GUARANTY
THIS
GUARANTY (this “Guaranty”) is made as of the 5
th day of December, 2005, by CERTIFIED GROCERS MIDWEST,
INC., an Illinois corporation (“Guarantor”), for the
benefit of FRESH BRANDS, INC., a Wisconsin corporation
(“Company”), in connection with the Merger Agreement
referred to below.
WITNESSETH:
WHEREAS , on the date hereof, Company has entered into that
certain Agreement and Plan of Merger (the “Merger
Agreement”), by and among Company, Certified Holdings, Inc.,
a Delaware corporation (“Parent”), and Pillow
Acquisition Corp., a Wisconsin corporation and a wholly owned
subsidiary of Parent (“Acquisition Sub”), pursuant to
which Acquisition Sub will merge with and into Company (the
“Merger”), with Company continuing as the surviving
corporation in the Merger (Company as the surviving corporation in
the Merger being referred to herein as “Surviving
Corporation”), upon the terms and subject to the conditions
set forth in the Merger Agreement; and
WHEREAS , the Merger Agreement provides that, generally
speaking, upon the effective time of the Merger, each share of
Company’s common stock, $0.05 par value per share, issued and
outstanding immediately prior to the effective time shall be
canceled and be converted into the right to receive $7.05 in cash
payable to the holder thereof, without interest (the “Merger
Consideration”), upon surrender of the certificate
representing such share; and
WHEREAS , in order to induce Company to enter into the
Merger Agreement, Guarantor is executing and delivering this
Guaranty whereby Guarantor shall guarantee the payment by Parent
when due of the aggregate Merger Consideration.
NOW, THEREFORE , in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION
1. Definitions . Terms defined in the Merger Agreement and
not otherwise defined herein have, as used herein, the respective
meanings provided for in the Merger Agreement.
SECTION
2. Representations, Warranties and Covenants . Guarantor
represents and warrants to Company that:
|
|
(A)
Guarantor is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Illinois. Guarantor
has all requisite corporate power and authority to execute and
deliver this Guaranty and to carry out the transactions
contemplated hereby.
|
|
|
(B)
The execution and delivery of this Guaranty and the consummation of
the transactions contemplated hereby have been duly authorized and
approved by the board of director of Guarantor. No other or further
corporate act or proceeding on the part of Guarantor or its
shareholders is necessary to authorize or approve this Guaranty or
the consummation of the transactions contemplated hereby. This
Guaranty constitutes a valid and binding agreement of Guarantor,
enforceable against it in accordance with its terms, except as such
may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors’ rights generally, and by general
equitable principles.
|
|
|
(C)
Neither the execution and delivery of this Guaranty nor the
consummation by Guarantor of the transactions contemplated hereby
(i) will violate any Laws or Orders of any Governmental Entity
applicable to Guarantor, (ii) will require any authorization,
consent, approval, exemption or other action by or notice to any
Governmental Entity or (iii) will violate or conflict with, or
constitute a default (or an event that, with notice or lapse of
time, or both, would constitute a default) under, or will result in
the termination of, or accelerate the performance required by, any
term or provision of the charter, bylaws or similar organizational
documents of Guarantor or of any Contract to which Guarantor is a
party or by which Guarantor or any of its assets or properties may
be bound or affected, except in the case of Contracts for any such
items which would not, individually or in the aggregate, have a
material adverse effect on Guarantor taken as a whole or impair or
adversely affect in any material respect Guarantor’s ability
to perform its obligations under this Guaranty.
|
SECTION
3. Unconditional Guaranty . Guarantor hereby unconditionally
guarantees the obligation of Parent, subject to the terms and
satisfaction of the conditions set forth in the Merger Agreement,
to, at or prior to the Effective Time, make available or cause to
be made available to the Paying Agent cash in amounts necessary for
the payment of the Merger Consideration under Section
1.08(b) of the Merger Agreement to which holders of Shares
shall be entitled at the Effective Time pursuant to Section
1.06(a) of the Merger Agreement (the foregoing being referred
to as the “ Guaranteed Obligations ”). Upon
failure by Parent to pay punctually any such amount if and when due
in accordance with the Merger Agreement, Guarantor agrees that it
shall forthwith make available or cause to be made available to the
Paying Agent cash in amounts necessary for the payment of the
Guaranteed Obligations. If Parent is obligated to consummate the
Merger pursuant to the terms and conditions of the Merger
Agreement, no further act or thing need occur to establish
Guarantor’s liability hereunder, and no act or thing, except
full payment of the Guaranteed Obligations, shall in any way
exonerate Guarantor hereunder or modify, limit or release
Guarantor’s liability he
