REAL ESTATE SALE CONTRACT

 

THIS REAL ESTATE SALE CONTRACT (this “Contract”) is made and entered into as of
this 12th day of June, 2006 between AMERICAN ITALIAN PASTA COMPANY, a Delaware
corporation (the “Seller”), and ST SPECIALTY FOODS, INC., a Minnesota
corporation (“Buyer”).

 

R E C I T A L S:

 

A.         Seller is the owner of a pasta manufacturing plant and related real
estate in Kenosha, Wisconsin.

 

B.          Seller desires to sell to Buyer, and Buyer desires to purchase the
Property (hereinafter defined) from Seller in accordance with the terms and
conditions hereinafter provided.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged by Seller and Buyer, Seller and
Buyer hereby agree as follows:

1.            The Property. For the price and upon and subject to the terms,
conditions and provisions set forth in this Contract, Seller will sell and
convey to Buyer, and Buyer will purchase from Seller the following (together,
the “Property”):

A.           Land. That certain tract or parcel of land that is legally
described on Exhibit “A” attached hereto and made a part hereof for all
purposes, together with all rights and appurtenances pertaining to the land,
including any right, title and interest of Seller in and to benefits,
privileges, easements, hereitditaments, appurtenances, and adjacent public
roadways and public alleys (together, the “Land”);

B.           Improvements. The improvements on the Land including, without
limitation, the manufacturing plant known and numbered as 6819 77th Avenue,
Kenosha, Wisconsin, the parking areas and driveways and other appurtenances (the
“Improvements”); and,

C.           Personal Property. All personal property owned by Seller listed on
Exhibit “B” attached hereto, if any (the “Personal Property”) but specifically
excluding those items set forth and described in Section 15 hereof.

2.            Purchase Price; Deposit. The purchase price (“Purchase Price”) for
the Property will be Six Million Two Hundred Fifty Thousand and No/100 Dollars
($6,250,000.00). Buyer agrees to pay the Purchase Price as follows:

A.           Buyer has previously deposited the sum of Three Hundred Thousand
and No/100 Dollars ($300,000.00) (the “Deposit”) with Kenosha Title Services,
Inc., 600 52nd Street, Suite 130, Kenosha, Wisconsin 53140 (the “Title Company”)
pursuant to a

 

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Letter of Intent executed by Buyer and Seller on May 26, 2006, and which Letter
of Intent will terminate on the Effective Date (hereinafter defined). The Title
Company will hold the Deposit in escrow pursuant to the terms of this Contract
and invest the Deposit in accordance with Buyer’s written instructions. Unless
otherwise expressly set forth herein, upon any termination of this Contract
prior to Closing, the Deposit shall be paid to Seller.

B.           On the Closing Date (as defined in Section 8 hereof), Buyer will
pay the balance of the Purchase Price by federal wire transfer of funds as
provided in Section 8(C)(ii) hereof, subject to the credits, prorations and
adjustments set forth herein, and the Deposit and interest accrued thereon, will
be applied to the Purchase Price.

3.            Title and Deed. On the Closing Date, Seller will sell and convey
to Buyer insurable fee simple title to the Property by special warranty deed in
proper form for recording (the “Deed”), subject to (a) general state, county and
city taxes and installments of special assessments, if any, not yet due and
payable for the tax fiscal year in which the Closing Date occurs and all
subsequent years, and (b) the Permitted Exceptions (as such term is defined in
Section 4).

 

4.

Title Insurance; Survey.

A.           Within five (5) days after the Effective Date, Seller will, at
Seller’s expense, cause to be delivered to Buyer a title insurance commitment
(the “Title Commitment”) issued by the Title Company, together with a copy of
all exception documents listed in Schedule B of the Title Commitment. The Title
Commitment will constitute the commitment of the Title Company to issue to
Buyer, at Seller’s expense, an owner’s title insurance policy, in the then
current ALTA standard Form B policy form (the “Title Policy”), in the amount of
the Purchase Price, insuring that at the time of the recording of the Deed there
is vested in Buyer good fee simple title to the Property, subject only to the
Permitted Exceptions. All endorsements to the Title Policy, if any, shall be
paid for by Buyer.

B.           Buyer has a period expiring ten (10) days from Buyer’s receipt of
the Title Commitment and the exception documents relating thereto within which
to object to Seller in writing with respect to any matters shown in the Title
Commitment.

C.           If Seller is unwilling or unable to cure by the Closing Date any
matter to which Buyer has timely objected, and Buyer does not waive such
objectionable matter, Buyer’s sole remedy will be to cancel this Contract by
notice to Seller, in which event the entire Deposit, together with interest
accrued thereon, will be immediately returned to Buyer, and neither party will
have any further obligation or liability to the other hereunder. Nothing herein
will be construed to require Seller to cure any title or survey objections or
otherwise to incur any expense in connection therewith.

D.           Any title matter or survey matter not timely objected to by Buyer,
or timely objected to but later waived, whether or not shown in the Commitment,
shall be deemed a Permitted Exception.

 

 

 

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5.

Due Diligence.

A.           On or before the Closing Date, Buyer and its agents shall be
afforded access during normal business hours to conduct such inspections of the
facilities and property as it deems necessary upon reasonable notice to Seller.
During such inspections, Buyer shall not unreasonably interfere with the conduct
of Seller’s business upon the Property.

B.           On or before the date that is thirty (30) days from the Effective
Date (the “Environmental Review Period”), Buyer may, at Buyer’s cost and
expense, cause a Phase I and/or a Phase II environmental audit to be conducted
on the Property (collectively, the “Audits”) as Buyer deems appropriate. Buyer
will cause copies of all results and reports from the Audits (collectively, the
“Audit Results”) to be completed and delivered to Buyer and Seller. If any of
the Audit Results disclose conditions or other matters unacceptable to Buyer in
its reasonable discretion, Buyer shall notify Seller, in writing, of such
conditions prior to the expiration of the Environmental Review Period (the
“Buyer’s Notice”) and Seller shall thereafter have the option to: (i) remedy
such unacceptable condition(s), to the reasonable satisfaction of Buyer, prior
to Closing; or, (ii) terminate this Contract, in which event the Deposit (except
for the Independent Consideration, which shall be released to Seller) shall be
returned to Buyer and neither party will have any further obligations hereunder
except for any obligations that expressly survive. If Buyer does not timely give
the Buyer’s notice, or if Buyer finds no unacceptable conditions and elects not
to provide Buyer’s Notice, then this Contract shall continue in full force and
effect and Seller shall have no further obligations under this Section 5. To the
extent that Buyer raises objections in Buyer’s Notice, Buyer will furnish Seller
with concurrent copies of all written correspondence between Buyer and the
parties conducting such Audits.

C.           During Buyer’s and its agents presence on the Property authorized
by this Section 5, it is possible that Buyer or its agents will obtain
information or material that is confidential or proprietary to either Seller or
Seller’s clients and customers (“Confidential Information”). Buyer will adhere
to the confidentiality obligations set forth in this subparagraph 5(C) and will
further ensure that any third party it designates to perform all or any part of
an Inspection agrees to confidentiality terms no less restrictive. The
definition of Confidential Information includes any information obtained by
Buyer or Buyer’s agents while on the Property which a reasonable person would
understand to be confidential, and shall also include (i) the terms of this
Contract (unless such terms have previously been disclosed by Seller), and (ii)
information about the condition of the Property. In such case, the party in
receipt of such information must maintain the confidentiality of the information
notwithstanding anything to the contrary in this Agreement. Buyer agrees not to
disclose Confidential Information without the Seller’s prior written consent and
not to use, record or reproduce any Confidential Information other than for the
purposes of performing its obligations hereunder. Upon a termination of this
Contract for any reason prior to Closing (as defined in Section 8), Buyer shall
return to Seller all such Confidential Information obtained by Buyer and Buyer’s
agents in connection with this Contract, provided, however, that the provisions
of this subparagraph 5(C) shall not apply to (i) information that becomes part
of the public

 

 

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domain other than through breach of this subparagraph 5(C); (ii) information
that Buyer has in its possession at the time of disclosure or thereafter
independently develops without the use of the disclosed Confidential
Information; (iii) information that is received by Buyer from a third party
having a legal right to transmit same; and (iv) information that Buyer is
ordered to disclose pursuant to a subpoena issued by a government agency or
court of competent jurisdiction. The parties’ obligations under this
subparagraph 5(C) shall survive the Closing or earlier termination of this
Contract.

D. Buyer agrees to indemnify, save harmless, and defend Seller, its directors,
officers, employees, and property management agent, if any, from and against any
and all claims, actions, damages, liabilities and expenses (including attorneys’
fees) in connection with personal injury and/or damage to property to the extent
caused by or resulting from any act or omission of the Buyer or its designees in
exercising its rights under this Section 5. Any defense conducted by Buyer of
any such claims, actions, damages, liability and expense will be conducted by
attorneys chosen by Buyer, and Buyer will be liable for the payment of any and
all court costs, expenses of litigation, reasonable attorneys’ fees and any
judgment that may be entered therein. Seller may repair any damage to the
Property caused by Buyer or Buyer’s designees during the Audits at Buyer’s
expense. Buyer’s obligations under this Section 5(D) shall survive Closing or
termination of this Contract.

6.            “As Is” Condition; No Representations and Warranties. Buyer
acknowledges and agrees with Seller that: (i) neither Seller nor any employee,
agent, officer or representative of Seller has made any representation, promise
or warranty whatsoever regarding the condition of the Property or any part
thereof, including, without limiting the generality of the foregoing,
representations as to the physical nature or condition thereof, the financial
prospect for the Property or its suitability for a particular purpose; (ii)
Buyer has been afforded the opportunity to inspect the Property and make an
independent determination of the Property’s condition and suitability; and (iii)
in performing this Contract, Buyer does not rely upon any statement or
information to whomsoever made or given, directly or indirectly, verbally or in
writing, by Seller or any employee, agent, officer or representative of Seller.
Buyer will take the Property “as is, where is, with all faults,” in such
condition as the same may be on the date of April 24, 2006, subject to normal
wear and tear occurring between the date hereof and the Closing Date. Buyer and
Seller acknowledge that the Purchase Price reflects the fact that Buyer has
agreed to purchase the Property “as is, where is, with all faults,” and that
Buyer assumes responsibility for any environmental work that may be necessary in
the future and that Seller shall have no liability for the condition of the
Property. Without limiting the foregoing, Buyer agrees that by closing on the
purchase of the Property, Buyer waives and releases Seller from any and all
claims relating to the Property, including, without limitation, the condition,
adequacy or suitability of the Property for Buyer’s purposes. The provisions of
this Section 6 shall survive the Closing.

 

7.

Default.

A.           If Seller defaults under this Contract, Buyer as its sole and
exclusive remedy may terminate this Contract, in which event the Deposit will be
returned by the Title Company to Buyer, or sue Seller for specific performance
of this Contract.

 

 

 

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B.           If Buyer defaults under this Contract, then, Seller, waives the
right to specifically enforce this Agreement, and Seller, as its sole and
exclusive remedy, may recover the Deposit (including interest on the Deposit)
(in lieu of any other damages recoverable by Seller by reason of Buyer’s
default, it being agreed, however, that this limitation on damages will not be
applicable to damages suffered by Seller by reason of Buyer’s breach of the
indemnity obligations under Section 5(C)). Seller acknowledges and agrees that
based on the circumstances now existing, known or unknown, it would be
excessively costly and impracticable to establish Seller’s damages by reason of
Buyer’s default and it would be reasonable to award Seller liquidated damages in
the amount of the Deposit as Seller’s sole and exclusive remedy.

C.           Seller and Buyer agree that in the event of a default by either
party, the other party shall, prior to taking any such action as may be
available to it, and except as otherwise expressly provided herein, provide
written notice to the defaulting party stating the default and giving the
defaulting party ten days within which to cure such default. The non-defaulting
party shall not be required to tender performance to the defaulting party as a
condition precedent to holding the defaulting party in default. No notice of
default shall be required if the default is the failure to close on the sale of
the Property on the Closing Date.

 

8.

Closing Date; Closing Procedure.

A.           Unless otherwise terminated as provided herein, and except as
hereinafter provided, this transaction will be closed (the “Closing”) at the
office of the Title Company on July 18, 2006 (the “Closing Date”), or such other
date as the parties may mutually agree upon in writing. An executed copy of this
Contract will be delivered to the Title Company by Seller and will constitute
the instructions to the Title Company to complete the Closing.

B.           The following will be deposited with the Title Company on or before
the Closing Date:

 

(i)

Seller will deposit or cause to be deposited:

(a)          The Deed, subject only to the Permitted Exceptions, in form
prepared by Seller, duly executed and acknowledged;

(b)          A bill of sale and assignment in form prepared by Seller conveying
to Buyer all of Seller’s interest in and to the Personal Property, without
warranty or representation;

(c)          A certification of Seller’s non-foreign status pursuant to Section
1445 of the Code;

(d)          A closing statement prepared by the Title Company and executed by
Seller;

 

 

 

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(e)          Such other documents and instruments as the Title Company
reasonably requires to evidence the due organization and valid existence of
Seller and its authority to enter into and perform its obligations under this
Contract;

(f)           A mechanic’s lien affidavit in the form customarily utilized by
Title Company;

(g)          A Confidentiality Agreement between Seller and Buyer dated as of
the date of Closing, in form and substance acceptable to Buyer and Seller (the
“Confidentiality Agreement”), executed on behalf of Seller; and

(h)          Such other instruments as are required by this Contract and/or as
are reasonably necessary or appropriate to consummate the sale contemplated by
this Contract.

 

(ii)

Buyer will deposit or cause to be deposited:

(a)          By federal wire transfer of funds, an amount equal to the balance
of the Purchase Price, as adjusted for proration of taxes, assessments and other
closing costs as provided in Section 9;

(b)          Such documents and instruments as the Title Company reasonably
requires to evidence the due organization and valid existence of Buyer and its
authority to enter into and perform its obligations under this Contract;

(c)          A closing statement prepared by the Title Company and executed by
Buyer;

(d)          The Confidentiality Agreement executed on behalf of Buyer; and,

(e)          Such other instruments as are required by this Contract and/or as
are reasonably necessary or appropriate to consummate the purchase contemplated
by this Contract.

C.           Upon receipt of all of the documents and funds described in
Paragraph 8(B), above, the Title Company will (i) record the Deed; (ii) disburse
the Purchase Price to Seller as shown in Seller’s closing statement; (iii)
deliver to Buyer the Title Policy, the original Deed, as recorded, the Bill of
Sale, Seller’s certificate pertaining to the Seller’s non-foreign status and a
copy of Buyer’s closing statement executed Buyer; and (iv) deliver to Seller a
photocopy of the Deed, as recorded, and a copy of Seller’s closing statement.

D.           In the event that the Closing has not occurred prior to 11:59 p.m.
Central Daylight Time, August 15, 2006 (the “Termination Date”) by reason of any
action or

 

 

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inaction of Seller, the entire Deposit, together with interest accrued thereon,
shall be immediately returned to Buyer this Contract shall terminate and be of
no further force or effect. In the event that Closing has not occurred prior to
the Termination Date by reason of any action or inaction of Buyer, the
provisions of Section 7(B) shall apply.

 

9.

Prorations; Closing Costs.

A.           All general state, county and city taxes and installments of
special assessments (collectively, “Taxes”), levied or assessed against the
Property will be paid by Seller if due and payable on or before the Closing Date
and will be paid by Buyer if due and payable thereafter; PROVIDED, HOWEVER, that
the Taxes for the tax fiscal period in which the Closing Date occurs (the
“Proration Period”) will be prorated between Seller and Buyer on and as of the
Closing Date, and Seller will bear only that proportion of such Taxes which the
number of days in the Proration Period to and including the Closing Date bears
to the total number of days in the Proration Period. If the amount of Taxes for
the Proration Period cannot be determined as of the Closing Date, such proration
will be based on the Taxes for the immediately preceding tax fiscal period and
there shall be no post-closing adjustment. Buyer expressly acknowledges and
agrees that any and all special assessments to which the Property is subject
which are payable in installments will continue to be paid in installments, and
Seller will be obligated to pay only those installments which are due and
payable on or before the Closing Date, and Buyer assumes and agrees to pay all
installments thereof and all other Taxes which are due and payable after the
Closing Date, subject to the foregoing provisions for proration of the Taxes for
the Proration Period.

 

B.

Buyer will pay:

(i)           One-half of the Title Company’s fee for acting as closing agent,
if any; and

 

(ii)

The cost of recording the Deed;

 

 

(iii)

The cost of any endorsements to the Title Policy; and,

 

(iv)

Any expenses associated with Buyer’s loan, if any.

 

 

C.

Seller will pay:

 

(i)           The cost of recording all releases of existing mortgages and other
financing instruments.

(ii)          The cost of issuance of the Title Commitment and the Title Policy
and all fees and charges of the Title Company in connection therewith (excluding
costs for endorsements to the Title Policy);

(iii)         One-half of the Title Company’s fee for acting as closing agent,
if any; and,

 

 

 

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(iv)

All real estate transfer and stamp taxes.

10.          Possession. Possession of the Property will be delivered to Buyer
on the Closing Date, subject to the Permitted Exceptions and further subject to
the provisions of Sections 15, 16, and 17 hereof. Seller shall disconnect all
utilities on the Closing Date, unless Buyer arranges to have the utilities
transferred to Buyer’s name (at no cost to Seller).

11.          Condemnation. If, prior to the Closing Date, all or a substantial
part of the Property is taken in any proceeding by public authority or any other
body vested with the power of eminent domain, by condemnation or otherwise or is
acquired for public or quasi-public purposes or condemnation proceedings
therefor will have been instituted, then (except as provided below) Buyer will
have the right to cancel this Contract, said election to be exercised by Buyer
by giving Seller written notice to such effect prior to the Closing Date but not
later than fifteen (15) days after Buyer receives notice of such occurrence. In
the event that Buyer elects to cancel this Contract, the entire Deposit,
together with interest accrued thereon, will be immediately returned to Buyer
and both parties will be relieved and released of and from all further liability
hereunder. Unless this Contract is so canceled, it will remain in full force and
effect without any reduction in the Purchase Price and Seller will assign,
transfer and set over to Buyer all of its right, title and interest in any
awards that may be made for such taking.

12.          Risk of Loss. If, before delivery of the Deed to Buyer,
improvements on the Property are damaged or destroyed by fire or other causes,
including those that could be covered by what is known as fire and extended
coverage insurance, the parties agree that the risk of that damage or
destruction shall be borne as provided herein. If the damage is minor
($50,000.00 or less) Seller may (a) repair or replace the improvements on the
Property if the work can be completed before the Closing Date or (b) pay to
Buyer at Closing an amount equal to the cost of such repairs or replacement. If
Seller elects not to repair or replace the improvements on the Property, Seller
will pay to Buyer at Closing an amount equal to the cost of such repairs or
replacement, or if the damage is substantial ($50,000.00 or more), Buyer may
enforce or cancel this Contract by written notice to Seller within ten (10) days
after receiving notice of the damage or destruction of the Property. If Buyer
elects to enforce the Contract, the Purchase Price shall not be reduced and the
Property shall be conveyed in its existing condition at the time, provided,
Seller shall assign Seller’s fire and extended coverage insurance proceeds to
Buyer at closing. If Buyer elects to cancel the Contract, the entire Deposit,
together with interest accrued thereon, shall be immediately returned to Buyer.

 

13.

Representations and Warranties.

A.           Notwithstanding the provisions of Section 6 hereof, Seller hereby
represents and warrants to Buyer:

(i)           Organization and Good Standing. Seller is duly organized and in
good standing in the State of Delaware and licensed to transact business in the
State of Wisconsin and will so remain until the Closing Date;

(ii)          Title. Seller has good and marketable fee simple title in and to
the Property and from the date hereof until the Closing Date;

 

 

 

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(iii)         Status and Authority of Seller. Seller has all requisite power and
authority to execute and deliver this Contract, to consummate the transactions
contemplated hereby and to perform all the terms and conditions hereof to be
performed by it; and,

(iv)         No Conflicts. The execution, delivery and performance of this
Contract by Seller does not and will not constitute a breach of (either
immediately, or upon the giving of notice or lapse of time or both), or require
the consent of any third party under, any lease, contract, or other agreement or
obligation to which Seller or any of its assets are subject.

 

B.

Buyer hereby represents and warrants to Seller:

(i)           Organization and Good Standing. Buyer is duly organized and in
good standing in the State of Minnesota and licensed to transact business in the
State of Wisconsin and will so remain until the Closing Date;

(ii)          Status and Authority of Seller. Buyer has all requisite power and
authority to execute and deliver this Contract, to consummate the transactions
contemplated hereby and to perform all the terms and conditions hereof to be
performed by it; and,

(iii)         No Conflicts. The execution, delivery and performance of this
Contract by Buyer does not and will not constitute a breach of (either
immediately, or upon the giving of notice or lapse of time or both), or require
the consent of any third party under, any lease, contract, or other agreement or
obligation to which Buyer or any of its assets are subject.

14.          Brokers. Each party represents and warrants to the other that it
has had no dealings with any broker or agent in connection with this transaction
except Keen Realty, LLC, Apex Commercial, Inc. (collectively, “Apex”) and Realty
Plus (“Buyer’s Broker”). Apex shall be paid a commission by Seller at Closing,
pursuant to a separate written agreement. Seller shall have no obligation to pay
any commission, or otherwise compensate Buyer’s Broker, who has been retained at
Buyer’s sole cost and expense. Nothing herein shall be deemed to prohibit
Buyer’s Broker from being paid a commission or fee by Apex in accordance with a
separate agreement between Buyer’s Broker and Apex, however, Buyer acknowledges
that Seller has no obligation or responsibility concerning such agreement. Each
party agrees to indemnify and save the other party harmless from all claims,
liability and expense (including reasonable attorneys’ fees) made against or
suffered or incurred by the other party as a result of a breach of the foregoing
representation.

15.          Excluded Assets. The Personal Property shall not include: (i) the
B-Line pasta manufacturing line described on Exhibit “C” attached hereto and
incorporated herein by reference (the “B-Line”), excluding the “piping headers”
(ii) the C-Line manufacturing line described on Exhibit “C” (the “C-Line”),
excluding the “piping headers” (iii) any parts inventory relating to the four
(4) pasta manufacturing line machines currently or previously located on the
Property; (iv) the tote washer; (v) any packaging equipment including tote
stations

 

 

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and conveyors; and, (vi) any pasta inventory of Seller located on the Property
(collectively, the “Excluded Assets”).

A.           Except as provided herein, the Excluded Assets shall be removed
from the Property by Seller prior to Closing without any material damage or
destruction to the Property.

B.           Seller shall be entitled to allow AIPC’s pasta inventory to remain
on the Property until August 31, 2006, provided that all pasta inventory shall
be shipped by Seller at Seller’s sole cost and expense prior to such date and
further provided that the storage of Seller’s pasta inventory on the Property
following Closing shall not unreasonably interfere with Seller’s operation of
the Property. Seller shall be solely responsible for any risk of loss to such
inventory and shall maintain appropriate insurance for such inventory.

C.           The B-Line shall be allowed to remain on the Property for a period
of two (2) years following Closing. Neither Seller nor Buyer shall be permitted
to operate the B-Line during such period that it remains on the Property. The
B-Line shall be removed from the Property at Seller’s sole cost and expense and
Seller and Buyer shall cooperate with respect to the timing of the removal of
the B-Line. Buyer shall take commercially reasonable steps to protect the B-Line
from damage or destruction during the period that it remains on the Property.
Seller shall cause the B-Line to be covered by Seller’s policies of casualty
insurance and Buyer shall bear no risk of loss for such equipment.

D.           Seller and Buyer acknowledge and agree that the removal of the
B-Line and the C-Line from the Property will necessarily cause some resulting
damage to the Property, including the Property’s roof. Seller shall be
responsible for any significant damage to the Property or repairs to the
Property that are necessary following such removal in order to restore the
Property to its condition prior to the installation and removal of the
equipment. Seller’s removal of the B-Line and the C-Line will include the
removal of all electrical conduit from the existing location of the B-Line and
C-Line to their underground feed location as well as the exhaust stacks
connected to the B-Line and C-Line. Seller shall ensure that the removal of the
B-Line will not interfere with Buyer’s ongoing operation of the Property and it
shall take all steps necessary to safeguard other parts of the Property form any
contamination or interruption arising from the removal of the B-Line. Seller
will cause the roof of the Property to be repaired following the removal of the
exhaust stacks, which repairs shall be conducted to the reasonable satisfaction
of Buyer in a good and workmanlike manner in conformance with all applicable
legal requirement (including building code requirements). All roof repairs
conducted by Seller shall be conducted by the party with whom Seller contracted
to install the roof, or by such other company selected by Seller who is
authorized to conduct such repairs under the existing warranty covering the
roof.

16.          Non-Competition. Buyer, its subsidiaries and affiliates will not,
directly or indirectly, sell, produce, process, co-pack or distribute in Canada,
the United States or Mexico any amount of dry pasta product in excess of five
million pounds per calendar year, other than when such pasta is included in
a product packaged by Buyer (and not by a third party on behalf

 

 

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of Buyer) in which package the pasta is accompanied by a packet or pouch of some
type or the pasta and seasonings are blended together in the same package.

A.           Notwithstanding the above, Buyer will not sell, produce, process,
co-pack or distribute any dry pasta to or for General Mills, ConAgra, Kraft,
Campbell’s and Agri-Link, or any party affiliated with any of them or supplying
or contacting with any of them with respect to the sale, production, processing,
co-packing or distribution of dry pasta or any product containing dry pasta.

B.           Buyer also agrees, through the earlier of: (i) December 31, 2009,
or (ii) the date that current majority owners of Buyer (the “Restricted
Parties”) no longer have control over Buyer, not to sell, lease or otherwise
transfer the rights to use the Property to any third party (other than a third
party sale and leaseback transaction) that directly or indirectly, sells,
produces, processes, co-packs or distributes any dry pasta product

C.           The provisions of this Section 16 shall survive Closing through
December 31, 2009.

D.           At Seller’s request, Buyer shall certify to Seller, no more
frequently than annually, that Buyer and the Restricted Parties are in
compliance with the terms and provisions of this Section 16.

17.          Technical Assistance. Until such date that is one hundred twenty
(120) days following the Closing Date, Seller shall provide certain technical
assistance to Buyer with respect to mechanical systems located on the Property
and the operation of the Personal Property. Such assistance shall be provided by
members of Seller’s engineering department with appropriate knowledge of such
equipment, at such times that are mutually agreeable to Buyer and Seller. During
the 120 day period described in this Section 17, Seller’s designated employees
shall not be required to expend more than two hundred forty (240) man-hours in
providing such assistance.

18.          Assignment. Buyer shall not assign or transfer Buyer’s rights or
obligations under this Contract without Seller’s consent, which will not be
unreasonably withheld or delayed. Assignment of this Contract by Buyer (if
permitted by Seller), however, shall not release Buyer of Buyer’s obligations to
Seller hereunder.

19.          Attorneys’ Fees. Notwithstanding Section 7 of this Contract, if
either party obtains a judgment against the other party by reason of a breach of
this Contract, reasonable attorneys’ fees, as fixed by the court, may be
included in such judgment.

20.          Entire Agreement; Modifications; Authority. This Contract contains
the entire agreement between Seller and Buyer and there are no other terms,
conditions, promises, understandings, statements or representations, express or
implied, concerning the sale contemplated hereunder. No alteration, change or
modification of this Contract will be effective unless made in writing and
executed by Seller and Buyer.

21.          Effective Date. The term “Effective Date of this Contract” as used
herein means the date on which either Seller or Buyer last signs this Contract
as dated beneath such signature.

 

 

 

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22.          Time. Time is of the essence in the performance of all obligations
under this Contract.

23.          Notice. All notices required under this Contract and all approvals
and other communications required or permitted to be given hereunder, must be in
writing and be mailed by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

 

To Seller:

American Italian Pasta Company

 

4100 N. Mulberry Drive

 

 

Kansas City, MO 64116

 

 

Attn: General Counsel

 

 

 

With a copy to:

American Italian Pasta Company

 

4100 N. Mulberry Drive

 

 

Kansas City, MO 64116

 

 

Attn: Chief Financial Officer

 

 

Blackwell Sanders Peper Martin LLP

 

4801 Main Street, Suite 1000

 

Kansas City, Missouri 64108

 

 

Attention: John Crossley

 

 

 

To Buyer:

ST Specialty Foods, Inc.

8700 Xylon Avenue North

 

Brooklyn Park, MN 55445

 

Attn: Dale Schulz

 

 

 

With a copy to:

Kirkland & Ellis LLP

 

 

555 California Street

 

 

San Francisco, California 94104

 

Attention: David A. Breach

 

 

Any notice will be deemed given on the day after the date such notice is mailed
as hereinbefore provided.

24.          Terminology. The words “include”, “includes” and “including” will
be deemed to be followed by the phrase “without limitation”. The words “herein”,
“hereof”, “hereunder” and similar terms will refer to this Contract unless the
context requires otherwise. Where the context requires, the neuter gender will
include the masculine and/or feminine, and the singular will include the plural
and vice versa.

25.          Governing Law. This Contract will be governed by and construed in
accordance with the laws of the State of Wisconsin.

 

 

 

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26.          Binding Effect. This Contract will be binding upon and, subject to
the provisions of Section 19 hereof regarding assignment, inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

27.          Survival. All provisions or requirements of this Contract not
capable of being performed prior to the Closing Date will remain in full force
and effect after the Closing Date.

28.          Memorandum. Seller and Buyer agree, at the request of either party,
to record a memorandum against the Property which describes the provisions
Sections 15 and 16 hereof.

29.          Counterparts. This Contract may be executed in separate
counterparts, each of which will be deemed to be an original and all of which,
collectively, will be deemed to constitute one and the same Contract.

30.          Business Days. Whenever any determination is to be made or action
to be taken on a date specified in this Agreement, if such date shall fall upon
a Saturday, Sunday or holiday observed by national banks in the state in which
the Property is situated, the date for such determination or action shall be
extended to the first business day immediately thereafter.

31.          1031 Exchange. Either party shall have the right to include this
transaction as part of a 1031 tax deferred exchange. Each party agrees to
cooperate with the other party to effectuate any such 1031 exchange; provided,
however, the other party shall not be required to incur any expense or liability
as a result of same. As part of a 1031 effectuated by Seller, Seller may upon
notice to Buyer transfer the Property, or a percentage interest thereof, prior
to Closing to one or more affiliates or owners of Seller, but such transfer
shall in no way require Buyer to incur any additional expense or liability as a
result thereof, and all percentages of ownership shall be deeded to Buyer at
Closing.

32.          Waiver of Trial by Jury. IN ANY ACTION OR PROCEEDING UNDER OR
RELATED TO THIS CONTRACT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, BUYER
AND SELLER HEREBY AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY, IRRESPECTIVE OF WHICH PARTY COMMENCES SUCH ACTION
OR PROCEEDING.

[SIGNATURE PAGE FOLLOWS]

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Contract as of the date first
above written.                

 

 

 

SELLER:

 

 

 

 

 

AMERICAN ITALIAN PASTA COMPANY, a

Delaware corporation

 

 

 

 

 

 

 

By: 

/s/ George A. Shadid

 

 

Printed Name:

George A. Shadid

 

 

Title:

EVP/CFO

 

 

 

 

 

 

Date:

6-12-06

 

 

 

 

 

 

BUYER:

 

 

 

 

 

ST SPECIALTY FOODS, INC., a Minnesota

corporation

 

 

 

 

 

 

 

By: 

/s/ Dale V. Schulz

 

 

Printed Name:

Dale V. Schulz

 

 

Title:

President, CEO

 

 

 

 

 

 

Date:

June 12, 2006

 

 

 

 

 

 

 

 

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