EXHIBIT 2.3
SECOND AMENDMENT TO ACQUISITION AGREEMENT ("Second Amendment") made and
entered into as of September 3, 2002, by and among ConAgra Foods, Inc., a
Delaware corporation ("ConAgra"), HMTF Rawhide, L.P., a Delaware limited
partnership ("Acquisition LP"), and Swift Foods Company, f/k/a S&C Holdco, Inc.,
a Delaware corporation ("Holdco").
RECITALS:
WHEREAS, the parties hereto are parties to the Agreement dated May 20,
2002, as amended by the First Amendment to Acquisition Documents dated July 3,
2002 (the "Acquisition Agreement");
WHEREAS, the parties desire to further amend the Acquisition Agreement
to provide for and reflect revised terms for financing certain consideration to
be provided pursuant to the Acquisition Agreement and certain other matters;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
Section 1. Senior Subordinated Notes.
(a) The Acquisition Agreement is hereby amended to reflect
that, on the Closing Date, ConAgra hereby agrees to purchase from U.S.
Acquisition Co. Senior Subordinated Notes (as defined in the Revised Senior Bank
Commitment Letter (as hereinafter defined)) in the principal amount of Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars ($150,000,000) at a purchase price
equal to the principal amount thereof and otherwise on the terms and in the
manner described in Annex A to the Revised Engagement Letter, the Revised Senior
Bank Commitment Letter and the Revised Fee Letter (each as hereinafter defined).
(b) At the Closing, Acquisition LP shall pay to ConAgra a fee
equal to 2.5% of the principal amount of the Senior Subordinated Notes upon
ConAgra's purchase of the Senior Subordinated Notes as contemplated by Section
1(a) above.
(c) To the extent the terms of the Acquisition Agreement are
inconsistent with the terms set forth in this Section 1, this Section 1 shall
control and the terms of the Acquisition Agreement shall be deemed amended
mutatis mutandis to reflect this Section 1.
Section 2. Issuance of Management Group Shares.
(a) The parties agree that, at or within 10 business days
after the Closing Date, Holdco shall issue up to four million shares (the actual
number of shares issued being referred to collectively as the "Management Group
Shares") of Holdco Common Stock to the Management Group (as hereinafter defined)
for One United States Dollar ($1.00) per share. ConAgra agrees that it shall
contribute to the capital of Holdco a number of shares of Holdco Common Stock
owned by ConAgra equal to the number of Management Group Shares. Holdco shall
pay to ConAgra in cash on the Closing Date (or such other date that the
Management Group Shares are issued) the aggregate proceeds received from the
issuance of the Management
Group Shares as part of the cash purchase price paid pursuant to Section
2.2.6(viii) of the Acquisition Agreement.
(b) "Management Group" shall mean any current member of
management of any Acquiring Company or Acquired Company that is designated by
Acquisition LP, in its sole discretion, to receive the Management Group Shares.
(c) ConAgra and Acquisition LP shall cause the appropriate
revisions to be made to the Stockholders Agreement attached as Exhibit
4.1.1(iii) to the Acquisition Agreement (the "Stockholders Agreement") to (i)
include the members of the Management Group as parties to the Stockholders
Agreement, (ii) provide tag-along rights with respect to the Management Group
Shares to the benefit of the Management Group, (iii) provide drag-along rights
with respect to the Management Group Shares to the benefit of Acquisition LP,
(iv) provide repurchase rights with respect to the Management Group Shares upon
the occurrence of certain events, (v) provide restrictions on the transfer of
the Management Group Shares, (vi) provide rights of first refusal with respect
to the Management Group Shares and (vii) provide such other terms and provisions
with respect to the Management Group and the Management Group Shares as may be
appropriate.
Section 3. Revised Senior Bank Commitment Letter. The Senior Bank
Commitment Letter and the Bridge Commitment Letter attached to the Acquisition
Agreement as Exhibit 8.5(a) shall be deleted in their entirety and replaced with
the amended and restated senior credit facilities commitment letter dated
September 3, 2002, from Citicorp North America, Inc., Xxxxxxx Xxxxx Xxxxxx Inc.,
JPMorgan Chase Bank and X.X. Xxxxxx Securities Inc. to Acquisition LP, a copy of
which is attached hereto as Annex A (the "Revised Senior Bank Commitment
Letter"). All references to the Senior Bank Commitment Letter in the Acquisition
Agreement shall be deemed to refer to the Revised Senior Bank Commitment Letter.
Section 4. Revised Engagement Letter. The Engagement Letter attached to
the Acquisition Agreement as Exhibit 8.5(b) shall be deleted in its entirety and
replaced with the revised engagement letter dated September 3, 2002, from
Xxxxxxx Xxxxx Barney Inc. and X.X. Xxxxxx Securities Inc. to Acquisition LP, a
copy of which is attached hereto as Annex B (the "Revised Engagement Letter").
All references to the Engagement Letter in the Acquisition Agreement shall be
deemed to refer to the Revised Engagement Letter.
Section 5. Revised Fee Letter. The Fee Letter referenced in the
Acquisition Agreement shall be deemed replaced in its entirety with the amended
and restated fee letter dated September 3, 2002, from Citicorp North America,
Inc., Xxxxxxx Xxxxx Barney Inc., JPMorgan Chase Bank and X.X. Xxxxxx Securities
Inc. to Acquisition LP, a copy of which is attached hereto as Annex C (the
"Revised Fee Letter"). All references to the Fee Letter in the Acquisition
Agreement shall be deemed to refer to the Revised Fee Letter.
Section 6. Termination Date. Section 11.1(b) of the Acquisition
Agreement is hereby amended and restated as follows:
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"(a) by either ConAgra, on the one hand, or Acquisition LP, on
the other hand, if the Closing shall not have occurred on or before September
30, 2002 (the "Termination Date")."
Section 7. ConAgra's Right to Terminate. Article 7 of the Acquisition
Agreement is hereby amended by adding a new Section 7.26 thereto, which shall
read as follows:
"Section 7.26. ConAgra's Right to Terminate. As of the date of
this Second Amendment, ConAgra does not have Knowledge of any breaches by
Acquisition LP that give ConAgra (with or without lapse of time or the giving of
notice or both) the right to terminate the Acquisition Agreement pursuant to
Section 11.1(e)."
Section 8. Acquisition LP's Right to Terminate. Article 8 of the
Acquisition Agreement is hereby amended by adding a new Section 8.7 thereto
which shall read as follows:
"Section 8.7. Acquisition LP's Right to Terminate. As of the
date of this Second Amendment, Acquisition LP does not have knowledge of any
breaches by ConAgra that give Acquisition LP (with or without lapse of time or
the giving of notice or both) the right to terminate the Acquisition Agreement
pursuant to Section 11.1.(d)."
Section 9. Definition of Transaction Documents. The term "Transaction
Documents" in the Acquisition Agreement shall be deemed to include, without
limitation, the tax sharing agreement in a form attached hereto as Annex D (the
"Tax Sharing Agreement") which shall be executed by the parties thereto at the
Closing.
Section 10. Bridge Commitment Letter. The Acquisition Agreement is
hereby amended such that all references to the "Bridge Commitment Letter," the
"Senior Bridge Facility" and the bridge financing contemplated by the Bridge
Commitment Letter contained in the Acquisition Agreement, as well as any and all
provisions that are related to or affected by the foregoing, are deleted in
their entirety.
Section 11. Definition of Facility. The Acquisition Agreement is hereby
amended such that all references to the term "Facilities" shall be revised to
read "Senior Secured Credit Facilities" (as such term is defined in the Revised
Senior Bank Commitment Letter).
Section 12. Conditions Precedent to Obligations. Section 10.1(e) of the
Acquisition Agreement is hereby amended and restated as follows:
"(e) Financing. As contemplated by Article 2, (x) U.S.
Acquisition Co. and Australia Acquisition Co. shall have received the proceeds
of the financings contemplated by the Revised Senior Bank Commitment Letter (or
other alternate financing, if any, obtained by Acquisition LP as contemplated by
Section 9.2.3(a)), (y) U.S. Acquisition Co. shall have consummated the Rule 144A
offering of the debt securities as contemplated by the Engagement Letter and (z)
ConAgra shall have purchased $150,000,000 of Senior Subordinated Notes as
contemplated by Section 1 of the Second Amendment to Acquisition Agreement by
and among the parties thereto."
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Section 13. Senior Notes; Senior Subordinated Notes.
(a) Section 2.2.6(iv) of the Acquisition Agreement is hereby
amended and restated as follows:
"(iv) The parties shall cause U.S. Acquisition Co. to
consummate the sale of senior notes in the amount of Two Hundred Fifty Million
United States Dollars ($250,000,000) as contemplated by the Engagement Letter
and to consummate the sale of the Senior Subordinated Notes to ConAgra in the
amount of Xxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars ($150,000,000) as
contemplated by Section 1 of the Second Amendment to Acquisition Agreement by
and among the parties thereto;"
(b) Clause (x) of Section 9.2.3(a) of the Acquisition
Agreement is hereby amended and restated as follows:
"(x) U.S. Acquisition Co. to consummate by the Termination
Date (i) the senior secured financing contemplated by the Revised Senior Bank
Commitment Letter, (ii) the sale of senior notes in an aggregate principal
amount of Two Hundred Fifty Million United States Dollars ($250,000,000), and
(iii) the purchase by ConAgra of $150,000,000 of Senior Subordinated Notes as
contemplated by Section 1 of the Second Amendment to Acquisition Agreement by
and among the parties thereto and"
(c) The first sentence of Section 9.2.3(b) of the Acquisition
Agreement is hereby amended and restated as follows:
"If Acquisition LP requests, ConAgra shall reasonably
cooperate, shall cause Holdco and each Acquired Company to reasonably cooperate,
and shall instruct its independent accountants to reasonably cooperate, at any
time prior to the Closing, and after the Closing, with respect to (i) the senior
secured financing contemplated by the Revised Senior Bank Commitment Letter,
(ii) the sale of senior notes as contemplated by the Engagement Letter in an
aggregate principal amount of Two Hundred Fifty Million United States Dollars
($250,000,000), (iii) the purchase by ConAgra of $150,000,000 of Senior
Subordinated Notes as contemplated by Section 1 of the Second Amendment to
Acquisition Agreement by and among the parties thereto, (iv) the Australian
financings contemplated by the Revised Senior Bank Commitment Letter, (v) any
registration statement filed following the Closing with respect to the
securities issued in connection with the consummation of the transactions
contemplated by the Acquisition Agreement, and (vi) any registration statement
filed following the Closing relating to a Registered Exchange Offer (as
described in the Senior Bank Commitment Letter) (including providing reasonable
assistance in the preparation of one or more offering circulars, private
placement memoranda, prospectuses, registration statements or other offering
documents or marketing materials relating to a debt financing or any other
filings that may be made with the U.S. Securities and Exchange Commission in
connection therewith)."
Section 14. Closing. Section 4.1 of the Acquisition Agreement is hereby
amended and restated as follows:
"4.1 Closing. Subject to the terms and conditions contained in
this Agreement, the closing of the transactions contemplated hereby (the
"Closing") will occur at the offices of
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Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
earlier of (i) the Termination Date, and (ii) the second business day after the
conditions set forth in Section 10 (other than those to be fulfilled at the
Closing) have been satisfied or at such other date and place as the parties
hereto may mutually agree (the date on which the Closing actually occurs being
referred to herein as the "Closing Date"). All actions contemplated to occur at
the Closing pursuant to this Agreement shall be mutually interdependent and,
notwithstanding any other provision of this Agreement, no such action shall
become effective or shall be deemed to have occurred unless all of the other
actions contemplated to occur at the Closing pursuant to this Agreement shall
also have occurred. The Closing shall be effective as of the time on the Closing
Date that all actions contemplated to occur at the Closing pursuant to this
Agreement have been completed (the "Effective Time")."
Section 15. Transition Services Agreement. ConAgra and Acquisition LP
shall cause the form of Transition Services Agreement attached as Exhibit
4.1.1(iv) to the Acquisition Agreement (the "Transition Services Agreement") to
be revised to provide that, notwithstanding the provisions of Section 14 thereof
and the agreement of ConAgra and Swift Foods Company ("Swift") that the
voluntary recalls announced on June 30, 2002 and July 19, 2002 of fresh and
frozen beef products that may be contaminated with E. coli O157:H7 do not
constitute an extraordinary or catastrophic event, for a term of six months from
the Closing Date, ConAgra shall allow Swift to elect at its option to
"piggyback" on its existing insurance policies relating to product recalls
("Product Recall Insurance"), subject to a $10 million deductible and subject to
the procurement of any consents from the insurers required under the underlying
Product Recall Insurance policies. ConAgra, Acquisition LP and Holdco hereby
agree to use their respective reasonable efforts to secure any such required
consents from the insurers. Swift hereby agrees to pay to ConAgra an amount
equal to One Million United States Dollars ($1,000,000) plus the amount of any
incremental costs incurred by ConAgra in providing such Product Recall Insurance
to Swift and its subsidiaries if it elects to "piggyback" on the Product Recall
Insurance for such six-month period.
Section 16. Stockholders Agreement. ConAgra and Acquisition LP shall
cause Section 2.4.6 of the Stockholders Agreement to be revised to provide that
(i) a new clause (a) shall be added to reflect that prior to the application of
the net proceeds of a partial or complete Divestiture (as defined in the
Stockholders Agreement) as provided in existing clauses (a) - (c) thereof,
Cattle Holdco or Cattleco, as applicable, shall be entitled to retain a portion
of such net proceeds equal to the estimated amount of the next quarterly or year
end tax payment, as applicable, due to Holdco or its designee under the Tax
Sharing Agreement for payment thereunder and (ii) that the first sentence of the
last paragraph of such section reads as follows:
"If the proceeds received by the Company or any of its
Subsidiaries pursuant to the Divestiture of all of the Cattle Feeding Operations
are not sufficient to fully repay the borrowings under the Cattle Line of Credit
and the Cattle Promissory Note, then the payment as provided above of all such
amounts, if any, actually received pursuant to the Divestiture, shall, except as
set forth below, serve to fully extinguish the obligations owed to CAGCO under
the Cattle Line of Credit and the Cattle Promissory Note and neither the Company
nor any Subsidiary thereof shall in any event be liable to CAGCO for the amount
of any shortfall; provided that, notwithstanding the foregoing and to the extent
that such net proceeds were not sufficient to actually repay all obligations
under the Cattle Line of Credit and the Cattle
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Promissory Note, any amounts thereafter payable by the Company or any of its
Subsidiaries to Swift Cattle Holdco, Inc., pursuant to the terms of the Tax
Sharing Agreement shall be paid to CAGCO, as designee of Swift Cattle Holdco,
Inc. and shall be deemed additional payments in respect of such obligations and
shall be deemed to have been applied in accordance with clauses (b) and (c)
above."
Section 17. Cattleco Loan Agreement. ConAgra and Acquisition LP shall
cause the form of the Cattleco Loan Agreement attached as Exhibit 2.2.3 to the
Acquisition Agreement (the "Cattleco Loan Agreement") to be revised to provide
that:
(a) the defined term "Acquisition Agreement" as set forth in
Recital A of the Cattleco Loan Agreement shall be amended to read as follows:
"the Agreement by and among Lender, S&C Holdco, Inc. and HMTF
Rawhide, L.P., dated as of May 20, 2002, as amended by the First Amendment to
Acquisition Documents dated as of July 3, 2002, as further amended by the Second
Amendment to Acquisition Agreement dated as of September 3, 2002 and as such may
be further amended, supplemented or otherwise modified from to time to time (the
"Acquisition Agreement"), . . .";
(b) a new sentence shall be added to the end of paragraph (1)
of Section 2(a) of the Cattleco Loan Agreement that reads as follows:
"Notwithstanding the foregoing, any payments made by Lender on
behalf of Borrowers pursuant to Section 5.9 of that certain Tax Sharing
Agreement of even date herewith by and among Swift Foods Company, Swift and
Company and Holdco (the "Tax Sharing Agreement") prior to the satisfaction or
extinguishment of the Obligations owed to Lender hereunder shall be deemed
additional advances under the Revolving Note as of the date such payment is
received thereunder;"
(c) the first sentence of Section 3(c) of the Cattleco Loan
Agreement shall be amended to read in its entirety as follows:
"Borrower shall promptly pay to Lender for application on the
Notes all proceeds of the Collateral (as hereinafter described), net of any
expenses incurred in connection with the disposition of such Collateral,
including any and all payments under Feeding Customer Loans (or from related
cattle serving as collateral under any such loans) and any rents, profits or
other payments pursuant to any lease or other use of Collateral (waiver of the
prohibition of Section 8(e) not to be hereby inferred)."; and
(d) a new clause (i) shall be added to Section 3(c) of the
Cattleco Loan Agreement that shall read in its entirety as follows:
"(i) first, to the extent such net proceeds are attributable
to a sale or other transfer of one or more Facilities, the Borrowers shall be
entitled to retain a portion of such net proceeds equal to the estimated amount
of the next quarterly or year end tax payment due, as applicable, to Swift Foods
Company or its designee under the Tax Sharing Agreement for payment thereunder;
and"
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and the existing clauses (i) and (ii) of Section 3(c) of the
Cattleco Loan Agreement shall be renumbered (ii) and (iii) respectively, and the
first word of each such clause shall be changed to "second" and "third"
respectively.
Section 18. Certain Payments Pursuant to the Acquisition Agreement.
ConAgra and Holdco hereby agree that the retention, change in control, stay-pay
or similar obligations payable by each pursuant to Section 6.13 of the
Acquisition Agreement shall be paid to their respective payees no later than the
ninth business day following the Closing Date.
Section 19. Cooperation by ConAgra. In connection with the consummation
of the Transactions (as defined in Exhibit A to the Revised Senior Bank
Commitment Letter (the "Revised Exhibit A")), ConAgra hereby agrees to (i)
execute and deliver at the closing of the Transactions, pursuant to Section 1 of
Exhibit D to the Revised Senior Bank Commitment Letter (the "Revised Exhibit
D"), the certificate referenced therein stating that, subject to the funding of
the Senior Secured Credit Facilities, ConAgra is prepared to consummate the
Transactions, (ii) make available at least one senior ConAgra representative to
respond to questions and inquiries from potential purchasers of the Senior Notes
(as defined in the Revised Senior Bank Commitment Letter) regarding ConAgra's
debt and equity investments made pursuant to the Transactions and its plans
relating thereto, and (iii) provide potential purchasers of the Senior Notes
access to senior management and the facilities of the Acquired Business as
reasonably requested by the Arrangers.
Section 20. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Acquisition Agreement.
Section 21. Acquisition Agreement Amendment Provision. This Second
Amendment is executed, delivered and made effective in accordance with Section
15.2 of the Acquisition Agreement.
Section 22. Effect on Acquisition Agreement. Except as specifically
amended hereby, all terms, provisions and conditions of the Acquisition
Agreement shall remain in full force and effect.
Section 23. Amendments. This Second Amendment shall not be amended
except in a writing signed by all the parties hereto.
Section 24. Counterparts. This Second Amendment may be executed and
delivered (including by facsimile transmission) in one or more counterparts,
each of which shall be regarded as an original and all of which shall constitute
one and the same instrument.
Section 25. Applicable Law. This Second Amendment and the legal
relations among the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and performed in Delaware.
Section 26. Consent to Jurisdiction. THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
DELAWARE STATE COURT SITTING IN WILMINGTON, DELAWARE IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO
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THIS SECOND AMENDMENT AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS]
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The undersigned parties have executed this Second Amendment as of the
date first set forth above.
CONAGRA FOODS, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------------------
Xxxxxx X. Xxxxxx,
Executive Vice President, Operations Control
and Development
HMTF RAWHIDE, L.P.
By: HMTF FW, L.L.C., its General Partner
By: Hicks, Muse, Xxxx & Xxxxx Equity
Fund V, L.P.,
its sole member
By: HM5/GP LLC, its General
Partner
By: /s/ XXXXXX XXXXXXX
--------------------------
Xxxxxx Xxxxxxx,
Vice President
SWIFT FOODS COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------------------------
Xxxxxx X. Xxxxxx, President