Sixth Amendment to Credit Agreement by and among Agrilink Foods, Inc., Pro-Fac Cooperative, Inc., Linden Oaks Corporation, Kennedy Endeavors, Inc., and Harris Trust and Savings Bank
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This amendment updates the terms of an existing credit agreement originally dated September 23, 1998, between Agrilink Foods, Inc. as the borrower, several guarantors, and Harris Trust and Savings Bank as the administrative agent, along with other lenders. The amendment, effective September 22, 2000, revises certain definitions and terms, including the calculation of the applicable margin based on leverage ratios. The changes become effective once specified conditions are met, and all other terms of the original agreement remain in effect.
EX-10.1 2 0002.txt SIXTH AMENDMENT TO THE CREDIT AGREEMENT AGRILINK FOODS, INC. SIXTH 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 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 September 22, 2000 (the "Effective Date"), all as hereinafter set forth: 1. AMENDMENTS. A. Certain Definitions. Certain of the definitions appearing in Section 1.1 of the Credit Agreement shall be amended as follows: 1. The definition of the term "Applicable Margin" shall be amended and restated as so amended to read as follows: "Applicable Margin" shall mean the rate per annum specified below for the Leverage Ratio and type of Loan, Portion or fee for which the Applicable Margin is being determined: (a) with respect to the commitment fee, the Letter of Credit fee called for by Section 4.2(a) hereof and each type of Portion of the Revolving Credit Loans and the A Loans described below, the rate per annum shown below for the range of Leverage Ratio specified below: LEVEL 1 LEVEL II LEVEL III LEVEL IV
(b) with respect to the B Loans, the Applicable Margin for LIBOR Portions shall be 4.00% and for the Base Rate Portion shall be 3.00%, provided that effective 5 Business Days after receipt by the Administrative Agent of the financial statements called for by Section 8.5(a) hereof for the first fiscal quarter ending after September 22, 2000 as of the last day of which the Leverage Ratio is less than 4.0 to 1, the Applicable Margins for B Loans shall become 3.75% for LIBOR Portions and 2.75% for the Base Rate Portion; and (c) with respect to the C Loans, the Applicable Margin for LIBOR Portions shall be 4.25% and for the Base Rate Portion shall be 3.25%, provided that effective 5 Business Days after receipt by the Administrative Agent of the financial statement called for by Section 8.5(a) hereof for the first fiscal quarter ending after September 22, 2000 as of the last day of which the Leverage Ratio is less than 4.0 to 1, the Applicable Margins for C Loans shall become 4.00% for LIBOR Portions and 3.00% for the Base Rate Portion; provided, however that the foregoing are subject to the following: (i) the Leverage Ratio shall be determined as of the last day of each fiscal quarter of the Parent, with any adjustment in the Applicable Margins resulting from a change in such Leverage Ratio to be effective 5 Business Days after receipt by the Administrative Agent of the financial statements for such quarter called for by Section 8.5(a); (ii) if and so long as any Event of Default has occurred and is continuing, the Applicable Margins other than the Applicable Margin for the commitment fee as otherwise computed hereunder shall be increased by adding the rate of 2% per annum thereto; and (iii) anything contained hereinabove to the contrary notwithstanding, the Applicable Margins for the period to the effective date of the first adjustment in the Applicable Margins made subsequent to the Effective Date pursuant to clause (i) above shall be those specified above for Level IV. 2. The definition of the term "Consolidated Net Income" shall be amended and restated as so amended to read as follows: "Consolidated Net Income" for any period shall mean the gross revenues from any source of the Parent and its Subsidiaries for such period less all expenses and other proper charges determined for the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP. 3. The definition of the term "Consolidated Net Working Capital" shall be amended and restated as so amended to read as follows: "Consolidated Net Working Capital" shall mean as of any time the same is to be determined, the excess for the Parent and its Subsidiaries on a consolidated basis of current assets (other than cash and investments permitted by clauses (a) through (e), both inclusive, of Section 8.17 hereof) over current liabilities, all as determined and computed in accordance with GAAP. 4. The definition of the term "EBITDA" shall be amended and restated as so amended to read as follows: "EBITDA" shall mean, with reference to any period, Consolidated Net Income for such period plus all amounts deducted in arriving at such Consolidated Net Income in respect of (i) Interest Expense, (ii) taxes imposed on or measured by income or excess profits, and (iii) all charges for depreciation of fixed assets and amortization of intangibles, all determined in accordance with GAAP. Solely for the purpose of computing EBITDA, Consolidated Net Income shall be computed prior to giving effect to gains and losses on the disposition of capital assets, other extraordinary gains and losses (including the write off of debt issuance costs, the payment of premiums on the retirement of Indebtedness and gains resulting from pension reversions) and the effect of one time nonrecurring non cash charges (including asset impairment charges), all as determined in accordance with GAAP. 5. The definition of the term "Fixed Charge Coverage Ratio" shall be amended by adding the phrase "and on the Revolving Credit Loans" immediately prior to the phrase "shall be excluded" in the second parenthetical clause thereof. B. Certain Covenants. 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 5.5 to 1 First of Fiscal 2000 6.5 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 All Fiscal Quarters of Fiscal 2001 5.15 to 1 All Fiscal Quarters of Fiscal 2002 4.75 to 1 All Fiscal Quarters of Fiscal 2003 4.50 to 1 All Fiscal Quarters of Fiscal 2004 4.25 to 1 All Fiscal Quarters Thereafter 4.00 to 1 The foregoing to the contrary notwithstanding, if the Parent has a Leverage Ratio of 3.0 to 1 or less computed as of the last day of two consecutive fiscal quarters ending subsequent to the close of its 1999 fiscal year, then the Parent shall have a Leverage Ratio as of the last day of each fiscal quarter ending thereafter of not less than 3.5 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 FIXED CHARGE COVERAGE FOLLOWING FISCAL QUARTERS : RATIO SHALL NOT BE LESS THAN - -----------------------------------------------------------------------------------------------------------------------
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 - -------------------------------------------------------------------------------- All fiscal quarters of fiscal 2001 $130,000,000 - -------------------------------------------------------------------------------- All fiscal quarters of fiscal 2002 and First, through $135,000,000 Third of fiscal 2003 - -------------------------------------------------------------------------------- Fourth of Fiscal 2003 and First through Third of $140,000,000 Fiscal 2004 - -------------------------------------------------------------------------------- All fiscal quarters ended thereafter $145,000,000 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- all fiscal quarters of fiscal 2001 1.65 to 1 - -------------------------------------------------------------------------------- all fiscal quarters of fiscal 2002 and 2003 1.75 to 1 - -------------------------------------------------------------------------------- all fiscal quarters of fiscal 2004 1.85 to 1 - -------------------------------------------------------------------------------- all fiscal quarters ended thereafter 2.00 to 1 - -------------------------------------------------------------------------------- 2. CONDITIONS PRECEDENT TO EFFECTIVENESS. Subject to the last sentence of this Section 2, this Sixth 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 Sixth Amendment to Credit Agreement and returning it to the Administrative Agent on or before September 21, 2000 (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 Sixth Amendment to Credit Agreement becoming effective). Upon satisfaction of the foregoing conditions, all amendments provided for herein (including the adjustments in the Applicable Margins) shall be deemed effective as of the Effective Date irregardless of the date such conditions were satisfied. 3. SUPPLEMENTAL FEE. If but only if the Leverage Ratio as computed as of the last day of the Parent's first fiscal quarter of fiscal 2002 is greater than 4.50 to 1 the Company shall, within 50 days of the close of such fiscal quarter, pay to the Administrative Agent, for the account of the Assenting Lenders, a fee equal to 1/4 of 1% of the sum of the Revolving Credit Commitments and the outstanding principal balances of the Term Loans of the Assenting Lenders as of the close of such fiscal quarter, the Administrative Agent to promptly distribute such fee to the Assenting Lenders. 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 Sixth 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 Sixth 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 Sixth 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 22nd day of September 2000. AGRILINK FOODS, INC. By /s/David M. Mehalick Its VP and General Counsel PRO-FAC COOPERATIVE, INC. By /s/Earl L. Powers Its Vice President LINDEN OAKS CORPORATION By /s/Timothy J. Benjamin Its President KENNEDY ENDEAVORS, INCORPORATED By /s/Earl L. Powers Its Vice President 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/Diana Carr Its Vice President
