Exhibit 10.26


 


EXECUTION COPY


 






 


AGRILINK HOLDINGS LLC


 


A Delaware Limited Liability Company


 






 


AMENDED AND RESTATED


 


LIMITED LIABILITY COMPANY AGREEMENT


 


Dated as of August 19, 2002


 


THE COMPANY INTERESTS
REPRESENTED BY THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE
WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.


 


THE COMPANY INTERESTS
REPRESENTED BY THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE
SECURITYHOLDERS AGREEMENT, DATED AS OF THE DATE HEREOF, AS AMENDED OR MODIFIED
FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN INVESTORS, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH INTERESTS UNTIL SUCH TRANSFER
IS IN COMPLIANCE WITH SUCH SECURITYHOLDERS AGREEMENT. A COPY OF THE
SECURITYHOLDERS AGREEMENT SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER OF
SUCH INTERESTS UPON WRITTEN REQUEST AND WITHOUT CHARGE.


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
  SECTION 1.1

  	
  Definitions

  	
  1

  
	
  SECTION 1.2

  	
  Terms Generally

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE II GENERAL PROVISIONS

  	
  12

  
	
  SECTION 2.1

  	
  Formation

  	
  12

  
	
  SECTION 2.2

  	
  Name

  	
  12

  
	
  SECTION 2.3

  	
  Term

  	
  12

  
	
  SECTION 2.4

  	
  Purpose; Powers

  	
  12

  
	
  SECTION 2.5

  	
  Foreign Qualification

  	
  13

  
	
  SECTION 2.6

  	
  Registered Office;
  Registered Agent; Principal Office; Other Offices

  	
  13

  
	
  SECTION 2.7

  	
  No State-Law Partnership

  	
  13

  
	
  SECTION 2.8

  	
  Issuance of Additional
  Units

  	
  13

  
	
  SECTION 2.9

  	
  Units Are Securities

  	
  14

  
	
  SECTION 2.10

  	
  Units Certificated

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III MANAGEMENT

  	
  14

  
	
  SECTION 3.1

  	
  The Management Committee;
  Delegation of Authority and Duties

  	
  14

  
	
  SECTION 3.2

  	
  Establishment of Management
  Committee

  	
  15

  
	
  SECTION 3.3

  	
  Management Committee
  Meetings

  	
  16

  
	
  SECTION 3.4

  	
  Chairman

  	
  17

  
	
  SECTION 3.5

  	
  Approval or Ratification of
  Acts or Contracts

  	
  17

  
	
  SECTION 3.6

  	
  Action by Written Consent
  or Telephone Conference

  	
  18

  
	
  SECTION 3.7

  	
  Officers

  	
  18

  
	
  SECTION 3.8

  	
  Management Matters

  	
  19

  
	
  SECTION 3.9

  	
  Preferred Voting Provisions

  	
  19

  
	
  SECTION 3.10

  	
  Securities in Agrilink

  	
  20

  
	
  SECTION 3.11

  	
  Liability of Unitholders

  	
  20

  
	
  SECTION 3.12

  	
  Indemnification by the
  Company

  	
  20

  
	
  SECTION 3.13

  	
  Investment Representations
  of Unitholders

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS

  	
  21

  
	
  SECTION 4.1

  	
  Capital Contributions

  	
  21

  
	
  SECTION 4.2

  	
  Capital Accounts

  	
  21

  
	
  SECTION 4.3

  	
  Allocations of Net Income
  and Net Loss

  	
  21

  
	
  SECTION 4.4

  	
  Distributions

  	
  25

  
	
  SECTION 4.5

  	
  Security Interest and Right
  of Set-Off

  	
  29

  



 


i

















 


	
  ARTICLE V WITHDRAWAL;
  DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS; ADMISSION OF NEW MEMBERS

  	
  29

  
	
  SECTION 5.1

  	
  Unitholder Withdrawal

  	
  29

  
	
  SECTION 5.2

  	
  Dissolution

  	
  30

  
	
  SECTION 5.3

  	
  Transfer by Unitholders

  	
  31

  
	
  SECTION 5.4

  	
  Admission or Substitution
  of New Members

  	
  31

  
	
  SECTION 5.5

  	
  Compliance with Law

  	
  32

  
	
  SECTION 5.6

  	
  Redemption of Preferred
  Units

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI REPORTS TO
  MEMBERS; TAX MATTERS

  	
  33

  
	
  SECTION 6.1

  	
  Books of Account

  	
  33

  
	
  SECTION 6.2

  	
  Reports

  	
  33

  
	
  SECTION 6.3

  	
  Fiscal Year

  	
  34

  
	
  SECTION 6.4

  	
  Certain Tax Matters

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  35

  
	
  SECTION 7.1

  	
  Schedules

  	
  35

  
	
  SECTION 7.2

  	
  Governing Law

  	
  35

  
	
  SECTION 7.3

  	
  Successors and Assigns

  	
  36

  
	
  SECTION 7.4

  	
  Confidentiality

  	
  36

  
	
  SECTION 7.5

  	
  Amendments

  	
  36

  
	
  SECTION 7.6

  	
  Notices

  	
  37

  
	
  SECTION 7.7

  	
  Counterparts

  	
  37

  
	
  SECTION 7.8

  	
  Power of Attorney

  	
  37

  
	
  SECTION 7.9

  	
  Entire Agreement

  	
  38

  
	
  SECTION 7.10

  	
  Certain Payments

  	
  38

  
	
  SECTION 7.11

  	
  Section Titles

  	
  38

  



 


ii

















 


AMENDED AND RESTATED


LIMITED LIABILITY COMPANY AGREEMENT


OF


AGRILINK HOLDINGS LLC


A Delaware Limited Liability Company


 


THIS
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Agrilink Holdings
LLC, dated and effective as of August 19, 2002 (this “Agreement”), is
adopted, executed and agreed to, for good and valuable consideration, by and
among Vestar/Agrilink Holdings LLC, a Delaware limited liability company (“Holdings”),
Pro-Fac Cooperative, Inc., a New York cooperative corporation (“Pro-Fac”),
the other Persons listed on Schedule A attached hereto as of the date hereof
upon their execution of this Agreement, and each other Person who at any time
becomes a Member in accordance with the terms of this Agreement and the Act.
Any reference in this Agreement to Holdings or any other Member shall include
such Member’s Successors in Interest to the extent such Successors in Interest
have become Substitute Members in accordance with the provisions of this
Agreement.


 


WHEREAS,
Pro-Fac entered into a Limited Liability Company Agreement, dated as of July 11,
2002 (the “Initial Agreement”), relating to the Company;


 


WHEREAS,
Pro-Fac and the other parties hereto wish to amend and restate the Initial
Agreement in its entirety as hereinafter set forth;


 


NOW
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto, each intending to be legally bound, agree that the
Initial Agreement is hereby amended and restated in its entirety, and further
agree as follows:


 


ARTICLE I


DEFINITIONS


 


SECTION 1.1
Definitions.


 


Unless
the context otherwise requires, the following terms shall have the following
meanings for purposes of this Agreement:


 


“Act”
means the Delaware Limited Liability Company Act, Title 6,’SS’’SS’ 18-101, et
seq, as it may be amended from time to time.


 


“Additional
Member” means any Person that has been admitted to the Company as a Member
pursuant to Section 5.4 by virtue of having received its Membership
Interest from the Company and not from any other Member or Assignee.


 


“Adjusted
Capital Account Deficit” means, with respect to any Unitholder, the deficit
balance, if any, in such Unitholder’s Capital Account as of the end of the
relevant fiscal year, after giving effect to the following adjustments:


 


(i) credit to such Capital Account any amounts that such Unitholder
is obligated to restore pursuant to this Agreement or is deemed to be


 

















 


obligated
to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the
penultimate sentence of each of Regulations Sections 1.704-2(i)(5) and
1.704-2(g)(1); and


 


(ii) debit to such Capital Account the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).


 


The foregoing definition of
Adjusted Capital Account Deficit is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and
applied by the Management Committee consistently therewith.


 


“Affiliate”
when used with reference to another Person means any Person (other than the
Company), directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with, such other Person. In
addition, Affiliates of a Member shall include all partners, officers,
employees and former partners, officers or employees of, all consultants or
advisors to, and all other Persons who directly or indirectly receive
compensation from, such Member.


 


“Agrilink”
means Agrilink Foods, Inc., a New York corporation, and its successors.


 


“Agrilink
Holdings” means Agrilink Holdings Inc., a Delaware corporation, and its
successors.


 


“Assignee”
means any transferee to which a Member or another Assignee has transferred its
interest in the Company in accordance with the terms of this Agreement, but who
is not a Member.


 


“Bankruptcy”
means, with respect to any Person, the occurrence of any of the following
events: (i) the filing of an application by such Person for, or a consent
to, the appointment of a trustee or custodian of such Person’s assets; (ii) the
filing by such Person of a voluntary petition in Bankruptcy or the seeking of
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or the filing of a pleading in any court of record admitting
in writing such Person’s inability to pay its debts as they become due; (iii) the
failure of such Person to pay its debts as such debts become due; (iv) the
making by such Person of a general assignment for the benefit of creditors; (v) the
filing by such Person of an answer admitting the material allegations of, or
such Person’s consenting to, or defaulting in answering, a Bankruptcy petition
filed against him in any Bankruptcy proceeding or petition seeking relief under
Title 11 of the United States Code, as now constituted or as hereafter amended;
or (vi) the entry of an order, judgment or decree by any court of
competent jurisdiction adjudicating such Person a bankrupt or insolvent or for
relief in respect of such Person or appointing a trustee or custodian of such
Person’s assets and the continuance of such order, judgment or decree unstayed
and in effect for a period of 60 consecutive days.


 


“Call
Option” means the call option described in Section 5.1 of the Management
Unit Subscription Agreements.


 


2

















 


“Capital
Account” means, with respect to any Unitholder, the account maintained for such
Unitholder in accordance with the following provisions:


 


(a) To each Unitholder’s Capital Account there shall be added such Unitholder’s
Capital Contributions, such Unitholder’s allocable share of Net Income and any
items in the nature of income or gain which are specially allocated to such
Unitholder pursuant to Section 4.3(c) hereof, and the amount of any
Company liabilities assumed by such Unitholder or which are secured by any
property distributed to such Unitholder.


 


(b) From each Unitholder’s Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any property distributed
to such Unitholder pursuant to any provision of this Agreement, such Unitholder’s
allocable share of Net Losses and any items in the nature of expenses or losses
which are specially allocated to such Unitholder pursuant to Section 4.3(c) hereof,
and the amount of any liabilities of such Unitholder assumed by the Company or
which are secured by any property contributed by such Unitholder to the
Company.


 


(c) In the event any interest in the Company is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred interest.



 


(d) In determining the amount of any liability for purposes of subparagraphs
(a) and (b) hereof and Section 4.3(b) hereof, there shall be
taken into account Code Section 752(c) and any other applicable provisions
of the Code and Regulations.


 


(e) The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Code Section 704(b) and the Regulations promulgated thereunder, and
shall be interpreted and applied by the Management Committee in a manner
consistent with such Regulations.


 


“Capital
Contribution” means, with respect to any Unitholder, the amount of cash and the
initial Gross Asset Value of any property (other than money) contributed from
time to time to the Company by such Unitholder (it being understood that the
initial Gross Asset Value of property in respect of a Unitholder’s Initial
Capital Contribution shall be as set forth on Exhibit I hereto).


 


“Certificate”
has the meaning set forth in Section 2.1.


 


“Class A
Units” means the Class A Units of the Company.


 


“Class B
Units” means the Class B Units of the Company.


 


“Class C
Fraction” means the lesser of (A) one and (B) a fraction, the
numerator of which is the number of Class C Units outstanding at the date
of any such determination and the denominator of which is the number of Class C
Units authorized on the date of the Initial Capital Contribution (i.e.,
16,000), as each of the numerator and denominator may be adjusted in


 


3

















 


the event of a recapitalization,
split, dividend, or other reclassification affecting the Class C Units.


 


“Class C
Unitholders” means the Unitholders holding an Economic Interest in Class C
Units.


 


“Class C
Units” means the Class C Units of the Company. There are 16,000 Class C
Units originally authorized for issuance.


 


“Class D
Fraction” means the lesser of (A) one and (B) a fraction, the
numerator of which is the number of Class D Units outstanding at the date
of any such determination and the denominator of which is the number of Class D
Units authorized on the date of the Initial Capital Contribution (i.e.,
16,000), as each of the numerator and denominator may be adjusted in the event
of a recapitalization, split, dividend, or other reclassification affecting the
Class D Units.


 


“Class D
Unitholders” means the Unitholders holding an Economic Interest in Class D
Units.


 


“Class D
Units” means the Class D Units of the Company. There are 16,000 Class D
Units originally authorized for issuance.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute. Any reference herein to a particular provision of the Code
shall mean, where appropriate, the corresponding provision in any successor
statute.


 


“Common
Unitholders” means the Unitholders holding an Economic Interest in Common
Units.


 


“Common
Units” means the Class A Units and Class B Units.


 


“Company”
means Agrilink Holdings LLC, a Delaware limited liability company.


 


“Company
Minimum Gain” has the meaning set forth in Regulations Section 1.704-
2(d).


 


“control”
when used with reference to any Person means the power to direct the management
or policies of such Person, directly or indirectly, by or through stock or
other equity ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or other understanding (written or oral); and
the terms “controlling” and “controlled” shall have meanings correlative to the
foregoing.


 


“Current
Preferred Return” with respect to each holder of Preferred Units, means such
Unitholder’s Preferred Return that has not yet compounded (in accordance with
the definition of Preferred Return).


 


“Depreciation”
means, for each fiscal year or other period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable for
federal income tax


 


4

















 


purposes with respect to an
asset for such year or other period, except that if the Gross Asset Value of an
asset differs from its adjusted basis for federal income tax purposes at the
beginning of such year or other period, Depreciation shall be an amount which
bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization or other cost recovery deduction for such year
or other period bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization or other cost
recovery deduction for such year is zero, Depreciation shall be calculated with
reference to such beginning Gross Asset Value using any reasonable method
selected by the Management Committee.


 


“Distributable
Assets” means, with respect to any fiscal period, all cash receipts (including
from any operating, investing, and financing activities) and (if distribution
thereof is determined to be necessary or desirable by a majority of the
Management Committee) other assets of the Company from any and all sources,
reduced by operating cash expenses, contributions of capital to subsidiaries of
the Company and payments (if any) required to be made in connection with any
loan to the Company and any reserve for contingencies or escrow required, in
the good faith judgment of the Management Committee, in connection therewith.


 


“Economic
Interest” means a Member’s or Assignee’s share of the Company’s net profits,
net losses and distributions pursuant to this Agreement and the Act, but shall
not include any right to participate in the management or affairs of the
Company, including the right to vote in the election of Representatives, vote
on, consent to or otherwise participate in any decision of the Members or
Representatives, or any right to receive information concerning the business
and affairs of the Company, in each case except as expressly otherwise provided
in this Agreement or required by the Act.


 


“First
Performance Hurdle” means that the Holdings Unitholders shall have received (i) on
or prior to the first anniversary of the date of this Agreement, aggregate cash
distributions pursuant to this Agreement equal to 200% of the aggregate Capital
Contributions of such Unitholders, (ii) on or prior to the second
anniversary of the date of this Agreement, aggregate cash distributions
pursuant to this Agreement equal to 219% of the aggregate Capital Contributions
of such Unitholders, (iii) on or prior to the third anniversary of the
date of this Agreement, aggregate cash distributions pursuant to this Agreement
equal to 238% of the aggregate Capital Contributions of such Unitholders, (iv) on
or prior to the fourth anniversary of the date of this Agreement, aggregate
cash distributions pursuant to this Agreement equal to 257% of the aggregate
Capital Contributions of such Unitholders, (v) on or prior to the fifth
anniversary of the date of this Agreement, aggregate cash distributions pursuant
to this Agreement equal to 276% of the aggregate Capital Contributions of such
Unitholders or (vi) at any time after the fifth anniversary of the date of
this Agreement, aggregate cash distributions pursuant to this Agreement equal
to an amount that would produce a Holdings IRR equal to or in excess of 22.5%.


 


“Gross
Asset Value” means, with respect to any asset, the asset’s adjusted basis for
federal income tax purposes, except as follows:


 


5

















 


(a) The
initial Gross Asset Value of any asset contributed by a Unitholder to the
Company shall be the gross fair market value of such asset on the date of the
contribution, as determined by the contributing Unitholder and the Company. 


 


(b) The
Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross fair market values, as determined by the Management Committee,
as of the following times:


 


(i) the acquisition of an additional interest in the Company after
the date hereof by a new or existing Unitholder in exchange for more than a de
minimis Capital Contribution, if the Management Committee reasonably determines
that such adjustment is necessary or appropriate to reflect the relative
Economic Interests of the Unitholders in the Company;


 


(ii) the distribution by the Company to a Unitholder of more than a
de minimis amount of Company property as consideration for an interest in the
Company, if the Management Committee reasonably determines that such adjustment
is necessary or appropriate to reflect the relative Economic Interests of the
Unitholders in the Company;


 


(iii) the liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); and


 


(iv) such other times as the Management Committee shall reasonably
determine necessary or advisable in order to comply with Regulations Sections
1.704-1(b) and 1.704-2.


 


(c) The
Gross Asset Value of any Company asset distributed to a Unitholder shall be the
gross fair market value of such asset on the date of distribution, as
reasonably determined by the Management Committee taking into account the
following proviso; provided that, in the case of such assets which are
securities, the fair market value thereof shall be reduced (a) if and to
the extent that a block sale of all of such securities is reasonably likely, in
the good faith judgment of a registered broker-dealer affiliated with a
reputable, nationally recognized brokerage house, to depress the trading price
of such securities, (b) if and to the extent appropriate, in the good
faith judgment of the Management Committee, to reflect illiquidity of such securities
and (c) for any sales or other commissions reasonably likely to be
incurred or applied in a sale of such securities.


 


(d) The
Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or
Code Section 743(b), but only to the extent that such adjustments are
taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (d) to the extent that the Management Committee determines
that an adjustment pursuant to subparagraph (b) of this definition of
Gross


 


6

















 


Asset Value is necessary or
appropriate in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (d).


 


“Holdings”
has the meaning set forth in the preamble to this Agreement.


 


“Holdings
IRR” shall mean the cumulative internal rate of return of the Holdings
Unitholders (calculated as provided below), as of any date, where the internal
rate of return for such Unitholders shall be the annually compounded rate of
return which results in the following amount having a net present value equal
to zero: (i) the aggregate amount of cash distributed to such Unitholders
pursuant to Sections 4.4(a) and 5.2 from time to time on a cumulative basis
through such date (provided that, in no circumstances shall any fees paid to
such Unitholders or expenses reimbursed to such Unitholders from time to time
under this Agreement, or otherwise be included in this clause (i)), minus (ii) the
aggregate amount of the Capital Contributions made by such Unitholders from
time to time on a cumulative basis through such date. In determining the
Holdings IRR, the following shall apply: (a) Capital Contributions shall
be deemed to have been made on the last day of the month in which they are made
(except for the Initial Capital Contribution, which shall be deemed to have
been made on the date hereof); (b) distributions shall be deemed to have
been made on the last day of the month in which they are made; (c) all
distributions shall be based on the amount distributed prior to the application
of any U.S. federal, state, local or foreign income taxation to the Holdings
Unitholders; and (d) the rates of return shall be per annum rates and all
amounts shall be calculated on an annually compounded basis, and on the basis
of a 365-day year.


 


“Holdings
Unitholders” means the Unitholders holding an Economic Interest in any Units
initially issued to Holdings.


 


“Initial
Agreement” has the meaning set forth in the preamble to this Agreement.


 


“Initial
Capital Contribution” has the meaning set forth in Section 4.1.


 


“Management
Committee” means the Management Committee established pursuant to Section 3.2.


 


“Management
Unit Subscription Agreements” means the Management Unit Subscription
Agreements, dated as of the date hereof or on a date after the date hereof, by
and between certain Members (who are employees of Agrilink) and the Company.


 


“Member”
means Holdings, Pro-Fac, the other Persons listed on Schedule A attached hereto
and each other Person who is hereafter admitted as a Member in accordance with
the terms of this Agreement and the Act. The Members shall constitute the “members”
(as that term is defined in the Act) of the Company. Except as otherwise set
forth herein or in the Act, the Members shall constitute a single class or
group of members of the Company for all purposes of the Act and this Agreement.


 


“Member
Minimum Gain” means minimum gain attributable to Member Nonrecourse Debt
determined in accordance with Regulations Section 1.704-2(i).


 


7

















 


“Member
Nonrecourse Debt” has the meaning set forth in Regulations Section 1.704-2(b)(4).


 


“Member
Nonrecourse Deduction” has the meaning set forth in Regulations Section 1.704-2(i)(2).


 


“Membership
Interest” means, with respect to each Member, such Member’s Economic Interest
and rights as a Member.


 


“Net
Income” or “Net Loss” means for each fiscal year of the Company, an amount
equal to the Company’s taxable income or loss for such fiscal year, determined
in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant
to Code Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:


 


(a) Any income of the Company that is exempt from federal income
tax and not otherwise taken into account in computing Net Income or Net Loss pursuant
to this definition of Net Income or Net Loss shall be added to such taxable
income or loss; 


 


(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Net Income or Net Loss pursuant to this definition of Net
Income or Net Loss shall be subtracted from such taxable income or loss;


 


(c) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraph (b) or (c) of the definition of Gross Asset
Value, the amount of such adjustment shall be taken into account as gain (if
the adjustment increases the Gross Asset Value of the asset) or loss (if the
adjustment decreases the Gross Asset Value of the asset) from the disposition
of such asset for purposes of computing Net Income or Net Loss;


 


(d) Gain or loss resulting from any disposition of property with respect
to which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;


 


(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, Depreciation
shall be taken into account for such fiscal year;


 


(f) To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to Code Section 734(b) or 743(b) is required pursuant
to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account
in determining Capital Accounts as a result of a distribution other than in
liquidation of a Unitholder’s interest in the Company, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis


 


8














 


of
the asset) from the disposition of the asset and shall be taken into account
for purposes of computing Net Income or Net Loss; and


 


(g) Notwithstanding any other provision of this definition of Net  Income or Net
Loss, any items which are specially allocated pursuant to  Section 4.3(c) hereof
shall not be taken into account in computing Net  Income or Net Loss. The
amounts of the items of Company income, gain,  loss, or deduction available
to be specially allocated pursuant to  Section 4.3(c) hereof
shall be determined by applying rules analogous to  those set forth
in this definition of Net Income or Net Loss.


 


“Nonrecourse
Deductions” has the meaning set forth in Regulations Section 1.704- 2(c).


 


“Officer”
means each Person designated as an officer of the Company pursuant to and in
accordance with the provisions of Section 3.7, subject to any resolution
of the Management Committee appointing such Person as an officer or relating to
such appointment.


 


“Preferred
Return” with respect to each Preferred Unitholder means an amount equal to 15%
per annum, accrued on a daily basis and, beginning September 30, 2002,
compounded quarterly on March 31, June 30, September 30 and December 31
of each year (i.e. 3.75% quarterly), from the day on which such Unitholder
makes a Capital Contribution in respect of its Preferred Units through the date
of distribution, of the excess, if any, of (i) such Unitholder’s aggregate
Capital Contributions in respect of its Preferred Units plus the aggregate
amount compounded pursuant to this definition through the end of the previous
quarter on each day during such period over (ii) the aggregate amount of
all distributions made on or prior to such day to such Unitholder in respect of
its Preferred Units. For purposes of computing the Preferred Return, each
Capital Contribution shall be treated as having been made on the last day of
the calendar month in which such Capital Contribution is received by the
Company (except for the Initial Capital Contribution, which shall be deemed to
have been made on the date hereof), and distributions shall be deemed to have
been made on the last day of the month in which they are made. The Preferred
Return shall be computed based on a 360-day year consisting of 12 equal months.


 


“Preferred
Unitholders” means the Unitholders holding an Economic Interest in Preferred
Units.


 


“Preferred
Units” means the Class P Units of the Company.


 


“Proceeding”
has the meaning set forth in Section 3.12.


 


“Pro-Fac”
has the meaning set forth in the preamble to this Agreement.


 


“Redemption
Amount” has the meaning set forth in Section 5.6(a).


 


“Regulations”
means the Income Tax Regulations, including temporary Regulations, promulgated
under the Code, as such Regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).


 


9

















 


“Regulatory
Allocations” has the meaning set forth in Section 4.3(c).


 


“Representative”
has the meaning set forth in Section 3.2(a).


 


“Sale
of the Company” shall mean a “Sale of the Company” (as defined in the
Securityholders Agreement) or a dissolution of the Company in accordance with
this Agreement (other than transactions effected for the purpose of changing,
directly or indirectly, the form of organization or the organizational
structure of the Company and/or any of its subsidiaries).


 


“Second
Performance Hurdle” means, that the Holdings Unitholders shall have received (i) on
or prior to the first anniversary of the date of this Agreement, aggregate cash
distributions pursuant to this Agreement equal to 221% of the aggregate Capital
Contributions of such Unitholders, (ii) on or prior to the second
anniversary of the date of this Agreement, aggregate cash distributions
pursuant to this Agreement equal to 242% of the aggregate Capital Contributions
of such Unitholders, (iii) on or prior to the third anniversary of the
date of this Agreement, aggregate cash distributions pursuant to this Agreement
equal to 263% of the aggregate Capital Contributions of such Unitholders, (iv) on
or prior to the fourth anniversary of the date of this Agreement, aggregate
cash distributions pursuant to this Agreement equal to 284% of the aggregate
Capital Contributions of such Unitholders, (v) on or prior to the fifth
anniversary of the date of this Agreement, aggregate cash distributions
pursuant to this Agreement equal to 305% of the aggregate Capital Contributions
of such Unitholders or (vi) at any time after the fifth anniversary of the
date of this Agreement, aggregate cash distributions pursuant to this Agreement
equal to an amount that would produce a Holdings IRR equal to or in excess of
25%.


 


“Securities”
means any debt or equity securities of any issuer, including common and
preferred stock and interests in limited liability companies (including
warrants, rights, put and call options and other options relating thereto or
any combination thereof), notes, bonds, debentures, trust receipts and other
obligations, instruments or evidences of indebtedness, other property or
interests commonly regarded as securities, interests in real property, whether
improved or unimproved, interests in oil and gas properties and mineral
properties, short-term investments commonly regarded as money market
investments, bank deposits and interests in personal property of all kinds,
whether tangible or intangible.


 


“Securityholders
Agreement” means the Securityholders Agreement dated as of the date hereof
among the Company and each Member, as it may be amended or supplemented from
time to time.


 


“Substitute
Member” means any Person that has been admitted to the Company as a Member
pursuant to Section 5.4 by virtue of such Person receiving all or a
portion of a Membership Interest from a Member or its Assignee and not from the
Company.


 


“Successor
in Interest” means any (i) trustee, custodian, receiver or other Person
acting in any Bankruptcy or reorganization proceeding with respect to; (ii) assignee
for the benefit of the creditors of; (iii) trustee or receiver, or current
or former officer, director or partner, or other fiduciary acting for or with
respect to the dissolution, liquidation or termination


 


10

















 


of; or (iv) other
executor, administrator, committee, legal representative or other successor or
assign of, any Unitholder, whether by operation of law or otherwise.


 


“Tax
Matters Member” has the meaning set forth in Section 6.4(b).


 


“Third
Performance Hurdle” means, that the Holdings Unitholders shall have received (i) on
or prior to the first anniversary of the date of this Agreement, aggregate cash
distributions pursuant to this Agreement equal to 245% of the aggregate Capital
Contributions of such Unitholders, (ii) on or prior to the second
anniversary of the date of this Agreement, aggregate cash distributions
pursuant to this Agreement equal to 268% of the aggregate Capital Contributions
of such Unitholders, (iii) on or prior to the third anniversary of the
date of this Agreement, aggregate cash distributions pursuant to this Agreement
equal to 291% of the aggregate Capital Contributions of such Unitholders, (iv) on
or prior to the fourth anniversary of the date of this Agreement, aggregate
cash distributions pursuant to this Agreement equal to 314% of the aggregate
Capital Contributions of such Unitholders, (v) on or prior to the fifth
anniversary of the date of this Agreement, aggregate cash distributions
pursuant to this Agreement equal to 337% of the aggregate Capital Contributions
of such Unitholders or (vi) at any time after the fifth anniversary of the
date of this Agreement, aggregate cash distributions pursuant to this Agreement
equal to an amount that would produce a Holdings IRR equal to or in excess of
27.5%.


 


“Unitholder”
means a Member or Assignee who holds an Economic Interest in Preferred Units, Common
Units, Class C Units or Class D Units.


 


“Units”
means the Preferred Units, Common Units, Class C Units and Class D
Units.


 


“Unpaid
Preferred Return” with respect to each holder of Preferred Units means the
excess, if any, of (i) such Unitholder’s Preferred Return as of the date
of any such determination over (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with Section 4.4(a)(i) and
Section 4.4(a)(ii)(1).


 


“Unreturned
Common Capital” with respect to each Unitholder holding an Economic Interest in
Common Units and/or Class C Units means the excess, if any, of (i) such
Unitholder’s aggregate Capital Contributions in respect of its Common Units and
Class C Units over (ii) the aggregate amount of all distributions
made to such Unitholder pursuant to or in accordance with Section 4.4(a)(iii).


 


“Unreturned
Preferred Capital” with respect to each Preferred Unitholder means the excess,
if any, of (i) such Unitholder’s aggregate Capital Contributions in
respect of its Preferred Units over (ii) the aggregate amount of all
distributions made to such Unitholder pursuant to or in accordance with Section 4.4(a)(ii)(2).


 


“Warrants”
means the warrants to purchase Class A Units issued on and as of the date
of this Agreement.


 


SECTION 1.2
Terms Generally. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may


 


11

















 


require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The term “person”
or “Person” includes individuals, partnerships (whether general or limited),
joint ventures, corporations, limited liability companies, trusts, estates,
custodians, nominees, governments (or agencies or political subdivisions
thereof) and other associations, entities or groups (as defined in the
Securities Exchange Act of 1934, as amended). The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.” All terms herein that relate to accounting matters shall be
interpreted in accordance with generally accepted accounting principles from
time to time in effect. All references to “Sections” and “Articles” shall refer
to Sections and Articles of this Agreement unless otherwise specified. The
words “hereof” and “herein” and similar terms shall relate to this Agreement.


 


ARTICLE II


GENERAL PROVISIONS


 


SECTION 2.1
Formation. The Company has been organized as a Delaware limited liability company
by the execution and filing of a Certificate of Formation (the “Certificate”)
by an authorized person, under and pursuant to the Act. The rights, powers,
duties, obligations and liabilities of the Members shall be determined pursuant
to the Act and this Agreement. To the extent that the rights, powers, duties,
obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such
provision, this Agreement shall, to the extent permitted by the Act, control.


 


SECTION 2.2
Name. The name of the Company is “Agrilink Holdings LLC,” and all Company
business shall be conducted in that name or in such other names that comply
with applicable law as the Management Committee may select from time to time.


 


SECTION 2.3
Term. The term of the Company commenced on the date the Certificate was filed
with the office of the Secretary of State of the State of Delaware and shall
continue in existence perpetually until termination or dissolution in accordance
with the provisions of Section 5.2.


 


SECTION 2.4
Purpose; Powers.


 


(a) General Powers. The nature of the business or purposes to be  conducted or
promoted by the Company is to engage in any lawful act or  activity for
which limited liability companies may be organized under the  Act. The Company
may engage in any and all activities necessary,  desirable or incidental to
the accomplishment of the foregoing.  Notwithstanding anything
herein to the contrary, nothing set forth herein  shall be construed as authorizing
the Company to possess any purpose or  power, or to do any act or
thing, forbidden by law to a limited liability  company organized under the
laws of the State of Delaware.


 


(b) Company Action. Subject to the provisions of this Agreement and  except as
prohibited by applicable law (i) the Company may, with the  approval of the
Management Committee, enter into and perform any and all  documents,
agreements and instruments, all without any further act, vote  or approval of
any Member and (ii) the


 


12

















 


Management
Committee may authorize any Person (including any Member or Officer) to enter
into and perform any document on behalf of the Company.


 


(c) Merger. Subject to the provisions of this Agreement, the Company
may, with the approval of the Management Committee and without the need for any
further act, vote or approval of any Member, merge with, or consolidate into,
another limited liability company (organized under the laws of Delaware or any
other state), a corporation (organized under the laws of Delaware or any other
state) or other business entity (as defined in Section 18-209(a) of
the Act), regardless of whether the Company is the survivor of such merger or
consolidation; provided that, to the extent applicable in connection with any
transaction described in this Section 2.4(c), each Unitholder shall be
afforded any rights to which it is entitled to pursuant to Article IV of
the Securityholders Agreement.


 


SECTION 2.5
Foreign Qualification. Prior to the Company’s conducting business in any
jurisdiction other than Delaware, the Management Committee shall cause the
Company to comply, to the extent procedures are available and those matters are
reasonably within the control of the Officers, with all requirements necessary
to qualify the Company as a foreign limited liability company in that
jurisdiction.


 


SECTION 2.6
Registered Office; Registered Agent; Principal Office; Other Offices. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate or such other office (which need not be a place of business of
the Company) as the Management Committee may designate from time to time in the
manner provided by law. The registered agent of the Company in the State of
Delaware shall be the initial registered agent named in the Certificate or such
other Person or Persons as the Management Committee may designate from time to
time in the manner provided by law. The principal office of the Company shall
be at such place as the Management Committee may designate from time to time,
which need not be in the State of Delaware, and the Company shall maintain
records at such place. The Company may have such other offices as the
Management Committee may designate from time to time.


 


SECTION 2.7
No State-Law Partnership. The Unitholders intend that the Company shall not be
a partnership (including a limited partnership) or joint venture, and that no
Unitholder, Representative or Officer shall be a partner or joint venturer of
any other Unitholder, Representative or Officer by virtue of this Agreement,
for any purposes other than as set forth in the last sentence of this Section 2.7,
and this Agreement shall not be construed to the contrary. The Unitholders
intend that the Company shall be treated as a partnership for federal and, if
applicable, state or local income tax purposes, and each Unitholder and the
Company shall file all tax returns and shall otherwise take all tax and
financial reporting positions in a manner consistent with such treatment.


 


SECTION 2.8
Issuance of Additional Units. The Management Committee shall have the right to
issue Class C Units and Class D Units. Subject to any other provision
of this Agreement, the holders of a majority of the total voting power of the
outstanding Common Units shall have the right to cause the Company to create
and issue additional units; provided that, subject to Section 7.5, no such
issuance shall adversely affect the relative economic rights


 


13

















 


among the Class A Units,
Class B Units, Class C Units and Class D Units as set forth
herein. Upon the exercise of any of the Warrants, the Management Committee
shall cause the Company to issue additional Class A Units pursuant to the
terms of such Warrant.


 


SECTION 2.9
Units Are Securities. The Company hereby irrevocably elects that all Units
shall be “securities” governed by Article 8 of the Uniform Commercial Code
as in effect from time to time in the State of Delaware or analogous provisions
in the Uniform Commercial Code in effect in any other jurisdiction. Neither
this Section 2.9 nor Section 2.10 (to the extent it requires that
certificates representing Units bear the first legend stated therein) shall be
amended and any purported amendment to either such provision shall be null and
void.


 


SECTION 2.10
Units Certificated. The Units shall be evidenced by a Unit certificate. Each
such certificate shall bear a legend as set forth in Section 8.2 of the
Securityholders Agreement and also substantially in the following form:


 


This
certificate evidences a Class [A][B][C][D][P] Unit representing an  interest in
Agrilink Holdings LLC and shall be a security within the  meaning of Article 8
of the Uniform Commercial Code.  The interest in Agrilink
Holdings LLC represented by this certificate  is subject to restrictions on
transfer set forth in the Limited  Liability Company Agreement
of Agrilink Holdings LLC dated as of August  19, 2002, as it may be
amended from time to time.


 


ARTICLE III


MANAGEMENT


 


SECTION 3.1
The Management Committee; Delegation of Authority and Duties.


 


(a) Members and Management Committee. The Members shall possess all  rights and
powers as provided in the Act and otherwise by law. Except as  otherwise
expressly provided for herein, the Members hereby consent to  the exercise by
the Management Committee of all such powers and rights  conferred on
them by the Act with respect to the management and control  of the Company.
Notwithstanding the foregoing and except as explicitly  set forth in
this Agreement, if a vote, consent or approval of the  Members is
required by the Act or other applicable law with respect to  any act to be
taken by the Company or matter considered by the Management  Committee, each
Member agrees that it shall be deemed to have consented  to or approved
such act or voted on such matter in accordance with a vote  of the
Management Committee on such act or matter. If a vote, consent or  approval of the
Members is required by this Agreement (whether of all  classes of Units
voting together as a single class or of a single class  or different
classes voting separately as a class), then each such Member  shall have (i) one
vote for each Class B Unit, Class C Unit and/or Class  D Unit held by
such Member and (ii) two votes for each Class A Unit held  by such Member.
Unless otherwise set forth in this Agreement, any vote,  consent or
approval of the Members (whether of all classes of Units  voting together
as a single class or of a single class or different  classes voting


 


14

















 


separately
as a class) required by this Agreement shall require a  majority of the
voting power of the applicable Units. Unless otherwise  set forth in
this Agreement or required by law, the Preferred Units shall  be non-voting.
No Member, in its capacity as a Member, shall have any  power to act
for, sign for or do any act that would bind the Company. The  Members, acting
through the Management Committee, shall devote such time  and effort to
the affairs of the Company as they may deem appropriate for  the oversight of
the management and affairs of the Company. Each Member  acknowledges and
agrees that no Member shall, in its capacity as a  Member, be bound to devote
all of such Member’s business time to the  affairs of the Company, and
that each Member and such Member’s Affiliates  do and will continue to
engage for such Member’s own account and for the  account of others in other
business ventures.


 


(b) Delegation by Management Committee. The Management Committee  shall have the
power and authority to delegate to one or more other  Persons the Management
Committee’s rights and powers to manage and  control the business and
affairs of the Company, including to delegate to  agents and employees of a
Member, a Representative or the Company  (including Officers), and to
delegate by a management agreement or  another agreement with, or
otherwise to, other Persons. The Management  Committee may authorize any
Person (including any Member, Officer or  Representative) to enter into
and perform under any document on behalf of  the Company.


 


(c) Committees. The Management Committee may, from time to time,  designate one or
more committees, each of which shall be comprised of at  least two
Representatives. Any such committee, to the extent provided in  the enabling
resolution and until dissolved by the Management Committee,  shall have and
may exercise any or all of the authority of the Management  Committee. At
every meeting of any such committee, the presence of a  majority of all
the representatives thereof shall constitute a quorum,  and the
affirmative vote of a majority of the representatives present  shall be
necessary for the adoption of any resolution. The Management  Committee may
dissolve any committee at any time, unless otherwise  provided in the Certificate
or this Agreement.


 


SECTION 3.2
Establishment of Management Committee.


 


(a) Representatives. There shall be established a Management  Committee
composed of up to nine (9) Persons all of whom shall be  individuals (“Representatives”)
who shall be elected by a majority vote  of the holders of Common
Units, Class C Units and Class D Units, voting  together as a
single class, and each such Unitholder shall have (i) one  vote for each Class B
Unit, Class C Unit and/or Class D Unit held by such  Unitholder and (ii) two
votes for each Class A Unit held by such  Unitholder. Any
Representative may be removed from the Management  Committee at any time by the
holders of a majority of the total voting  power of the outstanding
Common Units, Class C Units and Class D Units.  Each Representative shall
remain in office until his or her death,  resignation or removal, and
in the event of death, resignation or removal  of a Representative, the
party or parties, as applicable, that designated  such Representative shall
fill the vacancy created.


 


15

















 


(b) Duties. The Representatives, in the performance of their
duties,  shall owe to the Company and the Members duties of loyalty and due care  of the type owed
by the directors of a corporation to such corporation  and its
stockholders under the laws of the State of Delaware; provided  that such
corporation had eliminated, to the fullest extent permitted by  law (as
contemplated by Section 102(b)(7) of the Delaware General  Corporation Law
(“DGCL”)) the personal liability of any person who serves  as a director of
such corporation to the corporation and/or its  stockholders for monetary
damages for breach of fiduciary duty as a  director, provided that it
would not eliminate or limit the liability of  a director: (i) for any
breach of the director’s duty of loyalty to such  corporation or its
stockholders; (ii) for acts or omissions not in good  faith or which
involve intentional misconduct or a knowing violation of  law; (iii) under
Section 174 of the DGCL; or (iv) for any transaction  from which the
director derived an improper personal benefit; provided,  however, that if
in the future the DGCL is amended or modified  (including, but not limited
to, Section 102(a)(7)) to permit the  elimination of the personal
liability of a director of such corporation  to a greater extent than
contemplated above, then the provisions of this  subparagraph shall be deemed
to be automatically amended to provide for  the elimination of the
personal liability of the directors of such  corporation to such greater
extent.


 


(c) Absence. A Representative may, in isolated instances arising  from exigent
circumstances, designate a Person to act as his or her  substitute and
in his or her place at any meeting of the Management  Committee. Such Person shall
have all power of the absent Representative,  and references herein to a “Representative”
at a meeting shall be deemed  to include his or her
substitute. Notwithstanding anything in this  Agreement to the contrary,
Representatives, in their capacities as such,  shall not be deemed to be “members”
or “managers” (as such terms are  defined in the Act) of the
Company; provided that, for the purpose of  clarity and the avoidance of
doubt, nothing contained in this sentence  shall relieve or diminish any
Representative’s duties under Section  3.2(b) hereof.


 


(d) No Individual Authority. No Representative has the authority or  power to act for
or on behalf of the Company, to do any act that would be  binding on the
Company or to make any expenditures or incur any  obligations on behalf of the
Company or authorize any of the foregoing,  other than acts that are
expressly authorized by the Management  Committee.


 


(e) Conflict. Each provision of this Section 3.2 is subject to
the  terms and provisions of the Securityholders Agreement, and to the extent  any such
provisions apply, they are then to be construed as being  incorporated in
this Agreement and made a part hereof.


 


SECTION 3.3
Management Committee Meetings.


 


(a) Quorum. A majority of the total number of Representatives shall  constitute a
quorum for the transaction of business of the Management  Committee and,
except as otherwise provided in this Agreement, the act of  a majority of
the Representatives present at a meeting of the Management  Committee at
which a quorum is


 


16

















 


present
shall be the act of the Management Committee. A Representative  who is present
at a meeting of the Management Committee at which action  on any matter is
taken shall be presumed to have assented to the action  unless his
dissent shall be entered in the minutes of the meeting or  unless he shall
file his written dissent to such action with the Person  acting as
secretary of the meeting before the adjournment thereof or  shall deliver
such dissent to the Company immediately after the  adjournment of the meeting.
Such right to dissent shall not apply to a  Representative who voted in
favor of such action.


 


(b) Place, Waiver of Notice. Meetings of the Management Committee  may be held at
such place or places as shall be determined from time to  time by
resolution of the Management Committee. At all meetings of the  Management
Committee, business shall be transacted in such order as shall  from time to
time be determined by resolution of the Management  Committee. Attendance of a
Representative at a meeting shall constitute a  waiver of notice of such
meeting, except where a Representative attends a  meeting for the express
purpose of objecting to the transaction of any  business on the ground that
the meeting is not lawfully called or  convened.


 


(c) Regular Meetings. Regular meetings of the Management Committee  shall be held at
the same time (or immediately following) the regular  meetings of the board of
directors of Agrilink Holdings. Notice of such  meetings shall not be
required.


 


(d) Special Meetings. Special meetings of the Management Committee  may be called on
at least 24 hours notice to each Representative by any  two
Representatives. Such notice need not state the purpose or purposes  of, nor the
business to be transacted at, such meeting, except as may  otherwise be
required by law or provided for in this Agreement.


 


(e) Notice. Notice of any special meeting of the Management  Committee or
other committee may be given personally, by mail, facsimile,  courier or other
means and, if other than personally, shall be deemed  given when written notice is
delivered to the office of the  Representative at the address
of the Representative in the books and  records of the Company.


 


SECTION 3.4
Chairman. The Management Committee shall designate a Representative to serve as
chairman. The chairman shall preside at all meetings of the Management
Committee. If the chairman is absent at any meeting of the Management
Committee, a majority of the Representatives present shall designate another
Representative to serve as interim chairman for that meeting. The chairman
shall have no independent authority or power to act for or on behalf of the
Company, to do any act that would be binding on the Company or to make any
expenditure or incur any obligations on behalf of the Company or authorize any
of the foregoing.


 


SECTION 3.5
Approval or Ratification of Acts or Contracts. Any act or contract that shall
be approved or be ratified by the Management Committee shall be as valid and as
binding upon the Company and upon all the Members (in their capacity as
Members) as if it shall have been approved or ratified by every Member of the
Company.


 


17

















 


SECTION 3.6
Action by Written Consent or Telephone Conference. Any action permitted or
required by the Act, the Certificate or this Agreement to be taken at a meeting
of the Management Committee or any committee designated by the Management
Committee may be taken without a meeting if a consent in writing, setting forth
the action to be taken, is signed by a majority of the Representatives or
representatives of such other committee, as the case may be. Such consent shall
have the same force and effect as a vote at a meeting and may be stated as such
in any document or instrument filed with the Secretary of State of the State of
Delaware, and the execution of such consent shall constitute attendance or
presence in person at a meeting of the Management Committee or any such other
committee, as the case may be. Subject to the requirements of this Agreement
for notice of meetings, the Representatives, or representatives of any other
committee designated by the Management Committee, may participate in and hold a
meeting of the Management Committee or any such other committee, as the case
may be, by means of a conference telephone or similar communications equipment
by means of which all Persons participating in the meeting can hear each other,
and participation in such meeting shall constitute attendance and presence in
person at such meeting, except where a Person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.


 


SECTION 3.7
Officers.


 


(a) Designation and Appointment. The Management Committee may, from  time to time,
employ and retain Persons as may be necessary or  appropriate for the conduct
of the Company’s business (subject to the  supervision and control of
the Management Committee), including  employees, agents and other
Persons (any of whom may be a Member or  Representative) who may be
designated as Officers of the Company, with  such titles as and to the
extent authorized by the Management Committee.  Any number of offices may be
held by the same Person. In its discretion,  the Management Committee may
choose not to fill any office for any period  as it may deem advisable.
Officers need not be residents of the State of  Delaware or Members. Any
Officers so designated shall have such authority  and perform such duties as
the Management Committee may, from time to  time, delegate to them. The
Management Committee may assign titles to  particular Officers. Each
Officer shall hold office until his successor  shall be duly designated and
shall qualify or until his death or until he  shall resign or shall have
been removed in the manner hereinafter  provided. The salaries or
other compensation, if any, of the Officers of  the Company shall be fixed
from time to time by the Management Committee.


 


(b) Resignation/Removal. Any Officer may resign as such at any
time.  Such resignation shall be
made in writing and shall take effect at the  time specified therein, or if
no time is specified, at the time of its  receipt by the Management
Committee. The acceptance of a resignation  shall not be necessary to
make it effective, unless expressly so provided  in the resignation. Any
Officer may be removed as such, either with or  without cause at any time by
the Management Committee. Designation of an  Officer shall not of itself
create any contractual or employment rights.


 


(c) Duties of Officers Generally. The Officers, in the performance  of their duties
as such, shall owe to the Company duties of loyalty and  due care of the
type


 


18

















 


owed
by the officers of a corporation to such corporation and its  stockholders
under the laws of the State of Delaware.


 


SECTION 3.8
Management Matters.


 


(a) Transfer of Property. All property owned by the Company shall
be  registered in the Company’s name, in the name of a nominee or in “street  name” as the
Management Committee may from time to time determine. Any  corporation,
brokerage firm or transfer agent called upon to transfer any  Securities to or
from the name of the Company shall be entitled to rely  on instructions
or assignments signed or purported to be signed by any  Officer or
Representative without inquiry as to the authority of the  Person signing
or purporting to sign such instructions or assignments or  as to the
validity of any transfer to or from the name of the Company. At  the time of any
such transfer, any such corporation, brokerage firm or  transfer agent
shall be entitled to assume that (i) the Company is then  in existence and
(ii) that this Agreement is in full force and effect and  has not been
amended, in each case unless such corporation, brokerage  firm or transfer
agent shall have received written notice to the  contrary.


 


(b) Existence and Good Standing. The Management Committee may take  all action which
may be necessary or appropriate (i) for the continuation  of the Company’s
valid existence as a limited liability company under the  laws of the
State of Delaware (and of each other jurisdiction in which  such existence
is necessary to enable the Company to conduct the business  in which it is
engaged) and (ii) for the maintenance, preservation and  operation of the
business of the Company in accordance with the  provisions of this Agreement
and applicable laws and regulations. The  Management Committee may file
or cause to be filed for recordation in the  office of the appropriate
authorities of the State of Delaware, and in  the proper office or offices
in each other jurisdiction in which the  Company is formed or
qualified, such certificates (including certificates  of limited liability
companies and fictitious name certificates) and  other documents as are
required by the applicable statutes, rules or  regulations of any such
jurisdiction or as are required to reflect the  identity of the Members and
the amounts of their respective capital  contributions.


 


(c) Investment Company Act. The Management Committee shall use its  best efforts to
assure that the Company shall not be subject to  registration as an investment
company pursuant to the Investment Company  Act of 1940, as amended.


 


SECTION 3.9
Preferred Voting Provisions. The approval of the holders of at least a majority
of the outstanding Preferred Units shall be required for any action which (i) alters
or changes the rights, preferences or privileges of the Preferred Units, (ii) creates
any new class of units having a preference over or on parity with the Preferred
Units, (iii) reclassifies units into units having a preference over or on
parity with the Preferred Units, (iv) authorizes any distribution with
respect to units ranking junior to the Preferred Units (other than tax
distributions pursuant to Section 4.4(c)), (v) effects any redemption
or repurchase of any units of the Company (other than pursuant to the Call
Option), or (vi) increases the authorized number of Preferred Units;
provided, however, that the consent of a majority of the Representatives shall
also be required for any action that alters or changes the rights, preferences
or privileges of the


 


19

















 


Preferred Units in a manner
that would have a material adverse effect on the holders of Common Units, Class C
Units and Class D Units as holders of such units.


 


SECTION 3.10
Securities in Agrilink. The Company shall vote all of the securities it holds
in Agrilink, Agrilink Holdings and any other direct or indirect subsidiary of
the Company as directed by the Management Committee, or as required by the
Securityholders Agreement.


 


SECTION 3.11
Liability of Unitholders.


 


(a) No Personal Liability. Except as otherwise required by  applicable law
and as expressly set forth in this Agreement, no  Unitholder shall have any
personal liability whatsoever in such Person’s  capacity as a Unitholder,
whether to the Company, to any of the other  Unitholders, to the creditors
of the Company or to any other third party,  for the debts, liabilities,
commitments or any other obligations of the  Company or for any losses of
the Company. Each Unitholder shall be liable  only to make such Unitholder’s
Initial Capital Contribution to the  Company, if applicable, and
the other payments provided expressly herein.


 


(b) Return of Distributions. In accordance with the Act and the
laws  of the State of Delaware, a member of a limited liability company may,  under certain
circumstances, be required to return amounts previously  distributed to
such member. It is the intent of the Members that no  distribution to any Member
pursuant to Article V hereof shall be deemed a  return of money or other
property paid or distributed in violation of the  Act. The payment of any such
money or distribution of any such property  to a Member shall be deemed
to be a compromise within the meaning of the  Act, and the Member receiving
any such money or property shall not be  required to return to any
Person any such money or property. However, if  any court of competent
jurisdiction holds that, notwithstanding the  provisions of this Agreement,
any Member is obligated to make any such  payment, such obligation
shall be the obligation of such Member and not  of any Representative or
other Member.


 


SECTION 3.12
Indemnification by the Company. Subject to the limitations and conditions
provided in this Section 3.12, each Person who was or is made a party or
is threatened to be made a party to or is involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or arbitrative (hereinafter a “Proceeding”), or any appeal in
such a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that he, she, or it, or a Person of which he,
she or it is the legal representative, is or was a Unitholder, Officer or
Representative shall be indemnified by the Company to the fullest extent
permitted by applicable law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than said law
permitted the Company to provide prior to such amendment) against all
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including reasonable attorneys’
fees and expenses) actually incurred by such Person in connection with such
Proceeding, appeal, inquiry or investigation if such Person acted in Good
Faith, and indemnification under this Section 3.12 shall continue as to a
Person who has ceased


 


20














 


to serve in the capacity
which initially entitled such Person to indemnity hereunder. The rights granted
pursuant to this Section 3.12 shall be deemed contract rights, and no
amendment, modification or repeal of this Section 3.12 shall have the
effect of limiting or denying any such rights with respect to actions taken or
Proceedings, appeals, inquiries or investigations arising prior to any
amendment, modification or repeal. It is expressly acknowledged that the
indemnification provided in this Section 3.12 could involve
indemnification for negligence or under theories of strict liability. “Good
Faith” shall mean a Person having acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to a criminal proceeding, having had no reasonable
cause to believe such Person’s conduct was unlawful.


 


SECTION 3.13
Investment Representations of Unitholders. Each Unitholder hereby represents,
warrants and acknowledges to the Company that: (i) such Unitholder has
such knowledge and experience in financial and business matters and is capable
of evaluating the merits and risks of an investment in the Company and is
making an informed investment decision with respect thereto; (ii) such Unitholder
is acquiring interests in the Company for investment only and not with a view
to, or for resale in connection with, any distribution to the public or public
offering thereof and (iii) the execution, delivery and performance of this
Agreement have been duly authorized by such Unitholder.


 


ARTICLE IV


CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS


 


SECTION 4.1
Capital Contributions. The Members listed on Schedule A hereto have made
initial Capital Contributions to the Company in the amounts and of the type set
forth in Exhibit I hereto (with respect to each Member, an “Initial
Capital Contribution”).


 


SECTION 4.2
Capital Accounts.


 


(a) Creation. There shall be established for each Unitholder on the
books of the Company a Capital Account which shall be increased or decreased in
the manner set forth in this Agreement.


 


(b) Negative Balance. A Unitholder shall not have any obligation to
the Company or to any other Unitholder to restore any negative balance in the
Capital Account of such Unitholder.


 


SECTION 4.3
Allocations of Net Income and Net Loss.


 


(a) Timing and Amount of Allocations of Net Income and Net Loss.
Net Income and Net Loss of the Company shall be determined and allocated with
respect to each fiscal year of the Company as of the end of each such year or
as circumstances otherwise require or allow. Subject to the other provisions of
this Section 4.3, an allocation to a Unitholder of a share of Net Income
or Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.


 


21

















 


(b) General Allocations.


 


(i) Net Income and Net Loss. After giving effect to the special  allocations
provided in Sections 4.3(c) and 4.3(d), and except as provided in Section 4.3(f),
all Net Income and Net Loss of the Company for a fiscal year shall be allocated
to the Unitholders as follows:


 


(A) first, Net Income will be allocated to the Unitholders having
deficit balances in their Capital Accounts (computed after giving effect to all
contributions, distributions, allocations and other Capital Account adjustments
for all taxable years (other than the items comprising the Net Income or Net
Loss of the Company being allocated to the Unitholders for the current fiscal
year), after adding back each Unitholder’s share of Company Minimum Gain and Member
Minimum Gain as provided in Regulations Sections 1.704-2(g) and 1.704-2(i)(5)),
to the extent of, and in proportion to, those deficits, unless satisfied by
allocations under Section 4.3(c) hereof; and


 


(B) second, Net Income and Net Loss not allocated under Section 4.3(b)(i)(A) will
be allocated so as to cause the credit balance in each Unitholder’s Capital
Account (computed in the same manner as provided parenthetically in Section 4.3(b)(i)(A) hereof)
to equal, as nearly as possible, the amount such Unitholder would receive if
the Company sold all of its assets for the Gross Asset Value of each such asset
and distributed the proceeds thereof (after satisfaction of any liabilities of
the Company) in accordance with the provisions of Section 4.4 hereof.


 


(c) Additional Allocation Provisions. Notwithstanding the foregoing  provisions of
this Section 4.3:


 


(i)


 


(A) If there is a net decrease in Company Minimum Gain or Member
Minimum Gain during any fiscal year, the Unitholders shall be allocated items
of Company income and gain for such fiscal year (and, if necessary, for
subsequent fiscal years) in accordance with Regulations Section 1.704-2(f) or
1.704-2(i)(4), as applicable. It is intended that this Section 4.3(c)(i)(A) qualify
and be construed as a “minimum gain chargeback” and a “chargeback of partner nonrecourse
debt minimum gain” within the meaning of such Regulations, which shall be
controlling in the event of a conflict between such Regulations and this Section 4.3(c)(i)(A).


 


(B) Any Nonrecourse Deductions for any fiscal year shall be specially
allocated to the holders of Preferred Units in accordance with the number of Preferred
Units held by each such Unitholder. Any


 


22

















 


Member
Nonrecourse Deductions for any fiscal year shall be specially allocated to the
Unitholder(s) who bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable, in accordance with Regulations Section 1.704-2(i).


 


(C) If any Unitholder unexpectedly receives an adjustment, allocation
or distribution described in Regulations Section 1.704-  1(b)(2)(ii)(d)(4),
(5) or (6), items of Company income and gain shall be allocated, in
accordance with Regulations Section 1.704-1(b)(2)(ii) (d), to the
Unitholder in an amount and manner sufficient to eliminate, to the extent
permitted by such Regulations, the Adjusted Capital Account Deficit of the
Unitholder as quickly as possible. It is intended that this Section 4.3(c)(i)(C) qualify
and be construed as a “qualified income offset” within the meaning of
Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict
between such Regulations and this Section 4.3(c)(i)(C).


 


(D) The allocations set forth in Sections 4.3(c)(i)(A), (B) and (C) (the
“Regulatory Allocations”) are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 4.3(b), the Regulatory
Allocations shall be taken into account in allocating other items of income,
gain, loss and deduction among the Unitholders so that, to the extent possible,
the net amount of such allocations of other items and the Regulatory
Allocations to each Unitholder shall be equal to the net amount that would have
been allocated to each such Unitholder if the Regulatory Allocations had not
occurred.


 


(ii) For any fiscal year during which a Unitholder’s interest in the
Company is assigned by such Unitholder, the portion of the Net Income and Net
Loss of the Company that is allocable in respect of such Unitholder’s interest shall
be apportioned between the assignor and the assignee of such Unitholder’s
interest using any permissible method under Code Section 706 and the
Regulations thereunder, as determined by the Management Committee.


 


(iii) In the event that any amount claimed by the Company to constitute
a deductible expense in any fiscal year is treated for federal income tax
purposes as a distribution made to a Unitholder in its capacity as a partner of
the Company and not a payment to a Unitholder not acting in its capacity as a
partner under Code Section 707(a), then the Unitholder who is deemed to have
received such distribution shall first be allocated an amount of Company gross
income equal to such payment, its Capital Account shall be reduced to reflect the
distribution, and for purposes of Section 4.3, Net Income and Net Loss
shall be determined after making the allocation required by this Section 4.3(c)(iii).


 


23

















 


(iv) In the event that any amount claimed by the Company to constitute
a distribution made to a Unitholder in its capacity as a partner of the Company
is treated for federal income tax purposes as a deductible expense of the
Company for a payment to a Unitholder not acting in its capacity as a partner
of the Company, then the Unitholder who is deemed to have received such payment
shall first be allocated the Company expense item attributable to such payment,
its Capital Account shall be reduced to reflect the allocation, and for
purposes of Section 4.3, Net Income and Net Loss shall be determined after
making the allocation required by this Section 4.3(c)(iv).


 


(d) Required Tax Allocations. All items of income, gain, loss,
deduction and credit for federal income tax purposes shall be allocated to each
Unitholder in the same manner as the Net Income or Net Loss (and each item of
income, gain, loss and deduction related thereto) that is allocated to such
Unitholder pursuant to Section 4.3(a), (b) and (c) to which such tax items
relate. Notwithstanding the foregoing provisions of this Section 4.3,
income, gain, loss, deduction, and credits with respect to property contributed
to the Company by a Unitholder shall be allocated among the Unitholders for
federal and state income tax purposes pursuant to Regulations promulgated under
Section 704(c) of the Code, so as to take account of the variation,
if any, between the adjusted basis for federal income tax purposes of the
property to the Company and its initial Gross Asset Value at the time of
contribution. In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraph (b), (c), or (d) of the definition of
Gross Asset Value, subsequent allocations of income, gain, loss, deduction, and
credits with respect to such asset shall take account of the variation, if any,
between the adjusted basis of such asset for federal income tax purposes and
its Gross Asset Value in the same manner as under Code Section 704(c) and
the applicable Regulations consistent with the requirements of Treasury
Regulation Section 1.704- 1(b)(2)(iv)(g). Allocations pursuant to this Section 4.3(d) are
solely for purposes of federal, state and local income taxes and shall not
affect, or in any way be taken into account in computing, any Unitholder’s
Capital Account or share of Net  Income, Net Loss, other tax
items or distributions pursuant to any provision of this Agreement.


 


(e) Unitholders’ Tax Reporting. The Unitholders acknowledge and are
aware of the income tax consequences of the allocations made by this Section 4.3
and, except as may otherwise be required by applicable law or regulatory
requirements, hereby agree to be bound by the provisions of Section 4.3 in
reporting their shares of Company income, gain, loss, deductions, and credits
for federal, state and local income tax purposes.


 


(f) Withholding. Each Unitholder hereby authorizes the Company to  withhold and to
pay over any taxes payable by the Company or any of its Affiliates as a result
of the participation by such Unitholder (or any Assignee of, or Successor in
Interest to, such Unitholder) in the Company. If and to the extent that the
Company shall be required to  withhold any taxes, such
Unitholder shall be deemed for all purposes of this Agreement to have received
a payment from the Company as of the time such withholding is required to be
paid, which payment shall be deemed to be a distribution to such Unitholder
under Section 4.4(a) or Section 5.2 to the extent that the
Unitholder is


 


24

















 


entitled
to receive a distribution and shall be taken into account in determining the
amount of future distributions to such Unitholder. To the extent that the
aggregate of such payments to a Unitholder for any period exceeds the
distributions to which such Unitholder is entitled for such period, the amount
of such excess shall be considered a demand loan from the Company to such
Unitholder, with interest at an interest rate of 9%  compounded annually, which
interest shall be treated as an item of Company income until discharged by such
Unitholder by repayment, which may be made in the sole discretion of the
Management Committee out of distributions to which such Unitholder would
otherwise be subsequently entitled. The withholdings referred to in this Section 4.3
shall be made at the maximum applicable statutory rate under applicable tax law
unless the Management Committee receives documentation, satisfactory to the
Management Committee, to the effect that a lower rate is applicable, or that no
withholding is applicable.


 


SECTION 4.4
Distributions.


 


(a) Priority. Distributable Assets (or such other assets of the
Company) will be distributed (or set aside for the benefit of the applicable
Unitholder in the discretion of the Management Committee) at such times as
determined by the Management Committee, subject to Sections 4.4(b), (c) and
(d), as follows:


 


(i) First, 100% of the Distributable Assets shall be distributed to
the Preferred Unitholders, pro rata in accordance with the aggregate amount of
such Unitholders’ Current Preferred Return, until each such Unitholder’s
Current Preferred Return has been reduced to zero (plus any premium payable
pursuant to Section 5.6(b), if applicable) (provided that any amount under
this subparagraph (i) shall be distributed only out of Net Income);


 


(ii) Second, after the required distributions pursuant to subparagraph
(i) above, 100% of the Distributable Assets shall be distributed to the
Preferred Unitholders (1) pro rata in accordance with each such Unitholder’s
Unpaid Preferred Return, until each such Unitholder’s Unpaid Preferred Return
has been reduced to zero (provided that any amount under this subparagraph (ii)(1) shall
be distributed only out of Net Income) and (2) pro rata in accordance with each
such Unitholder’s Unreturned Preferred Capital, until each such Unitholder’s Unreturned
Preferred Capital has been reduced to zero (plus, in the case of both (1) and
(2), any premium payable pursuant to Section 5.6(b), if applicable);
provided that, without the consent of the Preferred Unitholders holding at
least a majority of the Preferred Units, no distributions shall be made under
this subsection (ii) (or, therefore, under subsections (iii) or (iv))
prior to the third anniversary of the date of this Agreement;


 


(iii) Third, after the required distributions pursuant to subparagraph
(ii) above, 100% of the Distributable Assets shall be distributed to the
Common Unitholders and the Class C Unitholders, pro rata in accordance
with each such Unitholder’s Unreturned Common Capital, until each such
Unitholder’s Unreturned Common Capital has been reduced to zero;


 


25

















 


(iv) Fourth, after the required distributions pursuant to subparagraph
(iii) above, all remaining distributions shall be made as follows:


 


(A) until the First Performance Hurdle has been satisfied, 100% of
the Distributable Assets shall be distributed as follows:


 


(1) 96.0000% to the Common Unitholders, pro rata in accordance with
the number of Common Units held by each such Unitholder;


 


(2) (i) a percentage, equal to the product of (x) 2.0000%
multiplied by (y) the Class C Fraction, to the Class C Unitholders,
pro rata in accordance with the number of Class C Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 2.0000%
multiplied by (y) one minus the Class C Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder; and


 


(3) (i) a percentage, equal to the product of (x) 2.0000%
multiplied by (y) the Class D Fraction, to the Class D Unitholders,
pro rata in accordance with the number of Class D Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 2.0000%
multiplied by (y) one minus the Class D Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder;


 


(B) after the First Performance Hurdle has been satisfied, and until
the Second Performance Hurdle has been satisfied, 100% of the Distributable
Assets shall be distributed first to the Class D Unitholders until such
Unitholders have received under subsection (iv)(A) above and this
paragraph of subsection (iv)(B) an amount of all distributions made under
subsection (iv)(A) and this paragraph of subsection (iv)(B) equal to
4.0417% multiplied by the Class D Fraction, and thereafter as follows:


 


(1) 94.0000% to the Common Unitholders, pro rata in accordance with
the number of Common Units held by each such Unitholder;


 


(2) (i) a percentage, equal to the product of (x) 1.9583%
multiplied by (y) the Class C Fraction, to the Class C Unitholders,
pro rata in accordance with the number of Class C Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 1.9583%
multiplied by (y) one minus the Class C Fraction, to the Common
Unitholders and Class C Unitholders, pro rata


 


26

















 


in
accordance with the number of Common Units and Class C Units held by each
such Unitholder; and


 


(3) (i) a percentage, equal to the product of (x) 4.0417%
multiplied by (y) the Class D Fraction, to the Class D Unitholders,
pro rata in accordance with the number of Class D Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 4.0417%
multiplied by (y) one minus the Class D Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder;


 


(C) after the Second Performance Hurdle has been satisfied, and
until the Third Performance Hurdle has been satisfied, 100% of the
Distributable Assets shall be distributed first to the Class D Unitholders
until such Unitholders have received under subsections (iv)(A) and (B) above
and this paragraph of subsection (iv)(C) an amount of all distributions
made under subsections (iv)(A) and (B) and this paragraph of subsection
(iv)(C) equal to 6.0833% multiplied by the Class D Fraction, and
thereafter as follows:


 


(1) 92.0000% to the Common Unitholders, pro rata in accordance with
the number of Common Units held by each such Unitholder;


 


(2) (i) a percentage, equal to the product of (x) 1.9167%
multiplied by (y) the Class C Fraction, to the Class C Unitholders,
pro rata in accordance with the number of Class C Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 1.9167%
multiplied by (y) one minus the Class C Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder; and


 


(3) (i) a percentage, equal to the product of (x) 6.0833%
multiplied by (y) the Class D Fraction, to the Class D Unitholders,
pro rata in accordance with the number of Class D Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 6.0833%
multiplied by (y) one minus the Class D Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder; and


 


(D) after the Third Performance Hurdle has been satisfied, 100% of
the Distributable Assets shall be distributed first to the Class D
Unitholders until such Unitholders have received under subsections (iv)(A), (B)
and (C) above and this paragraph of subsection


 


27

















 


(iv)(D)
an amount of all distributions made under subsections (iv)(A), (B) and (C) and
this paragraph of subsection (iv)(D) equal to 8.1250% multiplied by the Class D
Fraction, and thereafter as follows:


 


(1) 90.0000% to the Common Unitholders, pro rata in accordance with
the number of Common Units held by each such Unitholder;


 


(2) (i) a percentage, equal to the product of (x) 1.8750%
multiplied by (y) the Class C Fraction, to the Class C Unitholders,
pro rata in accordance with the number of Class C Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 1.8750%
multiplied by (y) one minus the Class C Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder; and


 


(3) (i) a percentage, equal to the product of (x) 8.1250%
multiplied by (y) the Class D Fraction, to the Class D Unitholders,
pro rata in accordance with the number of Class D Units held by each such
Unitholder, and (ii) a percentage, if any, equal to the product of (x) 8.1250%
multiplied by (y) one minus the Class D Fraction, to the Common
Unitholders and Class C Unitholders, pro rata in accordance with the
number of Common Units and Class C Units held by each such Unitholder;


 


provided that, if the
Distributable Assets being distributed consist of more than one kind of asset,
all Distributable Assets consisting of cash must be distributed before any
other kind of asset is distributed, unless the Management Committee otherwise
determines.


 


(b) Successors. For purposes of determining the amount of
distributions under this Section 4.4, each Unitholder shall be treated as
having received amounts received by its predecessors in respect of any of such
Unitholder’s Units.


 


(c) Tax Distributions. Subject to the Act and to any restrictions
contained in any agreement to which the Company is bound and notwithstanding
the provisions of Section 4.4(a), no later than the tenth day of each
March, June, September and December, the Company shall, to the extent of
available cash, make a tax distribution to each Unitholder in an amount equal
to the excess of (i) the product of (A) the cumulative taxable income
(including any guaranteed payments for services that are not actually received
by such Unitholder in cash) attributable to the Unitholder’s investment as
reported on the Unitholder’s Schedule K-1  allocated by the Company to
the Unitholder, in excess of the federal  taxable loss carryforward
deduction arising from such Unitholder’s  investment in the Company
(assuming that such carryforward was not  applied against any
non-Company income of such Unitholder) to the extent  that such loss carry forward
deduction would be available to offset such  taxable income of a
Unitholder from its investment in the Company and (B) the combined maximum
federal, state and


 


28

















 


local
marginal income tax rate (taking into account the deductibility of  state and local
taxes and adjusted appropriately for varying rates) applicable to individuals,
over (ii) all prior distributions pursuant to  this Section 4.4. All
distributions made to a Unitholder pursuant to this  Section 4.4(c) on
account of the taxable income allocated to such  Unitholder shall be treated
as advance distributions under Section 4.4(a) or Section 5.2 and shall
be taken into account in determining the amount  of future distributions to
such Unitholder. For purposes of determining  the amount of distributions
to be made to the Unitholders pursuant to  Section 4.4(a) or Section 5.2,
distributions made pursuant to this  Section 4.4(c) shall
be deemed made at such time as they offset  distributions being made
pursuant to Section 4.4(a) or Section 5.2.


 


(d) Subject to any restrictions contained in any financing
arrangements of the Company or any of its subsidiaries, after August 19,
2007 and prior to a Sale of the Company, the Company shall use  commercially
reasonable efforts to cause Agrilink to distribute annually  to Agrilink
Holdings, and Agrilink Holdings to distribute to the Company, up to $24.8
million of cash flow from operations of Agrilink. To the  extent the
Company receives all or any portion of such amount, the  Company will,
notwithstanding the preferences established by Section  4.4(a),
distribute the amount so received in the manner described in  Section 4.4(a)(iv)(A) to
the holders of the Common Units, Class C Units  and Class D Units.


 


SECTION 4.5
Security Interest and Right of Set-Off. As security for any withholding tax or
other liability or obligation to which the Company may be subject as a result
of any act or status of any Unitholder, or to which the Company may become
subject with respect to the interest of any Unitholder, the Company shall have
(and each Unitholder hereby grants to the Company) a security interest in all
Distributable Assets distributable to such Unitholder to the extent of the
amount of such withholding tax or other liability or obligation. The Company
shall have a right of setoff against such distributions of Distributable Assets
in the amount of such withholding tax or other liability or obligation. The
Company may withhold distributions or portions thereof if it is required to do
so by the Code or any other provision of federal, state or local tax or other
law. Any amount withheld pursuant to the Code or any other provision of federal,
state or local tax or other law with respect to any distribution to a
Unitholder shall be treated as an amount distributed to such Unitholder for all
purposes under this Agreement.


 


ARTICLE V


WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;


ADMISSION OF NEW MEMBERS


 


SECTION 5.1
Unitholder Withdrawal. No Unitholder shall have the power or right to withdraw
or otherwise resign or be expelled from the Company prior to the dissolution
and winding up of the Company except pursuant to a transfer permitted under
this Agreement of all of such Unitholder’s Units to an Assignee, a Member or
the Company. Notwithstanding anything to the contrary contained in the Act, in
no event shall any Unitholder be deemed to have withdrawn from the Company or
cease to be a Unitholder upon the occurrence of any of the events specified in
this Agreement, or any events similar thereto, unless the Unitholder, after the


 


29

















 


occurrence of any such event,
indicates in a written instrument that the Unitholder has so withdrawn.


 


SECTION 5.2
Dissolution.


 


(a) Events. The Company shall be dissolved and its affairs shall be  wound up on the
first to occur of the following:


 


(i) the unanimous vote of the Management Committee;


 


(ii) (a) the written consent of the Members holding a majority
of the outstanding Preferred Units, and (b) the written consent of the Members
holding a majority of the total voting power of the outstanding Common Units;


 


(iii) the entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act;


 


(iv) with the consent of a majority of the Management Committee, (a) upon
consummation of a Sale of the Company, (b) upon consummation of a Public
Offering (as defined in the Securityholders Agreement) by Agrilink Holdings or
Agrilink or (c) upon consummation of a merger or consolidation pursuant to
which the Company is not the surviving entity;  and


 


(v) upon the liquidation, dissolution or winding up of Agrilink Holdings.


 


Except as provided in this Agreement,
the death, retirement, resignation, expulsion, incapacity, bankruptcy or
dissolution of a Member, or the occurrence of any other event that terminates
the continued membership of a Member in the Company, shall not cause a
dissolution of the Company, and the Company shall continue in existence subject
to the terms and conditions of this Agreement.


 


(b) Actions Upon Dissolution. When the Company is dissolved, the
business and property of the Company shall be wound up and liquidated by  the Management Committee
or, in the event of the unavailability of the  Management Committee, such
Member or other liquidating trustee as shall  be named by the Management
Committee.


 


(c) Priority. Within 120 calendar days after the effective date of  dissolution of
the Company, whether by expiration of its full term or  otherwise, the
assets of the Company shall be distributed in the  following manner and order:


 


(i) All debts and obligations of the Company, if any, shall  first be paid,
discharged or provided for by adequate reserves; and


 


(ii) The balance shall be distributed to the Unitholders in accordance
with Section 4.4.


 


30














 


(d) Cancellation of Certificate. On completion of the distribution of
Company assets as provided herein, the Company is terminated, and shall file a
certificate of cancellation with the Secretary of State of the State of
Delaware, cancel any other filings made and take such other actions as may be
necessary to terminate the Company.


 


SECTION 5.3
Transfer by Unitholders. Subject to the Securityholders Agreement and this
Agreement, a Unitholder may transfer or assign all or part of its interest as a
Unitholder in the Company to any Person that agrees in writing to assume the
responsibility of a Unitholder. Any Member who shall assign any Units in the
Company shall cease to be a Member of the Company with respect to such Units
and shall no longer have any rights or privileges of a Member with respect to
such Units. Any Member or Assignee who acquires in any manner whatsoever any
Units, irrespective of whether such Person has accepted and adopted in writing
the terms and provisions of this Agreement, shall be deemed by the acceptance
of the benefits of the acquisition thereof to have agreed to be subject to and
bound by all of the terms and conditions of this Agreement that any predecessor
in such Units or other interest in the Company was subject to or by which such
predecessor was bound. No Member shall cease to be a Member upon the collateral
assignment of, or the pledging or granting of a security interest in, its
entire interest in the Company. Other than pursuant to an Exempt Transfer (as
such term is defined in the Securityholders Agreement), if, under the
Securityholders Agreement, a Class C Unitholder or Class D Unitholder
is permitted or required to transfer any Class C Units or Class D
Units, respectively, to a third party in exchange for consideration (other than
in a Sale of the Company), then, at the election of any such Unitholder
participating in such transfer, the Company will take all actions necessary to
convert such Class C Units and/or Class D Units into Class B
Units (or other appropriate type of security) to permit such Unitholder to
participate in the transfer. The number of Class C Units and/or Class D
Units which may be so converted shall be determined in good faith by the
Management Committee to allow such Unitholders to participate in the transfer
proportionately to the other Unitholders participating therein, and the number
of Class B Units (or other securities) into which such Units will be so
converted shall be determined in good faith by the Management Committee based
upon the relative value of the Class C Units or Class D Units, as the
case may be, compared to the Class B Units or other security into which
they are being converted. Such valuation shall be based upon the amount that
would be distributable to the Class C Units or Class D Units, as the
case may be, if the Company were to be liquidated and its assets had a fair
market value equal to the value that is derived from the value to be paid for
the other Units to be transferred to the third party (but assuming that no
performance hurdles are then met). If any Class C Units or Class D
Units are so converted, the Management Committee will, without any Member
consent or other action required, amend the distribution provisions in Section 4.4
accordingly to take into account the proportional change in outstanding classes
of Units and their relative allocation of distributions under Section 4.4(a)(iv).


 


SECTION 5.4
Admission or Substitution of New Members.


 


(a) Admission. The Management Committee shall have the right, subject
to Section 5.3, to admit as a Substitute Member or an Additional Member,
any Person who acquires an interest in the Company, or any part thereof, from a
Member or from the Company; provided that, the Management Committee shall admit
as a Substitute


 


31

















 


Member,
subject to Section 5.4(b), any transferee who acquires an interest in the
Company pursuant to an Exempt Transfer (as such term is defined in the
Securityholders Agreement). Concurrently with the admission of a Substitute
Member or an Additional Member, the Management Committee shall forthwith cause
any necessary papers to be filed and recorded and notice to be given wherever
and to the extent required showing the substitution of a transferee as a
Substitute Member in place of the transferring Member, or the admission of an
Additional Member, all at the expense, including payment of any professional
and filing fees incurred, of the Substitute Member or the Additional Member.


 


(b) Conditions. The admission of any Person as a Substitute or Additional
Member shall be conditioned upon (i) such Person’s written acceptance and
adoption of all the terms and provisions of this Agreement, either by (X) execution
and delivery of a counterpart signature page to this Agreement countersigned
by a Representative on behalf of the Company or (Y) any other writing
evidencing the intent of such Person to become a Substitute Member or
Additional Member and such writing is accepted by the Management Committee on
behalf of the Company and (ii) (at the request of the Management
Committee) such Person’s execution and delivery of a counterpart to the
Securityholders Agreement.


 


SECTION 5.5
Compliance with Law. Notwithstanding any provision hereof to the contrary, no
sale or other disposition of an interest in the Company may be made except in
compliance with all federal, state and other applicable laws, including federal
and state securities laws. Nothing in this Section 5.5 shall be construed
to limit or otherwise affect any of the provisions of the Securityholders
Agreement or the Management Unit Subscription Agreements, and to the extent any
such provisions apply, they are then to be construed as being incorporated in
this Agreement and made a part hereof.


 


SECTION 5.6
Redemption of Preferred Units.


 


(a) Mandatory Redemption. Preferred Unitholders holding at least a majority
of the Preferred Units, by written notice to the Company, shall have the right
to require the Company to redeem (by means of making distributions pursuant to Section 4.4)
such Unitholders’ Preferred Units for an amount in cash equal to such
Unitholders’ Unreturned Preferred Capital plus Unpaid Preferred Return
(collectively, the “Redemption Amount”) (i) upon the occurrence of the
initial public offering of the Company’s, Agrilink Holdings’ or Agrilink’s
capital stock, (ii) at the time of a Sale of the Company, and (iii) at
any time following August 19, 2010. The Company shall be obligated to
redeem all Preferred Units of each Preferred Unitholder that delivers such
notice to the Company and to pay the Redemption Amount to such Unitholders (1) at
the time of such event with respect to (i) and (ii) above and (2) within
30 days of delivery of the notice in connection with (iii) above (it being
understood that such notice may be delivered up to 30 days prior to August 19,
2010).


 


(b) Optional Redemption. The Company may, at any time after August 19,
2005 upon not less than 30 days prior written notice, redeem (by means of
making distributions pursuant to Section 4.4) all of the Preferred Units
then outstanding;


 


32

















 


provided
that the proceeds the holders of the Preferred Units will receive in connection
with such redemption will not be taxed as ordinary income. Upon any such
redemption, the Company shall pay a price per Preferred Unit equal to the
product of (i) the Redemption Amount thereof multiplied by (ii) a
premium as follows: 


 


	
  After August 19, 2005 through and including August 19, 2006:

  	
   

  	
  107.50

  	
  %

  
	
  After August 19, 2006 through and including August 19, 2007:

  	
   

  	
  103.75

  	
  %

  
	
  Thereafter:

  	
   

  	
  100.00

  	
  %

  



 


(c) Payment. All payments pursuant to Sections 5.6(a) and (b) shall
be made in cash in immediately available funds. If the funds of the Company
legally available for redemption of Preferred Units, pursuant to a mandatory
redemption under Section 5.6(a), on any date of redemption are
insufficient to redeem the total number of Preferred Units to be redeemed on
such date, those funds which are legally available shall be used to redeem the
maximum possible number of Preferred Units pro rata among the holders of the
Preferred Units to be redeemed based upon the aggregate Redemption Amount of
such Preferred Units held by each such holder. At any time thereafter when
additional funds of the Company are legally available for the redemption of
Preferred Units, such funds shall immediately be used to redeem the balance of
the Preferred Units which the Company has become obligated to redeem on any
date of redemption but which it has not redeemed.


 


ARTICLE VI


REPORTS
TO MEMBERS; TAX MATTERS


 


SECTION 6.1
Books of Account. Appropriate books of account shall be kept by the Management
Committee, in accordance with generally accepted accounting principles, at the
principal place of business of the Company, and each Member shall have access
to all books, records and accounts of the Company and the right to make copies
thereof for any purpose reasonably related to the Member’s interest as a member
of the Company, in each case, under such conditions and restrictions (including
a confidentiality undertaking or agreement) as the Management Committee may
reasonably prescribe.


 


SECTION 6.2
Reports.


 


(a) Financial Statements. As promptly as practicable after the
close of each fiscal year of the Company, the Management Committee shall cause an
examination of the financial statements of the Company (but not its subsidiaries)
as of the end of each such fiscal year to be made in accordance with generally
accepted auditing standards as in effect on the date thereof, by a firm of
certified public accountants selected by the Management Committee. Within 120
days after the close of each fiscal year, a copy of the financial statements of
the Company (but not its subsidiaries), including the report of such certified
public accountants, shall be furnished to each Unitholder and shall include, as
of the end of such fiscal year:


 


(i) a statement prepared by the Company setting forth the balance
of each Unitholder’s Capital Account and the amount of that Unitholder’s 


 


33

















 


allocable
share of the Company’s items of Net Income or Net Loss and deduction, capital
gain and loss or credit for such year for each of its Economic Interests; and


 


(ii) a balance sheet, a statement of income and expense and a statement
of changes in cash flows of the Company for that fiscal year. 


 


In addition, the Unitholders
shall be supplied with all other Company information necessary to enable each
Unitholder to prepare its federal, state, and local income tax returns and
shall also be supplied with any financial statements of Agrilink Holdings that
the Company receives and with any financial statements of Agrilink that the
Company receives, but only to the extent that such financial statements are not
publicly filed with the Securities and Exchange Commission.


 


(b) Determinations. All determinations, valuations and other
matters of judgment required to be made for accounting purposes under this Agreement
shall be made by the Management Committee and shall be conclusive and binding
on all Unitholders, their Successors in Interest and any other Person, and to
the fullest extent permitted by law, no such Person shall have the right to an
accounting or an appraisal of the assets of the Company or any successor
thereto.


 


SECTION 6.3
Fiscal Year. The fiscal year of the Company shall end on December 31st of
each calendar year unless otherwise determined by the Management Committee in
accordance with Section 706 of the Code.


 


SECTION 6.4
Certain Tax Matters.


 


(a) Preparation of Returns. The Tax Matters Member shall cause to
be prepared all federal, state and local tax returns of the Company for each year
for which such returns are required to be filed and shall cause such returns to
be timely filed. The Tax Matters Member shall determine the appropriate
treatment of each item of income, gain, loss, deduction and credit of the
Company and the accounting methods and conventions under the tax laws of the
United States, the several states and other relevant jurisdictions as to the treatment
of any such item or any other method or procedure related to the preparation of
such tax returns. The Tax Matters Member may cause the Company to make or
refrain from making any and all elections permitted by such tax laws. Each
Unitholder agrees that it shall not, except as otherwise required by applicable
law or regulatory requirements, (i) treat, on its individual income tax
returns, any item of income, gain, loss, deduction or credit relating to its
interest in the Company in a manner inconsistent with the treatment of such
item by the Company as reflected on the Form K-1 or other information
statement furnished by the Company to such Unitholder for use in preparing its income
tax returns or (ii) file any claim for refund relating to any such item based
on, or which would result in, such inconsistent treatment. In respect of an
income tax audit of any tax return of the Company, the filing of any amended
return or claim for refund in connection with any item of income, gain, loss,
deduction or credit reflected on any tax return of the Company, or any
administrative or judicial proceedings arising out of or in connection with any
such audit, amended return, claim for refund or denial of such claim, (A) the
Tax Matters Member shall be authorized to act for, and its decision shall be
final and binding upon, the Company and all Unitholders except to the


 


34

















 


extent
a Unitholder shall properly elect to be excluded from such proceeding pursuant
to the Code, (B) all expenses incurred by the Tax Matters Member in
connection therewith (including attorneys’, accountants’ and other experts’
fees and disbursements) shall be expenses of, and payable by, the Company, (C) no
Unitholder shall have the right to (1) participate in the audit of any
Company tax return, (2) file any amended return or claim for refund in
connection with any item of income, gain, loss, deduction or credit (other than
items which are not partnership items within the meaning of Section 6231(a)(4) of
the Code or which cease to be partnership items under Section 6231(b) of
the Code) reflected on any tax return of the Company, (3) participate in
any administrative or judicial proceedings conducted by the Company or the Tax
Matters Member arising out of or in connection with any such audit, amended
return, claim for refund or denial of such claim, or (4) appeal, challenge
or otherwise protest any adverse findings in any such audit conducted by the
Company or the Tax Matters Member or with respect to any such amended return or
claim for refund filed by the Company or the Tax Matters Member or in any such
administrative or judicial proceedings conducted by the Company or the Tax
Matters Member and (D) the Tax Matters Member shall keep the Unitholders
reasonably apprised of the status of any such proceeding. Notwithstanding the
previous sentence, if a petition for a readjustment to any partnership item
included in a final partnership administrative adjustment is filed with a
District Court or the Court of Claims and the IRS has elected to assess income
tax against a Member with respect to that final partnership administrative adjustments
(rather than suspending assessments until the District Court or Court of Claims
proceedings become final), such Member shall be permitted to file a claim for
refund within such period of time to avoid application of any statute of
limitation provisions which would otherwise prevent the Member from having any
claim based on the final outcome of that review.


 


(b) Tax Matters Member. The Company and each Member hereby
designate Holdings as the “tax matters partner” for purposes of Section 6231(a)(7)
of the Code (the “Tax Matters Member”).


 


(c) Certain Filings. Upon the sale of Company assets or a liquidation
of the Company, the Unitholders shall provide the Management Committee with
certain tax filings as reasonably requested by the Management Committee and
required under applicable law.


 


ARTICLE
VII


MISCELLANEOUS


 


SECTION 7.1
Schedules. Without in any way limiting the provisions of Section 6.2, a
Representative may from time to time execute on behalf of the Company and
deliver to the Unitholders schedules which set forth the then current Capital
Account balances of each Unitholder and any other matters deemed appropriate by
the Management Committee or required by applicable law. Such schedules shall be
for information purposes only and shall not be deemed to be part of this
Agreement for any purpose whatsoever.


 


SECTION 7.2
Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF


 


35

















 


DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and any provision
of the Certificate or any mandatory provision of the Act, the applicable
provision of the Certificate or the Act shall control. If any provision of this
Agreement or the application thereof to any Person or circumstance is held
invalid or unenforceable to any extent, the remainder of this Agreement and the
application of that provision to other Persons or circumstances is not affected
thereby and that provision shall be enforced to the greatest extent permitted
by law.


 


SECTION 7.3
Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective Successors in Interest;
provided that no Person claiming by, through or under a Member (whether as such
Member’s Successor in Interest or otherwise), as distinct from such Member
itself, shall have any rights as, or in respect to, a Member (including the
right to approve or vote on any matter or to notice thereof).


 


SECTION 7.4
Confidentiality. By executing this Agreement, each Member expressly agrees to
maintain, for so long as such Person is a Member and for two years thereafter,
the confidentiality of, and not to disclose to any Person other than the
Company, another Member or a Person designated by the Company or any of their
respective financial planners, accountants, attorneys or other advisors, any
information relating to the business, financial structure, financial position
or financial results, clients or affairs of the Company, Agrilink, Agrilink
Holdings or any other subsidiary of the Company that shall not be generally
known to the public, except as otherwise required by law or by any regulatory
or self-regulatory organization having jurisdiction and except in the case of
any Member who is employed by any entity controlled by the Company in the
ordinary course of its duties; provided, however, that a Member may report to
its stockholders, limited partners, members or other owners, as the case may
be, regarding the general status of its investment in the Company (without
disclosing specific confidential information). Notwithstanding the provisions
of this Section 7.4 to the contrary, in the event that Holdings desires to
undertake any transfer of its Membership Interest permitted by the
Securityholders Agreement, Holdings may, upon the execution of a
confidentiality agreement (in form reasonably acceptable to the Company’s legal
counsel) by any bona fide potential transferee (unless such potential
transferee is a direct competitor of the Company or its Affiliates), disclose
to such potential transferee information of the sort otherwise restricted by
this Section 7.4 if Holdings reasonably believes such disclosure is
necessary for the purpose of transferring such Membership Interest to the bona
fide potential transferee.


 


SECTION 7.5
Amendments. The Management Committee may, to the fullest extent allowable under
Delaware law, amend or modify this Agreement; provided that if an amendment or modification
adversely affects any class of Members, such class of Members, by majority
vote, must approve such amendment or modification; provided further that,
notwithstanding the foregoing, the Management Committee may amend this
Agreement without the consent of any class of Members in order to provide for
the issuance of (1) with the consent of Preferred Unitholders holding at
least a majority of the Preferred Units, any other type of preferred unit
(whether of an existing or new class) and (2) any other class of units or
other securities (whether of an existing or new class), and to make any such
other amendments as it


 


36

















 


deems necessary or desirable
to reflect such additional issuances and to add parties to this Agreement as
contemplated by this Agreement; provided further that no amendment shall be
effective without the consent of each Member that would be adversely affected
by such amendment if such amendment (i) modifies the limited liability of
a Member, (ii) alters the rights of a Member to receive allocations or
distributions as set forth herein (unless such alteration of rights is in
connection with a debt or equity financing, restructuring, recapitalization or
other transaction in which the Company will receive an investment or
contribution to its capital or in connection with the issuance of equity to
employees or directors of the Company or its subsidiaries or to third party
lenders), or (iii) amends this Section.


 


SECTION 7.6
Notices. Whenever notice is required or permitted by this Agreement to be
given, such notice shall be in writing and shall be given to any Unitholder at
its address or telecopy number shown in the Company’s books and records, or, if
given to the Company, at the following address:


 


c/o
Vestar Capital Partners


245
Park Avenue


41st
Floor


New
York, New York 10167


Attention:  David M. Hooper and General Counsel


Telecopy:
(212) 808-4922


 


with
a copy (which shall not constitute notice to the Company) to:


Kirkland &
Ellis


Citigroup
Center


153
East 53rd Street


New
York, NY 10022


Attention:
Michael Movsovich, Esq.


Telecopy:
(212) 446-6460


 


Each proper notice shall be
effective upon any of the following: (i) personal delivery to the
recipient, (ii) when telecopied to the recipient (with hard copy sent to
the recipient by reputable overnight courier service that same day or the next
business day (charges prepaid)), (iii) one business day after being sent
to the recipient by reputable overnight courier service (charges prepaid) or (iv) two
business days after being deposited in the mails (first class or airmail
postage prepaid).


 


SECTION 7.7
Counterparts. This Agreement may be executed in any number of counterparts
(including by means of telecopied signature pages), all of which together shall
constitute a single instrument.


 


SECTION 7.8
Power of Attorney. Each Member hereby irrevocably appoints each Representative
as such Member’s true and lawful representative and attorney-in-fact, each
acting alone, in such Member’s name, place and stead, (i) to make,
execute, sign and file all instruments, documents and certificates which, from
time to time, may be required to set forth any amendment to this Agreement or
which may be required by this Agreement or by the laws of


 


37

















 


the United States of America,
the State of Delaware or any other state in which the Company shall determine
to do business, or any political subdivision or agency thereof and (ii) to
execute, implement and continue the valid and subsisting existence of the
Company or to qualify and continue the Company as a foreign limited liability
company in all jurisdictions in which the Company may conduct business. No
Representative, as representative and attorney-in-fact, however, shall have any
rights, powers or authority to amend or modify this Agreement when acting in
such capacity, except as expressly provided herein. Such power of attorney is
coupled with an interest and shall survive and continue in full force and
effect notwithstanding the subsequent withdrawal from the Company of any Member
for any reason and shall survive and shall not be affected by the disability or
incapacity of such Member.


 


SECTION 7.9
Entire Agreement. This Agreement and the other documents and agreements
referred to herein or entered into concurrently herewith embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein; provided that, such other agreements and documents
shall not be deemed to be a part of, a modification of or an amendment to this
Agreement. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter (including the Initial
Agreement).


 


SECTION 7.10
Certain Payments. Notwithstanding Section 4.4(a), if the amount described
in Section 4.4(a)(i) or Section 4.4(a)(ii)(1) has not been
distributed pursuant to Section 4.4(a)(i) or Section 4.4(a)(ii)(1),
respectively, due to the proviso set forth therein, the Company shall make a
guaranteed payment to the Preferred Unitholders, out of the Distributable
Assets, in an amount equal to the Current Preferred Return or Unpaid Preferred
Return, respectively, before any subsequent distributions are made pursuant to Section 4.4(a).


 


SECTION 7.11
Section Titles. Section titles and headings are for descriptive
purposes only and shall not control or alter the meaning of this Agreement as
set forth in the text hereof.


 


38

















 


IN
WITNESS WHEREOF, the parties have executed this Amended and Restated Limited
Liability Company Agreement as of the day and year first above written.


 


	
   

  	
  VESTAR/AGRILINK HOLDINGS
  LLC

  
	
   

  	
  By:

  	
  Vestar Capital Partners IV,
  L.P.,

  
	
   

  	
   

  	
  its Managing Member

  
	
   

  	
  By:

  	
  Vestar Associates IV, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
  By:

  	
  Vestar Associates
  Corporation IV,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
  By:

  	
  /s/ David Hooper

  
	
   

  	
   

  	
  Name: David Hooper

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRO-FAC COOPERATIVE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Mehalick

  
	
   

  	
  Its:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  VESTAR/AGRILINK ASSOCIATES
  HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Vestar Associates IV, L.P.,
  its Manager

  
	
   

  	
  By:

  	
  Vestar Associates Corporation
  IV,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Hooper

  
	
   

  	
   

  	
  Name: David Hooper

  
	
   

  	
   

  	
  Title: Managing Director

  



 


[SIGNATURE
PAGES CONTINUE BELOW]


 

















 


	
   

  	
  VESTAR/AGRILINK ASSOCIATES
  II HOLDINGS LLC

  
	
   

  	
  By:

  	
  Vestar Associates IV, L.P.,
  its Manager

  
	
   

  	
  By:

  	
  Vestar Associates
  Corporation IV,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Hooper

  
	
   

  	
   

  	
  Name: David Hooper

  
	
   

  	
   

  	
  Title: Managing Director

  



 


[SIGNATURE
PAGES CONTINUE BELOW]


 

















 


	
   

  	
  RANDOLPH STREET PARTNERS V

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frederick Tanne

  
	
   

  	
   

  	
  Name:

  	
  Frederick Tanne

  
	
   

  	
   

  	
  Title:

  	
  Managing Director