Exhibit 4c
SENECA FOODS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As of September 26, 1997
To Each Purchaser Listed
on Annex I Attached Hereto
Ladies and Gentlemen:
The undersigned, Seneca Foods Corporation, a New York corporation
(herein called the "COMPANY"), hereby agrees with each of the Purchasers as
follows:
1. THE NOTES.
1A. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue of its senior promissory notes in the aggregate principal amount of
$15,000,000, to be dated the date of issue thereof, to mature September 26,
2004, to bear interest on the unpaid balance thereof from the date thereof until
the principal thereof shall have become due and payable at the rate of 9.17% per
annum and on overdue payments at the rate specified therein, and, in each case,
to be substantially in the form of Exhibit A attached hereto. The term "NOTE" or
"NOTES" as used herein shall include each such senior promissory note delivered
pursuant to any provision of this Agreement and each such senior promissory note
delivered in substitution or exchange for any other Note pursuant to any such
provision.
1B. SECURITY FOR THE NOTES. The Notes are to be secured by, and to have
the benefit of, a pledge of and grant of a first priority security interest in
the Collateral under and pursuant to the Pledge Agreement.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to
each Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company one or more Notes in the aggregate
principal amount specified in the Purchaser Schedule hereto at 100% of such
aggregate principal amount. The Company will deliver to each Purchaser, at the
offices of King & Spalding, New York, New York, one or more Notes registered in
such Purchaser's name, evidencing the principal amount of Notes to
be purchased by such Purchaser and in the denomination or denominations
specified in the Purchaser Schedule attached hereto, against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the Company's account #000-029-134-4 at The Chase Manhattan Bank, Rochester, New
York, ABA #▇▇▇-▇▇▇-▇▇▇ on the date of closing, which shall be September 26, 1997
or any other date on or before September 26, 1997 upon which the Company and the
Purchasers may mutually agree (herein called the "CLOSING" or the "DATE OF
CLOSING").
3. CONDITIONS PRECEDENT. The obligation of the Purchasers to enter
into, execute and deliver this Agreement and purchase the Notes as described in
paragraph 2 is subject to the satisfaction, on or before the Date of Closing, of
the following conditions, as determined in sole judgment of the Purchasers:
3A. RELATED DOCUMENTS. Each Purchaser shall have received each of
the following documents duly executed and delivered by the parties thereto:
(i) Amendment No. 2 to Pledge Agreement;
(ii) Pillsbury Acknowledgment;
(iii) the Subordination Letter; and
(iv) Intercreditor Agreement.
Each of the foregoing agreements shall be in full force and effect on the Date
of Closing and each party thereto shall be in full compliance with its
obligations thereunder.
3B. OPINION OF PURCHASER'S SPECIAL COUNSEL. Each Purchaser shall have
received from King & Spalding, who are acting as special counsel for the
Purchasers in connection with this transaction, a favorable opinion satisfactory
to the Purchasers as to such matters incident to the matters herein contemplated
as the Purchasers may reasonably request.
3C. OPINIONS OF COUNSEL. Each Purchaser shall have received from (i)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Mugel, LLP, counsel to the Company, a favorable opinion in
form and content satisfactory to the Purchasers and in substantially the form of
Exhibit B hereto, (ii) a reliance letter in connection with the opinions of (x)
▇▇▇▇▇▇ & Whitney, delivered in connection with the 1995 Note Agreement and (y)
the General Counsel of Pillsbury and the Senior Entity, delivered in connection
with the 1995 Note Agreement.
3D. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 shall be true on and as of the Date of
Closing, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Date of Closing no Event of Default or
Default; and the Company shall have delivered to each Purchaser a certificate of
a Principal Officer, dated the Date of Closing, regarding the foregoing.
3E. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased on the Date of Closing on the terms and conditions
herein provided (including the use of the proceeds of such Notes) shall not
violate any applicable law or governmental regulation (including, without
limitation, section 5 of the Securities Act or Regulation G, T or X of the Board
of Governors of the Federal Reserve System) and shall not subject such Purchaser
to any tax (other than any tax on income earned), penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation. The Notes shall on the Date of Closing qualify as a legal investment
for such Purchaser under applicable insurance law (without regard to any
"basket" or "leeway provisions"), and such acquisition shall not subject such
Purchaser to any penalty or other onerous condition contained in or pursuant to
any such law or regulation. Such Purchaser shall have received such certificates
or other evidence as such Purchaser may request to establish compliance with
this condition.
3F. PROCEEDINGS. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to the Purchasers,
and each Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as a Purchaser may reasonably
request. In this connection, the Company shall deliver to each Purchaser:
(i) copies of the certificate or articles of incorporation
(certified as of a recent date by the Secretary of the State of its
incorporation) and its by-laws (certified by its Secretary) as in
effect on the Date of Closing;
(ii) certified copies (certified by its Secretary) of all
corporate action taken by it to authorize the execution, delivery and
performance of any Related Document to which it is a party; and
(iii) certificates of incumbency and specimen signatures with
respect to each of its officers who are authorized to execute and
deliver any Related Document to which it is a party.
3G. CERTIFICATES OF GOOD STANDING/QUALIFICATION TO DO BUSINESS.
Each Purchaser shall have received a good standing certificate issued by the
Secretary
of State of the State of incorporation of the Company and its Subsidiaries
(other than Seneca Foods International, Ltd.), as the case may be, and
certificates of qualification to do business as a foreign corporation in
jurisdictions specified in Schedule 3G, each dated as of a date not more than
thirty days prior to Closing.
3H. NO MATERIAL ADVERSE CHANGE. Each Purchaser shall have received a
certificate from a Principal Officer of the Company dated the Date of Closing to
the effect that no material adverse change in the financial condition, business,
operations or prospects of the Company or its Subsidiaries has occurred since
March 31, 1996.
3I. PRIVATE PLACEMENT NUMBERS. The Company shall have obtained or
caused to be obtained private placement numbers for the Notes from the CUSIP
Service Bureau of Standard & Poor's and each Purchaser shall have been informed
of such private placement numbers.
3J. PERFECTION OF LIENS. All actions necessary to perfect the Liens of
the Collateral Agent in the Collateral (including, without limitation, the
filing of appropriate financing statements and the recording of all appropriate
documents with public officials) shall have been taken in accordance with the
terms and provisions of the Pledge Agreement and confirmation thereof received
by each Purchaser. The Liens of the Collateral Agent in the Collateral shall be
valid, enforceable and perfected and the Collateral shall be subject to no other
Liens not otherwise acceptable to each Purchaser.
3K. PILLSBURY AGREEMENTS. Each Purchaser shall have received a true,
correct and duly authorized and executed copy of each of the Pillsbury
Agreements and each other principal document between Pillsbury and the Company,
including all schedules and exhibits thereto and side letters, if any, affecting
the terms thereof or delivered in connection therewith, together with all
amendments and waivers thereto, accompanied by a certificate of a Principal
Officer dated the Date of Closing of the Company to such effect. No material
provision of any of the foregoing agreements shall have been amended,
supplemented or otherwise modified or waived without the prior written consent
of each Purchaser.
3L. MATERIAL AGREEMENTS. Each Purchaser shall have received a true,
correct and duly executed copy of each of the Material Agreements specified on
Schedule 3L, including all schedules and exhibits thereto and side letters, if
any, affecting the terms thereof or delivered in connection therewith, together
with all amendments and waivers thereto and any documents, instruments or
certificates executed and delivered in connection therewith accompanied by a
certificate of a Principal Officer dated the Date of Closing of the Company to
such effect.
3M. EXPENSES. All of the reasonable fees and disbursements of each
Purchaser (including without limitation special counsel to the Purchasers) shall
have been paid in full.
3N. OTHER DOCUMENTS. Each Purchaser shall have received such other
certificates, legal opinions and documents as such Purchaser or special counsel
to the Purchasers may reasonably request, all in form and substance reasonably
satisfactory to each Purchaser.
4. PREPAYMENTS. The Notes shall be subject to prepayment with
respect to the required prepayments specified in paragraph 4A, as applicable,
and the optional prepayments permitted by paragraph 4B.
4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Notes, without premium, the sum
opposite the dates set forth below on such dates:
$3,000,000 September 26, 2000
$3,000,000 September 26, 2001
$3,000,000 September 26, 2002
$3,000,000 September 26, 2003
and such principal amounts of the Notes, together with interest thereon to the
prepayment dates, shall become due on such prepayment dates. The remaining
$3,000,000 principal amount of the Notes, together with interest accrued
thereon, shall become due on the maturity date of the Notes on September 26,
2004.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall
be subject to prepayment, in whole at any time or from time to time in part (in
multiples of $250,000), at the option of the Company, at 100% of the principal
amount so prepaid plus interest thereon to the prepayment date and the
Yield-Maintenance Amount, if any, with respect to each Note. Any partial
prepayment of the Notes pursuant to this paragraph 4B shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates. Any prepayment made by the Company pursuant to any other
provision of this paragraph 4, shall not reduce or otherwise effect its
obligations to make any prepayment required by paragraph 4A.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of
each Note irrevocable written notice of any prepayment pursuant to paragraph 4B
not less than 10 Business Days prior to the prepayment date, specifying such
prepayment date and the principal amount of the Notes, and of the
Notes held by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B. Notice of prepayment having
been given as aforesaid, the principal amount of the Notes specified in such
notice, together with interest thereon to the prepayment date and together with
the Yield-Maintenance Amount, if any, with respect thereto, shall become due and
payable on such prepayment date.
4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the
Notes, the principal amount so prepaid shall be allocated to all Notes having
the same maturity date, interest rate and payment terms (all Notes in any such
issue being referred to as the "SERIES NOTES") at the time outstanding
(including, for the purpose of this paragraph 4D only, all such Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or Affiliates other than by prepayment pursuant to paragraph
4A) in proportion to the respective outstanding principal amounts of such Series
Notes. All prepayments of the Notes and any other payments on account of the
Notes or hereunder or any other Related Document shall be made not later than
12:00 noon, Eastern time, on the date when due.
4E. RETIREMENT OF NOTES. The Company shall not and shall not permit any
of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment in
accordance with paragraphs 4A or 4B or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire directly or
indirectly, any Series Note held by any holder unless the Company or such
Subsidiary or Affiliate shall have offered to prepay or otherwise retire or
purchase or otherwise acquire, as the case may be, the same proportion of the
aggregate principal amount of Series Notes held by each other holder of such
Notes at the time outstanding upon the same terms and conditions. Any Notes so
prepaid or otherwise retired or purchased or otherwise acquired by the Company
or any of its Subsidiaries or Affiliates shall not be deemed to be outstanding
for any purpose under this Agreement, except as provided in ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇. CHANGE IN CONTROL. If within 30 Business Days of the date on which
a Significant Holder has knowledge that a Change of Control Event has occurred a
Purchaser shall request that the Company prepay in full the Notes held by such
Purchaser, the Company shall pay within 10 Business Days of such request to such
Purchaser an amount equal to the aggregate outstanding principal amount of such
Notes, together with interest thereon to the prepayment date and
Yield-Maintenance Amount, if any, with respect thereto. Each Purchaser may at
any time by notice in writing to the Company (subject to the following proviso)
irrevocably relinquish its right (but not the right of any subsequent holder) to
request the repurchase of its Notes under this paragraph 4F, provided that such
relinquishment shall automatically become ineffective upon receipt by the
Company of a request from any other holder of any Notes for the repurchase of
such Notes in accordance with this paragraph 4F. Upon receipt by the Company of
such a request for repurchase, the Company shall provide, within 5 Business
Days, notice of such request to the Purchasers, including any Purchaser that has
irrevocably relinquished the right to request repurchase under this ▇▇▇▇▇▇▇▇▇
▇▇.
4G. PILLSBURY PAYMENTS. If a Termination Event (as defined in the
Pledge Agreement) shall occur, the Company shall prepay the Notes in an amount
equal to each Purchaser's Percentage Interest (as defined in the Intercreditor
Agreement) of the aggregate amount of payments made by Pillsbury to the Company
on the date of such Termination Event in satisfaction of any account receivable
owed by Pillsbury to the Company.
5. AFFIRMATIVE COVENANTS.
5A. REPORTING REQUIREMENTS.
5A(1) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company covenants
that it will deliver to each Significant Holder in duplicate:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year,
(1) Consolidated statements of income and cash flows
of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of each such
quarterly period, and
(2) a Consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and satisfactory in form to the Significant Holders and
certified by an authorized financial officer of the Company, subject to
changes resulting from normal year-end adjustments; provided, however,
that delivery (within the time period specified above) of the Quarterly
Report on Form 10-Q of the Company for such quarterly period filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i);
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year,
(1) consolidating and Consolidated statements of
income and cash flows and stockholders' equity of the Company
and its Subsidiaries for such year, and
(2) a consolidating and Consolidated balance sheet of
the Company and its Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding
Consolidated figures from the preceding annual audit, all in reasonable
detail and satisfactory in form to the Required Holder(s) and, as to
the Consolidated statements, reported on by independent public
accountants of recognized standing selected by the Company whose report
shall be without limitation as to the scope of the audit and
satisfactory in substance to the Required Holder(s); provided, however,
that delivery (within the time period specified above) of the Annual
Report of the Company on Form 10-K for such fiscal year filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders and copies of all registration
statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission)
and copies of all press releases reporting financial results of the
Company or any of its Subsidiaries or any material development with
respect to the Company or any of its Subsidiaries;
(iv) promptly upon receipt thereof, the Annual Pack Plan to be
delivered pursuant to Section 4.1 of the Alliance Agreement and all
adjustments thereto and a reconciliation report dated as of the
Company's fiscal year-end setting forth, among other things, any
adjustments to Transfer Prices (as defined in the Alliance Agreement)
and the Management Fee (as defined in the Alliance Agreement) and such
other information with respect to or delivered in connection with the
Alliance Agreement as such Significant Holder may reasonably request;
(v) promptly upon completion, the Seneca Projection prepared
in accordance with Section 4.2 of the Alliance Agreement;
(vi) as soon as practicable and in any event within 45 days
after the end of each of the first three quarterly periods of the
current fiscal year and within 90 days after the end of the last
quarterly period of the current fiscal year, with respect to the
Central Division (as defined in the Alliance Agreement), a balance
sheet, a profit and loss statement and a statement of cash flows, in
each case, in reasonable detail and specifying separately the financial
information attributable to the Alliance Agreement and any amounts
Pillsbury would be required to pay pursuant to Section 19.2(a) of the
Alliance Agreement if a termination was effective as of the last day of
the applicable quarterly period assuming a termination by Pillsbury
pursuant to Section 19.1(a)(i) of the Alliance Agreement;
(vii) promptly upon receipt thereof, notice of receipt of each
other report submitted to the Company or any Subsidiary after the Date
of Closing by independent accountants in connection with any annual,
interim or special audit made by such accountants of the books of the
Company or any such Subsidiary addressed to the Board of Directors of
the Company or any committee thereof and, upon request of a Significant
Holder, an opportunity to review the same at the offices of the
Company;
(viii) promptly and in any event, within twenty days, with
respect to the Pillsbury Agreements, and within ten days with respect
to the Bank Facility, after the Company knows or has reason to know (A)
of any material failure to perform, breach or default by any party to
the Pillsbury Agreements, or any other event of default, under any of
the Pillsbury Agreements, or (B) of any event of default, or any event
or condition which with notice or lapse of time or both would
constitute an event of default under the Bank Facility; and
(ix) Within 10 days after the date as of which financial
information is required to be delivered pursuant to clause (i) of this
paragraph 5A(1), a report as of the end of the Fiscal Quarter covered
by such financial information setting forth the Company's sales, for
such Fiscal Quarter and for the current year to date, and inventory, as
of the end of such Fiscal Quarter, separately for all of its Green
Giant brand products and for all other products; and
(x) with reasonable promptness, such other financial data as
such Significant Holder may reasonably request.
5A(2) OFFICER'S CERTIFICATE. Together with each delivery of the
financial statements required by clauses (i) and (ii) of paragraph 5A(1) above,
the Company shall deliver a certificate of a Principal Officer (with
computations in reasonable
detail) demonstrating compliance with paragraphs 6A, 6B and 6C(1) through 6C(3)
and setting forth (except to the extent specifically set forth in such financial
statements) the aggregate amount of interest accrued on each of Funded Debt and
Current Debt (without duplication) of the Company and Subsidiaries (if any)
during the fiscal period covered by such financial statements and the aggregate
amounts of depreciation on physical property charged on the books of the Company
and Subsidiaries (if any) during such fiscal period, and identifying the 45 days
selected by the Company for purposes of the defined term "FUNDED DEBT" and
stating that there exists no Event of Default or Default, or, if any Event of
Default or Default exists, specifying the nature and period of existence thereof
and what action the Company proposes to take with respect thereto.
5A(3) ANNUAL ACCOUNTANT'S LETTER. Together with each delivery of
financial statements required by clause (ii) of paragraph 5A(1) above, the
Company will deliver to each Significant Holder a certificate of such
accountants stating that, in making the audit necessary for their report on such
financial statements, they are familiar with the respective terms of this
Agreement and the Alliance Agreement and have obtained no knowledge of any Event
of Default or Default, or, if they have obtained knowledge of any Event of
Default or Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
5A(4) SPECIAL INFORMATION. The Company also covenants that forthwith
upon a Principal Officer of the Company obtaining knowledge of:
(i) an Event of Default or Default;
(ii) the commencement of any Strategic Review Board (as
defined in the Alliance Agreement) review related to any dispute under
the Alliance Agreement and material development with respect to such
dispute;
(iii) a notice of termination delivered by Pillsbury pursuant
to the Alliance Agreement;
(iv) a material adverse change in the financial condition,
business or operations of the Company and its Subsidiaries, taken as a
whole;
(v) the institution of legal proceedings against the Company
and/or any Subsidiary, which has a reasonable possibility of materially
adversely affecting the financial condition, business or operations of
such Company and its Subsidiaries, taken as a whole, or which in any
manner
draws into question the validity of or has a reasonable possibility of
impairing the ability of the Company to perform its obligations under
this Agreement or any other Related Document to which it is a party; or
(vi) any (A) Environmental Liabilities which individually or
in the aggregate could have a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole, (B) pending, threatened or anticipated
Environmental Proceedings which if decided adversely could have a
material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries, taken as
a whole, (C) Environmental Notices, (D) Environmental Judgments and
Orders, or (E) Environmental Releases at, on, in, under or in any way
materially affecting the Properties;
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto.
5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to the reporting requirements of section 13 or 15(d)
of the Exchange Act. For the purpose of this paragraph 5B, the term "QUALIFIED
INSTITUTIONAL BUYER" shall have the meaning specified in Rule 144A under the
Securities Act.
5C. INSPECTION OF PROPERTY. The Company covenants that it will permit
any Person designated by any Significant Holder in writing, at such Significant
Holder's expense, to visit and inspect any of the properties of the Company and
its Subsidiaries, to examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts therefrom and
to discuss the affairs, finances and accounts of any of such corporations with
the Principal Officers of the Company and its independent public accountants,
all at such reasonable times and as often as such Significant Holder may
reasonably request.
5D. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), it
will make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Debt thereby
secured so long as any such other Debt shall be so secured.
5E. GUARANTEED OBLIGATIONS. The Company covenants that if, at any time,
after the date hereof, it or any of its Subsidiaries incurs or permits to exist
any Debt or other obligation (other than a performance bond or trade letter of
credit or letter of credit issued with respect to insurance coverages or like
financial accommodation and, in any case, issued in the ordinary course of
business) Guaranteed or collateralized in any other manner by any other Person,
it will simultaneously cause such other Person to execute and deliver to each
holder of any Note a guaranty agreement in form and substance reasonably
satisfactory to such holder guaranteeing payment of the principal amount of the
Notes and any premium and interest thereon, which bears the same ratio to the
total unpaid principal amount of the Notes as the amount of such other
obligation which is guaranteed bears to the total unpaid principal amount of
such other obligation, or if such other obligation is collateralized, to
collateralize the Notes equally and ratably with such other obligation;
provided, however, that the provisions of this paragraph 5E shall not apply to
guaranties or collateral provided by an industrial development agency or other
governmental agency or entity in connection with any financing or
sale-and-leaseback transaction involving that agency or entity which is not
prohibited by other provisions of this Agreement.
5F. CORPORATE EXISTENCE, ETC. Subject to the provisions of paragraph
6C(5), the Company covenants that it will at all times preserve and keep in full
force and effect its corporate existence, and rights and franchises material to
its business, and those of each of its Subsidiaries and will qualify, and cause
each of its Subsidiaries to qualify, to do business in any jurisdiction where
the failure to do so would have a material adverse effect on the financial
condition or operations of the Company and its Subsidiaries taken as a whole,
provided that the corporate existence of any such Subsidiary may be terminated,
if, in the good faith judgment of the Board of Directors of the Company, such
termination is in the best interests of the Company and is not disadvantageous
to the holders of any of the Notes.
5G. PAYMENT OF TAXES AND CLAIMS. The Company covenants that it will,
and will cause each of its Subsidiaries to, pay before they become delinquent:
(i) all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any
of its
franchises, business, income or property before any penalty or
significant interest accrues thereon, and
(ii) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due
and payable and which by law have or may become a Lien upon any of its
properties or assets;
provided, that items of the foregoing need not be paid which are being contested
in good faith by appropriate proceedings and if such accrual, reserve or other
appropriate provision, if any, as shall be required by generally accepted
accounting principles shall have been made therefor.
5H. COMPLIANCE WITH LAWS, ETC. The Company covenants that it will
comply and cause its Subsidiaries to comply with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
except where the necessity of compliance is being contested in good faith by
appropriate proceedings and adequate reserves or other provisions therefor shall
have been established on the books of the Company in accordance with generally
accepted accounting principles or where the failure to comply would not
materially adversely affect the financial condition or operations of the Company
and its Subsidiaries taken as a whole.
5I. NO INTEGRATION. The Company covenants that it has taken and will
continue to take all necessary steps so that the issuance of the Notes has not
and will not require registration under the Securities Act. The Company
covenants that no future offer and sale of debt securities of the Company of any
class will be made if, as a result of the doctrine of "integration", there is a
reasonable possibility that such offer and sale would result in the loss of the
entitlement of the Notes to the exemption from the registration requirements of
the Securities Act.
5J. MAINTENANCE OF INSURANCE. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including, but not limited to, product liability and public liability) and in
such amounts as is customary in the case of similarly situated corporations
engaged in the same or similar businesses and in any event reasonably acceptable
to the Required Holder(s).
5K. REDUCTION IN BANK FACILITY DEBT. The Company covenants that its
outstanding principal indebtedness under the Bank Facility will not exceed
$30,000,000 for a continuous period of not less than 30 days within each of the
following periods:
November 1, 1997, through April 30, 1998; and
November 1, 1998, through April 30, 1999.
5L. OTHER COVENANTS. If (in the reasonable opinion of the Required
Holders) at any time and from time to time, after the date hereof, any of the
covenants, representations and warranties or events of default, or any other
material term or provision (other than any term or provision relating to payment
terms, interest rates or penalties), contained in the Bank Facility, or in any
document, agreement or instrument from time to time entered into by the Company
in respect thereof, is more favorable to the banks under the Bank Facility than
are the terms of this Agreement to the holders of the Notes, this Agreement
shall be amended to contain each such more favorable covenant, representation
and warranty, event of default, term or provision, and the Company hereby agrees
to so amend this Agreement and to execute and deliver all such documents
requested by the Required Holder(s) to reflect such Amendment. Prior to the
execution and delivery of such documents by the Company, this Agreement shall be
deemed to contain each such more favorable covenant, representation and
warranty, event of default, term or provision for purposes of determining the
rights and obligations hereunder.
6. NEGATIVE COVENANTS.
6A. CURRENT RATIO AND INTEREST COVERAGE. The Company covenants
that it will not permit at any time:
(i) the ratio of Current Assets to Current Liabilities to be
less than 1.25 to 1.0 for each Fiscal Quarter ending September and
December and 1.50 to 1.0 for all other Fiscal Quarters;
(ii) the Interest Coverage Ratio for its four consecutive
Fiscal Quarters most recently ended during any period specified below
to be less than the ratio set forth opposite such period:
June 28, 1997 through December 31, 1997 1.75 to 1
January 1, 1998 through March 31, 1999 2.00 to 1
April 1, 1999 through March 31, 2001 2.20 to 1
April 1, 2001 and thereafter 2.40 to 1
(iii) at any time, the excess of Current Assets over Current
Liabilities during any period specified below to be less than the
amount set forth opposite such period:
March 31, 1997 through March 31, 1998 $90,000,000
April 1, 1998 through March 31, 1999 $100,000,000
April 1, 1999 and thereafter $110,000,000
6B. DIVIDEND LIMITATION. The Company covenants that it will not (a) pay
or declare any dividend on any class of its stock or make any other distribution
on account of any class of its stock, or redeem, purchase or otherwise acquire,
directly or indirectly, any shares of its stock (all of the foregoing being
herein called "RESTRICTED PAYMENTS"), or (b) make any Restricted Investment,
except out of Consolidated Net Earnings Available For Restricted Payments.
"CONSOLIDATED NET EARNINGS" shall mean consolidated gross revenues of the
Company and its Subsidiaries, less all operating and non-operating expenses of
the Company and its Subsidiaries, including all charges of a proper character
(including current and deferred taxes on income, provision for taxes on
unremitted foreign earnings which are included in gross revenues, and current
additions to reserves), but not including in gross revenues any gains (net of
expenses and taxes applicable thereto) in excess of losses resulting from the
sale, conversion or other disposition of capital assets (i.e., assets other than
Current Assets), any gains resulting from the write-up of assets, any equity of
the Company or any Subsidiary in the unremitted earnings of any corporation
which is not a Subsidiary, any earnings of any Person acquired by the Company or
any Subsidiary through purchase, merger or consolidation or otherwise for any
year prior to the year of acquisition, or any deferred credit representing the
excess of equity in any Subsidiary at the date of acquisition over the cost of
the investment in such Subsidiary, all determined in accordance with generally
accepted accounting principles. "CONSOLIDATED NET EARNINGS AVAILABLE FOR
RESTRICTED PAYMENTS" shall mean an amount equal to (i) the sum of $1,000,000
plus 50% (or minus 100% in case of a deficit) of Consolidated Net Earnings for
the period (taken as one accounting period) commencing on August 1, 1994, and
terminating at the end of the last fiscal quarter preceding the date of any
proposed Restricted Payment, less (ii) the sum of (A) the aggregate amount of
all dividends and other distributions paid or declared by the Company on any
class of its stock after July 31, 1994, (B) the excess of the aggregate amount
expended, directly or indirectly, after July 31, 1994, for the redemption,
purchase or other acquisition of any shares of its stock over the aggregate
amount received after July 31, 1994 as the net cash proceeds of the sale of any
shares of its stock and (C) the aggregate amount of Restricted Investments made
after July 31, 1994. There shall not be included in Restricted Payments or in
any computation of Consolidated Net Earnings Available For Restricted Payments:
(x) dividends paid, or distributions made, in stock of the Company; or (y)
exchanges of stock of one or more classes of the Company for other stock of the
Company, except to the extent that cash or other value is involved in such
exchange. There shall not be included in Restricted Payments the following
dividends payable in cash upon preferred stocks of the Company: (u) accumulated
dividends for [insert description of preferred stock] in the total
amount of $34,771.50 for three semi-annual periods ending June 30, 1997; and (v)
dividends [insert description of preferred stock] not exceeding a total of
$11,590.50 per semi-annual period for each semi-annual period beginning on and
after July 1, 1997. The term "STOCK" as used in this paragraph 6B shall include
warrants or options to purchase stock. There shall not be included in Restricted
Payments the payment of the following dividends, payable in cash by the Company
(i) accumulated dividends on its 6% Cumulative Preferred Stock par value $.25
per share (200,000 shares outstanding) and on its 10% Cumulative Preferred
Stock, par value $.25 per share (807,240 shares outstanding) in an aggregate
amount not to exceed $34,771.50, and (ii) dividends accruing at the same rate on
such Cumulative Preferred Stock not exceeding an aggregate amount equal to
$11,590.50 for any six-month period commencing on and after July 1, 1997.
6C. LIEN, DEBT AND OTHER RESTRICTIONS. The Company covenants that
it will not and will not permit any Subsidiary to:
6C(1) LIENS. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes in accordance
with the provisions of paragraph 5C), except
(i) Liens for taxes (including ad valorem and property taxes)
not yet due or which are being actively contested in good faith by
appropriate proceedings,
(ii) other Liens incidental to the conduct of its business or
the ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit, and which do not in the aggregate materially detract from the
value of its property or assets or materially impair the use thereof in
the operation of its business,
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary,
(iv) any Lien existing on any property of any corporation at
the time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any Subsidiary
through purchase, merger or consolidation or otherwise, whether or not
assumed by the Company or such Subsidiary, or placed upon property at
the time of acquisition by the Company or any Subsidiary to secure all
or a portion of (or to secure Debt incurred to pay all or a portion of)
the purchase price
thereof, provided that any such Lien shall not encumber any other
property of the Company or any Subsidiary,
(v) any Lien renewing, extending or refunding any Lien
permitted by clause (iv) above, provided that the principal amount
secured is not increased, and the Lien is not extended to any other
property of the Company or any Subsidiary,
(vi) the extension of existing Liens on real property to
fixtures subsequently attached to such real property,
(vii) any Lien securing Funded Debt permitted by paragraph
6C(2) and listed on Schedule 8D hereto attached;
(viii) any common law right of setoff or banker's lien arising
(whether by law, contract or otherwise) in connection with ordinary
course of business deposit arrangements maintained by the Company or
its Subsidiaries with its banks or other financial institutions so long
as any such bank or other financial institution (A) shall be a party to
the Bank Facility and the Intercreditor Agreement, (B) shall not at any
time make loans or otherwise extend credit to the Company or any
Subsidiary, (C) does not maintain accounts (for the deposit of cash or
otherwise) for the benefit of the Company or any Subsidiary, (D) shall
have delivered to each holder of a Note a Sharing Letter, (E) shall
have waived in writing for the benefit of each holder of a Note such
common law right of setoff or banker's lien or (F) holds no more than
$100,000 of obligations owed to the Company or any Subsidiary and the
total of all such obligations permitted solely by this clause (F) shall
not exceed $500,000; and
(ix) any Lien to the banks a party to the Bank Facility so
long as the Intercreditor Agreement is in full force and effect;
provided that the aggregate amount of Debt secured by all such Liens under
clauses (iv), (v) or (vii) above does not violate clause (iii) of paragraph
6C(2).
6C(2) DEBT. Maintain, create, incur, assume or in any other way become
liable in respect of any Debt, at any time, if:
(i) the aggregate outstanding amount of Consolidated Senior
Funded Debt, whether Secured or Unsecured, exceeds an aggregate amount
equal to the applicable percentage of Consolidated Tangible Gross Worth
set forth below for any date of determination:
April 1, 1997 through
December 31, 1997 62%
January 1, 1998 through
March 31, 1999 58%
April 1, 1999 through
March 31, 2000 54%
For any date on or after
April 1, 2000 50%
(ii) the aggregate outstanding amount of Consolidated Total
Funded Debt exceeds an aggregate amount equal to the applicable
percentage of Consolidated Tangible Gross Worth set forth below for any
date of determination:
DATE OF DETERMINATION PERCENTAGE
April 1, 1997 through
December 31, 1997 78%
January 1, 1998 through
March 31, 1999 76%
April 1, 1999 through
March 31, 2000 73%
April 1, 2000 through
March 31, 2001 70%
For any date on or after
April 1, 2001 65%
; provided, however, that if after the date hereof the Company shall
reduce (by conversion to equity, optional prepayment or otherwise) its
Subordinated Debt by an aggregate amount equal to $20,000,000 or more
(the "SUB DEBT REDUCTION"), the Company agrees to adjust the foregoing
ratios to take into account the Sub Debt Reduction to levels acceptable
to the Required Holders, such adjustment to occur as soon as possible
and in no event later than 60 days after the Sub Debt Reduction.
(iii) the aggregate amount of Priority Debt exceeds an
aggregate amount equal to 10% of Consolidated Tangible Net Worth.
6C(3) LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES. Make or
permit to remain outstanding any loan or advance to, or guarantee, endorse or
otherwise be or become contingently liable, directly or indirectly, in
connection with the obligations, stock or dividends of, or own, purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except that the Company or any
Subsidiary may
(i) make or permit to remain outstanding loans or advances to
any Subsidiary,
(ii) own, purchase or acquire stock, obligations or securities
of a Subsidiary or of a corporation which immediately after such
purchase or acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or securities having
an aggregate value of less than $500,000 received in settlement of
debts (created in the ordinary course of business) owing to the Company
or any Subsidiary,
(iv) own, purchase or acquire (A) prime commercial paper of a
domestic issuer rated at least A-1 or P-1, (B) certificates of deposit
with maturities of one year or less from the date of acquisition issued
by any commercial bank organized under the laws of the United States or
any foreign bank operating within the United States of America or any
Canadian bank (in any case, having capital resources in excess of
$500,000,000 or the Canadian dollar equivalent, and a short term debt
rating of A-1 or P-1 and a long term debt rating of A or higher or with
respect to any Canadian bank, the rating equivalent thereof) and
denominated in U.S. dollars or (C) direct obligations of the United
States Government or any agency thereof, and obligations guaranteed by
the United States Government, with maturities of one year or less from
the date of acquisition,
(v) endorse negotiable instruments for collection in the
ordinary course of business,
(vi) guarantee obligations of Subsidiaries which are not
prohibited by paragraph 6C(2),
(vii) guarantee obligations of grower cooperatives, such
guarantees to be limited to transactions in the ordinary course of
business for the purpose of obtaining agricultural products to be
marketed by the Company and/or its Subsidiaries,
(viii) guarantee the industrial revenue bonds described in
Schedule 8D hereto attached and other bonds or obligations (in an
aggregate principal amount with respect to an individual issuance not
in excess of $10,000,000) issued by industrial development agencies or
other governmental agencies or entities, which bonds or obligations
constitute debt which, if the Company were the primary obligor, would
not be prohibited by other provisions of this Agreement,
(ix) permit to remain outstanding such guaranties as are
listed on Schedule 6C(3) hereto attached and guaranties issued with
respect to renewals, replacements, extensions or refundings of the debt
guaranteed by the guaranties listed in Schedule 6C(3), and
(x) continue to hold the investments the cost of which shall
not exceed $6,079,000 in the form of capital stock of Moog, Inc. as of
the Date of Closing (the "MOOG INVESTMENT"), and
(xi) make or permit to remain outstanding loans or advances
to, or guarantee, endorse or otherwise be or become contingently liable
in connection with the obligations, stock or dividends of, or own,
purchase or acquire stock, obligations or securities of, any other
Person, provided that the aggregate principal amount of such loans and
advances, plus the aggregate amount of such contingent liabilities,
plus (without duplication) the aggregate amount of liabilities
permitted by clauses (i) and (v) of paragraph 6C(8), plus the aggregate
amount of the investment (at original cost) in such stock, obligations
and securities at any time outstanding for the Company and all
Subsidiaries exclusive of the Moog Investment (herein called
"RESTRICTED INVESTMENTS"), shall not exceed the amount permitted under
paragraph 6B; and further provided that no Subsidiary (other than
▇▇▇▇▇▇ Foods, Inc., SSP Company, Inc. and Seneca Foods International
Ltd.) shall make any loan or advance to, or acquire any stock,
obligations or securities of, the Company.
6C(4) SALE OF STOCK AND DEBT OF SUBSIDIARIES. Sell or otherwise dispose
of, or part with control of, any shares of stock or Funded or Current Debt of
any Subsidiary, except to the Company or another Subsidiary, and except that all
shares of stock and Debt of any Subsidiary at the time owned by or owed to the
Company and any Subsidiary may be sold as an entirety for a cash consideration
which represents the fair value (as determined in good faith by the Board of
Directors of the Company) at the time of sale of the shares of stock and Debt so
sold, provided that the assets of such Subsidiary do not constitute 10% or more
of Consolidated Tangible Gross Worth for the fiscal year then most recently
ended and that such Subsidiary shall not have contributed 10% or more of
Consolidated Net Earnings for any of the three fiscal years then most recently
ended, and further provided that, at the time of such sale, such Subsidiary
shall not own, directly or indirectly, any shares of stock or Debt of any other
Subsidiary (unless all of the shares of stock and Debt of such other Subsidiary
owned, directly or indirectly, by the Company and all Subsidiaries are
simultaneously being sold as permitted by this paragraph 6C(4));
6C(5) MERGER AND SALE OF ASSETS. Merge or consolidate with any other
corporation or sell, lease or transfer or otherwise dispose of assets if the net
value of all assets so disposed of constitute 10% or more of Consolidated
Tangible Gross Worth for the fiscal year then most recently ended, or assets
which shall have contributed 10% or more of Consolidated Net Earnings for any of
the three fiscal years then most recently ended, to any Person, except that
(i) any Subsidiary may merge with the Company (provided that
the Company shall be the continuing or surviving corporation) or with
any one or more other Subsidiaries,
(ii) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Company or another Subsidiary,
(iii) any Subsidiary may sell or otherwise dispose of all or
substantially all of its assets subject to the conditions specified in
paragraph 6C(4) with respect to a sale of the stock of such Subsidiary,
(iv) the Company may merge with any other corporation,
provided that (A) the Company shall be the continuing or surviving
corporation, and (B) the Company as the continuing or surviving
corporation shall not, immediately after such merger, be in default
under this Agreement or on the Notes, including all covenants herein
and therein contained,
(v) any Subsidiary may merge or consolidate with any other
corporation, provided that, immediately after giving effect to such
merger or consolidation (A) the continuing or surviving corporation of
such merger or consolidation shall constitute a Subsidiary, and (B) no
Event of Default or Default shall exist, and
(vi) the Company may sell, lease, transfer or otherwise
dispose of any or all of the assets described in Schedule 6C(5);
6C(6) SALE AND LEASE-BACK. Enter into any arrangement with any lender
or investor or to which such lender or investor is a party providing for the
leasing by the Company or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Company or any Subsidiary to such
lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or rental
obligations of the Company or any Subsidiary; provided, however, that the
Company or a Subsidiary may transfer property to, and lease-back such property
from, an industrial development agency or other governmental entity in a
transaction described in Schedule 6C(6) hereto attached or in a financing
transaction creating debt which is not prohibited under other provisions of this
Agreement;
6C(7) SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, or discount
or otherwise sell for less than the face value thereof, any of its notes or
accounts receivable; or
6C(8) CERTAIN CONTRACTS. Except as hereinabove permitted, enter into or
be a party to
(i) any contract providing for the making of loans, advances
or capital contributions to any Person other than a Subsidiary (except
where the obligation is limited to a maximum amount which is within the
limitations of clause (xi) of paragraph 6C(3)), or for the purchase of
any property (other than purchases of inventory in the ordinary course
of business) from any Person, in each case in order to enable such
Person to maintain working capital, net worth or any other balance
sheet condition or to pay debts, dividends or expenses, or
(ii) any contract for the purchase of materials, supplies or
other property or services if such contract (or any related document)
requires that payment for such materials, supplies or other property or
services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or
tendered, or
(iii) any contract to rent or lease (as lessee) any real or
personal property if such contract (or any related document) provides
that the obligation to make payments thereunder is absolute and
unconditional under conditions not customarily found in commercial
leases then in general use or requires that the lessee purchase or
otherwise acquire securities or obligation of the lessor, or
(iv) any contract for the sale or use of materials, supplies
or other property, or the rendering of services, if such contract (or
any related document) requires that payment for such materials,
supplies or other property, or the use thereof, or payment for such
services, shall be subordinated to any indebtedness (of the purchaser
or user of such materials, supplies or other property or the Person
entitled to the benefit of such services) owed or to be owed to any
Person, or
(v) any other contract which, in economic effect, is
substantially equivalent to a guarantee, except where the obligation is
limited to a fixed maximum amount which is within the limitations of
clause (xi) of paragraph 6C(3).
6D. ISSUANCE OF STOCK BY SUBSIDIARIES. The Company covenants that it
will not permit any Subsidiary (either directly, or indirectly by the issuance
of rights or options for, or securities convertible into, such shares) to issue,
sell or otherwise dispose of any class of its stock (other than directors'
qualifying shares) except to the Company or another Subsidiary.
6E. NO PREPAYMENT, MODIFICATION OR CONSENT. The Company will not (i)
prepay the Pillsbury Subordinated Note except for any Permitted Payments (as
defined in the Pillsbury Subordinated Note) required thereunder and (ii) amend,
modify, supplement or waive any term, condition or other provision of (A) any
Pillsbury Security Document (other than as contemplated by Section 10.06 of the
Asset Purchase Agreement), (B) the Pillsbury Subordinated Note (except as
permitted under Section 2.02(a) of the Asset Purchase Agreement and the second
paragraph of Section 1 of the Pillsbury Subordinated Note), (C) Article XIX (and
related definitions), Section 23.8 with respect to Article XIX of the Alliance
Agreement (and related definitions) or any other material provision of the
Alliance Agreement (and related definitions) or (D) provisions of Sections 7.12
through 7.15 of the Bank Facility or (iii) consent, if the Company's consent is
so required, to an assignment by Pillsbury of the Alliance Agreement, in any
case, without the prior written consent of each Significant Holder.
6F. PERMITTED ACQUISITIONS. The Company will not enter into any
Acquisition except Permitted Acquisitions.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or
Yield-Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 3 Business Days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes payable or
drafts accepted representing extensions of credit) beyond any period of
grace provided with respect thereto, or the Company or any Subsidiary
fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created
(or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event
is to cause, or to permit the holder or holders of such obligation (or
a trustee on behalf of such holder or holders) to cause, such
obligation to become due (or to be repurchased or defeased by the
Company or any Subsidiary) prior to any stated maturity; or
(iv) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein, including agreements,
terms or conditions incorporated herein by reference, and such failure
shall not be remedied within 30 days after any Principal Officer of the
Company obtains actual knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the assets
of the Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires (A) the divestiture of
assets constituting 10% or more of Consolidated Tangible Gross Worth
for the fiscal year then most recently ended, or (B) the divestiture of
the stock of a Subsidiary whose assets constitute 10% or more of
Consolidated Tangible Gross Worth for the fiscal year then most
recently ended, or (C) the divestiture of assets, or stock of a
Subsidiary, which shall have contributed 10% or more of Consolidated
Net Earnings for any of the three fiscal years then most recently
ended, and, in any case, such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(xiii) a final judgment in an amount in excess of $1,000,000
is rendered against the Company or any Subsidiary and, on the 60th day
following entry thereof, such judgment remains undischarged or
unvacated or execution thereof remains unstayed and on such day the
Company would not be able to incur a principal amount of Debt pursuant
to paragraph 6C(2) in an amount equal to the amount of such judgment,
or on the 60th day following expiration of any applicable stay, such
judgment is not discharged or vacated and on such day the Company would
not be able to incur a principal amount of Debt pursuant to paragraph
6C(2) equal to the amount of such judgment; or
(xiv) the security interest granted to the Collateral Agent
pursuant to the Pledge Agreement shall fail at any time to constitute a
first priority security interest in or assignment of the Collateral
described in such Pledge Agreement (except for any failure caused by
the action or inaction of the Collateral Agent); or the Pledge
Agreement shall cease to be in full force and effect in whole or in
part for any reason whatsoever; or the Company or any other Person
shall disavow or attempt to terminate any provision of the Pledge
Agreement; or
(xv) an (A) event of default (as defined therein) shall occur
under the Bank Facility or any of the Pillsbury Security Documents, or
(B) a) a condition to the availability of the commitment of the banks
that are a party to the Bank Facility to make loans has not been
satisfied (unless the satisfaction of such condition has been waived or
subsequently satisfied) and b) a majority of such banks shall fail or
refuse to advance funds under the Bank Facility; or
(xvi) any party shall fail to comply with any material term of
any Related Document to which it is a party (other than this Agreement)
beyond applicable grace periods, if any, specified in such Related
Documents; or
(xvii) a notice of termination is delivered under the Alliance
Agreement or the Alliance Agreement shall terminate for any reason
whatsoever; or
(xviii) the Company or any Person shall disavow or attempt to
terminate any Sharing Letter or any Sharing Letter shall cease to be in
full force and effect in whole or in part for any reason whatsoever
unless the Company shall have otherwise complied with the provisions of
6C(1)(viii); or
(xix) any Person shall disavow or attempt to terminate the
Intercreditor Agreement or the Intercreditor Agreement shall cease to
be in full force and effect in whole or in part for any reason
whatsoever; or
(xx) Pillsbury shall in any material respect fail to perform
or otherwise breach or default under any provision of the Pillsbury
Note applicable to Pillsbury; or
(xxi) any amount of principal or interest is paid, credited or
otherwise satisfied (whether by payment, offset or any other method,
and whether by voluntary or mandatory prepayment) in violation of the
Pillsbury Subordinated Note or this Agreement other than the payment of
a Permitted Payment (as defined in the Pillsbury Subordinated Note); or
(xxii) Pillsbury, the Company or any other Person denies or
contests, including the bringing of any action or proceeding to
contest, the effectiveness or validity of the Subordination Letter or
of the subordination or non-recourse provisions of the Pillsbury
Subordinated Note, or any of such provisions is declared invalid or
unenforceable; or
(xxiii) the Company shall fail to maintain the Bank Facility
having a remaining term of at least one year at any time during which
the ratio of Funded Debt to Consolidated Tangible Gross Worth is
greater than 40 percent;
then:
(a) if such event is an Event of Default specified in clause
(i) or (ii) of this paragraph 7A, the holder of any Note (other than
the Company or any Subsidiary or Affiliate) may at its option, by
notice in writing to the Company, declare such Note to be, and such
Note shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company,
(b) if such event is an Event of Default specified in clause
(vii), (viii), (ix) or (x) of this paragraph 7A with respect to the
Company, all of the Notes at the time outstanding shall automatically
become immediately due and payable at par together with interest
accrued thereon, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, and
(c) if such event is any other Event of Default, the Required
Holder(s) may at its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to paragraph
7A, the holder or holders of at least 76% of the aggregate principal amount of
the Notes from time to time outstanding may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if:
(i) all overdue interest on the Notes, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes shall have
been paid,
(ii) any amounts which have become due solely by reason of
such declaration shall not have been paid,
(iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C,
and
(iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or
by action at law, or both, whether for specific performance of any covenant or
other agreement contained in this Agreement or in aid of the exercise of any
power granted in this Agreement. No remedy conferred in this Agreement upon the
holder of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants:
8A. ORGANIZATION; AUTHORITY; ENFORCEABILITY. The Company is a
corporation duly organized and existing in good standing under the laws of the
State of New York, each Subsidiary is duly organized and existing in good
standing under the laws of the jurisdiction in which it is incorporated, and the
Company has and each Subsidiary has the corporate power to own its respective
property and to carry on its respective business as now being conducted, and in
the case of the Company, to enter into and perform all of its obligations under
this Agreement and the Notes and to issue and sell the Notes. Each of the
Company and its Subsidiaries is duly licensed or qualified to do business as a
foreign corporation in each state where the failure to be so licensed or
qualified would have a material adverse effect on the financial condition or
operations of the Company and its Subsidiaries taken as a whole and has all
corporate power, material licenses, franchises and other governmental
authorizations and approvals necessary to carry on its present business, with
respect to which the failure to so possess would have a material adverse effect
on the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole. Schedule 8A contains complete and correct
lists of (i) each jurisdiction in which the Company is licensed or qualified to
do business as a foreign corporation and (ii) the Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of the organization,
each jurisdiction in which it is licensed or qualified to do business as a
foreign corporation, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and each
other Subsidiary. This Agreement is, and the Notes when issued and delivered
hereunder will be, legal, valid, binding and enforceable obligations of the
Company.
8B. FINANCIAL STATEMENTS. The Company has furnished to each Purchaser
with the following financial statements, identified by a principal financial
officer of the Company: (i) a consolidated balance sheet of the Company and its
Subsidiaries as at March 31 in each of the years 1995 to 1996, inclusive, and a
consolidated statement of income and statement of cash flows of the Company and
its Subsidiaries for each such year all certified by Deloitte & Touche
LLP or its predecessor firm; and (ii) a consolidated balance sheet of the
Company and its Subsidiaries as at December 31 in each of the years 1995 and
1996 and a consolidated statement of income and statement of cash flows for the
three-month period ended on each such date, prepared by the Company. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and normal year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved and show all liabilities, direct and contingent,
of the Company and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of income and
statements of cash flows fairly present the results of the operations of the
Company and its Subsidiaries for the periods indicated. There has been no
material adverse change in the business, condition or operations (financial or
otherwise) of the Company and its Subsidiaries taken as a whole since March 31,
1996.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in any material adverse change in the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. Neither the Company nor any of its Subsidiaries
has outstanding any Debt except as specified on Schedule 8D and as permitted by
paragraph 6C(2). There exists no default under the provisions of any instrument
evidencing such Debt or of any agreement relating thereto.
8E. POLLUTION AND OTHER REGULATIONS. Except as disclosed on Schedule 8E
hereto, each of the Company and its Subsidiaries is in compliance in all
material respects with all laws and regulations relating to pollution and
environmental control (including all regulations and standards of the
Environmental Protection Administration), equal employment opportunity and
employee safety in all jurisdictions in which it is presently doing business,
and the Company will use its best efforts to comply, and to cause each of its
Subsidiaries to comply, in all material respects with all such laws and
regulations which may be legally imposed in the future in jurisdictions in which
the Company or any of its Subsidiaries may then be doing business except where
the necessity of compliance is being contested in good faith by appropriate
proceedings and adequate reserves or other provisions therefor shall have been
established on the books of the Company in accordance with generally accepted
accounting principles or where the failure to comply would
not materially adversely affect the financial condition or operations of the
Company and its Subsidiaries taken as a whole. There is no enforcement order in
effect with respect to the Company and its Subsidiaries issued by any federal or
state agency which regulates pollution, environmental control, equal employment
opportunity and employee safety.
8F. TAXES. The Company has and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the best knowledge of the
officers of the Company, are required to be filed, and each has paid all taxes
as shown on such returns and on all assessments received by it to the extent
that such taxes have become due, except such taxes as are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects its business, property or assets, or financial condition. Neither the
execution nor delivery of this Agreement or the Notes, nor the offering,
issuance and sale of the Notes, nor fulfillment of nor compliance with the terms
and provisions hereof and of the Notes will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries pursuant to,
the charter or by-laws of the Company or any of its Subsidiaries, any award of
any arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Company or any of its Subsidiaries is subject. Schedule 8G-1 is a true,
correct and complete list of all agreements (the "MATERIAL AGREEMENTS") that (i)
evidence Debt, (ii) contain financial covenants or financial restrictions on the
Company or any Subsidiary (iii) are between Pillsbury and the Company or any
Subsidiary, (iv) are being assigned to the Company under the Asset Purchase
Agreement or (v) are material in the operation of the Alliance Plants and
involve single sources of material supplies or services with respect to the
operations of the Alliance Plants and the conduct of the business of the Company
with respect thereto. Neither the Company nor any of its Subsidiaries is a party
to, or otherwise subject to any provision contained in, any instrument
evidencing indebtedness of the Company or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Debt of the Company of the type to be evidenced by the Notes except as set
forth in the agreements listed in Schedule 8G-2 attached hereto.
8H. OFFERING OF NOTE. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Note or any similar security of
the Company for sale to, or solicited any offers to buy the Note or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than institutional investors, and neither the
Company nor any agent acting on its behalf has taken or will take any action
which would subject the issuance or sale of the Note to the provisions of
section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction. The Company hereby represents and
warrants to each Purchaser that, within the preceding twelve months, neither it
nor any other Person acting on behalf of it has offered or sold to any Person
any Notes, or any securities of the same or a similar class as the Notes, or any
other substantially similar securities of the Company.
8I. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns (other
than the Moog Investment) or has any present intention of acquiring any "margin
stock" as defined in Regulation G (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called "margin stock"). The proceeds of sale
of the Notes will be used to acquire the assets identified on Schedule 8I
hereto, to expand operations in connection with the Company's existing business
and as contemplated by the Pillsbury Agreements and for other general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or for the purpose of maintaining, reducing or retiring any
Debt which was originally incurred to purchase or carry any stock that is
currently a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such Regulation G. Neither
the Company nor any agent acting on behalf of the Company has taken or will take
any action which might cause this Agreement or the Notes to violate Regulation
G, Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company to
be incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company or any of its Subsidiaries which is or would be materially adverse to
the Company and its Subsidiaries taken as a whole. [Except as described on
Schedule 8J,] neither the Company nor any of its Subsidiaries has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse to the
Company
and its Subsidiaries taken as a whole. No Plan providing welfare benefits to
retired former employees of the Company or any of its Subsidiaries has been
established or is maintained for which the present value of future benefits
payable, in excess of irrevocably designated funds for such purpose, is or would
be materially adverse to the financial condition of the Company and its
Subsidiaries taken as a whole. The execution and delivery of this Agreement and
the issuance and sale of the Note will not involve any transaction which is
subject to the prohibitions of section 406 of ERISA or in connection with which
a penalty could be imposed under Section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the Company
in the next preceding sentence is made in reliance upon and subject to the
accuracy of representation of each Purchaser in paragraph 9B. The Borrower
represents and warrants that, (i) with respect to each "plan" identified
pursuant to clause (v) of paragraph 9, the Borrower is neither a "party in
interest" (as defined in Title I, Section 3(14) of ERISA) nor a "disqualified
person" (as defined in Section 4975(e)(2) of the Internal Revenue Code of 1986,
as amended), and (ii) with respect to each "plan" identified pursuant to clause
(iv) of Paragraph 9, neither it nor any "affiliate" (as defined in Section V(c)
of PTE 84-14) is described in the proviso to such clause (iv).
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Note is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Date of Closing with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement, the offering,
issuance, sale or delivery of the Note or fulfillment of or compliance with the
terms and provisions hereof or of the Note.
8L. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to a Purchaser by or on behalf of the Company
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein and therein not misleading. There is no fact peculiar to the Company or
any of its Subsidiaries which materially adversely affects or in the future may
(so far as the Company can now foresee) materially adversely affect the
business, property or assets, or financial condition of the Company or any of
its Subsidiaries and which has not been set forth in this Agreement or in the
other documents, certificates and statements furnished to a Purchaser by or on
behalf of the Company prior to the date hereof in connection with the
transactions contemplated hereby.
8M. TITLE TO PROPERTIES. The Company has and each of its Subsidiaries
has good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the
balance sheet as at March 31, 1996 referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business and other
than exceptions to which, taken as a whole, are not material) and any assets
purchased pursuant to the Asset Purchase Agreement, subject to no Lien of any
kind except Liens not prohibited by paragraph 6C(1) and Liens required to be
discharged at the time of Closing (all of which will be so discharged). All
leases necessary in any material respect for the conduct of the respective
businesses of the Company and its Subsidiaries, taken as a whole, are valid and
subsisting and are in full force and effect.
8N. PATENTS, LICENSES, FRANCHISE, ETC. The Company and its Subsidiaries
possess all franchises, certificates, licenses, permits and other authorizations
from governmental political subdivisions or regulatory authorities and all
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary in any material
respect for the ownership, maintenance and operation of their respective
properties and assets, as presently conducted and as proposed to be conducted,
and neither the Company nor any of its Subsidiaries is in violation of any such
authorizations and rights in any material respect. No event has occurred which
permits, or after notice or lapse of time (except expiration of the stated term
thereof), or both, would permit, the revocation or termination of any such
franchise, license, authorization or other rights so as to affect adversely in
any material respect the business, condition, or operations (financial or
otherwise) of the Company and its Subsidiaries, taken as whole. All such
franchises, permits, licenses and other authority have been validly issued to
the Company or its Subsidiaries, as the case may be, by the appropriate
governmental authority and each such franchise, permit, license or other
authority is valid and subsisting. The Company and its Subsidiaries are
operating their respective businesses in material compliance with the terms and
conditions of such franchises, permits, licenses and other authority and are in
material compliance with all applicable Federal, state and local law.
8O. INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is an "INVESTMENT COMPANY", or a company "CONTROLLED" by an
"INVESTMENT COMPANY", within the meaning of the Investment Company Act of 1940,
as amended.
8P. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company nor
any of its Subsidiaries is a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY" of a
"HOLDING COMPANY" or an "AFFILIATE" of a "HOLDING COMPANY" or of a "SUBSIDIARY
COMPANY" of a "HOLDING COMPANY", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
8Q. SOLVENCY. As of the Date of Closing and after giving effect to the
transactions contemplated hereunder (i) the amount of the "present fair salable
value" of the assets of the Company will, as of such date, exceed the amount of
all "liabilities of the Company, contingent or otherwise," as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the solvency of debtors, (ii) the present fair
salable value of the assets of the Company will, as of the Date of Closing, be
greater than the amount that will be required to pay the liability of the
Company on its debts as such debts become absolute and matured, (iii) the
Company will not have, as of the Date of Closing, an unreasonably small amount
of capital with which to conduct its business, and (iv) the Company will be able
to pay its debts as they mature. For purposes of this paragraph 8Q "DEBT" means
"liability or a claim", and "CLAIM" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
8R. ABSENCE OF FOREIGN OR ENEMY STATUS. Neither the Company, nor any of
its Subsidiaries is an "ENEMY" or an "ALLY OF THE ENEMY" within the meaning of
section 2 of the Trading with the Enemy Act (50 U.S.C. App. ▇▇.▇▇. 1 et seq.),
as amended. Neither the Company nor any of its Subsidiaries is in violation of,
and neither the issuance and sale of the Notes by the Company nor the use of the
proceeds thereof as contemplated by this Agreement will violate, the Trading
with the Enemy Act, as amended, or any executive orders, proclamations or
regulations issued pursuant thereto, including, without limitation, regulations
administered by the Office of Foreign Asset Control of the Department of the
Treasury (31 C.F.R., Subtitle B, Chapter V).
8S. PILLSBURY AGREEMENTS. Each Purchaser has received a true, correct
and duly authorized and executed copy of each of the Pillsbury Agreement and
each other principal document between Pillsbury and the Company, including all
schedules and exhibits thereto and side letters, if any, affecting the terms
thereof or delivered in connection therewith, together with all amendments and
waivers thereto, and no material provision of the foregoing agreements has been
amended, supplemented or otherwise modified or waived without the prior written
consent of each Purchaser.
8T. BANK FACILITY. Each Purchaser has received a true, correct and duly
authorized and executed copy of each of the documents executed in connection
with the Bank Facility, including all schedules and exhibits thereto and side
letters, if any, affecting the terms thereof or delivered in connection
therewith, together with all amendments and waivers thereto, and no material
provision of any of the foregoing agreements has been amended, supplemented or
otherwise modified or waived without the prior written consent of each
Purchaser. The Company has the corporate authority to request and receive, and
each of the banks a party to the Bank Facility has an obligation to advance,
funds under the Bank Facility pursuant to the terms and conditions thereof.
9. REPRESENTATIONS OF THE PURCHASER. Each Purchaser (other than CoBank,
ACB) represents and warrants, as to itself, that, with respect to each source of
funds to be used by it to purchase the Notes (respectively, the "SOURCE"), at
least one of the following statements is accurate as of the Closing Date:
(i) the Source is an "insurance company general account," as
such term is defined in section V(e) of prohibited Transaction Class
Exemption 95-60 (issued July 12, 1995) (PTE 95-60), and the purchase is
exempt under the provisions of PTE 95-60.
(ii) The Source is a "governmental plan" as defined in Title
I, Section 3(32) of ERISA;
(iii) The Source is either (i) an insurance company pooled
separate account, and the purchase is exempt in accordance with
Prohibited Transaction Exemption 90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, in which case the purchaser is
exempt in accordance with PTE 91-38 (issued July 12, 1991);
(iv) The Source is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V
of PTE 84- 14, issued March 13, 1984) which QPAM has been identified in
writing, and the purchase is exempt under PTE 84-14 provided that no
other party to the transaction described in this Agreement and no
"affiliate" of such other party (as defined in Section V(c) of PTE
84-14) has at this time, and has not exercised at any time during the
immediately preceding year, the authority to appoint or terminate said
QPAM as manager of the assets of any "plan" identified in writing
pursuant to this clause (iv) or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified "plans";
(v) The Source is one or more "plans" or a separate account or
trust fund compromised of one or more "plans," each of which has been
identified in writing pursuant to this clause (v).
As used in this section, "plan" or "plans" shall have the meaning set
forth in Title I, Section 3(3) of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined
in the introductory sentence shall have the respective meanings specified
therein, and the following terms shall have the meanings specified with respect
thereto below:
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, .50% over the yield to maturity implied by (i) the yields reported,
as of 10:00 A.M. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
▇▇▇▇ quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"TELERATE" shall mean Telerate Access Services or if no longer
available such other comparable service as the Required Holders may select as a
substitute therefor.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. OTHER TERMS.
"ACQUISITION" means any transaction, or any series of related
transactions, by which the Company and/or any of its Subsidiaries directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through purchase of assets,
merger or otherwise, (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority in
ordinary voting power of the securities of a Person which have ordinary voting
power for the election of
directors or (c) otherwise acquires control of a more than 5% ownership interest
in any such Person.
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under Control with, such
first Person, and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "AFFILIATE"
is a reference to an Affiliate of the Company.
"ALLIANCE AGREEMENT" shall mean that certain Alliance Agreement by and
among the Company, Pillsbury and Grand Metropolitan, Inc., dated December 8,
1994, as it has been amended by that certain First Amendment dated February 10,
1995 and as it may be further amended, modified or supplemented from time to
time in accordance with its terms and the terms hereof.
"ALLIANCE PLANTS" shall have the meaning specified in the Alliance
Agreement.
"ASSET PURCHASE AGREEMENT" shall mean the Asset Purchase Agreement by
and between the Company and Pillsbury dated December 8, 1994, as it has been
amended by that certain First Amendment dated February 10, 1995 and as it may be
further amended, modified or supplemented in accordance with its terms and the
terms hereof.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BANK FACILITY" shall mean the Amended and Restated Credit Agreement
dated as of September 24, 1997 among the Company,The Chase Manhattan Bank, as
Agent and banks a party thereto, having an aggregate commitment of at least
$75,000,000, and any substitution therefor, as it may be amended, modified or
supplemented from time to time in accordance with its terms and the terms
hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized to be
closed.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"CHANGE OF CONTROL EVENT" shall mean (i) the beneficial ownership or
acquisition by any Person or group of affiliated Persons (other than directly or
indirectly through the ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ families) in any transaction or series
of related transactions of shares of the Company representing more than 50% of
the total number of votes which the Company's shareholders (assuming full
participation of all of the shareholders) shall be entitled to cast in the
election of the Board of Directors of the Company; and (ii) the ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ families shall cease to own shares, directly or indirectly, or have the
power to vote shares held by trusts of which all of the trustees of such trusts
are family members and such trustees have independent discretion regarding the
exercise of the associated voting rights, having in the aggregate at least 25%
of the total number of votes which the Company's shareholders (assuming full
participation of all of the shareholders) shall be entitled to cast in the
election of the Board of Directors of the Company.
"CLOSING" shall have the meaning set forth in paragraph 2 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall mean, collectively, the "COLLATERAL" described in
the Pledge Agreement.
"COLLATERAL AGENT" shall mean The Chase Manhattan Bank, serving as
Collateral Agent under the Pledge Agreement.
"CONSOLIDATED" shall mean the consolidated financial information of the
Company and each of its Subsidiaries under generally accepted accounting
principles.
"CONSOLIDATED EBITDA" shall mean, for any fiscal period of the Company,
an amount equal to (A) the sum for such fiscal period of Consolidated Net Income
(Loss) and, to the extent subtracted in determining such Consolidated Net Income
(Loss), provisions for (i) taxes based on income, (ii) Consolidated Interest
Expense, and (iii) depreciation and amortization expense minus (B) any items of
gain (or plus any items of loss) which were included in determining such
Consolidated Net Income (Loss) and were (x) not realized in the ordinary course
of business (whether or not classified as "ordinary" by generally accepted
accounting principles), or (y) the result of any sale of assets, or (z)
resulting from minority investments plus (C) $15,078,000 for the non-recurring
write-off that occurred in the second Fiscal Quarter of 1996 plus (D) $4,279,000
capital gain on the sale of the Peabody property located in Peabody,
Massachusetts that occurred in second fiscal quarter of 1996.
"CONSOLIDATED INTEREST EXPENSE" for any period shall mean the
Consolidated interest expense (whether cash or non-cash interest expense or
deferred or accrued interest expense and including, without limitation,
capitalized interest expense and the interest portion of all Capitalized Lease
Obligations during such period) determined in accordance with generally accepted
accounting principles.
"CONSOLIDATED NET EARNINGS" shall have the meaning specified in
paragraph 6B.
"CONSOLIDATED NET INCOME (LOSS)" shall mean, for any fiscal period of
the Company, the Consolidated net income (or loss) of the Company and its
Subsidiaries for such period (taken as a single accounting period) determined in
conformity with generally accepted accounting principles, but excluding
therefrom (to the extent otherwise included therein) (i) any gains or losses,
together with any related provision for taxes, realized upon any sale of assets
other than in the ordinary course of business, (ii) any income or loss of any
Person accrued prior to the date such Person becomes a Subsidiary of the Company
or is merged into or consolidated with the Company or any Subsidiary or all or
substantially all of such Person's assets are acquired by the Company or any
Subsidiary, and (iii) the income of the Company or any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by the
Company or such Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation.
"CONSOLIDATED TANGIBLE GROSS WORTH" shall mean Total Funded Debt plus
Total Stockholders' Equity, minus Intangibles.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean Total Stockholders' Equity
minus Intangibles.
"CURRENT ASSETS" shall mean the Consolidated current assets after
eliminating all inter-company items, in accordance with generally accepted
accounting principles.
"CURRENT DEBT" shall mean any obligation for borrowed money (and any
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money) payable on demand or within a
period of one year from the date of the creation thereof; provided that any
obligation, other than the Bank Facility, shall be treated as Funded Debt
regardless of its term, if such obligation is renewable pursuant to the terms
thereof or of a revolving credit or similar agreement effective for more than
one year after the date of the creation of such obligation or of any such
agreement. Any obligation secured by a Lien on, or payable out of the proceeds
of production from, property of the Company or any Subsidiary shall be deemed to
be Funded or Current Debt, as the case may be, of the Company or such Subsidiary
even though such obligation shall not be assumed by the Company or such
Subsidiary.
"CURRENT LIABILITIES" shall mean the Consolidated total liabilities
(after eliminating all inter-company items) which may be properly classified as
current liabilities, in accordance with generally accepted accounting
principles.
"DATE OF CLOSING" shall have the meaning set forth in paragraph 2
hereof.
"DEBT" shall mean Funded Debt and/or Current Debt, as the case may be.
"ENVIRONMENTAL AUTHORITY" shall mean any foreign, federal, state, local
or regional government that exercises any form of jurisdiction or authority
under any Environmental Requirement.
"ENVIRONMENTAL JUDGMENTS AND ORDERS" shall mean all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
degree or order.
"ENVIRONMENTAL LIABILITIES" shall mean any liabilities, whether accrued
or contingent, arising from or relating in any way to any Environmental
Requirements.
"ENVIRONMENTAL NOTICES" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any private Person threatening
litigation or administrative proceedings against or involving any of the Company
or a Subsidiary relating to alleged violation of any Environmental Requirements
and (ii) any complaint, petition or similar documents filed by any private
Person commencing litigation or administrative proceedings against or involving
the Company or a Subsidiary relating to alleged violation of any Environmental
Requirements.
"ENVIRONMENTAL PROCEEDINGS" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"ENVIRONMENTAL RELEASES" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) by the
Company or any of its Subsidiaries of Hazardous Materials. Environmental
Releases does not include releases for which no remediation or reporting is
required by applicable Environmental Requirements and which do not present a
danger to health, safety or the environment.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FISCAL QUARTER" shall mean the approximately 13-week period ending on
a Saturday near the close of each calendar quarter of each year as established
on an annual basis by the Company.
"FUNDED DEBT" shall mean, on any date of determination, any obligation
payable more than one year from the date of the creation thereof, which under
generally accepted accounting principles is shown on the balance sheet as a
liability (excluding reserves for deferred income taxes and other reserves to
the extent that such reserves do not constitute an obligation); plus the highest
amount of the aggregate principal amount of Current Debt outstanding during a
period selected by the Company of 45 consecutive days, within the 12-month
period immediately preceding such date.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company and its
successors and assigns.
"HAZARDOUS MATERIALS" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable federal, state or local law or regulation, (c)
gasoline, or any other petroleum product or by-product or constituent, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in any
applicable federal, state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable federal, state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"INSTITUTIONAL HOLDER" shall mean (i) any original holder of the Notes
under this Agreement so long as such purchaser shall hold any Notes, (ii) any
other holder of Notes which is an insurance company, pension fund, investment
company, bank, or investment banking firm or any affiliate of a Person described
in clause (i) or (ii).
"INTANGIBLES" shall mean goodwill, patents, trademarks, trade names,
organization expense and other like intangibles, determined in accordance with
generally accepted accounting principles.
"INTERCREDITOR AGREEMENT" shall mean that certain Amended and Restated
Intercreditor Agreement dated as of February 23, 1995 among the Collateral
Agent, The Prudential Insurance Company of America, each bank a party to the
Bank Facility and each Purchaser, substantially in the form of Exhibit F, as it
may be further amended, modified or supplemented from time to time in accordance
with its terms.
"INTEREST COVERAGE RATIO" shall mean, for any period, the ratio of (x)
the sum of Consolidated EBITDA for such period to (y) the sum of Consolidated
Interest Expense for such period.
"LIEN" shall mean any mortgage, pledge, priority, security interest,
encumbrance, deposit arrangement, lien (statutory or otherwise), any common law
right of setoff or banker's lien (whether by law, contract or otherwise) in
connection with ordinary course of business deposit arrangements or charge of
any kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature thereof, and
the filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"MATERIAL AGREEMENTS" shall have the meaning specified in paragraph 8G.
"MOOG INVESTMENT" shall have the meaning specified in paragraph 6C(3).
"1995 NOTE AGREEMENT" shall mean that certain Note Agreement dated
February 23, 1995, as amended, among the Company, ▇▇▇▇▇▇▇ and The Prudential
Insurance Company of America.
"NOTE" or "NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by a Principal Officer.
"PERMITTED ACQUISITION" means an Acquisition that:
(i) the Person to be acquired has formally approved, or its
governing body has recommended, such Acquisition; and
(ii) the fixed assets to be acquired do not exceed an
aggregate fair market value of $10,000,000; and
(iii) the total consideration (including without limitation
any Debt assumed in connection with such Acquisition) paid by the
Company for all Permitted Acquisitions, including the proposed
Acquisition, during any calendar year shall not exceed $25,000,000.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof. For purposes of paragraph 5B, "PERSON"
shall not include any employee or representative of any government or any agency
or department thereof.
"PILLSBURY" shall mean The Pillsbury Company, a Delaware corporation.
"PILLSBURY ACKNOWLEDGMENT" shall mean that certain Acknowledgment and
Agreement dated as of the date hereof executed by Pillsbury and the Senior
Entity, substantially in the form of Exhibit C hereto.
"PILLSBURY AGREEMENTS" shall mean each of the following, as any may be
amended, modified or supplemented from time to time in accordance with its terms
and the terms hereof:
(i) Asset Purchase Agreement; and
(ii) Alliance Agreement;
(iii) each of the Pillsbury Security Documents; and
(iv) Pillsbury Acknowledgment.
"PILLSBURY CONSENT" shall mean that certain written consent to the
Pledge Agreement executed by each of Pillsbury and the Senior Entity,
substantially in the form of Exhibit A to the Pledge Agreement.
"PILLSBURY SS. 1111(B) ELECTION" shall mean that certain Agreement
dated February 23, 1995 relating to 11 U.S.C. ss. 1111(b) executed by Pillsbury,
as it may have been or may be amended, modified or supplemented from time to
time in accordance with its terms.
"PILLSBURY SECURITY DOCUMENTS" shall mean each of the following, as any
may be amended, modified or supplemented from time to time in accordance with
its terms and the terms hereof:
(i) the Pillsbury Subordinated Note;
(ii) Security Agreement dated as of February 10, 1995 between
the Company and Pillsbury;
(iii) Mortgage, Security Agreement and Fixture Financing
Statement dated as of February 10, 1995 executed by the Company in
favor of Pillsbury; and
(iv) the Subordination Letter.
"PILLSBURY SUBORDINATED NOTE" shall mean that certain 8% Secured
Nonrecourse Subordinated Promissory Note dated February 1, 1995 issued by the
Company in favor of Pillsbury and any other nonrecourse subordinated note issued
by the Company in favor of Pillsbury, as contemplated by Section 2.02(a) of the
Asset Purchase Agreement, as any may be amended, modified or supplemented from
time to time in accordance with its terms and the terms hereof.
"PLAN" shall mean any "EMPLOYEE PENSION BENEFIT PLAN" (as such term is
defined in Section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or by any trade
or business, whether or not incorporated, which, together with the Company, is
under common control, as described in section 414(b) or (c) of the Code.
"PLEDGE AGREEMENT" shall mean that certain Pledge, Security and
Assignment Agreement dated February 23, 1995 by the Company in favor of the
Collateral Agent, as it has been amended by Amendment No. 1 to Pledge, Security
and Assignment Agreement dated March 31, 1997 and by Amendment No. 2 to Pledge,
Security and Assignment Agreement dated as of the date hereof and as it may be
further amended, modified or supplemented from time to time in accordance with
its terms.
"PRINCIPAL OFFICER" shall mean the chairman, chief executive officer,
chief financial officer, treasurer or chief accounting officer of the Company.
"PRIORITY DEBT" shall mean all unsecured Funded Debt of any Subsidiary
and all Secured Debt of the Company and its Subsidiaries other than (A) Debt
secured by Liens permitted under clauses (i) through (iii) of paragraph 6C(1),
(B) Debt listed on Schedule 8D under the heading "PRIORITY DEBT" without giving
effect to any amendment, modification, supplement, increase, extension, renewal
or refunding after the Date of Closing except for any extension of the
expiration date of a letter of credit issued in connection with any of the
industrial revenue bonds identified as Priority Debt so long as any such
extension is not beyond the stated maturity date of such bonds and except for
any substitution of such letter of credit, (C) Debt described on Schedule 6C(6),
(D) Debt secured solely by bankers' lien and subject to the Intercreditor
Agreement or a Sharing Letter and (E) any Debt secured by a Lien granted to a
bank or financial institution as permitted by paragraph 6C(1)(viii)(F).
"PROPERTIES" shall mean all real property owned, leased or otherwise
used or occupied by the Company or any Subsidiary, wherever located.
"PURCHASERS" shall mean, collectively, each of the Persons specified in
the Purchaser Schedules hereto.
"RELATED DOCUMENTS" shall mean each of this Agreement, each Note, the
Pledge Agreement, the Pillsbury Consent, the Pillsbury ss. 1111(b) Election, any
Pillsbury Subordinated Note, any Sharing Letter, the Intercreditor Agreement and
the Subordination Letter and any other certificate, instrument or other document
delivered in connection with any of the foregoing.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes from time to time
outstanding.
"RESTRICTED INVESTMENTS" shall have the meaning specified in clause (x)
of paragraph 6C(3).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURED DEBT" shall mean any Debt or obligation of any Person which is
secured by, or otherwise benefiting from, a Lien on any property, tangible or
intangible, of the Company or any Subsidiary, whether or not the Company or such
Subsidiary has assumed or become liable for the payment of such Debt. Secured
Debt shall not include the Bank Facility or this Agreement to the extent secured
by the Pledge Agreement.
"SENIOR ENTITY" shall mean Grand Metropolitan Public Limited Company, a
United Kingdom corporation and parent of its indirect wholly-owned subsidiary,
Pillsbury.
"SENIOR FUNDED DEBT" shall mean all Funded Debt of the Company or its
Subsidiaries other than Subordinated Debt.
"SHARING LETTER" shall mean that certain Letter Agreement, if any,
entered into from time to time by and among each holder of a Note and a bank as
contemplated by paragraph 6C(1)(viii), substantially in the form of Exhibit D
hereto, as any may be amended, modified and supplemented from time to time in
accordance with its terms.
"SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as such
Purchaser shall hold (or be committed under this Agreement to purchase) any
Note, or (ii) any other holder of at least 10% of the aggregate principal amount
of the Notes from time to time outstanding.
"SOLD PLANTS" shall have the meaning set forth in the Alliance
Agreement.
"SUBORDINATED DEBT" shall mean the Pillsbury Subordinated Note and any
other Funded Debt of the Company or its Subsidiaries which (i) is validly and
expressly subordinated in right of payment and in liquidation to the obligations
in respect of the Notes, in form and substance satisfactory to each Significant
Holder;
and (ii) has, when issued, a weighted average life to maturity greater than the
remaining weighted average life to maturity of the Notes.
"SUBORDINATION LETTER" shall mean that certain Agreement Regarding
Subordination dated September 26, 1997 among Pillsbury and the Purchasers, in
the form of a letter from Pillsbury.
"SUBSIDIARY" shall mean (i) any corporation organized under the laws of
any state of the United States of America, Canada, or any province of Canada,
which conducts the major portion of its business in and makes the major portion
of its sales to Persons located in the United States of America and Canada, and
all of the stock of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries and (ii) Seneca Foods
International Ltd.
"THIRD PARTY" shall mean all lessees, sublessees, licensees and other
users of the Properties.
"TOTAL FUNDED DEBT" shall mean, as of any date of determination, the
sum of (i) the aggregate outstanding principal amount of Senior Funded Debt of
the Company or its Subsidiaries plus (ii) the aggregate outstanding principal
amount of Subordinated Debt of the Company or its Subsidiaries.
"TOTAL STOCKHOLDERS' EQUITY" shall mean, as of any date of
determination, stockholders' equity as it would appear on the audited
consolidated balance sheet of the Company and its Subsidiaries as of such date
prepared in accordance with generally accepted accounting principles minus an
amount, in no event less than zero, equal to the product of (i) the sum of (A)
the net book value of the Sold Plants minus (B) the undepreciated value of any
capital improvements to the Sold Plants by the Company, as calculated in
accordance with generally accepted accounting principles, minus (C) the
aggregate principal amount of the Pillsbury Subordinated Note then outstanding
times (ii) the difference of 1 minus the marginal tax rate then applicable to
the Company.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note purchased by a Purchaser under this Agreement.
"UNSECURED" with respect to Debt means that such Debt is not Secured
Debt.
10C. ACCOUNTING TERMS AND DETERMINATION. All references in this
Agreement to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall be deemed to refer
to generally accepted accounting principles in effect in the United States at
the time
of application thereof, subject to the next sentence. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
audited consolidated financial statements of the Company and its Subsidiaries
delivered pursuant to clause (ii) of paragraph 5A(1).
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as a Purchaser
shall hold any Note, it will make payments of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit on the date due to such Purchaser's account or accounts as specified in
the Purchaser Schedule attached hereto, or such other account or accounts in the
United States as such Purchaser may designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, such Purchaser will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 11A to
any Transferee which shall have made the same agreement as the Purchasers have
made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including, without
limitation:
(i) all taxes (together in each case with interest and
penalties, if any), other than local, state or federal income taxes or
franchise taxes of a holder of a Note, including without limitation,
all stamp, intangibles, recording and other taxes, which may be payable
with respect to the execution and delivery of this Agreement or any
Related Document or the execution, delivery or acquisition of any Note;
(ii) all document production and duplication charges and the
fees and expenses of any special counsel engaged by the Purchasers or
any Transferee in connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification of, or
proposed consent under, this Agreement or any Related Document, whether
or not such proposed modification shall be effected or proposed consent
granted, and
(iii) the costs and expenses, including attorneys' fees,
incurred by a Purchaser or any Transferee in connection with the
restructuring, refinancing or "WORKOUT" of this Agreement, any Note or
any other Related Document or the transactions contemplated hereby or
thereby in enforcing (or determining whether or how to enforce) any
rights under this Agreement, any Note or any other Related Document or
in responding to any subpoena or other legal process issued in
connection with this Agreement or any other Related Document or the
transactions contemplated hereby or thereby or by reason of a Purchaser
or any Transferees having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case in which
the Company or any of its Subsidiaries is the debtor or the bankrupt;
provided, however that in connection with enforcement of any provision hereof
and in connection with any amendment, waiver or consent hereto, the Company
shall not be obligated pursuant to this paragraph 11B to pay the fees and
expenses of more than one counsel (which may include, without limitation, any
disbursements of such counsel to pay the fees and expenses of one local counsel
in each relevant jurisdiction where necessary or advisable in connection with
any modification (whether or not consummated) which contemplates the taking by
the holders of the Notes of a security interest in any assets of the Company or
any of its Subsidiaries or in connection with the enforcement of any rights
under this Agreement or the Notes) for the holder of the Notes taken as a group;
and provided, further, that the Company shall not be obligated pursuant to this
paragraph 11B to pay any expenses incurred in connection with the transfer of
any Note. The obligations of the Company under this paragraph 11B shall survive
the transfer of any Note or portion thereof or interest therein by a Purchaser
or any Transferee and the payment of any Note.
11C. AMENDMENTS AND WAIVERS.
11C(1) REQUIREMENTS. This Agreement or any other Related Document may
be amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holder(s) except to the extent otherwise specified in any Related
Document and that, without the written consent of the holder or holders of all
Notes at the time outstanding, no amendment to this Agreement shall change:
(i) the maturity of any Note,
(ii) the principal of, or the rate or time of payment of
interest on, or any Yield-Maintenance Amount payable with respect to
any Note,
(iii) the time, amount or allocation of any prepayments, or
(iv) the proportion of the principal amount of the Notes
required with respect to any consent, amendment, waiver or declaration.
Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding. Each holder of any Note at the
time or thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. As used herein and in the Notes, the term "THIS AGREEMENT" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11C(2) CONSENT IN CONTEMPLATION OF TRANSFER. Any consent made pursuant
to this paragraph 11C by a holder of Notes that has transferred or has agreed to
transfer its Notes to the Company, any Subsidiary or any Affiliate of the
Company and has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force or effect except solely
as to such holder, and any amendments effected or waivers granted or to be
effected or granted that would not have been or would not be so effected or
granted but for such consent (and the consents of all other holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such holder.
11C(3) PAYMENT. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
11C(4) COURSE OF DEALING. No course of dealing between the Company and
the holder of any Note nor any delay in exercising any rights hereunder or under
any Note shall operate as a waiver of any rights of any holder of such Note.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Note are issuable as registered notes without coupons in denominations of at
least $100,000, except as may be necessary to reflect any principal amount not
evenly divisible by $100,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement (or, if such holder is not an Institutional Holder having
capital and surplus in excess of $50,000,000, a surety bond) in form and
substance reasonably satisfactory to the Company and its counsel or in the case
of any such mutilation upon surrender and cancellation of such Note, the Company
will make and deliver a new Note, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount,
if any, and for all other purposes whatsoever, whether or not such Note shall be
overdue, and the Company shall not be affected by notice to the contrary.
Subject to the preceding sentence, the holder of any Note may from time to time
grant
participations in all or any part of such Note to any Person on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by a Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of a Purchaser or any Transferee. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement and
understanding between each Purchaser and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. DISCLOSURE TO OTHER PERSONS. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and other
documents delivered to such holder, and disclose any other information disclosed
to such holder, by or on behalf of the Company or any Subsidiary in connection
with or pursuant to this Agreement to:
(i) such holder's directors, officers, employees, agents,
Affiliates and professional consultants,
(ii) any other holder of any Note,
(iii) any Person to which such holder offers to sell such Note
or any part thereof,
(iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note,
(v) any federal or state regulatory authority having
jurisdiction over such holder,
(vi) the National Association of Insurance Commissioners
or any similar organization or
(vii) any other Person to which such delivery or disclosure
may be necessary or appropriate (a) in compliance with any law, rule,
regulation or order applicable to such holder, (b) in response to any
subpoena or other legal process or informal investigative demand, (c)
in connection with any litigation to which such holder is a party or
(d) in order to protect such holder's investment in such Note.
11I. NOTICES. All written communications provided for hereunder shall
be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and:
(i) if to a Purchaser, addressed to such Purchaser at the
address specified for such communications in the Purchaser Schedule
attached hereto, or at such other address as such Purchaser shall have
specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such
other holder at such address as such other holder shall have specified
to the Company in writing or, if any such other holder shall not have
so specified an address to the Company, then addressed to such other
holder in care of the last holder of such Note which shall have so
specified an address to the Company, and
(iii) if to the Company, addressed to it at ▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer,
or at such other address as the Company shall have specified to the
holder of each Note in writing; provided, however, that any such
communication to the Company may also, at the option of the holder of
any Note, be delivered by facsimile transmission addressed to the
Company, Attention: Treasurer, at (▇▇▇) ▇▇▇-▇▇▇▇.
11J. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to each Purchaser or to the Required Holder(s), the
determination of such satisfaction shall be made by such Purchaser or the
Required Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.
11K. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO
THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF
NEW YORK LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT
TO THE SOLE AND ABSOLUTE ELECTION OF THE REQUIRED HOLDERS AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS
AGREEMENT OR THE NOTES OR ANY OTHER RELATED DOCUMENT SHALL BE LITIGATED IN SUCH
COURTS, AND THE COMPANY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH
COURTS.
11L. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11M. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11N. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
Yield-Maintenance Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day and shall
include the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
11O. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original,but all of which together shall
constitute one instrument.
[Signature pages commence on next page.]
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement between each of
the Purchasers and the Company.
Very truly yours,
SENECA FOODS CORPORATION
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Finance
[Signatures continued on next page.]
The foregoing Agreement is
hereby accepted as of the date
first above written.
SIGNATURE 1A (CAYMAN), LTD.
BY: ▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE
COMPANY, PORTFOLIO ADVISOR
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Investment Officer
MELLON BANK, N.A., AS
TRUSTEE FOR THE LONG-TERM INVESTMENT
TRUST
By /s/▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
MELLON BANK, N.A., AS
TRUSTEE FOR NYNEX MASTER PENSION TRUST
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
COBANK, ACB
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE OFFERED OR SOLD IN VIOLATION
OF SUCH ACT.
SENECA FOODS CORPORATION
_____% SENIOR NOTE DUE __________, 200_
No. R-1 __________, 19__
$----------
FOR VALUE RECEIVED, the undersigned, SENECA FOODS CORPORATION (herein
called the "COMPANY"), a corporation organized and existing under the laws of
the State of New York, hereby promises to pay to
___________________________________, or registered assigns, the principal sum of
____________________________ on ___________, 2004, with interest (computed on
the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at
the rate of ____% per annum from the date hereof, payable quarterly on the ____
day of _______, ________, ________ and _______ in each year, commencing with the
_______ next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Yield-Maintenance Amount (as defined in the Note Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) _____% or (ii) 2.0% over the rate of interest
publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York from time to
time in New York City as its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of ▇▇▇▇▇▇
Guaranty Trust Company of New York in New York City or at such other place as
the holder hereof shall designate to the Company in writing, in lawful money of
the United States of America.
This Note is one of a series of Senior Notes (herein called the
"NOTES") issued pursuant to a Note Agreement, dated as of ______________, 1997
(herein
A-2
called the "AGREEMENT"), among the Company and the Purchasers a party thereto
and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE. AS
PROVIDED IN PARAGRAPH 11K OF THE AGREEMENT, THE COMPANY SUBMITS TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK IN ANY ACTION OR PROCEEDING RELATING TO THIS NOTE.
SENECA FOODS CORPORATION
By________________________________
Title:
TABLE OF CONTENTS
SECTION PAGE
1. The Notes...........................................................1
A. Authorization of Issue of Notes............................1
B. Security for the Notes.....................................1
2. Purchase and Sale of Notes..........................................1
3. Conditions Precedent................................................2
A. Related Documents..........................................2
B. Opinion of Purchaser's Special Counsel.....................2
C. Opinions of Counsel........................................2
D. Representations and Warranties; No Default.................3
E. Purchase Permitted By Applicable Laws......................3
F. Proceedings................................................3
G. Certificates of Good Standing/Qualification to Do Business.3
H. No Material Adverse Change.................................4
I. Private Placement Numbers..................................4
J. Perfection of Liens........................................4
▇. ▇▇▇▇▇▇▇▇▇ Agreements.......................................4
L. Material Agreements........................................4
M. Expenses...................................................5
N. Other Documents............................................5
4. Prepayments.........................................................5
A. Required Prepayments.......................................5
B. Optional Prepayment With Yield-Maintenance Amount..........5
C. Notice of Optional Prepayment..............................5
D. Partial Payments Pro Rata..................................6
E. Retirement of Notes........................................6
F. Change in Control..........................................6
▇. ▇▇▇▇▇▇▇▇▇ Payments.........................................7
5. Affirmative Covenants...............................................7
A. Reporting Requirements.....................................7
B. Information Required by Rule 144A.........................11
C. Inspection of Property....................................11
D. Covenant to Secure Notes Equally..........................11
E. Guaranteed Obligations....................................12
F. Corporate Existence, Etc..................................12
i
G. Payment of Taxes and Claims...............................12
H. Compliance With Laws, Etc.................................13
I. No Integration............................................13
J. Maintenance of Insurance..................................13
L. Other Covenants...........................................14
6. Negative Covenants.................................................14
A. Current Ratio and Interest Coverage.......................14
B. Dividend Limitation.......................................15
▇. ▇▇▇▇, Debt and Other Restrictions.........................16
D. Issuance of Stock by Subsidiaries.........................23
E. No Prepayment, Modification or Consent....................23
F. Permitted Acquisitions....................................23
7. Events of Default..................................................23
A. Acceleration..............................................23
B. Rescission of Acceleration................................28
C. Notice of Acceleration or Rescission......................28
D. Other Remedies............................................28
8. Representations, Covenants and Warranties..........................29
A. Organization; Authority; Enforceability...................29
B. Financial Statements......................................29
C. Actions Pending...........................................30
D. Outstanding Debt..........................................30
E. Pollution and Other Regulations...........................30
F. Taxes.....................................................31
G. Conflicting Agreements and Other Matters..................31
H. Offering of Note..........................................32
I. Use of Proceeds...........................................32
J. ERISA.....................................................32
K. Governmental Consent......................................33
L. Disclosure................................................33
M. Title to Properties.......................................34
N. Patents, Licenses, Franchise, Etc.........................34
O. Investment Company Act....................................34
P. Public Utility Holding Company Act........................34
Q. Solvency..................................................35
R. Absence of Foreign or Enemy Status........................35
▇. ▇▇▇▇▇▇▇▇▇ Agreements......................................35
T. Bank Facility.............................................36
ii
9. Representations of the Purchaser...................................36
10. Definitions........................................................37
A. Yield-Maintenance Terms...................................37
B. Other Terms...............................................38
C. Accounting Terms and Determination........................49
11. Miscellaneous......................................................50
A. Note Payments.............................................50
B. Expenses..................................................50
C. Amendments and Waivers....................................51
D. Form, Registration, Transfer and Exchange of Notes; Lost
Notes.....................................................53
E. Persons Deemed Owners; Participations.....................53
F. Survival of Representations and Warranties; Entire
Agreement.................................................54
G. Successors and Assigns....................................54
H. Disclosure to Other Persons...............................54
I. Notices...................................................55
J. Satisfaction Requirement..................................55
K. GOVERNING LAW.............................................55
L. Severability..............................................56
M. Descriptive Headings......................................56
N. Payments Due on Non-Business Days.........................56
O. Counterparts..............................................56
PURCHASER SCHEDULES
Exhibit A - Form of Note
Exhibit B - Form of Opinion of Company's Counsel
Exhibit C - Form of Acknowledgment and Agreement
of Pillsbury and Grand Met
Exhibit D - Form of Sharing Letter
Exhibit E - Form of Letter Agreement
Exhibit F - Form of Amended and Restated Intercreditor
Agreement
Schedule 3G - Good Standing Certificates
Schedule 3L - Specified Material Agreements
Schedule 6C(3) - Outstanding Guarantees
Schedule 6C(5) - Excluded Assets
Schedule 6C(6) - Sale/Lease-Back
Schedule 8A - Corporate Organization
iii
Schedule 8D - Outstanding Funded Debt
Schedule 8E - Environmental Disclosure
Schedule 8G-1 - Material Agreements
Schedule 8G-2 - Agreements Restricting Debt
Schedule 8I - Use of Proceeds
iv
EXECUTION COUNTERPART
SENECA FOODS CORPORATION
$15,000,000 9.17% SENIOR NOTES DUE 2004
---------------------------
NOTE AGREEMENT
---------------------------
DATED AS OF SEPTEMBER 26, 1997