EXHIBIT 10.23
XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
July 18, 2003
Xxxxx Xxxxx
President and Chief Executive Officer
Overhill Farms, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: CONDITIONAL WAIVER LETTER
-------------------------
Dear Xx. Xxxxx:
We refer to that certain Second Amended and Restated Securities
Purchase Agreement dated as of April 16, 2003, as amended by a First Amendment
to Second Amended and Restated Securities Purchase Agreement dated as of May 16,
2003, and as further amended by a Second Amendment to Second Amended and
Restated Securities Purchase Agreement dated as of June 19, 2003 (as so amended,
the "SECURITIES PURCHASE AGREEMENT"), by and among Overhill Farms, Inc., a
Nevada corporation (the "COMPANY"), the entities from time to time parties
thereto as Guarantors and Xxxxxx Xxxxxxxxx Capital Partners II, L.P. (the
"PURCHASER"). Unless otherwise indicated, all capitalized terms used and not
defined herein have the meanings ascribed to them in the Securities Purchase
Agreement.
1. ISSUANCE AND SALE OF APRIL 2003 SHARES.
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Section 8.28(d) of the Securities Purchase Agreement provides in
relevant part that the Company's failure to issue and sell to the Purchaser the
April 2003 Shares on or before July 20, 2003, shall constitute an Event of
Default as of July 20, 2003 (and such Event of Default shall not be deemed
curable). The Company has advised the Purchaser that, as a result of the SEC's
full review of the Company's proxy statement previously filed with the SEC
pursuant to Section 8.28(c) of the Securities Purchase Agreement, the Company
had to postpone the Special Stockholder Meeting initially scheduled for July 14,
Xxxxx Xxxxx
Overhill Farms, Inc.
July 18, 2003
2003; therefore, the Company will be unable to issue and sell to the Purchaser
the April 2003 Shares on or before July 20, 2003. Accordingly, the Company has
requested that the Purchaser waive the Event of Default that would result as of
July 20, 2003.
At the request of the Company, and pursuant to Section 12.2 of the
Securities Purchase Agreement, the Purchaser waives the Event of Default that
would occur as of July 20, 2003, by virtue of the Company's failure to issue and
sell to the Purchaser the April 2003 Shares on or before such date; provided,
HOWEVER, that if the Company fails to issue and sell to the Purchaser the April
2003 Shares on or before August 20, 2003, then the waiver provided for in this
paragraph shall be void AB INITIO and the Company's failure to issue and sell to
the Purchaser the April 2003 Shares on or before July 20, 2003, shall constitute
an Event of Default as of July 20, 2003 (and, notwithstanding anything to the
contrary, such Event of Default shall not be deemed curable).
The Company and the Purchaser informally have agreed that the Special
Stockholder Meeting required to be held pursuant to Section 8.28(c) of the
Securities Purchase Agreement may be either a special stockholders' meeting or
an annual stockholders' meeting.
2. DISSOLUTION OF OVERHILL VENTURES.
---------------------------------
Section 8.30 of the Securities Purchase Agreement provides that, not
later than June 30, 2003, the Company shall liquidate, wind up and dissolve
Overhill Ventures in accordance with Applicable Laws and deliver to the
Purchaser documentation reasonably satisfactory to it evidencing the
liquidation, winding up and dissolution of Overhill Ventures (including a tax
clearance certificate issued by the California Franchise Tax Board). The Company
failed to liquidate, wind up and dissolve Overhill Ventures by such date, and
such failure constitutes a Default and an Event of Default by virtue of the fact
that the Company did not cure such Default within ten Business Days after an
officer of the Company became aware or should have become aware of such failure.
Accordingly, the Company has requested that the Purchaser waive the Default and
Event of Default that occurred by virtue of the Company's failure to perform its
obligations under Section 8.30.
At the request of the Company, and pursuant to Section 11.5 of the
Securities Purchase Agreement, the Purchaser waives the Default and Event of
Default that occurred by virtue of the Company's failure to liquidate, wind up
and dissolve Overhill Ventures by June 30, 2003; PROVIDED, HOWEVER, that if, on
or before August 20, 2003, the Company fails to liquidate, wind up and dissolve
Overhill Ventures and deliver to the Purchaser documentation reasonably
satisfactory to it evidencing such liquidation, winding up and dissolution
(including a tax clearance certificate issued by the California Franchise Tax
Board), then the waiver provided for in this paragraph shall be void AB INITIO
and the Company's failure to liquidate, wind up and dissolve Overhill Ventures
and deliver to the Purchaser related documentation by June 30, 2003, shall
constitute an Event of Default as of June 30, 2003.
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Xxxxx Xxxxx
Overhill Farms, Inc.
July 18, 2003
3. GENERAL MATTERS.
----------------
In order to induce the Purchaser to grant the conditional waivers
provided for herein, the Company hereby represents and warrants to the Purchaser
that, as of the date hereof, no Defaults or Events of Default have occurred or
are continuing other than as described above.
This waiver letter is being delivered without prejudice to the rights,
remedies or powers of the Purchaser under or in connection with the Securities
Purchase Agreement, the Note, the other Investment Documents, Applicable Laws or
otherwise, and shall not constitute or be deemed to constitute an amendment or
other modification of, or a supplement to, the Securities Purchase Agreement,
the Note or any other Investment Documents. In addition, except for the
conditional waivers expressly described herein, nothing contained in this letter
is intended to or shall be construed as a waiver of any breach, violation,
Default or Event of Default, whether past, present or future, under the
Securities Purchase Agreement, the Note or any other Investment Document, or a
forbearance by the Purchaser of any of its rights, remedies or powers against
the Company Parties (or any of them) or the Collateral. The Purchaser hereby
expressly reserves all of its rights, powers and remedies under or in connection
with the Securities Purchase Agreement, the Note and the other Investment
Documents and Applicable Law, whether at law or in equity. All of the provisions
of the Securities Purchase Agreement, the Note and the other Investment
Documents shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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Please acknowledge your agreement with the foregoing by signing this
waiver letter in the space indicated below and returning a signed copy to us as
soon as possible.
Sincerely yours,
/s/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. Xxxxxxx
AGREED:
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OVERHILL FARMS, INC., a Nevada
corporation
By: /S/ XXXXX XXXXX
-----------------------------------------
Xxxxx Xxxxx
President and Chief Executive Officer
ACKNOWLEDGED:
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OVERHILL L.C. VENTURES, INC., a
California corporation
By: /S/ XXXXX XXXXX
-----------------------------------------
Xxxxx Xxxxx
President and Chief Executive Officer
cc: Xxxxxxxx X. Xxxxx, Esq.
Xxxxx X. Amber, Esq.
Xxxxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxx, Xx., Esq.
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