UNITED NATURAL FOODS, INC.
000 XXXX XXXX
XXXXXXXX, XXXXXXXXXXX 00000
As of October 31, 1997
FLEET CAPITAL CORPORATION
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
Re: Third Amendment to Amended and Restated Loan Agreement
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Ladies and Gentlemen:
Reference is made to the Amended and Restated Loan and Security Agreement
dated February 20, 1996 as amended ("Loan Agreement") and all promissory notes,
mortgages, guaranties, agreements, documents and instruments entered into by
United Natural Foods, Inc., Mountain People's Warehouse Incorporated, Natural
Retail Group, Inc., Rainbow Natural Foods, Inc., and Nutrasource, Inc.
(collectively, the "Borrowers") and any other person or obligor pursuant thereto
(collectively, the "Loan Documents") with or for the benefit of Fleet Capital
Corporation ("Lender" or "FCC"). Except as otherwise defined herein,
capitalized terms used herein shall have the meanings given them in the Loan
Agreement. This Third Amendment to Loan Agreement is referred to as the "Third
Amendment".
Background. The Borrowers have requested that the Lender consent to the merger
by Gem Acquisition Corp. with and into Stow Xxxxx, Inc., a Vermont corporation
("Stow") as a result of which Stow will become a wholly owned subsidiary of UNF
and the subsidiaries of Stow including, without limitation RB Acquisition,
L.L.C., a Delaware limited liability company ("Newsub"), will become indirect
subsidiaries of UNF (the "Merger"). In connection with this consent, Borrowers
have requested, among other things, that Lender agree that Stow and Newsub
become Borrowers under the Loan Agreement and the other Loan Document, that the
total credit facility be increased to $100,000,000 and the limit on inventory
advances be increased to $50,000,000 and the advance rate on inventory to 60%, a
term loan in the amount of $6,600,000 be made to the Borrowers, and the
aggregate amount of Real Estate Acquisition Loans and the Real Estate Term Loan
be increased to $20,000,000. To accommodate these requests, the Lender has
proposed and the Borrowers have agreed that the Lender syndicate the credit
facilities to other banks and lending institutions as agent for itself and the
new lenders pursuant to the terms set forth herein and the Agency and
Interlender Agreement attached hereto.
Consent to Merger. Subject to the satisfaction of the terms and conditions
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hereof, the Lender hereby consents to the Merger.
Amendments to the Loan Agreement. Subject to the satisfaction of the terms and
--------------------------------
conditions hereof, Lender and Borrower have agreed that the Loan Agreement shall
be amended as follows:
Designation of Additional Borrowers.
-----------------------------------
Stow and Newsub each are, and hereby shall be, a Borrower under the Loan
Agreement, jointly and severally with UNF, MPW, NRG, Rainbow and NutraSource
with respect to all existing and hereafter arising Obligations and all
references in the Loan Agreement and other Loan Documents to Borrowers shall
mean and include UNF, MPW, NRG, Rainbow, NutraSource, Stow and Newsub, jointly
and severally.
Stow and Newsub each hereby irrevocably appoints and constitutes UNF as to be
its agent under the Loan Agreement, the Loan Documents or otherwise to (i)
request all Loans and LC Guaranties and Letters of Credit, to select interest
rates and, for Euro-Dollar Loans, Euro-Dollar Interest Periods, pursuant to
Section 3.1.1; (ii) receive all notices, reports, statements and other
information or communications from Lender to the Borrowers or any of them; (iii)
receive the proceeds of all Loans from the Lender and to distribute such
proceeds among the Borrowers in accordance with the terms of this Agreement; and
(iv) otherwise take such action as may be required or permitted by the terms of
the Loan Agreement by and on behalf of the Borrowers.
Designation of Additional Lenders and Agent for Lenders.
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In accordance with Section 11.3 of the Loan Agreement, FCC intends to assign a
portion of its interest in the Loans, LC Guaranties and Letters of Credit, this
Agreement and the other Loan Documents to one or more banking or lending
institutions. Upon notice by FCC to Borrowers that such assignments are
effective, each assignee shall be deemed to be a Lender under the Loan Agreement
and other Loan Documents. FCC and such additional Lenders shall thereupon be
severally liable in accordance with the proportionate interest assigned to each
such new Lender and retained by FCC (the "Pro Rata Share") for the obligations
of the Lender under the Loan Agreement and FCC shall be correspondingly relieved
of such obligations to the extent of such assignments. Henceforth all
references in the Loan Agreement and other Loan Documents to Lender in the
singular shall be deemed to be changed to refer to all of the Lenders in the
plural, in their individual and several capacities.
For ease in the administration of the responsibilities of the Lenders under the
Agreement, the Lenders have appointed FCC as agent for the Lenders ("Agent")
pursuant to the Agency and Interlender Agreement attached hereto. Pursuant to
the Agency and Interlender Agreement, FCC has assigned to the Agent, for the
benefit of all the Lenders, all of its right, title and interest in the
Collateral, the Liens granted to the Lenders under the Loan Agreement and other
Loan Documents and all rights, remedies and claims with respect to the
Collateral and such Liens. All actions or omissions of the Agent and all
expenditures made and costs and expenses incurred by Agent shall be deemed to be
made or incurred on behalf of the Lenders, shall be deemed to be Obligations
under the Loan Agreement and other Loan Documents and shall be secured by the
Liens granted on all of the Collateral.
Upon notice from the Agent of an assignment by a Lender, Borrowers agree to
issue replacement Notes to FCC and to each assignee of a Lender in amounts equal
to the Pro Rata Share of each such assignee of the total amount of each of the
credit facilities under the Loan Agreement.
The Borrowers acknowledge, confirm and agree that all representations,
warranties, covenants, indemnities and other agreements under the Loan Agreement
and other Loan Documents shall be deemed to be made to all of the Lenders and to
the Agent. Section 1 of the Loan Agreement is amended to delete the amount
"$50,000,000" in the third line of the first paragraph thereof and to substitute
"$100,000,000" in place thereof.
Section 1.1.2 of the Loan Agreement is deleted in its entirety and the following
is substituted in place thereof.
"1.1.2 Use of Proceeds. The Revolving Credit Loans shall be used for
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the satisfaction of existing Indebtedness of Stow Xxxxx, Inc. owing to Fleet
National Bank and for the Borrowers' general operating capital needs in a manner
consistent with the provisions of this Agreement and all applicable laws."
Section 1.2.1 of the Loan Agreement is deleted and the following is substituted
in place thereof:
"1.2.1 Term Loan. Lender agrees to make a term loan to the Borrowers
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on the Third Amendment Closing Date in the principal amount of $6,600,000, which
shall be repayable in accordance with the Term Note and shall be secured by all
the Collateral. The proceeds shall be used for purposes for which the proceeds
of Revolving Credit Loans are authorized to be used."
Section 1.2.3 of the Loan Agreement is amended to delete the first sentence
thereof and to substitute in place thereof the following: "The Lender agrees to
make to the Borrowers additional Loans ("Real Estate Acquisition Loans") in an
aggregate principal amount not to exceed $14,625,000 for the purpose of
financing the purchase of the real property to be used by the Borrowers in
Auburn, California and to finance the purchase of other parcels of real property
to be used by the Borrowers.
Appendix A. General Definitions is hereby amended as follows:
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The definition of Borrowing Base is amended to delete the definition thereof in
its entirety and to substitute in place thereof:
"Borrowing Base - at any date of determination thereof, an amount
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equal to the lesser of:
(i) $100,000,000 minus the unpaid principal balance of (a) the Term
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Loan; (b) the Real Estate Term Loan; (c) the Acquisition Loans; (d) the Real
Estate Acquisition Loans; and (d) the face amount of any Letter of Credit or LC
Guaranty outstanding at such date; or
(ii) an amount equal to:
(a) ninety percent (90%) of the net amount of Eligible Accounts
outstanding at such date not including UNF's Eligible
Accounts due from the New Subsidiaries and Rainbow;
PLUS
(b) the lesser of (1) $50,000,000.00 or (2) sixty percent (60%)
of the value of the Eligible Inventory at such date, not
including the Eligible Inventory of the New Subsidiaries,
consisting of finished goods calculated on the basis of the
lower of cost or market with the cost of finished goods
calculated on a first-in, first-out basis.
PLUS
(c) either (1) seventy-five percent (75%) of the net amount of
the UNF's Eligible Accounts due from the New Subsidiaries
outstanding at such date; or (2) sixty percent (60%) of the
value of the Eligible Inventory of the New Subsidiaries at
such date, consisting of finished goods calculated on the
basis of the lower of cost or market with the cost of
finished goods calculated on a first-in, first out basis.
MINUS
(d) an amount equal to the face amount of any LC Guaranty and
Letter of Credit outstanding on such date.
For purposes hereof, the net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts less any and all returns,
rebates, discounts (which may, at Lender's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time."
The definition of Euro-Dollar Interest Period is amended to delete the words "or
twelfth" in the third line thereof and by inserting the word "or" after the word
"third" and before the word "sixth" in such third line.
Security Interest in Collateral. To secure the prompt payment and performance
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to Lenders of the Obligations, each of Stow and Newsub hereby grants to Lenders
and to Agent a continuing Lien upon all of their respective assets, including
all of the following Property and interests in Property of each such Borrower,
whether now owed or existing or hereafter created, acquired or arising and
wheresoever located:
(i) Accounts;
(ii) Inventory;
(iii) Equipment
(iv) General Intangibles
(v) All monies and other Property of any kind now or at any
times hereafter in the possession or under the control of Lender or a
bailee or Affiliate of Lender;
(vi) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of (i) through
(v) above, including, without limitation, proceeds of and unearned
premiums with respect to insurance policies insuring any of the
Collateral; and
(vii) All books and records (including, without limitation,
customer lists, credit files, computer programs, print-outs, and other
computer materials and records of any Borrower pertaining to any of
(i) through (vi) above.
Representations and Warranties.
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To induce Lenders to enter into this Third Amendment, each Borrower
warrants, represents and covenants to the Lenders and Agent that:
Organization and Qualification. Each Borrower is a corporation duly
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incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Borrower is duly qualified or is
authorized to do business and is in good standing as a foreign corporation or
limited liability company in all states and jurisdictions in which the failure
of such Borrower to be so qualified would have a material adverse effect on the
financial condition, business or properties of such Borrower.
Corporate Power and Authority. Each Borrower is duly authorized and empowered
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to enter into, execute, deliver and perform this Third Amendment and each of the
Loan Documents to which it is a party. The execution, delivery and performance
of this Third Amendment and each of the other Loan Documents have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the shareholders or members of a Borrower; (ii)
contravene any Borrower's charter, by-laws or operating agreement; (iii)
violate, or cause Borrower to be in default under, any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award in effect having applicability to any Borrower; (iv) result in a breach of
or constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which any Borrower is a party or by
which Borrower's Properties may be bound or affected; or (v) result in, or
require, the creation or imposition of any Lien (other than Permitted Liens)
upon or with respect to any of the Properties now owned or hereafter acquired by
Borrower.
Legally Enforceable Agreement. This Third Amendment and each of the other Loan
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Documents when delivered under this Third Amendment will be, a legal, valid and
binding obligation of each Borrower, enforceable against each Borrower in
accordance with its respective terms.
No Material Adverse Change. Since the date of the last financial statements
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provided by the Borrowers to the Lender, there has been no material adverse
change in the condition, financial or otherwise, of any Borrower as shown on the
Consolidated balance sheet as of such date and no change in the aggregate value
of the Collateral, except changes in the ordinary course of business, none of
which individually or in the aggregate has been materially adverse.
Continuous Nature of Representations and Warranties. Each representation and
warranty contained in the Loan Agreement and the other Loan Documents remains
accurate, complete and not misleading in any material respect on the date of
this Third Amendment, except for representations and warranties that explicitly
relate to an earlier date and changes in the nature of any Borrower's business
or operations that would render the information in any exhibit attached thereto
either inaccurate, incomplete or misleading, so long as such changes were
disclosed in the Form S-1 Registration Statement of UNF as filed with the
Securities and Exchange Commission on September 4, 1996, as amended, in the
amended Exhibits attached hereto or Lenders have consented to such changes or
such changes are expressly permitted by the Loan Agreement.
Conditions Precedent.
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Notwithstanding any other provision of this Third Amendment or any of
the other Loan Documents, and without affecting in any manner the rights of
Lenders under the other sections of this Third Amendment, this Third Amendment
shall not be effective as to Lenders unless and until each of the following
conditions has been and continues to be satisfied (the "Third Amendment Closing
Date"):
Documentation. Lenders shall have received, in form and substance satisfactory
to Lenders and their counsel, a duly executed copy of this Third Amendment, the
Term Note, the replacement Notes for each new Lender, and the Loan Documents
required to be executed in connection herewith, together with such additional
documents, instruments, opinions of Borrowers' counsel and certificates as FCC
and its counsel shall require in connection therewith, all in form and substance
satisfactory to Lenders and their counsel.
No Default. No Default or Event of Default shall exist except as previously
disclosed to and consented to by Lenders.
No Litigation. Except as previously disclosed to and consented to by Lender, no
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of the Loan Agreement or this
Third Amendment or the consummation of the transactions contemplated thereby or
hereby.
Amendments to Exhibits. The Exhibits to the Loan Agreement shall have been
amended by Borrowers and attached hereto and the information therein shall be
satisfactory to the Lender.
The Merger has closed and all conditions precedent thereto shall have been
satisfied and not waived.
Acknowledgment of Obligations.
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Each Borrower hereby (1) reaffirms and ratifies all of the promises,
agreements, covenants and obligations to Lenders under or in respect of the Loan
Agreement and other Loan Documents as amended hereby and (2) acknowledges that
it is unconditionally liable for the punctual and full payment of all
Obligations, including, without limitation, all charges, fees, expenses and
costs (including reasonable attorneys' fees and expenses) under the Loan
Documents, as amended hereby, and that it has no defenses, counterclaims or
setoffs with respect to full, complete and timely payment and performance of all
Obligations.
Confirmation of Liens.
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Each Borrower acknowledges, confirms and agrees that the Loan
Documents, as amended hereby, are effective to grant to Agent and to Lenders
duly perfected, valid and enforceable first priority security interests and
liens in the Collateral described therein and that the locations for such
Collateral specified in the Loan Documents have not changed. Each Borrower
further acknowledges and agrees that all Obligations of such Borrower are and
shall be secured by the Collateral.
Miscellaneous.
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Except as set forth herein, the undersigned confirms and agrees that
the Loan Documents remain in full force and effect without amendment or
modification of any kind. Each Borrower hereby acknowledges its obligation to
pay to Lenders' and Agent's reasonable attorneys' fees and costs incurred in
connection with this Third Amendment, as set forth in the Loan Agreement. The
execution and delivery of this Third Amendment by Lenders and Agent shall not be
construed as a waiver by Lenders of any Default or Event of Default under the
Loan Documents. This Third Amendment, together with the Loan Agreement and
other Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior dealings,
correspondence, conversations or communications between the parties with respect
to the subject matter hereof. This Third Amendment and the transactions
hereunder shall be deemed to be consummated in the State of Connecticut and
shall be governed by and interpreted in accordance with the laws of that state.
This Third Amendment and the agreements, instruments and documents entered into
pursuant hereto or in connection herewith shall be "Loan Documents" under and as
defined in the Loan Agreement.
EACH BORROWER HEREBY WAIVES SUCH RIGHTS AS IT MAY HAVE TO NOTICE AND/OR
HEARING UNDER ANY APPLICABLE FEDERAL OR STATE LAWS INCLUDING, WITHOUT
LIMITATION, CONNECTICUT GENERAL STATUTES SECTIONS 52-278A, ET-SEQ., AS AMENDED,
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PERTAINING TO THE EXERCISE BY AGENT AND/OR LENDERS OF SUCH RIGHTS AS THE AGENT
AND/OR LENDERS MAY HAVE INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK
PREJUDGMENT REMEDIES AND/OR DEPRIVE BORROWERS OF OR AFFECT THE USE OF OR
POSSESSION OR ENJOYMENT OF BORROWERS' PROPERTY PRIOR TO THE RENDITION OF A FINAL
JUDGMENT AGAINST A BORROWER. EACH BORROWER FURTHER WAIVES ANY RIGHT IT MAY
HAVE TO REQUIRE AGENT AND/OR LENDERS TO PROVIDE A BOND OR OTHER SECURITY AS A
PRECONDITION TO OR IN CONNECTION WITH ANY PREJUDGMENT REMEDY SOUGHT BY AGENT
AND/OR LENDERS.
Executed under seal on the date set forth above.
ATTEST: UNITED NATURAL FOODS, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: MOUNTAIN PEOPLE'S WAREHOUSE, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: NATURAL RETAIL GROUP, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: NUTRASOURCE, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: RAINBOW NATURAL FOODS, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: STOW XXXXX, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------------ ----------------------------------
Name: Xxxxxx Xxxxxxxx
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Title: CFO
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ATTEST: RB ACQUISITION, L.L.C.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: CFO
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Accepted in Glastonbury, Connecticut
on October 31, 1997
FLEET CAPITAL CORPORATION, as Agent
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Vice President
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FLEET CAPITAL CORPORATION, as Lender
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Vice President
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