In re: EAGLE FOOD CENTERS, INC., et al., Chapter 11 Debtors

Case No. 03-15299 (PSH), (Jointly Administered)United States Bankruptcy Court, N.D. Illinois
September 11, 2003

ORDER AUTHORIZING AND APPROVING (I) SALE OF CERTAIN OF THE DEBTORS’ ASSETS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES, (II) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES, AND (III) ASSUMPTION OF CERTAIN LIABILITIES
PAMELA S. HOLLIS, Bankruptcy Judge

Upon the motion, dated June 17, 2003 (the “Motion”)[1] of the above-captioned debtors and debtors-in-possession (the “Debtors”), for inter alia, entry of an order under 11 U.S.C. § 105(a), 363, 365, and 1146(c) and F.R.Bankr.P. 2002, 6004, 6006, and 9014 (the “Sale Order”) authorizing (i) the Debtors’ sale (the “Sale”) of assets related to stores 038, 073, 104, 227, and 301 (the “Acquired Assets”) to Albertson’s Inc. (the “Purchaser”) as identified in, and pursuant to, that certain Acquisition Agreement, by and between Eagle Food Centers, Inc. and Albertson’s Inc. (the “Purchase Agreement,” a copy of which is attached hereto as Exhibit 1), (ii) the Debtors’ assumption

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and assignment to the Purchaser of certain executory contracts and unexpired leases (the “Assumed Contracts”) and certain assignments of unexpired leases (collectively, the “Assignment Agreements”[2] and together with the Assumed Contracts, collectively the “Property Interests”), pursuant to and as described in the Purchase Agreement, and (iii) the assumption by the Purchaser of certain liabilities (the “Assumed Liabilities”), pursuant to and as described in the Purchase Agreement; and the Court having entered an order on June 27, 2003 (the “Procedures Order”) approving (i) the Bidding Procedures, (ii) the Granting of Certain Bid Protections, (iii) the forms of Purchase Agreement and Lease Termination Agreement, and (iv) the Notice Procedures and the setting of a Sale Hearing; and a hearing on the Motion having been held on September 11, 2003 (the “Sale Hearing”), at which time all interested parties were offered an opportunity to be heard with respect to the Motion; and the Court having reviewed and considered (i) the Motion, (ii) the objections thereto, if any, (iii) the arguments of counsel made, and the evidence proffered or adduced, at the Sale Hearing; and it appearing that the relief requested in the Motion is in the best interests of the Debtors, their estate and creditors and other parties in interest; and upon the record of the Sale Hearing and these cases; and after due deliberation thereon; and good cause appearing therefor, it is hereby

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FOUND AND DETERMINED THAT:[3]

A. The court has jurisdiction over this Motion pursuant to 28 U.S.C. § 157 and 1334, and this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (N). Venue of these cases and the Motion in this district is proper under 28 U.S.C. § 1408 and 1409.

B. The statutory predicates for the relief sought in the Motion are sections 105, 363, 365 and 1146(c) of 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), and F.R.Bankr.P. 2002, 6004, 6006 and 9014.

C. As evidenced by the affidavits of service and publication previously filed with the Court, and based on the representations of counsel at the Sale Hearing, (i) proper, timely, adequate and sufficient notice of the Motion, the Sale Hearing, the Sale, the assumption and assignment of the Property Interests, and the Cure Amounts has been provided in accordance with 11 U.S.C. § 102(1), 363 and 365 and F.R.Bankr.P. 2002, 6004
and 9014 and in compliance with the Procedures Order, (ii) such notice was good and sufficient, and appropriate under the particular circumstances, and (iii) no other or further notice of the Motion, the Sale Hearing, the Sale, the assumption and assignment of the Property Interests, or the Cure Amounts is or shall be required.

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D. As demonstrated by (i) the testimony and other evidence proffered or adduced at the Sale Hearing, (ii) the representations of counsel made on the record at the Sale Hearing, the Debtors have marketed the Acquired Assets and conducted the sale process in compliance with the Procedures Order and the Auction was duly noticed and conducted in a non-collusive, fair and good faith manner.

E. Each Debtor (i) has full corporate power and authority to execute the Purchase Agreement and all other documents contemplated thereby, and the sale of the Acquired Assets by the Debtors has been duly and validly authorized by all necessary corporate action of each of the Debtors, (ii) has all of the corporate power and authority necessary to consummate the transactions contemplated by the Purchase Agreement, (iii) has taken all corporate action necessary to authorize and approve the Purchase Agreement and the consummation by such Debtors of the transactions contemplated thereby, and (iv) no consents or approvals, other than those expressly provided for in the Purchase Agreement, are required for the Debtors to consummate such transactions.

F. In connection with the sale of the Acquired Assets, no Termination Fee has been awarded to any party.

G. Approval of the Purchase Agreement and consummation of the Sale at this time are in the best interests of the Debtors, their creditors, their estates, and other parties in interest.

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H. The Debtors have demonstrated both (i) good, sufficient, and sound business purpose and justification and (ii) compelling circumstances for the Sale pursuant to 11 U.S.C. § 363(b) prior to, and outside of, a plan of reorganization in that, among other things, the Sale at the current time will maximize the value of the Acquired Assets and the Business (as defined below) on behalf of the Debtors’ creditors and estates.

I. A reasonable opportunity to object or be heard with respect to the Motion and the relief requested therein has been afforded to all interested persons and entities, including: (i) the Office of the United States Trustee; (ii) counsel for the Purchaser; (iii) counsel for the Creditors’ Committee; (iv) counsel for the Debtors’ postpetition lender; (v) all entities known to have expressed an interest in a transaction with respect to the Acquired Assets during the past six months; (vi) all entities known to have asserted any lien, claim, encumbrance or interest (the “Interests”) in or upon the Acquired Assets; (vii) all federal, state, and local regulatory or taxing authorities or recording offices which have a reasonably known interest in the relief requested by the Motion; (viii) all parties to Property Interests; (ix) the United States Attorney’s office; (x) the Securities and Exchange Commission; (xi) the Internal Revenue Service; and (xii) all entities on the 2002 service list.

J. The Purchase Agreement was negotiated, proposed and entered into by the Debtors and the Purchaser without collusion, in good faith, and from arm’s-length bargaining positions. Neither the Debtors nor the Purchaser have engaged in any

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conduct that would cause or permit the Purchase Agreement to be avoided under 11 U.S.C. § 363(n).

K. The Purchaser is a good faith purchaser under 11 U.S.C. § 363(m) and, as such, is entitled to all of the protections afforded thereby. The Purchaser will be acting in good faith within the meaning of 11 U.S.C. § 363(m) in closing the transactions contemplated by the Purchase Agreement at all times after the entry of this Sale Order.

L. The consideration provided by the Purchaser for the Acquired Assets pursuant to the Purchase Agreement (i) is fair and reasonable, (ii) is the highest and best offer for the Acquired Assets, (iii) will provide a greater recovery for the Debtors’ creditors than would be provided by any other practical available alternative, and (iv) constitutes reasonably equivalent value and fair consideration under the Bankruptcy Code and under the laws of the United States, any state, territory, possession, or the District of Columbia.

M. The transfer of the Acquired Assets to the Purchaser will be a legal, valid, and effective transfer of the Acquired Assets, and will vest the Purchaser with all right, title, and interest of the Debtors to the Acquired Assets free and clear of all Interests, including, but not limited to those (A) that purport to give to any party a right or option to effect any forfeiture, modification, right of first refusal, or termination of the Debtors’ or the Purchaser’s interest in the Acquired Assets, or any similar rights and (B)

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relating to taxes arising under or out of, in connection with, or in any way relating to the operation of the Business prior to the Closing Date.

N. The Purchaser would not have entered into the Purchase Agreement and would not consummate the transactions contemplated thereby, thus adversely affecting the Debtors, their estates, and their creditors, if the sale of the Acquired Assets to the Purchaser and the assignment of the Property Interests and Assumed Liabilities to the Purchaser was not free and clear of all Interests of any kind or nature whatsoever, or if the Purchaser would, or in the future could, be liable for any of the Interests.

O. The Debtors may sell the Acquired Assets free and clear of all Interests of any kind or nature whatsoever because, in each case, one or more of the standards set forth in 11 U.S.C. § 363(f)(1)-(5) has been satisfied. Those (i) holders of Interests and (ii) non-debtor parties to Property Interests who did not object, or who withdrew their objections, as the case may be, to the Sale or the Motion are deemed to have consented pursuant to 11 U.S.C. § 363(f)(2). Those (i) holders of Interests and (ii) non-debtor parties to Property Interests who did object fall within one or more of the other subsections of 11 U.S.C. § 363(f) and are adequately protected by having their Interests, if any, attach to the cash proceeds of the Sale ultimately attributable to the property against or in which they claim an Interest.

P. The (i) transfer of the Acquired Assets to the Purchaser and (ii) assumption and assignment to the Purchaser of the Property Interests and Assumed

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Liabilities, will not subject the Purchaser to any liability whatsoever with respect to the operation of the business related to the Acquired Assets (the “Business”) prior to the Closing Date or by reason of such transfer under the laws of the United States, any state, territory, or possession thereof, or the District of Columbia, based, in whole or in part, directly or indirectly, on any theory of law or equity, including, without limitation, any theory of equitable law, including, without limitation, any theory of antitrust or successor or transferee liability.

Q. The sale of the Acquired Assets to the Purchaser is a prerequisite to the Debtors’ ability to confirm and consummate a plan or plans of reorganization. The Sale is a sale in contemplation of a plan and, accordingly, subject to the resolution of the 1146(c) Stipulation (as defined herein), may be a transfer pursuant to 11 U.S.C. § 1146(c).

R. The Debtors have demonstrated that it is an exercise of their sound business judgment to assume and assign the Property Interests to the Purchaser in connection with the consummation of the Sale, and the assumption and assignment of the Property Interests is in the best interests of the Debtors, their estates, and their creditors. The Property Interests being assigned to, and the liabilities being assumed by, the Purchaser are an integral part of the Acquired Assets being purchased by the Purchaser and, accordingly, such assumption and assignment of Property Interests and Liabilities are

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reasonable, enhance the value of the Debtors’ estates, and do not constitute unfair discrimination.

S. The Debtors have, (i) to the extent necessary, cured, or have provided adequate assurance of cure, of any default existing prior to the date hereof with respect to the Property Interests, within the meaning of 11 U.S.C. § 365(b)(1)(A), and, (ii) to the extent necessary, provided compensation or adequate assurance of compensation to any party for any actual pecuniary loss to such party resulting from a default prior to the date hereof with respect to the Property Interests, with the meaning of 11 U.S.C. § 365(b)(1)(B), and, to the extent necessary, the Purchaser has provided adequate assurance of their future performance with respect to the Property Interests, within the meaning of 11 U.S.C. § 365(b)(1)(C).

NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:

General Provisions
1. The Motion is GRANTED, as further described herein.

Approval of the Purchase Agreement
2. The Purchase Agreement, and all of the terms and conditions thereof, is hereby approved.

3. Pursuant to 11 U.S.C. § 363(b), the Debtors are authorized and directed to consummate the Sale, pursuant to and in accordance with the terms and conditions of the Purchase Agreement.

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4. The Debtors are authorized and directed to execute and deliver, and empowered to perform under, consummate and implement, the Purchase Agreement, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the Purchase Agreement, and to take all further actions as may be requested by the Purchaser for the purpose of assigning, transferring, granting, conveying and conferring to the Purchaser or reducing to possession, the Acquired Assets, or as may be necessary or appropriate to the performance of the obligations as contemplated by the Purchase Agreement.

Transfer of Acquired Assets
5. Pursuant to 11 U.S.C. § 105(a) and 363(f), the Acquired Assets shall be transferred to the Purchaser, and upon consummation of the Purchase Agreement (the “Closing”) shall be, free and clear of all Interests of any kind or nature whatsoever with all such Interests of any kind or nature whatsoever to attach to the net proceeds of the Sale in the order of their priority, with the same validity, force and effect which they now have as against the Acquired Assets, subject to any claims and defenses the Debtors may possess with respect thereto.

6. Any and all net proceeds as a result of the sale of Acquired Assets shall be utilized consistent with the provisions of the Financing (as defined in the Purchase Agreement) and with respect to other liens, if any, to the extent permitted by the Bankruptcy Code.

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7. Except as expressly permitted or otherwise specifically provided by the Purchase Agreement or this Sale Order, all persons and entities, including, but not limited to, all debt security holders, governmental, tax, and regulatory authorities, lenders, trade and other creditors, holding Interests of any kind or nature whatsoever against or in the Debtors or the Acquired Assets (whether legal or equitable, secured or unsecured, matured or unmatured, contingent or non-contingent, senior or subordinated), arising under or out of, in connection with, or in any way relating to, the Debtors, the Acquired Assets, the operation of the Business prior to the Closing Date, or the transfer of the Acquired Assets to the Purchaser, hereby are forever barred, estopped, and permanently enjoined from asserting against the Purchaser, its successor or assign, its property, or the Acquired Assets, such persons’ or entities’ Interests.

8. The transfer of the Acquired Assets to the Purchaser pursuant to the Purchase Agreement constitutes a legal, valid, and effective transfer of the Acquired Assets, and shall vest the Purchaser with all right, title, and interest of the Debtors in and to the Acquired Assets free and clear of all Interests of any kind or nature whatsoever.

Assumption and Assignment to Purchaser of Property Interests
9. Pursuant to 11 U.S.C. § 105(a) and 365, and subject to and conditioned upon the Closing of the Sale, the Debtors’ assumption and assignment to the Purchaser, and the Purchaser’s assumption on the terms set forth in the Purchase Agreement,

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of the Assumed Contracts is hereby approved, and the requirements of 11 U.S.C. § 365(b)(1) with respect thereto are hereby deemed satisfied. Additionally, pursuant to 11 U.S.C. § 365 and in accordance with this Sale Order, the Debtors are authorized to assume and assign to Purchaser the Assignment Agreements,[4] to the extent that the Assignment Agreements are executory contracts;provided, however, that (except as otherwise provided in paragraphs 11 and 12 of this Sale Order) to the extent the Assignment Agreements are not executory contracts, the Purchaser is subject to all of the rights, interests, obligations and duties imposed on the assignee under, pursuant to and as provided in the Assignment Agreements and any documents entered into in connection with the assumption and assignment of the Property Interests, as if the Purchaser was the original assignee under the Assignment Agreements, and the requirements of 11 U.S.C. § 365(b)(1) with respect thereto are hereby deemed satisfied.

10. The Debtors are hereby authorized and directed in accordance with 11 U.S.C. § 105(a) and 365 to (a) assume and assign to the Purchaser, effective upon the Closing of the Sale, the Property Interests free and clear of all Interests of any kind or nature whatsoever and (b) execute and deliver to the Purchaser such documents or other

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instruments as may be necessary to assign and transfer the Property Interests and Assumed Liabilities to the Purchaser.

11. The Property Interests shall be transferred to, and remain in full force and effect for the benefit of, the Purchaser in accordance with their respective terms, notwithstanding any provision in the Property Interests (including those of the type described in sections 365(b)(2) and (f) of the Bankruptcy Code) that prohibits, restricts, or conditions such assignment or transfer. Pursuant to 11 U.S.C. § 365(k), the Debtors shall be relieved from any further liability with respect to the Property Interests after such assignment to and assumption by the Purchaser.

12. All defaults or other obligations of the Debtors under the Property Interests arising or accruing prior to the date of this Sale Order as specifically listed on Exhibit 2 attached hereto, (without giving effect to any acceleration clauses or any default provisions of the kind specified in section 365(b)(2) of the Bankruptcy Code) shall be cured by the Debtors at the Closing of the Sale or as soon thereafter as practicable, and the Purchaser shall have no liability or obligation arising or accruing prior to the date of the Closing of the Sale, except as otherwise expressly provided in the Purchase Agreement.

13. Each non-Debtor party to an Assumed Contract and each non-Debtor party to an Assignment Agreement hereby is forever barred, estopped, and permanently enjoined from asserting against the Debtors or the Purchaser, or the property

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of either of them, any default, liability or obligation (whether legal or equitable, secured or unsecured, matured or unmatured, contingent or non-contingent, senior or subordinate) existing as of the Closing Date. Without limiting the foregoing, each non-Debtor party to an Assignment Agreement is hereby forever barred, estopped, and permanently enjoined from asserting against the Purchaser or the Debtors, or their property, any claim for indemnification under such Assignment Agreement that is based upon, arises from or relates in any way to any event(s) and/or occurrence(s) on or before the Closing Date.

14. The failure of any party to identify any amendment, modification, sublease or other agreement relating to or affecting the Property, other than those listed on the attached Exhibit 3, shall forever bar and estop said party, its heirs, successors and assigns, and any predecessor in interest, of itself and anyone claiming by, through or under it or them, from asserting any claims or attempting to enforce any rights based thereon in any subsequent cases, proceedings or actions against the Debtors or the Purchaser (or parties claiming through the Purchaser), in law or equity in this or before any other court or tribunal, and any such claim(s) shall be and hereby are terminated, exonerated, barred and adjudicated against such person.

Additional Provisions
15. The consideration provided by the Purchaser for the Acquired Assets under the Purchase Agreement shall be deemed to constitute reasonably equivalent

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value and fair consideration under the Bankruptcy Code and under the laws of the United States, any state, territory, possession, or the District of Columbia.

16. The consideration provided by the Purchaser for the Acquired Assets under the Purchase Agreement is fair and reasonable and may not be avoided under section 363(n) of the Bankruptcy Code.

17. In connection with the sale of the Acquired Assets, no Termination Fee has been awarded to any party.

18. On the Closing Date of the Sale, each of the Debtors’ creditors is authorized and directed to execute such documents and take all other actions as may be necessary to release its Interests in the Acquired Assets, if any, as such Interests may have been recorded or may otherwise exist.

19. This Sale Order (a) shall be effective as a determination that, on the Closing Date, all Interests of any kind or nature whatsoever existing as to the Debtors or the Acquired Assets prior to the Closing have been unconditionally released, discharged and terminated, and that the conveyances described herein have been effected, and (b) shall be binding upon and shall govern the acts of all entities including without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental departments, secretaries of state, federal, state, and local officials, and all other persons and entities who may be required by operation of law, the duties of their office, or

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contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of the Acquired Assets.

20. Each and every federal, state, and local governmental agency or department is hereby directed to accept any and all documents and instruments necessary and appropriate to consummate the transactions contemplated by the Purchase Agreement.

21. All entities who are presently, or on the Closing Date may be, in possession of some or all of the Acquired Assets are hereby directed to surrender possession of the Acquired Assets to the Purchaser on the Closing Date.

22. The Purchaser shall have no liability or responsibility for any liability or other obligation of the Debtors arising under or related to the Acquired Assets other than for the Assumed Liabilities. Without limiting the generality of the foregoing, and except as otherwise specifically provided herein and in the Purchase Agreement, the Purchaser shall not be liable for any claims against the Debtors or any of their predecessors or affiliates, and the Purchaser shall have no successor or vicarious liabilities of any kind or character whether known or unknown as of the Closing Date, now existing or hereafter arising, whether fixed or contingent, with respect to the Debtors or any obligations of the Debtors arising prior to the Closing Date, including, but not limited to, liabilities on account of any taxes arising, accruing, or payable under, out of, in connection

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with, or in any way relating to the operation of the Business prior to the Closing Date.

23. Under no circumstances shall the Purchaser be deemed a successor of or to the Debtors for any Interest against or in the Debtors or the Acquired Assets of any kind or nature whatsoever. The sale, transfer, assignment and delivery of the Acquired Assets shall not be subject to any Interests, and Interests of any kind or nature whatsoever shall remain with, and continue to be obligations of, the Debtors. All persons holding Interests against or in the Debtors or the Acquired Assets of any kind or nature whatsoever shall be, and hereby are, forever barred, estopped, and permanently enjoined from asserting, prosecuting, or otherwise pursuing such Interests of any kind or nature whatsoever against the Purchaser, its property, its successors and assigns, or the Acquired Assets with respect to any Interest of any kind or nature whatsoever such person or entity had, has, or may have against or in the Debtors, their estates, officers, directors, shareholders, or the Acquired Assets. Following the Closing Date, no holder of an Interest in the Debtors shall interfere with the Purchaser’s title to or use and enjoyment of the Acquired Assets based on or related to such Interest, or any actions that the Debtors may take in their Chapter 11 cases.

24. This Court retains jurisdiction to enforce and implement the terms and provisions of the Purchase Agreement, all amendments thereto, any waivers and consents thereunder, and of each of the agreements executed in connection therewith in

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all respects, including, but not limited to, retaining jurisdiction to (a) compel delivery of the Acquired Assets to the Purchaser, (b) compel delivery of the purchase price or performance of other obligations owed to the Debtors, (c) resolve any disputes arising under or related to the Purchase Agreement, except as otherwise provided therein, (d) interpret, implement, and enforce the provisions of this Sale Order, and (c) protect the Purchaser against any Interests in the Debtors or the Acquired Assets, of any kind or nature whatsoever, attaching to the proceeds of the Sale.

25. The transactions contemplated by the Purchase Agreement are undertaken by the Purchaser in good faith, as that term is used in section 363(m) of the Bankruptcy Code, and accordingly, the reversal or modification on appeal of the authorization provided herein to consummate the Sale shall not affect the validity of the Sale to the Purchaser, unless such authorization is duly stayed pending such appeal. The Purchaser is a purchaser in good faith of the Acquired Assets, and is entitled to all of the protections afforded by section 363(m) of the Bankruptcy Code.

26. The terms and provisions of the Purchase Agreement and this Sale Order shall be binding in all respects upon, and shall inure to the benefit of, the Debtors, their estates, and their creditors, the Purchaser, and its respective affiliates, successors and assigns, and any affected third parties including, but not limited to, all persons asserting Interests in the Acquired Assets to be sold to the Purchaser pursuant to the Purchase Agreement, notwithstanding any subsequent appointment of any trustee(s) under any

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chapter of the Bankruptcy Code, as to which trustee(s) such terms and provisions likewise shall be binding.

27. The failure specifically to include any particular provisions of the Purchase Agreement in this Sale Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Purchase Agreement be authorized and approved in its entirety.

28. The Purchase Agreement and any related agreements, documents or other instruments may be modified, amended or supplemented by the parties thereto, in a writing signed by both parties, and in accordance with the terms thereof, without further order of the Court, provided that any such modification, amendment or supplement does not have a material adverse effect on the Debtors’ estates.

29. The transfer of the Acquired Assets pursuant to the Sale may ultimately be exempt from taxation as provided in section 1146(c) of the Bankruptcy Code, provided that a plan is ultimately confirmed in these cases and subject to the ultimate resolution of that certain Stipulation and Agreed Order Between Eagle Food Centers, Inc. and States of Illinois and Iowa (the “1146(c) Stipulation”), entered by the Bankruptcy Court on August 21, 2003 [Docket no. 478].

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30. As provided by Rules 6004(g) and 6006(d) of the Federal Rules of Bankruptcy Procedure, this Sale Order shall not be stayed for 10 days after the entry of the Sale Order and shall be effective immediately upon entry.

Exhibit 1 PURCHASE AGREEMENT
[EDITORS’ NOTE: THE LOGO IS ELECTRONICALLY NON-TRANSFERRABLE.]

September 2, 2003

Skadden, Arps, Slate, Meagher Flom (Illinois)
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
Attn: Steve Forbes, Esq.

Re: Eagle Food Centers, Inc. (“Eagle”)

Dear Mr. Forbes:

This letter is in substitution for the transmittal letter to the
Acquisition Agreement submitted by Albertson’s, Inc on August 19, 2003
(such Acquisition Agreement, as modified by that certain letter agreement
dated August 29, 2003, a copy of which is enclosed herewith, is
hereinafter collectively referred to as the “Agreement”). Albertson’s,
Inc. hereby formally requests that the termination fee and bid protection
provisions contained in the order of the United States Bankruptcy Court
for the Northern District of Illinois (“Court”) dated June 27, 2003 in
connection with the petitions voluntarily filed by Eagle for relief under
Chapter 11 of Title 11 of the United States Code apply to the Agreement.
In response to your request for an informal statement of the Purchaser’s
intentions, please be advised that it is the present non-binding
intention of the Purchaser, following acquisition of the five stores that
are subject to the Agreement, to operate a retail grocery business for at
least some undetermined period of time at four of those store locations,
and not to operate a store (but to otherwise comply with all provisions
of the relevant lease pertaining to use) at the other location.

The Agreement executed by Albertson’s, Inc. shall constitute an offer
irrevocable until and including October 1, 2003 provided that: (a) stores
#38 in Morris, Illinois, #73 in Dixon, Illinois, #227 in Peru, Illinois
and #301 in Genesco, Illinois remain in continuous operation in the
ordinary course of business from the date hereof through and including
October 1, 2003: (b) in the event that the offer of Albertson’s, Inc. is
not approved by the Court as the successful bidder, the offer by
Albertson’s, Inc. is approved by the Court as the back-up bid; (c) Eagle
executes the Agreement; and (d) notwithstanding anything to the contrary
contained in the Agreement, in the event that the offer of Albertson’s,
Inc. is not approved by the Court as the successful bidder, Albertson’s,
Inc. is obligated to close no earlier than October 31, 2003.

Very truly yours,

ALBERTSON’S, INC.

Eric J. Cremers
Senior Vice President, Strategic Planning and
Business Development

Enclosure

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August 29, 2003

Robert J. Kelly
President Chief Executive Officer
Eagle Food Centers, Inc.
801 First Street East
Milan, IL 61264

RE: In re Eagle Food Centers, Inc. et al., Case No. 03-15299

Dear Mr. Kelly:

In connection with the auction held on August 29, 2003, Albertson’s,
Inc., on behalf of itself and its subsidiaries and affiliates and their
respective predecessors and successors (collectively, “Albertson’s
Parties”), agrees that:

• The Albertson’s Parties release Eagle Food
Centers, Inc., its affiliates and successors
(“Eagle”), and waive any and all claims (whether
assertable directly or indirectly or by virtue
of any claim for contribution, indemnification,
reimbursement or contribution) in any way
related to Eagle’s rejection of those certain
leases (including, without limitation, all
amendments, modifications, assignments or any
other documents related thereto) of real
property for the warehouse and distribution
center located in Milan, Illinois and those
stores listed on Exhibit A attached
hereto or otherwise related to the premises
leased to Eagle thereunder. The Albertson’s
Parties and Eagle shall execute a release
consistent therewith.

• The Albertson’s Parties agree to interview
any current employee of the New Lenox store who
requests an interview for possible employment
with the Albertson’s Parties without any
commitment to hire any employees of the New
Lenox store. Whereas, the Albertson’s Parties
will require the services of employees to
operate the stores at Morris, Dixon, Peru and
Geneseo, and possibly elsewhere, the Albertson’s
Parties will extend offers of employment to
those current Eagle employees of the Morris
Dixon, Peru and Genesco stores who they
determine, in their sole and absolute
discretion, to be

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qualified for employment by the Albertson’s
Parties. The Albertson’s Parties expect that
they will extend offers of employment to no less
than 70% of Eagle’s current employees at the
Morris, Dixon, Peru and Geneseo stores.

Sincerely,

By: _____

Its: Vice President, Real Estate

Exhibit A

Store 037 Store 228
1700 Sycamore Road 928 1st Avenue
DeKalb, IL 60115 Rock Falls, IL 61071

Store 086 Store 234
1525 Douglas 1015 13th Avenue
Montgomery, IL 60538 Clinton, IA 52732

Store 093 Store 264
2826 W. Locust 902 W. Kimberly Road
Davenport, IA 52804 Davenport, IA 52806

Store 107 Store 267
Springfield, IL 62701 Aurora, IL 60506

Store 110 Store 269
955 W. 75th Street 1290 E. Chicago Avenue
Naperville, IL 60540 Naperville, IL 60540

Store 130 Store 305
1800 Elm Street 1628 Georgetown Road
Dubuque, IA 52001 Tilton, IL 61832

Store 157 Store
307 Iowa City, IA 2100 E. Kimberly Road

Store 289 Davenport, IA 52807
Rt. #14 Keith Avenue Store 309
Crystal Lake, IL 60014 Freeport, IL 61032

Store 313 Store 126
Springfield, IL 62701 Warehouse/Office
Milan, IL 61264
Store 320
2050 JFK Road
Dubuque, IA 52001

Store 322
1449 W. Sullivan
Aurora, IL 60506

ACQUISITION AGREEMENT
by and between
EAGLE FOOD CENTERS, INC.
as Seller,
and
[___]
ALBERTSON’S, INC.,
as Purchaser

TABLE OF CONTENTS
Page

ARTICLE I
PURCHASE AND SALE OF ASSETS

Section 1.1 Acquired Assets ……………………………….. 1
Section 1.2 Excluded Assets ……………………………….. 3
Section 1.3 Assumed Liabilities ……………………………. 5
Section 1.4 Excluded Liabilities …………………………… 6
Section 1.5 Purchase Price ………………………………… 6
Section 1.6 Inventory Amount ………………………………. 8
Section 1.7 Allocation of Purchase Price for Tax Purposes …….. 9
Section 1.8 Intellectual Property ………………………….. 9

ARTICLE II
THE CLOSING

Section 2.1 Closing ……………………………………… 10
Section 2.2 Deliveries at Closing …………………………. 10
Section 2.3 Prorations …………………………………… 11

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER

Section 3.1 Organization …………………………………. 14
Section 3.2 Authority Relative to this Agreement ……………. 14
Section 3.3 Consents and Approvals ………………………… 14
Section 3.4 Financial Information …………………………. 15
Section 3.5 No Violations ………………………………… 15
Section 3.6 No Default; Compliance with Applicable Laws;
Permits ……………………………………… 15
Section 3.7 Books and Records …………………………….. 16
Section 3.8 Title to Property …………………………….. 16
Section 3.9 Inventory ……………………………………. 16
Section 3.10 Conduct of Business …………………………… 17

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Section 3.11 Property Leases ………………………………. 17
Section 3.12 Real Property ………………………………… 17
Section 3.13 Environmental Matters …………………………. 17
Section 3.14 Employee Relations ……………………………. 18
Section 3.15 Brokers …………………………………. 18
Taxes …………………………………. 18
Section 3.16 Brokers ……………………………………… 18

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

Section 4.1 Organization …………………………………. 19
Section 4.2 1 Authority Relative to this Agreement ………….. 19
Section 4.3 2 Consents and Approvals ………………………. 19
Section 4.4 3 No Violations ………………………………. 19
Section 4.5 4 Brokers ……………………………………. 20
Section 4.6 5 Financing ………………………………….. 20

ARTICLE V
COVENANTS

Section 5.1 Conduct of Business by the Seller Pending the
Closing ……………………………………… 20
Section 5.2 Access and Information ………………………… 21
Section 5.3 Approvals and Consents; Cooperation; Notification … 21
Section 5.4 Additional Matters ……………………………. 23
Section 5.5 Employment of Store Employees ………………….. 23
Section 5.6 No Implied Representations of Warranties; Due
Diligence ……………………………………. 26
Section 5.7 Books and Records; Cooperation …………………. 27
Section 5.8 Payments Received …………………………….. 29
Section 5.9 Intellectual Property Removal ………………….. 29
Section 5.10 Licenses and Permits ………………………….. 29
Section 5.11 Termination Fee and Bid Protection …..
Error! Bookmark not defined.

ARTICLE VI

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CONDITIONS PRECEDENT

Section 6.1 Conditions Precedent to Obligations of the
Seller and the Purchaser ………………………. 31
Section 6.2 Conditions Precedent to Obligation of the Seller …. 31
Section 6.3 Conditions Precedent to Obligation of the Purchaser . 32

ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER

Section 7.1 Termination by Mutual Consent ………………….. 33
Section 7.2 Termination by either the Purchaser or the
Seller ………………………………………. 33
Section 7.3 Termination by the Purchaser …………………… 33
Section 7.4 Termination by the Seller ……………………… 33
Section 7.5 Condemnation …………………………………. 34
Section 7.6 Casualty …………………………………….. 34
Section 7.5 7 Effect of Termination and Abandonment …………. 36

ARTICLE VIII
GENERAL PROVISIONS

Section 8.1 Survival of Representations, Warranties, and
Agreements …………………………………… 36
Section 8.2 Transfer Taxes ……………………………….. 36
Section 8.3 Brokers ……………………………………… 37
Section 8.4 Notices ……………………………………… 37
Section 8.5 Descriptive Headings ………………………….. 38
Section 8.6 Entire Agreement; Assignment …………………… 39
Section 8.7 Governing Law ………………………………… 39
Section 8.8 Expenses …………………………………….. 39
Section 8.9 Amendment ……………………………………. 39
Section 8.10 Waiver ………………………………………. 39
Section 8.11 Counterparts; Effectiveness ……………………. 39
Section 8.12 Severability; Validity; Parties in Interest ……… 40

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Section 8.13 Bulk Sales …………………………………… 40

ARTICLE IX
DEFINITIONS

TABLE OF SCHEDULES

Schedule A Store Locations

Schedule 1.1(b) Other Contracts

Schedule 1.1(c) Tangible Personal Property

Schedule 1.1(e)(i) Owned Real Property

Schedule 1.1(e)(ii) Property Leases

Schedule 1.1(g) Other Acquired Assets

Schedule 1.2(c) Excluded Equipment

Schedule 1.2(j) Other Excluded Assets

Schedule 1.2(m) Excluded Prepaid Items and Deposits

Schedule 1.3 Assumed Liabilities

Schedule 5.1 Exceptions to Conduct of Business

[Schedule 5.5(a) Transferred Employees]

[Schedule 5.5(b) Multiemployer Plans]

TABLE OF EXHIBITS

Exhibit 1.6(a) Preliminary Inventory Amount

Exhibit 1.6(b) Inventory Procedure Instructions

Exhibit 1.7 Allocation of Purchase Price

Exhibit 2.2(a)(i) Form of Bill of Sale

Exhibit 2.2(a)(iv) Form of Assignment and Assumption Agreement

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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of [___], 2003 (the “Agreement”), is made by and between EAGLE FOOD CENTERS, INC., a Delaware corporation (the “Seller”), and [___].ALBERTSON’S, INC., a [___] [Delaware
corporation] (the “Purchaser”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth inArticle IX.

WHEREAS, the Seller is engaged in the retail grocery business and operates grocery stores;

WHEREAS, on April 7, 2003, the Seller, along with certain of its Affiliates, filed voluntary petitions (the “Petitions”) for relief commencing a case (the “Chapter 11 Case”) under Chapter 11 of Title 11 of the United States Code (the “BankruptcyCode”) in the United States Bankruptcy Court for the Northern District of Illinois (the “Bankruptcy Court”);

WHEREAS, the Seller, along with certain of its Affiliates, has continued in the management and possession of its assets and business as debtor-in-possession in the Chapter 11 Case pursuant to Sections 1107 and 1108 of the Bankruptcy Code and subject to the terms and conditions of this Agreement; and

WHEREAS, the Purchaser desires to purchase and acquire and the Seller desires to sell, convey, assign and transfer, or cause to be sold, conveyed, assigned and transferred, to the Purchaser, the Acquired Assets relating to the store locations identified on Schedule A hereto (the “Store Locations”), and the Purchaser is willing to assume, and the Seller desires to assign and delegate to the Purchaser, the Assumed Liabilities, all in the manner and subject to the terms and conditions set forth herein and in accordance with Sections 105, 363 and 365 of the Bankruptcy Code.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I PURCHASE AND SALE OF ASSETS
Section 1.1 Acquired Assets. On the terms and subject to the conditions set forth in this Agreement and subject to approval of the Bankruptcy Court pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, at the Closing the Seller shall sell, assign, transfer, convey, and deliver, or cause to be sold, assigned, transferred, conveyed and delivered, to the Purchaser free and clear of all liens, claims, encumbrances and security interests other than Permitted Exceptions, and the

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Purchaser shall purchase and accept from the Seller all right, title, and interest of the Seller in and to the following (collectively, the “Acquired Assets”):

(a) all merchandise inventory, including the grocery, general merchandise, liquor, dairy, frozen foods, cigarettes, health and beauty care, meat, produce, seafood, deli, bakery, floral and pharmacy inventory at each Store Location, exclusive of (i) private label merchandise, (ii) out of season seasonal and promotional merchandise, (iii) merchandise more than one (1) year old, (iv) continuity items, (v) damaged or unsaleable merchandise, (vi) merchandise which is date coded to expire in less than fifteen (15) days from the date of inventory, (vii) dairy products which are date coded to expire in less than five (5) days from date of inventory, (viii) pharmaceutical products which are date coded to expire in less than sixty (60) days from date of inventory, (ix) all unmatched SKUs (i.e. SKUs not typically carried by Purchaser in its stores in the greater Chicago metro area), (x) perishable items other than dairy, (xi) frozen food, and (xii) any part of the merchandise inventory relating to controlled substances, firearms, ammunition, alcoholic beverages, pharmacy inventory and any other items which in each case cannot by law be transferred to, or resold by, Purchaser (the “Inventory”): all of which excluded items shall be removed by Seller from the Store Locations prior to the Closing;
(b) all rights and incidents of interest of the Seller to the agreements, contracts and arrangements that are listed or described on Schedule 1.1(b) (“Contracts”);
(c) all machinery, equipment, computers, furniture, furnishings, fixtures, office supplies, tools, order entry devices, freezers, refrigerators, pharmacy equipment and all other tangible personal property owned by the Seller that are used exclusively primarily in the operation of the Store Locations and or are located on any Owned Real Property or premises subject to the Property Leases (collectively, the “Tangible Personal Property”), including without limitation, such of the foregoing as are listed or described on Schedule 1.1(c);
(d) to the extent transferable, all rights as of the Closing under all warranties, representations and guarantees made by suppliers, manufacturers and contractors in connection with the Acquired Assets;
(e)(i) the real property that is listed and described on Schedule 1.1(e)(i) (the “Owned Real Property”) and (ii) the real property leases that are listed or described on Schedule 1.1(e)(ii) (the “Property Leases”);
(f) all books and records (other than books and records relating to Taxes), including, without limitation, fixture plans, construction drawings

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and specifications and maintenance records of the Seller exclusively relating primarily to the Tangible Personal Property, the Owned Real Property or the Property Leases; and
all the rights properties or assets that are listed or described on Schedule 1.1(e).
(g) To the extent requested by Buyer, subject to Section 5.10, all permits, including pharmacy, liquor and similar licenses, related to the Store Locations or related to the operation of such Store Locations (collectively, the “Permits”). A description by the Store Location of all Permits related to the operation of such Store Properties that are in effect on the date hereof, and all applications for any such Permits that are in process on the date hereof, is attached hereto as Schedule 1.1(g);
(h) All files, documents, instruments, papers, books, computer files and records and all other records of Seller in any media relating to the patients, doctors, pharmaceuticals, controlled substances, or prescriptions of, administered by or filled by such Store Locations and/or relating to any law, statute, rule, regulation, ordinance, common law, writ, judgment, decree, injunction or similar order, directive or other requirement of any governmental authority concerning any of the foregoing (collectively the “Pharmacy Records”); and
(i) all the rights, properties or assets that are listed or described on Schedule 1.1(i).
EXCEPT FOR SPECIFIC REPRESENTATIONS AND WARRANTIES WARRANTIES CONTAINED IN THIS AGREEMENT, THE ACQUIRED ASSETS ARE BEING SOLD ON AN “AS IS,” “WHERE IS” BASIS AND SELLER DOES NOT MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS OR OTHERWISE WITH RESPECT TO THE ACQUIRED ASSETS WHICH EXTEND BEYOND THE AFORESAID SPECIFIC REPRESENTATIONS AND WARRANTIES.

Section 1.2 Excluded Assets. Notwithstanding anything contained in this Agreement to the contrary, the following rights, properties and assets (collectively, the “Excluded Assets”) will not be included in the Acquired Assets:

(a) all cash, cash equivalents vendor coupons, checks in transit, credit card receipts, marketable securities or accounts receivable arising out of the operation of the Store Locations existing on the date hereof or arising after the date hereof of the which are owned by Seller at the Closing;

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(b) all rights, properties and assets of the other operations (other than the Store Locations) of Seller and any of its Affiliates;
(c) all vendor-owned equipment, including without limitation the items as
listed or described on Schedule 1.2(c);
(d) all Contracts other than those listed on Schedule 1.1(b), and any of the agreements, contracts and arrangements Contracts listed or described on Schedule 1.1(b) that have terminated or expired prior to the Closing in accordance with their terms (not in response to a breach or default thereunder by Seller) and in the ordinary course, and as to which Seller has provided written notice to Purchaser prior to the Closing;
(e) any claims, demands, actions, rights or causes of action arising under Sections 544 through 553, inclusive, of the Bankruptcy Code;
any Tangible Personal Property transferred or disposed of in the ordinary course prior to the Closing;
(g) (f) the company seal, minute books, charter documents, stock or equity record books and such other books and records as pertain to the organization, existence or capitalization of the Seller or any Affiliate of Seller as well as any other records or materials relating to the Seller or any Affiliate of Seller generally and not exclusively primarily involving or exclusively primarily related to the Acquired Assets or the operation of the Store Locations;
(h) (g) any preferred cardholder records, customer lists or check-cashing lists;
(i) (h) all contracts of insurance;
(j) (i) any right, property or asset that is listed or described on Schedule 1.2(ii);
(k) (j) other than the software licenses listed or described on Schedule 1.1(b), all U.S. and other letter patent, patents, patent applications, software, know-how, trade names, trademarks, registered copyrights, service marks, trademark registrations and applications, service mark registrations and applications, copyright registrations and applications, internet domain names and any licenses to use any of the foregoing (the “Intellectual Property”);

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(l) (k) all bank accounts or other banking arrangements relating to the Store Locations (including all rights or incidents of interest with respect to the cash or cash equivalents in such bank accounts);
(m) (l) all prepaid items or deposits relating to the Store Locations;
(n) (m) any right the Seller has with respect to any Tax refunds, credits or attributes, and any claims therefor, other than those pertaining to the Store Locations or the Acquired Assets following the Closing;
(o) (n) all Tax Returns and books and records relating to Taxes; and
(p) (o) any Seller Plan, including without limitation those listed or described on Schedule 1.2(o); and
(p) any Tangible Personal Property transferred or disposed of pursuant to the terms of Section 5.1 of this Agreement and in the ordinary course prior to the Closing.

Section 1.3 Assumed Liabilities. On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Purchaser shall assume from the Seller and its Affiliates and thereafter pay, perform or otherwise discharge in accordance with their terms, and shall held the Seller and its Affiliates, harmless from all of the liabilities and obligations (of any nature or kind, and whether based in common law or statute or arising under written contract or otherwise known or unknown, fixed or contingent, accrued or unaccrued, liquidated or unliquidated, real or potential) of the Seller and its Affiliates (i) with respect to arising out of or relating to the ownership, possession or use of the Acquired Assets and the operation of the Store Locations on and after the Closing Date, including without limitation, all of the obligations and liabilities arising under the agreements, contracts and arrangements included in the Acquired Assets; (ii) in connection with or arising under Environmental Laws or Taxes relating to the Owned Real Property or the real property subject to the Property Leases or ad valorem Taxes levied with respect to the Acquired Assets or Store Locations; (iii) as listed or described on Schedule 1.3
and (iv) [employee related liabilities as set forth inSection 5.5] (collectively, the “Assumed Liabilities”) Subject to the terms and conditions set forth inthis Agreement, and provided that the following shall not include anyExcluded Liabilities, effective as of the Closing, Purchaser shall assumethe following obligations of Seller related to the Acquired Assets (the”Assumed Liabilities”), and no others:
(a) All liabilities and obligations of Seller first arising fromand after the Closing (i) under Property Leases with respect to leasedStore Locations, or

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(ii) under real property documents with respect to Owned RealProperty that are included in the Permitted Exceptions.
(b) All liabilities and obligations of Seller first arising fromand after the Closing under the Contracts.
Notwithstanding the foregoing, Purchaser shall not assumehereunder, and “Assumed Liabilities” shall not include, liabilities under(a) any Seller Plan or other agreement or arrangement with an employee,agent or consultant, or (b) any contract, agreement, lease or otherinstrument or document to the extent such liabilities arise as a resultof a breach or failure occurring prior to, as of, or as a result of, theClosing.

Section 1.4 Excluded Liabilities. The Purchaser shall not assume or agree to pay, perform or otherwise discharge any liabilities, obligations or expenses other than the Assumed Liabilities. Except for the Assumed Liabilities and other liabilities and obligations expressly assumed by Purchaser under this Agreement or the related agreements contemplated by this Agreement. Purchaser shall not assume pursuant to this Agreement or the transactions contemplated hereby, and shall have no liability for, any liabilities or obligations of the Seller or any of Seller’s Affiliates, of any kind, character or description whatsoever (the “Excluded Liabilities”), all of which shall continue to be liabilities and obligations of the Seller or such Affiliate, as appropriate. Further, in no event shall Purchaser assume any liability of any Seller for Taxes (including pursuant to Treasury Regulation Section 1.1502-6 (or any analogous provisions of state, local or foreign Law)), as a transferee or otherwise.

Section 1.5 Purchase Price.[1] In consideration for the Acquired Assets, the Purchaser shall, in addition to the assumption of the Assumed Liabilities, pay to the Seller at the Closing the Cash Purchase Price, subject to any credits against the Cash PurchasePrice to which Purchaser may be entitled by order of the BankruptcyCourt, in cash by wire transfer of immediately available funds to an account or accounts designated by the Seller. The “Cash PurchasePrice” shall be the sum of the Inventory Amount and [•] (provided that in no event shall the Inventory Amountexceed Three Million Five Hundred Thousand Dollars ($[•]), 3,500,000.00) in the

[1] A multiple Store bid (a “Package Bid “) may be conditioned on such bidder being a Successful Bidder (as defined in the Bidding Procedures) on all or a portion of the Stores included in its bid (such Package Bid or the fixed portion thereof, a “FixedPackage Bid”). To the extent a bidder’s offer is not a Fixed Package Bid, such bidder’s offer shall be accompanied by a Store schedule which allocates the Cash Purchase Price on a Store by Store basis.

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aggregate for the five (5) Store Locations (#38 in Morris,Illinois, #73 in Dixon, Illinois, #104 in New Lenox, Illinois, #227 inPeru, Illinois and #301 in Geneseo, Illinois)), and Four Million Dollars($4,000,000.00) in the aggregate for such five (5) Store Locations;provided, however, that the Cash Purchase Price will be subject to anequitable reduction to the extent that any Tangible Personal Property(other than that listed or described on Schedule 1.2(c), and thattransferred or disposed of pursuant to the terms of Section 5.1 of thisAgreement and in the ordinary course prior to the Closing)is eitherleased (rather than owned by Seller) or is not delivered to Purchaser atthe applicable Store Location upon the Closing. Purchaser’s agreement andobligation hereunder to purchase the five (5) identified Store Locationsshall be subject to and conditioned upon Purchaser being the successfulbidder for each and all of such five (5) Store Locations.

Purchaser has previously delivered to Seller a letter of credit inan amount equal to Five Hundred Thousand Dollars ($500,000.00)(collectively, the “Letter of Credit”) payable upon an order from theBankruptcy Court that Purchaser is default pursuant to the terms of thisAgreement. SELLER AND PURCHASER ACKNOWLEDGE AND AGREE THATSELLER WILL SUFFER DAMAGES IF PURCHASER DEFAULTS IN ITS OBLIGATIONHEREUNDER. GIVEN FLUCTUATIONS IN LAND VALUES, THE UNPREDICTABLE STATE OFTHE ECONOMY AND OF GOVERNMENTAL LOANS AND OTHER FACTORS WHICH DIRECTLYAFFECT THE VALUE AND MARKETABILITY OF THE ACQUIRED ASSETS, THE PARTIESREALIZE THAT IT WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL, IF NOTIMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE ACTUAL AMOUNTOF SELLER’S DAMAGES IN THE EVENT OF SUCH DEFAULT BY PURCHASER. THEREFORE,THE PARTIES HEREBY AGREE THAT THE AMOUNT DRAWN BY SELLER UNDER THE LETTEROF CREDIT REPRESENTS A REASONABLE ESTIMATE OF SUCH DAMAGES, CONSIDERINGALL THE CIRCUMSTANCES EXISTING ON THE DATE OF EXECUTION OF THISAGREEMENT, AND THAT SELLER SHALL HAVE THE RIGHT TO RETAIN THE FULL AMOUNTDRAWN BY SELLER UNDER THE LETTER OF CREDIT AS LIQUIDATED DAMAGES, ASSELLER’S SOLE AND EXCLUSIVE REMEDY FOR PURCHASER’S DEFAULT. SELLER AGREESTHAT THE AMOUNT DRAWN BY SELLER UNDER THE LETTER OF CREDIT AS LIQUIDATEDDAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER REMEDY,INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE OR DAMAGES TO WHICHSELLER MIGHT OTHERWISE BE ENTITLED, WHETHER UNDER THIS CONTRACT OR AT LAWOR IN EQUITY.

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Section 1.6 Inventory Amount. (a) Exhibit 1.6(a)
sets forth the “Preliminary Inventory Amount.” The Preliminary Inventory Amount was determined in accordance with Exhibit1.6(a) on a store-by-store basis for each of the Store Locationsas to the Inventory (as defined, and subject to the exclusionscontained, in Section 1.1(a) of this Agreement).

(b) Two days prior to Closing, one or more third party inventory counting firms mutually agreed upon by the Seller and the Purchaser shall perform a physical inventory of all Inventory at the Store Locations on a store-by-store basis. From and after the physical inventory completed at each Store Location, such Store Location shall be closed to regular business until after the Closing shall have occurred. Seller and Purchaser shall share the cost of the inventory counting firm(s) performing such physical inventory equally and agree to execute a joint retention agreement(s) with the inventory counting firm(s) on usual and customary terms. The procedures and policies to be followed in taking such physical inventory are set forth in Exhibit 1.6(b). The day prior to the Closing, Seller shall prepare and deliver to Purchaser a statement (the “Inventory Statement”) that shall set forth the value of the Inventory as of the date of the Inventory Statement (the “Inventory Amount”). The Inventory Amount shall be determined based on the physical inventory conducted in accordance with this Section 1.6 and Exhibit 1.6(b) and the methodology, policies, principles and processes set forth in Exhibit 1.6(a) and used to prepare the Preliminary Inventory Amount.
(c) During the preparation of the Inventory Statement and the taking of the physical inventory by the third party inventory counting firm(s), to the extent reasonably necessary for the preparation of the Inventory Statement and the performance of the physical inventory, the Seller shall, in accordance with the procedures and policies set forth in Exhibit 1.6(b), (i) provide the Purchaser and the Purchaser’s authorized representatives with reasonable access to books, records, facilities and employees of the Seller and (ii) cooperate fully with the Purchaser and Purchaser’s authorized representatives, including the provision on a timely basis of all information that is reasonably available.
(d) If the Inventory Statement is prepared on the basis of the physical inventory conducted in accordance with this Section 1.6 and Exhibit 1.6(b) and the Inventory Amount is calculated using the methodology, policies, principles and processes set forth in Exhibit 1.6(a) and used to prepare the Preliminary Inventory Amount, the Inventory Amount reflected on the Inventory Statement delivered by the Seller shall be the Inventory Amount hereunder absent manifest error. The Inventory Amount shall be final and binding on the parties and no post-Closing adjustment shall be made or asserted by either party.

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Allocation of Purchase Price for Tax Purposes. The Seller and the Purchaser agree that, for all Tax and other reporting purposes, the allocation of the Purchase Price to the Acquired Assets shall be as set forth on Exhibit 1.7 , whichExhibit 1.7 shall be completed within fifty five (55) days of the date of this Agreement and which, when completed, will have been arrived at by arm’s length negotiation in compliance with Section 1060 of the Internal Revenue Code of 1986, as amended. If the Inventory Amount differs from the Preliminary Inventory Amount, the Seller and the Purchaser agree to make appropriate adjustments to the allocation set forth in Exhibit 1.7. If the Seller and the Purchaser are unable to resolve any material differences with regard to the allocation of the Purchase Price, then any disputed matters will be finally and conclusively determined by an independent certified accounting firm or independent appraisal firm (the”Allocation Arbiter “), which Allocation Arbiter shall be mutually agreed upon by the Purchaser and the Seller, provided, however, that such agreement shall not be unreasonably withheld or delayed. Promptly, but not later than fifteen (15) days after its acceptance of appointment hereunder the Allocation Arbiter will determine (based solely upon representations of the Purchaser and the Seller and not by independent review) only those matters in dispute, and will render a written report as to the disputed matters and the resulting allocation of the Purchase Price, which report shall be conclusive and binding upon the parties. Such Allocation Arbiter’s fees and expenses shall be born equally by the parties. Within fifteen (15) days after the allocations have been determined, the Purchaser will provide the Seller with copies of Form 8594 and any required exhibits thereto, consistent with the allocations of this Section 1.7 andExhibit 1.7. Each of the Purchaser and the Seller shall (i) timely file all forms (including Internal Revenue Service Form 8594) and Tax Returns required to be filed in connection with such allocation. (ii) be bound by such allocation for purposes of determining Taxes, (iii) prepare and file, or cause to be prepared and filed, its Tax Returns on a basis consistent with such allocation and (iv) take no position, or cause no position to be taken, inconsistent with such allocation on any applicable Tax Return, in any audit or proceeding before any Taxing Authority, in any report made for Tax, financial accounting or any other purposes or otherwise. If the allocation set forth on Exhibit1.7 is disputed by any Taxing Authority, the party receiving notice of such dispute shall promptly notify the other party hereto concerning the existence and resolution of such dispute.

Section 1.8 Section 1.7 Intellectual Property. It is expressly agreed that the Purchaser is not purchasing acquiring or otherwise obtaining any right title or interest in and to the Intellectual Property, including without limitation the names “Eagle Food Centers”, “Foodco”, “BOGO Food and Deals” or “Eagle Country Markets” or any trade names, trademarks, identifying logos or service marks related thereto or employing the words “Eagle Food Centers”, “Foodco”, “BOGO Food and Deals” or “Eagle Country Markets” or any part or variation of any of the foregoing or any confusingly similar trade names, trademark or logo.

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ARTICLE II THE CLOSING
Section 2.1 Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Skadden. Arps, Slate, Meagher Flom (Illinois), 333 West Wacker Drive, through an escrow established with Chicago, Illinois 60606 at 10:00 a.m.Title Insurance Company, or another escrow agent reasonablyacceptable to Seller and Purchaser, on the later of (i) a datenot later than the third business day after the date specified by Seller for the Closing (which date shall be specified by Seller within two business days after the conditions set forth in ArticleVI shall have been satisfied or waived and which date shall in no event be later than October 28, 2003 nor earlier than September 30, 2003), and (ii) at such other time, date, and place as shall be fixed by agreement between the parties (the date of the Closing being herein referred to as the “Closing Date”). For financial, accounting and tax purposes, the Closing shall be deemed conclusively to have occurred at 11:59 p.m. Central Time on the Closing Date.

Section 2.2 Deliveries at Closing. (a) At the Closing, the Seller shall deliver to the Purchaser:

(i) a duly executed bill of sale, substantially in the form ofExhibit 2.2(a)(i) attached hereto, transferring the Acquired Assets to the Purchaser;

(ii) all other conveyance documents reasonably necessary to transfer to the Purchaser the Acquired Assets, including special or limited warranty deeds (or their local equivalent) regarding the Owned Real Property purchased by the Purchaser;

(iii) a certificate confirming that the Seller is not a “foreign person” within the meaning of Section 1445 of the Code;

(iv) the assignment and assumption agreement to be entered into between the Seller and the Purchaser (the “Assignment and AssumptionAgreement”) substantially in the form of Exhibit2.2(a)(iv) attached hereto, duly executed by the Seller evidencing the assignment and assumption by the Purchaser of the Assumed Liabilities; Property Leases;

(v) estoppel certificates, substantially in the form of Exhibit2.2(a)(v) attached hereto, from each of the landlords under the PropertyLeases or, pursuant to the terms of Section 5.11 below, Seller.
(v) (vi) the Acquired Assets by making the Acquired Assets available to the Purchaser at their present locations; and

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(vi) (vii) all other previously undelivered certificates and other documents required to be delivered hereunder by the Seller to the Purchaser at or prior to the Closing Date.

(b) At the Closing, the Purchaser shall deliver to the Seller:

(i) the Cash Purchase Price by wire transfer in immediately available funds to an account or accounts designated by the Seller;

(ii) the Assignment and Assumption Agreement duly executed by the Purchaser; and

(iii) all other previously undelivered certificates and other documents required to be delivered by the Purchaser to the Seller at or prior to the Closing Date in connection with the transactions contemplated by this Agreement.

Section 2.3 Prorations. At the same time and manner as thepayments are made as provided in Section 2.1 hereof, Seller and Purchasershall, to the extent the figures are available as of the Closing,calculate all prorations of all matters to be prorated hereunder and thenet difference shall be paid to Seller or Purchaser, as applicable, atthe Closing. With respect to prorations which are not able to be made asof such date, the calculations thereof shall be determined based upon themost recent ascertainable bills (provided that if the amount for anyparticular item varies seasonally or otherwise, the calculations thereofshall be determined based upon the bills for the most recentlycorresponding period), multiplied by 105%, and payment therefor shall bemade at Closing based upon such calculation, with all such prorationsbeing final. Subject to the foregoing, prorations shall be handled asfollows:

(i) Personal property taxes associated with the Acquired Assetsincluding, without limitation, other similar taxes (the “PersonalProperty Taxes”) that are imposed on a periodic basis and are payable fora tax period that includes (but does not end on) the Closing Date shallbe prorated as of the Closing Date, and Seller shall bear the proportionof, and shall have the sole responsibility for, such taxes equal to afraction, the numerator of which is equal to the number of days whichshall have elapsed from the beginning of the applicable tax period to theClosing Date and the denominator of which is the number of days in theentire applicable tax period, and Purchaser shall be responsible for theremainder.

(ii) Real property taxes and assessments including, withoutlimitation, commercial rent taxes, ad valorem, sewer rents, businessimprovement district, license, intangibles and other similar Taxes(including any similar personal property taxes) (the “Real PropertyTaxes”) required to be paid by Seller pursuant to the Property Leases orin connection with the Owned Real Property or otherwise shall be proratedas of the Closing Date between Purchaser and Seller as follows: Sellershall

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bear the proportion of and shall have the sole responsibilityfor, such taxes equal to a fraction, the numerator of which is equal tothe number of days which shall have elapsed from the beginning of theapplicable tax period to the Closing Date and the denominator of which isthe number of days in the entire applicable tax period, and Purchasershall be responsible for the remainder. Taxes relating to utilities shallbe apportioned in accordance with the apportionment of the relevantutility charge or fee contained in subsection (iv), below.

(iii) (a) The amount of Purchaser’s and Seller’s respectiveliability for Personal Property Taxes and Real Property Taxes pursuant tosubsections (i) and (ii) above shall be considered a Purchase Priceadjustment at the Closing. If the tax statement or appropriateinformation for the applicable tax year is not in the possession ofPurchaser and Seller on the Closing Date, the proration payment(s) shallbe estimated and paid at Closing based upon such estimate.
(b) Unless otherwise provided to the contrary herein, Purchasershall be solely responsible for Taxes relating to the Acquired Assets andStore Locations applicable to or arising from the period from and afterthe Closing Date, and Seller shall be solely responsible for Taxesrelating to the Acquired Assets and Store Locations applicable to orarising prior to the Closing Date. Subject to subsections (i) and (ii)above, Seller shall indemnify and hold Purchaser harmless from anyliability for Taxes relating to the Acquired Assets and the StoreLocations accruing prior to the Closing Date, and, subject to subsections(i) and (ii) above, Purchaser shall indemnify and hold Seller harmlessfrom any liability for Taxes relating to the Acquired Assets and theStore Locations accruing from and after the Closing Date. It isacknowledged that, except as otherwise provided to the contrary in thisAgreement, each party shall pay its own capital (including capitalgains), net worth, user, franchise and income and gains taxes and thesame shall not be the subject of apportionment hereunder. Nothing in theforegoing shall be deemed to imply that the prorations made pursuant tothis Section 2.3 are not final, it being the intention of the partiesthat absent fraud Seller’s responsibility for pre-closing Taxes shall besatisfied by such prorations notwithstanding that the amount of theactual bills for Taxes differ from the amounts on which the prorationswere based.
(c) Refunds or credits of any Tax described in this Section shallbe apportioned between Seller and Purchaser in accordance withapportionment of the Tax pursuant to this Agreement.

(iv) Seller shall obtain final meter readings for utilities at theStore Locations as of the Closing Date and shall pay for all utilities tosuch date. In the event it shall not be practicable to obtain the meterreading for any utility as of that date or there are utilities which arenot metered, then the utility charge(s) shall be prorated and paid atClosing based upon the most recent ascertainable bills (provided that ifthe amount for any particular item varies seasonally or otherwise,the

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calculations thereof shall be determined based upon the billsfor the most recently corresponding period), as increased to reflect anyanticipated increases for the period in which the Closing occurs over theamounts reflected in such bills, and all such prorations beingfinal.

(v) (a) Any and all other Property Lease payments or receipts,rentals, costs, charges, fees or expenses connected with or used in theoperation of any Store Location, including all common area costs andcosts under the Contracts, the Permits or revenues from Acquired Assetssuch as copy machines, vending machines, pay phones and the like, shallbe prorated between Seller and Purchaser on the Closing Date and Sellershall bear its proportion thereof through the day prior to the ClosingDate; provided, however, percentage rents payable under any of theProperty Leases shall be prorated as follows: (1) it shall be assumedthat daily gross sales throughout the applicable period over whichpercentage rent is determined pursuant to each such Property Lease and inwhich the Closing Date occurs are equal to Seller’s actual average dailygross sales during such period prior to the Closing Date, and (2) throughprorations at the Closing, Seller shall bear the proportion of, and shallhave the sole responsibility for the percentage rent that would bepayable under each such Property Lease for the entire applicable periodbased on such daily gross sales, multiplied by a fraction, the numeratorof which is equal to the number of days which shall have elapsed from thebeginning of the applicable period to the Closing Date and thedenominator of which is the number of days in the entire applicableperiod, and Purchaser shall be responsible for the remainder of anypercentage rent actually payable for such applicable period.
(b) If any of the items described above are incorrectlyapportioned at Closing as a result of an error or omission by eitherparty, such items shall be reapportioned as soon as practicable after thedate such error is discovered. In no event shall the mere fact thatactual billed amounts for any proratable items differ from the estimatedamounts used in such prorations be deemed to be an “error or omission”hereunder.
(c) For purposes of calculating prorations. Seller shall be deemedto have title to the Store Locations through the Closing. All suchprorations shall be made on the basis of the actual number of days of theyear and month which shall have elapsed as of the Closing.
(d) The provisions of this Section shall survive the Closing.

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as disclosed in the written statement delivered by the Seller to the Purchaser at or and approved by Purchaser inwriting prior to the execution of this

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Agreement (the “Seller Disclosure Schedule”) or in the Seller SEC Documents, the Seller represents and warrants to the Purchaser as follows:

Section 3.1 Organization. The Seller is validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so existing and in good standing or to have such power and authority would not have a Material Adverse Effect. The Seller is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified, licensed and in good standing would not have a Material Adverse Effect. The Seller has heretofore made available to the Purchaser a complete and correct copy of the certificate of incorporation and bylaws of the Seller, as currently in effect.

Section 3.2 Authority Relative to this Agreement.

(a) Subject to the entry of the Section 363/365 Order, the Seller has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery, and performance of this Agreement by the Seller and the consummation by the Seller of the transactions contemplated by this Agreement have been duly authorized by all requisite corporate action. This Agreement has been duly and validly executed and delivered by the Seller, and upon the entry of the Section 363/365 Order (assuming this Agreement constitutes a valid and binding obligation of the Purchaser), will constitute a valid and binding agreement of the Seller, enforceable against the Seller in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally from time to time in effect and to general equitable principles.
(b) Notwithstanding anything to the contrary contained herein, no provision of this Agreement is binding upon the Seller unless and until this Agreement is approved by the Bankruptcy Court and the Section 363/365 Order is entered by the Bankruptcy Court.

Section 3.3 Consents and Approvals. Upon the entry of the Section 363/365 Order, no consent, approval, or authorization of, or declaration, filing, or registration with, any Governmental Entity will be required to be made or obtained by the Seller in connection with the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated by this Agreement, except (a) for filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and pursuant to equivalent legislation in any other applicable jurisdiction, (b) those already obtained and (c) for

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consents, approvals, authorizations, declarations, filings, or registrations, which, if not obtained, would not have a Material Adverse Effect.

Section 3.4 Financial Information. Seller has delivered or made available to Purchaser copies of statements of profit and loss with respect to each Store Location (such financial information being collectively referred to herein as the “Summary FinancialInformation”). The Summary Financial Information has not necessarily been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and has not been audited by independent accountants, but in the opinion of Seller, includes the adjustments necessary to make the financial information contained therein not misleading. Certain financial information, footnote disclosure and material adjustments required in financial statements prepared in accordance with GAAP have been omitted from, or condensed in, the Summary Financial Information.

Section 3.5 No Violations. Assuming that the consents, approvals, authorizations, declarations, and filings referred to inSection 3.3 have been made or obtained and shall remain in full force and effect and the conditions set forth in Article VI
shall have been satisfied, at the Closing neither the execution, delivery, or performance of this Agreement by the Seller, nor the consummation by the Seller of the transactions contemplated by this Agreement, nor compliance by the Seller with any of the provisions hereof will (a) conflict with or result in any breach of any provisions of the certificate of incorporation or bylaws of the Seller, (b) result in a violation, or breach of, or constitute (with or without due notice or lapse of time) a default (or give rise to any right of termination, cancellation, vesting, payment, exercise, acceleration, suspension or revocation) under any of the terms, conditions or provisions of any contract, agreement or arrangement that is included as an Acquired Asset or any material note, bond, mortgage, deed of trust, security interest, indenture, license, contract, agreement, plan or other instrument or obligation by which any of the Store Locations may be bound or affected or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Seller or the Acquired Assets, except in the case of clauses (b) or (c) for violations, breaches, defaults, terminations, cancellations, accelerations, vestings, payments, exercises, impositions, suspensions or revocations that (i) would not be reasonably likely to have a Material Adverse Effect or (ii) are excused by or unenforceable as a result of the filing of the Petitions or as a result of the entry of the Section 363/365 Order.

Section 3.6 No Default; Compliance with Applicable Laws;Permits.

(a) The Seller is not in default or violation of any term, condition or provision of (i) its certificate of incorporation or bylaws or (ii) with respect to the Store Locations only, any statute, law, rule, regulation, judgment, decree, order, arbitration award, concession, grant, franchise, permit or license or other governmental authorization or approval applicable to the Seller,

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including applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), but excluding from the foregoing clause (ii), defaults or violations which would not be reasonably likely to have a Material Adverse Effect or which become applicable solely as a result of the business or activities in which the Purchaser is or proposes to be engaged or as a result of any acts or omissions by, or the status of any facts pertaining to, the Purchaser.
(b) Except as would not be reasonably likely to have a Material Adverse Effect, the Seller currently holds all permits, licenses, authorizations, certificates, exemptions and approvals from Governmental Entities (collectively, “Permits”) necessary or proper for the current use, occupancy and operation of the Acquired Assets held by the Seller, and all such Permits are in full force and effect. Except as would not be reasonably likely to have a Material Adverse Effect, as As of the date hereof, the Seller has not received any written notice from any Governmental Entity revoking, modifying or refusing to renew any Permit or providing notice of violations under any Permit.

Section 3.7 Books and Records. The books, records and accounts of the Seller maintained with respect to the Store Locations fairly reflect, in reasonable detail, the transactions and the assets and liabilities of the Seller with respect to the Store Locations in all material respects. The Seller has not engaged in any transactions with respect to the Store Locations, maintained any bank account for the Store Locations or used any of the funds of Seller in the conduct of the Store Locations except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the Seller.

Section 3.8 Title to Property. Upon the entry of the Section 363/365 Order, at the Closing the Seller will sell, assign, transfer and deliver, as the case may be, to the Purchaser the Acquired Assets, and the Acquired Assets will be sold, assigned, transferred or delivered, as the case may be, free and clear of all liens, claims, encumbrances and security interests other than Permitted Exceptions.

Section 3.9 Inventory. At the time of the physical inventory provided for in Section 1.6, (i) the Inventory (A) shall be undamaged, of merchantable and standard quality, in compliance with applicable product and labeling specifications, (B) will not be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act of 1938 or applicable state or local law, (C) will consist of items of a kind reasonably salable in the ordinary course of operation of the Store Locations; and (ii) the retail shelf prices of the Inventory will be at their usual and customary

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levels and will not have been increased in anticipation of the physical inventory provided for in Section 1.6.

Section 3.10 Conduct of Business. From May 3, 2003 to the date hereof, the Seller has not taken any action that, if taken after the date hereof, would violate Section 5.1 hereof.

Section 3.11 Property Leases. Upon the entry of the Section 363/365 Order, the Seller will sell, transfer and assign to the Purchaser a valid leasehold interest with respect to each of the Property Leases which is a lease (as opposed to a sublease) and a valid subleasehold interest with respect to each of the Property Leases which is a sublease free and clear of all liens, claims, encumbrances and security interests other than Permitted Exceptions. Schedule 1.1(e)(ii) identifies instruments through which the Seller derives its leasehold interest in the Property Leases (including all amendments thereto). Complete and correct copies of the Property Leases have been delivered to, or made available for inspection by, the Purchaser and none of the Property Leases have been modified in any material respect except to the extent that such modifications are disclosed by the copies delivered to or made available for inspection by the Purchaser.

Section 3.12 Real Property.

(a) To the knowledge of Seller, there are no proceedings, claims, or disputes affecting any of the Owned Real Property or the real property subject to the Property Leases that might curtail or interfere with the use of such property in any manner, nor any
conditions affecting any of the Owned Real Property or the real property subject to the Property Leases that might curtail or interfere with the current use of such property in any material manner. To the knowledge of Seller, neither the whole nor any portion of the Owned Real Property or the real property subject to the Property Leases is subject to any governmental decree or order to be sold or is being condemned, expropriated or otherwise taken by any public authority with or without compensation therefor, nor, to the knowledge of Seller, has any such condemnation, expropriation or taking been proposed.
(b) Seller has not received any written notice of, or other writing referring to, any requirements or recommendation by an insurance company that has issued a policy covering any part of the Owned Real Property or the real property subject to the Property Leases or by any board of fire underwriters or other body exercising similar function, requiring or recommending any material repairs or work to be done on any part of the Owned Real Property or the real property subject to the Property Leases, which repair or work has not been completed.

Section 3.13 Environmental Matters.

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(a) Seller is in compliance with all applicable Environmental Laws (which compliance includes, but is not limited to, the possession by Seller of all permits and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof), except where failure to be in compliance would not have a Material Adverse Effect.
(b) There is no Environmental Claim pending or, to the knowledge of Seller, threatened against Seller (with respect to the Store Locations) which would have a Material Adverse Effect.

Section 3.14 Employee Relations. With respect to the operation of the business conducted at the Store Locations, the Seller is in compliance with all applicable laws, rules and regulations which relate to wages, hours, leaves of absence, discrimination in employment, union organization and collective bargaining and is not liable for any arrears of wages for failure to comply with any of the foregoing, except for such failures to be in compliance that would not be reasonably likely to have a Material Adverse Effect. No labor strike, slowdown, stoppage or lockout is pending, or to the knowledge of the Seller, threatened against or affecting the business conducted at the Store Locations and during the past two years there has not been any such action. To the knowledge of the Seller, no union organizing or election activities involving any non-union employees have occurred in the past two years or are threatened as of the date hereof. The Seller is in compliance with the requirements of the WARN Act and has no liabilities pursuant to the WARN Act, except for such failures to be in compliance and such liabilities that would not be reasonably likely to have a Material Adverse Effect. Seller shallhave the sole and absolute responsibility for compliance with the WARNAct.

Section 3.15 Taxes, (i) All material Taxes required to be paid by Seller with respect to or in connection with any of the Acquired Assets have been or will be paid when required by applicable law or are being contested by appropriate proceeding in good faith and with reasonable diligence; and (ii) no claim has been made by a taxing authority in a jurisdiction where Seller does not file Tax Returns with respect to either the Acquired Assets or Store Locations that it is or may be subject to taxation by that jurisdiction with respect to either the Acquired Assets or Store Locations.

Section 3.15 Section 3.16 Brokers. No Person is entitled to any brokerage, financial advisory, finder’s or similar fee or commission payable by the Seller in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller, except Huron Consulting Group, LLC, whose fees and expenses will be paid by the Seller in accordance with its agreement with such firm.

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows:

Section 4.1 Organization. The Purchaser is a [corporation]duly formed, validly existing and in good standing under the laws of its jurisdiction state of incorporation formation and has the [corporate] possesses full power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted currently conductingit.

Section 4.2 Authority Relative to this Agreement. The Purchaser is duly qualified as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities make such qualification necessary.

Authority Relative to this Agreement. The Purchaser has the [corporate] power and authority to enter into this Agreement and to carry out its obligations hereunder. The execution, delivery, and performance of this Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all requisite corporate actions. This Agreement has been duly and validly executed and delivered by the Purchaser and (assuming this Agreement constitutes a valid and binding obligation of the Seller) constitutes a valid and binding agreement of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally from time to time in effect and to general equitable principles.

Section 4.3 Consents and Approvals. Except for consents, approvals, authorizations, declarations, filings or registrations which may be required under the HSR Act and under equivalent legislation in any other applicable jurisdiction, no consent, approval or authorization of, or declaration, filing or registration with, any Governmental Entity is required to be made or obtained by the Purchaser in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement.

Section 4.4 No Violations. Neither the execution, delivery or performance of this Agreement by the Purchaser, nor the consummation by the Purchaser of the transactions contemplated by this Agreement, nor compliance by the Purchaser with any of the provisions hereof, will (a) conflict with or result in any breach of any provisions of the articles or certificate of incorporation, as the case may be,or bylaws or other organizational documents of the Purchaser, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time) a default (or give rise to any right of termination, cancellation, acceleration, vesting, payment,

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exercise, acceleration, suspension, or revocation) under any of the terms, conditions or provisions of any material note, bond, mortgage, deed of trust, security interest, indenture, license, contract, agreement, plan or other instrument or obligation to which the Purchaser is a party or by which the Purchaser or the Purchaser’s properties or assets may be bound or affected or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Purchaser or the Purchaser’s properties or assets, except in the case of clauses (b) and (c) for violations, breaches, defaults, terminations, cancellations, accelerations, vestings, payments, exercises, suspensions or revocations that would not individually or in the aggregate have a material adverse effect on the Purchaser.

Section 4.5 Brokers. No Person is entitled to any brokerage, financial advisory, finder’s or similar fee or commission payable by the Purchaser in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of a Purchaser, except for [•], whose fees and expenses will be paid by the Purchaser in accordance with its agreement with such firm.

Section 4.6 Financing. As of the date hereof and on the Closing Date the Purchaser will have sufficient funds available to deliver the Cash Purchase Price to the Seller, consummate the transactions contemplated by this Agreement and satisfy the Assumed Liabilities in the ordinary course of business.

ARTICLE V COVENANTS
Section 5.1 Conduct of Business by the Seller Pending theClosing. The Seller covenants and agrees that, except (i) asotherwise contemplated by this Agreement, (ii) as disclosed inSchedule 5.1, (iii) with the prior written consent of the Purchaser, or (iv) as required by, arising out of, relating to or resulting from, the Petitions or otherwise approved by the Bankruptcy Court or (v) to the extent required by the lenders in connection with the Financing, after the date hereof and prior to the Closing Date:

(a) the Seller shall, and shall cause its Affiliates to, use commercially reasonable efforts to conduct the business of the Store Locations only in the ordinary course, including maintaining operating hours, level of advertising (including reduced price promotions), and levels and mix of inventory, section by section, in the ordinary course consistent with past practice, provided that during the ten (10) days immediately preceding the Closing Date Seller shall be permitted to sell down merchandise that is not included in the Inventory to be sold to Purchaser pursuant to the terms of this Agreement; and

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(b) the Seller shall not, and shall cause its Affiliates not to, take the following actions with respect to the Store Locations and the Acquired Assets:

(i) pledge, mortgage, acquire, sell, lease or dispose of a material any portion of any Store Location or the Acquired Assets with respect thereto except in the ordinary course;

(ii) make any increases in, or additions to, the compensation payable to any of the Transferred Employees, including pursuant to a Seller Plan, other than in the ordinary course or pursuant to existing Seller Plans or arrangements;

(iii) fail materially to maintain books, records and accounts of the Seller relating to the Acquired Assets or any Store Location in the ordinary course;

(iv) make a material change of any of the accounting methods used by the Seller with respect to the Store Locations unless required by GAAP or applicable law; and

(v) authorize or enter into an agreement to do any of the foregoing.

Section 5.2 Access and Information. Subject to applicable law and the reasonable requirements of the Seller to protect competitively sensitive information, the Seller shall afford to the Purchaser and to the Purchaser’s financial advisors, legal counsel, accountants, consultants, financing sources and other authorized representatives reasonable access during normal business hours throughout the period prior to the Closing Date to the books, records, properties and personnel of the Seller relating to or involved in the operation of the Store Locations and, during such period, shall furnish reasonably promptly to the Purchaser such information as the Purchaser reasonably may request;provided, that all such access shall occur only following prior notice to a person designated by the Seller and only if accompanied by a designee of the Seller. During the three (3) week period before theanticipated Closing Date, Seller shall permit Purchaser access to theStore Locations in order to install wiring for communication devices andother store systems (including computers, pharmacy and other systems),install equipment, and take other similar action at such Store Locations,all at Purchaser’s cost. Seller’s obligation to provide the foregoingaccess shall be conditioned on the requirement that Purchaser shall notunreasonably interfere with Seller’s business and that, if a StoreLocation shall not be acquired by Purchaser where such telephone lines orequipment has been installed, Purchaser shall at its cost remove suchinstalled lines and equipment

Section 5.3 Approvals and Consents; Cooperation;Notification.

(a) The parties hereto shall use their respective reasonable best efforts, and cooperate with each other, to obtain as promptly as practicable all

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approvals, consents or waivers from Governmental Entities required in order to consummate the transactions contemplated by this Agreement; provided, that the obligations of the parties to obtain any consent, approval or waiver from the Bankruptcy Court shall be governed exclusively by Section 5.3(c).
(b) The Seller and the Purchaser shall take all actions necessary to file as soon as practicable all notifications, filings and other documents required to obtain all approvals, consents or waivers from Governmental Entities (other than the Bankruptcy Court), including, without limitation, under the HSR Act and to respond as promptly as practicable to any inquiries received from the Federal Trade Commission the Antitrust Division of the Department of Justice and any other Governmental Entity for additional information or documentation and to respond as promptly as practicable to all inquiries and requests received from any Governmental Entity in connection therewith. The Purchaser agrees to take promptly any and all steps necessary to avoid or eliminate each and every impediment under any antitrust or competition law that may be asserted by any federal, state or local antitrust or competition authority so as to enable the parties to expeditiously close the transactions contemplated by this Agreement.
(c) As promptly as practicable after the date hereof, the Seller shall file a motion with the Bankruptcy Court seeking approval of this Agreement and entry of the Section 363/365 Order. Seller shall (i) notify, as required by the Bankruptcy Court, all parties entitled to notice of such motion and/or the Section 363/365 Order, as modified by orders in respect of notice which may be issued at any time and from time to time by the Bankruptcy Court and (ii) use its reasonable efforts to obtain Bankruptcy Court approval of same.
(d) Seller shall promptly upon request provide to Purchaser such documents, access, rights and information as Purchaser may reasonably request, including copies of complete records downloaded to media and files acceptable to Purchaser of all Pharmacy Records. In addition, Seller shall allow Purchaser to use its computer system (including central processing unit, monitor, keyboard, printer and surge protectors) containing the Pharmacy Records for ninety (90) days following the Closing Date. During such period, Purchaser shall pay any leasing and ordinary maintenance charges (but not any charges unrelated to Purchaser’s use of the computer) not to exceed $200 per Store Location (with Seller paying any additional charges). At the end of such period, Seller shall remove the computer from the Store Locations, with data deleted. Seller agrees that any information obtained by Purchaser relating to Pharmacy Records is owned solely by Purchaser and may not be sold or transferred to any other person or company by Seller.

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Section 5.4 Additional Matters. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement; provided, that the obligations of the parties to obtain any consent, approval or waiver from the Bankruptcy Court shall be governed exclusively by Section 5.3(c);provided, further, that nothing herein shall prevent the Seller from cooperating with any third party to take actions necessary or advisable to acquire all or a portion of the Acquired Assets or pursuant to any orders entered or approvals or authorizations granted by the Bankruptcy Court and the Bankruptcy Code. The obligations of each of the Purchaser and the Seller pursuant to this Article V shall be subject to any orders entered or approvals or authorizations granted by the Bankruptcy Court and the Bankruptcy Code. Each of the Seller and the Purchaser shall give prompt notice to the other of the occurrence or failure to occur of an event that would, or with the lapse of time would, cause any condition to the consummation of the transactions contemplated by this Agreement to not be capable of satisfaction.

Section 5.5 Employment of Store Employees.[1]

[[SCENARIO 1: Purchaser Maintains Seller’s Terms and Conditions ofEmployment and Assumes the Seller’s Collective BargainingAgreements]

(a) Prior to the Closing Date, the Purchaser shall make offers of employment employment effective as of the Closing Date to each employee of those employees of the Seller set forth on Schedule 5.5(a) (each a “Transferred Employee” and collectively referred to as the “Transferred Employees”). Such offers shall provide for a base salary or base rate of compensation, as applicable, at least equal to that applicable to each Transferred Employee immediately prior to the Closing Date and shall otherwise be on terms and conditions comparable to those terms and conditions applicable to each such Transferred Employee
immediately prior to the Closing Date:
provided, however, that in the case of Transferred Employees represented by a union (the “Represented Employees”), compensation and other terms and conditions of employment shall be based on and consistent with what is provided Purchaser deems appropriate (each a “Transferred Employee” and collectively referred to as the “Transferred Employees”) on such terms and conditions as Purchaser shall determine in its sole discretion. Purchaser further agrees to make offers of employment
[1] Purchaser to select from one of the three scenarios set forth inSection 5.5(a).

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Effective as of the Closing Date to the Transferred Employees who are represented by a union (the “Represented Employees”) on terms and conditions to be determined at Purchaser’s sole discretion, consistent with law. Purchaser may recognize and/or bargain with any union or labor organization claiming to represent the Represented Employees, as provided by the National Labor Relations Act. Purchaser shall have no obligation under the Agreement to assume the collective bargaining agreements identified in Schedule 5.5(a) covering such Represented Represented
Employees (the “Collective Bargaining Agreements”). Effective as of the Closing Date, Purchaser shall assume and continue in full force and effect the Seller’s Collective Bargaining Agreements, and Purchaser shall have sole responsibility for all obligations and liabilities arising under the Collective Bargaining Agreements on and after the Closing.]

[[SCENARIO 2: Purchaser Extends Offers of Employment on its Own Terms and Conditions]

Prior to the Closing Date, the Purchaser shall make offers of employment effective as of the Closing Date to each employee of the Seller set forth on Schedule 5.5(a) (each a”Transferred Employee” and collectively referred to as the “Transferred Employees”) on such terms and conditions as Purchaser shall determine in its sole discretion. Purchaser further agrees to make offers of employment effective as of the Closing Date to the Transferred Employees who are represented by a union (the “Represented Employees”) on terms and conditions to be determined at Purchaser’s sole discretion, consistent with law. Purchaser shall recognize and/or bargain with any union or labor organization claiming to represent the Represented Employees to the extent required by law. Purchaser shall have no obligation under the Agreement to assume the collective bargaining agreements identified in Schedule 5.5(a) covering such Represented Employees (the “Collective Bargaining Agreements”).]

[[SCENARIO 3: Offers of Employment or Assumption Not Required]

Purchaser shall not be required to make offers of employment to any of the employees of Seller at the Store Locations, nor shall Purchaser be required to assume any obligations or liabilities under the collective bargaining agreements of Seller identified inSchedule 5.5(a) applicable to employees at the Store Locations.]

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[With respect to each Plan listed on Schedule 5.5(b) (each a “Multiemployer Plan”, collectively the “Multiemployer Plans”):[2]

(i) Purchaser will be obligated to make contributions to each Multiemployer Plan in accordance with all collective bargaining agreements relating thereto and shall contribute to such Multiemployer Plan with respect to such operations for substantially the same number of contribution base units for which Seller had an obligation to contribute to such Multiemployer Plan.

(ii) Unless and until a variance or exemption is obtained in accordance with section 4204(c) of the Employee Retirement Income Security Act of 1971, as amended (“ERISA”), Purchaser will provide to each Multiemployer Plan, for a period of five plan years commencing with the first plan year beginning after the Closing a bond issued by a corporate surety company that is an acceptable surety for purposes of section 412 of ERISA, or an amount held in escrow by a bank or similar financial institution satisfactory to such Multiemployer Plan, or such other security as may be permitted under section 4204(a)(1)(B) of ERISA or regulations thereunder in an amount equal to the greater of:

(A) the average annual contribution required to be made by Seller to such Multiemployer Plan with respect to the operations thereunder for the three plan years preceding the plan year in which the Closing occurs, or
(B) the annual contribution that Seller was required to make with respect to the operations under such Multiemployer Plan for the last plan year before the plan year in which the Closing occurs, which bond or escrow shall be paid to such Multiemployer Plan if Purchaser withdraws from such Multiemployer Plan, or fails to make a contribution to such Multiemployer Plan when due at any time during the first five plan years beginning after the Closing.

(iii) If Purchaser withdraws from a Multiemployer Plan in a complete withdrawal or a partial withdrawal with respect to the Represented Employees at any time during the first five years beginning after the Closing, Seller agrees to be secondarily liable for any withdrawal liability Seller would have had at the Closing Date to such Multiemployer Plan, but for the application of section 4201 of ERISA, if the withdrawal liability of Purchaser with respect to such Multiemployer Plan is not paid.

[2] This subsection (b) will be applicable to Scenario 1 set forth inSection 5.5(a).

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(iv) Purchaser shall indemnify and hold Seller harmless from against and in respect of (and shall on demand reimburse Seller for) the amount of any secondary liability incurred by Seller under section 4201 of ERISA. If for any reason the provisions of section 4204 of ERISA shall not apply to prevent a withdrawal from any Multiemployer Plan because of the transactions contemplated by this Agreement, then Purchaser hereby agrees to indemnify and hold Seller harmless from, against and in respect of (and shall on demand reimburse the Seller for) any withdrawal liability which Seller shall incur as a result of the transactions contemplated by this Agreement.

(v) Purchaser agrees that any action on its part that causes withdrawal liability (either partial or complete) during the period referred to in subsection (b)(iii) hereof shall be for valid business reasons only. In the event of a subsequent sale of the assets of the Business by Purchaser during such period, Purchaser agrees to comply with the provisions of section 4204(a)(1) of ERISA.

(vi) If all, or substantially all, of Seller’s assets are distributed, or if Seller is liquidated before the end of the first five plan years beginning after Closing, then, except as may otherwise be required by law. Seller shall provide a bond an amount in escrow or such other security as may be permitted under section 4204(a)(3)(A) of ERISA or regulations thereunder equal to the present value of the withdrawal liability Seller would have had at the Closing Date to each Multiemployer Plan but for the application of section 4204 of ERISA, which bond, amount in escrow or other security may be applied toward the satisfaction of Seller’s secondary liability described in subsection (b)(iii) hereof. Purchaser shall reimburse Seller for Seller’s after tax cost of providing such bond, escrow amount or other security.

(vii) Purchaser agrees to provide Seller with reasonable advance notice of any action or event which could result in the imposition of withdrawal liability to any Multiemployer Plan in respect of a complete or partial withdrawal occurring at anytime during the first five years beginning after the Closing, and in any event Purchaser shall immediately furnish Seller with a copy of any notice of withdrawal liability it may receive with respect to any Multiemployer Plan, together with all the pertinent details. In the event that any such withdrawal liability shall be assessed against Purchaser, Purchaser further agrees to provide Seller with reasonable advance notice of any intention on the part of Purchaser not to make full payment of any withdrawal liability when the same shall become due.]

(b) Purchaser shall have no obligation or liability with respect to or in connection with any Plan, including but not limited to those listed on Schedule 5.5(b).

Section 5.6 No Implied Representations or Warranties; DueDiligence.

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(a) The Purchaser hereby acknowledges and agrees that the Seller isnot making any representation or warranty whatsoever, express or implied, except those representations and warranties of the Seller explicitly set forth in this Agreement or in any certificate contemplated hereby and delivered by the Seller in connection herewith.

Without limiting the generality of the foregoing, and notwithstanding any otherwise express representations and warranties made by the Seller in Article III hereof, the Seller makes no representation or warranty to the Purchaser with respect to:

(i) any projections, estimates or budgets heretofore delivered to or made available to the Purchaser of future revenues, expenses or expenditures or future results of operations; or

(ii) except as expressly covered by a representation or warranty contained in Article III hereof, any other information or documents (financial or otherwise) made available to the Purchaser or its counsel, accountants or advisers with respect to the Store Locations.

(b) The Purchaser acknowledges that: (i) it has had the opportunity to visit with the Seller and meet with its officers and other representatives to discuss the Store Locations and the assets, liabilities, financial condition, cash flow and operations of the Store Locations; and (ii) all materials and information requested by the Purchaser to date have been provided to the Purchaser’s reasonable satisfaction.

Section 5.7 Books and Records; Cooperation. For a period

Inasmuch as certain of seven (7) years after the Closing Date (or such longer period as may be required by any Governmental Entity or legal proceeding):

the Purchaser shall not dispose of or destroy any of the business Seller’s books, records and files of the Store Locations transferred documents are to it hereunder, be included as Acquired Assets andthe Purchaser shall allow the Seller sold to Buyerhereunder. and any of its directors, officers, employees,counsel, representatives, accountants and auditors access to theTransferred Employees and certain other employees of the Purchaser or its subsidiaries engaged in the operation of the Store Locations and all business of Seller’s books, records andfiles of the Sellers or the Store Locations thatdocuments are transferred to it in connection herewith, which are reasonably required by the be retained by Seller, andPurchaser or Seller for purposes related may haveneed to the Chapter 11 Case, Tax matters and have access to the books, records and documents held by the other reasonable business purposes, during

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regular business hours and upon reasonable notice and theafter the date hereof, Purchaser and Seller shall have theright to make copies of any such records and files.

After the Closing Date, the Seller and Purchaser shall (and shall cause their Affiliates agree that each shall maintain (or shallprovide for a designated representative to):

(i) timely sign and deliver such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns or other reports with respect to Transfer Taxes:
(ii) reasonably assist the other party in preparing any Tax Returns which such other party is responsible maintain) for preparing and filing in accordance with this Section 5.7(c); and

(a) (iii) reasonably cooperate in preparing at least two(2) years after the Closing (or for any audits of or disputeswith taxing authorities regarding any Tax Returns such longerperiod as may be required by applicable Law) the respective books,records and documents sold or retained hereunder relating to theAcquired Assets or Store Locations. orthe business operated at the Store Locations and covering periods onor prior to the Closing Date.

(b) Notwithstanding the foregoing or any other provision in this Agreement, neither the Purchaser nor any of its Affiliates shall have the right to receive or obtain any information relating to Taxes of the Seller, any of its Affiliates or any of its predecessors other than information relating to the Acquired Assets or Store Locations.During such two year period, subject to the confidentiality rightsof third parties, representatives of Purchaser shall be permitted toinspect and make copies of any of such books, records, and documentsretained by Seller during normal business hours and upon reasonablenotice for any reasonable business purpose, such as for landlord auditsor third party pharmacy billing audits, or any other audit of Purchaserreasonably requiring the availability of such files or records. Duringsuch two year period, subject to the confidentiality rights of thirdparties, representatives of Seller shall be permitted to inspect and makecopies of books, records and documents sold to Purchaser hereunder duringnormal business hours and upon reasonable notice for any reasonablebusiness purpose, such as for landlord audits or third party pharmacybilling audits, or any other audit of Seller reasonably requiring theavailability of such files or records.

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Section 5.8 Payments Received. Seller and Purchaser each agree that after the Closing they will hold and will promptly transfer and deliver to the other, from time to time as and when received by them, any cash, checks with appropriate endorsements (using their best efforts not to convert such checks into cash), or other property that they may receive on or after the Closing which properly belong to the other party, including without limitation any insurance proceeds, and will account to the other for all such receipts.

Section 5.9 Intellectual Property Removal. Purchaser shall remove, conceal or obliterate, at its own expense, all signs and other displays of Intellectual Property (including shopping cart logos, provided that if Purchaser disposes of, rather than continuesto use, shopping carts displaying shopping cart logos, Purchaser shallnot be required to remove, conceal or obliterate such shopping cartlogos) from the Acquired Assets and Store Locations promptly after the Closing.

Section 5.10 Licenses and Permits. As soon as reasonably possiblefollowing the date of this Agreement. Seller hereby agrees to use itsreasonable, commercial efforts and at Seller’s cost and expense to assistPurchaser in obtaining all Permits required for Purchaser’s ownership andoperation (including maintenance and repairs) of the Store Locationsfollowing the date of this Agreement. The liquor, pharmacy and all otherlicenses held for use in relation to the Store Locations and owned bySeller shall, if requested by Purchaser and provided Purchaser has madeapplication in Purchaser’s name and in substantial compliance with allapplicable rules and regulations therefor, be transferred to Purchaser tothe extent (but only to the extent) (i) such licenses are transferable inaccordance with applicable law by Seller, and (ii) such licenses relateto the Store Locations. With respect to any liquor (or similar) licenseor liquor or other alcoholic beverage inventory conveyed hereunder,Seller and Purchaser shall comply with the applicable laws andregulations (including those of any State if applicable), including thecreation of any necessary escrow and the disbursement or release of anyfunds held in such escrow. Seller and Purchaser shall cooperate inexecuting and delivering any documentation necessary to effect theforegoing and to determine the amount of the Purchase Price allocable tosuch liquor license or liquor or other alcoholic beverage inventory. TheClosing of this transaction is not conditioned on obtaining the necessaryliquor license or pharmacy license; provided, however, (i) if a stateliquor control authority refuses to consent to the transfer or issuanceof a liquor license to Purchaser the liquor inventory shall be deemed anExcluded Asset and Seller shall have the right to access the StoreLocations to remove the liquor inventory for its own use, and (ii) if apharmacy license regarding a particular Store Location is not issued toPurchaser prior to the Closing, Seller shall, if legally permissible,grant Purchaser the right to use Seller’s pharmacy license in that StoreLocation until the earlier of (x) the issuance to Purchaser of a pharmacylicense by the federal and/or state pharmacy control authority and (y)the sixtieth (60th) day following the Closing. Purchaserand Seller will cooperate to meet, to the extent possible, governmentalregulations so that

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Purchaser may operate in the ordinary course of business until allof the Permits requested by Purchaser can be transferred. Seller shallexecute a power of attorney authorizing Purchaser to operate usingSeller’s licenses and to execute and file, at Seller’s sole cost andexpense, any documents or instruments (including, but not limited to,fictitious name consents, which shall be withdrawn as soon as Purchaserobtains its own Permits), required in order to permit Purchaser tolawfully operate under Seller’s Permits in accordance with the foregoing.During such period as Purchaser operates using Seller’s licenses.Purchaser agrees to indemnify Seller from any claims that may arising outof Purchaser’s use of any such licenses, unless caused by the willful ornegligent act or omission of Seller, its agents, contractors oremployees, and, subject to Purchaser’s normal self insurance program,commercial general liability insurance, written on a per occurrencebasis, in an amount of not less than $5,000,000, insuring againstliability arising from the dispensing of prescription drugs and the saleof beer, wine or other merchandise under Seller’s Permits.

Section 5.11 Estoppel Certificates. Seller shall use reasonableefforts (a) to obtain estoppel certificates from each landlord under theProperty Leases in substantially the form attached hereto as Exhibit2.2(a)(v); provided, however, that in the event Seller shall not obtainany such estoppel certificate with respect to any Property Lease, Sellerhereby agrees to provide at Closing a certification by Seller, in formand content reasonably acceptable to Purchaser, as to rent, term anddocuments comprising any such Property Lease, and (b) to include thefollowing language in the Section 363/365 Order:

“The failure of any party to identify any amendment, modification, sublease or other agreement relating to or affecting the Property, other than those listed on the attached Exhibit ___ shall forever bar and estop said party, its heirs, successors and assigns, and any predecessor in interest, of itself and anyone claiming by, through or under it or them, from asserting any claims or attempting to enforce any rights based thereon in any subsequent cases, proceedings or actions against the Debtors or the Purchaser (or parties claiming through the Purchaser), in law or equity in this or before any other court or tribunal, and any such claim(s) shall be and hereby are terminated, exonerated, barred and adjudicated against such person.”

Section 5.12 Title Insurance. Seller shall cooperate withPurchaser for Purchaser to obtain, at Purchaser’s cost, an owner’s(extended, at Purchaser’s option) coverage policy of title insurance withrespect to each parcel of Owned Real Property and leasehold (extended, atPurchaser’s option) coverage policy of title insurance with respect toeach Property Lease, subject only to the Permitted Exceptions. Withoutlimiting the foregoing, Seller shall use reasonable efforts to obtain acertification from the fee owner of Store Location #227 in Peru, Illinoissufficient to eliminate from the policy of title insurance for such StoreLocation

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exceptions 7, 8, 9 and 13 as set forth in the PermittedExceptions thereto attached as Schedule B to this Agreement.

ARTICLE VI CONDITIONS PRECEDENT
Section 6.1 Conditions Precedent to Obligation Obligations of theSeller and the Purchaser. The respective obligations of each party to effect the transactions contemplated by this Agreement shall be subject to the satisfaction of the following conditions:

(a) the Section 363/365 Order shall have been entered by the Bankruptcy Court and such order shall not have been stayed, modified, reversed or amended;
(b) the waiting period applicable to the transactions contemplated by this Agreement, if any, under the HSR Act shall have expired or been terminated and each of the material approvals or consents required by equivalent legislation in any other applicable jurisdiction shall have been obtained or waived;
(c) no action, suit or proceeding (including any proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. § 157(b) and (c)) brought by any Governmental Entity shall be pending to enjoin, restrain before any court or prohibit the transactions contemplated any Governmental Entity shall have been commenced, no investigation by any Governmental Entity shall have been commenced, and no action, suit or proceeding by this Agreement, or that would be reasonably likely to prevent or make illegal the consummation any Governmental Entity shall have been threatened, against Seller or Purchaser, or any of their Affiliates, or any of the principals, officers or directors of any of them, or any of the Store Locations or the Acquired Assets, seeking to restrain, prevent or change the transactions contemplated hereby or questioning the validity or legality of any of such transactions contemplated by this Agreement or seeking damages in connection with any of such transactions; and
(d) no Governmental Entity shall have issued any order, decree or ruling, and there shall not be any statute, rule or regulation, restraining, enjoining or prohibiting the consummation of the transactions contemplated by this Agreement.

Section 6.2 Conditions Precedent to Obligation of the Seller. The obligation of the Seller to effect the transactions contemplated by this Agreement

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shall be subject to the satisfaction or waiver at or prior to the Closing Date of the following additional conditions:

(a) the Purchaser shall have performed in all material respects its obligations under this Agreement required to be performed by the Purchaser at or prior to the Closing Date; and
(b) each of the representations and warranties of the Purchaser contained in this Agreement shall be true and correct as of the Closing Date as if made at and as of such date, except where the failure of such representation and warranty to be true and correct would not have a material adverse effect on the Purchaser or the transactions contemplated by this Agreement.

Section 6.3 Conditions Precedent to Obligation of thePurchaser. The obligation of the Purchaser to effect the transactions contemplated by this Agreement shall be subject to the satisfaction or waiver at or prior to the Closing Date (or theearlier date provided for in paragraph (d) below) of the following additional conditions:

(a) the Seller shall have performed in all material respects its obligations under this Agreement required to be performed by the Seller at or prior to the Closing Date; and
(b) each of the representations and warranties of the Seller contained in this Agreement shall be true and correct as of the Closing Date as if made at and as of such date, except where the failure of such representation and warranty to be true and correct would not have a Material Adverse Effect.
(c) Purchaser shall have received from each landlord under the Property Leases an estoppel certificate in substantially the form attached hereto as Exhibit 2.2(a)(v), or a certification by Seller in accordance with Section 5.11 as to rent, term and documents comprising any Property Lease as to which such an estoppel certificate from a landlord is not provided.
(b) (d) The Represented Employees shall have ratified the agreements reached by Purchaser with the union(s) representing the Represented Employees, all within fifteen (15) days following the later of (i) execution of this Agreement by Seller and delivery by Seller to Purchaser of the fully executed Agreement, or (ii) entry of the Section 363/365 Order by the Bankruptcy Court; provided, however, that if the condition set forth in this paragraph (d) is not satisfied within such fifteen (15) day period and Purchaser is pursuing satisfaction of such condition with commercially

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reasonable diligence, the fifteen (15) day period shall automatically be extended by seven (7) days (for a total of twenty-two (22) days).

ARTICLE VII TERMINATION, AMENDMENT, AND WAIVER
Section 7.1 Termination by Mutual Consent. This Agreement may be terminated at any time prior to the Closing Date by mutual written agreement of the Purchaser and the Seller.

Section 7.2 Termination by Eithereither the Purchaser or theSeller. This Agreement may be terminated at any time prior to the Closing Date by either the Purchaser or the Seller if the Closing Date shall not have occurred on or before [•] October 31, 2003; provided, however, that the right to terminate this Agreement pursuant to this Section7.2 shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of the failure of the Closing Date to have occurred on or prior to such date.

Section 7.3 Termination by the Purchaser. This Agreement may be terminated at any time prior to Closing by the Purchaser (provided that it is not in material breach of any representation, warranty or covenant or other agreement contained herein) if:

(a) the Section 363/365 Order shall not have been entered by Bankruptcy Court on or prior to [•] September 30, 2003
and as of the time of such termination has not been entered;
(b) upon (x) the conversion of the Chapter 11 Case to cases under Chapter 7 of the Bankruptcy Code, (y) the filing of a plan of reorganization by the Seller which does not provide for the sale of the Acquired Assets to the Purchaser under this Agreement, or (z) the appointment of a Chapter 11 trustee in the Chapter 11 Case; or
(c) upon a willful material
breach of any covenant or agreement on the part of the Seller set forth in this Agreement such that the condition in Section 6.3(a) would not be satisfied; provided, that if any such breach is curable prior to [•] October 15, 2003 through the use of the Seller’s reasonable best efforts, so long as the Seller, following written notice with respect to such breach from the Purchaser, shall be using its reasonable best efforts to cure such breach, the Purchaser may not terminate this Agreement pursuant to this Section 7.3(c).

Section 7.4 Termination by the Seller. This Agreement may be terminated at any time prior to Closing by the Seller (provided that it is not in material breach of

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any representation, warranty or covenant or other agreement contained herein) if upon a willful material breach of any covenant or agreement on the part of the Purchaser set forth in this Agreement such that the condition in Section 6.2(a) would not be satisfied; provided, that if any such breach is curable prior to [•] October 31, 2003 through the use of the Purchaser’s reasonable best efforts, so long as the Purchaser, following written notice with respect to such breach from the Seller, shall be using its reasonable best efforts to cure such breach, the Seller may not terminate this Agreement pursuant to this Section7.4.

Section 7.5 Condemnation. In the event a Store Location or anypart thereof is taken in condemnation or by the exercise of eminentdomain, or is the subject of a threatened condemnation or exercise ofeminent domain, prior to the Closing Date, Purchaser shall at Purchaser’selection, either: (i) take possession of the Store Location or anyportion thereof and close on such Store Location (subject to any right ofthe landlord to terminate any applicable Property Lease; provided,however, that if a landlord has a proper right to terminate a PropertyLease which has not been exercised at the Closing Date, due to suchcondemnation or exercise of eminent domain occurring prior to theClosing, Seller and Purchaser shall, at Purchaser’s sole option, either(a) nonetheless proceed with the Closing on the Closing Date, with noadjustment to the Purchase Price, (b) treat such Store Location as anExcluded Asset, or (c) extend the Closing Date to a date reasonablyacceptable to Purchaser and Seller that follows the deadline for thelandlord to exercise such right to terminate, so as to determine prior toClosing whether landlord will exercise such right, and in the eventlandlord exercises such right the Property Lease will be treated as anExcluded Asset) and Seller or any Affiliated Seller shall assign to Buyerany right it has to any condemnation award relating to such condemnation(it being understood that no adjustment to the Purchase Price shall occuras a result thereof), or (ii) treat such Store Location as an ExcludedAsset. In the event that a Property Lease or Store Location is treated asan Excluded Asset pursuant to this Section, the Purchase Price shall bereduced by an amount mutually agreed upon between Purchaser and Sellerwith respect to such Store Location and the related Acquired Assetslocated thereat. Seller shall not settle any condemnation proceedingrelating to a Store Location without Purchaser’s prior consent (whichconsent shall not be unreasonably withheld).

Section 7.6 Casualty. Subject to Buyer’s right to terminate itsobligations hereunder to acquire a Store Location under this Section 7.6,the risk of destruction, loss or damage by fire or other casualty to anyAcquired Asset between the date hereof and the Closing (a “Damage”) shallbe treated as follows:
(a) If a Damage to improvements at a Store Location is coveredunder Seller’s insurance policies, Purchaser shall take possession ofsuch Store Location at the Closing and, except to the extent Seller has,or has caused to be, repaired such Store Location prior to the Closing,Seller and any Affiliated Seller

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shall assign to Purchaser (or to the landlord if required bythe applicable Property Lease) any right it has to any unexpendedinsurance proceeds relating to such Damage (with Seller responsible,through an adjustment to the Purchase Price or cash payment at Closing,for any deductible payable under the insurance policy covering suchDamage). Notwithstanding the foregoing, if the cost to repair Damage at aStore Location will exceed Fifty Thousand Dollars ($50,000.00) of if theinsurance proceeds are not sufficient to repair, replace and restore theimprovements at such Store Location to pre-damage conditions, Purchasermay, at Purchaser’s sole option, treat such Store Location as an ExcludedAsset, in which event the Purchase Price shall be reduced by an amountmutually agreed upon between Purchaser and Seller with respect to suchStore Location and the related Acquired Assets located thereat.
If a landlord has a proper right to terminate a Property Leasewhich has not been exercised at the Closing Date, due to such Damageoccurring prior to the Closing, Seller and Purchaser shall, atPurchaser’s sole option, either (i) nonetheless proceed with the Closingon the Closing Date, with no adjustment to the Purchase Price, (ii) treatsuch Store Location as an Excluded Asset, or (iii) extend the ClosingDate to a date reasonably acceptable to Purchaser and Seller that followsthe deadline for the landlord to exercise such right to terminate, so asto determine prior to Closing whether landlord will exercise such right,and in the event landlord exercises such right the Property Lease will betreated as an Excluded Asset. In the event that the Property Lease orStore Location is treated as an Excluded Asset pursuant to clauses (ii)or (iii) above, the Purchase Price shall be reduced by an amount mutuallyagreed upon between Purchaser and Seller with respect to such StoreLocation and the related Acquired Assets located thereat.
If Seller has a right to terminate a Property Lease due to suchDamage occurring prior to Closing, Seller shall only exercise such rightif Purchaser so directs in writing prior to Closing. In such event theStore Location shall not be transferred at Closing and shall become anExcluded Asset and the Purchase Price shall be reduced by an amountmutually agreed upon between Buyer and Seller with respect to such StoreLocation and the related Acquired Assets located thereat. If suchProperty Lease is not terminated, the Parties shall proceed to Closing inaccordance with this Article.
(b) If a Damage to improvements at a Store Location is not coveredunder the Seller’s insurance policies, Purchaser shall have the right, inPurchaser’s sole discretion, to either (i) terminate this Agreement as tosuch Store Location, or (ii) offset against the Purchase Price an amountsufficient to allow Purchaser to repair, replace and restore theimprovements at such Store Location to pre-damage condition (subject toany obligation of the landlord for such repairs, loss or destructionpursuant to the terms of the relevant Property Lease), provided that inno event shall the amount of any such offset(s) exceed the amount of thePurchase

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Price. In the event that this Agreement is terminated as to aStore Location pursuant to clause (i) above, the Purchase Price shall bereduced by an amount mutually agreed upon between Purchaser and Sellerwith respect to such Store Location and the related Acquired Assetslocated thereat.
(c) If a Damage to equipment that is part of the Acquired Assetsoccurs and if the Store Location in which such equipment is used becomesan Excluded Asset pursuant to this Section, then the equipment in thatStore Location shall also become an Excluded Asset. Otherwise if suchequipment does not become an Excluded Asset then if a Damage to equipmentthat is part of the Acquired Assets occurs, Seller and Purchaser shallproceed to the Closing and an appropriate adjustment shall be made to thePurchase Price as it relates to such Damaged equipment.
Section 7.5 — Section 7.7 Effect of Termination and Abandonment. In the event of termination of this Agreement pursuant to this Article VII, written notice thereof shall be given as promptly as practicable to the other party to this Agreement and this Agreement shall terminate and the transactions contemplated by this Agreement shall be abandoned, without further action by any of the parties hereto. If this Agreement is terminated as provided herein (a) there shall be no liability or obligation on the part of the Seller, the Purchaser, or their respective officers, directors and Affiliates, and all obligations of the parties shall terminate, except for (i) the obligations of the parties pursuant to Sections 7.5, 8.63, 8.7
and 8.118, (ii) that a party that is in willfulmaterial breach of its representations, warranties, covenants, or agreements set forth in this Agreement shall be liable for damages occasioned by such breach, including without limitation any expenses, including the reasonable fees and expenses of attorneys, accountants and other agents incurred by the other party in connection with this Agreement and the transactions contemplated by this Agreement, and (b) all filings, applications and other submissions made pursuant to the transactions contemplated by this Agreement shall, to the extent practicable, be withdrawn from the agency or Person to which made.

ARTICLE VIII GENERAL PROVISIONS
Section 8.1 Survival of Representations, Warranties, andAgreements. NoExcept as contained in any certification(s) bySeller pursuant to Section 5.11 and Section 6.3(c) in lieu of estoppelcertificate(s), no representations or warranties made by the Selleror the Purchaser in this Agreement or in any instrument delivered pursuant to this Agreement shall survive beyond the Closing Date.

Section 8.2 Transfer Taxes. The Seller and the Purchaser will use reasonable efforts and cooperate in good faith to exempt the sale, conveyance, assignments, transfers and deliveries to be made to the Purchaser hereunder from any

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sales, use, transfer, documentary, registration, recording, stamp and other similar Taxes (collectively, “Transfer Taxes”) payable in connection with such sale, conveyance, assignments, transfers and deliveries, to the extent provided in the Section 363/365 Order, in accordance with Section 1146(c) of the Bankruptcy Code. Any instruments transferring the Acquired Assets to Purchaser shall contain the following endorsement:

“Because this [instrument] has been authorized pursuant to Order of the United States Bankruptcy Court for the Northern District of Illinois relating to a chapter 11 plan of [Seller], it is exempt from transfer taxes, stamp taxes or similar taxes pursuant to 11 U.S.C § 1146(c).”

In the event that any Transfer Taxes are assessed with respect to such sale, conveyance, assignments, transfers or deliveries, such Transfer Taxes shall be paid by the Purchaser.

Section 8.3 Brokers. The Purchaser hereby agrees to indemnify and hold harmless the Seller, and the Seller hereby agrees to indemnify and hold harmless the Purchaser, against any liability, claim, loss, damage or expense incurred by the Purchaser or the Seller, respectively, relating to any fees or commissions owed by any broker, finder or financial advisor as a result of actions taken by the Purchaser or the Seller, respectively.

Section 8.4 Notices. All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed given upon (a) confirmation of receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand, or (c) the expiration of five (5) business days after the day when mailed by registered or certified mail (postage prepaid, return receipt requested), addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice):

(a) If to the Purchaser, to

[___]

[___]

[___]

ALBERTSON’S, INC. 250 Park Center Boulevard, Box 20 Boise, Idaho 83726 Reference Eagle
Telecopy: [__] (208) 395-5352
Attention: [__] Rob Woseth

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___

with a copy to

[___]

[___]

[___]

ALBERTSON’S, INC. 250 Park Center Boulevard, Box 20 Boise, Idaho 83726 Reference Eagle
Telecopy: [__] (208) 395-6575
Attention: [__] [74200R —

Legal Department

with a copy to Burke, Warren, MacKay Serritella 330 North Wabash Avenue 22nd Floor IBM Plaza Chicago, Illinois 60611-3607 Telecopy: (312) 840-7900 Attention: Edward J. Lesniak, Esq.

And

(b) If to the Seller, to

Eagle Food Centers, Inc. 801 First Street East Milan, Illinois 61264 Telecopy: (309) 787-8840 Attention: Robert Kelly

with a copy to

Skadden, Arps, Slate, Meagher Flom (Illinois) 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 Telecopy: (312) 407-0411 Attention: George Panagakis, Esq. L. Byron Vance III, Esq.

Section 8.5 Descriptive Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

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Section 8.6 Entire Agreement; Assignment. This Agreement (including the Exhibits, Schedules and the other documents and instruments referred to herein) (a) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them, with respect to the subject matter hereof, including, without limitation, any transaction between or among the parties hereto, and (b) shall not may be assigned in whole or in part by operation of law or otherwise. Purchaser, provided that (i) either (A) the assigneeis Jewel Food Stores, Inc., a New York corporation and an Affiliate, or(B) the assignor guaranties the Property Leases thereby assigned byexecuting and delivering a guaranty in the form attached hereto asExhibit 8.6, (ii) the assignor shall remain liable hereunder, and (iii)the assignor shall not be required to take title to any Owned RealProperty nor an assignment of any Property Leases that are subject to anysuch assignment of this Agreement.

Section 8.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to the rules of conflict of laws of the State of Illinois or any other jurisdiction. The Purchaser and the Seller irrevocably and unconditionally consent to submit to the jurisdiction of the Bankruptcy Court for any litigation arising out of or relating to this Agreement and the transactions contemplated thereby (and agree not to commence any litigation relating thereto except in the Bankruptcy Court).

Section 8.8 Expenses. Whether or not the transactions contemplated by this Agreement are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated thereby shall be paid by the party incurring such expenses.Notwithstanding the foregoing, in the event of litigation betweenSeller and Purchaser or their Affiliates relating to this Agreement, theparty that is determined by a final nonappealable order of a court ofcompetent jurisdiction to be the prevailing party shall be entitled to bereimbursed by the other party for all of the reasonable legal fees anddisbursements such prevailing party has incurred in connection with suchlitigation, including any appeal therefrom.

Section 8.9 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties hereto.

Section 8.10 Waiver. At any time prior to the Closing Date, the parties hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

Section 8.11 Counterparts; Facsimile Signatures;Effectiveness. This Agreement may be executed in two or more counterparts, each of which shall be

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deemed to be an original but all of which shall constitute one and the same agreement, and facsimile copies of signatures to thisAgreement shall be deemed to have the same effectiveness as originalsignatures to this Agreement. This Agreement shall become effective when each party hereto shall have received counterparts thereof signed by all the other parties hereto.

Section 8.12 Severability; Validity; Parties in Interest. If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid or unenforceable, the remainder of this Agreement, and the application of such provision to other Persons or circumstances, shall not be affected thereby, and to such end, the provisions of this Agreement are agreed to be severable. Nothing in this Agreement, express or implied, is intended to confer upon any Person not a party to this Agreement any rights or remedies of any nature whatsoever under or by reason of this Agreement.

Section 8.13 Bulk Sales. The Purchaser hereby waives compliance with any bulk sales or other similar laws in any applicable jurisdiction in respect of the transaction contemplated by this Agreement.

ARTICLE IX DEFINITIONS
As used herein, the terms below shall have the following meanings:

Acquired Assets” has the meaning set forth in Section1.1.

Affiliate” of a Person means any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person.

Agreement” has the meaning set forth in the Preamble.

“Allocation Arbiter” has the meaning set forth inSection 1.7.

Assignment and Assumption Agreement” has the meaning set forth in Section 2.2(a)(iv).

Assumed Liabilities” has the meaning set forth inSection 1.3.

Bankruptcy Code” has the meaning set forth in the Recitals.

Bankruptcy Court” has the meaning set forth in the Recitals.

Cash Purchase Price” has the meaning set forth inSection 1.5.

Chapter 11 Case” has the meaning set forth in the Recitals.

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Cleanup” shall mean all actions required to: (1) cleanup, remove, treat or remediate Hazardous Materials in the indoor or outdoor environment; (2) prevent the Release of Hazardous Materials so that they do not migrate, endanger or threaten to endanger public health or welfare or the indoor or outdoor environment; (3) perform pre-remedial studies and investigations and post-remedial monitoring and care required by Environmental Laws or any Governmental Entity; or (4) respond to any government requests for information or documents in any way relating to cleanup, removal, treatment or remediation or potential cleanup, removal, treatment or remediation of Hazardous Materials in the indoor or outdoor environment to the extent required by Environmental Laws or any Governmental Entity.

Closing” has the meaning set forth in Section 2.1.

Closing Date” has the meaning set forth in Section2.1.

Code” means the Internal Revenue Code of 1986, as amended.

[“Collective Bargaining Agreements” has the meaning set forth in Section 5.5(a).]

Environmental Claim” means any claim, action, cause of action, investigation or written notice by any Person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, Cleanup costs, governmental response costs, natural resources damage, property damages, personal injuries or penalties) arising out of, based on or resulting from (a) the presence, Release or threatened Release of any Hazardous Materials at any location, whether or not operated by the Seller or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

Environmental Laws” means federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata).

[“ERISA” has the meaning set forth in Section5.5(b).]

Excluded Assets” has the meaning set forth in Section1.2.

Final Order” means an order of the Bankruptcy Court or other court of competent jurisdiction: (a) that has been approved inwriting by Purchaser; (b) as to which no appeal, notice of appeal, motion to amend or make additional findings of fact, motion to alter or amend judgment, motion for rehearing or motion for new trial has been timely filed or, if any of the foregoing has been timely filed, it has been disposed of in a manner that upholds and affirms the subject order in all respects without the possibility for further appeal or rehearing thereon; (b c) as to which the time for instituting or filing an appeal, motion for rehearing or motion for new trial shall have expired; and (c d) as to which no stay is in effect; provided, however, that the filing or pendency of a motion under Federal Rule of Bankruptcy Procedure 9024(b) shall not cause an order not to be deemed a “Final Order”

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unless such motion shall be filed with 10 days of the entry of the order at issue. In the case of the Section 363/365 Order, a Final Order shall also consist of an order as to which an appeal, notice of appeal, motion to amend or made additional findings of fact, motion alter or amend judgment, motion for rehearing or motion for new trial has been filed, but as to which the Purchaser, in its sole discretion, elects to proceed with Closing.

Financing” means the financing provided pursuant to the debtor-in-possession credit documents entered into among the Seller and certain of its subsidiaries and affiliates and Congress Financial Corporation, including any extension, renewal, refinancing, refunding or replacement (or successive extensions, renewals, refinancings, refundings or replacements) thereof and as approved by the United States Bankruptcy Court for the Northern District of Illinois Eastern Division, In re Eagle Foods Centers, Inc, et al., Case No. 03-15299, on May 20, 2003.

GAAP” has the meaning set forth in Section 3.4.

Governmental Entity” means any federal, state, provincial, local, county or municipal government, governmental, judicial, regulatory or administrative agency, commission, board, bureau or other authority or instrumentality, domestic or foreign.

Hazardous Materials” shall mean all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.5, or defined as such by, or regulated as such under, any Environmental Law.

HSR Act” has the meaning set forth in Section 3.3.

Intellectual Property” has the meaning set forth inSection 1.2(kj).

Inventory” has the meaning set forth in Section1.1(a).

Inventory Amount” has the meaning set forth in Section1.6(b).

Inventory Statement” has the meaning set forth inSection 1.6(b).

Material Adverse Effect” means any event, condition, or matter in respect of the operation of the Store Locations, the Acquired Assets and the Assumed Liabilities that in the aggregate result in or have a material adverse effect on the business, financial condition or operations of any individual Store Location or the Store Locations taken as a whole; provided, however, that, any event, condition or matter that (i) is generally applicable to (A) the industries and markets in which the Store Locations operate or (B) the United States and global economies or (ii) relates to foreign currency exchange rate fluctuations, shall in each case be excluded from the determination of Material Adverse Effect; and provided,further, that any event, changes, condition or matter resulting from the execution of this Agreement and the announcement of this Agreement, events leading up to and following the filing of the Chapter 11 Case and the announcement of the Chapter 11 Case and the other transactions contemplated by this Agreement shall also be excluded from the determination of Material Adverse Effect.

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[“Multiemployer Plans” has the meaning set forth inSection 5.5(b).]

Owned Real Property” has the meaning set forth inSection 1.1(e).

Permits” has the meaning set forth in Section3.6(b1.1(g).

Permitted Exceptions” means-:

(a) with respect to any Person any of the following theOwned Real Property only, collectively: (i) liens:

liens with respect to the payment of Taxes, assessments orand exceptions for taxes and other governmental chargesin all cases which and assessments (including specialassessments) that are not yet due or which and payable andthat are being contested prorated between Seller andPurchaser pursuant to this Agreement, (ii) other title defects orirregularities that do not individually or in the aggregate materiallyimpair the use of the Owned Real Property, (iii) local, county, state andfederal laws, ordinances or governmental regulations now orhereafter in good faith effect relating to the OwnedReal Property that do not materially detract from the value of the OwnedProperty or materially impair the use of the Owned Real Property as agrocery store and related retail uses, (iv) liens, title exceptions orimperfections of title solely caused by appropriate proceedingsand with respect to which adequate reserves or other appropriateprovisions are being maintained or resulting from the acts ofBuyer or any of its affiliates, employees, officers, directors, agents,contractors, invitees or licensees and (v) the Schedule B exceptionsto the extent required by GAAP:

liens of landlords arising by statute and liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other liens imposed by law created title (subject to the interlineateddeletions marked thereon) set forth in the ordinary course ofbusiness for amounts not yet due or which are being contested in goodfaith by appropriate proceedings and with respect to which adequatereserves or other appropriate provisions are being maintained to theextent required by GAAP;

deposits made in the ordinary course in connection with worker’s compensation, unemployment insurance or other types of social security benefits or to secure the performance portions of bids, tenders, sales, contracts (other than the titlecommitment attached hereto as Schedule B for the repayment of borrowed money) and surety, appeal, customs or performance bonds:such Store Location.

encumbrances arising by reason of zoning restrictions easements, licenses, reservations, covenants, rights of way, utility easements, building restrictions and other similar encumbrances on the use of Real Property or any other matters of record;

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encumbrances arising under leases or subleases of Real Property which do not in the aggregate materially detract from the value of such Real Property or interfere with the ordinary conduct of the business conducted and proposed to be conducted at such Real Property:

financing statements evidencing a lessor’s rights in and to personal property leased to such Person in the ordinary course of such Person’s business of a consignor’s interest in goods consigned to such Person in the ordinary course of business; and

any encumbrances associated with the Assumed Liabilities

(b) with respect to the Property Leases only, collectively: (i)with respect to any Property Lease, liens affecting solely the interestof the landlord thereunder and not the interest of the tenant thereunder,and (ii) with respect to the real estate encumbered by a Property Lease,(A) local, county, state and federal laws, ordinances or governmentalregulations now or hereafter in effect relating to such real estate thatdo not materially impair the use of the real estate as a grocery storeand related retail uses, (B) any matters relating to the real estate thatdo not individually or in the aggregate materially detract from the valueof or materially impair the use of any of the real estate for a grocerystore and related retail uses, and (C) the terms and provisions of theapplicable Property Lease.

Person” means an individual, corporation, partnership, association, limited liability company, trust, joint venture, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended).

Petitions” has the meaning set forth in the Recitals.

Plans” means each deferred compensation and incentive compensation, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement; each severance or termination pay, medical, surgical, hospitalization, life insurance and other material “welfare” plan, fund or program (within the meaning of Section 3(1) of ERISA); each profit-sharing, stock bonus or other “pension” plan, fund or program (within the meaning of Section 3(2) of ERISA); each material employment, termination, change of control or severance agreement; and each other material employee benefit plan, fund, program, agreement or arrangement.

Preliminary Inventory Amount” has the meaning set forth inSection 1.6(a).

Property Leases” has the meaning set forth in Section1.1(e).

Purchase Price” means the sum of (i) the Cash Purchase Price and (ii) the Assumed Liabilities.

Purchaser” has the meaning set forth in the Preamble.

Release” shall mean any release, spill, emission, discharge, leaking,

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pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Materials through or in the air, soil, surface water, groundwater or property.

[“Represented Employees” has the meaning set forth inSection 5.5(a).]

SEC” means the federal Securities and Exchange Commission.

Section 363/365 Order” means an order of the Bankruptcy Court approving the sale of the Acquired Assets to Purchaser and assumption/assignment of the executory contracts and unexpired leases and Assumed Liabilities under this Agreement to Purchaser pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, that has not been reversed, stayed, modified or amended in any material respects prior to the Closing Date. and that has been approved inwriting by Purchaser. Without limiting the foregoing, the Section 363/365 Order shall (i) include a finding that the Purchaser is a good faith purchaser entitled to the protections of Section 363(m) of the Bankruptcy Code, (ii) provide that Purchaser is obtaining the Acquired Assets free and clear of any encumbrance, (iii) provide that neither the purchase of the Acquired Assets nor the subsequent operation of any business with the Acquired Assets shall cause Purchaser to be a deemed successor of Seller within the meaning of any revenue, pension, ERISA, tax, labor or environmental law, rule or regulation or any products liability law and (iv) provide for the assignment to Purchaser of the executory contracts and unexpired leases and Assumed Liabilitiesin accordance with this Agreement.

Seller” has the meaning set forth in the Preamble.

Seller Disclosure Schedule” has the meaning set forth in the introductory paragraph to Article III.

Seller Plans” means the Plans set forth in Schedule
[•] 1.2(o).

Seller SEC Documents” means all forms, reports, schedules, statements and other documents required to be filed by the Seller since January 1, 2002 under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended (as such documents have been amended since the time of their filing.

Store Locations” has the meaning set forth in the Recitals.

Summary Financial Information” has the meaning set forth inSection 3.4.

Tangible Personal Property” has the meaning set forth inSection 1.1(c).

Tax Return” shall mean any report, return, document, statement, declaration or other information filed with respect to any Taxes (including any schedules attached thereto), and any claims for refund of Taxes, including any amendments or supplements to any of the foregoing, with any Taxing Authority with respect to Taxes.

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“Taxes” shall mean any and all taxes, fees, levies or other assessments, including, without limitation, federal, stale, local, or foreign income, gross receipts, transfer, gains, inventory, custom, duty, excise, real or personal property, sales, withholding, social security, occupation, use, service, value added, license, net worth, payroll, franchise or similar taxes, imposed by any Taxing Authority together with any interest, penalties or additions to tax and additional amounts imposed with respect thereto.

Taxing Authority” shall mean any Governmental Entity responsible for the imposition or collection of any Taxes.

Transfer Taxes” has the meaning set forth in Section8.2. (“Transferred Employees” has the meaning set forth inSection 5.5(a).]

WARN Act” means the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101-2109, as amended, and any regulations promulgated thereunder.

[Signature page follows] ******************************

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IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement to be executed on their behalf by their officers thereunto duly authorized, as of the date first above written. EAGLE FOOD CENTERS, INC.

EAGLE FOOD CENTERS, INC.

By: _________________

Name:

Title:

[•]

ALBERTSON’S, INC.

By: _________________

Name:
Title:
Eric J. Cremers

Its: Senior Vice President, Strategic Planning and Business Development

Schedule A Store Locations
1. Store #38 1414 N. Division, Morris, IL

2. Store #73 1380 N. Galega Ave., Dixon. IL

3. Store #104 700 W. Lincoln Hwy., New Lenox, IL

4. Store #227J 02.2 Shooting Park. Ed., Peru, IL

5. Store #301 Congress Hwy, 6. Geneseo. IL

Schedule B Permitted Exceptions for #73 Dixon, Illinois (attached) Schedule B Permitted Exceptions for #104 New Lenox, Illinois (attached) Schedule B Permitted Exceptions for#227 Peru. Illinois (attached) Schedule B Permitted Exceptions for #301 Geneseo, Illinois (attached) Schedule 1.1(b) Contracts Store #038 — Lease dated February 10, 1997 between Sellerand Grundy County National Bank.

Store #073 — Sublease dated March 15, 2001 between Sellerand Blackhawk Area Credit Union.

SUBJECT TO PURCHASER’S APPROVAL OF THE PROPERTY THAT IS SUBJECTTHERETO AND AFFECTED THEREBY, AND MODIFICATION OF THE DOCUMENT (ON TERMSREASONABLY ACCEPTABLE TO PURCHASER) TO SHIFT TO” SSA” (AS DEFINEDTHEREIN) ALL RESPONSIBILITY FOR MAINTENANCE AND REPAIR Store #104 —License dated September 22, 1998 between Super America LLC andSeller
Store #301 — Lease dated April 7, 1998 between Seller andNorwest Bank Illinois N.A.

Schedule 1.1(c) Tangible Personal Property (attached) Schedule 1.1(e)(i) Owned Real PropertyStore #301 Congress Hwy. 6, Geneseo. 1L

Schedule 1.1(e)(ii) Property Leases Store #38 1414N. Division, Morris, IL — Lease dated May 21,1999between OCAMPQ MORRIS L.L.C. and EAGLE FOOD CENTER, INC.

Store #73 1380 N. Galena Ave., Dixon, TL — Lease datedNovember 15, 1995 between AMERICAN NATIONAL BANK AND TRUST COMPANY OFCHICAGO, as Trustee under Trust Agreement dated October 1, 1995 and knownas Trust Number 120939-02, and EAGLE FOOD CENTER, INC.
Store #104 700 W. Lincoln Hwy., New Lenox, IL-Lease dated July 14,1998 between EAGLE NEWLENOX REALTY L.P. and EAGLE FOOD CENTER,INC.
Store #227 1022 Shooting Park. Rd., Peru IL:

(a) Lease dated August 12, 1974 between FIRST NATIONAL BANK OF OTTAWA, as Trustee under Trust Agreement dated March 24, 1967 and known as Trust Number 1044, and LUCKY STORES, INC.
(b) Lease Amendment dated November 25, 1983 between first National Bank of Ottawa, as Trustee under Trust Agreement dated March 24, 1967 and known as Trust Number 1044, and Lucky Stores, Inc.
(c) Second Amendment to Lease dated March 7, 1986 between First National Bank of Ottawa, as Trudge under Trust Agreement dated March 24, 1967 and known as Trust Number 1044, and Lucky Stores, Inc.
(d) Assignment of Lease and Agreement dated November 10, 1987 between Lucky Stores, Inc. and Eagle Food Centers, L.P.
(e) Third Amendment to Lease dated March 24, 1997 between First National Bank of Ottawa, as Trustee under Trust Agreement dated March 24, 1967 and known as Trust Number 1044, and Eagle Food Centers Inc., as successor in interest to Eagle Food Centers, L.P.

Exhibit 1.1(g) Permits CITY OF DIXON. ILLINOIS
Attn: Kathe Swanson, City Clerk
121 West 2nd Street
Dixon, IL 61021
Class F-1 Liquor License $1,100.00

Tobacco Dealer’s License — $25.00

Lee County Health Department

1315 Franklin Grove Road

Dixon, IL 61021

Phone: 615-264-3371

Food Permit — $100.00

CITY OF GENESEO, ILLINOIS
Attn Francie Delp, City Clerk
101 South State Street
Gcneseo, 11 61254
Phone: 309-944-6419
Class B Package Liquor License — $1,000.00

Cigarette over the counter license — $10.00

Henry County Health Department

Attn: Kurt Kuchle. R.S., Environmental Health Supervisor
4424 U.S. Highway 34

Kewanee, IL 61443

Phone: 309-852-0197
Retail Deli Permit — $158.00

Grocery with Meat Permit — $236.00

CITY OF MORRIS, ILLINOIS

Attn: Daria or Gail

320 Wauponsee Street
Morris, IL 60450

309-942-4026

No Beer/Wine or Liquor License

Cigarette over the counter license — $12,00

Amusement Pony Ride License — $25.00

Pop Machines Vending Licenses — $35,00

Grundy County Health Department

Attn: Duane Coulter, A.E.H.P, Food Program Coordinator
1320 Union Street
Morris, IL 60450

Phone: 815-941-3404

Food Handling Permit — $410,00
PHARMACY
Illinois Department of Professional Regulation
P. O. Box 7086
Springfield, IL 62791
Phone 217-782-8556
Licensed Division 1 Pharmacy — $100.00
Licensed Pharmacy Controlled Substance — $5.00
United Stales Department of Justice
Chicago Division Office
230 S, Dearborn Street, Suite 1200
Chicago, IL 60604
Phone:312-353-1234

DEA Controlled Substance Registration Certificate — $210.00

CITY OF PERU. ILLINOIS Attn: Judith Heuser, CityClerk P.O. Box 299 Peru, IL 61354Phone:815-223-1148

Class B Liguor License — $100.00 No City Licenserequired
LaSalle County Health Department

Exhibit 1.1(i) Additional properties and assets None. Schedule 1.2(c) Vendor-Owned Equipment

Store Numbers = Store 038 Store 070 Store073 Store 104 Store 227 Store 301

EQUIPMENT
Rug doctor 1 1 1 1 1 1
Bank 1 0 1 1 0 1
ATM 1 1 1 1 0 1
Phone Card Machine 1 1 1 1 1 0
Copy Machine 1 1 1 1 1 1
Ice Machines 2 2 2 3 1 2
Instant Lottery 2 2 1 1 2 1
Illinois Lottery 1 1 1 1 1 1
Coinstar 1 1 1 1 0 0
Pony 1 1 1 1 1 0
Slicker Machine 1 1 1 0 0 1
Gumball Machines 1 3 1 0 1 1
Newspaper Machines 4 6 9 5 0 2
Prooane tanks 1 1 1 2 1 0
Pay Phones 1 1 1 1 1 1
Cigarette Racks 1 1 1 1 1 1
Beer Signs 0 0 9 8 0 8
Video racks 3 4 11 0 2 3
Glacier Water Mach. 1 1 1 3 3 2
Little Debbie Rack 0 0 1 1 1 0
Hostess Rack 0 0 1 0 1 1
7-Up Cooler 0 0 1 1 0 0
Nabisco Rack 1 1 1 1 1 1
Keebler Rack 1 0 1 1 1 1
Fire Extinguisher 1 1 1 1 1 1
McCormick Spice/Sauce Fixture 1 1 1 1 1 1
Checkstand Liqhts 10 7 8 10 8 7
Catalina System 1 1 1 1 1 1
Fresh Express Racks 0 0 1 0 1 0
Coke Cans Machine 2 2 1 1 1 1
Pepsi Cans Machine 1 1 2 2 3 2
Fax Machines 1 1 1 1 1 1
Video Computer 1 1 1 0 0 1
Money Order Equip. 1 1 1 1 1 1
Frito Lay End Cap 2 1 1 2 2 1
Kids Books Rack 1 0 1 1 0 1
Reading Center Racks 6 6 7 9 8 6
Pop Shelving 1 1 1 1 1 1
Floor Scrubber 1 1 1 2 1 1
Floor Chemicals 1 1 1 1 1 1
Floor Buffer 1 1 1 1 1 1
Gibson Racking 1 1 1 1 1 1
Pepsi Vis-avis 1 1 1 1 1 1
Coke Vis-a-vis 1 1 1 1 1 0
7-Up Vis-a-vis 1 1 1 1 1 1
Millstone Coffee Pots 0 0 4 6 0 2
Millstone Racks 0 0 0 1 1 1
Millstone Grinder 0 1 0 0 1 0
Helium Tanks 2 2 2 2 2 2
Hershey Candy End Cap 1 1 1 1 1 1
S.F. Bay Coffee rack 1 1 1 1 1 1
S.F.Bay Grinder 1 1 1 1 1 1
Starbucks Rack 1 1 1 1 1 1
Frito Lav Aisle Shelving 1 1 1 1 1 1
Brachs Candy Shelfs 1 1 1 1 1 1
Brachs Bulk Fixtures 2 2 2 2 2 2
Sunqlass Rack 1 1 1 1 1 1
Crane Machine/Stuffed 1 1 0 0 0 0
Good Neighbor Board 1 1 0 1 2 1
Dumpsters 1 1 1 1 1 1
By Products/Grease 1 1 1 1 1 1
Fruitworks Cons 0 1 0 0 0 0
Breakroom Coffee Machine 0 1 0 0 0 0
Tony’s Bunker — Self Contained 0 1 0 0 0 0
Tombstone Bunker — Self Contained 0 1 0 0 0 0
Snapple Cooler 0 1 0 0 0 0
Malt-O-Meal Racks 1 1 1 1 1 0
Dr. Pepper Cans 0 0 0 1 0 1
Apartment Guide Rack 0 0 0 1 0 1
Kodak Rack 0 0 0 1 1 1
Good Sense Bulk Rack 0 0 0 4 0 0
Sensations Plates Rack 0 0 1 1 0 0
Gatorade Rack 1 2 0 1 1 0
Pepsi Cooler 0 0 1 1 0 1
7-Up Cans 2 0 1 0 0 0
Dejaa Blue Cans 1 0 0 0 1 0
Tribune Rack 1 1 2 1 0 1
Coke Cooler/Del 1 0 0 0 0 0
Pepsi Fountain 0 0 0 0 0 1
Coke Fountain 0 0 0 0 1 0
Advertisement Benches 4 0 0 0 1 1
Reading Glasses Rack 1 0 0 0 1 0
Voortmann Rack 0 0 0 0 1 0
Aquafine Cans 0 0 1 0 0 0
Millstone Deli Coffee Maker 0 0 0 0 0 1
A.D. Huesing Ice Mach./Deli 0 0 0 0 0 1

Schedule 1.2(o) Seller Plans (to be attached by Seller, subject to Purchaser’s right to approve the same in writing prior to attachment) Exhibit 1.6(a) Preliminary Inventory Amount
[to come]

Retail Price Percentages/Costs
In accordance with its existing methodologies, policies, principles and processes, the Seller determined the Preliminary Inventory Amount, and shall determine the Inventory Amount, as follows:

For grocery, general merchandise, liquor, dairy, frozen foods, cigarettes and health and beauty care inventory, a rolling weighted average margin for such items. The rolling weighted average margin is calculated using all inbound shipment margins and beginning inventory margins.

For meat, produce, seafood, deli, bakery and floral inventory, the current moving average cost for such items.

For pharmacy inventory, the latest cost for such items.

Exhibit 1.6(b) Inventory Procedure Instructions
Two weeks prior to the Closing (as defined in Section 2.1), Purchaser and Seller shall:

• Identify their respective representatives (collectively, the” Representatives”).
• Assign and identify Purchaser and Seller inventory captains for each store (the” Inventory Captains”) (potentially the Store Manager or District Manager and an assigned Purchaser Representative).
• Assign and identify perishable inventory counters for each store (potentially the department manager and an assigned Purchaser Representative).
• Identify the mutually agreed upon inventory counting firm(s) (Each an” Inventory Counting Firm”).
• Identify a primary representative from the Inventory Counting Firm(s) (the” Firm representative’s)”)

Seven days prior to the store closing, the Representatives plus the Firm Representative(s) and the Team Leaders shall meet at a mutually agreed to time and place to review the inventory procedures including:

• Introducing the identified personnel.

• Setting the times for the commencement of the inventories.
• Reviewing the procedures for inventory preparation.
• Reviewing the procedures for the non-perishable and perishable inventory counts.
• Establishing the order for the inventory review and having the Representatives acknowledge such an order.
• The representatives shall jointly walk each store to review any concerns identified by the Team Leaders.

After the store closing but prior to the Closing:

• The sales floor inventory stock shall be “inventory blocked” (down and back) to aid in the inventory count.
• Inventory counting firm(s) shall provide a “standard” consistent itemized inventory count identification schedule and map for each store.
• All identified unsaleable or damaged product, and all other merchandise inventory excluded from the definition of “Inventory” pursuant to Section 1.1(a), shall he eliminated either through retail sales, discard or other disposition prior to the scheduled inventory count.
• The perishable inventory crews shall take the inventories using standard inventory procedures, forms, and practices as outlined on the attached perishable inventory instructions (attach standard inventory forms used by Seller).
• The inventory shall be taken by the Inventory Counting Firm(s) in subsections of natural breaks of shelving, not more than 8′ per section from left to right then vertical. After each subsection is counted, the counter from the Inventory Counting Firm(s) shall initial off on an inventory subsection total and place it at the end of the section the count represents. Each section of the itemized inventory count identification schedule shall be totaled.
• The inventory shall be completed in agreed to sections. Once a complete section is counted, as the counters move on to the next section, the Inventory Captains shall walk each section with the Team Leader immediately after the section is counted and acknowledge review and acceptance of each count. The Inventory Captain of the Seller or the Purchaser or both can request a section recount during the review. A Lead Counter shall do the recount. If more than two sections counted by the same counter are deemed substantially inaccurate during the recount, that counter may be eliminated from the crew at the request of either Seller’s or Purchaser’s Inventory Captain.
• Both the non-perishable and perishable inventories shall be taken utilizing customer inventory count identification tags that the Inventory Counting Firm(s) uses for its non-perishable inventories or a similar system for the perishable inventories. The inventory count identification tags shall not be pulled until the Representatives complete the store inventory walk and jointly authorize the tags being pulled.
• Each Inventory Captain and the two Lead Counters shall remain at each store until after the Representatives walk each store and sign off and accept the inventory as completed, with the final valuation to be completed in accordance with the Agreement.

Exhibit 2.2(a)(i) Bill of Sale (Store No.) THIS BILL OF SALE is executed and delivered pursuant to the termsof that certain Acquisition Agreement dated (“Agreement”), by and among,a corporation and the other party named in the APA as Seller (“Seller”),and Albertson’s, Inc. (“Buyer”).
KNOW ALL MEN BY THESE PRESENTS: that Seller, for and inconsideration of the sum of Ten Dollars ($10.00) and other good andvaluable consideration, the receipt and sufficiency of which is herebyacknowledged, does by these presents grant. bargain, sell and deliverunto Buyer all of Seller’s right, title and interest in and to the Sharesand Equipment (the “Personal Property”), excluding the Excluded Equipmentand any and all other personal property specifically excluded by anyprovision of the Agreement.
The Seller herein covenants, agrees and warrants that it is theowner of said Personal Property and that the same is free and clear ofall liens and encumbrances, except for personal property taxes not yetdue and payable, and that Seller will defend the sale of said PersonalProperty against all and every person or persons whomsoever lawfullyclaiming the same or any part thereof.
Unless a different meaning is specifically set forth herein, inall of the terms set forth in

Ex 1.6(b) 2this Bill of Sale shall have the same meanings Ascribed to suchterms in the Agreement. This Bill of Sale shall he effective on andafter the date of Closing established pursuant to the Agreement.
EXECUTED this ____ day of _____, 200_a_____corporation

By:______ Name:______ Ex 1.6(b) 2 Exhibit 2.2(a)(iv) WHEN RECORDED RETURN TO:
____________________________________

____________________________________

____________________________________

____________________________________

____________________________________

Because this [instrument] has been authorized pursuant to Orderof the United States Bankruptcy Court the Northern District of Illinois relating to a chapter 11plan of [Seller], it is exempt from transfer taxes, stamp taxes or similar taxes pursuant to11 U.S.C. § 1146(c). Assignment and Assumption Agreement for Store Lease (Store# This Assignment and Assumption Agreement for Store Lease(“Agreement”) is made this day of ___ 2000, between, a corporation(“Seller”), and Albertson’s, Inc., a Delaware corporation (“Buyer”).

WITNESSETH: Ex 1.6(b) 2 Whereas, Seller is a tenant of the premises at__,pursuant to the lease (the “Lease”) identified on Exhibit 2 attachedhereto. The premises which are the subject of the Lease are located on aportion of the real property more fully described on Exhibit 1 attachedhereto. As used herein, the term “Lease” shall mean and include the Leaseand all amendments, modifications and supplements thereto, all as moredescribed on Exhibit 2 attached hereto; and
Whereas, this Agreement is executed and delivered pursuant to theterms of that certain Acquisition Agreement dated __ (“APA”), by andbetween Seller and
Whereas, Seller desires to assign the Lease to Buyer and Buyerdesires that the Lease be assigned to it and to assume the obligations ofthe tenant under the Lease.
NOW, THEREFORE, for and in consideration of the mutual promises,covenants and conditions contained herein, and other good and valuableconsideration, the receipt and sufficiency of which is herebyacknowledged, effective on the Effective Date (hereinafter defined)Seller hereby assigns the Lease, and all its right, title and interesttherein, to Buyer, and Buyer hereby assumes and agrees to pay when dueall sums payable under the Lease and further agrees to be bound at: all times hereafter by all terms, conditions and provisions of the Lease and to perform and discharge all of Seller’s obligations as tenantunder the Lease arising from and

Ex. 1.6(b) 2after the Effective Date.
Buyer agrees to and does hereby indemnify, defend and holdharmless Seller, its successors and assigns, from and against any and allliabilities, obligations, damages, losses, claims, costs, expenses,actions and causes of action (including, without limitation, attorneys’fees and the reasonable cost of investigation) of any kind, fixed orcontingent, known or unknown, incurred by or asserted against Seller, itssuccessors and assigns, accruing under the Lease or arising from orpertaining to Buyer’s use, non-use, operation or occupation of thepremises on or subsequent to the Effective Date. Buyer shall not bereleased from any of its obligations under the Lease or this Assignmentby the subsequent assignment of the Lease or the subsequent subletting ofall or any portion of the premises.
Seller agrees to and does hereby indemnify, defend and holdharmless Buyer, its successors and assigns, from and against any and allliabilities, obligations, damages, losses, claims, costs, expenses,actions and causes of action (including without limitation, attorneys’fees and the reasonable cost of investigation) of any kind, fixed orcontingent, known or unknown, incurred by or asserted against Buyer, itssuccessors and assigns, accruing under the Lease or arising from orpertaining to Seller’s use, non-use, operation or occupation of thepremises prior to the Effective Date.
This Agreement may be executed in counterparts, each of whichshall be deemed an `original, and counterpart signature pagesmay be assembled to form a single original document. Unless a differentmeaning is specifically set forth herein, all of the terms set forth inthis

Ex. 1.6(b) 2Agreement shall have the same meanings ascribed to such terms inthe APA.
As used herein, the term “Effective Date” shall mean refer to andinclude the date of Closing established pursuant to the APA.
IN WITNESS WHEREOF, this Agreement has been executed as of the dayand year set forth above.

“Seller”_______________________________________________________ __________________________a_________corporation

By:____________________________________________________________

Name:__________________________________________________________

Title:_________________________________________________________

“Buyer”________________________ALBERTSON’S, INC.,

_________________________________________a Delaware corporation

_________________________________________By:___________________

Ex. 1.6(b) 2
_________________________________________Name:_________________

_________________________________________Titel:________________

Ex. 1.6(b) 2STATE OF__) ss.

County of__)
I certify that 1 know or have satisfactory evidence that_____ signed this instrument, on oath stated that he/she was authorizedto execute the instrument as the ___ of __, __corporation, and acknowledged it to be the free and voluntary actand deed of said corporation, for the uses and purposes mentioned in theinstrument.
WITNESS my hand and official seal hereto affixed on __,200_.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
My Commission Expires:

Ex. 1.6(b) 2 Ex. 1.6(b) 2 EXHIBIT 1 to Assignment and Assumption Agreement for Store Lease Legal Description Ex. 1.6(a) 1 EXHIBIT 2 to Assignment and Assumption Agreement for Store Lease Description of Lease Shopping Center Ground Lease Store No.: Lease Date: Amendments: Parties Involved: And
(Tenant)

Address: Recording Date Recording No.: [to be in included on in the Agreement fur store #227 in Peru,Illinois:

To the extent that the above-referenced Assignment is not an executory contract (as that term is used in 111 U.S.C. § 365), the interests in the other documents comprising the Lease conveyed hereby to Buyer are subject to all of the rights, interests, obligations and duties imposed on the assignee under, pursuant to and as provided in the Assignment as if Buyer were the original assignee thereunder.]

Ex. 1.6(a) 1 Exhibit 2.2(a)(v) Landlord Estoppel Certificate (Store #)TO:____________________________________________________________

RE: Lease dated:_______________________________________________

Lease Amendments dated:________________________________________

LANDLORD:______________________________________________________

TENANT:________________________________________________________

PREMISES: Tenant’s store located at____________________________

1. As Landlord under the above-described Lease (the “Lease”), theundersigned hereby acknowledges the truth and accuracy, as of the datehereof, of the following statements pertaining to the Lease:
2. Tenant has accepted and is in possession of said Premises,including any improvements, additions and alterations theretorequired to be made by Landlord under the Lease.
3. The Lease is in full force and effect, and Tenant commenced thepayment of rent thereunder on or about
Ex. 1.6(a) 1
Ex. 2.2(a)(v)
4. To Landlord’s knowledge, Tenant is not presently in defaultunder any of the terms covenants, conditions or provisions of the Lease,and there are no circumstances that with the passage of time or thegiving of notice, or both would constitute default under any of theterms, covenants, conditions or provisions of the Lease.
5. To the best of Landlord’s knowledge, no claim, controversy,dispute. quarrel or disagreement exists between Landlord and Tenant.
6. (a) The fixed annual rent under the Lease is $___and, except to the extent required by the Lease, no monies have been paid to Landlord in respect of fixed annual rent more than thirty (30)days in advance of the due date therefore set”forth in theLease, except:
The fixed rent has been paid through ____, 200
(b) The percentage rent has been paid through the period ending[“date, and except lo the extent required under the Lease, no monieshave been paid to Landlord in respect of percentage rent morethan thirty (30) days in advance of the due date therefore set forth inthe Lease.
(c)Rea] Estate taxes currently due annually from tenant are $ __and have been paid through __ 200.
(d) Common area maintenance charges, if any, currently dueannually from tenant are $ and have been paid through __ 200.
7. No monies are currently due from Tenant in respect ofimprovements

Ex. 1.6(b) 2or construction expenses under the Lease.
8.The lease is for a term of ____, years, and the term expires on ____. Tenant has the option to extend the Lease term foradditional period(s) of ( ) years [and additional periods of ____ years]and upon days prior notice to Landlord. days prior notice toLandlord.
9. Landlord acknowledges (a) that there have been no modificationsor amendments to the Lease, except as noted above, and (b) that theLease, (together with any and all modifications and amendments, thereto)represents the entire agreement between Landlord and Tenant withrespect to the Premises, except for the following additional agreementswith respect thereto:
10. Landlord currently holds a security deposit in the amount of $which is the only security deposit stipulated under the Lease
The statements herein contained may be relied upon by Tenant andany assignee or purchaser of Tenant hut only with respect toacquisition
DATED: 200_.
“LANDLORD”
By:
Name:

Ex. 1.6(b) 2 Its:

Ex. 1.6(b) 2 Schedules 5.1 Seller’s Disclosure (to be attached by Seller, subject to Purchaser’s right to approve the same in writing prior to attachment) Ex. 1.6(b) 2 Schedule 5.5(a) Collective Bargaining Agreements (to be attached by Seller, subject to Purchaser’s right to approve the same in writing prior to attachment) Ex. 1.6(b) 2 Exhibit 8.6 GUARANTYIn consideration of the entry by _____ (“Landlord”), intothat certain Lease dated as of the day of __, 20__ (“Lease”)with __, a(n) corporation (“Tenant”), with respect to certain premiseslocated, in the of ___, County of, State of ALBERTSON’S, INC., aDelaware corporation, whose address is 250 Parkcenter Boulevard, Boise,Idaho (“Guarantor”), hereby unconditionally and irrevocably guarantees toLandlord the payment of all sums to be paid by Tenant when due and theperformance by Tenant of all of the terms, conditions, covenants andagreements of the Lease (“Guaranteed Obligations”).

Guarantor’s obligations under this Guaranty shall in no way heimpaired by reason of the happening from time to lime of any of thefollowing:

(a) The waiver or release by Landlord of the performance by Tenant of any of the agreements, covenants, terms or conditions contained in the Lease, this Guaranty or any other agreement;
(b) The modification or amendment (whether material or otherwise) of any of the obligations of Tenant under the Lease:
(c) Any failure, omission or delay on the part of any party to enforce, assert or exercise any right, power or remedy conferred on or available in or by the Lease or this Guaranty, or any action grating an indulgence or extension in any form whatsoever;

(d) The voluntary or involuntary liquidation,

dissolution, sale of all or substantially all of the assets, marshaling of assets and liabilities, receivership, conservatorship, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting Tenant, Guarantor or any of their assets;
(e) The assignment by Tenant of its interest in the Lease, provided any modifications or amendment of Tenant’s obligations under the Lease made subsequent to such assignment shall not be guaranteed hereunder unless Guarantor has consented thereto in writing.

Ex. 1.6(b) 2Guarantor agrees that the liabilities and obligations of Guarantorhereunder are primary, and are enforceable either before, simultaneouslywith or after proceeding against the Tenant and without necessity ofproceeding against Tenant. Guarantor’s liability under this Guarantyshall continue until the satisfaction of all the Guaranteed Obligations.Guarantor hereby waives, to the extent permitted by law, any statute oflimitations affecting any Guarantor’s liability hereunder of theenforcement hereof.

Every provision of this Guaranty is intended to be severable. Inthe event any term or provision herein as declared to be illegal, invalidor unenforceable for any reason whatsoever by a court of competentjurisdiction, such illegality, invalidity or unenforceability shall notaffect the balance of the terms and provisions hereof, which terms andprovisions shall remain in full force and effect.

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to beexecuted the date set forth above.

ALBERTSON’S, INC. Notice

Address: 250 Parkcenter Blvd.

Boise. Idaho 83726

By: Attn: Real Estate Legal

Group Vice President Department

“GUARANTOR”

Ex. 1.6(b) 2

Ex. 1.6(b) 2

Exhibit 2

Store 038: Morris. Illinois Cure Amount:

April Rent 2003 $51,775.00
2002 Taxes
(1st installment of 2 installments) $27, S90.36

TOTAL CURE AMOUNT: $79,665.36

Store 073: Dixon. Illinois Cure Amount:

April Rent 2003 $34,257.83

2002 Taxes
(1st installment of 2 installments) $44,111.68

TOTAL CURE AMOUNT: $78,369.51

Store 104: New Lenox. Illinois Cure Amount:

April Rent 2003 $51,330.00

2002 Taxes
(1st installment of 2 installments) $43,808.76

TOTAL CURE AMOUNT: $95,138.76

Exhibit 2 — 1

Store 227: Peru, Illinois Cure Amount:

April Rent 2003 $9,646.83

April CAM expense $1,170.48

2002 Taxes $334.62

TOTAL CURE AMOUNT: $11,151.93

All the cure amounts above shall also include (1) the second installment of 2002 real property taxes, if such installment becomes due and payable prior to the Closing Date, and (2) any other mutually agreeable administrative claims, of which the Landlord is not presently aware and of which the Landlord notifies Eagle in writing by the Closing of the Sale, that arise between the date hereof and the Closing of the Sale. If after good faith negotiations, the parties cannot agree as to legitimacy or amount of any such administrative claims., then the parties agree to submit such dispute to the Bankruptcy Court for final resolution.

Exhibit 2 — 2 Exhibit 3 All Amendment, Modification, Sublease or Other Agreement Relating to or Affecting the Property
1. Store #038, Morris, Illinois — Lease dated as of May 21, 1999 between Ocampo Morris, L.L.C., a Delaware limited liability company., and Eagle Food Centers, Inc., a Delaware corporation,

a. Lease dated as of February 10, 1997, by and between Eagle Food Centers, Inc., a Delaware corporation and Grundy County National Bank.

2. Store # 073, Dixon, Illinois — Lease dated as of November 15, 1995 between American National Bank and Trust Company of Chicago, as Trustee under Trust Agreement dated October 1, 1995, and known as Trust No. 120939-02, and Eagle Food Centers, Inc., a Delaware corporation.

a. Sublease dated as of March 15, 2001, by and between Eagle Food Centers, Inc., a Delaware corporation and Blackhawk Area Credit Union, an Illinois state chartered financial institution.
b. Declaration of Easements, Restrictions and Operating Agreement, Agreement dated as of April 6, 1993, by and between Shopko Stores, me, a Minnesota corporation, and Eagle Food Centers, Inc., a Delaware corporation.

3. Store #104, New Lenox, Illinois — Lease dated July 14, 1998 between Eagle New Lenox Realty, L.P., a Delaware limited partnership, and Eagle Food Centers, Inc., a Delaware corporation.

a. License Agreement between Speedway SuperAmerica LLC and Eagle Food Centers, Inc., dated September 22, 1998.
b. License Agreement dated as of October 10, 1991, by and between National Commerce Bancorp oration, a Tennessee corporation and registered bank holding company and Eagle Food Centers, Inc., a Delaware corporation.
(i) First Amendment to License Agreement dated as of July 27, 2001, by and between National Commerce Bank Services, Inc., a Tennessee corporation, and Eagle Food Centers, Inc., a Delaware corporation.

Exhibit 3-1

(ii) Second Amendment to License Agreement dated as of July 9, 2003, by and between National Commerce Bank Services, Inc., a Tennessee corporation, and Eagle Food Centers, Inc., a Delaware corporation.
c. Amendment to Indenture of Establishment of Protective Covenants, Conditions and Restrictions and Grant of Easements dated as of July 12, 1996, by and among (i) Eagle Food Centers, Inc., (ii) Excel Realty Trust-ST, Inc., a Delaware corporation, (111) Polygon Properties L.L.C. (iv) First United Bank, as Trustee under Trust Agreement dated December 22, 1995, (v) Hawk Green Machine, Inc., an Illinois corporation, (vi) Franchise Finance Corporation of America, (vii) Walgreen Co., a Delaware corporation, and (viii) Waldrest Associates Limited Partnership, a Connecticut limited partnership.

4. Store #227, Peru, Illinois — Assignment of Lease and Agreement dated as of November 10, 1987 between Lucky Stores, Inc., a Delaware corporation (as successor by merger to Lucky Stores, Inc., a California corporation), and Eagle Food Centers, L.P., a Delaware limited partnership.

a. Lease dated August 12, 1974 between First National Bank of Ottawa, as Trustee under Trust Agreement dated March 24, 1967, and known as Trust No. 1044, and Lucky Stores, Inc.
b. Lease Amendment dated November 25, 1983 between First National Bank of Ottawa, as Trustee under Trust Agreement dated March 24, 1967, and known as Trust No. 1044, and Lucky Stores, Inc., a California corporation.
c. Second Amendment to Lease dated as of March 7, 1986 between First National Bank of Ottawa, as Trustee under Trust No. 1044, and Lucky Stores, Inc., a California corporation.
d. Third Amendment to Lease dated March 24, 1997 First National Bank of Ottawa, not individually but as Trustee under Trust Agreement No. 1044, and Eagle Food Centers, Inc., a Delaware corporation,
e. ATM Multi-Site Agreement dated as of September 6, 2002 between TRM ATM Corporation, an Oregon corporation, and Eagle Food Centers, Inc., a Delaware corporation.

5. Store #301, Geneseo, Illinois — Lease dated as of April 7, 1998, by und between Eagle Food Centers, Inc., a Delaware corporation and Norwest Bank Illinois, N.A.

Exhibit 3 — 2

[1] Unless otherwise defined, capitalized terms used herein shall have the meanings ascribed to them in the Motion or the Purchase Agreement, as the case may be.
[2] In particular, the Store #227, Peru, Illinois — Assignment of Lease and Agreement dated November 10, 1987 between Lucky Stores, Inc. and Eagle Food Centers, L.P. and all of the Debtors’ right, title and interest derived therefrom.
[3] Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings of fact when appropriate. See F.R.Bankr.P. 7052.
[4] The Debtors shall assume and assign each Assignment Agreement pursuant to that certain form of Assignment and Assumption Agreement for Store Lease attached to the Purchase Agreement as Exhibit 2.2(a)(iv).