<PAGE>

                                                                  EXHIBIT 4.1
                                                                  CONFORMED COPY




                         AMENDMENT No. 3 dated as of June 30, 1999 (this
                    "Amendment"), to the Credit Agreement dated as of January
                    23, 1998, as amended by Amendment No. 1 dated as of August
                    12, 1998, and Amendment No. 2 and Waiver dated as of
                    November 30, 1998 (the "Credit Agreement"), among EAGLE
                    FAMILY FOODS, INC. (the "Borrower"), EAGLE FAMILY FOODS
                    HOLDINGS, INC. ("Holdings"), the Lenders (as defined in the
                    Credit Agreement), THE CHASE MANHATTAN BANK, as
                    administrative agent (in such capacity, the "Administrative
                    Agent") and collateral agent (in such capacity, the
                    "Collateral Agent") for the Lenders, as swingline lender (in
                    such capacity, the "Swingline Lender"), and as Issuing Bank
                    (as defined in the Credit Agreement), and MERRILL LYNCH
                    CAPITAL CORPORATION, as documentation agent.

          A. Pursuant to the Credit Agreement, the Lenders, the Swingline Lender
and the Issuing Bank have extended credit to the Borrower, and have agreed to
extend credit to the Borrower, in each case pursuant to the terms and subject to
the conditions set forth therein.

          B. The Borrower and Holdings have requested that certain provisions of
the Credit Agreement be amended as set forth herein.

          C. The Required Lenders are willing to so amend the Credit Agreement
pursuant to the terms and subject to the conditions set forth herein.

          D. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.

          Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:

          SECTION 1.  Amendments.  (a) The definition of the term "Applicable
                      -----------
Rate" contained in Section 1.01 of the Credit Agreement is hereby amended as
follows:

          (i) by substituting the words "July 3, 1999" for the words "December
     31, 1998" in the proviso to the first paragraph of such definition; and

          (ii) by substituting the following new table for the existing table
     contained therein:

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------
                                Revolving Loan                   Term Loan
                                --------------                   ---------
   Leverage Ratio          Eurodollar        ABR         Eurodollar         ABR         Commitment
   --------------            Spread        Spread          Spread          Spread        Fee Rate
                             ------        ------          ------          ------        --------
-----------------------------------------------------------------------------------------------------
<S>                    <C>            <C>            <C>             <C>            <C>

     Category 1
     ----------
                               3.25%          2.25%           3.50%          2.50%          0.500%
Greater than 7.0 to 1.0
-----------------------------------------------------------------------------------------------------

     Category 2
     ----------

Greater than 6.5 to 1.0 but    2.75%          1.75%           3.00%          2.00%          0.500%
less than or equal to 7.0 to
1.0
-----------------------------------------------------------------------------------------------------

     Category 3
     ----------

Greater than 6.0 to 1.0 but    2.25%          1.25%           2.50%          1.50%          0.500%
less than or equal to 6.5
to 1.0
-----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                                               2

<TABLE>
<CAPTION>




                                Revolving Loan                   Term Loan
                                --------------                   ---------
   Leverage Ratio          Eurodollar        ABR         Eurodollar         ABR         Commitment
---------------------        Spread        Spread          Spread          Spread        Fee Rate
                             ------        ------          ------          ------        --------
-----------------------------------------------------------------------------------------------------
<S>                    <C>            <C>            <C>             <C>            <C>

      Category 4
---------------------

Greater than 5.5 to
1.0 but less than or           2.00%          1.00%           2.25%          1.25%          0.500%
equal to 6.0 to 1.0

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

      Category 5
---------------------

Greater than 5.0 to            1.75%          0.75%           2.25%          1.25%          0.500%
 1.0 but less than
 or equal to 5.5 to
 1.0

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

      Category 6
---------------------

Greater than 4.0 to            1.50%          0.50%           2.25%          1.25%          0.375%
1.0 but less than
 or equal to 5.0 to
 1.0

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

      Category 7
---------------------
                               1.50%          0.50%           2.25%          1.25%          0.375%
Less than or equal
 to 4.0 to 1.0
-----------------------------------------------------------------------------------------------------
</TABLE>


          (b) Section 6.12 of the Credit Agreement is hereby amended by
substituting the following new table for the existing table contained therein:

             "Period                 Ratio
              ------                 -----

        Effective Date-
        April 3, 1999           6.90 to 1.0

        April 4, 1999-
        October 2, 1999        11.20 to 1.0

        October 3, 1999-
        January 1, 2000         8.75 to 1.0

        January 2, 2000-
        April 1, 2000           8.50 to 1.0

        April 2, 2000-
        September 30, 2000      6.50 to 1.0

        October 1, 2000-
        September 29, 2001      6.00 to 1.0

        September 30, 2001-
        September 28, 2002      5.50 to 1.0

        Thereafter              5.00 to 1.0".
<PAGE>

                                                                               3

          (c) Section 6.13 of the Credit Agreement is hereby amended by
substituting the following new table for the existing table contained therein:

           " Period                Ratio
             ------                -----

          Effective Date-
          April 3, 1999          1.50 to 1.00

          April 4, 1999-
          October 2, 1999        1.10 to 1.00

          October 3, 1999-
          January 1, 2000        1.15 to 1.00

          January 2, 2000-
          April 1, 2000          1.20 to 1.00

          April 2, 2000-
          December 30, 2000      1.75 to 1.00

          December 31, 2000-
          December 29, 2001      2.00 to 1.00

          Thereafter             2.25 to 1.00".


          SECTION 2.  Amendment Fee.  Each Lender that shall execute a
                      --------------
counterpart hereof and return such counterpart to the Administrative Agent or
its counsel prior to 5:00 p.m., New York City time, on July 13, 1999 (the
"Return Date"), shall be entitled, upon the effectiveness of this Amendment as
provided in Section 4 below, to an amendment fee (an "Amendment Fee" and
collectively, the "Amendment Fees") equal to 1/4 of 1% of the sum of (a) the
outstanding Term Loans of such Lender and (b) the Revolving Commitment (whether
used or unused) of such Lender, in each case, as calculated on the Return Date.
The Amendment Fee payable to a Lender shall be paid to the Administrative Agent
for the account of such Lender, shall be paid in immediately available funds and
once paid, shall not be refundable under any circumstances.

          SECTION 3.  Representations and Warranties.  Each of the Borrower and
                      -------------------------------
Holdings represents and warrants to each other party hereto that, after giving
effect to this Amendment, (a) the representations and warranties set forth in
Article III of the Credit Agreement are true and correct in all material
respects on and as of the date hereof with the same effect as though made on and
as of the date hereof, except to the extent such representations and warranties
expressly relate to an earlier date, and (b) no Default or Event of Default has
occurred and is continuing.

          SECTION 4.  Conditions to Effectiveness.  This Amendment shall become
                      ----------------------------
effective as of the date first written above on the date that the Administrative
Agent shall have received (a) counterparts of the Amendment which, when taken
together, bear the signatures of the Borrower, Holdings and the Required Lenders
and (b) the Amendment Fees.

          SECTION 5.  Effect of Amendment.  Except as expressly set forth
                      --------------------
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Swingline Lender, the Issuing Bank, the Collateral Agent or the
Administrative Agent under the Credit Agreement or any other Loan Document, and
shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect. Nothing herein shall
be deemed to entitle the Borrower or Holdings to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or different circumstances. This
<PAGE>

                                                                               4

Amendment shall apply and be effective only with respect to the provisions of
the Credit Agreement specifically referred to herein.

          SECTION 6.  Counterparts.  This Amendment may be executed in any
                      -------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.

          SECTION 7.  Applicable Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
                      ---------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 8.  Headings.  The headings of this Amendment are for purposes
                      ---------
of reference only and shall not limit or otherwise affect the meaning hereof.
<PAGE>

                                                                               5

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.



                         EAGLE FAMILY FOODS, INC.,

                           by
                               /s/             Craig Steinke
                             ---------------------------------------------------
                             Name:              Craig Steinke
                             Title:             Vice President/CFO


                         EAGLE FAMILY FOODS HOLDINGS, INC.,

                           by
                               /s/             Craig Steinke
                             ---------------------------------------------------
                             Name:              Craig Steinke
                             Title:             Vice President/CFO


                         THE CHASE MANHATTAN BANK,
                         individually and as Administrative Agent, Collateral
                         Agent, Issuing Bank and Swingline Lender,

                           by
                               /s/             Neil R. Boylan
                             --------------------------------------------------
                             Name:              Neil R. Boylan
                             Title:             Managing Director


                         MERRILL LYNCH CAPITAL CORPORATION,
                         individually and as Documentation Agent,

                           by
                               /s/             Carol J. E. Feeley
                             --------------------------------------------------
                             Name:              Carol J. E. Feeley
                             Title:             Vice President
<PAGE>

                                                                               6

                         ALLIANCE CAPITAL FUNDING L.L.C.,

                         By:  Alliance Capital Management L.P., as Manager on
                              behalf of ALLIANCE CAPITAL FUNDING L.L.C., as
                              Assignee,

                         By:  ALLIANCE CAPITAL MANAGEMENT CORPORATION, General
                              Partner of Alliance Capital Management L.P.,

                         by
                               /s/             Joel Serebransky
                             ---------------------------------------------------
                             Name:             Joel Serebransky
                             Title:            Vice President


                         BANKBOSTON, N.A.,

                         by
                               /s/             Gregory R. D. Clark
                             ---------------------------------------------------
                             Name:              Gregory R. D. Clark
                             Title:             Managing Director


                         BANK OF HAWAII,

                         by
                               /s/          Donna R. Parker
                             ---------------------------------------------------
                             Name:           Donna R. Parker
                             Title:          Vice President


                         BANK OF NOVA SCOTIA,

                         by
                               /s/          Stephen E. Lockhart
                             ---------------------------------------------------
                             Name:           Stephen E. Lockhart
                             Title:          Vice President


                         BANK OF TOKYO - MITSUBISHI TRUST COMPANY,

                         by
                               /s/          Peter Stearn
                             ---------------------------------------------------
                             Name:           Peter Stearn
                             Title:          Vice President
<PAGE>

                                                                               7

                         CREDIT AGRICOLE INDOSUEZ,

                         by
                               /s/             Craig Welch
                             ---------------------------------------------------
                             Name:              Craig Welch
                             Title:              First Vice President

                         by
                               /s/             Sarah McClintock
                             ---------------------------------------------------
                             Name:              Sarah McClintock
                             Title:             Vice President


                         EATON VANCE INSTITUTIONAL SENIOR LOAN FUND,

                         By:  EATON VANCE MANAGEMENT, as Investment Advisor,

                         by
                               /s/             Payson F. Swaffield
                             ---------------------------------------------------
                             Name:              Payson F. Swaffield
                             Title:             Vice President


                         FIRST UNION NATIONAL BANK N.C.,

                         by
                               /s/             Frederick W. Price
                             ---------------------------------------------------
                             Name:              Frederick W. Price
                             Title:             Senior Vice President


                         FLEET NATIONAL BANK,

                         by
                               /s/             Michael J. Sullivan
                             ---------------------------------------------------
                             Name:              Michael J. Sullivan
                             Title:             Vice President


                         THE FUJI BANK, LIMITED, NEW YORK BRANCH,

                         by
                               /s/             Teiji Teramoto
                             ---------------------------------------------------
                             Name:              Teiji Teramoto
                             Title:             Vice President & Manager
<PAGE>

                         GENERAL MOTORS EMPLOYEES GLOBAL GROUP
                         PENSION TRUST,

                         STATE STREET BANK AND TRUST COMPANY as Trustee for
                         GENERAL MOTORS EMPLOYEES GLOBAL GROUP
                         PENSION TRUST,

                         by
                               /s/             Michael Connois
                            ----------------------------------------------------
                            Name:              Michael Connois
                            Title:             Assistant Vice President

                         INDOSUEZ CAPITAL FUNDING IV, LP,

                         By:  INDOSUEZ CAPITAL, as Portfolio Advisor,

                         by
                               /s/             Melissa Marano
                            ----------------------------------------------------
                            Name:              Melissa Marano
                            Title:             Vice President


                         KZH ING-2 LLC,

                         by
                               /s/             Virginia Conway
                            ----------------------------------------------------
                            Name:              Virginia Conway
                            Title:             Authorized Agent


                         KZH-PAMCO LLC,

                         by
                               /s/             Virginia Conway
                            ----------------------------------------------------
                            Name:              Virginia Conway
                            Title:             Authorized Agent


                         KZH SOLEIL LLC,

                         by
                               /s/             Virginia Conway
                            ----------------------------------------------------
                            Name:              Virginia Conway
                            Title:             Authorized Agent


                         KZH WATERSIDE LLC,

                         by
                               /s/             Virginia Conway
                            ----------------------------------------------------
                            Name:              Virginia Conway
                            Title:             Authorized Agent
<PAGE>

                         LEHMAN COMMERCIAL PAPER, INC.,

                         by
                               /s/             Michelle Cum
                            ----------------------------------------------------
                            Name:              Michelle Cum
                            Title:             Authorized Signatory


                         THE LONG TERM CREDIT BANK OF JAPAN, LIMITED, NEW
                         YORK BRANCH,

                         by
                               /s/             Nozomi Moue
                            ----------------------------------------------------
                            Name:              Nozomi Moue
                            Title:             Deputy General Manager


                         MASSACHUSETTS MUTUAL LIFE INSURANCE,

                         by
                               /s/             Kathleen Lynch
                            ----------------------------------------------------
                            Name:              Kathleen Lynch
                            Title:             Managing Director


                         MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST,

                         by
                               /s/             Peter Gewirtz
                            ----------------------------------------------------
                            Name:              Peter Gewirtz
                            Title:             Authorized Signatory


                         SENIOR DEBT PORTFOLIO,

                         By:    BOSTON MANAGEMENT AND RESEARCH, as
                                Investment Advisor,

                         by
                               /s/             Payson F. Swaffield
                            ----------------------------------------------------
                            Name:              Payson F. Swaffield
                            Title:             Vice President


                         SOCIETE GENERALE,

                         by
                               /s/             Cynthia A. Jay
                            ----------------------------------------------------
                            Name:              Cynthia A. Jay
                            Title:             Managing Director
<PAGE>

                         SUMMIT BANK,

                         by
                               /s/             Catherine E. Garrity
                            ----------------------------------------------------
                            Name:              Catherine E. Garrity
                            Title:             Vice President


                         VAN KAMPEN CLO I, LIMITED,

                         By:  VAN KAMPEN MANAGEMENT, INC., as Collateral
                              Manager,

                         by
                               /s/             Jeffrey W. Maillet
                            ----------------------------------------------------
                            Name:              Jeffrey W. Maillet
                            Title:             Senior Vice President & Director


                         VAN KAMPEN PRIME RATE INCOME TRUST,

                         by
                               /s/             Jeffrey W. Maillet
                            ----------------------------------------------------
                            Name:              Jeffrey W. Maillet
                            Title:             Senior Vice President & Director


                         VAN KAMPEN SENIOR INCOME TRUST,

                         by
                               /s/             Jeffrey W. Maillet
                            ----------------------------------------------------
                            Name:              Jeffrey W. Maillet
                            Title:             Senior Vice President & Director