0000950130-01-503372.txt : 20011018
0000950130-01-503372.hdr.sgml : 20011018
ACCESSION NUMBER: 0000950130-01-503372
CONFORMED SUBMISSION TYPE: SC TO-T/A
PUBLIC DOCUMENT COUNT: 3
FILED AS OF DATE: 20010730
GROUP MEMBERS: LASSO ACQUISITION CORPORATION
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: TYSON FOODS INC
CENTRAL INDEX KEY: 0000100493
STANDARD INDUSTRIAL CLASSIFICATION: POULTRY SLAUGHTERING AND PROCESSING [2015]
IRS NUMBER: 710225165
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0927
FILING VALUES:
FORM TYPE: SC TO-T/A
BUSINESS ADDRESS:
STREET 1: 2210 W OAKLAWN DR
CITY: SPRINGDALE
STATE: AR
ZIP: 72762-6999
BUSINESS PHONE: 5012904000
MAIL ADDRESS:
STREET 1: P O BOX 2020
STREET 2: P O BOX 2020
CITY: SPRINGDALE
STATE: AR
ZIP: 72765-2020
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: IBP INC
CENTRAL INDEX KEY: 0000052477
STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011]
IRS NUMBER: 420838666
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1226
FILING VALUES:
FORM TYPE: SC TO-T/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-06183
FILM NUMBER: 1693154
BUSINESS ADDRESS:
STREET 1: 800 STEVENS PORT DR
CITY: DAKOTA DUNES
STATE: SD
ZIP: 57049
BUSINESS PHONE: 4024942061
MAIL ADDRESS:
STREET 1: 800 STEVENS PORT DRIVE
STREET 2: SUITE 832
CITY: DAKOTA DUNES
STATE: SD
ZIP: 57049
FORMER COMPANY:
FORMER CONFORMED NAME: IOWA BEEF PACKERS INC
DATE OF NAME CHANGE: 19701130
FORMER COMPANY:
FORMER CONFORMED NAME: IOWA BEEF PROCESSORS INC /PRED/
DATE OF NAME CHANGE: 19821109
SC TO-T/A
1
dsctota.txt
AMENDMENT NO.3 TO SCHEDULE TO
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement Pursuant to Section 14(d)(1) and 13(e)(1) of
the Securities Exchange Act of 1934
(AMENDMENT NO. 3)
IBP, INC.
(Name of Subject Company)
LASSO ACQUISITION CORPORATION
TYSON FOODS, INC.
(Name of Filing Persons-Offeror)
COMMON STOCK, PAR VALUE $0.05 PER SHARE
(Title of Class of Securities)
---------------
449223106
(Cusip Number of Class of Securities)
LES R. BALEDGE
TYSON FOODS, INC.
2210 West Oaklawn Drive
Springdale, Arkansas 72762-6999
Telephone: (501) 290-4000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copies to:
Mel M. Immergut
Lawrence Lederman
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
Telephone: (212) 530-5732
CALCULATION OF FILING FEE
Transaction valuation* Amount of filing fee
$1,579,978,050 $315,995.61
* Estimated for purposes of calculating the amount of the filing fee only.
The amount assumes the purchase of a total of 52,665,935 shares of the
outstanding common stock, par value $0.05 per share (the "Shares"), of IBP,
inc., a Delaware corporation (the "Company"), at a price per Share of $30.00 in
cash. Such number of Shares, together with the 574,200 Shares owned by Tyson
Foods, Inc., a Delaware corporation ("Tyson"), represents approximately 50.1% of
the 106,267,735 Shares outstanding as of June 29, 2001 (as disclosed by the
Company in its Solicitation/Recommendation Statement on Schedule 14D-9 filed
July 3, 2001.)
[X] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $315,995.61 Filing Party: Tyson Foods, Inc. (Offeror Parent)
and Lasso Acquisition Corporation
Form or Registration No.: Schedule TO Date Filed: December 12, 2000,
December 29, 2000,
January 2, 2001 and
July 3, 2001
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[_] issuer tender offer subject to Rule 13e-4.
[_] going-private transaction subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2.
[_] Check the following box if the filing is a final amendment reporting the
results of the tender offer.
AMENDMENT NO. 3 TO TENDER OFFER STATEMENT
This Amendment No. 3 to the Tender Offer Statement on Schedule TO (as
amended hereby, the "Schedule TO") relates to the offer by Lasso Acquisition
Corporation, a Delaware corporation ("Purchaser") and a wholly-owned subsidiary
of Tyson to purchase up to the number of Shares, which, together with the Shares
owned by Tyson, constitutes 50.1% of the outstanding Shares at $30.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated July 3, 2001 (as amended, the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with the
Offer to Purchase and any amendments or supplements thereto, collectively
constitute the "Offer"). Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Offer to Purchase. The item
numbers and responses thereto below are in accordance with the requirements of
Schedule TO.
The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York city time, on Friday, August 3, 2001, unless the Offer is
extended.
Except as amended below, the information set forth in the Offer to
Purchase and the related Letter of Transmittal is incorporated herein by
reference with respect to Items 1 through 11 of this Schedule TO.
Item 7. Source and Amount of Funds or Other Consideration
Section 11 of the Offer to Purchase is hereby amended and restated in
its entirety as follows:
"11. Source and Amount of Funds. We will need approximately $1.7
billion to purchase the number of Shares representing, together with Shares
owned by Tyson, 50.1% of the outstanding Shares pursuant to the Offer and to pay
related fees and expenses. In addition, we will need approximately $1.1 billion
to repay certain indebtedness of the Company. We intend to obtain such funds
from the following credit facilities, which will support aggregate borrowings of
up to $2.85 billion.
o On July 27, 2001 we entered into a commitment letter with The JPMorgan
Chase Manhattan Bank ("Chase"), J.P. Morgan Securities Inc.
("JPMorgan"), Merrill Lynch Capital Corporation ("MLCC"), SunTrust
Bank ("SunTrust") and SunTrust Capital Markets, Inc. with respect to a
senior unsecured bridge credit facility in an aggregate principal
amount of $2.5 billion (the "Bridge Facility"). The commitments will
expire and outstanding loans under the Bridge Facility will mature on
the date that is 180 days after the date of execution of definitive
documentation for the Bridge Facility. In addition to certain fees, we
will pay interest on borrowings under the Bridge Facility which will
vary based on the type of borrowing. The initial interest rate for
borrowings of Eurodollar loans under the Bridge Facility will be equal
to an adjusted LIBOR rate plus 1.10% per annum. The initial interest
rate for borrowings of base rate loans under the Bridge Facility will
be at an "Alternate Base Rate" (which is the higher of Chase's prime
rate or the federal funds effective rate plus 0.5%) plus 0.10%. The
interest rate on the Bridge Facility is subject to further adjustment
if the facility remains outstanding for more than 120 days or our
credit ratings change. The effectiveness of the Bridge Facility is
conditioned on the completion of the Offer, completion of definitive
documentation, effectiveness of the Receivables Facility Bridge
Facility (as defined below) and other customary conditions.
o On July 27, 2001 we entered into a commitment letter with Chase and
JPMorgan with respect to a senior unsecured receivables bridge credit
facility in an aggregate principal amount of $350 million (the
"Receivables Bridge Facility"). The commitment will expire and
outstanding loans will mature under the Receivables Bridge Facility on
the date that is 90 days after the date of execution of definitive
documentation for the Receivables Bridge Facility. In addition to
certain fees, we will pay interest on borrowings at the rates
described above for the Bridge Facility. The effectiveness of the
Receivables Bridge Facility is conditioned on the completion of the
Offer, completion of definitive documentation, effectiveness of the
Bridge Facility and other customary conditions.
If we are unable to consummate the foregoing financing arrangements, we will
seek alternative financing arrangements. Following the closing of the
transactions, Tyson will seek to refinance the Bridge Facility through the
issuance of up to $2.5 billion of senior unsecured notes of the Company and will
seek to refinance the Receivables Bridge Facility with an approximately $750
million asset backed receivables facility. However, the decision whether or not
to affect any refinancing and the timing and nature of such refinancing will
depend on a number of factors, including, market conditions, interest rates and
interest rate spreads and the availability of alternative financing.
In addition, on July 27, 2001 we entered into a commitment letter with
Chase, JPMorgan, MLCC, Merrill Lynch Bank USA and SunTrust with respect to a
364-day senior unsecured credit facility in an aggregate principal amount of
$500 million (the "364-Day Facility") and a five-year senior unsecured credit
facility in an aggregate principal amount of $500 million (the "Five-Year
Facility"). The proceeds from the 364-Day Facility and the Five-Year Facility
will be used to refinance our outstanding senior credit facility in the
aggregate principal amount of $1 billion, for working capital and, if necessary,
to complete the Merger, including the payment of certain fees and expenses
incurred in connection with the Offer and the Merger. The 364-Day Facility will
expire and the borrowings thereunder will mature on the date that is 364 days
after the date of the execution of definitive documentation for the facility.
The Five-Year Facility will expire and the borrowings thereunder will mature on
the fifth anniversary of the execution of definitive documentation for the
facility. In addition to certain fees, we will pay interest on borrowings under
the 364-Day Facility and the Five-Year Facility which will vary based on the
type of borrowing. The interest rate for Eurodollar loans will be equal to an
adjusted LIBOR rate plus a spread to be determined based upon our credit
ratings, which spread initially will be 0.850% per annum for the 364-Day
Facility and 0.825% per annum for the Five-Year Facility. The interest rate for
base rate loans will be the Alternate Base Rate plus a spread to be determined
based on our credit ratings."
The commitment letters with respect to the Bridge Facility and the
Receivables Bridge Facility are filed as Exhibits (b)(1) and (b)(2),
respectively, to this Schedule TO and incorporated herein by reference.
Item 12. Exhibits.
(a)(1) Offer to Purchase dated July 3, 2001 (also see Exhibit (a)(9) below).*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9) (also see
Exhibit (a)(10) below).*
(a)(3) Notice of Guaranteed Delivery (also see Exhibit (a)(11) below).*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (also see Exhibit (a)(12) below).*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (also see Exhibit (a)(13) below).*
(a)(6) Form of summary advertisement dated July 3, 2001.*
(a)(7) Joint Press Release issued by Tyson and the Company dated June 27,
2001.*
(a)(8) Joint Press Release issued by Tyson and the Company dated June 28,
2001.*
(a)(9) Offer to Purchase dated July 3, 2001 (as amended).*
(a)(10) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9) (as amended).*
(a)(11) Notice of Guaranteed Delivery (as amended).*
(a)(12) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (as amended).*
(a)(13) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (as amended).*
(a)(14) Press Release issued by Tyson dated July 5, 2001.*
(b)(1) Bridge Facility between Tyson, Chase, JPMorgan, MLCC, SunTrust and
SunTrust Capital Markets, Inc. with respect to a senior unsecured
bridge credit facility in an aggregate principal amount of $2.5
billion dated July 27, 2001.
(b)(2) Receivables Bridge Facility between Tyson, Chase and JPMorgan with
respect to a senior unsecured receivables bridge credit facility in an
aggregate principal amount of $350 million dated July 27, 2001.
(d)(1) Confidentiality Agreement between Tyson and the Company dated December
4, 2000 (incorporated by reference to Exhibit (d)(1) to the Schedule
TO of Purchaser and Tyson filed on December 12, 2000).*
(d)(2) Confidentiality Agreement between Tyson and the Company dated December
18, 2000 (incorporated by reference to Exhibit (d)(6) to Amendment No.
9 to the Schedule TO of Purchaser and Tyson filed on January 5,
2001).*
(d)(3) Agreement and Plan of Merger among the Company, Tyson and Purchaser
dated as of January 1, 2001 (incorporated by reference to Exhibit
(d)(4) to Amendment No. 9 to the Schedule TO of Purchaser and Tyson
filed on January 5, 2001).*
(d)(4) Voting Agreement by and between Tyson Limited Partnership and the
Company dated as of January 1, 2001 (incorporated by reference to
Exhibit (d)(5) to Amendment No. 9 to the Schedule TO of Purchaser and
Tyson filed on January 5, 2001).*
(d)(5) Stipulation and Order dated June 27, 2001, IBP, inc. v. Tyson Foods,
Inc., C.A. No. 18373, Court of Chancery of the State of Delaware.*
(d)(6) Letter of Tyson Limited Partnership dated June 27, 2001.*
* Previously filed.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
TYSON FOODS, INC.
/s/ Les R. Baledge
-----------------------------------
(Signature)
Les R. Baledge,
Executive Vice President
and General Counsel
-----------------------------------
(Name and Title)
July 30, 2001
-----------------------------------
(Date)
LASSO ACQUISITION CORPORATION
/s/ Les R. Baledge
-----------------------------------
(Signature)
Les R. Baledge,
Executive Vice President
-----------------------------------
(Name and Title)
July 30, 2001
-----------------------------------
(Date)
EXHIBIT INDEX
(a)(1) Offer to Purchase dated July 3, 2001 (also see Exhibit (a)(9) below).*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9) (also see
Exhibit (a)(10) below).*
(a)(3) Notice of Guaranteed Delivery (also see Exhibit (a)(11) below).*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (also see Exhibit (a)(12) below).*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (also see Exhibit (a)(13) below).*
(a)(6) Form of summary advertisement dated July 3, 2001.*
(a)(7) Joint Press Release issued by Tyson and the Company dated June 27,
2001.*
(a)(8) Joint Press Release issued by Tyson and the Company dated June 28,
2001.*
(a)(9) Offer to Purchase dated July 3, 2001 (as amended).*
(a)(10) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9) (as amended).*
(a)(11) Notice of Guaranteed Delivery (as amended).*
(a)(12) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees (as amended).*
(a)(13) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees (as amended).*
(a)(14) Press Release issued by Tyson dated July 5, 2001.*
(b)(1) Bridge Facility between Tyson, Chase, JPMorgan, MLCC,SunTrust and
SunTrust Capital Markets, Inc. with respect to a senior unsecured
bridge credit facility in an aggregate principal amount of $2.5
billion dated July 27, 2001.
(b)(2) Receivables Bridge Facility between Tyson, Chase and JPMorgan with
respect to a senior unsecured receivables bridge credit facility in an
aggregate principal amount of $350 million dated July 27, 2001.
(d)(1) Confidentiality Agreement between Tyson and the Company dated December
4, 2000 (incorporated by reference to Exhibit (d)(1) to the Schedule
TO of Purchaser and Tyson filed on December 12, 2000).*
(d)(2) Confidentiality Agreement between Tyson and the Company dated December
18, 2000 (incorporated by reference to Exhibit (d)(6) to Amendment No.
9 to the Schedule TO of Purchaser and Tyson filed on January 5,
2001).*
(d)(3) Agreement and Plan of Merger among the Company, Tyson and Purchaser
dated as of January 1, 2001 (incorporated by reference to Exhibit
(d)(4) to Amendment No. 9 to the Schedule TO of Purchaser and Tyson
filed on January 5, 2001).*
(d)(4) Voting Agreement by and between Tyson Limited Partnership and the
Company dated as of January 1, 2001 (incorporated by reference to
Exhibit (d)(5) to Amendment No. 9 to the Schedule TO of Purchaser and
Tyson filed on January 5, 2001).*
(d)(5) Stipulation and Order dated June 27, 2001, IBP, inc. v. Tyson Foods,
Inc., C.A. No. 18373, Court of Chancery of the State of Delaware.*
(d)(6) Letter of Tyson Limited Partnership dated June 27, 2001.*
* Previously filed.
EX-99.(B)(1)
3
dex99b1.txt
COMMITMENT LETTER
Exhibit (b)(1)
J.P. Morgan Securities Inc. Merrill Lynch Capital Corporation SunTrust Bank
The Chase Manhattan Bank 4 World Financial Center SunTrust Capital Markets, Inc.
270 Park Avenue North Tower 303 Peachtree Street
New York, NY 10017 New York, NY 10080 Atlanta, GA 30308
July 27, 2001
Tyson Foods, Inc.
2210 W. Oaklawn Dr.
Springdale, AR 72762-6999
Attention of Steven Hankins
Executive Vice President and Chief Financial Officer
Tyson Foods, Inc.
-----------------
$2,500,000,000 Senior Unsecured Bridge Facility
-----------------------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised The Chase Manhattan Bank ("Chase"), J.P.
Morgan Securities Inc. ("JPMorgan"), Merrill Lynch Capital Corporation ("MLCC"),
SunTrust Bank ("SunTrust") and SunTrust Capital Markets, Inc. ("SunTrust
Capital") that Tyson Foods, Inc. (the "Company") intends to acquire IBP, inc.
(the "Acquired Company") for an aggregate purchase price, together with the
assumption and refinancing of debt, of approximately $4,441,000,000, subject to
adjustment based on the market price of the Company's common stock, of which
approximately $1,576,100,000 will be the portion of the purchase price paid in
cash (the balance of the purchase price to be paid with shares of the Company's
common stock) and approximately $1,080,000,000 will be the cash amount required
to refinance outstanding debt of the Acquired Company. Such acquisition and the
related transactions, including the refinancing of debt of the Acquired Company,
are referred to herein as the "Acquisition". Chase, MLCC and SunTrust are
sometimes referred to herein as the "Initial Lenders"; JPMorgan, MLCC and
SunTrust Capital are sometimes referred to herein as the "Arrangers".
In connection with the foregoing, you have further advised the
Initial Lenders and the Arrangers that in order to obtain the funds required to
complete the Acquisition, to pay related fees and expenses and for general
corporate purposes, you will (i) amend, supplement or replace the Company's
outstanding senior unsecured credit facility in an aggregate principal amount of
$1,000,000,000 (the "Existing Credit Facility" and, as amended, supplemented or
replaced, the "New Credit Facility"), (ii) establish a senior unsecured bridge
credit facility in an aggregate principal amount of $2,500,000,000 (the "Bridge
Facility") and (iii) effect an accounts receivable
2
securitization in an aggregate principal amount of up to $750,000,000 (the
"Receivables Facility") or, if the Receivables Facility cannot be established by
the date on which shares are to be accepted in the Tender Offer (as defined in
the Term Sheet referred to below), establish a senior unsecured bridge credit
facility in an aggregate principal amount of $350,000,000 (the "Receivables
Bridge Facility"). You have further advised the Initial Lenders and the
Arrangers that, in connection with the Acquisition, you intend to issue and sell
senior unsecured notes of the Company (the "Senior Notes") in an aggregate
principal amount of up to $2,500,000,000 and, upon receipt of the proceeds of
the Senior Notes, to apply such proceeds to repay amounts borrowed under and to
terminate the Bridge Facility. It is contemplated that the terms of the Bridge
Facility will be substantially as set forth in the Summary of Principal Terms
and Conditions attached hereto as Exhibit A (the "Term Sheet").
In connection with the Acquisition, (a) Chase is pleased to
advise you of its commitment to provide $950,000,000 of the principal amount of
the Bridge Facility, (b) MLCC is pleased to advise you of its commitment to
provide $950,000,000 of the principal amount of the Bridge Facility, and (c)
SunTrust is pleased to advise you of its commitment to provide $600,000,000 of
the principal amount of the Bridge Facility, in each case on a several basis and
upon the terms and subject to the conditions set forth or referred to in this
commitment letter (this "Commitment Letter") and in the Term Sheet. You hereby
appoint JPMorgan and MLCC, and JPMorgan and MLCC hereby agree to act, as co-lead
arrangers and joint bookrunners (in such capacities, the "Co-Lead Arrangers")
for the Bridge Facility. You hereby appoint Chase, and Chase hereby agrees to
act, as sole administrative agent for the Bridge Facility. You hereby appoint
MLCC, and MLCC hereby agrees to act, as sole syndication agent for the Bridge
Facility. You hereby appoint SunTrust, and SunTrust hereby agrees to act, as
sole documentation agent for the Bridge Facility. You agree that no other
agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no person will receive compensation outside the terms contained
herein and in the Fee Letter referred to below, in connection with its agreement
to participate in the Bridge Facility unless you and we shall so agree.
While the Initial Lenders do not currently intend to broadly
syndicate the Bridge Facility, it is understood that each of the Initial Lenders
intends, prior to or after the execution of definitive documentation for the
Bridge Facility, to transfer portions of its commitment (and any outstanding
loans) hereunder on a pro rata basis to one or more other financial institutions
(the "Initial Syndication"). Furthermore, each of the Initial Lenders reserves
the right, prior to or after the execution of definitive documentation for the
Bridge Facility, to transfer portions of its commitment (and any outstanding
loans) hereunder to one or more additional financial institutions that will
become parties to such definitive documentation pursuant to a syndication to be
managed by JPMorgan and MLCC in consultation with the Company (the financial
institutions that will become parties to such definitive documentation being
collectively called the "Lenders"); provided that, unless the Co-Lead Arrangers
shall otherwise agree, no syndication of the Bridge Facility, other than the
Initial Syndication, shall occur until the New Credit Facility shall have been
successfully syndicated (as determined by Chase). Upon the acceptance of
commitments from other Lenders, the Initial Lenders will be released ratably
from corresponding amounts of their respective commitments with respect to the
Bridge Facility. You understand that JPMorgan and MLCC may, subject to the
proviso to the second sentence of this paragraph, syndicate the Bridge Facility
and, if JPMorgan and
3
MLCC notify you of their intent to syndicate the Bridge Facility, you agree
actively to assist JPMorgan and MLCC in completing a syndication reasonably
satisfactory to them. Such assistance shall include (a) your using commercially
reasonable efforts in connection with the syndication to facilitate contact
with, and to encourage participation in the Bridge Facility by, the financial
and investment banking institutions with which you have existing relationships,
(b) direct contact between senior management and advisors of the Company, the
Acquired Company, their respective subsidiaries and the proposed Lenders, (c)
assistance in the preparation of a Confidential Information Memorandum and other
marketing materials to be used in connection with the syndication and (d) the
hosting, with JPMorgan and MLCC, of one or more meetings of prospective Lenders.
JPMorgan and MLCC, in consultation with the Company, will
manage all aspects of any syndication, including decisions as to the selection
of institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, any naming
rights, the allocations of the commitments among the Lenders and the amount and
distribution of fees among the Lenders. To assist JPMorgan and MLCC in their
syndication efforts, you agree promptly upon request to prepare and provide to
JPMorgan and MLCC all information with respect to the Company, the Acquisition,
the Acquired Company and the other transactions contemplated hereby, including
all financial information and projections (the "Projections"), as they may
reasonably request in connection with the arrangement and syndication of the
Bridge Facility. It shall be a condition to the Initial Lenders' commitments
hereunder and their agreement to perform the services described herein that (a)
all information other than the Projections (the "Information") that has been or
will be made available to the Initial Lenders by you or the Acquired Company or
any of your representatives is or will be, when furnished, complete and correct
in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances under which such statements are made; and (b) the
Projections that have been or will be made available to the Initial Lenders by
you or the Acquired Company or any of your representatives have been or will be
prepared in good faith based upon reasonable assumptions. You understand that
JPMorgan and MLCC, and the Initial Lenders, in arranging and syndicating the
Bridge Facility and in making the commitments hereunder, will be using and
relying on the Information and Projections without independent verification
thereof.
As consideration for the commitments of the Initial Lenders
hereunder and JPMorgan's and MLCC's agreement to perform the services described
herein, you agree to pay to the Initial Lenders the fees set forth in the Term
Sheet and in the Fee Letter dated the date hereof and delivered herewith (the
"Fee Letter").
Each Initial Lender's commitment and obligation to perform the
services to be performed by it hereunder are further subject to (a) there not
occurring or becoming known to it any condition or change that has affected or
could reasonably be expected to affect materially and adversely the business,
assets, liabilities, financial condition or material agreements of the Company,
the Acquired Company and their subsidiaries, taken as a whole, (b) there not
having occurred a material disruption of or material adverse change in
financial, banking or capital (including, without limitation, debt) market
4
conditions that, in its good faith judgment, would reasonably be expected to
materially impair any syndication of the Bridge Facility, the Receivables
Facility, the Receivables Bridge Facility or the New Credit Facility or the
offering and sale of the Senior Notes, (c) its satisfaction that prior to and
during any syndication of the Bridge Facility or the New Credit Facility, there
shall be no competing offering, placement or arrangement of any debt securities
or syndicated bank financing by or on behalf of the Company, the Acquired
Company or any of their subsidiaries (other than an offering of the Senior
Notes, syndication of the Receivables Facility and/or the Receivables Bridge
Facility and the Company's commercial paper program) that would reasonably be
expected to affect the syndication in any material respect, (d) the accuracy and
completeness in all material respects of the representations of the Company
contained herein and the performance by the Company of all its obligations
hereunder, (e) the negotiation, execution and delivery of definitive
documentation with respect to the Bridge Facility mutually satisfactory to the
Initial Lenders and the Company, and (f) the other conditions referred to in the
Term Sheet. The terms and conditions of the Initial Lenders' commitments
hereunder and of the Bridge Facility are not limited to those set forth herein
and in the Term Sheet. Those matters that are not covered by the provisions
hereof and of the Term Sheet are subject to the approval and agreement of each
of the Initial Lenders and the Company.
You agree (a) to indemnify and hold harmless each of the
Initial Lenders, the Arrangers, their affiliates and each of their respective
officers, directors, employees, advisors and agents (each, an "indemnified
person") from and against any and all losses, claims, damages and liabilities to
which any such indemnified person may become subject arising out of or in
connection with this Commitment Letter, the Bridge Facility, the actual or
proposed use of the proceeds thereof, the Acquisition or any related transaction
or any claim, litigation, investigation or proceeding relating to any of the
foregoing, regardless of whether any indemnified person is a party thereto, and
to reimburse each indemnified person upon demand for any reasonable legal or
other expenses incurred in connection with investigating or defending any of the
foregoing; provided that the foregoing indemnity will not, as to any indemnified
person, apply to losses, claims, damages, liabilities or related expenses to the
extent they are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the willful misconduct or gross
negligence of such indemnified person, and (b) to reimburse the Initial Lenders,
the Arrangers and each of their affiliates on demand for all reasonable
out-of-pocket expenses (including reasonable due diligence expenses, reasonable
syndication expenses, if any, reasonable travel expenses and reasonable fees,
charges and disbursements of counsel) incurred in connection with the Bridge
Facility and any related documentation (including, without limitation, this
Commitment Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation). No indemnified person shall be liable for any damages arising
from the use by unintended recipients of Information or other materials obtained
through electronic, telecommunications or other information transmission systems
in the absence of gross negligence or wilful misconduct or for any special,
indirect, consequential or punitive damages in connection with the Bridge
Facility. It is understood that the posting of documents on IntraLinks, in
itself, and distribution of documents by email, facsimile or other customary
electronic means, in itself, will not be deemed to be gross negligence or wilful
misconduct under any circumstances.
5
You acknowledge that the Initial Lenders and the Arrangers may
be providing debt financing, equity capital or other services (including
financial advisory services) to other companies in respect of which you may have
conflicting interests regarding the transactions described herein and otherwise.
Each of the Initial Lenders and Arrangers agrees that it will not use
confidential information obtained from you by virtue of the transactions
contemplated by this Commitment Letter or its other relationships with you in
connection with the performance by it of services for other companies or furnish
any such confidential information to other companies. You also acknowledge that
none of the Initial Lenders or Arrangers has any obligation to use in connection
with the transactions contemplated by this Commitment Letter, or to furnish to
you, confidential information obtained by it from other companies.
This Commitment Letter and the Initial Lenders' commitments
hereunder shall not be assignable by you without the prior written consent of
each of the Initial Lenders (and any purported assignment without such consent
shall be null and void), are intended to be solely for the benefit of the
parties hereto and are not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may not be amended or waived except by an instrument in writing signed by
you and each of the Initial Lenders. This Commitment Letter may be executed in
any number of counterparts, each of which shall be an original, and all of
which, when taken together, shall constitute one agreement. Delivery of an
executed signature page of this Commitment Letter by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof. This
Commitment Letter shall be governed by, and construed in accordance with, the
laws of the State of New York. Any and all obligations of, and services to be
provided by, any Initial Lender or Arranger hereunder may be performed, and any
and all rights of any Initial Lender or Arranger hereunder may be exercised, by
or through their respective affiliates.
Any legal action or proceeding arising out of or related to
this Commitment Letter may be brought in the courts of the state of New York or
of the United States of America for the Southern District of New York, and by
execution and delivery of this Commitment Letter, the Company hereby consents,
for itself and in respect of its property, to the non-exclusive jurisdiction of
the aforesaid courts. The Company hereby irrevocably waives any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, which it may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Company or any document
related hereto. The parties hereto agree that a final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and binding
upon the parties and may be enforced in any other courts to whose jurisdiction
such parties are or may be subject, by suit upon judgment.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
COMMITMENT LETTER OR ANY OTHER RELATED DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
PARTIES HERETO. THIS
6
PROVISION IS A MATERIAL INDUCEMENT FOR THE INITIAL LENDERS AND THE ARRANGERS TO
ENTER INTO THIS COMMITMENT LETTER.
This Commitment Letter is delivered to you on the
understanding that none of this Commitment Letter, the Term Sheet or the Fee
Letter or any of their terms or substance shall be disclosed, directly or
indirectly, to any other person except (a) to your officers, agents and advisors
who are directly involved in the consideration of this matter and who have been
made aware of the disclosure limitations set forth herein or (b) as may be
compelled in a judicial or administrative proceeding or as otherwise required by
law (in which case you agree to inform us promptly thereof); provided that,
following your execution and delivery of this Commitment Letter and the Fee
Letter, you may disclose this Commitment Letter and the Term Sheet and their
terms and substance (but not the Fee Letter or its terms or substance).
The reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or the Initial Lenders' commitments hereunder; provided that the
reimbursement and indemnification provisions contained herein shall be
superseded by the corresponding provisions in the definitive financing
documentation.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to us executed counterparts hereof and of the Fee Letter not
later than 5:00 p.m., New York City time, on July 30, 2001, failing which each
of the Initial Lenders' commitments and Arrangers' agreements contained herein
will expire at such time. In the event that the execution and delivery of
definitive documentation relating to the Bridge Facility does not occur on or
before August 31, 2001 (or such later date as may be agreed to by each of the
Initial Lenders and you), then this Commitment Letter and the commitments
hereunder shall automatically terminate unless each of the Initial Lenders shall
in writing agree to an extension.
7
The Initial Lenders and the Arrangers are pleased to have been
given the opportunity to assist you in connection with this important financing.
Very truly yours,
J.P. MORGAN SECURITIES INC.
by
/s/ Marian N. Schulman
------------------------------
Name: Marian N. Schulman
Title: Vice President
THE CHASE MANHATTAN BANK,
by
/s/ Marian N. Schulman
------------------------------
Name: Marian N. Schulman
Title: Vice President
MERRILL LYNCH CAPITAL CORPORATION
by
/s/ Christopher K. Stout
------------------------------
Name: Christopher K. Stout
Title: Vice President
SUNTRUST BANK
by
/s/ Gregory L. Cannon
------------------------------
Name: Gregory L. Cannon
Title: Director
SUNTRUST CAPITAL MARKETS, INC.
by
/s/ Stephen A. McKenna
------------------------------
Name: Stephen A. McKenna
Title: Managing Director
Senior Risk Officer
8
Accepted and agreed to as of the date first written above by:
TYSON FOODS, INC.
by
/s/ Steve Hankins
----------------------------
Name: Steve Hankins
Title: Chief Financial Officer
EXHIBIT A
TYSON FOODS, INC.
$2,500,000,000 Senior Unsecured Bridge Facility
-----------------------------------------------
Summary of Principal Terms and Conditions
-----------------------------------------
BORROWER: Tyson Foods, Inc., a Delaware corporation (the "Company" or the
-------- "Borrower").
CO-LEAD ARRANGERS/ JOINT J.P. Morgan Securities Inc. ("JPMorgan") and Merrill Lynch Capital
-------------------------
BOOKRUNNERS: Corporation ("MLCC" and, collectively with JPMorgan, the "Co-Lead
----------- Arrangers").
ADMINISTRATIVE AGENT: The Chase Manhattan Bank ("Chase" or the "Administrative Agent").
---------------------
SYNDICATION AGENT: MLCC.
-----------------
DOCUMENTATION AGENT: SunTrust Bank ("SunTrust" and collectively with Chase and MLCC, the
------------------- "Agents").
ACQUISITION: The Company intends to acquire IBP, inc
----------- (the "Acquired Company") for an aggregate
purchase price, together with assumption of
debt, of approximately $4,441,000,000,
subject to adjustment based on the market
price of the Company's common stock, of
which approximately $1,576,100,000 will be
the portion of the purchase price paid in
cash (the balance of the purchase price to
be paid with shares of the Company's common
stock) and approximately $1,080,000,000 will
be the cash amount required to refinance
outstanding debt of the Acquired Company.
Such acquisition and the related
transactions, including the refinancing of
debt of the Acquired Company, are referred
to herein as the "Acquisition". In
connection with the Acquisition, the Company
intends to (i) amend, supplement or replace
the Company's outstanding senior unsecured
credit facility in an aggregate principal
amount of $1,000,000,000 (the "Existing
Credit Facility" and, as amended,
supplemented or replaced, the "New Credit
Facility"), (ii) establish a senior
unsecured bridge credit facility in an
aggregate principal amount of $2,500,000,000
(the "Bridge Facility") and (iii) effect an
accounts receivable securitization in an
aggregate principal amount of up to
$750,000,000 (the "Receivables Facility")
or, if the Receivables Facility cannot be
established by the date on
10
which shares are to be accepted in the
Tender Offer (as defined below), establish a
senior unsecured bridge credit facility in
an aggregate principal amount of
$350,000,000 (the "Receivables Bridge
Facility"). In addition, in connection with
the Acquisition, the Company intends to
issue and sell senior unsecured notes of the
Company (the "Senior Notes") in an aggregate
principal amount of up to $2,500,000,000
and, upon receipt of the proceeds of the
Senior Notes, to apply such proceeds to
repay amounts borrowed under and to
terminate the Bridge Facility.
FACILITY: A 180-day senior unsecured bridge credit
-------- facility in an aggregate
principal amount of $2,500,000,000 (the
"Bridge Facility").
AVAILABILITY: Up to the full amount of the commitments
------------ under the Bridge Facility may be borrowed,
repaid and reborrowed subject only to the
satisfaction of applicable conditions to
borrowing.
PURPOSE: The Bridge Facility will be used to finance
-------- the acquisition of the Acquired Company, to
refinance existing debt of the Acquired
Company, to pay related fees and expenses
and for general corporate purposes, either
directly or by providing liquidity in
connection with the Company's commercial
paper program.
COMMITMENT TERMINATION AND The commitments will expire and outstanding
--------------------------- loans will mature on the date that is 180
MATURITY: days after the date of the execution of
-------- definitive documentation for the Bridge
Facility (the "Closing Date").
MANDATORY COMMITMENT Commitments under the Bridge Facility
-------------------- will be reduced, and loans will be prepaid,
REDUCTIONS: in an amount equal to (i) the net cash
----------- proceeds of the sale of the Senior Notes,
(ii) a pro rata portion (based on the
aggregate commitments and outstanding loans
under the Receivables Bridge Facility and
the Bridge Facility) of the net cash
proceeds of the sale of debt or equity,
other than the Senior Notes, by the Company,
(iii) the amount of any increase in the
aggregate commitments available to the
Company under the New Credit Facility and
(iv) the amount of the aggregate commitments
in excess of $500,000,000 available to the
Company under the Receivables Facility.
GUARANTEE: The obligations under the Bridge Facility
--------- will be unconditionally guaranteed by the
Acquired Company and its subsidiaries that
are obligors on or guarantors of IBP
indebtedness (the "Guarantee");
provided, however, that in
-------- -------
11
the event and after the Company and/or the
Acquired Company terminate(s) the Agreement
and Plan of Merger between the Acquired
Company, the Company and Lasso Acquisition
Corporation dated as of January 1, 2001, as
modified by the Stipulation and Order in
respect of the parties dated June 27, 2001
(the "Merger Agreement"), in accordance with
its terms as in effect on the date hereof,
the Guarantee will be limited to an amount
equal to the pro rata portion (based on the
aggregate outstanding loans under the Bridge
Facility, the Receivables Bridge Facility
and the New Credit Facility) of
$1,250,000,000 (or such higher amount as
shall equal the indebtedness of IBP
refinanced in connection with the
Acquisition) represented by the outstanding
loans under the Bridge Facility. The Company
will agree that payments in respect of the
Guarantee will reduce the indebtedness of
the Acquired Company to the Company on a
dollar for dollar basis.
FEES AND INTEREST RATES: If (a) the Company's senior, unsecured,
----------------------- non-credit enhanced long-term debt shall be
rated at least BBB by Standard & Poor's
Ratings Group ("S&P") and at least Baa2 by
Moody's Investors Services, Inc. ("Moody's")
and (b) the Company's commercial paper shall
be rated at least A2 by S&P and at least P2
by Moody's, and none of the minimum ratings
referred to in this paragraph shall be under
review for possible downgrade and the
Company shall not have been placed on credit
watch with negative implications by either
such rating agency, fees and interest rates
will be as provided in Annex I hereto.
If the preceding paragraph shall not be
applicable but the Company's senior,
unsecured, non-credit enhanced long-term
debt shall be rated at least BBB- by S&P and
at least Baa3 by Moody's and neither of the
ratings referred to in this paragraph shall
be under review for possible downgrade and
the Company shall not have been placed on
credit watch with negative implications by
either such rating agency, fees and interest
rates will be as provided in Annex II
hereto.
CONDITIONS PRECEDENT TO The effectiveness of the Bridge Facility
------------------------ will be conditioned upon satisfaction of
EFFECTIVENESS: customary closing conditions, including,
------------- without limitation, execution and delivery
of definitive financing documentation with
respect to the Bridge Facility and the
Guarantee satisfactory to the Lenders;
delivery of satisfactory evidence of
authority; legal opinions; payment of fees
and expenses; delivery of the latest
available audited and interim financial
statements for each of the Company and the
Acquired Company (in each case as filed with
its
12
most recent Form 10-K Report) and pro forma
financial information; and the conditions
set forth below:
The tender offer provided for in the Merger
Agreement (the "Tender Offer") shall have
been completed in accordance with applicable
law and the terms of the Merger Agreement
(in the form heretofore delivered or
otherwise acceptable to the Initial Lenders)
and the other documentation related to the
Acquisition previously approved by the
Initial Lenders, without modification or
waiver of any material term or condition
thereof not approved by the Administrative
Agent, and the assets and liabilities of the
Acquired Company shall be consistent with
the pro forma financial information and
information on sources and uses of funds
heretofore delivered to the Initial Lenders.
After giving effect to the completion of the
Tender Offer and the other transactions
contemplated in connection therewith, the
Company and its subsidiaries (including the
Acquired Company and its subsidiaries) shall
have outstanding no indebtedness other than
(a) the Company's commercial paper program,
(b) the Senior Notes (in the event that the
Senior Notes are issued and sold prior to
the Closing Date), (c) indebtedness under or
permitted by the Existing Credit Facility or
the New Credit Facility, (d) any
indebtedness under the Receivables Facility
or the Receivables Bridge Facility and (e)
approximately $625,000,000 of indebtedness
of the Acquired Company existing on the date
hereof that will not be repaid in connection
with the Acquisition; provided that the
terms of such indebtedness will not be
violated by the transactions contemplated
hereby or prohibit the Acquired Company or
its subsidiaries from guaranteeing
indebtedness of the Company or paying
dividends to the Company (or such terms as
may be violated or shall contain such
prohibitions shall have been amended or
waived in a manner satisfactory in all
respects to the Initial Lenders).
All requisite governmental authorities and
third parties shall have approved or
consented to the Acquisition to the extent
such approvals or consents are required
under applicable laws or agreements or
otherwise, all applicable appeal periods
shall have expired and there shall be no
governmental or judicial action, actual or
threatened, that could reasonably be
expected to restrain, prevent or impose
materially burdensome conditions on the
Acquisition or the other transactions
contemplated hereby. There shall be no
litigation or administrative action that
could reasonably be expected to have a
material adverse effect on the business,
13
assets, liabilities or condition (financial
or otherwise) of the Company and its
subsidiaries, including the Acquired
Company, taken as a whole.
Any amendment, waiver or other modification
of any debt instruments of the Company or
the Acquired Company required in connection
with the Acquisition, the Bridge Facility,
the Receivables Facility or the transactions
contemplated hereby shall have become
effective and shall be satisfactory in all
respects to the Initial Lenders. To the
extent that the issuance and sale of the
Senior Notes has occurred, the commitments
shall have been reduced to the extent
provided above. The existing domestic bank
credit facility of the Acquired Company (the
"IBP Facility") shall have been terminated.
The Receivables Facility (or the Receivables
Bridge Facility) shall have become effective
and the terms thereof shall be satisfactory
to the Initial Lenders. The Existing Credit
Facility shall be in effect and the terms
thereof shall not be violated by the
transactions contemplated hereby. The
Company shall have entered into a commitment
letter for the New Credit Facility on terms
satisfactory to Chase MLCC and Merrill Lynch
Bank USA.
Prior to the satisfaction of the conditions
relating to the Acquisition, the commitments
may, at the request of the Company, become
effective to the extent required to permit
the issuance of commercial paper supported
by the Bridge Facility. The proceeds of
commercial paper issued prior to the
satisfaction of such conditions will be
deposited with the Administrative Agent and
will be available solely (i) to repay such
commercial paper as it matures, (ii) on and
after the effectiveness of the Guarantee, to
repay amounts outstanding under the IBP
Facility, and (iii) on and after the
satisfaction of the remaining conditions,
for any purpose contemplated under "Purpose"
above.
DOCUMENTATION: A credit agreement (the "Credit Agreement")
------------- consistent with this Summary of Terms and
Conditions and containing representations
and warranties, affirmative covenants,
negative covenants and events of default,
including provisions to ensure compliance
with applicable Federal Reserve margin
regulations and those specified below, as
the Initial Lenders may deem appropriate for
facilities of this type in light of the
ratings of the Company's senior, unsecured,
non-credit enhanced long-term debt by
Moody's and S&P. In the event that the terms
of the New Credit Facility are more
restrictive that those set forth in the
Credit
14
Agreement, the terms of the Credit Agreement
shall be deemed amended to incorporate such
more restrictive terms.
AFFIRMATIVE COVENANTS: To include, but not limited to, the
--------------------- following: compliance with laws;
use of proceeds; payment of obligations;
insurance; preservation of corporate
existence, rights and franchises; access;
keeping of books; maintenance of properties;
financial statements; reporting
requirements; notices regarding ERISA;
employee plans; environmental compliance and
notices; and also including:
The Company will agree to use its best
efforts to complete the Acquisition and
consummate the Merger as soon as practicable
and will agree not to amend or waive without
the approval of the Administrative Agent any
material term or condition of the Merger
Agreement or any other documentation related
to the Acquisition previously delivered to
the Initial Lenders.
The Company shall no later than October 1,
2001 use its best efforts to (a) issue and
sell pursuant to a private offering
$2,500,000,000 of debt securities, or such
lesser amount as shall be required to repay
the Bridge Facility in full, or (b) file
with the Securities and Exchange Commission
a shelf registration statement pursuant to
Rule 415 of the Securities Act or other
registration statement on Form S-3 in
respect of $2,500,000,000 of debt securities
and complete as promptly as practicable a
registered offering of $2,500,000,000 of
debt securities or such lesser amount as
shall be required to repay the Bridge
Facility in full.
NEGATIVE COVENANTS: To include, but not limited to, the
------------------ following: limitation on liens;
limitation on indebtedness including
priority debt; lease obligations; restricted
payments; mergers, consolidations and sales
of all or substantially all assets;
investments in other persons; asset sales;
change in nature of business; capital
structure; transactions with affiliates,
etc.; accounting changes; margin
regulations; compliance with ERISA; and
speculative transactions.
FINANCIAL COVENANTS: (A) A maximum ratio of Indebtedness for
------------------- Borrowed Money (to be defined and to include
in any event the Receivables Facility and
the Receivables Bridge Facility) to EBITDA
(to be defined initially as twelve months
pro forma combined EBITDA of the Company and
the Acquired Company and their consolidated
subsidiaries, with
15
carveouts for certain nonrecurring expenses
and charges to be agreed) of 5.25 to 1.00.
(B) A minimum ratio of EBITDA to interest
expense of 2.50 to 1.00 for each
four-fiscal-quarter period.
EXPENSES AND INDEMNIFICATION: All reasonable out-of-pocket expenses of
the Initial Lenders and the Arrangers
associated with (i) any syndication of the
Bridge Facility and (ii) the preparation,
execution, delivery, administration and
enforcement of the definitive credit
documentation therefor (including fees,
charges and disbursements of counsel for the
Administrative Agent) are to be paid by the
Company.
The Company will indemnify the Initial
Lenders, the Arrangers and the Lenders and
hold them harmless from and against all
costs, expenses (including without
limitation fees, charges and disbursements
of counsel) and liabilities resulting from
any litigation or other proceedings or
otherwise related to or arising out of the
transactions contemplated hereby, except to
the extent such costs, expenses and
liabilities are determined by a court of
competent jurisdiction by final and
nonappealable judgment to have resulted from
the wilful misconduct or gross negligence of
such indemnified person.
VOTING: Amendments and waivers of the definitive
------ credit documentation will require the
approval of Lenders holding more than 50% of
the aggregate amount of the loans and
commitments under the Bridge Facility,
except that the consent of each Lender
adversely affected thereby shall be required
with respect to, among other things, (i)
increases in commitments, (ii) reductions of
principal, interest or fees and (iii)
extensions of final maturity.
GOVERNING LAW: New York.
-------------
COUNSEL FOR ADMINISTRATIVE Cravath, Swaine & Moore.
---------------------------
AGENT:
16
ANNEX I
FACILITY FEES: Facility Fees of 0.125% per annum will
------------- accrue and be payable to the Lenders on the
aggregate amount of the Bridge Facility
(whether drawn or undrawn), commencing on
the Closing Date. Facility Fees will be
payable in arrears at the end of each
calendar quarter and at maturity or upon the
earlier termination of the commitments.
UTILIZATION FEES: Utilization Fees will accrue and be payable
---------------- to the Lenders on the amount of their
outstanding loans at a rate of 0.25% per
annum for each day on which such loans are
greater than 25% of the aggregate
commitments under the Bridge Facility.
Utilization Fees will be payable in arrears
at the end of each calendar quarter and upon
termination of the commitments under the
Bridge Facility.
All fees will be calculated on the basis of
a 360-day year and actual days elapsed.
INTEREST RATES: Interest will be payable on the Loans at the
-------------- following rates per annum:
(a) In the case of Eurodollar loans,
Adjusted LIBOR plus a spread of
0.875% per annum, increasing to
1.125% per annum in the event that
any commitment or loan remains
outstanding under the Bridge
Facility following the 120th day
after the Closing Date.
(b) In the case of ABR loans, the
Alternate Base Rate plus, in the
event that any commitment or loan
remains outstanding under the
Bridge Facility following the 120th
day after the Closing Date, a
spread of 0.125% per annum.
The default rate will be the applicable rate
plus 2%.
As used herein, (a) Adjusted LIBOR means the
London interbank offered rate, as set forth
on the applicable Telerate screen at the
time of determination, adjusted for
statutory reserves, and (b) Alternate Base
Rate, or ABR, means the higher of (i)
Chase's Prime Rate and (ii) the Federal
Funds Effective Rate plus 1/2 of 1%. Federal
Funds Effective Rate means, for any day, the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.
17
ANNEX II
FACILITY FEES: Facility Fees of 0.150% per annum will
accrue and be payable to the Lenders on the
aggregate amount of the Bridge Facility
(whether drawn or undrawn), commencing on
the Closing Date. Facility Fees will be
payable in arrears at the end of each
calendar quarter and at maturity or upon the
earlier termination of the commitments.
UTILIZATION FEES: Utilization Fees will accrue and be payable
---------------- to the Lenders on the amount of their
outstanding loans at a rate of 0.25% per
annum for each day on which such loans are
greater than 25% of the aggregate
commitments under the Bridge Facility.
Utilization Fees will be payable in arrears
at the end of each calendar quarter and upon
termination of the commitments under the
Bridge Facility.
All fees will be calculated on the basis of
a 360-day year and actual days elapsed.
INTEREST RATES: Interest will be payable on the Loans at the
-------------- following rates per annum:
(a) In the case of Eurodollar loans,
Adjusted LIBOR plus a spread of
1.10% per annum, increasing to
1.35% per annum in the event that
any commitment or loan remains
outstanding under the Bridge
Facility following the 120th day
after the Closing Date.
(b) In the case of ABR loans, the
Alternate Base Rate plus a spread
of 0.10% per annum, increasing to
0.35% per annum in the event that
any commitment or loan remains
outstanding under the Bridge
Facility following the 120th day
after the Closing Date.
The default rate will be the applicable rate
plus 2%.
As used herein, (a) Adjusted LIBOR means the
London interbank offered rate, as set forth
on the applicable Telerate screen at the
time of determination, adjusted for
statutory reserves, and (b) Alternate Base
Rate, or ABR, means the higher of (i)
Chase's Prime Rate and (ii) the Federal
Funds Effective Rate plus 1/2 of 1%. Federal
Funds Effective Rate means, for any day, the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.
EX-99.(B)(2)
4
dex99b2.txt
SUMMARY OF PRINCIPAL TERMS AND CONDITIONS
Exhibit (b)(2)
J.P. Morgan Securities Inc.
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
July 27, 2001
Tyson Foods, Inc.
2210 W. Oaklawn Dr.
Springdale, AR 72762-6999
Attention of Steven Hankins
Executive Vice President and Chief Financial Officer
Tyson Foods, Inc.
-----------------
$350,000,000 Senior Unsecured Receivables Bridge Facility
---------------------------------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised The Chase Manhattan Bank ("Chase") and J.P.
Morgan Securities Inc. ("JPMorgan") that Tyson Foods, Inc. (the "Company")
intends to acquire IBP, inc. (the "Acquired Company") for an aggregate purchase
price, together with the assumption and refinancing of debt, of approximately
$4,441,000,000, subject to adjustment based on the market price of the Company's
common stock, of which approximately $1,576,100,000 will be the portion of the
purchase price paid in cash (the balance of the purchase price to be paid with
shares of the Company's common stock) and approximately $1,080,000,000 will be
the cash amount required to refinance outstanding debt of the Acquired Company.
Such acquisition and the related transactions, including the refinancing of debt
of the Acquired Company, are referred to herein as the "Acquisition".
In connection with the foregoing, you have further advised
Chase and JPMorgan that in order to obtain the funds required to complete the
Acquisition, to pay related fees and expenses and for general corporate
purposes, you will (i) amend, supplement or replace the Company's outstanding
senior unsecured credit facility in an aggregate principal amount of
$1,000,000,000 (the "Existing Credit Facility" and, as amended, supplemented or
replaced, the "New Credit Facility"), (ii) establish a senior unsecured bridge
credit facility in an aggregate principal amount of $2,500,000,000 (the "Senior
Note Bridge Facility") and (iii) effect an accounts receivable securitization in
an aggregate principal amount of up to $750,000,000 (the "Receivables Facility")
or, if the
2
Receivables Facility cannot be established by the date on which shares are to be
accepted in the Tender Offer (as defined in the Term Sheet referred to below),
establish a senior unsecured bridge credit facility in an aggregate principal
amount of $350,000,000 (the "Receivables Bridge Facility"). You have also
advised Chase and JPMorgan that, in connection with the Acquisition, you intend
to issue and sell senior unsecured notes of the Company (the "Senior Notes") in
an aggregate principal amount of up to $2,500,000,000. You have further advised
Chase and JPMorgan that, in the event the Receivables Bridge Facility is
established, you intend to establish the Receivables Facility and, upon receipt
of the proceeds of the Receivables Facility, to apply such proceeds to repay
amounts borrowed under and to terminate the Receivables Bridge Facility. It is
contemplated that the terms of the Receivables Bridge Facility will be
substantially as set forth in the Summary of Principal Terms and Conditions
attached hereto as Exhibit A (the "Term Sheet").
In connection with the Acquisition, Chase is pleased to advise
you of its commitment to provide the entire principal amount of the Receivables
Bridge Facility, upon the terms and subject to the conditions set forth or
referred to in this Commitment Letter (this "Commitment Letter") and in the Term
Sheet. You hereby appoint JPMorgan, and JPMorgan hereby agrees to act, as sole
lead arranger and sole bookrunner for the Receivables Bridge Facility. You
hereby appoint Chase, and Chase hereby agrees to act, as sole administrative
agent for the Receivables Bridge Facility. You agree that no other agents,
co-agents or arrangers will be appointed, no other titles will be awarded and no
person will receive compensation outside the terms contained herein and in the
Fee Letter referred to below in connection with its agreement to participate in
the Receivables Bridge Facility unless you and we shall so agree.
While Chase does not currently intend to syndicate the
Receivables Bridge Facility, Chase reserves the right, prior to or after the
execution of definitive documentation for the Receivables Bridge Facility, to
transfer portions of its commitment (and any outstanding loans) hereunder to one
or more financial institutions that will become parties to such definitive
documentation pursuant to a syndication to be managed by JPMorgan in
consultation with the Company (the financial institutions that will become
parties to such definitive documentation being collectively called the
"Lenders"). Upon the acceptance of commitments from other Lenders, Chase will be
released from corresponding amounts of its commitment with respect to the
Receivables Bridge Facility. You understand that JPMorgan may syndicate the
Receivables Bridge Facility and, if JPMorgan notifies you of its intent to
syndicate the Receivables Bridge Facility, you agree actively to assist JPMorgan
in completing a syndication reasonably satisfactory to it. Such assistance shall
include (a) your using commercially reasonable efforts in connection with the
syndication to facilitate contact with, and to encourage participation in the
Receivables Bridge Facility by, the financial and investment banking
institutions with which you have existing relationships, (b) direct contact
between senior management and advisors of the Company, the Acquired Company,
their respective subsidiaries and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with JPMorgan, of one or more meetings of prospective Lenders.
3
JPMorgan, in consultation with the Company, will manage all
aspects of any syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, any naming
rights, the allocations of the commitments among the Lenders and the amount and
distribution of fees among the Lenders. To assist JPMorgan in its syndication
efforts, you agree promptly upon request to prepare and provide to JPMorgan all
information with respect to the Company, the Acquisition, the Acquired Company
and the other transactions contemplated hereby, including information with
respect to the pool of trade receivables to be included in the Receivables
Facility (the "Trade Receivables") and the obligors on, and statistical
information with respect to, the Trade Receivables and the all financial
information and projections (the "Projections"), as they may reasonably request
in connection with the arrangement and syndication of the Receivables Bridge
Facility. It shall be a condition to Chase's commitment hereunder and JPMorgan's
agreement to perform the services described herein that (a) all information
other than the Projections (the "Information") that has been or will be made
available to Chase by you or the Acquired Company or any of your representatives
is or will be, when furnished, complete and correct in all material respects and
does not or will not, when furnished, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made; and (b) the Projections that have been or will
be made available to Chase by you or the Acquired Company or any of your
representatives have been or will be prepared in good faith based upon
reasonable assumptions. You understand that JPMorgan and Chase, in arranging and
syndicating the Receivables Bridge Facility and in making the commitment
hereunder, will be using and relying on the Information and Projections without
independent verification thereof.
As consideration for Chase's commitment hereunder and
JPMorgan's agreement to perform the services described herein, you agree to pay
to Chase the fees set forth in the Term Sheet and in the Fee Letter dated the
date hereof and delivered herewith (the "Fee Letter").
Chase's commitment and obligation to perform the services to
be performed by it hereunder are further subject to (a) there not occurring or
becoming known to it any condition or change that has affected or could
reasonably be expected to affect materially and adversely the business, assets,
liabilities, financial condition or material agreements of the Company, the
Acquired Company and their subsidiaries, taken as a whole, (b) there not
occurring or becoming known to it any condition or change that has affected or
could reasonably be expected to affect adversely the value of any material
portion of the Trade Receivables or the collectibility thereof and that, in its
good faith judgment, would reasonably be expected to materially impair the
syndication of the Receivables Facility, (c) there not having occurred a
material disruption of or material adverse change in financial, banking or
capital (including, without limitation, debt) market conditions that, in its
good faith judgment, would reasonably be expected to materially impair any
syndication of the Receivables Bridge Facility, the Receivables Facility, the
Senior Note Bridge Facility or the New Credit Facility or the offering and sale
of the Senior Notes, (d) its satisfaction that prior to and during any
syndication of the Receivables Bridge Facility or the New Credit Facility there
shall be no competing offering, placement or arrangement of any debt securities
or syndicated bank financing by
4
or on behalf of the Company, the Acquired Company or any of their subsidiaries
(other than an offering of the Senior Notes, syndication of the Receivables
Facility, the Senior Note Bridge Facility and the New Credit Facility and the
Company's commercial paper program) that would reasonably be expected to affect
the syndication in any material respect, (e) the accuracy and completeness in
all material respects of the representations of the Company contained herein and
the performance by the Company of all its obligations hereunder, (f) the
negotiation, execution and delivery of definitive documentation with respect to
the Receivables Bridge Facility mutually satisfactory to Chase and the Company,
and (g) the other conditions referred to in the Term Sheet. The terms and
conditions of Chase's commitment hereunder and of the Receivables Bridge
Facility are not limited to those set forth herein and in the Term Sheet. Those
matters that are not covered by the provisions hereof and of the Term Sheet are
subject to the approval and agreement of Chase and the Company.
You agree (a) to indemnify and hold harmless each of Chase,
JPMorgan, their affiliates and each of their respective officers, directors,
employees, advisors and agents (each, an "indemnified person") from and against
any and all losses, claims, damages and liabilities to which any such
indemnified person may become subject arising out of or in connection with this
Commitment Letter, the Receivables Bridge Facility, the actual or proposed use
of the proceeds thereof, the Acquisition or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any indemnified person is a party thereto, and to
reimburse each indemnified person upon demand for any reasonable legal or other
expenses incurred in connection with investigating or defending any of the
foregoing; provided that the foregoing indemnity will not, as to any indemnified
person, apply to losses, claims, damages, liabilities or related expenses to the
extent they are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the willful misconduct or gross
negligence of such indemnified person, and (b) to reimburse Chase, JPMorgan and
each of their affiliates on demand for all reasonable out-of-pocket expenses
(including reasonable due diligence expenses, reasonable syndication expenses,
if any, reasonable travel expenses and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Receivables Bridge
Facility and any related documentation (including, without limitation, this
Commitment Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation). No indemnified person shall be liable for any damages arising
from the use by unintended recipients of Information or other materials obtained
through electronic, telecommunications or other information transmission systems
in the absence of gross negligence or wilful misconduct or for any special,
indirect, consequential or punitive damages in connection with the Receivables
Bridge Facility. It is understood that the posting of documents on IntraLinks,
in itself, and distribution of documents by email, facsimile or other customary
electronic means, in itself, will not be deemed to be gross negligence or wilful
misconduct under any circumstances.
You acknowledge that Chase and JPMorgan may be providing debt
financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you may have conflicting
interests regarding the transactions described herein and otherwise. Each of
Chase and JPMorgan agrees that it will not use confidential information obtained
from you by virtue of the transactions contemplated by this Commitment Letter or
its other relationships with you in connection
5
with the performance by it of services for other companies or furnish any such
confidential information to other companies. You also acknowledge that neither
Chase nor JPMorgan has any obligation to use in connection with the transactions
contemplated by this Commitment Letter, or to furnish to you, confidential
information obtained by it from other companies.
This Commitment Letter and Chase's commitment hereunder shall
not be assignable by you without the prior written consent of Chase (and any
purported assignment without such consent shall be null and void), are intended
to be solely for the benefit of the parties hereto and are not intended to
confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto. This Commitment Letter may not be amended or waived
except by an instrument in writing signed by you and Chase. This Commitment
Letter may be executed in any number of counterparts, each of which shall be an
original, and all of which, when taken together, shall constitute one agreement.
Delivery of an executed signature page of this Commitment Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Commitment Letter shall be governed by, and construed in accordance
with, the laws of the State of New York. Any and all obligations of, and
services to be provided by, Chase or JPMorgan hereunder may be performed, and
any and all rights of Chase and JPMorgan hereunder may be exercised, by or
through their respective affiliates.
Any legal action or proceeding arising out of or related to
this Commitment Letter may be brought in the courts of the state of New York or
of the United States of America for the Southern District of New York, and by
execution and delivery of this Commitment Letter, the Company hereby consents,
for itself and in respect of its property, to the non-exclusive jurisdiction of
the aforesaid courts. The Company hereby irrevocably waives any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, which it may now or hereafter have to the bringing of any action
or proceeding in such jurisdiction in respect of this Company or any document
related hereto. The parties hereto agree that a final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and binding
upon the parties and may be enforced in any other courts to whose jurisdiction
such parties are or may be subject, by suit upon judgment.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
COMMITMENT LETTER OR ANY OTHER RELATED DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
PARTIES HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR CHASE AND JPMORGAN
TO ENTER INTO THIS COMMITMENT LETTER.
This Commitment Letter is delivered to you on the
understanding that none of this Commitment Letter, the Term Sheet or the Fee
Letter or any of their terms or substance shall be disclosed, directly or
indirectly, to any other person except (a) to your officers, agents and advisors
who are directly involved in the consideration of this matter
6
and who have been made aware of the disclosure limitations set forth herein or
(b) as may be compelled in a judicial or administrative proceeding or as
otherwise required by law (in which case you agree to inform us promptly
thereof); provided that, following your execution and delivery of this
Commitment Letter and the Fee Letter, you may disclose this Commitment Letter
and the Term Sheet and their terms and substance (but not the Fee Letter or its
terms or substance).
The reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or Chase's commitment hereunder; provided that the reimbursement and
indemnification provisions contained herein shall be superseded by the
corresponding provisions in the definitive financing documentation.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the Fee
Letter by returning to us executed counterparts hereof and of the Fee Letter not
later than 5:00 p.m., New York City time, on July 30, 2001, failing which
Chase's commitment and JPMorgan's agreements contained herein will expire at
such time. In the event that the execution and delivery of definitive
documentation relating to the Receivables Bridge Facility does not occur on or
before August 31, 2001 (or such later date as may be agreed to by Chase and
you), then this Commitment Letter and the commitment hereunder shall
automatically terminate unless Chase shall in writing agree to an extension.
7
JPMorgan and Chase are pleased to have been given the
opportunity to assist you in connection with this important financing.
Very truly yours,
J.P. MORGAN SECURITIES INC.
by
/s/ Marian N. Schulman
-----------------------------------------
Name: Marian N. Schulman
Title: Vice President
THE CHASE MANHATTAN BANK,
by
/s/ Marian N. Schulman
-----------------------------------------
Name: Marian N. Schulman
Title: Vice President
Accepted and agreed to as of the date first written above by:
TYSON FOODS, INC.
by /s/ Steve Hankins
---------------------------
Name: Steve Hankins
Title: Chief Financial Officer
EXHIBIT A
TYSON FOODS, INC.
-----------------
$350,000,000 Senior Unsecured Receivables Bridge Facility
---------------------------------------------------------
Summary of Principal Terms and Conditions
-----------------------------------------
BORROWER: Tyson Foods, Inc., a Delaware corporation
-------- (the "Company" or the "Borrower").
SOLE LEAD ARRANGER/ SOLE J.P. Morgan Securities Inc. ("JPMorgan").
-------------------------
BOOKRUNNER:
ADMINISTRATIVE AGENT: The Chase Manhattan Bank ("Chase" or the
--------------------- "Administrative Agent").
ACQUISITION: The Company intends to acquire
------------ IBP, inc (the "Acquired Company") for
an aggregate purchase price,
together with assumption of debt, of
approximately $4,441,000,000, subject to
adjustment based on the market price of the
Company's common stock, of which
approximately $1,576,100,000 will be the
portion of the purchase price paid in cash
(the balance of the purchase price to be
paid with shares of the Company's common
stock) and approximately $1,080,000,000 will
be the cash amount required to refinance
outstanding debt of the Acquired Company.
Such acquisition and the related
transactions, including the refinancing of
debt of the Acquired Company, are referred
to herein as the "Acquisition". In
connection with the Acquisition, the Company
intends to (i) amend, supplement or replace
the Company's outstanding senior unsecured
credit facility in an aggregate principal
amount of $1,000,000,000 (the "Existing
Credit Facility" and, as amended,
supplemented or replaced, the "New Credit
Facility"), (ii) establish a senior
unsecured bridge credit facility in an
aggregate principal amount of $2,500,000,000
(the "Senior Note Bridge Facility") and
(iii) effect an accounts receivable
securitization in an aggregate principal
amount of up to $750,000,000 (the
"Receivables Facility") or, if the
Receivables Facility cannot be established
by the date on which shares are to be
accepted in the Tender Offer (as defined
below), establish a senior unsecured bridge
credit facility in an aggregate principal
amount of $350,000,000 (the "Receivables
Bridge Facility"). In the event the
Receivables Bridge Facility is established,
the
9
Company intends to establish the Receivables
Facility and, upon receipt of the proceeds
of the Receivables Facility, to apply such
proceeds to repay amounts borrowed under and
to terminate the Receivables Bridge
Facility. In addition, in connection with
the Acquisition, the Company intends to
issue and sell senior unsecured notes of the
Company (the "Senior Notes") in an aggregate
principal amount of up to $2,500,000,000
and, upon receipt of the proceeds of the
Senior Notes, to apply such proceeds to
repay amounts borrowed under and to
terminate the Senior Note Bridge Facility.
FACILITY: A 90-day senior unsecured bridge credit
-------- facility in an aggregate principal amount
of $350,000,000 (the "Receivables Bridge
Facility").
AVAILABILITY: At such time as the aggregate commitments
available to the Company under the Senior
Note Bridge Facility shall be fully drawn,
up to the full amount of the commitments
under the Receivables Bridge Facility may be
borrowed, repaid and reborrowed subject only
to the satisfaction of applicable conditions
to borrowing.
PURPOSE: The Receivables Bridge Facility will be used
to finance the acquisition of the Acquired
Company, to refinance existing debt of the
Acquired Company, to pay related fees and
expenses and for general corporate purposes,
either directly or by providing liquidity in
connection with the Company's commercial
paper program.
COMMITMENT TERMINATION AND The commitments will expire and outstanding
--------------------------- loans will mature on the date that is 90
MATURITY: days after the date of the execution of
-------- definitive documentation for the Receivables
Bridge Facility (the "Closing Date").
MANDATORY COMMITMENT Commitments under the Receivables Bridge
---------------------
REDUCTIONS: Facility will be reduced, and loans will be
---------- cash prepaid, in an amount equal to (i)
the net proceeds of the Receivables Facility
and (ii) a pro rata portion (based on the
aggregate commitments and outstanding loans
under the Receivables Bridge Facility and
the Senior Note Bridge Facility) of the net
proceeds of the sale of debt or equity,
other than the Senior Notes, by the Company.
GUARANTEE: The obligations under the Receivables Bridge
---------
Facility will be unconditionally guaranteed
by the Acquired Company and its
subsidiaries, if any, that are obligors on
or guarantors of IBP indebtedness (the
"Guarantee"); provided, however, that in the
--------- --------
event and after the Company
10
and/or the Acquired Company terminate(s) the
Agreement and Plan of Merger between the
Acquired Company, the Company and Lasso
Acquisition Corporation dated as of January
1, 2001, as modified by the Stipulation and
Order in respect of the parties dated June
27, 2001 (the "Merger Agreement"), in
accordance with its terms as in effect on
the date hereof, the Guarantee will be
limited to an amount equal to the pro rata
portion (based on the aggregate outstanding
loans under the Receivables Bridge Facility,
the Senior Note Bridge Facility and the New
Credit Facility) of $1,250,000,000 (or such
higher amount as shall equal the
indebtedness of IBP refinanced in connection
with the Acquisition) represented by the
outstanding loans under the Receivables
Bridge Facility. The Company will agree that
payments in respect of the Guarantee will
reduce the indebtedness of the Acquired
Company to the Company on a dollar for
dollar basis.
FEES AND INTEREST RATES: If (a) the Company's senior, unsecured,
----------------------- non-credit enhanced long-term debt shall be
rated at least BBB by Standard & Poor's
Ratings Group ("S&P") and at least Baa2 by
Moody's Investors Services, Inc. ("Moody's")
and (b) the Company's commercial paper shall
be rated at least A2 by S&P and at least P2
by Moody's, and none of the minimum ratings
referred to in this paragraph shall be under
review for possible downgrade and the
Company shall not have been placed on credit
watch with negative implications by either
such rating agency, fees and interest rates
will be as provided in Annex I hereto.
If the preceding paragraph shall not be
applicable but the Company's senior,
unsecured, non-credit enhanced long-term
debt shall be rated at least BBB- by S&P and
at least Baa3 by Moody's and neither of the
ratings referred to in this paragraph shall
be under review for possible downgrade and
the Company shall not have been placed on
credit watch with negative implications by
either such rating agency, fees and interest
rates will be as provided in Annex II
hereto.
CONDITIONS PRECEDENT TO The effectiveness of the Receivables Bridge
------------------------ Facility will be conditioned upon
EFFECTIVENESS: satisfaction of customary closing conditions
------------- including, without limitation, execution and
delivery of definitive financing
documentation with respect to the
Receivables Bridge Facility and the
Guarantee satisfactory to the Lenders;
delivery of satisfactory evidence of
authority; legal opinions; payment of fees
and expenses; delivery of the latest
available audited and interim financial
statements for each of the Company and the
Acquired
11
Company (in each case as filed with its most
recent Form 10-K Report) and pro forma
financial information; and the conditions
set forth below:
The tender offer provided for in the Merger
Agreement (the "Tender Offer") shall have
been completed in accordance with applicable
law and the terms of the Merger Agreement
(in the form heretofore delivered or
otherwise acceptable to the Administrative
Agent) and the other documentation related
to the Acquisition previously approved by
the Administrative Agent, without
modification or waiver of any material term
or condition thereof not approved by the
Administrative Agent, and the assets and
liabilities of the Acquired Company shall be
consistent with the pro forma financial
information and information on sources and
uses of funds heretofore delivered to the
Administrative Agent.
After giving effect to the completion of the
Tender Offer and the other transactions
contemplated in connection therewith, the
Company and its subsidiaries (including the
Acquired Company and its subsidiaries) shall
have outstanding no indebtedness other than
(a) the Company's commercial paper program,
(b) the Senior Notes (in the event that the
Senior Notes are issued and sold prior to
the closing date of the Senior Note Bridge
Facility), (c) the Senior Note Bridge
Facility (in the event that the Senior Notes
are not issued and sold prior to the closing
date of the Senior Note Bridge Facility),
(d) indebtedness under or permitted by the
Existing Credit Facility or the New Credit
Facility, (e) any indebtedness under the
Receivables Facility (in the event the
Receivables Facility is effected prior to
the Closing Date) and (f) approximately
$625,000,000 of indebtedness of the Acquired
Company existing on the date hereof that
will not be repaid in connection with the
Acquisition; provided that the terms of such
indebtedness will not be violated by the
transactions contemplated hereby or prohibit
the Acquired Company or its subsidiaries
from guaranteeing indebtedness of the
Company or paying dividends to the Company
(or such terms as may be violated or shall
contain such prohibitions shall have been
amended or waived in a manner satisfactory
in all respects to the Administrative
Agent).
All requisite governmental authorities and
third parties shall have approved or
consented to the Acquisition to the extent
such approvals or consents are required
under applicable laws or agreements or
otherwise, all applicable appeal periods
shall have expired and there shall be no
governmental or judicial action, actual or
threatened, that
12
could reasonably be expected to restrain,
prevent or impose materially burdensome
conditions on the Acquisition or the other
transactions contemplated hereby. There
shall be no litigation or administrative
action that could reasonably be expected to
have a material adverse effect on the
business, assets, liabilities or condition
(financial or otherwise) of the Company and
its subsidiaries, including the Acquired
Company, taken as a whole.
Any amendment, waiver or other modification
of any debt instruments of the Company or
the Acquired Company required in connection
with the Acquisition, the Receivables Bridge
Facility, the Receivables Facility or the
transactions contemplated hereby shall have
become effective and shall be satisfactory
in all respects to the Administrative Agent.
To the extent that the Receivables Facility
has been established, the commitments shall
have been reduced to the extent provided
above. The existing domestic bank credit
facility of the Acquired Company (the "IBP
Facility") shall have been terminated.
The Senior Notes shall have been issued and
sold (or the Senior Note Bridge Facility
shall have become effective) and the terms
thereof shall be satisfactory to the
Administrative Agent. The Existing Credit
Facility shall be in effect and the terms
thereof shall not be violated by the
transactions contemplated hereby. The
Company shall have entered into a commitment
letter for the New Credit Facility on terms
satisfactory to the Administrative Agent.
DOCUMENTATION: A credit agreement (the "Credit Agreement")
------------- consistent with this Summary of Terms and
Conditions and containing representations
and warranties, affirmative covenants,
negative covenants and events of default,
including provisions to ensure compliance
with applicable Federal Reserve margin
regulations and those specified below, as
the Administrative Agent may deem
appropriate for facilities of this type in
light of the ratings of the Company's
senior, unsecured, non-credit enhanced
long-term debt by Moody's and S&P. In the
event that the terms of the New Credit
Facility are more restrictive that those set
forth in the Credit Agreement, the terms of
the Credit Agreement shall be deemed amended
to incorporate such more restrictive terms.
COVENANTS AND OTHER TERMS: The Credit Agreement shall contain
------------------------- affirmative covenants, negative covenants
and financial covenants and terms in respect
of expenses and indemnification, voting,
etc. substantially the same as those set
forth in the term sheet
13
attached as Exhibit A to the commitment
letter dated as of July 27, 2001 in respect
of the Senior Note Bridge Facility.
GOVERNING LAW: New York.
-------------
COUNSEL FOR ADMINISTRATIVE Cravath, Swaine & Moore.
---------------------------
AGENT:
ANNEX I
FACILITY FEES: Facility Fees of 0.125% per annum will
-------------- accrue and be payable to the Lenders on the
aggregate amount of the Receivables Bridge
Facility (whether drawn or undrawn),
commencing on the Closing Date. Facility
Fees will be payable in arrears at the end
of each calendar quarter and at maturity or
upon the earlier termination of the
commitments.
UTILIZATION FEES: Utilization Fees will accrue and be payable
----------------- to the Lenders on the amount of their
outstanding loans at a rate of 0.25% per
annum for each day on which such loans are
greater than 25% of the aggregate
commitments under the Receivables Bridge
Facility. Utilization Fees will be payable
in arrears at the end of each calendar
quarter and upon termination of the
commitments under the Receivables Bridge
Facility.
All fees will be calculated on the basis of
a 360-day year and actual days elapsed.
INTEREST RATES: Interest will be payable on the Loans at
--------------- the following rates per annum:
(a) In the case of Eurodollar loans,
Adjusted LIBOR plus a spread of
0.875% per annum.
(b) In the case of ABR loans, the
Alternate Base Rate.
The default rate will be the applicable rate
plus 2%.
As used herein, (a) Adjusted LIBOR means the
London interbank offered rate, as set forth
on the applicable Telerate screen at the
time of determination, adjusted for
statutory reserves, and (b) Alternate Base
Rate, or ABR, means the higher of (i)
Chase's Prime Rate and (ii) the Federal
Funds Effective Rate plus 1/2 of 1%. Federal
Funds Effective Rate means, for any day, the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.
ANNEX II
FACILITY FEES: Facility Fees of 0.150% per annum will
accrue and be payable to the Lenders on the
aggregate amount of the Receivables Bridge
Facility (whether drawn or undrawn),
commencing on the Closing Date. Facility
Fees will be payable in arrears at the end
of each calendar quarter and at maturity or
upon the earlier termination of the
commitments.
UTILIZATION FEES: Utilization Fees will accrue and be payable
---------------- to the Lenders on the amount of their
outstanding loans at a rate of 0.25% per
annum for each day on which such loans are
greater than 25% of the aggregate
commitments under the Receivables Bridge
Facility. Utilization Fees will be payable
in arrears at the end of each calendar
quarter and upon termination of the
commitments under the Receivables Bridge
Facility.
All fees will be calculated on the basis of
a 360-day year and actual days elapsed.
INTEREST RATES: Interest will be payable on the Loans at the
-------------- following rates per annum:
(a) In the case of Eurodollar loans,
Adjusted LIBOR plus a spread of
1.10% per annum.
(b) In the case of ABR loans, the
Alternate Base Rate plus a
spread of 0.10% per annum.
The default rate will be the applicable rate
plus 2%.
As used herein, (a) Adjusted LIBOR means the
London interbank offered rate, as set forth
on the applicable Telerate screen at the
time of determination, adjusted for
statutory reserves, and (b) Alternate Base
Rate, or ABR, means the higher of (i)
Chase's Prime Rate and (ii) the Federal
Funds Effective Rate plus 1/2 of 1%. Federal
Funds Effective Rate means, for any day, the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.