-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OTx7SzyfFnzOOmx0r0/PiIBUJzJekPg7Ty+8rTzS9kGw7VDPP5nZ7lqvjv8Q9KIA 48Y4UtKg4F4sQZyT1ZN1Qw== 0001021408-03-006027.txt : 20030414 0001021408-03-006027.hdr.sgml : 20030414 20030414161835 ACCESSION NUMBER: 0001021408-03-006027 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030414 GROUP MEMBERS: ARTHUR E. LEVINE GROUP MEMBERS: LAUREN B. LEICHTMAN GROUP MEMBERS: LEVINE LEICHTMAN CAPITAL PARTNERS, INC. GROUP MEMBERS: LLCP CALIFORNIA EQUITY PARTNERS II, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: OVERHILL FARMS INC CENTRAL INDEX KEY: 0001101020 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FROZEN & PRESERVED FRUIT, VEG & FOOD SPECIALTIES [2030] IRS NUMBER: 752590292 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78593 FILM NUMBER: 03648752 BUSINESS ADDRESS: STREET 1: 5730 UPLANDER WAY #201 CITY: CULVER CITY STATE: CA ZIP: 90230 MAIL ADDRESS: STREET 1: 5730 UPLANDER WAY STREET 2: SUITE 201 CITY: CULVER CITY STATE: CA ZIP: 90230 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LEVINE LEICHTMAN CAPITAL PARTNERS II LP CENTRAL INDEX KEY: 0001074001 IRS NUMBER: 114227317 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 335 NORTH MAPLE DR STREET 2: SUITE 240 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3102755335 MAIL ADDRESS: STREET 1: 335 NORTH MAPLE DRIVE STREET 2: SUITE 240 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 SC 13D/A 1 dsc13da.txt AMENDMENT NO. 2 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* OVERHILL FARMS, INC. (Name of Issuer) Common Stock, par value $0.01 per share (Title of Class of Securities) 690212 10 5 (CUSIP Number) ---------------------- Arthur E. Levine Mitchell S. Cohen, Esq. Levine Leichtman Capital Partners II, L.P. Irell & Manella LLP 335 N. Maple Drive, Suite 240 1800 Avenue of the Stars, Suite 900 Beverly Hills, CA 90210 Los Angeles, California 90067 (310) 275-5335 (310) 277-1010
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) April 4, 2003 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of (S)(S) 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See (S) 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 690212 10 5 Page 2 of 13 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Levine Leichtman Capital Partners II, L.P. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] (b) [_] 3. SEC Use Only 4. Source of Funds (See Instructions) OO (See Item 3) 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] 6. Citizenship or Place of Organization State of California 7. Sole Voting Power: -- 0 -- Shares Number of -------------------------------------------------------- Shares 8. Shared Voting Power: 3,221,263 Shares (See Beneficially Item 5) -------------------------------------------------------- Owned by 9. Sole Dispositive Power: -- 0 - Shares Each Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power: 3,221,263 Shares (See Item 5) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,221,263 Shares (See Item 5) 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [_] 13. Percent of Class Represented by Amount in Row (11) 25.5% (See Item 5) 14. Type of Reporting Person PN CUSIP No. 690212 10 5 Page 3 of 13 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). LLCP California Equity Partners II, L.P. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] (b) [_] 3. SEC Use Only 4. Source of Funds (See Instructions) OO (See Item 3) 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] 6. Citizenship or Place of Organization State of California 7. Sole Voting Power: -- 0 -- Shares Number of -------------------------------------------------------- Shares 8. Shared Voting Power: 3,221,263 Shares (See Beneficially Item 5) -------------------------------------------------------- Owned by 9. Sole Dispositive Power: -- 0 - Shares Each Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power: 3,221,263 Shares (See Item 5) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,221,263 Shares (See Item 5) 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [_] 13. Percent of Class Represented by Amount in Row (11) 25.5% (See Item 5) 14. Type of Reporting Person PN CUSIP No. 690212 10 5 Page 4 of 13 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Levine Leichtman Capital Partners, Inc. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] (c) [_] 3. SEC Use Only 4. Source of Funds (See Instructions) OO (See Item 3) 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] 6. Citizenship or Place of Organization State of California 7. Sole Voting Power: -- 0 -- Shares Number of -------------------------------------------------------- Shares 8. Shared Voting Power: 3,221,263 Shares (See Beneficially Item 5) -------------------------------------------------------- Owned by 9. Sole Dispositive Power: -- 0 - Shares Each Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power: 3,221,263 Shares (See Item 5) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,221,263 Shares (See Item 5) 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [_] 13. Percent of Class Represented by Amount in Row (11) 25.5% (See Item 5) 14. Type of Reporting Person CO CUSIP No. 690212 10 5 Page 5 of 13 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Arthur E. Levine 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] (d) [_] 3. SEC Use Only 4. Source of Funds (See Instructions) OO (See Item 3) 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] 6. Citizenship or Place of Organization United States of America 7. Sole Voting Power: -- 0 -- Shares Number of -------------------------------------------------------- Shares 8. Shared Voting Power: 3,221,263 Shares (See Beneficially Item 5) -------------------------------------------------------- Owned by 9. Sole Dispositive Power: -- 0 - Shares Each Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power: 3,221,263 Shares (See Item 5) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,221,263 Shares (See Item 5) 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [_] 13. Percent of Class Represented by Amount in Row (11) 25.5% (See Item 5) 14. Type of Reporting Person IN CUSIP No. 690212 10 5 Page 6 of 13 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Lauren B. Leichtman 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [_] (e) [_] 3. SEC Use Only 4. Source of Funds (See Instructions) OO (See Item 3) 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [_] 6. Citizenship or Place of Organization United States of America 7. Sole Voting Power: -- 0 -- Shares Number of -------------------------------------------------------- Shares 8. Shared Voting Power: 3,221,263 Shares (See Beneficially Item 5) -------------------------------------------------------- Owned by 9. Sole Dispositive Power: -- 0 - Shares Each Reporting -------------------------------------------------------- Person With 10. Shared Dispositive Power: 3,221,263 Shares (See Item 5) - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 3,221,263 Shares (See Item 5) 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [_] 13. Percent of Class Represented by Amount in Row (11) 25.5% (See Item 5) 14. Type of Reporting Person IN SCHEDULE 13D Pursuant to Rule 13d-2(a) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Levine Leichtman Capital Partners II, L.P., a California limited partnership (the "Partnership"), LLCP California Equity Partners II, L.P., a California limited partnership (the "General Partner"), Levine Leichtman Capital Partners, Inc., a California corporation ("Capital Corp."), Arthur E. Levine ("Mr. Levine") and Lauren B. Leichtman ("Ms. Leichtman" and, together with the Partnership, the General Partner, Capital Corp. and Mr. Levine, the "Reporting Persons"), hereby file this Amendment No. 2 to Schedule 13D (this "Amendment") with the Securities and Exchange Commission (the "Commission"). This Amendment amends and supplements the Schedule 13D originally filed with the Commission on November 18, 2002 (the "Original Schedule 13D"), as amended by Amendment No. 1 to Schedule 13D filed with the Commission on December 17, 2002 ("Amendment No. 1 to Schedule 13D"), relating to the Common Stock, par value $.01 per share, of Overhill Farms, Inc., a Nevada corporation (the "Issuer"). The Original Schedule 13D, as amended by Amendment No. 1 to Schedule 13D, is referred to herein as the "Amended Schedule 13D." This Amendment is being filed pursuant to a Joint Reporting Agreement dated November 15, 2002, a copy of which is attached as Exhibit 99.1 to the Original Schedule 13D, among and on behalf of the Reporting Persons. Capitalized terms used in this Amendment and not otherwise defined herein have the meanings set forth in the Amended Schedule 13D. The item numbers and responses thereto below are in accordance with the requirements of Schedule 13D. All Rule citations used in this Amendment are to the rules and regulations promulgated under the Exchange Act. Item 3. Source and Amount of Funds or Other Consideration. Item 3 of Amended Schedule 13D is hereby amended by adding the following at the end of such Item: Pursuant to that certain First Amendment to Securities Purchase Agreement dated as of April 4, 2003 (the "First Amendment to Restated Securities Purchase Agreement"), among the Issuer, the entities from time to time parties thereto as Guarantors (including the Subsidiary), and the Partnership, a copy of which is attached as Exhibit 99.11 hereto, among other things, (a) the Purchaser waived certain Specified Events of Default (as defined therein), (b) the Issuer issued and sold to the Purchaser, and the Purchaser purchased from the Issuer, that certain Secured Senior Subordinated Bridge Note dated April 4, 2003, in the principal amount of $3,000,000 (the "Bridge Note"), a copy of which is attached as Exhibit 99.12 hereto, (c) the Issuer agreed to issue and sell to the Purchaser, and the Purchaser agreed to purchase from the Issuer, 2,466,759 shares of Common Stock (the "April 2003 Shares" and, together with the Bridge Note, the "Bridge Securities"), subject to the prior approval of the American Stock Exchange ("AMEX") of an application to list the April 2003 Shares, and (d) the parties amended the Restated Securities Purchase Agreement, a copy of which is attached as Exhibit 99.3 to the Original Schedule 13D, all on the terms and subject to the conditions set forth in the First Amendment to Restated Securities Purchase Agreement. The Issuer has filed an application with the AMEX to list the Page 7 of 13 April 2003 Shares and has requested approval thereof. The listing application is pending before the AMEX. The source and amount of the funds used to purchase the Bridge Note were capital contributions made by the partners of the Partnership in response to capital calls in the aggregate amount of $3,000,000. The source and amount of the funds to be used to purchase the April 2003 Shares, subject to the receipt by the Issuer of the approval of the AMEX of the above-referenced listing application, will be capital contributions made by the partners of the Partnership in response to capital calls in the aggregate amount of $24,667.59. Item 4. Purpose of Transaction. Item 4 of Amended Schedule 13D is hereby amended by adding the following at the end of such Item: The Reporting Persons acquired beneficial ownership of the Bridge Note and, subject to the prior approval of the AMEX of the above-referenced listing application, will acquire beneficial ownership of the April 2003 Shares, in each case in the ordinary course of business for investment purposes and, except as described below, not with the purpose of changing, obtaining, acquiring or influencing control of the Issuer. The Partnership may use its board designee, board observer, operating committee and other investor rights under the Restated Securities Purchase Agreement and/or other Investment Documents (as defined in the Restated Securities Purchase Agreement) as described in the Amended Schedule 13D and this Amendment in a manner which may result in the Partnership changing, obtaining, acquiring or influencing control of the Issuer. As with other investments held by the Reporting Persons, the Reporting Persons consider various alternatives to increase the value of their equity securities in the Issuer and may from time to time consider implementing such alternatives. The Reporting Persons retain the right, depending on market conditions and/or other factors, to change their investment intent, to acquire from time to time additional shares of Common Stock (or debt or other equity securities of the Issuer), to exercise all or a portion of the Warrants, to convert all or a portion of the Series A Preferred Shares into Common Stock and/or to sell or otherwise dispose of from time to time, in open market transactions, private transactions, transactions with affiliates of the Issuer or otherwise, all or part of the Warrants or the Common Stock issuable upon exercise thereof, the Series A Preferred Shares or the Common Stock issuable upon conversion thereof, the Common Stock or any other securities in the Issuer beneficially owned by them in any manner permitted by law. In the event of a material change in the present plans or intentions of the Reporting Persons, the Reporting Persons will amend this Schedule 13D to reflect such change. Except for the foregoing, the Reporting Persons have no present plans or proposals which relate to or would result in any of the actions enumerated in clauses (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. Item 5 of Amended Schedule 13D is hereby amended and restated to read as follows: (a) Each Reporting Person is deemed to be the beneficial owner (within the meaning of Rule 13d-3(a) of the Exchange Act) of an aggregate of 3,221,263 shares of Common Stock, including 2,937,987 shares of Common Stock, 200 shares of Common Stock issuable upon exercise of the December 2002 Restated Warrants, and 283,076 shares of Common Stock issuable upon conversion of the Series A Preferred Shares (see Items 3 and 4 above and Item 6 below). Such aggregate number of shares Page 8 of 13 beneficially owned by the Reporting Persons constituted, as of April 4, 2003, approximately 25.5% of the shares of such class (calculated in accordance with Rule 13d-3(d)(1)(i) of the Exchange Act and assuming that 12,338,797 shares of Common Stock were issued and outstanding as of such date, as represented by the Issuer to the Partnership in the First Amendment to Restated Securities Purchase Agreement). In addition, assuming the Issuer receives the approval of the AMEX of the application to list the April 2003 Shares, immediately following the purchase and sale of the April 2003 Shares, each Reporting Person will be deemed to be the beneficial owner of 5,688,022 shares of Common Stock (including the April 2003 Shares). Such aggregate number of shares would have constituted, as of April 4, 2003, approximately 37.7% of the shares of such class. In addition, pursuant to the Investor Rights Agreement, the Reporting Persons may be deemed to be beneficial owners, for purposes of the election or appointment of the LLCP Representative to the Board as described in Items 4 above and 6 below, of additional shares of Common Stock beneficially owned by the Principal Shareholders in the aggregate (excluding shares of Common Stock issuable upon exercise of options currently held by the Principal Shareholders which have not been exercised). There is no LLCP Representative currently serving on the Board. The Reporting Persons have no pecuniary interest in the shares of Common Stock beneficially owned by the Principal Shareholders and disclaim beneficial ownership of such shares. (b) The Partnership may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 3,221,263 shares of Common Stock. In addition, pursuant to the Investor Rights Agreement, for purposes of electing or appointing the LLCP Representative to the Board, the Partnership may be deemed to have shared voting power with all other Reporting Persons with respect to additional shares of Common Stock beneficially owned by the Principal Shareholders. By virtue of being the sole general partner of the Partnership, the General Partner may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 3,221,263 shares of Common Stock. In addition, pursuant to the Investor Rights Agreement, for purposes of electing or appointing the LLCP Representative to the Board, the General Partner may be deemed to have shared voting power with all other Reporting Persons with respect to additional shares of Common Stock beneficially owned by the Principal Shareholders. By virtue of being the sole general partner of the General Partner, Capital Corp. may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 3,221,263 shares of Common Stock. In addition, pursuant to the Investor Rights Agreement, for purposes of electing or appointing the LLCP Representative to the Board, Capital Corp. may be deemed to have shared voting power with all other Reporting Persons with respect to additional shares of Common Stock beneficially owned by the Principal Shareholders. Page 9 of 13 By virtue of being the sole directors and shareholders, and executive officers, of Capital Corp., each of Mr. Levine and Ms. Leichtman may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 3,221,263 shares of Common Stock. In addition, pursuant to the Investor Rights Agreement, for purposes of electing or appointing the LLCP Representative to the Board, each of Mr. Levine and Ms. Leichtman may be deemed to have shared voting power with all other Reporting Persons with respect to additional shares of Common Stock beneficially owned by the Principal Shareholders. (c) Except as described in Items 3 and 4 above, none of the Reporting Persons has effected any transactions in the Common Stock during the past sixty days. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Item 6 of Amended Schedule 13D is hereby amended by adding the following at the end of such Item: Pursuant to the First Amendment to Restated Securities Purchase Agreement, among other things, (a) the Purchaser waived certain Specified Events of Default, (b) the Issuer issued and sold to the Purchaser, and the Purchaser purchased from the Issuer, the Bridge Note, (c) the Issuer agreed to issue and sell to the Purchaser, and the Purchaser agreed to purchase from the Issuer, April 2003 Shares, subject to the prior approval of the AMEX of an application to list the April 2003 Shares, and (d) the parties amended the Restated Securities Purchase Agreement, including among other provisions in the Restated Securities Purchase Agreement, the financial covenants. The aggregate purchase price of the April 2003 Shares will be $24,667.59. The Issuer has filed an application with the AMEX to list the April 2003 Shares and has requested approval thereof. The listing application is pending before the AMEX. The principal balance of the Bridge Note is due on January 30, 2004, and may be prepaid without premium or penalty, and interest on the principal balance of the Bridge Note is due monthly and accrues at a base rate of 15.0%, which increases upon the occurrence of an Event of Default as provided for therein. The payment and performance of the Issuer's obligations under the Bridge Note are secured by, among other things, the security interests and liens previously granted by the Issuer to the Partnership under the collateral security documents. In addition, pursuant to an Amendment to Amended and Restated Secured Senior Subordinated Note Due 2004 dated as of April 4, 2003 (the "Amendment to Restated Note"), a copy of which is attached as Exhibit 99.13 hereto, the Issuer and the Partnership amended the Restated Note (a copy of which is attached as Exhibit 99.4 to the Original Schedule 13D) to increase the base rate of interest to 15.0%, which increases upon the occurrence of an Event of Default as provided for therein. Page 10 of 13 In addition, the Issuer, the Partnership and Union Bank of California, N.A. (the "Senior Lender") have entered into an agreement whereby, subject to the terms and conditions set forth therein, one of the Partnership's affiliates will acquire from the Senior Lender, and the Senior Lender will assign to the Partnership or its affiliate, all of the Senior Lender's rights and obligations under the Senior Lender's existing credit facilities with the Issuer. The Issuer has consented to such assignment transaction. Further, assuming the Partnership's affiliate acquires the Senior Lender's rights and obligations under the Senior Lender's existing credit facilities, the Issuer and such affiliate intend to amend and restate such credit facility arrangements on terms mutually acceptable to the Issuer and such affiliate. The descriptions of the First Amendment to Restated Securities Purchase Agreement, the Bridge Note, the Amendment to Restated Note and the other transactions set forth above are not, and do not purport to be, complete and, with respect to the First Amendment to Restated Securities Purchase Agreement, the Bridge Note and the Amendment to Restated Note, are qualified in their entirety by reference to copies of the same filed as Exhibits 99.11 through 99.13 hereto, respectively, and incorporated herein in their entirety by this reference. Item 7. Material to be Filed as Exhibits. Exhibit Description 99.11 First Amendment to Securities Purchase Agreement dated as of April 4, 2003, among Overhill Farms, Inc., the entities from time to time parties thereto as Guarantors and Levine Leichtman Capital Partners II, L.P. 99.12 Secured Senior Subordinated Bridge Note dated April 4, 2003, in the principal amount of $3,000,000, made by Overhill Farms, Inc. in favor of Levine Leichtman Capital Partners II, L.P. 99.13 Amendment to Amended and Restated Secured Senior Subordinated Note Due 2004 dated as of April 4, 2003, between Overhill Farms, Inc. and Levine Leichtman Capital Partners II, L.P. Page 11 of 13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that this statement is true, complete and correct. April 14, 2003 LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership By: LLCP California Equity Partners II, L.P., a California limited partnership, its General Partner By: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine -------------------------------------- Arthur E. Levine President LLCP CALIFORNIA EQUITY PARTNERS II, L.P., a California limited partnership By: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine ------------------------------------------- Arthur E. Levine President LEVINE LEICHTMAN CAPITAL PARTNERS, INC., a California corporation By: /s/ Arthur E. Levine ------------------------------------------------ Arthur E. Levine President /s/ Arthur E. Levine ---------------------------------------------------- ARTHUR E. LEVINE /s/ Lauren B. Leichtman ---------------------------------------------------- LAUREN B. LEICHTMAN Page 12 of 13 EXHIBIT INDEX Exhibit Description 99.11 First Amendment to Securities Purchase Agreement dated as of April 4, 2003, among Overhill Farms, Inc., the entities from time to time parties thereto as Guarantors and Levine Leichtman Capital Partners II, L.P. 99.12 Secured Senior Subordinated Bridge Note dated April 4, 2003, in the principal amount of $3,000,000, made by Overhill Farms, Inc. in favor of Levine Leichtman Capital Partners II, L.P. 99.13 Amendment to Amended and Restated Secured Senior Subordinated Note Due 2004 dated as of April 4, 2003, between Overhill Farms, Inc. and Levine Leichtman Capital Partners II, L.P. Page 13 of 13 EX-99.11 3 dex9911.txt FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT Exhibit 99.11 FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT is dated as of the 4/th/ day of April, 2003 (this "Amendment"), by and among OVERHILL FARMS, INC., a Nevada corporation (the "Company"), the entities from time to time parties thereto as Guarantors, and LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership (the "Purchaser"). R E C I T A L S A. The Company, Overhill Ventures, as a Guarantor, and the Purchaser are parties to that certain Amended and Restated Securities Purchase Agreement dated as of October 29, 2002 (as amended from time to time, the "Securities Purchase Agreement"), pursuant to which, among other things, on and as of the Effective Date, (i) the parties amended and restated the Original Securities Purchase Agreement, the Original Note, the Original Warrant and certain other Original Investment Documents and (ii) the Purchaser consented to the Spin-Off Related Matters, all on the terms and subject to the conditions set forth in the Securities Purchase Agreement and the other Investment Documents. Unless otherwise indicated, capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Securities Purchase Agreement. B. The Events of Default described in Exhibit A hereto (collectively, the "Specified Events of Default") have occurred and are continuing. The Company has requested that the Purchaser waive the Specified Events of Default. C. In addition, the Company has requested that the Purchaser provide additional capital to the Company in the amount of $3,000,000 to assist it to meet its short-term payment obligations. In this regard, the Company desires to issue and sell to the Purchaser the Bridge Note (as defined below) and, to induce the Purchaser to purchase the Bridge Note, the April 2003 Shares (as defined below). The Purchaser is willing to purchase the Bridge Securities (as defined below) from the Company, but only on the terms and subject to the conditions set forth herein. A G R E E M E N T NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, conditions and provisions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Limited Waiver of Specified Events of Default. Effective on and as of the First Amendment Effective Date (as defined below), at the request of the Company, LLCP waives the Specified Events of Default pursuant to Section 11.5 of the Securities Purchase Agreement. The waiver provided for in this Section 1 shall be limited solely to the Specified Events of Default and shall not extend to any other Default or Event of Default, whether past, present or future, shall not impair any right, power or remedy of the Purchaser which may arise as a result of such other Default or Event of Default and shall not give rise to any obligation whatsoever on the part of the Purchaser to grant any waivers in the future. 2. Purchase and Sale of Bridge Securities. (a) Authorization. The Company has authorized and approved the issuance, sale and delivery to the Purchaser of (i) a Secured Senior Subordinated Bridge Note in the principal amount of $3,000,000, in substantially the form of Exhibit B attached hereto (the "Bridge Note") and (ii) 2,466,759 shares of Common Stock (the "April 2003 Shares" and, together with the Bridge Note, the "Bridge Securities"). (b) Purchase and Sale. Subject to the terms and conditions contained herein, and in reliance upon the representations, warranties, covenants and agreements contained herein, (i) on the First Amendment Effective Date, the Company shall issue, sell and deliver to the Purchaser, and the Purchaser shall purchase from the Company, the Bridge Note, and (ii) on the Share Issuance Date (as defined below), the Company shall issue, sell and deliver to the Purchaser, and the Purchaser shall purchase from the Company, the April 2003 Shares. The purchase price to be paid by the Purchaser for the Bridge Note shall be $3,000,000 (the "Bridge Note Purchase Price") and the purchase price to be paid by the Purchaser for the April 2003 Shares shall be $24,667.59 (the "April 2003 Share Purchase Price" and, together with the Bridge Note Purchase Price, the "Bridge Securities Purchase Price"), all payable in accordance with Section 2(c). The Company and the Purchaser agree that, for purposes of Section 1271 et seq. of the Code, the original issue price of the Bridge Note will be $1,347,271.47 and the original issue price of the April 2003 Shares will be $1,652,728.53, and that this agreement is intended to constitute an agreement as to the issue prices of the Bridge Securities for all Tax purposes. (c) Closings. The closing of the issuance, sale and delivery of the Bridge Note (the "Bridge Note Closing") shall take place at the offices of Irell & Manella LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, California 90067, at 10:00 a.m. (Los Angeles time), on the First Amendment Effective Date, and the closing of the issuance, sale and delivery of the April 2003 Shares (the "April 2003 Share Closing") shall take place at the offices of Irell & Manella LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, California 90067, at 10:00 a.m. (Los Angeles time), on the Share Issuance Date. At the Bridge Note Closing, the Company shall deliver the Bridge Note to the Purchaser, duly executed by the Company, against delivery by the Purchaser of the Bridge Note Purchase Price (net of amounts permitted to be withheld pursuant to Sections 5(a)(v), (vi) and (xviii)) by wire transfer in immediately available funds to such bank as the Company may request in writing for credit to the Trade Payables Deposit Account. At the April 2003 Share Closing, the Company shall deliver a certificate to the Purchaser representing the April 2003 Shares, duly executed by the Company, against delivery by the Purchaser of the April 2003 Share Purchase Price. (d) Use of Proceeds. The proceeds to be received by the Company from the issuance and sale of the Bridge Securities hereunder, after payment of all amounts described in Sections 5(a)(v), (vi) and (xviii), shall be deposited into the Trade Payables -2- Deposit Account and be used solely to reduce the outstanding balance of the Company's trade payables in accordance with the Trade Payables Reduction Plan (as defined below). The Company covenants and agrees to deposit such net proceeds into the Trade Payables Deposit Account and to use the net proceeds solely to reduce the outstanding balance of the Company's trade payables in accordance with the Trade Payables Reduction Plan. 3. Amendments to Securities Purchase Agreement. Effective on and as of the First Amendment Effective Date (as defined below), pursuant to Section 12.3 of the Securities Purchase Agreement, the Securities Purchase Agreement shall be amended as follows: (a) Section 1.1 of the Securities Purchase Agreement shall be amended by adding the following new definitions to Section 1.1 in alphabetical order: "`Adjusted Current Assets' shall mean, collectively, (i) cash, (ii) accounts receivable, net, (iii) inventory, net, and (iv) prepaid expenses, in each case determined in accordance with GAAP. "`Adjusted Current Liabilities' shall mean, at any time, 'current liabilities' as defined by GAAP at such time, minus all Indebtedness owed to the Purchaser at such time, if and only if such Indebtedness is classified at such time as a current liability in accordance with GAAP. "`April 2003 Shares' shall mean 2,466,759 shares of Common Stock issued by the Company to the Purchaser under the First Amendment." "`Bridge Note' shall mean a Secured Senior Subordinated Bridge Note in the principal amount of $3,000,000, in substantially the form attached as Exhibit B to the First Amendment, executed by the Company in favor of the Purchaser, as amended from time to time." "`Daily Reporting Package' shall have the meaning set forth in Section 8.3(c)." "`First Amendment' shall mean that certain First Amendment to Amended and Restated Securities Purchase Agreement dated as of April 4, 2003." "`First Amendment Business Plans'" shall have the meaning set forth in the First Amendment. "`First Amendment Effective Date' shall have the meaning set forth in the First Amendment." "`Net Working Capital' shall mean, at any time, (i) Adjusted Current Assets at such time, minus (ii) Adjusted Current Liabilities at such time. -3- "`November 1999 Note'" shall mean that certain Amended and Restated Secured Senior Subordinated Note Due 2004 dated November 24, 1999, amended and restated October 29, 2002, in the principal amount of $28,000,000, as amended by an Amendment dated as of April 4, 2003, as further amended from time to time, which amends and restates the Original Note. "`Payables Turn' shall mean, at any time, (i) the Company's accounts payable balance at such time, determined in accordance with GAAP, divided by (ii) (A) the Company's "Total Sales" (or words of similar import) as reported in the latest Monthly Reporting Package delivered to the Purchaser pursuant to Section 8.3(b) for the three calendar months immediately preceding such time, multiplied by (B) 0.66, multiplied by (C) 4, divided by (D) 365." "`Trade Payables Deposit Account' shall have the meaning set forth in the First Amendment." "`Trade Payables Reduction Plan' shall have the meaning set forth in the First Amendment." (b) Section 1.1 of the Securities Purchase Agreement shall be further amended by amending the following existing definitions to read in their entirety as follows, respectively: "Collateral Documents" shall mean the Intercreditor Agreement, the Security Agreement, the Company Pledge Agreement, the PTC Security Agreement, the Landlord Waivers, the Warehouse Bailment Agreements, the Parent Termination Agreement, the Deposit Account Control Agreements, the UCC financing statements and all other agreements, instruments and documents executed by or on behalf of any Person concurrently herewith or at any time hereafter to guaranty or provide collateral security for or with respect to any or all Obligations, in each case as amended from time to time. "Deposit Account Control Agreements" or "Control Agreements" shall mean that certain Deposit Account Control Agreement dated as of June 28, 2002, among the UBOC, the Company and the Purchaser, as amended from time to time (as so amended, the "UBOC Control Agreement"), the Restricted Account Agreement dated as of April 4, 2003, among Wells Fargo Bank, N.A., the Company and the Purchaser, with respect to the Trade Payables Deposit Account, as amended from time to time, and any other control or similar agreements entered into from time to time, in form and substance reasonably satisfactory to the Purchaser, pursuant to which the Company or any other Company Party grants control to the Purchaser, as secured party, over its -4- or their deposit or similar accounts maintained with banks or other institutions. "`Fifth Amendment Warrant'" shall mean that certain Amended and Restated Warrant (No. LL-4) to Purchase 100 Shares of Common Stock, originally issued September 11, 2002, and restated upon partial exercise as of December 13, 2002, as amended from time to time, which evidences the number of unexercised Warrant Shares under that certain Warrant No. LL-2 to Purchase 57.57 Shares of Common Stock dated as of the Fifth Amendment Effective Date, and shall also include any other warrant or warrants issued upon the exercise or transfer of all or any portion thereof and the transfer, division or combination of any such other warrant or warrants." "`Intercreditor Agreement'" shall mean (i) that certain Amended and Restated Intercreditor and Subordination Agreement, dated as of October 29, 2002, between UBOC and the Purchaser and acknowledged by the Company and Overhill Ventures, as amended by a First Amendment dated as of November 22, 2002, a Second Amendment dated as of December 20, 2002, and a Third Amendment dated as of April 4, 2003, as further amended from time to time by UBOC and the Purchaser, or (ii) any other intercreditor or subordination agreement entered into after the First Amendment Effective Date by any other Senior Lender and the Purchaser, in form and substance satisfactory to the Purchaser. "`Investment Documents' shall mean, collectively, the Original Securities Purchase Agreement and the other Original Investment Documents, the SSE Assignment Agreement, this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Investor Rights Agreement, the Suretyship Agreement, the Intercreditor Agreement and the other Collateral Documents, the Equity Repurchase Option Agreement and all other agreements, instruments, certificates, letters and other documents executed and/or delivered in connection herewith or therewith, in each case as amended from time to time." "Leverage Ratio" shall mean: (i) With respect to the Fiscal Quarter period ending in June 2003, the ratio of (i) the sum of (A) total Indebtedness of the Company and its Subsidiaries at the end of such period and (B) all Capital Lease Obligations at the end of such period to (ii) (A) EBITDA for such Fiscal Quarter, multiplied by (B) 4; (ii) With respect to the two (2) consecutive Fiscal Quarter period ending in September 2003, the ratio of (i) the sum of (A) total Indebtedness of the Company and its Subsidiaries at the end of such period and (B) all Capital Lease Obligations at the -5- end of such period to (ii) (A) EBITDA for such two (2) consecutive Fiscal Quarters, multiplied by (B) 2; (iii) With respect to the three (3) consecutive Fiscal Quarter period ending in December 2003, the ratio of (i) the sum of (A) total Indebtedness of the Company and its Subsidiaries at the end of such period and (B) all Capital Lease Obligations at the end of such period to (ii) (A) EBITDA for such three (3) consecutive Fiscal Quarters, multiplied by (B) 4, divided by (C) 3; and (iv) With respect to the four (4) consecutive Fiscal Quarter period ending in March 2004 and thereafter, the ratio of (i) the sum of (A) total Indebtedness of the Company and its Subsidiaries at the end of such period and (B) all Capital Lease Obligations at the end of such period, to (ii) EBITDA for the four (4) consecutive Fiscal Quarters ending at the end of such period. "`Net Income (Loss)' shall mean, for any period, net income (loss) after Taxes of the Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period, all computed in accordance with GAAP; provided, however, that, for purposes of calculating minimum EBITDA under Section 9.14(a), the minimum Fixed Charge Coverage Ratio under Section 9.14(b) and the maximum Leverage Ratio under Section 9.14(c), the costs incurred by the Company in connection with the restoration required to be made at the manufacturing facilities located at 7666 Formula Place in San Diego, California, up to a maximum of $250,000, shall be excluded from the calculation of Net Income (Loss)." "`Note' or `Notes' shall mean, individually or collectively, the November 1999 Note or the Bridge Note or both, and shall also include, where applicable, any additional note or notes issued by the Company in connection with any Assignments thereof. When used in this Agreement or any other Investment Document, references to `the Note' shall mean `any Note' or `the Notes', as applicable." "`November 1999 Warrant'" shall mean that certain Amended and Restated Warrant (No. LL-3) to Purchase 100 Shares of Common Stock, originally issued November 24, 1999, amended and restated as of October 29, 2002, and restated upon partial exercise as of December 13, 2002, as amended from time to time, which evidences the remaining unexercised Warrant Shares under the Original Warrant, and shall also include any other warrant or warrants issued upon the exercise or transfer of all or any portion thereof and the transfer, division or combination of any such other warrant or warrants. -6- "`Obligations' or `Obligations to Purchaser' shall mean all present and future loans, advances, Indebtedness, claims, guarantees, liabilities or obligations of the Company Parties (or any of them) or any of their Subsidiaries or other Affiliates owing to the Purchaser, any Affiliate of the Purchaser or any Indemnified Party (or any assignee or transferee thereof), of whatever nature, type or description, arising under or in connection with the Original Investment Documents, this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Investor Rights Agreement (including the consulting fees payable thereunder), the Collateral Documents, the Equity Repurchase Option Agreement, any other Investment Documents or otherwise, any and all agreements, instruments or other documents heretofore or hereafter executed or delivered in connection with any of the foregoing, in each case whether due or not due, direct or indirect, joint and/or several, absolute or contingent, voluntary or involuntary, liquidated or unliquidated, determined or undetermined, now or hereafter existing, amended, renewed, extended, exchanged, restated, refinanced, refunded or restructured, whether or not from time to time decreased or extinguished and later increased, created or incurred, whether for principal, interest (including post-judgment interest), premiums, fees, costs, expenses (including attorneys', accountants', appraisers', investment bankers', auctioneers' and other professional fees and expenses, including court and other procedural costs) or other amounts incurred for administration, collection, enforcement or otherwise, whether or not arising after the commencement of any proceeding under the Bankruptcy Law (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding, and whether or not recovery of any such obligation or liability may be barred by any statute of limitations or such Indebtedness, claim, liability or obligation may otherwise be unenforceable." "`Senior Credit Agreement'" shall mean (i) that certain Amended and Restated Loan and Security Agreement dated as of October 29, 2002, (the "UBOC Credit Agreement"), among UBOC, the Company and Overhill Ventures, as amended by a First Amendment dated as of November 22, 2002, a Second Amendment dated as of December 20, 2002, and a Third Amendment dated as of April 4, 2003, and as further amended from time to time, subject to the terms of the Intercreditor Agreement (the "UBOC Credit Agreement"), or (ii) such other loan or credit agreement entered into by the Company and any other Senior Lender in connection with a refinancing of the Senior Indebtedness owing to UBOC under the UBOC Senior Credit Documents (the "Other Senior Credit Agreement")." -7- (c) Clause (v) of the definition of "Change in Control" in Section 1.1 (Definitions) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "(v) [Intentionally Omitted];" (d) Section 3.1 (Organization and Qualification) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "3.1 Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and has all requisite power and authority to own or lease and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified or licensed to do business as a foreign corporation in the States of California, Texas and each other jurisdiction in which the character of the properties or assets owned, leased or operated or the nature of the activities conducted makes such qualification or licensing necessary, except where the failure to be so qualified or licensed in such other jurisdictions could not have, individually or in the aggregate, a Material Adverse Effect." (e) Clause (a) of Section 3.7 (Capitalization) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "(a) Schedule 3.7(a) sets forth, as of the First Amendment Effective Date, (i) the authorized Capital Stock of the Company, including classes and series of Capital Stock, (ii) the number of shares of Capital Stock issued and outstanding, including shares of Common Stock and of preferred stock, (iii) the number of shares of Capital Stock reserved for issuance under the Company Stock Plans, including the number of options to purchase Capital Stock granted under each Company Stock Plan; (iv) the number and type of shares of Capital Stock subject to options granted under each Company Stock Plan, including the name of the grantee, the exercise price and the expiration date; (v) the aggregate number of shares of Common Stock reserved for issuance upon conversion of the Series A Preferred Stock; (vi) the number of shares of Common Stock reserved for issuance upon exercise of each Warrant and (viii) the number of shares of Capital Stock on a Fully Diluted Basis. All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable, and are free and clear of any Liens and other restrictions (including any restrictions on the right to vote, sell or otherwise dispose of such Capital Stock) and of any preemptive or other similar rights to subscribe for or to purchase any such Capital Stock, other than those contained in the Investor Rights Agreement. There are: (A) no outstanding Option Rights of the Company other than the Warrants and -8- the Series A Preferred Shares; (B) no voting trusts or other agreements or undertakings with respect to the voting of the Capital Stock of the Company other than the Investor Rights Agreement; (C) except as provided for in the Equity Repurchase Option Agreement, no obligations or rights (whether fixed or contingent) on the part of the Company or any other Person to purchase, repurchase, redeem or "put" any outstanding shares of the Capital Stock of the Company or Option Rights of the Company; and (D) no agreements granting any Person (other than the Purchaser) any rights of first offer or first refusal, registration rights or "drag-along," "tag-along" or similar rights with respect to any transfer of any Capital Stock or Option Rights of the Company or any of its Subsidiaries. All shares of Capital Stock and Option Rights of the Company that have been issued by the Company have been issued and offered in compliance with all federal and applicable state securities laws. No Capital Stock or Option Rights of the Company will be issued or become issuable to any Person (other than the Purchaser) pursuant to any "anti-dilution" provisions on account of the issuance of any securities by the Company or the exercise of any Option Rights (including the Warrants). The April 2003 Shares being issued to the Purchaser on and as of the First Amendment Effective Date represents less than twenty percent (20.0%) of the outstanding shares of Common Stock on and as of the First Amendment Effective Date." (f) The first sentence of Section 3.10 (SEC Documents) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "The Company has filed with the Commission all SEC Documents (including the Form 10 Registration Statement) that have been required to be filed by it with the Commission and the AMEX." (g) Clause (c) of Section 8.3 (Information Reporting Requirements) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "(c) (A) On Wednesday of each week (which may be furnished via telecopier), a package of information (the "Weekly Reporting Package"), including: (i) the weekly internal sales report of the Company and its Subsidiaries with respect to the prior week; (ii) the consolidated accounts receivables of the Company and its Subsidiaries as of the end of such prior week; (iii) the 90-Day Receivables as of the end of such prior week; (iv) the consolidated accounts payables of the Company and its Subsidiaries as of the end of such prior week; (v) the 60-Day Payables as of the end of such prior week; (vi) a copy of the borrowing base certificate, if any, delivered to the Senior Lender during the prior week; (vii) a cash flow analysis for the twelve (12) week period commencing at the end of the prior week; (viii) a revolving credit facility availability analysis for the twelve (12) week period commencing at the end of the prior week showing, among other things, a minimum of -9- $500,000 of Senior Availability at any time (including at any time the Company is required to make payments to the Purchaser under this Agreement or any other Investment Document during such period); (ix) a written "new business" report updating the Company's business generation activities during the prior week, in form and substance satisfactory to the Purchaser; (x) a written "yield report" of the Company, in form and substance satisfactory to the Purchaser; (xi) a written report detailing the Company's progress with respect to each First Amendment Business Plan; and (xii) such additional information as may be mutually agreed upon by the Company and the Purchaser; and (B) on a daily basis (to be received via telecopier not later than 12:00 noon (Los Angeles time) a package of information (the "Daily Reporting Package") consisting of (i) a certificate setting forth the Company's borrowing base under the Senior Credit Agreement and Senior Availability, in each case at the end of the immediately preceding Business Day; and (ii) such additional information as may be requested by the Purchaser;" (h) Section 8.4 (Landlord Waivers; Warehouse Bailment Agreements) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: 8.24 Landlord Waivers; Warehouse Bailment Agreements. On or before April 30, 2003, the Company shall obtain Landlord Waivers and Warehouse Bailment Agreements, as applicable, from the lessor of each leased real property, mortgagee of owned real property or bailee with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located as of such date (other than with respect to those locations for which the Company has previously delivered Landlord Waivers or Warehouse Bailment Agreements, as the case may be). (i) Article 8 (Affirmative Covenants) of the Securities Purchase Agreement shall be amended by adding the following new Section 8.25 at the end of such Article: "8.25 Permanent Chief Financial Officer and Audit Committee Financial Expert. On or before April 30, 2003, the Company shall have employed a qualified individual to serve as the Company's Chief Financial Officer, which employment shall have been approved by the Company's Board of Directors. On or before May 30, 2003, the Company shall have elected or appointed an individual who qualifies as an "audit committee financial expert" (within the meaning of the rules implementing Section 407 of the Sarbanes-Oxley Act of 2002) to serve on the Company's Board of Directors." -10- (j) Article 8 (Affirmative Covenants) of the Securities Purchase Agreement shall be amended by adding the following new Section 8.26 immediately following new Section 8.25 at the end of such Article: "8.26 First Amendment Business Plans. The Company shall comply with and perform the terms and other provisions of each of the First Amendment Business Plans and implement the procedures and other requirements contained therein." (k) Clause (d) of Section 9.1 (Limitations on Indebtedness) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "(d) Trade accounts payable arising in the ordinary course of business that are more than sixty (60) days past their due dates and do not exceed in the aggregate (i) at any time from the First Amendment Effective Date to and including June 30, 2003 (during which period the Company shall have complied with the Trade Payables Reduction Plan), the amount of such trade accounts payable on the First Amendment Effective Date, (ii) $650,000 at any time during the period commencing on July 1, 2003, and ending on the last day of the Company's fiscal year ending in September 2003, and (iii) $200,000 at any time thereafter; provided, however, that if during any of such periods the aggregate amount of any such trade accounts payable exceeds the applicable amount for such period at any one time, then the Company shall not be deemed to be in violation of this clause (d) if the amount in excess of such applicable amount is being disputed or contested in good faith by appropriate proceedings in a commercially reasonable manner; or" (l) Section 9.14 (Financial Covenants) of the Securities Purchase Agreement shall be amended to read in its entirety as follows: "(a) Minimum EBITDA. For each of the periods listed in the table below, EBITDA shall not be less than the total amount set forth opposite each such period in the table: Minimum Period EBITDA ------ ------ Trailing Fiscal Quarter ending in March 2003 ............................................ $(1,200,000) Trailing Fiscal Quarter ending in June 2003 ............................................. 1,066,000 Trailing two consecutive Fiscal Quarters ending in September 2003 ........................................ 2,809,000 Trailing three consecutive Fiscal Quarters ending in December 2003 ......................................... 5,054,000 -11- Trailing four consecutive Fiscal Quarters ending in March 2004 ............................................... 7,174,000 Trailing four consecutive Fiscal Quarters ending in June 2004 ................................................ 8,183,000 Trailing four consecutive Fiscal Quarters ending in September 2004 ........................................... 8,385,000 "(b) Minimum Fixed Charge Coverage Ratio. For each of the periods listed in the table below, the Fixed Charge Coverage Ratio shall not be less than the ratio set forth opposite each such period in the table: Minimum Fixed Charge Period Coverage Ratio ------ -------------- Trailing Fiscal Quarter ending in June 2003 ................................................ 0.68 Trailing two consecutive Fiscal Quarters ending in September 2003 ........................................... 0.89 Trailing three consecutive Fiscal Quarters ending in December 2003 ............................................ 1.04 Trailing four consecutive Fiscal Quarters ending in March 2004 ............................................... 1.09 Trailing four consecutive Fiscal Quarters ending in June 2004 ................................................ 1.21 Trailing four consecutive Fiscal Quarters ending in September 2004 ........................................... 1.22 "(c) Maximum Leverage Ratio. As of the last day of each of the periods listed in the table below, the Leverage Ratio shall not exceed the ratio set forth opposite each such period in the table: Maximum Leverage Period Ratio ------ ----- Trailing Fiscal Quarter ending in June 2003 .............. 9.97 Trailing two consecutive Fiscal Quarters ending in September 2003 ........................................... 7.50 Trailing three consecutive Fiscal Quarters ending in December 2003 ............................................ 6.34 Trailing four consecutive Fiscal Quarters ending in March 2004 ............................................... 5.89 Trailing four consecutive Fiscal Quarters ending in June 2004 ................................................ 5.17 Trailing four consecutive Fiscal Quarters ending in September 2004 ........................................... 5.02 -12- "(d) Maximum Capital Expenditures. (i) Capital Expenditures (other than Capital Expenditures related primarily to the consolidation of the Company's manufacturing operations into the Vernon Facilities)shall not exceed $150,000 with respect to any Fiscal Quarter; provided, however, that if (A) the Company prepares and furnishes to the Purchaser a "payback" analysis of Capital Expenditures it proposes to make or incur in excess of such amounts, (B) the Purchaser has at least five (5) Business Days to review such analysis and (C) if satisfied with such analysis in its sole discretion, the Purchaser consents in writing to such excess amount(s) prior to the incurrence thereof, then the Company may make or incur such excess Capital Expenditures; and (ii) Capital Expenditures related primarily to the consolidation of the Company's manufacturing operations into the Vernon Facilities in any of the periods set forth in the following table shall not exceed the amounts set forth opposite such periods: Maximum Capital Period Expenditures ------ ------------ Trailing Fiscal Quarter ending in March 2003 .... $ 1,650,000 Trailing Fiscal Quarter ending in June 2003 ..... 500,000 Trailing Fiscal Quarter ending in September 2003 and thereafter ................... 0 "(e) [Intentionally Omitted.]" "(f) Maximum Payables Turn. For each of the "fiscal months" listed in the table below, the Payables Turn (expressed in a number of days) at the end of such month shall not be greater than the number of days set forth opposite each such month in the table: "Fiscal Month(s)" Payables Turn --------------- ------------- April, May, June, July and August 2003 ............... 62 September and October 2003 ........................... 61 November 2003 ........................................ 59 December 2003 and January 2004 ....................... 58 February 2004 ........................................ 61 March 2004 ........................................... 60 April and May 2004 ................................... 59 June, July and August 2004 ........................... 58 September 2004 and thereafter ........................ 56 -13- "(g) Minimum Net Working Capital. For each of the "fiscal months" listed in the table below, Net Working Capital shall not be less than the amount set forth opposite each such month in the table: Minimum "Fiscal Month(s)" Net Working Capital --------------- ------------------- April 2003 ..................................... $(2,700,000) May, June, July and August 2003 ................ (2,950,000) September 2003 ................................. (2,700,000) October 2003 ................................... (2,600,000) November 2003 .................................. (2,350,000) December 2003 and January 2004 ................. (2,000,000) February 2004 .................................. (1,850,000) March and April 2004 ........................... (1,500,000) May 2004 ....................................... (1,250,000) June, July and August 2004 ..................... (1,000,000) September 2004 and thereafter .................. (750,000) "(h) Minimum Senior Availability. Minimum Senior Availability shall not, at any time on or after April 24, 2003, be less than $500,000, based upon financial information furnished by the Company at or prior to such time." 4. Amendments to Disclosure Schedules. Effective on and as of the First Amendment Effective Date, pursuant to Section 12.3 of the Securities Purchase Agreement, each of the Disclosure Schedules included in Exhibit C attached hereto shall amend the corresponding Disclosure Schedule currently attached to the Securities Purchase Agreement as provided for in such amended Disclosure Schedule (it being understood that such amended Disclosure Schedules shall update such existing Disclosure Schedules through and including the First Amendment Effective Date). 5. Closing; Conditions Precedent. (a) Conditions to Purchaser's Obligations. The effectiveness of the Purchaser's waiver of the Specified Events of Default as provided in Section 1, the obligation of the Purchaser to purchase the Bridge Securities as provided in Section 2 and the amendments set forth in Sections 3 and 4 shall be subject to the satisfaction, in the Purchaser's sole discretion, of each of the following conditions precedent (the date upon which the last of such conditions precedent to be so satisfied shall be referred to herein as the "First Amendment Effective Date"): (i) First Amendment Effective Date. All of the conditions precedent set forth in this Section 5(a) shall be satisfied on April 4, 2003. -14- (ii) Representations and Warranties. The Purchaser shall have received an Officers' Certificate, in form and substance satisfactory to the Purchaser, dated as of the First Amendment Effective Date and duly executed by the President and Chief Executive Officer and the Chief Financial Officer of the Company, to the effect that (A) after giving effect to this Amendment (including the amendments to the Disclosure Schedules attached as Exhibit C hereto), each of the representations and warranties of the Company contained in the Securities Purchase Agreement and this Amendment was true and correct on and as of the date hereof and is true and correct on and as of the First Amendment Effective Date, with the same effect as if made on and as of the First Amendment Effective Date; (B) each of the covenants and agreements of the Company required to be performed or satisfied under this Amendment on or before the First Amendment Effective Date has been performed or satisfied on or before the First Amendment Effective Date; (C) the Company has satisfied or fulfilled each of the conditions precedent set forth in this Section 5(a); (D) no Default or Event of Default has occurred and is continuing other than the Specified Events of Default or will result from the execution, delivery or performance of this Amendment, the issuance, sale or delivery of the Bridge Note or the consummation of the other transactions contemplated hereby; and (E) since September 29, 2002, no Material Adverse Change has occurred other than as previously disclosed in the Company's SEC Documents. (iii) No Legal Prohibitions. The consummation of the transactions contemplated by this Amendment shall not be prohibited by or violate any Applicable Laws and shall not subject any party to any Tax, penalty or liability, under or pursuant to any Applicable Laws. Without limiting the generality of the foregoing, the consummation of the transactions contemplated hereby shall otherwise comply with all applicable requirements of federal securities and state securities or "blue sky" laws. (iv) Principal Closing Documents. The Purchaser shall have received the following closing documents, each dated as of the First Amendment Effective Date (the documents referred to in clauses (A), (C), (F) and (G) below, together with this Amendment, are collectively referred to herein as the "Bridge Financing Documents"): (A) Bridge Note. The Bridge Note, duly executed by the Company and acknowledged and consented to by the Guarantor. (B) [Intentionally Omitted.] (C) Amendment to Note. An amendment to the Amended and Restated Secured Senior Subordinated Note Due 2004, in form and substance satisfactory to the Purchaser, duly executed by the Company and acknowledged and consented to by the Guarantor. (D) Amendment to Intercreditor Agreement. A Third Amendment to Intercreditor and Subordination Agreement, in form and substance satisfactory to the Purchaser, duly executed by the Senior Lender and acknowledged by the Company and the Guarantor. -15- (E) [Intentionally Omitted.] (F) Deposit Account Control Agreement. A Deposit Account Control Agreement, in form and substance satisfactory to the Purchaser, duly executed by the Company and the Depository (as defined below), with respect to the Trade Payables Deposit Account. (G) Amendment to Security Agreement. An amendment to the Security Agreement, in form and substance satisfactory to the Purchaser, duly executed by the Company and the Purchaser. (v) Accrued and Unpaid Interest. The Purchaser shall have received, by wire transfer in immediately available funds, all accrued and unpaid interest under the Amended and Restated Secured Senior Subordinated Note Due 2004 through and including the First Amendment Effective Date (including unpaid interest accruing at the Default Rate (as defined in the Amended and Restated Secured Senior Subordinated Note Due 2004) from December 29, 2002, through and including the First Amendment Effective Date), provided that such interest may be withheld by the Purchaser from payment of the Bridge Securities Purchase Price. (vi) Payments Past Due. (A) The Purchaser shall have received the amount of $223,000 representing the last installment of the Fifth Amendment Restructuring Fee payable under Section 8.23(c) of the Securities Purchase Agreement and (B) LLCP Inc. shall have received the amount of $24,000 representing accrued and unpaid monthly consulting fees under Section 1.6(d) of the Investor Rights Agreement for the months of March and April 2003, provided that such aggregate amount may be withheld by the Purchaser from payment of the Bridge Securities Purchase Price. (vii) Consents. The Company shall have obtained all Consents required to be obtained from all Governmental Authorities and other Persons in connection with the transactions contemplated by this Amendment, and the Purchaser shall have approved the terms and conditions thereof. (viii) Opinion of Counsel. The Purchaser shall have received opinion letters of Jenkens & Gilchrist, special counsel the Company and Overhill Ventures, and Kummer Kaempfer Bonner & Renshaw, Nevada counsel to the Company, each dated the First Amendment Effective Date and addressed to the Purchaser, in form and substance satisfactory to the Purchaser and its legal counsel, copies of which shall be delivered to the Purchaser. (ix) Financial Projections. The Purchaser shall have received from the Company, and the Purchaser shall have approved, revised consolidated financial projections of the Company and its Subsidiaries for the period commencing February 1, 2003 through and including September 30, 2004. Such financial projections shall specify the assumptions on which they are based, which assumptions shall be prepared in good faith by management and shall be reasonable. The financial projections shall be accompanied by an Officers' Certificate, in form and substance satisfactory to the -16- Purchaser, duly executed by the President and Chief Executive Officer and the Chief Financial Officer of the Company. (x) Other Financial Information. The Purchaser shall have received from the Company a Weekly Reporting Package (as amended by this Amendment) for the full week immediately preceding the week in which the First Amendment Effective Date occurs. Such Weekly Reporting Package shall be accompanied by an Officers' Certificate, in form and substance satisfactory to the Purchaser, duly executed by the President and Chief Executive Officer and the Chief Financial Officer of the Company. (xi) Trade Payables Deposit Account. The Company shall have established at a bank or other financial institution selected by the Company (the "Depository") a separate, interest-bearing deposit account (the "Trade Payables Deposit Account") into which the net proceeds from the issuance and sale of the Bridge Securities shall be deposited and which shall be subject to the terms of the Deposit Account Control Agreement described in Section 5(a)(iv)(F) above. (xii) First Amendment Business Plans. The Purchaser shall have received from the Company an Officers' Certificate, in form and substance satisfactory to the Purchaser, dated as of the First Amendment Effective Date and duly executed by the President and Chief Executive Officer and the Chief Financial Officer of the Company, accompanied by the following business plans, each prepared in good faith by the Company's management (collectively, the "First Amendment Business Plans"): (A) A plan to pay in full the Company's entire outstanding balance of trade payables over 30 days past due as reported in the Company's March 29, 2003 accounts payable aging report (the "Trade Payables Reduction Plan"); (B) A plan to complete the Consolidation on a specified time table; and (C) A plan to restructure the Company's sales division (which plan shall include, among other things, the Company's plan to hire a new sales manager by June 30, 2003 and to implement an incentive-based compensation plan for the Company's sales division). (xiii) UBOC Credit Document Waivers and Amendments. The Purchaser shall have received true, correct and complete copies of (A) waivers by the Senior Lender of defaults and events of default under the Senior Credit Documents with UBOC through the First Amendment Effective Date and (B) a Third Amendment to the UBOC Credit Agreement and such other amendments to the other Senior Credit Documents with UBOC, in form and substance satisfactory to the Purchaser, duly executed by the Company, Overhill Ventures and UBOC. (xiv) [Intentionally Omitted.] -17- (xv) Solvency Certificate. The Purchaser shall have received a Solvency Certificate, in form and substance satisfactory to the Purchaser, duly executed by the President and Chief Executive Officer and the Chief Financial Officer of the Company, certifying as to the matters described therein. (xvi) No Material Adverse Change. Since September 29, 2002, there shall not have occurred any Material Adverse Change other than as previously disclosed in the Company's SEC Documents. (xvii) Certified Board Resolutions. The Purchaser shall have received a Secretary's Certificate from the Company and Overhill Ventures, in form and substance satisfactory to the Purchaser, duly executed by the Secretary of the Company or Overhill Ventures, as the case may be, certifying as to the resolutions of the Board of Directors of the Company or Overhill Ventures, as the case may be, approving the execution and delivery of this Amendment, the issuance, sale and delivery of the Bridge Securities and the other transactions contemplated by this Amendment. (xviii) Fees and Expenses. The Company shall have reimbursed the Purchaser for all actual and estimated fees, costs and expenses, including attorneys' fees and expenses, expended or incurred by the Purchaser in connection with the negotiation, preparation, execution and performance of this Amendment and the transactions contemplated hereby or that otherwise remain unreimbursed as of the First Amendment Effective Date, provided that such fees, costs and expenses may be withheld by the Purchaser from the payment of the Bridge Securities Purchase Price. (xix) Good Standing Certificates. The Purchaser shall have received a domestic good standing certificate of each of the Company and Overhill Ventures issued by the Secretary of State of its state of incorporation, a foreign good standing certificate of the Company, issued by the Secretary of State of the State of California and a good standing tax certificate of each of the Company and Overhill Ventures issued by the California Franchise Tax Board, in each case dated as of a recent practicable date prior to the First Amendment Effective Date. (xx) Insurance Certificates. The Purchaser shall have received certificates of insurance with respect to the insurance policies required to be maintained by the Company pursuant to Section 8.9 of the Securities Purchase Agreement (including the directors and officers liability insurance and the key man life insurance policy on the life of James Rudis), together with additional insured and lender's loss payable endorsements in favor of the Purchaser, all in form and substance satisfactory to the Purchaser. (xxi) Lien Searches. The Purchaser shall have received UCC, Tax and judgment lien searches for the Company and Overhill Ventures in each state or other jurisdiction in which the Company and Overhill Ventures is incorporated or located, in each case dated as of a recent practicable date. (xxii) [Intentionally Omitted.] -18- (xxiii) Corporate Proceedings. All proceedings taken prior to or at the closing in connection with the issuance and sale of the Bridge Securities and the consummation of the other transactions contemplated hereby, and all papers and other documents relating thereto, shall be in form and substance satisfactory to the Purchaser and its legal counsel, and the Purchaser shall have received copies of such documents and papers, all in form and substance satisfactory to the Purchaser and its counsel, all such documents, where appropriate, to be counterpart originals and/or certified by proper authorities, corporate officials and other Persons. (b) Conditions to Company's Obligations. The obligation of the Company to issue and sell the Bridge Note to the Purchaser and the effectiveness of the amendments set forth in Sections 3 and 4 as of the First Amendment Effective Date shall be subject to the satisfaction of each of the following conditions precedent: (i) Representations and Warranties. The representations and warranties of the Purchaser contained in Section 7 of this Amendment shall be true and correct in all material respects on and as of the First Amendment Effective Date. (ii) Bridge Note Purchase Price. The Purchaser shall have delivered to the Company the Bridge Note Purchase Price, less the fees, costs and expenses to be reimbursed by the Company under Sections 5(a)(v), (vi) and (xviii). 6. Representations and Warranties of the Company. In order to induce the Purchaser to purchase the Bridge Securities, to waive the Specified Events of Default and to amend the Securities Purchase Agreement as provided for herein, the Company represents and warrants to the Purchaser as follows: (a) Authorization; Binding Effect. Each of the Company and the Guarantor has the full power and authority to enter into, deliver and perform its obligations under this Amendment, the Bridge Securities and the other Bridge Financing Documents to which it is a party, including the issuance, sale and delivery of the Bridge Securities. The execution, delivery and performance by the Company and the Guarantor of this Amendment, the Bridge Securities and the other Bridge Financing Documents to which it is a party, the issuance, sale and delivery of each of the Bridge Securities and the consummation of the other transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of the Company and the Guarantor, respectively. This Amendment has been duly executed and delivered by the Company and the Guarantor and, on the First Amendment Effective Date, the Bridge Note and the other Bridge Financing Documents will be duly executed and delivered by the Company and the Guarantor. This Amendment is, and on the First Amendment Effective Date each of the Bridge Securities and the other Bridge Financing Documents will be, the legal, valid and binding obligations of the Company and the Guarantor, enforceable against the Company and Overhill Ventures in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability and except as rights of indemnity or -19- contribution may be limited by federal or state securities or other laws or the public policy underlying such laws. (b) No Conflict. The execution, delivery and performance by the Company of this Amendment, the Bridge Securities and the other Bridge Financing Documents, the issuance, sale and delivery of the Bridge Securities and the consummation of the other transactions contemplated hereby do not and will not violate or conflict with, or cause a default under, or give rise to a right of termination under, (i) the charter or bylaws of the Company or any of its Subsidiaries, as in effect on the date hereof; (ii) any Applicable Laws (including the AMEX rules and provided the AMEX approves the Listing Application); or (iii) any term of any Material Contract, indenture, note, mortgage, instrument or other agreement to which the Company or any of its Subsidiaries is a party or by which any of its or their properties or assets are bound. (c) Rank; Obligations. No Indebtedness of the Company ranks pari passu with any Indebtedness evidenced by the Bridge Note other than the Indebtedness under the November 1999 Note, and payment of principal of, premium, if any, and interest on the Indebtedness evidenced by the Notes and the other Obligations is subordinate only to the payment of the Senior Indebtedness. Immediately following the Bridge Note Closing, there will be no agreement, indenture, instrument or other document to which the Company or any of its Subsidiaries is a party or by which it or they are bound that requires the subordination in right of payment or rights upon liquidation of any Obligations to Purchaser (including Indebtedness under the November 1999 Note and the Bridge Note) to the repayment of any other existing or future Indebtedness of the Company or any of its Subsidiaries. (d) No Consents. Neither the Company nor any of its Subsidiaries or other Affiliates is required to obtain any Consent in connection with execution, delivery or performance of this Amendment, any Bridge Securities or any other Bridge Financing Documents or the issuance, sale and delivery of the Bridge Securities, or for the purpose of maintaining in full force and effect any Licenses and Permits of the Company or any of its Subsidiaries, from (a) any Governmental Authority or (b) any other Person, except where the failure to obtain such consent or maintain any such License or Permit, as the case may be, could not have a Material Adverse Effect. (e) Representations and Warranties. After giving effect to the amended the Disclosure Schedules attached as Exhibit C hereto, each of the representations and warranties of the Company contained in Section 3 of the Securities Purchase Agreement is true and correct in all material respects. (f) April 2003 Shares. The April 2003 Shares have been duly authorized and, when issued in accordance with the terms of this Amendment, will be validly issued, fully paid and nonassessable, and will be free of any security interests, liens or encumbrances. (g) Securities Laws. The offer and sale of the Bridge Securities in accordance with the terms hereof will be exempt from the registration requirements of the -20- Securities Act and the registration or qualification requirements of any applicable state securities or "blue sky" laws. (h) No Default. No Default or Event of Default has occurred and is continuing or will result from the execution, delivery or performance of this Amendment, the Bridge Securities or the other Bridge Financing Documents, the issuance, sale or delivery of the Bridge Securities or the consummation of the other transactions contemplated hereby. (i) Collateral Security. The Liens granted in favor of the Purchaser under the Collateral Documents constitute valid, enforceable, perfected and continuing security interests and liens in, on and to the Collateral to secure the payment and performance in full of all Obligations, including all Indebtedness and other Obligations under the Notes, and such security interests and liens are subject, as to priority, only to the Senior Liens and Permitted Liens to the extent entitled to priority under Applicable Law except with respect to the security interests and liens of the Purchaser in and to the Trade Payables Deposit Account, in which case the Purchaser shall have a first priority security interest and lien. 7. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company that: (a) The Purchaser is acquiring the Bridge Securities for its own account, for investment purposes, and not with a view to or for sale in connection with any distribution thereof. The Purchaser understands that the Bridge Securities have not been registered under the Securities Act or registered or qualified under any state securities law in reliance upon specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of the Purchaser's investment intent as expressed herein; and (b) The Purchaser is an "accredited investor" (as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act). By reason of its business and financial experience, the Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Bridge Securities, has the capacity to protect its own interests and is able to bear the economic risk of such investment. 8. Post-Closing Fees. As additional consideration for the Purchaser's agreement to waive the Specified Events of Default, purchase the Bridge Note and amend the Securities Purchase Agreement as provided for herein, on April 16, 2003, the Company shall pay to the Purchaser, by wire transfer in immediately available funds, the aggregate amount of $724,667.59, consisting of (A) a non-refundable Bridge Note closing fee, by wire transfer in immediately available funds, in the amount of $224,667.59 and (B) a non-refundable restructuring fee related to the transactions contemplated herein in the amount of $500,000. -21- 9. Listing Application; Issuance of April 2003 Shares. (a) Not later than April 4, 2003, the Company shall file with the AMEX an application with AMEX to obtain the approval by AMEX of the listing of the April 2003 Shares with the AMEX (the "Listing Application") to issue the April 2003 Shares to the Purchaser, and the Purchaser shall have received a true, correct and complete copy of the Listing Application and all attachments thereto and correspondence relating thereto. (b) On the Business Day (the "Share Issuance Date") immediately following the date upon which the AMEX shall have approved the Listing Application, but not later than April 16, 2003, the Company shall issue, sell and deliver to the Purchaser a certificate representing or evidencing the April 2003 Shares, duly executed by the Company, against delivery of the April 2003 Share Purchase Price in accordance with Section 2(c). The Company shall use its best efforts to obtain as soon as possible the approval by AMEX of the Listing Application. 10. Confirmation; Full Force and Effect. The amendments set forth in Sections 3 and 4 above shall amend the Securities Purchase Agreement on and as of the First Amendment Effective Date, and the Securities Purchase Agreement shall otherwise remain in full force and effect, as amended thereby, from and after the First Amendment Effective Date in accordance with its terms. The Company hereby ratifies, approves and affirms in all respects each of the Securities Purchase Agreement, as amended hereby, the Notes (including the November 1999 Note and the Bridge Note), the Collateral Documents (including the Liens granted in favor of the Purchaser under the Collateral Documents) and each of the other Investment Document, the terms and other provisions hereof and thereof and the Obligations hereunder and thereunder. 11. Confirmation of Guaranty. The Guarantor hereby acknowledges that it has read this Amendment and the other Bridge Financing Documents and consents to their terms, including the issuance, sale and delivery of the Bridge Securities. Further, the undersigned hereby (a) confirms that it is a party to the Guaranty and that, among other things, the payment and performance of the Bridge Securities is guarantied by it under the Guaranty, (b) ratifies, approves and reaffirms in all respects the terms and other provisions of, and its obligations under, the Guaranty, the Collateral Documents and the other Investment Documents to which it is a party or which it has consented to or acknowledged and (c) confirms that the Guaranty, the Collateral Documents and the other Investment Documents to which it is a party remain in full force and effect in accordance with their respective terms. 12. No Other Amendments. This Amendment is being delivered without prejudice to the rights, remedies or powers of the Purchaser in connection with or under the Securities Purchase Agreement, the Notes, the Collateral Documents and the other Investment Documents, Applicable Laws or otherwise and, except as expressly provided in Sections 3 and 4 above, shall not constitute or be deemed to constitute an amendment or other modification of, or a supplement to, the Securities Purchase Agreement or any Investment Document. In addition, nothing contained in this Amendment is intended to limit or impair any right, power or remedy of the Purchaser under the Securities Purchase -22- Agreement or any Investment Document or, except as provided in Section 1 with respect to the Specified Events of Default, shall be construed as a waiver of any breach, violation, Default or Events of Default, whether past, present or future, under the Securities Purchase Agreement or any Investment Document, or a forbearance by the Purchaser of any of its rights, remedies or powers against the Company 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 Notes, the Collateral Documents and the Investment Documents, whether at law or in equity, including, without limitation, the right to declare all Obligations to be due and payable. 13. Miscellaneous Provisions. (a) No Repurchase Option Trigger Event. The parties acknowledge and agree that nothing contained in this Amendment or any agreement, instrument or other document contemplated hereby or related hereto shall constitute a Repurchase Option Trigger Event (as defined in the Equity Repurchase Option Agreement). (b) Entire Agreement; Successors and Assigns. This Amendment, together with the other Bridge Financing Documents, constitute the entire understanding and agreement with respect to the subject matter hereof and supersede all prior oral and written, and all contemporaneous oral, agreements and understandings with respect thereto (including the letter agreement dated March 14, 2003, between the Company and the Purchaser). This Amendment shall inure to the benefit of, and be binding upon, the parties and their respective successors and permitted assigns. (c) Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT REGARD TO THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF). (d) Counterparts. This Amendment may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. [SIGNATURE PAGE FOLLOWS] -23- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized representatives as of the date first written above. COMPANY OVERHILL FARMS, INC., a Nevada corporation By: /s/James Rudis ----------------------------------------- James Rudis President and Chief Executive Officer By: /s/John Steinbrun ----------------------------------------- John Steinbrun Senior Vice President and Chief Financial Officer GUARANTOR OVERHILL L.C. VENTURES, INC., a California corporation By: /s/James Rudis ----------------------------------------- James Rudis President By: /s/Richard A. Horvath ----------------------------------------- Richard A. Horvath Chief Financial Officer PURCHASER LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership By: LLCP California Equity Partners II, L.P., a California limited partnership, its General Partner By: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/Steven E. Hartman --------------------------------- Steven E. Hartman Vice President -24- EX-99.12 4 dex9912.txt SECURED SENIOR SUBORDINATED BRIDGE NOTE Exhibit 99.12 THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION. PAYMENT OF THE INDEBTEDNESS EVIDENCED BY THIS SECURITY, INCLUDING PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, AND THE RIGHTS OF ANY HOLDER OF THIS SECURITY ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS OF OCTOBER 29, 2002, AS AMENDED, BETWEEN LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., AS THE HOLDER OF THIS SECURITY, AND UNION BANK OF CALIFORNIA, N.A. A COPY OF SUCH AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT MAY BE OBTAINED FROM THE ISSUER UPON REQUEST. THIS SECURITY WAS ISSUED INITIALLY WITH ORIGINAL ISSUE DISCOUNT (OID). PURSUANT TO TREASURY REGULATION (S)1.1275-3(b)(1), A REPRESENTATIVE OF THE ISSUER WILL, BEGINNING TEN DAYS AFTER THE ORIGINAL ISSUE DATE OF THIS SECURITY, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION (S)1.1275-3(b)(1)(i). THE REPRESENTATIVE MAY BE REACHED AT TELEPHONE NUMBER (323) 582-9977. OVERHILL FARMS, INC. SECURED SENIOR SUBORDINATED BRIDGE NOTE $3,000,000.00 April 4, 2003 FOR VALUE RECEIVED, OVERHILL FARMS, INC., a Nevada corporation (the "Borrower" or the "Company"), hereby promises to pay to the order of LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership (the "Purchaser"), or its assigns (together with the Purchaser, the "Holder"), the sum of THREE MILLION DOLLARS ($3,000,000.00) in immediately available funds and in lawful money of the United States of America, all as provided below. This Secured Senior Subordinated Bridge Note (this "Note") is being issued by the Company pursuant to the terms of that certain First Amendment to Securities Purchase Agreement dated as of April 4, 2003 (the "First Amendment") which amends that certain Amended and Restated Securities Purchase Agreement dated as of October 29, 2002 (as amended by the First Amendment and as further amended from time to time, the "Securities Purchase Agreement"), by and among the Company, the entities from time to time parties thereto as Guarantors and the Purchaser. This Note is the "Bridge Note" referred to in the Securities Purchase Agreement which provides for, among other things, the right of the Holder to accelerate the outstanding principal balance of, premium, if any, and accrued and unpaid interest on, and all other amounts owing under, this Note upon the occurrence of an Event of Default. 1. Definitions. Unless otherwise indicated, all capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement. 2. Payment of Interest; Default Rate. So long as no Default or Event of Default shall have occurred and be continuing, the Borrower shall pay interest in cash on the unpaid principal balance of this Note at a rate per annum (the "Base Rate") equal to fifteen percent (15.0%) until this Note is fully paid. Interest shall be payable monthly in arrears on the last Business Day of each calendar month (or portion thereof) (each an "Interest Payment Date"), commencing on April 30, 2003. Interest shall be computed on the basis of the actual number of days elapsed over a 360-day year, including the first and the last day. If any Default or Event of Default shall have occurred and be continuing, then, in addition to the rights, powers and remedies available to the Holder under the Securities Purchase Agreement, this Note, the other Investment Documents and Applicable Law, the Borrower shall pay interest on the unpaid principal balance of, premium, if any, and accrued and unpaid interest on, and other amounts owing under, this Note at a rate per annum (the "Default Rate") equal to seventeen percent (17.0%) for the first sixty (60) days during which such Default or Event of Default shall remain uncured or unwaived and, thereafter, such rate shall increase by one percent (1.0%) per annum over the rate applicable to the thirty (30) days prior thereto for each additional thirty (30) days that such Default or Event of Default remains uncured or unwaived; provided, however, that the Default Rate shall not exceed twenty percent (20%). The Default Rate shall begin to accrue on the date on which such Default or Event of Default shall be deemed to have occurred (determined as provided in the last paragraph of Section 11.1 of the Securities Purchase Agreement) and shall continue until such Default or Event of Default shall have been cured or waived. 3. Payment of Principal. The Borrower shall pay in full the entire outstanding principal balance of this Note, together with all premium, if any, accrued and unpaid interest and other amounts owing under this Note, on January 30, 2004 (the "Maturity Date"). 4. Optional Prepayments. (a) The Borrower may voluntarily prepay the principal balance of this Note, in whole or in part, without premium or penalty in accordance with the provisions of Section Error! Reference source not found.Error! Reference source not found.. Any prepayment of this Note made under this Section Error! Reference source not found. shall also include all accrued and unpaid interest on the then-outstanding principal balance of this Note through the date of prepayment. (b) If the Borrower elects to prepay all or any portion of the principal balance of this Note, the Borrower shall furnish written notice to the Holder with respect to each voluntary prepayment not less than thirty (30) days prior to the date of prepayment. -2- Such notice shall set forth the specific date of prepayment and the principal amount of this Note to be prepaid on such date and shall be irrevocable. Notice of prepayment having been given as aforesaid, the Borrower shall make a prepayment to the Holder on such prepayment date in an amount equal to the principal amount of this Note set forth in such prepayment notice to be prepaid, together with all accrued and unpaid interest on the then-outstanding principal balance of this Note through the date of prepayment. 5. [Intentionally Omitted.] 6. Change in Control. If a Change in Control shall occur at any time, the Holder may, at its sole election, require the Borrower to prepay this Note, in whole or in part, at any time during the one hundred and eighty (180) day period following the occurrence of the Change in Control, at 104.0% of the principal balance of this Note, plus all accrued and unpaid interest on, and other amounts owing under, this Note through the date of prepayment. The Borrower shall notify the Holder in writing, if possible, of any Change in Control at least ten (10) days prior to the date that such Change in Control is scheduled to occur. The Borrower shall also notify the Holder of the date on which any Change in Control shall have actually occurred within one (1) Business Day after such date and shall inform the Holder, in such notification, of the Holder's right to require the Borrower to prepay this Note as provided in this Section 6 and of the date on which such right shall terminate. If the Holder elects to require the Borrower to prepay this Note pursuant to this Section 6, it shall furnish a written notice to the Borrower advising the Borrower of such election and the outstanding principal balance hereof, premium, accrued and unpaid interest and all other amounts to be prepaid. The Borrower shall prepay this Note in accordance with this Section 6 and such written notice within one (1) Business Day after its receipt of such written notice. 7. Holder Entitled to Certain Benefits. Payment and performance of this Note are secured by the security interests and liens granted under the Collateral Documents and are guarantied under the Guaranty. 8. Manner of Payment. Payments of principal, interest and other amounts due under this Note shall be made no later than 12:00 p.m. (noon) (Los Angeles time) on the date when due and in lawful money of the United States of America and (by wire transfer in funds immediately available at the place of payment) to such account as the Holder may designate in writing to the Borrower and, if to the Purchaser, to: Bank of America, Century City, Private Banking, 2049 Century Park East, Los Angeles, California 90067; ABA No. 121000358; Account No. 1154603239; Attention: Cheryl Stewart (or such other place of payment as the Purchaser may designate in writing). All such payments shall be made without any deduction whatsoever, including any deduction for set-off, recoupment, counterclaim or taxes. Any payments received after 12:00 p.m. (noon) (Los Angeles time) shall be deemed to have been received on the next succeeding Business Day. Any payments due hereunder which are due on a day which is not a Business Day shall be payable on the immediately preceding Business Day, together with all accrued and unpaid interest through the actual due date of payment. 9. Maximum Lawful Rate of Interest. The rate of interest payable under this Note shall in no event exceed the maximum rate permissible under Applicable Law. If the -3- rate of interest payable on this Note is ever reduced as a result of this Section 9 and at any time thereafter the maximum rate permitted under Applicable Law exceeds the rate of interest provided for in this Note, then the rate provided for in this Note shall be increased to the maximum rate provided for under Applicable Law for such period as is required so that the total amount of interest received by the Holder is that which would have been received by the Holder but for the operation of the first sentence of this Section 9. 10. Borrower's Waivers. The Borrower hereby waives presentment for payment, demand, protest, notice of protest and notice of dishonor, and all other notices of any kind whatsoever to which it may be entitled under Applicable Law or otherwise, except for notices to which the Borrower is expressly entitled under this Note. 11. Registration of Notes. The Company shall maintain at its principal executive office a register in which it shall register this Note, any Assignments of this Note or any other notes and any other notes issued upon surrender hereof and thereof. Upon surrender at the Company's principal executive office of this Note for registration of any Assignment, the Company shall, at its expense and within three (3) Business Days of such surrender, execute and deliver one or more new notes of like tenor in the requested principal denominations and register such new note or notes in the register to be maintained by the Company. At the option of the Holder, this Note may be exchanged for one or more new notes of like tenor in the requested principal denominations, and the Borrower shall deliver such new notes not later than three (3) Business Days after the Holder's request. 12. Persons Deemed Owners; Participations. Prior to due presentment for registration of any Assignment, the Company may treat the Person in whose name any Note is registered as the owner and Holder of such Note for all purposes whatsoever, and the Company shall not be affected by notice to the contrary. Subject to the preceding sentence, the Purchaser may grant to any Person participations from time to time in all or any part of this Note on such terms and conditions as may be determined by the Purchaser in its sole and absolute discretion. Notwithstanding anything to the contrary herein or otherwise (other than as provided in Section 12.6 of the Securities Purchase Agreement), nothing contained in this Note or any other Investment Document shall confer upon the participant any rights in the Securities Purchase Agreement or any other Investment Document, and the Purchaser shall retain all rights with respect to the administration, waiver, amendment, collection and enforcement of, compliance with and consent to the terms and provisions of this Note, the Securities Purchase Agreement and any other Investment Document. In addition, the Purchaser may, without the consent of the participant, give or withhold its consent or agreement to any amendments to or modifications of this Note, the Securities Purchase Agreement or any other Investment Document, waive any of the provisions hereof or thereof or exercise or refrain from exercising any other rights or remedies which the Purchaser may have under this Note, the Securities Purchase Agreement, any other Investment Document or otherwise. Notwithstanding the foregoing, the Purchaser will not agree with the Company, without the prior written consent of the participant (which consent shall be given or affirmatively withheld not later than three (3) Business Days after the Purchaser's request therefor): (a) to reduce the principal of or rate of interest on this Note or (b) to postpone the date fixed for payment of principal of or interest on the Indebtedness evidenced by this Note. If the participant does not timely reply to the Purchaser's request for such consent, the participant shall be deemed to have consented to such agreement and the Purchaser may take -4- such action in such manner as the Purchaser determines in the exercise of its independent business judgment. 13. Assignment and Transfer. Subject to Applicable Law, the Holder may, at any time and from time to time and without the consent of the Company, assign or transfer to one or more Persons all or any portion of this Note or any portion thereof (but not less than $500,000 in principal amount in any single assignment (unless such lesser amount represents the entire outstanding principal balance hereof)). Upon surrender of this Note at the Company's principal executive office for registration of any such assignment or transfer, accompanied by a duly executed instrument of transfer, the Company shall, at its expense and within three (3) Business Days of such surrender, execute and deliver one or more new notes of like tenor in the requested principal denominations and in the name of the assignee or assignees and bearing the legends set forth on the face of this Note, and this Note shall promptly be canceled. Each assignment or transfer of this Note, in whole or in part, shall be registered on the register maintained by the Borrower pursuant to Section 11 immediately following the surrender of this Note. If the entire outstanding principal balance of this Note is not being assigned, the Borrower shall issue to the Holder hereof, within three (3) Business Days of the date of surrender hereof, a new note of like tenor which evidences the portion of such outstanding principal balance not being assigned. If this Note is divided into one or more Notes and is held at any time by more than one Holder, any payments of principal of, premium, if any, and interest or other amounts on this Note which are not sufficient to pay all interest or other amounts due thereunder, shall be made pro rata with respect to all such Notes in accordance with the outstanding principal amounts thereof, respectively. 14. Loss, Theft, Destruction or Mutilation of this Note. Upon receipt of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of an indemnity agreement or other indemnity reasonably satisfactory to the Borrower or, in the case of any such mutilation, upon surrender and cancellation of such mutilated Note, the Borrower shall make and deliver within three (3) Business Days a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. 15. Costs of Collection. The Borrower agrees to pay all costs and expenses, including the fees and expenses of all attorneys, accountants and other experts retained by the Holder, which are expended or incurred by or on behalf of the Holder in connection with (a) the collection and enforcement of this Note, whether or not any action, suit or other proceeding is commenced; (b) any actions for declaratory relief in any way related to this Note or the Indebtedness evidenced hereby; (c) the protection or preservation of any rights or remedies of the Holder under this Note; (d) the negotiation, preparation, execution and delivery of any amendment, waiver, consent or release relating to or under this Note; (e) any actions taken in reviewing the business or financial affairs of the Company or any of its Subsidiaries if any Event of Default has occurred or the Holder has determined in good faith that an Event of Default may likely occur, which actions include the following: (i) inspect the facilities of the Borrower or any of its Subsidiaries or conduct audits or appraisals of the financial condition of the Borrower and any of its Subsidiaries; (ii) have an accounting or other firm selected by the Holder review the books and records of the Borrower and any of its Subsidiaries and perform a thorough and complete examination thereof; (iii) interview -5- the Borrower's and each of its Subsidiaries' employees, attorneys, accountants, customers and any other Persons related to the Borrower or such Subsidiaries; and (iv) undertake any other action which the Holder believes is necessary to assess accurately the financial condition and prospects of the Borrower and any of its Subsidiaries; (f) any refinancing, restructuring (whether in the nature of a "work out" or otherwise), bankruptcy or insolvency proceeding involving the Borrower, any of its Subsidiaries or any other Affiliate of the Borrower securing the payment and performance of this Note; (g) any actions taken to verify, maintain, perfect and protect any Lien granted to the Holder; or (h) any effort by the Holder to protect, assemble, complete, collect, sell, liquidate or otherwise dispose of any Collateral, including in connection with any case under Bankruptcy Law. The Borrower hereby consents to the taking of the foregoing actions by the Holder (provided, however, that, with respect to clause (e)(iii) above, the Borrower will not be required to produce any document or disclose material to the Holder which would otherwise be expressly protected from production or disclosure by any attorney-client or accountant-client privilege existing under Applicable Law, unless waived by the Borrower). 16. Extension of Time. The Holder may, at its sole option, extend the time for payment of this Note, postpone the enforcement hereof, or grant any other indulgence without affecting or diminishing the Holder's right to full recourse against the Borrower hereunder, which right is expressly reserved. 17. Notations. Before disposing of this Note or any portion thereof, the Purchaser may make a notation thereon (or on a schedule attached thereto) of the amount of all principal payments previously made by the Company with respect thereto. 18. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES. 19. Construction and Interpretation. The rules of interpretation and construction specified in Sections 1.2 through 1.6 of the Securities Purchase Agreement shall likewise govern the interpretation and construction of this Note. 20. Entire Agreement; Successors and Assigns. This Note constitutes the entire understanding and agreement with respect to the subject matter hereof and supersedes all prior oral and written, and all contemporaneous oral, agreements and understandings with respect thereto. This Note shall inure to the benefit of, and be binding upon, the Company, the Holder and their respective successors and permitted assigns. 21. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER (BY ACCEPTANCE HEREOF) EACH HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING BASED UPON, ARISING -6- OUT OF OR IN ANY WAY RELATING TO (a) THIS NOTE, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT DOCUMENTS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED TO THIS NOTE, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT, OR (b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO THIS NOTE, THE SECURITIES PURCHASE AGREEMENT OR ANY OTHER INVESTMENT DOCUMENTS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER PROCEEDING; AND THE COMPANY AND THE HOLDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION, SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT EITHER THE COMPANY OR THE HOLDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER TO THE WAIVER OF ANY RIGHT IT OR THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY. [REST OF PAGE INTENTIONALLY LEFT BLANK] -7- IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized representatives on the date first above written. OVERHILL FARMS, INC., a Nevada corporation By: /s/ James Rudis --------------------------------------- James Rudis President and Chief Executive Officer By: /s/ John Steinbrun --------------------------------------- John Steinbrun Senior Vice President and Chief Financial Officer ACKNOWLEDGMENT AND CONSENT OF GUARANTOR The undersigned hereby acknowledges that it has read the foregoing Secured Senior Subordinated Bridge Note and consents to the terms thereof. The undersigned further acknowledges and agrees that the Secured Senior Subordinated Bridge Note constitutes a Guarantied Obligation and reaffirms its obligations under the Securities Purchase Agreement (including, without limitation, the Guaranty) and the other Investment Documents to which it is a party, all of which remains in full force and effect. GUARANTOR OVERHILL L.C. VENTURES, INC., a California corporation By: /s/ James Rudis --------------------------------------- James Rudis President and Chief Executive Officer By: /s/ Richard A. Horvath --------------------------------------- Richard A. Horvath Chief Financial Officer -8- EX-99.13 5 dex9913.txt AMENDMENT TO AMENDED & RESTATED SECURED SENIOR SUBORDINATED NOTE EXHIBIT 99.13 AMENDMENT TO AMENDED AND RESTATED SECURED SENIOR SUBORDINATED NOTE DUE 2004 THIS AMENDMENT TO AMENDED AND RESTATED SECURED SENIOR SUBORDINATED NOTE DUE 2004 is effective as of the 4th day of April, 2003 (this "Amendment"), by and between OVERHILL FARMS, INC., a Nevada corporation (the "Borrower" or the "Company"), and LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership (the "Purchaser" or, including the Purchaser and its assigns, the "Holder"). R E C I T A L S A. The Company, Overhill Ventures, as a Guarantor, and the Purchaser are parties to that certain Amended and Restated Securities Purchase Agreement dated as of October 29, 2002 (the "Amended and Restated Securities Purchase Agreement"), pursuant to which, among other things, on and as of the Effective Date, (i) the parties amended and restated the Original Securities Purchase Agreement, the Original Note, the Original Warrant and certain other Original Investment Documents and (ii) the Purchaser consented to the Spin-Off Related Matters, all on the terms and subject to the conditions set forth in the Amended and Restated Securities Purchase Agreement and the Investment Documents. B. In connection with the Spin-Off, the Company and the Purchaser amended and restated the Original Note as provided in that certain Amended and Restated Secured Senior Subordinated Note Due 2004 dated November 24, 1999, as amended and restated as of October 29, 2002 (the "Amended and Restated Note"). C. The Company, Overhill Ventures, as a Guarantor, and the Purchaser have entered into a First Amendment to Securities Purchase Agreement dated as of April 4, 2003 (the "First Amendment"), pursuant to which, among other things, on and as of the date hereof, the Purchaser is waiving the Specified Events of Default, the Company is issuing and selling to the Purchaser, and the Purchaser is purchasing from the Company, the Bridge Note and the parties are amending the Amended and Restated Securities Purchase Agreement (the Amended and Restated Securities Purchase Agreement, as amended by the First Amendment, is referred to herein as the "Securities Purchase Agreement") and certain other Investment Documents, all on the terms and subject to the conditions set forth in the First Amendment. Unless otherwise indicated, capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Securities Purchase Agreement or the Amended and Restated Note, as the case may be. D. In connection with the closing of the transactions contemplated by the First Amendment, the parties wish to amend the Amended and Restated Note as provided for herein. A G R E E M E N T NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, conditions and provisions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby amend the Amended and Restated Note as follows: 1. Amendment of Section 2 (Payment of Interest; Default Rate). Section 2 of the Amended and Restated Note is hereby amended by deleting such Section in its entirety and replacing it with the following: "2. Payment of Interest; Default Rate. So long as no Default or Event of Default shall have occurred and be continuing, the Borrower shall pay interest in cash on the unpaid principal balance of this Note at a rate per annum (the "Base Rate") equal to fifteen percent (15.0%). Interest shall be payable monthly in arrears on the last Business Day of each calendar month (or portion thereof) (each an "Interest Payment Date"). Interest shall be computed on the basis of the actual number of days elapsed over a 360-day year, including the first and the last day. If any Default or Event of Default shall have occurred and be continuing, then, in addition to the rights, powers and remedies available to the Holder under the Securities Purchase Agreement, this Note, the other Investment Documents and Applicable Law, the Borrower shall pay interest on the unpaid principal balance of, premium, if any, and accrued and unpaid interest on, and other amounts owing under, this Note at a rate per annum (the "Default Rate") equal to seventeen percent (17.0%) for the first sixty (60) days during which such Default or Event of Default shall remain uncured or unwaived and, thereafter, such rate shall increase by one percent (1.0%) per annum over the rate applicable to the thirty (30) days prior thereto for each additional thirty (30) days that such Default or Event of Default remains uncured or unwaived; provided, however, that the Default Rate shall not exceed twenty percent (20.0%). The Default Rate shall begin to accrue on the date on which such Default or Event of Default shall be deemed to have occurred (determined as provided in the last paragraph of Section 11.1 of the Securities Purchase Agreement) and shall continue until such Default or Event of Default shall have been cured or waived." 2. Full Force and Effect. This Amendment amends the Amended and Restated Note effective on and as of the First Amendment Effective Date, and the Amended and Restated Note, as amended by this Amendment, shall remain in full force and effect and is hereby ratified and affirmed by the Company in all respects. The execution, delivery and performance of this Amendment shall not operate as a waiver or limitation of or, except as expressly set forth herein, as an amendment to any right, power or remedy of the Purchaser under the Amended and Restated Note or any other Investment Document. -2- 3. Confirmation of Security. The Company hereby confirms that the security interests and liens granted by the Company under the Collateral Documents continue to constitute legal, valid, enforceable and perfected security interests in the Collateral, prior in right to all other Liens (other than the Liens in favor of the Senior Lender) and secure the due and punctual payment, performance and observance of all Secured Obligations (as defined in the Security Agreement (Company)), including, without limitation, the obligations of the Company under the Amended and Restated Note as amended hereby. 4. Entire Agreement; Successors and Assigns. This Amendment, together with the Amended and Restated Note, constitute the entire understanding and agreement with respect to the subject matter hereof and supersede all prior oral and written, and all contemporaneous oral, agreements and understandings with respect thereto. This Amendment shall inure to the benefit of, and be binding upon, the Company, the Holder and their respective successors and permitted assigns. 5. Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES REGARDING CHOICE OF LAW OR CONFLICTS OF LAWS. 6. Representations. The Company represents and warrants to the Purchaser that this Amendment has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. 7. Successors and Assigns. This Amendment shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns. 8. Counterparts. This Amendment may be executed in any number of counterparts and by facsimile, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 9. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER EACH HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO (a) THIS AMENDMENT, THE AMENDED AND RESTATED NOTE OR ANY OTHER INVESTMENT DOCUMENTS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED TO THIS AMENDMENT, THE AMENDED AND RESTATED NOTE OR ANY OTHER INVESTMENT DOCUMENTS, OR (b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO THIS AMENDMENT, THE AMENDED AND RESTATED NOTE OR ANY OTHER INVESTMENT DOCUMENTS, INCLUDING -3- ANY PRESENT OR FUTURE AMENDMENT THEREOF, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER PROCEEDING; AND THE COMPANY AND THE HOLDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION, SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT EITHER THE COMPANY OR THE HOLDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER TO THE WAIVER OF ANY RIGHT IT OR THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY. [REST OF PAGE INTENTIONALLY LEFT BLANK] -4- IN WITNESS WHEREOF, the Borrower has caused this Amendment to be executed and delivered by its duly authorized representatives as of the date first written above. BORROWER OR COMPANY OVERHILL FARMS, INC., a Nevada corporation By: /s/ James Rudis ------------------------------- James Rudis President and Chief Executive Officer By: /s/ John Steinbrun ------------------------------- John Steinbrun Senior Vice President and Chief Financial Officer AGREED TO AND ACCEPTED: LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership By: LLCP California Equity Partners II, L.P., a California limited partnership, its General Partner By: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Steven E. Hartman ------------------------------------- Steven E. Hartman Vice President -5- ACKNOWLEDGMENT AND CONSENT OF GUARANTOR The undersigned Guarantor hereby acknowledges that it has read the foregoing Amendment to Secured Senior Subordinated Note Due 2004 and consents to the terms thereof. The undersigned further acknowledges and agrees that the Amended and Restated Note, as amended by the foregoing Amendment, constitutes a Guarantied Obligation and reaffirms its obligations under the Securities Purchase Agreement (including, without limitation, the Guaranty) and the other Investment Documents to which it is a party, all of which remains in full force and effect. GUARANTOR OVERHILL L.C. VENTURES, INC., a California corporation By: /s/ James Rudis ----------------------------------- James Rudis President and Chief Executive Officer By: /s/ Richard A. Horvath ----------------------------------- Richard A. Horvath Chief Financial Officer -6- -----END PRIVACY-ENHANCED MESSAGE-----