EXHIBIT 99.5
EXECUTION COPY
PRO-FAC COOPERATIVE, INC.
as the Borrower
AGRILINK FOODS, INC.
as the Lender
CREDIT AGREEMENT
Dated as of
August 19, 2002
TABLE OF CONTENTS
1. DEFINITIONS................................................................1
1.1. Defined Terms.....................................................1
1.2. Accounting Matters................................................5
2. LOAN FACILITY..............................................................5
2.1. Loans.............................................................5
2.2. Borrowing Procedure...............................................5
2.3. Voluntary Prepayments.............................................5
2.4. Mandatory Prepayments.............................................5
2.5. Note..............................................................6
2.6. Lender's Records..................................................6
2.7. Use of Proceeds...................................................6
3. PAYMENTS OF INTEREST.......................................................6
3.1. Interest..........................................................6
3.2. Interest Payments and Computations................................6
4. CONDITIONS.................................................................6
4.1. Initial Borrowing.................................................6
4.2. All Borrowings....................................................7
5. REPRESENTATIONS AND WARRANTIES.............................................7
5.1. Existence and Authority...........................................7
5.2. Authorization.....................................................8
5.3. Binding Effect....................................................8
5.4. No Violation of Governmental Orders or Laws.......................8
5.5. Consents, etc.....................................................8
5.6. No Conflicts with Agreements, etc.................................8
5.7. Disclosure........................................................9
5.8. Solvency..........................................................9
5.9. Taxes.............................................................9
6. COVENANTS..................................................................9
6.1. Financial Statements and other Information........................9
6.2. Payment of Principal and Interest................................10
6.3. Further Assurances...............................................10
6.4. Taxes............................................................10
6.5. Liens............................................................10
6.6. Compliance with Laws.............................................10
7. EVENTS OF DEFAULT; REMEDIES...............................................10
7.1. Events of Default................................................10
7.2. Remedies.........................................................11
7.3. Application of Proceeds..........................................12
7.4. Waiver...........................................................12
7.5. Power of Attorney................................................12
8. EFFECT OF LENDER'S INABILITY TO ADVANCE FUNDS ON OTHER AGREEMENTS.........12
9. GENERAL PROVISIONS........................................................13
9.1. Notices..........................................................13
9.2. Successors and Assigns; Assignments and Participations...........14
9.3. Section Headings.................................................14
9.4. Interpretation...................................................14
9.5. Severability of Provisions; Invalidity...........................14
9.6. Amendments and Waivers...........................................14
9.7. Fees and Costs...................................................14
9.8. Indemnification..................................................14
9.9. Counterparts.....................................................15
9.10. Integration......................................................15
9.11. No Waiver; Remedies Cumulative...................................15
9.12. Survival.........................................................15
9.13. Time of Essence..................................................15
10. GOVERNING LAW.............................................................16
EXHIBIT A - Note
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is entered into as of August 19, 2002,
between PRO-FAC COOPERATIVE, INC., a New York cooperative corporation (the
"Borrower"), and AGRILINK FOODS, INC., a New York corporation (together with its
successors, the "Lender").
RECITALS
(1) The Borrower has requested the Lender to provide certain credit
facilities to the Borrower as more particularly set forth in this Agreement.
(2) The proceeds of such credit facilities shall be used by the Borrower
for general corporate and working capital purposes.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lender and the Borrower hereby
agree as follows:
1. DEFINITIONS
1.1. Defined Terms. For purposes of this Agreement, the following terms
shall have the respective meanings provided below in this Section 1.1:
"Affiliate" of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
"Applicable Anniversary Amount" means, as of any anniversary of this
Agreement, an amount equal to the aggregate amount of all Loans outstanding on
such anniversary.
"Board" means the Board of Governors of the Federal Reserve System.
"Borrowing Request" is defined in Section 2.2.
"Business Day" means any day on which commercial banks are not authorized
or required to close in New York, New York.
"Charter Documents" means, in respect of any Person, the certificate of
incorporation, by-laws, operating agreement, or other governing or constituent
document or agreement, as applicable.
"Closing Date" means the date of the initial Loan upon the satisfaction
of the conditions set forth in Section 4.
"Collateral" means any and all collateral from time to time securing the
Obligations, including without limitation all "Collateral" as defined in the
Pledge.
"Commitment" means the commitment of the Lender under this Agreement to
make Loans to the Borrower, as adjusted from time to time in accordance with the
provisions hereof.
"Default" means any event or condition which, with due notice or lapse of
time or both as may be required under this Agreement, would become an Event of
Default.
"Default Rate" is defined in Section 3.1.
"Dollar" and the sign "$" mean lawful money of the United States of
America.
"Event of Default" is defined in Section 7.1.
"GAAP" means generally accepted accounting principles as set forth in
opinions, statements and pronouncements of the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination.
"Governmental Body" means any Federal, state, county, city, town,
village, municipal or other governmental department, commission, board, bureau,
agency, authority or instrumentality, domestic or foreign.
"Holdings LLC" means Agrilink Holdings LLC, a Delaware limited liability
company.
"Insolvency Proceeding" is defined in subsection 7.1(d).
"Lien" means any security interest, mortgage, pledge, deed of trust,
lien, claim, charge, encumbrance, title retention agreement or lessor's interest
under a capitalized lease (determined in accordance with GAAP) or analogous
instrument.
"Loan Documents" means this Agreement, the Note and Pledge, and all other
documents, instruments and agreements (including financing statements and
certificates) executed and delivered from time to time in connection with or
pursuant to this Agreement.
"Loans" are defined in Section 2.1.
"Marketing and Facilitation Agreement" means the Amended and Restated
Marketing and Facilitation Agreement dated as of the date hereof, between the
Borrower and the Lender.
"Material Adverse Effect" means with respect to any Person, any change,
event, condition, development or effect that individually or in the aggregate
with all other changes, events, conditions, developments and effects, is or is
reasonably likely to be materially adverse to (i) the business, operations,
assets, liabilities, results of operations, prospects or condition (financial or
otherwise) of such Person and its Subsidiaries, taken as a whole, or (ii) the
ability of such Person to perform its obligations under this Agreement or any
other Loan Document.
"Note" is defined in Section 2.4.
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"Obligations" means all obligations (monetary or otherwise) of the
Borrower to the Lender arising under or in connection with the Loan Documents.
"Officer's Certificate" means, with respect to the Borrower a certificate
signed on the Borrower's behalf by the General Manager of the Borrower, in the
signer's capacity as such.
"Order" means any order, writ, injunction, decree, judgment, award,
determination or written direction or demand of any court, arbitrator or
Governmental Body.
"Permitted Liens" means:
(a) Liens for taxes, assessments or governmental charges
or claims, the payment of which is being diligently contested
in good faith, and in respect of which adequate reserves have
been established, if they have no priority over any of the
Lender's security interests;
(b) any attachment or judgment Lien (including judgment or
appeal bonds) which, within 30 days after the entry thereof,
shall have been discharged or bonded or the execution thereof
shall have been stayed pending appeal, or which shall have
been discharged or bonded within 30 days after the expiration
of any such stay;
(c) Liens incurred pursuant to the Loan Documents; and
(d) Liens incurred pursuant to Section 4.5 of Holdings
LLC's limited liability company agreement.
"Permitted Distributions" means, (i) payments made by the Lender in an
aggregate amount not exceeding $10,000,000 in any twelve-month period under the
Termination Agreement, (ii) payments made by the Lender pursuant to and in
accordance with the Marketing and Facilitation Agreement, other than the payment
of any Shortfall Adjustment or Termination Fee (each, as defined in the
Marketing and Facilitation Agreement), (iii) payments made by the Lender with
respect to its indemnification obligations pursuant to and in accordance with
the UPA, (iv) payments that have been delayed and that are made as of the date
hereof as contemplated by Section 12.12 of the UPA, and (v) cash distributions
from time to time made by Holdings LLC pursuant to the governance documents of
Holdings LLC which are distributed to the Borrower with respect to income
allocated to the Borrower with respect to the net income of Holdings LLC.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Pledge" means the pledge agreement of even date herewith among the
Borrower and the Lender.
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"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal, or mixed, tangible or
intangible.
"Solvent" means, when used with respect to any Person, that (A) the fair
value (as a going concern) of the property of such Person is greater than the
total amount of the liabilities (including, without limitation, contingent
liabilities) of such Person, (B) the present fair salable value (as a going
concern) of the assets of such Person is not less than the amount that will be
required to pay the probable liabilities of such Person on its debts as they
become absolute and mature, (C) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (D) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital. For such purposes, any contingent liability (including, without
limitation, pending litigation, guarantees, pension plan liabilities and claims
for federal, state, local and foreign taxes, if any) is valued at the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability. For purposes of determining the Borrower's solvency, (i) the
contingent guarantee obligation of Borrower with respect to Lender's 11 7/8%
Senior Subordinated Notes due 2008 shall be deemed to be $0, and (ii) the value
of each unit of Holdings LLC held by the Borrower shall be deemed to at least
equal the value of such unit on the date it was initially issued to the
Borrower.
"Subsidiary" means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares or other ownership interests as have more than 50% of the
ordinary voting power for the election of directors or other managers of such
entity.
"Termination Agreement" means the letter agreement, dated as of the date
hereof, between the Borrower and the Lender, with respect to the termination of
the existing marketing and facilitation agreement dated as of November 3, 1994.
"Third Party Indebtedness" means, (i) indebtedness under any credit
facility provided by a bank or other financial institution, (ii) indebtedness
for borrowed money under any bond or note indenture and notes issued pursuant
thereto, (iii) indebtedness under any financing facility, note or other evidence
of indebtedness (as determined in accordance with generally accepted accounting
principles) provided by or issued to a financial institution in connection with
a borrowing or other financing transaction, and (iv) any refinancing of the
foregoing.
"Transactions" means the consummation of the Loans and the other actions
to be taken and documents to be delivered on, prior to or after the Closing Date
as contemplated by this Agreement and the other Loan Documents.
"Transition Services Agreement" means the Transitional Services
Agreement, dated as of the date hereof, between the Borrower and the Lender.
"UPA" means the Unit Purchase Agreement dated as of June 20, 2002 among
Vestar/Agrilink Holdings LLC, the Borrower and the Lender.
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1.2. Accounting Matters. Unless the context otherwise clearly requires,
all accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
2. LOAN FACILITY.
2.1. Loans. Subject to Section 2.4(a), the Lender agrees to make loans to
the Borrower ("Loans") from time to time before the fifth anniversary of this
Agreement in such amounts as the Borrower may from time to time request from the
Lender; provided that the aggregate amount of all outstanding Loans shall not
(a) at any time on or before the first anniversary of this Agreement exceed
$1,000,000, and (b) at any time after the first anniversary of this Agreement
exceed the sum of (i) the Applicable Anniversary Amount as at the most recent
anniversary of this Agreement plus (ii) $1,000,000; provided further that in the
event that the Lender is prohibited from making loans to the Borrower because of
the existence of a default, that is neither waived nor cured, under the terms of
any Third Party Indebtedness of the Lender and/or any of its Subsidiaries having
a principal amount in excess of $20,000,000, the Loan advances due hereunder
will be deferred until permitted by the applicable instruments evidencing such
indebtedness and will then be made to the fullest extent permitted. Loans shall
be made in Dollars. Interest shall accrue and be payable as provided in Sections
3.1 and 3.2, and the aggregate outstanding principal amount of the Loans shall
mature and be payable in full as provided in Section 2.4(b).
2.2. Borrowing Procedure. The Borrower may request a Loan pursuant to
written notice or pursuant to telephonic notice confirmed in writing or by
facsimile within one (1) Business Day of such telephonic notice (each a
"Borrowing Request"). Each Borrowing Request shall be made not later than 5
Business Days prior to the proposed date of the Loan, and shall specify (a) the
date of the requested Loan, and (b) the amount of the requested Loan. All
Borrowing Requests and confirmations thereof in writing or by facsimile must be
signed on the Borrower's behalf by an officer or manager of the Borrower who has
been identified in writing to the Lender as an officer or manager authorized to
make Borrowing Requests on behalf of the Borrower. Each Loan shall be in a
minimum amount of $100,000.
2.3. Voluntary Prepayments. The Borrower may at any time prepay, without
penalty, all or any portion of the outstanding principal of the Loans, provided
that (a) Borrower shall provide the Lender with not less than 2 Business Days'
prior written notice of the prepayment of any Loan, (b) such prepayments must be
in the amount of at least $50,000, and (c) such payments shall be credited first
to the accrued interest and the remainder applied to principal.
2.4. Mandatory Prepayments.
(a) The Borrower shall make a prepayment of the Loans (with a
corresponding reduction in the Commitment) within 2 Business Days' of receipt by
the Borrower of (i) any proceeds from the sale or disposition of its interests
in Holdings LLC, and (ii) any distribution or payment by Holdings LLC other than
any Permitted Distribution; provided that if the aggregate amount of such
proceeds, distributions and payments exceeds the outstanding amount of the Loans
at such time, then the Commitment shall be reduced Dollar for Dollar in an
amount equal
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to such excess. Any payment pursuant to this Section 2.4 shall be credited first
to the accrued interest and the remainder applied to principal.
(b) The Loans shall mature and be payable in full on the date on which
the Borrower sells or otherwise disposes of its direct or indirect equity
interests in Holdings LLC, or upon direct or indirect receipt by the Borrower of
a distribution from Holdings LLC in connection with a liquidation of, or a sale
of all or substantially all of the assets of, Holdings LLC or one or more of its
subsidiaries (the "Maturity Date").
2.5. Note. The Loans of the Lender shall be evidenced by a promissory
note substantially in the form set forth in Exhibit A, with appropriate
insertions (the "Note").
2.6. Lender's Records. With respect to each Loan, the Lender is hereby
authorized to note the date, principal amount and interest rate applicable
thereto and any payments made thereon on its books and records (either manually
or by electronic entry) and/or on any schedule attached to the Note, which
notations shall (in the absence of manifest error) be presumptively accurate.
2.7. Use of Proceeds. The proceeds of each Loan shall be used by the
Borrower for general corporate and working capital purposes.
3. PAYMENTS OF INTEREST
3.1. Interest. Amounts outstanding under the Loans shall bear interest at
the rate of 10% per annum; provided, that following the occurrence and during
the continuance of an Event of Default, all amounts outstanding under the Loans
shall bear interest at the rate of 12% per annum (the "Default Rate").
3.2. Interest Payments and Computations. Accrued interest on all
outstanding Loans shall be compounded annually. Accrued interest shall be
payable at the time of payment of principal amounts in respect of the amount of
such principal payment, and all other accrued interest shall be due and payable
on the Maturity Date. Interest on each Loan shall be computed on the basis of a
365-day year and shall be assessed for the actual number of days elapsed.
4. CONDITIONS.
4.1. Initial Borrowing. The obligation of the Lender to make the initial
Loan hereunder is subject to the fulfillment, to the satisfaction of the Lender
in its sole discretion of each of the following conditions:
(a) Proceedings Satisfactory. This Agreement shall have been duly
executed and delivered by all parties hereto and all corporate and other
proceedings taken or to be taken in connection with this Agreement and all
documents incident hereto shall be satisfactory in form and substance to the
Lender and its counsel, and the Lender and its counsel shall have received all
such counterpart originals or certified or other copies of such documents as
they may request.
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(b) Representations and Warranties True, Etc. The representations and
warranties made by the Borrower under the Loan Documents shall be true and
correct on and as of the Closing Date (except to the extent they relate to an
earlier date), and the Borrower shall have performed all agreements and acts on
its part required to be performed under the Loan Documents on or prior to the
Closing Date, including but not limited to the delivery of any Collateral to the
Lender that is necessary to perfect the Lender's security interest in such
Collateral pursuant to the Loan Documents. The Borrower shall have delivered to
the Lender an Officer's Certificate, dated the Closing Date, to such effect and
to the effect of the matters set forth in Section 4.2(a).
(c) Other Loan Documents. The Borrower shall have executed and delivered
each of the Loan Documents.
4.2. All Borrowings. The obligation of the Lender to make any Loan
hereunder (including the initial Loan) is further subject to the fulfillment, to
the satisfaction of the Lender of each of the following conditions:
(a) Compliance with Warranties, No Default, etc. Both before and after
giving effect to any Loan, (i) each of the representations and warranties set
forth in Section 5 shall be true and correct on and as of the date of such Loan
as though made on such date, except to the extent that they relate to an earlier
date, and (ii) there shall exist no Default or Event of Default. The Borrower
shall have delivered to Lender an Officer's Certificate, dated the date of each
Loan, to such effect.
(b) Borrowing Request. The Lender shall have received a Borrowing Request
conforming to the requirements of Section 2.2.
(c) Satisfactory Legal Form. All documents executed or submitted pursuant
hereto by or on behalf of the Borrower shall be satisfactory in form and
substance to the Lender and its counsel; the Lender and its counsel shall have
received all information, approvals, documents or instruments as they may
reasonably request.
(d) Loan Limits. The obligation of the Lender to make any Loan hereunder
(including the initial Loan) is further subject to the condition that the
outstanding principal amount of all Loans after giving effect to such Loan shall
not exceed the applicable limits set forth in Section 2.1.
5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby makes the following
representations and warranties to the Lender. For purposes of these
representations and warranties, it is expressly understood that for purposes of
any reference to the Borrower's "knowledge", the knowledge of any senior officer
or manager of the Borrower shall be attributed to the Borrower.
5.1. Existence and Authority. The Borrower is a cooperative corporation
duly formed, validly existing and in good standing under the laws of New York
and is qualified to do business and in good standing in each other jurisdiction
in which the failure to so qualify would have or could reasonably be expected to
have a Material Adverse Effect. The Borrower has all requisite
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power to own its Properties and to carry on its business as now being conducted
and as proposed to be conducted, and to execute, deliver and perform its
obligations under the Loan Documents, to execute, issue, sell, deliver and
perform its obligations under the Notes and to engage in the respective
transactions contemplated by the Loan Documents.
5.2. Authorization. The execution, delivery and performance by the
Borrower of the Loan Documents are within its powers and have been duly
authorized by all necessary action by or on behalf of the Borrower and such Loan
Documents have been validly executed.
5.3. Binding Effect. The Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except, in each case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other laws relative to or
affecting the enforcement of creditors' rights generally in effect from time to
time and by general principles of equity.
5.4. No Violation of Governmental Orders or Laws. The Borrower is not,
and none of its Properties is or will be, after or as a result of giving effect
to the Transactions or any Loan, in default under or in violation of any Order
of any court, arbitrator or Governmental Body or any statute or law or any rule
or regulation of any Governmental Body (including, without limitation, any
building, zoning, environmental or other ordinance, code or rule), which default
or violation constitutes or could reasonably be expected to constitute a
Material Adverse Effect; and the Borrower is not subject to or a party to any
Order of any court or Governmental Body arising out of any action, suit or
proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition, intellectual property or similar
matters.
5.5. Consents, etc. No consent, approval or authorization of or
declaration, registration or filing with any Governmental Body or any other
Person (including, without limitation, any creditor or stockholder of the
Borrower) is required in connection with the execution or delivery of the Loan
Documents by the respective parties thereto or the performance by such parties
of their respective obligations hereunder or thereunder, or in connection with
the consummation of the transactions contemplated hereby and thereby, or as a
condition to the legality, validity or enforceability of the Loan Documents,
except for such consents, approvals, authorizations, declarations, registrations
or filings, the absence of which would not constitute, or could reasonably be
expected not to constitute, individually or in the aggregate, a Material Adverse
Effect.
5.6. No Conflicts with Agreements, etc. Neither the execution and
delivery of any Loan Document nor the fulfillment of or compliance with the
terms and provisions thereof, will conflict with, or result in a breach or
violation of any of the terms, conditions or provisions of, or constitute a
default under, any Charter Document of the Borrower, or any contract, agreement,
mortgage, indenture, lease, instrument, Order, statute, law, rule or regulation
to which the Borrower or any of its Properties is subject, or (except pursuant
to the Loan Documents) result in the creation of any Lien on any Properties of
the Borrower, which conflict, breach, violations, defaults or Liens, would
constitute or could reasonably be expected to constitute a Material Adverse
Effect. The Borrower is not in default of or breach under any agreement by which
it or
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any of its assets is bound, which default or breach has or could reasonably be
expected to have a Material Adverse Effect.
5.7. Disclosure. Except as otherwise disclosed in this Agreement and the
Schedules hereto, there is no fact known to the Borrower (other than matters of
a general economic or political nature) which constitutes or could reasonably be
expected to constitute a Material Adverse Effect.
5.8. Solvency. The Borrower is prior to, and will be, after giving effect
to, the Transactions and the application of the net proceeds of the Loans,
Solvent.
5.9. Taxes. The Borrower has timely filed all required tax returns and
paid, or made adequate provision to pay, all material taxes, except those being
contested in good faith and for which the Borrower maintains adequate reserves
under GAAP.
6. COVENANTS. The Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the Obligations
(except indemnity and other contingent obligations not then due and payable),
and unless the Lender shall otherwise consent in writing, the Borrower shall
comply with the following provisions of this Section 6.
6.1. Financial Statements and other Information. The Borrower will
furnish to the Lender:
(a) promptly after becoming aware of the existence of any Default or
Event of Default, an Officer's Certificate of the Borrower specifying the nature
and period of existence thereof and what action the Borrower is taking or
proposes to take with respect thereto;
(b) promptly after becoming aware of any Material Adverse Effect, or of
any event which could reasonably be expected to have a Material Adverse Effect,
an Officer's Certificate of the Borrower setting forth the details of such
Material Adverse Effect or event and stating what action the Borrower has taken
or proposes to take with respect thereto; and
(c) if at any time the Borrower ceases making filings under the
Securities Xxxxxxxx Xxx 0000:
(i) promptly when available and in any event within 120 days after
the close of each of its fiscal years, a copy of the annual audit report
of the Borrower for such fiscal year, including therein a balance sheet
of the Borrower as of the end of such fiscal year and statements of
earnings and cash flows of the Borrower for such fiscal year reported on
without a "going concern" exception, or a qualification arising out of
the scope of the audit, by independent auditors of recognized standing
selected by the Borrower and reasonably acceptable to the Lender; and
(ii) promptly when available and in any event within (a) 45 days
after the end of each fiscal quarter, a balance sheet of the Borrower as
of the end of such fiscal quarter, together with statements of earnings
and cash flows for such fiscal quarter and for the period beginning with
the first day of such fiscal year and ending on the last day of such
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fiscal quarter, together with an Officer's Certificate confirming that
such financial statements were prepared in accordance with GAAP.
6.2. Payment of Principal and Interest. The Borrower will duly and
punctually pay the principal of and interest on the Loans in accordance with the
terms of the Notes and this Agreement. The Borrower will comply with all of the
covenants, agreements and conditions contained in the Loan Documents to which it
is a party.
6.3. Further Assurances. Promptly upon request by the Lender, the
Borrower shall (a) correct any material defect or error that may be discovered
in any Loan Document to which it is a party or in the execution or
acknowledgment thereof, and (b) do, execute, acknowledge, deliver, record, file
and register any and all such further acts, deeds and other instruments as the
Lender may reasonably require from time to time in order (A) to carry out more
effectively the purposes of any Loan Document, and (B) better to assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Lender the rights
granted or now or hereafter intended to be granted to it under any Loan Document
or under any other instrument executed in connection with or pursuant to any
Loan Document.
6.4. Taxes. The Borrower will make timely payment of all material
federal, state, and local taxes or assessments, except those being contested in
good faith and for which the Borrower maintains adequate reserves under GAAP,
and will deliver to the Lender, on written demand, appropriate certificates
attesting to the payment.
6.5. Liens. The Borrower will not create, incur, or allow any Lien on any
of its interests in Holdings LLC, or assign or convey any right to receive
income in respect of such interests, except for Permitted Liens.
6.6. Compliance with Laws. The Borrower will comply with all laws, rules,
regulations and ordinances to which it is subject, noncompliance with which
could reasonably be expected to have a Material Adverse Effect. The Borrower
will maintain its existence and good standing in New York and maintain
qualification in each jurisdiction in which the failure to so qualify could
reasonably be expected to have a Material Adverse Effect.
7. EVENTS OF DEFAULT; REMEDIES
7.1. Events of Default. Any one or more of the following events shall
constitute an Event of Default by the Borrower under this Agreement.
(a) If the Borrower (i) fails to make any payment of principal or accrued
interest under the Obligations when due and payable or when declared due and
payable, or (ii) fails to make any payment of all or any portion of any other
Obligations within 5 Business Days after the date on which the same shall be due
and payable or be declared due and payable (whether interest, fees or otherwise,
including any interest which, but for the provisions of the United States
Bankruptcy Code, would have accrued on any of the Obligations);
(b) If the Borrower fails or neglects to perform, keep, or observe in any
material respect any term, provision, condition, covenant, or agreement
contained in any Loan Document,
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other than as specified in any other subsection of this Section 7.1, and such
default continues unremedied for a period of 10 Business Days after receipt of
written notice by the Lender;
(c) If the Borrower fails or neglects to perform, keep, or observe in any
material respect any term, provision, condition, covenant, or agreement
contained in any material agreement between the Borrower and the Lender,
including, without limitation, the UPA, the Marketing and Facilitation
Agreement, the Transition Services Agreement, the Termination Agreement, the
side letter with respect to Seneca Foods Corporation, dated as of the date
hereof, between the Borrower and the Lender, the side letter with respect to
Xxxx Xxxxxx and Specialty Products Company, dated as of the date hereof, between
the Borrower and the Lender, and the Lender's 11 7/8% senior subordinated notes
due 2008 and the bond indenture related thereto, dated November 18, 1998 among
the Lender, certain guarantors named therein and IBJ Xxxxxxxx Bank & Trust
Company, other than as specified in any other subsection of this Section 7.1,
and such default continues unremedied for a period of 10 Business Days after
receipt of written notice by the Lender;
(d) (i) If any bankruptcy, reorganization, receivership, liquidation,
assignment for the benefit of creditors or other insolvency proceeding (each, an
"Insolvency Proceeding") is commenced by the Borrower, or (ii) an Insolvency
Proceeding is commenced against or any order of dissolution is entered against
the Borrower and not dismissed within 60 calendar days;
(e) If any Loan Document shall cease to be valid and enforceable in any
material respect against the Borrower, or the Borrower shall so assert;
(f) If any representation, warranty, certification or statement made by
or on behalf of the Borrower in any Loan Document shall prove to be false or
incorrect or breached in any material respect on the date as of which it is made
or which it is deemed to have been made;
(g) (i) Any material portion of the Borrower's Property is attached,
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed, stayed or bonded within 30 calendar
days; (ii) the Borrower is enjoined, restrained, or prevented by court order
from conducting a material part of its business; (iii) a judgment or other claim
becomes a Lien on a material portion of the Borrower's Property; or (iv) a
notice of Lien, levy, or assessment is filed against any of the Borrower's
Property by any government agency and not paid, stayed or bonded within 30
calendar days after the Borrower receives notice;
(h) Debt for borrowed money of the Borrower in any outstanding principal
amount equal to or in excess of $250,000 shall be declared due and payable or be
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof.
7.2. Remedies. If any Event of Default described in Section 7.1(d) shall
occur, the Commitment and the Loans (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all outstanding
Obligations and all accrued and unpaid interest and all other fees payable shall
automatically be and become immediately due and payable, without notice or
demand. If any other Event of Default shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Lender may, by notice to the
Borrower, declare all or any portion of the outstanding principal amount of the
Obligations and all accrued and
11
unpaid interest and all other fees payable to be due and payable and/or the
Loans and/or the Commitment (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Obligations which shall be so declared
due and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Loans and the
Commitment shall terminate. In addition, upon the occurrence and during the
continuance of any Event of Default, the Lender shall have the right to exercise
any and all remedies available to it at law or in equity as well as any rights
or remedies specified in any the Loan Documents, including without limitation
all rights and remedies of a secured lender under any applicable Uniform
Commercial Code.
7.3. Application of Proceeds. The proceeds of any disposition of any
Collateral obtained pursuant to the Loan Documents and any payments or
distributions required to be applied in mandatory prepayment under Section 2.4
shall be applied as follows:
(a) first, to the payment of any and all expenses and fees (including
reasonable attorneys' fees), if any, incurred by the Lender in foreclosing on
and disposing of the Collateral;
(b) next, any surplus then remaining to the payment of the Obligations
(whether matured or unmatured) in such order as the Lender may determine in its
sole discretion; and
(c) thereafter, if no other Obligations are outstanding, any surplus then
remaining shall be paid to the Borrower or to such other Person legally entitled
to the same; it being understood that the Borrower will remain liable to the
Lender to the extent of any deficiency between the amount of the Obligations and
the aggregate of all amounts realized from Collateral.
7.4. Waiver. The Borrower hereby waives presentment, demand, protest or
any notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement, the Loan Documents or any Collateral the subject
of any Loan Document.
7.5. Power of Attorney. The Borrower irrevocably appoints the Lender as
its lawful attorney to sign the Borrower's name on any documents necessary to
perfect or continue the perfection of any security interest, regardless of
whether an Event of Default has occurred. The Lender's appointment as the
Borrower's attorney in fact, and all of the Lender's rights and powers, coupled
with an interest, are irrevocable until, and shall automatically terminate when,
all Obligations (other than indemnity and other contingent liabilities (other
than guarantees) not then due and payable) have been fully repaid and performed
and the Lender's obligation to provide Loans has terminated.
8. EFFECT OF LENDER'S INABILITY TO ADVANCE FUNDS ON OTHER AGREEMENTS.
The Borrower and the Lender acknowledge and agree that to the extent that
Borrower has a monetary obligation that is due to be paid to Lender pursuant to
the Transition Services Agreement or as contemplated under paragraph 5(b) of the
Marketing and Facilitation Agreement, and due to Lender's inability under the
terms of any Third Party Indebtedness to advance amounts to Borrower under this
facility when otherwise required by the terms hereof to do so Borrower is unable
to make such payment, then for purposes of the Transition Services
12
Agreement and such paragraph 5(b) of the Marketing and Facilitation Agreement,
Borrower shall not be deemed to be in default of such payment obligations for so
long as Lender is unable to make such advances when required by the terms hereof
to do so and to the extent Borrower's inability to make such payment is due
thereto.
9. GENERAL PROVISIONS.
9.1. Notices. All communications provided for hereunder shall be in
writing and delivered by hand or sent by registered or certified mail, postage
prepaid, or reputable overnight courier delivery with written confirmation of
receipt, sent (i) if to the Lender, to:
Agrilink Foods, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With copies to (which will not constitute notice to the Lender):
Vestar Capital Partners
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx and General Counsel
Facsimile: (000) 000-0000
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the Lender may have designated to the Borrower in
writing; and (ii) if to the Borrower, to:
Pro-Fac Cooperative, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxx, Chairman
Facsimile: (000) 000-0000
With a copy to (which will not constitute notice to the Borrower):
Xxxxxx Beach LLP
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
13
or to such other address or addresses as the Borrower may most recently have
designated in writing to the Lender by such notice. All such communications
shall be deemed to have been given or made when so delivered by hand, or four
Business Days after being so mailed or the Business Day following deposit with a
reputable overnight courier service if received by the recipient during business
hours, if not then on the next Business Day.
9.2. Successors and Assigns; Assignments and Participations. This
Agreement shall bind and inure to the benefit of the respective successors and
assigns of each of the parties; provided, however, that neither the Borrower nor
the Lender may assign this Agreement or any rights or duties hereunder without
the prior written consent of the other party hereto (other than any such
assignment by the Lender to any of its affiliates, which assignment may be made
without the consent of the Borrower) and any prohibited assignment shall be
absolutely void.
9.3. Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each paragraph applies equally to this entire Agreement.
9.4. Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender or the
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties (each of which has had the
benefit of advice from legal counsel) and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of all parties hereto.
9.5. Severability of Provisions; Invalidity. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
If any provision of this Agreement is held invalid or unenforceable, either in
its entirety or by virtue of its scope or application to given circumstances,
such provision shall thereupon be deemed modified only to the extent necessary
to render same valid, or not applicable to given circumstances, or excised from
this Agreement, as the situation may require, and this Agreement shall be
construed and enforced as if such provision had been included herein as so
modified in scope or application, or had not been included herein, as the case
may be.
9.6. Amendments and Waivers. No amendment, modification, termination, or
waiver of any provision of the Loan Documents, or any other document or
instrument executed in connection herewith, or consent to any departure by any
party therefrom, shall in any event be effective without the written concurrence
of the relevant parties thereto.
9.7. Fees and Costs. The Borrower also agrees to reimburse the Lender
upon demand for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses) incurred by the Lender in connection with
(x) the negotiation of any restructuring or "work-out", whether or not
consummated, of any Obligations and (y) the enforcement of any Obligations.
9.8. Indemnification. In consideration of the execution and delivery of
this Agreement by the Lender and the Lender's agreement to provide the Loans
hereunder, the Borrower hereby
14
indemnifies, exonerates and holds the Lender and each of its parents, officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified Liabilities"),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the credit facilities
provided for herein; other than any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the gross negligence or
willful misconduct of any Indemnified Party or its parents, officers, managers,
members, directors, employees or agents, or a Person of which such Indemnified
Party is a parent, officer, member, director, employee or agent. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
9.9. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
9.10. Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted, modified, or
qualified by any other agreement, oral or written, whether before or after the
date hereof.
9.11. No Waiver; Remedies Cumulative. The Lender shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Lender and then only to the extent expressly provided therein. A waiver by
the Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Lender would otherwise have
had on any future occasion. No failure to exercise nor any delay in exercising
on the part of the Lender, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by law.
9.12. Survival. All covenants, representations and warranties made in the
Loan Documents shall survive the execution and delivery of this Agreement and
each Loan, and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Lender. The obligations of Borrower
in Section 9.8 to indemnify the Lender will survive until all statutes of
limitations for actions that may be brought against the Lender have run.
9.13. Time of Essence. Time is of the essence for the performance of all
Obligations set forth in the Loan Documents.
15
10. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND ALL OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH
STATE).
16
IN WITNESS WHEREOF, the parties hereto have executed this Credit Agreement as of
the date first set forth above.
The Borrower: PRO-FAC COOPERATIVE, INC.
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
The Lender: AGRILINK FOODS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
EXHIBIT A
FORM OF NOTE
___________, 200_
FOR VALUE RECEIVED, the undersigned, PRO-FAC COOPERATIVE, INC. (the
"Borrower"), hereby promises to pay to the order of AGRILINK FOODS, INC. and its
registered assigns (the "Lender"), at the office specified by the Lender, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to the Credit Agreement dated as of August 19, 2002 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") between the Borrower and the Lender, on the dates and in the
amounts provided in the Credit Agreement. The Borrower further promises to pay
interest on the unpaid principal amount of the Loans evidenced hereby from time
to time at the rates, on the dates, and otherwise as provided in the Credit
Agreement.
The Lender is authorized to endorse the amount and the date on which each
Loan is made and each payment of principal with respect thereto on the schedules
annexed hereto and made a part hereof or on continuations thereof which shall be
attached hereto and made a part hereof; provided that any failure to endorse
such information on such schedule or continuation thereof shall not in any
manner affect any obligation of the Borrower under the Credit Agreement or this
Note.
This Note may only be assigned as provided in the Credit Agreement.
This Note is the Note referred to in, and is entitled to the benefits of,
the Credit Agreement, which contains, among other things, provisions for
acceleration of the maturity hereof upon the happening of certain stated events.
Capitalized terms defined in the Credit Agreement are used herein with
their defined meanings therein unless otherwise defined herein.
THIS NOTE IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
and delivered as of the day and year first above written.
PRO-FAC COOPERATIVE, INC.
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Schedule Attached to Note dated ______________, 200___ of PRO-FAC COOPERATIVE,
INC. payable to the order of AGRILINK FOODS, INC.
Amount of Amount Notation
Date Loan Repaid Made By
---- ---- ------ --------
