Exhibit 99.3
October 17, 2002
United Natural Foods, Inc.
000 Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, Chief Financial Officer
RE: Third Amendment to Loan and Security Agreement
Dear Xxxx:
Reference is made to the Loan and Security Agreement dated as of August
31, 2001 (as amended, the "Loan Agreement") among United Natural Foods, Inc.
("UNF"), Mountain People's Warehouse Incorporated ("MPW"), Nutrasource, Inc.
("Nutrasource"), Rainbow Natural Foods, Inc. ("Rainbow"), Stow Xxxxx, Inc.
("SMI"), United Natural Foods Pennsylvania, Inc. ("UNFPA" and together with UNF,
MPW, Nutrasource, Rainbow and SMI, the "Borrowers") each of the Lenders
identified under the caption "Lenders" on the signature pages thereto and Fleet
Capital Corporation as administrative and collateral agent for the Lenders (the
"Agent"), Citizens Bank of Massachusetts (the "Syndication Agent"), U.S. Bank
National Association (the "Documentation Agent") and Fleet Securities, Inc. (the
"Arranger"), as amended by First Amendment dated April 16, 2002, and Second
Amendment dated September 26, 2002. Capitalized terms not defined herein shall
have the meanings ascribed thereto in the Loan Agreement.
UNF has entered into a certain letter of intent (the "Letter of Intent")
dated September 19, 2002 with Northeast Cooperatives ("NEC") pursuant to which
UNF will make a certain bridge loan to NEC, UNF will form a subsidiary ("NEC
Acquisition Corp.") and NEC will (ultimately) merge with and into NEC
Acquisition Corp., all as described more fully therein (as described in the
Letter of Intent, the "NEC Transaction"). UNF has requested the consent of the
Lenders to the NEC Transaction and the Lenders have agreed to consent thereto,
on the terms and conditions set forth herein.
Accordingly, the parties hereto hereby agree as follows:
Waivers and Amendments
Acquisition of over $5,000,000. Section 9.2.1(a) is hereby waived insofar as it
applies to the NEC Transaction.
Permitted Indebtedness. Section 9.2.3 is hereby waived insofar as it would
prohibit Indebtedness of NEC, provided that such Indebtedness of NEC shall not
exceed the following amounts: $20,000,000 of trade indebtedness incurred in the
ordinary course of business; and $1,500,000 of unsecured Indebtedness for
borrowed money.
Loans. Section 9.2.2 is hereby waived insofar as it would prohibit UNF from
making the $10,000,000 bridge loan to NEC as described in paragraph 4 of the
Letter of Intent, so long as UNF grants to the Agent a first priority security
interest in such loan and the collateral therefore simultaneously therewith
(including delivery of the note evidencing such loan and assignment of UCC
financing statements to Agent).
Availability. Section 9.2.1(c) is hereby waived for a period commencing on the
date hereof and continuing through and including the earlier of (1) February 14,
2003, and (2) any date on which refinancing of real estate owned by the
Borrowers and Guarantors is completed (provided that nothing set forth herein
shall be deemed to constitute the consent of the Agent or Lenders to such
refinancing).
Covenants and Agreements. In consideration of the Lenders' agreements set forth
herein, the Borrowers hereby agree as follows. The agreements set forth below
shall be deemed to constitute covenants under the Loan Agreement.
On or before the closing date, the Borrowers shall provide the following items
to the Agent, all in form and content satisfactory to the Agent, and duly
executed (where applicable) by all parties thereto:
a Joinder Agreement pursuant to which NEC Acquisition Corp. (the surviving
entity involved in the NEC Acquisition) shall become a "Borrower" for all
purposes under the Loan Agreement;
duly filed UCC financing statements which serve to perfect Agent's security
interest in all of NEC Acquisition Corp.'s personal property assets;
a stock pledge agreement pursuant to which UNF pledges 100% of the shares of NEC
Acquisition Corp. to Agent, together with stock powers and stock certificates to
perfect such pledge;
such other agreements as may be required by Agent (such as trademark security
agreements and the like) to ensure that Agent holds a duly perfected security
interest in all of NEC Acquisition Corp.'s assets;
a landlord's waiver for each location in which NEC Acquisition Corp. does
business or maintains assets;
evidence satisfactory to Agent (including UCC, tax lien and similar search
reports) that Agent holds a duly perfected, first priority security interest in
the assets of NEC Acquisition Corp., subject to no other Liens except as
permitted under the Loan Agreement;
confirmation that the bridge loan described in paragraph 4 of the Letter of
Intent is no longer outstanding;
evidence of corporate authorization of the transactions contemplated hereby,
together with legal opinions on behalf of NEC Acquisition Corp. and the
Borrowers Guarantors in scope consistent with the legal opinion delivered in
connection with the Loan Agreement;
updated casualty and liability insurance certificates with respect to NEC
Acquisition Corp. and its assets, consistent with the requirements set forth in
the Loan Agreement; and
payment of the reasonable fees and expenses of Agent's counsel in connection
with any of the transactions contemplated hereby.
UNF shall compete the NEC Transaction substantially in accordance with the terms
of the Letter of Intent without material amendment or waiver, not later than
December 31, 2002.
UNF agrees that Agent may complete a field exam with respect to the assets and
liabilities of NEC, including without limitation, inventory and accounts, on or
before the consummation of the NEC Transaction; and further agrees that if such
a field exam is not completed by such date, Agent may, in its discretion, impose
reserves or reduce advance rates with respect to NEC's inventory and accounts
used for purposes of calculating the Borrowing Base, until such a field exam is
completed.
Representations and Warranties. The Borrowers hereby represent and warrant as
follows:
Power, Authority, Etc. The Borrowers have the power and authority for
the making and performing of this Third Amendment. This Third Amendment has been
duly executed and delivered by or on behalf of the Borrowers pursuant to
authority legally adequate therefore, and this Third Amendment is in full force
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and effect and is a legal, valid and binding obligation of the Borrowers
enforceable in accordance with its terms subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws and equitable principles
affecting the enforcement of creditors' rights generally.
Incorporation of Representations and Warranties. The representations and
warranties of the Borrowers contained in the Loan Agreement, after giving effect
to the amendments thereto contemplated hereby, and except for any changes
resulting only from the passage of time, are true and correct on and as of the
date hereof as though made on and as of the date hereof and such representations
and warranties are hereto incorporated in this Third Amendment as though fully
set forth herein.
Corporate Purposes. The Borrowers hereby represent that the NEC Transaction is
within the UNFI's general corporate purposes.
Conditions Precedent. This Amendment and the Agent's and Lenders' obligations
hereunder shall not be effective until each of the following conditions are
satisfied (the "Amendment Effective Date"):
Borrowers, Agent and the Required Lenders shall have duly executed and delivered
this Amendment;
All requisite corporate action and proceedings of the Borrower in connection
with this Amendment shall be satisfactory in form and substance to Agent; and
There shall have occurred no Default or Event of Default under the Loan
Agreement.
Miscellaneous
Counterparts. This Third Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Third Amendment by signing any such
counterpart.
Force and Effect. Except as amended or modified by this Third Amendment, the
Loan Agreement and each of its terms and provisions, shall continue in full
force or effect.
Loan Document. This Third Amendment and all other documents executed in
connection herewith are "Loan Documents" as such term is defined in the Loan
Agreement. This Third Amendment and the other documents executed and delivered
in connection herewith set forth the entire agreement of the parties with
respect to the subject matter thereof and supersede any prior agreement and
contemporaneous oral agreements of the parties concerning their subject matter.
Reaffirmation. By executing this Third Amendment, the undersigned Guarantors
hereby assent to the execution and delivery of this Third Amendment and all
other instruments and documents required to be executed and delivered pursuant
thereto by the Borrowers, and to the performance by the Borrowers of their
agreements and obligations hereunder and there under. Guarantors further affirm
that neither the First Amendment to Loan and Security Agreement dated April 16,
2002, the Second Amendment to Loan and Security Agreement dated September 26,
2002 nor this Third Amendment nor the performance or consummation of any
transactions contemplated thereby shall limit, restrict, extinguish or otherwise
impair their agreements and obligations under the Guaranty Agreements, and
Guarantors hereby acknowledge and reaffirm such obligations. Guarantors
acknowledge, affirm and agree that the Guaranty Agreements are hereby ratified
and confirmed and benefit the Lenders under the Loan Agreement, as amended.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
BORROWERS: UNITED NATURAL FOODS, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Vice Chair and CEO
MOUNTAIN PEOPLE'S WAREHOUSE
INCORPORATED
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board, President, CEO
NUTRASOURCE, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board, President, CEO
Treasurer
RAINBOW NATURAL FOODS, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board, President
STOW XXXXX, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board, President
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UNITED NATURAL FOODS OF
PENNSYLVANIA, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board
GUARANTORS: NATURAL RETAIL GROUP, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair
UNITED NATURAL TRADING, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board
THE HEALTH HUT, INC.
By: ______________________________
Name: ________________________
Title: _______________________
ALBERT'S ORGANICS, INC.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chair of the Board
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AGENT: FLEET CAPITAL CORPORATION,
as Administrative Agent
By: /s/ XXX XXXXXX
Name: Xxx Xxxxxx
Title: Senior Vice President
LENDERS: FLEET CAPITAL CORPORATION, as a Lender
By: /s/ XXX XXXXXX
Name: Xxx Xxxxxx
Title: Senior Vice President
CITIZENS BANK OF MASSACHUSETTS, as a Lender
By: /s/ XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ XXXX X. XXXX
Name: Xxxx X. Xxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION, a Lender
By: /s/ XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title: Vice President
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NATIONAL CITY BANK, a Lender
By: ______________________________
Name: ________________________
Title: _______________________
FIRST PIONEER FARM CREDIT, ACA, a Lender
By: /s/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
ISRAEL DISCOUNT BANK
OF NEW YORK, a Lender
By: /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: First Vice President
By: /s/ XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Vice President
XXXXXXX BANK, a Lender
By: /s/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Vice President
SOVEREIGN BANK, a Lender
By: /s/ XXXXXXXXXXX X. XXXXXX
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President
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