EXHIBIT 10.3
EXECUTION COPY
NOTEHOLDER FORBEARANCE AGREEMENT
NOTEHOLDER FORBEARANCE AGREEMENT, dated as of July 31, 2003
(this "Agreement") among Aurora Foods Inc. (the "Company"), Sea Coast Foods,
Inc. (the "Subsidiary Guarantor") and the holder of the Subordinated Notes (as
defined below) party hereto (the "Noteholder") issued pursuant to the
Indentures (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Wilmington Trust Company, as Trustee
(the "Trustee") have heretofore executed and delivered one or more of the
Indentures dated as of February 10, 1997, July 1, 1997, and July 1, 1998 (as
amended, supplemented or otherwise modified from time to time, the
"Indentures") providing for the issuance of (i) 9 7/8% Senior Subordinated
Notes due 2007, (ii) 9 7/8% Series C Senior Subordinated Notes due 2007, and
(iii) 8 3/4% Senior Subordinated Notes due 2008, respectively, of the Company
(collectively, the "Subordinated Notes") to the Noteholder;
WHEREAS, pursuant to (i) the Indentures and (ii) the
Supplemental Indentures, dated as of April 1, 1999, by and among the
Subsidiary Guarantor, the Company and the Trustee, the Subsidiary Guarantor
has, among other things, become a party to the Indentures as a Subsidiary
Guarantor thereunder, and has fully, unconditionally and irrevocably
guaranteed the full and punctual payment when due, whether by acceleration, by
redemption or otherwise, of all the Obligations pursuant to Article XI of the
Indentures;
WHEREAS, the Noteholder holds Subordinated Notes issued
pursuant to one or more of the Indentures and has delivered to Debevoise &
Xxxxxxxx a statement of the amount of its holdings with respect to each of the
Subordinated Notes issued pursuant to the Indentures;
WHEREAS, certain Defaults and Events of Default have occurred
and are continuing under Section 6.1of the Indentures by virtue of the failure
of the Company to make scheduled interest payments required under the
Indentures (such non-payments, the "Specified Indenture Defaults"); and
WHEREAS, the Company has requested, and the Noteholder has
indicated its willingness to agree, in consideration of the agreements of the
Company set forth in this Agreement and on the terms and subject to the
satisfaction of the conditions set forth in this Agreement, to forbear from
any remedies with respect to the Specified Indenture Defaults,
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Defined Terms. Terms defined in the Indentures and used
herein and in the recitals hereto shall have the meanings given to them in the
Indentures.
SECTION 2. Forbearance.
(a) The Noteholder agrees that, for the period from the Effective
Date to the Termination Date (as defined below), it will not exercise any of
the remedies available to it, nor will it instruct the Trustee to exercise any
of the remedies available to it, and it hereby instructs the Trustee to not
exercise any of the remedies available to it, in each case, under the
Indentures (including, without limitation, the right to accelerate the Notes
as contemplated in Section 6.2 of the Indentures) solely as a result of the
occurrence of any Specified Indenture Default. On the Termination Date, all of
the terms and provisions of the Indentures with respect to the Specified
Indenture Defaults shall have the same force and effect as if this Agreement
had not been entered into by the parties hereto, and the Noteholder and the
Trustee shall have all of the rights and remedies afforded to them under the
Indentures and under applicable law with respect to the Specified Indenture
Defaults as though no forbearance had been granted by them as provided
hereunder, without any further action by the Noteholder or the Trustee.
Nothing in this Section 2 shall affect, or shall be deemed to affect, any of
the rights and remedies of the Noteholder or the Trustee under, or in
connection with, the Indentures with respect to any Default or Event of
Default, other than the Specified Indenture Defaults, or any other event or
occurrence. The "Termination Date" shall be the earliest of (i) September 15,
2003, (ii) the date on which each Specified Indenture Default has been cured
or waived, which cure or waiver shall have become effective, through
amendments to the Indentures or otherwise or (iii) the date on which the Bank
Forbearance (as defined below) is terminated in accordance with the terms
thereof.
SECTION 3. Rescission. The forbearance provisions set forth in
Section 2 of this Agreement may be rescinded by the Noteholder by written
notice, which rescission shall become effective as of 9:00am prevailing
Eastern time on:
(a) the date on which any Event of Default (other than the Specified
Indenture Defaults) occurs;
(b) the date on which (i) the Company or any of its Subsidiaries pays
any sum in excess of $1,000,000 pursuant to any judgment or order for the
payment of money entered against the Company or any such Subsidiary or (ii) a
lien or attachment (other than in favor of any of the Agents or any Lender, as
defined below) on any material portion of any material assets or property of
the Company or any of its Subsidiaries has occurred pursuant to any
foreclosure proceeding or otherwise;
(c) the date on which any of the Agents or any Lender (i) commences
or files any suit, action, proceeding or litigation in or with any court,
governmental agency or arbitrator against or affecting the Company or any of
its Subsidiaries in any way relating to the Credit Agreement or (ii) exercises
any of its rights or remedies under or in respect of the Credit Agreement;
(d) the date on which the Company or any of its Subsidiaries
commences or files any suit, action, proceeding or litigation in or with any
court, governmental agency or arbitrator against any Holder party to this
Agreement or any similar forbearance agreement or any of their affiliates
under or in connection with the Indentures or the Securities; or
(e) the date on which the Company declares or pays any dividends, or
purchases, redeems, retires, defeases or otherwise acquires for value any of
its equity interests now or hereafter outstanding, or returns any capital to
its stockholders, or makes any distribution of its assets, equity interests,
obligations or securities to its stockholders.
SECTION 4. Conditions to Effectiveness of Forbearance. This Agreement
shall be effective on the date on which all of the following conditions
precedent have been satisfied or waived (the "Effective Date"):
(a) this Agreement shall have been executed and delivered by a duly
authorized officer of each of (i) the Company, (ii) the Subsidiary Guarantor
and (iii) the Noteholder;
(b) the financial institutions (the "Lenders") and the agents (the
"Agents") party to that certain 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 the Company, the Lenders and
the Agents, shall have executed and delivered to the Company an agreement,
pursuant to which the Lenders agree to forbear from exercising any of their
remedies under the Credit Agreement with respect to each default referenced
therein (such agreement, the "Bank Forbearance"), which Bank Forbearance (i)
shall not contain any condition or provision for the payment of any fees,
compensation or other remuneration to the Lenders or Agents by Aurora in
consideration of the Lenders' agreement to forbear from exercising such
remedies and (ii) shall have become effective and shall remain effective at
least until the Termination Date; and
(c) no Default or Event of Default shall have occurred and be
continuing, other than the Specified Indenture Defaults.
SECTION 5. Representations and Warranties. To induce the Noteholder
to enter into this Agreement, the Company hereby represents and warrants to
the Noteholder that the execution, delivery and performance of this Agreement
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 the Company, enforceable against the 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. Effect on Indentures.
(a) Notwithstanding any contrary provision set forth herein, the
Indentures and the Securities 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 Agreement,
including the forbearance set forth in Section 2 hereof, shall not operate as
a waiver of any right, power or remedy of any Noteholder under the Indentures
or the Securities, nor constitute a waiver of any provision of the Indentures
or the Securities.
SECTION 7. Affirmation of Subsidiary Guaranty and Indentures. The
Subsidiary Guarantor hereby consents to this Agreement and each of the Company
and the Subsidiary Guarantor hereby acknowledges and agrees that all the
Obligations contained in the Indentures and all the obligations contained in
the Supplemental Indentures, as modified hereby are, and shall remain, in full
force and effect.
SECTION 8. GOVERNING LAW. THIS AGREEMENT 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 (WITHOUT
GIVING EFFECT TO ANY LAWS OR RULES RELATING TO CONFLICTS OF LAWS THAT WOULD
CAUSE THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK).
SECTION 9. Execution in Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart of
a signature page to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart to this Agreement.
Signature Pages Follow
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement 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/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: CRO
SEA COAST FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: CRO
HILL STREET FUNDING III
By: AEGON USA Investment Management,
LLC, not in its individual
capacity but solely as Adviser
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Associate General Counsel
CATALYST INVESTMENT MANAGEMENT,
LLC on behalf of certain managed
accounts
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Principal
GSC RECOVERY II, L.P.
By: GSC RECOVERY II GP, L.P., its
General Partner
By: GSC RII, LLC, its General Partner
By: GSCP (NJ) Holdings, L.P., its Member
By: GSCP (NJ), Inc., its General Partner
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
GSC RECOVERY IIA, L.P.
By: GSC RECOVERY IIA GP, L.P.,
its General Partner
By: GSC RIIA, LLC, its General Partner
By: GSCP (NJ) Holdings, L.P., its Member
By: GSCP (NJ), Inc., its General Partner
By: /s/ Xxxxxx Xxxxxx
-----------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxxx, Xx.
-----------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: SVP
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By: New York Life Investment Management
LLC, its Investment Manager
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Investment Vice President
OAKTREE CAPITAL MANAGEMENT, LLC as
general partner and investment
manager of certain OCM High Yield
funds and accounts
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
OAKTREE CAPITAL MANAGEMENT, LLC as
general partner and investment
manager of certain OCM
Opportunities funds and accounts
By: /s/ Xxx Xxxxx
---------------------------
Name: Xxx Xxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxx
---------------------------
Name: Xxxxxx Xxxx
Title: Managing Director
XXXXXXX SACHS PROFIT SHARING MASTER TRUST
PEQUOT ENDOWMENT FUND L.P.
PEQUOT INTERNATIONAL FUND, INC.
PEQUOT PARTNERS FUND, L.P.
PEQUOT SPECIAL OPPORTUNITIES FUND, L.P.
PEQUOT INSTITUTIONAL FUND, INC.
By: Pequot Capital Management, Inc., its
Investment Manager/Advisor
By: /s/ Xxxxxxxx Xxxxxx
-----------------------
Name: Xxxxxxxx Xxxxxx
Title: Authorized Signatory
YORK CAPITAL MANAGEMENT
By: /s/ Xxxx Xxxxxx
-------------------
Name: Xxxx Xxxxxx
Title: Sr. VP
OZ MASTER FUND, LTD.
By: OZ Management, LLC as Investment
Manager
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
FLEET MARITIME, INC.
By: OZ Management, LLC as Investment
Manager
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
OZ MAC 13 LTD.
By: OZ Management, LLC as Investment
Manager
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
XXXXXXX XXXXX & CO. PROFIT SHARING
MASTER TRUST
By: OZ Management, LLC as Investment
Manager
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
OZF CREDIT OPPORTUNITIES MASTER FUND, LTD.
By: OZF Management, L.P. as Investment
Manager
By: OZF Management, LLC General Partner
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
OZF CREDIT OPPORTUNITIES MASTER
FUND II, LTD.
By: OZF Management, L.P. as Investment
Manager
By: OZF Management, LLC General Partner
By: /s/ Xxxx Xxxxx
---------------------
Name: Xxxx Xxxxx
Title: CFO
