AGRILINK FOODS, INC.
THIRD AMENDMENT TO CREDIT AGREEMENT
To the Agents and Lenders
Party to the Credit Agreement
referred to below
Gentlemen:
We refer to the Credit Agreement dated as of September 23, 1998 among
Agrilink Foods, Inc. as Borrower, Pro-Fac Cooperative, Inc., Linden Oaks
Corporation and Kennedy Endeavors, Incorporated as Guarantors, Harris Trust and
Savings Bank individually and as Administrative Agent, Bank of Montreal Chicago
Branch individually and as Syndication Agent and the other lenders from time to
time parties thereto as amended and currently in effect between us (the "Credit
Agreement"), capitalized terms used without definition below to have the
meanings ascribed to them in the Credit Agreement.
Upon receipt by the Administrative Agent of counterparts hereof which,
taken together, bear the signatures of the Borrower, the Guarantors and the
Required Lenders, the Credit Agreement shall be amended as follows.
1. Definition of the Term "Subsidiary". The definition of the term
"Subsidiary: appearing in Section 1 of the Credit Agreement shall be amended by
adding the following at the end thereof:
"Anything contained hereinabove or in GAAP to the contrary
notwithstanding, for all purposes of this Agreement and the other Loan
Documents (i) Agripac Sub shall not be or be treated as a Subsidiary
of the Parent (but it shall be deemed an Affiliate thereof and of the
Subsidiaries of the Parent if and so long as it meets the definition
of that term) and (ii) the assets, liabilities and results of
operations of Agripac Sub shall not be consolidated with those of the
Parent for purposes of determining compliance with any covenant
contained in this Agreement."
2. New Definition. Section 1 of the Credit Agreement shall be amended by
adding the following definition thereto in proper alphabetical order:
"Agripac Sub" shall mean a corporation in which the Parent has a
direct equity interest formed for the purpose of acquiring and
operating the frozen food business (and related assets) of Agripac,
Inc. an Oregon cooperative corporation as debtor and debtor in
possession."
3. Section 4.4(b)(i) (Mandatory Prepayments Out of Fixed Asset Proceeds).
The first parenthetical clause appearing in the first sentence of Section
4.4(b)(i) of the Credit Agreement shall be amended and as so amended shall be
restated in its entirety to read as follows:
"(i.e., gross cash proceeds less the sum of (i) out of pocket expenses
and property and transfer taxes incurred in effecting the sale or
other disposition of the fixed or capital assets in question, (ii) the
amount, as reasonably estimated by the seller, of income, capital
gains and similar taxes which it will be required to pay solely as a
result of the sale or other disposition of the fixed or capital assets
in question and (iii) the proceeds applied to the repayment of liens
on the assets sold or disposed of)."
4. Section 4.6(a) (General Provisions on Place and Application of
Payments). Section 4.6(a) of the Credit Agreement shall be amended by adding the
following paragraph at the end thereof:
"If any mandatory prepayment made pursuant to Section 4.4(b) hereof
would require all or any part of a LIBOR Portion to be paid other than on
the last day of the Interest Period then applicable thereto and as a result
thereof the Company could be required to reimburse an affected Lender for a
loss, cost or expense pursuant to Section 3.8(a) hereof then in that event
at the request of the Company the Administrative Agent shall hold the
amount of the prepayment which would otherwise have been applied to the
affected LIBOR Portions and shall remit the same to the Lenders entitled
thereto on the last day of such Interest Period. No such prepayment shall
be deemed applied to the Loans until the date the Lenders entitled thereto
receive the same. All funds held by the Administrative Agent pursuant to
this paragraph shall be and constitute collateral security for the Loans to
which the same is to be applied and may at the request of the Company be
invested in investments of the type described in clauses (a) or (b) of
Section 8.17 hereof, interest bearing accounts of the Administrative Agent
or other high grade investments approved by the Administrative Agent
maturing in each case no later than the last day of the Interest Period
applicable to the affected LIBOR Portions, all such investments to be and
constitute collateral security for the Loans in respect of which the
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deposit was made. Any investment earnings on any such investments shall be
remitted to the Company if and so long as no Event of Default has occurred
and is continuing."
5. Section 8.5 (Financial Reports). Section 8.5 of the Credit Agreement
shall be amended by striking the word "and" at the end of clause (c) thereof,
redesignating clause (d) thereof as clause (e) thereof and by adding the
following as clause (d):
"(d) if and so long as the Parent has any equity interest in Agripac
Sub (i) within 45 days after the close of each quarterly fiscal period
of Agripac Sub a copy of the balance sheet, statement of operations
and statement of cash flow of Agripac Sub for such period prepared in
accordance with GAAP and the notes thereto, all certified (subject to
year end audit adjustments which are not expected to be material) by
the chief financial officer of Agripac Sub and (ii) within 90 days
after the close of each fiscal year of Agripac Sub a copy of the audit
report for such year and accompanying financial statements including a
balance sheet, statement of operations and statement of cash flow for
Agripac Sub prepared in accordance with GAAP and the notes thereto
certified by independent public accountants of recognized standing
selected by Agripac Sub (provided that the year end financial
statements called for by this clause (ii) need only be audited if and
so long as such audits are required by Agripac Sub's lenders); and"
6. Section 8.17 (Acquisitions, Investments, Loans and Advances and
Guaranties). Section 8.17 of the Credit Agreement shall be amended by adding the
following at the end thereof:
"For purposes of this Section 8.17, the acquisition by Agripac Sub of
the frozen vegetable business (and related assets) of Agripac Inc. an
Oregon cooperative corporation as debtor and debtor in possession
shall not be treated as an indirect acquisition thereof by the
Parent."
7. Section 8.18 (Restricted Payments). Section 8.18 of the Credit Agreement
shall be amended by inserting the phrase "Class A" immediately preceding the
phrase "common stock" in subpart (iv) of clause (b) thereof, by striking the
word "and" immediately preceding subpart (v) of clause (b) thereof and by adding
the following at the end thereof:
"(vii) pay dividends or make distributions to the holders of its Class
B common stock in amounts which in no event exceed cash dividends paid
by Agripac Sub to the Parent and (without duplication) cash payments
made by Agripac Sub to the Parent out of its earnings (i.e., revenues
less costs, including the commercial market value of crops purchased
from the Parent) on the sale of products made from crops sold by the
Parent to Agripac Sub and (viii) acquire, redeem or retire its Class B
common stock and any other membership or equity interests issued to
the holders of Class B common stock in their capacities as such solely
in direct or indirect exchange for the transfer of its equity interest
in Agripac Sub to the holders thereof."
8. Section 8.20 (Sales of Assets). Section 8.20 of the Credit Agreement
shall be amended by adding the following at the end thereof:
"The foregoing to the contrary notwithstanding, the Parent may at any
time dispose of its equity interest in Agripac Sub."
9. Exhibit L (the Excluded Assets). Exhibit L to the Credit Agreement shall
be amended by adding the following thereto:
"15. Shares of capital stock of Agripac Sub."
Except as specifically amended hereby, all of the terms, conditions and
provisions of the Credit Agreement shall stand and remain unchanged and in full
force and effect. No reference to this Third Amendment to Credit Agreement need
be made in any instrument or document at any time referring to the Credit
Agreement, a reference to the Credit Agreement in any of such to be deemed to be
a reference to the Credit Agreement as amended hereby. This Third Amendment to
Credit Agreement may be executed in counterparts, and by separate parties hereto
on separate counterparts each to constitute an original but all but one and the
same instrument. This Third Amendment to Credit Agreement shall be governed by
and construed in accordance with the internal laws of the State of Illinois
Dated as of the 16th day of February 1999.
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AGRILINK FOODS, INC.
By /s/ Earl L. Powers
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Its VP
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PRO-FAC COOPERATIVE, INC.
By /s/ Earl L. Powers
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Its VP
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LINDEN OAKS CORPORATION
By /s/ Timothy J. Benjamin
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Its President
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KENNEDY ENDEAVORS, INCORPORATED
By /s/ Earl L. Powers
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Its VP
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Accepted and agreed to as of the date last above written.
HARRIS TRUST AND SAVINGS BANK,
individually and as Administrative Agent,
Issuing Bank and Swing Lender
By /s/ Karen A. Knudsen
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Its Vice President
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BANK OF MONTREAL, individually and as
Syndication Agent
By /s/ Michael W. Hedrick
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Its Director
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