Document:

Exhibit 10.1

 

	
   

  

EXECUTION COPY

 

Amended and Restated

 

Marketing and Facilitation Agreement

 

	
   

  

 

 

TABLE OF CONTENTS

 

	
  DEFINITIONS

  	
  2

  
	
  MARKETING

  	
  2

  
	
  2.

  	
  Supply of Product Under the
  2002 Raw Product Plan

  	
  2

  
	
  3.

  	
  Supply of Product; Pro-Fac
  Preferred Provider Status

  	
  3

  
	
  4.

  	
  Raw Product Plan

  	
  4

  
	
  5.

  	
  Agricultural Management
  Function

  	
  10

  
	
  PAYMENT FOR CROPS

  	
  12

  
	
  6.

  	
  Payment for Crops

  	
  12

  
	
  7.

  	
  Preseason Activities;
  Determination of Commercial Market Value

  	
  15

  
	
  GENERAL

  	
  21

  
	
  8.

  	
  Quality

  	
  21

  
	
  9.

  	
  Force Majeure; Other
  Failure or Potential Failure to Deliver

  	
  21

  
	
  10.

  	
  Bypassed Crops

  	
  22

  
	
  11.

  	
  Failure to Deliver

  	
  22

  
	
  12.

  	
  Adulteration or Misbranding

  	
  23

  
	
  13.

  	
  Title and Risk of Loss

  	
  23

  
	
  14.

  	
  Compliance with Fair Labor
  Standards Act

  	
  24

  
	
  15.

  	
  Compliance with FIFRA and
  Food Quality Protection Act

  	
  24

  
	
  16.

  	
  Term and Termination

  	
  25

  
	
  17.

  	
  Assignment

  	
  26

  
	
  18.

  	
  Audit

  	
  27

  
	
  19.

  	
  Disagreements

  	
  27

  
	
  20.

  	
  Indemnification

  	
  30

  
	
  21.

  	
  Confidentiality

  	
  30

  
	
  22.

  	
  Merchant Status; Pro-Fac to
  Become a Licensed Farm Product Dealer

  	
  31

  
	
  23.

  	
  Notices

  	
  32

  
	
  24.

  	
  Entire Agreement

  	
  33

  
	
  25.

  	
  No Third-Party
  Beneficiaries

  	
  34

  
	
  26.

  	
  Agreement Jointly Drafted

  	
  34

  
	
  27.

  	
  Section Headings

  	
  34

  
	
  28.

  	
  Severability

  	
  34

  
	
  29.

  	
  Counterpart Execution

  	
  34

  
	
  30.

  	
  Time of Essence

  	
  34

  
	
  31.

  	
  Governing Law; Waiver of
  Jury Trial

  	
  35

  

 

EXHIBITS AND SCHEDULES

 

	
  EXHIBIT 2

  	
  2002 Raw Product Plan

  
	
  EXHIBIT 6(a)

  	
  Standard General Marketing Agreement

  
	
  SCHEDULE 3

  	
  Covered Crops

  
	
  SCHEDULE 4(d)

  	
  Shortfall Adjustments

  

 

i

 

AMENDED AND RESTATED

MARKETING AND FACILITATION AGREEMENT

 

This
Amended and Restated Marketing and Facilitation Agreement (this “Agreement”) is
dated as of August 19, 2002 between Pro-Fac Cooperative, Inc. (“Pro-Fac”)
and Agrilink Foods, Inc. (“Agrilink”).

 

The
members and patrons of Pro-Fac are active growers who have joined together in
their cooperative to market their crops at a fair price and to try to achieve
as much stability and continuity as is possible in agriculture. Agrilink and
its predecessors have long been engaged in the processing, distribution and
sale of processed foods, now on a diversified geographical basis.

 

Pro-Fac
and Agrilink came together in 1961 because of Pro-Fac’s need to find a stable
market for crops grown by its members and patrons and because of Agrilink’s
need for a reliable supply of such crops.

 

Since
1994, Agrilink has been a wholly-owned subsidiary of Pro-Fac. Following the
closing of the transactions (the “Transactions”) contemplated by the Unit
Purchase Agreement dated as of June 20, 2002, by and among Pro-Fac,
Agrilink and Vestar/Agrilink Holdings LLC (the “Unit Purchase Agreement”),
Agrilink will no longer be a wholly-owned subsidiary of Pro-Fac.

 

Agrilink
and Pro-Fac desire to continue their long standing supply relationship with
Pro-Fac serving as Agrilink’s preferred supplier of crops hereunder, so that
Pro-Fac will have the ability to continue to market its members’ crops through
Agrilink without being subject to the economic risk-sharing arrangements that
were previously part of their relationship.

 

It
is therefore agreed as follows:

 

 

DEFINITIONS

 

1.
When used in this Agreement, the following terms shall have the meanings
indicated below:

 

“Commercial
Market Value” of crops sold by Pro-Fac to Agrilink shall mean the weighted
average of the prices paid by other commercial processors for similar crops
used for similar or related purposes purchased under pre-season contracts and
in the open market in the same or similar marketing areas. Commercial Market
Value shall be determined as provided in Paragraph 7 hereof.

 

“Raw
Products” shall mean the Covered Crops (defined below) required by Agrilink as
contemplated by any Raw Product Plan (defined below).

 

MARKETING

 

2.
Supply of Product Under the 2002 Raw Product Plan. Pro-Fac and Agrilink have
approved a Raw Product Plan (defined below) for the 2002 growing season (the “2002
Raw Product Plan”). Based upon the 2002 Raw Product Plan, Pro-Fac has entered
into annual crop agreements with its members and Agrilink has made certain
business arrangements and production plans and commitments in reliance thereon.
Therefore, Pro-Fac agrees that it will supply to Agrilink all crops
contemplated to be delivered by it under the 2002 Raw Product Plan, which is
attached hereto as Exhibit 2, and Agrilink agrees to accept and to pay for
such crops as contemplated by the 2002 Raw Product Plan, in each case, in
accordance with the terms and conditions of this Agreement.

 

2

 

3.
Supply of Product; Pro-Fac Preferred Provider Status. Subject to the terms and
conditions of this Agreement, Pro-Fac shall be Agrilink’s preferred supplier of
Covered Crops (defined below). On an annual basis, Agrilink shall be required
to purchase from Pro-Fac Raw Products as determined in accordance with
Paragraph 4 below and pursuant to the terms and conditions of this Agreement.
Agrilink shall use all commercially reasonable efforts in connection with the
development of the applicable annual Raw Product Plan and the implementation
thereof to source as much of its Raw Products supply for each Agrilink processing
facility from Pro-Fac as is practicable subject to relevant commercial
considerations including, without limitation, the production capabilities of
Pro-Fac’s members in the relevant geographic area, Agrilink’s Raw Products
needs (including timing and delivery requirements) and the overall cost of
obtaining the applicable Raw Products. The fruit and vegetable crops that
Pro-Fac currently supplies to Agrilink are listed on Schedule 3 attached hereto
(the “Covered Crops”).

 

Pro-Fac
agrees, in consideration of the foregoing, to use all commercially reasonable
efforts to maintain its ability to supply crops and to give Agrilink priority
and to use all commercially reasonable efforts to cause its members to give
priority to Agrilink in the supply of crops (whether pursuant to Pro-Fac
commitments or by means of an upward proration). Where a Pro-Fac member is
subject to commitments to supply crops to any person or entity in addition to
Pro-Fac, and the member’s yield for a particular growing season is insufficient
to meet all such commitments, Pro-Fac shall use all commercially reasonable
efforts to ensure that such Pro-Fac member allocates at least a pro-rata
portion (based on such member’s relative commitments to all persons and
entities) of the crops that are available to satisfy such member’s commitment
to Pro-Fac under the annual crop agreement(s) in effect between such
member and Pro-Fac. Subject

 

3

 

only to its inability to do
so because of the vagaries of weather or other causes validly preventing the
delivery or growing of such crops as set forth in this Agreement and in the
agreements between Pro-Fac and its members, Pro-Fac agrees to sell to Agrilink
all crops of the quality, type and in the amounts set forth by acreage or
tonnage in the Raw Product Plan to be obtained from members of Pro-Fac
(provided that such commitment to sell shall not apply to raw products
contracted for directly between Agrilink as a contracting party and a grower
who is a member of Pro-Fac). Pro-Fac agrees that it shall, in a manner
consistent with past custom and practice, exercise any and all rights that it
has pursuant to the terms of the corporate governance documentation of Pro-Fac
and any agreement between Pro-Fac and any of its members to manage (or, to the
extent that and for so long as the agricultural management function has been
delegated to Agrilink under this Agreement, to assist Agrilink to manage) the
supply of crops from its members in a manner that facilitates and accommodates
implementation of the annual Raw Product Plans, including, without limitation,
allocating crop production among its members (whether above or below their
respective committed amounts). In addition, Pro-Fac agrees that unless required
by law, it shall not without Agrilink’s consent amend the corporate governance
documents of Pro-Fac or modify any existing agreements between Pro-Fac and its
members, if such amendment or modification adversely affects Pro-Fac’s ability
to carry out the terms of this Agreement.

 

4.
Raw Product Plan.

 

(a) The
quality, quantity and variety of Raw Products required by Agrilink, the
specific facilities for which they are required and the timing of their
delivery shall be as established in an annual Raw Product Plan (the “Raw
Product Plan”). The Raw Product Plan shall be based on the condition and needs
of Agrilink’s business, as determined by Agrilink in its

 

4

 

sole discretion. The 2002 Raw
Product Plan is indicative of the matters addressed in, and format and detail
of, future Raw Product Plans. The Raw Product Plan will be prepared by
Agrilink, in a manner that is substantially consistent with the past custom and
practice of Agrilink and Pro-Fac and this Agreement, with such modifications as
Agrilink shall deem appropriate in the future in order to accommodate its
business. Pro-Fac agrees that, as requested by Agrilink, it will provide to
Agrilink, in a commercially timely manner, to the extent available to Pro-Fac
on a non-confidential basis, any and all information regarding Pro-Fac and the
Pro-Fac members that Agrilink requests in connection with the preparation of
the Raw Product Plan and to which Agrilink does not otherwise have direct
access in connection with its performance of the provisions of this Agreement
(including, without limitation, the crop commitments of each member, each
member’s capability to produce its commitment (or amounts less than or
exceeding its commitment), each member’s past production performance and
information regarding its member’s financial and business condition, including
any liens, judgments or defaults under any financial instruments or any other
material condition that reasonably could be considered relevant to such member’s
ability to deliver crops pursuant to this Agreement and related agreements).
Pro-Fac agrees that it will cooperate and consult with Agrilink and use good
faith efforts to assist Agrilink in the preparation of each Raw Product Plan so
that Agrilink can complete the Raw Product Plans in a timely fashion.

 

(b) Following
its preparation of the Raw Product Plan for a particular growing season,
Agrilink shall deliver to Pro-Fac its proposed Raw Product Plan no later than January 31
of the year for which the Raw Product Plan will be effective. The Raw Product
Plan shall set forth, among other things, the types of crops, the amount of
each crop by acreage or tonnage, the specific Pro-Fac members from whom such
crops will be acquired, and the specific facilities to

 

5

 

which such crops shall be
delivered. The Raw Product Plan will also identify, by notation, the reasons
for any significant reduction in Agrilink’s needs for a particular crop.
Pro-Fac shall have an opportunity to examine the Raw Product Plan, and shall
provide Agrilink with its comments within thirty (30) days of delivery of the
Raw Product Plan to Pro-Fac. If Pro-Fac has not provided any comments on the
Raw Product Plan during the period stated above, Pro-Fac shall be deemed for
all purposes under this Agreement to have accepted the Raw Product Plan as
delivered by Agrilink. If comments are timely provided by Pro-Fac, Agrilink
will consider in good faith such comments and in light thereof, and after
giving due consideration to the rights and obligations of the parties under
this Agreement, will modify the Raw Product Plan as it deems appropriate.
Agrilink shall prepare the Raw Product Plan to be implemented for a particular
growing season no later than March 31 of the year for which the Raw
Product Plan will be effective, in a manner consistent with the past custom and
practice of the parties, so as to provide Pro-Fac with reasonably adequate time
to implement its portion of the plan with its members, provided that the parties
acknowledge and agree that the implemented Raw Product Plan will be subject to
further modifications following initial implementation by the parties (in a
manner consistent with the past custom and practice of the parties, including
any pre-finalization implementation activity, as contemplated by Paragraph 4(c) below),
to adjust aspects of the plan that Agrilink determines should be adjusted, and
that can be adjusted, in a commercially reasonable manner. Each party agrees to
use all commercially reasonable efforts and to act in good faith to implement
the Raw Product Plan as so modified (such modified plan, the “Final Raw Product
Plan”).

 

(c) The
annual crop agreement and harvest agreement used by Pro-Fac for the 2002
growing season for each of the Covered Crops have been delivered by Pro-Fac to
Agrilink

 

6

 

(the “2002 Agreements”). The
annual crop agreements and harvest agreements to be used by Pro-Fac with its
members for the particular crops to be supplied under this Agreement shall be
substantially in the form of the 2002 Agreements for each such crop, with such
modifications, additions, deletions or amendments as Agrilink may require
(Agrilink will notify Pro-Fac of such changes prior to the time of delivery of
the applicable proposed Raw Product Plan pursuant to Paragraph 4(b) above),
including, without limitation, the quality standards to be applied to each such
crop, provided that Agrilink may request changes only to the extent such
changes are related to implementing any annual Raw Product Plan in the manner
determined by Agrilink and, provided further that, to the extent any such
change has an impact on the determination of Commercial Market Value, such
change will be considered under the provisions of Paragraph 7 below. In
addition, Pro-Fac agrees that as requested by Agrilink, through the delegation
to be made pursuant to Paragraph 5(a), it will enter into annual crop
agreements with its members to commence the implementation of any particular Raw
Product Plan prior to the finalization thereof, provided that if the applicable
Final Raw Product Plan is inconsistent with any such contract entered into or
other action taken prior to the finalization of such year’s Raw Product Plan,
Agrilink shall bear the costs, if any, arising from the cancellation or
modification of any such agreement.

 

(d) If
the aggregate amount to be purchased from Pro-Fac under any Final Raw Product
Plan for any Covered Crop (the “Annual Pro-Fac Planned Purchases”) both (i) constitutes
by volume less than the aggregate volume specified for such Covered Crop in
Schedule 4(d) attached hereto (the “Target Volume”) and (ii) constitutes
a percentage of Agrilink’s total planned purchases from all sources of such
Covered Crop (“Annual Total Planned Purchases”) for the applicable year that is
less than the percentage for such Covered

 

7

 

Crop for such growing season
specified on Schedule 4(d) attached hereto (the “Target Percentage”), then
Agrilink shall pay to Pro-Fac an amount (the “Shortfall Adjustment”) calculated
for such Covered Crop in accordance with the formulas and other provisions set
forth in Schedule 4(d) attached hereto. In determining whether a Shortfall
Adjustment is required and the amount thereof, the Annual Pro-Fac Planned
Purchases will be deemed to include the amount of (i) crops designated in
the Final Raw Product Plan to be purchased from Pro-Fac and (ii) crops
which are not designated to be purchased from Pro-Fac because (a) Pro-Fac
breaches this Agreement or (b) Pro-Fac is unable to produce (through its
members) the crops specified in such Final Raw Product Plan (ignoring, for this
purpose, any specification relating to the geographic location of crop
production or delivery). In order to determine the “Percentage of Target” as
set forth on Schedule 4(d), the Annual Pro-Fac Planned Purchases reflected or
deemed reflected in the applicable Final Raw Product Plan will be divided by
the amount that is the lesser of (i) the Target Volume and (ii) the
Target Percentage multiplied by the Annual Total Planned Purchases for such
year. Agrilink shall determine, and notify Pro-Fac within fifteen (15) business
days following finalization of any Final Raw Product Plan, whether there are
any Shortfall Adjustments payable pursuant to this Agreement. Any Shortfall
Adjustment amount payable under this Agreement shall be paid to Pro-Fac as part
of the final Commercial Market Value payment made pursuant to this Agreement
for the fiscal year subject to the applicable Raw Product Plan with respect to
the applicable crop. In the event that payment of the amounts under this
Paragraph 4(d) is prohibited because of the existence of a default that is
not waived or cured under the terms of any Institutional Indebtedness of
Agrilink and/or any subsidiary of Agrilink having a principal amount in excess
of $20,000,000, the payments due hereunder will be deferred until permitted by
the applicable instruments evidencing such indebtedness and will

 

8

 

then be made to the fullest
extent permitted. “Institutional Indebtedness” means, for purposes of this Agreement
(i) indebtedness under any credit facility provided by a bank or other
financial institution, (ii) indebtedness for borrowed money under any bond
or note indenture and notes issued pursuant thereto, (iii) indebtedness
under any financing facility, note or other evidence of indebtedness (as
determined in accordance with generally accepted accounting principles)
provided by or issued to a financial institution in connection with a borrowing
or other financing transaction, and (iv) any refinancing of the foregoing.
During the period of any such deferral, the portion of the Shortfall Adjustment
amount so deferred shall bear interest at the rate of 10% per annum compounded
annually. Shortfall Adjustments determined pursuant to this Paragraph 4(d) shall
be the sole and exclusive remedy available to Pro-Fac with respect to Agrilink’s
failure to commit to the purchase of the Target Volume or Target Percentage of
any Covered Crop during the term of this Agreement, and any such failure by
Agrilink shall not constitute a breach of the terms of this Agreement provided
that the Shortfall Adjustments required to be paid are duly paid in accordance
with this Paragraph 4(d).

 

(e) If
Pro-Fac disputes the calculation of any Shortfall Adjustment, then Pro-Fac
shall notify Agrilink of its disagreement and provide in reasonable detail the
reasons therefor within fifteen (15) business days following Agrilink’s
delivery to Pro-Fac of notice of the amount of such Shortfall Adjustment. If
Pro-Fac has not notified Agrilink of any disagreement within the time period
contemplated above, Pro-Fac shall be deemed to have agreed to the Shortfall
Adjustment as calculated by Agrilink for all purposes of this Agreement. If
Pro-Fac has notified Agrilink of a disagreement within such time period,
Agrilink shall be deemed to have agreed to Pro-Fac’s disagreement if Agrilink
has not notified Pro-Fac of any objection to such disagreement within 15
business days.

 

9

 

5.
Agricultural Management Function.

 

(a) Pro-Fac
hereby delegates to Agrilink and any of its affiliates, as Agrilink may
designate, all rights, power and authority that is necessary or desirable to
control any or all aspects of planning, consulting, sourcing and harvesting
crops from Pro-Fac members in a manner consistent with past custom and practice
of the parties (including, without limitation, those functions that have
heretofore been delegated to Agrilink pursuant to the Pro-Fac Bylaws, the
general marketing agreements between Pro-Fac and Pro-Fac members (each, a “General
Marketing Agreement”), the annual crop agreements and the harvest agreements),
including, without limitation, consulting with Pro-Fac members regarding the
implementation of the Raw Product Plan, determining whether or not to supply
seed, selecting the seed, setting a planting schedule and reaching decisions
regarding farming techniques, harvest, harvest scheduling and crop bypass. Such
delegation of power and authority shall include the authority to perform any such
function under any applicable agreement, document, or instrument between
Pro-Fac and any member or otherwise governing their relationship as suppliers
of Raw Product (but not their relationship as members of Pro-Fac), and Pro-Fac
shall assist and cooperate with Agrilink in carrying out the agricultural
management functions contemplated by this Paragraph 5. Agrilink hereby accepts
the delegation of rights, power and authority under this Paragraph 5(a) and
agrees to perform or to cause one or more of its subsidiaries or affiliates to
perform the functions described above for which such rights, power and
authority are delegated. The parties agree that to the extent that Pro-Fac
would otherwise be required to perform any obligation under this Agreement that
is delegated to Agrilink pursuant to this Paragraph 5, so long as and to the
extent that such delegation remains in effect, Agrilink’s failure to perform
any such obligation or Agrilink’s failure to perform such obligation to the
standard of conduct contemplated by this

 

10

 

Agreement shall not be
imputed to Pro-Fac to give rise to any liability of Pro-Fac hereunder. With
respect to transactions between Agrilink and Pro-Fac members undertaken by
Agrilink pursuant to the agricultural management functions delegated to
Agrilink pursuant to this Paragraph 5, Agrilink will indemnify Pro-Fac from any
liability arising from any actual or alleged breach of this Agreement by
Agrilink, any breach by Pro-Fac of any agreement entered into on Pro-Fac’s
behalf by Agrilink due to Agrilink’s performance or non-performance of any such
delegated function, or any other conduct of Agrilink which any member of
Pro-Fac or any third party imputes or attempts to impute to Pro-Fac, to the
extent that the actions of Agrilink or any of its representatives (other than
as specifically directed by Pro-Fac) give rise to any such liability during the
course of such transactions.

 

(b) Agrilink
hereby agrees that until the fifth anniversary of the date of this Agreement
(or, if earlier, the date of termination of this Agreement in accordance with
Paragraph 16), it will use commercially reasonable efforts to make available
members of its agricultural management staff to provide to Pro-Fac such services
as are to be mutually agreed by Agrilink and Pro-Fac that reasonably relate to
the expansion of the market for the agricultural products of the Pro-Fac
members. Such services may include allocating a portion of the agricultural
staff’s personnel resources, during such period, to the provision of
agricultural management services on an out-sourced basis to persons who enter
into supply relationships with Pro-Fac providing for the delivery of
agricultural products by Pro-Fac members. Pro-Fac shall pay to Agrilink
Agrilink’s fully loaded incremental costs for providing such services
(including salaries, benefits and reasonably allocated overhead), provided that
upon Pro-Fac’s request, Agrilink shall provide good-faith estimates of the
costs expected to be incurred and paid by Pro-Fac in connection with any such
services requested. The terms for the provision of and the payment for any such

 

11

 

services shall be reasonably
determined by the parties at the time that Agrilink and Pro-Fac reach agreement
with respect to the provision of any such services and shall be set forth in
independent agreements. Notwithstanding the foregoing, Agrilink shall not be
required to provide any service or services pursuant to this Paragraph 5 to the
extent that doing so would have a greater than de minimis effect on Agrilink’s
ability to conduct its own business and affairs. To the extent that Agrilink
provides to Pro-Fac or any third party any services of the type contemplated by
this Paragraph 5(b), the agreement or agreements for such services will provide
for indemnification of Agrilink and for Agrilink to be held harmless from any
and all damages, losses and other liabilities that any of Agrilink, its
officers, directors, employees, agents, stockholders or affiliates may suffer
or incur arising from, as the result of or in any way related to the provision
of such services, except for any damages, losses and other liabilities to the
extent that they arise from Agrilink’s willful breach, willful misconduct or
gross negligence.

 

PAYMENT FOR CROPS

 

6.
Payment for Crops.

 

(a) Agrilink
shall pay Pro-Fac an amount equal to the aggregate Commercial Market Value for
the crops delivered to Agrilink by Pro-Fac members pursuant to annual crop
agreements entered into between Pro-Fac and its members as contemplated by the
Final Raw Product Plan for each growing season during the term of this
Agreement. Agrilink shall pay Pro-Fac the Commercial Market Value to be paid
under this Agreement in installments corresponding to the payment by Pro-Fac to
its members of Commercial Market Value for the crops delivered. Pro-Fac shall
make payment of Commercial Market Value to its members pursuant to the
applicable annual crop agreements in accordance with Section 1(d) of
the General Marketing Agreement between Pro-Fac and each such member. A copy of
Pro-Fac’s standard General Marketing Agreement is attached hereto as Exhibit 6(a).
Pro-Fac represents to Agrilink

 

12

 

that each General Marketing
Agreement that is currently in force with its members contains the same payment
terms as are set forth in Section 1(d) and otherwise conforms in all
material respects to Exhibit 6(a). Pro-Fac hereby agrees that during the term
of this Agreement it shall not amend the payment provisions of any existing
annual crop agreements or General Marketing Agreement and that each General
Marketing Agreement that it enters into in the future shall contain the
Commercial Market Value payment provisions set forth in Exhibit 6(a),
unless otherwise agreed to in writing by Agrilink.

 

(b) Prior
to the final determination of Commercial Market Value in accordance with
Paragraph 7, Agrilink shall make payments to Pro-Fac based upon an estimated Commercial
Market Value (the “Estimated CMV”) for the applicable year. The Estimated CMV
shall be determined for purposes of this Agreement by Agrilink in a manner
consistent with past custom and practice taking into account such factors as
Agrilink determines in good faith to be appropriate. The final payment, to be
made following the end of Agrilink’s fiscal year, shall be made following the
determination of the actual Commercial Market Value for the applicable year in
accordance with Paragraph 7. At such time and to the extent that the prior
payments made in reliance on the Estimated CMV are found to have underestimated
or overestimated the actual Commercial Market Value as later determined, the
next required payment shall be adjusted upward to remedy any underpayment or
downward to remedy any overpayment, as applicable. If payments made in reliance
on the Estimated CMV are found to have overestimated the actual Commercial
Market Value by a margin greater than the amount remaining due to Pro-Fac for
any Covered Crop, whether with respect to all remaining payments due for a
particular growing season or the last payment due for that growing season,
Pro-Fac shall reimburse Agrilink promptly for the aggregate amount of any such
overpayments. The payment of Estimated CMV

 

13

 

shall take into account the
payment of harvest advances in accordance with the annual crop agreements.

 

(c) To
the extent that the amount payable to any Pro-Fac member would be reduced, or
Pro-Fac is entitled to an offset against, or deduction from, the amount payable
to any member for any service provided, or other cost incurred, by Pro-Fac,
Agrilink or any third party as provided in the applicable annual crop agreement
or otherwise, then to the extent that Agrilink provides any such service or
incurs any such expense (including by hiring and paying any third party), the
deduction for any such services or expenses shall reduce, in a manner
consistent with the past custom and practice of the parties (without double
counting), the amount payable to Pro-Fac pursuant to this Agreement (“Agrilink
Reimbursable Expenses”). Agrilink shall deliver periodically to Pro-Fac a
schedule setting forth the Agrilink Reimbursable Expenses to which Agrilink
believes it is entitled.

 

(d) Pursuant
to Section 5, during the term of this Agreement Agrilink will, on Pro-Fac’s
behalf, determine amounts payable to Pro-Fac’s members as contemplated by this Section 6.
Agrilink will coordinate with Pro-Fac to arrange for the amounts determined by
Agrilink to be paid to Pro-Fac members from bank accounts maintained by
Pro-Fac. Within ten (10) business days following any payment of an
installment of Estimated CMV or Commercial Market Value to Pro-Fac’s members
(or, during the harvest advance period, within ten (10) business days
following the last payment made for any weekly period), Agrilink will provide
to Pro-Fac a schedule setting forth the aggregate amount of such payment and
the breakdown of the amounts paid to each Pro-Fac member, taking into account
Agrilink’s calculation of the Agrilink Reimbursable Expenses applicable to each
such member payment. If Pro-Fac disagrees with the amount of any such payment,
Pro-Fac will notify Agrilink of its disagreement in writing within

 

14

 

ten (10) business days
following delivery of such schedule to Pro-Fac and provide in reasonable detail
the basis of such disagreement, including Pro-Fac’s proposed adjustment to any
payment. If Pro-Fac has not notified Agrilink of any disagreement within the
time period contemplated above, Pro-Fac shall be deemed to have agreed to the
payments reflected in the applicable schedule. If Pro-Fac has notified Agrilink
of its disagreement within the time period contemplated above and Agrilink
fails to notify Pro-Fac of any objection to Pro-Fac’s disagreement within ten (10) business
days following Agrilink’s receipt of Pro-Fac’s disagreement, then Agrilink
shall be deemed to have agreed to Pro-Fac’s proposed adjustments to such
payments. If Agrilink does object to any disagreement by Pro-Fac within the
time period contemplated above, such objection will be treated as a
disagreement subject to the provisions of Paragraph 19.

 

7.
Preseason Activities; Determination of Commercial Market Value.

 

(a) On
or prior to the forty-fifth (45th) day prior to the date that Agrilink expects
to commence entering into annual crop agreements for a particular crop,
Agrilink will prepare and deliver in writing to the applicable commodity
committee(s) of Pro-Fac, which committees shall be formed and maintained
by Pro-Fac in accordance with past custom and practice, the Estimated CMV for
such crop as contemplated by Paragraph 6(b) above and the Commercial
Market Value guidelines for each crop to be purchased from Pro-Fac in the
upcoming growing season (collectively, the “Preseason Materials”). Such
Preseason Materials shall include any change in the methodology for determining
Commercial Market Value for any commodity in any growing region, including any
changes arising from changes in the form of an annual crop agreement as
contemplated by Paragraph 4(c) above to the extent such changes affect
Commercial Market Value. The parties acknowledge that some aspects of the
information

 

15

 

that will be incorporated in
the Preseason Materials will become known to, be decided by or become available
to Agrilink at different times. Agrilink will have the right to deliver
Preseason Materials to Pro-Fac in whole or in part at any time prior to such
45th day referenced above (and it is possible that certain Preseason Material
will be delivered to Pro-Fac one (1) year or more in advance of such
date). The preparation and implementation of the Preseason Materials will be
subject to the following process which, to the extent not specifically
addressed otherwise in this Paragraph 7, shall be consistent with past custom
and practice of Agrilink and Pro-Fac. The applicable commodity committee(s) will
either approve of any Preseason Materials with respect to a particular crop or
crops or will disapprove of such Preseason Materials (or any aspect thereof)
based on their inconsistency with the terms of this Agreement within thirty
(30) calendar days following Agrilink’s delivery of such Preseason Materials to
it. Pro-Fac may extend such 30-day period for up to an additional thirty (30)
days if the Preseason Materials at issue were delivered by Agrilink to Pro-Fac
more than sixty (60) days prior to such 45th day referenced in the first
sentence of this Subparagraph 7(a). To the extent the applicable commodity
committee notifies Agrilink within the time period contemplated above that it
disapproves of any aspect of the Preseason Materials, it shall be treated as a
Disputed Item under Paragraph 7(d). If the applicable commodity committee
approves the applicable Preseason Materials or fails to notify Agrilink that it
disapproves of any aspect of the applicable Preseason Materials within the time
period contemplated above, such Preseason Materials, to the extent not objected
to, will be presented to the CMV Committee for ratification. The “CMV Committee”
shall be a standing committee appointed under this Agreement, and shall be
comprised of three (3) persons designated by Agrilink and three (3) persons
designated by Pro-Fac. Within three (3) calendar days following the
presentation to it by the applicable commodity committee of the Preseason

 

16

 

Materials, the CMV Committee
shall either ratify such Preseason Materials or, in the event of any
disagreement preventing ratification, shall notify Agrilink of such
disagreement. Any disagreement by the CMV Committee that constitutes the
grounds for withholding ratification of the Preseason Materials shall be
treated as a Disputed Item under Paragraph 7(d).

 

(b) Commercial
Market Value shall be determined for purposes of this Agreement by Agrilink in
a manner consistent with the past custom and practice of the parties, and in
accordance with the terms of this Agreement, with the objective to determine
the weighted average of the prices paid by other commercial processors, for
similar crops, used for similar or related purposes, sold under pre-season
contracts and in the open market in the same or similar marketing areas. Such
weighted average shall be calculated pursuant to a process that obtains and
checks input data, weights such markets’ and other processors’ prices, adjusts
the stated purchase price for varying contractual terms and otherwise includes
procedures (including the periodic modification of such procedures) that are
consistent with the established past custom and practice of Agrilink and
Pro-Fac. Commercial Market Value, for purposes of this Agreement, will not be
adjusted for any profits realized or losses incurred by Agrilink. The parties
have reviewed and acknowledge that the materials reflecting Agrilink’s
calculation of Commercial Market Value for the 2001 growing season (the “2001
CMV Materials”), including, without limitation (i) the sample contracts
used by Agrilink to assess relevant prices and purchase terms among comparable
parties in the marketplace and (ii) tables reflecting Agrilink’s weighting
system for such contracts and the analyses of, and adjustments to, such prices
and terms made in reaching its determination of Commercial Market Value were
consistent with the past custom and practices of the parties. Agrilink shall
continue to use substantially the same comparable parties, weighting system for
contracts used by such comparable parties, and

 

17

 

adjustment processes
reflected in the 2001 CMV Materials, subject to any changes that result from
the approval or other determination of changes as contemplated by Paragraph 7(a) above
and the other provisions of this Paragraph 7.

 

(c) At
the appropriate times Agrilink will gather the data necessary for analyzing
comparable annual crop agreements, determine adjustments to the prices
reflected in such comparable agreements, and otherwise take such action and
make such determinations as are necessary to calculate the Commercial Market
Value for each crop. The determination of Commercial Market Value for each crop
shall be prepared by Agrilink and presented to the applicable commodity
committee(s) of Pro-Fac. The applicable commodity committee(s) will
either approve of the proposed Commercial Market Value for a particular crop or
disapprove of such Commercial Market Value based on its inconsistency with the
terms of this Agreement within thirty (30) calendar days following Agrilink’s
delivery of the proposed Commercial Market Value to it. If the applicable
commodity committee(s) approves the proposed Commercial Market Value or
fails to notify Agrilink that it disapproves of the proposed Commercial Market
Value within the time period contemplated above, the proposed Commercial Market
Value will be presented to the CMV Committee for ratification which
ratification shall be made within three (3) calendar days following
submission thereof to the CMV Committee. To the extent a determination of
Commercial Market Value is not approved by the applicable commodity committee
or not ratified by the CMV Committee, it shall be treated as a Disputed Item
under Paragraph 7(d).

 

(d) Any
disagreement regarding any of the Preseason Materials or the determination of
Commercial Market Value pursuant to this Paragraph 7 (each item subject to

 

18

 

such disagreement, a “Disputed
Item”) shall be addressed in one of the following four (4) manners:

 

(i) If
Agrilink determines that a Disputed Item should be addressed through further
work by the staff of Agrilink, the Disputed Item may be referred back to the
appropriate representatives of Agrilink for such further work. Upon the
completion of such further work, any aspect of the applicable Preseason
Materials or the determination of Commercial Market Value, as the case may be,
revised as necessary to take into account such further work, shall again be
presented by Agrilink to the applicable commodity committee(s) in
accordance with Paragraph 7(a) or Paragraph 7(b), as the case may be,
provided that for the purposes of this Paragraph 7(d)(i), the applicable
commodity committee shall have three (3) days following such presentation
to approve or disapprove of such revisions.

 

(ii) If
Agrilink determines that a Disputed Item should be addressed by discussion
between the Chief Executive Officer of Agrilink and the General Manager of
Pro-Fac, or their designees (the “Executives”), then the Disputed Item shall be
referred to such Executives for further discussion. The Executives will meet as
promptly as reasonably possible and in any event within ten (10) days to
consider such matter. The Executives will endeavor to resolve such Disputed
Item within three (3) days following their initial meeting thereon. If the
Executives reach a resolution of the Disputed Item, their proposed resolution
of the Disputed Item shall be referred or resubmitted, as the case may be, to
the CMV Committee for ratification. Subject to the other provisions of this
Paragraph 7(d), in the event that any Disputed Item referred to the Executives
under this clause (ii) is not resolved by the Executives within such
three-day period following their initial meeting thereon, unless each Executive
agrees to extend such time period, the Disputed Item shall be referred to the
CMV Committee in accordance with clause (iii) below.

 

19

 

(iii) If
Agrilink determines that a Disputed Item should be resolved directly by the CMV
Committee, the Disputed Item shall be referred to the CMV Committee. The CMV
Committee will meet within ten (10) days to consider such matter. The CMV
Committee will endeavor to resolve such Disputed Item within three (3) days
following its initial meeting thereon. If the CMV Committee reaches a
resolution of the Disputed Item, the CMV Committee’s resolution shall be
dispositive of the matter. In the event that any Disputed Item referred to the
CMV Committee is not resolved by the CMV Committee within such 3 day period
following the initial meeting thereon, unless an extension of such period is
agreed by all members of the CMV Committee, then either Agrilink or Pro-Fac may
refer the matter to arbitration by complying with the provisions of Paragraph
19(b) of this Agreement.

 

(iv) If
Agrilink determines that a Disputed Item should be addressed through
arbitration, then Agrilink shall have the right to submit such matter directly
to arbitration in accordance with the provisions of Paragraph 19(b) of
this Agreement regarding referring matters to arbitration.

 

Notwithstanding
the foregoing, in the event a Disputed Item exists, then either Agrilink or
Pro-Fac may at any time choose to initiate arbitration in accordance with
Paragraph 19(b) of this Agreement rather than follow or continue to follow
any of the alternative dispute resolution procedures set out in subparagraphs (i) through
(iii) of this Paragraph 7(d). It is the intent of this provision that
either party may choose arbitration in order to expedite a resolution of a
Disputed Item if, in the party’s judgment, resolving the Disputed Item through
arbitration is in the best interests of that party.

 

20

 

The
parties agree to use commercially reasonable efforts, to the extent practicable
and not detrimental to the commercial activities of the parties (including the
timing thereof), to consolidate the resolution of any Disputed Items hereunder.

 

Any
person who is required to attend any meeting referred to in this Paragraph 7
shall have the right to attend by means of conference call or other
telecommunication device or means that permits each individual participating
therein to hear and speak to each other participant therein.

 

GENERAL

 

8.
Quality. The annual crop agreements shall prescribe the standards of quality
for the Raw Products supplied pursuant to the Raw Product Plan in a reasonable
manner, taking into consideration established USDA standards, requirements for
Agrilink’s processed products, prevailing standards in the industry and Agrilink’s
historical quality standards. Changes to the applicable quality standards shall
be made in accordance with Paragraph 7. Agrilink may accept or reject Raw
Products based upon the annual crop agreements, and any disputes concerning
acceptance or rejection shall be subject to arbitration pursuant to Paragraph
19(b).

 

9.
Force Majeure; Other Failure or Potential Failure to Deliver.

 

(a) In
the event the performance of any part of this Agreement by either party is
prevented or delayed by act of God, war, terrorism, civil insurrection, fire,
flood, storm, strike, lockout or by law, regulation or order of federal, state
or local authority or by any other cause beyond the control of either party,
then such performance, to the extent that it is so prevented or delayed, shall
be excused.

 

(b) If
Pro-Fac invokes the provisions of force majeure pursuant to this Paragraph 9,
Pro-Fac may reduce the quantity of the affected categories of Raw Products

 

21

 

supplied to Agrilink pursuant
to the Raw Product Plan for the applicable year. In the event that Pro-Fac
fails to deliver the amount of any Raw Products specified in the Raw Product
Plan or if in any particular case Agrilink reasonably concludes, due to
anticipated crop yields, growing conditions, any anticipatory breach of any
annual crop agreement or other factors indicating that any Pro-Fac member is
likely to fail to deliver the amount of Raw Products specified in the Raw
Product Plan, Agrilink shall have the right, at its option, to purchase
additional quantities of such Raw Products from alternative sources without
regard to Paragraphs 3 and 4.

 

10.
Bypassed Crops. Raw Products fit for harvesting and suitable for processing
under the provisions of the Raw Product Plan which are not harvested at the
direction of Agrilink shall be referred to as “Bypassed Crops.” Sharing of the
economic impact of Bypassed Crops among Agrilink, Pro-Fac members and contract
growers of the applicable Covered Crop shall be governed by the applicable
provisions of the annual crop agreement for purchase of the affected Covered
Crop. All determinations made with respect to Bypassed Crops, including,
without limitation, expected yields, costs not incurred for harvest and
allocation among affected Pro-Fac members, shall be made by Agrilink in good
faith in a manner consistent with the past custom and practice of the parties.

 

11.
Failure to Deliver. Pro-Fac acknowledges that, in order to process properly the
maximum quantities of Raw Products for inclusion in its processed food
products, it is essential that Agrilink not only be supplied with the Raw
Products hereunder, but that Agrilink receive such Raw Products, to the extent
not affected by circumstances owing to force majeure, in a timely manner
consistent with the applicable Raw Product Plan. Pro-Fac further acknowledges
that Agrilink will suffer damages if Pro-Fac or its members fail to deliver the
quantity of Raw Products in a timely manner as specified in the applicable Raw
Product Plan. Accordingly, Pro-

 

22

 

Fac hereby assigns to
Agrilink, as a third party beneficiary, all rights and powers that Pro-Fac may
have under any General Marketing Agreement or Annual Crop Agreement and any
other right to seek redress in the event that any Pro-Fac member fails to
perform its obligations to deliver crops to Agrilink as contemplated hereby. To
the extent that Agrilink may not directly take any action described above to
redress any such breach, Pro-Fac hereby agrees to take such action in its own
right as requested and directed by Agrilink to seek redress for any such breach
for the benefit of Agrilink. To the extent that such redress involves an offset
against or reduction of the amount payable by Pro-Fac to any member, then such
amount will be treated as an Agrilink Reimbursable Expense hereunder. Pro-Fac
hereby grants to Agrilink its power of attorney to take such action and to do
all things necessary or desirable in Pro-Fac’s name, place and stead for any
purpose in connection with the matters contemplated by this Paragraph 11.

 

12.
Adulteration or Misbranding. Pro-Fac guarantees that no articles of food
delivered by it to Agrilink during the period in which this contract is
effective will be adulterated or misbranded within the meaning of the Federal
Food, Drug and Cosmetic Act of June 25, 1938, as amended, or within the
meaning of any state food and drug law, the adulteration and misbranding
provisions of which are identical with or substantially the same as those found
in the federal Act, and goods will not be produced or shipped in violation of Section 404
or 301(d) (21 USCS ‘SS’’SS’ 331(d), 344) of the federal Act. Pro-Fac,
however, does not guarantee against goods becoming adulterated or misbranded
within the meaning of the Act or Acts after delivery to Agrilink by reason of
causes beyond the control of Pro-Fac.

 

13.
Title and Risk of Loss. In the cases where Agrilink arranges the harvest and
hauling of Raw Products pursuant to Paragraph 5 above, title and risk of loss
to the Raw Products shall pass from Pro-Fac to Agrilink upon the harvest of
such Raw Products. In cases

 

23

 

where such harvest and/or
hauling are not arranged by Agrilink, title and risk of loss to the Raw
Products shall pass from Pro-Fac to Agrilink when the Raw Products are
delivered to and accepted by Agrilink. All products delivered to Agrilink
pursuant to the terms of this Agreement shall be delivered free and clear of
all liens and adverse claims, other than Permitted Liens. “Permitted Liens”
shall mean (i) liens arising due to the operation of law with respect to
Raw Products delivered hereunder for amounts that are not yet due and payable
and (ii) liens on Raw Products in favor of creditors to individual Pro-Fac
members, provided that notice of all such liens, as well as any specific
requirements of the lienholder with respect to control of proceeds, is provided
to Agrilink before harvest. In addition, Pro-Fac agrees that upon receipt of
payment from Agrilink with respect to any crops subject to any statutory lien,
Pro-Fac shall promptly make payment to the applicable Pro-Fac member from whom
such crops were received consistent with the payment terms applicable to such
crops.

 

14.
Compliance with Fair Labor Standards Act. Pro-Fac agrees that all of the crops
delivered pursuant to this Agreement will be produced and delivered in
compliance with all applicable standards of the Fair Labor Standards Act, as
amended.

 

15.
Compliance with FIFRA and Food Quality Protection Act. Pro-Fac agrees that its
members have not used and will not use any pesticide or other product in
violation of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), as
amended, or the Food Quality Protection Act, as amended, in connection with
planting, growing, harvesting or delivering any Raw Products.

 

24

 

16.
Term and Termination.

 

(a) This
Agreement shall become effective as of the date hereof and, unless terminated
earlier as provided herein, shall continue for a period of ten (10) years.

 

(b) Without
prejudice to any other rights either party may have under this Agreement,
applicable law or rule of equity, either party shall have the option to
terminate this Agreement in the event:

 

(i) the
other party commits a material breach of any term, covenant or condition of
this Agreement and such breach is not remedied within sixty (60) days after the
aggrieved party has delivered notice of such breach to the other party; or

 

(ii) the
other party becomes insolvent within the meaning of any bankruptcy or
insolvency law, or makes an assignment for the benefit of its creditors.

 

(c) Agrilink
may terminate this Agreement, with respect to any particular Raw Products to be
delivered to Agrilink hereunder, if an attachment, execution or foreclosure of
any lien is levied against such Raw Products and such attachment, execution or
lien foreclosure is not remedied within ten (10) days after Agrilink has
sent written notice of such event to Pro-Fac or such action otherwise impairs,
in any material respect, Agrilink’s ability to either take title, free and
clear of all liens, other than Permitted Liens, to any such Raw Products or use
such Raw Products.

 

(d) Agrilink
may terminate this Agreement in connection with a Change of Control. “Change of
Control” shall mean any transaction or series of transactions, including any
sale, transfer or issuance by securities sale, merger, consolidation,
recapitalization or otherwise, that results, directly or indirectly, in (i) a
transfer of all or substantially all of the assets of Agrilink, or (ii) Vestar
Capital Partners IV, L.P. and its affiliates ceasing to possess, directly or

 

25

 

indirectly, the power to
elect a majority of Agrilink Holdings, Inc.’s board of directors. If this
Agreement is terminated pursuant to this Paragraph 16(d) within three (3) years
following the date hereof, then Agrilink shall pay to Pro-Fac a fee (a “Termination
Fee”) equal to $20,000,000 minus the aggregate amount of any Shortfall
Adjustments previously paid. If this Agreement is terminated pursuant to this
Paragraph 16(d) at a time later than three (3) years following the
date hereof, then no Termination Fee shall be payable.

 

(e) In
the event that this Agreement is terminated as provided in Paragraph 16(b) or
Paragraph 16(d) above, such termination shall not affect any obligation
with respect to the delivery of crops pursuant to a then-effective Raw Product
Plan or payment for such crops hereunder.

 

17.
Assignment. Agrilink shall have the right to assign this Agreement in whole or
in part in connection with the sale of all or any part of its business, and
upon such assignment shall be released from all obligations relating to the
portion of this Agreement that has been assigned, provided that the assignee of
this Agreement or the relevant portion thereof is (i) the person who
acquires Agrilink’s business or the relevant portion of Agrilink’s business or (ii) any
other person if such person’s financial ability to perform the assigned
obligations is reasonably acceptable to Pro-Fac. In the event of a sale of all
or any part of its business following the third anniversary of this Agreement,
Agrilink will use commercially reasonable efforts to assign its rights and
obligations under this Agreement, in whole or in relevant part, to a
transferee, purchaser or other successor to all or any material part of its
business, so long as such assignment does not disadvantage Agrilink or any of
its equityholders as determined in Agrilink’s sole discretion. This Agreement
may not be assigned by Pro-Fac without the prior written consent of Agrilink,
and any attempted assignment without such consent shall be void.

 

26

 

18.
Audit. During the term of this Agreement and for a period of three (3) years
thereafter, both parties to this Agreement shall, upon reasonable notice and
during normal business hours, be given access to the pertinent books and
records, management personnel and outside accountants of the other party in
order to verify the accuracy of costs, fees or expenses reported by such other
party in connection with the performance of the obligations under this
Agreement, crop deliveries, offsets, adjustments and similar matters and for
other purposes reasonably related to the performance of the parties under this
Agreement. In exercising its right under this Section 18, each party shall
endeavor to minimize the disruption to the business and activities of the
other.

 

19.
Disagreements.

 

(a) In
the event that Pro-Fac and Agrilink have an unresolved disagreement relating to
the application or interpretation of this Agreement or regarding whether any
determination made by a party was made in a manner that complies with the
process and procedures set forth in this Agreement, then either party shall
have the right to invoke the disagreement resolution procedures set forth in
this Paragraph 19. Other than with respect to matters addressed in Paragraph 7(d) hereof,
promptly upon notice of such invocation, Pro-Fac and Agrilink shall each
designate a senior executive who shall be charged with full authority to
resolve the disagreement in cooperation with the other. Such executives shall
meet as promptly as possible (and in any event within ten (10) days) to
discuss, consider and otherwise attempt to resolve the disagreement. If the
designated executives resolve such disagreement, their resolution shall be set
forth in a writing executed by each executive and such resolution shall be
binding on the parties. Should the designated executives fail to resolve the
disagreement within five (5) days following their initial meeting, then
the dispute shall be submitted directly to final

 

27

 

and binding arbitration upon
written demand therefore delivered by either party to the other pursuant to
Paragraph 19(b) below.

 

(b) Each
arbitration shall be conducted before one arbitrator, who shall be selected as
follows: one representative shall be selected by each of Pro-Fac and Agrilink
within two (2) days in the case of a Crop Sensitive Dispute (defined
below) and five (5) days in all other cases following either party
invoking the provisions of this Paragraph 19(b), and such representatives
shall, within a period of two (2) days in the case of a Crop Sensitive
Dispute and five (5) days in all other cases, agree mutually upon an
arbitrator, provided that if either party fails to select a representative
within such two-day period, then the representative timely selected by the
other party shall serve as the arbitrator. Neither of the representatives
selected by the parties, nor the arbitrator selected by such representatives,
shall have any previous affiliation with either party. With respect to any arbitration
regarding a disagreement arising under any of Paragraphs 3, 4, 5, 6, 7 or 10 of
this Agreement (“Crop Sensitive Disputes”), the arbitrator shall be a person
who has substantial experience and expertise in the agricultural industry,
including with respect to matters related to planning and managing farming,
harvesting and processing of crops. For disagreements arising under any other
paragraph of this Agreement, the arbitrator shall have the requisite experience
and expertise concerning the subject matter of the dispute, as well as the
requisite legal knowledge pertaining thereto, to conduct and conclude the
arbitration in accordance with the terms hereof. Within three (3) days in
the case of Crop Sensitive Disputes (other than those arising under Paragraph
6(d)) and within ten (10) days for all other disputes following the
selection of an arbitrator, and subject to the terms hereof, such arbitrator
shall establish the rules and procedures for the proceeding and commence
the arbitration, provided that such rules and procedures will be
consistent with the terms and objectives of this

 

28

 

Agreement and an expeditious
resolution of the matter. Any arbitration commenced hereunder shall be
conducted in Rochester, New York. No discovery shall be permitted. The
arbitrator shall hear evidence (whether oral or written) presented by each
party and resolve each of the issues identified by the parties. The arbitrator
shall render a formal, binding, non-appealable resolution and award on each
issue as expeditiously as possible, and in any event within three (3) days
in the case of Crop Sensitive Disputes (other than those arising under
Paragraph 6(d)) and within fifteen (15) days for all other disputes after the hearing.
The arbitrator shall resolve each issue in dispute by selecting either the
solution proposed by Pro-Fac or the solution proposed by Agrilink, provided
that if the disagreement was submitted directly to arbitration under this
Paragraph 19(b) without any prior attempt at resolution pursuant to either
clause (ii) or (iii) of Paragraph 7(d) or Paragraph 19(a) hereof,
the arbitrator shall have the discretion to determine a resolution that is
within the range of outcomes proposed by the parties as opposed to selecting
between the alternative solutions proposed by the parties. Each party shall
bear its own costs and expenses incurred in connection with any arbitration
hereunder and shall share equally the fees and expenses of the arbitrator (and
those of the representatives charged with selecting the arbitrator, if any),
provided that if the arbitrator determines that either party has acted in bad
faith or in a grossly commercially unreasonable manner then the arbitrator
shall be free to allocate between the parties the fees and expenses of the
arbitrator and of the parties as they shall determine. The parties agree to use
commercially reasonable efforts to minimize the costs of any arbitration
hereunder and, to the extent practicable and not detrimental to the commercial
activities of the parties (including the timing thereof), to consolidate
disagreements arising hereunder to avoid multiple arbitration proceedings. In
addition, the parties agree that once an arbitrator has been selected pursuant
to this Paragraph 19(b), the same arbitrator shall preside

 

29

 

over any other arbitrations
arising within thirty (30) days following such selection, consistent with such
arbitrator’s expertise and experience, and that such arbitrator’s term may be
extended upon mutual agreement of the Parties.

 

20.
Indemnification. Each party hereto agrees to fully indemnify, defend and hold
the other party harmless against all claims, complaints, losses, costs,
expenses, damages or fees (including all attorneys’ fees) arising from or
associated with any failure of such party to comply with the terms,
undertakings or commitments set forth in this Agreement and the other
agreements relating hereto. Each party waives any claim, or right to seek
indemnification, for consequential damages. If the indemnifying party shall so
request, the indemnified party agrees to cooperate with the indemnifying party
and its counsel in contesting any claim which the indemnifying party elects to
contest or, if appropriate, in making any counterclaim against the person
asserting the claim, or any cross-complaint against any person. The
indemnifying party shall reimburse the indemnified party for any expenses
incurred by it in so cooperating. The indemnifying party shall not settle any
claim, other than a claim solely for money damages, without the consent of the
indemnified party, such consent not to be unreasonably withheld or delayed.

 

21.
Confidentiality.

 

(a) During
the term of this Agreement, and for five (5) years thereafter, Pro-Fac and
Agrilink and each of their respective affiliates and each of their employees,
consultants and directors will maintain the confidentiality of any Confidential
Information received from the other under this Agreement in the same manner as
such party maintains the confidentiality of its own confidential information.
As defined herein, “Confidential Information” shall mean the information,
observations and data concerning the business or

 

30

 

affairs of Pro-Fac and
Agrilink and their respective subsidiaries obtained by the other party as a
result of the interactions and communications contemplated in this Agreement
(including the audit rights under Paragraph 18), the Marketing and Facilitation
Agreement between the parties hereto dated as of November 3, 1994 (the “Prior
Agreement”) and related agreements. The following information shall not be
considered Confidential Information hereunder:

 

(i) information
in the public domain at the time of disclosure;

 

(ii) information
that was known or otherwise available to the receiving party prior to its
disclosure by the disclosing party; and

 

(iii) information
that has been independently developed without the benefit of any reference to
any disclosure hereunder by any party.

 

(b) Notwithstanding
any of the foregoing, a party may disclose Confidential Information of the
other party if required by applicable law, rule, regulation, government
requirement and/or court order, provided that the disclosing party promptly
notifies the other party of its notice of any such requirement and provides the
other party a reasonable opportunity to seek a protective order or other
appropriate remedy and/or to waive compliance with the provisions of this
Agreement.

 

22.
Merchant Status; Pro-Fac to Become a Licensed Farm Product Dealer. Pro-Fac
hereby represents and warrants (i) that it is a merchant with respect to
the Raw Products sold and delivered to Agrilink, and (ii) that the Pro-Fac
members are merchants with respect to the Raw Products delivered to Agrilink
pursuant to this Agreement. The parties hereby agree that under this Agreement (i) notwithstanding
the method of transportation or delivery, Pro-Fac, not Pro-Fac’s members, will
sell and deliver Raw Products to Agrilink; and (ii) Agrilink will buy and
receive Raw Products from Pro-Fac, not Pro-Fac’s members. Pro-Fac hereby
represents that

 

31

 

it will make all commercially
reasonable efforts to become, and to continue to be during the term of this
Agreement, a licensed farm product dealer with the New York State Department of
Agriculture and Markets.

 

23.
Notices. All notices, requests, demands or other communications required or
permitted under this Agreement shall be given in writing and shall be deemed to
have been given upon delivery if delivered personally, upon receipt by the
sender of a confirmation of receipt by the receiving party if sent by
facsimile, one day following dispatch if sent by overnight courier, fees
prepaid, or five days following mailing, postage prepaid, as follows:

 

(a) Any
delivery of commercial communications in connection with the Raw Product Plan,
the Commercial Market Value determination or objections thereto shall be
directed to the following:

 

If
to Pro-Fac:

 

Pro-Fac
Cooperative, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:
General Manager

Facsimile:
(585) 383-1281

 

If
to Agrilink:

 

Agrilink
Foods, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:
President

Facsimile:
(585) 383-1606

 

(b) Any
notices of breach, of arbitration or dispute or communications regarding
amendment or modification of this Agreement shall be directed to the following:

 

32

 

If
to Pro-Fac:

 

Pro-Fac
Cooperative, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:
General Manager

Facsimile:
(585) 383-1281

 

with
a copy to:

 

Harris
Beach LLP

99
Garnsey Road

Pittsford,
NY 14534

Attn:
Thomas Willett

Facsimile:
(585) 419-8801

 

If
to Agrilink:

 

Agrilink
Foods, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:
Dennis Mullen and David Mehalick

Facsimile:
(585) 385-1606

 

With
copies to:

 

Vestar
Capital Partners IV, L.P.

245
Park Avenue, 41st Floor

New
York, NY 10167-4098

Attn:
David Hooper

Facsimile:
(212) 808-4922

 

and

 

Kirkland &
Ellis

153
East 53rd Street

New
York, NY 10022

Attn:
Michael Movsovich

Facsimile:
(212) 446-4900

 

24.
Entire Agreement. This Agreement, including the Exhibits and Schedules attached
hereto, constitutes the entire agreement between, and supercedes all prior
agreements and understandings of, the parties with respect to its subject
matter including, without limitation,

 

33

 

the Prior Agreement. This
Agreement may only be modified by a writing signed by duly authorized representatives
of both parties.

 

25.
No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted successors and assigns and nothing herein
expressed or implied shall give or be construed to give any Person, other than
the parties hereto and such permitted successors and assigns, any legal or
equitable rights hereunder.

 

26.
Agreement Jointly Drafted. Both parties acknowledge that they have jointly
drafted and negotiated all provisions of this Agreement, and this Agreement was
not drafted solely by either party. This agreement shall not be interpreted
strictly for or against either party.

 

27.
Section Headings. Section, Paragraph and other headings contained in this
Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.

 

28.
Severability. Each provision of this Agreement is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever in
a particular jurisdiction, such illegality or invalidity shall not affect the
validity of such term or provision in any other jurisdiction or the validity of
the remainder of this Agreement in any jurisdiction.

 

29.
Counterpart Execution. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties hereto had signed the same document. All
counterparts so executed shall be deemed to be an original, shall be construed
together and shall constitute one Agreement.

 

30.
Time of Essence. Time is expressly declared to be the essence of this
agreement.

 

34

 

31.
Governing Law; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OR CHOICE OF LAWS
PRINCIPLES OF THE STATE OF NEW YORK OR OF ANY OTHER JURISDICTION THAT WOULD
RESULT IN THE APPLICATION OF ANY LAWS OTHER THAN THOSE OF THE STATE OF NEW
YORK. VENUE FOR ALL PROCEEDINGS UNDER THIS AGREEMENT SHALL BE ROCHESTER, NEW
YORK. EACH PARTY, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY WAIVES TRIAL
BY JURY OF ANY MATTER RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

* * * * *

 

35

 

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

 

 

	
   

  	
  AGRILINK FOODS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Mehalick

  
	
   

  	
  Name:

  	
  David M. Mehalick

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  PRO-FAC COOPERATIVE, INC.

  
	
   

  	
  By:

  	
  /s/ Earl L. Powers

  
	
   

  	
  Name:

  	
  Earl L. Powers

  
	
   

  	
  Title:

  	
  Vice President and Chief
  Financial Officer

  

 

36Exhibit
10.2

 

EXECUTION COPY

 

AGRILINK FOODS, INC.

90 Linden Oaks

Rochester, NY 14625

 

August 19, 2002

 

Pro-Fac Cooperative, Inc.

90 Linden Oaks

Rochester, NY 14625

 

Ladies and Gentlemen:

 

This
letter agreement (this “Agreement”) is entered into in connection with the
termination of the Marketing and Facilitation Agreement dated as of November 3,
1994, (the “MFA”), by and between Pro-Fac Cooperative, Inc. (“Pro-Fac”) and
Curtice-Burns Foods, Inc., predecessor in interest to Agrilink Foods, Inc.
(“Agrilink”). The MFA is the latest in the series of substantially similar
agreements dating back to 1961 which evidence the symbiotic relationship
between Pro-Fac and Agrilink. The members and patrons of Pro-Fac are active
growers who have joined together in their cooperative to market their crops at
a fair price and to try to achieve as much stability and continuity as is
possible in agriculture. While Pro-Fac and its members and patrons have
considerable expertise in the growing of crops, they do not have such expertise
in the processing and sale of the crops in the form of commercially viable
processed food products. Agrilink has long been engaged in the processing,
distribution and sale of processed foods on a diversified geographical basis,
but it lacks expertise in the farming and growing of the crops on which it
depends for a reliable and long term source of supply for its products. Pro-Fac
and Agrilink came together because of the need of Pro-Fac to find a stable
market for crops grown by its members and patrons and because of the need of
Agrilink for a reliable supply of such crops. While Agrilink has always
believed that it has available to it adequate funds to finance its non-Pro-Fac
related operations, in order to process and market Pro-Fac products Agrilink has
required significant additional sources of financing in the form of working
capital and facilities necessary to give it the capacity to provide a reliable
and stable market for Pro-Fac crops. Consequently, the willingness of Agrilink
to enter into its relationship with Pro-Fac has always depended upon the
commitment of Pro-Fac to provide financial support and other accommodations to
Agrilink from a variety of sources not directly available to Agrilink. Pro-Fac
has always provided such accommodations in order to achieve its primary
objective of a guaranteed and stable market for crops grown by its members and
patrons. As most recently reflected in the MFA, those accommodations have
included the guarantee by Pro-Fac of all indebtedness for borrowed funds of
Agrilink, the making available by Pro-Fac to Agrilink of access to the Federal
Farm Credit System for borrowing of funds, the long term commitment of Pro-Fac
to provide Agrilink with a stable and reliable source of high quality crops
that provide the essential basis for the operation and utilization of
facilities of Agrilink in which Pro-Fac products are processed, favorable
extended payment terms for crops of Pro-Fac’s members, the acceptance by
Pro-Fac of the risk of losses by Agrilink on the sale of Pro-Fac products, and
the commitment of Pro-Fac to provide loans to Agrilink for use as working
capital of funds of Pro-Fac not needed by Pro-Fac for its own business
purposes. In exchange, Agrilink has paid Pro-Fac the commercial market value of
its crops plus an additional payment based on Agrilink’s earnings from the
marketing of Pro-Fac products. The parties hereto acknowledge that

 

 

all income, gains, and losses
earned by Pro-Fac under the MFA have been reported as patronage sourced income
pursuant to Subchapter T of the Internal Revenue Code, and that
characterization has been supported by longstanding rulings from the Internal
Revenue Service. Since the termination fee provided for in Paragraph 1 below is
being paid to Pro-Fac in full and arms length consideration for the cessation
of its rights to earn patronage income under the MFA, it is by necessity
Pro-Fac’s intent to treat such termination fee as patronage income and include
it in its patronage dividends to its member/growers.

 

1.             Termination Fee.
Subject to the terms of Paragraph 4 below, as  consideration to Pro-Fac for
terminating its rights under the MFA,  Agrilink will pay to Pro-Fac
an amount equal to $10,000,000 per year for  the five (5) consecutive
years following the date of this Agreement (the  “Termination Date”). Such
amount shall be paid in quarterly installments  as follows: $4,000,000 on
each July 1st, and $2,000,000 on each October  1st, January 1st and April 1st,
wired to an account designated by Pro-Fac  not less than 30 days prior
to the due date for each such payment, until  an aggregate amount of
$50,000,000 has been paid or until a Prepayment is  made pursuant to Paragraph 2
below. It is the parties intention that the  first payment hereunder be
made as of the Termination Date in the amount  of $4,000,000 (subject to the
provisions of Paragraph 4 below), with the  next payment to be made on October 1,
2002 and quarterly thereafter until  all payments required
hereunder have been made. In the event that payment  of the amounts under this
Paragraph 1 are prohibited because of the  existence of a default, that
is neither waived nor cured, under the terms  of any Third Party
Indebtedness of Agrilink and/or any of its subsidiaries  having a
principal amount in excess of $20,000,000, the payments due  hereunder will
be deferred until permitted by the applicable instruments  evidencing such
indebtedness and will then be made to the fullest extent  permitted.
During the period of any such deferral, the portion of the  payments so
deferred shall bear interest at the rate of 10% per annum  compounded
annually. Notwithstanding the preceding provisions of this  Paragraph 1,
Agrilink’s obligation to make any payment due during a fiscal  year shall be
conditioned upon Pro-Fac, as of the time such payment is  due, having
maintained grower membership such that it would be capable  (based on the
commitments of its growers) of delivering to Agrilink in the  twelve months
following the due date for such payment at least 75% of the  aggregate volume
of crops that it delivered to Agrilink pursuant to the  MFA during the
corresponding twelve month period most recently ended prior  to the date of
this Agreement; provided, that Pro-Fac shall be deemed to  have satisfied
such condition if Pro-Fac’s inability to achieve the  foregoing delivery capacity
in any given year is due primarily to  Agrilink’s reduced
requirements for crops in that or a previous year that  has caused a
reduction in Pro-Fac membership; provided, that,  notwithstanding the foregoing
proviso, to the extent that Agrilink’s  requirements increase
subsequent to a reduction, Pro-Fac shall not be  deemed to have satisfied such
condition unless it will have used its  commercially reasonable
efforts to restore membership. “Third Party  Indebtedness” means, for
purposes of this Paragraph 1, (i) indebtedness  under any credit facility
provided by a bank or other financial  institution, (ii) indebtedness
for borrowed money under any bond or note  indenture and notes issued
pursuant thereto, (iii) indebtedness under any  financing facility, note or
other evidence of indebtedness (as determined  in accordance with generally
accepted accounting principles) provided by  or issued to a financial
institution in connection with a borrowing or  other financing transaction,
and (iv) any refinancing of the foregoing.  

 

2

 

2.             Defeasance Prepayment and Mandatory Prepayment.

 

(a)     At any time while amounts
remain outstanding under this Agreement,  Agrilink may satisfy all or
any portion of its obligation hereunder  by making a lump-sum payment
(a “Defeasance Prepayment”) by means of  deposit to an escrow account
maintained by an escrow agent selected  by Agrilink and reasonably
acceptable to Pro-Fac. The escrow agent  shall hold such lump-sum
payment in escrow, subject to the  provisions of Paragraph 1
above, until any portion thereof would  have been paid pursuant to
the terms and conditions of this  Agreement, at which time the
escrow agent shall pay such amounts to  Pro-Fac; provided, that all
amounts remaining in escrow, if any,  after all payments due to
Pro-Fac hereunder have been paid, shall be  paid to Agrilink. In the
event of a Defeasance Prepayment, the  amount required to satisfy
the portion of Agrilink’s obligation  hereunder being prepaid shall
be sufficient to enable the escrow  agent to pay the portion of
the obligations being prepaid, without  any discount, when due,
assuming all such quarterly payments that  are being prepaid will in
fact become payable according to the terms  hereof. Any amount paid
pursuant to this Paragraph 2(a) shall reduce  future payments under
Paragraph 1, in the order that such payments  would otherwise be made.

 

(b)     In the event of a Change of
Control at any time when any amount  remains to be paid pursuant
to Paragraph 1 above, Agrilink must  satisfy all of its obligation
hereunder by making a lump-sum payment  (a “Mandatory Prepayment”,
and collectively with a Defeasance  Prepayment referred to herein
as a “Prepayment”) to Pro-Fac equal to  an amount calculated by
applying a discount factor of 10% per annum,  on a quarterly basis, to the
amount required to satisfy all  remaining payments to be made
pursuant to Paragraph 1 above,  assuming all such quarterly
payments that are being prepaid will in  fact become payable according
to the terms hereof. Agrilink shall  have no further obligation to
Pro-Fac hereunder after the Mandatory  Prepayment has been made. “Change
of Control” means, for purposes of  this Paragraph 2(b), any
transaction or series of transactions,  including any sale, transfer
or issuance by securities sale, merger,  consolidation,
recapitalization or otherwise, that results, directly  or indirectly,
in (i) a transfer of all or substantially all of the  assets of
Agrilink, or (ii) Vestar Capital Partners IV, L.P. and its  affiliates
ceasing to possess, directly or indirectly, the power to  elect a majority
of Agrilink Holdings, Inc.’s board of directors.  

 

3.             Prohibited
Payments. Until the entire amount due hereunder is paid in  accordance with
Paragraph 1 or 2 above, Agrilink shall not make payments  to Agrilink
Holdings, LLC (“Holdings LLC”), Agrilink Holdings, Inc. nor to  Vestar/Agrilink
Holdings LLC (“Vestar”) if such funds will be used  directly or indirectly to
redeem, acquire or make distributions or  payments with respect to any
Vestar Securities. “Vestar Securities” means  equity securities of Holdings
LLC originally issued to Vestar or any of  its affiliates pursuant to
the Unit Purchase Agreement (“the UPA”), dated  as of June 20, 2002,
among Vestar, Pro-Fac and Agrilink.(1)

 

4.             Payment Adjustments.
Notwithstanding the provisions of Paragraph 1 above,  the payments to be made to
Pro-Fac pursuant to Paragraph 1 (or Paragraph  2, if applicable) will be
reduced, in the order in which such payments are  otherwise scheduled to be
made, to the extent that either                              

 

(1)           In the event
that the LLC structure is implemented, this provision will not prohibit tax
distributions to any member of any constituent entity.

 

3

 

(i) following
February 28, 2002 and prior to the Closing, Agrilink has  made or makes
payments to Pro-Fac that are not contemplated by the Eight  Plus Four Plan
(as defined in the UPA), other than for crops purchased by  Agrilink in the
ordinary course of business pursuant to and in accordance  with the MFA,
other than payments under Section 14 thereof (“Crop Purchase  Payments”), or (ii) following
June 29, 2002 and on or prior to the  Termination Date, Agrilink
makes any payment to Pro-Fac other than (a)  Crop Purchase Payments or (b) to
fund a patronage dividend payment by  Pro-Fac to its members in an
amount not to exceed the Permitted Patronage  Amount (as defined in the
UPA).

 

5.             Miscellaneous.

 

(a)     Assignment. Agrilink shall
have the right to assign this Agreement  in whole or in part in
connection with the sale or other disposition  of all or any part of its
business. This Agreement may not be  assigned by Pro-Fac without
the prior written consent of Agrilink,  and any attempted assignment
without such consent shall be void.

 

(b)     Counterpart Execution. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, with the same effect as if all parties
hereto had signed the same document. All counterparts so executed shall be deemed
to be an original, shall be construed together and shall constitute one
Agreement.

 

(c)     No Strict Construction. The
parties hereto have participated jointly  in the negotiation and
drafting of this letter agreement. In the  event an ambiguity interpretation
arises, this letter agreement  shall be construed as if
drafted jointly by the parties hereto, and  no presumption or burden of
proof shall arise favoring or  disfavoring any party hereto
by virtue of the authorship of any of  the provisions of this letter
agreement.

 

(d)     Governing Law; Waiver of Jury
Trial. THIS AGREEMENT SHALL BE  GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO  CONFLICTS OR CHOICE OF LAWS
PRINCIPLES OF THE STATE OF NEW YORK OR  OF ANY OTHER JURISDICTION
THAT WOULD RESULT IN THE APPLICATION OF  ANY LAWS OTHER THAN THOSE OF
THE STATE OF NEW YORK. VENUE FOR ALL  PROCEEDINGS UNDER THIS
AGREEMENT SHALL BE ROCHESTER, NEW YORK. EACH  PARTY, TO THE FULLEST EXTENT
PERMITTED BY LAW, HEREBY WAIVES TRIAL  BY JURY OF ANY MATTER RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED HEREBY.

 

(e)     Notices. All notices,
requests, demands or other communications  required or permitted under
this Agreement shall be given in writing  and shall be deemed to have
been given upon delivery if delivered  personally, upon receipt by
the sender of a confirmation of receipt  by the receiving party if
sent by facsimile, one day following  dispatch if sent by overnight
courier, fees prepaid, or five days  following mailing, postage
prepaid, as follows:

 

4

 

If
to Pro-Fac:

 

Pro-Fac
Cooperative, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:  Bruce Fox, Chairman

Facsimile:
(231) 861-4884

 

with
a copy (which shall not constitute notice to Pro-Fac) to:

Harris
Beach LLP

99
Garnsey Road

Pittsford,
NY 14534

Attn:
Thomas E. Willett, Esq.

Facsimile:
(585) 419-8818

 

If
to Agrilink:

 

Agrilink
Foods, Inc.

90
Linden Oaks

Rochester,
NY 14625

Attn:
Dennis M. Mullen

Facsimile:
(585) 383-1606

 

With
copies (which shall not constitute notice to Agrilink) to:

Vestar
Capital Partners IV, L.P.

245
Park Avenue, 41st Floor

New
York, NY 10167-4098

Attn:
David Hooper and General Counsel

Facsimile:
(212) 808-4922

 

and

 

Kirkland &
Ellis

153
East 53rd Street

New
York, NY 10022

Attn:
Michael Movsovich

Facsimile:
(212) 446-4900

 

* * * *

 

5

 

Please
sign the enclosed copy of this Agreement in the place provided below
acknowledging receipt of this Agreement and confirming that this Agreement
reflects your understanding.

 

	
   

  	
  Very Truly Yours,

  
	
   

  	
  AGRILINK FOODS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David M. Mehalick

  
	
   

  	
   

  	
  Name: 

  	
  David M. Mehalick

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

Accepted and agreed to as of this
19th day of August, 2002

 

PRO-FAC COOPERATIVE, INC.

 

 

	
  By: 

  	
  /s/ Stephen Wright

  	
   

  
	
   

  	
  Name: 

  	
  Stephen Wright

  	
   

  
	
   

  	
  Title:

  	
  General Manager and
  Secretary

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