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Exhibit
10.70.1
LIMITED
WAIVER
OF ASSET PURCHASE
AGREEMENT
This Limited Waiver of Asset
Purchase Agreement (“Limited Waiver”) is by and among
Unified Western Grocers, Inc. (“Purchaser”), Associated
Grocers, Incorporated (“Company”) and specified
subsidiaries of the Company (with the Company, the “AG
Companies”).
RECITALS
A. Purchaser and the AG
Companies are the parties to that certain Asset Purchase Agreement
dated as of August 2, 2007 (the “Purchase
Agreement”, with terms used but not defined in this Limited
Waiver having the meanings given in the Purchase
Agreement).
B. Purchaser and the AG
Companies have good and valid reasons for desiring to complete the
Closing on Sunday, September 30, 2007, which will make
compliance with certain provisions of the Purchase Agreement
(specified below) impracticable.
C. Purchaser and the AG
Companies have good and valid reasons for desiring to satisfy
Purchaser’s credit requirements for retailers to qualify as
Qualified Retailers, to be certain that the Closing will occur on
Sunday, September 30, 2007, and to maximize the Supply
Agreement Adjustment to be paid to the Company.
LIMITED
WAIVER
Accordingly, the parties,
intending legally to be bound, agree as follows:
1. Closing Date; Closing
Payment . Subject to the terms and conditions of the Purchase
Agreement, the Closing Date shall be Sunday, September 30,
2007, and the Closing shall be effective as of the first moment of
time on September 30, 2007, Pacific Time (the “
Effective Time ”). The parties waive the requirements
of Section 3.05(f) of the Purchase Agreement (entitled
“Wire Transfers”) as to delivery of the Closing Payment
at Closing under Section 3.05(a). Instead:
1.1 Notwithstanding
Section 3.01(m) or anything else to the contrary, at Closing
the AG Companies shall retain all cash and cash equivalents of the
AG Companies as of the Closing Date and time, as set forth in the
Closing Balance Sheet, as a partial payment of the Closing Payment;
and
1.2 On Monday,
October 1, 2007, Purchaser shall deliver $2,646,807.91 (which
the parties agree is the Withdrawal Liability Amount calculated
under Section 7.03(d) of the Purchase Agreement) to U.S. Bank
National Association as the escrow agent under the Escrow Agreement
described in Section 3.10(a)(7) of the Purchase Agreement;
and
1.3 By 10:00 A.M. on Monday,
October 1, 2007, Purchaser shall pay to the Company, in
immediately available funds in accordance with Section 3.05(f)
of the Purchase Agreement, the amount of $30,241,024.73 (which is
the Closing Payment minus the cash and cash equivalents described
in Section 1.1 above).
Page 1 of 7
2. Purchase Price
Adjustments . The parties agree that the adjustments to the
Closing Payment to be made at Closing under Section 3.05(a) of
the Purchase Agreement are as described in this Section 2 and
in the Closing Statement attached as Annex A hereto (the
“ Closing Statement ”). The parties further
agree that all adjustments shall be made as of Saturday,
September 29, 2007 immediately prior to the Effective Time;
for example, and without limiting the foregoing, all revenue earned
and expenses owing as of September 29, 2007 (including payroll
and related expenses) shall be for the AG Companies’ account,
and all revenue earned and expenses owing from and after the
Effective Time relating to Purchased Assets, Assumed Liabilities or
Hired Employees (including payroll and related expenses) shall be
for Purchaser’s account. Nothing in this Section 2
constitute a waiver or settlement of the post-closing adjustments
described in the Purchase Agreement.
2.1 Estimated Closing
Purchased Working Capital Adjustment . Purchaser acknowledges
receipt of the Statement of Estimated Closing Purchased Working
Capital, and the parties agree the Estimated Closing Purchased
Working Capital Adjustment shall be a downward adjustment to the
Closing Payment of $989,751, as set forth in the Statement of
Estimated Closing Purchased Working Capital and the Closing
Statement. The parties agree that the accounts receivable of AGIC
Insurance Agency, Inc. (estimated to be approximately $100,000 as
of the Closing Date) are Purchased Assets for all purposes of the
Purchase Agreement, including the calculation of Purchased Working
Capital.
2.2 Estimated Closing
Reserves . Purchaser acknowledges receipt of the Statement of
Estimated Closing Reserves, and the parties agree the Estimated
Closing Reserves shall be an upward adjustment to the Closing
Payment of $383,247, as set forth in the Statement of Estimated
Closing Reserves and the Closing Statement.
2.3 Supply Agreement
Adjustment; Qualified Retailers . The parties agree the Supply
Agreement Adjustment as of immediately prior to the Effective Time
was $1,903,645.64 (the “ Estimated Supply Agreement
Adjustment ”), calculated as provided in the attached
Annex B (the “ Supply Agreement Adjustment Spreadsheet
”). The parties agree that each of the retailers identified
as a Qualified Retailer in the Supply Agreement Adjustment
Spreadsheet is a “Qualified Retailer” for all purposes
of the Purchase Agreement (including Section 8.02(f) thereof,
entitled “Aggregate Minimum Annual Committed Purchases of
Qualified Retailers” and Section 3.05(b)(3) thereof,
entitled “Supply Agreement Adjustment”). Purchaser will
pay the Estimated Supply Agreement Adjustment Amount to the Company
on October 1, 2007 as part of the Closing Payment. If
Purchaser receives any additional Supply Agreements, documentation
or credit support from Zupan Enterprises, Inc. or
Zupan’s Belmont, Inc. by October 5, 2007, Purchaser
will pay to the Company by 10:00 A.M. on October 8, 2007 an
amount equal to 0.04 multiplied by the aggregate amount of
committed annual purchases reflected the Supply Agreements executed
by such those entities.
2.4 Tax Adjustment .
The parties agree that there shall be no Tax Adjustment.
2.5 Long Term Asset
Adjustment . The parties agree the Long Term Asset Adjustment
reduces the Closing Payment by $218,587, calculated as provide in
the Statement of Long Term Asset Adjustment attached as Annex
C.
Page 2 of 7
3. Effective Date of
Certain Covenants . Each party acknowledges that certain
activities that would ordinarily occur on the Closing Date, such as
recording or filing conveyances, instruments of title, releases of
liens and the like, cannot occur on a Sunday. Each party therefore
agrees that all covenants that the other parties cannot perform on
the Closing Date solely because the Closing is occurring on a
Sunday shall be performed on Monday, October 1,
2007.
4. Irrevocable Partial
Assignment of Distributions .
4.1 With respect to each
Irrevocable Partial Assignment of Distributions in substantially
the form attached as Annex D. hereto (each an “
Assignment ”) that a Qualified Retailer signs and
delivers to Purchaser on or before the Closing Date in lieu of an
immediate cash deposit, the AG Companies agree to subordinate any
security interest, lien or right of setoff, recoupment or reduction
of any kind that the AG Companies may have in the Distributions
that the Qualified Retailer is otherwise entitled to receive from
the Company to Purchaser’s right to receive assignment of
such Distributions. Such subordination shall apply only to the
extent of the lesser of (a) the Distribution Portion in the
amount set forth in the Assignment that the Qualified Retailer
signs and delivers to Purchaser on or before the Closing Date and
(b) the amount set forth beside the name of the applicable
Qualified Retailer in the Supply Agreement Adjustment Spreadsheet.
Subject to the preceding, (i) the Company agrees to pay the
first dollars of any Distribution that the Qualified Retailer is
otherwise entitled to receive from the Company (up to the amount
described above) to Purchaser in accordance with the payment
instructions attached to the Assignment before exercising any of
the rights that are subordinated above, (ii) the AG Companies
acknowledge and agree they will retain no legal or equitable
interest whatsoever in the amounts paid to Purchaser pursuant to an
Assignment, and (iii) solely for the purposes of this
Section 4.1, the Company agrees to waive those terms of the
Company’s Amended and Restated Bylaws, and those terms of any
other document or agreement between the Company and a Qualified
Retailer, that would prohibit, restrict, or otherwise conflict with
the subordination and payment provisions of this Section 4.1.
Purchaser confirms that it has not received any signed Assignment
other than from the Company.
4.2 With respect to each
Assignment that a retailer who is not a Qualified Retailer signs
and delivers to Purchaser in lieu of an immediate cash deposit by
such retailer (and that Purchaser delivers to the Company on or
before the first anniversary of the Closing Date), the
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