[Pennexx Foods, Inc. Letterhead]
December 30, 2002
Mr. X. Xxxxx Xxxx
President and Chief Operating Officer Smithfield Foods, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxx:
This letter agreement is intended to memorialize certain
agreements and understandings we have reached in connection with our entering
into that certain Second Amendment to Credit Agreement, of even date herewith,
among Pennexx Foods, Inc. and Smithfield Foods, Inc. (the "Amendment").
Capitalized terms used but not defined herein shall have the meaning given such
terms in that certain Credit Agreement, dated as of June 27, 2001, among
Pinnacle Foods, Inc. (now known as Pennexx Foods, Inc.) and Smithfield Foods,
Inc. (as amended, the "Credit Agreement").
Xxxxxxxx-Xxxxx Act of 2002 Compliance.
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Pennexx hereby agrees to provide to Smithfield from time to
time, upon Xxxxxxxxxx's reasonable request therefor, a certificate executed by
Pennexx's principal financial officer containing such information as Smithfield
may reasonably require in order for Smithfield to comply with its obligations
under Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002 and any rules or
regulations promulgated in connection therewith.
Operations Lease Guaranty.
--------------------------
Provided that no Default and no Event of Default has occurred
under the Credit Agreement, Smithfield hereby agrees that it will provide a
guaranty of Pennexx's obligations under the Xxxxx Road Operating Leases (as such
term is defined in the Amendment), subject to (i) the payment by Pennexx to
Smithfield of a guaranty fee equal to 2.0% of the aggregate amount to be
guaranteed, (ii) the payment by Pennexx to Smithfield of all proceeds received
by Pennexx from the lessors under the Xxxxx Road Operating Leases (which shall
be applied against outstanding amounts owed under the Credit Agreement) and
(iii) Smithfield's approval of the lease and guaranty documents, such approval
not to he unreasonably withheld.
If the foregoing accurately reflects your understanding of our
agreement, please execute this letter agreement below.
PENNEXX FOODS, INC.
/s/ Xxxxxxx X. Xxxxx
-----------------
By: Xxxxxxx X. Xxxxx
Its: President
Seen and Agreed to
as of December 30, 2002
SMTTHFIELD FOODS, INC.
/s/ X. Xxxxx Xxxx
--------------
By: X. Xxxxx Xxxx
Its: President and Chief Operating Officer
