Exhibit 10.35
Execution Copy
ADVISORY AGREEMENT
This Advisory Agreement (this "Agreement") is entered into as of the 8th
day of April 1998 by and between Aurora/VDK LLC, a Delaware limited liability
company ("Aurora/VDK"), and Fenway Partners, Inc., a Delaware corporation
("Fenway"). For purposes of this Agreement, the "Company" shall mean
Aurora/VDK, any successor thereto whether by reason of merger, transfer of
substantially all of the assets and liabilities or otherwise, and each of
their respective direct and indirect subsidiaries.
Whereas, Aurora/VDK has been formed for the purpose of acquiring by
way of contribution all of the outstanding capital stock of VDK Holdings
Inc., a Delaware corporation ("VDK"), and Aurora Foods Holdings Inc., a
Delaware corporation ("Aurora") (such transactions being referred to
herein as the "Contribution"), all on the terms and subject to the
conditions of that certain Contribution Agreement dated as of April 8,
1998 between VDK Foods LLC, a Delaware limited liability company ("VDK
LLC") and MBW Investors LLC, a Delaware limited liability company ("MBW
LLC");
Whereas, a fund (the "Fenway Fund") affiliated with Fenway has
provided equity financing (the "Equity Investments") to VDK LLC and MBW
LLC; and
Whereas, subject to the terms and conditions of this Agreement, the
Company desires to retain Fenway to provide certain advisory services to
the Company, and Fenway desires to provide such services and the parties
hereto desire to terminate the Agreement dated December 31, 1996 between
Fenway and MBW Foods Inc., a subsidiary of Aurora/VDK, relating to
services to be provided by Fenway (the "MBW Agreement");
Now, therefore, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Services. Fenway hereby agrees that, during the term of this Agreement
(the "Term"), it will:
a. provide the Company with advice in connection with the negotiation
and consummation of agreements, contracts, documents and instruments
necessary in respect of any acquisition, including without
limitation, those necessary to provide the Company with financing
from banks or other financial institutions or other entities on
terms and conditions satisfactory to the Company; and
b. subject to Section 2 (c) below, and for as long as any fee
thereunder is payable, provide the Company with financial,
managerial and operational advice in connection with its operations,
including, without limitation:
i. advice with respect to the investment of funds; and
ii. advice with respect to the development and implementation of
strategies for improving the operating, marketing and financial
performance of the Company.
2. Payment of Fees. The Company hereby agrees to:
a. pay to Fenway a fee in the amount of $1,500,000, together with
reimbursement of Fenway's expenses incurred in connection with the
Contribution, such fees and expenses being payable by the Company on
the earlier to occur of (i) September 30, 1998 or (ii) the closing
of an initial public offering of common stock by the Company (the
"Initial Public Offering");
b. during the Term, allow Fenway to participate in the negotiation and
consummation of any acquisition transactions by the Company (each an
"Acquisition"), and pay to Fenway a fee in connection therewith
equal to 0.333% of the Acquisition Price (as defined below), such
fee to be due and payable for the foregoing services at the closing
of such transaction.
c. during the Term, pay to Fenway an annual fee of $500,000 payable
quarterly in advance commencing October 1, 1998; provided, however,
that such fees shall not be payable if the Initial Public Offering
occurs on or before September 30, 1998.
For purposes of this Agreement, the term "Acquisition Price" means the
sum of (A) the cash purchase price actually received, plus (B) the fair
market value of any equity securities issued to or retained by the seller in
connection with the Acquisition, plus (C) the face value of any promissory
note or other debt instrument issued to the seller in connection with such
Acquisition less any discounts thereto, plus (D) the amount of any liabilities
assumed by the Company or a direct or indirect subsidiary thereof in
connection with such Acquisition plus (E) the fair market value of any other
property paid as consideration in connection with the Acquisition, including
installment or deferred payments, if any, in which case the Transaction Fee
with respect to such installment or deferred payments shall be paid after
giving effect to the present value thereof. If such installment or deferred
payments are conditioned upon the achievement of certain contingencies (other
than the passage of time) such fees shall be payable in respect of such
installment or deferred payments as, when and if received by the seller.
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Each payment made pursuant to this Section 2 shall be paid by wire
transfer of immediately available federal funds to the account specified
on Schedule 1 hereto, or to such other account(s) as Fenway may specify
to the Company in writing prior to such payment.
3. Term. This Agreement will terminate upon the later of (a) two years
after the closing of the Initial Public Offering or (b) such time when
Fenway beneficially owns less than 50% of the number of shares of
common stock of the Public Company (as such term is defined in the
Aurora/VDK LLC Securityholders Agreement dated as of April 8, 1998 (the
"Securityholders Agreement")) beneficially owned by MDC (as defined in
the Securityholders Agreement) as of the closing of the Initial Public
Offering. This Agreement shall continue in full force and effect, unless
and until terminated by mutual consent of the parties, for so long as
Fenway (or any successor or permitted assign, as the case may be)
continues to carry on the business of providing services of the type
described in Section 1 above; provided, however, that (a) either party
may terminate this Agreement following a material breach of the terms of
this Agreement by the other party hereto and a failure to cure such
breach within 30 days following written notice thereof and (b) Fenway
may terminate this Agreement upon not less than 60 days written notice
to the Company; and provided, further that each of (x) the obligations
of the Company under Section 4 below, (y) any and all accrued and unpaid
obligations of the Company owed under Section 2 above and (z) the
provisions of Section 7 shall survive any termination of this Agreement
to the maximum extent permitted under applicable law.
4. Expenses; Indemnification
a. Expenses. Whether or not any of the transactions contemplated by
this Agreement or any other agreement shall be consummated, the
Company agrees to pay on demand all expenses incurred by Fenway or
any of its affiliates in connection with this Agreement and such
other transactions and all operations hereunder, including but not
limited to (i) the fees and disbursements of: (A) Ropes & Xxxx,
special counsel to Fenway and the Fenway Fund, (B) Ernst & Young,
accountant to Fenway and the Fenway Fund, and (C) any other
consultants or advisors retained by Fenway, the Fenway Fund or
either of the parties identified in clauses (A) and (B) arising in
connection therewith, and (ii) any out-of-pocket expenses incurred
by Fenway or any of its affiliates in connection with the provision
of services hereunder or the attendance at any meeting of the board
of directors (or any committee thereof) of the Company or any of its
affiliates.
b. Indemnity and Liability. In consideration of the execution and
delivery of this Agreement by Fenway and the provision of the Equity
Investments by the Fenway Fund, the Company thereby agrees to
indemnify, exonerate and hold
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each of the Fenway and the Fenway Fund, and each of their respective
partners, shareholders, affiliates, directors, officers, fiduciaries,
employees, and agents and each of the partners, shareholders, affiliates,
directors, officers, fiduciaries, employees and agents of each of the
foregoing (collectively, the "Indemnitees") free and harmless from and
against any and all actions, causes of action, suits, losses, liabilities
and damages, and expenses in connection therewith, including without
limitation reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them as
a result of, or arising out of, or relating to the Equity Investments, the
execution, delivery, performance, enforcement or existence of this
Agreement or the transactions contemplated hereby (including but not
limited to any indemnification obligations assumed or incurred by any
Indemnitee to or on behalf of the Company, or any of its accountants or
other representatives, agents or affiliates) except for any such
Indemnified Liabilities arising on account of such Indemnitee's gross
negligence or willful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. None of the Indemnitees shall be liable to the
Company or any of its affiliates for any act or omission suffered or taken
by such Indemnitee as a result of, or arising out of, or relating to the
Equity Investments, the execution, delivery, performance, enforcement or
existence of this Agreement or the transactions contemplated hereby that
does not constitute gross negligence or willful misconduct.
5. Assignment, etc. Except as provided below, neither party shall have the
right to assign this Agreement. Fenway acknowledges that its services
under this Agreement are unique. Accordingly, any purported assignment by
Fenway (other than as provided below) shall be void. Notwithstanding the
foregoing, (a) Fenway may assign all or part of its rights and obligations
hereunder to any affiliate of Fenway which provides services similar to
those called for by this Agreement, in which event Fenway shall be
released of all its rights, other than the rights in Section 4 hereof, and
obligations hereunder, and (b) the provisions hereof for the benefit of
the Fenway Fund shall inure to the benefit of their successors and assigns.
6. Amendments and Waivers. No amendment or waiver of any term, provision or
condition of this Agreement shall be effective, unless in writing and
executed by each of Fenway and the Company. No waiver on any one occasion
shall extend to or effect or be construed as a waiver of any right or remedy
on any future occasion. No course of dealing of any person nor any delay
or omission in exercising any right or remedy shall constitute an amendment
of this Agreement or a waiver of any right or remedy of any party hereto.
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7. MISCELLANEOUS
a. Choice of Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of
New York without giving effect to any choice or conflict of law
provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.
b. Consent to Jurisdiction. Each of the parties agrees that all
actions, suits or proceedings arising out of or based upon this
Agreement or the subject matter hereof shall be brought and
maintained exclusively in the federal and state courts of the
State of New York located in the Borough of Manhattan in New York
City. Each of the parties hereto by execution hereof (i) hereby
irrevocably submits to the jurisdiction of the above-named courts
for the purpose of any action, suit or proceeding arising out of
or based upon this Agreement or the subject matter hereof and
(ii) hereby waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding,, any claim
that it is not subject personally to the jurisdiction of the
above-named courts, that it is immune from extraterritorial
injunctive relief or other injunctive relief, that its property
is exempt or immune from attachment or execution, that any such
action, suit or proceeding may not be brought or maintained in
one of the above-named courts, that any such action, suit or
proceeding brought or maintained in one of the above-named courts
should be dismissed on grounds of FORUM NON COVENIENS, should be
transferred to any court other than one of the above-named
courts, should be stayed by virtue of the pendency of any other
action, suit or proceeding in any court other than one of the
above-named courts, or that this Agreement or the subject matter
hereof may not be enforced in or by any of the above-named
courts. Each of the parties hereto hereby consents to service of
process in any such suit, action or proceeding in any manner
permitted by the laws of the State of New York, agrees that
service of process by registered or certified mail, return receipt
requested, at the address specified in or pursuant to Section 9
is reasonably calculated to give actual notice and waives and
agrees not to assert by way of motion, as a defense or otherwise,
in any such action, suit or proceeding any claim that service of
process made in accordance with Section 9 does not constitute
good and sufficient service of process. The provisions of this
Section7(b) shall not restrict the ability of any party to
enforce in any court any judgment obtained in one of the
above-named courts.
c. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS A
PLAINTIFF, DEFENDANT, OR OTHERWISE),, ANY RIGHT TO TRIAL BY JURY
IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF
ACTION, ACTION, SUIT OR
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PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE.
Each of the parties hereto acknowledges that it has been informed
by each other party that the provisions of this Section 7(c)
constitute a material inducement upon which such party is relying
and will rely in entering into this Agreement and the
transactions contemplated hereby. Any of the parties hereto may
file an original counterpart or a copy of this Agreement with any
court as written evidence of the consent of each of the parties
hereto to the waiver of its right to trial by jury.
8. MERGER/ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof
and supersedes any prior communication or agreement with respect
thereto. The parties hereto agree that as of the date hereof, the MBW
Agreement shall be terminated and shall be of no further force and
effect.
9. NOTICE. All notices, demands, and communications of any kind which any
party may require or desire to serve upon any other party under this
Agreement shall be in writing and shall be served upon such other party
and such other party's copied persons as specified below by personal
delivery to the address set forth for it below or to such other address
as such party shall have specified by notice to each other party or by
mailing a copy thereof by certified or registered mail, or by Federal
Express or any other reputable overnight courier service, postage
prepaid, with return receipt requested, addressed to such party and
copied persons at such addresses. In the case of service by personal
delivery, it shall be deemed complete on the first business day after
the date of actual delivery to such address. In case of service by mail
or by overnight courier, it shall be deemed complete, whether or not
received, on the third day after the date of mailing as shown by the
registered or certified mail receipt or courier service receipt.
Notwithstanding the foregoing, notice to any party or copied person of
change of address shall be deemed complete only upon actual receipt by
an officer or agent of such party and copied person.
If to the Company, to it at:
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
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If to Fenway, to it at:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
10. Severability. If in any judicial or arbitral proceedings a court or
arbitrator shall refuse to enforce any provision of this Agreement, then
such unenforceable provision shall be deemed eliminated from this
Agreement for the purpose of such proceedings to the extent necessary to
permit the remaining provisions to be enforced. To the full extent,
however, that the provisions of any applicable law may be waived, they
are hereby waived to the end that this Agreement be deemed to be valid
and binding agreement enforceable in accordance with its terms, and in
the event that any provision hereof shall be found to be invalid or
unenforceable, such provision shall be construed by limiting it so as to
be valid and enforceable to the maximum extent consistent with and
possible under applicable law.
11. Counterparts. This Agreement may be executed in any number of
counterparts and by each of the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all
of which together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
THE COMPANY:
AURORA/VDK LLC
BY
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Title:
AURORA FOODS HOLDINGS INC.
BY
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Title:
VDK HOLDINGS, INC.
BY
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Title:
AURORA FOODS INC.
BY
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Title:
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VAN XX XXXX'X, INC.
By
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Title:
FENWAY: FENWAY PARTNERS, INC.
By
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Title
9
Schedule 1 to
Advisory Agreement
WIRE TRANSFER INSTRUCTIONS FOR
FENWAY PARTNERS, INC.
The Chase Manhattan Bank, N.A.
ABA no. 021 000 021
For further credit to
Fenway Partners, Inc.
Acct. no. 967-616085
Re: Aurora fee
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as an instrument under seal as of the date first above
written by its officer or representative thereunto duly authorized.
THE COMPANY: AURORA/VDK LLC
By /s/ Xxx Xxxxx
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Title: Executive Vice President
AURORA FOODS HOLDING INC.
By /s/ Xxx Xxxxx
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Title: Excutive Vice President
VDK HOLDINGS, INC.
By /s/ Xxx Xxxxx
--------------------------------
Title: Executive Vice President
AURORA FOODS INC.
By /s/ Xxx Xxxxx
--------------------------------
Title: Executive Vice President
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VAN XX XXXX'X, INC.
By /s/ Xxx Xxxxx
--------------------------------
Title: Executive Vice President
FENWAY: FENWAY PARTNERS, INC.
By /s/ Xxxxx Xxxx
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Title
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