--------------
SMITHFIELD FOODS, INC.
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AMENDMENT NUMBER TWO
TO NOTE PURCHASE AGREEMENT DATED AS OF JULY 15, 1996
AMENDMENT DATED AS OF DECEMBER 1, 1997
AMENDMENT NUMBER TWO
AMENDMENT NUMBER TWO (this "Agreement"), dated as of December 1, 1997,
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 from time to time 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 to amend certain
provisions of the Existing Note Purchase Agreement.
E. Subject to the terms and conditions set forth in this Agreement, 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.
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,
2
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect; and
(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:
3
(a) any charter document, agreement with shareholders or
bylaws of the Company or any Subsidiary;
(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.
4
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.
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 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.
2.3 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.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF NOTE PURCHASE AGREEMENT AMENDMENT.
The Note Purchase Agreement Amendment shall not become effective unless
all of the following conditions precedent shall have been satisfied in full on
or before 5:00 p.m. (Hartford, Connecticut time) on January 30, 1998 (the date
of such satisfaction being herein referred to as the "Effective Date"):
5
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 Fees.
The Company shall have paid the fees as set forth on Schedule 1 hereto.
3.6 Expenses.
The Company shall have paid all costs and expenses of the Holders
relating to this Agreement in accordance with Section 4.5 hereof.
3.7 Confirmation of Holders' Satisfaction.
Each of the Holders shall have delivered to the Company a written
statement substantially in the form of Exhibit B hereto (and the Company shall
have acknowledged and agreed to such statement) confirming such Holder's
satisfaction with respect to certain of the conditions specified in this Section
3.
SECTION 4. 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
6
WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.
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.
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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.
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇ OF SMITHFIELD, LTD.
By:
-------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
By:
-------------------------------
Name:
Title:
THE SMITHFIELD PACKING COMPANY,
INCORPORATED
By:
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Name:
Title:
SFFC, INC.
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
By:
-------------------------------
Name:
Title:
▇▇▇▇▇'▇ OF CAROLINA, INC.
By:
-------------------------------
Name:
Title:
▇▇▇▇▇ MEAT GROUP, INC.
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇▇'▇ OLD FASHIONED COUNTRY
HAMS, INC.
By:
-------------------------------
Name:
Title:
SUNNYLAND, INC.
By:
-------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
MELLON BANK, N.A., solely in its capacity as Trustee for the NYNEX MASTER
PENSION TRUST, (as directed by ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company), and
not in its individual capacity
By:
-------------------------------------------------
Name:
Title:
MELLON BANK, N.A., solely in its capacity as Trustee for the AT&T MASTER PENSION
TRUST, (as directed by ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company), and not in
its individual capacity
By:
-------------------------------------------------
Name:
Title:
THE MARITIME LIFE ASSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
INDEPENDENT LIFE AND ACCIDENT INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
ACADEMY LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
PEOPLES SECURITY LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
UNITED OF OMAHA LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
COMPANION LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
CM LIFE INSURANCE COMPANY
By:
-------------------------------------------------
Name:
Title:
EXHIBIT A
AMENDMENT TO EXISTING NOTE PURCHASE AGREEMENT
ss.1. Section 6.4 of the Existing Note Purchase Agreement is hereby
amended to read in its entirety as follows:
6.4 Current Ratio.
The Company shall not at any time permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be
less than 1.05 to 1.00.
ss.2. Section 6.5 of the Existing Note Purchase Agreement is hereby
amended to read in its entirety as follows:
6.5 Consolidated Working Capital.
The Company shall not at any time permit Consolidated Working
Capital to be less than Thirty Five Million Dollars ($35,000,000).
ss.3. Section 6.6(e) of the Existing Note Purchase Agreement is hereby
amended to read in its entirety as follows:
(e) Additional Funded Debt of the Company and the Subsidiaries
if, after giving effect thereto and any concurrent application of the
proceeds of such Funded Debt, (i) Consolidated Funded Debt would not
exceed 65% of Consolidated Total Capitalization and (ii) Consolidated
Senior Funded Debt would not exceed 55% of the result of (A)
Consolidated Total Capitalization minus (B) Senior Subordinated Debt.
ss.4. Section 6.11 of the Existing Note Purchase Agreement is hereby
amended to read in its entirety as follows:
6.11 Total Liabilities.
The Company shall not at any time permit the ratio of Consolidated
Total Liabilities to Consolidated Tangible Net Worth to exceed (a) 3.50 to 1 at
any time after July 15, 1997 and prior to May 3, 1998 and (b) 3.25 to 1 at any
time on or after May 3, 1998.
ss.5. Section 6.12(a)(i) of the Existing Note Purchase Agreement is
hereby amended to read in its entirety as follows:
6.12 Restricted Payments and Restricted Investments.
(a) Limitation on Restricted Payments and Restricted
Investments. The Company shall not, and shall not permit any Subsidiary
to, at any time declare or make or incur any liability to declare or
make any Restricted Payment (other than Restricted Payments comprised
solely of Distributions to the Company or a Wholly-Owned Subsidiary in
respect of the capital stock of a Subsidiary ("Permitted
Distributions")) or make or authorize any Restricted Investment, unless
EXHIBIT A-1
(i) immediately after giving effect to the proposed
Restricted Payment or Restricted Investment, the aggregate
amount of Supplemental Restricted Investments made or
authorized after the Closing Date does not exceed fifty
million dollars ($50,000,000) and the aggregate amount of all
Restricted Payments (other than Permitted Distributions) and
Restricted Investments (other than Supplemental Restricted
Investments) made or authorized after the Closing Date does
not exceed the sum of
(A) twenty-five million dollars
($25,000,000); plus
(B) twenty-five percent (25%) of the
aggregate Consolidated Net Income (or, in case such
aggregate Consolidated Net Income shall be a deficit,
minus one hundred percent (100%) of such deficit) for
the period commencing on the Closing Date and ending
on the date of such proposed transaction; plus
(C) one hundred percent (100%) of the
aggregate net cash proceeds received by the Company
after the Closing Date from the issuance or sale of
shares of capital stock of the Company (other than
Mandatory Redeemable Stock);
ss.6. Section 9.1 of the Existing Note Purchase Agreement is hereby
amended to add the following definition of "Senior Subordinated Debt" in the
appropriate alphabetical position in such section:
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 $125,000,000 issue of
Senior Subordinated Notes due 2007.
ss.7. Section 9.1 of the Existing Note Purchase Agreement is hereby
amended to add the following definition of "Supplemental Restricted Investment"
in the appropriate alphabetical position in such section:
Supplemental Restricted Investment -- means a Restricted Investment, or
any part thereof, which the Company shall have designated in writing to each of
the holders of the Notes as of the date such Restricted Investment is made as a
"Supplemental Restricted Investment."
ss.8. Section 9.1 of the Existing Note Purchase Agreement is hereby
amended to add the following definition of "Consolidated Senior Funded Debt" in
the appropriate alphabetical order in such section:
Consolidated Senior Funded Debt -- means, at any time, the result of
(a) Consolidated Funded Debt at such time minus (b) Senior Subordinated Debt at
such time.
ss.9. The definition of "Consolidated Current Liabilities" is
hereby amended to read in its entirety as follows:
Consolidated Current Liabilities -- means, at any time, the aggregate
amount of current liabilities of the Company and the Subsidiaries as would be
shown on a consolidated balance
EXHIBIT A-2
sheet for such Persons at such time plus (to the extent not otherwise included
therein) liabilities in respect of Excluded Funded Debt.
ss.10. The definition of "Funded Debt" in Section 9.1 of the
Existing Note Purchase Agreement is hereby amended to read in its entirety as
follows:
Funded Debt -- means, at any time, with respect to any Person, without
duplication:
(a) All Debt of such Person (including without limitation, the
current portion thereof) that by its terms or by the terms of any
instrument or agreement relating thereto matures, or that is otherwise
payable or unpaid, more than one (1) year from, or is directly or
indirectly renewable or extendable at the option of such Person to a
date more than one (1) year (including, without limitation, an option
of the debtor under revolving credit or similar agreement of obligating
the lender or lenders to extend credit over a period of more than one
(1) year) from, the date of the creation of such Debt (notwithstanding
that such Debt may be under certain contingencies payable on demand or
within one (1) year after such date of creation) provided that, with
respect to the Company and the Subsidiaries, such Debt shall not
include (to the extend otherwise included therein) Excluded Funded
Debt;
(b) all Capital Lease Obligations of such Person; and
(c) all Debt of such Person of the type specified (e) of the
definition of "Debt" provided such Debt of such Person is in respect of
or in support of Funded Debt of another Person.
ss.11. Section 9.1 of the Existing Note Purchase Agreement is hereby
amended to delete the definition of "Deemed Funded Debt" and to amend the
definition of "Excluded Funded Debt" to read in its entirety as follows:
Excluded Funded Debt -- means, at any time, the aggregate amount of the
Debt of the Company and the Subsidiaries outstanding at such time under the
Credit Facility.
EXHIBIT A-3
EXHIBIT B
FORM OF CONFIRMATION OF HOLDERS' SATISFACTION
Confirmation of Holders' Satisfaction
To: Smithfield Foods, Inc. (the "Company")
Date: January 27, 1998
Re: Amendment Number Two, dated as of December 1, 1997, to the
separate Note Purchase Agreements each dated as of July 15,
1996 (the "Amendment Agreement"), among the Company, the
Guarantors and other Persons party thereto (such other Persons
herein collectively referred to as the "Holders")
Ladies and Gentlemen:
The undersigned (the "Holders") are the Holders referred to above. In
accordance with Section 3.7 of the Amendment Agreement, each Holder hereby
confirms that, based on certain warranties, representations and certifications
made, and certain documents delivered, by or on behalf of the Company and the
Guarantors pursuant to the Amendment Agreement, such Holder is satisfied with
respect to the conditions specified in Sections 3.1, 3.4, 3.5 and 3.6 of the
Amendment Agreement.
This confirmation shall not be construed as a waiver of any rights or
remedies that the Holder may have in the event that any such warranty,
representation or certification made by the Company or any of the Guarantors
shall have been false or misleading when made.
[HOLDERS]
By________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
SMITHFIELD FOODS, INC.
By________________________________
Name:
Title:
EXHIBIT B-1
SCHEDULE 1
Amendment Fees
=======================================================================================================================
Name of Entity Amount of Fee Contact Name and Address
=======================================================================================================================
▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life $10,000.00 ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Insurance Company ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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The Northwestern Mutual Life $10,000.00 ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Insurance Company The Northwestern Mutual Life
Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------
The Variable Annuity Life $8,666.67 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Insurance Company American General Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Independent Life and Accident $1,333.33
Insurance Company
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Academy Life Insurance $2,857.14 ▇▇▇▇ ▇▇▇▇, Esq.
Company ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Peoples Security Life $7,142.86
Insurance Company
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United of Omaha Life $10,000.00 ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Insurance Company Mutual of Omaha
Mutual of ▇▇▇▇▇ ▇▇▇▇▇
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Massachusetts Mutual Life $10,000.00 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Insurance Company Massachusetts Mutual Life
Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SCHEDULE 1 - 1
Execution Copy
AMENDMENT ▇▇. ▇
▇▇▇▇▇▇▇▇▇ ▇▇. ▇ dated as of November 19, 1997, among
SMITHFIELD FOODS, INC., a corporation duly organized and validly existing under
the laws of the State of Virginia (the "Borrower"); each of the Subsidiaries of
the Borrower identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors" and, together with the Borrower, the
"Obligors"); each of the lenders that is a signatory hereto (individually, a
"Lender" and, collectively, the "Lenders"); and THE CHASE MANHATTAN BANK as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
The Borrower, the Subsidiary Guarantors, the Lenders and the
Administrative Agent are parties to a Five-Year Credit Agreement dated as of
July 15, 1997 (as heretofore modified and supplemented and in effect on the date
hereof, the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for extensions of credit to be made by said Lenders to the Borrower in
an aggregate principal or face amount not exceeding $300,000,000.
The Borrower, the Subsidiary Guarantors, the Lenders and the
Administrative Agent wish to amend the Credit Agreement in certain respects, and
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined
in this Amendment No. 1, terms defined in the Credit Agreement
are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of
the conditions precedent specified in Section 4 below, but
effective as of the date hereof, the Credit Agreement shall be
amended as follows:
2.01. References in the Credit Agreement (including references
to the Credit Agreement as amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed
to be references to the Credit Agreement as amended hereby.
2.02. The definition of "Capital Expenditures" in Section 1.01
of the Credit Agreement shall be amended to read as follows:
Amendment ▇▇. ▇
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"▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇" means, with respect to any Person, for
any period, all expenditures made and liabilities incurred during such
period for the acquisition of assets (including any replacement in the
ordinary course of business without reduction for sales, retirements or
replacements) which are not, in accordance with GAAP, treated as
expense items for such Person in the year made or incurred or as a
prepaid expense applicable to a future year or years, and shall include
all Capital Lease Obligations, but shall not include expenditures made
or liabilities incurred during such period for Acquisitions or
Investments. The amount of Capital Expenditures in any period shall be
calculated without duplication in accordance with GAAP. Notwithstanding
the foregoing, with respect to the acquisition of replacement sows by
the Borrower or any of its Subsidiaries in the ordinary course of
business, the amount included in Capital Expenditures shall be the
acquisition cost of such sows, reduced by the proceeds received by the
Borrower or any of its Subsidiaries from the sale of the replaced sows.
2.03. Section 1.01 of the Credit Agreement shall be amended by
adding the following new definitions and inserting the same in the appropriate
alphabetical locations:
"'Joint Venture' means any Investment by the Borrower or any
of its Subsidiaries as a joint venturer or partner in any Person (other
than a Subsidiary) principally engaged in a business in which the
Borrower and its Subsidiaries are permitted by Section 6.03(b) to be
engaged.
"'Net Cash Proceeds' means the aggregate cash proceeds
received by the Borrower from its issuance of the Senior Subordinated
Notes, net of transaction fees, costs and expenses incurred by the
Borrower in connection with such issuance."
"'Senior Subordinated Notes' means senior subordinated notes
issued by the Borrower prior to December 31, 1998 having the material
terms and conditions set forth in the offering memorandum relating
thereto, a copy of which has been furnished to the Lenders prior to
November __, 1997, and any additional series of senior subordinated
notes issued by the Borrower at the same rate of interest, and having
substantially the same material terms and conditions, as such senior
subordinated notes on or before the first anniversary of the date of
issuance of such senior subordinated notes, as the same shall, subject
to
Amendment No. 1
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Section 6.14, be modified and supplemented and in effect
from time to time."
2.04. Sections 6.04(b), (c) and (e) of the Credit Agreement
shall be amended to read as follows:
"(b) Investments by the Borrower existing on the date hereof
in the capital stock of its Subsidiaries and Investments by the
Borrower existing on the date hereof described in Part B of Schedule
3.14;"
"(c) Investments made by the Borrower in any Subsidiary
and made by any Subsidiary in the Borrower or any other
Subsidiary;"
"(e) Investments constituting Acquisitions or Joint
Ventures permitted by Section 6.12(f);"
2.05. The proviso contained in Section 6.08 of the Credit
Agreement shall be amended by (a) substituting a comma for "and" immediately
preceding clause (vi) thereof and (b) adding a new clause (vii) thereto reading
as follows:
"and (vii) clause (a) of the foregoing shall not apply to any
requirement that obligations of the Borrower or its Subsidiaries, as
the case may be, that are pari passu or subordinated in right of
payment to the Senior Subordinated Notes or the guaranties by
Subsidiaries of the Borrower in respect thereof, as the case may be,
may not be secured unless the Senior Subordinated Notes and/or such
guaranties are at least equally and ratably secured"
2.06. Section 6.12(c) of the Credit Agreement shall be amended
to read as follows:
"(c) The Borrower will not permit the ratio of Consolidated
Total Liabilities to Consolidated Tangible Net Worth on any date to be
more than the ratio set forth below opposite the period during which
such date falls:
Period Ratio
From the Effective Date through
May 2, 1998 3.50 to 1
From May 3, 1998 and thereafter 3.25 to 1
2.07. Section 6.12(f) of the Credit Agreement shall be amended
to read as follows:
Amendment No. 1
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"(f) (1) Except as permitted by Section 6.12(f)(2) below, the
Borrower will not permit the sum (without duplication) of (i) Capital
Expenditures made by the Borrower and its Subsidiaries in any fiscal
year of the Borrower plus (ii) the Aggregate Consideration for all
Acquisitions made by the Borrower and its Subsidiaries in such fiscal
year plus (iii) an amount (not less than zero) equal to any net
increase from the beginning of such fiscal year through the end of such
fiscal year in the aggregate amount of Investments in Joint Ventures,
to exceed the higher of (x) the sum of Consolidated Net Income plus
depreciation for the Borrower and its Subsidiaries for such fiscal year
or (y) $100,000,000."
(2) The sum (without duplication) of (i) Capital Expenditures
made by the Borrower and its Subsidiaries in any fiscal year of the
Borrower plus (ii) the Aggregate Consideration for all Acquisitions
made by the Borrower and its Subsidiaries in such fiscal year plus
(iii) an amount (not less than zero) equal to any net increase from the
beginning of such fiscal year through the end of such fiscal year in
the aggregate amount of Investments in Joint Ventures may exceed the
limit established by Section 6.12(f)(1), provided that the aggregate
amount of all such excesses permitted by this Section 6.12(f)(2) for
all fiscal years of the Borrower shall not exceed the Net Cash Proceeds
of the Senior Subordinated Notes received by the Borrower at or prior
to the time of determination."
2.08. Article VI of the Credit Agreement is hereby amended by
adding the following new Section 6.14 and inserting the same in the appropriate
numerical location:
"SECTION 6.14. Senior Subordinated Notes.
If any Default then exists or would result therefrom, the Borrower
shall not, and shall not permit any of its Subsidiaries to,
purchase, redeem, retire or otherwise acquire for value, or
set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or
other acquisition of, or make any voluntary payment or
prepayment of the principal of or interest on, or any other
amount owing in respect of, the Senior Subordinated Notes,
except (subject to the terms of subordination thereof) for
regularly scheduled payments of principal and interest in
respect thereof required pursuant to the terms) hereof. The
Borrower shall not, and shall not permit any of its
Subsidiaries to, consent to any modification, supplement or
waiver of any of the provisions of any agreement, instrument
Amendment No. 1
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or other document evidencing or relating to the Senior Subordinated
Notes without the prior consent of the Administrative Agent (with the
approval of the Required Lenders) if such modification, supplement or
waiver would be adverse in any material respect to the interests of the
Borrower, any of its Subsidiaries or any of the Lenders."
Section 3. Representations and Warranties. The Borrower
represents and warrants to the Lenders that the representations and warranties
set forth in Article III of the Credit Agreement are true and complete on the
date hereof as if made on and as of the date hereof and as if each reference in
said Article III to "this Agreement" included reference to this Amendment No. 1.
Section 4. Conditions Precedent. The amendments to the Credit
Agreement set forth in Section 2 hereof shall become effective, as of the date
hereof, upon (a) the execution and delivery of this Amendment No. 1 by the
Obligors, the Required Lenders and the Administrative Agent and (b) in the case
of the effectiveness of the amendment set forth in Section 2.06 hereof, the
issuance by the Borrower of the Senior Subordinated Notes referred to in Section
2.03 hereof in an aggregate principal amount of not less than $100,000,000.
Section 5. Acknowledgment. The Administrative Agent
acknowledges that it has received the projections and certificate referred to in
Section 6.01(f) of the Credit Agreement sufficient to allow the Borrower to
issue Senior Subordinated Notes in an aggregate principal amount of up to
[$125,000,000] bearing interest at a rate not exceeding 10% per annum.
Section 6. Miscellaneous. Except as herein provided, the
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 1 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the law of the State of New York.
Amendment No. 1
- 6 -
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed and delivered as of the day and year first
above written.
SMITHFIELD FOODS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President,
Secretary and Treasurer
THE SMITHFIELD PACKING COMPANY,
INCORPORATED
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ OF SMITHFIELD, LTD.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇ MEAT GROUP, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
Amendment No. 1
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▇▇▇▇▇'▇ OF CAROLINA, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇'▇ OLD FASHIONED COUNTRY
HAMS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
VALLEYDALE FOODS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
COPAZ PACKING CORPORATION
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SUNNYLAND, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SMITHFIELD PACKING-LANDOVER, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
Amendment ▇▇. ▇
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▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK,
individually and as
Administrative Agent
By_________________________
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By_________________________
Name:
Title:
By_________________________
Name:
Title:
AGRIBANK, FCB
By_________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By_________________________
Name:
Title:
By_________________________
Name:
Title:
Amendment ▇▇. ▇
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▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BRANCH
By_________________________
Name:
Title:
By_________________________
Name:
Title:
NATIONSBANK, N.A.
By_________________________
Name:
Title:
FBS AG CREDIT, INC.
By_________________________
Name:
Title:
SUNTRUST BANK, ATLANTA
By_________________________
Name:
Title:
By_________________________
Name:
Title:
Amendment ▇▇. ▇
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▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇ TRUST
COMPANY
By_________________________
Name:
Title:
DRESDNER BANK AG
By_________________________
Name:
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS, PCA
By_________________________
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By_________________________
Name:
Title:
SANWA BANK LIMITED
By_________________________
Name:
Title:
Amendment ▇▇. ▇
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▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ BRANCH
By_________________________
Name:
Title:
Amendment No. 1
