ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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ASSOCIATED GROCERS, INCORPORATED | UNIFIED WESTERN GROCERS, INC

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Washington Date: 8/14/2007
Law Firm: Stoel Rives;Davis Wright

ASSET PURCHASE AGREEMENT, Parties: associated grocers incorporated , unified western grocers inc

EXHIBIT 10.70

CONFIDENTIAL TREATMENT REQUESTED:

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “[REDACTED]”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASSET PURCHASE AGREEMENT

between

UNIFIED WESTERN GROCERS, INC.

and

ASSOCIATED GROCERS, INCORPORATED

and

ITS SUBSIDIARIES

Dated as of August 2, 2007

TABLE OF CONTENTS

CONFIDENTIAL TREATMENT REQUESTED:


		Page

ARTICLE 1	DEFINITIONS AND INTERPRETATION

Section 1.01	Definitions

Section 1.02	Interpretation

ARTICLE 2	THE CONTRIBUTION

Section 2.01	The Contribution

Section 2.02	Contribution Closing

Section 2.03	Events of Contribution Closing

ARTICLE 3	PURCHASE AND SALE OF ASSETS

Section 3.01	Purchase and Sale

Section 3.02	Excluded Assets

Section 3.03	Assumption of liabilities

Section 3.04	Retained Liabilities

Section 3.05	Purchase Price; Adjustment

Section 3.06	Allocation of Purchase Price

Section 3.07	Further Assurances

Section 3.08	Washington State Taxes

Section 3.09	Closing

Section 3.10	Events of Closing

ARTICLE 4	REPRESENTATIONS AND WARRANTIES OF THE AG COMPANIES

Section 4.01	Organization

Section 4.02	Authority and Enforceability

Section 4.03	No Violation; Consents

Section 4.04	Financial Statements

Section 4.05	No Material Adverse Effect

Section 4.06	No Changes

Section 4.07	Conduct of the Company Business

Section 4.08	Real Property

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Section 4.09	Tangible Property

Section 4.10	Intellectual Property Rights

Section 4.11	Material Contracts

Section 4.12	Compliance with Law

Section 4.13	Material Permits

Section 4.14	Insurance

Section 4.15	Litigation

Section 4.16	Taxes

Section 4.17	Employee Benefits

Section 4.18	Employment Matters

Section 4.19	Labor Relations

Section 4.20	Environmental Matters

Section 4.21	Customers

Section 4.22	Suppliers

Section 4.23	Brokers and Finders Fees

Section 4.24	Inventory

Section 4.25	Acquired Receivable

Section 4.26	Product Warranties; Products Liability

Section 4.27	Solvency

Section 4.28	WARN Act

Section 4.29	No Other Representations

ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF PURCHASER

Section 5.01	Organization

Section 5.02	Authority and Enforceability

Section 5.03	No Violation

Section 5.04	Brokers and Finders Fees

Section 5.05	Funding

Section 5.06	Litigation

Section 5.07	Due Diligence Investigation

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CONFIDENTIAL TREATMENT REQUESTED:


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ARTICLE 6	CONDUCT PRIOR TO THE CLOSING

Section 6.01	Affirmative Covenants of the Company

Section 6.02	Negative Covenants of the Company

Section 6.03	Consents

Section 6.04	Company Shareholder Approval

Section 6.05	Access to Information

Section 6.06	Public Disclosure

Section 6.07	HSR Compliance

Section 6.08	Non-Solicitation

Section 6.09	Proposals

ARTICLE 7	ADDITIONAL COVENANTS

Section 7.01	Expenses

Section 7.02	Tax Matters

Section 7.03	Employees

Section 7.04	Real Estate Documents

Section 7.05	SAS 100 Review

Section 7.06	Collection of Accounts Receivable

Section 7.07	Membership in Purchaser

Section 7.08	Access to Information; Transition Services

ARTICLE 8	CONDITIONS TO THE ACQUISITION

Section 8.01	Conditions to Each Party’s Obligation to Effect the Acquisition

Section 8.02	Additional Conditions to the Obligations of Purchaser

Section 8.03	Additional Conditions to the Obligations of the AG Companies

ARTICLE 9	TERMINATION, AMENDMENT AND WAIVER

Section 9.01	Termination

Section 9.02	Effect of Termination

Section 9.03	Termination Fee

Section 9.04	Amendment

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Section 9.05	Extension; Waiver

ARTICLE 10	GENERAL PROVISIONS

Section 10.01	Survival and Survival Exclusive Remedies

Section 10.02	Notices

Section 10.03	Disclosure Schedules

Section 10.04	Entire Agreement; No Assignment; No Third Party Beneficiaries

Section 10.05	Severability

Section 10.06	Specific Performance

Section 10.07	Waiver of Jury Trial

Section 10.08	Governing Law; Venue

Section 10.09	No Personal Liability

Section 10.10	Counterparts

Section 10.11	Attorneys’ Fees

Exhibit A	Definitions

Exhibit B	Form of Bill of Transfer*

Exhibit C	Form of Assignment of LLC Interests*

Exhibit D	Form of Bill of Sale*

Exhibit E	Form of Assignment and Assumption Agreement*

Exhibit F	Form of Norfolk Lease Assignment and Assumption Agreement*

Exhibit G	Form of Intercreditor Agreement*

Exhibit H	Form of Escrow Agreement*

Exhibit I	Form of Estoppel Certificate*

Exhibit J	Form of Supply Agreement*

Exhibit K	Company Knowledge Group*

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CONFIDENTIAL TREATMENT REQUESTED:

INDEX OF SCHEDULES

Asset Purchase Agreement between Unified Western Grocers, Inc.

and Associated Grocers, Incorporated and its Subsidiaries


		Page

Schedule 2.01(a) —All tangible personal property.*

Schedule 3.01(a) —All real property.*

Schedule 3.01(b) —Leases of real property.*

Schedule 3.01(c) —All contracts, agreements, indentures, mortgages, instruments, guarantees, commitments, understandings, purchase orders, sales orders, documents and instruments.*

Schedule 3.01(d) —All patents, trademarks, trade names, copyrights and service marks; registrations therefore, applications pending therefore; other proprietary rights and intangible property of the AG Companies, including trade secrets, technology, software, internet mail sites, internet domain names, operating systems, customer lists, customer relationships, know–how, formulae, slogans, processes and operating rights.*

Schedule 3.01(e) —All licenses and agreements relating to any items described in Section 3.01(d) or to other proprietary rights transferred hereby.*

Schedule 3.01(f) —To the extent transferable and permitted by law, all approvals, authorizations, certificates, consents, licenses, permits, franchises, tariffs, variances, orders and other registrations of any federal, state or local court or other governmental department, commission, board, bureau, agency or instrumentality held by the Company or any of the Subsidiaries and required for the conduct of the Business.*

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CONFIDENTIAL TREATMENT REQUESTED:


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Schedule 3.01(g) —Notes and other receivables.*

Schedule 3.01(k) —All assignable rights to all telephone lines and numbers used in the conduct of the Business.*

Schedule 3.02(c) —Items to be included in Excluded Assets.*

Schedule 3.03(a) —Items to be included in Purchaser’s Assumed Liabilities.*

Schedule 3.03(d) —Assumed Plans.*

Schedule 3.05(b)(1) —Purchased Working Capital.*

Schedule 3.05(b)(2) —Reserves.*

Schedule 3.06 —Method for Allocation of Purchase Price.*

Company Disclosure Schedule*

4.04(a)—Financial Statements.*

4.05—No Material Adverse Effect.*

4.06—No Changes.*

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CONFIDENTIAL TREATMENT REQUESTED:


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4.07—Conduct of the Business.*

4.08(a)(1)—Owned Real Property.*

4.08(b)—Leased Real Property.*

4.08(c)—Loans and Mortgages.*

4.09—Tangible Property. *

4.10—Material IP Rights.*

4.11—Material Contracts.*

4.12—Compliance with Law.*

4.13—Material Permits.*

4.14—Insurance policies.*

4.15—Litigation.*

4.16—Taxes.*

4.17—Employee Benefits.*

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4.18—Employment Matters.*

4.19—Labor Relations.*

4.20—Environmental Matters.*

4.21—Customers.*

4.22—Suppliers.*

4.23—Brokers and Finders Fees.*

4.24—Inventory. *

4.25—Acquired Accounts Receivable.*

4.26—Product warranties; Product Liability.*

4.27—Solvency.*

4.28—WARN Act.*

6.02—Negative Covenants of the Company.*

8.01(e)—Required Consents.*

*	Intentionally Omitted. Omitted exhibits and schedules will be furnished to the SEC or SEC staff upon request.

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CONFIDENTIAL TREATMENT REQUESTED:

ASSET PURCHASE AGREEMENT


Dated:	August 2, 2007

Among:	Associated Grocers, Incorporated, a Washington corporation	“ Company ”

	Supermarket Development Corporation Market Finance Company MFC Capital-I, Ltd. MFC 2002, LLC AGIC Insurance Agency, Inc. Market Industrial Relations Services, Inc. Market Sales, Inc. Sea-Pac Freight Lines, Inc. Supermarket Management Corporation Red Apple Stores, Inc. Thriftway Stores, Inc. AU Dropdown LLC	Each a “ Subsidiary ” and together with the Company, the “ AG Companies ”

And:	Unified Western Grocers, Inc., a California corporation	“ Purchaser ”

Recitals

A. The AG Companies (other than the LLC) desire to sell, and Purchaser desires to purchase and assume, specified assets and specified liabilities of the AG Companies, including the limited liability company interests of AU Dropdown LLC (the “ LLC ”), which is wholly owned by the Company, on the terms and conditions set forth in this Agreement (the “ Acquisition ”) and, in furtherance thereof, the AG Companies and Purchaser have approved the execution, delivery, and performance of this Agreement and the other agreements contemplated herein.

B. The parties desire to make certain representations, warranties, covenants, and agreements in connection with the Acquisition and to prescribe various conditions to the completion thereof, all as further set forth herein.

Agreement

Accordingly, the parties, intending legally to be bound, agree as follows:

CONFIDENTIAL TREATMENT REQUESTED:

Article 1

Definitions And Interpretation

Section 1.01 Definitions . Capitalized terms used herein have the meanings set forth in this Agreement or Exhibit A hereto.

Section 1.02 Interpretation . The following rules of interpretation apply throughout this Agreement:

(a) The word “or” is used in the inclusive sense of “and/or”. The word “including” (and “include” and variations thereof) means including without limiting the generality of any description preceding such term. The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b) The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Except as otherwise indicated, all references in this Agreement to Articles, Sections, and Exhibits are intended to refer to Articles or Sections of this Agreement and Exhibits to this Agreement.

(c) The singular number shall include the plural, the plural shall include the singular, and the use of any gender shall be applicable to both genders.

(d) Unless otherwise specified, all references to monetary amounts are to currency of the United States of America.

(e) Unless otherwise specified, all terms of an accounting character used but not defined in this Agreement shall be interpreted in accordance with GAAP, applied on a basis consistent with the most recent audited consolidated financial statements of the Company.

(f) When calculating the period of time before which, within which or following which any act is to be done or step is to be taken under this Agreement, the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

(g) The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual agreement; any Law, regulation, or rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

CONFIDENTIAL TREATMENT REQUESTED:

Article 2

The Contribution

Section 2.01 The Contribution . Subject to all the terms and conditions of this Agreement, on the Closing Date and effective immediately prior to the purchase of assets under Section 3.01, the Company shall contribute or cause to be contributed to the LLC, as a contribution of capital and for no consideration other than the limited liability company interests in the LLC (the “ LLC Interests ”), and cause the LLC to accept and assume from the Company, all right, title and interest of the Company (other than the Excluded Assets specified in Section 3.02(a)-(m)) to the following assets (the “ Contributed Assets ”):

(a) All items of tangible personal property of the AG Companies, including furniture, fixtures, equipment, materials, supplies, motor vehicles and spare and replacement items therefore, including all such items listed on Schedule 2.01(a) and all such items acquired by the AG Companies after the date hereof and on or before the Closing Date, other than to the extent such items are disposed of by any of the AG Companies prior to the Closing Date without breach of this Agreement; and

(b) All inventory (the “ Inventory ”) wherever located, provided that the term “Inventory” excludes inventory associated exclusively with the Larry’s Market store located in Redmond, Washington (the “ Retail Store ” ) .

Section 2.02 Contribution Closing . The closing of the Contribution will take place immediately prior to the Closing.

Section 2.03 Events of Contribution Closing . Immediately prior to the Closing, (a) the Company shall deliver to the LLC a bill of transfer in substantially the form attached as Exhibit B , transferring the Contributed Assets to the LLC, executed by the Company and (b) the LLC shall deliver to the Company a Washington State Department of Revenue resale certificate.

Article 3

Purchase And Sale Of Assets

Section 3.01 Purchase and Sale . Subject to all the terms and conditions of this Agreement and for the consideration herein stated, on the Closing Date, the AG Companies agree to sell, convey, assign, transfer and deliver to Purchaser, and Purchaser agrees to purchase and accept from the AG Companies, all of the right, title and interest of the AG Companies in and to all of the assets, properties and rights of the AG Companies (other than the Contributed Assets and the other Excluded Assets specified in Section 3.02), tangible and intangible, wherever located, including all such assets used in the wholesale distribution business serving independent grocery retailers in Washington, Oregon, Alaska, Hawaii and Micronesia (the

CONFIDENTIAL TREATMENT REQUESTED:

“ Business ”) now owned and operated by the Company, which assets (the “ Purchased Assets ”) shall include without limitation the following assets (other than the Excluded Assets):

(a) All real property owned in fee by any of the AG Companies, including land, improvements and fixtures thereon, easements, rights-of-way and other real property rights, including all such real property listed on Schedule 3.01(a) and all such real property acquired by the AG Companies after the date hereof and on or before the Closing Date, other than to the extent such items are disposed of by the AG Companies prior to the Closing Date without breach of this Agreement;

(b) The following leases of real property (collectively, the “ Leases ”): (i) the Industrial Real Estate Lease dated April 19, 2007 (the “ Norfolk Lease ”) between 3301 South Norfolk LLC as landlord and the Company as tenant for the lease of the real property commonly known as 3301 South Norfolk Street, Seattle, Washington, and (ii) the leases of real property to which any of the AG Companies is a party, whether the Company or a Subsidiary is lessor or lessee, listed on Schedule 3.01(b).

(c) All rights, benefits and interests of any of the AG Companies under all contracts, agreements, indentures, mortgages, instruments, guarantees, commitments, understandings, purchase orders, sales orders, documents and instruments (i) listed on Schedule 3.01(c) hereto, (ii) entered into in the ordinary course of the Business and that are not Material Contracts or (iii) expressly assumed by Purchaser in writing, other than (in each case) to the extent such items have terminated, expired or been disposed of by any of the AG Companies prior to the Closing Date without breach of this Agreement; provided that, except as otherwise expressly agreed in writing by Purchaser, a guarantee or other contingent obligation of the Company to support the credit of a retail customer of the Company will be excluded if the retail customer does not enter into a Supply Agreement with Purchaser at or before the Closing (collectively, the “ Contracts ”);

(d) All patents, trademarks, trade names, copyrights and service marks of any of the AG Companies, all registrations therefor, all applications pending therefor and all other proprietary rights and intangible property of the AG Companies, including trade secrets, technology, software, internet mail sites, internet domain names, operating systems, customer lists, customer relationships, know-how, formulae, slogans, processes and operating rights, including all such items listed on Schedule 3.01(d) , goodwill associated therewith, remedies against infringement thereof and rights to protection of interests therein under the laws of all jurisdictions and all such items acquired by the AG Companies or coming into existence after the date hereof and on or before the Closing Date, other than to the extent such items have terminated, expired or been disposed of by the AG Companies prior to the Closing Date without breach of this Agreement (the “ Intellectual Property ”);

(e) All licenses granted by or to any of the AG Companies and all other agreements to which any of the AG Companies is a party which relate, in whole or in part, to any items described in Section 3.01(d) or to other proprietary rights transferred hereby,

CONFIDENTIAL TREATMENT REQUESTED:

including all items listed on Schedule 3.01(e) and all such items granted to or entered into by any of the AG Companies after the date hereof and on or before the Closing Date, other than to the extent such items have terminated, expired or been disposed of by any of the AG Companies prior to the Closing Date without breach of this Agreement (the “ Intellectual Property Rights ”);

(f) To the extent transferable and permitted by law, all approvals, authorizations, certificates, consents, licenses, permits, franchises, tariffs, variances, orders and other registrations of any federal, state or local court or other governmental department, commission, board, bureau, agency or instrumentality held by the Company or any of the Subsidiaries and required for the conduct of the Business, including all such items listed on Schedule 3.01(f) and all such items granted or received after the date hereof and on or before the Closing Date, other than to the extent such items have terminated, expired or been disposed of by the Company or any of the Subsidiaries prior to the Closing Date without breach of this Agreement (the “ Permits ”);

(g) The notes and other receivables of any of the AG Companies listed on Schedule 3.01(g) and the other receivables of the AG Companies that are not Excluded Accounts Receivable, in each case excluding amounts paid on or before the Closing Date in the ordinary course according to the terms of the note or other receivable without acceleration (“ Acquired Receivables ”);

(h) All claims, refunds, rights of recovery, rights of set-off, rights of recoupment, choses in action, causes of action, property insurance proceeds, condemnation awards, proceeds from any contests or contested payments and other similar rights of any of the AG Companies to the extent related to the Purchased Assets or the Contributed Assets;

(i) All prepaid and deferred items of the AG Companies (other than deferred tax assets), including prepaid rent and unbilled charges and deposits relating to the Business, the Purchased Assets or the Contributed Assets, including all such items reflected on the Financial Statements;

(j) All operating data and records to the extent related to the Business, including financial, accounting and credit records, original records relating to the LLC (including its articles of formation, operating agreement and minutes of its sole member and manager), correspondence, budgets, engineering and plant records and other similar documents and records and all creative materials, advertising and promotional materials, studies, reports and other similar documents and materials;

(k) All assignable rights, if any, to all telephone lines and numbers used in the conduct of the Business, including those listed on Schedule 3.01(k) ;

CONFIDENTIAL TREATMENT REQUESTED:

(l) All assets, wherever located, used exclusively in the insurance agency operations of any of the AG Companies (excluding Excluded Accounts Receivable as defined below);

(m) All cash and cash equivalents of the AG Companies except as provided in Section 3.02(m);

(n) All rights to recover amounts any of the AG Companies paid or expensed in calendar years 2006 and 2007 to a vendor that is recoverable following an audit of such amounts;

(o) All deposits and other collateral (i) of each retail customer of the Company that enters into a Supply Agreement with Purchaser at or before the Closing or whose supply agreement is assumed by Purchaser, which deposit or other collateral secures open account balances with any AG Company and (ii) that secures a Purchased Asset or an Assumed Liability, provided that such deposits and other collateral shall be subject to the intercreditor agreement described in Section 3.10(a)(5) and the applicable assignment and assumption agreement described in Section 3.10(a)(3); and

(p) The LLC Interests and the limited liability company interests in AG/Fleming Northwest, LLC.

Section 3.02 Excluded Assets . The Purchased Assets shall not include the following (the “ Excluded Assets ”):

(a) The corporate seal, minute books, charter documents and corporate stock record books of each of the AG Companies (except for the LLC) and copies of all other records of any kind;

(b) Any contract, agreement, indenture, mortgage, instrument, guaranty, commitment, understanding, purchase order, sales order, document or instrument that is not described in Section 3.01(c);

(d) Any deferred tax assets;

(e) All leases or subleases that are not described in Section 3.01(b); all rights, benefits and interests of any of the AG Companies under or relating to any of the foregoing; any deposit relating exclusively to any of the foregoing; any guaranties to secure any of the foregoing; and all records, databases and software programs relating exclusively to or used exclusively in connection with any of the foregoing, including the Access and Timberline databases and software programs;

CONFIDENTIAL TREATMENT REQUESTED:

(f) All accounts receivable or other receivables of any of the AG Companies that are due within 60 days of the Closing Date (the “ Excluded Accounts Receivable ”);

(g) All rebates, promotions, warehouse directed funds, discounts, vendor programs, patronage dividends and similar items which are in existence as of Closing or are attributable to conduct of the Business before Closing and which the AG Companies treat as discretionary funds consistent with their historical practices (the “ Discretionary Funds ”);

(h) All inventories that do not constitute Inventory;

(i) All assets, wherever located, used primarily in the Retail Store;

(j) All rights and claims associated with all litigation ongoing as of the Closing, including SuperValu Inc. v. Associated Grocers, Inc. (Civil File No. 04-2936), in the United States District Court for the District of Minnesota (the “ SUPERVALU Litigation ”), and In re Brown and Cole Stores, LLC, Case No. 06-13950, pending in the United States Bankruptcy Court for the Western District of Washington (the “ Brown and Cole Litigation ”);

(k) (A) All claims, refunds, rights of recovery, rights of set-off, rights of recoupment, choses in action, causes of action, property insurance proceeds, condemnation awards, proceeds from any contests or contested payments and other similar rights of any of the AG Companies (except the LLC) to the extent related to any of the following: (1) an Excluded Asset or Retained Liability, (2) a Governing Document of an AG Company (except the LLC), (3) all Taxes for which an AG Company is responsible, and (4) all defenses, counter-claims, subordination rights, claims, choses in action, causes of action, and other rights of any of the AG Companies associated with any claim or demand against any of the AG Companies now existing (other than the LLC); (B) all insurance policies and rights thereunder; and (C) all refunds, recoveries, awards and proceeds arising from the litigation involving the Focus on Foods store in Longview, Washington;

(l) All assets, properties and rights that have been sold to [REDACTED] or its affiliates and all rights, benefits and interests of any of the AG Companies or their Affiliates with respect to such sale, including with respect to that certain Real Property Purchase and Sale Agreement dated as of [REDACTED] between [REDACTED] as buyer and [REDACTED] as seller and that certain Escrow Agreement among [REDACTED] as buyer, [REDACTED] as seller and [REDACTED] as escrow agent (other than the deposit paid under the Norfolk Lease, which is a Purchased Asset);

(m) The amount of cash [REDACTED] received from the sale described in Section 3.02(l) (which was [REDACTED] plus [REDACTED] in cash;

(n) All of the stock or other ownership interests of whatever type in any of the AG Companies, except for the LLC Interests;

CONFIDENTIAL TREATMENT REQUESTED:

(o) All collateral held by any AG Company that secures an Excluded Asset, all collateral that secures an obligation by a subtenant under a sublease that is an Excluded Asset, and all guaranties that secure an Excluded Asset; provided that the following are Purchased Assets: (i) deposits identified as Purchased Assets in Schedule 3.05(b)(1) , (ii) each security agreement by a retail customer as debtor or grantor that is listed in Schedule 3.01(c) if the retail customer signs a Supply Agreement on or before Closing or whose supply agreement is assumed by Purchaser and (iii) each security agreement by a debtor that is listed in Schedule 3.01(c) and that secures an Acquired Receivable; further provided that (A) any assignment of a security agreement described in clause (ii) or (iii) is only for the purpose of securing obligations of the customer incurred after Closing and, if the customer is an obligor of an Acquired Receivable, for the purpose of securing obligations of the customer under such Acquired Receivable and (B) the following are Excluded Assets: (1) all rights, title and interest in any stock or securities of the Company and the proceeds thereof and (2) all of the AG Companies’ respective rights, title, interest, duties, liabilities and obligations in, to and under the security agreements and related documents for the purpose of securing Excluded Accounts Receivable; and

(p) The Contributed Assets.

Section 3.03 Assumption of liabilities . Subject to the terms and conditions of this Agreement, on the Closing Date, Purchaser shall assume and discharge, pay, and honor when due, and from and after the Closing Date Purchaser shall indemnify the AG Companies against all Losses with respect to, the following liabilities and obligations of the AG Companies (the “ Assumed Liabilities ”):

(a) The liabilities and obligations of the AG Companies described on Schedule 3.03(a) to the extent and in the amounts recorded on the Company’s consolidated balance sheet (not including any notes thereto) as of the Closing Date (the “ Closing Balance Sheet ”);

(b) All liabilities and obligations under all of the Intellectual Property Rights, Leases and Contracts incurred after the Closing Date;

(c) Any additional liabilities and obligations expressly assumed by Purchaser in writing, including in Section 7.03(d); and

(d) Subject to Sections 7.03(c) and (d), the liabilities and obligations of the AG Companies under the Seller Benefit Plans listed on Schedule 3.03(d) (the “Assumed Plans” ).

Section 3.04 Retained Liabilities . Except for the liabilities and obligations to be assumed by Purchaser pursuant to Section 3.03, Purchaser will not assume and will not be liable for any liabilities of any of the AG Companies, known or unknown, contingent or absolute, accrued or other (the “ Retained Liabilities ”), which Retained Liabilities include, without

CONFIDENTIAL TREATMENT REQUESTED:

limitation, the following (provided, however, that the following items do not limit the scope or extent of the Assumed Liabilities):

(a) Liabilities, obligations or debts of any of the AG Companies, whether fixed, contingent or mixed and whether based on events occurring before or after the Closing, including those based on tort, contract, statutory or other claims or involving fines or penalties payable to any governmental authority, that are not recorded, or exceed the amounts recorded, on the Closing Balance Sheet;

(b) Liabilities, obligations or debts, if any, of any of the AG Companies to General Electric Capital Corporation, including under the Credit Agreement dated as of October 6, 2005 among Associated Grocers, Incorporated, as Borrower, the other credit parties signatory thereto, as credit parties, and General Electric Capital Corporation, as Lender, as amended;

(c) Liabilities or obligations with respect to leases, subleases, guarantees or other financial commitments of the AG Companies that are not Purchased Assets;

(d) Except as otherwise provided in this Agreement, liabilities, obligations or debts of any of the AG Companies for any federal, state, local or foreign tax, including federal income taxes, state income and excise taxes, state and local real and personal property taxes, customs duties, value added tax, and federal, state, local and foreign withholding and payroll taxes;

(e) Except for the Assumed Plans and except as provided in Section 7.03(c), (d) and (e), liabilities or obligations of any of the AG Companies or any of their ERISA Affiliates with respect to a Seller Benefit Plan or for salaries, bonuses, health and welfare benefits, workers compensation or for any other benefits or compensation (including accrued vacation), including those pursuant to employment agreements and industrial insurance obligations;

(f) Liabilities or obligations of any of the AG Companies or any of their ERISA Affiliates for employee severance payments or arrangements resulting from termination of the employees of any of the AG Companies or their ERISA Affiliates;

(g) Liabilities or obligations of any of the AG Companies relating to issuances of the stock or other ownership interests of whatever type in any of the AG Companies;

(h) Liabilities or obligations of any of the AG Companies incurred in connection with distributions to shareholders or members or in connection with any corporate or other dissolution;

CONFIDENTIAL TREATMENT REQUESTED:

(i) Liabilities or obligations of any of the AG Companies incurred with respect to any litigation, including the SUPERVALU Litigation and the Brown and Cole Litigation;

(j) Any obligations or liabilities primarily related to the Retail Store or any other retail stores of any of the AG Companies; and

(k) Liabilities or obligations of any of the AG Companies for Washington and Seattle business and occupation tax relating to Western Family Foods, Inc.

Section 3.05 Purchase Price; Adjustment.

(a) Purchase Price; Payment . The purchase price for the Purchased Assets (the “ Purchase Price ”) shall be [REDACTED] as adjusted

(1) at the Closing, by (i) the Estimated Closing Purchased Working Capital Adjustment, (ii) the Estimated Closing Reserves; (iii) Supply Agreement Adjustment, (iv) the Tax Adjustment; and (iv) the Long Term Asset Adjustment, and

(2) after the Closing, by the Post-Closing Adjustment.

At the Closing, Purchaser shall pay to the Company, in immediately available funds, an amount (the “ Closing Payment ”) equal to (i) [REDACTED] as adjusted by (A) the Estimated Closing Purchased Working Capital Adjustment, (B) the Estimated Closing Reserves; (C) the Supply Agreement Adjustment, (D) the Tax Adjustment and (E) the Long Term Asset Adjustment, less (ii) [REDACTED] (the “ Holdback Amount ”), which Purchaser shall retain to secure payment of the Post-Closing Adjustment, less (iii) the Withdrawal Liability Amount calculated under Section 7.03(d), which Purchaser shall deposit in an interest-bearing escrow account to secure payment of the Withdrawal Liability.

(b) Closing Adjustments. The Purchase Price shall be adjusted as follows :

(1) Purchased Working Capital . A detailed schedule of the assets and liabilities and accounting principles and methods used to calculate the Purchased Working Capital is attached to this Agreement as Schedule 3.05(b)(1) . At the Closing, the Company shall deliver to Purchaser a statement of Estimated Closing Purchased Working Capital as of the Closing Date (the “ Statement of Estimated Closing Purchased Working Capital ”) and work papers setting forth the basis for calculating the Estimated Closing Purchased Working Capital, which shall be prepared in accordance with Section 3.05(d). The Statement of Estimated Closing Purchased Working Capital shall specify the amount by which the Estimated Closing Purchased Working Capital is greater than the Target Purchased Working Capital, which amount shall be added to the Closing Payment, or less than the Target Purchased Working Capital, which amount shall be deducted from the Closing Payment (the “ Estimated Closing Purchased Working Capital Adjustment ”).

CONFIDENTIAL TREATMENT REQUESTED:

(2) Reserves . A detailed schedule of the items, and accounting principles and methods, used to calculate Reserves is attached to this Agreement as Schedule 3.05(b)(2) . At the Closing, the Company shall deliver to Purchaser a statement of Estimated Closing Reserves as of the Closing Date (the “ Statement of Estimated Closing Reserves ”) and work papers setting forth the basis for calculating the Estimated Closing Reserves, which shall be prepared in accordance with Section 3.05(d). The Statement of Estimated Closing Reserves shall specify the amount by which the Estimated Closing Reserves is less than the Target Reserves, which amount shall be added to the Closing Payment, or greater than the Target Reserves, which amount shall be deducted from the Closing Payment (the “ Estimated Closing Reserves Adjustment ”).

(3) Supply Agreements . The Closing Payment will be adjusted (the “ Supply Agreement Adjustment ”)

(i) upward by an amount equal to [REDACTED] x ((AU – [REDACTED] ) ÷ [REDACTED] ), where “AU” is the aggregate amount of committed annual purchases reflected in Supply Agreements executed on or before the Closing Date, provided that AU shall not exceed [REDACTED] and that there shall be no adjustment under this clause (i) if AU is less than [REDACTED]

(ii) downward by an amount equal to [REDACTED] x (( [REDACTED] – AD) ÷ [REDACTED] ), where “AD” is the aggregate amount of committed annual purchases reflected in Supply Agreements executed on or before the Closing Date, provided that AD shall not exceed [REDACTED] and that there shall be no adjustment under this clause (ii) if AD is greater than [REDACTED] ; and

(iii) downward by [REDACTED] if [REDACTED] .

For purposes of negotiating the amount of annual committed purchases in a Supply Agreement with a Qualified Retailer, the parties shall use commercially reasonable efforts to cause the amount of the annual committed purchase reflected in the Supply Agreement to be no less than the Qualified Retailer’s total purchases from the AG Companies in the 12-month period ended June 8, 2007, as reflected in the books and records of the AG Companies. Within 5 days prior to the scheduled Closing Date, Purchaser and the Company shall deliver to each other any Supply Agreement that has been signed by Qualified Retailers and [REDACTED] , together with Purchaser and the Company’s calculation of the Supply Agreement Adjustment (the agreed upon calculation of the Supply Agreement Adjustment is referred to as the “ Statement of Supply Agreement Adjustment ”). At Closing, the Company and Purchaser shall each deliver to the other any Supply Agreements that it received and did not deliver to the other before Closing and shall agree upon the final Statement of Supply Agreement Adjustment. The parties agree that committed annual purchases contained in any agreement assumed by Purchaser, and not in a Supply Agreement, shall not be considered committed annual purchases for purposes of this Section 3.05(b)(3).

CONFIDENTIAL TREATMENT REQUESTED:

At Closing, the applicable AG Companies will waive, for itself and for its successors and assigns and providing in that waiver that Purchaser is an intended third party beneficiary thereof, each of their retail customers’ obligations under any supply agreement between an AG Company and the retail customer that are Excluded Assets, whether such supply agreement is part of a lease, sublease, stand-alone arrangement or otherwise, to allow each such retail customer to enter into a Supply Agreement with Purchaser or otherwise to purchase goods from Purchaser, in each case subject to either (x) the retail customer having executed and delivered to the Company a written waiver of any supply obligation of any of the AG Companies reasonably acceptable to the Company in a Supply Agreement or otherwise, or (y) Purchaser having assumed any supply obligation of the AG Companies with respect to the existing supply agreement.

(4) Long Term Assets . The Closing Payment shall be adjusted (the “ Long Term Asset Adjustment ”) (i) [ REDACTED ], as of the Closing Date, of any non-current Purchased Asset that was not reflected on the January Balance Sheet and (ii) [ REDACTED ] at the time of sale of any non-current asset reflected on the January Balance Sheet that would have been a Purchased Asset but that was sold, collected (other than in the ordinary course as provided in Section 3.01(g)) or otherwise disposed of before the Closing Date. Notwithstanding the foregoing, there will be no Long Term Asset Adjustment (and no Purchase Price reduction) on account of (i) any asset that had a book value of zero on the January Balance Sheet; (ii) any asset that any of the AG Companies sold to Sabey Corporation or its affiliates in connection with and contemporaneously with execution by the Company of the Norfolk Lease; and (iii) any reduction in the book value of non-current assets between the date of the January Balance Sheet and the Closing Date solely due to depreciation or amortization of non-current assets owned by any of the AG Companies as of the Closing Date. The parties agree that, as of the date of this Agreement, the Long Term Asset Adjustment will include an [ REDACTED ].

(1) Purchased Working Capital and Reserves. As soon as practicable, but in any event within 45 calendar days following the Closing Date, Purchaser will prepare and deliver to the Company the Closing Balance Sheet and a statement, including work papers setting forth the basis for calculating, of the Closing Purchased Working Capital (the “ Statement of Closing Purchased Working Capital ”) and a statement, including work papers setting forth the basis for calculating, of the Closing Reserves (the “ Statement of Closing Reserves ” and, together with the Statement of Closing Purchased Working Capital, the “ Statement of Post-Closing Adjustment ”). The Statement of Post-Closing Adjustment shall be prepared in accordance with Section 3.05(d). Subject to the resolution of any disputes pursuant to Section 3.05(c)(2), the Holdback Amount shall be adjusted (the “ Post-Closing Adjustment ”) (i) downward by the amount, if any, by which the Estimated Closing Purchased Working Capital exceeds the Closing Purchased Working Capital and by the amount, if any, by which Estimated Closing Reserves is less than the Closing Reserves and (ii) upward by the amount, if any, by which the Estimated Closing Purchased Working Capital is less than the Closing Purchased Working Capital and by the amount, if any, by which the Estimated Closing Reserves exceeds the Closing Reserves. Purchaser shall pay to the Company the Holdback Amount as adjusted by

CONFIDENTIAL TREATMENT REQUESTED:

the Post-Closing Adjustment, if positive, by the 60 days following the Closing Date unless the Company, in good faith, disputes the calculation of the Post-Closing Adjustment, in which case the Purchaser shall pay to the Company the undisputed portion of the Holdback Amount derived from the Dispute Notice (as defined in Section 3.05(c)(2)(i)) by such time and the balance of the Holdback Amount, if any, on the date specified in Section 3.05(c)(2)(iii).

(2) Dispute Resolution .

(i) If the Company, in good faith, disputes the calculation of the Post-Closing Adjustment, the Company shall notify Purchaser in writing (the “ Dispute Notice ”) setting forth in reasonable detail the items, amount, nature and basis of such dispute, within 15 calendar days after receipt of the Statement of Post-Closing Adjustment. In the event of such a dispute, the Company and Purchaser shall first use their diligent good faith efforts to resolve the dispute between themselves. If the parties are unable to resolve any items in dispute within 15 calendar days after delivery of the Dispute Notice, the unresolved items in dispute shall be submitted to an independent accounting firm other than [REDACTED] and with no material relationship to either the Company or Purchaser. The firm shall be mutually agreed upon by the Company and Purchaser or, if the Company and Purchaser fail to agree upon or refuse to select such a firm within 10 calendar days after written request therefor by either of them, an independent accounting firm shall be selected by the Company and Purchaser in accordance with the rules of the American Arbitration Association then in effect (the selected accounting firm shall be referred to as the “ Arbitrator ”). The Company and Purchaser shall instruct the Arbitrator to resolve the remaining disputed items, applying the principles in Section 3.05(d), and deliver within 45 calendar days a written report to the Company and Purchaser with respect to the items. The Arbitrator shall, in connection with the resolution of any dispute, have access to all books and records, documents, work papers, facilities and personnel necessary to perform its functions as arbitrator. The Arbitrator’s decision shall be final, conclusive and binding on all parties. A judgment on the determination made by the Arbitrator pursuant to this Section 3.05(c)(2)(i) may be entered into and enforced by any court of appropriate jurisdiction.

(ii) The fees and expenses of the Arbitrator in connection with the resolution of disputes pursuant to Section 3.05(c)(2)(i) shall be (i) borne equally by the Company and Purchaser if and to the extent that the Arbitrator determines the Company and Purchaser should each be awarded one-half of the total amount of the items in dispute, or (ii) borne by the Company and/or Purchaser in inverse proportion to the amount that the Arbitrator’s award in favor of the Company and/or Purchaser bears to the total amount of the items in dispute. (For illustration purposes for this Section 3.05(c)(2) only, (x) if the total amount of items in dispute by the Company is $1,000,000.00, and the Company is awarded $500,000.00 by the Arbitrator, the Company and Purchaser shall bear the Arbitrator’s fees and expenses equally, or (y) if the total amount of items in dispute by the Company is $1,000,000.00, and the Company is awarded $250,000.00 by the Arbitrator, the Company shall bear 75% and Purchaser shall bear 25% of the Arbitrator’s fees and expenses.)

CONFIDENTIAL TREATMENT REQUESTED:

(iii) Within five calendar days following the final determination of the Post-Closing Adjustment whether by (A) the expiration of the 10 calendar day period for giving the Dispute Notice if no Dispute Notice is given or (B) the resolution of any disputes pursuant to Section 3.05(c)(2), Purchaser shall pay the Holdback Amount as adjusted by the Post-Closing Adjustment, if positive, to the Company.

(d) Closing Balance Sheets and Statements . Any balance sheet or statement prepared for purposes of this Section 3.05 shall (i) reflect the same categories and basis of assets, liabilities and reserves set forth in the January Balance Sheet, Schedule 3.05(b)(1) or Schedule 3.05(b)(2) and (ii) be prepared (A) in accordance with the accounting principles (including accounting methods, practices, and procedures) set forth on Schedule 3.05(b)(1) or Schedule 3.05(b)(2) , even if such accounting principles are not in accordance with GAAP, (B) if not covered by Schedule 3.05(b)(1) or Schedule 3.05(b)(2) , in accordance with the accounting principles used in the preparation of the most recent audited year-end balance sheet of the AG Companies, and (C) to the extent such accounting principles do not address a matter necessary for the preparation of the balance sheets or statements prepared under this Agreement, in accordance with GAAP. All balance sheets and statements referenced in this Section 3.05 shall present the assets and liabilities of the AG Companies prior to and without giving effect to the contribution of the Contributed Assets, the Acquisition or any of the Contemplated Transactions.

(e) No Double-Counting . If an adjustment is made, or should have been made, to the Purchase Price under this Section 3.05, Purchaser may not bring a claim under any other provision of this Agreement seeking recovery for Losses based on facts or circumstances that resulted or should have resulted in the adjustment. If an adjustment is made to the Purchase Price under one provision of this Section 3.05 (“first adjustment”), Purchaser may not make an adjustment under any other provision of this Section 3.05 to account for any amount included in the first adjustment.

(f) Wire Transfers . All payments to or for the benefit of the Company under this Agreement shall be in immediately available funds by wire transfer to the account or accounts designated by the Company.

Section 3.06 Allocation of Purchase Price . The Purchase Price and the Assumed Liabilities shall be allocated among the Purchased Assets and the Contributed Assets in accordance with Schedule 3.06 . Such allocation shall be binding on Purchaser and the Company for all purposes, including for federal income Tax purposes and for state and local Tax purposes; provided, however, that the parties acknowledge that the allocation to the Contributed Assets is required by federal law but does not, and is not intended to, imply a direct purchase of the Contributed Assets by Purchaser. Purchaser and the Company and their respective Affiliates shall report, act upon and file Tax Returns (including, but not limited to, Internal Revenue Service Form 8594) in all respects and for all purposes consistent with such allocation. Neither Purchaser nor the Company nor any of their Affiliates shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with such allocation unless expressly required to do so by applicable law.

CONFIDENTIAL TREATMENT REQUESTED:

Section 3.07 Further Assurances . Each of the AG Companies agrees that, at any time and from time to time on and after the Closing Date, it will, upon the reasonable request of Purchaser and without further consideration, take all steps reasonably necessary to place Purchaser in possession of the Purchased Assets and the LLC in possession of the Contributed Assets, and each of the AG Companies will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all further acts, deeds, assignments, conveyances, transfers, powers of attorney or assurances as reasonably required to sell, assign, convey, transfer, grant, assure and confirm to Purchaser, or to aid and assist in the collection of or reducing to possession by Purchaser of, all of the Purchased Assets, or to vest in Purchaser good, valid and marketable title to the Purchased Assets. Purchaser agrees that, at any time and from time to time on and after the Closing Date, upon the reasonable request of the Company and without further consideration, Purchaser will take all steps reasonably necessary for Purchaser to assume all of the Assumed Liabilities, and execute, acknowledge and deliver all further acts, deeds, assignments, conveyances or transfers reasonably required to assume such Assumed Liabilities. Purchaser agrees that, at any time and from time to time on and after the Closing Date, it will, upon the reasonable request of the Company and without further consideration, take all steps reasonably necessary to place the Company in possession of the Excluded Assets (including Discretionary Promotions), and Purchaser will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered, all further acts, deeds, assignments, conveyances, transfers, powers of attorney or assurances as reasonably required to sell, assign, convey, transfer, grant, assure and confirm to the Company, or to aid and assist in the collection of or reducing to possession by the Company of, all of the Excluded Assets, or to vest in the Company good, valid and marketable title to the Excluded Assets.

Section 3.08 Washington State Taxes . Purchaser and the Company have jointly submitted to the Washington Department of Revenue a request for an advance ruling that neither Business and Occupation Tax (“ B&O Tax ”) nor sales or use tax will apply to any of the following transactions: (a) the Contribution, (b) the sale of all of the interests in the LLC to Purchaser, and (c) the merger of the LLC into Purchaser or the dissolution of the LLC or distribution of the LLC’s assets to Purchaser. Purchaser and the Company shall promptly apprise each other of the status and inquiries relating to such ruling. Purchaser and the Company each shall use commercially reasonable efforts to obtain a ruling that is favorable to both of them. Following completion of the Acquisition, the AG Companies and Purchaser will file any and all tax reports and other returns consistent with such ruling. If as a result of such ruling request, (x) [REDACTED] or (y) [REDACTED] . The net amount of the adjustments described in clauses (x) and (y) above is the “ Tax Adjustment .”

Section 3.09 Closing . The closing of the Acquisition (the “ Closing ”) will take place at 10 a.m., Seattle time, on the date (the “ Closing Date ”) that is as promptly as practical (but in no event later than the second Business Day) after satisfaction or waiver of all of the conditions set forth in Article 8 hereof, at the offices of Davis Wright Tremaine LLP, 1201 Third Avenue, Suite

CONFIDENTIAL TREATMENT REQUESTED:

2200, Seattle, Washington, 98101 unless another date, time or place is agreed to in writing by Purchaser and the Company.

Section 3.10 Events of Closing .

(a) Closing Deliveries by the Company . At the Closing, the Company shall deliver or cause to be delivered to Purchaser:

(1) An assignment of the LLC Interests in substantially the form attached as Exhibit C , executed by the Company and the LLC;

(2) A bill of sale in substantially the form attached as Exhibit D , transferring the Purchased Assets to Purchaser, executed by the Company;

(3) One or more assignment and assumption agreements in substantially the form attached as Exhibit E , executed by the Company;

(4) An assignment and assumption of the Norfolk Lease, in substantially the form attached as Exhibit F , executed by the Company;

(5) An intercreditor agreement in substantially the form attached as Exhibit G , executed by the Company, with respect to collateral securing repayment of Excluded Accounts Receivable and Acquired Receivables;

(6) Such other quitclaim deeds, assignments and other instruments of transfer and conveyance, in form and substance sufficient to vest in Purchaser all right, title and interest of the AG Companies in and to the Purchased Assets, as reasonably requested by Purchaser; and

(7) An escrow agreement in substantially the form attached as Exhibit H , executed by the Company, pursuant to which the Withdrawal Liability Amount will be deposited into escrow.

(b) Closing Deliveries by Purchaser . At the Closing, Purchaser shall deliver or cause to be delivered to the Company:

(1) The documents described in Section 3.10(a)(1), (3), (4), (5), (6) and (7) executed by Purchaser; and

(2) The Closing Payment.

CONFIDENTIAL TREATMENT REQUESTED:

Article 4

Representations And Warranties Of The AG Companies

The Company represents and warrants to Purchaser as follows, except as set forth in the disclosure schedule attached hereto by the Company (the “ Company Disclosure Schedule ”):

Section 4.01 Organization . Each of the AG Companies is a corporation or limited liability company duly organized and validly existing under the Laws of its jurisdiction of organization, has all requisite corporate or limited liability company power and authority to own, lease, and operate its properties and to carry on its business as now being conducted, and is duly qualified to do business as a foreign corporation and in good standing to conduct business in each jurisdiction in which the business it is conducting, or the operation, ownership, or leasing of its properties, makes such qualification necessary, other than such failures so to qualify as would not reasonably be expected to have a Material Adverse Effect. Complete and accurate copies of all Governing Documents of the AG Companies, as in effect as of the Agreement Date, have been made available to Purchaser.

Section 4.02 Authority and Enforceability . Each of the AG Companies has all requisite corporate power and authority to enter into this Agreement and to complete the Contemplated Transactions to which it is a party. The execution, delivery, and performance of this Agreement by each of the AG Companies have been duly authorized by all necessary corporate or limited liability company action on the part of each of the AG Companies, subject to the Company Shareholder Approval described in Section 8.01(a) hereof. This Agreement has been duly executed and delivered by each of the AG Companies and, subject to the Company Shareholder Approval, and assuming that this Agreement constitutes the valid and binding agreement of Purchaser, constitutes the valid and binding obligation of the AG Companies, enforceable in accordance with its terms, except as the enforcement hereof may be limited by the Equitable Remedy Exception.

Section 4.03 No Violation; Consents.

(a) The execution, delivery, and performance of this Agreement by the AG Companies do not conflict with or result in any Violation of (i) any provision of the Governing Documents of any of the AG Companies, (ii) any Contract to which any of the AG Companies is a party, or (iii) any Laws applicable to any of the AG Companies, except, in the case of clauses (ii) and (iii), for any Violations that would not reasonably be expected have a Material Adverse Effect.

(b) No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, any Government Agency or other Person (so as not to trigger any Violation) is required by the AG Companies as a result of the execution, delivery, and performance of this Agreement by the AG Companies, except for (i) the filing of a pre-transaction notification and report form by the Company under the HSR Act, and the expiration

CONFIDENTIAL TREATMENT REQUESTED:

or termination of the applicable waiting period thereunder, (ii) such filings and approvals as may be required by any applicable state takeover, securities or blue sky Laws, (iii) such filings in connection with any state or local Tax which is attributable to the transfer of legal or beneficial ownership of real property, if any, by any of the AG Companies, (iv) such other filings and consents as may be required under any environmental, health or safety Law pertaining to any notification, disclosure or required approval necessitated by the Acquisition or Contemplated Transactions, (v) the Company Shareholder Approval, and (vi) such other consents, approvals, orders, authorizations, registrations, declarations, filings, notices or permits that, if they were not obtained or made, would not reasonably be expected have a Material Adverse Effect.

Section 4.04 Financial Statements .

(a) Attached to Section 4.04 of the Company Disclosure Schedule are copies of (i) the Company’s audited consolidated balance sheets at September 29, 2006, September 30, 2005, and September 24, 2004 and the related consolidated statements of operation, shareholder’s equity and cash flows for the fiscal years ended as of such dates (collectively, the “ Company Audited Financial Statements” ), and (ii) the June Balance Sheet and the related unaudited consolidated statements of operations and cash flows for the year-to-date fiscal period then ended (collectively, the “ Company Interim Financial Statements ” and together with the Company Audited Financial Statements, the “ Financial Statements ”).

(b) The Company Audited Financial Statements, as stated therein and as modified in the notes thereto, and the Company Interim Financial Statements fairly present, in all material respects, the consolidated financial position of the Company and its consolidated Subsidiaries as of their respective dates and the consolidated results of operations and the consolidated cash flows of the Company and its consolidated Company Subsidiaries for the periods presented therein, all in conformance with GAAP, applied on a consistent basis during the periods involved (except that the Company Interim Financial Statements do not contain all footnotes required by GAAP and are condensed and subject to year-end adjustments).

(c) The Company has no liability or obligation (whether absolute, accrued, contingent or other, and whether due or to become due) of a nature required by GAAP to be reflected in a balance sheet or disclosed in the notes thereto, except for (i) liabilities or obligations that are adequately accrued or reserved against in the June Balance Sheet, (ii) liabilities or obligations that were incurred after the date of the June Balance Sheet in the ordinary course of business consistent with past practice, and (iii) matters that would not reasonably be expected to have a Material Adverse Effect.

Section 4.05 No Material Adverse Effect . Since the date of the June Balance Sheet through the Agreement Date, there has been no event, occurrence, or condition that has had a Material Adverse Effect, nor has any event, occurrence or condition occurred that would reasonably be expected, by itself or in conjunction with other events, occurrences or conditions, to have a Material Adverse Effect.

CONFIDENTIAL TREATMENT REQUESTED:

Section 4.06 No Changes . Since the date of the June Balance Sheet through the Agreement Date, except as contemplated by this Agreement or the Contemplated Transactions, the Company has not taken any of the actions described in Section 6.02 (Negative Covenants of the Company).

Section 4.07 Conduct of the Company Business . Since the date of the June Balance Sheet through the Agreement Date, except as contemplated by this Agreement or the Contemplated Transactions, and except for such matters that would not reasonably be expected to have a Material Adverse Effect, each of the AG Companies has carried on its business in the ordinary course consistent with past practice.

Section 4.08 Real Property .

(a) Owned Real Property .

(1) Section 4.08(a)(1) of the Company Disclosure Schedule lists all real property included in the Purchased Assets that is owned in fee by any of the AG Companies (together with all buildings and other structures, facilities or improvements located thereon, owned by any of the AG Companies, and all rights and interests appurtenant thereto, the “ Owned Real Property” ). Complete and accurate copies of all leases of any portion of the Owned Real Property leased to another party (“ Fee Property Leases” ) listed in Section 4.08(a)(1) of the Company Disclosure Schedule, including all written amendments and supplements thereof, have been made available to Purchaser. With respect to each such Fee Property Lease, the Company makes each of the representations set forth in subsections (1), (2), (3), and (4) of Section 4.11(c). Each of the AG Companies owns and has good and marketable title (in each case as measured in the context of their current uses) to the Owned Real Property owned by it, free and clear of all Liens, except for Permitted Exceptions.

(2) To the Company’s Knowledge, except as disclosed as a special exception listed in Schedule B of the Commitment, (i) all buildings, improvements and structures that are owned by the AG Companies and that are on the Owned Real Property lie within the boundaries of the Owned Real Property (or within the areas of beneficial easements) and do not encroach upon the property of, or otherwise conflict with the property rights of, any other Person, (ii) the structural components, roofs, and mechanical, electrical, plumbing, and HVAC systems of the improvements on the Owned Real Property are in good working order and free from defects which would materially impair the use of such improvements for their current uses, ordinary wear and tear excepted, and (iii) all structures on the Owned Real Property are structurally sound with no known material defects. Except for the Permitted Exceptions, none of the Owned Real Property is subject to any rights of persons in possession or persons making use thereof. Except as disclosed as a special exception listed in Schedule B of the Commitment, the AG Companies have not received any notice or information that the Owned Real Property or any portion thereof is subject to any claim of adverse possession or prescriptive easement.

CONFIDENTIAL TREATMENT REQUESTED:

(b) Leased Real Property . Section 4.08(b) of the Company Disclosure Schedule lists (i) all real property that is used in the Business and that is leased by any of the AG Companies as tenant pursuant to a Lease included in the Purchased Assets (together with all leasehold improvements thereon, subject to the terms of the applicable lease agreement (but excluding, common areas, parking spaces and other spaces that the tenant thereunder does not have the exclusive right to use under the applicable lease or under applicable Law), the “ Leased Real Property” and together with the Owned Real Property, the “ Real Property” ) and (ii) all written leases of Leased Real Property that are included in the Purchased Assets and that are leased by any of the AG Companies as tenant (“ Material Leases” ), including all written amendments and supplements thereof. Complete and accurate copies of all Material Leases listed in Section 4.08(b) of the Company Disclosure Schedule have been made available to Purchaser. With respect to each such Material Lease, the Company makes each of the representations set forth in subsections (1), (2), (3), and (4) of Section 4.11(c). Notwithstanding anything herein to the contrary, the term “Leased Real Property” excludes the Retail Store or other real property (“ Subleased Property” ) that any of the AG Companies leases as tenant or subtenant for purposes of subleasing such property to a customer of any of the AG Companies or otherwise enhancing the credit of the customer or, in some cases, to Persons who are not customers of any of the AG Companies (such subleases being referred to as “ Back-to-Back Leases” ). The respective AG Companies own and have good and marketable leasehold (or sub-leasehold) interests (in each case as measured in the context of their current uses) in the Leased Real Property pursuant to the Material Leases, free and clear of all Liens arising by, through or under the AG Companies, except for the Permitted Exceptions.

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