EXHIBIT 10.65

 

RIGHT OF FIRST REFUSAL AGREEMENT

 

This RIGHT OF FIRST REFUSAL AGREEMENT (“Agreement”) is made and entered into as
of December 29, 2003 (“Effective Date”) by and among C & K MARKET, INC., an
Oregon corporation (the “Company”), Douglas A. Nidiffer, Rex R. Scoggins, and
Larry Hage (individually, a “Shareholder”, and collectively, the
“Shareholders”), and UNIFIED WESTERN GROCERS, INC., a California corporation
(“Unified”). From time to time in this Agreement, the Company, the Shareholders
and Unified are referred to individually as a “Party” and collectively as the
“Parties”. For and in consideration of the mutual promises and covenants
contained herein, as an inducement to Unified to enter into that certain Series
A Preferred Stock Exchange Agreement between Unified and the Company, and for
other good and valuable consideration as set forth below, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1. DEFINITIONS. In addition to the terms defined elsewhere in this Agreement,
the following terms have the following meanings:

 

(a) “Convey” and “Conveyance” mean any sale, disposition, pledge, hypothecation,
gift, conveyance, transfer or assignment.

 

(b) “Shares” means any and every class of capital stock of the Company and any
other share or security which is convertible into capital stock of the Company
or has voting rights upon the happening of any event.

 

(c) “Stores” means the retail grocery stores now owned or operated by the
Company at the locations identified on Exhibit “A” attached hereto and any
retail grocery stores hereafter owned or operated by the Company, and includes
the Company’s fee interest or leasehold interest in any real property on which
such Stores are located and the furniture, fixtures, equipment, personal
property, inventory and other assets owned by the Company located in such
Stores. The term “Store” means any one of the Stores.

 

2. RIGHT OF FIRST REFUSAL - STORES. The Company agrees that it will not at any
time Convey or agree to Convey (including, without limitation, by merger,
consolidation or reorganization), in any transaction or series of related
transactions, any one or more of the Stores, unless the Company first gives
written notice to Unified of its intention to do so (the “Company Notice”) and
otherwise has complied with the terms and provisions of this Agreement;
provided, that the foregoing will not preclude the Company from entering into an
agreement to Convey one or more Stores as a pledge to support loans from
unaffiliated third parties; provided, further, that this Section 2 shall not
apply to the pledge of Stores in connection with the transactions contemplated
by that certain Second Amended and Restated Loan Agreement dated as of December
29, 2003 by and among the Company, General Electric Capital Corporation as Agent
(the “Agent”) and the lenders from time to time party thereto (the “Lenders”) or
any actions taken by the Agent or Lenders in connection with the exercise of
their rights with respect to such Stores. The Company Notice must set forth (i)
a description of the

 

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Store or Stores which are the subject of the intended Conveyance, (ii) a
detailed statement of the terms, including price and method of payment, relating
to each Store which is the subject of the intended Conveyance and (iii) the name
and address of the purchaser(s) to which the Conveyance is proposed to be made.
Upon receipt by Unified of the Company Notice, Unified will have the right to
purchase one or more or all of the Stores described in the Company Notice at the
prices and on the terms set forth in the Company Notice. Unified’s right shall
be exercisable by written notice of exercise (the “Exercise Notice”) given to
the Company at any time within thirty (30) days following Unified’s receipt of
the Company Notice. If Unified does not give the Exercise Notice within that
thirty (30) day period, or if Unified does not give the Exercise Notice as to
all of the Stores which are the subject of the intended Conveyance, the Company
may Convey to the proposed purchaser(s) identified in the Company Notice on the
terms set forth therein all (but not less than all) of the Stores as to which
Unified has not given the Exercise Notice, provided that such Conveyance is bona
fide and consummated within ninety (90) days of the date of the Company Notice.
If the Conveyance is not consummated within that ninety (90) day period, all of
the restrictions provided for in this Agreement will again become effective with
respect to the Stores. The closing with respect to any Stores as to which
Unified has given an Exercise Notice is to take place within sixty (60) days
following the giving of the Exercise Notice, or at such earlier or later time as
Unified and the Company reasonably agree upon. It is agreed that any Conveyance
by the Company of any of the Stores in violation of this Agreement will be null
and void and of no effect. Anything herein to the contrary notwithstanding, the
Company shall not be required to comply with the provisions of Paragraph 2 with
regard to the sale of up to two (2) Stores within any consecutive twelve (12)
month period or the sale of Store #27 located in Klamath Falls, Oregon and Store
#40 located in Davis, California.

 

3. POWER OF ATTORNEY - STORES. The Company hereby grants to Unified a limited
power of attorney to execute and file memoranda of its agreement described in
Section 2 in respect of any or all of the Stores in the relevant recording
offices in each county in which any Store is located. This power of attorney is
coupled with an interest and is irrevocable. All reasonable costs and expenses
of Unified associated with the preparation and recordation of such memoranda
shall be for the account of the Company.

 

4. RIGHT OF FIRST REFUSAL – SHARES. Each Shareholder agrees that it will not at
any time Convey or agree to Convey, in any transaction or series of related
transactions, all or any part of its Shares, unless that Shareholder first gives
written notice to Unified of its intention to do so (the “Shareholder Notice”)
and otherwise has complied with the terms and provisions of this Agreement;
provided, that the foregoing will not preclude any Shareholder from entering
into an agreement to Convey some or all of its Shares if the obligation to
Convey under that agreement is expressly conditioned on and is subject to the
Shareholder’s compliance with this Agreement and Unified’s rights under this
Agreement. The Shareholder Notice must set forth (i) a description of the Shares
which are the subject of the intended Conveyance, (ii) a detailed statement of
the terms, including the price and method of payment, relating to the Shares
which are the subject of the intended Conveyance and (iii) the name and address
of the purchaser(s) to which the Conveyance is to be made. Upon receipt by
Unified of the Shareholder Notice, Unified will have the right to purchase the
Shares which are the subject

 

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of the intended Conveyance at the price and on the terms set forth in the
Shareholder Notice. Unified’s right is exercisable by written notice of exercise
(the “Exercise Notice”) given to the Shareholder within thirty (30) days
following Unified’s receipt of the Shareholder Notice. If Unified does not give
the Exercise Notice within that thirty (30) day period, the Shareholder may
Convey the Shares to the proposed purchaser(s) identified in the Shareholder
Notice on the terms set forth therein, provided that such Conveyance is bona
fide and consummated within ninety (90) days of the date of the Shareholder
Notice. If the Conveyance is not consummated within that ninety (90) day period,
all of the restrictions provided for in this Agreement will again become
effective with respect to the Shares. The closing with respect to any Shares as
to which Unified has given an Exercise Notice is to take place within sixty (60)
days following the giving of the Exercise Notice, or at such earlier or later
time as Unified and the Shareholder reasonably agree upon. It is agreed that any
Conveyance by any Shareholder of all or any part of its Shares in violation of
this Agreement will be null and void and of no effect.

 

5. EQUITABLE RELIEF. The Company and the Shareholders each acknowledge that
Unified would be irreparably damaged in amounts difficult to ascertain by any
breach of the agreements of the Company and/or the Shareholders contained in
this Agreement. Accordingly, the Company and the Shareholder each agree that, in
addition to any other remedies available under applicable law, Unified will be
entitled to relief in equity for the Company’s and/or any Shareholder’s breach
of its agreements contained in this Agreement, including, without limitation,
the remedies of specific performance and injunctive relief.

 

6. REPRESENTATIONS AND WARRANTIES - COMPANY. The Company represents and warrants
to Unified that: (a) its execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action, and this Agreement
has been duly executed and delivered by it; (b) upon its execution and delivery
of this Agreement, this Agreement will constitute its legal, valid and binding
obligation enforceable against it in accordance with its terms; and (c) its
execution, delivery and performance of this Agreement will not violate any
provision of law and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default under, its
articles of incorporation or bylaws or any indenture, lease, contract, agreement
or other instrument to which it is a party or by which it or any of its
properties is bound, or any decree, judgment, order, statute, rule or regulation
applicable to it.

 

7 REPRESENTATIONS AND WARRANTIES – SHAREHOLDERS. Each Shareholder represents and
warrants to Unified that: (a) its execution, delivery and performance of this
Agreement have been duly authorized by all necessary action, and this Agreement
has been duly executed and delivered by it; (b) upon its execution and delivery
of this Agreement, this Agreement will constitute its legal, valid and binding
obligation enforceable against it in accordance with its terms; and (c) its
execution, delivery and performance of this Agreement will not violate any
provision of law and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default under, any
indenture, lease, contract, agreement or other instrument to which it is a party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to it.

 

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8. AGREEMENT TO PERFORM NECESSARY ACTS. The Parties to this Agreement agree to
perform any further acts and execute and deliver any further documents that may
be reasonably necessary to carry out the provisions of this Agreement.

 

9. TERM. The rights granted to Unified pursuant to Sections 2 and 3 hereof shall
terminate when that certain Supply Agreement of even date herewith between the
Company and Unified expires or terminates pursuant to its terms. The rights
granted to Unified pursuant to Section 4 hereof shall terminate when neither
Unified nor any of its affiliates own beneficially or of record any shares of
the capital stock of the Company.

 

10. NOTICES. All notices, requests, demands, consents and other communications
required or permitted to be given hereunder by one Party to the other must be in
writing addressed to the recipient Party’s Notice Address set forth after its
signature to this Agreement and will be deemed to have been duly given or made
(i) if delivered personally (including by commercial courier or delivery
service) to the Party at its Notice Address, then as of the date delivered (or
if delivery is refused, upon presentation) or (ii) if sent or mailed by
certified mail to the Party’s Notice Address, postage prepaid and return receipt
requested, then at the time received at the Party’s Notice Address as evidenced
by the return receipt. A Party may change its Notice Address only by a notice
given in the foregoing form and manner.

 

11. SEVERABILITY OF PROVISIONS. Any provision of this Agreement that is invalid,
illegal or unenforceable will be ineffective to the extent of such invalidity,
illegality or unenforceability without invalidating, diminishing or rendering
unenforceable the rights and obligations of the Parties under the remaining
provisions of this Agreement.

 

12. ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the Parties with regard to the subject
matter of this Agreement, and supersedes all prior and contemporaneous
agreements and understandings of the Parties, whether written or oral, with
respect thereto.

 

13. AMENDMENTS AND WAIVERS. No term or provision of this Agreement may be
amended, altered, modified or waived orally or by a course of conduct, but only
by an instrument in writing signed by a duly authorized officer or
representative of the Party against which enforcement of such amendment,
alteration, modification or waiver is sought. Any amendment, alteration,
modification or waiver will be for such period and subject to such conditions as
are specified in the written instrument effecting the same. Any waiver will be
effective only in the specific instance and for the purpose for which given.

 

14. NO WAIVER; REMEDIES CUMULATIVE. No delay or omission to exercise any right,
power or remedy accruing to Unified on any breach or default of the Company or
any Shareholder under this Agreement will impair any such right, power or remedy
of Unified nor is it to be construed as a waiver of or acquiescence in any such
breach or default, or of or in any similar breach or default occurring later;
nor will any waiver of any single breach or default be deemed a waiver of any
other breach or default occurring before or after that waiver. All remedies,
either under this Agreement or by law or otherwise afforded to Unified, are
cumulative and not alternative.

 

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15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and enforceable
by and against the Parties to it and their respective representatives,
successors and assigns.

 

16. GOVERNING LAW. This Agreement is to be governed by and construed in
accordance with the internal laws of the State of California without regard to
any otherwise governing principles of conflicts of laws.

 

17. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which will be deemed an original, but all of which together constitute
one and the same instrument.

 

18. LEGENDS. The certificates representing Shares bound hereby shall bear a
restrictive legend with respect to the restrictions contained in this Agreement.

 

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The Parties have duly executed, or have caused this Agreement to be duly
executed by their respective duly authorized officers or representatives, as of
the Effective Date.

 

UNIFIED WESTERN GROCERS, INC   C & K MARKET, INC.

By:

 

/s/ Robert M. Ling, Jr.

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  By:   

/s/ Douglas Nidiffer

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Robert M. Ling, Jr.

      

Douglas Nidiffer

   

Executive Vice President and Secretary

      

President

SHAREHOLDERS         

            /s/ Douglas A. Nidiffer

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            Douglas A. Nidiffer

        

            /s/ Rex R. Scoggins

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            Rex R. Scoggins

        

            /s/ Larry Hage

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            Larry Hage

                   

Notice Address For Unified:

  Notice Address For The
Company and Shareholders:

5200 Sheila Street

  615 5th Street

Commerce, CA 90040

  Brookings, OR 97415

Attn.: Corporate Secretary

  Attn.: President

 

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Exhibit A

 

Stores Owned or Operated by Retailer:

 

Store No & Location

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Store No & Location

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Store No & Location

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Store No & Location

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Ray’s Food Place #1

906 Chetco Ave

Brookings, OR 97415

 

Ray’s Food Place #18

66 Michigan Avenue

Bandon, OR 97411

 

Ray’s Food Place #36

15930 Dam Road

Clearlake, CA 95422

 

Ray’s Food Place #48

190 Emerald Parkway

Creswell, OR 97426

Shop Smart #2

97900 Shopping Ctr Ave.

Harbor, OR 97415

 

Ray’s Food Place #23

175 N. Weed St.

Weed, CA 96094

 

Ray’s Food Place #37

1500 Anna Sparks Way

McKinleyville, CA 95519

 

Ray’s Shop Smart #49

953 Northcrest Dr.

Crescent City, CA 95531

Ray’s Food Place #4

Highway 96

Hoopa, CA 95546

 

Ray’s Food Place #24

160 Morgan Way

Mt. Shasta, CA 96067

 

Ray’s Food Place #38

3460 Broadway

Eureka, CA 95503

 

Ray’s Food Place #50

48067 Highway 58

Oakridge, OR 97463

Ray’s Food Place #5

506 Main Street

Rogue River, OR 97537

 

Ray’s Food Place #25

124 Collier Way

Etna, CA 96027

 

Ray’s Food Place #39

25013 Hwy 126

Veneta, OR 97487

 

Ray’s Food Place #51

35831 Hwy 58

Pleasant Hill, OR 97455

Ray’s Food Place #7

5000 Valley West Blvd.

Arcata, CA 95521

 

Ray’s Food Place #26

11307 Main Street

Ft. Jones, CA 6032

 

Ray’s Food Place #40

1260 Lake Blvd.

Davis, CA 95616

 

Ray’s Food Place #52

43622 Highway 299 E

Fall River Mills, CA 96028

Ray’s Food Place #8

29560 Ellensburg Ave

Gold Beach, OR 97444

 

Ray’s Food Whse #27

2525 Washburn Way

Klamath Falls, OR 97603

 

Ray’s Food Place #41

210 SW Centuty Dr

Bend, OR 97702

 

Ray’s Food Place #54

51370 Hwy 97

LaPine, OR 97739

Ray’s Food Place #9

126 E Pine Street

Central Point, OR 97502

 

Ray’s Shop Smart #28

205 Watkins Street

Cave Junction, OR 97523

 

Ray’s Food Place #42

1139 S Cloverdale Blvd

Cloverdale, CA 95425

 

Ray’s Food Place #55

1555 Oregon Street

Port Orford, OR 97465

Ray’s Food Place #10

735 N Main Street

Phoenix, OR 97535

 

Ray’s Shop Smart #29

498 S. Pacific Highway

Tri City, OR 97457

 

Ray’s Food Place #43

868 2nd Avenue

Gold Hill, OR 97525

 

PriceLess Foods #56

811 East Central

Sutherlin, OR 97479

Ray’s Food Place #12

3500 Merlin Rd.

Merlin, OR 97526

 

Ray’s Food Place #30

625 M Street

Crescent City, CA 95531

 

Ray’s Food Place #44

580 NE Broadway

Waldport, OR 97394

 

Ray’s Food Place #57

4601 Carnes Rd.

Roseburg, OR 97470

Murphy Select Market #14

7200 Williams Hwy

Grants Pass, OR 97533

 

Ray’s Food Place #31

121 Montague Rd.

Yreka, CA 96097

 

Ray’s Food Place #45

445 W. Hwy 20

Sisters, OR 97759

 

PriceLess Foods #58

151 Douglas Blvd.

Winston, OR 97496

Ray’s Food Place #15

301 Fred Haight Drive

Smith River, CA 95567

 

Ray’s Shop Smart #32

3430 Redwood Ave.

Redway, CA 95560

 

PriceLess Foods #46

915 S. Main Street

Yreka, CA 96097

 

Ray’s Food Place #59

330 Dakota Street

Sutherlin, OR 97479

Ray’s Food Place #17

909 South Main St.

Myrtle Creek, OR 97457

 

Ray’s Food Place #33

1718 S Main Street

Willits, CA 95490

 

Ray’s Food Place #47

2009 Main Street

Fortuna, CA 95540

 

Ray’s Food Place #60

1535 NE 3rd

Prineville, OR 97754

           

Ray’s Food Place #61

11100 Hwy 62

Eagle Point, OR 97524

 

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