-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VIEjN+DJtmrB/t/jU9K6vqik10DaAMzJwENElKKS4q1+INvmrYdAOBN7QRH7UuEm 0wFR2WheOcUmLv2PBn4/NA== 0000950172-03-002208.txt : 20030724 0000950172-03-002208.hdr.sgml : 20030724 20030703170017 ACCESSION NUMBER: 0000950172-03-002208 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030701 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA FOODS INC /DE/ CENTRAL INDEX KEY: 0001060024 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 943303521 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14255 FILM NUMBER: 03775748 BUSINESS ADDRESS: STREET 1: 11432 LACKLAND ROAD STREET 2: . CITY: ST LOUIS STATE: MO ZIP: 63146 BUSINESS PHONE: 3148012300 MAIL ADDRESS: STREET 1: 11432 LACKLAND ROAD STREET 2: . CITY: ST LOUIS STATE: MO ZIP: 63146 FORMER COMPANY: FORMER CONFORMED NAME: A FOODS INC DATE OF NAME CHANGE: 19980623 FORMER COMPANY: FORMER CONFORMED NAME: AURORA FOODS INC /MD/ DATE OF NAME CHANGE: 19980417 8-K 1 s781372.txt ============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 _______________________ Date of report (Date of earliest event reported): July 3, 2003 (July 1, 2003) AURORA FOODS INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 001-14255 94-3303521 (STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER OF INCORPORATION OR IDENTIFICATION NUMBER) ORGANIZATION) 11432 Lackland Road St. Louis, Missouri 63146 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE) (314) 801 - 2300 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) N/A (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF APPLICABLE) ============================================================================== ITEM 5. OTHER EVENTS. On July 2, 2003, Aurora Foods Inc. (the "Company") issued a press release announcing that it is undertaking a comprehensive financial restructuring. As part of such restructuring, on July 1, 2003, the Company entered into an agreement in principle ("Agreement in Principle") with J.W. Childs Equity Partners III, L.P. (the "Investor"), an affiliate of J.W. Childs Associates, L.P., pursuant to which the Investor will make an investment of $200 million for a 65.6 percent equity interest in the reorganized Company. The Company also announced that it has begun discussions with its bank lenders and bondholders regarding the terms of such restructuring. In addition, the Company announced that it has launched, with the support of its bank lenders, a vendor lien program under which the Company is offering vendors the ability to obtain a junior lien on substantially all of the Company's assets for shipments made on customary terms. JPMorgan Chase, the Company's agent bank, has also agreed to continue to provide the Company with up to $30 million in accounts receivable financing pursuant to its existing receivables facility. The Company also announced that, in connection with the restructuring, it has elected to defer the $8.8 million interest payment due July 1, 2003 on its outstanding 8.75% senior subordinated notes. The press release is attached hereto as Exhibit 99 and is incorporated herein by reference. The Agreement in Principle is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The Amendment and Forbearance, dated as of June 30, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of November 1999, among the Company, the financial institutions party thereto and the agents thereunder and the Letter Agreement related thereto, dated June 30, 2003 between the Company and JPMorgan Chase Bank are attached hereto as Exhibits 10.2 and 10.3, respectively, and are incorporated herein by reference. ITEM 7. EXHIBITS. (c) Exhibits. Exhibit No. Description - ---------- ----------- 10.1 Agreement in Principle, dated July 1, 2003, by and between Aurora Foods Inc. and J.W. Childs Equity Partners III, L.P. 10.2 Amendment and Forbearance, dated as of June 30, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of November 1999, among the Company, the financial institutions party thereto and the agents 10.3 Letter Agreement, dated June 30, 2003, between the Company and JPMorgan Chase Bank 99 Press Release dated July 2, 2003 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AURORA FOODS INC. By: /s/ Richard A. Keffer -------------------------- Name: Richard A. Keffer Title: General Counsel and Secretary July 3, 2003 AURORA FOODS INC. CURRENT REPORT ON FORM 8-K REPORT DATED JULY 3, 2003 EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 10.1 Agreement in Principle, dated July 1, 2003, by and between Aurora Foods Inc. and J.W. Childs Equity Partners III, L.P. 10.2 Amendment and Forbearance, dated as of June 30, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of November 1999, among the Company, the financial institutions party thereto and the agents 10.3 Letter Agreement, dated June 30, 2003, between the Company and JPMorgan Chase Bank 99 Press Release dated July 2, 2003 EX-10 3 s781480.txt EX. 10.1 CONFIDENTIAL July 1, 2003 Aurora Foods Inc. 11432 Lackland Road St. Louis, Missouri 63146 Re: Agreement in Principle Dear Sirs and Madams: This letter, upon your execution and return, will confirm our Agreement in Principle for an investment (the "Investment") in Aurora Foods Inc., a Delaware corporation (the "Company"), by J.W. Childs Equity Partners III, L.P. (the "Investor") on the terms and conditions set forth herein. The Investor understands and acknowledges that the Investment will be made in the context of the Company's restructuring (the "Restructuring") of its current capital structure to, among other things, reduce its outstanding indebtedness and resolve liquidity issues that it currently faces. 1. Investment. The Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, shares of common stock, par value $0.01 per share ("Common Stock"), of the Company substantially on the terms set forth herein and on the Term Sheet attached hereto as Annex A ("Term Sheet"). 2. Definitive Agreement. The Company and the Investor shall negotiate in good faith and use reasonable best efforts to enter into, on or before July 9, 2003, a definitive stock purchase agreement ("Definitive Agreement") in form and substance reasonably acceptable to the Company and the Investor, which Definitive Agreement shall contain reasonable and customary representations and warranties (none of which will survive closing), agreements, covenants and conditions providing for consummation of the Investment. 3. Exclusivity. The Company shall not, and the Company shall require each of its affiliates and their respective officers, directors, employees, representatives and agents not to, directly or indirectly, (i) initiate, solicit, encourage or otherwise facilitate any inquiry, proposal, offer or discussion with any party (other than the Investor) concerning any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale or license of material assets or similar business transaction involving the Company, (ii) furnish any non-public information concerning the business, properties or assets of the Company to any party (other than the Investor) or (iii) engage in discussions or negotiations (other than the Investor) with respect to, or consummate, any such transaction. The Company shall immediately notify any party with which discussions or negotiations of the nature described in this paragraph 3 are pending that the Company is terminating such discussions or negotiations. If the Company receives any inquiry, proposal or offer of the nature described in this paragraph 3, the Company shall, within one business day after such receipt, notify the Investor of such inquiry, proposal or offer, including the identity of the other party and the terms of such inquiry, proposal or offer. Notwithstanding the provisions of paragraph 7 hereof, the exclusivity provisions set forth in this paragraph 3 shall automatically terminate on the sooner of (i) the execution and delivery of the Definitive Agreement or (ii) 5:00 p.m. New York City time on July 9, 2003. 4. Access to Information. The Company shall continue to provide the Investor and its accountants, attorneys and other representatives and agents with access to its offices, facilities, properties, documents, records, and other information (including legal, financial and operating data), and shall make its officers, employees, agents, accountants, and representatives available to answer the Investor's (or its representatives or agents) inquiries concerning the Company's business, operations, financial condition, assets, liabilities, and all other matters relevant to the Investment . 5. Public Announcements. The Company shall disclose the contents of any public statement relating to this Agreement in Principle to the Investor, and give the Investor the opportunity to comment thereon, prior to public disclosure thereof, and shall incorporate the Investor's reasonable comments to the same. 6. Confidentiality. The Company and the Investor acknowledge and agree that (i) the Confidentiality Agreement, dated October 2, 2002, between the Merrill Lynch & Co., as agent for the Company and its affiliates, has been terminated and is no longer in force or effect and (ii) the transactions contemplated by this Agreement in Principle are subject to the Confidentiality, Secrecy and Non-Disclosure Agreement dated March 25, 2003 ("Confidentiality Agreement") between the Company and the Investor; provided, however that notwithstanding anything in the Confidentiality Agreement, the parties (and each employee, representative, or other agent of the parties) may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the Restructuring beginning on the earliest of (i) the date of the public announcement of discussions relating to the Restructuring, (ii) the date of public announcement of the Restructuring, or (iii) the date of the execution of an agreement (with or without conditions) to enter into the Restructuring, provided, however, that neither party (nor any employee, representative or other agent thereof) may disclose any other information that is not relevant to understanding the tax treatment and tax structure of the Restructuring (including the identity of any party and any information that could lead another to determine the identity of any party), or any other information to the extent that such disclosure could result in a violation of any federal or state securities law. 7. Termination. This agreement in principle (i) shall terminate automatically upon the execution of the Definitive Agreement and (ii) may be terminated by either party, on or after July 9, 2003, by providing written notice of such termination to the other party, if the Definitive Agreement has not been executed prior to that date. 8. Amendments and Waivers. This Agreement in Principle may be amended or modified and the observance of any term of this Agreement in Principle may be waived only with the mutual written consent of the Company and the Investor. 9. Cost and Expenses. Except as may be otherwise provided in the Definitive Agreement, the Investor, on the one hand, and the Company, on the other hand, shall each bear all of its own costs and expenses incurred in connection with this Agreement in Principle and the transactions contemplated hereby, including the fees and expenses of any financial advisor, counsel, accountants or other representative retained by it or them. 10. Agreement in Principle. The parties hereto understand and agree that, except as set forth in the last sentence of this paragraph, this Agreement in Principle constitutes only a statement of mutual intentions with respect to the Investment, does not constitute an obligation binding on each side and does not contain all matters upon which agreement must be reached for the Investment to be consummated. A binding commitment with respect to the Investment will result only from the execution of the Definitive Agreement, subject to the conditions expressed therein. Notwithstanding the two preceding sentences of this paragraph, the provisions of paragraphs 2 through 9 (inclusive) and paragraph 11 are agreed to be binding on the parties hereto. 11. Governing Law. This agreement in principle and any claim related directly or indirectly to this agreement in principle shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws principles thereof. Each of the Company and the Investor represent and warrant that it is duly authorized to execute and deliver and perform its obligations under this Agreement in Principle. If the foregoing accurately reflects the agreement between us, kindly so indicate by causing a copy hereof to be signed below and returned to the undersigned. Very truly yours, J.W. Childs Equity Partners III, L.P. By: J.W. Childs Advisors III, L.P., its general partner By: J.W. Childs Associates, L.P., its general partner By: J.W. Childs Associates, Inc., its general partner By: /s/ Adam L. Suttin ------------------------ Adam L. Suttin Vice President Accepted and agreed to As of the date first written above: Aurora Foods Inc. By: /s/ Dale F. Morrison ------------------------------ Dale F. Morrison Chairman and Interim Chief Executive Officer ANNEX A AURORA FOODS INC. SALE OF COMMON STOCK TERM SHEET Capitalized terms used but not defined herein have the meanings ascribed to them in the Agreement in Principle to which this Term Sheet is annexed. Issuer: Aurora Foods Inc. (the "Company") Type of Security: Common Stock Amount: $200 million (the "Investment") Investor: J.W. Childs Equity Partners III, L.P. (the "Investor") Transaction Value: Approximately $925 million New Capital Structure (Debt): The parties intend to effect the Restructuring in a bankruptcy reorganization case, and, in connection therewith, to propose a plan of reorganization that provides the following new debt structure on the effective date of the Restructuring (the "Effective Date"): Secured Credit Facility: The existing $655.7 million senior secured credit facility shall be reduced in principal amount by approximately $67.3 million, with the remaining balance being refinanced via a new approximately $391 million senior secured credit facility and approximately $197.4 million in new senior unsecured notes. The Company will also seek to raise a new approximately $50 million revolving credit facility, which shall be undrawn at closing A/R Securitization Facility: The existing A/R securitization facility with $16.3 million outstanding shall be terminated. Senior Unsecured Notes: The 12% senior unsecured notes and warrants due 2006 in the aggregate principal amount of $29.1 million shall be refinanced via approximately $29.1 million in new senior unsecured notes. Subordinated Notes: Holders of the subordinated debt shall receive approximately $110 million in cash and approximately 29.5% (approximately $90 million) of the post-restructuring common shares outstanding New Capital Structure The parties intend to implement the following (Equity): new equity structure on the Effective Date: Investor: The Investor shall receive 65.6% (approximately $200 million) of the post-restructuring common shares outstanding Existing Subordinated Notes: The holders of the existing senior subordinated notes will receive approximately 29.5% (approximately $90 million) of the post-restructuring common shares outstanding Existing Common and Preferred Equity: The holders of the existing common and preferred stock shall be entitled to receive approximately 4.9% (approximately $15 million) of the post-restructuring common shares outstanding Cash Sources and Uses: Cash Sources: $MM ------------ --- New Senior Term Loan $391.0 JWC Equity Investment 200.0 Net Cash at Closing 4.6 ------ Total $595.6 ====== Cash Uses: $MM --------- --- Repay A/R Securitization Facility $16.3 Cash to Senior Secured Debt 458.3 Cash to Senior Sub Note Holders 110.0 Transaction Expenses 11.0 ------ Total $595.6 ====== Management: Lawrence K. Hathaway would be named CEO following the Closing Management Options: Management shall be eligible to purchase common equity through a management option plan. Options will vest based on time and achievement of certain agreed upon performance targets Board Representation: The Investor shall be entitled to designate a majority of the Board members Break-Up Fee: A break-up fee and expense reimbursement in the aggregate amount of $10 million shall be payable to the Investor upon circumstances to be mutually agreed EX-10 4 s781909.txt EX. 10.2 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/ William R. McManaman ---------------------------- Name: William R. McManaman Title: Executive Vice President - Chief Financial Officer SEA COAST FOODS, INC. By: /s/ William R. McManaman --------------------------- Name: William R. McManaman Title: Executive Vice President - Chief Financial Officer JP MORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as Administrative Agent and Lender By: /s/ Thomas F. Maher --------------------------- Name: Thomas F. Maher 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. EX-10 5 s437326.txt EX. 10.3 [LETTERHEAD OF AURORA FOODS INC.] June 30, 2003 JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Administrative Agent, on behalf of the Lenders 270 Park Avenue New York, New York 10017 Ladies and Gentlemen: Reference is made to the Fifth Amended and Restated Credit Agreement, dated as of November 1, 1999, among Aurora Foods Inc. (the "Company"), the financial institutions from time to time parties thereto and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as administrative agent (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement. To induce the Lenders to enter into the Amendment and Forbearance, dated as of June 30, 2003, to the Credit Agreement, Company hereby agrees to deliver to the Administrative Agent, for distribution to the Lenders, each of the following: (1) by no later than July 18, 2003, a detailed consolidated budget for the period from August 1, 2003 through December 31, 2004 (including a projected consolidated balance sheet of the Borrower and its Subsidiaries, the related consolidated statements of projected cash flow, projected changes in financial position and projected income and a description of the underlying assumptions applicable thereto) prepared on the assumption that Company will operate as a debtor-in-possession under Chapter 11 of the Bankruptcy Code during such period; (2) by no later than July 18, 2003, a draft contingency plan for Company and its subsidiaries for operating as debtors-in-possession; (3) by no later than July 10, 2003, a draft term sheet detailing new equity to be invested in Company and/or the restructuring plan for Company and its subsidiaries; and (4) contemporaneously with the execution of this letter agreement, a copy of the notice sent by Company to each M&A Advisor requesting that such M&A Advisor release for distribution to the Administrative Agent and the Lenders by no later than July 7, 2003, any M&A books prepared by such M&A Advisor. Company agrees to make its M&A Advisors available by July 14, 2003 for discussion of any M&A activity contemplated currently or previously by Company and its subsidiaries; provided that Company shall have the right to participate in any such discussion. Company acknowledges that FTI Consulting has been engaged by the Lenders' counsel and agrees to (i) pay all reasonable fees, expenses and disbursements of FTI Consulting (including, without limitation, a retainer of $150,000) in connection with its engagement relating to the Credit Agreement and the transactions contemplated thereby and (ii) provide FTI Consulting reasonable access to all business records and appropriate personnel (including, without limitation, Company's accountants, auditors, consultants and financial advisors, including Miller Buckfire Lewis & Co., the consultant engaged by Company's counsel) to facilitate FTI Consulting's review and analysis. Company agrees that a breach of any of the provisions of this letter agreement shall constitute an immediate Event of Default under the Credit Agreement. This letter agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. AURORA FOODS INC. By: /s/ William R. McManaman ----------------------------- Name: William R. McManaman Title: Executive Vice President - Chief Financial Officer Acknowledged and Agreed: JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as Administrative Agent, on behalf of the Lenders By: /s/ Thomas F. Maher -------------------------------- Name: Thomas F. Maher Title: Managing Director EX-99 6 aurorapress.txt EX. 99 [AURORA LOGO OMITTED] News Contacts: Ron Hutchison Aurora Foods Inc. 314-801-2310 Chuck Dohrenwend Alan Oshiki Broadgate Consultants, Inc. 212-232-2222 FOR IMMEDIATE RELEASE - --------------------- AURORA FOODS ENTERS INTO AGREEMENT IN PRINCIPLE FOR $200 MILLION EQUITY INVESTMENT FROM J.W. CHILDS ASSOCIATES, L.P. NEW EQUITY LINKED TO COMPREHENSIVE FINANCIAL RESTRUCTURING TO REDUCE DEBT ______________________________________________________ St. Louis, July 2, 2003 - Aurora Foods Inc. (NYSE: AOR), a producer and marketer of leading food brands, announced today that it is undertaking a comprehensive financial restructuring designed to reduce its outstanding indebtedness, strengthen its balance sheet and improve its liquidity. As part of the restructuring, Aurora has entered into an agreement in principle with J.W. Childs Associates, L.P. (J.W. Childs), a Boston-based private equity investment firm with over $3.4 billion of equity capital under management, pursuant to which J.W. Childs will make an investment of $200 million for a 65.6% equity interest in the reorganized Company at a transaction value of approximately $925 million. Aurora also announced that it has begun discussions with its bank lenders and bondholders regarding the terms of the restructuring. In addition, Aurora launched, with the support of its bank lenders, a vendor lien program under which the Company is offering vendors the ability to obtain a junior lien on substantially all of the Company's $1.2 billion in assets for shipments made on customary terms. The lien would cover all existing and future trade obligations from participating vendors. JPMorgan Chase, the Company's agent bank, has also agreed to continue to provide the Company with up to $30 million in accounts receivable financing. "Since my arrival last September, we have been focused on two primary objectives to ensure the future success and growth of Aurora Foods," said Dale F. Morrison, the Chairman and interim Chief Executive Officer of the Company. "Our first objective was to strengthen our financial condition by improving operations and reducing costs. We have made good progress in this area that will provide a solid foundation for future growth. The second key objective was to significantly reduce our balance sheet leverage. To achieve this objective, we have been proactively pursuing a number of strategic options, including actively working our divestiture process, evaluating various restructuring alternatives and, finally, identifying and working with a number of private equity firms regarding an infusion of new equity capital in the Company." "The transaction announced today is the result of these efforts," said Mr. Morrison. "We believe that this comprehensive restructuring, combined with the new equity investment from J.W. Childs, provides the best path for reducing our balance sheet leverage, optimizing value for all stakeholders, and leaving Aurora well positioned for the future." In connection with the restructuring, Aurora also announced that it has elected to defer the $8.8 million interest payment due July 1, 2003 on its outstanding 8.75% senior subordinated notes. Under the indenture for the 8.75% senior subordinated notes, there is a 30-day grace period for interest payments. As part of the restructuring, the Company's bank lenders have agreed not to exercise any remedies available to them during the grace period. Under the terms of the agreement in principle, J.W. Childs will purchase a 65.6% equity stake in Aurora for $200 million and the Company's existing $400 million in subordinated debt will be converted into a combination of equity and cash. The investment will be used to reduce the Company's outstanding bank debt and subordinated debt as well as for working capital purposes. "Aurora has made great strides toward improving its operations and reducing its cost structure, and we believe the proposed restructuring will leave the Company on a strong financial footing," said John W. Childs, President and founder of J.W. Childs Associates, L.P. "Aurora has widely recognized premium brands and strong market share and we look forward to working with the Company to build on the progress made to date and ensure its long term success." The agreement in principle provides that the restructuring will include the following elements: o The Company's existing bank lenders will be paid in full, receiving approximately $458 million in cash and approximately $197 million in new senior unsecured notes with a ten-year maturity. Aurora and J.W. Childs intend to raise approximately $441 million of new bank financing in connection with the restructuring, including a $50 million revolving credit facility (which is expected to be undrawn upon the closing of the transactions contemplated by the agreement in principle). o The Company's existing accounts receivable sales facility will be paid down and terminated. o Holders of the Company's 12% senior unsecured notes due 2006 will receive new senior unsecured notes in the principal amount of approximately $29 million and with a ten-year maturity. o Holders of the Company's outstanding 8.75% and 9.875% senior subordinated notes due 2008 and 2007, respectively, will receive a 50% recovery on their notes consisting of cash in the aggregate amount of approximately $110 million and approximately 29.5% (approximately $90 million) of the post-restructuring common stock. o Existing common and preferred stockholders will receive approximately 4.9% (approximately $15 million) of the post-restructuring common stock, and the existing common and preferred shares will be cancelled in connection with the restructuring. The agreement in principle contemplates that the transaction with J.W. Childs will be effected through a pre-negotiated bankruptcy reorganization case. The Company intends to conduct its business in the ordinary course during the restructuring and believes that the transactions contemplated by the agreement in principle will not affect its ability to service its customers or pay its suppliers in full. Concurrently with the closing of the transactions contemplated by the agreement in principle, J.W. Childs expects that Lawrence K. Hathaway will be appointed Chief Executive Officer of the Company. Mr. Hathaway is the former President and Chief Operating Officer of International Home Foods and has more than 30 years of consumer packaged goods experience with the last 15 years in the food industry. The Company also announced that it has retained the firm of Miller Buckfire Lewis Ying & Co., LLC as its financial advisor in its restructuring efforts. Additionally, Ronald B. Hutchison has been appointed to the newly created position of Chief Restructuring Officer. Mr. Hutchison brings over 15 years of successful restructuring experience to Aurora. Finally, the Company has appointed Richard A. Keffer, who has over 12 years of food industry experience, as General Counsel. The Company has notified the New York Stock Exchange about its plans to restructure its balance sheet and the terms thereof. As previously disclosed, the Company does not currently meet certain minimum listing standards of the Exchange. Consequently, the Company's previously announced proposal for a reverse stock split is being reevaluated in light of the overall restructuring. As of June 30, 2003, the Company had liquidity of approximately $27 million, which was comprised of cash and availability under the accounts receivable sales facility. About Aurora Foods Inc. - ---------------------- Aurora Foods Inc., based in St. Louis, Missouri, is a producer and marketer of leading food brands, including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast products; Celeste(R) frozen pizza and Chef's Choice(R) skillet meals. More information about Aurora may be found on the Company's Web site at www.aurorafoods.com. CAUTIONARY NOTE: Statements contained in this press release that are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from the forward-looking statements contained in this release and which may affect the Company's prospects in general. For a summary of such risks and uncertainties, see the Company's periodic reports and other filings with the Securities and Exchange Commission. The securities that may be offered in connection with the restructuring have not been and may not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of those securities. The agreement in principle is subject to negotiation and execution of definitive documentation. No assurance can be given that such documentation will be executed. The agreement in principle with J.W. Childs Associates, L.P. is being filed with the Securities and Exchange Commission on a Current Report on Form 8-K. # # # -----END PRIVACY-ENHANCED MESSAGE-----