1
EXHIBIT 10(a)
AMENDATORY AGREEMENT
THIS AMENDATORY AGREEMENT (this "Amendatory Agreement") is entered into on
September 10, 1998, by and between Dean Foods Company, a Delaware corporation
("Dean"), and Agrilink Foods, Inc., a New York corporation ("Agrilink"), with
respect to the Stock Purchase Agreement dated July 24, 1998 by and between them
(the "Stock Purchase Agreement") and the Asset Transfer Agreement dated July 24,
1998 by and between them (the "Asset Transfer Agreement"). Dean 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. Each of the following items is removed from Exhibit C to the Stock
Purchase Agreement:
WASECA, MINNESOTA item 1
WATSONVILLE, CALIFORNIA item 5
FAIRWATER, WISCONSIN items 2 and 3
2. The term "Title Insurance Commitments" used in the Stock Purchase
Agreement includes, in addition to the title insurance commitments
identified in Section 3(b)(x)(D) of the Stock Purchase Agreement, each
of the following:
Commitment for Title Insurance dated July 27, 1998 issued by First
American Title Insurance Company related to the Ft. Atkinson,
Wisconsin Owned Premises
Commitment for Title Insurance dated August 10, 1998 issued by First
American Title Insurance Company related to the Cedar Grove, Wisconsin
Owned Premises
Commitment for Title Insurance dated July 13, 1998 issued by First
American Title Insurance Company related to the Brillion, Wisconsin
Owned Premises
3. The two pages attached hereto as Appendix A replace Section (O) and
(P) of Schedule 3(b)(xv) of the Seller Disclosure Schedule delivered
by Dean in connection with the Stock Purchase Agreement.
4. The three pages attached hereto as Appendix B replace Schedule 3(b)
(xxviii) of the Seller Disclosure Schedule delivered by Dean in
connection with the Stock Purchase Agreement.
2
5. Notwithstanding Section 2(d) of the Stock Purchase Agreement, Dean
agrees that Agrilink may delay the Closing under the Stock Purchase
Agreement from September 8, 1998 until as late as September 22, 1998.
Dean certifies to Agrilink that, after giving effect to this
Amendatory Agreement, each of the conditions specified in Section
7(a)(i) through (iv), inclusive, of the Stock Purchase Agreement (in
the case of the condition specified in Section 7(a)(iv), to the
Knowledge of the Seller (as defined in the Stock Purchase Agreement))
is satisfied on September 8, 1998. In return for such agreement and
certification, Agrilink waives each of the conditions to the
obligation of Agrilink to consummate the Closing set forth in Section
7(a) (i) through (vi), inclusive, of the Stock Purchase Agreement and
in Section 7(a)(xii) of the Stock Purchase Agreement except insofar as
such Section relates to Sections 7(a)(vii) through (xi), inclusive, of
the Stock Purchase Agreement.
6. Dean acknowledges that pursuant to the final sentence of Section 3(v)
of the Asset Transfer Agreement, Agrilink has furnished information to
Dean under cover of David M. Mehalick's letter to Brian D. Hogan dated
August 18, 1998. Agrilink acknowledges that pursuant to the final
sentence of Section 3(b)(xxiv) of the Stock Purchase Agreement, Dean
has furnished information to Agrilink under cover of Dale Hecox's
undated letter to David M. Mehalick received by facsimile on August
21, 1998. Agrilink confirms that the post-retirement medical benefit
obligations to current and former salaried employees of Dean Foods
Vegetable Company ("DFVC"), to current and former Wisconsin union and
non-union, hourly employees of DFVC and to union retirees of the Birds
Eye (General Foods) Fulton, New York and Waseca, Minnesota plants
described in such information are obligations of DFVC for which Dean
shall bear no further responsibility subsequent to the Closing under
the Stock Purchase Agreement.
7. Each of the following items is removed from Schedule A to the form of
License Agreement that is Exhibit A to the Asset Transfer Agreement:
MARK REGISTRATION NO.
----- ----------------
Thank You 384,355
Thank You 592,509
Thank You 746,304
Thank You 749,255
Thank You 300,126
8. In the event the third parties that provide Agrilink with financing in
connection with the transactions contemplated by the Stock Purchase
Agreement require that Agrilink merge DFVC into Agrilink promptly
following the Closing under the Stock Purchase Agreement, and provided
Agrilink does not change its name
3
in such merger, Dean waives the obligation of Agrilink in the first
sentence of Section 6(f) of the Stock Purchase Agreement. The second
sentence of Section 6(f) of the Stock Purchase Agreement will continue
to apply notwithstanding such waiver. Any such merger shall be a
matter solely between Agrilink and such third parties, and shall not
be a transaction contemplated by the Stock Purchase Agreement or the
Asset Transfer Agreement for purposes thereof. In the event of any
such merger, references to DFVC in the Stock Purchase Agreement with
regard to any time subsequent to such merger (for example, in Section
6(e) of, and in Exhibit B to, the Stock Purchase Agreement) shall be
deemed references to Agrilink.
9. Item 3 on the first page of Schedule 3(k) of the Transferor Disclosure
Schedule delivered by Agrilink in connection with the Asset Transfer
Agreement is revised to read as follows (with an indication that the
listed foreign trademark applies to the Aseptic Business):
3. Foreign Trademarks (See attached regarding registrations)
BONUS and Design
and the following is added to the referenced attachment:
MARK REG./APPN. NO. GOODS
---- -------------- ------
BONUS Canada canned products: ham and chicken
and Design 104665 sandwich deviled ham sandwich
spread, beef and chicken sandwich
spread, ham and pickle sandwich
spread
10. Item 15 of Schedule 3(n) of the Transferor Disclosure Schedule
delivered by Agrilink in connection with the Asset Transfer Agreement
is revised to add the following: Co-Pack Agreement dated as of June
21, 1995 with Associated Milk Producers, Inc.
11. The Stock Purchase Agreement shall be amended to add the following
Section 6(k) which shall be and read as follows:
(k) Utilization of Lawson Software. Seller agrees to pay or
reimburse Targets for the initial licensing fee of $63,000 payable to
Lawson Associates, Inc. for continued use by Targets of Lawson
Software as described in the letter to Eric Blanchard dated September
9, 1998.
12. Section 2(f)(i) of the Stock Purchase Agreement shall be amended to
replace the number "3" with the number "4".
4
13. Schedule 3(k) of the Transferor Disclosure Schedule delivered by
Agrilink in connection with the Asset Transfer Agreement is further
revised to add the following disclosure:
6. Security Interests.
Immediately prior to the Closing, Transferor will grant a
Security Interest in the trademarks referred to in paragraph 2
above to Harris Trust & Savings Bank, which Security Interest
will be subordinated in all respects to the rights of Transferee
under the License Agreement appearing as Exhibit A to the Asset
Transfer Agreement.
Except as expressly provided in this 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 Amendatory Agreement.
IN WITNESS WHEREOF, the Parties have executed this Amendatory
Agreement on the date first above written.
DEAN FOODS COMPANY
By: /s/ Eric A. Blanchard
------------------------------
Title: VP
-----------------------------
AGRILINK FOODS, INC.
By: /s/ Earl I. Powers
------------------------------
Title: VP
-----------------------------
5
Appendix A
SCHEDULE 3(b)(xv) (CONTINUED)
CONTRACTS
(O) (1) Tolling Agreement dated May 6, 1995 between DFVC and Stilwell
Foods, Inc.
(2) Supply Agreement dated May 6, 1995, between DFVC and Stilwell
Foods, Inc.
(3) Supply and Marketing Agreement dated February 5, 1997 between DFVC
and Triton International.
(4) Processing and Packaging Agreement dated July 22, 1996 between DFVC
and AGRIPAC, Inc. (Copy of agreement has not been provided to
Buyer).
(P) DFVC and BEMSA enter into form growers contracts with growers of raw
vegetables. Copies of the form contracts have previously been
delivered to Buyer.
Miscellaneous Related to the Above
1. Hauling Agreement between Richard A. Shaw Frozen Foods and Trans
Valley Transport, Incorporated covering the period June 1, 1985 to
May 31, 1986, automatic one-year renewal;
2. Contract for Handling Screen House Waste at Waseca, MN with Gerald
Milbrett dated 1/28/98;
3. Contract for Handling Sweet Corn By-Products at Waseca, MN with
George Klug dated 1/29/96;
4. Agreement between Shaw Frozen Foods and Green Crop Harvesting dated
12/13/93;
5. By-Product Contract with Ben Kleczka Trucking dated 3/6/98;
6. Corn Silage Hauling and Stacking Contract with Winthrop Wood
Products dated 2/20/95;
7. Silage Loading Contract with Winthrop Wood Products dated 2/20/95;
8. Harvesting Service Contract with Gustine Harvesting, Inc. dated
4/7/94;
9. Custom Harvesting Agreement with Razorback Farms, Inc. dated
5/28/98;
6
SCHEDULE 3(b)(xv) (CONTINUED)
CONTRACTS
10. Contract with Jeffrey Hahn for the delivery, handling, and disposal
of vegetable processing by-products dated June 1, 1992;
11. Operating Agreement with Catarina Produce L.L.C. dated
11/22/97; and
12. Spraying Agreement with Teryjon Aviation, Inc. dated April 22,
1998.
7
Appendix B
SCHEDULE 3(b)(xxviii)
UNDISCLOSED LIABILITIES
Targets have the obligation to continue to meet their obligations under
contracts and commitments and applicable laws and regulations. See also
Schedules 3(b)(vii) and 3(b)(xxvi).
See also the attached schedule of reserves not reflected in the Financial
Statements.
8
SECOND AMENDATORY AGREEMENT
THIS SECOND AMENDATORY AGREEMENT (this "Second Amendatory Agreement") is
entered into on September 23, 1998, by and between Dean Foods Company, a
Delaware corporation ("Dean"), 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). Dean 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
9
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 Sections 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 for 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. Paragraph 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 all other amounts payable by Agrilink to Dean at the
Closings under the Stock Purchase Agreement and the Asset Transfer Agreement,
Agrilink will pay to Dean the following:
(a) $1,249,392.88, an amount equal to the aggregate of(i) Dean 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 Dean Foods Vegetable Company subsequent to the Closing Date and
on or prior to September 30, 1998 and (ii) Dean Foods Vegetable Company's
federal and Minnesota withholding payments due September 28 and 29, 1998
assuming no Dean Foods Vegetable Company payroll is paid subsequent to the
Closing Date except as contemplated in (i) above. (Dean agrees that funds
belonging to it (including after giving effect to 14 below) will be in the
Dean 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 Dean 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 Dean on Agrilink's behalf
at Agrilink's request; and
2
10
(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.
8. Each of the following items is removed from Exhibit C to the Stock
Purchase Agreement:
UVALDE, TEXAS item 2
SPRINGVILLE, WISCONSIN (CAMBRIA) item 2
9. Agrilink shall use its best efforts to cause Dean 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 Dean, from all
obligations under the Guaranty Agreement dated March 8, 1991 (the "Cascade
Guaranty") with respect to the obligations of Dean Foods Vegetable Company under
the Construction and Storage Agreement (the "Cascade Agreement") dated December
14, 1990 between Dean Foods Vegetable Company (as successor to Richard A. Shaw,
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,
1988 "the Hancock Note") to which the Guaranty dated March, 1992 (the "Hancock
Guaranty" and, together with the Cascade Guaranty, the "Guarantees")
guaranteeing the obligations of Dean Foods Vegetable Company, as successor to
Frio Foods, Inc., to John Hancock Mutual Life Insurance Company relates and
until Dean is released from the Cascade Guaranty, Agrilink shall cause Dean
Foods Vegetable Company to timely perform all of its obligations under the
Cascade Agreement and the Hancock Note and Agrilink further agrees as follows:
In the event that Dean is required to make payment to Cascade, Metropolitan
Life, John Hancock Mutual Life Insurance Company or any other party as a result
of any of the Guarantees, and provided Dean gives written notice to Agrilink of
the amount Dean 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 Dean or as directed by Dean. 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
3
11
attached hereto as Exhibit D. The parties further agree to be bound (and Dean
agrees to cause Amboy of Michigan, L.L.C. to be bound) by corresponding
provisions for purposes of the Asset Transfer Agreement.
14. The Parties agree that the following Dean Foods Vegetable Company bank
accounts (the "Accounts"), and the funds therein at the Closing Date, are
intended to be the property of Dean notwithstanding the transfer of Dean Foods
Vegetable Company's stock to Agrilink pursuant to the Stock Purchase Agreement:
Bank of America, 1491800186; Bank of Montreal, 0004-1526-930; Associated
Kellogg, 1477926, 19395047, 19364188 and 19407511; Harris 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 Dean as soon as possible subsequent to the
Closing Date. In the interim, Agrilink shall not cause, or permit Dean 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
of such funds pursuant to the terms of the agreements currently governing the
Accounts. Dean 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 Dean or
Dean Foods Vegetable Company in general) for which Dean Foods Vegetable Company
is liable, and provided Agrilink gives written notice to Dean of the amount Dean
Foods Vegetable Company is required to pay along with any supporting
documentation, Dean will, within 15 days of receipt of such notice, reimburse
Dean Foods Vegetable Company for such claim to the extent of such funds. In the
event that Dean disputes any amounts claimed, it shall pay the amounts in
dispute into escrow pending resolution of such dispute.
15. Dean 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 Dean in connection with
the Stock Purchase Agreement, provided that Dean 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.
4
12
IN WITNESS WHEREOF, the Parties have executed this Second Amendatory
Agreement on the date first above written.
DEAN FOODS COMPANY
By:
-----------------------------------
Title
------------------------------
AGRILINK FOODS INC.
By:
-----------------------------------
Title
------------------------------
5