EXHIBIT 10.9
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into effective as of September 19, 2002, by and among Swift Foods
Company, a Delaware corporation (together with its successors, the "Company"),
Swift & Company, a Delaware corporation (together with its successors, "Swift
Meats"), Swift Pork Company, a Delaware corporation (together with its
successors, "Swift Pork"), Swift Beef Company, a Delaware corporation (together
with its successors, "Swift Beef"), S&C Australia Holdco Pty. Ltd., an
Australian corporation (together with its successors, "S&C Australia"),
Australia Meat Holdings Pty. Limited, an Australian corporation ("Australia
Meat"), S&C Holdco 2, Inc., a Delaware corporation ("S&C 2"), and S&C Holdco 3,
Inc., a Delaware corporation ("S&C 3," and together with the Company, Swift
Meats, Swift Pork, Swift Beef, S&C Australia, Australia Meat and S&C 2, the
"Clients"), and Xxxxx, Muse & Co. Partners, L.P., a Texas limited partnership
(together with its successors, "HMCo").
WHEREAS, pursuant to an Agreement, dated May 20, 2002, as amended (the
"Acquisition Agreement"), the Company, through its wholly-owned subsidiaries,
will acquire, own and operate the assets of the former United States and
Australian beef and pork processing businesses of ConAgra Foods, Inc. (the
"Acquisition");
WHEREAS, the Clients have requested that HMCo render, and HMCo has
rendered, financial advisory services to them in connection with the negotiation
and implementation of the Acquisition and the debt and equity financing
transactions and certain other transactions related thereto (collectively with
the Acquisition, the "Transaction"); and
WHEREAS, the Clients have requested that HMCo render financial
advisory, investment banking, and other similar services to them with respect to
future proposals for a tender offer, acquisition, sale, merger, exchange offer,
recapitalization, restructuring, refinancing, issuances of debt or equity
(whether in a private or a public offering) or other similar transaction
(including asset sales or acquisitions and purchases or sales of subsidiaries or
divisions directly or indirectly involving any Client or any of its subsidiaries
and any other person or entity, but excluding the Divestiture (as defined in
that certain Stockholders Agreement, dated as of September 19, 2002, by and
among HMTF Rawhide, L.P., ConAgra Foods, Inc., Hicks, Muse, Xxxx & Xxxxx
Incorporated and Swift Foods Company)) (collectively, "Subsequent
Transactions");
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo to the Clients, and to evidence the obligations of the Clients
to HMCo and the mutual covenants herein contained, the Clients hereby agree with
HMCo as follows:
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN SECTION 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT
HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR
THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY OTHER
INDEMNIFIED PERSON IDENTIFIED THEREIN.
1. Retention.
(a) The Clients hereby acknowledge that they have retained
HMCo, and HMCo acknowledges that it has acted, as financial advisor to the
Clients in connection with the Transaction.
(b) The Clients acknowledge that they have retained HMCo as
their exclusive financial advisor in connection with any Subsequent Transactions
that may be consummated during the term of this Agreement, and that each Client
will not retain any other person or entity to provide such services in
connection with any such Subsequent Transaction without the prior written
consent of HMCo. HMCo agrees that it shall provide such financial advisory,
investment banking and other similar services in connection with any such
Subsequent Transaction as may be requested from time to time by the board of
directors of any Client.
2. Term. The term of this Agreement shall continue until the earlier to
occur of (i)the tenth anniversary of the date hereof or (ii) the date on which
Hicks, Muse, Xxxx & Xxxxx Incorporated ("HMTF") or its successors and their
respective affiliates (including, without limitation, any equity fund sponsored
by HMTF or its successors) shall cease to own beneficially, directly or
indirectly, any securities of any Client or its respective successors.
3. Compensation.
(a) As compensation for HMCo's services as financial advisor
to the Clients in connection with the Transaction, the Clients hereby
irrevocably agree, jointly and severally, to pay to HMCo a cash fee equal to
$15,000,000, which will be payable at (and only if and when) the closing of the
Acquisition. The parties hereto agree that the compensation due pursuant to this
Section 3(a) shall be allocated among the segments of the financing for the
Transaction in proportion to the dollar amount of each such segment.
(b) In connection with any Subsequent Transaction consummated
during the term of this Agreement, the Clients hereby irrevocably agree, jointly
and severally, to pay to HMCo, at the closing of any such Subsequent
Transaction, a cash fee equal to 1.5% of the Transaction Value of such
Subsequent Transaction. As used herein, the term "Transaction Value" means the
total value of the Subsequent Transaction, including, without limitation, the
aggregate amount of the funds required to complete the Subsequent Transaction
(excluding any fees payable to this Section 3(b)), including, without
limitation, the amount of any indebtedness, equity or similar items issued,
assumed or remaining outstanding and the amount of any working capital items or
other assets retained by the seller in such Subsequent Transaction.
4. Reimbursement of Expenses. In addition to the compensation to be
paid pursuant to Section 3 hereof, the Clients hereby irrevocably agree, jointly
and severally, to reimburse HMCo, promptly following demand therefor, together
with invoices or reasonably detailed descriptions thereof, for all reasonable
disbursements and out-of-pocket expenses (including, without limitation, fees
and disbursements of counsel) incurred by HMCo (i) as financial advisor to the
Clients in connection with the Transaction or (ii) in connection with the
performance by it of the services contemplated by Section 1(b) hereof. In
addition to the amounts payable to HMCo pursuant to the preceding sentence, upon
consummation of the Transaction, the Clients hereby
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irrevocably agree, jointly and severally, to pay to HMCo $2,000,000 as a
nonaccountable expense reimbursement.
5. Indemnification. The Clients jointly and severally shall indemnify
and hold harmless each of HMCo, its affiliates and their respective directors,
officers, controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20(a) of the Securities Exchange
Act of 1934, as amended), if any, agents, independent contractors and employees
(HMCo, its affiliates and such other specified persons being collectively
referred to as "Indemnified Persons" and individually as an "Indemnified
Person") from and against any and all claims, liabilities, losses, damages and
expenses incurred by an Indemnified Person (including, without limitation, those
arising out of an Indemnified Person's negligence and reasonable fees and
disbursements of the respective Indemnified Person's counsel) that (A) are
related to or arise out of (i) actions taken or omitted to be taken (including,
without limitation, any untrue statements made or any statements omitted to be
made) by any of the Clients or (ii) actions taken or omitted to be taken by an
Indemnified Person with any Client's consent or in conformity with any Client's
instructions or any Client's actions or omissions or (B) are otherwise related
to or arise out of HMCo's engagement, and will reimburse each Indemnified Person
for all costs and expenses, including, without limitation, fees and
disbursements of any Indemnified Person's counsel, as they are incurred, in
connection with investigating, preparing for, defending or appealing any action,
formal or informal claim, investigation, inquiry or other proceeding, whether or
not in connection with pending or threatened litigation, caused by or arising
out of or in connection with HMCo's acting pursuant to HMCo's engagement,
whether or not any Indemnified Person is named as a party thereto and whether or
not any liability results therefrom. None of the Clients will, however, be
responsible for any claims, liabilities, losses, damages or expenses pursuant to
clause (B) of the preceding sentence that have resulted primarily from HMCo's
bad faith, gross negligence or willful misconduct. The Clients also agree that
neither HMCo nor any other Indemnified Person shall have any liability to any
Client for or in connection with such engagement except for any such liability
for claims, liabilities, losses, damages or expenses incurred by any Client that
have resulted primarily from HMCo's bad faith, gross negligence or willful
misconduct. The Clients agree that in no event will HMCo be liable for any
consequential, exemplary or punitive damages in connection with its performance
under this Agreement. Each Client further agrees that it will not, without the
prior written consent of HMCo, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of HMCo and each other Indemnified Person hereunder from
all liability arising out of such claim, action, suit or proceeding. EACH CLIENT
HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL
CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE
ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR
CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each Client hereby
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consents to personal jurisdiction and to service and venue in any court in which
any claim, which is subject to this Agreement, is brought against HMCo or any
other Indemnified Person.
It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagements may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagements.
Each of the Clients further understands and agrees that if HMCo is
asked to furnish any Client a financial opinion letter or act for any Client in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
6. Confidential Information. In connection with the performance of the
services hereunder, HMCo agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to HMCo without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.
7. Governing Law. This Agreement shall be construed, interpreted, and
enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof. Each of the parties hereby (a) irrevocably
submits to the exclusive jurisdiction of the United States Federal District
Court for the Northern District of Texas, sitting in Dallas County, Texas, the
United States of America, in the event such court has jurisdiction or, if such
court does not have jurisdiction, to any district court sitting in Dallas
County, Texas, the United States of America, for the purpose of any suit,
action, or proceeding arising out of or relating to this Agreement, including
any claims by any Indemnified Persons for indemnity pursuant to Section 5
hereof, (b) waives, and agrees not to assert in any such suit, action, or
proceeding, any claim that (i) it is not personally subject to the jurisdiction
of such court or of any other court to which proceedings in such court may be
appealed, (ii) such suit, action or proceeding is brought in an inconvenient
forum, or (iii) the venue of such suit, action, or proceeding is improper and
(c) expressly waives any requirement for the posting of a bond by the party
bringing such suit, action, or proceeding. Each of the parties consents to
process being served in any such suit, action, or proceeding by mailing,
certified mail, return receipt requested, a copy thereof to such party at the
address in effect for notices hereunder, and agrees that such services shall
constitute good and sufficient service of process and notice thereof. Nothing in
this Section 7 shall affect or limit any right to serve process in any other
manner permitted by law.
8. Assignment. This Agreement and all provisions contained herein shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations
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hereunder shall be assigned (other than with respect to the rights and
obligations of HMCo, which may be assigned to any one or more of its principals
or affiliates) by any of the parties without the prior written consent of the
other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.
10. Certain Waivers. No (a) direct or indirect holder of any equity
interests or securities of HMCo (whether such holder is a limited or general
partner, member, stockholder or otherwise), (b) affiliate of HMCo, or (c) any
direct or indirect director, officer, employee, partner, affiliate, member,
controlling person, representative, or agent of HMCo, any of HMCo's respective
affiliates or any such direct or indirect holder of any equity interests or
securities of HMCo (collectively, the "Party Affiliates") shall have any
liability or obligation of any nature whatsoever in connection with or under
this letter or the transactions contemplated hereby, and each party hereto
hereby waives and releases all claims against such Party Affiliates related to
any such liability or obligation.
11. Amendment and Waiver. Any provision of this Agreement may be
altered, supplemented, amended, or waived by the written consent of the Clients
and HMCo. No failure or delay by any party to this Agreement in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
12. Notices. All notices, requests and other communications to any
party to this Agreement shall be in writing (including telex, facsimile
transmission or similar writing) and shall be given to such party by messenger,
telex, or facsimile transmission (a) at its address, facsimile number or telex
number set forth on the signature pages hereof, or (b) such other address,
facsimile number or telex number as a party may hereafter specify for the
purpose by notice to each of the other parties. Each such notice, request or
other communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section 12 and the appropriate
answer back is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in or pursuant to this Section 12
and electronic confirmation of receipt is received, (iii) if given by messenger
or any other means, when delivered at the address specified in or pursuant to
this Section 12.
13. Section Headings. Headings contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provisions hereof.
14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
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15. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future law, and if
the rights or obligations of the parties under this Agreement shall not be
materially and adversely affected thereby (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom, and (d) in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as a
part of this Agreement a legal, valid, and enforceable provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible.
16. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to the
subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXX, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By: /s/ XXXXX X. XXXXXXX
-----------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Title: Vice President and Treasurer
-----------------------------
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
SWIFT FOODS COMPANY
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
SWIFT & COMPANY
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
SWIFT PORK COMPANY
By: /s/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
-----------------------------
Title: Vice President, Tax
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
SWIFT BEEF COMPANY
By: /s/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
-----------------------------
Title: Vice President, Tax
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
S&C AUSTRALIA HOLDCO PTY. LIMITED
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Attorney-in-Fact
-----------------------------
c/o Swift & Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
AUSTRALIA MEAT HOLDINGS PTY. LTD.
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Attorney-in-Fact
-----------------------------
c/o Swift & Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
S&C HOLDCO 2, INC.
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
S&C HOLDCO 3, INC.
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
-----------------------------
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: (000) 000-0000
