First Union National Bank of South Carolina Post Office Box 1329 Greenville, South Carolina 29602 (First Union logo) August 23, 1996 Piemonte Foods, Inc. Piemonte Foods of Indiana, Inc. Origena, Inc. Re: Second Amendment to Loan and Security Agreement dated as of January 4, 1996 (the "Loan Agreement"), by and among First Union National Bank of South Carolina (the "Lender"), Piemonte Foods, Inc. ("Borrower"), Piemonte Foods of Indiana, Inc. ("Piemonte of Indiana") and Origena, Inc. ("Origena"). Dear Sirs: The Loan Agreement shall be amended as follows (with capitalized terms having the same definitions as set forth in the Loan Agreement): (a) Section 4.3(a) Debt Coverage Ratio is hereby deleted and the following is substituted therefor: (a) Debt Coverage Ratio. A Debt Coverage Ratio of not less than the following levels for the periods indicated: (i) 1.0 to 1.0 for each quarter through and including the next to the last day of the quarter ending on November 30, 1996; (ii) 1.05 to 1.0 for each quarter from November 30, 1996 through May 30, 1997; (iii) 1.10 to 1.0 for each quarter from May 31, 1997 through November 29, 1997; (iv) 1.20 to 1.0 for each quarter from November 30, 1997 through May 30, 1998; (v) 1.30 to 1.0 for each quarter from May 31, 1998 through November 29, 1998; (vi) 1.40 to 1.0 for each quarter from November 30, 1998 through May 30, 1999; and Piemonte Foods, Inc. Piemonte Foods of Indiana, Inc. Origena, Inc. August 23, 1996 Page 2 (vii) 1.50 to 1.0 for each quarter thereafter. The measurement to determine Debt Coverage Ratio shall be calculated on a rolling four (4) quarter basis and shall be adjusted to exclude the following one time reductions in earnings: (i) $206,000 for the quarter ending February 28, 1996, and (ii) $344,000 for the quarter ending May 31, 1996. (b) Section 4.3(c) Minimum Net Worth is hereby deleted and the following is substituted therefor: (c) Minimum Net Worth. A Minimum Net Worth of not less than: (i) $6,000,000.00 by the quarter ending on May 31, 1996, and for the six (6) months following; (ii) $6,200,000.00 by the quarter ending on November 30, 1996, and for the six (6) months following; (iii) $6,400,000.00 by the quarter ending May 31, 1997, and for the six (6) months following; (iv) $6,600,000.00 by the quarter ending November 30, 1997, and for the six (6) months following; (v) $6,800,000.00 by the quarter ending May 31, 1998, and for the six (6) months following; (vi) $6,900,000.00 by the quarter ending November 30, 1998, and (vii) $7,000,000.00 by May 31, 1999 and continuing thereafter. For the purpose of this Section, "Minimum Net Worth" shall mean the excess of all assets of Borrower and its subsidiaries over all liabilities of Borrower and its subsidiaries, on a consolidated basis, all determined in accordance with GAAP, provided, however, that the foregoing calculation shall not include Borrower's gains or losses resulting from its participation in the Piemonte/Sabatasso European Project. The foregoing amendments shall become effective upon our receipt of a fully executed acknowledgement of this letter. By executing the acknowledgements indicated below, the parties ratify and confirm all terms and conditions of the Loan Agreement except as amended hereby. By its execution hereof, Lender waives Borrower's non-compliance with Section 4.3(a) of the Loan Agreement for the fiscal year ending May 31, 1996. Piemonte Foods, Inc. Piemonte Foods of Indiana, Inc. Origena, Inc. August 23, 1996 Page 3 We are pleased to be of continuing service to Piemonte Foods. Sincerely, FIRST UNION NATIONAL BANK OF SOUTH CAROLINA (Signature of William A. Litchfield) William A. Litchfield Sr. Vice President Acknowledged and agreed to by: BORROWER: PIEMONTE FOODS, INC. By: s/ Virgil Clark Its: President GUARANTORS: PIEMONTE FOODS OF INDIANA, INC. By: s/ Virgil Clark Its: President ORIGENA, INC. By: s/ Virgil Clark Its: President