CONFORMED COPY
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A WHO IS
PURCHASING THIS NOTE FOR HIS/HER OR ITS OWN ACCOUNT OR FOR THE ACCOUNTS OF ONE
OR MORE QUALIFIED INSTITUTIONAL BUYERS IN A PRINCIPAL AMOUNT OF NOT LESS THAN
$100,000 FOR ANY SUCH ACCOUNT, OR (B) PURSUANT TO ANOTHER APPLICABLE EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION.
SUBORDINATED PROMISSORY NOTE
September 23, 1998
FOR VALUE RECEIVED, the undersigned, Agrilink Foods, Inc., a Delaware
corporation (the "Company"), promises to pay, but subject nevertheless to all of
the provisions hereof, to the order of Xxxx Foods Company, a Delaware
corporation, at its offices at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx Xxxx, Xxxxxxxx,
or at such other office within the United States of America as the holder hereof
may from time to time in writing appoint, the principal sum of $30,000,000 on
November 22, 2008. However, in the event that the aggregate amount of credit
available under the Bank Credit Agreement is increased above $700,000,000 to
finance directly or indirectly, or in contemplation of the financing of, an
acquisition by the Company of the assets, stock or business of another, then the
Company shall redeem this note if, or as soon as, this note may be redeemed
without breaching the terms of or creating a default under the terms of the
Senior Indebtedness described in clause (ii) of the definition of that term. The
Company promises to pay interest at such office on the balance of principal from
time to time outstanding and unpaid hereon (computed on the basis of a year of
365 or 366 days, as the case may be, and the actual number of days elapsed) (i)
for the period from the date hereof until November 22, 2003 at the rate of five
(5) percent per annum and (ii) for the period from and after November 23, 2003
and until payment in full thereof at the rate of ten (10) percent per annum,
such interest to be due and payable quarterly in arrears on the last day of each
calendar quarter in each year (commencing December 31, 1998) and on the final
maturity date of this note (the "Interest Payment Dates"). Interest accruing on
this note through the period ending November 22, 2003 shall be payable solely
and only through the issuance by the Company to the holder hereof on each
Interest Payment Date of a subordinated promissory note in the amount of the
interest then due and payable, each such subordinated promissory note to be
identical to this note except for the date thereof and the principal amount
thereof. Interest accruing thereafter shall be due and payable in
cash on each Interest Payment Date. Interest shall continue to accrue hereon
notwithstanding the occurrence of any Event of Default (as hereinafter defined).
This note may be prepaid in whole or in part (but if in part, in a
minimum amount of $100,000) at any time without premium or penalty.
This note is subordinate and junior in right of payment to all Senior
Indebtedness of the Company, whether now existing or hereafter arising, on and
subject to the terms and conditions hereinafter set forth.
The term "Senior Indebtedness" shall mean and include all of the
following obligations of the Company, in each instance, whether now existing or
hereafter arising:
(i) all indebtedness, obligations and liabilities of the
Company under or with respect to that certain Credit Agreement dated as
of September 23, 1998 by and among the Company, certain guarantors,
Xxxxxx Trust and Savings Bank as Administrative Agent, Bank of Montreal
as Syndication Agent and the from time to time lenders party thereto,
all as the same may from time to time be amended, modified or restated
(the "Bank Credit Agreement") (including without limitation all
liabilities of the Company with respect to the principal of and
interest (including interest accruing subsequent to the filing of a
petition in bankruptcy or insolvency at the rate specified in the
documents relating to such Senior Indebtedness, whether or not such
interest is no longer permitted to be enforced against the obligor
under applicable law) on all loans made and letters of credit issued
thereunder) and all liabilities of the Company under any credit
facility replacing the credit facility provided for in such Credit
Agreement, provided that the aggregate principal amount of loans and
face amount of letter of credit liabilities constituting Senior
Indebtedness under this clause (i) shall not exceed $700,000,000 at any
one time outstanding; and
(ii) all indebtedness, obligations and liabilities of the
Company arising under or with respect to that certain Senior
Subordinated Credit Agreement dated as of September 23, 1998 by and
among the Company, certain guarantors, Xxxxxxx Xxxxxx Read LLC as
Arranger and Syndication Agent, UBS Ag Stamford Branch as
Administrative Agent and the Lenders from time to time party thereto,
including without limitation all liabilities in respect of the
principal of and interest (including interest accruing subsequent to
the filing of a petition in bankruptcy or insolvency at the rate
specified in the documents relating to such Senior Indebtedness,
whether or not such interest is no longer permitted to be enforced
against the obligor under applicable law) on loans made thereunder and
all indebtedness issued to renew, refund, refinance or replace such
loans or consisting of so called "payment in kind" obligations issued
in payment of
interest thereon, all as the same may from time to time be amended,
modified or restated, provided that the principal amount of loans
constituting Senior Indebtedness under this clause (ii) shall not
exceed $200,000,000 at any one time outstanding plus the amount of any
such "payment in kind" obligations issued in payment of interest on the
foregoing; and
(iii) all obligations of the Company pursuant to interest rate
swap agreements, interest rate cap agreements and other similar
agreements or arrangements designed to protect the Company against
fluctuations in interest rates, each computed net of amounts due the
Company from the same counterparty of contracts of the foregoing types
of a type which are permitted to be netted under the Bankruptcy Code.
In the event of any distribution, division or application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all or
any part of the assets of the Company or the proceeds thereof to the creditors
of the Company or upon any indebtedness of the Company, occurring by reason of
liquidation, dissolution or other winding up of the Company or by reason of
execution sale, receivership, insolvency, bankruptcy, reorganization,
arrangement or other proceedings or the reorganization or readjustment of the
Company or its debts or properties then, and in such event, all Senior
Indebtedness shall be paid and satisfied in full before any payment or
distribution of any kind or character, whether in cash, property or securities,
shall be made on or in respect of the principal of or interest on this note and
in any such event, any such payment, dividend or distribution which shall be
made upon or in respect hereof shall be paid over to the holders of Senior
Indebtedness (but subject to any priorities between them, such that if any
Senior Indebtedness is subordinated in right of payment to any other Senior
Indebtedness, all amounts which shall otherwise be payable to the holder of the
subordinate claim shall instead be paid to the holders of the claims which are
superior thereto) for application on such Senior Indebtedness, until such Senior
Indebtedness has been fully paid and satisfied, and in the event that this note
is declared due and payable prior to its expressed maturity the holder of this
note shall be entitled to the payment of principal and interest only after there
shall first have been paid in full all Senior Indebtedness outstanding at the
time this note so became due and payable or which thereafter arises.
During the continuance of any default in the payment when due (whether
by lapse of time, acceleration or otherwise) in the payment of the principal of,
interest on or any other amount in respect of Senior Indebtedness, or in the
event an event of default occurs with respect to any Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof, then and in
any such event, and until such default in payment or event of default shall have
been cured or waived by the holders of the Senior Indebtedness in question or
shall have ceased to exist, no payment of principal and interest shall be made
hereon and no other payment (whether in respect of the redemption retirement,
purchase or other acquisition of the indebtedness
evidenced by this note) shall be made; provided, however, that (i) the foregoing
shall not prohibit the holder hereof from receiving additional subordinated
notes in payment of interest hereon as and to the extent provided for by the
first paragraph of this note and (ii) the foregoing shall not require the holder
hereof to return any amount paid to it by the Company hereunder if, at the time
of receipt of such payment by the holder, it did not have actual knowledge of
the occurrence of one of the foregoing events prohibiting payment to it. Any
holder of Senior Indebtedness may notify the holder of the occurrence of any
event prohibiting payment hereunder by delivering such notice to the holder by
personal service or by telecopy, with such notice to be given to the holder
hereof at its address as shown herein directed to the attention of Xxxx
Xxxxxxxxx, and if given by telecopy sent to the following number directed to the
attention of Xx. Xxxxxxxxx: (000) 000-0000. The present and any successive
holder of this note may change the address to which such notice may be sent by
written notice to the agent and/or trustee for the holders of the Senior
Indebtedness described in clauses (i) and (ii) hereof and to any other holder of
Senior Indebtedness that has requested the holder in writing to receive such
notices.
Any one or more of the following shall constitute an "Event of Default"
hereunder:
(a) default in the payment of the principal of this note when
due on its scheduled maturity date or default in the payment when due
of interest payable by the Company hereunder and the continuance of
such default in the payment of interest for 30 days after notice
thereof to the Company from the holder hereof;
(b) the failure of the Company to issue a subordinated
promissory note to the holder hereof in payment of interest hereon as
and when required by the first paragraph of this note and the
continuance of such failure for 30 days after notice thereof to the
Company from the holder hereof;
(c) the acceleration of the maturity of any Senior
Indebtedness described in clauses (i) or (ii) of the definition of the
term "Senior Indebtedness" or the acceleration of the maturity of any
other Senior Indebtedness having an aggregate principal amount of
$10,000,000 or more;
(d) the Company becomes insolvent or bankrupt or bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or laws for the
relief of debtors are instituted against the Company and are not
dismissed within 60 days after such institution or a decree or order of
a court having jurisdiction in the premises for the appointment of a
trustee or receiver or custodian for the Company or for the major party
of its property is entered and the trustee or receiver or custodian
appointed pursuant to such decree or order is not discharged within 60
days after such appointment; or
(e) the Company shall institute bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings
for relief under any bankruptcy law or laws for the relief of debtors
or shall consent to the institution of such proceedings against it by
others or to the entry of any decree or order or adjudging it bankrupt
of insolvent or approving as filed any petition seeking reorganization
under any bankruptcy or similar law or shall apply for or shall consent
to the appointment of a receiver or trustee or custodian for the major
part of its property or shall make an assignment for the benefit of
creditors or shall admit in writing its inability to pay its debts as
they mature or shall take any corporate action in contemplation or in
furtherance of any of the foregoing purposes.
Upon the occurrence of and during the continuance of any Event of
Default described in clauses (a)-(c) of the foregoing paragraph, the holder
hereof may, by written notice to the Company, declare the principal of and
interest on this note to be immediately due and payable; provided, however, that
no payment may be made hereon, and the holder may take no steps to enforce or
compel payment hereof, unless and until all Senior Indebtedness has been fully
paid and satisfied. If any Event of Default described in clauses (d) or (e) of
the immediately preceding paragraph occurs, this note shall be and become
immediately due and payable without notice of any kind, but no payment may be
made hereon and no steps may be taken to compel payment hereof unless and until
all Senior Indebtedness has been fully paid and satisfied.
Senior Indebtedness shall not be deemed to have been paid in full
unless the holders thereof shall have received cash or cash equivalents equal to
the amount of such Senior Indebtedness then outstanding. However, if pursuant to
a bankruptcy or insolvency proceeding involving the Company, the holders of
Senior Indebtedness receive securities of the Company as reorganized and the
plan of reorganization provides for the issuance of securities to the holder of
this note, then such holder may receive and retain such securities if the same
are subordinated in right of payment to the prior payment in full of the
securities which the holders of Senior Indebtedness receive to substantially the
same extent as, or to a greater extent than, this note is subordinated to Senior
Indebtedness.
Nothing contained in this note is intended to or shall impair as
between the Company and its creditors, other than the holders of Senior
Indebtedness, the obligations of the Company, which are otherwise absolute and
unconditional, to pay to the holder hereof the principal of and interest on this
note as and when the same becomes due and payable in accordance with its terms
or otherwise affect the relative rights of the holder of this note and creditors
of the Company other than holders of Senior Indebtedness.
The holder of this note by its acceptance thereof agrees that it shall
have no right to offset the obligations of the Company under this note against
any obligation of such holder owing to
the Company and the Company agrees that it shall have no right to offset any
obligation of the holder of this note to the Company against the obligations of
the Company under this note.
The Company promises to pay reasonable attorneys' fees and court costs
of the holder hereof in enforcing payment of this note; provided, however, that
such costs shall be subordinated in right of payment to the prior payment in
full of Senior Indebtedness on the terms hereinabove set forth.
This note shall be construed in accordance with and governed by the
laws of the State of Illinois.
AGRILINK FOODS, INC.
By /s/ Xxxx X. Xxxxxx
Its V.P.
For value received, the undersigned hereby absolutely and
unconditionally guarantees the payment of the within note when due and all
extensions and renewals thereof and all expenses (including reasonable
attorneys' fees and legal expenses) incurred in the collection thereof and
agrees that the holder of said note may from time to time extend or renew said
note for any period and grant any releases, compromises or indulgences with
respect to said note, all without notice to or consent of the undersigned and
without affecting the liability of the undersigned hereunder. The liability of
the undersigned hereunder shall, however, be subject and subordinate in right of
payment to the prior payment in full of all obligations of the undersigned under
any guarantee by it of any Senior Indebtedness to the same extent and with the
same force and effect as this note is subordinated to the prior payment of
Senior Indebtedness.
PRO-FAC COOPERATIVE, INC.
By /s/ Xxxx X. Xxxxxx
Its V.P.
