Execution Copy
AMENDMENT NO. 1 to Exhibit 4.5(A)
AMENDMENT NO. 1 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 364-Day 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 amount not exceeding $50,000,000.
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:
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"Capital Expenditures" 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
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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:
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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
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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.
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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: Aaron D. Trub
Title: Vice President,
Secretary and Treasurer
THE SMITHFIELD PACKING COMPANY,
INCORPORATED
By_________________________
Name: Aaron D. Trub
Title: Secretary
GWALTNEY OF SMITHFIELD, LTD.
By_________________________
Name: Aaron D. Trub
Title: Secretary
PATRICK CUDAHY INCORPORATED
By_________________________
Name: Aaron D. Trub
Title: Secretary
JOHN MORRELL & CO.
By_________________________
Name: Aaron D. Trub
Title: Secretary
LYKES MEAT GROUP, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
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BROWN'S OF CAROLINA, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
HANCOCK'S OLD FASHIONED COUNTRY
HAMS, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
VALLEYDALE FOODS, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
COPAZ PACKING CORPORATION
By_________________________
Name: Aaron D. Trub
Title: Secretary
SUNNYLAND, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
SMITHFIELD PACKING-LANDOVER, INC.
By_________________________
Name: Aaron D. Trub
Title: Secretary
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THE CHASE MANHATTAN 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:
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DG BANK, DEUTSCHE
GENOSSENSCHAFTSBANK,
CAYMAN ISLANDS 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:
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BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By_________________________
Name:
Title:
DRESDNER BANK AG
By_________________________
Name:
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS, PCA
By_________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK
By_________________________
Name:
Title:
SANWA BANK LIMITED
By_________________________
Name:
Title:
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THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By_________________________
Name:
Title: