Eagle Food Ctr BankruptcyIN THE ~TED STATES B~~CY CO~.
FOR THE NORTHE~ DIST~CT OF ILLI~
E~TE~ DI~SION
)
In re: )
)
EAGLE FOOD CENTERS, INC., )
eta., )
)
Debtors. )
Case No. 03-15299 (PSH)
(Jointly Administered)
Chapter 11
Hon. Pamela S. Hollis
ORDER AUTHORIZING AND APPROVING (I) SALE OF CERTAIN OF THE
DEBTORS' ASSETS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUM-
BRANCES, (ID'ASSUMPTION 'AND ASSIGNMENT OF
CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED
LEASES~ AND (IIB ASSUMPTION OF CERTAIN LIABILITIF, g
Upon the motion, dated June 17, 2003 (the "Motion")~ of the above-
captioned debtors and debtors-in-possession (the "Debtors"), for, inter alia, entry of an
order under 11 U.S.C. §§ 105(a), 363, 365, and 1146(c) and Fed. R. Bankr. P. 2002,
6004, 6006, and 9014 (the "Sale Order") authorizing (i) the Debtors' sale (the "Sale") of
assets related to Store 130 located in Dubuque, Iowa and Store 234 located in Clinton,
Iowa (the "Acquired Assets") to Downtown Eagle Corporation (the "Purchaser") as
identified in, and pursuant to, that certain Acquisition Agreement, by and between Eagle
Food Centers, Inc. and Downtown Eagle Corporation (the "Purchase Agreement," a copy
Unless otherwise del'reed, capitalized terms used herein shall have the meanings
ascribed to them in the Motion or the Purchase Agreement, as the case may be.
of which is attached hereto as Exhibit t), (ii) the Debtors' assumption and assignment to
the Purchaser of certain executory contracts and unexpired lease (the "Assumed Con-
tracts") and that certain assignment of unexpired lease (the "Assignment Agreement"2 and
together with the Assumed Contracts, collectively the "Property Interests"), pursuant to
and as described in the Purchase Agreement, and (iii) the assumption by the Purchaser of
certain liabilities (the "Assumed Liabilities"), pursuant to and as described in the Pur- '
chase Agreement; and the Court having entered an order on June 27, 2003 (the "Proce-
dures Order") approving (i) the Bidding Procedures, (ii) the Granting of Certain Bid
Protections, (iii) the forms of Purchase Agreement and Lease Termination Agreement,
and (iv) the Notice Procedures and the setting of a Sale Hearing; and a hearing on the
· Motion having been held on September 30, 2003 (the "Sale Hearing"), at which time all
interested parties were offered an opportunity to be heard with respect to the Motion; and
the Court having reviewed and considered (i) the Motion, (ii) the objections thereto, if
any, (iii) the argmnants of counsel made, and the evidence proffered or adduced, at the
Sale Hearing; and it appearing that the relief requested in the Motion is in the best
interests of the Debtors, their estate and creditors and other parties in interest; and upon
the record of the Sale Hearing and these cases; and after due deliberation thereon; and
good cause appearing therefor, it is hereby
In particular, the Assignment of Lease and Agreement dated November 10, 1987
between Lucky Stores, Inc. and Eagle Food Centers, L.P~ for Stores 130 and 234.
FOUND AND DETERMINED THAT:3
A. The court has jurisdiction over this Motion pursuant to 28 U.S.C.
§§ 157 and 1334, and this matter is a core proceeding pursuant to 28 U.S.C. §
157(b)(2)(A) and (N). Venue of these cases and the Motion in this district is proper
under 28 U.S.C. §§ 1408 and 1409.
B. The statutory predicates for the relief sought in the Motion are
sections 105, 363, 365 and 1146(c) of 1 t U.S.C. §§ 101 et seq. (the "Bankruptcy Code"),
and Fed. R. Bankr. P. 2002, 6004, 6006 and 9014.
C. As evidenced by the affidavits of service and publication previ-
ously filed with the Court, and based on the representations of counsel at the Sale
Hearing, (i) proper, timely, adequate and sufficient notice of the Motion, the Sale
Hearing, the Sale, the assumption and assignment of the Property Interests, and the Cure
Amounts has been provided in accordance with 11 U.S.C. §§ 102(1), 363 and 365 and
Fed. R. Bankr. P. 2002, 6004 and 9014 and in compliance with the Procedures Order, (ii)
such notice was good and sufficient, and appropriate under the particular circumstances,
and (iii) no other or further notice of the Motion, the Sale Hearing, the Sale, the assump-
tion and assignment of the Property Interests, or the Cure Amounts is or shall be required.
Findings of fact shall be construed as conclusions of law and conclusions of law shall
be construed as findings of fact when appropriate. See F~d. R. Bankr. P. 7052.
3
D. As demonstrated by (i) the testimony and other evidence proffered
or adduced at the Sale Hearing, (ii) the representations of counsel made on the record at
the Sale Hearing, the Debtors have marketed the Acquired Assets and conducted the sale
process in compliance with the Procedures Order.
E. Each Debtor (i) has full corporate power and authority to execute
the Purchase Agreement and all other documents contemplated thereby, and the sale of'
the Acquired Assets by the Debtors has been duly and validly authorized by all necessary
corporate action of each of the Debtors, (ii) has all of the corporate power and authority
necessary to consummate the transactions contemplated by the Purchase Agreement,
(iii) has taken all corporate action necessary to authorize and approve the Purchase
Agreement and the consummation by such Debtors of the transactions contemplated
thereby, and (iv) no consents or approvals, other than those expressly provided for in the
Purchase Agreement, are required for the Debtors to consummate such transactions.
F. Approval of the Purchase Agreement and consummation of the
Sale at this time are in the best interests of the Debtors, their creditors, their estat6s, and
other parties in interest.
G. The Debtors have demonstrated both (i) good, sufficient, and
sound business purpose and justification and (ii) compelling circumstances for the Sale
pursuant to 11 U.S.C. § 363(b) prior to, and outside of, a plan of reorganization in that,
4
among other things, the Sale at the current time will maximize the value of the Acquired
Assets and the Business (as defined below) on behalf of the Debtors' creditors and estates.
H. A reasonable oppommity to object or be heard with respect to the
Motion and the relief requested therein has been afforded to all interested persons and
entities, including: (i) the Office of the United States Trustee; (ii) counsel for the Pur-
chase~, (iii) counsel for the Creditors' Committee; (iv) counsel for the Debtors'
postpetition lender; (v) all entities known to have expressed an interest in a ~ansaction
with respect to the Acquired Assets during the past six months; (vi) all entities known to
have asserted any lien, claim, encumbrance or interest (the "Interests") in .or upon the
Acquired Assets; (vii) all federal, state, and local regulatory or taxing authorities or
recording offices wh/ch have a reasonably known interest in the relief requested by the
Motion; (viii) all parties to Property Interests; (ix) the United States Attorney% office; (x)
the Securities and Exchange Commission; (xi) the Internal Revenue Service; and (xii) all
entities on the 2002 service list.
I. The Purchase Agreement was negotiated, proposed and entered
into by the Debtors and the Purchaser without collusion, in good faith, and fzom arm's-
length bargaining positions. Neither the Debtors nor the Purchaser have engaged in any
conduct that would cause or permit the Purchase Agreement to be avoided under 11
U.S.C. § 363(n).
5
J. The Purchaser is a good faith purchaser under 11 U.S.C. § 363(m)
and, as such, is entitled to all of the protections afforded thereby. The Purchaser will be
acting in good faith within the meaning of 11 U.S.C. § 363(m) in closing the transactions
contemplated by the Purchase Agreement at all times after the entry of this Sale Order.
K. The consideration provided by the Purchaser for the Acquired
Assets pursuant to the Purchase Agreement (i) is fair and reasonable, (ii) is the highest '
and best offer for the Acquired Assets, (iii) will provide a greater recovery for the
Debtors' creditors than would be provided by any other practical available alternative, and
(iv) constitutes reasonably equivalent value and fair consideration under the Bankruptcy
Code and under the laws of the United States, any state, territory, possession, or the
District of Columbia~
L.
The transfer of the Acquired Assets to the Purchaser will be a
legal, valid, and effective transfer of the Acquired Assets, and will vest the Purchaser
with all right, title, and interest of the Debtors to the Acquired Assets free and clear of all
Interests, including, but not limited to those (A) that purport to give to any party a right or
option to effect any forfeiture, modification, right of first refusal, or termination of the
Debtorst or the Purchaser's interest in the Acquired Assets, or any similar rights and (B)
relating to taxes arising under or out of, in connection with, or in any way relating to the
operation of the Business prior to the Closing Date.
6
M. The Purchaser would not have entered into the Purchase Agree-
merit and would not consummate the transactions contemplated thereby, thus adversely
affecting the Debtors, their estates, and their creditors, if the sale of the Acquired Assets
to the Purchaser and the assignment of the Property Interests and Assumed Liabilities to
the Purchaser was not free and clear of all Interests of any kind or nature whatsoever, or if
the Purchaser would, or in the future could, be liable for any of the Interests.
N. The Debtors may sell the Acquired Assets free and clear of all
Interests of any kind or nature whatsoever because, in each case, one or more of the
standards set forth in 11 U.S.C. § 363(0(1)-(5) has been satisfied. Those ,(i) holders of
Interests and (ii) non-debtor parties to Property Interests who did not object, or who
withdrew their objections, as the case may be, to the Sale or the Motion are deemed to
have consented pursuant to 11 U.S.C. § 363(f)(2). Those (i) holders of Interests and
(ii) non-debtor parties to Property Interests who did object fall within one or more of the
other subsections of 1 t U.S.C. § 363(f) and are adequately protected by having their
Interests, if any, attach to the cash proceeds of the Sale ultimately attributable to the
property against or in which they claim an Interest.
O. The (i) transfer of the Acquired Assets to the Purchaser and
(ii) assumption and assignment to the Purchaser of the Property Interests and Assumed
Liabilities, will not subject the Purchaser to any liability whatsoever with respect to the
operation of the business related to the Acquired Assets (the "Business") prior to the
Closing Date or as a direct or indirect result of such transfer under the laws of the United
States, any state, territory, or possession thereof, or the District of Columbia, based, in
whole or in part, directly or indirectly, on any theory of law or equity, including, without
limitation, any theory of equitable law, including, without limitation, any theory of
antitrust or successor or transferee liability, and including, without limitation, any
statutory or other non-bankruptcy law obligation or liability othenvise imposed upon a '
purchaser of assets outside the ordinary course of business.
P. The sale of the Acquired Assets to the Purchaser is a prerequisite to
the Debtors' ability to' confirm and consummate a plan or plans of reorganization. The
Sale is a sale in contemplation of a plan and, accordingly, subject to the resolution of the
1146(c) Stipulation (as defined herein), may be a transfer pursuant to 11 U.S.C.
§ 1146¢).
Q. The Debtors have demonstrated that it is an exercise of their sound
business judgment to assume and assign the Property Interests to the Purchaser in
connection with the consummation of the Sale, and the assumption and assignment of the
Property Interests is in the best interests of the Debtors, their estates, and their creditors.
The Property Interests being assigned to, and the liabilities being assumed by, the
Purchaser are an integral part of the Acquired Assets being purchased by the Purchaser
and, accordingly, such assumption and assignment of Property Interests and Liabilities are
8
reasonable, enhance the value of the Debtors' estates, and do not constitute unfair discrimination.
R. The Debtors have, (i) to the extent necessary, cured, or have
provided adequate assurance of cure, of any default existing prior to the date hereof with
respect to the Property Interests, within the meaning of 11 U.S.C. § 365C0)(1)(A), and, (ii)
to the extent necessary, provided compensation or adequate assurance of compensation to
any party for any actual pecuniary loss to such party resulting from a default prior to the
date hereof with respect to the Property Interests, with the meaning of 11 U.S.C.
§ 365(b)(1)(B), and, to the extent necessary, the Purchaser has provided adequate
assurance of their future performance with respect to the Property Interests, within the
meaning of 11 II.S.C. § 365(b)(1)(C).
NOW THEREFORE, iT IS HEREBY ORDERED, ADIUDGED, AND
DECREED THAT:
General Provisions
1. The Motion is GRANTED, as further described herein.
Approval of the Purchase Am'eement
2. The Purchase Agreement, and all of the terms and conditions
thereof, is hereby approved.
3. Pursuant to 11 U.S.C. § 363(b), the Debtors are authorized and
directed to consummate the Sale, pursuant to and in accordance with the terms and
conditions of the Purchase Agreement.
4. The Debtors are authorized and directed to execute and deliver,
and empowered to perform under, consummate and implement, the Purchase Agreement,
together with all additional instruments and documents that may be reasonably necessary
or desirable to implement the Purchase Agreement, and to take all further actions as may
be requested by the Purchaser for the purpose of assigning, transferring, granting,
conveying and conferring to the Purchaser or reducing to possession, the Acquired
Assets, or as may be necessary or appropriate to the performance of the obligations as
contemplated by the Purchase Agreement.
Transfer of Acquired Assets
5. Pursuant to I 1 U.S.C. §§ 105(a) and 363(0, the Acquired Assets
shall be transferred to the Purchaser, and upon consummation of the Purchase Agreement
(the "Closing") shall be, flee and clear of all Interests of any kind or nature whatsoever
with all such Interests of any kind or nature whatsoever to attach to the net proceeds of
the Sale in the order of their priority, with the same validity, force and effect which they
now have as against the Acquired Assets, subject to any claims and defenses the Debtors
may possess with respect thereto.
6. Any and all net proceeds as a result of the sale of Acquired Assets
shall be utilized consistent with the provisions of the Financing (as defined in the
Purchase Agreement) and with respect to other liens, if any, to the extent permitted by the
Bankruptcy Code.
10
7. Except as expressly permitted or otherwise specifically provided by
the Purchase Agreement or this Sale Order, all persons and entities, including, but not
limited to, all debt security holders, governmental, tax, and regulatory authorities} lenders,
trade and other creditors, holding Interests or other claims of any kind or nature whatso-
ever against or in the Debtors, the Acquired Assets or the Purchaser by reason of such
Purchaser's acquisition of Debtors' Assets outside the ordinary course of business
(whether legal or equitable, secured or unsecured, matured or matured, contingent or
non-contingent, s~dor or subordinated), arising under or out of, in connection with, or in
any way relating to, the Debtors, the Acquired Assets, the operation of the Business prior
to the Closing Date, or the transfer of the Acquired Assets to the Purchaser, hereby are
forever barred, estopped, and permanently enjoined from asserting against the Purchaser,
its successor or assign, its property, or the Acquired Assets, such persons' or entities'
Interests or claims.
8.
The transfer of the Acquired Assets to the Purchaser pursuant to
the Purchase Agreement constitutes a legal, valid, and effective transfer of the Acquired
Assets, and shall vest the Purchaser with all right, title, and interest of the Debtors in and
to the Acquired Assets free and clear of all Interests of any kind or nature whatsoever.
11
Assumption and Assignment
to Purchaser of Property Interests
9. Pursuant to 11U.S.C. §§ 105(a) and 365, and subject to and
conditioned upon the Closing of the Sale, the Debtors' assumption and assignment to the
Purchaser, and the Purchaser's assumption on the terms set forth in the Purchase Agree-
ment, of the Assumed Contracts is hereby approved, and the requirements of t 1 U.S.C.
§ 36503)(1) with respect thereto are hereby deemed satisfied. Additionally, pursuant to
11 U.S.C. § 365 and in accordance with this Sale Order, the Debtors are authorized to
assume and assign to Purchaser the Assignment Agreement4, to the extent thit the
Assignment Agreement is executory contracts; provided, however, that (except as
otherwise provided in paragraphs 11 and 12 of this Sale Order) to the extent the Assign-
ment Agreement is not an executory contract, the Purchaser is subject to all of the rights,
interests, obligations and duties imposed on the assignee under, pursuant to and as
provided in the Assignment Agreement and any documents entered into in connection
with the assumption and assignment of the Property Interests, as if the Purchaser was the
original assignee under the Assignment Agreement, and the requirements of 11 U.S.C.
§ 365(b)(1) with respect thereto are hereby deemed satisfied.
The Debtors shall assume and assign the Assignment Agreement pursuant to that
certain form of Assignment Agreement of Lease Documents attached to this Sale
Order as Exhibit 2
12
10. The Debtors are hereby authorized and directed in accordance with
11 U.S.C. §§ 105(a) and 365 to (a) assume and assign to the Purchaser, effective upon the
Closing of the Sale, the Property Interests flee and clear of all Interests of any kind or
nature whatsoever and (b) execute and deliver to the Purchaser such documents or other
instruments as may be necessary to assign and transfer the Property Interests and As-
sumed Liabilities to the Purchaser.
11. The Property Interests shall be transferred to, and remain in full
force and effect for the benefit of, the Purchaser in accordance with their respective terms,
notwithstanding any provision in the Property Interests (including those of the type
described in sections 365(b)(2) and (0 of the Bankruptcy Code) that prohibits, restricts, or
conditions such assignment or transfer. Pursuant to 11 U.S.C. § 365(k), the Debtors shall
be relieved from any further liability with respect to the Property Interests after such
assignment to and assumption by the Purchaser.
12. All defaults or other obligations of the Debtors under the Property
Interests arising or accruing prior to the date of this Sale Order as specifically listed on
Exhibit 3 attached hereto, (without giving effect to any acceleration clauses or any default
provisions of the kind specified in section 365(b)(2) of the Bankruptcy Code) shall be
cured by the Debtors at the Closing of the Sale or as soon thereafter as practicable, and
the Purchaser shall have no liability or obligation arising or accruing prior to the date of
13
the Closing of the Sale, except as otherwise expressly provided in the Purchase Agreement.
13. Each non-Debtor party to an Assumed Contract and each non-
Debtor party to an Assignment Agreement hereby is forever barred, estopped, and
permanently enjoined from asserting against the Debtors or the Purchaser, or the property
of either of them, any default, liability or obligation (whether legal or equitable, secured
or unsecured, matured or matured, contingent or non-contingent, senior or subordinate)
existing as of the Closing Date. Without limiting the foregoing, each non-Debtor party to
an Assignment Agreement is hereby forever barred, estopped, and permanently enjoined
from asserting against the Purchaser or the Debtors, or their property, any.claim for
indemnification under such Assignment Agreement that is based upon, arises from or
relates in any way to any event(s) and/or occurrence(s) on or before the Closing Date.
Additional Provisions
14. The consideration provided by the Purchaser for the Acquired
Assets under the Purchase Agreement shall be deemed to constitute reasonably equivalent
value and fair consideration under the Bankruptcy Code and under the laws ofth¢ United
State~, any state, terdtow, possession, or the District of Columbia.
15. The consideration provided by the Purchaser for the Acquired
Assets under the Purchase Agreement is fair and reasonable and may not be avoided
under section 363(n) of the Bankruptcy Code.
14
16. On the Closing Date of the Sale, each of the Debtors' creditors is
authorized and directed to execute such documents and take all other actions as may be
necessary to release its Interests in the Acquired Assets, if any, as such Interests may have
been recorded or may otherwise exist.
17. This Sale Order (a) shall be effective as a determination that, on
the Closing Date, all Interests of any kind or nature whatsoever existing as to the Debtors
or the Acquired Assets prior to the Closing have been unconditionally released, dis-
charged and terminated, and that the conveyances described herein have been effected,
and (b) shall be binding upon and shall govern the acts of all entities including without
limitation, all filing agents, filing officers, title agents, title companies, recorders of
mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental
departments, secretaries of state, federal, state, and local officials, and all other persons
and entities who may be required by operation of law, the duties of their office, or
contract, to accept, file, register or otherwise record or release any documents or instru-
ments, or who may be required to report or insure any title or state of title in or to' any of
the Acquired Assets.
18. Each and every federal, state, and local governmental agency or
department is hereby directed to accept any and all documents and instruments necessary
and appropriate to consummate the transactions contemplated by the Purchase Agree-
ment.
15
19. All entities who are presently, or on the Closing Date may be, in
possession of some or all of the Acquired Assets are hereby directed to surrender
possession of the Acquired Assets to the Purchaser on the Closing Date.
20. The Purchaser shall have no liability or responsibility for any
liability or other obligation of the Debtors arising under or related to the Acquired Assets
or resulting directly or indirectly fi:om its acquisition of the Acquired Assets, other than
those specifically assumed by the Purchaser in the Purchase Agreement. Without limiting
the generality of the foregoing, and except as otherwise specifically provided herein and
in the Purchase Agreement, the Purchaser shall not be liable for any claims against the
Debtors or any of their predecessors or affiliates, the Purchaser shall have no obligations
or liabilities under any statute applicable to the sale of goods outside the ordinary course
of business, and the Purchaser shall have no direct, indirect, successor or vicarious
liabilities of any kind or character whether known or unknown as of the Closing Date,
now existing or hereafter arising, whether fixed or contingent, w/th respect to the Debtors
or any obligations of the Debtors arising prior to the Closing Date, including, but'not
limited to, liabilities on account of any taxes arising, aecming, or payable under, out of, in
connection with, or in any way relating to the operation of the Business prior to the
Closing Date, and including, but not limited to, statutory or other non-bankruptcy law
obligations otherwise imposed upon purchasers of goods outside the ordinary course of
business.
16
21. Under no circumstances shall the Purchaser be deemed a successor
of or to the Debtors for any Interest against or in the Debtors or the Acquired Assets of
any k/nd or nature whatsoever. The sale, transfer, assignment and delivery of the
Acquired Assets shall not be subject to any Interests, and Interests of any kind or nature
whatsoever shall remain with, and continue to be obligations of, the Debtors. All persons
holding Interests against or in the Debtors or the Acquired Assets of any kind or nature'
whatsoever shall be, and hereby are, forever barred, estopped, and permanently enjoined
from asserting, prosecuting, or otherwise pursuing such Interests of any kind or nature
whatsoever against the Purchaser, its property, its successors and assigns,.or the Acquired
Assets with respect to any Interest of any kind or nature whatsoever such person or entity
had, has, or may have against or in the Debtors, their estates, officers, directors, share-
holders, or the Acquired Assets. Following the Closing Date, no holder of an Interest in
the Debtors shall interfere with the Purchaser's title to or use and enjoyment of the
Acquired Assets based on or related to such Interest, or any actions that the Debtors may
take in their Chapter 11 cases.
22. This Court retains jurisdiction to enforce and implement the terms
and provisions of the Purchase Agreement, all amendments thereto, any waivers and
consents thereunder, and of each of the agreements executed in connection therewith in
all respects, including, but not limited to, retaining jurisdiction to (a) compel delivery of
the Acquired Assets to the Purchaser, (b) compel delivery of the. purchase price or
17
performance of other obligations owed to the Debtors, (c) resolve any disputes arising
under or related to the Purchase Agreement, except as othenvise provided therein, (d)
interpret, implement, and enforce the provisions of this Sale Order, and (e) protect the
Purchaser against any Interests in the Debtors or the Acquired Assets or any liabilities or
obligations described in paragraph O of this Court's findings, of any kind or nature
whatsoever, attaching to the proceeds of the Sate or otherwise imposed on the Purchaser
as a direct or indirect result of such transfer.
23. The transactions contemplated by the lharchase Agreement are
undertaken by the Purchaser in good faith, as that term is used in section 363(m) of the
Bankruptcy Code, and accordingly, the reversal or modification on appeal of the authori-
zation provided herein to consummate the Sale shall not affect the validity of the Sale to
the Purchaser, unless such authorization is duly stayed pending such appeal. The
Purchaser is a purchaser in good faith of the Acquired Assets, and is entitled to all of the
protections afforded by section 363(m) of the Bankruptcy Code.
24. The terms and provisions of the Purchase Agreement and this Sale
Order shall be binding in all respects upon, and shall inure to the benefit of, the Debtors,
their estates, and their creditors, the Purchaser, and its respective affiliates, successors and
assigns, and any affected third parties including, but not limited to, all persons asserting
Interests in the Acquired Assets to be sold to the Purchaser pursuant to the Purchase
Agreement, notwithstanding any subsequent appointment of any trustee(s) under any
18
chapter of the Bankruptcy Code, as to which trustee(s) such terms and provisions likewise
shall be binding.
25. The failure specifically to include any particular provisions of the
Purchase Agreement in this Sale Order shall not diminish or impair the effectiveness of
such provision, it being the intent of the Court that the Purchase Agreement be authorized
and approved in its entirety.
26. The Purchase Agreement and any related agreements, documents
or other instnnnents may be modified, mended or supplemented by the parties thereto, in
a writing signed by both parties, and in accordance with the terms thereof, without further
order of the Court, provided that any such modification, amendment or supplement does
not have a material adverse effect on the Debtors' estates.
27. The transfer of the Acquired Assets pursuant to the Sale may
ultimately be exempt fi.om taxation as provided in section 1146(c) of the Bankruptcy
Code, provided that a plan is ultimately confirmed in these cases and subject to the
ultimate resolution of that certain Stipulation and Agreed Order Between Eagle Food
Centers, Inc. and States of Illinois and Iowa (the "1146(c) Stipulation"), entered by the
Bankruptcy Court on August 21, 2003 [Docket no. 478].
28. As provided by Rules 6004(g) and 6006(d) of the Federal Rules of
Bankruptcy Procedure, this Sale Order shall not be stayed for 10 days after the entry of
the Sale Order and shall be effective immediately upon entry.
19
Dated: Chicago, Illinois
September__, 2003
ENTERED
SEP 2 O 2003
PAMELA S HOLLIS
BA.~!KRUPTCY JUDGE
UNITED STATES BANKRLrPTCY JUDGE
2O
Exhibit 1
PURCHASE AGREEMENT
ACQUISITION AGREEMENT
by and between
EAGLE FOOD CENTERS, INC.
as Seller,
and
DOWNTOWN EAGLE CORPORATION,
as Purchaser
Dated as of [ ], 2003
5'!5~2'D.~_4.~_4f?2(.D_/~ glI9t20034:28 PM xxxiii
TABLE OF CONTENTS
m ~or-u ^ c~ ^ ~.:r~ c ,', r ~ nr ASSETS
Section
$cction
Section
Section
Section
Section
Section
Page
THE F-T
Section 2.1 ................................................................................................................. C!odng
oeCtlOn ............................................................................................................... mg
................................. ~ SELLER
geCtlO~ o 1 n ......... ,,~
........... _ 5.._.}. '
.......... ~ /D - 9/19/2003 4~8 PM XXXiV
.......... 1 1 ............................................................................................... ~.,~; ...... al]on.,
Section 4.1 ................................................................................
........ 1.3 ................................................................................................................. ~ol. or~
ARTICLE V!
............ 5 .. 6_ D,_ 9/1972003 4.28 PM XXXV
8.9..
gAO ......
......... ~463,Tlt~ 9/19~2003 4:28 PM XXXVi
ARTICLE 'IX
T ^ I~T 1~ ~1~ EPLHIBITE
Ex~J ......
_. j 'man?
................
4~-54j~O~/D(2 9/19~2003 4:28 PM xxxvii
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of [ ], 2003 (the "Agreement"), is
made by and between EAGLE FOOD CENTERS, INC., a Delaware corporation (the "Seller"),
and [ ], a [ ] [DOWNTOWN EAGLE CORPORATION. an Iowa
corporation] (the "Purchaser"). Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in Article IX.
WHEREAS, the Seller is engaged in the retail grocery business and operates grocery
stores;
WHEREAS, on April 7, 2003, the Seller, along with certain o fits Affiliates, filed voluntary
petitions (the "Petitions") for relief commencing a case (the "Chapter I 1 Case'') under Chapter 11
of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy
Court for the Northern District of Illinois (the "Bankruptcy Court');
WHEREAS, the Seller, along with certain of its Affiliates, has continued in the
management and possession of its assets and business as debtor-in-possession in the Chapter 11
Case pursuant to Sections 1107 and 1108 of the Bankruptcy Code and subject to the terms and
conditions of this Agreement; and
WHEREAS, the Purchaser. desires to purchase and acquire and the Seller desires to sell,
convey, assign and transfer, or' cause to be sold, conveyed, assigned and transferred, to the
Purchaser, the Acquired Assets relating to the store locations identified on Schedule A hereto (the
"Store Locations"), and the Purchaser is willing to assume, and the Seller desires to assign and
delegate to the Purchaser, the Assumed Liabilities, all in the mariner and subject to the terms and
conditions set forth herein and in accordance with Sections 105, 363 and 365 of the Bankruptcy
Code.
NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants, and agreements set forth herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
Section &.l~ Acquired Assets. On the terms and subject to the conditions set forth in this
Agreement and subject to approval of the Bankruptcy Court pursuant to Sections 10'5,363 and 365
of the Bankruptcy Code, at the Closing the Seller shall sell, assign, transfer, convey, and deliver, or
cause to be sold, assigned, transferred, conveyed and delivered, to the Purchaser and the Purchaser
shall pumhase and accept from the Seller all right, title, and interest of the Seller in and to the
following (collectively, the "Acquired Assets"):
(a) the grocery, general merchandise, liquor, dairy, frozen foods, cigarettes,
health and beauty care, meat, produce, seafood, deli, bakery, floral and pharmacy inventory at each
Store Location (the "Inventory");
(b) all rights and incidents of interest of the Seller to the agreements, contracts
and arrangements that are listed or described on Schedule 1 .l(b);
(c) ail machinery, equipment, computers, furniture, furnishings, fixtures, office
supplies, tools, order entry devices, freezers, refrigerators, pharmacy equipment and all other
tangible personal property owned by the Seller that are used exclusively in the operation of the
Store Locations and located on any Owned Real Property or premises subject to the Property
09/19/03 4:28 PM
Leases (collectively, the "Tangible Personal Property"), including without limitation, such of the
foregoing as are listed or described on Schedule 1.1(c);
(d) to the extent transferable, all rights as of the Closing under all warranties,
representations and guarantees made by suppliers, manufacturers and contractors in connection
with the Acquired Assets;
(e) (i) the real property that is listed and described on Schedule 1.1(e)(i) (the
"Owned Real Property") and (ii) the real property leases that are listed or described on Schedule
1.1 (e)(ii) (the "Property Leases");
(f) to the extent transferable, all Governmental Authorizations and all nendine
applications thereof Or renewals thereof;
(~) all books and records (other than books and records relating to Taxes),
including, without limitation, fixture plans, construction drawings and specifications and
maintenance records of the Seller exclusively relating to the Tangible Personal Property, the
Owned Real Property or the Property Leases; and
(ghh_) all the fights, properties or assets that are listed or described on Schedule
1. l(gl~__).
EXCEPT FOR SPECIFIC REPRESENTATIONS AND WARRANTIES CONTAINED
IN THIS AGREEMENT, THE ACQUIRED ASSETS ARE BEING SOLD ON AN "AS IS,"
"WHERE IS" BASIS AND SELLER DOES NOT MAKE ANY WARRANTIES, EXPRESS OR
IMPLIED, OF MERCHANTABILITY, FITNESS OR OTHERWISE WITH RESPECT TO THE
ACQUIRED ASSETS WHICH EXTEND BEYOND THE AFORESAID SPECIFIC
REPRESENTATIONS AND WARRANTIES.
Section 1.2 Excluded Assets. Notwithstanding anything contained in this Agreement to
the contrary, the following rights, properties and assets (collectively, the "Excluded Assets") will
not be included in the Acquired Assets:
(a) all. cash, cash equivalents, checks in transit, credit card receipts, marketable
securities or accounts receivable arising out of the operation of the Store Locations existing on the
date hereof or arising after the date hereof and until 11:59 om Central Time the day before the
Closine Date. of the Seller;
(b) all rights, properties and assets of the other operations (other than the Store
Locations) of Seller and any of its Affiliates;
(c) all vendor-owned equipment, including without limitation the items listed
or described on Schedule 1.2(c);
(d) all of the agreements, contracts and arrangements that have terminated or
expired prior to the Closing in the ordinary course;
(e) any claims, demands, actions, rights or causes of action arising under
Sections 544 through 553, inclusive, of the Bankruptcy Code;
(f) any Tangible Personal Property transferred or disposed of in the ordinary
course prior to the Closing;
......... 545463,q~[~ 9/19/2003 4.28 PM 2
(g) the company seal, minute books, charter documents, stock or equity record
books and such other books and records as pertain to the organization, existence or capitalization
of the Seller or any Affiliate of Seller as well as any other records or materials relating to the Seller
or any Affiliate of Seller generally and not exclusively involving or exclusively related to the
Acquired Assets or the operation of the Store Locations;
(h) any preferred cardholder records, customer lists or check-cashing lists;
(i) all contracts of insurance;
(j) any right, property or asset that is listed or described on Schedule 1.20);
(k) other than the software licenses listed or described on Schedule l.l(b), all
U.S. and other letter patent, patents, patent applications, software, know-how, trade names,
trademarks, registered copyrights, service marks, trademark registrations and applications, service
mark registrations and applications, copyright registrations and applications, internet domain
names and any licenses to use any of the foregoing (the "Intellectual Property");
(I) all bank accounts or other banking arrangements relating to the Store
Locations (including all rights or incidents of interest with respect to the cash or cash equivalents
in such bank accounts);
(m) all prepaid items or dep0si~s relating to the Store Locations;
(n) any right the Seller has with respect to any Tax refunds, credits or attributes,
and any claims therefor;
(o) all Tax Returns and books and records relating to Taxes; and
(p) any Seller Plan.
Section 1.3 Assumed Liabilities. On the terms and subject to the conditions set forth in
this Agreement, at the Closing, the Purchaser shall assume from the Seller and its Affiliates and
thereafter pay, perform or otherwise discharge in accordance with their terms, and shall hold the
Seller and its Affiliates harmless from all of the liabilities and obligations (of any nature or kind,
and whether based in common law or statute or arising under written contract or otherwise, known
or unknown, fixed or contingent, accrued or unaccrued, liquidated or unliquidated, real or
potential) of the Seller and its Affiliates: (i) with respect to, arising out of or relating to, the
ownership, possession or use of the Acquired Assets and the operation of the Store Locations on
and after the Closing Date, including without limitation, all of the obligations and liabilities arising
under the agreements, contracts and arrangements included in the Acquired Assets; (ii)in
connection with or arising under Environmental Laws or Taxes relating to the Owned Real
Property or the real property subject to the Property Leases or ad valorem Taxes levied with
respect to the Acquired Assets or Store Locafions~ but only to the extent that such taxes arise as a
result of Purchaser's o~)eration of the store locations on or after the Closine Date: and (iii) as listed
or d scribed Sched 1 1 3 ~ 11..'~ r~l ....... i~.A ~:.~.;~;,; ......· fe~. ;.. c.~,:~ 5 5]
(collectively, the "Assumed Liabilities").
Section 1.4 Excluded Liabilities. The Purchaser shall not assume or agree to pay,
perform or otherwise discharge any liabilities, obligations or expenses other than the Assumed
Liabilities.
............ 545463,~D12 9/t9/2003 4:28 PM 3
Section 1.5 Purchase Price.4- In consideration for the Acquired Assets, the Purchaser
shall, in addition to the assumption of the Assumed Liabilities, pay to the Seller at the Closing the
Cash Purchase Price in cash by wire transfer of immediately available funds to an account or
accounts designated by the Seller. The "Cash Purchase Price" shall be the sum of the Inventory
Amount and {*]Six-Hundred and Fifty Thousand Dollars ($~}650.000).
Section 1.6 Inventory Amount. i-)Exhibit 1.6(a) sets forth the "Preliminary Inventory
Amount." The Preliminary Inventory Amount was determined in accordance with Exhibit 1.6(a)
on a store-by-store basis for each of the Store Locations.
Co) Twa day:At 11:59 o.m. Central Time the day prior to Closing, one or more
third party inventory counting firms mutually agreed upon by the Seller and the Purchaser shall
perform a physical inventory of all Inventory at the Store Locations on a store-by-store basis.
................... ~: ............... : ...... ~ ................................................ hall
............ ~ ....................................~ .................... Seller and Pumhaser shall
share the cost of the inventory counting firm(s) performing such physical inventory equally and
agree to execute a joint retention agreement(s) with the inventory counting firm(s) on usual and
customary terms. The procedures and policies to be followed in taking such physical inventory are
set forth in Exhibit 1.6Co). The day prior to the Closing, Seller shall prepare and deliver to
Purchaser a statement (the "Inventory Statement") that shall set forth the value of the Inventory as
of the date of the Inventory Statement (the "Inventory Amount"). The Inventory Amount shall be
.determined based on (il the physical inventory conducted in accordance with this Section 1.6 and
Exhibit 1.6Co) and the methodology, policies, principles and processes set forth in Exhibit 1.6(a)
and used to prepare the Preliminary Inventory Amount~ minus (iii the sum of the ~oss receiots of
each Store Location on the last full business weekday oreceding the C]osina Date multiplied bT' a
factor of 0.72.
(c) During the preparation of the Inventory Statement and the taking of the
physical inventory by the third party inventory counting firm(s), to the extent-reasonably necessary
for the preparation of the Inventory Statement and the performance of the physical inventory, the
Seller shall, in accordance with the procedures and policies set forth in Exhibit 1.6(b), (i) provide
the Purchaser and the Purchaser's authorized representatives with reasonable access to books,
records, facilities and employees of the Seller and (ii) cooperate fully with the Purchaser and
Purchaser's authorized representatives, including the provision on a timely basis of all information
that is reasonably available.
(d) If the Inventory Statement is prepared on the basis of the physical inventory
conducted in accordance with this Section 1.6 and Exhibit 1.6(b) and the Inventory Amount is
calculated using the methodology, policies, principles and processes set forth in Exhibit 1.6(a) and
used to prepare the Preliminary Inventory Amount, the Inventory Amount reflected on the
Inventory Statement delivered by the Seller shall be the Inventory Amount hereunder absent
manifest error. The Inventory Amount shall be final and binding on the parties and no
post-Closing adjustment shall be made or asserted by either party.
Section 1.7 Allocation of Purchase Price for Tax Purposes. The Seller and the
Purchaser agree that, for all Tax and other reporting purposes, the allocation of the Purchase Price
to the Acquired Assets shall be as set forth on Exhibit 1.7, which Exhibit 1.7 shall be completed
within fifty-five (55) days of the date of this Agreement and which, when completed, will have
5 ~5'~ 5L~.'2545463;'D~ 9/19/2003 4:28 PM 4
been arrived at by arm's length negotiation in compliance with Section 1060 of the Internal
Revenue Code of t986, as amended. If the Inventory Amount differs from the Preliminary
Inventory Amount, the Seller and the Purchaser agree to make appropriate adjustments to the
allocation set forth in Exhibit 1.7. If the Seller and the Purchaser are unable to resolve any material
differences with regard to the allocation of the Purchase Price, then any disputed matters will be
finally and conclusively determined by an independent certified accounting firm or independent
appraisal firm (the "Allocation Arbiter"), which Allocation Arbiter shall be mutually agreed upon
by the Purchaser and the Seller, provided, however, that such agreement shall not be unreasonably
withheld or delayed. Promptly, but not later than fifteen (15) days after its acceptance of
appointment hereunder, the Allocation Arbiter will determine (based solely upon representations
of the Purchaser and the Seller and not by independent review) only those matters in dispute, and
will render a written report as to the disputed matters and the resulting allocation of the Purchase
Price, which report shall be conclusive and binding upon the parties. Such Allocation Arbiter's
fees and expenses shall be born equally by the parties. Within fifteen (15) days after the
allocations have been determined, the Purchaser will provide the Seller with copies of Form 8594
and any required exhibits thereto, consistent with the allocations of this Section 1.7 and. Exhibit
1.7. Each of the Purchaser and the Seller shall (i) timely file all forms (including Internal Revenue
Service Form 8594) and Tax Returns required to be filed in connection with such allocation, (ii) be
bound by such allocation for purposes of determining Taxes, (iii) prepare and file, or cause to be
prepared and filed, its Tax Returns on a basis consistent with such allocation and (iv) take no
position, or cause no position to be taken, inconsistent with such allocation on any applicable Tax
t~etum, in any audit or proceeding before any. Taxing Authority, in any report made for Tax,
fmancial accounting or any other purposes, or otherwise. If the allocation set forth on Exhibit 1.7
is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly
notify the other party hereto concerning the existence and resolution of such dispute.
Section 1.8 Intellectual Property. It is expressly agreed that the Purchaser is not
purchasing acquiring or otherwise obtaining any right title or interest in and to the Intellectual
Property, including without limitation the names "Eagle Food Centers", "Foodco", "BOGO Food
and Deals" or "Eagle Country Markets" or any trade names, trademarks, identifying logos or
service marks related thereto or employing the words "Eagle Food Centers", "Foodco", "BOGO
Food and Deals" or "Eagle Country Markets" or any part or variation of any of the foregoing or
any confusingly similar trade names, trademark or logo. Notwithstanding the above, the nartie~
agree to negotiate in good faith the acouisition or licensing of ail the ri~h_t.s,_title, or i~nterest in the
name "Eagle Country Markets" and any trade names: trademarks, identifyin~g logos or service
works related thereto or employin~ the words "Eagle Country Markets" or any part or variation
thereof, as those ri*-hts, title, or interests relate to the Store Locations_~
Section 1.9 Prorations. All rent. additional rent. real ~ro..~R~ert~v taxes, onerating expenses
and utility charges arising uursuant to the terms of the Property Leases and applicable to periods
prior to the Closing Date shall be the responsibility of Seller (and to the extent any such amounts
are then unknown, the same shall be reasonably estimated at the Closing based on ~rior bills or
Other nertinent evidence'}. All such anaounts which relate to periods on or after the Closing Date
shall be the resnonsibilitv of Purchaser. All such items shall be appropriately prorated bv the
parties at the Closing=
ARTICLE II
THE CLOSING
Section 21.2.1.Closin/g. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher &
........... 54_.463[D 2 9/19/2003 .28 PM 5
Flom (Illinois), 333 West Wacker Drive, Chicago, Illinois 60606 at 10:00 a.m. on the later of(i)
the third business day after the conditions set forth in Article VI shall have been satisfied or waived
and (ii) at such other time, date, and place as shall be fixed by agreement between the panics (the
date of the Closing being herein referred to as the "Closing Date"). For financial, accounting and
tax purposes, the Closing shall be deemed conclusively to have occurred at 11:59 p.m. Central
Time on the Closing Date.
Section 2.2
Purchaser:
Deliveries at Closing. (a) At the Closing, the Seller shall deliver to the
(i) a duly executed bill of sale, substantially in the form of Exhibit
2.2(a)(i) attached hereto, transferring the Acquired Assets to the Purchaser;
(ii) all other conveyance documents reasonably necessary to transfer to
the Pumhaser the Acquired Assets, including special or limited warranty deeds (or
their local equivalent) regarding the Owned Real Property purchased by the
Purchaser;
(iii) a certificate confirming that the Seller is not a "foreign person"
within the meaning of Section 1445 of the Code;
(iv) the assignment and assumption agreement to' be entered into
between the Seller and the Pul:chaser (the "Assignment and Assumption
Agreement") substantially in the form of Exhibit 2.2(a)(iv) attached hereto, duly
executed by the Seller evidencing the assignment and assumption by the Purchaser
of the Assumed Liabilities;
(v) the Acquired Assets by making the Acquired Assets available to the
Purchaser at their present locations; and
(vi) all other previously undelivered certificates and other documents
required to be delivered hereunder by the Seller to the Purchaser at or prior to the
Closing Date.-; and
(vii) A coCv~oft~he Section 363/365 Order.
(b) At the Closing, the Purchaser shall deliver to the Seller:
(i) the Cash Purchase Price by wire transfer in immediately available
funds to an account or accounts designated by the Seller;
(ii) the Assignment and Assumption Agreement duly executed by the
Purchaser; and
(iii) all other previously undelivered certificates and other documents
required to be delivered by the Purchaser to the Seller at or prior to the Closing Date
in connection with the transactions contemplated by this Agreement.
5 ~54 f.3 iD~'2_5 _4~46 ~3~'D..~ 9/19~2003 4:28 PM 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as disclosed in the written statement delivered by the Seller to the Purchaser at or
prior to the execution of this Agreement (the "Seller Disclosure Schedule") or in the Seller SEC
Documents, the Seller represents and warrants to the Purchaser as follows:
Section 3.1 Organization. The Seller is validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite power and authority to own, lease
and operate its properties and to carry on its business as it is now being conducted, except where
the failure to be so existing and in good standing or to have such power and authority would not
have a Material Adverse Effect. The Seller is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification or licensing necessary, except where the failure to be so
duly qualified, licensed and in good standing would not have a Material Adverse Effect. The
Seller has heretofore made available to the Purchaser a complete and correct copy of the certificate
of incorporation and bylaws of the Seller, as currently in effect.
Section 3.2 Authority Relative to this A,m-eement.
(a) Subject to the entry of the Section 363/365 Order, the Seller has the
{5orporate power and authority to .enter into this. Agreement and to carry out its obligations
hereunder. The execution, delivery, and performance of this Agreement by the Seller and the
consummation by the Seller of the transactions contemplated by this Agreement have been duly
authorized by all requisite corporate action. This Agreement has been duly and validly executed
and delivered by the Seller, and upon the entry of the Section 363/365 Order (assuming this
Agreement constitutes a valid and binding obligation of the Purchaser), will constitute a valid and
binding agreement of the Seller, enforceable against the Seller in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to general equitable principles.
(b) Notwithstanding anything to the contrary contained herein, no provision of
this Agreement is binding upon the Seller unless and until this Agreement is approved by the
Bankruptcy Court and the Section 363/365 Order is entered by the Bankruptcy Court.
Section 3.3 Consents and Approvals. Upon the entry of the Section 363/365 Order, no
consent, approval, or authorization of, or declaration, filing, or registrati°n with, any
Governmental Entity will be required to be made or obtained by the Seller in connection with the
execution, delivery, and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement, except (a) for filings pursuant to the Hart-Scott-Rodino
,antitrust Improvements Act of 1976, as amended (the "HSR Act"), and pursuant to equivalent
legislation in any other applicable jurisdiction, Co) those already obtained and (c) for consents,
approvals, authorizations, declarations, filings, or registrations, which, if not obtained, would not
have a Material Adverse Effect.
Section 3.4 Financial Information. Seller has delivered or made available to Purchaser
copies of statements of profit and loss with respect to each Store Location (such financial
information being collectively referred to herein as the "Summary Financial Information"). The
Summary Financial Infprmation has not necessarily been prepared in accordance with United
States generally accepted accounting principles ("GAAP") and has not been audited by
independent accountants, but in the opinion of Seller, includes the adjustments necessary to make
the financial information contained therein not misleading. Certain financial information, footnote
5'[5!f:g.'D'2~5~..~4~()3_i_D,'2 9/19/2003 4:28 PM 7
disclosure and material adjustments required in financial statements prepared in accordance with
GAAP have been omitted from, or condensed in, the Summary Financial Information.
Section 3.5. No Violations. Assuming that the consents, approvals, authorizations,
declarations, and filings referred to in Section 3.3 have been made or obtained and shall remain in
full force and effect and the conditions set forth in Article VI shall have been satisfied, at the
Closing neither the execution, delivery, or performance of this Agreement by the Seller, nor the
consummation by the Seller of the transactions contemplated by this Agreement, nor compliance
by ~e.Seller with any of the provisions hereof will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or bylaws of the Seller, (b) result in a violation, or
b. reach of, or constitute (with or without due notice or lapse of time) a default (or give rise to any
right of termination, cancellation, vesting, payment, exercise, acceleration, suspension or
revocation) under any of the terms, conditions or provisions of any contract, agreement or
arrangement that is included as an Acquired Asset or any material note, bond, mortgage, deed of
trust, security interest, indenture, license, contract, agreement, plan or other instrument or
obligation by which any of the Store Locations may be bound or affected or (c) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Seller or the Acquired Assets,
except in the case of clauses (b) or (c) for violations, breaches, defaults, terminations,
cancellations, accelerations, vestings, payments, exercises, impositions, suspensions or
revocations that (i) ~, ........*-~..
would not .......... j ......~, ta have a Material Adverse Effect or (ii) are
excused by or unenforceable as a result of the filing of the Petitions or as a result of the entry of the
Section 363/365 Order.
Section 3.6. No Default; Compliance with Applicable Laws; Permils.
(a) TheTo the knowledge of Seller. the Seller is not in default or violation of
any term, condition or provision of (i) its certificate of incorporation or bylaws or (ii) with respect
to the Store Locations only, any statute, law, rule, regulation, judgment, decree, order, arbitration
award, concession, grant, franchise, permit or license or other governmental authorization or
approval applicable to the Seller, including applicable federal, state, local and foreign laws and
regulations relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface or subsurface strata); but
excluding from the foregoing clause (ii), defaults or violations which ...... ~ .~^* ~- .......... ~-~,.
activities in which the Purchaser is or proposes to be engaged or as a result of any acts or omissions
by, or the status of any facts pertaining to, the Purchaser.
...... To the knowledee of Seller, the Seller currently holds all ?cr:,n:tz.
......... ,.Permits necessary or proper for the current use, occupancy and operation of the
Acquired Assets held by the Seller, and all such Permits are in full force and effect.
Seller has not received any written notice from any Governmental Enti~revoking, modifying or
refusing to renew any Permit or providing notice of violations under any Permit.
Section 3.7 Books and Records. The books, records and accounts of the Seller
maintained with respect to the Store Locations fairly reflect, in reasonable detail, the transactions
and the assets and liabilities of the Seller with respect to the Store Locations in all material
respects. The Seller has not engaged in any transactions with respect to the Store Locations,
maintained any bank account for the Store Locations or used any of the funds of Seller in the
conduct of the Store Locations except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of the Seller.
9/19/2003 4:28 PM 8
Section 3.8 Title to Property. Upon the entry of the Section 363/365 Order, at the
Closing the Seller will sell, assign, transfer and deliver, as the case may be, to the Purchaser the
Acquired Assets, and the Acquired Assets will be sold, assigned, transferred or delivered, as the
case may be, free and clear of all liens, claims, encumbrances and security interests other than
Permitted Exceptions.
Section 3.9 Inventory. At the time of the physical inventory provided for in Section 1.6,
(i) the Inventory (A) shall be undamaged, of merchantable and standard quality, in compliance
with applicable product and labeling specifications, (B)will not be adulterated or misbranded
within the meaning of the Federal Food, Drag and Cosmetic Act of 1938 or applicable state or
local law, (C) will consist of items ora kind reasonably salable in the ordinary course of operation
of the Store Locations; and (ii) the retail shelf prices of the Inventory will be at their usual and
customary levels and will not have been increased in anticipation of the physical inventory
provided for in Section 1.6.
Section 3.10 Conduct of Business. From May 3, 2003 to the date hereof, the Seller has
not taken any action that, if taken after the date hereof, would violate Section 5.1 hereof.
Section 3.11 Property Leases. Upon the entry of the Section 363/365 Order, thc Seller
will sell, transfer and assign to the Purchaser a valid leasehold interest with respect to each of the
Property Leases which is a lease (as opposed to a sublease) and a valid subleasehold interest with
.respect to each of the Property Leases which is a sublease free and clear of all liens, claims,
encumbrances and security interests other than Permitted Exceptions. Schedule 1.1(e)(ii)
identifies insmaments through which the Seller derives its leasehold interest in the Property Leases
(including all amendments thereto). Complete and correct copies of the Property Leases have been
tc ......................... ~. ....... b3, the Purchaser and none of the Property Leases
have been modified in any material respect e~cept to the extent that such modifications are
disclosed by the copies delivered tc
........................ v .....n , the Purchaser.
Section 3.12 Real Property.
(a) To the knowledge of Seller, there are no proceedings, claims, disputes or
conditions affecting any of the Owned Real Property or the real property subject to the Property
Leases that might curtail or interfere with the use of such property in any material manner. To the
knowledge of Seller, neither the whole nor any portion of the Owned Real Property or the real
property subject to the Property Leases is subject to any governmental decree or order to be sold or
is being condemned, expropriated or otherwise taken by any public authority with or without
compensation therefor, nor, to the knowledge of Seller, has any such condemnation~ expropriation
,or taking been proposed.
(b) Seller has not received any written notice of, or other writing referring to,
any requirements or recommendation by an insurance company that has issued a policy covering
any part of the Owned Real Property or the real property subject to the Property Leases or by any
board of fire underwriters or other body exercising similar function, requiring or recommending
any material repairs or work to be done on any part of the Owned Real Property or the real property
subject to the Property Leases, which repair or work has not been completed.
Section 3.13 Environmental Matters.
(a) Seller is in compliance with all applicable Environmental Laws (which
compliance includes, but is not limited to, the possession by Seller of all permits and other
governmental authorizations required under applicable Environmental Laws, and compliance with
the terms and conditions thereof), except where failure to be in compliance would not have a
Material Adverse Effect.
Co) There is no Environmental Claim against Seller pending or, to the
knowledge of Seller, threatened against Seller (with respect to the Store Locations) '.'.'k/ch ;;'c::ld
Section 3.14 Employee Relations. With respect to the operation of the business
conducted at the Store Locations, the Seller is in compliance with all applicable laws, rules and
regulations which relate to wages, hours, leaves of absence, discrimination in employment, union
organization and collective bargaining and is not liable for any arrears of wages for failure to
comply with any &the foregoing, except for such failures to be in compliance that would not be
rea~nc, b~.y !i!:e!y to have a Material Adverse Effect. No labor strike, slowdown, stoppage or
lockout is pending, or to the knowledge of the Seller, threatened against or affecting the business
conducted at the Store Locations and during the past two years there has not been any such action.
To the knowledge of the Seller, no union organizing or election activities involving any non-union
employees have occurred in the past two years or are threatened as of the date hereof. The Seller is
in compliance with the requirements of the WARN Act and has no liabilities pursuant to the
WARN Act, except for such failures to be in compliance and such liabilities that would not be
reasonably l/lccl.vbe expected to have a Material Adverse Effect.
Section 3.15 Brokers. No Person is entitled to any brokerage, financial advisory,
finder's or similar fee or commission payable by the Seller in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of the Seller,
.except Huron Consulting Group, LLC, whose fees and expenses will be paid by the Seller in
accordance with its agreement with such firm.
Section 3.16 Subleases
(a'} Exhibit 3.16. the Sublease Schedule (which shall be updated as of the
Closin~ Date) is a true. accurate and com~)lete list of the Subleases. a con_v_ of eacl~
of which has been delivered to the Purchaser. or shall be delivered to the Purchaser
no later than five days before the Closin~ Date. Except as set forth in the Sublease
Schedule. no ~avments. credits, rebates, concessions or other amounts are
outstandino_ or are due to any of the subtenants.
(b~ To the knowledge of Seller, alt of the Subleases are in full force and effec!
and free from any default on the part &the subtenants or the landlord thereunder.
None of the subtenants has made or asserted in xa~tin~ anv~de_f_e_~_s._e,~set off or_
counterclaim with resoect to its Subleases.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows:
Section 4.1 Organization. The Purchaser is a ~corporation] validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the ~corporate~} power and
authority and all necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted. The Purchaser is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where the character of its
properties owned or held under lease or the nature of its acti'Cities make such qualification
necessary.
Section 4.2 Authority Relative to this A~eement The Purchaser has the {:corporate]
power and authority to enter into this Agreement and to carry out its obligations hereunder. The
5463 D:2 9/19/2003 4.28 PM 10
execution, delivery, and performance of this Agreement by the Purchaser and the consummation
by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by
all requisite corporate actions. This Agreement has been duly .and validly executed and delivered
by the Purchaser and (assuming this Agreement constitutes a valid and binding obligation of the
Seller) constitutes a valid and binding agreement of the Purchaser, enforceable against the
Purchaser in accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally from time to time in
effect and to general equitable principles.
Section 4.3 Consents and Approvals. Except for consents, approvals, authorizations,
declarations, filings or registrations which may be required under the HSR Act and under
equivalent legislation in any other applicable jurisdiction, no consent, approval or authorization of,
or declaration, filing or registration with, any Governmental Entity is required to be made or
obtained by the Purchaser in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this Agreement.
Section 4.4 No Violations. Neither the execution, delivery or performance of this
Agreement by the Purchaser, nor the consummation by the Purchaser of the transactions
contemplated by this Agreement, nor compliance by the Purchaser with any of the provisions
hereof, will (a) conflict with or result in any breach of any provisions of the articles or certificate of
incorporation, as the case may be, bylaws or other organizational documents of the Purchaser, (b)
result in a violation or breach of, or constitute (with or without due notice or lapse of time) a
default (or give rise to any right of terminati6n,' Cancellation, acceleration, vesting, payment,
exercise, suspension, or revocation) under any of the terms, conditions or provisions of any note,
bond, mortgage, deed of trust, security interest, indenture, license, contract, agreement, plan or
other insmanent or obligation to which the Purchaser is a party or by which the Purchaser or the
Pumhaser's properties or assets may be bound or affected or (c) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Purchaser or the Purchaser's properties or
assets, except in the case of clauses (b) and (c) for violations, breaches, defaults, terminations,
cancellations, accelerations, vestings, payments, exercises, suspensions or revocations that would
not individually or in the aggregate have a material adverse effect on the Purchaser.
Section 4.5 Brokers. No Person is entitled to any brokerage, financial advisory,
finder's or similar fee or commission payable by the Purchaser in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of a Purchaser:
Section 4.6 Financing. As of the date hereof and on the Closing Date the Purchaser will
have sufficient funds available to deliver the Cash Purchase Price to the Seller, consummate the
transactions contemplated by this Agreement and satisfy the Assumed Liabilities in the ordinary
course of business.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business by the Seller Pending the Closing. The Seller
covenants and agrees that, except (i) as contemplated by this Agreement, (ii) as disclosed in
Schedule 5.1, (iii) with the prior written consent of the Purchaser, (iv) as required by, arising out
of, relating to or resulting from, the Petitions or otherwise approved by the Bankruptcy Court or (v)
to the extent required by the lenders in connection with the Financing, after the date hereof and
prior to the Closing Date; bm provided that at no time shall the actions or lack thereof of the Seller
nermitted hereunder cause a Material Adverse Effect:
5 ~5 ! f.?.~D'2~4_~46~3(D~ 9/19/2003 4:28 PM 1 1
(a) the Seller shall, and shall cause its Affiliates to, use commercially
reasonable efforts to conduct the business of the Store Locations only in the ordinary course; and
(b) the Seller shall not, and shall cause its Affiliates not to, take the following
actions with respect to the Store Locations and the Acquired Assets:
(i) pledge, mortgage, acquire, sell, lease or dispose of a material
portion of any Store Location. an,,' Tan,o/ble Personal Pronertv or the Acquired
Assets with respect thereto except in the ordinary course;
(ii) make any increases in, or additions to, the compensation payable to
any of the Transferred Employees, including pursuant to a Seller Plan, other than in
the ordinary course or pursuant to existing Seller Plans or arrangements;
(iii) fail materially to maintain books, records and accounts of the Seller
relating to the Acquired Assets or any Store Location in the ordinary course;
(iv) make a material change of any of the accounting methods used bY
the Seller with respect to the Store Locations unless required by GAAP or
applicable law; and
(v) authorize or'enter into an agreement to do any of the foregoing.
Section 5.2 Access and Information. Subject to applicable law and the reasonable
requirements of the Seller to protect competitively sensitive information, the Seller shall afford to
the Purchaser and to the Purchaser's financial advisors, legal counsel, accountants, consultants,
financing sources and other authorized representatives reasonable access during normal business
hours throughout the period prior to the Closing Date to the books, records, properties and
personnel of the Seller relating to or involved in the operation of the Store Locations and, during
such period, shall furnish reasonably promptly to the Purchaser such information as the Pumhaser
reasonably may request; provided, that all such access shall occur only following prior notice to a
person designated by the Seller and only if accompanied by a designee of the Seller.
Section 5.3 Approvals and Consents: Cooperation: Notification.
(a) The parties hereto shall use their respective reasonable best efforts, and
cooperate with each other, to obtain as promptly as practicable all approvals, consents or waivers
from Governmental Entities required in order to consummate the transactions contemplated by
th/s Agreement; provided, that the obligations of the parties to obtain any consent, approval or
waiver from the Bankruptcy Court shall be governed exclusively by Section 5.3(c).
(b) The Seller and the Pumhaser shall take all actions necessary to file as soon
as practicable all notifications, filings and other documents required to obtain all approvals,
consents or waivers from Governmental Entities (other than the Bankruptcy Court), including,
without limitation, under the HSR Act, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission, the Antitrust Division of the Department of Justice
and any other Governmental Entity for additional information or documentation and to respond as
promptly as practicable to all inquiries and requests received from any Governmental Entity in
connection therewith. The Purchaser agrees to take promptly any and all steps necessary to avoid
or eliminate each and every impediment under any antitrust or competition law that may be
asserted by any federal, state or local antitrust or competition authority so as to enable the parties to
expeditiously close the transactions contemplated by this Agreement.
~5,163.q) 2~54 ~6.3/.I?_2 9119/2003 4:28 PM 12
(c) As promptly as practicable after the date hereof, the Seller shall file a
motion with the Bankruptcy Court seeking approval of this Agreement and entry of the Section
363/365 Order. Seller shall (i) notify, as required by the Bankruptcy Court, all parties entitled to
notice of such motion and/or the Section 363/365 Order, as modified by orders in respect of notice
which may be issued at any time and fi.om time to time by the Bankruptcy Court and (ii) use its
reasonable efforts to obtain Bankruptcy Court approval of same.
Section 5.4 Additional Matters. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use all reasonable best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions contemplated by this
Agreement; provided, that the obligations of the parties to obtain any consent, approval or waiver
from the Bankruptcy Court shall be governed exclusively by Section 5.3(c); provided, further, that
nothing herein shall prevent the Seller fi.om cooperating with any third party to take actions
necessary or advisable to acquire all or a portion of the Acquired Assets or pursuant to any orders
entered or approvals or authorizations granted by the Bankruptcy Court and the Bankruptcy Code.
The obligations of each of the Purchaser and the Seller pursuant to this Article V shall be subject to
any orders entered or approvals or authorizations granted by the Bankruptcy Court and the
Bankruptcy Code. Each of the Seller and the Purchaser shall give prompt notice to the other of the
occurrence or failure, to occur of an event that would, or with the lapse of time would, cause any
condition to the consummation of the transactions contemplated by this Agreement to not be
capable of satisfaction. '
Section 5.5 Employment of Store Employecs?
~' cf ~ r-~.;~ r~.,~ + .... ~ .....~ ......~' '~'~ Se!! (c ch
............................................. ~ ....................................... F~ .........each
il ........................................... ~,~j ....... cn ,t ........................... ]
........~.~ c,.d,uons ~ Pur~h~r shall dot~
9/1912003 4'.28 PM ] 3
Purchaser shall not be required to make offers of employment to any of the
employees of Seller at the Store Locations, nor shall Purchaser be required to assume any
obligations or liabilities under the collective bargaining agreements of Seller identified in
Schedule 5.5(a) applicable to employees at the Store Locations.~]
525 !52]D.2~54_63/D(2 9/19/2003 4:28 PM 14
d
Section 5.6 ~o ~Plied Representations or W~Iies; Due Diligence.
(a) ~e P~ch~er hereby ac~owledges ~d a~ees that ~e Seller is not
m~ing ~y r~resentation or w~ty whatsoever, express or implied, except those
r~resentations ~d w~ties of ~e Sell~ explicitly set fu~ in this A~eement or in ~y
c~ificate contemplated hereby ~d de~ver~ by ~e Sell~ in co~ection hereM~. -
Without limiting the generality of the foregoing, and notwithstanding any
otherwise express representations and warranties made by the Seller in Article III hereof, the Seller
makes no representation or warranty to the Purchaser with respect to:
(i) any projections, estimates or budgets heretofore delivered to or
made available to the Purchaser of future revenues, expenses or expenditures or
future results of operations; or
(ii) except as expressly covered by a representation or warranty
contained in Article III hereof, any other information or documents (financial or
otherwise) made available to the Purchaser or its counsel, accountants or advisers
with respect to the Store Locations.
(b) The Purchaser acknowledges that: (i) it has had the opportunity to visit with
the Seller and meet with its officem and other representatives to discuss the Store Locations and
the assets, liabilities, financial condition, cash flow and operations of the Store Locations; and (ii)
525 ! ,'~3 'D~'2~_~ 5463 :I)~ 9/19/2003 4:28 PM ] 5
all materials and information requested by the Purchaser to date have been provided to the
Purchaser's reasonable satisfaction.
Section 5.7 Books and Records~ Cooperation, For a period of seven (7) years after the
Closing Date (or such longer period as may be required by any Governmental Entity or legal
proceeding):
(a) the Purchaser shall not dispose of or deslroy any of the business records and
files of the Store Locations transferred to it hereunder; and
(b) the Purchaser shall allow the Seller and any of its directors, officers,
employees, counsel, representatives, accountants and auditors access to the Transferred
Employees. if anv. and other employees of the Pumhaser or its subsidiaries engaged in the
operation of the Store Locations and all business records and files of the Sellers or the Store
Locations that are transferred to it in connection herewith, which are reasonably required by the
Seller for purposes related to the Chapter 11 Case, Tax matters and other reasonable business
purposes, during regular business hours and upon reasonable notice and the Seller shall have the
right to make copies of any such records and files.
(c) After the Closing Date, the Seller and Purchaser shall (and shall cause their
Affiliates to):
(i) timely sign and deliver' stich certificates or forms as may be
necessary or appropriate to establish an exemption fi.om (or otherwise reduce), or
file Tax Returns or other reports with respect to, Transfer Taxes;
(ii) easonably assist the other party in preparing any Tax Returns which
such other party is responsible for preparing and filing in accordance with this
Section 5.7(c); and
(iii) reasonably cooperate in preparing for any audits of, or disputes with
taxing authorities regarding, any Tax Returns relating to the Acquired Assets or
Store Locations.
Notwithstanding the foregoing or any other provision in this Agreement, neither the Purchaser nor
any of its Affiliates shall have the right to receive or obtain any information relating to Taxes of the
Seller, any of its Affiliates or any of its predecessors other than information relating to the
Acquired Assets or Store Locations.
Section 5.8 Payments Received. Seller and Purchaser each agree that after the Closing
they will hold and will promptly transfer and deliver to the other, from time to time as and when
received by them, any cash, checks with appropriate endorsements (using their best efforts not to
convert such checks into cash), or other property that they may receive on or atler the Closing
which properly belong to the other party, including without limitation any insurance proceeds, and
will account to the other for all such receipts.
Section 5.9 Intellectual Property Removal In event tbat the parties are unable to reach
aereement on the sale or licensine ora Portion of the Intellectual Property pursuant to Section 1 .g
hereof within 60 days of the Closing Date. Purchaser shall remove or obliterate, at its own
expense, all signs and other displays of Intellectual Property (including shopping cart logos) from
the Acquired Assets and Store Locations promptly after the Closing.
5 ~5 ! f-g ;D~2545463~T)/~ 9/19/2003 4:28 PM 16
ARTICLE VI
CONDITIONS PRECEDENT
Section .6.1 Conditions Precedent to Obligation of the Seller and the Purchaser. The
respective obligations of each party to effect the transactions contemplated by this Agreement
shall be subject to the satisfaction of the following conditions:
(a) the Section 363/365 Order shall have been entered by the Bankruptcy Court
and such order shall not have been stayed, modified, reversed or amended;
(b) the waiting period applicable to the transactions contemplated by this
Agreement, if any, under the HSR Act shall have expired or been terminated and each of the
material approvals or consents required by equivalent legislation in any other applicable
jurisdiction shall have been obtained or waived;
(c) no action, suit or proceeding (including any proceeding over which the
Bankruptcy Court has jurisdiction under 28 U.S.C. § 157(b) and (c)) brought by any Governmental
Entity shall be pending to enjoin, restrain or prohibit the transactions contemplated by this
Agreement, or that would he reasonably likely to prevent or make illegal the consummation of the
transactions contemplated by this Agreement; and
(d) no Governmental Entity sl~all' have issued any order, decree or ruling, and
there shall not be any statute, rule or regulation, restraining, enjoining or prohibiting the
consummation of the transactions contemplated by this Agreement.
Section 6.2 Conditions Precedent to Obligation of the Seller. The obligation of the
Seller to effect the transactions contemplated by this Agreement shall be subject to the satisfaction
or waiver at or prior to the Closing Date of the following additional conditions:
(a) the Purchaser shall have performed in all material respects its obligations
under this Agreement required to be performed by the Purchaser at or prior to the Closing Date;
and
(b) each of the representations and warranties of the Purchaser contained in this
Agreement shall be tree and correct as of the Closing Date as if made at and as of such date, except
where the failure of such representation and warranty to be tree and correct would not have a
material adverse effect on the Purchaser or the transactions contemplated by this Agreement.
Section 6.3 Conditions Precedent to Obligation of the Purchaser. The obligation of the
Purchaser to effect the transactions contemplated by this Agreement shall be subject to the
· satisfaction or waiver at or prior to the Closing Date of the following additional conditions:
(a) the Seller shall have performed in all material respects its obligations under
this Agreement required to be performed by the Seller at or prior to the Closing Date; and
(b) each of the representations and warranties of the Seller contained in this
Agreement shall be tree and correct as of the Closing Date as if made at and as of such date, except
where the failure of such representation and warranty to be true and correct would not have a
Material Adverse Effect.
9/2003 4:28 PM 17
~o'r~r~ r~ I ARTICI E'*qI
TERMINATION, AMENDMENT, AND WAIVER
Section 7.1 Termination by Mutual Consent. This Agreement may be terminated at any
time prior to the Closing Date by mutual written agreement of the Purchaser and the Seller.
Section 7.2 Termination by Either the Purchaser or the Seller. This Agreement may be
temfinated at any time prior to the Closing Date by either the Purchaser or the Seller if the Closing
Date shall not have occurred on or before [-~.November 4. 2003; provided, however, that the right
to terminate this Agreement pursuant to this Section 7.2 shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the cause of the failure of the
Closing Date to have occurred on or prior to such date.
Section 7.3 Termination by the Purchaser. This Agreement may be terminated at any
time prior to Closing by the Purchaser (provided that it is not in material breach, of any
representation, warranty or covenant or other agreement contained herein) iff
~. (a) the Section 363/365 Order shall not have been entered by
Bankruptcy Court on or prior to ~October 30, 2003 and as of the time of such termination has
not been entered;
(b~ (b) upon (x) the conversion of the Chapter 11 Case to cases under
Chapter 7 of the Bankruptcy Code, (y) the filing of a plan of reorganization by the Seller which
does not provide for the sale of the Acquired Assets to the Purchaser under this Agreement, or (z)
the appointment of a Chapter 11 trustee in the Chapter 11 Case; or
~ (c) upon a wi!!~.:! breach of any covenant or agreement on the part of
the Seller set forth in this Agreement such that the condition in Section.6.3(a) would not be
satisfied; provided, that if any such breach is curable prior to [-~q~.October 15, 2003 through the use
of the Seller's reasonable best efforts, so long as the Seller, following written notice with respect to
such breach from the Purchaser, shall be using its reasonable best efforts to cure such breach, the
Purchaser may not terminate this Agreement pursuant to .this Se6tion 7.3(c).
Section 7.'~.7._4Termination by the Seller. This Agreement may be terminated at any time
prior to Closing by the Seller (provided that it is not in material breach of any representation,
warranty or covenant or other agreement contained herein) if upon a ':.'i!!?a! breach of any
covenant or agreement on the part of the Purchaser set forth in this Agreement:such that the
condition in Section 6.2(a) would not be satisfied; provided, that if any such breach is curable prior
to [-*]:.October 15. 2003 through the use of the Purchaser's reasonable best efforts, so long as the
Purchaser, following written notice with respect to such breach from the Seller, shall be using its
reasonable best efforts to cure such breach, the Seller may not terminate this Agreement pursuant
to this Section 7.4.
Section 7.5 Effect of Termination and Abandonment. In the event of termination of this
Agreement pursuant to this Article VII, written notice thereof shall be given as promptly as
practicable to the other party to this Agreement and this Agreement shall terminate and the
transactions contemplated by this Agreement shall be abandoned, without further action by any of
the parties hereto. If this Agreement is terminated as provided herein (a) there shall be no liability
or obligation on the part of the Seller, the Purchaser, or their respective officers, directors and
Affiliates, and all obligations of the parties shall terminate, except for (i) the obligations of the
parties pursuant to Sections 7.5, 8.6, 8.7 and 8.11, (ii) that a party that is in willful breach of its
representations, warranties, covenants, or agreements set forth in this Agreement shall be liable for
damages occasioned by such breach, including without limitation any expenses, including the
~ ....... 4_.463:D~2 9/19/2003 4.28 PM 1 8
reasonable fees and expenses of attorneys, accountants and other agents incurred by the other party
in connection with this Agreement and the transactions contemplated by this Agreement, and (b)
all filings, applications and other submissions made pursuant to the transactions contemplated by
this Agreement shall, to the extent practicable, be withdrawn from the agency or Person to which
made.
ARTICLE VII
GENERAL PROVISIONS
Section 8.1.8.1 Survival of Representations, Warranties, and Am'eements. No
representations or warranties made by the Seller in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive beyond the Closing Date.
Section 8.2 Transfer Taxes. The Seller and the Purchaser will use reasonable efforts
and cooperate in good faith to exempt the sale, conveyance, assignments, transfers and deliveries
to be made to the Purchaser hereunder from any sales, use, transfer, documentary, registration,
recording, stamp and other similar Taxes (collectively, "Transfer Taxes") payable in connection
with such sale, conveyance, assignments, transfers and deliveries, to the extent provided in the
Section 363/365 Order, in accordance with Section 1146(c) of the Bankruptcy Code. Any
instruments transferring the Acquired Assets to Purchaser shall contain the following
endorsement:
"Because this [instrument] has been authorized pursuant to Order of the United
States Bankruptcy Court for the Northern District of Illinois relating to a chapter 11
plan of [Seller], it is exempt from transfer taxes, stamp taxes or similar taxes
pursuant to 11 U.S.C. § 1146(c)."
In the event that any Transfer Taxes are assessed with respect to such sale, conveyance,
assignments, transfers or deliveries, such Transfer Taxes shall be paid by the Purchaser.
Section 8.3 Brokers. The Purchaser hereby agrees to indemnify and hold harmless the
Seller, and the Seller hereby agrees to indemnify and hold harmless the Purchaser, against any
liability, claim, loss, damage or expense incurred by the Purchaser or the Seller, respectively,
relating to any fees or commissions owed by any broker, finder or financial advisor as a result of
actions taken by the Purchaser or the Seller, respectively.
Section 8.4 Notices. All notices, claims, demands, and other communications
hereunder shall be in writing and shall be deemed given upon (a) confirmation of receipt of a
facsimile transmission, (b) confn'med delivery by a standard overnight cartier or when delivered
by hand, or (c) the expiration of five (5) business days after the day when mailed by registered or
certified mail (postage prepaid, return receipt requested), addressed to the respective parties at the
following addresses (or such other address for a party as shall be specified by like notice):
(a) (a) If to the Purchaser, to
Downtown Ea ~le~C_.om_.o_ration
925 Main Street
Crete NE 68333
Telecopy: [
Attention: [
]--(402'} 826-5098
]~larke
............ 45463,'D. 2 9/19/2003 4.28 PM 1 9
with a copy to
[
Bell. Bovd & Lloyd LLC
70 W. Madison Street
Chicaeo. IL 60602
Telecopy: [
Attention: [
And
]¢312) 827-8078
)Nicholas 1. Fink Es .
(d) (b) If to the Seller, to
Eagle Food Centers, Inc.
801 First Street East
Milan, Illinois 61264
Telecopy: (309) 787-8840
Attention: Robert Kelly
with a copy to
Skadden, Arps, Slate, Meagher & Flom (Illin6is)
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
Telecopy: (312) 407-0411
Attention: George Panagakis, Esq.
L. Byron Vance III, Esq.
Section 8.5 Descriptive Headines. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.
Section 8.6 Entire Aereement: Assimament. This Agreement (including the Exhibits,
Schedules and the other documents and instruments referred to herein) (a) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them, with respect to the subject matter hereof, including, without
limitation, any transaction between or among the parties hereto and (b) shall not be assigned by
operation of law or otherwise.
Section 8.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois without regard to the roles of conflict of laws of
the State of Illinois or any other jurisdiction. The Purchaser and the Seller irrevocably and
unconditionally consent to submit to the jurisdiction of the Bankruptcy Court for any litigation
arising out of or relating to this Agreement and the transactions contemplated thereby (and agree
not to commence any litigation relating thereto except in the Bankruptcy Court).
Section 8.8 Expenses. Whether or not the transactions contemplated by this Agreement
are consummated, all costs and expenses incurred in connection' with this Agreement and the
transactions contemplated thereby shall be paid by the party incurring such expenses.
Section 8.9 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties hereto.
5 ~ 5-~ ~;2 'x&~545463;~D~ 9/I 9/2003 4:28 PM 20
Section 8.10 Waiver. At any time prior to the Closing Date, the parties hereto may (a)
extend the time for the performance of any of the obligations or other acts of the other parties
hereto, Co) waive any inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part ora party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
Section 8.11 Counterparts; Effectiveness. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of which shall constitute
one and the same agreement. This Agreement shall become effective when each party hereto shall
have received counterparts thereof signed by all the other parties hereto.
Section 8.12 Sevembility; Validity; Parties in Interest. If any provision of this
Agreement or the application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement, and the application of such provision to other
Persons or circumstances, shall not be affected thereby, and to such end, the provisions 'of this
Agreement are agreed to be severable. Nothing in this Agreement, express or implied, is intended
to confer upon any Person not a party to this Agreement any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
ARTICLE Il! .............
DEFINITIONS
As used herein, the terms below shall have the following meanings:
"Acquired Assets" has the meaning set forth in Section 1.1.
"Affiliate" ora Person means any other Person that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common control with, the first
mentioned Person.
"Agreement" has the meaning set forth in the preamble.
"Allocation Arbiter" has the meaning set forth in Section 1.7.
2.2(a)(iv).
"Assignment and Assumption Agreement" has the meaning set forth in Section
"Assumed Liabilities" has the meaning set forth in Section 1.3.
"Bankruptcy Code" has the meaning set forth in the Recitals.
"Bankruptcy Court" has the meaning set forth in the Recitals.
"Cash Purchase Price" has the meaning set forth in Section 1.5.
"Chapter 11 Case" has the meaning set forth in the Recitals.
........ ~'~ _5_ ~' ~_ '
............. 54 46 .iD,2 9/19/2003 4.28 PM 21
"Cleanup" shall mean alt actions required to: (1) cleanup, remove, treat or
remediate Hazardous Materials in the indoor or outdoor environment; (2) prevent the Release of
Hazardous Materials so that they do not migrate, endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; (3) perform pre-remedial studies and investigations
and post-remedial monitoring and care required by Environmental Laws or any Governmental
Entity; or (4) respond to any government requests for information or documents in any way
relating to cleanup, removal, treatment or remediation or potential cleanup, removal, treatment or
remediation of Hazardous Materials in the indoor or outdoor environment to the extent required by
Environmental Laws or any Governmental Entity.
"Closing" has the meaning set forth in Section 2.1.
"Closing Date" has the meaning set forth in Section 2.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Environmental Claim" means any claim, action, cause of action, investigation or
written notice by any Person or entity alleging potential liability (including, without limitation,
potential liability for investigatory costs, Cleanup costs, governmental response costs, natural
resources damage, property damages, perSonal injuries or penalties) arising out' of, based on or
resulting fi.om (a) the presence, Release or threatened Release of any Hazardous Materials at any
location, whether or not operated by the Seller or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"EnvironmentalLaws" means federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface strata).
"Excluded Assets" has the meaning set forth in Section 1.2.
"Final Order" means an order of the Bankruptcy Court or other court of competent
jurisdiction: (a) as to which no appeal, notice of appeal, motion to amend or make additional
fmdings of fact, motion to alter or amend judgment, motion for rehearing or motion.for new trial
has been timely filed or, if any of the foregoing has been timely tiled, it has been disposed of in a
manner that upholds and affirms the subject order in all respects without the possibility for further
appeal or rehearing thereon; Co) as to which the time for instituting or filing an appeal, motion for
rehearing or motion for new trial shall have expired; and (c) as to which no stay is in effect;
provided, however, that the filing or pendency of a motion under Federal Rule of Bankruptcy
Procedure 9024CO) shall not cause an order not to be deemed a "Final Order" unless such motion
shall be filed with 10 days of the entry of the order at issue. In the case of the Section 363/365
Order, a Final Order shall also consist of an order as to which an appeal, notice of appeal, motion to
amend or made additional findings of fact, motion alter or amend judgment, motion for rehearing
or motion for new trial has been filed, but as to which the Purchaser, in its sole discretion, elects to
proceed with Closing.
"Financing" means the financing provided pursuant to the debtor-in-possession
credit documents entered into among the Seller and certain of its subsidiaries and affiliates and
Congress Financial Corporation, including any extension, renewal, refinancing, refunding or
replacement (or successive extensions, renewals, refinancings, refundings or replacements)
9/19/2003 4:28 PM 22
thereof and as approved by the United States Bankruptcy Court for the Northcn-n District of Illinois
Eastern Division, In re Eagle Foods Centers, Inc, et al., Case No. 03-15299, on May 20, 2003.
"GAAP" has the meaning set forth in Section 3.4.
"Governmental Authorizations" or "Permits" means any approval, consent_
waiver, license, pemait, registration, or other authorization issued, eranted, riven or otherwise
made available by or under the author/tv of any Governmental Entity.
"Governmental Entity" means any federal, state, provincial, local, county or
municipal government, governmental, judicial, regulatory or administrative agency, commission,
board, bureau or other authority or instrumentality, domestic or foreign.
"Hazardous Materials'5 shall mean all substances defined as Hazardous
SUbstances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. § 300.5, or defined as such by, or regulated as such under,
any Environmental Law.
"HSR Act" has the meaning set forth in Section 3.3.
tellectualProperty has the meanmg set forth in Section 1.2(k).
"Inventory" has the meaning sci forth in Section 1.1(a).
"Inventory Amount" has the meaning set forth in Section 1.6(b).
"Inventory Statement" has the meaning set forth in Section 1.6(3).
"Material Adverse Effect' means any event, condition, or matter in respect of the
operation of the Store Locations, the Acquired Assets and the Assumed Liabilities that in the
aggregate result in or have a material adverse effect on the business, financial condition or
operations of the Store Locations takcn a~ z -'kc, lc; nrovided, however that any event c,-,,,~'*'
or matter that (fl xs generally apphcable to (A) the industries and markets in which the Store
Locations operate or (B) the United ~:t~to~ ~,~
......... = .............. ~onoeconom¥, shall in each case be excluded from the determination of
Material Adverse Effect; and provided, further, that any event, changes, condition or matter
resulting from the execution of this Agreement and the announcement of this Agreement, events
!cadLn£ u~causino and res~ to and 5,~Icw~n~ the filing of the Chapter 11 Case
and the announcement of the Chapter I 1 Case and the other transactions contemplated by this
Agreement shall also be excluded from the determination of Material Adverse Effect.
liens:
"Owned Real Property" has the meaning set forth in SectiOn 1.1 (e).
"Permits" has the meaning set forth in Section 3.6(3).
"Permitted Exceptions" means, with respect to any Person, any of the following
!~_ (a) liens with respect to the payment of Taxes, assessments or
govermnental charges in all cases which are not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained to the extent required by GAAP;
........ ~54_?.~_~3~D!~ 9/! 9/2003 4.28 PM 23
(b~ (b)liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens imposed by law
created in the ordinary course of business for amounts not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP;
(c~ (c) deposits made in the ordinary course in connection with worker's
compensation, unemployment insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money)
and surety, appeal, customs or performance bonds;
(d) (d) encumbrances arising by reason of zoning restrictions easements,
licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other
similar encumbrances on the use of Real Property or any other matters of record;
~t~J/~' encumbrances arising under leases or subleases of Real Property
which do not in the aggregate materially detract from the value of such Real Property or interfere
with the ordinary conduct of the business conducted and proposed to be conducted at such Real
Property;
(fl (f) financing statements evidencing a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's business of a consignor's
interest in goods consigned to sudh Person in th~ oi-dinary course of business; and
~g~ (g) any encumbrances associated with the Assumed Liabilities
"Person" means an individual, corporation, partnership, association, limited
liability company, trust, joint venture, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended).
"Petitions" has the meaning set forth in the Recitals.
"Plans" means each deferred compensation and incentive compensation, stock
purchase, stock option and other equity compensation plan, program, agreement or arrangement;
each severance or termination pay, medical, surgical, hospitalization, life insurance and other
material "welfare" plan, fund or program (within the meaning of Section 3(1) of ERISA); each
profit-sharing, stock bonus or other "pension" plan, fund or program (within the' meaning of
Section 3(2) of ERISA); each material employment, termination, change of control or severance
agreement; and each other material employee benefit plan, fund, program, agreement or
arrangement.
PrehrmnarylnventoryArnount has the meamng set forth in Section 1.6(a).
"Property Leases" has the meaning set forth in Section 1.1(e).
"Purchase Price" means the sum of (i) the Cash Purchase Price and (ii) the
Assumed Liabilities.
"Purchaser" has the meaning set forth in the Preamble.
"Release" shall mean any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor
environment (including, without limitation, ambient air, surface water, groundwater and surface or
5 ~5 !r-2.'~/2_5.4.~46'~2 9[19/2003 4:28 PM 24
subsurface strata) or into or out of any property, including the movement of Hazardous Materials
through or in the air, soil, surface water, groundwater or property.
"SEC" means the federal Securities and Exchange Commission.
"Section 363/365 Order" means an order of the Bankruptcy Court approving the
sale of the Acquired Assets and assumption/assigument of the executory contracts and unexpired
leases and Assumed Liabilities under this Agreement pursuant to Sections 105, 363 and 365 of the
Bankruptcy Code, that has not been reversed, stayed, modified or amended in any material
respects prior to the Closing Date. Without limiting the foregoing, the Section 363/365 Order shall
(i) include a finding that the Purchaser is a good faith purchaser entitled to the protections of
Section 363(m) of the Bankruptcy Code, (ii) provide that Purchaser is obtaining the Acquired
Assets free and clear of any cncm.nL2ncc.!iens, claims or encumbrances, including, but not limited
to. any claims arisine under PACA and PASA: (iii) provide that neither th~-p~ase of the
Acquired Assets nor the subsequent operation of any business with the Acquired Assets shall
cause Purchaser to be a deemed successor of Seller within the meaning of any revenue, pension,
ERISA, tax, labor or environmental law, rule or regulation or any products liability law an~ (iv)
provide for the assignment to Purchaser of the executory contracts and unexpired leases and
Assumed Liabilities and iv) include the lan~ma~e contained in Schedule B annexed hereto within
tSe sections of Section 363/365 Order described in such Schedule B
"Seller" has the meaning set forth in the Preamble.
"Seller Disclosure Schedule" has the meaning set forth in the introductory
paragraph to Article III.
"Seller Plans" means the Plans set forth in Schedule [e].
"Seller SEC Documents" means all forms, reports, schedules, statements and other
documents required to be filed by the Seller since January 1, 2002 under the Securities Exchange
Act of t 934, as amended, or the Securities Act of 1933, as amended (as such documents have been
amended since the time of their filing.
"Store Locations" has the meaning set forth in the Recitals.
"Summary Financial Information" has the meaning set forth in Section 3.4.
"Tangible Personal Property" has the meaning set fo~h in Section 1. I (c).
"Tax Return" shall mean any report, return, document, statement, declaration or
other information filed with respect to any Taxes (including any schedules attached thereto), and
any claims for refund of Taxes, including any amendments or supplements to any of the foregoing,
with any Taxing Authority with respect to Taxes.
"Taxes" shall mean any and all taxes, fees, levies or other assessments, including,
without limitation, federal, state, local, or foreign income, gross receipts, transfer, gains,
inventory, custom, duty, excise, real or personal property, sales, withholding, social security,
occupation, use, service, value added, license, net worth, pa2Toll, franchise or similar taxes,
imposed by any Taxing Authority together with any interest, penalties or additions to tax and
additional amounts imposed with respect thereto.
7 ! 5'! r-3 t D;2_545463,q)_z~2. 9/19/2003 4:28 PM 25
"Taxing Authority" shall mean any Governmental Entity responsible for the
imposition or collection of any Taxes.
"Transfer Taxes" has the meaning set forth in Section 8.2.
"WARN Act" means the Worker Adjustment and Relxaining Notification Act, 29
U.S .C. §§2101-2109, as amended, and any regulations promulgated thereunder.
[Signature page follows]
9/19/2003 4.28 PM 26
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed on their behalf by their officers thereunto duly authorized, as of the date
first above written.
EAGLE FOOD CENTERS, INC.
By:
Name:
Title:
DOWNTOWN EAGLE CORPORATION
By~ -
Name:
Title:
............. 45463...'D. 2 9/19/2003 4.28 PM 2 7
FIXED PACKAGE BID ALLOCATION
Dubuque. Iowa Store 130
$450,000
525 !r:?.~D;2_54~q46~3?~D~..-'2. 9/19/2003 4:28 PM 28
Clinton Store 234 $200,000
9/19/2003 4:28 PM xxix
Store Asset Number Description Units Serial Number Tag Number
0130 116
0130 12497
0130 12498
0130 12499
0130 12501
0130 13152
0130 13686
0130 14012
0130 14130
0130 14271
0130 14355
0130 14361
0130 14486
0130 14849
0130 15708
0130 15709
0130 16325
0130 16326
0130 16426
01.30 1666
0130 17036
0130 17790
0130 17795
0130 17820
0130 17821
0130 17822
0130 17835
0130 17842
0130 17846
0130 17899
0130 18025
0130 18211
0130 18359
0130 18382
0130 18384
0130 18441
0130 1895
0130 19192
0130 20214
0130 20279
0130 20715
0130 20755
0130 20847
0130 20849
0130 20850
0130 20851
0130 20852
0130 20854
0130 20855
0130 20856
0130 20858
TRASH ROOM 1
FAX 1 10243
BALLAST LIGHTS 1
FOOD PROCESSOR 1 76006062
CM EXT SIGNS 1
SCALE 1 17053817
FREEZER 1
TELZON RF SYSTEM 1
SCALE 1 17052960
CURRENCY COUNTER 1 CI5929
FF CASE 1 8904-0166
iCE CREAM CASE 1 8907-0174
DELI CASE 1 8774-0158
CC AUTHO READERS 10
PASTRY CASE 1
PASTRY CASE 1
SLICER 1
' PALLET TRUCK 1 0452-PM8023
REFRIG INSTALLATI 1
INDEXER-LABELER I 31804758
SHELVING ' 8'
REFRIG INSTALL 1
REFRIG INSTALL 1
PROD SHELVING 1
BAKERY DISPLAYS 1
PROD/FLORAL DISPL 1
EQUIP INSTALLATIO 1
TABLE 1
INTERIOR SIGNS 1
SCALE 1 171025025
CONDENSING UNITS 1
DISK UPGRADE 1
TILT TABLES 2
TILT TABLES 1
MEMORY UPGRADE 1
TILT TABLES 4
AIR HEAT EXCHANGER 1
AIR CONDITIONER 1
RETAIL EQ INSTALL 1
DECOR LIGHTS 1
SCANNER/SCALE 1 T1962
TERMINAL 1 X9981
TERMINAL 1 ×9994
TERMINAL 1 X9861
TERMINAL I Y0014
TERMINAL 1 X8912
TERMINAL I X9980
TERMINAL 1 AAF95
TERMINAL 1 AAN69
TERMINAL I AAR50
SCANNER/SCALE I T1853
3000179430
3200732240
3200732250
3200732260
3200732280
3200740020
3200746680
3200750120
3200751380
3200754450
3200755340
3200755400
3200761210
3200765720
3200775440
3200775450
3200785700
32O0785710
3200786860
3000414390
3200793380
3200852280
3200852820
3200853400
3200853410
3200853420
3200853900
3200854070
3200854210
3200855500
3200857230
3200862370
3200880550
3200880780
3200880800
3200881390
3000437150
3200889090
3300103340
3300741850
0340010493T
0340010542T
3400106900
3400106920
3400106930
3400106940
3400106950
3400106970
3400106980
3400106990
3400107010
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
o1 o
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
.0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
20859
20860
20862
20863
20864
20865
20866
20867
2146
21893
22074
22075
22239
22240
22379
22380
23160
23618
2395
2420
24647
24873
24874
24875
24876
24877
24878
25331
25332
25499
27461
27539
28332
28333
28334
28335
28336
28337
28338
28339
28340
28643
28644
2879
29042
29043
29044
29045
29046
29047
29129
29130
SCANNER/SCALE
SCANNER/SCALE
SCANNER/SCALE
SCANNER/SCALE
SCANNEPJSCALE
SCANNER/SCALE
SCANNER/SCALE
SCANNER/SCALE
ENERGY MGMT SYSTEM
STORE LOOP KIT
PS/2
PS/2
DISPLAY/MONITOR
DISPLAY/MONITOR
PRINTER
PRINTER
TOKEN RING
FF CASE
SAFE
MEAT COOLER DOORS
DELL 5166/GL WORK
DELL POWER EDGE 2
DELL 5166/GL WORK
DELL 5166/GL WORK
HP6P LASER JET PRI
HP6P LASER JET PRI
DELL HP BACKUP TA
ARC SERVER WINDOW
ATS ELECTRONIC TI
IBM CONTROLLER W/
ROUTER & HUB
JLA SERVER
ENCRYPT PiN PAD
ENCRYPT PiN PAD
ENCRYPT PiN PAD
ENCRYPT PIN PAD
ENCRYPT PIN PAD
ENCRYPT PiN PAD
ENCRYPT PiN PAD
ENCRYPT PIN PAD
ENCRYPT PIN PAD
ENCRYPT PIN PAD
ENCRYPT PIN PAD
HYDRAULIC LIFT TRU
DECOR
LEASE IMPROVEMENT
RETAIL INSTALL
SIGNAGE INSTALL
FRONT END INSTALL
BACK ROOM INSTALL
DOG FOOD BASE
HAND JACK
I T1823
1 T1818
1 T1826
I T1830
1 T1878
1 T1890
1 T1871
1 T1881
1
1 4520290
1 4532138
1 1021191
1 1021479
I 3502521
1 3502539
I 464FT
I 9656-1295
1 657328
1
1
-1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
SHN031403TTY
1999 0018
500142929
5OO1427O1
500142175
500142662
500105641
500105637
500105520
500105156
500105030
500105856
500102267
309147
7-234467
3400107020
3400107030
3400107050
3400107060
3400107070
3400107080
3400107090
3400107100
3000459800
3400131520
3500100500
3500100510
3500102350
3500102360
3500103990
3500104000
3500113830
3600104940
3000482030
3000483020
3000509480
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0430
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
29131
29134
29135
29137
29138
29139
29142
29151
29152
29153
29166
29167
29168
29169
29170
29171
29172
29184
29185
29186
29187
29204
29205
29206
29207
29209
29210
29211
29212
29213
29214
29215
29216
29217
29218
29222
29227
29228
· 29229
29230
29231
29232
29233
29234
29235
29236
29244
29245
29246
29279
29317
29318
HAND JACK
WATER SOFTENER
MISTING SYSTEM
CASE - UPRIGHT LI
CASE - UPRIGHT LI
CASE - UPRIGHT LI
GARBEL
REFRIG INSTALLATI
TILT-TOP TABLES (
BANANA END CAP ME
SCALE/PRINTERoBAK
SCALE/PRINTER-DEL
SCALE/PRINTER-DEL
OAK TABLE W! TOPP
OAK TABLE W! SHEL
ROTISSERIE
MEAT SAW
PINEAPPLE CORER
FLORAL WORK STATI
CHECKSTANDS (5)
CHECKSTAND-EXPRES
SCALE/LABELER-MEA
SERVICE COUNTER A
VIDEO CABINET
SHELVING INSTALL
CABINET-DELI PREP
TABLE-BAKERY
CABINET-DELI
CABINET-DELI
SHELVING-LIQUOR
SHELVING-MEAT PRE
SHELVING-DELI PRE
SHELVING-BAKERY P
SHELVING-GROCERY
SHELVING-FLORAL
COOLEPJFREEZER IN
SHELVING-DAIRY CO
COIL-DAIRY COOLER
COOLER-DAIRY
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
COOLER-DAIRY UPRI
FREEZER-FROZEN FO
COIL-FROZEN FOOD
COIl'-FROZEN FOOD
PRINTER
SHOPPING CARTS (1
SHELVING-FROZEN F
1
1
1
1
1
1
24
4
1
1
2
8
1
1
1
5
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
100
1
7-234466
A3485373
A3485376
A3472124
4O,004,2O8
BU1036766
BU1038816
BU1038785
750009741
271O95481
311199540/31120
620925-70A&B
A3485293
A3485296
A3172084
A3485294
A3485297
A3485295
A3485298
620925-10A
620925-10B
11-CXYB8
GREEN
0130 29319
0130 29320
0130 29321
0130 29322
0130 29323
0130 29324
0130 29325
0130 29326
0130 29327
0130 29328
0130 29329
0130 29363
0130 29364
0130 29365
0130 29366
0130 29367
0130 29368
0130 29369
0130 29370
0130 29371
01~0 29372
0130 29373
0130 29374
0130 29375
0130 29376
0130 29377
0130 29378
0130 29379
0130 29380
0130 29381
0130 29382
0130 29383
0130 29384
0130 29385
0130 29386
0130 29387
0130 29388
0130 29465
0130 29466
0130 29467
0130 29514
0130 29665
0130 305
0130 306
0130 30681
0130 31
0130 31526
0130 31527
0130 31528
0130 31529
0130 31530
0130 31531
CASE-FROZEN FOOD
CASE-FROZEN FOOD
CASE-FROZEN FOOD
CASE-FROZEN FOOD
CASE-PRODUCE WET
CASE-PRODUCE WET
CASE-PRODUCE SPEC
CASE-PRODUCE SPEC
CASE-PRODUCE PRE-
CASE-PRODUCE PRE-
MISTING SYSTEM
CONDENSER A
CONDENSER B
COMPRESSOR RACK A
COMPRESSOR RACK B
THERMASTOR UNIT
COOLER-PRODUCE
FREEZER COIL-BAKE
CASE-SELF-SERVE B
CASE-CAKE BAKERY
CASE-FROZEN BAKER
FREEZER-BAKERY
CASE-SERVICE DELI
CASE-MULTI DECK D
FREEZER-SELF CONT
CASE-ISLAND DELI
CASE-SMOKED MEAT
CASE-FRESH MEAT
CASE-FRESH MEAT
CASE-FRESH MEAT
CASE-FRESH MEAT
COOLER-MEAT
COOLER COIL-MEAT
COOLER COIL-MEAT
COOLER COIL-MEAT
COOLER COIL-MEAT
CASE-FLORAL
LEASE IMPROVEMENT
LEASE IMPROVEMENT
LEASE IMPROVEMENT
AISLE DIRECTORIES
SECURITY SYSTEM
PALLET HAND JACK
PALLET HAND JACK
POS SIGNS
MEAT PREP COOL ROOM
ICE CREAM CASE
ICE CREAM CASE
FROZEN FOOD CASE
FROZEN FOOD CASE
FROZEN FOOD CASE
FROZEN FOOD CASE
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
10
1
1
1
1 00D03117-766
1 00D03118-766
I 00D03054-130
1 00D03055-130
1 A3443508
1 A3443506
1 A3443509
1 A3443547
1 A3443507
1 A3443510
1
670448-10A
670447-10A
9970C00
9972C00
4989221
620925-10C
484109~3/484211
A3485374
00D02480-951
AZ013JJ
A6700202
A6700204
A6700220
A6710312
A6710353
620925-30A
620925-30B
629925-50A
620925-50B
7518
C00M67284
C00M67285
C00M67286
1808
1809
8908-0203
8908-0204
8904-0165
9900-0771
9656-0262
9658-0794
3000244600
3000244610
3000096790
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
0130
31532
31533
31534
31535
31536
31537
31538
32
466
4991
4992
4995
5031
5053
5054
5100
5160
5254
5255
5256
5257
5259
5260
5345
5346
5347
5348
5349
5350
5351
5352
5354
5356
5362
5496
5670
603
6108
6135
708
7417
7854
7874
7875
8188
823
825
8445
8650
9737
9782
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
FROZEN FOOD CASE 1
UNIT HEATER 1
LIFT/RECEIVING ROOM 1
PRODUCE COOLER 1
GROCERY FREEZER 1
PROD TABLE 6 X 8 1
PACKER/CONTAINER C 1
DAIRY COMBO COOLER 1
COOLER DOOR 1
SUPRA VCR 1
MAGNAVOX TV 1
EDHARD JELLY HOPPE 1
BAKERY PANS 1
BAKERY RACKS 1
BAKERY TABLE 1
MIXER - -1' ·
TELEPHONE SYSTEM 7
TRAULSEN RETARDER 1
TRAULSEN PROOF BOX 1
BAKERY SHELVING 1
BELSHAW PROOF BOX 1
BELSHAW DONUT DROP 1
BELSHAW DONUT FRYE 1
AVALON DONUT GLAZE 1
ICING CONDITIONER 1
OLIVER BREAD SLICE 1
CAKE DECO UNIT 1
SLICER 1
MEAT COOLER 1
SOUND SYSTEM 1
60IN PAPER BALER 1
TRAILER HAND JACK 1
LEASEHOLD IMPROVEM 1
SWITCHGEAR 1
RACK OVEN 1
SS TABLE 1
FRYER W/WARMER 1
WRAPPER SYSTEM 1
MIXER/GRINDER 1
LOW TEMP COOLER 1
CHOPPER 1
PROD TABLE 1
PROD TABLE 1
TENDERIZER 1
LEASEHOLD IMPROVEM 1
SCALE 1
9658-0539
9658-0538
9658-0792
9658-0793
9658-0536
9658-0537
9902-1326
3000097330
3000270480
3000614950
3000614960
RG-4678 0300061521T
VIP3327 3000616070
3000616650
3000616660
3000617540
3000618690
3000620750
3000620770
3000620780
3000620790
11370979 3000620830
3000620840
196097 3000622440
196098 3000622450
3000622480
3000622490
3000622500
3000622510
3000622520
3000622530
124285 3000622560
3000622580
56827510 3000622660
3000624530
3000629170.
24210 3000284350
109611 0300063751U
3000637810
3000302070
0310066212T
0320066813T
3200668420
31456922 3200668430
27122992 3200673450
6011-0468 3000316460
11069075 3000317150
RG5710 0320067857T
RG5711 0320067858T
56895583 3200681400
3200697160
17034643 0320069781T
Store Asset Number Description Units Serial Number Tag Number
0234
O234
0234
0234
O234
O234
0234
0234
0234
0234
O234
O234
0234
0234
0234
0234
0234
0234
0234
O234
0234
0234
O234
0234
0234
O234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
O234
O234
0234
0234
O234
O234
O234
0234
O234
0234
~34
0234
0234
11178 FISH CASE
11191 FISH CASE
11205 WATER HEATER
11206 SHELVING
117 WESTINGHOUSE WATER
11807 DONUT FRYER
11954 BALLAST LIGHTS
12076 CM EXT SIGNS
122 INTERCOM & MUSIC SY
124 SHELVING
125 MEAT SAW
13422 CM EXTERIOR SIGNS
13618 DELE CASE
13624 MEAT CASE
13625 MEAT CASE
13626 MEAT CASE
13627 MEAT CASE
13628 MEAT CASE
13630 MEAT CASE
13674 DELI CASE
13676 DELI CASE
13677 DELI CASE
13678 DELI CASE
14029 TELZON RF SYSTEM
14274 TENDERIZER
14338 DELI CASE
14340 DELI CASE
14341 DELI CASE
14342 DELI CASE
14346 FISH CASE
14864 CC AUTHO READERS
15246 SCALE
15274 RACK OVEN
15471 POWER PANELS
15567 MEAT CASE
15570 DAIRY CASE
15577 DAIRY CASE
15588 FF CASE
15595 ICE CREAM CASE
15597 ICE CREAM CASE
15599 ICE CREAM CASE
15661 MEAT SAW
15664 WRAPPING SYSTEM
15909 SCALE/PRINTER
15980 FF CASE
15984 FF CASE
15985 FF CASE
16002 PROOF BOX
16200 SCALE
16341 DELI PRINTER
16342 SCALE
1 8273-0108 3200716170
I 8273-0107 3200716320
I RN0291A02208 3200716530
1 3200716540
1 WK-134602 3000179690
1 3200723540
1 3200725200
I 0320072668T
1 3000180490
1 3000181860
1 1812608 3000181920
1 3200743410
I 8410-0381 3200745990
1 8680-0191 3200746050
I 8680-0193 3200746060
1 8680-0195 3200746070
1 8680-0192 3200746080
1 8680-0194 3200746090
1 8679-0135 3200746110
1 8409-0233 3200746560
· 1~ 8410-0339 3200746580
I 8410-0340 3200746590
1 8410-0341 3200746600
1 3200750290
1 56938209 3200754480
1 6870-0110 3200755170
1 6870-0112 3200755190
1 6870-0113 3200755200
1 6870-0114 3200755210
1 8978-0106 3200755250
6 3200765890
I 171011958 3200770080
1 39070776176C 0320077034T
I 3200772800
1 4317-0413 3200773890.
1 4316-0223 3200773920
1 4317-0406 3200773990
1 8904-1155 3200774100
1 8908-2368 3200774170
1 8908-2370 3200774190
1 8909-2372 3200774210
1 27188046 3200774840
1 311015251 3200774870
I 171048494 3200777890
1 44860575 3200778600
1 44840253 3200778640
I 44840254 3200778650
1 208V/1 3200778830
1 171024065 3200784200
1 6A2659 3200785900
1 17044887 3200785910
0234
0234
0234
0234
0234
0234
0234
0234
O234
0234
0234
0234
0234
0234
0234
0234
O234
O234
0234
0234
0234
02~4
0234
0234
0234
0234
0234
0234
0234
O234
O234
O234
0234
0234
0234
O234
O234
0234
O234
O234
0234
O234
O234
0234
0234
0234
O234
0234
0234
0234
0234
O234
16354 SCALE
166 HYD PALLET TRUCK
173 HYD PALLET TRUCK
17723 12 MEAT TABLES
18095 LHLD IMPROVEMENT
18330 4690 MEMORY UPGRA
1868 ENERGY MGMT SYSTEM
1875 LIGHTING ENRGY MGM
18937 CHECKSTAND-EXPRES
19367 FREEZER DOOR-WALK
19608 BANANA END CAP
1971 FLUIDIC CONTROLS/E
2037 SHELVING
20416 TERMINAL
20976 TERMINAL
20986 SCANNER/SCALE
21037 SCANNER/SCALE
21092 TERMINAL
21093 TERMINAL
21095 TERMINAL
21097 TERMINAL
21098 TERMINAL
21101 SCANNER/SCALE
21103 SCANNER/SCALE
21104 SCANNER/SCALE
21373 SCANNER/SCALE
21873 SCANNER/SCALE
21898 STORE LOOP KIT
22104 PS/2
22105 PS/2
22269 DISPLAY/MONITOR
22270 DISPLAY/MONITOR
22404 PRINTER
23189 MODEM
23190 TOKEN RING
23337 TELEPHONE SYSTEM
23653 MIXER
23751 FF CASE
24951 DELL POWER EDGE 2
24952 DELL 5166/GL WORK
24953 DELL 5166/GL WORK
24954 HP6P LASER JET PRI
24955 HP6P LASER JET PRI
24956 DELL HP BACKUP TA
25357 ARC SERVER WINDOW
25358 ATS ELECTRONIC TI
25512 IBM CONTROLLER W/
26205 SCALE/PRINTER
26812 SHOP CARTS
27386 UPS UNIT
27472 ROUTER & HUB
27550 JLA SERVER
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
100
1
1
1
17045714
HPF8724
HPF8721
ROOF REPL
13661E
BLACK
1
1
1
1
1
1
1
1
1
1
1
1
1
1 V0514
1 Y2132
1 T2110
1 T2540
1 X9913
1 X9899
1 Y0018
! AAF96
1- AAH21
1 T2576
1 T2124
1 T2122
I T2506
I T2573
I
4520888
4532220
1021523
1021183
3503270
A23731083814
952FT
11412681
8798-0781
BU1026548
BQ401C0957
JABO34283PU
3200786040
3000202740
3000203430
32OO850190
3200858730
3200880260
3000431090
3000433820
3200886500
3200890870
3200893300
3000441060
0300044564T
3400101400
3400108510
3400108610
3400109190
3400109890
3400109900
3400109920
3400109940
3400109950
3400109980
3400110O00
3400110010
0340011336T
0340013129T
3400131570
3500100800
3500100810
3500102650
3500102660
3500104300
35O0114120
3500114130
3600101090.'
0360010545T
3600106950
O234
0234
0234
0234
0234
0234
0234
0234
0234
O234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
.0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
27802 COMPRESSOR
27803 MART CART
28431 ENCRYPT PIN PAD
28432 ENCRYPT PIN PAD
28433 ENCRYPT PIN PAD
28434 ENCRYPT PIN PAD
28435 ENCRYPT PIN PAD
28436 ENCRYPT PIN PAD
29288 PRINTER
29503 CASE - CAKE
29566 SCALE
29664 AISLE DIRECTORIES
29725 EXTERIOR SlGNAGE
29887 NC COMPRESSOR
30501 POS SIGN
30502 POS SIGN
30503 POS SIGN
30504 POS SIGN
30505 POS SIGN
30506 POS SIGN
30507 POS SIGN
30508 POS SIGN
30509 POS SIGN
30510 POS SIGN
30541 LEASEHOLD IMPROVE
30542 LAND IMPROVEMENT
30543 DECOR
30544 RETAIL
30545 SlGNAGE
30546 FRONT END
30547 BACK ROOM
30548 FROZEN FOOD CASE
30549 PRODUCE TABLES
30550 FLORAL WORKSTATIO
30551
30552
30553
30554
30555
30556
30557
30558
30559
30560
30561
30562
30563
30564
30566
30567
30568
30569
UPRIGHT DAIRY CAS
MISTING SYSTEM
FLORAL CASE
PRODUCE CASE
PAGING/PHONES
REFRIGERAION INST
TILT-TOP TABLES
SHELVING
ALTO-SHAM CABINET
BEVERAGE COUNTER
TRASH RECEPTACLE
ROTISSERIE
CONDIMENT CABINET
WARMER
BAKERY FIXTURES
GLAZER
CHECKSTAND
SERVICE COUNTER
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
40
1
1
1
1
1
1
1
24
1
1
1
1
1
1
1
1
1
1
1
99F74465
54669
500148807
50O142153
500142802
50O148066
500105079
500105022
11 -CXYT5
00K73498
BU1053913
2001VE4106
8985
750011825
750010850
0234
0234
0234
0234
0234
0234
0234
0234
O234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
0234
02~4
0234
0234
O234
0234
0234
0234
0234
O234
O234
0234
O234
O234
0234
0234
0234
0234
0234
O234
0234
O234
0234
0234
0234
0234
0234
0234
O234
O234
O234
O234
0234
30570 VIDEO COUNTER
30571 WATER SOFTENER
30572 BEER CASE CONDENS
30573 BULK FOOD SIGNS
30574 WINDOW TREATMENT
30575 LIQUOR DEPT SHELV
30576 MEAT CASE
30577 MEAT CASE
30578 MEAT CASE
30579 MEAT CASE
30580 MEAT DEPT. ISLAND
30581 MEAT DEPT. ISLAND
30582 MEAT DEPT. ISLAND
30888 TILT TABLES
3122 SAFE
31730 FAS 144 ON ASSET
31731 FAS 144 ON ASSET
31732 FAS 144 ON ASSET
31733 FAS 144 ON ASSET
3247 CHOPPER
3624 SHELVING
3666 FROZ FOOD CASE
3667 FROZ FOOD CASE
3668 FROZ FOOD CASE
3669 FROZ FOOD CASE
3670 FROZ FOOD CASE
3671 FROZ FOOD CASE
3672 FROZ FOOD CASE
3673 FROZ FOOD CASE
3674 SOUND/INTERCOM SYS
3698 CONDENSING UNITS
3699 FROZ FOOD CASE
3700 FROZ FOOD CASE
3702 ICE CREAM CASE
4063 LEASEHOLD IMPROVEM
4307 HYDRAULIC LIFT TRU
4678 GARBEL DISPOSAL UN
5619 OLIVER BREAD SLICE
608 60IN PAPER BALER
6118 TRAILER HAND JACK
6872 LEASEHOLD INTEREST
7051 2 MULTIPLE TIER LO
7287 TOTLVlSIONNCR MON
8080 SS TABLE
8081 SS TABLE
8082 POLY TOP TABLE
8083 POLY TOP TABLE
8084 POLY TOP TABLE
8085 POL~' TOP TABLE
8087 SHELVING
8090 SLICER
8091 SLICER
1
1
1 6.272E+11
1
1
1
I A7780603
1 A6440203
I A6440202
1 A6430132
I A7282397
1 A7357392
1 A7342125
2
I 659510 3000526660
1
1
1
1
1 11176398 3000542790
1 3000566810
'1' 9278-0469 3000568130
1 9280-1877 3000568140
1 9280-1878 3000568150
1 9280-1876 3000568160
1 9280-1870 3000568170
1 9278-0467 3000568180
1 9280-1869 3000568190
1 9280-1868 3000568200
1 3000568220
1 3000569390
1 9280-1895 3000569400
I 9280-1896 3000569410
1 9281-0365 3000569430
1 3000587830
1 316188 3000595790.
1 8-85-10 3000604260
1 0300062787T
1 14148 3000284480
I 109624 0300063751V
1 3100652430
1 3100655190
1 L81AZ31150 0310066022T
1 3200671590
1 3200671600
1 32O067161O
1 320O671620
1 3200671630
1 3200671640
1 3200671670
1 56890611 3200671700
I 56890612 3200671710
0234
0234
02~
02~
02~
02~
0234
02~
02~
0234
02~
02~
0234
0234
0234
8092 FRYER W/WARMER
8093 UNIT COOLER
8119 SCALE
8190 DELI COOLER
8191 TELEPHONE
8271 PIZZA CASE
8278 UPC PRINTER/SCALE
8279 UPC PRINTER/SCALE
8285 SHELVING
8286 SHELVING
8287 COOLER SHELVING
8356 CHOPPER
8560 LEASEHOLD IMPROVEM
86 COMPRESSOR SYSTEM
8655 PINEAPPLE PEELER W
89 MEAT COOLER
90 COMBINATION COOLER
9550 AUX COMM ADAPTER
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
3200671720
320067173O
31458888 0320067254T
3200673490
3200673500
9293-0506 0320067493T
6D6416 3200675040
6D6396 3200675050
3200675110
3200675120
3200675130
11426830 3200676980
3200679870
B6995-0051 3000172820
3200681460
3000174540
3000174560
3200694820
Exhibit 1.6(a)
Preliminary Inventory Amount
[to come]
Retail Price Percentages/Costs
............................... ~ ............ ~ .... J ...... ~ ....... t ........ ~' ......... thc
The value of items in each of the followine cateeories shall be determined bv
multiDl,,4ne the lowest marked retail nrice for dismtaved Inventory at the 'Store
Locations bv the followine multipliers:
=* grocerv 75%
· liquor 82%
__- dairy 70%
__* frozen foods 70%
· cigarettes 80%
...... mud health and beauty care inventory, a rolling wc:.ghtc~ ........... '
· meat 75%
__, produce 50%
· seafood 50%
· deli 55%
=. bakery 50%
~ floral inventorv 40%
......... , ~. ...... , .............. . !:akc.D .... .~...'~ n~.x~.,~.., h~senter:,', the current moving
average cost for such items·
For pharmacy inventory, the latest cost for such items· N/A
Store shall not be closed other than durin~ its norrnal ooerating hours.
............ ~4~=4~ %D~:~_ 9/I 9/2003 4-28 PM XXX
Exhibit 1.6Co)
Inventory Procedure Instructions
Two weeks prior to the Closing (as defined in Section 2.1), Purchaser and Seller shall:
· Identify their respective representatives (collectively, the "Representatives").
Assign and identify Purchaser and Seller inventory captains for each store-(the
"Inventory Captains") (potentially the Store Manager or District Manager and an
assigned Purchaser Representative):
Assign and identify perishable inventory counters for each store (potentially the
department manager and an assigned Purchaser Representative).
Identify the mutually agreed upon inventory counting firm(s) (Each an "Inventory
Counting Firm").
Identify a primary representative from the Inventory Counting Firm(s) (the "Firm
representative(s)")
Seven days prior to the store closing,, the Representatives plus the Firm
Representative(s) and the Team LeaderS' shall meet at a mutually agreed to time and
place to review the inventory procedures including:'
· Introducing the identified personnel.
· Setting the times for the commencement of the inventories.
Reviewing the procedures for inventory preparation.
Reviewing the procedures for the non-perishable and perishable inventory counts.
Establishing the order for the inventory review and having the Representatives
acknowledge such an order.
The representatives shall jointly walk each store to review any concerns identified
by the Team Leaders.
After the store closing but prior to the Closing:
Inventory counting firm(s) shall provide a "standard" consistent itemized
inventory count identification schedule and map for each store.
All identified unsaleable or damaged product shall be eliminated either through
retail sales, discard or other disposition prior to the scheduled inventory count.
The perishable inventory crews shall take the inventorieg using standard inventory
procedures, forms, and practices as outlined on the attached perishable inventory
instructions (attach standard inventory forms used by Seller).
5~5'~',i2.~D.'2rq45_4.~2(~l~(2 9/19/2003 4:28 PM xxxi
The inventory shall be taken by the Inventory Counting Firm(s) in subsections of
natural breaks of shelving, not more than 8' per section from left to right then
vertical. After each subsection is counted, the counter from the Inventory
Counting Firm(s) shall initial off on an inventory subsection total and place it at
the end of the section the count represents. Each section of the itemized inventory
count identification schedule shall be totaled.
The inventory shall be completed in agreed to sections. Once a complete section is
counted, as the counters move on to the next section, the Inventory Captains shall
walk each section with the Team Leader immediately after the section is counted
and acknowledge review and acceptance of each count. The Inventory Captain of
the Seller or the Purchaser or both can request a section recount during the review.
A Lead Counter shall do the recount. If more than two sections counted by the
same counter are deemed substantially inaccurate during the recount, that counter
may be eliminated from the crew at the request of either Seller's or Purchaser's
Inventory Captain.
Both the non-perishable and perishable inventories shall be taken utilizing
customer inventory count identification tags that the Inventory Counting Firm(s)
uses for its non-perishable inventories or a similar system for the perishable
inventories. The inventory count identification tags shall not be pulled until the
Representatives complete the store 'inventory walk and jointly authorize the tags
being pulled.
Each Inventory Captain and the two Lead Counters shall remain at each store until
after the Representatives walk each store and sign off and accept the inventory as
completed, with the final valuation to be completed in accordance with the
Agreement.
9/19/2003 4:28 PM xxxii
Exhibit 2
FORM OF ASSIGNMENT AND ASSUMPTION OF LEASE DOCUMENTS
This Instrument Prepared By
And After Recording Return To:
[
ASSIGNMENT AND ASSUMPTION OF LEASE DOCUMENTS
This ASSIGNMENT AND ASSUMPTION OF LEASE DOCUMENTS (this
"Assignment"), dated as of the day of ,2003, is executed by and between
EAGLE FOOD CENTERS, INC., a Delaware corporation ("Assignor"), and ,
an corporation ("Assignee"). For and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby assigns and transfers to Assignee all of Assignor's right,
ritle, interest and obligation in and under that certain Assignment of Lease and Agreement dated
November 10, 1987 between Lucky Stores, Inc. and Eagle Food Centers, L.P. (the "Assignment")
and all of Assignor's right, title and interest derived therefrom in the instruments set forth, along
with said Assignment, on Exhibit A attached hereto (collectively, the "Lease Documents"), which
Lease Documents create a leasehold estate in a eem/n parcel of real property located in
, described on Exhibit B attached hereto and described more fully in
the Lease Documents (the "Leased Premises"). To the extent that the Assigmnent is not an
executory contract (as that term' is used in 11 U.S.C. §365), the interests in the other Lease
Documents conveyed hereby to Assignee are subject to all of the rights, interests, obligations and
duties imposed on the assignee under, pursuant to and as provided in the Assignment as if
Assignee were the original assignee thereunder. Assignee hereby accepts such assignment and
transfer and agrees to assume and to perform and discharge all obligations and liabilities of
Assignor under the Lease Documents which arise after the date hereof and relate to the period
after the date hereof. Assignor hereby makes no representations or warranties of any kind or
nature whatsoever with respect to the Lease Documents, whether express or implied, any and all
such representations and warranties being expressly disclaimed. This Assignment may be
executed in any one or more counterparts, each of which shall constitute an original and all of
which, when taken together, shall constitute but one and the same instrument. This Assignment
shall inure to the benefit of and be binding upon and enforceable against Assignor and Assignee
and their respective successors and assigns.
[Signature Page Follows]
IN ~VII'NESS WHEREOF, Assignor and Assignee have caused this Assignment and
Assumption of Lease Documents to be executed as of the date first written above.
ASSIGNOR:
EAGLE FOOD CENTERS, INC., a Delaware
corporation
By:
Name:
Its:
ASSIGNEE:
Name:
Its:
STATE OF )
) SS:
COUNTY OF )
BEFORE ME, a Notary Public in and for said County and State, personally appeared
, who acknowledged that he did execute the foregoing instrument on
behalf of EAGLE FOOD CENTERS, INC., a Delaware corporation, and that the same was his
free act and deed individually and in his capacity indicated above, and the flee act and deed of the
corporation.
IN WITNESS 'C/HEREOF, I have hereunto set my hand and seal at this
~ 2003.
day of
Notary Public
Name:
My Commission Expires:
STATE OF )
J SS:
COUNTY OF )
BEFORE ME, a Notary Public in and for said County and State, personally appeared
, who acknowledged that he did execute the foregoing instrument on
behalf of , an corporation, and that the same was his flee act and
deed individually and in his capacity indicated above, and the free act and deed of the
corporation.
IN WH'NESS WHF_iLEOF, I have hereunto set my hand and seal at this
,2003.
day of
Notary Public
Name:
My Commission Expires:
Exba~bit A
Lease Documents
Exhibit B
LeasedPremises
Exhibit 3
Store 130: Dubuque, Iowa Cure Amount:
April Rent 2003 $18,777.92
2002/2003 Taxes $34,696.00
TOTAL CURE AMOUNT: $53,473.92
Store 234: Clinton, Iowa Cure Amount:
April Ground Rent 2003 $1,736.17
April Building Rent 2003 i $1,041.67
2002/2003 Taxes $72,110.00
TOTAL CURE AMOUNT: $74,887.84
The cure amounts above shall also include any other mutually agreeable administrative
claims, of wlfich the landlord is not presently aware and of which the Landlord notifies
Eagle in writing by the Closing of the Sale, that arise between the date hereof and the Closing
of the Sale. If after good faith negotiations, the parties cannot agree as to legitimacy or
amount of any such administrative claims, then the parties agree to submit such dispute to
the Bankruptcy Court for final resolution.
416895-Chicago S2A 23
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)
In re: )
)
EAGLE FOOD CENTERS, INC., )
et )
)
Debtors. )
Case No. 03-15299 (PSH)
(Jointly Administered)
Chapter 11
Hon. Pamela S. Hollis
ORDER IN FURTHERANCE OF ORDER PURSUANT TO (i) 11 U.S.C. § 327
AUTHORIZING AND APPROVING THE RETENTION OF GRAFE AUC-
TION COMPANY, INC. AS LIQUIDATING AGENT AND (ii) 11 U.S.C. §§
105 AND 363 APPROVING THE SALE OF CERTAIN FURNITURE, FIX-
TURES AND EQUIPMENT WITHOUT FURTHER COURT APPROVAL,
ENTERED ON JUNE 27, 2003, APPROVING RETENTION OF GRAFE
AUCTION COMPANY, INC. TO SERVE AS EQUIPMENT LIQUIDATING
AGENT FOR UP TO 12 ADDITIONAL STORES
This matter having come before the Court on the motion dated
September 19, 2003 (the "Motion"),~ of Eagle Food Centers, Inc. ("Eagle Foods")
and four of its subsidiaries and affiliates (the "Affiliate Debtors"), the debtors and
debtors-in-possession in the above captioned cases (collectively, the "Debtors"), for
entry of an order, pursuant to Sections 105, 327 and 363 of Title 11 of the United
States Code, 11 U.S.C. §§ 101, et seq., as amended (the "Bankruptcy Code") (i)
au~zmg the Debtors to retain Grafe as the Closing Store Agent; and (ii) authoriz-
~pitalized terms used but not otherwise defined herein shall have the
meaning ascribed to them in the Motion
ing the sale of the Surplus Store FF&E without further Court approval; it appearing
to the Court that (i) it has jurisdiction over the matters raised in the Motion pursuant
to 28 U.S.C. §§ 157 and 1334; (ii) this is a core proceeding pursuant to 28 U.S.C. §
157(b)(2); (iii) the relief requested in the Motion is in the best interests of the
Debtors, their estates and their creditors; (iv) the Debtors have (a) determined, in
their reasonable business judgement, which of the bids submitted was the highest or
otherwise best offer, and (b) properly rejected any and all bids that, in the Debtors'
sole discretion, were (x) inadequate or insufficient, (y) not in conformity with the
requirements of the Bankruptcy Code, or (z) contrary to the best interests of the
Debtors, their estates and their creditors; (v) proper and adequate notice of the
Motion and the heating thereon has been given and that no other or further notice is
necessary; and (vi) upon the record herein after due deliberation thereon good and
sufficient cause exists for the granting of the relief as set forth herein,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The Motion is GRANTED.
2. The retention of Grate as the Closing Store Agent pursuant to 11
U.S.C. § 327 is hereby approved.
3. The Closing Store Agent is authorized, at the Debtors' direction, to
conduct liquidation sales at the Stores.
4. Grafe shall not be required to file formal applications for approval of
compensation and reimbursement of expenses; provided, however, within 30 days
at'ter completion of the services contemplated by this Order, the Debtors or the
Debtors' counsel shall file on Grafe's behalf a summary of proceeds realized, com-
missions paid and reimburseable expenses incurred, which summary shall be in full
satisfaction of the Bankruptcy Code requirements including, but not limited to,
sections 327, 328, 330 and 331 of the Bankruptcy Code and Rule 2016 of the Federal
Rules of Bankruptcy Procedure.
5. The Debtors are authorized to sell Surplus Store FF&E flee and clear
of all liens, claims, encumbrances and interests pursuant to section 363(0 of the
Bankruptcy Code.
6. The sale of Surplus Store FF&E conducted pursuant to the terms of
the Agreement are deemed to be arm's-leng~h transaction entitled to the protections
of section 363(m) of the Bankruptcy Code and, subject to adherence to the terms of
the Agreement, the ultimate purchasers of the Surplus Store FF&E shall be deemed
to be good faith purchasers and shall be entitled to the protections afforded by section
363(m) of the Bankruptcy Code.
7. The Debtors and their officers, employees and agents are authorized to
perform all of their obligations, take whatever actions necessary, and issue, execute
3
and deliver whatever documents, purchase agreements, deeds and bills of sale as may
be necessary or appropriate to implement and effectuate the Agreement:
8. Any and all Net Proceeds (as defined in the Agreement) of sales of the
Surplus Store FF&E shall be utilized consistent with the provisions of the DIP
Agreement and the Final DIP Order entered in these cases and with respect to Other
Liens, if any, to the extent permitted by the Bankruptcy Code.
9. The Court shall retain jurisdiction over any matter or dispute arising
from or relating to the implementation of this Order.
10. No further orders of this Court are necessary to effectuate the terms
set forth herein for transactions or related series of transactions completed in good
ENTERED
Dated: Chicago, Illinois
,2003
SEP 3 0 ?_003
pAMELA S HOLLtS
RANKRuPTCY jUL~GE
UNITED STATES BANKRUPTCY JUDGE