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Asset Purchase Agreement

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Title:

Asset Purchase Agreement

Entities:

Spartan Stores, Inc.

Date:

2003

Size:

Preview shows 26KB of 195KB total

Price:

$61

ID:

#1168410

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
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ASSET PURCHASE AGREEMENT

by and among

THE H.T. HACKNEY CO.

and

SPARTAN STORES, INC.
L&L/JIROCH DISTRIBUTING COMPANY
J.F. WALKER COMPANY, INC.

Dated May 7, 2003

TABLE OF CONTENTS

1. DEFINITIONS AND USAGE

1.1 Definitions	1
1.2 Usage	10

2. SALE AND TRANSFER OF ASSETS; CLOSING

2.1 Assets to Be Sold	11
2.2 Excluded Assets	12
2.3 Consideration	13
2.4 Liabilities	13
2.5 Allocation	15
2.6 Closing	15
2.7 Closing Obligations	15
2.8 Adjustment Amount and Payment	17
2.9 Adjustment Procedure	17
2.10 Consents	19
2.11 Disclaimer of Implied Warranties	19

3. REPRESENTATIONS AND WARRANTIES OF SPARTAN

3.1 Organization and Good Standing	19
3.2 Enforceability; Authority; No Conflict	19
3.3 Financial Statements	20
3.4 [Reserved]	20
3.5 Sufficiency of Assets	21
3.6 Description of Owned Real Property	21
3.7 Title to Assets; Encumbrances	21
3.8 Condition of Facilities	21
3.9 Accounts Receivable	21
3.10 Inventory	22
3.11 No Undisclosed Liabilities	22
3.12 Taxes	22
3.13 No Material Adverse Change	22
3.14 Employee Benefits	22
3.15 Compliance with Legal Requirements; Governmental Authorizations	22
3.16 Legal Proceedings; Orders	23
3.17 Absence of Certain Changes and Events	24
3.18 Contracts; No Defaults	24
3.19 Insurance	26
3.20 Environmental Matters	26
3.21 Employees	27
3.22 Labor Disputes; Compliance	27
3.23 Intellectual Property Assets	28
3.24 Brokers or Finders	29
3.25 Solvency	29

4. REPRESENTATIONS AND WARRANTIES OF HACKNEY

4.1 Organization and Good Standing	29
4.2 Authority; No Conflict	29
4.3 Certain Proceedings	30
4.4 Brokers or Finders	30
4.5 Financing	30

5.COVENANTS OF SPARTAN PRIOR TO CLOSING

5.1 Access and Investigation	30
5.2 Operation of the Business of Spartan	31
5.3 Negative Covenant	31
5.4 Required Approvals	31
5.5 Notification	32
5.6 No Negotiation	32
5.7 Commercially Reasonable Efforts	32
5.8 Interim Financial Statements	32
5.9 Change of Name	32
5.10 Bulk Transfer	32
5.11 Current Evidence of Title	32
5.12 Distribution Agreements	34

6. COVENANTS OF HACKNEY PRIOR TO CLOSING

6.1 Required Approvals	34
6.2 Commercially Reasonable Efforts	35
6.3 Notification	35

7. CONDITIONS PRECEDENT TO HACKNEY'S OBLIGATION TO CLOSE

7.1 Accuracy of Representations	35
7.2 Spartan's Performance	35
7.3 Consents	35
7.4 Additional Documents	35
7.5 No Injunction	36
7.6 No Proceedings	36
7.7 No Conflict	36
7.8 Title Insurance	36
7.9 Governmental Authorizations	36
7.10 Distribution Agreement	36
7.11 Employees	37

8. CONDITIONS PRECEDENT TO SPARTAN'S OBLIGATION TO CLOSE

8.1 Accuracy of Representations	37
8.2 Hackney's Performance	37
8.3 Consents	37

8.4 Additional Documents	37
8.5 No Injunction	37
8.6 No Proceedings	37
8.7 Distribution Agreements	37

9. TERMINATION

9.1 Termination Events	38
9.2 Effect of Termination	38

10. ADDITIONAL COVENANTS

10.1 Employees and Employee Benefits	39
10.2 Post-Closing Matters	41
10.3 Payment of Transfer Taxes Resulting from Sale of Assets by Spartan	42
10.4 Reports and Returns	42
10.5 Noncompetition, Nonsolicitation and Nondisparagement	42
10.6 Assistance in Proceedings	43
10.7 Customer and Other Business Relationships	43
10.8 Retention of and Access to Records	43
10.9 Further Assurances	43
10.10 Sales to Spartan Customers	44
10.11 Michigan Tobacco Tax Payable	44
10.12 Spartan Contracts Not Included Among Business Contracts	44

11. INDEMNIFICATION; REMEDIES

11.1 Survival	44
11.2 Indemnification and Reimbursement by Spartan	44
11.3 Indemnification and Reimbursement by Spartan--Environmental Matters	45
11.4 Indemnification and Reimbursement by Hackney	46
11.5 Limitations on Amount--Spartan	46
11.6 Limitations on Amount--Hackney	46
11.7 Time Limitations	47
11.8 Third-Party Claims	47
11.9 Other Claims	48
11.10 Indemnification in Case of Strict Liability or Indemnitee Negligence	48
11.11 Additional Limitations on Indemnification	49
11.12 Remedies Exclusive	49
11.13 Indemnification Based on Tobacco Sales	50

12. GENERAL PROVISIONS

12.1 Expenses	50
12.2 Public Announcements	50
12.3 Notices	51
12.4 Waiver	51
12.5 Entire Agreement and Modification	52
12.6 Disclosure Letter	52
12.7 Assignments, Successors and No Third-Party Rights	52
12.8 Severability	52

iii

12.9 Construction	53
12.10 Time of Essence	53
12.11 Governing Law	53
12.12 Waiver of Jury Trial	53
12.13 Execution of Agreement	53

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as of May 7, 2003, by and among THE H.T. HACKNEY CO., a Tennessee corporation ("Hackney"); and SPARTAN STORES, INC., a Michigan corporation ("Spartan"), L&L/JIROCH DISTRIBUTING COMPANY, a Michigan corporation ("Jiroch"), and J.F. WALKER COMPANY, INC., a Michigan corporation ("Walker").

RECITALS

Two of Spartan's subsidiaries, Jiroch and Walker, are engaged in the wholesale distribution of cigarettes, cigars, tobacco, tobacco products, candy, food, health and beauty care products, and other products to convenience stores (the "Business"). Spartan, Jiroch and Walker desire to sell, and Hackney desires to purchase, the Assets of the Business for the consideration and on the terms set forth in this Agreement.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the above premises, the mutual covenants hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

ARTICLE 1
DEFINITIONS AND USAGE

1.1 Definitions. For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Article 1:

"Accounts Receivable" means (a) all trade accounts receivable and other rights to payment of Jiroch and Walker from customers of the Business and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered by Jiroch and Walker to customers of the Business, (b) all other accounts or notes receivable of Jiroch and Walker related to the Business and the full benefit of all security for such accounts or notes and (c) any claim, remedy or other right related to any of the foregoing.

"Active Employees" has the meaning provided in Section 10.1(a).

"Adjustment Amount" has the meaning provided in Section 2.8.

"Agreement" has the meaning provided in the first paragraph of this Agreement.

"Appurtenances" means all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of the Land, including all easements appurtenant to and for the benefit of any Land (a "Dominant Parcel") for, and as the primary means of access between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

"Assets" has the meaning provided in Section 2.1.

"Assignment and Assumption Agreement" has the meaning provided in Section 2.7(a)(ii).

"Assumed Liabilities" has the meaning provided in Section 2.4(a).

"Bill of Sale" has the meaning provided in Section 2.7(a)(i).

"Breach" means any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of this Agreement or any other Contract, or any event which with the passing of time or the giving of notice, or both, would constitute such a breach, inaccuracy or failure.

"Bulk Sales Laws" has the meaning provided in Section 5.10.

"Business" means the wholesale distribution of cigarettes, cigars, tobacco, tobacco products, candy, food, health and beauty care products, and other products to convenience stores conducted and operated by Jiroch and Walker.

"Business Contract" means any Contract of Jiroch or Walker (or of Spartan or any Spartan Subsidiary, if exclusively for the benefit of Jiroch or Walker) related to the Business (a) under which Jiroch or Walker has or may acquire any rights or benefits; (b) under which Jiroch or Walker has or may become subject to any obligation or liability; or (c) by which Jiroch or Walker or any of the Assets is or may become bound.

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