Exhibit 10.2
EXECUTION COPY
AMENDMENT, FORBEARANCE AND WAIVER
AMENDMENT, FORBEARANCE AND WAIVER, dated as of July 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:
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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;
WHEREAS, Company, Lenders and Agents have entered into an
Amendment and Forbearance dated as of June 30, 2003 (the "June 2003
Forbearance"); and
WHEREAS, Company has requested, and, upon this Amendment
becoming effective, the Lenders have agreed, that the forbearance granted
pursuant to the June 2003 Forbearance be modified and extended 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 as follows:
(i) The term "Secured Trade Credit Program" is hereby amended by
deleting the text thereof in its entirety and inserting in lieu thereof
the following:
"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 arising in connection with the
shipments of goods from such Vendor to Company, or the shipments of goods
by such Vendor to, from or otherwise on behalf of Company.
(ii) The term "Vendors" is hereby amended by deleting the text
thereof in its entirety and inserting in lieu thereof the following:
"Vendors" means those parties from time to time identified as
vendors or carriers party to a Letter Agreement, dated as of July 2, 2003,
from Company to such Vendor.
(b) Amendments to Subsection 6.5. Subsection 6.5 of the Credit
Agreement is hereby amended by deleting the last two sentences thereof in
their entirety and inserting in lieu thereof the following:
In addition, Company shall make its senior management
(including, without limitation, its chief restructuring officer and
chief financial officer), financial advisors and legal counsel
available by phone or in person to the Lenders for discussion of its
planned restructuring upon reasonable advance notice as often as may
be requested; provided that Company shall have the right to
participate in any such discussion with its financial advisors and
legal counsel.
SECTION 3. Extension of Initial Forbearance; Additional 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 any scheduled interest
payment required under (i) the Indenture dated as of July 1, 1998 with
Wilmington Trust Company, as Trustee, (ii) the Indenture dated as of February
10, 1997 with Wilmington Trust Company, as Trustee or (iii) the Indenture
dated as of July 1, 1997 with Wilmington Trust Company, as Trustee
(collectively, the "Specified Indentures"; and any such non-payment, the
"Specified Indenture Defaults"). The "Section 3 Termination Date" shall be the
earliest of (i) September 15, 2003, (ii) the date on which each Specified
Indenture Default has been cured or waived, through amendments to the
Specified Indentures or otherwise, so long as Company has delivered to the
Administrative Agent five days' prior written notice of its intent to cure any
Specified Indenture Default by payment, (iii) the date on which a notice of
acceleration under any Specified Indenture has been delivered to Company, (iv)
the date on which any other Event of Default or Potential Event of Default
shall arise or (v) the date on which Company shall fail to satisfy any of its
obligations set forth in Section 6 of this Amendment or the Requisite Lenders
provide a notice of termination as contemplated by paragraph (e) thereof.
(b) Each of the Lenders further agrees that any interest that would
otherwise accrue pursuant to subsection 2.2E of the Credit Agreement as a
result of any 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 as
granted or extended 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 any 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. Waiver. Any breach by Company of subsection 6.5 of the
Credit Agreement as a result of its failure to conduct the monthly conference
calls or provide progress reports regarding the completion of potential Asset
Sales as described therein, and any Event of Default or Potential Event of
Default arising therefrom, is hereby waived.
SECTION 5. 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) Holders of the Subordinated Notes under each Specified Indenture
representing a majority of the principal amount of such Subordinated Notes (or
such holders representing a lesser percentage of such Subordinated Notes as
shall be acceptable to the Administrative Agent) shall have agreed to forbear
with respect to each Specified Indenture Default (any such forbearance to
extend at least until the Section 3 Termination Date, as defined herein);
(c) 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; and
(d) 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.
SECTION 6. Covenants of Company. To induce the Lenders parties hereto
to enter into this Amendment, Company hereby covenants and agrees that, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform all covenants in this Section 6. Failure to comply with any of these
covenants will constitute an immediate Event of Default.
(a) Company shall deliver to the Administrative Agent, in form and
substance reasonably satisfactory to the steering committee of the Lenders
(the "Steering Committee"), any first-day orders, whether in draft or final
form, that contemplate payments in respect of pre-petition obligations,
including any "critical vendor" motions, on or before August 15, 2003;
(b) Company shall deliver to the Administrative Agent, in form and
substance reasonably satisfactory to the Steering Committee, any documents,
whether in draft or final form, related to a plan of reorganization (a "Plan
of Reorganization") and any disclosure statement in connection with a petition
under Chapter 11 of the United States Bankruptcy Code contemporaneously with
the delivery of such documents to ▇.▇. Childs Equity Partners III, L.P. ("▇.▇.
Childs"), and in any event by no later than August 15, 2003;
(c) Company shall make its senior management (including, without
limitation, its chief restructuring officer and chief financial officer),
financial advisors and legal counsel available by phone or in person to the
steering committee representing the Lenders for an update with respect to
pending restructuring matters by no later than August 22, 2003; provided that
Company shall have the right to participate in any such discussion with its
financial advisors and legal counsel;
(d) Company shall promptly deliver to the Administrative Agent any
and all term sheets, letters of interest and other expressions of interest
relating to a "stand-alone" proposal and any Plan of Reorganization or
counterproposals relating to restructuring matters of Company, in each case
offered by the holders of Company's Subordinated Notes or their affiliates or
representatives; and
(e) Company shall use its reasonable best efforts (i) to obtain a
commitment in respect of a new credit facility that will provide Company with
the appropriate level of liquidity needed as a debtor-in-possession under
Chapter 11 of the United States Bankruptcy Code, and (ii) to assist ▇.▇.
Childs concerning, and to engage in discussions with one or more financial
institutions concerning, the new financings to be contemplated by the Plan of
Reorganization to be submitted by Company to the United States Bankruptcy
Court for the District of Delaware or any other court having jurisdiction.
Company shall provide regular updates to FTI Consulting with respect to the
foregoing, and shall provide such information and materials relating thereto
as may be reasonably requested by FTI Consulting and may be disclosed to FTI
Consulting, it being understood that if the Requisite Lenders, as advised by
FTI Consulting, determine that they are not reasonably satisfied with the
progress being made for such new credit facility and such new financings, the
Requisite Lenders may terminate the agreement set forth in Section 3(a) of
this Amendment by written notice to Company.
SECTION 7. Representations and Warranties. As further consideration
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 8. 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 9. 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 and the waiver set
forth in Section 4 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 10. Acknowledgment of Performance Under Letter Agreement. The
Lenders and the Agents acknowledge and agree that all obligations and
undertakings set forth in that certain letter agreement dated June 30, 2003
have been satisfied; provided that with respect to the documents required to
be delivered pursuant to paragraphs (1) and (2) therein, Company shall cause
such documents to be updated, in form and substance satisfactory to the
Steering Committee, by no later than August 31, 2003.
SECTION 11. 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 11.
SECTION 12. 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 13. 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 14. 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: CRO
SEA COAST FOODS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: CRO
▇▇ ▇▇▇▇▇▇ CHASE BANK (formerly
known as The Chase Manhattan
Bank), as Administrative Agent an
Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
