Subscription Agreement - Smithfield Foods Inc. and Sumitomo Corp. of America
SUBSCRIPTION AGREEMENT
DATED AS OF OCTOBER 26, 1995
BETWEEN
SMITHFIELD FOODS, INC.,
A DELAWARE CORPORATION
AND
SUMITOMO CORPORATION OF AMERICA,
A NEW YORK CORPORATION
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.......................................... 4
Section 1.2. General Construction................................. 5
ARTICLE II
PURCHASE AND SALE
Section 2.1. Purchase by the Buyer................................ 5
Section 2.2. Closing.............................................. 5
ARTICLE III
CONDITIONS TO PURCHASE AND SALE
Section 3.1. Conditions to the Buyer's Obligation................. 6
Section 3.2. Conditions to the Company's Obligation............... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Section 4.1. Corporate Existence and Power........................ 7
Section 4.2. Corporate and Governmental Authorization;
Binding Effect............................... 8
Section 4.3. Shares............................................... 8
Section 4.4. Offering of Securities............................... 8
Section 4.5. No Conflicting Requirements............................9
Section 4.6. Broker's, Finder's and Investment Banking
Fees and Commissions......................... 9
Section 4.7. No Material Misstatement or Omission................. 9
Section 4.8. Governmental Consents................................ 9
Section 4.9. Reliance..............................................10
Section 4.10. Copies of Certain Reports............................ 10
ARTICLE V
REPRESENTATIONS AND WARRANTIES
BY BUYER
Section 5.1. Corporate Existence and Power........................ 10
Section 5.2. Corporate and Other Authorization;
Binding Effect.............................................. 10
Section 5.3. Intentionally Omitted................................ 10
Section 5.4. No Conflicting Requirements.......................... 10
Section 5.5. Securities Law Compliance............................ 11
Section 5.6. Investment Intent, Etc............................... 11
Section 5.7. Investigation........................................ 11
Section 5.8. Reliance............................................. 11
--------
(1) The Table of Contents is not part of the document.
<PAGE>
ARTICLE VI
FURTHER ASSURANCES
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1. Certain Definitions.................................. 12
Section 7.2. Demand Registration.................................. 13
Section 7.3. Incidental Registration.............................. 13
Section 7.4. Registration Procedures.............................. 14
Section 7.5. Underwritten Offerings................................17
Section 7.6. Preparation; Reasonable Investigation................ 18
Section 7.7. Indemnification...................................... 18
Section 7.8. Adjustments Affecting Registrable
Securities................................... 20
Section 7.9. Rule 144..............................................21
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Notices.............................................. 21
Section 8.2. No Waiver............................................ 22
Section 8.3. Amendments and Waivers............................... 22
Section 8.4. Restrictive Legends.................................. 22
Section 8.5. Governing Law........................................ 23
Section 8.6. Successors and Assigns............................... 23
Section 8.7. Counterparts; Effectiveness...........................24
Section 8.8. Survival of Representation, Warranties
and Covenants................................ 24
Exhibit A - Form of Certificate of Designations of Series C 6 3/4% Cumulative
Convertible Preferred Stock, par value $1.00 per share, of the
Company
Exhibit B - Investment Letter
Exhibit C - Form of Legal Opinion
<PAGE>
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT is dated as of October 26, 1995 and
is between SMITHFIELD FOODS, INC., a Delaware corporation (the "Company"), and
SUMITOMO CORPORATION OF AMERICA, a New York corporation ("Buyer".)
In consideration of the promises, mutual covenants, conditions
and representations and warranties herein contained, the Buyer desires to
purchase from the Company, and the Company desires to sell to the Buyer, the
Shares under the terms and conditions set forth below. Accordingly, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Articles of Incorporation" means the Composite Certificate of
Incorporation of the Company, including the certificate of designations to be
filed for the Series C Preferred Shares, as amended or amended and restated to
the Closing Date.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in Richmond, Virginia or New York, New York,
are authorized by law to close.
"Capital Stock" means the Common Shares, the Series A Preferred
Shares, the Series B Preferred Shares, the Series C Preferred Shares and any
other class or series of common or preferred shares to be created in the future
of the Company.
"Certificate of Designations" means the Company's certificate of
designations for the Series C Preferred Shares to be filed promptly after the
Closing with the Secretary of State of the State of Delaware in substantially
the form of Exhibit A hereto.
"Closing" and "Closing Date" have the respective meanings set
forth in Section 2.2.
"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
<PAGE>
"Common Shares" means the Common Stock, par value $.50 per share,
of the Company.
"Company" means Smithfield Foods, Inc., a Delaware corporation,
and its successors and assigns.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute.
"Series A Preferred Shares" means the Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company.
"Series B Preferred Shares" means the Series B 6 3/4% Cumulative
Convertible Preferred Stock, par value $1.00 per share, of the Company.
"Series C Preferred Shares" means the Series C 6 3/4% Cumulative
Convertible Preferred Stock, par value $1.00 per share, of the Company.
"Shares" means any Series C Preferred Shares issued and sold
pursuant to this Agreement.
SECTION 1.2. GENERAL CONSTRUCTION. The words "herein", "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole, including the Exhibits, as the same may from time to time be amended,
modified or supplemented, and not to any particular section, subsection,
paragraph or clause contained in this Agreement. Wherever from the context it
appears appropriate, each term stated either in the singular or plural shall
include the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the feminine and the
neuter.
ARTICLE II
PURCHASE AND SALE
SECTION 2.1. PURCHASE BY THE BUYER. On the terms and conditions
set forth in this Agreement, the Company agrees to issue and sell to the Buyer,
and the Buyer agrees to subscribe for and purchase, two thousand (2,000) Series
C Preferred Shares. The purchase price shall be $10,000 per Share, resulting in
an aggregate purchase price of $20,000,000; and such aggregate purchase price
shall be payable by the Buyer's due delivery to the order of the Company of same
day funds in such amount.
<PAGE>
SECTION 2.2. CLOSING. The closing ("Closing") of the purchase and
sale of the 2,000 Shares shall take place on October 25, 1995 by wire transfer
of funds and telecopied exchange of executed closing documents (with original
executed closing documents to be exchanged promptly thereafter); the Closing
shall be deemed to take place at the offices of McGuire, Woods, Battle and
Boothe, L.L.P., 901 E. Cary Street, Richmond, Virginia 23219 (phone (804)
775-1000, telecopier (804) 775-1061) or at such other place and/or on such other
date to which the Company and the Buyer shall have agreed (such date being
herein referred to as the "Closing Date"). At the Closing, the Buyer shall make
payment of the aggregate purchase price for the Shares, and the Company will
promptly thereafter file the Certificate of Designations, issue a legended
certificate in the name of the Buyer representing the Shares and make an
appropriate corresponding entry in the Company's stock ledger.
ARTICLE III
CONDITIONS TO PURCHASE AND SALE
SECTION 3.1. CONDITIONS TO THE BUYER'S OBLIGATION. The obligation of the Buyer
to purchase the Shares is subject to the satisfaction on the Closing Date of the
following conditions in all material respects:
(i) the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of
the Closing Date;
(ii) on the Closing Date, the Company shall deliver to the
Buyer a certificate signed by its secretary or any assistant secretary
as to the Company's Composite Certificate of Incorporation, as amended,
as to its Bylaws, as to the resolutions of the Company's Board of
Directors relating to the issue and sale of the Shares, this
Subscription Agreement and the distributorship agreement being
contemporaneously executed between the parties hereto and/or their
affiliates, and as to the due authorization, election, incumbency and
signatures of the Company officers signing this Subscription Agreement,
such distributorship agreement or any related document; and as of the
Closing Date the Company shall have commenced its efforts promptly to
file the Certificate of Designations and deliver a duly executed
certificate for the Shares to be issued to the Buyer hereunder,
registered in the name of the Buyer;
(iii) the Company shall have performed all of its
obligations hereunder and complied with all conditions herein required
to be performed or complied with by the Company on or before the
Closing;
<PAGE>
(iv) all authorizations, approvals, and permits, if any,
of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance
and sale of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing;
(v) on or before the Closing Date, the Company shall
deliver to the Buyer copies of any consents, waivers or amendments which
may be necessary under the Company's various loan agreements and debt
instruments for the Company to enter into and perform its obligations
under this Subscription Agreement; and
(vi) the Buyer shall have received from McGuire, Woods,
Battle & Boothe, L.L.P., counsel for the Company, an opinion, dated as
of the Closing, substantially in the form attached as Exhibit C hereto.
SECTION 3.2. CONDITIONS TO THE COMPANY'S OBLIGATION. The
obligation of the Company to sell the Shares is subject to the satisfaction on
the Closing Date of the following conditions in all material respects:
(i) the representations and warranties of the Buyer contained
in this Agreement shall be true and correct on and as of the Closing
Date;
(ii) the Buyer shall have duly executed and delivered to
the Company an investment letter in the form attached hereto as Exhibit
B and a certificate signed by its secretary or assistant secretary as to
the same matters (to the extent appropriate and reasonable) to be
addressed in the corresponding Company certificate required by Section
3.1(ii) above; and
(iii) at the Closing, the Buyer shall deliver the
aggregate purchase price for the Shares to the Company by wire transfer
to an account designated by the Company.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer as of the date
hereof that:
SECTION 4.1. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted in all material respects; and the Company has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction.
SECTION 4.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION; BINDING
EFFECT. The execution, delivery and performance by the Company of this Agreement
and the issuance and delivery of any Shares pursuant to this Agreement are
within the corporate and other power of the Company, have been duly authorized
by all necessary corporate and other action of the Company and its stockholders,
require no action by or in respect of, or filing with, any governmental body,
agency or official (except as may be required or appropriate to secure
exemptions under the Securities Act and under applicable state securities or
Blue Sky laws in respect of the unregistered offer and sale of Shares to be made
hereby), will not contravene the Articles of Incorporation or ByLaws of the
Company and do not and will not contravene in a material manner, or constitute
(with or without the giving of notice or lapse of time or both) a material
default under, any provision of applicable law or regulation or of any mortgage,
indenture, instrument, agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or result in the creation or imposition of
any material lien on any asset of the Company. This Agreement has been duly
authorized, executed and delivered by and constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles.
SECTION 4.3. SHARES. The Shares have been duly authorized and,
when issued, sold and delivered in accordance with this Agreement, will be,
validly issued, fully paid and nonassessable and will have on issuance the
rights and preferences provided in the Certificate of Designations for Series C
Preferred Shares. The Common Shares issuable upon conversion of the Series C
Preferred Shares have been (or prior to the Closing will be) duly and validly
reserved and, upon issuance in accordance with the conversion provisions of the
Series C Preferred Shares, will be duly authorized, validly issued, fully paid
and nonassessable.
<PAGE>
SECTION 4.4. OFFERING OF SECURITIES. Neither the Company nor any
Person acting on its behalf has, directly or indirectly, offered any shares of
the Capital Stock or any similar security of the Company for sale to, or
solicited any offers to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, anyone other than the Buyer and certain
other accredited or sophisticated investors, and neither the Company nor any
Person acting on its behalf has taken or will take any action that would cause
the Company's offer, issuance or sale of any Shares hereby to violate the
provisions of Section 5 of the Securities Act or any securities or Blue Sky law
of any applicable jurisdiction.
SECTION 4.5. NO CONFLICTING REQUIREMENTS. The Company is not in
violation of or in default under any term or provision of any charter, by-law,
mortgage, indenture, agreement, instrument, statute, rule, regulation, judgment,
decree, order, writ or injunction applicable to it, such that such violations or
defaults in the aggregate might materially and adversely affect the financial
condition, results of operations, business, properties or prospects of the
Company or the ability of the Company to perform its obligations under this
Agreement or the Articles of Incorporation.
SECTION 4.6. BROKER'S, FINDER'S AND INVESTMENT BANKING FEES AND
COMMISSIONS. No broker's, finder's or investment banking fee or commission has
been or will be payable, or asserted to be payable, by the Company with respect
to the issuance and sale of the Shares or any transaction contemplated thereby
or ancillary thereto, and the Company agrees that all such fees shall be paid by
it and that it will hold Buyer harmless from any claim, demand or liability for
any such broker's, finder's or investment banking fees or commissions incurred
or alleged to have been incurred in connection with any transaction referred to
above in this Section 4.6.
SECTION 4.7. NO MATERIAL MISSTATEMENT OR OMISSION. Since April
30, 1995 (the date on which the Company's most recently ended fiscal year
concluded), the Company has timely filed all reports (including its Annual
Report on Form 10-K for such fiscal year, its Proxy Statement for Annual Meeting
on August 30, 1995, its Quarterly Report on Form 10-Q for the fiscal quarter
ended July 30, 1995 and its Current Report on Form 8-K dated October 6, 1995)
required to be filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); when filed,
each of such reports conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission thereunder; and
such reports taken as a whole do not, and will not at and as of the Closing
Date, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in light of the circumstances under which they were made.
<PAGE>
SECTION 4.8. GOVERNMENTAL CONSENTS. All consents, approvals,
orders or authorizations of, or registrations, qualifications, designations,
declarations or filings with any federal or state governmental authority on the
part of the Company required in connection with the consummation of the
transactions contemplated by this Agreement shall have been obtained prior to,
and be effective as of, the Closing, except for any notices of sale required to
be filed with the Commission pursuant to Regulation D promulgated under the
Securities Act or with any state securities law authority pursuant to applicable
Blue Sky laws.
SECTION 4.9. RELIANCE. The Company acknowledges that the Buyer
is entering into this Agreement in reliance upon the Company's representations
and warranties contained herein.
SECTION 4.10. COPIES OF CERTAIN REPORTS. So long as the Buyer
holds any Shares, the Company will furnish promptly to the Buyer copies of all
annual and quarterly reports and proxy statements mailed hereafter by the
Company to holders of its Common Stock from time to time, and copies of all Form
10-Ks, Form 10-Qs and Form 8-Ks filed hereafter by the Company from time to time
with the Commission.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
BY BUYER
The Buyer represents and warrants to the Company as of the date
hereof that:
SECTION 5.1. CORPORATE EXISTENCE AND POWER. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of New York.
SECTION 5.2. CORPORATE AND OTHER AUTHORIZATION; BINDING EFFECT.
The execution, delivery and performance by the Buyer of this Agreement are
within the corporate and other power of the Buyer, have been duly authorized by
all necessary corporate and other action of the Buyer and any other relevant
person or entity, require no action by or in respect of, or filing with, any
governmental body, agency or official (except as may be required or appropriate
to secure exemptions under the Securities Act and under applicable state
securities or Blue Sky laws in respect of the unregistered offer and sale of
Shares to be made hereby), and will not contravene the articles of incorporation
or by-laws of the Buyer. This Agreement has been duly authorized, executed and
delivered by and constitutes a valid and binding agreement of the Buyer,
enforceable against the Buyer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
<PAGE>
SECTION 5.3. INTENTIONALLY OMITTED.
SECTION 5.4. NO CONFLICTING REQUIREMENTS. The Buyer's
performance of its obligations under this Agreement will not violate any term or
provision of any the Buyer's certificate of incorporation or by-laws or any
statute, rule, regulation, judgment, decree, order, writ or injunction
applicable to the Buyer, such that such violations in the aggregate might
materially and adversely affect the ability of the Buyer to perform its
obligations under this Agreement.
SECTION 5.5. SECURITIES LAW COMPLIANCE. The Buyer acknowledges
that the Shares have not been offered or sold to the Buyer by any form of
general solicitation or general advertising. The Buyer agrees that it will not,
directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise
dispose of any Shares (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of any Shares), except in compliance with the
Securities Act and the rules and regulations of the Commission thereunder and
with any applicable state securities laws, and except in compliance with Section
8.6 of this Agreement.
SECTION 5.6. INVESTMENT INTENT, ETC. The Buyer is subscribing the
Shares for its own account for investment and not with a view to, or for resale
in connection with, any distribution thereof, and it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investment in the Shares and is able to bear the
economic risk of such investment for an indefinite period. It is an "accredited
investor" (as such term is defined in Rule 501 of Regulation D of the Rules and
Regulations of the Commission thereunder) because the Buyer is a corporation,
not formed for the specific purpose of acquiring the Series C Preferred Shares,
with total assets in excess of $5,000,000. The Buyer is aware that none of the
Shares or the Common Shares into which the Shares may be converted have been
registered under the Securities Act or any state securities law, that the Shares
and such Common Shares must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available and that, except
as may be provided in this Agreement the Company is under no obligation to
register any of the Shares or such Common Shares under the Securities Act or any
state securities law. The Buyer further acknowledges that there is not, nor is
there expected to be, any market for the purchase and sale of the Shares.
<PAGE>
SECTION 5.7. INVESTIGATION. Because the transactions contemplated
by the Agreement have been negotiated, the Buyer has not been furnished with any
formal offering memorandum or prospectus, but to the best of the Buyer's
knowledge the Buyer has received from the Company copies of all such information
as the Buyer or its agents have requested. Representatives of the Buyer have had
full opportunity to examine the financial and business affairs of the Company
and to ask questions of its management. Notwithstanding such opportunities and
examinations, the Buyer disclaims any reliance upon any Company financial
projections beyond the extent to which such reliance is expressly contemplated
therein.
SECTION 5.8. RELIANCE. The Buyer acknowledges that the Company
is entering into this Agreement in reliance upon the Buyer's representations and
warranties contained herein.
ARTICLE VI
FURTHER ASSURANCES
From time to time, without further consideration, whether before
or after the Closing, each of the parties hereto, at its own expense, will
execute and deliver such documents to the other party hereto and take such steps
as such other party may reasonably request to facilitate the consummation of the
transactions contemplated hereby.
ARTICLE VII
REGISTRATION RIGHTS
SECTION 7.1. CERTAIN DEFINITIONS. As used in this Article VII
or elsewhere in this Agreement, the following terms have the following meanings:
"Exchange Act" means the Securities Exchange Act of 1934 or any
similar federal statute at the time in effect, and any reference to a particular
section of such Act shall include a reference to the comparable section, if any,
of any such similar federal statute.
"Registrable Securities" means a collective reference to the
Common Shares to be issued upon conversion of the Shares pursuant to the terms
of the Certificate of Designations and this Agreement; provided, however, that
any particular Registrable Securities shall cease to be such when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) they shall have
been distributed to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, (iii) they shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force or (iv) they shall have ceased to be
outstanding.
<PAGE>
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Article VII, including, without
limitation, all registration, filing and similar expenses, all messenger and
delivery expenses, the reasonable fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of any
special audits or "comfort" letters required by or incident to such performance
and compliance, printing costs, the reasonable fees and disbursements of counsel
retained by the holder(s) of the Registrable Securities being registered and any
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions.
SECTION 7.2. DEMAND REGISTRATION.
(a) Right to Request Registration. At any time upon Buyer's
written request to register under the Securities Act all or part of Buyer's
Registrable Securities and specifying the intended method or methods of
disposition thereof (provided, however, that the Registrable Securities in
respect of which such request is made shall represent either (i) all of the
outstanding Series C Preferred Shares held by the Buyer or (ii) at least $1
million market value based on the NASDAQ National Market System quotations in
respect of the Common Shares (or, if no such quotations are available at the
time of such request, based on a customary and reasonable valuation method
determined by the Company)), the Company thereupon will use its best efforts to
effect the registration under the Securities Act of the Registrable Securities
which the Company has been so requested to register by Buyer, for disposition in
accordance with the intended method or methods of disposition stated in such
request provided that if the Company shall have previously effected a
registration pursuant to this Section 7.2, the Company shall not be required to
effect a registration pursuant to this Section 7.2 until a period of three
months shall have elapsed from the effective date of the most recent such
previous registration.
(b) Registration Statement Form. Each registration requested
pursuant to this Section 7.2 shall be effected by the filing of an appropriate
registration form (giving preference to Form S-3 to the extent available to the
Company at the relevant time and for the relevant registration).
<PAGE>
(c) Expenses. The Company will pay all Registration Expenses in
connection with the very first registration of Registrable Securities requested
pursuant to this Section 7.2; Buyer will pay all Registration Expenses in
connection with any subsequent registration of Registrable Securities requested
pursuant to this Section 7.2.
SECTION 7.3. INCIDENTAL REGISTRATION.
(a) Right to Include Registrable Securities. If at any time or
times, the Company intends to file a registration statement under the Securities
Act for the registration with the Commission of an underwritten offering by the
Company on its behalf of the Company's Common Shares, the Company shall notify
Buyer at least 45 days prior to each such filing of the Company's intention to
file such a registration statement. Such notice shall state the number of shares
proposed to be registered thereby. If Buyer notifies the Company within 15 days
after receipt of such notice from the Company of its desire to have included in
such registration statement any of its Registrable Securities, then the Company
shall cause such shares to be included in such registration statement. No
registration of Registrable Securities effected under this Section 7.3 shall
relieve the Company of its obligation to effect registration of Registrable
Securities upon Buyer's request pursuant to Section 7.2. The Company may in its
discretion withdraw any Registration Statement filed pursuant to this Section
7.3 subsequent to its filing without liability to Buyer.
(b) Payment of Expenses. The Company will pay all Registration
Expenses in connection with any registration of Registrable Securities requested
pursuant to this Section 7.3; provided, however, that the Buyer shall pay the
fees and disbursements of the Buyer's own counsel and any federal and state
registration fees in respect of such Registrable Securities.
(c) Limitation. In the event that the managing underwriter for
any such offering described in this Section 7.3 notifies the Company that, in
good faith, it is able to proceed with the proposed offering only with respect
to a smaller number (the "Maximum Number") of securities and Registrable
Securities than the total number of Registrable Securities proposed to be
offered by the Buyer and securities proposed to be offered by the Company, then
the Buyer shall be entitled to sell pursuant to such registration not more than
the difference between the Maximum Number and the number of shares proposed to
be offered by the Company.
<PAGE>
SECTION 7.4. REGISTRATION PROCEDURES. If and whenever the Company
is required to use its best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Sections 7.2 and
7.3, the Company will as expeditiously as possible:
(i) prepare and (in any event within 60 days after
delivery of the relevant request under 7.2 or after the end of the
period within which requests for registration may be delivered to the
Company under 7.3, whichever is later) file with the Commission a
registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become
effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities and
other securities covered by such registration statement until the
earlier of (a) such time as all of such Registrable Securities have been
disposed of by Buyer in accordance with the intended methods of
disposition set forth in such registration statement or (b) the
expiration of 60 days after such registration statement becomes
effective, and will furnish to Buyer at least five Business Days prior
to the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any such
amendment or supplement to which Buyer shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act or of the
rules or regulations thereunder;
(iii) furnish to Buyer such number of conformed copies of such
registration statement and of each such amendment thereof and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with
the requirements of the Securities Act, such documents, if any,
incorporated by reference in such registration statement or prospectus,
and such other documents as Buyer may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as Buyer shall
reasonably request, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and do any
and all other acts and things which may be necessary or advisable to
enable Buyer to consummate the disposition in such jurisdictions of its
Registrable Securities covered by such registration statement, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this clause (iv) be
obligated to be so qualified, or to subject itself to taxation in any
such jurisdiction, or to consent to general service of process in any
such jurisdiction;
<PAGE>
(v) furnish Buyer a signed counterpart, addressed to it,
of (i) an opinion of counsel for the Company, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), and (ii) a "comfort" letter, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing
under the underwriting agreement), signed by the independent public
accountants who have certified the Company's financial statements
included in such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants' letter, with
respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter,
such other financial matters, as Buyer may reasonably request;
(vi) immediately notify Buyer, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, and at Buyer's request supply such
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month of the first fiscal
quarter after the effective date of such registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
<PAGE>
(viii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration statement; and
(ix) use its best efforts to have all shares covered by such
registration statement quoted on NASDAQ or, at the option of the
Company, listed on a national securities exchange.
The Company may require Buyer to furnish the Company such information regarding
Buyer and the distribution of such securities as the Company may from time to
time reasonably request in writing and as shall be required by law or by the
Commission in connection therewith.
SECTION 7.5. UNDERWRITTEN OFFERINGS.
(a) Underwriting Agreement. If requested by the underwriters for
any underwritten offering of Registrable Securities on behalf of a holder of
Registrable Securities pursuant to a registration requested under Section 7.2,
the Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
the Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities to the effect and to the extent provided in
Section 7.7. The holder of Registrable Securities on whose behalf Registrable
Securities are to be distributed by such underwriters shall be a party to any
such underwriting agreement and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of such holder of
Registrable Securities. Such holder of Registrable Securities shall not be
required by the Company to make any representations or warranties to or
agreements with the Company or the underwriters other than reasonable
representations, warranties or agreements regarding such holder, such holder's
Registrable Securities and such holder's intended method or methods of
disposition and any other representation required by law.
(b) Incidental Underwritten Offerings. If any Registrable
Securities are to be included in a registration statement as contemplated by
Section 7.3 among the securities to be distributed by or through one or more
<PAGE>
underwriters, the holder of Registrable Securities to be distributed by such
underwriters shall be a party to the underwriting agreement between the Company
and such underwriters and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of such holder of
Registrable Securities, and the Company will cooperate with such holder of
Registrable Securities to the end that the conditions precedent to the
obligations of such holder of Registrable Securities under such underwriting
agreement shall not include conditions that are not customary in underwriting
agreements with respect to combined primary and secondary distributions and
shall be otherwise reasonably satisfactory to such holder. Such holder of
Registrable Securities shall not be required by the Company to make any
representations or warranties to or agreements with the Company or the
underwriters other than reasonable representations, warranties or agreements
regarding such holder, such holder's Registrable Securities and such holder's
intended method or methods of distribution and any other representation required
by law.
(c) Selection of Underwriters. Whenever a registration requested
pursuant to Section 7.2 is for an underwritten offering, the holder of the
Registrable Securities included in such registration shall have the right to
select the managing underwriter to administer the offering subject to the
approval of the Company, such approval not to be unreasonably withheld. If the
Company at any time proposes to register any of its securities under the
Securities Act for sale for its own account and such securities are to be
distributed by or through one or more underwriters, the managing underwriter
shall be selected by the Company.
(d) Holdback Agreements. If any registration pursuant to Section
7.2 or 7.3 shall be in connection with an underwritten public offering, each
holder of Registrable Securities agrees by acquisition of such Registrable
Securities, if so required by the managing underwriter, not to effect any public
sales or distribution of Registrable Securities (other than as part of such
underwritten public offering) within the period from ten days prior to the
effective date of such registration statement to 90 days after the effective
date of such registration statement.
SECTION 7.6. PREPARATION; REASONABLE INVESTIGATION. In connection
with the preparation and filing of each registration statement registering
Registrable Securities under the Securities Act, the Company will give the
holders of Registrable Securities on whose behalf such Registrable Securities
are to be so registered and their underwriters, if any, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such holders and such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
<PAGE>
SECTION 7.7. INDEMNIFICATION.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Section 7.2 or 7.3, the Company will, and hereby does, indemnify and hold
harmless the Buyer, its directors and officers, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls Buyer or any such underwriter within the
meaning of the Securities Act, and their agents, against any losses, claims,
damages, liabilities or expenses, joint or several, to which Buyer or any such
director or officer or participating or controlling Person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings in respect thereof) arise out
of or are based upon (x) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such securi
ties were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment thereof or
supplement thereto, or any document incorporated by reference therein, or (y)
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse the Buyer and each of the Buyer's directors,
officers, participating Persons, controlling Persons or agents for any legal or
other expenses reasonably incurred by them in connection with investigation or
defending any such loss, claim, liability, action or proceeding, or (z) any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration; provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense (or action or proceed ing in respect
thereof) arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such prelimi nary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Buyer or any of the Buyer's
directors, officers, participating Persons, controlling Persons or agents
specifically stating that it is for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Buyer or any of the Buyer's directors, officers,
participating Persons, controlling Persons or agents and shall survive any
transfer of such securities by the Buyer. The Company shall agree to a provision
for contribution relating to such indemnity as shall be reasonably requested by
the Buyer or the underwriters.
<PAGE>
(b) Indemnification by the Buyer. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 7.4, that the Company shall have received an
undertaking satisfactory to it from the Buyer as prospective seller of such
securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 7.7) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement in or omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus included therein, or any
amendment thereof or supplement thereto, if such statement or omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Buyer specifically stating that it is for use in the preparation
of such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company or any such director, officer, participating Person or controlling
Person and shall survive the transfer of such securities by the Buyer. The Buyer
shall agree to a provision for contribution relating to such indemnity as shall
be reasonably requested by the Company or the underwriters.
(c) Notice of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 7.7,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 7.7. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation.
<PAGE>
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 7.7 (with appropriate
modifications) shall be given by the Company and the Buyer with respect to any
required registration or other qualification of such Registrable Securities
under any federal or state law or regulation of a governmental authority other
than the Securities Act.
(e) Indemnification Payments. The indemnification required by
this Section 7.7 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
SECTION 7.8. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The
Company will not effect or permit to occur any combination or subdivision of
Capital Stock which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in any
registration of securities contemplated by this Article VII or the marketability
of such Registrable Securities under any such registration.
SECTION 7.9. RULE 144. The Company will timely file the reports
and any other documents required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Commission
thereunder (or, if the Company is not required to file such reports, the Company
will, upon the request of any holder of Registrable Securities, make publicly
available other information), and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell shares of Registrable Securities
without registration under the Securities Act within the limitations of the
exemptions provided by (i) Rule 144 under the Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement, if such is the case, to
the effect that the Company has complied with the reporting requirements of Rule
144 and of the Securities Act and the Exchange Act and will supply a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as may be reasonably requested in order to
avail the Buyer of any rule or regulation of the Commission permitting the sale
of any such securities without registration.
<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices, requests and other communications to either
party hereunder shall be in writing (including bank wire, telecopy, facsimile,
telex or similar writing), and shall be given to such party at the following
addresses:
if to the Company,
501 North Church Street
Smithfield, Virginia 23430
Attn.: Aaron D. Trub, Vice President, Secretary and
Treasurer
telephone: (804) 357-1373
telecopier: (804) 357-1331
with a copy to,
Robert L. Burrus, Esquire
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
Richmond, Virginia 23219
telephone: (804) 775-1000
telecopier: (804) 775-1061
and, if to the Buyer,
Sumitomo Corporation of America
San Francisco Office
1 California Street, Suite 2300
San Francisco, California 94111
telephone: (415) 984-3200
telecopier: (415) 984-3230
telex: 278202 "278202 SUM UR:
with a copy to,
Sumitomo Corporation
24-1, Kanda-nishikicho 3-chome,
Chiyoda-ku, Tokyo 100, Japan
Attention: Meat and Dairy Products Department
telecopier: 011-81-3-32962579
telex: 22202 "SUMIT X J22202
or such other address as such party may hereafter specify for that purpose. Each
such notice, request or other communication shall be effective as follows: if
given by mail, five days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid; and if given by any other
means, when delivered at the address specified in this Section 8.1.
<PAGE>
SECTION 8.2. NO WAIVER. No failure or delay by the Buyer or the
Company in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 8.3. AMENDMENTS AND WAIVERS. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and is signed by the Company and by the holders of a majority of the
Series C Preferred Shares including for such purposes, on a proportional basis,
any Registrable Securities. Any amendment or waiver effected in accordance with
this Section shall be binding upon each holder of Series C Preferred Shares or
Registrable Securities at the time outstanding, upon each future holder of any
such securities and upon the Company.
SECTION 8.4. RESTRICTIVE LEGENDS. The Buyer and the Company agree
that the Company shall permit transfers of the Shares or the Common Shares into
which any such Shares are converted only when the Shares or such Common Shares
shall have been registered under the Securities Act and any applicable state
securities law or when the Buyer's request for transfer is accompanied by an
opinion of counsel, which opinion and counsel shall be reasonably acceptable to
the Company and its counsel, to the effect that the sale or other proposed
transfer does not require registration under the Securities Act or any state
securities laws. Any certificate representing Shares shall, if the Company so
desires, bear a legend in the following form:
"Neither the securities represented by this certificate nor the
securities into which such securities may be converted have been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state, and none may be sold, transferred or
otherwise disposed of unless they have been registered under the Act and
such state laws or in the opinion of counsel (which opinion and counsel
shall be reasonably acceptable to the Company) exemptions are
available."
Any Registrable Securities shall bear a corresponding legend. Other legends
required by applicable state or federal law shall be placed on such
certificates. The Buyer acknowledges receipt prior to its execution of this
Agreement of written disclosure that neither the Shares nor the Common Shares
into which the Shares may be converted have been registered under the Securities
Act and, therefore, none can be resold unless they are registered under the Act
or an exemption from registration is available.
<PAGE>
SECTION 8.5. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the internal laws of the Commonwealth of
Virginia. To the full extent lawful, each of the Company and the Buyer hereby
consents irrevocably to personal service, jurisdiction and venue in connection
with any claim arising out of this Agreement, the Certificate of Designations
the Shares or the Registrable Securities, in the courts of the Commonwealth of
Virginia located in Richmond, Virginia and in the federal courts in the Eastern
District of Virginia.
SECTION 8.6. SUCCESSORS AND ASSIGNS. All of the provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Neither the Buyer nor the
Company may assign or transfer any of its rights or obligations under this
Agreement (as distinguished from rights granted to the holder(s) of the Shares
under the Certificate of Designations) other than by operation of law; provided,
however, that in the event of the Buyer's transferring (consistent with the
other terms of this Agreement) (i) to Sumitomo Corporation, a Japanese
corporation and the parent of the Buyer, or to any wholly-owned subsidiary of
the Buyer, any amount of Shares or Registrable Securities, or (ii) to any other
third party, 1,000 or more Shares or an equivalent amount of Registrable
Securities into which such Shares have been converted, and such parent's,
subsidiary's or third party's agreeing in writing to become bound by this
Agreement as fully as the Buyer hereunder, then in any such case such parent,
subsidiary or third party, as the case may be, shall be entitled to registration
rights in respect of such Series C Preferred Shares or Registrable Securities to
the same extent as the Buyer pursuant to Article VII hereof. No purchaser (if
any) of any Shares from the Buyer shall be deemed a successor or assign by
reason merely of such purchase. Nothing in this Section 8.6 overrides the
restrictions contained in Section 5.5 above.
SECTION 8.7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in counterparts, each of which shall be an original, and all of which
taken together shall constitute a single agreement, with the same effect as if
the signatures thereto and hereto were upon the same instrument. Either party's
execution and delivery of this Agreement may be evidenced by physical delivery
or by telegraphic, telecopier, facsimile or other written communication of such
executed Agreement or executed counterpart to the other party. This Agreement
embodies the entire agreement and understanding between the parties and
supersedes any prior agreements and understandings related to its subject
matter. If any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect, such determination shall not affect such provision
in any other respect or any other provision of this Agreement, which shall
remain in full force and effect.
<PAGE>
SECTION 8.8. SURVIVAL OF REPRESENTATION, WARRANTIES AND
COVENANTS. All of the representations, warranties and covenants contained in
this Agreement shall survive, and shall continue in effect following, the
Closing.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
SMITHFIELD FOODS, INC.
By: /s/ JOSEPH W. LUTER, III
JOSEPH W. LUTER, III
Title: Chairman and Chief
Executive Officer
Attest
By: /s/ AARON D. TRUB
AARON D. TRUB
Title: Vice President, Secretary
and Treasurer
SUMITOMO CORPORATION OF AMERICA
By: /s/ KOICHI WATANABE
KOICHI WATANABE
Title: Vice President and
General Manager
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
of
SERIES C 6 3/4% CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
SMITHFIELD FOODS, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
------------------------------------
Smithfield Foods, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on October 23, 1995:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Composite
Certificate of Incorporation, as amended, the Board of Directors hereby creates
a series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"),
of the Corporation and hereby states the designation and number of shares, and
fixes the relative powers, rights, preferences, and limitations thereof as
follows:
Series C 6 3/4% Cumulative Convertible Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series C 6 3/4% Cumulative Convertible Preferred Stock" (the
"Series C Preferred Stock") and the number of shares constituting the Series C
Preferred Stock shall be 2,000.
Section 2. Dividends. The holders of the outstanding shares of Series
C Preferred Stock shall be entitled to receive, if, when and as declared by the
Board of Directors of the
<PAGE>
Corporation, and when not prohibited by law, cash dividends at the rate and
payable on the dates hereinafter set forth. The rate of dividends payable on the
shares of Series C Preferred Stock shall be $675.00 per share per annum (rounded
upward to the nearest whole $.01) and no more. Dividends shall be payable in
equal quarterly installments on the first day of January, April, July and
October of each year (the "Payment Dates"), commencing, in the case of any share
of Series C Preferred Stock, on January 1, 1996. The initial dividend payment
will be computed by multiplying the annual rate divided by 360 times the number
of days in the period from and including the Issuance Date of Series C Preferred
Stock to the first installment Payment Date. Dividends shall be cumulative and
accumulate on the Series C Preferred Stock from and after the Issuance Date.
Dividends payable on the first installment Payment Date following issuance and
on the date fixed for any redemption of shares of Series C Preferred Stock
pursuant to Sections 7 or 8 hereof which is not a Payment Date, shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
Dividends will be payable to holders of record as they appear on the stock books
of the Corporation on such record dates as shall be fixed by the Board of
Directors of the Corporation (the "Record Dates").
Section 3. Voting Rights. The holders of shares of Series C Preferred
Stock shall have the following voting rights:
(A) Except for the voting rights expressly conferred by this Section 3
and except to the extent provided by law, the holders of shares of Series C
Preferred Stock shall not be entitled (a) to vote on any matter or (b) to
receive notice of, or to participate in, any meeting of stockholders of the
Corporation at which the holders of shares of Series C Preferred Stock are not
entitled to vote.
(B) The approval of a majority of the outstanding shares of the Series C
Preferred Stock, voting as a separate voting group, shall be required for (i)
the adoption of any amendment to the Composite Certificate of Incorporation, as
amended through the time of filing of this Certificate of Designations, that
materially adversely affects the powers, preferences, limitations and rights of
the Series C Preferred Stock (it being expressly stated that an increase in the
number of Directors of the Corporation is not such an adverse change, provided
that this statement is made as a matter of clarification and shall not be read
as implying that in the absence of this parenthetical statement such an increase
would constitute such an adverse change) or (ii) for the issuance of any shares
of Capital Stock other than Junior Stock. Except for cases covered by the
preceding sentence of this paragraph (B), whenever the holders of the Series C
Preferred Stock are entitled under the Delaware General Corporation Law to vote
as a separate voting group on an amendment of the Composite Certificate of
Incorporation, as amended, a plan of merger, or a plan of share exchange, the
vote required for the approval of such amendment shall be a majority
<PAGE>
of all votes cast on the amendment, plan of merger or plan of share exchange by
the holders of the Series C Preferred Stock at a meeting at which the holders of
a majority of the outstanding shares of Series C Preferred Stock are represented
in person or by proxy.
(C) The holders of the outstanding shares of Series C Preferred Stock
shall also have the right, voting as a separate voting group, to elect two
members of the Board of Directors of the Corporation at any time four or more
quarterly dividends on any shares of Series C Preferred Stock shall be in
arrears and unpaid, in whole or in part, whether or not declared and whether or
not any funds shall be or have been legally available for payment thereof. In
such event, unless a regular meeting of the stockholders of the Corporation is
to be held within 60 days thereof for the purpose of electing Directors, the
Corporation shall promptly thereafter cause the number of Directors of the
Corporation to be increased by two, and, within 15 days thereafter, shall call a
special meeting of the holders of the outstanding shares of Series C Preferred
Stock for the purpose of electing such Directors to take place at the time
specified in the notice of the meeting, to be not more than 60 days after such
holders become so entitled to elect two Directors and not less than ten nor more
than 50 days after the date on which such notice is mailed. If such special
meeting shall not have been so called by the Corporation, or such regular
meeting shall not be so held, a special meeting may be called for such purpose
at the expense of the Corporation by the holders of not less than 10% of the
outstanding shares of Series C Preferred Stock; and notice of any such special
meeting shall be given by the person or persons calling the same to the holders
of the outstanding shares of the Series C Preferred Stock by first-class mail,
postage prepaid, at their last addresses as shall appear on the stock transfer
records of the Corporation (which records the Corporation hereby agrees to make
available for such purpose at reasonable times upon request and as otherwise
required by applicable law). At any such special meeting the holders of a
majority of the outstanding shares of Series C Preferred Stock shall elect two
members of the Board of Directors of the Corporation. If a regular meeting of
the stockholders of the Corporation for the purpose of electing Directors is to
be held within 60 days after the time the holders of the outstanding shares of
Series C Preferred Stock become so entitled to elect two Directors, then the
holders of the outstanding shares of Series C Preferred Stock shall be given
notice thereof in the same manner as other stockholders of the Corporation
entitled to vote thereat; and at such regular meeting, the holders of the
outstanding shares of Series C Preferred Stock, voting as a separate voting
group with each share having one vote, shall elect two members of the Board of
Directors. The right of the holders of the Series C Preferred Stock, voting as a
separate voting group, to elect two members of the Board of Directors of the
Corporation shall continue until such time as no dividends on any outstanding
shares of Series C Preferred Stock are in arrears and unpaid, in whole or in
part,
<PAGE>
at which time (i) the voting power of the holders of the outstanding shares of
Series C Preferred Stock so to elect two directors shall cease, but always
subject to the same provisions of this paragraph (C) for the vesting of such
voting power upon the occurrence of each and every like arrearage of dividends,
and (ii) the term of office of each member of the Board of Directors who was
elected pursuant to this paragraph (C) shall automatically expire.
(D) Except as set forth herein, or as otherwise provided by law, holders
of Series C Preferred Stock shall have no special voting rights, and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series C Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series C Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of Junior Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of Parity Stock, except dividends paid ratably on the
Series C Preferred Stock and all such Parity Stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any Junior Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such Junior
Stock in exchange solely for shares of any other Junior Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Parity Stock, except in ac cordance with a purchase offer
made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation
<PAGE>
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Composite Certificate of Incorporation, as amended, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of Junior Stock unless, prior thereto, the holders of
shares of Series C Preferred Stock shall have received $10,000 per share, plus
an amount equal to Dividends Accumulated and distributions thereon, whether or
not declared, to the date of such payment, or (2) to the holders of shares of
Parity Stock except distributions made ratably on the Series C Preferred Stock
and all such Parity Stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up.
Section 7. Optional Redemption.
(A) The Corporation may, at its option, redeem shares of Series C
Preferred Stock, in whole or in part, at any time from time to time at a
redemption price of $10,000 per share, plus in each case a premium of (i) prior
to October 25, 1998, $1,000 per share, (ii) from October 25, 1998 through
October 24, 2001, $600.00 per share, and (iii) from October 25, 2001 through
October 24, 2005, $400.00 per share, in each case with any Dividends Accumulated
to the date fixed for redemption.
(B) In case less than all of the outstanding shares of Series C
Preferred Stock are to be redeemed, not more than 60 days prior to the date
fixed for redemption the Corporation shall select the shares to be redeemed. The
Corporation shall select by proration, by lot or otherwise the shares to be so
redeemed among the holders thereof. The Corporation shall make such adjustments,
reallocations and eliminations as it shall deem proper by increasing or
decreasing or eliminating the number of shares to be redeemed which would be
allocable to any one holder on the basis of exact proration, selection by lot or
any such other method of selection by not more than ten shares to the end that
the number of shares so prorated shall be integral multiples of ten shares. The
Corporation in its discretion may elect the particular certificates (if there
are more than one) representing
<PAGE>
shares registered in the name of a holder that are to be redeemed.
(C) Not less than 30 nor more than 60 days prior to the date fixed for
any redemption pursuant to this Section 7, notice of redemption shall be given
by first-class mail, postage prepaid, to the holders of record of the
outstanding shares of the Series C Preferred Stock to be redeemed at their last
addresses as shown by the Corporation's stock transfer records. The notice of
redemption shall set forth the number of shares to be redeemed, the date fixed
for redemption, the applicable redemption price or prices (including the amount
of Dividends Accumulated to the date fixed for the redemption), and the place or
places where certificates representing shares to be redeemed may be surrendered.
In case less than all outstanding shares are to be redeemed, the notice of
redemption shall also set forth the numbers of the certificates representing
shares to be redeemed and, in case less than all shares represented by any such
certificate are to be redeemed, the number of shares represented by such
certificate to be redeemed.
(D) If notice of redemption of any outstanding shares of Series C
Preferred Stock shall have been duly mailed as herein provided, on or before the
date fixed for redemption the Corporation shall deposit in cash funds sufficient
to pay the redemption price (including Dividends Accumulated to the date fixed
for redemption) of such shares in trust for the benefit of the holders of shares
to be redeemed with any bank or trust company in the City of Richmond, State of
Virginia, or Borough of Manhattan, City and State of New York, having capital
and surplus aggregating at least $50,000,000 as of the date of its most recent
report of financial condition (with the Corporation giving preference to such a
bank or trust company having long-term debt obligations rated by Standard &
Poors, Inc. in one of its three highest rating categories), named in such
notice, to be applied to the redemption of the shares so called for redemption
against surrender for cancellation of the certificates representing shares so
redeemed. From and after the time of such deposit all shares for the redemption
of which such deposit shall have been made shall, whether or not the
certificates therefor shall have been surrendered for cancellation, be deemed no
longer to be outstanding for any purpose, and all rights with respect to such
shares shall thereupon cease and determine except the right to receive payment
of the redemption price (including Dividends Accumulated to the date fixed for
redemption), but without interest. Any interest earned on funds so deposited
shall be paid to the Corporation from time to time. Any funds so deposited and
unclaimed at the end of two years (or such longer period as may be required by
law) from the date fixed for redemption shall be repaid to the Corporation free
of trust, and the holders of the shares called for redemption who have not
surrendered certificates representing such shares prior to such repayment shall
be deemed to be unsecured creditors of the Corporation for the amount of the
redemption price (including
<PAGE>
Dividends Accumulated to the date fixed for redemption) thereof and shall look
only to the Corporation for payment thereof, without interest, subject to the
Delaware General Corporation Law.
(E) The Corporation shall also have the right to acquire outstanding
shares of Series C Preferred Stock otherwise than by redemption pursuant to this
Section 7 from time to time for such consideration as may be acceptable to the
holders thereof.
(F) Shares of Series C Preferred Stock purchased, redeemed or otherwise
acquired by the Corporation shall become authorized and unissued shares of
Preferred Stock which may be designated as shares of any other series. No
additional shares of Preferred Stock, however, may be classified as Series C
Preferred Stock.
Section 8. Mandatory Redemption. On the tenth anniversary of the
Issuance Date (or, if such date is not a Business Day, the Business Day
immediately following such anniversary), the Corporation shall redeem all then
outstanding shares of Series C Preferred Stock, at a redemption price of $10,000
per share, plus an amount equal to Dividends Accumulated thereon. Such
redemption shall in all relevant respects be conducted in accordance with the
terms and procedures set forth in Paragraphs (C) and (D) of Section 7 above.
Section 9. Conversion. The holders of the Series C Preferred Stock
shall have conversion rights (the "Conversion Rights") as follows:
(A) Right to Convert. Each share of Series C Preferred Stock shall be
convertible at the option of the holder thereof, and, except as otherwise
provided by this Section 9, such right to convert may be exercised at any time
after the date of issuance of such share.
(i) Series C Conversion. If such right of conversion is exercised
as to any share of Series C Preferred Stock, such share shall convert into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing $10,000 by the Conversion Price hereinafter defined in effect at the
time of the conversion.
(ii) Effect of Redemption on Conversion. In the event of a call
for redemption of any shares of Series C Preferred Stock pursuant to Sections 7
or 8 hereof, the Conversion Rights shall cease to be exercisable as to the
number of shares designated for redemption at the close of business on the
thirtieth day after notice of redemption, and any right to receive payment of
the redemption price (including Dividends Accumulated to the date fixed for
redemption) shall terminate as to such shares upon the conversion of such shares
into Common Stock pursuant to this Section; provided, however, that if such
shares shall not have been converted under this Section because
<PAGE>
of default in payment of the redemption price (that is, default by the
Corporation on its obligation under Section 7(D) to make the required cash
deposit on or before the date fixed for redemption), the Conversion Rights for
such shares shall continue. A holder's rights with respect to current and
accumulated dividends on any share for which such right of conversion is
exercised shall continue (but no further dividends shall cumulate) in the manner
specified in Section 2, and shall be declarable and payable to the holder of
record for such share as of the date of such exercise at such time and to the
same extent that dividends with respect to the same fiscal quarters are declared
and paid to all holders of Series C Preferred Stock.
(iii) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Series C Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price. Before any holder of Preferred Stock may exercise
his right to convert the same into full shares of Common Stock pursuant to this
Section, such holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for
such shares, and shall give written notice to the Corporation at such office
that he elects to convert the same and shall state therein his name or the name
or names of his nominees in which he wishes the certificate or certificates for
shares of Common Stock to be issued and his agreement to pay any applicable
transfer taxes. The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Preferred Stock, or to his nominee
or nominees, a certificate or certificates for the number of shares of Common
Stock to which he shall be entitled pursuant to this Section, together with cash
in lieu of any fraction of a share, if applicable. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of such time. Notwithstanding the above, if the
holder of Preferred Stock is exercising his right of conversion pursuant to this
Section subsequent to notice, and in anticipation, of any redemption, he may so
specify in his written notice to the Corporation and such shares shall be
converted only if there has been no default in payment of the redemption price
(that is, no default by the Corporation on its obligation under Section 7(D) to
make the required cash deposit on or before the date fixed for redemption). Any
such conversion shall be deemed to have been made immediately prior to such
redemption, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of such instant and
shall have no right
<PAGE>
to receive payment of the redemption price (including Dividends Accumulated to
the date fixed for redemption).
(B) Conversion Price. The "Conversion Price" with respect to the Series
C Preferred Stock shall be, as of the Issuance Date, $30.00 per share of Common
Stock. Such initial Conversion Price shall be subject to adjustment as
hereinafter provided.
(C) Adjustments to Conversion Price of Diluting Events.
(i) Stock Dividends, Splits, or Recapitalizations. In the event
at any time, or from time to time after the Issuance Date, there is (i) a
subdivision, combination, or consolidation of the Corporation's Common Stock
into a greater or lesser number of shares of Common Stock (by capital
reorganization, reclassification or otherwise than by payment of a dividend in
Common Stock); (ii) the declaration or payment by the Corporation of any
dividend on the Common Stock which is payable in additional Common Stock; or
(iii) any other increase or decrease in the outstanding Common Stock of the
Corporation effected without receipt of consideration by the Corporation (other
than Common Stock issuable upon any conversion of Preferred Stock pursuant to
this Section), then and in any such event, the Conversion Price shall be
adjusted to the price (calculated to the nearest cent) determined by multiplying
such Conversion Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to the diluting event
described hereinabove, and the denominator of which shall be the number of
shares of Common Stock outstanding after such diluting event. In the case of
any stock dividend, such adjustment shall be effective immediately after the
close of business on the record date for the determination of holders of any
class of securities entitled to receive such dividend. In the case of any other
such diluting event, such adjustment shall be effective at the close of business
on the date immediately prior to the date on which such corporate action becomes
effective. After such adjustment is made, the adjusted Conversion Price shall
constitute and remain the Conversion Price for all purposes hereunder unless and
until it is again subject to adjustment pursuant to the terms hereof.
(ii) Adjustments for Mergers or Reorganization, Etc. In the event
of any consolidation or merger of the Corporation with or into any other
corporation or the conveyance of all or substantially all of the assets of the
Corporation to another corporation in exchange for securities (in whole or in
part), each share of Series C Preferred Stock shall thereafter be convertible
into the number of shares of stock or other securities or property to which a
holder of the number of shares of Common Stock of the Corporation deliverable
upon conversion of such Series C Preferred Stock, immediately prior to the
effectiveness of such consolidation, merger or conveyance would have been
entitled upon such consolidation, merger or conveyance. In addition, in any such
case, appropriate adjustment (as
<PAGE>
determined by the Board of Directors) shall be made in the application of the
provisions set forth in this Section with respect to the rights and interest,
after any such conversion, of the holders of the Series C Preferred Stock, to
the end that the provisions set forth in this Section (including without
limitation provisions with respect to changes in and other adjustments of the
Conversion Price) shall thereafter be applicable, as nearly as reasonably
possible, in relation to the shares of stock or other securities or property
thereafter deliverable upon the conversion of the Series C Preferred Stock.
(D) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series C Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in reasonable detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the reasonable
written request at any time of any holder of Series C Preferred Stock, furnish
or cause to be furnished to such holder a like certificate setting forth (i)
such adjustments and readjustments, (ii) the Conversion Price with respect to
such holder's Series C Preferred Stock at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received by such holder upon the conversion of such
Preferred Stock.
(E) Notices of Common Stock Record Dates. In the event of any taking by
the Corporation of a record of the holders of the Common Stock or any other
class of securities into which the Series C Preferred Stock is convertible for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, the Corporation shall mail to each holder of
Series C Preferred Stock, at least ten days prior to the date specified therein,
a notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(F) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect conversion of
all the Series C Preferred Stock.
Section 10. Definitions. For the purpose of this resolution, the word
"corporation" shall be deemed to include corporations, associations, companies
and business trusts and, unless the context otherwise requires, the following
terms shall have the following meanings:
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking
<PAGE>
institutions in Richmond, Virginia are authorized or obligated by law to close.
"Capital Stock" means any capital stock of any class or series (however
designated) of the Corporation.
"Common Stock" means the Common Stock, par value $.50 per share, of the
Corporation.
"Dividends Accumulated" means with respect to any shares of Series C
Preferred Stock, an amount equal to the dividends thereon at the dividend rate
per annum computed from the Issuance Date to the date to which reference is
made, whether such amount or any part thereof shall have been declared as
dividends and whether there shall be or have been any funds out of which such
dividends might legally be paid, less the amount of dividends declared and paid
thereon and, if any dividends thereon have been declared but not paid, the
amount set apart for the payment of such dividends.
"Issuance Date" shall mean the first date of issuance of any shares of
Series C Preferred Stock.
"Junior Stock" means any Capital Stock ranking as to dividends or as to
rights in liquidation, dissolution or winding up of the affairs of the
Corporation junior to Series C Preferred Stock. At the date hereof, the
Corporation's Junior Stock is comprised solely of the Common Stock and the
Series A Junior Participating Preferred Stock, par value $1.00 per share.
"Parity Stock" means any Capital Stock ranking as to dividends or as to
rights in liquidation, dissolution or winding up the affairs of the Corporation
equally with the Series C Preferred Stock. At the date hereof, the Corporation's
Parity Stock is comprised solely of the Series B 6 3/4% Cumulative Convertible
Preferred Stock, par value $1.00 per share.
"Payment Date" is defined in Section 2 hereof.
"Record Date" is defined in Section 2 hereof.
"Subsidiary" means any corporation a majority of the outstanding Voting
Stock of which is owned, directly or indirectly, by the Corporation or by one or
more Subsidiaries or by the Corporation and one or more Subsidiaries. For this
purpose, "Voting Stock" means stock of any class or classes (however designated)
having ordinary voting power for the election of a majority of the members of
the board of directors (or other governing body) of such corporation, other than
stock having such powers only by reason of the happening of a contingency.
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman and Chief Executive Officer and
attested by its Secretary this 23rd day of October, 1995.
------------------------------------
(Corporate Seal) Joseph W. Luter, III
Chairman and Chief Executive Officer
Attest:
-------------------------------
Aaron D. Trub
Vice President, Secretary and
Treasurer
<PAGE>
EXHIBIT B
Dated as of the Closing Date under
the Agreement referred to below
Smithfield Foods, Inc.
Gentlemen:
In connection with its purchase of 2,000 shares of Series C 6 3/4% Cumulative
Convertible Preferred Stock, par value $1.00 per share (the "Shares"),
convertible by their terms into shares of Common Stock, par value $.50 per share
("Common Shares"),of Smithfield Foods, Inc. (the "Company") to be issued
pursuant to a Subscription Agreement (the "Agreement") dated as of October 25,
1995 between the Company and Sumitomo Corporation of America, a New York
corporation (the "Buyer"), the Buyer represents to the Company the following:
1. The Buyer acknowledges that the Shares and the Common Shares into which
the Shares may be converted have not been offered or sold to the Buyer
by any form of general solicitation or general advertising. The Buyer
agrees that it will not, directly or indirectly, offer, transfer, sell,
pledge, hypothecate or otherwise dispose of any Shares or Common Shares
(or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of any Shares or Common Shares), except in compliance with the
Securities Act and the rules and regulations of the Commission
thereunder and with any applicable state securities laws.
2. The Buyer is subscribing for and acquiring the Shares (and the Common
Shares into which such Shares may be converted) for its own account for
investment and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933.
3. The Buyer has such knowledge and experience in financial and business
matters that the Buyer is capable of evaluating the merits and risks of
the investment in the Shares (and the Common Shares into which such
Shares may be converted) and is able to bear the economic risk of such
investment for an indefinite period.
4. The Buyer is an "accredited investor" within the meaning of Rule 501 of
Regulation D of the Rules and Regulations of the Securities and Exchange
Commission as presently in effect,
<PAGE>
because the Buyer is a corporation, not formed for the specific purpose
of acquiring the Series C Preferred Shares, with total assets in excess
of $5,000,000. The Buyer is aware that none of the Shares or the Common
Shares into which the Shares may be converted have been registered under
the Securities Act or any state securities law, that the Shares and such
Common Shares must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available and that,
except as may be provided in the Agreement the Company is under no
obligation to register any of the Shares or such Common Shares under the
Securities Act or any state securities law. The Buyer further
acknowledges that there is not, nor is there expected to be, any market
for the purchase and sale of the Shares.
5. Because the transactions contemplated by the Agreement have been
negotiated, the Buyer has not been furnished with any formal offering
memorandum or prospectus, but to the best of the Buyer's knowledge the
Buyer has received from the Company copies of all such information as
the Buyer or its agents have requested. Representatives of the Buyer
have had full opportunity to examine the financial and business affairs
of the Company and to ask questions of its management. Notwithstanding
such opportunities and examinations, the Buyer disclaims any reliance
upon any Company financial projections beyond the extent to which such
reliance is expressly contemplated therein.
Very truly yours,
SUMITOMO CORPORATION OF AMERICA
By: _____________________________
Name: ___________________________
Title: __________________________
<PAGE>
EXHIBIT C
October 25, 1995
Sumitomo Corporation of America
345 Park Avenue
New York, New York 10154
Ladies and Gentlemen:
We have acted as counsel for Smithfield Foods, Inc., a Delaware
corporation (the "Company"), in connection with the issuance and sale by it of
2,000 shares (the "Shares") of the Company's Series C 6 3/4% Cumulative
Convertible Preferred Stock, par value $1.00 per share (the "Series C Preferred
Shares"), pursuant to a Subscription Agreement dated October 25, 1995 (the
"Subscription Agreement") between you and the Company. This opinion is rendered
pursuant to Section 3.1(vi) of the Subscription Agreement. Capitalized terms
used but not separately defined in this opinion have the same meanings herein as
in the Subscription Agreement.
In connection with this opinion we have investigated such questions of
law, and we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of the Subscription Agreement, such
corporate documents and records of the Company, such certificates of public
officials, officers and representatives of the Company and other persons and
such other documents and information (in each case including the representations
and warranties as to factual matters contained therein, if any) as in our
judgment are necessary to enable us to render the opinions expressed below.
Based on the foregoing and having regard for such legal considerations
as we deem relevant, we are of the opinion that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to enter into and perform its
obligations under the Subscription Agreement; the Company's execution,
delivery and performance of the Subscription Agreement have been duly
authorized by the Company and require as of the date hereof no further
action by or in respect of, or filing with, any governmental body,
agency or official (except as may be required or appropriate to secure
exemptions under the Securities Act and under applicable state
securities or Blue
<PAGE>
Sky laws and except as contemplated by the Subscription Agreement), such
that the failure to take such action or make such filing would
materially adversely affect the Company's ability to perform its
obligations under the Subscription Agreement; and the Subscription
Agreement (other than the indemnification provisions thereof, as to
which we express no opinion) is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(ii) The Series C Preferred Shares and their issuance and delivery
pursuant to the Subscription Agreement have been duly authorized and,
when issued, sold and delivered in accordance with the Subscription
Agreement, the Series C Preferred Shares will be validly issued, fully
paid and nonassessable and will have the powers, rights, preferences and
limitations provided for in the Series C Preferred Shares Certificate of
Designations. The Common Shares to be issued upon conversion of the
Series C Preferred Shares have been duly authorized and reserved for
issuance and, when issued upon conversion in accordance with the
Subscription Agreement and the Series C Preferred Shares Certificate of
Designations, will be validly issued, fully paid and nonassessable.
(iii) The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of the Subscription Agreement
and the consummation of the transactions therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known to
us to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, which conflict, breach, violation or default could reasonably
be expected to have a material adverse effect on the Company's ability
to perform its obligations under the Subscription Agreement, nor will
such action result in any violation of the provisions of the Composite
Certificate of Incorporation, as amended, or By-laws of the Company or
any statute or any order, rule or regulation known to us of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties.
(iv) The issuance, sale and delivery of the Shares and the issuance and
delivery of Common Shares upon conversion of the Shares, under the
circumstances contemplated by the Subscription Agreement and the Series
C Preferred Shares
<PAGE>
Certificate of Designations, will be transactions exempt from the
registration requirements of the Securities Act.
In rendering the above opinions, we have assumed that the certificates
for the Series C Preferred Shares and the Common Shares issuable upon conversion
thereof will be in appropriate form and will be appropriately executed; that the
Subscription Agreement has been duly authorized, executed and delivered by you
and such agreement is valid, binding and enforceable against you in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and that the signatures on all
documents examined by us are genuine, which assumptions we have not
independently verified.
Our opinion is limited to the effect of the laws of the Commonwealth of
Virginia, the General Corporation Law of the State of Delaware and the federal
laws of the United States of America.
This opinion is furnished by us as counsel to the Company to you as the
Buyer and is solely for your benefit.
Very truly yours,