EXHIBIT 10.44
[CONAGRA FOODS, INC. LETTERHEAD]
September 3, 2002
HMTF Rawhide, X.X.
Xxxxx, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Gentlemen:
Reference is made to that certain Agreement, as amended (the
"Agreement"), dated May 20, 2002, by and among HMTF Rawhide, L.P., a Delaware
limited partnership, ConAgra Foods, Inc., a Delaware corporation ("ConAgra"),
and Swift Foods Company (f/k/a S&C Holdco, Inc.), a Delaware corporation (the
"Company"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to them in the Agreement.
On June 30 and July 19, 2002, U.S. Beef Company announced the voluntary
recall of fresh and frozen beef products that may be contaminated with E. coli
O157:H7 (the "Recalls"). In connection with the Recalls, ConAgra hereby
acknowledges and agrees as follows:
1. ConAgra shall (a) be liable for and pay, or cause its applicable
insurance plans, policies (or similar arrangements) or carriers to be
responsible for and pay (subject to the terms of the applicable plan, policy or
arrangement), and (b) indemnify and hold harmless each of the Holdco Indemnified
Parties from and against, all Holdco Indemnified Costs which any Holdco
Indemnified Party may sustain, or to which any Holdco Indemnified Party may be
subjected, that are paid or payable to a third party (including, without
limitation, any Governmental Authority), relating to or arising, directly or
indirectly, out of any product liability claims or personal injury causes of
action arising from the consumption of the products subject to a Recall ("Recall
Products") or any fine that may be assessed by any Governmental Authority
attributable to a Recall.
2. ConAgra shall be responsible for all "Recall Costs". For purposes
hereof, "Recall Costs" shall mean the direct out of pocket costs and expenses
(including trade credits and other customer accommodations provided to
compensate customers for Recall Products) incurred or paid by any Holdco
Indemnified Party to effectuate the Recalls, including the direct
September 3, 2002
Page 2
out of pocket costs and expenses (including trade credits and other customer
accommodations provided to compensate customers for Recall Products) incurred or
paid by any Holdco Indemnified Party (a) to retrieve, withdraw, dispose,
destroy, redistribute and replace the Recall Products, net of any proceeds
received by any Holdco Indemnified Party from the disposition of the Recall
Products, (b) for any advertising, announcements or commercials necessary to
effect the Recalls, and (c) for any transportation utilized in the retrieval and
redistribution of the Recall Products. To the extent any portion of the Recall
Costs have not been paid by ConAgra or its Affiliates prior to the Closing Date,
the Preliminary Processing Company Closing Balance Sheet, the Audited Processing
Company Closing Balance Sheet and the Final Processing Closing Balance Sheet
shall each set forth a reserve or expense accrual, determined in accordance with
GAAP, in an amount equal to the estimated remaining Recall Costs (such reserve
or expense accrual as set forth in the Final Processing Closing Balance Sheet
referred to herein as the "Recall Reserve"). In the event the Recall Reserve
exceeds the actual Recall Costs incurred or paid by the Holdco Indemnified
Parties, the Company shall immediately pay or cause to be paid to ConAgra a
refund equal to the amount by which the Recall Reserve exceeds the actual Recall
Costs incurred or paid by the Holdco Indemnified Parties. In the event the
actual Recall Costs incurred or paid by the Holdco Indemnified Parties exceed
the Recall Reserve, ConAgra shall immediately reimburse the Company for the
amount by which the actual Recall Costs incurred or paid by the Holdco
Indemnified Parties exceed the Recall Reserve.
3. In addition, the parties acknowledge that the rights and obligations
of the parties arising under Section 9.3 of the Agreement shall be applicable to
the Recalls in accordance with the terms of such Section.
4. Notwithstanding any provision of this letter to the contrary, the
liabilities and obligations set forth in this letter shall, except as set forth
in the proviso below, (i) be subject to Sections 12.4.1, 12.4.2, 12.6, 12.7.6,
12.7.7, 12.10, 12.11, 12.12, 12.13 and 12.14 of the Agreement and (ii) not be
subject to any other provisions of Article 12 of the Agreement; provided that
Section 12.14 of the Agreement shall not be applicable to (x) ConAgra's
obligation under paragraph 1 of this letter with respect to amounts paid to
third parties for product liability claims or personal injury causes of action
and (y) any fine that may be assessed by any Governmental Authority against any
Holdco Indemnified Party that is attributable to a Recall.
The purpose of this letter is to supplement the Agreement with respect
to the Recalls and to evidence the parties' respective rights and obligations
with respect to the Recalls in order to facilitate the financing contemplated by
the Senior Credit Facilities and the Rule 144A offering of debt securities
contemplated by the Bridge Commitment Letter. The terms and provisions of this
letter are not intended to be, nor shall they be construed as evidence or an
interpretation of, or a restriction or expansion of, the parties' intentions and
understandings with respect to the parties' rights and obligations otherwise
arising under the terms of the Agreement arising out of product recalls or third
party product liability matters, other than the Recalls.
September 3, 2002
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Please indicate your acceptance to the terms and provisions of this
letter by executing and delivering a counterpart of this letter as provided
below.
CONAGRA FOODS, INC.
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, Executive
Vice President, Operations
Control and Development
SWIFT FOODS COMPANY
(f/k/a S&C Holdco, Inc.)
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, Executive
AGREED TO and ACCEPTED this 3rd day of September, 2002:
HMTF RAWHIDE, L.P.
By: HMTF RW, L.L.C., its General Partner
By: Xxxxx, Muse, Xxxx & Xxxxx Equity
Fund V, L.P., its sole member
By: HM5/GP LLC, its General Partner
By: /s/ XXXXXX XXXXXXX
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Xxxxxx Xxxxxxx, Vice President
