Contribution Agremeent

EXHIBIT 10.1

CONTRIBUTION AGREEMENT

BY AND AMONG

TARVALd3N, S.L.,

SFDS GLOBAL HOLDINGS BV AND

OCM LUXEMBOURG EPOF SARL

AND

SMITHFIELD FOODS, INC. (FOR THE PURPOSES OF ARTICLE VII ONLY)

JUNE 29, 2006

TABLE OF CONTENTS


ARTICLE I DEFINITIONS 1

1.1

Accounts 1

1.2

Affiliate 1

1.3

Agreement 2

1.4

Approval 2

1.5

Assets 2

1.6

Books and Records 2

1.7

Closing 2

1.8

Closing Date 2

1.9

Company 2

1.10

Confidentiality and Exclusivity Agreement 2

1.11

Constituent Documents 2

1.12

Contracts 2

1.13

Contributed Shares 2

1.14

Debt 2

1.15

Earn-Out Agreement 2

1.16

Effective Time of Closing 3

1.17

Employment Regulations 3

1.18

Environment 3

1.19

Environmental Consents 3

1.20

Environmental Laws 3

1.21

Environmental Matters 3

1.22

Equipment 3

1.23

Exchange Act 3

1.24

Expenses 3

1.25

Financial Statements 3

1.26

FrenchCo Business 3

1.27

FrenchCo Intellectual Property Rights 3

1.28

GAAP 3

1.29

Governmental Authority 4

1.30

Hazardous Materials 4

1.31

Industry Wide Plan 4

1.32

Intellectual Property 4

1.33

Inventory 4

1.34

Knowledge of Smithfield 4

1.35

Law 4

1.36

Lien 4

1.37

Losses 4

1.38

Material Adverse Effect 5

1.39

OCM 5

1.40

OCM Cash Contribution 5

1.41

OCM Indemnified Parties 5

1.42

OCM Initial Shares 5

1.43

Permits 5

1.44

Person 5


(i)

1.45

Properties 5

1.46

Purchase Agreement 5

1.47

Retirement Benefit 5

1.48

Shares 5

1.49

Site 6

1.50

SLE 6

1.51

Smithfield 6

1.52

Smithfield Cash Contribution 6

1.53

Smithfield France 6

1.54

Smithfield Indemnified Parties 6

1.55

Smithfield Initial Shares 6

1.56

State Social Security Plan 6

1.57

Stockholders Agreement 6

1.58

Subsidiaries 6

1.59

Target Company IT Systems 6

1.60

Target Employee Benefit Plan 6

1.61

Third-Party Intellectual Property Rights 6

1.62

Tax 6

1.63

Tax Regulations 7

1.64

Tax Return 7

1.65

Third Party Right 7

1.66

Transaction Material Adverse Effect 7

ARTICLE II CONTRIBUTION AND SHARE ISSUANCE 7

2.1

Contribution and Share Issuance 7

2.2

Deliveries at Closing 8

ARTICLE III WARRANTIES OF SMITHFIELD 9

3.1

Organization of Smithfield 9

3.2

Smithfield Authorization; Execution and Delivery; Enforceability 9

3.3

No Violation or Conflict by Smithfield 10

3.4

Title to Contributed Shares 10

3.5

Organization of the Company 10

3.6

Company Authorization; Execution and Delivery; Enforceability 10

3.7

No Violation or Conflict by the Company 10

3.8

Organization and Authority of Smithfield France 11

3.9

Capitalization 11

3.10

No Violation or Conflict by Smithfield France 11

3.11

Subsidiaries 11

3.12

Sufficiency of Assets 11

3.13

Financial Statements 11

3.14

Liabilities at Effective Time of Closing 12

3.15

Authorizations, Valid Obligations, Filings and Consents 12

3.16

Smithfield, the Shares and Smithfield France and Subsidiaries 12

3.17

Organizational Documents of Smithfield France and the Subsidiaries 12

3.18

Absence of Changes 12

3.19

Statutory Books 13


(ii)

3.20

Accounting Records 13

3.21

Securities Exchange Act 13

3.22

Borrowings and Mortgages 14

3.23

Sureties 14

3.24

Grants 14

3.25

Licenses 15

3.26

Compliance 15

3.27

The Business Assets 15

3.28

Consents, Approvals and Compliance with Laws 17

3.29

No Broker 17

3.30

Contractual Matters 17

3.31

Litigation 19

3.32

Investigations 19

3.33

Insolvency, etc. 19

3.34

IP/IT 20

3.35

Real Estate 21

3.36

Environmental 22

3.37

Employment 24

3.38

Retirement Benefits 26

3.39

Tax Matters 27

ARTICLE IV WARRANTIES OF OCM 27

4.1

Organization 27

4.2

Authorization; Execution and Delivery; Enforceability 27

4.3

No Violation or Conflict by OCM 27

4.4

No Broker 28

ARTICLE V COVENANTS 28

5.1

Conduct of Business of Smithfield France and the Subsidiaries 28

5.2

Access to Information 28

5.3

Commercially Reasonable Efforts 28

5.4

Public Announcements 28

5.5

Confidentiality and Exclusivity Agreement 28

ARTICLE VI CONDITIONS PRECEDENT TO CLOSING 29

6.1

Conditions Precedent to Obligations of OCM 29

6.2

Conditions Precedent to Obligations of Smithfield 29

ARTICLE VII INDEMNITIES AND ADDITIONAL COVENANTS 30

7.1

Smithfield' s Indemnity 30

7.2

OCM' s Indemnity 32

7.3

Additional OCM Indemnity 33

7.4

Company Indemnity 33

7.5

Further Assurances 33

ARTICLE VIII TERMINATION; WAIVER 33

8.1

Termination 33


(iii)

8.2

Effect of Termination 34

8.3

Waiver; Extension 34

ARTICLE IX MISCELLANEOUS 34

9.1

Entire Agreement; Amendment 34

9.2

Expenses 35

9.3

Governing Law; Consent to Jurisdiction 35

9.4

Assignment 35

9.5

Notices 36

9.6

Counterparts; Headings 37

9.7

Specific Performance 37

9.8

Interpretation 37

9.9

Severability 37

9.10

No Reliance 37

9.11

Survival; Exhibits 37


(iv)

EXHIBITS

Exhibit 1.15 Earn-Out Agreement Exhibit 1.57 Stockholders Agreement Exhibit 3.9 Capitalization Exhibit 3.11 Subsidiaries


(v)

CONTRIBUTION AGREEMENT CONTRIBUTION AGREEMENT , made as of the 29th day of June, 2006, by and among Tarvalf3n, S.L., a private limited company organized under the laws of Spain (the " Company" ), SFDS Global Holdings BV, a private limited liability company organized under the laws of the Netherlands (" Smithfield" ), and OCM Luxembourg EPOF SARL, a socie9te9 e0 responsibilite9 limite9e organized under the laws of Luxembourg (" OCM" ) and, for the purposes of Article VII only, Smithfield Foods, Inc. (" Parent" ). RECITALS

WHEREAS , Smithfield has organized the Company solely for the purpose of consummating the transactions contemplated by that certain Agreement (the " Purchase Agreement" ), dated June 26, 2006, among Parent, the Company and Sara Lee Corporation (" SLE" ), providing for the purchase by the Company of SLE' s and its Affiliates' European meats business, and is the holder of 3,200 Shares (as defined herein); and WHEREAS , Smithfield desires to contribute to the Company (a) all of the shares of capital stock of Smithfield France SAS (" Smithfield France" ) held by Smithfield and its Affiliates (with a deemed gross enterprise value of ?120 million, which includes ?20 million of debt (the " Debt" )) and (b) ?50 million in cash (the " Smithfield Cash Contribution" ) in exchange for an aggregate 50% ownership interest in the Company; and

WHEREAS , OCM desires to (a) contribute to the Company ?108.89 million in cash (the " OCM Cash Contribution" ) and (b) enter into the Earn-Out Agreement (as defined herein) in exchange for an aggregate 50% ownership interest in the Company.

NOW, THEREFORE , in consideration of the foregoing and of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it hereby is agreed that:

ARTICLE I

DEFINITIONS

When used in this Agreement, the following terms shall have the meanings specified:

1.1 Accounts . " Accounts" shall mean all accounts receivable, notes receivable and associated rights owned by Smithfield France and the Subsidiaries.

1.2 Affiliate . " Affiliate" shall mean, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person. As used in this definition of the term " Affiliate" and elsewhere herein with respect to any Affiliate of any Person, " control" (including the terms " controlled by" and " under common control with" ) means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by voting trust, contract or similar arrangement, as trustee or executor, or otherwise.

1.3 Agreement . " Agreement" shall mean this Contribution Agreement, together with the Exhibits attached hereto, as the same may be amended from time to time in accordance with the terms hereof.

1.4 Approval . " Approval" shall mean approval or qualification by and/or due registration with the appropriate taxation, social security, supervisory, fiscal or other applicable regulatory authorities in the relevant state or jurisdiction, in order to obtain tax approved, favored or qualified status in the relevant jurisdiction, and Approved shall be construed accordingly.

1.5 Assets . " Assets" shall mean all of the assets of Smithfield France and the Subsidiaries, including, without limitation, the Accounts, Books and Records, Contracts, Equipment, Intellectual Property, Inventory, Permits and Real Property.

1.6 Books and Records . " Books and Records" shall mean original or true and complete copies of all of the books, records, ledgers, files, data and information of Smithfield France and the Subsidiaries.

1.7 Closing . " Closing" shall mean the conference to be held at 10:00 a.m., local time, on the Closing Date, at the offices of Hunton & Williams LLP located at 200 Park Avenue, New York, New York 10166, or at such other time and place as the parties may mutually agree.

1.8 Closing Date . " Closing Date" shall mean the date on which the transactions contemplated by the Purchase Agreement are consummated.

1.9 Company . " Company" shall have the meaning given to such term in the Preamble hereto. 1.10 Confidentiality and Exclusivity Agreement . " Confidentiality and Exclusivity Agreement" shall mean the letter agreement, dated May 4, 2006, between Smithfield Foods, Inc. and OCM.

1.11 Constituent Documents . " Constituent Documents" shall mean the articles of association and bylaws (or similar organizational documents) of any entity.

1.12 Contracts . " Contracts" shall mean all material contracts, agreements, leases, licenses, relationships and commitments, written or oral, to which Smithfield France or any of the Subsidiaries are a party or by which any of them are bound, and that are required to conduct the business of Smithfield France and the Subsidiaries.

1.13 Contributed Shares . " Contributed Shares" shall mean all of the shares of capital stock of Smithfield France held by Smithfield.

1.14 Debt . " Debt" shall have the meaning given to such term in the Recitals hereto.

1.15 Earn-Out Agreement . " Earn-Out Agreement" shall mean that certain Earn-Out Agreement to be entered into between Smithfield, OCM and the Company, substantially in the form of Exhibit 1.15 attached hereto.


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1.16 Effective Time of Closing . " Effective Time of Closing" shall mean 12:01 AM, local time, on the Closing Date.

1.17 Employment Regulations . " Employment Regulations" shall mean the Transfer of Undertaking (Protection of Employment) Regulations 1981.

1.18 Environment . " Environment" shall mean all or part of any of the following media, namely air (including the air within buildings or other natural or man-made structures above or below ground), water and land and any living organisms or systems supported by those media. 1.19 Environmental Consents . " Environmental Consents" shall mean any material permit, license, authorization, approval or consent required under Environmental Laws for the carrying on of the FrenchCo Business or the use of, or any activities or operations carried out at, any Site owned or occupied by Smithfield France or the Subsidiaries. 1.20 Environmental Laws . " Environmental Laws" shall mean all international, European Union, national, state, federal, regional or local laws (including common law, statute law, civil and criminal law and including codes of practice and guidance notes which are of mandatory effect) which are in force and binding at the date of this Agreement, to the extent that they relate to Environmental Matters.

1.21 Environmental Matters . " Environmental Matters" shall mean all matters relating to the pollution, protection of or prevention of harm to the Environment.

1.22 Equipment . " Equipment" shall mean all machinery, vehicles, equipment, furniture, fixtures, furnishings, parts, tools, engineering and other items of tangible personal property owned or leased by Smithfield France and the Subsidiaries and that are required to conduct the business of Smithfield France and the Subsidiaries.

1.23 Exchange Act . " Exchange Act" shall have the meaning set forth in Section 3.22 .

1.24 Expenses . " Expenses" shall have the meaning set forth in Section 9.2 .

1.25 Financial Statements . " Financial Statements" shall mean the unaudited financial statements of the FrenchCo Business for the three fiscal years ended April 27, 2003, May 2, 2004 and May 1, 2005 containing consolidated statements of operations for the fiscal years 2003, 2004 and 2005 and consolidated balance sheets as of April 27, 2003, May 2, 2004 and May 1, 2005.

1.26 FrenchCo Business . " FrenchCo Business" shall mean the business of Smithfield France and the Subsidiaries.

1.27 FrenchCo Intellectual Property Rights . " FrenchCo Intellectual Property Rights shall have the meaning give to such term in Section 3.34 hereof.

1.28 GAAP . " GAAP" shall mean generally accepted accounting principles as in effect in the United States as of the date of the subject financial statement.


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1.29 Governmental Authority . " Governmental Authority" means the government of any nation, state, city, locality or other political subdivision thereof, any multinational organization, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any executive official thereof.

1.30 Hazardous Materials . " Hazardous Materials" shall have the meaning set forth in Section 3.37.

1.31 Industry Wide Plan . " Industry Wide Plan" means any scheme, plan, fund or arrangement which provides Retirement Benefits to or in respect of employees in which employers may participate even if they are not within the same corporate group as the other participating employers whether under a collective bargaining agreement or otherwise, other than state social security plans in any relevant jurisdiction.

1.32 Intellectual Property . " Intellectual Property" shall mean all material (a) inventions (whether patentable or unpatentable and whether or not reduced to practice), improvements thereto and patents, patent applications and patent disclosures, together with reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (b) trademarks, service marks, trade dress, logos, trade names and corporate names, together with translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith and applications, registrations and renewals in connection therewith, (c) copyrightable works, copyrights and applications, registrations and renewals in connection therewith, (d) trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (e) computer software (including data and related documentation), (f) other proprietary rights, (g) rights as a licensee or authorized user of the intellectual property of any third party and (h) copies and tangible embodiments thereof (in whatever form or medium).

1.33 Inventory . " Inventory" shall mean all raw materials, work in progress and finished goods, wherever located, owned by Smithfield France and the Subsidiaries in connection with the FrenchCo Business. 1.34 Knowledge of Smithfield . " Knowledge of Smithfield" shall mean the actual knowledge of, after all reasonable inquiry by, C. Larry Pope, Richard J. M. Poulson, Dan G. Stevens and Robert Sharpe I.

1.35 Law . " Law" shall mean any federal, state, local or other law or governmental requirement of any kind, and the rules, regulations and orders promulgated thereunder.

1.36 Lien . " Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, priority, right of first refusal, restriction on transfer, right or other security interest or preferential arrangement or adverse claim of any kind or nature whatsoever.

1.37 Losses . " Losses" shall have the meaning given to such term in Section 7.1 hereof.


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1.38 Material Adverse Effect . " Material Adverse Effect" shall mean a material adverse change in or effect on the financial condition, business, properties, results of operations or prospects of Smithfield France and the Subsidiaries, taken as a whole; provided , however , that " Material Adverse Effect" shall not include the effect of any change or effect arising out of or attributable to (a) the markets in which Smithfield France and the Subsidiaries operate generally, (b) general economic or political conditions (including those effecting the securities markets), (c) the public announcement of this Agreement or the Purchase Agreement or of the consummation of the transactions contemplated hereby and thereby, (d) any change arising in connection with acts of war (whether or not declared), sabotage or terrorism, military actions or the escalation thereof or other force majeure events occurring after the date hereof or (e) changes in Laws or accounting rules. 1.39 OCM . " OCM" shall have the meaning given to such term in the Preamble hereto. 1.40 OCM Cash Contribution . " OCM Cash Contribution" shall have the meaning given to such term in the Recitals hereto. 1.41 OCM Indemnified Parties . " OCM Indemnified Parties" shall have the meaning given to such term in Section 7.1 hereof.

1.42 OCM Initial Shares . " OCM Initial Shares" shall have the meaning given to such term in Section 2.1(d) hereof.

1.43 Permits . " Permits" shall have the meaning set forth in Section 3.26 . 1.44 Person . " Person" shall mean any individual, sole proprietorship, trust, estate, executor, legal representative, unincorporated association, association, institution, corporation, company, partnership, limited liability company, limited liability partnership, joint venture, government, Governmental Authority, and any regulatory or self-regulatory authority or agency or other entity.

1.45 Properties . " Properties" shall mean all real property owned or leased by Smithfield France or any Subsidiary, together with the improvements located thereon, including all appurtenant rights, claims and interests, which is used in and is material to the conduct of the FrenchCo Business. 1.46 Purchase Agreement . " Purchase Agreement" shall have the meaning given to such term in the Recitals hereto. 1.47 Retirement Benefit . " Retirement Benefits" means any pension, allowance, lump sum, gratuity or similar benefit provided or to be provided on or after retirement, death, disability or leaving service (whether voluntary or not) in respect of an employee' s employment. This does not include post retirement medical and dental and other healthcare and welfare benefits, termination indemnities and any benefits provided under an arrangement the sole purpose of which is to provide benefits on the accidental injury or death of an employee.

1.48 Shares . " Shares" shall mean the shares of capital stock of the Company.


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1.49 Site . " Site" shall have the meaning set forth in Section 3.36 .

1.50 SLE . " SLE" shall have the meaning given in the Recitals hereto. 1.51 Smithfield . " Smithfield" shall have the meaning given to such term in the Preamble hereto. 1.52 Smithfield Cash Contribution . " Smithfield Cash Contribution" shall have the meaning given to such term in the Recitals hereto.

1.53 Smithfield France . " Smithfield France" shall have the meaning given to such term in the Recitals hereto.

1.54 Smithfield Indemnified Parties . " Smithfield Indemnified Parties" shall have the meaning given to such term in Section 7.2 hereof.

1.55 Smithfield Initial Shares . " Smithfield Initial Shares" shall mean the Shares owned by Smithfield prior to the sale of the OCM Initial Shares to OCM.

1.56 State Social Security Plan . " State Social Security Plan" means any Retirement Benefit plans that are operated by state entities to which Smithfield France or any of the Subsidiaries are required to contribute under Law. 1.57 Stockholders Agreement . " Stockholders Agreement" shall mean that certain Stockholders Agreement, to be entered into as of the Closing Date, among the Company, Smithfield and OCM, substantially in the form of Exhibit 1.57.

1.58 Subsidiaries . " Subsidiaries" shall mean, collectively, Jean Caby SAS and Dispranor SARL and " Subsidiary" shall mean either one of the foregoing.

1.59 Target Company IT Systems . " Target Company IT Systems" shall mean all computer hardware (including network and communications equipment) and software (including associated preparatory materials, user manuals and other related documentation) owned, used, leased or licensed by Smithfield France and the Subsidiaries.

1.60 Target Employee Benefit Plan . " Target Employee Benefit Plan" means, in any jurisdiction, any scheme, fund, arrangement, plan or agreement, custom or practice (whether funded or unfunded) under which Smithfield or Smithfield France or any of the Subsidiaries provides, is liable or contingently liable to provide or has agreed to provide (or to which Smithfield or Smithfield France or any of the Subsidiaries contributes, is liable or contingently liable to contribute or has agreed to contribute to the provision) of any Retirement Benefits for or in respect of any employee but excluding any State Social Security or Industry-Wide Plan .

1.61 Third-Party Intellectual Property Rights . " Third Party Intellectual Property Rights" shall have the meaning give to such term in Section 3.34 hereof. 1.62 Tax . " Tax" shall mean any tax (including income tax, profit tax, withholding tax, pre9compte, capital gains tax, value-added tax, sales tax, property tax, gift tax, real estate tax,


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excise tax, retirement, unemployment, CSG, CRDS and social security contributions in any applicable jurisdiction), tariff or duty (including any stamp or customs duty) and any fine, penalty, interest or addition to tax imposed, assessed or collected by or under the authority of any governmental body; and Taxes shall be construed accordingly. 1.63 Tax Regulations . " Tax Regulations" shall mean any Tax or custom law, statute, decree, ordinance, rule, order or other text of application of the said law applicable in a given country as well as any international treaty (including the derivative law directive, regulations or others of this treaty). 1.64 Tax Return . " Tax Return" shall mean any return, report, information return, statement, declaration or other document (including any related or supporting information) filed or required to be filed with any Governmental Authority in connection with any determination, assessment or collection of any Tax or other administration of any laws, regulations or administrative requirements.

1.65 Third Party Right . " Third Party Right" shall mean any interest or equity of any person (including any right to acquire, option or right of pre emption or conversion or similar rights or agreements) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention, right of set off, trust arrangement for the purpose of providing security or any other security agreement or arrangement of any kind, or any agreement to create any of the above.

1.66 Transaction Material Adverse Effect . " Transaction Material Adverse Effect" shall mean a material adverse change in or effect on the financial condition, business, properties, results of operations or prospects of (i) the European Business (as defined in the Purchase Agreement) and (ii) Smithfield France and the Subsidiaries, taken as a whole; provided , however , that " Transaction Material Adverse Effect" shall not include the effect of any change or effect arising out of or attributable to (a) the markets in which the European Business or Smithfield France and the Subsidiaries operate generally, (b) general economic or political conditions (including those effecting the securities markets), (c) the public announcement of this Agreement or the Purchase Agreement or of the consummation of the transactions contemplated hereby and thereby, (d) any change arising in connection with acts of war (whether or not declared), sabotage or terrorism, military actions or the escalation thereof or other force majeure events occurring after the date hereof or (e) changes in Laws or accounting rules.

ARTICLE II

CONTRIBUTION AND SHARE ISSUANCE 2.1 Contribution and Share Issuance .

(a) At the Closing, Smithfield shall (i) contribute or cause to be contributed to the Company (x) the Smithfield Cash Contribution, by wire transfer of immediately payable funds, and (y) the Contributed Shares and (ii) enter into the Earn-Out Agreement.

(b) At the Closing, OCM shall (i) contribute or cause to be contributed to the Company the OCM Cash Cont ...