permits, licenses, exemptions, consents, authorizations and
approvals used in or required for the conduct of its Business as currently
conducted ("Licenses and Permits"). Section 6(t) of the Disclosure Schedule
contains a list by each Store location of all Licenses and Permits currently
used in the Business or required for the conduct of the Business as
currently conducted. Neither Seller nor any of the Shareholders has received
any notice of, nor has any knowledge of, any intention on the part of any
appropriate authority to cancel, revoke or modify, or of any inquiries,
proceedings or investigations the purpose or possible outcome of which is the
cancellation, revocation or modification of any such material permit,
license, exemption, consent, authorization or approval.
(u) Intellectual Property. Section 6(u) of the
Disclosure Schedule sets forth a complete and correct list of all of the
following owned (as indicated) or used by Seller in any jurisdiction and all
of the same are valid, subsisting and not expired: (i) patents and patent
applications, (ii) registered and unregistered trademarks, service marks,
logos, Internet domain names, trade names and business names and applications
to register the foregoing, (iii) registered and unregistered copyrights and
applications to register copyrights, and (iv) computer software (other than
computer software that is regularly and commercially available in the form in
which it is used by Seller) (collectively, the "Intangible Rights"). Except
for Seller's permitted used of the "Pick 'N Save" trade name and trademarks,
Seller is the sole and exclusive owner of, and has good and marketable title to,
all of the Intangible Rights, free and clear of all liens or encumbrances.
To Seller's Knowledge, no aspect of the Business (including, without
limitation, the use of the Intangible Rights) conflicts with any intellectual
property or similar rights of others. There are no licenses, agreements or
commitments outstanding or effective granting any other person any right to
use, operate under, license or sublicense, or otherwise concerning, the
Intangible Rights. Neither Seller nor any of the Shareholders has received any
notice or claim that any of the Intangible Rights infringes upon or
conflicts with the rights of any other person. To the best knowledge of Seller
and the Shareholders, there is no material infringement or violation by any
other person of Seller's rights in any of the Intangible Rights.
(v) Brokers' Fees. Seller and the Shareholders have no
liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement for
which the Buyer could become liable or obligated.
(w) Transactions with Related Parties. Section 6(w)
of the Disclosure Schedule contains an accurate and complete list and
description of all agreements, arrangements and understandings relating to
the provision of services, use or transfer of property or assets, or
outstanding indebtedness which are currently in effect or which were in effect
or occurred at any time after January 1, 2002 between the Seller and any of the
following (each, a "Related Party"): (i) each person who is now or at the
time in question was a shareholder, director or officer of Seller; (ii) the
spouses, children, grandchildren, siblings, parents, grandparents, uncles,
aunts, nieces, nephews or first cousins of any person described in (i)
(collectively, "near relatives"); (iii) any trust for the benefit of any
person described in (i) or any of their respective near relatives; and
(iv) any corporation, partnership, joint venture or other entity owned or
controlled by any person described in (i) or any of their respective near
relatives. Except as set forth in Section 6(w) of the Disclosure Schedule,
there is, and at the Closing Date there will be no outstanding indebtedness
or liability owed by Seller to the Shareholders, of any nature, with the
exception of (i) accrued wages and salaries and related benefits due in the
ordinary course of business to those Shareholders who are also employees,
for services performed prior to the Closing Date and (ii) accrued rental and
other obligations under the Seller Affiliate Leases.
(x) Computer Software. Except as disclosed in
Section 6(x) of the Disclosure Schedule, all computer programs and software
owned by Seller or used by Seller in the conduct of the Business and material
to the conduct of the Business (i) are regularly and commercially available
without restriction on an "over-the-counter" or "off-the-shelf" basis and have
been so acquired by Seller and (ii) have not been written or designed or
materially modified specifically for Seller. All computer software used by
Seller or installed on any computers owned or used by Seller is either
(i) owned by Seller or (ii) used pursuant to valid and effective licenses from
the owners thereof. Seller is not in breach or default under any of such
licenses, and has not received any notice suggesting or alleging that any such
breach or default has occurred or that Seller is using or has used any computer
software without an appropriate license therefor.
(y) Knowledge of Seller and Shareholders. For those
warranties and representations set forth in this Section 6 which are qualified
by reference to the Seller's and or the Shareholders' "awareness" or
"knowledge", the Seller and the Shareholders shall be deemed to have knowledge
and be aware of (i) any matter, fact, or thing that is, as of the date hereof
or the Closing Date, actually known to any Shareholder or to any officer of
director of the Seller; and (ii) any matter, fact or thing which reasonably
should be known by any Shareholder after "due inquiry" by such Shareholder,
taking into account any and all roles or positions which such Shareholder may
hold with the Seller and any and all duties and responsibilities he or she may
have vis-a-vis the Seller and its business. For this purpose, "due inquiry"
shall include a review of the accounting and financial records and books of
account of the Seller; a review of the Seller's regularly maintained files and
records relating to its assets, liabilities, and business; a review of the
minute books and stock records of the Seller; a visual inspection of the
Seller's Real Property and tangible personal property; and an inquiry of the
Seller's store managers and Seller's principal law firm and outside auditing
firm.
(z) Reliance. The representations and warranties of
Seller and the Shareholders made in this Section 6 are made by Seller and
the Shareholders with the knowledge and expectation that Buyer and Xxxxxx'x
are placing complete reliance thereon in entering into, and performing each
of their obligations under this Agreement, and the same shall not be affected
or deemed waived in any respect whatsoever by reason of any investigation
heretofore or hereafter conducted or knowledge gained by or on behalf of the
Buyer or Xxxxxx'x (including, without limitation, by any of their advisors,
consultants or representatives) prior to the Closing, whether in contemplation
of this Agreement or otherwise, or by reason of the fact that the Buyer or
any of such advisors, consultants or representatives knew or should have known
that any such representation or warranty is or might be inaccurate, or that any
covenant or undertaking has been or might have been breached, at or prior to
the Closing, and no claims by the Buyer or Xxxxxx'x with respect thereto shall
be waived or otherwise affected as a result of such knowledge on the part of
the Buyer or Xxxxxx'x (or any of their advisors, consultants or representatives)
and Seller and the Shareholders shall not raise any such matter as a defense to
any claim by the Buyer or Xxxxxx'x for indemnification hereunder; provided,
however, that this paragraph (z) shall not be effective with respect to any
actual knowledge (without regard to the definition of "knowledge" in the
preceding paragraph (y)) of the inaccuracy of a representation or warranty of
the Seller hereunder that the Buyer has obtained through the insurance or
engineering services it provides to the Seller.
(aa) No Other Warranties. Except as set forth herein,
and as qualified by the Disclosure Schedule, Seller and the Shareholders
and Seller Affiliate make no express or implied warranties or representations
regarding the Purchased Assets or the Business, and hereby disclaim any such
other representations or warranties.
7. REPRESENTATIONS AND WARRANTIES OF BUYER AND XXXXXX'X. To
induce Seller and the Shareholders to enter into this Agreement, Buyer makes
the following representations, warranties and agreements:
(a) Corporate Organization. Buyer and Xxxxxx'x are each
corporations duly organized and validly existing under the laws of the State of
Wisconsin, all filings necessary for the maintenance of their corporate
existence have been made, and there are no proceedings pending for their
dissolution. Buyer and Xxxxxx'x have all requisite corporate power and
corporate authority to carry on their businesses as they are now being conducted
and to own and lease the properties and assets they now own and lease.
(b) Authorization; Validity. Buyer and Xxxxxx'x each
have all requisite corporate power and authority to enter into this Agreement
and to carry out their obligations hereunder, and the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by their Boards of Directors.
No other corporate proceedings on the part of Buyer or Xxxxxx'x are necessary
to authorize this Agreement or the transactions contemplated hereby and
this Agreement constitutes the valid and legally binding obligation of Buyer and
Xxxxxx'x, enforceable in accordance with its terms.
(c) Litigation. There are no lawsuits, claims or other
proceedings pending or threatened against Buyer or Xxxxxx'x which would
adversely affect Buyer's or Xxxxxx'x ability to perform their obligations
hereunder
(d) Consents and Approvals; No Violations. Except as set
forth in Section 7(d) of the Disclosure Schedule, the execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby will not: (i) violate or conflict with any provision of the charter
documents of Buyer, (ii) breach, violate or constitute an event of default
(or an event which with the lapse of time or the giving of notice or both would
constitute an event of default) under, give rise to any right of termination,
cancellation, modification, acceleration or foreclosure under, or require any
consent or the giving of any notice under, any lending facility, note, bond,
indenture, mortgage, security agreement, lease, license, franchise, permit,
agreement or other instrument or obligation to which Buyer is a party, or by
which Buyer or any of its properties or assets may be bound, (iii) violate
or conflict with any law, statute, ordinance, code, rule, regulation, judgment,
order, writ, injunction, decree or other instrument of any court or
governmental or regulatory body, administration, agency or authority
applicable to Buyer or by which any of its properties or assets may be bound
or (iv) except for the HSR Filings and applications for permits and licenses
required to operate the Business, require any filing by Buyer with, or any
permit, license, exemption, consent, authorization or approval of, or the
giving of any notice by Buyer to, any governmental or regulatory body, agency
or authority. Buyer has all necessary approvals from its lenders and has funds
available or access to funds necessary to complete this transaction and pay the
Purchase Price contemplated by this Agreement.
8. CONDUCT OF BUSINESS PRIOR TO CLOSING. Seller and the
Shareholders, jointly and severally, represent, warrant and covenant that from
the date of this Agreement through the Effective Time, except with the
prior written consent of Buyer or as otherwise specifically provided for by
this Agreement, Seller shall:
(a) carry on the Business in the normal and ordinary
course in a manner consistent with the manner in which the Business has
heretofore been conducted (including but not limited to maintaining the
Stores and all leasehold improvements and equipment contained therein in good
condition, repair and working order);
(b) not enter into any material contract (other than
for purchases of inventory in the usual and ordinary course of business upon
terms consistent with past practices);
(c) not encumber any of the Purchased Assets or enter
into any transaction or make any commitment relating to the Purchased Assets or
the Business, other than in the usual and ordinary course of business;
(d) not hire any additional employees (except in the
ordinary course of business and consistent with past practices) or grant any
increase in the salaries or rates of pay of any employee (except for normal
periodic merit or seniority increases under existing agreements or established
policies and practices of Seller and consistent in amount and timing with
Seller's prior practices), establish any new retirement or fringe benefit plan
or grant any increase in benefits under any existing plan;
(e) maintain all of its property, casualty, liability
and other insurance in effect as of the date hereof through the Closing Date;
(f) promptly pay when and as due all taxes, license fees,
charges, franchises and contributions required to be paid by Seller to
governmental agencies or taxing authorities, with respect to the operation of
the Business through the Effective Time; and
(g) cooperate with Buyer (including by facilitating
reasonable access to the Real Estate and to Seller's employees) in Buyer's
conducting (at Buyer's expense) an examination of the Real Estate at Sussex,
Mukwonago, Muskego, Wales and Oconomowoc (Plank Road) and the operations of
Seller conducted thereon, for the purpose of evaluating the environmental
condition of the Real Estate and identifying the presence or absence of
environmental risks, hazards, or potential liabilities relating thereto.
9. CONDITIONS TO OBLIGATIONS OF BUYER AND XXXXXX'X. Each and
every obligation of Buyer and Xxxxxx'x under this Agreement to be performed
at or before the Closing shall be subject to the satisfaction, acting
reasonably and in good faith, at or before the Closing, of each of the following
conditions, unless waived in writing by Buyer:
(a) Representations and Warranties True. Each and
every representation and warranty of Seller and the Shareholders contained
in Section 6 hereof, and in each certificate and other document delivered or
to be delivered by Seller or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, shall be true and accurate
as of the date when made and as of the Effective Time and the Closing Date as
though such representation and warranty were made by Seller and the
Shareholders at the Effective Time and at the Closing Date.
(b) Performance. Seller and the Shareholders shall have
performed and complied with each and every covenant, obligation and condition
required by this Agreement to be performed or complied with by them at or prior
to the Closing.
(c) No Proceedings or Litigation. As of the Closing,
no suit, action, investigation, inquiry or other proceeding by or before
any court or governmental body or other regulatory or administrative
agency or commission shall be threatened, instituted or pending which
questions the validity or legality of this Agreement or the consummation of the
transactions contemplated hereby.
(d) No Injunction. As of the Closing Date, there shall
not be any effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court, governmental or regulatory agency
directing that the transactions provided for herein or any of them not be
consummated as so provided or imposing any condition on the consummation
of any of the transactions contemplated hereby.
(e) Consents, Approvals, Permits, Etc. All consents,
authorizations, approvals, exemptions, licenses or permits of, or
registrations, qualifications, declarations or filings with, any governmental
body or agency thereof that are required in connection with the sale and
transfer of the Purchased Assets to the Buyer pursuant to this Agreement and
the consummation of the transactions contemplated hereby shall have been duly
obtained or made in form and substance reasonably satisfactory to the Buyer and
its counsel and shall be effective at and as of the Closing Date, including
without limitation, the expiration of the waiting periods under the HSR Filings.
(f) Permits, Licenses. Buyer shall have received all
necessary permits, licenses, consents, approvals and the like from third
parties and governmental and administrative agencies necessary for Buyer's
conduct of the Business as presently conducted.
(g) Title Reports. Buyer, at its expense, shall have
received, not later than ten (10) days prior to the Closing Date, letter
reports of title in the form set forth below for each parcel of the Real Estate
that is the subject of the Seller Affiliate Leases ("Seller-Owned Real
Estate"), issued by a title insurer satisfactory to Buyer (the "Title Insurer"),
together with copies of all recorded documents referred to therein. Each such
Letter Report shall be updated as of the Closing Date and shall reflect title
to the Seller-Owned Real Estate and all easements, restrictions and covenants
of record, subject only to liens for (i) Taxes not yet delinquent or due and
payable, and (ii) municipal and zoning ordinances, recorded easements
and recorded building and use restrictions and covenants, which do not in
any material way impair the use of such property in the manner currently used or
proposed to be used pursuant to existing plans of the Seller or impair the
New Seller Affiliates' good and marketable title to such Real Estate.
(h) Agreement from Seller Affiliate and New Seller
Affiliates. Seller Affiliate and New Seller Affiliates and the Shareholders
shall have entered into an agreement with Buyer and Xxxxxx'x, substantially
in the form of Exhibit 9(h) hereto (the "Real Estate Development Agreement"),
pursuant to which Seller Affiliate and New Seller Affiliates and their members
shall agree that if, during the 5 year period following the Closing Date,
they propose to develop or lease (as lessor) any real estate in the Wisconsin
counties of Waukesha, Milwaukee, Washington, Ozaukee, Racine or Kenosha for
use in a "Competitive Business" (as defined below), they will, before
negotiating with any potential third party tenant, provide notice thereof to
Xxxxxx'x, permit Xxxxxx'x to make a proposal to lease such property for use as
a grocery supermarket, and, if Xxxxxx'x makes such a proposal, negotiate in
good faith with Xxxxxx'x over the terms thereof.
(j) SNDA's. Seller, at its expense, shall have procured
and delivered to Buyer, subordination, nondisturbance and attornment agreements
executed by the lenders to the owners of the Seller-Owned Real Estate, in
substantially the form attached to the New Store Leases.
(k) Sublessee Estoppel Certificates. Seller, at its
expense, shall have procured and delivered to Buyer, certificates executed
by each of the current lessees (other than Seller) or sublessees of space with
the Stores, in substantially the form attached hereto as Exhibit 9(k) (the
"Sublessee Estoppel Certificates").
(l) No Material Adverse Change. There shall have been
no material adverse change in the financial condition, results of operations,
cash flows, assets, liabilities, business or operations of the Seller during
the period between October 25, 2003 and the last Applicable Inventory Date,
except for such changes as are attributable solely to acts or omissions of Buyer
after each Store's Applicable Inventory Date;
(n) Employee Census Data. Seller shall have delivered to
Buyer, at least two weeks prior to Closing, a list by each Store location of all
of the Employees, both full and part time, including their respective wages
or salaries, and any other employee-related information that Buyer may
reasonably request for the purpose of entering the Transferred Employees into
Buyer's payroll system, complying with applicable employment and employment tax
laws and regulations, and similar purposes;
(o) Deliveries at or Prior to Closing. Seller shall
have delivered or caused to be delivered to Buyer the following at or prior to
the Closing, all in form reasonably satisfactory to Buyer's counsel:
(i) Copies of resolutions of Seller's Board
of Directors and its shareholders, authorizing the execution,
delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby,
and authorizing Seller's officers, employees and agents to carry
out and perform the terms and provisions hereof, certified by the
corporate secretary of Seller.
(ii) a closing certificate from the President or
a Vice President of Seller certifying the fulfillment of the conditions
set forth in this Section.
(iii) a legal opinion from Seller's counsel in
form and substance mutually agreed upon by the parties (which
opinion will address, among other things, the due authorization
and execution of the Real Estate Development Agreement by, and its
binding effect on, Seller Affiliate and New Seller Affiliates).
(iv) a certificate of status of Seller issued by
the Department of Financial Institutions of the State of Wisconsin,
dated not more than ten (10) days prior to the Closing Date.
(v) The written consents of all parties that are
required for the assignment by Seller to Buyer of the Assigned
Contracts.
(vi) The New Store Leases duly executed by the
Seller Affiliate and New Seller Affiliates.
(vii) All other instruments and documents
required by this Agreement to be delivered by Seller or the
Shareholders to Buyer, and such other instruments and documents
which Buyer or its counsel may reasonably request not inconsistent
with the provisions hereof so as to effectively transfer to Buyer all
of Seller's right, title and interest in and to the Purchased Assets
as provided by this Agreement, including, without limitation:
(A) a warranty xxxx of sale for the
Purchased Assets;
(B) an assignment of the Assigned
Contracts;
(C) assignments of the Intellectual
Property;
(D) certificates of title to any motor
vehicles constituting Purchase Assets; and
(E) use best efforts to deliver an
Assignment Agreement relating to certain
provisions of the Xxxxxxx Xxxx Employment
Agreement.
10. CONDITIONS TO OBLIGATIONS OF SELLER. Each and every
obligation of Seller under this Agreement to be performed at or before the
Closing shall be subject to the satisfaction, acting reasonably and in good
faith, at or before the Closing, of each of the following conditions, unless
waived in writing by Seller:
(a) Representations and Warranties True. Each and
every representation and warranty of Buyer and Xxxxxx'x contained in Section 7
hereof, and in each certificate and other document delivered or to be
delivered by Buyer or Xxxxxx'x or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, shall be true and accurate
as of the date when made and as of the Closing Date as though such
representation and warranty were made by Buyer and Xxxxxx'x on the Closing Date.
(b) Performance. Buyer and Xxxxxx'x shall have performed
and complied with each and every covenant, obligation and condition required by
this Agreement to be performed or complied with by them at or prior to the
Closing.
(c) No Proceedings or Litigation. As of the Closing,
no suit, action, investigation, inquiry or other proceeding by or before
any court or governmental body or other regulatory or administrative
agency or commission shall be threatened, instituted or pending which
questions the validity or legality of this Agreement or the consummation of the
transactions contemplated hereby.
(d) No Injunction. As of the Closing Date, there shall
not be any effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court, governmental or regulatory agency
directing that the transactions provided for herein or any of them not be
consummated as so provided or imposing any condition on the consummation
of any of the transactions contemplated hereby.
(e) Consents, Approvals, Permits, Etc. All consents,
authorizations, approvals, exemptions, licenses or permits of, or registrations,
qualifications, declarations or filings with, any governmental body or agency
thereof that are required in connection with the sale and transfer of the
Purchased Assets to the Buyer pursuant to this Agreement and the consummation
of the transactions contemplated hereby shall have been duly obtained or made
in form and substance reasonably satisfactory to the Seller and its counsel
and shall be effective at and as of the Closing Date, including without
limitation, the expiration of the waiting periods under the HSR Filings.
(f) Deliveries at Closing. Buyer shall have delivered to
Seller at the Closing:
(i) that portion of the Purchase Price payable
at the Closing;
(ii) the Termination and Release Agreement, duly
executed by Buyer and Xxxxxx'x, as appropriate;
(iii) a closing certificate from the President or
a Vice President of Buyer and Xxxxxx'x certifying the
fulfillment of the conditions set forth in this Section;
(iv) a legal opinion from Xxxxxx'x counsel in
form and substance mutually agreed upon by the parties;
and
(v) the New Store Leases, duly executed by Buyer
and guaranteed by Xxxxxx'x.
11. NONCOMPETITION.
(a) Seller and each of the Shareholders hereby covenant
and agree with Buyer and Xxxxxx'x that for the three (3) year period following
the Closing, they will not, directly or indirectly, as a principal, agent,
owner, employee, trustee, beneficiary, distributor, partner, co-venturer,
officer, director, shareholder or in any other capacity:
(i) engage in, own, operate, manage, join,
finance, control or participate in the ownership, management,
operation or control of, or be paid or employed by or acquire any
securities of, or otherwise become associated with or provide
assistance to any entity, business, activity or enterprise (other
than as a 5% or less shareholder of a publicly held corporation)
which is engaged within the state of Wisconsin in the business of
operating a grocery store or supermarket (including a so-called
"limited assortment" grocery store, but excluding a convenience store
or similar retail outlet for which the sale of grocery items is
incidental or supplemental to another non-grocery business) (a
"Competitive Business");
(ii) divert or attempt to divert any business
from Buyer or Xxxxxx'x or their affiliates or engage in any act which
causes or is likely to cause any present or future customer of the
Business to discontinue or curtail its business with Buyer or
Xxxxxx'x or their affiliates or to do business with another entity,
business, activity or enterprise; or
(iii) solicit, cause or seek to cause any
employee of the Business to terminate, curtail or otherwise
modify his employment relationship with Buyer or Xxxxxx'x or their
affiliates for the purpose of entering into an employment or other
relationship with Seller or any entity, firm, business activity or
enterprise with which Seller is affiliated.
(b) Seller and the Shareholders acknowledge and agree
that the restrictions set forth in this Section 11 are founded on valuable
consideration and are reasonable in duration and geographic area in view of the
circumstances under which this Agreement is executed and that such restrictions
are necessary to protect the legitimate interests of Buyer and Xxxxxx'x.
In the event that any provision of this Section 11 is determined to be invalid
by any court of competent jurisdiction, the provisions of this Section 11
shall be deemed to have been amended and the parties agree to execute any
documents and take whatever action is necessary to evidence such amendment,
so as to eliminate or modify any such invalid provision and to carry out the
intent of this Section 11 so as to render the terms of this Section 11
enforceable in all respects as so modified.
(c) Seller and the Shareholders acknowledge and agree
that irreparable injury may result to Buyer and Xxxxxx'x in the event Seller or
any of the Shareholders breaches any covenant contained in this Section 11,
and that the remedy at law for the breach of any such covenant will be
inadequate. Therefore, if Seller or any of the Shareholders engages or
threatens to engage in any act in violation of the provisions of this
Section 11, Buyer and Xxxxxx'x shall be entitled, in addition to such other
remedies as may be available to it at law or under this Agreement, to injunctive
relief to enforce the provisions of this Section 11.
(d) Nothing in this Section 11 is intended to or shall
prohibit the Shareholders, or any of them, through the Seller Affiliate, the
New Seller Affiliates or any other entity or business formed by the them, from
owning, developing, investing, building or otherwise being involved with
real estate that is leased to or purchased by a party operating a Competitive
Business, provided that the Seller Affiliate, the New Seller Affiliates
and those of their members who are parties to the Real Estate Development
Agreement comply in all respects with their obligations and restrictions
contained in the Real Estate Development Agreement.
12. FURTHER ASSURANCES; BOOKS AND RECORDS.
(a) From time to time after the Closing, Seller shall,
without cost to Buyer, execute and deliver to or cause to be executed and
delivered to Buyer such other and further transfer documents and instruments,
and take such other action as Buyer may reasonably request to carry out more
effectively the sale of the Purchased Assets contemplated by this Agreement
and to confirm and protect Buyer's right, title and interest in and enjoyment
of the Purchased Assets and the Business.
(b) Following the Closing, for a period of five (5)
years, Seller will preserve those of its books, records, files and other
materials which are not part of the Purchased Assets hereunder but that relate
to the operation of the Stores and/or the Purchased Assets, and will make the
same available to Buyer, during reasonable times and upon reasonable advance
notice, for Buyer's inspection and copying, for purposes reasonably related to
Buyer's operation of the Business and/or ownership of the Purchased Assets.
13. EMPLOYEES.
(a) Termination by Seller and Hiring By Buyer. Seller
shall terminate all of the Employees immediately prior to the Effective Time.
Buyer will offer reasonably equivalent employment to substantially all of
Seller's store level Employees, including production bakery department
employees ("Store Employee"). For purposes of this Agreement, the phrase
"substantially all" is defined as provided in Section 109.07 of the Wisconsin
Statutes and the regulations thereunder. Buyer shall offer employment to a
sufficient number of Store Employees so as to ensure that (assuming all such
offers of employment are accepted, and further assuming that no other employees
of Seller lose their employment with Seller) a notice is not required to be
given under the Worker Adjustment and Retraining Notification Act, 29 U.S.C.
Section 2101, et. seq. (the "WARN" Act"). Seller acknowledges that Buyer
intends to hire only a limited number of the corporate office Employees and
other non-store level Employees of Seller, and agrees that Seller will be
solely responsible for (and indemnify Buyer against) any liability under any
plant closing or similar law (including the federal WARN Act and its Wisconsin
counterpart) that may arise as a result of the failure of Buyer to hire any such
corporate office or non-store level Employees or the termination of their
employment by Seller. The Employees hired by Buyer as of the Closing Date are
referred to herein as "Transferred Employees."
(b) Health Insurance. Buyer will provide to the
Transferred Employees health insurance coverage that is reasonably
equivalent to that provided by Seller, effective immediately upon the
commencement of their employment by Buyer, with no waiting period nor any
exclusions from coverage for otherwise-covered conditions that are preexisting,
and without reinstitution of deductibles for the plan year in which the
Effective Time occurs.
(c) Employee Benefit Plans. For purposes of all
employee benefit plans maintained by the Buyer after the Closing Date in
which any Transferred Employees participate, to the extent permitted by the
terms of such plans and applicable law, the Buyer shall cause each such plan
to treat the prior service with Seller as service rendered to the Buyer
for purposes of eligibility and vesting under such plan and for purposes of
vacation pay accrual.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY.
(a) Survival. All representations and warranties of a
party contained in this Agreement or in any certificate or other document
delivered pursuant hereto shall survive the Closing Date (regardless of any
investigation by the other party to this Agreement) for a period of fifteen (15)
months following the Closing, except for the representations and warranties
contained in Subsections 6(a), (b), (c), and (d) which shall survive
indefinitely, and those contained in Subsection 6(n) which shall survive
until the expiration of the applicable statutes of limitations (the period
of survival of any representation or warranty being referred to as its
"Survival Period").
(b) General. From and after the Closing, the parties
shall indemnify each other as provided in this Section 14. The party seeking
indemnification is sometimes referred to herein as the "Indemnified Party"
and the party from which indemnification is sought is sometimes referred
to as the "Indemnifying Party." After the Closing has occurred, the
remedies provided in this Section 14 shall be the exclusive remedies available
to a party for any breach of any provision of this Agreement other than
Section 11.
(c) Seller's and Shareholders' Indemnification Covenants.
Seller and the Shareholders, jointly and severally, will indemnify Buyer and
Xxxxxx'x and their respective officers, directors, employees, agents and
affiliates and hold them harmless from and against any and all liabilities,
demands, claims, suits, proceedings, actions or causes of action,
assessments, losses, penalties, costs, damages and expenses, including
reasonable attorneys' and expert witness fees (collectively, "Damages"),
sustained or incurred by any of them as a result of, arising out of or
incidental to:
(i) any breach or inaccuracy of any
representation or warranty made by Seller or any Shareholder in
this Agreement or in any certificate or other document or instrument
delivered by Seller or any Shareholder to Buyer or Xxxxxx'x in
connection with the transactions contemplated hereby (the
existence of such breach or inaccuracy being determined by taking
into consideration any "materiality" or similar qualification of
the representation or warranty in question that is expressly contained
in and made a part thereof);
(ii) any failure of Seller or any Shareholder to
comply with, or any breach or nonfulfillment by Seller or any
Shareholder of, any covenant of Seller or the Shareholders set forth
in this Agreement or in any certificate or other document or instrument
(other than the Leases) delivered by Seller or any Shareholder to
Buyer or Xxxxxx'x in connection with the transactions contemplated
hereby;
(iii) any failure of Seller or any Shareholder
to timely pay, perform or discharge when due any liability or
obligation of Seller (including, without limitation, any tax
liabilities, including sales and withholding tax liabilities, whether
or not the representation and warranty contained in Section 6(n) is
breached), except for the Contract Liabilities and Assumed Employee
Accruals expressly assumed by Buyer hereunder;
(iv) any failure of Seller to comply with the
requirements of any bulk sales or bulk transfer law; and
(v) any act or omission of Seller occurring
prior to the Effective Time which causes Damages to Buyer and is not
the subject of any representation or warranty in Paragraph 6 above.
(d) Buyer's Indemnification Covenants. Buyer and
Xxxxxx'x, jointly and severally, will indemnify Seller and the Shareholders
for and hold them harmless from and against any and all liabilities, demands,
claims, suits, proceedings, actions or causes of action, assessments, losses,
penalties, costs, damages and expenses, including reasonable attorneys' and
expert witness fees (collectively, "Damages"), sustained or incurred by Seller
or the Shareholders as a result of, arising out of or incidental to:
(i) any breach or inaccuracy of any
representation or warranty made by Buyer or Xxxxxx'x in this
Agreement or in any certificate or other document or instrument
delivered by Buyer or Xxxxxx'x to Seller or the Shareholders in
connection with the transactions contemplated hereby (the existence
of such breach or inaccuracy being determined by taking into
consideration any "materiality" or similar qualification of the
representation or warranty in question that is expressly contained in
and made a part thereof);
(ii) any failure of Buyer or Xxxxxx'x to comply
with, or any breach or nonfulfillment by Buyer or Xxxxxx'x of any
covenant of Buyer or Xxxxxx'x set forth in this Agreement or in any
certificate or other document or instrument delivered by Buyer or
Xxxxxx'x to Seller or the Shareholders in connection with the
transactions contemplated hereby; or
(iii) any failure of Buyer to timely pay, perform
or discharge when due any Contract Liabilities or Assumed Employee
Accruals expressly assumed by Buyer hereunder.
(e) Claims for Indemnification.
(i) Promptly upon an Indemnified Party's
obtaining knowledge of any facts causing it to believe that it has or
will have a claim for indemnification against any Indemnifying Party
or Parties hereunder, the Indemnified Party shall give written notice
of such claim to the Indemnifying Party or Parties. Such written
notice shall set forth the nature and (to the extent then known)
the amount of Damages incurred by or threatened against the
Indemnified Party. Notwithstanding the foregoing, the right of
indemnification hereunder shall not be affected by any failure of
the Indemnified Party to give or by its delay in giving such notice
unless, and then only to the extent that, the rights of the
Indemnifying Party are prejudiced as a result of such failure or delay.
(ii) The Indemnified Party shall tender to the
Indemnifying Party the defense of any claim, suit, proceeding,
action or assessment brought by any third party (hereinafter "Third
Party Claim"). Failure by the Indemnifying Party to notify the
Indemnified Party of its election to defend any such Third Party
Claim within ten (10) days after the Indemnified Party's notice to the
Indemnifying Party of the same shall be deemed a waiver by the
Indemnifying Party of its right so to defend. If the Indemnifying
Party assumes such defense, the obligations of the Indemnifying Party
hereunder as to such Third Party Claim shall include taking all steps
reasonably necessary in the defense or settlement thereof and
holding the Indemnified Party harmless from and against any and all
Damages sustained or incurred by the Indemnified Party which result
from, arise out of or are incidental to any settlement approved by the
Indemnifying Party or any judgment in connection therewith. Legal
counsel engaged by the Indemnifying Party to defend such claim shall
be reasonably acceptable to the Indemnified Party. Except with the
written consent of the Indemnified Party, the Indemnifying Party,
in the defense of any such Third Party Claim, shall not consent to the
entry of any judgment against or adversely affecting the Indemnified
Party (other than a judgment of dismissal on the merits and
without costs) or enter into any settlement unless such
settlement provides that the Indemnified Party is fully released by the
third party as to such Third Party Claim.
(iii) If the Indemnifying Party does not assume
the defense of any such Third Party Claim as provided herein, the
Indemnified Party may defend against such Third Party Claim in such
manner as the Indemnified Party deems advisable or appropriate and
may settle such Third Party Claim or consent to the entry of judgment
with respect thereto upon such terms as it deems advisable or
appropriate, and in such event the Indemnifying Party shall promptly
reimburse the Indemnified Party for the amount of such settlement
or judgment and for any and all Damages sustained or incurred by the
Indemnified Party which result from, arise out of or are incidental to
the defense or settlement of such Third Party Claim.
(f) Time Limitations on Claims. An Indemnified Party
shall not be entitled to indemnification pursuant to this Section 14 with
respect to any claim for indemnification pursuant to subparagraph 14(c)(i) or
subparagraph 14(d)(i) unless written notice of such claim is given by the
Indemnified Party to the Indemnifying Party within the applicable Survival
Period. Any claims for indemnification pursuant to subparagraph 14(c)(i) or
subparagraph 14(d)(i), as the case may be, for which no such notice is given
with the applicable Survival Period, may not be asserted after the
expiration of the applicable Survival Period and is waived,
relinquished and barred.
(g) Other Limitations on Claims. In calculating any
amounts payable to a party seeking indemnification under this Section 14, the
Indemnifying Party shall receive credit for (x) any reduction in actual tax
liability as a result of the facts giving rise to the claim for indemnification,
and (y) any insurance recoveries. Buyer and its affiliates shall have no
claims for Damages hereunder if they have been made whole by Seller's Affiliate
pursuant to the Leases.
(h) Indemnification Threshold and Cap. Notwithstanding
anything to the contrary herein, but subject to the provisions of this
Section 14(h) and those of Section 14(i):
(i) any claim by an Indemnified Party against any
Indemnifying Party under Section 14(c)(i) or 14(d)(i) of
this Agreement shall be payable by the Indemnifying Party
only in the event that the accumulated amount of all claims
against such Indemnifying Party shall exceed the amount of
Four Hundred Thousand and 00/100 Dollars ($400,000.00) in the
aggregate (the "Indemnification Threshold"); and
(ii) the maximum amount for which an Indemnifying
Party shall be obligated to provide indemnification
hereunder shall not exceed Ten Million and 00/100 Dollars
($10,000,000.00) (the "Indemnification Cap").
In applying the Indemnification Threshold and the Indemnification Cap, the
Seller and the Shareholders, on the one hand, and the Buyer and Xxxxxx'x, on
the other hand, shall be considered to be one "Indemnifying Party." At such
time as the aggregate amount of all claims against an Indemnifying Party exceeds
the Indemnification Threshold, such party shall thereafter be liable for the
amount by which the aggregate amount of all such claims exceeds the
Indemnification Threshold, but subject to the Indemnification Cap (and
subject to Section 14(i)).
(i) Zero-Threshold and Uncapped Claims. Notwithstanding
the preceding Section 14(h), claims for indemnification related to a breach
of the representations and warranties contained in Subsections 6(a), (b),
(c), and (d) ("Zero-Threshold Claims") shall not be subject to the
Indemnification Threshold or the Indemnification Cap, but shall be payable on a
dollar-for-dollar basis without any exclusion therefor or limitation thereon.
(j) Treatment of Indemnification Payments. Any
indemnification payments made by the parties pursuant to this Section 14 shall
be treated by the parties for tax purposes as adjustments to the purchase
price unless otherwise required by applicable law.
15. COUPONS. Buyer will not acquire hereunder any of the rights
of Seller to be reimbursed for any manufacturers' coupons accepted by Seller
from customers prior to the Effective Time ("Coupons"), and Buyer does not
assume hereunder (and Seller will hold Buyer harmless from) any liability
of Seller relating to such Coupons or the Seller's acceptance thereof. Buyer
will cooperate with Seller following the Closing, in a manner consistent
with the parties' past practices in the ordinary course of business, to
facilitate Seller's redemption of any such Coupons.
16. GENERAL PROVISIONS.
(a) Amendment and Modification. This Agreement may be
amended, modified and supplemented prior to the Closing only by written
agreement of the parties hereto or as otherwise provided herein.
(b) Waiver of Compliance. Any failure of Buyer or
Xxxxxx'x or Seller or the Shareholders to comply with any obligation, covenant,
agreement or condition contained herein may be expressly waived in writing
by an officer of Seller or an officer of Buyer, respectively, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(c) Fees and Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, and except as otherwise
provided in this Agreement, all fees and expenses incurred by a party in
connection with this Agreement shall be borne by such party, including, without
limitation, all fees of its counsel, consultants and accountants; provided,
however, that Seller shall be liable for and pay all sales taxes, transfer
taxes, and recording fees incurred in connection with the transactions
contemplated by this Agreement. Buyer shall be responsible for the payment of
all filing fees associated with the HSR Filings.
(d) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered or when sent by U.S.
certified or registered mail, postage prepaid:
If to Buyer or to Roundy's, to:
(if by courier or personal delivery):
Xxxxxx'x, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ATTN: Xxxxxx X. Xxxx (MS-2040), Group Vice
President, Legal, Risk and Treasury
(if by US Mail):
Xxxxxx'x, Inc.
X.X. 000
Xxxxxxxxx, XX 00000-0000
ATTN: Xxxxxx X. Xxxx (MS-2040), Group Vice
President, Legal, Risk and Treasury
with a copy to:
Xxxxx Xxxxxxxxxxx Xxxxx S.C.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
ATTN: Xxxx X. Xxxxxxx
or to such other person or address as Buyer or Xxxxxx'x shall furnish to Seller
and the Shareholders in writing in accordance with this Section.
If to Seller or to the Shareholders, to:
XxXxxxx, Inc.
c/o Xxxxxxx X. XxXxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
O'Neil, Xxxxxx & Xxxxxxx, S.C.
000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxx
or to such other person or address as Seller or the Shareholders shall furnish
to Buyer and Xxxxxx'x in writing in accordance with this Section.
Notwithstanding the foregoing, written notice given in any manner
shall nonetheless be effective upon its actual receipt by the party or parties
entitled thereto.
(e) Confidentiality. Seller and the Shareholders
acknowledge and agree that the provisions of this Agreement and the
transactions contemplated hereby are to be held as strictly confidential and
are proprietary to Buyer. No party to this Agreement will (either before or
after the Closing) disclose the financial terms of this transaction to any
third party whatsoever, other than to their legal counsel, their corporate
affiliates, and their other advisors who are directly involved in the
negotiation, documentation and consummation of this transaction; provided, that
(i) immediately following the execution hereof, Buyer and Seller shall
jointly make the press release in form attached as Exhibit 16(e) hereto; and
(ii) Buyer may make disclosure of the terms of this Agreement to its lenders,
investment advisors, investment bankers and investors, and may disclose this
Agreement or its terms to the extent required by federal and state securities
laws and regulations or contractual obligation to make public filings with the
Securities and Exchange Commission. Except as provided in the preceding
sentence, no party hereto will issue any report, statement or release to the
general public, to the trade, or to the general or trade press relating to
this Agreement and the transactions contemplated hereby, except as may be
mutually agreed by the parties hereto.
(f) Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other party,
whether by operation of law or otherwise; provided that Buyer may assign its
rights and delegate its duties and obligations hereunder with respect to the
purchase of one or more of the Stores to one or more affiliates of Buyer,
provided further that no such assignment or delegation by Buyer shall relieve
Buyer or Xxxxxx'x of any of their obligations or liabilities hereunder.
(g) Governing Law; Venue. This Agreement and the legal
relations among the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin. The parties
agree that any litigation arising out of this Agreement or the transactions
contemplated hereby shall be brought exclusively in the Circuit Court in and
for Milwaukee County, Wisconsin or the federal district court for the Eastern
District of Wisconsin.
(h) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(i) Xxxxxx'x Guaranty. Xxxxxx'x hereby guarantees the
full, prompt and complete performance by Buyer of each and every obligation of
Buyer under this Agreement.
(j) Entire Agreement. This Agreement, including the
Disclosure Schedule and Exhibits hereto, and together with the Termination and
Release Agreement, the New Store Leases, the Real Estate Development
Agreement and the other agreements, documents and certificates delivered
pursuant to the terms hereof, set forth the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein, and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral, written or
electronic, by any officer, employee or representative of either party hereto.
(k) Severability. The invalidity of any provision of
this Agreement or portion of a provision shall not affect the validity of any
other provision of this Agreement or the remaining portion of the applicable
provision.
(l) Captions. The section and paragraph headings
contained in this Agreement are for convenience only and shall not be deemed
to affect the meaning or interpretation of any provision of this Agreement.
(m) No Third Party Beneficiaries. Neither this
Agreement nor any provision hereof, nor any statement, schedule,
certificate, instrument or other document delivered or to be delivered
pursuant hereto, nor any agreement entered into or to be entered into pursuant
hereto or any provision thereof, is intended to create any right, claim or
remedy in favor of, or impose any obligation upon, any person or entity other
than the parties hereto and their respective successors, personal
representatives, executors, heirs, beneficiaries, and permitted assigns.
[Signature Page Follows]
day and year first written above.
SELLER: BUYER:
XxXXXXX, INC. ULTRA MART FOODS, INC.
By: ______________________________ By: ________________________________
Xxxxxxx X. XxXxxxx, General Manager Xxxxxx X. Xxxx, Vice President
and Secretary
SHAREHOLDERS: XXXXXX'X, INC.
________________________________ By: ________________________________
Xxxxxxx X. XxXxxxx Xxxxxx X. Xxxx, Group Vice
President, Legal, Risk and
Treasury
________________________________
Xxxxxx Xxxx
________________________________
Xxxxxxxx XxXxxxx
________________________________
Xxxxxxx XxXxxxx
_______________________________________
Xxxxxxx X. XxXxxxx as Trustee of the
Xxxx XxXxxxx Trust FBO Xxxxxxx X. XxXxxxx
_______________________________________
Xxxxxxx X. XxXxxxx as Trustee of the
Xxxx XxXxxxx Trust FBO Xxxxxxx X. XxXxxxx
_______________________________________
Xxxxxxxx X. XxXxxxx as Trustee of the
Xxxx XxXxxxx Trust FBO Xxxxxxxx X. XxXxxxx
_______________________________________
Xxxxxx Xxxx as Trustee of the Xxxx XxXxxxx
Trust FBO Xxxxxx Xxxx
_______________________________________
Xxxxxxx X. XxXxxxx as Trustee of the Xxxxxxxx
XxXxxxx Trust FBO Xxxxxxx X. XxXxxxx
_______________________________________
Xxxxxxx X. XxXxxxx as Trustee of the Xxxxxxxx
XxXxxxx Trust FBO Xxxxxxx X. XxXxxxx
_______________________________________
Xxxxxxxx X. XxXxxxx as Trustee of the Xxxxxxxx
XxXxxxx Trust FBO Xxxxxxxx X. XxXxxxx
_______________________________________
Xxxxxx Xxxx as Trustee of the Xxxxxxxx XxXxxxx
Trust FBO Xxxxxx Xxxx
EXHIBIT A
Wisconsin, Waukesha County, Mukwonago, 0000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000
Wisconsin, Waukesha County, Muskego, S74 X00000 Xxxx Xxxxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxx 00000
Wisconsin, Waukesha County, Wales, 000 Xxxxx Xxxxx Xxxx, Xxxxx, Xxxxxxxxx 00000
Wisconsin, Waukesha County, Oconomowoc, 00000 Xxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx 00000
Wisconsin, Waukesha County, Oconomowoc, 0000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxx 00000
Wisconsin, Waukesha County, New Berlin, 00000 Xxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxx 00000
Wisconsin, Waukesha County, Sussex, N65 X00000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxx 00000
LIST OF OMITTED EXHIBITS AND SCHEDULES TO ASSET PURCHASE AGREEMENT DATED
JULY 9, 2004 BY AND BETWEEN XXXXXXX, INC., CERTAIN SHAREHOLDERS OF
XXXXXXX, INC., ULTRA MART FOODS, INC. AND XXXXXX'X, INC.
EXHIBITS
Exhibit 1(e) Sublease Termination Agreement
Exhibits 1(g)(1-5) Forms of Store Leases
Exhibit 9(h) Real Estate Development Agreement
Exhibit 9(k) Form of Sublessee Estoppel Certificate
Exhibit 16(e) Press Release
DISCLOSURE SCHEDULES
Schedule 1(b)(iii) Non-Operating Assets
Schedule 4(b) Inventory Margin Percentage
Schedule 6(a) Corporate
Schedule 6(c) Compliance
Schedule 6(d) Good Title
Schedule 6(e) Leases, Contracts, etc.
Schedule 6(g) Equipment
Schedule 6(i) Absence of Certain Changes or Events
Schedule 6(j) Litigation and Other Proceedings
Schedule 6(k) Fringe Benefit Plans
Schedule 6(l) Consents and Approvals
Schedule 6(m) Employees
Schedule 6(n) Taxes
Schedule 6(o) Condition of Real Estate
Schedule 6(p) Employment Practices
Schedule 6(q) Environmental
Schedule 6(s) Compliance with Laws
Schedule 6(t) Permits and Licenses
Schedule 6(u) Intellectual Property
Schedule 6(v) Broker's Fees
Schedule 6(w) Transactions with Related Parties
Schedule 6(x) Computer Software
THE ABOVE-DESCRIBED EXHIBITS AND SCHEDULES ARE OMITTED FROM THIS FILING
PURSUANT TO ITEM 601(B)(2) OF REGULATION S-K. THE REGISTRANT, XXXXXX'X, INC.,
HEREBY AGREES TO FURNISH A COPY OF SUCH EXHIBITS AND SCHEDULES TO THE COMMISSION
UPON REQUEST.
