Tentative Agreement with Weavers Way

For Ambler Food Co-op Members Only

PURCHASE AGREEMENT AND MEMBERSHIP TRANSFER AGREEMENT

This Purchase Agreement and Membership Transfer Agreement (this “Agreement”), dated as of February __, 2017 (the “Signing Date”), is between Weavers Way Cooperative Association, a Pennsylvania cooperative association (“WW”), and Ambler Food Coop, Inc., a Pennsylvania cooperative business corporation (“AFC”).

Background

WHEREAS, on the Signing Date, AFC will transfer, convey and assign to WW, and WW will acquire from AFC, on the terms and conditions set forth in this Agreement, all of the assets owned, leased or otherwise used by AFC (the “Asset Purchase”), including without limitation, all of its goodwill, tradenames, logo, member lists and addresses, telephone numbers, and fixed assets (the “Included Assets”), but excluding the Excluded Assets (as defined below); and

WHEREAS, on the business day following the Signing Date (or such other date as the parties may mutually agree), AFC and WW will effect a membership transfer (the date of such transfer, the “Membership Transfer Date”) to allow that each person who is a member of AFC as of the Membership Transfer Date (each, an “AFC Member” and collectively, the “AFC Members”): (a) becomes a full standing member of WW and (b) receives all benefits associated with such status as a member of WW (the “Membership Transfer”).

NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and covenants herein contained and intending to be legally bound hereby, agree as follows:

1. Completion.  The date of completion of the Membership Transfer shall be referred to as the “Completion Date”.  Items to be exchanged pursuant to this Agreement shall be delivered by hand, fax, pdf or other electronic exchange.

2. Asset Purchase; No Liabilities.  Subject to the terms and conditions set forth in this Agreement, on the Signing Date, AFC will transfer, convey and assign to WW, and WW will acquire from AFC, all right, title and interest in and to the Included Assets. The Included Assets shall not include (collectively, the “Excluded Assets”): (a) all rights of AFC under this Agreement, (b) cash and receivables of AFC and (c) the seal, corporate records, minute book and tax returns of AFC. WW shall not assume any obligations and liabilities of AFC of any kind, whether known or unknown, asserted or unasserted, absolute or contingent, whether currently existing or hereafter created, except as addressed in Section 5 below.

3. Documents to be Exchanged on the Signing Date.

A. On the Signing Date, AFC will deliver or cause to be delivered to WW the following:

i. a Bill of Sale, in a form mutually agreed to by the parties, duly executed by AFC (the “Bill of Sale”); and

ii. such other documents as may be required by the terms of this Agreement or as may be reasonably requested by WW or its counsel.

B. On the Signing Date, WW will deliver or cause to be delivered to AFC the following:

i. the Consideration (as defined below); and

ii. such documents as may be required by the terms of this Agreement or as may be reasonably requested by AFC or its counsel.

4. Consideration. The aggregate amount payable for the Included Assets (the “Consideration”) will be equal to the negative retained earnings of AFC as of the Signing Date in the amount of $________, plus $5,000.  The Consideration shall be delivered by WW to AFC on the Signing Date.

5. Cost Reimbursement. For the period commencing on the Signing Date and ending on the earlier of a dissolution of AFC or twelve months following the Completion Date, WW shall reimburse AFC for reasonable costs and expenses incurred in the normal course of business by AFC that arise out of, relate to or result from the business, operations, properties, assets or obligations, including income taxes and the costs of dissolving and winding up of AFC, whether existing or arising on or prior to the Completion Date or incurred subsequent to the Completion Date. WW’s foregoing obligation to reimburse certain costs and expenses of AFC shall (i) not arise until AFC has exhausted $5,000 of the Consideration and (ii) not exceed $10,000 in the aggregate.

6. Membership Transfer. On the Membership Transfer Date, AFC will convey to WW an amount of cash equal to the paid-in member equity of AFC (“Member Equity”), together with a documentary statement, upon which WW may rely, that sets forth the following: (a) the pro rata interests of each AFC Member, (b) which transferring AFC Members are or have been volunteers, members of the AFC board of directors and/or officers of AFC (collectively, the “Service Members”) and (c) which AFC Members received a “Together We Grow” $100 promotional card (such a documentary statement, the “Member List”).  The Service Members shall receive the designation as “working members” of WW and be entitled to the WW “working member discount” for one year from the opening of the Ambler Store (as defined below).  Upon delivery of the Member Equity and the Member List, WW will credit forthwith to the WW member equity account of each AFC Member, or to a new WW member equity account for any AFC Member who does not have an existing WW member equity account, an amount equal to the Member Equity belonging to each transferring AFC Member. On the Membership Transfer Date, (i) the AFC Members shall (a) become members in full standing of WW and (b) receive all benefits associated with membership in WW, including the right to stand for election to the board of directors of WW, and (ii) the Membership Transfer shall be complete.   WW shall credit the account of each AFC Member with an amount equal to his or her aggregate equity payments to AFC which occurred prior to the Membership Transfer Date.

7. WW Governance.

A. Prior to the execution of this Agreement, AFC created and established an advisory committee (the “Ambler Advisory Committee”) to represent the interests of AFC Members in AFC’s joint efforts with WW to establish an Ambler Store.  WW shall recognize and maintain the Ambler Advisory Committee as a WW management committee until at least one year after the Completion Date.  The members of the Ambler Advisory Committee, following the Completion Date, shall be comprised of (i) persons who were members of the Ambler Advisory Committee prior to the Completion Date and (ii) additional persons appointed by the AFC board of directors prior to the Completion Date. Following the Completion Date, the Ambler Advisory Committee may, at its discretion, elect additional members of the Ambler Advisory Committee.  WW shall use best efforts to engage AFC Members and the Ambler Advisory Committee in the development process of opening the Ambler Store, so as to ensure that the Ambler Store reflects the distinctive nature of the Ambler, PA, and Montgomery County, PA communities. WW will seek and take into account the opinions and responses of AFC Members and the Ambler Advisory Committee in the development of the Ambler Store, provided, however, that WW reserves the right to make final decisions regarding the Ambler Store.  

B. Beginning on the Completion Date, the Ambler Advisory Committee shall have the right to appoint two persons as non-voting representatives on WW’s board of directors (the “AFC Representatives”). The AFC Representatives will be permitted to participate in executive sessions of the WW board of directors involving the Ambler Store, except to the extent such sessions relate to disputes under this Agreement.  The AFC Representatives will remain as non-voting representatives on the WW board of directors until the Spring of 2018 election of members of the WW board of directors.  At such time, the AFC Representatives will cease to be members of the WW board of directors, provided, however, that they shall be eligible to be elected as voting members of the WW board of directors in accordance with the election procedures set forth in the WW Bylaws.

C. Following the Completion Date, WW may in its sole and absolute discretion, but shall not be obligated to, use the AFC logos and corporate identities for Ambler area audiences.

8. Lease.   On or prior to the Signing Date, WW shall have entered into one or more sublease agreements, each of which is attached hereto as Exhibit A (the “Sublease Agreement”), for the premises located at 217 E. Butler Avenue, Ambler, PA for the purpose of operating a food cooperative at such premises (the “Ambler Store”).  On the Completion Date, WW will deliver to the landlord a waiver of any feasibility period or other contingency required to effectuate the Sublease Agreement, and the Sublease Agreement shall thereafter be effectuated.

9. Tax Matters.  The parties will cooperate to agree upon and record asset values and goodwill arising from the Asset Purchase consistent with the requirements of 26 U.S. Code Section 1060 in a manner which reflects the value of the assets and is as tax advantageous to the parties as permitted by applicable law.

10. Representations and Warranties of AFC.  AFC hereby represents and warrants as follows:

A. AFC has good and valid title to, or a valid leasehold interest in, the Included Assets, free and clear of all claims, liens, mortgages, security interests, encumbrances and pledges of any nature.

B. AFC is a Pennsylvania cooperative business corporation subsisting under the laws of the Commonwealth of Pennsylvania.  AFC has the power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement.

C. The execution, delivery and performance of this Agreement and the other documents referenced in this Agreement to which AFC is a party have been duly authorized by all requisite corporate proceedings of AFC, including the approval of AFC’s board of directors and, when so delivered, constitute legal, valid and binding obligations of AFC, enforceable against AFC in accordance with such document’s respective terms, except as such enforceability may be limited by applicable bankruptcy, moratorium, fraudulent conveyance, insolvency or other similar laws affecting the rights of creditors generally and the availability of equitable remedies (whether as a proceeding in equity or at law).

D. The execution, delivery and performance of this Agreement and the other documents referenced in this Agreement to which AFC is a party and the consummation of the transactions contemplated hereby and thereby do not conflict with or result in a breach of, or default under, any of the terms, provisions or conditions of AFC’s Articles of Incorporation, Bylaws, or any statute, regulation, or court or administrative order or process applicable to AFC or any agreement or contract to which AFC is a party, except, in each case, where any such conflict, breach or default would not result in a material adverse effect on the business or condition (financial or otherwise) of AFC.  Except for such consents, approvals, waivers or authorizations obtained in advance of the Signing Date, no consent, approval, waiver or authorization is required to be obtained by AFC from any governmental authority or the AFC Members in connection with the execution, delivery and performance by AFC of this Agreement and the consummation of the transactions contemplated hereby.

E. There is no suit, claim, action or proceeding now pending or, to the actual knowledge of AFC, threatened before any court, administrative or regulatory body, or any governmental agency, against AFC which may result in any judgment, order, decree, liability or other determination that will (i) have a material adverse effect upon the business or conditions (financial or otherwise) of AFC, or (ii) prevent the consummation of the transactions contemplated by this Agreement.

F. AFC has complied in all material respects with all applicable laws and regulations of federal, state and local governments and all agencies thereof which affect the business or any owned or leased properties of AFC and to which AFC may be subject, and there are no currently pending or, to the best of AFC’s actual knowledge, threatened investigations, probes or claims by any such governments or agencies against AFC alleging or investigating a possible violation of any such law or regulation.

11. Representations and Warranties of WW.  WW hereby represents and warrants as follows:

A. WW is a Pennsylvania cooperative association duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania.  WW has the power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement.

B. The execution, delivery and performance of this Agreement and the other documents referenced in this Agreement to which WW is a party have been duly authorized by all requisite proceedings of WW, including the approval of WW’s board of directors and, when so delivered, constitute legal, valid and binding obligations of WW, enforceable against WW in accordance with such document’s respective terms, except as such enforceability may be limited by applicable bankruptcy, moratorium, fraudulent conveyance, insolvency or other similar laws affecting the rights of creditors generally and the availability of equitable remedies (whether as a proceeding in equity or at law).

C. The execution, delivery and performance of this Agreement and the other documents referenced in this Agreement to which WW is a party and the consummation of the transactions contemplated hereby and thereby do not conflict with or result in a breach of, or default under, any of the terms, provisions or conditions of WW’s Articles of Incorporation, Bylaws, or any statute, regulation, or court or administrative order or process applicable to WW or any agreement or contract to which WW is a party, except, in each case, where any such conflict, breach or default would not result in a material adverse effect on the business or condition (financial or otherwise) of WW. No consent, approval, waiver or authorization is required to be obtained by WW from any governmental authority or WW members in connection with the execution, delivery and performance by WW of this Agreement and the consummation of the transactions contemplated hereby.

D. There is no suit, claim, action or proceeding now pending or, to the actual knowledge of WW, threatened before any court, administrative or regulatory body, or any governmental agency, against WW which may result in any judgment, order, decree, liability or other determination that will (i) have a material adverse effect upon the business or conditions (financial or otherwise) of WW, or (ii) prevent the consummation of the transactions contemplated by this Agreement.

E. WW has complied in all material respects with all applicable laws and regulations of federal, state and local governments and all agencies thereof which affect the business or any owned or leased properties of WW and to which WW may be subject, and there are no currently pending or, to the best of WW’s actual knowledge, threatened investigations, probes or claims by any such governments or agencies against WW alleging or investigating a possible violation of any such law or regulation.

F. The WW membership interests created by the Membership Transfer will be duly authorized and validly issued, and will have rights consistent with all other WW memberships as of the date of the Membership Transfer.

12. Indemnification. For a period of twelve months following the Completion Date, WW shall indemnify, defend and hold harmless AFC from and against any and all third party allegations, claims, actions, suits, demands, damages, liabilities, obligations, losses, settlements, judgments, costs and expenses that arise out of, relate to or result from (a) the business, operations, properties, assets or obligations of AFC conducted, existing or arising on or prior to the Completion Date, and (b) any breach or violation of this Agreement by WW. Notwithstanding the foregoing, the aggregate amount of WW’s obligations for any claims made pursuant to this Section shall not exceed $50,000.

13. Documents to be Exchanged on the Signing Date.

A. On the Signing Date, AFC will deliver or cause to be delivered to WW resolutions of the board of directors of AFC authorizing the execution and delivery of this Agreement and the other documents referenced in this Agreement to which AFC is a party, along with a certificate of the Secretary (or equivalent officer) of AFC certifying to WW that such copy is a true, correct and complete copy of such resolutions, and that such resolutions were duly adopted and have not been amended or rescinded.

B. On the Signing Date, WW will deliver or cause to be delivered to AFC (i) resolutions of the board of directors of WW authorizing the execution and delivery of this Agreement and the other documents referenced in this Agreement to which WW is a party, along with a certificate of the Secretary (or equivalent officer) of WW certifying to AFC that such copy is a true, correct and complete copy of such resolutions, and that such resolutions were duly adopted and have not been amended or rescinded, and (ii) a written statement confirming that all items needed to waive any feasibility period or other contingency in the Sublease Agreement have been obtained or satisfied, other than with respect to the Asset Purchase and Membership Transfer,  along with a certificate of the Secretary (or equivalent officer) of WW certifying to AFC that such statement is true, correct and complete.

14. Notices.  Any and all notices or communications required or permitted to be given under any of the provisions of this Agreement shall be in writing and either delivered personally or by Federal Express, UPS or any other national overnight delivery service, with proper charges prepaid, to the following:    

In the case of WW:

Weavers Way Cooperative

 

559 Carpenter Lane

 

Philadelphia, PA 19119

 

Attention:  Jon Roesser, General Manager

In the case of AFC:

Ambler Food Coop, Inc.

 

 

 

 

 

Attention:  Kathleen Casey, President

Each party may update its address for notices by notice delivered to the other party pursuant to this Section.  All such notices and other communications shall be deemed given when personally delivered or, if sent by overnight delivery service, on the next business day after the mailing thereof.

15. Conditions to Obligations of WW and AFC. The obligations of WW and AFC to consummate the transactions contemplated under this Agreement shall be subject to the satisfaction (or waiver, in whole or in part, to the extent permitted by applicable law, by the receiving party or both parties, as applicable, in its sole discretion) at or prior to the Completion Date of each of the following conditions:

A. AFC has delivered the Member Equity and Member List pursuant to Section 6.

B. WW has delivered the WW member equity pursuant to Section 6.

C. The requisite number of AFC Members have approved the transaction, and such approval has not been amended or rescinded.

D. The parties have delivered all consideration and documents required to be delivered pursuant to Sections 3, 8 and 13.

16. Termination; Effect of Termination.  This Agreement may be terminated as follows:

A. by mutual written consent of WW and AFC at any time prior to the Completion Date.

B. by WW, if AFC shall have breached any representation or warranty or failed to perform any covenant or agreement set forth in this Agreement or any representation or warranty of AFC shall have become untrue, in any case such that the conditions set forth in Section 15 would not be satisfied, and such breach shall not be curable, or, if curable, shall not have been cured within 10 days after written notice of such breach is given to AFC by WW; provided, however, that WW may not terminate this Agreement under this Section 16(B) if it is then in breach of any representation, warranty, covenant or agreement set forth in this Agreement such that AFC would then be entitled to terminate this Agreement under Section 16(C).

C. by AFC, if WW shall have breached any representation or warranty or failed to perform any covenant or agreement set forth in this Agreement or any representation or warranty of WW shall have become untrue, in any case such that the conditions set forth in Section 15 would not be satisfied, and such breach shall not be curable, or, if curable, shall not have been cured within 10 days after written notice of such breach is given to WW by AFC; provided, however, that AFC may not terminate this Agreement under this Section 16(C) if it is then in breach of any representation, warranty, covenant or agreement set forth in this Agreement such that WW would then be entitled to terminate this Agreement under Section 16(B).

D. by either AFC or WW, immediately, upon written notice, if the Completion Date does not occur on or before five (5) business days following the Signing Date.

Upon termination of this Agreement, this Agreement shall become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the parties hereto, provided, however, that such termination shall not relieve any party hereto of any liability or damages incurred or suffered by a party, to the extent such liabilities or damages were the result of a material breach by the other party of any of its representations, warranties, covenants or other agreements set forth in this Agreement. Immediately following the termination of this Agreement, AFC shall return the Consideration to WW, the Bill of Sale shall be terminated and the Asset Purchase shall be reversed.

17. Miscellaneous.

A. This Agreement, together with the other agreements referred to in this Agreement, constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified, amended or terminated, except by a written agreement signed by AFC and WW.

B. Except as expressly provided in this Agreement, neither party has made any representation or warranty to the other party, and no party has relied on any representation, warranty, undertaking or agreement not set forth herein.   

C. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  WW and AFC shall not assign their respective rights hereto without the express written consent of the other party.  Any attempted assignment in violation of this Section shall be null and void and of no effect.

D. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, notwithstanding the choice of law rules of such jurisdiction or any other jurisdiction.

E. This Agreement is the result of the joint efforts of the parties and each provision has been subject to the mutual negotiation and agreement of the parties and there shall be no construction against any such party based on any presumption of that party’s involvement in the drafting of this Agreement.

F. The provisions of this Agreement are independent of and separable from each other and in case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

G. The section headings used in this Agreement are for convenience only and are not intended to define or limit the contents or substance of any such section.

H. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original and all of which when taken together shall constitute one and the same instrument.  Any counterpart signature page delivered by pdf or facsimile transmission shall be deemed to be and have the same force and effect as an originally executed signature page.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties have caused this Purchase Agreement and Membership Transfer Agreement to be executed as of the day and year first above written.

 

AMBLER FOOD COOP, INC.

 

 

By:  

Name:  Kathleen Casey

Title:  President

 

 

WEAVERS WAY COOPERATIVE ASSOCIATION

 

 

By:  

Name: Jon Roesser

Title:  General Manager