EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
between
Seneca Foods Corporation
and
Friday Holdings, L.L.C.
Dated as of _____________, 2003
TABLE OF CONTENTS
Page
1. Background...................................................................1
2. Registration Under Securities Act, etc.......................................1
2.1 Registration on Request.............................................1
2.2 Incidental Registration.............................................3
2.3 Registration Procedures.............................................5
2.4 Underwritten Offerings..............................................8
2.5 Preparation; Reasonable Investigation...............................9
2.6 Limitations, Conditions and Qualifications to Obligations
under Registration Covenants........................................9
2.7 Indemnification.....................................................9
3. Definitions.................................................................12
4. Rule 144....................................................................15
5. Amendments and Waivers......................................................15
6. Nominees for Beneficial Owners..............................................15
7. Notices.....................................................................16
8. Assignment..................................................................16
9. Calculation of Percentage Interests in Registrable Securities...............16
10. No Inconsistent Agreements..................................................16
11. Remedies....................................................................17
12. Severability................................................................17
13. Entire Agreement............................................................17
14. Headings....................................................................17
15. Governing Law...............................................................17
16. Counterparts................................................................17
17. Termination.................................................................17
REGISTRATION RIGHTS AGREEMENT, dated as of _______________, 2003
between Seneca Foods Corporation, a New York corporation (the "Company"), and
Friday Holdings, L.L.C., a Delaware limited liability company ("Friday").
The parties hereby agree as follows:
1. BACKGROUND. The Company and Friday are among the parties to
the Purchase Agreement dated as of March 6, 2003 (the "Purchase Agreement"),
pursuant to which Friday is receiving on the date hereof 967,742 shares of
Convertible Preferred Stock Series 2003 of the Company (the "Shares").
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 Registration on Request.
(a) REQUEST. At any time after January 1, 2004, upon the written
request of one or more holders (the "Initiating Holders") of Registrable
Securities holding at least 25% of the Registrable Securities (assuming the
conversion of the Shares into Class A Common Stock) that the Company effect the
registration under the Securities Act of all or part of such Initiating Holders*
Registrable Securities, the Company promptly will give written notice of such
requested registration to all registered holders of Registrable Securities, and
thereupon the Company will use its best efforts to effect, at the earliest
possible date, the registration under the Securities Act, of
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities which the Company has
been requested to register by the holders thereof (such holders together with
the Initiating Holders hereinafter are referred to as the "Selling Holders") by
written request given to the Company within 30 days after the giving of such
written notice by the Company, all to the extent necessary to permit the
disposition of the Registrable Securities so to be registered.
(b) REGISTRATION OF OTHER SECURITIES. Whenever the Company shall
effect a registration pursuant to this Section 2.1, no securities other than
Registrable Securities shall be included among the securities covered by such
registration unless the Selling Holders of not less than 66-2/3% of all
Registrable Securities (assuming the conversion of the Shares into Class A
Common Stock) to be covered by such registration shall have consented in writing
to the inclusion of such other securities.
(c) REGISTRATION STATEMENT FORM. Registrations under this Section
2.1 shall be on such appropriate registration form of the Commission as shall be
reasonably selected by the Company; provided that, upon the request of the
Selling Holders, the Company shall effect such registration pursuant to Rule 415
under the Securities Act.
(d) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective and
remained effective in compliance with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof set forth in such registration statement (unless
the failure to so dispose of such Registrable Securities shall be caused solely
by reason of a failure on the part of the Selling Holders); provided, that such
period, except with respect to a registration pursuant to Rule 415 under the
Act, need not exceed 135 days, (ii) if, after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason not attributable solely to the Selling Holders, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than solely by reason of a failure on the part of the Selling Holders.
(e) SELECTION OF UNDERWRITERS. The underwriter or underwriters of
each underwritten offering of the Registrable Securities so to be registered
shall be selected by the Selling Holders of more than 50% of the Registrable
Securities (assuming the conversion of the Shares into Class A Common Stock) to
be included in such registration and shall be reasonably acceptable to the
Company.
(f) PRIORITY IN REQUESTED REGISTRATION. If the managing
underwriter of any underwritten offering shall advise the Company (and the
Company shall so advise each Selling Holder of Registrable Securities requesting
registration of such advice) that, in its opinion, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering within a price range acceptable to the Selling Holders of
66-2/3% of the Registrable Securities (assuming the conversion of the Shares
into Class A Common Stock) requested to be included in such registration, the
Company, except as provided in the following sentence, will include in such
registration, to the extent of the number and type which the Company is so
advised can be sold in such offering, first, Registrable Securities requested to
be included in such registration, pro rata (based on the number of Registrable
Securities held by each of the Selling Holders) among the Selling Holders
requesting such registration, second, all securities proposed to be sold by the
Company for its own account, and third, any Third Party Securities requested to
be included in such registration. Notwithstanding the foregoing, if the total
number of Registrable Securities requested to be included in any registration
cannot be included, holders of Registrable Securities requesting registration
thereof pursuant to Section 2.1, representing not less than 50% of the
Registrable Securities (assuming the conversion of the Shares into Class Common
Stock) with respect to which registration has been requested, shall have the
right to withdraw the request for registration of all such Registrable
Securities by giving written notice to the Company within 20 days after receipt
of the notice from the managing underwriter described above by the Company and,
in the event of such withdrawal,
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such request for all Registrable Securities shall not be counted for purposes of
the requests for registration to which holders of Registrable Securities are
entitled pursuant to Section 2.1 hereof.
(g) LIMITATIONS ON REGISTRATION REQUESTS. Notwithstanding
anything in this Section 2.1 to the contrary, in no event will the Company be
required to (i) effect more than two (2) registrations under this Section 2.1,
(ii) effect a registration pursuant to this Section 2.1 within the six-month
period occurring immediately subsequent to the effectiveness (within the meaning
of Section 2.1(d)) of a registration statement filed pursuant to this Section
2.1, unless a majority of the Disinterested Directors determines that effecting
a second registration within the six-month period would not have a material
adverse effect on the market price of the Common Stock, (iii) effect a
registration with respect to any class of Registrable Securities pursuant to
Section 2.1 covering less than forty percent (40%) of the Registrable Securities
(assuming the conversion of the Shares into Class A Common Stock), or (iv) all
Registrable Securities can be sold without restriction (including any
restriction on volume or as to manner of sale) pursuant to Rule 144 under the
Securities Act.
(h) EXPENSES. The Selling Holders will pay all Registration
Expenses in connection with any registrations requested pursuant to this Section
2.1, allocated pro rata (based on the number and type of Registrable Securities
of each of the Selling Holders included in the registration under this Section
2.1) and all other fees and expenses, if any, incident to the Company*s
performance of or compliance with Section 2.1 incurred by the Company (other
than compensation of its employees and other overhead costs); provided, however,
that if a registration is withdrawn under Section 2.6, then the Company will pay
all expenses related to such registration incident to its performance of or
compliance with Section 2.1 (including all Registration Expenses); and provided
further, that if a registration under Section 2.1 includes any securities other
than the Registrable Securities, the Company will pay all expenses related to
such registration incident to its performance of or compliance with this Section
2.1 (including all Registration Expenses other than Fee Expenses) and the
Selling Holders will pay all Fee Expenses allocated pro rata (based on the
number and type of Registrable Securities of each of the Selling Holders
included in the registration under this Section 2.1).
2.2 Incidental Registration.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at
any time proposes to register any of its Common Stock or any other class of
Registrable Securities or other securities convertible into or exchangeable for
shares of its Common Stock or any other class of Registrable Securities under
the Securities Act by registration on any form other than Forms S-4 or S-8 (or
any successor forms), whether or not for sale for its own account, it will each
such time give prompt written notice to all registered holders of Registrable
Securities of its intention to do so and of such holders* rights under this
Section 2.2. Upon the written request of any such holder (a "Requesting Holder")
made as promptly as practicable and in any event within 30 days after the
receipt of any such notice from the Company (which request shall specify the
Registrable Securities intended to he disposed of by such Requesting Holder),
the Company shall use
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its best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Requesting Holders thereof; provided, that prior to the effective date of
the registration statement filed in connection with such registration,
immediately upon notification to the Company from the managing underwriter of
the price at which such securities are to be sold, if such price is below the
price which any Requesting Holder shall have indicated to be acceptable to such
Requesting Holder, the Company shall so advise such Requesting Holder of such
price, and such Requesting Holder shall then have the right to withdraw its
request to have its Registrable Securities included in such registration
statement; provided, further, however, that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to each Requesting Holder of Registrable Securities
and (x) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration, without prejudice, however, to the rights of any holder or holders
of Registrable Securities entitled to do so to cause such registration to be
effected as a registration under Section 2.1, and (y) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
Section 2.1.
(b) PRIORITY IN INCIDENTAL REGISTRATIONS. If the managing
underwriter of any underwritten offering shall inform the Company by letter of
its opinion that the number or type of Registrable Securities and Third Party
Securities requested to be included in such registration would materially
adversely affect such offering, and the Company has so advised the Requesting
Holders in writing, then the Company will include in such registration, to the
extent of the number and type which the Company is so advised can be sold in (or
during the time of) such offering, first, all securities proposed by the Company
to be sold for its own account, second, such Registrable Securities requested to
be included in such registration pursuant to this Agreement, pro rata (based on
the number of Registrable Securities requested to be included therein by each
Selling Holder) among such Selling Holders and third, any Third Party
Securities.
(c) EXPENSES. The Company will pay all fees and expenses incident
to its performance of or compliance with this Section 2.2 (other than Fee
Expenses) and the Requesting Holders will pay all Fee Expenses, allocated pro
rata (based on the number and type of Registrable Securities of each of the
Requesting Holders included in the registration under this Section 2.2);
provided, however, that if any Registrable Securities are withdrawn from a
registration pursuant to Section 2.2(a) or (b), then the Company shall pay all
Fee Expenses related to such Registrable Securities.
(d) PILLSBURY AND MARKS REGISTRATION. Notwithstanding anything
contained herein to the contrary, (i) Friday shall have no rights to participate
in
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any registration of the Company*s securities occurring at the request of The
Pillsbury Company or its successor in interest, General Xxxxx Operations, Inc.
("Pillsbury") pursuant to the terms of the Purchase and Registration Rights
Agreement, dated as of March 15, 1996, as amended, between the Company and
Pillsbury or at the request of any of the parties to the Registration Rights
Agreement dated as of June 22, 1998 among the Company, Xxxx Xxxxx Strategic
Investments, L.P. and several of its affiliates pursuant to the terms of such
Agreement (collectively "Marks), and (ii) Friday's rights under this Section 2.1
shall in all respects be subordinate to the rights of Pillsbury and Marks under
the agreements referred to in the previous clause except as Marks, the Company
and the Holders may otherwise agree.
2.3 REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 2.1 and 2.2, the
Company will, as expeditiously as possible:
(i) prepare and (as promptly as practicable, but in any event
within 60 days after the request for registration is given to the Company) file
with the Commission the requisite registration statement to effect such
registration and thereafter use its best efforts to cause such registration
statement to become effective; provided, however, that the Company may
discontinue any registration of its securities which are not Registrable
Securities (and, under the circumstances specified in Section 2.2(b),
Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective in
accordance with Section 2.1(d)(i) hereof and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement; provided, that except with respect to any such
registration statement filed pursuant to Rule 415 under the Securities Act, such
period need not exceed 135 days, and, for any registration statement filed
pursuant to such Rule 415, such period shall not exceed two years.;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement, such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request;
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(iv) use commercially reasonable efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of such
States of the United States of America where an exemption is not available and
as the sellers of Registrable Securities covered by such registration statement
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect and (z) to
take any other action which may be reasonably necessary or advisable to enable
such sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this subdivision (iv) be obligated to be so qualified or to consent to general
service of process in any such jurisdiction;
(v) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the reasonable opinion of counsel to the Company and counsel
to the seller or sellers of Registrable Securities to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;
(vi) furnish at the effective date of such registration statement
to each seller of Registrable Securities, and each such seller*s underwriters,
if any, a signed counterpart of:
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement and, if
applicable, the date of the closing under the underwriting
agreement, and
(y) a "comfort" letter signed by the independent public
accountants who have certified the Company*s financial
statements included or incorporated by reference in such
registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants* comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer*s
counsel and in accountants* comfort letters delivered to the underwriters in
underwritten public offerings of securities and, in the case of the accountants*
comfort letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as the underwriters may reasonably request;
(vii) notify each seller of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any
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event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances
under which they were made, and at the request of any such seller promptly
prepare and furnish to it a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the Seller of such Registrable Securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(viii) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission and, if requested by
any underwriter for the Holders, make available to its security holders, as soon
as reasonably practicable (but not more than 18 months after the effective date
of such registration statement), an earnings statement covering the period of at
least 12 months beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;
(ix) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration;
(x) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement either (a) to be listed on any
national securities exchange on which Registrable Securities of the same class
covered by such registration statement are then listed or (b) to be approved for
quotation on the NASDAQ National Market or any other over the counter market on
Registrable Securities of the same class covered by any such registration
statement are then quoted, and, if no such Registrable Securities are so listed
or quoted, either (x) on any national securities exchange on which the Common
Stock is then listed or (y) approved for quotation on the NASDAQ National Market
or any other over the counter market on which the Common Stock is then quoted.
(xi) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is required
to be retained in accordance with the rules and regulations of the NASD.
The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Company
(i) such information regarding such seller and the distribution of such
securities as the Company
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may from time to time reasonably request in writing and (ii) if requested by the
Company, an executed custody agreement and power of attorney in form and
substance reasonably satisfactory to the Company with respect to the Registrable
Securities to be registered pursuant to this Agreement.
Each holder of Registrable Securities agrees by acquisition
of such Registrable Securities that, upon receipt of any notice from the Company
of the happening of any event of the kind described in subdivision (vii) of this
Section 2.3, such holder will forthwith discontinue such holder*s disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder*s receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (vii) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company*s expense) all copies, other than permanent file copies, then in
such holder*s possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.
If a registration statement filed pursuant to Section 2.1(c)
hereof is subject to Rule 415 under the Securities Act, the Company shall use
its best efforts to keep the registration statement continuously effective until
the earlier to occur of (i) the time at which the Holders no longer own,
beneficially or otherwise, any Registrable Securities or (ii) the second
anniversary of the effective date of the registration statement (the
"Registration Period"). The Company shall amend the registration statement if
and as required by the rules, regulations or instructions applicable to the
registration form used by the Company for the registration statement or by the
Securities Act or any rules or regulations promulgated thereunder.
2.4 Underwritten Offerings.
(a) REQUESTED UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under Section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be in customary form and reasonably satisfactory in substance and
form to each such holder, the underwriters and the Company. The holders of the
Registrable Securities proposed to be sold by such underwriters will reasonably
cooperate with the Company in the negotiation of the underwriting agreement. No
holder of Registrable Securities shall be required to make any representations
or warranties to or agreements with the Company other than representations,
warranties or agreements regarding such holder, such holder*s Registrable
Securities and such holder*s intended method of distribution or any other
representations required by applicable law.
(b) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company proposes to
register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any Requesting Holder of
Registrable Securities, use its best efforts to arrange for such underwriters to
include all the
8
Registrable Securities to be offered and sold by such Requesting Holder among
the securities of the Company to be distributed by such underwriters, subject to
the provisions of Section 2.2(b). Any such Requesting Holder of Registrable
Securities shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Requesting Holder, such Requesting
Holder*s Registrable Securities and such Requesting Holders s intended method of
distribution or any other representations required by applicable law.
2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities to be registered under such registration statement, their
underwriters, if any, and their respective counsel the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such reasonable access to its
books and records and such opportunities to discuss the business of the Company
with its officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of such holders* and
such underwriters* respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
2.6 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS. The Company shall be entitled to postpone for a
reasonable period of time (but not exceeding 90 days) the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 if the Company determines, in its reasonable judgment,
that such registration and offering would interfere with any financing,
acquisition, corporate reorganization or other material transaction involving
the Company and promptly gives the holders of Registrable Securities requesting
registration thereof pursuant to Section 2.1 written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a registration statement, holders of Registrable
Securities requesting registration thereof pursuant to Section 2.1, representing
not less than 50% of the Registrable Securities (assuming the conversion of the
Shares into Class A Common Stock) with respect to which registration has been
requested, shall have the right to withdraw the request for registration by
giving written notice to the Company within 30 days after receipt of the notice
of postponement and, in the event of such withdrawal, such request shall not be
counted for purposes of the requests for registration to which holders of
Registrable Securities are entitled pursuant to Section 2.1 hereof.
2.7 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company will, and hereby
does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to Section 2.1 or 2.2, each seller of any Registrable Securities
covered by such registration statement and each other Person who participates as
an underwriter in the
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offering or sale of such securities and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act or
the Exchange Act, and their respective directors, officers, partners, agents and
affiliates, against any losses, claims, damages or liabilities, joint or
several, to which such seller or underwriter or any such director, officer,
partner, agent, affiliate or controlling person may become subject under the
Securities Act or otherwise, including, without limitation, the reasonable fees
and expenses of legal counsel, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such seller or underwriter and each such director, officer, partner,
agent, affiliate and controlling Person for any reasonable legal or any other
expenses incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such seller or underwriter, as the case may
be, specifically stating that it is for use in the preparation thereof;
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement of any material
fact contained in any such registration statement, preliminary prospectus, final
prospectus or summary prospectus contained therein or any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading in a prospectus or prospectus supplement, if such untrue statement or
omission is completely corrected in an amendment or supplement to such
prospectus or prospectus supplement, the seller of the Registrable Securities
has an obligation under the Securities Act to deliver a prospectus or prospectus
supplement in connection with such sale of Registrable Securities and the seller
of Registrable Securities thereafter fails to deliver such prospectus or
prospectus supplement as so amended or supplemented prior to or concurrently
with the sale of Registrable Securities to the person asserting such loss,
claim, damage or liability after the Company has furnished such seller with a
sufficient number of copies of the same. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
seller or underwriter or any such director, officer, partner, agent, affiliate
or controlling person and shall survive the transfer of such securities by such
seller or underwriter.
(b) INDEMNIFICATION BY THE SELLERS. As a condition to including
any Registrable Securities in any registration statement, the Company shall have
received an
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undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section 2.7(a)) the Company, and each
director of the Company, each officer of the Company and each other Person, if
any, who participates as an underwriter in the offering or sale of such
securities and each other Person who controls the Company or any such
underwriter within the meaning of the Securities Act or the Exchange Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such seller specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, that
the liability of such indemnifying party under this Section 2.7(b) shall be
limited to the amount of proceeds received by such indemnifying party in the
offering giving rise to such liability. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.7(a) or (b), such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.7, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure to give
notice. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that any indemnified
party may, at its own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action or proceeding in which
both the Company and an indemnified party is, or is reasonably likely to become,
a party, such indemnified party shall have the right to employ separate counsel
at the Company*s expense and to control its own defense of such action or
proceeding if, in the opinion of counsel to such indemnified party, (a) there
are or may be legal defenses available to such indemnified party or to other
indemnified parties that are different from or additional to those available to
the Company or (b) any conflict or potential conflict exists between the Company
and such indemnified party that would make such separate representation
advisable; provided, however, that in no event shall the Company be required to
pay fees and expenses under this Section 2.7 for more than one firm of attorneys
representing the indemnified parties (together, if appropriate, with one firm of
local counsel per jurisdiction) in any one legal action or group of related
legal actions. No indemnifying party shall be liable for any settlement of any
action or proceeding effected
11
without its written consent, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested the indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by this Section 2.7, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without the indemnifying party*s written consent if (i) such
settlement is entered into more than thirty (30) days after receipt by the
indemnifying party of the aforesaid request, and (ii) the indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
consent of the indemnified party, which consent shall not be unreasonably
withheld, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation or which requires action other than the payment of
money by the indemnifying party.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 2.7 shall for any reason be held by a court to be unavailable to an
indemnified party under Section 2.7(a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under Section 2.7(a) or (b), the indemnified party
and the indemnifying party under Section 2.7(a) or (b) shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as is appropriate to reflect the relative fault of the Company
and the sellers or prospective sellers of Registrable Securities covered by the
registration statement which resulted in such loss, claim, damage or liability,
or action or proceeding in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and such sellers or
prospective sellers from the offering of the securities covered by such
registration statement, provided, that for purposes of this Section 2.7(d), the
amounts required to be contributed by the sellers or prospective sellers of
Registrable Securities shall not exceed the amount of proceeds received by such
sellers or prospective sellers. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Such sellers or prospective sellers* obligations to
contribute as provided in this Section 2.7(d) are several in proportion to the
relative value of their respective Registrable Securities covered by such
registration statement and not joint.
(e) INDEMNIFICATION PAYMENTS. The indemnification and
contribution required by this Section 2.7 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred.
12
3. DEFINITIONS. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Class A Common Stock" means the Company's Class A common stock, par
value $0.25 per share.
"Common Stock" shall mean and include: (i) the Class A common stock,
par value $.25 per share, of the Company, (ii) the Class B common stock, par
value $.25 per share, of the Company, and (iii) each other class of capital
stock of the Company that does not have a preference over any other class of
capital stock of the Company as to dividends or upon liquidation, dissolution or
winding up of the Company and, in each case, shall include any other class of
capital stock of the Company into which such stock is reclassified or
reconstituted.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the board of directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934, as amended, shall
include a reference to the comparable section, if any, of any such superseding
Federal statute.
"Fee Expenses" means, with respect to any Registrable Securities
included in a registration, all registration and filing fees with the
Commission, all filing fees of the New York Stock Exchange, Inc., other national
securities exchanges or the National Association of Securities Dealers, Inc.,
and all filing fees to comply with securities or blue sky laws which relate
solely to such Registrable Securities.
"Initiating Holder" is defined in Section 2.1.
"NASD" means National Association of Securities Dealers, Inc.
"Person" means any individual, firm, corporation, partnership, limited
liability company or partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind and shall include any
successor (by merger or otherwise) of such entity.
13
"Pillsbury" is defined in Section 2.2(d).
"Purchase Agreement" is defined in Section 1.
"Registrable Securities" means (i) any Shares, (ii) any shares of
Common Stock issued upon conversion of the Shares, (iii) any other shares of
Common Stock or Voting Securities beneficially owned by Friday or any of its
Affiliates (whether owned on the date hereof or hereafter acquired) and (iv) any
securities of the Company issued or issuable with respect to any of the
securities described in clauses (i), (ii) or (iii) by way of a dividend or stock
split or in connection with a combination of shares, recapitalization,
reclassification, merger, consolidation, reconstitution or other reorganization
or otherwise. As to any particular Registrable Securities, once issued, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) they shall have been sold
as permitted by Rule 144 (or any successor provision) under the Securities Act,
(c) they shall have been otherwise transferred, new certificates for them not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent public distribution of them shall not require
registration of such distribution under the Securities Act or (d) they shall
have ceased to be outstanding. All references to percentages of Registrable
Securities shall be calculated pursuant to Section 9.
"Registration Expenses" means with respect to any registration under
Section 2, all Fee Expenses with respect to Registrable Securities included in
such registration, all reasonable printing, messenger and delivery expenses
incurred in such registration, the reasonable fees and disbursements of counsel
for the Company and of its independent public accountants incurred in such
registration, including the reasonable expenses of "comfort" letters required by
or incident to such performance and compliance, any reasonable fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (excluding any underwriting discounts or commissions with respect to
the Registrable Securities) and the reasonable fees and expenses of one counsel
to the Selling Holders incurred in such registration (selected by Selling
Holders representing at least 50% of the Registrable Securities covered by such
registration)
"Requesting Holder" is defined in Section 2.2.
"Securities Act" means the Securities Act of 1933, as amended, or any
superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such superseding Federal
statute.
"Selling Holder" is defined in Section 2.1.
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"Shares" is defined in Section 1.
"Third Party Securities" means any securities included in a
registration statement requested under Section 2.1 or 2.2, other than (i)
Registrable Securities, and (ii) securities to be sold by the Company for its
own account.
"Voting Securities" means any securities of the Company entitled to
vote generally in the election of directors, or securities convertible into or
exercisable or exchangeable for such securities.
4. RULE 144. The Company shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such securities
without registration under the Securities Act within the limitation of the
provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rules or regulations hereafter adopted by
the Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
5. AMENDMENTS AND WAIVERS. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of at least 66-2/3% of the Registrable
Securities affected by such amendment, action or omission to act. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
Securities shall have been marked to indicate such consent. If the Securities
Act is amended or new regulations are adopted thereunder, to permit company
registration such that the Company would not be able to grant the holders of
Registrable Securities the right to register and resell their Registrable
Securities in the manner contemplated under this Agreement on the date of its
execution, then the parties hereto agree to negotiate in good faith to amend
this Agreement to grant such holders of Registrable Securities substantially
equivalent rights to those that were provided on the date of this Agreement.
6. NOMINEES FOR BENEFICIAL OWNERS. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner*s beneficial ownership of such Registrable
Securities.
15
7. NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first--class mail, return receipt requested, telecopier,
courier service or personal delivery:
(a) if to Friday, addressed to it in the manner set forth in the
Purchase Agreement, or at such other address as it shall have furnished to the
Company in writing in the manner set forth herein;
(b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing in the
manner set forth herein, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company; or
(c) if to the Company, addressed to it in the manner set forth in
the Purchase Agreement, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding in
the manner set forth herein.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by a
courier, if delivered by overnight courier service; three business days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
8. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, with respect to the
Company, its respective successors and permitted assigns and, with respect to
Friday, any subsequent holder of any Registrable Securities, subject to the
provisions respecting the minimum amount of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
9. CALCULATION OF PERCENTAGE INTERESTS IN REGISTRABLE SECURITIES. For
purposes of this Agreement, all references to a percentage of the Registrable
Securities shall be calculated based upon the number of Registrable Securities
outstanding at the time such calculation is made. If there is more than one
class of Registrable Securities, then each reference to a percentage of the
Registrable Securities shall mean a percentage of each class of the Registrable
Securities.
10. NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement.
Without limiting the generality of the foregoing, the Company will not hereafter
enter into any agreement with respect to its securities which grants, or modify
any existing agreement with respect to its securities to grant, to the holder of
its securities in connection with an incidental registration of such securities
equal or higher priority to the rights granted to Friday under Section 2.
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11. REMEDIES. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement without being required to post bond. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
12. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of Friday shall
be enforceable to the fullest extent permitted by law.
13. ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement (including the exhibits and schedules thereto), is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement and the Purchase Agreement
(including the exhibits and schedules thereto) supersede all prior agreements
and understandings between the parties with respect to such subject matter.
14. HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
15. GOVERNING LAW. This Agreement has been negotiated, executed and
delivered in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed an original and all of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
SENECA FOODS CORPORATION
By:
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Name:
--------------------------
Title:
-------------------------
17
FRIDAY HOLDINGS, L.L.C.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
18
