AGRILINK FOODS, INC.
SEVENTH 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 Xxxxxxx Endeavors, Incorporated as Guarantors, Xxxxxx Trust and
Savings Bank individually and as Administrative 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 satisfaction of the conditions precedent to effectiveness set
forth below, the Credit Agreement shall be amended in certain respects effective
as of June 30, 2001 (the "Effective Date"), all as hereinafter set forth:
1. AMENDMENTS.
A. Sections 8.11 through 8.14 of the Credit Agreement
shall be amended and restated as so amended to read as follows:
Section 8.11. Leverage Ratio The Parent will as of the last
day of each fiscal quarter (commencing with the second fiscal quarter of fiscal
1999), have a Leverage Ratio of not more than that specified for such fiscal
quarter below:
------------------------------------------------------------------------------
MAXIMUM LEVERAGE
FOR FISCAL QUARTERS : RATIO SHALL BE
------------------------------------------------------------------------------
Second of Fiscal 1999 6.00 to 1
------------------------------------------------------------------------------
Third of Fiscal 1999 5.75 to 1
------------------------------------------------------------------------------
Fourth of Fiscal 1999 5.50 to 1
------------------------------------------------------------------------------
First of Fiscal 2000 6.50 to 1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Second of Fiscal 2000 6.25 to 1
------------------------------------------------------------------------------
Third of Fiscal 2000 6.00 to 1
------------------------------------------------------------------------------
Fourth of Fiscal 2000 5.00 to 1
------------------------------------------------------------------------------
First, Second and Third Quarters of Fiscal 2001 5.15 to 1
------------------------------------------------------------------------------
Fourth of Fiscal 2001 5.35 to 1
------------------------------------------------------------------------------
First and Second of Fiscal 2002 5.90 to 1
------------------------------------------------------------------------------
Third of Fiscal 2002 5.50 to 1
------------------------------------------------------------------------------
Fourth of Fiscal 2002 5.00 to 1
------------------------------------------------------------------------------
All Fiscal Quarters of 2003 4.25 to 1
------------------------------------------------------------------------------
All Fiscal Quarters of 2004 4.00 to 1
------------------------------------------------------------------------------
All Fiscal Quarters Thereafter 3.75 to 1
------------------------------------------------------------------------------
Section 8.12. Fixed Charge Coverage Ratio. The Parent will as of the
last day of each fiscal quarter (commencing with the second fiscal quarter of
fiscal 1999) have a Fixed Charge Coverage Ratio of not less than that specified
for such fiscal quarter below:
---------------------------------------------------------------------------
AS OF THE LAST DAY OF THE FOLLOWING FIXED CHARGE COVERAGE RATIO
FISCAL QUATERS: SHALL NOT BE LESS THAN:
---------------------------------------------------------------------------
Second through Fourth of fiscal 1999 1.05 to 1
---------------------------------------------------------------------------
First through Third of fiscal 2000 0.95 to 1
---------------------------------------------------------------------------
Fourth of Fiscal 2000 1.15 to 1
---------------------------------------------------------------------------
First through Third of Fiscal 2001 1.10 to 1
---------------------------------------------------------------------------
Fourth of Fiscal 2001 1.05 to 1
---------------------------------------------------------------------------
First of Fiscal 2002 0.98 to 1
---------------------------------------------------------------------------
Second of Fiscal 2002 1.00 to 1
---------------------------------------------------------------------------
Third and Fourth of Fiscal 2002 1.10 to 1
---------------------------------------------------------------------------
First and Second of Fiscal 2003 1.20 to 1
---------------------------------------------------------------------------
Third of Fiscal 2003 1.25 to 1
---------------------------------------------------------------------------
Fourth of Fiscal 2003 1.375 to 1
---------------------------------------------------------------------------
All Fiscal Quarters thereafter 1.50 to 1
---------------------------------------------------------------------------
Section 8.13. EBITDA. The Parent will as of the last day of each fiscal
quarter have EBITDA for the period of four fiscal quarters then ended of not
less than that specified for such fiscal quarter below (with EBITDA for periods
prior to the Acquisition Closing Date computed as though DFVC were at all times
a Subsidiary of the Company and as though the Company had not owned its aseptic
business):
---------------------------------------------------------------------------
For fiscal quarters: EBITDA shall not be less than
---------------------------------------------------------------------------
First and second of fiscal 1999 $115,000,000
---------------------------------------------------------------------------
Third of fiscal 1999 $120,000,000
---------------------------------------------------------------------------
Fourth of fiscal 1999 $125,000,000
---------------------------------------------------------------------------
First of fiscal 2000 $108,000,000
---------------------------------------------------------------------------
Second of fiscal 2000 $110,000,000
---------------------------------------------------------------------------
Third of fiscal 2000 $115,000,000
---------------------------------------------------------------------------
Fourth of fiscal 2000 $135,000,000
---------------------------------------------------------------------------
First, Second and Third of fiscal 2001 $130,000,000
---------------------------------------------------------------------------
Fourth of fiscal 2001 $120,000,000
---------------------------------------------------------------------------
First and Second of fiscal 2002 $110,000,000
---------------------------------------------------------------------------
Third of fiscal 2002 $120,000,000
---------------------------------------------------------------------------
Fourth of fiscal 2002 and all fiscal quarters $130,000,000
thereafter
---------------------------------------------------------------------------
Section 8.14. Interest Coverage Ratio. The Parent will as of the last
day of each fiscal quarter (commencing with the second fiscal quarter of fiscal
1999) have an Interest Coverage Ratio of not less than that specified for such
quarter below:
---------------------------------------------------------------------------
Interest Coverage Ratio
For fiscal quarters: shall not be less than
---------------------------------------------------------------------------
Second through fourth of fiscal 1999 1.90 to 1
---------------------------------------------------------------------------
First, Second and Third of fiscal 2000 1.40 to 1
---------------------------------------------------------------------------
Fourth of fiscal 2000 1.75 to 1
---------------------------------------------------------------------------
First, Second and Third of fiscal 2001 1.65 to 1
---------------------------------------------------------------------------
Fourth of fiscal 2001 1.60 to 1
---------------------------------------------------------------------------
First and Second of fiscal 2002 1.55 to 1
---------------------------------------------------------------------------
Third of fiscal 2002 1.80 to 1
---------------------------------------------------------------------------
Fourth of fiscal 2002 2.00 to 1
---------------------------------------------------------------------------
First of fiscal 2003 2.10 to 1
---------------------------------------------------------------------------
Second of fiscal 2003 2.15 to 1
---------------------------------------------------------------------------
Third of fiscal 2003 and all fiscal quarters 2.25 to 1
thereafter
---------------------------------------------------------------------------
B. The definition of the term "Interest Expense" appearing in
Section 1.1 of the Credit Agreement shall be amended by added the
following at the end thereof:
"The term "Interest Expense" shall in any event exclude fees
payable to any of the Lenders as a condition to any amendment,
modification or waiver of any of the provisions of the loan
Documents or which are payable under any amendment to the
Credit Agreement (whenever executed) if the payment of such
fee is subject to a contingency which was uncertain to occur
at the time the amendment which requires the payment of such
fee was executed and delivered."
C. The definition of the term "EBITDA" appearing in Section 1.1
of the Credit Agreement shall be amended by adding the following at
the end thereof:
"In the event that any such non-cash charge is excluded from
the computation of Consolidated Net Income for a given period
pursuant to the immediately preceding sentence but the
circumstances giving rise to such charge has a cash impact in
a subsequent period which would have reduced Consolidated Net
Income but for the charge in the prior period, such impact
shall be taken into account in computing Consolidated Net
Income in the period when such impact occurs."
D. Section 4.5 of the Credit Agreement (dealing with terminations
of the Revolving Credit Commitments) shall be amended by adding the
following sentence at the end thereof:
"The forgoing to the contrary not withstanding, the Company
may irrevocably terminate the Revolving Credit Commitments in
whole concurrently with paying the principal of and interest
on all Revolving Credit Loans and Swing Loans, any amount due
under Section 3.8 hereof in respect of such payment, all
accrued fees and other amounts owing under the Loan Documents
and either terminating all then outstanding Letters of Credit
or making other
arrangements satisfactory to the Issuing Bank with respect to
such outstanding Letters of Credit pursuant to which the
Issuing Bank irrevocably notifies the Revolving Credit Lenders
that they no longer have any liability to it in respect of
such outstanding undrawn Letters of Credit, whether pursuant
to Section 2.1(c)(v) of the Credit Agreement or otherwise."
2. CONTINGENT FEES AND MARGIN ADJUSTMENTS.
(a) Changes in Applicable Margins. If on or before April 1,
2002 the Company has not delivered to the Administrative Agent a signed
commitment letter from a financially responsible party or parties
pursuant to which such party or parties commit to purchase $100,000,000
or more of equity securities of the Company or the Parent subject only
to final (as opposed to initial or preliminary) due diligence and other
terms and conditions customary in commitments for private placements of
equity securities together with a letter from the Company or the Parent
(as applicable) indicating that it is prepared to accept such offer,
each Applicable Margin (other than the Applicable Margin for the
commitment fee) as otherwise computed pursuant to the Credit Agreement
shall increase effective April 1, 2002 by .50% per annum; if such
letters have not been delivered by July 1, 2002 such Applicable Margins
shall increase effective July 1, 2002 by an additional .25% per annum
and if such letters have not been delivered by October 1, 2002 such
Applicable Margins shall increase effective October 1, 2002 by a
further .25% per annum. Any increases in the Applicable Margins
provided by the immediately preceding sentence shall terminate
effective on the earlier of (i) the date letters complying with the
requirements hereof are delivered to the Administrative Agent, (ii) the
date of application by the Parent or the Company of the net proceeds of
the issuance or $100,000,000 or more of equity securities for cash to
the prepayment of the Term Loans, or (iii) five Business Days after
receipt by the Administrative Agent of the audit reports called for by
Section 8.5(b) of the Credit Agreement with respect to the fiscal year
ending June 29, 2002 if, but only if, in the case of this clause (iii)
the Plan Performance Condition (as hereinafter defined) is satisfied.
If any letters complying with the requirements of the first sentence of
this Section 2(a) have been delivered and the commitment or acceptance
contained therein terminates or expires then effective on the date of
such termination or expiration the Applicable Margins shall adjust to
what they would have been had such letters never been delivered (and
shall continue to adjust as provided for above) unless and until new
letters are delivered complying with the requirements of the first
sentence of this Section 2(a). Nothing herein contained shall
constitute a commitment on the part of the Lenders to waive, amend or
modify any provision of the Credit Agreement which would be breached
were an equity transaction consummated but the fact that an amendment,
modification or waiver which under the terms of the Credit Agreement
would be effective upon approval of same by the Required Lenders is
necessary to consummate a transaction shall not mean that the
commitment letter fails to comply with the requirements of the first
sentence of this Section 2(a).
(b) Fees. If the Parent or the Company has not received the
net proceeds of the issuance of $100,000,000 or more of equity
securities for cash and applied such net proceeds to the prepayment of
the Term Loans on or before June 30, 2002 then on October 1, 2002 the
Company shall pay to the Administrative Agent for the ratable account
of the Lenders a fee equal to (i) 1% of the sum of the Revolving Credit
Commitments and the Term Loans outstanding on June 30, 2002 if the Plan
Performance Condition is not satisfied or (ii) one half of 1% of the
sum of the Revolving Credit
Commitments and the Term Loans outstanding on June 30, 2002 if the Plan
Performance Condition has been satisfied. The foregoing provisions of
this Section 2(b) to the contrary notwithstanding, no fee shall be
payable under this Section 2(b) if (i) on or before October 1, 2002 the
Loans are paid in full, the Revolving Credit Commitments are terminated
and all Letters of Credit have terminated or expired or arrangements
have been made with respect thereto satisfactory to the Issuing Bank
and the Issuing Bank has irrevocably notified the Revolving Credit
Lenders that they no longer have any liability to it in respect of such
outstanding undrawn Letters of Credit, whether pursuant to Section
2.1(c)(v) of the Credit Agreement or otherwise or (ii) the requisite
equity issuance transaction has failed to close solely due to the
failure of the Required Lenders to approve a Required Lender amendment,
modification or waiver of the Credit Agreement which was necessary to
accommodate the transaction and which, when taken together with the
benefits to the Lenders of consummating the transaction, would not
impair the credit quality of the Loans. The provisions of this Section
2(b) may be amended, modified or waived but only by an instrument in
writing signed by the Parent, the Company and the Required Lenders,
provided that, anything contained in the Credit Agreement to the
contrary notwithstanding, such an amendment, modification or waiver
shall require the consent of all Lenders if the same would be effective
prior to the closing of the issuance of $100,000,000 or more of equity
securities by the Parent or the Company for cash.
(c) Definitions. The term "Plan Performance Condition" shall
mean that EBITDA for the Parent for the fiscal year ending June 29,
2002 is $140,000,000 or more and the Leverage Ratio computed as of the
last day of the Parent's fiscal year ended June 29, 2002 is equal to or
less than 4.50 to 1. The term "net proceeds" shall mean the gross
purchase price for equity securities less ordinary and customary
investment banking, advisory, legal, accounting and other fees and
expenses incurred in connection with the issuance and sale of the
equity securities in question.
3. CONDITIONS PRECEDENT TO EFFECTIVENESS. Subject to the last sentence
of this Section 2, this Seventh Amendment to Credit Agreement shall become
effective upon (i) receipt by the Administrative Agent of counterparts hereof
which, taken together, bear the signatures of the Borrower, the Guarantors and
the Required Lenders and (ii) receipt by the Administrative Agent of a fee for
each Lender executing this Seventh Amendment to Credit Agreement and returning
it to the Administrative Agent on or before August 31, 2001 (the "Assenting
Lenders") in an amount equal to 1/4 of 1% of the sum of its Revolving Credit
Commitment and the outstanding principal balance of its Term Loans (the
Administrative Agent to promptly distribute such fees to the Assenting Lenders
upon this Seventh Amendment to Credit Agreement becoming effective). Upon
satisfaction of the foregoing conditions, all amendments provided for herein
shall be deemed effective as of the Effective Date irregardless of the date such
conditions were satisfied.
4. MISCELLANEOUS. 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 Seventh 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 Seventh Amendment to Credit Agreement shall constitute a "Loan Document"
for purposes of the Credit Agreement and 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. The headings of the sections hereof are
for convenience of reference only and shall not affect the meaning of the
provisions hereof. This Seventh 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 30th day of June 2001.
AGRILINK FOODS, INC.
By /s/ Xxxx X. Xxxxxx
Its EVP
PRO-FAC COOPERATIVE, INC.
By /s/ Xxxx X. Xxxxxx
Its VP Treasurer
LINDEN OAKS CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
Its President
XXXXXXX ENDEAVORS, INCORPORATED
By /s/ Xxxx X. Xxxxxx
Its VP Secretary
Accepted and agreed to as of the date last above written.
XXXXXX TRUST AND SAVINGS BANK, individually and as
Administrative Agent, Issuing Bank and Swing Lender
By /s/ Xxxxx Xxxxxx
Its Vice President
