Exhibit 2.1(b)
FINAL EXECUTION COPY
ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement (the "Agreement") is made and entered into as of
this ___ day of June, 2002, by and among Bigfoot Food Stores LLC, together with
its affiliated assigns (including any affiliate to be formed to make the
acquisition described herein) ("Buyer") and Dairy Mart Convenience Stores, Inc.
and its subsidiaries and affiliates, as debtors-in-possession (collectively,
"Debtor" or "Seller") under jointly administered Case Nos. 01-42400(AJG) (the
"Case") pending in the United States Bankruptcy Court for the Southern District
of New York (the "Bankruptcy Court").
RECITALS
A. Seller is engaged in the retail convenience store business and operates
approximately 450 stores (the "Seller's Business").
B. Seller wishes to sell to Buyer certain of the assets Seller uses in
connection with the Seller's Business at the price and on the other terms and
conditions specified in detail below and Buyer wishes to so purchase and
acquire such assets from Seller.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. TRANSFER OF ASSETS
a. PURCHASE AND SALE OF ASSETS. On the Closing Date, as hereinafter defined,
in consideration of the covenants, representations and obligations of
Buyer hereunder, and subject to the conditions hereinafter set forth,
Seller shall sell, assign, transfer, convey and deliver to Buyer, and
Buyer shall purchase from Seller all of Seller's right, title and interest
in and to certain assets of Seller (excluding the Excluded Assets, as
defined below) (collectively, the "Assets"), described as follows:
i. ACQUIRED STORES. All of Seller's right, title and interest as owner
or lessee under the existing real property leases, the real property
owned by Seller and the franchise stores of Seller, in each case
associated with the stores set forth on EXHIBIT A-1 to this
Agreement (as such Exhibit may be amended, as set forth in
subsection iii.A below) (collectively, the "Acquired Stores"). Such
real property leases for the Acquired Stores are collectively
referred to hereafter as the "Real Property Leases".
ii. LEASES AND OTHER CONTRACTS. All of Seller's right, title and
interest (A) as lessee under those equipment, personal property and
intangible property leases, rental agreements, licenses, contracts,
agreements and similar arrangements described on EXHIBIT A-2 to this
Agreement (collectively, the "Other Leases"), and (B) as a party to
those other contracts, leases, orders, purchase orders, licenses,
contracts, agreements and similar arrangements described on EXHIBIT
A-3 to this Agreement (the "Other Contracts" and together with the
Other Leases, the "Other Leases and Contracts"). From and after the
date hereof until the fifth business day prior to the Auction (as
defined in Section 18), the Buyer shall have the right to make
additions to, and deletions from, the list of Other Contracts by
delivering a marked copy of
any such list to Seller, and such changes shall be effective
immediately upon receipt by Seller.
iii. RIGHT TO AMEND ACQUIRED STORES SCHEDULE. From and after the date
hereof until the fifth business day prior to the Bid Deadline (as
defined in Section 18) (or, in the case of subsections B.1 or B.2
below only, until the Closing Date), the Buyer shall have the right,
in its sole discretion, to make additions or deletions from the list
of Acquired Stores as follows:
A. Buyer shall have the right to redesignate a Non-Acquired Store
(as defined in Section 1.b.ix) as an Acquired Store (any such
store shall be called a "Redesignated Store") on the following
terms:
1. Buyer may redesignate up to thirty (30) Non-Acquired Stores as
Acquired Stores by paying Seller the value of the Inventory
(as defined in Section 1.a.viii), valued at cost, at each such
Redesignated Store on the Closing Date (for any store, the
"Inventory Cost");
2. Buyer may redesignate up to an additional ten (10)
Non-Acquired Stores as Acquired Stores by paying Seller a fee
(an "Acquired Store Redesignation Fee") of $125,000 for each
such Redesignated Store plus the value of the Inventory Cost;
and
3. Buyer may redesignate any additional Non-Acquired Stores as
Acquired Stores by paying Seller an Acquired Store
Redesignation Fee of $20,000 for each such Redesignated Store
plus the Inventory Cost at such stores.
B. Buyer shall have the right to redesignate an Acquired Store as a
Non-Acquired Store on the following terms:
1. where (W) the Acquired Store is closed, materially damaged or
no longer in operation by Seller, or (X) there occurs from the
date hereof at the property associated with such Acquired
Store any Material Violation of Environmental Laws (as defined
below), or (Y) Buyer's "phase two" environmental testing with
respect to the Acquired Stores located in the state of
Michigan and set forth on EXHIBIT A-8 (provided for in Section
17.a) reveals any Material Violation of Environmental Laws
with respect to the property associated with any such Acquired
Store existing on or before the Closing Date which condition
was not disclosed in writing to Buyer prior to the date hereof
or which property was not designated by "ENV" on EXHIBIT A-1
prior to the date hereof or (Z) RPMS does not consent to
"phase two" environmental testing for any RPMS Location (as
provided for in Section 17.a);
2. with respect to any property where Seller becomes aware (in
which case Seller shall notify Buyer promptly in writing) or
Buyer discovers any Material Violation of Environmental Laws
with respect to the property associated with such Acquired
Store existing on or before the Closing Date which condition
was not disclosed in writing to Buyer prior to the date hereof
or which property was not designated by "ENV" on EXHIBIT A-1
prior to the date hereof; or
3. if Buyer pays an amount (the "Non-Acquired Store Redesignation
Fee") with respect to each such former Acquired Store (each, a
"Non-Acquired Redesignated Store") in
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cash at Closing to the Escrow Holder referred to in Section
2.a.iii below equal to the amount set forth on EXHIBIT A-9.
4. "Material Violation of Environmental Laws" means, for purposes
of this Agreement, (A) any release of petroleum or gasoline
constituents in an amount required to be reported under any
applicable environmental laws, which release could reasonably
be expected to require investigation and remediation and
result in costs exceeding $50,000 or (B) any failure to
maintain registration and qualification for all applicable
reimbursement pursuant to the requirements of any applicable
state agency or trust fund.
iv. IMPROVEMENTS. Any improvements associated with any of the Acquired
Stores, but in all events only to the extent, if any, of Seller's
right, title and interests in and to the same (collectively, the
"Improvements").
v. PERSONAL PROPERTY. All of those items of equipment and tangible
personal property owned by Seller listed on EXHIBITS B-1 and B-2 to
this Agreement and any other tangible personal property acquired by
Seller after the date hereof in the ordinary course of business but
prior to the Closing Date in connection with any of the Acquired
Stores or Other Leases or located in the Debtor's headquarters
(including all security deposits currently on deposit pursuant to
the Real Property Leases and Other Leases and Contracts assigned to
Buyer as identified on EXHIBITS X-0, X-0 and A-3) (collectively, the
"Personal Property"). As used in this Agreement, the term Personal
Property shall not include the Inventory but shall include all
headquarters building equipment including computers, systems and
records and storage facilities, whether owned or leased (to the
extent the applicable equipment lease is assumed by Buyer hereunder)
by Seller, including those items listed on EXHIBIT B-2 to this
Agreement; PROVIDED, HOWEVER, that the term Personal Property shall
not include any headquarters building phones or communications
systems, as listed on EXHIBIT B-3 to this Agreement, unless Buyer
assumes the headquarters lease upon expiration of the Sublease (but
Buyer shall have the right to use such phones and communications
systems during the term of the Sublease).
vi. INTANGIBLE PROPERTY. All intangible personal property owned or held
by Seller, to the extent used in connection with the Acquired
Stores, but in all cases only to the extent of Seller's right, title
and interest therein and only to the extent transferable, together
with all books, records and like items to the extent pertaining to
the Acquired Stores (collectively, the "Intangible Property"),
including, without limitation, the name "Dairy Mart" and the items
identified on EXHIBIT C to this Agreement. As used in this
Agreement, Intangible Property shall in all events exclude, (A) any
materials containing privileged communications and any other
materials which are subject to attorney-client or any other legally
recognized privilege, (B) information about employees that are not
hired by Buyer pursuant to Section 10, and (C) Seller's books and
records to the extent they do not relate to the Assets or the
Assumed Liabilities.
vii. RECEIVABLES. All accounts and notes receivable arising out of or
relating to the remediation of any environmental or similar
condition that relate to the Acquired Stores and are payable by
state agencies or trust funds to Seller to reimburse costs and
expenses paid by Seller (collectively, the "Environmental
Receivables"), all of which are listed with respect to the Acquired
Stores on a store-by-store basis as of February 2, 2002 on EXHIBIT
A-11.
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viii. INVENTORY. All supplies, goods, materials, work in process,
inventory and stock in trade owned by Seller situated at, or in
transit to, the Acquired Stores and the Non-Acquired Stores
(collectively, the "Inventory").
ix. FINANCIAL OPPORTUNITIES, INC. All of Seller's right, title and
interest in and to all issued and outstanding shares of capital
stock (the "Financial Opportunities Shares") of Financial
Opportunities, Inc., a wholly-owned subsidiary of Seller which is a
Small Business Investment Corporation, licensed by the U.S. Small
Business Administration.
x. LICENSES. All assignable Licenses (as hereinafter defined)
including, without limitation, those alcoholic beverage Licenses
listed on EXHIBIT A-12.
b. EXCLUDED ASSETS. Notwithstanding anything to the contrary in this
Agreement, the Assets shall not include any assets or property of the
Debtor that is not an Asset under Section 1.a (above), including the
following property of the Debtor:
i. CASH. All cash, cash equivalents, bank deposits, tax refunds and all
security deposits (not otherwise identified as an Asset above),
prepaid expenses and warranties (PROVIDED, HOWEVER, that certain of
these items shall be pro-rated as of Closing in accordance with this
Agreement).
ii. SOLD INVENTORY. Inventory sold or transferred by Seller in the
ordinary course of business of the Acquired Stores and/or the
Non-Acquired Stores prior to the Closing Date.
iii. TERMINATED LEASES AND CONTRACTS. Any lease, rental agreement,
contract, agreement, license or similar arrangement ("Contract"),
which by its terms terminates or expires prior to the Closing Date.
iv. CLAIMS AND CAUSES OF ACTION. All claims and causes of action of
Seller (not otherwise identified as an Asset above) including,
without limitation, all preference or avoidance claims and actions
of the Seller, including any such claims and actions arising under
Chapter 5 of the United States Bankruptcy Code (the "Bankruptcy
Code").
v. RIGHTS UNDER ASSET PURCHASE AGREEMENT. The Seller's rights under
this Agreement and all cash and non-cash consideration payable or
deliverable to the Seller pursuant to the terms and provisions
hereof.
vi. INSURANCE PROCEEDS. Insurance proceeds, claims and causes of action
with respect to or arising in connection with (A) any Contract which
is not assigned to Buyer at the Closing, (B) any item of tangible or
intangible property not acquired by Buyer at the Closing or (C) any
event, action or circumstance existing prior to the Closing, to the
extent the foregoing does not relate to the Assets.
vii. SPECIFIED PROPERTY. (A) Any Contract that cannot be transferred to
Buyer under applicable law, other than Contracts for which third
party consent is required and has been obtained, (B) any Contract
which is not a Real Property Lease, an Other Lease or an Other
Contract at the Closing, (C) any other assets or property of Seller,
to the extent associated with Seller's stores
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that are not Acquired Stores, (D) the minute books, stock transfer
books and corporate seal of Seller and (E) any property or assets
listed on EXHIBIT D hereto.
viii. RECEIVABLES. All of Seller's right, title and interest in and to all
accounts and notes receivable, other than the Environmental
Receivables (collectively the "Non-Acquired Receivables").
Notwithstanding the foregoing, upon the option of Seller to be
exercised no later than the Bid Deadline, Buyer agrees to use its
best efforts to collect, and shall remit the amounts collected (net
of Buyer's compensation due from Seller) on Non-Acquired
Receivables, other than the Non-Collection Receivables (defined
below), as Seller's agent and pursuant to an agreement to be
executed at Closing (the "Receivables Collection Agreement"). The
Receivables Collection Agreement will provide, among other things,
that (A) Buyer is authorized to take any lawful action and to
execute and deliver any lawful document as Seller's agent that in
Buyer's discretion is reasonably required to effect a commercially
reasonable collection (which shall include at least the same steps
and actions and the exercise of the same diligence as Buyer uses in
collecting accounts receivable arising in the ordinary course of its
business) of the Non-Acquired Receivables (including the authority
and discretion to compromise and settle Seller's claims to such
receivables and any asserted defenses and offsets thereto) during a
term commencing on the Closing Date and ending on the earlier of (1)
thirty days after written notice of termination by Seller or (2) one
year after the Closing Date; (B) where an account debtor has more
than one invoice outstanding with respect to Seller's Business
(whether arising before or after the Closing), any amounts remitted
by such account debtor shall be applied first to the longest
outstanding invoice; and (C) the amount collected and to be remitted
(net of Buyer's compensation) with respect to any of the
Non-Acquired Receivables shall be deemed to include the cash
received in respect thereto, plus the value of any benefit received
by Buyer in respect of the compromise, settlement or cancellation of
any such Non-Acquired Receivable. As compensation for Buyer's
services performed under the Receivables Collection Agreement, Buyer
shall retain 10% of all cash amounts collected in respect of
Non-Acquired Receivables and any reasonable legal fees and expenses
incurred by Buyer to any outside counsel that was engaged to collect
such Non-Acquired Receivables. The Receivables Collection Agreement
shall contain terms and provision typical of such agency
arrangements. The Non-Acquired Receivables that will be subject of
the Receivables Collection Agreement shall not include any
Non-Acquired Receivables: (A) that are accounts or notes receivable
arising out of or relating to the remediation of any environmental
or similar condition that relate to the Non-Acquired Stores, (B)
that are due from DB Mart as acquiror of Seller's New England
business and stores and (C) all rights relating to any claims or
causes of action of the types described in subsections b.iv and vi
above that have been reduced to receivables prior to Closing
(collectively, the "Non-Collection Receivables").
ix. NON-ACQUIRED STORES. The stores identified on EXHIBIT A-4
("Non-Acquired Stores") and all of Seller's right, title and
interest (A) as lessee under the existing real property leases
(collectively the "Non-Acquired Store Real Property Leases"), the
real property owned by Seller and the franchise stores of Seller, in
each case associated with Non-Acquired Stores as set forth on
EXHIBIT A-4 to this Agreement (as such Exhibit may be amended, as
set forth in Section 1.a.iii.), (B) as lessee under those equipment,
personal property and intangible property leases, rental agreements,
licenses, contracts, agreements and similar arrangements relating to
the Non-Acquired Stores and described on EXHIBIT A-5 to this
Agreement (the "Non-Acquired Stores Other Leases"), (C) as a party
to those other contracts, leases, orders, purchase orders, licenses,
contracts, agreements and similar arrangements described on
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EXHIBIT A-6 to this Agreement (the "Non-Acquired Stores Other
Contracts" and together with the "Non-Acquired Stores Other Leases,"
the "Non Acquired Stores Other Leases and Contracts") and (D) as
licensee under those alcoholic beverage Licenses listed on EXHIBIT
A-6A.
c. SUBLEASE OF HEADQUARTERS BUILDING. Effective as of the Closing Date and
pursuant to a sublease substantially in the form of EXHIBIT E (the
"Sublease"), Debtor will sublease to Buyer Debtor's headquarters building
for a term of 6 months with Buyer undertaking to Debtor by such sublease
(i) monetary and non-monetary obligations identical to those of Debtor to
Debtor's landlord under its headquarters lease during such term; and (ii)
to pay for all other costs, expenses and liabilities in respect of Buyer's
operation of such headquarters building. The Sublease shall also provide
for a license from Buyer to Debtor in order for representatives of Debtor
to use de minimis office space and equipment at the headquarters building
in order for Debtor to administer the Excluded Assets and Debtor's estate
after the Closing Date. The Buyer shall have the option to accept an
assignment of the headquarters lease after the term of the Sublease upon
30 days' prior written notice delivered by Buyer to Seller, whereupon such
lease shall be treated as a "Real Property Lease" hereunder.
d. INSTRUMENTS OF TRANSFER. The sale, assignment, transfer, conveyance and
delivery of the Assets to Buyer, the Sublease and the assumption of
liabilities provided herein by Buyer shall be made by assignments, bills
of sale, deeds, a sublease agreement and other instruments of assignment,
transfer and conveyance provided for below and such other instruments as
may reasonably be requested by Buyer or Seller. None of the foregoing
documents shall increase in any material way the burdens imposed by this
Agreement upon Seller or Buyer.
2. CONSIDERATION.
a. PURCHASE PRICE FOR ASSETS.
i. The cash consideration to be paid by Buyer to Seller for the Assets
shall be an amount equal to the sum of (1) sixty-one million eight
hundred and sixty-five thousand dollars ($61,865,000) with respect
to the Acquired Stores, plus (2) an amount equal to 100% of the
Inventory Cost for Inventory in the Acquired Stores, plus (3) an
amount equal to 60% of the Inventory Cost for Inventory in the
Non-Acquired Stores, plus (4) an amount equal to the sum of the
Acquired Stores Redesignation Fees (as set out in Section
1.a.iii.A), plus (5) an amount equal to the sum of all Non-Acquired
Store Redesignation Fees (as set out in Section 1.a.iii.B.3 (the
"Non-Acquired Store Redesignation Amount") plus (6) the adjustments
set forth in Paragraphs ii.A, B, C and D below (as calculated on the
Closing Date, subject to post-closing adjustments where applicable),
plus (7) the amount of cure costs under Section 365 of the
Bankruptcy Code associated with Other Contracts assigned to Buyer,
minus (8) the adjustment, if any, required by Section 18.b below;
all of which shall be paid in cash by wire transfer of immediately
available good funds (funds delivered in this manner are referred to
herein as "Good Funds") on or prior to the Closing Date in
accordance with this Section (the "Purchase Price").
ii. The Purchase Price shall be subject to the following adjustments
(collectively referred to herein as the "Purchase Price Adjustments"
and the Purchase Price as adjusted is referred to herein as the
"Adjusted Purchase Price").
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A. Buyer shall pay 100% of the Inventory Cost for the Inventory in the
Acquired Stores (the "Acquired Store Inventory Value") plus 60% of
the Inventory Cost for the Inventory in the Non-Acquired Stores (the
"Non-Acquired Store Inventory Value") for all of the Inventory.
B. If it is determined, pursuant to the procedures outlined in
subsection E below, that the amounts of the actual four-wall
earnings before interest, taxes, depreciation, amortization and
capital and operating equipment lease payments (to the extent such
equipment lease payments are contained within the profit and loss
statement for the individual property) for the fiscal year ending on
February 2, 2002, determined in a manner consistent with past
practice ("FYE-02 Four-Wall Cash Flow"; the amount of FYE-02
Four-Wall Cash Flow for each store of Seller is set forth on EXHIBIT
A-10, the "FYE-02 Four-Wall Cash Flow Schedule") relating to the
Acquired Stores set forth on the FYE-02 Four-Wall Cash Flow Schedule
(the sum of such amounts being referred to herein as the "Acquired
Stores FYE-02 Four-Wall Cash Flow") were not determined in a manner
consistent with past practice and if as a result thereof, the sum of
the actual amounts of FYE-02 Four-Wall Cash Flow relating to the
Acquired Stores (the "Restated Acquired Stores FYE-02 Four-Wall Cash
Flow") is less than ninety five percent (95%) of the Acquired Stores
FYE-02 Four-Wall Cash Flow, then the Purchase Price shall be reduced
by an amount equal to the difference between the Restated Acquired
Stores FYE-02 Four-Wall Cash Flow and ninety five percent (95%) of
the Acquired Stores FYE-02 Four-Wall Cash Flow.
C. The parties agree that they shall cooperate to jointly negotiate
with Seller's equipment lessors in order for Seller to enter into
arrangements or settlements with each such lessor with respect to
all claims and liabilities under the respective equipment leases and
in order to transfer such equipment to Buyer free and clear of all
Encumbrances (as defined in Section 12.d). If and to the extent that
such equipment is transferred to Buyer free and clear of all
Encumbrances, the Purchase Price shall be increased by the lesser of
(x) the sum of the book value of the equipment lease obligations
corresponding to such equipment at the Acquired Stores (which value
for all of Seller's stores are set forth on EXHIBIT A-7) or (y) the
aggregate cash amount that Seller agrees to pay to such lessors in
respect of such arrangements or settlements, plus 20% of any
unsecured claim amounts, if any, of such lessor resulting from such
arrangements or settlements, in each case to the extent such amounts
relate to such equipment associated with Acquired Stores. If and to
the extent that no such arrangements or settlements are made with
respect to any equipment lease, at any time prior to the Closing,
Buyer shall have the right to delete such lease from the list of
"Other Leases" and, in that event, the Purchase Price shall be
increased by 20% of any unsecured claim amounts, if any, of such
lessor resulting from such rejection to the extent such amounts
relate to the equipment associated with the Acquired Stores.
D. In the event that any Acquired Store is redesignated as a
Non-Acquired Store pursuant to Section 1.a.iii.B.1 or Section
1.a.iii.B.2, then the Purchase Price payable at the Closing shall be
reduced by an amount equal to three (3) times such store's FYE-02
Four-Wall Cash Flow.
E. (1) Two (2) business days prior to the Closing Date Seller shall
deliver to the Buyer a schedule detailing its good faith estimate of
the Acquired Store Inventory Value and the Non-Acquired Store
Inventory Value on a store-by-store and aggregate basis (the
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"Estimated Inventory Value"), the Purchase Price Adjustment required
by Sections 2.a.ii.C and 2.a.ii.D above and the certificate required
by Section 11.b.ii and the resulting Purchase Price Adjustment, if
any (the "Closing Adjustments Schedule"). In the event of a dispute
between the parties as to the Closing Adjustments Schedule, which
cannot be resolved prior to the Closing Date, the parties shall
close based upon the Closing Adjustments Schedule.
(2) Seller and Buyer shall engage a reputable third party firm
(the "Inventory Service") to conduct a physical count of the
Inventory at each Acquired Store and Non-Acquired Store (each, a
"Physical Inventory"), which shall commence promptly after entry of
the Approval Order (as defined in Section 18). The fees and expenses
(not to exceed $200,000) of the Inventory Service shall be borne
equally by Seller and Buyer, and the parties may agree with the
Inventory Service that employees of Seller or Buyer, as applicable,
will conduct the Physical Inventory at mutually agreed stores. Each
party shall be entitled to reasonable prior notice of and to have
its representatives, at its expense, present to observe the Physical
Inventory at each store. The parties shall use their best efforts to
complete the Physical Inventory promptly after the Closing Date, and
in any event within 10 business days after the commencement thereof.
As promptly as practical after completion of the Physical Inventory,
the Inventory Service shall provide to Seller and Buyer a written
report of the physical count of the Physical Inventory on a
store-by-store basis. With respect to each store, Buyer shall
calculate the difference between (X) the Estimated Inventory Value
at such Store and (Y) the result of (i) the Acquired Store Inventory
Value or Non-Acquired Store Inventory Value (as applicable) at the
date of the Physical Inventory based on the Physical Inventory, plus
(ii) purchases of Inventory (valued at cost) at such store (or 60%
thereof in the case of a Non-Acquired Store) between the Physical
Inventory and the Closing Date, or as applicable, between the
Closing Date and the Physical Inventory, minus (iii) sales of
Inventory (valued at the same respective costs used for each item of
Inventory for purposes of clauses (i) and (ii)) at such store (or
60% thereof in the case of a Non-Acquired Store) between the
Physical Inventory and the Closing Date, or as applicable, between
the Closing Date and the Physical Inventory. The remainder of the
amount determined pursuant to clause (X) minus the amount determined
pursuant to clause (Y) is herein called the "Variance" with respect
to the applicable store. Buyer shall deliver to Seller the results
of the foregoing calculations on a store-by-store and aggregate
basis prior to the Objection Deadline (as hereinafter defined) and,
if such calculations require any increase or decrease of the
Purchase Price pursuant to the next succeeding sentences, Buyer's
delivery thereof shall constitute an objection to the Closing
Adjustment Schedule pursuant to subsection E.3 below. If it is
determined, pursuant to the procedures set forth in subsection E.3
below, that the aggregate of the Variance with respect to all of the
Acquired Stores and Non-Acquired Stores (the "Aggregate Variance")
is a positive amount, then for purposes of the Purchase Price
Adjustments, the Purchase Price shall be increased by 100% of the
Aggregate Variance. If it is determined, pursuant to the procedures
set forth in subsection E.3 below, that the Aggregate Variance is a
negative amount, then for purposes of the Purchase Price
Adjustments, the Purchase Price shall be decreased by 100% of the
absolute value of the Aggregate Variance.
(3) Buyer shall have sixty (60) days from the Closing Date to
notify Seller in writing of any objections it may have to the
Closing Adjustments Schedule (the "Objection Deadline"). If the
Buyer does not so object, the Purchase Price Adjustment
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set forth on the Closing Adjustments Schedule shall be deemed to be
final (other than with respect to the Aggregate Variance, if any).
If the Buyer does object in a timely manner and the parties cannot
resolve the disputed items within ten (10) business days of Seller's
receipt of Buyer's objections, either party may within ten (10)
business days submit the disputed items to the Bankruptcy Court for
its determination, which determination shall be considered final,
binding and non-appealable. In connection with any submission of
such dispute to the Bankruptcy Court in accordance with this
Section, each party shall submit to the Bankruptcy Court its
estimate of the Purchase Price Adjustment and any disputes to the
Closing Adjustments Schedule within ten (10) days after the
submission of such dispute to the Bankruptcy Court. The Bankruptcy
Court shall be charged solely with determining, within ten (10) days
after expiration of the period during which the parties are to
submit their respective estimates, which estimate is closest to the
amount that is due and shall award the amount of that estimate to
the appropriate party. No failure on the part of the Bankruptcy
Court to make such determination within such ten (10) days shall
constitute a release from liability or otherwise affect the
liability of the parties under this Agreement. Any adjustments
ultimately agreed upon or determined by the Bankruptcy Court shall
be funded within three (3) business days of such resolution.
F. In order to secure payment of any amounts determined due from any
party pursuant to the procedures set forth in clauses B and E above,
on or prior to the Closing Date, (A) Buyer will deposit, in addition
to payment of the Purchase Price, an amount (the "Buyer's Adjustment
Escrow") equal to two million two hundred fifty thousand dollars
($2.25 million) with the Escrow Holder (as defined in subsection iii
below), and (B) Seller will deposit an amount (the "Seller's
Adjustment Escrow") equal to four million dollars ($4 million) with
the Escrow Holder (the sum of the Buyer's Adjustment Escrow and the
Seller's Adjustment Escrow, the "Adjustment Escrow"). If it is
finally determined that a net Purchase Price Adjustment is due from
Seller to Buyer, the Escrow Holder shall promptly distribute to
Buyer the sum of (A) the Buyer's Adjustment Escrow and (B) the net
Purchase Price Adjustment due to Buyer, and shall distribute to
Seller (A) the Seller's Adjustment Escrow less (B) the net Purchase
Price Adjustment due to Buyer. If it is finally determined that a
net Purchase Price Adjustment is due from Buyer to Seller, the
Escrow Holder shall promptly distribute to Seller the sum of (A) the
Seller's Adjustment Escrow and (B) the net Purchase Price Adjustment
due to Seller, and shall distribute to Buyer (A) the Buyer's
Adjustment Escrow less (B) the net Purchase Price Adjustment due to
Seller. Any interest earned on the Adjustment Escrow shall be
distributed pro rata to Buyer and Seller based on the dollar value
of the Adjustment Escrow distributed to each. The Buyer's Adjustment
Escrow and the Seller's Adjustment Escrow shall serve as a cap on
recoveries due to Purchase Price Adjustments under clauses B and E
above and in no event shall Buyer or Seller have to pay more than
the Buyer's Adjustment Escrow or the Seller's Adjustment Escrow,
respectively, for such Purchase Price Adjustments.
iii. On or prior to the date hereof, Buyer shall deposit into escrow (the
"Escrow") with an independent escrow agent or company (the "Escrow
Holder") jointly designated by Seller and Buyer the sum of four million
dollars ($4,000,000) (the "Preliminary Deposit") in Good Funds,
pursuant to joint escrow instructions substantially in the form set
forth in EXHIBIT L hereto (the "Escrow Instructions") to be delivered
to and acknowledged by the Escrow Holder prior thereto. Prior to the
commencement of the hearing on the Procedure Order, Buyer shall deposit
into Escrow with the Escrow Holder the sum of four million dollars
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($4,000,000) (the "Second Deposit" and together with the Preliminary
Deposit, or each separately referred to as the "Deposit") in Good
Funds, pursuant to the Escrow Instructions. The Non-Acquired Store
Redesignation Amount payable by Buyer pursuant to Sub-Section
1.a.iii.B.3 shall also be deposited (the "Non-Acquired Store
Redesignation Fee Deposit") pursuant to the Escrow Instructions. The
Escrow Instructions shall include the provisions set forth in this
Section and in Section 2.a.ii.F above. Upon receipt of a Deposit, the
Escrow Holder shall immediately deposit the Deposit into an
interest-bearing account. The Deposit shall be immediately returned to
Buyer, with interest, if the Bankruptcy Court does not enter the
Procedure Order (substantially in the form attached hereto) within the
timeframe set forth herein, or if Buyer is not determined at the
Approval Hearing, or any other final hearing, to be the successful
bidder, or if the Closing otherwise does not occur for any reason other
than Buyer's default hereunder (including any event described in
Section 18.a(3) or (4) hereof). At the Closing, the Deposit (and all
interest accrued thereon) shall be delivered to Seller and credited
toward payment of the Purchase Price in the manner specified below. In
the event the Deposit becomes non-refundable by reason of the
termination of the transaction by reason of Buyer's default hereunder,
the Escrow Holder shall immediately disburse the Deposit and all
interest accrued thereon to Seller to be retained by Seller for its own
account, and in which event, the payment of the Deposit to Seller shall
be considered liquidated damages to Seller. It is agreed by both
parties that under all circumstances, the total liability of Buyer
shall be limited to the amount of eight million dollars ($8,000,000).
If the transactions contemplated herein terminate by reason of (A)
Seller's default, (B) the failure of a condition to Buyer's obligations
not resulting from a default by Buyer, or (C) the approval by the
Bankruptcy Court of a sale to a third party as described in the overbid
procedures described below, then the Escrow Holder shall immediately
return to Buyer the Deposit (together with all interest accrued
thereon). The Escrow Holder's escrow fees and charges shall be paid
one-half by Seller and one-half by Buyer.
iv. On the Closing Date, Buyer shall (i) pay and deliver to Seller, by wire
transfer in Good Funds, an amount equal to (A) the Adjusted Purchase
Price, less (B) the Deposit (and all interest accrued thereon) and (ii)
instruct the Escrow Holder to deliver the Deposit (and all interest
accrued thereon) to Seller, by wire transfer of Good Funds.
v. As soon as is practical after an order of the Bankruptcy Court
approving the assumption by Debtor and assignment to Buyer of any real
estate lease associated with a Non-Acquired Redesignated Store, the
Escrow Holder will pay to the Buyer the portion of the Non-Acquired
Store Redesignation Fee Deposit, and all income earned with respect to
such portion, relating to such assumed lease.
vi. As soon as is practical after an order of the Bankruptcy Court
approving the rejection by Debtor of any real estate lease associated
with a Non-Acquired Redesignated Store, the Escrow Holder will pay to
the Seller the portion of the Non-Acquired Store Redesignation Fee
Deposit, and all income earned with respect to such portion, relating
to such rejected lease.
b. ASSUMED LIABILITIES. Buyer shall, effective as of the Closing Date, assume
and perform all liabilities arising from the ownership of the Assets,
including under the Real Property Leases and under the Other Leases and
Contracts, on and after the Closing Date or otherwise required to be
performed with respect to the Assets on or after the Closing Date and
Seller's obligations with respect to compliance after the Closing Date with
applicable federal and state laws regulating the
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use, monitoring and operation of underground storage tanks and related
systems at the Acquired Stores, and the remediation of releases therefrom
(regardless of when such releases occur); provided that, (i) Seller shall
pay all cure amounts owing under the Real Property Leases and Other Leases
and (ii) Buyer shall pay all cure amounts owing under any of the Other
Contracts (herein, "Buyer Cure Costs"). In both such cases the cure
amounts shall be those amounts that the Bankruptcy Court orders to be paid
as a condition to the Seller's assumption and assignment of any Real
Property Leases and/or Other Leases and Contracts to Buyer. The
liabilities to be assumed by Buyer pursuant to this paragraph b are herein
called the "Assumed Liabilities". Other than the Assumed Liabilities
expressly assumed by Buyer hereunder, Buyer is not assuming and shall not
be liable for any liabilities or obligations of Seller. Seller agrees to
provide to state agencies or environmental trust funds evidence of this
assumption of liability sufficient to support the acquisition by Seller of
the Environmental Receivables Consents (as defined in section 11.b.i.3
hereof).
c. ALLOCATION OF THE PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets in proportion to their fair market values and not in
excess thereof as provided in a schedule (the "Allocation") mutually
agreed upon by Buyer and the Seller as soon as practicable after the
Closing Date, but in no event later than thirty (30) days following the
Closing, with the parties agreeing to negotiate in good faith with respect
to such schedule. The Allocation Schedule shall be for purposes of
complying with the requirements of Section 1060 of the Internal Revenue
Code of 1986, as amended, and regulations thereunder, and for no other
purpose. The Buyer and Seller each agree to prepare and file on a timely
basis with the Internal Revenue Service (and applicable state tax
authorities) substantially identical initial and supplemental Internal
Revenue Service Forms 8594 "Asset Acquisition Statements Under Section
1060" consistent with the Allocation Schedule (and corresponding state tax
forms). If any tax authority challenges such allocation, the party
receiving notice of such challenge shall give the other party prompt
written notice thereof, and the parties shall cooperate in order to
preserve the effectiveness of such allocation.
3. NON-ACQUIRED STORES
a. MANAGEMENT AGREEMENT. At the Closing, Debtor and Buyer will execute a
management agreement in substantially the form of EXHIBIT K (the
"Management Agreement") under which Buyer, as an independent contractor,
will commence as of the Closing managing each of the Non-Acquired Stores
for the Debtor until the earlier of (i) the closing of the sale or other
disposition of the Non-Acquired Store, (ii) closing of the Non-Acquired
Store following Buyer's good faith determination that further operation of
such Non-Acquired Store is unlikely to result in any significant positive
recovery by Debtor upon sale or other disposition, (iii) one year after
the Closing or (iv) the sooner of the confirmation of Debtor's plan of
reorganization or liquidation by the Bankruptcy Court. During the term of
the Management Agreement, Buyer will receive all revenues generated from
operation of the Non-Acquired Stores and will pay all costs, expenses and
liabilities payable after the Closing and during the term of the
Management Agreement and arising during Buyer's operation of the
Non-Acquired Stores, including all amounts payable during such term under
applicable law, under the Non-Acquired Stores Real Property Leases and
Non-Acquired Stores Other Leases and Contracts arising in connection with
the operation of the Non-Acquired Stores.
b. DISPOSITION OF NON-ACQUIRED STORES. During the term of the Management
Agreement, Buyer shall use its best efforts to arrange for the disposition
of each of the Non-Acquired Stores (other
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than those that Buyer determines should be closed pursuant to Section
3.a.ii above) by sale, lease or other transaction so as to maximize the
cash recovery for Debtor. At the closing of each such disposition of one
or more Non-Acquired Stores the net disposition proceeds shall be divided
between Debtor and Buyer as provided for in the Management Agreement. If
Buyer or any of its affiliates is the purchaser of any Non-Acquired Store,
Buyer shall pay Debtor a purchase price for such Non-Acquired Store
determined as follows:
i. Buyer may acquire up to thirty (30) Non-Acquired Stores by paying
Seller 40% of the Inventory Cost (which is determined as of the
Closing), plus, for each Non-Acquired Store at which equipment is
subject to a Non-Acquired Store Other Lease and such equipment is
delivered to Buyer free and clear of all Encumbrances, the lesser of
(x) the book value of the equipment lease obligations corresponding
to such equipment at such Non-Acquired Stores (as set forth on
EXHIBIT A-7) or (y) the amount paid by Seller to its equipment
lessors (as described in Section 2.a.ii.C) with respect to such
equipment associated with such Non-Acquired Stores plus 20% of any
unsecured claim amounts, if any, of such lessor resulting from such
arrangements or settlements relating to such equipment associated
with such Non-Acquired Store (for each Non-Acquired Store, the
"Equipment Lease Adjustment");
ii. Buyer may acquire up to an additional ten (10) Non-Acquired Stores
by paying Seller $125,000 for each such Non-Acquired Store plus the
sum of 40% of the Inventory Cost (which is determined as of the
Closing) plus (if applicable) the Equipment Lease Adjustment at each
such Non-Acquired Store; and
iii. Buyer may acquire any additional Non-Acquired Store by paying Seller
for each such Non-Acquired Store the sum of (A) the greater of (1)
fifty percent (50%) of Net Disposition Proceeds (as defined in the
Management Agreement) that would be payable to Seller pursuant to
the highest bona fide offer for the disposition of such store
received from a third party unaffiliated with Seller or Buyer prior
to Buyer's acquisition of such store, if any, or (2) $20,000 plus
(B) 40% of the Inventory Cost (which is determined as of the
Closing) plus (C) (if applicable) the Equipment Lease Adjustment at
each such Non-Acquired Store;
PROVIDED, THAT, solely for purposes of determining the number of
Non-Acquired Stores purchased pursuant to this Section 3.b, any
Redesignated Stores shall be considered to be Non-Acquired Stores that
were acquired pursuant to this Section 3.b.
c. USE OF NAME. Notwithstanding anything herein to the contrary, subsequent
to the Closing Date Seller shall be authorized to continue to use the
"Dairy Mart" name and associated trademarks, designs and logos in
conjunction with (A) the operation of each Non-Acquired Store until the
earlier of the sale or closure of such store and one (1) year after the
Closing Date and (B) the continued operation of the balance of Seller's
Business for up to one (1) year after the Closing Date, as is necessary.
4. CLOSING TRANSACTIONS.
a. CLOSING. The Closing of the transactions provided for herein (the
"Closing") shall take place at the offices of Milbank, Tweed, Xxxxxx &
XxXxxx LLP ("Milbank") at Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
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b. CLOSING DATE. The Closing shall be held within five (5) days after
satisfaction or waiver of the conditions to closing set forth herein (the
"Closing Date") but in no event later than three (3) months after the
filing of the Sale Procedure and Sale Motion (as defined in Section 18)
(the "Outside Date"); PROVIDED, HOWEVER, that the Outside Date shall
automatically be extended for one (1) thirty (30) day period if the only
condition remaining to be satisfied is the entry of the Approval Order, as
specified herein. In the event the conditions to Closing (other than the
conditions regarding the entry of the Approval Order) have not been
satisfied or waived by the Outside Date, then any party who is not in
default hereunder may terminate this Agreement. Alternatively, the parties
may mutually agree to an extended Closing Date. Until this Agreement is
either terminated or the parties have agreed upon an extended Closing
Date, the parties shall diligently continue to work to satisfy all
conditions to Closing.
5. SELLER'S DELIVERIES TO BUYER AT CLOSING. On the Closing Date, Seller shall
make or cause to be made the following deliveries to Buyer:
a. One or more Assignment and Assumption Agreements substantially in the form
and content attached as EXHIBIT G to this Agreement, duly executed by
Seller, pursuant to which Seller assigns the Real Property Leases and the
Other Leases and Contracts (the "Assignment Agreement(s)"); PROVIDED,
HOWEVER, that the Assignment Agreement(s) need not be delivered by Seller
if the Bankruptcy Court has issued an order reasonably acceptable to Buyer
prior to the Closing Date authorizing the assumption and assignment to
Buyer of the Real Property Leases and the Other Leases and Contracts.
b. One or more xxxx(s) of sale and/or deeds, duly executed by Seller, in the
form and on the terms of the xxxx of sale and deed set forth on EXHIBIT H
to this Agreement, pursuant to which Seller transfers the Assets other
than the Real Property Leases and the Other Leases and Contracts to Buyer
(the "Xxxx(s) of Sale").
c. The Management Agreement duly executed by Seller.
d. The Sublease duly executed by Seller.
e. Such other documents and/or instruments as Buyer may reasonably request.
6. BUYER'S DELIVERIES TO SELLER AT CLOSING. On the Closing Date, Buyer shall
make or cause to be made the following deliveries to Seller:
a. That portion of the Purchase Price to be delivered by Buyer directly to
Seller at the Closing as required hereunder (and Buyer shall instruct
Escrow Holder to deliver the Deposit and accrued interest to Seller).
b. The Assignment Agreement(s), duly executed by Buyer.
c. The Management Agreement duly executed by Buyer.
d. The Sublease duly executed by Buyer.
e. Such other documents and/or instruments as Seller may reasonably request.
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7. PRORATIONS. Rent, current taxes, prepaid advertising and other items of
expense (including, without limitation, any prepaid insurance under the Real
Property Leases, Owned Real Property or Other Leases and Contracts, or any
of them) shall be prorated between Seller and Buyer as of the Closing Date
for each of the Real Property Leases, Owned Real Property and Other Leases
and Contracts included in the Assets. All obligations due in respect of
periods prior to Closing shall be paid in full or otherwise satisfied by
Seller and all obligations due in respect of periods after Closing shall be
paid in full or otherwise satisfied by Buyer. Rent shall be prorated on the
basis of a thirty (30) day month.
8. SALES, USE AND OTHER TAXES. Buyer and Seller shall cooperate to obtain an
order of the Bankruptcy Court exempting the sale of the Assets under this
Agreement from sales, use, transfer, stamp, duty and value added taxes, and
other similar taxes and fees which may be payable by reason of the sale of
the Assets under this Agreement or the transactions contemplated herein
(collectively, "Transfer Taxes"). To the extent that Buyer and Seller do not
obtain an exemption order of the Bankruptcy Court and to the extent any such
Transfer Taxes arise out of the transfer of the Assets and any Transfer
Taxes are required to effect any recording or filing with respect thereto,
such Transfer Taxes shall be borne and timely paid fifty percent (50%) by
Buyer and fifty percent by Seller (50%).
9. POSSESSION. The right to possession of the Assets shall transfer to Buyer on
the Closing Date. Seller shall transfer and deliver to Buyer on the Closing
Date such keys, lock and safe combinations and other similar items as Buyer
shall require to obtain immediate and full occupation and control of the
Assets, and shall also make available to Buyer at their then existing
locations the originals of all documents in Seller's possession that relate
to Assets that are to be transferred to Buyer pursuant to this Agreement.
10. SELLER'S EMPLOYEES. The Buyer shall extend offers of employment to (i) all
store-level employees at the Acquired Stores and at the Non-Acquired Stores
as may be necessary to fulfil its obligations under the Management Agreement
and (ii) those other employees of Seller which Buyer identifies within
thirty (30) days after the date hereof, in each case, at or prior to the
Closing Date. The Buyer presently intends to extend offers of employment to
substantially all other employees of Seller, but shall have no obligation to
employ such other employees of Seller in connection with or after the
transactions contemplated hereby. Seller shall be solely responsible for the
payment of all salaries and wages, severance pay, vacation pay and other
benefits accrued and due to its employees through the Closing Date or the
date of their termination by Seller, as applicable. After the Closing Date,
Buyer may negotiate with and hire any other employees of Seller who are no
longer employed by the Seller or the acquiring party of the Seller's assets
(if not the Buyer), PROVIDED, THAT, if Buyer hires, retains or employs any
employee of Seller (other than those currently designated by Seller as Vice
Presidents or any higher category) within six (6) months of such employee's
termination by Seller, Buyer will reimburse Seller for 20% of any costs
incurred by Seller as severance, under the Worker Adjustment Retraining and
Notification Act or any similar state law, or otherwise as the result of
such termination. Except for Buyer's reimbursement obligations as set forth
in the previous sentence, Buyer shall not assume any liabilities of Seller
under, or be deemed a successor company to Seller in connection with, any
employment agreement, employee benefit plan, collective bargaining agreement
or other employment related arrangement to which the present or former
employees of Seller are or were entitled (including any severance
arrangements), and Buyer shall not assume, and shall have no liability
whatsoever for, any wages, salaries, bonuses, deferred compensation, pension
obligations, retirement benefits, health and welfare fund contributions,
vacation pay, sick leave, severance pay or any other compensation or
employee benefits to which the present or former employees of Seller are or
were entitled.
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11. CONDITIONS PRECEDENT TO CLOSING.
a. CONDITIONS TO SELLER'S OBLIGATIONS. Seller's obligation to make the
deliveries required of Seller at the Closing shall be subject to the
satisfaction or waiver by Seller of each of the following conditions.
i. (A) All of the representations and warranties of Buyer contained
herein shall be true and correct in all material respects, on and
as of the Closing Date, (B) Buyer shall have performed and complied
with, in all material respects, the agreements, covenants and
obligations required by this Agreement to be performed or complied
with by Buyer at or before the Closing and (C) Buyer shall have
certified the foregoing to Seller in writing.
ii. Buyer shall have executed and delivered to Seller the Assignment
Agreement(s) and each other document reasonably requested by
Seller.
iii. Seller shall have received the total Purchase Price in Good Funds,
as required by Section 2 of this Agreement.
iv. Buyer shall have delivered to Seller appropriate evidence of all
necessary corporate action by Buyer in connection with the
transactions contemplated hereby, including, without limitation:
(i) certified copies of resolutions duly adopted by Buyer's board
of directors approving the transactions contemplated by this
Agreement and authorizing the execution, delivery, and performance
by Buyer of this Agreement; and (ii) a certificate as to the
incumbency of officers of Buyer executing this Agreement and any
instrument or other document delivered in connection with the
transactions contemplated by this Agreement.
v. All applicable waiting periods relating to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have been filed or
instituted thereunder shall have been satisfactorily concluded.
vi. No order shall have been entered before any court, tribunal or
governmental authority restraining or prohibiting the consummation
of the transactions contemplated by this Agreement.
vii. The Bankruptcy Court shall have entered the Procedure Order and the
Approval Order (as contemplated below) and the Approval Order shall
not have been stayed as of the Closing Date.
b. CONDITIONS TO BUYER'S OBLIGATIONS. Buyer's obligation to make the
deliveries required of Buyer at the Closing shall be subject to the
satisfaction or waiver by Buyer of each of the following conditions:
i. (A) All of the representations and warranties of Seller contained
herein shall be true and correct in all material respects, on and
as of the Closing Date, PROVIDED, HOWEVER, that it shall not
constitute a condition to Closing that Seller obtain any of the
following:
1. the requisite governmental approvals or consents to the
transfer of the Financial Opportunities Shares to Buyer (the
"Financial Opportunities Consent"),
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2. the requisite governmental approvals or consents to the
transfer any of Seller's license(s) relating to any state
lottery program (the "Lottery Licenses" and such consent(s),
the "Lottery Consents") to Buyer, and
3. the requisite governmental approvals or consents to the
transfer of any or all of the Environmental Receivables to
Buyer (the "Environmental Receivables Consents").
B. Seller shall have performed and complied with, in all material
respects, the agreements, covenants and obligations required by
this Agreement to be performed or complied with by Seller at or
before the Closing, and
C. Seller shall have certified the foregoing to Buyer in writing.
ii. Seller shall have executed and delivered to Buyer a certificate
stating that the Acquired Stores FYE-02 Four-Wall Cash Flow or, if
applicable, the Restated Acquired Stores FYE-02 Four-Wall Cash Flow
was determined in a manner consistent with past practice.
iii. Seller shall have executed and delivered to Buyer the Assignment
Agreement(s), the Xxxx(s) of Sale and each other document
reasonably requested by Buyer.
iv. All applicable waiting periods relating to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 shall have expired or been
terminated and any proceedings that may have been filed or
instituted thereunder shall have been satisfactorily concluded.
v. No order shall have been entered before any court, tribunal or
governmental authority restraining or prohibiting the consummation
of the transactions contemplated by this Agreement.
vi. The Bankruptcy Court shall have entered the Procedure Order and the
Approval Order (as contemplated below) and the Approval Order shall
not have been stayed as of the Closing Date.
vii. No Material Adverse Change in the Assets of the Seller to be
conveyed hereunder. For purposes hereof, "Material Adverse Change"
shall be defined as the failure to assign at least 90% of the Real
Property Leases (measured by both the number of leases and by the
related FYE-02 Four-Wall Cash Flow), as set forth more fully in
Section 18.b of this Agreement, to Buyer at the Closing.
c. TERMINATION. If any of the above conditions is neither satisfied nor
waived on or before the date by which the condition is required to be
satisfied, the party who is not then in default hereunder may terminate
this Agreement by delivering to the other written notice of termination.
Any waiver of a condition shall be effective only if such waiver is
stated in writing and signed by the waiving party; PROVIDED, HOWEVER,
that the consent of a party to the Closing shall constitute a waiver by
such party of any conditions to Closing not satisfied as of the Closing
Date.
12. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller hereby makes the following
representations and warranties to Buyer:
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a. VALIDITY OF AGREEMENT. Upon obtaining the Approval Order, this Agreement
shall constitute a valid and binding obligation of Seller enforceable
against Seller in accordance with its terms.
b. ORGANIZATION, STANDING AND POWER. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Subject to the applicable provisions of bankruptcy law, Seller
has all requisite corporate power and authority to own, lease and operate
its properties, to carry on its business as now being conducted and,
subject to the Seller's obtaining the Approval Order, to execute, deliver
and perform this Agreement.
c. NO CONFLICTS OR VIOLATIONS. Upon obtaining the Approval Order, the
Financial Opportunities Consent and the Environmental Receivables
Consents, the execution and delivery of this Agreement, the consummation
of the transactions herein contemplated, and the performance of,
fulfillment of and compliance with the terms and conditions hereof by
Seller do not and will not: (i) conflict with or result in a breach of
the articles of incorporation or the by-laws of Seller; (ii) violate any
statute, law, rule or regulation, or any order, writ, injunction or
decree of any court or governmental authority; or (iii) violate or
conflict with or constitute a default under any agreement, instrument or
writing of any nature to which Seller is a party or by which Seller or
its assets or properties may be bound; PROVIDED, HOWEVER, that provisions
of laws, rules, regulations or governmental approvals prohibiting the
transfer or assignment of Licenses (as defined in Paragraph 19 below)
without the consent of a governmental authority or the assumption of
obligations by the transferee shall not be deemed to breach this
representation and warranty.
d. TITLE TO ASSETS. Seller has good and marketable title to the Assets
including, without limitation, the Intangible Property. At the Closing,
Buyer will acquire all of Seller's right, title and interest in and to
all the Assets, free and clear of any liens, claims or encumbrances (the
"Encumbrances") other than (i) any Encumbrance for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP
and remitted to Buyer (which Buyer agrees to remit back to Seller to the
extent that they are not paid as a result of such contest), (ii) any
statutory Encumbrance arising in the ordinary course of business by
operation of law with respect to a liability that is not yet due or
delinquent, (iii) any easements, rights of way or other restrictions or
exceptions to title which do not affect the fair market value or the use
and operation of the relevant property, (iv) any minor imperfection of
title or similar Encumbrance which individually or in the aggregate with
other such Encumbrances could not reasonably be expected to materially
adversely affect the condition of the related Assets or (v) any
liabilities assumed pursuant to Section 2.b, as specifically set forth in
the Approval Order (collectively, "Permitted Encumbrances").
Notwithstanding the foregoing, Seller understands and agrees that this
representation is limited, with respect to the Environmental Receivables,
to such right, title and interest as the Buyer may have in the
Environmental Receivables, and does not constitute a representation that
the Environmental Receivables are property to which either Buyer or
Seller may obtain "title" in the sense normally applied to property.
Seller does, however, represent and warrant that the Environmental
Receivables will be delivered to Buyer free and clear of any Encumbrances
of Handex Environmental, Inc. or any other person.
e. STATUS OF OWNED REAL PROPERTY. Except as would not have a material
adverse effect on the operation of the Assets, each of the Acquired
Stores at which Seller owns the real property related thereto (i)
complies in all material respects with all health, building, fire, safety
and other applicable codes, ordinances and requirements, (ii) is in
compliance in all material respects with all applicable zoning
requirements and the use of such property for the operation of Seller's
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Business is a permitted or legally established use under applicable
zoning requirements, (iii) is assessed separately from all other adjacent
land for the purposes of real estate taxes (and Seller has obtained a
separate tax lot with a separate tax assessment for each of such
properties) and is not part of a larger tract of land owned by Seller or
any other person and is not otherwise included under any unity of title
or similar covenant with other lands, (iv) to the knowledge of Seller, is
not subject to any condemnation or eminent domain proceeding, (v) has
available to such property a water supply and a sanitary sewer service
and electric, gas (if applicable) and telephone service, all of
sufficient capacity to serve the needs of such property and (vi) has
completed and available to such property, without condition or cost, all
streets and roads necessary for access to and use and occupancy of such
property for its intended purpose.
f. LITIGATION. There is no action, suit, investigation or proceeding pending
against, or to the Seller's knowledge, threatened against Seller before
any governmental entity which challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this
Agreement.
13. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby makes the following
representations and warranties to Seller:
a. VALIDITY OF AGREEMENT. All action on the part of Buyer necessary for the
authorization, execution, delivery and performance of this Agreement by
Buyer, including, but not limited to, the performance of Buyer's
obligations hereunder, has been duly taken. This Agreement, when executed
and delivered by Buyer, shall constitute a valid and binding obligation
of Buyer enforceable against Buyer in accordance with its terms.
b. ORGANIZATION, STANDING AND POWER. Buyer is a limited liability company
duly formed, validly existing and in good standing under the laws of the
State of Delaware. Buyer has all requisite limited liability company
power and authority to perform its obligations under this Agreement.
c. NO CONFLICTS OR VIOLATIONS. The execution and delivery of this Agreement,
the consummation of the transactions herein contemplated, and the
performance of, fulfillment of and compliance with the terms and
conditions hereof by Buyer do not and will not: (i) conflict with or
result in a breach of the certificate of organization or limited
liability company agreement of Buyer; (ii) violate any statute, law, rule
or regulation, or any order, writ, injunction or decree of any court or
governmental authority; or (iii) violate or conflict with or constitute a
default under any agreement, instrument or writing of any nature to which
Buyer is a party or by which Buyer or its assets or properties may be
bound.
d. FINANCING. Buyer agrees that its obligations under this Agreement are not
subject to the satisfaction of any financing or due diligence
contingencies and Buyer represents that it has sufficient capital and
commitments available to consummate the transactions contemplated hereby.
e. LITIGATION. There is no action, suit, investigation or proceeding pending
against, or to the knowledge of the Buyer, threatened against it before
any governmental entity which challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this
Agreement.
14. COOPERATION. Each of Buyer and Seller shall use its reasonable best efforts
to cause the transactions contemplated by this Agreement to be consummated,
including, without limitation, obtaining, making
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and causing to become effective all approvals of such governmental
authorities and other entities as may be necessary or reasonably requested
by the Seller in order to consummate the transactions contemplated by this
Agreement.
15. RETURN OF FUNDS HELD BY SELLER AS A FIDUCIARY. Seller shall remit to the
proper party at or prior to Closing any deposits collected or other funds
received for which Seller has a fiduciary or other legal obligation to a
third party.
16. "AS IS" TRANSACTION. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, THE SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER
RELATING TO THE ASSETS INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED
OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE ASSETS, THE PHYSICAL
CONDITION OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE ASSETS OR WHICH
IS THE SUBJECT OF ANY OTHER LEASE OR CONTRACT TO BE ASSUMED BY BUYER AT THE
CLOSING, THE ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE
PHYSICAL CONDITION OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE TO BE
TRANSFERRED TO BUYER AT CLOSING OR ARE THE SUBJECT OF ANY REAL PROPERTY
LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH REAL
PROPERTY OR IMPROVEMENTS, THE VALUE OF THE ASSETS (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF ASSETS, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED LIABILITIES, THE TITLE OF THE ASSETS (OR ANY PORTION
THEREOF), THE COLLECTIBILITY OF THE RECEIVABLES, THE MERCHANTABILITY OR
FITNESS OF THE PERSONAL PROPERTY OR ANY OTHER PORTION OF THE ASSETS FOR ANY
PARTICULAR PURPOSE, OR ANY OTHER MATTER OR THING RELATING TO THE ASSETS OR
ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER
HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE ASSETS. BUYER
FURTHER ACKNOWLEDGES THAT BUYER HAS CONDUCTED AN INDEPENDENT INSPECTION AND
INVESTIGATION OF THE PHYSICAL CONDITION OF THE ASSETS AND ALL SUCH OTHER
MATTERS RELATING TO OR AFFECTING THE ASSETS AS BUYER DEEMED NECESSARY OR
APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE ASSETS,
EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN,
BUYER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND
INVESTIGATIONS AND ACCORDINGLY, BUYER WILL ACCEPT THE ASSETS AT THE CLOSING
"AS IS," "WHERE IS," AND "WITH ALL FAULTS."
17. CONDUCT AND TRANSACTION PRIOR TO CLOSING.
a. ACCESS TO RECORDS AND PROPERTIES OF SELLER. From and after the date of
this Agreement until the Closing Date, Seller shall afford to Buyer and
Buyer's officers, accountants, counsel, lenders, consultants and other
representatives, reasonable access during normal business hours to the
Assets and all records pertaining to the Assets or the Acquired Stores.
Debtor acknowledges that Buyer intends to conduct "phase two"
environmental testing with respect to the Debtor's stores that are
located in the state of Michigan and are listed in EXHIBIT A-8 hereto and
identified as "DM Locations" in such EXHIBIT A-8. In addition, Buyer
intends to conduct "phase two" environmental testing at locations in
Michigan at which Restructure Marketing Petroleum
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Services, Inc. ("RPMS") owns the relevant underground storage tanks
systems and related equipment, and which are identified as "RPMS
Locations" in EXHIBIT A-8 hereto. No such "phase two testing" shall be
performed at any RPMS Location unless RPMS consents to such "phase two
testing". In connection with any such "phase two testing", Debtor will
authorize sampling and analysis of soil, surface water, ground water and
other media reasonably proposed by Buyer, pursuant to protocols, and at
times and locations, reasonably acceptable to Debtor. The results of such
testing shall be provided to Debtor and Debtor shall have the sole
responsibility for reporting or disclosing such results to environmental
regulatory agencies, if required by law. In connection with any such
"phase two testing", Debtor will authorize such testing and cooperate
with Buyer so that such testing may be conducted in a manner that will
allow Buyer to promptly complete such testing and minimize any disruption
of Debtor's operation of such stores. Buyer shall be entitled to access
to employee personnel files including payroll and benefit enrollment
information, other than with regard to any employees Buyer does not
intend to hire. Buyer expressly acknowledges that nothing in this Section
is intended to give rise to any contingency to Buyer's obligations to
proceed with the transactions contemplated herein.
b. ACCESS TO PARTIES TO CONTRACTS OF SELLER WITH VENDORS AND LESSORS. From
and after the date of this Agreement until the Closing Date, Buyer and
Buyer's officers, accountants, counsel, lenders, consultants and other
representatives shall have the right, upon 2 days' notice to Seller to
meet with the parties to the Contracts of Seller with vendors and with
Seller's real and personal property lessors (including without limitation
the real property landlords and lessors under capitalized leases with
regard to the Acquired Stores and with respect to the Non-Acquired Stores
for purposes of attempting to negotiate rent concessions), PROVIDED,
HOWEVER, that Seller shall have the right to be present at any and all
discussions and meetings between Buyer and any vendor or lessor or any
representative of such vendor or lessor and Seller shall be provided with
copies of any and all correspondence between Buyer and any vendor or
lessor or any representative of such vendor or lessor. Buyer expressly
acknowledges that nothing in this Section is intended to give rise to any
contingency to Buyer's obligations to proceed with the transactions
contemplated herein.
c. OPERATION OF SELLER'S BUSINESS PENDING CLOSING. Unless Buyer otherwise
consents in writing, during the period prior to the Closing Date, Seller
shall use commercially reasonable efforts to operate the Acquired Stores
as currently operated and only in the ordinary course and, consistent
with such operation, shall use commercially reasonable efforts to
preserve intact the Acquired Stores and its relationships with its
customers and suppliers and with employees and persons working at the
Acquired Stores. The foregoing shall not prohibit the Seller from
transferring any good and saleable inventory to the Acquired Stores from
any of Seller's other stores. Seller shall not amend or terminate any
Real Property Lease or any Other Lease and Contract without Buyer's prior
written consent.
x. XXXX-XXXXX-XXXXXX COOPERATION. Buyer and Seller shall cooperate with each
other (at their respective sole cost and expense) to comply with, and
provide the information required by, the pre-merger notification and
waiting period rules of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 (codified in Section 18(a) of Title 15, U.S. Code), in any
Federal Trade Commission regulations, and in any provisions or
regulations of or relating to the Xxxxxxx Act. In that connection, Buyer
and Seller shall use diligent efforts to make their joint pre-merger
notification filing with the Federal Trade Commission no later than five
(5) business days following the date hereof.
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18. BANKRUPTCY COURT APPROVAL OF SALE PROCEDURES. Promptly following the date
hereof (and in no event later than 3 business days hereafter), the Seller
shall file a motion (the "Sale Procedure and Sale Motion"), and shall
provide Buyer with the opportunity to review such motion before filing, with
the Bankruptcy Court requesting, on expedited notice:
a. the entry of an order (the "Procedure Order") which, among other things,
will (1) fix the time, date, and location of a hearing (the "Approval
Hearing") to approve Seller's consummation of this Agreement, (2) fix the
time and date of submission of alternative bids (the "Bid Deadline"),
which shall be no later than the first business day that is 40 days from
and after the entry of the Procedure Order and an auction (the "Auction")
to be held at the offices of Milbank in New York at which higher or
better offers may be presented to the Seller (which date shall be no
later than the first business day that is at least 45 days from and after
the entry of the Procedure Order), (3) provide that if the Closing with
Buyer does not occur as a result of (A) Seller's breach of this Agreement
or (B) Seller's receipt of a third party offer at the Auction (and such
third party offer is subsequently approved by the Bankruptcy Court and
closes), then Buyer will be entitled to receive from the Seller a flat
fee payment (not dependent on amounts actually expended or incurred by
Buyer) in cash or other immediately available good funds in an amount
equal to $2,400,000 (such amount being referred to as the "Break-up
Fee"), which payment shall be considered liquidated damages to Buyer and
shall be made (1) in the case of clause (A) above, to Buyer as an
administrative expense promptly upon Buyer's delivery of written notice
to Seller that Buyer has terminated this Agreement as a result of such
breach, or (2) in the case of clause (B) above, to Buyer concurrently
with the consummation of and solely from the proceeds of such third party
sale, PROVIDED THAT, in the event that a third party sale is not
consummated within 15 days following the Sale Hearing (as defined in the
Procedure Order), Seller and Buyer shall close the transactions
contemplated by this Agreement upon the terms and conditions set forth
herein, (4) provide that nothing contained herein shall prohibit the
Board of Directors of Seller (the "Board"), at any time prior to the Bid
Deadline, from providing notice to Buyer of its intent to effect a
stand-alone plan of reorganization or other transaction with its existing
creditors and equity holders, which the Board determines in good faith,
based upon the advice of outside counsel and its financial advisors, is
required for the Board to comply with its fiduciary obligations under
applicable law, in which case, Seller may terminate this Agreement by
immediately paying to Buyer an amount equal to $1,400,000 (such payment
being referred to as the "Termination Fee"), provided that Buyer shall be
paid the difference between the Termination Fee and the Break-up Fee if a
stand-alone plan is subsequently abandoned and an alternative transaction
with a third party involving a merger, sale of all of the stock or
substantially all of the assets of Seller is consummated during the
pendancy of the Case, which payment shall be made to the Buyer
concurrently with the consummation of and solely from the proceeds of
such third party transaction, (5) provide that as a condition to receive
a Break-up Fee or Termination Fee, if applicable, Buyer must first waive
any and all claims against Seller, (6) order that no prospective
purchaser will be permitted to bid at the Auction unless such party has
been deemed "financially qualified" by Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
Capital ("HLHZ"), Seller's investment banker, (7) order that no
prospective purchaser(s) which bid(s) for the Assets at Auction shall be
entitled to purchase the Assets unless such prospective purchaser submits
a deposit equal to or greater than eight million dollars ($8 million) and
offers to purchase the Assets for consideration (including all cash,
non-cash consideration and Assumed Liabilities) which, when coupled with
the consideration received by Seller in conjunction with the Assets that
may not be part of such purchaser's offer, is in an amount equal to not
less than the sum of (such sum being referred to as the "Initial Overbid
Amount"): (A) the Purchase Price (including Seller's good faith valuation
of those portions of the Purchase Price that will not be paid in cash at
the Closing), plus (B) the
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Break-up Fee, plus (C) five hundred thousand dollars ($500,0000) and (8)
order that after the Initial Overbid Amount, all further overbids must be
in increments of at least two hundred fifty thousand dollars ($250,000)
in excess of the Initial Overbid Amount or the then prevailing bid. After
the Initial Overbid Amount, the Seller must consider the amount of or
entitlement to payment of the Break-up Fee in determining the highest or
best offer for the Assets. Should overbidding take place, the Buyer shall
have the right, but not the obligation, to participate in the overbidding
and to be approved as the overbidder at the Approval Hearing based upon
any such overbid and may credit bid the Break-up Fee. Following the
filing of the Sale Procedure and Sale Motion, the Seller shall use
reasonable efforts to obtain the Procedure Order. The Procedure Order
shall be in form and substance similar to the proposed Procedure Order
attached hereto as EXHIBIT I; and
b. the entry of an order (the "Approval Order") which among other things (1)
approves the sale of the Assets to Buyer on the terms and conditions set
forth in this Agreement and authorizes the Seller to proceed with this
transaction, (2) includes a specific finding that Buyer is a good faith
purchaser of the Assets, (3) states that the sale of the Assets to Buyer
shall be free and clear of all liens, claims, interests and encumbrances
whatsoever (other than Permitted Encumbrances), (4) approves the Seller's
assumption and assignment of the Real Property Leases and Other Leases
and Contracts (collectively, the "Section 365 Contracts") pursuant to
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code and orders the payment
in accordance with this Agreement of any cure amounts payable to the
other parties to the Section 365 Contracts as a condition to such
assumption and assignment, (5) approves and authorizes Debtor to execute
the Management Agreement and Sublease and (6) approves the provisions of
Section 3.b, and at Seller's option Section 1.b.viii, and authorizes the
payment to Buyer of the compensation provided for therein. The Seller
shall send notice of the proposed assignment of the Section 365 Contracts
to the appropriate parties no less than twenty (20) days prior to the
Approval Hearing. If specifically requested by the Bankruptcy Court or
other appropriate party, the Buyer shall be responsible for demonstrating
adequate assurance of future performance and any and all costs and
expenses necessary in connection therewith regarding any of the Section
365 Contracts. It shall be an additional condition to the parties'
obligations hereunder that at least 90% of the Real Property Leases
(based on lease count, not lease payments, but amounting to at least 90%
of the FYE-02 Four-Wall Cash Flow for the Acquired Stores) be assignable
to the Buyer, and it shall not be a breach of this Agreement if Seller
assigns to Buyer at least this percentage of the Real Property Leases,
provided that either the Buyer or the Seller may elect to terminate this
Agreement if such percentage is not assignable. Notwithstanding the
foregoing, the Purchase Price with respect to the Acquired Stores shall
be adjusted downward in an amount equal to (x) 95% less the actual
percentage of Real Property Leases associated with Acquired Stores
assigned to Buyer (with such percentage calculated based upon the
percentage of FYE-02 Four Wall Cash Flow for all of the Acquired Stores
represented by the Real Property Leases actually assigned to Buyer) (to
the extent that such percentage is less than 95%), multiplied by (y) the
percentage of FYE-02 Four Wall Cash Flow associated with Real Property
Leases associated with Acquired Stores that were not assigned due to
reasons other than Buyer's failure to demonstrate adequate assurance of
future performance in relation to the total amount of FYE-02 Four Wall
Cash Flow for the Acquired Stores associated with Real Property Leases
that were not assigned, multiplied by (z) the Adjusted Purchase Price
with respect to the Acquired Stores. Notwithstanding the foregoing, Buyer
shall use its best efforts to demonstrate adequate assurance of future
performance for 100% of the Real Property Leases and Seller shall use its
best efforts to assign 100% of the Real Property Leases and Seller shall
not fail to assign any such Real Property Lease except if such assignment
is prohibited pursuant to applicable law. Following the filing of the
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Sale Procedure and Sale Motion, the Seller shall use reasonable efforts
to obtain entry of the Approval Order. The Approval Order shall be in
form and substance similar to the proposed Approval Order attached hereto
as EXHIBIT J.
19. LICENSES. Seller shall cooperate with Buyer in procuring the transfer to
Buyer of all lottery, tobacco, alcohol, petroleum and other licenses,
permits and governmental approvals necessary to operate the Assets as
operated on the date hereof (collectively, "Licenses"). If any of the
Licenses cannot be transferred to Buyer on or before the Closing Date, then
Seller shall, in accordance with the prevailing local laws and by an
appropriate order of the Bankruptcy Court, lease to Buyer the right to use
those as yet untransferred Licenses for One ($1) Dollar, until such time as
the Licenses are so transferred to Buyer. Buyer shall assume any obligations
under any such Licenses required in order to effect the transfer thereof and
shall make any other filings, certifications, registrations and applications
as shall be reasonably required therefor.
20. PRESS RELEASES AND ANNOUNCEMENTS. Neither party shall issue any press
release or announcement relating to the subject matter of this agreement
without the prior approval of the Buyer and the Seller; provided, however,
that (i) either party may make any public disclosure if such party is
advised by legal counsel that public disclosure is required by law or
regulation (in which case the disclosing party shall advise the other party
of such disclosure and provide it with a copy of the proposed disclosure
prior to making the disclosure) and (ii) nothing will prevent the Seller
from publicly filing this agreement and the related agreements with the
Bankruptcy Court or discussing them before the Bankruptcy Court or with
appointed committees or commissioners.
21. CONFIDENTIALITY. Without limiting the general applicability of the
Confidentiality Agreement by and between Buyer and Seller (the
"Confidentiality Agreement"), any information provided in connection with
this Agreement, the related agreements or the transactions contemplated
hereby or thereby relating to the Seller or the Assets will be treated as
"Evaluation Material" under the Confidentiality Agreement.
22. EXCLUSIVITY. From the date hereof until entry of the Procedure Order neither
Debtor or any of its directors, officers, employees or representatives will
enter into any agreement providing for, or solicit or encourage or negotiate
any proposal or any inquiries with respect to, any acquisition of a
substantial part of the assets of the Debtor.
23. MISCELLANEOUS.
a. ATTORNEYS' FEES. In the event that either party hereto brings an action
or other proceeding to enforce or interpret the terms and provisions of
this Agreement, the prevailing party in that action or proceeding shall
be entitled to have and recover from the non-prevailing party all such
fees, costs and expenses (including, without limitation, all court costs
and reasonable attorneys' fees) as the prevailing party may suffer or
incur in the pursuit or defense of such action or proceeding.
b. REASONABLE ACCESS TO RECORDS AND CERTAIN PERSONNEL. So long as the Case
is pending, (i) the Buyer shall permit Seller's counsel and other
professionals employed in the Case reasonable access to the financial and
other books and records relating to the Assets or the Acquired Stores
(whether in documentary or data form) for the purpose of the continuing
administration of the Case (including, without limitation, the pursuit of
any avoidance, preference or similar action), which access shall include
(A) the right of such professionals to copy, at the Seller's expense,
such documents and records as they may reasonably request in furtherance
of the purposes
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described above, and (B) Buyer's copying and delivering to Seller or its
professionals such documents or records as they may reasonably request,
but only to the extent Seller or its professionals furnishes Buyer with
reasonably detailed written descriptions of the materials to be so copied
and Seller reimburses the Buyer for the reasonable costs and expenses
thereof), and (ii) Buyer shall provide the Seller and such professionals
(at no cost to the Seller) with reasonable access during regular business
hours to those former employees of Seller whom Seller reasonably
determines are necessary to assist the Seller in the continuing
administration of the Case, provided that such access does not
unreasonably interfere with the Buyer's business operations.
c. NOTICES. Unless otherwise provided herein, any notice, tender, or
delivery to be given hereunder by either party to the other may be
effected by personal delivery in writing, or by registered or certified
mail, postage prepaid, return receipt requested, and shall be deemed
communicated as of the date of receipt (which shall be deemed to be the
time of verification of receipt in the case of email or facsimile
delivery). Notices shall be addressed as set forth below, but each party
may change his address by written notice in accordance with this
paragraph.
To Seller: Xx. Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Dairy Mart Convenience Stores, Inc.
000 Xxxxxxxxx Xxxxxxx Xxxx
Xxx Xxxxx Xxxx Xxx
Xxxxxx, Xxxx 00000
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
With copies to: Xxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxx, Esq.
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax (Xx. Xxxxx): (000) 000-0000
Fax (Xx. Xxxxxxx): (000) 000-0000
Email (Xx. Xxxxx): xxxxxx@xxxxxxx.xxx
Email (Xx. Xxxxxxx): xxxxxxxx@xxxxxxx.xxx
and Xx. Xxxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax: 000-000-0000
Email: xxxxxxxx@xxxx.xxx
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and Xxx Xxxxxxxxx, Esq.
Xxxxxxx X. Xxxx, Esq.
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Email (Xx. Xxxxxxxxx): xxxxxxxxxx@xxxxxxxx.xxx
Email (Xx. Xxxx): xxxxx@xxxxxxxx.xxx
To Buyer: Xx. Xxxxx Xxxxxxxx
President and Chief Executive Officer
Bigfoot Food Stores LLC
Alimentation Couche-Tard, Inc.
Xxxxx X, Xxxxx 000
Xxxxx, Xxxxxx X0X 457
Fax: (000) 000-0000
Email: xxxxxx.xxxxxxxx@xxxxxx-xxxx.xx.xx
and: Xxxxx Xxxxxxxx
Bigfoot Food Stores LLC
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Email: Xxxxx_Xxxxxxxx@xxxxxxxxxxxxx.xxx
With copies to: Xxxxxxx X. Xxxxxxxxx
Managing Director
Xxxxxxxxx & Company
00 Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxxxxxx.xxx,
and: Xxxxx X. Xxxx, Esq.
Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Email: xxxxxx@xxxxxx.xxx
and: J. Xxxxxxx Xxxxx, Esq.
Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxx.xxx
d. ENTIRE AGREEMENT. This instrument and the documents to be executed
pursuant hereto contain the entire agreement between the parties relating
to the sale of the Assets. Any oral representations
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or modifications concerning this Agreement or any such other document
shall be of no force and effect excepting a subsequent modification in
writing, signed by the party to be charged.
e. CLOSING DATE. All actions to be taken on the Closing pursuant to this
Agreement shall be deemed to have occurred simultaneously, and no act,
document or transaction shall be deemed to have been taken, delivered or
effected until all such actions, documents and transactions have been
taken, delivered or effected.
f. SEVERABILITY. Should any term, provision or paragraph of this Agreement
be determined to be illegal or void or of no force and effect, the
balance of the Agreement shall survive except that, if Buyer cannot
acquire and Seller cannot sell substantially all of the Assets, either
party may terminate this Agreement, and it shall be of no further force
and effect, unless both parties agree in writing to the contrary.
g. CAPTIONS. All captions and headings contained in this Agreement are for
convenience of reference only and shall not be construed to limit or
extend the terms or conditions of this Agreement.
h. FURTHER ASSURANCES. Each party hereto will execute, acknowledge and
deliver any further assurance, documents and instruments reasonably
requested by any other party hereto for the purpose of giving effect to
the transactions contemplated herein or the intentions of the parties
with respect thereto. If the Financial Opportunities Consent, the
Environmental Receivables Consents or the Lottery Consents have not been
obtained prior to the Closing, Seller shall use its best efforts to
obtain promptly the Financial Opportunities Consent, the Environmental
Receivables Consents or the Lottery Consents and, upon obtaining such
consents, shall transfer the Financial Opportunities Shares, the
Environmental Receivables or the Lottery Licenses and the Inventory
related thereto, as applicable, to Buyer; PROVIDED, HOWEVER, that a
failure to obtain the Financial Opportunities Consent, the Environmental
Receivables Consents or the Lottery Consents shall not be considered a
breach of this Agreement, nor shall any price adjustment occur as a
result of such failure.
i. AMENDMENT. The parties hereto may mutually amend any provision of this
Agreement at any time prior to the Closing; PROVIDED, HOWEVER, that any
amendment effected subsequent to the Approval Order shall be subject to
the restrictions contained in the Approval Order. No amendment of any
provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties hereto.
j. WAIVER. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the
waiver.
k. BROKERAGE OBLIGATIONS. Seller is represented by HLHZ as its exclusive
sale agent with respect to the transactions contemplated herein pursuant
that certain order entered by the Bankruptcy Court on November 9, 2001,
and HLHZ's commission, fees and expenses are to be paid as a cost of the
transaction at the Closing by the Seller in accordance with the terms and
provisions of such order. Buyer is represented by Xxxxxxxxx & Company as
its financial advisors with respect to the transactions contemplated
herein and commissions, fees and expenses are to be paid as a cost of the
transaction at the Closing by the Buyer in accordance with the terms and
provisions of
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Buyer's agreements with Xxxxxxxxx & Company. The Seller and the Buyer
each represent and warrant to the other that, except as set forth above,
such party has incurred no liability to any real estate broker or agent
with respect to the payment of any commission regarding the consummation
of the transaction contemplated hereby. Except for any claims of HLHZ, on
the one hand, or Xxxxxxxxx & Company, on the other hand (which are to be
handled and satisfied by Seller or Buyer, as applicable), it is agreed
that if any claims for commissions, fees or other compensation,
including, without limitation, brokerage fees, finder's fees, or
commissions are ever asserted against Buyer or the Seller in connection
with this transaction, all such claims shall be handled and paid by the
party whose actions form the basis of such claim and such party shall
indemnify, defend (with counsel reasonably satisfactory to the party
entitled to indemnification), protect, and save and hold the other
harmless from and against any and all such claims or demands asserted by
any person, firm or corporation in connection with the transaction
contemplated hereby.
l. PAYMENT OF FEES AND EXPENSES. Except as provided in the immediately
preceding Section of this Agreement, each party to this Agreement shall
be responsible for, and shall pay, all of its own fees and expenses,
including those of its counsel, incurred in the negotiation, preparation
and consummation of the Agreement and the transaction described herein.
m. SURVIVAL. Except for the covenants and agreements to be performed after
the Closing Date, none of the respective representations, warranties,
covenants and agreements of Seller and Buyer herein, or in any
certificates or other documents delivered prior to or at the Closing,
shall survive the Closing.
n. ASSIGNMENTS. This Agreement shall not be assigned by either party hereto
without the prior written consent of the other party hereto; PROVIDED
THAT, until thirty (30) days after the date hereof Buyer may assign its
rights under this Agreement to any subsidiary or affiliate; PROVIDED
FURTHER that Buyer shall remain liable for the full compliance by such
subsidiary or affiliate of Buyer's obligations hereunder.
o. BINDING EFFECT. Subject to the provisions of the immediately preceding
Section above, this Agreement shall bind and inure to the benefit of the
respective heirs, personal representatives, successors, and assigns of
the parties hereto.
p. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
q. GOOD FAITH. All parties hereto agree to do all acts and execute all
documents required to carry out the terms of this Agreement and to act in
good faith with respect to the terms and conditions contained herein
before and after Closing.
r. CONSTRUCTION. In the interpretation and construction of this Agreement,
the parties acknowledge that the terms hereof reflect extensive
negotiations between the parties and that this Agreement shall not be
deemed, for the purpose of construction and interpretation, drafted by
either party hereto.
s. COUNTERPARTS. This Agreement may be signed in counterparts. The parties
further agree that this Agreement may be executed by the exchange of
facsimile signature pages.
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t. TIME IS OF THE ESSENCE. Time is of the essence in this Agreement, and all
of the terms, covenants and conditions hereof.
u. BANKRUPTCY COURT JURISDICTION. BUYER AND SELLER AGREE THAT THE BANKRUPTCY
COURT SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL DISPUTES AND OTHER
MATTERS RELATING TO (i) THE INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT OR ANY ANCILLARY DOCUMENT EXECUTED PURSUANT HERETO; AND/OR (ii)
THE ASSETS AND/OR ASSUMED LIABILITIES, AND BUYER EXPRESSLY CONSENTS TO
AND AGREES NOT TO CONTEST SUCH EXCLUSIVE JURISDICTION, AND ACCORDINGLY
WAIVES ITS RIGHTS TO A JURY TRIAL.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Asset Purchase Agreement as of the day and year first above written.
BUYER:
BIGFOOT FOOD STORES LLC
By ____________________________
Xxxxx Xxxxxxxx
President and Chief Executive Officer
SELLER:
DAIRY MART CONVENIENCE STORES, INC., along with
its subsidiaries and affiliates,
collectively as debtors-in-possession
By ____________________________
Xxxxxxx X. Xxxxxx
Its President and Chief Executive Officer
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