EXHIBIT 10.2
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement ("Agreement") is made and entered
into this 19th day of September, 2002, by and between ConAgra Foods, Inc., Inc.,
a Delaware corporation ("CAGCO"), ▇▇▇▇▇▇▇ Finance Company, Inc., a Colorado
corporation ("Cattleco"), and each of the other companies listed on the
signature pages hereto (the "Companies").
RECITALS:
(a) Pursuant to the Agreement (the "Definitive Agreement") dated
as of May 20, 2002, by and among S&C Holdco, Inc. (now known
as Swift Foods Company, "HOLDCO"), CAGCO and HMTF Rawhide,
L.P., as amended, CAGCO agreed to enter into, and HOLDCO
agreed to cause the Companies to enter into, a transition
services agreement pursuant to which (i) CAGCO shall provide
to the Companies certain transition services which have
heretofore been provided to the Companies by CAGCO, (ii) Swift
Beef Company (formerly known as ConAgra Beef Company,
"Beefco") shall provide to CAGCO certain transition services
which have heretofore been provided to CAGCO by Beefco, and
(iii) CAGCO shall provide to Cattleco certain transition
services that have heretofore been provided to Cattleco by
CAGCO.
(b) HOLDCO has requested that for a limited period of time CAGCO
continue to provide the services set forth on Schedule "A"
(the "CAGCO Services") to the Companies in a manner consistent
with the manner in which the CAGCO Services have heretofore
been provided by CAGCO to the Companies.
(c) CAGCO has requested that for a limited period of time Beefco
continue to provide the services set forth on Schedule "B"
(the "Beefco Services") to CAGCO in a manner consistent with
the manner in which the Beefco Services have heretofore been
provided by Beefco to CAGCO.
(d) HOLDCO and CAGCO have agreed that for a limited period of time
CAGCO shall provide the services set forth on Schedule "C"
(the "Cattleco Services" and together with the Beefco Services
and the CAGCO Services, the "Services") to Cattleco in a
manner consistent with the manner in which Cattleco Services
have heretofore been provided to Cattleco by CAGCO.
(e) CAGCO, Cattleco and the Companies are willing to enter into
this Agreement and to provide the Services upon the terms and
conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals which are
incorporated with and made a part of this Agreement, and in further
consideration of the mutual covenants and agreements herein contained, the
parties agree as follows:
1. CAGCO SERVICES. Upon the terms and subject to the conditions
contained herein, CAGCO agrees to provide the CAGCO Services
to the Companies in a manner consistent with the manner in
which the CAGCO Services have heretofore been provided by
CAGCO to the Companies. The Companies shall have the right to
terminate one or more of the CAGCO Services by giving at least
thirty (30) days prior written notice to CAGCO. Except for
those third parties historically retained by CAGCO with
respect to the Services, CAGCO agrees not to retain additional
third parties except where it does not have internal resources
that can provide the applicable Service on a commercially
reasonable basis.
2. BEEFCO SERVICES. Upon the terms and subject to the conditions
contained herein, Beefco agrees to provide the Beefco Services
to CAGCO in a manner consistent with the manner in which the
Beefco Services have heretofore been provided by Beefco to
CAGCO. CAGCO shall have the right to terminate one or more of
the Beefco Services by giving at least thirty (30) days prior
written notice to Beefco.
3. CATTLECO SERVICES. Upon the terms and subject to the
conditions contained herein, CAGCO agrees to provide the
Cattleco Services to Cattleco in a manner consistent with the
manner in which the Cattleco Services have heretofore been
provided by CAGCO to Cattleco. Cattleco shall have the right
to terminate one or more of the Cattleco Services by giving at
least thirty (30) days prior written notice to CAGCO.
4. CAGCO TERM. The CAGCO Services shall be provided by CAGCO for
a period of twelve (12) months following the date hereof, with
the exception of those CAGCO Services terminated pursuant to
Section 1 above and except as otherwise provided on Schedule
"A"; provided, however, that the Companies shall use all
commercially reasonable efforts to locate, as soon as
practicable after the date hereof, third-party services in
replacement of the CAGCO Services. The parties may agree to
extend any such time period by mutual written agreement.
5. BEEFCO TERM. The Beefco Services shall be provided by Beefco
for a period of twelve (12) months following the date hereof,
with the exception of those Beefco Services terminated
pursuant to Section 2 above; provided, however, that CAGCO
shall use all commercially reasonable efforts to locate, as
soon as practicable after the date hereof, third-party
services in replacement of the Beefco Services. The parties
may agree to extend such time period by mutual written
agreement.
6. CATTLECO TERM. The Cattleco Services shall be provided by
CAGCO for a period of twelve (12) months following the date
hereof, with the exception of those Cattleco Services
terminated pursuant to Section 3 above and except as otherwise
provided on Schedule "C"; provided, however, that Cattleco
shall use all commercially reasonable efforts to locate, as
soon as practicable after the date hereof, third-party
services in replacement of the Cattleco Services. The parties
may agree to extend such time period by mutual written
agreement.
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7. CONSIDERATION. As consideration for the performance of the
CAGCO Services hereunder, the Companies shall pay CAGCO the
amounts set forth on Schedule "A". In addition, the Companies
shall pay all sales, use or similar taxes payable with respect
to the performance of the CAGCO Services. As consideration for
the performance of the Beefco Services hereunder, CAGCO shall
pay Beefco the amounts set forth on Schedule "B". In addition,
CAGCO shall pay all sales, use or similar taxes payable with
respect to the performance of the Beefco Services. As
consideration for the performance of Cattleco Services
hereunder, Cattleco shall pay CAGCO the amounts set forth on
Schedule "C". In addition, Cattleco shall pay all sales, use
or similar taxes payable with respect to the performance of
the Cattleco Services. Each party shall invoice the other
applicable parties monthly for the respective Services
provided. Payment shall be made within five (5) days of
receipt of the invoice. If a payment amount is not received by
the applicable party by such date, then a late payment charge
equal to 1.5% per month shall be paid by the party from which
such payment was due on all amounts due but not received on or
before the due date by the party due such payment. If the
Companies, Cattleco or CAGCO terminate any of the services to
be provided prior to the expiration of the applicable term for
the provision of such services as set forth on Schedule "A",
Schedule "B" or Schedule "C", they will be responsible for
payment only for the services provided through the date of
such termination . Fees set forth on Schedule "A", Schedule
"B", and Schedule "C" are for CAGCO's fiscal year 2003 only.
To the extent any Services are provided during CAGCO's fiscal
year 2004, fees payable thereunder shall be based upon amounts
allocated to such services for other CAGCO divisions and
operating companies in CAGCO's fiscal year 2004 budget using
the same methodology used to derive the fees on Schedule "A"
through Schedule "D".
8. COOPERATION. Each of the parties hereto shall cooperate fully
with the other parties hereto by promptly providing any and
all information, personnel and equipment consistent with past
practice deemed necessary by the party performing the Services
for the performance of the Services and by accepting the
Services in a manner consistent with past practices.
9. LIMITATIONS ON SERVICES PROVIDED. CAGCO shall provide the
CAGCO Services to the Companies, Beefco shall provide the
Beefco Services to CAGCO and CAGCO shall provide the Cattleco
Services to Cattleco, in a manner consistent with past
practices. To the extent services are hereafter identified
that have been historically provided by CAGCO to the
Companies, by Beefco to CAGCO or by CAGCO to Cattleco but
which are not included in Schedules "A", "B" or "C", the
parties agree to negotiate in good faith for the provision of
such services and the compensation to be paid therefor, in
each case in a manner and on terms consistent with past
practices. It is understood and agreed by the Companies, CAGCO
and Cattleco that neither CAGCO nor Beefco assumes any
liability or responsibility whatsoever to the other parties
hereto other than to perform the Services in good faith. It is
further understood and agreed by the Companies, CAGCO and
Cattleco that, so long as CAGCO, on the one hand, and Beefco
on the other hand, performs its respective Services in good
faith, neither CAGCO
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nor Beefco shall be liable to the other parties hereto with
respect to such Services except by reason of acts of CAGCO, on
the one hand, and Beefco, on the other hand, consisting of
willful misconduct or gross negligence on CAGCO's or Beefco's
part, respectively. With respect to services of the employees
of the foreign sales offices of Beefco and CAGCO to be
provided the other party as provided in Schedule "A" and
Schedule "B", Beefco and CAGCO each agree that while such
employees are providing services for and in the name of Beefco
or CAGCO, as applicable, they shall be subject to the
supervision of such party, and that the party on whose behalf
and in whose name such services are being rendered shall be
responsible for the acts and omissions of such individuals and
that the employer of such individuals shall not have any
liability to any third party for the acts or omissions of such
individuals.
10. CONFIDENTIAL INFORMATION. Each party acknowledges that in
connection with this Agreement it may receive certain
confidential information ("Confidential Information"). The
receiving party shall not at any time disclose the
Confidential Information to any person, firm, partnership,
corporation or other entity (other than persons employed by
the receiving party and having a need to access the
Confidential Information) for any reason whatsoever, nor shall
the receiving party use the Confidential Information for its
benefit or for the benefit of any person, firm, partnership or
affiliates during the term of this Agreement and for a period
of two (2) years after the termination hereof unless required
by any governmental authority or in response to any valid
legal process. Each party shall take all actions necessary to
ensure that its employees and representatives having access to
the Confidential Information are bound by the terms of this
Agreement. Confidential Information shall not include
information which (i) was in the receiving party's possession
prior to disclosure (information is being transferred by such
party under the Definitive Agreement), (ii) is hereafter
independently developed by the receiving party, (iii) lawfully
comes into the possession of the receiving party, or (iv) is
now or subsequently becomes, through no act or failure to act
by the receiving party, publicly available. CAGCO and Beefco
each also acknowledges that data developed by it for another
party in connection with the performance of its obligations
hereunder shall be the property of such other party and that
such other party shall retain all right, title and interest to
such data.
11. INDEMNITY.
11.1 INDEMNITY BY THE COMPANIES. During the course of, and upon and
after termination of this Agreement for any reason whatsoever,
the Companies hereby, jointly and severally, agree to
indemnify and hold CAGCO harmless from and against any loss,
liability, damage or expense whatsoever (including court costs
and reasonable attorneys' fees) (collectively, "Costs")
incident to any claim, action or proceedings (each a "Claim")
against CAGCO which arise out of or relate to the performance
of the CAGCO Services, except acts of CAGCO constituting
willful misconduct, gross negligence or, except as provided in
Footnote 1 on Schedule "A" attached hereto, breaches or other
violations of contracts and agreements (or increases in fees
payable with respect to such
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contracts and agreements, including license fees, etc.) to
which CAGCO or any CAGCO subsidiary or affiliate is a party or
is bound that relate to the performance of any CAGCO Services.
In addition, Beefco agrees to indemnify CAGCO from and against
any Costs incident to any Claims from any third party that
such third party is entitled to receive any payment,
reimbursement or other amounts from CAGCO as a result of the
provision of the Beefco Services.
11.2 INDEMNITY BY CAGCO. During the course of, and upon and after
termination of this Agreement for any reason whatsoever,
except as provided in Footnote 1 on Schedule "A" attached
hereto, CAGCO hereby agrees to indemnify and hold Beefco
harmless from and against any Costs incident to any Claim
against Beefco which arise out of or relate to the performance
of the Beefco Services, except acts of Beefco constituting
willful misconduct, gross negligence or breaches or other
violations of contracts and agreements (or increases in fees
payable with respect to such contracts and agreements,
including license fees, etc.) to which Beefco or any Beefco
subsidiary is a party or is bound that relate to the
performance of any Beefco Services. In addition, CAGCO agrees
to indemnify the Companies and Holdco from and against any
Costs incident to any Claims from any third party that such
third party is entitled to receive any payment, reimbursement
or other amounts from any of the Companies or Holdco as a
result of the provision of the CAGCO Services or the Cattleco
Services.
11.3 INDEMNITY BY CATTLECO. During the course of, and upon and
after termination of this Agreement for any reason whatsoever,
except as provided in Footnote 1 of Schedule "A", Cattleco
hereby agrees to indemnify and hold CAGCO harmless from and
against any Costs incident to any Claim against CAGCO which
arise out of or relate to the performance of the Cattleco
Services, except acts of CAGCO constituting willful
misconduct, gross negligence or breaches or other violations
of contracts and agreements (or increases in fees payable with
respect to such contracts and agreements, including license
fees, etc.) to which CAGCO or any CAGCO subsidiary is a party
or is bound that relate to the performance of any Cattleco
Services.
12 MISCELLANEOUS.
12.1 NON-ASSIGNABILITY. None of the parties hereto shall assign its
rights or delegate its duties under this Agreement without the
prior written consent of the other parties hereto; provided,
however, that to the extent requested by Beefco's senior
lenders, the parties shall execute and deliver such documents
as may be necessary to effect a collateral assignment of the
rights arising hereunder, except rights with respect to
Cattleco Services to be provided to Cattleco by CAGCO. Any
attempted assignment or designation in contravention of this
provision shall be void. Subject to the foregoing, this
Agreement shall be binding on, and inure to the benefit of,
the parties and their respective affiliates, successors and
assigns. For purposes of this Agreement, an assignment shall
be deemed to occur upon a transfer of 50% or more of the
capital stock of the respective party entitled to vote
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for the election of directors, either directly or indirectly,
whether by merger, consolidation, stock transfer or otherwise.
12.2 GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of Delaware, irrespective of the choice-of-laws
principles of the State of Delaware.
12.3 THIRD PARTY BENEFICIARIES. Except as otherwise expressly
provided in this Agreement, the provisions of this Agreement
are for the benefit of the parties hereto and not for any
other person. This Agreement shall not provide any third
person with any remedy, claim, reimbursement, claim of action
or other right in excess of those existing without reference
to this Agreement.
12.4 NO PARTNERSHIP. Nothing contained in this Agreement shall be
deemed or construed to create a partnership or a joint venture
among the parties hereto, to cause CAGCO to be responsible in
any way for the debts or obligations of the Companies,
Cattleco or any other party, to cause the Companies to be
responsible for the debts or obligations of CAGCO or to cause
Holdco, Beefco or any other Company to be responsible in any
way for the debts or obligations of Cattleco. The parties
acknowledge that CAGCO and Beefco shall each be an independent
contractor in the performance of the Services.
12.5 NOTICES. All notices or other communications under this
Agreement shall be in writing and shall be deemed to be duly
given when delivered or mailed in accordance with provisions
of the Definitive Agreement.
12.6 SEVERABILITY AND INVALIDITY. Any provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining provisions of this Agreement or
affecting the validity or enforceability of any of the
provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
12.7 FORCE MAJEURE. CAGCO and Beefco shall be excused from their
individual obligations under this Agreement to the extent that
any delay or failure in the performance of such obligations
results from any cause beyond its reasonable control (and
without the fault of CAGCO or Beefco), including, without
limitation, performance by third parties, power failures,
computer equipment or system failures, acts of God, acts of
civil or military authority, embargoes, epidemics, war,
terrorism, riots, insurrections, fires, explosions,
earthquakes, floods, severe weather conditions or labor
problems.
12.8 CAPTIONS. The paragraph headings and captions contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning of interpretation of this
Agreement.
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12.9 AUTHORITY. Each party represents and warrants that the officer
executing this Agreement on its behalf is duly authorized to
so execute this Agreement, and this Agreement, when executed
and delivered by such party, shall constitute the valid and
binding agreement of such party, enforceable in accordance
with its terms.
12.10 AMENDMENTS. No provisions of this Agreement shall be deemed
waived, amended, supplemented or modified by either party,
unless such waiver, amendment, supplement or modification is
in writing and signed by the authorized representative of the
party against whom it is sought to enforce such waiver,
amendment, supplement or modification.
12.11 ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties with respect to the subject matter
hereof and supersedes all prior agreements, writings,
communications, negotiations, discussions and understandings
between the parties pertaining to the subject matter hereof.
12.12 AFFILIATES. Each of the Companies and Cattleco hereby
acknowledges that CAGCO provides similar services to itself
and its affiliates and subsidiaries and each of the Companies
and Cattleco hereby waives any conflict which may be created
thereby.
12.13 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which is to be deemed an original, and all of which
constitute, collectively, one agreement.
13. EMPLOYEE SEVERANCE. Each party hereto shall be responsible for
and pay any severance payments required to be paid to those of
its employees providing Services to any other party hereto,
and neither party shall change, amend, alter or adopt any
severance plan with respect to its employees providing
Services to the other without the prior consent of the other
party hereto, such consent not to be unreasonably withheld. In
addition, each party using the Services of the employees of
another shall not terminate or otherwise take any action which
would trigger such other party's severance obligations under
this Section 13.
14. INSURANCE MATTERS.
14.1 INSURANCE PROGRAMS. The Companies and Cattleco agree to use
their commercially reasonable efforts to implement as of the
date of this Agreement an insurance program consistent with
past practices. If, as a result of an extraordinary or
catastrophic event, insurance coverages are not available to
the Companies and Cattleco, then the Companies and Cattleco
will be allowed to participate in CAGCO's insurance program
for a period of time no greater than six (6) months from the
date of this Agreement. The Company and Cattleco shall
reimburse CAGCO its actual cost in providing such insurance
program to the Companies and Cattleco.
14.2 PRODUCT RECALL INSURANCE. Notwithstanding the agreement of
CAGCO and HOLDCO that the voluntary recalls announced on June
30, 2002 and July 19,
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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 (6)
months from the Closing Date, CAGCO shall allow HOLDO to elect
at its option to "piggyback" on CAGCO's existing insurance
policies relating to product recalls ("Product Recall
Insurance"), subject to a $10,000,000 deductible and subject
to the procurement of any consents from the insurers required
under the underlying Product Recall Insurance policies. HOLDCO
hereby agrees to pay to CAGCO an amount equal to US$1,000,000
plus the amount of any incremental costs incurred by CAGCO in
providing such Product Recall Insurance to HOLDCO and its
subsidiaries if it elects to "piggyback" on the Product Recall
Insurance for such six (6) month period.
15. BENEFIT PLANS. For sixty (60) days after the date of this
Agreement, the Companies and Cattleco shall have the right to
participate in CAGCO's benefit plans. The Companies and
Cattleco shall reimburse CAGCO the amount of CAGCO's actual
cost resulting from the Companies and Cattleco's participation
in CAGCO's benefit plans.
16. 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 THIS AGREEMENT 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 A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
CONAGRA FOODS, INC., SWIFT FOODS COMPANY,
a Delaware corporation a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------ --------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Executive Vice President, Operations Its: Vice President
Control and Development
S&C HOLDCO 2, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
S&C HOLDCO 3, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
SWIFT & COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
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SWIFT CATTLE HOLDCO, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
SWIFT BEEF COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
SWIFT PORK COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
KABUSHIKI KAISHA SAC JAPAN,
a Japanese stock corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Attorney-in-Fact
S&C AUSTRALIA HOLDCO PTY.
LIMITED, an Australian corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Attorney-in-Fact
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AUSTRALIA MEAT HOLDINGS PTY.
LIMITED, an Australian corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Attorney-in-Fact
BURCHER PTY. LIMITED, an Australian
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Attorney-in-Fact
SWIFT REFRIGERATED FOODS, S.A.
DE C.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Attorney-in-Fact
▇▇▇▇▇▇ BROS. CO., INC.,
a Utah corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
▇▇▇▇▇▇▇ FOOD DISTRIBUTION
COMPANY, a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
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▇▇▇▇▇▇▇ INTERNATIONAL SALES
CORP., a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
▇▇▇▇▇▇▇ FINANCE COMPANY, INC.,
a Colorado corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
▇▇▇▇▇▇▇, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Tax
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SCHEDULE "A"
All descriptions below include activities with respect to the listed services
related to Day 1, transition services, and cutover immediately preceding
termination of transition services.
FEE
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MIS - includes all services required to maintain systems needed to
support the Companies' operations consistent with past practices.
This includes all services governed by applicable service level
agreements (SLAs) currently existing between CAGCO and the
Companies.1
Network - services required to maintain systems connectivity $1,235,225(2)
intra- and inter-location. Examples of Network Services include:
Wide Area Network (WAN), E-Mail, Virtual Private Network (VPN),
Internet, Web Support, and Audio Bridge.
Operations & Systems - services required to support $ 198,092(2)
hardware/servers used by the Companies, including mainframe, et
al.
Customer Service - services required to support the user community $ 440,146(2)
(e.g., call center / help desk).
Enterprise Business Systems - services required to maintain $ 192,924(2)
software license agreements, and support for applications used by
the Companies. Examples include: Oracle (G/L and Fixed Assets),
Oracle databases, PeopleSoft, ▇▇▇▇▇▇, Lotus Notes, et al.
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(1) MIS Services shall be provided to the Companies for a period of 12 months.
On or before the nine (9) month anniversary of the date of this Agreement, the
Companies shall advise CAGCO of their progress in developing internal
capabilities or third party providers of the listed MIS Services. To the extent
one or more of the Companies do not reasonably expect to have developed such
capabilities or retained such third parties, the Companies shall be entitled to
extend the CAGCO term for the MIS Services for up to an additional six (6)
months from the twelve (12) month anniversary of the date hereof; provided,
however, and notwithstanding the provisions of Sections 11.1, 11.2 and 11.3 to
the extent any MIS Services are provided beyond the initial twelve (12) month
term, the Companies shall be responsible for and shall indemnify and hold CAGCO
harmless from any additional license fees, third party costs and/or any Costs
incident to any Claim incurred by CAGCO or the Companies in connection with
CAGCO providing such MIS Services.
(2) Stated fees are for a twelve (12) month period unless otherwise indicated.
Actual fees will be based upon actual usage using the rate schedules attached
hereto as Schedule D (with respect to the services listed thereon) or agreed
upon monthly allocations.
A-1
FEE
---
-----------------------------------------------------------------------------------
Data (Equipment, data lines, AGN, EDI) - services required to $1,324,428(2)
maintain data lines, associated equipment, and relevant contracts.
Microsoft Enterprise Agreement - services required to maintain the $ 362,701(2)
Microsoft Enterprise Agreement software license agreements, and
support for applications used by the Companies (including in
Australia).
Data Migration - support for separation and migration of data Pass
related to the Companies' operations including historical through of
accounting data and data developed while receiving Services under direct third-
this Agreement. Support includes design and testing of data party
conversion programs, support during cutover, and assistance costs
researching the Companies' questions regarding the data.
Projects Underway and Changes During the Transition Services Pass
Period - support for the Companies - at their option - for systems through of
implementations or modifications in progress (e.g., PeopleSoft direct third-
Human Resources Management Systems and Payroll, and Microsoft party
Exchange). This service includes providing proper notification and costs
obtaining appropriate consent from the Companies for any proposed
changes affecting projects underway and/or the Companies' data.
Knowledge Transfer - support for transfer of knowledge related to Pass
CAGCO-developed applications, tools, and processes, which are through of
required by the Companies to function as a stand alone operation. direct third-
party
costs
Accounts Receivable / Credit - activities and systems required to $1,078,677
support credit research, cash application, and customer file
maintenance.
Accounts Payable - activities and systems support for vendor $ 323,999
master maintenance, check disbursements (drawing on separate
bank accounts), and set-up of systems to enable outsourced
disbursement via a third party selected by the Companies.
-----------------------------------------------------------------------------------
A-2
FEE
---
-------------------------------------------------------------------------------------
Payroll / Benefits - activities and systems support for human Payroll - $561,834
resources maintenance, payroll and benefits processing. This Health & Welfare
includes all items covered under the current Human Resources - $706,392
Business Center FY 03 Operating Budget Allocation, dated January Retirement -
23, 2002. (Stated fees are for a twelve (12) month period. Actual $198,082
fees will be based upon actual usage or as otherwise agreed.) HRMS - $605,634
Market Research - includes all current services provided to Swift $ 50,000
Pork Company.
Risk Management - includes execution of trades and maintenance Pass through
of associated accounts necessary for hedging of the Companies of third-party
activities, including foreign currency exposure.(3) disbursements
and
expenses
Treasury/Cash Management No charge
o Provide support to transfer relevant bank accounts to
the Companies, including the perfecting of liens and the
separation of commingled accounts (i.e. separation of
Cattleco and the Companies transactions into distinct
accounts).
o Establish procedures and payment mechanisms to handle
financial transactions between Cattleco and Beefco.
Fixed Assets - activities and systems support for accounting for Pass through
fixed assets. of direct
third-party
costs
-------------------------------------------------------------------------------------
----------
(3) Such services shall be provided pursuant to automatically renewing twelve
(12) month terms, subject to not less than ninety (90) days written notice of
termination by either the Companies or CAGCO.
A-3
FEE
---
----------------------------------------------------------------------------------
Taxes - activities and systems support for state and federal Pass through
tax income taxes, sales and use taxes, property taxes, and of direct
other related processing and reporting.(4) third-party
costs
Long Distance and Cell Phone Usage Direct charge for
actual usage
Computer Purchases Direct charge for
actual usage
Brokerage - Signature Meats(5) $0.0125/lb of
product sold
Brokerage - CRPF(6) $0.10/lb of
product sold
Government Affairs $ 54,000
Leased Employees and Associated Overhead Costs ConAgra Direct costs
International (Far East) Limited in Hong Kong shall lease plus
three (3) employees providing services to the Companies. proportional
allocation of
fixed costs
ConAgra Integrated Logistics Group(7) $ 667,403
----------------------------------------------------------------------------------
----------
(4) Notwithstanding the foregoing, none of the tax-related support or activities
shall include return preparation. The parties' respective contractual
obligations in respect of return preparation shall be governed by Article 13 of
the Definitive Agreement. In the event of a conflict between the provisions of
this Agreement and Article 13 of the Definitive Agreement, the Definitive
Agreement shall control.
(5) Signature Meats brokerage services shall be provided pursuant to
automatically renewing twelve (12) month terms, subject to not less than ninety
(90) days written notice of termination by either the Companies or CAGCO.
(6) Applicable only to sale of Armour branded marinated pork products. The
parties agree to negotiate in good faith a market price for sales of other
products of the Companies through CRPF.
(7) Such services shall be provided pursuant to automatically renewing twelve
(12) month terms, subject to not less than ninety (90) days written notice of
termination by either the Companies or CAGCO.
A-4
FEE
---
----------------------------------------------------------------------------------
Strategic Sourcing Group(8) Pass through
of vendor
charges
Travel Agency Direct charge
for actual
usage
----------------------------------------------------------------------------------
----------
(8) Such services shall be provided pursuant to automatically renewing twelve
(12) month terms, subject to not less than ninety (90) days written notice of
termination by either the Companies or CAGCO.
A-5
SCHEDULE "B"
All descriptions below include activities with respect to the listed services
related to Day 1, transition services, and cutover immediately preceding
termination of transition services.
A. Services provided to Signature Meats:
FUNCTION FEE
-------- ---
Purchasing $ 17,897
Acct. Services 43,643
MIS 657,174
Safety 34,807
Benefits 31,915
Human Resources 138,847
Building and Grounds 241,672
----------
$1,165,995
B. Services provided to Corporate Insurance:
FUNCTION FEE
-------- ---
Building and Grounds $ 193,337
C. Foreign Sales Offices Services provided
to CAGCO.
FUNCTION FEE
-------- ---
ConAgra Japan K.K. in Japan shall lease seven (7) Direct costs plus
employees providing services to CAGCO. ▇▇▇▇▇▇▇ proportional
International Sales Corp. in Korea shall lease one allocation of
(1) employee providing services to CAGCO. fixed costs
D. Services provided to ConAgra Holdings (Australia)
Pty. Limited, ConAgra Wool Pty. Limited, ConAgra
Finance Company Pty. Limited, ConAgra Trade Group
Pty. Limited, CTG Australia Pty. Limited and
Cropmate Fertilizers Pty. Limited
B-1
FUNCTION
--------
Accounting, cash management and tax reporting No charge
B-2
SCHEDULE "C"
All descriptions below include activities with respect to the listed services
related to Day 1, transition services, and cutover immediately preceding
termination of transition services.
FEE(9)
--------------------------------------------------------------------------------
MIS - includes all services required to maintain systems needed
to support Cattleco's operations consistent with past practices.
This includes all services governed by applicable service level
agreements (SLAs) currently existing between CAGCO and Cattleco.
Network - services required to maintain systems connectivity $ 152,668
intra- and inter-location. Examples of Network Services include:
Wide Area Network (WAN), E-Mail, Virtual Private Network (VPN),
Internet, Web Support, and Audio Bridge.
Operations & Systems - services required to support $ 2,001
hardware/servers used by Cattleco, including mainframe, et al.
Customer Service - services required to support the user $ 28,094
community (e.g., call center / help desk).
Enterprise Business Systems - services required to maintain $ 1,949
software license agreements, and support for applications used by
Cattleco. Examples include: Oracle (G/L and Fixed Assets), Oracle
databases, PeopleSoft, ▇▇▇▇▇▇, Lotus Notes, et al.
Data (Equipment, data lines, AGN, EDI) - services required to $ 58,332
maintain data lines, associated equipment, and relevant
contracts.
Microsoft Enterprise Agreement - services required to maintain $ 23,151
the Microsoft Enterprise Agreement software license agreements,
and support for applications used by Cattleco.
--------------------------------------------------------------------------------
----------
(9) Stated fees are for a twelve (12) month period unless otherwise indicated.
Actual fees to be based upon actual period of usage.
C-1
-----------------------------------------------------------------------------------
Data Migration - support for separation and migration of data Pass
related to Cattleco's operations including historical accounting through of
data and data developed while receiving Services hereunder. direct third-
Support includes design and testing of data conversion programs, party
support during cutover, and assistance researching Cattleco's costs
questions regarding the data.
Projects Underway and Changes During the Transition Services Pass
Period - support for Cattleco - at their option - for systems through of
implementations or modifications in progress (e.g., PeopleSoft direct third-
Human Resources Management Systems and Payroll, and Microsoft party
Exchange). This service includes providing proper notification costs
and obtaining appropriate consent for any proposed changes
affecting projects underway and/or Cattleco's data.
o Knowledge Transfer - support for transfer of knowledge Pass
related to CAGCO-developed applications, tools, and through of
processes, which are required by Cattleco to function as a direct third-
standalone operation. party
costs
Accounts Receivable / Credit - activities and systems required No Charge
to support credit research, cash application, and customer file
maintenance.
Accounts Payable - activities and systems support for vendor $20,681
master maintenance, check disbursements (drawing on separate
bank accounts), and set-up of systems to enable outsourced
disbursement via a third party selected by Cattleco.
Payroll / Benefits - activities and systems support for human Payroll - $11,736
resources maintenance, payroll and benefits processing. This Health & Welfare
includes all items covered under the current Human Resources - $14,755
Business Center FY 03 Operating Budget Allocation, dated January Retirement -
23, 2002. (Actual fees will be based upon actual usage or as $4,138
otherwise agreed.) HRMS - $12,650
Fixed Assets - activities and systems support for accounting for Pass
fixed assets. through of
direct third-
party
costs
-----------------------------------------------------------------------------------
C-2
-----------------------------------------------------------------------------------
Taxes - activities and systems support for state and federal Pass
income taxes, sales and use taxes, property taxes, and other tax through of
related processing and reporting(10). direct third-
party
Long Distance and Cell Phone Usage costs
Computer Purchases Direct charge for
actual usage
Government Affairs
Direct charge for
actual usage
Packers and Stockyard Act - maintain PSA Bond (U.S.D.A. Bond No.
14-006-315) (and CAGCO guarantee or letters of credit required No charge
to support issuance thereof without securitization) through
April 13, 2003 Direct cost of PSA
Bond
-----------------------------------------------------------------------------------
----------
(10) Notwithstanding the foregoing, none of the tax-related support or
activities shall include return preparation. The parties' respective contractual
obligations in respect of return preparation shall be governed by Article 13 of
the Definitive Agreement. In the event of a conflict between the provisions of
this Agreement and Article 13 of the Definitive Agreement, the Definitive
Agreement shall control.
C-3
SCHEDULE "D"
WAN SERVICES
FY '03 RATES FOR MONTHLY CHARGES
PVC3
AND
PVC4
PVC PVC SIZE FY03
ACCESS $ COST PORT $ COST 1 $ COST 2 $ COST 32 $ BASE HA AND
CITY STATE SIZE ACCESS SIZE PORT SIZE PVC 1 SIZE PVC 2 COST COST SEVERITY SNIFFER
---- ----- ------ ------ ---- ------ ---- ------ ---- ------ ---- ---- -------- -------
Farmington MI $ -- $ -- $ -- $ -- $ 750.00 $ -- $ --
Hills
San Antonio TX 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Greeley CO 1544 $315.00 512 $ 599.13 256 $312.48 256 $312.48 $1,500.00 $ 100.00 $ --
San Antonio TX 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 620.00 $ -- $ --
Greeley CO 1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $2,500.00 $ 200.00 $1,075.00
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
$ -- $ -- $ -- $ -- $ -- $ -- $ --
Greeley CO 1544 $315.00 1544 $1,224.72 $ -- $ -- $ 2,500.00 $ 200.00 $1,075.00
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
1544 $315.00 1544 $1,224.72 512 $703.08 $ -- $ -- $ -- $ --
$ -- $ -- $ -- $ -- $ -- $ -- $ --
▇▇▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 620.00 $ -- $ --
Tequesta FL 56 $122.15 56 $ 68.67 32 $ 40.95 16 $ 22.05 $ 620.00 $ -- $ --
$81.90
LaSalle CO 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 620.00 $ -- $ --
Sanford FL 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Malta ID 56 $122.15 56 $ 68.67 32 $ 40.95 32 $ 40.95 $ 750.00 $ -- $ --
▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 1,500.00 $ 100.00 $ --
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 1,500.00 $ 100.00 $ --
▇▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Yuma CO 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Los Angeles CA 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 1,500.00 $ 100.00 $ --
D-1
Hyrum UT 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 1,500.00 $ 100.00 $ --
Denver CO 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Grand Island NE 1544 $315.00 512 $ 599.13 256 $312.48 256 $312.48 $ 1,500.00 $ 100.00 $ --
Greeley CO 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
Friona TX 1544 $315.00 256 $ 384.93 64 $68.67 128 $155.61 $ 1,500.00 $ 100.00 $ --
Greeley CO 1544 $315.00 1544 $1,224.72 512 $703.08 512 $703.08 $ 2,500.00 $ 200.00 $1,075.00
1544 $315.00 1544 $1,224.72 512 $703.08 512 $703.08 $ -- $ -- $ --
$ -- $ -- $ -- $ -- $ -- $ -- $ --
Chicago IL 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 620.00 $ -- $ --
▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 1,500.00 $ 100.00 $ --
Greeley CO 1544 $315.00 256 $ 384.93 128 $155.61 128 $155.61 $ 750.00 $ -- $ --
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ $315.00 128 $ 279.72 64 $ 68.67 64 $ 68.67 $ 620.00 $ -- $ --
Tokyo JAPAN 1544 $315.00 128 $ 279.72 64 $ 68.67 64 $ 68.67 $ 750.00 $ -- $ --
Monterey MEXICO 1544 $315.00 128 $ 279.72 64 $ 68.67 64 $ 68.67 $ 750.00 $ -- $ --
Cactus TX 1544 $315.00 512 $ 599.13 256 $312.48 256 $312.48 $ 1,500.00 $ 100.00 $ --
D-2
SCHEDULE "D" (CONTINUED)
NETWORKING SERVICES
CHARGEBACK FY 03 UNIT COST METRIC - FY03
1. EMAIL N/A
$5.00/MO MAILBOX <20MB
$7.00/MO MAILBOX 20MB - 75MB
$25.00/MO MAILBOX >75MB
$5.00/MO FAX - INBOUND
2. VPN $10/MO PER VPN USER
$77/MO OFFICE FEE
3. INTERNET $5.00/MO PER INTERNET USER
4. WEB SUPPORT $100/MO TIER 1 - PLATFORM ONLY
$500/MO TIER 2 - SIMPLE
$1000/MO TIER 3 - MEDIUM
$2000/MO TIER 4 - COMPLEX
20% NON STANDARD TECHNOLOGY FEE
$100/MO LOTUS NOTES APPLICATION HOSTING
5. AUDIO BRIDGE $ 2 PER PORT
OPERATIONS SERVICES
CHARGEBACK FY 03 UNIT COST METRIC - FY03
1. MAINFRAME $0.055 MIP - PRIME TIME
$0.025 MIP - NON PRIME TIME
2. UNIX N/A
OPEN SYSTEMS N/A
$43.78 UNIX BASIC - PER SPECINT/MO
$67.32 UNIX HIGH AVAIL - PER SPECINT/MO
$83.41 UNIX SUN E10K - PER SPECINT/MO
3. NT N/A
OPEN SYSTEMS N/A
$13.12 NT BASIC - PER SPECINT/MO
$20.35 NT HIGH AVAIL - PER SPECINT/MO
$36.43 NT CITRIX - PER SPECINT/MO
4. STORAGE $1.88 ENTERPRISE TAPE - GB/MO
$0.65 DEPARTMENTAL TAPE - GB/MO
N/A
$15.85 ENTERPRISE DISK - GB/MO
$6.96 DEPARTMENTAL DISK - GB/MO
$11.52 NETWORK ATTACHED STORAGE (NAS) - GB/MO
$9.24 BUSINESS CONTINUOUS VOLUME (BCV) - GB/MO
CUSTOMER SERVICES
CHARGEBACK FY 03 UNIT COST METRIC - FY03
1. HELPDESK N/A
$ 2.00 TIER 1 - PER CASE
$12.00 TIER 2 - PER CASE
$20.00 TIER 3 - PER CASE
