-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QgjL3J1gKfd2pDKFVB+TpIACjXc34ywAOJyIdBFWYaBiTheAfe+iMZ3ez5mHK/xh BDBY9SsHUuI8KIHf18lL8w== 0000950134-03-012296.txt : 20030828 0000950134-03-012296.hdr.sgml : 20030828 20030827185400 ACCESSION NUMBER: 0000950134-03-012296 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030823 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030828 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEMING COMPANIES INC /OK/ CENTRAL INDEX KEY: 0000352949 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 480222760 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08140 FILM NUMBER: 03869485 BUSINESS ADDRESS: STREET 1: 1945 LAKEPOINTE DRIVE CITY: LEWISVILLE STATE: TX ZIP: 73126 BUSINESS PHONE: 4058407200 MAIL ADDRESS: STREET 1: 1945 LAKEPOINT DRIVE CITY: LEWISVILLE STATE: TX ZIP: 75057 8-K 1 d08741e8vk.txt FORM 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (date of earliest event reported): August 23, 2003 FLEMING COMPANIES, INC. (Exact name of Registrant as specified in its charter) OKLAHOMA 1-8140 48-0222760 (State of incorporation (Commission file number) (I.R.S. employer or organization) identification number) 1945 LAKEPOINTE DRIVE LEWISVILLE, TEXAS 75057 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (972) 906-8000 - -------------------------------------------------------------------------------- ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On August 25, 2003, Fleming Companies, Inc. (the "Company") issued a press release announcing that the sale of the Company's grocery wholesale operations and assets (the "Grocery Operations") was completed at midnight on August 23, 2003. Pursuant to an asset purchase agreement dated July 7, 2003, as amended (the "Agreement") (which original agreement is incorporated by reference from the Company's Current Report on Form 8-K dated June 17, 2003 and which amendments are attached hereto as Exhibits 10.1 and 10.2), the Company sold the Grocery Operations to C&S Wholesale Grocers, Inc. ("C&S"). Total proceeds for the sale of the Grocery Operations included $75 million for the purchase of non-inventory assets and approximately $199 million for the purchase of inventory. C&S also assumed certain liabilities of the Grocery Operations. In addition to the cash consideration paid at the closing, the Agreement provides for the payment of a royalty amount to the Company over a five-year period. A portion of the first year's estimated royalty payment, which amount was approximately $12 million, was paid at the closing. Certain amounts were withheld from the total proceeds to fund the cure cost escrow account and to pay indemnity amounts, real estate and personal property prorations and estimated transfer taxes. The Company did not sell any receivables related to the Grocery Operations, and the Company intends to continue to collect such receivables. The total consideration paid in the sale was determined through arm's-length negotiations between the Company and C&S. On August 15, 2003, the United States Bankruptcy Court for the District of Delaware signed an order approving the Agreement and the sale of the Grocery Operations to C&S. There is no material relationship between the Company or any of its affiliates, directors or officers, and C&S. ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE. In the same press release, the Company announced that in connection with the completion of the sale of the Grocery Operations, Peter S. Willmott has completed his tenure as the Company's Interim Chief Executive Officer and President. Mr. Willmott continues to serve as a member of the Company's Board of Directors. In addition, the Company announced that Archie R. Dykes, the Company's Chairman of the Board, has assumed the responsibilities of the Chief Executive Officer and Dr. Dykes will continue to work with the Company as it works through the remainder of the bankruptcy restructuring process. In addition, the Company announced that it is actively exploring strategic alternatives for the Company's remaining operational entity, the Core-Mark International convenience distribution business ("Core-Mark"), including responding to expressions of interest from parties interested in acquiring Core-Mark. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (b) PRO FORMA FINANCIAL INFORMATION. The Company has not included in this Current Report the pro forma financial information required pursuant to Article 11 of Regulation S-X. As previously announced in the Company's Form 12b-25 filed on August 27, 2003 (the "Form 12b-25"), relating to the Company's Quarterly Report on Form 10-Q for its second quarter ended July 12, 2003 (the "Second Quarter Form 10-Q"), the Company will file its Annual Report on Form 10-K for the fiscal year ended December 28, 2002, its Quarterly Report on Form 10-Q for its first quarter ended April 19, 2003 and its Second Quarter Form 10-Q on a delayed basis and the Company has not determined the date by which it will file such forms. For the same reasons set forth in the Form 12b-25, the Company has not determined the date by which it will file the pro forma financial information required pursuant to Article 11 of Regulation S-X. (c) EXHIBITS. Pursuant to the rules and regulations of the Securities and Exchange Commission, the press release dated August 25, 2003, referenced as Exhibit 99.1 below, and the information set forth therein is deemed to have been furnished pursuant to Item 9 hereof and shall not be deemed to have been "filed" under the Securities Exchange Act of 1934.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 10.1 -- First Amendment to Asset Purchase Agreement dated August 4, 2003. 10.2 -- Second Amendment to Asset Purchase Agreement dated August 23, 2003. 99.1 -- Press release dated August 25, 2003.
ITEM 9. REGULATION FD DISCLOSURE. On August 25, 2003, the Company issued a press release announcing the matters referenced in Item 2 and Item 5 hereof. A copy of such press release is furnished as an exhibit to this Current Report. Pursuant to the rules and regulations of the Securities and Exchange Commission, such press release and the information set forth therein is deemed to have been furnished pursuant to this Item 9 and shall not be deemed to have been "filed" under the Securities Exchange Act of 1934. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FLEMING COMPANIES, INC. Date: August 27, 2003 By: /s/ REBECCA A. ROOF -------------------------------- Rebecca A. Roof Interim Chief Financial Officer INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 10.1 -- First Amendment to Asset Purchase Agreement dated August 4, 2003 10.2 -- Second Amendment to Asset Purchase Agreement dated August 23, 2003 99.1 -- Press release dated August 25, 2003.
EX-10.1 3 d08741exv10w1.txt FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 10.1 August 4, 2003 C&S Acquisition LLC C&S Wholesale Grocers, Inc. 47 Old Ferry Road Brattleboro, Vermont 05302 Attn: General Counsel Re: Asset Purchase Agreement and Ancillary Documents Ladies and Gentlemen: Reference is made to the Asset Purchase Agreement dated as of July 7, 2003, among C&S Acquisition LLC, a Delaware limited liability company ("Purchaser"), Fleming Companies, Inc., an Oklahoma corporation ("Fleming"), certain other affiliates of Fleming (each, a "Seller" and collectively, "Sellers"), each a debtor and debtor in possession under Chapter 11 Case No. 03-10945 (MFW) (jointly administered) pending in the United States Bankruptcy Court for the District of Delaware and, with respect to Article V and Sections 14.8 and 14.11 thereof only, C&S Wholesale Grocers, Inc., a Vermont corporation ("Parent") (the "Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement. Pursuant to Section 14.3 of the Agreement, effective as of the date hereof, this letter shall amend the Agreement as follows: 1. The parties hereto acknowledge and agree that, notwithstanding anything in the Agreement to the contrary, including clause (iii) within the definition of "Acquired Contracts" and Section 2.2(q) of the Agreement, all vendor supply agreements for the supply of products to the U.S. military ("Military Supply Agreements") shall be deemed part of Acquired Assets; provided, however, notwithstanding anything in the Agreement to the contrary, including Sections 2.8 and 2.9 of the Agreement, Sellers shall have no obligation or liability to pay any Cure Costs associated with such Military Supply Agreements; provided, further, that such Military Supply Agreements shall not be assumed and assigned as of the Initial Closing, but rather may be assumed and assigned in accordance with Section 2.5 of the Agreement subsequent to the Initial Closing following the entry of one or more applicable Supplemental Sales Orders. Notwithstanding anything in this letter or the Agreement to the contrary, including Section 6.2 of the Agreement, Sellers may in their sole discretion settle any Military Supply Agreement, including, without limitation, by way of termination of such Military Supply Agreement and sale of related inventory, and retain the proceeds of such settlement; provided, however, upon receipt by Sellers of Purchaser's Option Notice(s) to expressly assume any Military Supply Agreement, Sellers shall not settle such Military Supply Agreement without the prior consent of Purchaser (provided, however, no such consent shall be required to the extent that Sellers have been in settlement discussions relating to such Military Supply Agreement and Sellers may continue such settlement discussions and may settle such Military Supply Agreement and retain the proceeds therefrom); provided, further, to the extent such consent of Purchaser is required, Purchaser shall not unreasonably withhold such consent and shall reasonably assist Sellers in the collection of accounts and trade receivables due under such Military Supply Agreement. 2. The parties hereto acknowledge and agree that, notwithstanding anything in the Agreement to the contrary, including clause (iii) within the definition of "Acquired Contracts" General Counsel August 4, 2003 Page 2 and Section 2.2(q) of the Agreement, all vendor supply agreements for the supply of private label products ("Private Label Supply Agreements") shall be deemed part of Acquired Assets; provided, however, notwithstanding anything in the Agreement to the contrary, including Sections 2.8 and 2.9 of the Agreement, Sellers shall have no obligation or liability to pay any Cure Costs associated with such Private Label Supply Agreements; provided, further, that such Private Label Supply Agreements shall not be assumed and assigned as of the Initial Closing, but rather may be assumed and assigned in accordance with Section 2.5 of the Agreement subsequent to the Initial Closing following the entry of one or more applicable Supplemental Sales Orders. 3. The parties hereto acknowledge and agree that, notwithstanding anything in the Agreement to the contrary, no Acquired Contract to which any ABCO Seller is a party shall be assumed or assigned as of the Initial Closing, but rather may be assumed and assigned in accordance with Section 2.5 of the Agreement subsequent to the Initial Closing following the entry of one or more applicable Supplemental Sales Orders. 4. Section 1.1 of the Agreement is hereby amended by adding the following definition in such section in its alphabetical order: ""ABCO Seller" means each of ABCO Food Group, Inc., a Nevada corporation, ABCO Markets, Inc., an Arizona corporation, and ABCO Realty Corp, an Arizona corporation." 5. The definition of "Affiliate" set forth in Section 1.l of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Affiliate" shall (i) as such term may relate to any of the Sellers, have the meaning set forth in Bankruptcy Code section 101(2), and (ii) as such term may relate to Purchaser or Parent, have the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended." 6. The definition of "Break-Up Fee" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Break-Up Fee" shall mean an amount equal to $11,000,000 (i.e., two and three-quarters percent (2.75%) of the Estimated Purchase Price)." 7. The definition of "Encumbrance" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Encumbrance" shall mean any mortgage, pledge, lien (statutory or otherwise), security interest, easement, right of way, covenant, claim, restriction, right, option, conditional sale or other title retention agreement, charge or encumbrance of any kind or nature, including actions in rem and lis pendens, but not any Offset Right, in respect of any Acquired Assets." 8. Section 1.1 of the Agreement is hereby amended by adding the following definition in such section in its alphabetical order: General Counsel August 4, 2003 Page 3 ""FSA" means a facility standby agreement to which a customer of Seller is a party. ""FSA Accounts Receivable" means the trade accounts receivable of Sellers arising from customers' purchases of products from Sellers pursuant to FSAs. ""FSA Accounts Receivable Compromised Amount" means, with respect to any FSA of any FSA Customer, the amount of any FSA Accounts Receivable that is not an FSA Accounts Receivable Uncompromised Amount. ""FSA Accounts Receivable Compromised Limit" shall have the meaning set forth in Section 2.9(e). ""FSA Accounts Receivable Uncompromised Amount" means, with respect to any FSA of any FSA Customer, the amount of any FSA Accounts Receivable that is paid in full in cash to Sellers on or prior to the FSA Settlement Date pursuant to Section 2.9. ""FSA Customer"" means a customer of Seller that is party to an FSA that is an Acquired Contract as of the Initial Closing Date. ""FSA Settlement Date" shall have the meaning set forth in Section 2.9(d). ""FSA Settlement Notice" shall have the meaning set forth in Section 2.9(d). ""Offset Right" means any right of a creditor (other than those rights that were actually exercised prior to the Petition Date) to offset a mutual debt owing by such creditor to a Seller that arose before the Petition Date against a claim of such creditor against a Seller that arose before the Petition Date as provided in section 553 of the Bankruptcy Code." 9. The definition of "Permitted Encumbrances" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Permitted Encumbrances" means (a) any Lien for Taxes not yet due or payable, (b) statutory or mechanics', landlords', warehousemen's, suppliers', materialmen's, carriers', workmen's, repairmen's liens and other like Liens imposed by law arising or incurred in the ordinary course of business consistent with past practice with respect to amounts not yet due (provided that such amounts arising or accruing prior to the Initial Closing remain Excluded Liabilities) and which do not and would not, individually or in the aggregate, have a Material Adverse Effect, (c) with respect to the Owned Real Property, encumbrances consisting of zoning restrictions, easements and other restrictions on the use of such Owned Real Property, provided that such items do not and would not reasonably be expected to have, individually or in the aggregate, have a Material Adverse Effect, (d) any laws, rules, regulations, statutes or ordinances affecting the PSCs and which do not, individually or in the aggregate, have a General Counsel August 4, 2003 Page 4 Material Adverse Effect, (e) with respect to the Owned Real Property, any utility company rights, easements and franchises and similar rights or easements granted to third parties for electricity, water, steam, gas, telephone or other service or the right to use and maintain poles, lines, wires, cables, pipes, boxes and other fixtures and facilities in, over, under and upon such Owned Real Property, provided that the same do not and would not reasonably be expected to have, individually or in the aggregate, have a Material Adverse Effect, (f) with respect to the Owned Real Property, title defects or matters that would be customarily disclosed by an accurate survey or inspection of the Owned Real Party Leases that do not, individually or in the aggregate, materially impair the value or use of the Owned Real Property, (g) as to any Lease, the Subleases and (h) as to the Owned Real Property, the Owned Real Property Leases." 10. Clause (ii) in the definition of "Sale Order" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(ii) the approval of the sale of the Acquired Assets to Purchaser free and clear, pursuant to section 363(f) of the Bankruptcy Code, of all claims, Offset Rights, Liens, and Encumbrances (other than Permitted Encumbrances) or other interests (collectively, "Interests")," 11. The definition of "Sales Material Adverse Effect" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Sales Material Adverse Effect" means a decline in Sales, if any, associated with the Operating PSCs which exceed 32 1/2% for the four (4) week period ended the Saturday immediately preceding the Initial Closing Date, as compared to the four (4) week period ended June 14, 2003." 12. The parenthetical clause at the end of the first sentence of Section 2.5(c) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(which in no event shall be earlier than thirty (30) days following the delivery of such Option Notice, or, if given on or prior to August 2, 2003, no earlier than the Initial Closing); provided, however, notwithstanding the foregoing, Purchaser shall only be required to deliver an Option Notice in respect of any owned Acquired Assets, including, without limitation, any Owned Real Property, three (3) Business Days prior to the expected date of the consummation of such purchase or exclusion; provided, further, notwithstanding the foregoing, Sellers shall use their commercially reasonable efforts to deliver all documents and instruments required under this Agreement to be delivered to Purchaser in connection with the consummation of the sale of any Owned Real Property (including, without limitation, deeds, surveys and title commitments) but, if the Option Notice with respect to such Owned Real Property was delivered after General Counsel August 4, 2003 Page 5 August 2, 2003 with respect to the Initial Closing or with less than thirty (30) days notice with respect to any Subsequent Closing, then Sellers shall not be obligated to deliver any such documents and instruments on such date of consummation if any such documents cannot be obtained on or prior to the date of such consummation despite Sellers commercially reasonable efforts but Sellers shall be obligated to deliver any such documents and instruments on or prior to later of the thirtieth (30th) day following delivery of such Option Notice or the consummation of the sale of such Owned Real Property" 13. The second sentence of Section 2.5(c) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following sentence: "Notwithstanding anything to the contrary in this Section 2.5, at one or more times during the Option Period, Purchaser may, by delivering a written notice to Sellers, (i) revoke its request in a Option Notice previously delivered hereunder to have an Acquired Asset transferred to Purchaser, a Purchaser Assignee or a Third Party Purchaser, (ii) change the identity of the Person who shall be the transferee of an Acquired Asset which is identified in an Option Notice previously delivered hereunder as an asset to be transferred pursuant to this Agreement, or (iii) extend the expected timing of the consummation of the purchase of an Acquired Asset (as such expected timing is set forth in an Option Notice or written notice previously delivered hereunder) to any date during the Option Period; provided, however, that with respect to any specific Acquired Asset, Purchaser may exercise its rights in clause (i) of this sentence one time only." 14. The first sentence of Section 2.5(e) of the Agreement is hereby amended by adding the following provision at the end of such sentence: "; provided, however, that if Purchaser, Purchaser's Assignee or a Third Party Purchaser, at such party's sole and absolute discretion, elects to and does so specify in an Option Notice to reject an Acquired Contract, Sellers shall be required to reject, and shall not have any option to retain, such Acquired Contract" 15. The second sentence of Section 2.5(e) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "In respect of any Acquired Contract Purchaser, Purchaser's Assignee or Third Party Purchaser requires in an Option Notice that Sellers reject, and in respect of any Acquired Contract for which such specification has not been made but Sellers elect to reject, promptly following the expiration of such three (3) Business Day period, Sellers shall file, duly serve and diligently prosecute a motion in the Bankruptcy Court seeking authorization, as necessary, to reject such specified Acquired Contracts." General Counsel August 4, 2003 Page 6 16. Section 2.9 of the Agreement is hereby amended by adding the following provisions at the end of such section: "(c) Subject to the limitations of Section 2.9 (d) and (e) and notwithstanding anything herein to the contrary: (i) Purchaser shall be permitted to negotiate with any FSA Customer for the payment of or settlement of the payment of any Cure Cost associated with any Acquired Contract to which such FSA Customer is a party; (ii) within five (5) Business Days of the delivery to Sellers of an FSA Settlement Notice in accordance with Section 2.9(d), Sellers shall notify the Cure Escrow Agent to release from the Cure Escrow any cash amounts to be paid pursuant to such FSA Settlement Notice; and (iii) Sellers shall execute such documents as reasonably requested by Purchaser to provide for the settlement or compromise of any FSA Accounts Receivable associated with such FSA Customer set forth in such FSA Settlement Notice and which complies with this Section 2.9. "(d) A notice (each, an "FSA Settlement Notice") that Purchaser has agreed to make payments to, or cause payments to be made to, an FSA Customer relating to any Cure Costs associated with any Acquired Contract to which such FSA Customer is a party (each, an "FSA Settlement") shall state: (i) the identity of the FSA Customer; (ii) the identity of all Acquired Contracts to which such FSA Customer is a party; (iii) the identity of the Acquired Contracts that are the subject of the FSA Settlement; (iv) the amount, if any, of any FSA Accounts Receivable involved in such FSA Settlement, including, without limitation the FSA Accounts Receivable Compromised Amount and the FSA Accounts Receivable Uncompromised Amount; (v) the Cure Amount to be released from the Cure Escrow; and (vi) the effective date of the settlement of the Cure Amounts and FSA Accounts Receivable, if any, associated with such Acquired Contract (which date shall be no earlier than the fifth Business Day following delivery of such FSA Settlement Notice) (the "FSA Settlement Date"). "(e) Notwithstanding anything herein to the contrary: (i) the aggregate of all FSA Accounts Receivable Compromised Amounts shall not exceed $8.0 million (the "FSA Accounts Receivable Compromised Limit"); (ii) if Purchaser does not utilize the full amount of such $8.0 million to settle FSA Accounts Receivable, in no event shall the unutilized portion of such FSA Accounts Receivable be transferred to, utilized by or otherwise shared with Purchaser, (iii ) to the extent any portion of the Cure Escrow is utilized to pay or settle any Cure Cost of any FSA Customer pursuant to an FSA Settlement, then all Cure Costs (including without limitation all Offset Rights, if any) of such FSA Customer under all Acquired Contracts to which such FSA Customer is a party arising out of or related to the PSC pursuant to which such FSA Customer is serviced under such Acquired Contract (other than Acquired Contracts that have been rejected pursuant to the Agreement and become Excluded Contracts) must be extinguished, cancelled and of no force and effect on or prior to the FSA Settlement Date with respect to such FSA Settlement; ( iv) to the extent any FSA Accounts Receivable is utilized to settle any Cure Cost of any FSA Customer pursuant to an FSA Settlement, then the outstanding amounts of all FSA Accounts Receivable owing by such FSA Customer shall be considered an FSA Accounts Receivable Compromised Amount upon the payment of all the amounts subject to such settlement; (v) if Purchaser enters into a new agreement General Counsel August 4, 2003 Page 7 with an FSA Customer and has paid or pays such FSA Customer amounts from the Cure Escrow, then, as part of such new agreement, such FSA Customer shall agree that no FSA Accounts Receivable shall be subject to any claim for Cure Costs (including without limitation all Offset Rights, if any); and (vi) Sellers shall maintain an accounting of all FSA Settlements, including without limitation, the portions of any Cure Escrow, any FSA Accounts Receivable Compromised Amount and any FSA Accounts Receivable Uncompromised Amount utilized in connection therewith. "(f) Notwithstanding anything to the contrary, Sellers shall be permitted to compromise or settle any and all FSA Accounts Receivable, subject to the following limitations: (i) Sellers shall provide Purchaser with at least two (2) Business Days written notice of the intent to consummate a settlement involving a compromise of an FSA Accounts Receivable which notice shall provide Purchaser with the specific terms of such settlement; (ii) Seller shall not, as part of such settlement, accept as payment in full of the outstanding amount of any FSA Accounts Receivable an amount that is less than 90% of such outstanding amount (if the proposed date of consummation of the settlement of such amount is within 30 days following the Initial Closing Date), 80% of such amount (if the proposed date of consummation of the settlement of such amount is from and including the 31st day to the 60th day following the Initial Closing Date), or 70% of such outstanding amount (if the proposed date of consummation of the settlement of such amount is from and including the 61st day to the 90th day following the Initial Closing Date); and (iii) on a weekly basis, Sellers shall provide Purchaser with a status summary of its collection efforts with regard to FSA Accounts Receivable, including without limitation, the identity of each FSA Customer, the outstanding amount of its FSA Accounts Receivable, and a brief description of the efforts made, if any, to collect such FSA Accounts Receivable. "(g) Within two (2) Business Days of delivery of such notice, Purchaser shall notify Sellers that (x) Seller shall be permitted to consummate such settlement or (y) Seller shall not be permitted to consummate such settlement and, instead, Purchaser shall have the right to settle such FSA Accounts Receivable with such FSA Customer and Sellers shall no longer have the right to settle such FSA Accounts Receivable with such FSA Customer. If Purchaser elects to have the right to consummate a settlement, then the full outstanding amount of such FSA Accounts Receivable shall be considered an FSA Accounts Receivable Compromised Amount (whether or not such FSA Accounts Receivable is settled) which shall be applied to the FSA Accounts Receivable Compromised Limit. If Purchaser does not notify Seller within such two (2) Business Day period, then Seller shall have the right to settle such FSA Accounts Receivable with such FSA Customer. If proceeds from any FSA Accounts Receivable Compromised Amount are received by Sellers, Sellers shall promptly remit such proceeds to Purchaser." 17. Section 3.3(a) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(a) Royalty Amount. Sellers shall be entitled to a "Royalty Amount" for the customers and customer agreements transferred to Purchaser General Counsel August 4, 2003 Page 8 that are Purchaser Active Customers pursuant to this Agreement in an amount equal to one percent (1%) of the Sales to such customers for the Royalty Period; provided, that "Purchaser Active Customers" shall mean those customers that continue to order products on a regular basis (other than Sales during a wind-down period for such customer) during the two weeks preceding the thirtieth (30th) day after the Initial Closing." 18. The second sentence of Section 3.3(b)(ii) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "For purposes of the Second Estimate Payment, Purchaser and Sellers shall make a good-faith estimate of the Second Estimate Payment based upon the annualized run rate of Sales to Purchaser Active Customers over the 60-day period immediately following the Initial Closing Date)." 19. Section 3.3(b)(iii) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "The remainder of the Royalty Amount due for the first year of the Royalty Period shall be paid promptly following final determination of the actual Sales to Purchaser Active Customers for the first year of the Royalty Period pursuant to Section 3.3(d) and in no event later than three (3) Business Days following such determination." 20. Section 3.3(c) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(c) Remainder of the Royalty Amount. In each of the four (4) subsequent years of the Royalty Period, the Royalty Amount shall be paid promptly following final determination of the actual Sales to Purchaser Active Customers for each quarter in such year and in no event later than three (3) Business Days following such determination. For purposes of this Section 3.3, "year" shall mean each of the subsequent 12-month periods following the Initial Closing and shall not refer to calendar or fiscal years." 21. The first sentence of Section 3.3(d) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "Within thirty (30) days after the end of the first year of the Royalty Period or each quarter following the end of the first year of the Royalty Period, as the case may be, Purchaser shall calculate actual Sales for the customer relationships and customer agreements transferred to Purchaser that are Purchaser Active Customers pursuant to this Agreement and deliver a statement of such Sales to Sellers along with related work papers (the "Sales Statement")." General Counsel August 4, 2003 Page 9 22. The provided further clause in the second sentence of Section 3.3(e)(i)(x) of the Agreement is hereby amended by deleting the phrase "of products carried by Sellers with respect to the Business" from such clause. 23. The second sentence of Section 3.3(e)(i)(x) of the Agreement is hereby amended by adding the following text at the end of such sentence: "; provided, further, to the extent that the consummation of the applicable sale or transfer occurs on a Saturday, the references to the "sixty (60) day(s)", "thirty (30) day(s)" and "thirtieth (30th) day" in this sentence shall be deemed references to "fifty-six (56) day(s)", "twenty-eight (28) days(s)" and "twenty-eighth (28th) day", respectively" 24. Section 3.3(e)(i)(y) of the Agreement is hereby amended by adding the following text at the end of such section: "; provided, further, to the extent that the consummation of the applicable sale or transfer occurs on a Saturday, the references to the "sixty (60) day" in this section shall be deemed references to "fifty-six (56) day" 25. The clause ", free and clear of all Liens, other than Permitted Encumbrances," in Section 4.5(a) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ", free and clear of all Offset Rights, Liens and Encumbrances, other than Permitted Encumbrances," 26. The clause "free of subtenancies and other occupancy rights and Liens" in the second and third sentences of Section 4.5(b) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "free of subtenancies and other occupancy rights and Offset Rights, Liens and Encumbrances" 27. Clause (iii) of Section 4.14(b) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(iii) there are no Liens for Taxes which shall attach to any Acquired Asset once such Acquired Asset is assigned, transferred and delivered to Purchaser hereunder pursuant to the Sale Order or applicable Supplemental Sale Order, as the case may be; and" 28. Article IV of the Agreement is hereby amended by adding the following provision immediately after Section 4.22: "4.23 Fleming Foreign Sales Corporation. Fleming Foreign Sales Corporation, a Barbados corporation, does not own, lease or otherwise hold any assets." General Counsel August 4, 2003 Page 10 29. Clause (B) of Section 6.4(a)(iv) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(B) is accompanied (A) by a cash deposit at least equal to the Deposit (or if such bid is for less than all of the Acquired Assets, four and three-quarters percent (4.75%) of the cash purchase price payable at Closing), which deposit shall not be subject to any Liens created in favor of any person, and (B) by a duly executed acquisition agreement that is marked to reflect variations from this Agreement," 30. Clause (H) of Section 6.4(a)(iv) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(H) is for an aggregate purchase price at least equal to the Estimated Purchase Price plus $19,000,000, provided that for purposes of this requirement Sellers shall be permitted to aggregate any number of bids (provided that each individual bid is equal to or greater than $40,000,000 in cash) (a bid which meets the foregoing requirements (A)-(H) is hereinafter referred to as a "Qualified Bid");" 31. Section 6.4(a)(viii) of the Agreement is hereby amended by adding the following sentence at the end of such section: "Notwithstanding the foregoing and anything in this Agreement to the contrary, Sellers' Debt Liens shall be permitted to attach to Sellers' rights under the Deposit Escrow Agreement relating to the Deposit or under any escrow agreement or arrangement relating to the deposit of any Potential Bidder (as defined in the Bidding Procedures) and the proceeds thereof." 32. The second sentence of Section 6.8(b) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "The parties shall together make a physical accounting of the Material Equipment (the "Initial Equipment Count", together with the Final Equipment Count (as defined below), the "Equipment Count") by August 5, 2003 or such other time period mutually agreeable to Purchaser and Sellers, such Equipment Count may include the making of a videotape or other similar medium to confirm the existence of Material Equipment." 33. Article VI of the Agreement is hereby amended by adding the following provision at the end of such Article: "Section 6.16 Certain Books and Records. (a) From the Initial Closing through the expiration of the Option Period, upon reasonable notice, and subject to Section 6.10, Sellers will give to the representatives, employees, counsel and accountants of Purchaser and its lenders, access, during normal business hours, to the records relating to the items General Counsel August 4, 2003 Page 11 set forth in paragraph numbers 2, 8, 11, 16, 18, 21 and 24 set forth on Schedule 2.2(m), as such records pertain to the Business, the PSCs, the Employees or the Acquired Assets and relating to periods prior to, including and after the Initial Closing Date, and will permit such persons to examine such records and, subject to the provisions of Section 6.16(b), shall either (i) provide Purchaser copies of such records at Purchaser's expense, or (ii) permit Purchaser to copy such records at Purchaser's expense. (b) Sellers will provide Purchaser with copies of all employee records, personnel files and other human resource records relating to any Employee who becomes a New Employee promptly upon receiving written notice from Purchaser, as well as copies of all Sellers' records of legal proceedings and other grievances or disputes relating to Employees who become New Employees, in each case, at Purchaser's expense; provided, however, that nothing in this Agreement shall require Sellers to provide or otherwise give access to performance reviews or information contained in any performance reviews with respect to such Employees. (c) During the period from the Option Notice to the New Hire Date in respect of any New Employees, to facilitate the hiring by Purchaser of such New Employees, at Purchaser's request and expense, Sellers shall provide to the representatives, employees, counsel and accountants of Purchaser, during normal business hours, access to and file transfers of all employment systems for payroll and benefits administration for such New Employees. (d) Notwithstanding anything in this Agreement to the contrary, Sellers shall not be required to provide or otherwise give access to the books, records, work papers and other files and documents subject to attorney-client privilege, including, without limitation, any such documents of the audit committee(s) of the Boards of Directors of the Sellers and PricewaterhouseCoopers LLP and its representatives. (e) To the extent any provision of this Section 6.16 conflicts with Schedule 2.2(m), the provisions of this Section shall control." 34. Section 8.11 of the Agreement is hereby amended by adding the following clause at the end of such section: "; provided, further, the failure of Purchaser to designate an Acquired Contract pursuant to Section 2.5(c) on or prior to August 2, 2003 such that Sellers have been unable to file, duly serve and diligently prosecute a motion in the Bankruptcy Court seeking authorization, as necessary, for Sellers to assign and Purchaser to assume such Acquired Contract shall not be a failure to satisfy the condition set forth in this Section 8.11" 35. Section 10.1 of the Agreement is hereby amended by adding the following clause at the end of such sentence: General Counsel August 4, 2003 Page 12 "; provided, however, that the parties acknowledge and agree that they will take such actions necessary to ensure that the Initial Closing shall, subject to Purchaser's satisfaction of its obligations under Sections 3.1(c)(ii), 3.1(c)(iii) and 3.1(c)(iv), be deemed to occur on and be effective as of 11:59 p.m. on a Saturday; provided, further, that all closing documents delivered by the parties pursuant to this Agreement at the Initial Closing as of such Saturday shall be held in escrow and not released until such time on the Monday immediately following such Saturday, or such later day, that Purchaser satisfies its obligations under Sections 3.1(c)(ii), 3.1(c)(iii) and 3.1(c)(iv)" 36. Section 11.2(c) of the Agreement is hereby amended by adding the following sentence at the end of such section: "Notwithstanding the foregoing and anything in this Agreement to the contrary, Sellers' Debt Liens shall be permitted to attach to Sellers' rights under the Deposit Escrow Agreement relating to the Deposit or under any escrow agreement or arrangement relating to the deposit of any Potential Bidder (as defined in the Bidding Procedures) and the proceeds thereof." 37. Article XII is hereby amended by adding the following provisions at the end of such Article: "12.15 Consequential Damages Order. At the hearing of the Bankruptcy Court on August 4, 2003 (or such later date to which such hearing may be continued, so long as such later date occurs on or prior to August 8, 2003), Sellers and Purchaser shall seek an Order from the Bankruptcy Court ruling that the waiver by any FSA Customer of any and all consequential damages under such FSA Customer's FSA is valid and enforceable, unless such waiver would be unconscionable. If Sellers and Purchaser mutually agree (in writing by notice to the other parties pursuant to Section 14.4 within 48 hours of the conclusion of such hearing) that the terms of such Order provide adequate limitations on the Cure Costs arising from consequential damages under FSAs, then the provisions set forth in Exhibit F attached hereto shall be added to (or deleted, as the case may be, from) the Agreement, and to the extent the parties do not so mutually agree, Sellers may terminate the Agreement pursuant to Section 11.1(o). "12.16 August 14, 2003 Hearing. Notwithstanding the provisions of Section 2.5 of the Agreement, Sellers represent that they have used and shall continue to use commercially reasonable efforts to provide notice on or prior to August 4, 2003 to the non-Seller parties to the Acquired Contracts (specified in the Option Notice delivered by a Third Party Purchaser on August 1, 2003 and in the Option Notice delivered by Purchaser on August 2, 2003) which notice indicated or shall indicate that such Acquired Contracts are the subject of a hearing on August 14, 2003 involving the assignment and assumption of such Acquired Contracts. To the extent such non-Seller parties and/or such Acquired Contracts are not specified in any such Option Notice with sufficient detail to provide proper notice, each of Sellers and Purchaser shall use its commercially General Counsel August 4, 2003 Page 13 reasonable efforts to obtain the information necessary to provide proper notice and, upon receipt of such information by Sellers, Sellers shall promptly provide proper notice to such non-Seller parties. 38. The parties hereto acknowledge and agree that (i) Fleming Foreign Sales Corporation, a Barbados corporation ("Fleming Foreign Sales"), shall be removed as a signatory and party to the Agreement, and accordingly, that Fleming Foreign Sales shall have no rights or obligations under the Agreement or any Ancillary Document and (ii) each of ABCO Food Group, Inc., a Nevada corporation, ABCO Markets, Inc., an Arizona corporation, and ABCO Realty Corp, an Arizona corporation (together with ABCO Food Group, Inc. and ABCO Markets, Inc., the "ABCO Sellers"), shall be added as a signatory and party to the Agreement as a "Seller", and accordingly that each of such Persons shall have all rights and obligations under the Agreement and any Ancillary Documents as a "Seller". By execution of this letter, each of the ABCO Sellers acknowledges and agrees to be bound by the Agreement and all Ancillary Documents as a "Seller". The preamble of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""THIS ASSET PURCHASE AGREEMENT is dated July 7, 2003, among C&S Acquisition LLC, a Delaware limited liability company ("Purchaser"), Fleming Companies, Inc., an Oklahoma corporation ("Fleming"), Fleming Transportation Service, Inc., an Oklahoma corporation, Piggly Wiggly Company, an Oklahoma corporation, RFS Marketing Services, Inc., an Oklahoma corporation, Fleming International Ltd., an Oklahoma corporation, Fleming Foods of Texas L.P., an Oklahoma limited partnership, Fleming Foods Management Co., L.L.C., an Oklahoma limited liability company, ABCO Food Group, Inc., a Nevada corporation, ABCO Markets, Inc., an Arizona corporation, and ABCO Realty Corp., an Arizona corporation (together with Fleming, each, a "Seller", and collectively, "Sellers"), each a debtor and debtor in possession under Chapter 11 Case No. 03-10945 (MFW) (jointly administered) pending in the United States Bankruptcy Court for the District of Delaware and, with respect to Article V and Sections 14.8 and 14.11 only, C&S Wholesale Grocers, Inc., a Vermont corporation ("Parent")." 39. The second item below numbered row 2 on Schedule 1.1(b) (Non-Operating PSCs) referring to the property known as "LA 190", is hereby amended by deleting it in its entirety and replacing it with the following text: "200 Affiliated Dr., Broussard, LA 70518 (LA 190)" In addition, pursuant to Section 12.14 of the Agreement, the parties hereto have mutually agreed to the forms of the (a) Transition Services Agreement, (b) Cure Escrow Agreement, (c) Deposit Escrow Agreement, (d) Indemnity Escrow Agreement and (e) Schedules to the Agreement, including Schedules 3.2, 3.2(d) and 8.11, each of which is attached hereto as Exhibit A (Transition Services Agreement), Exhibit B (Cure Escrow Agreement), Exhibit C (Deposit Escrow Agreement), Exhibit D (Indemnity Escrow Agreement) and Exhibit E (Schedules), respectively. General Counsel August 4, 2003 Page 14 If the terms set forth above correctly reflect your understanding, please execute a copy of this letter and return it to us at your earliest convenience. Upon receipt by us of such executed copy, this letter shall constitute an amendment to the Agreement binding on all parties thereto with respect to the matters set forth herein. Except as otherwise specifically set forth herein, nothing contained herein shall be deemed to constitute a waiver or amendment to the Agreement. This amendment is limited solely for the purposes and to the extent expressly set forth herein, and except as expressly modified hereby, the terms, provisions and conditions of the Agreement shall remain in full force and effect and are hereby ratified and confirmed in all respects. [remainder of page intentionally left blank] Very truly yours, THE FLEMING COMPANIES, INC. /s/ TED STENGER ------------------------------------- By: Ted Stenger Its: CRO FLEMING TRANSPORTATION SERVICE, INC. /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: President FLEMING INTERNATIONAL LTD. /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: President PIGGLY WIGGLY COMPANY /s/ JIMMY D. GARRISON ------------------------------------- By: Jimmy D. Garrison Its: President RFS MARKETING SERVICES, INC. /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: President FLEMING FOODS OF TEXAS L.P. By: Fleming Companies, Inc. Its: General Partner /s/ TED STENGER ------------------------------------- By: Ted Stenger Its: CRO E-15 FLEMING FOODS MANAGEMENT CO., L.L.C. By: Fleming Companies, Inc. Its: Sole Member /s/ TED STENGER ------------------------------------- By: Ted Stenger Its: CRO FLEMING FOREIGN SALES CORPORATION /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: Vice President, Treasurer and Assistant Secretary ABCO FOOD GROUP, INC. /s/ JAMES R. VAUGHN ------------------------------------- By: James R. Vaughn Its: Vice President ABCO MARKETS, INC. /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: President ABCO REALTY CORP. /s/ WILLIAM E. MAY, JR. ------------------------------------- By: William E. May, Jr. Its: President ACCEPTED AND AGREED: C&S ACQUISITION LLC /s/ MARK GROSS - ------------------------------------ By: Mark Gross Its: Executive Vice President C&S WHOLESALE GROCERS, INC. /s/ MARK GROSS - ------------------------------------ By: Mark Gross Its: Executive Vice President EX-10.2 4 d08741exv10w2.txt SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT EXHIBIT 10.2 August 23, 2003 C&S Acquisition LLC C&S Wholesale Grocers, Inc. 47 Old Ferry Road Brattleboro, Vermont 05302 Attn: General Counsel Re: Second Amendment to Asset Purchase Agreement Ladies and Gentlemen: Reference is made to the Asset Purchase Agreement dated July 7, 2003, by and among C&S Acquisition LLC, a Delaware limited liability company ("Purchaser"), Fleming Companies, Inc., an Oklahoma corporation ("Fleming"), Fleming Transportation Service, Inc., an Oklahoma corporation, Piggly Wiggly Company, an Oklahoma corporation, RFS Marketing Services, Inc., an Oklahoma corporation, Fleming International Ltd., an Oklahoma corporation, Fleming Foods of Texas L.P., an Oklahoma limited partnership, Fleming Foods Management Co., L.L.C., an Oklahoma limited liability company, ABCO Food Group, Inc., a Nevada corporation, ABCO Markets, Inc., an Arizona corporation, and ABCO Realty Corp., an Arizona corporation (together with Fleming, each, a "Seller", and collectively, "Sellers"), each a debtor and debtor in possession under Chapter 11 Case No. 03-10945 (MFW) (jointly administered) pending in the United States Bankruptcy Court for the District of Delaware and, with respect to Article V and Sections 14.8 and 14.11 only, C&S Wholesale Grocers, Inc., a Vermont corporation ("Parent") (as amended by the first amendment (the "First FAPA Amendment"), dated as of August 4, 2003, by and among Purchaser, Sellers and Parent, the "Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement. Pursuant to Section 14.3 of the Agreement, effective as of the date hereof, this letter shall amend the Agreement as follows: 1. Sections 2.9(b), (c), (d) and (e) of the Agreement are hereby amended by deleting them in their entirety and replacing them with the following text, and Section 2.9(h) is hereby added to the Agreement: "(b) On the Initial Closing Date, Purchaser, on behalf of the Sellers, shall deposit into escrow (the "Cure Escrow") the Cure Escrow Amount. Subject to paragraph (a) above, with respect to each Acquired Contract, Purchaser shall pay, as soon as practicable following the Initial Closing Date or applicable Subsequent Closing Date, as the case may be, all Cure Costs that are required to be paid with respect to such Acquired Contract pursuant to section 365 of the Bankruptcy Code and described in the Sale Order or any Order of the Bankruptcy Court relating to such cure Liability; provided, however, that Cure Costs that are the subject of a bona fide dispute shall be paid within five Business Days of the effectiveness of a settlement or Final Order of the Bankruptcy Court resolving such disputes, as the case may be. Such Cure Costs shall be payable from the Cure Escrow upon joint written instructions from Purchaser and Sellers to the applicable escrow agent. The Sellers shall not be permitted to direct the Cure Escrow Agent to make any cure payment. "(c) Subject to the limitations of Section 2.9 (d) and (e) and notwithstanding anything herein to the contrary: (i) Purchaser shall be permitted to negotiate with any FSA Customer for the payment of or settlement of the payment of any Cure Cost associated with any Acquired Contract to which such FSA Customer is a party; (ii) within two (2) Business Days of the delivery to Sellers of an FSA Settlement Notice in accordance with Section 2.9(d), Purchaser and Sellers shall jointly notify the Cure Escrow Agent to release from the Cure Escrow any cash amounts to be paid pursuant to such FSA Settlement Notice; (iii) the Cure Escrow Agent shall release such cash amounts within two (2) Business Days of the receipt of such FSA Settlement Notice; and (iv) Sellers shall execute such documents as reasonably requested by Purchaser to provide for the settlement or compromise of any FSA Accounts Receivable associated with such FSA Customer set forth in such FSA Settlement Notice and which complies with this Section 2.9 and Purchaser shall deliver fully executed originals of each such document to Sellers. "(d) A notice (each, an "FSA Settlement Notice") that Purchaser has agreed to make payments to, or cause payments to be made to, an FSA Customer relating to any Cure Costs associated with any Acquired Contract to which such FSA Customer is a party (each, an "FSA Settlement") shall state: (i) the identity of the FSA Customer; (ii) the identity of all Acquired Contracts to which such FSA Customer is a party; (iii) the identity of the Acquired Contracts that are the subject of the FSA Settlement; (iv) the amount, if any, of any FSA Accounts Receivable involved in such FSA Settlement, including, without limitation the FSA Accounts Receivable Compromised Amount and the FSA Accounts Receivable Uncompromised Amount; (v) the Cure Amount to be released from the Cure Escrow; and (vi) the effective date of the settlement of the Cure Amounts and FSA Accounts Receivable, if any, associated with such Acquired Contract (which date shall be no earlier than the second Business Day following the joint Purchaser and Sellers notification to the Cure Escrow Agent to release from the Cure Escrow any cash amounts to be paid pursuant to such FSA Settlement Notice) (the "FSA Settlement Date"). "(f) Notwithstanding anything to the contrary, after the Initial Closing Date, Sellers shall be permitted to compromise or settle any and all FSA Accounts Receivable, subject to the following limitations: (i) Sellers shall provide Purchaser with at least two (2) Business Days written notice of the intent to consummate a settlement involving a compromise of an FSA Accounts Receivable which notice shall provide Purchaser with the specific terms of such settlement; (ii) Sellers shall not, as part of such settlement, accept as payment in full of the outstanding amount of any FSA Accounts Receivable an amount that is less than 90% of such outstanding amount (if the proposed date of consummation 2 of the settlement of such amount is within 30 days following the Initial Closing Date), 80% of such amount (if the proposed date of consummation of the settlement of such amount is from and including the 31st day to the 60th day following the Initial Closing Date), or 70% of such outstanding amount (if the proposed date of consummation of the settlement of such amount is from and including the 61st day to the 90th day following the Initial Closing Date); and (iii) on a weekly basis, each party shall provide the other party with a status summary of its collection efforts with regard to FSA Accounts Receivable, including without limitation, the identity of each FSA Customer, the outstanding amount of its FSA Accounts Receivable, and a brief description of the efforts made, if any, to collect such FSA Accounts Receivable. "(h) Notwithstanding herein to the contrary, if the FSA Accounts Receivable Compromised Limit is reached, the provisions of Section 2.9(f) and 2.9(g) shall expire and shall, without the action of any Party, be deleted from this Agreement." To the extent that the FSA Accounts Receivable Compromised Limit is exceeded as a result of settlements by Purchaser, Purchaser Assignees and Third Party Purchasers with FSA Customers, Purchaser agrees that the amount of such excess shall be paid promptly to Sellers from the escrow account set up under the Cure Escrow Agreement or, if no such funds are in such escrow account, then such excess shall be paid by Purchaser. Sellers and Purchaser shall execute and deliver joint written instructions to the Cure Escrow Agent in order to effect the provisions contained in the immediately preceding sentence. 2. Section 3.1(c)(ii) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(ii) Seventy-five million dollars ($75,000,000) (the "Fixed Component of Purchase Price") minus (i) the Deposit, minus (ii) the Cure Escrow Amount, which shall be paid directly to the Cure Escrow Agent, and the remainder of which shall be paid by Purchaser at the Initial Closing and subject to the adjustment provisions set forth in Sections 2.7(c), 3.4, 3.7 and 12.8, in immediately available funds to an account designated in writing by Sellers at least two Business Days prior to the Initial Closing." 3. Section 12.15 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "12.15 Orders. At the hearing of the Bankruptcy Court on August 14, 2003 (or such later date to which such hearing may be continued, so long as such later date occurs on or prior to August 19, 2003), Sellers and Purchaser shall seek approval of a satisfactory Sale Order and a satisfactory assignment and assumption order from the Bankruptcy Court. Sellers and Purchaser mutually agree that the terms of such Sale Order and such assignment and assumption order are satisfactory to each party, and accordingly the provisions set forth in Exhibit F attached to the First FAPA Amendment shall be added to the Agreement." 3 4. Section 2.5(g) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "To the extent Purchaser exercises its Option Rights on or prior to the later of the close of business on the date of the Sale Hearing or seven days prior to the Initial Closing, to exclude any portion of the Acquired Assets pursuant to Section 2.5 above, notwithstanding anything in this Agreement to the contrary, Purchaser shall not be liable or responsible for, and shall not be required to reimburse Sellers and their Affiliates for, any Liabilities of Sellers and their Affiliates relating to such Acquired Assets. To the extent Purchaser exercises its Option Rights after the later of the close of business on the date of the Sale Hearing or seven days prior to the Initial Closing to exclude any portion of the Acquired Assets pursuant to this Section 2.5 above, notwithstanding anything in this Agreement to the contrary, Purchaser shall reimburse Sellers for all liabilities incurred in the ordinary course of operations under the related Acquired Contracts on or after the Initial Closing, until such time as Sellers, in the exercise of their commercially reasonable efforts, can terminate or otherwise reject such Acquired Contracts, so long as Sellers file, duly serve and are diligently prosecuting a motion in the Bankruptcy Court seeking authorization, as necessary, to reject such specified Acquired Contracts; provided, however, that in no event shall Purchaser have Liabilities for or reimburse Sellers or any third party for any Liabilities incurred before or after the Initial Closing for any amount directly or indirectly related to, arising out of or resulting from the rejection of, or failure to assume by the end of the Option Period, any Acquired Contract; provided, further, that notwithstanding the foregoing, Purchaser shall reimburse Sellers for any Liability, if any, incurred, and related to periods, after the Initial Closing under any such Acquired Contract to the extent, and only to the extent, that such Liability (i) is not caused by Sellers' breach of their obligations under the Transition Services Agreement and (ii) is deemed by a Final Order to be an administrative expense of the kind specified in Section 503(b)(1) of the Bankruptcy Code." 5. Purchaser acknowledges and agrees that it shall include in every Option Notice regarding Acquired Contracts that is delivered to Sellers after the Initial Closing, the following information: (i) such Acquired Contract's contract number or lease number, as provided to Purchaser by Sellers, if provided, or (ii) other reasonable details identifying such Acquired Contracts such as, to the extent available, subject matter, parties and date. To the extent the Purchaser is unable to identify in an Option Notice delivered after the Initial Closing the Acquired Contracts in accordance with the preceding sentence, Sellers and Purchaser shall cooperate with each other and work together in good faith to identify all Acquired Contracts subject to such Option Notice. 6. The parties hereto acknowledge and agree that, notwithstanding anything in the Agreement to the contrary, five million dollars ($5,000,000) shall be withheld from the Fixed Component of the Purchase Price at the Initial Closing and shall be paid to Sellers only at such time as any of the following, (i) the Miami Perishables Facility lease covering the property located at 3555 NW 77th Ave. Miami, FL (Fleming internal file reference FL-742 CL) or such other lease assignment relating to such facility mutually agreed to by Purchaser and Sellers in 4 writing (the "Miami Lease"), is transferred and assigned to Purchaser, Purchaser's Assignee or a Third Party Purchaser, (ii) such lease has been rejected pursuant to an Option Notice delivered to Sellers in accordance with the Agreement or (iii) if at any time the Sellers are ready, willing and able to transfer the Miami Lease to Purchaser, Purchaser's Assignee or a Third Party Purchaser, as the case may be, but the Bankruptcy Court had determined that either Purchaser, Purchaser's Assignee or a Third Party Purchaser, as the case may be, is unable to assume such Miami Lease pursuant to the Bankruptcy Code. Within 2 business days following the Initial Closing, Seller and Purchaser will jointly agree to either (i) place such five million dollars ($5,000,000) into an escrow account pursuant to a mutually agreed upon escrow agreement or (ii) provide that Fleming shall become a party to the escrow agreement entered into between Purchaser and the Third Party Purchaser that is acquiring the Miami Lease, dated as of August 22, 2003, so that Fleming shall have the right to receive five million dollars ($5,000,000) upon the release of funds from such escrow agreement, to the extent that such funds would otherwise be released to Purchaser. Purchaser acknowledges that Sellers failure to deliver the Miami Lease at the Initial Closing will not constitute a breach of any representation, warranty, covenant or closing condition (including under Section 8.11) contained in the Agreement. 7. The definition of the term "Indemnity Escrow Amount" set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: ""Indemnity Escrow Amount" means the amount deposited into escrow to satisfy potential indemnification obligations of Sellers under Article XIII (the "Indemnity Escrow"), which shall in no event exceed $16,500,000 and the release of which shall be governed by the Indemnity Escrow Agreement." 8. Section 13.3(b) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "Notwithstanding any other provision of this Agreement, the indemnification obligations of Sellers under Section 13.2(a)(i) or the indemnification obligation of Purchaser under Section 13.2(b)(i) will not exceed an amount equal to $16,500,000 (the "Indemnification Cap"), respectively." 9. Section 13.5(b) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "Notwithstanding anything herein to the contrary, in no event shall any Royalty Amounts be deposited into the Indemnity Escrow in an amount exceeding $16,500,000 in the aggregate (i.e., aggregating all Royalty Amounts deposited in the Indemnity Escrow, regardless of whether successful claims have been made against the Indemnity Escrow, thereby reducing the Indemnity Escrow below $16,500,000)." 10. Section 1.1 of the Agreement is hereby amended by adding the following definition in such section in its alphabetical order: 5 "Cure Escrow Agent" shall mean the escrow agent as defined under the Cure Escrow Agreement." 11. Section 1.1 of the Agreement is hereby amended by adding the following definition in such section in its alphabetical order: "Sellers' Share of the Estimated Amount" shall have the meaning set forth in Section 12.8." 12. Section 12.8 of the Agreement is hereby amended by adding the following sentence at the end of the fourth sentence of Section 12.8: "If a payment on a tax bill with respect to a Proration Period is due after the Applicable Closing and Purchaser, a Purchaser Assignee or a Third Party Purchaser is the party which is legally required to make payment of such tax bill, (i) and the Applicable Closing is the Initial Closing, the Purchase Price shall be reduced by the Seller's pro rata share of the "estimated amount" of the Periodic Taxes for such Proration Period ("Seller's Share of the Estimated Amount"), and to the extent, and only to the extent, of such reduction Sellers shall be treated as having satisfied their reimbursement obligation hereunder, and (ii) if the Applicable Closing is a Subsequent Closing, Sellers shall remit to Purchaser, a Purchaser Assignee or a Third Party Purchaser, as applicable, at the Applicable Closing, Sellers' Share of the Estimated Amount, and to the extent, and only to the extent, of such payment Sellers shall be treated as having satisfied their reimbursement obligation hereunder. For purposes of the preceding sentence, the "estimated amount" shall be determined based upon the Periodic Taxes as shown on the most recent tax bill received with respect to the applicable property." Purchaser shall have no right of set-off against any of the Seller's Share of the Estimated Amount. 13. Section 12.8 of the Agreement is hereby amended by adding the following text at the end of the fifth sentence of Section 12.8: "and if the other party is a Seller, such invoice amount shall be reduced by the Sellers' Share of the Estimated Amount with respect to the applicable property which is the subject of the tax bill, and if such Seller's pro rata share of the amount of the Periodic Taxes shown on the actual tax bill is less than the Sellers' Share of the Estimated Amount, Purchaser shall promptly reimburse such Seller for the amount of any such excess, and if such Sellers' pro rata share of the amount of the Periodic Taxes shown on the actual tax bill is greater than the Sellers' Share of the Estimated Amount, such Seller shall promptly reimburse Purchaser for the amount of any such excess." 14. Section 10.2(d) of the Agreement is hereby amended by deleting the words "Intentionally Deleted" and adding the following text: "A lease assignment and assumption agreement substantially in the form attached hereto as Exhibit C for each Lease and Sublease (other than Leases and 6 Subleases for properties listed on Schedules 1.1(a) and 1.1(b) to the Agreement), and a lease assignment and assumption agreement substantially in the form attached hereto as Exhibit D for each Lease and Sublease for properties listed on Schedules 1.1(a) and 1.1(b) to the Agreement, with such modifications as shall be reasonably acceptable to Sellers and which shall be appropriate for recording in each applicable county land recorder's office, all duly executed by the applicable Seller;" 15. Schedule 1.1(a) (Operating PSCs) to the Agreement is amended by adding the following Owned Real Property in Section 7 of such schedule: "Lot 67, Unit 2 in Freeport Industrial Park, Southaven, Mississippi (approximately 2.73 acre parcel) (MS 209), which is adjacent to MS 210." Further, Sellers acknowledge and agree that MS 209 shall be considered Owned Real Property for all purposes of the Agreement. 16. The form of Cure Escrow Agreement attached as Exhibit B to the First Amendment to the Agreement, dated as of August 4, 2003, shall be deleted and replaced in its entirety with the form of Cure Escrow Agreement attached hereto as Exhibit A. 17. Sellers acknowledge and agree that Option Notice, delivered by Purchaser or by AWG Acquisition, LLC to Sellers on August 16, 2003 by e-mail, requesting the exclusion of certain Acquired Assets pursuant to Section 2.5 of the Agreement, shall be deemed for all purposes to have been delivered by Purchaser prior to seven days prior to the Initial Closing and shall be a valid notice. The Option Notice given by Purchaser to Sellers on August 19, 2003 was not provided seven days in advance of the Initial Closing pursuant to Section 2.5(g) of the Agreement and the parties will work together to identify Acquired Contracts subject to such notice. 18. Sellers acknowledge and agree to the following: (a) that they shall take all actions to cause the Escrow Agent (as defined in the Indemnity Escrow Agreement) (the "Indemnity Escrow Agent") to pay to Purchaser, as soon as possible, $1,500,000 as reimbursement for Indemnifiable Losses relating to, resulting from or arising out of (i) the breach by Sellers of their representations regarding environmental conditions at the PSC located in Lafayette, Louisiana (the "Lafayette PSC"); provided, however, that this Section 18 shall only be effective upon the execution of a written agreement by the Third Party Purchaser that will purchase the Lafayette PSC to release Sellers from all actions, damages, debts, losses, liabilities, obligations, representations, expenses and claims relating to or arising out of any environmental conditions existing at the Lafayette PSC as of the Initial Closing, (ii) the inaccuracy of the representations made by Sellers with respect to the parcel of real property located at 2820 Oakland Street, Garland, Texas, (the "Garland Real Property") in respect of which Sellers are unable to transfer good, valid, and marketable fee simple title to Purchaser or its assignee and (iii) inaccuracy of the representations made by Sellers with respect to the parcel of real property located at 2440 W. Lincoln Street (Arctic Storage), in Phoenix, Arizona (the "Phoenix Property"), in respect 7 of which Seller is unable to transfer good, valid, and marketable fee simple title to Purchaser. (b) that, in furtherance of clauses (i), (ii) and (iii) of Section 18(a), Sellers are executing and delivering to Purchaser the joint written instructions attached hereto as Exhibit B, which provides for the release of funds in the amount of $1,500,000 pursuant to the Indemnity Escrow Agreement. Upon receipt of such $1,500,000, Purchaser (x) waives any rights to assert reimbursement for Indemnifiable Losses under Article XIII of the Agreement with respect to the matters referred to in clauses (i), (ii) and (iii) of Section 18(a), and (y) waives the closing condition in Section 8.11 with respect to the Phoenix Property. 19. Sellers acknowledge and agree that the notice delivered by Purchaser to Sellers pursuant to Section 3.3(e) of the Agreement, dated August 22, 2003, shall be deemed for all purposes to have been delivered at least fifteen days prior to the Initial Closing. 20. Section 13.5(a)(i) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following text: "(i) One million five hundred thousand dollars ($1,500,000) (the "Closing Indemnity Payment") from the Initial Estimate Payment which shall be paid at the Initial Closing." 21. Both parties acknowledge and agree that the Initial Closing will be deemed to have occurred on 11:59:59 p.m. on August 23, 2003, subject to Purchaser's payment obligations under Section 3.1 of the Agreement. 22. Sellers represent and warrant to Purchaser that the terms and provisions of this letter have been given to and discussed with (i) the agents under the DIP Credit Agreement, (ii) the agents under the Prepetition Credit Agreement, and (iii) the unsecured creditors' committee. 23. Purchaser acknowledges and agrees that in the event that Purchaser, a Purchaser Assignee or a Third Party Purchaser, as applicable, does not have at the Initial Closing the necessary Permits to acquire from Sellers cigarettes and other tobacco products comprising Inventory at an Operating PSC required to be purchased by such Person (a "Tobacco Buyer") pursuant to the Agreement, Sellers shall not be required to transfer title to such cigarettes and other tobacco products at the Initial Closing. In lieu of transferring title to Tobacco Buyer, Sellers shall execute a bill of sale (a "Conditional Bill of Sale") providing for the transfer of title to such cigarettes and other tobacco products to Tobacco Buyer only upon the delivery by Tobacco Buyer of evidence reasonably satisfactory to Sellers that it has obtained all necessary Permits to acquire title to such cigarettes and other tobacco products. Tobacco Buyer shall also be required to execute the Conditional Bill of Sale, and pursuant to the Conditional Bill of Sale Tobacco Buyer shall thereby agree (i) not to sell or transfer such cigarettes and other tobacco products, and to store such cigarettes and other tobacco products in a secure place at the applicable Operating PSC, until such time as Tobacco Buyer delivers evidence reasonably satisfactory to Sellers that it has obtained all necessary Permits to acquire title to such cigarettes and other tobacco products, and (ii) that risk of loss to such cigarettes and other tobacco products 8 shall be deemed to pass to Tobacco Buyer at 11:59:59 p.m. on August 23, 2003. Sellers shall hold the Conditional Bill of Sale in escrow on behalf of Tobacco Buyer and shall deliver the Conditional Bill of Sale to Tobacco Buyer upon the delivery by Tobacco Buyer to Sellers of evidence reasonably satisfactory to Sellers that it has obtained all necessary Permits to acquire title to such cigarettes and other tobacco products. 24. Section 12.8 of the Agreement is hereby amended by adding the following text at the end of such Section 12.8: "Purchaser shall indemnify, defend and hold harmless Sellers and their Affiliates and their respective directors, officers, employees, advisors, representatives and agents from and against all losses, liabilities, damages, costs and/or expenses (including reasonable attorneys' fees and expenses) actually incurred by Sellers and their Affiliates and their respective directors, officers, employees, advisors, representatives and agents, including in connection with any actions, suits, demands, assessments, judgments and settlements, relating to, resulting from or arising out of any failure by Purchaser, a Purchaser Assignee or a Third Party Purchaser to pay to the appropriate Tax authority in accordance with applicable law any Periodic Taxes, to the extent that at the Initial Closing the amount required to be paid pursuant to Section 3.1(c)(ii) is reduced by Sellers' Share of the Estimated Amount of such Periodic Taxes or to the extent of any Subsequent Closing Seller shall have remitted Sellers' Share of the Estimated Amount." 25. Purchaser acknowledges that Seller's failure to deliver the "Marquis" Trademark will not constitute a breach of a representation or warranty or closing condition (including Section 8.11) of the Agreement. 26. The parties agree that Purchaser shall move out of and vacate the PSC's located at Northeast, Maryland, Geneva, Alabama and Salt Lake City, Utah by August 31, 2003, and Phoenix, Arizona by September 30, 2003. 27. The parties agree that Sellers shall pay the delinquent taxes relating to the PSC at Lincoln, Nebraska and the GMD facility at Memphis, Tennessee and to the extent that Sellers have been reimbursed for such payments and other cure amounts as reflected on the closing statement being delivered as of the Initial Closing (including by way of an increase in the amount paid by Purchaser at the Initial Closing), Sellers may not assert a claim pursuant to the Cure Escrow Agreement with respect to the Lincoln, Nebraska PSC, the GMD facility of Memphis, Tennessee and such other cure amounts, and Sellers shall obtain either (i) receipt of an acknowledgment from the landlord that payment of the delinquent taxes plus penalties and interest sent directly by Fleming to the taxing authority shall satisfy the landord's cure claim or (ii) entry of an order from the Bankruptcy Court acknowledging satisfaction of the cure amount relating to such facility. If the terms set forth above correctly reflect your understanding, please execute a copy of this letter and return it to us at your earliest convenience. Upon receipt by us of such executed copy, this letter shall constitute an amendment to the Agreement binding on all parties 9 thereto with respect to the matters set forth herein. Except as otherwise specifically set forth herein, nothing contained herein shall be deemed to constitute a waiver or amendment to the Agreement. This amendment is limited solely for the purposes and to the extent expressly set forth herein, and except as expressly modified hereby, the terms, provisions and conditions of the Agreement shall remain in full force and effect and are hereby ratified and confirmed in all respects. [remainder of page intentionally left blank] 10 Very truly yours, THE FLEMING COMPANIES, INC. FLEMING TRANSPORTATION SERVICE, INC. FLEMING INTERNATIONAL LTD. PIGGLY WIGGLY COMPANY RFS MARKETING SERVICES, INC. FLEMING FOODS OF TEXAS L.P. FLEMING FOODS MANAGEMENT CO., L.L.C. ABCO FOOD GROUP, INC. ABCO MARKETS, INC. ABCO REALTY CORP. /s/ TED STENGER --------------------------------------- By: Ted Stenger Authorized Signatory ACCEPTED AND AGREED: C&S ACQUISITION LLC /s/ MARK GROSS - ------------------------------------ By: Mark Gross Its: Executive Vice President C&S WHOLESALE GROCERS, INC. /s/ MARK GROSS - ------------------------------------ By: Mark Gross Its: Executive Vice President EX-99.1 5 d08741exv99w1.txt PRESS RELEASE EXHIBIT 99.1 FLEMING COMPLETES GROCERY WHOLESALE TRANSACTION DALLAS, Aug. 25 /PRNewswire-FirstCall/ -- Fleming Companies, Inc. announced today that the sale of the company's grocery wholesale assets was completed as expected at midnight, Saturday, August 23, 2003. The Garland Division was acquired by Grocers Supply. The Miami Division was acquired by Associated Grocers of Florida. Associated Wholesale Grocers of Kansas City acquired the Nashville, Memphis, Memphis GMD, Tulsa, Lincoln and Topeka Divisions. C&S acquired the Hawaii, Fresno, Sacramento, Sacramento GMD, LaCrosse, LaCrosse GMD, Massillon and Milwaukee Divisions. With the sale finalized, the company also announced today that Peter S. Willmott has completed his tenure as Fleming's Interim CEO and President. Mr. Willmott continues to serve as a member of the Board of Directors. Non- Executive Chairman of the Board Archie R. Dykes has assumed the responsibilities of CEO. "Pete has served Fleming with much distinction under very difficult circumstances," said Dr. Dykes. "We have been fortunate to have Pete serve as Interim CEO and President, and he has done so at considerable disruption to his personal life. Pete has been instrumental in helping make the best of a challenging situation at Fleming. The Board of Directors is grateful for all that Pete has done in service to the company, and we appreciate his continued role as a member of the Board of Directors." Dr. Dykes will continue to work closely with Chief Restructuring Officer Ted Stenger as the company works through the remainder of the restructuring process. Fleming's remaining operational entity is the Core-Mark International convenience distribution business, based in South San Francisco, California. Core-Mark's fill rates to customers have returned to historical industry standards and the company continues to focus on serving the convenience industry as a broad line distributor with a nationwide distribution network. The company is actively exploring strategic alternatives for Core-Mark. This includes responding to expressions of interest from parties interested in acquiring the convenience business. About Fleming Fleming (OTC Pink Sheets: FLMIQ) and its operating subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 1, 2003. The filings were made in the U.S. Bankruptcy Court in Wilmington, Delaware. Fleming's court filings are available via the court's website, at www.deb.uscourts.gov. To learn more about Fleming, visit the company's Web site at www.fleming.com. Forward-Looking Statement This document contains forward-looking statements regarding future events. These forward-looking statements are subject to a number of factors that could cause actual results to differ materially from those stated in this release, including without limitation: the ability of the company to continue as a going concern; the ability of the company to operate pursuant to the terms of the DIP facility; court approval of the company's motions prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the company to obtain or maintain trade credit, and shipments and terms with vendors and service providers for current orders; the company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the company's liquidity or results of operations; the ability to fund and execute its business plan; the ability to retain and compensate key executives and associates; the ability of the company to retain customers; and changes in general economic conditions. Additional information about these and other factors is contained in Fleming's reports and filings with the Securities and Exchange Commission. The forward- looking statements speak only as of the date made and Fleming undertakes no obligation to update forward-looking statements to reflect developments or information obtained after the date of this release. CONTACT: SHANE BOYD 972.906.2125 SOURCE Fleming -----END PRIVACY-ENHANCED MESSAGE-----