Exhibit 10.33

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT

 

AMENDMENT NO. 1 TO CREDIT AGREEMENT dated as of September 17, 2004 (this
“Amendment”) among MICHAEL FOODS, INC., a Delaware corporation (formerly, THL
Food Products Co., the “Borrower”), M-FOODS HOLDINGS, INC., a Delaware
corporation (formerly, THL Food Products Holding Co., “Holdings”), the banks,
financial institutions and other institutional lenders parties to the Credit
Agreement referred to below (collectively, the “Lenders”) and Bank of America,
N.A., as administrative agent (the “Administrative Agent”) for the Lenders.

 

PRELIMINARY STATEMENTS:

 

(1) Holdings, the Borrower, the Lenders and the Administrative Agent have
entered into a Credit Agreement dated as of November 20, 2003 (the “Credit
Agreement”). Capitalized terms not otherwise defined in this Amendment have the
same meanings as specified in the Credit Agreement;

 

(2) The Borrower desires to refinance, substitute and replace and convert all
outstanding Term Loans under the Credit Agreement (the “Existing Term Loans”)
with and into a new class of term loans (as further described in the amendments
set forth in Section 1 below, the “Term B Loans”) having substantially identical
terms with, and having the same rights and obligations under the Loan Documents
as, the Existing Term Loans, except as provided in the amendments set forth in
Section 1 below; it being understood that Banc of America Securities LLC as sole
and exclusive lead arranger and bookrunning manager of the Term B Loans (in such
capacity, the “Arranger”) and the Administrative Agent shall arrange and
allocate any assignments to effectuate such refinancing, substitution and
replacement and conversion and the Administrative Agent or any of its Affiliates
may (but shall not be required to), in order to better effectuate such
assignments, acquire Existing Term Loans itself for further assignment to other
Lenders or Eligible Assignees;

 

(3) The Borrower has requested that each Term Lender holding Existing Term Loans
(each, an “Existing Term Lender”) make commitments to provide Term B Loans (any
Term Lender that executes and delivers this Amendment and makes such a
commitment, a “Continuing Term Lender”; and, any Term Lender that does not
execute and deliver this Amendment or make such a commitment, an “Exiting Term
Lender”) in an amount equal to the aggregate principal amount of the Existing
Term Loans held by it immediately prior to the First Amendment Effective Date
(as defined below) and that Eligible Assignees make commitments to provide Term
B Loans (such Eligible Assignees, “Additional Term B Lenders”, and together with
the Continuing Term Lenders, the “Term B Lenders”) to the extent that any
Existing Term

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Lender does not become a Continuing Term Lender, and the commitment of each such
Lender to provide Term B Loans shall be set forth on Schedule 2.01 attached
hereto (as further described in the amendments set forth in Section 1 below, its
“Term B Commitment”);

 

(4) Upon the occurrence of the First Amendment Effective Date, each Continuing
Term Lender will exchange and convert an aggregate principal amount of the
Existing Term Loans held by it immediately prior to the First Amendment
Effective Date (the “Exchanged Term Loans”) for and into a like principal amount
in Dollars of Term B Loans (such portion of the Term B Loans, the “Converted
Term B Loans”); it being understood and agreed that the Converted Term B Loans
are in exchange, substitution and replacement for, but not in payment or
satisfaction of, the Exchanged Term Loans;

 

(5) In addition, each Term B Lender severally agrees to make Term B Loans to the
Borrower on the First Amendment Effective Date to the extent its Term B
Commitment exceeds the aggregate amount of its Converted Term B Loans (if any)
and any Existing Term Loans assigned (or to be assigned concurrently therewith)
to it from any Exiting Term Lender, in an aggregate principal amount equal to
such excess and the proceeds of such Term B Loans (such portion of the Term B
Loans, the “Funded Term B Loans”) will be used by the Borrower to refinance in
full the outstanding principal amount of all Existing Term Loans held by any
Exiting Term Lender that failed to assign all of its Existing Term Loans to Term
B Lenders pursuant to one or more Assignment and Assumption;

 

(6) The Interest Periods applicable to the Exchanged Term Loans immediately
prior to the First Amendment Effective Date shall continue to apply to the
Converted Term B Loans, but (a) no accrued but unpaid interest on the Exchanged
Term Loans shall be payable on the First Amendment Effective Date and no amounts
under Section 3.05 of the Credit Agreement in connection with such exchange and
conversion shall be payable, and (b) all accrued but unpaid interest in respect
of the Exchanged Term Loans to the First Amendment Effective Date shall be
payable on the Interest Payment Date on which such interest would otherwise have
been payable;

 

(7) If, and to the extent that, any Funded Term B Loans are made on the First
Amendment Effective Date, the Type, any applicable Interest Periods and the
amount of each Type applicable to the Existing Term Loans refinanced with the
proceeds of Funded Term B Loans immediately prior to the First Amendment
Effective Date shall continue to apply on a ratable basis to the Funded Term B
Loans as set forth in this Amendment;

 

(8) Holdings and the Borrower have requested that the Lenders permit Holdings to
(a) issue the senior discount notes due nine (9) years after the date thereof
(the “Holdco Notes Offering”) pursuant to an Indenture between Holdings and
Wells Fargo Bank Minnesota, National Association, and (b) make cash dividend
payments to Investors LLC with the net proceeds from the issuance of Permitted
Holdco Debt;

 

(9) The Borrower has requested that the Lenders amend the Credit Agreement to
(a) effect the exchange, conversion, refinancing, substitution and replacement
of the Existing Term Loans and (b) make other amendments to the Credit Agreement
as set forth below;

 

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(10) The Lenders have agreed, subject to the terms and conditions hereinafter
set forth, to amend the Credit Agreement as set forth below;

 

(11) NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the sufficiency and receipt of all of which is hereby
acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1. Amendments to Credit Agreement. Upon, and subject to, the
satisfaction of the conditions precedent set forth in Section 3 below, the
Credit Agreement is hereby amended as follows:

 

(a) Section 1.01 of the Credit Agreement is amended by adding in the appropriate
alphabetical order the following new definitions.

 

“Exchanged Term Loans” has the meaning specified in Section 2.01(a)(ii).

 

“Existing Term Borrowing” means the borrowing of the Existing Term Loans on the
Closing Date.

 

“Existing Term Facility” means, at any time, the aggregate Existing Term Loans
of all Existing Term Lenders

 

“Existing Term Lender” has the meaning specified in the Preliminary Statements
of the First Amendment.

 

“Existing Term Loan” has the meaning specified in the Preliminary Statements of
the First Amendment.

 

“Existing Term Note” means a promissory note of the Borrower payable to any
Existing Term Lender or its registered assigns, in substantially the form of
Exhibit C-1 hereto, evidencing the aggregate indebtedness of the Borrower to
such Existing Term Lender resulting from the Existing Term Loans made by such
Existing Term Lender.

 

“First Amendment” means Amendment No. 1 to this Agreement, dated as of September
17, 2004, among the Borrower, Holdings, Bank of America, N.A., as Administrative
Agent and the Lenders party thereto.

 

“First Amendment Effective Date” has the meaning specified in the First
Amendment.

 

“Repricing Transaction” means the incurrence by any Loan Party of any
Indebtedness (including, without limitation, any new or additional term loans
under this Agreement) that is secured or is broadly marketed or syndicated to
banks and other institutional investors in financings similar to the Facilities
or the Senior Unsecured Term Loans (i) having an effective interest rate margin
or weighted average yield (to be determined by the Administrative Agent
consistent with generally accepted financial practice, after giving effect to,
among other factors, margins, upfront or similar fees or original issue discount
shared with all lenders or holders thereof, but excluding the effect

 

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of any arrangement, structuring, syndication or other fees payable in connection
therewith that are not shared with all lenders or holders thereof) that is less
than the Applicable Rate for, or weighted average yield (to be determined by the
Administrative Agent on the same basis) of, the Term B Loans, and (ii) the
proceeds of which are used to repay, in whole or in part, principal of
outstanding Term B Loans.

 

“Term B Borrowing” means a borrowing pursuant to Section 2.01(a)(ii) or (iii)
consisting of simultaneous Term B Loans of the same Type made by the Term B
Lenders.

 

“Term B Commitment” means, as to each Term B Lender at any time, its obligation
to exchange and convert Existing Term Loans for and into Term B Loans and to
make Term B Loans on the First Amendment Effective Date to the Borrower pursuant
to Section 2.01(a)(ii) or (iii), as applicable, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such
Term B Lender’s name on Schedule 2.01 attached to the First Amendment under the
caption “Total Term B Commitment” or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement. The aggregate
Commitment of all Term B Lenders shall be $491,287,500 on the First Amendment
Effective Date.

 

“Term B Facility” means, at any time, (a) prior to initial making of Term B
Loans, the aggregate Term B Commitments of all Term B Lenders at such time, and
(b) thereafter, the aggregate Term B Loans of all Term B Lenders at such time.

 

“Term B Lender” means, at any time, any Lender that has a Term B Commitment or a
Term B Loan at such time.

 

“Term B Loan” means (a) a term loan or term loans in Dollars received in
exchange for Existing Term Loans pursuant to Section 2.01(a)(ii) or (b) an
advance made by any Term B Lender under the Term B Facility made pursuant to
Section 2.01(a)(iii).

 

“Term B Note” means a promissory note of the Borrower payable to the order of
any Term B Lender, in substantially the form of Exhibit A to the First
Amendment, evidencing the indebtedness of the Borrower to such Term B Lender
resulting from the Term B Loans made or held by such Term B Lender.

 

(b) Section 1.01 of the Credit Agreement is further amended as follows:

 

(i) By amending and restating in full clause (a) in the definition of
“Applicable Rate” to read as follows:

 

“(a) with respect to Term B Loans, (i) for Eurodollar Rate Loans, 2.25% and (ii)
for Base Rate Loans, 1.25%; and”.

 

(ii) By amending clause (b) of the definition of “Change of Control” to add “,
Permitted Holdco Debt” immediately after “Senior Unsecured Term Notes” in the
second line of such clause (b).

 

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(iii) By amending and restating in full clauses (b)(v) and (vi) of the
definition of “Excess Cash Flow” to read as follows:

 

“(v) Restricted Payments made by the Borrower Parties to the extent that such
Restricted Payments are (A) permitted to be made under Section 7.06(f), (B) the
first $70,000,000 made in accordance with Section 7.06(g) after the First
Amendment Effective Date, or (C) otherwise permitted to be made under Section
7.06(g) after the Restricted Payments contemplated under clause (B) solely to
the extent made, directly or indirectly, with the proceeds from events or
circumstances that would have been included in the calculation of Excess Cash
Flow,

 

(vi) the aggregate amount of permanent principal payments or repurchases of
Indebtedness for borrowed money of the Borrower Parties (including the
Obligations); provided, that (A) such prepayments or repurchases are otherwise
permitted hereunder, (B) if such Indebtedness consists of a revolving line of
credit, the commitments under such line of credit are permanently reduced by the
amount of such prepayment or repurchase, and (C) such prepayments or repurchases
are not made, directly or indirectly, from proceeds, payments or any other
amounts available from events or circumstances that were not included in
determining Consolidated Net Income during such period,”.

 

(iv) By amending the definition of “Restricted Payment” to (A) replace the
phrase “the Borrower or any Subsidiary” in the second and third lines of such
definition with the new phrase “any Person” and (B) replace the phrase
“Borrower’s” in the sixth line of such definition with the new phrase “such
Person’s”.

 

(c) Section 1.01 of the Credit Agreement is further amended by amending and
restating in full the definition definitions of “Fee Letter”, “Term Borrowing”,
“Term Commitment”, “Term Facility”, “Term Lender”, “Term Loan” and “Term Note”
to read, respectively, as follows:

 

“Fee Letter” means, collectively, (a) the letter agreement, dated October 10,
2003, among Holdings, the Company, BAS, Banc of America Bridge LLC and Bank of
America and (b) the letter agreement, dated September 17, 2004, among Holdings,
the Borrower, BAS and Bank of America.

 

“Term Borrowing” means any Existing Term Borrowing or any Term B Borrowing, as
applicable.

 

“Term Commitment” means any Term B Commitment.

 

“Term Facility” means the Existing Term Facility or the Term B Facility, as
applicable.

 

“Term Lender” means any Existing Term Lender or any Term B Lender, as
applicable.

 

“Term Loan” means any Existing Term Loan or any Term B Loan, as applicable.

 

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“Term Note” means any Existing Term Note or any Term B Note, as applicable.

 

(d) Section 1.02 of the Credit Agreement is hereby amended by adding at the end
thereof the following new subsection (e):

 

“(e) On and after the First Amendment Effective Date, all Term Loans shall
continue to have the same terms, rights and benefits as the Term Loans
immediately prior to the First Amendment Effective Date under the Loan
Documents, except as modified by the First Amendment.”

 

(e) Section 2.01(a) of the Credit Agreement is hereby amended in full to read as
follows:

 

“(a)(i) Existing Term Loan. On the Closing Date, the Existing Term Lenders made
Existing Term Loans to the Borrower pursuant to Section 2.01(a) of this
Agreement as in effect on the Closing date.

 

(ii) Term B Exchange. With respect to each Term B Lender that has Existing Term
Loans and a corresponding Term B Commitment, such Term B Lender severally agrees
to exchange and convert on the First Amendment Effective Date an aggregate
principal amount of the Existing Term Loans (“Exchanged Term Loans”) held by it
immediately prior to the First Amendment Effective Date for and into a like
principal amount in Dollars of Term B Loans.

 

(iii) Term B Borrowings. Each Term B Lender severally agrees to make Term B
Loans in Dollars to the Borrower on the First Amendment Effective Date in a
principal amount equal to the excess of (A) its Term B Commitment over (B) the
aggregate principal amount of its Exchanged Term Loans, if any. The Borrower
shall refinance all Existing Term Loans that are not Exchanged Term Loans with
the gross proceeds of such Term B Loans.”

 

(f) The fifth sentence of Section 2.05(a)(i) of the Credit Agreement is amended
in full to read as follows:

 

“Any prepayment of any Term B Loans shall be accompanied by such prepayment
premium as is applicable under Section 2.09(b)(iii) and any prepayment of a
Eurodollar Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to Section 3.05.”

 

(g) Section 2.07(a) of the Credit Agreement is hereby amended in full to read as
follows:

 

“2.07 Repayment of Loans. (a) Term B Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term B Lenders the aggregate
principal amount of all Term B Loans outstanding in consecutive quarterly
installments as follows (which installments shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.05 or increased as a result of any increase in the amount of Term B
Loans pursuant to Section

 

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2.14 (such increased amortization payments to be calculated in the same manner
(and on the same basis) as the schedule set forth below for the Term B Loans
made as of the Closing Date)):

 

Date

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Term B Loan

Principal

Amortization
Payment

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November 21, 2004

   $ 1,237,500

February 21, 2005,

   $ 1,237,500

May 21, 2005,

   $ 1,237,500

August 21, 2005,

   $ 1,237,500

November 21, 2005

   $ 1,237,500

February 21, 2006,

   $ 1,237,500

May 21, 2006,

   $ 1,237,500

August 21, 2006,

   $ 1,237,500

November 21, 2006

   $ 1,237,500

February 21, 2007,

   $ 1,237,500

May 21, 2007,

   $ 1,237,500

August 21, 2007,

   $ 1,237,500

November 21, 2007

   $ 1,237,500

February 21, 2008,

   $ 1,237,500

May 21, 2008,

   $ 1,237,500

August 21, 2008,

   $ 1,237,500

November 21, 2008

   $ 1,237,500

February 21, 2009,

   $ 1,237,500

May 21, 2009,

   $ 1,237,500

August 21, 2009,

   $ 1,237,500

November 21, 2009

   $ 1,237,500

February 21, 2010,

   $ 116,325,000

May 21, 2010,

   $ 116,325,000

August 21, 2010,

   $ 116,325,000

November 21, 2010

   $ 116,325,000

 

provided, however, that the final principal repayment installment of the Term B
Loans shall be repaid on the Maturity Date and in any event shall be in an
amount equal to the aggregate principal amount of all Term B Loans outstanding
on such date.”

 

(h) Section 2.08(a) of the Credit Agreement is hereby amended by (i) relettering
clauses (i), (ii) and (iii) thereof as clauses (A), (B) and (C), (ii)
designating the text of

 

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Section 2.08(a) as clause (i) under Section 2.08(a), and (iii) adding at the end
thereof the following new clause (ii):

 

“(ii) With respect to,

 

(A) Exchanged Term Loans, (1) no accrued but unpaid interest shall be payable on
the First Amendment Effective Date, (2) no amounts shall be payable under
Section 3.05 of the Credit Agreement in connection with the exchange and
conversion thereof, (3) from and after the First Amendment Effective Date, no
further interest shall accrue on any Exchanged Term Loans, and (4) all accrued
but unpaid interest thereon shall be payable on the Interest Payment Date on
which such interest would otherwise have been payable;

 

(B) Term B Loans exchanged and converted pursuant to Section 2.01(a)(ii), from
and after the First Amendment Effective Date, (1) the amount and Types of such
Term B Loans shall correspond on a ratable basis to the amounts and Types of the
Exchanged Term Loans for which such Term B Loans were received and if such Types
were Eurodollar Loans, the Eurodollar Rates, Interest Periods and Interest
Payment Dates applicable to the Exchanged Term Loans for which such Term B Loans
were received shall continue to apply on a ratable basis to such Term B Loans in
the same corresponding amounts, proportions and terms, and (2) interest shall
accrue on such Term B Loans on the foregoing basis (giving effect to the
amendment of the definition of “Applicable Rate” on the First Amendment
Effective Date) and be payable with respect to each Type of Term B Loan on such
Interest Payment Dates as interest would have been payable on the corresponding
Type of Exchanged Term Loan; and

 

(C) Term B Loans made pursuant to Section 2.01(a)(iii), from and after the First
Amendment Effective Date, each of the Borrower, the Administrative Agent and
each Term B Lender making such Term B Loans agrees, that notwithstanding
anything to the contrary in this Article II, interest shall accrue on the same
basis as the Existing Term Loans refinanced with the proceeds of such Term B
Loans as follows: (1) the amounts and Types of such Term B Loans shall
correspond on a ratable basis to the amounts and Types of the Existing Term
Loans refinanced by such Term B Loans, (2) if such Types were Eurodollar Rate
Loans, the Eurodollar Rates, Interest Periods and Interest Payment Dates
applicable to the Existing Term Loans refinanced by such Term B Loans shall
continue to apply on a ratable basis to such Term B Loans in the same
corresponding Types, amounts, proportions and terms as if such Eurodollar Rate
Loans had been made by matching deposits or other borrowings in the London
interbank dollar market in the corresponding amounts, proportions and Interest
Periods on the respective dates on which each Eurodollar Rate Loan so refinanced
was originally made, and (3) interest shall accrue on such Term B Loans on the
foregoing basis (giving effect to the amendment of the definition of “Applicable
Rate” on the First Amendment Effective Date) and be payable on the applicable
Interest Payment Dates on the foregoing basis.”

 

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(i) Section 2.09(b) of the Credit Agreement is hereby amended by adding at the
end of clause (ii) the following new clause (iii):

 

“(iii) If the Borrower makes a voluntary prepayment of any Term B Loans within
one (1) year after the First Amendment Effective Date in connection with any
Repricing Transaction, the Borrower shall pay to the Administrative Agent, for
the ratable account of the Term B Lenders, a prepayment premium in an amount
equal to 1.00% of the principal amount prepaid.”

 

(j) Section 6.11 of the Credit Agreement is hereby amended by adding at the end
thereof the following new sentence:

 

“The Term B Loans shall be used solely to refinance and replace the aggregate
principal amount of the Existing Term Loans in full.”

 

(k) Section 7.03(c)(iii) of the Credit Agreement is hereby amended by (i)
replacing the phrase “five (5) years” with the new phrase “four (4) years” in
clause (D) thereof and (ii) deleting the phrase “and the Leverage Ratio shall be
less than 4.25: 1.00” in clause (ii) of the proviso thereto.

 

(l) The introduction to Section 7.05 of the Credit Agreement is hereby amended
by deleting the phrase “or enter into any agreement to make any Disposition”.

 

(m) Section 7.06(c) of the Credit Agreement is hereby amended and restated in
full to read as follows:

 

“(c) Holdings (and, from and after a Qualifying IPO of the Borrower, the
Borrower) may make Restricted Payments with the proceeds received by it from (i)
any Permitted Equity Issuance or Permitted Subordinated Indebtedness to the
extent not required to prepay the Loans pursuant to Section 2.05(b), (ii) the
issuance of Permitted Holdco Debt, and (iii) Restricted Payments permitted under
Section 7.06(g), so long as, with respect to each of the foregoing Restricted
Payments, no Default or Event of Default shall have occurred and be continuing
or would result therefrom;”

 

(n) Section 7.06(g) of the Credit Agreement is hereby amended and restated in
full to read as follows:

 

“(g) in addition to the foregoing Restricted Payments, the Borrower may make
Restricted Payments in an aggregate amount not to exceed $75,000,000 so long as,
with respect to each such Restricted Payment, (i) no Default or Event of Default
shall have occurred and be continuing or would result therefrom, and (ii) the
Administrative Agent shall have received a certificate of the Chief Financial
Officer of the Borrower as to the truth and accuracy of conditions set forth in
clause (i);”.

 

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SECTION 2. Effectiveness; Assignments; Waivers and Consents; Non-Consenting
Lenders. This Amendment, other than the amendments contemplated by Section 1,
shall become effective and in full force and effect upon the Administrative
Agent’s receipt of counterparts of this Amendment by the Borrower, Holdings and
the Required Lenders or, as to any of the foregoing parties, advice satisfactory
to the Administrative Agent that each of the foregoing parties has executed this
Amendment.

 

(a) Assignments. Each Exiting Term Lender is required to assign all of its
Existing Term Loans to one or more Term B Lenders, including, without
limitation, pursuant to Section 3.07 of the Credit Agreement as amended by this
Amendment. Each Term B Lender, the Borrower and the Administrative Agent hereby
agree that the Arranger and the Administrative Agent shall arrange and allocate
all such assignments and the Administrative Agent or any of its Affiliates may
(but shall not be required to) acquire Existing Term Loans, Converted Term B
Loans and Funded Term B Loans and further assign any such Existing Term Loans,
Converted Term B Loans or Funded Term B Loans in order to better effectuate such
assignments and the purposes of this Section 2(a).

 

(b) Waivers and Consents. Upon the occurrence of the Waiver Effective Date (as
defined below), (i) the Administrative Agent and the Required Lenders hereby
waive any prior notice requirements under Section 2.05(a) of the Credit
Agreement in connection with the exchange, conversion, refinancing, substitution
and replacement of the Existing Term Loans as contemplated by this Amendment,
(ii) the Required Lenders and Term B Lenders (including all Continuing Term
Lenders) agree that (A) all Existing Term Loans that are not exchanged for and
converted into Converted Term B Loans may be paid in full from the proceeds of
Funded Term B Loans, together with all accrued and unpaid interest thereon and
any other amounts owing with respect thereto, without requiring the payment in
full of any other Existing Term Loans and hereby waive the provisions of Section
2.12(a) and Section 2.13 to the extent applicable thereto and (B) interest shall
accrue and be payable on such Funded Term B Loans on the basis set forth in
Section 2.08(a)(ii) of the Credit Agreement, as amended hereby, (iii) the
Required Lenders and the Term B Lenders hereby waive the requirements of Section
10.07 of the Credit Agreement with respect to any assignment of Existing Term
Loans of any Exiting Term Lender to Term B Lenders made to effectuate the
purposes of this Amendment and (iv) each Term B Lender (including each
Continuing Term Lender) and the Administrative Agent agree that this Amendment
constitutes a Committed Loan Notice under Section 2.02(a) of the Credit
Agreement with respect to the Term B Loans and hereby waive any other notice
requirements under Section 2.02(a) of the Credit Agreement for purposes of the
exchange and conversion of Existing Term Loans for and into Term B Loans and the
making of other Term B Loans on the First Amendment Effective Date.

 

(c) Non-Consenting Lenders. The Required Lenders, each Term B Lender and the
Borrower hereby agree that, in order to better effectuate the exchange and
conversion of Existing Term Loans for and into Converted Term Loans, Section
3.07 of the Credit Agreement shall be modified as provided in this Section 2(c)
and each Exiting Term Lender that has not entered into one or more Assignment
and Assumption to assign all its Existing Term Loans shall be deemed a
Non-Consenting Lender under Section 3.07 of the Credit Agreement for purposes of
this Amendment (notwithstanding requirements to the contrary in Section 3.07(d)
of the Credit Agreement).

 

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SECTION 3. Conditions of Effectiveness of Amendments. The amendments to the
Credit Agreement set forth in Section 1 shall become effective on the date (the
“First Amendment Effective Date”) when each of the conditions set forth in this
Section 3 shall have been satisfied and this Amendment, including the waivers
and agreements set forth in Section 2(b), shall become effective on the date
(the “Waiver Effective Date”) when the conditions set forth in Section 3(a)(i)
and Section 3(a)(iii) below shall have been satisfied:

 

(a) Execution of Counterparts. The Administrative Agent shall have received
counterparts of (i) this Amendment executed by (A) the Borrower and Holdings,
(B) the Administrative Agent, (C) the Required Lenders, and (D) Term B Lenders
providing Term B Commitments in an aggregate amount equal to the outstanding
aggregate principal amount of Existing Term Loans or, as to any of the foregoing
parties, advice satisfactory to the Administrative Agent that each of the
foregoing parties has executed this Amendment and, if applicable, provided such
Term B Commitments, (ii) the consent attached hereto (the “Consent”) executed by
each Guarantor and (iii) the fee letter agreement dated the date hereof executed
by Holdings, the Borrower and the other parties thereto.

 

(b) Payment of Fees and Expenses. The Borrower shall have paid (i) all fees and
expenses (including the reasonable fees and expenses of Shearman & Sterling LLP)
incurred by the Arranger and the Administrative Agent in connection with the
preparation, negotiation and execution of this Amendment (including, without
limitation, in connection with any due diligence and the syndication of the Term
B Loans) or otherwise required to be paid in connection with this Amendment and
(ii) all other fees and expenses required to be paid under the Loan Documents
and remaining outstanding on or prior to the date of this Amendment (including
fees and expenses of Shearman & Sterling LLP), in each case for which the
invoice for such fees and expenses shall have been presented to the Borrower.

 

(c) Evidence of Debt. Each Term B Lender shall have received, if requested, and
if such Term B Lender shall have surrendered any Existing Term Note or Existing
Term Notes held by such Term B Lender, one or more Notes payable to the order of
such Lender duly executed by the Borrower, in substantially the form of Exhibit
A attached hereto, evidencing the Term B Loans of such Term B Lender.

 

(d) Certain Exiting Lenders. The Borrower shall have paid to each of the Exiting
Term Lenders, if any, that failed to execute and deliver one or more Assignment
and Assumption in order to assign its Existing Term Loans pursuant to Section
2(a) an amount equal to the aggregate outstanding principal amount of such
Existing Term Loans Dollar for Dollar from the proceeds of Funded Term B Loans
together with all accrued but unpaid interest to the First Amendment Effective
Date on such Existing Term Loans and any other amounts payable in connection
therewith under the Loan Documents.

 

(e) Resolutions. The Administrative Agent shall have received certified copies
of (i) the resolutions of the Board of Directors of (A) Holdings and the
Borrower evidencing approval of this Amendment and all matters and transactions
contemplated hereby and (B) each Guarantor evidencing approval of the Consent
and the matters and transactions contemplated hereby and thereby and (ii) all
documents evidencing other necessary corporate action and governmental and other
material third party approvals and consents, if any, with respect to this
Amendment, the Consent and the matters and transactions contemplated hereby and
thereby.

 

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(f) Certificates. The Administrative Agent shall have received a certificate of
the Secretary or an Assistant Secretary (or another Responsible Officer) of
Holdings, the Borrower and each other Loan Party certifying (i) the names and
true signatures of the officers of Holdings, the Borrower and such other Loan
Party authorized to sign this Amendment and the Consent and the other documents
to be delivered hereunder and thereunder, (ii) that no authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body, or any third party to any agreements and instruments of any
Loan Party, is required for the due execution, delivery or performance by the
Loan Parties of this Amendment and the Consent, (iii) the representations and
warranties contained in Section 5 of this Amendment are true and correct in all
material respects (except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date) and (iv) no Default has occurred and is
continuing or would result from this Amendment and the matters and transactions
contemplated hereby.

 

(g) Legal Opinions. An opinion of Weil, Gotshal & Manges LLP, counsel for the
Loan Parties, addressed to the Administrative Agent and each Lender, in
substantially the form attached as Exhibit B hereto, which shall include, among
other things, opinions as to the continuing validity of the liens on, and
security interests in, the Collateral created pursuant to the Loan Documents and
the perfection of such liens and security interests.

 

(h) Legal Details, Etc. All documents executed or submitted pursuant hereto or
contemplated hereby (including, without limitation, in connection with the
Holdco Notes Offering) shall be reasonably satisfactory in form and substance to
the Arranger, the Administrative Agent and Shearman & Sterling LLP, as counsel
to the Arranger and the Administrative Agent.

 

(i) Conditions to Credit Extensions. All conditions precedent set forth in
Section 4.02 of the Credit Agreement shall have been satisfied.

 

SECTION 4. Post-Closing Requirements Relating to the Mortgaged Properties.
Within thirty (30) days after the First Amendment Effective Date (which time
period may be extended for a period of an additional thirty (30) days up to two
(2) times in the sole discretion of the Administrative Agent), the Borrower
shall, and shall cause each Subsidiary to, furnish to the Administrative Agent:

 

(a) Evidence that mortgage amendments (the “Mortgage Amendments”) with respect
to the Mortgages covering the Real Properties located in Minnesota (the
“Minnesota Properties”) have been duly executed, acknowledged and delivered by a
duly authorized officer of each party thereto on or before such date and are in
form suitable for filing and recording in all filing or recording offices that
the Administrative Agent may deem necessary or desirable;

 

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(b) Date-down endorsements to the title insurance policies with respect to the
Minnesota Properties showing no Liens of record other than those created by or
permitted under the terms of the applicable Mortgage;

 

(c) Such advice from local counsel retained by the Borrower in Minnesota as may
be reasonably required by the Administrative Agent; and

 

(d) Evidence that all fees, costs and expenses have been paid in connection with
the preparation, execution, filing and recordation of the Mortgage Amendments,
including, without limitation, reasonable attorneys’ fees, filing and recording
fees, title insurance company coordination fees, documentary stamp, mortgage and
intangible taxes and title search charges and other charges incurred in
connection with the recordation of the Mortgage Amendments and the other matters
described in this Section 4 and as otherwise required to be paid in connection
therewith under Section 10.04 of the Credit Agreement; provided that such filing
and recording fees, title insurance company coordination fees, documentary
stamp, mortgage and intangible taxes and title search charges and such other
charges shall be paid in accordance with the letter agreement, dated September
17, 2004, among Holdings, the Borrower, BAS and Bank of America.

 

SECTION 5. Representations and Warranties. Each of Holdings and the Borrower
represents and warrants as follows:

 

(a) The execution, delivery and performance by each Loan Party of this Amendment
are within such Loan Party’s corporate or other powers, have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not (i) contravene the terms of any of such Person’s Organization
Documents; (ii) conflict with or result in any breach or contravention of, or
the creation of any Lien under (other than as permitted by Section 7.01 of the
Credit Agreement), or require any payment to be made under (A) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (iii) violate any Law;
except with respect to any breach or contravention or payment (but not creation
of Liens) referred to in clause (ii)(A), to the extent that such conflict,
breach, contravention or payment could not reasonably be expected to have a
Material Adverse Effect.

 

(b) This Amendment and the Consent have been duly executed and delivered by each
Loan Party that is party hereto or thereto, as applicable. Each of this
Amendment and the Consent and each Loan document after giving effect to the
amendments in Section 1, constitutes a legal, valid and binding obligation of
each Loan Party that is party hereto or thereto, as applicable, enforceable
against such Loan Party in accordance with its terms, except as such
enforceability may be limited by bankruptcy insolvency, reorganization,
receivership, moratorium or other laws affecting creditors’ rights generally and
by general principles of equity.

 

(c) No Default has occurred and is continuing or will occur as a result of the
transactions contemplated by this Amendment, including the Holdco Notes Offering
and Restricted Payments with the proceeds thereof, and such transactions are
permitted under the

 

13

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Senior Subordinated Notes Indenture and the Senior Unsecured Term Loan Agreement
and Holdings and the Borrower have complied with all requirements thereunder in
connection with such transactions.

 

(d) Each of the representations and warranties of each Loan Party contained in
Article V of the Credit Agreement and each other Loan Document, immediately
before and after giving effect to this Amendment and the matters and
transactions contemplated hereby, is true and correct in all material respects
on and as of the date first above written, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date.

 

SECTION 6. Reference to and Effect on the Credit Agreement and the Loan
Documents. (a) On and after the effectiveness of this Amendment, each reference
in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of
like import referring to the Credit Agreement, and each reference in the Notes
and each of the other Loan Documents to “the Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Amendment.

 

(b) The Credit Agreement, the Notes and each of the other Loan Documents, as
specifically amended by this Amendment (and as contemplated to be amended,
modified, supplemented, restated, substituted or replaced by this Amendment) are
and shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing, the
Collateral Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Loan Parties under the
Loan Documents, in each case, as amended by this Amendment (and as contemplated
to be amended, modified, supplemented, restated, substituted or replaced by this
Amendment).

 

(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents. On and after the effectiveness of this Amendment, this Amendment
shall for all purposes constitute a Loan Document.

 

SECTION 7. Costs and Expenses. The Borrower agrees that all costs and expenses
of the Administrative Agent in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment and,
except as otherwise provided in Section 4(d), the other instruments and
documents to be delivered hereunder or in connection herewith (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent), are costs and expenses that the Borrower is required to
pay or reimburse pursuant to Section 10.04 of the Credit Agreement.

 

SECTION 8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this
Amendment.

 

14

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SECTION 9. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

[The remainder of this page is intentionally left blank]

 

15

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

MICHAEL FOODS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary M-FOODS HOLDINGS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary BANK OF AMERICA, N.A.,
as Administrative Agent and as Lender By  

/s/ W. Thomas Barnett

--------------------------------------------------------------------------------

Name:   W. Thomas Barnett Title:   Managing Director

 

16

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CONSENT

 

Dated as of September 17, 2004

 

Each of the undersigned, as Guarantor under, as applicable, (i) the Parent
Guaranty dated as of November 20, 2003 or (ii) the Subsidiary Guaranty dated as
of November 20, 2003 (collectively, the “Guaranty”), in each case, in favor of
the Administrative Agent and the Lenders parties to the Credit Agreement
referred to in the foregoing Amendment, hereby consents to such Amendment and
the transactions contemplated by such Amendment and hereby confirms and agrees
that (a) notwithstanding the effectiveness of such Amendment, the Guaranty is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that, on and after the effectiveness of such
Amendment, each reference in the Guaranty to the “Credit Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to
the Credit Agreement, as amended by such Amendment, and (b) the Collateral
Documents to which such Guarantor is a party and all of the Collateral described
therein do, and shall continue to, secure the payment of all of the obligations
to be secured thereunder.

 

[The remainder of this page is intentionally left blank]

 

17

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M-FOODS HOLDINGS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary MICHAEL FOODS OF DELAWARE, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary CASA TRUCKING, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary KMS DAIRY, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary MINNESOTA PRODUCTS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary NORTHERN STAR CO. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary

 

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PAPETTI’S HYGRADE EGG PRODUCTS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary M.G. WALDBAUM COMPANY By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary FARM FRESH FOODS, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary PAPETTI ELECTROHEATING CORPORATION By
 

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary WFC, INC. By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary WISCO FARM COOPERATIVE By  

/s/ Mark D. Witmer

--------------------------------------------------------------------------------

Name:   Mark D. Witmer Title:   Secretary

 

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EXHIBIT A

 

FORM OF TERM B NOTE

 

$                     

                    , 2004

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay
                                         to or registered assigns (the
“Lender”), in accordance with the provisions of the Agreement (as hereinafter
defined), the aggregate unpaid principal amount of each Term B Loan made by the
Lender to the Borrower under that certain Credit Agreement, dated as of November
20, 2003 (as amended on September 17, 2004 and as further amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among the Borrower, Holdings, the Lenders from time to time party thereto, Bank
of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and
the other Agents named therein.

 

The Borrower promises to pay interest on the aggregate unpaid principal amount
of each Term B Loan made by the Lender to the Borrower under the Agreement from
the date of such Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Agreement. All payments of
principal and interest shall be made to the Administrative Agent for the account
of the Lender in Dollars in immediately available funds at the Administrative
Agent’s Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Agreement.

 

This Term B Note is one of the Term B Notes referred to in the Agreement, is
entitled to the benefits thereof and may be prepaid in whole or in part subject
to the terms and conditions provided therein. This Term B Note is also entitled
to the benefits of the Guaranty and is secured by the Collateral. Upon the
occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Term B Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Agreement. Term B Loans made by the Lender shall be evidenced by one or more
loan accounts or records maintained by the Lender in the ordinary course of
business. The Lender may also attach schedules to this Term B Note and endorse
thereon the date, amount and maturity of its Loans and payments with respect
thereto.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Term B Note.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

MICHAEL FOODS, INC. By:  

 

--------------------------------------------------------------------------------

Name:  

 

--------------------------------------------------------------------------------

Title:  

 

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LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

--------------------------------------------------------------------------------

   Type of
Loan Made

--------------------------------------------------------------------------------

   Amount of
Loan Made

--------------------------------------------------------------------------------

   End of
Interest
Period

--------------------------------------------------------------------------------

   Amount of
Principal or
Interest Paid
This Date

--------------------------------------------------------------------------------

   Outstanding
Principal
Balance
This Date

--------------------------------------------------------------------------------

   Notation
Made By

--------------------------------------------------------------------------------

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

             

                                                                           
                         

 

22

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EXHIBIT B

 

Form of Opinion

 

23

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SCHEDULE 2.01

 

24