EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of August 9, 2001 ("Agreement"), is
by and among Harry's Farmers Market, Inc., a Georgia corporation ("Parent"),
Karalea, Inc., a Georgia corporation ("Karalea"), Marthasville Trading Company,
a Georgia corporation ("Marthasville, and together with Parent and Karalea, the
"Seller"), and Whole Foods Market Group, Inc., a Delaware corporation
("Purchaser").
WHEREAS, Seller is engaged in the ownership and operation of three mega-
format "Harry's Farmers Market" supermarkets and related real estate assets
(including certain real estate operated as a shopping center and leased by
Seller to third parties), a distribution center, a commissary and other support
facilities (collectively the "Stores") and six small format "Harry's In A Hurry"
food stores (the "Excluded Stores"); and
WHEREAS, Purchaser desires to purchase certain assets and assume certain
liabilities of Seller, and Seller desires that Purchaser engage in such
transactions; and
WHEREAS, concurrently with the execution and delivery of this Agreement,
the majority stockholder of Seller has entered into a Voting Agreement,
substantially in the form of Exhibit A hereto, indicating the intent of such
person to support the transactions contemplated hereby;
In consideration of the mutual covenants and agreements herein contained,
the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
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1.1. Purchase and Sale. At the Closing (as hereinafter defined) and
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subject to the terms and conditions of this Agreement, Purchaser shall purchase
from Seller, and Seller shall sell to Purchaser, all of Seller's right, title
and interest in and to the following assets (the "Purchased Assets"):
(a) Seller's fee interest in the real property identified on
Schedule 1.1(a) as "Owned Real Estate," together with all buildings and
improvements located thereon (the "Owned Improvements") and together with
all fixtures, plants, vehicles, equipment, machinery, spare parts, tools,
instruments, furniture and other items of personal property owned by
Seller, used in the operation of Seller's business and located thereon or
attached thereto (collectively, the "Personal Property - Owned Real
Estate"), and, to the extent assignable, Seller's leasehold interests in
the real property identified on Schedule 1.1(a) as "Leased Real Estate,"
together with all vehicles, equipment, computer hardware and software,
machinery, spare parts, tools, instruments, furniture, fixtures and other
tangible personal property owned by Seller, used in the operation of
Seller's business and located thereon or attached thereto (collectively,
the "Personal Property -Leased Real Estate"; the Personal Property - Owned
Real Estate and the Personal Property -
Leased Real Estate shall be collectively referred to herein as the
"Personal Property") (the Owned Real Estate, Owned Improvements and Leased
Real Estate shall be collectively referred to herein as the "Real Estate");
(b) All of Seller's right, title and interest as lessor in all leases
covering the Owned Real Estate (said leases, together with any and all
amendments, modifications or supplements thereto, are hereinafter referred
to collectively as the "Xxxx Leases" and are identified on Schedule 1.1(b)
hereto), as the same may be further amended, modified, supplemented or
terminated through the Closing Date with the mutual consent of Seller and
Purchaser, which consent may not be unreasonably withheld, conditioned or
delayed by Purchaser;
(c) All of Seller's right, title and interest in and to the
management contracts, service contracts and agreements affecting the Owned
Real Estate and Leased Real Estate (said contracts and agreements, together
with any and all amendments, modifications or supplements thereto, are
hereinafter referred to collectively as the "Assumed Contracts" and are
identified on Schedule 1.1(c) attached hereto), as the same may be amended,
modified, supplemented or terminated through the Closing Date with the
mutual consent of Seller and Purchaser, which consent may not be
unreasonably withheld, conditioned or delayed by Purchaser;
(d) All of Seller's rights, privileges, easements and appurtenances,
if any, to the Real Estate and to the improvements located thereon, if any,
including, without limitation, all of Seller's right, title and interest,
if any, in and to all mineral and water rights and all easements, rights-
of-way and other appurtenances used or connected with the beneficial use or
enjoyment of the Real Estate;
(e) To the extent assignable, all right, title and interest of Seller
(if any) in and to all site plans, surveys, soil and substratus studies,
architectural drawings, plans and specifications, engineering, electrical
and mechanical plans and studies, floor plans, landscape plans, and other
plans and studies of any kind if existing and in Seller's possession or
control that relate to the Real Estate or the Personal Property; provided,
however, that the following items (herein collectively, the "Excluded
Materials") shall be specifically excluded: (i) such items in Seller's
off-site facilities that are duplicates of such items available at the Real
Estate; (ii) such items to the extent pertaining to Seller's organization,
entity record books, financial statements and tax returns; and (iii) such
items to the extent related to any property, agreements, assets or
liabilities relating to properties, interests or other pursuits other than
the Purchased Assets (collectively, but specifically excluding the Excluded
Materials, the "Property Documents");
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(f) All of Seller's right, title and interest, to the extent
assignable, in and to any guarantees, licenses, approvals, certificates,
permits, and machinery and equipment warranties relating to the Real Estate
or necessary to the operation of the Stores;
(g) All inventory of the Stores, whether on location or in transit as
of the Closing Date, to the extent Purchaser may legally purchase such
inventory;
(h) All cash on hand at the Stores and accounts receivable related to
the Stores to the extent not collected by Seller prior to the Closing Date;
(i) As set forth on Schedule 1.1(i), all (i) proprietary information,
trade secrets and confidential information, technical information and data,
trademarks, trade names, internet domain names and service marks relating
to the operation of the Stores; (ii) all causes of action not pending as of
the Closing Date related to or in connection with the Purchased Assets; and
(iii) all licenses and permits necessary or related to the operation of the
Stores (collectively, the "Intangible Personal Property"); and
(j) All books and records related to the Purchased Assets and
operation of the Stores, including all financial, accounting and property
tax records, computer data and programs, market data, and records and all
correspondence with and documents pertaining to transactions with
suppliers, governmental authorities and other third parties (provided,
however, that copies of the same may be retained by Seller) to the extent
in the possession of Seller and prepared or produced in connection with the
Purchased Assets but specifically excluding any Excluded Materials
(collectively, the "Books and Records").
1.2 Assumption of Liabilities. At the Closing, the Purchaser shall
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assume, perform and discharge all of the following obligations of Seller
(collectively the "Assumed Liabilities"):
(a) The current trade accounts payable and other current liabilities
incurred in the ordinary course of operation of the Stores, as set forth in
the "Accounts Payable" and "Accrued Liabilities" categories on the Current
Balance Sheet (as defined herein), to the extent (i) the same have been
properly recorded in the general ledger of Seller through the Closing Date
and (ii) Seller at the Closing shall have provided a complete listing of
the same as recorded on the general ledger through the Closing Date;
provided, however, that in no event shall any of the indebtedness of Seller
for borrowed money, even to the extent classified as a current liability,
be included as one of the Assumed Liabilities;
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(b) To the extent relating to periods on and after the Closing, the
liabilities of Seller under the Xxxx Leases and the Assumed Contracts;
(c) Obligations to Transferred Employees as provided in Section 5.5
hereof; and
(d) All liabilities, obligations and responsibilities (whether
contingent or otherwise) arising out of or any way related to the Purchased
Assets to the extent relating to periods on or after the Closing, whether
known or unknown, contingent or absolute or otherwise.
Except as specifically set forth above, Purchaser does not assume and shall in
no event be liable for any debt, obligation, responsibility, liability or
contingent liability of Seller, or any affiliate or successor of Seller, or any
claim against any of the foregoing, whether known or unknown, contingent or
absolute, or otherwise. The scheduling of, or representations relating to,
liabilities of Seller pursuant to Section 3 of this Agreement shall in no way
imply that Purchaser intends to assume any such liability.
1.3. Excluded Assets. In no event shall the Purchased Assets include any
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of the Excluded Stores, Excluded Materials and other assets listed on Schedule
1.3 hereto (collectively the "Excluded Assets"). In order that Seller may
continue to operate and to expand, sale, transfer or otherwise dispose of the
Excluded Stores, Purchaser and Seller will, on the Closing Date, enter into the
Supply Agreement, substantially in the form of Exhibit B hereto ("Supply
Agreement"), and the License Agreement, substantially in the form of Exhibit C
hereto (the "License Agreement").
1.4. Purchase Price. The consideration to be received by Seller hereunder
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at the Closing for the Purchased Assets ("Purchase Price") shall be $35,000,000,
payable in cash at the Closing, as subsequently adjusted in accordance with the
provisions of Section 1.5 and 2.2; provided, however, that the sum of $1,000,000
(as such sum is adjusted pursuant to the Escrow Agreement (as hereinafter
defined) from time to time, the "Escrowed Funds") shall be deducted from the
Purchase Price. The Escrowed Funds shall be paid to a mutually acceptable
escrow agent (the "Escrow Agent") to hold pursuant to the Escrow Agreement,
substantially in the form of Exhibit D hereto, subject to such changes as
requested by the Escrow Agent as reasonably agreed to by Purchaser and Seller
(the "Escrow Agreement"). The foregoing Purchase Price shall be allocated among
the Purchased Assets in accordance with Section 1060 of the Internal Revenue
Code of 1986, as amended, and as set forth on a schedule to be mutually prepared
by Seller and Purchaser at the Closing. Seller and Purchaser each agree to
report the federal, state and local income and other tax consequences of the
transactions contemplated herein in a manner consistent with such allocation.
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1.5 Prorations. Except as elsewhere set forth herein, all items of income
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and expense arising from the operation of the Stores and ownership of the
Purchased Assets on or before the Closing Date shall be for the account of
Seller and thereafter shall be for the account of Purchaser, with such items
being prorated accordingly. Proration of the items described below between
Seller and Purchaser, as well as any and all other items as may be typically
prorated between the parties, shall be effective as of 12:01 a.m., local time,
on the day immediately following the Closing Date and shall occur as follows
with respect to those rights, liabilities and obligations of Seller transferred
to and assumed by Purchaser hereunder:
(i) Liability for state and local real estate and personal property
taxes and any water and sewer use charges assessed on the Purchased Assets
payable with respect to the year 2001 shall be prorated as between Seller
and Purchaser on the basis of the number of days of the tax year elapsed to
and including such date.
(ii) Prepaid items, deposits, credits, payables and accruals such as
utilities, other service charges, rental and other payments or advances
under any Assumed Contracts (but specifically excluding the rents and other
items covered under subsection (iii) below) shall be prorated between
Seller and Purchaser on the basis of the period of time to which such
liabilities, prepaid items and accruals apply.
(iii) All rent received by Seller or Purchaser after Closing with
respect to the Xxxx Leases shall be applied first to current rentals and
then to delinquent rentals, if any, in the order of their maturity. In the
event that there shall be any rents or other charges under any of the Xxxx
Leases that, although relating to a period prior to Closing, do not become
due and payable until after Closing or are paid prior to Closing but are
subject to adjustment after Closing (such as year-end common area
expenses), then any rent or charges of such type shall, to the extent
applicable to a period prior to or extending through the Closing, be
prorated between Seller and Purchaser as of the Closing Date upon
collection by either Seller or Purchaser and paid to the party owed
pursuant to the last grammatical paragraph of this Section 1.5.
(iv) Purchaser shall be responsible for the payment of (i) all
"Tenant Inducement Costs" (as hereinafter defined) and those leasing
commissions, which leasing commissions are described on Schedule 1.5(iv),
as potentially modified as set forth below, whether (A) a result of any
renewals or expansions of existing Xxxx Leases approved by Purchaser
between the date hereof and the date of Closing or (B) under any new Xxxx
Leases, approved by Purchaser and entered into between the date hereof and
the date of Closing, and (ii) all Tenant Inducement Costs and leasing
commissions entered into by Purchaser that become due and payable from and
after the date of Closing. Any Tenant Inducement Costs due and
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payable prior to Closing or not set forth on Schedule 1.5(iv) (as
potentially modified as set forth below) shall be the sole responsibility
of Seller. Purchaser's approval (which approval may not be unreasonably
withheld, conditioned or delayed) of any leasing commissions under either
clauses (A) or (B) above will be so indicated by an amendment to Schedule
1.5(iv). If, as of the date of Closing, Seller shall have paid any Tenant
Inducement Costs or leasing commissions for which Purchaser is responsible
pursuant to the foregoing provisions, Purchaser shall reimburse Seller for
such Tenant Inducement Costs or leasing commissions at Closing. For
purposes hereof, the term "Tenant Inducement Costs" shall mean any payments
required under a Xxxx Lease to be paid by the landlord thereunder to or for
the benefit of the tenant thereunder which is in the nature of a tenant
inducement, including specifically, without limitation, tenant improvement
costs, lease buyout costs, and moving, design, refurbishment and club
membership allowances. The term "Tenant Inducement Costs" shall not include
loss of income resulting from any free rental period, it being agreed that
Seller shall bear the loss resulting from any free rental period until the
date of Closing and that Purchaser shall bear such loss from and after the
date of Closing.
All such prorations shall be made as of the Closing Date to the extent
practicable and the Purchase Price adjusted therefor, with any additional
prorations to be agreed upon from time to time as promptly as practicable during
the nine month period following the Closing Date. Notwithstanding the
foregoing, if Seller collects any rent or charges described in subsection (iii)
above, Seller shall, within 15 days after the receipt thereof, deliver to
Purchaser any such rent that Purchaser is entitled to pursuant to this Section
1.5, and if Purchaser collects any such amounts, Purchaser shall, within 15 days
after the receipt thereof, deliver to Seller any such rent that Seller is
entitled to pursuant to this Section 1.5. Further, general real estate and ad
valorem taxes and assessments for the current tax year for the Real Estate,
although based on the 2001 tax year, will not be final and will be re-prorated
between Seller and Purchaser upon receipt of the final real estate and ad
valorem tax xxxx for the time period in which the Closing occurred. Seller and
Purchaser agree to pay the other any amounts due based on the re-proration,
within 30 days of receipt of such final tax xxxx.
2. CLOSING PROCEDURES.
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2.1 Closing. A closing (the "Closing") to effect the purchase and sale of
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the Purchased Assets shall be held at the offices of Xxxxxx & Bird LLP, counsel
to Seller, on such date (the "Closing Date") that is the fifth business date
after the satisfaction or waiver of all conditions precedent to the Closing, or
such other date as may be mutually agreed upon by the parties; provided,
however, the parties shall use their reasonable best efforts to close on the
last day of a fiscal month of Seller to the extent practicable. At the Closing,
Purchaser and Seller shall deliver or cause to be delivered the documents and
instruments described in Sections 6 and 7 herein. All actions taken at the
Closing shall be deemed to
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have been taken simultaneously at the time the last of any such actions is taken
or completed.
2.2. Post-Closing Adjustment Procedure.
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(a) Purchaser, at its sole cost and expense, shall prepare and
deliver to Seller within 90 days after the Closing Date an unaudited
balance sheet of the Purchased Assets and the Assumed Liabilities as of the
Closing Date ("Closing Balance Sheet"), prepared in accordance with
generally accepted accounting principles ("GAAP") consistent with past
practices used by Seller. Purchaser shall permit Seller, at its sole cost
and expense, and its accountants to participate in the preparation thereof
(including the right to observe any physical inventory) and shall promptly
make available to Seller and its accountants all work papers and other
pertinent information used in connection therewith. Seller shall have full
access to the books, records, properties and personnel of Purchaser for
purposes of verifying the Closing Balance Sheet.
(b) Within 30 days after the Closing Balance Sheet is delivered to
Seller pursuant to Section 2.2(a) above, Seller shall complete its
examination thereof and shall deliver to Purchaser either (i) a written
acknowledgement accepting the Closing Balance Sheet or (ii) a written
report setting forth in reasonable detail any proposed adjustments to the
Closing Balance Sheet ("Adjustment Report"). A failure by Seller to
deliver the Adjustment Report within the required 30-day period shall
constitute Seller's acceptance of the Closing Balance Sheet.
(c) During a period of 15 days following the receipt by Purchaser of
the Adjustment Report, Seller and Purchaser shall attempt to resolve any
difference they may have with respect to the matters raised in the
Adjustment Report. In the event the Purchaser and Seller fail to agree on
any of Seller's proposed adjustments contained in the Adjustment Report
within such 15 day period, then Seller and Purchaser mutually agree that
the Atlanta, Georgia office of the firm of PriceWaterhouseCoopers,
certified public accountants ("Independent Auditors"), shall make the final
determination with respect to the correctness of the proposed adjustments
in the Adjustment Report in light of the terms and provisions of this
Agreement. Purchaser and Seller each represent that it and its affiliates
have no current relationship with the Independent Auditor nor had any
relationship within the past three years. When making its decision, the
Independent Auditors shall follow GAAP consistent with past practices used
by Seller. The decision of the Independent Auditors shall be final and
binding on Seller and Purchaser, and may be used in a court of law by
either Seller or Purchaser for the purpose of enforcing such decision. The
costs and expenses of the Independent Auditors and their services rendered
pursuant to this Section 2.2(c) shall be borne equally by Seller and
Purchaser.
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(d) In the event that after finalization (which shall be deemed to
mean either the failure of Seller to deliver an Adjustment Report within
the 30-day period referred to Section 2.2(b) or, if Seller delivers such an
Adjustment Report, promptly upon the resolution of the matters raised in
such Adjustment Report pursuant to Section 2.2(c)) of the Closing Balance
Sheet, the "Net Working Capital" (as defined) of Seller is less than
$1,300,000 (which amount has been calculated as shown on Schedule 2.2(d)),
then Seller shall promptly pay to Purchaser the amount of such deficiency
below $1,300,000; provided, however, the total amount paid by Seller
pursuant to this Section 2.2(d) shall be paid only from the Escrowed Funds
and shall not exceed the amount of the Escrowed Funds. In the event that
after finalization of the Closing Balance Sheet, the "Net Working Capital"
(as defined) of Seller is greater than $1,300,000, then Purchaser shall
promptly pay to Seller the amount of such surplus above $1,300,000. As
used herein, "Net Working Capital" shall mean the current assets of Seller
less the current liabilities of Seller, prepared in accordance with
Schedule 2.2(d); provided, however, that all Excluded Assets and all
liabilities which are not Assumed Liabilities shall be excluded from the
computation of Net Working Capital.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Except as qualified by the
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schedules attached hereto, numbered to correspond with the representations so
qualified (the "Disclosure Schedules"), Seller hereby represents and warrants to
Purchaser as follows:
3.1. Organization and Good Standing. Each of Parent, Marthasville and
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Karalea is a corporation duly incorporated and validly existing under the laws
of the State of Georgia.
3.2. Binding Effect. This Agreement has been duly authorized, executed and
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delivered by Seller and, subject to the approval of this Agreement and the
transactions contemplated hereby by the requisite holders of common stock of
Seller, is the legal, valid and binding obligation of Seller, enforceable in
accordance with its terms except that (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium or other similar laws affecting the enforcement of creditors' rights
and (ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
3.3. Consents; Compliance with Other Instruments.
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(a) Except as set forth on Schedule 3.3, neither the execution and
delivery by Seller of this Agreement nor the consummation by it of the
transactions contemplated hereby will materially violate, breach, be in
conflict with, or constitute a material default under, or permit the
termination or the acceleration of
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maturity of, or result in the imposition of any lien, claim, or encumbrance
upon any property or asset of Seller pursuant to (i) the articles of
incorporation or bylaws of Parent, Marthasville or Karalea or (ii) any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness,
loan or lease agreement, other material agreement or instrument, judgment,
order, injunction, or decree by which Seller is bound, to which it is a
party, or to which any of its material assets are subject.
(b) Except as contemplated elsewhere herein and except as set forth
in Schedule 3.3, Seller is not required to submit any notice, declaration,
report or other filing or registration with any governmental or regulatory
authority or instrumentality in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
(c) Except as contemplated elsewhere herein and except as set forth
in Schedule 3.3, no waiver, consent, approval or authorization of any
governmental or regulatory authority or instrumentality or any other person
is required to be obtained or made by Seller in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(d) The only consents from any non-governmental person or entity
which are required to be obtained by Seller in connection with the
execution and delivery by it of this Agreement and the consummation of the
transactions contemplated hereby are set forth on Schedule 3.3, and, except
as set forth on Schedule 3.3, all such third party consents have been so
obtained.
3.4. Financial Statements and Records of Seller; SEC Reports.
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(a) Seller has made available to Purchaser the following financial
statements of Seller (the "Seller Financial Statements"): (i) the balance
sheet as of January 31, 2001 and statements of operations, cash flows and
stockholders' equity for the fiscal year then ended, accompanied by the
report of Seller's independent public accountants thereon, and (ii) the
unaudited balance sheet as of May 2, 2001 (the "Current Balance Sheet") and
statements of operations and cash flows for the 13 weeks then ended.
Except as described on Schedule 3.4, the Seller Financial Statements
present fairly the assets, liabilities and financial position of Seller as
of the dates thereof and the results of operations thereof for the periods
then ended and have been prepared in conformity with GAAP. The books and
records of Seller have been and are being maintained in accordance with
good business practice, reflect only valid transactions, are complete and
correct in all material respects, and present fairly in all material
respects the basis for the financial position and results of operations of
Seller set forth in the Seller Financial Statements.
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(b) All inventory used in the conduct of the operations of the Stores
reflected on the Current Balance Sheet, or acquired since the date thereof,
was acquired and has been maintained in the ordinary course of business,
consists substantially of good and merchantable quality and, other than
after acquired inventory, has been recorded on the Current Balance Sheet in
accordance with GAAP. Inventory acquired since the date of the Current
Balance Sheet consists of good and merchantable quality and has been
properly recorded in the general ledger of Seller according to GAAP.
(c) Except as described on Schedule 3.4, the accounts payable and
accrued expenses reflected on the Current Balance Sheet include all trade
liabilities and accrued expenses incurred in the ordinary course of
business as of that date, and have been recorded on the Current Balance
Sheet in accordance with GAAP. All trade accounts payable and accrued
expenses incurred since the date of the Current Balance Sheet have been
recorded in the general ledger of Seller according to GAAP. As of the
Closing Date, none of the trade accounts payable included in the Assumed
Liabilities will relate to invoices incurred for purposes other than the
operation of the Stores.
(d) Seller has made available to Purchaser (i) Seller's Annual Report
on Form 10-K for the year ended January 31, 2001, including all exhibits
filed thereto and items incorporated therein by reference, (ii) Seller's
Quarterly Report on Form 10-Q, including all exhibits thereto and items
incorporated therein by reference, for the 13 weeks ended May 2, 2001 and
(iii) all other reports or registration statements (as amended or
supplemented prior to the date hereof), filed by Seller with the Securities
and Exchange Commission (the "SEC") since January 1, 1999, including all
exhibits thereto and items incorporated therein by reference (items (i)
through (iv) being referred to as the "Seller SEC Reports"). As of their
respective dates, the Seller SEC Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.5. Absence of Certain Changes. Except as set forth on Schedule 3.5,
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since May 2, 2001, Seller has not (except as may result from the transactions
contemplated by this Agreement or as set forth on the Seller Financial
Statements):
(i) suffered any material adverse change in its results of operations
or financial condition related to the Stores;
(ii) suffered any damage or destruction to or loss of the Purchased
Assets not covered by insurance, excluding normal wear and tear; or
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(iii) entered into or terminated any material agreement, commitment
or transaction (other than the Assumed Contracts, the Permitted
Encumbrances and/or the Xxxx Leases, each as scheduled and attached
hereto), or agreed or made any changes in the Assumed Contracts.
3.6. No Material Undisclosed Liabilities. There are no material
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liabilities or obligations of Seller related to the Purchased Assets or Assumed
Liabilities of any nature, whether absolute, accrued, contingent or otherwise,
other than (i) the liabilities and obligations that are fully reflected,
accrued, or reserved against on the Seller Financial Statements, for which the
reserves are appropriate and reasonable, or incurred in the ordinary course of
business and consistent with past practices since May 2, 2001; or (ii)
liabilities or obligations not required to be disclosed in financial statements
prepared in accordance with GAAP.
3.7. Real Estate.
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(a) With respect to the Owned Real Estate, Seller has not granted
any mortgages, pledges, liens, security interests or encumbrances of any
kind other than the mortgages that will be satisfied in connection with the
Closing and the permitted exceptions set forth on Schedule 3.7 hereto (the
"Permitted Exceptions"), and Seller holds fee simple title and/or leasehold
title free and clear of all encumbrances other than such mortgages and the
Permitted Exceptions.
(b) A true, complete and correct copy of the lease evidencing
Seller's interest in the Leased Real Estate has been made available to
Purchaser.
(c) Seller has not received written notice of any violation of law,
municipal or county ordinances or other legal requirements with respect to
the Stores (or any part thereof) or with respect to the use, occupancy or
construction thereof. Seller has not received any written notice of any
pending or threatened termination or impairment of access to the Real
Estate or discontinuation of necessary sewer, water, electrical, gas,
telephone or other utilities or services.
(d) Seller has not received any written notice (i) that either the
whole or any portion of the Real Estate is to be condemned, requisitioned
or otherwise taken by any public authority, (ii) of violation of
restrictive covenants, deed restrictions or governmental requirements on
the Real Estate which have not been remedied, (iii) of any proceedings
which would cause the change, redefinition or other modification of the
zoning classification or (iv) any proceedings to widen or realign any
street or highway adjacent to the Real Estate. Seller has received no
written notice of any pending public improvements that may result in
special assessments against any of the Real Estate.
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(e) Except as set forth on Schedule 3.7 and 3.7(e) and in each case
solely in respect of the Real Estate:
(i) Seller has not received any written notice from any
governmental authority that Seller is in violation or alleged
violation of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including, without
limitation those arising under the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, the Federal Water Pollution Control
Act, the Solid Waste Disposal Act, as amended, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to the environment
(hereinafter "Environmental Laws");
(ii) Seller has not received written notice from any third
party, including without limitation any federal, state or local
governmental authority, (A) that Seller has been identified by the
United States Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (B)
that any hazardous waste, as defined by 42 U.S.C. (S)6903(5), any
hazardous substance as defined by 42 U.S.C. (S)9601(33) or any toxic
substance, oil or hazardous material or other hazardous chemical or
hazardous substance regulated by any Environmental Laws ("Hazardous
Substances") which Seller has generated, transported or disposed of
has been found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that Seller conduct
a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (C) that Seller is or shall be a named party
to any claim, action, cause of action, complaint (contingent or
otherwise), legal or administrative proceeding arising out of any
third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous
Substances; and
(iii) (A) no portion of any of the Real Estate has been used by
Seller for the handling, manufacturing, processing, storage or
disposal of Hazardous Substances in material violation of applicable
Environmental Laws, and to the knowledge of Seller, no underground
storage tank for Hazardous Substances is located on such properties;
(B) in the course of any activities conducted by
12
Seller on the Real Estate, no Hazardous Substances have been generated
by Seller or are being used by Seller on such properties in material
violation of applicable Environmental Laws; and (C) to the knowledge
of Seller, there have been no releases (i.e., any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) by Seller or
threatened releases by Seller of Hazardous Substances on, upon, into
or from any of the Real Estate in material violation of applicable
Environmental Laws.
(f) Except as set forth on Schedule 3.7(f), Seller has not received
written notice and has no knowledge that any of the sites constituting the
Owned Real Estate are not in compliance in all material respects with the
Americans with Disabilities Act, as amended, and all applicable state
statutes and local ordinances and regulations promulgated pursuant thereto
related to persons with disabilities, handicaps and special needs, all to
the extent the foregoing is presently applicable to the Owned Real Estate
and to the extent the Owned Real Estate is not grandfathered as legal
nonconforming.
(g) To Seller's knowledge, there are no pending legal proceedings or
administrative actions of any kind or character pending against any of the
Real Estate that, if adversely determined, could individually or in the
aggregate have a material adverse effect on title to the Real Estate or any
portion thereof or that could in any material way interfere with the
consummation of the transactions contemplated herein by Seller.
(h) Seller has received no written notice from any city, county,
state, federal or other government authority of any material violation of
any law, statute, ordinance, regulation, or administrative or judicial
order or holding, whether or not appearing in public records, with respect
to the Real Estate, which violation has not been corrected or otherwise
addressed.
(i) Seller has received no written notice from any city, county,
state, federal or other government authority relating to noncompliance with
any applicable building code or restriction that has not been corrected or
otherwise addressed.
(j) To Seller's knowledge and subject to the terms and conditions
thereof, the Xxxx Leases are in full force and effect and have not been
modified except as disclosed on Schedule 3.7(j). There are no outstanding
assignments by Seller of Seller's interest in the Xxxx Leases except for
those that will be satisfied at Closing or are set forth on Schedule
3.7(j). To Seller's knowledge, there are no other leases, service
contracts, maintenance agreements or other agreements to
13
which Seller is a party with respect to the Real Estate that will survive
the Closing other than the Xxxx Leases, the Permitted Exceptions or the
Assumed Contracts.
3.8. Title to Properties. Seller has, and will convey to Purchaser at
-------------------
Closing, good and insurable fee or leasehold title, as applicable, to the Owned
Real Estate and the Personal Property, free and clear of any lien, claim or
encumbrance, except for (i) liens for taxes, assessments or other governmental
charges not yet due and payable, (ii) statutory liens incurred in the ordinary
course of business with respect to liabilities that are not yet due and payable
and (iii) the Permitted Exceptions.
3.9. Condition of Personal Property. All of the Personal Property is in
------------------------------
good condition and working order, ordinary wear and tear excepted, and is
reasonably suitable for the uses for which intended, free from any defects known
to Seller, except such minor defects as do not substantially interfere with the
continued use thereof.
3.10 Litigation and Government Claims. Except as set forth on Schedule
--------------------------------
3.10, there is no pending suit, action or litigation, or administrative,
arbitration or other proceeding or governmental investigation or inquiry, to
which Seller is a party or to which its assets are subject which would, if
decided against Seller, individually or in the aggregate, have a material
adverse effect on the Purchased Assets (excluding the Real Estate, which
representations are embodied in Sections 3.7 and 3.8 hereof) or in any material
way interfere with the consummation by Seller of the transactions contemplated
by this Agreement. To Seller's knowledge, there are no such proceedings
threatened, contemplated, or any basis for any unasserted claims (whether or not
the potential claimant may be aware of the claim) which would, if decided
against Seller, individually or in the aggregate, have a material adverse effect
on the Purchased Assets (excluding the Real Estate, which representations are
embodied in Sections 3.7 and 3.8 hereof) of Seller or in any material way
interfere with the consummation by Seller of the transactions contemplated by
this Agreement.
3.11. No Violations or Defaults. To Seller's knowledge, Seller is not in
-------------------------
violation of or default under nor has any event occurred that, with the lapse of
time or the giving of notice or both, would constitute a material violation of
or material default under, or permit the termination or the acceleration of
maturity of, or result in the imposition of a lien, claim or encumbrance upon
the Purchased Assets (excluding the Real Estate, which representations are
embodied in Sections 3.7 and 3.8 hereof) pursuant to, any agreement, instrument,
judgment, order, injunction, or decree to which Seller is a party, by which
Seller is bound, or to which any of its assets is subject, except where such
violation or default would not have a material adverse effect on the Purchased
Assets (excluding the Real Estate, which representations are embodied in
Sections 3.7 and 3.8 hereof) or in any material way interfere with the
consummation by Seller of the transactions contemplated by this Agreement.
14
3.12. Labor Matters. Seller is not party to any collective bargaining
-------------
agreements with any union, and no collective bargaining agreement is currently
being negotiated by Seller. There is no labor strike or similar material
dispute pending or, to Seller's knowledge, threatened against or involving
Seller.
3.13. Assumed Contracts. Seller has furnished or made available accurate
-----------------
and complete copies of the Assumed Contracts to Purchaser. All of the Assumed
Contracts are valid, binding and enforceable obligations of Seller subject to
the terms and conditions thereof.
3.14. Transaction with Affiliates. As of the Closing, Seller and its
---------------------------
Affiliates shall have transferred to Seller good and valid title to any
equipment, fixtures or other assets (other than Excluded Assets) owned by Seller
and its Affiliates which are primarily used in the operation of the Stores.
Upon the occurrence of the Closing, neither Seller nor any Affiliate of Seller
will have any material interest in or will own any material property or material
right used principally in the operation of the Stores. The term "Affiliate"
shall mean Seller and any of its subsidiaries, officers or directors. Seller
and the wholly-owned subsidiaries listed on Schedule 3.14 constitute the sole
legal entities which conduct the business of Seller, except and to the extent
RCG Management, L.L.C. manages the Harry's Crossing Shopping Center for Seller.
3.15. Compliance with Laws. Except as set forth on Schedule 3.7(e) and/or
--------------------
3.7(f), as relates to the Purchased Assets (excluding the Real Estate, which
representations are embodied in Sections 3.7 and 3.8 hereof) and Assumed
Liabilities, Seller is in material compliance with all material laws, statutes,
governmental regulations and all judicial or administrative tribunal orders,
judgments, writs, injunctions, decrees or similar commands applicable to Seller,
except for such non-compliance that is not reasonably likely to have,
individually or in the aggregate, a materially adverse effect on the Purchased
Assets (excluding the Real Estate, which representations are embodied in
Sections 3.7 and 3.8 hereof) or in any material way interfere with the
consummation by Seller of the transactions contemplated by this Agreement. As
it relates to the Purchased Assets (excluding the Real Estate, which
representations are embodied in Sections 3.7 and 3.8 hereof) and Assumed
Liabilities, Seller has not been charged with, or received notice of
investigation with respect to, any material violation of any provision of any
federal, state or local law or administrative regulation applicable to Seller.
3.16. Intellectual Property. Seller owns or has valid, binding and
---------------------
enforceable rights to use all material patents, trademarks, trade names, service
marks, service names, copyrights, applications therefor and licenses or other
rights in respect thereof ("Intellectual Property") used or held for use in
connection with the operation of the Stores, without any known conflict with the
rights of others. Except as set forth in Schedule 3.16, Seller has not received
any notice from any other person pertaining to or challenging the
15
right of Seller to use any Intellectual Property or any trade secrets,
proprietary information, inventions, know-how, processes and procedures owned or
used or licensed to Seller.
3.17. Non-Foreign Person. Seller is not a "foreign person" within the
------------------
meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as
amended (the "Code").
3.18. Employee Benefit Plans; ERISA.
-----------------------------
(a) Schedule 3.18 sets forth a complete list of each employee
pension, profit sharing, stock bonus, stock option, bonus, incentive
deferred compensation, hospitalization, medical, insurance, severance or
other plan, fund, program or policy providing employee benefits maintained
or contributed to by Seller for employees of the Stores (the "Plans").
(b) Except as set forth in Schedule 3.18, Seller does not
contribute, and has not contributed, to any multi-employer plan within the
meaning of Section 4001(a)(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), in which employees of Seller
participate, and no withdrawal liability has been incurred by or asserted
against Seller or by any trade or business, whether or not incorporated,
which together with the Seller would be deemed a single employer within the
meaning of Section 4001 of ERISA (an "ERISA Affiliate") with respect to a
multi-employer plan.
(c) Except as set forth in Schedule 3.18, (i) for each Plan that is
intended to satisfy the provisions of Section 401(a) of the Code (the
"Code") (A) Seller has obtained a favorable determination letter from the
Internal Revenue Service ("IRS") to such effect, (B) to the knowledge of
Seller, none of the determination letters has been revoked by the IRS, (C)
the IRS has not given any oral or written notice to Seller that it intends
to revoke any such determination letter, and (D) to the knowledge of
Seller, no event or condition exists that could reasonably be expected to
cause such determination to be revoked; (ii) no Plan is subject to Title IV
of ERISA or Section 302(a) of ERISA or Section 412 of the Code; (iii)
Seller has not sponsored nor maintained a defined benefit plan within the
meaning of Section 414(j) of the Code; and (iv) no Plan provides or has
provided death or medical benefits (whether or not insured), with respect
to current or former employees of Seller beyond their retirement or other
termination of service, except as required by Part 6 of Title I of ERISA
and Section 4980B of the Code.
(d) Each of the foregoing plans has been, and is being, operated and
administered in accordance with its terms and in compliance with applicable
laws, including, but not limited to, ERISA and the Code; provided, however,
that this
16
representation and warranty is limited to those failures that could
individually or in the aggregate have material adverse effect on the
Purchased Assets.
(e) All contributions that are required to be made with respect to
any Plan prior to the Closing have been made.
(f) In general, there are no facts or circumstances that could,
directly or indirectly, subject Purchaser or any of its affiliates to any
material liability of any nature with respect to any Plan. It is expressly
acknowledged that no liability with respect to any Plan (or predecessor to
a Plan), and no multi-employer plan withdrawal liability shall constitute
an Assumed Liability within the meaning of Section 1.2 hereof.
3.19. Tax Liabilities. Seller has filed all federal, state, county and
---------------
local tax returns and reports required to be filed by it with respect to taxes
for which successor liability will apply, including payroll, property,
withholding, social security, sales and use taxes, to the extent that such taxes
relate to the Purchased Assets; has either paid in full all such taxes that have
become due as reflected on any return or report and any interest and penalties
with respect thereto or has fully accrued on its books or has established
adequate reserves for all taxes payable but not yet due; and has made required
cash deposits with appropriate governmental authorities representing estimated
payments of taxes, including employee withholding tax obligations. No extension
or waiver of any statute of limitations or time within which to file any return
has been granted to or requested by Seller with respect to any such tax. No
unsatisfied deficiency, delinquency or default for any tax, assessment or
governmental charge has been assessed (or, to the knowledge of Seller, claimed
or proposed) against Seller, nor has Seller received notice of any such
deficiency, delinquency or default.
3.20. Brokers and Finders. Except for Xxxxxxxx Xxxxx (the fees of which
-------------------
shall be borne solely by Seller), Seller has not engaged any person to act or
render services as a broker, finder or similar capacity in connection with the
transactions contemplated herein and no other person has, as a result of any
agreement or action by Seller, any right or valid claim against Seller,
Purchaser or any of Purchaser's affiliates for any commission, fee or other
compensation as a broker or finder, or in any similar capacity in connection
with the transactions contemplated herein that would result in any liability to
Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents
-------------------------------------------
and warrants to Seller as follows:
4.1. Organization and Good Standing. Purchaser is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the state of
Delaware.
17
4.2. Corporate Power and Authority. Purchaser has the corporate power and
-----------------------------
authority and all licenses and permits required by governmental authorities to
execute, deliver and perform its obligations under this Agreement.
4.3. Binding Effect. This Agreement has been duly authorized, executed and
---------------
delivered by Purchaser and is the legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms except that (i)
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium or other similar laws affecting the
enforcement of creditors' rights and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability.
4.4. Consents; Compliance with Other Instruments.
-------------------------------------------
(a) Neither the execution and delivery by Purchaser of this Agreement
nor the consummation by it of the transactions contemplated hereby will
materially violate, breach, be in conflict with, or constitute a material
default under, or permit the termination or the acceleration of maturity
of, or result in the imposition of any lien, claim or encumbrance upon any
property or asset of Purchaser pursuant to (i) its certificate of
incorporation or bylaws, or (ii) any note, bond, indenture, mortgage, deed
of trust, evidence of indebtedness, loan or lease agreement, other material
agreement or instrument, judgment, order, injunction or decree by which
Purchaser is bound, to which it is a party, or to which its material assets
are subject.
(b) Except as contemplated elsewhere herein and except as set forth
in Schedule 4.4, Purchaser is not required to submit any notice,
declaration, report or other filing or registration with any governmental
or regulatory authority or instrumentality in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(c) Except as contemplated elsewhere herein and except as set forth
in Schedule 4.4, no waiver, consent, approval or authorization of any
governmental or regulatory authority or instrumentality or any other person
is required to be obtained or made by Purchaser in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(d) The only consents from any non-governmental person or entity
which are required to be obtained by Purchaser in connection with the
execution and delivery by it of this Agreement and the consummation of the
transactions contemplated hereby are set forth on Schedule 4.4, and, except
as set forth on Schedule 4.4, all such third party consents have been so
obtained.
4.5. No Knowledge of Misrepresentation or Omission. As of the date of this
---------------------------------------------
Agreement, neither Purchaser nor its affiliates has any knowledge that any
representation
18
or warranty of Seller is not true and correct in all material respects, nor does
Purchaser have knowledge of any material errors in, or material omissions from,
the Schedules to this Agreement.
4.6. DISCLAIMER. EXCEPT FOR THE REPRESENTATIONS OF SELLER CONTAINED
----------
ELSEWHERE HEREIN, IT IS EXPRESSLY UNDERSTOOD AND AGREED BY PURCHASER THAT IT IS
PURCHASING THE REAL ESTATE "AS IS" AND "WHERE IS," AND WITH ALL FAULTS, AND
THAT, EXCEPT AS SET FORTH HEREIN, SELLER IS MAKING NO REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH
RESPECT TO THE QUALITY, PHYSICAL CONDITION OR VALUE OF THE REAL ESTATE, THE
INCOME OR EXPENSES FROM OR OF THE REAL ESTATE, OR THE COMPLIANCE OF THE REAL
ESTATE WITH APPLICABLE BUILDING OR FIRE CODES, LAWS OR OTHER LAWS, RULES, ORDERS
OR REGULATIONS INCLUDING WITHOUT LIMITATION ENVIRONMENTAL LAWS. WITHOUT
LIMITING THE FOREGOING, IT IS UNDERSTOOD AND AGREED THAT SELLER MAKES NO
WARRANTY OF THE HABITABILITY, SUITABILITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. ACCORDINGLY, EXCEPT FOR THE PROVISIONS REGARDING SELLER'S
REPRESENTATIONS AND WARRANTIES CONTAINED ELSEWHERE HEREIN, PURCHASER IS DEEMED
TO BE RELYING ON ITS OWN DILIGENCE AND INVESTIGATIONS WITH RESPECT TO THE REAL
ESTATE AND IRREVOCABLY WAIVES ALL CLAIMS AGAINST SELLER WITH RESPECT TO THE REAL
ESTATE, OTHER THAN CLAIMS FOR BREACH OF THE REPRESENTATIONS AND WARRANTIES
SPECIFICALLY SET FORTH IN THIS AGREEMENT.
4.7. Brokers and Finders. Neither Purchaser nor any of its affiliates has
-------------------
engaged any person to act or render services as a broker, finder or similar
capacity in connection with the transactions contemplated herein and no person
has, as a result of any agreement or action by Purchaser or its affiliates any
right or valid claim against Seller, Purchaser or their respective affiliates
for any commission, fee or other compensation as a broker or finder, or in any
similar capacity in connection with the transactions contemplated herein that
would result in any liability to Seller.
5. CERTAIN COVENANTS.
-----------------
5.1. Consents and Approvals.
----------------------
(a) Each of the parties hereto shall, and shall cause each of its
affiliates to, use its reasonable efforts in good faith to obtain at the
earliest practicable date any approvals, authorizations and consents
necessary to consummate the transactions contemplated by this Agreement and
take such actions as the other parties may reasonably request to consummate
the transactions contemplated by
19
this Agreement and diligently attempt to satisfy, to the extent within its
reasonable control, all conditions precedent to its obligations to close
the transactions contemplated by this Agreement.
(b) Seller will take all action necessary in accordance with
applicable law and its Articles of Incorporation and Bylaws to convene a
meeting of its stockholders as promptly as practicable to consider and vote
upon the approval of this Agreement and the transactions contemplated
hereby. Subject to its fiduciary obligations, the Board of Directors of
Seller shall recommend such approval, and Seller shall take all lawful
action to solicit such approval.
(c) Purchaser shall take all necessary action, with the cooperation
of Seller, to obtain the consent, to the extent required, of applicable
alcoholic beverage agencies to the consummation of the transactions
contemplated herein (the "Liquor Consents").
(d) Purchaser and Seller shall mutually cooperate to obtain the
consent, to the extent required, of the lessors of the Leased Real Estate
to the assignment of the lease of the Leased Real Estate to Purchaser or
one of its subsidiaries (the "Landlord Consents"). In the event the
Landlord Consents are not obtained prior to the Closing, the related Leased
Real Estate will become an Excluded Asset (without any reduction in the
Purchase Price), and the parties will amend Schedule 1.3 accordingly.
(e) Nothing in this Section 5.1 shall require a party to expend any
monies to obtain any approval or consent required hereunder, except for
customary attorneys' fees and filing fees incident to the transactions
contemplated hereby or as otherwise specifically required under this
Agreement.
5.2. Access to Information and Stores.
--------------------------------
(a) Subject to any rights or restrictions under any of the Permitted
Title Exceptions or the Xxxx Leases, between the date of this Agreement and
the Closing Date, Seller will provide to Purchaser and its accountants,
counsel and other authorized representatives reasonable access, during
normal business hours, to its premises, management, properties, contracts,
commitments, books, records and other information and will cause its
officers to furnish to Purchaser and its authorized representatives such
financial, technical and operating data and other information pertaining to
the Stores, as the Purchaser shall from time to time reasonably request.
(b) Between the date of this Agreement and the Closing Date, Seller
will allow the Purchaser, at reasonable times that will not disrupt the
operation of
20
the Stores and with the prior consent of Seller (which will not be
unreasonably withheld), to meet with, provide hand-out materials about
Whole Foods Market, Inc. and its subsidiaries to Store employees and to
interview selected Store managers and employees. Further, Purchaser may
designate a representative to spend substantially all of his business time
on-site at the Stores to observe the operation of the Stores and to assist
Seller in the transition of the ownership of the Purchased Assets to
Purchaser; and Seller shall provide office space and general office
services to such representative (it being understood that Seller shall not
be required to incur any out of pocket expense in connection with such
activities).
(c) The Purchaser and its representatives shall maintain the
confidentiality of all information (other than information which is
generally available to the public) concerning Seller acquired pursuant to
the transactions contemplated hereby in the event that the sale of the
Purchased Assets is not consummated. All files, records, documents,
information, data and similar items relating to the confidential
information of Seller shall remain the exclusive property of Seller and
shall be promptly delivered to Seller upon termination of this Agreement.
(d) Notwithstanding any other provision of this Agreement, Purchaser
shall not conduct any soil, ground water or other invasive testing of the
Owned Real Estate prior to the Closing without the prior written consent of
Seller, which consent shall not be unreasonably withheld. Purchaser shall
give Seller reasonable advance notice of any examinations, interviews or
surveys prior to the Closing, and agrees to conduct all examinations,
interviews or surveys during mutually agreed-upon time periods. Seller
shall have the right, in its sole discretion, to have a representative
present during all such examinations, interviews or surveys conducted by
Purchaser or its authorized agents. Purchaser agrees to conduct all
examinations, interviews and surveys in a manner that will not cause harm
or damage to the Stores and agrees to restore any damage occasioned thereby
at its sole cost and expense. Purchaser agrees to indemnify, defend and
hold harmless Seller, its directors, officers, employees, agents and
assigns from and against any and all claims for injury or death to persons,
damage to property or other losses, damages or claims, including in each
instance attorneys' fees and litigation costs, arising out of any act or
failure to act of Purchaser or any person or firm acting on Purchaser's
behalf in connection with the examinations, interviews or surveys conducted
pursuant to this subsection (d). This indemnity shall survive the Closing
and any termination of this Agreement pursuant to Section 8.1 hereof.
5.3. No Solicitations.
----------------
(a) From the date hereof until the Closing or until this Agreement is
terminated or abandoned as provided in this Agreement, neither Seller nor
any of
21
its officers, directors, employees or agents retained by or acting on
behalf of Seller, shall directly or indirectly (i) solicit or initiate
discussion with or (ii) except as permitted below, enter into negotiations
or agreements with, or furnish any information that is not publicly
available to, any corporation, partnership, person or other entity or group
(other than Purchaser or its authorized representatives pursuant to this
Agreement) concerning any proposal for a merger, sale of any of the Stores,
sale of shares of stock or securities or other takeover or business
combination transaction (an "Acquisition Proposal") involving Seller, and
Seller will instruct its officers, directors, advisors and its financial
and legal representatives and consultants not to take any action contrary
to the foregoing provisions of this sentence. Seller will notify Purchaser
promptly in writing if it becomes aware that any inquiries or proposals are
received by, any information is requested from or any negotiations or
discussions are sought to be initiated with, Seller with respect to an
Acquisition Proposal.
(b) Notwithstanding the foregoing, in response to any Acquisition
Proposal that has not been solicited in violation of Section 5.3(a), Seller
may furnish information concerning its business, properties or assets to
the person (a "Potential Acquiror") making such unsolicited Acquisition
Proposal and participate in negotiations with the Potential Acquiror if (i)
Seller's Board of Directors concludes in good faith that such person is
reasonably capable of consummating such Acquisition Proposal, taking into
account all legal, financial, regulatory and other aspects of the
Acquisition Proposal and the person making the Acquisition Proposal, and
that such Acquisition Proposal could reasonably be expected to result in a
Superior Offer (as defined below), and (ii) the Board of Directors
concludes in good faith, after consultation with its outside legal counsel,
that the failure to take such action would reasonably be likely to be
inconsistent with its fiduciary obligations to the stockholders of Seller
under applicable laws of the State of Georgia. Seller will keep Purchaser
fully informed of amendments or proposed amendments to any such Acquisition
Proposal.
(c) The Board of Directors of Seller (i) shall not withdraw or modify
or propose to withdraw or modify, in any manner adverse to Purchaser, the
approval or recommendation of the Board of Directors of this Agreement or
(ii) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal, unless, in each case, Seller's Board of Directors
determines in good faith, based on advice of outside legal counsel, that
such Acquisition Proposal is a Superior Offer and the failure to take such
action would reasonably be likely to be inconsistent with its fiduciary
duties under applicable laws of the State of Georgia.
(d) The term "Superior Offer" means an Acquisition Proposal that the
Board of Directors determines in good faith (i) is more favorable to
Seller's stockholders from a financial point of view than the terms of this
Agreement, (ii)
22
that such Acquisition Proposal, if accepted, is reasonably likely to be
consummated, taking into accounting, legal, financial, regulatory and other
aspects of the Acquisition Proposal and the person making the Acquisition
Proposal, and (iii) after consultation with its financial advisor and legal
counsel and such other matters as the Board of Directors deems relevant,
and after considering applicable provisions of state law, that failure to
approve such Acquisition Proposal could reasonably be expected to result in
a breach of its fiduciary duties under applicable law.
5.4 Maintenance of the Stores and the Purchased Assets. Seller covenants
--------------------------------------------------
that between the date hereof and the Closing, except as contemplated hereby or
with the prior consent of Purchaser, it will refrain from doing any of the
following in respect of the Stores and the Purchased Assets: (i) entering into
any transaction with respect to the Stores other than in the ordinary course of
business, (ii) permitting any further encumbrance, mortgage, pledge or lease of
or on any Purchased Asset, (iii) disposing of any material Purchased Asset
except for (A) the sale of inventory in the ordinary course of business and (B)
the liquidation of the assets listed on Schedule 5.4 for amounts above the book
value of such assets and in such manner as to preserve the casual sale exemption
under Georgia Regulation 560-12-1.07, (iv) amending, renewing, modifying or
terminating any of the Assumed Contracts or Xxxx Leases without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld,
conditioned or delayed (provided, however, that Seller hereby covenants to
terminate the property management agreement with RCG Management, L.L.C.
effective as of the Closing and Purchaser hereby consents thereto; provided,
further, however, that Seller hereby covenants to terminate the lease agreement
between Harry's Farmers Market, Inc. and Karalea, Inc. with respect to that
portion of the Owned Real Estate located in Xxxx County and Purchaser hereby
consent thereto), (v) entering into any employment contract or make any change
in the compensation or employee benefits payable or to become payable to any of
the Transferred Employees, other than anniversary pay increases consistent with
past practice, renewals of insurance policies covering Seller's employees and
similar actions in the ordinary course of business designed to maintain Seller's
current employment practices and policies, or (vi) entering into any agreement,
commitment or arrangement with respect to the foregoing. Until the Closing,
Seller shall keep the Real Estate insured against fire, vandalism and other
loss, damage and destruction; provided, however, that Seller's insurance
policies (as Excluded Assets) shall not be assigned to Purchaser at the Closing,
and Purchaser shall be obligated to obtain its own insurance coverage from and
after the Closing.
5.5 Employees and Employee Benefits.
-------------------------------
(a) Subject to the terms set forth below, Seller will terminate all of
its Floor Employees, as described below, at the Stores immediately prior to
the Closing and shall assume the following liabilities or obligations to
such terminated Floor Employees: (i) all claims for compensation for
periods prior to the Closing
23
Date, except to the extent accrued on the Closing Balance Sheet, (ii)
claims under all Seller Plans through the Closing Date, except to the
extent accrued on the Closing Balance Sheet, and (iii) all liabilities for
any failure to provide health continuation coverage, if any, to any Floor
Employees who do not accept employment with Purchaser, but only to the
extent Seller is required by law to provide such health insurance coverage.
All employees of the Excluded Stores or who work on site at any of the
Excluded Stores shall remain employees of Seller; provided, however, that
Seller will not transfer any of its current employees to the Excluded
Stores without the prior consent of Purchaser. "Floor Employees" shall
include all hourly wage employees in Seller's corporate, manufacturing and
distribution departments and all employees in Seller's Store operations
department.
(b) The Purchaser will offer employment to all Floor Employees as of
the Closing Date, at each person's respective existing level of
compensation; however, the employment of any persons who accept employment
with the Purchaser as of the Closing Date shall be at will.
(c) Prior to September 15, 2001, Purchaser shall deliver a written
statement to Seller setting forth the "Corporate Employees", as described
below, that Purchaser will offer employment to ("Transferred Corporate
Employees" and, together with the Floor Employees, the "Transferred
Employees"). Notwithstanding the aforementioned, Seller has set forth on
Schedule 5.5 such Corporate Employees that will not be available to
Purchaser for employment pursuant to this paragraph or otherwise. Seller
will terminate all Transferred Corporate Employees immediately prior to the
Closing and shall assume the following liabilities or obligations to such
Transferred Corporate Employees: (i) all claims for compensation for
periods prior to the Closing Date, except to the extent accrued on the
Closing Balance Sheet, (ii) claims under all Seller Plans through the
Closing Date, except to the extent accrued on the Closing Balance Sheet,
and (iii) all liabilities for any failure to provide health continuation
coverage, if any, to any Transferred Corporate Employees who do not accept
employment with Purchaser, but only to the extent Seller is required by law
to provide such health insurance coverage. "Corporate Employees" shall
include all salaried employees in Seller's corporate, manufacturing and
distribution departments.
(d) In connection with the employment of the Transferred Employees,
the Purchaser will assume (i) any responsibilities or liabilities owing or
allegedly owing by Seller under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. 2101 et seq., (ii) all employee liabilities
accrued on the Closing Balance Sheet, (iii) severance benefits, if any, to
all Transferred Employees whose employment is terminated on and after the
Closing Date by the Purchaser, and (iv) health care continuation for
Seller's employees and dependents, but only to the extent required by law.
24
(e) Effective as of the Closing Date, the Purchaser shall make
available to the Transferred Employees the employee benefit plan(s)
maintained by the Purchaser generally for its employees (the "Purchaser
Plans") in accordance with their terms. To the extent permitted by the
terms of the Purchaser Plans and Purchaser's administrative capabilities,
the Purchaser will (i) waive all deductibles, waiting periods and
limitations with respect to pre-existing conditions that would otherwise be
applicable to employees of Seller under the Purchaser Plans in 2001, and
(ii) grant full past service credit (including credit for eligibility,
benefit accrual and for vesting) to the Transferred Employees for service
with Seller or its subsidiaries or affiliates under any and all of the
Purchaser Plans. Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement will entitle any employee,
including but not limited to, Transferred Employees, to any other severance
benefits from Purchaser nor will it accelerate compensation due any such
Transferred Employee as of the Closing Date from Purchaser. Subject to the
foregoing, the Purchaser shall have the right in the good faith exercise of
operations and managerial discretion to make changes or cause changes to be
made after the Closing Date in compensation, benefits and other terms of
employment and to terminate any such employee.
(f) For a period of six months following the date of Closing, each
party hereto will make available such employees reasonably requested by the
other party for up to two days per week, during normal business hours, to
consult with, and to assist and support, the other party in connection with
the transactions described herein or with the continuing operations of the
Excluded Stores, as the case may be. In no event shall such request
interfere with the continuing operations of the Purchaser or Seller. The
parties hereto agree to enter into a written agreement prior to closing
whereby stating the scope of the consulting relationship described by this
Section 5.5(f), including that the employer of any such employees shall
continue to be responsible for all compensation due to such individuals and
the other party shall reimburse the respective employer for the daily
salary of such employee as utilized.
(g) In addition to the aforementioned, each party hereto, upon
reasonable notice to the other, shall be entitled to seek the consulting
services of any employee of the other party during the 12 months following
the date of Closing; provided, however that such consulting does not occur
during the employee's normal business hours and such employee shall
maintain all confidential and proprietary information of his or her primary
employer, subject to the terms and conditions of the License Agreement and
Supply Agreement.
(h) Other than set forth herein, Purchaser agrees that, for a period
of 12 months following the Closing Date, neither it nor its affiliates will
directly or
25
indirectly solicit for employment (whether as an employee, consultant,
advisor, independent contractor or otherwise) any employee of, or
consultant to, the Excluded Stores without the express prior written
permission of Seller, which permission shall be in the sole discretion of
Seller; provided, however, that Purchaser shall not be in breach of this
provision if the employee or consultant solicited was terminated by Seller
for any reason prior to such solicitation or if Purchaser has cured any
default hereunder within 15 days after written notice of such default is
received by Purchaser.
(i) Other than as set forth herein, Seller agrees that, for a period
of 12 months following the Closing Date, neither it nor its affiliates will
directly or indirectly solicit for employment (whether as an employee,
consultant, advisor, independent contractor or otherwise) any of the
Transferred Employees, without the express prior written permission of
Purchaser, which permission shall be in the sole discretion of Purchaser;
provided, however, that Seller shall not be in breach of this provision if
the employee or consultant solicited was terminated by Purchaser for any
reason prior to such solicitation or if Seller has cured any default
hereunder within 15 days after written notice of such default is received
by Seller.
5.6 Companies' Legal Names. Effective as of the Closing, Seller will
----------------------
change its legal name to a name which does not include "Harry's Farmers Market"
or similar phrases utilized in the operation of the Stores; provided, however,
Seller or its successors or assigns may continue to utilize the service xxxx
"Harry's In A Hurry" for use on and in connection with the operation of the
Excluded Stores in accordance with the provisions of the License Agreement.
5.7. Proxy Statement.
---------------
(a) Seller shall promptly prepare and, no later than 21 days after
the date of this Agreement, file with the SEC a proxy statement with
respect to a special meeting of the stockholders of Seller in connection
with the transactions contemplated hereby (the "Proxy Statement"). Seller
will use its best efforts to receive and respond to any comments of the SEC
and to promptly mail to its stockholders the Proxy Statement in its
definitive form.
(b) Each of Seller and Purchaser agrees to provide as promptly as
practicable to the other such information concerning the background of the
Agreement and its business and financial statements and affairs as, in the
reasonable judgment of the other party, may be required or appropriate for
inclusion in the Proxy Statement or in any amendments or supplements
thereto, and to cause its counsel and auditors to cooperate with the
other's counsel and auditors in the preparation of the Proxy Statement.
26
(c) At the time the Proxy Statement is mailed to Seller's
stockholders, such Proxy Statement will (i) not contain any untrue
statement of a material fact, or omit to state any material fact required
to be stated therein as necessary, in order to make the statements therein,
in light of the circumstances under which they were made, not misleading or
necessary and (ii) comply in all material respects with the provisions of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder; provided, however, no representation is made by
either Seller or Purchaser with respect to statements made in the Proxy
Statement based on information supplied by the other party expressly for
inclusion or incorporation by reference in the Proxy Statement or
information omitted with respect to the other party.
5.8. Title Policies; Satisfaction of Monetary Obligations. Purchaser has
----------------------------------------------------
reviewed and approved certain title commitments issued by Chicago Title
Insurance Company (the "Title Company") and various surveys with respect to the
Owned Real Estate. A copy of pro forma markups of such title commitments
("Owner's Title Policies"), which markups indicate all required coverages and
endorsements, is attached hereto as Schedule 5.8. The Owner's Title Policies
shall be in the amount reasonably acceptable to Purchaser. Seller shall use its
reasonable efforts to attempt to eliminate or modify any Monetary Obligations
that are not Permitted Exceptions that appear on the title commitments for each
of the sites constituting the Owned Real Estate. For purposes of this Section
5.8, "Monetary Obligations" shall mean (i) any deed of trust, mortgage, or other
security title encumbering all or any portion of the Owned Real Estate created
by, through or under Seller, securing an indebtedness that remains unpaid or
held by Seller; (ii) mechanics, materialmen and other similar liens created by,
under or through Seller (and not in connection with this Agreement or
Purchaser's inspection) and (iii) the lien of ad valorem taxes affecting the
Property which are past due.
5.9. Excluded Stores. Prior to the Closing Date, Seller shall notify all
---------------
lessors of the Excluded Stores in writing (by certified mail) (i) of the
transactions contemplated hereby and (ii) that Purchaser is not assuming any
obligations or liabilities in respect of the Excluded Stores. Seller shall
promptly provide copies of these written notices to Purchaser.
5.10 Preservation of Records. At no cost to Seller, Purchaser shall keep
-----------------------
and preserve the Books and Records related to financial matters and tax records
and filings until the fifth anniversary of the Closing Date and all other Books
and Records until the third anniversary of the Closing Date. However, following
such periods, at least sixty days prior to the destruction, removal or other
disposal of any such Books and Records, Purchaser shall notify Seller in writing
of its intent and permit Seller, at its sole cost and expense, to reclaim any
such materials it deems necessary, in its sole discretion. To the extent
necessary for the defense of threatened or actual litigation claims, Purchaser
shall afford Seller, its counsel and other representatives reasonable access to
the Books and
27
Records and shall provide copies thereof upon Seller's written request. In
addition, Purchaser will provide access to such of the Transferred Employees
that remain in its employ, including without limitation, making such Transferred
Employees available for interviews and depositions.
5.11 Further Assurances. From and after the Closing Date, the parties
------------------
shall deliver to each other any additional material and documents (other than
Excluded Materials) that are necessary or appropriate to further assure,
complete and document the consummation of the transactions contemplated herein
on the terms and conditions contemplated herein.
5.12. Xxxx Leases. In the event of any delinquencies in payment under the
-----------
Xxxx Leases in existence as of the Closing Date, Purchaser will permit Seller to
collect any delinquencies against the tenants under the Xxxx Leases, but
Purchaser shall have no obligation to collect same on Seller's behalf (although
if any are actually received by Purchaser, the provisions of Section 1.5(iii)
shall govern) and Seller shall have no right to evict tenants for non-payment of
the same, but Seller shall be entitled to pursue such other remedies available
to it at law or in equity.
5.13. Knowledge of Misrepresentation or Omission. Purchaser will promptly
------------------------------------------
advise Seller in writing if at any time it discovers that (i) any of the
representations and warranties of Seller in this Agreement is not true and
correct or (ii) any of the Schedules attached hereto contains any errors or
omissions, in each case to the extent that the same would materially and
adversely affect the value of the Purchased Assets.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations of Seller to
---------------------------------------------
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction on or before the Closing Date of each of the following
conditions:
6.1. Compliance. Purchaser shall have, or shall have caused to be,
----------
satisfied or complied with and performed in all material respects, all terms,
covenants and conditions of this Agreement to be complied with or performed by
it on or before the Closing Date.
6.2. Stockholder Approval. The stockholders of Seller shall have duly
--------------------
approved this Agreement and the transactions contemplated herein in accordance
with Seller's Articles of Incorporation and Bylaws and all applicable state and
federal laws.
6.3. Representations and Warranties. All of the representations and
------------------------------
warranties made by Purchaser in this Agreement and in all certificates and other
documents delivered by Purchaser to Seller pursuant hereto, shall have been true
and correct in all material respects as of the date hereof, and shall be true
and correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date, except for changes permitted or contemplated by
28
this Agreement and provided that representations and warranties that are
confined to a specified date shall speak only as of such date.
6.4. Closing Deliveries by Purchaser. Purchaser shall deliver or cause to
-------------------------------
be delivered to Seller the following:
(i) the Purchase Price, payable to an account designated by Seller
(other than the Escrowed Funds, which will be delivered to the Escrow
Agent);
(ii) the Escrow Agreement;
(iii) an Assignment and Assumption Agreement in respect of the
Leased Real Estate in the form of Exhibit E-1 to E-3 attached hereto
(collectively the "Assignment and Assumption of Leased Real Estate");
(iv) an Assignment and Assumption Agreement in respect of the Xxxx
Leases in the form of Exhibit F attached hereto (the "Assignment and
Assumption of Xxxx Leases");
(v) an Assignment and Assumption in respect of the Assumed
Contracts in the form of Exhibit G attached hereto (the "Assignment and
Assumption of Assumed Contracts")
(vi) an Assignment and Assumption Agreement in respect of the
Assumed Liabilities other than the Leased Real Estate, the Xxxx Leases and
the Assumed Contracts, in the form of Exhibit H attached hereto (the
"Assignment and Assumption of Other Assumed Liabilities");
(vii) a closing statement mutually acceptable to Purchaser and
Seller (the "Closing Statement");
(viii) the Supply Agreement;
(ix) the License Agreement; and
(x) all other documents and instruments reasonably required to be
delivered to Seller at or prior to the Closing to evidence the consummation
of the transactions contemplated hereby.
6.5. Governmental Action or Prohibition. The consummation of the
----------------------------------
transactions contemplated by this Agreement shall not have been precluded by any
order or injunction of a court of competent jurisdiction, and there shall not
have been any action taken or any statute, rule or regulation enacted,
promulgated or deemed applicable to the transactions
29
contemplated herein by any governmental entity that makes the consummation of
such transactions illegal.
6.6 Dissenting Stockholders. Holders of not more than ten percent (10%)
-----------------------
of the shares of Seller's common stock issued and outstanding immediately prior
to the Closing Date shall not have perfected dissenters' rights to the extent
such rights are available under the laws of the State of Georgia.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. Except as may be waived
------------------------------------------------
by Purchaser, the obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each of the following conditions:
7.1. Compliance. Seller shall have, or shall have caused to be, satisfied
----------
or complied with and performed in all material respects all terms, covenants,
and conditions of this Agreement to be complied with or performed by Seller on
or before the Closing Date.
7.2. Representations and Warranties. All of the representations and
------------------------------
warranties made by Seller in this Agreement, the exhibits attached hereto and in
all certificates and other documents delivered by Seller pursuant hereto, shall
have been true and correct in all material respects as of the date hereof, and
shall be true and correct in all material respects at the Closing Date with the
same force and effect as if such representations and warranties had been made at
and as of the Closing Date, except for changes permitted or contemplated by this
Agreement and provided that representations and warranties that are confined to
a specified date shall speak only as of such date.
7.3. Consents. Purchaser shall have received the Liquor Consents, except
--------
where the failure to obtain such consents would not materially and adversely
impact Purchaser's ability to operate the Stores after the Closing Date in the
normal course.
7.4. Consulting and Non-Competition Agreement. Xxxxx X. Blazer shall have
----------------------------------------
executed and delivered to Purchaser the Consulting and Non-Competition Agreement
in the form of Exhibit I hereto.
7.5. Closing Deliveries by Seller. Seller shall deliver or cause to be
----------------------------
delivered to Purchaser the following:
(i) a limited warranty deed for each property constituting the
Owned Real Estate in the form of Exhibit J attached hereto;
(ii) a Xxxx of Sale with respect to the Purchased Assets consisting
of tangible personal property in the form of Exhibit K attached hereto;
30
(iii) an assignment of trademarks with respect to such of the
Purchased Assets consisting of registered Intellectual Property in the form
of Exhibit L attached hereto;
(iv) the Assignment and Assumption of Leased Real Estate;
(v) the Assignment and Assumption of Xxxx Leases;
(vi) estoppel certificates, substantially in the form of Schedule
7.5 or otherwise in form and substance reasonably satisfactory to Purchaser
(with the forms of estoppels for CVS and Sports Authority previously
delivered to Purchaser being deemed satisfactory to Purchaser), for the
tenants of Harry's Crossing Shopping Center listed on Schedule 7.5 hereto;
(vii) the Assignment and Assumption of Assumed Contracts;
(viii) the Assignment and Assumption of Other Assumed Liabilities;
(ix) the Escrow Agreement;
(x) a FIRPTA certificate duly executed by Seller;
(xi) the Owner's Title Policies;
(xii) all documents necessary to transfer title to the vehicles
owned by Seller and used in the operation of the Stores;
(xiii) the Closing Statement; and
(xiv) the Supply Agreement;
(xv) the License Agreement; and
(xvi) all other documents and instruments reasonably required to be
delivered to Purchaser at or prior to the Closing to evidence the
consummation of the transactions contemplated hereby.
8. INDEMNIFICATION.
---------------
8.1. Indemnification of Purchaser. Subject to the limitations set forth
----------------------------
in Sections 8.3 and 8.4, Seller shall indemnify and hold Purchaser harmless
from, against, for and in respect of (i) any and all damages, losses, settlement
payments, obligations,
31
liabilities, claims, actions or causes of action and encumbrances suffered,
sustained, incurred or required to be paid by Purchaser, net of any resulting
income tax benefits to Purchaser, (A) because of the breach of any written
representation, warranty, agreement or covenant of Seller contained in this
Agreement or any of the documents delivered to Purchaser at Closing or (B) in
respect of any liability of Seller (other than the Assumed Liabilities) relating
to periods at or prior to the Closing; and (ii) all reasonable costs and
expenses (including, without limitation, attorneys' fees, interest and
penalties) incurred by Purchaser in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the matters
indemnified against in this Section 8.1.
8.2. Indemnification of Seller. Subject to the limitations set forth in
-------------------------
Sections 8.3 and 8.4, Purchaser shall indemnify and hold Seller harmless from,
against, for and in respect of: (i) any and all damages, losses, settlement
payments, obligations, liabilities, claims, actions or causes of action and
encumbrances suffered, sustained, incurred or required to be paid by Seller, net
of any resulting income tax benefits to Seller, (A) because of the breach of any
written representation, warranty, agreement or covenant of Purchaser contained
in this Agreement or any of the documents delivered to Seller at Closing, or (B)
in respect of any liabilities, obligations and responsibilities (whether
contingent or otherwise) arising out of or any way related to the Purchased
Assets or Assumed Liabilities (including, without limitation, the Xxxx Leases
and the Assumed Contracts) to the extent relating to periods from and after the
Closing, whether known or unknown, contingent or absolute or otherwise; and (ii)
all reasonable costs and expenses (including, without limitation, attorneys'
fees, interest and penalties) incurred by Seller in connection with any action,
suit, proceeding, demand, assessment or judgment incident to any of the matters
indemnified against in this Section 8.2.
8.3. Survival of Representations, Warranties and Covenants. Except as
-----------------------------------------------------
modified by the operation of Sections 4.5 and/or 9.1(ii), all representations,
warranties, covenants and agreements made by any party to this Agreement or
pursuant hereto shall be deemed to be material and to have been relied upon by
the parties hereto, and shall survive until the first anniversary of the Closing
Date. Notwithstanding the preceding sentence, all representations and
warranties made in this Agreement shall speak only as of the Closing Date,
except for such representations and warranties that are applicable only as of a
specific date shall speak only as of such date. Notice of any claim, whether
made under the indemnification provisions hereof or otherwise, based on a breach
of a representation, warranty, covenant, agreement or any other right of
indemnification hereunder must be given prior to the one year anniversary of the
Closing Date; and any claim not made within such period shall be of no force or
effect. The representations and warranties hereunder shall not be affected or
diminished by any investigation at any time by or on behalf of the party for
whose benefit such representations and warranties were made, except to the
extent that such claims are based upon facts and circumstances pertaining to
such representations and warranties that are identified by Purchaser in writing
to Seller pursuant to Section 5.13 and deemed thereunder to have been waived.
32
8.4. General Rules Regarding Indemnification. The obligations and
---------------------------------------
liabilities of each indemnifying party hereunder with respect to claims
resulting from the assertion of liability by the other party shall be subject to
the following terms and conditions:
(a) The indemnified party shall give prompt written notice (which in
no event shall exceed 30 days from the date on which the indemnified party
first became aware of such claim or assertion) to the indemnifying party of
any claim which might give rise to a claim by the indemnified party against
the indemnifying party based on the indemnity agreements contained in
Sections 8.1 or 8.2 hereof, stating the nature and basis of said claims and
the amounts thereof, to the extent known;
(b) If any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
liability under the indemnity agreements contained in Sections 8.1 or 8.2
hereof, the action, suit or proceeding shall, at the election of the
indemnifying party, be defended (including all proceedings on appeal or for
review which counsel for the indemnified party shall deem appropriate) by
the indemnifying party. The indemnified party shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the indemnified party's own expense unless the
employment of such counsel and the payment of such fees and expenses both
shall have been specifically authorized in writing by the indemnifying
party in connection with the defense of such action, suit or proceeding.
Notwithstanding the foregoing, (A) if there are defenses available to the
indemnified party which are inconsistent with those available to the
indemnifying party to such extent as to create a conflict of interest
between the indemnifying party and the indemnified party, the indemnified
party shall have the right to direct the defense of such action, suit or
proceeding insofar as it relates to such inconsistent defenses, and the
indemnifying party shall be responsible for the reasonable fees and
expenses of the indemnified party's counsel insofar as they relate to such
inconsistent defenses, and (B) if such action, suit or proceeding involves
or could have an effect on matters beyond the scope of the indemnity
agreements contained in Sections 8.1 and 8.2 hereof, the indemnified party
shall have the right to direct (at its own expense) the defense of such
action, suit or proceeding insofar as it relates to such other matters. The
indemnified party shall be kept fully informed of such action, suit or
proceeding at all stages thereof whether or not it is represented by
separate counsel.
(c) The indemnified party shall make available to the indemnifying
party and its attorneys and accountants all books and records of the
indemnified party relating to such proceedings or litigation and the
parties hereto agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper and adequate
defense of any such action, suit or proceeding.
33
(d) The indemnified party shall not make any settlement of any
claims without the written consent of the indemnifying party.
(e) An indemnified party shall not make any claim hereunder with
respect to any claim, or series of related claims, unless and until it has
incurred damages and expenses of a cumulative aggregate of $50,000 (the
"Basket") and shall thereafter be entitled to make a claim only for amounts
incurred in excess of such Basket; provided, however, that the Basket shall
not be applicable to claims made in respect of the Purchase Price
adjustments contemplated by Sections 1.5 and 2.2.
(f) Except in the case of actual fraud of Seller (as determined by a
court of competent jurisdiction), Purchaser's sole recourse in respect of
amounts for which it is entitled to indemnity under this Section 8 shall be
limited to the Escrowed Funds, and Seller shall not have any liability
other than in respect of Purchaser's claim against the Escrowed Funds in
accordance with the terms of the Escrow Agreement.
(g) Seller's recourse in respect of amounts for which it is entitled
to indemnity under this Section 8 shall be claimed directly against
Purchaser and shall not be made against the Escrowed Funds.
9. MISCELLANEOUS.
-------------
9.1. Termination. This Agreement and the transactions contemplated hereby
-----------
may be terminated at any time on or before the Closing Date:
(i) by mutual consent of Seller and Purchaser;
(ii) subject to the provisions of Section 4.5, by Purchaser if there
has been a material misrepresentation or breach of warranty in the
representations and warranties of Seller set forth herein or if there has
been any material failure on the part of Seller to comply with its
obligations hereunder, and such breach, failure or misrepresentation is not
cured to Purchaser's reasonable satisfaction within ten days after
Purchaser gives Seller written notice identifying such breach, failure or
misrepresentation;
(iii) by Seller if (A) the Board of Directors of Seller, subject to
complying with the terms and conditions of this Agreement, shall have
authorized Seller to enter into a binding written agreement concerning a
transaction that constitutes a Superior Proposal and Seller notifies the
Purchaser in writing that it intends to enter into such agreement,
attaching the most current version of such
34
agreement to such notice, and (B) the Purchaser does not make, within five
business days after receipt of Seller's written notification of its
intention to enter into a binding agreement for a Superior Proposal, an
offer that the Board of Directors of Seller determines in good faith, after
consultation with its financial advisors, is at least as favorable as the
Superior Proposal, taking into account, to the extent relevant, the long
term prospects and interests of Seller and its stockholders;
(iv) by Purchaser if (A) the Board of Directors of Seller sends
Purchaser the written notice described in subsection (iii) above or (B) the
Board of Directors of Seller shall have withdrawn, rescinded or modified in
a manner adverse to Purchaser its approval or recommendation of this
Agreement or the transactions contemplated hereby, or shall have resolved
to do any of the foregoing.
(v) by Seller if there has been a material misrepresentation or
breach of warranty in the representations and warranties of Purchaser set
forth herein or if there has been any material failure on the part of
Purchaser to comply with its obligations hereunder, and such breach,
failure or misrepresentation is not cured to Seller's reasonable
satisfaction within ten days after Seller gives Purchaser written notice
identifying such breach, failure or misrepresentation;
(vi) by either of Seller or the Purchaser if the transactions
contemplated by this Agreement have not been consummated by December 31,
2001, unless the parties otherwise agree or unless such failure of
consummation is due to the failure of the terminating party to perform or
observe the covenants and agreements hereof to be performed or observed by
it at or before the Closing Date; and
(vii) by either of Seller or Purchaser if the transactions
contemplated hereby violate any order, decree, or judgment of any court or
governmental body or agency having competent jurisdiction.
Subject to Section 9.2 below, in the event of the termination of this Agreement
pursuant to this Section 9.1, this Agreement shall forthwith become null and
void and of no further force or effect; provided, however, that the parties
hereto shall remain liable for any breach of this Agreement prior to its
termination.
9.2. Termination Fee. If Seller shall have terminated this Agreement
---------------
pursuant to Section 9.1(iii) or Purchaser shall have terminated this Agreement
pursuant to Section 9.1(iv), Seller shall promptly, but in no event later than
two Business Days after the date of such request, (i) pay Purchaser a fee (the
"Termination Fee") equal to the sum of (x) $950,000 and (y) all actual and
documented out-of-pocket costs and expenses of Purchaser (up to a maximum of
$250,000) incurred in connection with this Agreement and the consummation and
negotiation of the Transactions, including, without limitation, legal,
professional and service fees and expenses, which amount shall be payable in
same day
35
funds. Seller acknowledges that the agreements contained in this Section 9.2 are
an integral part of the transactions contemplated herein, and that, without
these agreements, Purchaser would not enter into this Agreement; accordingly, if
Seller fails to comply with this Section 9.2, and, in order to obtain such
compliance or damages in lieu thereof, Purchaser commences a suit which results
in a judgment against Seller for the Termination Fee, Seller shall pay to
Purchaser its costs and expenses (including attorneys' fees) in connection with
such suit, together with interest on the amount of the Termination Fee, from the
date such payment was required to be made under this Section 9.2 to the date of
payment, at the rate of nine percent (9%) per annum.
9.3. Expenses. Except as otherwise set forth herein, each of the
--------
Purchaser and Seller shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby. Seller shall bear the
policy premiums and related search and examination fees and survey charges
associated with the Owner's Title Policies.
9.4. Transfer Taxes and Recording Fees. All sales, use, transfer and all
---------------------------------
other non-income taxes and any fees incurred in connection with the purchaser
and sale of the Real Estate and the other Purchased Assets (the "Transfer
Taxes") shall be borne by Purchaser. Seller shall file all necessary tax
returns and other documents required to be filed with respect to all such
Transfer Taxes. The parties will cooperate to the extent reasonably necessary
to make such filings or returns as may be required.
9.5. Entire Agreement. This Agreement and the exhibits hereto contain the
----------------
complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings, oral
or written, among the parties with respect to such transactions. Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto.
9.6. Public Announcements. No party to this Agreement shall issue any
--------------------
press release relating to, or otherwise publicly disclose, the transactions
contemplated by this Agreement without the prior approval of the other parties.
Notwithstanding the foregoing, any party may make such disclosure as may be
required by law, provided the disclosing party notifies the other party prior to
its release of the substance of the proposed disclosure (such as the content of
a proposed press release).
9.7. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
9.8. Notices. All notices, demands, requests or other communications that
-------
may be or are required to be given, served or sent by any party to any other
party pursuant to
36
this Agreement shall be in writing and shall be mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by a reputable overnight courier service or by hand delivery or
facsimile transmission, addressed as follows:
(i) If to Seller:
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President
Fax: 000-000-0000
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
(ii) If to Purchaser:
000 X. Xxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Fax: 000-000-0000
with a copy to:
Xxxxxxx & Xxxxxx
000 X. Xxxxxxx, 00/xx/ Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: 000-000-0000
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served, or sent.
Each notice, demand, request or communication that is mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, fax confirmation
sheet or the affidavit of courier or messenger being deemed conclusive evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.
37
9.9. Assignment; Successors and Assigns. This Agreement may not be
----------------------------------
assigned by either of the parties hereto without the written consent of all the
other parties; provided, however, that the Purchaser shall be entitled to assign
this Agreement to any subsidiary of Whole Foods Market, Inc. so long as the
Purchaser remains liable for the obligations of Purchaser hereunder. Subject to
the preceding sentence, this Agreement and the rights, interests and obligations
hereunder shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
9.10. Waiver and Other Action. This Agreement may be amended, modified,
-----------------------
or supplemented only by a written instrument executed by the parties against
which enforcement of the amendment, modification or supplement is sought.
9.11. Severability. If any provision of this Agreement is held to be
------------
illegal, invalid, or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
9.12. Real Estate Reporting Person. Title Company is hereby designated
----------------------------
the "real estate reporting person" for purposes of Section 6045 of title 26 of
the United States Code and Treasury Regulation 1.6045-4, as applicable. Any
instructions or settlement statement prepared by Title Company shall so indicate
that the Title Company is the real estate reporting person. Upon the
consummation of the transactions contemplated by this Agreement, Title Company
shall file IRS Form 1099-S information return and send the statement to Seller
as required under the aforementioned statutes and regulations.
9.13. Third-Party Beneficiaries. This Agreement and the rights,
-------------------------
obligations, duties and benefits hereunder are intended for the parties hereto,
and no other person or entity shall have any rights, obligations, duties and
benefits pursuant hereto.
9.14. Mutual Contribution. The parties to this Agreement and their
-------------------
counsel have mutually contributed to its drafting. Consequently, no provision
of this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
9.15. Remedies. No right, remedy or election given by any term of this
--------
Agreement shall be deemed exclusive but each shall be cumulative with all other
rights, remedies and elections available at law or in equity; provided, however,
that the sole and exclusive remedy of any party hereto with respect to any
action, breach, default or other
38
matter for which a purchase price adjustment is available pursuant to Section
2.2 shall be for such party to proceed in accordance with the provisions of
Section 2.2.
9.16. Governing Law. This Agreement shall be governed by, and construed
-------------
in accordance with, the laws of the State of Delaware.
9.17. Jurisdiction; Service of Process. Any action or proceeding seeking
--------------------------------
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Delaware, County of New Castle, or in the United States District Courts
located in Wilmington, Delaware if they have or can acquire jurisdiction, and
each of the parties consents to the jurisdiction of such courts (and the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred
to in the preceding sentence may be served on any party anywhere in the world.
9.18. Disclosure Generally. If and to the extent any information required
--------------------
to be furnished in any Schedule is contained in this Agreement or in any
Schedule attached hereto, such information shall be deemed to be included in all
the Schedules in which the information is required to be included. The
inclusion of any information in any Schedule attached hereto shall not be deemed
to be an admission or acknowledgment by Seller, in and of itself, that such
information is material or outside the ordinary course of business of Seller.
9.19. Property Documents / Books and Records. By providing copies of the
----------------------------------------
Property Document and the Books and Records to Purchaser, Seller is not making
any representations or warranties, implied or otherwise, as to the accuracy of
the factual information provided or the conclusions formed by the consultants or
Seller personnel who prepared such items. Furthermore, Seller is making no
representations or warranties as to the skill and care taken by the consultants
or Seller personnel in preparing the such items. Seller will not be responsible
for conditions or consequences arising from relevant facts that were concealed,
withheld or not fully disclosed to or by the consultants, any regulatory or
governmental agency, persons interviewed or Seller personnel as part of the
preparation of such items. Purchaser also acknowledges that the facts and
conditions referenced in such items may change over time and the conclusions and
recommendations set forth therein are applicable only to the facts and
conditions as described in such items. Seller shall have no direct or indirect
liability to Purchaser or any other person with respect to such items.
9.20. Time of Essence. Time is of the essence in complying with the terms,
---------------
conditions and agreements of this Agreement.
9.22. Risk of Loss. As of the time of the Closing, the risk of loss with
------------
respect to the Owned Real Estate passes to the Purchaser.
39
[Signatures on Following Page]
40
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Whole Foods Market Group, Inc.
By: /s/ XXX SUD
-----------------------------------------
Name: Xxx Sud
---------------------------------------
Title: Vice President
--------------------------------------
Harry's Farmers Market, Inc.
By: /s/ Xxxxx X Xxxxxx
-----------------------------------------
Name: Xxxxx X. Blazer
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
Karalea, Inc.
By: /s/ Xxxxx X Xxxxxx
-----------------------------------------
Name: Xxxxx X. Blazer
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
Marthasville Trading Company
By: /s/ Xxxxx X Xxxxxx
-----------------------------------------
Name: Xxxxx X. Blazer
---------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
41
List of Exhibits
Exhibit A Voting Agreement
Exhibit B Supply Agreement
Exhibit C License Agreement
Exhibit D Escrow Agreement
Exhibit E-1 to E-3 Assignment and Assumption of Leased Real Estate
Exhibit F Assignment and Assumption of Xxxx Leases
Exhibit G Assignment and Assumption of Assumed Contracts
Exhibit H Assignment and Assumption of Other Assumed Liabilities
Exhibit I Consulting and Non-Competition Agreement
Exhibit J Form of warranty deed
Exhibit K Xxxx of Sale
Exhibit L Assignment of Intellectual Property
42
Exhibit A
VOTING AGREEMENT
THIS VOTING AGREEMENT, dated as of August 9, 2001 ("Voting Agreement"), is
----------------
by and between Whole Foods Market Group, Inc., a Delaware corporation
("Purchaser"), and Xxxxx X. Blazer ("Stockholder").
--------- -----------
RECITALS
WHEREAS, concurrent with the execution of this Voting Agreement, Purchaser
and Harry's Farmers Market, Inc., a Georgia corporation (the "Company"), are
-------
parties to an Asset Purchase Agreement, dated of even date herewith (as amended
from time to time, the "Purchase Agreement"), pursuant to which Purchaser is
------------------
purchasing certain assets, and assuming certain liabilities, of the Company and
its subsidiaries (the "Purchase");
WHEREAS, the Stockholder is the record or beneficial owner of shares of
Class A and Class B common stock of the Company (the "Shares") in the amounts
------
set forth on the signature page hereof; and
WHEREAS, as an inducement and a condition to entering into the Purchase
Agreement, Purchaser desires that the Stockholder agree, and the Stockholder is
willing to agree, to enter into this Voting Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Purchaser and the Stockholder, intending to be legally bound,
hereby agree as follows:
1. Certain Definitions. In addition to the terms defined elsewhere
-------------------
herein, capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Purchase Agreement. For purposes of this
Voting Agreement:
(a) "Affiliate" means, as to any specified Person, (i) any
---------
stockholder, equity holder, officer, or director of such Person and their
family members or (ii) any other Person which, directly or indirectly,
controls, is controlled by, employed by or is under common control with,
any of the foregoing. For the purposes of this definition, "control" means
the possession of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
(b) "Beneficially Own" or "Beneficial Owner" or "Beneficial
---------------- ---------------- ----------
Ownership" with respect to any securities means having "beneficial
---------
ownership" of such securities as determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including pursuant to any agreement, arrangement or understanding, whether
or not in writing. Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a Person shall include
securities Beneficially Owned by all other Persons with whom such Person
would constitute a "group" as within the meanings of Section 13(d)(3) of
43
the Exchange Act.
(c) "Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
2. Disclosure. The Stockholder hereby agrees to permit the Company and
----------
Purchaser to publish and disclose in the Proxy Statement (including all
documents and schedules filed with the SEC), and any press release or other
disclosure document which Purchaser and the Company reasonably determine to be
necessary or desirable in connection with the Purchase and any transactions
related thereto, the Stockholder's identity and ownership of the Shares and the
nature of the Stockholder's commitments, arrangements and understandings under
this Voting Agreement.
3. Voting of Company Stock. The Stockholder hereby agrees that, during
-----------------------
the period commencing on the date hereof and continuing until the first to occur
of (a) the Closing or (b) the termination of the Purchase Agreement in
accordance with its terms (the "Termination Date"), at any meeting of the
----------------
holders of the Shares, however called, or in connection with any written consent
of the holders of the Shares, the Stockholder shall vote (or cause to be voted)
the Shares held of record or Beneficially Owned by him and to which he has the
right to vote or to direct the vote, whether heretofore owned or hereafter
acquired: in favor of approval of the Purchase, adoption of the Purchase
Agreement and any actions required in furtherance thereof and hereof; provided,
however, that the terms of the Purchase Agreement shall not have been amended to
reduce the Purchase Price to less than $35 million or to impose any specific
obligation on the Stockholder that is not imposed uniformly on all stockholders
of Seller, except as the Stockholder has agreed in writing. The Stockholder
agrees that the obligations under this Voting Agreement are unconditional and
will remain in full force and effect notwithstanding that the Company may have
received an Acquisition Proposal or that the Board of Directors of the Company
may have withdrawn or amended its recommendation and approval of the Purchase.
Furthermore, the Stockholder will not enter into any agreement or understanding
with any Person the effect of which would be inconsistent with or in violation
of any provision contained in this Section 3.
4. Covenants, Representations and Warranties of the Stockholder. The
------------------------------------------------------------
Stockholder hereby represents and warrants to, and agrees with, Purchaser as
follows:
(a) The Stockholder is the owner or the Beneficial Owner of the
number of Shares set forth on the signature page hereto, with no
limitations, qualifications or restrictions on his rights under the Shares
other than as set forth on the signature page hereto and subject to
applicable securities laws and the terms of this Voting Agreement.
(b) The Stockholder has the legal capacity, power and authority to
enter into and perform all of the Stockholder's obligations under this
Voting Agreement. The execution, delivery and performance of this Voting
Agreement by the Stockholder will
44
not violate any other agreement to which the Stockholder is a party
including, without limitation, any voting agreement, stockholders
agreement, voting trust, trust or similar agreement. This Voting Agreement
has been duly and validly executed and delivered by the Stockholder and
constitutes a valid and binding agreement enforceable against the
Stockholder in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which the
Stockholder is a trustee whose consent is required for the execution and
delivery of this Voting Agreement or the consummation by the Stockholder of
the transactions contemplated hereby.
(c) The Stockholder understands and acknowledges that Purchaser is
entering into the Purchase Agreement in reliance upon the Stockholder's
execution and delivery of this Voting Agreement.
5. Miscellaneous.
-------------
(a) Entire Agreement. This Voting Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
(b) Certain Events. The Stockholder agrees that this Voting
Agreement and the obligations hereunder shall attach to the Stockholder's
Shares and shall be binding upon any Person to which legal or Beneficial
Ownership of such Shares shall pass, whether by operation of law or
otherwise, including without limitation, the Stockholder's heirs,
guardians, administrators or successors. Notwithstanding any such transfer
of Shares, the transferor shall remain liable for the performance of all
obligations under this Voting Agreement.
(c) Assignment. This Voting Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of
Purchaser, in the case of an assignment by the Stockholder, and the
Stockholder, in the case of any assignment by Purchaser; provided that
Purchaser may assign, in its sole discretion, its rights and obligations
hereunder to any direct or indirect wholly owned subsidiary of Purchaser,
but no such assignment shall relieve Purchaser of its obligations hereunder
if such assignee does not perform such obligations.
(d) Amendment and Modification. This Voting Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by
the parties hereto affected by such amendment.
(e) Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such a manner
as to be effective and valid under
45
applicable law, but if any provision or portion of any provision of this
Voting Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision of this Voting Agreement in such
jurisdiction, and this Voting Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(f) Specific Performance. The parties hereto agree, recognize and
acknowledge that a breach by either of them of any covenants or agreements
contained in this Voting Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for money
damages, and therefore each of the parties hereto agrees that in the event
of any such breach the aggrieved party shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(g) Remedies Cumulative. All rights, powers and remedies provided
under this Voting Agreement or otherwise available in respect hereof at law
or in equity shall be cumulative and not alternative, and the exercise of
any such rights, powers or remedies by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by
such party.
(h) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Voting Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and
any custom or practice of the parties at variance with the terms hereof,
will not constitute a waiver by such party of its right to exercise any
such or other right, power or remedy or to demand such compliance.
(i) No Third Party Beneficiaries. This Voting Agreement is not
intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.
(j) Governing Law. This Voting Agreement will be governed and
construed in accordance with the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof.
(k) Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this Voting Agreement may be brought against any of the parties in the
courts of the State of Delaware, County of New Castle, or in the United
States District Courts located in Wilmington, Delaware if they have or can
acquire jurisdiction, and each of the parties consents to the jurisdiction
of such courts (and the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any
action or proceeding referred to in the preceding sentence
46
may be served on any party anywhere in the world.
(l) Counterparts. This Voting Agreement may be executed in
counterparts, each of which will be considered one and the same Voting
Agreement and will become effective when such counterparts have been signed
by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
[Signatures on Following Page]
47
IN WITNESS WHEREOF, Purchaser and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
Whole Foods Market Group, Inc.
By:__________________________________
Name: _______________________________
Title: ______________________________
_____________________________________
Stockholder Name: Xxxxx X. Blazer
No. of Class A Common Shares: 38,000: all of which
are owned by the Stockholder's wife and of which
the Stockholder has no right to vote or direct the
vote.
No. of Class B Common Shares: 2,050,701: 2,049,400
of which are owned by Xxxxx Xxxxxx, Inc., a
company of which the Stockholder is the sole
shareholder and director and therefore has the
right to direct the vote; and 1,301 of which are
owned by the Stockholder and of which he has the
right to vote.
48
Exhibit B
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is made this __ day of ____, 2001
---------
(the "Effective Date"), by and between [new name of company after closing], a
--------------
Georgia corporation ("HFM"), and Whole Foods Market Group, Inc., a Delaware
---
corporation ("Supplier").
--------
WHEREAS, Supplier and HFM have entered into a certain Asset Purchase
Agreement dated as of August 8, 2001 (the "Purchase Agreement"; terms not
------------------
otherwise defined herein shall have the meaning ascribed to them in the Purchase
Agreement);
WHEREAS, pursuant to the Purchase Agreement, Supplier is purchasing from
HFM certain assets including, but not limited to, assets used in the supply of
products to certain retail stores owned by HFM; and
WHEREAS, as a condition to HFM entering into the Purchase Agreement,
Supplier has agreed to supply HFM with certain food, beverage, floral and other
retail products described on Exhibit A attached hereto and incorporated herein
---------
by this reference (the "Products") under the terms and conditions of this
--------
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, HFM and Supplier hereby agree as follows:
1. Products. During the first year of this Agreement, Supplier shall
--------
supply to HFM the Products in accordance with the supply and inventory systems
and schedules (the "Systems") utilized by HFM in supplying the Excluded Stores
-------
as of the Effective Date. During the first year of this Agreement, the Products
and the supply and distribution schedules shall not be substituted, modified or
otherwise changed, in any material respect, without first obtaining HFM's
written approval of such change, such approval not to be unreasonably withheld.
During the second and third years of this Agreement, if the respective options
of HFM are exercised as described below, Supplier shall supply Products to HFM
in accordance with such supply and inventory systems as Supplier elects to
utilize in its sole discretion, which shall continue to provide a reasonable
method of supply for HFM in accordance with the intent of this Agreement.
2. Term. This Agreement shall be in effect for a term of one (1) year
-----
from the Effective Date ("Term"). However, following each of the first two
----
years of this Agreement, and provided HFM is not then in default hereunder, HFM
may, in its sole discretion, extend the term of this Agreement for one (1)
additional year. The extension of this Agreement by HFM shall be sent to
Supplier in writing no less than 30 days prior to the end any term. This
Agreement may also be terminated earlier pursuant to the provisions of this
Agreement. Notwithstanding anything contained herein, the volume of Products
ordered and the number of orders placed during the Term shall be determined
solely by orders placed pursuant to Section 3.
---------
3. Order and Delivery.
-------------------
49
3.1 Orders shall be placed by HFM and sent electronically or by
facsimile to Supplier at the address set forth below (the "Order"). Acceptance
-----
of any Order is expressly limited to the terms thereof and HFM agrees that the
return of any products will be solely due to defects of such products. HFM
shall have no right for chargebacks to the Supplier, except in the case of
product defects.
3.2 HFM shall be permitted to utilize Supplier's computerized
inventory replenishment system ("IRS") for all purposes provided by IRS,
---
including but not limited to the placing of Orders pursuant to this Agreement
and the utilization of the theoretical gross margin tool produced by IRS, as
well as the computerized report manager system (the "Report Manager") and all
related programming. During the term of this Agreement, HFM shall be permitted
to utilize all upgrades, improvements or changes to IRS, the Report Manager and
all related programming. In addition, Supplier agrees to use its best efforts
to continue to support and provide, consistent with normal practice, (i) the
hardware and communications infrastructure to allow HFM access; (ii) the
recording, accumulation, storage and archiving of data necessary to report on
and provide an audit trail of HFM's use of the applications; and (iii) HFM
reasonable access to the systems. Following the first year of this Agreement,
Supplier shall have no obligation to continue supporting or maintaining IRS, the
Report Manager or other related programming described in this Section 3.2.
However, in the event Supplier decides not to continue such support or
maintenance, it shall provide HFM reasonable notice of such discontinuation and
allow HFM, at its sole cost and expense, to continue to utilize, support,
maintain and improve such systems and shall provide HFM reasonable access to the
hardware and software necessary for the continued operations thereof.
3.3 Products will be shipped F.O.B. Supplier's commissary. The risk
of loss or damage in transit shall be upon HFM. Supplier shall, in the event of
a delay or threat of delay due to any cause in the production or delivery of the
Products hereunder, immediately notify HFM and shall include with such notice
all relevant information with respect to such delay or threatened delay,
including, but not limited to, in the case of actual delay, Supplier's good
faith estimate of when the Products will be available.
4. Price. The prices of the Products shall be determined as is described
------
on Exhibit A. However, in no event shall HFM be charged for increased costs
other than for normal price increases as may be charged by the provider of the
raw materials, goods and other items being received by Seller, prior to
manufacture or delivery to HFM.
5. Payment. Supplier shall invoice HFM for all Products delivered under
--------
an Order (the "Invoice"). Each Invoice is payable by HFM within fourteen (14)
-------
days from the date of the Invoice.
6. Quality Control.
----------------
6.1 Packaging. During the first year of this Agreement, the Products
---------
and all packaging used in connection with the Products ("Packaging Material")
------------------
shall be of a consistent and high quality which conform to the standards
developed by HFM or developed by Supplier and approved by HFM. Supplier will use
such packaging for the Products as is
50
furnished by HFM or is in the inventory purchased by Supplier in connection with
the Purchase Agreement. Following the first year of this Agreement, to the
extent the Packaging Material is not furnished by HFM, the Supplier shall be
entitled to reasonably change the Packaging Material in a manner consistent with
the quality of packaging utilized by Supplier in its operations.
6.2 Inspection. During the first year of this Agreement, Supplier
----------
will cooperate with HFM, at its sole cost and expense, to permit inspections of
Supplier's facilities during the Term to monitor the quality of Products offered
by Supplier, provided HFM gives Supplier 24 hours prior notice of such
inspection and such inspections do not interfere with Supplier's business, as
reasonably determined by Supplier. Supplier shall also provide HFM with
reasonable access to its quality assurance data documentation. Following the
first year of this Agreement, HFM shall be entitled to no more than one such
inspection per calendar quarter.
6.3 Transition Support. During the first six months of the term of
------------------
this Agreement, HFM will make Xxxxxx Xxxxxxxxxx available to Supplier for two
days per week during normal business hours to consult with, and to assist and
support, Supplier in connection with the performance of its duties hereunder. In
the event that Xx. Xxxxxxxxxx is no longer an employee of, or consultant to,
HFM, then HFM will arrange for other employees reasonably acceptable to Supplier
to be available to Supplier as aforesaid.
7. Representations and Warranties of Supplier. Supplier represents and
------------------------------------------
warrants, which warranties and representations will survive the Term:
7.1 that the Products, including food articles, food ingredients,
food packaging and food labeling relating to or comprising the Products or any
part thereof that is supplied by Supplier and delivered, sold or transferred to
HFM hereunder shall be manufactured, stored and delivered in full compliance
with all applicable federal, state and local statutes, rules and regulations
including but not limited to the rules and regulations of the U.S. Food and Drug
Administration (the "Regulations");
-----------
7.2 that the Products shall be manufactured, stored and delivered
in accordance with appropriate "Good Manufacturing Practices" or similar
practices that may be promulgated under the Regulations as applicable;
7.3 that the Products shall not be adulterated or misbranded within
the meaning of the Regulations;
7.4 that the Products shall not be a food product which may not,
under the Regulations, be introduced into interstate commerce except as provided
therein; and
7.5 that Supplier is free to enter into this Agreement, that
Supplier's execution of this Agreement has been duly approved by all applicable
corporate procedures, that this Agreement constitutes a legal, valid and binding
obligation of Supplier, and that to Supplier's knowledge this Agreement will not
violate the rights of any third party.
51
Except as specifically set forth above, Supplier makes no warranty regarding the
Products and any implied or statutory warranties not specifically provided
herein are expressly denied. Payment for, inspection of, or receipt of
Products by HFM shall not constitute a waiver of any breach or warranty.
8. Representations and Warranties of HFM. HFM represents and warrants,
--------------------------------------
which warranties and representations will survive the Term , that HFM is free to
enter into this Agreement, that HFM's execution of this Agreement has been duly
approved by all applicable corporate procedures, that this Agreement constitutes
a legal, valid and binding obligation of HFM, and that to HFM's knowledge this
Agreement will not violate the rights of any third party. Acceptance of payment
for Products by Supplier shall not constitute a waiver of any breach or
warranty.
9. Widescale Defects/Recall.
-------------------------
9.1 Whenever Supplier becomes aware that any ingredient or component
of a Product covered by this Agreement is or may become harmful to persons or
property or that a Product is mislabeled, Supplier shall immediately give notice
thereof to HFM and Supplier shall provide all relevant information with respect
thereto.
9.2 In the event it is deemed necessary by HFM and Supplier to recall
any quantity of the Product, from any store of HFM or from any consumer, both
parties agree to take such reasonable steps necessary to protect the interests
of the public and to comply diligently with all product recall procedures
established by the Regulations.
9.3 The parties agree to bear equally all cost and expenses incurred
by the parties in complying with the foregoing recall procedures, unless such
recall is the result of the sole negligence of one of the parties. In the event
a party fails or refuses to comply with the recall of the Product upon the
reasonable request of the other party, the requesting party shall be authorized
to take such action as it deems necessary to recall the Product, and the non-
requesting party shall reimburse the requesting party for its costs and expenses
incurred in such recall procedure. Any such action taken by the requesting party
shall not relieve the non-requesting party of its obligations or liability
hereunder.
10. Insurance. Supplier agrees to maintain during the Term, general
----------
liability insurance, including product liability coverage, in minimum amounts of
$1,000,000.00 per occurrence for damage, injury and/or death to persons and
$1,000,000.00 per occurrence for damage and/or injury to property. Supplier
further agrees to require all of its delivery personnel to be licensed to drive,
whether they are employees or independent contractors. All policies of liability
insurance required to be effected by Supplier shall cover Supplier's employees,
agents, and independent contractors and shall include HFM as an additional
insured. Upon execution of this Agreement, Supplier shall promptly provide HFM
with certificates of insurance evidencing such coverage, and each certificate
shall indicate that the coverage represented thereby shall not be canceled nor
modified until at least thirty (30) days prior notice has been given to HFM.
11. Default and Termination.
------------------------
52
11.1 In the event either party:
(a) breaches any term or condition of this Agreement that cannot
be cured within fifteen (15) days following receipt of notice of such breach; or
(b) abuses or misrepresents its status as a supplier and/or
seller of any Product to the detriment of the other party, or
(c) becomes the subject of any proceeding under the Bankruptcy
Act, becomes insolvent or any assignment is made for the benefit of creditors or
a trustee is appointed for all or any portion of the party's assets, or
(d) fails to comply with any Regulation,
then the non-breaching party, in its sole discretion, may terminate this
Agreement with fifteen (15) days written notice to the breaching party.
Additionally, this Agreement may be terminated:
(e) by HFM upon 30 days' prior written notice given to Supplier
at any time (it being understood that such notice shall contain an undertaking
by HFM to purchase, on the date of termination, any excess inventory and
packaging materials produced or held exclusively for HFM);
(f) by Supplier upon 15 days prior written notice in the event
that HFM is in material breach of its obligations under the Purchase Agreement
which cannot be cured within fifteen (15) days following receipt of notice of
such breach, or, unless there shall be a change of control of HFM. if HFM's
principal stockholder is in material breach under the related Consulting and
Non-Competition Agreement and such breach cannot be cured within fifteen (15)
days following receipt of notice of such breach.
11.2 Notwithstanding anything to the contrary, in the event the party's
breach is for noncompliance with the Regulations, termination shall be effective
immediately.
11.3 The failure to terminate the Agreement upon the occurrence of one
or more of these events of default by a party shall not constitute a waiver or
otherwise affect the right of the non-breaching party to terminate the Agreement
as a result of a continuing or subsequent failure or refusal by the breaching
party to comply with any of such obligations. Failure by the non-breaching party
to exercise any of its rights or remedies hereunder or to insist on strict
compliance with any of the terms of this Agreement shall not constitute a waiver
of any of the terms or conditions of this Agreement with respect to any other or
subsequent breach nor shall it constitute a waiver by the non-breaching party of
its rights at any time thereafter to require strict compliance with the terms of
this Agreement.
11.4 Upon termination, HFM shall pay Supplier any outstanding
undisputed Invoices and shall use their commercially reasonable best efforts to
resolve such disputed invoices as promptly as practicable.
12. Confidentiality. Each party acknowledges that during the
----------------
53
course of carrying out this Agreement, it may receive confidential and
proprietary information related to the other party's business, including,
without limitation, recipes and formulations created or provided by the other
party ("Confidential Information"). Confidential Information includes any
------------------------
information, designs, data or know-how that a party has designated as
proprietary and/or confidential or that, by the nature of the circumstances
surrounding the disclosure, ought to be treated as proprietary and/or
confidential; provided, however, that any information which is otherwise in the
public domain shall not be deemed confidential. Each party acknowledges that
such Confidential Information is the sole and exclusive property of the other
party and undertakes to retain in confidence all Confidential Information. Each
party's obligations under this Section 12 shall survive expiration or
termination of this Agreement and any amendments thereto.
13. Indemnity.
----------
13.1 Supplier agrees to indemnify and hold HFM, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liabilities, suits at law or in equity, costs
and expenses, including reasonable attorney's fees, resulting from (a) injury,
illness and/or death caused, in whole or in part, by contact with, use and/or
consumption of the Products, unless (and then only to the extent) such injury,
illness and/or death is caused by the negligence or misconduct of HFM and (b)
breach of any of Supplier's representations and warranties. In the event of any
claim, threatened claim, or notification that may be the subject of
indemnification provided for in this Section, HFM will give Supplier prompt
written notification thereof and, to the extent the interests of the parties
hereto are not adverse to one another, provide Supplier such reasonable
assistance in the response and prosecution of any defense as Supplier may
request, at Supplier's expense. Upon HFM's tendering any suit to Supplier,
Supplier shall defend the same at its sole cost and expense. If Supplier fails
to assume such defense, HFM may defend the action in the manner it deems
appropriate, and Supplier shall pay to HFM all costs, including reasonable
attorneys' fees, incurred by HFM in effecting such defense, in addition to any
sum which HFM may pay by reason of any settlement or judgment against HFM. The
provisions of this Section 13.1, and the indemnity hereunder, shall survive this
Agreement and any performance hereunder.
13.2 HFM agrees to indemnify and hold Supplier, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liabilities, suits at law or in equity, costs
and expenses, including reasonable attorney's fees, resulting from (a) injury,
illness and/or death caused, in whole or in part, by contact with, use and/or
consumption of the Products, but only to the extent such injury, illness and/or
death is caused by the negligence or misconduct of HFM and (b) the breach of any
of HFM's representations and warranties. In the event of any claim, threatened
claim, or notification that may be the subject of indemnification provided for
in this Section, Supplier will give HFM prompt written notification thereof and,
to the extent the interests of the parties hereto are not adverse to one
another, provide HFM such reasonable assistance in the response and prosecution
of any defense as HFM may request, at HFM's expense. Upon Supplier's tendering
any suit to HFM, HFM shall defend the same at its sole cost and expense. If HFM
fails to assume such defense, Supplier may defend the action in the manner it
deems appropriate, and HFM shall pay to Supplier all costs, including reasonable
attorneys' fees, incurred by Supplier in effecting such defense, in addition to
any sum which Supplier may pay by reason of any settlement or judgment against
Supplier. The provisions of this Section 13.2, and the indemnity hereunder,
shall survive this Agreement and any performance hereunder.
14. Miscellaneous Provisions.
-------------------------
14.1 Independent Contractor Relationship. Supplier and HFM are
------------------------------------
independent contracting parties, and this Agreement does not create the
relationship of principal and agent, partners, joint ventures or
54
employer and employee between HFM and Supplier. Supplier shall have no authority
to bind or otherwise obligate HFM in any manner nor shall Supplier represent to
anyone that it has a right to do so.
14.2 Severability. If any provision of this Agreement is held to
-------------
be illegal, invalid, or unenforceable, such provision shall be fully severable,
and this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible that is
legal, valid and enforceable.
14.3 Entire Agreement. This Agreement and the exhibits hereto contain
-----------------
the complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings, oral
or written, among the parties with respect to such transactions. Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto.
14.4 Amendments in Writing. Neither the Agreement nor any of its
----------------------
provisions may be waived, modified or amended except by an instrument in writing
signed by the parties to this Agreement.
14.5 Assignment. This Agreement may not be assigned by the
-----------
Supplier without the written consent of HFM; provided, however, that the
Supplier shall be entitled to assign this Agreement to any subsidiary of
Supplier so long as the Supplier remains liable for the obligations of Supplier
hereunder. Subject to the preceding sentence, this Agreement and the rights,
interests and obligations hereunder shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
14.6 Applicable Law. This Agreement shall be governed by, and construed
---------------
in accordance with, the laws of the State of Delaware.
14.7 Force Majeure. Neither party shall be liable for defaults or delays
--------------
or non-performance of any covenant, agreement, work, service, or other act
required under this Agreement to be performed by such party, if such delay or
hindrance is due to strikes, lockouts, failure of power or other utilities,
injunction or other court or administrative order, governmental law or
regulations which prevent or substantially interfere with the required
performance, condemnations, riots, insurrections, martial law, civil commotion,
war, fire, flood, earthquake., or other casualty, acts of God, or other causes
not within the control of such party. The performance of any covenant,
agreement, work, service, or other act shall be excused for the period of delay
and the period for the performance of the same shall be extended by such period.
14.9 Remedies. No right, remedy or election given by any
---------
55
term of this Agreement shall be deemed exclusive but each shall be cumulative
with all other rights, remedies and elections available at law or in equity.
Except for third party claims described in Section 13 hereof, the sole remedy
available to a non-breaching party arising from the breach of this Agreement
shall be termination of this Agreement and recovery of any out-of-pocket
expenses of the non-breaching party, after reasonable mitigation of damages.
Other than for damages or claims as relate to injury, illness and/or death
caused, in whole or in part, by contact with, use and/or consumption of the
Products, in no event shall any party be liable for consequential damages, lost
profits, punitive damages or other speculative damages.
14.10 Notices. All notices, demands, requests or other communications
-------
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by a reputable overnight courier service or by hand
delivery or facsimile transmission, addressed as follows:
(i) If to HFM:
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President
Fax: 000-000-0000
with a copy to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Attn: Xxxx X. Xxxxxx, Esq.
(ii) If to Purchaser: 000 X. Xxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
with a copy to:
Xxxxxxx & Xxxxxx
000 X. Xxxxxxx, 00/xx/ Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: 000-000-0000
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served, or sent.
Each notice, demand, request or communication that is mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, fax confirmation
sheet or the affidavit of courier or messenger being deemed conclusive evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.
56
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
[new name] [WHOLE FOODS MARKET GROUP, INC.]
By___________________ By_____________________________
Name_________________ Name___________________________
Title__________________ Title___________________________
57
Exhibit C
LICENSE AGREEMENT
This License Agreement ("Agreement") is made effective as of this ____ day
of __________, 2001, by and between Whole Foods Market IP, Inc., a Delaware
corporation ("Licensor"), and [new name of Seller], a Georgia corporation
("Licensee").
WHEREAS, an affiliate of Licensor has purchased certain assets of Licensee,
including intellectual property assets, as further described in that certain
Asset Purchase Agreement, dated as of August 9, 2001 (the "Purchase Agreement");
and
WHEREAS, the assets purchased by Licensor under the Purchase Agreement do
not include six small format "Harry's in a Hurry" retail food stores (the
"Excluded Stores"); and
WHEREAS, in order to operate, expand, sell, transfer or otherwise dispose
of the Excluded Stores, Licensee will require the use of the trademarks, service
marks, logos, copyrights, proprietary information and similar intellectual
property described on Schedule I hereto (collectively, the "Licensed Marks"),
all of which has been assigned by Licensor's affiliate to Licensor; and
WHEREAS, the Purchase Agreement contemplates that the parties will enter
into this Agreement as a condition precedent to the closing of the transactions
contemplated thereunder;
Now, therefore, in consideration of the mutual agreements herein contained,
it is agreed as follows:
1. SCOPE OF LICENSE
----------------
1.1. Grant. Subject to Section 1.2, Licensor hereby grants to Licensee a
-----
fully paid, royalty free right and license to use the Licensed Marks throughout
the world in connection with (a) the advertising, promotion, franchising and
day-to-day operation of the Excluded Stores and any new retail locations
operated by Licensee or any sublicense or franchisee in the same or
substantially similar manner and format as the Excluded Stores (the "New
Stores", together with the Excluded Stores, the "Licensee Stores"), (b) services
utilizing the Licensed Marks and provided by Licensee in connection with the
operation of the Licensee Stores ("Services"), and (c) goods utilizing the
Licensed Marks and manufactured or sold by Licensee in connection with the
operation of the Licensee Stores ("Goods") (collectively, the "License").
1.2. Use by Licensor. Licensee understands and acknowledges that,
---------------
pursuant to the Purchase Agreement, Licensor has purchased intellectual property
assets (such as the
58
"Harry's Farmers Market" tradename) that are similar to the Licensed Marks and
intends to use such intellectual property assets in the operation of Licensor's
business. Licensor hereby represents that it will not use the specific "Harry's
in a Hurry" tradename in its business or on or in connection with the operation
of a retail food store located within one hundred (100) miles of any existing
Licensee Store. Except as aforesaid, nothing herein is intended to restrict in
any manner the operation of Licensor's business.
1.3. Sublicensing and Assignment Prohibited.
--------------------------------------
(a) Subject to paragraph 1.3(b) below, the License is personal to
Licensee, and Licensee shall have no right to assign the license granted
hereunder to any person or entity.
(b) Notwithstanding paragraph 1.3(a) above, the transfer of the
License in conjunction with the transfer of the Licensee Stores, all or
substantially all of assets of the Licensee Stores (or such of the Licensee
Stores which have not been, or not scheduled to be, closed), or of the
capital stock of Licensee shall not be deemed to be in violation of this
Section 1.3; provided, that the transferee of the License shall have agreed
to be bound by the terms and provisions of this Agreement.
2. LICENSEE OPERATIONS
-------------------
2.1. General. Licensee will conduct its operations of the Licensee
-------
Stores in a manner such that it will not detract from nor bring into disrepute
the Licensed Marks and the goodwill associated with the Licensed Marks. Except
as specifically provided herein, nothing in this Agreement or the License
granted herein shall be construed to limit the types of Goods and Services
offered by Licensee in connection with its operation of the Licensee Stores;
provided, however, Licensee's offering of Goods and Services not offered through
the Licensee Stores as of the date of this Agreement shall not materially breach
the terms of this Agreement.
2.2. No Relationship to Licensor's Business. Licensee shall not indicate
--------------------------------------
to customers, vendors or other third parties that it is under common ownership
or operation with the business operated by Licensor. Further, Licensee will
ensure that Licensor does not become subject to any claims arising from
Licensee's operation of, and use of the Licensed Marks in, the Licensee Stores.
2.3. Product Quality. Licensee agrees that its Services and Goods shall
---------------
be of such high standards and quality as to protect and enhance the prestige of
the Licensed Marks and the goodwill pertaining thereto; that such Services and
Goods shall be manufactured, packaged, offered, provided, performed, sold and
distributed in accordance with all applicable, federal, state and local laws and
regulations; and that the policy of
59
performance of such Services and of completion and delivery of such Goods by
Licensee shall be one requiring high standards and shall in no manner reflect
adversely upon the goodwill of the Licensed Marks. Licensor acknowledges that
Licensee's current operation of the Licensee Stores meets the requirements of
this Section 2.3.
2.4. Quality Control. If Licensor determines in good faith that Licensee
---------------
has failed to meet the quality control standards and procedures described in
Section 2.3, then Licensor shall furnish Licensee written notice specifying in
reasonable detail the respects in which Licensee has failed, and if reasonably
necessary, specifying steps to be taken to cure the failure. Licensee shall,
upon receipt of such notification from Licensor, immediately commence, and
thereafter diligently pursue, curing any default with respect to the quality
control standards and procedures and shall achieve the cure within a reasonable
time.
3. NAMES AND TRADEMARKS
--------------------
3.1. Permitted Use by Licensee. Licensee agrees to use the Licensed
-------------------------
Marks strictly in accordance with the terms of this Agreement. Licensee further
agrees to comply with any reasonable requirements or instructions of Licensor
(which shall be no more onerous on Licensee than the business policies and
practices applicable to Licensor itself) regarding the use of the Licensed Marks
which Licensor reasonably and in good xxxxx xxxxx to be necessary to preserve
its proprietary interest therein or the goodwill associated therewith.
3.2. No Acquisition of Rights. Except as expressly provided by this
------------------------
Agreement, Licensee agrees it shall acquire no right, title or interest to the
Licensed Marks, or the goodwill of Licensor associated therewith and all
goodwill arising out of Licensee's use of the Licensed Marks will inure to the
benefit of Licensor. The aforesaid shall not derogate from any goodwill
developed or achieved by the Licensee on its own in the Licensee Stores.
3.3. Registration of Licensed Marks. Licensor makes no representation or
------------------------------
warranty that the Licensed Marks are valid or validly registered in the United
States or any state thereof. Licensee agrees to assist Licensor, at Licensor's
sole cost and expense, to the extent reasonably necessary, in the procurement of
any protection or to protect any of Licensor's rights in and to the Licensed
Marks. At Licensor's expense and sole discretion, Licensor shall undertake to
register the Licensed Marks in any state or country where the Goods and Services
are sold or may be sold in the future or where such registration may provide
some benefit to Licensor; and Licensor shall not be liable hereunder for any
failure to so register, or renew the registration of, the Licensed Marks.
Licensee shall supply Licensor with such information as Licensor may reasonably
request to aid Licensor in the acquisition, maintenance and renewal of
applications and registrations of the Licensed Marks, or in furtherance of any
other purpose related to the acquisition, preservation or
60
protection of the Licensed Marks.
3.4. Policing of Licensed Marks. Licensee shall promptly give notice to
--------------------------
Licensor in the event it becomes aware of any third party that is infringing,
misusing or otherwise violating any of the Licensed Marks or Licensor's rights
therein, or that Licensee believes is or may be infringing, diluting, or
otherwise derogating the Licensed Marks or Licensor's rights therein. Licensor
shall have the right (but not the obligation) to take whatever action it deems
appropriate, including the institution of any action or proceeding against such
third party or otherwise, to obtain a discontinuance of such use. If Licensor
exercises its right to take such action, Licensor shall pay its own expenses and
retain any costs or damages awarded to it therein. If Licensor elects in its
discretion not to proceed to take action against such third party, or fails to
take any action within 30 days of its receipt of Licensee's notice of such third
party's conduct, then Licensee may, at its own expense, take whatever action
Licensee, in its sole discretion, deems to be necessary and appropriate,
provided that such action does not jeopardize the Licensed Marks or Licensor's
rights therein. Licensee and Licensor agree to cooperate with each other in all
respects and to provide each other with all assistance requested by the other
with respect to all such actions.
3.5. Infringement of Other Marks by Licensee. Licensee shall promptly
---------------------------------------
notify Licensor in writing in the event that Licensee becomes aware of any
pending or threatened claim that use of the Licensed Marks by Licensee infringes
the rights of others, or of the institution of any action or proceeding against
Licensee or otherwise arising out of the use of the Licensed Marks by Licensee.
Licensor shall have the right (but not the obligation), upon written
notification to Licensee within 30 days of receipt of Licensee's notification to
Licensor of such infringement claim (unless a shorter time frame is required by
law), to take charge of the defense of any such claim, action or proceeding (and
of any negotiations for the settlement thereof). If Licensor declines, or fails
to respond within 30 days after receipt of notification from Licensee (or such
shorter time frame if required by law), to defend any such claim, action or
proceeding, Licensee may do so. Licensor and Licensee each shall pay their own
expenses and retain any costs or damages awarded to each in any such claim,
action or proceeding. Licensor shall not make any settlement of any such claim,
action or proceeding, brought against Licensee involving a monetary payment by
Licensee without the consent in writing by Licensee. Licensor shall not be
liable in any event to Licensee in respect of any damages assessed or asserted
against Licensee in, or any liability incurred by or imposed upon Licensee in
connection with, any such claim, action or proceeding. Licensor and Licensee
agree to cooperate with each other in all respects in any such claim, action or
proceeding.
4. RELATIONSHIP OF PARTIES
-----------------------
4.1. Licensor/Licensee. The Licensee acknowledges that the only
-----------------
relationship established by this Agreement is that solely of licensor and
licensee, and the parties hereby
61
confirm that this Agreement is not intended to constitute and shall not be
construed as constituting a partnership or joint venture. Neither party shall be
an agent of the other for any purpose whatsoever. Neither party shall have any
right or authority, either express, implied, or apparent, to act on behalf of
the other in any other manner whatsoever, and shall not hold itself out as such
or otherwise take action which might tend to create an agency or partnership
relationship between Licensor and Licensee or any other relationship other than
that established by this Agreement. Licensee shall use its own name in obtaining
or when executing contracts or making purchases, so that the transaction shall
clearly indicate that Licensee is not acting for Licensor.
4.2. Licensee's Responsibilities. Licensee acknowledges that it is fully
---------------------------
responsible for all the debts and obligations of the Licensee Stores and
Licensor shall not be liable for any of the debts or obligations of Licensee's
business. Licensor makes no representation as to the value of the Licensed
Marks.
5. TERM; TERMINATION. This Agreement shall commence on the date first set
-----------------
forth above and shall continue until a termination event occurs in accordance
with the following provisions:
5.1. Termination for Cause. Licensor and Licensee shall each have the
---------------------
right to terminate this Agreement upon notice in writing to the other party if
such other party defaults in the performance of any of the substantial
provisions made hereunder and, in the case of a default which can be remedied,
such other party shall not have either (i) remedied such default to the
satisfaction of the party not in default within 30 days after written demand by
such party or (ii) promptly after written demand by such party, commenced
efforts to remedy such default, continuously and diligently maintained such
efforts, and remedied such default to the satisfaction of such non-defaulting
party as soon as practicable but in no event later than 90 days after such
demand by such non-defaulting party.
5.2. Termination by Default Without Prejudice. Any termination pursuant
----------------------------------------
to Section 5.1 above shall be without prejudice to any other rights or remedies
which Licensor or Licensee may have in respect to any default by the other
party. Waiver by Licensor or Licensee of any particular default by the other
party shall not affect or impair the non-defaulting party's right in respect to
any subsequent default of the same or a different kind; nor shall any delay or
omission of Licensor or Licensee to exercise any right arising from any default
affect or impair Licensor or Licensee's right as to the same or any future
default.
5.3. Surrender of License. Licensee may terminate this Agreement at any
--------------------
time upon 10 days prior written notice to Licensor. Upon the closure of all of
the Licensee Stores, Licensee shall be deemed to have terminated this Agreement.
Any termination of this Agreement pursuant to this Section 5.3 shall be without
liability to Licensor or
62
Licensee, except with respect to any breach by either party of the remaining
terms of this Agreement.
5.4. Obligation of Licensee upon Termination. Upon the termination of
---------------------------------------
this Agreement, Licensee shall immediately and permanently cease to use in any
manner whatsoever the Licensed Marks and all advertising materials, displays,
stationery, forms and other manifestations of the Licensed Marks.
6. GENERAL PROVISIONS
------------------
6.1. Assignment by Licensee. Except as set forth in Section 1.3(b), unless
----------------------
the prior written consent of the Licensor is obtained, which consent shall not
be unreasonably withheld, conditioned or delayed, Licensee will not assign any
of its rights or obligations under this Agreement to any third party.
6.2. Notice. Any notice, demand or other communication required or
------
permitted to be given by the terms of this Agreement to any parties shall be in
writing and be deemed sufficiently given if sent by telecopy to the addressee or
by any nationally recognized "next day" delivery service, in each case to the
notice addresses set forth in the Purchase Agreement. Any such notice or other
document shall be deemed to have been given to and received by the party to whom
it was sent on the first to occur of (i) the date of confirmation of the receipt
of such telecopy or (ii) the date of such delivery by such courier service. The
notice addresses may be changed from time to time by notice in writing in
accordance herewith.
6.3. Severability. If any provision of this Agreement is declared invalid
------------
for any reason, such invalidity shall apply to the extent of the prohibition
without in any way invalidating or affecting the remaining provisions of the
Agreement.
6.4. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, to the jurisdiction of which
the parties hereto agree to submit.
6.5. Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties hereto and there are no representations, inducements,
promises, agreements, arrangements, undertakings, oral or written, between the
parties hereto other than those set forth expressly herein or in any document
referred to herein or duly executed by both parties hereto.
6.6. Benefit. This Agreement shall inure to the benefit of and be
-------
binding upon the permitted successors and assigns of the parties hereto.
63
6.7 Confidentiality. Each party acknowledges that during the course of
---------------
carrying out this Agreement, it may receive confidential and proprietary
information related to the other party's business, including, without
limitation, the Licensed Marks, as set forth on Schedule I ("Confidential
------------
Information"). Confidential Information includes any information, designs, data
-----------
or know-how that a party has designated as proprietary and/or confidential or
that, by the nature of the circumstances surrounding the disclosure, ought to be
treated as proprietary and/or confidential; provided, however, that any
information which is otherwise in the public domain shall not be deemed
confidential. Each party acknowledges that such Confidential Information is the
sole and exclusive property of the other party and undertakes to retain in
confidence all Confidential Information. Each party's obligations under this
Section 6.7 shall survive expiration or termination of this Agreement and any
amendments thereto.
(Signatures on following page)
64
IN WITNESS WHEREOF, the parties have signed this Agreement the day and year
first above written.
Whole Foods Market IP, Inc.
By: _________________________________
Name: _______________________________
Title: ______________________________
[Licensee]
By: _________________________________
Name: _______________________________
Title: ______________________________
65
Exhibit D
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of __________, 2001 ("Agreement"), is by
and among Harry's Farmers Market, Inc., a Georgia corporation ("Seller"),
Karalea, Inc., a Georgia corporation ("Karalea"), Marthasville Trading Company,
a Georgia corporation ("Marthasville, and together with Parent and Karalea, the
"Seller"), Whole Foods Market Group, Inc., a Delaware corporation ("Purchaser"),
and Chicago Title Insurance Company ("Escrow Agent").
WHEREAS, Purchaser and Seller are parties to that certain Asset Purchase
Agreement, dated as of August 9, 2001 (the "Purchase Agreement") (capitalized
terms not otherwise defined herein having the respective meanings set forth in
the Purchase Agreement); and
WHEREAS, the parties to the Purchase Agreement have agreed to segregate
from the Purchase Price, and deposit hereunder, the sum of $1,000,000 (the
"Escrowed Funds"); and
In consideration of the mutual covenants and agreements contained herein
and certain other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto covenant and agree as
follows:
1. Appointment of Escrow Agent and Deposit of Escrowed Funds. Purchaser
---------------------------------------------------------
and Seller hereby appoint and designate the Escrow Agent as the Escrow Agent
hereunder, and the Escrow Agent hereby accepts such appointment and agrees to
serve hereunder for the purposes and on the terms set forth herein. Purchaser
hereby deposits the Escrowed Funds with the Escrow Agent. The Escrow Agent shall
receive, hold and deliver the Escrowed Funds as provided for herein. Such funds
shall be invested in money market and similar liquid investments, as directed by
Seller, and the interest earned thereon shall be distributed to Seller no less
frequently than quarterly.
2. Liabilities Covered. The deposit of the Escrowed Funds with the
-------------------
Escrow Agent has been made solely for the purpose of funding, to the extent of
the Escrowed Funds, (i) Seller's obligation to pay a deficiency in Net Working
Capital as described in Section 2.2 of the Purchase Agreement, (ii) Seller's
obligations to pay any prorated amounts not paid by Seller at Closing or within
the applicable time periods for payment after Closing in accordance with the
provisions of Section 1.5 of the Purchase Agreement and (iii) the Seller's
indemnification obligations under Section 8.1 of the Purchase Agreement. This
funding obligation terminates on the date (the "Termination Date") that is the
later of the following: (i) the 12 month anniversary of the Closing Date; or
(ii) with respect to any specific representation or warranty in the Purchase
Agreement under which
66
Purchaser shall have made a claim for indemnification thereunder prior to the 12
month anniversary of the Closing Date and shall have provided notice of such
claim to the Escrow Agent as provided in Section 3 hereof, the period of time
beyond the 12 month anniversary of the Closing Date sufficient to completely and
finally resolve the claim relating to such representation or warranty.
3. Disbursement of the Deposit. The Escrow Agent shall disburse the
---------------------------
Escrowed Funds as follows:
(a) Subject to the provisions of this Agreement, on the Termination
Date, the Escrow Agent shall disburse to the Seller all of the Escrowed
Funds minus the sum of (i) any amounts distributed to Purchaser pursuant to
subsection 3(b) below or to the Seller pursuant to Section 4 below and (ii)
any amounts with respect to which the Escrow Agent has received a written
objection to disbursement from Purchaser or the Seller pursuant to
subsection 3(b) below.
(b) Purchaser or the Seller may deliver to the Escrow Agent written
notice (the "Notice") requesting that the Escrow Agent pay all or a portion
of the Escrowed Funds to Purchaser to satisfy a claim pursuant to Section
8.1 of the Purchase Agreement. The Notice shall include an itemized
statement setting forth the calculation of the dollar amount requested and
a detailed statement of the basis of the alleged claim of loss. Purchaser
or the Seller, as the case may be (the "Requesting Party"), shall send a
copy of such Notice to the other (the "Receiving Party") simultaneously and
by the same means of transmission which the Requesting Party provided the
Notice to the Escrow Agent. If the Escrow Agent does not receive a written
objection to the Notice from the Receiving Party prior to the 30th day
following its receipt of the Notice, then, after confirming that the
Receiving Party received the notice, the Escrow Agent shall disburse to the
Requesting Party from the Escrowed Funds the amount provided in the Notice.
If the Escrow Agent receives a written objection from the Receiving Party
to the Notice prior to the 30th day, the provisions of Section 7 shall
apply. No notice may be delivered to the Receiving Party or the Escrow
Agent nor may any previously delivered notice be revised after the
expiration of one year from the Closing Date.
4. Early Disbursement of Escrowed Funds. On such date as the amount of
------------------------------------
Net Working Capital has been ultimately determined pursuant to Section 2.2 of
the Purchase Agreement, Purchaser will instruct the Escrow Agent to disburse to
the Seller, from the Escrowed Funds, the sum of $250,000 minus any amounts
required to be paid to Purchaser pursuant to Section 1.5, if then applicable,
and Section 2.2 of the Purchase Agreement; and the Seller will instruct the
Escrow Agent to disburse to Purchaser the amounts required to be paid to
Purchaser pursuant to Section 1.5, if then applicable, and Section 2.2 of the
Purchase Agreement. If the amounts required to be paid to Purchaser pursuant to
Section 1.5 and 2.2 of the Purchase Agreement exceed $250,000, Seller will
deposit funds to the
67
Escrow Agent equal to the amount of such excess.
5. Escrow Agent to Follow Instructions of Purchaser and Seller. Any
-----------------------------------------------------------
provision herein to the contrary notwithstanding, the Escrow Agent shall, at any
time and from time to time, take such action hereunder with respect to the
Escrowed Funds as shall be agreed to in writing by Purchaser and Seller.
6. Escrow Agent Duties. Without in any way limiting any other
-------------------
provision of this Agreement, it is expressly understood and agreed that the
Escrow Agent shall be under no duty or obligation to give any notice, or to do
or to omit the doing of any action with respect to the Escrowed Funds, except to
make disbursements in accordance with the terms of this Agreement. The Escrow
Agent shall not be liable for any error in judgment or any act or steps taken or
permitted to be taken in good faith, or for any mistake of law or fact, or for
anything it may do or refrain from doing in connection herewith, except for its
own willful misconduct or gross negligence. The Escrow Agent shall not be
required in any way to determine the validity or sufficiency, whether in form or
substance, of any instrument, document, certificate, statement or notice
referred to in this Agreement or contemplated hereby, or the identity or
authority of the persons executing the same, and it shall be sufficient if any
writing purporting to be such instrument, document, certificate, statement or
notice is delivered to the Escrow Agent and purports to be correct in form and
signed or otherwise executed by the party or parties required to sign or execute
the same under this Agreement.
7. Controversy. Should any other controversy arise between or among
-----------
Purchaser and Seller, or any other person, firm or entity, with respect to this
Agreement or the Escrowed Funds, or the Escrow Agent should be in doubt as to
what action to take, the Escrow Agent shall have the right to (a) withhold
delivery of the Escrowed Funds until the controversy is resolved, the
conflicting demands are withdrawn or the doubt is resolved, or (b) institute a
xxxx of interpleader in a court of applicable jurisdiction to determine the
rights of the parties hereto. Should a xxxx of interpleader be instituted, or
should the Escrow Agent be threatened with litigation or become involved in
litigation in any manner whatsoever on account of this Agreement or the Escrowed
Funds, then as between themselves and the Escrow Agent, Purchaser and Seller
will each pay to the Escrow Agent 50% of the reasonable attorneys' fees and any
other disbursements, expenses, losses and damages of the Escrow Agent in
connection with or which results from the threatened or actual litigation.
8. Indemnity. Purchaser and Seller, jointly and severally, agree to
---------
indemnify the Escrow Agent against, and hold the Escrow Agent harmless from, any
and all losses, costs, damages, expenses, claims and attorney's fees suffered or
incurred by the Escrow Agent as a result of, in connection with or arising from
or out of the acts or omissions of the Escrow Agent in performance of or
pursuant to this Agreement, except such acts or omissions as may result from the
Escrow Agent's willful misconduct or gross negligence.
68
Purchaser and Seller shall each be responsible for one-half of the payment of
the Escrow Agent's customary fees and expenses charged in connection with the
performance of its duties hereunder.
9. Resignation. The Escrow Agent may resign upon ten days' prior written
-----------
notice to Purchaser and Seller, and, upon joint instructions from Purchaser and
Seller, shall deliver the Escrowed Funds to any designated substitute Escrow
Agent selected by Purchaser and Seller. If Purchaser and Seller fail to
designate a substitute Escrow Agent within ten days, the Escrow Agent may, at
its sole discretion and its sole option, institute a xxxx of interpleader as
contemplated by Section 7 hereof.
10. Escrow Agent's Fees and Expenses. The reasonable compensation of
--------------------------------
Escrow Agent as set forth on Schedule A hereto and all expenses, disbursements
and advances (including reasonable attorneys' fees) incurred by Escrow Agent
directly in connection with carrying out Escrow Agent's duties hereunder shall
be divided equally between and paid equally by Seller and Purchaser.
11. Notices. All notices, demands, requests or other communications
-------
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be sent or delivered to the
applicable address below:
If to Seller:
[New Name of Company]
___________________________
___________________________
Attn.: Xxxxx X. Blazer
Telephone: ________________
Facsimile: ________________
FEIN: _____________________
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser:
69
Whole Foods Market Group, Inc.
000 X. Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn.: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
FEIN: _____________________
If to Escrow Agent:
Chicago Title Insurance Company
c/o Sultzky, Xxxxx & Xxxxxx, LLP
___________________________
Attn.: ____________________
Telephone: ________________
Facsimile: ________________
12. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as signatories.
13. Entire Agreement. This Agreement and any other documents executed or
----------------
delivered pursuant to this Agreement contain the complete agreement among the
parties with respect to the transactions contemplated hereby and supersede all
prior agreements and understandings, whether oral or written, among the parties
with respect to such transactions. To the extent that the provisions of Section
1.5, 2.2 or 8 of the Purchase Agreement may be inconsistent with the provisions
of this Agreement, the Purchase Agreement will control.
14. Amendment. This Agreement may be amended only by a written
---------
instrument signed by the party against which enforcement of any waiver, change,
modification, extension or discharge is sought.
15. Benefit and Assignment. The rights and obligations of each party
----------------------
under this Agreement may not be assigned without the prior written consent of
all other parties. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
16. Choice of Laws; Cumulative Rights. This Agreement is to be governed
---------------------------------
by and construed in accordance with the laws of the State of [escrow agent
domicile], and any disputes or controversies arising under this Agreement shall
be resolved in a court of
70
competent jurisdiction located in [escrow agent domicile], to which jurisdiction
and venue the parties submit. All of the Escrow Agent's rights hereunder are
cumulative of any other rights it may have by law or otherwise.
[Signatures on Following Page]
71
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Whole Foods Market Group, Inc.
By:___________________________
Name:_________________________
Title:________________________
Harry's Farmers Market, Inc.
By:___________________________
Name:_________________________
Title:________________________
Karalea, Inc.
By: __________________________
Name:_________________________
Title:________________________
Marthasville Trading Company
By: __________________________
Name:_________________________
Title:________________________
Chicago Title Insurance Company
By: Sultzky, Xxxxx & Xxxxxx, LLP, its agent
By:___________________________
Name:_________________________
Title:________________________
72
Exhibit E-1
UPON RECORDING RETURN TO:
Xxxxxxx Xxxxxx LLP
Tower 1, Suite 1000
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxxxx Xxxxx
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
DISTRIBUTION CENTER
-------------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment"), is made as of
____________________, 2001 (the "Effective Date") by and between HARRY'S FARMERS
MARKET, INC., a Georgia corporation (herein called "Seller"), and WHOLE FOODS
MARKET GROUP, INC., a Delaware corporation (herein called ("Buyer").
W I T N E S S E T H:
WHEREAS, in accordance with the terms of that certain Asset Purchase
Agreement (the "Sale Agreement") dated as of August __, 2001 by and between
--------------
Buyer and Seller, Seller agreed to assign to Buyer all of its right, title and
interest in the Lease (as hereinafter defined), and Buyer agreed to accept such
assignment and to assume from Seller certain liabilities, obligations and
responsibilities of Seller on the terms and conditions herein contained.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Assignment. Seller hereby assigns, sets over and transfers to Buyer all
----------
of its right, title and interest in, to and under that certain Warehouse Lease
dated March 16, 2000 (the "Lease") between Xxxxx Investments, a Georgia
-----
corporation and Seller on the terms and conditions of the Sale Agreement.
2. Assumption. Buyer hereby assumes all liabilities, obligations and
----------
responsibilities of Seller under the Lease arising or accruing under the Lease
from and after the Effective Date on the terms and conditions of the Sale
Agreement. Buyer does not assume any liabilities, obligations or
responsibilities of Seller in respect of periods prior to the Effective Date
hereof.
3. Miscellaneous. This Assignment and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Georgia
applicable to agreements made and to be wholly performed within said State and
may not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
4. Severability. If any term or provision of this Assignment or the
------------
application thereof to any persons or circumstances shall, to any
73
extent, be invalid or unenforceable, the remainder of this Assignment or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby, and each term and provision of this Assignment shall be valid and
enforced to the fullest extent permitted by law.
5. Counterparts. This Assignment may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
[SIGNATURES APPEAR ON NEXT PAGES]
74
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of date
set forth above.
Signed, sealed and delivered in
the presence of:
HARRY'S FARMERS MARKET, INC., a
Georgia corporation [OPTION(C0BB):
___________________________ KARALEA, INC., a Georgia
Unofficial Witness corporation ENDOPTION]
___________________________ By:________________________________
Notary Public Name:___________________________
Title:__________________________
(NOTARY SEAL)
My Commission Expires:
___________________________
Signed, sealed and delivered
in the presence of: WHOLE FOODS MARKET GROUP, INC., a
Delaware corporation
___________________________
Unofficial Witness
By:________________________________
___________________________ Name:___________________________
Notary Public Title:__________________________
(NOTARY SEAL)
My Commission Expires:
___________________________
75
Exhibit E-2
UPON RECORDING RETURN TO:
Xxxxxxx Xxxxxx LLP
Tower 1, Suite 1000
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxxxx Xxxxx
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
PARKING LOT LEASE
-----------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment"), is made as of
____________________, 2001 ("Effective Date") by and between HARRY'S FARMERS
MARKET, INC., a Georgia corporation (herein called "Seller"), and WHOLE FOODS
MARKET GROUP, INC. (herein called ("Buyer").
W I T N E S S E T H:
WHEREAS, in accordance with the terms of that certain Asset Purchase
Agreement (the "Sale Agreement") dated as of August __, 2001 by and between
Buyer and Seller, Seller agreed to assign to Buyer, all of the right, title
interest, and Buyer agreed to accept such assignment and assume certain the
liabilities, obligations and responsibilities of Seller on the terms and
conditions herein contained.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Assignment. Seller hereby assigns, sets over and transfers to Buyer all
----------
of its right, title and interest in, to and under that certain Lease Agreement
(Parking Lease) dated August 24, 1993 (the "Parking Lot Lease") between Georgia
Power Company ("Landlord") and HFM, Inc., the predecessor in interest to Seller,
on the terms and conditions of the Sale Agreement.
2. Assumption. Buyer hereby assumes all of the liabilities, obligations
----------
and responsibilities of Seller under the Parking Lot Lease arising or accruing
under the Parking Lot Lease from and after the Effective Date on the terms and
conditions of the Sale Agreement. Buyer does not assume any liabilities,
obligations or responsibilities of Seller in respect of periods prior to the
Effective Date hereof.
3. Not Used.
4. Miscellaneous. This Assignment and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Georgia
applicable to agreements made and to be wholly performed within said State and
may not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
5. Severability. If any term or provision of this Assignment or the
------------
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Assignment or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Assignment shall be valid and enforced to the fullest
extent permitted by law.
76
6. Counterparts. This Assignment may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
[SIGNATURES ON NEXT PAGES]
77
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
date first set forth hereinabove.
Signed, sealed and delivered in
the presence of: HARRY'S FARMERS MARKET, INC., a
Georgia corporation
___________________________
Unofficial Witness By:________________________
Name:___________________
___________________________ Title:__________________
Notary Public
(NOTARY SEAL)
My Commission Expires:
___________________________
Signed, sealed and delivered in the WHOLE FOODS MARKET GROUP, INC., a
presence of: Delaware corporation
___________________________ By:________________________
Unofficial Witness Name:___________________
Title:__________________
___________________________
Notary Public
(NOTARY SEAL)
My Commission Expires:
___________________________
78
Exhibit E-3
UPON RECORDING RETURN TO:
Xxxxxxx Xxxxxx LLP
--------------------------------------------------------
Tower 1, Suite 1000
--------------------------------------------------------
0000 Xxxxxxxx Xxxxxx
--------------------------------------------------------
Xxxxxx, XX 00000
--------------------------------------------------------
Attention: Xxxxx Xxxxxxx Xxxxx, Esq.
--------------------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
DRIVEWAY LEASE
--------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment"), is made as of
____________________, 2001 ("Effective Date") by and between KARALEA, INC., a
Georgia corporation (herein called "Seller"), and [entity to be created by
------------------------------
Whole Foods Market Group, Inc.] (herein called ("Buyer").
------------------------------------
W I T N E S S E T H:
WHEREAS, in accordance with the terms of that certain Asset Purchase
Agreement (the "Sale Agreement") dated as of August __, 2001 by and between
Buyer and Seller, Seller agreed to assign to Buyer, all of the right, title
interest, and Buyer agreed to accept such assignment and assume certain the
liabilities, obligations and responsibilities of Seller on the terms and
conditions herein contained.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. Assignment. Seller hereby assigns, sets over and transfers to Buyer all
----------
of its right, title and interest in, to and under that certain Lease Agreement
dated April 16, 1993 (the "Driveway Lease") between Xxxxxxx X. Word ("Landlord")
and XX Xxxxxxx #1, Corp., the predecessor in interest to Seller, including,
without limitation, Seller's option to purchase contained in the Driveway Lease,
on the terms and conditions of the Sale Agreement.
2. Assumption. Buyer hereby assumes all of the liabilities, obligations
----------
and responsibilities of Seller under the Driveway Lease arising or accruing
under the Driveway Lease from and after the Effective Date on the terms and
conditions of the Sale Agreement. Buyer does not assume any liabilities,
obligations or responsibilities of Seller in respect of periods prior to the
Effective Date hereof.
3. Miscellaneous. This Assignment and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Georgia
applicable to agreements made and to be wholly performed within said State and
may not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
4. Severability. If any term or provision of this Assignment or the
------------
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Assignment
79
or the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be affected
thereby, and each term and provision of this Assignment shall be valid and
enforced to the fullest extent permitted by law.
5. Counterparts. This Assignment may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
[SIGNATURES ON NEXT PAGES]
80
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
date first set forth hereinabove.
Signed, sealed and delivered in the
presence of: KARALEA, INC., a Georgia
corporation
______________________________
Unofficial Witness By: _________________________
Name: ____________________
______________________________ Title: ___________________
Notary Public
(NOTARY SEAL)
My Commission Expires:
______________________________
Signed, sealed and delivered in the [entity to be created by Whole
presence of: Foods Group, Inc.]
______________________________ By: _________________________
Unofficial Witness Name: ____________________
Title: ___________________
______________________________
Notary Public
(NOTARY SEAL)
My Commission Expires:
______________________________
81
Exhibit F
ASSIGNMENT AND ASSUMPTION OF LEASES
-----------------------------------
[Xxxx and Gwinnett Leases]
THIS ASSIGNMENT AND ASSUMPTION OF LEASES ("Assignment") dated as of
________________________, 2001 ("Effective Date"), is entered into by and
between HARRY'S FARMERS MARKET, a Georgia corporation ("Harry's") and KARALEA,
INC., a Georgia corporation ("Karalea") (Harry's and Karalea are collectively
referred to as "Seller") and (entity created by Whole Foods Market Group to own
real property) , a ____________ corporation ("WFM").
Recitals
--------
In accordance with the terms of that certain Asset Purchase Agreement (the
"Asset Purchase Agreement") dated as of August __, 2001 by and between Whole
Foods Market Group, Inc. and Seller, Seller, as their individual interests
appear of record, has or will simultaneously with the execution and delivery of
this Assignment sell and transfer to WFM fee simple title to the real property
described in Exhibits A-1 and A-2 attached hereto and by this reference made a
--------------------
part hereof (Exhibit A-1 is hereinafter referred to as the "Xxxx Property" and
Exhibit A-2 is hereinafter referred to as the "Gwinnett Property").
Certain improvements have been constructed on the Xxxx Property and
Gwinnett Property (the "Improvements").
The rental agreements and leases of portions of the Improvements that are
currently outstanding are listed on Exhibits B-1 and B-2 attached hereto and by
--------------------
this reference made a part hereof. The rental agreements and leases listed on
Exhibit B-1 relate to the Xxxx Property ("Xxxx Leases") and on Exhibit B-2
relate to the Gwinnett Property ("Gwinnett Leases").
Seller desires to assign its interest in the Xxxx Leases and Gwinnett
Leases to WFM and WFM desires to accept the assignment thereof and assume
certain obligations hereunder on the terms and conditions herein contained.
Covenants
---------
NOW, THEREFORE, in consideration of the promises and conditions contained
herein, the parties hereby agree as follows:
1. Assignment. Seller hereby assigns, sets over and transfers to WFM all of
----------
Seller's right, title and interest in and to the following:
(a) All of the Xxxx Leases and Gwinnett Leases described on Exhibits
--------
B-1 and B-2, including any extensions, renewals, amendments and
-----------
modifications of the Xxxx Leases and Gwinnett Leases as described on
Exhibits B-1 and B-2;
--------------------
(b) All deposits made by lessees pursuant to the Xxxx Leases and
Gwinnett Leases, including but not limited to security deposits,
cleaning deposits, key deposits, damage deposits, prepaid rent, and
utility deposits as described on Exhibits B-1 and B-2;
--------------------
(c) All guaranties of the lessees' obligations under any of the Xxxx
Leases and Gwinnett Leases and all extensions, renewals, amendments
and modifications of such guaranties;
2. WFM's Assumption. WFM hereby assumes all of the landlord's or lessor's
----------------
obligations under the Xxxx Leases or Gwinnett Leases to the extent that such
obligations arise after the Effective Date. Buyer does not assume any
liabilities, obligations or responsibilities of Seller in respect of periods
prior to the Effective Date hereof.
3. Miscellaneous. This Assignment and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Georgia
applicable to agreements made and to be wholly
82
performed within said State and may not be modified or amended in any manner
other than by a written agreement signed by the party to be charged therewith.
4. Severability. If any term or provision of this Assignment or the
------------
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Assignment or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Assignment shall be valid and enforced to the fullest
extent permitted by law.
5. Counterparts. This Assignment may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
date first set forth hereinabove. This Assignment shall be binding on and inure
to the benefit of the parties hereto, their heirs, executors, administrators,
successors in interest and assigns.
SELLER:
HARRY'S FARMERS MARKET,
a Georgia corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
KARALEA, INC.,
a Georgia corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
WFM:
(entity created by Whole Foods
------------------------------
Market Group to own real property),
----------------------------------
a _______________ corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
83
Exhibit G
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
(Assumed Contracts)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is executed and
delivered as of ______________, 2001 ("Effective Date") by and between HARRY'S
FARMERS MARKET, INC. and KARALEA, INC. (collectively "Seller") and WHOLE FOODS
MARKET GROUP, INC. ("Buyer").
Recitals
--------
A. In accordance with the terms of that certain Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of August __, 2001 by and
between Seller and Buyer, Seller, as their individual interests appear of
record, has or will simultaneously with the execution and delivery of this
Agreement sell and transfer to Buyer certain assets described in the Asset
Purchase Agreement. Capitalized terms not specifically defined herein shall
have the meanings ascribed in the Asset Purchase Agreement.
B. Pursuant to the Asset Purchase Agreement, Buyer agreed to assume
certain specified contractual liabilities of Seller from and after the Effective
Date hereof on the terms and conditions herein contained.
COVENANTS
---------
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:
1. Assignment. Seller hereby assigns to Buyer all of its right, title and
----------
interest in and to the agreements, leases and contracts listed on Exhibit A
attached hereto and incorporated by this reference (the "Assumed Contracts") on
the terms and conditions of the Asset Purchase Agreement.
2. Assumption. Buyer hereby assumes, in the name, place and stead of
----------
Seller, the full observance and performance of each and every term, covenant and
condition of the Assumed Contracts to the extent that the same accrue and fall
due in respect of periods on and after the Effective Date hereof. Buyer does
not assume any obligation or liability of Seller in respect of periods prior to
the Effective Date hereof or for any Assumed Contracts as they relate to the
Excluded Assets described in the Asset Purchase Agreement.
3. Miscellaneous. This Agreement and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be wholly performed within said State and
may not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
4. Severability. If any term or provision of this Agreement or
------------
84
the application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
5. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
85
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SELLER:
HARRY'S FARMERS MARKET, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
KARALEA, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
BUYER:
WHOLE FOODS MARKET GROUP, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
86
Exhibit H
ASSIGNMENT OF OTHER ASSUMED LIABILITIES
---------------------------------------
THIS ASSIGNMENT OF OTHER ASSUMED LIABILITIES ("Assignment") dated
____________, 2001 ("Effective Date") is by and between HARRY'S FARMERS MARKET,
INC. and KARALEA, INC. (collectively "Seller") and WHOLE FOODS MARKET GROUP,
INC. ("Buyer").
Recitals
--------
A. In accordance with the terms of that certain Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of August __, 2001 by and
between Seller and Buyer, Seller, as their individual interests appear of
record, has or will simultaneously with the execution and delivery of this
Agreement sell and transfer to Buyer certain assets described in the Asset
Purchase Agreement. Capitalized terms not specifically defined herein shall
have the meanings ascribed in the Asset Purchase Agreement.
B. Pursuant to the Asset Purchase Agreement, Buyer agreed to assume
certain Assumed Liabilities (as defined below) from Seller from and after the
Effective Date hereof on the terms and conditions herein contained.
COVENANTS
---------
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:
1. Assignment and Assumption. Effective as of the Effective Date, Seller
-------------------------
hereby assigns to Buyer, and Buyer hereby accepts and assumes from Seller, all
of its right, title and interest in and to certain Assumed Liabilities other
than the Leased Real Estate, Xxxx Leases and the Assumed Contracts, as specified
in the Asset Purchase Agreement on the terms and conditions of the Asset
Purchase Agreement. Buyer does not assume any liabilities, obligations or
responsibilities of Seller in respect of periods prior to the Effective Date
hereof.
2. Miscellaneous. This Assignment and the obligations of the parties
-------------
hereunder shall be binding upon and inure to the benefit of the parties hereto,
their respective legal representatives, successors and assigns, shall be
governed by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be wholly performed within said State and
may not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
3. Severability. If any term or provision of this Assignment or the
------------
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Assignment or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Assignment shall be valid and enforced to the fullest
extent permitted by law.
87
4. Counterparts. This Assignment may be executed in counterparts, each of
------------
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
88
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first above written.
SELLER:
HARRY'S FARMERS MARKET, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
KARALEA, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
BUYER:
WHOLE FOODS MARKET GROUP, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
89
Exhibit I
CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT, dated as of _______________,
2001 ("Agreement"), is by and between Whole Foods Market Group, Inc., a Delaware
corporation ("Purchaser"), and Xxxxx X. Blazer, a resident of Georgia (the
"Stockholder").
WHEREAS, on the date hereof, the Purchaser and/or its affiliate is
acquiring certain assets of the business of Harry's Farmers Market, Inc. and its
subsidiaries ("Seller"), of which the Stockholder is a principal stockholder,
pursuant to the terms of that certain Asset Purchase Agreement (the "Asset
Purchase Agreement"), dated as of ___________________, 2001; and
WHEREAS, Purchaser desires to retain the services of Stockholder as a
consultant in connection with Purchaser's operating of the business to be
acquired pursuant to the Asset Purchase Agreement; and
WHEREAS, Stockholder's entering into this Agreement is a condition
precedent to Purchaser's obligation to consummate the transactions contemplated
by the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement do
covenant and agree as follows:
1. Transition Consulting Services. Purchaser hereby engages Stockholder
------------------------------
to provide certain consulting and advisory services to Purchaser and/or its
affiliates regarding the integration of the assets acquired by Purchaser
pursuant to the Asset Purchase Agreement.
90
Stockholder is an independent contractor rather than an employee or agent of
Purchaser. Stockholder hereby accepts and agrees to such engagement.
2. Term. The Term of this Agreement shall begin on the date set forth
----
above (the "Effective Date") and shall continue until the fifth anniversary of
the Effective Date.
3. Compensation. Purchaser shall pay Stockholder the total sum of One
------------
Million Two Hundred Fifty Thousand Dollars ($1,250,000.00), in exchange for the
services to be performed hereunder and Stockholder's covenants as set forth
herein. Such payment shall be made in five (5) equal installments in accordance
with the following schedule:
$250,000.00 payable within thirty (30) days of the Effective Date
$250,000.00 payable on the first anniversary of the Effective Date
$250,000.00 payable on the second anniversary of the Effective Date
$250,000.00 payable on the third anniversary of the Effective Date
$250,000.00 payable on the fourth anniversary of the Effective Date
4. Tax Reporting. Purchaser shall file annually an Internal Revenue
-------------
Service Form 1099-MISC with respect to the Stockholder which shall report the
amount of compensation paid by Purchaser to the Stockholder for services
rendered hereunder. The Stockholder shall be responsible for filing any and all
other required state or federal income and self-employment tax returns with
respect to the compensation paid to Stockholder under this Agreement.
Stockholder understands and agrees that Purchaser will make no deductions from
Stockholder's compensation for federal or state tax withholdings, social
security, unemployment, worker's compensation or disability insurance.
Stockholder further understands that, as a self-employed individual, he is not
eligible to participate in Purchaser's insurance, vacation, pension retirement
or other benefit plans based on services performed pursuant to this Agreement.
91
5. Manner of Service. Purchaser and Stockholder hereby agree that, during
-----------------
the Term of this Agreement, Stockholder shall make himself available to render a
maximum of ten (10) hours of consulting services per week for a total number of
hours each year in accordance with the following schedule:
Year One 500 hours per year
Year Two 400 hours per year
Year Three 300 hours per year
Year Four 200 hours per year
Year Five 100 hours per year
Purchaser and Stockholder shall mutually agree upon the time, manner and
method of the performance of Stockholder's services; provided, however, that,
after the first month of the term of this Agreement, Stockholder shall not be
required to render consulting services at any specific location or to consult
for more than ten (10) hours per week. In the event that at any time after the
first month of the term of this Agreement, Stockholder agrees to render
consulting services at locations selected by Purchaser or consult for more than
the maximum of ten (10) hours per week, Stockholder shall be entitled to such
additional compensation and expense reimbursement or advancement, as may be
mutually agreed to by Purchaser and Stockholder on a case-by-case basis.
Notwithstanding the foregoing, Stockholder will be available to provide
consulting services in Atlanta, on reasonable notice from Purchaser for the
first month of the term of this Agreement. Further, it is understood and agreed
by the parties that Stockholder makes no warranty or representation regarding
the value of the consulting services to be rendered by him pursuant to this
Agreement and in no event shall the Stockholder be liable for any action or
omission of the Stockholder made in good faith in the performance of such
consulting services. Accordingly, in no event shall the damages recoverable by
Purchaser from Stockholder for a breach of this Section 5 exceed the amount of
92
consideration to be paid to Stockholder by Purchaser pursuant to Section 3
above. In like fashion any damages recoverable by Stockholder from Purchaser for
non-payment under paragraph 3 above shall be limited to the unpaid amount, plus
interest as allowed by law.
6. Noncompete. Stockholder agrees that during the Term of this
----------
Agreement, Stockholder shall not directly or indirectly engage in, consult with,
own, operate, or invest in any business (other than as a holder of not more than
one percent (1%) of the capital stock of a publicly held corporation) which (A)
(i) owns or operates a supermarket, farmers market or natural food store or (ii)
owns or operates any business engaged in the retail sale of food products or
(iii) acquires real estate for purposes of (i) or (ii) above, and which (B) are
located (i) in the Atlanta metropolitan area, (ii) within thirty (30) miles of a
Whole Foods Market store (including the announced site of any future store)
existing as of the date of determination or (iii) in any of the metropolitan
areas set forth on Annex A. (The "date of determination" means the first date
-------
on which Stockholder commences an activity covered by this paragraph 6 of the
Agreement.) Notwithstanding the foregoing, the restrictions of this paragraph 6
shall not apply to "restaurants" (defined as establishments engaged primarily in
the sale of ready to eat foods), the Hurry Stores (defined below) nor shall they
preclude Stockholder from consulting for, (a) small format (i.e., less than
10,000 square feet of selling space) retail food stores which (i) are not
principally "natural foods stores" and (ii) are not beneficially owned or
controlled by entities which operate supermarkets or (b) large format retail
food stores solely operated outside the United States during the term of this
Agreement.
7. Hurry Stores. Stockholder is expressly entitled to directly or
------------
indirectly operate or cause Seller to continue to operate the "Excluded
93
Stores," as defined in the Asset Purchase Agreement, in the manner contemplated
by the Asset Purchase Agreement, and any expansion in the number of the "Harry's
in a Hurry" concept stores, provided the retail selling space of any new stores
does not exceed ten thousand (10,000) square feet at any given location (the
Excluded Stores and any expansion stores will be collectively referred to as
"Hurry Stores"). Stockholder shall be entitled to use the Intangible Personal
Property, as defined in the Asset Purchase Agreement, and the Licensed Marks, as
defined in that certain License Agreement of even date hereof, between Whole
Foods IP, Inc. and Newco (f/k/a Harry's Farmers Market, Inc.) in the operation
of the Hurry Stores so long as the stores are either owned (i) by Harry's
Farmers Market, Inc. or (ii) by any transferree or successor of the Hurry's
Stores in which Xxxxx Xxxxxx has an equity interest.
8. Injunctive Relief. The Stockholder acknowledges that compliance with
-----------------
the provisions of Section 6 is necessary to protect the goodwill and other
proprietary rights of the Purchaser and that failure to comply with such
provisions will result in irreparable and continuing damage to the Purchaser for
which there would be no adequate remedy at law. In the event that the
Stockholder shall fail to comply with such provisions, the Purchaser and its
successors and assigns shall be entitled to injunctive relief in addition to
such other relief as may be appropriate at law in order to ensure such
compliance thereof.
9. Non-Solicitation of Employees. The Stockholder agrees that, for a
-----------------------------
period of five (5) years from the date hereof, he will not, directly or
indirectly solicit for employment (whether as an employee, consultant, advisor,
independent contractor or otherwise) any of the Transferred Employees (as
defined in the Asset Purchase Agreement) then employed by Purchaser or any
affiliate thereof, without the express written
94
permission of Purchaser, which permission shall be in the sole discretion of
Purchaser.
10. Use of Name. Stockholder covenants and agrees that, during the Term
-----------
of this Agreement, Stockholder shall not use "Xxxxx" or "Harry's," separately or
in combination, as the business or trade name, or for marketing purposes on
behalf of, a retail food operation; provided, however, that Stockholder shall be
permitted (but not required) to use the name "Harry's," in connection with
operation of the Hurry Stores.
11. Right to Cure. In the event of a breach of this Agreement by either
-------------
party, the other party shall give the breaching party Notice setting forth in
reasonable detail the nature of the alleged breach. The breaching party shall
then have thirty (30) days from the date of Notice to cure or otherwise
terminate the activity alleged to constitute a breach of this Agreement.
12. Enforceability. All provisions of this Agreement are intended to be
--------------
interpreted and construed in a manner making such provisions valid, legal and
enforceable. In the event any provision of this Agreement or portion thereof is
found to be wholly or partially invalid, illegal or unenforceable in any
judicial proceeding, such provision shall be deemed to be modified or restricted
to the extent necessary to make such provision valid, legal and enforceable. In
the event such provision or any portion thereof cannot be so modified or
restricted, such provision or portion thereof shall be deemed to be excised from
this Agreement and the validity, legality and enforceability of the remainder of
this Agreement shall not be affected or impaired in any manner.
13. Governing Law and Venue. This Agreement shall be governed by, and
-----------------------
construed in accordance with, the laws of the State of Georgia. Any dispute
under this Agreement shall be litigated exclusively in the state
95
or federal courts located in Atlanta, Georgia.
14. Notices. Any notices, consents, demands, requests, approvals and
-------
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and personally
delivered or sent by mail (registered or certified) or by a recognized "next-day
delivery service" (i) in the case of Purchaser, the address set forth in the
Asset Purchase Agreement and (ii) in the case of the Stockholder, the address
set forth opposite his signature hereto. Notices shall be deemed communicated as
of actual receipt or refusal of delivery.
15. Entire Agreement. This Agreement supersedes any and all other
----------------
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof and contains all of the covenants and agreements
between the parties with respect thereto.
16. Binding Effect. This Agreement shall be binding upon the parties
--------------
hereto, together with their respective executors, administrators, successors,
personal representatives, heirs and assigns.
17. Modification. No change or modification of this Agreement shall be
------------
valid or binding upon the parties hereto, nor shall any waiver of any term or
condition in the future be so binding, unless such change or modification or
waiver shall be in writing and signed by the parties hereto.
18. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall constitute an original, but all of which shall constitute one
document.
19. Costs. If any action at law or in equity is necessary to enforce or
-----
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which he or it may be
96
entitled.
20. No Set-Off. Purchaser shall not be entitled to set-off any amounts to
----------
be paid Stockholder under this Agreement by any amount which Purchaser or any
affiliate thereof may claim is due from Harry's Farmers Market, Inc. or
Stockholder under any other agreement
21. Assignment. Purchaser shall have the right to assign this Agreement
----------
to its successors or assigns. The terms "successors" and "assigns" shall include
any person, corporation, partnership or other entity that buys all or
substantially all of Purchaser's assets or all of its stock, or with which
Purchaser merges or consolidates. The rights, duties and benefits to Stockholder
hereunder are personal to him, and the benefits of this agreement can be
assigned but the obligations hereunder may not be assigned by him.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Whole Foods Market Group, Inc.
By:___________________________
97
_____________________________
Xxxxx X. Blazer
Address:
with a copy to:
Xxxx X. Xxxxxx
Xxxxxx & Bird, LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
98
Exhibit J
UPON RECORDING RETURN TO:
Xxxxxxx Xxxxxx LLP
Tower 1, Suite 1000
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx Xxxxx, Esq.
LIMITED WARRANTY DEED
---------------------
[INSERT NAME OF PROPERTY]
-------------------------
STATE OF GEORGIA
COUNTY OF _____________________
THIS INDENTURE, made as of _________________, 2001, between HARRY'S FARMERS
MARKET, INC., a Georgia corporation [OPTION(C0BB): KARALEA, INC., a Georgia
corporation ENDOPTION] (herein called "Grantor"), whose mailing address is 0000
Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 and WHOLE FOODS MARKET GROUP, INC.,
a Delaware corporation [OPTION (XXXX): new entity formed by wf] (herein called
"Grantee"), whose mailing address is 000 X. Xxxxx Xxxx., Xxxxx 000, Xxxxxx,
Xxxxx 00000
WITNESSETH: That Grantor, for and in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration, paid in hand at and
before the sealing and delivery of these presents, the receipt and sufficiency
of which are hereby acknowledged, has granted, bargained, sold, aliened,
conveyed and confirmed and by these presents does grant, bargain, sell, alien,
convey and confirm unto Grantee all that tract or parcel of land described on
Exhibit A, attached hereto and made a part hereof.
---------
TO HAVE AND TO HOLD the said bargained premises, together with all and
singular Seller's right, title and interest, if any, in the rights, privileges,
easements and appurtenances thereof, all improvements located thereon, and all
mineral and water rights, easements, rights-of-way and other appurtenances used
or connected with the beneficial use or enjoyment thereof, to the same being,
belonging or in any wise appertaining, to the only proper use, benefit and
behoof of Grantee, forever, IN FEE SIMPLE.
This Deed and the warranty of title contained herein are made expressly
subject to the items set forth on Exhibit B attached hereto and made a part
---------
hereof.
Grantor will warrant and forever defend the right and title to the above
described property unto Grantee against the lawful claims of all persons owning,
holding or claiming by, through or under Grantor, but not otherwise.
99
(The words "Grantor" and "Grantee" include all genders, plural and
singular, and their respective heirs, successors and assigns where the context
requires or permits.)
[SIGNATURES APPEAR ON NEXT PAGE]
100
IN WITNESS WHEREOF, Grantor has signed and sealed this deed, the day and
year first above written.
Signed, sealed and delivered in
the presence of:
HARRY'S FARMERS MARKET, INC., a
Georgia corporation [OPTION(C0BB):
_______________________________ KARALEA, INC., a Georgia
Unofficial Witness corporation ENDOPTION]
_______________________________ By: _____________________________
Notary Public Name: ________________________
Title: _______________________
(NOTARY SEAL)
My Commission Expires:
_______________________________
101
Exhibit K
XXXX OF SALE
------------
THIS XXXX OF SALE ("Xxxx of Sale"), is made as of ________________, 2001 by
------------
and between HARRY'S FARMERS MARKET, INC., a Georgia corporation [OPTION(C0BB):
KARALEA, INC., a Georgia corporation ENDOPTION] ("Seller") and WHOLE FOODS
------
MARKET GROUP, INC., a Delaware corporation ("Buyer").
-----
WHEREAS, in accordance with the terms of that certain Asset Purchase
Agreement (the "Sale Agreement") dated as of _________________________ by and
--------------
between Buyer and Seller, Seller agreed to sell to Buyer certain real property,
and the improvements located thereon (the "Owned Real Property") as more
-------------------
particularly described in Exhibit A attached thereto and incorporated herein by
---------
this reference; and
WHEREAS, by that certain Sale Agreement, Seller further agreed to assign to
Buyer, and Buyer has further agreed to assume from Seller, Seller's interest in
and to that certain Warehouse Lease dated March 16, 2000 (the "Distribution
Lease") between Xxxxx Investments, a Georgia corporation and Seller for space in
the improvements located on that certain real property ("Leased Real Property")
--------------------
as more particularly described in Exhibit B attached thereto and incorporated
---------
herein by this reference; and
WHEREAS, by limited warranty deed of even date herewith, Seller conveyed
the Owned Real Property to Buyer; and
WHEREAS, in accordance with the terms of that certain Assignment and
Assumption Agreement, Distribution Center between the parties hereto and of even
date herewith, Seller assigned to Buyer, and Buyer assumed from Seller, Seller's
interest in the Distribution Lease; and
WHEREAS, in connection with the above described conveyance and assignment
Seller desires to sell, transfer and convey to Buyer certain items of tangible
personal property as hereinafter described.
NOW, THEREFORE, in consideration of the receipt of TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration paid in hand by Buyer to
Seller, the receipt and sufficiency of which are hereby acknowledged, Seller has
GRANTED, CONVEYED, SOLD, TRANSFERRED, SET OVER and DELIVERED and by these
presents does hereby GRANT, SELL, TRANSFER, SET OVER and DELIVER to Buyer, its
legal representatives, successors and assigns, all of its right, title and
interest in and to the following:
a. All "Personal Property - Owned Real Estate" (as such term is defined
in the Sale Agreement) to the extent owned by Seller, used in the operation of
Seller's business and located on or attached to the Owned Real Property, to have
and to hold, all and singular, the Personal Property - Owned Real Estate unto
Buyer forever.
b. All "Personal Property - Leased Real Estate" (as such term is defined
in the Sale Agreement) to the extent owned by Seller, used in the operation of
Seller's business and located on or attached to the Leased Real Property, to
have and to hold, all and singular, the Personal
102
Property - Leased Real Estate unto Buyer forever.
c. All of Seller's rights, privileges, easements and appurtenances, if
any, to the "Real Estate" (as such term is defined in the Sale Agreement) and to
the improvements located thereon, including, without limitation, all of Seller's
right, title and interest in and to all mineral and water rights and all
easements, rights-of-way and other appurtenances used or connected with the
beneficial use or enjoyment of the Real Estate.
d. All "Property Documents" (as such term is defined in the Sale
Agreement, which definition specifically excludes the "Excluded Materials," as
such term is defined in the Sale Agreement).
e. All of Seller's right, title and interest, to the extent assignable,
in and to any guarantees, licenses, approvals, certificates, permits, and
machinery and equipment warranties relating to the Real Estate or necessary to
the operation of the "Stores" (as such term is defined in the Sale Agreement).
f. All "Books and Records" (as such term is defined in the Sale
Agreement, which definition specifically excludes the "Excluded Materials," as
such term is defined in the Sale Agreement).
g. All inventory of the Stores, whether on location or in transit as of
the Closing Date, to the extent Buyer may legally purchase such inventories.
h. All cash on hand at the Stores and accounts receivable related to the
Stores to the extent not collected by Seller prior to the Closing Date.
This Xxxx of Sale is subject to the terms and conditions of the Sale
Agreement pertaining to the foregoing items transferred hereby.
This Xxxx of Sale is made without any covenant, warranty or representation
by, or recourse against, Seller except as expressly set forth in the Sale
Agreement.
This Xxxx of Sale may be executed in counterparts, each of which shall be
an original and all of which counterparts taken together shall constitute one
and the same agreement.
If any term or provision of this Xxxx of Sale or the application thereof to
any persons or circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Xxxx of Sale or the application of such term or provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Xxxx of Sale shall be valid and enforced to the fullest extent permitted by law.
This Xxxx of Sale and the obligations of the parties hereunder shall be
binding upon and inure to the benefit of the parties hereto, their respective
legal representatives, successors and assigns, shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made and to be wholly performed within said State and may not be
modified or amended in any manner other than by
103
a written agreement signed by the party to be charged therewith.
[SIGNATURES APPEAR ON NEXT PAGES]
104
IN WITNESS WHEREOF, the undersigned have executed this Xxxx of Sale as
of the date first set forth hereinabove.
HARRY'S FARMERS MARKET, INC., a
Georgia corporation [OPTION(C0BB):
KARALEA, INC., a Georgia
corporation ENDOPTION]
By: _____________________________
Name: _______________________
Title: ______________________
ACCEPTED:
WHOLE FOODS MARKET GROUP, INC., a
Delaware corporation
By: _____________________________
Name: _______________________
Title: ______________________
105
Exhibit L
ASSIGNMENT OF INTELLECTUAL PROPERTY
-----------------------------------
THIS ASSIGNMENT OF INTELLECTUAL PROPERTY ("Assignment") dated ____________,
2001 ("Effective Date") is by and between HARRY'S FARMERS MARKET, INC. and
KARALEA, INC. (collectively "Seller") and WHOLE FOODS MARKET GROUP, INC.
("Buyer").
Recitals
--------
A. In accordance with the terms of that certain Asset Purchase Agreement
(the "Asset Purchase Agreement") dated as of August __, 2001 by and between
Seller and Buyer, Seller, as their individual interests appear of record, has or
will simultaneously with the execution and delivery of this Agreement sell and
transfer to Buyer certain assets described in the Asset Purchase Agreement.
Capitalized terms not specifically defined herein shall have the meanings
ascribed in the Asset Purchase Agreement.
B. Pursuant to the Asset Purchase Agreement, Buyer agreed to assume
certain specified intangible personal property from Seller from and after the
Effective Date hereof on the terms and conditions herein contained.
COVENANTS
---------
Now, therefore, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:
106
1. ASSIGNMENT. EFFECTIVE AS OF THE EFFECTIVE DATE, SELLER HEREBY
----------
ASSIGNS TO BUYER ALL OF SELLER'S RIGHT, TITLE AND INTEREST IN AND TO THE
INTANGIBLE PERSONAL PROPERTY (AS DEFINED IN THE ASSET PURCHASE AGREEMENT),
INCLUDING WITHOUT LIMITATION, THE INTELLECTUAL PROPERTY (AS DEFINED IN THE ASSET
PURCHASE AGREEMENT) ON THE TERMS AND CONDITIONS OF THE ASSET PURCHASE AGREEMENT.
2. MISCELLANEOUS. THIS ASSIGNMENT AND THE OBLIGATIONS OF THE PARTIES
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HEREUNDER SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO,
THEIR RESPECTIVE LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED WITHIN SAID STATE AND
MAY NOT BE MODIFIED OR AMENDED IN ANY MANNER OTHER THAN BY A WRITTEN AGREEMENT
SIGNED BY THE PARTY TO BE CHARGED THEREWITH.
3. SEVERABILITY. IF ANY TERM OR PROVISION OF THIS ASSIGNMENT OR THE
------------
APPLICATION THEREOF TO ANY PERSONS OR CIRCUMSTANCES SHALL, TO ANY EXTENT, BE
INVALID OR UNENFORCEABLE, THE REMAINDER OF THIS ASSIGNMENT OR THE APPLICATION OF
SUCH TERM OR PROVISION TO PERSONS OR CIRCUMSTANCES OTHER THAN THOSE AS TO WHICH
IT IS HELD INVALID OR UNENFORCEABLE SHALL NOT BE AFFECTED THEREBY, AND EACH TERM
AND PROVISION OF THIS ASSIGNMENT SHALL BE VALID AND ENFORCED TO THE FULLEST
EXTENT PERMITTED BY LAW.
4. COUNTERPARTS. THIS ASSIGNMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
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OF WHICH SHALL BE AN ORIGINAL AND ALL OF WHICH COUNTERPARTS TAKEN TOGETHER SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.
107
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS ASSIGNMENT AS OF THE
DATE FIRST ABOVE WRITTEN.
SELLER:
HARRY'S FARMERS MARKET, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
KARALEA, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
ACCEPTED:
BUYER:
WHOLE FOODS MARKET GROUP, INC.
_______________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
108
