Exhibit 10.35
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
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 hereby agrees to
indemnify, exonerate and hold
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each of 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 of 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 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 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
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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. 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 or 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:
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Schedule 1 to
Management Agreement
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WIRE TRANSFER INSTRUCTIONS FOR
FENWAY PARTNERS, INC.
