Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended January 28, 1995 Commission File Number 0-1989
Seneca Foods Corporation
(Exact name of registrant as specified in its charter)
New York 16-0733425
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
1162 Pittsford-Victor Road, Pittsford, New York 14534
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 716/385-9500
Not Applicable
Former name, former address and former fiscal year,
if changed since last report
Check mark indicates whether registrant (1) has filed all reports required to
be filed by Section 13 of 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of common
stock at the latest practical date are:
Class Shares Outstanding at February 28, 1995
Common Stock, $.25 Par 2,796,555
<TABLE>
PART I FINANCIAL INFORMATION
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
1/28/95 7/31/94
_______ _______
<S> <C> <C>
ASSETS
Current Assets:
Cash and Short-term Investments $ 976 $ 2,325
Accounts Receivable, Net 30,276 18,651
Inventories:
Finished Goods 76,303 46,530
Work in Process 22,978 17,980
Raw Materials 26,074 28,200
_______ _______
125,355 92,710
Off-Season Reserve (Note 3) (11,314) -
Deferred Tax (Net) 1,194 1,194
Other Current Assets 719 1,233
_______ _______
Total Current Assets 147,206 116,113
Property, Plant and Equipment, Net 87,823 78,216
Common Stock of Moog Inc. (Note 4) 7,393 6,079
Other Assets 188 193
_______ _______
$242,610 $200,601
======= =======
</TABLE>
<TABLE>
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable $ 45,360 $ 1,600
Accounts Payable 27,454 31,829
Accrued Expenses 15,928 13,541
Current Portion of Long-Term Debt and Capital
Lease Obligations 6,110 6,349
______ ______
Total Current Liabilities 94,852 53,319
Long-Term Debt 48,866 50,619
Capital Lease Obligations 807 857
Deferred Income Taxes 11,092 10,521
10% Preferred Stock, Series A, Voting, Cumulative,
Convertible, $.025 Par Value Per Share 10 10
10% Preferred Stock, Series B, Voting, Cumulative,
Convertible, $.025 Par Value Per Share 10 10
6% Preferred Stock, Voting, Cumulative,
$.25 Par Value Per Share 50 50
Common Stock 1,880 1,880
Net Unrealized Gain on Noncurrent Securities 828 -
Retained Earnings 84,215 83,335
_______ _______
Stockholders' Equity 86,993 85,285
_______ _______
$242,610 $200,601
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, except Share Data)
<CAPTION>
Three Months Ended
1/28/95 1/29/94
_______ _______
<S> <C> <C>
Net Sales $ 87,935 $ 83,780
Costs and Expenses:
Cost of Product Sold 77,582 71,354
Selling and Administrative 8,289 8,811
Interest Expense 1,812 1,643
______ ______
Total Costs and Expenses 87,683 81,808
______ ______
Earnings Before Income Taxes 252 1,972
Income Taxes 93 769
______ ______
Net Earnings $ 159 $ 1,203
====== ======
Net Earnings Applicable to
Common Stock 153 1,197
====== ======
Weighted Average Common
Shares Outstanding 2,796,555 2,918,199
========= =========
Primary and Fully Diluted Earnings Per
Share of Common Stock (Exhibit II):
Net Earnings $ .05 $ .41
======== ========
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, except Share Data)
<CAPTION>
Six Months Ended
1/28/95 1/29/94
_______ _______
<S> <C> <C>
Net Sales $ 176,762 $ 145,783
Costs and Expenses:
Cost of Product Sold 155,564 124,739
Selling and Administrative 16,529 15,448
Interest Expense 3,253 3,200
_______ _______
Total Costs and Expenses 175,346 143,387
Earnings Before Income Taxes 1,416 2,396
Income Taxes 524 934
_______ _______
Earnings from Continuing Operations 892 1,462
Earnings from Discontinued Operations - 46
Gain on the Sale of Discontinued Operations
Net of Income Taxes (Note 6) - 2,101
Cumulative Effect of Change in Accounting
Principle - 2,006
________ ________
Net Earnings $ 892 $ 5,615
======== ========
Net Earnings from Continuing Operations
Applicable to Common Stock $ 880 $ 1,450
======== ========
Net Earnings Applicable to
Common Stock $ 880 $ 5,603
======== ========
Weighted Average Common
Shares Outstanding 2,796,555 2,968,466
========= =========
Primary and Fully Diluted Earnings Per
Share of Common Stock (Exhibit II):
Earnings from Continuing Operations $ .31 $ .49
Earnings from Discontinued Operations - .02
Gain on the Sale of Discontinued
Operations - .71
Cumulative Effect of Change in
Accounting Principle - .67
________ ________
Net Earnings $ .31 $ 1.89
======== ========
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<CAPTION>
Three Months Ended
1/28/95 1/29/94
_______ _______
<S> <C> <C>
Cash Flows From Operating Activities:
Net Earnings $ 159 $ 1,203
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 2,495 2,332
Deferred Income Taxes 351 1,180
Changes in Working Capital:
Accounts Receivable 4,998 (10,143)
Inventories 17,416 29,694
Off-Season Reserve (4,867) (3,587)
Other Current Assets 1,218 485
Income Taxes 151 (1,819)
Accounts Payable and
Accrued Expenses (17,811) (9,906)
_______ _______
Net Cash Provided
by Operations 4,110 9,439
Cash Flows From Investing Activities:
Common Stock of Moog - 1
Acquisitions - (11,670)
Additions to Property, Plant,
and Equipment (10,441) (2,574)
_______ _______
Net Cash Used in Investing
Activities (10,441) (14,243)
Cash Flows From Financing Activities:
Payments and Current Portion of Long-Term
Debt and Capital Lease Obligations (1,858) (160)
Other 3 2
Common Stock Retirement - (38)
Notes Payable 6,660 -
Dividends Paid (12) (12)
_______ _______
Net Cash Provided (Used) in
Financing Activities 4,793 (208)
_______ _______
Net Decrease in Cash and
Short-Term Investments (1,538) (5,012)
Cash and Short-Term Investments,
Beginning of Period 2,514 11,292
_______ _______
Cash and Short-Term Investments,
End of Period $ 976 $ 6,280
======= =======
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<CAPTION>
Six Months Ended
1/28/95 1/29/94
_______ _______
<S> <C> <C>
Cash Flows From Operating Activities:
Net Earnings $ 892 $ 5,615
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 5,093 4,565
Deferred Income Taxes 571 (1,256)
Gain on Sale of Textile Segment - (3,444)
Changes in Working Capital:
Accounts Receivable (11,405) (8,952)
Inventories (31,282) (13,498)
Off-Season Reserve 11,314 11,270
Other Current Assets (246) (228)
Income Taxes 274 (331)
Accounts Payable and
Accrued Expenses (2,002) 8,735
_______ _______
Net Cash Provided (Used)
by Operations (26,791) 2,476
Cash Flows From Investing Activities:
Common Stock of Moog - 1
Acquisitions (3,769) (11,670)
Proceeds from Sale of Textile Segment - 8,296
Additions to Property, Plant,
and Equipment (12,500) (4,246)
_______ _______
Net Cash Used in Investing
Activities (16,269) (7,619)
Cash Flows From Financing Activities:
Payments and Current Portion of Long-Term
Debt and Capital Lease Obligations (2,042) (1,250)
Other 5 14
Common Stock Retirement - (2,851)
Notes Payable 43,760 -
Dividends Paid (12) (12)
_______ _______
Net Cash Provided (Used) in
Financing Activities 41,711 (4,099)
_______ _______
Net Decrease in Cash and
Short-Term Investments (1,349) (9,242)
Cash and Short-Term Investments,
Beginning of Period 2,325 15,522
_______ ________
Cash and Short-Term Investments,
End of Period $ 976 $ 6,280
======= ========
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
January 28, 1995
1. Consolidated Condensed Financial Statements
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, which are normal
and recurring in nature, necessary to present fairly the financial
position of the Registrant as of January 28, 1995 and July 31, 1994 and
results of operations for the three and six month periods ended January
28, 1995 and January 29, 1994. All significant intercompany
transactions and accounts have been eliminated in consolidation. The
July 31, 1994 balance sheet was derived from audited financial
statements.
The results of operations for the three and six month periods ended
January 28, 1995 and January 29, 1994 are not necessarily indicative of
the results to be expected for the full year.
The accounting policies followed by the Registrant are set forth in Note
1 to the Registrant's financial statements in the 1994 Seneca Foods
Corporation Annual Report and 10-K.
Other footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. It is suggested that these consolidated
condensed financial statements be read in conjunction with the financial
statements and notes included in the Registrant's July 31, 1994 financial
report.
2. Primary earnings per share are based on the weighted average number of
common shares outstanding, as the effect of common stock equivalents is
immaterial. The difference between primary and fully diluted earnings
per share is immaterial.
3. Off-Season Reserve is the excess of absorbed expenses over incurred
expenses to date. The seasonal nature of the Registrant's business
results in a timing difference between expenses (primarily overhead
expenses) incurred and absorbed into product cost. All Off-Season
Reserve balances are zero at fiscal year end.
4. The Registrant's investment in the common stock of Moog Inc. is carried
at market value as required by SFAS 115 which the Company implemented
effective this year. The market value of these securities was $7,393,000
as of January 28, 1995. There were no realized gains or losses during
the periods presented. Unrealized gains were $1,315,000 at January 28,
1995. The Registrant has the ability and intent to hold these securities
for the foreseeable future.
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
January 28, 1995
5. As reported on a February 1995 8-K, the Registrant acquired certain
assets of the Green Giant Division of The Pillsbury Company in which the
purchase price totalled $87,025,000. The transaction occurred subsequent
to the end of the quarter and therefore is not reflected in these
financial statements.
6. The Registrant acquired the assets of M. C. Snack, Inc. of Yakima,
Washington, a snack food maker of apple chips under the Nature's Favorite
Brand for $3,769,000 during August 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION RESULTS OF OPERATIONS
January 29, 1994
Results of Operations:
Sales:
Sales reflect an increase of 21.3% for the first six months versus 1994. The
higher sales, in large part, are due to higher canned vegetables quantities
sold than the previous period.
Costs and Expenses:
The following table shows cost and expenses as a percentage of sales:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
__________________ ________________
1/28/95 1/29/94 1/28/95 1/29/94
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Cost of Product Sold 88.3% 85.2% 88.1% 85.6%
Selling 6.3 6.6 6.4 6.9
Administrative 3.2 3.9 3.0 3.7
Interest Expense 2.1 2.0 1.8 2.2
____ ____ ____ ____
99.9% 97.7% 99.3% 98.4%
</TABLE>
Higher Cost of Product Sold percentages (i.e. lower Gross Margins) reflect,
in part, lower selling prices for vegetable products than in the prior year
due to the relatively high packs of vegetables throughout the U. S. after the
previous year which saw unprecidented floods in the Midwest. The Interest
Expense is lower largely due to the debt refinancing and higher sales.
Income Taxes:
The effective tax rate used in fiscal 1995 is 37% and in fiscal 1994 it is
39%.
Financial Condition:
The financial condition of the Registrant is summarized in the following
table and explanatory review (In Thousands):
<TABLE>
<CAPTION>
For the Quarter For the Year
Ended January Ended July
_______________ ____________
1995 1994 1994 1993
____ ____ ____ ____
<S> <C> <C> <C> <C>
Working Capital Balance $52,354 $78,402 $62,794 $84,410
Quarter Change (9,517) (7,052) - -
Notes Payable 45,360 - - -
Long-Term Debt 49,673 69,580 50,619 71,534
Current Ratio 1.55:1 2.65:1 2.18:1 3.20:1
Inventory (Average) Turnover 2.9 2.6 2.8 2.8
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION RESULTS OF OPERATIONS
January 28, 1995
The change in the Working Capital for the quarter from the prior year is
largely due to higher capital expenditures in the current year tham the
previous year. Notes Payable is $45.4 million greater than the prior period
due to high vegetable pack in the current year and the low vegetable pack in
the previous year which was caused by the Midwest's flood conditions, the
acquisitions made over the last year, and the prepayment of a long-term debt
issue totaling $13.8 million in July 1994. Accounts Receivable is higher than
the July balance due to the relatively low sales in July, but lower than the
January 1994 due to the higher sales in that month. See Consolidated
Statements of Cash Flows for further details.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults on Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - (11) Computation of earnings per share
(b) Exhibit 27 - (27) Financial Data Schedules
(c) Exhibit 99 - (99) Note Agreement related to the $75,000,000
note with The Prudential Insurance Company of America and
$50,000,000 note with John Hancock Mutual Life Insurance
Company.
(d) Reports on Form 8-K - a December 1994 and a February 1995 8-K
described an acquisition made by the Registrant (see
footnotes for details).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Seneca Foods Corporation
(Registrant)
/s/Kraig H. Kayser
March 13, 1995 Kraig H. Kayser
President and
Chief Executive Officer
/s/Jeffrey L. Van Riper
March 13, 1995 Jeffrey L. Van Riper
Controller and
Chief Accounting Officer
<TABLE>
EXHIBIT 11
SENECA FOODS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In thousands except share data)
<CAPTION>
Three Months Ended Six Months Ended
__________________ ________________
1/28/95 1/29/94 1/28/95 1/29/94
_______ _______ _______ _______
<S>
<C> <C> <C> <C>
Net Earnings Applicable to Common Stock:
Net Earnings $ 159 $ 1,203 $ 892 $ 5,615
Deduct Preferred Cash Dividends 6 6 12 12
_________ ________ ________ ________
Net Earnings Applicable to
Common Stock $ 153 $ 1,197 $ 880 $ 5,603
========= ======== ======== ========
Weighted Average Common
Shares Outstanding 2,796,555 2,918,199 2,796,555 2,968,466
Effect of Common Stock Equivalent - - - -
_________ _________ _________ _________
Weighted Average Common Shares Out-
standing for Primary 2,796,555 2,918,199 2,796,555 2,968,466
========= ========= ========= =========
Primary and Fully Diluted
Earnings Per Share $ .05 $ .41 $ .31 $ 1.89
========= ======== ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Commercial and Industrial Companies
Article 5 of Regulation S-X
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-28-1995
<CASH> 976
<SECURITIES> 0
<RECEIVABLES> 30448
<ALLOWANCES> 172
<INVENTORY> 125355
<CURRENT-ASSETS> 147206
<PP&E> 193737
<DEPRECIATION> 105914
<TOTAL-ASSETS> 242610
<CURRENT-LIABILITIES> 94852
<BONDS> 49673
<COMMON> 1880
0
70
<OTHER-SE> 85043
<TOTAL-LIABILITY-AND-EQUITY> 242610
<SALES> 176762
<TOTAL-REVENUES> 176762
<CGS> 155564
<TOTAL-COSTS> 155564
<OTHER-EXPENSES> 16529
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3253
<INCOME-PRETAX> 1416
<INCOME-TAX> 524
<INCOME-CONTINUING> 892
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 892
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
</TABLE>
SENECA FOODS CORPORATION
$75,000,000 10.78% SERIES A SENIOR NOTES DUE 2005
$50,000,000 10.81% SERIES B SENIOR NOTES DUE 2009
___________________________
NOTE AGREEMENT
___________________________
Dated as of February 23, 1995
TABLE OF CONTENTS
Section
Page
The Notes 1
Authorization of Issue of Notes 1
Security for the Notes 2
Purchase and Sale of Notes 2
Series A Notes 2
Series B Notes 2
Conditions Precedent 3
Conditions Precedent to Closing 3
Conditions Precedent to Hancock Funding 7
Prepayments 8
Required Prepayments 8
Optional Prepayment with Yield-
Maintenance Amount 9
A. Notice of Optional Prepayment 10
B. Partial Payments Pro Rata 10
C. Retirement of Notes 10
D. Change in Control 11
E. Pillsbury Payments 11
2. Affirmative Covenants 11
A. Reporting Requirements 11
B. Information Required by Rule 144A 16
C. Inspection of Property 16
D. Covenant to Secure Note Equally 16
E. Guaranteed Obligations 17
F. Corporate Existence, Etc. 17
G. Payment of Taxes and Claims 17
H. Compliance with Laws, Etc. 18
I. No Integration 18
J. Maintenance of Insurance 18
K. Other Covenants 19
3. Negative Covenants 19
A. Current Ratio and Interest Coverage 19
B. Dividend Limitation 20
C. Lien, Debt and Other Restrictions 21
D. Issuance of Stock by Subsidiaries 28
E. No Prepayment, Modification or Consent
28
4. Events of Default 28
A. Acceleration 28
B. Rescission of Acceleration 33
C. Notice of Acceleration or Rescission
34
D. Other Remedies 34
5. Representations; Covenants and Warranties 34
A. Organization; Authority; Enforceability 34
B. Financial Statements 35
C. Actions Pending 35
D. Outstanding Debt 36
E. Pollution and Other Regulations 36
F. Taxes 36
G. Conflicting Agreements and Other Matters
37
H. Offering of Note 37
I. Use of Proceeds 38
J. ERISA 38
K. Governmental Consent 39
L. Disclosure 39
M. Title to Properties 39
N. Patents, Licenses, Franchise, Etc. 40
O. Investment Company Act 40
P. Public Utility Holding Company Act 40
Q. Solvency 40
R. Absence of Foreign or Enemy Status 41
S. Pillsbury Agreements 41
T. Bank Facility 42
6. Representations of the Purchaser 42
A. Nature of Purchase 42
B. Source of Funds 42
7. Definitions 42
A. Yield-Maintenance Terms 42
B. Other Terms 44
C. Accounting Terms and Determination 55
8. Miscellaneous 56
A. Note Payments 56
B. Expenses 56
C. Amendments and Waivers 57
D. Form, Registration, Transfer and
Exchange of Notes; Lost Notes 59
E. Persons Deemed Owners; Participations 60
F. Survival of Representations and Warranties;
Entire Agreement 60
G. Successors and Assigns 60
H. Disclosure to Other Persons 60
I. Notices 61
J. Satisfaction Requirement 62
K. Governing Law 62
L. Severability 62
M. Descriptive Headings 62
N. Payments Due on Non-Business Days 63
O. Counterparts 63
P.
Purchaser Schedule
Exhibit A - Form of Note
Exhibit B-1 - Form of Opinion of Company's Counsel
Exhibit B-2 - Form of Opinion of Counsel to Pillsbury
and the Senior Entity
Exhibit C - Form of Pledge Agreement
Exhibit D - Form of Pillsbury 1111(b) Election
Exhibit E - Form of Sharing Letter
Exhibit F - Form of Letter Agreement
Schedule 3A(7) - Good Standing Certificates
Schedule 3A(13) - Specified Material Agreements
Schedule 6C(3) - Outstanding Guarantees
Schedule 6C(5) - Excluded Assets
Schedule 6C(6) - Sale/Lease-Back
Schedule 8A - Corporate Organization
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
SENECA FOODS CORPORATION
1162 Pittsford-Victor Road
Pittsford, New York 14534
As of February 23, 1995
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:
The Notes.
Authorization of Issue of Notes. The
Company will authorize the issue of its senior
promissory notes in the aggregate principal amount of:
$75,000,000, to be dated the date of
issue thereof, to mature February 23, 2005, 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
10.78% per annum and on overdue payments at the
rate specified therein, and
$50,000,000, to be dated the date of
the Hancock Funding, to mature on January 1,
2009, to bear interest on the unpaid principal
balance thereof from the date thereof until the
principal thereof shall have become due and
payable at the rate of 10.81% 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.
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.
Purchase and Sale of Notes.
Series A Notes. The Company hereby
agrees to sell to Prudential and, subject to the terms
and conditions herein set forth, Prudential agrees to
purchase from the Company one or more Notes in the
aggregate principal amount of $75,000,000 at 100% of
such aggregate principal amount. The Company will
deliver to Prudential, at the offices of King &
Spalding, New York, New York, one or more Notes
registered in Prudential's name, evidencing the
principal amount of Notes to be purchased by Prudential
and in the denomination or denominations specified in
the Purchaser Schedule attached hereto, against payment
of the purchase price thereof by (i) the cancellation
of the Company's 9.78% Senior Note due July 1, 2001 and
(ii) transfer of immediately available funds in an
amount equal to $55,421,821.08 for credit to the
Company's account #512-014-604 at Chemical Bank, N.A.,
Rochester, New York, ABA #021-000-128 on the date of
closing, which shall be February 23, 1995 or any other
date on or before February 24, 1995 upon which the
Company and the Purchasers may mutually agree (herein
called the "Closing" or the "Date of Closing"),
whereupon the Company's 9.78% Senior Notes due July 1,
2001 payable to Prudential shall be deemed to have been
paid in full.
Series B Notes. The Company hereby agrees
to sell to Hancock and, subject to the terms and
conditions herein set forth, Hancock agrees to purchase
from the Company one or more Notes in the aggregate
principal amount of $50,000,000 at 100% of such
aggregate principal amount. The Company will deliver
to Hancock, at the offices of King & Spalding, New
York, New York, one or more Notes registered in
Hancock's name, evidencing the aggregate principal
amount of the Notes to be purchased by Hancock 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
#512-014-604 at Chemical Bank, N.A., Rochester, New
York, ABA #021-000-128 on the date of closing, which
shall be March 1, 1995 or any other date on or before
March 9, 1995 upon which the Company and Hancock may
mutually agree (herein called the "Hancock Funding").
Conditions Precedent.
Conditions Precedent to Closing. The
obligation of the Purchasers to enter into, execute and
deliver this Agreement and, with respect to Prudential,
purchase the Series A Notes as described in paragraph
2A is subject to the satisfaction, on or before the
Date of Closing, of the following conditions, as
determined in sole judgment of the Purchasers:
Related Documents. Each Purchaser shall
have received each of the following documents duly
executed and delivered by the parties thereto:
Pledge Agreement;
Pillsbury Consent;
Pillsbury 1111(b) Election;
Intercreditor Agreement; and
the Subordination Letter.
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.
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.
Opinions of Counsel. Each Purchaser shall
have received from (i) Jaeckle, Fleischmann & Mugel,
counsel to the Company, a favorable opinion in form and
content satisfactory to the Purchasers and in
substantially the form of Exhibit B-1 hereto,
(ii) Dorsey & Whitney, counsel to Pillsbury and the
Senior Entity, a favorable opinion in form and content
satisfactory to the Purchasers and substantially in the
form of Exhibit B-2 hereto and a consent letter with
respect thereto and (iii) the General Counsel of
Pillsbury and the Senior Entity, a favorable opinion in
form and substance satisfactory to the Purchasers, and
a consent letter with respect thereto.
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.
Purchase Permitted By Applicable Laws. The
purchase of and payment for the Series A Notes to be
purchased by Prudential 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
Prudential 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 Series A Notes shall on the Date of
Closing qualify as a legal investment for Prudential
under applicable insurance law (without regard to any
"basket" or "leeway provisions"), and such acquisition
shall not subject Prudential to any penalty or other
onerous condition contained in or pursuant to any such
law or regulation. Prudential shall have received such
certificates or other evidence as Prudential may
request to establish compliance with this condition.
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:
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;
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
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.
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 3A(7), each dated as of a date not more than
thirty days prior to Closing.
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 July 31,
1994.
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.
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.
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. The
transactions described in each of the foregoing
documents which are to occur prior to the Date of
Closing shall have been consummated in all material
respects in accordance with the terms and provisions
thereof, and 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.
Senior Entity Certificate. Each Purchaser
shall have received a certificate, as contemplated by
the Pillsbury Consent, duly executed and delivered by
the Senior Entity.
Material Agreements. Each Purchaser shall
have received a true, correct and duly executed copy of
each of the Material Agreements specified on
Schedule 3A(13), 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.
Prepayment of 1991 Note. The Company shall
have prepaid to Prudential the Company's 9.78% Senior
Notes due July 1, 2001 payable to Prudential which as
of the date hereof has an outstanding principal balance
of $26,600,000 by the payment in immediately available
funds an amount equal to $7,580,109.41 and through the
reduction of the purchase price payable by Prudential
under paragraph 2A hereof.
Bank Facility. Each Purchaser shall have
received evidence that the Company has obtained a
committed Bank Facility, having a term of no less than
three years and on such terms and conditions acceptable
to each Purchaser, including without limitation a
sharing of any right of setoff with the holders of the
Notes.
Expenses. All of the fees and
disbursements of each Purchaser (including without
limitation special counsel to the Purchasers) shall
have been paid in full.
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.
Conditions Precedent to Hancock Funding.
The obligation of Hancock to purchase the Series B
Notes as described in paragraph 2B is subject to the
satisfaction, on or before the date of the Hancock
Funding, of the following additional conditions, as
determined in Hancock's sole judgment:
Related Documents. Each of the
Related Documents shall be in full force and effect on
the date of the Hancock Funding and each party thereto
shall be in full compliance with its obligations
thereunder.
Opinion of Purchaser's Special Counsel.
Hancock shall have received from King & Spalding, who
are acting as special counsel for Hancock in connection
with the Hancock Funding, a favorable opinion
satisfactory to Hancock as to such matters incident to
the Hancock Funding as Hancock may reasonably request.
Opinions of Counsel. Hancock shall have
received from Jaeckle, Fleischmann & Mugel, counsel to
the Company, a favorable opinion in form and content
satisfactory to Hancock as to such matters incident to
the Hancock Funding as Hancock may reasonably request.
Representations and Warranties; No Default.
The representations and warranties contained in
paragraph 8 shall be true on and as of the Hancock
Funding, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on
the date of the Hancock Funding no Event of Default or
Default; and the Company shall have delivered to
Hancock a certificate of a Principal Officer, dated the
date of the Hancock Funding, regarding the foregoing.
Purchase Permitted By Applicable Laws. The
purchase of and payment for the Series B Notes to be
purchased by Hancock on the Date of the Hancock Funding
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 Hancock 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 Series B Notes shall on
the date of the Hancock Funding qualify as a legal
investment for Hancock under applicable insurance law
(without regard to any "basket" or "leeway
provisions"), and such acquisition shall not subject
Hancock to any penalty or other onerous condition
contained in or pursuant to any such law or regulation.
Hancock shall have received such certificates or other
evidence as Hancock may request to establish compliance
with this condition.
Proceedings. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated by the Hancock Funding and
all documents incident thereto shall be satisfactory in
substance and form to Hancock, and Hancock shall have
received all such counterpart originals or certified or
other copies of such documents as Hancock may
reasonably request and Hancock shall have received a
certificate of a Principal Officer, dated the date of
the Hancock Funding, confirming each certificate
delivered on the Date of Closing.
No Material Adverse Change. Hancock shall
have received a certificate from a Principal Officer of
the Company dated the date of the Hancock Funding 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
July 31, 1994.
Expenses. All of the fees and
disbursements of Hancock (including without limitation
Hancock's special counsel) shall have been paid in
full.
Other Documents. Hancock shall have
received such other certificates, legal opinions and
documents as Hancock or its special counsel may
reasonably request, all in form and substance
reasonably satisfactory to Hancock.
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.
Required Prepayments.
Series A Notes. Until the Series A
Notes shall be paid in full, the Company shall apply to
the prepayment of the Series A Notes, without premium,
the sum opposite the dates set forth below on such
dates:
$6,000,000 February 23, 1998
$7,500,000 February 23, 1999
$8,400,000 February 23, 2000
$8,400,000 February 23, 2001
$8,700,000 February 23, 2002
$12,000,000 February 23, 2003
$12,000,000 February 23, 2004
and such principal amounts of the Series A Notes,
together with interest thereon to the prepayment dates,
shall become due on such prepayment dates. The
remaining $12,000,000 principal amount of the Series A
Notes, together with interest accrued thereon, shall
become due on the maturity date of the Series A Notes
on February 23, 2005.
Series B Notes. Until the Series B Notes
shall be paid in full, the Company shall apply to the
prepayment of the Series B Notes, without premium, the
sum opposite the dates set forth below on such dates:
$3,750,000 March 1, 2000
$3,750,000 March 1, 2001
$5,000,000 March 1, 2002
$5,000,000 March 1, 2003
$5,000,000 March 1, 2004
$5,000,000 March 1, 2005
$5,000,000 March 1, 2006
$5,000,000 March 1, 2007
$5,000,000 March 1, 2008
and such principal amounts of the Series B Notes,
together with interest thereon to the prepayment dates,
shall become due on such prepayment dates. The
remaining $7,500,000 principal amount of the Series B
Notes, together with interest accrued thereon, shall
become due on the maturity date of the Series B Notes
on January 1, 2009.
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 $1,000,000), 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.
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.
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.
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 paragraph 4D.
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 Paragraph 4F.
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.
Affirmative Covenants.
Reporting Requirements.
Financial Statements and Other Information.
The Company covenants that it will deliver to each
Significant Holder in duplicate:
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,
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
a Consolidated balance sheet of
the Company and its Subsidiaries as at the
end of such quarterly period,
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) and (B) the income statements and
statements of cash flows and changes in
stockholders' equity provided pursuant to this
clause for the Fiscal Quarter ending March 31,
1995 shall only cover the two month period then
ended;
as soon as practicable and in any
event within 90 days after the end of each
fiscal year,
consolidating and Consolidated
statements of income and cash flows and
stockholders' equity of the Company and
its Subsidiaries for such year, and
a consolidating and Consolidated
balance sheet of the Company and its
Subsidiaries as at the end of such year,
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) and (B) the income statements
and statements of cash flows and changes in
stockholders' equity provided pursuant to this
clause for the fiscal year ending March 31, 1995
shall only cover the eight month period then
ended;
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;
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;
promptly upon completion, the Seneca
Projection prepared in accordance with
Section 4.2 of the Alliance Agreement;
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;
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;
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
with reasonable promptness, such other
financial data as such Significant Holder may
reasonably request.
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.
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.
Special Information. The Company also
covenants that forthwith upon a Principal Officer of
the Company obtaining knowledge of:
an Event of Default or Default;
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;
a notice of termination delivered by
Pillsbury pursuant to the Alliance Agreement;
a material adverse change in the
financial condition, business or operations of
the Company and its Subsidiaries, taken as a
whole;
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
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.
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.
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.
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.
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.
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.
Payment of Taxes and Claims. The Company
covenants that it will, and will cause each of its
Subsidiaries to, pay before they become delinquent:
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
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.
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.
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.
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).
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.
Negative Covenants.
Current Ratio and Interest Coverage.
The Company covenants that it will not permit at any
time:
the ratio of Current Assets to Current
Liabilities to be less than 1.25 to 1.0 for each
Fiscal Quarter ending September and 1.50 to 1.0
for all other Fiscal Quarters;
the Interest Coverage Ratio for its
four consecutive Fiscal Quarters most recently
ended to be less than:
2.0 to 1.0 for any four
consecutive quarter period ending during
the period commencing on the Date of
Closing and ending on March 31, 1997, and
2.4 to 1.0 for any four
consecutive quarter period ending
thereafter; or
at any time, the excess of Current
Assets over Current Liabilities to be less than
$110,000,000;
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.
SConsolidated 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. The term "stock" as used in this
paragraph 6B shall include warrants or options to
purchase stock.
Lien, Debt and Other Restrictions. The
Company covenants that it will not and will not permit
any Subsidiary to:
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
Liens for taxes (including ad valorem
and property taxes) not yet due or which are
being actively contested in good faith by
appropriate proceedings,
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,
Liens on property or assets of a
Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary,
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,
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,
the extension of existing Liens on
real property to fixtures subsequently attached
to such real property,
any Lien securing Funded Debt
permitted by paragraph 6C(2) and listed on
Schedule 8D hereto attached;
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
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).
Debt. Maintain, create, incur, assume or
in any other way become liable in respect of any Debt,
at any time, if:
the aggregate outstanding amount of
Consolidated Senior Funded Debt, whether Secured
or Unsecured, exceeds an aggregate amount equal
to 50% of Consolidated Tangible Gross Worth for
any date of determination during the period
commencing with the Date of Closing and ending
on January 31, 1998, and 45% of Consolidated
Tangible Gross Worth for any date of
determination on or after February 1, 1998;
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 Percenta
ge
Date of Closing through 74%
September 30, 1995
October 1, 1995 through 72%
January 31, 1998
February 1, 1998 through 65%
January 31, 1999
For any date on or after 60%
February 1, 1999
the aggregate amount of Priority Debt
exceeds an aggregate amount equal to 10% of
Consolidated Tangible Net Worth.
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
make or permit to remain outstanding
loans or advances to any Subsidiary,
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,
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,
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,
endorse negotiable instruments for
collection in the ordinary course of business,
guarantee obligations of Subsidiaries
which are not prohibited by paragraph 6C(2),
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,
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,
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
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
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 Marion
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.
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));
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
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,
any Subsidiary may sell, lease,
transfer or otherwise dispose of any of its
assets to the Company or another Subsidiary,
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,
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,
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
the Company may sell, lease, transfer
or otherwise dispose of any or all of the assets
described in Schedule 6C(5);
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;
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
Certain Contracts. Except as hereinabove
permitted, enter into or be a party to
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
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
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
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
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).
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.
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 Section 7.12 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.
Events of Default.
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):
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
the Company defaults in the payment of
any interest on any Note for more than 3
Business Days after the date due; or
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
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
the Company fails to perform or
observe any agreement contained in paragraph 6;
or
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
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
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
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
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
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
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
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
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
an (A) event of default (as defined
therein) shall occur under the Bank Facility or
any of the Pillsbury Security Documents, or
(B) (i) 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 (ii) a majority of such banks
shall fail or refuse to advance funds under the
Bank Facility; or
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
a notice of termination is delivered
under the Alliance Agreement or the Alliance
Agreement shall terminate for any reason
whatsoever; or
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
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
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
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
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
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:
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,
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
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.
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:
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,
any amounts which have become due
solely by reason of such declaration shall not
have been paid,
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
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.
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.
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.
Representations, Covenants and Warranties.
The Company represents, covenants and warrants:
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.
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
July 31 in each of the years 1988 to 1994, 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 October 29 in
each of the years 1993 and 1994 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 July 31, 1994.
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.
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.
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.
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.
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.
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.
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 repay certain Debt
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.
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. 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.
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.
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.
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 July 31, 1994 referred to in paragraph 8B
(other than properties and assets disposed of in the
ordinary course of business) 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.
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.
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.
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.
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.
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).
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 the transactions
described in each of the foregoing documents which are
to occur prior to the Date of Closing have been
consummated in all material respects in accordance with
the terms and provisions thereof, 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.
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 the
transactions described in each of the foregoing
documents which are to occur prior to the Date of
Closing have been consummated in all material respects
in accordance with the terms and provisions thereof,
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.
Representations of the Purchaser. Each
Purchaser hereby represents, as to itself, as follows:
Nature of Purchase. Such Purchaser is
not acquiring the Note to be purchased by such
Purchaser hereunder with a view to or for sale in
connection with any distribution thereof within the
meaning of the Securities Act, provided that the
disposition of such Purchaser's property shall at all
times be and remain within such Purchaser's control.
Source of Funds. No part of the funds
being used by such Purchaser to pay the purchase price
of the Notes being purchased by such Purchaser
hereunder constitutes assets allocated to any separate
account maintained by such Purchaser. For the purpose
of this paragraph 9B, the term "separate account" shall
have the meaning specified in Section 3 of ERISA.
Definitions. For the purpose of this
Agreement, the terms defined in the introductory
sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the
following terms shall have the meanings specified with
respect thereto below:
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 bill 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.
Other Terms.
"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 Credit Agreement
dated as of the date hereof among the Company, The
Chase Manhattan Bank, N.A., as Agent and banks a party
thereto, having an aggregate commitment of at least
$65,000,000 during the period commencing with the date
hereof and ending on September 30, 1995, and at all
times thereafter $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 Wolcott or Kayser families) in
any transaction or series of related transactions of
shares of the Company representing more than 50% of the
voting control of the Company; and (ii) the Wolcott and
Kayser families shall cease to own, directly or
indirectly, at least 25% of the outstanding voting
capital stock of the Company.
"Closing" shall have the meaning set forth in
paragraph 2A 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, N.A., 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.
"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 2A 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" means the three month period
ending June 30, September 30, December 31 and March 31
of each year.
"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.
"Hancock" shall mean John Hancock Mutual Life
Insurance Company and its successors and assigns.
"Hancock Funding" shall have the meaning
specified in paragraph 2B.
"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
Intercreditor Agreement dated as of the date hereof
among the Collateral Agent, each bank a party to the
Bank Facility and each Purchaser, as it may be 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).
"Note" or "Notes" shall have the meaning
specified in paragraph 1A.
"Officer's Certificate" shall mean a certificate
signed in the name of the Company by a Principal
Officer.
"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 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; and
(iii) each of the Pillsbury Security
Documents.
"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 1111(b) Election" shall mean that
certain Agreement relating to 11. U.S.C. 1111(b)
executed by Pillsbury, substantially in the form of
Exhibit D hereto, as it 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 as of
the date hereof executed by the Company in favor of the
Collateral Agent, substantially in the form of
Exhibit C hereto, as it may be 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.
"Prudential" shall mean The Prudential Insurance
Company of America and its successors and assigns.
"Purchasers" shall mean, collectively, Prudential
and Hancock.
"Related Documents" shall mean each of this
Agreement, each Note, the Pledge Agreement, the
Pillsbury Consent, the Pillsbury 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
Incorporated, a Delaware corporation and parent of its
wholly-owned subsidiary, Pillsbury.
"Senior Funded Debt" shall mean all Funded Debt
of the Company or its Subsidiaries other than
Subordinated Debt.
"Series A Notes" shall mean the Note or Notes
originally issued by the Company to Prudential pursuant
to paragraph 2A.
"Series B Notes" shall mean the Note or Notes
originally issued by the Company to Hancock pursuant to
paragraph 2B.
"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 February 10,
1995 among Pillsbury, the Purchasers and The Chase
Manhattan Bank, N.A., as agent for the banks under the
Bank Facility, 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.
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).
Miscellaneous.
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.
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:
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;
all document production and duplica
tion 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
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.
Amendments and Waivers.
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:
the maturity of any Note,
the principal of, or the rate or time
of payment of interest on, or any
Yield-Maintenance Amount payable with respect to
any Note,
the time, amount or allocation of any
prepayments, or
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.
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.
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.
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.
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.
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.
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.
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.
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:
such holder's directors, officers,
employees, agents, Affiliates and professional
consultants,
any other holder of any Note,
any Person to which such holder offers
to sell such Note or any part thereof,
any Person to which such holder sells
or offers to sell a participation in all or any
part of such Note,
any federal or state regulatory
authority having jurisdiction over such holder,
the National Association of Insurance
Commissioners or any similar organization or
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.
Notices. All written communications
provided for hereunder shall be sent by first class
mail or nationwide overnight delivery service (with
charges prepaid) and:
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,
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
if to the Company, addressed to it at
1162 Pittsford-Victor Road, Pittsford, New York
14534, 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 (716) 385-4249.
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.
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.
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.
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.
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.
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/Kraig H. Kayser__
Title: President and Chief
Executive Officer
[Signatures continued on next page.]
The foregoing Agreement is
hereby accepted as of the date
first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By_/s/Kevin J. Kraska____________
Title: Vice President
[Signatures continued on next page.]
The foregoing Agreement is
hereby accepted as of the date
first above written.
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By__/s/Scott A. Mc Fetridge______
Title: Agribusiness Investment Officer
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
_____% [SERIES A] [SERIES B] SENIOR NOTE DUE _________
_, 200_
No. R-1 __________, 1995
$__________
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 Morgan
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 Morgan
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 February __, 1995 (herein called
the "Agreement"), among the Company, The Prudential
Insurance Company of America and John Hancock Mutual
Life Insurance Company 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_/s/Kraig H. Kayser__
Title: President and Chief
Executive Officer
SCHEDULE 8G-2
to Note Agreement dated February 22, 1995
Agreements Restricting Debt
Note Agreement dated February 22, 1995.
Credit Agreement dated as of February 22, 1995
among the Company, The Chase Manhattan Bank,
N.A., as Agent and the banks a party thereto.
[Insert description of ABN Reimbursement
Agreement, as amended to reflect new covenants.]
EXHIBIT F
[FORM OF LETTER AGREEMENT]
February __, 1995
The Prudential Insurance Company
of America
c/o Prudential Capital Group
One Gateway Center
7-45 Raymond Boulevard West
Newark, New Jersey 07102-5311
Re: Note Agreement dated February __, 1995
of Seneca Foods Corporation
Ladies and Gentlemen:
Reference is made to that certain Note Agreement dated February 23,
1995 (the "Note Agreement"), among each of you and Seneca Foods Corporation
(the "Company"). Capitalized terms used herein unless otherwise specified
shall have the meanings set forth in the Note Agreement.
exercise its rights to require the Company to purchase all
or any portion of its Notes pursuant to paragraph 4F of the Note Agreement or
(ii) again irrevocably relinquish its right to require such purchase.
If the foregoing correctly describes our understanding with respect to
the subject matter of this letter agreement, please execute this letter in
the place indicated below.
Very truly yours,
SENECA FOODS CORPORATION
By_/s/Kraig H. Kayser__
Title: President and Chief
Executive Officer
Accepted and agreed as of the date above:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By_/s/Kevin J. Kraska____________
Title: Vice President
Acknowledged as of the date above:
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By__/s/Scott A. Mc Fetridge______
Title: Agribusiness Investment Officer
