EXECUTION COPY
AMENDMENT AND FORBEARANCE
AMENDMENT AND FORBEARANCE, dated as of June 30, 2003 (this
"Amendment"), to the Fifth Amended and Restated Credit Agreement, dated as of
November 1, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Aurora Foods Inc. (the "Company"), the
financial institutions parties thereto (the "Lenders") and the Agents.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to Company;
WHEREAS, Company has requested, and, upon this Amendment becoming
effective, the Lenders have agreed, that certain provisions of the Credit
Agreement be modified as set forth below;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
SECTION 2. Amendments to Credit Agreement.
(a) Amendments to Subsection 1.1. Subsection 1.1 of the Credit
Agreement is hereby amended by adding the following new defined terms in
proper alphabetical order:
"Credit Program Collateral Agent" means the entity or
institution acting as collateral agent for the Vendors under the
Secured Trade Credit Program.
"Secured Trade Credit Program" means the business plan
whereby Company has granted, in accordance with the terms of
subsection 7.2A(vii), to the Credit Program Collateral Agent, for
the ratable benefit of the Vendors, a second-priority lien on the
Collateral pursuant to the Summary of Trade Creditor Lien attached
hereto as Annex I in order to secure each Vendor's accounts payable
due from Company on behalf of shipments of goods from such Vendor
to Company.
"Vendors" means those parties from time to time
identified as vendors party to the Letter Agreement, dated as of
July 2, 2003, from Company to the vendors.
(b) Amendment to Subsection 6.1. Subsection 6.1 of the Credit
Agreement is hereby amended by adding the following as new paragraph (xix) at
the end thereof:
(xix) Weekly Financials: as soon as available and in any
event within five Business Days after the end of each calendar
week, a cash flow forecast of Company and its Subsidiaries for the
thirteen-week period starting on Monday of such week, substantially
in a form, and containing such information, as shall be agreed upon
between Company and the steering committee of Lenders.
(c) Amendments to Subsection 7.2A. Subsection 7.2A of the Credit
Agreement is hereby amended as follows:
(i) by deleting the word "and" at the end of
subsection 7.2A(v);
(ii) by deleting the period (".") at the end of
subsection 7.2A(vi) and replacing it with "; and"; and
(iii) adding the following new clause (vii) at the
end thereof:
(vii) if Company fails to make any scheduled interest
payment required to be made by Company in respect of the
Subordinated Notes in accordance with the terms thereof and of the
Subordinated Note Indentures on or after July 1, 2003 and no other
Event of Default or Potential Event of Default has occurred and is
continuing, Liens incurred under the Secured Trade Credit Program;
provided that the aggregate amount of obligations secured by such
Liens shall not at any time exceed $40,000,000.
(d) Amendments to Subsection 7.12. Subsection 7.12 of the Credit
Agreement is hereby amended by adding the following new paragraph F at the end
thereof:
F. Amendments of Secured Trade Credit Program. Company
shall not, and shall not permit any of its Subsidiaries to, amend
or otherwise change the terms of the Secured Trade Credit Program
(including, without limitation, the Summary of Trade Creditor Lien
attached hereto as Annex I), if the effect of such amendment or
change is to change the subordination provisions thereof (or of any
guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or
change, together with all other amendments or changes made, is to
confer any additional rights or lessen or remove any limitations on
the Credit Program Collateral Agent, on behalf of the Vendors,
which would be adverse to Company or Lenders.
(e) Amendments to Annexes. The Credit Agreement is hereby amended by
adding the Annex I attached hereto as new "Annex I" to the Credit Agreement.
SECTION 3. Forbearance.
(a) Each of the Lenders agrees that, for the period from the
Amendment Effective Date to the Section 3 Termination Date (as defined below),
it will not exercise any of the remedies available to it, and will not
instruct the Administrative Agent to exercise or consent to the Administrative
Agent exercising any of the remedies available to it, in either case, under
any of the Loan Documents (including, without limitation, to accelerate the
Loans or terminate the Commitments as contemplated in Section 8 of the Credit
Agreement) solely as a result of the occurrence of any Event of Default or
Potential Event of Default arising under subsection 8.2(i) of the Credit
Agreement by virtue of the failure of Company to make the scheduled interest
payment required under the Indenture dated as of July 1, 1998 with Wilmington
Trust Company, as Trustee (the "Specified Indenture"; and such non-payment,
the "Specified Indenture Default") on July 1, 2003. The "Section 3 Termination
Date" shall be the earliest of (i) July 31, 2003, (ii) the date on which the
Specified Indenture Default has been cured or waived, through amendments to
the Specified Indenture or otherwise, so long as Company has delivered to the
Administrative Agent five days' prior written notice of its intent to cure the
Specified Indenture Default by payment or (iii) the date on which a notice of
acceleration under the Specified Indenture has been delivered to Company.
(b) Each of the Lenders further agrees that any interest that would
otherwise accrue pursuant to subsection 2.2E as a result of the Specified
Indenture Default shall not accrue so long as no other Event of Default or
Potential Event of Default has occurred and is continuing.
(c) For the avoidance of doubt and notwithstanding the forbearance
granted in the foregoing Section 3(a), the parties hereto hereby agree that if
an Event of Default or Potential Event of Default arising as a result of the
Specified Indenture Default has occurred and is continuing, in accordance with
subsection 2.2D of the Credit Agreement, each Eurodollar Rate Loan shall be
converted into a Base Rate Loan on the expiration date of the Interest Period
applicable thereto and no Base Rate Loan may be converted into a Eurodollar
Rate Loan.
SECTION 4. Conditions to Effectiveness of Amendment. This Amendment
shall be effective on the date on which all of the following conditions
precedent have been satisfied or waived (the "Amendment Effective Date"):
(a) The Administrative Agent shall have received this Amendment,
executed and delivered by a duly authorized officer of each of (i) Company,
(ii) the Guarantor and (iii) the Requisite Lenders;
(b) Company shall have paid all accrued fees and expenses of counsel
and other advisors to or for the benefit of the Administrative Agent then due
and payable for which invoices have been presented to Company, and all
interest required to be paid on the Loans in accordance with the terms of the
Credit Agreement;
(c) After giving effect to the Amendment, no Event of Default or
Potential Event of Default shall have occurred and be continuing, other than
any Event of Default or Potential Event of Default referred to in Section 3
hereof; and
(d) The Administrative Agent shall have received an amendment fee for
the account of each Lender that executes and delivers its signature page to
the Administrative Agent prior to 5:00 p.m., New York City time, on June 30,
2003 in the amount equal to 0.125% of the sum of such Lenders' Revolving Loan
Exposure and Term Loan Exposure.
SECTION 5. Representations and Warranties. To induce the Lenders
parties hereto to enter into this Amendment, Company hereby represents and
warrants to the Administrative Agent and all of the Lenders that the
execution, delivery and performance of this Amendment and the consummation of
the transactions contemplated hereby have been duly authorized by all
necessary corporate or other action and is the legally valid and binding
obligation of Company, enforceable against Company in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
SECTION 6. Release. As further consideration to induce the Lenders
parties hereto to enter into this Amendment, Company, on behalf of itself and
each of its subsidiaries, represents and warrants that there are no claims,
causes of action, suits, debts, obligations, liabilities or demands of any
kind, character or nature whatsoever, fixed or contingent, which Company or
any of its subsidiaries may have, or claim to have, against the Administrative
Agent or any Lender with respect to the Credit Agreement, any other Loan
Document or the transactions contemplated hereby or thereby, and Company, on
behalf of itself and each of its subsidiaries, hereby releases, acquits and
forever discharges the Administrative Agent and each Lender, and their
respective agents, employees, officers, directors, representatives, attorneys,
affiliates, successor and assigns (collectively, the "Released Parties") from
any and all claims, causes of action, suits, debts, obligations, liabilities
or demands of any kind, character or nature whatsoever, known or unknown,
fixed or contingent, that Company or any of its subsidiaries may have, or
claim to have, against each of such Released Parties with respect to the
Credit Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby as of the Amendment Effective Date.
SECTION 7. Authorization of Intercreditor Agreement. The Lenders
hereby authorize the Administrative Agent to enter into an intercreditor
agreement with the Credit Program Collateral Agent in the event that the
Secured Trade Credit Program becomes effective.
SECTION 8. Effect on the Loan Documents. (a) Except as specifically
amended above, the Credit Agreement and all other Loan Documents shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment,
including the forbearance set forth in Section 3 hereof, shall not operate as
a waiver of any right, power or remedy of any Lender or the Administrative
Agent under any of the Loan Documents, nor constitute a waiver of any
provision of any of the Loan Documents.
SECTION 9. Costs, Expenses and Taxes. Company agrees to pay on demand
all actual and reasonable and documented out-of-pocket costs and expenses of
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of this Amendment and the
other instruments and documents to be delivered thereunder and hereunder,
including, without limitation, the reasonable and documented fees and
out-of-pocket expenses of counsel for the Administrative Agent (including
allocated costs of internal counsel) with respect thereto and with respect to
advising the Administrative Agent as to its rights and responsibilities
hereunder and thereunder. Company further agrees to pay on demand all costs
and expenses of the Administrative Agent and each of the Lenders, if any
(including, without limitation, counsel fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or otherwise)
of this Amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, reasonable counsel fees and expenses
(including allocated costs of internal counsel) in connection with the
enforcement of rights under this Section 9.
SECTION 10. Affirmation of Subsidiary Guaranty, Pledge Agreement and
Credit Agreement. The Guarantor hereby consents to the modification of the
Credit Agreement contemplated hereby and each of Company and the Guarantor
hereby acknowledge and agree that the guarantees contained in the Subsidiary
Guaranty, the pledge of stock contained in the Pledge Agreement and the
obligations contained in the Credit Agreement as modified hereby are, and
shall remain, in full force and effect.
SECTION 11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 12. Execution in Counterparts. This Amendment may be executed
by one or more of the parties to this Amendment on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Amendment
signed by all the parties shall be lodged with Company and the Administrative
Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
AURORA FOODS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
- Chief Financial Officer
SEA COAST FOODS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
- Chief Financial Officer
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK (formerly
known as The Chase Manhattan
Bank), as Administrative
Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
ANNEX I
Summary of Trade Creditor Lien
In consideration for the agreement of each vendor (individually, a
"Vendor" and collectively, "Vendors") that executes the Secured Trade Credit
Program Letter Agreement to participate in the Secured Trade Credit Program of
Aurora Foods Inc., a Delaware corporation (the "Company"), on the terms and
conditions contained in the Secured Trade Credit Program Terms and Conditions
and Statement of Qualifications of the Company (the "Statement of
Qualifications"; capitalized terms used and not defined herein shall have the
meaning provided in the Statement of Qualifications), the Company is granting
to [__________] (the "Collateral Agent"), for the ratable benefit of the
Vendors, pursuant to the Security Agreement, dated as of [_____], 2003 (the
"Security Agreement"), between the Company and the Collateral Agent, for as
long as each Vendor becomes and remains an Approved Trade Creditor, a junior
subordinated security interest in all of the personal property of the Company,
and all proceeds resulting from the sale or disposition of such personal
property outside of the ordinary course of business by or on behalf of the
holders of the Senior Obligations (defined below) or any Vendor (collectively,
the "Vendor Collateral"; provided that in no event shall the Vendor Collateral
include (i) any proceeds resulting from the sale or disposition of such
personal property in the ordinary course of business or (ii) any personal
property not subject to the security interest of the holders of the Senior
Obligations), to secure the obligations of the Company to the Vendor described
in paragraph 3 of the Statement of Qualifications (the "Secured Vendor
Obligations"), in all cases subject to the following terms and conditions:
1. The security interest granted to the Collateral Agent,
for the benefit of the Vendors, shall be subject and subordinate to
the following (collectively, the "Senior Obligations"):
(a) any and all liens granted under or pursuant to
(i) that certain Fifth Amended and Restated Credit Agreement
dated as of November 1, 1999 among the Company, JPMorgan
Chase Bank, as administrative agent, National Westminster
Bank PLC, as syndication agent and UBS AG, Stamford Branch,
as documentation agent and the financial institutions party
thereto, as the same may be amended, modified, supplemented
or restated from time to time (including, without
limitation, any modifications that may increase the
principal amount of loans or any other obligations able to
be incurred thereunder) (the "Credit Agreement"), (ii) each
and every credit facility that may directly or indirectly
refinance, or that may be entered into in addition to, the
Credit Agreement (including, without limitation, any
debtor-in-possession financing in any bankruptcy or similar
proceeding in respect of the Company or any of its
subsidiaries which is provided by one or more lenders
(including on a senior, priming basis under Section 364(d)
of the Bankruptcy Code)), in whole or part, as the same may
be amended, modified, supplemented or restated from time to
time (including, without limitation, any modifications that
may increase the principal amount of loans or any other
obligations able to be incurred thereunder) and/or (iii) any
document, instrument or agreement executed by the Company or
any of its subsidiaries in connection with any of the
facilities or agreements referred to in clauses (i) and
(ii), above, from time to time as the same may be amended,
modified, supplemented or restated from time to time;
(b) any and all liens granted by the Company in
favor of any financial institutions to secure hedging,
currency exchange, swap, cash management or letter of credit
obligations owed by the Company or any of its subsidiaries
to any such institutions from time to time; and
(c) any and all other liens and claims that are
prior in right or superior to those granted pursuant to any
of the documents, instruments, agreements or orders
referenced in clauses (a) or (b), above, including, without
limitation, any "carve-out" referred to in any of such
documents, instruments or agreements.
2. The security interest granted to the Collateral Agent
shall be for the ratable benefit of each of the Vendors. The security
interest of the Collateral Agent for the benefit of the Vendors in
any personal property of the Company shall automatically be released
and discharged upon the sale or other disposition of such personal
property by the Company in accordance with the terms and conditions
of the documents governing the Senior Obligations or by or on behalf
of any holder of any Senior Obligations or any release of such lien
by the holders of a majority of the Senior Obligations or any
representative acting on their behalf; provided, that the Collateral
Agent shall retain its security interest on behalf of the Vendors in
the proceeds of such personal property to the extent such proceeds
constitute Vendor Collateral, subject to the prior payment in full in
cash of the Senior Obligations.
3. Until and unless the Senior Obligations shall have been
paid in full in cash, and no financial institution or other holder of
the Senior Obligations shall have any commitment to provide the
Company or its subsidiaries with any loan, letter of credit or other
financial accommodation that would constitute Senior Obligations,
neither the Collateral Agent nor any Vendor shall be permitted to
exercise any rights or remedies with respect to the Vendor
Collateral, including any right to vote in any bankruptcy or similar
proceeding in respect of the Company or any of its subsidiaries with
respect to any interest in the Vendor Collateral, or any right to
foreclose or otherwise move or take action against the Vendor
Collateral, and shall not have any right to (a) object to the use of
cash collateral with respect to the Vendor Collateral in any
bankruptcy or similar proceeding in respect of the Company or any of
its subsidiaries, (b) seek any adequate protection or relief from the
automatic stay with respect to the Vendor Collateral in any
bankruptcy or similar proceeding in respect of the Company or any of
its subsidiaries, (c) object to the holders of the Senior Obligations
seeking any adequate protection or relief from the automatic stay
with respect to their collateral in any bankruptcy or similar
proceeding in respect of the Company or any of its subsidiaries, or
(d) direct any holder of any Senior Obligation (or any representative
thereof) with respect to any matters in connection therewith. Once
the Senior Obligations have been paid in full in cash, and provided
no commitment of any financial institution or other holder of any of
the Senior Obligations to provide the Company or its subsidiaries
with any loan, letter of credit or other financial accommodation that
would constitute Senior Obligations then exists, Vendors holding a
majority of the obligations secured by liens in the Vendor Collateral
granted pursuant to the Company's Secured Trade Credit Program may
direct the Collateral Agent to exercise such rights with respect to
the Vendor Collateral as they deem appropriate.
4. The holders of the Senior Obligations may at any time and
from time to time without the consent of or notice to the Collateral
Agent or the Vendors and without incurring liability to the
Collateral Agent or the Vendors, exercise any of their rights or
remedies with respect to their collateral (including the sale,
transfer or other disposition thereof) or increase the amount of the
Senior Obligations, change the manner or place of payment or extend
the time of payment of or renew or otherwise alter any Senior
Obligations, or amend in any manner any agreement, note, guaranty or
other instrument evidencing or securing or otherwise relating to any
of the Senior Obligations, including, without limitation, in respect
of borrowing base, advance rates or any reserves. The holders of the
Senior Obligations shall have no obligation to marshal any assets in
favor of the Collateral Agent or the Vendors.
5. The security interest granted hereunder, with respect to
any Vendor, shall terminate upon two weeks notice from the Company to
such Vendor. In addition, the security interest granted hereunder and
the terms and conditions applicable thereto may also be modified or
terminated from time to time by the Company by notice to the
Collateral Agent and the Vendors, provided, that no such modification
or termination that adversely affects the Collateral Agent or the
Vendors in any material respect shall be effective as to any Secured
Vendor Obligations outstanding, or Vendor Collateral existing, at the
time of such notice.
6. Neither the Collateral Agent nor the Vendors may assign
their rights and/or duties hereunder or under the Security Agreement
without the prior written consent of the Company given at the
Company's sole discretion; provided that Vendors may assign their
rights under the Trade Creditor Lien to any factor or other entity
that finances or insures such Vendor's receivables without the
Company's prior written consent, it being understood that any such
assignee's rights with respect to the Trade Creditor Lien shall be
limited as set forth herein. Any other attempted assignment without
the Company's prior written consent, other than as set forth in the
immediately preceding sentence, shall be void and shall void such
Vendor's participation in the Trade Creditor Lien in accordance with
the terms of the Statement of Qualifications. This Summary of Trade
Creditor Lien shall be interpreted under and in accordance with the
laws of the State of New York without giving effect to the conflicts
of laws principles thereof. The Collateral Agent and each Vendor
agrees that any dispute arising directly or indirectly out of or that
in any way relates to the Statement of Qualifications or this Summary
of Trade Creditor Lien shall be resolved by the Supreme Court of the
State of New York, sitting in New York County or the United States
District Court of the Southern District of New York and any relevant
appellate court of each of the foregoing and hereby consents to the
jurisdiction of such courts.