EXHIBIT 10.3
AMENDMENT NO. 1
TO
SECURITIES PURCHASE AGREEMENT
AMONG
SUIZA FOODS CORPORATION,
SUIZA DAIRY GROUP HOLDINGS, INC.,
SUIZA DAIRY GROUP, L.P.,
SUIZA SOUTHEAST, LLC,
DAIRY FARMERS OF AMERICA, INC.,
AND
MID-AM CAPITAL, L.L.C.
DATED AS OF SEPTEMBER 19, 2001
AMENDMENT NO. 1
TO
SECURITIES PURCHASE AGREEMENT
This Amendment No. 1 to Securities Purchase Agreement ("AMENDMENT") is
made as of September 19, 2001, by and among Suiza Foods Corporation, a Delaware
corporation ("SUIZA"), Suiza Dairy Group Holdings, Inc., a Nevada corporation
("HOLDINGS"), Suiza Dairy Group, L.P., a Delaware limited partnership ("SDG"),
Suiza Southeast, LLC, a Delaware limited liability company ("SUIZA SOUTHEAST"),
Dairy Farmers of America, Inc., a Kansas cooperative marketing association
("DFA"), and Mid-Am Capital, L.L.C., Delaware limited liability company
("MID-AM").
WHEREAS, Suiza, Holdings, SDG, Suiza Southeast, DFA and Mid-Am are
parties to that certain Securities Purchase Agreement dated April 4, 2001
("AGREEMENT"), pursuant to which Holdings agreed to purchase from DFA and
Mid-Am, and DFA and Mid-Am agreed to sell to Holdings, all the limited partner
interests in SDG held by each of them;
WHEREAS, Suiza, Holdings, SDG, Suiza Southeast, DFA and Mid-Am desire
to amend the Agreement on the terms set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, and in reliance on the representations and warranties, herein
contained, the parties hereby agree as follows:
1. Amendment to Section 2.2(a). Section 2.2(a) is hereby amended by
deleting Section 2.2(a) as it appears in the Agreement in its entirety and
inserting in its place the following revised Section 2.2(a):
"(a) In exchange for the SDG Common Interests and the SDG Preferred
Interests, Holdings will (i) cause SDG or Dean Foods, as applicable,
to transfer, sell and convey the Dairy Assets and the Dairy
Liabilities to DFA, (ii) pay, or cause SDG to pay, an amount equal
to $166 million in cash to DFA and Mid-Am, subject to adjustment as
set forth below (the "CASH CONSIDERATION"), in the relative amounts
designated by the DFA Companies at least 3 days prior to Closing,
(iii) deliver a subordinated promissory note executed by Suiza in
the principal amount of $50,000,000 to DFA, in substantially the
form of Exhibit C attached hereto (the "Note"), and (iv) deliver a
First Amendment to Milk Supply Agreement executed by Suiza, in
substantially the form of Exhibit E attached hereto (the "SUPPLY
AMENDMENT"). Items (i), (ii), (iii) and (iv) are collectively
referred to as the "PURCHASE PRICE". SDG will not transfer, sell or
convey the Excluded Assets to DFA and DFA will not assume and shall
not be liable or responsible for any Excluded Liabilities. The Cash
Consideration payable to DFA at Closing shall be (A) increased for
DFA's and Mid-Am's pro rata share of the reported earnings of SDG
from and including January 1, 2001 through the day immediately
preceding the Closing Date, (B) decreased by (I) $2,535,000, plus
(II) the amount of any distributions (including any distributions to
be paid after Closing related to the period prior to the Closing
Date) paid to DFA and Mid-Am
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of cash or other property and the amount of any deemed distributions
(for stock option exercises) deemed paid to DFA and Mid-Am under the
Limited Partnership Agreement, in the case of such distributions,
from and including January 1, 2001 and through the day immediately
preceding the Closing Date, and (C) increased or decreased, as
applicable, to the extent the Closing Date Working Capital is less
than or greater than Stated Working Capital (collectively, the "CASH
ADJUSTMENT")."
2. Amendment to Section 2.4(d). Section 2.4(d) is hereby amended by
replacing section 2.4(d) as it appears in the Agreement with the following new
section 2.4(d), and renumbering the existing 2.4(d) in the Agreement as new
section 2.4(e), as follows:
"(d) Suiza and DFA will execute and deliver the Supply Amendment,
substantially in the form attached hereto as Exhibit E.
(e) Suiza, Holdings, SDG, Suiza Southeast, Dean Foods and/or one or
more of its subsidiaries, DFA and Mid-Am will execute and deliver
such other documents and agreements required under Sections 7 and 8,
as applicable."
3. Amendment to Section 4. Section 4 is hereby amended by adding the
following new section 4.3:
"4.3 MILK SUPPLY AGREEMENTS. Except as set forth on Schedule 4.3 and
except for milk supply agreements with DFA, neither Velda, Coburg
Dairy, Inc., H. Meyer Dairy Company, Cream-O-Weber Dairy, Inc., nor
the fluid milk facility of Barber Dairies, Inc., located in
Birmingham, Alabama is a party to a supply agreement which has (a)
term in excess of one (1) year and which does not expire on or
before December 31, 2001 or (b) a right of first offer or right of
first refusal with respect to the supply of raw milk."
4. Amendment to Section 6. Section 6 is hereby amended by adding the
following new Section 6.13:
"6.13 DAIRY LIABILITIES. In no event shall any milk supply
agreement, other than those listed on Schedule 4.3, which has (a) a
term in excess of one (1) year and which does not expire on or
before December 31, 2001 or (b) a right of first offer or right of
first refusal with respect to the supply of raw milk, constitute a
Dairy Liability."
5. Amendment to Section 8.1. Section 8.1 is hereby amended by adding
the following sentence to the end of such section
"Notwithstanding the foregoing, the failure of the representation
and warranty contained in Section 4.3 to be accurate as of the date
hereof or on the Closing Date shall not be the basis for or cause
the condition set forth in this Section 8.1 to fail to be satisfied.
If the representation and warranty contained in Section 4.3 fails to
be accurate on the date hereof or on the Closing Date, DFA (assuming
the other conditions precedent to DFA's obligation to Close have
either been satisfied
37
or waived as of the Closing Date) will not be permitted to terminate
this Agreement and will not be released from its obligations to
Close the transactions contemplated hereby. Nothing in this Section
8.1 shall limit DFA's right to be indemnified in respect of a breach
of the representation and warranty contained in Section 4.3, as
provided in Section 9 of the Agreement."
6. Amendment to Section 9.1. Section 9.1 is hereby amended by deleting
third sentence of Section 9.1 as it appears in the Agreement in its entirety and
inserting in its place the following revised third sentence of Section 9.1:
"Except as otherwise provided in this Section 9.1, all
representations and warranties in this Agreement and the Bill of
Sale and any other certificate or document delivered pursuant to
this Agreement or the Bill of Sale will terminate eighteen months
after the Closing; provided, however, that (a) the representations
and warranties set forth in Section 4.3 of this Agreement will
survive for a period of five years after the Closing, (b) the
representations and warranties set forth in Sections 4.1(c)(i),
4.1(c)(iii) and 4.1(c)(iv) of the Bill of Sale will survive until
the expiration of the applicable statute of limitations for any such
violation, breach or other matter that is the subject of such
representations and warranties, (c) if any breach of the
representations and warranties set forth herein, or in Sections 3.1,
4.1, 4.7, 4.9, 4.10, 4.11 or 4.15 of the Bill of Sale is based on a
violation of any Legal Requirement, then such representations and
warranties and any claim for indemnification applicable to such a
violation shall survive for the longer of eighteen months from the
Closing Date and the applicable statute of limitation with respect
thereto; and (d) with respect to the representations and warranties
set forth in Sections 3.2, 4.4 and 4.5(b) of the Bill of Sale, such
representations and warranties and any claim for indemnification
with respect thereto shall survive indefinitely."
7. Amendment to Section 9.4(e). Section 9.4(e) is hereby amended by
deleting Section 9.4(e) as it appears in the Agreement in its entirety and
inserting in its place the following revised Section 9.4(e):
"(e) Notwithstanding the foregoing, the limitations set forth in
Section 9.4(b), (c) and (d) will not apply to Damages arising from
or in connection with a breach or alleged breach of (i) the
representations and warranties of DFA set forth in Section 3.2 of
the Bill of Sale, (ii) the representations and warranties of Suiza,
Holdings and SDG set forth in Section 4.3 of this Agreement, (iii)
the representations and warranties of Suiza and SDG set forth in
Section 4.4 and 4.5(b) of the Bill of Sale, (iv) the covenants and
agreements concerning the Dairy Liabilities or the Excluded
Liabilities, or (v) the covenants and agreements set forth in
Section 6.11(d)."
8. Amendment to Exhibit C. Exhibit C to the Agreement as hereby amended
by deleting Exhibit C as it appears as an attachment to the Agreement in its
entirety and inserting in its place the revised Exhibit C attached hereto.
38
9. Miscellaneous.
(a) All capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement.
(b) This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(c) This Amendment is intended to amend the Agreement. Except
as specifically set forth herein, all other terms and conditions of the
Agreement shall remain in full force and effect without modification.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the date first written above.
SUIZA FOODS CORPORATION
By: /s/ MICHELLE P. GOOLSBY
---------------------------------------------
Name: Michelle P. Goolsby
--------------------------------------
Title: Executive Vice President
-----------------------------------
& General Counsel
-----------------------------------
SUIZA DAIRY GROUP HOLDINGS, INC.
By: /s/ MICHELLE P. GOOLSBY
---------------------------------------------
Name: Michelle P. Goolsby
--------------------------------------
Title: Vice President
-------------------------------------
SUIZA DAIRY GROUP, L.P.
By: SUIZA MANAGEMENT CORPORATION,
the sole general partner
By: /s/ MICHELLE P. GOOLSBY
---------------------------------------------
Name: Michelle P. Goolsby
--------------------------------------
Title: Executive Vice President
-----------------------------------
& General Counsel
-----------------------------------
SUIZA SOUTHEAST, LLC
By: /s/ MICHELLE P. GOOLSBY
---------------------------------------------
Name: Michelle P. Goolsby
--------------------------------------
Title: Vice President
-------------------------------------
DAIRY FARMERS OF AMERICA, INC.
By: /s/ GARY E. HANMAN
---------------------------------------------
Name: Gary E. Hanman
--------------------------------------
Title: President & Chief Executive Officer
-------------------------------------
MID-AM CAPITAL, L.L.C.
By: /s/ GERALD L. BOS
---------------------------------------------
Name: Gerald L. Bos
--------------------------------------
Title: CEO & Treasurer
-------------------------------------