SECOND AMENDATORY AGREEMENT
THIS SECOND AMENDATORY AGREEMENT (this "Second Amendatory Agreement") is
entered into on September 23, 1998, by and between ▇▇▇▇ Foods Company, a
Delaware corporation ("▇▇▇▇"), and Agrilink Foods, Inc., a New York corporation
("Agrilink"), with respect to the Stock Purchase Agreement dated July 24, 1998
by and between them and the Asset Transfer Agreement dated July 24, 1998, by and
between them, in each case as previously amended by the Amendatory Agreement
dated September 10, 1998 by and between them (the "Stock Purchase Agreement" and
the "Asset Transfer Agreement", respectively). ▇▇▇▇ and Agrilink are sometimes
referred to herein as a "Party" and collectively as the "Parties".
In consideration of the premises and the mutual agreements herein
contained, the Parties agree as follows:
1. The first sentence of Section 2(b) of the Stock Purchase
Agreement is amended to read as follows:
The consideration referred to in Section 2(a) is (i) $360,000,000
in cash, adjusted as provided in Section 2.2(f)(ii) and increased
by the amount of the purchase price increase (if any) provided
in Section 6(b), (ii) the Aseptic Business of the Buyer, and
(iii) a promissory note of the Buyer in the form of the note
attached to the Second Amendatory Agreement dated September 23,
1998 by and between the Parties as Exhibit A (the "Note")
(collectively, the "Purchase Price").
2. Section 2(e) of the Stock Purchase Agreement is amended to add
the following at the end thereof:
and (vi) the Buyer will deliver to the Seller the Note.
3. The Seller and the Buyer agree that the Buyer withdraws the
election previously delivered to the Seller pursuant to Section
6(b) of the Stock Purchase Agreement and that such Section 6(b)
is amended to read as follows:
(b) Section 338(h)(10) Election. At the option of
the Buyer, and provided written request (accompanied by Buyer's
payment to Seller of cash in an amount equal to the sum of (i)
$13,200,000 plus (ii) an amount sufficient, in the good faith
judgment of Seller, to reimburse Seller on an after-tax basis for
any estimated tax penalty incurred by the Seller as a result of
the deferral of the Section 338(h)(10) Election until a date
subsequent to the Closing) is made of the Seller by the Buyer at
least ninety days prior to July 15, 1999, the Seller will join
with the Buyer in making an election on or before July 15, 1999
under Section 338(h)(10) of the Code (and any corresponding
elections under state or local tax law) (collectively a "Section
338(h)(10) Election") with respect to the purchase and sale of
the capital stock of DFVC and Holding Company hereunder. Any such
request to the Seller shall constitute Buyer's representation and
warranty that it is eligible to make the Section 338(h)(10)
Election. Any amount payable by Buyer pursuant to this Section
6(b) will be treated as additional purchase price, but only if
and when Buyer is required to make payment thereof.
4. Notwithstanding the definitions thereof in Section 1 and 2(f)(i)
of the Stock Purchase Agreement, respectively (a) "Closing Date
Adjusted Net Working Capital" will be determined as of the close
of business on September 23, 1998, and in making such
determination the production variance of the period subsequent to
the close of business on September 21, 1998 shall be twice the
daily average production variance for the week ended September
21, 1998; and (b) "Estimated Closing Date Adjusted Net Working
Capital" will be calculated as of the close of business on
September 21, 1998.
5. Notwithstanding the definitions thereof in Sections 1 and 2(e)(i)
of the Asset Transfer Agreement, respectively (a) "Closing Date
Inventory" will be determined as of the close of business on
September 23, 1998; and (b) "Estimated Closing Date Inventory"
will be calculated as of the close of business on September 21,
1998.
6. Paragraphs 6 of Schedule 3(k) of the Transferor Disclosure
Schedule delivered by Agrilink in connection with the Asset
Transfer Agreement is amended to insert after the words "in
paragraph 2 above" the words "(other than the Bonus trademarks)".
7. In addition to other amounts payable by Agrilink to ▇▇▇▇ at the
Closings under the Stock Purchase Agreement and the Asset
Transfer Agreement, Agrilink will pay to ▇▇▇▇ the following:
(a) $1,249,392.88, an amount equal to the aggregate
of (i) ▇▇▇▇ Foods Vegetable Company's payroll checks deliverable
subsequent to the Closing Date and on or prior to September 25,
1998 assuming there are no personnel taken on at ▇▇▇▇ Foods
Vegetable Company subsequent to the Closing Date and on or prior
to September 30, 1998 and (ii) ▇▇▇▇ Foods Vegetable Company's
federal and Minnesota withholding payments due September 28 and
29, 1998 assuming no ▇▇▇▇ Foods Vegetable Company payroll is paid
subsequent to the Closing Date except as contemplated in (i)
above. (▇▇▇▇ agrees that funds belonging to it (including after
giving effect to 14 below) will be in the ▇▇▇▇ Foods Vegetable
Company account on which such payroll checks are written, as and
when such checks are presented, in amounts sufficient to pay such
checks, and ▇▇▇▇ agrees to make with its own funds such
withholding payments);
(b) $24,080, representing the Michigan state and
county transfer tax payable by Agrilink in connection with its
transfer of its Benton Harbor, Michigan facility pursuant to the
Asset Transfer Agreement, which amount was advanced to Southwest
Metropolitan Title by ▇▇▇▇ on Agrilink's behalf at Agrilink's
request; and
(c) $8,423.50, representing a pro ration as of the
Closing Date of real estate taxes on such facility to become due
and payable for the current period subsequent to the Closing
Date.
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8. Each of the following items is removed from Exhibit C of the
Stock Purchase Agreement:
UVALDE, TEXAS item 2
SPRINGVILLE, WISCONSIN (CAMBRIA) item 2
9. Agrilink shall use its best efforts to cause ▇▇▇▇ to be fully and
forever released, not later than the first anniversary of the
Closing Date under the Stock Purchase Agreement, in a writing
satisfactory to ▇▇▇▇, from all obligations under the Guaranty
Agreement dated March 8, 1991 (the "Cascade Guaranty") with
respect to the obligations of ▇▇▇▇ Foods Vegetable Company under
the Construction and Storage Agreement (the "Cascade Agreement")
dated December 14, 1990 between ▇▇▇▇ Foods Vegetable Company (as
successor to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Inc.) and Cascade Refrigerated
Services, Inc. ("Cascade"), which Cascade Guaranty was assigned
by Cascade to Metropolitan Life Insurance Company.
10. Until payment in full of the Promissory Note dated December 13,
1998 (the "▇▇▇▇▇▇▇ Note") to which the Guaranty dated March, 1992
(the "▇▇▇▇▇▇▇ Guaranty" and, together with the Cascade Guaranty,
the "Guarantees") guaranteeing the obligations of ▇▇▇▇ Foods
Vegetable Company, as successor to Frio Foods, Inc., to ▇▇▇▇
▇▇▇▇▇▇▇ Mutual Life Insurance Company relates and until ▇▇▇▇ is
released from the Cascade Guaranty, Agrilink shall cause ▇▇▇▇
Foods Vegetable Company to timely perform all of its obligations
under the Cascade Agreement and the ▇▇▇▇▇▇▇ Note and Agrilink
further agrees as follows: In the event that ▇▇▇▇ is required to
make payment to Cascade, Metropolitan Life, ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual
Life Insurance Company or any other party as a result of any of
the Guarantees, and provided ▇▇▇▇ gives written notice to
Agrilink of the amount ▇▇▇▇ is required to pay along with any
supporting documentation, Agrilink shall, within 15 days of
receipt of such notice, pay such amounts in immediately available
funds to ▇▇▇▇ or as directed by ▇▇▇▇. In the event that Agrilink
disputes any amounts claimed to be owed under either of the
Guarantees, it shall pay the amounts in dispute into escrow
pending resolution of such dispute.
11. The Parties agree to attempt in good faith subsequent to the
Closing Date to agree upon procedures to deal with the issues
raised by the unsigned letter agreement dated September 18, 1998
attached to this Second Amendatory Agreement as Exhibit B.
12. Exhibit B to the Asset Transfer Agreement is amended to include
the operative provisions of the form of unsigned letter agreement
attached to this Second Amendatory Agreement as Exhibit C.
13. In furtherance of the intent of Section 6(i) of the Stock
Purchase Agreement, the Parties agree to be bound by the
provisions of the form of letter agreement dated September 18,
1998 attached hereto as Exhibit D. The parties further agree to
be bound (and ▇▇▇▇ agrees to cause Amboy of Michigan, L.L.C. to
be bound) by corresponding provisions for purposes of the Asset
Transfer Agreement.
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14. The Parties agree that the following ▇▇▇▇ Foods Vegetable Company
bank accounts (the "Accounts"), and the funds therein at the
Closing Date, are intended to be the property of ▇▇▇▇
notwithstanding the transfer of ▇▇▇▇ Foods Vegetable Company's
stock to Agrilink pursuant to the Stock Purchase Agreement: Bank
of America, ▇▇▇▇▇▇▇▇▇▇; Bank of Montreal, ▇▇▇▇-▇▇▇▇-▇▇▇;
Associated ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, 19395047, 19364188 and 19407511;
▇▇▇▇▇▇ Trust and Savings Bank, 238-4048; and Wachovia,
0454066112. The Parties agree to cause the transfer, effective as
of the Closing Date, of the Accounts and the funds therein at the
Closing Date to ▇▇▇▇ as soon as possible subsequent to the
Closing Date. In the interim, Agrilink shall not cause, or permit
▇▇▇▇ Foods Vegetable Company to cause, the transfer of any of the
funds in any of the Accounts. Nothing in the foregoing shall
preclude the automatic transfer of any such funds pursuant to the
terms of the agreements currently governing the Accounts. ▇▇▇▇
agrees that in the event any of the banks at which the Accounts
are located or any other person or entity has an enforceable
claim specifically satisfiable out of any of such funds (as
opposed to out of the funds of ▇▇▇▇ or ▇▇▇▇ Foods Vegetable
Company in general) for which ▇▇▇▇ Foods Vegetable Company is
liable, and provided Agrilink gives written notice to ▇▇▇▇ of the
amount ▇▇▇▇ Foods Vegetable Company is required to pay along with
any supporting documentation, ▇▇▇▇ will, within 15 days of
receipt of such notice, reimburse ▇▇▇▇ Foods Vegetable Company
for such claim to the extent of such funds. In the event that
▇▇▇▇ disputes any amounts claimed, it shall pay the amounts in
dispute into escrow pending resolution of such dispute.
15. ▇▇▇▇ agrees to cooperate with Agrilink in its attempts to obtain
the required consent of Wiscold, Inc. disclosed in Section (J)(8)
of Schedule 3(b)(xv) of the Seller Disclosure Schedule delivered
by ▇▇▇▇ in connection with the Stock Purchase Agreement, provided
that ▇▇▇▇ shall not be required to make any payment or provide
any other consideration to Wiscold, Inc.
16. For purposes of the Stock Purchase Agreement and the Asset
Transfer Agreement, the Closing Date shall be the close of
business on September 23, 1998.
Except as expressly provided in this Second Amendatory Agreement, the
Stock Purchase Agreement and the Asset Transfer Agreement shall remain unamended
and unwaived and shall remain in full force and effect in accordance with their
respective terms. As used in the Stock Purchase Agreement and the Asset Transfer
Agreement, references to "this Agreement" or the like shall refer to the same as
modified by this Second Amendatory Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Amendatory Agreement
on the date first above written.
▇▇▇▇ FOODS COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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AGRILINK FOODS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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