-----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, FK5XWoh5H9MojrCDyIkKpUBP5hb6yskz6uWy/JRxLiUgfMYvfd3B7ar3m/Bhwtqr ht1sqh9wYdzQtmnX3mzsKw== 0000950172-03-003014.txt : 20031014 0000950172-03-003014.hdr.sgml : 20031014 20031014153529 ACCESSION NUMBER: 0000950172-03-003014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031013 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031014 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: 03939436 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 s816453.txt FORM 8-K =============================================================================== 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): OCTOBER 14, 2003 (OCTOBER 13, 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 October 14, 2003, Aurora Foods Inc. (the "Company") issued a press release announcing that it has revised its previously announced financial restructuring and has entered into a letter of intent, dated October 13, 2003 ("Letter of Intent"), with J.P. Morgan Partners LLC ("JPMP"), J.W. Childs Equity Partners III, L.P. ("JWC"), an informal committee of bondholders representing approximately 50% of the Company's outstanding senior subordinated notes and C. Dean Metropoulos and Co. ("CDM"). Pursuant to the Letter of Intent, the Company's previous agreement with JWC will be amended to provide for a comprehensive restructuring transaction in which the Company will be combined with Pinnacle Foods Corporation ("Pinnacle"). The Company also announced that the revised restructuring transaction has received the support of its senior lenders. The Letter of Intent, a copy of which is filed as an Exhibit hereto, contains additional detail regarding the terms of the transaction, including assumed equity valuations of Aurora and Pinnacle. Such valuations reflect the basis upon which the parties negotiated and agreed upon the terms of the transaction, and do not necessarily reflect actual values. The transaction is subject to a number of conditions, including consummation of the acquisition of Pinnacle by an investment entity to be owned by JPMP, JWC and CDM, completion of due diligence, negotiation and execution of definitive agreements, receipt of financing, bankruptcy court approvals and regulatory approvals. The Company also announced that on October 13, 2003, in connection with the execution of the Letter of Intent, it entered into an Amendment and Forbearance ("Amendment and Forbearance") with its existing bank lenders that, among other things, provides for (i) a reduction in the leverage and asset sale fees under the Company's existing credit facility to an aggregate of $15 million in the event that certain conditions are satisfied, including the payment in full of the Company's obligations under its existing credit facility by March 31, 2004, (ii) an increase in the leverage and asset sale fees under the credit facility to 5.25% of the aggregate amount outstanding in the event that the credit facility is not paid in full by March 31, 2004, and (iii) the forbearance by the existing bank lenders from exercising remedies under the existing credit facility arising from the Company's failure to make interest payments on its senior subordinated notes or failure to make principal payments under its existing credit facility. The press release is attached hereto as Exhibit 99 and is incorporated herein by reference. The Letter of Intent and Amendment and Forbearance are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. ITEM 7. EXHIBITS. (c) Exhibits. Exhibit No. Description - ---------- ----------- 10.1 Letter of Intent, dated as of October 13, 2003, among Aurora Foods Inc., the Informal Bondholder Committee of Aurora Foods Inc., J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P. and C. Dean Metropoulos and Co. 10.2 Amendment and Forbearance, dated as of October 9, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of November 1, 1999, as amended, among Aurora Foods Inc., the financial institutions party thereto and the agents 99 Press Release, dated October 14, 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 October 14, 2003 AURORA FOODS INC. CURRENT REPORT ON FORM 8-K REPORT DATED OCTOBER 14, 2003 EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 10.1 Letter of Intent, dated as of October 13, 2003, among Aurora Foods Inc., the Informal Bondholder Committee of Aurora Foods Inc., J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P. and C. Dean Metropoulos and Co. 10.2 Amendment and Forbearance, dated as of October 9, 2003, to the Fifth Amended and Restated Credit Agreement, dated as of November 1, 1999, as amended, among Aurora Foods Inc., the financial institutions party thereto and the agents 99 Press Release, dated October 14, 2003 EX-10 3 ny816510.txt EXH. 10.1 - LETTER OF INTENT Exhibit 10.1 Letter of Intent This letter of intent, dated as of October 13, 2003, expresses the intention of Aurora Foods Inc. ("Aurora"), the Informal Bondholder Committee of Aurora (the "Committee"), J.P. Morgan Partners LLC ("JPMP"), J.W. Childs Equity Partners III, L.P. ("Childs" and, together with JPMP, the "New Equity Investors") and C. Dean Metropoulos and Co. ("CDM") to negotiate in good faith with a view toward entering into a definitive amended and restated stock purchase agreement among the New Equity Investors, CDM and Aurora (the "Amended SPA"), in accordance with the principal terms set forth below, by October 31, 2003. 1. Overview. Following the acquisition of Pinnacle Foods, Inc. ("Pinnacle") by the New Equity Investors and CDM, and the reorganization of Aurora described below, Pinnacle would combine with Aurora based on an assumed $310 million equity value for reorganized Aurora and $190 million equity value for Pinnacle, subject to adjustment as set forth below. It is understood that the movement from $185 million to $190 million in the Pinnacle equity value resulted from an additional equity investment of $5 million by the New Equity Investors. The combination would take place pursuant to a prearranged plan of reorganization of Aurora under Chapter 11 of the U.S. Bankruptcy Code (the "Plan") to be filed as soon as practicable after the date hereof and execution and delivery of the Amended SPA. 2. Aurora Restructuring. Pursuant to the Plan: o The holders of the 9 7/8% Senior Subordinated Notes due 2007, the 9 7/8% Series C Senior Subordinated Notes due 2007 and the 8 3/4% Senior Subordinated Notes due 2008 (collectively, the "Senior Subordinated Notes") will receive, in exchange for all of their Senior Subordinated Notes and claims, 69.1% of the common stock of Aurora on a fully diluted basis, having an equity value of $225 million. The assumed equity value and percentage of Aurora common stock allocable to the holders of the Senior Subordinated Notes are subject to adjustment as described below under "Adjustment of Aurora Equity Value", "Cash-Out Option" and "Subscription Option". o The New Equity Investors will contribute $83.75 million to Aurora in cash in exchange for 25.7% of the common stock of Aurora on a fully diluted basis (the "New Equity Investment"). CDM will be deemed to contribute $1.0 million to Aurora and will contribute $0.25 million in cash or other value in exchange for 5.2% of the fully diluted Aurora common stock. The percentage of Aurora common stock allocable to the New Equity Investors and CDM is subject to adjustment as described below under "Adjustment of Aurora Equity Value", "Cash-Out Option" and "Subscription Option". o All cash of Aurora above $25 million (other than cash raised in the Subscription Option) will be used be reduce Aurora's indebtedness under the Fifth Amended and Restated Credit Agreement, dated as of November 1, 1999, as amended (the "Secured Facility"). o Aurora's obligations under the Secured Facility, the 12% Senior Unsecured Notes of Aurora (less original issue discount from the par value of such notes of $1.9 million, which will be foregone) and any debtor-in-possession financing of Aurora will be paid off in cash at par plus accrued interest (but excluding (x) the amount of any default interest payable to the lenders under the Secured Facility other than the Paid Default Interest (as defined below) and (y) any fees that may otherwise be payable other than $15 million payable to lenders under the Secured Facility (such $15 million in fees the "Bank Fees")) through high-yield and bank financings (the "Financing") on market terms reasonably satisfactory to the New Equity Investors and the Committee and the proceeds of the Subscription Option described in paragraph 6. Any capital leases of Aurora will either be refinanced as a part of the Financing or will be left unaffected by the Chapter 11 case. The funding of any Paid Default Interest incurred after October 31, 2003 will be as agreed by the parties. o Aurora's existing A/R securitization facility will be terminated. o All currently outstanding shares of common stock and preferred stock of Aurora will be cancelled and their holders will not be entitled to receive any distribution with respect to such shares. 3. Certain Fees and Expenses. Upon consummation of the New Equity Investment, the New Equity Investors and CDM will be entitled to receive from Aurora a transaction fee and the deemed equity credit described above in the aggregate amount of $3.0 million. Unreimbursed transaction expenses of the New Equity Investors, the Committee and CDM will be reimbursed at closing. 4. Adjustment of Aurora Equity Value. The $310 million assumed equity value of Aurora, and the percentage of Aurora common stock allocable to the holders of the Senior Subordinated Notes and the New Equity Investors, will be subject to a pre-closing adjustment with a post-closing "true-up" as follows: o If Net Debt (as defined below) minus Working Capital (as defined below) is greater than $609.9 million or less than $595.9 million, there would be a dollar-for-dollar reduction or increase, as the case may be, in the assumed equity value of Aurora. o "Net Debt" means the amount of Net Debt (as defined in the Stock Purchase Agreement, dated as of July 11, 2003, by and between Aurora and Childs (the "Original SPA")) immediately prior to confirmation of the Plan (prior to the New Equity Investment and prior to payment of certain transaction fees). All transaction fees and expenses will be paid as incurred by Aurora, with the exception of the following, which are intended to be paid at closing to the extent provided for in the order of the bankruptcy court (the "Order"): (i) fees payable in connection with the Financing; (ii) the Miller Buckfire transaction fee; (iii) the Houlihan Lokey transaction fee; and (iv) the transaction fees and expenses of the New Equity Investors, the Committee and CDM. Except as provided in the fourth bullet of this Section 4, all other expenses will increase Net Debt or reduce Working Capital. o "Working Capital" means the amount of Working Capital (as defined in the Original SPA) of Aurora immediately prior to confirmation of the Plan (prior to the New Equity Investment and prior to payment of any transaction fees as set forth in the preceding subparagraph). o In calculating Net Debt and Working Capital, the following amounts shall be excluded: (i) any amounts paid or payable to Merrill Lynch & Co. pursuant to its engagement letter with Aurora, (ii) any retention, stay-bonus or similar payments paid or payable to officers, consultants or employees of Aurora approved by the New Equity Investors, (iii) items (b), (c), (d) and (g) in the definition of "Maximum Debt Adjustment" in the Original SPA and (iv) the Bank Fees, the default interest paid or payable in accordance with the terms of the Amendment and Forbearance, dated as of October 9, 2003, to the Secured Facility (the "Paid Default Interest") and the proceeds of the Subscription Option described in paragraph 6. The calculation assumes that J.P. Morgan Securities Inc. has waived any amounts payable to it pursuant to its engagement letter with Aurora. o In the event of an adjustment to the assumed equity value of Aurora, (a) the New Equity Investors and CDM would receive a percentage of Aurora's common stock equal to $85 million divided by the adjusted equity value of Aurora and (b) the holders of the Senior Subordinated Notes would receive the remainder of the common stock; provided that the amounts of common stock to be received by the New Equity Investors, CDM and the holders of the Senior Subordinated Notes shall be subject to dilution of up to (i) 10% of the equity of the combined companies to be reserved for performance based (for example, based on IRR return to investors) management equity incentives and (ii) 6% for an employee option pool ("Management Equity Arrangements"). 5. Cash-Out Option. Holders of Senior Subordinated Notes will be given the option of receiving cash in lieu of Aurora common stock. Each holder of Senior Subordinated Notes shall have the right to subscribe for a percentage of the shares of Aurora common stock as to which the cash option has been elected ("Unallocated Shares") equal to such holder's assumed percentage ownership of the Aurora common stock if all holders of Senior Subordinated Notes elected to receive 100% Aurora common stock. Any unsubscribed shares resulting from the cash-out option shall be available to holders of Senior Subordinated Notes but such further subscription right shall be made only to those holding notes on the date of the vote to approve the Plan (the "Plan Voting Date") and shall be capped at the proportions of their ownership of Senior Subordinated Notes as of the Plan Voting Date. Committee members may not elect to subscribe for common stock that is greater in the aggregate than such Committee member's assumed equity percentage of Aurora common stock calculated as of the Plan Voting Date. The New Equity Investors shall subscribe for all Unallocated Shares not subscribed for by the holders of the Senior Subordinated Notes. The cash price paid for each Unallocated Share subscribed for will be equal to the per-share equity value allocated to the Aurora common stock (the "Per Share Value") to be received by the holders of the Senior Subordinated Notes. 6. Subscription Option. In order to maintain the assumed equity value allocable to the holders of Senior Subordinated Notes of $225 million, each holder of Senior Subordinated Notes (including members of the Committee) shall have the right to subscribe for such holder's pro rata portion, based on such holder's percentage ownership of the Senior Subordinated Notes as of the Plan Voting Date, of that number of shares of Aurora common stock (the "Subscription Option Shares") valued, in the aggregate, at $12.1 million plus the amount of the Paid Default Interest incurred through October 31, 2003, or as agreed upon, minus the amount by which Aurora's currently anticipated transaction fees or expenses are reduced by their terms, by agreement or pursuant to the Order. The value of each Subscription Option Share, and the price paid for each such share, will be equal to the Per Share Value. Committee members shall have the right to subscribe for any Subscription Option Shares not subscribed for by other holders of the Senior Subordinated Notes. In the event any Subscription Option Shares have not otherwise been subscribed for by members of the Committee or other holders of the Senior Subordinated Notes, the New Equity Investors shall subscribe for such shares, in which event the assumed equity value allocable to the holders of the Senior Subordinated Notes will be reduced by the amount of the investment of the New Equity Investors. 7. Combination with Pinnacle. Upon consummation of the Plan, Pinnacle and Aurora will combine their businesses (the "Merger") based on an assumed equity value of Pinnacle of $190 million and pre-merger equity ownership of Pinnacle of 85.6% by the New Equity Investors and 14.4% by CDM. Accordingly, after giving effect to the Merger and assuming no adjustments pursuant to "Adjustment of Aurora Equity Value", "Cash-Out Option" or "Subscription Option" above, or "Adjustment of Pinnacle Equity Value" below, the fully diluted (subject to further dilution by the Management Equity Arrangements) percentage ownership of the combined company's common stock would be as set forth below: ------------------------------------------------------ New Equity Investors 49.3% ------------------------------------------------------ Holders of Senior Subordinated Notes 41.9% ------------------------------------------------------ CDM 8.8% ------------------------------------------------------ 8. Adjustment of Pinnacle Equity Value. This letter of intent assumes an equity value of Pinnacle of $190 million. The parties will agree on the Pinnacle equity value adjustment mechanism. 9. Due Diligence. Subject to existing confidentiality obligations, as promptly as practicable after the date hereof, (i) the New Equity Investors shall use all commercially reasonable efforts to allow Aurora, the Committee and their respective representatives to conduct a due diligence investigation of the business and affairs of Pinnacle, and shall furnish Aurora, the Committee and their respective representatives with any due diligence report or other due diligence-related correspondence prepared by any New Equity Investor or their advisers, provided that Aurora and the Committee agree that furnishing such reports or correspondence shall not give rise to any liability on the part of the New Equity Investors or their advisers, (ii) Aurora will allow the New Equity Investors, CDM and their respective representatives continued access to the management and auditors of Aurora in order to facilitate the Financing and the financing of the Pinnacle acquisition and (iii) Aurora will cooperate (including by permitting inclusion of its financial statements and obtaining appropriate auditors' consents) in the preparation of the financing arrangements in the acquisition of Pinnacle. 10. Definitive Agreements. The parties shall promptly commence negotiation in good faith of the Amended SPA and other definitive documentation necessary for the proposed transaction described herein, and shall seek to complete such negotiations as promptly as practicable. 11. Representations, Warranties and Covenants. The Amended SPA shall contain representations, warranties and covenants in respect of Aurora and Pinnacle comparable in scope to those contained in the Original SPA. The Amended SPA will permit Aurora to release parties from existing standstill agreements. The Amended SPA will include appropriate representations, warranties and covenants of the purchaser. 12. Conditions. On or prior to the date hereof, the pre-petition bank lenders of Aurora will have waived any fees payable to them in excess of the $15 million Bank Fees, subject to the transactions contemplated by this letter of intent closing no later than March 31, 2004. Prior to the signing of the Amended SPA, Aurora and the Committee shall have satisfactorily completed their due diligence investigation of Pinnacle. The Amended SPA shall include as conditions to closing (a) the conditions set forth in the Original SPA; (b) the consummation of the acquisition of Pinnacle by the New Equity Investors and CDM; and (c) completion of the Financing on market terms reasonably satisfactory to the New Equity Investors and the Committee. The Committee will not support the inclusion in any Plan of releases from liability for the benefit of Aurora's current directors or current private equity investors. 13. Governance. It is agreed that the New Equity Investors and CDM will control the governance of the combined companies. The parties will enter into a stockholders agreement and/or agree upon charter provisions providing for appropriate board representation, provisions preventing dilution of minority rights, liquidity protection for minority stockholders, tag-along and drag-along rights, transfer restrictions, preemptive rights, registration rights and restrictions on affiliate transactions. 14. Structure of Reorganization. The parties will explore the most beneficial structure for the Merger, including a structure that provides for the equity investments and debt restructuring to occur following the Merger. Depending on the structure of the Merger, references to "common stock" in this letter of intent shall include equity interests in a limited partnership or limited liability company, as applicable. 15. Indication of Interest. Other than paragraphs 16, 17 and 18 below, which shall be binding obligations of the parties hereto, this letter of intent is not intended to, and shall not, create a binding agreement but instead is intended to document the desire of the parties to continue discussions that may at some future date lead to such an agreement. Other than paragraphs 16, 17, and 18 below, no party shall be bound hereby in any way until a definitive agreement has been executed. Each party reserves the right to terminate any and all discussions with the other parties at any time prior to the execution of a definitive agreement. 16. Exclusivity. For a period of 30 days from the date hereof, the members of the Committee shall not (and shall cause its advisors and representatives not to), directly or indirectly, solicit, initiate, facilitate (including by way of furnishing information), assist, encourage or participate in any discussions or negotiations regarding the submission of any Alternative Proposal or Stand Alone Proposal (as such terms are defined in the Original SPA). Nothing contained in this paragraph 16 shall restrict Aurora's ability to act in a manner consistent with Section 5.3 of the Original SPA. 17. Acknowledgement. Childs hereby acknowledges and agrees that negotiation, execution and delivery by Aurora of this letter of intent and the Amended SPA and the discussions, negotiations and due diligence meetings conducted by Aurora with JPMP and/or CDM and/or the Committee and their respective Representatives (as defined in the Original SPA) regarding a potential transaction involving Pinnacle, in and of themselves, do not (a) violate or conflict with Section 5.3 of the Original SPA, (b) provide Childs with a right to terminate the Original SPA pursuant to Section 8.1 thereof or (c) entitle Childs to receive a Termination Payment or a payment of Reimbursable Expenses (each as defined in the Original SPA) pursuant to Section 8.2(a) or Section 8.2(b) of the Original SPA, respectively. 18. Governing Law. This letter of intent shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to its principles or rules of conflicts of laws to the extent that such principles or rules would require the application of the law of another jurisdiction. [Remainder of page intentionally left blank] THE INFORMAL BONDHOLDER COMMITTEE OF AURORA FOODS, INC. OAKTREE CAPITAL MANAGEMENT, LLC, as general partner and investment manager of certain funds and accounts it manages By: /s/ Lowell W. Hill -------------------------------- Name: Lowell W. Hill Title: By: /s/ Kenneth Liang -------------------------------- Name: Kenneth Liang Title: PEQUOT CAPITAL MANAGEMENT, INC. (on behalf of certain funds and managed accounts) By: /s/ Richard Joslin -------------------------------- Name: Richard Joslin Title: Principal/Chief Accounting Officer LEHMAN BROTHERS, INC. By: /s/ James P. Seery, Jr. -------------------------------- Name: James P. Seery, Jr. Title: SVP AURORA FOODS INC. By: /s/ Dale Morrison -------------------------------- Name: Dale Morrison Title: Chairman J.P. MORGAN PARTNERS LLC By: /s/ Stephen P. Murray -------------------------------- Name: Stephen P. Murray Title: Partner J.W. CHILDS EQUITY PARTNERS III, L.P. By: /s/ Adam Suttin --------------------------------- Name: Adam Suttin Title: Vice President C. DEAN METROPOULOS AND CO. By: /s/ C. Dean Metropoulos --------------------------------- Name: C. Dean Metropoulos Title: President EX-10 4 ny816511.txt EXH. 10.2 - AMEND. & FOREBEARANCE Exhibit 10.2 EXECUTION COPY AMENDMENT AND FORBEARANCE AMENDMENT AND FORBEARANCE, dated as of October 9, 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; and WHEREAS, Company has requested, and, upon this Amendment becoming effective, the Lenders have agreed, to waive certain breaches of the Credit Agreement; 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) by deleting clause (a) of the defined term "Net Cash Proceeds" in its entirety and substituting in lieu thereof "[Reserved]"; and (ii) by adding the following new defined terms in proper alphabetical order: "October 2003 Amendment Effective Date" means the date on which the Amendment and Forbearance, dated as of October 9, 2003, to this Agreement shall be deemed effective in accordance with Section 4 thereof. "Payoff Date" means the date on which the Obligations become due and payable (whether at maturity, by acceleration or otherwise) or, if earlier, the date on which the Loans and accrued interest thereon are paid in full and in cash in accordance with the terms of this Agreement and no Letters of Credit are outstanding. (b) Amendments to Subsection 2.3. Subsection 2.3 of the Credit Agreement is hereby amended as follows: (i) Subsection 2.3C of the Credit Agreement is hereby amended by deleting such subsection in its entirety and substituting in lieu thereof the following: C. Excess Leverage and Asset Sale Fee. Except as otherwise agreed to in writing by the Requisite Lenders, Company shall pay each Lender a fee (the "Excess Leverage and Asset Sale Fee") equal to 5.25% of the aggregate amount of such Lender's Revolving Loan Exposure and Term Loan Exposure outstanding as of the February 2003 Amendment Effective Date, which Excess Leverage and Asset Sale Fee shall be deemed to be earned on the October 2003 Amendment Effective Date and shall be payable on the Payoff Date; provided that such Excess Leverage and Asset Sale Fee shall be reduced to $15,000,000 with the remainder forgiven if (1) the Payoff Date and the payment in full and in cash in accordance with the terms of this Agreement of all Obligations, including the Excess Leverage and Asset Sale Fee, occurs on or prior to March 31, 2004 and (2) in the event that such payment of such Obligations, including the Excess Leverage and Asset Sale Fee, is made pursuant to a plan of reorganization in a bankruptcy case in respect of the Loan Parties, such plan of reorganization provides that the Obligations shall be deemed allowed in full in an amount determined solely in accordance with the terms of this Agreement, without any defense, set-off or counterclaim being recognized in respect thereof, including any defense, if any, based upon Section 502(b)(2) of the Bankruptcy Code, or otherwise. Such Excess Leverage and Asset Sale Fee may be prepaid by Company on any Business Day upon notice to the Administrative Agent. (ii) Subsection 2.3D of the Credit Agreement is hereby amended by deleting such subsection in its entirety. (c) Amendment to Subsection 2.4. Subsection 2.4C(ii) of the Credit Agreement is hereby amended by deleting the words "subsections 2.3C and 2.3D" in the first sentence thereof and substituting in lieu thereof "subsection 2.3C". 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 (a) 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") or (b) arising under subsection 8.1 of the Credit Agreement by virtue of the failure of Company to make any scheduled principal payment under the Credit Agreement on September 30, 2003 (any such non-payment, together with the Specified Indenture Defaults, the "Specified Defaults"). The "Section 3 Termination Date" shall be the earliest of (1) December 1, 2003, (2) the date on which each Specified Default has been cured or waived, through amendments to the Specified Indentures, the Credit Agreement or otherwise, so long as Company has delivered to the Administrative Agent five days' prior written notice of its intent to cure any Specified Default by payment, (3) the date on which a notice of acceleration under any Specified Indenture has been delivered to Company or (4) the date on which any other Event of Default or Potential Event of Default shall arise. (b) For the avoidance of doubt, Company and each of the Lenders acknowledge that interest shall continue to accrue pursuant to subsection 2.2E of the Credit Agreement as a result of the Specified Defaults, provided that, in the event of the commencement of a bankruptcy case in respect of the Loan Parties, during the period in which the Lenders receive interest on a current basis pursuant to an order of the relevant bankruptcy court reasonably acceptable to the Administrative Agent providing for adequate protection to the Lenders, interest shall accrue and be payable during such period without regard to said subsection 2.2E. 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 accrued on the Loans through the Amendment Effective Date shall have been paid; and (c) After giving effect to the Amendment, no Event of Default or Potential Event of Default shall have occurred and be continuing. SECTION 5. 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 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. 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 other provision of any of the Loan Documents. SECTION 8. 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 8. SECTION 9. 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 10. 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 11. 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. Execution and delivery to the Administrative Agent or its counsel of this Amendment by any Lender shall be effective as to any Loans or Commitments held by such Lender on the date of such delivery and any Loans or Commitments subsequently acquired by such Lender on or prior to the Amendment Effective Date. SECTION 12. Further Acknowledgements. Company acknowledges that the provisions of subsection 2.3C of the Credit Agreement are a material inducement for the Lenders' consent to this Amendment and to the modification of the Excess Leverage and Asset Sale Fee as in effect prior to the Amendment Effective Date. 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/ Ronald B. Hutchison ----------------------------------- Name: Ronald B. Hutchison Title: CRO SEA COAST FOODS, INC. By: /s/ Ronald B. Hutchison ----------------------------------- Name: Ronald B. Hutchison Title: CRO 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 EX-99 5 aur99.txt EXHIBIT 99 Exhibit 99 - ------------------------------------------------------------------------------- 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 Revises Financial Restructuring to Include Combination with Pinnacle Foods Revised Transaction Supported by Creditors ---------------------------------------------------- ST. LOUIS, October 14, 2003 - Aurora Foods Inc. (OTCBB: AURF), a producer and marketer of leading food brands, announced today that it has revised its previously announced financial restructuring and entered into a Letter of Intent with J.P. Morgan Partners LLC (JPMP), J.W. Childs Equity Partners III, L.P. (JWC), an informal committee of bondholders representing approximately 50% of the Company's outstanding senior subordinated notes and C. Dean Metropoulos and Co. (CDM) pursuant to which Aurora's previous agreement with JWC will be amended to provide for a comprehensive restructuring transaction in which Aurora will be combined with Pinnacle Foods Corporation (Pinnacle). Upon the completion of the combination, C. Dean Metropoulos, CEO of Pinnacle Foods Corporation, will serve as Chairman and CEO of the Pinnacle/Aurora business. Aurora also announced that the revised restructuring transaction has received the support of its senior lenders. On August 8, 2003, JPMP and CDM entered into an agreement to purchase Pinnacle from Hicks, Muse, Tate & Furst Inc. JPMP and CDM have subsequently agreed to permit JWC to invest in the entity that will acquire Pinnacle. Under the terms of the Letter of Intent, the transactions will include the following elements: o Aurora's senior lenders will be paid in full in cash in respect of principal and interest under the Company's existing credit facility and will receive $15 million in cash in respect of certain leverage and asset sale fees under the credit facility, provided the credit facility is paid in full by March 31, 2004. o Holders of Aurora's 12% senior unsecured notes due 2005 will be paid in full in cash, in respect of principal and interest, but will not receive $1.9 million of original issue discount. o Holders of Aurora's outstanding 8.75% and 9.875% senior subordinated notes due 2008 and 2007, respectively, will receive an aggregate of approximately 41.9% of the combined company's common stock, subject to adjustment. Bondholders will have the right to elect to receive cash in lieu of common stock. o Existing common and preferred stockholders will not receive any distributions and the existing common and preferred shares will be cancelled. o Subject to adjustment, JPMP and JWC will contribute $83.75 million and CDM will be deemed to contribute $1.25 million to the Company, together with the equity in Pinnacle, in exchange for approximately 49.3% and 8.8%, respectively, of the combined company's common stock. o The transactions will be effected through a prearranged bankruptcy reorganization case. o As previously announced, all trade creditors will be paid in full. The transaction is subject to a number of conditions, including consummation of the acquisition of Pinnacle by the investment entity to be owned by JPMP, JWC and CDM, completion of due diligence, negotiation and execution of definitive agreements, receipt of financing, bankruptcy court approvals, and regulatory approvals. No assurance can be given that definitive agreements will be reached, the conditions to closing the transactions will be satisfied, or that the transactions ultimately will be consummated. "The revised transaction represents a major step forward in Aurora's restructuring efforts," said Dale F. Morrison, Aurora's Chairman and interim Chief Executive Officer. "It achieves our objectives of significantly reducing balance sheet leverage, enabling the Company to attain meaningful cost reductions and maximizing value for stakeholders. The combined company will be financially strong and well positioned for future growth." "I am extremely excited at the challenge and opportunity of combining two currently independent packaged food businesses in Pinnacle and Aurora," said C. Dean Metropoulos, CEO of Pinnacle Foods Corporation. "Each brings with it a strong set of brands and personnel that together will be combined to create a solid platform for growth." Mr. Metropoulos has over 15 years of entrepreneurial food industry experience having founded and run Stella Foods, Inc., one of the largest producers of specialty cheeses in the U.S., and subsequently successfully acquired and sold The Morningstar Group, International Home Foods, Ghirardelli Chocolates, Bumble Bee Tuna, Mumm and Perrier Jouet Champagnes, Hillsdown Holdings, and, most recently, Pinnacle Foods Corporation. Also upon closing of the transaction Mr. Morrison, who had been serving as interim Chief Executive Officer of Aurora, will return to his role as an operating partner of Fenway Partners, a New York-based private equity firm. On October 13, 2003, in connection with the execution of the Letter of Intent, Aurora entered into an Amendment and Forbearance with its existing bank lenders that, among other things, provided for (i) a reduction in the leverage and asset sale fees under Aurora's existing credit facility to an aggregate of $15 million in the event that certain conditions are satisfied, including the payment in full of Aurora's obligations under its existing credit facility by March 31, 2004, (ii) an increase in the leverage and asset sale fees under the credit facility to 5.25% of the aggregate amount outstanding in the event that the credit facility is not paid in full by March 31, 2004, and (iii) the forbearance by the existing bank lenders from exercising remedies under the existing credit facility arising from Aurora's failure to make interest payments on its senior subordinated notes or failure to make principal payments under its existing credit 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 http://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. # # # -----END PRIVACY-ENHANCED MESSAGE-----