Exhibit 10.34
ADVISORY AGREEMENT
This ADVISORY AGREEMENT is made as of the 8th day of April, 1998, by and
between AURORA/VDK LLC, a Delaware limited liability company ("Aurora/VDK LLC"),
and MDC MANAGEMENT COMPANY III, L.P., a California limited partnership (the
"Advisor"). For purposes of this Agreement, the "Company" shall mean Aurora/VDK
LLC, any successor thereto by reason of merger, transfer of substantially all of
its assets and liabilities or otherwise, and each of their direct and indirect
subsidiaries.
W I T N E S E T H:
WHEREAS, MBW Investors LLC ("MBW LLC"), a Delaware limited liability
company, and VDK Foods LLC ("VDK LLC"), a Delaware limited liability company,
have formed Aurora/VDK LLC (the "Contribution") pursuant to a Contribution
Agreement dated as of April 8, 1998 between MBW LLC and VDK LLC; and
WHEREAS, subject to the terms and conditions of this Agreement, the Company
desires to retain the Advisor, and the Advisor desires to be retained by the
Company, and the parties hereto desire to terminate the Advisory Services
Agreement dated December 31, 1996 between the Advisor and MBW Foods Inc. (n/k/a
Aurora Foods Inc.).
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Terms of Agreement and Duties.
(a) Engagement. The Company hereby retains the Advisor to provide
advisory services to the Company on a non-exclusive basis for a period (the
"Term") beginning on the date hereof and ending on the later of (x) the second
anniversary of the closing of the initial public offering (the "IPO") of Aurora
Foods Inc. ("AFI"), a successor entity to Aurora/VDK LLC to be formed pursuant
to a contemplated reorganization of the Company and (y) the date on which MDC
(as such term is defined in the Securityholders Agreement dated as of April 8,
1998 (the "Securityholders Agreement")) beneficially owns less than 50% of the
number of shares of common stock of the Public Company (as defined in the
Securityholders Agreement) beneficially owned by MDC as of the closing of the
IPO; provided; that the Advisor may terminate this Agreement on not less than 60
days prior written notice to the Company. In the event of any termination of
this Agreement (including upon expiration of the Term), (i) any accrued and
unpaid obligations of the Company owed under Sections 2 or 3 hereof, and (ii)
the Company's obligations under Section 4 hereof shall survive to the maximum
extent permitted by law.
(b) Duties. During the Term, the Advisor will render such services
(the "Services") as the Company may reasonably request from time to time in
connection with actual and potential acquisitions by the Company or any of its
direct or indirect subsidiaries and the financing thereof.
2. Compensation of Advisor.
(a) In the event that during the Term the Company or any direct or
indirect subsidiary thereof either (i) consummates an acquisition of the stock
or assets of another entity (including without limitation by merger or
consolidation), enters into a joint venture with another entity, or effects any
similar investment or business combination (each, an "Acquisition"), or
(ii) initiates any discussions or negotiations or undertakes a review of a
possible Acquisition that is ultimately consummated within one year following
termination of the Term, then in either case the Company shall pay to the
Advisor on the closing date of such Acquisition, in consideration of Services
rendered with respect thereto, a transaction fee (a "Transaction Fee") in an
amount equal to one-third-of-one percent (0.333%) of the Acquisition Price (as
defined below), by wire transfer of immediately available funds to an account
specified by the Advisor to the Company.
"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.
(b) During the Term, the Company shall pay to the Advisor an annual
fee of $500,000 payable quarterly in advance commencing October 1, 1998;
provided, that no fee shall be payable under this Section 2(b) if the IPO closes
on or before September 30, 1998.
3. Contribution Fee. In connection with Services rendered with respect
to the Contribution, the Company hereby agrees to pay the Advisor a fee in the
amount of $1,500,000, together with reimbursement of any unreimbursed or unpaid
expenses incurred by the Advisor in connection with the Contribution, with such
fee and expenses to be payable by the Company on the earlier of (x) the closing
of an initial public offering of common stock by
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the Company (or any successor to the Company by merger, consolidation or
reorganization of the Company, by incorporation or otherwise), or (y) September
30, 1998.
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 the Advisor 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)
counsel to the Advisor, (B) accountant to the Advisor, and (C) any other
consultants or advisors retained by the Advisor or either of the parties
identified in clauses (A) and (B) arising in connection therewith, and (ii) any
out-of-pocket expenses incurred by the Advisor 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 the Advisor, the Company hereby agrees to
indemnify and hold the Advisor and each of its members, partners, shareholders,
affiliates, directors, officers, fiduciaries, employees and agents and each of
the members, 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 actual or
threatened claims, actions, causes of action, suits, losses, liabilities and
damages, and expenses in connection therewith, including without limitation
reasonable attorneys' fees and disbursements and other litigation costs
(collectively, the "Indemnified Liabilities"), incurred by the Indemnitees or
any of them as a result of, or arising out of, or relating to 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
directly from such Indemnitees'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
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. The Advisor acknowledges that its services
under this Agreement are unique. Accordingly, any purported assignment by the
Advisor (other than as
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provided below) shall be void. Notwithstanding the foregoing, the Advisor may
assign all or part of its rights and obligations hereunder to any affiliate of
the Advisor which provides services similar to those called for by this
Agreement, in which event the Advisor shall be released of all of its rights,
other than the rights in Section 4 hereof, and obligations hereunder.
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 the Advisor 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.
7. Governing Law; Jurisdiction.
(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 law 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 conveniens, 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
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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 Section 7(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 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 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. 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 a 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.
9. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly given if (a)
delivered by hand, (b) sent (i) by overnight courier or (ii) by registered or
certified mail, return receipt
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requested, postage and registry fees prepaid, or (c) sent by facsimile with a
confirmation receipt, in each case addressed as follows:
If to the Advisor:
MDC Management Company III, L.P.
c/x XxXxxx De Leeuw & Co., Inc.
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
If to the Company:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to:
Fenway Partners, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to:
Dartford Partnership L.L.C.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx
Addresses may be changed by a notice in writing in accordance with the
provisions of this Section 9.
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10. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof, including without
limitation (i) the Advisory Services Agreement dated December 31, 1996 between
the Advisor and MBW Foods Inc. (n/k/a Aurora Foods Inc.), and, (ii) the New
Compensation Agreement, dated as of April 8, 1998, by and among the Company, the
Advisor and certain other parties signatory thereto.
11. Counterparts. This Agreement may be executed in one or more original
or facsimile counterparts, all of which together shall constitute one and the
same instrument.
12. Successors. This Agreement shall be binding on the successors and
assigns of any party hereto (including without limitation AFI or any other
successor to the Company by reason of the merger, consolidation, or
reorganization (by incorporation or otherwise) of the Company).
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement as
of this 8th day of April, 1998.
AURORA/VDK LLC
By: /s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
Title: Executive Vice President
VDK HOLDINGS, INC.
By: /s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
Title: Executive Vice President
AURORA FOODS HOLDINGS INC.
By: /s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
Title:Executive Vice President
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VAN XX XXXX'X, INC.
By: /s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
Title: Executive Vice President
AURORA FOODS INC.
By: /s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx
Title: Executive Vice President
MDC MANAGEMENT COMPANY III, L.P.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name:
Title:
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