EXHIBIT 99.4
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of
October 23, 2002, among United Natural Foods, Inc., a Delaware corporation (the
"Parent"), NEC Acquisition Corp., a Delaware corporation (the "Merger
Subsidiary"), Northeast Cooperatives, a Vermont association ("NEC VT"), and
Northeast Cooperative, Inc., an Ohio association (the "Company").
WITNESSETH:
WHEREAS, the parties have entered into a certain Agreement and Plan of
Merger of even date (the "Original Agreement") providing for the following
transactions: (i) a transaction in which NEC VT merges into the Company, the
purpose of which is to bring NEC VT under the OCL by reincorporation, with the
Company being the surviving entity (the "Ohio Merger"); and (ii) a transaction
in which the Company then merges into the Merger Subsidiary, with the Merger
Subsidiary being the surviving entity; and
WHEREAS, the parties wish to amend and restate the Original Agreement in
its entirety.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto, intending to be legally bound, agree that the
Original Agreement is hereby amended and restated in its entirety and agree as
follows:
ARTICLE 1
THE CLOSING
SECTION 1. 1 Closing. Unless this Agreement shall have been terminated
pursuant to Article 8 hereof, and subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Article 7, the closing of the
Acquisition Merger (the "Closing") will take place on the Closing Date at the
offices of Cameron & Xxxxxxxxx LLP, 00 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxx
Xxxxxx 00000, unless another date, time or place is agreed to in writing by the
Parties.
SECTION 1.2 Deliveries at Closing. Subject to the provisions of Articles 7
and 8, at the Closing there shall be delivered by the Parent and the Company the
opinions, certificates and other documents and instruments required then to be
delivered pursuant to Articles 2 and 7 hereof.
ARTICLE 2
THE ACQUISITION MERGER
SECTION 2.1 Surviving Corporation. In accordance with the provisions of
this Article 2, Section 252 of the DGCL and Section 1729.36 of the OCL, at the
Effective Time, the Company shall be merged with and into the Merger Subsidiary
(the two merging corporations being sometimes collectively referred to herein as
the "Constituent Corporations") and the separate corporate existence of the
Company shall cease (such transaction being hereinafter referred to as the
"Acquisition Merger"). The Merger Subsidiary shall be the surviving corporation
in the Acquisition Merger (hereinafter sometimes referred to as the "Surviving
Corporation") and shall continue its corporate existence under the laws of the
State of Delaware. The name of the Surviving Corporation shall be United
Northeast, Inc. or other name selected by the Parent.
SECTION 2.2 Effective Time: Conditions. If all of the conditions
precedent set forth in Article 8 hereof have been satisfied or waived (to the
extent permitted by law), and this Agreement has not otherwise been terminated
under Article 8 hereof, the appropriate forms of certificates of merger with
respect to the Acquisition Merger shall be prepared by the Parent and the
Company and filed and recorded (a) pursuant to Section 251 of the DGCL with the
Delaware Secretary of State and (b) pursuant to Section 1729.38 of the OCL with
the Ohio Secretary of State (as so filed and recorded, the "Certificates of
Merger"). The Acquisition Merger shall become effective at, and the Effective
Time shall be, the time specified in the Certificates of Merger.
SECTION 2.3 Certificate of Incorporation and By-Laws. The Certificate of
Incorporation and the By-Laws of the Merger Subsidiary as in effect on the
Closing Date shall be the Certificate of Incorporation and the By-Laws of the
Surviving Corporation and shall thereafter continue to be the Surviving
Corporation's Certificate of Incorporation and By-Laws until amended as provided
therein or by applicable law.
SECTION 2.4 Directors and Officers. The directors and officers of the
Surviving Corporation shall be the directors and officers of the Merger
Subsidiary immediately prior to the Effective Time and each such director and
officer shall hold office in accordance with the Certificate of Incorporation
and By-Laws of the Surviving Corporation.
SECTION 2.5 Effect on Outstanding Shares.
A. Company Membership Interests. By virtue of the Acquisition
Merger, automatically and without any action on the part of the holder or owner
thereof, each share of class A common stock issued and outstanding immediately
prior to the Effective Time shall be canceled and converted into the right to
receive the cash payment specified by Schedule 2.5(A) (the "Cash Payment"). The
Cash Payment shall be made in accordance with Section 2.6. Each share of class B
common stock in the Company shall be extinguished.
B. Merger Subsidiary Common Stock. Each share of the Merger
Subsidiary Common Stock issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding and owned by the Parent
("Surviving Corporation Common Stock").
SECTION 2.6 Payment for Membership Interests.
A. After the Effective Time and subject to the terms of this
Agreement, each holder of a certificate (including a certificate issued by NEC
VT prior to the Ohio Merger) representing a share of class A common stock in the
Company which has been canceled and extinguished at the Effective Time pursuant
to Section 2.5(A) shall surrender such certificate to Parent in exchange for a
check representing the Cash Payment to which such holder is entitled pursuant to
Schedule 2.5A together with the transmittal letter substantially in the form of
Exhibit A-1 hereto. Until so surrendered and exchanged, each outstanding
certificate which, prior to the Effective Time, represented a share of class A
common stock in the Company shall be deemed to represent and evidence only the
right to receive the Cash Payment and until such surrender and exchange, no cash
shall be paid to the Members on account of their shares of class A common stock
in the Company.
B. Parent shall not be required to make any Cash Payment to any
Member not surrendering a certificate representing its share of class A common
stock in the Company unless and until such Member provides the Parent with an
affidavit stating that the Member's certificate was lost or destroyed,
substantially in the form of Exhibit A-2 hereto (the "Affidavit"). Upon receipt
of the Affidavit, Parent shall distribute to the relevant Member a check
representing the Cash Payment to which such Member is entitled.
C. Any Member who has not received a certificate evidencing its
share of class A common stock in the Company shall provide the Parent with a
membership interest certification, substantially in the form of Exhibit A-3
hereto (the "Membership Interest Certification"). Upon receipt of a Membership
Interest Certification, the Parent shall distribute to the relevant Member a
check representing the Cash Payment to which such Member is entitled.
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D. No interest shall accrue or be payable with respect to any
amounts which any Member shall be entitled to receive pursuant to Section 2.5(A)
and this Section 2.6.
E. After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of the Membership Interests
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates representing such shares of class A common stock in
the Company are presented to the Surviving Corporation, they shall be canceled
and exchanged for the Cash Payment as provided in this Section 2.6.
F. Promptly after the Effective Time, the Surviving Corporation
shall give written notice thereof to the Members of the Company.
SECTION 2.7 Effect of the Acquisition Merger. The effect of the
Acquisition Merger shall be as set forth in Sections 259, 260 and 261 of the
DGCL and the Merger Subsidiary shall succeed to and possess all the properties,
rights, privileges, immunities, powers, franchises and purposes, and shall be
subject to all the duties, liabilities, debts, obligations, restrictions and
disabilities, of the Company, all without further act or deed.
SECTION 2.8 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Constituent Corporations acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Acquisition Merger or to otherwise carry out this Agreement, the officers and
directors of the Surviving Corporation shall and will be authorized to execute
and deliver, in the name and on behalf of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of the Constituent Corporations, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or to otherwise carry out the purposes and intent of this
Agreement.
ARTICLE 3
ADDITIONAL AGREEMENTS AND BRIDGE LOAN
SECTION 3.1 At Closing, the Merger Subsidiary shall, and the Parent shall
cause the Merger Subsidiary to, pay $1,285,000 on account of the categories of
expenses of the Company listed on Exhibit B.
SECTION 3.2 Bridge Loan. Contemporaneously with the execution of this
Agreement, and subject to the conditions set forth herein, the Parent shall make
a bridge loan facility (the "Bridge Loan") in the amount of Ten Million Dollars
($10,000,000) available to NEC VT, pursuant to and on conditions set forth in
loan agreements, promissory notes and security agreements satisfactory to the
Parent (the "Loan Documents"). Pursuant to the Ohio Merger, the Company shall
succeed to all rights and obligations of NEC VT under the Bridge Loan. Proceeds
of the Bridge Loan shall be used to repay or acquire bank indebtedness of
approximately $5,300,000 (the "Bank Payment"), to pay approximately $3,200,000
of trade accounts payable and the balance to purchase inventory in the ordinary
course of business. The Bridge Loan shall be secured by substantially all of the
assets of NEC VT, excluding the Vermont Facilities and the name "Twin Pines" and
its related logo and goodwill. Following the Ohio Merger, the Company shall
succeed to all of the obligations of NEC VT under the Bridge Loan. In no event
shall the Parent be obligated to advance any funds pursuant to the Bridge Loan
unless and until the Parent shall have received, in form and substance
reasonably acceptable to the Parent (i) such certificates, opinions (with
respect to validity, enforceability and perfection of security interests and
validity and enforceability of the Loan Documents, subject to creditors' rights
and similar exceptions) and other documents satisfactory to it that concurrently
with the Bank Payment and the filing of necessary termination statements or
similar documents, all assets of NEC VT securing the Bridge Loan will be free
and clear of Liens and (ii) the written agreement of NCSC to enter into the
transactions described in Sections 7.1(E) and (F), which agreement shall be in
form and substance reasonably acceptable to the Parent.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Each of NEC VT and the Company, jointly and severally, represents and
warrants to the Parent and the Merger Subsidiary as set forth in this Article 4,
and each agrees that references to the Company contained in this Article 4 shall
include NEC VT, unless the context otherwise expressly requires:
SECTION 4.1 Organization and Business: Power and Authority, Effect of
Transaction.
A. The Company and NEC VT:
(i) are cooperatives duly organized, validly existing and in good
standing under the laws of the States of Ohio and Vermont,
respectively;
(ii) each has all requisite corporate power and authority to own or
hold under lease its properties and to conduct its business as
now conducted and has in full force and effect all
Governmental Authorizations and Private Authorizations and has
made all Governmental Filings, to the extent required for such
ownership and lease of its property and conduct of its
business, except to the extent that the failure to have
obtained any such Governmental Authorization or Private
Authorization or to have made any such Governmental Filing
would not have an Adverse Effect; and
(iii) each has duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each
jurisdiction set forth in Section 4. 1(A)(iii) of the Company
Disclosure Schedule and, except as otherwise set forth in
Section 4.1(A)(iii) of the Company Disclosure Schedule, in
each jurisdiction in which the character of its property or
the nature of its business or operations requires such
qualification or authorization, except to the extent the
failure so to qualify or to maintain such authorizations would
not have an Adverse Effect.
B. The Company has all requisite power and authority (cooperative
and other) and has in full force and effect all Governmental Authorizations and
Private Authorizations in order to enable it to execute and deliver, and to
perform its obligations under, this Agreement and each Collateral Document
executed or required to be executed by it pursuant hereto or thereto and to
consummate the Acquisition Merger and the Transactions, and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed pursuant hereto or thereto have been duly authorized
by all requisite corporate or other action other than the approval of the Ohio
Merger by the Members of NEC VT and the Members of the Company, and the approval
of the Acquisition Merger by the Members of the Company, which are the only
approvals by the Members of NEC VT required in connection with the Transactions
under Applicable Law and the Company's and NEC VT's Organic Documents. This
Agreement has been duly executed and delivered by the Company and constitutes,
and each Collateral Document executed or required to be executed pursuant hereto
or thereto or to consummate the Acquisition Merger and the Transactions, when
executed and delivered by the Company will constitute, legal, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as such enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement, voidable preference, fraudulent
conveyance or other similar laws relating to or affecting the rights of
creditors, and except as the same may be subject to the effect of general
principles of equity.
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C. Except as set forth in Section 4.1(C) of the Company Disclosure
Schedule, neither the execution and delivery of this Agreement or any Collateral
Document executed or required to be executed pursuant hereto or thereto, nor the
consummation of the Acquisition Merger or the Transactions, nor compliance with
the terms, conditions and provisions hereof or thereof by the Company or any of
the other parties hereto or thereto which is Affiliated with the Company:
(1) will materially conflict with, or result in a material breach
or violation of, or constitute a material default under, any
Applicable Law on the part of the Company or will materially
conflict with, or result in a material breach or violation of,
or constitute a material default under, or permit the
acceleration of any obligation or liability in, or but for any
requirement of giving of notice or passage of time or both
would constitute such a material conflict with, material
breach or violation of, or material default under, or permit
any such acceleration in, any Contractual Obligation of the
Company or any Subsidiary,
(2) will result in or permit the creation or imposition of any
Lien (except to the extent set forth in Section 4.1(C) of the
Company Disclosure Schedule) upon any property now owned or
leased by the Company or any such other party, or
(3) will require any Governmental Authorization or Governmental
Filing or Private Authorization on behalf of the Company or
NEC VT, except for approvals of the Members of NEC VT and the
Members of the Company and filing requirements under
Applicable Law in connection with the Ohio Merger, the
Acquisition Merger and the Transactions and except for such
Private Authorizations which the failure to obtain will not
have an Adverse Effect.
SECTION 4.2 Financial and Other Information.
A. The Company has heretofore furnished to the Parent copies of the
audited and unaudited financial statements of the Company listed in Section
4.2(A) of the Company Disclosure Schedule (the "Company Financial Statements").
The Company Financial Statements, including in each case the notes thereto, have
been prepared in accordance with GAAP (except that the unaudited financial
statements may not contain all notes and may not contain prior period
comparative data that are required by GAAP) applied on a consistent basis with
the Company's past practice throughout the periods covered thereby, are true and
correct in all material respects and, fairly and completely present the
financial condition and results of operations of the Company on the bases
therein stated, as of the respective dates thereof, and for the respective
periods covered thereby subject, in the case of unaudited Company Financial
Statements to normal nonmaterial year-end audit adjustments and accruals.
B. Except as set forth in Section 4.2(B) of the Company Disclosure
Schedule, the Company does not own any capital stock or equity or proprietary
interest in any Entity or enterprise, however organized and however such
interest may be denominated or evidenced.
SECTION 4.3 Outstanding Membership Interests. All of the issued and
outstanding Membership Interests of the Members are as set forth in Section 4.3
of the Company Disclosure Schedule. All of such interests have been duly
authorized and validly issued, are (except as set forth in Section 4.3 of the
Company Disclosure Schedule) fully paid and nonassessable and are not subject to
any preemptive or similar rights. Except as contemplated by this Agreement,
there is neither outstanding nor has the Company agreed to grant or issue any
additional equity securities or any Option Security or Convertible Security.
Other than this Agreement as it relates to the Ohio Merger, the Company is not a
party to or is bound by any agreement, put or commitment pursuant to which it is
obligated to purchase, redeem or otherwise acquire any equity securities or any
Option Security or Convertible Security. All of the issued and outstanding
interests of Members have been issued in compliance with applicable Federal and
state securities laws.
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SECTION 4.4 Changes in Condition. Since June 30, 2002, except to the
extent specifically described in Section 4.4 of the Company Disclosure Schedule,
there has been no Adverse Change in the Company. There is no Event known to the
Company which Adversely Affects or may Adversely Affect the Company, or the
ability of the Company to perform any of the obligations set forth in this
Agreement or any Collateral Document execution or required to be executed
pursuant hereto or thereto to the extent set forth in Section 4.4 of the Company
Disclosure Schedule.
SECTION 4.5 Liabilities. Except as set forth in Section 4.5 of the
Company Disclosure Schedule, on the date of the Company Financial Statements the
Company had no obligations or liabilities, present or deferred, accrued or
unaccrued, fixed, absolute, contingent or other, except as disclosed or
otherwise provided for in the Company Financial Statements, and since such date
the Company has not incurred any such obligations or liabilities, other than
obligations and liabilities incurred in the ordinary course of business
consistent with past practice which do not, in the aggregate, Adversely Affect
the Company.
The Company has not Guaranteed and is not otherwise primarily or
secondarily liable in respect of any obligation or liability of any other Person
that is material to the Company, except for endorsements of negotiable
instruments for deposit in the ordinary course of business, consistent with
prior practice, or as disclosed in the most recent balance sheet, or the notes
thereto, forming part of the Company Financial Statements or in Section 4.5 of
the Company Disclosure Schedule.
SECTION 4.6 Title to Properties: Leases.
A. Except as set forth in Section 4.6 of the Company Disclosure
Schedule, the Company has good legal and insurable title, with respect to all
real property owned or leased (in fee simple if owned and leasehold if leased)
and marketable title if owned (in fee simple), if any, reflected as an asset on
the Company Financial Statements, or held by the Company for use in its business
if not so reflected, and good and clear title of all other assets, tangible and
intangible, reflected in the Company Financial Statements, or held by the
Company for use in its business if not so reflected, or purported to have been
acquired by the Company since such date, except inventory sold or depleted, or
property, plant and other equipment used up or retired, since such date, in each
case in the ordinary course of business consistent with past practice of the
Company, free and clear of all Liens, except (x) such as are reflected in the
Company Financial Statements, (y) Liens securing taxes, assessments,
governmental charges or levies, or the claims of materialmen, carriers,
landlords and like persons, which are not yet due or payable or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves are set forth in the most recent Company Financial Statements. Each
Lease or other occupancy or other agreement under which the Company holds real
or personal property has been duly authorized, executed and delivered by the
Company. Each such Lease is a legal and valid obligation of the Company and, to
the Company's knowledge, each other party thereto. The Company has a valid
leasehold interest in and enjoys peaceful and undisturbed possession under all
Leases pursuant to which it holds any real property or tangible personal
property. All of such Leases are valid and subsisting and in full force and
effect; and neither the Company, nor to the knowledge of the Company any other
party thereto, is in default in the performance, observance or fulfillment of
any obligation, covenant or condition contained in any such Lease.
B. Section 4.6(B) of the Company Disclosure Schedule contains a
true, correct and complete description of all real estate owned or leased by the
Company and all Leases and an identification of all material items of fixed
assets and machinery and equipment. The real property (other than land),
fixtures, fixed assets and machinery and equipment of the Company are in a state
of good repair and maintenance and are in good operating condition, reasonable
wear and tear excepted. The Company owns, rents or leases all tangible assets
necessary for the conduct of its business as presently conducted and as
presently proposed to be conducted until the Closing.
C. With respect to each parcel of such real property owned by the
Company, except as set forth in Section 4.6(C) of the Company Disclosure
Schedule:
(i) there are no pending or, to the knowledge of the Company,
threatened condemnation proceedings relating to such parcel,
and there are no pending or, to the knowledge of the Company,
threatened litigation or administrative actions relating to
such parcel or other matters that Adversely Affect the use,
occupancy or value thereof,
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(ii) the buildings and improvements may be used as of right under
applicable zoning and land use laws for the operation of the
business of the Company as now conducted (the "Current Uses")
and such buildings and improvements are located within the
boundary lines of the described parcels of land, are not in
violation of Applicable Laws and do not encroach on any
easement which may burden the land; the land does not serve
any adjoining property for any purpose inconsistent with the
use of the land; and such parcel is not located within any
flood plain or subject to any similar type restriction for
which any permits or licenses necessary to the use thereof
have not been obtained;
(iii) there are no outstanding options or rights of first refusal to
purchase such parcel, or any portion thereof or interest
therein;
(iv) all facilities located on such parcel are supplied with
utilities and other services necessary for the Current Uses of
such facilities, including gas, electricity, water, telephone,
sanitary sewer and storm sewer, all of which services are
adequate for the Current Uses and in accordance with all
Applicable Laws, and are provided via public roads or via
permanent, irrevocable, appurtenant easements benefiting such
parcel;
(v) such parcel abuts on and has direct vehicular access to a
public road or access to a public road via a permanent,
irrevocable, appurtenant easement benefiting such parcel;
(vi) the Company has received no written notice of any proposed or
pending proceeding to change or redefine the zoning
classification of all or any portion of the parcels; and
(vii) each parcel is an independent unit which does not rely on any
facilities (other than the facilities of public utility and
water companies) located on any other property (a) to fulfill
any zoning, building code or other municipal or governmental
requirement, (b) for structural support or the furnishing of
any essential building systems or utilities, including, but
not limited to electric, plumbing, mechanical, heating,
ventilating, and air conditioning systems, or (c) to fulfill
the requirements of any lease. No building or other
improvement not included in the parcels relies on any part of
the parcels to fulfill any requirement of Applicable Laws or
for structural support or the furnishing of any essential
building systems or utilities. Each of the parcels is assessed
by local property assessors as a tax parcel or parcels
separate from all other tax parcels.
D. With respect to each Lease, except as set forth in Section 4.6(D)
of the Company Disclosure Schedule:
(1) there are no disputes, oral agreements or forbearance programs
in effect as to any Lease;
(2) all facilities occupied under each Lease are supplied with
utilities and other services necessary for the Current Uses of
said facilities; and
(3) no Event has occurred which, with notice or lapse of time,
would constitute a breach or default by the Company, or to the
Company's knowledge, any other party or permit termination,
modification or acceleration of any Lease.
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SECTION 4.7 Inventory. The inventory of the Company is in good and
merchantable condition, and in reasonably useable or saleable condition in the
ordinary course of business, except for obsolete or defective materials and any
excess stock items which alone and in the aggregate are not material. Such
inventory does not include any material amounts of any item that was at any
prior time written off or written down by the Company. Except as set forth in
Section 4.7 of the Company Disclosure Schedule, the present quantities of all
inventory are reasonable in the present circumstances of the business of the
Company. Except as set forth in Section 4.7 of the Company Disclosure Schedule,
there is no condition which currently Adversely Affects the supply of materials
or inventory available to the Company.
SECTION 4.8 Accounts and Notes Receivable. All accounts and notes
receivable reflected on the Company Financial Statements and all accounts and
notes receivable arising subsequent to the issuance of the Company Financial
Statements have arisen in the ordinary course of business, represent valid
obligations to the Company, and have been collected or will be collected in the
aggregate amounts thereof recorded on the books of the Company, in each case net
of the reserve for bad debts reflected on the Company Financial Statements,
assuming that such accounts and notes receivable are collected in a manner
consistent with past practice.
SECTION 4.9 Compliance with Private Authorizations. Section 4.9 of the
Company Disclosure Schedule sets forth a true, correct and complete list and
description of each Private Authorization which individually is material to the
Company, all of which are in full force and effect. The Company has obtained all
Private Authorizations which are necessary for the ownership by the Company of
its properties and the conduct of its business as now conducted. The Company is
not in breach or violation of, or is not in default in the performance,
observance or fulfillment of, any Private Authorization. No Private
Authorization is the subject of any pending or, to the Company's knowledge,
threatened attack, revocation or termination.
SECTION 4.10 Compliance With Governmental Authorizations and Applicable
Law.
A. Section 4.10(A) of the Company Disclosure Schedule contains a
description of:
(1) all Legal Actions which are pending or, to the Company's
knowledge, threatened or contemplated, against or relating to,
the Company or the business, operations or properties, or
officers or directors of the Company in connection therewith;
and
(2) each Governmental Authorization to which the Company is
subject and which relates to the business, operations,
properties, prospects, condition (financial or other), or
results of operations of the Company, all of which are in full
force and effect.
B. The Company has obtained all Governmental Authorizations which
are necessary for the ownership or Current Uses of its properties and the
conduct of its business as now conducted or as presently proposed to be
conducted or which, if not obtained and maintained , could singly or in the
aggregate, have an Adverse Effect on the Company, except as otherwise described
in Section 4.10(B) of the Company Disclosure Schedule. No Governmental
Authorization is the subject of any pending or, to the Company's knowledge,
threatened attack, revocation or termination. The Company is not or at any time
since January 1, 1998 has been, or is or has during such time been charged with,
or to the Company's knowledge, is threatened or under investigation with respect
to any material breach or violation of, or default in the performance,
observance or fulfillment of any Governmental Authorization or any Applicable
Law, except for such breaches, violations or defaults as do not have in the
aggregate an Adverse Effect on the Company or the ability of the Company to
perform any of the obligations set forth in this Agreement or any Collateral
Document executed or required to be executed pursuant hereto or thereto, or to
consummate the Acquisition Merger and the Transaction.
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C. Except as set forth in Section 4.10(C) of the Company Disclosure
Schedule, the Company, and the conduct and operations of its businesses, are in
compliance with all Applicable Laws which (i) affect or relate to this Agreement
or the Transactions or (ii) are applicable to the Company or its business,
except for any violation of, or default under, any Applicable Law which would
not have an Adverse Effect on the assets, business, financial condition, results
of operations or future prospects of the Company. The Company has not violated
in any material respect and is in material compliance with all Applicable Law
relating to packaging, labeling, storage and sale of food and beverage products.
SECTION 4.11 Intangible Assets. Section 4.11 of the Company Disclosure
Schedule sets forth a true, correct and complete description of all Intangible
Assets or rights with respect thereto, that are necessary for the present
conduct of the Company's business. The Company owns or possesses or, has the
right under all necessary Governmental Authorizations to use all Intangible
Assets necessary for the conduct of its business as currently conducted, free
and clear of all Liens and without any conflict with the rights of others.
Except as otherwise described in Section 4.11 of the Company Disclosure
Schedule, no Intangible Asset necessary for the conduct of its business as
presently conducted has been or is now involved in any opposition, invalidation,
or cancellation, and the Company has received no notice of any claim that, or
has reason to believe that there exists any claim that, any Intangible Asset
which is a trademark, trade name or service xxxx infringes any trade name,
copyright, trademark or service xxxx of any third party.
SECTION 4.12 Related Transactions. Section 4.12 of the Company Disclosure
Schedule sets forth a true, correct and complete description of any Contractual
Obligation or transaction which is in effect as of the date hereof or which
arose or occurred since July 1, 2000 between the Company and any of its members,
officers, directors, employees, stockholders or any Affiliate of any thereof,
including without limitation any providing for the furnishing of services to or
by, providing for rental of property, real, personal or mixed, to or from, or
providing for the lending or borrowing of money to or from or otherwise
requiring payments to or from, any Member, officer, director, employee or
stockholder, or any Affiliate of any thereof, excluding Contractual Obligations
and transactions arising in the ordinary course of business consistent with past
practices.
SECTION 4.13 Insurance. Section 4.13 of the Company Disclosure Schedule
lists all insurance policies maintained by the Company and includes the
insurers' names, policy numbers, expiration dates, risks insured against,
amounts of coverage, annual premiums, exclusions, deductibles and self-insured
retention and describes in reasonable detail any retrospective rating plan,
fronting arrangement or any other self-insurance or risk assumption agreed to by
the Company or imposed upon the Company by any such insurers, as well as any
self-insurance program that is in effect. The Company is not in breach or
violation of or in default under any such policy, and all premiums due thereon
have been paid. The Company has not received any written notice from the insurer
disclaiming coverage or reserving rights with respect to a particular pending
claim or such policy in general. The Company has not incurred any loss, damage,
expense or liability covered by any such insurance policy for which it has not
properly asserted a claim under such policy.
SECTION 4.14 Tax Matters.
A. The Company has in accordance with all Applicable Laws filed all
Tax Returns which are required to be filed, and has paid, or made adequate
provision for the payment of, all Taxes which have or may become due and payable
pursuant to said Returns and all other governmental charges and assessments
received to date. All Taxes which the Company is required by law to withhold and
collect have been duly withheld and collected, and have been paid over, in a
timely manner, to the proper Authorities to the extent due and payable. The
Company has not executed any waiver to extend, or otherwise taken or failed to
take any action that would have the effect of extending, the applicable statute
of limitations in respect of any Tax liabilities of the Company for the fiscal
years prior to and including the most recent fiscal year. Except as set forth in
Section 4.14 (A) of the Company Disclosure Schedule, adequate provision has been
made on the most recent balance sheet forming part of the Company Financial
Statements for all Taxes of any kind, including interest and penalties in
respect thereof, whether disputed or not, and whether past, current or deferred,
accrued or unaccrued, fixed, contingent, absolute or other.
9
B. Except as set forth in Section 4.14(B) of the Company Disclosure
Schedule, since June 30, 2002, the Company has not made any payment on account
of any Taxes except regular payments required in the ordinary course of
business, consistent with prior practice, with respect to current operations or
property presently owned.
C. The information shown on the Federal Income Tax Returns of the
Company (true, correct and complete copies of which have been furnished by the
Company to the Parent) is true, correct and complete and fairly and accurately
reflects the information purported to be shown thereon. No Federal and state
income Tax Returns of the Company have been examined by the IRS or applicable
state Authority through the taxable periods set forth in Section 4.14(C) of the
Company Disclosure Schedule, and the Company has not been notified regarding any
pending examination, except as shown in Section 4.14(C) of the Company
Disclosure Schedule.
D. Except as set forth in Section 4.14(D) of the Company Disclosure
Schedule, there is no material dispute or claim concerning any Tax liability of
the Company or NEC VT either (i) claimed or raised by any Taxing Authority in
writing, including the IRS, or (ii) as to which any of the Company or NEC VT or
its respective directors and officers has knowledge based upon personal contact
with any agent of such Taxing Authority.
E. NEC VT is and the Company will be qualified to be taxed as a
corporation operating on a cooperative basis under Section 1381(a)(2) of the
Code.
F. Neither the Company nor NEC VT has undergone an ownership change
that would limit its net operating losses under Section 382 of the Code.
G. Neither the Company nor NEC VT is a party to any agreement,
contract arrangement or plan or could reasonably be expected to result,
individually or in the aggregate, in the payment of excess parachute payments
within the meaning of Section 280G of the Code.
H. Any patronage dividends have been paid in cash or by means of
qualified written notices of allocation, as defined in Section 1388 of the Code.
I. Neither the Company nor NEC VT has allocated any patronage losses
to its Members.
SECTION 4.15 Employee Retirement Income Security Act of 1974.
A. The Company does not contribute to any Plan or sponsor any Plan
or Benefit Arrangement and has not contributed to or sponsored any Plan or
Benefit Arrangement, except as set forth in Section 4.15(A) of the Company
Disclosure Schedule. As to all Plans and Benefit Arrangements listed in Section
4.15(A) of the Company Disclosure Schedule, and except as disclosed in such
Section 4.15(A) of the Company Disclosure Schedule:
(1) all Plans and Benefit. Arrangements comply and have been
administered in all material respects in form and in operation
with all Applicable Laws, and the Company has not received any
outstanding notice from any Authority questioning or
challenging such compliance;
(2) all Plans maintained or previously maintained by the Company
that are or were intended to comply with Section 401 of the
Code comply and complied in form and in operation with all
applicable requirements of such Section, and no event has
occurred which will or could reasonably be expected to give
rise to disqualification of any such Plan under such Section;
(3) none of the assets of any Plan are invested in employer
securities or employer real property;
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(4) there are no "prohibited transactions" (as described in
Section 406 of ERISA or Section 4975 of the Code) with respect
to any Plan for which the Company has any liability;
(5) there are no Claims (other than routine claims for benefits)
pending or threatened involving Plans or the assets of Plans;
(6) the Company has not maintained any Plan that is subject to
Title IV of ERISA;
(7) to the extent that the most recent balance sheet forming part
of the Company Financial Statements does not include a pro
rata amount of the contributions which would otherwise have
been made in accordance with past practices for the Plan years
which include the Closing Date, such amounts are set forth in
Section 4.15(A) of the Company Disclosure Schedule;
(8) neither the Company nor any of its respective Members,
directors, officers, employees or any other fiduciary has
committed any breach of fiduciary responsibility imposed by
ERISA that would, directly or indirectly, subject the Company
to any material liability under ERISA; and
(9) except as set forth in Section 4.15(A) of the Company
Disclosure Schedule and pursuant to the provisions of COBRA,
the Company does not maintain any Plan that provides benefits
described in Section 3(1) of ERISA to any former employees or
retirees of the Company;
B. The Company is not nor has ever been a party to any Multiemployer
Plan or made contributions to any such plan.
SECTION 4.16 Employment Arrangements.
A. The Company has no obligation or liability, contingent or other,
under any Employment Arrangement (whether or not listed in Section 4.15(A) of
the Company Disclosure Schedule), other than those listed or described in
Section 4.16(A) of the Company Disclosure Schedule. The Company is not now nor
during the past three (3) years has been subject to or involved in or, to the
Company's knowledge, threatened with any union elections, petitions therefor or
other organizational activities, except as described in Section 4.16(A) of the
Company Disclosure Schedule. None of the employees of the Company is represented
by any labor union or other employee collective bargaining organization and
there are no pending grievances, disputes or controversies with any union or any
other employee collective bargaining organization of such employees.
B. Except as set forth in Section 4.16(B) of the Company Disclosure
Schedule, no employee shall accrue or receive additional benefits, service or
accelerated rights to payments of benefits under any Employment Arrangement,
including the right to receive any parachute payment, as defined in Section 280G
of the Code, or become entitled to severance, termination allowance or similar
payments as a direct result of this Agreement, the Acquisition Merger or the
Transactions.
SECTION 4.17 Material Agreements. Listed on Section 4.17 of the Company
Disclosure Schedule are all Material Agreements or to which the Company is a
party or to which it or any of its property is subject or bound. True, complete
and correct copies of each of the Material Agreements have been furnished by the
Company to the Parent (or, if oral, true, complete and correct descriptions
thereof have been set forth in Section 4.17 of the Company Disclosure Schedule).
All of the Material Agreements are valid and binding and obligations enforceable
against the Company and, to the Company's knowledge are valid and binding
obligations enforceable against, the other parties thereto (except, in each
case, as such enforceability may be subject to bankruptcy, moratorium,
insolvency, reorganization, arrangement, voidable preference, fraudulent
conveyance and other similar laws relating to or affecting the rights of
11
creditors and except as the same may be subject to the effect of general
principles of equity). Except as disclosed in Section 4.17 of the Company
Disclosure Schedule: (i) the Company is not in default in the payment or
performance of any of its obligations under any Material Agreement; (ii) no
Event which, with the giving of notice or the passage of time, or both would
constitute an event of default by the Company under any Material Agreement has
occurred and is continuing; and (iii) to the knowledge of the Company, no other
party to any Material Agreement is in default in any material respect in the
payment or performance of its obligations thereunder and no Event which, with
the giving of notice or the passage of time, or both would constitute a material
event of default by such other party under any Material Agreement has occurred
and is continuing.
SECTION 4.18 Ordinary Course of Business.
A. Since June 30, 2002, except as may be described on Section
4.18(A) of the Company Disclosure Schedule or as may expressly be required or
permitted by the terms of this Agreement, NEC VT, prior to the Ohio Merger, and
the Company, subsequent to the Ohio Merger, has operated, its business in the
normal, usual and customary manner in the ordinary course of business,
consistent with prior practice, and in connection therewith, except in the
ordinary course of business consistent with prior practices has not:
(1) sold or otherwise disposed of, or contracted to sell or
otherwise dispose of, any of its properties or assets;
(2) incurred any obligations or liabilities (fixed, contingent or
other);
(3) entered into any Material Commitment;
(4) canceled any debts or claims;
(5) made or committed to make any additions to its property or any
purchases of machinery or equipment;
(6) discharged or satisfied any Lien (other than discharges or
mortgages with respect to the Vermont Facilities) and has not
paid any obligation or liability (absolute or contingent)
other than current liabilities or obligations under contracts
then existing or thereafter entered into, and commitments
under Leases existing on that date or incurred since that
date; or created or permitted to be created, any Lien on any
of its tangible property;
(7) transferred any Intangible Assets or created, or permitted to
be created, any Lien on any Intangible Assets;
(8) increased the compensation payable or to become payable to any
of its directors, officers, employees, advisers, consultants,
salesmen or agents or otherwise altered, modified or changed
the terms of their employment or engagement;
(9) suffered any material damage, destruction or loss (whether or
not covered by insurance) or any acquisition or taking of
property by any Authority;
(10) waived any rights of material value without fair and adequate
consideration;
(11) experienced any work stoppage;
(12) entered into, amended or terminated any Lease, Governmental
Authorization, Private Authorization, Material Agreement or
Employment Arrangement or any Contractual Obligation or
transaction with any Affiliate;
12
(13) amended or terminated and has kept in full force and effect
including without limitation renewing to the extent the same
would otherwise expire or terminate, all insurance policies
and coverage;
(14) entered into any other transaction or series of related
transactions which individually or in the aggregate is
material to the Company;
(15) incurred any Indebtedness owing to any Member and has not made
and will not make any loans or advances to any Member;
(16) split, combined or reclassified any of the Company's equity or
issued or authorized the issuance of any securities in respect
of, in lieu of or in substitution of any of the Company's
equity or made any Distribution with respect thereto;
(17) amended any of its Organic Documents; or
(18) changed any method of accounting or accounting practice or
policy, except as required by Applicable Law or by GAAP.
B. Since June 30, 2002, NEC VT has exercised its best commercially
reasonable efforts to continue to service its Buying Club and Retail Members in
a manner consistent with past practices.
SECTION 4.19 Broker or Finder. Other than Nature's Equity, Inc., which
acted as the financial adviser to the Company, no Person assisted in or brought
about the negotiation of this Agreement, the Acquisition Merger or the subject
matter of the Transactions in the capacity of broker, agent or finder or in any
similar capacity on behalf of the Company.
SECTION 4.20 Environmental Matters. Except as set forth in Section 4.20 of
the Company Disclosure Schedule:
A. The Company has not installed or constructed any, and to the
Company's knowledge there are no, underground storage tanks installed or
constructed by any other Person, under any property that the Company or any
predecessor Entity has at any time within the last ten (10) years owned,
occupied or leased. As of the date hereof, except for Permitted Materials
stored, used and disposed of in accordance with Applicable Laws, no material
amount of any substance that has been designated by any federal, state or local
governmental agency, board or authority (a "Governmental Entity") or by
applicable federal state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCB's, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation Recovery Act of 1976,
as amended, and the regulations promulgated pursuant to said laws, (a "Hazardous
Material"), are present, as a result of the actions of the Company or to the
knowledge of the Company any actions of any third party or otherwise, in, on or
under any property, including the land and the improvements, ground water and
surface water, that the Company or any predecessor Entity has within the last
ten (10) years owned, operated, occupied or. leased. The Company is not aware of
the occurrence of any Event which could involve the Company in any environmental
litigation or impose upon the Company any environmental liabilities which would
have an Adverse Effect on the Company.
B. At no time has the Company or any predecessor Entity transported,
stored, used, manufactured, disposed of, released or exposed its employees or
others to Hazardous Materials in violation of any Applicable Law, nor has the
Company or any predecessor Entity disposed of, transported, sold, or
manufactured any product containing a Hazardous Material (collectively,
"Hazardous Materials Activities") in violation of any Applicable Law, which such
violation would have an Adverse Effect on the Company.
13
C. The Company currently holds all environmental approvals, permits,
licenses, clearances and consents (the "Environmental Permits") necessary for
the conduct of its Hazardous Material Activities and other businesses as such
activities and business are currently being conducted, the absence of which
would have an Adverse Effect on the Company.
D. No action, proceeding, revocation proceeding, amendment
procedure, writ injunction or claim is pending or, to the knowledge of the
Company, threatened concerning any Environmental Permit or any Hazardous
Materials Activity of the Company.
E. No environmental site assessment has been conducted by or on
behalf of the Company at any property owned or leased by the Company.
SECTION 4.21 Powers of Attorney. Except as set forth in Section 4.21 of
the Company Disclosure Schedule, there are no outstanding powers of attorney
executed on behalf of the Company.
SECTION 4.22 Books and Records. The minute books and other similar records
of the Company contain true and complete records of all actions taken at any
meetings of the Company's Members, board of directors, and any committee thereof
and of all written consents executed in lieu of the holding of any such meeting.
SECTION 4.23 Customers and Suppliers. Sections 4.23 of the Company
Disclosure Schedule sets forth a list of (a) each customer that accounted for
more than 1% of the consolidated revenues of the Company during the fiscal year
ended June 30, 2002 and the amount of revenues accounted for by such customer
during such period, (b) the 50 largest suppliers of the Company, taken as a
whole, based on dollar values of purchases during the fiscal year ended June 30,
2002 and (c) any material changes to such lists.
SECTION 4.24 Officers and Directors. Section 4.24 of the Company
Disclosure Schedule sets forth a true and complete list of all officers and
directors of the Company.
SECTION 4.25 Bank Accounts. Section 4.25 of the Company Disclosure
Schedule sets forth all checking accounts, savings accounts, custodial accounts,
certificates of deposit, safe deposit boxes or other similar accounts maintained
by the Company, together with the name of each person with signature authority
for each such account.
SECTION 4.26 Appraisal, etc. Rights. No Member or other holder of any
shares of capital stock of NEC VT or the Company will be entitled to exercise
any statutory appraisal, dissenter's or similar rights to have the value of such
shares determined by judicial or similar proceeding or to receive any payment on
account of such shares except as expressly provided in this Agreement, in
connection with either the Ohio Merger or the Acquisition Merger.
SECTION 4.27 Disclosure. The representations, warranties and statements by
the Company contained in this Agreement, the Exhibits hereto and, the Company
Disclosure Schedule, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary, in light of the
circumstances under which they were made, in order to make the statements herein
or therein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE MERGER SUBSIDIARY
Each of the Parent and the Merger Subsidiary jointly and severally,
represents and warrants, to the Company and NEC VT as follows:
SECTION 5.1 Organization and Business: Power and Authority: Effect of
Transaction.
14
A. Each of the Parent and the Merger Subsidiary:
(i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware; and
(ii) has all requisite corporate power and authority to own or hold
under lease Its properties and to conduct its business as now
conducted and has in full force and effect all Governmental
Authorizations and Private Authorizations and has made all
Governmental Filings, to the extent required for such
ownership and lease of its property and conduct of its
business, except to the extent that the failure to have
obtained any such Governmental Authorization or Private
Authorization or to have made any such Governmental Filing
would not have an Adverse Effect.
B. Each of the Parent and the Merger Subsidiary has all requisite
corporate power and authority and has in full force and effect all Governmental
Authorizations and Private Authorizations in order to enable it to execute and
deliver, and to perform its obligations under, this Agreement and each
Collateral Document executed or required to be executed by it pursuant hereto or
thereto and to consummate the Acquisition Merger and the Transactions, and the
execution, delivery and performance of this Agreement and each Collateral
Document executed or required to be executed pursuant hereto or thereto have
been duly authorized by all requisite corporate or other action. This Agreement
has been duly executed and delivered by the Parent and the Merger Subsidiary and
constitutes, and each Collateral Document executed or required to be executed
pursuant hereto or thereto or to consummate the Acquisition Merger and the
Transactions, when executed and delivered by the Company will constitute, legal,
valid and binding obligations of the Parent and the Subsidiary, enforceable in
accordance with their respective terms, except as such enforceability may be
subject to bankruptcy, moratorium, insolvency, reorganization, arrangement,
voidable preference, fraudulent conveyance or other similar laws relating to or
affecting the rights of creditors, and except as the same may be subject to the
effect of general principles of equity.
C. Except as set forth in Section 5.1(C) of the Parent Disclosure
Schedule, neither the execution and delivery of this Agreement or any Collateral
Document executed or required to be executed pursuant hereto or thereto, nor the
consummation of the Acquisition Merger or the Transactions, nor compliance with
the terms, conditions and provisions hereof or thereof by the Parent, the Merger
Subsidiary or any of the other parties hereto or thereto which is Affiliated
with the Parent or the Merger Subsidiary:
(i) subject to necessary approvals by the Parent's lenders, will
materially conflict with, or result in a material breach or
violation of, or constitute a material default under, any
Applicable Law on the part of the Parent or any Subsidiary or
will materially conflict with, or result in a material breach
or violation of, or constitute a material default under, or
permit the acceleration of any obligation or liability in, or
but for any requirement of giving of notice or passage of time
or both would constitute such a material conflict with,
material breach or violation of, or material default under, or
permit any such acceleration in, any Contractual Obligation of
the Parent or any Subsidiary,
(ii) will result in or permit the creation or imposition of any
Lien upon any property now owned or leased by the Parent or
any such other party, or
(iii) will require any Governmental Authorization or Governmental
Filing or Private Authorization on behalf of the Parent or the
Merger Subsidiary except for filing requirements under
Applicable Law in connection with the Acquisition Merger and
the Transactions and except for such Private Authorizations
which the failure to obtain will not have an Adverse Effect.
15
SECTION 5.2 Merger Subsidiary. All of the outstanding capital stock of
Merger Subsidiary is owned by Parent free and clear of any Lien, claim or
encumbrance or any agreement with respect thereto, except Liens in favor of the
Parent's lenders. Since the date of its incorporation, Merger Subsidiary has not
engaged in any activity of any nature except in connection with or as
contemplated by this Agreement and the Transactions.
SECTION 5.3 SEC Filings; Financial Statement.
A. The Parent has filed all forms, reports, schedules, statements
and other documents required to be filed by it during the twelve months
immediately preceding the date of this Agreement (collectively, as supplemented
and amended since the time of filing, the "Parent SEC Reports") with the SEC.
The Parent SEC Reports (i) were prepared in all material respects in accordance
with all applicable requirements of the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, as applicable, and (ii) did
not, at the time they were filed, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The representation in clause (ii) of
the preceding sentence does not apply to any misstatement or omission in any
Parent SEC Report which was superseded by subsequent Parent SEC Reports.
B. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Parent and its consolidated
Subsidiaries included or incorporated by reference in the Parent SEC Reports
have been prepared in accordance with GAAP consistently applied during the
periods indicated (except as may otherwise be indicated in the notes), are true
and correct in all material respects, and fairly and completely present the
financial position, results of operations and cash flows of the Parent and its
consolidated Subsidiaries on a consolidated basis at the respective dates and
for the respective periods indicated (except interim financial statements may
not contain all notes and are subject to year-end adjustments).
SECTION 5.4 Disclosure. This Agreement, the exhibits hereto, and the
Parent SEC Reports, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary, in light of the
circumstances under which they were made, in order to make the statements herein
or therein not misleading.
ARTICLE 6
ADDITIONAL COVENANTS
SECTION 6.1 Confidentiality; Access to Information.
A. All information, including formulas, patterns, compilations,
programs, devices, methods, techniques or processes, know-how, trade secrets,
proprietary information, financial information, employment information or other
information furnished by the Parent or the Merger Subsidiary to NEC VT or the
Company or by NEC VT or the Company to the Parent or the Merger Subsidiary or by
or to their respective Representatives pursuant to or in connection with this
Agreement shall be treated as the sole property of the party providing the same.
The party disclosing Confidential Information and its Representatives are
referred to as the "Disclosing Party" and the party receiving Confidential
Information and its Representatives are referred to as the "Recipient". If this
Agreement is terminated for any reason, the Recipient shall, or shall cause its
Representatives to, return to the Disclosing Party all documents or other
materials contained Confidential Information furnished by the Disclosing Party
within ten days of the Termination Date. The Recipient shall, and shall cause
its Representatives to, keep confidential all of such information, and shall not
directly or indirectly use such information for any competitive or other
commercial purpose. The obligation to keep such information confidential shall
continue for two (2) years from the signing of this Agreement. The Recipient
shall not have any obligation to treat as confidential (or cause its
Representatives to treat as confidential) information which the Recipient can
demonstrate was already properly in its or any of its employees' possession
prior to the disclosure of such information by the Disclosing Party or its
16
Representatives, was then generally known or available to the public, or
thereafter becomes known or available to the public through no intentional
wrongdoing on the part of the Recipient or its Representatives or was disclosed
to the Recipient by a third party bound by no obligation of confidentiality to
the Disclosing Party.
B. In the event that the Recipient becomes legally compelled to
disclose all or any portion of the Confidential Information, the Recipient will,
or shall cause its Representative to, provide the Disclosing Party with prompt
notice thereof, so that the Disclosing Party may seek a protective order or
other appropriate remedy. In the event that such protective order or other
remedy is not obtained, the Recipient or its Representatives will furnish only
that portion of the Confidential Information that is legally required and the
Recipient will, or shall cause its Representative to, exercise commercially
reasonable efforts to obtain reliable assurance that confidential treatment will
be afforded such portion of the Confidential Information.
C. The Company will afford to the Parent and the Parent's
Representatives full access during normal business hours throughout the period
prior to the Closing Date to all of its properties, books, contracts,
commitments and records (including without limitation Tax Returns) and, during
such period shall furnish promptly upon request all information relating to the
Company, that the Parent or any Representatives reasonably requires.
D. No investigation pursuant to this Section 6.1 shall affect any
representation or warranty in which Agreement of any Party hereto or any
condition to the obligations of the Parties hereto.
SECTION 6.2 Notification of Certain Matters. The Company shall give prompt
notice to the Parent, and the Parent shall give prompt notice to the Company, of
the occurrence or non-occurrence of any Event the occurrence or non-occurrence
of which would be likely to cause (i) any representation or warranty of the
Company or the Parent, as the case may be, contained in this Agreement to be
untrue or inaccurate in any material respect,(ii) in the case of the Company,
any material change to be made in the Company Disclosure Schedule and or (iii)
any failure of the Company or the Parent, as the case may be, to comply with or
satisfy, or be able to comply with or satisfy, any material covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the deliver of any notice pursuant to this Section 6.2 shall not
limit or otherwise affect the liability of any Party giving such notice or the
remedies available hereunder to the Party receiving such notice.
SECTION 6.3 Public Announcements. Until the Closing, or in the event of
termination of this Agreement, neither the Company on the one hand, nor the
Parent on the other hand, shall, without the consent of the other, issue any
press release or otherwise make any public statement with respect to this
Agreement, the Acquisition Merger or any Transaction (including the termination
of this Agreement in such event). The Company acknowledges and agrees that the
Parent may, without its prior consent, issue such press release or make such
public statement as may be required by Applicable Law or any listing agreement
or arrangement to which the Parent is a party with a national securities
exchange or the National Association of Securities Dealers, Inc. Automated
Quotation System, or as advised by outside counsel. Each party will furnish the
other with a copy of any press release or other public disclosure prior to its
publication and will furnish a copy of any press release or other public
disclosure so issued as soon as practicable after its publication.
Notwithstanding the foregoing, NEC VT may send appropriate disclosure materials
to its members in connection with the Ohio Merger.
SECTION 6.4 No Solicitation. Neither the Company nor any director or
officer of the Company shall, without the written consent of the Parent during
the period commencing on the date hereof and ending with the earlier to occur of
the Closing or the termination of this Agreement in accordance with its terms,
directly or indirectly invite any inquiries of or solicit proposals from, or
enter into or continue any discussions or negotiations with, or accept or incur
commitments relating to any merger, consolidation or other business combination
of the Company with, or relating to the acquisition of any of its voting
17
securities by, or relating to the direct or indirect disposition of any
operating assets of the Company (other than dispositions of assets in the
ordinary course of business of the Company) to, any Person except the Parent and
the Merger Subsidiary. In addition, during the period encompassed by the
preceding sentence, the Company shall not furnish or cause to be furnished any
information concerning its business, properties or operations to any Person,
other than the Parent, the Merger Subsidiary or the Company's lending
institutions, known to management to have any interest in any such combination,
acquisition or disposition.
SECTION 6.5 Environmental Inspections.
A. Prior to the Closing, the Parent, at its expense, shall have the
right to conduct environmental and other tests, audits, studies and assessments
of the real property owned by the Company and the buildings and improvements
thereon, and to review such records and documents as may be required by the
Parent to enable it to evaluate the condition of and potential liabilities
affecting such property.
B. If, in the course of the Parent's tests, audits, studies,
assessments and review pursuant to subsection (A) above, the parent shall
determine that any of the Company's representations and warranties set forth in
Section 4.20 are untrue and such misrepresentations, individually or in the
aggregate, could reasonably be expected to have an Adverse Effect, the Parent
may, in its sole discretion, by written notice to the Company made as soon as
practicable following the Parent's discovery of such misrepresentations and in
any event not later than thirty (30) days prior to the Termination Date, request
that Company irrevocably commit either (i) to take (at its sole cost and
expense), all action necessary in accordance with Applicable Law to cure such
misrepresentations or (ii) to indemnify and hold harmless all Parent Indemnified
Parties from all Claims incurred by any Parent Indemnified Party in connection
with any action taken by the Parent or the Surviving Corporation or their
respective agents, representatives, contractors, consultants or employees that
is necessary under Applicable Law in order to cause the Event giving rise to
such misrepresentations to be promptly satisfied, discharged or terminated.
SECTION 6.6 Outstanding Membership Interests. Except as contemplated by
this Agreement, between the date hereof and the Closing, the Company will not
issue, sell or purchase or agree to issue, sell or purchase any equity
securities or any Option Security or Convertible Security of the Company other
than pursuant to the Ohio Merger.
SECTION 6.7 Ordinary Course of Business.
A. From the date hereof until the Closing Date, without the Parent's
prior written consent or as may be required or permitted by the terms of this
Agreement, NEC TV (prior to the Ohio Merger) and the Company (after the Ohio
Merger) will operate its business in the normal, usual and customary manner in
the ordinary course of business, consistent with prior practice, and in
connection therewith, except in the ordinary course of business consistent with
prior practices, will not:
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(1) sell or otherwise dispose of or contract to sell any of its
properties or assets, except for (a) the transactions contemplated by Section
7.1(E) and (b) the disposition of the name "Twin Pines" and its related logo and
goodwill;
(2) incur any obligations or liabilities (fixed, contingent or
other);
(3) enter into any Material Commitments;
(4) cancel any debts or claims;
(5) make or commit to make any additions to its property or any
purchases of machinery or equipment;
(6) discharge or satisfy any Lien (other than discharges of
mortgages with respect to the Vermont Facilities) or pay any obligation or
liability (absolute or contingent) other than current liabilities or obligations
(other than in connection with the transactions contemplated by Section 7.1(E))
under contracts now existing or hereafter entered into and commitments under
Leases existing on the date hereof or incurred after that date; or create or
permit to be created any Lien on any of its tangible property;
(7) transfer or create, or permit to be created, any Lien on any
Intangible Assets;
(8) except with the prior agreement of the Parent in the case of
directors and officers, increase the compensation payable or to become payable
to any of its directors, officers, employees, advisers, consultants, salesmen or
agents or otherwise alter, modify or change the terms of their employment or
engagement;
(9) waive any rights of material value without fair and adequate
consideration;
(10) enter into, amend or terminate any Lease, Governmental
Authorization, Private Authorization, Material Agreement or Employment
Arrangement or any Contractual Obligation (other than in connection with the
transactions contemplated by Section 7.1(E));
(11) amend or terminate, and will keep in full force and effect
including without limitation renewing to the extent the same would otherwise
expire or terminate, all insurance policies and coverage;
(12) enter into any other transaction or series of related
transactions which individually or in the aggregate is material to the Company;
(13) incur any Indebtedness owning to any Member or make any loans
or advances to any Member;
(14) split, combine or reclassify any of the Company's equity or
issue or authorize the issuance of any securities in respect of, in lieu of or
in substitution of any of the Company's equity;
(15) amend any of its Organic Documents;
(16) change any method of accounting or accounting practice or
policy, except as required by Applicable Law or by GAAP; or
(17) take or refrain from taking any action which would cause any
representation or warranty set forth in this Agreement to be false or
inaccurate.
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B. From the date hereof through the Closing Date NEC VT, prior to
the Ohio Merger, and the Company, subsequent to the Ohio Merger, will exercise
reasonable efforts to continue to service the Buying Club and Retail Members in
a manner consistent with past practices.
C. The Company and NEC VT shall cause the Ohio Merger to be carried
out in accordance and compliance with all Applicable Laws, and the Company shall
cause the Acquisition Merger to be carried out in accordance and compliance with
all Applicable Laws applicable to the Company.
SECTION 6.8 Tax Matters.
A. [RESERVED]
B. The Company and the Parent will treat the transaction as a
taxable asset acquisition for federal and state Tax purposes. The Company and
the Parent shall allocate the sales proceeds in accordance with the allocation
rules set forth in Section 1060 of the Code and applicable regulations
thereunder.
C. The Company shall prepare or caused to be prepared and file or
caused to be filed all Tax Returns for the Company which are required to be
filed prior to the Closing Date. The Company shall permit the Parent and its
Representatives to review and comment on each such Tax Return described in the
preceding sentence prior to filing and shall make such revisions to such Tax
Returns as are reasonably requested by the Parent. The Parties shall cooperate
fully, as and to the extent reasonably requested by the other Party, in
connection with the filing of Tax Returns pursuant to this section and any
audit, litigation or other proceeding with respect to Taxes.
D. All transfer, documentary, sales, use, stamp, registration and
other such Taxes, and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred prior to the closing
(but excluding any income taxes) in connection with the consummation of the
transactions contemplated by this Agreement shall be paid by the Company.
SECTION 6.9 Expenses. In no event shall the Company and NEC VT incur
expenses of the kinds set forth in Exhibit B in excess of $1,285,000, without
the prior written consent of the Parent.
ARTICLE 7
CLOSING CONDITIONS
SECTION 7.1 Conditions to Each Party's Obligations Under this Agreement.
The respective obligations of each Party under this Agreement shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions, the performance of which may be waived by the mutual written consent
of the parties:
A. Parent and Bank Approval. This Agreement, the Acquisition Merger
and the Transactions shall have been approved by the requisite vote of the Board
of Directors of the Parent and shall have been approved by the Parent's
principal lenders.
B. Governmental Consents. All authorizations, consents, orders or
approvals of, or declarations or filings with, and all expirations of waiting
periods imposed by, any governmental or regulatory authority or agency which are
necessary for the consummation of the transactions contemplated by this
Agreement, including without limitation the Acquisition Merger, shall have been
filed, occurred or been obtained (all such authorizations, orders, declarations,
approvals, filings and consents and the lapse or all such waiting periods being
referred to as the "Requisite Regulatory Approvals") and all such Requisite
Regulatory Approvals shall be in full force and effect.
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C. No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect.
D. [RESERVED]
E. Vermont Facilities. Prior to the Ohio Merger and the Closing and
subject to the consent of CDI Development Fund, Inc. ("CDI"), NEC VT shall
convey to National Cooperative Services Corporation ("NCSC") or a wholly-owned
subsidiary (the "Lessor"), NEC VT's distribution facilities, land, buildings and
improvements, at 00 Xxxxxxxxxx Xxxxx (xxx "Xxxx Xxxxx Facility") and at 00
Xxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx (collectively, the "Vermont Facilities") in
complete satisfaction of all indebtedness and other obligations of the Company
and/or NEC VT to NCSC, CDI and their Affiliates, including those secured in
whole or in part by the Vermont Facilities, and the Parent shall have received
such title opinions or other written evidence reasonably satisfactory to the
Parent that (i) the Vermont Facilities are then owned by the Lessor in fee
simple, subject to no Liens (except the Lien of current taxes not yet due and
payable) and (ii) all mortgages of record as to the Vermont Facilities and all
security interests of CDI and NCSC have been discharged or terminated.
F. Lease for Tech Drive Facility. The Merger Subsidiary shall have
entered into a new two (2) year lease with the Lessor for the Tech Drive
Facility, substantially in the form of Exhibit C hereto. A condition to entering
into such lease shall be that the Parent at its expense shall have received such
contractor, engineer and other reports concerning the mechanical, structural,
environmental and other condition of the Tech Drive Facility as the Parent in
its reasonable discretion shall determine, which reports shall in all respects
be reasonably satisfactory to the Parent.
G. List of Accounts Payable. At Closing, the Company shall deliver
to the Parent the most recent complete list of all of its accounts payable
prepared in the ordinary course of business.
H. CGANE Agreement. The Merger Subsidiary, CGANE, and the CGANE
members shall have executed a supply agreement substantially in the form of
Exhibit D (the "CGANE Agreement").
I. Bridge Loan Documents. The Company and the Parent shall have
closed the Bridge Loan and delivered all documents required under Section 3.2,
and the Company shall not be in default under any of the Loan Documents.
J. Ohio Merger. The Ohio Merger shall have been completed.
X. Xxxxxxxxxx Agreement. The Surviving Corporation and Xxxxxx
Xxxxxxxxxx shall have entered into an Agreement substantially in the form of
Exhibit E.
SECTION 7.2 Conditions to the Obligations of Parent and the Merger
Subsidiary Under This Agreement. The obligations of the Parent and the Merger
Subsidiary under this Agreement shall be further subject to the satisfaction or
waiver by the Parent and the Merger Subsidiary of the following conditions at or
prior to the Effective Time:
A. Absence of Adverse Changes. Other than transactions contemplated
by this Agreement and except as set forth herein or in the Exhibits or Schedules
hereto, there shall not have occurred any change since June 30, 2002 in the
assets, liabilities, business, operations, result of operations or condition of
the Company which has had, individually or in the aggregate, an Adverse Effect
on the Company.
B. Representations and Warranties; Performance of Obligations. The
obligations of the Company and NEC VT required to be performed by them at or
prior to the Effective Time pursuant to the terms of this Agreement shall have
been duly performed and complied with and the representations and warranties of
the Company and NEC VT contained in this Agreement shall be true and correct as
of the date of this Agreement and as of the Effective Time after giving effect
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to the Ohio Merger as though made at and as of the Effective Time (except as
otherwise specifically contemplated by this Agreement and except as to any
representation or warranty which specifically relates to an earlier date) and
the Parent shall have received certificates to that effect signed by the
chairman or president and the chief financial officer or chief accounting
officer of the Company.
C. Third-Party Approvals. Any and all permits, consents, waivers,
clearances, approvals and authorizations of or notices to all non-governmental
and non-regulatory third parties which are necessary in connection with the
consummation of the transactions contemplated by this Agreement and are required
to be received, made or obtained by the Company, shall have been so received,
made or obtained by the Company, as applicable, other than permits, consents,
waivers, clearances, approvals, authorizations and notices the failure of which
to have received, made or obtained would neither make it impossible to
consummate the transactions contemplated by this Agreement nor result in any
Adverse Effect on the Parent after the Effective Time.
D. Burdensome Condition. None of the Requisite Regulatory Approvals
shall impose any term, condition or restriction upon Parent that Parent in good
faith reasonably determines would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement as to
render inadvisable in the reasonable judgment of Parent the consummation of the
Acquisition Merger.
E. Legal Opinion. The Parent shall have received the opinions of
Xxxxxxx & Xxxxxxx, as to Vermont law, and Xxxxxxxx, Loop & Xxxxxxxx, LLP as to
Ohio law, each dated the Closing Date, with respect to such matters as the
Parent may reasonably request.
F. Additional Documents. In addition to the foregoing, the Company
will furnish the Parent with such additional certificates, instruments or other
documents in the name or on behalf of the company executed by appropriate
officers or others, including without limitations certificates or correspondence
of governmental agencies or authorities or non-governmental third parties, to
evidence fulfillment of the conditions set forth in this Section 7.2 as the
Parent may reasonably request.
SECTION 7.3 Condition to the Obligations of the Company Under This
Agreement. The obligations of the Company under this Agreement shall be further
subject to the satisfaction or waiver by the Company of the following conditions
at or prior to the Effective Time:
A. Representations and Warranties; Performance of Obligations. The
obligations of the Parent and the Merger Subsidiary required to be performed by
them at or prior to the Effective Time pursuant to the terms of this Agreement
shall have been duly performed and complied with and the representations and
warranties of the Parent and the Merger Subsidiary contained in this Agreement
shall be true and correct as of the date of this Agreement and as of the
Effective Time as though made at and as of the Effective Time (except as
otherwise specifically contemplated by this Agreement and except as to any
representation or warranty which specifically relates to an earlier date) and
the Company shall have received a certificate to that effect signed by the
executive vice president and chief financial officer (or other authorized
officer(s)) of the Parent.
B. Third-Party Approvals. Any and all permits, consents, waivers,
clearances, approvals and authorization of or notices to all non-governmental
and non-regulatory third parties which are necessary in connection with the
consummation of the transactions contemplated by this Agreement and are required
to be received, made or obtained by the Parent, or the Merger Subsidiary, shall
have been so received, made or obtained by the Parent, or the Merger Subsidiary,
other than permits, consents, waivers, clearances, approvals, authorization and
notices the failure of which to obtain would neither make it impossible to
consummate the transactions contemplated by this Agreement nor result in an
Adverse Effect on the Parent, or the Merger Subsidiary after the Effective Time.
C. Parent Deliveries. The Parent shall make the payments required by
Section 3.1 and, to the extent then due, the payments under Section 10.3.
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D. Legal Opinion. The Company shall have received the opinion of
Cameron & Xxxxxxxxx LLP, counsel to the Parent and the Merger Subsidiary, dated
the Closing Date with respect to such matters as the Company may reasonably
request, but limited to assumptions as to applicable laws.
E. Additional Documents. In addition to the foregoing, the Parent
and the Merger Subsidiary will furnish the Company with such additional
certificates, instruments or other documents in the name or on behalf of the
Parent, or the Merger Subsidiary executed by appropriate officers or others,
including without limitation certificates or correspondence of governmental
agencies or authorities or non-governmental third parties, to evidence
fulfillment of the conditions set forth in this Section 7.3 as the Company may
reasonably request.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
A. by either of the Parent and the Company if;
(1) any permanent injunction, decree or judgment by any
Authority preventing the consummation of the Acquisition
Merger shall have become final and nonappealable; or
(2) the Closing shall not occur on or before the Termination
Date;
B. by the Company, in the event of a material breach of this
Agreement by the Parent or the Merger Subsidiary that has not been cured, or if
any representation or warranty of the Parent or the Merger Subsidiary shall have
become untrue in any material respect, in either case such that such breach or
untruth is incapable of being cured by the Closing Date or will prevent or delay
consummation of the Acquisition Merger by or beyond the Termination Date; or
C. by the Parent in the event of a material breach of this Agreement
or the Loan Documents by the Company or NEC VT that has not been cured, or if
any representation or warranty of the Company shall have become untrue in any
material respect, in either case such that such breach or untruth is incapable
of being cured by the Closing Date or will prevent or delay consummation of the
Acquisition Merger by or beyond the Termination Date.
SECTION 8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall terminate, and there
shall be no liability on the part of any Party, or any of their respective
stockholders, Members, officers or directors, to the other and all continuing
rights and obligations of any Party shall cease; other than the rights and
obligations of the Parties under Section 6.1 (Confidentiality, Access to
Information), this Section 8.2, Section 8.5 (Fees, Expenses and Other Payments),
Section 11.7 (Governing Law) and Section 11.8 (Enforcement); provided, however,
that such termination shall not relieve any Party from liability for the willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.3 Amendment. This Agreement may be amended by the Parties by
action taken by or on behalf of the respective Boards of Directors thereof at
any time prior to the Closing Date. This Agreement may not be amended except by
an agreement in writing signed by all of the Parties.
SECTION 8.4 Waiver. At any time prior to the Closing Date, except to the
extent Applicable Law does not permit, either the Parent (on behalf of itself
and the Merger Subsidiary) and the Company may extend the time for the
performance of any of the obligations or other acts of the other, waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto, and waive compliance by the other
with any of the agreements, covenants or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an agreement in writing
signed by the Party or Parties to be bound thereby.
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SECTION 8.5 Fees, Expenses and other Payments. In the event of termination
of this Agreement, all costs and expenses, incurred in connection with this
Agreement, the Acquisition Merger and the Transactions, and compliance with
Applicable Law and Contractual Obligations as a consequence hereof and thereof,
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred by the Parties shall be borne solely and
entirely by the Party which has incurred such costs and expenses (with respect
to such Party, its "Expenses").
SECTION 8.6 Effect of Investigation. The right of any Party to terminate
this Agreement pursuant to Section 8.1 shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any Party,
any Person controlling any such party or any of their Representatives whether
prior to or after the execution of this Agreement.
ARTICLE 9
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
SECTION 9.1 Effectiveness of Representations, etc. Regardless of any
investigation made by or on behalf of any other Party hereto, any Person
controlling such Party or any of their respective Representatives whether prior
to or after the execution and consummation of this Agreement, the
representations and warranties set forth in Article 4 and Article 5 hereof shall
survive the Acquisition Merger and remain operative and in full force and effect
until the date that is two (2) years after the Closing Date, except for those
representations and warranties set forth in Section 4.1 and Section 5.1 which
shall remain operative and in full force and effect indefinitely.
SECTION 9.2 Indemnification.
A. The Company and NEC VT, jointly and severally, prior to the
Effective Time, and the Members, after the Effective Time, agree to make whole,
indemnify and hold the Parent and its Affiliates, agents, successors and assigns
(collectively, the "Parent Indemnified Parties") harmless as a result of, from
or against any loss, liability, deficiency, damage, expense or cost ("Loss")
that a Parent Indemnified Party may suffer, sustain or become subject to as a
result of:
(1) any and all Claims of the Parent Indemnified Parties or other
Persons based upon, attributable to or resulting from any
inaccuracy in or breach of any representation or warranty on
the part of the Company or NEC VT under this Agreement or any
Collateral Document;
(2) any and all Claims of the Parent Indemnified Parties or other
Persons based upon, attributable to or resulting from the
material breach of any covenant or other agreement on the part
of the Company or NEC VT under this Agreement or any
Collateral Document; and
(3) any and all Claims of the Parent Indemnified Parties or other
Persons incident to the foregoing or to the enforcement of
this Section 9.2.
B. The Company or the Members, as the case may be, will be liable to
the Parent Indemnified Parties only if the aggregate amount of the Parent
Indemnified Parties' Losses exceeds $250,000, in which case the Company or the
Members, as the case may be, will be liable only for the amount of such Losses
in excess of $250,000.
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C. The Company and the Members will not be required to pay the
Parent Indemnified Parties for Losses in excess of $1,100,000 (which amount
shall include the $250,000 amount specified in paragraph B above).
D. Notwithstanding anything in this Agreement to the contrary, the
obligations of the Company and the Members under Section 9.2(A) shall terminate
with respect to all claims made after the date that is two (2) years after the
Closing Date (the "Section 9.2 Date") and all initial notices of claims for
indemnification shall have been given no later than the Section 9.2 Date.
SECTION 9.3 Indemnification by the Parent and Merger Subsidiary.
A. The Parent and the Merger Subsidiary, jointly and severally,
hereby agree to make whole, indemnify and hold the Company, NEC VT, the Members
and their respective Affiliates, agents, heirs, successors and assigns
(collectively, the "Company Indemnified Parties") harmless as a result of, from
or against any Loss that a Company Indemnified Party may suffer, sustain or
become subject to as a result of:
(1) any and all Claims of the Company Indemnified Parties or other
Persons based upon, attributable to or resulting from any
inaccuracy in or breach of any representation or warranty on
the part of the Parent or the Merger Subsidiary under this
Agreement or any Collateral Document;
(2) any and all Claims of the Company Indemnified Parties or other
Persons based upon, attributable to or resulting from the
material breach of any covenant or other agreement on the part
of the Parent or the Merger Subsidiary under this Agreement or
any Collateral Document; and
(3) any and all Claims of the Company Indemnified Parties or other
Persons incident to the foregoing or to the enforcement of
this Section 9.3.
SECTION 9.4 Procedures.
A. In the event that any Legal Action shall be instituted or
asserted by any Person other than such indemnified party in respect of which
payment may be sought hereunder, the indemnified party shall reasonably and
promptly cause written notice of the assertion of any Legal Action of which it
has knowledge which is covered by the indemnities under Section 9.2 or Section
9.3 to be forwarded to the indemnifying party. In such event, the indemnifying
party shall have the right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory to the indemnified
party, and to defend against, negotiate, settle or otherwise deal with any Legal
Action which relates to any Claims instituted or asserted by any Person other
than such indemnified party and indemnified against hereunder; provided,
however, that no settlement thereof shall be made without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld, conditioned or delayed. If the indemnifying party elects to defend
against, negotiate, settle or otherwise deal with any Legal Action which relates
to any such Claims, it shall within thirty (30) days (or sooner, if the nature
of the Legal Action so requires) notify the indemnified party of its intent to
do so. If the indemnifying party elects not to defend against, negotiate, settle
or otherwise deal with any Legal Action which relates to any such Claims, fails
to notify the indemnified party of its election as herein provided or contests
its obligation to indemnify the indemnified party for such Claims under this
Agreement, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Legal Action. If the indemnified party defends any
Legal Action, then the indemnifying party shall reimburse the indemnified party
for Claims incurred in defending such Legal Action upon submission of periodic
bills. Neither the indemnified party nor the indemnifying party may settle any
Legal Action without the prior written consent of the other, which consent shall
not be unreasonably withheld, conditioned or delayed. If the indemnifying party
shall assume the defense of any Legal Action instituted or asserted by any
Person other than an indemnified party, the indemnified party may participate,
at such party's own expense, in the defense of such Legal Action.
25
B. After any final judgment or award shall have been rendered by a
court, arbitration board (which may be engaged as required by law or contract or
upon the consent of each of the indemnifying party and the indemnified parties)
or administrative agency of competent jurisdiction and the expiration of the
time in which to appeal therefrom, or a settlement shall have been consummated,
or the indemnified party and the indemnifying party shall have arrived at a
mutually binding agreement with respect to a Legal Action hereunder, the
indemnifying party shall pay the indemnified party a cash payment, such payment
shall be made by wire transfer of immediately available funds within five
business days after the date of notice of such judgment or award.
C. An indemnified party shall notify the indemnifying party within a
reasonable period of time after becoming aware of potential Losses for which it
may seek indemnification under this Article 10 (other than those potential
Losses covered by Section 9.4(A) and Section 9.4(B) above, which potential
Losses shall be subject to the provisions of those Sections). Such notice shall
include an estimate of the Losses that the indemnified party has determined may
be incurred. As soon as practicable after the date of such notice, the
indemnified party shall give the indemnifying party all information and
documentation necessary to support and verify the Losses specified in such
notice and the indemnifying party and its agents shall be given access to all
books and records in the possession or control of the indemnified party which
the indemnifying party reasonably determines to be related to such potential
Losses. If the indemnifying party notifies the indemnified party that it does
not dispute such potential Losses or the estimated amount of such potential
Losses, or fails to notify the indemnified party within 45 days after delivery
of such notice by the indemnified party whether the indemnifying party disputes
such potential Losses or the estimated amount of such potential Losses, the
estimated Losses in the amount specified in such notice shall be conclusively
deemed a liability of the indemnifying party and the indemnifying party shall
pay such amount to the indemnified party. If the indemnifying party has timely
disputed its liability with respect to such potential Losses or the estimated
amount of such potential Losses, the indemnifying party and the indemnified
party will proceed in good faith to negotiate a resolution of such dispute, and
if not resolved through such negotiations within 60 days after the delivery of
the notice from the indemnified party, such dispute shall be resolved fully and
finally in Boston, Massachusetts by an arbitrator selected pursuant to, and an
arbitration governed by, the Commercial Arbitration Rules of the American
Arbitration Association. The arbitrator shall resolve the dispute within 30 days
after selection and judgment upon the award rendered by such arbitrator may be
entered in any court of competent jurisdiction.
SECTION 9.5 Exclusive Remedy. After the Closing, the indemnification
provisions as set forth in this Article 9 shall be the exclusive remedy for any
breaches or alleged breaches of any representation, warranty or covenant
contained in this Agreement or any Collateral Document, except for (i) breaches
arising from intentional fraud or intentional misconduct, (ii) failure to pay
amounts due pursuant to Section 2.6, (iii) breaches of Sections 10.1, 10.2, 10.3
and 10.4 and (iv) breaches arising under the CGANE Agreement. In the event any
action is brought as provided in this Section 9.5 or in connection with any of
the matters described in clauses (i) through (iv) of the preceding sentence, the
prevailing party's reasonable attorneys' fees and costs will be paid by the
nonprevailing party, as may be awarded by the arbitrator or court, as the case
may be.
SECTION 9.6 Recoveries.
A. After the Closing, the Parent Indemnified Parties' sole method
for collecting amounts due pursuant to Section 9.2(A) will be to withhold
amounts that would otherwise be payable on December 31, 2004 pursuant to (i)
Section 10.1(B) and (ii) the CGANE Agreement (the "Section 9.6 Amounts"). Any
such withholding shall be made pro rata among all such payments.
B. The amount to which a Parent Indemnified Party or a Company
Indemnified Party may become entitled under this Article 9 shall be net of any
recovery (whether by way of payment, discount, credit, set-off, tax benefit,
counterclaim or otherwise) received from a third party (including any insurer or
Taxing Authority) in respect of such Claim. The amount of any such recovery,
less all reasonable costs, charges and expenses incurred by the relevant Parent
Indemnified Party or Company Indemnified Party, as the case may be, in obtaining
such recovery from the third party, shall be repaid by the relevant Parent
Indemnified Party or Company Indemnified Party, as the case may be, to the
relevant indemnifying Party promptly upon the receipt thereof from the third
party. Any such payment shall, to the extent permitted by Applicable Law, be an
adjustment to the purchase price for Tax purposes.
26
SECTION 9.7 Member Representative.
A. If the Members approve the Ohio Merger and the Acquisition Merger
is consummated then, effective upon such consummation and without any further
act of any Members, a Person to be named by the Company and reasonably
acceptable to the Parent shall be appointed as the Members' representative,
agent and attorney-in-fact to take all actions on behalf of the Members as
indemnifying parties under this Article 9, including giving and receiving
notices and communications; defending Legal Actions; objecting to, negotiating
and entering into settlements of and compromises with respect to notices
asserting rights to indemnification from the Parent Indemnified Parties; and
authorizing delivery to the Parent Indemnified Parties of any amounts due
pursuant to this Article 9 (the "Members' Representative").
B. Until the Section 9.2 Date (or, if there is on the Section 9.2
Date any unresolved claim for indemnification pursuant to Section 9.2, such
later date as all such unresolved claims are settled), the Members who are
entitled to receive 50% or more of the Section 9.6 Amounts may, from time to
time upon written notice to the Members' Representative and Parent, remove the
Members' Representative or appoint a new Members' Representative upon the death,
incapacity, resignation or removal of the Members' Representative. Upon receipt
of such notice, the Parent may rely on the actions of such new Members'
Representative without further inquiry.
C. If the Members approve the Ohio Merger and the Acquisition Merger
is consummated then, effective upon such consummation and without any further
act of any Member, each Member shall be deemed to have agreed that (i) the
authority of the Members' Representative under this Section 9.7 shall include
the right to hire or retain such counsel, investment bankers, accountants,
representatives and other professional advisors as the Members' Representative
determines in the Members' Representative's sole discretion to be necessary,
appropriate or advisable, (ii) no bond shall be required of the Members'
Representative and the Members' Representative shall receive no compensation for
service in such capacity and (iii) the Members' Representative shall not be
liable to any Member for any act done or omitted as Members' Representative
while acting in good faith and in the exercise of reasonable judgment. Nothing
in this Section 9.7(C) or elsewhere in this Agreement shall be deemed to impose
any indemnification or other similar obligation to the Members' Representative
in its capacity as Members' Representative on any of the Company, the Parent,
the Merger Subsidiary or the Surviving Corporation.
ARTICLE 10
OTHER AGREEMENTS
SECTION 10.1 Servicing the Members.
A. For a period of five (5) years following the Effective Time, the
Surviving Corporation will, and the Parent will cause the Surviving Corporation
to, use its commercially reasonable efforts to continue to service the Buying
Club and Retail Members in a manner consistent with either (i) NEC VT's past
practices, or (ii) with respect to Retail Members (but not Buying Clubs) the
Parent's past practice in NEC VT's entire geographic area with respect to Retail
Members; provided, that nothing contained in this Section 10.1 (a) shall
obligate the Parent or the Surviving Corporation to continue to service any
Buying Club or Retail Member in a manner which would be less profitable than
that applicable to the conduct of the Parent's business generally or (b) to
provide products to such Members on terms and conditions more favorable than
those provided by the Parent to other like customers purchasing like quantities
of like products.
27
B. The Parent and the Surviving Corporation covenant and agree that
any Member listed on Schedule 10.1 that continues to purchase products from the
Parent or the Surviving Corporation as its primary supplier shall be entitled to
receive the incentive payments specified on Schedule 10.1 on December 31, 2002,
December 31, 2003 and December 31, 2004. Nothing in this Section 10.1(B) shall
limit the right of the Parent or the Surviving Corporation to cease doing
business with any such Member on account of such Member's failure to pay or
perform any material obligations. In such event, such Member shall be entitled
to no further payments. The payments due December 31, 2004 are expressly subject
to offset in accordance with Section 9.6. NEC VT represents that the Members
shown on Schedule 10.1 represent all organizational Members which have purchased
products from NEC VT since July 1, 2001 other than the Members named in the
CGANE Agreement. Schedule 10.1 may be updated by NEC VT prior to the Closing to
reflect changes in membership; provided, however, that the aggregate amount of
payments listed on such Schedule shall not be increased.
SECTION 10.2 Employees. The Parent will cause the Surviving Corporation to
provide any of the Company's employees retained by the Surviving Corporation
(the "Employees") with compensation and benefits substantially consistent with
those paid to the Parent's other employees in similar positions performing
similar work.
SECTION 10.3 Severance. After the Closing, the Parent and the Merger
Subsidiary, jointly and severally, agree to provide severance payments not
exceeding $1,500,000 in the aggregate under (i) the severance policy attached
hereto as Exhibit F-1 to those persons who are employees of the Company on the
Closing Date and whose jobs are eliminated by reason of the closing of any of
NEC VT's current locations or whose employment by the Surviving Corporation is
terminated within twelve (12) months after the Closing Date, except for cause,
and (ii) the severance agreements described in Exhibit F-2, true and correct
copies of which have been delivered to the Parent.
SECTION 10.4 Regulatory Filings. Each of the Company, NEC VT, the Parent
and the Merger Subsidiary shall, as promptly as practicable after the execution
of the Agreement, make or cause to be made all filings and submissions under
Applicable Laws appropriate to each such Party for the consummation of the
transactions contemplated by this Agreement. Parent and Merger Subsidiary will
coordinate and cooperate with the Company and the Company will coordinate and
cooperate with the Parent and Merger Subsidiary in exchanging such information,
and will provide such reasonable assistance as any other Party may request in
connection with all of the foregoing.
SECTION 10.5 Conditions. Each of the Company, NEC VT, the Parent and
Merger Subsidiary shall take all commercially reasonable actions necessary to
cause the conditions precedent set forth in Article 8 to be satisfied and to
consummate the Transactions contemplated herein as soon as reasonably possible
and in any event prior to the Closing Date.
ARTICLE 11
GENERAL PROVISIONS
SECTION 11.1 Notices. All notices and other communications relating to
this Agreement will be in writing and (except as otherwise provided) will be
deemed to have been given when personally delivered, three days following
mailing by certified or registered mail, return receipt requested, and one
business day following delivery to a reliable overnight courier or following
transmission by facsimile or other electronic means with electronic confirmation
of transmission received. All notices to the Parent, Merger Subsidiary, NEC VT
or the Company shall be sent to the following addresses or facsimile numbers:
A. If to the Parent or the Merger Subsidiary:
c/o United Natural Foods, Inc.
000 Xxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, President
Facsimile No.: 000-000-0000
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With a copy to:
Cameron & Xxxxxxxxx LLP
00 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: E. Xxxxx Xxxxxxx, Esq.
Facsimile No.: 401-331-5787
B. If to NEC VT, the Company or the Members:
Xxxxxx Xxxxxxxxxx, CEO
Northeast Cooperatives
00 Xxxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000
With a copy to:
Xxxxxx & Whitney LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
Attn: J. Xxxx XxXxxxx, Esq.
Facsimile No.: 000-000-0000
SECTION 11.2 Headings. The headings contained in this Agreement are for
purposes of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 11.3 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner Adverse to any
party. Upon determination that any term or other provision is invalid, illegal
or incapable of being enforced, the Parent and the Company shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible to the fullest extent permitted by Applicable Law
in an acceptable manner to the end that the Transactions are fulfilled to the
extent possible.
SECTION 11.4 Entire Agreement. This Agreement (together with the Company
Disclosure Schedule, and the other Collateral Documents delivered in connection
herewith), constitutes the entire agreement of the Parties and supersedes all
prior agreements and undertakings, both written and oral, between the Parties,
or any of them, with respect to the subject matter hereof.
SECTION 11.5 Assignment. This Agreement shall not be assigned by operation
of law or otherwise and any purported assignment shall be null and void, except
that the Merger Subsidiary may assign its rights and obligations hereunder to a
Delaware limited liability company which (i) is wholly-owned by the Parent and
(ii) assumes all of the obligations of the Merger Subsidiary hereunder.
SECTION 11.6 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each Party, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement;
except that (i) the Members' Representative shall have the rights and powers
provided in Section 9.7, (ii) each Parent Indemnified Party and Company
Indemnified Party shall have the indemnification rights provided by Article 9,
(iii) each Member shall be entitled to enforce its rights to receive the
payments provided for in Section 2.6 and its rights under Section 10.1 and (iv)
each of the Employees shall be entitled to enforce his or her rights under
Section 10.2 and 10.3.
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SECTION 11.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the substantive laws of the State of Delaware
governing contracts made and to be performed in such jurisdiction, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 11.8 Enforcement of the Agreement. Each Party recognizes and
agrees that each other Party's remedy at law for any breach of the provisions of
this Agreement would be inadequate and agrees that for breach of such provision,
such Party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, but subject to the
provisions of Section 9.5, be entitled to injunctive relief and to enforce its
rights by an action for specific performance to the extent permitted by
Applicable Law. Each Party hereby waives any requirement for security or the
posting of any bond or other surety in connection withe any temporary or
permanent award of injunctive, mandatory or other equitable relief. Nothing
contained in this Section 11.8 shall be construed as prohibiting a Party from
pursuing any other remedies available to such Party for any breach or threatened
breach hereof or failure to take or refrain from any action as required
hereunder to consummate the Acquisition Merger and carry out the Transactions.
SECTION 11.9 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different Parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 11.10 Mutual Drafting. This Agreement is the result of the joint
efforts of the Parent and the Company, and each provision hereof has been
subject to the mutual consultation, negotiation and agreement of the parties and
there shall be no construction against any Party based on any presumption of
that Party's involvement in the drafting thereof.
SECTION 11.11 Disclosure Supplements. From time to time prior to the
Closing Date, each Party will promptly supplement or amend its respective
Disclosure Schedule delivered in connection herewith with respect to any
material matter which, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in such Company
Disclosure Schedule which has been rendered inaccurate thereby. The making of
any such amendment shall not otherwise affect the liability of any Party
delivering such Amendment or the rights of any Party receiving such amendment.
ARTICLE 12
DEFINITIONS
As used herein, unless the context otherwise requires, the following terms
(or any variant in the form thereof) have the following respective meanings.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless as defined or the context otherwise clearly
requires, terms for which meanings are provided herein shall have such meanings
when used in the Disclosure Schedules and each Collateral Document, notice,
certificate, communication, opinion or other document executed or required to be
executed pursuant hereto or thereto or otherwise delivered, from time to time,
pursuant hereto or thereto.
Acquisition Merger shall have the meaning given to it in Section 2.1.
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean, with
respect to the Company, or to the Parent, or the Merger Subsidiary, as the case
may be, any Event which could reasonably be expected to (a) adversely affect the
validity or enforceability of this Agreement or any Collateral Document executed
or required to be executed pursuant hereto or thereto, or (b) adversely affect
the business, operations, management, properties or the condition, (financial or
30
other), or results of the operation of the Company of the Parent and its
Subsidiaries, taken as a whole, as the case may be, or (c) impair the ability of
the Company or the Parent, or the Merger Subsidiary, as applicable, to fulfill
its obligations under the terms of any Collateral Document executed or required
to be executed pursuant hereto or thereto, or (d) adversely affect the aggregate
rights and remedies of the Parent or the Company, as the case may be, under this
Agreement or any Collateral Document executed or required to be executed
pursuant hereto or thereto, in all cases (whether under (a), (b), (c) or (d)),
unless otherwise specifically set forth, in a material respect or manner or to a
material degree.
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, (b) any other Person
of which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, join venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Agreement shall mean this Agreement and Plan of Merger as originally in
effect, including unless the context otherwise specifically requires, all
schedules, including the Disclosure Schedules and exhibits hereto, and as the
same from time to time be supplemented, amended, modified or restated in the
manner herein or therein provided.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitations all federal and state securities laws and
Environmental Laws, to or by which a Person or it or any of its business or
operations is subject or any of its property or assets is bound.
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
Bank Payment shall have the meaning given to it in Section 3.2(A).
Benefit Arrangement shall mean, with respect to any Person, any material
benefit arrangement that is not a Plan, including (i) any employment or
consulting agreement, (ii) any arrangement providing for insurance coverage or
workers' compensation benefits, (iii) any incentive bonus or deferred bonus
arrangement, (iv) any arrangement providing termination allowance, severance or
similar benefits, (v) any equity compensation plan, (vi) any deferred
compensation plan and (vii) any compensation policy and practice.
Bridge Loan shall have the meaning given to it in Section 3.2 (A).
Buying Club Members shall mean Persons or consumer groups who organize to
purchase products from NEC VT.
Cash Payment shall have the meaning given to it in Section 2.5(A).
CDI shall have the meaning given to it in Section 7.1(E).
Certificates of Merger shall have the meaning given to it in Section 2.2.
CGANE shall mean the Cooperative Grocers Association of the Northeast.
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CGANE Agreement shall have the meaning given to it in Section 7.1(H).
CGANE Members shall mean the members of CGANE.
Claim shall mean any debt, liability, obligation, loss, damage,
deficiency, assessment or penalty, together with any Legal Action, pending or
threatened, or any claim or judgment of whatever kind and nature relating
thereto, and all fees, costs, expenses and disbursements (including without
limitation reasonable attorneys' and other legal fees, costs and expenses)
relating to any of the foregoing.
Closing shall have the meaning given to it in Section 1.1.
Closing Costs shall have the meaning given to it in Section 3.1.
Closing Date shall mean the date as soon as reasonably possible following
the satisfaction of the conditions set forth in Article 7, or upon the agreement
of the Parent and the Company, a date or successive dates subsequent thereto,
but in no event later than the Termination Date.
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in section 4980B of the Code and Part 6 of Title
I of ERISA.
Code shall mean the Internal Revenue Code of 1986, as amended.
Collateral Document shall mean any agreement, instrument, certificate,
opinion, memorandum, schedule or other document delivered by a Party pursuant to
this Agreement or in connection with the Acquisition Merger and the
Transactions.
Company shall have the meaning given to it in the recitals of this
Agreement.
Company Disclosure Schedule shall mean the Company Disclosure Schedule
dated as of the date of this Agreement delivered by the Company to the Parent,
as the same may be amended, modified or supplemented at the Closing, but no such
amendment, modification or supplement shall affect any representation, warranty
or agreement as of the date made.
Company Financial Statements shall have the meaning given to it in Section
4.2.
Company Indemnified Parties shall have the meaning given to it in Section
9.3(A).
Constituent Corporations shall have the meaning given to it in Section
2.1.
Contract, Contractual Obligation shall mean, with regard to any Person,
any term, condition, provision, representation, warranty, agreement, covenant,
undertaking, commitment, indemnity or other obligation set forth in the Organic
Documents of such Person or which is outstanding or existing under any
instrument, contract, lease or other contractual undertaking (including without
limitation any instrument relating to or evidencing any Indebtedness) to which
such Person is a party or by which it or any of its businesses are subject or
properties or assets are bound, to the extent that any of the foregoing is
material to such Person.
Control (including the terms "controlled", "controlled by" and "under
common control with") means the possession, directly or indirectly, or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, or the disposition of such Person's assets
or properties, whether through the ownership of stock, equity or other
ownership, by contract, arrangement or understanding, or as trustee or executor,
by contract or credit arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares of
capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for equity securities, whether or
not the right to convert or exchange thereunder is immediately exercisable or is
conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
32
Current Uses shall have the meaning given to it in Section 4.6(C).
DGCL shall mean the Delaware General Corporation Law, as amended.
Distribution shall mean, with respect to a Party: (a) the declaration or
payment of any dividend (except dividends payable in equity of such Party) on or
in respect of any shares of any class of capital stock of such Party or any
equity securities of any Subsidiary owned by a Person other than such Party or a
Subsidiary, (b) the purchase, redemption or other retirement of any equity of
such Party or any equity owned by a Person other than such Party or a
Subsidiary, and (c) any other distribution on or in respect of any equity of
such Party or any equity of any Subsidiary owned by a Person other than such
Party or a Subsidiary.
Effective Time shall mean the time specified in the Certificate of Merger
and the Articles of Merger.
Employee shall have the meaning given it by Section 10.2.
Employment Arrangement shall mean, with respect to any Person, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, arrangement or policy (exclusive of any which is terminable within thirty
(30) days without liability, penalty or payment of any kind by such Person or
any Affiliate), or providing for severance, termination payments, insurance
coverage (including any self-insured arrangements), workers compensation,
disability benefits, life, health, medical, dental or hospitalization benefits,
supplemental unemployment benefits, vacation or sick leave benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
option, stock purchase or appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits, or any
collective bargaining or other labor agreement, whether or not any of the
foregoing is subject to the provisions of ERISA.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment.
Environmental Permits shall have the meaning given to it in Section 4.20
(C).
ERISA shall mean the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
ERISA Affiliate shall mean any Person that is treated as a single employer
under Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of
ERISA, or any successor provisions thereto.
Escrow Agreement shall have the meaning given to it in Section 3.1.
Escrow Payment shall have the meaning given to it in Section 3.1.
Event shall mean the occurrence or existence of any act, action, activity,
circumstance, condition, event, fact, failure to act, omission, incident or
practice, or any set or combination of any of the foregoing.
33
Expenses shall have the meaning given to it in Section 8.5.
GAAP shall mean generally accepted accounting principles as in effect from
time to time in the United States of America.
Governmental Authorizations shall mean, with regard to any Person, all
approvals, concessions, consents, franchises, licenses, permits, plans,
registrations and other necessary authorizations of all Authorities that are
material to such Person.
Governmental Entity shall have the meaning given to it in Section 4.20(A).
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Guaranty or Guaranteed shall mean any agreement, undertaking or
arrangement by which a Party guarantees, endorses or otherwise becomes or is
liable, directly or indirectly, contingently or otherwise, upon any Indebtedness
of any other Person including without limitation the payment of amounts drawn
down by beneficiaries of letters of credit (other than by endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business). The amount of the obligor's obligation under any Guaranty shall be
deemed to be the outstanding amount (or maximum permitted amount, if larger) of
the Indebtedness directly or indirectly guaranteed thereby (subject to any
limitation set forth therein).
Hazardous Materials shall have the meaning given to it in Section 4.20(B).
Indebtedness shall mean, with respect to a Party, (a) all items, except
items of capital stock or of surplus or of general contingency or deferred tax
reserves or any minority interest in any Subsidiary to the extent such interest
is treated as a liability with indeterminate term on the consolidated balance
sheet of such Party, which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Party, (b) all obligations secured by any Lien to which any property or
asset owned or held by such Party is subject, whether or not the obligation
secured thereby shall have been assumed, and (iii) to the extent not otherwise
included, all Contractual Obligations of such Party constituting capitalized
leases and all obligations of such Party with respect to Leases constituting
part of a sale and leaseback arrangement.
Intangible Assets shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, but shall exclude Governmental Authorizations.
IRS shall mean the Internal Revenue Service.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other legal or quasi-legal precedent; or (c)
arbitrator's, mediator's or referee's award, decision, finding or
recommendation; including, in each such case or instance, any interpretation,
directive, guideline or request, whether or not having the force of law
including, in all cases, without limitation any particular section, part or
provision thereof.
Lease shall mean any lease or sublease of property, whether real, personal
or mixed, and all amendments thereto.
34
Legal Action shall mean any litigation or legal or other actions,
arbitrations, counterclaims, investigations, proceedings, requests for material
information by or pursuant to the order of any Authority, or suits, at law or in
arbitration, equity or admiralty commenced by any Person, whether or not
purported to be brought on behalf of a Party hereto affecting such Party or any
of such Party's business, property or assets.
Lessor shall have the meaning given to it in Section 7.1(E).
Lien shall mean any of the following: mortgage; lien (statutory or other);
preference, priority or other security agreement, arrangement or interest;
hypothecation, pledge or other deposit arrangement; assignment; charge; levy;
executory seizure; attachment; garnishment; encumbrance (including any easement,
exception, variance, reservation or limitation, right of way, zoning
restriction, building or use restriction, encroachment, and the like except
utility and similar easements which do not interfere in any material respect
with the Current Use of the property involved); conditional sale, title
retention or other similar agreement, arrangement, device or restriction;
preemptive or similar right; any financing lease involving substantially the
same economic effect as any of the foregoing; the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction; restriction on sale, transfer, assignment, disposition, Lease or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
Loss shall have the meaning given to it in Section 9.2(A).
Material or Materiality for the purposes of this Agreement, shall, unless
specifically stated to the contrary, be determined without regard to the fact
that various provisions of this Agreement set forth specific dollar amounts.
Material Agreement or Material Commitment shall mean, with respect to a
Party, any Contractual Obligation which (a) was not entered into in the ordinary
course of business, (b) was entered into in the ordinary course of business
which (i) involves the purchase, sale or lease of goods or materials or
performance of services aggregating more than Ten Thousand Dollars ($10,000),
(ii) extends for more than three (3) months, or (iii) is not terminable on
thirty (30) days or less notice without penalty or other payment, (c) involves
Indebtedness for money borrowed in excess of Ten Thousand Dollars ($10,000), (d)
is or otherwise constitutes a written agency, dealer, license, distributorship,
sales representative or similar written agreement, or (e) would account for more
than ten percent (10%) of purchases or sales projected to be made by such Party
during its current fiscal year.
Members shall mean the Company's or NEC VT's organizational (which
includes Buying Club Members and Retail Members), consumer and worker classes of
members.
Members' Representative shall have the meaning given it in Section 10.7.
Membership Interest shall mean, before the Ohio Merger, the shares of
class A common stock and class B common stock of NEC VT owned by a Member of NEC
VT and, after the Ohio Merger, the shares of class A common stock and class B
common stock of the Company owned by a Member of the Company.
Membership Interest Certification shall have the meaning given it in
Section 2.6(B).
Merger Subsidiary shall have the meaning given to it in the recitals of
this Agreement.
Merger Subsidiary Common Stock shall mean the common stock, par value
$1.00 per share, of the Merger Subsidiary.
Multiemployer Plan shall mean "a multiemployer plan" within the meaning of
Section 400(a)3 of ERISA.
NCSC shall have the meaning given to it in Section 7.1(E).
NEC VT shall have the meaning given to it in the recitals of this
Agreement.
35
OCL shall mean the Ohio Cooperative Law.
Ohio Merger shall have the meaning given it in the recitals of this
Agreement.
Option Securities shall mean all rights, options and warrants, and calls
or commitments evidencing the right, to subscribe for, purchase or otherwise
acquire shares of capital stock or Convertible Securities, whether or not the
right to subscribe for, purchase or otherwise acquire is immediately exercisable
or is conditioned upon the passage of time, the occurrence or non-occurrence or
the existence or non-existence of some other Event.
Organic Document shall mean, (a) with respect to a Person which is a
cooperative or a corporation, its charter, its by-laws and all Company
agreements, voting trusts and similar arrangements applicable to any of its
equity or capital stock, (b) with respect to a Person which is a partnership,
its agreement and certificate of partnership, any agreements among partners, and
any management and similar agreements between the partnership and any general
partners (or any Affiliate thereof), and (c) with respect to a Person which is a
limited liability company, its certificate of organization and operating
agreement, any agreements among members, and any management and similar
agreements between the limited liability company and any members (or any
Affiliate thereof).
Original Agreement shall have the meaning given it in the Recitals of this
Agreement.
Other Transaction shall mean a transaction or series of related
transactions (other than the Ohio Merger and the Acquisition Merger) resulting
in (a) any change in control of the Company, (b) any merger or consolidation of
the Company, regardless of whether the Company is the surviving entity, (c) any
tender offer or exchange offer for, or any acquisition of, any securities of the
Company, or (d) any sale or other disposition of assets of the Company not
otherwise permitted under Section 4.16 hereof.
Parent shall have the meaning given to it in the recitals of the
Agreement.
Parent Disclosure Schedule shall mean the disclosure schedule dated as of
the date of this Agreement delivered by the Parent to the Company. Matters
specifically disclosed in the Parent SEC Reports shall be deemed incorporated in
and made a part of the Parent Disclosure Schedule and shall not be required to
be separately disclosed in the Parent Disclosure Schedule.
Parent Indemnified Parties shall have the meaning given to it in Section
9.2(A).
Parent SEC Reports shall have the meaning given it in Section 5.3.
Party shall mean a signatory to this Agreement.
Permitted Materials shall mean office, janitorial, small repair and
maintenance supplies, packaged consumer products and refrigerants commonly used
in the warehousing industry (e.g. ammonia).
Person shall mean any natural individual or Entity.
Plan shall mean, with respect to a Party and at a particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Party is an "employer" as defined in Section 3(5) of ERISA, other that a
Multiemployer Plan.
Private Authorization shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to agreements,
leases, contracts, patents, trademarks, service marks, trade names, copyrights,
computer software programs, technology and know-how.
36
Representatives (of a Party) shall mean the officers, directors,
employees, accountants, counsel, financial advisors, consultants and other
representatives (of such Party).
Retail Members shall mean Entities that conduct their business through
retail outlets and purchase products from NEC VT.
SEC shall mean the Securities and Exchange Commission.
Section 9.2 Date shall have the meaning given to it in Section 9.2(D).
Section 9.6 Amounts shall have the meaning given to it in Section 9.6(A).
Subsidiary shall mean, with respect to a Person, any Entity a majority of
the capital stock ordinarily entitled to vote for the election of directors of
which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such a Person or any other Person controlled by such a Person.
Surviving Corporation shall have the meaning given to it in Section 2.1.
Surviving Corporation Common Stock shall have the meaning given to it in
Section 2.5.
Tax, Taxes (and "Taxable", which shall mean subject to Tax), shall mean,
with respect to a Party, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other including recapture of any tax items
such as investment tax credits), alternative or add on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Party,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, levies, assessments, charges, penalties, addition to
tax or additional amount imposed by any Taxing Authority, (b) any joint or
several liability of such Party with any other Person for the payment of any
amounts of the type described in (a), and (c) any liability of such Party for
the payment of any amounts of the type described in (a) as a result of any
express or implied obligation to indemnify any other Person.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the imposition
of any Tax.
Tech Drive Facility shall have the meaning given to it in Section 7.1(E).
Termination Date shall mean December 31, 2002.
Transactions shall mean the other transactions contemplated by this
Agreement or the Acquisition Merger or by any Collateral Document executed or
required to be executed in connection herewith or therewith.
Vermont Facilities shall have the meaning given to it in Section 7.1(E).
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, the Parent, the Merger Subsidiary, the Company and NEC
VT have caused this Agreement to be executed as of the date first written above.
UNITED NATURAL FOODS, INC.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------
President
NEC ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------
President
NORTHEAST COOPERATIVE, INC., an Ohio
association
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Clerk
NORTHEAST COOPERATIVES, a Vermont
association
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------
CEO
The undersigned accepts appointment as Members' Representative under
Section 9.7 and agrees to abide by the provisions of Section 9.7.
[NAME OF MEMBERS' REPRESENTATIVE]
/s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx
CGANE Executive Director
38
