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SMITHFIELD FOODS, INC.
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AMENDMENT NUMBER THREE
TO NOTE PURCHASE AGREEMENT DATED AS OF JULY 15, 1996
Amendment Dated as of January 30, 1998
SMITHFIELD FOODS, INC. AMENDMENT NUMBER THREE
AMENDMENT NUMBER THREE
AMENDMENT NUMBER THREE (this "Agreement"), dated as of January 30, 1998,
to the separate Note Purchase Agreements, each dated as of July 15, 1996,
between SMITHFIELD FOODS, INC., a Delaware corporation (the "Company"), formerly
known as Smithfield Foods Virginia, Inc. and each of the Persons listed on Annex
1 thereto (collectively, the "Purchasers").
RECITALS:
A. The Company entered into those certain separate Note Purchase
Agreements, each dated as of July 15, 1996, (as amended by Amendment Number One
dated as of July 15, 1997 and Amendment Number Two dated as of December 1, 1997
and as in effect immediately prior to the effectiveness of this Agreement, the
"Existing Note Purchase Agreement," and, as amended by this Agreement, the
"Amended Note Purchase Agreement"), with the Purchasers, pursuant to which the
Company authorized, issued and sold, and certain of the Purchasers purchased (as
set forth on Annex 1 thereto):
(a) $2,825,000 in aggregate principal amount of its six and
twenty-four one-hundredths percent (6.24%) Series A Senior Secured Notes
Due November 1, 1998 (as amended, restated or otherwise modified from time
to time, the "Series A Notes"),
(b) $9,852,942 in aggregate principal amount of its eight and
forty-one one-hundredths percent (8.41%) Series B Senior Secured Notes Due
August 1, 2006 (as amended, restated or otherwise modified from time to
time, the "Series B Notes"),
(c) $40,000,000 in aggregate principal amount of its eight and
thirty-four one-hundredths percent (8.34%) Series C Senior Secured Notes
Due August 1, 2003 (as amended, restated or otherwise modified from time
to time, the "Series C Notes"),
(d) $9,000,000 in aggregate principal amount of its nine and
eighty one-hundredths percent (9.80%) Series D Senior Secured Notes Due
August 1, 2003 (as amended, restated or otherwise modified from time to
time, the "Series D Notes"),
(e) $9,250,000 in aggregate principal amount of its ten and
seventy five one-hundredths percent (10.75%) Series E Senior Secured Notes
Due August 1, 2005 (as amended, restated or otherwise modified from time
to time, the "Series E Notes"),
(f) $100,000,000 in aggregate principal amount of its eight
and fifty-two one-hundredths percent (8.52%) Series F Senior Secured Notes
Due August 1, 2006 (as amended, restated or otherwise modified from time
to time, the "Series F Notes"),
(g) $14,000,000 in aggregate principal amount of its nine and
eighty-five one-hundredths percent (9.85%) Series G Senior Secured Notes
Due November 1, 2006 (as amended, restated or otherwise modified from time
to time, the "Series G Notes"), and
(h) $14,779,412 in aggregate principal amount of its eight and
forty-one-hundredths percent (8.41%) Series H Senior Secured Notes Due
August 1, 2004 (as amended, restated or otherwise modified from time to
time, the "Series H Notes").
The Series A Notes, the Series B Notes, the Series C Notes, the Series D Notes,
the Series E Notes, the Series F Notes, the Series G Notes and the Series H
Notes are herein referred to, individually, as a "Note," and collectively, as
the "Notes."
B. As of the Effective Date (defined below), the Purchasers are the
holders of all of the outstanding Notes; the holders of the Notes on the
Effective Date are herein referred to as the "Holders."
▇. ▇▇▇▇▇▇▇▇ of Smithfield, Ltd., ▇▇▇▇ ▇▇▇▇▇▇▇ & Co., The Smithfield
Packing Company, Incorporated, SFFC, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Incorporated, ▇▇▇▇▇'▇
of Carolina, Inc., ▇▇▇▇▇ Meat Group, Inc., ▇▇▇▇▇▇▇'▇ Old Fashioned Country Hams,
Inc. and Sunnyland, Inc. (collectively, the "Guarantors"), each a Wholly-Owned
Subsidiary, are guarantors of the obligations of the Company in respect of,
among other things, the Notes, pursuant to that certain Joint and Several
Guaranty dated as of July 15, 1996.
D. The Company has requested that the Holders agree (a) to amend certain
provisions of the Existing Note Purchase Agreement and (b) direct the Security
Trustee to take certain actions with respect to the Collateral.
E. Subject to the terms and conditions set forth in this Agreement, (a)
the Company and the Holders are willing to amend the Existing Note Purchase
Agreement in the manner specified on certain Exhibits hereto and as more
particularly set forth herein and (b) the Holders are willing to direct the
Security Trustee to release and subordinate its interest with respect to certain
portions of the Collateral.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Holders agree as follows:
SECTION 1. WARRANTIES AND REPRESENTATIONS.
To induce the Holders to enter into this Agreement, the Company and each
of the Guarantors represent and warrant to each of the Holders that as of the
Effective Date (as hereinafter defined):
1.1 Corporate Organization and Authority.
The Company and each Subsidiary:
(a) is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) has all legal and corporate power and authority to own and
operate its Properties and to carry on its business as now conducted and
as presently proposed to be conducted;
(c) has all necessary licenses, certificates and permits to
own and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted, except where the
failure to have such licenses, certificates and permits, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; and
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(d) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation, in each state in the United States of America and in each
other jurisdiction where the failure to be so qualified or licensed and
authorized and in good standing, in the aggregate for all such failures,
could reasonably be expected to have a Material Adverse Effect.
1.2 Authorization, etc.
(a) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and each of the Guarantors.
Each of this Agreement, the Amended Note Purchase Agreement and each other
Financing Document (as defined in the Amended Note Purchase Agreement, the
"Financing Documents") constitutes a legal, valid and binding obligation
of the Company or the Guarantors, as applicable, enforceable, in each
case, against the Company or such Guarantor, as applicable, in accordance
with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and
(ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(b) The Holders are the record owners of all of the
outstanding Notes.
(c) The Guarantors are the only Persons which have an
outstanding Guaranty of the Notes.
1.3 Litigation.
There are no proceedings pending, or, to the knowledge of the Company or
the Guarantors, threatened, against or affecting the Company, any Guarantor or
any other Subsidiary, or any of their respective Properties in any court or
before any governmental authority or arbitration board or tribunal that, either
individually or in the aggregate, conflict with or interfere with the ability of
the Company or any of the Guarantors to execute and deliver this Agreement and
to perform their respective obligations hereunder, under the Amended Note
Purchase Agreement and under each of the other Financing Documents.
1.4 No Conflicts, etc.
The execution and delivery by the Company and the Guarantors of this
Agreement and the performance by the Company and the Guarantors of their
respective obligations under each of this Agreement, the Amended Note Purchase
Agreement and the other Financing Documents to which they are a party do not
conflict with, result in any breach in any of the provisions of, constitute a
default under, violate or result in the creation of any Lien upon any Property
of the Company or any Subsidiary under the provisions of:
(a) any charter document, agreement with shareholders or
bylaws of the Company or any Subsidiary;
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(b) any agreement, instrument or conveyance by which the
Company or any Subsidiary or any of their respective Properties may be
bound or affected; or
(c) any statute, rule or regulation or any order, judgment or
award of any court, tribunal or arbitrator by which the Company or any
Subsidiary or any of their respective Properties may be bound or affected.
1.5 Governmental Consent.
The execution and delivery by the Company and the Guarantors of this
Agreement and the performance by the Company and the Guarantors of their
respective obligations hereunder, under the Amended Note Purchase Agreement and
the other Financing Documents to which they are a party do not require any
consents, approvals or authorizations of, or filings, registrations or
qualifications with, any governmental authority on the part of the Company or
any Subsidiary under the circumstances and conditions contemplated by this
Agreement, the Amended Note Purchase Agreement or the other Financing Documents.
1.6 Compliance with Law.
Neither the Company nor any Subsidiary:
(a) is in violation of any law, ordinance, governmental
rule or regulation to which it is subject; or
(b) has failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of its
Property or to the conduct of its business;
which violation or failure to obtain might, either individually or in the
aggregate, have a material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company or the Guarantors
to perform any of their respective obligations set forth in this Agreement, the
Amended Note Purchase Agreement or the other Financing Documents.
1.7 Existence of Defaults.
Immediately prior to, and after giving effect to, the Note Purchase
Agreement Amendment (as such term is defined in Section 2 hereof), no condition
exists that would constitute a Default or an Event of Default under the Note
Purchase Agreement or the Amended Note Purchase Agreement, as the case may be.
1.8 Disclosure.
Neither this Agreement nor any written statement furnished by the Company
or any Guarantor to any Holder in connection herewith contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading. There is no fact that the
Company has not disclosed to the Holders in writing that has had or, so far as
the Company can now reasonably foresee, could reasonably be expected to have a
material adverse effect on the business, prospects, profits, Properties or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole, or the ability of the Company or any Guarantor to perform any of their
respective obligations set forth in this Agreement, the Amended Note Purchase
Agreement or the other Financing Documents.
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1.9 True and Correct Copies.
The Company has delivered to the Holders or their special counsel true and
correct copies of (a) the Note Purchase Agreement dated as of March 1, 1998
between Distribution Development, L.L.C. and certain purchasers of Notes
thereunder and the Lease Guaranty by the Company executed in connection
therewith and (b) the Bladen County Option Documents.
SECTION 2. AMENDMENT, DIRECTION; AFFIRMATIONS.
2.1 Amendment to Existing Documents.
The Company and the Guarantors, and, subject to the satisfaction of the
conditions set forth in Section 3 hereof, the Holders, each hereby consents and
agrees that the Existing Note Purchase Agreement is hereby amended in the manner
and as specified in Exhibit A to this Agreement (such amendment provided for in
Exhibit A is herein collectively referred to as the "Note Purchase Agreement
Amendment").
2.2 Direction to Security Trustee.
Subject to the satisfaction of the conditions set forth in Section 3
hereof, the Holders hereby agree to execute and deliver to the Security Trustee
the direction letter in the form attached hereto as Exhibit B.
2.3 Affirmation of Obligations under Amended Note Purchase
Agreement and Notes.
The Company hereby acknowledges and affirms all of its obligations under
the terms of the Amended Note Purchase Agreement, the Notes and each of the
other Financing Documents to which it is a party.
2.4 Affirmation of Obligations under Joint and Several Guaranty
and Financing Documents.
Each of the Guarantors hereby acknowledges and affirms all of its
obligations under the terms of the Joint and Several Guaranty and each other
Financing Document to which it is a party.
2.5 Confirmation of Security Interest.
The Smithfield Packaging Company, Incorporated ("Packing") hereby confirms
to the Holders that the security interest granted to the Security Trustee
pursuant to the terms of the Security Agreement, includes, without limitation, a
first perfected security interest in Packing's option rights as set forth in the
Bladen County Option Documents.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF NOTE PURCHASE AGREEMENT AMENDMENT.
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The Note Purchase Agreement Amendment and the direction to the Security
Trustee to release and subordinate its interest with respect to certain portions
of the Collateral as set forth on Exhibit B hereto shall not become effective
unless all of the following conditions precedent shall have been satisfied in
full (the date of such satisfaction being herein referred to as the "Effective
Date"):
3.1 Execution and Delivery of this Agreement.
The Company and each of the Guarantors shall have executed and delivered
to each of the Holders an original counterpart of this Agreement.
3.2 No Defaults; Warranties and Representations True.
No Default or Event of Default shall exist, and the warranties and
representations set forth in Section 1 hereof shall be true and correct on the
Effective Date.
3.3 Authorization of Transactions.
The Company and each of the Guarantors shall have authorized, by all
necessary corporate action, the execution and delivery of this Agreement and the
performance of all obligations of, and the satisfaction of all conditions
pursuant to this Section 3 by, and the consummation of all transactions
contemplated by the Amended Note Purchase Agreement and the other Financing
Documents by, the Company and each of the Guarantors.
3.4 Legal Opinions.
The Holders shall have received legal opinions as to such matters as the
Holders and their special counsel shall request in connection with the
transactions contemplated by this Agreement.
3.5 Expenses.
The Company shall have paid all costs and expenses of the Holders relating
to this Agreement in accordance with Section 4.5 hereof.
4. SECTION MISCELLANEOUS.
4.1 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, INTERNAL VIRGINIA LAW, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
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4.2 Duplicate Originals.
Two or more duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed in one or
more counterparts and shall be effective when at least one counterpart shall
have been executed by each party hereto, and each set of counterparts that,
collectively, show execution by each party hereto shall constitute one duplicate
original.
4.3 Waivers and Amendments.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
4.4 Section Headings.
The titles of the Sections hereof appear as a matter of convenience only,
do not constitute a part of this Agreement and shall not affect the construction
hereof.
4.5 Costs and Expenses.
The Company shall pay all costs and expenses of the Holders relating to
this Agreement, including, but not limited to, the statement for reasonable fees
and disbursements of the Holders' special counsel presented to the Company on
the Effective Date. The Company will also pay, upon receipt thereof, each
additional statement for reasonable fees and disbursements of the Holders'
special counsel rendered after the Effective Date in connection with this
Agreement or the Financing Documents.
4.6 Survival.
All warranties, representations, certifications and covenants made by the
Company or any of the Guarantors in this Agreement shall be considered to have
been relied upon by the Holders and shall survive the execution and delivery of
this Agreement, regardless of any investigation made by or on behalf of the
Holders.
4.7 Time of Essence.
Time is and shall be of the essence in the satisfaction of all the
conditions set forth in Section 3 of this Agreement.
4.8 Defined Terms.
Capitalized terms used herein and not defined herein shall have the
meanings assigned to them in the Amended Note Purchase Agreement.
[Remainder of page intentionally left blank; next page is signature page.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by a duly authorized officer or agent thereof.
SMITHFIELD FOODS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ OF SMITHFIELD, LTD.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
THE SMITHFIELD PACKING COMPANY,
INCORPORATED
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SFFC, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇'▇ OF CAROLINA, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇ MEAT GROUP, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇'▇ OLD FASHIONED COUNTRY
HAMS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SUNNYLAND, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
Accepted and Agreed:
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Officer
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Investment Officer
MELLON BANK, N.A., solely in its capacity as Trustee for the ▇▇▇▇ Atlantic
Master Trust, (as directed by ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual
Life Insurance Company), and not in its individual capacity
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Signatory
MELLON BANK, N.A., solely in its capacity as Trustee for The Long-Term
Investment Trust, (as directed by ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company),
and not in its individual capacity
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Signatory
THE MARITIME LIFE ASSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Director, Bonds and Corporate Finance
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Chief Investment Officer
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Authorized Representative
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
AND
INDEPENDENT LIFE AND ACCIDENT INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Investment Officer
ACADEMY LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Second Vice President - Investments
PEOPLES SECURITY LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Second Vice President - Investments
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: First Vice President
COMPANION LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Assistant Treasurer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Treasurer
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
:
CM LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Investment Officer
EXHIBIT A
AMENDMENT TO EXISTING NOTE PURCHASE AGREEMENT
(Section)1. Section 9.1 of the Existing Note Purchase Agreement is amended
to amend and restate the definition of "Senior Subordinated Debt" and to add the
definitions of "Acquisition", "Bladen County Cogeneration Property" and "Bladen
County Option Documents" in the appropriate alphabetical order in
such section:
Acquisition -- Section 6.10.
Bladen County Cogeneration Property -- means that certain piece or parcel
of land located in Hollow Township, Bladen County, North Carolina, together with
a certain twenty-five (25) foot right of way easement, which property is more
particularly described in that certain Deed made and entered into on or around
July 16, 1997, by and between The Smithfield Packing Company, Incorporated, as
grantor and party of the first part, and United Supply of America, as grantee
and party of the second part, together with any and all buildings, structures,
improvements, fixtures, equipment, machinery and other property now or hereafter
affixed to, located on, within or beneath, or used in connection with said
property.
Bladen County Option Documents -- means that certain Steam Purchase and
Sales Agreement dated July 16, 1997, between United Supply of America, as
supplier, and The Smithfield Packing Company, Incorporated, as purchaser,
together with that certain Memorandum of Option to Purchase made and executed by
United Supply of America in connection therewith or any other instruments and
agreements pursuant to which The Smithfield Packing Company, Incorporated, or
its successors and assigns, may acquire all or any portion of the Bladen County
Cogeneration Property.
Senior Subordinated Debt - means at any time the aggregate amount of Debt
of the Company outstanding at such time which has the terms and conditions
described in the Company's Preliminary Offering Memorandum (draft dated January
15, 1998) prepared by Chase Securities, Inc. for its issue of Senior
Subordinated Notes due 2008 and is in a principal amount not exceeding
$200,000,000.
(Section)2. Section 6.10 of the Existing Note Purchase Agreement is
hereby amended and restated to read in full as follows:
6.10 Consolidated Tangible Net Worth.
The Company shall not at any time permit Consolidated Tangible Net Worth,
determined at such time, to be less than the sum of
(a) two hundred million dollars ($200,000,000), plus
(b) the sum of the Company Fiscal Year Net Worth Increase
Amounts calculated for all fiscal years of the Company ended on or after
the Closing Date, plus
(c) fifty percent (50%) of the aggregate amount of increases in
Consolidated Tangible Net Worth after December 1, 1997 resulting from the
issuance by the Company of capital stock as consideration in Acquisitions
made by the Company and its Subsidiaries.
EXHIBIT A-1
"Acquisition" means, any transaction, or any series of related transactions, by
which the Company and/or any of its Subsidiaries (a) acquires any going business
or all or substantially all of the assets of any Person, whether through
purchase of assets, merger or otherwise, (b) directly or indirectly acquires
control of at least a majority, in number of votes, of the securities of a
corporation that have ordinary voting power for the election of directors or (c)
directly or indirectly acquires control of at least a majority of the partner,
member or other ownership interests of any Person that is not a corporation.
"Company Fiscal Year Net Worth Increase Amount" means, for any fiscal year of
the Company, the greater of
(i) fifty percent (50%) of Consolidated Net Income for such
fiscal year and
(ii) zero dollars ($0).
(Section)3. A New Section 6.24 to the Existing Note Purchase Agreement is
hereby added and will read in full as follows:
6.24 Covenants Regarding the Bladen County Cogeneration Property.
The Company covenants and agrees that, in the event the Company or any
Affiliate shall acquire all or any portion of the Bladen County Cogeneration
Property pursuant to the Bladen County Option Documents or otherwise, the
Company shall, simultaneously with such acquisition, cause the Bladen County
Cogeneration Property (or the portion thereof) so acquired to be pledged as
additional collateral security for the indebtedness evidenced by the Notes
pursuant to documentation and in a manner that is in all respects satisfactory
to the Required Holders. The Company shall pay any and all fees, costs and
expenses including, without limitation, legal fees and expenses and title
insurance charges and premiums, incurred by the holders of the Notes, the
Security Trustee and the other parties to such transaction.
The Company further covenants and agrees that it shall not, directly or
indirectly, terminate, modify or amend any of the Bladen County Option
Documents, without the prior written consent of the Required Holders.
EXHIBIT A-2
EXHIBIT B
DIRECTION TO SECURITY TRUSTEE
To: First Union National Bank, a national banking association
(successor by merger to First Union Bank of Connecticut, a
Connecticut banking corporation), as trustee under a Trust
Agreement dated as of July 15, 1996 with Smithfield Foods, Inc.
(the "Company") and certain other parties
Date: January 30, 1998
Re: Amendment Number Three, dated as of January 30, 1998, to the
separate Note Purchase Agreements each dated as of July 15, 1996
(the "Amendment Agreement"), among the Company, certain of its
subsidiaries and other Persons party thereto (such other Persons
herein collectively referred to as the "Holders")
Ladies and Gentlemen:
The undersigned are all of the Holders referred to above. In accordance
with Section 2.2 of the Amendment Agreement, the undersigned hereby directs you
to execute and deliver to Smithfield Foods, Inc. each of the documents attached
hereto as Annex 1, Annex 2, Annex 3 and Annex 4.
[Holders]
By__________
EXHIBIT B-1
