S-1

As filed with the Securities and Exchange Commission on July 22, 2009

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

under

The Securities Act of 1933

JBS USA Holdings, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	2011	20-1413756
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

JBS USA Holdings, Inc.

1770 Promontory Circle

Greeley, Colorado 80634

(970) 506-8000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

André Nogueira de Souza

Chief Financial Officer

JBS USA Holdings, Inc.

1770 Promontory Circle

Greeley, Colorado 80634

(970) 506-8000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Donald E. Baker John R. Vetterli White & Case LLP 1155 Avenue of the Americas New York, New York 10036 (212) 819-8200 Arthur D. Robinson John C. Ericson Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 (212) 455-7086

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:   ¨.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨ Accelerated filer  ¨ Non-accelerated filer  x Smaller reporting company  ¨

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)	Amount of registration fee
Common stock, par value $0.01 per share	$2,000,000,000	$111,600

(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. Includes amounts attributable to shares of common stock that may be purchased by the underwriters to cover over-allotments, if any. See “Underwriting.”

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated                    , 2009

Prospectus

             shares

JBS USA HOLDINGS, INC.

Common stock

This is the global initial public offering of our common stock, which consists of an international offering in the United States and other countries outside Brazil and a concurrent offering in the form of Brazilian depositary receipts, or “BDRs,” in Brazil. Each BDR represents              shares of our common stock. Of the shares of common stock to be sold in the offering, we are selling             shares and JBS Hungary Holdings Kft., or the selling stockholder, is selling             shares. We will not receive any of the proceeds from the shares of common stock being sold by the selling stockholder. We expect the initial public offering price to be between $             and $             per share.

The international offering is being underwritten by the international underwriters named in this prospectus. The Brazilian offering is being underwritten by a syndicate of Brazilian underwriters. The closing of the Brazilian offering will be conditioned upon the closing of the international offering.

Prior to the global offering, there has been no public market for our common stock. We expect to apply for listing of our common stock on The New York Stock Exchange under the symbol “JBS.” We also expect to apply to list the BDRs on the São Paulo Stock Exchange under the symbol “            .”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds to JBS USA Holdings, Inc., before expenses	$	$
Proceeds to the selling stockholder, before expenses	$	$

We have granted the international underwriters an option for a period of 30 days to purchase from us up to             additional shares of our common stock to cover over-allotments, if any, in connection with the international offering.

Investing in our common stock involves a high degree of risk. See “Risk factors” beginning on page 20 to read about certain factors you should consider before buying shares of our common stock.

The underwriters expect to deliver the shares on or about                    , 2009.

J.P.Morgan BofA Merrill Lynch

                    , 2009

Table of contents

Prospectus summary	1
The offering	12
Summary historical and pro forma financial data	15
Risk factors	20
Special note regarding forward-looking statements and industry data	36
Basis of presentation	38
Use of proceeds	39
Dividend policy	40
Capitalization	41
Dilution	43
Selected historical consolidated financial data	45
Unaudited pro forma combined financial statements	49
Management’s discussion and analysis of financial condition and results of operations	55

Business	95
Management	119
Compensation discussion and analysis	125
Certain relationships and related party transactions	135
Principal and selling stockholder	139
Description of capital stock	143
Shares eligible for future sale	148
Certain material United States federal income and estate tax considerations for non-U.S. holders	151
Underwriting	154
Legal matters	161
Experts	161
Where you can find more information	162
Index to consolidated financial statements	F-1

You should rely only on the information contained in this prospectus or in any free writing prospectus prepared by or on behalf of us and delivered or made available to you. Neither we nor the selling stockholder have authorized anyone to provide you with information different from that contained in this prospectus. We and the selling stockholder are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in a jurisdiction outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until                     , 2009, all dealers that buy, sell or trade in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscriptions.

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Prospectus summary

The following summary highlights information contained elsewhere in this prospectus. Before deciding whether to buy shares of our common stock, you should read this summary and the more detailed information in this prospectus, including our consolidated financial statements and related notes and the discussion of the risks of investing in our common stock in the section entitled “Risk factors.” Except as the context otherwise requires, references in this prospectus to JBS USA Holdings, Inc. and the terms “we,” “us” and “our” refer to JBS USA Holdings, Inc. and its subsidiaries. When we present financial data “on a pro forma basis,” it means that the financial data as of and for the fiscal year ended December 28, 2008 and as of and for the fiscal quarter ended March 30, 2008 reflects our acquisition of Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland, Inc., or JBS Packerland), which included the acquisition of 100% of Five Rivers Ranch Cattle Feeding LLC, or Five Rivers, as if it had occurred at the beginning of the period presented as further discussed under “Unaudited pro forma combined financial information.”

JBS USA Holdings, Inc.

We are a global leader in beef and pork processing with approximately $15.4 billion in net sales for the fiscal year ended December 28, 2008 on a pro forma basis. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. As a standalone company, we would be the largest beef processor in the world. We also own and operate the largest feedlot business in the United States.

We process, prepare, package and deliver fresh, processed and value-added beef and pork products for sale to customers in over 60 countries on six continents. Our operations consist of supplying fresh meat products, processed meat products and value-added meat products. Fresh meat products include refrigerated beef and pork processed to standard industry specifications and sold primarily in boxed form. Our processed meat offerings, which include beef and pork products, are cut, ground and packaged in a customized manner for specific orders. Additionally, we process lamb and mutton products. Our value-added products include moisture-enhanced, seasoned, marinated and consumer-ready products. We also provide services to our customers designed to help them develop more comprehensive and profitable sales programs. Our customers are in the food service, international, further processor and retail distribution channels. We also produce and sell by-products that are derived from our meat processing operations, such as hides and variety meats, to customers in the clothing, pet food and automotive industries, among others.

We are a wholly owned indirect subsidiary of JBS S.A., the world’s largest beef producer, which has a daily slaughtering capacity of 73,940 head of cattle. In the fiscal quarter ended March 29, 2009, we represented approximately 78% of JBS S.A.’s gross revenues. Over the past few years, JBS S.A. has acquired several U.S. and Australian beef and pork processing companies and slaughterhouses, which now comprise JBS USA Holdings, Inc. and its subsidiaries:

• on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

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• on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

• on October 23, 2008, we acquired Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland), which included the 100% acquisition of Five Rivers. We refer to this transaction as the JBS Packerland Acquisition.

In the United States, we conduct our operations through eight beef processing facilities, three pork processing facilities, one lamb processing facility, one case-ready beef and pork facility, one hide tannery, seven leased regional distribution centers, two grease-producing facilities, and 11 feedlots operated by Five Rivers, which supply approximately 30% of our fed cattle needs. In Australia, we operate ten beef and small animals processing facilities, including the largest and what we believe is the most technologically advanced facility in the country, and five feedlots which supply approximately 18% of our fed cattle needs. Our small animals processing facilities in Australia process hogs, lamb and sheep, or smalls. Our Australian facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the capacity to process approximately 28,600 cattle, 48,500 hogs and 4,500 lambs daily in the United States and 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations.

Our business operations are organized into two segments:

• our Beef segment, through which we conduct our domestic beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition, and our international beef, lamb and sheep processing businesses that we acquired in the Tasman Acquisition; and

• our Pork segment, through which we conduct our domestic pork and lamb processing business.

We had consolidated net sales of $15.4 billion on a pro forma basis in the fiscal year ended December 28, 2008, and we had consolidated net sales of $3.2 billion in the fiscal quarter ended March 29, 2009. In the same periods, we had gross profit of $608.0 million on a pro forma basis and $73.0 million, respectively, and Adjusted EBITDA of $531.8 million on a pro forma basis and $66.1 million, respectively. Our net income for the fiscal year ended December 28, 2008 was $192.1 million on a pro forma basis and $2.3 million for the fiscal quarter ended March 29, 2009. Our Beef and Pork segments represented 84% and 16%, respectively, of our net sales on a pro forma basis during the fiscal year ended December 28, 2008, and 84% and 16%, respectively, of our net sales during the fiscal quarter ended March 29, 2009.

Industry overview

Beef

United States

Beef products are second to chicken as the largest source of meat protein in the United States. The United States has the largest grain-fed cattle industry in the world and is the world’s largest producer of beef, which is primarily high-quality grain-fed beef for domestic and export use. The domestic beef industry is characterized by daily price changes based on seasonal consumption patterns and overall supply and demand for beef and other proteins in the United States and abroad. Cattle prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

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Beef processors include vertically integrated companies, who own and raise cattle on feed for use in their processing facilities, and pure processors, who do not own cattle on feed. Vertically integrated beef processors can be subjected to significant working capital demands, since cattle typically feed in the yards for 90-180 days without any revenue generation until processed. Additionally, as cattle on feed consume feed with a replacement price that is subject to market changes, vertically integrated beef processors have direct financial exposure to the volatility in corn and other feedstock prices. Pure U.S. beef processors generally purchase cattle in the spot market or pursuant to market-priced supply arrangements from feedlot operators, process the cattle in their own facilities and sell the beef at spot prices. Cattle are usually purchased at market prices and held for less than a day before processing, thus such processors are not exposed to changing market prices over as great a time span as vertically integrated beef processors. Pure beef processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency rather than by fluctuations in prices of cattle and beef.

During the past few decades, consumer demand for beef products in the United States has been in line with population growth, which is the primary driver of aggregate demand. Export demand has fluctuated widely due to the closing of certain international markets following the discovery of isolated cases of bovine spongiform encephalopathy, or BSE (also commonly referred to as mad cow disease), in 2003 and 2004, and the sporadic re-opening of such markets. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth. As consumers’ economic circumstances improve, they increasingly shift their diets to protein. Industry-wide export sales have been ramping up from 2004 through mid-2009, trending toward pre-2003 levels.

Between 2006 and January 2008, our largest U.S. beef competitor eliminated two million head per year of slaughter capacity in four plants. This represented a reduction of nearly 7% of total U.S. industry-wide capacity and has helped improve the supply/demand balance of beef in the U.S. and export markets.

Australia

Australia has traditionally been a supplier of grass-fed beef. Grass is a much cheaper feed source than grain. With the vast amount of land in Australia available for cattle raising and feeding, grass is the predominant feeding method. Australia also has a grain-fed beef cattle sector which primarily supplies processed cattle for export to Japan and South Korea and to the domestic market. Grain-fed cattle accounted for 27% of the adult cattle slaughter in 2008, representing 34% of total beef production in Australia. The majority of cattle slaughtered in Australia are range or grass-fed and not finished in the feedlots. Australia has been one of the leading beef export countries for more than a decade. We believe that approximately 75% of exports have historically been sold to the United States, Japan and South Korea, but Australian beef has been increasingly exported to Russia, Taiwan, Mexico, Chile and the United Arab Emirates, among other countries. Although Australian meat packers, including our Australian operations, benefited from the closure of many markets to North American beef as a result of BSE detections in North American cattle, Australian exports have remained strong following the reopening of international markets to North American beef.

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Global exports

We sell our products in over 60 countries on six continents, and exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. The international beef market is divided into two blocks based on factors that include common sanitary criteria, such as restrictions on imports of fresh beef from countries that permit foot-and-mouth disease, or FMD, vaccination programs or beef treated with growth hormones.

The United States has been an FMD-free country since the eradication of the disease, and it does not implement vaccination programs. However, the United States treats most of their cattle with growth hormones, and, accordingly, the European Union and several other countries have banned imports of beef treated with growth hormones from the United States.

In contrast, Brazil and Argentina have prohibited the use of growth hormones on their cattle. JBS S.A. is a large exporter of beef to the European Union.

We believe that our U.S. export operations of fresh beef today do not directly compete with our parent company’s Brazilian and Argentine export operations of fresh beef in our main export destinations. Consequently, we do not have formal arrangements with JBS S.A. to coordinate our exports in our export markets. However, to the extent that sanitary restrictions change in the future, we could become direct competitors of our parent company in certain export markets.

We do compete with JBS S.A. to a limited degree, however, for example, to the extent that our Australian operations export to the European Union, the Middle East and Southeast Asia, which are also export markets for JBS S.A. We do not believe our Australian business’ competition with JBS S.A. in these markets has a material adverse effect on our current business.

Pork

Pork products are the most widely consumed meat in the world. Pork is the third largest source of meat protein in the United States, behind chicken and beef. The United States, which is widely regarded as a world leader in food safety standards, is the third largest producer worldwide, behind China and the European Union, and one of the largest exporters of pork products.

The domestic pork industry is characterized by daily price changes based on seasonal consumption patterns and overall supply/demand for pork and other meats in the United States and abroad. Generally, domestic and worldwide consumer demand for pork products drive pork processors’ long-term demand for hogs. To operate profitably, hog processors seek to acquire or raise hogs at the lowest possible costs and minimize processing costs by maximizing plant operating rates. Hog prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

Pork processors include vertically integrated companies, which own and raise hogs on feed for use in their processing facilities, and pure processors, who do not own hogs on feed. Vertically integrated pork processors can be subjected to significant financial impact from working capital demands, since hogs feed in the yards for approximately 180 days without revenue generation until processed. Additionally, since hogs on feed consume feed with a replacement price that is subject to market changes, vertically integrated pork processors have direct financial exposure to

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the volatility in corn and other feedstock prices. Pure processors generally purchase finished hogs under long-term supply contracts at prevailing market prices, process the hogs in their own facilities and sell the finished products at spot prices. Finished hogs are typically purchased at market prices and held for less than one day before processing, thus pure processors are not exposed to changing market prices over as great a time span as vertically integrated processors. Pure pork processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of hogs and pork.

While affected by seasonal consumption patterns, demand for pork has remained consistently strong. During the past few decades, population growth has been the primary driver of increased aggregate pork product demand in the United States. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth: as consumers’ economic circumstances improve, they increasingly shift their diets to protein. To satisfy the growing global demand, U.S. pork exports have more than tripled in the past decade. The top three leading export markets for U.S. pork and pork variety meats are Japan, Mexico and Canada.

Competitive strengths

We are well positioned as a leading meat processor in the U.S. and Australia. We have implemented significant operational improvements over the last several years, resulting in increases in throughput, additional value-added products, improved food safety and industry-leading worker safety. Our competitive strengths include:

Scale and leading market positions in beef and pork industries

As a standalone company we would be the largest beef processor in the world. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. With a slaughtering capacity of 37,290 heads per day in beef, 48,500 heads per day in hogs and over 19,500 heads per day in smalls, our scale provides us with operational flexibility to:

• source our products based on the most favorable conditions of input costs,

• diversify our operations to minimize sanitary risk, and

• attain proximity to our raw materials and end customers given our geographical reach, saving freight and storage costs.

During the past few decades, consumer demand for beef and pork products in the United States has been increasing primarily as a result of population growth. Global protein demand has remained strong due to continued population growth and economic growth in developing countries. Despite the current economic recession, we believe protein demand will continue to increase in the long-term in conjunction with rising living standards and a growing middle class in developing countries. As part of JBS S.A., the world’s leading beef producer, and given the industry’s significant barriers to entry, we believe we are well-positioned to serve this growing global demand.

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Diversified business model with international reach

Our business is well diversified across proteins and all major distribution channels, as well as geographically with respect to production and distribution.

• Diversified protein offerings:    We sell beef, pork and lamb products. Selling multiple proteins offers us the opportunity to cross-sell to our customers and to diversify typical industry risks such as industry cycles, the impact of species-based diseases and changes in consumer protein preferences. As a result of our multiple proteins, our businesses, when taken as a whole, are less likely to be severely impacted by issues affecting any one protein. Additionally, our JBS Packerland beef processing facilities are engineered to provide us with the flexibility to process a variety of cattle, which allows further diversification of our beef product offerings. For example, our JBS Packerland facilities are engineered to process both cattle raised for beef production and cattle bred for dairy production. This flexibility enables us to shift our operations on a daily basis between beef and dairy cattle depending on market availability, seasonal demand and relative margin attractiveness, setting us apart from many beef processing facilities in the United States.

• Sales and distribution channel diversification:    We benefit from our diversified sales and distribution channels, which include national and regional retailers (including supermarket chains, independent grocers, club stores and wholesale distributors), further processors (including those that make bacon, sausage and deli and luncheon meats), international markets and the food service industry (including food service distributors, which service restaurant and hotel chains and other institutional customers). We sell our products to over 6,000 customers worldwide with no customer accounting for more than 4.5% of our net sales. This reduces our dependence on any market or customer and provides multiple channels for potential growth. In the retail segment, we further benefit from a variety of widely recognized brands, including Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 among others. We also manufacture products for some of our main customers’ private label brands.

• Geographic diversification:    We sell our products in over 60 countries on six continents. During fiscal 2008, on a pro forma basis, and the fiscal quarter ended March 29, 2009, we had international sales of $3.8 billion and $0.7 billion, respectively. Overall, exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. Exports are an important part of our strategy and a competitive advantage. In fiscal 2008, we supplied Japan and South Korea with 36% and 47% of their total beef imports, respectively, according to Meat & Livestock Australia Limited. We believe we were the largest supplier of beef imported into Japan and South Korea in 2008. Our imports of beef to the United States from Australia totaled 32% of total Australian beef imports to the United States during fiscal 2008. Our geographic diversification enables us to reduce exposure to any one market and concurrently have access to all export markets. Additionally, having access to international markets allows us to potentially generate higher returns as many of our export products, such as tongue, heart, kidney and other variety meats, garner higher demand and pricing in foreign markets, particularly in Asia.

Our processing platforms in the United States and Australia, which are two major beef producing countries, provide us with enough geographic diversification and operating flexibility to satisfy

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demand depending on market conditions and sanitary restrictions. For example, our facilities in Dinmore, Beef City, Brooklyn and Longford, Australia accommodate non-hormone-treated fed cattle allowing us to market our products to the European Union (which prohibits imports of hormone-treated products). Accordingly, each of these facilities is eligible to ship to the European Union. We also benefit from greater international market access through our Worthington pork plant, which is one of only three facilities in the United States certified for export to the European Union. Additionally, our JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs relative to cattle processing facilities in more rural locations.

While the closure of foreign markets to U.S. beef in 2003 negatively impacted the U.S. beef industry, our Australian beef operation retained access to those markets and benefited from reduced competition. Furthermore, we have a U.S. sales office which annually sources over $160 million of meat products from our Australian facilities into the U.S. market—products that provide U.S. customers, particularly in the food service and further processing channels, with a source of lean protein.

World class operations

We believe our operations are among the most efficient in the industry. We operate three of the six highest-throughput beef facilities in the United States. Furthermore, we continuously focus on improving our operating efficiencies. We have developed a program to improve the coordination of our planning, forecasting, scheduling, procurement and manufacturing functions to drive performance in the supply chain. Our efforts in 2008 were focused on increasing beef yields, reducing operational costs and lowering overhead. One of the key initiatives in delivering on this strategy was returning our Greeley, Colorado processing facility to its originally designed capacity as a two-shift operation. Producing more volume in the same length of time reduces our cost per pound. As a measure of our progress, excluding the JBS Packerland Acquisition and the Tasman Acquisition, during the fiscal year ended December 28, 2008, our Beef and Pork segments demonstrated an 8.5% and 3.8% increase in throughput, respectively, compared to the fiscal year ended December 30, 2007. As a result, we remain focused on leveraging our fixed cost base to improve our operating margins.

Strong balance sheet and limited derivative exposure relative to our peers

We have lower leverage than certain of our competitors. Moreover, since we are not vertically integrated in our U.S. operations, we are not significantly exposed to commodity hedging losses. We believe that our business and capital structure provides us with flexibility to respond to market conditions and to capitalize on business opportunities, particularly in the current credit-constrained environment.

Established customer relationships

We have developed long-standing relationships with numerous well-established, global customers, many of whom have been doing business with us for more than 20 years. We serve many of the largest food service distributors, quick-service restaurants and retail chains in the United States. Additionally, we are focused on developing close, mutually beneficial relationships

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with our customers, who we believe view us as a long-term strategic partner and consider us an extended part of their operations. We believe that the high-quality long-standing relationships we have developed provide us with revenue stability and forecasting transparency.

Proven management team and high performance work force

We have a proven senior management team whose experience in the protein industry has spanned numerous market cycles. Since the Swift Acquisition, we have simplified our management structure through headcount reduction and streamlined decision-making processes, effectively empowering our employees. We also benefit from management ideas, best practices, and talent shared with the seasoned management team at our parent company, who has over 50 years of experience operating beef processing facilities in Brazil. Members of JBS S.A.’s South American management team have been appointed to management positions in our United States and Australian operations. In addition, members of our Australian management team have been appointed to management positions in the United States, and vice-versa. Moreover, our management and that of our parent company have significant experience in acquiring and successfully integrating operations as evidenced by the more than 30 acquisitions made by JBS S.A. in the last 15 years, and more recently the integration of the JBS Packerland Acquisition and the Tasman Acquisition by us.

Our strategy

Prior to 2002, our predecessor was owned and operated by a multinational food company. From 2002 to 2007, our predecessor was owned by a private equity company. Since the Swift Acquisition in July 2007, we have significantly changed our business strategy. Our current strategy is to continue to grow our business’ revenues and profitability through the following strategic initiatives:

Continuously improve profitability through process optimization

We continue to focus on enhancing our production yields and operational abilities and improving our information technology systems, with a view toward reducing our operating costs and improving throughput yields. Our initiatives in 2008 geared towards cost reductions led to approximately $90 million in cost savings as compared to the fiscal year ended December 30, 2007. These cost reductions included renegotiating vendor contracts, insourcing of contract services previously outsourced and plant cost initiatives. We expect to further improve our operating performance by adopting best practices and leveraging additional operating expertise that we have access to as a member of the JBS S.A. group. Separately, we have been able to reduce operating costs by, among other measures, eliminating our reliance on third-party consultants and performing certain services in-house that were formerly outsourced at a premium. We have decreased our selling, general and administrative expenses by eliminating multiple layers of management positions and by requiring our service providers to participate in competitive bidding processes. As a measure of this progress, we have reduced annual selling, general and administrative expenses by over $24.5 million, or 20.7%, for the fiscal year ended December 28, 2008, and in 2008 ranked as having the lowest ratio of selling, general and administrative expense to net sales among publicly traded protein companies in the United States. In addition to contract renegotiations and management efficiencies, operating efficiencies

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have led to annual incremental cost savings and margin improvements of approximately $115 million for the fiscal year ended December 28, 2008. These operating efficiencies include adding a second shift at our Greeley plant, our yield improvement projects, including introduction of a pork casing sorting system (a margin enhancement strategy brought to the United States by JBS S.A.) in all of our U.S. pork plants, improved deboning training and cutting techniques on the fabrication floor and increased value-added production.

Continue to successfully integrate recent acquisitions and selectively pursue additional value-enhancing growth opportunities

We have a proven track record of successfully acquiring and integrating companies, resulting in production and operating synergies. In 2008, we increased production through the Tasman Acquisition and the JBS Packerland Acquisition. These acquisitions have increased our daily cattle processing capacity from approximately 26,500 to 37,290 cattle. Additionally, as a result of the Tasman Acquisition, we added the ability to process 15,000 smalls per day in Australia. The Tasman Group is currently fully integrated with our legacy northern Australia operations in livestock procurement and sales. We expect to complete full integration of all information technology systems by the end of 2009. Similarly, JBS Packerland is fully integrated with respect to our customer credit, legal, treasury, financial reporting, insurance procurement and tax functions and certain employee benefit plans. We have identified and captured shared purchasing opportunities in certain packaging areas and continue to identify additional opportunities as contracts expire. We intend to complete our operational and financial information technology integration of JBS Packerland by September 2009. We will continue to work to maximize potential synergies from these acquisitions. Additionally, we intend to continue to selectively pursue additional value-enhancing growth opportunities as they arise.

Increase sales and enhance margins by significantly expanding our direct distribution network

Since the Swift Acquisition, we have built a leading global production platform. Capitalizing on our production platform, we are now pursuing a global direct distribution strategy that will enable us to improve our ability to service current customers and allow us the opportunity to directly service new customers, primarily in the food service and retail channels. Our historical sales strategy has relied upon the use of third-party distributors who purchase our product and resell it to end-user customers at higher prices, retaining the incremental margin for their own benefit. We intend to shift a significant part of our sales efforts into direct sales to end-user customers in order to capture this incremental margin. This is consistent with our approach of in-sourcing activities previously outsourced in order to eliminate margin leakage to third parties. Direct distribution will include regional distribution centers, portion control fabrication, or “cutting room” facilities (taking primal cuts which we would have sold only as whole muscle cuts to third parties and fabricating them into individual serving chops or steaks), and direct sales and shipment of products to individual end-user customers by our sales personnel using our own delivery vehicles. This direct distribution strategy will require us to substantially expand our distribution network and sales force domestically and internationally by both acquisitions and greenfield investments. During the next five years, we intend to make substantial investments, including with a portion of the net proceeds of this offering, in order to significantly expand our direct distribution network. Ultimately, we believe that our investment in this direct distribution strategy will allow us to capture incremental sales and operating margin opportunities.

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Increase processed and value-added offerings

Historically, we have realized greater margins by offering value-added products and services to our customers. These offerings reduce their costs and help stimulate consumer demand. Examples of our value-added product and service offerings include additional processing to create sliced, cubed and tenderized products and consumer-ready chops and steaks. Similarly we also provide marinated and seasoned meats. These services help reduce labor costs for our food service customers and are examples of our focus on providing our customers with solutions to increase their beef and pork sales.

We believe our retail and food service customers will continue to value more convenient processed products from us. We currently operate 20 plants that produce beef and pork products that are cut, ground and packaged in a customized manner for specific orders that are primarily sold through the food service and retail distribution channels. We intend to expand our processed offerings through line expansions, acquisitions and/or greenfield investments. Increasing our value-added offerings is not limited to growth in processing capabilities, as our Five Rivers operations provide us the ability to design feeding programs that allow us to consistently deliver products that meet the exact specifications desired by our customers. We believe that increased value-added capabilities will drive margin improvement and increase the value we provide to customers.

Promote innovation across the value chain

We believe we can increase our profitability by developing and implementing innovative process and product improvements across the value chain. Our innovations include implementing a casing sorting system utilized in Brazil which enables the sorting of hog intestines (casings) for sale to end-users from all of our U.S. pork processing facilities, resulting in significantly improved margins. Additionally, we have developed and implemented energy conversion and recovery processes including real-time processes by which byproducts of purchased natural gas or grease produced in our rendering operations are converted into useable fuels and a methane recovery process resulting in useable methane gas that is subsequently resold in North American pipelines. We have also instituted Halal processing capabilities in our Australian operations, providing us with the opportunity to expand our exports to Muslim customers located in the Middle East, which we believe sets us apart from our competitors in Australia. We will continue to seek to develop innovative process and product improvements across the value chain.

Maintain leadership in food and employee safety

We prioritize our food and employee safety objectives in order to accomplish two principal goals. First, we focus on maintaining a high standard of food safety in order to ensure the quality of our products and attempt to avoid the potential adverse market reaction that is associated with recalls that occur from time to time in the meat processing industry. Second, we strive to continuously improve our employee safety in order to increase the efficiency of our facilities and reduce our operating costs. Since January 2003, we have reduced the number of lost-time injury events by approximately 50% at our beef processing facilities and by approximately 45% at our pork processing facilities through design and implementation of a comprehensive multi-faceted employee safety and injury prevention program.

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Recent developments

On April 27, 2009, our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued $700.0 million in senior unsecured notes due May 2014 bearing interest at 11.625%, which, after deducting initial purchaser discounts, commissions and expenses in respect of this notes offering, generated net proceeds of approximately $650.8 million. The notes have semi-annual interest payment dates in May and November, commencing November 2009. The proceeds of the notes issuance were used to repay $100.0 million of borrowings under our secured revolving credit facility and to repay $550.8 million of the outstanding principal and accrued interest on intercompany loans to us from a subsidiary of JBS S.A., as described below.

As of March 29, 2009, we owed to JBS S.A. an aggregate of $658.6 million under various intercompany loans, which were subsequently assigned to JBS HU Liquidity Management LLC (Hungary), a wholly owned, indirect subsidiary of JBS S.A. The proceeds of these intercompany loans were used for the Tasman Acquisition and the JBS Packerland Acquisition, as well as to fund our operations. On April 27, 2009, these intercompany loan agreements were consolidated into one loan agreement. The maturity dates of the intercompany loans were extended to April 18, 2019, and the interest rate was changed to 12% per annum. The net proceeds of the offering of the 11.625% senior unsecured notes due 2014 (other than $100.0 million) were used to repay accrued interest and a portion of the principal on these intercompany loans. As of May 31, 2009, we owed an aggregate principal amount of $133.0 million under the consolidated intercompany loan agreement. See “Certain relationships and related party transactions.”

Corporate information

JBS USA Holdings, Inc. was incorporated in Delaware on July 23, 2004. We are a holding company and a direct, wholly owned subsidiary of JBS Hungary Holdings Kft., the selling stockholder, and a wholly owned, indirect subsidiary of JBS S.A. JBS S.A. is a publicly traded company in Brazil and the world’s largest beef producer. On July 11, 2007, JBS S.A. acquired Swift Foods Company for an aggregate purchase price of $1,470.6 million. JBS S.A. made this acquisition through J&F Acquisition Co., which thereafter merged with Swift Foods Company and changed its name to JBS USA, Inc., and subsequently JBS USA, Inc. changed its name to JBS USA Holdings, Inc.

Our corporate headquarters and principal executive offices are located at 1770 Promontory Circle, Greeley, Colorado, and our telephone number is (970) 506-8000. Our website is www.jbsswift.com. Information contained on our website is not incorporated into, and does not constitute a part of, this prospectus.

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The offering

The following summary contains basic information about the shares and is not intended to be complete. It does not contain all of the information that is important to you. For a more complete understanding of the shares, please read the section of this prospectus entitled “Description of capital stock.”

Issuer JBS USA Holdings, Inc.

Selling stockholder JBS Hungary Holdings Kft.

Global offering The global offering consists of the international offering and the concurrent Brazilian offering.

International offering We and the selling stockholder are offering shares of common stock through the international underwriters in the United States and other countries outside Brazil.

Brazilian offering Concurrently with the international offering, we and the selling stockholder are offering shares of common stock in the form of BDRs through the Brazilian underwriters in Brazil.

Common stock offered by us              shares.

Common stock offered by the selling stockholder              shares.

Common stock to be outstanding after this offering              shares (or              shares if the underwriters exercise in full their option to purchase additional shares to cover over-allotments, if any).

Offering price We expect the offering price to be between $            and $             per share.

Over-allotment option We have granted the international underwriters an option for a period of 30 days to purchase from us up to additional shares of our common stock to cover over-allotments, if any.

Use of proceeds We expect to receive net proceeds from the sale of our common stock in this global offering, after deducting the underwriting discount and other estimated expenses, of approximately $              million. We intend to use a portion of our net proceeds from this offering to selectively pursue value-enhancing growth opportunities as they arise. For example, during the next five years, we intend to make substantial investments in order to significantly expand our direct distribution

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network. We also intend to use a portion of the net proceeds from this offering for working capital and general corporate purposes. See “Use of proceeds.”

We will not receive any of the sales proceeds associated with common stock offered by the selling stockholder.

Dividend policy Our board of directors will adopt a dividend policy pursuant to which any future determination relating to dividend policy will be made at its discretion and will depend on a number of factors, including our business and financial condition, any covenants under our debt agreements and our parent company’s legal obligation to distribute dividends described below. However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant.

Our parent company, JBS S.A., is required by the Brazilian corporate law to distribute on an annual basis dividends representing 25% of its net income (as calculated under generally accepted accounting principles in Brazil, subject to certain adjustments mandated by Brazilian corporate law) unless its board of directors has determined, in its discretion, that such distribution would not be advisable or appropriate in light of its financial condition.

Voting rights Holders of our common stock will be entitled to one vote per share on all matters submitted to a vote of our stockholders.

Proposed New York Stock Exchange and São Paulo Stock Exchange symbols We intend to apply to have our common stock listed on The New York Stock Exchange under the trading symbol “JBS.”

We expect to apply to have the BDRs listed on the São Paulo Stock Exchange under the symbol “             .”

Directed share program At our request, the underwriters have reserved up to    % of the shares of common stock for sale at the initial public offering price to persons who are directors, officers or employees, or who are otherwise associated with us, through a directed share program. The sales will be made by                        through a directed share program. We do not

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know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. See “Underwriting.”

Lock-up agreements In connection with this offering, we, the selling stockholder and our executive officers and directors will enter into lock-up agreements with the underwriters of this global offering under which neither we nor they may, for a period of 180 days after the date of this prospectus, directly or indirectly sell, dispose of or hedge, or file or cause to be filed a registration statement with the SEC under the Securities Act or the Brazilian Securities Commission (Comissão de Valores Mobiliários, or “CVM”) relating to, any shares of common stock, including BDRs representing such shares, or any securities convertible into or exchangeable for shares of common stock, including BDRs representing such shares, without the prior written consent of J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated on behalf of the international underwriters and the Brazilian underwriters.

Certain relationships and related party transactions Please read “Certain relationships and related party transactions” for a discussion of business relationships between us and related parties and “Underwriting” for information regarding relationships between us and the underwriters.

Risk factors You should carefully read and consider the information set forth under “Risk factors” and all other information set forth in this prospectus before investing in our common stock.

Unless otherwise indicated, all information contained in this prospectus assumes:

• no exercise of the international underwriters’ option to purchase up to                      additional shares of common stock to cover over-allotments, if any, and

• that the common stock to be sold in this global offering is sold at $            , which is the midpoint of the range set forth on the cover page of this prospectus.

Except as otherwise noted, the number of shares of our common stock to be outstanding after this global offering:

• excludes              shares available for future awards under our stock option plan (see “Compensation discussion and analysis—2009 stock incentive compensation plan” for more information), and

• gives effect to a                     -for-one stock split to take place immediately prior to completion of this offering.

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Summary historical and pro forma financial data

The following tables set forth our summary historical and unaudited pro forma financial data at the dates and for the periods indicated.

Our summary historical financial information contained in this prospectus is derived from:

(1) our predecessor’s audited historical consolidated financial statements as of and for

(a) the fiscal year ended December 24, 2006, and

(b) the 198 days from December 25, 2006 through July 10, 2007 (the date immediately preceding the Swift Acquisition),

(2) our audited historical consolidated financial statements as of and for

(a) the 173 days from July 11, 2007 through December 30, 2007, and

(b) the fiscal year ended December 28, 2008,

(3) our unaudited historical consolidated financial statements for the fiscal quarter ended March 30, 2008, and

(4) our unaudited historical consolidated financial statements as of and for the fiscal quarter ended March 29, 2009.

The financial statements in (1)(a) and (b) and (2)(a) were audited by Grant Thornton LLP. The financial statements in (2)(b) were audited by BDO Seidman, LLP. The financial statements in (4) were reviewed by BDO Seidman, LLP.

The financial statements in (1), (2) and (4) above are included elsewhere in this prospectus, all of which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. We have prepared our unaudited historical consolidated financial statements on the same basis as our audited financial statements and have included all adjustments, consisting of normal and recurring adjustments, that we consider necessary to present fairly our financial position and results of operations for the unaudited periods. The results of operations for any partial period are not necessarily indicative of the results of operations for other periods or for the full fiscal year.

Also included in the tables below are unaudited pro forma combined balance sheet data as of March 29, 2009 and unaudited pro forma combined statement of operations data for the fiscal year ended December 28, 2008 and the fiscal quarter ended March 29, 2009. The summary unaudited pro forma combined statement of operations data for the fiscal year ended December 28, 2008 have been prepared as if

• our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom,

• the JBS Packerland Acquisition, and

• the acquisition of 50% of the equity interest in Five Rivers not previously owned by JBS Packerland had occurred as of December 31, 2007.

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The summary unaudited pro forma combined financial data for the fiscal year ended December 28, 2008 are derived from (1) our audited historical consolidated financial statements for the fiscal year ended December 28, 2008, (2) unaudited historical financial information of Smithfield Beef Group, Inc. for the period from January 1, 2008 through October 22, 2008 and (3) unaudited historical financial information of Five Rivers for the period from January 1, 2008 through October 22, 2008.

The summary unaudited pro forma combined financial data as of and for the fiscal quarter ended March 29, 2009 have been prepared as if our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom had occurred as of December 30, 2007, and the unaudited pro forma combined balance sheet data as of March 29, 2009 have been prepared as if such event had occurred on March 29, 2009. The unaudited pro forma combined financial data do not give any pro forma effect to the Tasman Acquisition as it was not material and did not constitute a significant subsidiary under Regulation S-X.

The summary unaudited pro forma combined financial data as of and for the fiscal quarter ended March 29, 2009 are derived from our unaudited historical consolidated financial statements for the fiscal quarter ended March 29, 2009.

Historically, Smithfield Beef Group, Inc. and Five Rivers reported their financial results using the last Sunday in April, and March 31, respectively, as their fiscal year ends. Accordingly, the historical amounts presented for JBS Packerland and Five Rivers in the unaudited pro forma combined financial information do not agree with Smithfield Beef Group, Inc.’s and Five Rivers’ financial statements appearing elsewhere in this prospectus.

All pro forma financial information in this prospectus is presented for informational purposes only and does not purport to be indicative of what would have occurred had (1) our issuance of our 11.625% senior unsecured notes due 2014, (2) the JBS Packerland Acquisition and (3) the acquisition of 50% of the equity interest in Five Rivers actually been consummated at the beginning of the period presented or as of the balance sheet date, as the case may be, nor is it necessarily indicative of our future combined operating results.

You should read the information contained in this table in conjunction with “Unaudited pro forma combined financial data,” “Selected historical consolidated financial data,” “Management’s discussion and analysis of financial condition and results of operations” and the financial statements and the accompanying notes thereto included elsewhere in this prospectus.

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	JBS USA Holdings, Inc.
	Predecessor						Successor
	As of and for the fiscal year ended December 24, 2006			As of and for the 198 days from December 25, 2006 through July 10, 2007			As of and for the 173 days from July 11, 2007 through December 30, 2007			As of and for the fiscal year ended December 28, 2008						As of and for the fiscal quarter ended March 30, 2008			As of and for the fiscal quarter ended March 29, 2009
in thousands, except earnings per share	Historical			Historical			Historical			Historical			Pro forma(1)			Historical			Historical			Pro forma(2)
	(audited)			(audited)			(audited)			(audited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Statement of operations data:
Net sales	$	9,691,432		$	4,970,624		$	4,988,984		$	12,362,281		$	15,445,791		$	2,461,657		$	3,196,339		$	3,196,339
Cost of goods sold		9,574,715			4,920,594			5,013,084			11,917,777			14,837,751			2,451,413			3,123,358			3,123,358
Gross profit (loss)		116,717			50,030			(24,100	)		444,504			608,040			10,244			72,981			72,981
Selling, general and administrative		158,783			92,333			60,727			148,785			218,697			31,042			61,598			61,598
Foreign currency transaction loss (gain)(3)		(463	)		(527	)		(5,201	)		75,995			75,995			(12,614	)		(5,075	)		(5,075	)
Other income		(4,937	)		(3,821	)		(3,581	)		(10,107	)		(10,470	)		(3,782	)		(1,475	)		(1,475	)
Loss (gain) on sales of property, plant and equipment		(666	)		(2,946	)		182			1,082			1,096			19			180			180
Interest expense, net		118,754			66,383			34,340			36,358			82,621			8,108			14,592			24,616
Total expenses		271,471			151,422			86,467			252,113			367,939			22,773			69,820			79,844
Income (loss) before income tax expense		(154,754	)		(101,392	)		(110,567	)		192,391			240,101			(12,529	)		3,161			(6,863	)
Income tax expense (benefit)		(37,348	)		(18,380	)		1,025			31,287			47,986			5,613			909			(2,600	)
Net income (loss)	$	(117,406	)	$	(83,012	)	$	(111,592	)	$	161,104		$	192,115		$	(18,142	)	$	2,252		$	(4,263	)
Basic and diluted net income (loss) per share of common stock(4)		N/A			N/A		$	(1,115,920.00	)	$	1,611,040.00		$	1,921,150.00		$	(181,420.00	)	$	22,520.00		$	(42,630.00	)
Basic and diluted pro forma net income (loss) per share of common stock(5)		N/A			N/A		$			$			$			$			$			$
Balance sheet data (at period end):
Cash and cash equivalents	$	83,420		$	44,673		$	198,883		$	254,785					$	77,365		$	156,737		$	154,322
Accounts receivable, net		334,341			365,642			417,375			588,985						438,515			514,160			514,160
Inventories		457,829			487,598			466,756			649,000						541,519			650,026			650,026
Property, plant and equipment, net		487,427			505,172			708,056			1,229,316						716,334			1,241,055			1,241,055
Total assets		1,538,597			1,578,350			2,165,815			3,315,571						2,125,696			3,308,815			3,309,315
Long-term debt		1,065,553			1,201,975			32,433			806,808						32,347			901,517			933,242
Total debt		1,067,503			1,203,912			810,718			878,319						395,154			977,048			1,008,773
Stockholder’s equity		(40,090	)		(98,818	)		838,818			1,388,250						1,281,075			1,394,939			1,394,939
Other financial data:
EBITDA(6)		53,122			9,829			(40,983	)		321,123			454,724			14,718			51,105			51,105
Adjusted EBITDA(6)		51,993			6,356			(46,002	)		398,200			531,815			2,123			66,110			66,110
Cash provided by (used in):
Operating activities		67,823			(110,661	)		(107,784	)		282,147						(128,911	)		51,003
Investing activities(7)		(11,923	)		(27,777	)		(39,409	)		(783,739	)					(15,376	)		(206,440	)
Financing activities		(25,947	)		100,492			346,711			571,265						22,135			55,689
Capital expenditures	$	47,294		$	33,700		$	33,461		$	118,320		$	137,958		$	11,676		$	35,189		$	35,189
Other operating data:
Heads killed, Beef		5,808			2,731			2,824			6,872			8,721			1,355			2,025			2,025
Heads killed, Pork		12,105			6,511			6,123			13,113			13,113			3,315			3,114			3,114

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(1) As adjusted to (i) give effect to the JBS Packerland Acquisition as if it had occurred at the beginning of the period presented, and (ii) give effect to the sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of proceeds therefrom as if they had occurred at the beginning of the period presented.

(2) As adjusted to give effect to the sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the use of proceeds therefrom as if it had occurred at the beginning of the period presented, in the case of statement of operations data, and give effect to the sale of all of our 11.625% senior unsecured notes due 2014 and the use of proceeds therefrom as if it had occurred at the end of the period presented, in the case of balance sheet data.

(3) Foreign currency transaction loss (gain) reflects changes in value of our U.S. dollar-denominated intercompany note payable and receivable within Australia due to changes in the exchange rate between the U.S. dollar and the Australian dollar.

(4) The capital structure of our predecessor company was significantly different from our capital structure. Prior to this offering, our capital structure consists of 100 common shares issued and outstanding, and we do not have any warrants or options that may be exercised. Accordingly, we do not believe our predecessor company’s earnings per share information is meaningful to investors and have not included such information.

(5) In calculating shares of our common stock outstanding, we give retroactive effect to the stock split to occur immediately prior to completion of this offering.

(6) EBITDA represents net income (loss) before income tax expense (benefit), interest expense, net, and depreciation and amortization. EBITDA and Adjusted EBITDA are presented as supplemental financial measurements in the evaluation of our business. Adjusted EBITDA as used in this prospectus represents EBITDA as defined in our 11.625% senior unsecured notes due 2014. Adjusted EBITDA, as used in our 11.625% senior unsecured notes due 2014, represents EBITDA as adjusted to exclude loss (gain) on sales of property, plant and equipment, non-recurring items and foreign currency transaction losses (gains). We present Adjusted EBITDA because we believe (1) the ratio of our net debt to Adjusted EBITDA is an important term of our 11.625% senior unsecured notes due 2014, (2) our 11.625% senior unsecured notes due 2014 is material indebtedness to our company and (3) information about this ratio is important to investors to understand our liquidity. See “Management’s discussion and analysis of financial condition and results of operations––Liquidity and capital resources––Covenant compliance” for more information about this ratio. In addition, because EBITDA and Adjusted EBITDA exclude certain non-cash charges, as well as other items that we believe are not representative of our core business operations, we believe that the presentation of these financial measures helps investors to assess our operating performance from period to period and enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. However, the measurement of EBITDA and Adjusted EBITDA in this prospectus may not be comparable to that of other companies in our industry, which limits their usefulness as a comparative measure. EBITDA and Adjusted EBITDA are not measures required by or calculated in accordance with GAAP and should not be considered as a substitute for income (loss) from continuing operations, net income (loss) or any other measure of financial performance reported in accordance with GAAP or as measures of operating cash flows or liquidity. You should rely primarily on our GAAP results, and use this non-GAAP financial measure only supplementally, in making your investment decision.

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Each of EBITDA and Adjusted EBITDA is reconciled to net income (loss) as follows:

	JBS USA Holdings, Inc.
	Predecessor						Successor
	As of and for the fiscal year ended December 24, 2006			As of and for the 198 days from December 25, 2006 through July 10, 2007			As of and for the 173 days from July 11, 2007 through December 30, 2007			As of and for the fiscal year ended December 28, 2008				As of and for the fiscal quarter ended March 30, 2008			As of and for the fiscal quarter ended March 29, 2009
in thousands	Historical			Historical			Historical			Historical		Pro forma		Historical			Historical			Pro forma
Net income (loss)	$	(117,406	)	$	(83,012	)	$	(111,592	)	$	161,104	$	192,115	$	(18,142	)	$	2,252		$	(4,263	)
Income tax expense (benefit)		(37,348	)		(18,380	)		1,025			31,287		47,986		5,613			909			(2,600	)
Interest expense, net		118,754			66,383			34,340			36,358		82,621		8,108			14,592			24,616
Depreciation and amortization(a)		89,122			44,838			35,244			92,374		132,002		19,139			33,352			33,352
EBITDA (unaudited)		53,122			9,829			(40,983	)		321,123		454,724		14,718			51,105			51,105
Loss (gain) on sales of property, plant and equipment		(666	)		(2,946	)		182			1,082		1,096		19			180			180
Foreign currency transaction loss (gain)(b)		(463	)		(527	)		(5,201	)		75,995		75,995		(12,614	)		(5,075	)		(5,075	)
National Beef termination fee(c)		—			—			—			—		—		—			19,900			19,900
Adjusted EBITDA (unaudited)	$	51,993		$	6,356		$	(46,002	)	$	398,200	$	531,815	$	2,123		$	66,110		$	66,110

(a) Depreciation and amortization includes a goodwill impairment charge of $4.5 million for the fiscal year ended December 24, 2006.

(b) Foreign currency transaction loss (gain) reflects changes in value of our U.S. dollar-denominated intercompany note payable and receivable within Australia due to changes in the exchange rate between the U.S. dollar and the Australian dollar.

(c) On February 18, 2009, we reached an agreement to terminate our efforts to acquire National Beef Packing Company, LLC, or National Beef, effective February 23, 2009. As a result of the termination of the agreement, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million as full and final settlement of any and all liabilities relating to the potential acquisition in the fiscal quarter ended March 29, 2009.

(7) Investing activities for the fiscal year ending December 28, 2008 include cash used in connection with the Tasman Acquisition and the JBS Packerland Acquisition.

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Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below as well as the other information contained in this prospectus before deciding to purchase any shares of our common stock. These risks could harm our business, operating results, financial condition and prospects. In addition, the trading price of our common stock could decline due to any of these risks and you might lose all or part of your investment.

Risks relating to our business and the beef and pork industries

Outbreaks of BSE, Foot-and-Mouth Disease, or FMD, or other species-based diseases in the United States, Australia or elsewhere may harm demand for our products.

An outbreak of disease affecting livestock, such as BSE, could result in restrictions on sales of products to our customers or purchases of livestock from our suppliers. Also, outbreaks of these diseases or concerns that these diseases may occur and spread in the future, whether or not resulting in regulatory action, can lead to cancellation of orders by our customers and create adverse publicity that may have a material adverse effect on customer demand for our products. In December 2003, the USDA reported the first confirmed case of BSE in the United States. Following the announcement, substantially all international export markets banned the import of U.S. beef. Canada also confirmed its first case of BSE in 2003, leading to the USDA’s closure to imports of live cattle from Canada. As a result, export demand declined and negatively impacted the volume of processing at our facilities. The United States currently imports cattle that is 30 months of age or younger from Canada, and Mexico reopened its borders to U.S. beef in April 2004. However, the late June 2005 announcement by the USDA of a second confirmed case of BSE in the United States followed by a third confirmed case in March 2006 has extended some border closures and slowed the re-entry of U.S. beef to some foreign markets. On July 27, 2006, Japan announced it would resume importing some U.S. beef, restricted to cattle that is 20 months or younger from approved U.S. processing plants. In 2006, South Korea reopened its market to boneless beef from the United States. However, disagreements and lack of clarity over import rules and procedures slowed the re-entry of U.S. boneless beef such that such exports to South Korea did not truly commence until 2008. As of March 29, 2009, 16 countries were still closed to U.S. beef. We are currently unable to assess whether or when these remaining foreign markets may fully open to U.S. beef or whether existing open markets may close.

In addition to BSE (in the case of cattle) and FMD (a highly contagious animal disease), cattle, sheep and pigs are subject to outbreaks of other diseases affecting such livestock. An actual outbreak of BSE, FMD or any other diseases, or the perception by the public that such an outbreak has occurred, could result in restrictions on domestic and export sales of our products (even if our products are not actually affected by any disease), cancellations of orders by our customers and adverse publicity. In addition, if the products of our competitors become contaminated, the adverse publicity associated with such an event may lower consumer demand for our products. Any of these events could have a material adverse effect on us.

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Any perceived or real health risks related to the food industry could adversely affect our ability to sell our products. If our products become contaminated, we may be subject to product liability claims and product recalls.

We are subject to risks affecting the food industry generally, including risks posed by the following:

• food spoilage or food contamination,

• evolving consumer preferences and nutritional and health-related concerns,

• consumer product liability claims,

• product tampering,

• the possible unavailability and expense of product liability insurance, and

• the potential cost and disruption of a product recall.

Our beef products and our pork products in the United States have in the past been, and may in the future be, exposed to contamination by organisms that may produce foodborne illnesses, such as E. coli, Listeria monocytogenes and Salmonella. These organisms are generally found in the environment and, as a result, there is a risk that they could be present in our products. These pathogens can also be introduced to our products through tampering or as a result of improper handling at the further processing, food service or consumer level. Once contaminated products have been shipped for distribution, illness or death may result if the products are not properly prepared prior to consumption or if the pathogens are not eliminated in further processing.

Although we have systems in place designed to monitor food safety risks throughout all stages of our processes, such systems, even when working effectively, may not eliminate the risks related to food safety. As a result, we may voluntarily recall, or be required to recall, our products if they are or may be contaminated, spoiled or inappropriately labeled. For example, on June 25, 2009, we voluntarily recalled 41,280 pounds of beef products that may have been contaminated with E. coli. Following further investigations, on June 28, 2009, we voluntarily expanded this recall to include an additional 380,000 pounds of assorted beef products. The recalled beef products were produced on April 21 and April 22, 2009 at our Greeley, Colorado facility and were shipped to distributors and retailers in multiple states and internationally. While we are unable to ascertain the exact cost we will incur relating to these voluntary recalls, we anticipate the total cost of these recalls to be less than $4 million. Although no direct link has been confirmed, the Centers for Disease Control and Prevention has stated that cases of E. coli illnesses may be associated with the consumption of these beef products.

We may be subject to significant liability in the jurisdictions in which our products are sold if the consumption of any of our products causes injury, illness or death and such liability may be in excess of applicable liability insurance policy limits. Adverse publicity concerning any perceived or real health risk associated with our products could also cause customers to lose confidence in the safety and quality of our food products, which could adversely affect our ability to sell our products. We could also be adversely affected by perceived or real health risks associated with similar products produced by others to the extent such risks cause customers to lose confidence in the safety and quality of such products generally. Any of these events may have a material adverse effect on us.

Our pork business could be negatively affected by concerns about A(H1N1) influenza.

In 2009, A(H1N1) influenza spread to several countries. More than 94,000 cases and over 400 deaths worldwide have been recorded since the outbreak of A(H1N1) influenza in Mexico, and

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on June 11, 2009, the World Health Organization, or WHO, declared a flu alert level six, signaling a “global pandemic.” Although the WHO has stated that there is no relation between those infected with Influenza A(H1N1) and contact with persons living near swine or the consumption of pork, several countries, including Russia, Thailand, Ukraine, China and the Philippines, have stopped importing some or all pork produced in the affected states in the United States and certain other affected regions in the world.

Any further outbreaks of the disease could have a negative impact on the consumption of pork in our markets, and a significant outbreak could negatively affect our Pork net sales and overall financial performance. Any further outbreak of A(H1N1) influenza could lead to the imposition of costly preventive controls on pork imports in our international markets. Accordingly, any spread of A(H1N1) influenza, or increasing concerns about this disease could negatively impact our Pork results of operations and our ability to sell pork in existing and new markets.

Our results of operations may be negatively impacted by fluctuations in the prevailing market prices for livestock.

We are dependent on the cost and supply of livestock and the selling price of our products and competing protein products, all of which can vary significantly over a relatively short period of time. Livestock prices demonstrate a cyclical nature both seasonally and over periods of years, reflecting the supply of and demand for livestock on the market and the market for other protein products such as livestock and fish. These costs are determined by constantly changing market forces of supply and demand as well as other factors over which we have little or no control. These other factors include:

• environmental and conservation regulations,

• import and export restrictions,

• economic conditions,

• livestock diseases, and

• declining cattle inventory levels in the United States and/or Australia.

We do not generally enter into long-term sales arrangements with our customers with fixed price contracts, and, as a result, the prices at which we sell our products are determined in large part by market conditions. A majority of our livestock is purchased from independent producers who sell livestock to us under marketing contracts or on the open market. A significant decrease in beef or pork prices for a sustained period of time could have a material adverse effect on our net sales revenue and, unless our raw material costs and other costs correspondingly decrease, on our operating margins.

We attempt to manage certain of these risks through the use of risk management and hedging programs, which include forward purchase and sale agreements and futures and options, but these strategies cannot and do not fully eliminate these risks. Furthermore, these programs may also limit our ability to participate in gains from favorable commodity price fluctuations. Also, a portion of our forward purchase and sale contracts are marked-to-market such that the related unrealized gains and losses are reported in earnings on a quarterly basis. Therefore, losses on those contracts would adversely affect our earnings and may cause significant volatility in our quarterly earnings. See “Management’s discussion and analysis of financial condition and results of operations—Quantitative and qualitative disclosure about market risk.”

Accordingly, we may be unable to pass on all or part of any increased costs we experience from time to time to consumers of our products directly, in a timely manner or at all. Additionally, if

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we do not attract and maintain contracts or marketing relationships with independent producers and growers, our production operations could be disrupted.

Our businesses are subject to government policies and extensive regulations affecting the cattle, hog, beef and pork industries.

Livestock production and trade flows are significantly affected by government policies and regulations. Governmental policies affecting the livestock industry, such as taxes, tariffs, duties, subsidies and import and export restrictions on livestock products, can influence industry profitability, the use of land resources, the location and size of livestock production, whether unprocessed or processed commodity products are traded, and the volume and types of imports and exports.

Our plants and our products are subject to periodic inspections by federal, state and municipal authorities and to comprehensive food regulation, including controls over processed food. Our operations are subject to extensive regulation and oversight by state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Our exported products are often inspected by foreign food safety authorities, and any violation discovered during these inspections may result in a partial or total return of a shipment, partial or total destruction of the shipment and costs due to delays in product deliveries to our customers.

Our operations in the United States are subject to extensive regulation and oversight by the USDA, the U.S. Environmental Protection Agency, or the EPA, and other state, local and foreign authorities regarding the processing, packaging, labeling, storage, distribution and advertising of our products. Recently, the food safety practices and procedures of the meat processing industry have been subject to more intense scrutiny and oversight by the USDA. Food safety standards, processes and procedures are subject to the USDA Hazard Analysis Critical Control Point program, which includes compliance with the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. Wastewater, storm water and air discharges from our operations are subject to extensive regulations by the EPA and other state and local authorities. Our facilities for processing beef, pork and lamb are subject to a variety of federal, state and local laws relating to the health and safety of our employees including those administered by the U.S. Occupational Safety and Health Administration, or OSHA. Our Australian operations also are subject to extensive regulation by the Australian Quarantine Inspection Service, or AQIS, and other state, local and foreign authorities. Additionally, we are routinely affected by new or amended laws, regulations and accounting standards. Our failure to comply with applicable laws and regulations or failure to obtain necessary permits and registrations could delay or prevent us from meeting current product demand or acquiring new businesses, as well as possibly subjecting us to administrative penalties, damages, injunctive relief, fines, injunctions, recalls of our products or seizure of our properties as well as potential criminal sanctions, any of which could materially adversely affect our financial results.

Government policies in the United States, Australia and other jurisdictions may adversely affect the supply, demand for and prices of livestock products, restrict our ability to do business in existing and target domestic and export markets and could adversely affect our results of operations. For example, the European Union has banned the importation of beef raised using hormones. Our facilities in the U.S. and, to a limited extent, our facilities in Australia process cattle that have been raised with hormones and therefore, we are prohibited from exporting our products from these facilities to the European Union. In addition, the Obama administration

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announced recently that it would seek to ban many routine uses of antibiotics, which are fed to farm animals to encourage rapid growth, in hopes of reducing the spread of dangerous bacteria in humans.

In addition, if we are required to comply with future material changes in food safety regulations, we could be subject to material increases in operating costs and we could be required to implement regulatory changes on schedules that cannot be met without interruptions in our operations.

Compliance with environmental requirements may result in significant costs, and failure to comply may result in civil liabilities for damages as well as criminal and administrative sanctions and liability for damages.

Our operations are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to the protection of the environment, including those relating to the discharge of materials into the environment, the handling, treatment and disposition of wastes and remediation of soil and ground water contamination. Failure to comply with these requirements can have serious consequences for us, including criminal as well as civil and administrative penalties, claims for property damage, personal injury and damage to natural resources and negative publicity. We have incurred significant capital and operating expenditures and we expect to incur approximately $30 million in additional capital expenditures between 2009 and 2012, including for the upgrade our wastewater treatment facilities and remediation of previous contamination from the release of wastewater from certain of our plants under predecessor ownership as described in “Business—Wastewater issues.” Additional environmental requirements imposed in the future and/or stricter enforcement of existing requirements could require currently unanticipated investigations, assessments or expenditures and may require us to incur significant additional costs. As the nature of these potential future charges is unknown, we are not able to estimate the magnitude of any future costs, and we have not accrued any reserve for any potential future costs.

Some of our facilities have been in operation for many years. During that time, we and previous owners and operators of these facilities have generated and disposed of wastes that are or may be considered hazardous or may have polluted the soil, surface water or groundwater at our facilities and adjacent properties. Some environmental laws impose strict and, in certain circumstances, joint and several liability for costs of investigation and remediation of contaminated sites on current and former owners and operators of the sites, and on persons who arranged for disposal of wastes at such sites. Discovery of previously unknown contamination of property underlying or in the vicinity of our or our predecessor’s present or former properties or manufacturing facilities and/or waste disposal sites could require us to incur material unforeseen expenses. Occurrences of any of these events may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, increasing efforts to control emissions of greenhouse gases, or GHG, are likely to impact us. In the United States, the EPA recently proposed a mandatory GHG reporting system for certain activities, including manure management systems, which exceed specified emission thresholds. The EPA has also announced a proposed finding relating to GHG emissions that may result in promulgation of GHG air quality standards. The U.S. Congress is considering various options, including a cap and trade system which would impose a limit and a price on GHG emissions and establish a market for trading GHG credits. The House of Representatives recently passed a bill contemplating such a cap and trade system, and the bill is now before the Senate.

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Certain states have taken steps to regulate GHG emissions that may be more stringent than federal regulations. In Australia, the federal government has proposed a GHG cap and trade system that would cover agricultural operations, including certain of our feedlots, and at least two of our processing plants. Certain states in Australia could also adopt regulations of GHG emissions which are stricter than Australian federal regulations. While it is not possible to estimate the specific impact final GHG regulations will have on our operations, there can be no guarantee that these measures will not have significant additional impact on us.

Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations.

Sales outside the United States, primarily to Russia, Japan, Mexico, South Korea, Canada, Taiwan and China, accounted for approximately 21% of our total net sales for the fiscal quarter ended March 29, 2009. Our international activities expose us to risks not faced by companies that limit themselves to the United States. One significant risk is that the international operations may be affected by import restrictions and tariffs, other trade protection measures, and import or export licensing requirements. For example, in 2008, exports to Japan from our processing plant in Wisconsin were suspended, as were exports to South Korea from our Colorado plant and to Russia from one of our pork production plants. In April 2009, Russia halted imports from our pork facility in Louisville, Kentucky. Our future financial performance will depend significantly on economic, political and social conditions in our and JBS S.A.’s principal export markets (the European Union, Russia, the United States, Japan, Mexico, Canada, Taiwan, China and the Middle East). Other risks associated with our international activities include:

• changes in foreign currency exchange rates and inflation in the foreign countries in which we operate;

• exchange controls;

• changes in a specific country’s or region’s political or economic conditions, particularly in emerging markets;

• potentially negative consequences from changes in regulatory requirements;

• difficulties and costs associated with complying with, and enforcing remedies under, a wide variety of complex international laws, treaties, and regulations, including, without limitation, the Foreign Corrupt Practices Act;

• tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and incremental taxes upon repatriation;

• potentially negative consequences from changes in tax laws; and

• distribution costs, disruptions in shipping or reduced availability of freight transportation.

While we attempt to manage certain of these risks through the use of risk management and hedging programs, which include futures and options, these strategies cannot and do not fully eliminate these risks. An occurrence of any of these events could negatively impact our results of operations and our ability to transact business in existing or developing markets.

Deterioration of economic conditions could negatively impact our business.

Our business may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability of capital markets, consumer spending rates, energy

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availability and costs (including fuel surcharges) and the effects of governmental initiatives to manage economic conditions. Any such changes could adversely affect the demand for our products both in domestic and export markets, or the cost and availability of our needed raw materials, cooking ingredients and packaging materials, thereby negatively affecting our financial results.

The recent disruptions in credit and other financial markets and deterioration of national and global economic conditions, could, among other things:

• negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash flows;

• cause our customers or end consumers of our products to “trade down” to other protein sources such as chicken or fish, or to cuts of beef or pork that are less profitable, putting pressure on our profit margins;

• make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;

• cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any technical or other waivers under our debt agreements to the extent we may seek them in the future;

• impair the financial condition of some of our customers, suppliers or counterparties to our derivative instruments, thereby increasing customer bad debts or non-performance by suppliers or counterparties;

• decrease the value of our investments; and

• impair the financial viability of our insurers.

Failure to successfully implement our business strategies may affect our plans to increase our revenue and cash flow.

Our growth and financial performance depends, in part, on our success in implementing numerous elements of our strategies that are dependent on factors that are beyond our control.

We may be unable to fully or successfully implement our strategies. The beef and pork industries and the food distribution industry are particularly influenced by changes in customer preferences, governmental regulations, regional and national economic conditions, demographic trends and sales practices by retailers, among other factors. Some aspects of our strategy require an increase in our operating costs and a significant increase in capital expenditures that may not be offset by a corresponding increase in revenue, resulting in a decrease in our operating margins.

For example, we are pursuing a global direct distribution strategy as we seek to enhance our operating margins. The implementation of this strategy will require us to make substantial investments in order to build a distribution center network, as well as related operating expenses. There can be no assurance that the increased sales levels and enhanced margins that we anticipate will result from this strategic initiative, or that we will achieve an adequate return on the required investment. In addition, this strategy may expose us to direct competition with our existing third party distribution customers in some segments, which could affect our relationship with these customers.

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Our business strategies require substantial capital and long-term investments, which we may be unable to fund.

Our business strategies will require substantial additional capital investment following this offering, including, for example, our strategy of creating a global direct distribution network. To the extent that the net proceeds from this offering and cash generated internally and cash available under our revolving credit facility are not sufficient to fund our capital requirements, we will require additional debt and/or equity financing. However, this type of financing may not be available or, if available, may not be available on satisfactory terms, including as a result of adverse macroeconomic conditions. Our parent company, JBS S.A., has invested over $1.4 billion in equity capital in us since the Swift Acquisition in 2007. In addition, since July 11, 2007, we have invested $187.0 million in our U.S. and Australian manufacturing operations, excluding the JBS Packerland and Tasman Acquisitions. Our parent company may not agree to provide us with additional financing in the future. Our parent company is a public company in Brazil and may in the future have interests that conflict or compete with ours. In addition, we are limited in our ability to incur indebtedness in certain circumstances under the terms of our outstanding indebtedness under our revolving credit facility, the indenture governing our 11.625% senior unsecured notes issued by us earlier this year and the indentures governing the 10.50% notes due 2016 in an aggregate principal amount of $300.0 million issued by JBS S.A. in 2006.

We may be unable to obtain sufficient additional capital in the future to fund our capital requirements and our business strategy at acceptable costs. If we are unable to access additional capital on terms acceptable to us, we may not be able to fully implement our business strategy, which may limit the future growth and development of our business. In addition, equity financings could result in dilution to our stockholders, and equity or debt securities issued in future financings may have rights, preferences and privileges that are senior to those of our common stock. If our need for capital arises because of significant losses, the occurrence of these losses may make it more difficult for us to raise the necessary capital.

Implementation of any of our strategies depends on factors that are beyond our control, such as changes in the conditions of the markets in which we operate, actions taken by our competitors, or existing laws and regulations at any time by U.S. federal government or by any other state, local or national government. Our failure to successfully implement any part of our strategy may materially adversely impact our business, financial condition and results of operations.

We may not be able to successfully integrate any growth opportunities we may undertake in the future.

We intend to pursue selected growth opportunities in the future as they arise. These types of opportunities may expose us to successor liability relating to actions involving any acquired entities, their respective management or contingent liabilities incurred prior to our involvement. A material liability associated with these types of opportunities, or our failure to successfully integrate any acquired entities into our business, could adversely affect our reputation and have a material adverse effect on us.

We may not be able to successfully integrate any growth opportunities we may undertake in the future or successfully implement appropriate operational, financial and administrative systems and controls to achieve the benefits that we expect to result therefrom. These risks include: (1) failure of the acquired entities to achieve expected results, (2) possible inability to retain or hire key personnel of the acquired entities and (3) possible inability to achieve expected synergies and/or economies of scale. In addition, the process of integrating businesses could cause interruption of, or loss of momentum in, the activities of our existing business. The diversion of

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our management’s attention and any delays or difficulties encountered in connection with the integration of these businesses could negatively impact our business and results of operations.

We face competition in our business, which may adversely affect our market share and profitability.

The beef and pork industries are highly competitive. Competition exists both in the purchase of live cattle and hogs and in the sale of beef and pork products. In addition, our beef and pork products compete with a number of other protein sources, including poultry and fish. We compete with numerous beef producers, including companies based in the United States (Tyson Foods Inc., National Beef Packing Company, LLC and Cargill Inc.) and in Australia (Teys Bros Pty Ltd. and Nippon Meat Packers Ltd.), as well as pork producers (Smithfield Foods, Inc., Tyson Foods Inc. and Cargill Inc.). The principal competitive factors in the beef and pork processing industries are operating efficiency and the availability, quality and cost of raw materials and labor, price, quality, food safety, product distribution, technological innovations and brand loyalty. Our ability to be an effective competitor depends on our ability to compete on the basis of these characteristics. Some of our competitors have greater financial and other resources and enjoy wider recognition for their consumer branded products. We may be unable to compete effectively with these companies, and if we are unable to remain competitive with these beef and pork producers in the future, our market share may be adversely affected.

Changes in consumer preferences could adversely affect our business.

The food industry, in general, is subject to changing consumer trends, demands and preferences. Our products compete with other protein sources, including poultry and fish. Trends within the food industry frequently change, and our failure to anticipate, identify or react to changes in these trends could lead to reduced demand and prices for our products, among other concerns, and could have a material adverse effect on our business, financial condition, results of operations and market price of our common stock.

Our business could be materially adversely affected as a result of adverse weather conditions or other unanticipated extreme events in our areas of operations.

Changes in the historical climate in the areas in which we operate could have a material adverse effect on our business. For instance, the timing of delivery to market and availability of livestock for our grass fed division in Australia is dependent on access to range lands and paddocks which can be negatively impacted by periods of extended drought. In addition, our cattle feeding operations in Australia and meat packing facilities in the U.S. and Australia rely on large volumes of potable water for the raising of healthy livestock and the fabrication of our meat products. Potable water is generally available from municipal supplies and/or naturally replenished aquifers, the access to which and availability of which could be affected in the event rainfall patterns change, aquifers become depleted or contaminated and municipal supplies are not maintained. While we own substantial water rights, occurrences of any of these events, or inability to enforce existing or secure additional water rights in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Natural disasters, fire, bioterrorism, pandemics or extreme weather, including floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, damage to our production and processing facilities or disruption of transportation channels, among other things. Any of

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these factors, as well as disruptions in our information systems, could have an adverse effect on our financial results.

Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.

As of March 29, 2009 we had a total of approximately 31,900 employees worldwide. A majority of these employees are represented by labor organizations, and our relationships with these employees are governed by collective bargaining agreements. In the U.S., we have 11 collective bargaining or other labor agreements expiring in 2009 and 2010, covering approximately 24,300 employees. In Australia, we have 20 collective bargaining or other collective labor agreements, 14 of which expire between 2010 and 2014. Upon the expiration of existing collective bargaining agreements or other collective labor agreements, we may not reach new agreements without union action and any such new agreements may not be on terms satisfactory to us. In addition, any new agreements may be for shorter durations than those of our historical agreements. Moreover, additional groups of currently non-unionized employees may seek union representation in the future. If we are unable to negotiate acceptable collective bargaining agreements, we may become subject to union-initiated work stoppages, including strikes.

Additionally, it is expected that the Employee Free Choice Act, which was passed in the U.S. House of Representatives in 2007, will be reintroduced in the new U.S. Congress. If reintroduced and enacted in its most recent form, the Employee Free Choice Act could make it significantly easier for union organizing drives to be successful. The Employee Free Choice Act could also give third-party arbitrators the ability to impose terms, which may be harmful to us, of collective bargaining agreements if the relevant company and union are unable to agree to the terms of a collective bargaining agreement. This legislation could increase the penalties we may incur if we engage in labor practices in violation of the National Labor Relations Act. Any significant increase in labor costs, deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

On December 12, 2006, at which time we were under our previous private equity ownership, agents from the U.S. Department of Homeland Security’s Immigration and Customs Enforcement division, or ICE, and other law enforcement agencies conducted on-site employee interviews at all of our production facilities except with respect to our production facilities located in Louisville, Kentucky and Santa Fe Springs, California, in connection with an investigation of the immigration status of an unspecified number of our workers. Approximately 1,300 individuals were detained by ICE and removed from our U.S. domestic labor force. To date, no civil or criminal charges have been filed by the U.S. government against us or any of our current or former management employees. On December 12, 2006, after a six- to seven-hour suspension of operations due to the employee interview process, we resumed production at all facilities in the United States, but at reduced output levels. We refer to this event in this prospectus as either the ICE incident or the ICE event. We estimate that the ICE event resulted in additional costs of approximately $82 million, as well as reduced revenues at the affected facilities, as lower levels of experienced staffing resulted in lower volumes of beef that met processing specifications. We resumed normal production at our pork processing facilities in March 2007 and reported in May 2007 that we had returned to standard staffing levels at all of our beef processing facilities. We have enhanced our previous hiring and legal compliance practices to mitigate this risk; however, we may face similar disruptions in the future at our U.S. facilities, our enhanced hiring practices

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may expose us to an increased risk of lawsuits related to such practices, and our labor costs may be negatively affected as a result.

The consolidation of our customers could negatively impact our business.

Our customers, such as supermarkets, warehouse clubs and food distributors, have consolidated in recent years, and consolidation is expected to continue throughout the United States and in other major markets. These consolidations have produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories, opposing price increases, and demanding lower pricing, increased promotional programs and specifically tailored products. These customers also may use shelf space currently used for our products for their own private label products. If we fail to respond to these trends, our volume growth could slow or we may need to lower prices or increase promotional spending for our products, any of which would adversely affect our financial results.

We are dependent on certain key members of our management.

Our operations, particularly in connection with the implementation of our strategies and the development of our operations, depend on certain key members of our management. If any of these key management personnel leaves us, our results of operations and our financial condition may be adversely affected.

Our debt could adversely affect our business.

On April 27, 2009, our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued $700.0 million in senior unsecured notes due May 2014 bearing interest at 11.625%. As of March 29, 2009, after giving effect to our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom, we have total outstanding consolidated debt on our balance sheet of approximately $1.0 billion.

While our level of indebtedness is lower than certain of our competitors, our consolidated debt could:

• make it difficult for us to satisfy our respective obligations;

• limit our ability to obtain additional financing to operate our business;

• require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund working capital, capital expenditures and other general corporate requirements;

• limit our flexibility to plan for and react to changes in our business and the industry in which we operate;

• place us at a competitive disadvantage relative to some of our competitors that have less debt than us; and

• increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates, lower cattle and hog prices or a downturn in our business or the economy.

In addition to our existing debt, we are not prohibited from incurring significantly more debt, which could intensify the risks described above. The terms of the indenture governing our

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11.625% senior unsecured notes due 2014 permit us to incur significant additional indebtedness in the future, including secured debt. We may borrow additional funds to fund our capital expenditures, working capital needs or other purposes, including future acquisitions.

Risks related to our common stock and this offering

We are controlled by JBS S.A., which is a publicly traded company in Brazil, whose interest in our business may be different than yours.

We are a wholly owned indirect subsidiary of JBS S.A., a publicly traded company in Brazil. JBS S.A. will indirectly own approximately     % of our outstanding common stock after the consummation of this offering (or     % if the international underwriters exercise their over-allotment in full). The Batista family indirectly owns and controls approximately 50.1% of the voting equity capital of JBS S.A. Prior to this offering, all of our directors and our president and chief executive officer were members of the Batista family. Members of the Batista family are also officers of JBS S.A. Accordingly, JBS S.A. is, and will continue to be, able to exercise significant influence over our business policies and affairs, including the composition of our board of directors, which has the authority to direct our business and appoint and remove our officers, and over any action requiring the approval of our stockholders, including the adoption of amendments to our certificate of incorporation and bylaws, which govern the rights attached to our shares of common stock, and the approval of mergers or sales of substantially all of our assets.

JBS S.A. and its subsidiaries comprise the largest exporter of canned beef in the world. With respect to business opportunities relating to customers or markets which would otherwise be available to both us and JBS S.A.’s other subsidiaries, JBS S.A. may not permit us to pursue those opportunities or JBS S.A.’s other subsidiaries may directly compete with us for those opportunities. For example, in January 2007, JBS S.A. acquired SB Holdings and its subsidiaries, which comprise one of the largest distributors of processed beef in the United States. This acquisition provided JBS S.A. (and not us) with access to the processed beef market in the United States through two distribution centers located in Fort Lauderdale, Florida and Newport Beach, California. JBS S.A. is a public company in Brazil, and therefore, its directors have their own independent fiduciary duties and their interests may conflict or compete with those of our company.

The concentration of ownership of our shares may also delay, defer or even prevent an acquisition by a third party or other change of control of our company in a transaction that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our common stock, even if you perceive such transaction to be in the best interests of minority stockholders. This concentration of ownership may also adversely affect our stock price. For additional information regarding the share ownership of, and our relationship with, JBS S.A., you should read the information under the headings “Business—Description of business segments—Beef segment—Global exports,” “Principal and selling stockholder” and “Certain relationships and related party transactions.”

Our directors who have relationships with our controlling stockholder may have conflicts of interest with respect to matters involving our company.

Upon completion of this offering, the majority of our directors will be affiliated with JBS S.A. These persons will have fiduciary duties to both us and JBS S.A. As a result, they may have real or apparent conflicts of interest on matters affecting both us and JBS S.A., which in some

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circumstances may have interests adverse to ours. It may also limit the ability of these directors to participate in consideration of certain matters. In addition, as a result of JBS S.A.’s ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and JBS S.A. including, but not limited to, potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters.

We will be a “controlled company” within the meaning of the NYSE rules, and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

Upon completion of this offering, JBS S.A. will own more than 50% of the total voting power of our common shares and we will be a “controlled company” under the New York Stock Exchange, or NYSE, corporate governance standards. As a controlled company, exemptions under the NYSE standards will free us from the obligation to comply with certain NYSE corporate governance requirements, including the requirements:

• that a majority of our board of directors consists of “independent directors,” as defined under the rules of the NYSE;

• that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

• that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

• for an annual performance evaluation of the nominating and governance committee and compensation committee.

Accordingly, for so long as we are a “controlled company,” you will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

There has been no prior public market for our common stock and the trading price of our common stock may be adversely affected if an active trading market in our common stock does not develop.

Prior to this offering, there has been no public market for our common stock, and an active trading market may not develop or be sustained upon the completion of this offering. We cannot predict the extent to which investor interest will lead to the development of an active trading market in shares of our common stock or whether such a market will be sustained. The initial public offering price of the common stock offered in this prospectus was determined through our negotiations with the underwriters and may not be indicative of the market price of the common stock after this offering. The market price of shares of our common stock may decline below the initial public offering price, and you may not be able to sell your shares of common stock at or above the initial public offering price, or at all.

Our stock price may be volatile, and you may be unable to resell your shares at or above the offering price or at all.

The market price of our common stock after this offering will be subject to significant fluctuations in response to, among other factors, variations in our operating results and market

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conditions specific to our industry. The combination of the relatively limited number of locations that we operate and the significant investment associated with each new unit may cause our operating results to fluctuate significantly, which could add to the volatility of our stock price. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. Future market fluctuations may negatively affect the market price of our common stock.

Future sales of shares of our common stock in the public market could cause our stock price to fall significantly even if our business is profitable.

Upon the completion of this offering, we will have outstanding              shares of common stock (or approximately              shares if the international underwriters exercise their over-allotment option in full). Of these shares, the shares of common stock offered in this prospectus will be freely tradable without restriction in the public market, unless purchased by our affiliates. We expect that the remaining              shares of common stock will become available for resale in the public market as shown in the chart below. Our officers, directors and the holders of all of our outstanding shares of common stock will sign lock-up agreements pursuant to which they have agreed not to sell, transfer or otherwise dispose of any of their shares for a period of 180 days following the date of this prospectus, subject to extension in the case of an earnings release or material news or a material event relating to us. The underwriters may, in their sole discretion and without notice, release all or any portion of the common stock subject to lock-up agreements. The underwriters are entitled to waive the underwriter lock-up provisions at their discretion prior to the expiration dates of such lock-up agreements.

Immediately following the consummation of this offering, our shares of common stock will become available for resale in the public market as follows:

Number of shares	Percentage	Date of availability for resale into the public market
	%	Upon the effectiveness of this prospectus
	%	180 days after the date of this prospectus, of which approximately              shares of our common stock are subject to holding period, volume and other restrictions under Rule 144

As restrictions on resale end, the market price of our common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities. Following the completion of this offering, we intend to file a registration statement on Form S-8 to register the total number of common stock reserved for issuance under our stock option plan.

Actual dividends paid on our shares may not be consistent with the dividend policy adopted by our board of directors.

Our board of directors will adopt a dividend policy pursuant to which any future determination relating to dividend policy will be made at its discretion and will depend on a number of factors, including our business and financial condition, any covenants under our debt agreements and our parent company’s legal obligation to distribute dividends. Under Brazilian law, our parent

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company, JBS S.A., is required to pay dividends equal to 25% of its net income (as calculated under generally accepted accounting principles in Brazil, subject to certain adjustments mandated by Brazilian corporate law and other exceptions). However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant. For the foregoing reasons, you will not be able to rely on dividends to receive a return on your investment. In addition, to the extent that we pay dividends, the amounts distributed to our shareholders may not be available to us to fund future growth and may affect our other liquidity needs.

You will incur immediate and substantial dilution.

The initial public offering price of our common stock is substantially higher than the net tangible book values per share of outstanding common stock prior to completion of the offering. Based on our net tangible book value as of March 29, 2009 and upon the issuance and sale of             shares of common stock by us at an assumed initial public offering price of $             per share (the midpoint of the initial public offering price range indicated on the cover of this prospectus), if you purchase our common stock in this offering, you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $             per share in net tangible book value. We also intend to implement a stock option plan that will grant options to our executive officers to purchase common stock with exercise prices that may be below the estimated initial public offering price of our common stock. To the extent that these options are granted and exercised, you will experience further dilution.

We will have broad discretion in applying the net proceeds of this offering and we may not use those proceeds in ways that will ultimately enhance the market value of our common stock.

We have broad discretion in applying any net proceeds we will receive in this offering. As part of your investment decision, you will not be able to assess or direct how we apply these net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, our stock price could decline if the market does not view our use of the net proceeds from this offering favorably. A significant portion of the offering is by selling stockholders, and we will not receive proceeds from the sale of the shares offered by them.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may discourage, delay or prevent a change of control of our company or changes in our management.

Our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law will contain provisions that could act to discourage, delay or prevent a change of control of our company or changes in our management. These provisions:

• authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;

• provide for a classified board of directors (three classes);

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• provide that stockholders may only remove directors for cause;

• provide that any vacancy on our board of directors, including a vacancy resulting from an increase in the size of the board, may only be filled by the affirmative vote of a majority of our directors then in office, even if less than a quorum;

• provide that a special meeting of stockholders may only be called by our board of directors or by the chairman of the board of directors;

• provide that action by written consent of the stockholders may be taken only if JBS S.A. and any of its subsidiaries own at least 50% of our outstanding shares of common stock;

• limit the liability of, and provide indemnification to, our directors and officers;

• limit the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; and

• provide that the board of directors is expressly authorized to make, alter or repeal our bylaws.

Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

These provisions may act to prevent a change of control, a change in our management or other actions, including actions that our stockholders may deem advantageous. These provisions may also have a negative effect on the trading price of our stock.

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Special note regarding forward-looking statements and industry data

All statements included in this prospectus, other than statements of historical fact, that address, activities, events or developments that we or our management expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “plan,” “may,” “will,” “should,” “could,” “expect” and other words of similar meaning. In particular, these include, but are not limited to, statements of our current views and estimates of future economic circumstances, industry conditions in domestic and international markets and our performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties that could cause the actual results and experiences of us to differ materially from the anticipated results and expectations expressed in such forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following:

• outbreaks of livestock disease, or product contamination or recall concerns;

• fluctuations in live cattle and hog prices;

• fluctuations in the selling prices of beef and pork products;

• developments in, or changes to, the laws, regulations and governmental policies governing our business and products or failure to comply with them, including environmental and sanitary liabilities;

• currency exchange rate fluctuations, trade barriers, exchange controls, political risk and other risks associated with export and foreign operations;

• deterioration of economic conditions;

• our strategic direction and future operation;

• our ability to implement our business plan, including our ability to arrange financing when required and on reasonable terms and the implementation of our financing strategy and capital expenditure plan;

• our acquisitions, joint ventures, strategic alliances or divestiture plans;

• the competitive nature of the industry in which we operate and the consolidation of our customers;

• customer demands and preferences;

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• adverse weather conditions in our areas of operations;

• continued access to a stable workforce and favorable labor relations with employees;

• consolidation of our customers;

• our dependence on key members of our management;

• interests of our controlling shareholders;

• the declaration or payment of dividends or interest attributable to shareholders’ equity;

• the risk factors discussed under the heading “Risk factors”;

• other factors or trends affecting our financial conditions or results of operations; and

• other statements contained in this prospectus regarding matters that are not historical facts.

Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, many of which are beyond our control, including those set forth under “Risk factors.”

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements.

All forward-looking statements contained in this prospectus are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made.

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Basis of presentation

Industry data

Certain market and industry data included in this prospectus have been obtained from third-party sources that we believe to be reliable, such as the United States Department of Agriculture, or USDA, Meat and Livestock Australia Limited, and the U.S. Meat Export Federation. We have not independently verified such third-party information and cannot assure you of its accuracy or completeness. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed above and in “Risk factors.”

Certain definitions

References in this prospectus to “$” or “U.S.$” are to U.S. dollars. References in this prospectus to “A$” are to Australian dollars.

Brands

Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 are brands that belong to us. This prospectus also includes trademarks, trade names and trade dress of other companies. Use or display by us of other parties’ trademarks, trade names or trade dress or products is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, the trademark, trade name or trade dress owners. Solely for the convenience of the reader, in some cases we refer to our brands in this prospectus without the ^® symbol, but these references are not intended to indicate in any way that we will not assert our rights to these brands to the fullest extent permitted by law.

Rounding

Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

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Use of proceeds

We estimate that the net proceeds from our sale of shares of common stock in this offering at an assumed initial public offering price of $              per share, the midpoint of the price range set forth on the front cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses, will be approximately $              million. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from this offering by $              million, assuming the number of shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

We intend to use a portion of our net proceeds from this offering to selectively pursue additional value-enhancing growth opportunities as they arise. For example, during the next five years, we intend to make substantial investments in order to significantly expand our direct distribution network. We also intend to use a portion of our net proceeds from this offering for working capital and general corporate purposes. However, our management will have broad discretion in the application of these proceeds and investors will be relying on the judgment of our management regarding their application. Pending their use, we plan to invest our net proceeds from this offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

We will not receive any proceeds from the sale of our common stock by the selling stockholder, including any proceeds resulting from the underwriters’ exercise of their option to purchase additional shares from the selling stockholder.

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Dividend policy

Our board of directors will adopt a dividend policy pursuant to which any future determination relating to dividend policy will be made at its discretion and will depend on a number of factors, including our business and financial condition, and any covenants under our debt agreements and our parent company’s legal obligation to distribute dividends described below. However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant.

Our parent company, JBS S.A., is required by the Brazilian corporate law to distribute on an annual basis dividends representing 25% of its net income (as calculated under generally accepted accounting principles in Brazil, subject to certain adjustments mandated by Brazilian corporate law) unless its board of directors has determined, in its discretion, that such distribution would not be advisable or appropriate in light of its financial condition.

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Capitalization

The following table sets forth our consolidated cash and cash equivalents and capitalization as of March 29, 2009 on:

• an actual basis;

• a pro forma basis to give effect to the offering and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom as if it had occurred on March 29, 2009; and

• a pro forma as adjusted basis to give effect to

(1) the issuance and sale of              shares of our common stock sold by us in this offering and our receipt of approximately $             million in net proceeds from such sale, based on an assumed public offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us, and

(2) a            -for-one stock split to take place immediately prior to completion of this offering.

The information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.

(in thousands, except shares data)	As of March 29, 2009
	Actual			Pro forma			Pro forma as adjusted
Cash and cash equivalents	$	156,737		$	154,322		$
Indebtedness:
Short-term:
Secured credit facility	$	36,828		$	36,828		$	36,828
Unsecured credit facility		34,600			34,600			34,600
Total short-term debt:		71,428			71,428			71,428
Current portion of long-term debt:
Installment note payable		1,008			1,008			1,008
Capital lease obligations		3,095			3,095			3,095
Total current portion of long-term debt:		4,103			4,103			4,103
Long-term:
Intercompany loans		658,597			139,000			139,000
Senior secured revolving credit facility		210,187			110,187			110,187
Capital lease obligations		22,940			22,940			22,940
11.625% senior unsecured notes due 2014		—			651,322			651,322
Installment note payable		9,793			9,793			9,793
Total long-term debt:		901,517			933,242			933,242
Total debt:	$	977,048		$	1,008,773		$	1,008,773
Stockholders’ equity:
Common stock, $0.01 par value per share (actual, authorized 500,000,000 shares, 100 shares issued and outstanding; pro forma, authorized 500,000,000 shares, 100 shares issued and outstanding; pro forma as adjusted,             authorized shares,              shares issued and outstanding)	$	—		$	—		$
Paid-in capital		1,400,159			1,400,159
Accumulated comprehensive income (loss)		(56,984	)		(56,984	)
Retained earnings		51,764			51,764
Total stockholders’ equity		1,394,939			1,394,939
Total capitalization (long-term debt plus stockholders’ equity)	$	2,296,456		$	2,328,181		$

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A $1.00 decrease or increase in the initial public offering price would result in an approximately $             million decrease or increase in each of pro forma as adjusted total stockholders’ equity and total capitalization. The above table does not reflect              shares of common stock reserved for future issuance under our stock option plan.

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Dilution

If you invest in our common stock, you will be diluted to the extent the initial public offering price per share of our common stock exceeds the net tangible book value per share of our common stock immediately after this offering.

Our net tangible book value as of March 29, 2009 was approximately $             million, or $             per share of common stock. Net tangible book value per share presented below represents the amount of our tangible net worth, or total tangible assets less total liabilities as of March 29, 2009, divided by the number of shares of our common stock outstanding immediately prior to completion of this offering after giving effect to a             -for-one stock split of our common stock that will occur immediately prior to consummation of this offering.

After giving effect to the issuance and sale of              shares of our common stock sold by us in this offering and our receipt of approximately $             million in net proceeds from such sale, based on an assumed public offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us, our as adjusted net tangible book value per share as of March 29, 2009 would have been approximately $             million, or $             per share. This amount represents an immediate increase in net tangible book value of $             to existing stockholders and an immediate dilution in net tangible book value of $             per share to new investors purchasing shares of our common stock in this offering. Dilution per share is determined by subtracting the net tangible book value per              share as adjusted for this offering from the amount of cash paid by a new investor for a share of our common stock. Net tangible book value is not affected by the sale of shares of our common stock offered by the selling stockholder.

The following table illustrates the per share dilution:

		Per share
Assumed initial public offering price per share		$
Net tangible book value per share as of March 29, 2009	$
Increase in net tangible book value per share attributable to existing investors	$
Adjusted net tangible book value per share after this offering		$
Dilution per share to new investors		$

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) our net tangible book value by $            , the net tangible book value per share after this offering by $             and the dilution per share to new investors by $            , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing discussion and table do not give effect to shares of common stock that we will issue if the international underwriters exercise their over-allotment option in full. If the underwriters exercise their option to purchase additional shares of common stock in full, the as adjusted net tangible book value per share as of March 29, 2009 would be approximately $             per share and the dilution per share to new investors would be $             per share.

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The following table summarizes, as of March 29, 2009, the number of shares of our common stock we issued and sold, the total consideration we received and the average price per share paid to us by existing stockholders prior to this offering, and by new investors purchasing shares of common stock in this offering. The table assumes an initial public offering price of $             per share (the midpoint of the price range set forth on the cover page of this prospectus):

	Shares purchased		Total consideration		Average price per share
	Number	Percent	Number	Percent
Existing stockholders		%		%	$
New investors in this offering		%		%	$
Total		100.0%		100.0%	$

The number of shares of our common stock held by new investors will increase to             , or              approximately     % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by the selling stockholder, will decrease to              shares, or              approximately     % of the total number of shares of our common stock outstanding after this offering. If the international underwriters exercise their over-allotment option to purchase additional shares of common stock in full, the number of shares of our common stock held by new investors will increase to             , or approximately $             per share and the dilution per share to new investors would be $             per share.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

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Selected historical consolidated financial data

The following tables set forth our selected historical consolidated financial data at the dates and for the periods indicated. Our selected historical consolidated financial information contained in this prospectus is derived from

(1) our predecessor’s unaudited historical consolidated financial statements as of and for the fiscal years ended May 30, 2004, May 29, 2005 and May 28, 2006,

(2) our predecessor’s audited historical consolidated financial statements as of and for

(a) the fiscal year ended December 24, 2006, and

(b) the 198 days from December 25, 2006 through July 10, 2007 (the date immediately preceding the Swift Acquisition),

(3) our audited historical consolidated financial statements as of and for

(a) the 173 days from July 11, 2007 through December 30, 2007, and

(b) the fiscal year ended December 28, 2008,

(4) our unaudited historical consolidated financial statement for the fiscal quarter ended March 30, 2008, and

(5) our unaudited historical financial statements as of and for the fiscal quarter ended March 29, 2009.

The financial statements in (1) and (4) were reviewed by Grant Thornton LLP, and the financial statements in (2)(a) and (b) and (3)(a) were audited by Grant Thornton LLP. The financial statements in (3)(b) were audited by BDO Seidman, LLP. The financial statements in (5) were reviewed by BDO Seidman, LLP.

The financial statements in (2), (3) and (5) above are included elsewhere in this prospectus and have been prepared in accordance with generally accepted accounting principles in the United States. Our current fiscal year is based on the 52- or 53-week period ending on the last Sunday in December. Our predecessor company’s fiscal year was based on the 52- or 53-week period ending on the last Sunday in May. The Swift Acquisition closed on July 11, 2007, and the financial statements for the 198 days from December 25, 2006 to July 10, 2007 represent the period between the end of the fiscal year ended December 24, 2006 and the day prior to the closing of the Swift Acquisition. The periods ended prior to July 11, 2007 are referred to as the “predecessor” periods. The financial statements for the 173-day period from July 11, 2007 through December 30, 2007 represent the period from the date of the Swift Acquisition through December 30, 2007. The periods ended subsequent to July 10, 2007 are referred to as the “successor” periods.

The results of operations for any partial period are not necessarily indicative of the results of operations for other periods or for the full fiscal year. We have prepared our unaudited historical consolidated financial statements on the same basis as our audited financial statements and have included all adjustments, consisting of normal and recurring adjustments, that we consider necessary to present fairly our financial position and results of operations for the unaudited periods.

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On May 26, 2006, we completed the sale of our non-fed cattle business, including our operating plant assets in Omaha, Nebraska and our idled Nampa, Idaho assets. Due to our significant continuing involvement with the non-fed processing facilities through a raw material supply agreement, the operating results related to these plants have been reflected in our continuing operations through the fiscal year ended December 24, 2006.

Our consolidated results of operations for the 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 are not fully comparable to our results for the fiscal year ended December 24, 2006 due to the change in cost basis and recapitalization that occurred on July 11, 2007.

Our consolidated results of operations for the fiscal year ended December 28, 2008 are not fully comparable to our results of operations for the combined 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 due to the (1) change in cost basis and recapitalization that occurred on July 11, 2007, (2) Tasman Acquisition that closed on May 2, 2008 and (3) JBS Packerland Acquisition that closed on October 23, 2008.

Our consolidated results of operations for the fiscal quarter ended March 29, 2009 are not fully comparable to our results of operations for the fiscal quarter ended March 30, 2008 due to the (1) Tasman Acquisition that closed on May 2, 2008 and (2) JBS Packerland Acquisition that closed on October 23, 2008.

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You should read the selected historical consolidated financial data set forth below in conjunction with, and the data is qualified by reference to, “Unaudited pro forma combined financial statements,” “Management’s discussion and analysis of financial condition and results of operations” and the consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus (other than our predecessor’s unaudited historical consolidated financial statements as of and for the fiscal years ended May 30, 2004, May 29, 2005 and May 28, 2006, which are not included elsewhere in this prospectus).

	Predecessor
	Fiscal year ended
	May 30, 2004		May 29, 2005		May 28, 2006
in thousands	Unaudited		Unaudited		Unaudited
Statement of operations data:
Net sales	$9,427,235		$9,664,249		$9,348,151
Cost of goods sold	9,165,466		9,452,638		9,267,142
Gross profit	261,769		211,611		81,009
Selling, general and administrative	134,016		146,830		166,172
Goodwill impairment	—		11,869		4,488
Foreign currency transaction loss (gain)	824		(396	)	19
Other income, net	(9,776	)	(5,884	)	(3,357	)
Loss on sales of property, plant and equipment	851		1,031		662
Interest expense, net	91,802		100,237		112,264
Total expenses	217,717		253,687		280,248
Income (loss) from continuing operations before income taxes	44,052		(42,076	)	(199,239	)
Income tax expense (benefit)	14,965		(31,645	)	(57,736	)
Equity method investment earnings (losses)	(6,592	)	4,247		—
Income from discontinued operations	3,672		27,852		—
Net income (loss)	$26,167		$21,668		$(141,503	)
Balance sheet data (at period end):
Cash and cash equivalents	$136,195		$79,712		$52,291
Accounts receivable, net	329,944		373,167		366,744
Inventories	480,679		499,039		503,426
Property, plant and equipment, net	602,416		562,454		504,271
Total assets	1,784,833		1,709,481		1,604,928
Long-term debt	787,428		946,496		1,102,717
Total debt	791,667		997,978		1,104,519
Stockholder’s equity (deficit)	411,659		124,137		(20,029	)

47

	Predecessor				Successor
in thousands, except earnings per share	Fiscal year ended December 24, 2006		198 days from December 25, 2006 through July 10, 2007		173 days from July 11, 2007 through December 30, 2007		Fiscal year ended December 28, 2008		Fiscal quarter ended March 30, 2008		Fiscal quarter ended March 29, 2009
	Audited		Audited		Audited		Audited		Unaudited		Unaudited
Statement of operations data:
Net sales	$9,691,432		$4,970,624		$4,988,984		$12,362,281		$2,461,657		$3,196,339
Cost of goods sold	9,574,715		4,920,594		5,013,084		11,917,777		2,451,413		3,123,358
Gross profit (loss)	116,717		50,030		(24,100	)	444,504		10,244		72,981
Selling, general and administrative expenses(1)	158,783		92,333		60,727		148,785		31,042		61,598
Foreign currency transaction loss (gain)(2)	(463	)	(527	)	(5,201	)	75,995		(12,614	)	(5,075	)
Other income, net	(4,937	)	(3,821	)	(3,581	)	(10,107	)	(3,782	)	(1,475	)
Loss (gain) on sales of property, plant and equipment	(666	)	(2,946	)	182		1,082		19		180
Interest expense, net	118,754		66,383		34,340		36,358		8,108		14,592
Total expenses	271,471		151,422		86,467		252,113		22,773		69,820
Income (loss) before income tax expense	(154,754	)	(101,392	)	(110,567	)	192,391		(12,529	)	3,161
Income tax expense (benefit)	(37,348	)	(18,380	)	1,025		31,287		5,613		909
Net income (loss)	$(117,406	)	$(83,012	)	$(111,592	)	$161,104		$(18,142	)	$2,252
Basic and diluted net income (loss) per share of common stock(3)	N/A		N/A		$(1,115,920.00	)	$1,611,040.00		$(181,420.00	)	$22,520.00
Basic and diluted pro forma net income (loss) per share of common stock(4)	N/A		N/A		$		$		$		$
Balance sheet data (at period end):
Cash and cash equivalents	$83,420		$44,673		$198,883		$254,785		$77,365		$156,737
Accounts receivable, net	334,341		365,642		417,375		588,985		438,515		514,160
Inventories	457,829		487,598		466,756		649,000		541,519		650,026
Property, plant and equipment, net	487,427		505,172		708,056		1,229,316		716,334		1,241,055
Total assets	1,538,597		1,578,350		2,165,815		3,315,571		2,125,696		3,308,815
Long-term debt	1,065,553		1,201,975		32,433		806,808		32,347		901,517
Total debt	1,067,503		1,203,912		810,718		878,319		395,154		977,048
Stockholder’s equity (deficit)	(40,090	)	(98,818	)	838,818		1,388,250		1,281,075		1,394,939

(1) On February 18, 2009, we reached an agreement to terminate our efforts to acquire National Beef Packing Company, LLC, or National Beef, effective February 23, 2009. As a result of the termination of the agreement, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million as full and final settlement of any and all liabilities relating to the potential acquisition, and we recorded as an expense the related incurred legal costs totaling an additional $1.0 million in the fiscal quarter ended March 29, 2009. These costs were reflected in selling, general and administrative expense.

(2) Foreign currency transaction loss (gain) reflects changes in the value of our U.S. dollar-denominated intercompany note payable and receivable within Australia due to changes in the exchange rate between the U.S. dollar and the Australian dollar.

(3) The capital structure of our predecessor company was significantly different from our capital structure. Prior to this offering, our capital structure consists of 100 common shares issued and outstanding, and we do not have any warrants or options that may be exercised. Accordingly, we do not believe our predecessor company’s earnings per share information is meaningful to investors and have not included such information.

(4) In calculating shares of our common stock outstanding, we give retroactive effect to the stock split to occur immediately prior to completion of this offering.

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Unaudited pro forma combined financial statements

On October 23, 2008, we acquired Smithfield Beef Group, Inc. (now known as JBS Packerland) for $563.2 million in cash (including $26.1 million of transaction related costs). This acquisition included 100% of Five Rivers, which had been previously held by Smithfield Beef Group, Inc. in a 50/50 joint venture with Continental Grain Company.

On April 27, 2009, our wholly owned subsidiaries, JBS USA, LLC and JBS USA Finance, Inc., issued 11.625% senior unsecured notes due 2014 in an aggregate principal amount of $700 million and applied the net proceeds to repay $100.0 million of borrowings under our secured revolving credit facility and to repay $550.8 million of the outstanding principal and accrued interest on intercompany loans to us from a subsidiary of JBS S.A.

The following unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008 has been prepared as if

• the issuance and sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom,

• the JBS Packerland Acquisition, and

• the acquisition of 50% of the equity interest in Five Rivers not previously owned had occurred at the beginning of the period presented.

The unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008 is derived from

• our audited historical consolidated financial statements for the fiscal year ended December 28, 2008,

• unaudited historical financial information of Smithfield Beef Group, Inc. for the period from January 1, 2008 through October 22, 2008, and

• unaudited historical financial information of Five Rivers for the period from January 1, 2008 through October 22, 2008.

The following unaudited pro forma combined statement of operations for the fiscal quarter ended March 29, 2009 has been prepared as if the issuance and sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom had occurred as of December 30, 2007, and the unaudited pro forma combined balance sheet as of March 29, 2009 has been prepared as if the sale of all of the 11.625% senior unsecured notes due 2014 had occurred on March 29, 2009. The unaudited pro forma combined financial statements as of and for the fiscal quarter ended March 29, 2009 are derived from our unaudited historical consolidated financial statements for the fiscal quarter ended March 29, 2009.

Historically, Smithfield Beef Group, Inc. and Five Rivers reported their financial results using the last Sunday in April, and March 31, respectively, as their fiscal year ends. Accordingly, the historical amounts presented for JBS Packerland and Five Rivers in the unaudited pro forma combined financial information do not agree with Smithfield Beef Group, Inc.’s and Five Rivers’ financial statements appearing elsewhere in this prospectus.

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The unaudited pro forma combined financial statements set forth herein reflect certain adjustments for:

• the 50% equity ownership in Five Rivers owned by Smithfield Beef Group, Inc. prior to October 22, 2008 to avoid double counting such equity ownership since the historical financial statements of JBS USA Holdings, Inc. reflect such ownership under the equity method of accounting, but, on a pro forma basis, we have reflected the ownership of Five Rivers on a fully consolidated basis,

• expenses incurred by Smithfield Foods, Inc. in anticipation of the sale of the Smithfield Beef Group, Inc. to JBS USA, LLC,

• revenue and expenses associated with Five Rivers company owned cattle during the period January 1 through October 22, 2008, since subsequent to that date, Five Rivers does not own cattle but operates solely as a hotelling operation for other entities’ cattle,

• revenue and expenses of cattle owned by Smithfield Beef Group, Inc. during the period January 1 through October 22, 2008, since subsequent to that date, JBS Packerland does not own cattle, and

• other assets and insignificant businesses not acquired and liabilities not assumed.

The unaudited pro forma combined financial statements reflect pro forma adjustments that are described above and in the accompanying notes and are based on available information and certain assumptions that we believe are reasonable under the circumstances, and the actual results could differ materially from these anticipated results. In our opinion, all adjustments that are necessary to present fairly the unaudited pro forma consolidated data have been made. The unaudited pro forma combined financial statements are presented for informational purposes only and do not purport to be indicative of what would have occurred had the JBS Packerland Acquisition actually been consummated at the beginning of the period presented, nor are they necessarily indicative of our future consolidated operating results.

You should read the following unaudited pro forma combined financial statements in conjunction with, and the data is qualified by reference to, “Management’s discussion and analysis of financial condition and results of operations” and the financial statements and accompanying notes included elsewhere in this prospectus.

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Unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008

	JBS USA Holdings, Inc.		JBS Packerland		JBS Packerland		JBS Packerland		Five Rivers		Five Rivers		Adjustment for transaction			JBS USA Holdings, Inc.
	Fiscal year ended December 28, 2008		December 31, 2007 through October 22, 2008 (a)(i)		Adjustment for 50% equity interest in Five Rivers (b)		Adjustment for assets not acquired (c)(i)		December 31, 2007 through October 22, 2008 (a)(ii)		Adjustment for assets not acquired (c)(ii)					Fiscal year ended December 28, 2008
	Historical		Historical						Historical						Notes	Pro forma
in thousands, except earnings per share	(+)		(+)		(-)		(-)		(+)		(-)		(+)
Net sales	$12,362,281		$2,548,224		—		$4,923		$1,461,140		$912,920		$(8,011	)	(d)	$15,445,791
Cost of goods sold	11,917,777		2,397,551		—		4,949		1,511,462		988,814		4,724		(d),(e)	14,837,751
Gross profit (loss)	444,504		150,673		—		(26	)	(50,322	)	(75,894	)	(12,735	)		608,040
Selling, general and administrative expenses	148,785		78,793		—		24,017		11,093		9		4,052		(e)	218,697
Foreign currency transaction losses	75,995		—		—		—		—		—		—			75,995
Other (income) expense	(10,107	)	44,465		39,139		5,555		(208	)	(74	)	—			(10,470	)
Loss on sales of property, plant and equipment	1,082		107		—		—		131		224		—			1,096
Interest expense, net	36,358		30,837		—		31,005		16,940		16,940		46,431		(f)	82,621
Total expenses, net	252,113		154,202		39,139		60,577		27,956		17,099		50,483			367,939
Income (loss) from continuing operations before	192,391		(3,529	)	(39,139	)	(60,603	)	(78,278	)	(92,993	)	(63,218	)		240,101
Income tax expense	31,287		2,222		—		2,222		—		—		16,699		(g)	47,986
Net income (loss)	$161,104		$(5,751	)	$(39,139	)	$(62,825	)	$(78,278	)	$(92,993	)	$(79,917	)		$192,115
Basic and diluted net income (loss) per share of common stock	$1,611,040.00															$1,921,150.00

(a) Represents the historical results of

(i) JBS Packerland, and

(ii) Five Rivers

for the period from December 31, 2007 through October 22, 2008.

(b) Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period December 31, 2007 through October 22, 2008. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(c) Reflects the elimination of assets not acquired for

(i) JBS Packerland and

(ii) Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Beef Group, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(d) Reflects the elimination of $8.0 million of intercompany sales and $8.0 million of cost of goods sold between JBS Packerland and the legacy Swift Beef segment for the period from December 31, 2007 through October 22, 2008.

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(e) Represents the adjustment of $12.7 million to historical cost of goods sold and to selling, general and administrative expenses of $4.1 million to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:

Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134
Total purchase price	$563,202
Preliminary purchase price allocation:
Current assets and liabilities	$  43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$563,202

(i) Property, plant and equipment was recorded at fair value at the date of the JBS Packerland Acquisition. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

(ii) Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition that are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(f) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$     467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)	65,209
Interest expense, intercompany debt(iv)	(27,047	)
Total Interest expense, net(v)	$46,431

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(iii) Includes pro forma interest expense on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008.

(iv) Includes the reduction of pro forma interest expense for the period from December 31, 2007 through December 28, 2008 on our consolidated intercompany loans from JBS S.A. due to a $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(g) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

52

Unaudited pro forma combined statement of operations for the fiscal quarter ended March 29, 2009

	JBS USA Holdings, Inc.							JBS USA Holdings, Inc.
	March 29, 2009			Adjustments				March 29, 2009
in thousands, except earnings per share	Historical			(+)			Notes	Pro forma
Net sales	$	3,196,339		$	—			$	3,196,339
Cost of goods sold		3,123,358			—				3,123,358
Gross profit		72,981			—				72,981
Selling, general and administrative expenses		61,598			—				61,598
Foreign currency transaction gains		(5,075	)		—				(5,075	)
Other income, net		(1,475	)		—				(1,475	)
Loss on sales of property, plant and equipment		180			—				180
Interest expense, net		14,592			10,024		(a)		24,616
Total expenses		69,820			10,024				79,844
Income (loss) from continuing operations before income tax		3,161			(10,024	)			(6,863	)
Income tax expense (benefit)		909			(3,509	)	(b)		(2,600	)
Net income (loss)	$	2,252		$	(6,515	)		$	(4,263	)
Basic and diluted net income (loss) per share of common stock	$	22,250.00						$	(42,630.00	)

(a) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)		16,302
Interest expense, intercompany debt(iv)		(8,345	)
Total interest expense, net(v)	$	10,024

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(iii) Includes pro forma interest expense for the period December 29, 2008 through March 29, 2009 on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014.

(iv) Includes the reduction of pro forma interest expense on our intercompany loans from JBS S.A. due to the $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(b) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

53

Unaudited pro forma combined balance sheet as of March 29, 2009

in thousands	JBS USA Holdings, Inc.
	Historical			Adjustments			Notes	Pro forma
Assets
Current assets:
Cash and cash equivalents	$	156,737		$	(2,415	)	(a)	$	154,322
Trade accounts receivable, net of allowance for doubtful accounts of $4,142		514,160			—				514,160
Inventories		650,026			—				650,026
Other current assets		77,555			—				77,555
Total current assets		1,398,478			(2,415	)			1,396,063
Property, plant, and equipment, net		1,241,055			—				1,241,055
Goodwill		149,093			—				149,093
Other intangibles, net		299,097			—				299,097
Other assets		221,092			2,915		(b)		224,007
Total assets	$	3,308,815		$	500			$	3,309,315
Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$	71,428			—			$	71,428
Current portion of long-term debt		4,103			—				4,103
Accounts payable, including book overdrafts		273,547			—				273,547
Accrued liabilities		303,691			(31,225	)	(c)		272,466
Total current liabilities		652,769			(31,225	)			621,544
Long-term debt, less current portion		901,517			31,725		(d)		933,242
Other non-current liabilities		359,590							359,590
Total liabilities		1,913,876			500				1,914,376
Stockholder’s equity:
Common stock, 500,000,000 shares authorized, 100 issued and outstanding		—			—				—
Additional paid-in capital		1,400,159			—				1,400,159
Retained earnings		51,764			—				51,764
Accumulated other comprehensive (loss)		(56,984	)		—				(56,984	)
Total stockholder’s equity		1,394,939			—				1,394,939
Total liabilities and stockholder’s equity	$	3,308,815		$	500			$	3,309,315

(a) Reflects the pro forma use of cash which was used to pay a portion of the debt issuance costs which were not paid from the proceeds of the issuance of our 11.625% senior unsecured notes due 2014.

(b) Reflects debt issuance costs of $2.9 million related to the issuance of our 11.625% senior unsecured notes due 2014. These debt issuance costs will be capitalized and amortized on a straight-line basis over a period of five years.

(c) Reflects the reduction of accrued interest on our intercompany loans, a portion of which were repaid using the net proceeds of our 11.625% senior unsecured notes due 2014.

(d) Reflects the principal amount of our 11.625% senior unsecured notes due 2014 reduced by (1) original issue discount on our 11.625% senior unsecured notes due 2014 of $48.7 million, (2) a $100.0 million reduction in outstanding borrowings under our senior secured revolving credit facility using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014, and (3) a $519.6 million reduction in the aggregate principal amount of our intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

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Management’s discussion and analysis of financial condition and results of operations

Overview

JBS USA Holdings, Inc.

We are a global leader in beef and pork processing with approximately $15.4 billion in net sales for the fiscal year ended December 28, 2008 on a pro forma basis. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. As a standalone company, we would be the largest beef processor in the world. We also own and operate the largest feedlot business in the United States.

We process, prepare, package and deliver fresh, processed and value-added beef and pork products for sale to customers in over 60 countries on six continents. Our operations consist of supplying fresh meat products, processed meat products and value-added meat products. Fresh meat products include refrigerated beef and pork processed to standard industry specifications and sold primarily in boxed form. Our processed meat offerings, which include beef and pork products, are cut, ground and packaged in a customized manner for specific orders. Additionally, we process lamb and mutton products. Our value-added products include moisture-enhanced, seasoned, marinated and consumer-ready products. We also provide services to our customers designed to help them develop more comprehensive and profitable sales programs. Our customers are in the food service, international, further processor and retail distribution channels. We also produce and sell by-products that are derived from our meat processing operations, such as hides and variety meats, to customers in the clothing, pet food and automotive industries, among others.

Our business operations are organized into two segments:

• our Beef segment, through which we conduct our domestic beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition, and our international beef, lamb and sheep processing businesses that we acquired in the Tasman Acquisition; and

• our Pork segment, through which we conduct our domestic pork and lamb processing business.

We also present “Corporate and other” in our financial statements, which include certain revenues and expenses not directly attributable to the primary segments, as well as eliminations resulting from the consolidation process.

We are a wholly owned indirect subsidiary of JBS S.A., the world’s largest beef producer, which has a daily slaughtering capacity of 73,940 head of cattle. In the fiscal quarter ended March 29, 2009, we represented approximately 78% of JBS S.A.’s gross revenues. Over the past few years, JBS S.A. has acquired several U.S. and Australian beef and pork processing companies and slaughterhouses, which now comprise JBS USA Holdings, Inc. and its subsidiaries:

• on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

• on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

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• on October 23, 2008, we acquired Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland), which included the 100% acquisition of Five Rivers. We refer to this transaction as the JBS Packerland Acquisition.

Critical accounting policies and estimates

The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of certain accounting estimates we consider critical. See Note 5, “Basis of presentation and accounting policies,” to our audited combined financial statements included elsewhere in this prospectus for a detailed discussion of these and other accounting policies.

Contingent liabilities

From time to time we are subject to lawsuits, investigations and other claims related to wage and hour/labor, livestock procurement, securities, environmental, product, taxes and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses. A determination of the amount of reserves and disclosures required, if any, for these contingencies is made after considerable analysis of each individual issue. We accrue for contingent liabilities when an assessment of the risk of loss is probable and can be reasonably estimated. We disclose contingent liabilities when the risk of loss is reasonably possible or probable. Due to the unpredictable nature of these lawsuits, investigations, and claims, our contingent liabilities reflect uncertainties. The eventual outcome will result from future events, and determination of current reserves requires estimates and judgments related to future changes in facts and circumstances, differing interpretations of the law and assessments of the amount of damages, and the effectiveness of strategies or other factors beyond our control. We have not made any material changes in the accounting methodology used to establish our contingent liabilities during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our contingent liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.

Marketing and advertising costs

We incur advertising, retailer incentive and consumer incentive costs to promote products through marketing programs. These programs include cooperative advertising, volume discounts, in-store display incentives, coupons and other programs. Marketing and advertising costs are charged in the period incurred. We accrue costs based on the estimated performance, historical utilization and redemption of each program. Cash consideration given to customers is considered a reduction in the price of our products, and thus is recorded as a reduction to sales. The remainder of marketing and advertising costs is recorded as a selling, general and administrative expense. Recognition of the costs related to these programs contains uncertainties due to the judgment required to estimate the potential performance and redemption of each program. These estimates are based on many factors, including experience of similar promotional programs. We have not made any material changes in the accounting methodology used to

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establish our marketing accruals during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our marketing accruals. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.

Accrued self-insurance

We are self-insured for employee medical and dental benefits and purchase insurance policies with deductibles for certain losses related to worker’s compensation and general liability claims. We purchase stop-loss coverage in order to limit our exposure to any significant level of certain claims. Self-insured losses are accrued based upon periodic assessments of estimated settlements for known and anticipated claims. We have not made any material changes in the accounting methodology used to establish our self-insurance liability during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our self-insurance liability. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material. A 10% increase in our estimated self-insurance liability at March 29, 2009 would increase the amount we recorded for our self-insurance liability by approximately $15.4 million.

Impairment of long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which we use a long-lived asset or a change in its physical condition. When evaluating long-lived assets for impairment, we compare the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The impairment is the excess of the carrying value over the fair value of the long-lived asset. Our impairment analysis contains uncertainties due to judgment in assumptions and estimates surrounding undiscounted future cash flows of the long-lived asset, including forecasting useful lives of assets and selecting the discount rate that reflects the risk inherent in future cash flows to determine fair value. We have not made any material changes in the accounting methodology used to evaluate the impairment of long-lived assets during the last three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate impairments of long-lived assets. However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material.

Impairment of goodwill and other non-amortizing intangible assets

Goodwill impairment is determined using a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of an operating unit, which for us is a reportable segment, with its carrying amount, including goodwill. If the fair value of a segment exceeds its carrying amount, goodwill of the segment is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if the carrying amount of a segment exceeds its fair value, a second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any. The second step compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied

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fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination (i.e., the fair value of the segment is allocated to all the assets and liabilities, including any unrecognized intangible assets, as if the segment had been acquired in a business combination and the fair value of the segment was the purchase price paid to acquire the segment).

For our other non-amortizing intangible assets, if the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We have elected to make the last day of the fourth quarter the annual impairment assessment date for goodwill and other intangible assets. However, we could be required to evaluate the recoverability of goodwill and other intangible assets prior to the required annual assessment if we experience disruptions to the business, unexpected significant declines in operating results, cash flows, or upon divestiture of a significant component of the business.

We estimate the fair value of our segments using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various judgmental assumptions about sales, operating margins, growth rates and discount rates. Assumptions about sales, operating margins and growth rates are based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period.

While estimating the fair value of our Beef and Pork segments, we assumed operating margins in future years in excess of the margins realized in the most current year. The fair value estimates for these segments assume normalized operating margin assumptions and improved operating efficiencies based on long-term expectations and margins historically realized in the beef and chicken industries.

Other intangible asset fair values have been calculated for trademarks using a royalty rate method and using the present value of future cash flows for patents and in-process technology. Assumptions about royalty rates are based on the rates at which similar brands and trademarks are licensed in the marketplace. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.

We have not made any material changes in the accounting methodology used to evaluate impairment of goodwill and other intangible assets during the last three years. As a result of the first step of the 2008 goodwill impairment analysis, the fair value of each segment exceeded its carrying value. The second step could have resulted in an impairment loss for goodwill.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of the segments and other intangible assets, it is possible a material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, we may be required to perform the second step which could result in a material impairment of our goodwill.

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Income taxes

We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income. Federal income taxes include an estimate for taxes on earnings of foreign subsidiaries expected to be remitted to the United States and be taxable, but not for earnings considered indefinitely invested in the foreign subsidiary. Deferred income taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are recorded when it is likely a tax benefit will not be realized for a deferred tax asset. We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due. This analysis is performed in accordance with the requirements of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” or FIN 48, which we adopted on May 28, 2007. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. Changes in projected future earnings could affect the recorded valuation allowances in the future. Our calculations related to income taxes contain uncertainties due to judgment used to calculate tax liabilities in the application of complex tax regulations across the tax jurisdictions where we operate. Our analysis of unrecognized tax benefits contain uncertainties based on judgment used to apply the more likely than not recognition and measurement thresholds of FIN 48. We do not believe there is a reasonable likelihood there will be a material change in the tax related balances or valuation allowances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. To the extent we prevail in matters for which FIN 48 liabilities have been established, or are required to pay amounts in excess of our recorded FIN 48 liabilities, our effective tax rate in a given financial statement period could be materially affected. Any change to our valuation allowance will impact our effective tax rate in a given financial statement period and could materially impact our tax expense. An unfavorable tax settlement would require use of our cash and result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in our effective tax rate in the period of resolution.

Recent accounting pronouncements

In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2, which defers the effective date of SFAS No. 157, “Fair Value Measurements,” for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in an entity’s financial statements on a recurring basis, at least annually. We will be required to adopt for these nonfinancial assets and nonfinancial liabilities as of December 29, 2008. We believe the adoption of SFAS No. 157 deferral provisions will not have a material impact on our financial position results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” or SFAS No. 167. SFAS No. 167 provides for enhanced financial reporting by enterprises involved with variable interest entities and is effective for fiscal years beginning after November 15, 2009. We are currently evaluating the impact, if any, of SFAS No. 167 on our financial position, results of operations and cash flows.

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Factors affecting our results of operations

Our results of operations have been influenced and will continue to be influenced by a variety of factors. Our management monitors a number of metrics and indicators that affect our operations, including the following:

• production volume,

• plant capacity utilization,

• sales volume,

• selling prices of beef and pork products,

• customer demands and preferences (see “Risk factors—Risks relating to our business and the beef and pork industries—Changes in consumer preferences could adversely affect our business”),

• commodity futures board prices for livestock (see “Risk factors—Risks relating to our business and the beef and pork industries—Our results of operations may be negatively impacted by fluctuations in the prevailing market prices for livestock” and Note 6, “Derivative financial instruments,” to our unaudited consolidated financial statements included in this prospectus),

• spread between livestock prices and selling prices for finished goods,

• utility prices and trends,

• livestock availability,

• production yield,

• currency exchange rate fluctuations (in particular, between the U.S. dollar and the Australian dollar) (see “Risk factors—Risks relating to our business and the beef and pork industries—Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations”), and

• trade barriers, exchange controls and political risk and other risks associated with export and foreign operations. See “Risk factors—Risks relating to our business and the beef and pork industries—Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations.”

Our operating results are also influenced by seasonal factors, which impact the price that we pay for livestock as well as the ultimate price at which we sell our products.

In the beef industry, the seasonal demand for beef products is highest in the summer and fall months as weather patterns permit more outdoor activities and there is typically an increased demand for higher value items that are grilled, such as steaks. Both live cattle prices and boxed beef prices tend to be at seasonal highs during the summer and fall. Because of higher consumption, more favorable growing conditions and the housing of animals in feedlots for the winter months, there are generally more cattle available in the summer and fall. In Australia, seasonal demand does not fluctuate as significantly as it does in the United States.

The pork industry has similar seasonal cycles but in different months. It takes an average of 11 months from conception for a hog to reach market weight. Generally, sows are less productive in summer months, resulting in fewer hogs available in the spring and early summer, which causes prices of hogs and boxed pork to rise, but production to fall. The highest demand for pork occurs from October to March, as hog availability and holiday occasions increase the demand for hams, tenderloins and other higher value pork products. During the quarter ended March 29, 2009, seasonal demand followed normal historical patterns.

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We believe that our results of operations are not materially affected by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our operations in fiscal years 2008, 2007 and 2006. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse effect on our business, financial condition and results of operations.

Other factors that impact the results of our operations include outbreaks of livestock disease, product contamination or recalls, our ability to implement our business plan (including our ability to arrange financing when required and on reasonable terms), and the implementation of our financing strategy and capital expenditure plan.

RESULTS OF OPERATIONS

Our current fiscal year is based on the 52- or 53-week period ending on the last Sunday in December. Our predecessor company’s fiscal year was based on the 52- or 53-week period ending on the last Sunday in May. We present financial statements for the following periods:

• the fiscal year ended December 24, 2006,

• the 198 days from December 25, 2006 through July 10, 2007,

• the 173 days from July 11, 2007 (the date of the Swift Acquisition) through December 30, 2007,

• the fiscal year ended December 28, 2008, and

• the fiscal quarters ended March 30, 2008 and March 29, 2009.

The Swift Acquisition closed on July 11, 2007, and the financial statements for the 198 days from December 25, 2006 to July 10, 2007 represent the period between the end of the last day of the fiscal year ended December 24, 2006 and the day prior to the closing of the Swift Acquisition. The periods ended prior to July 11, 2007 are referred to as the “predecessor” periods. The financial statements for the 173-day period from July 11, 2007 through December 30, 2007 represent the period from the date of the Swift Acquisition through December 30, 2007. The periods ended subsequent to July 10, 2007 are referred to as the “successor” periods.

On May 26, 2006, we completed the sale of our non-fed cattle business, including our operating plant assets in Omaha, Nebraska and our idled Nampa, Idaho assets. Due to our significant continuing involvement with the non-fed processing facilities through a raw material supply agreement, the operating results related to these plants have been reflected in our continuing operations through the fiscal year ended December 24, 2006.

Our consolidated results of operations for the 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 are not fully comparable to our results for the fiscal year ended December 24, 2006 due to the change in cost basis and recapitalization that occurred on July 11, 2007.

Our consolidated results of operations for the fiscal year ended December 28, 2008 are not fully comparable to our results of operations for the combined 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 due to the (1) change in cost basis and recapitalization that occurred on July 11, 2007, (2) Tasman Acquisition that closed on May 2, 2008 and (3) JBS Packerland Acquisition that closed on October 23, 2008.

Our consolidated results of operations for the fiscal quarter ended March 29, 2009 are not fully comparable to our results of operations for the fiscal quarter ended March 30, 2008 due to the (1) Tasman Acquisition that closed on May 2, 2008 and (2) JBS Packerland Acquisition that closed on October 23, 2008.

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Prior to the Tasman Acquisition, we had significant operations in northern Australia through our legacy Australian subsidiaries. As a result, even prior to the Tasman Acquisition, the value of the Australian dollar as compared to the U.S. dollar had an effect on our Australian operations.

Supplemental financial data

The following table presents segment results for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007, the 173 days ended December 30, 2007, the fiscal year ended December 28, 2008, and the fiscal quarters ended March 30, 2008 and March 29, 2009.

	Predecessor						Successor
in thousands	Fiscal year ended December 24, 2006			198 days ended July 10, 2007			173 days ended December 30, 2007			Fiscal year ended December 28, 2008			Fiscal quarter ended March 30, 2008			Fiscal quarter ended March 29, 2009
	(audited)			(audited)			(audited)			(audited)			(unaudited)			(unaudited)
Net sales:
Beef	$	7,576,136		$	3,757,295		$	3,942,231		$	9,975,510		$	1,935,142		$	2,680,205
Pork		2,152,583			1,234,133			1,063,644			2,438,049			535,509			526,283
Corporate and other		(37,287	)		(20,804	)		(16,891	)		(51,278	)		(8,994	)		(10,149	)
Total	$	9,691,432		$	4,970,624		$	4,988,984		$	12,362,281		$	2,461,657		$	3,196,339
Depreciation, amortization expense and goodwill impairment(1):
Beef	$	65,443		$	32,913		$	25,627		$	68,721		$	14,114		$	26,568
Pork		23,679			11,925			9,617			23,653			5,025			6,784
Total	$	89,122		$	44,838		$	35,244		$	92,374		$	19,139		$	33,352

(1) The fiscal year ended December 24, 2006 included a $4.5 million goodwill impairment charge.

Fiscal quarter ended March 29, 2009 compared to fiscal quarter ended March 30, 2008

Net sales.    Net sales is defined as gross sales (amounts invoiced to customers) less any sales returns and allowances. We grant allowances that are customary in our business. Net sales for the fiscal quarter ended March 29, 2009 totaled $3,196.3 million as compared to net sales of $2,461.7 million for the fiscal quarter ended March 30, 2008. Net sales for the fiscal quarter ended March 29, 2009 increased $734.7 million, or 29.8%, as compared to the fiscal quarter ended March 30, 2008, primarily reflecting an overall 10% increase in sales volume, which was partially offset by a 6.1% overall decrease in sales prices. Excluding the JBS Packerland and Tasman Acquisitions, net sales would have been $2,307.1 million for the fiscal quarter ended March 29, 2009, representing a decrease of $154.5 million. This sales price decrease reflected a 7.3% decrease in Beef segment prices, partially offset by a 4.6% increase in Pork segment prices. Volumes increased in our Beef segment by 49.4% driven by the JBS Packerland and Tasman Acquisitions (a 1.6% decrease excluding the JBS Packerland and Tasman Acquisitions primarily due to market conditions, including demand), and a 6.1% decrease in our Pork segment related to overall market conditions, including demand and margins. The addition of smalls in Australia for the period ended March 29, 2009 was the primary driver of the decline in per unit selling

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prices. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we utilized a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar as compared to the U.S. dollar decreased 27.0% between the two periods which negatively affected net sales from our international operations included in our Beef segment.

Cost of goods sold.    Cost of goods sold totaled $3,123.4 million for the fiscal quarter ended March 29, 2009 as compared to $2,451.4 million for the fiscal quarter ended March 30, 2008. Cost of goods sold increased $671.9 million, or 27.4%, for the fiscal quarter ended March 29, 2009 as compared to the fiscal quarter ended March 30, 2008. Excluding the JBS Packerland and Tasman Acquisitions, cost of goods sold would have been $2,268.7 million for fiscal quarter ended March 29, 2009, representing a decrease of $182.7 million. Cost of goods sold increased 34.6% in our Beef segment as a result of a 49.4% increase in slaughter volumes (primarily attributable to the JBS Packerland and Tasman Acquisitions), offset by a 1.6% decrease in slaughter volumes at the legacy Swift beef facilities and an 11.7% decrease in cattle prices and further offset by a 0.2% decrease in cost of goods sold in our Pork segment (which was driven by a 6.1% decrease in hog slaughter volumes, partially offset by a 7.2% increase in hog prices). Although total cost of goods sold increased quarter over quarter due to increased Beef segment production volume, we demonstrated reductions in per head cost for the following categories: freight costs, hourly wages including overtime, utilities costs (driven by lower natural gas prices), repairs and maintenance costs and storage costs.

Gross margin percentages.    Gross margin percentage (gross profit as a percent of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to 0.4% for the fiscal quarter ended March 30, 2008. The increase in gross margin percentage reflects a 2.7 percentage point increase in our Beef segment, partially offset by a decrease of 1.6 percentage points in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to renegotiation of supply contracts, elimination of certain third-party service providers (including cattle hotelling, lab services and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from increased volume sold to international markets where products like the special cuts described above generate a higher return. Margin declines in our Pork segment were driven by a 7.2% increase in hog prices, which could not be fully passed on through higher selling prices, especially for rendered products used for fuel for which demand and prices decreased due to lower petroleum product prices between the corresponding periods. Excluding the JBS Packerland and Tasman Acquisitions, gross margin percentage would have been 1.7% for fiscal quarter ended March 29, 2009, representing an increase of 1.3% year over year.

Selling, general and administrative expenses.    Selling, general and administrative expenses were $61.6 million for the fiscal quarter ended March 29, 2009 as compared to $31.0 million for the fiscal quarter ended March 30, 2008. These expenses increased by $30.6 million, or 98.4%. Excluding the JBS Packerland and Tasman Acquisitions, selling, general and administrative expenses increased $19.4 million, or 62.4%, when compared to the same period in the prior year. During the fiscal quarter ended March 29, 2009, we reached an agreement to terminate our efforts to acquire National Beef Packing Company, LLC, or National Beef, and as a result, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million, and we recorded as an expense the related incurred legal costs totaling an additional $1.0 million. These non-recurring costs of $20.9 million were recorded in selling, general and administrative

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expenses in the “Corporate and other” segment. This increase was partially offset by the effect of the depreciation of 27.0% in the value of the Australian dollar as compared to the U.S. dollar between the comparative fiscal quarters.

Foreign currency transaction, net.    Foreign currency transaction, net for the fiscal quarter ended March 29, 2009 was a gain of $5.1 million as compared to a gain of $12.6 million for the fiscal quarter ended March 30, 2008. This $7.5 million change related to the effects of the variation in the value of the Australian dollar as compared to the U.S. dollar on our U.S. dollar-denominated intercompany note payable and receivable within Australia. The value of the Australian dollar as compared to the U.S. dollar depreciated 24.4% between the two period ends.

Interest expense, net.    Interest expense, net for the fiscal quarter ended March 29, 2009 was $14.6 million as compared to $8.1 million for the fiscal quarter ended March 30, 2008. This increase of $6.5 million related to additional borrowings under our intercompany loans and our revolving credit facility. As part of the Tasman Acquisition, we also assumed incremental debt. The additional borrowings were used to finance our working capital needs following the JBS Packerland and Tasman Acquisitions in 2008. In addition, the average interest rate applicable to these borrowings was slightly higher in the 2009 period as compared to the 2008 period. See Note 16, “Subsequent event,” to our unaudited consolidated financial statements included elsewhere in this prospectus and “—Liquidity and capital resources.”

Income tax expense, net.    Income tax expense, net for the fiscal quarter ended March 29, 2009 was $0.9 million as compared to $5.6 million for the fiscal quarter ended March 30, 2008. The expense for both periods relates mainly to our Australian operations as we had established a valuation allowance in the United States. Therefore, the $4.7 million decrease related to a decrease in our international income.

Net income (loss).    As a result of the factors discussed above, our net income for the fiscal quarter ended March 29, 2009 increased to income of $2.3 million from a loss of $18.1 million for the fiscal quarter ended March 30, 2008.

Beef segment

Net sales.    Net sales totaled $2,680.2 million for the fiscal quarter ended March 29, 2009 as compared to $1,935.1 million for the fiscal quarter ended March 30, 2008. Net sales increased by $745.1 million, or 38.5%, as a result of an increase in production volume of 49.4%, which was partially offset by a 7.3% decrease in selling prices. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. Increases in production related primarily to the JBS Packerland and Tasman Acquisitions, partially offset by a 1.6% decrease in volume from the legacy Swift beef facilities between the two quarters. Excluding the JBS Packerland and Tasman Acquisitions, net sales would have been $1,791.0 million for the fiscal quarter ended March 29, 2009, representing a decrease of $144.2 million, or 7.4%, primarily driven by the 27.0% depreciation of the Australian dollar compared to the U.S. dollar between the two quarters.

Cost of goods sold.    Cost of goods sold totaled $2,619.6 million in the fiscal quarter ended March 29, 2009 as compared to $1,945.6 million in the fiscal quarter ended March 30, 2008. This increase of $673.9 million, or 34.6%, resulted from a 49.4% increase in slaughter volumes (primarily attributable to the JBS Packerland and Tasman Acquisitions, offset by a 1.6% decrease in slaughter volumes at the legacy Swift beef facilities), further offset by an 11.7% decrease in

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cattle prices. Excluding the JBS Packerland and Tasman Acquisitions, cost of goods sold would have been $1,764.9 million for fiscal quarter ended March 29, 2009, representing a decrease of $180.7 million. The increase in cost of goods sold was also offset by the 27.0% percent decrease in the value of the Australian dollar as compared to the U.S. dollar. Notwithstanding the overall increase in cost of goods sold, on a cost per head basis, reductions occurred in hourly production overtime, maintenance costs, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices).

Gross margin percentages.    Gross margin percentage (gross profit as a percent of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to (0.5)% for the fiscal quarter ended March 30, 2008. Excluding the JBS Packerland and Tasman Acquisitions, gross margin percentage would have been 1.5% for the fiscal quarter ended March 29, 2009, representing a 2.0 percentage point increase. The margin improvement in our Beef segment was driven by improvements in the product mix resulting from identification of higher value markets for certain products, coupled with manufacturing cost reductions and improved operational efficiency, as further described in the discussion of our consolidated results above.

Selling, general and administrative expenses.    Selling general and administrative expenses were $28.6 million for the fiscal quarter ended March 29, 2009 as compared to $19.7 million for the fiscal quarter ended March 30, 2008. This increase of $8.9 million, or 45.4%, resulted primarily from the JBS Packerland and Tasman Acquisitions. Excluding the JBS Packerland and Tasman Acquisitions, selling, general and administrative expenses totaled $17.4 million for the fiscal quarter ended March 29, 2009, a decrease of $2.3 million from the fiscal quarter ended March 30, 2008. The decrease was partially due to the 27.0% depreciation in the value of the Australian dollar as compared to the U.S. dollar between the comparative quarters.

Depreciation and amortization expense.    Depreciation and amortization expense for the fiscal quarter ended March 29, 2009 was $26.6 million as compared to $14.1 million for the fiscal quarter ended March 30, 2008. This increase of $12.5 million, or 88.2%, related to the JBS Packerland and Tasman Acquisitions. Excluding the JBS Packerland and Tasman Acquisitions, depreciation and amortization would have decreased $0.5 million, or 3.9%, resulting primarily from the depreciation recorded on assets placed in service, offset by the impact of assets fully depreciated during the period. See Note 4, “Property, plant and equipment,” to our unaudited consolidated financial statements included in this prospectus for more information about how this depreciation and amortization is reflected in our financial statements.

Pork segment

Net sales.    Net sales totaled $526.3 million for the fiscal quarter ended March 29, 2009 as compared to $535.5 million for the fiscal quarter ended March 30, 2008. This decrease in of $9.2 million, or 1.7%, as compared to the fiscal quarter ended March 30, 2008, was primarily due to an overall 6.1% decrease in volume, partially offset by a 4.6% overall increase in sales prices.

Cost of goods sold.    Cost of goods sold totaled $ 513.9 million for the fiscal quarter ended March 29, 2009 as compared to $514.8 million for the fiscal quarter ended March 30, 2008. This decrease of $0.8 million, or 0.2%, was primarily a result of a 6.1% decrease in our Pork segment slaughter volumes partially offset by a 7.2% increase in hog prices. The following cost categories were reduced on a per head basis: storage, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices and increased alternative fuel credits).

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Gross margin percentages.    Gross margin percentage (gross profit as a percentage of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to 3.9% for the fiscal quarter ended March 30, 2008. This decrease of 1.6 percentage points reflects lower sales margins. Gross margin percentage was impacted by a 7.2% increase in hog prices. Sales margins were also negatively impacted by lower rendered product prices driven by lower petroleum prices. The following cost categories were reduced on a per head basis: storage, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices and increased alternative fuel credits), each of which helped to partially offset the increase in hog costs.

Selling, general, and administrative expenses.    Selling, general, and administrative expenses were $12.0 million for the fiscal quarter ended March 29, 2009 as compared to $11.4 million for the fiscal quarter ended March 30, 2008. These expenses increased by $0.6 million, or 5.9%.

Depreciation and amortization.    Depreciation and amortization expense for the fiscal quarter ended March 29, 2009 was $6.8 million as compared to $5.0 million for the fiscal quarter ended March 30, 2008. This increase of $1.8 million, or 35%, resulted primarily from the depreciation recorded on assets placed in service, partially offset by the impact of assets fully depreciated during the period. See Note 4, “Property, plant and equipment,” to our unaudited consolidated financial statements included in this prospectus for more information about how this depreciation and amortization is reflected in our financial statements.

The 173-day period from July 11, 2007 through December 30, 2007 (successor) compared to the fiscal year ended December 28, 2008 (successor)

Net sales.    Net sales in the 173-day period from July 11, 2007 through December 30, 2007 (successor) were $4,989.0 million compared to $12,362.3 million for the fiscal year ended December 28, 2008 (successor). Net sales per day increased due to per day volume increases of 12.1%, partially offset by a price decline of 6.4%.

Cost of goods sold.    Cost of goods sold totaled $11,917.8 million for the fiscal year ended December 28, 2008 (successor) as compared to $5,013.1 million for the 173-day period from July 11, 2007 through December 30, 2007 (successor). This increase was due to the per day volume increases of 12.1%, partially offset by a price decline of 10.7%. In addition, the increase is also attributable to the JBS Packerland and Tasman Acquisitions, coupled with the 28.3% appreciation in the Australian dollar relative to the U.S. dollar between the two periods.

Gross margin percentages.    Gross margin percentage (gross profit as a percentage of net sales) in the 173-day period from July 11, 2007 through December 30, 2007 (successor) was (0.5)% compared to 3.6% for the fiscal year ended December 28, 2008 (successor). The increase in gross margin percentage in the more recent period was due principally to continuing improvements in production throughput, operating costs, efficiency and product yields as employees hired subsequent to the December 12, 2006 investigation by the U.S. Department of Homeland Security’s Immigration and Customs Enforcement division, or the ICE event, gained the ability to perform at the level of pre-ICE event production employees. See “Risk factors—Risks relating to our business and the beef and pork industries—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

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Selling, general and administrative expenses.    Selling, general and administrative expenses in the 173-day period from July 11, 2007 through December 30, 2007 (successor) were $60.7 million compared to $148.8 million for the fiscal year ended December 28, 2008 (successor). Selling, general and administrative expenses per day increased due to the JBS Packerland and Tasman Acquisitions, more than offsetting the favorable impact of the company’s de-layering of management effective July 13, 2007 and the renegotiation of professional service contracts in the areas of audit, tax and legal services. In addition, the Australian dollar appreciated relative to the U.S. dollar by 28.3% between the two periods.

Foreign currency transaction, net.    Foreign currency transaction, net was a net $5.2 million gain in the 173-day period from July 11, 2007 to December 30, 2007 as compared to a net $76.0 million loss in the fiscal year ended December 28, 2008. The foreign currency transaction loss resulted from the depreciation of the Australian dollar relative to the U.S. dollar by 22.1% between the two period ends applied against a $250 million intercompany note payable between JBS Swift Australia Pty Ltd and its U.S. parent company.

Interest expense, net.    Interest expense, net for the 173-day period from July 11, 2007 through December 30, 2007 (successor) was $34.3 million compared to $36.4 million for the fiscal year ended December 28, 2008 (successor). This increase of 5.9% in the more recent period as compared to the prior period reflects the fact that borrowings decreased an average of $393.2 million due primarily to improved operating cash flows, as well as a one-time cost of $12.7 million incurred in the 2007 period associated with an unconsummated debt offering in July 2007.

Income tax expense (benefit).    Income tax expense, net for the 173-day period from July 11, 2007 through December 30, 2007 (successor) was $1.0 million as compared to $31.2 million for the fiscal year ended December 28, 2008. This $30.2 million increase is related primarily to a change in our valuation allowance due to the JBS Packerland Acquisition in which we acquired additional deferred income tax liabilities.

Net income (loss).    As a result of the factors discussed above, we had net income for the fiscal year ended December 28, 2008 of $161.1 million as compared to an $111.6 million net loss for the 173-day period from July 11, 2007 to December 30, 2007.

The 198-day period from December 25, 2006 to July 10, 2007 (predecessor) compared to the fiscal year ended December 24, 2006 (predecessor)

Net sales.    Net sales for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) were $4,970.6 million compared to $9,691.4 million for the fiscal year ended December 24, 2006 (predecessor). Net sales per day decreased due to volume decreases of 5.2% offset by price increases of 5.6%. In addition, the value of the Australian dollar as compared to the U.S. dollar decreased 7.1% between the two periods.

Cost of goods sold.    Cost of goods sold totaled $4,920.6 million for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) as compared to $9,574.7 million for the fiscal year ended December 24, 2006 (predecessor). Cost of goods sold per day decreased due to volume decreases of 5.2%, partially offset by price increases of 5.9%. In addition, the value of the Australian dollar as compared to the U.S. dollar decreased 7.1% between the two periods.

Gross margin percentages.    Gross margin percentage (gross profit as a percentage of net sales) for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) was 1.0% as

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compared to 1.2% for the fiscal year ended December 24, 2006 (predecessor). This decrease in gross margin percentage in the more recent period was due principally to the negative impact of the ICE event on production throughput, operating costs, efficiency and product yields as lesser-trained replacement workers were not able to perform at the level of pre-ICE event production employees. See “Risk factors—Risks relating to our business and the beef and pork industries—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

Selling, general and administrative expenses.    Selling, general and administrative expenses for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) were $92.3 million as compared $158.8 million for the fiscal year ended December 24, 2006 (predecessor). Selling, general and administrative expense per day increased between the two periods primarily as a result of the one-time costs of approximately $13.0 million incurred relating sell-side expenses incurred by our predecessor in connection with the Swift Acquisition, including legal costs, employee severance costs and employee retention bonuses accrued as earned in the days immediately prior to the acquisition. These costs were partially offset by a decrease of 7.1% in the value of the Australian dollar as compared to the U.S. dollar between the two periods.

Interest expense.    Interest expense for the 198-day period December 25, 2006 to July 10, 2007 (predecessor) was $66.4 million as compared to $118.8 million for the fiscal year ended December 24, 2006 (predecessor). Interest expense on a per day basis increased 2.8% in the more recent period as compared to the prior fiscal year as borrowings had increased an average of $136.4 million due primarily to negative operating cash flows resulting from the ICE event impact on production volumes.

Income tax expense (benefit).    Income tax benefit, net for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) was $18.4 million as compared to $37.3 million for the fiscal year ended December 24, 2006. This $18.9 million decrease related primarily to a change in our valuation allowance due to our history of losses in the United States.

Net loss.    As a result of the factors described above, we recorded a net loss for the 198-day period ended July 10, 2007 of $83.0 million, as compared to a net loss incurred in the fiscal year ended December 24, 2006 of $117.4 million.

Pro forma results of operations

Our consolidated results of operations for the fiscal quarter ended March 29, 2009 are not fully comparable to our results of operations for the fiscal quarter ended March 30, 2008 due to (1) the Tasman Acquisition that closed on May 2, 2008 and (2) the JBS Packerland Acquisition that closed on October 23, 2008.

In addition, our consolidated results of operations for the fiscal year ended December 28, 2008 are not fully comparable to our results of operations for the fiscal year ended December 30, 2007 due to (1) the change in cost basis and recapitalization that occurred on July 11, 2007 in connection with the Swift Acquisition, (2) the Tasman Acquisition that closed on May 2, 2008 and (3) the JBS Packerland Acquisition that closed on October 23, 2008.

In light of these transactions, as well as the offering and sale of our 11.625% senior unsecured notes due 2014 that occurred in April 2009, and in order to facilitate an analysis of our financial

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information, we are presenting pro forma statements of operations for the fiscal quarter ended March 29, 2009 and for the fiscal year ended December 28, 2008. See “Unaudited pro forma financial statements.”

We are also presenting supplementary pro forma statements of operations for the following periods for comparative purposes:

• the fiscal quarter ended March 30, 2008 as if (a) our offering of our 11.625% senior unsecured notes due 2014 and the application of proceeds therefrom, and (b) the JBS Packerland Acquisition, in each case, had occurred at the beginning of the period presented; and

• the fiscal year ended December 30, 2007 as if (a) the change in cost basis and recapitalization that occurred on July 11, 2007 in connection with the Swift Acquisition and (b) the JBS Packerland Acquisition, in each case, had occurred at the beginning of the period presented.

The following unaudited pro forma statements of operations tables reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions that we believe are reasonable under the circumstances, and the actual results could differ materially from these anticipated results. In our opinion, all adjustments that are necessary to present fairly the unaudited pro forma consolidated data have been made. The following unaudited pro forma statements of operations tables are presented for informational purposes only and do not purport to be indicative of what would have occurred had the JBS Packerland Acquisition, Tasman Acquisition, Swift Acquisition or the offering of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom actually been consummated at the beginning of the period presented, nor are they necessarily indicative of our future consolidated operating results.

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Unaudited pro forma combined statement of operations

for the fiscal quarter ended March 29, 2009

	JBS USA Holdings, Inc.							JBS USA Holdings, Inc.
in thousands, except for earnings per share	March 29, 2009			Adjustments				March 29, 2009
	Historical			(+)			Notes	Pro forma
Net sales	$	3,196,339		$	—			$	3,196,339
Cost of goods sold		3,123,358			—				3,123,358
Gross profit		72,981			—				72,981
Selling, general and administrative expenses		61,598			—				61,598
Foreign currency transaction gains		(5,075	)		—				(5,075	)
Other income		(1,475	)		—				(1,475	)
Loss on sales of property, plant and equipment		180			—				180
Interest expense, net		14,592			10,024		(a)		24,616
Total expenses		69,820			10,024				79,844
Income (loss) from continuing operations before income tax		3,161			(10,024	)			(6,863	)
Income tax expense (benefit)		909			(3,509	)	(b)		(2,600	)
Net income (loss)	$	2,252		$	(6,515	)		$	(4,263	)
Basic and diluted net income (loss) per share	$	22,520.00						$	(42,630.00	)

(a) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)		16,302
Interest expense, intercompany debt(iv)		(8,345	)
Total interest expense, net(v)	$	10,024

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(iii) Includes pro forma interest expense for the period from December 29, 2008 through March 29, 2009 on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014.

(iv) Includes the reduction of pro forma interest expense for our intercompany loans due to the $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(b) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

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Unaudited pro forma combined statement of operations for the fiscal quarter ended March 30, 2008

	JBS USA Holdings, Inc.			JBS Packerland			JBS Packerland			JBS Packerland			Five Rivers			Five Rivers							JBS USA Holdings, Inc.
	December 31, 2007 through March 30, 2008			December 31, 2007 through March 30, 2008 (a)(i)			Adjustment for 50% equity interest in Five Rivers (b)			Adjustment for assets not acquired (c)(i)			December 31, 2007 through March 30, 2008 (a)(ii)			Adjustment for assets not acquired (c)(ii)			Adjustment for transaction				December 31, 2007 through March 30, 2008
	Historical			Historical									Historical									Notes	Pro forma
in thousands, except earnings per share	(+)			(+)			(-)			(-)			(+)			(-)			(+)
Net sales	$	2,461,657		$	729,130		$	—		$	775		$	480,701		$	325,614		$	(960	)	(d)	$	3,344,139
Cost of goods sold		2,451,413			696,897			—			(3,389	)		473,618			329,215			2,705		(d),(e)		3,298,807
Gross profit		10,244			32,233			—			4,164			7,083			(3,601	)		(3,665	)			45,332
Selling, general and administrative expenses		31,042			22,168			—			6,319			3,473			—			1,202		(e)		51,566
Foreign currency transaction gains		(12,614	)		—			—			—			—			—			—				(12,614	)
Other income (expense)		(3,782	)		2,136			884			1,290			(78	)		42			—				(3,940	)
Loss on sales of property, plant and equipment		19			1			—			—			2			—			—				22
Interest expense, net		8,108			10,352			—			10,402			5,453			5,453			12,172		(f)		20,230
Total expenses		22,773			34,657			884			18,011			8,850			5,495			13,374				55,264
Loss from continuing operations before income tax		(12,529	)		(2,424	)		(884	)		(13,847	)		(1,767	)		(9,096	)		(17,037	)			(9,932	)
Income tax expense (benefit)		5,613			558			—			558			—			—			907		(g)		6,520
Net income (loss)	$	(18,142	)	$	(2,982	)	$	(884	)	$	(14,405	)	$	(1,767	)	$	(9,096	)	$	(17,946	)		$	(16,452	)
Basic and diluted net income (loss) per share	$	(181,420.00	)																				$	(164,520.00	)

(a) Represents the historical results of

(i) JBS Packerland, and

(ii) Five Rivers

for the period from December 31, 2007 through March 30, 2008.

(b) Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period December 31, 2007 through March 30, 2008. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(c) Reflects the elimination of assets not acquired for

(i) JBS Packerland, and

(ii) Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Beef Group, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(d) Reflects the elimination of $0.9 million of intercompany sales and $0.9 million of cost of goods sold between JBS Packerland and our legacy Swift Beef segment for the period from December 31, 2007 through March 30, 2008.

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(e) Represents the adjustment of $3.6 million to historical cost of goods sold and $1.2 million for selling, general and administrative expense to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:

Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134
Total purchase price	$563,202
Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$563,202

(i) Property, plant and equipment was recorded at fair value at the date of the JBS Packerland Acquisition. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

(ii) Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition that are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(f) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)	16,302
Interest expense, other debt(iv)	(6,197	)
Total Interest expense, net(v)	$12,172

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through March 30, 2008, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through March 30, 2008, calculated on a straight-line basis.

(iii) Includes pro forma interest expense on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through March 30, 2008.

(iv) Includes the reduction of pro forma interest expense for the period from December 31, 2007 through March 30, 2008 on our outstanding bank debt and intercompany loans from JBS S.A. due to a $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(g) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

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Pro forma fiscal quarter ended March 29, 2009 compared to the pro forma fiscal quarter ended March 30, 2008

Net sales.    Net sales were $3,196.3 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $3,344.1 million for the pro forma fiscal quarter ended March 30, 2008. Net sales decreased by $147.8 million, or 4.4%, due to a sales price decrease of 10.6% in Beef segment prices coupled with a decrease in slaughter volumes of 1.6% in the legacy Swift beef facilities and a 6.1% decrease in hog slaughter volumes in our Pork segment, which was partially offset by a 4.6% increase in Pork segment prices. The addition of smalls in Australia for the period ended March 29, 2009 was the primary driver of the decline in per unit selling prices in our Beef segment. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar as compared to the U.S. dollar declined 27.0% between the two periods. The 1.6% decrease in slaughter volumes was primarily due to overall differences in market conditions, including demand and margins, and the 6.1% decrease in the Pork segment was primarily due to overall differences in market conditions, including demand and margins.

Cost of goods sold.    Cost of goods sold totaled $3,123.4 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $3,298.8 million for the pro forma fiscal quarter ended March 30, 2008. Cost of goods sold decreased $175.5 million, or 5.3%, for the pro forma fiscal quarter ended March 29, 2009 as compared to the pro forma fiscal quarter ended March 30, 2008. Cost of goods sold declined in our Beef segment as a result of an 11.7% decrease in cattle prices coupled with a 1.6% decrease in slaughter volumes in the legacy Swift beef facilities. In addition, we recorded a 0.2% decrease in cost of goods sold in our Pork segment driven by a 6.1% decrease in slaughter volumes, partially offset by a 7.2% increase in hog prices. We demonstrated reductions in per head cost for the following categories: lower freight costs, hourly wages including overtime, utilities costs (driven by lower natural gas prices), repairs and maintenance costs and storage costs.

Gross margin percentages.    Gross margin percentage (gross profit as a percentage of net sales) was 2.3% for the pro forma fiscal quarter ended March 29, 2009 as compared to 1.4% for the pro forma fiscal quarter ended March 30, 2008. This increase reflected improvements in sales markets which place higher value on certain cuts, reductions in our operating costs and improvements in plant efficiency and yields. The increase also reflects a margin increase of 1.4% in our Beef segment, partially offset by a margin decrease of 1.5% in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to renegotiation of supply contracts, elimination of certain third- party service providers (including cattle hotelling, lab services, and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from the increases in volumes sold to international markets where products like the special cuts described above generate a higher return. Margin declines in our Pork segment were driven by a 7.2% increase in hog prices which could not be fully passed on through higher selling prices, especially for rendered products used for fuel for which demand and prices were lower due to lower petroleum product demand and prices from period to period.

Selling, general and administrative expenses.    Selling, general and administrative expenses were $61.6 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $51.6 million for the pro forma fiscal quarter ended March 30, 2008. These expenses increased by $10.0 million,

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or 19.4%. During the pro forma fiscal quarter ended March 29, 2009, we reached an agreement to terminate our efforts to acquire National Beef, and as a result, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million, and we recorded as an expense the related incurred legal costs totaling an additional $1.0 million. These non-recurring costs, totaling $20.9 million were recorded in selling, general and administrative expenses in the “Corporate and other” segment. This increase was partially offset by the effect of the depreciation of 27.0% in the value of the Australian dollar as compared to the U.S. dollar between the comparative fiscal quarters.

Foreign currency transaction, net.    Foreign currency transaction, net for the pro forma fiscal quarter ended March 29, 2009 was a gain of $5.1 million as compared to a gain of $12.6 million for the pro forma fiscal quarter ended March 30, 2008. This $7.5 million decrease related to the variation in the value of the Australian dollar as compared to the U.S. dollar on our U.S. dollar-denominated intercompany note payable and receivable within Australia. The value of the Australian dollar as compared to the U.S. dollar depreciated 24.4% between the two period ends.

Interest expense, net.    Interest expense was $24.6 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $20.2 million for the pro forma fiscal quarter ended March 30, 2008. Interest expense increased by $4.4 million, or 21.8%, due primarily to increased borrowings under our revolving credit facility in 2009 that accrued interest at a higher average interest rate than the interest rate applicable to our intercompany loans in 2008.

Income tax expense, net.    Income tax expense, net for the pro forma fiscal quarter ended March 29, 2009 was a benefit of $2.6 million as compared to an expense of $6.5 million for the pro forma fiscal quarter ended March 30, 2008. The expense for both periods relates mainly to our Australian operations as we had established a valuation allowance in the United States. Therefore, the $9.1 million decrease related to a decrease in our international income.

Net income.    Our pro forma net income for the fiscal quarter ended March 29, 2009 was a loss of $4.3 million compared to a loss of $16.5 million in the prior period as a result of the factors described above.

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Unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008

	JBS USA Holdings, Inc.			JBS Packerland			JBS Packerland			JBS Packerland			Five Rivers			Five Rivers			Adjustment for transaction					JBS USA Holdings, Inc.
	Fiscal year ended December 28, 2008			December 31, 2007 through October 22, 2008 (a)(i)			Adjustment for 50% equity interest in Five Rivers (b)			Adjustment for assets not acquired (c)(i)			December 31, 2007 through October 22, 2008 (a)(ii)			Adjustment for assets not acquired (c)(ii)								Fiscal year ended December 28, 2008
	Historical			Historical									Historical									Notes		Pro forma
in thousands, except earnings per share	(+)			(+)			(-)			(-)			(+)			(-)			(+)
Net sales	$	12,362,281		$	2,548,224		$	—		$	4,923		$	1,461,140		$	912,920		$	(8,011	)	(d	)	$	15,445,791
Cost of goods sold		11,917,777			2,397,551			—			4,949			1,511,462			988,814			4,724		(d),(e	)		14,837,751
Gross profit (loss)		444,504			150,673			—			(26	)		(50,322	)		(75,894	)		(12,735	)				608,040
Selling, general and administrative expenses		148,785			78,793			—			24,017			11,093			9			4,052		(e	)		218,697
Foreign currency transaction losses		75,995			—			—			—			—			—			—					75,995
Other income, net		(10,107	)		44,465			39,139			5,555			(208	)		(74	)		—					(10,470	)
Loss on sales of property, plant and equipment		1,082			107			—			—			131			224			—					1,096
Interest expense, net		36,358			30,837			—			31,005			16,940			16,940			46,431		(f	)		82,621
Total expenses		252,113			154,202			39,139			60,577			27,956			17,099			50,483					367,939
Income (loss) from continuing operations before		192,391			(3,529	)		(39,139	)		(60,603	)		(78,278	)		(92,993	)		(63,218	)				240,101
Income tax expense		31,287			2,222			—			2,222			—			—			16,699		(g	)		47,986
Net income (loss)	$	161,104		$	(5,751	)	$	(39,139	)	$	(62,825	)	$	(78,278	)	$	(92,993	)	$	(79,917	)			$	192,115
Basic and diluted net income (loss) per share	$	1,611,040.00																						$	1,921,150.00

(a) Represents the historical results of

(i) JBS Packerland, and

(ii) Five Rivers

for the period from December 31, 2007 through October 22, 2008.

(b) Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period December 31, 2007 through October 22, 2008. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(c) Reflects the elimination of assets not acquired for

(i) JBS Packerland, and

(ii) Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Foods, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(d) Reflects the elimination of $8.0 million of intercompany sales and $8.0 million of cost of goods sold between JBS Packerland and our Beef segment for the period from December 31, 2007 through October 22, 2008.

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(e) Represents the adjustment of $12.7 million to historical cost of goods sold and to selling, general and administrative expense of $4.1 million to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:

Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134
Total purchase price	$563,202
Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$563,202

(i) Property, plant and equipment was recorded at fair value at the date of the JBS Packerland Acquisition. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

(ii) Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition that are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(f) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$     467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)	65,209
Interest expense, intercompany debt(iv)	(27,047	)
Total Interest expense, net(v)	$46,431

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(iii) Includes pro forma interest expense on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008.

(iv) Includes the reduction of pro forma interest expense for the period from December 31, 2007 through December 28, 2008 on our consolidated intercompany loans from JBS S.A. due to a $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(g) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

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Unaudited pro forma combined statement of operations for the fiscal year ended December 30, 2007

	JBS USA Holdings, Inc.		JBS USA Holdings, Inc.		JBS Packerland		JBS Packerland		JBS Packerland		Five Rivers		Five Rivers						JBS USA Holdings, Inc.
	Dec. 25, 2006 to July 10, 2007 (a)		July 11, 2007 to Dec. 30, 2007 (a)		Dec. 25, 2006 through Dec. 30, 2007 (b)(i)		Adjust- ment for 50% equity interest in Five Rivers (c)		Adjust- ment for assets not acquired (d)(i)		Dec. 25, 2006 through Dec. 30, 2007 (b)(ii)		Adjust- ment for assets not acquired (d)(ii)		Adjust- ment for trans- action				Dec. 25, 2006 to Dec. 30, 2007
in thousands, except earnings per share	Historical		Historical		Historical						Historical						Notes		Pro forma
	(+)		(+)		(+)		(-)		(-)		(+)		(-)		(+)
Net sales	$	4,970,624	$	4,988,984	$	2,823,496	$	—	$	8,083	$	1,995,238	$	1,410,422	$	(6,091)	(e)		$	13,353,746
Cost of goods sold		4,920,594		5,013,084		2,750,464		—		41,475		1,941,093		1,393,107		18,917	(e),(f	),(g)		13,209,570
Gross profit (loss)		50,030		(24,100)		73,032		—		(33,392)		54,145		17,315		(25,008)				144,176
Selling, general and administrative expenses		92,333		60,727		60,850		—		1,938		12,953		—		10,012	(f),(g	)		234,937
Foreign currency transaction gains		(527)		(5,201)		—		—		—		—		—		—				(5,728)
Other income, net		(3,821)		(3,581)		(7,635)		(7,446)		(79)		(1,996)		(54)		—				(9,454)
(Gain) loss on sales of property, plant and equipment		(2,946)		182		133		—		—		324		—		—				(2,307)
Interest expense, net		66,383		34,340		41,056		—		41,056		27,972		28,136		(13,974)	(h	)		86,585
Total expenses		151,422		86,467		94,404		(7,446)		42,915		39,253		28,082		(3,962)				304,033
Income (loss) from continuing operations before income tax		(101,392)		(110,567)		(21,372)		7,446		(76,307)		14,892		(10,767)		(21,046)				(159,857)
Income tax expense (benefit)		(18,380)		1,025		—		—		—		—		—		18,236	(i	)		881
Net income (loss)	$	(83,012)	$	(111,592)	$	(21,372)	$	7,446	$	(76,307)	$	14,892	$	(10,767)	$	(39,282)			$	(160,738)
Basic and diluted net income (loss) per share(j)		N/A	$	(1,115,920.00)															$	(1,607,380.00)

(a) Represents the historical results of JBS USA Holdings, Inc. for the period from December 25, 2006 through July 10, 2007 (predecessor) and the period from July 11, 2007 through December 30, 2007 (successor).

(b) Represents the historical results of

(i) JBS Packerland, and

(ii) Five Rivers

for the period from December 25, 2006 through December 30, 2007.

(c) Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period from December 25, 2006 through December 30, 2007. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(d) Reflects the elimination of assets not acquired for

(i) JBS Packerland, and

(ii) Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Beef Group, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(e) Reflects the elimination of $6.1 million of intercompany sales and $6.1 million of cost of goods sold between JBS Packerland and our legacy Swift Beef segment for the period from December 25, 2006 through December 30, 2007.

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(f) Represents the adjustment of $15.4 million to historical cost of goods sold and to selling, general and administrative expenses of $4.7 million to reflect an increase in depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers, based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:

Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134
Total purchase price	$563,202
Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$563,202

(i) Property, plant and equipment was recorded at fair value at the date of the JBS Packerland Acquisition. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

(ii) Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition which are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(g) Represents the adjustment of $9.6 million to historical cost of goods sold and $5.3 million to selling, general and administrative expenses to reflect depreciation and amortization expense based on the fair values and useful lives of identified tangible and intangible assets for the Swift Acquisition. The aggregate purchase price for the acquisition was $1,470.6 million (including approximately $48.5 million of transaction costs). We accounted for the acquisition in accordance with the Statement of Financial Accounting Standard No. 141, Business Combinations.

(h) Reflects the following adjustments to interest expense, net relating to the transactions:

Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)		65,209
Interest expense, predecessor(iv)		(102,573)
Interest expense, successor(v)		15,121
Total Interest expense, net(vi)	$	(13,974)

(i) Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 25, 2006 through December 30, 2007, calculated on a straight-line basis.

(ii) Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 25, 2006 through December 30, 2007, calculated on a straight-line basis.

(iii) Includes pro forma interest expense on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014 for the period from December 25, 2006 through December 30, 2007.

(iv) Includes pro forma elimination of predecessor interest expense for the period from December 25, 2006 through December 30, 2007 related to debt that was repaid in connection with the Swift Acquisition.

(v) Includes pro forma interest expense related to the residual outstanding balance of $230.4 million on unsecured bank loans resulting from the reduction of an initial $750.0 million in aggregate principal amount of those unsecured bank loans in connection with the Swift Acquisition reduced by the pro forma application of the net proceeds of $519.6 million in aggregate principal amount of 11.625% senior unsecured notes due 2014, calculated using an average interest rate of 6.37%.

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(vi) We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (v) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(i) Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

(j) The capital structure of our predecessor company was significantly different from our capital structure. Prior to this offering, our capital structure consists of 100 common shares issued and outstanding, and we do not have any warrants or options that may be exercised. Accordingly, we do not believe our predecessor company’s earnings per share information is meaningful to investors and have not included such information.

Pro forma fiscal year ended December 28, 2008 (53 weeks) compared to the pro forma fiscal year ended December 30, 2007 (52 weeks)

Net sales.    Net sales were $15,445.8 million for the pro forma fiscal year ended December 28, 2008 as compared to $13,353.7 million for the pro forma fiscal year ended December 30, 2007. Net sales increased by $2,092.0 million, or 15.7%, primarily reflecting an overall 7.3% increase in volume combined with a 3.9% overall increase in sales prices. The volume increase was primarily due to an additional week of operating activity in the fiscal year ended December 28, 2008, coupled with increases in production volumes from the ramp-up of the Greeley plant’s second shift commencing in September 2007. The sales price increase included a 4.1% increase in Beef prices and a 2.2% increase in Pork prices. Volumes increased 13.0% in our Beef segment and 3.8% in our Pork segment. The volume increases in our Pork segment occurred across all of our facilities. The volume increases in our Beef segment were driven primarily by adding the second shift of production at our Greeley plant, but they also included volume increases at all of our Beef segment plants in the United States. In part, these volume increases were attributable to the return in mid-year 2008 of the South Korean beef market, as well as the identification of markets which maximize the margin of certain cuts, such as short rib to South Korea, picanha to Brazil, and the introduction of Australian meat to South American markets. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar average exchange rate relative to the U.S. dollar declined 0.1% between the two periods, which negatively affected net sales from our Australian operations in U.S. dollar terms.

Cost of goods sold.    Cost of goods sold totaled $14,837.8 million for the pro forma fiscal year ended December 28, 2008 as compared to $13,209.6 million for the pro forma fiscal year ended December 30, 2007. The increase, of $1,628.2 million, or 12.3%, was partially due to an additional week of operating activity in the fiscal year ended December 28, 2008. Cost of goods sold increased 13.7% in our Beef segment as a result of a 0.6% increase in cattle prices and a 13.0% increase in slaughter volumes, coupled with a 5.6% increase in our Pork segment driven by a 1.7% increase in hog prices and a 3.8% increase in slaughter volumes. Although total cost of sales increased year over year due to increased production volumes, we demonstrated reductions in per head cost for the following categories: renegotiation of contracts, operational performance improvements, packaging, freight, hourly labor, overtime, maintenance, contract services and operating supplies.

Gross margin percentages.    Gross margin percentage (gross profit as a percentage of net sales) was 3.9% for the pro forma fiscal year ended December 28, 2008 as compared to 1.1% for the pro forma fiscal year ended December 30, 2007. This increase reflects improvements in sales to

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markets which place higher value on certain cuts, reductions in our operating costs and improvements in plant efficiency and yields. This increase reflects a margin increase of 3.4% in our Beef segment and a margin increase of 0.5% in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to the renegotiation of supply contracts, elimination of certain third-party service providers (including cattle hotelling, lab services and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from the increases in volumes sold to international markets where products like the special cuts described above generate a higher return.

Selling, general and administrative expenses.    Selling, general and administrative expenses were $218.7 million for the pro forma fiscal year ended December 28, 2008 as compared to $234.9 million for the pro forma fiscal year ended December 30, 2007. These expenses decreased by $16.2 million, or 6.9%. The reduction in selling, general and administrative costs was a result of increased management focus on spending, the elimination of outside consultants, reductions in professional service fees and reductions in the number of executive management personnel in mid-2007 for which a full year of cost savings is reflected in fiscal 2008, partially offset by the inclusion of higher management incentives in fiscal 2008 due to improved business performance. In addition, the 0.1% decrease in the value of the Australian dollar relative to the U.S. dollar between the periods contributed to the decrease in expenses, partially offset by the additional week of operating expenses for the period ended December 28, 2008.

Foreign currency transaction, net.    Foreign currency transaction, net for the pro forma fiscal year ended December 28, 2008 was a loss of $76.0 million as compared to a gain of $5.7 million for the pro forma fiscal year ended December 30, 2007. This decrease of $81.7 million related to the variation in the exchange rate relating to the U.S. dollar-denominated intercompany note payable and receivable in Australia. The value of the Australian dollar relative to the U.S. dollar decreased 20.1% between the two periods.

Interest expense, net.    Interest expense, net was $82.6 million for the pro forma fiscal year ended December 28, 2008 as compared to $86.6 million for the pro forma fiscal year ended December 30, 2007. Interest expense, net decreased by $4.0 million, or 4.6%, due primarily to reduced borrowings.

Income tax expense, net.    Income tax expense, net for the pro forma fiscal year ended December 28, 2008 was $48.0 million as compared to $1.0 million for the pro forma fiscal year ended December 30, 2007. This $47.0 million decrease is related primarily to a change in our valuation allowance due to the JBS Packerland Acquisition in which we acquired additional deferred tax liabilities.

Net income.    Our pro forma net income for the fiscal year ended December 28, 2008 was $192.1 million as compared to a net loss of $160.7 million for the fiscal year ended December 30, 2007.

Liquidity and capital resources

Our ongoing operations require the availability of funds to service debt, fund working capital needs, invest in our business, and pay our liabilities. We currently finance and expect to continue to finance these activities through cash flow from operations and from amounts available under our senior secured revolving credit facility.

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As of March 29, 2009, we had working capital of $745.7 million compared to $829.1 million as of December 28, 2008. The decrease from December 2008 is primarily due to normal seasonality factors in the beef and pork industries. Our average Days Inventory Outstanding, or DIO, and Days Sales Outstanding, or DSO, for the fiscal quarter ended March 29, 2009 were 18.9 and 14.6, respectively, compared to 20.1 and 16.2, respectively, for the fiscal quarter ended March 30, 2008. We consider accounts receivable and inventory to be readily convertible to cash and an additional source of cash liquidity as compared to companies and industries with longer DSO or DIO.

We believe that cash on hand, cash flows from operations, availability under our senior secured revolving credit facility and other long-term borrowings will be sufficient to meet ongoing operating requirements, make scheduled principal and interest payments on debt, and fund ordinary capital expenditures for the foreseeable future. Our ability to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control. Capital expenditures for 2009 are expected to approximate $150 million, of which approximately 50% is expected to be for maintenance and the remainder for major renewals, improvements and the development of new processing capabilities. We anticipate that we may spend approximately $1.5 billion to $2.0 billion from 2010 through 2012, of which approximately $500 million is expected to be for maintenance, major renewals, improvements and the development of new processing capabilities, and the remainder, or approximately $1.0 to 1.5 billion, may be used to fund our strategy to enhance our direct distribution capabilities.

Cash flows

Operating activities.    Net cash provided by (used in) operating activities increased to $282.1 million for the fiscal year ended December 28, 2008 as compared to $(110.7) million for the 173-day period from July 11, 2007 through December 30, 2007 (successor) and $(107.8) million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary source of operational cash flow improvements was improved operational results between the periods driven by increased volumes, higher sales margins and lower operating costs, coupled with a deferred revenue advance payment of $175.0 million. See “—External sources of liquidity and description of indebtedness—Customer advance payment relating to raw material supply agreement.”

Net cash provided by (used in) operating activities increased by $179.9 million to $51.0 million for the fiscal quarter ended March 29, 2009 as compared to $(128.9) million for the fiscal quarter ended March 30, 2008. The increase is attributable to improved margins which are the result of improvements in our sales product mix, identification of higher value markets for certain of our products, reduction in our manufacturing costs and improved operational efficiencies including year-over-year inventory management.

Investing activities.    Cash used in investing activities totaled $783.7 million for the fiscal year ended December 28, 2008 as compared to cash used of $39.4 million for the 173-day period July 11, 2007 through December 30, 2007 (successor) and $27.8 million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary factors in the increase in investments were the JBS Packerland and Tasman Acquisitions during the fiscal year ended December 28, 2008.

Cash used in investing activities totaled $206.4 million for the fiscal year quarter ended March 29, 2009 as compared to cash used of $15.4 million for the fiscal quarter ended March 30, 2008. The increase in cash used was primarily due to the issuance by us of a $171.3 million note receivable

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to an unconsolidated affiliate. The cash we loaned to the affiliate was used to acquire live cattle to feed in the Five Rivers feedlots and ultimately to be delivered for processing to our Beef segment plants. See “Certain relationships and related party transactions—Arrangements with J&F Oklahoma—Cattle purchase and sale agreement.”

Financing activities.    For the fiscal year ended December 28, 2008, cash provided by financing activities totaled $571.3 million, as compared to cash provided by financing activities of $346.7 million for the 173-day period July 11, 2007 through December 30, 2007 (successor) and $100.5 million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary source of the increase in financing activities was the increase in capital contributions from our parent and intercompany borrowings as compared to the prior year periods.

Cash provided by financing activities totaled $55.7 million for the fiscal quarter ended March 29, 2009, an increase of $22.1 million from the fiscal quarter ended March 30, 2008. The increase resulted primarily from increased borrowings under our senior secured revolving credit facility in the current year while the prior year funding was from investments from JBS S.A., net of payments on outstanding debt.

External sources of liquidity and description of indebtedness

Our primary financing objective is to maintain a balance sheet that provides the flexibility to pursue our business strategy. To finance our working capital needs, we utilize cash flow from operations and borrow from our senior secured revolving credit facility in addition to a combination of equity and long-term debt to finance non-current assets.

Senior secured revolving credit facility

On November 5, 2008, we entered into a senior secured revolving credit facility that allows borrowings up to $400.0 million, and terminates on November 5, 2011. On April 22, 2009, we entered into an amendment to our senior secured revolving facility that allows us to request an increase in the size of the facility to $500.0 million, to the extent we receive additional commitments.

Up to $75.0 million of the revolving credit facility is available for the issuance of letters of credit. Borrowings that are index rate loans will bear interest at a per annum rate equal to the prime rate plus a margin of 2.25% while LIBOR rate loans will bear interest at a per annum rate equal to the applicable LIBOR rate plus a margin of 3.25%. At March 29, 2009, the rates were 5.50% and 3.75%, respectively. Upon approval by the lender, LIBOR rate loans may be taken for one, two-, or three-month terms (or six months at the discretion of the agent under our senior secured revolving credit facility).

Availability.    Availability under our senior secured revolving credit facility is subject to a borrowing base. The borrowing base is based on certain of our domestic wholly owned subsidiaries’ assets as described below, with the exclusion of Five Rivers. The borrowing base consists of percentages of eligible accounts receivable, inventory, and supplies and less certain eligibility and availability reserves. As of March 29, 2009, our borrowing base totaled $303.6 million.

Security and guarantees.    Borrowings made by us and all guarantees of those borrowings are collateralized by a first priority perfected lien and interest in accounts receivable, inventory, and general intangibles related thereto and proceeds of the foregoing.

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Covenants.    Our senior secured revolving credit facility contains customary representations and warranties and a springing financial covenant that requires a minimum fixed charge coverage ratio of not less than 1.15 to 1.00. The fixed charge coverage ratio is defined as the ratio of EBITDA to fixed charges, each as defined in our senior secured revolving credit facility. This ratio is only applicable if borrowing availability falls below the minimum threshold, which is the greater of 20% of the aggregate commitments or $70.0 million. Our senior secured revolving credit facility also contains negative covenants that limit our ability and the ability of our subsidiaries to, among other things:

• make capital expenditures greater than $175.0 million per year;

• incur additional indebtedness;

• create liens on property, revenue, or assets;

• make certain loans or investments;

• sell or dispose of assets;

• pay certain dividends and other restricted payments;

• prepay, cancel or amend certain indebtedness;

• dissolve, consolidate, merge, or acquire the business or assets of other entities;

• enter into joint ventures other than certain permitted joint ventures or create certain other subsidiaries;

• enter into new lines of business;

• enter into certain transactions with affiliates; and

• enter into sale/leaseback transactions.

Events of default.    Our senior secured revolving credit facility also contains customary events of default, including failure to perform or observe terms, covenants or agreements included in our senior secured revolving credit facility, payment of defaults on other indebtedness, defaults on other indebtedness if the effect is to permit acceleration, entry of unsatisfied judgments or orders against a loan party or its subsidiaries, failure of any collateral document to create or maintain a priority lien, and certain events related to bankruptcy and insolvency or ERISA matters. If an event of default occurs the lenders under our senior secured revolving credit facility may, among other things, terminate their commitments, declare all outstanding borrowings to be immediately due and payable together with accrued interest, and fees and exercise remedies under the collateral documents relating to our senior secured revolving credit facility. At March 29, 2009, we were in compliance with all covenants.

11.625% senior unsecured notes due 2014

Our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued 11.625% notes due 2014 in an aggregate principal amount of $700.0 million on April 27, 2009. These notes are guaranteed by JBS S.A., us, JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A., the selling stockholder in this offering and our direct controlling stockholder), and each of our U.S. restricted subsidiaries that guarantee our senior secured revolving facility (subject to certain exceptions). Interest on these notes accrues at a rate of 11.625% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009. The principal amount of these notes is payable in full on May 1, 2014.

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Covenants.    The indenture for the 11.625% senior unsecured notes due 2014, contains customary negative covenants that limit our, JBS USA, LLC’s and restricted subsidiaries’ ability to, among other things:

• incur additional indebtedness subject to complying with certain net debt to EBITDA incurrence ratios;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to our shareholders;

• permit restrictions on dividends and other restricted payments by its restricted subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

Events of default.    The indenture also contains customary events of default, including failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding, may declare such principal and accrued interest on the notes to be immediately due and payable.

Guarantee of 10.50% senior notes due 2016 of JBS S.A.

On August 4, 2006, JBS S.A. issued 10.50% senior notes due 2016, or the 2016 Notes, in an aggregate principal amount of $300.0 million. Interest on the 2016 Notes accrues at a rate of 10.50% per annum and is payable semi-annually in arrears on February 4 and August 4 of each year, beginning on February 4, 2007. The principal amount of the 2016 Notes is payable in full on August 4, 2016.

Guarantees.    The indenture governing the 2016 Notes requires any significant subsidiary (any subsidiary constituting at least 20% of JBS S.A.’s total assets or annual gross revenues, as shown on the latest financial statements of JBS S.A.) to guarantee all of JBS S.A.’s obligations under the 2016 Notes. The 2016 Notes are guaranteed by JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A., the selling stockholder in this offering and our direct controlling stockholder), our company and our subsidiaries, JBS USA Holdings, Inc., JBS USA, LLC and Swift Beef Company. Additional subsidiaries of JBS S.A. (including our subsidiaries) may be required to guarantee the 2016 Notes in the future.

Covenants.    The indentures, for the 10.50% senior notes due 2016 contain customary negative covenants that limit the ability of JBS S.A. and its subsidiaries (including us) to, among other things:

• incur additional indebtedness;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to JBS S.A.’s shareholders;

• permit restrictions on dividends and other restricted payments by its subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

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Events of default.    The indentures also contain customary events of default, including for failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding, may declare such principal and accrued interest on the notes to be immediately due and payable.

Unsecured Australian revolving credit facility

Our Australian subsidiary Swift Australia Pty Limited, entered into an Australian dollar denominated, or A$120 million unsecured revolving credit facility on February 26, 2008 to fund working capital and letter of credit requirements. Under this facility, A$80 million can be borrowed for cash needs, and A$40 million is available to fund letters of credit. Borrowings are made at the cash advance rate (BBSY) plus a margin of 0.975% plus a commitment fee of 0.1%. This credit facility contains certain financial covenants which require JBS Holdco Australia Pty Ltd and its subsidiaries to maintain predetermined ratio levels related to interest coverage, debt coverage, tangible net worth and current assets to current liabilities. As of March 29, 2009, Swift Australia Pty Limited was in compliance with all covenants and had U.S.$34.6 million outstanding. This facility will terminate on October 1, 2009. We intend to seek to refinance this facility. The lenders under this facility may terminate the facility if the ratings of JBS S.A. are downgraded.

Secured Australian credit facility

Our Australian subsidiary Swift Australia (Southern) Pty Limited (formerly known as Tasman Group Services Pty Ltd A.C.N.), entered into an A$80 million secured revolving credit facility on May 2, 2008. Under this facility, up to (1) A$50 million can be borrowed to provide funding relating to the Tasman Acquisition, (2) A$15 million may be used to provide working capital and to fund letters of credit, and (3) A$15 million may be used to finance payroll and general expenses. This credit facility contains covenants that limit the borrowers’ ability to, among other things, repay loans, make redemptions of equity, create liens, raise any financial accommodation from any other party, merge with or acquire another company or entity and dispose of assets. The credit amount is secured by certain registered mortgages and a subordination agreement over intercompany loan providers. As of March 29, 2009, we were in compliance with all covenants and had U.S. $36.8 million outstanding. This facility will terminate on October 1, 2009. We intend to seek to refinance this facility.

Cactus bonds

On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the city of Cactus, Texas. Under this agreement, we committed to purchase up to $26.5 million of bonds from the city of Cactus, which are being issued to fund improvements to the city’s sewer system, which is used by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption payments beginning on June 1, 2011. We have purchased $12.0 million in bonds as of March 31, 2009 and expect to purchase the remaining $14.5 million in 2009.

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Related party debt

As of March 31, 2009, we owed an aggregate of $658.6 million under various intercompany loans from JBS S.A., which were subsequently assigned to JBS HU Liquidity Management LLC (Hungary), a wholly owned, indirect subsidiary of JBS S.A. The proceeds of these intercompany loans were used to fund our operations, the Tasman Acquisition and the JBS Packerland Acquisition. On April 27, 2009, in connection with the issuance of the 11.625% senior unsecured notes due 2014 by our subsidiary JBS USA LLC, these intercompany loan agreements were consolidated into one loan agreement, the maturity dates of the principal of the intercompany loans were extended to April 18, 2019, and the interest rate was changed from approximately 6.5% to 12% per annum. The net proceeds of the offering of the 11.625% senior unsecured notes due 2014 (other than $100.0 million) were used to repay accrued interest and a portion of the principal on these intercompany loans. As of May 31, 2009, we owed an aggregate principal amount of $133.0 million under the consolidated intercompany loan agreement. In addition, we recently entered into an additional intercompany term loan agreement in the aggregate principal amount of $6.0 million on the same terms as the consolidated intercompany loan agreement.

Customer advance payment relating to raw material supply agreement

On October 22, 2008, we received an advance cash payment of $175 million relating to a raw material supply agreement entered into on February 27, 2008 pursuant to which we granted a customer the exclusive right to collect a certain beef fabrication by-product from all of our U.S. beef plants for the term of the agreement. This customer advance payment is recorded as deferred revenue in our audited financial statements and is amortized as sales revenue as the agreed upon by-product is delivered to the customer over the term of the agreement. The customer advance payment is secured by a note agreement, which bears interest at two-month LIBOR plus 200 basis points and provides the lender with an option to convert the outstanding amount of the loan under the note agreement into our common stock upon the occurrence and continuance of any event of default under the note agreement.

Dividend restrictions

Certain covenants of our debt agreements include restrictions on our ability to pay dividends. As of December 28, 2008 and March 29, 2009, we had $22.7 million and $17.7 million, respectively, of retained earnings available to pay dividends.

Covenant compliance

JBS S.A. pro forma net debt to EBITDA ratio

The terms and conditions of (1) our 11.625% senior unsecured notes due 2014 and (2) JBS S.A.’s 10.50% senior notes due 2016 both include a covenant prohibiting JBS S.A. and its subsidiaries, including us, from incurring any debt (subject to certain exceptions) unless JBS S.A.’s pro forma net debt to EBITDA ratio at the date of such incurrence is less than 4.5 to 1.0.

The terms and conditions of both of these notes define:

• the Net Debt to EBITDA ratio as the ratio of JBS S.A.’s Net Debt to JBS S.A.’s EBITDA for the then most recently concluded period of four consecutive fiscal quarters, subject to adjustments for asset dispositions and investments made during the period;

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• Net Debt at any time as the aggregate amount of debt of JBS S.A. and its subsidiaries (including us) less the sum of cash, cash equivalents and marketable securities recorded as current assets (except for any capital stock in any person); and

• EBITDA for any period as to JBS S.A. and its subsidiaries (on a consolidated basis) as

• aggregate net income (or loss) plus

• current and deferred income tax and social contribution; minus

• non-operating income (expense), net; plus

• equity in the earnings (loss) of subsidiary companies; plus

• financial income (expenses), net; plus

• any depreciation or amortization;

as each such item is reported on the most recent financial statements or financial information prepared in accordance with generally accepted accounting principles in Brazil.

JBS S.A. has informed us that it believes it will be able to comply with this financial ratio for the foreseeable future to the extent that it or any of its subsidiaries decides to incur debt.

JBS USA, LLC pro forma net debt to EBITDA ratio

In addition, our 11.625% senior unsecured notes due 2014 include a covenant prohibiting our subsidiary, JBS USA, LLC and its subsidiaries that are guaranteeing the 11.625% senior unsecured notes due 2014 from incurring any debt or issuing any disqualified capital stock (subject to certain exceptions) unless JBS USA, LLC’s pro forma net debt to EBITDA ratio at the date of such incurrence and the application of the proceeds therefrom, would be less than 3.0 to 1.0. The co-issuers of our 11.625% senior unsecured notes due 2014 were our wholly-owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc.

The calculation of the net debt to EBITDA ratio thereunder is calculated based on the net debt and EBITDA of JBS USA, LLC and its restricted subsidiaries, and not our company.

The terms and conditions of these notes define:

• the Net Debt to EBITDA ratio as of any date of determination (the “Calculation Date”) the ratio of JBS USA, LLC’s Net Debt as of the Calculation Date to consolidated EBITDA for JBS USA, LLC and its restricted subsidiaries for the period of the then most recently concluded period of four consecutive fiscal quarters, subject to adjustments for asset dispositions and investments made during the period;

• Net Debt at any time as the aggregate amount of debt of JBS USA, LLC and its restricted subsidiaries less the sum of cash, cash equivalents and marketable securities recorded as current assets (except for any capital stock in any person); provided that Net Debt shall include the aggregate principal amount of JBS S.A.’s 10.50% senior notes due 2016 and any other debt of JBS S.A. that may be guaranteed by JBS USA, LLC or its restricted subsidiaries; and

• consolidated EBITDA of JBS USA, LLC and its restricted subsidiaries for any period as

(1) consolidated net income for such period, subject to certain adjustments, minus

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(2) the sum of:

(a) income tax credits;

(b) interest income;

(c) gain from extraordinary items;

(d) any aggregate net gain (but not any aggregate net loss) arising from the sale, exchange or other disposition of capital assets by JBS USA, LLC and its restricted subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); and

(e) any other non-cash gains that have been added in determining consolidated net income,

in each case to the extent included in the calculation of consolidated net income of JBS USA, LLC in accordance with GAAP, but without duplication, plus

(3) the sum of:

(a) any provision for income taxes;

(b) consolidated interest expense;

(c) loss from extraordinary items;

(d) depreciation and amortization;

(e) any aggregate net loss (but not any aggregate net gain) arising from the sale, exchange or other disposition of capital assets by JBS USA, LLC (including any fixed assets, whether tangible or intangible);

(f) amortized debt discount;

(g) the amount of any deduction to consolidated net income as the result of any grant to any members of the management of JBS USA, LLC or its restricted subsidiaries of any equity interests; and

(h) any other non-cash losses that have been deducted in determining consolidated net income (other than non-cash losses related to write-downs or write-offs of accounts receivable or inventory);

in each case to the extent included in the calculation of consolidated net income of JBS USA, LLC in accordance with GAAP, but without duplication, and as further adjusted to exclude certain non-cash items and non-recurring items.

For purposes of this covenant, consolidated net income is adjusted to exclude, among other things, (1) income from restricted subsidiaries to the extent that the payment of dividends or similar distributions by the restricted subsidiaries is not permitted by law or any agreement to which the restricted subsidiaries are parties, (2) income of any entity in which JBS USA, LLC has a joint interest, except to the extent of the dividends or other distributions actually paid to JBS USA, LLC or one of its wholly owned restricted subsidiaries and (3) certain non-cash items and non-recurring items.

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As mentioned above, the calculation of our net debt to EBITDA ratio is calculated based on the net debt and EBITDA of JBS USA, LLC and its restricted subsidiaries, and not our net debt and EBITDA. We had Adjusted EBITDA of $537.7 million on a pro forma basis in the fiscal year ended December 28, 2008 and $66.1 million in the fiscal quarter ended March 29, 2009. For these same periods, JBS USA, LLC and its restricted subsidiaries had Adjusted EBITDA of $398.2 million and $67.1 million, respectively. The main differences between our Adjusted EBITDA and JBS USA, LLC and its restricted subsidiaries’ Adjusted EBITDA are that JBS USA, LLC’s Adjusted EBITDA excludes (1) Five Rivers’ consolidated net income because Five Rivers is currently an unrestricted subsidiary under the 11.625% senior unsecured notes due 2014 and (2) the payment by us (and not JBS USA, LLC) of a one-time breakage fee to the shareholders of National Beef totaling $19.9 million as full and final settlement of any and all liabilities relating to the potential acquisition of National Beef in the first quarter ended March 29, 2009 that we (and not JBS USA, LLC) recorded as a non-recurring expense. For the Five Rivers’ assets that we acquired, Five Rivers had consolidated pro forma net income of $9.6 million for the period from January 1, 2008 through October 22, 2008 and $2.9 million for the period from October 23, 2008 through December 28, 2008.

We had net debt of $657.6 million on a pro forma basis as of December 28, 2008 and $854.5 million on a pro forma basis as of March 29, 2009. We calculated pro forma net debt as of December 28, 2008 as pro forma total debt of $910.0 minus pro forma cash and cash equivalents of $252.4 million and pro forma net debt as of March 29, 2009 as total debt of $1,008.8 million minus cash and cash equivalents of $154.3 million. For these same periods, JBS USA, LLC and its restricted subsidiaries had net debt of $(35.1) million and $161.8 million, respectively. JBS USA, LLC calculated net debt as of December 28, 2008 as total debt of $219.7 million minus cash and cash equivalents of $254.8 million and net debt as of March 29, 2009 as total debt of $318.5 million minus cash and cash equivalents of $156.7 million. The main differences between our net debt and the net debt of JBS USA, LLC and its restricted subsidiaries are that (1) JBS USA, LLC’s net debt excludes Five Rivers’ debt and cash because Five Rivers is an unrestricted subsidiary and (2) JBS USA, LLC’s guarantee of JBS S.A.’s 10.50% senior notes due 2016 would also be included in JBS USA, LLC’s net debt (and not in ours) for purposes of calculating its net debt to EBITDA ratio.

For the four fiscal quarters ended June 30, 2009, JBS USA, LLC had a net debt to EBITDA ratio of          to 1.00. We cannot assure you that JBS USA, LLC will not need to incur additional indebtedness at a time when its net debt to EBITDA ratio is equal to or greater than 3.0 to 1.0. JBS USA, LLC’s compliance with this covenant could limit its flexibility in planning for, or reacting to changes in, our business by limiting the funds that we can seek to borrow or raise in the capital markets to pursue capital expenditures, acquisitions, our distribution strategy or other plans.

We have included this calculation of JBS USA, LLC’s net debt, EBITDA and net debt to EBITDA ratio, as we believe that this ratio is important to investors, and the indenture governing our 11.625% senior unsecured notes due 2014 is a material debt agreement for us.

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Contractual obligations

The following table summarizes our contractual obligations as of December 28, 2008:

in millions	2009		2010		2011		2012		2013		After year 5		Total
Contractual obligations:
Revolving credit facilities	$	67.0	$	—	$	114.7	$	—	$	—	$	—	$	181.7
Related party debt		—		658.6		—		—		—		—		658.6
Deferred revenue		18.0		18.0		18.0		18.0		18.0		83.2		173.2
Interest(1)		59.8		54.2		12.1		6.3		6.0		15.8		154.2
Capital lease obligations		3.2		3.0		2.6		2.3		2.4		13.2		26.7
Operating leases(2)		17.4		13.4		11.0		4.9		4.1		5.1		55.9
Installment note payable		1.3		1.3		0.9		0.9		6.9		—		11.3
Purchase obligations:
Livestock procurement(3)		3,395.2		1,035.1		862.4		710.2		483.7		99.1		6,585.7
Cactus bonds(4)		14.5		—		—		—		—		—		14.5
Other(5)		—		—		—		—		—		16.2		16.2
Total contractual obligations	$	3,576.4	$	1,783.6	$	1,021.7	$	742.6	$	521.1	$	232.6	$	7,878.0

(1) Interest expense assumes the continuation of interest rates and outstanding borrowings under our credit facilities as of December 28, 2008.

(2) Excludes amounts associated with operating leases having remaining non-cancelable lease terms of one year or less.

(3) Represents hog and cattle purchase agreements with certain hog and cattle producers. The number of animals that we will be obligated to purchase is based on minimum quantity commitments to the extent the agreements contain those commitments, or management estimates based on past history for such hog and cattle purchases. The contracts are subject to market pricing at delivery. Due to the uncertainty of market prices at the time of future delivery we have estimated market prices based on futures contracts and applied those prices to all years. Cattle purchase agreements are short-term contracts with renewal options. Therefore, cattle purchase commitments have only been estimated through year one. See Note 13, “Commitments and contingencies” to our audited consolidated financial statements included in this prospectus.

(4) On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the City of Cactus, Texas, or the City. Under this agreement, we committed to purchase up to $26.5 million of bonds from the City, which are being issued to fund improvements to its sewer system, which is used by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption payments beginning on June 1, 2011. We have purchased $12.0 million in bonds as of December 28, 2008 and expect to purchase the remaining $14.5 million in 2009.

(5) Includes certain obligations for capital expenditures and other insignificant purchase obligations.

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The following table summarizes our contractual obligations, on a pro forma basis as of March 29, 2009, giving effect to the offering and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom as if they had occurred on March 29, 2009 (including the use of a portion of the proceeds of our 11.625% senior unsecured notes due 2014 to repay $100.0 million of borrowings under our secured revolving credit facility):

in millions	2009		2010		2011		2012		2013		After year 5		Total
Contractual obligations:
Revolving credit facilities	$	71.4	$	—	$	110.2	$	—	$	—	$	—	$	181.6
11.625% senior unsecured notes due 2014		—		—		—		—		—		700.0		700.0
Related party debt		—		—		—		—		—		139.0		139.0
Deferred revenue		13.6		18.0		18.0		18.0		18.0		83.2		168.8
Interest(1)		113.1		111.0		110.7		104.4		104.0		99.2		642.4
Capital lease obligations		2.3		3.0		2.7		2.2		2.4		13.4		26.0
Operating leases(2)		13.1		13.8		11.4		5.1		4.4		5.4		53.2
Installment note payable		1.1		1.3		0.9		0.9		6.6		—		10.8
Purchase obligations:
Livestock procurement(3)		3,178.8		1,088.1		808.8		722.2		489.3		98.2		6,385.4
Cactus bonds(4)		14.5		—		—		—		—		—		14.5
Other(5)		—		—		—		—		—		16.2		16.2
Total contractual obligations	$	3,407.9	$	1,235.2	$	1,062.7	$	852.8	$	624.7	$	1,154.6	$	8,337.9

(1) Interest expense assumes the continuation of interest rates and outstanding borrowings under our credit facilities as of March 29, 2009.

(2) Excludes amounts associated with operating leases having remaining non-cancelable lease terms of one year or less.

(3) Represents hog and cattle purchase agreements with certain hog and cattle producers. The number of animals that we will be obligated to purchase is based on minimum quantity commitments to the extent the agreements contain those commitments, or management estimates based on past history for such hog and cattle purchases. The contracts are subject to market pricing at delivery. Due to the uncertainty of market prices at the time of future delivery we have estimated market prices based on futures contracts and applied those prices to all years. Cattle purchase agreements are short-term contracts with renewal options. Therefore, cattle purchase commitments have only been estimated through year one. See Note 12, “Commitments and contingencies” to our unaudited consolidated financial statements included in this prospectus.

(4) On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the City of Cactus, Texas, or the City. Under this agreement, we committed to purchase up to $26.5 million of bonds from the City, which are being issued to fund improvements to its sewer system which is utilized by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption beginning on June 1, 2011. We have purchased $12.0 million in bonds as of December 28, 2008 and expect to purchase the remaining $14.5 million in 2009.

(5) Includes certain obligations for capital expenditures and other insignificant purchase obligations.

Off-balance sheet arrangements

As of March 29, 2009, we did not have any significant off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

However, as of March 29, 2009, we did have the following guarantees and keepwell obligations that are not recorded on our balance sheet: (1) our guarantee of JBS S.A.’s 10.5% senior notes due 2016 described under “—Liquidity and capital resources—External sources of liquidity and description of indebtedness—Guarantee of 10.5% senior notes due 2016 of JBS S.A.” and (2) Five Rivers’ obligation under a keepwell agreement to pay up to $250.0 million of the obligations of J&F Oklahoma under J&F Oklahoma’s credit facility described in “Certain relationships and related party transactions—Arrangements with J&F Oklahoma—Guarantee of J&F Oklahoma revolving credit facility.”

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Quantitative and qualitative disclosures about market risk

Market risk relating to our operations results primarily from changes in commodity prices, interest rates and foreign exchange rates, as well as credit risk concentrations. To address certain of these risks, we enter into various derivative transactions as described below. If a derivative instrument is accounted for as a hedge, as defined by Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended (SFAS No. 133(R)), depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change in fair value, as defined by SFAS No. 133(R), is recognized immediately. Additionally, we hold certain positions, primarily in grain and livestock futures, that either do not meet the criteria for hedge accounting or are not designated as hedges. These positions are marked to market, and the unrealized gains and losses are reported in earnings at each reporting date. Changes in market value of derivatives used in our risk management activities relating to forward sales contracts are recorded in net sales. Changes in market value of derivatives used in our risk management activities surrounding inventories on hand or anticipated purchases of inventories are recorded in cost of sales.

The sensitivity analyses presented below are the measures of potential losses of fair value resulting from hypothetical changes in market prices related to commodities. Sensitivity analyses do not consider the actions we may take to mitigate our exposure to changes, nor do they consider the effects such hypothetical adverse changes may have on overall economic activity. Actual changes in market prices may differ from hypothetical changes.

Commodity risk

We utilize various raw materials in our operations, including cattle, hogs, and energy, such as natural gas, electricity and diesel fuel, which are all considered commodities. We consider these raw materials generally available from a number of different sources and believe we can obtain them to meet our requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond our control, such as economic and political conditions, supply and demand, weather, governmental regulation and other circumstances. Generally, we purchase derivatives in an attempt to mitigate price risk related to our anticipated consumption of commodity inputs for periods of up to 12 months. We may enter into longer-term derivatives on particular commodities if deemed appropriate. As of December 28, 2008 and March 29, 2009, we had derivative positions in place covering less than 1% and 2.5% of anticipated cattle needs and 11% and 14%, respectively, of anticipated hog needs, in each case through December 2009.

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We use derivatives for the purpose of mitigating exposure to market risk, such as changes in commodity prices and foreign currency exchange rates. We use exchange-traded futures and options to hedge livestock commodities. The fair value of derivative assets is recognized within other current assets, while the fair value of derivative liabilities is recognized within accrued liabilities. The fair value of derivatives at December 28, 2008 and March 29, 2009 are as follows:

in thousands	As of December 28, 2008	As of March 29, 2009
Assets:
Commodity derivatives	$42,087	$23,582
Foreign currency rate derivatives	12,002	14,463
Total fair value, assets	$54,089	$38,045
Liabilities:
Commodity derivatives	$16,392	$7,056
Foreign currency rate derivatives	592	5,246
Total fair value, liabilities	$16,984	$12,302
Net commodity derivatives	$25,695	$16,526
Net foreign currency rate derivatives	11,410	9,217
Total net fair value	$37,105	$25,743

As of December 28, 2008 and March 29, 2009, the net deferred amount of derivative losses recognized in accumulated other comprehensive income was $0.3 million and $90,000, net of tax. We anticipate these amounts will be transferred out of accumulated other comprehensive income and recognized within earnings over the next 12 months.

Interest rate risk

As of December 28, 2008 and March 29, 2009, we had fixed-rate debt of $19.0 million and $17.8 million, respectively, with a weighted average interest rate of 8.4% for each period. We have exposure to changes in interest rates on this fixed-rate debt. Market risk for fixed-rate debt is estimated as the potential increase in fair value resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately $0.4 million at March 29, 2009 and $0.4 million at December 28, 2008. The fair values of our debt were estimated based on quoted market prices and/or published market interest rates.

As of December 28, 2008 and March 29, 2009, we had variable rate debt of $859.3 million and $959.2 million, respectively, with a weighted average interest rate of 6.2% and 5.8%, respectively. A hypothetical 10% increase in interest rates effective at March 29, 2009, and December 28, 2008, would have increased interest expense by approximately $5.6 million for the fiscal quarter ended March 29, 2009 and $5.3 million for the fiscal year ended December 28, 2008.

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Foreign currency risk

We have foreign exchange gain/loss exposure from fluctuations in foreign currency exchange rates primarily as a result of a U.S. dollar-denominated intercompany note between two of our subsidiaries located in Australia. The primary currency exchange rate to which we have exposure is the U.S. dollar to Australian dollar exchange rate due to: (1) our significant investment in our Australian subsidiaries and (2) sales denominated in currencies other than U.S. dollars. While we use foreign currency forward contracts to mitigate price risk on committed future deliveries, we have elected not to use foreign currency forward contracts to mitigate the risk related to our investment in Australia, primarily since the effect of these fluctuations is non-cash in nature and the purchase of forward contracts would have a cash cost. In addition, the definition of EBITDA used by our lending institutions eliminates foreign currency gains and losses prior to calculating covenant compliance. In the future we may elect to enter into forward contracts to mitigate this foreign currency risk.

Sensitivity analysis

The following sensitivity analysis table estimates our exposure to changes in the fair value of commodity price derivatives and foreign currency exchange rate derivatives at December 28, 2008 and March 29, 2009. The sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the fair value of applicable commodity prices and foreign exchange currency rates and excludes the underlying items that are being hedged, such as future sales commitments or future livestock commitments.

in thousands	As of December 28, 2008	As of March 29, 2009
Fair value:
Commodity derivatives	$25,695	$16,526
Foreign currency rate derivatives	11,410	9,217
Total	$37,105	$25,743
Estimated fair value volatility (-10%):
Commodity derivatives	$17,680	$11,607
Foreign currency rate derivatives	25,391	18,865
Total	$43,071	$30,472

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Business

Overview

We are a global leader in beef and pork processing with approximately $15.4 billion in net sales for the fiscal year ended December 28, 2008 on a pro forma basis. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. As a standalone company, we would be the largest beef processor in the world. We also own and operate the largest feedlot business in the United States. We process, prepare, package and deliver fresh, processed and value-added beef and pork products for sale to customers in over 60 countries on six continents. Our operations consist of supplying fresh meat products, processed meat products and value-added meat products. Fresh meat products include refrigerated beef and pork processed to standard industry specifications and sold primarily in boxed form. Our processed meat offerings, which include beef and pork products, are cut, ground and packaged in a customized manner for specific orders. Additionally, we process lamb and mutton products. Our value-added products include moisture-enhanced, seasoned, marinated and consumer-ready products. We also provide services to our customers designed to help them develop more comprehensive and profitable sales programs. Our customers are in the food service, international, further processor and retail distribution channels. We also produce and sell by-products that are derived from our meat processing operations, such as hides and variety meats, to customers in the clothing, pet food and automotive industries, among others.

Prior to 2002, our predecessor was owned and operated by a multinational food company and not operated as a raw material supplier for the processed portions of its business. From 2002 to 2007, we were owned by a private equity company that pursued a strategy of restricting our capital expenditures and maximizing dividends, including reducing the operations at our Greeley, Colorado plant to a single shift and selling five feedlot facilities, two cow slaughter facilities, and an Australian beef patty making and distribution facility.

We are a wholly owned indirect subsidiary of JBS S.A., the world’s largest beef producer, which has a daily slaughtering capacity of 73,940 head of cattle. In the fiscal quarter ended March 29, 2009, we represented approximately 78% of JBS S.A.’s gross revenues. Over the past few years, JBS S.A. has acquired several U.S. and Australian beef and pork processing companies and slaughterhouses, which now comprise JBS USA Holdings, Inc. and its subsidiaries:

• on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

• on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

• on October 23, 2008, we acquired Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland), which included the 100% acquisition of Five Rivers. We refer to this transaction as the JBS Packerland Acquisition.

In the United States, we conduct our operations through eight beef processing facilities, three pork processing facilities, one lamb processing facility, one case-ready beef and pork facility, one hide tannery, seven leased regional distribution centers, two grease-producing facilities, and 11 feedlots operated by Five Rivers, which supply approximately 30% of our fed cattle needs. In Australia, we operate ten beef and small animals processing facilities, including the largest and

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what we believe is the most technologically advanced facility in the country, and five feedlots which supply approximately 18% of our fed cattle needs. Our small animals processing facilities in Australia process hogs, lamb and sheep, or smalls. Our Australian facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the capacity to process approximately 28,600 cattle, 48,500 hogs and 4,500 lambs daily in the United States and 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations.

Our business operations are organized into two segments:

• our Beef segment, through which we conduct our domestic beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition, and our international beef, lamb and sheep processing businesses that we acquired in the Tasman Acquisition; and

• our Pork segment, through which we conduct our domestic pork and lamb processing business.

We had consolidated net sales of $15.4 billion on a pro forma basis in the fiscal year ended December 28, 2008, and we had consolidated net sales of $3.2 billion in the fiscal quarter ended March 29, 2009. In the same periods, we had gross profit of $608.0 million on a pro forma basis and $73.0 million, respectively, and Adjusted EBITDA of $531.8 million on a pro forma basis and $66.1 million, respectively. Our net income for the fiscal year ended December 28, 2008 was $192.1 million on a pro forma basis and $2.3 million for the fiscal quarter ended March 29, 2009. Our Beef and Pork segments represented 84% and 16%, respectively, of our net sales on a pro forma basis during the fiscal year ended December 28, 2008, and 84% and 16%, respectively, of our net sales during the fiscal quarter ended March 29, 2009.

Industry overview

Beef

United States

Beef products are second to chicken as the largest source of meat protein in the United States. The United States has the largest grain-fed cattle industry in the world and is the world’s largest producer of beef, which is primarily high-quality grain-fed beef for domestic and export use. The domestic beef industry is characterized by daily price changes based on seasonal consumption patterns and overall supply and demand for beef and other proteins in the United States and abroad. Cattle prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

Beef processors include vertically integrated companies, who own and raise cattle on feed for use in their processing facilities, and pure processors, who do not own cattle on feed. Vertically integrated beef processors can be subjected to significant working capital demands, since cattle typically feed in the yards for 90-180 days without any revenue generation until processed. Additionally, as cattle on feed consume feed with a replacement price that is subject to market changes, vertically integrated beef processors have direct financial exposure to the volatility in corn and other feedstock prices. Pure U.S. beef processors generally purchase cattle in the spot market or pursuant to market-priced supply arrangements from feedlot operators, process the cattle in their own facilities and sell the beef at spot prices. Cattle are usually purchased at market prices and held for less than a day before processing, thus such processors are not exposed to changing market prices over as great a time span as vertically integrated beef processors. Pure beef

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processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency rather than by fluctuations in prices of cattle and beef.

During the past few decades, consumer demand for beef products in the United States has been in line with population growth, which is the primary driver of aggregate demand. Export demand has fluctuated widely due to the closing of certain international markets following the discovery of isolated cases of BSE (also commonly referred to as mad cow disease), in 2003 and 2004, and the sporadic re-opening of such markets. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth. As consumers’ economic circumstances improve, they increasingly shift their diets to protein. Industry-wide export sales have been ramping up from 2004 through mid-2009, trending toward pre-2003 levels.

Between 2006 and January 2008, our largest U.S. beef competitor eliminated two million head per year of slaughter capacity in four plants. This represented a reduction of nearly 7% of total U.S. industry-wide capacity and has helped improve the supply/demand balance of beef in the U.S. and export markets.

Australia

Australia has traditionally been a supplier of grass-fed beef. Grass is a much cheaper feed source than grain. With the vast amount of land in Australia available for cattle raising and feeding, grass is the predominant feeding method. Australia also has a grain-fed beef cattle sector which primarily supplies processed cattle for export to Japan and South Korea and to the domestic market. Grain-fed cattle accounted for 27% of the adult cattle slaughter in 2008, representing 34% of total beef production in Australia. The majority of cattle slaughtered in Australia are range or grass-fed and not finished in the feedlots. Australia has been one of the leading beef export countries for more than a decade. We believe that approximately 75% of exports have historically been sold to the United States, Japan and South Korea, but Australian beef has been increasingly exported to Russia, Taiwan, Mexico, Chile and the United Arab Emirates, among other countries. Although Australian meat packers, including our Australian operations, benefited from the closure of many markets to North American beef as a result of BSE detections in North American cattle, Australian exports have remained strong following the reopening of international markets to North American beef.

Global exports

We sell our products in over 60 countries on six continents, and exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. The international beef market is divided into two blocks based on factors that include common sanitary criteria, such as restrictions on imports of fresh beef from countries that permit foot-and-mouth disease, or FMD, vaccination programs or beef treated with growth hormones.

The United States has been an FMD-free country since the eradication of the disease, and it does not implement vaccination programs. However, the United States treats most of their cattle with growth hormones, and, accordingly, the European Union and several other countries have banned imports of beef treated with growth hormones from the United States.

In contrast, Brazil and Argentina have prohibited the use of growth hormones on their cattle. JBS S.A. is a large exporter of beef to the European Union.

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We believe that our U.S. export operations of fresh beef today do not directly compete with our parent company’s Brazilian and Argentine export operations of fresh beef in our main export destinations. Consequently, we do not have formal arrangements with JBS S.A. to coordinate our exports in our export markets. However, to the extent that sanitary restrictions change in the future, we could become direct competitors of our parent company in certain export markets.

We do compete with JBS S.A. to a limited degree, however, for example, to the extent that our Australian operations export to the European Union, the Middle East and Southeast Asia, which are also export markets for JBS S.A. We do not believe our Australian business’ competition with JBS S.A. in these markets has a material adverse effect on our current business.

Pork

Pork products are the most widely consumed meat in the world. Pork is the third largest source of meat protein in the United States, behind chicken and beef. The United States, which is widely regarded as a world leader in food safety standards, is the third largest producer worldwide, behind China and the European Union, and one of the largest exporters of pork products.

The domestic pork industry is characterized by daily price changes based on seasonal consumption patterns and overall supply/demand for pork and other meats in the United States and abroad. Generally, domestic and worldwide consumer demand for pork products drive pork processors’ long-term demand for hogs. To operate profitably, hog processors seek to acquire or raise hogs at the lowest possible costs and minimize processing costs by maximizing plant operating rates. Hog prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

Pork processors include vertically integrated companies, which own and raise hogs on feed for use in their processing facilities, and pure processors, who do not own hogs on feed. Vertically integrated pork processors can be subjected to significant financial impact from working capital demands, since hogs feed in the yards for approximately 180 days without revenue generation until processed. Additionally, since hogs on feed consume feed with a replacement price that is subject to market changes, vertically integrated pork processors have direct financial exposure to the volatility in corn and other feedstock prices. Pure processors generally purchase finished hogs under long-term supply contracts at prevailing market prices, process the hogs in their own facilities and sell the finished products at spot prices. Finished hogs are typically purchased at market prices and held for less than one day before processing, thus pure processors are not exposed to changing market prices over as great a time span as vertically integrated processors. Pure pork processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of hogs and pork.

While affected by seasonal consumption patterns, demand for pork has remained consistently strong. During the past few decades, population growth has been the primary driver of increased aggregate pork product demand in the United States. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth: as consumers’ economic circumstances improve, they increasingly shift their diets to protein. To satisfy the growing global demand, U.S. pork exports have more than tripled in the past decade. The top three leading export markets for U.S. pork and pork variety meats are Japan, Mexico and Canada.

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Competitive strengths

We are well positioned as a leading meat processor in the U.S. and Australia. We have implemented significant operational improvements over the last several years, resulting in increases in throughput, additional value-added products, improved food safety and industry-leading worker safety. Our competitive strengths include:

Scale and leading market positions in beef and pork industries

As a standalone company we would be the largest beef processor in the world. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. With a slaughtering capacity of 37,290 heads per day in beef, 48,500 heads per day in hogs and over 19,500 heads per day in smalls, our scale provides us with operational flexibility to:

• source our products based on the most favorable conditions of input costs,

• diversify our operations to minimize sanitary risk, and

• attain proximity to our raw materials and end customers given our geographical reach, saving freight and storage costs.

During the past few decades, consumer demand for beef and pork products in the United States has been increasing primarily as a result of population growth. Global protein demand has remained strong due to continued population growth and economic growth in developing countries. Despite the current economic recession, we believe protein demand will continue to increase in the long-term in conjunction with rising living standards and a growing middle class in developing countries. As part of JBS S.A., the world’s leading beef producer, and given the industry’s significant barriers to entry, we believe we are well-positioned to serve this growing global demand.

Diversified business model with international reach

Our business is well diversified across proteins and all major distribution channels, as well as geographically with respect to production and distribution.

• Diversified protein offerings:    We sell beef, pork and lamb products. Selling multiple proteins offers us the opportunity to cross-sell to our customers and to diversify typical industry risks such as industry cycles, the impact of species-based diseases and changes in consumer protein preferences. As a result of our multiple proteins, our businesses, when taken as a whole, are less likely to be severely impacted by issues affecting any one protein. Additionally, our JBS Packerland beef processing facilities are engineered to provide us with the flexibility to process a variety of cattle, which allows further diversification of our beef product offerings. For example, our JBS Packerland facilities are engineered to process both cattle raised for beef production and cattle bred for dairy production. This flexibility enables us to shift our operations on a daily basis between beef and dairy cattle depending on market availability, seasonal demand and relative margin attractiveness, setting us apart from many beef processing facilities in the United States.

• Sales and distribution channel diversification:    We benefit from our diversified sales and distribution channels, which include national and regional retailers (including supermarket

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chains, independent grocers, club stores and wholesale distributors), further processors (including those that make bacon, sausage and deli and luncheon meats), international markets and the food service industry (including food service distributors, which service restaurant and hotel chains and other institutional customers). We sell our products to over 6,000 customers worldwide with no customer accounting for more than 4.5% of our net sales. This reduces our dependence on any market or customer and provides multiple channels for potential growth. In the retail segment, we further benefit from a variety of widely recognized brands, including Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 among others. We also manufacture products for some of our main customers’ private label brands.

• Geographic diversification:    We sell our products in over 60 countries on six continents. During fiscal 2008, on a pro forma basis, and the fiscal quarter ended March 29, 2009, we had international sales of $3.8 billion and $0.7 billion, respectively. Overall, exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. Exports are an important part of our strategy and a competitive advantage. In fiscal 2008, we supplied Japan and South Korea with 36% and 47% of their total beef imports, respectively, according to Meat & Livestock Australia Limited. We believe we were the largest supplier of beef imported into Japan and South Korea in 2008. Our imports of beef to the United States from Australia totaled 32% of total Australian beef imports to the United States during fiscal 2008. Our geographic diversification enables us to reduce exposure to any one market and concurrently have access to all export markets. Additionally, having access to international markets allows us to potentially generate higher returns as many of our export products, such as tongue, heart, kidney and other variety meats, garner higher demand and pricing in foreign markets, particularly in Asia.

Our processing platforms in the United States and Australia, which are two major beef producing countries, provide us with enough geographic diversification and operating flexibility to satisfy demand depending on market conditions and sanitary restrictions. For example, our facilities in Dinmore, Beef City, Brooklyn and Longford, Australia accommodate non-hormone-treated fed cattle allowing us to market our products to the European Union (which prohibits imports of hormone-treated products). Accordingly, each of these facilities is eligible to ship to the European Union. We also benefit from greater international market access through our Worthington pork plant, which is one of only three facilities in the United States certified for export to the European Union. Additionally, our JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs relative to cattle processing facilities in more rural locations.

While the closure of foreign markets to U.S. beef in 2003 negatively impacted the U.S. beef industry, our Australian beef operation retained access to those markets and benefited from reduced competition. Furthermore, we have a U.S. sales office which annually sources over $160 million of meat products from our Australian facilities into the U.S. market—products that provide U.S. customers, particularly in the food service and further processing channels, with a source of lean protein.

World class operations

We believe our operations are among the most efficient in the industry. We operate three of the six highest-throughput beef facilities in the United States. Furthermore, we continuously focus on improving our operating efficiencies. We have developed a program to improve the coordination

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of our planning, forecasting, scheduling, procurement and manufacturing functions to drive performance in the supply chain. Our efforts in 2008 were focused on increasing beef yields, reducing operational costs and lowering overhead. One of the key initiatives in delivering on this strategy was returning our Greeley, Colorado processing facility to its originally designed capacity as a two-shift operation. Producing more volume in the same length of time reduces our cost per pound. As a measure of our progress, excluding the JBS Packerland Acquisition and the Tasman Acquisition, during the fiscal year ended December 28, 2008, our Beef and Pork segments demonstrated an 8.5% and 3.8% increase in throughput, respectively, compared to the combined fiscal year ended December 30, 2007. As a result, we remain focused on leveraging our fixed cost base to improve our operating margins.

Strong balance sheet and limited derivative exposure relative to our peers

We have lower leverage than certain of our competitors. Moreover, since we are not vertically integrated in our U.S. operations, we are not significantly exposed to commodity hedging losses. We believe that our business and capital structure provides us with flexibility to respond to market conditions and to capitalize on business opportunities, particularly in the current credit-constrained environment.

Established customer relationships

We have developed long-standing relationships with numerous well-established, global customers, many of whom have been doing business with us for more than 20 years. We serve many of the largest food service distributors, quick-service restaurants and retail chains in the United States. Additionally, we are focused on developing close, mutually beneficial relationships with our customers, who we believe view us as a long-term strategic partner and consider us an extended part of their operations. We believe that the high-quality long-standing relationships we have developed provide us with revenue stability and forecasting transparency.

Proven management team and high performance work force

We have a proven senior management team whose experience in the protein industry has spanned numerous market cycles. Since the Swift Acquisition, we have simplified our management structure through headcount reduction and streamlined decision-making processes, effectively empowering our employees. We also benefit from management ideas, best practices, and talent shared with the seasoned management team at our parent company, who has over 50 years of experience operating beef processing facilities in Brazil. Members of JBS S.A.’s South American management team have been appointed to management positions in our United States and Australian operations. In addition, members of our Australian management team have been appointed to management positions in the United States, and vice-versa. Moreover, our management and that of our parent company have significant experience in acquiring and successfully integrating operations as evidenced by the more than 30 acquisitions made by JBS S.A. in the last 15 years, and more recently the integration of the JBS Packerland Acquisition and the Tasman Acquisition by us.

Our strategy

Prior to 2002, our predecessor was owned and operated by a multinational food company. From 2002 to 2007, our predecessor was owned by a private equity company. Since the Swift

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Acquisition in July 2007, we have significantly changed our business strategy. Our current strategy is to continue to grow our business’ revenues and profitability through the following strategic initiatives:

Continuously improve profitability through process optimization

We continue to focus on enhancing our production yields and operational abilities and improving our information technology systems, with a view toward reducing our operating costs and improving throughput yields. Our initiatives in 2008 geared towards cost reductions led to approximately $90 million in cost savings as compared to the fiscal year ended December 30, 2007. These cost reductions included renegotiating vendor contracts, insourcing of contract services previously outsourced and plant cost initiatives. We expect to further improve our operating performance by adopting best practices and leveraging additional operating expertise that we have access to as a member of the JBS S.A. group. Separately, we have been able to reduce operating costs by, among other measures, eliminating our reliance on third-party consultants and performing certain services in-house that were formerly outsourced at a premium. We have decreased our selling, general and administrative expenses by eliminating multiple layers of management positions and by requiring our service providers to participate in competitive bidding processes. As a measure of this progress, we have reduced annual selling, general and administrative expenses by over $24.5 million, or 20.7%, for the fiscal year ended December 28, 2008, and in 2008 ranked as having the lowest ratio of selling, general and administrative expense to net sales among publicly traded protein companies in the United States. In addition to contract renegotiations and management efficiencies, operating efficiencies have led to annual incremental cost savings and margin improvements of approximately $115 million for the fiscal year ended December 28, 2008. These operating efficiencies include adding a second shift at our Greeley plant, our yield improvement projects, including introduction of a pork casing sorting system (a margin enhancement strategy brought to the United States by JBS S.A.) in all of our U.S. pork plants, improved deboning training and cutting techniques on the fabrication floor and increased value-added production.

Continue to successfully integrate recent acquisitions and selectively pursue additional value-enhancing growth opportunities

We have a proven track record of successfully acquiring and integrating companies, resulting in production and operating synergies. In 2008, we increased production through the Tasman Acquisition and the JBS Packerland Acquisition. These acquisitions have increased our daily cattle processing capacity from approximately 26,500 to 37,290 cattle. Additionally, as a result of the Tasman Acquisition, we added the ability to process 15,000 smalls per day in Australia. The Tasman Group is currently fully integrated with our legacy northern Australia operations in livestock procurement and sales. We expect to complete full integration of all information technology systems by the end of 2009. Similarly, JBS Packerland is fully integrated with respect to our customer credit, legal, treasury, financial reporting, insurance procurement and tax functions and certain employee benefit plans. We have identified and captured shared purchasing opportunities in certain packaging areas and continue to identify additional opportunities as contracts expire. We intend to complete our operational and financial information technology integration of JBS Packerland by September 2009. We will continue to work to maximize potential synergies from these acquisitions. Additionally, we intend to continue to selectively pursue additional value-enhancing growth opportunities as they arise.

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Increase sales and enhance margins by significantly expanding our direct distribution network

Since the Swift Acquisition, we have built a leading global production platform. Capitalizing on our production platform, we are now pursuing a global direct distribution strategy that will enable us to improve our ability to service current customers and allow us the opportunity to directly service new customers, primarily in the food service and retail channels. Our historical sales strategy has relied upon the use of third-party distributors who purchase our product and resell it to end-user customers at higher prices, retaining the incremental margin for their own benefit. We intend to shift a significant part of our sales efforts into direct sales to end-user customers in order to capture this incremental margin. This is consistent with our approach of in-sourcing activities previously outsourced in order to eliminate margin leakage to third parties. Direct distribution will include regional distribution centers, portion control fabrication, or “cutting room” facilities (taking primal cuts which we would have sold only as whole muscle cuts to third parties and fabricating them into individual serving chops or steaks), and direct sales and shipment of products to individual end-user customers by our sales personnel using our own delivery vehicles. This direct distribution strategy will require us to substantially expand our distribution network and sales force domestically and internationally by both acquisitions and greenfield investments. During the next five years, we intend to make substantial investments, including with a portion of the net proceeds of this offering, in order to significantly expand our direct distribution network. Ultimately, we believe that our investment in this direct distribution strategy will allow us to capture incremental sales and operating margin opportunities.

Increase processed and value-added offerings

Historically, we have realized greater margins by offering value-added products and services to our customers. These offerings reduce their costs and help stimulate consumer demand. Examples of our value-added product and service offerings include additional processing to create sliced, cubed and tenderized products and consumer-ready chops and steaks. Similarly we also provide marinated and seasoned meats. These services help reduce labor costs for our food service customers and are examples of our focus on providing our customers with solutions to increase their beef and pork sales.

We believe our retail and food service customers will continue to value more convenient processed products from us. We currently operate 20 plants that produce beef and pork products that are cut, ground and packaged in a customized manner for specific orders that are primarily sold through the food service and retail distribution channels. We intend to expand our processed offerings through line expansions, acquisitions and/or greenfield investments. Increasing our value-added offerings is not limited to growth in processing capabilities, as our Five Rivers operations provide us the ability to design feeding programs that allow us to consistently deliver products that meet the exact specifications desired by our customers. We believe that increased value-added capabilities will drive margin improvement and increase the value we provide to customers.

Promote innovation across the value chain

We believe we can increase our profitability by developing and implementing innovative process and product improvements across the value chain. Our innovations include implementing a casing sorting system utilized in Brazil which enables the sorting of hog intestines (casings) for sale to end-users from all of our U.S. pork processing facilities, resulting in significantly improved

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margins. Additionally, we have developed and implemented energy conversion and recovery processes including real-time processes by which byproducts of purchased natural gas or grease produced in our rendering operations are converted into useable fuels and a methane recovery process resulting in useable methane gas that is subsequently resold in North American pipelines. We have also instituted Halal processing capabilities in our Australian operations, providing us with the opportunity to expand our exports to Muslim customers located in the Middle East, which we believe sets us apart from our competitors in Australia. We will continue to seek to develop innovative process and product improvements across the value chain.

Maintain leadership in food and employee safety

We prioritize our food and employee safety objectives in order to accomplish two principal goals. First, we focus on maintaining a high standard of food safety in order to ensure the quality of our products and attempt to avoid the potential adverse market reaction that is associated with recalls that occur from time to time in the meat processing industry. Second, we strive to continuously improve our employee safety in order to increase the efficiency of our facilities and reduce our operating costs. Since January 2003, we have reduced the number of lost-time injury events by approximately 50% at our beef processing facilities and by approximately 45% at our pork processing facilities through design and implementation of a comprehensive multi-faceted employee safety and injury prevention program.

Description of business segments

Beef segment

Products, sales and marketing

United States

The majority of our beef revenues in the U.S. are generated from the sale of fresh beef, which includes chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef and other products. In addition, we sell beef by-products to the variety meat, feed processing, fertilizer, and pet food industries. Cattle hides are sold for both domestic and international use, primarily to the clothing and automotive industries. We market products under several brand names, including “Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855.” Our hallmark brand, Swift, was founded in 1855 and we believe it is synonymous with our industry leadership in innovation and food quality. We believe that our brands, marketed primarily at the wholesale level, provide a platform for further growth and expansion of our value-added and premium program product lines.

We market our beef products through several channels including:

• national and regional retailers including supermarket chains, independent grocers, club stores and wholesale distributors;

• further processors who use our beef products as a food ingredient for prepared meals, raw materials for hamburger, and by-products for pharmaceutical and leather production;

• the food service industry, including food service distributors, which service restaurant and hotel chains and other institutional customers; and

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• international markets, including Japan, Mexico, South Korea, Canada, and China among others, many of which have reopened to U.S. beef following the 2003 BSE outbreak, as well as other smaller foreign markets, some of which are limited to boxed beef products from cattle younger than 30 months of age.

Our largest distribution channel is retail. We have increased sales to the international channels by approximately 139% from 176 million pounds in 2005 to 420 million pounds in 2008, trending toward pre-BSE levels, which were 456 million pounds in 2003. We intend to continue to focus on increasing our sales in the food service and international distribution channels, in particular, quick-service restaurants and their suppliers, which we believe are likely to continue to be profitable and growing over time.

Total net sales contribution by channel is:

	Fiscal year ended			Fiscal quarter ended March 29, 2009
	2006	2007	2008
Retail	48%	47%	48%	54%
Further processors	23	23	26	23
Food service	22	21	14	14
International	7	9	12	9
Total	100%	100%	100%	100%

Australia

The majority of our beef revenues in Australia are generated from the sale of fresh beef, which includes chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef and other products. We also produce value-added meat products, including toppings for pizza. Approximately 79% of the beef products sold by us are derived from grass-fed cattle. The remainder of our beef products is derived from grain-fed animals that are sold primarily to Japan. Grain-fed cattle provide higher quality meat, which commands a premium price. Our Beef segment also includes our lamb and sheep operations in Australia.

Our Australian operations currently generate approximately 89% of total net sales as exports to foreign countries, including Japan, our largest export market, as well as the United States. Australia’s sales to export markets have continued to benefit from the 2003 North American BSE incident, which had closed key Asian markets to the import of U.S. beef. Since 2003, these market closings increased the marketability of our Australian beef into those markets as Australia had no similar import restrictions on its production.

Global exports

We sell our products in over 60 countries on six continents. Overall, exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. The international beef market is divided between the Pacific Block (which includes the United States, Japan, Canada, Mexico and South Korea) and the Atlantic Block (Europe, Africa, the Middle East and South America). This division reflects not only historical and geographical ties but also certain common sanitary criteria.

The Pacific Block prohibits imports of fresh beef from countries or regions where there is still a risk of new outbreaks of foot-and-mouth disease, or FMD, and from countries or regions that are

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FMD-free but implement FMD vaccination programs. However, the Pacific Block permits imports of processed beef (including cooked and pre-cooked products) from these countries.

Most countries of the Atlantic Block permit imports of fresh beef from FMD-free countries that implement FMD vaccination programs. They also recognize that FMD can be eradicated on a regional (as opposed to national) basis in certain countries, including Brazil, which has areas that are FMD-free and have vaccination programs, qualifying them to export fresh beef. Under this regionalization concept, many beef producing regions in Brazil are thus qualified to export fresh beef to countries in the Atlantic Block. Notwithstanding the foregoing, most countries in the Atlantic Block impose import restrictions on beef treated with growth hormones, citing health concerns. Brazil and Argentina have prohibited the use of growth hormones on their cattle.

The United States has been an FMD-free country since the eradication of the disease, and it does not implement vaccination programs. However, the United States treats most of their cattle with growth hormones, and, accordingly, the European Union and several other countries have banned imports of beef treated with growth hormones from the United States.

Australia is an FMD-free country and does not implement vaccination programs against the disease. It also does not use growth hormones in a small part of its cattle herd and is therefore able to export to any country in the world.

As a result of this division and the sanitary restrictions between the Pacific Block and the Atlantic Block, we believe that our U.S. export operations of fresh beef today do not directly compete with our parent company’s Brazilian and Argentine export operations of fresh beef in our main export destinations. Although JBS S.A. is a large exporter of beef to the European Union, for example, we do not have relevant export volume to the European Union because of its restrictions on beef treated with growth hormones. Consequently, we do not have formal arrangements with JBS S.A. to coordinate our exports in our export markets. However, to the extent that sanitary restrictions change in the future, we could become direct competitors of our parent company in certain export markets.

We do compete with JBS S.A. to a limited degree, however, for example, to the extent that our Australian operations export to the European Union, the Middle East and Southeast Asia, which are also export markets for JBS S.A. We do not believe our Australian business’ competition with JBS S.A. in these markets has a material adverse effect on our current business.

Raw material and feedlot operations

United States

The primary raw material for our U.S. processing facilities is live cattle. All of our U.S. cattle procurement process is centralized at our headquarters in Greeley, Colorado, except for our JBS Packerland procurement process, which is centralized in Green Bay, Wisconsin. We require all of our cattle suppliers to document the quality of their feedlot operations, verify that the use of antibiotics and agricultural chemicals follow the manufacturer’s intended standards and confirm that feed containing animal based protein products, which have been associated with outbreaks of BSE, has not been used. We have in excess of 3,000 cattle suppliers.

We secure approximately 29% of our annual cattle needs under forward purchase arrangements and purchase our remaining needs on the spot market. These forward purchase contracts are not fixed price contracts but rather they are priced at market upon delivery, thus generally

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minimizing our exposure to price volatility before delivery. On a pro forma basis, we will purchase approximately 24% of our U.S. cattle needs under an arrangement whereby we are entitled to a portion of the seller’s gains, and are obligated to reimburse the seller for a portion of its losses, in its sale of cattle to us. See “Certain relationships and related party transactions— Arrangements with J&F Oklahoma—Cattle purchase and sale agreement.”

Five Rivers operates 11 cattle feedlots with a one-time feeding capacity of 820,000 cattle, located in Colorado, Idaho, Kansas, Oklahoma and Texas, adjacent to our existing Beef segment slaughter facilities. Almost 1.5 million head of cattle were fattened in these feedlots in 2008 and approximately 334 thousand head of cattle during the fiscal quarter ended March 29, 2009. Five Rivers does not own cattle and simply operates its feedlots and charges beef companies (including us) to feed and care for their cattle. Five Rivers supplies us with approximately 30% of our cattle needs and is obligated to sell to us, on an annual basis, a minimum of 500,000 cattle at market prices upon delivery.

Historically, cattle prices have been subject to substantial fluctuations. Cattle supplies and prices are affected by factors such as corn and soybean meal prices, weather and farmers’ access to capital. JBS Packerland’s four processing plants purchase lean Holstein steers and cows and other cattle primarily from feedlots, auction barns, direct contract relationships with suppliers in close proximity to processing plants and from its existing cattle feeding operations. The close proximity of these plants to most of their suppliers reduces transportation costs, shrinkage and bruising of livestock in transit.

Vertically integrated beef processors, which own cattle on feed, can be subject to significant financial impact in terms of working capital utilization, since cattle on feed eat in the yards for 90-180 days and do not generate revenue until slaughtered. Since cattle on feed consume feed with a replacement price that is subject to market changes, vertically integrated beef processors have direct financial exposure to the volatility in corn and other feedstock prices. We do not own cattle on feed, and we generally purchase cattle in the spot market or pursuant to market-priced supply arrangements from feedlot operators, and, except as described below, typically hold cattle for less than one day before processing. After processing, we sell the beef at spot prices. Because we generally buy cattle at market prices and sell the finished beef product at market prices with just a short time between the purchase and sale, we are not exposed to changing market prices over as great a span of time as vertically integrated processors. As such we are primarily a “spread” operator, and our operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of cattle and beef.

Australia

The primary raw materials we use in our Australian processing facilities are live cattle, lamb and sheep. Our cattle procurement function is focused on efficiently sourcing both grass-fed cattle and feeder cattle for our grain-fed business. Grass-fed cattle are primarily sourced from third-party suppliers with specific weight and grade characteristics. This process helps ensure that the cattle we source meet our future order requirements. The majority of grain-fed cattle are sourced from company-owned feedlot operations.

We operate five feedlots that provide grain-fed cattle exclusively for our processing operations in Australia. We source feeder cattle from livestock producers in Australia. On average, cattle remain in our feedlots for approximately 140 days before they are transferred to our processing operations. Our feedlots produce approximately 288,000 cattle per year for processing. Our

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Australian feedlots operate essentially in the same manner as retained ownership feedlots in the United States, meaning that we own the cattle and therefore carry the risk on the cattle. For a large proportion of these cattle, we know the eventual customers and their product requirements based on our close relationship with these customers and their purchasing history. Feed rations are determined based on scientific analysis. It is worth highlighting the distinction between retained ownership feedlots and custom feedlots, like our U.S. feedlots. In custom feedlots the animals are sold by the feedlot to beef processors on behalf of the livestock owner and the livestock owner’s proceeds are paid to the livestock owner after the feedlot has deducted the yardage cost for fattening the animal and delivering the fattened animal to the meat processor. The distinction is important since in custom feedlots the livestock owner is at risk for the ultimate sale of the animal at completion, whereas in retained ownership feedlots the feedlot carries the risk of holding the cattle until they are sold.

Processing facilities

United States

Our beef operations in the United States consist of eight fed cattle facilities. Steers and heifers raised on concentrated rations are typically referred to in the cattle industry as “fed cattle,” and cattle not fed such concentrated rations are usually referred to as “non-fed cattle.”

Our facilities utilize modern, highly-automated equipment to process and package beef products, which are typically marketed in the form of boxed beef. We also customize production and packaging of beef products for several large domestic and international customers. The designs of our facilities emphasize worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards. We have equipped our Santa Fe Springs, California facility to process value-added products, including, for example, the G.F. Swift 1855 brand line of premium beef products. Our Greeley, Colorado, Cactus, Texas, and Grand Island, Nebraska facilities have been equipped to produce value-added operations, including slicing, grinding and cubing of beef products for retail and food service customers.

Our JBS Packerland facilities are engineered to slaughter both fed cattle and cows. Many beef processing facilities in the United States are engineered to slaughter only cows or only fed cattle. This flexibility enables us to shift operations between fed cattle and cows based upon market availability, seasonal demand and margins. In addition, JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs compared to cattle processing facilities in other localities. JBS Packerland’s Tolleson, Arizona plant is located near Phoenix, Tucson, and Los Angeles; the Plainwell, Michigan plant is located near Chicago and Detroit; the Green Bay plant is located near Milwaukee and Chicago; and the Souderton, Pennsylvania plant is located near Baltimore, Philadelphia and New York.

Our food safety efforts incorporate what we believe to be a comprehensive network of leading technologies, such as MultiCheck, that minimize the risks involved in beef processing. Two of the elements of MultiCheck are double pasteurization of carcasses prior to chilling and a chilled carcass treatment using organic acid immediately prior to carcass disassembly. SwiftTrace^TM is another element we implemented as part of our on-going commitment to animal and human safety. SwiftTrace^TM is a process whereby live animals and finished animal products can be traced backward or forward in the supply chain. This process helps to build confidence from suppliers, customers and consumers in the food supply chain.

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Australia

Our ten processing facilities are strategically located for efficient livestock acquisition, availability of labor and access to shipping and distribution. Our facilities utilize modern, highly-automated equipment to process and package beef products. The Dinmore facility is the largest plant in Australia. The Beef City plant processes grain-fed cattle.

Since July 2007, we have made important capital and operational expenditures, including the installation of plate freezers and finely textured meat processing, as well as value-added variety meats capture technology. These expenditures have enhanced product quality, improved customer satisfaction and increased sales potential. We have equipped our facilities to process value-added products and consumer-ready products. Our facilities produce additional value-added products, including seasoned and marinated beef items. The design of our facilities emphasizes worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards.

All products are subject to stringent animal husbandry and food safety procedures. Our processing facilities are operating under the strictest food safety and quality assurance regime to comply with international customer requirements. Our Dinmore and Beef City facilities are European Union-certified facilities, which enable us to export primal cuts to Europe. Our feedlots are managed with cattle friendly policies, providing a clean and scientific feeding regimen to ensure that safe grain-fed products are delivered to our customers.

Pork segment

Products, sales and marketing

We are the third largest pork producer in the United States, with a slaughtering capacity of 48,500 head per day. A significant portion of our revenues are generated from the sale of fresh pork products, including trimmed cuts such as loins, roasts, chops, butts, picnics and ribs. Other pork products, including hams, bellies and trimmings, are sold predominantly to further processors who, in turn, manufacture bacon, sausage and deli and luncheon meats. The remaining sales are derived from by-products and from further-processed, higher margin products. Due to the higher margins attributable to value-added products, we intend to place greater emphasis on the sale of moisture-enhanced, seasoned, marinated and consumer-ready pork products to the retail channel and boneless ham and skinless bellies to the further processor channel. Our U.S. lamb business currently operates under our Pork segment and accounted for less than 1% of our total net sales for the fiscal quarter ended March 29, 2009. During the fiscal quarter ended March 29, 2009, our Pork segment had net sales of $526.3 billion and EBITDA of $7.5 million. See “Management’s discussion and analysis of financial condition and results of operations–Supplemental financial data.”

We market our pork products through several channels, including:

• national and regional retailers including supermarket chains, independent grocers, club stores and wholesale distributors;

• further processors that use its pork products as a food ingredient for prepared meals, raw material for sausage manufacturing and by-products for pharmaceutical production;

• international markets including Japan, Mexico and China, among others; and

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• the food service industry, including food service distributors, fast food, restaurant and hotel chains and other institutional customers.

Pork products sold to the domestic retail and further processor channels comprised approximately 80% of total net sales for the fiscal quarter ended March 29, 2009. Pork exports contributed approximately 16% of net sales over the same period. We consider the overseas markets an opportunity for future growth.

Total net sales contribution by channel were:

				Fiscal quarter ended March 29, 2009
	Fiscal year ended
	2006	2007	2008
Retail	44%	42%	40%	44%
Further processors	41	42	40	36
International	11	12	16	16
Food service	4	4	4	4
Total	100%	100%	100%	100%

Raw material

The primary raw material that we use in our processing facilities is live hogs. We employ a network of hog buyers at our processing plants and buying stations to secure our hog supply. Approximately 69% of our hog purchases are made through various forms of supply contracts that provide us with a stable supply of high-quality hogs. These supply contracts are typically four to five years in duration and stipulate minimum and maximum purchase commitments with prices based in part on the market price of hogs upon delivery, with adjustments based on quality, weight, lean composition and meat quality. We purchase the remaining approximately 31% of our hogs on the spot market at a daily market price with the same general quality and yield grade as we require under our contracts. We require an extensive supplier certification program and conduct comprehensive cutting tests of our potential suppliers’ animals to determine carcass composition and leanness.

Vertically integrated pork processors, which own hogs on feed, can be subject to significant financial impact in terms of working capital utilization, since hogs on feed eat in the yards for approximately 180 days and do not generate revenue until slaughtered. In addition, since hogs on feed consume feed with a replacement price that is subject to market changes, vertically integrated pork processors have direct financial exposure to the volatility in corn and other feedstock prices. We are a non-vertically integrated pork processor. We do not own hogs on feed and generally purchase finished hogs under long-term supply contracts at prevailing market prices, fabricate the hogs in our production facilities and sell the finished products at spot prices. Because the finished hogs typically are acquired within 24 hours of slaughter, they are not exposed to changing market prices over as great a span of time as vertically integrated processors.

Processing facilities

Our operations in the United States consist of three processing facilities located in close proximity to major hog growing regions of the country, a value-added facility that produces consumer-ready pork for certain customers and a lamb processing facility.

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Our facilities utilize modern, highly-automated equipment to process and package pork products, which are typically marketed in the form of boxed pork. Since July 2007, we have made important capital and operational expenditures, including the installation of plate freezers and finely textured meat processing, as well as value-added variety meats capture technology. We believe that these expenditures have enhanced product quality, improved customer satisfaction and increased sales potential. We have equipped our Santa Fe Springs, California facility to process value-added products and consumer-ready products. Our Louisville, Kentucky and Marshalltown, Iowa facilities produce additional value-added products, including seasoned and marinated pork items. The design of our facilities emphasizes worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards. Our Worthington, Minnesota and Marshalltown, Iowa pork plants currently have International Standards Organization (ISO) 9001 certified quality management systems, and Worthington is a European Union-certified facility that enables us to export primal cuts to Europe.

Our food safety task force consists of experts in the field of meat processing, food microbiology and quality assurance, all working together to assure compliance at all stages of the production chain and distribution channels. Our internal programs, policies and standards are designed to exceed both regulatory requirements and customer specifications. Our food safety efforts incorporate what we believe is a comprehensive network of leading technologies, such as MultiCheck, that minimize the risks involved in pork processing.

Facilities

In the United States, we conduct our Beef and Pork segment operations through eight beef processing facilities, three pork processing facilities, one lamb slaughter facility, one case-ready beef and pork facility, one hide tannery, seven leased regional distribution centers and two grease producing facilities, as well as 11 feedlots operated by Five Rivers. In Australia, we operate our Beef segment operations through ten beef and smalls processing facilities, including the largest and what we believe is the most technologically advanced facility in Australia, and five feedlots, all of which are owned by us. Our facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the ability to process approximately 28,600 cattle, 48,500 hogs, and 4,500 lambs daily in the United States and the ability to process 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations. In addition, our leased Sante Fe Springs facility is used to process beef and pork products.

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The following table shows the location, capacity and segments represented by our processing facilities in the United States and Australia as of March 29, 2009, all of which are owned:

Facility location by segment
Beef segment	Cattle/day	Smalls/day	Hogs/day
United States
Cactus, TX	6,000	—	—
Grand Island, NE	6,000	—	—
Greeley, CO	6,000	—	—
Green Bay, WI	2,400	—	—
Hyrum, UT	2,500	—	—
Plainwell, MI	1,900	—	—
Souderton, PA	1,900	—	—
Tolleson, AZ	1,900	—	—
Australia
Beef City	1,100	—	—
Brooklyn	1,500	8,000	—
Cobram	—	3,000	—
Devon Port	150	2,500	—
Dinmore	3,350	—	—
King’s Island	180	—	—
Longford	480	1,500	—
Rockhampton	650	—	—
Townsville	900	—	—
Yarrawonga	380	—	—
Pork segment
United States
Greeley, CO	—	4,500	—
Louisville, KY	—	—	10,100
Marshalltown, IA	—	—	19,700
Worthington, MN	—	—	18,700

Transportation

We own or lease approximately 600 trucks in the U.S. and Australia that are specially equipped to transport raw materials and finished products. In addition, we have recently entered into an agreement to lease an additional 400 trucks, which have begun to be delivered. We also utilize third-party shipping companies that provide us with additional trucks to transport our raw materials and finished products.

Distribution

Our distribution varies by product type. We lease seven distribution facilities located in New Jersey, Florida, Nebraska, Arizona, Colorado and Texas and eight trading/distribution facilities in Australia. These distribution facilities are strategically located near certain of our processing facilities. We also sell our products to food service distributors that further distribute our

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products to restaurants and hotel chains and other customers. These food service distributors purchase our products from both our processing facilities and our current distribution facilities. We intend to pursue a global direct distribution strategy that will enable us to improve our ability to service current customers and give us the opportunity to directly service new customers in the food service and retail channels. This direct distribution strategy requires that we substantially expand our distribution network and sales force domestically and internationally. See “—Our strategy—Increase sales and enhance margins by significantly expanding our direct distribution network” above. We intend to continue to sell our products to food service distributors following the implementation of our direct distribution strategy.

Competition

The beef and pork processing industries are highly competitive. Competition exists both in the purchase of live cattle and hogs, as well as in the sale of beef and pork products. Our products compete with a large number of other protein sources, including chicken, turkey and seafood, but their principal competition comes from other beef and pork processors, including Tyson Foods, Inc. and Cargill, Inc. Our management believes that the principal competitive factors in the beef and pork processing industries are price, quality, food safety, product distribution and brand loyalty.

In addition, we are pursuing a global direct distribution strategy as we seek to enhance our operating margins. This strategy may expose us to direct competition with our existing third-party food service distribution customers in some segments, which could affect our relationship with these customers. See “Risk factors—Risks relating to our business and the beef and pork industry—We face competition in our business, which may adversely affect our market share and profitability” and “—Failure to successfully implement our business strategies may affect our plans to increase our revenue and cash flow.”

Employees

As of March 29, 2009, we had approximately 31,900 employees, including approximately 25,700 in our Beef segment and approximately 6,200 in our Pork segment. We consider relations with our employees to be good. Approximately 17,700 employees at our United States facilities are represented by labor organizations and work under collective bargaining agreements expiring between 2009 and 2010. Approximately 6,600 employees at our Australia plants are parties to Awards of Enterprise or Certified Agreements between various labor organizations and our Australian subsidiaries and work under collective agreements expiring between 2010 and 2014.

In 2001, ConAgra Beef Company, the predecessor to Swift Beef Company, paid a fine as a result of a lawsuit by the Department of Labor claiming that ConAgra Beef Company had acted improperly in too aggressively investigating the backgrounds of its job applicants. As a result, at the government’s suggestion, we began to use E-Verify, a free and voluntary online system operated jointly by the United States Department of Homeland Security and the Social Security Administration, through which participating employers can determine the employment eligibility of new hires. To date, no civil or criminal charges have been filed by the U.S. government against us or any of our current or former management employees related to an employee’s eligibility to work in the U.S.

On December 12, 2006, agents from ICE and other law enforcement agencies conducted on-site employee interviews at all of our U.S. production facilities, except with respect to the facilities

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located in Louisville, Kentucky and Santa Fe Springs, California, in connection with an investigation of the immigration status of an unspecified number of our workers. Approximately 1,300 individuals were detained by ICE and removed from our domestic labor force. On December 12, 2006, after a six- to seven-hour suspension of operations due to the employee interview process, we resumed production at all of our facilities in the United States, but at reduced output levels. We resumed normal production at our pork processing facilities in March 2007 and reported in May 2007 that we had returned to standard staffing levels at all of our beef processing facilities. See “Risk factors—Risks relating to our business and the beef and pork industries—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

As of April 18, 2007, we implemented new policies for hiring our employees. According to the new policies, our human resources department will use all information obtained during the initial review of the documentation of the individuals applying for a job with us to verify the veracity of the relevant applicant’s information throughout the entire hiring process. This policy includes (1) checking if such information is consistent with other information related to the applicant (such as prior places of residence and previous jobs) and (2) cross-checking the information against certain indicia of fraud to determine whether the documentation is consistent with the applicant’s known identity. Applicants will not be hired if false documents are identified at any stage of the hiring process. In addition to these policies, we audit 100% of the documentation of new employees on a weekly basis and, on a quarterly basis, a manager that is not involved in the hiring process audits the documentation and the hiring process of 50 randomly selected employees. We also utilize a third-party immigration law expert to periodically audit our processes and methods.

Our performance depends on favorable labor relations with our employees. Any deterioration of those relations or increase in labor costs could adversely affect our business. See “Risk factors—Risk factors relating to our business and the beef and pork industry—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

Regulation

Our operations are subject to extensive regulation by the USDA, the EPA, and other state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of its products, including food safety standards.

Our United States operations are subject to extensive regulation by the EPA and other state and local authorities relating to handling and discharge of waste water, storm water, air emissions, treatment, storage and disposal of wastes, handling of hazardous substances and remediation of contaminated soil, surface water and groundwater. Our Australian operations also are subject to extensive regulation by the Australian Quarantine Inspection Service as well as Australian environmental authorities. The EPA, AQIS, and/or other U.S. or Australian state and local authorities may, from time to time, adopt revisions to environmental rules and regulations, and/or changes in the terms and conditions of our environmental permits, with which we must comply. Such compliance may require us to incur additional capital and operating expenses which may be significant. In order to ensure ongoing compliance with existing environmental laws, rules, and regulations, we must, from time to time, replace, repair, or upgrade existing facilities,

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equipment, or supplies, which may require us to incur additional capital. Some of our facilities discharge wastewater to municipally operated wastewater treatment plants, and if such

municipal plants are unable to comply with their own environmental permits, they may require that we make improvements or operational changes that could result in additional costs. In addition, some of our facilities use hazardous substances such as ammonia in refrigerant systems, and releases resulting from leaks or other accidental occurrences could result in liability. Some of our properties have been impacted by contamination from spills or other releases, and we or our predecessors have incurred costs to remediate such contamination. We also have voluntarily upgraded some existing facilities to address concerns of local governmental officials and/or our neighbors. See “Risk factors—Risks relating to our business and the beef and pork industries—Compliance with environmental requirements may result in significant costs, and failure to comply may result in civil liabilities for damages as well as criminal and administrative sanctions and liability for damages.”

Increasing efforts to control emissions of greenhouse gases, or GHG, are likely to impact us. In the United States, the EPA recently proposed a mandatory GHG reporting system for certain activities, including manure management systems, which exceed specified emission thresholds. The EPA has also announced a proposed finding relating to GHG emissions that may result in promulgation of GHG air quality standards. The U.S. Congress is considering various options including a cap and trade system which would impose a limit and a price on GHG emissions, and establish a market for trading GHG credits. The House of Representatives recently passed a bill contemplating such a cap and trade system, and the bill is now before the Senate. Certain states have taken steps to regulate GHG emissions that may be more stringent than federal regulations. In Australia, the federal government has proposed a GHG cap and trade system that would cover agricultural operations, including certain of our feedlots, and at least two of our processing plants. Certain states in Australia could also adopt regulations of GHG emissions which are stricter than Australian federal regulations. While it is not possible to estimate the specific impact final GHG regulations will have on our operations, there can be no guarantee that these measures will not result in significant impacts on us.

Our U.S. operations are subject to the U.S. Packers and Stockyards Act of 1921. This statute generally prohibits meat packers in the livestock industry from engaging in certain anti-competitive practices. In addition, this statute requires us to make payment for our livestock purchases before the close of the next business day following the purchase and transfer of possession of the livestock we purchase, unless otherwise agreed to by our livestock suppliers. Any delay or attempt to delay payment will be deemed an unfair practice in violation of the statute. Under the Packers and Stockyards Act, we must hold our cash livestock purchases in trust for our livestock suppliers until they have received full payment of the cash purchase price. As of March 29, 2009, we maintained surety bonds in the aggregate amount of approximately $70.4 million to secure our payment obligations to our livestock suppliers.

We are also subject to voluntary market withdrawals and recalls of our meat products in the event of suspected contamination or adulteration that could constitute food safety hazards. We maintain a rigorous program of interventions, inspections and testing to reduce the likelihood of food safety hazards. As a proactive measure, our management team expanded our testing procedures in all of our beef processing plants. We recently undertook a voluntary recall of certain of our beef products. See “Risk factors—Risks relating to our business and the beef and pork industries—Any perceived or real health risks related to the food industry could adversely affect our ability to sell our products. If our products become contaminated, we may be subject to product liability claims and product recalls.”

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We monitor certain asset retirement obligations in connection with our operations. These obligations relate to clean-up, removal or replacement activities and related costs for “in-place” exposures only when those exposures are moved or modified, such as during renovations of our facilities. These in-place exposures include asbestos, refrigerants, wastewater, oil, lubricants and other contaminants common in manufacturing environments. Under existing regulations, we are not required to remove these exposures and there are no plans or expectations of plans to undertake a renovation that would require removal of the asbestos, nor the remediation of the other in place exposures at this time. The facilities are expected to be maintained and repaired by activities that will not result in the removal or disruption of these in place exposures. As a result, there is an indeterminate settlement date for these asset retirement obligations because the range of time over which we may incur these liabilities is unknown and cannot be reasonably estimated. Therefore, we cannot reasonably estimate and have not recorded the fair value of the potential liability.

Our facilities have, from time to time received notices from regulatory authorities, citizens groups or others asserting that we are not in compliance with specified laws and regulations, and sometimes our facilities have been subject to additional investigations and/or enforcement actions regarding such alleged violations by us or by our predecessors. In some instances, litigation ensues, including the matters discussed below in “Legal proceedings.”

Legal proceedings

From time to time, we are parties to various legal proceedings incident to our business. As of the date of this prospectus, there were no legal proceedings against us with respect to matters arising outside the ordinary course of business or which we anticipate would have a material adverse effect on us other than the matters described under “Wastewater issues” below.

Wastewater issues

Smithfield Souderton, Pennsylvania facility

In connection with the JBS Packerland Acquisition, we acquired a beef processing plant in Souderton, Pennsylvania. There were two reported wastewater incidents at the Souderton facility in 2006. These incidents were resolved by a consent order and agreement with the State of Pennsylvania providing for civil penalties and damages totaling $77,888 and establishing an enforceable schedule for the completion of a planned $5 million upgrade to the facility’s existing wastewater treatment system.

On August 10, 2007, the Souderton facility experienced a separate wastewater release, which reached a nearby tributary, Skippack Creek. The facility received an EPA Section 308 Information Request pursuant to the Clean Water Act from the Environmental Protection Agency Region III requesting further details on, among other things, this incident and overflows generally from the collection system that routes wastewater from facility process units to the wastewater treatment works.

On December 5, 2007, the Souderton facility experienced an operational upset in a part of the chlorination system of its wastewater treatment plant. The plant discharges to Skippack Creek. JBS Packerland provided notice of the upset on the same day, and then filed a written report to the Pennsylvania Department of Environmental Protection and the Pennsylvania Fish and Boat Commission. In the written report, JBS Packerland stated that it had already reconfigured the chlorination system to prevent a recurrence and that the facility intended to replace the existing

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chlorination system, pending approval of plans that had been submitted to the State prior to the upset. The EPA and the Department of Justice have commenced an investigation into the incident and have issued grand jury subpoenas for documents and testimony. The facility is cooperating with the investigation.

On June 10, 2008, the Souderton facility experienced a separate release, which reached Skippack Creek and resulted in a fish kill. An initial investigation revealed the discharge was condenser water from JBS Packerland’s rendering plant which had bypassed the wastewater treatment facility. The facility provided notice of the release on the same day to state environmental authorities and filed a written report with the Pennsylvania Department of Environmental Protection and Fish and Boat Commission. The EPA has commenced an investigation, and the facility is cooperating with the investigation.

On December 29, 2008, the United States Department of Justice commenced a civil action against us in the federal district court for the Eastern District of Pennsylvania in connection with these past violations of the federal Clean Water Act at the Souderton facility. At this time, due to the nature and circumstances of this enforcement action, it is not possible to assess the liability, including any potential penalties, associated with these incidents. In connection with the JBS Packerland Acquisition, Smithfield Foods, Inc. agreed to indemnify us for all damages arising from the wastewater incidents of August 10, 2007 and December 5, 2007. Smithfield Foods, Inc. also agreed to indemnify us for costs and damages arising from the June 10, 2008 wastewater incident, and any other breaches of its environmental representations and warranties, subject to an aggregate $100 million cap and $2.5 million deductible (excluding claims of $25,000 or less) generally applicable to Smithfield Foods’ indemnity obligations, and subject to certain time and other limitations.

Grand Island, Nebraska facility

In May 2008, the Nebraska Department of Environmental Quality, or DEQ, and the EPA alleged that from 2004 to the present the wastewater discharge from our Grand Island, Nebraska plant had violated various provisions of the Nebraska Environmental Protection Act and the federal Clean Water Act by causing the City of Grand Island to violate the limits in its wastewater discharge permit. The EPA and DEQ are seeking a fine and an injunction to ensure our future compliance with the Nebraska Environmental Protection Act and the federal Clean Water Act. We are currently conducting settlement negotiations with the EPA and DEQ to resolve this matter.

In January 2009, we received a grand jury subpoena from the United States Attorney’s Office for the District of Nebraska, requesting documents related to our wastewater pretreatment system for the Grand Island plant. We are complying with the subpoena. Given the nature and circumstances of these matters, we are not able to estimate the liability or other impacts on us, including any penalties associated with them.

Intellectual property

We hold a number of trademarks, patents and domain names that we believe are material to our business and which are registered with the United States Patent and Trademark Office, including “Swift” and “Monfort” derivative trade names and “Miller Blue Ribbon Beef.” We have also registered “Swift” and “Monfort” derivative trademarks in most of the foreign countries to which we sell our products, except in Argentina, Canada, Japan and in the Philippines. In

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Argentina, the “Swift” and derivative trademarks are owned by JBS S.A. In Japan, we are authorized to use the trademark “Swift” under an exclusive license agreement entered into with Nippon Meat Packers Inc. Currently, we have a number of patent applications and trademark registrations pending in the United States and in foreign countries. In addition to trademark protection, we attempt to protect our unregistered trademarks and other proprietary information under trade secret laws, employee and third-party non-disclosure agreements and other laws and methods of protection.

Insurance

We have an insurance program that provides for protection against (1) property damages affecting most of our buildings, furniture, machinery, appliances, products and raw materials caused by fire, lightning, explosion, flooding, electrical faults, landslides, riots, strikes, lock-outs and windstorms, (2) deterioration of goods in refrigerated areas, and (3) robbery and theft. Our insurance is renewed annually. We believe that our insurance policy provides suitable coverage for the risks inherent to our operations both in terms of the type of coverage and of the insured amounts. Even though we have insurance policies, there are risks that are not insurable, such as war, unavoidable and unforeseen circumstances or the interruption of some activities and losses arising from events that are not insured. If any of these events occur, we may incur significant costs which may have a material adverse effect upon our financial performance and results of operation.

We are self-insured for employee medical and dental benefits and purchase insurance policies with deductibles for certain losses related to worker’s compensation and general liability claims. We purchase stop-loss coverage in order to limit our exposure to any significant level of certain claims. Self-insured losses are accrued based upon periodic assessments of estimated settlements for known and anticipated claims.

Information technology

Our software system of accounts receivable, accounts payable, inventory, accounting, payroll and procurement, which is used by our legacy business units, allows us to accurately manage our cash flows, accounts receivable and accounts payable in our operating locations. These systems are being integrated into the newly acquired businesses. We continue to analyze new information technology alternatives to increase our efficiency and reduce our costs.

We have a strong track record of managing the integration of information technology. For example, we have already fully integrated into our reporting structure the Tasman Group and JBS Packerland, including Five Rivers.

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Management

Directors and executive officers

The following table sets forth the name, age and position of individuals who currently serve as the directors and executive officers of JBS USA Holdings, Inc. Ages are as of April 10, 2009.

Name	Age	Position(s)
Wesley Mendonça Batista	39	President, Chief Executive Officer and Director
André Nogueira de Souza	40	Chief Financial Officer
Dennis Roerty	44	Treasurer
Robert Daubenspeck	49	Head of Human Resources
Martin J. Dooley	48	Head of Pork
Brent Eastwood	43	Head of JBS Trading
William G. Trupkiewicz	45	Chief Accounting Officer, Secretary
Richard Vesta	62	Head of Beef
Joesley Mendonça Batista	37	Director
José Batista Júnior	49	Director

The following is a biographical summary of the experience of our directors and executive officers.

Wesley Mendonça Batista became our President and Chief Executive Officer in May 2007. Mr. Batista also serves as a member of our Board of Directors. In addition to his responsibilities in the United States, Mr. Batista is currently the Executive Director of Operations of JBS S.A. and is the Vice President of its Board of Directors. Mr. Batista has served in various capacities at JBS S.A. since 1987. Mr. Batista is the brother of Joesley Mendonça Batista, the President of JBS S.A., and José Batista Júnior, a Director of JBS S.A., and is the son of José Batista Sobrinho, the founder of JBS S.A. and a member of its Board of Directors.

André Nogueira de Souza began acting as our Chief Financial Officer in August 2007. Before joining us, Mr. Nogueira served as head of Corporate Banking for Banco do Brasil in their New York and São Paulo offices from January 2000 to August 2007.

Dennis Roerty became our Treasurer in February 2009. Prior to that date, Mr. Roerty was the Treasurer of UAP Holding Corp. from March 2004 to February 2009, where he was responsible for treasury, financial planning and analysis, and leading the company’s acquisition program. Prior to joining UAP, Mr. Roerty worked for PPL Global, LLC from 1998 to 2004, serving most recently as Director of Acquisitions and Divestitures. Mr. Roerty also held various positions in financial analysis and treasury with Air Products and Chemicals from 1988 to 1998.

Robert Daubenspeck became our head of Human Resources in February 2009. Prior to serving in such role, Mr. Daubenspeck served in the same capacity for JBS Packerland from 2002 to 2008. Previously, Mr. Daubenspeck has served as human resources director for JBS Packerland’s Souderton, Pennsylvania plant.

Martin J. Dooley became the head of our Pork segment in June 2007. From May 2006 to May 2007, Mr. Dooley was our Executive Vice President, Margin Management. From November 2004 to May 2006, Mr. Dooley was employed as Vice President, Margin Management of Swift Foods

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Company and was responsible for cattle and hog procurement, beef and pork pricing, and risk management. From September 2002 to November 2004, Mr. Dooley was employed as Vice President, Processor Sales, Beef and Pork of Swift Food Company. From 1998 to 2002, Mr. Dooley was Swift Food Company’s Vice President Processor Sales and Risk Management, Pork. From 1993 to 1998, Mr. Dooley was Swift Food Company’s Vice President Processor Sales, Pork. Prior to 1993, Mr. Dooley was employed in various positions in product management and sales for Swift Food Company.

Brent Eastwood became our head of JBS Trading in October 2007. Prior to serving as head of JBS Trading, Mr. Eastwood served as General Manager of Trading for Swift/AMH in Australia for six years. Prior to joining Swift, Mr. Eastwood served as Managing Director of ConAgra Trade Group’s Australian Meat Division.

William G. Trupkiewicz became the Corporate Controller, Chief Accounting Officer and Secretary of JBS USA Holdings and its subsidiaries in July 2007. Mr. Trupkiewicz served as Acting Treasurer of JBS USA Holdings, Inc. from June 2008 to February 2009 and as Acting Chief Financial Officer of predecessor companies effective February 20, 2006 until October 26, 2006. Mr. Trupkiewicz served in senior financial positions including Senior Vice President, Corporate Controller and Chief Accounting Officer of predecessor companies from September 2002 until May 2006. Mr. Trupkiewicz has been employed by JBS USA Holdings, Inc. and its predecessor companies in various senior finance and accounting positions since October 1994. From June 1993 until October 1994, Mr. Trupkiewicz was employed as Vice President, Controller of Vessels Oil and Gas Company, a Denver-based oil and gas production company. Prior to his employment at Vessels, Mr. Trupkiewicz served as Vice President Financial Reporting and Tax for SafeCard Services, Inc., a NYSE traded consumer products company. From July 1985 until June 1992, Mr. Trupkiewicz was employed by Price Waterhouse LLC serving in various capacities in its audit practice. Mr. Trupkiewicz is a Certified Public Accountant.

Richard Vesta became the head of our Beef segment in March 2009. Prior to that date, Mr. Vesta served as president and chief executive officer of Smithfield Beef Group, Inc. (now known as JBS Packerland) from 2002 to 2009. Prior to that, Mr. Vesta held senior executive positions in the beef industry with Packerland Packing Company, Inc., Land O’Lakes, Swift Independent Packing Company and Val-Agri Inc., Monfort and Murco. Mr. Vesta began his career in the meat industry as a retail meat cutter, eventually holding various senior positions in retail meat sales at a regional chain.

Joesley Mendonça Batista is currently the Chief Executive of JBS S.A. and the President of its board of directors. Mr. Batista has served in various capacities at JBS S.A. since 1988. Mr. Batista is the brother of Wesley Mendonça Batista and the son of José Batista Sobrinho, the founder of JBS S.A.

José Batista Júnior is currently a director of JBS USA, LLC and JBS S.A. Mr. Batista Júnior has served in various capacities at JBS S.A. since 1974 and as a member of the board of directors of JBS S.A. since January 2, 2007. Mr. Batista Júnior is the brother of Wesley Mendonça Batista and Joesley Mendonça Batista, and the son of José Batista Sobrinho, the founder of JBS S.A.

Board composition after this offering

Upon the closing of this offering, our board of directors will consist of seven members. Our amended and restated certificate of incorporation and amended and restated bylaws in effect

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immediately following this offering will provide that the number of directors will be fixed from time to time by resolution of the board.

All directors hold office until their successors have been elected and qualified or until their earlier death, resignation, disqualification or removal. Effective upon the closing of this offering, we will divide the terms of office of the directors into three classes:

• Class I, whose term will expire at the annual meeting of stockholders to be held in 2010;

• Class II, whose term will expire at the annual meeting of stockholders to be held in 2011; and

• Class III, whose term will expire at the annual meeting of stockholders to be held in 2012.

Upon the closing of this offering, Class I shall consist of Messrs.            and            , Class II shall consist of Messrs.            and            and Class III shall consist of Messrs. ,            and            .

At each annual meeting of stockholders after the initial classification, the successors to directors whose terms then expire will serve from the time of election and qualification until the third annual meeting following election and until their successors are duly elected and qualified. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

Director independence

Currently, our three directors are not considered independent under the applicable provisions of federal securities laws and the rules and regulations of the New York Stock Exchange, or the NYSE, as detailed below:

Director	Reason for lack of independence
Joesley Mendonça Batista	Chief Executive Officer of JBS S.A. and beneficial ownership greater than 5%
Wesley Mendonça Batista	Chief Executive Officer of JBS USA Holdings, Inc. and beneficial ownership greater than 5%
José Batista Júnior	Beneficial ownership greater than 5%

We intend to avail ourselves of the “controlled company” exception under the corporate governance rules of the NYSE. Accordingly, we will not have a majority of independent directors on our board of directors. In accordance with NYSE rules applicable to “controlled companies” such as ours, upon the completion of this offering, we expect that at least one member of our board of directors will be independent. We expect to add another independent director within three months following the completion of this offering and one additional independent director to our board of directors within one year following the completion of this offering.

Committees of the board of directors

Upon the closing of this offering, we will have an audit committee and a compensation committee. As a “controlled company,” we do not expect to have a nominating or corporate governance committee upon the closing of this offering, and we do not intend for our compensation committee to be composed entirely of independent directors.

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Audit committee

The “controlled company” exception does not modify the independence requirements for the audit committee, and upon the completion of this offering our audit committee will composed of at least three members, a majority of whom will be independent within three months from the date of this prospectus and each of whom will be independent within one year from the date of this prospectus. For each individual to be deemed to be independent, our board will determine (a) that there is no relationship with JBS USA Holdings, Inc., or (b) the relationship is immaterial. The board has considered the independence standards of the NYSE.

The composition, duties, and responsibilities of our audit committee are set forth below.

Upon completion of this offering our audit committee will consist of                     (chair), and              .              is an “audit committee financial expert” within the meaning of the rules and regulations of the Securities and Exchange Commission.

The audit committee is responsible for:

• selecting the independent auditor;

• approving the overall scope of the audit;

• discussing the annual audited financial statements and quarterly reviewed financial statements, including matters required to be reviewed under applicable legal and regulatory requirements, with management and the independent auditor;

• discussing earnings press releases and other financial information provided to the public with management and the independent auditor, as appropriate;

• discussing with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response;

• discussing our risk assessment and risk management policies;

• reviewing our financial reporting and accounting standards and principles, significant changes in such standards or principles, and the key accounting decisions affecting our financial statements;

• reviewing and approving the internal corporate audit staff functions;

• reviewing our internal system of audit, financial, and disclosure controls and the results of internal audits;

• annually reviewing the independent auditor’s written report describing the auditing firm’s internal quality-control procedures and any material issues raised by the auditing firm’s internal quality-control review or peer reviews of the auditing firm;

• reviewing and investigating matters pertaining to the integrity of management;

• reviewing and approving all transactions between us and our officers, directors and principal stockholders and their affiliates for potential conflicts of interest;

• establishing procedures concerning the treatment of complaints and concerns regarding accounting, internal accounting controls, or audit matters;

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• meeting separately with management, the corporate audit staff, and the independent auditor;

• handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time; and

• reporting regularly to the full board of directors.

Compensation committee

For fiscal 2008, compensation decisions were made by a committee comprised of Wesley Batista, our chief executive officer, and our head of human resources. Between January 1, 2008 and October 22, 2008, the position of head of human resources was filled by John R. Shandley. From October 23, 2008 through December 28, 2008, that position was held by our current head of human resources, Robert Daubenspeck. Decisions concerning our chief executive officer’s compensation are made by our board of directors.

Upon completion of this offering our compensation committee will consist of              (chair),              and             .

The compensation committee is responsible for:

• reviewing and approving corporate goals and objectives relevant to the compensation of our executives and key management employees;

• annually evaluating our executives’ and key management employees’ performance in light of these goals;

• reviewing and approving the compensation and incentive opportunities of our executives and key management employees;

• reviewing and approving employment contracts, severance arrangements, incentive arrangements, change-in-control arrangements, and other similar arrangements between us and our executives and key management employees;

• receiving periodic reports on our compensation programs as they affect all employees; reviewing executive succession plans for business and staff organizations; and

• handling such other matters that are specifically delegated to the compensation committee by the board of directors from time to time.

On and after the effective date of this offering, the compensation committee shall continue to oversee our executive compensation program on behalf of the board. In the performance of this function, the compensation committee will meet at least quarterly and, among other things, review and discuss with management the compensation discussion and analysis set forth below.

Other committees

Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

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Code of ethics

We have adopted a code of conduct applicable to all employees. In 2002, we adopted a code of ethics specifically applying to our chief executive officer, chief financial officer, chief accounting officer and controller. The code of ethics for such officers reinforces our commitment to:

• deter wrongdoing and promote honest and ethical conduct;

• provide full, fair, accurate, timely, and understandable disclosure in public reports;

• comply with applicable laws;

• ensure prompt internal reporting of code violations; and

• provide accountability for adherence to the code.

The financial code of ethics is available in the investor information section of our website at www.jbsswift.com.

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Compensation discussion and analysis

Overview

This compensation discussion and analysis describes the material elements of compensation paid to our executive officers as well as the objectives and material factors underlying our compensation policies and decisions. The information in this compensation discussion and analysis provides context for the compensation disclosures in the tables and related narrative discussions that follow. When we refer to our named executive officers, we are referring to the five individuals listed in the summary compensation table below.

In designing our executive compensation program, we place significant emphasis on performance. Consequently, a majority of each named executive officer’s total potential compensation is “at risk” and tied to our financial performance. During fiscal 2008, our overall financial performance was above that of recent years. This had the effect of increasing the amount of incentive compensation received by our corporate level executives and by many of the managers of our business units, including our named executive officers. These results were consistent with our fundamental philosophy of paying for performance.

Compensation philosophy and objectives

The primary goal of our executive compensation program is the same as our goal for our overall operations—to maximize corporate performance. To accomplish this goal, our executive compensation program is designed to achieve the following objectives:

• Attracting and retaining top talent.    The compensation of our executives must be competitive with the organizations with which we compete for talent so that we may attract and retain talented and experienced executives. We consider our competitors to be Smithfield Foods, Inc., Tyson Foods Inc., Cargill Inc., Hormel Foods Corporation, Sara Lee Corporation and National Beef Packing Company, LLC, among others in the food, protein and packaged consumer products industries. Our executives have, on average, approximately 15 years of experience with us and our predecessors.

• Paying for performance.    We structure a significant portion of our executives’ compensation to be subject to corporate and business unit performance measures and therefore be “at risk.” Amounts of performance-based compensation can vary widely from year to year depending on an executive’s performance and the volatile nature of our agricultural commodity-based industry. However, in fiscal 2008, our chief executive officer declined to receive performance-based compensation despite our record financial performance. We anticipate developing a performance-based compensation package for our chief executive officer following this offering.

• Alignment with the interests of our shareholders.    We believe that equity-based awards can be an effective means of aligning an executive’s financial interests with those of our shareholders by providing value to the executive only if the market price of our stock increases. While we did not have the ability to provide equity-based awards in fiscal 2008, we intend to adopt a stock-based incentive plan which will become effective immediately prior to this offering. See “2009 stock incentive compensation plan” below.

Each element of our compensation program is designed to achieve one or more of these objectives. The structure of a particular executive’s compensation may vary depending on the

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scope and level of that executive’s responsibilities. For an executive with corporate level responsibilities and qualifications, performance-based compensation is generally based on our consolidated results of operations. In contrast, for an executive responsible for an individual business unit, performance-based compensation historically has been based on a combination of the following: individual behavioral assessment, personal goal achievement, business unit performance and overall consolidated results of operations. Our compensation practices for business unit executives were adopted in recognition of the belief that the efforts of these executives primarily impact the financial performance of the respective units they manage and thus, it is important that compensation be tied directly to the executive’s performance and business unit performance as well as our consolidated results of operations. In addition, beginning in fiscal 2009, these business unit managers are expected to receive an increased proportion of their total compensation in the form of long-term equity incentives, thus providing the managers with incentives tied to our overall operating and share performance.

Determining executive compensation

Our chief executive officer makes recommendations to the compensation committee regarding the amounts of salaries, annual cash incentive payments and, beginning in fiscal 2009, stock-based awards, if any, for key employees, including all other named executive officers. For executive officers, including all other named executive officers, whose annual cash incentive awards are based partly on individual performance, our chief executive officer’s evaluation of the executive officer’s individual performance is provided to and reviewed by the compensation committee. To assist the compensation committee in carrying out its responsibilities, the compensation committee may from time to time retain an independent compensation consultant. The compensation committee also annually reviews executive pay tallies for our executive officers detailing the amount of each element of total compensation and accumulated equity holdings. Based on the foregoing, the compensation committee uses its judgment in making compensation decisions that it believes will best carry out our compensation philosophy and objectives. The board of directors determines our chief executive officer’s compensation based on its evaluation of our chief executive officer’s individual performance and our company’s performance.

Elements of our compensation program

In fiscal 2008, total compensation for our executive officers consisted of the following components:

• base salary;

• annual incentive cash payments;

• additional cash bonuses;

• retirement compensation; and

• perquisites and personal benefits.

All of our named executive officers are employed at-will, without employment agreements, severance payment agreements or payment arrangements that would be triggered by a change of control of us, with the exception of Mr. Dooley, who has a retention agreement with us as described under “Estimated payments upon termination or change of control” below.

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Base salary.    Base salaries are intended to provide a fixed level of compensation sufficient to attract and retain an effective management team when considered in combination with other components of our executive compensation program that are performance-based. The relative levels of base salary for executive officers are designed to reflect each executive officer’s scope of responsibilities and accountability within our company. Base salaries are reviewed annually to determine if they are equitably aligned within our company and are at sufficient levels to attract and retain top talent. Consistent with our greater emphasis on performance-based pay, base salaries for executives are normally changed only on an infrequent basis and may remain the same for several years.

Annual incentive cash payments.    During fiscal 2008, we provided performance-based annual cash incentive compensation opportunities to our named executive officers, excluding our chief executive officer. These awards are based on performance measures that seek to provide a direct link between the company’s and an executive’s performance and the amount of incentive compensation earned.

These awards utilize formulas set by our compensation committee at the beginning of the fiscal year, generally based on the named executive officers’ personal performance goals and our Adjusted EBITDA, the Adjusted EBITDA of a particular subsidiary or business segment, or a combination of the two, depending upon the scope of the executive’s duties. See “Summary historical and pro forma financial data” for the definition of Adjusted EBITDA. The potential payouts of these awards are a percentage of the named executive officer’s base salary, as determined by our compensation committee at the beginning of the fiscal year. The weighting of each of these performance measures and target payout as a percentage of base salary for fiscal 2008 are displayed in the following table for each relevant named executive officer:

	Weighting
Name	Personal goals (%)	Business unit Adjusted EBITDA (%)	Company Adjusted EBITDA (%)	Target payout relative to base salary (%)
André Nogueira de Souza	30	—	70	75
Iain Mars(1)	—	100	—	100
Martin J. Dooley(2)	30	20	50	70
H. Brent Eastwood	30	20	50	100

(1) Australian operations

(2) Pork segment

Under our performance-based annual cash incentive program, if actual business unit or company Adjusted EBITDA performance is below a threshold of 85% of the corresponding target Adjusted EBITDA, no amount is paid out under the financial portion of this program. If at least 85% of target business unit or company Adjusted EBITDA is achieved, 50% of the corresponding target Adjusted EBITDA-based annual cash incentive is payable. If actual business unit or company Adjusted EBITDA performance is between the corresponding threshold and target Adjusted EBITDA, the remaining 50% of the Adjusted EBITDA-based annual cash incentive that is payable is determined on a linear basis based on the extent to which actual performance exceeds 85%, and is less than 100%, of the target Adjusted EBITDA. If actual performance equals target business unit or company Adjusted EBITDA, 100% of the corresponding Adjusted EBITDA-based

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annual cash incentive is payable. If actual business unit or company Adjusted EBITDA performance exceeds 100% of the corresponding target Adjusted EBITDA, the Adjusted EBITDA-based annual cash incentive payable exceeds the targeted payout in the same proportion as actual performance exceeds target Adjusted EBITDA. There is no limit on the maximum business unit or company Adjusted EBITDA-based annual cash incentive payable as described above. The compensation committee may, in its discretion, pay bonuses in excess of the amount determined by the formula under the incentive program. See “Additional cash bonuses” below. If a named executive officer’s personal performance goals are not satisfied, then his annual cash incentive payout is reduced by his personal performance goals weighting percentage (shown in the table above). On the other hand, if a named executive officer’s personal performance goals are met or exceeded, then the target payout based on personal performance goals is paid out.

Financial goals are the same objectives set forth in our internally developed corporate budget. For fiscal 2008, our target Adjusted EBITDA was $285 million, and our actual Adjusted EBITDA was $398.2 million, or 140% of target. Business unit Adjusted EBITDA for each subsidiary or business segment is typically set at very challenging levels. In four of our last five fiscal years, budgeted company and business unit financial performance goals were not met. Personal performance goals are intended to add economic value and to align each executive officer’s compensation with expectations of leadership and achievement placed on the executive officer to realize various aspects of our business plan. Personal performance goals are set so that the full amount of the annual cash incentive with respect to these goals may only be attained through superior performance. For fiscal 2008, personal goals of our named executive officers related to cost reduction efforts, productivity (yield and throughput increases), improved employee satisfaction and organizational leadership. A named executive officer’s actual performance against his personal performance goals is determined by our compensation committee based on its subjective evaluation of the named executive officer’s performance.

The potential payouts under the named executive officers’ annual cash incentive awards are displayed in the “Grants of plan-based awards table” below. In February 2009, the compensation committee evaluated performance against the relevant performance goals and determined the amount of annual cash incentive payment made to each of our named executive officers (other than our chief executive officer). Each such named executive officer achieved his personal performance goals and achieved or exceeded relevant business unit and company Adjusted EBITDA targets. The actual amount of annual cash incentive payment made to each named executive officer is displayed in the “Non-equity incentive plan compensation” column of the summary compensation table below.

Additional cash bonuses.    We paid additional cash bonuses to Messrs. Nogueira and Dooley with respect to fiscal 2008 in amounts the compensation committee determined, in its discretion, to be appropriate to reward elements of performance that were not reflected in the annual incentive awards and in light of our outstanding financial performance during fiscal 2008. These additional cash bonuses are shown in the “Bonus” column of the summary compensation table below. Mr. Nogueira received a discretionary bonus of $200,000 at the sole discretion of our compensation committee. In connection with the Swift Acquisition in July 2007, we entered into employee retention agreements with key members of management, including Mr. Dooley. Under the terms of his agreement, during fiscal 2008, he was paid the second installment of $318,750. The remaining $200,000 reported in the “Bonus” column of the summary compensation table for Mr. Dooley represents the discretionary component of his annual cash incentive, as determined by our compensation committee.

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Retirement compensation.    Our named executive officers participate in the same retirement plans on the same terms as provided to most of our salaried employees. In the United States, this plan is a tax-qualified employee-funded 401(k) savings plan with employer matching contributions. Participation in this plan is voluntary. Therefore, the amount of compensation deferred and the amount of our matching contribution varies among employees, including our named executive officers. However, the same formulas are used to determine benefits for all participants in this plan. We also contribute to a superannuation plan on behalf of Mr. Mars (who is not eligible to participate in our 401(k) savings plan). These plans do not involve any above-market returns, as returns depend on actual investment results.

Perquisites and personal benefits.    We provide a limited number of perquisites to our executive officers, including our named executive officers. The summary compensation table below contains an itemized disclosure of all perquisites to our named executive officers, regardless of amount. We believe that these minimal perquisites are reasonable and consistent with those paid to other executives in our industry. Providing these perquisites helps to keep our base compensation packages competitive. Although we do not typically provide our executives with tax gross-ups, in fiscal 2008, we provided Mr. Eastwood with a tax gross-up for the company’s reimbursement of certain relocation expenses incurred by him to relocate to Greeley, Colorado in connection with his commencement of employment with us.

We also provide certain benefits to substantially all salaried employees that are not included as perquisites in the summary compensation table for the named executive officers because they are broadly available. These include health and welfare benefits, disability and life insurance, education and tuition reimbursement and an employee assistance program.

Future equity incentive awards.    Historically, we have not provided long-term incentive compensation in the form of stock options. Beginning on the completion date of this offering, however, we anticipate providing long-term incentive compensation to our named executive officers and other select employees in the form of stock-based awards under our 2009 Stock Incentive Compensation Plan, or the 2009 Plan, the material terms of which are summarized below under “2009 stock incentive compensation plan.” We believe that stock-based compensation can serve as an effective motivational tool by aligning an executive’s economic interests with those of our shareholders. We anticipate providing stock-based awards with terms and conditions that promote long-term tenure and encourage long-term strategic decision-making by our executive officers. We also anticipate that stock-based compensation will constitute a larger percentage of total compensation for corporate level executives than for business unit management because a business unit manager has less involvement in the performance of other business units which impact overall results and indirectly impact the market price of our common stock.

We anticipate that our chief executive officer will recommend to the compensation committee the recipients and sizes of stock-based awards, and the board of directors will determine the size of stock-based awards to be granted to our chief executive officer. In evaluating these recommendations, and in determining the size of stock-based awards for our chief executive officer, we anticipate that the compensation committee and the board of directors, as applicable, will consider a number of factors, including but not limited to:

• the level of incentive already provided to the recipient by the size of prior grants or existing holdings of common stock;

• whether the recipient’s responsibilities involve company-wide strategic decision-making and

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• the compensation committee’s subjective evaluation of the recipient’s potential contribution to our future success.

As of the closing of this offering, we intend to grant shares of restricted stock under the 2009 Plan to the following named executive officers in the following amounts:

Name Number of shares

We anticipate that these restricted stock awards will generally vest at the rate of one-third per year of service following the grant date.

Summary compensation table

The following table includes information concerning compensation paid to or earned by our named executive officers listed in the table for the fiscal year ended December 28, 2008.

Name and principal position(1)	Salary ($)	Bonus(2) ($)	Non-equity incentive plan compensation(3) ($)	All other compensation(4) ($)	Total ($)
Wesley M. Batista(5)	1,126,395	—	—	84,437	1,210,832
President, Chief executive officer and director
André Nogueira de Souza(6)	379,922	200,000	300,000	200,568	1,080,490
Chief financial officer
Iain Mars(7)	229,641	—	850,514	218,208	1,298,363
Head of Australia
Martin J. Dooley(8)	406,010	518,750	300,000	14,110	1,238,870
Head of Pork
H. Brent Eastwood(9)	259,615	—	275,000	160,994	695,609
Head of JBS Trading

(1) The principal position listed in the table for each named executive officer was such individual’s title during fiscal 2008.

(2) Represents cash bonuses received by each of Messrs. Nogueira and Dooley, as described under “Compensation discussion and analysis—Additional cash bonuses” above.

(3) Represents annual incentive cash payments described in more detail under “Compensation discussion and analysis—Annual incentive cash payments” above.

(4) The following table includes information concerning amounts reported in the All other compensation column of the summary compensation table above.

Name and principal position	Relocation expenses (a) ($)	Tax gross- up (b) ($)	Contributions to retirement plan (c) ($)	Company aircraft (d) ($)	Company leased automobile (e) ($)	Company leased residence (f) ($)	Excess life insurance (g) ($)	Total ($)
Wesley M. Batista	65,448	—	—	18,989	—	—	—	84,837
André Nogueira de Souza	200,000	—	—	—	—	—	568	200,568
Iain Mars	—	—	68,178	—	86,358	63,672	—	218,208
Martin J. Dooley	—	—	11,500	—	—	—	2,610	14,110
H. Brent Eastwood	148,754	12,240	—	—	—	—	—	160,994

The value of perquisites and other personal benefits and other compensation is based on the estimated incremental cost to us, for the following:

(a) reimbursement of relocation expenses,

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(b) tax gross-up on reimbursement of relocation expenses for Mr. Eastwood,

(c) company contributions to 401(k) plan (or, in the case of Mr. Mars, to superannuation plan),

(d) personal use of company aircraft, the direct cost per flight hour as calculated from our records for company-owned aircraft or as billed by third parties for chartered aircraft,

(e) for company-leased automobiles, 100% of the lease cost, repairs, maintenance and fees,

(f) for personal use of the company-leased residence, the average daily cost of maintaining the residence multiplied by the number of days used for personal purposes, and

(g) for excess life insurance (i.e., having a face amount of coverage in excess of $50,000), the amount of premiums paid by us, on behalf of the executive.

(5) Mr. Batista served as President and Chief Executive Officer from December 31, 2007 to December 28, 2008. Included in the salary above is salary in the amount of $419,000 paid by JBS S.A. from December 31, 2007 to February 15, 2008.

(6) As an employee of JBS S.A. in Brazil, Mr. Nogueira provided financial oversight for JBS S.A. from December 31, 2007 through September 30, 2008. On October 1, 2008, Mr. Nogueira transferred to JBS USA Holdings, Inc. and served as our Chief Financial Officer through December 28, 2008. Included in Mr. Nogueira’s salary above is salary in the amount of $263,000 paid by JBS S.A. from December 31, 2007 to September 30, 2008.

(7) Mr. Mars served as the Head of Australia from December 31, 2007 to December 28, 2008. For purposes of computation, the exchange rate used was based on the calendar 2008 average U.S. dollar to Australian dollar exchange rate of .8369.

(8) Mr. Dooley served as the Head of Pork from December 31, 2007 to December 28, 2008.

(9) Mr. Eastwood served as the Head of JBS Trading from December 31, 2007 to December 28, 2008.

Grants of plan-based awards

The following table includes information concerning grants of plan-based awards made to our named executive officers listed in the table during the fiscal year ended December 28, 2008.

	Estimated future payouts under non-equity incentive plan awards
Name and principal position	Threshold(1) ($)	Target ($)	Maximum ($)
Wesley M. Batista	N/A	N/A	N/A
André Nogueira de Souza	150,000	300,000	N/A
Iain Mars	192,500	385,000	N/A
Martin J. Dooley	131,250	262,500	N/A
H. Brent Eastwood	137,500	275,000	N/A

(1) There is no threshold with respect to the payout amount based on personal performance goals under our performance-based annual cash incentive program. As such, these amounts assume that a named executive officer met his personal performance goals and that the target payout based on personal performance is paid out. See “Compensation discussion and analysis—Annual incentive cash payments”.

Estimated payments upon termination or change of control.

On July 11, 2007, we entered into a retention agreement with Mr. Dooley. If Mr. Dooley’s employment was terminated by us without cause on December 28, 2008, the last day of fiscal 2008, he would have received a cash severance payment in the amount of $673,500 under this retention agreement. No other named executive officer would have received any payments or benefits in connection with termination of their employment or a change of control of us had the triggering event occurred on December 28, 2008.

Director compensation

During fiscal 2008, our directors received no compensation for attending our board of directors’ meetings. However, after the completion of this offering, we anticipate that we will institute a director compensation program for our non-employee directors which will compensate them for attending meetings in person or telephonically and serving on committees of the board of directors.

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The following table includes information concerning compensation paid to or earned by our directors listed in the table for the fiscal year ended December 28, 2008.

Name and principal position	Fees earned or paid in cash ($)	Non-equity incentive plan compensation ($)	All other compensation(1) ($)	Total ($)
José Batista Júnior	—	—	709,115	709,115
Director
Joesley Mendonça Batista	—	—	—	—
Director

(1) Mr. José Batista Júnior received the compensation reflected above for his services as an employee of JBS USA, LLC. This amount includes: $646,150 paid as cash compensation, $59,250 paid to reimburse relocation expenses and $3,715 related to insurance premiums paid by us.

2009 stock incentive compensation plan

Prior to the closing of this offering, we intend to adopt the JBS USA, Inc. 2009 Stock Incentive Compensation Plan, or the “2009 Plan”, which will become effective immediately prior to this offering. The 2009 Plan is intended to further our success by increasing the ownership interest of certain of our employees and directors in our company and to enhance our ability to attract and retain employees and directors. This is a summary of the 2009 Plan. You should read the text of the 2009 Plan filed as an exhibit to the registration statement of which this prospectus is part for a full statement of the terms and provisions of the 2009 Plan.

We may issue up to              shares of our common stock, subject to adjustment if particular capital changes affect the common stock, upon the exercise or settlement of stock options, stock appreciation rights (“SARs”), restricted stock awards, restricted stock units, performance unit awards, performance share awards, cash-based awards and other stock-based awards granted under the 2009 Plan. The shares of common stock that may be issued under the 2009 Plan may be either authorized and unissued shares or previously issued shares held as treasury stock.

A stock option is the right to purchase a specified number of shares of common stock in the future at a specified exercise price and subject to the other terms and conditions specified in the option agreement and the 2009 Plan. Any stock options granted under the 2009 Plan are either “incentive stock options,” which may be eligible for special tax treatment under the Internal Revenue Code of 1986, or options other than incentive stock options (referred to as “nonqualified stock options”), as determined by the compensation committee and stated in the option agreement. The exercise price of each option granted under the 2009 Plan is equal to or greater than the fair market value of our common stock on the option grant date, with certain limited exceptions for options granted in exchange for other outstanding awards in connection with a corporate transaction. The exercise price of any stock options granted under the 2009 Plan may be paid in cash, a cashless broker-assisted exercise that complies with law, withholding of shares otherwise deliverable upon exercise or any other method permitted by law and approved by the compensation committee.

SARs may be granted under the 2009 Plan alone or together with specific stock options granted under the 2009 Plan. SARs are awards that, upon their exercise, give a participant the right to receive from us an amount equal to (1) the number of shares for which the SAR is exercised, multiplied by (2) the excess of the fair market value of a share of the common stock on the

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exercise date over the grant price of the SAR. The grant price of each SAR granted under the 2009 Plan is equal to or greater than the fair market value of our common stock on the SAR’s grant date, with certain limited exceptions for SARs granted under the 2009 Plan in exchange for other outstanding awards in connection with a corporate transaction. A SAR may be settled in cash, shares or a combination of cash and shares, as determined by the compensation committee. If an option and a SAR are granted in tandem, the option and the SAR may become exercisable and will terminate at the same time, but the holder may exercise only the option or the SAR, but not both, for a given number of shares.

Restricted stock awards are shares of common stock that are awarded to a participant subject to the satisfaction of terms and conditions established by the compensation committee. Until such time as the applicable restrictions lapse, shares of restricted stock are subject to forfeiture and may not be sold, assigned, pledged or otherwise disposed of by the participant who holds those shares. Restricted stock units are denominated in units of shares of common stock, except that no shares are actually issued to the participant on the grant date. When a restricted stock unit award vests, the participant is entitled to receive shares of common stock, a cash payment based on the value of shares of common stock or a combination of shares and cash.

Performance units, performance shares and cash-based awards entitle the recipient to receive shares of common stock or a cash payment if performance goals and other conditions specified by the compensation committee are attained. Other stock-based awards are stock-based or stock-related awards payable in common stock or cash on terms and conditions set by the compensation committee and may include a grant or sale of unrestricted shares of common stock. The compensation committee may provide for the payment of dividend equivalents with respect to shares of common stock subject to an award, such as restricted stock units, that have not actually been issued under that award.

The compensation committee administers the 2009 Plan. The board of directors may, subject to any legal limitations, exercise any powers or duties of the compensation committee concerning the 2009 Plan. The compensation committee will select eligible employees, directors and/or consultants of us and our subsidiaries or affiliates to receive awards under the 2009 Plan and will determine the sizes and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards.

Holders of options, SARs, unvested restricted stock and other awards may not transfer those awards, unless they die or, except in the case of incentive stock options, the compensation committee determines otherwise.

A change of control of us (as defined in the 2009 Plan) will have no effect on outstanding awards under the 2009 Plan that the board of directors or the compensation committee determines will be honored or assumed or replaced with new rights by a new employer so long as any such alternative award is substantially equivalent to the outstanding award and has certain terms that appropriately protect the holder of the award, as determined under criteria set forth in the 2009 Plan. If the board of directors or the compensation committee does not make this determination with respect to any outstanding awards, then (a) the awards will fully vest and, if applicable, become fully exercisable and will be settled in cash and/or publicly traded securities of the new employer, generally based on the fair market value of our common stock on the change of control date, in the case of options or SARs, reduced by the exercise or grant price of the option or SAR, or the price per share offered for our common stock in the change of control transaction, or, in some cases, the highest fair market value of the common stock during the 30 trading days

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preceding the change of control date, in the case of restricted stock, restricted stock units and any other awards denominated in shares, (b) the target performance goals applicable to any outstanding awards will be deemed to be fully attained, unless actual performance exceeds the target, in which case actual performance will be used, for the entire performance period then outstanding; and (c) the board of directors or the compensation committee may otherwise adjust or settle outstanding awards as it deems appropriate, consistent with the plan’s purposes.

In the event of a change in our capital structure or a corporate transaction, the compensation committee or the board of directors will make substitutions or adjustments that it deems appropriate and equitable to the securities available under the 2009 Incentive Plan and outstanding awards, the exercise or other prices of securities subject to outstanding awards and other terms and conditions of outstanding awards, such as cancellation of outstanding awards in exchange for payments of cash and/or property or substitution of stock of another company for shares of our common stock subject to outstanding awards. The compensation committee will also make appropriate adjustments and modifications in the terms of any outstanding awards to reflect, or related to, any such events, adjustments, substitutions or changes, including modifications of performance goals and changes in the length of performance periods.

Subject to particular limitations specified in the 2009 Plan, the board of directors may amend or terminate the 2009 Plan, and the compensation committee may amend awards outstanding under the 2009 Plan. The 2009 Plan will continue in effect until all shares of the common stock available under the 2009 Plan are delivered and all restrictions on those shares have lapsed, unless the 2009 Plan is terminated earlier by the board of directors. No awards may be granted under the 2009 Plan on or after the tenth anniversary of the date of this offering.

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Certain relationships and related party transactions

Relationship with JBS S.A.

Controlling interest

Before this offering, all of our outstanding shares of common stock were owned by JBS Hungary Holdings Kft., the selling stockholder and a wholly owned, indirect subsidiary of JBS S.A. After completion of this offering, the selling stockholder will own approximately     % of the outstanding shares of our common stock, or     % if the international underwriters exercise their over-allotment option in full. JBS S.A. has advised us that its current intent is to continue to retain, through the selling stockholder, at least 50.1% of the equity interest in us following this offering for the foreseeable future. The selling stockholder is not subject to any contractual obligation to retain its controlling interest in us, except that the selling stockholder has agreed, subject to exceptions described in “Underwriting”, not to sell or otherwise dispose of any of our shares of common stock for a period of 180 days after the date of this prospectus without the prior written consent of the representatives of the underwriters. Any shares of common stock issued pursuant to the international underwriters’ over-allotment option will increase the total number of shares outstanding after this offering.

As our controlling stockholder after this offering, JBS S.A., through the selling stockholder, will continue to exercise significant influence over our business policies and affairs, including the composition of our board of directors and any action requiring the approval of our stockholders. See “Risk factors—We will be a “controlled company” within the meaning of the NYSE rules, and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies” and “—We are controlled by JBS S.A., which is a publicly traded company in Brazil, whose interest in our business may be different than yours.”

In the subsection entitled “Business—Description of business segments—Beef segment—Global exports,” we describe the reasons why we do not believe JBS S.A. is currently a significant competitor of our Beef segment.

The following is a description of transactions since July 11, 2007 in which we have been a participant, in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers, beneficial holders of more than 5% of our capital stock, immediate family members or entities affiliated with them, had or will have a direct or indirect material interest.

We have not included a description of related party transactions prior to July 11, 2007 because the related party transactions that took place prior to this date involved our predecessor company and its affiliates, and we do not believe this information is meaningful to investors.

Guarantee of JBS S.A. debt

We, together with our subsidiaries, JBS USA, LLC and Swift Beef Company, guarantee on an unsecured basis, $300.0 million of the 10.5% notes due 2016 issued by JBS S.A. as a result of a covenant contained in the indenture governing these notes. Additional subsidiaries of JBS Holdings, Inc. may be required to guarantee these notes of JBS S.A. See “External sources of liquidity and description of indebtedness—Guarantee of 10.50% senior notes due 2016 of JBS S.A.”

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Our ability to use JBS S.A.’s brokerage account in Brazil

We and JBS S.A. are party to a financial agreement pursuant to which JBS S.A. granted us the ability to use one of JBS S.A.’s brokerage accounts in Brazil, enabling us to take a currency position in a market we cannot reasonably access from the United States in a timely manner. Under the agreement, the outstanding amounts of the intercompany loan agreements executed between the parties will be increased to reflect any losses and will be offset by any gains. In case of loss, the amounts of such loss shall be increased to the outstanding amounts of such intercompany loans.

Intercompany loans owed by JBS USA Holdings, Inc. to a subsidiary of JBS S.A.

As of March 29, 2009, we owed an aggregate of $658.6 million under various intercompany loans from JBS S.A., which were subsequently assigned to JBS HU Liquidity Management LLC (Hungary), a wholly owned, indirect subsidiary of JBS S.A. The proceeds of these intercompany loans were used to fund our operations and the Tasman Acquisition and the JBS Packerland Acquisition. On April 27, 2009, these intercompany loan agreements were consolidated into one loan agreement, and the maturity dates of the principal of the intercompany loans was extended to April 18, 2019, and the interest rate was changed to 12% per annum. The net proceeds of the offering and sale of our 11.625% senior unsecured notes due 2014 (other than $100.0 million) were applied to the repayment of accrued interest and a portion of the principal on these intercompany loans. As of May 31, 2009, we owed an aggregate principal amount of $133.0 million under the consolidated intercompany loan agreement. In addition, we recently entered into an additional intercompany term loan agreement in the aggregate principal amount of $6.0 million under the same terms as the consolidated intercompany loan agreement.

Arrangements with J&F Oklahoma

Cattle supply and feeding agreement.    Five Rivers is party to a cattle supply and feeding agreement with our affiliate J&F Oklahoma Holdings Inc., or J&F Oklahoma. J&F Oklahoma is a wholly owned subsidiary of J&F Participacoes S.A., which is owned in equal shares by the six children of José Batista Sobrinho (the founder of JBS S.A.) and Mr. Sobrinho. Pursuant to the agreement, Five Rivers feeds and takes care of cattle owned by J&F Oklahoma. J&F Oklahoma pays Five Rivers for the cost of feed and medicine at cost plus a yardage fee on a per head per day basis. Beginning on June 23, 2009 or such earlier date on which Five Rivers’ feedlots are at least 85% full of cattle and ending on October 23, 2011, J&F Oklahoma agrees to maintain sufficient cattle on Five Rivers’ feedlots so that such feedlots are at least 85% full of cattle at all times. The agreement commenced on October 23, 2008 and continues until the last of the cattle on Five Rivers’ feedlots as of October 23, 2011 are shipped to J&F Oklahoma, a packer or another third party.

Cattle purchase and sale agreement.    JBS USA, LLC is party to a cattle purchase and sale agreement with J&F Oklahoma. Under this agreement, J&F Oklahoma agrees to sell to JBS USA, LLC, and JBS USA, LLC agrees to purchase from J&F Oklahoma, at least 500,000 cattle during each year from 2009 through 2011. The price paid by JBS USA, LLC is determined pursuant to JBS USA, LLC’s pricing grid as in effect on the date of delivery. The grid used for J&F Oklahoma is identical to the grid used for unrelated third parties. If the cattle sold by J&F Oklahoma in a quarter result in a breakeven loss (selling price below accumulated cost to acquire the feeder animal and fatten it to delivered weight), then JBS USA, LLC will reimburse 40% of the average per head breakeven

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loss incurred by J&F Oklahoma on up to 125,000 head delivered to JBS USA, LLC in that quarter. If the cattle sold by J&F Oklahoma in a quarter result in a breakeven gain (selling price above the accumulated cost to acquire the feeder animal and fatten it to delivered weight), then JBS USA, LLC will receive from J&F Oklahoma an amount of cash equal to 40% of that per head gain on up to 125,000 head delivered to JBS USA, LLC in that quarter.

Guarantee of J&F Oklahoma revolving credit facility.    J&F Oklahoma has a $600.0 million secured revolving credit facility with a commercial bank. Its parent company, J&F Participacoes S.A., has entered into a keepwell agreement with J&F Oklahoma whereby it will make contributions to J&F Oklahoma if J&F Oklahoma is not in compliance with its financial covenants under this credit facility. If J&F Oklahoma defaults on its obligations under this credit facility and such default is not cured by J&F Participações S.A. under the keepwell agreement, Five Rivers is obligated to pay up to $250.0 million of the obligations under this credit facility. This credit facility is available for revolving loans and letters of credit. Borrowings under this credit facility accrue interest at a per annum rate of LIBOR plus 2.25% or base rate plus 1.00%, and interest is payable at least quarterly. Commitment fees of 0.45% per annum accrue on unused commitments. This credit facility matures on October 7, 2011. This credit facility and the guarantees thereof are secured by the assets of J&F Oklahoma and, in the case of Five Rivers, they are secured by and limited to the lesser of $250 million or the net assets of Five Rivers, including loans made pursuant to the credit facility discussed below. This credit facility is used to finance the procurement of cattle by J&F Oklahoma, which are then fed in the Five Rivers feedlots pursuant to the cattle supply and feeding agreement described above. The finished cattle are sold to JBS USA, LLC pursuant to the cattle purchase and sale agreement described above.

Credit facility to J&F Oklahoma.    Five Rivers is party to an agreement with J&F Oklahoma, pursuant to which Five Rivers has agreed to loan up to $200.0 million in revolving loans to J&F Oklahoma. The loans are used by J&F Oklahoma to acquire feeder animals which are placed in Five Rivers feedlots for finishing. Borrowings accrue interest at a per annum rate of LIBOR plus 2.25% or base rate plus 1.00%, and interest is payable at least quarterly. This credit facility matures on October 7, 2011. During the period from October 23, 2008 (when Five Rivers was acquired) through December 28, 2008, average borrowings were approximately $131.0 million, and total interest accrued was approximately $663,000 and was recognized in interest income on the statement of operations. As of March 29, 2009, the aggregate outstanding balance of the loan was $171.4 million, including accrued interest of $40,000.

Loan to executive officer

On April 24, 2009, we made a loan to an executive officer in the amount of $235,000. This loan was made as a form of retention bonus. Interest on this loan accrues at a rate of 5.25% per annum and is payable annually. The principal amount of this loan is payable in four equal annual installments, beginning on April 23, 2010. We have agreed to forgive the principal and interest on this loan contingent upon the executive officer remaining employed by us for a specified period of time, and these amounts will be accounted for as taxable income to the executive officer. In addition, if the executive officer ceases to be our employee under certain circumstances, including termination by us without cause, all remaining amounts under this loan will be forgiven. If the executive officer is terminated for cause, the loan will be accelerated and the executive officer must pay accrued and unpaid interest.

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Other related party transactions

We enter into transactions in the normal course of our business with affiliates of JBS S.A. Sales to affiliated companies included in the net sales in the statement of operations for the thirteen weeks ended March 30, 2008 and March 29, 2009 were $5.4 million and $109.4 million, respectively. These transactions primarily consist of sales of our products to JBS S.A. and its subsidiaries (other than ourselves) in individually negotiated transactions at prevailing market prices. Amounts owed to us by affiliates as of March 30, 2008 and March 29, 2009 totaled approximately $5.8 million and $219.4 million, respectively.

Purchases from affiliated companies included in the statement of operations for the thirteen weeks ended March 30, 2008 and March 29, 2009 were $0.4 million and $16,600, respectively. No amounts were due to affiliates by us at March 29, 2009 related to these purchases.

We had a $50,000 receivable from an executive officer at March 29, 2009. On April 28, 2009, the executive officer repaid the amount in full.

For the fiscal quarter ended March 30, 2008, we recorded $22,000 of rental income related to real property that we leased to two of our executive officers. At March 29, 2009, we had no rental income related to these real estate transactions.

Policies and procedures for related party transactions

Our audit committee is expected to review and approve in advance any related party transaction. All of our directors, officers and employees will be required to report to the audit committee any related party transaction prior to entering into the transaction. See “Management—Committees of the board of directors—Audit committee.”

It is our intention to ensure that all future transactions between us and our officers, directors and principal stockholders and their affiliates are approved by the audit committee of our board of directors, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties.

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Principal and selling stockholder

Before this offering, all of the outstanding shares of our common stock were owned beneficially and of record by JBS Hungary Holdings Kft., the selling stockholder and a wholly owned, indirect subsidiary of JBS S.A. The following table sets forth information regarding beneficial ownership of our common stock as of March 29, 2009, and as adjusted to reflect the shares of common stock to be issued and sold in this offering assuming no exercise of the international underwriters’ and the Brazilian underwriters’ option to purchase additional shares, by:

• each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock;

• each of our named executive officers;

• each of our directors;

• all executive officers and directors as a group; and

• our selling stockholder.

Beneficial ownership in this table is determined in accordance with the rules of the SEC and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of options held by the respective person or group that may be exercised within 60 days after March 29, 2009. For purposes of calculating each person’s or group’s percentage ownership, stock options exercisable within 60 days after March 29, 2009 are included for that person or group but not the stock options of any other person or group. This table does not reflect any shares of common stock that our directors and executive officers may purchase in this offering, including through the directed share program described in “Underwriting”.

Percentage of beneficial ownership is based on 100 shares of common stock outstanding as of March 29, 2009 (without giving effect to the stock split to occur immediately prior to completion of this offering) and              shares of common stock outstanding after completion of this offering.

Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed, except for those jointly owned with that person’s spouse. Beneficial ownership representing less than 1% is denoted with an asterisk (*).

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The address of each director and executive officer shown in the table below is c/o JBS USA Holdings, Inc., 1770 Promontory Circle, Greeley, Colorado 80634.

Name and address of beneficial owner	Shares of common stock beneficially owned before this offering		Number of shares being offered	Shares of common stock beneficially owned after this offering		Percent of class beneficially owned assuming exercise of the international underwriters’ over- allotment option
	Number	Percentage		Number	Percentage
Principal shareholder
JBS S.A.(1)	100	100%			%	%
Directors and named executive officers					%	%
Wesley Mendonça Batista(1)		%			%	%
Joesley Mendonça Batista(1)		%			%	%
José Batista Júnior(1)		%			%	%
André Nogueira de Souza	—	—			%	%
Iain Mars	—	—			%	%
Martin J. Dooley	—	—			%	%
H. Brent Eastwood	—	—			%	%
All directors and executive officers as a group		%			%	%

(1) We are a wholly owned subsidiary of JBS Hungary Holdings Kft., the selling stockholder and a wholly owned, indirect subsidiary of JBS S.A. JBS S.A. is ultimately controlled by the Batista family, which is comprised of José Batista Sobrinho, the founder of JBS S.A., Flora Mendonça Batista, and their six children, José Batista Júnior, Valéria Batista Mendonça Ramos, Vanessa Mendonça Batista, Wesley Mendonça Batista, Joesley Mendonça Batista and Vivianne Mendonça Batista. The Batista family indirectly owns 100.0% of the issued and outstanding shares of J&F Participações S.A., a Brazilian corporation which owns 44.0% of the outstanding capital of JBS S.A., and, except for Mr. José Batista Sobrinho and Mrs. Flora Mendonça Batista, directly owns 100% of the equity interests in ZMF Fundo de Investimento em Participações, a Brazilian investment fund which owns 6.1% of the outstanding capital of JBS S.A. Wesley Mendonça Batista, Joesley Mendonça Batista and José Batista Júnior are members of our board of directors. Through J&F Participações S.A. and ZMF Fundo de Investimento em Participações, Wesley Mendonça Batista, Joesley Mendonça Batista and José Batista Júnior each benefically own              shares of our common stock.

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The following table sets forth the principal holders of JBS S.A.’s outstanding common shares and their respective shareholding, as of March 29, 2009:

		As of March 29, 2009
Shareholders	Address	Number of Common Shares	Percentage
J&F Participações S.A.(a)	Av. Brigadeiro Faria Lima, 2,391, 2nd Floor 01452-000, São Paulo, SP Brazil	632,781,603	44.0%
ZMF Fundo de Investimento em Participações(b)	Praia de Botafogo, 501, 5th Floor Rio de Janeiro, RJ Brazil	87,903,348	6.1%
PROT FIP(c)	Ave. Presidente Wilson, 231 11th Floor Rio de Janeiro, RJ Brazil	205,365,101	14.3%
BNDESPAR(d)	Av. República de Chile, 100 20031-917, Rio de Janeiro, RJ Brazil	186,891,800	13.0%
Other public minority shareholders (as a group)		287,996,774	20.0%
Treasury shares		37,140,300	2.6%
Total		1,438,078,926	100.0%

(a) J&F Participações S.A. is a Brazilian corporation which owns 44.0% of the total capital of JBS S.A. The members of the Batista family (José Batista Sobrinho and Flora Mendonça Batista, and their six children José Batista Júnior, Valéria Batista Mendonça Ramos, Vanessa Mendonça Batista, Wesley Mendonça Batista, Joesley Mendonça Batista and Vivianne Mendonça Batista) indirectly, through several holding companies, own 100.0% of the issued and outstanding shares of J&F Participações S.A.

(b) ZMF Fundo de Investimento em Participações is a Brazilian investment fund which owns 6.1% of the total capital of JBS S.A. The Batista family (except for Mr. José Batista Sobrinho and Mrs. Flora Mendonça Batista) owns 100% of the equity interests in ZMF Fundo de Investimento em Participações.

(c) PROT Fundo de Investimento em Participações is a Brazilian equity investment fund.

(d) BNDES Participações S.A.—BNDESPAR, is a subsidiary of Banco Nacional de Desenvolvimento Económico e Social, Brazil’s national development bank. BNDESPAR invests, and owns equity interests, in Brazilian companies, including JBS S.A.

There are no current arrangements which will result in a change of control.

JBS S.A. investment and shareholders’ agreements

On March 18, 2008, BNDES Participações S.A., or BNDESPar, PROT—Fundo de Investimento em Participações, or PROT, J&F Participações S.A., or J&F, and ZMF Fundo de Investimento em Participações, or ZMF, entered into an investment agreement with JBS S.A. as intervening and consenting party, or the JBS investment agreement. Pursuant to the JBS investment agreement, BNDESPAR, PROT, J&F and ZMF agreed to make capital contributions to JBS S.A. in the amount of up to R$2,550.0 million. The terms of the investment agreement also required PROT, J&F and ZMF to enter into a shareholders’ agreement to govern their relationship as shareholders of JBS S.A. The parties entered into this shareholders’ agreement on July 8, 2008. Under the terms of the shareholders’ agreement, each of the parties has agreed, among other things, that without the prior approval of PROT, J&F and ZMF will not exercise their power to vote to:

• modify the bylaws of JBS S.A. to make the permanent audit committee of JBS S.A. non-permanent;

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• modify the bylaws of JBS S.A. to remove the provisions regarding the disclosure and availability of related party contracts, shareholders’ agreements or stock option plans;

• restrict in any way PROT’s right to elect and maintain one member on the board of directors for as long as PROT holds greater than 10% of the capital stock of JBS S.A.; and

• incur additional indebtedness in the event Net Debt/EBITDA would be greater than a specified level.

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Description of capital stock

General

Upon the closing of this offering, our authorized capital stock will consist of              shares of common stock, par value $0.01 per share, and              shares of undesignated preferred stock, par value $0.01 per share. Immediately following the completion of this offering, an aggregate of              shares of common stock will be issued and outstanding and no shares of preferred stock will be issued and outstanding. As of the date of this prospectus, JBS Hungary Holdings Kft., the selling stockholder, was the sole record holder of our common stock. All outstanding shares of our common stock will be legally issued, fully paid and non-assessable.

The following description of the material provisions of our capital stock and our amended and restated certificate of incorporation, amended and restated bylaws and other agreements with and among our stockholders is only a summary, does not purport to be complete and is qualified by applicable law and the full provisions of our amended and restated certificate of incorporation, amended and restated bylaws and other agreements. You should refer to our amended and restated certificate of incorporation, amended and restated bylaws and related agreements as in effect upon the closing of this offering, which will be included as exhibits to the registration statement of which this prospectus is a part.

Common stock

Voting.    The holders of our common stock are entitled to one vote for each outstanding share of common stock owned by that stockholder on every matter properly submitted to the stockholders for their vote. Stockholders are not entitled to vote cumulatively for the election of directors.

Dividend rights.    Subject to the dividend rights of the holders of any outstanding series of preferred stock, holders of our common stock are entitled to receive ratably such dividends and other distributions of cash or any other right or property as may be declared by our board of directors out of our assets or funds legally available for such dividends or distributions. See “Dividend policy.”

Liquidation rights.    In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our common stock are entitled to share ratably in our assets that are legally available for distribution to stockholders after payment of liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our common stock.

Undesignated preferred stock

Our amended and restated certificate of incorporation will authorize our board of directors, subject to limitations prescribed by law, to issue up to              shares of undesignated preferred stock in one or more series without further stockholder approval. The board will have discretion to determine the rights, preferences, privileges and restrictions of, including, without limitation, voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of, and to fix the number of shares of, each series of our preferred stock.

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Anti-takeover effects of Delaware law

Upon the completion of this offering, we will be subject to Section 203 of the Delaware General Corporation Law, or Section 203. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

• prior to that date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

• upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by excluding employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

• on or subsequent to that date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 ²/3% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. Section 203 defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

A Delaware corporation may opt out of Section 203 either by an express provision in its original certificate of incorporation or in an amendment to its certificate of incorporation or bylaws approved by its stockholders. We have not opted out, and do not currently intend to opt out, of this provision. The statute could prohibit or delay mergers or other takeover or change of control attempts and, accordingly, may discourage attempts to acquire us.

Anti-takeover effects of our amended and restated certificate of incorporation and bylaw provisions

Our amended and restated certificate of incorporation and amended and restated bylaws will, upon the closing of this offering, contain some provisions that may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might deem to be in the stockholder’s best interest. The existence of these provisions

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could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions include:

Board composition and filling vacancies.    We will have a classified board of directors. See “Management—Board composition after this offering.” Accordingly, it will take at least two annual meetings of stockholders to elect a majority of the board of directors given our classified board. As a result, it may discourage third-party proxy contests, tender offers or attempts to obtain control of us.

Our amended and restated bylaws will provide that, subject to the rights, if any, of holders of preferred stock, directors may be removed only for cause by the affirmative vote of the holders of a majority of the voting power of our outstanding shares of common stock entitled to vote. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office, even if less than a quorum.

Special meetings of stockholders.    Our amended and restated certificate of incorporation and amended and restated bylaws will provide that a special meeting of stockholders may be called only by the chairman of the board of directors or pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office. Notwithstanding the foregoing, for so long as JBS S.A. or any of its subsidiaries owns at least 50% of our outstanding shares of common stock, JBS S.A. or such subsidiary shall have the right to call a special meeting of stockholders.

Supermajority voting.    In order to effect certain amendments to our amended and restated certificate of incorporation, our amended and restated certificate of incorporation will require first the approval of a majority of our board of directors pursuant to a resolution adopted by the directors then in office, in accordance with our amended and restated bylaws, and thereafter the approval by the holders of at least 66 ²/3% of our then outstanding shares of common stock. Subject to the provisions of our amended and restated certificate of incorporation, our amended and restated bylaws will expressly authorize our board of directors to make, alter or repeal our bylaws without further stockholder action. Our amended and restated bylaws may also be amended by the holders of 66 ²/3% of our then outstanding shares of common stock.

No stockholder action by written consent.    Our amended and restated certificate of incorporation and amended and restated bylaws will provide that an action required or permitted to be taken at any annual or special meeting of our stockholders may only be taken at a duly called annual or special meeting of stockholders. This provision prevents stockholders from initiating or effecting any action by written consent, and thereby taking actions opposed by the board. Notwithstanding the foregoing, for so long as JBS S.A. or any of its subsidiaries owns at least 50% of our outstanding shares of common stock, our stockholders will be permitted to take action by written consent.

Requirements for advance notification of stockholder nominations and proposals.    Our amended and restated bylaws will contain advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors.

Undesignated preferred stock.    The authorization of undesignated preferred stock will make it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our company.

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The foregoing provisions of our amended and restated certificate of incorporation and our amended and restated bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.

Limitations of director liability and indemnification of directors, officers and employees

As permitted by Delaware law, provisions in our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect at the closing of this offering will limit or eliminate the personal liability of our directors. Consequently, directors will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:

• any breach of the director’s duty of loyalty to us or our stockholders;

• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

• any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or

• any transaction from which the director derived an improper personal benefit.

These limitations of liability do not alter director liability under the federal securities laws and do not affect the availability of equitable remedies, such as an injunction or rescission.

Our amended and restated certificate of incorporation and amended and restated bylaws that will be in effect upon the closing of this offering will also require us to indemnify our directors and officers to the fullest extent permitted by Delaware law and, as described under “Certain relationships and related party transactions,” we have entered into indemnification agreements with each of our directors and officers.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers.

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At present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.

New York Stock Exchange and São Paulo Stock Exchange

We intend to apply to have our common stock listed on The New York Stock Exchange under the symbol “JBS.” We expect to apply to have the BDRs listed on the São Paulo Stock Exchange under the symbol “            .”

Transfer agent and registrar

We expect that the transfer agent and registrar for our shares of common stock will be             .

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Shares eligible for future sale

Prior to this offering, there has not been any public market for our common stock, and we make no prediction as to the effect, if any, that market sales of shares of common stock or the availability of shares of common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of common stock in the public market, or the perception that these sales could occur, could adversely affect the market price of common stock and could impair our future ability to raise capital through the sale of equity securities.

Upon the completion of this offering, we will have an aggregate of              shares of common stock outstanding, assuming no exercise of the international underwriters’ and the Brazilian underwriters’ over-allotment option, or an aggregate of              shares of common stock outstanding, assuming full exercise of the international underwriters’ over-allotment option. Of the outstanding shares, all of the shares sold in this offering, including any additional shares sold upon exercise of the international underwriters’ and Brazilian underwriters’ option to purchase additional shares, will be freely tradable, except that any shares purchased by “affiliates” (as that term is defined in Rule 144 under the Securities Act) may only be sold in compliance with the limitations described below. The remaining              shares of common stock outstanding after this offering will be deemed “restricted securities” as defined in Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 or Rule 701, promulgated under the Securities Act, which rules are summarized below. Subject to the lock-up agreements described below, shares held by our affiliates that are not restricted securities may be sold subject to compliance with Rule 144 of the Securities Act without regard to the prescribed one-year holding period under Rule 144.

Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person is entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described below, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

(i) 1% of the number of shares of common stock then outstanding, which will equal approximately              shares immediately after this offering; or

(ii) the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

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Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling those shares pursuant to Rule 701.

Directed share program

At our request, the underwriters have reserved up to     % of the shares of common stock for sale at the initial public offering price to persons who are directors, officers or employees, or who are otherwise associated with us, through a directed share program. The sales will be made by                      through a directed share program. The number of shares of common stock available for sale to the general public will be reduced by the number of directed shares purchased by participants in the program. We do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. These persons must commit to purchase by              a.m. on the day following the date of this prospectus. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares. Except for certain of our officers and directors who have entered into lock-up agreements as contemplated under “Lock-up agreements” below , each person buying shares through the directed share program has agreed that, for a period of              calendar days from the date of this prospectus, he or she will not, without the prior written consent of                     , offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into our or exchangeable for our common stock, enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, or make any demand for or exercise any right with respect to the registration of any shares or any security convertible into or exercisable or exchangeable for shares of common stock. For officers and directors purchasing shares of common stock through the directed share program, the lock-up agreements contemplated under “Lock-up agreements” below shall govern with respect to their purchases.

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Lock-up agreements

We, the selling stockholder and our executive officers and directors have agreed with the underwriters prior to the commencement of this offering that we and each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of the representatives, among other things:

(1) offer, pledge, announce the intention to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, BDRs representing such shares, common stock or BDRs that may be deemed to be beneficially owned by such directors, executive officers, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant), or

(2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, including BDRs representing such shares,

whether any such transaction described in bullet points (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise. The 180-day restricted period described above will be extended if during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to us occurs or if prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, in which case the restrictions described above will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, as applicable, unless the representatives waive, in writing, such extension.

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Certain material United States federal income and estate tax considerations for non-U.S. holders

The following is a general discussion of material U.S. federal income and estate tax considerations for a non-U.S. holder (as defined below) regarding the acquisition, ownership and disposition of shares of our common stock, including BDRs representing such shares, as of the date hereof. This discussion only applies to non-U.S. holders who purchase and hold our common stock or BDRs as a capital asset for U.S. federal income tax purposes (generally property held for investment). This discussion does not describe all of the tax consequences that may be relevant to a non-U.S. holder in light of its particular circumstances.

For purposes of this discussion, a “non-U.S. holder” is any beneficial owner of 5% or less of shares of our common stock, including any beneficial owner of BDRs representing 5% or less of such shares, that is not, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

• a partnership or other entity taxable as a partnership for U.S. federal income tax purposes;

• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust, if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

This discussion is based upon provisions of the Internal Revenue Code of 1986, as amended, or the Code, and Treasury regulations, rulings and judicial decisions as of the date hereof. These authorities may change, perhaps retroactively, which could result in U.S. federal income and estate tax consequences different from those summarized below. This discussion does not address all aspects of U.S. federal income and estate taxes and does not describe any foreign, state, local or other tax considerations that may be relevant to non-U.S. holders in light of their particular circumstances. In addition, this discussion does not describe the U.S. federal income and estate tax consequences applicable to a non-U.S. holder who is subject to special treatment under U.S. federal income tax laws (including a United States expatriate, a “controlled foreign corporation,” a “passive foreign investment company,” a corporation that accumulates earnings to avoid U.S. federal income tax, a foreign tax-exempt organization, a financial institution, a broker or dealer in securities, an insurance company, a regulated investment company, a real estate investment trust, a person who holds our common stock or BDRs as part of a hedging or conversion transaction or as part of a short-sale or straddle, a former U.S. citizen or resident or a pass-through entity or an investor in a pass-through entity). We cannot assure you that a change in law will not significantly alter the tax considerations that we describe in this discussion.

If a partnership holds shares of our common stock,including BDRs representing such shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Any partner of a partnership holding shares of our common stock, including BDRs representing such shares, should consult its own tax advisors.

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You should consult your tax advisor in determining the tax consequences to you of purchasing, owning and disposing of our common stock or BDRs, including the application to your particular situation of the U.S. federal income and estate tax considerations discussed below, as well as the application of state, local, foreign or other tax laws.

Ownership of BDRs in general

For U.S. federal income tax purposes, if you are a holder of BDRs, you generally will be treated as the owner of our common stock represented by such BDRs.

Dividends

In general, any distributions we make to you with respect to your shares of common stock or your BDRs representing such shares that constitute dividends for U.S. federal income tax purposes will be subject to U.S. withholding tax at a rate of 30% of the gross amount, unless you are eligible for a reduced rate of withholding tax under an applicable income tax treaty and (a) you provide an Internal Revenue Service, or IRS, Form W-8BEN (or the appropriate successor form) to us or our paying agent certifying under penalty of perjury that you are not a United States person as defined under the Code and you are entitled to benefits under the treaty or (b) you satisfy the relevant certification requirements of applicable Treasury regulations, if our common stock or BDRs are held through certain foreign intermediaries. Special certification and other requirements apply to certain non-U.S. holders that are pass-through entities rather than corporations or individuals. A distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under the U.S. federal income tax principles. Any distribution not constituting a dividend will be treated first as reducing your basis in your shares of common stock or your BDRs representing such shares and, to the extent it exceeds your basis, as capital gain.

Dividends we pay to you that are effectively connected with your conduct of a trade or business within the United States (and, if certain income tax treaties apply, are attributable to a U.S. permanent establishment maintained by you) generally will not be subject to U.S. withholding tax if you provide us or our paying agent with a duly completed and executed IRS Form W-8ECI, or successor form. Instead, such dividends generally will be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to a United States person as defined under the Code. In addition, if you are a corporation, effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty). A non-U.S. holder of shares of our common stock, including BDRs representing such shares, eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS.

Gain on sale or other disposition of common stock or BDRs

In general, a non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of shares of our common stock, including BDRs representing such shares, unless:

• the gain is effectively connected with a trade or business carried on by the non-U.S. holder within the United States and, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment of the non-U.S. holder maintained in the United

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States, in which case a non-U.S. holder will be subject to U.S. federal income tax on any gain realized upon the sale or other disposition on a net income basis, in the same manner as if the non-U.S. holder were a resident of the United States (and, possibly, the non-U.S. holder will be subject to additional branch profits tax discussed above in the case of a non-U.S. holder that is a corporation);

• the non-U.S. holder is an individual and is present in the United States for 183 days or more in the taxable year of disposition and certain other requirements are met, in which case a non-U.S. holder will be subject to a flat 30% tax on any gain realized upon the sale or other disposition, which tax may be offset by U.S. source capital losses (even though the individual is not considered a resident of the United States); or

• the non-U.S. holder owns more than 5% of shares of our common stock, including BDRs representing such shares, and we are or have been a United States real property holding corporation for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition and the non-U.S. holder’s holding period.

Federal estate taxes

Common stock or BDRs owned or treated as owned by an individual who is not a citizen or resident (as defined for U.S. federal estate tax purposes) of the United States at the time of his or her death will be included in the individual’s gross estate for U.S. federal estate tax purposes, and therefore may be subject to U.S. federal estate tax, unless an applicable tax treaty provides otherwise.

Backup withholding, information reporting and other reporting requirements

Generally, we must report annually to the IRS, and to each non-U.S holder, the amount of dividends paid to such non-U.S. holder, the name and address of the recipient, and the amount, if any, of tax withheld with respect to such dividends, regardless of whether withholding was required. Copies of these information returns may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of an applicable tax treaty. A non-U.S. holder may have to comply with certification procedures to establish that the holder is not a United States person as defined under the Code in order to avoid additional information reporting and backup withholding tax requirements, which may apply to dividends that we pay and the proceeds of a sale of our common stock or BDRs within the United States or conducted through certain U.S.-related financial intermediaries. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding tax as well.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

The foregoing discussion of certain material U.S. federal income and estate tax considerations is for general information only and is not tax advice. Accordingly, each prospective non-U.S. holder of shares of our common stock, including BDRs representing such shares, should consult his, her or its own tax advisor with respect to the federal, state, local and foreign tax consequences of the acquisition, ownership and disposition of common stock or BDRs.

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Underwriting

We and the selling stockholder are offering shares of common stock through a number of international underwriters. J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as the representatives of the international underwriters and as joint bookrunners for the international offering. We and the selling stockholder have entered into an international underwriting agreement with the international underwriters. Subject to the terms and conditions of the international underwriting agreement, we and the selling stockholder have agreed to sell to the international underwriters, and each international underwriter has agreed to purchase, at the public offering price less the underwriting discount set forth on the cover page of this prospectus, the number of shares of our common stock listed next to its name in the following table.

Name	Number of shares
J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Total

The international underwriters are committed to purchase all the common stock offered by us and the selling stockholder if they purchase any shares of common stock (other than those shares of common stock covered by their option to purchase additional shares as described below). The international underwriting agreement also provides that if an international underwriter defaults, the purchase commitments of non-defaulting international underwriters may also be increased or the international offering may be terminated. The international underwriting agreement also provides that the obligations of the international underwriters are subject to certain conditions precedent, including the absence of any material adverse change in our business and the receipt of certain certificates, opinions and letters from us, our counsel and our independent auditors.

We and the selling stockholder have entered into a Brazilian underwriting agreement with a syndicate of Brazilian underwriters providing for the concurrent offering in Brazil of              shares of our common stock in the form of BDRs.

The closing of the Brazilian offering will be conditioned on the closing of the international offering.

The international and Brazilian underwriters have entered into an intersyndicate agreement which governs specified matters relating to the global offering. Under this agreement, each international underwriter has agreed that, as part of its distribution of our common stock and subject to permitted exceptions, it has not offered or sold, and will not offer or sell, directly or indirectly, any share of common stock or distribute any prospectus relating to our common stock to any person in Brazil or to any other dealer which does not so agree. Each Brazilian underwriter similarly has agreed that, as part of its distribution of our common stock in the form of BDRs and subject to permitted exceptions, it has not offered or sold, and will not offer to sell, directly or indirectly, any shares of common stock, whether or not in the form of BDRs, or distribute any prospectus relating to our common stock to any person outside Brazil or to any other dealer which does not so agree. These limitations do not apply to stabilization transactions or to transactions between the Brazilian and international underwriters, which have agreed that they may sell common stock or BDRs, as the case may be, between their respective underwriting

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syndicates. The number of common stock or BDRs, as the case may be, actually allocated to each offering may differ from the amount offered due to reallocation between the international and Brazilian offerings.

The international underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $             per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $             per share from the initial public offering price. After the initial public offering of the shares of common stock, the international underwriters may change the offering price and other selling terms. The representatives have advised us that the international underwriters do not intend to confirm discretionary sales in excess of 5% of the common stock offered in the offering.

The international underwriters have an option to              buy up to additional shares of common stock from us to cover sales of shares by the international underwriters which exceed the number of shares specified in the table above. The international underwriters have 30 days from the date of this prospectus to exercise this over-allotment option. If any additional shares of common stock are purchased, the international underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the international underwriters to us and the selling stockholder per share of common stock. The underwriting fee in connection with the international offering is $             per share. The following table shows the per share and total underwriting discount to be paid to the international underwriters by us and the selling stockholder assuming both no exercise and full exercise of the international underwriters’ option to purchase additional shares.

Underwriting discount:

	Paid by us		Paid by the selling stockholder
	Without over- allotment exercise	With full over- allotment exercise	Without over- allotment exercise	With full over- allotment exercise
Per share	$	$	$	$
Total	$	$	$	$

We estimate that the total expenses of the international offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discount, will be approximately $            , which includes expenses of $             incurred by the international underwriters that we have agreed to reimburse.

The international offering of our shares of common stock is made for delivery when and if accepted by the international underwriters and subject to prior sale and to withdrawal, cancellation or modification of this offering without notice. The international underwriters reserve the right to reject an order for the purchase of shares in whole or part.

A prospectus in electronic format may be made available on the websites maintained by one or more international underwriters, or selling group members, if any, participating in the offering. The international underwriters may agree to allocate a number of shares to selling group

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members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to international underwriters and selling group members that may make Internet distributions on the same basis as other allocations. In addition, the international underwriters may sell shares to securities dealers who resell shares to online brokerage account holders. The information on any such website is not part of this prospectus.

We, the selling stockholder and our executive officers and directors have agreed with the underwriters prior to the commencement of this offering that we and each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of the representatives, among other things:

(1) offer, pledge, announce the intention to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, BDRs representing such shares, common stock or BDRs that may be deemed to be beneficially owned by such directors, executive officers, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant), or

(2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our common stock, including BDRs representing such shares,

whether any such transaction described in bullet points (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise. The 180-day restricted period described above will be extended if during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to us occurs or if prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, in which case the restrictions described above will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, as applicable, unless the representatives waive, in writing, such extension.

The representatives have no current intent or arrangement to release any of the shares subject to the lock-up agreements prior to the expiration of the 180-day lock-up period. There is no contractually specified condition for the waiver of lock-up restrictions, and any waiver is at the discretion of the representatives.

There are no specific criteria for the waiver of lock-up restrictions, and the representatives cannot in advance determine the circumstances under which a waiver might be granted. Any waiver will depend on the facts and circumstances existing at the time. Among the factors that the representatives may consider in deciding whether to release shares may include the length of time before the lock-up expires, the number of shares involved, the reason for the requested release, market conditions, the trading price of our common stock or the BDRs, historical trading volumes of our common stock or the BDRs, and whether the person seeking the release is an officer, director or affiliate of our company. The representatives will not consider their own positions in our securities, if any, in determining whether to consent to a waiver of a lock-up agreement.

We and the selling stockholder have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

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We expect to apply to have our common stock approved for listing on The New York Stock Exchange under the symbol “JBS.” We also expect to apply to list the BDRs on the São Paulo Stock Exchange under the symbol “            .”

In connection with the offering, the international underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while the offering is in progress. These stabilizing transactions may include making short sales of the common stock, which involve the sale by the international underwriters of a greater number of shares of common stock than they are required to purchase in the offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the international underwriters’ over-allotment option referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The international underwriters may close out any covered short position either by exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the international underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the international underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the international underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in the international offering. To the extent that the international underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The international underwriters have advised us that, pursuant to Regulation M under the Exchange Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the international underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the international underwriters that sold those shares as part of the offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If the international underwriters commence these activities, they may discontinue them at any time. The international underwriters may carry out these transactions on The New York Stock Exchange, in the over-the-counter market or otherwise.

In connection with the Brazilian offering,             , acting through its brokerage house             , on behalf of the Brazilian underwriters, may engage in transactions on the São Paulo Stock Exchange that stabilize, maintain or otherwise affect the price of the BDRs. In addition, it may bid for, and purchase, BDRs in the open market to cover syndicate short positions or stabilize the price of the BDRs. These stabilizing transactions may have the effect of raising or maintaining the market price of our common stock, whether or not in the form of BDRs, or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the absence of these transactions. These transactions, if commenced, may be discontinued at any time. Reports on stabilization activity are required to be furnished to the CVM. Stabilization activities may be

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carried out for up to 30 days from the day after the date of this prospectus. A stabilization activities agreement, in a form approved by the CVM, has been executed simultaneously with the execution of the Brazilian underwriting agreement.

At our request, the underwriters have reserved for sale as part of the international offering, at the initial offering price, up to                  shares, or approximately                  of the total number of shares offered in this prospectus, for our employees and directors, selected business associates and certain related persons. If purchased by these persons, these shares will be subject to a                  -day lock-up restriction. The number of shares of common stock available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares which are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered in this prospectus.

Prior to the global offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the underwriters. In determining the initial public offering price of the common stock, we and the underwriters considered a number of factors including:

• the information set forth in this prospectus and otherwise available to the underwriters;

• our prospects and the history and prospects for the industry in which we compete;

• an assessment of our management;

• our prospects for future earnings;

• the general condition of the securities markets, and the initial public offering market in particular, at the time of the global offering;

• the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

• other factors deemed relevant by the underwriters, the selling stockholder and us.

Neither we, the selling stockholder nor the underwriters can assure investors that an active trading market will develop for our common stock, or that the shares will trade in the public market at or above the initial public offering price.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), no offer of shares of our common stock to the public in that Relevant Member State may be made prior to the publication of a prospectus in relation to our common stock which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of our common stock may be made to the public in that Relevant Member State at any time:

• to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

158

• to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

• in any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

Each purchaser of shares of common stock described in this prospectus located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares of common stock to be offered so as to enable an investor to decide to purchase or subscribe the shares of common stock, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (“Qualified Investors”) that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Notice to prospective investors In Switzerland

This document, as well as any other material relating to the common stock offered in the offering, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. The common stock will not be listed on the SWX Swiss Exchange and, therefore, the documents relating to the sale, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange.

Our shares are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase our shares with the intention to distribute them to the public. The investors will be individually approached by us from time to time.

This document, as well as any other material relating to the common stock offered in the global offering, are personal and confidential and do not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the global offering described herein and may neither directly nor indirectly be distributed or made available to other persons without express consent of us. It may not be used in

159

connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Notice to prospective investors in the Dubai International Financial Centre

This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares of common stock which are the subject of the global offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the common stock offered in the global offering should conduct their own due diligence on the shares. If you do not understand the contents of this document you should consult an authorized financial adviser.

Relationships with the underwriters

The international underwriters and their affiliates have provided in the past to us and our affiliates, including the selling stockholder, and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. Affiliates of J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are lenders under our senior secured revolving credit facility. In addition, J.P. Morgan Securities Inc. and an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated were initial purchasers of the 11.625% senior unsecured notes due 2014 that were issued in April 2009 by our wholly owned subsidiaries JBS USA, LLC and JBS Finance, Inc., and J.P. Morgan Securities Inc. was an initial purchaser of JBS S.A.’s 10.5% senior notes due 2016.

In addition, from time to time, the international underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or its customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

160

Legal matters

The validity of the shares of common stock offered hereby and certain other matters of United States law will be passed upon for us by White & Case LLP. Certain matters of United States law in connection with this offering will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP. Certain matters of Brazilian law in connection with this offering will be passed upon for us by Pinheiro Neto Advogados. Certain matters of Brazilian law in connection with this offering will be passed upon for the underwriters by Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados.

Experts

Our consolidated financial statements as of and for the year ended December 28, 2008, have been audited by BDO Seidman, LLP, as stated in their report included elsewhere in this prospectus and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The consolidated financial statements as of and for (1) the 173 days from July 11, 2007 through December 30, 2007, (2) the 198 days from December 25, 2006 through July 10, 2007, and (3) the year ended December 24, 2006, included in this prospectus and elsewhere in the registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in giving said reports.

The consolidated financial statements of JBS Packerland Inc. (formerly known as Smithfield Beef Group, Inc.) as of and for the year ended April 27, 2008, appearing in this prospectus and in the registration statement, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein and are included in reliance upon such report given on the authority of said firm as experts in accounting and auditing.

The financial statements of Five Rivers Ranch Cattle Feeding LLC as of and for the year ended March 31, 2008, included in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing elsewhere in this prospectus. Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

Our condensed consolidated financial statements as of and for the fiscal quarter ended March 29, 2009 have been reviewed by BDO Seidman, LLP as stated in their report included elsewhere in this prospectus. This report is not considered a “report” or “part” of the prospectus within the meaning of Sections 7 and 11 of the Securities Act of 1933, and Section 11 liability under that Act does not extend to such report.

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Where you can find more information

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock we are offering. The registration statement, including the attached exhibits and schedule, contains additional relevant information about us and our common stock. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedule thereto. The rules and regulations of the SEC allow us to omit from this prospectus certain information included in the registration statement. When we complete this offering, we will be required to file annual, quarterly and special reports, proxy statements and other information with the SEC.

For further information about us and our common stock, you may inspect a copy of the registration statement and the exhibits and schedule to the registration statement without charge at the offices of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain copies of all or any part of the registration statement from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549 upon the payment of the prescribed fees. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants like us that file electronically with the SEC. You can also inspect our registration statement on this website.

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Index to consolidated financial statements

JBS USA Holdings, Inc.
Letter of BDO Seidman, LLP regarding unaudited interim financial information	F-3
Condensed Consolidated Balance Sheets as of December 28, 2008 and March 29, 2009	F-4
Condensed Consolidated Statements of Operations for the Thirteen weeks ended March 30, 2008 and March 29, 2009	F-5
Condensed Consolidated Statements of Cash Flows for the Thirteen weeks ended March 30, 2008 and March 29, 2009	F-6
Condensed Consolidated Statements of Stockholder’s Equity for the Thirteen weeks ended March 30, 2008 and March  29, 2009	F-7
Notes to Condensed Consolidated Financial Statements	F-8
JBS USA Holdings, Inc.
Report of Independent Registered Public Accounting Firm	F-51
Consolidated Balance Sheet as of December 28, 2008	F-52
Consolidated Statement of Operations for the Fifty-two weeks ended December 28, 2008	F-53
Consolidated Statement of Cash Flows for the Fifty-two weeks ended December 28, 2008	F-54
Consolidated Statement of Stockholder’s Equity for the Fifty-two weeks ended December 28, 2008	F-55
Notes to Consolidated Financial Statements	F-56
JBS USA Holdings, Inc.
Report of Independent Certified Public Accountants	F-95
Consolidated Balance Sheets as of December 24, 2006, July 10, 2007 and December 30, 2007	F-96
Consolidated Statements of Operations for the Fiscal Year ended December 24, 2006, the 198 Days ended July  10, 2007 and the 173 Days ended December 30, 2007	F-97
Consolidated Statements of Cash Flows for the Fiscal Year ended December 24, 2006, the 198 Days ended July  10, 2007 and the 173 Days ended December 30, 2007	F-98
Consolidated Statements of Stockholder’s Equity for the Fiscal Year ended December  24, 2006, the 198 Days ended July 10, 2007 and the 173 Days ended December 30, 2007	F-99
Notes to Consolidated Financial Statements	F-100
JBS Packerland, Inc. (formerly known as Smithfield Beef Group, Inc.)
Report of Independent Registered Public Accounting Firm	F-143
Consolidated Balance Sheet as of April 27, 2008	F-144
Consolidated Statement of Operations for the Year ended April 27, 2008	F-145
Consolidated Statement of Changes in Stockholder’s Equity for the Year ended April 27, 2008	F-146
Consolidated Statement of Cash Flows for the Year ended April 27, 2008	F-147
Notes to Consolidated Financial Statements	F-148
Five Rivers Ranch Cattle Feeding LLC
Report of Independent Registered Public Accounting Firm	F-163
Balance Sheet as of March 31, 2008	F-164
Statement of Operations for the Year ended March 31, 2008	F-165

F-1

Statement of Member’s Equity and Comprehensive Income (Loss) for the Year ended March 31, 2008	F-166
Statement of Cash Flows for the Year ended March 31, 2008	F-167
Notes to Financial Statements	F-168
JBS Packerland, Inc. (formerly known as Smithfield Beef Group, Inc.)
Condensed Consolidated Balance Sheet as of July 27, 2008	F-178
Condensed Consolidated Statements of Operations for the Quarters ended July 27, 2008 and July 29, 2007	F-179
Condensed Consolidated Statements of Cash Flows for the Quarters ended July 27, 2008 and July 29, 2007	F-180
Notes to Condensed Consolidated Financial Statements	F-181
JBS Five Rivers Cattle Feeding LLC (formerly known as Five Rivers Ranch Cattle Feeding LLC)
Balance Sheets as of September 30, 2008 and March 31, 2008	F-188
Statements of Operations for the Six months ended September 30, 2008 and September 30, 2007	F-189
Statements of Members’ Equity for the Six months ended September 30, 2008 and September 30, 2007	F-190
Statements of Cash Flows for the Six months ended September 30, 2008 and September 30, 2007	F-191
Notes to Consolidated Financial Statements	F-192

F-2

700 North Pearl, Suite 2000 Dallas, Texas 75201 Telephone: 214-969-7007 Fax: 214-953-0722

Accountants’ review report

Board of Directors

JBS USA Holdings, Inc.

1770 Promontory Circle

Greeley, CO 80634

We have reviewed the accompanying condensed consolidated balance sheet of JBS USA Holdings, Inc. and subsidiaries as of March 29, 2009, and the related condensed consolidated statements of operations, stockholder’s equity, and cash flows for the thirteen week period then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of JBS USA Holdings, Inc.

A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.

The 2008 financial statements of JBS USA Holdings, Inc. (Formerly JBS USA, Inc. and formerly known as Swift Foods Company) were reviewed by other accountants whose report dated May 1, 2008, stated that they were not aware of any material modifications that should be made to those statements in order for them to be in conformity with generally accepted accounting principles.

July 21, 2009

F-3

JBS USA HOLDINGS, INC.

An indirect subsidiary of JBS S.A.

Condensed consolidated balance sheets

(dollars in thousands, except per share data)

	December 28, 2008		(Unaudited) March 29, 2009
Assets
Current assets:
Cash and cash equivalents	$   254,785		$   156,737
Accounts receivable, net of allowance for doubtful accounts of $4,142 and $3,291, respectively	588,985		514,160
Inventories, net	649,000		650,026
Deferred income taxes, net	5,405		5,125
Other current assets	85,521		72,430
Total current assets	1,583,696		1,398,478
Property, plant, and equipment, net	1,229,316		1,241,055
Goodwill	147,855		149,093
Other intangibles, net	304,967		299,097
Note receivable	1,630		172,771
Deferred income taxes, net	15,500		15,745
Other assets	32,607		32,576
Total assets	$3,315,571		$3,308,815
Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$      67,012		$     71,428
Current portion of long-term debt	4,499		4,103
Current portion of deferred revenue	38,219		23,712
Accounts payable	192,697		152,615
Book overdraft	160,532		120,932
Deferred income taxes, net	8,587		8,723
Accrued liabilities	283,069		271,256
Total current liabilities	754,615		652,769
Long-term debt, excluding current portion	806,808		901,517
Deferred revenue	163,064		158,723
Deferred income taxes, net	150,670		150,774
Other non-current liabilities	52,164		50,093
Total liabilities	1,927,321		1,913,876
Commitments and contingencies
Stockholder’s equity:
Common stock: par value $.01 per share, 500,000,000 authorized, 100 shares issued and outstanding	—		—
Additional paid-in capital	1,400,159		1,400,159
Retained earnings	49,512		51,764
Accumulated other comprehensive loss	(61,421	)	(56,984	)
Total stockholder’s equity	1,388,250		1,394,939
Total liabilities and stockholder’s equity	$3,315,571		$3,308,815

The accompanying notes are an integral part of this condensed consolidated financial statement.

F-4

JBS USA Holdings, Inc.

An Indirect Subsidiary of JBS S.A.

Condensed consolidated statements of operations

(dollars in thousands, except per share data)

	(Unaudited) Thirteen weeks ended
	March 30, 2008		March 29, 2009
Gross sales	$      2,478,734		$  3,211,555
Less deductions from sales	(17,077	)	(15,216	)
Net sales	2,461,657		3,196,339
Cost of goods sold	2,451,413		3,123,358
Gross profit	10,244		72,981
Selling, general, and administrative expenses	31,042		61,598
Foreign currency transaction gains	(12,614	)	(5,075	)
Other income, net	(3,782	)	(1,475	)
Loss on sales of property, plant, and equipment	19		180
Interest expense, net	8,108		14,592
Income (loss) before income tax expense	(12,529	)	3,161
Income tax expense	5,613		909
Net income (loss)	$          (18,142	)	$         2,252
Income per common share:
Basic	$  (181,420.00)		$  22,520.00
Diluted	$  (181,420.00)		$  22,520.00
Weighted average shares:
Basic	100		100
Diluted	100		100

The accompanying notes are an integral part of this condensed consolidated financial statement.

F-5

JBS USA Holdings, Inc.

An Indirect Subsidiary of JBS S.A.

Condensed consolidated statements of cash flows

(dollars in thousands)

	(Unaudited) Thirteen weeks ended
	March 30, 2008		March 29, 2009
Cash flows from operating activities:
Net income (loss)	$   (18,142)		$      2,252
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	16,472		27,407
Amortization of intangibles	2,667		5,945
Amortization of debt issuance costs	606		1,123
Loss on sale of property, plant, and equipment	233		180
Deferred income taxes	175		104
Foreign currency transaction gains	(11,869	)	(3,311	)
Change in operating assets and liabilities:
Restricted cash	30,566		—
Accounts receivable, net	(12,767	)	64,815
Inventories	(67,030	)	2,696
Other current assets	(7,198	)	3,467
Accounts payable and accrued liabilities	(62,632	)	(39,845	)
Noncurrent assets	8		(9,975	)
Noncurrent liabilities	—		(3,855	)
Net cash flows provided by (used in) operating activities	(128,911	)	51,003
Cash flows from investing activities:
Purchases of property, plant, and equipment	(11,676	)	(35,189	)
Proceeds from sales of property, plant, and equipment	40		15
Investment in bonds	(4,900	)	—
Proceeds from sale of nonoperating real property	1,160		—
Notes receivable and other	—		(171,266	)
Net cash flows used in investing activities	(15,376	)	(206,440	)
Cash flows from financing activities:
Net borrowings of revolver	—		96,806
Payments of short-term debt	(416,980	)	(334	)
Payments of long-term debt and capital lease obligations	(368	)	(1,182	)
Change in overdraft balances	(10,517	)	(39,601	)
Investment from parent	450,000		—
Net cash flows provided by financing activities	22,135		55,689
Effect of exchange rate changes on cash	634		1,700
Net change in cash and cash equivalents	(121,518	)	(98,048	)
Cash and cash equivalents, beginning of period	198,883		254,785
Cash and cash equivalents, end of period	$     77,365		$  156,737
Non-cash investing and financing activities:
Construction in progress under deemed capital lease	$       8,178		$         135
Supplemental information:
Cash paid for interest	$     24,173		$     2,393
Cash paid for income taxes	$          385		$     3,309

The accompanying notes are an integral part of this condensed consolidated financial statement.

F-6

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Condensed consolidated statements of stockholder’s equity

(dollars in thousands)

(Unaudited)

For the thirteen weeks ended March 30, 2008 and March 29, 2009

	Common stock issued/ outstanding	Common stock	Additional paid-in capital	Retained earnings (accumulated deficit)		Accumulated other comprehensive income/(loss)	Total stockholder’s equity
Balance at December, 30, 2007	100	$—	$   950,159	$(111,592	)	$     251	$   838,818
Capital contributions	—	—	450,000	—		—	450,000
Comprehensive income (loss):
Net income	—	—	—	(18,142)		—	(18,142)
Derivative financial instrument adjustment, net of tax of $143	—	—	—	—		446	446
Foreign currency translation adjustment	—	—	—	—		9,953	9,953
Total comprehensive loss							(7,743)
Balance at March 30, 2008	100	$—	$1,400,159	$(129,734	)	$10,650	$1,281,075

	Common stock issued/ outstanding	Common stock	Additional paid-in capital	Retained earnings (accumulated deficit)	Accumulated other comprehensive income/(loss)		Total stockholder’s equity
Balance at December, 28, 2008	100	$—	$1,400,159	$49,512	$(61,421	)	$1,388,250
Comprehensive income (loss):
Net income	—	—	—	2,252	—		2,252
Derivative financial instrument adjustment, net of tax of $280	—	—	—	—	457		457
Foreign currency translation adjustment	—	—	—	—	3,980		3,980
Total comprehensive income							6,689
Balance at March 29, 2009	100	$—	$1,400,159	$51,764	$(56,984	)	$1,394,939

The accompanying notes are an integral part of this condensed consolidated financial statement.

F-7

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Note 1. Description of business

JBS USA Holdings, Inc. (“JBS USA Holdings” or the “Company”), formerly known as JBS USA, Inc. is a Delaware corporation. The operations of the Company and its subsidiaries constitute the operations of JBS USA Holdings as reported under accounting principles generally accepted in the United States of America (“GAAP”). JBS USA Holdings, Inc. is an indirect subsidiary of JBS S.A., a Brazilian company (“JBS”). The accompanying interim consolidated financial statements have not been audited by independent certified public accountant but in the opinion of management, reflect all normal and recurring adjustments considered necessary for a fair presentation of the financial position and results of operations. The results of operations for thirteen weeks ended March 29, 2009 are not necessarily indicative of results to be expected for the full year.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In addition, the Company’s condensed consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by GAAP to be considered “complete financial statements”. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the fifty-two weeks ended December 28, 2008.

JBS USA Holdings processes, prepares, packages, and delivers fresh, further processed and value-added beef, pork and lamb products for sale to customers in the United States and international markets. JBS USA Holdings sells its meat products to customers in the foodservice, international, further processor, and retail distribution channels. The Company also produces and sells by-products that are derived from its meat processing operations, such as hides and variety meats, to customers in various industries.

JBS USA Holdings conducts its domestic beef and pork processing businesses through its wholly owned subsidiaries Swift Beef Company (“Swift Beef”), Swift Pork Company (“Swift Pork”) and JBS Packerland (“JBS Packerland”), formerly known as Smithfield Beef Group and its Australian beef business through Swift Australia Pty. Ltd. (“Swift Australia”). We have two reportable segments comprised of Beef and Pork which, for the thirteen weeks ended March 30, 2008, represented approximately 78.5% and 21.5% of net sales and for the thirteen weeks ended March 29, 2009, represented approximately 83.6% and 16.4% of net sales, respectively. The Company operates eight beef processing facilities, three pork processing facilities, one lamb slaughter facility, one value-added facility, and eleven feedlots in the United States and ten processing facilities and five feedlots in Australia. Three of the processing facilities in Australia process lamb, mutton and veal along with beef and a fourth processes only lamb, mutton and veal.

On July 11, 2007, JBS acquired the Company (the “Acquisition”). Concurrent with the closing of the Acquisition, the entity formerly known as Swift Foods Company was renamed JBS USA, Inc. During the third quarter of the 2008 fiscal year, this entity was renamed JBS USA Holdings, Inc.

F-8

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The aggregate purchase price for the Acquisition was $1,470.6 million (including approximately $48.5 million of transaction costs). The Company also refinanced its debt, the debt of its subsidiaries, and the outstanding debt assumed in the Acquisition which collectively were paid off using proceeds from $750 million of various debt instruments (see Note 7) and additional equity contributions from JBS. As a result of the Acquisition, the consolidated financial statements of JBS USA Holdings provided herein reflect the acquisition being accounted for as a purchase in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 141, Business Combinations (“SFAS No. 141”) and push down accounting was applied in accordance with the guidance in Staff Accounting Bulletin (“SAB”) No. 54 to the consolidated financial statements.

Note 2. Acquisition of Tasman Group

On March 4, 2008, JBS Southern Australia Pty. Ltd (“JBS Southern”), an indirect subsidiary of JBS USA Holdings entered into an agreement with Tasman Group Services, Pty. Ltd. (“Tasman Group”) to purchase substantially all of the assets of Tasman Group in an all cash transaction (“Tasman Acquisition”) and the purchase was completed on May 2, 2008. The assets acquired include six processing facilities and one feedlot located in Southern Australia. This acquisition provides additional capacity to continue to meet customer demand. The aggregate purchase price for the Tasman Acquisition was $117.3 million (including approximately $8.6 million of transaction costs), as shown below. JBS Southern also assumed approximately $52.1 million of outstanding debt (see Note 7). The consolidated financial statements of the Company provided herein reflect the Tasman Acquisition being accounted for as a purchase in accordance with SFAS No. 141. The results of the Tasman Group are included in the Company’s statement of operations from the date of acquisition.

The purchase price allocation is preliminary pending completion of independent valuations of assets and liabilities acquired in the area of identified intangibles and certain liabilities including, but not limited to deferred taxes. As such, the allocation of purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of May 2, 2008 (in thousands).

Purchase price paid to previous shareholders	$  108,786
Fees and direct expenses	8,555
Total purchase price	$117,341
Purchase price allocation:
Current assets and liabilities	$ (27,942	)
Property, plant, and equipment	157,396
Deferred tax liability	(3,539	)
Goodwill	—
Other noncurrent assets and liabilities, net	(8,574	)
Total purchase price allocation	$117,341

F-9

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Note 3. Acquisition of Smithfield Beef Group & Five Rivers Cattle Feeding

On March 4, 2008, JBS and Smithfield Foods, Inc (“Smithfield Foods”) entered into a Stock Purchase Agreement (“Smithfield Agreement”). Pursuant to the Smithfield Agreement, JBS executed through the Company the acquisition of Smithfield Beef Group, Inc. (“Smithfield Beef”) for $563.2 million in cash (including $26.1 million of transaction related costs) and contributed its ownership in Smithfield Beef to the Company (Smithfield Acquisition). The purchase included 100% of Five Rivers Ranch Cattle Feeding LLC (“Five Rivers”), which was held by Smithfield Beef in a 50/50 joint venture with Continental Grain Company (“CGC,” formerly ContiGroup Companies, Inc.). On October 23, 2008, the acquisition of Smithfield Beef was completed. In conjunction with the closing of this purchase Smithfield Beef was renamed JBS Packerland and Five Rivers was renamed JBS Five Rivers Cattle Feeding LLC (“JBS Five Rivers”). The assets acquired include four processing plants and eleven feedlots. This acquisition provides additional capacity to continue to meet customer demand.

The purchase excluded substantially all live cattle inventories held by Smithfield Beef and Five Rivers as of the closing date, together with the associated debt. The excluded live cattle were raised by JBS Five Rivers after closing for a negotiated fee.

The consolidated financial statements of the Company reflect the acquisition being accounted for as a purchase in accordance with SFAS No. 141. The acquired goodwill is treated as non-deductible for tax purposes. The results of JBS Packerland and JBS Five Rivers are included in the Company’s statement of operations from the date of acquisition.

The purchase price allocation is preliminary pending completion of independent valuations of assets and liabilities acquired including, but not limited to deferred taxes. As such, the allocation of purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands).

Purchase price paid to previous shareholders	$ 537,068
Fees and direct expenses	26,134
Total purchase price	$563,202
Purchase price allocation:
Current assets and liabilities	$  43,052
Property, plant, and equipment	423,955
Deferred tax liability	(142,997	)
Goodwill	95,998
Intangible assets (see Note 4)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$563,202

F-10

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Had the Smithfield Acquisition occurred at the beginning of fiscal 2008, the unaudited pro forma net sales, net loss and net loss per share would have been $3.3 billion, $(8.5) million, and $(85,410.00), respectively for the first quarter of 2008.

Note 4. Basis of presentation and accounting policies

Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of estimates

The consolidated financial statements have been prepared in conformity with GAAP using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. Significant estimates made by the Company include the allowance for doubtful accounts, reserves related to inventory obsolescence or valuation, insurance accruals, and income tax accruals.

Fiscal year

The Company’s fiscal year consists of 52 or 53 weeks, ending on the last Sunday in December. The consolidated financial statements have been prepared for the thirteen weeks ended March 30, 2008 and March 29, 2009.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying value of these assets approximates their fair market value. Financial instruments which potentially subject JBS USA Holdings to concentration of credit risk consist principally of cash and temporary cash investments. At times, cash balances held at financial institutions were in excess of Federal Deposit Insurance Corporation insurance limits. JBS USA Holdings places its temporary cash investments with high quality financial institutions. The Company believes no significant credit risk exists with respect to these cash investments.

Accounts receivable and allowance for doubtful accounts

The Company has a diversified customer base which includes some customers who are located in foreign countries. The Company controls credit risk related to accounts receivable through credit worthiness reviews, credit limits, letters of credit, and monitoring procedures.

F-11

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The Company evaluates the collectability of its accounts receivable based on a general analysis of past due receivables, and a specific analysis of certain customers which management believes will be unable to meet their financial obligations due to economic conditions, industry-specific conditions, historic or anticipated performance, and other relevant circumstances. The Company continuously performs credit evaluations and reviews of its customer base. The Company will provide an allowance for an account when collectability is not reasonably assured. The Company believes this process effectively mitigates its exposure to bad debt write-offs; however, if circumstances related to changes in the economy, industry, or customer conditions change, the Company may need to subsequently adjust the allowance for doubtful accounts.

The Company adheres to customary industry terms of net seven days. The Company considers all domestic accounts over 14 days as past due and all international accounts over 30 days past due. Activity in the allowance for doubtful accounts is as follows (in thousands):

	March 28, 2008	March 29, 2009
Balance, beginning of period	$1,389	$4,142
Bad debt expense	155	(379	)
Change to purchase accounting allowance for doubtful accounts	—	(462	)
Write-offs	1	—
Effect of exchange rates	5	(10	)
Balance, end of period	$1,550	$3,291

The $462 thousand of the change to purchase accounting allowance for doubtful accounts represents the resolution of a receivable which has been fully reserved on the opening balance sheet at the October 23, 2008 Smithfield Beef acquisition date.

F-12

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Inventories

Inventories consist primarily of product, livestock, and supplies. Product inventories are considered commodities and are primarily valued based on quoted commodity prices, which approximate net realizable value less cost to complete. Due to a lack of equivalent commodity market data Australian product inventories are valued based on the lower of cost or net realizable value less cost to sell. Livestock inventories are valued on the basis of the lower of first-in, first-out cost or market. Costs capitalized into livestock inventory include cost of feeder livestock, direct materials, supplies, and feed. Cattle and hogs are reclassified from livestock to work in progress at time of slaughter. Supply inventories are carried at historical cost. The components of inventories are as follows (in thousands):

	December 28, 2008	March 29, 2009
Livestock	$106,288	$104,004
Product inventories:
Raw material	16,599	11,539
Work in progress	53,115	46,058
Finished goods	386,399	408,008
Supplies	86,599	80,417
	$649,000	$650,026

Other current assets

Other current assets include prepaid expenses which are amortized over the period the Company expects to receive the benefit.

Property, plant and equipment

Property, plant and equipment was recorded at fair value at the respective dates of the Acquisition, the Tasman Acquisition and the Smithfield Acquisition. Subsequent additions are recorded at cost. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

F-13

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The costs of developing internal-use software are capitalized and amortized when placed in service over the expected useful life of the software. Major renewals and improvements that extend the useful life of the asset are capitalized while maintenance and repairs are expensed as incurred. The Company has historically and currently accounts for planned major maintenance activities as they are incurred in accordance with the guidance in the Financial Accounting Standards Board, (“FASB”) Staff Position (“FSP”) AUG Air-1: Accounting for Planned Major Maintenance Activities. Upon the sale or retirement of assets, the cost and related accumulated depreciation or amortization are eliminated from the respective accounts and any resulting gains or losses are reflected in earnings. Applicable interest charges incurred during the construction of assets are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives. The Company capitalized $0.1 million and $0.2 million of interest charges during the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively. Assets held under capital lease are classified in property, plant, and equipment and amortized over the lease term. Capital lease amortization is included in depreciation expense. As of March 29, 2009, JBS USA Holdings had $22.8 million in commitments outstanding for capital projects including $14.5 million related to the Installment Bond Purchase Agreement, as discussed in Other Assets.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When future undiscounted cash flows of assets are estimated to be insufficient to recover their related carrying value, the Company compares the asset’s estimated future cash flows, discounted to present value using a risk-adjusted discount rate, to its current carrying value and records a provision for impairment as appropriate.

Property, plant, and equipment, net are comprised of the following (in thousands):

	December 28, 2008		March 29, 2009
Land	$      143,253		$      145,659
Buildings, machinery, and equipment	1,022,324		1,066,885
Property and equipment under capital lease	17,339		17,349
Furniture, fixtures, office equipment, and other	38,867		39,468
Construction in progress	88,732		80,383
	1,310,515		1,349,744
Less accumulated depreciation and amortization	(81,199	)	(108,689	)
	$    1,229,316		$    1,241,055

Accumulated depreciation includes accumulated amortization on capitalized leases of approximately $3.1 million and $3.9 million as of December 28, 2008 and March 29, 2009, respectively. For the thirteen weeks ended March 30, 2008, the Company recognized $12.9 million and $3.6 million of depreciation and capital lease amortization expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations,

F-14

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

respectively. For the thirteen weeks ended March 29, 2009, the Company recognized $25.6 million and $1.8 million of depreciation and capital lease amortization expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations, respectively.

JBS USA Holdings monitors certain asset retirement obligations in connection with its operations. These obligations relate to clean-up, removal or replacement activities and related costs for “in-place” exposures only when those exposures are moved or modified, such as during renovations of its facilities. These in-place exposures include asbestos, refrigerants, wastewater, oil, lubricants and other contaminants common in manufacturing environments. Under existing regulations, JBS USA Holdings is not required to remove these exposures and there are no plans or expectations of plans to undertake a renovation that would require removal of the asbestos, nor the remediation of the other in place exposures at this time. The facilities are expected to be maintained and repaired by activities that will not result in the removal or disruption of these in place exposures. As a result, there is an indeterminate settlement date for these asset retirement obligations because the range of time over which JBS USA Holdings may incur these liabilities is unknown and cannot be reasonably estimated. Therefore, JBS USA Holdings cannot reasonably estimate and has not recorded the fair value of the potential liability.

Other assets

Prior to the Acquisition, Swift Beef entered into an Installment Bond Purchase Agreement (the “Purchase Agreement”) with the City of Cactus, Texas (the “City”) effective as of May 15, 2007. Under the Purchase Agreement, Swift Beef agreed to purchase up to $26.5 million of the “City of Cactus, Texas Sewer System Revenue Improvement and Refunding Bonds, Taxable Series 2007” to be issued by the City (the “Bonds”) . The Bonds are being issued by the City to finance improvements to its sewer system (the “System”) which is utilized by Swift Beef’s processing plant located in Cactus, Texas (the “Plant”) as well as other industrial users and the citizens of the community of Cactus. Swift Beef will purchase the Bonds in installments upon receipt of Bond installment requests from the City as the System improvements are completed through an anticipated completion date of June 2010. The interest rate on the Bonds is the six-month LIBOR plus 350 basis points, or 6.04% at March 29, 2009. The Bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption beginning on June 1, 2011. The principal and interest on the Bonds will be paid by the City from the net revenues of the System. At March 29, 2009, Swift Beef held $12.0 million of the Bonds, which fall within Level 3 of the value hierarchy in accordance with SFAS No. 157, Fair Value Measurements (“SFAS No. 157”).

On May 21, 2007, in connection with the purchase of the Bonds, Swift Beef entered into a Water & Wastewater Services Agreement (the “Wastewater Agreement”) with the City under which the City will provide water and wastewater services for the Plant at the rates set forth in the Wastewater Agreement. Swift Beef’s payments for the City’s treatment of wastewater from the Plant will include a capacity charge in the amount required to be paid by the City to pay the principal of, and interest on, the Bonds.

F-15

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The Company has evaluated the impact of the FASB Emerging Issues Task Force (“EITF”) No. 01-08, Determining Whether an Arrangement Contains a Lease, as well as EITF No. 97-10, The Effect of Lessee Involvement in Asset Construction, and has determined that it will be required to reflect the wastewater treatment facility as a capital asset (similar to a capital leased asset) as it will be the primary user of the wastewater facility based on projections of volume of throughput. As the City spends funds to construct the facility, the Company will record construction in progress and the related construction financing. At March 29, 2009, $9.0 million had been recognized as construction in progress and construction financing by the Company.

Debt issuance costs

Costs related to the issuance of debt are capitalized and amortized using the straight-line method to interest expense over the period the debt is outstanding. In conjunction with the Acquisition of JBS USA Holdings, $1.8 million of fees were capitalized and included in other assets. JBS USA Holdings amortized $0.3 million of these costs during the thirteen weeks ended March 30, 2008 and none as of March 29, 2009 as the amount under the related loan agreement was repaid in full during fiscal year ended December 28, 2008 (see Note 7).

On November 5, 2008, JBS USA Holdings entered into a $400.0 million revolving credit facility (see Note 7). The $13.4 million in debt issuance cost associated with this facility is being amortized as interest expense using the straight-line method over the life of the agreement. During the thirteen weeks ended March 29, 2009, the Company amortized $1.1 million related to these costs.

Goodwill and other intangibles

Goodwill and other intangible assets with indefinite lives are not amortized but are tested for impairment at least on an annual basis or more frequently if impairment indicators arise, as required by SFAS No. 142, Goodwill and Other Intangible Assets. Identifiable intangible assets with definite lives are amortized over their estimated useful lives.

Goodwill represents the excess of the aggregate purchase price over the fair value of the net identifiable assets acquired in a purchase business combination. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with SFAS No. 141, Business Combinations, and after December 15, 2008 in accordance with SFAS No. 141R as discussed in Recently Issued Accounting Pronouncements. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. The Company estimates the

F-16

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

fair value of its reporting units using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

The following is a rollforward of goodwill by segment for the thirteen weeks ended March 29, 2009 (in thousands):

	December 28, 2008	Adjustments	Translation gain	March 29, 2009
Beef	$133,825	$1,094	$144	$135,063
Pork	14,030	—	—	14,030
Total	$147,855	$1,094	$144	$149,093

The adjustments to goodwill are a result of the change in purchase price allocation for the Smithfield Acquisition.

Other identifiable intangible assets consist of the following (in thousands):

	December 28, 2008
	Initial gross carrying amount	Adjustments		Accumulated amortization		Net carrying amount
Amortizing:
Customer relationships	$129,000	$  69,000		$(18,104	)	$179,896
Customer contracts	15,400	6,078		(2,004	)	19,474
Patents	5,200	(2,300	)	(282	)	2,618
Rental contract	3,507	—		(573	)	2,934
Deferred revenue	1,483	—		(459	)	1,024
Mineral rights	742	—		(65	)	677
Subtotal amortizing intangibles	155,332	72,778		(21,487	)	206,623
Non-amortizing:
Trademark	$  33,300	$  50,800		$        —		$  84,100
Water rights	2,100	12,144		—		14,244
Subtotal non-amortizing intangibles	35,400	62,944		—		98,344
Total intangibles	$190,732	$135,722		$(21,487	)	$304,967

F-17

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The adjustments to intangible assets result primarily from the Smithfield Acquisition (see Note 3). The adjustment to patents of $2.3 million reflects the impairment of a patent that has no future use.

	March 29, 2009
	Initial gross carrying amount	Adjustments	Accumulated amortization		Net carrying amount
Amortizing:
Customer relationships	$198,000	$        —	$(23,126	)	$174,874
Customer contracts	21,478	—	(2,619	)	18,859
Patents	2,900	—	(330	)	2,570
Rental contract	3,507	—	(670	)	2,837
Deferred revenue	1,483	—	(537	)	946
Mineral rights	742	—	(75	)	667
Subtotal amortizing intangibles	228,110	—	(27,357	)	200,753
Non-amortizing:
Trademark	$  84,100	$        —	$        —		$  84,100
Water rights	14,244	—	—		14,244
Subtotal non-amortizing intangibles	98,344	—	—		98,344
Total intangibles	$326,454	$        —	$(27,357	)	$299,097

The customer relationships intangible and customer contracts intangible resulting from the Acquisition are amortized on an accelerated basis over 12 and 7 years, respectively. The customer relationships and customer contracts intangibles resulting from the Smithfield Acquisition are amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability. Patents consist of exclusive marketing rights and are being amortized over the life of the related agreements on a straight line basis, which range from 6 to 20 years. For the thirteen weeks ended March 30, 2008 and March 29, 2009, the Company recognized $2.7 million and $5.9 million of amortization expense, respectively.

Based on amortizing intangible assets recognized in JBS USA Holdings balance sheet as of March 29, 2009, amortization expense for each of the next five years is estimated as follows (in thousands):

For the fiscal years ending:
2009 (remaining)	$15,325
2010	19,879
2011	18,964
2012	17,400
2013	15,299

F-18

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Overdraft balances

The majority of JBS USA Holdings bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance that result in overdraft balances for accounting purposes are classified as current liabilities, and the change in the related balance is reflected in financing activities on the statement of cash flows.

Insurance

JBS USA Holdings is self-insured for employee medical and dental benefits and purchases insurance policies with deductibles for certain losses relating to worker’s compensation and general liability. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels of certain claims. Self-insured losses are accrued based upon periodic assessments of estimated settlements for known and anticipated claims, any resulting adjustments to previously recorded reserves are reflected in current period earnings. JBS USA Holdings has recorded a prepaid asset with an offsetting liability to reflect the amounts estimated as due for insured claims incurred and accrued but not yet paid to the claimant by the third party insurance company in accordance with SFAS No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.

Environmental expenditures and remediation liabilities

Environmental expenditures that relate to current or future operations and which improve operational capabilities are capitalized at time of incurrence. Expenditures that relate to an existing or prior condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remediation efforts are probable and the costs can be reasonably estimated.

Foreign currency

For foreign operations, the local currency is the functional currency. Translation into US dollars is performed for assets and liabilities at the exchange rates as of the balance sheet date. Income and expense accounts are translated at average exchange rates for the period. Adjustments resulting from the translation are reflected as a separate component of other comprehensive income (loss). Transaction gains and losses on US dollar denominated intercompany borrowings between the Australian subsidiaries and the Australian parent are recorded in earnings. Translation gains and losses on US dollar denominated intercompany borrowings between the Australian subsidiaries and the US parent and which are deemed to be part of the investment in the subsidiary are recorded in other comprehensive income. The balance of foreign currency translation adjustment in accumulated other comprehensive income at December 28, 2008 and March 29, 2009 was a loss of $(61.1) million and a gain of $4.0 million, respectively.

F-19

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Income taxes

JBS USA Holdings calculates its interim income tax provision in accordance with Statement of Financial Accounting Standards No. 109, (“FAS 109”), Accounting for Income Taxes, and Accounting for Income Taxes in Interim Periods (“FIN 18”). The tax expense recognized for the thirteen weeks ended March 29, 2009 primarily relates to foreign taxes, US federal taxes and other state and local tax expenses in the US. Beginning with the adoption of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”) as of May 28, 2007, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Prior to the adoption of FIN 48, the Company recognized the effect of income tax positions only if such positions were probable of being sustained. JBS USA Holdings recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision.

Fair value of financial instruments

The carrying amounts of JBS USA Holdings’ financial instruments, including cash and cash equivalents, short-term trade receivables, and payables, approximate their fair values due to the short-term nature of the instruments. Existing long-term debt was recorded at fair value as of the date of the Acquisition and the Company believes this approximates its fair value at March 29, 2009. Long-term debt incurred since the Acquisition was recorded at fair value at the date of incurrence and is considered to be fair value at March 29, 2009 due to the proximity of the balance sheet date to the issuance of the debt and its variable interest rate (see Note 7).

Revenue recognition

The Company’s revenue recognition policies are based on the guidance in Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition in Financial Statements. Revenue on product sales is recognized when title and risk of loss are transferred to customers (upon delivery based on the terms of sale), when the price is fixed or determinable, and when collectability is reasonably assured, and pervasive evidence of an arrangement exists. The Company recognizes sales net of applicable provisions for discounts, returns and allowances which are accrued as product is invoiced to customers who participate in such programs based on contract terms and historical and current purchasing patterns.

Advertising costs

Advertising costs are expensed as incurred. Advertising costs were $1.3 million and $1.0 million for the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively.

Research and development

The Company incurs costs related to developing new beef and pork products. These costs include developing improved packaging, manufacturing, flavor enhancing, and improving consumer

F-20

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

friendliness of meat products. The costs of these research and development activities are less than 1% of total consolidated net sales for the thirteen weeks ended March 30, 2008 and March 29, 2009 and are expensed as incurred.

Shipping costs

Pass-through finished goods delivery costs reimbursed by customers are reported in net sales while an offsetting expense is included in cost of goods sold.

Comprehensive income

Comprehensive income consists of net income, foreign currency translation, and adjustments from derivative financial instruments.

Net income per share

We present dual computations of net income (loss) per share. The basic computation is based on weighted average common shares outstanding during the period. The diluted computation reflects the same calculation as the basic computation as the Company does not have potentially dilutive common stock equivalents.

Derivatives and hedging activities

JBS USA Holdings accounts for its derivatives and hedging activities in accordance with SFAS No. 133, Accounting for Derivative Financial Instruments and Hedging Activities, (“SFAS No. 133”), and its related amendment, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities. The Company uses derivatives (e.g., futures and options) for the purpose of mitigating exposure to changes in commodity prices and foreign currency exchange rates. The fair value of each derivative is recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives are recognized immediately in the statement of operations for derivatives that do not qualify for hedge accounting. For derivatives designated as a hedge and used to hedge an existing asset or liability, both the derivative and hedged item are recognized at fair value within the balance sheet with the changes in both of these fair values being recognized immediately in the statement of operations. For derivatives designated as a hedge and used to hedge an anticipated transaction, changes in the fair value of the derivatives are deferred in the balance sheet within accumulated other comprehensive income to the extent the hedge is effective in mitigating the exposure to the related anticipated transaction. Any ineffectiveness is recognized immediately in the statement of operations. Amounts deferred within accumulated other comprehensive income are recognized in the statement of operations upon the completion of the related underlying transaction.

Gains and losses from energy and livestock derivatives related to purchases are recognized in the statement of operations as a component of cost of goods sold upon change in fair value. While management believes these instruments help mitigate various market risks, they are not

F-21

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

designated and accounted for as hedges under SFAS No. 133 as a result of the extensive recordkeeping requirements of this statement. Gains and losses from foreign currency derivatives and livestock derivatives related to future sales are recognized in the statement of operations as a component of net sales or as a component of other comprehensive income upon change in fair value.

Adoption of new accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (“SFAS No. 161”), which provides for enhanced disclosures about the use of derivatives and their impact on a Company’s financial position and results of operations. JBS USA Holdings, Inc. adopted SFAS No. 161 in the thirteen weeks ended March 29, 2009. The adoption did not have a material impact on its financial position, results of operations, or cash flows (see Note 6).

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) is intended to provide greater consistency in the accounting and reporting of business combinations. SFAS 141(R) requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction and any non-controlling interest in the acquiree at the acquisition date, measured at fair value at that date. This includes the measurement of the acquirer’s shares issued as consideration in a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gains and loss contingencies, the recognition of capitalized in–process research and development, the accounting for acquisition related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance and deferred taxes. One significant change in this statement is the requirement to expense direct costs of the transaction, which under existing standards are included in the purchase price of the acquired company. This statement also established disclosure requirements to enable the evaluation of the nature and financial effect of the business combination. SFAS No. 141(R) is effective for business combinations consummated after December 31, 2008. Also effective, as a requirement of the statement, after December 31, 2008 any adjustments to uncertain tax positions from business combinations consummated prior to December 31, 2008 will no longer be recorded as an adjustment to goodwill, but will be reported in income. SFAS No. 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008; therefore, we expect to adopt SFAS No. 141(R) for any business combinations entered into beginning in fiscal year 2009.

Recently issued accounting pronouncements

In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2 which defers the effective date of SFAS No. 157, Fair Value Measurements (SFAS 157), for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in an entity’s financial statements on a recurring basis, at least annually. The Company will be required

F-22

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

to adopt for these nonfinancial assets and nonfinancial liabilities as of December 29, 2008. The Company believes the adoption of SFAS 157 deferral provisions will not have a material impact on the Company’s financial position results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS No. 167”). SFAS No. 167 provides for enhanced financial reporting by enterprises involved with variable interest entities and is effective for fiscal years beginning after November 15, 2009. We are currently evaluating the impact, if any, of SFAS No. 167 on our financial position, results of operations, and cash flows.

NOTE 5. Accrued liabilities

Accrued liabilities consist of the following (in thousands):

	December 28, 2008	March 29, 2009
Salaries	$   74,528	$   66,165
Self insurance reserves	24,265	27,475
Taxes	15,825	12,884
Freight	38,645	35,406
Interest	19,672	29,930
Other	110,134	99,396
Total	$283,069	$271,256

Other accrued liabilities consist of items that are individually less than 5% of total current liabilities.

NOTE 6. Derivative financial instruments

The Company adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”) which defines fair value, establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. The criterion that is set forth in this standard is applicable to the fair value measurement where it is permitted or required under other accounting pronouncements.

SFAS No. 157 defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date. SFAS No. 157 establishes a three-tier fair value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement.

• Level 1 consists of observable market data in an active market for identical assets or liabilities.

• Level 2 consists of observable market data, other than that included in Level 1, that is either directly or indirectly observable.

F-23

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

• Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company, not a market participant, if there is little available market data and the Company’s own assumptions are considered by management to be the best available information.

In the case of multiple inputs being used in fair value measurement, the lowest level input that is significant to the fair value measurement represents the level in the fair value hierarchy in which the fair value measurement is reported.

The adoption of SFAS No. 157 has not resulted in any significant changes to the methodologies used for fair value measurement. The Company uses derivatives for the purpose of mitigating exposure to market risk, such as changes in commodity prices and foreign currency exchange rates. The Company uses exchange-traded futures and options to hedge livestock commodities. The Company uses foreign currency positions, which are actively quoted by an independent financial institution, to mitigate the risk of foreign currency fluctuations in the markets in which it conducts business.

The fair value of derivative assets is recognized within other current assets while the fair value of derivative liabilities is recognized within accrued liabilities. The fair value measurements that are performed on a recurring basis fall within the level 1 of the fair value hierarchy. The amounts are as follows:

	Level 1
	December 28, 2008	March 29, 2009
Assets:
Commodity derivatives	$42,087	$23,582
Foreign currency rate derivatives	12,002	14,463
Total	$54,089	$38,045
Liabilities:
Commodity derivatives	$16,392	$7,056
Foreign currency rate derivatives	592	5,246
Total	$16,984	$12,302

The Company utilizes various raw materials in its operations, including cattle, hogs, and energy, such as natural gas, electricity, and diesel fuel, which are all considered commodities. The Company considers these raw materials generally available from a number of different sources and believes it can obtain them to meet its requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond its control, such as economic and political conditions, supply and demand, weather, governmental regulation, and other circumstances. Generally, the Company purchases derivatives in an attempt to mitigate price risk related to its anticipated consumption of commodity inputs for periods of up to 12 months. The Company may enter into longer-term derivatives on particular commodities if deemed appropriate. As of March 29, 2009, the Company had derivative positions in place covering 2.5% and 14% of anticipated cattle and hog needs, respectively, through December 2009.

F-24

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The following table presents the impact of derivative instruments on the Consolidated Statement of Operations for the thirteen weeks ended March 30, 2008 and March 29, 2009 (in thousands):

Derivatives not designated as hedging instruments	Location of gain/(loss) recognized in income	Amount of gain/(loss) recognized in income thirteen weeks ended
		March 30, 2008		March 29, 2009
Commodity contracts	Net Sales	$(9,923	)	$6,114
Foreign exchange contracts	Net Sales	(1,364	)	17,651
Commodity contracts	Cost of Goods Sold	$22,618		$47,558
Foreign exchange contracts	Cost of Goods Sold	—		—
Total derivative gain		$ 11,331		$71,323

As of March 29, 2009, the net deferred amount of derivative gains recognized in accumulated other comprehensive income was $90 thousand, net of tax. The company estimates these amounts will be transferred out of accumulated other comprehensive income and recognized within earnings over the next twelve months.

NOTE 7. Long-term debt and loan agreements

JBS USA Holdings and its direct and indirect subsidiaries have entered into various debt agreements in order to provide liquidity to operate the business on a go forward basis and, through the loan payable to JBS to fund the Acquisition of Smithfield. As of December 28, 2008 and March 29, 2009, debt outstanding consisted of the following (in thousands):

	December 28, 2008	March 29, 2009
Short-term debt
Secured credit facilities	$  36,186	$  36,828
Unsecured credit facilities	30,826	34,600
Total short-term debt	67,012	71,428
Current portion of long-debt:
Installment note payable	1,264	1,008
Capital lease obligations	3,235	3,095
Total current portion of long-term debt	4,499	4,103
Long-term debt:
Loans payable to JBS	658,588	658,597
Installment note payable	10,025	9,793
Senior credit facilities	114,673	210,187
Capital lease obligations	23,522	22,940
Long-term debt, less current portion	806,808	901,517
Total debt	$878,319	$977,048

F-25

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

The aggregate minimum principal maturities of debt for each of the five fiscal years and thereafter following March 29, 2009, are as follows (in thousands):

For the fiscal years ending December	Minimum principal maturities
2009 (remaining)	$  74,792
2010	662,898
2011	213,791
2012	3,186
2013	8,990
Thereafter	13,391
Total minimum principal maturities	$977,048

As of March 29, 2009, JBS USA Holdings had approximately $283.7 million of secured debt outstanding and approximately $26.7 million of outstanding letters of credit. The availability under our revolving credit facilities was $120.3 million as of March 29, 2009.

A summary of the components of interest expense, net is presented below (in thousands):

	Thirteen weeks ended
	March 30, 2008		March 29, 2009
Interest on:
Unsecured bank loans (approximately, 5.4% and -%)	$8,175		$       —
Unsecured credit facility (approximately, 7.4% and 5.1%)	209		42
Loans payable to JBS (approximately, -% and 6.4%)	—		10,621
Capital lease interest	227		381
Bank fees	98		383
Other miscellaneous interest charges (i)	185		1,973
Debt issuance cost amortization	606		1,123
Secured credit facility (US) (approximately, -% and 4.2%)	—		1,763
Secured credit facility (AU) (approximately, -% and 5.6%)	—		445
Less:
Capitalized interest	(114	)	(176	)
Interest income	(1,278	)	(1,963	)
Total interest expense, net	$8,108		$14,592

(i) Includes installment note interest expense of $0.20 million and $0.06 million as of March 30, 2008 and March 29, 2009, respectively.

Description of indebtedness

Senior Credit Facilities—On November 5, 2008, JBS USA, LLC (“JBS USA”), an indirect wholly owned subsidiary of JBS USA Holdings entered into a secured revolving loan credit agreement

F-26

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

(the “Credit Agreement”) that allows borrowings up to $400.0 million, and terminates on November 5, 2011. Up to $75.0 million of the revolving credit facility is available for the issuance of letters of credit. Borrowings that are index rate loans will bear interest at the prime rate plus a margin of 2.25%, the all-in rate as of March 29, 2009 was 5.50%, while LIBOR rate loans will bear interest at the applicable LIBOR rate, plus a margin of 3.25%, the all-in rate as of March 29, 2009 was 3.75%. At March 29, 2009, the borrowings totaled $210.2 million. Upon approval by the lender, LIBOR rate loans may be taken for one, two, or three month terms, (or six months at the discretion of the Agent).

Availability.    Availability under the Credit Agreement is subject to a borrowing base. The borrowing base is based on certain of JBS USA domestic wholly owned subsidiaries’ assets as described below, with the exclusion of JBS Five Rivers Cattle Feeding. The borrowing base consists of percentages of eligible accounts receivable, inventory, and supplies and less certain eligibility and availability reserves. As of March 29, 2009, our borrowing base totaled $303.6 million.

Security and guarantees.    Borrowings made by JBS USA are guaranteed by JBS Holdings and all domestic subsidiaries except Fiver Rivers are collateralized by a first priority perfected lien and interest in accounts receivable, inventory, and supplies.

Covenants.    The Credit Agreement contains customary representations and warranties and a financial covenant that requires a minimum fixed charge coverage ratio of not less than 1.15 to 1.00. This ratio is only applicable if borrowing availability falls below the minimum threshold which is the greater of 20% of the aggregate commitments or $70.0 million. The Credit Agreement also contains negative covenants that limit the ability of JBS USA and its subsidiaries to, among other things:

• have capital expenditures greater than $175 million per year;

• incur additional indebtedness;

• create liens on property, revenue, or assets;

• make certain loans or investments;

• sell or dispose of assets;

• pay certain dividends and other restricted payments;

• prepay or cancel certain indebtedness;

• dissolve, consolidate, merge, or acquire the business or assets of other entities;

• enter into joint ventures other than certain permitted joint ventures or create certain other subsidiaries;

• enter into new lines of business;

• enter into certain transactions with affiliates and certain permitted joint ventures;

F-27

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

• agree to restrictions on the ability of the subsidiaries to make dividends;

• agree to enter into negative pledges in favor of any other creditor; and

• enter into sale/leaseback transactions and operating leases.

The Credit Agreement also contains customary events of default, including failure to perform or observe terms, covenants or agreements included in the Credit Agreement, payment of defaults on other indebtedness, defaults on other indebtedness if the effect is to permit acceleration, entry of unsatisfied judgments or orders against a loan party or its subsidiaries, failure of any collateral document to create or maintain a priority lien, and certain events related to bankruptcy and insolvency or environmental matters. If an event of default occurs the lenders may, among other things, terminate their commitments, declare all outstanding borrowings to be immediately due and payable together with accrued interest, and fees and exercise remedies under the collateral documents relating to the Credit Agreement. At March 29, 2009, JBS USA was in compliance with all covenants.

Certain covenants of our indebtedness and debt guarantee terms include restrictions on our ability to pay dividends. As of December 28, 2008 and March 29, 2009, the Company had $22.7 million and $17.7 million, respectively, of retained earnings available to pay dividends.

Installment note payable—The installment note payable relates to JBS USA Holdings’ financing of a capital investment. The note bears interest at LIBOR, the rate as of March 29, 2009 was 0.49% plus a fixed margin of 1.75% per annum with payments due on the first of each month and matures on August 1, 2013.

Unsecured credit facility—Swift Australia entered into an Australian dollar (“A”) denominated $120 million unsecured credit facility on February 26, 2008 to fund working capital and letter of credit requirements. Under this facility A$80 million can be borrowed for cash needs and A$40 million is available to fund letters of credit. Borrowings are made at the cash advance rate (BBSY) plus a margin of 2.00% (includes commitment fee of 1.40%), the all-in rate as of March 29, 2009 was 5.10%. The credit facility contains certain financial covenants which require the Company to maintain predetermined ratio levels related to interest coverage, debt coverage and tangible net worth. As of March 29, 2009, the Company is in compliance with all covenants and has USD $34.6 million outstanding. This facility will terminate on October 1, 2009. We intend to seek to refinance this facility.

Secured credit/ multi-option bridge facility—JBS Southern entered into an Australian dollar denominated $80 million secured multi-option bridge facility on July 2, 2008 to fund working capital and letter of credit requirements. JBS Southern property and plant assets secure this bridge facility. Under this facility A$65 million can be borrowed for cash needs and to fund letters of credit. The remaining A$15 million is used to facilitate daily transactional limits. Borrowings are made at the cash advance rate (BBSY) plus a margin of 1.60%, the all-in rate as of March 29, 2009 was 5.60%. The multi-option bridge facility contains covenants and obligations which require the company to comply. As of March 29, 2009, the Company is in compliance with

F-28

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

all covenants and has USD $36.8 million outstanding. This facility originally had a fixed term and was set to expire on December 31, 2008. This facility’s term has been extended to September 30, 2009. We intend to seek to renew this facility.

The following four loan agreements sum to the $750 million described as debt related to the Acquisition in Note 2. As indicated below, as of March 29, 2009, there were no outstanding balances with respect to these four loan agreements.

$250 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 1.50% with a maturity date of June 30, 2008. The loan agreement contained customary representations and warranties. The loan agreement was guaranteed by JBS SA. On February 22, 2008, this debt was repaid by the Company using cash received from its parent which has been reflected as an additional capital contribution.

$150 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 0.75%. The loan matured on June 30, 2008. The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS. On February 27, 2008 this debt was repaid by the Company using cash received from its parent which has been reflected as an additional capital contribution.

$250 million credit agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured credit agreement with interest payable quarterly based on three month LIBOR plus a margin of 0.75%. The agreement matured on July 7, 2008. The credit agreement contained customary representations, warranties and negative covenants. There were no maintenance financial covenants but the agreement contained an incurrence Consolidated Net Indebtedness to EBITDA ratio of 3.75 to 1.00 prior to December 31, 2007 and 3.60 to 1.00 commencing on January 1, 2008 and ending on the Maturity Date. The credit agreement was guaranteed by JBS. On July 3, 2008 this credit agreement was repaid with funds received from JBS through a loan repayable to JBS.

$100 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement. The original 182 day loan agreement with interest payable at maturity based on six month LIBOR plus a margin of 0.8% matured on January 7, 2008. On January 3, 2008, an extension and modification agreement was signed changing the maturity date to July 7, 2008 and increasing the margin to 1.50%. The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS. On July 7, 2008 this loan agreement was repaid with funds received from JBS through a loan repayable to JBS.

The five loan agreements listed below sum to $750 million and are reflected in the line item “Loans Payable to JBS” in the table at the beginning of this footnote. After issuance, the Company repaid $91.4 million leaving a remaining balance owed as of March 29, 2009 of $658.6 million.

F-29

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

$100 million loan payable to JBS HU Liquidity—On April 28, 2008, the Company entered into an unsecured loan agreement with its parent, JBS, for $100 million with a maturity date of April 28, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the all-in rate as of March 29, 2009 was 6.08%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received from this loan were used to fund the purchase of Tasman Group (see Note 2). On March 27, 2009, this loan was assigned to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

$25 million loan payable to JBS HU Liquidity—On May 5, 2008, the Company entered into an unsecured loan agreement with JBS for $25 million with a maturity date of May 5, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the all-in rate of as of March 29, 2009 was 6.15%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received were used to fund operations. On March 27, 2009, this loan was assigned to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

$25 million loan payable to JBS HU Liquidity—On June 10, 2008, the Company entered into an unsecured loan agreement with JBS for $25 million with a maturity date of June 10, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the all-in rate as of March 29, 2009 was 5.94%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received from this loan were used to fund operations. On March 27, 2009, this loan was assigned to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

$350 million loan payable to JBS HU Liquidity—On June 30 2008, the Company entered into an unsecured loan agreement with JBS totaling $350 million with a maturity date of June 30, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, for $250 million the all-in rate as of March 29, 2009 was 6.12% and for $100 million the rate as of March 29, 2009 was 6.13%. The funds received were used to pay outstanding unsecured bank debt. On March 27, 2009, this loan was assigned to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

$250 million loan payable to JBS HU Liquidity—On October 21, 2008, the Company entered into an unsecured loan agreement with JBS for $250 million with a maturity date of October 21, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. As of March 29, 2009 the all-in rate was 7.13%. The funds received were used for the acquisition of Smithfield Beef and Five Rivers (see Note 3). On March 27, 2009, this loan was assigned to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

See Note 16 regarding subsequent event issuance of $700 million 11.625% senior unsecured notes by a subsidiary in April 2009.

F-30

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Capital and operating leases—JBS USA Holdings and certain of its subsidiaries lease the corporate headquarters in Greeley, Colorado under capital lease; six distribution facilities located in New Jersey, Florida, Nebraska, Arizona, Colorado and Texas; marketing liaison offices in the US, Korea, Japan, Mexico, China, and Taiwan; its distribution centers and warehouses in Australia; and a variety of equipment under operating lease agreements that expire in various years between 2008 and 2019. Future minimum lease payments at March 29, 2009, under capital and non-cancelable operating leases with terms exceeding one year are as follows (in thousands):

	Capitalized lease obligations		Noncancellable operating lease obligations
For the fiscal years ending December
2009 (remaining)	$  3,311		$13,063
2010	4,190		13,813
2011	3,585		11,402
2012	2,957		5,129
2013	2,874		4,355
Thereafter	13,618		5,415
Net minimum lease payments	30,535		$53,177
Less: Amount representing interest	(4,500	)
Present value of net minimum lease payments	$26,035

Rent expense associated with operating leases was $4.9 million and $10.4 million for the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively.

Note 8. Defined contribution plans

Defined contribution plans

The Company sponsors two tax-qualified employee savings and retirement plans (the “401(k) Plans”) covering its US based employees, both union and non-union. Pursuant to the 401(k) Plans, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plans. The 401(k) Plans provide for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plans. On July 8, 2008, the Company amended its 401(k) Plans described above by eliminating the immediate vesting and instituting a five year vesting schedule for all non-production employees and reducing the maximum Company match to an effective 2% from the former rate of 5%. The trustee of the 401(k) Plans, at the direction of each participant, invests the assets of the 401(k) Plans in participant designated investment options. The 401(k) Plans are intended to qualify under Section 401 of the Internal Revenue Code. The Company’s expenses related to the matching provisions of the 401(k) Plans totaled approximately $1.9 million and $1.2 million for

F-31

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively. One of the Company’s facilities participates in a multi-employer pension plan. The Company’s contributions to this plan, which are included in cost of goods sold in the statement of operations, were $81 thousand and $72 thousand for the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively. The Company also made contributions totaling $14 thousand and $28 thousand for the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively, to a multiemployer pension related to former employees at the former Nampa, Idaho plant pursuant to a settlement agreement. As these payments are made, they are recorded as a reduction of the pre-acquisition contingency.

Employees of Swift Australia do not participate in the Company’s 401(k) Plans. Under Australian law, Swift Australia contributes a percentage of employee compensation to a superannuation fund. This contribution approximates 9% of employee cash compensation as required under the Australian “Superannuation Act of 1997”. As the funds are administered by a third party, once this contribution is made to the Superannuation fund, Swift Australia has no obligation for payments to participants or oversight of the fund. The Company’s expenses related to contributions to this fund totaled $3.1 million and $3.8 million for the thirteen weeks ended March 30, 2008 and March 29, 2009, respectively.

Note 9. Deferred revenue

On October 22, 2008 we received a deposit in cash from a customer of $175 million for the customer to secure an exclusive right to collect a certain byproduct of the beef fabrication process in all of our US beef plants. This agreement was formalized in writing as the Raw Material Supply agreement on February 27, 2008. The customer advance payment was recorded as deferred revenue. As byproduct is delivered to the customer over the term of the agreement the deferred revenue is recognized as revenue in the statement of operations. To provide customers with security, in the unlikely event the Company was to default on our commitment, the payment is evidenced by a note which bears interest at 2 month LIBOR plus 200 basis points. In the event of default the note provides for a conversion into shares of common stock of JBS USA Holdings based on a formula stipulated in the note agreement. Assuming default had occurred on March 29, 2009 the conversion right under the promissory note would have equaled 11.34% of the outstanding common stock, equal to 11.34 shares. The note contains affirmative and negative covenants which require the Company to among other things: maintain defined market share; maintain certain tangible net worth levels; and comply in all material respects with the raw material supply agreement. The unamortized balance at March 29, 2009 was approximately $168.8 million.

Note 10. Related party transactions

JBS USA Holdings enters into transactions in the normal course of business with affiliates of JBS. Sales to affiliated companies included in net sales in the statement of operations for the thirteen weeks ended March 30, 2008 and March 29, 2009 were $5.4 million and $109.4 million, respectively. Amounts owed to JBS USA Holdings by affiliates as of March 30, 2008 and March 29,

F-32

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

2009 totaled approximately $5.8 million and $219.4 million, respectively. Purchases from affiliated companies included in the statement of operations for the thirteen weeks ended March 30, 2008 and March 29, 2009 were $0.4 million and $16.6 thousand, respectively. No amounts were due to affiliates by JBS USA Holdings at December 28, 2008 and March 29, 2009 related to these purchases.

The Company had a $0.6 million receivable from an unconsolidated affiliate at December 28, 2008 related to the funding of debt issuance costs on behalf of the affiliate, which was repaid in January 2009.

For the thirteen weeks ended March 30, 2008, the Company recorded $22 thousand of rental income related to real property leased to two of its executive officers. For the thirteen weeks ended March 29, 2009, the Company had no rental income related to real property leased to executive officers. At December 28, 2008 and at March 29, 2009, no balances were due to the Company related to these transactions.

The Company had a $25 thousand receivable from an executive officer at December 28, 2008, which was repaid on January 12, 2009.

The Company has a $50 thousand receivable from an executive officer at March 29, 2009 (see Note 16).

JBS USA Holdings received capital contributions from its parent of $450.0 million during the fifty-two weeks ended December 28, 2008, $50 million was used to fund operations and $400.0 million was used to repay debt. During the fifty-two weeks ended December 28, 2008, the Company entered into various intercompany loans with JBS. These were contributed to JBS USA and used to fund operations and complete the Tasman Acquisition and Smithfield Acquisition (see Notes 3, 4, and 7).

Guarantees—JBS SA has notes payable outstanding of approximately $300 million at March 29, 2009 that are due in 2016. The indenture governing the 2016 Notes requires any significant subsidiary (any subsidiary constituting at least 20% of JBS S.A.’s total assets or annual gross revenues, as shown on the latest financial statements of JBS S.A.) to guarantee all of JBS S.A.’s obligations under the 2016 Notes. The 2016 Notes are guaranteed by JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A.), our company and our subsidiaries, JBS USA Holdings, Inc., JBS USA, LLC and Swift Beef Company. Additional subsidiaries of JBS S.A. (including our subsidiaries) may be required to guarantee the 2016 Notes in the future.

Covenants. The indentures for the 2016 Notes contain customary negative covenants that limit the ability of JBS S.A. and its subsidiaries (including us) to, among other things:

• incur additional indebtedness;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to JBS S.A.’s shareholders;

F-33

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

• permit restrictions on dividends and other restricted payments by its subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

Events of default. The indentures for the 2016 Notes also contain customary events of default, including for failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding may declare such principal and accrued interest on the notes to be immediately due and payable.

Cattle supply and feeding agreement—Five Rivers is party to a cattle supply and feeding agreement with an unconsolidated affiliate (“the Unconsolidated Affiliate”). Five Rivers feeds and takes care of cattle owned by the Unconsolidated Affiliate. The Unconsolidated Affiliate pays Five Rivers for the cost of feed and medicine at cost plus a yardage fee on a per head per day basis. Beginning on June 23, 2009 or such earlier date on which Five Rivers’ feed yards are at least 85% full of cattle and ending on October 23, 2011, the Unconsolidated Affiliate agrees to maintain sufficient cattle on Five Rivers’ feed yards so that such feed yards are at least 85% full of cattle at all times. The agreement commenced on October 23, 2008 and continues until the last of the cattle on Five Rivers’ feed yards as of October 23, 2011 are shipped to the Unconsolidated Affiliate, a packer or another third party.

Cattle purchase and sale agreement—On October 7, 2008 JBS USA, LLC became party to a cattle purchase and sale agreement with the Unconsolidated Affiliate. Under this agreement, the Unconsolidated Affiliate agrees to sell to JBS USA, LLC, and JBS USA, LLC agrees to purchase from the Unconsolidated Affiliate, at least 500,000 cattle during each year from 2009 through 2011. The price paid by JBS USA, LLC is determined pursuant to JBS USA, LLC’s pricing grid in effect on the date of delivery. The grid used for the Unconsolidated Affiliate is identical to the grid used for unrelated third parties. If the cattle sold by the Unconsolidated Affiliate in a quarter result in a breakeven loss (selling price below accumulated cost to acquire the feeder animal and fatten it to delivered weight) then JBS USA, LLC will reimburse 40% of the average per head breakeven loss incurred by the Unconsolidated Affiliate on up to 125,000 head delivered to JBS USA, LLC in that quarter. If the cattle sold by the Unconsolidated Affiliate in a quarter result in a breakeven gain (selling price above the accumulated cost to acquire the feeder animal and fatten it to delivered weight), then JBS USA, LLC will receive from the Unconsolidated Affiliate an amount of cash equal to 40% of that per head gain on up to 125,000 head delivered to JBS USA, LLC in that quarter. There were no payments under the loss/profit sharing provisions of this agreement for the thirteen weeks ended March 29, 2009.

F-34

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Guarantee of unconsolidated affiliate’s revolving credit facility—The Unconsolidated Affiliate has a $600.0 million secured revolving credit facility with a commercial bank. Its parent company has entered into a keep-well agreement with its subsidiary (the Unconsolidated Affiliate) whereby it will make contributions to the Unconsolidated Affiliate if the Unconsolidated Affiliate is not in compliance with its financial covenants under this credit facility. If the Unconsolidated Affiliate defaults on its obligations under the credit facility and such default is not cured by its parent under the keep-well agreement, Five Rivers is obligated for up to $250.0 million of guaranteed borrowings plus certain other obligations and costs under this credit facility. This credit facility and the guarantee thereof are secured solely by the assets of the Unconsolidated Affiliate and the net assets of Five Rivers. This credit facility matures on October 7, 2011. This credit facility is used to acquire cattle which are then fed in the Five Rivers feed yards pursuant to the cattle supply and feeding agreement described above. The finished cattle are sold to JBS USA, LLC under the cattle purchase and sale agreement discussed above.

Credit facility to the unconsolidated affiliate—Five Rivers is party to an agreement with the Unconsolidated Affiliate pursuant to which Five Rivers has agreed to loan up to $200.0 million in revolving loans to the Unconsolidated Affiliate. The loans are used by the Unconsolidated Affiliate to acquire feeder animals which are placed in Five Rivers feed yards for finishing. Borrowings accrue interest at a per annum rate of LIBOR plus 2.25% or base rate plus 1.0% and interest is payable at least quarterly. This credit facility matures October 7, 2011. During the thirteen weeks ended March 29, 2009, average borrowings were approximately $149.0 million and total interest accrued was approximately $1.6 million which was recognized as interest income on the statement of operations. As of March 29, 2009 the balance of the note was $171.4 million including accrued interest of $40 thousand.

Variable interest entities—As of March 29, 2009 the Company holds variable interests in the Unconsolidated Affiliate, which is considered a variable interest entity under FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities. The Company has determined that it is not the primary beneficiary of the Unconsolidated Affiliate but has significant variable interests in the entity. The Company’s significant variable interests are listed below and discussed further above:

• Five Rivers has agreed to provide up to $200 million in loans to the Unconsolidated Affiliate;

• Five Rivers’ guarantee of up to $250 million of the Unconsolidated Affiliate’s borrowings under its revolving credit facility plus certain other obligations and costs, which is secured by and limited to the net assets of Five Rivers; and

• JBS USA, LLC’s rights and obligations under the cattle purchase and sale agreement.

The Company’s maximum exposure to loss related to these variable interests is limited to the lesser of the net assets of Five Rivers (including loans made to the Unconsolidated Affiliate) or $250 million plus certain other obligations and costs. As of March 29, 2009, the carrying value of Five Rivers’ net assets is $334.8 million. Potential losses under the terms of the cattle purchase and sale agreement depend on future market conditions.

F-35

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Note 11. Income taxes

The pre-tax income (loss) on which the provision for income taxes was computed is as follows (in thousands):

	Thirteen weeks ended
	March 30, 2008		March 29, 2009
Domestic	$(28,962	)	$2,720
Foreign	16,433		441
Total	$(12,529	)	$3,161

Income tax expense includes the following current and deferred provisions (in thousands):

	Thirteen weeks ended
	March 30, 2008	March 29, 2009
Current provision:
Federal	$     —	$211
State	183	93
Foreign	5,255	501
Total current tax expense	5,438	805
Deferred provision:
Federal	161	104
State	14	—
Foreign	—	—
Total deferred tax expense	175	104
Total income tax expense	$5,613	$909

Temporary differences that gave rise to a significant portion of the deferred tax assets (liabilities) include federal and state net operating loss carryforwards, foreign capital loss carryforwards, foreign exchange gain and depreciable and amortizable assets.

The total amount of the deferred tax assets (liabilities) are as follows (in thousands):

	December 28, 2008		March 29, 2009
Total deferred tax liability	$(305,915	)	$(306,505	)
Total deferred tax asset	210,389		210,704
Valuation allowance	(42,826	)	(42,826	)
Net deferred tax assets	167,563		167,878
Net deferred tax liability	$(138,352	)	$(138,627	)

F-36

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

At December 28, 2008, JBS USA Holdings has recorded deferred tax assets of $141.0 million for loss carryforwards expiring in the years 2009 through 2029. In addition, JBS USA Holdings has $14.3 million of tax credits of which $10.3 million will expire in the years 2009 through 2028 and $4.0 million will carryforward indefinitely.

Section 382 of the Internal Revenue Code of 1986, as amended, imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its net operating losses to reduce its tax liability. JBS USA Holdings experienced an ownership change in January of 2007 and July of 2007. JBS USA Holdings believes that its net operating losses exceed the Section 382 limitation in the amount of $14 million.

The valuation allowance as of December 28, 2008 and March 29, 2009 was primarily related to loss and credit carryforwards that, in the judgment of management, will not be realized. Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 28, 2008 and March 29, 2009 will be allocated to income tax expense, pursuant to FAS 141R.

JBS USA Holdings deems all of its foreign investments to be permanent in nature and does not provide for taxes on permanently reinvested earnings. It is not practicable to determine the amount of incremental taxes that might arise were these earnings to be remitted.

JBS USA Holdings follows the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). JBS USA Holdings’ unrecognized tax benefits are $8.1 million, the recognition of which would not have a material impact on the effective rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Balance at December 28, 2008	$8,100
Additions based on tax positions related to the current period	—
Additions for tax positions of prior years	—
Reductions for tax positions of prior years	—
Settlements	(40	)
Balance at March 29, 2009	$8,060

JBS USA Holdings recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 28, 2008, accrued interest and penalties were $5 thousand. As of March 29, 2009, accrued interest and penalty amounts related to uncertain tax positions were reduced to zero as a result of a settlement. The unrecognized tax benefit and related penalty and interest balances at March 29, 2009 are not expected to change within the next twelve months.

JBS USA Holdings files income tax returns in the U.S. and in various states and foreign countries. JBS USA Holdings has been audited for US Federal income tax purposes through the May 2004 tax year. No other major jurisdictions where JBS USA Holdings operates have been under audit.

F-37

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Note 12. Commitments and contingencies

Swift Beef is a defendant in a lawsuit entitled United States of America, ex rel, Ali Bahrani v. ConAgra, Inc., ConAgra Foods, Inc., ConAgra Hide Division, ConAgra Beef Company and Monfort, Inc., filed in the United States District Court for the District of Colorado in May 2000 by the relator on behalf of the United States of America and himself for alleged violations of the False Claims Act. Under the False Claims Act, a private litigant, termed the “relator,” may file a civil action on the United States government’s behalf against another party for violation of the statute, which, if proven, would entitle the relator to recover a portion of any amounts recovered by the government. The lawsuit alleges that the defendants violated the False Claims Act by forging and/or improperly altering USDA export certificates used from 1991 to 2002 to export beef, pork, poultry and bovine hides to foreign countries. The lawsuit seeks to recover three times the actual damages allegedly sustained by the government, plus per-violation civil penalties.

On December 30, 2004, the United States District Court granted the defendants’ motions for summary judgment on all claims. The United States Court of Appeals for the Tenth Circuit reversed the summary judgment on October 12, 2006 and remanded the case to the trial court for further proceedings consistent with the court’s opinion. Defendants filed a Motion for Rehearing En Banc on October 26, 2006. On May 10, 2007, the Tenth Circuit denied that motion.

Issues in the case were bifurcated and two separate jury trials were held, the first trial centering on beef certificates was held from April 28, 2008, to April 29, 2008 and the second trial centering on bovine hide certificates was held from March 9 to March 19, 2009. Following the April trial, a verdict with respect to the beef certificates was returned ruling in favor of the Company on all counts. Following the March trial, a verdict with respect to the bovine hide certificates was returned ruling in favor of Company on 99.5% of the claims. Specifically, Company prevailed with respect to approximately 995 bovine hide certificates and the relator prevailed with respect to only 5 certificates. Based on the False Claims Act, this verdict resulted in a judgment against Company of $28 thousand. The relator’s right to appeal the March trial verdict lapses in the second fiscal quarter of 2009.

The Company is also a party to a number of other lawsuits and claims arising out of the operation of its businesses. Management believes the ultimate resolution of such matters should not have a material adverse effect on the Company’s financial condition, results of operations, or liquidity. Attorney fees are expensed as incurred.

Commitments

JBS USA Holdings enters into purchase agreements for livestock which require the purchase of either minimum quantities or the total production of the facility over a specified period of time. At March 29, 2009, the Company had commitments to purchase 31.9 million hogs through 2014 and approximately 29% or approximately 2.2 million of our estimated cattle needs through short-term contracts. As the final price paid cannot be determined until after delivery, the Company has estimated market prices based on Chicago Mercantile Exchange traded futures

F-38

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

contracts and applied those to either the minimum quantities required per the contract or management’s estimates of livestock to be purchased under certain contracts to determine its estimated commitments for the purchase of livestock, which are as follows (in thousands):

Estimated livestock purchase commitments for fiscal years ended:
2009 (remaining)	$3,178,822
2010	1,088,085
2011	808,777
2012	722,241
2013	489,297
Thereafter	98,176

Through use of these contracts, the Company purchased approximately 69% of its hog slaughter needs during the thirteen weeks ended March 29, 2009.

Note 13. Business segments

JBS USA Holdings is organized into two operating segments, which are also the Company’s reportable segments: Beef and Pork. In the Beef segment, we conduct our domestic and international beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition in 2008 and the beef, lamb, and sheep operations we acquired in the Tasman Acquisition in 2008. In the Pork segment, we conduct our domestic pork and lamb processing business. Segment operating performance is evaluated by the Chief Operating Decision Maker (“CODM”), as defined in SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, based on Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”). EBITDA is not intended to represent cash from operations as defined by GAAP and should not be considered as an alternative to cash flow or operating income as measured by GAAP. JBS USA believes EBITDA provides useful information about operating performance, leverage, and liquidity. The accounting policies of the segments are consistent with those described in Note 4. All intersegment sales and transfers are eliminated in consolidation.

On November 5, 2008, the Company entered into a new asset based revolving credit facility (see Note 7). The definition of EBITDA contained in that agreement requires EBITDA to be calculated as net income adding back taxes, depreciation, amortization and interest and excluding certain non-cash items which affect net income. The Company has changed its definition of EBITDA to align with the definition contained in that agreement and as such the amounts below reflect the new definition.

Beef—The majority of Beef’s revenues are generated from US and Australian sales of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, Beef also sells beef by-products to the variety meat, feed processing, fertilizer, automotive, and pet food industries. Furthermore, Australia’s Foods Division produces value-added meat products including toppings for pizzas. On May 2, 2008, JBS Southern completed the Tasman Acquisition and now operates six processing facilities and one feedlot which are reported in the Beef segment (see Note 2). On October 23, 2008, the Company

F-39

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

completed the Smithfield Acquisition adding four plants and eleven feedlots which are reported in the Beef segment (see Note 3).

Pork—A significant portion of Pork’s revenues are generated from the sale of products predominantly to retailers of fresh pork including trimmed cuts such as loins, roasts, chops, butts, picnics, and ribs. Other pork products, including hams, bellies, and trimmings are sold predominantly to further processors who, in turn, manufacture bacon, sausage, and deli and luncheon meats. The remaining sales are derived from by-products and from further-processed, higher-margin products. The lamb slaughter facility is included in Pork and accounts for less than 1% of total net sales.

Corporate and other—Includes certain revenues, expenses, and assets not directly attributable to the primary segments, as well as eliminations resulting from the consolidation process.

	Thirteen weeks ended
	March 30, 2008		March 29, 2009
	(in thousands)		(in thousands)
Net sales
Beef	$1,935,142		$2,680,205
Pork	535,509		526,283
Corporate and other.	(8,994	)	(10,149	)
Total	$2,461,657		$3,196,339
Depreciation and amortization
Beef	$     14,114		$     26,568
Pork	5,025		6,784
Total	$     19,139		$33,352
EBITDA
Beef	$    (13,517	)	$     59,670
Pork	15,640		7,478
Corporate	—		(20,938	)
Total	2,123		46,210
Depreciation and amortization	(19,139	)	(33,352	)
Interest expense, net	(8,108	)	(14,592	)
Foreign currency transaction gains	12,614		5,075
Loss on sales of property, plant and equipment	(19	)	(180	)
Income (loss) before income tax expense	(12,529	)	3,161
Income tax expense	5,613		909
Net income (loss)	$(18,142	)	$2,252
Capital expenditures
Beef	$       8,727		$     26,897
Pork	2,949		8,292
Total	$     11,676		$     35,189

F-40

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Sales by geographical area based on the location of the facility recognizing the sale (in thousands):

	Thirteen weeks ended
	March 30, 2008	March 29, 2009
Net sales
United States	$2,072,651	$2,817,070
Australia	389,006	379,269
Total	$2,461,657	$3,196,339

Sales to unaffiliated customers by location of customer (in thousands):

	Thirteen weeks ended
	March 30, 2008	March 29, 2009
United States	$1,772,254	$2,533,813
Japan	145,485	155,387
Australia	104,041	106,748
Mexico	127,122	97,924
China	55,501	67,295
Other	257,254	235,172
Total	$2,461,657	$3,196,339

No single customer or supplier accounted for more than 10% of net sales or cost of goods sold, respectively, during the thirteen weeks ended March 29, 2009.

Corporate and other—Includes certain assets not directly attributable to the primary segments as well as the parent companies’ investment in each operating subsidiary. Also includes eliminations resulting from the consolidation process.

Total assets by segments (in thousands):

	December 28, 2008		March 29, 2009
	(in thousands)		(in thousands)
Total assets
Beef	$2,838,619		$2,760,533
Pork	519,995		524,553
Corporate and other	(43,043	)	23,729
Total	$3,315,571		$3,308,815

F-41

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Long-lived tangible assets by location of assets (in thousands):

	December 28, 2008	March 29, 2009
Long-lived assets:
United States	$   906,044	$1,108,901
Australia	360,400	364,687
Other	83	97
Total	$1,266,527	$1,473,685

Long-lived assets consist of (1) property, plant, and equipment, net of depreciation, and (2) other assets less debt issuance costs of $12.5 million and $11.5 million as of December 28, 2008 and March 29, 2009, respectively.

Note 14. Supplemental guarantor information

JBS USA Holdings’ income and cash flow is generated by its subsidiaries. As a result, funds necessary to meet the Company’s debt service obligations, including its obligations as Guarantor under the unsecured debt due 2014 of its subsidiary JBS USA, LLC (see Note 16) are provided in large part by distributions or advances from its subsidiaries. Under certain circumstances, contractual and legal restrictions, as well as JBS USA Holding’s financial condition and operating requirements and those of certain domestic subsidiaries, could limit the Company’s ability to obtain cash for the purpose of meeting its debt service obligation including the payment of principal and interest on the unsecured debt offering due 2014.

The following condensed financial statements set forth JBS USA Holdings’ balance sheets as of December 28, 2008 and March 29, 2009, statements of earnings for the thirteen weeks ended March 30, 2008 and March 29, 2009 and statements of cash flows for the thirteen weeks ended March 30, 2008 and March 29,2009. Effective with the date of the debt issuance, JBS USA, LLC’s unsecured debt offering due 2014 has been guaranteed by JBS USA Holdings (the “Parent Guarantor”), JBS USA, LLC (the “Issuer”) and each of JBS USA Holding’s domestic subsidiaries (the “Subsidiary Guarantors”), excluding Five Rivers Cattle Feeding. The financial information is presented under the following column headings: Parent Guarantor, Issuer, Subsidiary Guarantors, and Subsidiary Non-Guarantors. “Subsidiary Non-Guarantors” include the foreign subsidiaries of JBS USA Holdings, which include Swift Refrigerated Foods S.A. de C.V., Kabushiki Kaisha SAC Japan, Swift Australia Pty. Ltd, and the domestic subsidiary, Five Rivers Cattle Feeding. For purposes of this Guarantor/Non guarantor presentation, investments in JBS USA Holdings’ subsidiaries are accounted for on the equity method. Accordingly, entries necessary to consolidate the Parent Guarantor, the Issuer, and all of its subsidiaries are reflected in the eliminations column. Separate complete financial statements of the Issuer and the Subsidiary Guarantors would not provide additional material information that would be useful in assessing the financial composition of the Issuer or the Subsidiary Guarantors.

F-42

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

All of the Subsidiary Guarantors are wholly-owned subsidiaries of JBS USA, LLC and their guarantees are full and unconditional, and joint and several. There are no provisions in the indentures governing the unsecured debt due 2014 or other existing agreements that would prevent holders of guaranteed obligations from taking immediate action against the Parent Guarantor or any Subsidiary Guarantor in the event of default. The ability of the Subsidiary Guarantors to pay dividends or make loans or other payments to JBS USA Holdings’ depends on their earnings, capital requirements, and general financial condition. The Parent Guarantor is a holding company with no operations of its own, and its assets consist of financing costs associated with, and the member’s interest of, JBS USA, LLC. Consequently, its ability to pay amounts under its guarantee depends on the earnings and cash flows of JBS USA, LLC and its subsidiaries and the ability of these entities to pay dividends or advance funds to the Parent Guarantor.

F-43

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Condensed consolidating balance sheet

December 28, 2008

(in thousands)

	JBS USA Holdings parent guarantor	JBS USA, LLC issuer	Subsidiary guarantors	Subsidiary non-guarantors	Eliminations/ adjustments		Total
Assets
Current assets:
Cash and cash equivalents	$            36	$     32,096	$       4,372	$   218,281	$              —		$   254,785
Accounts receivables, net	—	100,752	404,446	181,324	(97,537	)	588,985
Net intercompany receivables	—	889,097	—	21,786	(910,883	)	—
Inventories, net	—	—	440,696	208,304	—		649,000
Deferred income taxes, net	—	—	14,544	21	(9,160	)	5,405
Other current assets	373	21,704	87,384	14,972	(38,912	)	85,521
Total current assets	409	1,043,649	951,442	644,688	(1,056,492	)	1,583,696
Property, plant and equipment, net	—	—	810,684	418,632	—		1,229,316
Notes receivable	—	—	1,541	89	—		1,630
Other assets	11,640	104,661	432,888	66,344	(114,604	)	500,929
Net investment in and advances to subsidiaries	2,322,622	1,410,127	—	—	(3,732,749	)	—
Total assets	$2,334,671	$2,558,437	$2,196,555	$1,129,753	$(4,903,845	)	$3,315,571
Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$             —	$             —	$             —	$     67,012	$             —		$     67,012
Current portion of long term debt	—	920	2,028	1,551	—		4,499
Current portion of deferred revenue	10,400	302	24,916	2,601	—		38,219
Net Intercompany payable	—	—	910,883	—	(910,883	)	—
Accounts payable	96,291	—	112,354	81,397	(97,345	)	192,697
Book overdraft	—	8,377	134,878	17,277	—		160,532
Accrued liabilities able	17,366	81,246	157,353	66,209	(39,105	)	283,069
Deferred income taxes, net	1,182	7,977	—	8,587	(9,159	)	8,587
Total current liabilities	125,239	98,822	1,342,412	244,634	(1,056,492	)	754,615
Long-term debt, excluding current portion	658,588	123,968	21,960	2,292	—		806,808
Deferred revenue, excluding current portion	162,594	8	462	—	—		163,064
Deferred income taxes, net	—	—	263,890	1,384	(114,604	)	150,670
Other noncurrent liabilities Commitments and contingencies	—	13,017	17,656	21,491	—		52,164
Total liabilities	946,421	235,815	1,646,380	269,801	(1,171,096	)	1,927,321
Total stockholder’s equity	1,388,250	2,322,622	550,175	859,952	(3,732,749	)	1,388,250
Total liabilities and stockholder’s equity	$2,334,671	$2,558,437	$2,196,555	$1,129,753	$(4,903,845	)	$3,315,571

F-44

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Condensed consolidating balance sheet

March 29, 2009

(in thousands)

	JBS USA Holdings parent guarantor	JBS USA, LLC issuer	Subsidiary guarantors		Subsidiary non-guarantors	Eliminations/ adjustments		Total
Assets
Current assets:
Cash and cash equivalents	$            36	$     95,697	$       8,674		$     52,330	$                —		$   156,737
Accounts receivables, net	—	142,905	348,037		164,387	(141,169	)	514,160
Net intercompany receivables	—	874,470	—		28,262	(902,732	)	—
Inventories, net	—	—	433,096		216,930	—		650,026
Deferred income taxes, net	—	—	14,263		21	(9,159	)	5,125
Other current assets	10,179	26,210	70,114		13,628	(47,701	)	72,430
Total current assets	10,215	1,139,282	874,184		475,558	(1,100,761	)	1,398,478
Property, plant and equipment, net	—	—	816,597		424,458	—		1,241,055
Notes receivable	—	895,000	1,415		171,356	(895,000	)	172,771
Other assets	13,888	102,392	427,791		66,940	(114,500	)	496,511
Net investment in and advances to subsidiaries	2,350,412	538,417	—		—	(2,888,829	)	—
Total assets	$2,374,515	$2,675,091	$ 2,119,987		$1,138,312	$(4,999,090	)	$3,308,815
Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$            —	$             —	$             —		$     71,428	$               —		$     71,428
Current portion of long-term debt	—	920	1,608		1,575	—		4,103
Current portion of deferred revenue	10,400	238	10,876		2,198	—		23,712
Net intercompany payable	—	—	902,732		—	(902,732	)	—
Accounts payable	123,070	—	69,221		83,394	(123,070	)	152,615
Book overdraft	—	6,983	103,694		10,255	—		120,932
Accrued liabilities	27,974	77,287	166,281		65,514	(65,800	)	271,256
Deferred incomes taxes, net	1,182	7,977	—		8,723	(9,159	)	8,723
Total current liabilities	162,626	93,405	1,254,412		243,087	(1,100,761	)	652,769
Long-term debt, excluding current portion	658,597	219,252	21,743		1,925	—		901,517
Notes payable	—	—	895,000		—	(895,000	)	—
Deferred revenue, excluding current portion	158,353	8	362		—	—		158,723
Deferred income taxes, net	—	—	263,890		1,384	(114,500	)	150,774
Other noncurrent liabilities	—	12,014	16,337		21,742	—		50,093
Total liabilities	979,576	324,679	2,451,744		268,138	(2,110,261	)	1,913,876
Total stockholder’s equity	1,394,939	2,350,412	(331,757	)	870,174	(2,888,829	)	1,394,939
Total liabilities and stockholder’s equity	$2,374,515	$2,675,091	$2,119,987		$1,138,312	$(4,999,090	)	$3,308,815

F-45

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Statements of operations

Thirteen weeks ended March 30, 2008

(in thousands)

	JBS USA Holdings parent guarantor		JBS USA, LLC issuer		Subsidiary guarantors		Subsidiary non- guarantors		Eliminations/ adjustments	Total
Net sales	$         —		$        —		$2,072,651		$389,006		$        —	$2,461,657
Cost of goods sold	—		—		2,071,626		379,787		—	2,451,413
Gross profit	—		—		1,025		9,219		—	10,244
Selling, general and administrative expenses	—		—		26,765		4,277		—	31,042
Foreign currency translation gains	—		—		(26	)	(12,588	)	—	(12,614	)
Other income	—		—		(3,543	)	(239	)		(3,782	)
Loss/(gain) on sales of property, plant and equipment	—		—		(151	)	170			19
Interest expense, net	8,772		—		(305	)	(359	)	—	8,108
Income (loss) before income taxes	(8,772	)	—		(21,715	)	17,958		—	(12,529	)
Income tax expense	—		—		1,827		3,786		—	5,613
Income (loss) before equity in earnings of consolidated subsidiaries	(8,772	)	—		(23,542	)	14,172		—	(18,142	)
Equity in earnings of consolidated subsidiaries	(9,370	)	(9,370	)	—		—		18,740	—
Net income (loss)	$(18,142	)	$(9,370	)	$   (23,542	)	$  14,172		$18,740	$   (18,142	)

Thirteen weeks ended March 29, 2009

(in thousands)

	JBS USA Holdings parent guarantor		JBS USA, LLC issuer	Subsidiary guarantors		Subsidiary non- guarantors		Eliminations/ adjustments		Total
Net sales	$          —		$       —	$2,670,436		$525,903		$         —		$3,196,339
Cost of goods sold	—		—	2,611,139		512,219		—		3,123,358
Gross profit	—		—	59,297		13,684		—		72,981
Selling, general and administrative expenses	20,938		—	31,704		8,956		—		61,598
Foreign currency translation gains	—		—	(93	)	(4,982	)	—		(5,075	)
Other income	—			(1,138	)	(337	)			(1,475	)
Loss/(gain) on sales of property, plant and equipment	—			61		119				180
Interest expense, net	12,217		—	3,134		(759	)	—		14,592
Income (loss) before income taxes	(33,155	)	—	25,629		10,687		—		3,161
Income tax expense	(12,035	)	—	9,791		3,153		—		909
Income (loss) before equity in earnings of consolidated subsidiaries	(21,120	)	—	15,838		7,534		—		2,252
Equity in earnings of consolidated subsidiaries	23,372		23,372	—		—		(46,744	)	—
Net income (loss)	$    2,252		$23,372	$     15,838		$    7,534		$(46,744	)	$       2,252

F-46

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Statement of cash flows

Thirteen weeks ended March 30, 2008

(in thousands)

	JBS USA Holdings parent guarantor		JBS USA, LLC issuer		Subsidiary guarantors		Subsidiary non- guarantors		Eliminations/ adjustments		Total
Net cash flows provided by (used in) operating activities	$  (23,376	)	$    (4,159	)	$(124,219	)	$   22,843		$          —		$(128,911	)
Cash flows from investing activities:
Purchases of property, plant and equipment	—		(150	)	(8,422	)	(3,104	)	—		(11,676	)
Proceeds from sales of property, plant, and equipment	—		—		4		36		—		40
Investment activity with subsidiaries	(26,624	)	—		—		—		26,624		—
Investment in bonds	—		(4,900	)	—		—		—		(4,900	)
Proceeds from sale of non-operating property	—		—		1,160		—		—		1,160
Net cash flows provided by (used in) investing activities	(26,624	)	(5,050	)	(7,258	)	(3,068	)	26,624		(15,376	)
Cash flows from financing activities:
Payments of short-term debt	(400,000	)	—		—		(16,980	)	—		(416,980	)
Payments of long term debt and capital lease obligation	—		(118	)	(250	)	—		—		(368	)
Change in overdraft balances	—		(6,224	)	(4,293	)	—		—		(10,517	)
Capital contributions	450,000		50,000		—		—		(50,000	)	450,000
Dividend payment to parent	—		(23,376	)	—		—		23,376		—
Net investments and advances/(distributions)	—		(124,490	)	134,543		(10,053	)	—		—
Net cash flows provided by (used in) financing activities	50,000		(104,208	)	130,000		(27,033	)	(26,624	)	22,135
Effect of exchange rates on cash	—		—		—		634		—		634
Net change in cash and cash equivalents	—		(113,417	)	(1,477	)	(6,624	)	—		(121,518	)
Cash and cash equivalents, beginning of period	37		184,012		2,047		12,787		—		198,883
Cash and cash equivalents, end of period	$          37		$    70,595		$         570		$     6,163		$          —		$   77,365

F-47

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Statement of cash flows

Thirteen weeks ended March 29, 2009

(in thousands)

	JBS USA Holdings parent guarantor	JBS USA, LLC issuer		Subsidiary guarantors	Subsidiary non- guarantors	Eliminations/ adjustments	Total
Net cash flows provided by operating activities	$ —	$(31,317	)	$   56,315	$    26,005	$—	$    51,003
Cash flows from investing activities:
Purchase of property, plant and equipment	—	—		(26,712)	(8,477)	—	(35,189)
Proceeds from sales of property, plant and equipment	—	—		—	15	—	15
Issuance of notes receivable	—	—		—	(171,266)	—	(171,266)
Net cash flows provided by (used in) investing activities	—	—		(26,712)	(179,728)	—	(206,440)
Cash flows from financing activities:
Net borrowings (payments) of revolving credit facility	—	95,514		—	1,292	—	96,806
Payments of short-term debt	—	—		(257)	(77)	—	(334)
Payments of long-term debt and capital lease obligations	—	(230)		(566)	(386)	—	(1,182)
Change in overdraft balances	—	(1,394)		(31,185)	(7,022)	—	(39,601)
Net investments and advances/(distributions)	—	1,028		6,707	(7,735)	—	—
Net cash flows provided by (used in) financing activities	—	94,918		(25,301)	(13,928)	—	55,689
Effect of exchange rates on cash	—	—		—	1,700	—	1,700
Net change in cash and cash equivalents	—	63,601		4,302	(165,951)	—	(98,048)
Cash and cash equivalents, beginning of period	36	32,096		4,372	218,281	—	254,785
Cash and cash equivalents, end of period	$36	$   95,697		$     8,674	$    52,330	$—	$  156,737

F-48

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

Note 15. Terminated acquisition

On February 29, 2008, JBS USA Holdings entered into an agreement with National Beef to acquire all of the outstanding membership interests for a combination of approximately $465.0 million cash, $95.0 million in JBS common stock (the purchase price) and the assumption of debt.

On October 20, 2008, the United States Department of Justice (“DOJ”) filed an injunction to stop the Company’s planned acquisition of National Beef.

On February 18, 2009, an agreement was reached with the sellers of National Beef whereby JBS USA Holdings will terminate the acquisition process of National Beef effective February 23, 2009. All related litigation with the DOJ was terminated. As a result of the agreement JBS USA Holdings agreed to reimburse the seller’s shareholders a total $19.9 million as full and final settlement of any and all liabilities related to the potential acquisition. This payment including related legal costs is reflected in Corporate and other segment for the thirteen weeks ended March 29, 2009.

Note 16. Subsequent events

On April 27, 2009 the Credit Agreement was amended to allow the execution of the senior unsecured notes of JBS USA, LLC described below. Under the amendment, the existing limitation on distributions between JBS USA, LLC and JBS USA Holdings was amended to allow for the proceeds of the senior unsecured bond offering, less transaction expenses and $100.0 million retained by JBS USA, LLC to be remitted to JBS USA Holdings as a one time distribution. Also, the unused line fee was increased from 37.5 basis points to 50 basis points.

On April 27, 2009, JBS USA, LLC, a wholly owned subsidiary, issued $700 million of senior unsecured notes. Interest on these notes accrues at a rate of 11.625% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009. The principal amount of these notes is payable in full on May 1, 2014. The proceeds net of expenses were $650.8 million and were used to repay $100.0 million on the Credit Agreement and the balance was used to repay intercompany debt and accrued interest owed to JBS S.A. These notes are guaranteed by JBS S.A., us, JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A.), and each of our U.S. restricted subsidiaries that guarantee our senior secured revolving facility (subject to certain exceptions).

Covenants.    The indenture for the 11.625% senior unsecured notes due 2014 contains customary negative covenants that limit our and our restricted subsidiaries’ ability to, among other things:

• incur additional indebtedness based on net debt to EBITDA ratio;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to our shareholders;

F-49

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to condensed consolidated financial statements

• permit restrictions on dividends and other restricted payments by its restricted subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

Events of default.    The indenture also contains customary events of default, including failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding may declare such principal and accrued interest on the notes to be immediately due and payable.

On April 27, 2009, JBS USA Holdings refinanced its five separate intercompany notes with JBS HU Liquidity Management LLC into one note with a stated interest rate of 12% and a 10 year maturity.

On April 28, 2009, the Company received $50 thousand; including principal plus interest from an executive officer (see Note 10).

Beginning in mid-April 2009 the world press began publicizing the occurrence of regionalized influenza outbreaks which were linked on a preliminary basis to a hybrid avian/swine/human virus. As a result commencing on April 14, 2009 several foreign countries including Russia, Thailand, Ukraine, Communist China, and the Philippines closed their borders to some or all pork produced in the affected states in the USA or other affected regions in the world. The company is not able to assess whether or when the influenza outbreak might lessen or whether or when additional countries might impose restrictions on the importation of pork products from the USA, nor whether or when the existing import bans might be lifted.

On April 24, 2009, the Company issued a forgivable promissory note in the amount of $235 thousand to an officer of the Company. The note bears interest at 5.25% and will be forgiven in four equal installments on the anniversary date of the loan as long as the executive continues to be an employee. If the employee is terminated for cause the entire note balance plus accrued interest will be due and payable on the termination date.

F-50

700 North Pearl, Suite 2000 Dallas, Texas 75201 Telephone: 214-969-7007 Fax: 214-953-0722

Board of Directors

JBS USA Holdings, Inc.

Greeley, Colorado

We have audited the accompanying consolidated balance sheet of JBS USA Holdings, Inc. as of December 28, 2008 and the related consolidated statements of operations, stockholder’s equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of JBS USA Holdings, Inc. at December 28, 2008, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO Seidman, LLP

Dallas, Texas

July 21, 2009

F-51

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Consolidated balance sheet

December 28, 2008

(dollars in thousands, except per share data)

Assets
Current assets:
Cash and cash equivalents	$   254,785
Accounts receivable, net of allowance for doubtful accounts of $4,142	588,985
Inventories, net	649,000
Deferred income taxes, net	5,405
Other current assets	85,521
Total current assets	1,583,696
Property, plant, and equipment, net	1,229,316
Goodwill	147,855
Other intangibles, net	304,967
Notes Receivable	1,630
Deferred income taxes, net	15,500
Other assets	32,607
Total assets	$3,315,571
Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$      67,012
Current portion of long-term debt	4,499
Current portion of deferred revenue	38,219
Accounts payable	192,697
Book overdraft	160,532
Deferred income taxes, net	8,587
Accrued liabilities	283,069
Total current liabilities	754,615
Long-term debt, excluding current portion	806,808
Deferred revenue	163,064
Deferred income taxes, net	150,670
Other non-current liabilities	52,164
Total liabilities	1,927,321
Commitments and contingencies
Stockholder’s equity:
Common stock: par value $.01 per share, 500,000,000 authorized, 100 shares issued and outstanding	—
Additional paid-in capital	1,400,159
Retained earnings	49,512
Accumulated other comprehensive loss	(61,421	)
Total stockholder’s equity	1,388,250
Total liabilities and stockholder’s equity	$3,315,571

The accompanying notes are an integral part of this consolidated financial statement.

F-52

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Consolidated statement of operations

For the fifty-two weeks ended December 28, 2008

(dollars in thousands, except per share data )

	The fifty-two weeks ended December 28, 2008
Gross sales	$12,424,274
Less deductions from sales	(61,993	)
Net sales	12,362,281
Cost of goods sold	11,917,777
Gross profit	444,504
Selling, general, and administrative expenses	148,785
Foreign currency transaction losses	75,995
Other income, net	(10,107	)
Loss on sales of property, plant, and equipment	1,082
Interest expense, net	36,358
Income before income tax expense	192,391
Income tax expense	31,287
Net income	$161,104
Income per common share:
Basic	$1,611,040.00
Diluted	$1,611,040.00
Weighted average shares:
Basic	100
Diluted	100

The accompanying notes are an integral part of this consolidated financial statement.

F-53

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Consolidated statement of cash flows

for the fifty-two weeks ended

December 28, 2008

(dollars in thousands)

Cash flows from operating activities:
Net income	$   161,104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	75,756
Amortization of intangibles	16,618
Amortization of debt issuance costs	1,815
Loss on sale of property, plant, and equipment	1,082
Deferred income taxes	5,686
Foreign currency transaction gains	(13,065	)
Change in assets and liabilities, net of impact of acquisitions:
Restricted cash	31,479
Accounts receivable, net	(74,445	)
Inventories	(84,489	)
Other current assets	(30,088	)
Accounts payable and accrued liabilities	15,928
Noncurrent assets	(1,513	)
Noncurrent liabilities	1,279
Deferred revenue	175,000
Net cash flows provided by operating activities	282,147
Cash flows from investing activities:
Purchases of property, plant, and equipment	(118,320	)
Proceeds from sales of property, plant, and equipment	530
Investment in bonds	(1,000	)
Proceeds from sale of nonoperating real property	2,537
Notes receivable and other	(89	)
Acquisition of businesses, net of cash acquired	(667,397	)
Net cash flows used in investing activities	(783,739	)
Cash flows from financing activities:
Net borrowings of revolver	127,926
Proceeds from debt issuance	750,000
Payments of short-term debt	(750,106	)
Payments of long-term debt and capital lease obligations	(3,577	)
Change in overdraft balances	10,251
Investment from parent	450,000
Debt issuance costs	(13,229	)
Net cash flows provided by financing activities	571,265
Effect of exchange rate changes on cash	(13,771	)
Net change in cash and cash equivalents	55,902
Cash and cash equivalents, beginning of period	198,883
Cash and cash equivalents, end of period	$   254,785
Non-cash investing and financing activities:
Construction in process under deemed capital lease	$       9,166
Reduction of long-term debt	$     90,910
Debt assumed from Tasman acquisition	$     52,137
Supplemental information:
Cash paid for interest	$     34,895
Cash paid for income taxes	$     11,735

The accompanying notes are an integral part of this consolidated financial statement

F-54

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Consolidated statement of stockholder’s equity

For the fifty-two weeks ended December 28, 2008

(dollars in thousands)

	Common stock issued/ outstanding	Common stock	Additional paid-in capital	Retained earnings (accumulated deficit)		Accumulated other comprehensive income/(loss)		Total stockholder’s equity
Balance at December, 30, 2007	100	$—	$   950,159	$(111,592	)	$     251		$   838,818
Capital contributions	—	—	450,000	—		—		450,000
Comprehensive income (loss):
Net income	—	—	—	161,104		—		161,104
Derivative financial instrument adjustment, net of tax of $39	—	—	—	—		55		55
Foreign currency translation adjustment	—	—	—	—		(61,727	)	(61,727	)
Total comprehensive income								99,432
Balance at December 28, 2008	100	$—	$1,400,159	$49,512		$(61,421	)	$1,388,250

The accompanying notes are an integral part of this consolidated financial statement.

F-55

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 1. Description of business

JBS USA Holdings, Inc. (“JBS USA Holdings” or the “Company”), formerly known as JBS USA, Inc. is a Delaware corporation. On December 29, 2008, JBS USA, was renamed JBS USA, LLC and converted from a C corporation to a limited liability company. The operations of the Company and its subsidiaries constitute the operations of JBS USA Holdings as reported under accounting principles generally accepted in the United States of America (“GAAP”). JBS USA Holdings, Inc. (“JBS USA Holdings”) owns 100% of the issued and outstanding capital stock of JBS USA. JBS USA Holdings, Inc. is an indirect subsidiary of JBS S.A., a Brazilian company (“JBS”).

JBS USA Holdings processes, prepares, packages, and delivers fresh, further processed and value-added beef, pork and lamb products for sale to customers in the United States and in international markets. JBS USA Holdings sells its meat products to customers in the foodservice, international, further processor, and retail distribution channels. The Company also produces and sells by-products that are derived from its meat processing operations, such as hides and variety meats, to customers in various industries.

JBS USA Holdings conducts its domestic beef and pork processing businesses through its wholly owned subsidiaries Swift Beef Company (“Swift Beef”), Swift Pork Company (“Swift Pork”) and JBS Packerland (“JBS Packerland”), formerly known as Smithfield Beef Group and its Australian beef business through Swift Australia Pty. Ltd. (“Swift Australia”). We have two reportable segments comprised of Beef and Pork which, for the fifty-two weeks ended December 28, 2008, represented approximately 80.6% and 19.4% of net sales, respectively. The Company operates eight beef processing facilities, three pork processing facilities, one lamb slaughter facility, one value-added facility, and eleven feedlots in the United States and ten processing facilities and five feedlots in Australia. Three of the processing facilities in Australia process lamb, mutton and veal along with beef and a fourth processes only lamb, mutton and veal.

Note 2. Acquisition and refinancing of Swift Foods Company

On July 11, 2007, JBS acquired the Company (the “Acquisition”). Concurrent with the closing of the Acquisition, the entity formerly known as Swift Foods Company was renamed JBS USA, Inc. During the third quarter of the current fiscal year, this entity was renamed JBS USA Holdings, Inc. The aggregate purchase price for the Acquisition was $1,470.6 million (including approximately $48.5 million of transaction costs). The Company also refinanced its debt, the debt of its subsidiaries, and the outstanding debt assumed in the Acquisition which collectively were paid off using proceeds from $750 million of various debt instruments (see Note 8) and additional equity contributions from JBS. As a result of the Acquisition, the consolidated financial statements of JBS USA Holdings provided herein reflect the acquisition being accounted for as a purchase in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 141, Business Combinations (“SFAS No. 141”) and push down accounting was applied in accordance with the guidance in Staff Accounting Bulletin (“SAB”) No. 54 to the consolidated financial statements.

F-56

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 3. Acquisition of Tasman Group

On March 4, 2008, JBS Southern Australia Pty. Ltd (“JBS Southern”), an indirect subsidiary of JBS USA Holdings entered into an agreement with Tasman Group Services, Pty. Ltd. (“Tasman Group”) to purchase substantially all of the assets of Tasman Group in an all cash transaction (“Tasman Acquisition”) and the purchase was completed on May 2, 2008. The assets acquired include six processing facilities and one feedlot located in Southern Australia. This acquisition provides additional capacity to continue to meet customer demand. The aggregate purchase price for the Tasman Acquisition was $117.3 million (including approximately $8.6 million of transaction costs), as shown below. JBS Southern also assumed approximately $52.1 million of outstanding debt (see Note 8). The consolidated financial statements of the Company provided herein reflect the Tasman Acquisition being accounted for as a purchase in accordance with SFAS No. 141. The results of the Tasman Group are included in the Company’s statement of operations from the date of acquisition.

The purchase price allocation is preliminary pending completion of independent valuations of assets and liabilities acquired in the area of identified intangibles and certain liabilities including, but not limited to deferred taxes. As such, the allocation of purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of May 2, 2008 (in thousands).

Purchase price paid to previous shareholders	$108,786
Fees and direct expenses	8,555
Total purchase price	$117,341
Purchase price allocation:
Current assets and liabilities	$(27,942	)
Property, plant, and equipment	157,396
Deferred tax liability	(3,539	)
Goodwill	—
Other noncurrent assets and liabilities, net	(8,574	)
Total purchase price allocation	$117,341

Note 4. Acquisition of Smithfield Beef Group & Five Rivers Cattle Feeding

On March 4, 2008, JBS and Smithfield Foods, Inc (“Smithfield Foods”) entered into a Stock Purchase Agreement (“Smithfield Agreement”). Pursuant to the Smithfield Agreement, JBS executed through the Company the acquisition of Smithfield Beef Group, Inc. (“Smithfield Beef”) for $563.2 million in cash (including $26.1 million of transaction related costs) and contributed its ownership in Smithfield Beef to the Company (Smithfield Acquisition). The purchase included 100% of Five Rivers Ranch Cattle Feeding LLC (“Five Rivers”), which was held by Smithfield Beef in a 50/50 joint venture with Continental Grain Company (“CGC,” formerly ContiGroup

F-57

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Companies, Inc.). On October 23, 2008, the acquisition of Smithfield Beef was completed. In conjunction with the closing of this purchase Smithfield Beef was renamed JBS Packerland and Five Rivers was renamed JBS Five Rivers Cattle Feeding LLC (“JBS Five Rivers”). The assets acquired include four processing plants and eleven feedlots. This acquisition provides additional capacity to continue to meet customer demand.

The purchase excluded substantially all live cattle inventories held by Smithfield Beef and Five Rivers as of the closing date, together with the associated debt. The excluded live cattle were raised by JBS Five Rivers after closing for a negotiated fee.

The consolidated financial statements of the Company reflect the acquisition being accounted for as a purchase in accordance with SFAS No. 141. The acquired goodwill is treated as non-deductible for tax purposes. The results of Smithfield Beef and JBS Five Rivers are included in the Company’s statement of operations from the date of acquisition.

The purchase price allocation is preliminary pending completion of independent valuations of assets and liabilities acquired including, but not limited to deferred taxes. As such, the allocation of purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands).

Purchase price paid to previous shareholders	$ 537,068
Fees and direct expenses	26,134
Total purchase price	$ 563,202
Purchase price allocation:
Current assets and liabilities	$   44,146
Property, plant, and equipment	423,955
Deferred tax liability	(142,997	)
Goodwill	94,904
Intangible assets (see Note 5)	138,023
Other noncurrent assets and liabilities, net	5,171
Total purchase price allocation	$ 563,202

Had the Smithfield Acquisition occurred at the beginning of fiscal 2008, unaudited pro forma net sales, net income and net income per share would have been $15.4 billion, $222.3 million and $2,222,960.00 respectively.

Note 5. Basis of presentation and accounting policies

Consolidation

The consolidated financial statements include the accounts of the Company and its direct and indirect wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

F-58

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Use of estimates

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. Significant estimates made by the Company include the allowance for doubtful accounts, reserves related to inventory obsolescence or valuation, insurance accruals, and income tax accruals.

Fiscal year

The Company’s fiscal year consists of 52 or 53 weeks, ending on the last Sunday in December. The consolidated financial statements have been prepared for the fifty-two weeks ended December 28, 2008.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying value of these assets approximates their fair market value. Financial instruments which potentially subject JBS USA Holdings to concentration of credit risk consist principally of cash and temporary cash investments. At times, cash balances held at financial institutions were in excess of Federal Deposit Insurance Corporation insurance limits. JBS USA Holdings places its temporary cash investments with high quality financial institutions. The Company believes no significant credit risk exists with respect to these cash investments.

Accounts receivable and allowance for doubtful accounts

The Company has a diversified customer base which includes some customers who are located in foreign countries. The Company controls credit risk related to accounts receivable through credit worthiness reviews, credit limits, letters of credit, and monitoring procedures.

The Company evaluates the collectability of its accounts receivable based on a general analysis of past due receivables, and a specific analysis of certain customers which management believes will be unable to meet their financial obligations due to economic conditions, industry-specific conditions, historic or anticipated performance, and other relevant circumstances. The Company continuously performs credit evaluations and reviews of its customer base. The Company will provide an allowance for an account when collectability is not reasonably assured. The Company believes this process effectively mitigates its exposure to bad debt write-offs; however, if circumstances related to changes in the economy, industry, or customer conditions change, the Company may need to subsequently adjust the allowance for doubtful accounts.

F-59

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

The Company adheres to customary industry terms of net seven days. The Company considers all domestic accounts over 14 days as past due and all international accounts over 30 days past due. Activity in the allowance for doubtful accounts is as follows (in thousands):

Balance at December 30, 2007	$1,389
Fair value of allowance on acquired business	1,714
Bad debt expense	1,470
Write-offs, net of recoveries	(375	)
Effect of exchange rates	(56	)
Balance, end of period	$4,142

Inventories

Inventories consist primarily of product, livestock, and supplies. Product inventories are considered commodities and are primarily valued based on quoted commodity prices, which approximate net realizable value less cost to complete. Due to a lack of equivalent commodity market data Australian product inventories are valued based on the lower of cost or net realizable value less cost to sell. Livestock inventories are valued on the basis of the lower of first-in, first-out cost or market. Costs capitalized into livestock inventory include cost of feeder livestock, direct materials, supplies, and feed. Cattle and hogs are reclassified from livestock to work in progress at time of slaughter. Supply inventories are carried at historical cost. The components of inventories are as follows at December 28, 2008 (in thousands):

Livestock	$106,288
Product inventories:
Raw material	16,599
Work in progress	53,115
Finished goods	386,399
Supplies	86,599
	$649,000

Other current assets

Other current assets include prepaid expenses which are amortized over the period the Company expects to receive the benefit.

F-60

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Property, plant and equipment

Property, plant and equipment was recorded at fair value at the respective dates of the Acquisition, the Tasman Acquisition and the Smithfield Acquisition. Subsequent additions are recorded at cost. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

The costs of developing internal-use software are capitalized and amortized when placed in service over the expected useful life of the software. Major renewals and improvements that extend the useful life of the asset are capitalized while maintenance and repairs are expensed as incurred. The Company has historically and currently accounts for planned major maintenance activities as they are incurred in accordance with the guidance in the Financial Accounting Standards Board, (“FASB”) Staff Position (“FSP”) AUG Air-1: Accounting for Planned Major Maintenance Activities. Upon the sale or retirement of assets, the cost and related accumulated depreciation or amortization are eliminated from the respective accounts and any resulting gains or losses are reflected in earnings. Applicable interest charges incurred during the construction of assets are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives. The Company capitalized $1.0 million of interest charges during the fifty-two weeks ended December 28, 2008. Assets held under capital lease are classified in property, plant, and equipment and amortized over the lease term. Capital lease amortization is included in depreciation expense. As of December 28, 2008, JBS USA Holdings had $28.5 million in commitments outstanding for capital projects including $14.5 million related to the Installment Bond Purchase Agreement, as discussed in Other Assets.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When future undiscounted cash flows of assets are estimated to be insufficient to recover their related carrying value, the Company compares the asset’s estimated future cash flows, discounted to present value using a risk-adjusted discount rate, to its current carrying value and records a provision for impairment as appropriate.

F-61

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Property, plant, and equipment, net are comprised of the following (in thousands) at December 28, 2008:

Land	$   143,253
Buildings, machinery, and equipment	1,022,324
Property and equipment under capital lease	17,339
Furniture, fixtures, office equipment, and other	38,867
Construction in progress	88,732
	1,310,515
Less accumulated depreciation and amortization	(81,199	)
	$1,229,316

Accumulated depreciation includes accumulated amortization on capitalized leases of approximately $3.1 million as of December 28, 2008. For the fifty-two weeks ended December 28, 2008, the Company recognized $64.6 million and $27.8 million of depreciation and amortization expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations, respectively.

JBS USA Holdings monitors certain asset retirement obligations in connection with its operations. These obligations relate to clean-up, removal or replacement activities and related costs for “in-place” exposures only when those exposures are moved or modified, such as during renovations of its facilities. These in-place exposures include asbestos, refrigerants, wastewater, oil, lubricants and other contaminants common in manufacturing environments. Under existing regulations, JBS USA Holdings is not required to remove these exposures and there are no plans or expectations of plans to undertake a renovation that would require removal of the asbestos, nor the remediation of the other in place exposures at this time. The facilities are expected to be maintained and repaired by activities that will not result in the removal or disruption of these in place exposures. As a result, there is an indeterminate settlement date for these asset retirement obligations because the range of time over which JBS USA Holdings may incur these liabilities is unknown and cannot be reasonably estimated. Therefore, JBS USA Holdings cannot reasonably estimate and has not recorded the fair value of the potential liability.

Other assets

Prior to the Acquisition, Swift Beef entered into an Installment Bond Purchase Agreement (the “Purchase Agreement”) with the City of Cactus, Texas (the “City”) effective as of May 15, 2007. Under the Purchase Agreement, Swift Beef agreed to purchase up to $26.5 million of the “City of Cactus, Texas Sewer System Revenue Improvement and Refunding Bonds, Taxable Series 2007” to be issued by the City (the “Bonds”) . The Bonds are being issued by the City to finance improvements to its sewer system (the “System”) which is utilized by Swift Beef’s processing plant located in Cactus, Texas (the “Plant”) as well as other industrial users and the citizens of the

F-62

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

community of Cactus. Swift Beef will purchase the Bonds in installments upon receipt of Bond installment requests from the City as the System improvements are completed through an anticipated completion date of June 2010. The interest rate on the Bonds is the six-month LIBOR plus 350 basis points, or 6.04% at December 28, 2008. The Bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption beginning on June 1, 2011. The principal and interest on the Bonds will be paid by the City from the net revenues of the System. At December 28, 2008, Swift Beef held $12.0 million of the Bonds, which fall within Level 3 of the value hierarchy in accordance with SFAS No. 157, Fair Value Measurements (“SFAS No. 157”).

On May 21, 2007, in connection with the purchase of the Bonds, Swift Beef entered into a Water & Wastewater Services Agreement (the “Wastewater Agreement”) with the City under which the City will provide water and wastewater services for the Plant at the rates set forth in the Wastewater Agreement. Swift Beef’s payments for the City’s treatment of wastewater from the Plant will include a capacity charge in the amount required to be paid by the City to pay the principal of, and interest on, the Bonds.

The Company has evaluated the impact of the FASB Emerging Issues Task Force (“EITF”) No. 01-08, Determining Whether an Arrangement Contains a Lease, as well as EITF No. 97-10, The Effect of Lessee Involvement in Asset Construction, and has determined that it will be required to reflect the wastewater treatment facility as a capital asset (similar to a capital leased asset) as it will be the primary user of the wastewater facility based on projections of volume of throughput. As the City spends funds to construct the facility, the Company will record construction in process and the related construction financing. At December 28, 2008, $8.8 million had been recognized as construction in process and construction financing by the Company.

Debt issuance costs

Costs related to the issuance of debt are capitalized and amortized using the straight-line method to interest expense over the period the debt is outstanding. In conjunction with the Acquisition of JBS USA Holdings, $1.8 million of fees were capitalized and included in other assets. JBS USA Holdings wrote off $0.9 million of these costs during the fifty-two weeks ended December 28, 2008 as the amount under the related loan agreement was repaid in full (see Note 8).

On November 5, 2008, JBS USA Holdings entered into a $400.0 million revolving credit facility (see Note 8). The debt issuance cost associated with this facility is being amortized using the straight-line method over the life of the agreement.

Goodwill and other intangibles

Goodwill and other intangible assets with indefinite lives are not amortized but are tested for impairment at least on an annual basis or more frequently if impairment indicators arise, as

F-63

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

required by SFAS No. 142, Goodwill and Other Intangible Assets. Identifiable intangible assets with definite lives are amortized over their estimated useful lives. Goodwill represents the excess of the aggregate purchase price over the fair value of the net identifiable assets acquired in a purchase business combination. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with SFAS No. 141, Business Combination, and after December 15, 2008 in accordance with SFAS No. 141R as discussed in Recently Issued Accounting Pronouncements. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. The Company estimates the fair value of its reporting units using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

Following is a rollforward of goodwill by segment for the fifty-two weeks ended December 28, 2008 (in thousands):

	December 30, 2007	Adjustments		Translation gain		December 28, 2008
Beef	$52,565	$ 83,826		$(2,566	)	$133,825
Pork	43,780	(29,750	)	—		14,030
Total	$96,345	$ 54,076		$(2,566	)	$147,855

The adjustments to goodwill are primarily related to the goodwill generated from the Smithfield Acquisition of $94.9 million (see Note 4) coupled with the release of the valuation allowance on deferred tax assets from the Acquisition of $42.9 million (see Note 12).

F-64

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Other identifiable amortizing intangible assets consist of the following at December 28, 2008 (in thousands):

	Initial gross carrying amount	Adjustments		Accumulated amortization		Net carrying amount
Amortizing:
Customer relationships	$129,000	$  69,000		$(18,104	)	$179,896
Customer contracts	15,400	6,078		(2,004	)	19,474
Patents	5,200	(2,300	)	(282	)	2,618
Rental contract	3,507	—		(573	)	2,934
Deferred revenue	1,483	—		(459	)	1,024
Mineral rights	742	—		(65	)	677
Subtotal amortizing intangibles	155,332	72,778		(21,487	)	206,623
Non-amortizing:
Trademark	33,300	50,800		—		84,100
Water rights	2,100	12,144		—		14,244
Subtotal non-amortizing intangibles	35,400	62,944		—		98,344
Total intangibles	$190,732	$135,722		$(21,487	)	$304,967

The adjustments to intangibles result primarily from the Smithfield Acquisition (see Note 4). The adjustment to patents of $2.3 million reflects the impairment of a patent that no longer has a useful life.

The customer relationship intangible and customer contract intangible resulting from the Acquisition are amortized on an accelerated basis over 12 and 7 years respectively. The customer relationship and customer contract intangibles resulting from the Smithfield Acquisition are amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability. Patents consist of exclusive marketing rights and are being amortized over the life of the related agreements on a straight line basis, which range from 6 to 20 years. For the fifty-two weeks ended December 28, 2008, the Company recognized $16.6 million of amortization expense. Based on amortizing assets recognized as of December 28, 2008, amortization expense for each of the next five years is estimated as follows (in thousands):

Estimated amortization expense for fiscal years ending (in thousands):
2009	$20,502
2010	19,879
2011	18,964
2012	17,400
2013	15,299

F-65

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Overdraft balances

The majority of JBS USA Holdings bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance that result in overdraft balances for accounting purposes are included in the trade accounts payable balance, and the change in the related balance is reflected in financing activities on the statement of cash flows.

Insurance

JBS USA Holdings is self-insured for employee medical and dental benefits and purchases insurance policies with deductibles for certain losses relating to worker’s compensation and general liability. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels of certain claims. Self-insured losses are accrued based upon periodic assessments of estimated settlements for known and anticipated claims, any resulting adjustments to previously recorded reserves are reflected in current period earnings. JBS USA Holdings has recorded a prepaid asset with an offsetting liability to reflect the amounts estimated as due for insured claims incurred and accrued but not yet paid to the claimant by the third party insurance company in accordance with SFAS No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.

Environmental expenditures and remediation liabilities

Environmental expenditures that relate to current or future operations and which improve operational capabilities are capitalized at time of incurrence. Expenditures that relate to an existing or prior condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remediation efforts are probable and the costs can be reasonably estimated.

Foreign currency

For foreign operations, the local currency is the functional currency. Translation into US dollars is performed for assets and liabilities at the exchange rates as of the balance sheet date. Income and expense accounts are translated at average exchange rates for the period. Adjustments resulting from the translation are reflected as a separate component of other comprehensive income (loss). Transaction gains and losses on US dollar denominated revolving intercompany borrowings between the Australian subsidiaries and the US parent are recorded in earnings. Translation gains and losses on US dollar denominated intercompany borrowings between the Australian subsidiaries and the US parent and which are deemed to be part of the investment in the subsidiary are recorded in other comprehensive income (loss). The balance of foreign currency translation adjustment in accumulated other comprehensive income at December 28, 2008 was a cumulative loss of $(61.1) million.

F-66

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. JBS USA allocates current and deferred taxes as if it were a separate taxpayer. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Beginning with the adoption of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”), as of May 28, 2007, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Prior to the adoption of FIN 48, the Company recognized the effect of income tax positions only if such positions were probable of being sustained. JBS USA Holdings recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision.

Fair value of financial instruments

The carrying amounts of JBS USA Holdings’ cash and cash equivalents, short-term trade receivables, and payables, approximate their fair values due to the short-term nature of the instruments. Existing long-term debt was recorded at fair value as of the date of the Acquisition (see Note 2) and the Company believes this approximates its fair value at December 28, 2008. Long-term debt incurred since the Acquisition was recorded at fair value at the date of incurrence and is considered to be fair value at December 28, 2008 due to the proximity of the balance sheet date to the issuance of the debt and its variable interest rate (see Note 8).

Revenue recognition

The Company’s revenue recognition policies are based on the guidance in Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition in Financial Statements. Revenue on product sales is recognized when title and risk of loss are transferred to customers (upon delivery based on the terms of sale), when the price is fixed or determinable, and when collectability is reasonably assured, and pervasive evidence of an arrangement exists. The Company recognizes sales net of applicable provisions for discounts, returns and allowances, which are accrued as product is invoiced to customers who participate in such programs based on contract terms and historical and current purchasing patterns.

F-67

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Advertising costs

Advertising costs are expensed as incurred. Advertising costs were $5.6 million for the fifty-two weeks ended December 28, 2008.

Research and development

The Company incurs costs related to developing new beef and pork products. These costs include developing improved packaging, manufacturing, flavor enhancing, and improving consumer friendliness of meat products. The costs of these research and development activities are less than 1% of total consolidated net sales for the fifty-two weeks ended December 28, 2008 and are expensed as incurred.

Shipping costs

Pass-through finished goods delivery costs reimbursed by customers are reported in net sales while an offsetting expense is included in cost of goods sold.

Comprehensive income

Comprehensive income consists of net income, foreign currency translation, and adjustments from derivative financial instruments.

Net income per share

We present dual computations of net income (loss) per share. The basic computation is based on weighted average common shares outstanding during the period. The diluted computation reflects the same calculation as the basic computation as the Company does not have potentially dilutive common stock equivalents.

Derivatives and hedging activities

JBS USA Holdings accounts for its derivatives and hedging activities in accordance with SFAS No. 133, Accounting for Derivative Financial Instruments and Hedging Activities, (“SFAS No. 133”), and its related amendment, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities. The Company uses derivatives (e.g., futures and options) for the purpose of mitigating exposure to changes in commodity prices and foreign currency exchange rates. The fair value of each derivative is recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives are recognized immediately in the statement of operations for derivatives that do not qualify for hedge accounting. For derivatives designated as a hedge and used to hedge an existing asset or liability, both the derivative and hedged item are recognized at fair value within the balance sheet with

F-68

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

the changes in both of these fair values being recognized immediately in the statement of operations. For derivatives designated as a hedge and used to hedge an anticipated transaction, changes in the fair value of the derivatives are deferred in the balance sheet within accumulated other comprehensive income to the extent the hedge is effective in mitigating the exposure to the related anticipated transaction. Any ineffectiveness is recognized immediately in the statement of operations. Amounts deferred within accumulated other comprehensive income are recognized in the statement of operations upon the completion of the related underlying transaction.

Gains and losses from energy and livestock derivatives related to purchases are recognized in the statement of operations as a component of cost of goods sold upon change in fair value. While management believes these instruments help mitigate various market risks, they are not designated and accounted for as hedges under SFAS No. 133 as a result of the extensive recordkeeping requirements of this statement. Gains and losses from foreign currency derivatives and livestock derivatives related to future sales are recognized in the statement of operations as a component of net sales or as a component of other comprehensive income upon change in fair value.

Recently issued accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”), which provides for enhanced disclosures about the use of derivatives and their impact on a Company’s financial position and results of operations. This statement is effective for JBS USA Holdings for fiscal year 2009. The Company does not expect the adoption of SFAS No. 161 to have a material impact on its financial position, results of operations, or cash flows.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) is intended to provide greater consistency in the accounting and reporting of business combinations. SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction and any non-controlling interest in the acquiree at the acquisition date, measured at fair value at that date. This includes the measurement of the acquirer’s shares issued as consideration in a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gains and loss contingencies, the recognition of capitalized in–process research and development, the accounting for acquisition related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance and deferred taxes. One significant change in this statement is the requirement to expense direct costs of the transaction, which under existing standards are included in the purchase price of the acquired company. This statement also established disclosure requirements to enable the evaluation of the nature and financial effect of the business combination. SFAS No. 141(R) is

F-69

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

effective for business combinations consummated after December 31, 2008. Also effective, as a requirement of the statement, after December 31, 2008 any adjustments to uncertain tax positions from business combinations consummated prior to December 31, 2008 will no longer be recorded as an adjustment to goodwill, but will be reported in income. During the thirteen weeks ended December 28, 2008, the Company expensed $1.9 million of cost previously capitalized related to the pending acquisition of National Beef Packing Company (“National Beef”) as the transaction did not close prior to December 15, 2008.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. The provisions of SFAS No. 157 define fair value, establish a framework for measuring fair value in generally accepted accounting principles and expand disclosures about fair value measurements. The provisions of SFAS No. 157 are effective for fiscal years beginning after November 15, 2007, with the exception of nonfinancial assets and liabilities that are not currently recognized or disclosed at fair value in the financial statements on a recurring basis, for which SFAS No. 157 is effective for fiscal years beginning after November 15, 2008. Our adoption of SFAS 157 No. on January 1, 2008 did not have a significant effect on our consolidated financial position, results of operations, or cash flows.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (“SFAS No. 167”). SFAS No. 167 provides for enhanced financial reporting by enterprises involved with variable interest entities and is effective for fiscal years beginning after November 15, 2009. We are currently evaluating the impact, if any, of SFAS No. 167 on our financial position, results of operations, and cash flows.

Note 6. Accrued liabilities

Accrued liabilities consist of the following at December 28, 2008 (in thousands):

Self insurance reserves .	$ 24,265
Salaries .	74,528
Taxes	15,825
Freight	38,645
Interest	19,672
Other .	110,134
Total .	$283,069

Other accrued liabilities consist of items that are individually less than 5% of total current liabilities.

F-70

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 7. Derivative financial instruments

The Company utilizes various raw materials in its operations, including cattle, hogs, and energy, such as natural gas, electricity, and diesel fuel, which are all considered commodities. The Company considers these raw materials generally available from a number of different sources and believes it can obtain them to meet its requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond its control, such as economic and political conditions, supply and demand, weather, governmental regulation, and other circumstances. Generally, the Company purchases derivatives in an attempt to mitigate price risk related to its anticipated consumption of commodity inputs for periods of up to 12 months. The Company may enter into longer-term derivatives on particular commodities if deemed appropriate. As of December 28, 2008, the Company had derivative positions in place covering less than 1% and 11% of anticipated cattle and hog needs, respectively, through December 2009.

On December 31, 2007, the beginning of the current fiscal year, the Company adopted SFAS No. 157, which defines fair value, establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. The standard is applicable to the fair value measurement where it is permitted or required under other accounting pronouncements.

SFAS No. 157 defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date. SFAS No. 157 establishes a three-tier fair value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement.

• Level 1 consists of observable market data in an active market for identical assets or liabilities.

• Level 2 consists of market data, other than that included in Level 1, that is either directly or indirectly observable.

• Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company, not a market participant, if there is little available market data and the Company’s own assumptions are considered by management to be the best available information.

In the case of multiple inputs being used in fair value measurement, the lowest level input that is significant to the fair value measurement represents the level in the fair value hierarchy in which the fair value measurement is reported.

The adoption of SFAS No. 157 has not resulted in any significant changes to the methodologies used for fair value measurement. The Company uses derivatives for the purpose of mitigating exposure to market risk, such as changes in commodity prices and foreign currency exchange rates. The Company uses exchange-traded futures and options to hedge livestock commodities. The Company uses foreign currency positions, which are actively quoted by an independent financial institution, to mitigate the risk of foreign currency fluctuations in the markets in which it conducts business.

F-71

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

The fair value of derivative assets is recognized within other current assets while the fair value of derivative liabilities is recognized within accrued liabilities. At December 28, 2008, the fair value of derivatives recognized within other current assets was $54.1 million. The fair value of derivatives recognized within accrued liabilities was $17.0 million. The fair value measurements that are performed on a recurring basis fall within the level 1 of the fair value hierarchy. The amounts are as follows:

	Level 1
	December 28, 2008
Assets:
Commodity derivatives	$42,087
Foreign currency rate derivatives	12,002
Total fair value	$54,089
Liabilities:
Commodity derivatives	$16,392
Foreign currency rate derivatives	592
Total fair value	$16,984

As of December 28, 2008, the net deferred amount of derivative loss recognized in accumulated other comprehensive income was $0.3 million, net of tax. The Company anticipates these amounts will be transferred out of accumulated other comprehensive income and recognized within earnings over the next 12 months.

F-72

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 8. Long-term debt and loan agreements

JBS USA Holdings and its direct and indirect subsidiaries have entered into various debt agreements in order to finance the Acquisition, the Tasman Acquisition, the Smithfield Acquisition, and provide liquidity to operate the business on a go forward basis. As of December 28, 2008, debt outstanding consisted of the following (in thousands):

Short-term debt
Secured credit facilities	$36,186
Unsecured credit facilities	30,826
Total short-term debt	67,012
Current portion of long-debt:
Installment note payable	1,264
Capital lease obligations	3,235
Total current portion of long-term debt	4,499
Long-term debt:
Loans payable to JBS	658,588
Installment note payable	10,025
Secured credit facilities	114,673
Capital lease obligations	23,522
Long-term debt, less current portion	806,808
Total debt	$878,319

The aggregate minimum principal maturities of debt for each of the five fiscal years and thereafter following December 28, 2008, are as follows (in thousands):

For the fiscal years ending December	Minimum principal maturities
2009	$  71,807
2010	662,866
2011	118,263
2012	3,185
2013	8,990
Thereafter	13,208
Total minimum principal maturities	$878,319

As of December 28, 2008, JBS USA Holdings had approximately $161.8 million of secured debt outstanding and approximately $20.9 million of outstanding letters of credit.

F-73

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

A summary of the components of interest expense, net is presented below (in thousands):

	The fifty-two weeks ended December 28, 2008
Interest on:
Unsecured bank loans	$13,781
Unsecured credit facility	104
Loans payable to JBS	19,038
Capital lease interest	1,487
Bank fees	493
Other miscellaneous interest charges (i)	2,220
Debt issuance cost amortization	2,306
Secured credit facility	2,796
Less:
Capitalized interest	(976	)
Interest income	(4,891	)
Total interest expense, net	$36,358

(i) Includes installment note interest expense of $0.53 million.

Description of indebtedness

Senior credit facilities—On November 5, 2008, JBS USA entered into a secured revolving loan credit agreement (the “Credit Agreement”) that allows borrowings up to $400 million, and terminates on November 5, 2011. Up to $75 million of the revolving credit facility is available for the issuance of letters of credit. Borrowings that are index rate loans will bear interest at the prime rate plus a margin of 2.25% (5.50% at December 28, 2008) while LIBOR rate loans will bear interest at the applicable LIBOR rate plus a margin of 3.25% (4.66% at December 28, 2008). At December 28, 2008, the borrowings totaled $114.7 million. Upon approval by the lender, LIBOR rate loans may be taken for one, two, or three month terms, (or six months at the discretion of the Agent).

Availability.    Availability under the Credit Agreement is subject to a borrowing base. The borrowing base is based on certain of JBS USA domestic wholly owned subsidiaries’ assets as described below, with the exclusion of JBS Five Rivers Cattle Feeding. The borrowing base consists of percentages of eligible accounts receivable, inventory, and supplies and less certain eligibility and availability reserves.

Security and guarantees.    Borrowings made by JBS USA are guaranteed by JBS Holdings and all domestic subsidiaries except Five Rivers are collateralized by a first priority perfected lien and interest in accounts receivable, inventory, and supplies.

F-74

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Covenants.    The Credit Agreement contains customary representations and warranties and a financial covenant that requires a minimum fixed charge coverage ratio of not less than 1.15 to 1.00. This ratio is only applicable if borrowing availability falls below the minimum threshold which is the greater of 20% of the aggregate commitments or $70 million. The Credit Agreement also contains negative covenants that limit the ability of JBS USA and its subsidiaries to, among other things:

• have capital expenditures greater than $175 million per year;

• incur additional indebtedness;

• create liens on property, revenue, or assets;

• make certain loans or investments;

• sell or dispose of assets;

• pay certain dividends and other restricted payments;

• prepay or cancel certain indebtedness;

• dissolve, consolidate, merge, or acquire the business or assets of other entities;

• enter into joint ventures other than certain permitted joint ventures or create certain other subsidiaries;

• enter into new lines of business;

• enter into certain transactions with affiliates and certain permitted joint ventures;

• agree to restrictions on the ability of the subsidiaries to make dividends;

• agree to enter into negative pledges in favor of any other creditor; and

• enter into sale/leaseback transactions and operating leases.

The Credit Agreement also contains customary events of default, including failure to perform or observe terms, covenants or agreements included in the Credit Agreement, payment of defaults on other indebtedness, defaults on other indebtedness if the effect is to permit acceleration, entry of unsatisfied judgments or orders against a loan party or its subsidiaries, failure of any collateral document to create or maintain a priority lien, and certain events related to bankruptcy and insolvency or environmental matters. If an event of default occurs the lenders may, among other things, terminate their commitments, declare all outstanding borrowings to be immediately due and payable together with accrued interest, and fees and exercise remedies under the collateral documents relating to the Credit Agreement. At December 28, 2008, JBS USA was in compliance with all covenants.

Certain covenants of our indebtedness and debt guarantee terms include restrictions on our ability to pay dividends. As of December 28, 2008 the Company had $22.7 million of retained earnings available to pay dividends.

F-75

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Installment note payable—The installment note payable relates to JBS USA Holdings’ financing of a capital investment. The note bears interest at LIBOR, the rate as of December 28, 2008 was 2.46% plus a fixed margin of 1.75% per annum with payments due on the first of each month and matures on August 1, 2013.

Unsecured credit facility—Swift Australia entered into an Australian dollar (“A”) denominated $120 million unsecured credit facility on February 26, 2008 to fund working capital and letter of credit requirements. Under this facility A$80 million can be borrowed for cash needs and A$40 million is available to fund letters of credit. Borrowings are made at the cash advance rate (BBSY) plus a margin of 0.98%. The credit facility contains certain financial covenants which require the Company to maintain predetermined ratio levels related to interest coverage, debt coverage and tangible net worth. As of December 28, 2008, the Company is in compliance with all covenants and has USD $30.8 million outstanding. This facility has an evergreen renewal term with review periods each June, commencing in 2009.

Secured credit/ multi-option bridge facility—JBS Southern entered into an Australian dollar denominated $80 million secured multi-option bridge facility on July 2, 2008 to fund working capital and letter of credit requirements. JBS Southern property and plant assets secure this bridge facility. Under this facility A$65 million can be borrowed for cash needs and to fund letters of credit. The remaining A$15 million is used to facilitate daily transactional limits. Borrowings are made at the cash advance rate (BBSY) plus a margin of 1.60%. The multi-option bridge facility contains covenants and obligations which require the company to comply. As of December 28, 2008, the Company is in compliance with all covenants and has USD $36.2 million outstanding. This facility has a fixed term and expired on December 31, 2008.

The following four loan agreements sum to the $750 million described as debt related to the Acquisition in Note 2. As indicated below, as of December 28, 2008, there were no outstanding balances with respect to these four loan agreements.

$250 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 1.50% with a maturity date of June 30, 2008. The loan agreement contained customary representations and warranties. The loan agreement was guaranteed by JBS SA. On February 22, 2008, this debt was repaid by the Company using cash received from its parent which has been reflected as an additional capital contribution.

$150 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 0.75%. The loan matured on June 30, 2008. The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS. On February 27, 2008 this debt was repaid by the Company using cash received from its parent which has been reflected as an additional capital contribution.

F-76

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

$250 million credit agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured credit agreement with interest payable quarterly based on three month LIBOR plus a margin of 0.75%. The agreement matured on July 7, 2008. The credit agreement contained customary representations, warranties and negative covenants. There were no maintenance financial covenants but the agreement contained an incurrence Consolidated Net Indebtedness to EBITDA ratio of 3.75 to 1.00 prior to December 31, 2007 and 3.60 to 1.00 commencing on January 1, 2008 and ending on the Maturity Date. The credit agreement was guaranteed by JBS. On July 3, 2008 this credit agreement was repaid with funds received from JBS through a loan repayable to JBS.

$100 million loan agreement—In connection with the Acquisition, JBS USA Holdings entered into a one year unsecured loan agreement. The original 182 day loan agreement with interest payable at maturity based on six month LIBOR plus a margin of 0.8% matured on January 7, 2008. On January 3, 2008, an extension and modification agreement was signed changing the maturity date to July 7, 2008 and increasing the margin to 1.50%. The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS. On July 7, 2008 this loan agreement was repaid with funds received from JBS through a loan repayable to JBS.

The five loan agreements listed below sum to $750 million and are reflected in the line item “Loans Payable to JBS” in the table at the beginning of this footnote. After issuance, the Company repaid $91.4 million leaving a remaining balance owed as of December 28, 2008 of $658.6 million.

$100 million loan payable to JBS—On April 28, 2008, the Company entered into an unsecured loan agreement with its parent, JBS, for $100 million with a maturity date of April 28, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the rate as of December 28, 2008 was 6.03%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received from this loan were used to fund the purchase of Tasman Group (see Note 3).

$25 million loan payable to JBS—On May 5, 2008, the Company entered into an unsecured loan agreement with JBS for $25 million with a maturity date of May 5, 2009. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the rate of as of December 28, 2008 was 6.15%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received were used to fund operations.

$25 million loan payable to JBS—On June 10, 2008, the Company entered into an unsecured loan agreement with JBS for $25 million with a maturity date of June 10, 2009. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, the rate as of December 28, 2008 was 5.94%; however the parties have reached an agreement to defer the 2008 interest payment. The funds received from this loan were used to fund operations.

F-77

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

$350 million loan payable to JBS—On June 30 2008, the Company entered into an unsecured loan agreement with JBS totaling $350 million with a maturity date of June 30, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%, for $250 million the rate as of December 28, 2008 was 6.12% and for $100 million the rate as of December 28, 2008 was 6.13%. The funds received were used to pay outstanding unsecured bank debt.

$250 million loan payable to JBS—On October 21, 2008, the Company entered into an unsecured loan agreement with JBS for $250 million with a maturity date of October 21, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. As of December 28, 2008 this rate was 4.13%. The funds received were used for the acquisition of Smithfield Beef and Five Rivers (see Note 4).

See Note 16 regarding subsequent event issuance of $700 million 11.625% senior unsecured notes by a subsidiary in April 2009.

Capital and operating leases—JBS USA Holdings and certain of its subsidiaries lease the corporate headquarters in Greeley, Colorado under capital lease; six distribution facilities located in New Jersey, Florida, Nebraska, Arizona, Colorado and Texas; marketing liaison offices in the US, Korea, Japan, Mexico, China, and Taiwan; its distribution centers and warehouses in Australia; and a variety of equipment under operating lease agreements that expire in various years between 2008 and 2019. Future minimum lease payments at December 28, 2008, under capital and non-cancelable operating leases with terms exceeding one year are as follows (in thousands):

	Capitalized lease obligations		Noncancellable operating lease obligations
For the fiscal years ending December
2009	$  4,639		$17,431
2010	4,166		13,426
2011	3,571		11,016
2012	2,955		4,850
2013	2,874		4,054
Thereafter	13,432		5,113
Net minimum lease payments	31,637		$55,890
Less: Amount representing interest	(4,880	)
Present value of net minimum lease payments	$26,757

Rent expense associated with operating leases was $23.2 million for the fifty-two weeks ended December 28, 2008.

F-78

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 9. Deferred revenue

On October 22, 2008 we received a deposit in cash from a customer of $175 million for the customer to secure an exclusive right to collect a certain byproduct of the beef fabrication process in all of our US beef plants. This agreement was formalized in writing as the Raw Material Supply agreement on February 27, 2008. The customer advance payment was recorded as deferred revenue. As byproduct is delivered to the customer over the term of the agreement the deferred revenue is recognized as revenue in the statement of operations. To provide the customer with security, in the unlikely event the Company was to default on our commitment, the payment is evidenced by a note which bears interest at 2 month LIBOR plus 200 basis points. In the event of default the note provides for a conversion into shares of common stock of JBS USA Holdings based on a formula stipulated in the note agreement. Assuming default had occurred on December 28, 2008 the conversion rights under the promissory note would have equaled 11.65% of the outstanding common stock, equal to 11.65 shares. The note also contains affirmative and negative covenants which require the Company to among other things: maintain defined market share; maintain certain tangible net worth levels; and comply in all material respects with the raw material supply agreement. The unamortized balance at December 28, 2008 was approximately $173 million.

Note 10. Defined contribution plans

Defined contribution plans

The Company sponsors two tax-qualified employee savings and retirement plans (the “401(k) Plans”) covering its US based employees, both union and non-union. Pursuant to the 401(k) Plans, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plans. The 401(k) Plans provide for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plans. On July 8, 2008, the Company amended its 401(k) Plans described above by eliminating the immediate vesting and instituting a five year vesting schedule for all non-production employees and reducing the maximum Company match to an effective 2% from the former rate of 5%. The trustee of the 401(k) Plans, at the direction of each participant, invests the assets of the 401(k) Plans in participant designated investment options. The 401(k) Plans are intended to qualify under Section 401 of the Internal Revenue Code. The Company’s expenses related to the matching provisions of the 401(k) Plans totaled approximately $6.3 million for the fifty-two weeks ended December 28, 2008. One of the Company’s facilities participates in a multi-employer pension plan. The Company’s contributions to this plan, which are included in cost of goods sold in the statement of operations, were $0.3 million for the fifty-two weeks ended December 28, 2008. The Company also made contributions totaling $0.6 million for the fifty-two weeks ended December 28, 2008, to a multiemployer pension related to former employees at the former

F-79

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Nampa, Idaho plant pursuant to a settlement agreement. As these payments are made, they are recorded as a reduction of the pre-acquisition contingency established during the Acquisition (see Note 2).

Employees of Swift Australia do not participate in the Company’s 401(k) Plans. Under Australian law, Swift Australia contributes a percentage of employee compensation to a superannuation fund. This contribution approximates 9% of employee cash compensation as required under the Australian “Superannuation Act of 1997”. As the funds are administered by a third party, once this contribution is made to the fund, Swift Australia has no obligation for payments to participants or oversight of the fund. The Company’s expenses related to contributions to this fund totaled $16.6 million for the fifty-two weeks ended December 28, 2008.

Note 11. Related party transactions

JBS USA Holdings enters into transactions in the normal course of business with affiliates of JBS. Sales to affiliated companies included in net sales in the statement of operations for the fifty-two weeks ended December 28, 2008 were $48.5 million. Amounts owed to JBS USA Holdings by affiliates as of December 28, 2008 totaled approximately $20.2 million. Purchases from affiliated companies included in the statement of operations for the fifty-two weeks ended December 28, 2008 were $0.9 million. No amounts were due to affiliates by JBS USA Holdings at December 28, 2008 related to these purchases.

The Company had a $0.6 million receivable from an unconsolidated affiliate at December 28, 2008 related to the funding of debt issuance costs on behalf of the affiliate.

For the fifty-two weeks ended December 28, 2008, the Company recorded $26 thousand of rental income related to real property leased to two of its executive officers. At December 28, 2008 no balances were due to the Company related to these transactions.

The Company had a $25 thousand receivable from an executive officer at December 28, 2008 (see Note 16).

JBS USA Holdings guarantees, on an unsecured basis, $300.0 million of 10.5% notes due 2016 issued by its parent, JBS. JBS USA Holdings meets the definition of a significant subsidiary contained in the indentures and therefore the board of directors of JBS USA Holdings approved the guarantee.

JBS USA Holdings received capital contributions from its parent of $450.0 million during the fifty-two weeks ended December 28, 2008, $50 million was used to fund operations and $400.0 million was used to repay debt. During the fifty-two weeks ended December 28, 2008, the Company entered into various intercompany loans with JBS. These were contributed to JBS USA and used to fund operations and complete the Tasman Acquisition and Smithfield Acquisition (see Notes 3, 4, and 8).

F-80

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Guarantees—JBS SA has notes payable outstanding of approximately $300 million at December 28, 2008 that are due in 2016. The indenture governing the 2016 Notes requires any significant subsidiary (any subsidiary constituting at least 20% of JBS S.A.’s total assets or annual gross revenues, as shown on the latest financial statements of JBS S.A.) to guarantee all of JBS S.A.’s obligations under the 2016 Notes. The 2016 Notes are guaranteed by JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A.), our company and our subsidiaries, JBS USA Holdings, Inc., JBS USA, LLC and Swift Beef Company. Additional subsidiaries of JBS S.A. (including our subsidiaries) may be required to guarantee the 2016 Notes in the future.

Covenants.    The indentures for the 2016 Notes contain customary negative covenants that limit the ability of JBS S.A. and its subsidiaries (including us) to, among other things:

• incur additional indebtedness;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to JBS S.A.’s shareholders;

• permit restrictions on dividends and other restricted payments by its subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

Events of default.    The indentures for the 2016 Notes also contain customary events of default, including for failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding may declare such principal and accrued interest on the notes to be immediately due and payable.

Cattle supply and feeding agreement—Five Rivers is party to a cattle supply and feeding agreement with an unconsolidated affiliate (“the Unconsolidated Affiliate”). Five Rivers feeds and takes care of cattle owned by the Unconsolidated Affiliate. The Unconsolidated Affiliate pays Five Rivers for the cost of feed and medicine at cost plus a yardage fee on a per head per day basis. Beginning on June 23, 2009 or such earlier date on which Five Rivers’ feed yards are at least 85% full of cattle and ending on October 23, 2011, the Unconsolidated Affiliate agrees to maintain sufficient cattle on Five Rivers’ feed yards so that such feed yards are at least 85% full

F-81

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

of cattle at all times. The agreement commenced on October 23, 2008 and continues until the last of the cattle on Five Rivers’ feed yards as of October 23, 2011 are shipped to the Unconsolidated Affiliate, a packer or another third party.

Cattle purchase and sale agreement—The Company is party to a cattle purchase and sale agreement with the Unconsolidated Affiliate. Under this agreement, the Unconsolidated Affiliate agrees to sell to JBS USA, LLC, and JBS USA, LLC agrees to purchase from the Unconsolidated Affiliate, at least 500,000 cattle during each year from 2009 through 2011. The price paid by JBS USA, LLC is determined pursuant to JBS USA, LLC’s pricing grid in effect on the date of delivery. The grid used for the Unconsolidated Affiliate is identical to the grid used for unrelated third parties. If the cattle sold by the Unconsolidated Affiliate in a quarter result in a breakeven loss (selling price below accumulated cost to acquire the feeder animal and fatten it to delivered weight) then JBS USA LLC will reimburse 40% of the average per head breakeven loss incurred by the Unconsolidated Affiliate on up to 125,000 head delivered to JBS USA, LLC in that quarter. If the cattle sold by the Unconsolidated Affiliate in a quarter result in a breakeven gain (selling price above the accumulated cost to acquire the feeder animal and fatten it to delivered weight), then JBS USA LLC will receive from the Unconsolidated Affiliate an amount of cash equal to 40% of that per head gain on up to 125,000 head delivered to JBS USA, LLC in that quarter. There were no payments under the loss/profit sharing provisions of this agreement in fiscal 2008.

Guarantee of unconsolidated affiliate’s revolving credit facility—The Unconsolidated Affiliate has a $600.0 million secured revolving credit facility with a commercial bank. Its parent company has entered into a keepwell agreement with its subsidiary (the Unconsolidated Affiliate) whereby it will make contributions to the Unconsolidated Affiliate if the Unconsolidated Affiliate is not in compliance with its financial covenants under this credit facility. If the Unconsolidated Affiliate defaults on its obligations under the credit facility and such default is not cured by its parent under the keep-well agreement, Five Rivers is obligated for up to $250.0 million of guaranteed borrowings plus certain other obligations and costs under this credit facility. This credit facility and the guarantee thereof are secured by the assets of the Unconsolidated Affiliate and the net assets of Five Rivers. This credit facility matures on October 7, 2011. This credit facility is used to acquire cattle which are then fed in the Five Rivers feed yards pursuant to the cattle supply and feeding agreement described above. The finished cattle are sold to JBS USA, LLC under the cattle purchase and sale agreement discussed above.

Credit facility to the unconsolidated affiliate—Five Rivers is party to an agreement with the Unconsolidated Affiliate pursuant to which Five Rivers has agreed to loan up to $200.0 million in revolving loans to the Unconsolidated Affiliate. The loans are used by the Unconsolidated Affiliate to acquire feeder animals which are placed in Five Rivers feed yards for finishing. Borrowings accrue interest at a per annum rate of LIBOR plus 2.25% or base rate plus 1.0% and interest is payable at least quarterly. This credit facility matures October 7, 2011. During the period October 23, 2008 (when Five Rivers was acquired) through December 28, 2008, average

F-82

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

borrowings were approximately $131.0 million, and total interest accrued was approximately $663,000 and was recognized as interest income on the statement of operations. As of December 28, 2008 the balance on the note was $90 thousand.

Variable interest entities—As of December 28, 2008 the Company holds variable interests in the Unconsolidated Affiliate, which is considered a variable interest entity under FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities. The Company has determined that it is not the primary beneficiary of the Unconsolidated Affiliate but has significant variable interests in the entity. The Company’s significant variable interests are listed below and discussed further above:

• Five Rivers has agreed to provide up to $200 million in loans to the Unconsolidated Affiliate;

• Five Rivers’ guarantee of up to $250 million of the Unconsolidated Affiliate’s borrowings under its revolving credit facility plus certain other obligations and costs, which is secured by and limited to the net assets of Five Rivers; and

• JBS USA, LLC’s rights and obligations under the cattle purchase and sale agreement.

The Company’s maximum exposure to loss related to these variable interests is limited to the lesser of the net assets of Five Rivers (including loans made to the Unconsolidated Affiliate), or $250 million plus certain other obligations and costs. As of December 28, 2008, the carrying value of Five Rivers’ net assets is $332.1 million. Potential losses under the terms of the cattle purchase and sale agreement depend on future market conditions.

Note 12. Income taxes

The pre-tax income (loss) on which the provision for income taxes was computed is as follows (in thousands):

	For the Fifty-Two Weeks Ended December 28, 2008
Domestic	$199,555
Foreign	(7,164	)
Total	$192,391

F-83

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Income tax expense (benefit) includes the following current and deferred provisions (in thousands):

	For the Fifty-Two Weeks Ended December 28, 2008
Current provision:
Federal	$3,024
State	3,159
Foreign	19,418
Total current tax expense	25,601
Deferred provision:
Federal	23,886
State	6,369
Foreign	(24,569	)
Total deferred tax expense.	5,686
Total income tax expense	$31,287

The principal differences between the effective income tax rate, and the US statutory federal income tax rate, were as follows:

	For the Fifty-Two Weeks Ended December 28, 2008
Expected tax rate	35.0%
State income taxes (net of federal benefit)	3.3
Change in the valuation allowance due to a change in facts	(18.7	)
Other, net	(3.3	)
Effective tax rate	16.3%

F-84

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Temporary differences that gave rise to a significant portion of deferred tax assets (liabilities) were as follows (in thousands):

	December 28, 2008
Inventory	$(10,874	)
Depreciation and amortization	(283,598	)
Derivatives	(2,786	)
All other current	(7,716	)
All other long-term	(941	)
Gross deferred tax liability	(305,915	)
Accounts receivable reserve	2,026
Inventory	4,509
Interest	557
Accrued liabilities	16,625
Deferred revenue	329
Loss carryforwards	141,025
Tax credit carryforwards	14,322
Derivatives	225
All other long-term	30,771
Total deferred tax asset	210,389
Valuation allowance	(42,826	)
Net deferred tax assets	167,563
Net deferred tax liability	$(138,352	)

At December 28, 2008, JBS USA Holdings has recorded deferred tax assets of $141.0 million for loss carryforwards expiring in the years 2009 through 2029. In addition, JBS USA Holdings has $14.3 million of tax credits of which $10.3 million will expire in the years 2009 through 2028 and $4.0 million will carryforward indefinitely.

Section 382 of the Internal Revenue Code of 1986, as amended, imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its net operating losses to reduce its tax liability. JBS USA Holdings experienced an ownership change in January of 2007 and July of 2007. JBS USA Holdings believes that its net operating losses exceed the Section 382 limitation in the amount of $14 million.

The valuation allowance for deferred tax assets as of December 31, 2007 was $127 million. The net change in the total valuation allowance was a decrease of $84 million in 2008. The valuation allowance as of December 28, 2008 was primarily related to loss and credit carryforwards that, in the judgment of management, are not more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that

F-85

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment.

Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 28, 2008 will be allocated to income tax expense pursuant to FAS No. 141R.

JBS USA Holdings deems all of its foreign investments to be permanent in nature and does not provide for taxes on permanently reinvested earnings. It is not practicable to determine the amount of incremental taxes that might arise were these earnings to be remitted.

JBS USA Holdings follows the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). JBS USA’s unrecognized tax benefits are $8.1 million, the recognition of which would not have a material impact on the effective rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Balance at December 30, 2007	$8,300
Additions based on tax positions related to the current period	—
Additions for tax positions of prior years	—
Reductions for tax positions of prior years	—
Settlements	(200	)
Balance at December 28, 2008	$8,100

JBS USA Holdings recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 30, 2007, accrued interest and penalties were $187 thousand. As of the year ended December 28, 2008, interest and penalty amounts related to uncertain tax positions were reduced to $5 thousand as a result of a reduction in the amount recorded as uncertain tax positions. The unrecognized tax benefit and related penalty and interest balances at December 28, 2008 are expected to decrease by $35 thousand within the next twelve months.

JBS USA Holdings files income tax returns in the U.S. and in various states and foreign countries. JBS USA Holdings is no longer subject to audit for US Federal income tax purposes for years prior to 2004. In other major jurisdictions where JBS USA Holdings operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2002.

Note 13. Commitments and contingencies

On July 1, 2002, a lawsuit entitled Herman Schumacher et al v. Tyson Fresh Meats, Inc., et al was filed against a predecessor company, Tyson Foods, Inc., Excel Company, and Farmland National

F-86

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Beef Packing Company, L.P. in the United States District Court for the District of South Dakota seeking certification of a class of all persons who sold cattle to the defendants for cash, or on a basis affected by the cash price for cattle, during the period from April 2, 2001 through May 11, 2001 and for some period up to two weeks thereafter. The complaint alleges that the defendants, in violation of the Packers and Stockyards Act of 1921, knowingly used, without correction or disclosure, incorrect and misleading boxed beef price information generated by the USDA to purchase cattle offered for sale by the plaintiffs at a price substantially lower than was justified by the actual and correct price of boxed beef during this period. On April 12, 2006, the jury returned a verdict against three of the four defendants, including a $2.3 million verdict against Swift Beef.

On February 15, 2007, a judgment was entered on the verdict by the court and on March 12, 2007 Swift Beef Company filed a notice of appeal. Nevertheless, a liability for the amount of the verdict was recorded during the final thirteen weeks of Smithfield Beef’s fiscal year ended May 28, 2006. ConAgra Foods will indemnify Swift & Company against any judgments for monetary damages or settlements arising out of this litigation or any future litigation arising from the same facts to the extent such damages together with any other indemnifiable claims under the acquisition agreement entered into the purchase of Swift Foods from ConAgra Foods, Inc. in 2002 exceed a minimum threshold of $7.5 million. On January 29, 2008, Swift Beef was notified that the appeals court ruled in favor of the defendants on all counts. Swift Beef is now seeking the recovery of a portion of the legal fees it expended in this matter. As the claimants rights to appeal expired during the third quarter ended December 28, 2008 the reversal of the previously accrued trial court verdict amount was recorded as an adjustment to the Acquisition, not as a reduction of expenses on the Consolidated Statement of Operations.

Swift Beef is a defendant in a lawsuit entitled United States of America, ex rel, Ali Bahrani v. ConAgra, Inc., ConAgra Foods, Inc., ConAgra Hide Division, ConAgra Beef Company and Monfort, Inc., filed in the United States District Court for the District of Colorado in May 2000 by the relator on behalf of the United States of America and himself for alleged violations of the False Claims Act. Under the False Claims Act, a private litigant, termed the “relator,” may file a civil action on the United States government’s behalf against another party for violation of the statute, which, if proven, would entitle the relator to recover a portion of any amounts recovered by the government. The lawsuit alleges that the defendants violated the False Claims Act by forging and/or improperly altering USDA export certificates used from 1991 to 2002 to export beef, pork, poultry and bovine hides to foreign countries. The lawsuit seeks to recover three times the actual damages allegedly sustained by the government, plus per-violation civil penalties.

On December 30, 2004, the United States District Court granted the defendants’ motions for summary judgment on all claims. The United States Court of Appeals for the Tenth Circuit reversed the summary judgment on October 12, 2006 and remanded the case to the trial court

F-87

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

for further proceedings consistent with the court’s opinion. Defendants filed a Motion for Rehearing En Banc on October 26, 2006. On May 10, 2007, the Tenth Circuit denied that motion.

The case is now before the trial court. Issues in the case have been bifurcated. From April 28, 2008, to April 29, 2008 a jury trial was held on key significant issues. On May 1, 2008, a verdict was returned ruling in favor of the Company on all counts. If the verdict is not overturned on appeal the Relator’s claims will be greatly limited and the issues in the case will be focused solely on bovine hides. This result significantly reduces the Company’s possible liability from the original lawsuit. Swift Beef is unable to estimate what liability, if any, it may have in connection with this lawsuit or to reasonably estimate the amount or range of any loss that may result from this lawsuit at this time. In accordance with SFAS No. 5, Accounting for Contingencies, Swift Beef has not established a loss accrual for this claim. Pursuant to the acquisition agreement by which Swift Foods separated from ConAgra Foods in 2002, Swift Foods Company agreed to indemnify ConAgra Foods against all direct liabilities and damages relating to this lawsuit, including the costs and expenses of defending the lawsuit.

The Company is also a party to a number of other lawsuits and claims arising out of the operation of its businesses. Management believes the ultimate resolution of such matters should not have a material adverse effect on the Company’s financial condition, results of operations, or liquidity. Attorney fees are expensed as incurred.

Commitments

JBS USA Holdings enters into purchase agreements for livestock which require the purchase of either minimum quantities or the total production of the facility over a specified period of time. At December 28, 2008, the Company had commitments to purchase 33 million hogs through 2014 and approximately 29% or approximately 7.5 million of our estimated cattle needs through short-term contracts. As the final price paid cannot be determined until after delivery, the Company has estimated market prices based on Chicago Mercantile Exchange traded futures contracts and applied those to either the minimum quantities required per the contract or management’s estimates of livestock to be purchased under certain contracts to determine its estimated commitments for the purchase of livestock, which are as follows (in thousands):

Estimated livestock purchase commitments for fiscal year ended:
2009	$3,395,206
2010	1,035,072
2011	862,430
2012	710,159
2013	483,723
Thereafter	99,087

Through use of these contracts, the Company purchased approximately 70% of its hog slaughter needs during the fifty-two weeks ended December 28, 2008.

F-88

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 14. Business segments

JBS USA Holdings is organized into two operating segments, which are also the Company’s reportable segments: Beef and Pork. In the Beef segment, we conduct our domestic and international beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition in 2008 and the beef, lamb, and sheep operations we acquired in the Tasman Acquisition in 2008. In the Pork segment, we conduct our domestic pork and lamb processing business. Segment operating performance is evaluated by the Chief Operating Decision Maker (“CODM”), as defined in SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, based on Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”). EBITDA is not intended to represent cash from operations as defined by GAAP and should not be considered as an alternative to cash flow or operating income as measured by GAAP. JBS USA Holdings believes EBITDA provides useful information about operating performance, leverage, and liquidity. The accounting policies of the segments are consistent with those described in Note 5. All intersegment sales and transfers are eliminated in consolidation.

On November 5, 2008, the Company entered into a new asset based revolving credit facility (see Note 8). The definition of EBITDA contained in that agreement requires EBITDA to be calculated as net income adding back taxes, depreciation, amortization and interest and the excluding certain non-cash items which affect net income. The Company has changed its definition of EBITDA to align with the definition contained in that agreement and as such the amounts below reflect the new definition.

Beef—The majority of Beef’s revenues are generated from US and Australian sales of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, Swift Beef also sells beef by-products to the variety meat, feed processing, fertilizer, automotive and pet food industries. Furthermore, Australia’s Foods Division produces value-added meat products including toppings for pizzas. On May 2, 2008, JBS Southern completed the Tasman Acquisition and now operates six processing facilities and one feedlot which are reported in the Beef segment (see Note 3). On October 23, 2008, the Company completed the Smithfield Acquisition adding four plants and eleven feedlots which are reported in the Beef segment (see Note 4).

Pork—A significant portion of Pork’s revenues are generated from the sale of products predominantly to retailers of fresh pork including trimmed cuts such as loins, roasts, chops, butts, picnics, and ribs. Other pork products, including hams, bellies, and trimmings are sold predominantly to further processors who, in turn, manufacture bacon, sausage, and deli and luncheon meats. The remaining sales are derived from by-products and from further-processed, higher-margin products. The lamb slaughter facility is included in Pork and accounts for less than 1% of total net sales.

F-89

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Corporate and other—Includes certain revenues, expenses, and assets not directly attributable to the primary segments, as well as eliminations resulting from the consolidation process.

	The fifty-two weeks ended
(in thousands)	December 28, 2008
Net sales
Beef	$  9,975,510
Pork	2,438,049
Corporate and other.	(51,278	)
Total	$12,362,281
Depreciation and amortization
Beef	$       68,721
Pork	23,653
Total	$       92,374
EBITDA
Beef	$     284,527
Pork	113,673
Total	398,200
Depreciation and amortization	(92,374	)
Interest expense, net	(36,358	)
Foreign currency transaction losses	(75,995	)
Loss on fixed assets	(1,082	)
Income before income tax expense	$     192,391
Capital expenditures
Beef	$       89,237
Pork	29,083
Total	$     118,320

Total assets by segment (in thousands):

(in thousands)	December 28, 2008
Total assets
Beef	$  2,838,619
Pork	519,995
Corporate and other	(43,043	)
Total	$  3,315,571

F-90

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Sales by geographical area based on the location of the facility recognizing the sale (in thousands):

	The fifty-two weeks ended December 28, 2008
Net sales
United States	$	10,561,484
Australia		1,800,797
Total	$	12,362,281

Sales to unaffiliated customers by location of customer (in thousands):

	The fifty-two weeks ended December 28, 2008
United States	$	8,789,407
Japan		792,678
Australia		521,085
Mexico		296,680
China		77,623
Other		1,884,808
Total	$	12,362,281

Long-lived tangible assets by location of assets (in thousands):

	December 28, 2008
Long-lived assets:
United States	$	906,044
Australia		360,400
Other		83
Total	$	1,266,527

No single customer or supplier accounted for more than 10% of net sales or cost of goods sold, respectively, during the fifty-two weeks ended December 28, 2008.

Long-lived assets consist of property, plant, and equipment, net of depreciation, and other assets less debt issuance costs, net, of $12.5 million as of December 28, 2008.

F-91

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

Note 15. Terminated acquisition

On February 29, 2008, JBS USA Holdings entered into an agreement with National Beef to acquire all of the outstanding membership interests for a combination of approximately $465.0 million cash, $95.0 million in JBS common stock (the purchase price) and the assumption of debt.

On October 20, 2008, the United States Department of Justice (“DOJ”) filed an injunction to stop the Company’s planned acquisition of National Beef.

On February 18, 2009 an agreement was reached with the sellers of National Beef whereby JBS USA Holdings will terminate the acquisition process of National Beef. All related litigation with the DOJ will also be terminated. As a result of the agreement JBS USA Holdings has agreed to reimburse the seller’s shareholders a total $19.9 million as full and final settlement of any and all liabilities related to the potential acquisition.

Note 16. Subsequent events

On December 29, 2008, JBS USA, Inc., was renamed JBS USA, LLC. and converted from a C corporation to a limited liability company.

On January 12, 2009, the Company received $25 thousand; including principal plus interest from an executive officer (see Note 11).

On January 27, 2009, the Company reached agreement with Smithfield Foods for final settlement of the working capital component of the purchase price pursuant to the Stock Purchase Agreement. The settlement calls for a payment of $4.5 million from Smithfield Foods to the Company as full and final settlement of the working capital delivered at October 23, 2008. The Company recorded the settlement as a reduction of purchase price upon receipt.

On March 27, 2009, JBS S.A. assigned its five separate intercompany notes with JBS USA Holdings to JBS HU Liquidity Management LLC, a subsidiary of JBS, which is organized in the country of Hungary.

On April 27, 2009, JBS USA Holdings refinanced its five separate intercompany notes with JBS HU Liquidity Management LLC into one note with a stated interest rate of 12% and a 10 year maturity (see Note 8).

On April 27, 2009 the Credit Agreement was amended to allow the execution of the senior unsecured note offering of JBS USA, LLC described below. Under the amendment, the existing limitation on distributions between JBS USA, LLC and JBS USA Holdings was amended to allow for the proceeds of the senior unsecured bond offering, less transaction expenses and $100 million retained by JBS USA, LLC to be remitted to JBS USA Holdings as a one time distribution. Also, the unused line fee was increased from 37.5 basis points to 50 basis points.

F-92

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

On April 27, 2009, JBS USA, LLC, a wholly owned subsidiary, issued $700 million of senior unsecured notes. Interest on these notes accrues at a rate of 11.625% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009. The principal amount of these notes is payable in full on May 1, 2014. The proceeds net of expenses were $650.8 million and were used to repay $100 million on the Credit Agreement and the balance was used to repay intercompany debt and accrued interest owed to JBS S.A. These

notes are guaranteed by JBS S.A., us, JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A.), and each of our U.S. restricted subsidiaries that guarantee our senior secured revolving facility (subject to certain exceptions).

Covenants.    The indenture for the 11.625% senior unsecured notes due 2014 contains customary negative covenants that limit our and our restricted subsidiaries’ ability to, among other things:

• incur additional indebtedness based on net debt to EBITDA ratio;

• incur liens;

• sell or dispose of assets;

• pay dividends or make certain payments to our shareholders;

• permit restrictions on dividends and other restricted payments by its restricted subsidiaries;

• enter into related party transactions;

• enter into sale/leaseback transactions; and

• undergo changes of control without making an offer to purchase the notes.

Events of default.    The indenture also contains customary events of default, including failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding may declare such principal and accrued interest on the notes to be immediately due and payable.

Beginning in mid-April 2009 the world press began publicizing the occurrence of regionalized influenza outbreaks which were linked on a preliminary basis to a hybrid avian/swine/human virus. As a result commencing on April 14, 2009 several foreign countries including Russia, Thailand, Ukraine, Communist China, and the Philippines closed their borders to some or all pork produced in the affected states in the USA or other affected regions in the world. The company is not able to assess whether or when the influenza outbreak might lessen or whether or when

F-93

JBS USA Holdings, Inc.

An indirect subsidiary of JBS S.A.

Notes to consolidated financial statements

December 28, 2008

additional countries might impose restrictions on the importation of pork products from the USA, nor whether or when the existing import bans might be lifted.

On April 24, 2009, the Company issued a forgivable promissory note in the amount of $235 thousand to an officer of the Company. The note bears interest at 5.25% and will be forgiven in four equal installments on the anniversary date of the loan as long as the executive continues to be an employee. If the employee is terminated for cause the entire note balance plus accrued interest will be due and payable on the termination date.

F-94

Audit · Tax · Advisory

Grant Thornton LLP

200 S 6th Street, Suite 500

Minneapolis, MN 55402-1459

T 612.332.0001

F 612.332.8361

www.GrantThornton.com

Report of independent certified public accountants

Board of Directors

JBS USA Holdings, Inc. (formerly Swift Foods Company):

We have audited the accompanying consolidated balance sheets of JBS USA Holdings, Inc. (formerly Swift Foods Company) and subsidiaries (the Company) as of December 24, 2006 and July 10, 2007 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the fiscal year ended December 24, 2006 and the 198 days ended July 10, 2007 (Predecessor) and the consolidated balance sheet as of December 30, 2007 and the related consolidated statements of operations, stockholder’s equity, and cash flows for the 173 days ended December 30, 2007 (Successor). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of JBS USA Holdings, Inc. and subsidiaries as of December 24, 2006 and July 10, 2007 and the results of their operations and cash flows for the fiscal year ended December 24, 2006 and the 198 days ended July 10, 2007 (Predecessor) and as of December 30, 2007 and the results of their operations and cash flows for the 173 days ended December 30, 2007 (Successor) in conformity with accounting principles generally accepted in the United States of America.

Minneapolis, Minnesota

July 1, 2009

F-95

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Consolidated balance sheets

(dollars in thousands)

	Predecessor				Successor
	December 24, 2006		July 10, 2007		December 30, 2007
Assets
Current assets:
Cash and cash equivalents	$     83,420		$     44,673		$   198,883
Restricted cash	—		—		30,014
Accounts receivable, net of allowance for doubtful accounts of $1,030, $1,466 and $1,389, respectively	334,341		365,642		417,375
Inventories	457,829		487,598		466,756
Deferred income taxes, net	11,149		7,784		4,493
Other current assets	34,864		48,629		35,492
Total current assets	921,603		954,326		1,153,013
Property, plant, and equipment, net	487,427		505,172		708,056
Goodwill	6,811		—		96,345
Other intangibles, net	103,993		92,606		185,573
Deferred income taxes, net	—		—		5,434
Other assets	18,763		26,246		17,394
Total assets	$1,538,597		$1,578,350		$2,165,815
Liabilities and stockholders’ equity
Current liabilities:
Short-term debt	$             —		$             —		$   776,287
Current portion of long-term debt	1,950		1,937		1,998
Accounts payable	179,939		122,821		179,650
Book overdraft	73,314		70,639		92,289
Deferred income taxes, net	6,696		9,323		12,885
Accrued liabilities	194,932		234,681		186,494
Total current liabilities	456,831		439,401		1,249,603
Long-term debt, excluding current portion	1,065,553		1,201,975		32,433
Deferred income taxes, net	38,914		23,878		19,688
Other non-current liabilities	17,389		11,914		25,273
Total liabilities	1,578,687		1,677,168		1,326,997
Commitments and contingencies (see Note 10)
Stockholders’ equity (deficit):
Common stock: par value $.01 per share, shares authorized, issued and outstanding of 221,359,000, 221,359,000 and 100, respectively	2,212		2,212		—
Additional paid-in capital	49,552		50,741		950,159
Treasury stock at cost, 1,784,584 shares at December 24, 2006 and July 10, 2007	(1,814	)	(1,814	)	—
Accumulated deficit	(143,946	)	(226,611	)	(111,592	)
Accumulated other comprehensive income	53,906		76,654		251
Total stockholders’ equity (deficit)	(40,090	)	(98,818	)	838,818
Total liabilities and stockholders’ equity	$1,538,597		$1,578,350		$2,165,815

The accompanying notes are an integral part of this financial statement.

F-96

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Consolidated statements of operations

(dollars in thousands)

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Gross sales	$9,747,029		$5,000,046		$5,014,381
Less deductions from sales	(55,597	)	(29,422	)	(25,397	)
Net sales	9,691,432		4,970,624		4,988,984
Cost of goods sold	9,574,715		4,920,594		5,013,084
Gross profit (loss)	116,717		50,030		(24,100	)
Selling, general, and administrative expenses	158,783		92,333		60,727
Foreign currency transaction gains	(463	)	(527	)	(5,201	)
Other income, net	(4,937	)	(3,821	)	(3,581	)
(Gain) loss on sales of property, plant, and equipment	(666	)	(2,946	)	182
Interest expense, net	118,754		66,383		34,340
Loss before income tax expense	(154,754	)	(101,392	)	(110,567	)
Income tax (benefit) expense	(37,348	)	(18,380	)	1,025
Net loss	$  (117,406	)	$    (83,012	)	$  (111,592	)

The accompanying notes are an integral part of this financial statement.

F-97

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Consolidated statements of cash flows

(dollars in thousands)

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Cash flows from operating activities:
Net loss	$(117,406	)	$(83,012	)	$(111,592	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	73,611		38,904		30,085
Amortization of intangibles	11,023		5,934		5,159
Goodwill impairment charge	4,488		—		—
Amortization of debt issuance costs	9,991		6,226		883
PIK interest (Seller Note, Convertible Senior Note and Senior Notes due 2010)	37,994		21,333		—
(Gain) loss on sales of property, plant and equipment	(666	)	(2,946	)	182
Deferred income taxes	(38,324	)	(22,078	)	(177	)
Stock based compensation	853		1,189		—
Foreign currency transaction gains on intercompany note	—		—		(4,457	)
Other non-cash	(279	)	—		—
Change in assets and liabilities, net of impact of acquisition:
Restricted cash	—		—		(30,014	)
Accounts receivable, net	46,613		(24,781	)	(57,625	)
Inventories	47,919		(10,327	)	32,851
Other current assets	9,202		3,979		19,414
Accounts payable and accrued liabilities	(18,080	)	(45,009	)	7,171
Noncurrent assets	884		(73	)	336
Net cash flows provided by (used in) operating activities	67,823		(110,661	)	(107,784	)
Cash flows from investing activities:
Purchases of property, plant and equipment	(47,294	)	(33,700	)	(33,461	)
Proceeds from disposal of NonFed Plants	29,648		—		—
Proceeds from sales of property, plant, and equipment	5,607		5,203		379
Proceeds from sales of water rights	—		2,872		—
Investment in bonds	—		(11,000	)	—
Purchase of nonoperating real property	—		—		(2,629	)
Notes receivable and other	116		8,848		—
Costs associated with acquisition by parent, net of cash acquired $44,673	—		—		(3,698	)
Net cash flows used in investing activities	(11,923	)	(27,777	)	(39,409	)
Cash flows from financing activities:
Net borrowings (payments) of revolver	(7,779	)	104,316		—
Net payments of short-term debt	—		—		(296,550	)
Proceeds from debt issuance	—		—		750,000
Payments of debt	(2,653	)	(1,149	)	(851,736	)
Change in overdraft balances	(15,265	)	(2,675	)	21,650
Investment from parent	—		—		950,159
Repurchase of common stock	(250	)	—		—
Payment to previous shareholders in conjunction with acquisition by parent	—		—		(225,000	)
Debt issuance costs	—		—		(1,812	)
Net cash flows provided by (used in) financing activities	(25,947	)	100,492		346,711
Effect of exchange rate changes on cash	1,403		(801	)	(635	)
Net change in cash and cash equivalents	31,356		(38,747	)	198,883
Cash and cash equivalents, beginning of period	52,064		83,420		—
Cash and cash equivalents, end of period	$    83,420		$   44,673		$ 198,883
Non-cash investing and financing activities:
Construction in process under deemed capital lease	$            —		$     7,559		$         664
Supplemental information:
Cash paid for interest	$    74,887		$   45,707		$    26,270
Cash paid/(received) for income taxes	$      4,317		$   (3,150	)	$      1,022

The accompanying notes are an integral part of this financial statement.

F-98

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Consolidated statements of stockholders’ equity

(dollars in thousands)

	Common stock issued	Treasury shares		Common stock	Additional paid-in capital	Treasury stock		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity
Predecessor
Balance at December 25, 2005	221,359,000	(1,537,151	)	$2,212	$  48,699	$(1,564	)	$  (26,540	)	$39,775		$  62,582
Repurchase of common stock	—	(247,433	)	—	—	(250	)	—		—		(250	)
Stock based compensation	—	—		—	853	—		—		—		853
Comprehensive loss:
Net loss	—	—		—	—	—		(117,406	)	—		(117,406	)
Derivative adjustment, net of tax of $1,169	—	—		—	—	—		—		(1,267	)	(1,267	)
Foreign currency translation adjustment	—	—		—	—	—		—		15,398		15,398
Total comprehensive loss												(103,275	)
Balance at December 24, 2006	221,359,000	(1,784,584	)	2,212	49,552	(1,814	)	(143,946	)	53,906		(40,090	)
Stock based compensation	—	—		—	1,189	—		—		—		1,189
Cumulative effect of adoption of FIN 48	—	—		—	—	—		347		—		347
Comprehensive loss:
Net loss	—	—		—	—	—		(83,012	)	—		(83,012	)
Derivative adjustment, net of tax of $217	—	—		—	—	—		—		1,959		1,959
Foreign currency translation adjustment	—	—		—	—	—		—		20,789		20,789
Total comprehensive loss												(60,264	)
Balance at July 10, 2007	221,359,000	(1,784,584	)	$2,212	$  50,741	$(1,814	)	$(226,611	)	$76,654		$ (98,818	)
Successor
Investment from parent	100	—		$     —	$950,159	$       —		$           —		$       —		$950,159
Comprehensive loss:
Net loss	—	—		—	—	—		(111,592	)	—		(111,592	)
Derivative adjustment, net of tax of $186	—	—		—	—	—		—		(422	)	(422	)
Foreign currency translation adjustment	—	—		—	—	—		—		673		673
Total comprehensive loss												(111,341	)
Balance at December 30, 2007	100	—		$     —	$950,159	$       —		$(111,592	)	$     251		$838,818

The accompanying notes are an integral part of this financial statement.

F-99

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Note 1. Description of business

JBS USA Holdings, Inc. (“JBS USA Holdings” or the “Company” or “we”), formerly known as Swift Foods Company (“Swift Foods”) and JBS USA, Inc., is a Delaware corporation and a wholly owned subsidiary of JBS S.A., a Brazilian company (“JBS”). JBS USA Holdings owns all of JBS USA, Inc. (“JBS USA”) which is the operating entity (See Note 12). JBS USA and its subsidiaries constitute the operations of JBS USA Holdings as reported under accounting principles generally accepted in the United States of America (“GAAP”).

JBS USA is the leading beef processor and one of the leading pork processing companies in the world. The Company processes, prepares, packages, and delivers fresh, further processed and value-added beef, pork and lamb products for sale to customers in the United States and in international markets. The Company also provides services to its customers designed to help them develop more sophisticated and profitable sales programs. JBS USA sells its meat products to customers in the foodservice, international, further processor, and retail distribution channels. The Company also produces and sells by-products that are derived from its meat processing operations, such as hides and variety meats, to customers in various industries.

JBS USA conducts its domestic beef and pork processing businesses through Swift Beef Company (“Swift Beef”) and Swift Pork Company (“Swift Pork”) and its Australian beef business through Swift Australia Pty. Ltd. (“Swift Australia”). The Company has two reportable segments comprised of Beef and Pork which, for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007, represented approximately 78.1% and 21.9%, 75.5% and 24.5% and 78.9% and 21.1% of net sales, respectively. During the periods covered by these financial statements, the Company operated four beef processing facilities, three pork processing facilities, one lamb slaughter facility, and one value-added facility in the United States and four beef processing facilities and four feedlots in Australia (See Note 12).

Note 2. Acquisition and refinancing of JBS USA Holdings, Inc.

On July 11, 2007, JBS acquired Swift Foods (the “Acquisition”). Concurrent with the closing of the Acquisition, the entity formerly known as Swift Foods was renamed JBS USA, Inc. and later renamed JBS USA Holdings, Inc. The aggregate purchase price for the Acquisition was $1,470.6 million (including approximately $48.5 million of transaction costs), as shown below. JBS USA Holdings also refinanced its debt and the outstanding debt assumed at the date of the Acquisition was paid off using proceeds from $750 million of various debt instruments and additional equity contributions from JBS (See Note 6). As a result of the Acquisition, the financial statements of JBS USA Holdings reflect the acquisition being accounted for as a purchase in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 141, Business Combinations (“SFAS No. 141”).

The purchase price allocation is based on an independent valuation of assets and liabilities acquired. The allocation presented below reflects the preliminary fair value of the individual

F-100

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

assets and liabilities of JBS USA Holdings as of July 11, 2007 (in thousands). Subsequent to the completion of the December 2007 balance sheet the preliminary purchase price allocation was finalized in September 2008 (See Note 12).

Purchase price paid to previous shareholders	$   225,000
Debt assumed including accrued interest of $22,872	1,197,124
Fees and direct expenses	48,490
Total purchase price	$1,470,614
Preliminary purchase price allocation:
Current assets and liabilities	$583,833
Property, plant, and equipment	693,672
Identified intangibles	190,732
Deferred tax liability	(110	)
Goodwill	97,194
Other noncurrent assets and liabilities, net	(94,707	)
Total purchase price allocation	$1,470,614

The debt refinancing in conjunction with the acquisition was financed in part using the following sources (in thousands):

Loan Agreements due June 30, 2008	$400,000
Credit Agreement due July 6, 2008	250,000
Loan Agreement due July 7, 2008	100,000
	$750,000

The impact of the Acquisition on the financial statements of JBS USA Holdings was the identification of intangible assets, adjustment of assets and liabilities to fair value, and an equity investment from its parent and payoff of certain outstanding debt. Although certain of the outstanding debt of JBS USA Holdings was paid off or refinanced in conjunction with the Acquisition and replaced with an equity investment from its parent, the parent does have debt outstanding and JBS USA Holdings could be called upon to provide funding to meet debt service requirements.

Note 3. Basis of presentation and accounting policies

Consolidation

The consolidated financial statements include the accounts of JBS USA Holdings and its direct and indirect wholly-owned subsidiaries. All intercompany transactions have been eliminated.

F-101

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Use of estimates

The consolidated financial statements have been prepared in conformity with GAAP using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. Significant estimates made by the Company include the allowance for doubtful accounts, reserves related to inventory obsolescence or valuation, insurance accruals, and tax accruals.

Restricted cash

JBS USA Holdings has outstanding letters of credit, supporting current liabilities, which are collateralized by cash. As this cash is not available for operations and is not considered highly liquid it is classified as restricted cash.

Cash and cash equivalents

JBS USA Holdings considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying value of these assets approximates the fair market value. Financial instruments which potentially subject JBS USA Holdings to concentration of credit risk consist principally of cash and temporary cash investments. At times, cash balances held at financial institutions were in excess of Federal Deposit Insurance Corporation insurance limits. JBS USA Holdings places its temporary cash investments with high quality financial institutions. JBS USA Holdings believes no significant concentration of credit risk exists with respect to these cash investments.

Investment in auction rate securities

During the 173 days ended December 30, 2007, JBS USA Holdings invested in auction rate securities based on its cash needs and available cash balances. As of December 30, 2007 the Company held no investments in auction rate securities. The Company considered these investments to be available-for-sale in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, and, as such, the cash flows associated with these investments have been reflected in investing activities. Realized gains recorded in interest income for the period July 11 through December 30, 2007 totaled $2.7 million.

Accounts receivable and allowance for doubtful accounts

The Company has a diversified customer base which includes some customers who are located in foreign countries. The Company controls credit risk related to accounts receivable through credit worthiness reviews, credit limits, letters of credit, and monitoring procedures.

F-102

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

The Company evaluates the collectability of its accounts receivable based on a general analysis of past due receivables, and a specific analysis of certain customers which management believes will be unable to meet their financial obligations due to economic conditions, industry-specific conditions, historic or anticipated performance, and other relevant circumstances. The Company continuously performs credit evaluations and reviews of its customer base. The Company will write-off an account when collectability is not reasonably assured. The Company believes this process effectively mitigates its exposure to bad debt write-offs; however, if circumstances related to changes in the economy, industry, or customer conditions change, the Company may need to subsequently adjust the allowance for doubtful accounts.

The Company adheres to customary industry terms of net seven days. The Company considers all domestic accounts over 14 days as past due and all international accounts over 30 days past due. Activity in the allowance for doubtful accounts is as follows (in thousands):

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Balance, beginning of period	$1,701		$1,030		$1,466
Bad debt provision (decrease)	(793	)	512		(115	)
Write-offs, net of recoveries	122		(76	)	36
Effect of exchange rates	—		—		2
Balance, end of period	$1,030		$1,466		$1,389

Inventories

Inventories consist primarily of product, livestock, and supplies. Product inventories are considered commodities and are primarily valued based on quoted commodity prices. Australian product inventories are valued based on the lower of cost or net realizable value. Livestock inventories are valued on the basis of the lower of first-in, first-out cost or market. Costs capitalized into livestock inventory include cost of feeder livestock, direct materials, supplies, and feed. Cattle, hogs, and lamb are reclassified from livestock to work in process at time of slaughter. Supply inventories are carried at historical cost. The components of inventories, net of reserves, are as follows (in thousands):

	Predecessor		Successor
	December 24, 2006	July 10, 2007	December 30, 2007
Livestock	$105,033	$122,853	$96,851
Product inventories:
Work in progress	29,561	43,671	37,127
Finished goods	277,433	277,348	292,157
Supplies	45,802	43,726	40,621
	$457,829	$487,598	$466,756

F-103

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Other Current Assets

Other current assets include prepaid expenses which are amortized over the period the Company expects to receive the benefit.

Property, plant and equipment

Property, plant and equipment was recorded at cost and was adjusted to fair value at the date of the Acquisition. Subsequent additions are recorded at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows.

Furniture, fixtures, office equipment and other	5 to 7 years
Machinery and equipment	5 to 15 years
Buildings and improvements	15 to 40 years
Leasehold improvements	shorter of useful life or the lease term

The costs of developing internal-use software are capitalized and amortized when placed in service over the expected useful life of the software. Major renewals and improvements are capitalized while maintenance and repairs are expensed as incurred. The Company has historically and currently accounts for planned major maintenance activities as they are incurred. Upon the sale or retirement of assets, the cost and related accumulated depreciation or amortization are eliminated from the respective accounts and any resulting gains or losses are reflected in earnings. Applicable interest charges incurred during the construction of assets are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives. During the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007, JBS USA Holdings capitalized $0.3 million, $0.4 million and $0.4 million of interest charges, respectively. Assets held under capital lease are classified in property, plant, and equipment and amortized over the lease term. Lease amortization is included in depreciation expense. As of December 24, 2006, July 10, 2007 and December 30, 2007, JBS USA Holdings had $3.7 million, $6.1 million and $6.8 million in commitments outstanding for capital projects, respectively. At December 30, 2007, the Company also had a commitment to purchase $15.5 million of bonds, as discussed in other assets.

JBS USA Holdings assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When future undiscounted cash flows of assets are estimated to be insufficient to recover their related carrying value, the Company compares the asset’s future cash flows, discounted to present value using a risk-adjusted discount rate, to its current carrying value and records a provision for impairment as appropriate.

F-104

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Property, plant, and equipment, net are comprised of the following (in thousands):

	Predecessor				Successor
	December 24, 2006		July 10, 2007		December 30, 2007
Land	$   54,058		$   58,580		$  59,832
Buildings, machinery, and equipment	628,844		657,681		596,954
Property and equipment under capital lease	21,130		20,893		16,776
Furniture, fixtures, office equipment, and other	55,259		58,269		32,527
Construction in progress	18,473		41,477		30,915
	777,764		836,900		737,004
Less accumulated depreciation	(290,337	)	(331,728	)	(28,948	)
	$ 487,427		$ 505,172		$708,056

Accumulated depreciation includes accumulated amortization on capitalized leases of approximately $7.1 million, $7.8 million and $0.9 million as of December 24, 2006, July 10, 2007 and December 30, 2007, respectively. For the fiscal year ended December 24, 2006, the Company recognized $63.9 million and $9.7 million of depreciation expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations, respectively. For the 198 days ended July 10, 2007, the Company recognized $33.8 million and $5.2 million of depreciation expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations, respectively. For the 173 days ended December 30, 2007, the Company recognized $23.9 million and $6.2 million of depreciation expense in cost of goods sold and selling, general, and administrative expenses in the statement of operations, respectively.

JBS USA Holdings monitors certain asset retirement obligations in connection with its operations. These obligations relate to clean-up, removal or replacement activities and related costs for “in-place” exposures only when those exposures are moved or modified, such as during renovations of its facilities. These in-place exposures include asbestos, refrigerants, wastewater, oil, lubricants and other contaminants common in manufacturing environments. Under existing regulations, JBS USA Holdings is not required to remove these exposures and there are no plans or expectations of plans to undertake a renovation that would require removal of the asbestos nor remediation of the other in place exposures at this time. The facilities are expected to be maintained and repaired by activities that will not result in the removal or disruption of these in place exposures. As a result, there is an indeterminate settlement date for these asset retirement obligations because the range of time over which JBS USA Holdings may incur these liabilities is unknown and cannot be estimated. Therefore, JBS USA Holdings cannot reasonably estimate the fair value of the potential liability.

F-105

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Other Assets

Other assets at December 24, 2006 include notes receivable totaling $7.6 million, from the City of Cactus, Texas (the “City”). In December 2002, Swift Beef loaned $2.3 million to the City for use by the City to secure acreage for the construction of the City’s new wastewater treatment plant. JBS USA Holdings owns a beef processing facility, as well as a wet blue hide processing facility which will be served by the new treatment plant. The loan was for an original two-year term and accrued interest at 6%. The loan was amended in December 2004 to extend the maturity for up to one year and was extended for an additional year in December 2005 and again for an additional year in December 2006. An additional loan was made by Swift Beef to the City in the amount of $3.5 million in January 2005 to secure additional acreage and was amended in December 2005 and again in December 2006 to extend the maturity for up to one year. A final loan in the amount of $1.8 million was made to the City to secure final acreage in September 2005 and was amended in September 2006 to extend the maturity for up to one year. In March 2007, the maturity dates of the notes receivable were amended to be on the demand of Swift Beef to the extent that debt securities have been issued by the City in amounts sufficient to repay the loans but in no event later than December 31, 2012. Interest income on the notes is recognized as an offset to interest expense and is payable upon maturity of the notes. In August 2006, the State of Texas approved the issuance of a wastewater treatment permit which was issued on November 9, 2006.

Effective May 15, 2007, Swift Beef entered into an Installment Bond Purchase Agreement (the “Purchase Agreement”) with the City. Under the Purchase Agreement, Swift Beef agreed to purchase up to $26.5 million of the “City of Cactus, Texas Sewer System Revenue Improvement and Refunding Bonds, Taxable Series 2007” to be issued by the City (the “Bonds”) . The Bonds are being issued by the City to finance improvements to its sewer system (the “System”) which is utilized by Swift Beef’s processing plant located in Cactus, Texas (the “Plant”) as well as other industrial users and the citizens of the community of Cactus. Swift Beef will purchase the Bonds in installments upon receipt of Bond installment requests from the City as the System improvements are completed through an anticipated completion date of June 2010. The interest rate on the Bonds is the six-month LIBOR plus 350 basis points. The Bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption beginning on June 1, 2011. The principal and interest on the Bonds will be paid by the City from the net revenues of the System. At December 30, 2007, $8.2 million had been recognized as construction in process and construction financing by the Company. At the date of the Acquisition and at December 30, 2007, Swift Beef held $11.0 million of the Bonds.

On May 21, 2007, in connection with the purchase of the Bonds, Swift Beef entered into a Water & Wastewater Services Agreement (the “Wastewater Agreement”) with the City under which the City will provide water and wastewater services for the Plant at the rates set forth in the Wastewater Agreement. Swift Beef’s payments for the City’s treatment of wastewater from the Plant will include a capacity charge in the amount required to be paid by the City to pay the principal of, and interest on, the Bonds.

F-106

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

On June 1, 2007, Swift Beef purchased the initial installment of Bonds in the amount of $11.0 million. The City repaid the former notes receivable of $7.6 million and accrued interest totaling $1.3 million on June 1, 2007.

The Company has evaluated the impact of EITF No. 01-08, Determining Whether an Arrangement Contains a Lease, as well as EITF No. 97-10, The Effect of Lessee Involvement in Asset Construction, and has determined that it will be required to reflect the wastewater treatment facility as a capital asset (similar to a capital leased asset) as it will be the primary user of the wastewater facility based on projections of volume of throughput. As the City spends funds to construct the facility, the Company will record construction in process and the related construction financing. Construction in progress and construction financing by the Company at July 10, 2007 and December 30, 2007 was $7.6 million and $8.2 million, respectively.

Debt issuance costs

Costs related to the issuance of debt are capitalized and amortized to interest expense over the period the debt is outstanding. Amortization of debt issuance costs for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007 was $10.0 million, $6.2 million and $0.9 million, respectively.

In addition the Company recognized $12.7 million in interest expense for the period ended December 30, 2007 for debt not issued.

Goodwill and other intangible assets

Goodwill and other intangible assets with indefinite lives are not amortized and are tested for impairment at least on an annual basis or more frequently if impairment indicators arise, as required by SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”). Identifiable intangible assets with definite lives are amortized over their estimated useful lives. On an annual basis, JBS USA Holdings performs testing for impairment using a fair-value based approach and, if there is impairment, the carrying amount of goodwill and other non-amortizing intangible assets are written down to the implied fair value. Before the Acquisition, the Company’s annual impairment testing date was in May and was subsequently changed to December in May 2008. Goodwill resulting from the preliminary purchase price allocation from the Acquisition totaled $97.2 million (See Note 12).

For the fiscal year ended December 24, 2006, the Company completed its annual impairment testing of goodwill and identifiable intangible assets with indefinite lives in May 2006. As a result of this testing, the Company recorded an impairment charge totaling $4.5 million related to the goodwill of its Beef segment in the cost of goods sold line in the Statement of Operations.

During the 198 day period ended July 10, 2007, the Company recorded an adjustment to goodwill of $6.8 million related to the reversal of tax reserves which were established as part of the predecessor original 2002 purchase accounting transaction. Under EITF 93-7, the reversal of

F-107

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

tax contingencies related to purchase accounting are recognized as reductions of book goodwill when it is determined that the original reserve is no longer needed.

The table below shows a roll forward of goodwill by segment for the periods ended December 24, 2006, July 10, 2007 and December 30, 2007 (in thousands). The “other” category included in the roll forward is comprised of translation and other adjustments made to goodwill.

Predecessor

	December 25, 2005	Additions	Impairments		Other	December 24, 2006
Beef	$  4,318	$—	$(4,488	)	$170	$     —
Pork	6,811	—	—		—	6,811
Total	$11,129	$—	$(4,488	)	$170	$6,811

	December 24, 2006	Additions	Impairments	Other		July 10, 2007
Beef	$     —	$—	$—	$      —		$—
Pork	6,811	—	—	(6,811	)	—
Total	$6,811	$—	$—	$(6,811	)	$—

Successor

	July 11, 2007	Additions	Impairments	Other		December 30, 2007
Beef	$—	$53,414	$—	$(849	)	$52,565
Pork	—	43,780	—	—		43,780
Total	$—	$97,194	$—	$(849	)	$96,345

Other identifiable intangible assets as of December 24, 2006, July 10, 2007 and December 30, 2007 are as follows (in thousands):

	Predecessor
	December 24, 2006
	Gross carrying amount	Accumulated amortization		Net carrying amount
Amortizing:
Patents	$    3,429	$   (1,696	)	$    1,733
Customer relationships	124,640	(36,861	)	87,779
Mineral rights	810	(95	)	715
Subtotal amortizing intangibles	128,879	(38,652	)	90,227
Non-amortizing:
Water rights	3,628	—		3,628
Trademark	10,138	—		10,138
Subtotal non-amortizing intangibles	13,766	—		13,766
Total intangibles	$142,645	$(38,652)		$103,993

F-108

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

	Predecessor
	July 10, 2007
	Gross carrying amount	Adjustments		Accumulated amortization		Net carrying amount
Patents	$    3,429	$        —		$  (1,904	)	$  1,525
Customer relationships	129,366	(5,640	)	(43,783	)	79,943
Mineral rights	813	—		(115	)	698
Subtotal amortizing intangibles	133,608	(5,640	)	(45,802	)	82,166
Non-amortizing:
Water rights	3,628	(3,326	)	—		302
Trademarks	10,138	—		—		10,138
Subtotal non-amortizing intangibles	13,766	(3,326	)	—		10,440
Total intangibles	$147,374	$(8,966	)	$(45,802	)	$92,606

Patents consist of exclusive marketing rights and are being amortized over the life of the related agreements, which range from 10 to 16 years. The Customer relationship intangible is being amortized on an accelerated basis over its expected useful life of 20 years representing management’s estimate of the period of expected economic benefit. Mineral rights are being amortized over its expected useful life of 20 years. For the fiscal year ended December 24, 2006 and the 198 days ended July 10, 2007, JBS USA Holdings, Inc. recognized $11.0 million and $5.9 million of amortization expense, respectively.

As part of the EITF 93-7 tax adjustment discussed above, the Company also recorded an adjustment of $5.6 million to reverse tax reserves established in the 2002 purchase accounting transaction.

F-109

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

The adjustment to non-amortizing intangibles reflects the sale of water rights at a carrying value of $3.3 million during the period ended July 10, 2007.

	Successor
	December 30, 2007
	Gross carrying amount	Accumulated amortization		Net carrying amount
Amortizing:
Customer relationships	$129,000	$(4,137	)	$124,863
Customer contracts	15,400	(441	)	14,959
Patents	5,200	(227	)	4,973
Rental contract	3,507	(185	)	3,322
Deferred revenue	1,483	(148	)	1,335
Mineral rights	742	(21	)	721
Subtotal amortizing intangibles	155,332	(5,159	)	150,173
Non-amortizing:
Trademark	33,300	—		33,300
Water rights	2,100	—		2,100
Subtotal non-amortizing intangibles	35,400	—		35,400
Total intangibles	$190,732	$(5,159	)	$185,573

The customer relationship intangible and customer contract intangible are amortized on an accelerated basis over 12 and 7 years respectively, representing management’s estimate of the period of expected economic benefit and yearly customer profitability.

Patents consist of exclusive marketing rights and are being amortized over the life of the related agreements, which range from 6 to 20 years. For the 173 days ended December 30, 2007, JBS USA Holdings, Inc. recognized $5.2 million of amortization expense. Based on amortizing assets recognized as of December 30, 2007, amortization expense for each of the next five years is estimated as follows (in thousands):

Estimated amortization expense for fiscal years ending (in thousands):
2008	$16,126
2009	19,857
2010	19,232
2011	18,317
2012	16,740

Overdraft balances

The majority of JBS USA Holdings bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance

F-110

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

result in overdraft balances for accounting purposes and the change in the related balance is reflected in financing activities on the statement of cash flows.

Self-insurance

JBS USA Holdings is self-insured for employee medical and dental benefits and purchases insurance policies with deductibles for certain losses relating to worker’s compensation and general liability. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels of certain claims. Self-insured losses are accrued based upon periodic third party actuarial reports of the aggregate uninsured claims incurred using actuarial assumptions accepted in the insurance industry and the Company’s historical experience rates. JBS USA Holdings has recorded a prepaid asset with an offsetting liability to reflect the amounts estimated as due for claims incurred and accrued but not yet paid to the claimant by the third party insurance company in accordance with SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.

Environmental expenditures and remediation liabilities

Environmental expenditures that relate to current or future operations and which improve operational capabilities are capitalized at time of incurrence. Expenditures that relate to an existing or prior condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated.

Foreign currency translation

For foreign operations, the local currency is the functional currency. Translation into US dollars is performed for assets and liabilities at the exchange rates as of the balance sheet date. Income and expense accounts are translated at average exchange rates for the period. Adjustments resulting from the translation are reflected as a separate component of other comprehensive income. Translation gains and losses on US dollar denominated revolving intercompany borrowings between the Australian subsidiaries and the US parent are recorded in earnings. Translation gains and losses on US dollar denominated intercompany borrowings between the Australian subsidiary and the US parent and which are deemed to be part of the investment in the subsidiary are recorded in other comprehensive income. The balance of foreign currency translation, net of tax in other comprehensive income at December 24, 2006, July 10, 2007 and December 30, 2007 was $55.3 million, $76.1 million and $0.7 million, respectively.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the

F-111

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Beginning with the adoption of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”) as of December 25, 2006, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. JBS USA Holdings has a pre-acquisition tax year ending in May and its post-acquisition tax year ending in December.

Fair value of financial instruments

The carrying amounts of JBS USA Holdings’ financial instruments, including cash and cash equivalents, short-term trade receivables, and payables, approximate their fair values due to the short-term nature of the instruments. Long-term debt, including the $750 million of unsecured loans, installment notes payable and capital lease obligations, were recorded at fair value at the time of the Acquisition (See Note 2) and JBS USA Holdings believes this approximates its fair value at December 30, 2007 subject to adjustments for any payments.

Revenue recognition

The Company’s revenue recognition policies are based on the guidance in Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition in Financial Statements. Revenue on product sales is recognized when title and risk of loss are transferred to customers (upon delivery based on the terms of sale), when the price is fixed or determinable, and when collectibility is reasonably assured. The Company recognizes sales net of applicable provisions for discounts, returns and allowances which are accrued as product is invoiced to customers who participate in such programs based on contract terms and historical and current purchasing patterns.

Advertising costs

Advertising costs are expensed as incurred. Advertising costs for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007 were $7.6 million, $2.9 million and $2.2 million, respectively.

Research and development

The Company incurs costs related to developing new beef and pork products. These costs include developing improved packaging, manufacturing, flavor enhancing, and improving consumer friendliness of meat products. The costs of these research and development activities are less than 1% of total consolidated annual sales and are expensed as incurred.

F-112

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Shipping costs

Pass-through finished goods delivery costs reimbursed by customers are reported in net sales while an offsetting expense is included in cost of goods sold.

Comprehensive income

Comprehensive income consists of net income, foreign currency translation, and derivative adjustments. JBS USA Holdings deems all of its foreign investments to be permanent in nature and does not provide for taxes on permanently reinvested earnings or on currency translation adjustments arising from converting the investment in a foreign currency to US dollars. It is not practical to determine the amount of incremental taxes that might arise were these foreign earnings to be remitted.

Facility closure

In August 2005, the Company closed its Nampa, Idaho non-fed cattle processing facility. The closure was due to continued difficulty of sourcing older non-fed cattle for slaughter in the Northwestern US and the uncertainty surrounding the opening of the Canadian border to the importation of livestock older than 30 months of age. On May 26, 2006, the Company completed the sale of the idled Nampa facility as well as the operating Omaha, Nebraska non-fed cattle processing facility. Due to significant continuing involvement with the non-fed processing facilities through a raw material supply agreement, the operating results related to these plants for all periods presented have been reflected in continuing operations.

Derivatives and hedging activities

JBS USA Holdings accounts for its derivatives and hedging activities in accordance with SFAS No. 133, Accounting for Derivative Financial Instruments and Hedging Activities, (“SFAS No. 133”), and its related amendment, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities. The Company uses derivatives (e.g., futures and options) for the purpose of mitigating exposure to changes in commodity prices and foreign currency exchange rates. The fair value of each derivative is recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives are recognized immediately in the statement of operations for derivatives that do not qualify for hedge accounting. For derivatives designated as a hedge and used to hedge an existing asset or liability, both the derivative and hedged item are recognized at fair value within the balance sheet with the changes in both of these fair values being recognized immediately in the statement of operations. For derivatives designated as a hedge and used to hedge an anticipated transaction, changes in the fair value of the derivatives are deferred in the balance sheet within accumulated other comprehensive income to the extent the hedge is effective in mitigating the exposure to the related anticipated transaction. Any ineffectiveness is recognized immediately in the statement of operations. Amounts deferred within accumulated other comprehensive income are recognized in the statement of operations upon the completion of the related underlying transaction.

F-113

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Adoption of new accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”), which provides for enhanced disclosures about the use of derivatives and their impact on a Company’s financial position and results of operations. The Company adopted SFAS No. 161 on the first day of their 2008 calendar year and the adoption of the standard did not have a material impact on its financial position, results of operations, or cash flows.

In December 2007, the FASB issued SFAS No. 141(R) Business Combinations (“SFAS No. 141(R)”). SFAS No. 141(R) is intended to provide greater consistency in the accounting and reporting of business combinations. SFAS 141(R) requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction and any non-controlling interest in the acquiree at the acquisition date, measured at fair value at that date. This includes the measurement of the acquirer’s shares issued as consideration in a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gains and loss contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance and deferred taxes. One significant change in this statement is the requirement to expense direct costs of the transaction, which under existing standards are included in the purchase price of the acquired company. This statement also established disclosure requirements to enable the evaluation of the nature and financial effect of the business combination. SFAS No. 141(R) is effective for business combinations consummated after December 31, 2008. Also effective, as a requirement of the statement, after December 31, 2008 any adjustments to uncertain tax positions from business combinations consummated prior to December 31, 2008 will no longer be recorded as an adjustment to goodwill, but will be reported in income. During the thirteen weeks ended December 28, 2008, the Company expensed $1.9 million of cost previously capitalized related to the pending acquisition of National Beef Packing Company (“National Beef”) as the transaction did not close prior to December 15, 2008.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). This statement provides a single definition of fair value, a framework for measuring fair value, and expanded disclosures concerning fair value. This Statement is effective for JBS USA Holdings for the fiscal year ending December 28, 2008. The adoption of SFAS No. 157 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

F-114

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Note 4. Accrued liabilities

Accrued liabilities consist of the following (in thousands):

	Predecessor		Successor
	December 24, 2006	July 10, 2007	December 30, 2007
Accrued self insurance reserves	$  48,504	$  48,895	$  30,183
Accrued salaries	38,944	58,838	41,678
Accrued taxes	9,857	7,542	8,538
Accrued freight	22,027	21,781	23,863
Accrued interest	16,793	18,095	18,157
Other	58,807	79,530	64,075
Total	$194,932	$234,681	$186,494

Other accrued liabilities consist of items that are individually less than 5% of total current liabilities.

Note 5. Derivative financial instruments

The fair value of derivative assets is recognized within other current assets while the fair value of derivative liabilities is recognized within accrued liabilities. At December 24, 2006, July 10, 2007 and December 30, 2007, the fair value of derivatives recognized within other current assets was $5.8 million, $23.7 million and $13.9 million, respectively. At December 24, 2006, July 10, 2007 and December 30, 2007, the fair value of derivatives recognized within accrued liabilities was $3.9 million, $11.3 million and $1.4 million, respectively.

As of December 24, 2006, July 10, 2007 and December 30, 2007, the net deferred amount of derivative gains and losses recognized in accumulated other comprehensive income was $1.4 million, $0.6 million and $0.4 million net of tax, respectively. The Company anticipates these amounts will be transferred out of accumulated other comprehensive income and recognized within earnings over the 12 month period following each respective balance sheet date.

The Company utilizes various raw materials in its operations, including cattle, hogs, and energy, such as natural gas, electricity, and diesel fuel, which are all considered commodities. The Company considers these raw materials generally available from a number of different sources and believes it can obtain them to meet its requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond its control, such as economic and political conditions, supply and demand, weather, governmental regulation, and other circumstances. Generally, the Company purchases derivatives in an attempt to mitigate price risk related to its anticipated consumption of commodity inputs for periods of up to 12 months. The Company may enter into longer-term derivatives on particular commodities if deemed appropriate. As of December 30, 2007, the Company had derivative positions in place covering approximately 1% of its anticipated need for livestock through December 2008.

F-115

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Note 6. Long-term debt and loan agreements

As of December 24, 2006, July 10, 2007 and December 30, 2007, debt consisted of the following (in thousands):

	Predecessor		Successor
	December 24, 2006	July 10, 2007	December 30, 2007
Short-term debt
Unsecured bank loans	$              —	$              —	$750,000
Unsecured credit facility	—	—	26,287
Total short-term debt	—	—	776,287
Current portion of long-debt:
Installment notes payable	468	468	619
Capital lease obligations	1,482	1,469	1,379
Total current portion of long-term debt	1,950	1,937	1,998
Long-term debt:
Senior credit facility	217,552	323,529	—
Senior notes due 2009, including unamortized premium	273,909	272,903	—
Senior subordinated notes, including unamortized premium	158,462	157,482	—
Senior notes due 2010	117,809	124,916	—
Convertible senior subordinated notes	89,167	94,183	—
Seller PIK Note, net of accretion discount	182,086	195,971	—
Installment notes payable	10,910	10,637	10,291
Capital lease obligations	15,658	22,354	22,142
Long-term debt, less current portion	1,065,553	1,201,975	32,433
Total debt	$1,067,503	$1,203,912	$810,718

The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years and thereafter following December 30, 2007, are as follows (in thousands):

For the fiscal years ending December	Minimum principal maturities
2008	$778,285
2009	2,604
2010	2,541
2011	2,767
2012	3,098
Thereafter	21,423
Total minimum principal maturities	$810,718

F-116

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

As of December 30, 2007, we had approximately $34.4 million of secured debt outstanding and approximately $29.9 million of outstanding letters of credit.

A summary of the components of interest expense, net is presented below (in thousands):

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Interest on:
Unsecured bank loans	$          —		$        —		$22,966
Unsecured credit facility	—		—		1,311
Senior credit facility (approximately 7.18% and 7.47%)(i)	22,799		12,288		—
Senior notes due 2009 (10.125% rate)	27,068		14,773		50
Senior subordinated notes (12.50% rate)	18,706		10,207		194
Senior notes due 2010 (approximately 11.5%)	13,182		7,646		—
Convertible senior subordinated notes (approximately 11.25%)	9,382		5,408		—
Seller PIK Note	15,772		9,236		—
Amortization of deferred financing costs(ii)	6,394		3,538		—
Amortization of deferred financing costs(iii)	—		—		883
Accretion of original issue discount(iv)	2,542		1,383		—
Accretion of discount on Seller PIK note(v)	7,802		5,289		—
Amortization of premium(vi)	(6,747	)	(3,983	)
Capital lease interest	1,572		855		697
Interest rate swap	1,022		368		31
Other miscellaneous interest charges(vii)	561		524		404
Bank fees	—		—		731
Debt issuance cost on debt not executed(viii)	—		—		12,664
Less:
Capitalized interest	(304	)	(430	)	(420	)
Interest income	(997	)	(719	)	(5,171	)
Total interest expense, net	$118,754		$66,383		$34,340

(i) Represents interest on the outstanding balance of the amount drawn on the revolving credit facility, plus a 0.375% commitment fee on the unused portion of the revolving credit facility and other fees associated with the revolving credit facility.

F-117

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

(ii) Represents amortization utilizing an average maturity of 7 years.

(iii) Represents amortization over the life of the unsecured bank loans.

(iv) Represents accretion of the original issue discount on the notes utilizing the effective interest method

(v) Represents accretion of the discount on the Seller PIK Note calculated using the effective interest method.

(vi) Represents amortization of premium associated with the increased fair value of debt recorded to the extent of the approximate 45% interest acquired in the Call Option using the effective interest method.

(vii) Includes installment notes interest expense of $0.7 million, $0.5 million and $0.3 million for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007, respectively, the remainder is expense for other miscellaneous items.

(viii) Fees incurred with debt refinancing intended as part of the Acquisition. The debt facilities associated with these fees were not consummated and therefore these fees were expensed immediately.

Description of indebtedness

Predecessor

Senior credit facilities—On May 26, 2005, the Company entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) providing senior credit facilities which allowed borrowings up to $550.0 million, consisting entirely of a revolving credit facility of $550.0 million that was to terminate May 26, 2010. Up to $125.0 million of the revolving credit facility was available for the issuance of letters of credit or Australian bank guarantees and up to $65.0 million of the revolving credit facility was available for borrowings in Australian dollars by the Company’s Australian subsidiaries. US dollar denominated borrowings that were euro dollar rate loans would initially bear interest at rates of 1.75% per annum plus the applicable euro dollar rate, or (ii) base rate loans would initially bear interest at rates of 0.75% per annum plus the highest of Citibank’s base rate, the three-month certificate of deposit rate plus 0.5%, and the federal funds effective rate plus 0.5%. Australian dollar denominated borrowings that were (i) bill rate loans would initially bear interest at rates of 1.375% per annum plus the applicable bid rate for Australian bills for the applicable interest period or (ii) short-term loans would initially bear interest at rates of 1.375% per annum plus the Reserve Bank of Australia Official Cash Rate. The revolver balance under the Company’s Amended Credit Agreement included $195.0 million that was financed as a term loan under the Company’s original credit facility. Based on management’s review of cash flow expectations the Company classified all revolver borrowings as long-term as of December 24, 2006 and July 10, 2007. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

Senior notes due 2009—On September 19, 2002, the Company purchased the original business from ConAgra Foods. As a result, the Company issued $268.0 million of its 10 1/8% senior notes due 2009. The senior notes were issued with original issue discount and generated gross proceeds to the Company of approximately $250.5 million. The senior notes were to mature on October 1, 2009. Interest was payable semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2003. On August 15, 2003, the Company completed an exchange offer in which it exchanged new notes that were registered under the Securities Act for the notes. The senior notes were guaranteed by the Company and all of the Company’s domestic subsidiaries. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

F-118

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

On July 16, 2003, the Company entered into a $100 million (notional) interest rate swap that converted a portion of the fixed rate 10 ¹/8% notes into a floating rate obligation. The swap, which had an original maturity of October 1, 2007, was utilized to achieve a target fixed/floating capital structure appropriate for the business. In connection with the exercise of the Call Option, the carrying value for the notes was adjusted to reflect 45% of the excess of fair value over book value resulting in a premium of $218 million being recorded. On July 13, 2007, the Company cancelled its interest rate swap for a payment of $1.1 million since the underlying debt was repaid at the closing of the Acquisition.

Senior subordinated notes—The Company issued to the former owner, ConAgra Foods (“Former Shareholder”), $150.0 million aggregate principal amount of its 12.5% senior subordinated notes due January 1, 2010. The Company completed an exchange of offer in which it exchanged new notes that were registered under the Securities Act of 1933 for Senior subordinated notes. ConAgra Foods subsequently sold all $150.0 million aggregate principal amount of the senior subordinated notes. Interest was payable semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2003. The senior subordinated notes were guaranteed by the Company and all of its domestic subsidiaries. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

Senior notes due 2010—On March 11, 2005, the Company issued $105.0 million of 11% senior notes due 2010. The notes were issued with original issue discount and generated gross proceeds to the Company of $104.7 million. The notes were to mature on March 11, 2010. Interest was payable semi-annually in arrears on May 1 and November 1 of each year commencing on November 1, 2005. Interest could have been paid in cash or as in kind and capitalized to the loan balance, or a combination thereof at the option of the Company. If interest was paid in kind and capitalized and not paid in cash on the semi-annual due dates, the interest rate increased to 12.0%. Interest capitalized to the original issuance amount was $13.0 million as of December 24, 2006 and $20.1 million as of July 10, 2007. Accretion of debt discount totaled $28 thousand for the 198 days ended July 10, 2007 and $52 thousand for the fiscal year ended December 24, 2006. The senior notes were guaranteed by the Company. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

Convertible senior subordinated notes—On March 11, 2005, the Company issued $75.0 million of 10.25% convertible senior subordinated notes. The convertible notes were to mature on March 11, 2010. Interest was payable semi-annually in arrears on May 1 and November 1 each year commencing on November 1, 2005 at the rate of 10.25% per annum, if paid in cash, or 11.25% per annum, if paid in kind and capitalized. Interest capitalized to the original issuance amount was $14.2 million as of December 24, 2006 and $20.1 million as of July 10, 2007. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

Seller PIK note—On September 19, 2002, the Company issued a $150 million promissory note to the Former Shareholder. The stated interest rate was an increasing rate from 8.0% to 10.0% over the 7.5 year life of the note. To record the note at fair value, it was discounted at an estimated market rate at September 19, 2002 of 14.95% resulting in a discount of $54.8 million. Accrued

F-119

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

interest was capitalized to the note balance and both the face amount of the note and all accrued interest would have been payable on the due date March 19, 2010. In connection with the acquisition of the minority interest, the carrying value of the note was adjusted to reflect 45% of the excess of fair value over book value, resulting in a premium of $7.6 million. Accretion of debt discount was approximately $5.3 million for the 198 days ended July 10, 2007 and $7.8 million for the fiscal year ended December 24, 2006. Amortization of the premium discussed above was $0.6 million for the 198 days ended July 10, 2007 and $0.9 million for the fiscal year ended December 24, 2006. Accrued interest was capitalized to the note balance and both the face amount of the note and all accrued interest was to be payable on the due date in 2010. At the closing of the Acquisition on July 11, 2007 this debt was repaid.

Successor

Unsecured credit facility—On August 15, 2007 Swift Australia entered into an unsecured credit facility for Australian Dollar borrowings up to a maximum of AUD $70 million to fund working capital and letter of credit requirements. The initial 90 day term expired on November 17, 2007 and the facility was subsequently extended to February 29, 2008. This facility was replaced with a new agreement on February 26, 2008 when Swift Australia entered into an AUD $120 million unsecured credit facility of which AUD $80 million can be borrowed for cash needs and AUD $40 million is available to fund letters of credit (See Note 12). Borrowings are made at either the cash advance rate (BBSY) plus a margin of 0.35% or a market rate advance (RBA cash rate) plus a margin of 0.50%.

Unsecured bank loans

The following unsecured bank loans were all repaid between April 28, 2008 and June 30, 2008. These loans were repaid with additional paid in capital of $400 million and $350 million in intercompany notes payable (See Note 12).

$250 million loan agreement—In connection with the Acquisition, JBS USA entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 1.50%. The loan was to mature on June 30, 2008. The loan agreement contained customary representations and warranties. The loan agreement was guaranteed by JBS. S.A.

$150 million loan agreement—In connection with the Acquisition, JBS USA entered into a one year unsecured loan agreement with interest payable semi-annually based on six month LIBOR plus a margin of 0.75%. The loan was to mature on June 30, 2008. The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS. S.A.

$250 million credit agreement—In connection with the Acquisition, JBS USA entered into a one year unsecured credit agreement with interest payable quarterly based on three month LIBOR plus a margin of 0.75%. The agreement was to mature on July 7, 2008. The credit agreement contained customary representations, warranties and negative covenants. There were no

F-120

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

maintenance financial covenants but the agreement contained an incurrence of Consolidated Net Indebtedness to EBITDA ratio of 3.75 to 1.00 prior to December 31, 2007 and 3.60 to 1.00 commencing on January 1, 2008 and ending on the maturity date. The credit agreement was guaranteed by JBS. S.A.

$100 million loan agreement—In connection with the Acquisition, JBS USA entered into a one year unsecured loan agreement. The original 182 day loan agreement with interest payable at maturity based on six month LIBOR plus a margin of 0.8%. The loan was to mature on January 7, 2008. On January 3, 2008, an extension and modification agreement was signed changing the maturity date to July 7, 2008 and increasing the margin to 1.5% (See Note 12). The loan agreement contained customary representations, warranties and covenants. The loan agreement was guaranteed by JBS S.A.

Secured debt

Installment notes payable—The installment note payable relates to the Company’s financing of a capital investment and was assumed at the Acquisition. The note bears interest at LIBOR plus a fixed margin of 1.75% per annum with payments due on the first of each month and matures on August 1, 2013.

Capital and operating leases—JBS USA Holdings and certain of its subsidiaries lease the corporate headquarters in Greeley, Colorado under capital lease; six distribution facilities located in New Jersey, Florida, Nebraska, Arizona, Colorado and Texas; marketing liaison offices in the US, Korea, Japan, Mexico, China, and Taiwan; its distribution centers and warehouses in Australia; and a variety of equipment under operating lease agreements that expire in various years between 2008 and 2019 which were assumed in the Acquisition. Future minimum lease payments at December 30, 2007, under capital and non-cancelable operating leases with terms exceeding one year are as follows (in thousands):

	Capitalized lease obligations		Noncancellable operating lease obligations
For the fiscal years ending December
2008	$  2,573		$11,924
2009	2,850		9,200
2010	2,644		5,334
2011	2,721		4,628
2012	2,874		2,732
Thereafter	15,646		6,128
Net minimum lease payments	29,308		$39,946
Less: Amount representing interest	(5,787	)
Present value of net minimum lease payments	$23,521

F-121

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Rent expense associated with operating leases for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007, was $16.2 million, $9.6 million and $8.1 million, respectively.

Note 7. Stock option and defined contribution plans

Predecessor

Stock purchase plans

We had a stock purchase plan pursuant to which eligible employees and non-employees (including non-employee directors) of the Company and its subsidiaries could purchase shares of common stock of Swift Foods. A total of 4,657,095 shares of common stock of the predecessor were authorized for purchase at a price per share as determined by the board of directors on the date of purchase. As of July 10, 2007, certain members of Swift Foods’ management and non-employee directors held an aggregate of (i) 1,410,000 shares purchased under the 2002 stock purchase plan at a purchase price of $1.00 per share, (ii) 500,000 shares under the 2002 stock purchase plan at a purchase price of $1.01 per share and (iii) 286,940 shares purchased under the 2005 stock purchase plan at a purchase price of $1.32 per share. At July 10, 2007, there were 1,440,000 shares available for purchase under the 2002 stock purchase plan and 334,584 shares available for purchase under the 2005 stock purchase plan. Purchases under the 2002 plan were at the estimated fair market value of such shares on the date of purchase. Purchases under the 2005 plan were at less than fair market value in order to allow management to share in the economic benefit arising from the exercise of the Call Option. The Plan was terminated immediately prior to the closing of the Acquisition on July 11, 2007.

2002 Stock Option Plan

We adopted the Swift Foods Company 2002 Stock Option Plan (the “Option Plan”), pursuant to which options were granted at the sole discretion of the Board of Directors to the predecessor employees and eligible non-employees of Swift Foods or subsidiaries for the purchase of shares of common stock of Swift Foods. Due to acceleration of vesting of outstanding options and the termination of the Option Plan immediately prior to the closing of the Acquisition on July 11, 2007 the remaining unrecognized expense was recorded as a component of earnings prior to July 10, 2007.

Stock based compensation expense recognized in the statements of earnings was $0.9 million for the fiscal year ended December 24, 2006 and $1.2 million for the 198 days ended July 10, 2007.

Predecessor & Successor

Defined contribution plans

The Company sponsors two tax-qualified employee savings and retirement plans (the “401(k) Plans”) covering its US based employees, both union and non-union. Pursuant to the 401(k) Plans,

F-122

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plans. The 401(k) Plans provide for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plans. On July 8, 2008 the Company amended its 401(k) Plans described above by eliminating the immediate vesting and instituting a five year vesting schedule for all non-production employees and reducing the maximum Company match to an effective 2% from the former rate of 5%. The trustee of the 401(k) Plans, at the direction of each participant, invests the assets of the 401(k) Plans in participant designated investment options. The 401(k) Plans are intended to qualify under Section 401 of the Internal Revenue Code. The Company’s expenses related to the matching provisions of the 401(k) Plans for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007 totaled approximately $7.1 million, $4.1 million and $3.3 million, respectively.

One of the Company’s facilities had participated in a multi-employer pension plan. The Company’s contributions to this plan, which are included in cost of goods sold in the statement of operations for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007, were $0.4 million, $0.1 million, and $0.1 million, respectively. The Company also made contributions for the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007 totaling $26 thousand dollars for each period to a multiemployer pension related to former employees at the former Nampa, Idaho plant pursuant to a settlement agreement. The Company recognized $0.7 million of contribution expense in costs of goods sold for the fiscal year ended December 24, 2006. As the future payments are made they are recorded as a reduction of the pre-acquisition contingency established during the Acquisition. (See Note 2).

Employees of Swift Australia do not participate in the Company’s 401(k) Plans. Under Australian law, Swift Australia contributes a percentage of employee compensation to a superannuation fund. This contribution approximates 9% of employee cash compensation as required under the Australian “Superannuation Act of 1997”. As the funds are administered by a third party, once this contribution is made to the fund, Swift Australia has no obligation for payments to participants or oversight of the fund. The Company’s expenses related to contributions to this fund for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007 and the 173 days ended December 30, 2007 totaled $14.0 million, $7.1 million and $7.2 million, respectively.

Note 8. Related party transactions

JBS USA Holdings was formerly known as Swift Foods Company (“Swift Foods”). Swift Foods was acquired from ConAgra Foods in a two-step process, 54.7% on September 18, 2002 and 45.3% on September 23, 2004 (collectively “The Transaction”). Swift Foods majority shareholders were HM Capital Partners (“Hicks Muse”) and Booth Creek Investments (“Booth Creek”).

F-123

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Predecessor

Stockholders’ agreement—ConAgra Foods, Hicks Muse, other holders of Swift Foods common stock, and Swift Foods were parties to a Stockholders Agreement that included provisions regarding, among others, the election of directors, registration rights, restrictions on transfer, and other rights regarding sales of Swift Foods stock by Hicks Muse.

The Stockholders Agreement required the holders of Swift Foods common stock that were subject to the agreement, subject to certain conditions, to vote their shares in favor of the election to Swift Foods board of directors of five individuals as may be designated by Hicks Muse and its affiliates. Under the HMTF Rawhide Partnership Agreement, Hicks Muse had agreed to cause an individual designated by an affiliate of George N. Gillett, Jr., our then Chairman of the Board, to be included in the five individuals designated for election to Swift Foods board of directors by Hicks Muse for as long as Mr. Gillett or his affiliates continued to own at least 25% of the limited partnership interest in Rawhide owned by such parties at the closing of the Transaction.

Monitoring and oversight agreement—In connection with the Transaction, Swift Foods and certain of its direct and indirect subsidiaries entered into a ten-year agreement (the “Monitoring and Oversight Agreement”) with an affiliate of HM Capital Partners, LLC (formerly known as Hicks, Muse, Tate & Furst, Incorporated) pursuant to which Swift Foods, as the assignee of this agreement in November 2004, would pay Hicks Muse Partners an annual fee for ongoing oversight and monitoring services provided to it. The annual fee would be adjusted at the beginning of each fiscal year to an amount equal to the greater of (a) $2 million or (b) 1% of the budgeted consolidated annual EBITDA of Swift Foods and its subsidiaries. The annual fee would also be adjusted in the event that Swift Foods or any of its subsidiaries acquired another entity or business during the term of the agreement. This expense was paid in advance quarterly and $2.2 million and $1.3 million are included in selling, general, and administrative expense for the fiscal year ended December 24, 2006 and the 198 days ended July 10, 2007.

Swift Foods had agreed to indemnify Hicks Muse, its affiliates and their respective directors, officers, controlling persons, if any, agents, independent contractors, and employees from and against all claims, liabilities, damages, losses, and expenses arising out of or in connection with the services rendered by Hicks Muse pursuant to the Monitoring and Oversight Agreement. One of Swift Foods’ directors, Mr. Muse, was a limited partner of Hicks Muse and a director, officer, and stockholder of the general partner of Hicks Muse.

The Monitoring and Oversight Agreement made available the resources of Hicks Muse concerning a variety of financial and operational matters. Swift Foods believed the services that were to be provided by Hicks Muse could not otherwise be obtained by it without the addition of personnel or the engagement of outside professional advisors. In management’s opinion, the fees provided for under the Monitoring and Oversight Agreement reasonably reflected the benefits received by Swift Foods.

F-124

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Hicks Muse had agreed to pay to Gillett Greeley, LLC, an affiliate of George N. Gillett, Jr., the then Chairman of the Board, 25% of the annual fees payable to it under the Monitoring and Oversight Agreement pursuant to a consulting agreement between Hicks Muse and Booth Creek, which was ultimately controlled by Mr. Gillett. Booth Creek had agreed to provide consulting services to Hicks Muse.

Financial advisory agreement—In connection with the Transaction, Swift Foods and certain of its direct and indirect subsidiaries also entered into a ten-year agreement (the “Financial Advisory Agreement”) pursuant to which an affiliate of Hicks Muse received a cash financial advisory fee equal to $15.0 million upon the closing of the Transaction as compensation for its services as financial advisor for the Transaction. The Financial Advisory Agreement also provided for Hicks Muse to receive an expense reimbursement of $2.0 million upon the closing of the Transaction. These fees were included as part of the expenses of the Transaction. The expense reimbursement was agreed upon in the purchase agreement to reimburse Swift Foods’ chairman for normal due diligence costs incurred in evaluating and analyzing the acquisition. The agreement provided for a defined reimbursement of $2.0 million to cover due diligence expenses without having to provide Swift Foods with detailed expense records. These fees were included as part of the expenses of the Transaction.

Hicks Muse also was entitled to receive a fee equal to 1.5% of the transaction value for any subsequent transaction in which Swift Foods, as the assignee of the agreement in November, 2004, was involved that was consummated during the term of the Financial Advisory Agreement.

The Financial Advisory Agreement made available the investment banking, financial advisory, and other similar services of Hicks Muse. Swift Foods believed the services that were provided by Hicks Muse could not otherwise be obtained by it without the addition of personnel or the engagement of outside professional advisors. In management’s opinion, the fees provided for under the Financial Advisory Agreement reasonably reflect the benefits received by Swift Foods.

Swift Foods had agreed to indemnify Hicks Muse, its affiliates and their respective directors, officers, controlling persons, if any, agents, independent contractors and employees from and against all claims, liabilities, damages, losses and expenses arising out of or in connection with the services rendered by Hicks Muse pursuant to the Financial Advisory Agreement. One of Swift Foods’ directors, Mr. Muse, is a limited partner of Hicks Muse and a director, officer, and shareholder of the general partner of Hicks Muse Partners.

Hicks Muse had agreed to pay to Booth Creek, an affiliate of George N. Gillett, Jr., the Company’s then Chairman of the Board, 25% of the annual fees payable to it under the Financial Advisory Agreement. Booth Creek Management Company did not receive any portion of the $15.0 million cash financial advisory fee paid to Hicks Muse upon the closing of the Transaction. Hicks Muse paid to Gillett Greeley, LLC, an affiliate of George N. Gillett, Jr., all of the $2.0 million expense reimbursement described above.

Indemnification and release agreement—At the closing of the Transaction, Swift Foods and certain of its direct and indirect subsidiaries entered into an indemnification and release

F-125

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

agreement with ConAgra Foods pursuant to which Swift Foods agreed to be bound by the post-closing indemnification obligations set forth in the purchase agreement and, following the closing, to release ConAgra Foods from all liabilities and actions for environmental costs or liabilities other than that which are set forth in the purchase agreement.

Tax Sharing Agreement—In connection with the closing of the Transaction, Swift Foods and certain of its direct and indirect subsidiaries entered into a tax sharing agreement assumed by Swift Foods in November 2004 pursuant to which the Company is obligated, among other things, to distribute to Swift Foods any taxes attributable to it and its subsidiaries and under which the Company will be indemnified for any taxes paid by it or its subsidiaries on behalf of any other member of Swift Foods’ consolidated tax group.

Contribution Agreement—In connection with the closing of the Transaction, Swift Foods, with its direct and indirect subsidiaries entered into a contribution agreement assumed by Swift Foods in November 2004 pursuant to which these entities will contribute or otherwise pay over, or cause any of their subsidiaries to contribute or otherwise pay over, to the Company any amounts they receive from ConAgra Foods or its affiliates pursuant to indemnification claims under the purchase agreement and any amounts obtained from other sources which are applied to offset any indemnification claims that the Company could otherwise make under the purchase agreement.

Indemnity Side Letter—In connection with the closing of the Transaction, ConAgra Foods agreed to reimburse the Company to the extent recall costs incurred after the Transaction exceed the accrual made for estimated recall costs pursuant to the purchase agreement relating to the Transaction, and the Company agreed to reimburse ConAgra Foods to the extent the accrual exceeds the recall costs. ConAgra Foods had further agreed to indemnify the Company for liabilities, costs, and expenses that it may incur with respect to third parties in connection with product liability claims or personal injury causes of action arising from the consumption of the products subject to the recall. The Company has a $1.6 million receivable from ConAgra Foods at December 24, 2006, July 10, 2007 and December 30, 2007 for reimbursement of amounts in excess of the accrual which represents additional claims from customers seeking reimbursement for recall related costs from the Company. The balance of the receivable was subsequently collected in 2008.

Transactions with affiliated companies

During the fiscal year ended December 24, 2006 and the 198 days ended July 10, 2007, the Company purchased $3.9 million and $2.5 million in cattle hides, respectively and $368 thousand and $334 thousand of commodity product from Coleman Natural Meats (“Coleman”), an independent meat packing company controlled by the then chairman of the Board of Swift Foods and its subsidiaries, respectively. In addition, it provided certain further processing capabilities to Coleman in the amount of $118 thousand for the fiscal year ended December 24, 2006. There were no amounts for the 198 days ended July 10, 2007 for these services.

F-126

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

During the 198 days ended July 10, 2007, the Company paid commissions totaling $27 thousand to Swett & Crawford, an intermediary insurance broker owned by HMSC Investments, L.P., an affiliate of Hick Muse Partners, one of the Company’s then equity sponsors. The commissions were earned by Swett & Crawford for placing insurance coverage with third-party carriers at market rates.

Successor

JBS USA Holdings enters into transactions in the normal course of business with affiliates of JBS S.A. Sales to affiliated companies included in net sales on the statement of operations for the 173 days ended December, 2007 were $6.3 million. Amounts owed to JBS USA Holdings by affiliates as of December 30, 2007 totaled approximately $5.6 million.

For the 173 days ended December 30, 2007, the Company recorded $26 thousand of rental income related to real property leased to two of its executive officers. At December 30, 2007 the receivable balance related to this income was $26 thousand.

Indemnification and release agreement—A predecessor entity of JBS USA Holdings and certain of its direct and indirect subsidiaries entered into an indemnification and release agreement with ConAgra Foods pursuant to which JBS USA Holdings is bound by the post-closing indemnification obligations set forth in the purchase agreement and to release ConAgra Foods from all liabilities and actions for environmental costs or liabilities other than that which are set forth in the purchase agreement.

Guarantees—JBS S.A. has notes payable outstanding of approximately $300 million at December 30, 2007 that were issued in July 2006 and are due in 2016. The notes payable indenture requires each of JBS’s significant subsidiaries, at the time of issuance or any time in the future, to be a guarantor on the notes payable. The Company has determined that they meet the definition of a significant subsidiary and are a guarantor on those notes payable issued by JBS.

Note 9. Income taxes

The pre-tax loss on which the provision for income taxes was computed is as follows (in thousands):

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Domestic	$(139,170	)	$  (66,499	)	$(112,074	)
Foreign	(15,584	)	(34,893	)	1,507
Total	$(154,754	)	$(101,392	)	$(110,567	)

F-127

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Income tax expense (benefit) includes the following current and deferred provisions (in thousands):

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Current provision:
Federal	$     (132	)	$  (1,855	)	$      (2	)
State	231		943		313
Foreign	877		4,610		891
Total current tax expense	976		3,698		1,202
Deferred benefit:
Federal	(26,000	)	(9,435	)	92
State	(4,613	)	(1,170	)	(63	)
Foreign	(7,711	)	(11,473	)	(206	)
Total deferred tax benefit	(38,324	)	(22,078	)	(177	)
Total income tax (benefit) expense	$(37,348	)	$(18,380	)	$1,025

The principal differences between the effective income tax rate, and the US statutory federal income tax rate, were as follows:

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
Expected tax rate	35.0%		35.0%		35.0%
State income taxes (net of federal benefit)	4.1		3.5		5.0
Non-deductible expense	(0.7	)	(1.0	)	—
Benefit from export sales	1.5		—		—
Valuation allowance	(7.9	)	(29.0	)	(42.4	)
Unremitted earnings	(8.6	)	7.2		—
Reclass of reserve	0.4		2.4		—
Other, net	0.4		0.1		1.5
Effective tax rate	24.2%		18.2%		(0.9)%

F-128

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Temporary differences that gave rise to a significant portion of deferred tax assets (liabilities) were as follows (in thousands):

	Predecessor				Successor
	December 24, 2006		July 10, 2007		December 30, 2007
Inventory	$(13,634	)	$(18,329	)	$(13,812	)
Derivatives	(21	)	(149	)	—
Interest	—		—		(1,417	)
Depreciation and amortization	(82,123	)	(58,590	)	(138,633	)
Undistributed earnings	(60,198	)	(78,125	)	—
Long term debt discount	(14,791	)	(11,400	)	—
All other current	(9,579	)	(6,348	)	(5,866	)
All other long-term	—		—		(75	)
Gross deferred tax liability	(180,346	)	(172,941	)	(159,803	)
Accounts receivable reserve	544		698		649
Depreciation and amortization	4,310		1,896		857
Inventory	488		572		33
Long term debt premium	12,409		9,294		—
Interest	—		—		13,379
Accrued liabilities	25,563		24,550		21,507
Deferred revenue	—		602		505
Net operating loss/capital loss	113,559		147,539		215,812
Tax credit carryforwards	4,827		6,197		6,775
Derivatives	—		—		148
All other current	317		587		—
All other long-term	2,618		7,594		4,468
Total deferred tax asset	164,635		199,529		264,133
Valuation allowance	(18,750	)	(52,005	)	(126,976	)
Net deferred tax assets	145,885		147,524		137,157
Net deferred tax liability	$(34,461	)	$(25,417	)	$(22,646	)
Financial statement classification:
Current deferred tax asset	$11,149		$7,784		$4,493
Current deferred tax liability	(6,696	)	(9,323	)	(12,885	)
Long-term deferred tax asset	—		—		5,434
Long-term deferred tax liability	(38,914	)	(23,878	)	(19,688	)
Net deferred tax liability	$(34,461	)	$(25,417	)	$(22,646	)

F-129

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

At December 24, 2006, July 10, 2007 and December 30, 2007, JBS USA Holdings has recorded net deferred tax assets of $109.4 million, $142.9 million and $192.8 million respectively for federal and state net operating loss carryforwards expiring in the years 2007 through 2028.

Section 382 of the Internal Revenue Code of 1986, as amended, imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its net operating losses to reduce its tax liability. JBS USA Holdings experienced an ownership change in January of 2007 and July of 2007. JBS USA Holdings believes that its net operating losses exceed the Section 382 limitation in the amount of $14.0 million.

The valuation allowance for deferred tax assets as of December 24, 2006, July 10, 2007 and December 31, 2007 was $18.8 million, $52.0 million, and $127.0 million respectively. The net change in the total valuation allowance was an increase of $33.2 million and an increase of $75.0 million as of July 10, 2007 and December 30, 2007 respectively. The valuation allowance as of all dates presented was primarily related to loss and credit carryforwards that, in the judgment of management, are not more likely than not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment.

Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 30, 2007 will be allocated to income tax expense pursuant to FAS 141(R). Prior to the adoption of FAS 141(R), $79.8 million of any subsequent tax benefits would be allocated to reduce goodwill related to the acquisition of JBS USA Holdings by JBS SA.

JBS USA Holdings (predecessor) has provided $60.2 million and $78.1 million for taxes on unremitted earnings of foreign subsidiaries. However as of December 24, 2006 and July 10, 2007, $57.1 million and $64.9 million, respectively, were considered indefinitely reinvested.

JBS USA Holdings (successor) deems all of its foreign investments to be permanent in nature and does not provide for taxes on permanently reinvested earnings. It is not practical to determine the amount of incremental taxes that might arise were these earnings to be remitted.

JBS USA Holdings adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), on December 25, 2006. Upon adoption of FIN 48, JBS USA Holdings recognized a $347 thousand increase in its retained earnings balance. After adoption of FIN 48, JBS USA Holding’s unrecognized tax benefits were $776 thousand, the recognition of which would have no net impact on the effective rate.

F-130

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):

Balance at December 25, 2006	$    776
Additions based on tax positions related to the current period	—
Additions for tax positions of prior years	—
Reductions for lapses of statute of limitations	—
Reductions for settlements	—
Balance at July 10, 2007	$   776
Balance at Acquisition	$8,286
Additions based on tax positions related to the current period	14
Additions for tax positions of prior years	—
Reductions for lapses of statute of limitations	—
Reductions for settlements	—
Balance at December 30, 2007	$8,300

JBS USA Holdings recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. Accrued interest and penalties were $161 thousand and $187 thousand as of July 10, 2007 and December 30, 2007 respectively.

JBS USA Holdings files income tax returns in the US and in various other states and foreign countries. JBS USA Holdings is no longer subject to audit for US Federal income tax purposes for years before 2004. In the other major jurisdictions where JBS USA Holdings operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2002.

JBS USA Holdings and its subsidiaries have various income tax returns in the process of examination. The unrecognized tax benefit and related penalty and interest balances at December 30, 2007 are expected to decrease by $0.4 million within the next twelve months.

Note 10. Commitments and contingencies

On July 1, 2002, a lawsuit entitled Herman Schumacher et al v. Tyson Fresh Meats, Inc., et al was filed against a predecessor company, Tyson Foods, Inc., Excel Company, and Farmland National Beef Packing Company, L.P. in the United States District Court for the District of South Dakota seeking certification of a class of all persons who sold cattle to the defendants for cash, or on a basis affected by the cash price for cattle, during the period from April 2, 2001 through May 11, 2001 and for some period up to two weeks thereafter. The complaint alleges that the defendants, in violation of the Packers and Stockyards Act of 1921, knowingly used, without correction or disclosure, incorrect and misleading boxed beef price information generated by the USDA to purchase cattle offered for sale by the plaintiffs at a price substantially lower than was justified by the actual and correct price of boxed beef during this period. On April 12, 2006, the jury returned a verdict against three of the four defendants, including a $2.3 million verdict against Swift Beef. On February 15, 2007 a judgment was entered on the verdict by the court and

F-131

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

on March 12, 2007 Swift Beef Company filed a notice of appeal. Although Swift Beef Company had begun the process of appealing this judgment, a liability for the amount of the verdict was recorded on May 28, 2006. ConAgra Foods will indemnify Swift & Company against any judgments for monetary damages or settlements arising out of this litigation or any future litigation arising from the same facts to the extent such damages together with any other indemnifiable claims under the acquisition agreement entered into the purchase of Swift Foods from ConAgra Foods, Inc. in 2002 exceed a minimum threshold of $7.5 million. On January 29, 2008 Swift Beef was notified that the appeals court ruled in favor of the defendants on all counts. Swift Beef is now seeking the recovery of a portion of the legal fees it expended in this matter. As the claimants rights to appeal expired during the third quarter ended December 28, 2008 the reversal of the previously accrued trial court verdict amount was recorded as an adjustment to the Acquisition, not as a reduction of expenses on the Consolidated Statement of Operations.

Swift Beef was a defendant in a lawsuit entitled United States of America, ex rel, Ali Bahrani v. ConAgra, Inc., ConAgra Foods, Inc., ConAgra Hide Division, ConAgra Beef Company and Monfort, Inc., filed in the United States District Court for the District of Colorado in May 2000 by the relator on behalf of the United States of America and himself for alleged violations of the False Claims Act. Under the False Claims Act, a private litigant, termed the “relator,” may file a civil action on the United States government’s behalf against another party for violation of the statute, which, if proven, would entitle the relator to recover a portion of any amounts recovered by the government. The lawsuit alleged that the defendants violated the False Claims Act by forging and/or improperly altering USDA export certificates used from 1991 to 2002 to export beef, pork, poultry and bovine hides to foreign countries. The lawsuit sought to recover three times the actual damages allegedly sustained by the government, plus per-violation civil penalties.

On December 30, 2004, the United States District Court granted the defendants’ motions for summary judgment on all claims. The United States Court of Appeals for the Tenth Circuit reversed the summary judgment on October 12, 2006 and remanded the case to the trial court for further proceedings consistent with the court’s opinion. Defendants filed a Motion for Rehearing En Banc on October 26, 2006. On May 10, 2007, the Tenth Circuit denied that motion.

Issues in the case were bifurcated and two separate jury trials were held, the first trial centering on beef certificates was held from April 28, 2008, to April 29, 2008 and the second trial centering on bovine hide certificates was held from March 9 to March 19, 2009. Following the April trial, a verdict with respect to the beef certificates was returned ruling in favor of the Company on all counts. Following the March trial, a verdict with respect to the bovine hide certificates was returned ruling in favor of Company on 99.5% of the claims. Specifically, Company prevailed with respect to approximately 995 bovine hide certificates and the relator prevailed with respect to only 5 certificates. Based on the False Claims Act, this verdict resulted in a judgment against Company of $28 thousand and the court ordered that each party pay its own attorneys’ fees and court costs. The relator timely issued a notice of appeal and entered a motion for attorneys’ fees and costs alleging that, because it prevailed on 0.5% of its claims, it was entitled to the payment

F-132

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

of its attorneys’ fees and costs, estimated at $3 million. The Company has timely responded to the relator’s notice of appeal, filed a cross appeal, and responded to the relator’s motion for attorneys’ fees and costs. The parties await final adjudication of these issues, which could come as early as the third quarter, 2009.

The Company is also a party to a number of other lawsuits and claims arising out of the operation of its businesses. Management believes the ultimate resolution of such matters should not have a material adverse effect on the Company’s financial condition, results of operations, or liquidity. Attorney fees are expensed as incurred.

Commitments

JBS USA Holdings enters into purchase agreements for livestock which require the purchase of either minimum quantities or the total production of the facility over a specified period of time. At December 30, 2007, the Company had commitments to purchase 34.7 million hogs through 2014 and approximately 35% of cattle needs through short-term contracts. As the final price paid cannot be determined until after delivery, the Company has estimated market prices based on Chicago Mercantile Exchange traded futures contracts and applied those to either the minimum quantities required per the contract or management’s estimates of livestock to be purchased under certain contracts to determine its estimated commitments for the purchase of livestock, which are as follows (in thousands):

Estimated livestock purchase commitments for fiscal year ended:
2008	$3,167,672
2009	1,010,143
2010	940,570
2011	609,332
2012	547,507
Thereafter	439,003

Through use of these contracts, the Company purchased approximately 65% of its hog slaughter needs during the 173 days ended December 30, 2007.

Note 11. Business segments

JBS USA Holdings is organized into two operating segments, which are also the Company’s reportable segments: Beef and Pork. Segment operating performance is evaluated by the Chief Operating Decision Maker (“CODM”), as defined in SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, based on Earnings Before Interest, Taxes, Depreciation, and Amortization and interest and exclusion of certain non-cash items which affect net income (“EBITDA”). EBITDA is not intended to represent cash from operations as defined by GAAP and should not be considered as an alternative to cash flow or operating income as measured by GAAP. JBS USA Holdings believes EBITDA provides useful information about operating performance, leverage, and liquidity. The accounting policies of the segments are consistent with those described in Note 3. All intersegment sales and transfers are eliminated in consolidation.

F-133

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Beef—The majority of Swift Beef’s revenues are generated from the sale of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, Swift Beef also sells beef by-products to the variety meat, feed processing, fertilizer, automotive and pet food industries. Furthermore, Australian’s foods division produces value-added meat products including toppings for pizzas. The trading division in the US and Australia trades boxed meat products to brokers and retailers who resell those products to end customers.

In August 2005, the Company closed its Nampa, Idaho non-fed cattle processing facility. The closure was due to continued difficulty of sourcing older non-fed cattle for slaughter in the Northwestern US and the uncertainty surrounding the opening of the Canadian border to the importation of livestock older than 30 months of age. On May 26, 2006, the Company completed the sale of the idled Nampa facility as well as the operating Omaha, Nebraska non-fed cattle processing facility. Due to significant continuing involvement with the non-fed processing facilities through a raw material supply agreement, the operating results related to these plants for all periods presented have been reflected in continuing operations.

Pork—A significant portion of Swift Pork’s revenues are generated from the sale of products predominantly to retailers of fresh pork including trimmed cuts such as loins, roasts, chops, butts, picnics, and ribs. Other pork products, including hams, bellies, and trimmings are sold predominantly to further processors who, in turn, manufacture bacon, sausage, and deli and luncheon meats. The remaining sales are derived from by-products and from further-processed, higher-margin products. The lamb slaughter facility is included in Pork and accounts for less than 1% of total net sales.

F-134

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Corporate and other—Includes certain revenues, expenses, and assets not directly attributable to the primary segments, as well as eliminations resulting from the consolidation process.

	Predecessor						Successor
	Fiscal year ended December 24, 2006			198 days ended July 10, 2007			173 days ended December 30, 2007
	(in thousands)			(in thousands)			(in thousands)
Net sales
Beef	$	7,576,136		$	3,757,295		$	3,942,231
Pork		2,152,583			1,234,133			1,063,644
Corporate and other		(37,287	)		(20,804	)		(16,891	)
Total	$	9,691,432		$	4,970,624		$	4,988,984
Depreciation, amortization, and goodwill impairment charges (i)
Beef	$	65,443		$	32,913		$	25,627
Pork		23,679			11,925			9,617
Total	$	89,122		$	44,838		$	35,244
EBITDA
Beef	$	(13,034	)	$	(24,878	)	$	(103,354	)
Pork		65,027			31,234			57,352
Total		51,993			6,356			(46,002	)
Depreciation, amortization, and goodwill impairment(i)		(89,122	)		(44,838	)		(35,244	)
Interest expense, net		(118,754	)		(66,383	)		(34,340	)
Foreign currency transaction gains		463			527			5,201
Gain/(loss) on sales of property, plant and equipment		666			2,946			(182	)
Loss before income tax expense		(154,754	)		(101,392	)		(110,567	)
Income tax benefit/(expense)		37,348			18,380			(1,025	)
Net loss	$	(117,406	)	$	(83,012	)	$	(111,592	)

(i) The fiscal year ended December 24, 2006 includes a goodwill impairment charge of $4.5 million related to the Beef segment.

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
	(in thousands)		(in thousands)		(in thousands)
Capital expenditures
Beef	$	39,304	$	29,390	$	28,129
Pork		7,990		4,310		5,332
Total	$	47,294	$	33,700	$	33,461

F-135

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Corporate and other—Includes certain assets not directly attributable to the primary segments as well as the parent companies’ investments in each operating subsidiary. Also includes eliminations resulting from the consolidation process.

Total assets by segment (in thousands):

	Predecessor				Successor
	December 24, 2006		July 10, 2007		December 30, 2007
Total Assets
Beef	$1,210,242		$1,322,788		$1,572,928
Pork	338,940		289,408		487,160
Corporate and other	(10,585	)	(33,846	)	105,727
Total	$1,538,597		$1,578,350		$2,165,815

Sales by geographical area based on the location of the facility recognizing the sale (in thousands):

	Predecessor		Successor
	Fiscal year ended December 24, 2006	198 days ended July 10, 2007	173 days ended December 30, 2007
Net sales
United States	$8,159,577	$4,111,114	$3,980,369
Australia	1,531,855	859,510	1,008,615
Total	$9,691,432	$4,970,624	$4,988,984

Sales to unaffiliated customers by location of customer (in thousands):

	Predecessor				Successor
	Fiscal year ended December 24, 2006		198 days ended July 10, 2007		173 days ended December 30, 2007
United States	$	7,499,398	$	3,749,312	$	3,520,268
Japan		682,773		373,372		365,759
Mexico		390,115		212,232		245,475
Korea		285,122		139,224		161,606
Australia		217,365		137,881		256,987
Other		616,659		358,603		438,889
Total	$	9,691,432	$	4,970,624	$	4,988,984

F-136

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Long-lived tangible assets by location of assets (in thousands):

	Predecessor				Successor
	December 24, 2006		July 10, 2007		December 30, 2007
Long-lived assets:
United States	$	315,841	$	332,274	$	449,013
Australia		174,277		185,844		281,750
Other		113		106		121
Total	$	490,231	$	518,224	$	730,884

Long-lived assets consist of property, plant, and equipment, net of depreciation, and other assets less debt issuance costs. Long-lived assets by geographical area are based on location of facilities.

No single customer accounted for more than 10% of net sales in the fiscal year ended December 24, 2006, 198 days ended July 10, 2007, or 173 days ended December 30, 2007.

Note 12. Subsequent events

Acquisitions

The allocation presented below reflects the finalized fair value of the individual assets and liabilities as of July 11, 2007 (in thousands) for the purchase of JBS USA Holdings:

Purchase price paid to previous shareholders	$ 225,000
Debt paid including accrued interest of $22,872	1,197,124
Fees and direct expenses	48,544
Total purchase price	$1,470,668
Preliminary purchase price allocation:
Current assets and liabilities	$583,643
Property, plant, and equipment	693,672
Identified intangibles	188,761
Deferred tax asset	56,537
Goodwill	42,762
Other noncurrent assets and liabilities, net	(94,707	)
Total purchase price allocation	$1,470,668

On March 4, 2008, JBS Southern Australia Pty. Ltd (“JBS Southern”), an indirect subsidiary of JBS USA Holdings entered into an agreement with Tasman Group Services, Pty. Ltd. (“Tasman Group”) to purchase substantially all of the assets of Tasman Group in an all cash transaction (“Tasman Acquisition”) and the purchase was completed on May 2, 2008. The assets acquired include six processing facilities and one feedlot located in southern Australia. This acquisition provides additional capacity to continue to meet customer demand. The aggregate purchase

F-137

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

price for the Tasman Acquisition was $117.3 million (including approximately $8.6 million of transaction costs). JBS Southern also assumed approximately $52.1 million of outstanding debt.

On March 4, 2008, JBS and Smithfield Foods, Inc (“Smithfield Foods”) entered into a Stock Purchase Agreement (“Smithfield Agreement”). Pursuant to the Smithfield Agreement, JBS purchased Smithfield Beef Group, Inc. (“Smithfield Beef”) for $563.2 million in cash (including $26.1 million of transaction related costs) and contributed its ownership in Smithfield Beef to JBS USA Holdings, Inc. (Smithfield Acquisition). JBS USA Holdings contributed its ownership in Smithfield Beef Group to JBS USA, Inc. (now known as JBS USA, LLC). The purchase included 100% of Five Rivers Ranch Cattle Feeding LLC (“Five Rivers”), which was held by Smithfield Beef in a 50/50 joint venture with Continental Grain Company (“CGC,” formerly ContiGroup Companies, Inc.). On October 23, 2008, the acquisition of Smithfield Beef was completed. In conjunction with the closing of this purchase Smithfield Beef was renamed JBS Packerland and Five Rivers was renamed JBS Five Rivers Cattle Feeding LLC (“JBS Five Rivers”). The assets acquired include four processing plants and eleven feedlots. This acquisition provides additional capacity to continue to meet customer demand.

The purchase excludes substantially all live cattle inventories held by Smithfield Beef and Five Rivers as of the closing date, together with its associated debt. The excluded live cattle will be raised by JBS Five Rivers after closing for a negotiated fee and then sold upon maturity at market-based prices. Proceeds from the sale of the excluded live cattle will be paid in cash to the Smithfield Foods/CGC joint venture or to Smithfield Foods, as appropriate. The parties to this agreement believe most of the live cattle inventories will be sold within six months following closing, with substantially all sold within 12 months of closing.

Five Rivers is party to a cattle supply and feeding agreement with an unconsolidated affiliate (“the unconsolidated affiliate”). Five Rivers feeds and takes care of cattle owned by the unconsolidated affiliate. The unconsolidated affiliate pays Five Rivers for the cost of feed and medicine at cost plus a yardage fee on a per head per day basis. Beginning on June 23, 2009 or such earlier date on which Five Rivers’ feed yards are at least 85% full of cattle and ending on October 23, 2011, the unconsolidated affiliate agrees to maintain sufficient cattle on Five Rivers’ feed yards so that such feed yards are at least 85% full of cattle at all times. The agreement commenced on October 23, 2008 and continues until the last of the cattle on Five Rivers’ feed yards as of October 23, 2011 are shipped to the unconsolidated affiliate, a packer or another third party.

On October 7, 2008 JBS USA, LLC became party to a cattle purchase and sale agreement with the unconsolidated affiliate. Under this agreement, the unconsolidated affiliate agrees to sell to JBS USA, LLC, and JBS USA, LLC agrees to purchase from the unconsolidated affiliate, at least 500,000 cattle during each year from 2009 through 2011. The price paid by JBS USA, LLC is determined pursuant to JBS USA, LLC’s pricing grid in effect on the date of delivery. The grid used for the unconsolidated affiliate is identical to the grid used for unrelated third parties. If the cattle sold by the unconsolidated affiliate in a quarter result in a breakeven loss (selling price below accumulated cost to acquire the feeder animal and fatten it to delivered weight) then JBS USA,

F-138

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

LLC will reimburse 40% of the average per head breakeven loss incurred by the unconsolidated affiliate on up to 125,000 head delivered to JBS USA, LLC in that quarter. If the cattle sold by the unconsolidated affiliate in a quarter result in a breakeven gain (selling price above the accumulated cost to acquire the feeder animal and fatten it to delivered weight), then JBS USA, LLC will receive from the unconsolidated affiliate an amount of cash equal to 40% of that per head gain on up to 125,000 head delivered to JBS USA, LLC in that quarter. There were no payments under the loss/profit sharing provisions of this agreement for the thirteen weeks ended March 29, 2009.

The unconsolidated affiliate has a $600.0 million secured revolving credit facility with a commercial bank. Its parent company has entered into a keep-well agreement with its subsidiary (the unconsolidated affiliate) whereby it will make contributions to the unconsolidated affiliate if the unconsolidated affiliate is not in compliance with its financial covenants under this credit facility. If the unconsolidated affiliate defaults on its obligations under the credit facility and such default is not cured by its parent under the keep-well agreement, Five Rivers is obligated for up to $250.0 million of the obligations under this credit facility. This credit facility and the guarantee thereof are secured solely by the fixed assets of the unconsolidated affiliate and Five Rivers. This credit facility matures on October 7, 2011. This credit facility is used to acquire cattle which are then fed in the Five Rivers feed yards pursuant to the cattle supply and feeding agreement described above. The finished cattle are sold to JBS USA, LLC under the cattle purchase and sale agreement discussed above.

Five Rivers is party to an agreement with an unconsolidated affiliate pursuant to which Five Rivers has agreed to loan up to $200.0 million in revolving loans to the unconsolidated affiliate. The loans are used by the unconsolidated affiliate to acquire feeder animals which are placed in Five Rivers feed yards for finishing. Borrowings accrue interest at a per annum rate of LIBOR plus 2.25% or base rate plus 1.0% and interest is payable at least quarterly. This credit facility matures October 7, 2011. During the thirteen weeks ended March 29, 2009, average borrowings were approximately $149.0 million and total interest accrued was approximately $1.6 million which was recognized as interest income on the statement of operations.

On January 27, 2009, the Company reached agreement with Smithfield Foods for final settlement of the working capital component of the purchase price pursuant to the Stock Purchase Agreement. The settlement called for a payment of $4.5 million from Smithfield Foods to the Company as full and final settlement of the working capital delivered at October 23, 2008. The Company recorded the settlement as a reduction of purchase price upon receipt.

On February 18, 2009 an agreement was reached with the sellers of National Beef whereby JBS USA Holdings terminated the acquisition process of National Beef effective February 23, 2009. Related litigation with the DOJ was also terminated. As a result of the agreement, JBS USA Holdings, Inc. reimbursed the seller’s shareholders a total $19.9 million in February 2009 as full and final settlement of any and all liabilities related to the potential acquisition.

F-139

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

Intercompany debt with JBS S.A.

On March 2, 2008, JBS S.A. contributed $400 million in additional paid in capital to repay a portion of the $750 million unsecured bank debt. On June 30, 2008, the Company entered into an unsecured loan agreement with JBS S.A. totaling $350 million with a maturity date of June 30, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%.

On April 28, 2008, the Company entered into an unsecured loan agreement with its parent, JBS S.A. for $100 million with a maturity date of April 28, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. The funds received from this loan were used to fund the purchase of Tasman Group.

On May 5, 2008, the Company entered into an unsecured loan agreement with JBS S.A. for $25 million with a maturity date of May 5, 2009. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. The funds received were used to fund operations.

On June 30, 2008, the Company entered into an unsecured loan agreement with JBS S.A. for $25 million with a maturity date of June 10, 2009. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. The funds received were used to fund operations.

On October 20, 2008, the Company entered into an unsecured loan agreement with JBS S.A. for $250 million with a maturity date of October 21, 2011. Interest payments are due semi-annually at a rate of six month LIBOR plus a margin of 3%. The funds received were used in the acquisition of Smithfield Beef Group.

On April 27, 2009, JBS USA Holdings refinanced its five separate intercompany notes with JBS HU Liquidity Management LLC (“JBS HU”), a subsidiary of JBS S.A., which is organized in the country of Hungary, into one note with a stated interest rate of 12% and a 10 year maturity.

On May 6, 2009, the Company entered into an unsecured loan agreement with JBS HU for $6 million with a maturity date of May 6, 2019. Interest payments are due semi-annually at a rate of 12%. The funds received were used to repay a portion of the intercompany loans with JBS S.A.

Revolving credit facilities

On February 26, 2008, Swift Australia entered into an Australian dollar denominated $120 million unsecured credit facility to fund working capital and letter of credit requirements. Under this facility AUD $80 million can be borrowed for cash needs and AUD $40 million is available to fund letters of credit. Borrowings are made at the cash advance rate (BBSY) plus a margin of 0.98%. The credit facility contains certain financial covenants which require the Company to maintain predetermined ratio levels related to interest coverage, debt coverage and tangible net worth. This facility has an evergreen renewal term with review periods each June, commencing in 2009.

On November 5, 2008, JBS USA Holdings entered into a secured revolving loan credit agreement (the “Credit Agreement”) that allows borrowings up to $400.0 million, and terminates on November 5, 2011. Up to $75.0 million of the revolving credit facility is available for the issuance

F-140

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

of letters of credit. Borrowings that are index rate loans will bear interest at the prime rate plus a margin of 2.25% while LIBOR rate loans will bear interest at the applicable LIBOR rate plus a margin of 3.25%. At December 28, 2008, the rates were 5.50% and 4.66%, respectively. Upon approval by the lender, LIBOR rate loans may be taken for one, two, or three month terms, (or six months at the discretion of the Agent).

On April 27, 2009 the Credit Agreement was amended to allow the execution of the senior unsecured note offering of JBS USA, LLC described below. Under the amendment, the existing limitation on distributions between JBS USA, LLC and JBS USA Holdings was amended to allow for the proceeds of the senior unsecured bond offering, less transaction expenses and $100 million retained by JBS USA, LLC to be remitted to JBS USA Holdings as a one time distribution. Also, the unused line fee was increased from 37.5 basis points to 50 basis points.

Debt offering

On April 27, 2009, JBS USA Holdings refinanced its five separate intercompany notes with JBS S.A. through JBS HU into one note with a stated interest rate of 12% and a 10 year maturity with a balance of $133 million at the reporting date.

On April 27, 2009, JBS USA, LLC, a wholly owned subsidiary, entered into a $700 million senior unsecured note offering bearing interest at 11.625% with interest payable semi-annually and a maturity of May 1, 2014. The proceeds net of expenses were $650.8 million and were used to repay $100 million on the Credit Agreement and the balance was used to repay intercompany debt and accrued interest owed to JBS HU.

Other

On October 14, 2008, the Company purchased $1 million in additional bonds from the City of Cactus, Texas (See Note 3).

On October 23, 2008, JBS USA Holdings issued a promissory note to a third party for approximately $173 million the proceeds of which were contributed to JBS USA, LLC. The promissory note bears interest at a rate of three-month LIBOR plus 2.0% per annum and matures on December 30, 2016.

The promissory note also contains events of default, including failure to perform or observe terms, covenants or other agreements in the promissory note, payment defaults on other indebtedness, defaults on other indebtedness if the effect is to permit acceleration, and entry of unsatisfied judgments of orders against JBS USA Holdings and its subsidiaries. If an event of default occurs and is continuing the payee may accelerate the note and declare all amounts due and payables or at the payee’s election, convert amounts owing under the promissory note into voting stock of JBS USA Holdings.

JBS USA Holdings is also party to a raw materials supply agreement with a customer, pursuant to which JBS USA Holdings has agreed that it and its affiliates will sell certain raw materials to such

F-141

JBS USA Holdings, Inc.

A wholly owned subsidiary of JBS S.A.

Notes to consolidated financial statements

customer on an exclusive basis. To the extent that the customer is required to pay a premium under the supply agreement, an amount equal to such premium is required to be paid in respect of the note. Payments are applied toward accrued interest first and then principal. JBS USA to distribute to JBS USA Holdings payments received from this customer in respect of premium pursuant to the agreement to allow JBS USA Holdings to satisfy its obligations due under the promissory note in accordance with its terms. Amounts outstanding under the promissory note are recorded as long term liabilities in the financial statements of JBS USA Holdings and payments or other reductions in obligations are recoded as the realization of deferred revenue.

On December 29, 2008, JBS USA Holdings, Inc., was renamed JBS USA Holdings, LLC and converted from a C Corporation to a Limited Liability Company. As a result of the conversion in legal form, the outstanding share which was 100% owned by JBS USA Holdings, Inc was converted into a single member interest held by JBS USA Holdings, Inc.

Beginning in mid-April 2009 the world press began publicizing the occurrence of regionalized influenza outbreaks which were linked on a preliminary basis to a hybrid avian/swine/human virus. As a result commencing on April 14, 2009 several foreign countries including Russia, Thailand, Ukraine and Mainland China closed their borders to some or all pork produced in the affected states in the USA or other affected regions in the world. The company is not able to assess whether or when the influenza outbreak might lessen or whether or when additional countries might impose restrictions on the importation of pork products from the USA, nor whether or when the existing import bans might be lifted.

F-142

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder

JBS Packerland, Inc.

We have audited the accompanying consolidated balance sheet of Smithfield Beef Group, Inc. (now known as JBS Packerland, Inc.) and subsidiaries as of April 27, 2008, and the related consolidated statements of operations, changes in stockholder’s equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of Five Rivers Ranch Cattle Feeding LLC (a corporation in which the Company has a 50% interest). Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Five Rivers Ranch Cattle Feeding LLC, is based on the report of the other auditors as explained in Note 5.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Smithfield Beef Group, Inc. and subsidiaries at April 27, 2008, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

/s/    ERNST & YOUNG LLP

Milwaukee, WI

March 31, 2009

F-143

Smithfield Beef Group, Inc.

Consolidated balance sheet

April 27, 2008

(dollars in thousands)

Assets
Current assets:
Cash	$        56
Accounts receivable, less allowances of $1,131	110,754
Inventories	234,935
Deferred income taxes	6,233
Prepaid expenses and other current assets	10,314
Total current assets	362,292
Property, plant and equipment, net	143,889
Investment in Five Rivers Ranch Cattle Feeding LLC	157,561
Investment in other joint ventures	1,057
Goodwill	115,921
Intangible assets	4,252
Other assets	6,019
	$790,991
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$  70,051
Accrued payroll and benefits	19,661
Other accrued liabilities	28,642
Current portion of long-term debt due third parties	1,247
Total current liabilities	119,601
Long-term debt due Smithfield Foods, Inc.	503,741
Long-term debt due third parties	736
Deferred income taxes	20,359
Other long-term liabilities	21,316
Commitments and contingencies
Stockholder’s equity:
Class A Common stock, $.01 par value; 15,000 shares authorized, 1,000 shares issued and outstanding	—
Additional paid-in capital	242,640
Accumulated deficit	(115,038	)
Accumulated other comprehensive loss	(2,364	)
Total stockholder’s equity	125,238
	$790,991

See accompanying notes.

F-144

Smithfield Beef Group, Inc.

Consolidated statement of operations

For the year ended April 27, 2008

(Dollars in thousands)

Net sales	$2,909,214
Cost of sales	2,802,848
Gross profit	106,366
Operating costs and expenses:
Selling, general and administrative expenses	61,879
Corporate service fees from Smithfield Foods, Inc.	16,180
Royalty fees to Smithfield Foods, Inc.	4,953
Total operating costs and expenses	83,012
Gain on sale of property, plant and equipment	2,140
Income from operations	25,494
Other income (expense):
Interest income	726
Interest expense:
Smithfield Foods, Inc.	(41,486	)
Third parties	(278	)
Equity in income of Five Rivers Ranch Cattle Feeding LLC	12,853
Equity in income of other joint ventures	147
Loss before income taxes	(2,544	)
Provision for income taxes	536
Net loss	$      (3,080	)

See accompanying notes.

F-145

Smithfield Beef Group, Inc.

Consolidated statement of changes in stockholder’s equity

For the year ended April 27, 2008

(Dollars in thousands)

	Class a common stock		Additional Paid-in capital	Accumulated deficit		Accumulated other comprehensive loss		Total Stockholder’s equity
	Number of shares	Par value
Balance at April 29, 2007	1,000	$—	$242,640	$(111,958	)	$(2,491	)	$128,191
Comprehensive loss
Net loss	—	—	—	(3,080	)	—		(3,080	)
Proportionate loss on derivatives held by Five Rivers Ranch Cattle Feeding LLC	—	—	—	—		127		127
Total comprehensive loss								(2,953	)
Balance at April 27, 2008	1,000	$—	$242,640	$(115,038	)	$(2,364	)	$125,238

See accompanying notes.

F-146

Smithfield Beef Group, Inc.

Consolidated statement of cash flows

For the year ended April 27, 2008

(Dollars in thousands)

Operating activities
Net loss	$(3,080	)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	18,659
Gain on sale of property, plant and equipment	(2,140	)
Equity in income of Five Rivers Ranch Cattle Feeding, LLC	(12,853	)
Equity in income of other joint ventures	(147	)
Deferred income taxes	(303	)
Changes in operating assets and liabilities:
Accounts receivable	(12,875	)
Inventories	99,456
Prepaid expenses and other current assets	(1,423	)
Accounts payable	1,202
Accrued liabilities	(171	)
Other noncurrent assets and liabilities	(7,079	)
Cash provided by operating activities	79,246
Investing activities
Additions to property, plant and equipment	(12,910	)
Proceeds from sale of property, plant and equipment	5,961
Other	42
Cash used in investing activities	(6,907	)
Financing activities
Net payments under debt agreement with Smithfield Foods, Inc.	(76,178	)
Payments on debt due third parties	(1,105	)
Cash used in financing activities	(77,283	)
Decrease in cash	(4,944	)
Cash at beginning of the year	5,000
Cash at the end of the year	$56
Supplemental disclosures of cash flow information
Cash paid for interest to third parties	$269

See accompanying notes.

F-147

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

April 27, 2008

1. Description of the business

Basis of presentation

Smithfield Beef Group, Inc. (the Company or Smithfield Beef Group) now known as JBS Packerland, Inc., processes, prepares, packages and delivers fresh, further-processed and value-added beef products for sale to customers in the United States and international markets from four beef processing facilities. Smithfield Beef Group sells beef products to customers in the foodservice, international, further processor and retail distribution channels. Smithfield Beef Group also produces and sells by-products that are derived from its beef processing operations and variety meats to customers in various industries.

Sale of the company

On October 23, 2008, Smithfield Foods, Inc., (the owner of Smithfield Beef Group prior to this date) completed the sale of Smithfield Beef Group, to a wholly-owned subsidiary of JBS S.A., a company organized and existing under the laws of Brazil, for $565 million, net of postclosing adjustments. The sale included 100% of Five Rivers Ranch Cattle Feeding LLC (Five Rivers), a 50/50 joint venture with Continental Grain Company (CGC).

2. Significant accounting polices

Principles of consolidation

The consolidated financial statements include all wholly-owned subsidiaries. The Company’s investments in Five Rivers, Five Star Cattle Solutions, LLC and Mountain View Rendering Co. LLC are accounted for under the equity method. The Company has a 50% ownership in each of these entities. All intercompany transactions and balances have been eliminated.

The Company’s fiscal year consists of either 52 or 53 weeks, ending on the Sunday nearest April 30^th. The Company’s fiscal year ended April 27, 2008, consisted of 52 weeks.

Employees

Certain hourly employees of the Company’s production facilities are represented by a variety of labor unions, with labor agreements having various expiration dates. The Company has one union contract expiring in fiscal 2009. Union employees represent approximately 42% of the total employees of the Company at April 27, 2008.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

F-148

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Financial instruments

The carrying value of the Company’s financial instruments, including cash, accounts receivable, accounts payable and long-term debt at April 27, 2008, approximates fair value.

Accounts receivable

The Company has a diversified customer base, which includes customers located in foreign countries. The Company controls credit risk related to accounts receivable through credit appraisals, credit limits, letters of credit, and monitoring procedures. The Company evaluates the collectability of its accounts receivable balance based on a general analysis of past due receivables and a specific analysis of certain customers that management believes will be unable to meet their financial obligations due to economic conditions, industry-specific conditions, historical or anticipated performance, and other relevant circumstances. The Company continuously performs credit evaluations and reviews of its customer base. The Company believes this process effectively addresses its exposure to accounts receivable write-offs; however, if circumstances related to changes in the economy, industry, or customer conditions change, the Company may need to subsequently adjust the allowance for doubtful accounts. The Company adheres to normal industry collection terms of net seven days.

Inventories

Inventories consist primarily of product, live cattle, and manufacturing supplies. Product inventories are considered commodities and are valued based on quoted commodity prices, which approximate net realizable value less cost to complete and disposal costs. Product inventories are relieved from inventory utilizing the first-in, first-out method. Live cattle includes the purchase cost of the cattle, direct materials, supplies, and feed. Cattle are reclassified from live cattle to carcass inventory at time of slaughter. Manufacturing supplies are valued at the lower of first-in, first-out cost, average cost or market.

Property, plant and equipment, net

Property, plant and equipment is stated at cost, and is depreciated on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings and improvements	20 – 40 years
Machinery and equipment	5 – 10 years
Automobiles and trucks	3 – 5 years
Furniture and fixtures	5 years
Computer hardware	5 years
Leasehold improvements	Shorter of useful life or the lease term

Depreciation expense is included as either cost of sales or selling, general and administrative expenses, as appropriate, and totaled $17.9 million in fiscal 2008. Repairs and maintenance charges are expensed as incurred and totaled $20.1 million in fiscal 2008. Improvements that

F-149

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

materially extend the life of the asset are capitalized. Gains and losses from dispositions or retirements of property, plant and equipment are recognized in the period they occur. Interest is capitalized on property, plant and equipment during the construction period. There was no interest capitalized in fiscal 2008.

The Company periodically assesses the recoverability of long-lived assets, including property and equipment, in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement requires that all long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying value of such assets to the undiscounted future cash flows expected to be generated by the assets. If the carrying value of an asset exceeds its estimated undiscounted future cash flows, an impairment provision is recognized to the extent that the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or the fair value of the asset, less costs of disposition. Management considers such factors as current results, trends and future prospects, current market value, and other economic and regulatory factors in performing these analyses. The Company determined that no long-lived assets were impaired as of April 27, 2008.

Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. Indefinite-lived intangible assets consist of tradenames.

Goodwill and indefinite-lived intangible assets are tested for impairment annually in the fourth quarter, or sooner if impairment indicators arise in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. The fair value of indefinite-lived intangible assets is estimated based upon discounted future cash flow projections. In reviewing goodwill for impairment, potential impairment is identified by comparing the estimated fair value of a reporting unit to its carrying value. The fair value of a reporting unit is estimated by applying valuation multiples or estimating future discounted cash flows. The selection of multiples is dependent upon assumptions regarding future levels of operating performance as well as business trends, prospects and market and economic conditions. When estimating future discounted cash flows, the Company considers the assumptions that hypothetical marketplace participants would use in estimating future cash flows. In addition, where applicable, an appropriate discount rate is used, based on the Company’s cost of capital or location-specific economic factors. When the fair value is less than the carrying value of the net assets of a reporting unit, including goodwill, an impairment loss may be recognized. The Company has determined that goodwill and indefinite-lived assets were not impaired as of April 27, 2008.

Intangible assets with finite lives consist of patents, which are amortized over their estimated useful life of 15 years. Patents, net of accumulated amortization of $0.5 million, were $1.1 million at April 27, 2008. Patent amortization expense for the fiscal year ended April 27, 2008, totaled $0.1 million and is estimated to be approximately the same amount in each of the subsequent five years.

F-150

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Investments

The Company records its share of earnings and losses from its equity method investments in “Equity in income (loss) of affiliates” in the accompanying consolidated statement of operations. The Company considers whether the fair values of any of the equity-method investments have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary, then a write-down of the investment would be recorded to its estimated fair value. The Company has determined that no write-downs were necessary as of April 27, 2008.

Income taxes

The Company is included in the consolidated U.S. federal income tax return of Smithfield Foods, Inc. A formal tax-sharing agreement between Smithfield Foods, Inc. and the Company does not exist. The benefit for income taxes in the accompanying consolidated statement of operations has been calculated as if a consolidated federal and appropriate state income tax returns had been filed separately by the Company. Deferred income taxes are provided on the differences in the book and tax basis of assets and liabilities at the statutory tax rates expected to be in effect when such temporary differences are expected to reverse. A valuation allowance is provided on the tax benefits otherwise associated with certain tax attributes unless it is considered more likely than not that the benefits will be realized. Smithfield Foods, Inc. pays domestic taxes on behalf of the Company and reflects the funding through an intercompany payable account.

The determination of the provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items. Reserves are established when, despite the Company’s belief that its tax return positions are fully supportable, the Company believes that certain positions may be successfully challenged. When facts and circumstances change, these reserves are adjusted through the provision for income taxes.

In July 2006, the Financial Accounting Standards Board issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), which clarifies the accounting for income taxes by prescribing the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN 48 effective April 30, 2007. The Company accrues interest and penalties related to unrecognized tax benefits as other noncurrent liabilities and recognizes the related expense as income tax expense.

Derivative financial instruments and hedging activities

The Company uses various raw materials, primarily live cattle and corn, which are actively traded on commodity exchanges. The Company hedges these commodities when it determines conditions are appropriate to mitigate these price risks. While such hedging may limit the

F-151

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Company’s ability to participate in gains from favorable commodity fluctuations, it also tends to reduce the risk of loss from adverse changes in raw material prices. The Company attempts to closely match the commodity contract terms with the hedged item.

The Company accounts for derivative financial instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, which requires companies to recognize all of their derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as either a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. Since none of the Company’s derivative instruments were designated as hedges in accordance with SFAS No. 133, the gain or loss related to the change in fair value for each derivative instrument is recognized in operations during the period of change. For the year ended April 27, 2008, the Company recognized a gain of $24.8 million, which is included in cost of sales in the accompanying consolidated statement of operations related to derivative financial instruments. As of April 27, 2008, the fair value of derivative financial instruments was $2.6 million and is included in prepaid expenses and other current assets in the accompanying consolidated balance sheet.

The Company records its proportionate share of the fair value of derivative financial instruments entered into by Five Rivers through other comprehensive loss as these derivative financial instruments are accounted for under hedge accounting.

Self-insurance programs

The Company is self-insured for certain levels of general and vehicle liability, property, workers’ compensation, product recall and healthcare coverage. The cost of these self-insurance programs is accrued based upon estimated settlements for known and anticipated claims. Any resulting adjustments to previously recorded reserves are reflected in operations.

Revenue recognition

The Company recognizes revenues from product sales when title passes upon delivery to its customers. Revenue is recorded at the invoice price for each product, net of estimated returns and sales incentives provided to customers. Sales incentives include various rebate and trade allowance programs with customers, primarily discounts and rebates based on achievement of specified volume or growth in volume levels.

Advertising and promotional costs

Advertising costs are expensed as incurred. Promotional sponsorship costs are expensed as the promotional events occur. Advertising and promotional costs totaled $2.2 million in fiscal 2008.

F-152

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Shipping and handling costs

Shipping and handling costs charged to customers are included in net sales, and the related costs are included in cost of sales.

Segment reporting

The Company operates in one segment: the raising, processing and packaging of beef products for sale to customers in the United States and international markets.

Recent accounting pronouncements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. SFAS No. 161 requires (1) qualitative disclosures about objectives for using derivatives by primary underlying risk exposure; (2) information about the volume of derivative activity; (3) tabular disclosures about the balance sheet location and gross fair value of derivative instruments, and income statement and other comprehensive income location and amounts of gains and losses on derivative instruments by contract type; and (4) disclosures about credit-risk-related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS No. 141R). SFAS No. 141R establishes principles and disclosure requirements on how to recognize, measure and present the assets acquired, the liabilities assumed, any noncontrolling interests in the acquired company, and any goodwill recognized in a business combination. The objective of SFAS No. 141R is to improve the information included in financial reports about the nature and financial effects of business combinations. This statement is effective for business combinations with an acquisition date on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (SFAS No. 160). SFAS No. 160 establishes accounting and reporting standards for a noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. This statement clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity and should be reported as equity in the consolidated financial statements, rather than as a liability or in the mezzanine section between liabilities and equity. SFAS No. 160 also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company’s consolidated financial statements.

F-153

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. It does not require any new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years for financial assets and liabilities, and for fiscal years beginning after November 15, 2008, for nonfinancial assets and liabilities. Management believes the adoption of this pronouncement will not have a material impact on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments, and certain other items, at fair value. SFAS No. 159 applies to reporting periods beginning after November 15, 2007. Management believes the adoption of this pronouncement will not have a material impact on the Company’s consolidated financial statements.

3. Inventories

The components of inventories at April 27, 2008, net of reserves of $1.5 million, are as follows (in thousands):

Live cattle	$146,325
Product inventories:
Fresh and packaged meats	56,010
Carcass inventory	15,238
Manufacturing supplies	14,582
Other	2,780
	$234,935

The sale of the Smithfield Beef Group as discussed in Note 1, excluded substantially all live cattle inventories held by the Company and Five Rivers as of the transaction date. Live cattle owned by Five Rivers on the transaction date were transferred to a new 50/50 joint venture between Smithfield Foods, Inc. and CGC, while live cattle owned by Smithfield Beef Group on the transaction date were transferred to a subsidiary of Smithfield Foods, Inc. The excluded live cattle will be raised by JBS Packerland, Inc. for a negotiated fee and then sold at maturity at market-based prices. Proceeds from the sale of the excluded live cattle will be paid in cash to the Smithfield Foods, Inc./CGC joint venture or to Smithfield Foods, Inc., as appropriate. The live cattle inventories are expected to be sold within six months after the transaction date, with substantially all live cattle sold within 12 months after the transaction date.

F-154

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

4. Property, plant and equipment, net

Property, plant and equipment, net consist of the following at April 27, 2008 (in thousands):

Land	$ 13,946
Buildings and improvements	90,619
Machinery and equipment	127,021
Automobiles and trucks	5,629
Furniture and fixtures	3,581
Computer hardware	2,835
Leasehold improvements	176
Construction in progress	14,032
	257,839
Accumulated depreciation	(113,950	)
	$143,889

On December 21, 2007, the Company sold the land and buildings of its Showcase facility, located in Philadelphia, PA, for approximately $5.2 million. As a result of the sale, the Company recorded a gain of approximately $2.3 million. In addition, the Company paid approximately $5.8 million to exit its equipment lease agreement with a third party and purchase all the leased equipment.

The sale of the Smithfield Beef Group, as discussed in Note 1, excluded certain land and land improvements that totaled $9.2 million at April 27, 2008.

5. Investment in Five Rivers

In fiscal 2006, Smithfield Beef Group and CGC formed Five Rivers, a 50/50 joint venture. Five Rivers is a stand-alone operating company, independent from the Company and CGC, currently headquartered in Greeley, Colorado, with a total of ten feedlots located in Colorado, Idaho, Kansas, Oklahoma and Texas. Five Rivers sells cattle to multiple U.S. beef packing firms using a variety of marketing methods. Five Rivers has a fiscal year ended March 31, 2008, and was audited by other auditors.

For its 50% interest in Five Rivers, the Company has contributed cash of $106.3 million and net assets of $44.7 million. There currently exists a difference between the carrying amount of the Company’s investment in Five Rivers and the Company’s proportionate share of its underlying equity in the net assets of Five Rivers primarily due to the difference in the fair value of cash and net assets contributed by the Company in relation to its ownership interest in Five Rivers.

F-155

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Following is a reconciliation of the investment in Five Rivers and equity in income of Five Rivers as of and for the year ended April 27, 2008, from the report of other auditors to the amounts included in the accompanying financial statements (in thousands):

50% interest in the net assets of Five Rivers at March 31, 2008 (per report of other auditors)	$157,385
Excess of the cost of investment over the amount of underlying equity in net assets of Five Rivers	22,828
50% interest in the loss of Five Rivers for the month ended April 27, 2008	(5,736	)
50% interest in other comprehensive loss of Five Rivers for the month ended April 27, 2008	(16,916	)
Investment in Five Rivers at April 27, 2008	$157,561
Equity in income of Five Rivers for the year ended March 31, 2008 (per report of other auditors)	$  18,729
Less proportionate share of the income of Five Rivers for the month ended April 29, 2007	(140	)
Plus proportionate share of the loss of Five Rivers for the month ended April 27, 2008	(5,736	)
Equity in income of Five Rivers for the year ended April 27, 2008	$  12,853

Five Rivers meets the definition of a significant subsidiary (per Regulation S-X) with respect to the Company. Condensed financial statements for Five Rivers as of March 31, 2008, and for the year ended March 31, 2008, are presented below (in thousands):

Current assets	$   647,245
Noncurrent assets	103,936
Current liabilities	436,242
Noncurrent liabilities	170
Revenues	$1,657,103
Costs and expenses	1,593,731
Operating income	63,372
Net income	37,457

6. Other assets

Other assets consist of the following at April 27, 2008 (in thousands):

Other assets:
Aircraft	$2,065
Deposit	725
Tax benefit related to uncertain tax positions	2,057
Computer software	380
Other noncurrent assets	792
	$6,019

F-156

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Other assets include the Company’s 25% ownership interest in an aircraft and a deposit with the Arizona Department of Water Resources for water rights related to its facility in Tolleson, Arizona. The ownership interest in the aircraft was purchased on December 31, 2004 for $2.6 million and is being depreciated over its useful life of 20 years. Amortization of capitalized computer software was $0.7 million in fiscal 2008.

7. Long-term debt

Long-term debt consists of the following at April 27, 2008 (in thousands):

Long-term debt due Smithfield Foods, Inc.:
Debt due Smithfield Foods, Inc.	$304,316
Term notes due SFFC, Inc.	199,425
	$503,741
Other long-term debt due third parties:
Note payable	$      989
Other	994
	1,983
Less current portion	1,247
	$736

The Company had a lending arrangement with Smithfield Foods, Inc., under which Smithfield Foods, Inc. financed the working capital needs of the Company. Amounts outstanding under the facility bore interest at rates ranging between 4.5% and 7% as of April 27, 2008. The lending agreement did not have a stated maturity date nor did it contain any financial covenants. The debt with Smithfield Foods, Inc. has been classified as long term based on the intent of Smithfield Foods, Inc. for these amounts not to be repaid in the next fiscal year.

On January 1, 2007, the Company entered into a series of term notes with SFFC, Inc. (a wholly owned subsidiary of Smithfield Foods, Inc.) totaling $199.4 million. The term notes bear interest at 7.75% and are due December 31, 2016. The term notes do not contain any financial covenants.

In connection with the purchase of Murco, Inc., now known as JBS Plainwell, Inc., the Company issued a note payable (Note) to the former owner for $13.3 million. Principal and interest payments under the Note are due weekly, decreasing from $30,000 to $20,000 over the life of the Note. As the Note does not bear interest, the Company discounted the estimated future cash flows under the Note and adjusted the carrying value of the Note to $8.2 million at the purchase date, which approximated the fair value of the Note. The effective interest rate on the Note is 10% and the Note matures May 12, 2009.

F-157

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

8. Income taxes

Significant components of the provision for income taxes for the year ended April 27, 2008, are as follows (in thousands):

Current tax expense (benefit):
Federal	$(1,034	)
State	1,873
	839
Deferred tax benefit:
Federal	(273	)
State	(30	)
	(303	)
	$    536

A reconciliation of income tax benefit computed at the federal statutory rate to the provision for income taxes is as follows (in thousands):

Federal income tax benefit at statutory rate	$(890	)
State income taxes, net of federal tax benefit	617
Manufacturer’s production deduction	(274	)
Increase in uncertain tax positions, net	944
Other	139
	$536

F-158

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax reporting purposes. Significant components of the Company’s deferred income tax assets and liabilities as of April 27, 2008, are as follows (in thousands):

Deferred tax assets:
State net operating losses	$  9,486
Accrued liabilities	9,124
Employee benefits	865
Inventories	514
Allowances	924
Valuation allowance	(7,490	)
Total deferred tax assets	13,423
Deferred tax liabilities:
Property, plant and equipment	(19,621	)
Investments	(4,878	)
Intangible assets	(3,050	)
Total deferred tax liabilities	(27,549	)
Net deferred tax liabilities	$(14,126	)

Deferred tax assets and liabilities are recorded in the accompanying consolidated balance sheet as follows:

Current deferred tax assets	$   6,233
Noncurrent deferred tax liabilities	(20,359	)
Total deferred tax assets	$(14,126	)

The Company had state net operating loss carryforwards of $189.7 million at April 27, 2008. A partial valuation allowance has been established against the state net operating loss carryforwards at April 27, 2008, as the Company does not believe it is more likely than not that the carryforward will be utilized in full prior to expiration. State net operating losses generally begin to expire 5 to 20 years after they are generated.

A reconciliation of the beginning and ending liability for uncertain tax positions is as follows (in thousands):

Balance as of April 30, 2007	$5,592
Additions for tax positions taken in the current year	993
Additions for tax positions taken in prior years	125
Settlements with taxing authorities	(2,310	)
Lapse of statute of limitations	(174	)
Balance as of April 27, 2008	$4,226

F-159

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

The Company operates in multiple taxing jurisdictions within the United States, and is subject to audits from various tax authorities. As of April 27, 2008, the liability for uncertain tax positions included $1.5 million of accrued interest and penalties. The Company recognized $0.5 million of interest expense in tax expense during fiscal 2008. As of April 27, 2008, the liability for uncertain tax positions included $3.7 million that, if recognized, would impact the effective tax rate.

9. Other accrued liabilities

Other accrued liabilities consist of the following at April 27, 2008 (in thousands):

Feed	$12,108
Self-insurance reserves	3,000
Utilities	2,898
Freight	2,084
Customer programs	1,120
Litigation-related matters	935
Property taxes	724
Legal and professional fees	483
Other	5,290
	$28,642

10. Retirement plans

The Company sponsors three defined contribution plans, which cover the majority of full-time truck drivers, salaried and office personnel, and certain hourly plant employees under a multiple-employer plan administered by Smithfield Foods, Inc. Contributions under the plans are based on miles driven by certain truck drivers and on a percentage of salary or rate per hour for other personnel. Retirement benefits are based upon the amount allocated to each individual’s separate account and are fully funded. Total expense related to these plans were $1.5 million in fiscal 2008.

F-160

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

11. Commitments

The Company leases tractors, trailers, automobiles, railcars, buildings and equipment under operating lease agreements. Certain of the lease agreements contain renewal or purchase options as well as rental escalation clauses. The lessor assigned its rights under one of the building leases to Smithfield Foods, Inc. concurrent with the sale of Smithfield Beef Group. Future minimum rental payments for leases having initial or remaining noncancelable lease terms in excess of one year are presented below and reflect the assignment of the building lease to Smithfield Foods, Inc. (in thousands):

	Related-party	Third parties	Total
Fiscal Year
2009	$780	$5,571	$6,351
2010	780	4,351	5,131
2011	780	3,946	4,726
2012	780	3,069	3,849
2013	780	2,116	2,896
Thereafter	15,784	10,720	26,504
	$19,684	$29,773	$49,457

Total rental expense for operating leases was $10.2 million in fiscal 2008.

As of April 27, 2008, the Company had capital expenditure commitments of approximately $6.6 million. The Company also has purchase commitments with certain cattle producers that obligate the Company to purchase all of the cattle that these producers deliver. The Company has entered into commodity forward contracts that obligate the Company to purchase a fixed amount of cattle at fixed prices. As of April 27, 2008, the Company had $490.3 million of commodity forward contracts for the purchase of live cattle. As of April 27, 2008, the Company was also committed to purchase approximately $3.0 million of fixed forward corn contracts. The Company believes the risk of default or nonperformance on contracts with counterparties is not significant.

12. Related-party transactions

The Company has a trademark and license agreement with SF Investments, Inc. (a wholly owned subsidiary of Smithfield Foods, Inc.) for the right to use certain trademarks of Smithfield Foods, Inc. in connection with the sale of certain food products. The Company made royalty payments of $5.0 million during fiscal 2008 related to this agreement.

Through an informal agreement with its parent, Smithfield Foods, Inc., the Company was provided certain administrative services by Smithfield Foods, Inc. During fiscal 2008, the Company was charged $16.2 million under this arrangement.

F-161

Smithfield Beef Group, Inc.

Notes to consolidated financial statements

13. Regulations and litigation

The Company is subject to various laws and regulations administered by federal, state and other government entities, including the Environmental Protection Agency (EPA) and corresponding state agencies, as well as the United States Department of Agriculture, the United States Food and Drug Administration, the United States Occupational Safety and Health Administration and similar agencies in foreign countries. The Company believes that it is in compliance with these laws and regulations in all material respects and that continued compliance with these laws and regulations will not have a material adverse effect on its financial position or results of operations or cash flows.

In February 2003, the EPA promulgated regulations under the Clean Water Act governing confined animal feeding operations (CAFOs). Among other things, these regulations impose obligations on CAFOs to manage animal waste in ways intended to reduce the impact on water quality. These new regulations were challenged in federal court by both industry and environmental groups. Although a 2005 decision by the court invalidated several provisions of the regulations, they remain largely intact.

From time to time and in the ordinary course of its business, the Company is named as a defendant in legal proceedings related to various issues, including worker’s compensation claims, tort claims and contractual disputes. While the resolution of such matters may have an impact on the Company’s financial results for the period in which they are resolved, the Company believes that the ultimate disposition of these matters will not, individually or in the aggregate, have a material adverse effect upon its business or consolidated financial statements.

F-162

Report of independent registered public accounting firm

To the Board of Managers and Members of

Five Rivers Ranch Cattle Feeding LLC

Loveland, Colorado

We have audited the accompanying balance sheet of Five Rivers Ranch Cattle Feeding LLC (the “Company”) as of March 31, 2008, and the related statements of operations, members’ equity and comprehensive income (loss), and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2008, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Denver, Colorado

May 30, 2008

F-163

Five Rivers Ranch Cattle Feeding LLC

Balance sheet

as of March 31, 2008

(in thousands)

	2008
Assets
CURRENT ASSETS:
Cash and cash equivalents	$           3
Receivables	13,667
Receivables—affiliates	3,152
Inventory	600,161
Advance deposits on cattle	1,567
Derivative asset	27,792
Prepaid expenses and other current assets	903
Total current assets	647,245
PROPERTY, PLANT, AND EQUIPMENT:
Land and land improvements	65,581
Buildings	8,898
Machinery, equipment, and fixtures	33,347
Capitalized software	636
Construction-in-progress	2,009
Total property, plant, and equipment	110,471
Less accumulated depreciation	22,132
Net property, plant, and equipment	88,339
INTANGIBLE ASSETS	12,144
OTHER ASSETS	3,453
TOTAL	$751,181
Liabilities and Members’ Equity
CURRENT LIABILITIES:
Cash overdraft	$  11,171
Borrowings on margin accounts	10,012
Accounts payable	9,156
Accrued liabilities	5,197
Derivative liability	5,406
Revolving line of credit	395,300
Total current liabilities	436,242
Deferred compensation	170
Total liabilities	436,412
COMMITMENTS AND CONTINGENCIES (Note 7)
MEMBERS’ EQUITY:
Members’ equity paid-in capital	274,416
Accumulated other comprehensive income	29,104
Retained earnings	11,249
Total members’ equity	314,769
TOTAL	$751,181

See notes to financial statements.

F-164

Five Rivers Ranch Cattle Feeding LLC

Statement of operations

for the year ended March 31, 2008

(in thousands)

	2008
REVENUES:
Live cattle sales	$1,537,178
Feedlot sales	95,057
Other	24,868
Total revenues	1,657,103
COST AND EXPENSES:
Cost of sales	1,578,635
General and administrative expenses	15,179
Gain on disposal of assets	(83	)
Total cost and expenses	1,593,731
OPERATING INCOME	63,372
OTHER (INCOME) EXPENSE:
Interest expense and other financing costs	28,893
Interest and investment income	(1,095	)
Loss on involuntary conversion of assets	109
Other income	(190	)
Gain on settlement	(1,802	)
Total other expense—net	25,915
NET INCOME	$     37,457

See notes to financial statements.

F-165

Five Rivers Ranch Cattle Feeding LLC

Statement of members’ equity and comprehensive income (loss)

for the year ended March 31, 2008

(In thousands)

	Members’ Equity, Paid-In Capital	Comprehensive Income	Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total
BALANCE—April 1, 2007	$274,416		$(26,208	)	$(8,634	)	$239,574
Comprehensive income:
Net income		$37,457	37,457				37,457
Other comprehensive income:
Net gain on cash flow hedges		29,104
Reclassification adjustment for losses included in net income		8,634
Other comprehensive income		37,738			37,738		37,738
Comprehensive income		$75,195
BALANCE—March 31, 2008	$274,416		$11,249		$29,104		$314,769

See notes to financial statements.

F-166

Five Rivers Ranch Cattle Feeding LLC

Statement of cash flows

For the year ended March 31, 2008

(in thousands)

	2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$37,457
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	9,637
Gain on disposal of assets	(83	)
Loss on involuntary conversion of assets	109
Gain on involuntary conversion of assets	(1,200	)
Equity in earnings of investee	(267	)
Dividends received from investee	375
Changes in operating assets and liabilities:
Cash overdraft	(3,192	)
Inventory	(96,054	)
Derivative instruments	2,105
Receivables	(1,307	)
Prepaid expenses and other assets	19,973
Accounts payable, accrued liabilities, and deferred liabilities	793
Net cash used in operating activities	(31,654	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of assets	139
Insurance proceeds related to fixed assets	1,200
Investment in unaffiliated company	(500	)
Additions to property, plant, and equipment	(13,883	)
Net cash used in investing activities	(13,044	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in revolving line of credit	34,700
Equity contributions by Members
Net increase in borrowings on margin accounts with brokers	10,012
Other	(17	)
Net cash provided by financing activities	44,695
NET DECREASE IN CASH AND CASH EQUIVALENTS	(3	)
CASH AND CASH EQUIVALENTS—Beginning of period	6
CASH AND CASH EQUIVALENTS—End of period	$         3
Cash paid during the period for interest	$28,103

See notes to financial statements.

F-167

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

As of and for the year ended March 31, 2008

1. Nature of business

Business and Basis of Presentation—Five Rivers Ranch Cattle Feeding LLC (the “Company”) is a limited liability company organized on May 20, 2005, in the state of Delaware. Prior to May 20, 2005, the assets and liabilities of the Company were owned by ContiBeef LLC (“ContiBeef”), a wholly owned subsidiary of Continental Grain Company (“CGC”), and MF Cattle Feeding, Inc. (“MF”). ContiBeef is a wholly-owned subsidiary of Continental Grain Company, and MF is a wholly-owned subsidiary of Cattle Production Systems, Inc. (“CPS”), whose parent company is Smithfield Beef Group, Inc. (“Smithfield Beef”), which is a wholly-owned subsidiary of Smithfield Foods, Inc. On May 20, 2005, the operating assets and certain liabilities of ContiBeef and MF were transferred to the Company at net book value in exchange for equity interests in the Company. The Company is a 50/50 joint venture between ContiBeef and MF (the “Members”). The Members exercise joint control over the Company.

The Company is engaged in the raising of feeder cattle for the Company and for outside customers, and the sale of live cattle to meat packing companies (“packers”). The Company’s sales and cost of sales are significantly affected by market price fluctuations of its principal products sold and of its principal commodity inputs—feeder cattle and corn. Feedlot operations are located in Idaho, Texas, Colorado, Kansas, and Oklahoma.

The Company owns a 50% interest in Northern Colorado Feed, LLC, which is an unconsolidated subsidiary accounted for under the equity method. The contributed investment to Five Rivers was approximately $1 million, which is recorded within Other Assets in the balance sheets. The Company’s share of earnings in the investment for the year ended March 31, 2008 was approximately $267,000 and is recorded in interest and investment income in the statement of operations. During the year ended March 31, 2008, the Company received dividends of approximately $375,000.

During 2008 the Company began a strategic alliance with Southfork Solutions, Inc. (“Southfork”) which included the purchase of 500,000 shares of Southfork stock through a private placement. Southfork is in the process of developing animal identification technology in which Five Rivers’ locations are serving as test sites. This investment is accounted for under the cost method and carried a balance of $500,000 as of March 31, 2008 and is recorded within Other Assets in the balance sheet.

On March 5, 2008, Smithfield Foods, Inc. announced that it signed a definitive agreement to sell Smithfield Beef Group, Inc., including 100% of the ownership of Five Rivers, to JBS S.A. (“JBS”) Smithfield Foods and CGC entered into an agreement providing that, immediately before the closing of the JBS transaction, Smithfield Beef will acquire from CGC the 50% of Five Rivers that it does not presently own in return for 2.167 million shares of Smithfield common stock. Live cattle currently owned by Five Rivers will be transferred to a new 50/50 joint venture between Smithfield Foods and CGC. The excluded live cattle will be raised by JBS after closing for a negotiated fee and then sold at maturity at market-based prices. Proceeds from the sale of the excluded live cattle will be paid in cash to the Smithfield Foods/CGC joint venture.

F-168

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

2. Significant accounting policies

Revenue Recognition—The Company sells live cattle to packers located primarily in Colorado, Idaho, Nebraska, Kansas and Texas. Revenue is recognized when live cattle are shipped to customers, based on terms as set forth by The Packers and Stockyards Act of 1921. The Company records transactions based on lot by lot accounting, recognizing revenue as cattle are shipped or on delivery depending on the terms of the sale, and will adjust revenues to reflect the results of the grading process as reported to the Company by the packer. Risk of loss transfers to the packer upon shipment, unless the Company has hired the transporter for shipment, in which case risk of loss transfers at delivery. Hotel revenue charged to customers for cattle feeding and care is recognized on a daily basis and is recorded in feedlot sales in the statement of operations. Animal feed supplement sold to third parties is recognized when the product is delivered and is recorded in feedlot sales in the statement of operations.

Derivative Instruments—The Company enters into futures and option contracts for the purpose of hedging exposures to changes in commodity prices, primarily live cattle, feeder cattle, and corn. These contracts are accounted for as derivatives in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. This statement requires the Company to record all derivatives on the balance sheet. The Company has reflected derivatives at fair value. Derivatives that are not accounted for as hedges must be adjusted to fair value through current earnings. For derivatives designated as cash flow hedges and used to hedge an anticipated transaction, changes in the fair value of the derivatives are deferred in the balance sheet in accumulated other comprehensive income (loss) to the extent the hedge is effective in mitigating the exposure to the related anticipated transaction. Any ineffectiveness associated with the hedge, along with gains and losses on derivatives not designated as hedges, are recognized immediately in the statement of operations within other revenues. Amounts deferred within accumulated other comprehensive income (loss) are recognized in the statement of operations within cost of sales upon the completion of the related hedged transaction.

Cash and Cash Equivalents—Cash equivalents are composed of all highly liquid investments with original maturities of three months or less. Book overdrafts are reclassified to current liabilities.

Margin Accounts—The Company maintains margin deposits with brokers as collateral on open positions in derivative instruments. These deposits are not included in the balance of cash and cash equivalents as the balances, when positive, are not able to be withdrawn by the Company at any time. When the Company’s derivative positions are in an asset position the Company is allowed to borrow against the margin accounts. As of March 31, 2008 the Company had net borrowings on margin accounts with brokers.

Inventories—Live cattle inventories and inventories of feed, silage, processing supplies, and medication are stated at the lower of cost (first-in, first-out) or market.

Property, Plant, and Equipment—Property, plant, and equipment are stated at cost. Depreciation of property, plant, and equipment is provided by the straight-line method over the estimated useful lives of 25 years for farm buildings, 10 to 30 years for land improvements and buildings,

F-169

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

and 2 to 12 years for machinery, equipment, furniture, and purchased software. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation expense for the year ended March 31, 2008 was $8.7 million.

Intangible Assets—The Company has recorded intangible assets in the form of water rights with indefinite lives at the Kuner and Gilcrest feedlots which were contributed to the Company by MF. This intangible asset is recorded at its carryover basis of $12.1 million. The Company’s annual impairment testing date coincides with its fiscal year-end. If an assessment indicates impairment, the impaired asset is written down to its fair value based on the best information available in accordance with SFAS 142, Goodwill and Other Intangible Assets. There were no impairments recorded for the year ended March 31, 2008.

Debt Issuance Costs—Debt issuance costs of $4.5 million are capitalized and are being amortized over the terms of the related loan agreements using the straight-line method. Accumulated amortization of the debt issuance costs was approximately $2.7 million at March 31, 2008.

Impairment of Long-Lived Assets—The Company continually evaluates the carrying value of its long-lived assets for events or changes in circumstances which may indicate that the carrying value may not be recoverable in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Income Taxes—The Company is treated as a flow-through entity for income tax purposes and, therefore, the Company’s taxable income is included in the Members’ respective consolidated U.S. federal income tax returns. The Company is not allocated any current or deferred U.S. federal income expense (benefit) arising from the Company’s operations included in the Members’ results.

Self-Insurance Accruals—The Company is self-insured for expected losses under its workers compensation and automobile liability programs. Reserves recorded for workers compensation and automobile liability claims were $1,038,000 at March 31, 2008 based upon estimates of the ultimate costs to settle incurred claims, both reported and unreported.

Accounting Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements—In September, 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. In developing this standard, the FASB considered the need for increased consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an

F-170

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

orderly transaction between market participants at the measurement date (exit price.) The emphasis on fair value is that it is a market-based measurement, and the statement clarifies that market participant assumptions include assumptions about risk, therefore, a measurement that does not include an adjustment for risk would not represent a fair value measurement if market participants would include one in pricing the related asset or liability. The guidance in this statement applies to derivatives and other financial instruments measured at fair value under Statement 133 at initial recognition and in all subsequent periods. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157, issued in February 2008, defers the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities measured at fair value, except those that are recognized or disclosed at fair value in the financial statements on a regular basis. The Company is currently evaluating the effect that these Statements will have on the Company’s financial statements.

In February 2007 the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value with the associated unrealized gain/loss in earnings. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related financial assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The Company is currently evaluating the effect that this Statement will have on the Company’s financial statements.

In March 2008, the FASB issued Statement No. 161, Disclosure about Derivative Instruments and Hedging Activities—an amendment to FASB Statement No. 133 (“SFAS 161”). The adoption of SFAS 161 is not expected to have an impact on the Company’s consolidated financial statements, other than additional disclosures. SFAS 161 expands annual disclosures about derivative and hedging activities that are intended to better convey the purpose of derivative use and the risks managed. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008.

In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51 (“SFAS 160”). As the Company owns 100% of its consolidated subsidiaries and it does not currently have any minority interests, the Company does not expect the adoption of SFAS 160 to have an impact on its consolidated financial statements. This statement amends ARB No. 51 and intends to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards of the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008.

In December 2007, the FASB issued Statement No. 141R, Business Combinations (“SFAS 141R”). SFAS 141R may have an impact on the Company’s consolidated financial statements when

F-171

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

effective, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions the Company consummates after the effective date. SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in business combinations and determines what information to disclose to enable users of the financial statement to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008.

In June 2006, the FASB issued FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 requires the evaluation of tax positions taken by the Company to determine whether it is “more-likely-than-not” that those tax positions will be ultimately sustained. A tax liability and expense must be recorded in respect of any tax position that, in Management’s judgment, will not be fully realized. In February 2008 the FASB issued FASB Staff Position No. FIN 48-2 which deferred the effective date for certain non-public enterprises to fiscal years beginning after December 31, 2007. The Company has evaluated the implications of FIN 48 and does not currently anticipate any impact to the Company’s financial statements. The Company will continue to monitor the Company’s tax positions prospectively for potential future impacts

3. Receivables

Receivables at March 31, 2008 were as follows (in thousands):

	2008
Trade	$13,584
Affiliates	3,152
Employee advances	82
Other	1
Total receivables	$16,819

4. Inventory

Inventory balances at March 31, 2008 were as follows (in thousands):

	2008
Livestock	$574,082
Silage	13,657
Feed	10,356
Medication and other	2,066
Total inventory	$600,161

F-172

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

5. Accrued liabilities

Accrued liabilities at March 31, 2008 were as follows (in thousands):

	2008
Employee compensation, bonus, and benefits	$2,820
Reserve for workers compensation and automobile liability insurance	1,038
Interest	286
Other	1,053
Total	$5,197

6. Debt

On May 20, 2005, the Company entered into a $550 million revolving credit agreement (the “facility”) with a maturity date of May 20, 2010. During April 2006, the line of credit was reduced by $25 million as provided for in the credit agreement. At March 31, 2008, the Company was utilizing $395.3 million of the facility, and had an outstanding letter of credit of $1.5 million leaving $128.2 million in unused line of credit with $116.8 million available to be borrowed by the Company according to the terms of the credit agreement. Borrowings under the facility bear interest at variable rates based on LIBOR (4.45% at March 31, 2008). The Company’s policy is to pay down the outstanding principal balance of the line of credit and to borrow additional amounts to finance working capital requirements. Accordingly, the Company classifies the debt as a current liability in the balance sheet. The credit agreement is collateralized by certain fixed assets, accounts receivable and inventories of the Company. Among other requirements, the Facility requires the Company to maintain certain financial ratios, minimum levels of net worth, and establish limitations on certain types of payments, including dividends, investments, and capital expenditures. The Company is in compliance with all covenants.

7. Commitments and contingencies

Operating Leases—The Company utilizes buildings and equipment which are leased under operating lease agreements, extending through March 2013. The following is a schedule of the future minimum obligations under the operating leases that have initial or remaining non-cancelable lease terms in excess of one year at March 31, 2008 (in thousands):

Years Ending March 31
2009	$   325
2010	261
2011	211
2012	211
2013	189
Thereafter	142
Total	$1,339

F-173

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

Rent expense under all operating leases was approximately $1.4 million for the year ended March 31, 2008. The initial term of the Loveland office lease is seven years with one five-year extension. There is also a separate lease for 2,254 square feet of adjoining office space that is currently being occupied by Five Star Cattle Systems, a MF subsidiary. The lease allows for 3% annual escalations, and includes the tenant’s pro rata share of operating expenses.

Legal Matters—As of March 31, 2008 there were no pending legal matters against the Company, however, the Company is a party to a proceeding currently pending with the Colorado Ground Water Commission (“GWC”) in which Pioneer Irrigation District and others have requested a modification of the boundaries of a designated ground water basin in which the Yuma feedyard of the Company is located. This case is scheduled for a three-week hearing in front of the GWC’s hearing office beginning on June 2, 2008. If the petitioners fully prevail the Company would be required to supply water to the North Fork to replace the withdrawals of ground water from wells serving the Yuma feedyard, or cease withdrawals from those wells. Replacement water would have to be secured. It is not possible to estimate the amount of potential loss at this time.

Loss on Involuntary Conversion of Assets—During February 2008, the Company wrote off a loader that was destroyed by fire at the Grant County Feedyard. An involuntary conversion loss of approximately $109,000 was recognized.

During March 2007, the Company wrote off a retention pond after routine inspections revealed active seeps on three of the four embankments. A loss of approximately $434,000 was recognized and the engineering firm and all parties relevant to the construction of the pond were notified that we intend to build a new pond and hold them responsible for the costs. On April 22, 2008, the Company filed a complaint in the United States District Court for the District of Kansas against KLA Environmental Services, Inc. and Stoppel Dirt, Inc. seeking damages.

8. Related party transactions

On May 20, 2005, the Company entered into the Conti Services Agreement whereby the Company would be provided certain services by ContiGroup Companies, Inc. for $1 million annually. Expenses for the year ended March 31, 2008 were $450,000. The Company also feeds cattle for CPS. At March 31, 2008 approximately 37,000 head were on feed for CPS. There was an outstanding receivable due the Company from CPS of $2.9 million at March 31, 2008, and revenue recognized during the year ended March 31, 2008 was $59.3 million. The Company permits employees and their relatives to enter into feeding agreements at the individual feedyards, with the consent of the feedyard General Managers and with Executive Management approval. For the year ended March 31, 2008 this activity totaled $1.5 million.

9. Significant customers

Outside customers accounted for approximately 10% of the total cattle on feed at the Company’s feedyards, at March 31, 2008. CPS was the largest single customer accounting for the majority of customer cattle on feed at March 31, 2008. Company cattle are committed under marketing

F-174

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

agreements to Swift and Company, Cargill Meat Solutions Corporation, and National Beef. During the year ended March 31, 2008, approximately 54% of company cattle were sold to Swift, 14% to Cargill, and 32% to National Beef.

10. Employee benefit plans

Defined Contribution Plans—Effective April 2006, the Company sponsored a defined contribution plan (401(k) Plan), administered by Vanguard. All employees may participate by contributing a portion of their annual earnings to the plan. The Company’s contributions are based on each participant’s level of contribution and cannot exceed the maximum allowable for tax purposes. Total contributions were approximately $571,000 for the year ended March 31, 2008.

Deferred Compensation Plans—The Company granted certain key members of Five Rivers’ management team participation in the Five Rivers Long-Term Incentive Plans, which covers the three years ending March 31, 2008, 2009 and 2010 (the 2008 Plan) and the three years ending March 31, 2007, 2008 and 2009 (the 2007 Plan). The performance measure for the plan is return on net assets (RONA), with a hurdle rate of 9% RONA and a target rate of 12.0% RONA. There is no cap for the bonus pool, but vesting occurs at a rate of 33.3% at the end of each fiscal year. The targets were not met for the 2007 plan, but the 2008 target was met, and there is an accrual of approximately $170,000 in long-term liabilities for this plan.

11. Derivative instruments and hedging activity

The Company is exposed to market risk, such as changes in commodity prices for its main raw materials—feeder cattle and corn, and its finished product—live cattle. The Company’s exposure to commodity price risk relates to raw material and finished product price fluctuations caused by supply conditions, weather, economic conditions, and other factors. To manage volatility associated with these exposures, the Company may enter into derivative transactions pursuant to established Company policies. Generally, the Company utilizes commodity futures and option contracts to reduce the volatility of commodity input prices on corn and feeder cattle and commodity prices on live cattle. Options are used to economically hedge a portion of the market risk, even though the Company has elected not to designate these positions as accounting hedges. The Company enters into futures and options transactions with established brokers.

The Company considers its use of derivative instruments to be an economic hedge against changing prices. At March 31, 2008 all open derivative contracts were recorded at fair value in accordance with SFAS No. 133. These contracts are recorded within current assets when the unrealized value is a gain and within current liabilities when the unrealized value is a loss. The Company designates contracts for the future purchase or sale of certain commodities as normal purchase normal sales and thus these contracts are not marked-to-market. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. The Company links all hedges to forecasted transactions and assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items, both at the inception of the hedge and on an ongoing basis.

F-175

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

Trading Activities—During 2008 the Company had the following derivative activities, which while economic hedges, were not accounted for as hedges and whose gains or losses are reflected in “Other revenues” on the Statement of Operations:

• Corn Purchases—As of March 31, 2008 the Company had open derivative contracts on 3.605 million bushels of corn to hedge or unwind pricing on future purchases at various feedyards. At March 31, 2008 these positions had a net unrealized loss of approximately $195,000. During the year ended March 31, 2008, the Company recorded $1.6 million in realized gains on these positions.

• Feeder Cattle Purchases—As of March 31, 2008 the Company had open derivative contracts on 8.5 million pounds of feeder cattle to hedge purchases at various feedyards. At March 31, 2008 these positions carried an unrealized net gain of $168,000. During the year ended March 31, 2008 realized losses were approximately $295,000.

• Live Cattle Sales—As of March 31, 2008 the Company had open derivative contracts on 230.92 million pounds of live cattle to hedge future sales at various feedyards. At March 31, 2008 these positions had net unrealized losses of approximately $4.8 million. During the year ended March 31, 2008, the Company recorded $14.9 million in realized gains on these positions.

• Natural Gas Purchases—During the year ended March 31, 2008 there were no hedging activities relating to natural gas.

• Soybean Meal Purchases—As of March 31, 2008 the Company had no open derivative contracts on soybean meal. Realized gains and losses during 2008 were immaterial.

Hedging Activities—During the year ended March 31, 2008 the Company had the following derivatives which were appropriately designated and accounted for as hedges:

• Feeder Cattle Purchases—As of March 31, 2008, the Company had no open derivative contracts of feeder cattle. During the year ended March 31, 2008, the Company realized $1.9 million in losses on feeder cattle hedges. Of this, $2.0 million of losses have been recorded in cost of sales, and approximately $95,000 of gains have been recorded in other revenues due to ineffectiveness on these hedges.

• Live Cattle Sales—As of March 31, 2008, the Company had open derivative contracts on 542.5 million pounds of live cattle to hedge future sales at various feedyards which are being accounted for as a cash flow hedge. These positions had an unrealized gain of $27.2 million which was recorded in AOCI. During the year ended March 31, 2008, the Company realized $37.4 million in gains on live cattle hedges. Of this, $1.9 million of gains are deferred in AOCI at year end, $29.1 million of gains have been recorded in cost of sales, and $6.4 million of gains have been recorded in other revenues due to ineffectiveness on these hedges.

At March 31, 2008 there was $29.1 million recorded within accumulated other comprehensive income for deferred hedging gains to be recognized in fiscal year 2009. These gains will be

F-176

Five Rivers Ranch Cattle Feeding LLC

Notes to financial statements

recorded as either effective or ineffective hedges as live cattle are marketed. The maximum length of time that the Company hedges its exposure to the variability in future cash flows is approximately 12 months.

12. Fair value of financial instruments

The fair value of the Company’s debt approximates market value as its line of credit bears interest at floating market rates based on LIBOR. Open derivative contracts are marked to market on a daily basis and are recorded in the balance sheet. For cash and cash equivalents, trade receivables, and accounts payable, the carrying amount is a reasonable estimate of fair value due to their term to maturity.

13. Gilcrest fire

On February 9, 2006, a fire occurred in the generator room which connects to the Motor Control Center for the Gilcrest Feedlot feed mill, which the Company has accounted for as an involuntary conversion. At March 31, 2007, approximately $1.2 million had been spent to replace and repair the capital assets destroyed by the fire, and the Company had received $500,000 in insurance proceeds. It is expected that the cost of all property damage will be recovered, less the $100,000 deductible. During 2007, an additional $1.0 million was spent for cleanup and to return the mill to operating capacity, including the costs of generator rental, fuel, installing new wiring, and hauling feed from the Kuner Feedlot. During 2008 the Company received a final settlement of $2.0 million in insurance proceeds.

* * * * * *

F-177

Smithfield Beef Group, Inc.

Condensed consolidated balance sheet

(Unaudited)

July 27, 2008

(dollars in thousands)

Assets
Current assets:
Cash	$         99
Accounts receivable, less allowances of $2,139	117,836
Inventories	202,412
Deferred income taxes	6,233
Prepaid expenses and other current assets	10,079
Total current assets	336,659
Property, plant, and equipment, net	142,889
Investment in Five Rivers Ranch Cattle Feeding LLC	155,469
Investment in other joint ventures	1,186
Goodwill	115,921
Intangible assets	4,227
Other assets	5,948
	$762,299
Liabilities and stockholder’s equity
Current liabilities:
Accounts payable	$63,172
Accrued payroll and benefits	20,390
Other accrued liabilities	41,986
Current portion of long-term debt due third parties	1,009
Total current liabilities	126,557
Long-term debt due Smithfield Foods, Inc.	456,649
Long-term debt due third parties	734
Deferred income taxes	20,359
Other long-term liabilities	21,198
Commitments and contingencies
Stockholder’s equity:
Class A Common stock, $.01 par value, 15,000 shares authorized, 1,000 shares issued and outstanding	—
Additional paid-in capital	242,640
Accumulated deficit	(103,800	)
Accumulated other comprehensive loss	(2,038	)
Total stockholder’s equity	136,802
	$762,299

See accompanying notes.

F-178

Smithfield Beef Group, Inc.

Condensed consolidated statements of operations

(unaudited)

July 27, 2008

(dollars in thousands)

	Quarter ended
	July 27, 2008		July 29, 2007
Net sales	$819,717		$754,733
Cost of sales	763,734		735,259
Gross profit	55,983		19,474
Operating costs and expenses:
Selling, general and administrative expenses	20,165		15,387
Corporate service fees from Smithfield Foods, Inc.	4,531		3,111
Royalty fees to Smithfield Foods, Inc.	1,639		1,269
Total operating cost and expenses	26,335		19,767
Income (loss) from operations	29,648		(293	)
Other income (expense):
Interest income	89		206
Interest expense:
Smithfield Foods, Inc.	(9,784	)	(10,408	)
Third parties	(88	)	(206	)
Equity in income (loss) of Five Rivers Ranch Cattle Feeding LLC	(2,417	)	5,031
Equity in income of other joint ventures	130		396
Income (loss) before income taxes	17,578		(5,274	)
Provision (benefit) for income taxes	6,340		(1,970	)
Net income (loss)	$11,238		$(3,304	)

See accompanying notes.

F-179

Smithfield Beef Group, Inc.

Condensed consolidated statements of cash flows

(unaudited)

July 27, 2008

(dollars in thousands)

	Quarter ended
	July 27, 2008			July 29, 2007
Operating activities
Net income (loss)	$	11,238		$	(3,304	)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		4,578			4,536
Gain on sale of equipment		—			(4	)
Equity in (income) loss of Five Rivers Ranch Cattle Feeding, LLC		2,417			(5,031	)
Equity in income of other joint ventures		(130	)		(396	)
Changes in operating assets and liabilities:
Accounts receivable		(7,082	)		(11,773	)
Inventories		32,523			49,113
Prepaid expenses and other current assets		235			1,650
Accounts payable		(6,879	)		(8,063	)
Accrued liabilities		14,073			10,881
Other noncurrent assets and liabilities		(203	)		40
Cash provided by operating activities		50,770			37,649
Investing activities
Additions to property, plant and equipment		(3,601	)		(2,992	)
Proceeds from sale of property, plant and equipment		—			90
Other		206			13
Cash used in investing activities		(3,395	)		(2,889	)
Financing activities
Net payments under debt agreement with Smithfield Foods, Inc.		(47,092	)		(36,231	)
Payments on debt due third parties		(240	)		(215	)
Cash used in financing activities		(47,332	)		(36,446	)
Increase (decrease) in cash		43			(1,686	)
Cash at beginning of period		56			5,000
Cash at end of period	$	99		$	3,314
Supplemental disclosures of cash flow information
Cash paid for interest to third parties	$	46		$	70

See accompanying notes.

F-180

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

(Unaudited)

July 27, 2008

1. Description of the business

Basis of presentation

Smithfield Beef Group, Inc. (the Company or Smithfield Beef Group) now known as JBS Packerland, Inc., processes, prepares, packages and delivers fresh, further-processed and value-added beef products for sale to customers in the United States and international markets from four beef processing facilities. Smithfield Beef Group sells beef products to customers in the foodservice, international, further processor and retail distribution channels. Smithfield Beef Group also produces and sells by-products that are derived from its beef processing operations and variety meats to customers in various industries.

Sale of the company

On October 23, 2008, Smithfield Foods, Inc., (the owner of Smithfield Beef Group prior to this date) completed the sale of Smithfield Beef Group, to a wholly-owned subsidiary of JBS S.A., a company organized and existing under the laws of Brazil, for $565 million, net of postclosing adjustments. The sale included 100% of Five Rivers Ranch Cattle Feeding LLC (Five Rivers), a 50/50 joint venture with Continental Grain Company (CGC).

The unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulation, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results of operations for the interim periods. It is suggested that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements of the Company, including the notes thereto for the year ended April 27, 2008, included elsewhere in this filing. The Company’s financial information included herein is not necessarily indicative of the financial position, results of operations and cash flows of the Company that may be expected in the future.

Principles of consolidation

The condensed consolidated financial statements include all wholly-owned subsidiaries. The Company’s investments in Five Rivers, Five Star Cattle Solutions, LLC and Mountain View Rendering Co. LLC are accounted for under the equity method. The Company has a 50% ownership in each of these entities. All intercompany transactions and balances have been eliminated.

F-181

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

The Company’s fiscal year consists of 52 or 53 weeks, ending on the Sunday nearest April 30th. The quarters ended July 27, 2008 and July 29, 2007, each consisted of 13 weeks.

2. Other comprehensive loss

Other comprehensive loss includes the net income or loss of the Company plus the Company’s proportionate share of the fair value of derivative financial instruments entered into by Five Rivers, which are accounted for under hedge accounting. Other comprehensive income (loss) totaled $11.6 million and $(10.6) million for the quarters ended at July 27, 2008 and July 29, 2007, respectively.

3. Inventories

The components of inventories at July 27, 2008, net of reserves of $1.4 million, are as follows (in thousands):

Live cattle	$106,751
Product inventories:
Fresh and packaged meats	62,935
Carcass inventory	14,679
Manufacturing supplies	14,728
Other	3,319
	$202,412

The sale of the Smithfield Beef Group as discussed in Note 1, excluded substantially all live cattle inventories held by the Company and Five Rivers as of the transaction date. Live cattle owned by Five Rivers on the transaction date were transferred to a new 50/50 joint venture between Smithfield Foods, Inc. and CGC, while live cattle owned by Smithfield Beef Group on the transaction date were transferred to a subsidiary of Smithfield Foods, Inc. The excluded live cattle will be raised by JBS Packerland, Inc. for a negotiated fee and then sold at maturity at market-based prices. Proceeds from the sale of the excluded live cattle will be paid in cash to the Smithfield Foods, Inc./CGC joint venture or to Smithfield Foods, Inc., as appropriate. The live cattle inventories are expected to be sold within six months after the transaction date, with substantially all live cattle sold within 12 months after the transaction date.

F-182

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

4. Property, plant and equipment, net

Property, plant and equipment, net consist of the following at July 27, 2008 (in thousands):

Land	$  13,946
Buildings and improvements	72,725
Machinery and equipment	146,400
Automobiles and trucks	5,784
Furniture and fixtures	3,581
Computer hardware	2,835
Leasehold improvements	176
Construction in progress	15,796
	261,243
Accumulated depreciation	(118,354	)
	$  142,889

The sale of the Smithfield Beef Group, as discussed in Note 1, excluded certain land and land improvements that totaled $9.6 million at July 27, 2008.

5. Investment in Five Rivers

In fiscal 2006, Smithfield Beef Group and CGC formed Five Rivers, a 50/50 joint venture. Five Rivers is a stand-alone operating company, independent from the Company and CGC, currently headquartered in Greeley, Colorado, with a total of ten feedlots located in Colorado, Idaho, Kansas, Oklahoma and Texas. Five Rivers sells cattle to multiple U.S. beef packing firms using a variety of marketing methods. Five Rivers has a fiscal year ended March 31 and fiscal quarters ended June 30, September 30, and December 31.

Five Rivers meets the definition of a significant subsidiary (per Regulation S-X) with respect to the Company. Condensed statements of operations for Five Rivers are presented below:

	Quarter Ended
	June 30, 2008		June 30, 2007
Net sales	$363,688		$304,100
Cost and expenses	380,263		288,339
Operating income (loss)	(16,575	)	15,761
Net income (loss)	(20,933	)	9,479

F-183

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

6. Other assets

Other assets consists of the following at July 27, 2008 (in thousands):

Other assets:
Aircraft	$2,032
Deposit	725
Tax benefit related to uncertain tax positions	2,156
Computer software	285
Other noncurrent assets	750
	$5,948

7. Long-term debt

Long-term debt consists of the following at July 27, 2008 (in thousands):

Long-term debt due Smithfield Foods Inc.:
Debt due Smithfield Foods, Inc.	$	257,224
Term notes due SFFC, Inc.		199,425
	$	456,649
Other long-term debt due third parties:
Note payable	$	751
Other		992
		1,743
Less current portion		1,009
	$	734

The Company had a lending arrangement with Smithfield Foods, Inc. under which Smithfield Foods, Inc. finances the working capital needs of the Company. Amounts outstanding under the facility bore interest at rates ranging between 4.2% and 7% as of July 27, 2008. The lending arrangement did not have a stated maturity date nor did it contain any financial covenants. The debt with Smithfield Foods, Inc. has been classified as long term based on the intent of Smithfield Foods, Inc. for these amounts not to be repaid in the next fiscal year.

On January 1, 2007, the Company entered into a series of term notes with SFFC, Inc. (a wholly owned subsidiary of Smithfield Foods, Inc.) totaling $199.4 million. The term notes bear interest at 7.75% and are due December 31, 2016. The term notes do not contain any financial covenants.

In connection with the purchase of Murco Inc., now known as JBS Plainwell, Inc., the Company issued a note payable (Note) to the former owner for $13.3 million. Principal and interest payments under the Note are due weekly, decreasing from $30,000 to $20,000 over the life of the Note. As the Note does not bear interest, the Company discounted the estimated future cash flows under the Note and adjusted the carrying value of the Note to $8.2 million at the purchase date, which approximated the fair value of the Note. The effective interest rate on the Note is 10% and the Note matures May 12, 2009.

F-184

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

8. Income taxes

The provision (benefit) for income taxes for the fiscal quarters ended July 27, 2008 and July 29, 2007, are based on an estimated income tax rate for the respective full fiscal year. The estimated annual effective income tax rate is determined excluding the effect of significant unusual items or items that are reported net of their related tax effects. The tax effect of significant unusual items is reflected in the period in which they occur.

A reconciliation of the beginning and ending liability for uncertain tax positions is as follows (in thousands):

Balance as of April 28, 2008	$4,226
Additions for tax positions taken in prior years	124
Balance as of July 27, 2008	$4,350

The Company operates in multiple taxing jurisdictions within the United States, and is subject to audits from various tax authorities. As of July 27, 2008, the liability for uncertain tax positions included $1.5 million of accrued interest. The Company recognized $49,000 and $66,000 of interest expense in tax expense during the quarters ended July 27, 2008 and July 29, 2007, respectively. As of July 27, 2008, the liability for uncertain tax positions included $3.7 million that, if recognized, would impact the effective tax rate.

9. Other accrued liabilities

Other accrued liabilities consist of the following at July 27, 2008 (in thousands):

Feed	$11,520
Derivative financial instruments	10,829
Self-insurance reserves	3,000
Utilities	2,739
Freight	2,434
Customer programs	1,220
Litigation-related matters	1,535
Property taxes	1,123
Legal and professional fees	623
Other	6,963
	$41,986

10. Related-party transactions

The Company has a trademark and license agreement with SF Investments, Inc. (a wholly owned subsidiary of Smithfield Foods, Inc.) for the right to use certain trademarks of Smithfield Foods, Inc. in connection with the sale of certain food products. The Company made royalty payments related to this agreement of $1.6 million and $1.3 million during the quarters ended July 27, 2008 and July 29, 2007, respectively.

F-185

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

Through an informal agreement with its parent, Smithfield Foods, Inc., the Company was provided certain administrative services by Smithfield Foods, Inc. Under this arrangement, the Company was charged $4.5 million and $3.1 million during the quarters ended July 27, 2008 and July 29, 2007, respectively.

11. Regulations and litigation

The Company is subject to various laws and regulations administered by federal, state and other government entities, including the Environmental Protection Agency (EPA) and corresponding state agencies, as well as the United States Department of Agriculture, the United States Food and Drug Administration, the United States Occupational Safety and Health Administration and similar agencies in foreign countries. The Company believes that it is in compliance with these laws and regulations in all material respects and that continued compliance with these laws and regulations will not have a material adverse effect on its financial position or results of operations or cash flows.

In February 2003, the EPA promulgated regulations under the Clean Water Act governing confined animal feeding operations (CAFOs). Among other things, these regulations impose obligations on CAFOs to manage animal waste in ways intended to reduce the impact on water quality. These new regulations were challenged in federal court by both industry and environmental groups. Although a 2005 decision by the court invalidated several provisions of the regulations, they remain largely intact.

From time to time and in the ordinary course of its business, the Company is named as a defendant in legal proceedings related to various issues, including worker’s compensation claims, tort claims and contractual disputes. While the resolution of such matters may have an impact on the Company’s financial results for the period in which they are resolved, the Company believes that the ultimate disposition of these matters will not, individually or in the aggregate, have a material adverse effect upon its business or consolidated financial statements.

12. Fair value measurements

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, on April 28, 2008. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value hierarchy gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs used to measure fair value are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.

• Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

F-186

Smithfield Beef Group, Inc.

Notes to condensed consolidated financial statements

• Level 3—Unobservable for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.

The Company’s derivative financial instruments as of July 27, 2008, were measured at fair value based on Level 1 inputs.

F-187

Five Rivers Ranch Cattle Feeding LLC

Balance sheets

(in thousands)

	(Unaudited)
	September 30, 2008			March 31, 2008
Assets
Current assets
Cash	$	4		$	3
Accounts receivable		13,612			16,819
Inventories		631,885			600,161
Prepaid expenses		2,986			2,470
Derivative financial instruments		13,951			27,792
Total current assets		662,438			647,245
Property, plant and equipment, net		88,875			88,339
Water rights		12,144			12,144
Deferred financing costs, net		3,359			2,291
Other investments		1,695			1,162
Total assets	$	768,511		$	751,181
Liabilities and Members’ Equity
Current liabilities
Note payable	$	444,100		$	395,300
Borrowings on margin accounts		7,154			10,012
Bank overdraft		18,935			11,171
Accounts payable		20,791			9,156
Accrued expenses		4,502			5,197
Derivative financial instruments		3,310			5,406
Total current liabilities		498,792			436,242
Deferred compensation		170			170
Total liabilities		498,962			436,412
Commitments
Members’ equity
Members’ equity		274,416			274,416
Retained earnings (accumulated deficit)		(21,700	)		11,249
Accumulated other comprehensive income		16,833			29,104
Total members’ equity		269,549			314,769
Total liabilities and members’ equity	$	768,511		$	751,181

The accompanying notes are an integral part of these financial statements.

F-188

Five Rivers Ranch Cattle Feeding LLC

Statements of operations

(in thousands)

	(Unaudited) Six Months Ended September 30,
	2008		2007
Revenues	$850,947		$769,843
Cost of revenues	864,019		718,588
Gross profit (loss)	(13,072	)	51,255
Operating expenses
Selling, general and administrative expenses	6,762		7,289
Depreciation and amortization expense	4,607		4,292
Total operating expenses	11,369		11,581
Income (loss) from operations	(24,441	)	39,674
Other income (expenses)
Interest income	161		479
Earnings from unconsolidated affiliate	65		142
Other income	117		1,916
Interest expense	(8,851	)	(15,428	)
Total other expense, net	(8,508	)	(12,891	)
Net income (loss)	$  (32,949	)	$  26,783

The accompanying notes are an integral part of these financial statements.

F-189

Five Rivers Ranch Cattle Feeding LLC

Statements of members’ equity

Six months ended September 30, 2008 and 2007

(Unaudited)

(in thousands)

	Members’ Equity	Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total
Six months ended September 30, 2007
Balance, March 31, 2007	$274,416	$(26,208	)	$(8,634	)	$239,574
Comprehensive income:
Net income	—	26,783		—		26,783
Net gain on cash flow hedges	—	—		(9,870	)	(9,870	)
Reclassification adjustment for losses included in net income	—	—		8,634		8,634
Comprehensive income						25,547
Balance, September 30, 2007	$274,416	$575		$(9,870	)	$265,121
Six months ended September 30, 2008
Balance, March 31, 2008	$274,416	$11,249		$29,104		$314,769
Comprehensive loss:
Net loss	—	(32,949	)	—		(32,949	)
Net gain on cash flow hedges	—	—		16,833		16,833
Reclassification adjustment for gains included in net loss	—	—		(29,104	)	(29,104	)
Comprehensive loss						(45,220	)
Balance, September 30, 2008	$274,416	$(21,700	)	$16,833		$269,549

The accompanying notes are an integral part of these financial statements.

F-190

Five Rivers Ranch Cattle Feeding LLC

Statements of cash flows

(in thousands)

	(Unaudited) Six Months Ended September 30,
	2008			2007
Cash flows from operating activities:
Net income (loss)	$	(32,949	)	$	26,783
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization		4,607			4,292
Amortization of deferred financing costs		455			455
Equity in earnings of unconsolidated affiliate		(65	)		(142	)
Change in derivative fair value		(526	)		(10,122	)
Change in operating assets and liabilities:
Accounts receivable		3,207			(3,847	)
Inventories		(31,724	)		(140,759	)
Prepaid expenses		(450	)		(1,194	)
Other assets		—			250
Accounts payable		10,939			20,343
Net cash used in operating activities		(46,506	)		(103,941	)
Cash flows from investing activity:
Purchase of property, plant and equipment		(5,199	)		(7,561	)
Investment in Southfork Solutions, Inc.		(100	)		(120	)
Net cash used in investing activities		(5,299	)		(7,681	)
Cash flows from financing activities:
Capitalized debt fees		(1,903	)		—
Bank overdraft		7,764			12,018
Proceeds from note payable, net		48,800			99,600
Borrowings on margin account, net		(2,858	)		—
Net cash provided by investing activities		51,803			111,618
Decrease in cash		(2	)		(4	)
Cash at beginning of period		6			6
Cash at end of period	$	4		$	2
Cash paid for interest	$	8,429		$	11,086

The accompanying notes are an integral part of these financial statements.

F-191

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

1. Organization and nature of operation

Five Rivers Ranch Cattle Feeding LLC (“the Company”) is a limited liability company organized on May 20, 2005, in the state of Delaware. The Company is a 50/50 joint venture between ContiBeef LLC (“ContiBeef”) and MF Cattle Feeding, Inc. (“MF”) (the “Members”). The Members exercise joint control over the Company. ContiBeef is a wholly-owned subsidiary of Continental Grain Company, and MF is a wholly-owned subsidiary of Cattle Production Systems, Inc. whose parent company is Smithfield Beef Group, Inc. (“Smithfield Beef”), which is a wholly-owned subsidiary of Smithfield Foods, Inc. On May 20, 2005, the operating assets and certain liabilities of ContiBeef and MF were transferred to the Company at net book value in exchange for equity interests in the Company.

The Company was engaged in raising feeder cattle for itself and for outside customers, and then ultimately selling the cattle to meat packing companies (“packers”). Feedlot operations are located in Idaho, Texas, Colorado, Kansas, and Oklahoma.

2. Summary of significant accounting policies

Interim Periods and Basis of Presentation—The Company’s fiscal year-end is on March 31^st. The information included in these financial statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented. Balance sheet amounts are as of September 30, 2008 and March 31, 2008 and operating result amounts are for the six months ended September 30, 2008 and 2007, and include all normal and recurring adjustments that we considered necessary for the fair summarized presentation of our financial position and operating results. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not necessarily be indicative of the operating results for the full fiscal year.

Accounts Receivable—Accounts receivable are primarily from feedlot customers for their share of feed, medicine, and other supplies for the care of those cattle and billed to the feedlot customer every month. Based on past history and the ability to collect final feed bills from the packers upon shipment of the finished cattle, the Company has no history of bad debt. Accordingly, at September 30, 2008 and March 31, 2008, an allowance for doubtful accounts was not required.

Inventories—Inventories of livestock, feed, silage, processing supplies, and medication are stated at the lower of cost (first-in, first-out or “FIFO”) or market. Farm inventory is stated a lower of cost (FIFO) or market and includes seeds and other costs related to the production of the next season’s crops. Parts, medication and other inventories are stated at average cost.

Property, Plant and Equipment—Property, plant and equipment was stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of 25 years for farm buildings, 10 to 30 years for land improvements and buildings, and 2 to 12 years for machinery, equipment, furniture, and purchased software. Maintenance and repairs are expensed as incurred, while betterments and expenditures that materially improve or extend the life of an asset are capitalized. Upon retirement or sale of an asset, its cost and related accumulated

F-192

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

depreciation are removed from the respective asset account and any resulting gain or loss is reflected in the statement of operations in the period realized. The costs of developing internal-use software are capitalized and amortized when placed in service over the expected useful life of the software. Major renewals and improvements that extend the useful life of the asset are capitalized while maintenance and repairs are expensed as incurred. The Company has historically and currently accounts for planned major maintenance activities as they are incurred in accordance with the guidance in the Financial Accounting Standards Board (“FASB”) FASB Staff Position (“FSP”) AUG Air-1: “Accounting for Planned Major Maintenance Activities.” The applicable interest charges incurred during the construction of assets if material are capitalized. In accordance with Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. When future undiscounted cash flows of assets are estimated to be insufficient to recover their related carrying value, the Company compares the asset’s estimated future cash flows, discounted to present value using a risk-adjusted discount rate, to its current carrying value and records a provision for impairment as appropriate.

Depreciation and amortization expense for the six months ended September 30, 2008 and September 30, 2007 totaled $4.6 million and $4.3 million, respectively.

Deferred Financing Costs—Debt financing costs totaling $4.5 million were capitalized and are being amortized over the terms of the related loan agreements using the straight-line method. Accumulated amortization of the debt financing costs was $3.1 million at September 30, 2008 and $2.7 million at March 31, 2008, respectively.

Bank Overdraft—The majority of the Company’s bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance that result in overdraft balances for accounting purposes are included in the change in the related balance and are reflected as a financing activity on the statement of cash flows.

Self-Insurance Accruals—The Company is self-insured for employee medical and dental benefits and purchases insurance policies with deductibles for certain losses relating to worker’s compensation and general liability. The Company has purchased stop-loss coverage in order to limit its exposure to any significant levels of certain claims. Self-insured losses are accrued based upon periodic third party actuarial reports of the aggregate uninsured claims incurred using actuarial assumptions accepted in the insurance industry and the Company’s historical experience rates. The Company has recorded a prepaid asset with an offsetting liability to reflect the amounts estimated as due for claims incurred and accrued but not yet paid to the claimant by the third party insurance company in accordance with SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.”

Derivatives and Hedging Activities—The Company accounts for its derivatives and hedging activities in accordance with SFAS No. 133, “Accounting for Derivative Financial Instruments and Hedging Activities,” (“SFAS No. 133”), and its related amendment, SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities.” The Company uses derivatives

F-193

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

(e.g., futures and options) for the purpose of mitigating exposure to changes in commodity prices. The fair value of each derivative is recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives are recognized immediately in the statements of operations.

Income Taxes—The Company is treated as a flow-through entity for income tax purposes and, therefore, the Company’s taxable income is included in the Members’ respective consolidated U.S. federal income tax returns. The Company is not allocated any current or deferred U.S. federal income expense (benefit) arising from the Company’s operations included in the Members’ results.

Revenue Recognition—The Company sells live cattle to packers located primarily in the Plains states. Revenue is generally recognized when live cattle are shipped to customers, based on terms as set forth by The Packers and Stockyards Act of 1921. The Company records transactions based on lot by lot accounting, generally recognizing revenue as cattle are shipped or on delivery depending on the terms of the sale, and will adjust revenues to reflect the results of the grading process as reported to the Company by the packer. The risk of loss transfers to the packer upon shipment, unless the Company has hired the transporter for shipment, in which case risk of loss transfers at delivery. Hotel revenue charged to customers for cattle feeding and care is recognized on a daily basis and is recorded in feedlot sales in the statements of operations. Animal feed supplement sold to third parties is recognized when the product is delivered and is recorded in feedlot sales in the statement of operations.

Advertising Costs—Advertising costs are expensed as incurred. Advertising costs were $67 thousand and $99 thousand for the six months ended September 30, 2008 and 2007, respectively.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires the Company to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In preparing these financial statements, the Company has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. Changes in the estimates and assumptions used by the Company could have significant impact on the Company’s financial results. Actual results could differ from those estimates. Significant estimates with regard to these financial statements include the estimate of asset useful lives and insurance accruals.

Concentration of Business and Credit Risk—Substantially all of the Company’s business is on a credit basis. The Company extends credit to cattle feeding customers based on the fact that cattle are held in our feedyards, shipped directly to packers, and the packers will deduct final feedbills from any proceeds due to the customer. The demand for the Company’s product and service is dependent upon the general economy, cost of feeder cattle, live cattle, corn and other feedstocks, weather, and other factors that may affect the pricing of food commodities.

F-194

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

Fair Value of Financial Instruments—The carrying amounts of the Company’s financial instruments, including cash, trade receivables, and payables, approximate their fair values due to the short-term nature of the instruments. The fair value of the Company’s debt approximates market value as its line of credit bears interest at floating market rates based on LIBOR. Open derivative contracts are traded on the Chicago Mercantile Exchange and are marked to market on a daily basis and are recorded in the balance sheet.

Recent Accounting Pronouncements—In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.” SFAS No. 161 provides for enhanced disclosures about the use of derivatives and their impact on a Company’s financial position and results of operations. This statement is effective for the Company’s fiscal year 2009. The Company does not expect the adoption of SFAS No. 161 to have a material impact on its financial position, results of operations, or cash flows.

In December 2007, the FASB issued SFAS No. 141(R) “Business Combinations.” SFAS No. 141(R) requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction and any non-controlling interest in the acquiree at the acquisition date, measured at fair value at that date. This includes the measurement of the acquirer’s shares issued as consideration in a business combination, the recognition of contingent consideration, the accounting for pre-acquisition gains and loss contingencies, the recognition of capitalized in–process research and development, the accounting for acquisition related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirer’s income tax valuation allowance and deferred taxes. One significant change in this statement is the requirement to expense direct costs of the transaction, which under existing standards are included in the purchase price of the acquired company. This statement also established disclosure requirements to enable the evaluation of the nature and financial effect of the business combination. SFAS No. 141(R) is effective for business combinations consummated after December 31, 2008. The statement also requires that any adjustments to uncertain tax positions from business combinations consummated prior to December 31, 2008 no longer be recorded as an adjustment to goodwill, but be reported in income.

3. Accounts receivable

Accounts receivable at September 30, 2008 and March 31, 2008, were as follows (in thousands):

	September 30, 2008	March 31, 2008
Trade	$13,547	$16,736
Employee advances	65	83
Total accounts receivables	$13,612	$16,819

F-195

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

4. Inventories

Inventory balances at September 30, 2008 and March 31, 2008, were as follows (in thousands):

	September 30, 2008	March 31, 2008
Livestock	$591,972	$574,082
Silage	20,415	13,657
Planting seeds and supplies	444	365
Parts	740	718
Feed	17,032	10,356
Medication and other	1,282	983
Total inventory	$631,885	$600,161

5. Property, plant and equipment

Property, plant and equipment at September 30, 2008 and March 31, 2008 were as follows (in thousands):

	September 30, 2008		March 31, 2008
Land and improvements	$66,995		$65,580
Buildings	9,045		8,898
Machinery, equipment and fixtures	35,878		33,348
Capitalized software	636		636
Construction-in-progress	2,888		2,009
	115,442		110,471
Accumulated depreciation	(26,567	)	(22,132	)
Total property and equipment, net	$88,875		$88,339

6. Water rights

The Company has recorded intangible assets in the form of water rights with indefinite lives at the Kuner and Gilcrest feedlots. This intangible asset is recorded at its carryover basis of $12.1 million. The Company’s annual impairment testing date coincides with its fiscal year-end. If an assessment indicates impairment, the impaired asset is written down to its fair value based on the best information available in accordance with SFAS 142, “Goodwill and Other Intangible Assets.” There were no impairments recorded as of September 30, 2008 and March 31, 2008.

F-196

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

7. Other investments

Investments at September 30, 2008 and March 31, 2008 are as follows (in thousands):

	September 30, 2008	March 31, 2008
50% interest—Northern Colorado Feed, LLC	$1,085	$1,033
500,000 common shares—Southfork Solutions, Inc.	600	500
Membership	10	10
Total other investments	$1,695	$1,543

Northern Colorado Feed, LLC—The Company owns a 50% interest in Northern Colorado Feed, LLC, which is an unconsolidated affiliate accounted for under the equity method. Investments in entities in which we lack control but have the ability to exercise significant influence over operating and financial policies are accounted for on the equity method. Under the equity method, the investment, originally recorded at cost, (fair value at date of acquisition) is adjusted to recognize our share of the net earnings or losses of the affiliate as they occur. The Company’s share of earnings in the investment for the six months ended September 30, 2008 and 2007 totaled $67 thousand and $142 thousand, respectively.

Southfork Solutions, Inc.—The Company considers their investment in Southfork Solutions available-for-sale as defined in SFAS No. 115. “Accounting for Certain Investments in Debt and Equity Securities.” Accordingly, this investment is considered an available for sale security recorded at fair value. Fair value was estimated using valuation methodologies based on available and observable market information. Such valuation methodologies include reviewing the value ascribed to the most recent financing proposal by Southfork Solutions and reviewing their underlying financial performance. Southfork Solutions is a privately held company that is developing technology for animal identification and tracking purposes.

Membership—The Company has a membership with Feeders’ Advantage LLC, a Idaho limited liability corporation which is 50% owned by MWI Veterinary Supply Co., a wholly owned subsidiary of MWI Veterinary Supply, Inc. The remaining 50% is owned by various members, each paying $10 thousand for membership. As a requirement of membership, each member is required to purchase all of its veterinary supplies from MWI Veterinary Supply.

8. Accrued liabilities

Accrued liabilities at September 30, 2008 and March 31, 2008, were as follows (in thousands):

	September 30, 2008	March 31, 2008
Employee compensation, bonus and benefits	$1,509	$2,820
Reserve for workers compensation and automobile liability insurance	1,441	1,038
Interest	—	286
Other	1,552	1,053
Total accrued liabilities	$4,502	$5,197

F-197

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

9. Note payable

The Company entered into a $550 million revolving credit agreement (the “Facility”) with a maturity date of May 20, 2010. During April 2006, the line of credit was reduced by $25 million as provided for in the credit agreement. At September 30, 2008, the Company was utilizing $444.1 million of the Facility, and had an outstanding letter of credit of $1.5 million leaving $79.4 million in unused line of credit with $31.1 million available to be borrowed by the Company according to the terms of the credit agreement. At March 31, 2008, the Company was utilizing $395.3 million of the Facility, and had an outstanding letter of credit of approximately $1.5 million leaving $128.24 million in unused line of credit with $116.8 million available to be borrowed by the Company according to the terms of the credit agreement. Borrowings under the Facility bear interest at variable rates based on LIBOR. The Company’s policy is to pay down the outstanding principal balance of the line of credit and to borrow additional amounts to finance working capital requirements. Accordingly, the Company classifies the debt as a current liability in the balance sheet. The credit agreement is collateralized by certain fixed assets, accounts receivable and inventories of the Company. Among other requirements, the Facility requires the Company to maintain certain financial ratios, minimum levels of net worth, and establish limitations on certain types of payments, including dividends, investments, and capital expenditures. The Company is in compliance with all covenants.

10. Commitments

The Company utilizes in its operations buildings and equipment which are leased under operating lease agreements, extending through March 2013. The following is a schedule of the future minimum obligations under the operating leases that have initial or remaining non-cancelable lease terms in excess of one year at September 30, 2008 (in thousands):

Periods ending September 30	Amount
2008	$329
2009	218
2010	202
2011	206
2012	211
Thereafter	165
Total	$1,331

Rent expense under all operating leases was approximately $.7 million and $.7 million for the six months ended September 30, 2008 and 2007, respectively. The initial term of the Loveland office lease is seven years with one five-year extension. There is also a separate lease for 2,254 square feet of adjoining office space that is currently being occupied by Five Star Cattle Systems, a MF Cattle Feeding, Inc. subsidiary. The lease allows for 3% annual escalations, and includes the tenant’s pro rata share of operating expenses.

F-198

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

11. Related party transactions

The Company has an agreement with ContiBeef whereby ContiBeef would provide certain services by ContiGroup Companies, Inc. for $1 million annually. Expenses for the six months ended September 30, 2008 and 2007 were $265 thousand and $390 thousand, respectively.

12. Significant customers

Outside customers accounted for 3% and 16% of the total cattle on feed at the Company’s feedyards for the six months ended September 30, 2008 and 2007, respectively.

13. Employee benefit plans

The Company sponsored a defined contribution plan 401(k) Plan, administered by The Vanguard Group. All employees may participate by contributing a portion of their annual earnings to the plan. The Company’s contributions are based on each participant’s level of contribution and cannot exceed the maximum allowable for tax purposes. Total contributions were approximately $105 thousand and $86 thousand for the six month period ended September 30, 2008 and 2007, respectively.

14. Derivative instruments and hedging activity

The Company is exposed to market risk, such as changes in commodity prices for its main raw materials—feeder cattle and corn, and its finished product—live cattle. The Company’s exposure to commodity price risk relates to raw material and finished product price fluctuations caused by supply conditions, weather, economic conditions, and other factors. To manage volatility associated with these exposures, the Company may enter into derivative transactions pursuant to established Company policies. Generally, the Company utilizes commodity futures and option contracts to reduce the volatility of commodity input prices on corn and feeder cattle and commodity prices on live cattle.

Options are used to economically hedge a portion of the market risk, even though the Company has elected not to designate these positions as accounting hedges. The Company enters into futures and options transactions with established brokers.

The Company considers its use of derivative instruments to be an economic hedge against changing prices. At September 30, 2008 and March 31, 2008, all open derivative contracts were recorded at fair value in accordance with SFAS No. 133. These contracts are recorded within current assets when the unrealized value is a gain and within current liabilities when the unrealized value is a loss. The Company designates contracts for the future purchase or sale of certain commodities as normal purchase normal sales and thus these contracts are not marked-to-market. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. The Company links all hedges to forecasted transactions and

F-199

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items, both at the inception of the hedge and on an ongoing basis.

Trading Activities—During the six months ended September 30, 2008 and 2007, the Company had the following derivative activities, which while economic hedges, were not accounted for as hedges and whose gains or losses are reflected in “Other revenues” on the Statements of Operations:

• Corn Purchases—As of September 30, 2008 and 2007, the Company had open derivative contracts on 700 thousand and 11.5 million bushels of corn, respectively, to hedge or unwind pricing on future purchases at various feedyards. At September 30, 2008 and 2007, these positions had unrealized losses totaling $557 thousand and $224 thousand, respectively. During the six months ended September 30, 2008, the Company recorded $474 thousand in realized gains on these positions. During the six months ended September 30, 2007, the Company recorded $14 thousand in realized losses on these positions.

• Feeder Cattle Purchases—As of September 30, 2008, the Company had open derivative contracts on 300,000 pounds of feeder cattle to hedge purchases at various feedyards which carried an unrealized loss of $8 thousand. At September 30, 2007, there were no open positions on feeder cattle that were not designated as accounting hedges, and realized losses totaling $418 thousand were recorded for the six months then ended.

• Live Cattle Sales—As of September 30, 2008 and 2007, the Company had open derivative contracts on 220.4 million and 166.7 million pounds of live cattle, respectively, to hedge future sales at various feedyards. At September 30, 2008 and 2007, these positions had net unrealized losses totaling $2.3 million and $4.3 million, respectively. During the six months ended September 30, 2008 and 2007, the Company recorded realized gains on these positions of $10.8 million and $10.9 million, respectively.

• Natural Gas Purchases—During the six months ended September 30, 2008, the Company recorded $23 thousand in unrealized losses on natural gas contracts to hedge future purchases at various feedyards. As of September 30, 2007, there were no open derivative contracts on natural gas.

• Soybean Meal Purchases—During the six months ended September 30, 2007, the Company recorded $96 thousand in realized gains on soybean meal. There was no soybean meal derivative contracts traded for the period ended September 30, 2008.

Hedging Activities—During the six months ended September 30, 2008 and 2007, the Company had the following derivatives which were appropriately designated and accounted for as hedges:

• Feeder Cattle Purchases—As of September 30, 2008 and 2007, the Company had no open derivative contracts on feeder cattle. For the six months ended September 30, 2007, the Company recorded $229 thousand in realized gains on feeder cattle hedges which have been recorded in other income due to ineffectiveness of these hedges.

F-200

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

• Live Cattle Sales—As of September 30, 2008, the Company had open derivative contracts on 164.6 million pounds of live cattle to hedge future sales at various feedyards which are being accounted for as cash flow hedges. These positions had unrealized gains totaling $13.5 million and realized gains totaling $3.3 million which were recorded in accumulated other comprehensive loss. During the six months ended September 30, 2008, the Company realized $13.0 million in losses on live cattle hedges. Of this, $3.7 million of losses have been recorded in cost of sales, and $9.3 million of losses have been recorded in other income due to ineffectiveness of these hedges.

As of September 30, 2007, the Company had open derivative contracts on 182 million pounds of live cattle to hedge future sales at various feedyards which were being accounted for as cash flow hedges. These positions had unrealized losses totaling $8.7 million and realized losses totaling $1.3 million which were recorded in accumulated other comprehensive income. During the six months ended September 30, 2007, the Company realized $3 million in gains on live cattle hedges. Of this, $600 thousand of gains have been recorded in cost of sales, and $2.4 million in gains have been recorded in other income due to ineffectiveness on these hedges.

15. Disclosures about fair value of financial instruments

The Company adopted SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value and requires additional disclosures about fair value measurements. The criterion that is set forth in this standard is applicable to the fair value measurement where it is permitted or required under other accounting pronouncements. SFAS No. 157 defines fair value as the exit price, which is the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date. SFAS No. 157 establishes a three-tier fair value hierarchy that prioritizes inputs to valuation techniques used for fair value measurement.

• Level 1 consists of observable market data in an active market for identical assets or liabilities.

• Level 2 consists of observable market data, other than that included in Level 1, that is either directly or indirectly observable.

• Level 3 consists of unobservable market data. The input may reflect the assumptions of the Company, not a market participant, if there is little available market data and the Company’s own assumptions are considered by management to be the best available information.

In the case of multiple inputs being used in fair value measurement, the lowest level input that is significant to the fair value measurement represents the level in the fair value hierarchy in which the fair value measurement is reported. The adoption of SFAS No. 157 has not resulted in any significant changes to the methodologies used for fair value measurement. The Company uses derivatives for the purpose of mitigating exposure to market risk in commodity prices. The Company uses exchange-traded futures and options to hedge grain and natural gas commodities.

F-201

Five Rivers Ranch Cattle Feeding LLC

Unaudited notes to financial statements

The fair value of derivative assets and liabilities are reflected on the balance sheet totaling $13.9 million and $3.3 million, respectively. The fair value measurements are performed on a recurring basis and the level of the fair value hierarchy in which they fall are as follows at September 30, 2008 (in thousands):

Level 1	September 30, 2008
Assets:
Commodity derivatives—total fair value	$13,951
Liabilities:
Commodity derivatives—total fair value	$3,310

16. Subsequent events

On October 23, 2008, Smithfield Foods acquired from Continental Grain Company its 50% ownership interest in the Company and simultaneously on that date JBS USA, Inc. effectively acquired 100% ownership interest in the Company in a transaction accounted for as a purchase. The livestock inventory was retained by Smithfield Foods and Continental Grain Company. The nature of operations of the Company was modified so that in periods following the change of control, the Company will provide cattle feeding services only and will not sell cattle except on behalf of the cattle owners. As a result of this change, certain accounting policies including derivative trading activities were changed by the successor company.

F-202

             shares

Common stock

Prospectus

J.P.Morgan BofA Merrill Lynch

                    , 2009

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

No action is being taken in any jurisdiction outside the United States and Brazil to permit a public offering of the common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until                     , 2009, all dealers that buy, sell or trade in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Part II

Information not required in the prospectus

Item 13. Other expenses of issuance and distribution.

The following table sets forth the expenses (other than underwriting compensation expected to be incurred) in connection with this offering. All of such amounts (except the SEC registration fee and FINRA filing fee) are estimated.

SEC registration fee	$111,600
FINRA filing fee	75,500
NYSE listing fee	*
Printing and engraving expenses	*
Legal fees and expenses	*
Accounting fees and expenses	*
Blue Sky fees and expenses (including legal fees)	*
Transfer agent and registrar fees and expenses	*
Miscellaneous	*
Total	$            *

* To be completed by amendment.

Item 14. Indemnification of directors and officers.

Upon completion of this offering, the Registrant’s amended and restated certificate of incorporation will contain provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, the personal liability of the Registrant’s directors and executive officers for monetary damages for breach of their fiduciary duties as directors or officers. The Registrant’s amended and restated certificate of incorporation and bylaws will provide that the Registrant must indemnify its directors and executive officers and may indemnify its employees and other agents to the fullest extent permitted by the General Corporation Law of the State of Delaware.

Sections 145 and 102(b)(7) of the General Corporation Law of the State of Delaware provide that a corporation may indemnify any person made a party to an action by reason of the fact that he or she was a director, executive officer, employee or agent of the corporation or is or was serving at the request of a corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of an action by or in right of the corporation, no indemnification may generally be made in respect of any claim as to which such person is adjudged to be liable to the corporation.

The Registrant has entered into indemnification agreements with its current directors and executive officers, in addition to the indemnification provided for in its amended and restated certificate of incorporation and bylaws, and intends to enter into indemnification agreements with any new directors and executive officers in the future.

The Registrant has purchased and intends to maintain insurance on behalf of each any person who is or was a director or officer of the Registrant against any loss arising from any claim

II-1

asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.

The Underwriting Agreement (see Exhibit 1.1 hereto) provides for indemnification by the international underwriters of the Registrant, certain of its stockholders and its executive officers and directors, and by the Registrant of the underwriters, for certain liabilities, including liabilities arising under the Securities Act.

See also the undertakings set out in response to Item 17 herein.

Item 15. Recent sales of unregistered securities.

On April 27, 2009, in a transaction exempt from the registration requirements of the Securities Act of 1933, or the Securities Act, our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued 11.625% senior unsecured notes due 2014 in an aggregate principal amount of $700.0 million, which, after deducting initial purchaser discounts, commissions and expenses in respect of this offering, generated net proceeds of approximately $650.8 million. The notes were sold to several initial purchasers for whom J.P. Morgan Securities Inc. and Banc of America Securities LLC acted as representatives, and resold by the initial purchasers to qualified institutional buyers in reliance upon Rule 144A under the Securities Act and to persons outside the United States in reliance upon Regulation S of the Securities Act. The proceeds of the note issuance were used to repay $100.0 million of borrowings under our secured revolving credit facility and to repay $550.8 million of the outstanding principal and accrued interest on intercompany loans to us from a subsidiary of JBS S.A.

Item 16. Exhibits and financial statement schedules.

The following Exhibits are filed as part of this Registration Statement.

(a) Exhibits:

The attached exhibit index is incorporated herein by reference.

(b) Financial statement schedules.

None.

Item 17. Undertakings.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the international underwriting agreement certificates in such denominations and registered in such names as required by the international underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful

II-2

defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greeley, State of Colorado, on July 22, 2009.

JBS USA HOLDINGS, INC.
By:	/s/    WESLEY MENDONÇA BATISTA
Name:	Wesley Mendonça Batista
Title:	Chief Executive Officer

Power of attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Wesley Mendonça Batista, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign (1) any and all amendments to this Form S-1 (including post-effective amendments) and (2) any registration statement or post-effective amendment thereto to be filed with the Securities and Exchange Commission pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and any other regulatory authority, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/    WESLEY MENDONÇA BATISTA         Wesley Mendonça Batista	President, Chief Executive Officer and Director (Principal Executive Officer)	July 22, 2009
/s/    ANDRÉ NOGUEIRA DE SOUZA         André Nogueira de Souza	Chief Financial Officer (Principal Financial and Accounting Officer)	July 22, 2009
/s/    JOESLEY MENDONÇA BATISTA         Joesley Mendonça Batista	Director	July 22, 2009
/s/    JOSÉ BATISTA JÚNIOR         José Batista Júnior	Director	July 22, 2009

Exhibit index

Exhibit number	Exhibit title
1.1*	Form of Underwriting Agreement
3.1*	Certificate of Incorporation of the Registrant, as currently in effect
3.2*	Form of Amended and Restated Certificate of Incorporation of the Registrant, to be effective upon closing of the offering
3.3*	Bylaws of the Registrant, as currently in effect
3.4*	Form of Amended and Restated Bylaws of the Registrant, to be effective upon closing of the offering
4.1*	Specimen Common Stock Certificate of the Registrant
5.1*	Opinion of White & Case LLP
10.1.1	Indenture by and among JBS USA, LLC, JBS USA Finance, Inc., JBS USA Holdings, Inc., each of the other guarantors named therein, and The Bank of New York Mellon, dated April 27, 2009
10.1.2	Indenture by and between JBS S.A., JPMorgan Chase Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and J.P. Morgan Bank Luxembourg S.A., dated August 4, 2006
10.1.3	First Supplemental Indenture by and between JBS S.A., JBS Finance Ltd., Flora Produtos de Higiene e Limpeza Ltda., and The Bank of New York Mellon, dated January 31, 2007
10.1.4	Second Supplemental Indenture by and between JBS S.A., JBS Finance Ltd., the Registrant, and The Bank of New York Mellon, dated September 6, 2007
10.1.5	Third Supplemental Indenture by and between JBS S.A., JBS Finance Ltd., and The Bank of New York Mellon, dated August 14, 2008
10.1.6*	Revolving Loan Credit Agreement by and among JBS USA, LLC (formerly JBS USA, Inc.), the other credit parties signatories thereto, General Electric Capital Corporation, GE Capital Markets, Inc., Credit Suisse Securities (USA) LLC, Rabobank Nederland, JPMorgan Securities Inc. and JPMorgan Chase Bank, N.A., dated November 5, 2008
10.1.7*	Amendment No. 1 to Revolving Loan Credit Agreement, dated December 29, 2008
10.1.8*	Amendment No. 2 to Revolving Loan Credit Agreement, dated April 22, 2009
10.1.9*	Guaranty and Security Agreement by and among JBS USA, LLC (formerly JBS USA, Inc.), each other grantor party thereto and General Electric Capital Corporation, dated November 5, 2008
10.1.10*	Amended and Restated Credit Agreement by and among J&F Oklahoma Holdings Inc., Five Rivers Ranch Cattle Feeding, LLC, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New York Branch, each of the banks or other lending institutions which is a signatory thereto, ING Capital LLC, Bank of America, N.A., US Bank National Association, and Wells Fargo Bank, National Association, dated October 7, 2008
10.1.11*	Second Amendment to Amended and Restated Credit Agreement by and among J&F Oklahoma Holdings Inc., Five Rivers Ranch Cattle Feeding LLC, each of the banks or other lending institutions which is a signatory thereto, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New York Branch, dated October 31, 2008

Exhibit number	Exhibit title
10.1.12*	Amended and Restated Security Agreement by and among J&F Oklahoma Holdings Inc., Five Rivers Ranch Cattle Feeding LLC, any subsidiary of J&F Oklahoma Holdings Inc. and/or Five Rivers Ranch Cattle Feeding LLC that may execute and deliver the Subsidiary Joinder Agreement, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New York Branch, dated October 7, 2008
10.1.13*	Consolidated, Amended and Restated Intercompany Loan Agreement dated April 27, 2009 by and between JBS HU Liquidity Management LLC and its Swiss branch, JBS HU Liquidity Management LLC Szombathely (HU) Zug Branch, and JBS USA Holdings, Inc.
10.1.14*	Corporate Offer Letter, by and among Swift Australia (Southern) Pty Limited (formerly Tasman Group Services Pty Ltd A.C.N., Baybrick Pty Ltd, JBS Southern Australia Pty Ltd, JBS Southern Holdco Pty Ltd and NAB, dated May 2, 2008
10.1.15*	AUD120,000,000 Facilities Agreement, by and among Swift Australia Pty Ltd, the guarantors specified therein and Australia and New Zealand Banking Group Limited, dated February 26, 2008
10.1.16*†	Raw Material Supply Agreement, by and between JBS USA Holdings, Inc. and Beef Products Inc., dated February 27, 2008
10.1.17*†	First Amendment to Raw Material Supply Agreement entered into between JBS USA Holdings, Inc. and Beef Products Inc. on February 27, 2008, dated October 20, 2008
10.1.18*	Amended and Restated Promissory Note issued by JBS USA Holdings, Inc. in favor of NBPCO Holdings, LLC, in the amount of US$173,191,457.37, dated December 18, 2008
10.1.19*	Cattle Purchase and Sale Agreement by and between JBS USA, LLC and J&F Oklahoma Holdings Inc., dated October 23, 2008
10.1.20*	Cattle Supply and Feeding Agreement by and between Five Rivers Ranch Cattle Feeding LLC and J&F Oklahoma Holdings Inc., dated October 23, 2008
10.1.21*	JBS USA Holdings, Inc. 2009 Stock Incentive Plan
15	Letter of BDO Seidman, LLP regarding unaudited interim financial information
21	List of subsidiaries of the Registrant
23.1	Consent of BDO Seidman, LLP
23.2	Consent of Grant Thornton LLP
23.3	Consent of Ernst & Young LLP
23.4	Consent of Deloitte & Touche LLP
23.5*	Consent of White & Case LLP (included in Exhibit 5.1)
24	Power(s) of attorney (included in the signature pages)

* To be filed by amendment.

† Portions of these documents are expected to be omitted pursuant to a request by the Registrant for confidential treatment.

Certain debt instruments of the Registrant and its subsidiaries have been omitted as exhibits because the amounts involved in such debt instruments are less than 10% of the Registrant’s total assets. Copies of debt instruments for which the related debt is less than 10% of the Registrant’s total assets will be furnished to the Commission upon request.

EX-10.1.1

Exhibit 10.1.1

JBS USA, LLC

JBS USA FINANCE, INC.,

as Issuers,

the GUARANTORS named herein,

as Guarantors,

and

THE BANK OF NEW YORK MELLON,

as Trustee

INDENTURE

Dated as of April 27, 2009

11.625% Senior Notes due 2014

CROSS-REFERENCE TABLE

Trust Indenture Act	Indenture
Section	Section
310 (a)(1)	8.10
(a)(2)	8.10
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	8.08; 8.10
(b)	8.08; 8.10; 12.02
(c)	N.A.
311 (a)	8.11
(b)	8.11
(c)	N.A.
312 (a)	2.05
(b)	12.03
(c)	12.03
313 (a)	8.06
(b)(1)	8.06
(b)(2)	8.06
(c)	8.06; 12.02
(d)	8.06
314 (a)	4.05(a); 4.19; 12.02
(b)	N.A.
(c)(1)	8.02; 12.04; 12.05
(c)(2)	8.02; 12.04; 12.05
(c)(3)	N.A.
(d)	N.A.
(e)	12.05
(f)	N.A.
315 (a)	8.01(b); 8.02(a)
(b)	8.05; 12.02
(c)	8.01
(d)	7.05; 8.01(c)
(e)	7.11
316 (a)(last sentence)	2.09
(a)(1)(A)	7.05
(a)(1)(B)	7.04
(a)(2)	10.02
(b)	7.07
(c)	10.04
317 (a)(1)	7.08
(a)(2)	7.09
(b)	2.04
318 (a)	12.01
(c)	12.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS
		Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.	Definitions	1
SECTION 1.02.	Other Definitions	28
SECTION 1.03.	Incorporation by Reference of Trust	29
	Indenture Act
SECTION 1.04.	Rules of Construction	29
ARTICLE TWO
THE NOTES
SECTION 2.01.	Form and Dating	30
SECTION 2.02.	Execution, Authentication	31
	and Denomination; Additional Notes
SECTION 2.03.	Registrar and Paying Agent	33
SECTION 2.04.	Paying Agent To Hold Assets in Trust	33
SECTION 2.05.	Holder Lists	34
SECTION 2.06.	Transfer and Exchange	34
SECTION 2.07.	Replacement Notes	34
SECTION 2.08.	Outstanding Notes	35
SECTION 2.09.	Treasury Notes	35
SECTION 2.10.	Temporary Notes	35
SECTION 2.11.	Cancellation	36
SECTION 2.12.	Defaulted Interest	36
SECTION 2.13.	CUSIP and ISIN Numbers	36
SECTION 2.14.	Deposit of Moneys	36
SECTION 2.15.	Book-Entry Provisions for Global Notes	36
SECTION 2.16.	Special Transfer and Exchange Provisions	38
SECTION 2.17.	Special Interest	41
SECTION 2.18.	Open Market Purchases	42
ARTICLE THREE
REDEMPTION
SECTION 3.01.	Notices to Trustee	42
SECTION 3.02.	Selection of Notes To Be Redeemed	43
SECTION 3.03.	Notice of Redemption	43
SECTION 3.04.	Effect of Notice of Redemption	44
SECTION 3.05.	Deposit of Redemption Price	44

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		Page
SECTION 3.06.	Notes Redeemed in Part	44
ARTICLE FOUR
COVENANTS OF THE ISSUERS
SECTION 4.01.	Payment of Notes	44
SECTION 4.02.	Maintenance of Office or Agency	45
SECTION 4.03.	Corporate Existence	45
SECTION 4.04.	Payment of Taxes	45
SECTION 4.05.	Compliance Certificate; Notice of Default	46
SECTION 4.06.	Waiver of Stay, Extension or Usury Laws	46
SECTION 4.07.	Change of Control	46
SECTION 4.08.	Limitation on Incurrence of	48
	Additional Debt and Issuance of Capital Stock
SECTION 4.09.	Limitation on Restricted Payments	52
SECTION 4.10.	Limitation on Liens	56
SECTION 4.11.	Limitation on Asset Sales	56
SECTION 4.12.	Limitation on Restrictions on	60
	Distributions from Restricted Subsidiaries
SECTION 4.13.	Limitation on Affiliate Transactions	62
SECTION 4.14.	Limitation on Sale and Leaseback Transactions	64
SECTION 4.15.	Designation of Restricted	64
	and Unrestricted Subsidiaries
SECTION 4.16.	Limitation on Guarantees	65
	of Debt by Restricted Subsidiaries
SECTION 4.17.	Limitation on Business Activities	66
SECTION 4.18.	Limitation on Activities of the Co-Issuer	67
SECTION 4.19.	Reports of the Company	67
SECTION 4.20.	Suspension of Covenants	70
ARTICLE FIVE
CERTAIN COVENANTS OF PARENT
SECTION 5.01.	Existence	71
SECTION 5.02.	Limitation on Incurrence of Additional Debt	71
SECTION 5.03.	Limitation on Distributions	73
SECTION 5.04.	Reports of Parent	75
ARTICLE SIX
SUCCESSOR CORPORATION
SECTION 6.01.	Mergers, Consolidations, Etc.	75

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		Page
ARTICLE SEVEN
DEFAULT AND REMEDIES
SECTION 7.01.	Events of Default	79
SECTION 7.02.	Acceleration	81
SECTION 7.03.	Other Remedies	82
SECTION 7.04.	Waiver of Past Defaults	82
SECTION 7.05.	Control by Majority	82
SECTION 7.06.	Limitation on Suits	83
SECTION 7.07.	Rights of Holders To Receive Payment	83
SECTION 7.08.	Collection Suit by Trustee	83
SECTION 7.09.	Trustee May File Proofs of Claim	83
SECTION 7.10.	Priorities	84
SECTION 7.11.	Undertaking for Costs	84
ARTICLE EIGHT
TRUSTEE
SECTION 8.01.	Duties of Trustee	85
SECTION 8.02.	Rights of Trustee	86
SECTION 8.03.	Individual Rights of Trustee	88
SECTION 8.04.	Trustee’s Disclaimer	88
SECTION 8.05.	Notice of Default	88
SECTION 8.06.	Reports by Trustee to Holders	88
SECTION 8.07.	Compensation and Indemnity	89
SECTION 8.08.	Replacement of Trustee	90
SECTION 8.09.	Successor Trustee by Merger, Etc.	90
SECTION 8.10.	Eligibility; Disqualification	91
SECTION 8.11.	Preferential Collection of Claims	91
	Against the Issuers
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01.	Satisfaction and Discharge	91
SECTION 9.02.	Legal Defeasance and Covenant Defeasance	92
SECTION 9.03.	Conditions to Legal Defeasance	93
	or Covenant Defeasance
SECTION 9.04.	Application of Trust Money	94
SECTION 9.05.	Repayment to the Issuers	95
SECTION 9.06.	Reinstatement	95

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		Page
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01.	Without Consent of Holders	95
SECTION 10.02.	With Consent of Holders	96
SECTION 10.03.	Compliance with the Trust Indenture Act	98
SECTION 10.04.	Revocation and Effect of Consents	98
SECTION 10.05.	Notation on or Exchange of Notes	99
SECTION 10.06.	Trustee To Sign Amendments, Etc.	99
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01.	Guarantee	99
SECTION 11.02.	Limitation on Guarantor Liability	101
SECTION 11.03.	Additional Amounts	101
SECTION 11.04.	Execution and Delivery of Guarantee	103
SECTION 11.05.	Release of a Subsidiary Guarantor	104
SECTION 11.06.	Release of Guarantees of Parent Guarantors and Fall-Away of	105
	Covenants of Parent
SECTION 11.07.	No Waiver	106
SECTION 11.08.	Modification	107
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01.	Trust Indenture Act Controls	107
SECTION 12.02.	Notices	107
SECTION 12.03.	Communications by Holders with Other Holders	108
SECTION 12.04.	Certificate and Opinion	108
	as to Conditions Precedent
SECTION 12.05.	Statements Required in Certificate or Opinion	109
SECTION 12.06.	Rules by Paying Agent or Registrar	109
SECTION 12.07.	Judgment Currency	109
SECTION 12.08.	Legal Holidays	109
SECTION 12.09.	Governing Law; Submission	109
	to Jurisdiction; Waiver of Immunity
SECTION 12.10.	Waiver of Jury Trial	110
SECTION 12.11.	No Adverse Interpretation of Other Agreements	111
SECTION 12.12.	No Personal Liability of Directors, Officers, Employees and	111
	Stockholders
SECTION 12.13.	Successors	111
SECTION 12.14.	Duplicate Originals	111
SECTION 12.15.	Severability

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		Page
SECTION 12.16.	English Language	111
SIGNATURES		S-1

Exhibit A	-	Form of Note
Exhibit B	-	Form of Legends
Exhibit C	-	Form of Certificate To Be Delivered in Connection with
		Transfers to Non-QIB Accredited Investors
Exhibit D	-	Form of Certificate To Be Delivered in Connection with Transfers
		Pursuant to Regulation S
Exhibit E	-	Form of Certificate To Be Delivered in Connection with Transfers
		of Temporary Regulation S Global Note
Exhibit F	-	Form of Notation of Guarantee
Note: This Table of Contents shall not, for any purpose, be deemed to be part of this Indenture.

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INDENTURE dated as of April 27, 2009 among JBS USA, LLC, a Delaware limited liability company (the “Company”), JBS USA FINANCE, INC., a Delaware corporation (the “Co-Issuer” and, together with the Company, the “Issuers”), each of the Guarantors party hereto, as Guarantors, and THE BANK OF NEW YORK MELLON, a state banking corporation organized and existing under the laws of the State of New York authorized to conduct a banking business, as Trustee (the “Trustee”).

The Issuers have duly authorized the creation of an issue of 11.625% Senior Notes due 2014 and, to provide therefor, the Issuers and the Guarantors have duly authorized the execution and delivery of this Indenture. All things necessary to make the Notes (as defined below), when duly issued and executed by the Issuers and authenticated and delivered hereunder, the valid and binding obligations of the Issuers and to make this Indenture a valid and binding agreement of the Issuers and the Guarantors have been done.

THIS INDENTURE WITNESSETH

For and in consideration of the premises and the purchase of the Notes by the Holders (as defined below) thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

Set forth below are certain defined terms used in this Indenture.

“Acquired Debt,” of any Person, means Debt of such Person or any of its Restricted Subsidiaries existing at the time that Person becomes a Restricted Subsidiary of the Company or Parent, as applicable, or at the time it merges or consolidates with the Company or Parent, as applicable, or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from that Person.

“Additional Assets” means:

(1) any property, plant or equipment or other long-term tangible assets or intellectual property used or useful in a Related Business;

(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that any such Restricted Subsidiary in clause (2) or (3) above is primarily engaged in a Related Business.

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent” means any Registrar or Paying Agent.

“amend” means to amend, supplement, restate, amend and restate or otherwise modify, including successively; and “amendment” shall have a correlative meaning.

“Asset Sale” means any sale, lease (other than operating leases entered into in the ordinary course of business), transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions that are part of a common plan) of shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Company or any of its Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction) other than:

(1) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(2) a disposition of inventory in the ordinary course of business;

(3) a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;

(4) a disposition or a series of related dispositions of property with a Fair Market Value of less than $1.0 million;

(5) for purposes of Section 4.11 only, (x) the making of any Restricted Payment or Permitted Investment that is permitted to be made and is made under Section 4.09 and (y) a disposition of all or substantially all the assets of the Company in accordance with Sections 4.07 and 6.01;

(6) licenses or similar agreements with respect to intellectual property or other general intangibles owned or licensed by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(7) a disposition of cash or Cash Equivalents in the ordinary course of business;

(8) a Sale and Leaseback Transaction otherwise permitted by Section 4.14;

(9) pro rata dispositions of property to joint venture partners in connection with the dissolution or other termination of a joint venture;

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(10) a transfer resulting from a casualty or condemnation of assets;

(11) any sale or disposition deemed to occur in connection with creating or granting any Liens (but not the sale or other disposition of the property subject to such Lien); and

(12) any surrender or waiver of contract rights or the settlement, release or surrender of a contract, tort or other claim of any kind.

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at any date of determination:

(1) if such Sale and Leaseback Transaction is a Capitalized Lease Obligation, the amount of Debt represented thereby according to the definition of “Capitalized Lease Obligation”; and

(2) in all other instances the present value (discounted at the interest rate borne by the Notes, compounded semi-annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended).

“Bankruptcy Law” means Title 11 of the United States Code, as amended, or any similar federal, state or foreign law for the relief of debtors.

“Batista Family” includes José Batista Sobrinho, together with his wife, sons and daughters, or any of their respective heirs.

“Board of Directors” means:

(1) with respect to a corporation, the Board of Directors of the corporation;

(2) with respect to a partnership, the Board of Directors or similar board or committee or Person serving a similar function of the managing general partner of the partnership; and

(3) with respect to any other Person, the board or committee of that Person or any Person serving a similar function.

“Brazilian GAAP” means generally accepted accounting principles in Brazil, which are based on the Brazilian Corporate Law, the rules and regulations of the Brazilian Securities Commission and the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dos Auditores Independentes do Brasil (IBRACON)) (whether or not Parent or any of its Subsidiaries or Affiliates is otherwise subject to such rules). It is understood and agreed that International Financial Reporting Standards may be deemed to qualify as Brazilian GAAP. All ratios and computations, with respect to Parent and its Subsidiaries, for purposes of Article Five based on Brazilian GAAP contained in this Indenture shall be computed in conformity with Brazilian GAAP as in effect as of August 4, 2006.

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“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions in New York are authorized or required by law to close.

“Capital Stock” means:

(1) with respect to any Person that is a corporation, any and all shares of corporate stock of that Person;

(2) with respect to any Person that is an association or business entity, any and all shares, interests, participations, rights or other equivalents, however designated, of capital stock of that Person;

(3) with respect to any Person that is a partnership or limited liability company, any and all partnership or membership interests, whether general or limited, of that Person; and

(4) with respect to any other Person, any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Capitalized Lease Obligation” means, as to any Person, the obligation of such Person to pay rent or other amounts under a lease to which such Person is a party that is required to be classified and accounted for as a capital lease obligation under GAAP, and for purposes of this definition, the amount of such obligation at any date shall be the capitalized amount of such obligation at such date, determined in accordance with GAAP.

“Cash Equivalents” means any of the following:

(1) any Investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof and maturing within one year of acquisition thereof;

(2) Investments in eurodollar time deposits, time deposit accounts, certificates of deposit and money market deposits maturing within 360 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital, surplus and undivided profits aggregating in excess of $250 million and whose long-term debt, or whose parent holding company’s long-term debt, is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);

(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types in clause (1) above entered into with a bank meeting the qualifications in clause (2) above;

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(4) Investments in commercial paper, maturing not more than 360 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to S&P;

(5) Investments in securities maturing not more than 360 days after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s;

(6) Investments in mutual funds whose investment guidelines restrict substantially all of such funds’ investments to those satisfying the provisions of clauses (1) through (5) above; and

(7) in the case of any Foreign Subsidiary, investments denominated in the currency of the jurisdiction in which such Foreign Subsidiary is organized or has its principal place of business which are similar to the items specified in clauses (1) through (6) of this definition and are used in the ordinary course of business by similar companies for cash management purposes in the relevant jurisdiction.

“Change of Control” means the occurrence of any of the following events:

(1) any sale, lease, exchange or other transfer, in one transaction or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any Person or Group (whether or not otherwise in compliance with the provisions of this Indenture), other than to one or more of the Permitted Holders;

(2) Parent ceases to own, directly or indirectly through Subsidiaries, securities representing more than 50% of the total voting power of the Company’s Voting Stock;

(3) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of this Indenture); or

(4) the Permitted Holders shall, directly or indirectly, cease to have the power to direct or cause the direction of the management and policies of Parent, whether through the ownership of voting securities, by contract or otherwise.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto.

“Commission” means the Securities and Exchange Commission.

“Commodity Agreement” means any commodity futures contract, commodity option or similar agreement or arrangement designed to protect against fluctuations in the price of commodities used at the time in the ordinary course of business.

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“Company Net Debt” means, with respect to the Company and its Restricted Subsidiaries, as of any date of determination, the aggregate amount of Debt less the sum of (without duplication) cash and Cash Equivalents and marketable securities recorded as Current Assets in accordance with U.S. GAAP (except for any Equity Interests in any Person); provided that Net Debt shall include the aggregate principal amount of the Existing Parent 2016 Notes and any other Debt of Parent guaranteed by the Company or any of its Restricted Subsidiaries pursuant to clause (16)(ii) of the definition of “Permitted Investments.”

“Company Net Debt to EBITDA Ratio” means as of any date of determination (the “Calculation Date”), the ratio of:

(1) Company Net Debt as of the Calculation Date, to

(2) Consolidated EBITDA for the Company and its Restricted Subsidiaries for the period of the most recent four consecutive fiscal quarters ending on or prior to the Calculation Date for which internal financial statements are available.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations, restructurings, joint ventures and discontinued operations that are made by the Company or any of its Restricted Subsidiaries during the four-quarter reference period or subsequent to the end of such reference period and on or prior to the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations, restructurings, joint ventures and discontinued operations had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person (that subsequently became a Restricted Subsidiary of or was merged with or into any Restricted Subsidiary since the beginning of such period) shall have made any Investment, acquisition, disposition, merger, consolidation, restructuring, joint venture or discontinued operation that would have required adjustment pursuant to this definition, then the Company Net Debt to EBITDA Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, restructuring, joint venture or discontinued operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to any acquisition of assets, other Investment or other transaction, or the amount of income or earnings relating thereto, the pro forma calculations in respect thereof shall be as determined in good faith by a responsible financial or accounting officer of the Company.

“Consolidated EBITDA” means, with respect to any Person and its Restricted Subsidiaries for any period, without duplication, an amount equal to:

(1) Consolidated Net Income for such period, determined in accordance with GAAP, minus

(2) the sum of:

(a) income tax credits;

(b) interest income;

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(c) gain from extraordinary items;

(d) any aggregate net gain (but not any aggregate net loss) arising from the sale, exchange or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); and

(e) any other non-cash gains that have been added in determining Consolidated Net Income;

in each case to the extent included in the calculation of Consolidated Net Income of such Person in accordance with GAAP, but without duplication, plus

(3) the sum of:

(a) any provision for income taxes;

(b) Consolidated Interest Expense;

(c) loss from extraordinary items;

(d) depreciation and amortization;

(e) any aggregate net loss (but not any aggregate net gain) arising from the sale, exchange or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible);

(f) amortized debt discount;

(g) the amount of any deduction to Consolidated Net Income as the result of any grant to any members of the management of such Person or its Restricted Subsidiaries of any Equity Interests; and

(h) any other non-cash losses that have been deducted in determining Consolidated Net Income (other than non-cash losses related to write-downs or write-offs of accounts receivable or inventory);

in each case to the extent included in the calculation of Consolidated Net Income of such Person in accordance with GAAP, but without duplication.

For purposes of this definition, the following items shall be excluded in determining Consolidated Net Income:

(1) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period;

(2) any write-up of any asset (other than any write-up of inventory made in the ordinary course of business in accordance with GAAP);

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(3) any net gain from the collection of the proceeds of life insurance policies;

(4) any net gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Debt;

(5) in the case of a successor to such Person or any of its Restricted Subsidiaries by consolidation or merger or as a transferee of its assets, any earnings of such successor prior to such consolidation, merger or transfer of assets; and

(6) any deferred credit representing the excess of equity in any Subsidiary of such Person at the date of acquisition of such Subsidiary over the cost to such Person of the investment in such Subsidiary.

“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication of:

(1) consolidated interest expense of that Person and its Restricted Subsidiaries for that period, to the extent such expense was deducted in computing Consolidated Net Income, including (or plus, to the extent not included in such consolidated interest expense):

(a) amortization of debt discount;

(b) the interest component of Capitalized Lease Obligations;

(c) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

(d) interest actually paid by that Person or any of its Restricted Subsidiaries under any guarantee of Debt or other obligation of any other Person;

(e) interest expense on Debt guaranteed by the Company or any of its Restricted Subsidiaries pursuant to subclause (ii) of clause (16) of the definition of “Permitted Investments” (whether or not such interest is paid by the Company or any of its Restricted Subsidiaries);

(f) net payments (whether positive or negative) pursuant to Interest Rate Protection Agreements;

(g) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Debt Incurred by that plan or trust; and

(h) cash and Disqualified Capital Stock dividends in respect of all Preferred Stock of Restricted Subsidiaries and Disqualified Capital Stock of such Person held by Persons other than such Person or a Wholly Owned Subsidiary; provided, however, that such dividends shall be multiplied by a fraction, the

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numerator of which is one and the denominator of which is one minus the effective combined tax rate of the issuer of such Preferred Stock or Disqualified Capital Stock (expressed as a decimal) for such period (as estimated by the chief financial officer of such Person in good faith);

(2) [Reserved]; and

(3) consolidated capitalized interest of such Person and its Restricted Subsidiaries for that period, whether paid or accrued.

“Consolidated Net Income” means, with respect to any Person for any period, the net income (loss) of such Person and its consolidated Restricted Subsidiaries, determined in accordance with GAAP (adjusted to reflect any charge, tax or expense incurred or accrued by such Person’s direct parent during such period as though such charge, tax or expense had been incurred by such Person, to the extent that such Person has made or would be entitled under this Indenture to make any payment to or for the account of such Person’s direct parent in respect thereof); provided that there shall be excluded (a) the income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by the Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Restricted Subsidiary, (b) the income or loss of any other Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with such Person or any Restricted Subsidiary or the date that such other Person’s assets are acquired by such Person or any Restricted Subsidiary and (c) the income of any other Person in which any other Person (other than such Person or a Wholly Owned Subsidiary or any director holding qualifying shares in accordance with applicable law) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or a Wholly Owned Restricted Subsidiary by such other Person during such period.

“Consolidated Tangible Assets” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of such Person and its consolidated Restricted Subsidiaries as the total assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) of such Person and its Restricted Subsidiaries, after giving effect to purchase accounting and after deducting therefrom, to the extent otherwise included, the amounts of (without duplication):

(1) the excess of cost over Fair Market Value of assets or businesses acquired;

(2) any revaluation or other write-up in book value of assets subsequent to the last day of the fiscal quarter of such Person immediately preceding the Issue Date as a result of a change in the method of valuation in accordance with GAAP;

(3) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items;

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(4) minority interests in consolidated Subsidiaries held by Persons other than such Person or any of its Restricted Subsidiaries;

(5) treasury stock;

(6) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock; and

(7) Investments in and assets of Unrestricted Subsidiaries.

“Control Person” means any Person who (i) owns, directly or indirectly, more than 50% of the outstanding Voting Stock of Parent or (ii) has, directly or indirectly, the power to direct or cause the direction of the management and policies of Parent, whether through the ownership of voting securities, by contract or otherwise.

“Corporate Trust Office” means the corporate trust office of the Trustee located at 101 Barclay Street, 4^th Floor East, New York, NY 10286, Attention: Corporate Trust Department, or such other office, designated by the Trustee by written notice to the Company, at which at any particular time its corporate trust business shall be administered.

“Credit Facilities” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, the Revolving Credit Agreement) or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any indentures or credit facilities or commercial paper facilities that replace, refund or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders.

“Currency Protection Agreement” means any currency protection agreement entered into with one or more financial institutions in the ordinary course of business that is designed to protect the Person or entity entering into the agreement against fluctuations in currency exchange rates with respect to Debt Incurred and not for purposes of speculation.

“Current Assets” means (i) with respect to the Company, the total current assets of the Company and its Restricted Subsidiaries and (ii) with respect to Parent, the total current assets of Parent and its Subsidiaries, in each case, on a consolidated basis in accordance with GAAP.

“Current Liabilities” means, with respect to any Person, the total current liabilities of such Person and its Subsidiaries on a consolidated basis prepared in accordance with GAAP.

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“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“Debt” means, with respect to any Person on any date of determination, without duplication, any indebtedness of that Person:

(1) for borrowed money (but only with regard to the principal of and premium (if any) in respect of such borrowed money);

(2) evidenced by bonds, debentures, notes or other similar instruments;

(3) constituting Capitalized Lease Obligations and all Attributable Debt in respect of Sale and Leaseback Transactions;

(4) Incurred or assumed as the deferred and unpaid purchase price of property or services, or pursuant to conditional sale obligations and title retention agreements (but excluding trade accounts payable and accrued expenses arising in the ordinary course of business), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services;

(5) for reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction;

(6) for Debt of other Persons to the extent guaranteed by such Person;

(7) for Hedging Obligations;

(8) for Debt of any other Person of the type referred to in clauses (1) through (7) which is secured by any Lien on any property or asset of such first referred to Person, the amount of such Debt being deemed to be the lesser of the value of the property or asset underlying the Lien or the amount of the Debt so secured; and

(9) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Capital Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person that is not held by such Person or a Restricted Subsidiary of such Person, the greater of the maximum liquidation value of such Preferred Stock or the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock (but excluding, in each case, any accrued dividends).

The amount of Debt of any Person at any date shall be:

(a) the sum of (i) the outstanding principal amount of all unconditional obligations described above, as such amount would be reflected on a balance sheet prepared in accordance with GAAP, and (ii) the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; and

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(b) the accreted value of that Debt, in the case of any Debt issued with original issue discount.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Depository” means The Depository Trust Company, New York, New York, or a successor thereto registered under the Exchange Act or other applicable statute or regulation.

“Disposition” means, with respect to any Person, any merger, consolidation or other business combination involving such Person (whether or not such Person is the Surviving Person) or the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of such Person’s assets or Capital Stock.

“Disqualified Capital Stock” means any Capital Stock that, by its terms or by the terms of any security into which it is convertible or for which it is exchangeable, or upon the happening of any event,

(1) matures (excluding any maturity as the result of an optional redemption by the issuer of that Capital Stock);

(2) is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise; or

(3) is redeemable at the sole option of its holder,

in whole or in part, on or prior to the first anniversary of the Maturity Date; provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable or is so redeemable at the sole option of its holder prior to the Maturity Date shall be deemed Disqualified Capital Stock.

“Domestic Restricted Subsidiary” means a Restricted Subsidiary that is not a Foreign Subsidiary.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Debt” means Debt (i) outstanding on the Issue Date or (ii) incurred under commitments in effect on the Issue Date under revolving credit facilities disclosed in the Offering Memorandum (other than under the Revolving Credit Agreement).

“Existing Parent Notes” means the Existing Parent 2011 Notes and the Existing Parent 2016 Notes.

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“Existing Parent 2011 Notes” means Parent’s $275.0 million 9.375% Senior Notes due 2011 outstanding on the date of the Offering Memorandum.

“Existing Parent 2016 Notes” means Parent’s $300.0 million 10.50% Senior Notes due 2016 outstanding on the date of the Offering Memorandum.

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined in good faith by such Person’s Board of Directors or (unless context requires determination by the Board of Directors only) senior management, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors or an Officer’s Certificate, as applicable.

“Foreign Restricted Subsidiary” means a Restricted Subsidiary that is a Foreign Subsidiary.

“Foreign Subsidiary” means any Subsidiary which is not organized under the laws of the United States of America or any State thereof or the District of Columbia.

“GAAP” means, as used in the definitions of “Capitalized Lease Obligation,” “Current Assets,” “Current Liabilities,” “Debt,” “Incur” and “Subsidiary,” with respect to financial calculations with respect to (i) the Company and its Subsidiaries for purposes of the covenants described in Article Four, U.S. GAAP and (ii) Parent and its Subsidiaries for purposes of Article Five, Brazilian GAAP.

“Global Notes” has the meaning given to such term in Section 2.01.

“Group” means a group of related Persons for purposes of Section 13(d) of the Exchange Act.

“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof), of all or any part of any Debt. The term “guarantee” used as a verb has a corresponding meaning.

“Guarantee” means the guarantee by each Guarantor of the Issuers’ payment obligations under this Indenture and the Notes.

“Guarantors” means (1) each Parent Guarantor, (2) each of the Company’s Domestic Restricted Subsidiaries existing as of the date of this Indenture (other than the Co-Issuer and the Specified Subsidiary) and (3) each of the Company’s Restricted Subsidiaries that in the future executes a supplemental indenture in which such Person agrees to be bound by the terms of this Indenture as a Guarantor; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of this Indenture.

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“Hedging Obligations” means, with respect to any specified entity, the obligations of that entity under:

(1) any Interest Rate Protection Agreement;

(2) foreign exchange contracts and Currency Protection Agreements;

(3) any Commodity Agreement; and

(4) other agreements or arrangements entered into in the ordinary course of business and designed to protect that entity against fluctuations in interest rates, currency exchange rates or commodity prices.

“Holder” means any registered holder, from time to time, of the Notes.

“Holdings” means JBS USA Holdings, Inc., a Delaware corporation.

“Incur” means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by merger, conversion, exchange or otherwise), extend, assume, guarantee or become liable in respect of such Debt or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Debt or obligation on the balance sheet of such Person (and “Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time, and is not theretofore classified as Debt, becoming Debt shall not be deemed an Incurrence of such Debt; provided further, however, that any Debt or other obligations of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) or merges into such other Person shall be deemed to be incurred by such Subsidiary or such other Person, as the case may be, at the time it becomes a Subsidiary or at the time of the merger. Solely for purposes of determining compliance with Sections 4.08 and 5.02, the following shall not be deemed to be the Incurrence of Debt:

(1) amortization of debt discount or the accretion of principal with respect to a non-interest-bearing or other discount security,

(2) the payment of regularly scheduled interest in the form of additional Debt of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms, and

(3) the obligation to pay a premium in respect of Debt arising in connection with the issuance of a notice of redemption or the making of a mandatory offer to purchase such Debt.

“Indenture” means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof.

“Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the judgment of such Person’s Board of Directors, qualified to perform the task for which it has been engaged and is not an Affiliate of the Company.

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“Initial Purchasers” means (i) with respect to the Notes issued on the Issue Date, J.P. Morgan Securities Inc., Banc of America Securities LLC, ING Financial Markets LLC, Rabo Securities USA, Inc., BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC and BB Securities Ltd. and (ii) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related purchase agreement.

“Institutional Accredited Investor” or “IAI” means an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

“interest” means, with respect to the Notes, interest and Special Interest, if any, on the Notes.

“Interest Payment Date” means the stated maturity of an installment of interest on the Notes.

“Interest Rate Protection Agreement” means, with respect to any Person, any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which that Person is a party or beneficiary.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business) or other extension of credit (including by way of guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to other Persons or any payment for property or services for the account or use of other Persons), or any purchase or acquisition for value of Capital Stock, Debt or other similar instruments issued by, such Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted Subsidiary in such Person remaining after giving effect thereto shall be deemed to be a new Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be its Fair Market Value at the time the Investment is made and without giving effect to subsequent changes in value.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or equivalent) by Moody’s and BBB- (or equivalent) by S&P, or an equivalent rating by any other Rating Agency.

“Issue Date” means April 27, 2009, the date on which the Notes are first issued.

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“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Maturity Date” means May 1, 2014.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business of Moody’s Investors Service, Inc.

“Net Available Cash” from an Asset Sale means cash or Cash Equivalents received, including any payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Debt or other obligations relating to the properties or assets subject to that Asset Sale, from that Asset Sale, in each case net of

(1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all U.S. federal, state, foreign and local taxes required to be paid or accrued as a liability under GAAP in connection with such Asset Sale;

(2) all payments required to be made, and made, on any Debt which is secured by any assets subject to such Asset Sale, other than the Credit Facilities, in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order to obtain a necessary consent to the Asset Sale, or by applicable law, be repaid out of the proceeds from the Asset Sale;

(3) all distributions and other payments required to be made to any Person owning a beneficial interest in assets subject to sale or minority interest holders in Subsidiaries or joint ventures as a result of the Asset Sale;

(4) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with U.S. GAAP, against any liabilities associated with the assets disposed of in the Asset Sale and retained by the Company or any Restricted Subsidiary of the Company after that Asset Sale; and

(5) any portion of the purchase price from an Asset Sale placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Sale or otherwise in connection with that Asset Sale; provided, however, that upon the termination of that escrow, Net Available Cash shall be increased by any portion of funds in the escrow that are released to the Company or any Restricted Subsidiary.

“Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Debt, means the cash proceeds of such issuance or sale, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale.

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“Non-Recourse Debt” means Debt:

(1) as to which neither the Company nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Debt), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and

(2) no default with respect to which would permit upon notice, lapse of time or both any holder of any Debt of the Company or any Restricted Subsidiary to declare a default on such Debt or cause the payment of the Debt to be accelerated or payable prior to its stated maturity.

“Non-U.S. Person” has the meaning assigned to such term in Regulation S.

“Notes” means, collectively, the Issuers’ 11.625% Senior Notes due 2014 issued in accordance with Section 2.02 (whether issued on the Issue Date or thereafter issued) treated as a single class of securities under this Indenture, as amended or supplemented from time to time in accordance with the terms of this Indenture.

“Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing any Debt.

“Offering Memorandum” means the offering memorandum of the Issuers relating to the Notes dated April 22, 2009.

“Officer” means any of the following of an Issuer or a Guarantor, as applicable: the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer, the Secretary or Special Bond Secretary.

“Officer’s Certificate” means a certificate signed by an Officer of the Company, each of the Issuers or Parent, as applicable.

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of, or counsel to, the Company, the Co-Issuer, a Guarantor or the Trustee.

“Parent” means JBS S.A., a sociedade anônima organized under the laws of Brazil.

“Parent EBITDA” means, for any period, as to Parent and its Subsidiaries, on a consolidated basis:

(1) aggregate net income (or loss); plus

(2) current and deferred income tax and social contribution; minus

(3) non-operating income (expense), net; plus

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(4) equity in the earnings (loss) of subsidiary companies; plus

(5) financial income (expenses), net; plus

(6) any depreciation or amortization;

as each such item is reported on the most recent financial statements or financial information delivered by the Company to the Trustee and prepared in accordance with Brazilian GAAP.

“Parent Guarantors” means (i) Parent, (ii) Holdings, (iii) JBS Hungary Holdings Kft., and (iv) any other Subsidiary of Parent that delivers a Guarantee in accordance with Section 4.16(b).

“Parent Net Debt” means, with respect to Parent and its Subsidiaries, as of any date of determination, the aggregate amount of Debt less the sum of (without duplication) cash and Cash Equivalents and marketable securities recorded as Current Assets in accordance with Brazilian GAAP (except for any Capital Stock in any Person).

“Parent Net Debt to EBITDA Ratio” means, with respect to Parent and its Subsidiaries at any time, the ratio of:

(a) Parent Net Debt at that time to

(b) Parent EBITDA for the then most recently concluded period of four consecutive fiscal quarters for which financial statements are publicly available (the “Reference Period”);

provided, however, that in making the foregoing calculation:

(i) pro forma effect will be given to any Debt Incurred during or after the Reference Period to the extent the Debt is outstanding or is to be Incurred on the transaction date as if the Debt had been Incurred on the first day of the Reference Period; and

(ii) pro forma effect will be given to:

(a) the acquisition or disposition of companies, divisions or lines of businesses by Parent and its Subsidiaries, including any acquisition or disposition of a company, division or line of business during or after the Reference Period by a Person that became a Subsidiary during or after the Reference Period; and

(b) the discontinuation of any discontinued operations;

in each case, that have occurred during or after the Reference Period as if such events had occurred and, in the case of any disposition, the proceeds thereof had been applied on the first day of the Reference Period.

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“Permitted Holders” means (i) any member of the Batista Family or any Affiliate or Affiliates of any of the foregoing and (ii) any Person the Voting Stock of which (or in the case of a trust, the beneficial interest in which) is at least 51% owned by Persons specified in clause (i).

“Permitted Investments” means an Investment by the Company or any of its Restricted Subsidiaries in:

(1) cash or Cash Equivalents;

(2) an Investment existing on the Issue Date;

(3) receivables owing to the Company or any of its Restricted Subsidiaries, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms, including any receivables from livestock suppliers;

(4) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(5) loans and advances to officers, directors or employees of or independent contractors to the Company or any of its Restricted Subsidiaries made in the ordinary course of business in an aggregate amount outstanding at any one time not to exceed $5.0 million;

(6) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any of its Restricted Subsidiaries or in satisfaction of judgments or claims or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;

(7) Hedging Obligations permitted under clause (5) of the definition of “Permitted Debt”;

(8) other Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments made pursuant to this clause (8), in an aggregate amount at any time outstanding not to exceed $85.0 million;

(9) Persons to the extent such Investment is received by the Company or any Restricted Subsidiary as non-cash consideration for Asset Sales effected in compliance with Section 4.11;

(10) prepayments and other credits to suppliers made in the ordinary course of business;

(11) Investments in connection with pledges, deposits, payments or performance bonds made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations;

(12) [Reserved];

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(13) the Company or a Restricted Subsidiary;

(14) another Person if as a result of such Investment such other Person becomes a Restricted Subsidiary or is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary;

(15) prior to the Fall-Away Event, any loan or advance to Parent or any of its Subsidiaries; provided that any loans or advances made pursuant to this clause (15) shall reduce, by a corresponding amount, the amounts available (x) first, for Restricted Payments in Section 4.09(b)(7) until the amount available thereunder shall be zero, (y) second, for Investments under clause (8) above, until the amount available thereunder shall be zero, and (z) third, for the amount calculated in Section 4.09(a)(3); provided, further, that if any loan or advance is made to any Unrestricted Subsidiary pursuant to this clause (15), such Unrestricted Subsidiary shall automatically be deemed to have been redesignated a Restricted Subsidiary as set forth in Section 4.15 and if the conditions set forth in Section 4.15(c) for such redesignation are not met at such time, the Company shall be in default under this Indenture; and

(16) prior to the Fall-Away Event, (i) guarantees permitted by clause (17) of the definition of “Permitted Debt” and (ii) guarantees of other Debt Incurred by Parent after the Issue Date.

“Permitted Liens” means:

(1) Liens to secure Debt incurred under clause (2) of the definition of “Permitted Debt”;

(2) Liens on the Capital Stock or assets of any Foreign Subsidiary to secure Debt incurred by such Foreign Subsidiary;

(3) Liens to secure Debt permitted to be Incurred under clause (12) of the definition of “Permitted Debt”; provided that any such Lien may not extend to any property of the Company or any Restricted Subsidiary, other than the property acquired, constructed or leased with the proceeds of such Debt, and such Liens secure Debt in an amount not in excess of the original purchase price or the original cost of any such property and any improvements or accessions to such property;

(4) Liens for taxes, assessments or governmental charges or levies on the property of the Company or any Restricted Subsidiary if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings promptly instituted and diligently concluded;

(5) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, on the property of the Company or any Restricted Subsidiary arising in the ordinary course of business and securing payment of obligations that are not more than 60 days past due or are being contested in good faith and by appropriate proceedings;

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(6) Liens on the property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole;

(7) Liens on property or assets of, or any shares of stock or secured debt of, any Person at the time the Company or any Restricted Subsidiary acquired such property or the Person owning such Property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that any such Lien may not extend to any other property of the Company or any Restricted Subsidiary; provided further, however, that such Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such property was acquired by the Company or any Restricted Subsidiary;

(8) Liens on the property of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that any such Lien may not extend to any other property of the Company or any other Restricted Subsidiary that is not a direct Subsidiary of such Person; provided further, however, that any such Lien was not Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Restricted Subsidiary;

(9) pledges or deposits by the Company or any Restricted Subsidiary under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Restricted Subsidiary is party, or deposits to secure public or statutory obligations of the Company, or deposits for the payment of rent, in each case Incurred in the ordinary course of business;

(10) utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character;

(11) Liens securing Hedging Obligations;

(12) Liens existing on the Issue Date not otherwise described in clauses (1) through (11) above;

(13) Liens on the property of the Company or any Restricted Subsidiary to secure any refinancing, refunding, extension, renewal or replacement, in whole or in part, of any Debt secured by Liens referred to in clause (3), (7), (8) or (12) above or pursuant to this clause (13); provided, however, that any such Lien shall be limited to all or part of

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the same property that secured the original Lien (together with improvements and accessions to such property) and the aggregate principal amount of Debt that is secured by such Lien shall not be increased to an amount greater than the sum of:

(a) the outstanding principal amount, or, if greater, the committed amount, of the Debt secured by Liens referred to in clause (3), (7), (8) or (12) above, as the case may be, at the time the original Lien became a Permitted Lien under this Indenture; and

(b) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, incurred by the Company or such Restricted Subsidiary in connection with such refinancing, refunding, extension, renewal or replacement; and

(14) Liens not otherwise permitted by clauses (1) through (13) above securing obligations in an aggregate amount at any time outstanding not in excess of the greater of (x) $325.0 million and (y) 12.5% of Consolidated Tangible Assets at the time of any incurrence of an obligation secured by a Lien in reliance on this clause (14).

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Plan of Liquidation” with respect to any Person means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.

“Preferred Stock” of any Person means any Capital Stock of that Person that has preferential rights to any other Capital Stock of that Person with respect to dividends or redemptions or upon liquidation.

“principal” means, with respect to the Notes, the principal of and premium, if any, on the Notes.

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

“Qualified Institutional Buyer” or “QIB” shall have the meaning specified in Rule 144A under the Securities Act.

“Rating Agency” means S&P and Moody’s or, if S&P or Moody’s or both shall not make a rating on the Notes publicly available, a U.S. nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Moody’s or both, as the case may be.

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“Raw Material Supply Note” means the $173.0 million promissory note issued by Holdings described in the Offering Memorandum under “Description of other indebtedness of JBS USA, LLC—Raw material supply note.”

“Record Date” means the applicable record date specified in the Notes, which such date need not be a Business Day.

“Redemption Date,” when used with respect to any Note to be redeemed, means the date fixed for such redemption pursuant to this Indenture and the Notes.

“Redemption Price,” when used with respect to any Note to be redeemed, means the price fixed for such redemption, payable in immediately available funds, pursuant to this Indenture and the Notes.

“refinance” means to refinance, repay, prepay, replace, renew or refund, including successively.

“Refinancing Debt” means any Debt that is Incurred by the Company or any Restricted Subsidiaries to refund, refinance, replace, renew, repay or extend any Debt Incurred in accordance with Section 4.08 that does not:

(1) result in an increase in the aggregate principal amount of Debt (such principal amount to include, for purposes of this definition only, any premiums, fees, penalties or accrued interest paid with the proceeds of the Refinancing Debt) of the Company or that Restricted Subsidiary; or

(2) create Debt with:

(a) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Debt being refinanced; or

(b) a final maturity earlier than the final maturity of the Debt being refinanced;

provided that (i) in the event the Debt being refunded, refinanced, renewed, repaid or extended is Subordinated Debt, the Refinancing Debt must also be Subordinated Debt, (ii) in the event the obligor on the Debt being refunded, refinanced, renewed, repaid or extended is an Issuer or a Subsidiary Guarantor, the Refinancing Debt may only be Incurred by an Issuer or a Subsidiary Guarantor and (iii) in the event that the Debt being refunded, refinanced, renewed, repaid or extended is a guarantee, the Refinancing Debt shall be a guarantee.

“Regulation S” means Regulation S under the Securities Act.

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“Related Business” means any business which is the same as or related, ancillary or complementary to any of the businesses of the Company or its Restricted Subsidiaries on the Issue Date.

“Responsible Officer” means, when used with respect to the Trustee, any officer in the Corporate Trust Office of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject and shall also mean any officer who shall have direct responsibility for the administration of this Indenture.

“Restricted Payment” means:

(1) the declaration or payment of any dividend or the making of any other distribution (other than dividends or distributions payable solely in Qualified Capital Stock of the Company or in options, rights or warrants to acquire such Qualified Capital Stock) on shares of the Company’s Capital Stock;

(2) the declaration or payment of any dividend or the making of any other distribution on shares of the Capital Stock of a Restricted Subsidiary to any Person (other than (a) to the Company or any of its Wholly Owned Restricted Subsidiaries, (b) dividends or distributions made by a Restricted Subsidiary on a pro rata basis to all stockholders of such Restricted Subsidiary (or owners of an equivalent interest in the case of a Restricted Subsidiary that is not a corporation) or (c) dividends or distributions payable solely in its Qualified Capital Stock or in options, rights or warrants to acquire Qualified Capital Stock);

(3) the purchase, redemption, retirement or other acquisition for value of any Capital Stock of the Company or the Co-Issuer held by Persons other than the Company or a Restricted Subsidiary of the Company or any Capital Stock of a Restricted Subsidiary held by Persons other than the Company or another Restricted Subsidiary (in either case, other than in exchange for its Qualified Capital Stock or options, rights or warrants to acquire Qualified Capital Stock or to the extent that after giving effect to such purchase, redemption, retirement or acquisition, such Restricted Subsidiary would become a Wholly Owned Subsidiary);

(4) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Subordinated Debt of the Company or a Restricted Subsidiary (other than the purchase, repurchase or other acquisition of Subordinated Debt purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition); or

(5) the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Security” means a Note required to bear a Private Placement Legend pursuant to Article Two; provided, however, that the Trustee shall be entitled to request and conclusively rely on an Opinion of Counsel with respect to whether any Note constitutes a Restricted Security.

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“Restricted Subsidiary” means (i) when referring to a Subsidiary of the Company, any Subsidiary of the Company (including the Co-Issuer) other than an Unrestricted Subsidiary, and (ii) when referring to a Subsidiary of Parent in the definition of “Acquired Debt,” Restricted Subsidiary shall include and refer to all of the Subsidiaries of Parent.

“Revolving Credit Agreement” means the Credit Agreement, dated as of November 5, 2008, among JBS USA, LLC (as successor to JBS USA, Inc.), the credit parties signatory thereto, General Electric Capital Corporation, as administrative agent, and the lenders signatory thereto, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), as the same may be amended, supplemented or otherwise modified from time to time, including amendments, supplements or modifications relating to the addition or elimination of direct or indirect parents or Subsidiaries of the Company as borrowers, guarantors or other credit parties thereunder.

“Rule 144A” means Rule 144A under the Securities Act.

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., or any successor to the rating agency business thereof.

“Sale and Leaseback Transaction” means any direct or indirect arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to another Person and the Company or a Restricted Subsidiary leases it from such Person, other than transactions between the Company and its Restricted Subsidiaries or between Restricted Subsidiaries.

“Securities Act” means the Securities Act of 1933, as amended.

“Significant Subsidiary” of any Person, means any Restricted Subsidiary, or any group of Restricted Subsidiaries, if taken together as a single entity, that would be a “significant subsidiary” of such Person within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.

“Special Interest” means the additional interest, if any, to be paid on the Notes as described in Section 2.17.

“Specified Subsidiary” means JBS US Holding LLC, a Delaware limited liability company and, as of the Issue Date, the parent company of the Company’s Subsidiaries organized in Australia.

“Subordinated Debt” means any Debt, whether outstanding on the Issue Date or thereafter Incurred, which is subordinate or junior in right of payment to the Notes or the Guarantee, as the case may be, pursuant to a written agreement.

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“Subsidiary,” with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, through one or more intermediaries, by such Person or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, through one or more intermediaries, owned by such Person. Notwithstanding anything in this Indenture to the contrary, all references to any Person and its consolidated Subsidiaries or to financial information prepared on a consolidated basis in accordance with GAAP shall be deemed to include such Person and its Subsidiaries as to which financial statements are prepared on a consolidated basis in accordance with GAAP and to financial information prepared on such a consolidated basis.

“Subsidiary Guarantor” means any Guarantor which is a Subsidiary of the Company.

“Substantially Wholly Owned” means, with respect to any Subsidiary of a Person, a Subsidiary at least 90% of the outstanding Capital Stock of which (other than directors’ qualifying shares) is owned by such Person or one or more Wholly Owned Subsidiaries (or a combination thereof) of Parent.

“Surviving Person” means, with respect to any Person involved in or that makes any Disposition, the Person formed by or surviving such Disposition or the Person to which such Disposition is made.

“Tax” means any tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and any other liabilities related thereto).

“Taxing Authority” means any government or political subdivision or territory or possession of any government or any authority or agency therein or thereof having power to tax.

“Treasury Yield” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled by and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the date fixed for redemption or, if such statistical release is no longer published, any publicly available source of similar market data) most nearly equal to then remaining maturity of that Note. If the remaining maturity of such Note is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

“Trustee” means the party named as such in this Indenture until a successor replaces it in accordance with the provisions of this Indenture and thereafter means such successor.

“Unrestricted Subsidiary” means any direct or indirect Subsidiary of a Person (other than the Co-Issuer) that is designated by the Board of Directors of such Person as an Unrestricted Subsidiary, and any Subsidiary of that Unrestricted Subsidiary, pursuant to Section 4.15.

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“U.S. Dollar Equivalent” means, with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two business days prior to such determination.

“U.S. GAAP” means generally accepted accounting principles in the United States of America, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or the Commission or in such other statements by such other entity as approved by a significant segment of the accounting profession as may from time to time be in effect. It is understood and agreed that International Financial Reporting Standards may be deemed to qualify as U.S. GAAP. All ratios and computations with respect to the Company and its Subsidiaries for purposes of Article Four based on U.S. GAAP contained in this Indenture shall be computed in conformity with U.S. GAAP.

“U.S. Government Securities” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

“U.S. Legal Tender” means such coin or currency of the United States of America that at the time of payment shall be legal tender for the payment of public and private debts.

“Voting Stock” of any Person as of any date means the Capital Stock of that Person that is at the time entitled to vote in the election of that Person’s Board of Directors.

“Weighted Average Life to Maturity” means, when applied to any Debt at any date, the number of years obtained by dividing

(1) the then outstanding aggregate principal amount of such Debt into

(2) the total of the product obtained by multiplying

(a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof; by

(b) the number of years (calculated to the nearest one-twelfth) which shall elapse between such date and the making of such payment.

“Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary that is a Wholly Owned Subsidiary.

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“Wholly Owned Subsidiary” means a Subsidiary of any Person, all of the outstanding Capital Stock of which (other than any director’s qualifying shares or shares owned by foreign nationals to the extent mandated by applicable law) is owned by such Person or one or more Wholly Owned Subsidiaries of such Person.

SECTION 1.02. Other Definitions.

Term	Defined in Section
“144A Global Note”	2.01
“Additional Amounts”	11.03
“Additional Notes”	2.02
“Affiliate Transaction”	4.13
“Acquired Entity”	5.02
“Asset Sale Offer”	4.11
“Authentication Order”	2.02
“Calculation Date”	1.01
“Change of Control Offer”	4.07
“Change of Control Payment”	4.07
“Change of Control Payment Date”	4.07
“covenant defeasance”	9.02
“defeasance trust”	9.03
“Distributions”	5.03
“Event of Default”	7.01
“Excess Proceeds”	4.11
“Fall-Away Amendment”	11.06
“Fall-Away Baskets”	11.06
“Fall-Away Event”	11.06
“free transferability default”	2.17
“Global Notes”	2.01
“Guaranteed Obligations”	11.01
“Global Note Legend”	Exhibit B
“IAI Global Note”	2.01
“Initial Global Note”	2.01
“Initial Note”	2.02
“Initial Parent EBITDA”	5.02
“legal defeasance”	9.02
“Net Proceeds Deficiency”	4.11
“Net Proceeds Payment Date”	4.11
“New Debt”	5.02
“non-U.S. Guarantor”	11.03
“Offered Amount”	4.11
“Original Issue Discount Legend”	Exhibit B
“Pari Passu Debt”	4.11
“Pari Passu Debt Amount”	4.11
“Participants”	2.15
“Paying Agent”	2.03
“Payment Amount”	4.11
“Permitted Debt”	4.08

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“Permanent Regulation S Global Notes”	2.01
“Permitted Parties”	4.19
“Physical Notes”	2.01
“Private Placement Legend”	Exhibit B
“Recalculated Parent EBITDA”	5.02
“Reference Period”	1.01
“Registrar”	2.03
“Regulation S Global Note”	2.01
“Required Information”	4.19
“Reversion Date”	4.20
“Suspended Covenants”	4.20
“Suspension Date”	4.20
“Suspension Period”	4.20
“Taxing Jurisdiction”	11.03
“Temporary Regulation S Global Note”	2.01
“Temporary Regulation S Global Note Legend”	Exhibit B

SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the Trust Indenture Act, such provision is incorporated by reference in, and made a part of, this Indenture. The following Trust Indenture Act terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor” on the indenture securities means the Issuers, any Guarantor or any other obligor on the Notes.

All other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by Commission rule and not otherwise defined herein have the meanings assigned to them therein.

SECTION 1.04. Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

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(3) “or” is not exclusive;

(4) words in the singular include the plural, and words in the plural include the singular;

(5) provisions apply to successive events and transactions;

(6) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

(7) the words “including,” “includes” and similar words shall be deemed to be followed by “without limitation”; and

(8) “asset” or “property” shall be interchangeable.

ARTICLE TWO

THE NOTES

SECTION 2.01. Form and Dating.

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. The Issuers shall approve the form of the Notes and any notation, legend or endorsement on them. Each Note shall be dated the date of its issuance and show the date of its authentication. Each Note shall have an executed notation of Guarantee from each of the Guarantors existing on the Issue Date endorsed thereon substantially in the form of Exhibit F.

The terms and provisions contained in the Notes and the notation of Guarantee shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuers, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Notes offered and sold in reliance on Rule 144A shall be issued initially in the form of a single permanent global Note in registered form, substantially in the form set forth in Exhibit A (the “144A Global Note”), deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers (and having an executed notation of Guarantee from each of the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter provided and shall bear the Private Placement Legend and the Global Note Legend.

Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of a single temporary Global Note in registered form, substantially in form of Exhibit A (the “Temporary Regulation S Global Note”), deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers (and having an executed notation of Guarantee from each of the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter provided and shall bear the Private Placement Legend, the Global Note Legend and the Temporary Regulation S Global Note Legend. Reasonably promptly following the date that

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is 40 days after the later of the commencement of an offering of Notes in reliance on Regulation S and the issue date which such date shall be notified to the Trustee in writing by the Company, upon receipt by the Trustee and the Issuers of a duly executed certificate certifying that the holder of the beneficial interest in the Temporary Regulation S Global Note is a Non-U.S. Person, substantially in the form of Exhibit E, from the Depository, a single permanent global Note in registered form substantially in the form of Exhibit A (the “Permanent Regulation S Global Note,” and together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) duly executed by the Issuers (and having an executed notation of Guarantee from each of the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter provided and bearing the Global Note Legend; shall be deposited with the Trustee, as custodian for the Depository, and the Registrar shall reflect on its books and records the cancellation of the Temporary Regulation S Global Note and the issuance of the Permanent Regulation S Global Note.

The initial offer and resale of the Notes shall not be to an Institutional Accredited Investor. The Notes resold to Institutional Accredited Investors in connection with the first transfer made pursuant to Section 2.16(a) shall be issued initially in the form of a single permanent Global Note in registered form, substantially in the form set forth in Exhibit A (the “IAI Global Note,” and, together with the 144A Global Note and the Regulation S Global Note, the “Initial Global Notes”), deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers (and having an executed notation of Guarantee from each of the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter provided and shall bear the Private Placement Legend and the Global Note Legend.

All Notes originally issued on the Issue Date and any Additional Notes so designated by the Company shall bear the Original Issue Discount Legend.

Notes issued after the Issue Date shall be issued initially in the form of one or more Global Notes in registered form, substantially in the form set forth in Exhibit A, deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers (and having an executed notation of Guarantee from each of the Guarantors endorsed thereon) and authenticated by the Trustee as hereinafter provided and shall bear the Global Note Legend and any legends required by applicable law (together with the Initial Global Notes, the “Global Notes”) or as Physical Notes.

The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided. Notes issued in exchange for interests in a Global Note pursuant to Section 2.16 may be issued in the form of permanent certificated non-global Notes in registered form in substantially the form set forth in Exhibit A and bearing the applicable legends, if any (the “Physical Notes”).

SECTION 2.02. Execution, Authentication and Denomination; Additional Notes.

One Officer of the Company and one Officer of the Co-Issuer (each of whom shall have been duly authorized by all requisite corporate actions) shall sign the Notes for the Issuers by manual or facsimile signature. One Officer of a Guarantor (who shall have been duly authorized by all requisite corporate actions) shall sign the Guarantee for such Guarantor by manual or facsimile signature.

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If an Officer whose signature is on a Note or a notation of Guarantee, as the case may be, was an Officer at the time of such execution but no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

A Note (and the Guarantees in respect thereof) shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee shall authenticate (i) on the Issue Date, Notes for original issue in an aggregate principal amount not to exceed $700,000,000 (the “Initial Notes”) and (ii) additional Notes (the “Additional Notes”) in an unlimited amount (so long as not otherwise prohibited by the terms of this Indenture, including, without limitation, Section 4.08), in each case upon a written order of the Company in the form of a certificate of an Officer of the Company (an “Authentication Order”). Each such Authentication Order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, whether the Notes are to be Initial Notes or Additional Notes and whether the Notes are to be issued as certificated Notes or Global Notes or such other information as the Trustee may reasonably request. In addition, with respect to authentication pursuant to clause (ii) of the first sentence of this paragraph, the Authentication Order from the Company shall be accompanied by an Opinion of Counsel of the Company in a form reasonably satisfactory to the Trustee.

All Notes issued under this Indenture shall be treated as a single class for all purposes under this Indenture, except Section 2.17; provided that, if any Additional Notes subsequently issued are not fungible for U.S. federal income tax purposes with any Notes previously issued, such Additional Notes shall trade separately from such previously issued Notes under a separate CUSIP number but shall otherwise be treated as a single class with all other Notes issued under the Indenture. The Additional Notes shall bear any legend required by applicable law.

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Issuers and Affiliates of the Issuers. The Trustee shall have the right to decline to authenticate and deliver any Notes under this Indenture if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability.

The Notes shall be issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

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SECTION 2.03. Registrar and Paying Agent.

The Issuers shall maintain or cause to be maintained an office or agency in the Borough of Manhattan, The City of New York, where (a) Notes may be presented or surrendered for registration of transfer or for exchange (“Registrar”), (b) Notes may, subject to Section 2 of the Notes, be presented or surrendered for payment (“Paying Agent”) and (c) notices and demands to or upon the Issuers in respect of the Notes and this Indenture (other than notices and demands of the type contemplated by Section 12.09 of this Indenture) may be served. The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuers of the obligation to maintain or cause to be maintained an office or agency in the Borough of Manhattan, The City of New York, for such purposes. The Issuers may act as Registrar or Paying Agent, except that for the purposes of Articles Three and Nine and Sections 4.07 and 4.11, neither the Issuers nor any Affiliate of the Issuers shall act as Paying Agent. The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers, upon written notice to the Trustee, may have one or more co-registrars and one or more additional Paying Agents reasonably acceptable to the Trustee. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional Paying Agent. The Issuers initially appoints the Trustee as Registrar and Paying Agent until such time as the Trustee has resigned or a successor has been appointed.

The Issuers shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, which agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuers shall notify the Trustee in writing, in advance, of the name and address of any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such.

SECTION 2.04. Paying Agent To Hold Assets in Trust.

The Issuers shall require each Paying Agent other than the Trustee or the Issuers or any Subsidiary to agree in writing that each Paying Agent shall hold in trust for the benefit of Holders or the Trustee all assets held by the Paying Agent for the payment of principal of, or interest on, the Notes (whether such assets have been distributed to it by the Issuers or any other obligor on the Notes), and shall notify the Trustee of any Default by the Issuers (or any other obligor on the Notes) in making any such payment. The Issuers at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any payment Default, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed. Upon distribution to the Trustee of all assets that shall have been delivered by the Issuers to the Paying Agent, the Paying Agent shall have no further liability for such assets.

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SECTION 2.05. Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee at least two (2) Business Days prior to each Interest Payment Date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Holders, which list may be conclusively relied upon by the Trustee.

SECTION 2.06. Transfer and Exchange.

Subject to Sections 2.15 and 2.16, when Notes are presented to the Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, that the Notes surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Issuers and the Registrar, duly executed by the Holder thereof or his or her attorney duly authorized in writing. To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrar’s request. No service charge shall be made for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith.

Without the prior written consent of the Issuers, the Registrar shall not be required to register the transfer of or exchange of any Note (i) during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of Notes and ending at the close of business on the day of such mailing, (ii) selected for redemption in whole or in part pursuant to Article Three, except the unredeemed portion of any Note being redeemed in part, and (iii) beginning at the opening of business on any Record Date and ending on the close of business on the related Interest Payment Date. Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Notes may be effected only through a book-entry system maintained by the Holder of such Global Note (or its agent) in accordance with the applicable legends thereon, and that ownership of a beneficial interest in the Note shall be required to be reflected in a book-entry system.

SECTION 2.07. Replacement Notes.

If a mutilated Note is surrendered to the Trustee or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s requirements are met. Such Holder must provide an indemnity bond or other indemnity, sufficient in the judgment of both the Issuers and the Trustee, to protect the Issuers, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. The Issuers may charge such Holder for their reasonable out-of-pocket expenses in replacing a Note pursuant to this Section 2.07, including reasonable fees and expenses of counsel and of the Trustee.

Every replacement Note is an additional obligation of the Issuers and every replacement Guarantee shall constitute an additional obligation of the Guarantor thereof.

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The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of lost, destroyed or wrongfully taken Notes.

SECTION 2.08. Outstanding Notes.

Notes outstanding at any time are all the Notes that have been authenticated by the Trustee except those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Note does not cease to be outstanding because the Issuers, the Guarantors or any of their respective Affiliates hold the Note (subject to the provisions of Section 2.09).

If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless a Responsible Officer of the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07.

If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest ceases to accrue. If on a Redemption Date or the Maturity Date the Trustee or Paying Agent (other than the Issuers or an Affiliate thereof) holds U.S. Legal Tender or U.S. Government Securities sufficient to pay all of the principal and interest due on the Notes payable on that date, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.

SECTION 2.09. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or any of their Affiliates shall be disregarded, except that, for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be disregarded.

SECTION 2.10. Temporary Notes.

Until definitive Notes are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuers consider appropriate for temporary Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes. Notwithstanding the foregoing, so long as the Notes are represented by a Global Note, such Global Note may be in typewritten form.

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SECTION 2.11. Cancellation.

The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent (other than the Issuers or a Subsidiary), and no one else, shall cancel and, at the written direction of the Issuers, shall dispose of all Notes surrendered for transfer, exchange, payment or cancellation in accordance with its customary procedures. Subject to Section 2.07, the Issuers may not issue new Notes to replace Notes that they have paid or delivered to the Trustee for cancellation. If the Issuers or any Guarantor shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Debt represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11.

SECTION 2.12. Defaulted Interest.

If the Issuers default in a payment of interest on the Notes, they shall pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest, in any lawful manner. The Issuers may pay the defaulted interest to the persons who are Holders on a subsequent special record date, which date shall be the fifteenth day next preceding the date fixed by the Issuers for the payment of defaulted interest or the next succeeding Business Day if such date is not a Business Day. At least 15 days before any such subsequent special record date, the Issuers shall mail to each Holder, with a copy to the Trustee, a notice that states the subsequent special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.

SECTION 2.13. CUSIP and ISIN Numbers.

The Issuers in issuing the Notes may use “CUSIP” or “ISIN” numbers, and if so, the Trustee shall use the “CUSIP” or “ISIN” numbers in notices of redemption or exchange as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the “CUSIP” or “ISIN” numbers printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Issuers shall promptly notify the Trustee in writing of any change in the “CUSIP” or “ISIN” numbers.

SECTION 2.14. Deposit of Moneys.

Subject to Section 2 of the Notes, prior to 11:00 a.m. New York City time on each Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and the Net Proceeds Payment Date, the Issuers shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and Net Proceeds Payment Date, as the case may be, in a timely manner which permits the Paying Agent to remit payment to the Holders on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control Payment Date and Net Proceeds Payment Date, as the case may be.

SECTION 2.15. Book-Entry Provisions for Global Notes.

(a) The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Exhibit B, as applicable.

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Members of, or participants in, the Depository (“Participants”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Note, and the Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

(b) Transfers of Global Notes shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depository and the provisions of Section 2.16. In addition, Physical Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in Global Notes if (i) the Depository notifies the Issuers that it is unwilling or unable to act as Depository for any Global Note, the Issuers so notify the Trustee in writing and a successor Depository is not appointed by the Issuers within 90 days of such notice, (ii) the Issuers, at their option, notify the Trustee in writing that they elect to cause the issuance of the Notes in the form of Physical Notes under this Indenture, or (iii) a Default or Event of Default has occurred and is continuing and the Registrar has received a written request from any owner of a beneficial interest in a Global Note to issue Physical Notes. Upon any issuance of a Physical Note in accordance with this Section 2.15(b) the Trustee is required to register such Physical Note in the name of, and cause the same to be delivered to, such Person or Persons (or the nominee of any thereof). All such Physical Notes shall bear the applicable legends, if any.

(c) In connection with any transfer or exchange of a portion of the beneficial interest in a Global Note to beneficial owners pursuant to paragraph (b) of this Section 2.15, the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred or exchanged, and the Issuers shall execute, and the Trustee shall authenticate and deliver, one or more Physical Notes of authorized denominations in an aggregate principal amount equal to the principal amount of the beneficial interest in the Global Note so transferred or exchanged.

(d) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15, such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and (i) the Issuers shall execute, (ii) the Guarantors shall execute notations of Guarantee on and (iii) the Trustee shall upon written instructions from the Issuers authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Physical Notes of authorized denominations.

(e) Any Physical Note constituting a Restricted Security delivered in exchange for an interest in a Global Note pursuant to paragraph (b) or (c) of this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the Private Placement Legend.

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(f) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which a Holder is entitled to take under this Indenture or the Notes.

SECTION 2.16. Special Transfer and Exchange Provisions.

(a) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with respect to the registration of any proposed transfer or exchange of a Restricted Security to any Institutional Accredited Investor which is not a QIB:

(i) the Registrar shall register the transfer or exchange of any Restricted Security, whether or not such Note bears the Private Placement Legend, if (x) the requested transfer or exchange is after the first anniversary of the date of issuance of such Note; provided, however, that neither the Issuers nor any Affiliate of the Issuers has held any beneficial interest in such Note (and the Company shall provide an Officer’s Certificate to the Trustee if the Issuers or an Affiliate thereof has acquired such a beneficial interest in such Note), or portion thereof, at any time on or prior to the first anniversary of the date of issuance of such Note; or (y) the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit C hereto and any legal opinions and certifications as may be reasonably required by the Trustee and the Issuers;

(ii) if the proposed transferee is a Participant and the Notes to be transferred or exchanged consist of Physical Notes which after transfer or exchange are to be evidenced by an interest in the IAI Global Note, upon receipt by the Registrar of the Physical Note and (x) written instructions given in accordance with the Depository’s and the Registrar’s procedures and (y) the certificate, if required, referred to in clause (y) of paragraph (i) above (and any legal opinion or other certifications required by the Issuers), the Registrar shall register the transfer or exchange and reflect on its books and records the date and direct the Depository to increase the principal amount of the IAI Global Note in an amount equal to the principal amount of Physical Notes to be transferred or exchanged, and the Registrar shall cancel the Physical Notes so transferred or exchanged; and

(iii) if the proposed transferor is a Participant seeking to transfer or exchange an interest in a Global Note, upon receipt by the Registrar of (x) written instructions given in accordance with the Depository’s and the Registrar’s procedures and (y) the certificate, if required, referred to in clause (y) of paragraph (i) above, the Registrar shall register the transfer or exchange and reflect on its books and records the date and (A) direct the Depository to decrease the principal amount of the Global Note from which such interests are to be transferred or exchanged in an amount equal to the principal amount of the Notes to be transferred or exchanged and (B) direct the Depository to increase the principal amount of the IAI Global Note in an amount equal to the principal amount of the interest to be transferred or exchanged.

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(b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer or exchange of a Restricted Security to a QIB:

(i) the Registrar shall register the transfer or exchange of any Restricted Security, whether or not such Note bears the Private Placement Legend, if (x) the requested transfer or exchange is after the first anniversary of the date of issuance of such Note; provided, however, that neither the Issuers nor any Affiliate of the Issuers has held any beneficial interest in such Note, or portion thereof, at any time on or prior to the first anniversary of the date of issuance of such Note (and the Company shall provide an Officer’s Certificate if the Issuers or any Affiliate thereof has acquired such a beneficial interest in such Note) or (y) such transfer or exchange is being made by a proposed transferor who has checked the box provided for on the applicable Global Note stating, or has otherwise advised the Issuers and the Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the applicable Global Note stating, or has otherwise advised the Issuers and the Registrar in writing, that it is purchasing the Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

(ii) if the proposed transferee is a Participant and the Notes to be transferred or exchanged consist of Physical Notes which after transfer or exchange are to be evidenced by an interest in the 144A Global Note, upon receipt by the Registrar of the Physical Notes and written instructions given in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall register the transfer or exchange and reflect on its book and records the date and direct the Depository to increase the principal amount of the 144A Global Note in an amount equal to the principal amount of Physical Notes to be transferred or exchanged, and the Registrar shall cancel the Physical Notes so transferred or exchanged; and

(iii) if the proposed transferor is a Participant seeking to transfer or exchange an interest in the IAI Global Note or the Regulation S Global Note, upon receipt by the Registrar of written instructions given in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall register the transfer or exchange and reflect on its books and records the date and (A) direct the Depository to decrease the principal amount of the IAI Global Note or the Regulation S Global Note, as the case may be, in an amount equal to the principal amount of the Notes to be transferred or exchanged and (B) direct the Depository to increase the principal amount of the 144A Global Note in an amount equal to the principal amount of the interest to be transferred or exchanged.

(c) Transfers of Interests in the Temporary Regulation S Global Note. The following provisions shall apply with respect to the registration of any proposed transfer or exchange of interests in the Temporary Regulation S Global Note:

(i) the Registrar shall register the transfer or exchange of an interest in the Temporary Regulation S Global Note, whether or not such Global Note bears the Private Placement Legend, if the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit E stating, among other things, that the proposed transferee is a Non-U.S. Person (except for a transfer to an Initial Purchaser); and

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(ii) if the proposed transferee is a Participant, upon receipt by the Registrar of the documents referred to in clause (i) above, if required, and instructions given in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and amount of such transfer or exchange of an interest in the Temporary Regulation S Global Note.

(d) Transfers to Non-U.S. Persons. The following provisions shall apply with respect to any transfer or exchange of a Restricted Security to a Non-U.S. Person under Regulation S:

(i) the Registrar shall register any proposed transfer or exchange of a Restricted Security to a Non-U.S. Person upon receipt of a certificate substantially in the form of Exhibit D from the proposed transferor and such certifications, legal opinions and other information as the Issuers may reasonably require; and

(ii) (a) if the proposed transferor is a Participant holding a beneficial interest in the Rule 144A Global Note or the IAI Global Note or the Note to be transferred or exchanged consists of Physical Notes, upon receipt by the Registrar of (x) the documents required by paragraph (i) and (y) instructions in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and direct the Depository to decrease the principal amount of the Rule 144A Global Note or the IAI Global Note, as the case may be, in an amount equal to the principal amount of the beneficial interest in the Rule 144A Global Note or the IAI Global Note, as the case may be, to be transferred or exchanged or cancel the Physical Notes to be transferred or exchanged, and (b) if the proposed transferee is a Participant, upon receipt by the Registrar of instructions given in accordance with the Depository’s and the Registrar’s procedures, the Registrar shall reflect on its books and records the date and direct the Depository to increase the principal amount of the Permanent Regulation S Global Note in an amount equal to the principal amount of the interest in the Rule 144A Global Note, interest in the IAI Global Note or the principal amount of the Physical Notes, as the case may be, to be transferred or exchanged.

(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provisions of this Indenture, a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

(f) Private Placement Legend. Upon the transfer, exchange or replacement of Notes not bearing the Private Placement Legend unless otherwise required by applicable law, the Registrar shall deliver Notes that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes bearing the Private Placement Legend, the Registrar shall deliver only Notes that bear the Private Placement Legend unless (i) there is delivered to the

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Trustee an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (ii) such Note has been offered and sold pursuant to an effective registration statement under the Securities Act.

(g) General. By its acceptance of any Note bearing the Private Placement Legend, each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as provided in this Indenture.

The Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Section 2.16 or Section 2.17. The Issuers shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

No Agent shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including, without limitation, any transfers between or among Depository Participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

The Trustee shall have no responsibility for the actions or omissions of the Depository, or the accuracy of the books and records of the Depository.

(h) Cancellation and/or Adjustment of Global Note. At such time as all beneficial interests in a particular Global Note have been exchanged for Physical Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Physical Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

SECTION 2.17. Special Interest.

(a) In the event that the Private Placement Legend has not been removed from all of the Notes issued on the Issue Date or such Notes have a restricted CUSIP number as of the second Business Day after the 366th day following the Issue Date (a “free transferability

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default”), the interest rate borne by the Notes will be increased by 0.25% per annum for the first 90 day period and thereafter it will be increased by an additional 0.25% per annum for each 90 day period that elapses; provided that the aggregate increase in such annual interest rate may in no event exceed 1.0% (such increases in interest rate, “Special Interest”), until the Private Placement Legend has been removed and the Notes are freely tradable under an unrestricted CUSIP number. Upon the cure of the free transferability default, the interest rate borne by the Notes will be reduced to the original interest rate without any Special Interest; provided that if, after any such reduction in interest rate, any Notes again cease to be freely tradable (including because any Affiliate of the Issuers has resold Notes acquired by it) without the Private Placement Legend and without a restricted CUSIP number, the interest rate shall again be increased pursuant to the foregoing provisions.

(b) In the event that Additional Notes are issued after the Issue Date, such Additional Notes shall either (i) initially bear a Private Placement Legend and a new restricted CUSIP number or (ii) be freely tradable without a Private Placement Legend and without a restricted CUSIP number and, in the event that such Additional Notes are not freely tradable without a Private Placement Legend and without a restricted CUSIP number as of the second business day after the 366th day following the date of issuance of such Additional Notes, such Additional Notes will be subject to a free transferability default and will bear Special Interest in the same manner as the Notes originally issued on the Issue Date. For the avoidance of doubt, to the extent that any Additional Notes are subject to a free transferability default, the outstanding Notes (other than such Additional Notes) shall not bear any Special Interest if the Notes continue to be freely tradable without a Private Placement Legend and without a restricted CUSIP number.

(c) The Issuers agree to use commercially reasonable efforts not to take any action or fail to take any action which would cause the Notes not to be freely tradable pursuant to Rule 144 under the Securities Act on and after the 366th day after the Issue Date (or the date of issuance of such Notes, in the case of Additional Notes) and will use commercially reasonable efforts to cause the Private Placement Legend to be removed from the Notes. Parent shall not, and shall not permit any of its Subsidiaries to, resell, and shall use its commercially reasonable efforts to prohibit the resale by any of its other Affiliates of, any Notes acquired by it.

SECTION 2.18. Open Market Purchases.

The Issuers may at any time and from time to time purchase the Notes in the open market or otherwise.

ARTICLE THREE

REDEMPTION

SECTION 3.01. Notices to Trustee.

If the Company elects to redeem Notes pursuant to Section 5 of the Notes, it shall notify the Trustee in writing of the Redemption Date, the Redemption Price and the principal amount of Notes to be redeemed. The Company shall give notice of redemption to the Trustee at

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least 30 days but not more than 60 days before the Redemption Date (except that a notice issued in connection with a redemption referred to in Section 9.01 may be more than 60 days before such Redemption Date), together with such documentation and records as shall enable the Trustee to select the Notes to be redeemed.

SECTION 3.02. Selection of Notes To Be Redeemed.

If less than all of the Notes are to be redeemed at any time pursuant to Section 5 of the Notes, the Trustee shall select Notes on a pro rata basis; provided that no Notes of $2,000 or less shall be redeemed in part.

SECTION 3.03. Notice of Redemption.

At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first class mail, postage prepaid, to each Holder whose Notes are to be redeemed at its registered address (except that a notice issued in connection with a redemption referred to in Section 9.01 may be more than 60 days before such Redemption Date). At the Company’s written request, the Trustee shall forward the notice of redemption in the Company’s name and at the Company’s expense. Each notice for redemption shall identify the Notes (including the CUSIP or ISIN number) to be redeemed and shall state:

(1) the Redemption Date;

(2) the Redemption Price and the amount of accrued interest, if any, to be paid;

(3) the name and address of the Paying Agent;

(4) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price plus accrued interest, if any;

(5) that, unless the Company defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Notes redeemed;

(6) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date, and upon surrender and cancellation of such Note, a new Note or Notes in aggregate principal amount equal to the unredeemed portion thereof will be issued;

(7) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption; and

(8) the Section of the Notes or this Indenture, as applicable, pursuant to which the Notes are to be redeemed.

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The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Notices of redemption may not be conditional.

SECTION 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price plus accrued interest, if any. Upon surrender to the Trustee or Paying Agent, such Notes called for redemption shall be paid at the Redemption Price (which shall include accrued interest thereon to, but not including, the Redemption Date), but installments of interest, the maturity of which is on or prior to the Redemption Date, shall be payable to Holders of record at the close of business on the relevant Record Dates. On and after the Redemption Date interest shall cease to accrue on Notes or portions thereof called for redemption unless the Company shall have not complied with its obligations pursuant to Section 3.05.

SECTION 3.05. Deposit of Redemption Price.

On or before 11:00 a.m. New York time on the Redemption Date, the Company shall deposit with the Paying Agent, U.S. Legal Tender sufficient to pay the Redemption Price plus accrued and unpaid interest, if any, of all Notes to be redeemed on that date.

If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price plus accrued interest, if any, interest on the Notes to be redeemed shall cease to accrue on and after the applicable Redemption Date, whether or not such Notes are presented for payment.

SECTION 3.06. Notes Redeemed in Part.

If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note or Notes in principal amount equal to the unredeemed portion of the original Note or Notes shall be issued in the name of the Holder thereof upon surrender and cancellation of the original Note or Notes.

ARTICLE FOUR

COVENANTS OF THE ISSUERS

SECTION 4.01. Payment of Notes.

The Issuers shall pay the principal of (and premium, if any) and interest on the Notes in the manner provided in the Notes and this Indenture. An installment of principal of, or interest on, the Notes shall be considered paid on the date it is due if the Trustee or Paying Agent (other than the Company or an Affiliate thereof) holds on that date U.S. Legal Tender designated for and sufficient to pay the installment. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

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The Issuers shall pay interest on overdue principal (including, without limitation, post petition interest in a proceeding under any Bankruptcy Law), and overdue interest, to the extent lawful, at the same rate per annum borne by the Notes.

SECTION 4.02. Maintenance of Office or Agency.

The Issuers shall maintain in the Borough of Manhattan, The City of New York, the office or agency required under Section 2.03 (which may be an office of the Trustee or an Affiliate of the Trustee or Registrar). The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 12.02.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby initially designates The Bank of New York Mellon, located at 101 Barclay Street, New York, New York 10286, 4th Floor East, Attn: Corporate Trust, as such office of the Company in accordance with Section 2.03.

SECTION 4.03. Corporate Existence.

Except as otherwise permitted by Article Six, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership or other existence of each of its Restricted Subsidiaries in accordance with the respective organizational documents of each such Restricted Subsidiary and the material rights (charter and statutory) and material franchises of the Company and each of its Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, franchise or corporate existence with respect to itself or any Restricted Subsidiary if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes.

SECTION 4.04. Payment of Taxes.

The Company shall, and shall cause each of its Restricted Subsidiaries to, pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon the Company or any of its Restricted Subsidiaries or upon the income, profits or property of the Company or any of its Restricted Subsidiaries and (b) all lawful claims for labor, materials and supplies which, in each case, if unpaid, might by law become a material liability or Lien upon the property of the

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Company or any of its Restricted Subsidiaries; provided, however, that the Company and its Restricted Subsidiaries shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount the applicability or validity is being contested in good faith by appropriate actions and for which appropriate provision has been made.

SECTION 4.05. Compliance Certificate; Notice of Default.

(a) The Company shall deliver to the Trustee, within 120 days after the close of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Company and its Subsidiaries has been made under the supervision of the signing Officers with a view to determining whether the Company and the Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture and further stating, as to each such Officer signing such certificate, that to the best of such Officer’s knowledge, the Company and the Guarantors during such preceding fiscal year have kept, observed, performed and fulfilled each and every such covenant and no Default occurred during such year and at the date of such certificate there is no Default that has occurred and is continuing or, if such signers do know of such Default, the certificate shall specify such Default and what action, if any, the Company is taking or proposes to take with respect thereto. The Officer’s Certificate shall also notify the Trustee should the Company elect to change the manner in which it fixes the fiscal year end.

(b) The Company shall deliver to the Trustee promptly and in any event within five Business Days after the Company becomes aware of the occurrence of any Default an Officer’s Certificate specifying the Default, its status and what action, if any, the Company or, prior to the Fall-Away Event, Parent, is taking or proposes to take with respect thereto.

SECTION 4.06. Waiver of Stay, Extension or Usury Laws.

The Company and each Guarantor covenants (to the extent permitted by applicable law) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive such Company or such Guarantor from paying all or any portion of the principal of and/or interest on the Notes or the Guarantee of any such Guarantor as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and (to the extent permitted by applicable law) each hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 4.07. Change of Control.

(a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Issuers to repurchase all or any part of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of those Notes, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase (the “Change of Control Payment”).

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(b) Within 30 days following any Change of Control, unless the Issuers have mailed a redemption notice with respect to all the outstanding Notes in accordance with Section 5 of the Notes, the Company shall mail a notice to each Holder with a copy to the Trustee describing the transaction or transactions that constitute a Change of Control and offering to purchase the Notes on a specified date (the “Change of Control Offer”), which date shall be a Business Day no earlier than 30 days nor later than 60 days from the date the notice is mailed (the “Change of Control Payment Date”).

(c) Upon the commencement of an Change of Control Offer, the Issuers shall send, by first class mail, a notice to the Trustee and to each Holder at its registered address. The notice shall contain all instructions and materials necessary to enable the Holders to tender Notes pursuant to the Change of Control Offer. Any Change of Control Offer shall be made to all Holders. The notice, which shall govern the terms of the Change of Control Offer, shall state:

(1) that the Change of Control Offer is being made pursuant to this Section 4.07;

(2) the Change of Control Payment Date;

(3) that any Notes not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Issuers default in making such payment, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on an after the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to any Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Issuers, a depository, if appointed by the Company, or the Paying Agent, at the address specified in the notice at least three days before the Change of Control Payment Date;

(6) that Holders shall be entitled to withdraw their election if the Issuers, the Depository or the Paying Agent, as the case may be, receive, not later than the Change of Control Payment Date, a notice setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and

(7) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry).

(d) On the Change of Control Payment Date, the Issuers shall, to the extent lawful:

(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

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(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of the Notes properly tendered; and

(3) deliver or cause to be delivered to the Trustee or Paying Agent, on its behalf, the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions of the Notes being tendered and purchased by the Issuers.

(e) The Paying Agent shall promptly mail to each Holder of Notes properly tendered the Change of Control Payment for those Notes, and the Trustee shall promptly authenticate and mail, or cause to be transferred by book-entry, to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however, that each new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

(f) The Issuers shall not be required to make a Change of Control Offer upon a Change of Control if a third party offers to purchase the Notes in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer by the Issuers and that third party purchases all Notes validly tendered to it in response to that offer.

(g) The Issuers shall cause the Change of Control Offer to remain open for at least 20 Business Days or for such longer period as may be required by law. The Issuers shall comply, and shall cause any third party making a Change of Control Offer to comply, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with a Change of Control Offer. To the extent the provisions of any applicable securities laws or regulations conflict with the provisions of this Section 4.07, the Issuers will not be deemed to have breached their obligations under this Section 4.07 by virtue of complying with such laws or regulations.

SECTION 4.08. Limitation on Incurrence of Additional Debt and Issuance of Capital Stock.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Debt (including Additional Notes and Acquired Debt) and the Company shall not issue any Disqualified Capital Stock and its Restricted Subsidiaries shall not issue any Preferred Stock, except Preferred Stock issued to the Company or a Restricted Subsidiary of the Company; provided, however, that the Company and any of the Subsidiary Guarantors may Incur Debt or issue shares of such Capital Stock, in either case, if on the date of that Incurrence or issuance, and after giving effect to all Incurrences of Debt and issuances of such Capital Stock on such date and the application of the proceeds therefrom, the Company Net Debt to EBITDA Ratio would be less than 3.00 to 1.00.

(b) The limitation in Section 4.08(a) shall not prohibit the Company and its Restricted Subsidiaries from incurring any or all of the following Debt (“Permitted Debt”):

(1) Existing Debt;

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(2) Debt of the Company or a Restricted Subsidiary of the Company under Credit Facilities, including guarantees thereof; provided that, after giving effect to any such Incurrence, the aggregate principal amount of all Debt Incurred and then outstanding under this clause (2) shall not exceed the greater of (a) $500.0 million less the sum of all principal payments of Credit Facilities pursuant to clause (iii) of the second paragraph in Section 4.11(a) and (b) the sum of (i) 40% of the book value of accounts receivable of the Company and its Restricted Subsidiaries plus (ii) 40% of the book value of inventory of the Company and its Restricted Subsidiaries, in the case of clause (ii), determined based on the consolidated balance sheet of the Company for the fiscal quarter most recently ended on or prior to the date on which such Debt is Incurred for which internal financial statements are available (as adjusted to give pro forma effect to acquisitions or dispositions outside the ordinary course of business occurring after the date of such balance sheet but on or before the date of such Incurrence);

(3) Debt of the Company owing to and held by any of its Restricted Subsidiaries or Debt of a Restricted Subsidiary of the Company owing to and held by the Company or any of its Restricted Subsidiaries; provided, however, that any Debt of an Issuer or a Subsidiary Guarantor owing to and held by any Restricted Subsidiary of the Company that is not a Guarantor shall be unsecured and, after the Fall-Away Event, shall be subordinated in right of payment to the payment and performance of such Issuer’s obligations under the Notes or Subsidiary Guarantor’s obligations under its Guarantee; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary of the Company ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Debt, except to the Company or any of its Restricted Subsidiaries, shall be deemed, in each case, to constitute the Incurrence of that Debt by the issuer thereof not permitted by this Section 4.08(b)(3);

(4) the Notes issued on the Issue Date and the Guarantees of all of the Notes;

(5) Hedging Obligations; provided, however, that the agreements governing those Hedging Obligations are entered into for bona fide hedging purposes and not for speculative purposes, as determined in good faith by the Board of Directors or senior management of the Company;

(6) additional Debt of the Company or any of its Restricted Subsidiaries not otherwise permitted under this covenant, in an aggregate principal amount, which when aggregated with the aggregate principal amount of all other Debt Incurred pursuant to this clause (6), does not at any one time outstanding exceed $200.0 million (which amount may, but need not be, incurred under Credit Facilities);

(7) Refinancing Debt with respect to Debt permitted by clause (1), (4), (13) or this clause (7) of this Section 4.08(b) or by Section 4.08(a);

(8) subject to compliance with Section 4.16, guarantees by the Company or Restricted Subsidiaries of the Company of any Debt of the Company or any of its Restricted Subsidiaries permitted to be Incurred under this Section 4.08;

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(9) Debt in respect of performance bonds, reimbursement obligations with respect to letters of credit, bankers’ acceptances, completion guarantees and surety or appeal bonds provided by the Company or any of its Restricted Subsidiaries in the ordinary course of their business or Debt with respect to reimbursement type obligations regarding workers’ compensation claims;

(10) pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licensees, contractors, franchisees or customers of obligations, other than Debt, made in the ordinary course of business;

(11) Debt arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to those agreements, in each case Incurred in connection with the disposition of any business assets or Restricted Subsidiaries of the Company, other than guarantees of Debt or other obligations Incurred by any Person acquiring all or any portion of those business assets or Restricted Subsidiaries of the Company for the purpose of financing that acquisition, in a principal amount not to exceed the gross proceeds, including non-cash proceeds, actually received by the Company or any of its Restricted Subsidiaries in connection with that disposition; provided, however, that such Debt is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries, other than as contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet;

(12) Debt, including but not limited to Capitalized Lease Obligations, mortgage financings or purchase money obligations, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property or assets, whether through direct purchase of assets or the Capital Stock of any Person owning those assets, or Incurred to refinance any such purchase price or cost of construction or improvement, and refinancings thereof, in an aggregate amount not to exceed at any one time outstanding $100.0 million;

(13) Acquired Debt or Disqualified Capital Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that such Acquired Debt or Disqualified Capital Stock is not Incurred in contemplation of that acquisition or merger; and provided further that after giving effect to the acquisition or merger, the Company would be permitted to Incur at least $1.00 of additional Debt under Section 4.08(a);

(14) the Incurrence by the Issuers or any Subsidiary Guarantor of Debt to the extent that the net proceeds thereof are promptly deposited to defease, or to satisfy and discharge, all of the outstanding Notes in accordance with Section 9.01 or 9.02;

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(15) Debt Incurred by a Foreign Subsidiary of the Company in an aggregate principal amount which, when added together with the amount of Debt Incurred pursuant to this Section 4.08(b)(15), does not at any one time outstanding exceed $150.0 million;

(16) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn inadvertently against insufficient funds in the ordinary course of business, provided that such Debt is extinguished within five business days of incurrence of such Debt; and

(17) prior to the Fall-Away Event, guarantees by Restricted Subsidiaries of Existing Parent 2016 Notes required by the indenture relating thereto, as such indenture is in effect on the Issue Date.

(c) For purposes of determining compliance with this Section 4.08:

(1) any Debt outstanding or Incurred on the Issue Date under the Revolving Credit Agreement shall be treated as Incurred on the Issue Date under Section 4.08(b)(2);

(2) in the event that an item of Debt (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt or is entitled to be incurred pursuant to Section 4.08(a), the Company, in its sole discretion, shall classify such item of Debt (or any portion thereof) at the time of Incurrence and shall only be required to include the amount and type of such Debt in one of such clauses of Section 4.08(b) or pursuant to Section 4.08(a);

(3) the Company shall be entitled to divide and classify an item of Debt in more than one of such clauses of Section 4.08(b) or pursuant to Section 4.08(a);

(4) any Debt originally classified as Incurred pursuant to any clause of Section 4.08(b) (other than pursuant to clause (2)) thereof may later be reclassified by the Company such that it shall be deemed as having been Incurred pursuant to Section 4.08(a) or another clause of Section 4.08(b), as applicable, to the extent that such reclassified Debt could be Incurred pursuant to Section 4.08(a) or clause of Permitted Debt at the time of such reclassification; and

(5) notwithstanding any other provision in this covenant, the maximum amount of Debt that may be Incurred pursuant to this Section 4.08 shall not be deemed to be exceeded with respect to any outstanding Debt due solely to the result of fluctuations in the exchange rates of currencies.

(d) For purposes of determining compliance with any U.S. dollar denominated restriction on the Incurrence of Debt where the Debt Incurred is denominated in a different currency, the amount of such Debt shall be the U.S. Dollar Equivalent determined on the date of the Incurrence of such Debt; provided, however, that if any such Debt denominated in a different currency is subject to a Currency Protection Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be as provided in such Currency Protection Agreement. The principal amount of any Refinancing Debt Incurred in the same currency as the Debt being refinanced

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shall be the U.S. Dollar Equivalent of the Debt refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Protection Agreement, in which case the Refinancing Debt shall be determined in accordance with the preceding sentence, and (2) the principal amount of the Refinancing Debt exceeds the principal amount of the Debt being refinanced, in which case the U.S. Dollar Equivalent of such excess, as appropriate, shall be determined on the date such Refinancing Debt is Incurred.

SECTION 4.09. Limitation on Restricted Payments.

(a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment if, at the time of that Restricted Payment and immediately after giving effect to that Restricted Payment:

(1) a Default or Event of Default shall have occurred and be continuing or would result from that Restricted Payment;

(2) the Company is not able to Incur an additional $1.00 of Debt pursuant to Section 4.08(a); or

(3) the aggregate amount of the Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date would exceed the sum of (without duplication):

(A) 50% of the cumulative Consolidated Net Income of the Company accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter in which the Issue Date occurs to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal financial statements are available (or if the aggregate amount of Consolidated Net Income for such period shall be a deficit, minus 100% of such deficit); plus

(B) 100% of the aggregate Net Cash Proceeds and the Fair Market Value of marketable securities or other property received by the Company either (x) from the issuance or sale of its Qualified Capital Stock subsequent to the Issue Date or (y) as a contribution in respect of its Qualified Capital Stock from its shareholders subsequent to the Issue Date; plus

(C) the amount by which Debt of the Company or any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange subsequent to the Issue Date of any Debt of the Company or any of its Restricted Subsidiaries into or for Qualified Capital Stock of the Company (less the amount of any cash, or the Fair Market Value of any other property, distributed by the Company or any of its Restricted Subsidiaries upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by the Company or any of its Restricted Subsidiaries from the sale of such Debt (excluding Net Cash Proceeds from sales to a Subsidiary of the Company or to an employee stock ownership plan or a trust established by the Company or any of its Subsidiaries for the benefit of their employees); plus

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(D) without duplication of any amount included in the calculation of Consolidated Net Income, an amount equal to the sum of (x) the aggregate amount of cash and the Fair Market Value of any asset (other than cash or securities) received by the Company or any of its Restricted Subsidiaries subsequent to the Issue Date with respect to Investments (other than Permitted Investments) made by the Company or any of its Restricted Subsidiaries in any Person and resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital and (y) in the event that the Company redesignates an Unrestricted Subsidiary to be a Restricted Subsidiary of the Company, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any of its Restricted Subsidiaries in such Person or Unrestricted Subsidiary.

(b) The provisions of Section 4.09(a) shall not prohibit:

(1) the payment of any dividend or the making of any distribution within 60 days after the date of its declaration if the dividend or distribution would have been permitted on the date it is declared;

(2) any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Qualified Capital Stock of the Company or a substantially concurrent cash capital contribution received by the Company from its shareholders with respect to its Qualified Capital Stock; provided that such Net Cash Proceeds shall be excluded from the calculation in Section 4.09(a)(3);

(3) repurchases of Capital Stock or warrants, options or rights to acquire Capital Stock deemed to occur upon exercise of warrants, options or rights to acquire Capital Stock if such Capital Stock, warrants, options or rights represent a portion of the exercise price of such warrants, options or rights or nominal cash payments in lieu of issuances of fractional shares;

(4) payments made to purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Debt of the Company pursuant to provisions requiring the Company to offer to purchase, redeem, defease or otherwise acquire or retire for value such Subordinated Debt, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Debt, plus any accrued and unpaid interest thereon, pursuant to provisions similar to those in Section 4.07; provided, however, that the Issuers shall have previously made a Change of Control Offer in connection with such change of control transaction and have purchased all Notes tendered in connection with that Change of Control Offer before the making of such Restricted Payment;

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(5) the declaration and payment of dividends to, or the making of loans to, any direct or indirect parent of the Company (i) in amounts required for such party to pay, and which are used to pay, federal, state and local income taxes to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries; provided, however, that the amount of such payments in any fiscal year does not exceed the amount that the Company and its Restricted Subsidiaries would be required to pay in respect of federal, state and local income taxes for such fiscal year were the Company and its Restricted Subsidiaries to pay such taxes as a stand-alone taxpayer, less any federal, state and/or local income taxes actually payable directly by the Company and/or its Restricted Subsidiaries and (ii) to the extent of the amount actually received from the Unrestricted Subsidiaries, in amounts required to pay, and which are used to pay, federal, state and local taxes to the extent attributable to the income of the Unrestricted Subsidiaries;

(6) the declaration and payment of dividends to, or the making of loans to, Holdings in amounts required to (i) maintain the legal existence of Holdings and (ii) pay out-of-pocket legal, accounting and filing costs and other expenses in the nature of overhead in the ordinary course of business of Holdings, in both cases in an aggregate amount not to exceed $1.0 million in any calendar year;

(7) Restricted Payments made after the Issue Date in an aggregate amount which, when taken together with all Restricted Payments made pursuant to this Section 4.09(b)(7), does not exceed $25.0 million; plus the amount calculated pursuant to Section 4.09(a)(3)(D) with respect to any Investments made (or deemed made with respect to an Unrestricted Subsidiary) pursuant to this Section 4.09(b)(7);

(8) the payment of dividends, distributions or other amounts to fund the repurchase, redemption or other acquisition or retirement for value of any of the Company’s or its direct or indirect parent’s Equity Interests or any Equity Interests of any of its Restricted Subsidiaries held by any then-existing or former director, officer, employee, independent contractor or consultant of the Company, its direct or indirect parent or any of its Restricted Subsidiaries or their respective assigns, estates or heirs; provided, however, that the price paid for all repurchased, redeemed, acquired or retired Equity Interests in all cases, other than as a result of death or disability, does not exceed $1.0 million in the aggregate in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years); provided, further, that the amounts in any fiscal year may be increased by an amount not to exceed:

(A) the cash proceeds received by the Company from the sale of Qualified Capital Stock of the Company to any present or former employees, directors, officers or consultants (or their respective permitted transferees) of the Company or any of its Restricted Subsidiaries following the Issue Date, to the extent that such cash proceeds have not otherwise been applied to the payment of Restricted Payments by virtue of Section 4.09(a)(3) or Section 4.09(b)(2); provided that such amounts as have been applied to the payment of Restricted Payments in accordance with this Section 4.09(b)(8) shall be excluded from the calculation of the amount of Restricted Payments permitted pursuant to Section 4.09(a)(3)(B) and Section 4.09(b)(2); plus

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(B) the cash proceeds of “key man” life insurance policies received by the Company or any of its Restricted Subsidiaries since the Issue Date; less

(C) the amount of any Restricted Payments previously made with the cash proceeds referred to in subclause (A) or (B) of this Section 4.09(b)(8);

and provided, further, that cancellation of Debt owing to the Company from any present or former employees, directors, officers or consultants (or their respective permitted transferees) of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company shall not be deemed to constitute a Restricted Payment for purposes of this covenant;

(9) the redemption, repurchase or other acquisition or retirement of Subordinated Debt made by exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Debt; and

(10) payments of Subordinated Debt owed to the Company or any of its Restricted Subsidiaries, the Incurrence of which was permitted under Section 4.08(b)(3);

(11) in the event of an Asset Sale that requires the Company to offer to repurchase Notes pursuant to Section 4.11, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Debt of the Company at a purchase price not greater than 100% of the principal amount (or, if such Subordinated Debt were issued with original issue discount, 100% of the accreted value) of such Subordinated Debt, plus any accrued and unpaid interest thereon; provided, however, that (A) prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company has made an Asset Sale Offer with respect to the Notes pursuant to the provisions of Section 4.11 and has repurchased all Notes validly tendered and not withdrawn in connection with such Asset Sale Offer and (B) the aggregate amount of all such payments, purchases, redemptions, defeasances or other acquisitions or retirements of all such Subordinated Debt may not exceed (x) the amount by which Net Available Cash was reduced as a result of the Asset Sale Offer less (y) the Net Available Cash actually used to consummate the Asset Sale Offer for the Notes (and any other Pari Passu Debt included in such Asset Sale Offer);

(12) prior to the Fall-Away Event, the declaration and payment of dividends and other distributions on Equity Interests of the Company not to exceed 50% of the cumulative Consolidated Net Income of the Company accrued during the period (treated as one accounting period) from August 14, 2008 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal financial statements are available;

(13) the payment of dividends on Disqualified Stock issued in compliance with Section 4.08;

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(14) any Restricted Payments made to, or on behalf of, Holdings which is used to fund the obligations under the Raw Material Supply Note in an amount not in excess of the premium received by the Company and its Restricted Subsidiaries from sales of raw materials under the related raw materials supply agreement; and

(15) distributions made to Holdings in an aggregate amount not to exceed (x) the net proceeds received by the Issuers on the Issue Date from this offering of Notes less (y) $100.0 million, which are used as described in the Offering Memorandum under “Use of proceeds”;

provided, however, in the case of any Restricted Payment made pursuant to Section 4.09(b)(4), (7), (8), (10) (only after the Fall-Away Event and other than in the case of any payment owed to the Company), (11), (13) or (14), that no Default or Event of Default shall have occurred or be continuing at the time of the payment or as a result of that Restricted Payment.

(c) In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date, amounts expended pursuant to Section 4.09(b)(1), (4), (7), (11) and (12) shall be included in such calculation.

(d) The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary of the Company, as the case may be, pursuant to such Restricted Payment. The Fair Market Value of any non-cash Restricted Payment shall be determined conclusively by the Board of Directors of the Company acting in good faith whose resolution with respect thereto shall be delivered to the Trustee.

SECTION 4.10. Limitation on Liens.

The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur or suffer to exist any Lien (other than Permitted Liens) securing Debt or trade payables upon any of its property (including Capital Stock of a Restricted Subsidiary of the Company), whether owned at the Issue Date or thereafter acquired, or any interest therein or any income or profits therefrom, unless it has made or shall make effective provision whereby the Notes or the applicable Guarantee shall be secured by a Lien on such property equally and ratably with (or prior to) all other Debt of the Company or any of its Restricted Subsidiaries secured by a Lien for so long as such other Debt is secured by such Lien; provided, however, that if the Debt is Subordinated Debt, the Lien on such property securing the Debt shall be subordinated and junior to the Lien securing the Notes or the Guarantees, as the case may be, with the same relative priority as such Debt has with respect to the Notes or the Guarantees.

SECTION 4.11. Limitation on Asset Sales.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make an Asset Sale unless:

(1) the Company or such Restricted Subsidiary receives consideration at the time of the Asset Sale at least equal to the Fair Market Value, of the shares, property or assets being disposed of in the Asset Sale; and

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(2) at least 75% of the consideration received by the Company or such Restricted Subsidiary, as the case may be, from the Asset Sale is in the form of cash or Cash Equivalents.

Within one year from the receipt of Net Available Cash from an Asset Sale, the Company may, at its election or as required by the terms of the Credit Facilities, use such Net Available Cash to (i) acquire Additional Assets; (ii) make capital expenditures used or useful in a Related Business; and/or (iii) prepay, repay or purchase indebtedness under the Credit Facilities; provided that if during such one-year period the Company or such Restricted Subsidiary enters into a definitive binding agreement committing it to apply such Net Available Cash in accordance with the requirements of the preceding clause (i) or (ii) after such one year period, such one-year period shall be extended with respect to the amount of Net Available Cash so committed for a period not to exceed 180 days until such Net Available Cash are required to be applied in accordance with such agreement (or, if earlier, until termination of such agreement).

The amount of Net Available Cash not applied or invested as provided in this paragraph shall constitute “Excess Proceeds.”

(b) When the aggregate amount of Excess Proceeds exceeds $25.0 million, the Issuers shall be required to make an offer to purchase from all Holders and, if applicable, redeem (or make an offer to do so) any Debt of the Issuers or any Subsidiary Guarantor that ranks pari passu in right of payment with the Notes or the Guarantees (“Pari Passu Debt”) the provisions of which require the Issuers to redeem or purchase such Debt with the proceeds from any Asset Sales (or offer to do so), for a purchase price equal to the amount of such Excess Proceeds as follows:

(1) the Issuers shall (a) make an offer to purchase (an “Asset Sale Offer”) to all Holders in accordance with the procedures set forth in this Section 4.11, and (b) redeem or purchase (or make an offer to do so) any such other Pari Passu Debt, pro rata in proportion to the respective principal amounts (or accreted value in the case of Debt issued at a discount) of the Notes and such other Pari Passu Debt required to be redeemed or purchased, the maximum principal amount (or accreted value) of Notes and Pari Passu Debt that may be redeemed out of the amount (the “Payment Amount”) of such Excess Proceeds;

(2) the offer price for the Notes shall be payable in cash in an amount equal to 100% of the principal amount of the Notes tendered pursuant to an Asset Sale Offer, plus accrued and unpaid interest and Special Interest thereon, if any, to the date such Asset Sale Offer is consummated (the “Offered Amount”), in accordance with the procedures set forth in this Indenture, and the redemption price for such Pari Passu Debt (the “Pari Passu Debt Amount”) shall be as set forth in the related documentation governing such Debt;

(3) if the aggregate Offered Amount of Notes validly tendered and not withdrawn by Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes, Notes to be purchased shall be selected on a pro rata basis; and

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(4) upon completion of such Asset Sale Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Asset Sale Offer was made shall be deemed to be zero.

To the extent that the sum of the aggregate Offered Amount of Notes tendered pursuant to an Asset Sale Offer and the aggregate Pari Passu Debt Amount paid to the holders of such Pari Passu Debt is less than the Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use the Net Proceeds Deficiency, or a portion thereof, for general corporate purposes, subject to the provisions of this Indenture.

(c) Solely for the purposes of Section 4.11(a)(2), the following shall be deemed to be cash:

(x) the assumption by the transferee in connection with the Asset Sale pursuant to a customary novation agreement that releases the Company or any of its Restricted Subsidiaries, as the case may be, from further liability with respect to Debt of the Company or such Restricted Subsidiary, other than contingent Debt and Debt that is by its terms subordinated to the Notes or to any Guarantee,

(y) securities received by the Company or any of its Restricted Subsidiaries from the transferee that are converted within 180 days into cash or Cash Equivalents, and

(z) the Fair Market Value of Additional Assets received by the Company or any of its Restricted Subsidiaries; provided, however, for any such assets or Equity Interests received by the Company or any of its Restricted Subsidiaries in a transaction or series of transactions involving a value in excess of $50.0 million to be deemed cash, the Company must obtain a written opinion from an Independent Financial Advisor to the effect that the assets received constitute an exchange of equivalent value.

(d) Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and to each Holder at its registered address. The notice shall contain all instructions and materials necessary to enable the Holders to tender Notes pursuant to the Asset Sale Offer. Any Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(1) that the Asset Sale Offer is being made pursuant to this Section 4.11;

(2) the Payment Amount, the Offered Amount and the date on which Notes tendered and accepted for payment shall be purchased, which date shall be at least 30 days and not later than 60 days from the date such notice is mailed (the “Net Proceeds Payment Date”);

(3) that any Notes not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Company defaults in making such payment, any Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest on and after the Net Proceeds Payment Date;

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(5) that Holders electing to have any Notes purchased pursuant to any Asset Sale Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depository, if appointed by the Company, or the Paying Agent, at the address specified in the notice at least three days before the Net Proceeds Payment Date;

(6) that Holders shall be entitled to withdraw their election if the Issuer, the Depository or the Paying Agent, as the case may be, receives, not later than the Net Proceeds Payment Date, a notice setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(7) that if the aggregate principal amount of Notes surrendered by Holders exceeds the Payment Amount, the Company shall select, on a pro rata basis, the Notes to be purchased (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or integral multiples of $1,000, shall be purchased); and

(8) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry).

(e) On the Net Proceeds Payment Date, the Company shall, to the extent lawful: (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Asset Sale Offer, subject to pro ration if the aggregate amount of Notes tendered exceed the Payment Amount allocable to the Notes; (2) deposit with the Paying Agent U.S. Legal Tender equal to the lesser of the Payment Amount allocable to the Notes and the amount sufficient to pay the Offered Amount in respect of all Notes or portions thereof so tendered; and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being repurchased by the Issuer. The Company shall publicly announce the results of the Asset Sale Offer on the Net Proceeds Payment Date.

(f) The Paying Agent shall promptly mail to each Holder of Notes so tendered the Offered Amount for such Notes, and the Trustee shall promptly authenticate pursuant to an Authentication Order and mail (or cause to be transferred by book-entry) to each Holder a new Note equal in principal amount to any unrepurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. However, if the Net Proceeds Payment Date is on or after the Record Date for any interest payment and on or before the related Interest Payment Date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

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(g) The Issuers shall comply with the requirements of Rule 14e-1 of the Exchange Act and, to the extent applicable, any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under this Indenture by virtue of complying with those laws and regulations.

SECTION 4.12. Limitation on Restrictions on Distributions from Restricted Subsidiaries.

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any such Restricted Subsidiary to:

(1) pay dividends, in cash or otherwise, or make any other distributions on its Capital Stock or pay any Debt or other obligation owed to the Company or any other Restricted Subsidiary of the Company;

(2) make any loans or advances to the Company or any other Restricted Subsidiary of the Company; or

(3) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company.

(b) The foregoing limitations shall not apply to:

(1) any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive than those contained in such agreements as in effect on the Issue Date, as determined in good faith by the senior management or Board of Directors of the Company;

(2) any encumbrance or restriction existing under or by reason of the Credit Facilities, or Debt Incurred pursuant to Section 4.08(b)(2) or (15); provided that (x) either (i) the encumbrance or restriction applies only in the event of and during the continuance of a payment default or a default with respect to a financial covenant contained in such Debt or agreement or (ii) the Company determines at the time any such Debt is Incurred (and at the time of any modification of the terms of any such encumbrance or restriction) that any such encumbrance or restriction shall not materially affect the Company’s ability to make principal or interest payments on the Notes and any other Debt that is an obligation of the Company and (y) the encumbrance or restriction is not materially more disadvantageous to the Holders than is customary in comparable financings or agreements (as determined by senior management or the Board of Directors of the Company in good faith);

(3) any encumbrance or restriction with respect to a Restricted Subsidiary of the Company pursuant to an agreement relating to any Debt Incurred or Preferred Stock issued by such Restricted Subsidiary on or prior to the date on which such Restricted

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Subsidiary became a Restricted Subsidiary or was acquired by the Company or any other Restricted Subsidiary of the Company and outstanding on such date, other than Debt Incurred or Preferred Stock issued as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Company or was acquired by the Company or any other Restricted Subsidiary of the Company;

(4) any encumbrance or restriction with respect to a Restricted Subsidiary of the Company pursuant to an agreement evidencing Debt Incurred or Preferred Stock issued without violation of this Indenture or effecting a refinancing of Debt Incurred or Preferred Stock issued pursuant to an agreement referred to in Section 4.12(b)(1), (2) or (3) or this Section 4.12(b)(4) contained in any amendment to an agreement referred to in Section 4.12(b)(1), (2) or (3) or this Section 4.12(b)(4); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement, refinancing agreement or amendment, taken as a whole, are not materially less favorable to the Holders, as determined in good faith by the senior management or Board of Directors of the Company, than encumbrances and restrictions with respect to such Restricted Subsidiary contained in agreements in effect at the Issue Date;

(5) in the case of Section 4.12(a)(3), any encumbrance or restriction:

(i) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license, conveyance or contract or similar property or asset or the assignment of any such lease, license or other contract;

(ii) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any of its Restricted Subsidiaries not otherwise prohibited by this Indenture;

(iii) that is included in a licensing agreement to the extent such restrictions limit the transfer of the property subject to such licensing agreement;

(iv) arising or agreed to in the ordinary course of business and that does not, individually or in the aggregate, detract from the value of property or assets of the Company or any of its Restricted Subsidiaries in any manner material to the Company or any such Restricted Subsidiary as determined in good faith by senior management or the Board of Directors of the Company; and

(v) contained in security agreements, mortgages or similar documents securing Debt of a Restricted Subsidiary of the Company incurred in accordance with this Indenture to the extent those encumbrances or restrictions restrict the transfer of the property subject to such security agreements;

(6) any restriction with respect to a Restricted Subsidiary of the Company or any of its properties or assets imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary (whether by stock sale, asset sale, merger, consolidation or otherwise) pending the closing of such sale or disposition;

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(7) encumbrances or restrictions arising or existing by reason of applicable law, regulation or order;

(8) any encumbrance or restriction under Capitalized Lease Obligations and purchase money obligations for property leased or acquired in the ordinary course of business that impose encumbrances or restrictions of the nature described in Section 4.12(a)(3) on the property so leased or acquired;

(9) customary provisions with respect to the distribution of assets or property in joint venture agreements; and

(10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

SECTION 4.13. Limitation on Affiliate Transactions.

(a) The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1) the terms of the Affiliate Transaction are not less favorable in any material respect to the Company or such Restricted Subsidiary than those that could reasonably be obtained at the time of the Affiliate Transaction in arm’s-length dealings with a Person that is not an Affiliate;

(2) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of (x) $50.0 million, in the case of an Affiliate Transaction or series of related Affiliate Transactions prior to the Fall-Away Event between the Company or any of its Restricted Subsidiaries, on the one hand, and Parent or any Subsidiary of Parent (other than any Subsidiary of the Company), on the other hand, and (y) $25.0 million, the case of any other Affiliate Transaction or series of related Affiliate Transactions, the terms of the Affiliate Transaction are set forth in writing and a majority of the independent directors (as defined from time to time for members of the audit committee for companies that are listed on the New York Stock Exchange) of the Company have determined in good faith that the criteria set forth in Section 4.13(a)(1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors of the Company (it being understood that if there are not at least two independent directors at such time, the requirements of Section 4.13(a)(3) shall apply instead); and

(3) if such Affiliate Transaction or series of related Affiliate Transactions involves an amount in excess of $50.0 million, the Board of Directors of the Company shall also have received a written opinion from an Independent Financial Advisor to the effect

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that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries or is not less favorable to the Company and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person who was not an Affiliate.

(b) The foregoing restrictions shall not apply to:

(1) any Restricted Payment made pursuant to Section 4.09 and any Investment made pursuant to clause (8) or (16) of the definition of “Permitted Investments”;

(2) any issuance of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans and other fair and reasonable compensation, benefits and indemnities paid or entered into in the ordinary course of business by the Company or its Restricted Subsidiaries to or with officers, directors or employees of the Company and its Restricted Subsidiaries, in their capacity as such, approved by the Board of Directors of the Company;

(3) loans or advances to officers, directors or employees of the Company or any of its Restricted Subsidiaries made in the ordinary course of business; provided that such loans or advances do not exceed $5.0 million outstanding at any one time;

(4) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and on market terms;

(5) the issuance or sale of any Capital Stock (other than Disqualified Capital Stock) of the Company;

(6) any transaction with a Person (other than an Unrestricted Subsidiary) that is an Affiliate solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Person;

(7) any transaction on arm’s-length terms with any Person that is not an Affiliate prior to such transaction but becomes an Affiliate as a result of such transaction; and

(8) any agreement as in effect on the Issue Date and described in the Offering Memorandum, and any renewals, amendments or extensions of any such agreement (so long as such renewals, amendments or extensions are not less favorable to the Company and its Restricted Subsidiaries) and the transactions evidenced thereby.

(c) The Company shall conduct all transactions with its Affiliates in accordance with principles of good faith and fair dealing. For the avoidance of doubt, the Company shall not be prohibited by this covenant from maintaining arrangements with or among its Affiliates to share the benefits of economies of scale or other similar benefits in an equitable manner between or among the Company and/or its Affiliates, as reasonably determined by the boards of directors of the Company and such Affiliates.

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SECTION 4.14. Limitation on Sale and Leaseback Transactions.

The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to any property unless:

(1) the Company or such Restricted Subsidiary would be entitled to:

(a) Incur Debt in an amount equal to the Attributable Debt with respect to such Sale and Leaseback Transaction pursuant to Section 4.08; and

(b) create a Lien on such property securing such Attributable Debt without also securing the Notes or the applicable Guarantee pursuant to Section 4.10; and

(2) such Sale and Leaseback Transaction is effected in compliance with Section 4.11.

SECTION 4.15. Designation of Restricted and Unrestricted Subsidiaries.

(a) The Company’s Board of Directors may designate any of its Subsidiaries, including any newly formed Subsidiary or any Person that shall become a Subsidiary of the Company by way of acquisition, to be an Unrestricted Subsidiary subject to the following conditions:

(1) such Subsidiary has no Debt other than Non-Recourse Debt;

(2) except as permitted by Section 4.13, such Subsidiary is not party to any agreement, contract, arrangement or understanding with the Company or any of its Restricted Subsidiaries unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company;

(3) such Subsidiary has not guaranteed or otherwise directly or indirectly provided credit support for any Debt of the Company or any of its Restricted Subsidiaries;

(4) the deemed Investment in such Subsidiary on account of the designation of such Subsidiary as an Unrestricted Subsidiary shall be permitted by Section 4.09; and

(5) the designation of such Subsidiary as an Unrestricted Subsidiary would not cause a Default.

Notwithstanding the foregoing, under no circumstances shall the Co-Issuer be designated an Unrestricted Subsidiary.

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(b) Upon any such designation of a Restricted Subsidiary of the Company as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the newly designated Unrestricted Subsidiary shall be deemed to be an Investment made as of the time of that designation and shall reduce the amount available for Restricted Payments under Section 4.09 or reduce the amount available for future investments under one or more clauses of the definition of “Permitted Investments,” as the Company determines in its sole discretion.

(c) The Company’s Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company subject to the following conditions:

(1) such Subsidiary executes and delivers to the Trustee a supplemental indenture providing for a Subsidiary’s Guarantee if required pursuant to Section 4.16; and

(2) the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary would not cause a Default; it being understood that any Debt, Liens, agreements or transactions of such Unrestricted Subsidiary outstanding at the time of such redesignation shall be deemed to be Incurred or entered into at such time.

SECTION 4.16. Limitation on Guarantees of Debt by Restricted Subsidiaries.

(a) The Company shall not permit (x) any of its Domestic Restricted Subsidiaries (including, for the avoidance of doubt, the Specified Subsidiary) that is not a Subsidiary Guarantor (i) to guarantee the payment of any Debt of Parent, the Company or any of its Restricted Subsidiaries (other than, in the case of the Specified Subsidiary, its guarantee of the Revolving Credit Agreement) or (ii) to Incur any Debt under a Credit Facility, (y) any of its Foreign Restricted Subsidiaries to guarantee the payment of any Debt of Parent, the Company or any of its Domestic Restricted Subsidiaries or (z) the Specified Subsidiary to Incur any Debt (other than its guarantee of the Revolving Credit Agreement) or acquire any assets (other than Equity Interests in or Debt of its Subsidiaries or other nominal assets incidental to a passive holding company), in either case, under this clause (z) at any time that the Specified Subsidiary guarantees the payment of any Debt of Parent, the Company or any of its Restricted Subsidiaries, unless, in any case of clause (a)(x), (y) or (z),

(1) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to this Indenture providing for a Guarantee of payment of the Issuers’ obligations under this Indenture and the Notes by such Restricted Subsidiary; except that if such Debt is by its express terms subordinated in right of payment to the Notes, any such Guarantee of such Restricted Subsidiary with respect to such Debt shall be subordinated in right of payment to such Restricted Subsidiary’s Guarantee with respect to the Notes substantially to the same extent as such Debt is subordinated to the Notes; and

(2) such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that

(a) such supplemental indenture and Guarantee have been duly executed and authorized; and

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(b) such Guarantee of the Notes constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary (subject to customary exceptions and limitations), except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity;

provided, however, that the foregoing provisions of this Section 4.16 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary of the Company and was not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary of the Company.

(b) Prior to the Fall-Away Event, if any (i) Subsidiary of Parent (other than a Foreign Subsidiary) becomes a direct or indirect parent company of the Company or (ii) Foreign Subsidiary of Parent is or becomes a direct or indirect parent of the Company and such Foreign Subsidiary become a guarantor under the Existing Parent 2016 Notes, such Person shall:

(1) execute and deliver a supplemental indenture to this Indenture providing for a Guarantee of payment of the Issuers’ obligations under this Indenture and the Notes by such Person; and

(2) deliver to the Trustee an Opinion of Counsel to the effect that

(a) such supplemental indenture and Guarantee have been duly executed and authorized; and

(b) such Guarantee of the Notes constitutes a valid, binding and enforceable obligation of such Person (subject to customary exceptions and limitations), except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

(c) Prior to the Fall-Away Event, Parent shall not permit any Foreign Subsidiary of Parent that is a direct or indirect parent of the Company and that is not also a Parent Guarantor to Incur any Debt (other than Debt owing to Parent or any of its Subsidiaries) or acquire any assets (other than Equity Interests in or Debt of its Subsidiaries or other nominal assets incidental to a passive holding company). Neither Parent nor any of its Subsidiaries shall engage in any transactions with any such Foreign Subsidiary of Parent described in the immediately preceding sentence in violation of the immediately preceding sentence.

SECTION 4.17. Limitation on Business Activities.

The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, engage in any business other than a Related Business.

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SECTION 4.18. Limitation on Activities of the Co-Issuer.

The Co-Issuer may not hold any material assets, become liable for any material obligations, engage in any trade or business, or conduct any business activity, other than (1) the issuance of its Equity Interests to the Company or any Wholly Owned Restricted Subsidiary of the Company, (2) the Incurrence of Debt as a co-obligor or guarantor, as the case may be, of the Notes, the Credit Facilities and any other Debt that is permitted to be Incurred by the Company under Section 4.08; provided that the proceeds of such Debt are not retained by the Co-Issuer, (3) prior to the Fall-Away Event, the making of intercompany loans and advances permitted by clause (15) of the definition of “Permitted Investments” and (4) activities incidental thereto.

Neither the Company nor any Restricted Subsidiary shall engage in any transactions with the Co-Issuer in violation of the immediately preceding sentence.

SECTION 4.19. Reports of the Company.

(a) Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall provide the Trustee and the Holders of Notes with the following:

(1) within the time period for filing of an Annual Report on Form 10-K for a non-accelerated filer, for each fiscal year, annual reports of the Company containing substantially the same information relating to the Company and its Subsidiaries that would be required to be contained in an Annual Report on Form 10-K under the Exchange Act, including, without limitation, (A) a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) audited financial statements prepared in accordance with U.S. GAAP, including the information required by Rule 3-10 of Regulation S-X with respect to Guarantor and non-Guarantor Subsidiaries of the Company, (C) a presentation of EBITDA of the Company and its Subsidiaries substantially consistent with the presentation thereof in the Offering Memorandum and derived from such financial statements and (D) all pro forma and historical financial information in respect of any significant transaction (as determined in accordance with Rule 3-05 of Regulation S-X under the Securities Act) consummated more than 75 days prior to the date such information is furnished to the extent not previously provided and for the time periods and to the extent such financial information would be required (if the Company were subject to the filing requirements of the Exchange Act) in a filing on Form 8-K with the Commission at such time;

(2) within the time period for filing of a Quarterly Report on Form 10-Q for a non-accelerated filer, for each of the first three fiscal quarters of each fiscal year, reports of the Company containing substantially the same information required to be contained in a Quarterly Report on Form 10-Q under the Exchange Act, including, without limitation, (A) a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) unaudited quarterly financial statements prepared in accordance with U.S. GAAP and as to which the independent public accountants of the Company shall have performed an SAS 100 or similar review, including the information required by Rule 3-10 of Regulation S-X with respect to Guarantor and non-Guarantor Subsidiaries of the

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Company, (C) a presentation of EBITDA of the Company and its Subsidiaries substantially consistent with the presentation thereof in the Offering Memorandum and derived from such financial statements and (D) all pro forma and historical financial information in respect of any significant transaction (as determined in accordance with Rule 3-05 of Regulation S-X under the Securities Act) consummated more than 75 days prior to the date such information is furnished to the extent not previously provided and for the time periods and to the extent such financial information would be required (if the Company were subject to the filing requirements of the Exchange Act) in a filing on Form 8-K with the Commission at such time; and

(3) reasonably promptly following the occurrence of any of the following events, a description in reasonable detail of such event: (i) any change in the directors or executive officers of the Company, (ii) any incurrence of any off-balance sheet obligation (other than lease obligations incurred in the ordinary course of business) or Debt of the Company or any of its Restricted Subsidiaries or, prior to the Fall-Away Event, Holdings, in any case, in an amount in excess of $25.0 million, (iii) the acceleration of any Debt of the Company or any of its Restricted Subsidiaries or, prior to the Fall-Away Event, Holdings, (iv) the entry into of any agreement by Parent or any of its Subsidiaries relating to a transaction that has resulted or is expected to result in a Change of Control, (v) any resignation or termination of the independent accountants of the Company or any engagement of any new independent accountants of the Company, (vi) any determination by the Company or the receipt of advice or notice by the Company from its independent accountants, in either case, relating to non-reliance on previously issued financial statements, a related audit opinion or a completed interim review, (vii) the completion by the Company or any of its Restricted Subsidiaries of the acquisition of assets or an Asset Sale in excess of $5.0 million and (viii) any event of bankruptcy or insolvency that constitutes a Default;

provided, however, that (A) reports provided pursuant to Sections 4.19(a)(1) and (2) shall not be required to comply with (i) Sections 302 (Corporate Responsibility for Financial Reports), 906 (Corporate Responsibility for Financial Reports) and 404 (Management Assessment of Internal Controls) of the Sarbanes-Oxley Act of 2002, and Items 307 (Disclosure Controls and Procedures), 308 (Internal Control Over Financial Reporting) and 402 (Executive Compensation) of Regulation S-K; or (ii) Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any non-U.S. GAAP financial measures contained therein and (B) reports and information provided pursuant to Section 4.19(a)(1), (2) and (3) shall not be required to be accompanied by any exhibits consisting of commercial agreements (not including notes or other debt instruments) with customers or suppliers.

(b) At any time that the Unrestricted Subsidiaries of the Company, taken as a whole, account for at least 10% of the Consolidated EBITDA (calculated for the Company and its Subsidiaries, not just Restricted Subsidiaries) for the period of the most recent four consecutive fiscal quarters for which internal financial statements are available, of the Company and its Subsidiaries, taken as a whole, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company.

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(c) Holdings shall provide the same information as the Company, except that it shall not be required to provide separate information as long as it remains a passive holding company for the Equity Interests of the Company.

(d) In addition, for so long as any Notes are outstanding, unless the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise complies with such reporting requirements, the Company shall either (1) maintain a website (which may be non-public, but shall not restrict the recipients of such information from trading in securities) to which Holders of Notes, prospective investors, securities analysts and market makers that, prior to the Private Placement Legend on the Notes being removed, certify that they are qualified institutional buyers (collectively, “Permitted Parties”) are given access and to which the information required by the preceding paragraphs and the information required by Section 5.04 (the “Required Information”) is posted; or (2) distribute via electronic mail the Required Information to beneficial owners of the Notes and prospective investors that certify that they are Permitted Parties who request to receive such distributions.

(e) In addition, for so long as any Notes are outstanding, the Company shall also:

(1) within 15 business days after filing with the Trustee or filing with the Commission the annual and quarterly information required pursuant to Sections 4.19(a)(1) and (2) above, hold a conference call for Permitted Parties to discuss such reports and the results of operations for the relevant reporting period; and

(2) issue a press release to any U.S. nationally recognized wire service or employ other means commercially reasonably expected to reach Permitted Parties no fewer than three business days prior to the date of the conference call required to be held in accordance with Section 4.19(e)(1) above, announcing the time and date of such conference call and either including all information necessary to access the call or directing Permitted Parties to contact the appropriate Person at the Company to obtain such information.

(f) For so long as any Notes remain outstanding, the Company shall furnish to Holders and securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(g) The Company shall cause the audited financial statements referred to above to be audited by BDO Seidman, LLP, Deloitte & Touche LLP, KPMG LLP, Ernst & Young LLP, Grant Thornton LLP or PricewaterhouseCoopers LLP or any of their respective successors.

(h) Delivery of the above reports and the reports required by Section 5.04 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers’ or any Guarantor’s compliance with any of its covenants in this Indenture (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate of the Company) or any other agreement or document.

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SECTION 4.20. Suspension of Covenants.

(a) Following the first day (the “Suspension Date”) that (1) the Notes have an Investment Grade Rating from both of the Rating Agencies and (2) no Default has occurred and is continuing under this Indenture, the Company and its Restricted Subsidiaries shall not be subject to Sections 4.08, 4.09, 4.11, 4.12, 4.13 and 6.01(a)(3)(B) (collectively, the “Suspended Covenants”). In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Company and the Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants with respect to future events. The period of time between the Suspension Date and the Reversion Date is referred to as the “Suspension Period.” Notwithstanding that the Suspended Covenants may be reinstated, no Default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period.

(b) On the Reversion Date, all Debt Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.08(a) or (b) (to the extent such Debt would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Debt Incurred prior to the Suspension Date and outstanding on the Reversion Date). To the extent such Debt would not be so permitted to be Incurred pursuant to Section 4.08, such Debt shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.08(b)(1). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.09 shall be made as though such covenant had been in effect prior to, but not during, the Suspension Period (and, for avoidance of doubt, all Consolidated Net Income and other amounts attributable to the Suspension Period that would otherwise increase the amount of Restricted Payments available to be made pursuant to any clause (including Section 4.09(a)(3)(A)) of Section 4.09 shall be excluded in determining the amount of Restricted Payments available to be made following the Reversion Date). For purposes of determining compliance with Section 4.11(a), on the Reversion Date, the Net Available Cash from all Asset Sales not applied in accordance with such covenant shall be deemed to be reset to zero.

(c) The Company shall deliver written notice to the Trustee of the occurrence of a Suspension Date or a Reversion Date.

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ARTICLE FIVE

CERTAIN COVENANTS OF PARENT

All of the following restrictive covenants shall be applicable to Parent and its Subsidiaries (until the occurrence of a Fall-Away Event):

SECTION 5.01. Existence.

Parent will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each Subsidiary in accordance with their respective organizational documents, and the material rights, licenses and franchises of Parent and each Subsidiary, provided that Parent is not required to preserve any such right, license or franchise, or the existence of any Subsidiary, if the maintenance or preservation thereof is no longer desirable in the conduct of the business of Parent and its Subsidiaries taken as a whole; and provided further that this Section does not prohibit any transaction otherwise permitted by Section 6.01(d).

SECTION 5.02. Limitation on Incurrence of Additional Debt.

(a) Parent shall not, and shall not permit any Subsidiary to, Incur, directly or indirectly, any Debt unless the pro forma Parent Net Debt to EBITDA Ratio at the date of such Incurrence is less than 4.75 to 1.0.

(b) Notwithstanding Section 5.02(a), Parent or any of its Subsidiaries may issue the following Debt:

(1) (i) the Existing Parent Notes and the guarantees thereof and (ii) Guarantees of the Notes;

(2) Debt outstanding on August 14, 2008;

(3) Debt, the proceeds of which are used to refinance any Debt permitted by clause (b)(1) or (2) above or permitted by Section 5.02(a); provided, however, that (a) the principal amount of the Debt so issued does not exceed the principal amount of the Debt so refinanced and (b) the Debt so issued (i) does not mature prior to the stated maturity of the Debt so refinanced and (ii) is subordinated on a pari passu basis to the extent that the Debt being refinanced is so subordinated;

(4) Debt owed to and held by a: (i) Wholly Owned Subsidiary of Parent or a Substantially Wholly Owned Subsidiary of Parent; and (ii) Subsidiary of Parent;

(5) Debt of a Subsidiary of Parent owed to or held by Parent;

(6) Debt of Parent or any of its Subsidiaries pursuant to (i) interest rate swap or similar agreements designed to protect Parent or such Subsidiary against fluctuations in interest rates or interest rate indices in respect of Debt of Parent or such Subsidiary to the extent the notional principal amount of such obligation does not exceed the aggregate principal amount of the Debt to which such interest rate contracts relate and (ii) foreign exchange or commodity hedge, exchange or similar agreements designed to protect Parent or such Subsidiary against fluctuations in foreign currency exchange rates or commodity prices in respect of foreign exchange or commodity exposures incurred by Parent or such Subsidiary;

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(7) Acquired Debt, provided that after giving effect to the incurrence thereof, Parent could incur at least $1.00 of Debt under the Parent Net Debt to EBITDA Ratio test set forth in Section 5.02(a);

(8) Debt of Parent or any of its Subsidiaries, which may include Capitalized Lease Obligations, incurred no later than 365 days after the date of purchase or completion of construction or improvement of property (including Capital Stock) for the purpose of financing all or any part of the purchase price or cost of construction or improvement, provided that the principal amount of any Debt incurred pursuant to this clause may not, prior to March 1, 2011, exceed $30.0 million (or the equivalent thereof at the time of determination) and, on or after March 1, 2011, exceed $60.0 million (or the equivalent thereof at the time of determination);

(9) Debt of Parent or any of its Subsidiaries incurred to pay all or a portion of the purchase price of the acquisition or lease of equipment, vehicles and services used in the ordinary course of the business of Parent or its Subsidiaries; provided that such Debt is incurred within 360 days prior to or after any such acquisition (or addition, improvement or construction);

(10) Debt of Parent or any of its Subsidiaries consisting of guarantees of Debt of Parent or any of its Subsidiaries Incurred under any other clause of this Section 5.02;

(11) Debt of Parent or any of its Subsidiaries to the extent the net proceeds thereof are promptly used to purchase Notes in connection with a tender offer effected by Parent or an Affiliate of Parent or deposited to defease or discharge all of the outstanding Notes, in each case, in accordance with this Indenture;

(12) All obligations of Parent or any of its Subsidiaries for the reimbursement of any obligor on any letter of credit, banker’s acceptance, surety bond or similar credit transaction; provided that if at any time after the issuance of such letter of credit, surety bond or other similar credit transaction there is a drawing thereunder, such drawing must, as of the date thereof, then otherwise be permitted pursuant to this Section 5.02; and

(13) Debt of Parent and/or its Subsidiaries incurred on or after August 4, 2006 not otherwise permitted in an aggregate principal amount at any time outstanding not to exceed the greater of (i) $50.0 million (or the equivalent amount thereof at the time of determination) or (ii) 25% of Parent EBITDA of Parent and its Subsidiaries for the then most recently concluded period of four consecutive fiscal quarters for which financial statements are publicly available.

(c) For purposes of determining compliance with this Section 5.02: (i) in the event that an item of Debt meets the criteria of more than one of the types of Debt described above, including Section 5.02(a), Parent, in its sole discretion, may classify, and from time to time may reclassify, such item of Debt, in any manner that complies with this Section 5.02; and (ii) Debt permitted by this Section 5.02 (including paragraph 5.02(a) above) need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 5.02 permitting such Debt.

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(d) For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Debt, the U.S. dollar equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate determined on the date of incurrence, in the case of term Debt, or first committed, in the case of revolving credit Debt. Notwithstanding any other provision of this Section 5.02, neither Parent nor any of its Subsidiaries shall, with respect to any outstanding Debt incurred, be deemed to be in violation of this covenant solely as a result of fluctuations in the exchange rates of currencies.

(e) With respect to any holder of Debt of Parent or any of its Subsidiaries, such holder of Debt (or its assignee) shall not be deemed to have provided such Debt to Parent or any such Subsidiary in violation of this Indenture if such holder of such Debt or its agent or representative (a) had no actual knowledge at the time of the incurrence of such Debt that such incurrence violated this Indenture and (b) shall have received an Officer’s Certificate of Parent to the effect that the incurrence of such Debt does not violate the provisions of this Indenture.

(f) In connection with an acquisition or disposition of a company, division or line of business (an “Acquired Entity”) for which audited or reviewed financial statements are not available, Parent EBITDA for such Acquired Entity shall be calculated in good faith by Parent based upon management reports or other similar information (“Initial Parent EBITDA”). Notwithstanding any other provision of this Section 5.02, neither Parent nor any of its Subsidiaries shall, with respect to any Debt Incurred pursuant to this Initial Parent EBITDA calculation (the “New Debt”), be deemed to be in violation of this Section 5.02; provided, however, that Parent shall be required by the date that is 90 days following the consummation of the acquisition of the Acquired Entity to recalculate Parent EBITDA, for the period of four consecutive fiscal quarters for which financial statements of Parent are publicly available (or a period most closely coinciding with such period to the extent that the fiscal year of the Acquired Entity does not correspond to the fiscal year of Parent, using financial statements of the Acquired Entity that have been audited or subjected to a limited review (“Recalculated Parent EBITDA”). If (1) the Recalculated Parent EBITDA is less than the Initial Parent EBITDA and (2) as a result, Parent or any Subsidiary Incurred new Debt that exceeded (by an amount in excess of $15.0 million) what it would have been permitted to Incur using Recalculated Parent EBITDA, then the Parent or any of its Subsidiaries within 90 days thereafter shall be required to repay such amount of New Debt that would ensure that it would have been in compliance with this Section 5.02 had it used Recalculated Parent EBITDA to determine the amount of Debt it was permitted to Incur thereunder.

SECTION 5.03. Limitation on Distributions.

(a) Parent shall not directly or indirectly (the payments and other actions in this Section 5.03 being collectively referred to as “Distributions”):

(1) declare or pay any dividend or make any distribution on its Equity Interests;

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(2) purchase, redeem or otherwise acquire or retire for value any of its Equity Interests; or

(3) repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt, except a payment of interest or principal at stated maturity date thereof;

unless, at the time of, and after giving effect to, the proposed Distribution:

(w) no Default has occurred and is continuing;

(x) Parent could Incur at least $1.00 of Debt under the Parent Net Debt to EBITDA Ratio test set forth under Section 5.02;

(y) the aggregate amount expended for all Distributions made on or after August 4, 2006 would not, subject to the paragraph below, exceed:

(I) in any fiscal year in which aggregate net income, determined in accordance with Brazilian GAAP, is positive, 50% of the amount of net income accrued during such fiscal year; or

(II) in any fiscal year in which aggregate net income is a loss, an aggregate amount not to exceed $30.0 million (or the equivalent thereof at the time of determination); and

(z) the ratio of Current Assets of Parent to Current Liabilities of Parent is no less than 1.00 to 1.00.

(b) Sections 5.03(a)(1), (2) and (3) shall not prohibit the declaration and payment of mandatory dividends, in an amount equivalent to not more than 25% of Parent’s adjusted net income (as defined under Brazilian Corporate Law), including in the form of interest attributable to Parent’s outstanding capital; provided that the payment of such amounts is required under the Brazilian Corporate Law and Parent’s by-laws and that Parent’s Board of Directors, with the approval of its fiscal council, if in existence at such time, has not reported to the general shareholders’ meeting that the distribution would be inadvisable given the financial condition of Parent.

(c) From March 1, 2011, Parent shall not pay any dividend or make any distributions on its Equity Interests, payable to or in respect of any Control Person of Parent, unless at least 50% of any such dividend or distribution payable to or in respect of any such Control Person is used to reduce any outstanding loans made by Parent to any such Control Person.

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SECTION 5.04. Reports of Parent.

(a) Parent shall provide the Trustee and the Holders of Notes with the following:

(1) as soon as available and in any event by no later than 120 days after the end of each fiscal year of Parent, annual audited consolidated financial statements in English of Parent, prepared in accordance with Brazilian GAAP and accompanied by an opinion of independent public accountants, which opinion shall be based upon an examination made in accordance with Brazilian GAAP;

(2) as soon as available and in any event by no later than 60 days after the end of each of the first three fiscal quarters of each fiscal year of Parent, quarterly unaudited consolidated financial statements in English of Parent prepared in accordance with Brazilian GAAP; and

(3) as soon as available (without duplication), English language versions or summaries of such other reports or notices that may be filed or submitted by (and promptly after filing or submission by) Parent with the Brazilian Novo Mercado or any other stock exchange on which securities of Parent may be listed (in each case, to the extent that any such report or notice is generally available to its security holders or the public in Brazil or elsewhere).

(b) Parent shall cause the audited financial statements referred to above to be audited by a foreign affiliate of BDO Seidman, LLP, Deloitte & Touche LLP, KPMG LLP, Ernst & Young LLP, Grant Thornton LLP or PricewaterhouseCoopers LLP or any of their respective successors.

ARTICLE SIX

SUCCESSOR CORPORATION

SECTION 6.01. Mergers, Consolidations, Etc.

(a) The Company shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets determined on a consolidated basis to, another Person or adopt a Plan of Liquidation unless:

(1) either

(A) the Company is the Surviving Person; or

(B) the Person, if other than the Company, formed by such consolidation or into which the Company is merged or the Person that acquires the properties and assets of the Company substantially as an entirety or in the case of a plan of liquidation, the Person to which assets of the Company have been transferred, shall be a corporation or limited liability company organized and existing under the laws of the United States or any State of the United States or the District of Columbia; provided, however, that if the Person formed by such consolidation or into which the Company is merged or the Person that acquires the properties and assets of the Company substantially as an entirety is a limited liability

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company, the Co-Issuer shall be a co-obligor on the Notes or the Company or such Surviving Person shall cause a Restricted Subsidiary of the Company that is a corporation to become a co-obligor on the Notes;

(2) such Surviving Person, if other than the Company, assumes all of the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

(3) immediately after giving effect to that transaction and the use of the proceeds from that transaction, on a pro forma basis, including giving effect to any Debt Incurred or anticipated to be Incurred in connection with that transaction and the use of the proceeds from that transaction,

(A) no Default or Event of Default shall have occurred and be continuing; and

(B) except in the case of a consolidation or merger of the Company with or into a Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor or a sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the Company’s assets to a Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor, immediately after giving effect to such transaction, such Surviving Person shall be able to Incur $1.00 of additional Debt under Section 4.08(a); and

(4) the Company delivers to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of related transactions) of all or substantially all of the properties and assets of one or more Restricted Subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties or assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. Notwithstanding clause (3) of this Section 6.01(a),

(A) any Restricted Subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties and assets to the Company, and

(B) the Company may merge with one of its Affiliates solely for the purpose of reorganizing the Company in another jurisdiction in the United States to realize tax or other benefits.

In the event of any transaction (other than a lease) referred to in and complying with the conditions listed in Section 6.01(a)(1) in which the Company is not the Surviving Person and the Surviving Person is to assume all the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture, that Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of the Company, and the Company shall be discharged from its obligations under this Indenture and the Notes.

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(b) The Co-Issuer shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets determined on a consolidated basis to another Person or adopt a plan of liquidation unless:

(1) either

(A) the Co-Issuer is the Surviving Person; or

(B) the Person, if other than the Co-Issuer, formed by such consolidation or into which the Co-Issuer is merged or the Person that acquires by conveyance, transfer or lease the properties and assets of the Co-Issuer substantially as an entirety, shall be a corporation organized and existing under the laws of the United States or any State of the United States or the District of Columbia;

(2) such Surviving Person, if other than the Co-Issuer, assumes all of the obligations of the Co-Issuer under the Notes and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee and shall be in compliance with Section 4.18;

(3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(4) the Company delivers to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied;

provided that, in the event the Company becomes a corporation or the Company or the Person formed by or surviving any consolidation or merger permitted in accordance with the terms of this Indenture) is a corporation, the Co-Issuer may be dissolved in accordance with this Indenture and may cease to be an Issuer.

(c) Each Subsidiary Guarantor (other than any Subsidiary Guarantor whose Guarantee is to be released in accordance with the terms of the Guarantee and this Indenture in connection with any transaction complying with Section 4.11) shall not, and the Company shall not cause or permit any Subsidiary Guarantor to, consolidate with or merge with or into any Person other than the Company or any other Subsidiary Guarantor unless:

(1) unless the Subsidiary Guarantor is a Foreign Subsidiary, the entity formed by or surviving any such consolidation or merger (if other than the Subsidiary Guarantor) is a corporation, partnership or limited liability company organized and existing under the laws of the United States or any State of the United States or the District of Columbia;

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(2) such entity surviving any such consolidation or merger (if other than the Subsidiary Guarantor) assumes by supplemental indenture all of the obligations of the Subsidiary Guarantor on the Guarantee;

(3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(4) the Company delivers to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied.

In connection with any merger or consolidation of a Subsidiary Guarantor with and into the Company (with the Company being the surviving entity) or another Subsidiary Guarantor that is a Wholly Owned Restricted Subsidiary, the Company must deliver to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied.

(d) Prior to the Fall-Away Event, Parent shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets determined on a consolidated basis to, another Person or adopt a Plan of Liquidation unless:

(1) either

(A) Parent is the Surviving Person; or

(B) the Person, if other than Parent, formed by such consolidation or into which Parent is merged or the Person that acquires the properties and assets of Parent substantially as an entirety or in the case of a plan of liquidation, the Person to which assets of Parent have been transferred, shall be a corporation or limited liability company organized and existing under the laws of the Federative Republic of Brazil or any political subdivision thereof or any other country member of the Organization for Economic Co-operation and Development (OECD);

(2) such Surviving Person, if other than Parent, assumes all of the obligations of Parent under its Guarantee and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

(3) immediately after giving effect to that transaction and the use of the proceeds from that transaction, on a pro forma basis, including giving effect to any Debt Incurred or anticipated to be Incurred in connection with that transaction and the use of the proceeds from that transaction, no Default or Event of Default caused by an action or an inaction of, or an event, condition or circumstance affecting, Parent or its Subsidiaries (other than the Company or its Subsidiaries) shall have occurred and be continuing; and

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(4) Parent delivers to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of related transactions) of all or substantially all of the properties and assets of one or more Subsidiaries of Parent, the Capital Stock of which constitutes all or substantially all of the properties or assets of Parent, shall be deemed to be the transfer of all or substantially all of the properties and assets of Parent. Notwithstanding the foregoing clause (3) of this Section 6.01(d), any Subsidiary of Parent may consolidate with, merge into or transfer all or part of its properties and assets to Parent.

In the event of any transaction (other than a lease) referred to in and complying with the conditions listed in Section 6.01(d) in which Parent is not the Surviving Person and the Surviving Person is to assume all the obligations of Parent under the Notes and this Indenture pursuant to a supplemental indenture, that Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of Parent, and Parent shall be discharged from its obligations under its Guarantee and this Indenture.

ARTICLE SEVEN

DEFAULT AND REMEDIES

SECTION 7.01. Events of Default.

Each of the following is an “Event of Default”:

(1) the failure to pay interest, including Special Interest, if any, on the Notes when that interest or Special Interest, as the case may be, becomes due and payable and the Default continues for 30 days;

(2) the failure to pay principal of or premium, if any, on the Notes when that principal or premium, if any, becomes due and payable, at maturity, upon redemption or otherwise;

(3) the failure to comply with Section 6.01;

(4) the failure to comply with any obligation under Section 4.07 (other than a failure to purchase Notes, which shall be an Event of Default under clause (2) above) or Sections 4.11 (other than a failure to purchase Notes, which shall be an Event of Default under clause (2) above), 4.08, 4.09, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16 (with respect to Section 4.16(b) and (c), prior to the Fall-Away Event only), 4.17, 4.18 or, prior to the Fall-Away Event, Sections 5.02 or 5.03, which failure continues for a period of 30 days after the Company receives a written notice specifying the default from the Trustee or Holders of at least 25% in outstanding aggregate principal amount of Notes;

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(5) the failure to comply with any obligations in the covenants in Section 4.19 or, prior to the Fall-Away Event, Section 5.04 or failure to observe or perform any other covenant or agreement contained in the Notes or this Indenture, which failure continues for a period of 60 days after the Company receives a written notice specifying the default from the Trustee or Holders of at least 25% in outstanding aggregate principal amount of Notes;

(6) Debt of the Company, any Subsidiary Guarantor or any Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor or Significant Subsidiary of the Parent is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Debt unpaid or accelerated exceeds $35.0 million;

(7) failure by the Company, any of its Restricted Subsidiaries or, prior to the Fall-Away Event, Parent or any of its Significant Subsidiaries to pay or discharge final judgments for the payment of money entered by a court or courts of competent jurisdiction aggregating in excess of $35.0 million, which judgments are not discharged, waived or stayed (to the extent not covered by insurance) for a period of 60 consecutive days following entry of such final judgments or decrees during which a stay of enforcement of each such final judgment or decree, by reason of pending appeal or otherwise, is not in effect;

(8) the Company, any Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor or any Significant Subsidiary of Parent, pursuant to or within the meaning of any Bankruptcy Law:

(a) commences a voluntary case,

(b) consents to the entry of an order for relief against it in an involuntary case,

(c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or

(d) makes a general assignment for the benefit of its creditors;

or takes any comparable action under foreign laws relating to insolvency;

(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(a) is for relief against the Company, any Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor or any Significant Subsidiary of Parent, as debtor in an involuntary case,

(b) appoints a Custodian of the Company, any Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor or any Significant Subsidiary of Parent, or

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(c) orders the liquidation of the Company, any Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor or any Significant Subsidiary of Parent,

or any similar relief is granted under any foreign laws, or takes any comparable action under any foreign law relating to insolvency; and the order, decree or similar relief remains unstayed and in effect for 60 days; or

(10) any Guarantee of a Significant Subsidiary of the Company or, prior to the Fall-Away Event, any Parent Guarantor ceases to be in full force and effect, or is declared to be null and void and unenforceable by a judicial determination, or is found to be invalid by a judicial determination, any Guarantor that is a Significant Subsidiary of the Issuers or, prior to the Fall-Away Event, any Parent Guarantor denies its obligations under its Guarantee (in each case, other than by reason of release of a Guarantor in accordance with the terms of this Indenture); and

(11) prior to the Fall-Away Event, payment is made by the Company or any of its Restricted Subsidiaries in respect of any of their respective guarantees of the Existing Parent 2016 Notes or any other guarantee Incurred pursuant to clause (16) of the definition of “Permitted Investments”.

SECTION 7.02. Acceleration.

(a) If any Event of Default (other than those of the type in clause (8) or (9) of Section 7.01 with respect to the Company or, prior to the Fall-Away Event, Parent) occurs and is continuing, the Trustee may, and the Trustee upon the written request of Holders of at least 25% in outstanding aggregate principal amount of the then outstanding Notes shall, or the Holders of at least 25% in outstanding aggregate principal amount of then outstanding Notes may, declare the principal of all the Notes, together with all accrued and unpaid interest, premium, if any, and Special Interest, if any, to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that such notice is a notice of acceleration, and the same shall become immediately due and payable.

(b) If an Event of Default of the type referred to in clause (8) or (9) of Section 7.01 relating to the Company or, prior to the Fall-Away Event, Parent occurs and is continuing, then such amount with respect to all the Notes shall ipso facto become due and payable immediately without any declaration or other act on the part of the Trustee or any Holder.

(c) At any time after a declaration of acceleration with respect to the Notes, the Holders of a majority in outstanding aggregate principal amount of the then outstanding Notes (by notice to the Trustee) may rescind and cancel that declaration and its consequences if:

(i) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction;

(ii) all existing Defaults and Events of Default have been cured or waived except nonpayment of principal of or interest on the Notes that has become due solely by such declaration of acceleration;

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(iii) to the extent the payment of such interest is lawful, interest (at the same rate specified in the Notes) on overdue installments of interest and overdue payments of principal which has become due otherwise than by such declaration of acceleration has been paid;

(iv) the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses, disbursements and advances; and

(v) in the event of the cure or waiver of an Event of Default of the type in clause (6) of Section 7.01, the Trustee has received an Officer’s Certificate of the Company and Opinion of Counsel that such Event of Default has been cured or waived.

SECTION 7.03. Other Remedies.

If a Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or interest on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon a Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

SECTION 7.04. Waiver of Past Defaults.

Subject to Sections 2.09, 7.07 and 10.02, the Holders of a majority in principal amount of the outstanding Notes (which may include consents obtained in connection with a tender offer or exchange offer of Notes) by written notice to the Trustee may waive an existing Default and its consequences, except a Default in the payment of principal of, or interest on, any Note as specified in Section 7.01(1) or (2). The Company shall deliver to the Trustee an Officer’s Certificate stating that the requisite percentage of Holders have consented to such waiver and attaching copies of such consents. When a Default is waived, it is cured and ceases.

SECTION 7.05. Control by Majority.

The Holders of not less than a majority in principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. Subject to Section 8.01, however, the Trustee may refuse to follow any direction that conflicts with any law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of another Holder, or that may involve the Trustee in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

In the event the Trustee takes any action or follows any direction pursuant to this Indenture, the Trustee shall be entitled to indemnification satisfactory to it against any loss or expense caused by taking such action or following such direction.

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SECTION 7.06. Limitation on Suits.

No Holder shall have any right to institute any proceeding with respect to this Indenture or for any remedy thereunder, unless the Trustee:

(1) has failed to act for a period of 60 days after receiving written notice of a continuing Event of Default by such Holder and a request to act by Holders of at least 25% in aggregate principal amount of Notes outstanding;

(2) has been offered indemnity satisfactory to it in its reasonable judgment; and

(3) has not received from the Holders of a majority in aggregate principal amount of the outstanding Notes a direction inconsistent with such request.

However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement of payment of the principal of or interest on such Note on or after the due date therefor.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

SECTION 7.07. Rights of Holders To Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of, and interest on, a Note, on or after the respective due dates therefor, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder.

SECTION 7.08. Collection Suit by Trustee.

If a Default in payment of principal or interest specified in Section 7.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount of principal and accrued interest and fees remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate per annum borne by the Notes and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 7.09. Trustee May File Proofs of Claim.

The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relating to the Issuers, their creditors or their property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same, and any Custodian in any such judicial proceedings is hereby authorized by each Holder to make such payments to the

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Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee under Section 8.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. The Trustee shall be entitled to participate as a member of any official committee of creditors in the matters as it deems necessary or advisable.

SECTION 7.10. Priorities.

If the Trustee collects any money or property pursuant to this Article Seven, it shall pay out the money or property in the following order:

First: to the Trustee for amounts due under Section 8.07;

Second: to Holders for interest accrued on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest;

Third: to Holders for principal amounts due and unpaid on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal; and

Fourth: to the Issuers or, if applicable, the Guarantors, as their respective interests may appear.

The Trustee, upon prior notice to the Issuers, may fix a record date and payment date for any payment to Holders pursuant to this Section 7.10.

SECTION 7.11. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07, or a suit by a Holder or Holders of more than 10% in principal amount of the outstanding Notes.

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ARTICLE EIGHT

TRUSTEE

SECTION 8.01. Duties of Trustee.

(a) If a Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(b) Except during the continuance of a Default:

(1) The Trustee need perform only those duties as are specifically set forth herein or in the Trust Indenture Act and no duties, covenants, responsibilities or obligations shall be implied in this Indenture against the Trustee.

(2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates (including Officer’s Certificates) or opinions (including Opinions of Counsel) furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) Notwithstanding anything to the contrary herein, the Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) This paragraph does not limit the effect of Section 8.01(b).

(2) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05.

(d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or to take or omit to take any action under this Indenture or take any action at the request or direction of Holders if it shall have reasonable grounds for believing that repayment of such funds is not assured to it.

(e) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 8.01.

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(f) The Trustee shall not be liable for the investment of or for interest on any money received by it except as the Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) In the absence of bad faith, negligence or willful misconduct on the part of the Trustee, the Trustee shall not be responsible for the application of any money by any Paying Agent other than the Trustee.

SECTION 8.02. Rights of Trustee.

Subject to Section 8.01:

(a) The Trustee may rely conclusively on any resolution, certificate (including any Officer’s Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate and an Opinion of Counsel, which shall conform to the provisions of Section 12.05. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent (other than an agent who is an employee of the Trustee) appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers under this Indenture.

(e) The Trustee may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby.

(g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officer’s Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to the Issuers, to examine the books, records, and premises of the Issuers, personally or by agent or attorney at the sole cost of the Issuers.

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(h) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(i) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as duties.

(j) Except with respect to Sections 4.01 and 4.05, the Trustee shall have no duty to inquire as to the performance of the Issuers with respect to the covenants contained in Article Four. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Section 4.01, 7.01(1) or 7.01(2) or (ii) any Default or Event of Default of which the Trustee shall have received written notification.

(k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, each Agent appointed hereunder and to each agent, custodian and other Person employed to act hereunder.

(l) Notwithstanding any provision in this Indenture to the contrary, in no event shall the Trustee be liable for any failure or delay in the performance of its obligations under this Indenture because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Indenture, inability to obtain material, equipment, or communications or computer facilities, or the failure of equipment or interruption of communications or computer facilities, and other causes beyond its control whether or not of the same class or kind as specifically named above.

(m) The Trustee may at any time request that any of the Issuers and/or Guarantors deliver an Officer’s Certificate setting forth the specimen signatures and the names of individuals and/or titles of Officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(n) In no event shall the Trustee be responsible or liable for special, indirect, consequential or punitive loss or damage of any kind whatsoever (including, but not limited to, loss of profit), irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

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SECTION 8.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers, their Subsidiaries or its respective Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee must comply with Sections 8.10 and 8.11.

SECTION 8.04. Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers in this Indenture or any document issued in connection with the sale of Notes (including, without limitation, the Offering Memorandum) or any statement in the Notes other than the Trustee’s certificate of authentication. The Trustee makes no representations with respect to the effectiveness or adequacy of this Indenture or the Notes.

SECTION 8.05. Notice of Default.

If a Default occurs and is continuing and the Trustee receives actual notice of such Default, the Trustee shall mail to each Holder notice of the uncured Default within 30 days after such Default occurs. Except in the case of a Default in payment of principal of, or interest on, any Note, including an accelerated payment and the failure to make a payment on the Change of Control Payment Date pursuant to a Change of Control Offer or the Net Proceeds Payment Date pursuant to an Asset Sale Offer, or a Default in complying with the provisions of Article Five, the Trustee may withhold the notice if and so long as the Board of Directors, the executive committee, or a trust committee of directors and/or Responsible Officers, of the Trustee in good faith determines that withholding the notice is in the interest of the Holders.

SECTION 8.06. Reports by Trustee to Holders.

Within 60 days after each April 1, beginning with April 1, 2010, the Trustee shall, to the extent that any of the events described in Trust Indenture Act § 313(a) occurred within the previous twelve months, but not otherwise, mail to each Holder a brief report dated as of such date that complies with Trust Indenture Act § 313(a). The Trustee also shall comply with Trust Indenture Act §§ 313(b), 313(c) and 313(d).

A copy of each report at the time of its mailing to Holders shall be mailed to the Issuers and filed with the Commission and each securities exchange, if any, on which the Notes are listed.

The Issuers shall notify the Trustee in writing if the Notes become listed on any securities exchange or of any delisting thereof and the Trustee shall comply with Trust Indenture Act § 313(d).

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SECTION 8.07. Compensation and Indemnity.

Each of the Issuers and the Guarantors shall, jointly and severally, pay to the Trustee from time to time such compensation as the Issuers and the Trustee shall from time to time agree in writing for its services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee upon request for all reasonable disbursements, expenses and advances (including, without limitation, reasonable fees and expenses of counsel) incurred or made by it in addition to the compensation for its services, except any such disbursements, expenses and advances as may be attributable to the Trustee’s negligence, bad faith or willful misconduct. Such expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel.

Each of the Issuers and the Guarantors shall, jointly and severally, indemnify each of the Trustee and any predecessor Trustee and its officers, directors, employees or agents for, and hold them harmless against, any and all loss, damage, claims including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), liability or expense incurred by it except for such actions to the extent caused by any negligence, bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust or exercise of its rights, powers or duties (including the reasonable fees and expenses of counsel) including, without limitation, the reasonable costs and expenses of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of the Trustee’s rights, powers or duties hereunder. The Trustee shall notify the Issuers promptly of any claim asserted against the Trustee or any of its agents for which it may seek indemnity. The Issuers may, subject to the approval of the Trustee (which approval shall not be unreasonably withheld), defend the claim and the Trustee shall cooperate in the defense. The Trustee and its agents subject to the claim may have separate counsel and the Issuers shall pay the reasonable fees and expenses of such counsel. The Issuers need not pay for any settlement made without their written consent. The Issuers need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through its negligence, bad faith or willful misconduct.

To secure the Issuers’ payment obligations in this Section 8.07, the Trustee shall have a Lien prior to the Notes against all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal and interest on particular Notes.

When the Trustee incurs expenses or renders services after a Default specified in Section 7.01 (8) or (9) occurs, such expenses and the compensation for such services shall be paid to the extent allowed under any Bankruptcy Law.

Notwithstanding any other provision in this Indenture, the foregoing provisions of this Section 8.07 shall survive the satisfaction and discharge of this Indenture, payment of the Notes, or the appointment of a successor Trustee.

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SECTION 8.08. Replacement of Trustee.

The Trustee may resign at any time by so notifying the Issuers in writing. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Issuers and the Trustee in writing and may appoint a successor Trustee. The Issuers may remove the Trustee if:

(1) the Trustee fails to comply with Section 8.10;

(2) the Trustee is adjudged a bankrupt or an insolvent;

(3) a receiver or other public officer takes charge of the Trustee or its property; or

(4) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall notify each Holder of such event and shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Immediately after that, the retiring Trustee shall transfer, after payment of all sums then owing to the Trustee pursuant to Section 8.07, all property held by it as Trustee to the successor Trustee, subject to the Lien provided in Section 8.07, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the Holders of at least 10% in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee at the expense of the Issuers.

If the Trustee fails to comply with Section 8.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Issuers’ obligations under Section 8.07 shall continue for the benefit of the retiring Trustee.

SECTION 8.09. Successor Trustee by Merger, Etc.

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business (including this transaction) to, another corporation, the resulting, surviving or transferee corporation without any further act shall, if such resulting, surviving or transferee corporation is otherwise eligible hereunder, be the successor Trustee; provided that such corporation shall be otherwise qualified and eligible under this Article Eight.

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SECTION 8.10. Eligibility; Disqualification.

This Indenture shall always have a Trustee who satisfies the requirement of Trust Indenture Act §§ 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus of at least $150,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Trust Indenture Act § 310(b); provided, however, that there shall be excluded from the operation of Trust Indenture Act § 310(b)(1) any indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Issuers are outstanding, if the requirements for such exclusion set forth in Trust Indenture Act § 310(b)(1) are met. The provisions of Trust Indenture Act § 310 shall apply to the Issuers and any other obligor of the Notes.

SECTION 8.11. Preferential Collection of Claims Against the Issuers.

The Trustee, in its capacity as Trustee hereunder, shall comply with Trust Indenture Act § 311(a), excluding any creditor relationship listed in Trust Indenture Act § 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture Act § 311(a) to the extent indicated.

ARTICLE NINE

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 9.01. Satisfaction and Discharge.

The Company may discharge this Indenture such that it shall cease to be of further effect, except as to surviving rights when:

(1) either

(a) all the Notes previously authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has previously been deposited in trust or segregated and held in trust by the Company and is thereafter repaid to the Company or discharged from the trust) have been delivered to the Trustee for cancellation; or

(b) all Notes not previously delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) shall become due and payable at their maturity within one year, or

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(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of a redemption by the Trustee,

and in the case of (i), (ii) or (iii), the Company has deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. Legal Tender, non-callable U.S. Government Securities, or a combination of such cash and non-callable U.S. Government Securities, in such amounts as shall be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire Debt on the Notes not previously delivered to the Trustee for cancellation for principal, premium, if any, and interest and Special Interest, if any, on the Notes to the date of deposit, in the case of Notes that have become due and payable, or to the stated maturity or redemption date, as the case may be;

(2) the Company has paid or caused to be paid all other sums payable by the Issuers under this Indenture; and

(3) the Company delivers to the Trustee an Officer’s Certificate and Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been satisfied.

SECTION 9.02. Legal Defeasance and Covenant Defeasance.

(a) The Company may, at its option and at any time, elect to terminate all its, the Co-Issuer’s and the Guarantors’ obligations with respect to the then outstanding Notes, the Guarantees and this Indenture (“legal defeasance”), except for:

(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, or interest and Special Interest, if any, on those Notes when these payments are due from the defeasance trust referred to below;

(2) the Issuers’ obligations with respect to the issuance of temporary Notes, the registration of Notes, the status of mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties, indemnities and immunities of the Trustee and the Issuers’ and the Guarantors’ obligations in connection with those rights, powers, trusts, duties, indemnities and immunities; and

(4) the Issuers’ obligations under the defeasance provisions contained in this Indenture.

(b) In addition, the Company may, at its option and at any time, elect to release its, the Co-Issuer’s and the Guarantors’ obligations with respect to specified covenants (“covenant defeasance”) and thereafter any failure by the Company or its Restricted Subsidiaries or Parent and its Subsidiaries to comply with those covenants shall not constitute a Default or an Event of Default with respect to the Notes.

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(c) If the Company exercises legal defeasance, payment of the Notes may not be accelerated as a result of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (4), (5), (6), (7), (8) (with respect only to Significant Subsidiaries), (9) (with respect only to Significant Subsidiaries) and (10) in Section 7.01 or because of the failure of the Company to comply with Section 6.01(a)(3)(A) or 6.01(a)(3)(B) or of Parent to comply with Section 6.01(d)(3).

The Company may exercise its legal defeasance option notwithstanding its prior exercise of covenant defeasance.

SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.

In order to exercise either legal defeasance or covenant defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust (the “defeasance trust”), for the benefit of the Holders, cash in U.S. Legal Tender, non-callable U.S. Government Securities or a combination of cash and non-callable U.S. Government Securities, sufficient, in the opinion of a firm of independent public accountants of recognized international standing, to pay the principal, premium, if any, and interest and Special Interest, if any, on the outstanding Notes on the Maturity Date or on a Redemption Date, as the case may be, and the Company must specify whether the Notes are being defeased to the Maturity Date or to that Redemption Date;

(2) in the case of legal defeasance only, the Company must deliver to the Trustee an Opinion of Counsel confirming that:

(a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or

(b) since the Issue Date, there has been a change in the applicable federal income tax law, and

(c) based on the ruling obtained under clause (a) or the change in tax law referred to under clause (b), the Holders of the outstanding Notes shall not recognize income, gain or loss for federal income tax purposes as a result of legal defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if legal defeasance had not occurred;

(3) in the case of covenant defeasance, the Company must deliver to the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes shall not recognize income, gain or loss for federal income tax purposes as a result of covenant defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if covenant defeasance had not occurred;

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(4) in the case of legal defeasance only, no Event of Default from bankruptcy or insolvency events shall have occurred at any time in the period ending on the 91st day after the cash and/or non-callable U.S. Government Securities have been deposited in the defeasance trust;

(5) legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

(6) in the case of legal defeasance only, the Company must deliver to the Trustee an Opinion of Counsel, subject to customary exceptions and assumptions, to the effect that on the 91st day following the deposit, the defeasance trust funds shall not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws generally affecting creditors’ rights;

(7) the Company must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

(8) the Company must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the legal defeasance or the covenant defeasance have been complied with.

Notwithstanding the foregoing, the Opinion of Counsel required by clause (2) above with respect to a legal defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (a) have become due and payable, (b) shall become due and payable on the Maturity Date within one year or (c) as to which a redemption notice has been given calling the Notes for redemption within one year, under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.

SECTION 9.04. Application of Trust Money.

The Trustee or Paying Agent shall hold in trust U.S. Legal Tender and U.S. Government Securities deposited with it pursuant to this Article Nine, and shall apply the deposited U.S. Legal Tender and the money from U.S. Government Securities in accordance with this Indenture to the payment of the principal of and the interest on the Notes. The Trustee shall be under no obligation to invest said U.S. Legal Tender and U.S. Government Securities, except as it may agree in writing with the Issuers.

The Issuers shall pay and indemnify and hold harmless the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Legal Tender and U.S. Government Securities deposited pursuant to Section 9.03 or the principal and interest received in respect thereof, other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

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Anything in this Article Nine to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from time to time upon the Issuers’ written request any U.S. Legal Tender and U.S. Government Securities held by it as provided in Section 9.03 which, in the opinion of a firm of independent public accountants of recognized international standing expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would then be required to be deposited to effect an equivalent legal defeasance or covenant defeasance.

SECTION 9.05. Repayment to the Issuers.

The Trustee and the Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years; provided that the Trustee or such Paying Agent, before being required to make any payment, may at the expense of the Issuers cause to be published once in a newspaper of general circulation in the City of New York or mail to each Holder entitled to such money notice that such money remains unclaimed and that after a date specified therein which shall be at least 30 days from the date of such publication or mailing any unclaimed balance of such money then remaining shall be repaid to the Issuers. After payment to the Issuers, Holders entitled to such money must look to the Issuers for payment as general creditors unless an applicable law designates another Person.

SECTION 9.06. Reinstatement.

If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender and U.S. Government Securities in accordance with this Article Nine by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, or if the funds deposited with the Trustee to effect covenant defeasance are insufficient to pay the principal of, and interest on, the Notes when due, the Issuers’ obligations under this Indenture, and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article Nine until such time as the Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender and U.S. Government Securities in accordance with this Article Nine; provided that if the Issuers have made any payment of interest on, or principal of, any Notes because of the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the U.S. Legal Tender and U.S. Government Securities held by the Trustee or Paying Agent.

ARTICLE TEN

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 10.01. Without Consent of Holders.

(a) The Company and the Trustee, together, may amend or supplement this Indenture, the Notes or any Guarantee without notice to or consent of any Holder to:

(1) cure any ambiguity, omission, defect or inconsistency;

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(2) provide for the assumption by a successor entity of the obligations of an Issuer or a Guarantor under this Indenture;

(3) provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);

(4) add additional Guarantees or additional obligors with respect to the Notes;

(5) secure the Notes;

(6) add to the covenants of the Issuers for the benefit of the Holders or surrender any right or power conferred upon the Issuers;

(7) make any other change that does not adversely affect the rights of any Holder in any material respect;

(8) comply with any requirement of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act of 1939;

(9) provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the Issue Date;

(10) conform the text of this Indenture, the Notes or any Guarantee to any provision of the section entitled “Description of notes” in the Offering Memorandum to the extent that such provision in such “Description of notes” was intended to be a verbatim recitation of a provision of this Indenture, the Notes or such Guarantee (provided that clause (9) of the definition of “Debt” has been added in this Indenture, clause (12) of the definition of “Permitted Investments” has been deleted in this Indenture and clause (2) of the definition of “Consolidated Interest Expense” has been deleted in this Indenture, and such differences from the “Description of notes” are intended); or

(11) provide for the Fall-Away Amendment;

provided that the Company has delivered to the Trustee an Opinion of Counsel and an Officer’s Certificate, each stating that such amendment or supplement complies with the provisions of this Section 10.01.

SECTION 10.02. With Consent of Holders.

(a) Subject to Section 7.07, the Company and the Trustee, together, with the written consent of the Holder or Holders of a majority in aggregate principal amount of the outstanding Notes may amend or supplement this Indenture, the Notes or the notation of Guarantee, without notice to any other Holders. Subject to Section 7.07, the Holder or Holders of a majority in aggregate principal amount of the outstanding Notes may waive compliance with any provision of this Indenture, the Notes or the notation of Guarantee without notice to any other Holders.

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(b) Notwithstanding Section 10.02(a), without the consent of each Holder affected, no amendment or waiver may:

(1) reduce the amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the rate of or change the time for payment of interest, including defaulted interest, on any Notes;

(3) reduce the principal of or change the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption or repurchase, or reduce the redemption or repurchase price for those Notes (except, in the case of repurchases, as would otherwise be permitted under clause (7) and (10) of this Section 10.02(a));

(4) make any Note payable in money other than that stated in the Notes and this Indenture;

(5) impair the right of any Holder to receive payment of principal, premium, interest and Special Interest, if any, on that Holder’s Notes on or after the due dates for those payments, or to bring suit to enforce that payment on or with respect to such Holder’s Notes or any Guarantee;

(6) modify the provisions contained in this Indenture permitting Holders of a majority in principal amount of the Notes to waive a Default;

(7) after the Issuers’ obligation to purchase the Notes arises under this Indenture, amend, modify or change the obligation of the Issuers to make or consummate a Change of Control Offer or waive any default in the performance of that Change of Control Offer or modify any of the provisions or definitions with respect to any such offer;

(8) release Parent or any Guarantor that is a Significant Subsidiary of the Company or Parent from any of its obligations under its Guarantee or this Indenture otherwise than in accordance with the terms of this Indenture;

(9) subordinate the Notes or any Guarantee in right of payment to any other obligation of the Issuers or the applicable Guarantor; or

(10) at any time after the Company is obligated to make an Asset Sale Offer pursuant to Section 4.11, change the time at which such offer to purchase must be made or at which the Notes must be repurchased pursuant thereto.

(c) It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, supplement or waiver but it shall be sufficient if such consent approves the substance thereof.

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(d) A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with an exchange (in the case of an exchange offer) or a tender (in the case of a tender offer) of such Holder’s Notes shall not be rendered invalid by such tender or exchange.

(e) After an amendment, supplement or waiver under this Section 10.02 becomes effective, the Issuers shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

SECTION 10.03. Compliance with the Trust Indenture Act.

From the date on which this Indenture is qualified under the Trust Indenture Act, every amendment, waiver or supplement of this Indenture, the Notes or any Guarantee shall comply with the Trust Indenture Act as then in effect.

SECTION 10.04. Revocation and Effect of Consents.

Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to his Note or portion of his Note by written notice to the Trustee or the Issuers received before the date on which the Trustee receives an Officer’s Certificate of the Company certifying that the Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such consent) to the amendment, supplement or waiver.

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date. The Issuers shall inform the Trustee in writing of the fixed record date if applicable.

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change referred to in any of clauses (1) through (10) of Section 10.02(b), in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of, and interest on, a Note, on or after the respective due dates therefor, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

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SECTION 10.05. Notation on or Exchange of Notes.

If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the Holder of the Note to deliver it to the Trustee. The Issuers shall provide the Trustee with an appropriate notation on the Note about the changed terms and cause the Trustee to return it to the Holder at the Issuers’ expense. Alternatively, if the Issuers or the Trustee so determines, the Issuers in exchange for the Note shall issue, and the Trustee shall authenticate, a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

SECTION 10.06. Trustee To Sign Amendments, Etc.

The Trustee shall execute any amendment, supplement or waiver authorized pursuant to this Article Ten; provided that the Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects the Trustee’s own rights, duties or immunities under this Indenture. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel and an Officer’s Certificate of the Company each stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article Ten is authorized or permitted by this Indenture and constitutes legal, valid and binding obligations of the Issuers and the Guarantors enforceable in accordance with its terms. Such Officer’s Certificate and Opinion of Counsel shall be at the expense of the Issuers.

ARTICLE ELEVEN

GUARANTEE

SECTION 11.01. Guarantee.

Subject to this Article Eleven, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that: (a) the principal of and interest on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuers to the Holders or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise (all of the foregoing being hereinafter collectively called the “Guaranteed Obligations”).

Each Guarantor waives presentation to, demand of, payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (1) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuers or

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any other Person (including any Guarantor) under this Indenture, the Notes or any other agreement or otherwise; (2) any extension or renewal of any thereof; (3) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (4) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (5) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (6) except as set forth in Section 11.05 or 11.06, any change in the ownership of such Guarantor.

Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations.

Except as expressly set forth in Sections 9.02(a), 11.02, 11.05 and 11.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law or equity.

Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuers or otherwise.

In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of such Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by law) and (C) all other monetary Guaranteed Obligations of the Company to the Holders and the Trustee.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

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Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Seven hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Seven hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee.

SECTION 11.02. Limitation on Guarantor Liability.

Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. federal, state or foreign law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that, any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

SECTION 11.03. Additional Amounts.

(a) All payments made by any Guarantor which is not formed or incorporated under the laws of the United States or any State of the United States or the District of Columbia (each, a “non-U.S. Guarantor”) under or with respect to such non-U.S. Guarantor’s Guarantee shall be made free and clear of and without withholding or deduction for or on account of any present or future Taxes imposed or levied by or on behalf of any Taxing Authority within Brazil or other jurisdiction in which such non-U.S. Guarantor is organized or engaged in business for tax purposes (any of the aforementioned being a “Taxing Jurisdiction”), unless such non-U.S. Guarantor is required to withhold or deduct Taxes by law or by the interpretation or administration thereof. If any non-U.S. Guarantor is required to withhold or deduct any amount for or on account of Taxes imposed by a Taxing Authority within Brazil, or within any other Taxing Jurisdiction, from any payment made under or with respect to the Guarantee of such non-U.S. Guarantor, such non-U.S. Guarantor shall pay such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by each Holder of Notes (including Additional Amounts) after such withholding or deduction shall equal the amount the Holder would have received if such Taxes had not been withheld or deducted; provided, however, that no Additional Amounts shall be payable with respect to:

(1) any Tax imposed by the United States or by any political subdivision or Taxing Authority thereof or therein;

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(2) any Taxes that would not have been so imposed, deducted or withheld but for the existence of any connection between the Holder or beneficial owner having an interest in a Note (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over, the Holder or beneficial owner of such Note, if the Holder or beneficial owner is an estate, nominee, trust, partnership or corporation) and the relevant Taxing Jurisdiction (other than the mere receipt of such payment or the ownership or holding of the execution, delivery, registration or enforcement of such Note);

(3) any estate, inheritance, gift, sales excise, transfer or personal property Tax or similar Tax, assessment or governmental charge, subject to Section 11.03(f);

(4) any Taxes payable otherwise than by deduction or withholding from payments under or with respect to the Guarantee by any non-U.S. Guarantor of such Note;

(5) any Taxes that would not have been so imposed, deducted or withheld if the Holder or beneficial owner of a Note or beneficial owner having an interest in the Note or beneficial owner of any payment on the Guarantee of such Note had (i) made a declaration of non-residence, or any other claim or filing for exemption, to which it is entitled or (ii) complied with any certification, identification, information, documentation or other reporting requirement concerning the nationality, residence, identity or connection with the relevant Taxing Jurisdiction of such Holder or beneficial owner of such Note or any payment on such Note (provided that (x) such declaration of non-residence or other claim or filing for exemption or such compliance is required by the applicable law of the Taxing Jurisdiction as a precondition to exemption from, or reduction in the rate of the imposition, deduction or withholding of, such Taxes and (y) at least 30 days prior to the first payment date with respect to which such declaration of non-residence or other claim or filing for exemption or such compliance is required under the applicable law of the Taxing Jurisdiction, Holders at that time have been notified by such Guarantor or any other Person through whom payment may be made that a declaration of non-residence or other claim or filing for exemption or such compliance is required to be made);

(6) any Taxes that would not have been so imposed, deducted or withheld if the beneficiary of the payment had presented the Note for payment within 30 days after the date on which such payment or such Note became due and payable or the date on which payment thereof is duly provided for, whichever is later (except to the extent that the Holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 30-day period);

(7) any payment under or with respect to a Note to any Holder that is a fiduciary or partnership or any Person other than the sole beneficial owner of such payment or Note, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such partnership or the beneficial owner of such payment or Note would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder of such Note; or

(8) any combination of items (1) through (7) above.

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(b) The foregoing provisions shall survive any termination or discharge of this Indenture and payment of the Notes and shall apply mutatis mutandis to any Taxing Jurisdiction with respect to any successor Person to a non-U.S. Guarantor.

(c) Each applicable non-U.S. Guarantor shall also make any applicable withholding or deduction and remit the full amount deducted or withheld to the relevant authority in accordance with applicable law. Each applicable non-U.S. Guarantor shall furnish to the Trustee, within 30 days after the date on which the payment of any Taxes deducted or withheld is due pursuant to applicable law, certified copies of tax receipts or, if such tax receipts are not reasonably available to such non-U.S. Guarantor, such other documentation that provides reasonable evidence of such payment by such non-U.S. Guarantor. Copies of such receipts or other documentation shall be made available to the Holders or the Paying Agent, as applicable, upon request.

(d) At least 30 days prior to each date on which any payment under or with respect to any Notes is due and payable, unless such obligation to pay Additional Amounts arises after the 30th day prior to such date, in which case it shall be promptly paid thereafter, if any non-U.S. Guarantor shall be obligated to pay Additional Amounts with respect to such payment, such non-U.S. Guarantor shall deliver to the Trustee and the Paying Agent an Officer’s Certificate stating the fact that such Additional Amounts shall be payable and the amounts so payable and shall set forth such other information necessary to enable such Trustee and Paying Agent to pay such Additional Amounts to Holders of such Notes on the payment date. Each Officer’s Certificate shall be relied upon until receipt of a further Officer’s Certificate addressing such matters.

(e) Whenever in this Indenture there is mentioned, in any context, the payment of principal, premium, if any, interest or of any other amount payable under or with respect to any Note, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.

(f) The non-U.S. Guarantors shall pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of their respective Guarantees of the Notes, this Indenture or any other document or instrument in relation thereto, excluding all such taxes, charges or similar levies imposed by any jurisdiction outside the United States in which any non-U.S. Guarantor or any successor Person is organized or resident for tax purposes or any jurisdiction in which a Paying Agent is located, and the non-U.S. Guarantors shall agree to indemnify the Holders of the Notes for any such non-excluded taxes paid by such Holders.

SECTION 11.04. Execution and Delivery of Guarantee.

To evidence its Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Guarantee substantially in the form of Exhibit F shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by an Officer.

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Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee.

If an Officer whose signature is on this Indenture or on the notation of Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a notation of Guarantee is endorsed, the Guarantee shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

SECTION 11.05. Release of a Subsidiary Guarantor.

A Guarantee by a Subsidiary Guarantor of the Notes shall be automatically and unconditionally released and discharged upon:

(1) any sale, exchange or transfer, to any Person not an Affiliate of the Company, of all of the Capital Stock in, or all or substantially all the assets of, such Subsidiary, which sale, exchange or transfer is not prohibited by this Indenture;

(2) in the case of a Guarantee required by Section 4.16(a)(x)(i) or (a)(y), the release or discharge of the guarantee that resulted in the creation of such Guarantee except a discharge or release by or as a result of payment under such guarantee;

(3) in the case of a Guarantee required by Section 4.16(a)(x)(ii), the release or discharge of the Debt that resulted in the creation of such Guarantee except a discharge or release by or as a result of payment of such Debt following any default under such Debt;

(4) in the case of a Guarantee required by Section 4.16(a)(z), the release or discharge of the Debt that resulted in the creation of such Guarantee except a discharge or release by or as a result of payment of such Debt following any default under such Debt, or the release or discharge of the guarantee that, together with incurrence of Debt or acquisition of assets, resulted in the creation of such Guarantee except a discharge or release by or as a result of payment under such guarantee; or

(5) the exercise of the legal defeasance option or the covenant defeasance option under Section 9.02 or if the obligations of the Issuers under this Indenture are otherwise discharged in accordance with the terms of this Indenture;

provided that, in the case of clause (2), (3) or (4), the Guarantee shall only be released if the Guarantee would not otherwise be required under Section 4.16 (by reason of other guarantees, other Debt or, in the case of the Specified Subsidiary, assets).

In addition, any Guarantee by a Restricted Subsidiary of the Company shall be automatically and unconditionally released and discharged if the Company designates such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with this Indenture.

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Upon the release of any Guarantor in accordance with this Indenture, the Company shall deliver an Officer’s Certificate to the Trustee notifying the Trustee of the release and stating that such release complies with the terms of this Indenture.

Each Subsidiary Guarantor may consolidate with or merge into or sell its assets to an Issuer or another Subsidiary Guarantor without limitation, or with other Persons upon the terms and conditions set forth in Section 6.01 of this Indenture.

The Trustee shall execute an appropriate instrument prepared by the Company evidencing the release of a Subsidiary Guarantor from its obligations under its Guarantee and this Indenture upon receipt of a request by the Company or such Subsidiary Guarantor accompanied by an Officer’s Certificate and an Opinion of Counsel certifying as to the compliance with this Section 11.05.

SECTION 11.06. Release of Guarantees of Parent Guarantors and Fall-Away of Covenants of Parent.

(a) The Guarantees by the Parent Guarantors shall be automatically and unconditionally released and discharged upon:

(1) the occurrence of a Fall-Away Event; or

(2) the exercise of the legal defeasance option or the covenant defeasance option under Section 9.02 or if the obligations of the Issuers under this Indenture are otherwise discharged in accordance with the terms of this Indenture.

(b) Notwithstanding anything to the contrary in this Indenture, in the event that Section 4.09(b)(12) and clause (15) of the definition of “Permitted Investments” (together, the “Fall-Away Baskets”) may be eliminated from this Indenture (other than pursuant to Section 4.20) without causing a conflict with or resulting in a breach or violation of the Existing Parent Notes or any other Debt of Parent or any of its Subsidiaries and the conditions below are satisfied, at the Company’s election, the Company may enter into a supplemental indenture (a “Fall-Away Amendment”) with the Trustee (without the consent of any Holders of Notes), which provides for the following (the “Fall-Away Event”):

(1) unconditional release of the Parent Guarantors from their Guarantees;

(2) elimination of the Fall-Away Baskets;

(3) elimination of the covenants set forth under (i) Section 4.16(b) and (c), (ii) Article Five, (iii) Section 4.19(a)(3) (with respect to references to Holdings only) and (iv) Section 6.01(d); and

(4) elimination of Events of Default arising under the following clauses in Section 7.01: (3) (with respect to breaches of Section 6.01(d)), (4) (with respect to breaches of Section 4.16(b) and (c) and Article Five), (5) (with respect to breaches of Section 5.04), (6), (7), (8), (9) (in each case of clauses (6), (7), (8) and (9), with respect to events and circumstances with respect to Parent and its Subsidiaries other than the Company and its Subsidiaries) and (11) (in its entirety), and delete references to Parent under sections 7.02(a) and (b).

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(c) The Fall-Away Event shall be subject to the additional conditions precedent:

(1) any continuing guarantee by the Company or any of its Restricted Subsidiaries of the Existing Parent 2016 Notes or other Debt of Parent shall cease to be permitted pursuant to clause (1) or clause (17) of the definition of “Permitted Debt” and shall cease to be permitted pursuant to clause (2) or clause (16) of the definition of “Permitted Investments,” and the Fall-Away Event shall not be permitted unless such guarantee is then permitted by other exceptions in Section 4.08 (it being understood that such guarantee shall not be permitted to be reallocated to clause (7) of the definitions of “Permitted Debt”) and Section 4.09;

(2) immediately before and after giving effect to the Fall-Away Event (including the Fall-Away Amendment and the condition set forth in clause (1) above), (i) no Default or Event of Default shall have occurred and be continuing or would result from the Fall-Away Event; (ii) the Company shall be able to Incur an additional $1.00 of Debt pursuant to Section 4.08(a); (iii) the amount calculated pursuant to Section 4.09(a)(3) shall be positive or zero; (iv) no Investments shall be outstanding under clause (15) of the definition of “Permitted Investments”; and (v) any Debt Incurred under clause (3) of the definition of “Permitted Debt” which is subject to the first proviso thereof shall be subordinated in right of payment to the payment and performance of such Issuer’s obligations under the Notes or Subsidiary Guarantor’s obligations under its Guarantee; and

(3) the Company shall have delivered to the Trustee an Officer’s Certificate and Opinion of Counsel stating that all conditions precedent under this Indenture relating to the Fall-Away Event have been satisfied (including, without limitation, non-contravention of elimination of the Fall-Away Baskets from this Indenture with the Existing Parent Notes or any other Debt of Parent or any of its Subsidiaries).

(d) Concurrently upon delivery to the Trustee of an Officer’s Certificate of the Company and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the Fall-Away Event have been satisfied, the Trustee shall execute any documents reasonably required in order to evidence the release of the Parent Guarantors from their obligations under the Guarantees.

SECTION 11.07. No Waiver.

Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article Eleven shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article Eleven at law, in equity, by statute or otherwise.

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SECTION 11.08. Modification.

No modification, amendment or waiver of any provision of this Article 11, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.

ARTICLE TWELVE

MISCELLANEOUS

SECTION 12.01. Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the Trust Indenture Act, such required or deemed provision shall control.

SECTION 12.02. Notices.

Any notices or other communications required or permitted hereunder shall be in English and in writing (including by facsimile transmission), and shall be sufficiently given if made by hand delivery, by telex, by internationally recognized overnight courier service, by telecopier or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to the Issuers or a Guarantor:

c/o JBS USA, LLC

Attention: Chief Financial Officer

1770 Promontory Circle

Greeley, CO 80634

Facsimile: (970) 506-8323

if to the Trustee:

The Bank of New York Mellon

101 Barclay Street, 4 East

New York, NY 10286

Facsimile: (213) 815-5603

Each of the Issuers and the Trustee by written notice to each other such Person may designate additional or different addresses for notices to such Person. Any notice or communication to the Issuers and the Trustee, shall be deemed to have been given or made upon actual receipt thereof.

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Any notice or communication mailed to a Holder shall be mailed to him by first class mail or other equivalent means at his address as it appears on the registration books of the Registrar and shall be sufficiently given to him if so mailed within the time prescribed.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

In respect of this Indenture, the Trustee shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by electronic transmission is, in fact, a person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such e-mail; and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, directions, reports, notices or other communications or information to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.

SECTION 12.03. Communications by Holders with Other Holders.

Holders may communicate pursuant to Trust Indenture Act § 312(b) with other Holders with respect to their rights under this Indenture, the Notes or the Guarantees. The Issuers, the Trustee, the Registrar and any other Person shall have the protection of Trust Indenture Act § 312(c).

SECTION 12.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee at the request of the Trustee:

(1) an Officer’s Certificate of the Company, in form and substance satisfactory to the Trustee, stating that, in the opinion of the signers, all conditions precedent to be performed or effected by the Issuers or the Guarantors, if applicable, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

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SECTION 12.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture, other than the Officer’s Certificate required by Section 4.05, shall include a statement to the following effect:

(1) the Person making such certificate or opinion has read such covenant or condition;

(2) describing the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with or satisfied; and

(4) whether or not, in the opinion of each such Person, such condition or covenant has been complied with; provided, however, that with respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.

SECTION 12.06. Rules by Paying Agent or Registrar.

The Paying Agent or Registrar may make reasonable rules and set reasonable requirements for their functions.

SECTION 12.07. Judgment Currency.

The Issuers and the Guarantors, jointly and severally, agree to indemnify each of the Holders and the Trustee against any loss incurred by such Person as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order, and (ii) the rate of exchange at which such Holders or the Trustee is able to purchase United States dollars with the amount of the Judgment Currency actually received by the Person. The foregoing indemnity shall constitute a separate and independent obligation of the Issuers and the Guarantors and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency.

SECTION 12.08. Legal Holidays.

If a payment date is not a Business Day, payment may be made on the next succeeding day that is a Business Day with the same force and effect as if payment was made on such date and no interest shall accrue in respect of such payment for the intervening period.

SECTION 12.09. Governing Law; Submission to Jurisdiction; Waiver of Immunity.

(a) This Indenture, the Notes and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York.

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(b) By the execution and delivery of this Indenture, each of Parent and any other non-U.S. Guarantors (i) acknowledge that they have, by separate written instrument, designated and appointed National Corporate Research, with an office on the Issue Date at 10 East 40th Street, 10th Floor, New York 10016 (“NCR”) (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Indenture, the Notes and any Guarantee that may be instituted in any federal or state court in The City of New York, Borough of Manhattan, State of New York or brought under federal or state securities laws, and acknowledges that NCR has accepted such designation, (ii) submits to the jurisdiction of any such court in any such suit or proceeding and (iii) agrees that service of process upon NCR and written notice of said service to Parent in accordance with Section 12.02 shall be deemed in every respect effective service of process upon them, in any such suit or proceeding. Each of Parent and any other such non-U.S. Guarantors further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of NCR in full force and effect so long as any of the Notes shall be outstanding; provided that each of Parent and any other such non-U.S. Guarantors may and to the extent NCR ceases to be able to be served on the basis contemplated herein shall, by written notice to the Trustee, designate such additional or alternative agent for service of process under this paragraph (c) that (i) maintains an office located in the Borough of Manhattan, City of New York, State of New York and (ii) is either (x) counsel for such Person or (y) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business. Such written notice shall identify the name of such agent for service of process and the address of the office of such agent for service of process in the Borough of Manhattan, City of New York, State of New York.

(c) To the extent that Parent or any other such non-U.S. Guarantors have or hereafter may acquire any immunity from jurisdiction of any court of (i) any jurisdiction in which it owns or leases property or assets, (ii) the United States or the State of New York or (iii) the Federative Republic of Brazil, any political subdivision thereof or any other jurisdiction of any country or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to themselves or their property and assets or this Indenture, the Notes and the Guarantees or actions to enforce judgments in respect of any thereof, such Person hereby irrevocably waives such immunity in respect of their obligations under the above-referenced documents, to the extent permitted by law.

SECTION 12.10. Waiver of Jury Trial.

ALL PARTIES HERETO HEREBY IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

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SECTION 12.11. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture, loan or debt agreement of Parent or any of its Subsidiaries. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

SECTION 12.12. No Personal Liability of Directors, Officers, Employees and Stockholders.

No past, present or future director, officer, employee, incorporator or stockholder, as such, of an Issuer or any Guarantor shall have any liability for any obligations of the Issuers or of the Guarantors under the Notes, this Indenture, the Guarantees or for any claim based on, in respect of, or by reason of, those obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. This waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy.

SECTION 12.13. Successors.

All agreements of the Issuers and the Guarantors in this Indenture, the Notes and the Guarantees shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successor.

SECTION 12.14. Duplicate Originals.

All parties may sign any number of copies of this Indenture. Each signed copy or counterpart shall be an original, but all of them together shall represent the same agreement.

SECTION 12.15. Severability.

To the extent permitted by applicable law, in case any one or more of the provisions in this Indenture, the Notes or any Guarantee shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

SECTION 12.16. English Language.

This Indenture has been negotiated and executed in the English language. All certificates, reports, notices and other documents and communications delivered or delivered pursuant to this Indenture (including any modifications or supplements hereto), shall be in the English language, or accompanied by a certified English translation thereof. Except in the case of (i) laws or official communications of Brazil, (ii) documents filed with any governmental authority in Brazil or (iii) corporate documents of the non-U.S. Guarantors, in the case of any document originally issued in a language other than English, the English language version of any such document shall for purposes of this Indenture, and absent manifest error, control the meaning of the matters set out therein.

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SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the date first written above.

JBS USA, LLC, as Issuer
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS USA FINANCE, INC., as Co-Issuer
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary

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GUARANTORS:
JBS USA HOLDINGS, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
S&C RESALE COMPANY
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
SWIFT BEEF COMPANY
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
MILLER BROS. CO., INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS TRADING INTERNATIONAL, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary

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SWIFT & COMPANY INTERNATIONAL
SALES CORPORATION
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
SWIFT PORK COMPANY
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
SWIFT BRANDS COMPANY
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
PACKERLAND DISTRIBUTION, LLC
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
CALF SOURCE, LLC
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS GREEN BAY, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary

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PACKERLAND TRANSPORT, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS PLAINWELL, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS PACKERLAND, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
JBS SOUDERTON, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
MOYER DISTRIBUTION LLC
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
MOPAC OF VIRGINIA, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary

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JBS TOLLESON, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
CATTLE PRODUCTIONS SYSTEMS, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
MF CATTLE FEEDING, INC.
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary
SKIPPACK CREEK CORPORATION
By:
	Name:	Christopher C. Gaddis
	Title:	Bond Secretary

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			JBS S.A., as Guarantor
			By:
				Name:
				Title:
Witnesses:
By:
	Name:	LUISA BARRETO
	RG:	46 048981 1
By:
	Name:	EVELLIN RAMOS
	RG:	33 166 260-7

S-6

JBS HUNGARY HOLDINGS KFT., as Guarantor
By:
	Name:
	Title:	Managing Director
By:
	Name:
	Title:	Managing Director

S-7

THE BANK OF NEW YORK MELLON,
as Trustee
By:
	Name:
	Title:

S-8

EXHIBIT A
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]
JBS USA, LLC
JBS USA FINANCE, INC.
11.625% Senior Notes 2014
CUSIP No.
No.	$
JBS USA, LLC, a Delaware limited liability company, and JBS USA FINANCE, INC., a Delaware corporation (the “Issuers”), for value received promise to pay to                              or its registered assigns, the principal sum of                         [or such other amount as is provided in a schedule attached hereto]1 on May 1, 2014.
Interest Payment Dates: May 1 and November 1, commencing November 1, 2009.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Note contained herein, which shall for all purposes have the same effect as if set forth at this place.

¹ This language should be included only if the Note is issued in global form.

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IN WITNESS WHEREOF, the Issuers have caused this Note to be signed manually or by facsimile by its duly authorized Officer.

Dated:

JBS USA, LLC, as Issuer
By:
	Name:
	Title:
JBS USA FINANCE, INC., as Co-Issuer
By:
	Name:
	Title:

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 11.625% Senior Notes due 2014 described in the within-mentioned Indenture.

Dated:

THE BANK OF NEW YORK MELLON,
as Trustee
By:
	Name:
	Title:	Authorized Signatory

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(Reverse of Note)

11.625% Senior Notes due 2014

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

SECTION 1. Interest. JBS USA, LLC, a Delaware limited liability company (the “Company”), and JBS USA FINANCE, INC., a Delaware corporation (together with the Company, the “Issuers”), promise to pay interest on the principal amount of this Note at 11.625% per annum from April 27, 2009 until maturity. The Issuers shall pay interest semi-annually on May 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day with the same force and effect as if payment was made on such date and no interest shall accrue in respect of such payment for the intervening period (each an “Interest Payment Date”), commencing November 1, 2009. Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. The Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand to the extent lawful at the interest rate applicable to the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 2. Method of Payment. The Issuers shall pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on the April 15 and October 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be issued in denominations of $2,000 or an integral multiple of $1,000 in excess thereof. The Issuers shall pay principal, premium, if any, and interest on the Notes in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts (“U.S. Legal Tender”). Principal, premium, if any, and interest on the Notes shall be payable at the office or agency of the Issuers maintained for such purpose except that, at the option of the Issuers, the payment of interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the register of Holders of Notes; provided that for Holders of at least $5.0 million in principal amount of the Notes that have given written wire transfer instructions to the Issuers and the Trustee at least ten Business Days prior to the applicable payment date, the Issuers shall make all payments of principal, premium and interest by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Until otherwise designated by the Issuers, the Issuers’ office or agency in New York shall be the office of the Trustee maintained for such purpose.

SECTION 3. Paying Agent and Registrar. Initially, The Bank of New York Mellon, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar without notice to any Holder. Except as provided in the Indenture, the Issuers or any of their Subsidiaries may act in any such capacity.

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SECTION 4. Indenture. The Issuers issued the Notes under an Indenture dated as of April 27, 2009 (“Indenture”) by and among the Issuers, the Guarantors and the Trustee, as amended or supplemented from time to time in accordance with the terms thereof. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the “Trust Indenture Act”). The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms.

SECTION 5. Optional Redemption. The Company may choose to redeem the Notes at any time. If it does so, it may redeem all or any portion of the Notes, at once or over time, after giving the required notice under the Indenture. To redeem the Notes, the Company must pay a Redemption Price equal to the greater of:

(a) 101% of the principal amount of the Notes to be redeemed; and

(b) the present value at the Redemption Date (in each case, discounted from the applicable scheduled payment date) of (1) 100% of the principal amount of the Notes to be redeemed plus (2) the remaining scheduled payments of interest from the Redemption Date through the Maturity Date (but excluding accrued and unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Yield (determined on the second Business Day immediately preceding the Redemption Date) plus 50 basis points,

plus, in either case, accrued and unpaid interest, including Special Interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).

Any notice to the Holders of Notes of such a redemption must include the appropriate calculation of the Redemption Price, but need not include the Redemption Price itself. The actual Redemption Price must be set forth in an Officer’s Certificate of the Company delivered to the Trustee no later than two Business Days prior to the Redemption Date.

SECTION 6. Notice of Redemption. Notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof shall be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the Redemption Date interest ceases to accrue on Notes or portions thereof called for redemption.

SECTION 7. Mandatory Redemption. The Issuers are not required to make any mandatory redemption or sinking fund payments with respect to the Notes. The Issuers or the Company may be required to offer to purchase the Notes pursuant to Sections 4.07 and 4.11 of the Indenture. The Issuers may at any time and from time to time purchase the Notes in the open market or otherwise.

A-5

SECTION 8. Repurchase at Option of Holder. Upon the occurrence of a Change of Control, and subject to certain conditions set forth in the Indenture, the Issuers shall be required to offer to purchase all of the outstanding Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the date of repurchase.

The Company is, subject to certain conditions and exceptions, obligated to make an offer to purchase Notes at 100% of their principal amount, plus accrued and unpaid interest, if any, thereon to the date of repurchase, with certain net cash proceeds of certain sales or other dispositions of assets in accordance with the Indenture.

SECTION 9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Issuers, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuers and the Registrar are not required to transfer or exchange any Note selected for redemption. Also, the Issuers and the Registrar are not required to transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed.

SECTION 10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes.

SECTION 11. Amendment. Subject to certain exceptions, the Indenture and the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or compliance with any provision may be waived with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or consent of any Holder, the parties thereto may amend or supplement the Indenture and the Notes to, among other things, cure any ambiguity, defect or inconsistency in the Indenture, provide for uncertificated Notes in addition to certificated Notes, or comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act.

SECTION 12. Defaults and Remedies. If a Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes generally may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of a Default arising from certain events of bankruptcy or insolvency as set forth in the Indenture, with respect to the Issuers, all outstanding Notes shall become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture and the Notes. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal or interest including an accelerated payment or the failure to make a payment on the Change of Control Payment Date or the Net Proceeds Payment Date pursuant to an Asset Sale Offer) or a Default in complying with the provisions of Article Six of the Indenture if it determines that withholding notice is in their

A-6

interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in the payment of interest on, or the principal of, or the premium on, the Notes.

SECTION 13. Restrictive Covenants. The Indenture contains certain covenants that, among other things, limit the ability of the Company and its Restricted Subsidiaries to make restricted payments, to incur indebtedness, to create liens, to sell assets, to permit restrictions on dividends and other payments by Restricted Subsidiaries of the Issuers, to consolidate, merge or sell all or substantially all of its assets or to engage in transactions with affiliates and the ability of Parent and its Subsidiaries to incur indebtedness or make distributions. The limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations and other provisions in the Indenture.

SECTION 14. No Recourse Against Others. No director, officer, employee, incorporator, stockholder, member or manager of the Issuers or any Guarantor shall have any liability for any obligations of the Issuers under the Notes or the Indenture, or of any Guarantor under its Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 15. Guarantees. This Note shall be entitled to the benefits of certain Guarantees made for the benefit of the Holders. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

SECTION 16. Trustee Dealings with the Issuers. Subject to certain terms, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with Parent, the Issuers and their respective Subsidiaries or their respective Affiliates as if it were not the Trustee.

SECTION 17. Authentication. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

SECTION 18. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

SECTION 19. CUSIP and ISIN Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers has caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee may use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

SECTION 21. Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

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The Issuers shall furnish to any Holder upon written request and without charge a copy of the Indenture.

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ASSIGNMENT FORM

I or we assign and transfer this Note to

______________________________________________________________________________________________________

______________________________________________________________________________________________________

(Print or type name, address and zip code of assignee or transferee)

______________________________________________________________________________________________________

(Insert Social Security or other identifying number of assignee or transferee)

and irrevocably appoint                                                                               agent to transfer this Note on the books of the Issuers. The agent may substitute another to act for him.

Dated: _________________	Signed:
		(Sign exactly as name appears on the other side of this Note)

Signature Guarantee:  ___________________________________________________

Participant in a recognized Signature Guarantee Medallion Program

(or other signature guarantor program reasonably acceptable to the Trustee)

In connection with any transfer of this Note occurring prior to the date which is the date following the second anniversary of the original issuance of this Note, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and is making the transfer pursuant to one of the following:

[Check One]

(1)  ¨ to Parent or a subsidiary thereof; or

(2)  ¨ to a person who the transferor reasonably believes is a “qualified institutional buyer” pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); or

(3)  ¨ to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Company); or

(4)  ¨ outside the United States to a non-”U.S. person” as defined in Rule 902 of Regulation S under the Securities Act in compliance with Rule 904 of Regulation S under the Securities Act; or

(5)  ¨ pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or

(6)  ¨ pursuant to an effective registration statement under the Securities Act.

and unless the box below is checked, the undersigned confirms that such Note is not being transferred to an “affiliate” of the Issuers as defined in Rule 144 under the Securities Act (an “Affiliate”):

¨ The transferee is an Affiliate of the Issuers.

Unless one of the foregoing items (1) through (6) is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if item (3), (4) or (5) is checked, the Issuers may require, prior to registering any such transfer of the Notes, in their sole discretion, such written legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Issuers have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing items (1) through (6) are checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.16 of the Indenture shall have been satisfied.

Dated: _________________	Signed:
		(Sign exactly as name appears on the other side of this Note)

Signature Guarantee:  _________________________________________________________________

Participant in a recognized Signature Guarantee Medallion Program

(or other signature guarantor program reasonably acceptable to the Trustee)

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated: _________________
	NOTICE:	To be executed by an executive officer

-2-

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.07 or Section 4.11 of the Indenture, check the appropriate box:

Section 4.07 [        ]                     Section 4.11 [        ]

If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.07 or Section 4.11 of the Indenture, state the amount (in denominations of $2,000 and integral multiples of $1,000): $                        

Dated: _________________	Signed:
		(Sign exactly as name appears on the other side of this Note)

Signature Guarantee:  ____________________________________________________________

Participant in a recognized Signature Guarantee Medallion Program

(or other signature guarantor program reasonably acceptable to the Trustee)

-3-

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE²

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Physical Note, or exchanges of a part of another Global Note or Physical Note for an interest in this Global Note, have been made:

Date of Transfer
or Exchange Amount of decrease in Principal Amount of this Global Note Amount of increase in Principal Amount of this Global Note Principal Amount of this Global Note following such decrease (or increase) Signature of authorized officer of Trustee

² This schedule should be included only if the Note is issued in global form.

EXHIBIT B

FORM OF LEGENDS

Each Global Note and Physical Note that constitutes a Restricted Security shall bear the following legend (the “Private Placement Legend”) on the face thereof until after the first anniversary of the date of issuance of such Note, unless otherwise agreed by the Issuers and the Holder thereof or if such legend is no longer required by Section 2.16(f) of the Indenture:

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF 144A GLOBAL NOTES: ONE YEAR] [IN THE CASE OF TEMPORARY REGULATION S GLOBAL NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) [IN THE CASE OF RULE 144A NOTES: AND ON WHICH THE ISSUERS INSTRUCT THE TRUSTEE THAT THIS LEGEND SHALL BE DEEMED REMOVED FROM THE NOTE, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THIS NOTE], ONLY (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE NOTES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW

B-1

TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE ISSUERS. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

Each Global Note authenticated and delivered hereunder shall also bear the following legend (the “Global Note Legend”):

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.

B-2

Each Temporary Regulation S Global Note shall also bear the following legend (the “Temporary Regulation S Global Note Legend”):

THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW.

NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.

All Notes originally issued on the Issue Date and any Additional Notes so designated by the Company shall also bear the following legend (the “Original Issue Discount Legend”):

THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES. JBS USA, LLC AGREES TO PROMPTLY MAKE AVAILABLE TO THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WITH RESPECT TO THE NOTE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO JBS USA, LLC AT THE FOLLOWING ADDRESS: JBS USA, LLC, 1770 PROMONTORY CIRCLE, GREELEY, CO 80634, ATTENTION: TREASURER.

B-3

EXHIBIT C

Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Institutional Accredited Investors

[                    ], [    ]

The Bank of New York Mellon

101 Barclay Street, 4 East

New York, NY 10286

F: (213) 815-5390

Attention: Corporate Trust Department

Ladies and Gentlemen:

In connection with our proposed purchase of 11.625% Senior Notes due 2014 (the “Notes”) of JBS USA, LLC, a Delaware limited liability company (the “Company”) and JBS USA FINANCE, INC, a Delaware corporation (the “Co-Issuer” and, together with the Company, the “Issuers”), we confirm that:

1. We understand that any subsequent transfer of the Notes is subject to certain restrictions and conditions set forth in the Indenture relating to the Notes (the “Indenture”) and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities laws.

2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes may not be offered, sold, pledged or otherwise transferred except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell, offer, pledge or otherwise transfer any Notes, we shall do so only (1) to the Issuer, (2) pursuant to a registration statement that has been declared effective under the securities act, (3) for so long as the Notes are eligible for resale pursuant to Rule 144A under the Securities Act, to a Person it reasonably believes is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the transfer is being made in reliance on Rule 144A, (4) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (5) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional accredited investor acquiring the security for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the securities of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act and who prior to such transfer,

C-1

furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture) a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Notes (the form of which letter can be obtained from the Company) and we further agree to provide to any person purchasing any of the Notes from us a notice advising such purchaser that resales of the Notes are restricted as stated herein.

3. We are not acquiring the Notes for or on behalf of, and shall not transfer the Notes to, any employee benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any plan, individual retirement accounts or other arrangements subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or provisions under any federal, state, local, or non-U.S. or other laws or regulations that are similar to such provisions of ERISA of the Code or any entity whose underlying assets are considered to include “plan assets” of such plans, accounts or arrangements, except as permitted in the sections entitled “Notice to investors” and “Certain ERISA considerations” of the Offering Memorandum.

4. We understand that, on any proposed resale of any Notes, we shall be required to furnish to the Trustee and the Issuers such certification, legal opinions and other information as the Issuers may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us shall bear a legend to the foregoing effect.

5. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be.

6. We are acquiring the Notes purchased by us for our account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

C-2

You, as Trustee, the Issuers, counsel for the Issuers and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,
[Name of Transferee]
By:
	Name:
	Title:

C-3

EXHIBIT D

Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S

[                    ], [    ]

The Bank of New York Mellon

101 Barclay Street, 4 East

New York, NY 10286

F: (213) 815-5390

Attention: Corporate Trust Department

Re: JBS USA, LLC and JBS USA FINANCE, INC. (together, the “Issuers”)

11.625% Senior Notes due 2014 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $[                    ] aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

(1) the offer of the Notes was not made to a person in the United States;

(2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither we nor any person acting on our behalf knows that the transaction has been prearranged with a buyer in the United States;

(3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

(4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and

(5) we have advised the transferee of the transfer restrictions applicable to the Notes.

You, as Trustee, the Issuers, counsel for the Issuers and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

D-1

Very truly yours,
[Name of Transferor]
By:
	Authorized Signatory

D-2

EXHIBIT E

FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH

TRANSFERS OF TEMPORARY REGULATION S GLOBAL NOTE

                                    ,               

The Bank of New York Mellon

101 Barclay Street, 4 East

New York, NY 10286

F: (213) 815-5390

Attention: Corporate Trust Department

Re: JBS USA, LLC and JBS USA FINANCE, INC. (together, the “Issuers”)

11.625% Senior Notes due 2014 (the “Notes”)

Dear Sirs:

This letter relates to U.S. $[                    ] principal amount of Notes represented by a certificate (the “Legended Certificate”) which bears a legend outlining restrictions upon transfer of such Legended Certificate. Pursuant to Section 2.16(c) of the Indenture (the “Indenture”) dated as of April 27, 2009 relating to the Notes, we hereby certify that we are (or we shall hold such securities on behalf of) a person outside the United States to whom the Notes could be transferred in accordance with Rule 904 of Regulation S promulgated under the U.S. Securities Act of 1933, as amended.

You, as Trustee, the Issuers, counsel for the Issuers and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this letter have the meanings set forth in Regulation S.

Very truly yours,
[Name of Holder]
By:
	Authorized Signature

E-1

EXHIBIT F

NOTATION OF GUARANTEE

For value received, each of the undersigned (including any successor Person under the Indenture) hereby unconditionally guarantees, jointly and severally, to the extent set forth in the Indenture (as defined below) to the Holder of this Note the payment of principal, premium, if any, and interest on this Note in the amounts and at the times when due and interest on the overdue principal, premium, if any, and interest, if any, of this Note when due, if lawful, and, to the extent permitted by law, the payment or performance of all other obligations of the Issuers under the Indenture or the Notes, to the Holder of this Note and the Trustee, all in accordance with and subject to the terms and limitations of this Note, the Indenture, including Article Eleven thereof, and this notation of Guarantee. This notation of Guarantee shall become effective in accordance with Article Eleven of the Indenture and its terms shall be evidenced therein. The validity and enforceability of any Guarantee shall not be affected by the fact that a notation of Guarantee is not affixed to any particular Note.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture dated as of April 27, 2009, among JBS USA, LLC, a Delaware limited liability company, and JBS USA FINANCE, INC., a Delaware corporation (the “Issuers”), the Guarantors named therein and The Bank of New York Mellon, as trustee (the “Trustee”), as amended or supplemented (the “Indenture”).

The obligations of each of the undersigned to the Holders of Notes and to the Trustee pursuant to its Guarantee and the Indenture are expressly set forth in Article Eleven of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee and all of the other provisions of the Indenture to which the Guarantee relates.

No director, officer, employee, incorporator, stockholder, member or manager of any Guarantor, as such, shall have any liability for any obligations of such Guarantors under such Guarantors’ Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligation or its creation.

This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York.

The Guarantee is subject to release upon the terms set forth in the Indenture.

F-1

IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly executed.

Date:

[                                    ]
By:
	Name:
	Title:

F-2

EX-10.1.2

Exhibit 10.1.2

EXECUTION COPY

Dated August 4, 2006

JBS S.A.

as Issuer

and

JPMORGAN CHASE BANK, N.A.,

as Trustee

and

THE BANK OF TOKYO-MITSUBISHI UFJ, Ltd., acting through its London branch

as Principal Paying Agent

and

J.P. MORGAN BANK LUXEMBOURG S.A.,

as Luxembourg Paying Agent and Transfer Agent

INDENTURE

10.50 per cent.

Senior Notes

Due 2016

Table of Contents

Contents		Page
1	Definitions and Incorporation by Reference	1
2	The Notes	12
3	Additional Amounts; Redemption; Offer to Purchase	22
4	Covenants	28
5	Consolidation or Merger	43
6	Default and Remedies	44
7	The Trustee	50
8	Defeasance and Discharge	55
9	Amendments, Supplements and Waivers	58
10	Miscellaneous	61
Exhibit A Form of Note		68
Exhibit B Form of Supplemental Indenture		78
Exhibit C Restricted Legend		84
Exhibit D DTC Legend		85
Exhibit E Regulation S Certificate		86
Exhibit F Rule 144A Certificate		88

i

Indenture, dated as of August 4 2006, between JBS S.A., a sociedade anônima (corporation) incorporated under the laws of the Federative Republic of Brazil, as the Company, JPMORGAN CHASE BANK, N.A., a New York banking corporation, as Trustee, THE BANK OF TOKYO-MITSUBISHI UFJ, Ltd., acting through its London branch, as Principal Paying Agent, and J.P. MORGAN BANK LUXEMBOURG S.A., as Luxembourg Paying Agent and Transfer Agent.

Recitals:

The Company has duly authorized the execution and delivery of the Indenture to provide for the issuance of up to US$300,000,000 aggregate principal amount of the Company’s 10.50 per cent. Senior Notes due 2016, and, if and when issued, any Additional Notes as provided herein (the “Notes”). All things necessary to make the Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes (in the case of the Additional Notes, when duly authorized), when executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of the Company as hereinafter provided.

Witnesseth:

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows:

1 Definitions and Incorporation by Reference

1.1  Definitions

“Additional Amounts” has the meaning assigned to such term in Section 3.1;

“Additional Notes” means any Notes issued under the Indenture in addition to the Initial Notes, having the same terms in all respects as the Initial Notes except that interest will accrue on the Additional Notes from their date of issuance;

“Affiliate” means, with respect to any Person, (1) any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such Person or (2) any other Person who is a director or officer (a) of such Person, (b) of any Subsidiary of such Person or (c) of any Person described in clause (1) above. For purposes of this definition, “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent” means any Registrar, Paying Agent or Authenticating Agent, as duly appointed by the Company or by the Trustee in the case of the Authenticating Agent;

“Agent Member” means a member of, or a participant in, the Depositary;

“Asset Sale” means any sale, lease, transfer or other disposition of any assets by the Company or any Subsidiary, including by means of a merger, consolidation or similar transaction and including any sale or issuance of the Equity Interests of any Subsidiary (each of the above referred to as a “disposition”), PROVIDED that the following are not included in the definition of “Asset Sale”:

(a) a disposition to the Company or a Subsidiary, including the sale or issuance by the Company or any Subsidiary of any Equity Interests of any Subsidiary to the Company or any Subsidiary;

1

(b) the disposition by the Company or any Subsidiary in the ordinary course of business of (i) cash and cash management investments, (ii) inventory and other assets acquired and held for resale in the ordinary course of business, (iii) damaged, worn out or obsolete assets, or (iv) rights granted to others pursuant to leases or licenses;

(c) the sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof;

(d) a transaction covered by Section 5;

(e) a Restricted Payment permitted under Section 4.9; or

(f) on or after March 1, 2011, any disposition of assets of the Company with an aggregate fair market value, taken together with all other dispositions made in reliance on this clause on or after such date, of less than US$30.0 million (or the equivalent thereof at the time of determination)

“Attributable Debt” means, in respect of a Sale and Leaseback Transaction the present value, discounted at the interest rate implicit in the Sale and Leaseback Transaction, of the total obligations of the lessee for rental payments during the remaining term of the lease in the Sale and Leaseback Transaction;

“Authenticating Agent” refers to the Trustee’s designee for authentication of the Notes;

“bankruptcy default” has the meaning assigned to such term in clause 6.1.8;

“Batista Family” includes José Batista Sobrinho, together with his wife, sons and daughters, or any of their respective heirs;

“Board of Directors” means the board of directors or comparable governing body of the Company, or any committee thereof duly authorized to act on its behalf;

“Brazilian Corporate Law” means Law No. 6,404, of December 15, 1976, as amended;

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City, London, São Paulo or in the city where the Corporate Trust Office of the Trustee is located are authorized by law to close;

“Capital Stock” means, with respect to any Person, any and all quotas, shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated), but excluding any debt securities convertible into or exchangeable for, such equity;

“Central Bank” means the Central Bank of Brazil (Banco Central do Brasil);

“Certificated Note” means a Note in registered individual form without interest coupons;

2

“Change of Control” means that, if at any given time, the Batista Family ceases (i) to own, directly or indirectly, more than 50.0 per cent. of the outstanding Voting Stock of the Company or (ii) to directly or indirectly, have the power to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by contract or otherwise;

“Company” means the party named as such in the first paragraph of the Indenture or any successor obligor under the Indenture and the Notes pursuant to Section 5;

“Consolidated Net Tangible Assets” means the total amount of assets of the Company and its Subsidiaries (less applicable depreciation, amortization and other valuation reserves), except to the extent resulting from write-ups of capital assets subsequent to the Issue Date, after deducting therefrom (i) all current liabilities of the Company and its Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles of the Company and its Subsidiaries as set forth in the most recent consolidated financial statements delivered by the Company to the Trustee pursuant to Section 4.18, in each case in accordance with GAAP;

“Contingent Obligation” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part; PROVIDED that the term “Contingent Obligation” does not include endorsements for collection or deposit in the ordinary course of business;

“Control Person” means, if any Person who (i) owns, directly or indirectly, more than 50 per cent. of the outstanding Voting Stock of the Company or (ii) has directly or indirectly, the power to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by contract or otherwise.

“Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee is principally administered, which at the date of the Indenture is located at 4 New York Plaza, 15th floor, New York, New York, 10004;

“Current Assets” means the total current assets of the Company and its Subsidiaries on a consolidated basis prepared in accordance with GAAP;

“Current Liabilities” means the total current liabilities of the Company and its Subsidiaries on a consolidated basis prepared in accordance with GAAP;

“CVM” means the Brazilian Securities Commission (Comissão de Valores Mobiliários);

3

“Debt” means, with respect to any Person, without duplication:

(a) the principal of and premium, if any, in respect of (i) all indebtedness of such Person for borrowed money and (ii) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable;

(b) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable or other short-term obligations to suppliers payable within 180 days, in each case arising in the ordinary course of business);

(c) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptances or other similar credit transactions (other than obligations with respect to letters of credit securing obligations (other than obligations described in (a) and (b) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such Person of a demand for reimbursement following payment on the letter of credit);

(d) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Redeemable Stock (but excluding any accrued dividends);

(e) all obligations of such Person under Hedging Agreements;

(f) all obligations of the type referred to in sub-paragraphs (a) through (e) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Contingent Obligation (other than obligations of other Persons that are customers or suppliers of such Person for which such Person is or becomes so responsible or liable in the ordinary course of business to (but only to) the extent that such Person does not, or is not required to, make payment in respect thereof); and

(g) all obligations of the type referred to in sub-paragraph (a) through (e) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured.

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default;

“Depositary” means the depositary of each Global Note, which will initially be DTC;

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“DTC” means The Depository Trust Company, a New York corporation, and its successors;

“DTC Legend” means the legend set forth in Exhibit D;

“EBITDA” means, for any period each, as to the Company and its Subsidiaries, on a consolidated basis:

(1) Net Income plus

(2) current and deferred income tax and social contribution minus

(3) non-operating income (expense), net, plus

(4) equity in the earnings (loss) of subsidiary companies plus

(5) financial income (expenses), net, plus

(6) any depreciation or amortization,

as each such item is reported on the most recent financial statements or financial information delivered by the Company to the Trustee and prepared in accordance with GAAP;

“Equity Interests” means all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but excluding Debt convertible into equity;

“Event of Default” has the meaning assigned to such term in Section 6.1;

“Excess Proceeds” has the meaning assigned to such term in clause 4.14.1;

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

“GAAP” means generally accepted accounting principles in Brazil, which are based on the Brazilian Corporate Law, the rules and regulations of the CVM and the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dos Auditores Independentes do Brasil, IBRACON) (whether or not the Company or any of its Subsidiaries or Affiliates is otherwise subject to such rules) as in effect as of the Issue Date;

“Global Note” means a Note in registered global form without interest coupons;

“Hedging Agreement” means any interest rate swap agreement, foreign currency exchange agreement, interest rate collar agreement, option or futures contract or other similar agreement or arrangement designed to protect such Person against changes in interest rates, foreign exchange rates or fluctuations in commodity prices;

“Holder” or “Noteholder” means the registered holder of any Note;

“Incur” means, with respect to any Debt or Capital Stock, to incur, create, issue, assume or guarantee such Debt or Capital Stock. If any Person becomes a Subsidiary on any date after the date of the Indenture, the Debt and Capital Stock of such Person outstanding on such date will be deemed to have been Incurred by such Person on such date for purposes of Section 4.8, but will not be considered the sale or issuance of Equity Interests for purposes of Section 4.9 or Section 4.12.1. The accretion of original issue discount or payment of interest in kind will not be considered an Incurrence of Debt. “Incurrence” shall have a corresponding meaning;

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“Indenture” means this indenture, as amended or supplemented from time to time;

“Initial Notes” means the Notes issued on the date hereof;

“Initial Purchasers” means the initial purchasers party to a purchase agreement with the Company relating to the sale of the Notes or Additional Notes by the Company;

“Interest Payment Date” means each February 4 and August 4 of each year, commencing on February 4, 2007;

“Investment” means, with respect to any Person, any loan or advance to, any acquisition of Capital Stock, equity interest, obligation or other security of, or capital contribution or other investment in, such Person;

“Investment Grade” means BBB- or higher by S&P or Baa3 or higher by Moody’s, or the equivalent of such global ratings by S&P or Moody’s, or of another Rating Agency;

“Issue Date” means the date on which the Notes are originally issued under the Indenture;

“Laws” shall mean any laws (whether statutory or otherwise), rules, regulations, judgments, decrees, orders and injunctions of any Brazilian or Argentine federal, state or municipal government, or any department, commission, board, agency, public registry, public authority, or instrumentality thereof, or any court or arbitrator that has or asserts jurisdiction over the Company or any of its Subsidiaries, now in effect or hereinafter enacted, including, without limitation, in respect of the environment;

“Lien” means any mortgage, pledge, security interest, conditional sale or other title retention agreement;

“Luxembourg Paying Agent” means J.P. Morgan Bank Luxembourg S.A., or such other Luxembourg paying agent as the Company shall appoint;

“Luxembourg Stock Exchange” means Bourse de Luxembourg.

“Minimum Withholding Level” has the meaning assigned to such term in Section 3.3;

“Moody’s” means Moody’s Investors Service, Inc. and its successors;

“Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash (including (i) payments in respect of deferred payment obligations to the extent corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds from the conversion of other consideration received when converted to cash), net of:

(a) brokerage commissions and other fees and expenses related to such Asset Sale, including fees and expenses of counsel, accountants and investment bankers;

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(b) provisions for taxes as a result of such Asset Sale taking into account the consolidated results of operations of the Company and its Subsidiaries;

(c) payments required to be made to repay Debt (other than revolving credit Borrowings) outstanding at the time of such Asset Sale that is secured by a Lien on the property or assets sold; and

(d) appropriate amounts to be provided as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and indemnification obligations associated with such Asset Sale, with any subsequent reduction of the reserve other than by payments made and charged against the reserved amount to be deemed a receipt of cash;

“Net Debt” means, as of any date of determination, the aggregate amount of Debt less the sum of (without duplication) cash and cash equivalents and marketable securities recorded as Current Assets (except for any Capital Stock in any Person);

“Net Debt to EBITDA Ratio” means, at any time, the ratio of:

(a) Net Debt at that time to;

(b) EBITDA for the then most recently concluded period of four consecutive fiscal quarters (the “reference period”);

provided, however, that in making the foregoing calculation:

(i) pro forma effect will be given to any Debt Incurred during or after the reference period to the extent the Debt is outstanding or is to be Incurred on the transaction date as if the Debt had been Incurred on the first day of the reference period; and

(ii) pro forma effect will be given to:

(a) the acquisition or disposition of companies, divisions or lines of businesses by the Company and its Subsidiaries, including any acquisition or disposition of a company, division or line of business since the beginning of the reference period by a Person that became a Subsidiary after the beginning of the reference period; and

(b) the discontinuation of any discontinued operations;

in each case, that have occurred since the beginning of the reference period as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of the reference period. To the extent that pro forma effect is to be given to an acquisition or disposition of a company, division or line of business, the pro forma calculation will be based upon the most recent four full fiscal quarters for which the relevant financial information is available;

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“Net Income” means, for any period, the aggregate net income (or loss) for such period determined in conformity with GAAP;

“Non-U.S. Person” means a Person that is not a U.S. person, as defined in Regulation S;

“Notes” has the meaning assigned to such term in the Recitals;

“obligations” means, with respect to any Debt, all obligations (whether in existence on the Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such Debt, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is allowed as a claim in such case or proceeding;

“Offer to Purchase” has the meaning assigned to such term in Section 3.5;

“Offering Circular” means the final offering circular dated July 28, 2006 prepared by the Company in connection with the Notes;

“Officer” means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company, or any other Person duly appointed by the shareholders of the Company or the Board of Directors to perform corporate duties;

“Officers’ Certificate” means a certificate of the Company signed in the name of the Company by the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary;

“Offshore Global Note” means a Global Note representing Notes issued and sold pursuant to Regulation S;

“Opinion of Counsel” means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, reasonably satisfactory to the Trustee;

“Paying Agent” refers to the Principal Paying Agent, the Luxembourg Paying Agent and such other paying agents as the Company shall appoint;

“Permitted Business” means any of the businesses in which the Company and any of its Subsidiaries are engaged on the Issue Date, and any business reasonably related, incidental, complementary or ancillary thereto;

“Permitted Debt” has the meaning assigned to such term in clause 4.8.2;

“Permitted Liens” means:

(a) Liens existing on the Issue Date;

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(b) Liens securing the Notes;

(c) Liens incurred in the ordinary course of business not securing Debt and not in the aggregate materially detracting from the value of the properties or their use in the operation of the business of the Company and its Subsidiaries;

(d) Liens on Property that secure Debt Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of such Property and which attach within 365 days after the date of such purchase or the completion of construction or improvement;

(e) Liens on Property of a Person at the time such Person becomes a Subsidiary of the Company, provided that such Liens were not created in contemplation thereof and do not extend to any other Property of the Company or any of its Subsidiaries;

(f) Liens on Property at the time the Company, or any of its Subsidiaries acquires such Property, including any acquisition by means of a merger or consolidation with or into the Company, or any of its Subsidiaries, provided that such Liens were not created in contemplation thereof and do not extend to any other Property of the Company, or any of its Subsidiaries;

(g) Liens granted to secure borrowing from (i) Banco National de Desenvolvimento Econômico e Social – BNDES or any other Brazilian governmental development bank, or (ii) any international development bank or governmental agency;

(h) extensions, renewals or replacements of any Liens referred to in clauses (a), (b), (d), (e) or (f) in connection with the refinancing of the obligations secured thereby, provided that such Lien does not extend to any other property and, except as contemplated by clause 4.8.2(iii), the amount secured by such Lien is not increased; and

(i) other Liens securing obligations in an aggregate amount not to exceed 15.0 per cent. of Consolidated Net Tangible Assets.

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof;

“principal” of any Debt means the principal amount of such Debt, (or if such Debt was issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt), together with, unless the context otherwise indicates, any premium then payable on such Debt;

“Principal Paying Agent” means The Bank of Tokyo-Mitsubishi UFJ Ltd., acting through its London branch, or such other principal paying agent as the Company shall appoint;

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“Productive Assets” means assets (including Capital Stock or its substantial equivalent or other Investments) that are used or usable by the Company, or any of its Subsidiaries in Permitted Businesses (or in the case of Capital Stock or its substantial equivalent or other Investments that represent direct, or indirect (via a holding company), ownership or other interests held by the Company or any Subsidiary in entities engaged in Permitted Businesses);

“Property” means (i) any land, ranches, buildings, machinery and other improvements and equipment located therein; (ii) any executive offices, administrative buildings, and research and development facilities, including land and buildings and other improvements thereon and equipment located therein; and (iii) any intangible assets, including, without limitation, any brand names, trademarks, copyrights and patents and similar rights and any income (licensing or otherwise), proceeds of sale or other revenues therefrom;

“Rating Agency” means (i) S&P, (ii) Moody’s or (iii) if neither S&P or Moody’s is rating the Notes, another internationally recognized rating agency;

“Redeemable Stock” means any Capital Stock that by its terms or otherwise is required to be redeemed on or prior to the first anniversary of the Stated Maturity of the Notes or is redeemable at the option of the holder thereof at any time on or prior to the first anniversary of the stated maturity of the Notes;

“Register” has the meaning assigned to such term in clause 2.9.1;

“Registrar” shall mean the entity appointed by the Company to act as registrar for the Notes, which shall initially be JPMorgan Chase Bank, N.A.;

“Regular Record Date” for the interest payable on any Interest Payment Date means January 20 and July 20 (whether or not a Business Day) next preceding such Interest Payment Date;

“Regulation S” means Regulation S under the Securities Act;

“Regulation S Certificate” means a certificate substantially in the form of Exhibit E hereto;

“Related Party Transaction” has the meaning assigned to such term in clause 4.16.1;

“Relevant Date” means, with respect to any payment on a Note, whichever is the later of: (i) the date on which such payment first becomes due; and (ii) if the full amount payable has not been received by the Trustee or a Paying Agent on or prior to such due date, the date on which notice is given to the holders that the full amount has been received by the Trustee;

“Restricted Legend” means the legend set forth in Exhibit C;

“Restricted Payment” has the meaning assigned to such term in clause 4.9.1;

“Rule 144A” means Rule 144A under the Securities Act;

“Rule 144A Certificate” means (i) a certificate substantially in the form of Exhibit E hereto or (ii) a written certification addressed to the Company and the Trustee to the effect that the Person making such certification (x) is acquiring such Note (or beneficial interest) for its own account or one or more accounts with respect to which

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it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information to the extent that the Company is not then subject to Section 13 or 15(d) of the Exchange Act, or is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act;

“Sale and Leaseback Transaction” means, with respect to any Person, an arrangement whereby such Person enters into a lease of property previously transferred by such Person to the lessor;

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc. and its successors;

“Securities Act” means the U.S. Securities Act of 1933, as amended;

“Significant Subsidiary” means any Subsidiary, which at the time of determination, either (i) had assets, which as of the date of the Company’s then-most recent consolidated quarterly balance sheet, constituted at least 20 per cent. of the Company’s total assets as of such date or (ii) had gross revenues for the twelve-month period ending on the date of the Company’s then-most recent consolidated quarterly statement of income which constituted at least 20 per cent. of the Company’s total gross revenues for such period;

“Stated Maturity” means (i) with respect to any Debt, the date specified as the fixed date on which the final installment of principal of such Debt is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Debt, the date specified as the fixed date on which such installment is due and payable as set forth in the documentation governing such Debt, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for payment;

“Subordinated Debt” means any Debt of the Company which is subordinated in right of payment to the Notes, pursuant to a written agreement to that effect;

“Subsidiary” means any corporation, association, partnership or other business entity of which more than 50 per cent. of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or officers thereof is at the time owned or controlled, directly or indirectly, by (i) the Company, (ii) the Company, and one or more of its Subsidiaries or (iii) one or more of its Subsidiaries;

“Transfer Agent” means J.P. Morgan Bank Luxembourg S.A., or such other transfer agent as the Company shall appoint;

“Trust Indenture Act” means the U.S. Trust Indenture Act of 1939, as amended;

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“Trustee” means the party named as such in the first paragraph of the Indenture or any successor trustee under the Indenture pursuant to Section 7;

“U.S. Global Note” means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A;

“U.S. Government Obligations” means obligations issued or directly and fully guaranteed or insured by the United States of America or by any agent or instrumentality thereof, provided that the full faith and credit of the United States of America is pledged in support thereof; and

“Voting Stock” means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

1.2  Rules of Construction

Unless the context otherwise requires or except as otherwise expressly provided:

1.2.1  an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

1.2.2  “herein,” “hereof” and other words of similar import refer to the Indenture as a whole and not to any particular Section or other subdivision;

1.2.3  all references to “Dollars” and “US$” shall mean the lawful currency of the United States of America;

1.2.4  all references to Sections or Exhibits refer to Sections or Exhibits of or to the Indenture unless otherwise indicated;

1.2.5  references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations); and

1.2.6  in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions, the Company may classify such transaction as it, in its sole discretion, determines.

2 The Notes

2.1  Form, Dating and Denominations; Legends

2.1.1 The Notes and the Trustee’s certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the form of the Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of the Indenture. The Notes may have notations, legends or endorsements required by law, rules of or agreements with securities exchanges to which the Company is subject, or usage. Each Note will be dated the date of its authentication. The Notes will be issued in denominations of US$100,000 in principal amount and any multiple of US$1,000 in excess thereof.

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2.1.2

(i)  Except as otherwise provided in clause 2.1.3 below or clause 2.9.2(iv), each Initial Note or Additional Note will bear the Restricted Legend.

(ii)  Each Global Note, whether or not an Initial Note or Additional Note, will bear the DTC Legend.

(iii)  Initial Notes and Additional Notes offered and sold in reliance on Regulation S will be issued as provided herein.

(iv)  Initial Notes and Additional Notes offered and sold in reliance on any exception under the Securities Act other than Regulation S and Rule 144A will be issued, and upon the request of the Company to the Trustee, Initial Notes offered and sold in reliance on Rule 144A may be issued, in the form of Certificated Notes.

2.1.3  If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision) and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company may instruct the Trustee in writing to cancel the Note and issue to the Holder thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction.

2.1.4  By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with the Indenture and such legend.

2.2  Execution and Authentication; Additional Notes

2.2.1  An Officer shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note will still be valid.

2.2.2  A Note will not be valid until the Trustee or the Authenticating Agent (manually or by facsimile) signs the certificate of authentication on the Note, with the signature constituting conclusive evidence that the Note has been authenticated under the Indenture.

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2.2.3  At any time and from time to time after the execution and delivery of the Indenture, the Company may deliver Notes executed by the Company to the Trustee or the Authenticating Agent for authentication. The Trustee or the Authenticating Agent will authenticate and deliver:

(i) Notes for original issue in the aggregate principal amount not to exceed US$300 million; and

(ii) additional Notes from time to time for original issue in aggregate principal amounts specified by the Company, which Additional Notes will be treated as a single class with the Initial Notes issued under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase;

    after the following condition has been met:

Receipt by the Trustee of an Officers’ Certificate specifying:

(a)  the amount of Notes to be authenticated and the date on which the Notes are to be authenticated;

(b)  whether the Notes are to be Initial Notes or Additional Notes;

(c)  in the case of Additional Notes, that the issuance of such Notes does not contravene any provision of Section 4;

(d)  whether the Notes are to be issued as one or more Global Notes or Certificated Notes; and

(e)  other information the Company may determine to include or the Trustee may reasonably request.

2.3 Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust

2.3.1  The Company may appoint one or more Registrars and one or more Paying Agents, and the Trustee may appoint, with a copy of any such appointment to the Company, an Authenticating Agent, in which case each reference in the Indenture to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be deemed to be references to that Agent. The Company may act as Registrar or (except for purposes of Section 8) Paying Agent. In each case the Company and the Trustee will enter into an appropriate agreement with that Agent implementing the provisions of the Indenture relating to the obligations of the Trustee to be performed by the Agent and the related rights. The Company initially appoints the Trustee as Registrar and as a Paying Agent. The Registrar shall provide to the Company a current copy of such register from time to time upon written request of the Company. The Company hereby appoints upon the terms and subject to the conditions herein set forth (i) The Bank of Tokyo-Mitsubishi UFJ Ltd., acting through its London branch, as Principal Paying Agent, located and domiciled in Japan, where Notes may be presented for payment and (ii) J.P. Morgan Bank Luxembourg S.A., as Luxembourg Paying Agent at any time that the Notes are listed on the Luxembourg Stock Exchange, located in Luxembourg where Notes may be presented for payment. If, and for so long as, the Notes are listed on the Luxembourg Stock Exchange and its rules so require, the Company will publish a notice of any change of Paying Agent in a newspaper having a general circulation in Luxembourg.

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2.3.2  The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Notes and will promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require the Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent will have no further liability for the money so paid over to the Trustee.

2.3.3  Each payment in full of principal, redemption amount, Additional Amounts and/or interest payable under the Notes and this Indenture in respect of any Note made by or on behalf of the Company to or to the order of the Principal Paying Agent in the manner specified herein or in the Notes on the date due shall be valid and effective to satisfy and discharge the obligation of the Company to make payment of principal, redemption amount, Additional Amounts and/or interest payable hereunder and under the Notes on such date; provided, however, that the liability of the Principal Paying Agent hereunder shall not exceed any amounts paid to it by the Company, or held by it on behalf of the Holders hereunder; and provided further that, in the event that there is a default by the Principal Paying Agent in any payment of principal, redemption amount, Additional Amounts and/or interest in respect of any Note in accordance with the terms hereof, the Company shall pay on demand such further amounts as will result in receipt by the Holders of such amounts as would have been received by it had no such default occurred.

2.3.4  The Paying Agent shall comply with any applicable backup withholding tax and information reporting requirements under the U.S. Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations promulgated thereunder with respect to payments made under the Notes.

2.4  Replacement Notes

If a mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, the Company will issue and the Trustee will authenticate, upon provision of evidence satisfactory to the Trustee that such Note was lost, destroyed or wrongfully taken, a replacement Note of like tenor and principal amount and bearing a number not contemporaneously outstanding. Every replacement Note is an additional obligation of the Company and entitled to the benefits of the Indenture. If required by the Trustee or the Company, an indemnity must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company and the Trustee from any loss they may suffer if a Note is replaced. The Company may charge the Holder for the expenses of the Company and the Trustee in replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay the Note instead of issuing a replacement Note.

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2.5 Outstanding Notes

2.5.1  Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for:

(i)  Notes cancelled by the Trustee or delivered to it for cancellation;

(ii)  any Note which has been replaced pursuant to Section 2.4 unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser; and

(iii)  on or after the maturity date or any redemption date or date for purchase of the Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or purchased on that date for which the Trustee (or Paying Agent, other than the Company or an Affiliate of the Company) holds money sufficient to pay all amounts then due thereunder.

2.5.2  A Note does not cease to be outstanding because the Company or one of its Affiliates holds the Note, PROVIDED that in determining whether the Holders of the requisite principal amount of the outstanding Notes have given or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding (it being understood that in determining whether the Trustee is protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes in respect of which the Trustee has received written notice from the Company that such Notes are so owned will be so disregarded). Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company or any Affiliate of the Company.

2.6  Temporary Notes

Until definitive Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Notes, as evidenced by the execution of the temporary Notes. If temporary Notes are issued, the Company will cause definitive Notes to be prepared as necessary. After the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 4.2, without charge to the Holder. Upon surrender for cancellation of any temporary Notes the Company will execute and the Trustee will authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations. Until so exchanged, the temporary Notes will be entitled to the same benefits under the Indenture as definitive Notes.

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2.7 Cancellation

The Company at any time may, but shall not be obliged to, deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. Any Registrar or Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or payment. The Trustee will cancel all Notes surrendered for transfer, exchange, payment or cancellation and dispose of them in accordance with its normal procedures or the written instructions of the Company. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation.

2.8 CUSIP and ISIN Numbers

The Company in issuing the Notes may use “CUSIP” and “ISIN” numbers, and the Trustee will use CUSIP numbers or ISIN numbers in notices of redemption or exchange or in Offers to Purchase as a convenience to Holders, the notice to state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange or Offer to Purchase. The Company will promptly notify the Trustee of any change in the CUSIP or ISIN numbers.

2.9 Registration, Transfer and Exchange

2.9.1 The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the “Register”) of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes.

2.9.2

(i) Each Global Note will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

(ii) Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (1) as set forth in clause 2.9.2(iv) and (2) transfers of portions thereof in the form of Certificated Notes may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section and Section 2.10.

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(iii) Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

(iv) If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor depositary is not appointed by the Company within 90 days of the notice or (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed cancelled. If such Note does not bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will not bear the Restricted Legend. If such Note bears the Restricted Legend, then the Certificated Notes issued in exchange therefor will bear the Restricted Legend.

2.9.3 Each Certificated Note will be registered in the name of the holder thereof or its nominee.

2.9.4 A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by Section 2.10. The Trustee will promptly register any transfer or exchange that meets the requirements of this Section by noting the same in the register maintained by the Trustee for the purpose; PROVIDED that:

(i) no transfer or exchange will be effective until it is registered in such register; and

(ii) the Trustee will not be required (i) to issue, register the transfer of or exchange any Note for a period of 15 days before a selection of Notes to be redeemed or purchased pursuant to an Offer to Purchase, (ii) to register the transfer of or exchange any Note so

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selected for redemption or purchase in whole or in part, except, in the case of a partial redemption or purchase, that portion of any Note not being redeemed or purchased, or (iii) if a redemption or a purchase pursuant to an Offer to Purchase is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after the Regular Record Date and before the date of redemption or purchase. Prior to the registration of any transfer, the Company, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary.

From time to time the Company will execute and the Trustee will authenticate Additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section.

No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to clause 2.9.2(iv)).

2.9.5

(i) Global Note to Global Note

If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

(ii) Global Note to Certificated Note

If a beneficial interest in a Global Note is transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (y) deliver one or more new Certificated Notes in authorized denominations having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable.

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(iii) Certificated Note to Global Note

If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the cancelled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the cancelled Certificated Note, registered in the name of the Holder thereof.

(iv) Certificated Note to Certificated Note

If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the cancelled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the cancelled Certificated Note, deliver to the Holder thereof one or more Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the cancelled Certificated Note, registered in the name of the Holder thereof.

2.10  Restrictions on Transfer and Exchange

2.10.1 The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section 2.10 and Section 2.9 and, in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence.

2.10.2 Subject to paragraph (c), the transfer or exchange of any Note (or a beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of the type set forth opposite column B below may only be made in compliance with the certification requirements (if any) described in the clause of this paragraph set forth opposite column C below.

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A	B	C
U.S. Global Note	U.S. Global Note	(i)
U.S. Global Note	Offshore Global Note	(ii)
U.S. Global Note	Certificated Note	(iii)
Offshore Global Note	U.S. Global Note	(iv)
Offshore Global Note	Offshore Global Note	(i)
Offshore Global Note	Certificated Note	(i)
Certificated Note	U.S. Global Note	(iv)
Certificated Note	Offshore Global Note	(ii)
Certificated Note	Certificated Note	(iii)

(i) No certification is required.

(ii) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed and executed Regulation S Certificate; PROVIDED that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required.

(iii) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee (x) a duly completed and executed Rule 144A Certificate or (y) a duly completed and executed Regulation S Certificate, and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer or exchange is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States; PROVIDED that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required. In the event that (i) a duly completed and executed Regulation S Certificate is delivered to the Trustee or (ii) a Certificated Note that does not bear the Restricted Legend is surrendered for transfer or exchange, upon transfer or exchange the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

(iv) The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed and executed Rule 144A Certificate.

2.10.3  No certification is required in connection with any transfer or exchange of any Note (or a beneficial interest therein) after such Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision); PROVIDED that the Company has provided the Trustee with an Officer’s Certificate to that effect, and the Company may require from any Person requesting a transfer or exchange in reliance upon this clause an Opinion of Counsel and any other reasonable certifications and evidence in order to support such certificate.

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Any Certificated Note delivered in reliance upon this paragraph will not bear the Restricted Legend.

2.10.4 The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice within a reasonable period of time to the Trustee.

3 Additional Amounts; Redemption; Offer to Purchase

3.1 Additional Amounts

3.1.1 All payments by the Company in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of whatever nature imposed or levied by or on behalf of Brazil, or any authority therein or thereof in the case of payments under the Notes unless the Company is required by law to deduct or withhold such taxes, duties, assessments, or governmental charges. In such event, the Company will make such deduction or withholding, make payment of the amount so withheld to the appropriate governmental authority and pay such additional amounts as may be necessary to ensure that the net amounts receivable by Holders of Notes after such withholding or deduction shall equal the respective amounts of principal and interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction (“Additional Amounts”).

No such Additional Amounts shall be payable:

(i) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or governmental charges in respect of such note by reason of the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such Holder, if such Holder is an estate, a trust, a partnership, or a corporation) and Brazil, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein, other than the mere holding of the Note or enforcement of rights and the receipt of payments with respect to the Note;

(ii) in respect of Notes surrendered (if surrender is required) more than 30 days after the Relevant Date except to the extent that payments under such Note would have been subject to withholdings and the Holder of such Note would have been entitled to such Additional Amounts, on surrender of such Note for payment on the last day of such period of 30 days;

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(iii)  where such Additional Amount is imposed on a payment to an individual and is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union Directive on the taxation of savings;

(iv) to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or other governmental charges by reason of such Holder’s failure to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with Brazil, or a successor jurisdiction or applicable political subdivision or authority thereof or therein having power to tax, of such Holder, if (1) compliance is required by such jurisdiction, or any political subdivision or authority thereof or therein having power to tax, as a precondition to, exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and (2) the Company has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or other requirement;

(v) in respect of any estate, inheritance, gift, sales, transfer, capital gains, excise or personal property or similar tax, assessment or governmental charge;

(vi) in respect of any tax, assessment or other governmental charge which is payable other than by deduction or withholding from payments of principal of or interest on the Note or by direct payment by the Company in respect of claims made against the Company; or

(vii)  in respect of any combination of the above.

3.1.2 No Additional Amounts shall be paid with respect to any payment on a Note to a Holder who is a fiduciary, a partnership, a limited liability company or other than the sole beneficial owner of that payment to the extent that payment would be required by the laws of Brazil or any political subdivision thereof to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interestholder in a limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had that beneficiary, settlor, member or beneficial owner been the Holder. The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation. Except as specifically provided above, the Company shall not be required to make a payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing authority thereof or therein.

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3.1.3 In the event that Additional Amounts actually paid with respect to the Notes are based on rates of deduction or withholding of withholding taxes in excess of the appropriate rate applicable to the Holder of such Notes, and, as a result thereof such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Notes, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Company.

3.1.4 Any reference in this Indenture or the Notes to principal, interest or any other amount payable in respect of the Notes by the Company will be deemed also to refer to any Additional Amount, unless the context requires otherwise, that may be payable with respect to that amount under the obligations referred to in this Section. The foregoing obligation will survive termination or discharge of the Indenture.

3.2 No Optional Redemption

Except as set forth in Section 3.3, the Notes are not redeemable by the Company prior to their Stated Maturity.

3.3 Redemption for Taxation Reasons

If as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of Brazil or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation, administration or application of such laws, treaties, rules, or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective or, in the case of a change in official position, is announced on or after the issue date of the Notes or on or after the date a successor assumes the obligations under the Notes, the Company has or will become obligated to pay Additional Amounts in excess of the Additional Amounts the Company would be obligated to pay if payments were subject to withholding or deduction at a rate of 15 per cent. or at a rate of 25 per cent. in case the Holder of the Notes is resident in a tax haven jurisdiction (i.e., countries which do not impose any income tax or which impose it at a maximum rate lower than 20 per cent. or where the laws impose restrictions on the disclosure of ownership composition or securities ownership) as a result of the taxes, duties, assessments and other governmental charges described above (the “Minimum Withholding Level”), the Company may, at its option, redeem all, but not less than all, of the Notes, at a redemption price equal to 100 per cent. of their principal amount, together with interest accrued to the date fixed for redemption, upon publication of irrevocable notice to Holders not less than 30 days nor more than 90 days prior to the date fixed for redemption. No notice of such redemption may be given earlier than 90 days prior to the earliest date on which the Company would, but for such redemption, be obligated to pay the Additional Amounts above the Minimum Withholding Level. The Company shall not have the right to so redeem the Notes in the event it becomes obliged to pay Additional Amounts which are less than the Additional Amounts payable at the Minimum Withholding Level. Notwithstanding the foregoing, the Company shall not have the right to so redeem

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the Notes unless: (i) it has taken reasonable measures to avoid the obligation to pay Additional Amounts; and (ii) it has complied with all necessary regulations of the Central Bank to legally effect such redemption. For the avoidance of doubt, reasonable procedures shall not include the Company changing or moving jurisdictions. The Trustee agrees to provide the Company with any necessary document that may be required by the Central Bank in order to obtain any Central Bank approval that is necessary in order to redeem the Notes.

3.4 Method and Effect of Redemption

In the event that the Company elects to so redeem the Notes, it will deliver to the Trustee: (i) a certificate, signed in the name of the Company by any two of its executive officers or by its attorney-in-fact in accordance with its bylaws, stating that the Company is entitled to redeem the Notes pursuant to their terms and setting forth a statement of facts showing that the condition or conditions precedent to the right of the Company to so redeem have occurred or been satisfied; and (ii) an Opinion of Counsel to the effect that the Company has or will become obligated to pay Additional Amounts in excess of the Additional Amounts payable at the Minimum Withholding Level as a result of the change or amendment, that the Company cannot avoid payment of such excess Additional Amounts by taking reasonable measures available to it and that all governmental requirements necessary for the Company to effect the redemption have been complied with. For the avoidance of doubt, reasonable procedures shall not include the Company changing or moving jurisdictions.

3.5 Offer to Purchase

3.5.1 An “Offer to Purchase” means an offer by the Company to purchase Notes as required by the Indenture. An Offer to Purchase must be made by written offer (the “offer”) sent to the Holders, at the address appearing in the register maintained by the Registrar (and, if the Notes are then listed on the Luxembourg Stock Exchange and its rules so require, the Company will publish a notice in a newspaper having a general circulation in Luxembourg). The Company will notify the Trustee in writing at least 15 days (or such shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its obligation to make an Offer to Purchase, and the offer will be sent by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

3.5.2 The offer must include or state the following as to the terms of the Offer to Purchase:

(i) the provision of the Indenture pursuant to which the Offer to Purchase is being made;

(ii) the aggregate principal amount of the outstanding Notes offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100 per cent., the manner by which such amount has been determined pursuant to the Indenture) (the “purchase amount”);

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(iii) the purchase price, including the portion thereof representing accrued interest;

(iv) an expiration date (the “expiration date”) not less than 30 days or more than 60 days after the date of the offer, and a settlement date for purchase (the “purchase date”) not more than 5 Business Days after the expiration date;

(v) information concerning the business of the Company and its Subsidiaries which the Company in good faith believes will enable the Holders to make an informed decision with respect to the Offer to Purchase, at a minimum to include:

(a) the most recent annual and quarterly financial statements of the Company;

(b) a description of any material developments in the Company’s business subsequent to the date of the latest of the financial statements (including a description of the events requiring the Company to make the Offer to Purchase); and

(c) if applicable, appropriate pro forma financial information concerning the Offer to Purchase and the events requiring the Company to make the Offer to Purchase;

(vi) a Holder may tender all or any portion of its Notes, subject to the requirement that any portion of a Note tendered must be in a multiple of US$1,000 principal amount;

(vii) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;

(viii) each Holder electing to tender a Note pursuant to the offer will be required to surrender such Note at the place or places specified in the offer prior to the close of business on the expiration date (such Note being, if the Company or the Trustee so requires, duly endorsed or accompanied by a duly executed written instrument of transfer);

(ix) interest on any Note not tendered, or tendered but not purchased by the Company pursuant to the Offer to Purchase, will continue to accrue;

(x) on the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date;

(xi) Holders are entitled to withdraw Notes tendered by giving notice, which must be received by the Company or the Trustee not later than the close of business on the expiration date, setting forth the name of the Holder, the principal amount of the tendered Notes, the certificate number of the tendered Notes and a statement that the Holder is withdrawing all or a portion of the tender;

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(xii) (x) if Notes in an aggregate principal amount less than or equal to the purchase amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company will purchase all such Notes, and (y) if the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes with minimum denominations of US$100,000 and in multiples of US$1,000 principal amount will be purchased;

(xiii) if any Note is purchased in part, new Notes equal in principal amount to the unpurchased portion of the Note will be issued; and

(xiv) if any Note contains a CUSIP or ISIN number, no representation is being made as to the correctness of the CUSIP or ISIN number either as printed on the Notes or as contained in the offer and that the Holder should rely only on the other identification numbers printed on the Notes.

3.5.3 Prior to the purchase date, the Company will accept tendered Notes for purchase as required by the Offer to Purchase and deliver to the Trustee all Notes so accepted, together with an Officers’ Certificate specifying which Notes have been accepted for purchase. On the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date. The Trustee will promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes equal in principal amount to any unpurchased portion of any Notes accepted for purchase in part.

3.5.4 The Company will comply with Rule 14e-1 under the Exchange Act and all other applicable laws in making any Offer to Purchase, and the above procedures will be deemed modified as necessary to permit such compliance.

3.5.5 The Company will timely repay Debt or obtain consents all as necessary under, or terminate, any agreements or instruments that would otherwise prohibit an Offer to Purchase required to be made pursuant to the Indenture.

3.5.6 The Company will obtain all necessary consents and approvals from the Central Bank of Brazil for the remittance of funds outside of Brazil.

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4 Covenants

4.1 Payment of Notes

4.1.1 The Company agrees to pay the principal of and interest (including, without limitation, any Additional Amounts, if any) on the Notes on the dates and in the manner provided in the Notes and the Indenture. Not later than 10:00 A.M. (New York City time) on the Business Day (solely in New York City) immediately prior to the due date of any principal of or interest on any Notes, or any redemption or purchase price of the Notes, the Company will deposit with the Principal Paying Agent money in immediately available funds sufficient to pay such amounts, provided that if the Company or any Affiliate of the Company is acting as a Paying Agent, it will, on or before each due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such amounts until paid to such Holders or otherwise disposed of as provided in the Indenture. In each case the Company will promptly notify the Trustee in writing of its compliance with this paragraph.

4.1.2 An installment of principal or interest will be considered paid on the date due if the Trustee (or Paying Agent, other than the Company or any Affiliate of the Company) holds on that date money designated for and sufficient to pay the installment. If the Company or any Affiliate of the Company acts as a Paying Agent, an installment of principal or interest will be considered paid on the due date only if paid to the Holders.

4.1.3 The Company agrees to pay interest on overdue principal, and to the extent lawful, overdue installments of interest at the rate per annum specified in the Notes (1 per cent. per annum in excess of the rate per annum borne by the Notes).

4.1.4 Payments in respect of the Notes represented by the Global Notes are to be made by wire transfer of immediately available funds to the accounts specified by the Depositary, as the Holders of the Global Notes. With respect to Certificated Notes all payments shall be payable at the office of the Principal Paying Agent.

4.2 Maintenance of Office or Agency

The Company will maintain in the Borough of Manhattan, the City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served. The Company hereby initially designates the Corporate Trust Office of the Trustee as such office of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Trustee. At any time that the Notes are listed on the Luxembourg Stock Exchange, the Company will maintain an office or agent in Luxembourg to serve as Transfer Agent. The Company initially designates J.P. Morgan Bank Luxembourg S.A. as the Transfer Agent.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be surrendered or presented for any of such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

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4.3 Existence

The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each Subsidiary in accordance with their respective organizational documents, and the material rights, licenses and franchises of the Company and each Subsidiary, provided that the Company is not required to preserve any such right, license or franchise, or the existence of any Subsidiary, if the maintenance or preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole; and provided further that this Section does not prohibit any transaction otherwise permitted by Section 4.14 and Section 5.

4.4 Compliance with Laws

The Company shall, and shall cause each of its Subsidiaries to, comply with all material Laws applicable to it or to any of its Subsidiaries.

4.5 Maintenance of Books and Records

The Company shall, and shall cause each of its Subsidiaries to, maintain books, accounts and records in all material respects in accordance with applicable Law and applicable generally accepted accounting principles.

4.6 Payment of Taxes and other Claims

The Company will pay or discharge, and cause each of its Subsidiaries to pay or discharge before the same become delinquent (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary, its income or profits or property, or that may be due in reason of its business and activities and (ii) all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of the Company or any Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established.

4.7 Maintenance of Properties and Insurance

4.7.1 The Company will cause all properties used or useful in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order as in the judgment of the Company may be necessary so that the business of the Company, and its Subsidiaries may be properly and advantageously conducted at all times; provided that nothing in this Section prevents the Company or any Subsidiary from discontinuing the use, operation or maintenance of any of such properties or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Company, desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole.

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4.7.2 The Company will maintain or cause to be maintained, for itself and its Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of the kinds customarily insured against by Brazilian or Argentine corporations (as the case may be) similarly situated and owning like properties with reputable insurers.

4.8 Limitation on Debt

4.8.1 The Company will not, and will not permit any Subsidiary to, Incur, directly or indirectly, any Debt unless the pro forma Net Debt to EBITDA Ratio at the date of such Incurrence at any time:

(i) on or prior to December 31, 2007, is less than 3.75 to 1.00;

(ii) commencing on January 1, 2008 and ending on December 31, 2009, is less than 3.6 to 1.00; and

(iii) commencing on and after January 1, 2010, is less than 3.5 to 1.00;

provided that, to the extent that proceeds of any Debt for which the above pro forma calculation is made are used by the Company or any Subsidiary to make an Investment, then, the Company will not, and will not permit any Subsidiary to, make any such Investment unless at the time and immediately after giving effect thereto, the Company or such Subsidiary would be able to Incur at least US$1.00 of Debt pursuant to the above calculation.

4.8.2 Notwithstanding the foregoing, the Company and, to the extent provided below, any Subsidiary may Incur the following (“Permitted Debt”):

(i) Debt of the Company pursuant to the Notes;

(ii) Debt of the Company or any Subsidiary outstanding on the Issue Date;

(iii) Debt, the proceeds of which are used to refinance any Debt permitted pursuant to clause 4.8.1 or sub-clauses (i) or (ii) of this clause 4.8.2; provided, however, that (A) the principal amount of the Debt so Incurred does not exceed the principal amount of the Debt so refinanced and (B) the Debt so Incurred (i) does not mature prior to the Stated Maturity of the Debt so refinanced and (ii) is pari passu or subordinated in right of payment to the Debt so refinanced;

(iv) Debt of any Subsidiary to or held by the Company;

(v) Debt of the Company or any Subsidiary pursuant to Hedging Agreements;

(vi) Debt of the Company or any Subsidiary Incurred to pay all or a portion of the purchase price or lease of (A) equipment and vehicles (other than trucks described in sub-item (c) below) up to an aggregate amount not to exceed US$5.0 million (or the equivalent thereof at the time of determination), (B) aircraft up to an aggregate

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amount not to exceed US$15.0 million or (C) trucks used to transport either cattle to the Company’s or its Subsidiary’s slaughterhouses or containers or other shipments of its beef and other products destined for export or domestic sale; provided that in each case (A), (B) and (C), the equipment, vehicles, aircraft or trucks are used in the ordinary course of the business of the Company or its Subsidiaries;

(vii) Debt of the Company or any Subsidiary Incurred on or after the Issue Date no later than 365 days after the date of purchase or completion of construction or improvement of Property for the purpose of financing all or any part of the purchase price or cost of construction or improvement, provided that the principal amount of any Debt Incurred pursuant to this clause shall not, prior to March 1, 2011, exceed US$30.0 million (or the equivalent thereof at the time of determination) and, on or after March 1, 2011, exceed US$60.0 million (or the equivalent thereof at the time of determination); and

(viii) Debt of the Company or any Subsidiary incurred in the ordinary course of business on or after the Issue Date not otherwise permitted in an aggregate principal amount at any time outstanding not to exceed US$50.0 million (or the equivalent thereof at the time of determination).

4.8.3 Notwithstanding anything to the contrary in this Section 4.8, the maximum amount of Debt that the Company and its Subsidiaries may Incur pursuant to this Section 4.8 shall not be deemed to be exceeded, with respect to any outstanding Debt, solely as a result of fluctuations in the exchange rate of currencies.

4.9 Limitation on Restricted Payments

4.9.1 The Company will not directly or indirectly (the payments and other actions described in the following clauses of this Section 4.9 being collectively “Restricted Payments”):

(i) declare or pay any dividend or make any distribution on its Equity Interests;

(ii) purchase, redeem or otherwise acquire or retire for value any of its Equity Interests; or

(iii) repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt, except a payment of interest or principal at Stated Maturity;

unless, at the time of, and after giving effect to, the proposed Restricted Payment:

(a) no Default has occurred and is continuing;

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(b) the Company could Incur at least US$1.00 of Debt under the Net Debt to EBITDA Ratio test set forth in clause 4.8.1; and

(c) the aggregate amount expended for all Restricted Payments made on or after the Issue Date would not, subject to clause 4.9.2, exceed:

(I) in any fiscal year in which Net Income is positive, 50 per cent. of the amount of Net Income accrued during such fiscal year; or

(II) for the period commencing on the Issue Date and ending on the Maturity Date, in any fiscal year in which Net Income is a loss, an aggregate amount not to exceed US$30.0 million (or the equivalent thereof at the time of determination); and

(d) The ratio of Current Assets to Current Liabilities is no less than 1.00 to 1.00.

4.9.2  Clauses 4.9.1(i), (ii) and (iii) will not prohibit the declaration and payment of mandatory dividends, in an amount equivalent to not more than 25 per cent. of the Company’s adjusted Net Income (as defined under Brazilian Corporate Law), including in the form of interest attributable to the Company’s outstanding capital; provided that the payment of such amounts is required under the Brazilian Corporate Law and the Company’s by-laws and that the Company’s Board of Directors, with the approval of its fiscal council, if in existence at such time, has not reported to the general shareholders’ meeting that the distribution would be inadvisable given the financial condition of the Company;

4.9.3  From March 1, 2011, the Company will not pay any dividend or make any distributions on its Equity Interests, payable to or in respect of any Control Person of the Company, unless at least 50 per cent. of any such dividend or distribution payable to or in respect of any such Control Person is used to reduce any outstanding loans made by the Company to any such Control Person.

4.10 Limitation on Liens

The Company will not, and will not permit any Subsidiary to, incur or permit to exist any Lien upon any of its Property or assets now owned or hereafter acquired by it (included any Capital Stock or Debt of the Company or any of its Subsidiaries), without effectively providing that the Notes are secured equally and ratably with (or, if the obligation to be secured by the Lien is subordinated in right of payment to the Notes, prior to) the obligations so secured for so long as such obligations are so secured, other than Permitted Liens.

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4.11 Limitation on Sale and Leaseback Transactions

The Company will not, and will not permit any Subsidiary to, enter into any Sale and Leaseback Transaction with respect to any Property unless the Company or such Subsidiary would be entitled to:

4.11.1  Incur Debt in an amount equal to the Attributable Debt with respect to such Sale and Leaseback Transaction pursuant to Section 4.8; and

4.11.2  create a Lien on such Property securing such Attributable Debt without equally and ratably securing the Notes pursuant to Section 4.10,

in which case, the corresponding Debt and Lien will be deemed Incurred pursuant to those provisions.

4.12 Limitation on Dividend and other Payment Restrictions Affecting Subsidiaries

4.12.1  The Company will not, and will not permit any Subsidiary to, create or otherwise cause or permit to exist or become effective any encumbrance or restriction of any kind on the ability of any Subsidiary to:

(i) pay dividends or make any other distributions on any Equity Interests of the Subsidiary owned by the Company or any other Subsidiary;

(ii) pay any Debt or other obligation owed to the Company or any other Subsidiary;

(iii) make loans or advances to the Company or any other Subsidiary; or

(iv) transfer any of its property or assets to the Company or any other Subsidiary.

4.12.2  The provisions of clause 4.12.1 do not apply to any encumbrances or restrictions:

(i) existing on the Issue Date as provided for in the Indenture or any other agreements in effect on the Issue Date, and any extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

(ii) existing under or by reason of applicable law; or

(iii) existing with respect to any Person, or to the Property of any Person, at the time the Person is acquired by the Company or any Subsidiary, which encumbrances or restrictions: (i) are not applicable to any other Person or the Property of any other Person; and (ii) were not put in place in anticipation of such event, and any

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extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

(iv) of the type described in clause 4.12.1(iv) arising or agreed to in the ordinary course of business: (a) that restrict in a customary manner the subletting, assignment or transfer of any Property that is subject to a lease or license or (b) by virtue of any Lien on, or agreement to transfer, option or similar right with respect to any Property of, the Company or any Subsidiary;

(v) with respect to a Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or Property of, the Subsidiary that is permitted by clause 4.14;

(vi) with respect to a Subsidiary and imposed pursuant to a customary provision in a joint venture or other similar agreement with respect to such Subsidiary that was entered into in the ordinary course of business;

(vii) imposed by the standard loan documentation in connection with loans from Banco Nacional de Desenvolvimento Econômico e Social — BNDES (the Brazilian National Economic and Social Development Bank) to any Subsidiary, or loans from the International Finance Corporation, the Inter-American Development Bank or any other governmental or multi-lateral agency to any Subsidiary other than and Significant Subsidiary; or

(viii) required pursuant to the Indenture.

4.13 Repurchase of Notes Upon a Change of Control

Not later than 30 days following a Change of Control, the Company will make an Offer to Purchase all outstanding Notes at a purchase price equal to 101 per cent. of the principal amount plus accrued interest to the date of purchase.

4.14 Limitation on Asset Sales

4.14.1  The Company will not, and will not permit any Subsidiary to, make any Asset Sale unless the following conditions are met:

(i) The Asset Sale is for fair market value, as determined in good faith by the Company;

(ii) At least 75 per cent. of the consideration consists of all or part of any of the following, received at closing, (i) cash and cash equivalents (consisting of marketable securities issued by the Brazilian federal government or any agency or subdivision thereof, or by any first tier U.S. financial institution or its Brazilian subsidiary or affiliate, or by any first tier Brazilian financial institution) or (ii) Productive Assets;

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(iii) Within 360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Net Cash Proceeds may be used:

(a) to permanently repay Debt other than Subordinated Debt of the Company or any of its Subsidiaries (and in the case of a revolving credit, permanently reduce the commitment thereunder by such amount), in each case owing to a Person other than the Company or any Subsidiary;

(b) to acquire all or substantially all of the assets of a Permitted Business, or a majority of the Voting Stock of another Person that thereupon becomes a Subsidiary engaged in a Permitted Business, or to make capital expenditures or otherwise acquire long-term assets that are to be used in a Permitted Business; or

(c) to acquire Productive Assets for the Company or any of its Subsidiaries;

(iv) The Net Cash Proceeds of an Asset Sale not applied pursuant to clause 4.14.1(iii) within 360 days of the Asset Sale shall constitute “Excess Proceeds”. Excess Proceeds of less than US$20.0 million (or the equivalent thereof at the time of determination) will be carried forward and accumulated. When accumulated Excess Proceeds equals or exceeds US$20.0 million, the Company must, within 30 days and subject to the provisions of clause 3.5.6 above, make an Offer to Purchase Notes having a principal amount equal to:

(a) accumulated Excess Proceeds, multiplied by

(b) a fraction (x) the numerator of which is equal to the then outstanding principal amount of the Notes and (y) the denominator of which is equal to the then outstanding principal amount of the Notes and all pari passu Debt similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale, rounded down to the nearest US$1,000.

The purchase price for the Notes will be 100 per cent. of the principal amount plus accrued interest to the date of purchase. If the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of US$1,000 with a minimum denomination of US$100,000 will be purchased. Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero.

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4.15 Guarantees by Significant Subsidiaries

If, at any time, any of the Company’s Subsidiaries constitutes a Significant Subsidiary, then the Company shall promptly cause such Significant Subsidiary to guarantee, on an unsecured basis, all of the obligations of the Company under the Notes and the Indenture by executing a supplemental indenture in the form of Exhibit B.

Notwithstanding the foregoing, each guarantee of the Notes will be limited to the maximum amount that (1) would not render such Significant Subsidiary’s obligations subject to avoidance under applicable law, including applicable fraudulent conveyance laws or (2) would not result in a breach or violation by such Significant Subsidiary of any then-existing agreement to which it is party.

The guarantee of a Significant Subsidiary will terminate upon:

(i) a sale or other disposition (including by way of consolidation or merger) by the Company of all or any portion of the Capital Stock of such Significant Subsidiary, or the sale or disposition of assets of such Significant Subsidiary, in each case that results in such Subsidiary no longer constituting a Significant Subsidiary; or

(ii) defeasance or discharge of the Notes, as described in Section 8.

4.16 Limitation on Transactions with Affiliates

4.16.1  The Company will not, and will not permit its Subsidiaries to, sell, lease or otherwise transfer any Property or assets to, or purchase, lease or otherwise acquire any Property or assets from, or otherwise engage in any other transactions involving an aggregate amount in excess of US$1.0 million (or the equivalent thereof at the time of determination) with, any Affiliates that are not its Subsidiaries (each, a “Related Party Transaction”), except transactions at prices and on terms and conditions no less favorable to the Company, or any of its Subsidiaries, as the case may be, than could be obtained on an arm’s-length basis from unrelated third parties.

4.16.2  In any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of US$1.0 million (or the equivalent thereof at the time of determination), the Company must first deliver to the Trustee an Officer’s Certificate to the effect that such transaction or series of related transactions are on fair and reasonable terms no less favorable to the Company, or its Subsidiaries than could be obtained in a comparable arm’s-length transaction and is otherwise compliant with the terms of this Indenture. In any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of US$5.0 million (or the equivalent thereof at the time of determination), the Company must first

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deliver to the Trustee a certificate from the Company’s Board of Directors (or equivalent body) to the effect that such transaction or series of related transactions are on fair and reasonable terms no less favorable to the Company, or its Subsidiaries than could be obtained in a comparable arm’s-length transaction and is otherwise compliant with the terms of this Indenture. Prior to entering into any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of US$15.0 million (or the equivalent thereof at the time of determination), the Company must in addition obtain and deliver to the Trustee a favorable written opinion from an independent nationally recognized Brazilian or internationally recognized investment banking, auditing or consulting firm as to the fairness of the transaction to the Company, and its Subsidiaries, and to any of its Affiliates from a financial point of view.

4.17 Line of Business

The Company will not, and will not permit any of its respective Subsidiaries, to engage in any business other than a Permitted Business, except to an extent that so doing would not be material to the Company, and its Subsidiaries, taken as a whole. The Company will not cease or threaten to cease to carry on all or any substantial part of its business.

4.18 Financial Reports

4.18.1  The Company shall furnish to the Trustee (and will also provide the Trustee with sufficient copies of the following reports referred to in clauses (i) and (ii) below for distribution, at the Company’s expense, to all holders of Notes) and to the Luxembourg Paying Agent:

(i) as soon as available and in any event by no later than 120 days after the end of each fiscal year of the Company, annual audited consolidated financial statements in English of the Company, prepared in accordance with GAAP and accompanied by an opinion of internationally recognized independent public accountants selected by the Company, which opinion shall be based upon an examination made in accordance with GAAP;

(ii) as soon as available and in any event by no later than 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, quarterly unaudited consolidated financial statements in English of the Company prepared in accordance with GAAP; and

(iii) as soon as available (without duplication), English language versions or summaries of such other reports or notices that may be filed or submitted by (and promptly after filing or submission by) the Company with the Luxembourg Stock Exchange or any other stock exchange on which the Notes may be listed (in each case, to the extent that any such report or notice is generally available to its security holders or the public in Brazil).

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In addition, the Company will make the information and reports available to securities analysts and prospective investors upon request. For so long as any of the Notes are listed on the Luxembourg Stock Exchange and the rules of such exchange require, copies of such information will also be available during normal business hours at the office of the Luxembourg Paying Agent.

4.18.2  Delivery of these reports and information to the Trustee is for informational purposes only and the Trustee’s receipt of them will not constitute constructive notice of any information contained therein or determinable for information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

4.19 Reports to Trustee

4.19.1  The Company will deliver, simultaneously with the delivery of each set of financial statements and financial information referred to in clauses 4.18.1 (i) and (ii), an Officer’s Certificate stating that the officer has conducted or supervised a review of the activities of the Company and its Subsidiaries and their performance under the Indenture and that to the best of his or her knowledge, the Company has fulfilled its obligations hereunder or, if there has been an Event of Default or Default, specifying the Event of Default or Default and a description of the event and what action the Company is taking or proposes to take with respect thereto.

4.19.2  The Company will deliver to the Trustee, as soon as possible and in any event within 10 Business days after an Officer of the Company becomes aware or should reasonably become aware of the occurrence of an Event of Default or Default, an Officers’ Certificate setting forth the details of the Event of Default or Default, and the action which the Company proposes to take with respect thereto.

4.19.3  The Company will provide prior written notice to the Trustee when any Notes are listed on any Brazilian, U.S. or foreign securities exchange (in addition to the Luxembourg Stock Exchange) and of any delisting.

4.20 Ranking

The Company will ensure that its obligations under the Indenture and the Notes will at all times constitute direct, unconditional, unsubordinated and unsecured obligations of the Company, ranking at all times at least pari passu in priority of payment, in right of security and in all other respects among themselves and with all other Debt of such Person, except to the extent any such other Debt ranks above such obligations by reason of Liens permitted under Section 4.10.

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4.21 Paying Agent and Transfer Agent

4.21.1  The Company agrees, for the benefit of the Holders from time to time of the Notes, that, until all of the Notes are no longer outstanding or until moneys for the payment of all of the principal of and interest on all Notes (and Additional Amounts, if any) shall have been made available at the principal office of the Trustee, and shall have been returned to the Company as provided herein, whichever occurs earlier, there shall at all times be a Principal Paying Agent and Transfer Agent hereunder. The Principal Paying Agent and the Transfer Agent shall have the powers and authority granted to and conferred upon it herein and in the Notes.

4.21.2  The Company hereby initially appoints the Paying Agents and Transfer Agent defined in this Indenture as such. The Principal Paying Agent shall arrange with the Paying Agent for the payment, from funds furnished by the Company to the Principal Paying Agent pursuant to this Indenture, of the principal of and interest on the Notes (and Additional Amounts, if any, with respect to the Notes) and of the compensation of such paying agency or agencies for their services as such.

4.21.3  The Principal Paying Agent, Paying Agent and Transfer Agent each accepts their respective obligations set forth herein and in the Notes upon the terms and conditions hereof and thereof, including the following, to all of which the Company agrees and to all of which the rights of the holders from time to time of the Notes shall be subject:

(i) The Paying Agents and Transfer Agent each shall each be entitled to the compensation to be agreed upon with the Company for all services rendered by it, and the Company agrees promptly to pay such compensation and to reimburse each of the Paying Agents and Transfer Agent for their reasonable out-of-pocket expenses (including fees and expenses of counsel) incurred by it in connection with the services rendered by it hereunder. The Company also agrees to indemnify each of the Paying Agents and Transfer Agent for, and to hold each of them harmless against, any loss, liability or expense incurring out of or in connection with their acting as Paying Agents or Transfer Agent of the Company hereunder, except to the extent such loss, liability or expense results from such Paying Agents’ or Transfer Agent’s own gross negligence, bad faith or willful misconduct. The obligations of the Company under this subsection (i) shall survive the payment of the Notes and the resignation or removal of the Paying Agents and Transfer Agent as the case may be;

(ii) In acting under this Indenture and in connection with the Notes, the Paying Agents and Transfer Agent are each acting solely as agent of the Company and do not assume any obligation towards or relationship of agency or trust for or with any of the Holders except that all funds held by a Paying Agent for the payment of the principal of and interest on (and Additional Amounts, if any, with respect to) the Notes, shall be held in trust by it and applied as set forth herein and in the Notes, but need not be segregated from other funds held by it, except as required by law;

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(iii) The Principal Paying Agent may consult with counsel and any advice or written opinion of counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or opinion;

(iv) Each Paying Agent and Transfer Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted to be taken or thing suffered by it in reliance upon any Note, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper party or parties;

(v) Each Paying Agent and Transfer Agent may, in its individual capacity or any capacity, become the owner of, or acquire any interest in, any Notes or other obligations of the Company with the same rights that it would have if it were not the Paying Agent or Transfer Agent, and may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Notes or other obligations of the Company as freely as if it were not the Paying Agent or Transfer Agent;

(vi) Neither the Paying Agents nor the Transfer Agent shall be under any liability for interest on any moneys received by it pursuant to any of the provisions of this Indenture or the Notes;

(vii) The recitals contained herein and in the Notes shall be taken as the statements of the Company, and the Paying Agents and Transfer Agent assume no responsibility for the correctness of the same. Neither the Paying Agent nor the Transfer Agent makes any representation as to the validity or sufficiency of this Indenture or the Notes. Neither the Paying Agents nor the Transfer Agent shall be accountable for the use or application by the Company of any of the Notes or the proceeds thereof;

(viii) The Paying Agents and Transfer Agent shall be obligated to perform such duties and only such duties as are herein and in the Notes specifically set forth, and no implied duties or obligations shall be read into this Indenture or the Notes against the Paying Agents or Transfer Agent. Neither the Paying Agents nor the Transfer Agent shall be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it;

(ix) Unless otherwise specifically provided herein or in the Notes, any order, certificate, notice, request, direction or other communication from the Company made or given under any provision of this Indenture shall be sufficient if signed by an authorized officer or any duly authorized attorney-in-fact;

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(x) The Company undertakes to indemnify each of the Paying Agents and their affiliates against all losses, liabilities, including any and all tax liabilities, which, for the avoidance of doubt, shall include both Brazilian and Japanese taxes and associated penalties, costs, claims, actions, damages, expenses or demands which any of them may incur or which may be made against any of them as a result of or in connection with the appointment of or the exercise of the powers and duties by any Paying Agent or its affiliates under this Indenture, except as may result from its own default, gross negligence or bad faith or that of its directors, officers or employees or any of them, or breach by it of the terms of this Indenture; and

(xi) The Company acknowledges that the Principal Paying Agent makes no representations as to the interpretation or characterization of the transactions herein undertaken for tax or any other purpose, in any jurisdiction. The Company represents that it has fully satisfied itself as to any tax impact of this Indenture before agreeing to the terms herein, and is responsible for any and all federal, state, local, income, franchise, withholding, value added, sales, use, transfer, stamp or other taxes imposed by any jurisdiction in respect of this Indenture. The Company agrees to pay any and all stamp and other documentary taxes or duties which may be payable in connection with the execution, delivery, performance and enforcement of this Indenture by the Paying Agents.

Anything in this Section to the contrary notwithstanding, the agreements to hold sums in trust as provided in this Section are subject to the provisions of Section 8.5.

4.21.4  Any Paying Agent or Transfer Agent may at any time resign by giving written notice of its resignation mailed to the Company specifying the date on which its resignation shall become effective; provided that such date shall be at least 60 days after the date on which such notice is given unless the Company agrees to accept less notice. Upon receiving such notice of resignation, the Company shall promptly appoint a successor Paying Agent or Transfer Agent, qualified as aforesaid, by written instrument in duplicate signed on behalf of the Company, one copy of which shall be delivered to the resigning Paying Agent or Transfer Agent and one copy to the successor Paying Agent or Transfer Agent. Such resignation shall become effective upon the earlier of (i) the effective date of such resignation or (ii) the acceptance of appointment by the successor Paying Agent or Transfer Agent as provided in clause 4.21.5. The Company may, at any time and for any reason, and shall, upon any event set forth in the next succeeding sentence, remove a Paying Agent or Transfer Agent and appoint a successor Paying Agent or Transfer Agent, qualified as aforesaid, by written instrument in duplicate signed on behalf of the Company, one copy

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of which shall be delivered to the Paying Agent or Transfer Agent being removed and one copy to the successor Paying Agent or Transfer Agent. A Paying Agent or Transfer Agent shall be removed as aforesaid if it shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Paying Agent or Transfer Agent or of its property shall be appointed, or any public officer shall take charge or control of it or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. Any removal of a Paying Agent or Transfer Agent and any appointment of a successor Paying Agent or Transfer Agent shall become effective upon acceptance of appointment by the successor Paying Agent or Transfer Agent as provided in clause 4.21.5. Upon its resignation or removal, the Paying Agent or Transfer Agent shall be entitled to the payment by the Company of its compensation for the services rendered hereunder and to the reimbursement of all reasonable out-of-pocket expenses incurred in connection with the services rendered by it hereunder (including, to the extent that the Paying Agent or Transfer Agent is being removed, all reasonable out-of-pocket expenses incurred in connection with such removal, including fees and expenses of counsel). Any change in the Principal Paying Agent must be informed to the Central Bank through the Central Bank electronic system (SISBACEN).

4.21.5  Any successor Paying Agent or Transfer Agent appointed as provided in clause 4.21.4 shall execute and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Paying Agent or Transfer Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Paying Agent or Transfer Agent hereunder, and such predecessor, upon payment of its compensation and out-of-pocket expenses then unpaid, shall pay over to such successor agent all moneys or other property at the time held by it hereunder, if any.

4.21.6  Any corporation or bank into which the Paying Agent or Transfer Agent may be merged or converted, or with which the Paying Agent or Transfer Agent may be consolidated, or any corporation or bank resulting from any merger, conversion or consolidation to which the Paying Agent or Transfer Agent shall be a party, or any corporation or bank succeeding to the agency business of the Paying Agent or Transfer Agent shall be the successor to the Paying Agent or Transfer Agent hereunder (provided that such corporation or bank shall be qualified as aforesaid) without the execution or filing of any paper or any further act on the part of any of the parties hereto.

4.22 Provision of Information

For so long as any of the Notes bearing a restrictive legend remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company covenants and agrees that it shall, during any period in which it is not subject to Section 13 or 15(d) under the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, make available to any

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Holder of any such Note in connection with any sale thereof and to any prospective purchaser of any such Note from such Holder, in each case upon request, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.

4.23 Covenant Suspension

From and during any time that (i) the Notes have an Investment Grade rating from both Rating Agencies; and (ii) no Default has occurred and is continuing, the Company and its Subsidiaries will not be subject to Sections 4.7, 4.8, 4.9, 4.11, 4.12, 4.14, and 4.17 of this Indenture; PROVIDED that the Company and its Subsidiaries will be subject immediately to such provisions at any time the Notes cease to have an Investment Grade rating from one of the Rating Agencies.

5 Consolidation or Merger

The Company will not:

(i) consolidate with or merge into or

convey, transfer, or lease all or substantially all of its assets to, any Person,

unless:

(a) the resulting, surviving or transferee Person (if not the Company) will be a Person organized and validly existing under the laws of the Federative Republic of Brazil or any political subdivision thereof or any other country member of the Organization for Economic Co-operation and Development (OECD), and such Person will expressly assume by a supplement to the Indenture, executed and delivered to the Trustee, all of the obligations of the Company under the Indenture and the Notes;

(b) immediately after giving effect to the transaction (and treating any Debt that becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been Incurred by such Person at the time of such transaction), no Default will have occurred and be continuing;

(c) immediately after giving effect to such transaction, the resulting, surviving or transferee Person would be able to Incur at least US$1.00 of Debt under the Net Debt to EBITDA Ratio test set forth in clause 4.8.1; and

(d) the Company will have delivered to the Trustee an Officers’ Certificate and an independent Opinion of Counsel of recognized standing, each stating that such consolidation, merger or transfer and such supplement to the Indenture (if any) comply with the Notes and the Indenture.

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The Trustee will accept such certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set forth in sub-clause (d) above, in which event it will be conclusive and binding on the Holders.

6 Default and Remedies

6.1 Events of Default

An “Event of Default” occurs if:

6.1.1  the Company defaults in the payment of the principal of (including, without limitation, any Additional Amounts, if any, on) any Note when the same becomes due and payable at maturity, upon acceleration or redemption, or otherwise (other than pursuant to an Offer to Purchase);

6.1.2  the Company defaults in the payment of interest (including Additional Amounts, if any, without limitation) on any Note when the same becomes due and payable, and the default continues for a period of 30 days;

6.1.3  the Company fails to make an Offer to Purchase and thereafter to accept and pay for Notes tendered when and as required pursuant to the covenants described in Section 4.13 or 4.14, or the Company fails to comply with the covenants described in clause 3.5.6, Section 4.8, 4.9, or 5;

6.1.4  the Company defaults in the performance of or breaches any other covenant or agreement of the Company in the Indenture or under the Notes and the default or breach continues for a period of 60 consecutive days after written notice to the Company by the Trustee or to the Company and the Trustee by the Holders of 25 per cent. or more in aggregate principal amount of the Notes;

6.1.5  there occurs with respect to any Debt of the Company or any of its Significant Subsidiaries having an outstanding principal amount of US$10.0 million (or the equivalent thereof at the time of determination) or more in the aggregate for all such Debt of all such Persons (i) an event of default that results in such Debt being due and payable prior to its scheduled maturity or (ii) failure to make a payment of principal, interest or any other amount due thereunder when due and such defaulted payment is not made, waived or extended within the applicable grace period;

6.1.6  one or more final judgments or orders for the payment of money in the aggregate are rendered against the Company or any of its Significant Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed US$10.0 million or the equivalent thereof at the time of determination (in excess of amounts which the Company’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;

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6.1.7  an involuntary case or other proceeding is commenced against the Company, or any of its Significant Subsidiaries with respect to it or its debts under any bankruptcy, insolvency or other similar law then in effect seeking the appointment of a trustee, receiver, síndico, liquidator, custodian or other similar official of it or any substantial part of its Property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 days; or an order for relief is entered against the Company or any Significant Subsidiary under the applicable bankruptcy laws then in effect, and such order is not being contested by the Company or such Significant Subsidiary, as the case may be, in good faith, or has not been dismissed, discharged or otherwise stayed, in each case within 60 days of being made;

6.1.8  the Company, or any of its Significant Subsidiaries (i) commences a voluntary case or other proceeding seeking liquidation, reorganization, concordata or other relief with respect to itself or its Debts or any guarantee under any applicable bankruptcy, insolvency or other similar law then in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, síndico, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any of its Subsidiaries or for all or substantially all of the Property of the Company or any of its Subsidiaries or (iii) effects any general assignment for the benefit of creditors (an event of default specified in this clause 6.1.8 or clause 6.1.7 a “bankruptcy default”);

6.1.9  any event occurs that under the laws of Brazil, Argentina, or any political subdivision thereof or any other country has substantially the same effect as any of the events referred to in any of clause 6.1.7 and 6.1.8;

6.1.10  it is or will become unlawful for the Company to perform or comply with any of its material obligations under or in respect of the Notes, or the Indenture, or any note, or the Indenture ceases to be in full force and effect, other than in accordance with the terms of the Indenture, or the Company denies or disavows its obligations under the Notes;

6.1.11  all or substantially all of the assets and revenues of the Company are condemned, seized or otherwise appropriated by any Person acting under the authority of any national, regional or local government or the Company is prevented by any such Person from exercising normal control over all or substantially all of such assets and revenues; or

6.1.12  any action, condition or thing at any time required to be taken, fulfilled or done is not taken, fulfilled or done in order to: (i) enable the Company lawfully to enter into, exercise its rights and perform and comply with its obligations under and in respect of the Notes and the Indenture; (ii) ensure that those obligations are legal, valid, binding and enforceable; and (iii) make the Notes and the Indenture admissible in evidence in the courts of Brazil.

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6.2 Acceleration

6.2.1  If an Event of Default, other than a bankruptcy default with respect to the Company, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25 per cent. in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal and interest will become immediately due and payable. If a bankruptcy default occurs with respect to the Company, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. In this case, the Company will comply with any and all then applicable regulations of the Central Bank of Brazil for remittance of funds outside of Brazil.

6.2.2  The Holders of a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if:

(i) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by the declaration of acceleration, have been cured or waived; and

(ii) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

6.3 Other Remedies

If an Event of Default occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of and interest on the Notes or to enforce the performance of any provision of the Notes or the Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.

6.4 Waiver of Past Defaults

Except as otherwise provided in Section 6.2, 6.7 or 9.2, the Holders of a majority in principal amount of the outstanding Notes may, by notice to the Trustee, waive an existing Default and its consequences. Upon such waiver, the Default will cease to exist, and any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other Default or impair any right consequent thereon.

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6.5 Control by Majority

The Holders of a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders not joining in the giving of such direction, and the Trustee may take any other action it deems proper that is not inconsistent with any such direction received from Holders.

6.6 Limitation on Suits

A Holder may not institute any proceeding, judicial or otherwise, with respect to the Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy under the Indenture or the Notes, unless:

6.6.1  the Holder has previously given to the Trustee written notice of a continuing Event of Default;

6.6.2  Holders of at least 25 per cent. in aggregate principal amount of outstanding Notes have made written request to the Trustee to institute such proceedings in respect of the Event of Default in its own name as Trustee under the Indenture;

6.6.3  Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

6.6.4  the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

6.6.5  during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction that is inconsistent with such written request.

6.7 Rights of Holders to Receive Payment

Notwithstanding anything to the contrary, the right of a Holder of a Note to receive payment of principal of or interest on its Note on or after the Stated Maturities thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, may not be impaired or affected without the consent of that Holder.

6.8 Collection Suit by Trustee

If an Event of Default in payment of principal or interest specified in clause 6.1.1 or 6.1.2 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent lawful, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder.

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6.9 Trustee May File Proofs of Claim

The Trustee may file proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee hereunder) and the Holders allowed in any judicial proceedings relating to the Company or its creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims. Any custodian, receiver, síndico, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee hereunder. Nothing in the Indenture will be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

6.10 Priorities

If the Trustee collects any money pursuant to this Section 6, it shall pay out the money in the following order:

6.10.1  First: to the Trustee for all amounts due to it hereunder;

6.10.2  Second: to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest; and

6.10.3  Third: to the Company or as a court of competent jurisdiction may direct.

The Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

6.11 Restoration of Rights and Remedies

If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under the Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, the Trustee and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, the Trustee and the Holders will continue as though no such proceeding had been instituted.

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6.12 Undertaking for Costs

In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.12 does not apply to a suit by a Holder to enforce payment of principal of or interest on any Note on the respective due dates pursuant to clause 4.1.1, or a suit by Holders of more than 10 per cent. in principal amount of the outstanding Notes except for any proceeding brought before a Brazilian court, which case the Holder may be required to post a bond to cover legal fees and court expenses.

6.13 Rights and Remedies Cumulative

No right or remedy conferred or reserved to the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all such rights and remedies are, to the extent permitted by law, cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy.

6.14 Delay or Omission Not Waiver

No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Section 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

6.15 Waiver of Stay, Extension or Usury Laws

The Company covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of, or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of the Indenture. The Company hereby expressly waives, to the extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

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7 The Trustee

7.1 General

7.1.1 The duties and responsibilities of the Trustee are as set forth herein. Whether or not expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Section 7.

7.1.2 Except during the continuance of an Event of Default, the Trustee needs perform only those duties that are specifically set forth in the Indenture and no others, and no implied covenants or obligations will be read into the Indenture against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

7.1.3 No provision of the Indenture shall be construed to relieve the Trustee from liability for its own gross negligence, bad faith or willful misconduct.

7.2 Certain Rights of Trustee

7.2.1 In the absence of bad faith on its part, the Trustee may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but, in the case of any document which is specifically required to be furnished to the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the requirements of the Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit.

7.2.2 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel conforming to Section 10.3 and the Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

7.2.3 The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

7.2.4 The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee security, reasonably satisfactory to it, or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

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7.2.5 The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 6.5 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Indenture.

7.2.6 The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

7.2.7 No provision of the Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. In no event shall the Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

7.3 Individual Rights of Trustee

The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6):

7.3.1 “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

7.3.2 “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

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7.4 Trustee’s Disclaimer

The Trustee (i) makes no representation as to the validity or adequacy of the Indenture or the Notes; (ii) is not accountable for the Company’s use or application of the proceeds from the Notes; and (iii) is not responsible for any statement in the Notes other than its certificate of authentication.

7.5 Notice of Default

The Trustee is not to be charged with knowledge of any Default or Event of Default or knowledge of any cure of any Default or Event of Default with respect to the Notes unless either (i) an attorney or agent of the Trustee with direct responsibility for this Indenture, had actual knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of Default has been given to the Trustee by the Company or any Holder. If any Default occurs and is continuing and is known to the Trustee, the Trustee will send notice of the Default to each Holder within 90 days after it occurs, unless the Default has been cured; PROVIDED that, except in the case of a default in the payment of the principal of or interest on any Note, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors of the Trustee in good faith determines that withholding the notice is in the interest of the Holders.

7.6 Compensation and Indemnity

7.6.1 The Company will pay the Trustee compensation as agreed upon in writing between the Company of the Trustee for the Trustee’s services. The compensation of the Trustee is not limited by any law on compensation of a Trustee of an express trust. The Company will reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee, including the compensation and expenses of the Trustee’s agents and counsel.

7.6.2 The Company will indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without gross negligence, or bad faith or willful misconduct on its part arising out of or in connection with the acceptance or administration of the Indenture and its duties under the Indenture and the Notes, including the costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under the Indenture and the Notes.

7.6.3 To secure the Company’s payment obligations in this Section, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, and interest on particular Notes.

7.6.4 If the Trustee incurs expenses or renders services in connection with an Event of Default as specified herein, the expenses (including charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable bankruptcy, reorganization, insolvency or similar law now or hereafter in effect.

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7.6.5 The Company undertakes to indemnify each of the Paying Agents and their affiliates against all losses, liabilities, including any and all tax liabilities, which, for the avoidance of doubt, shall include both Brazilian and Japanese taxes and associated penalties, costs, claims, actions, damages, expenses or demands which any of them may incur or which may be made against any of them as a result of or in connection with the appointment of or the exercise of the powers and duties by any Paying Agent or its affiliates under this Indenture except as may result from its own default, gross negligence or bad faith or that of its directors, officers or employees or any of them, or breach by it of the terms of this Indenture.

7.6.6 The Company acknowledges that the Principal Paying Agent makes no representations as to the interpretation or characterization of the transactions herein undertaken for tax or any other purpose, in any jurisdiction.

The Company agrees to pay any and all stamp and other documentary taxes or duties which may be payable in connection with the execution, delivery, performance and enforcement of this Indenture by the Paying Agent.

7.7 Replacement of Trustee

7.7.1

(i) The Trustee may resign at any time by written notice to the Company.

(ii) The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by written notice to the Trustee.

(iii) If the Trustee is no longer eligible under Section 7.9, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(iv) The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.9; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.

A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.

7.7.2 If the Trustee has been removed by the Holders, Holders of a majority in principal amount of the Notes may appoint a successor Trustee with the consent of the Company. Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. If the successor Trustee does not

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deliver its written acceptance within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

7.7.3 Upon delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.6, (ii) the resignation or removal of the retiring Trustee will become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under the Indenture. Upon request of any successor Trustee, the Company will execute any and all instruments for fully and vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Company will give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders, and include in the notice the name of the successor Trustee and the address of its Corporate Trust Office.

7.7.4 Notwithstanding replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.6 will continue for the benefit of the retiring Trustee.

7.8 Successor Trustee by Merger

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee in the Indenture.

7.9 Eligibility

The Indenture must always have a Trustee that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least US$25,000,000 as set forth in its most recent published annual report of condition and its Corporate Trust Office in The City of New York, New York.

7.10 Money Held in Trust

The Trustee will not be liable for interest on any money received by it except as it may agree with the Company. Money held in trust by the Trustee, the Principal Paying Agent or any Paying Agent need not be segregated from other funds except to the extent required by law and except for money held in trust under Section 8.

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8 Defeasance and Discharge

8.1 Discharge of Company’s Obligations

8.1.1 Subject to clause 8.1.2, the Company’s obligations under the Notes and the Indenture will terminate if:

(i) all Notes previously authenticated and delivered (other than (A) destroyed, lost or stolen Notes that have been replaced or (B) Notes that are paid pursuant to Section 4.1 or (C) Notes for whose payment money or U.S. Government Obligations have been held in trust and then repaid to the Company pursuant to Section 8.5) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or

(ii)

(a) the Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations in Dollars or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder;

(b) no Default has occurred and is continuing on the date of the deposit;

(c) the deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; and

(d) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of the Indenture have been complied with.

8.1.2 After satisfying the conditions in clause 8.1.1(i), only the Company’s obligations under Section 7.6 will survive. After satisfying the conditions in clause 8.1.1(ii), only the Company’s obligations in Section 2 and Sections 3.1, 4.1, 4.2, 7.6, 7.7, 8.5 and 8.6 will survive. In either case, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes and the Indenture other than the surviving obligations.

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8.2 Legal Defeasance

After the 123rd day following the deposit referred to in clause 8.2.1 (i) below, the Company will be deemed to have paid and will be discharged from its obligations in respect of the Notes and the Indenture, other than its obligations in Section 2 and Sections 3.1, 4.1, 4.2, 7.6, 7.7, 8.5 and 8.6, will terminate, PROVIDED the following conditions have been satisfied:

8.2.1

(i) The Company has irrevocably deposited in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of an internationally recognized firm of independent public accountants expressed in a written certificate thereof delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, PROVIDED that any redemption before maturity has been irrevocably provided for under arrangements satisfactory to the Trustee.

(ii) No Default has occurred and is continuing on the date of the deposit or occurs at any time during the
123-day period following the deposit.

(iii) The deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.

(iv) The Company has delivered to the Trustee:

(a) either (x) a ruling received from the Internal Revenue Service to the effect that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case or (y) an Opinion of Counsel, based on a change in law after the date of the Indenture, to the same effect as the ruling described in (x);

(b) an Opinion of Counsel to the effect that (i) the creation of the defeasance trust does not violate the Investment Company Act of 1940, as amended, (ii) the Holders have a valid first priority Note interest in the trust funds (subject to customary exceptions), and (iii) after the passage of 123 days following the deposit, the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law; and

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(c) an Opinion of Counsel from Brazil and any other jurisdiction in which the Company is conducting business in a manner which causes the Holders of the Notes to be liable for taxes on payments under the Notes for which they would not have been so liable but for such conduct of business in such other jurisdiction, to the effect that the Holders will not recognize income, gain or loss in the relevant jurisdiction as a result of such deposit and the defeasance and will be subject to taxes in the relevant jurisdiction (including withholding taxes) (as applicable) on the same amount and in the same manner and at the same times as would otherwise have been the case if such deposit and defeasance had not occurred.

(v) If the Notes are listed on a U.S. national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the deposit and defeasance will not cause the Notes to be delisted.

(vi) The Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance have been complied with.

Prior to the end of the 123-day period, none of the Company’s obligations under the Indenture will be discharged. Thereafter, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes and the Indenture except for the surviving obligations specified above.

8.3 Covenant Defeasance

After the 123rd day following the deposit referred to in clause 8.1.1(ii), the Company’s obligations set forth in Section 4.8 through 4.18 will terminate, and clauses 6.1.3 through 6.1.6 will no longer constitute Events of Default, PROVIDED that the following conditions have been satisfied:

8.3.1 the Company has complied with clauses 8.2.1(i), (ii), (iii), (iv)(b), (v) and (vi); and

8.3.2 the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case.

Except as specifically stated above, none of the Company’s obligations under the Indenture will be discharged.

8.4 Application of Trust Money

Subject to Section 8.5, the Trustee will hold in trust the money or U.S. Government Obligations deposited with it pursuant to Section 8.1, 8.2 or 8.3, and apply the deposited money and the proceeds from deposited U.S. Government Obligations to the payment of principal of and interest on the Notes in accordance with the Notes and the Indenture. Such money and U.S. Government Obligations need not be segregated from other funds except to the extent required by law.

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8.5 Repayment to Company

Subject to Section 7.6, 8.1, 8.2 and 8.3, the Trustee and the Paying Agents will promptly pay to the Company upon request any excess money held by the Trustee and the Paying Agents at any time and thereupon be relieved from all liability with respect to such money. The Trustee or such Paying Agent will pay to the Company upon request any money held for payment with respect to the Notes that remains unclaimed for two years; PROVIDED that before making such payment the Trustee or such Paying Agent may at the expense of the Company publish once in a newspaper of general circulation in New York City, or send to each Holder entitled to such money, notice that the money remains unclaimed and that after a date specified in the notice (at least 30 days after the date of the publication or notice) any remaining unclaimed balance of money will be repaid to the Company. After payment to the Company, Holders entitled to such money must look solely to the Company for payment, unless applicable law designates another Person, and all liability of the Trustee and the Paying Agents with respect to such money will cease.

8.6 Reinstatement

If and for so long as the Trustee is unable to apply any money or U.S. Government Obligations held in trust pursuant to Section 8.1, 8.2 or 8.3 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes will be reinstated as though no such deposit in trust had been made. If the Company makes any payment of principal of or interest on any Notes because of the reinstatement of its obligations, they will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held in trust.

9 Amendments, Supplements and Waivers

9.1 Amendments Without Consent of Holders

9.1.1 The Company and the Trustee may amend or supplement the Indenture or the Notes without notice to or the consent of any Noteholder:

(i) to cure any ambiguity, defect or inconsistency in the Indenture or the Notes;

(ii) to comply with Section 5;

(iii) to add to the covenants of the Company for the benefit of the Noteholders;

(iv) to surrender any right conferred upon the Company;

(v) to evidence and provide for the acceptance of an appointment hereunder by a successor Trustee;

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(vi) to secure the Notes or to confirm and evidence the release, termination or discharge of any guarantee of or Lien securing the Notes when such release, termination or discharge is permitted by the Indenture;

(vii) to provide for the issuance of Additional Notes;

(viii) to make any other change that does not materially and adversely affect the rights of any Holder or to conform this Indenture to the description of the Notes in the Offering Circular; or

(ix) to cause an additional guarantor to guarantee the obligations of the Company under the Notes and the Indenture, which shall be required to be informed to and approved by the Central Bank through the Central Bank electronic system (SISBACEN).

9.2 Amendments With Consent of Holders

9.2.1 Except as otherwise provided in Section 6.2 through 6.7 or clause 9.2.2, the Company and the Trustee may amend the Indenture and the Notes with the written consent of the Holders of a majority in principal amount of the outstanding Notes, and the Holders of a majority in principal amount of the outstanding Notes by written notice to the Trustee may waive future compliance by the Company with any provision of the Indenture or the Notes.

9.2.2 Notwithstanding the provisions of paragraph (a), without the consent of each Holder affected, an amendment or waiver may not:

(i) reduce the rate of any Note or change the time for payment of interest on any Note;

(ii) reduce the principal amount of or change the Stated Maturity of any installment of the principal of any Note;

(iii) reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed;

(iv) change the currency for payment of principal of, or interest on, any Note;

(v) impair the right of any Holder of Notes to institute suit for the enforcement of any payment on or with respect to any Notes;

(vi) waive certain payment defaults with respect to the Notes;

(vii) reduce the principal amount of Notes whose Holders must consent to any amendment or waiver;

(viii) make any change in the amendment or waiver provisions of this Indenture which require each Noteholders’ consent;

(ix) modify or change any provision of the Indenture affecting the ranking of the Notes in a manner adverse to the Holders of the Notes;

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(x) after the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase date thereunder.

PROVIDED that the provisions of Sections 4.13 and 4.14 may, except as provided above, be amended or waived with the consent of Holders holding not less than 66 2/3 per cent. in aggregate principal amount of the Notes.

9.2.3 It is not necessary for Noteholders to approve the particular form of any proposed amendment, supplement or waiver, but is sufficient if their consent approves the substance thereof.

9.2.4 An amendment, supplement or waiver under this Section will become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Notes. After an amendment, supplement or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or their written waiver. The Company will send supplemental indentures to Holders upon request. Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

9.3 Effect of Consent

9.3.1 After an amendment, supplement or waiver becomes effective, it will bind every Holder unless it is of the type requiring the consent of each Holder affected. If the amendment, supplement or waiver is of the type requiring the consent of each Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting Holder. Any changes to the terms and conditions of the Notes will need to be informed to and approved by the Central Bank through the Central Bank electronic system (SISBACEN).

9.3.2 If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of the changed terms on the Note and return it to the Holder, or exchange it for a new Note that reflects the changed terms. The Trustee may also place an appropriate notation on any Note thereafter authenticated. However, the effectiveness of the amendment, supplement or waiver is not affected by any failure to annotate or exchange Notes in this fashion.

9.4 Trustee’s Rights and Obligations

The Trustee is entitled to receive, and will be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Section 9 is authorized or permitted by the Indenture. If the Trustee has received such an Opinion of Counsel, it shall sign the amendment, supplement or waiver so long as the same does not adversely affect the rights of the Trustee. The Trustee may, but is not obligated to, execute any amendment, supplement or waiver that affects the Trustee’s own rights, duties or immunities under the Indenture.

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9.5 Payments for Consents

Neither the Company nor any of its Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver or amendment.

10 Miscellaneous

10.1 Noteholder Communications; Noteholder Actions

10.1.1 The rights of Holders to communicate with other Holders with respect to the Indenture or the Notes are as provided by the Trust Indenture Act, and the Company and the Trustee shall comply with the requirements of Trust Indenture Act Sections 312(a) and 312(b). Neither the Company nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

10.1.2

(i) Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by this Indenture to be given or taken by a Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact and date of the execution of the instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient.

(ii) The Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders.

10.1.3 Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears on the Note. Subject to paragraph (c), a Holder may revoke an act as to its Notes, but only if the Trustee receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.

10.1.4 The Company may, but is not obligated to, fix a record date for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee may set a record date as to notices of

61

default, any declaration or acceleration or any other remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act will be valid or effective for more than 90 days after the record date.

10.2 Notices

10.2.1 Any notice or communication to the Company will be deemed given if in writing (i) when delivered in person or (ii) an internationally recognized overnight courier service, or (iii) when sent by facsimile transmission, with transmission confirmed. Any notice to the Trustee will be effective only upon receipt. In each case the notice or communication should be addressed as follows:

(i) if to the Company:

JBS S.A. Av. Marginal Tietê, 500, CEP 05118-100 São Paulo, SP, Brazil
Attention:	Sergio Longo, Chief Financial Officer
Facsimile:	55-11-3144-4079
With a copy to: White & Case LLP Alameda Santos, 1.940 – 3rd Floor 01418-200 – São Paulo, SP Brazil
Attention:	Donald Baker
Facsimile:	55-11-3147-5611

(ii) if to the Trustee, the Luxembourg Paying Agent or the Transfer Agent:

JPMorgan Chase Bank, N.A. 4 New York Plaza Worldwide Security Services, 15th Floor, New York, New York, 10004 – 2413
Fax:	(212) 623-6207

(iii) if to the Principal Paying Agent:

The Bank of Tokyo-Mitsubishi UFJ, Ltd 12-15 Finsbury Circus London EC2M 7BT Attn: Nikola Webb, Securities Services
Fax:	44 20 7577 1609

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The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

10.2.2 Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its address as it appears on the Register by first class mail or, as to any Global Note registered in the name of DTC or its nominee, as agreed by the Company, the Trustee and DTC; PROVIDED, that, at any time when the Notes are listed on the Luxembourg Stock Exchange and its rules so require, the Company will publish any such notice of communication sent to the Holders in a newspaper having a general circulation in Luxembourg. Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time. Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders.

10.2.3 Where the Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers.

10.3 Certificate and Opinion as to Conditions Precedent

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company will furnish to the Trustee:

10.3.1 an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with; and

10.3.2 an Opinion of Counsel stating that all such conditions precedent have been complied with.

10.4 Statements Required in Certificate or Opinion

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:

10.4.1 a statement that each person signing the certificate or opinion has read the covenant or condition and the related definitions;

10.4.2 a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the certificate or opinion is based;

10.4.3 a statement that, in the opinion of each such person, that person has made such examination or investigation as is necessary to enable the person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

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10.4.4 a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with, PROVIDED that an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials with respect to matters of fact.

10.5 Payment Date other than a Business Day

If any payment with respect to a payment of any principal of, premium, if any, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

10.6 Governing Law

The Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

10.7 Submission to Jurisdiction; Agent for Service; Waiver of Immunities

10.7.1 The Company agrees that any suit, action or proceeding against it brought by any Noteholder or the Trustee arising out of or based upon this Indenture or the Notes may be instituted in any state or Federal court in the Borough of Manhattan in The City of New York, New York, and waive any objection which each of them may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submit to the non-exclusive jurisdiction of such courts in any suit, action or proceeding.

10.7.2 By the execution and delivery of this Indenture or any amendment or supplement hereto, the Company (i) acknowledges that it hereby designates and appoints National Corporate Research, Ltd., 225 West 34^th Street, Suite 910, New York, New York 10122, as its authorized agent upon which process may be served in any suit, action or proceeding with respect to, arising out of, or relating to, the Notes or this Indenture, that may be instituted in any Federal or state court in the State of New York, The City of New York, the Borough of Manhattan, or brought under Federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder), and acknowledges that National Corporate Research, Ltd. has accepted such designation, (ii) submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) agrees that service of process upon National Corporate Research, Ltd. shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments as may be necessary to continue such designation and appointment of National Corporate Research, Ltd. in full force and effect so

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long as this Indenture shall be in full force and effect; provided that the Company may and shall (to the extent National Corporate Research, Ltd. ceases to be able to be served on the basis contemplated herein), by written notice to the Trustee, designate such additional or alternative agents for service of process under this Section 10.7 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (x) counsel for the Company or (y) a corporate service company which acts as agent for service of process for other Persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 10.7. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any Noteholder, the Trustee shall deliver such information to such Noteholder. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Company appointed and acting in accordance with this Section 10.7.

10.7.3 To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Company hereby irrevocably waives such immunity in respect of their obligations under this Indenture and the Notes, to the extent permitted by law.

10.8 Judgment Currency

10.8.1 Dollars are the sole currency of account and payment for all sums due and payable by the Company under this Indenture and the Notes. If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum due hereunder in Dollars into another currency, the Company will agree, to the fullest extent that it may legally and effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Trustee determines a Person could purchase Dollars with such other currency in New York, New York, on the business day immediately preceding the day on which final judgment is given.

10.8.2 The obligation of the Company in respect of any sum due to any Noteholder or the Trustee in Dollars shall, to the extent permitted by applicable law, notwithstanding any judgment in a currency other than Dollars, be discharged only to the extent that on the Business Day following receipt of any sum adjudged to be so due in the judgment currency such Noteholder or Trustee may in accordance with normal banking procedures purchase Dollars in the amount originally due to such Person with the judgment currency. If the amount of Dollars so purchased is less than the sum originally due to such Person, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Person against the resulting loss; and if the amount of Dollars so purchased is greater than the sum originally due to such Person, such Person will, by accepting a Note, be deemed to have agreed to repay such excess.

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10.9  No Adverse Interpretation of other Agreements

This Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret this Indenture.

10.10  Successors

All agreements of the Company in this Indenture and the Notes will bind its successors. All agreements of the Trustee in the Indenture will bind its successor.

10.11  Duplicate Originals

The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

10.12  Separability

In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

10.13  Table of Contents and Headings

The Table of Contents, Cross-Reference Table and headings of Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and in no way modify or restrict any of the terms and provisions of this Indenture.

10.14  No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders

No director, officer, employee, incorporator, member or stockholder of the Company, as such, will have any liability for any obligations of the Company under the Notes, or this Indenture or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are an integral part of the consideration for issuance of the Notes execution.

[Signature page to follow]

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In witness whereof, the parties hereto have caused the Indenture to be duly executed as of the date first written above.

JBS S.A.
as Issuer
By:
	Name:
	Title:
JPMORGAN CHASE BANK, N.A.
as Trustee
By:
	Name:
	Title:
The Bank of Tokyo-Mitsubishi UFJ, Ltd., acting through its London branch
as Principal Paying Agent
By:
	Name:
	Title:
J.P. MORGAN BANK LUXEMBOURG S.A.
as Luxembourg Paying Agent and Transfer Agent
By:
	Name:
	Title:

67

Exhibit A

Form of Note

[Face of Note]

JBS S.A.

10.50 per cent. Senior Note Due 2016

	[CUSIP] [ISIN] [•]
No.	US$[•]

JBS S.A., a Brazilian corporation (the “Company”, which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to [•], or its registered assigns, the principal sum of [•] DOLLARS (US$[•]) [or such other amount as indicated on the Schedule of Exchange of Notes attached hereto] on [•].

Interest Rate: 10.50 per cent. per annum.

Interest Payment Dates: August 4 and February 4.

Regular Record Dates: [•].

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

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In witness whereof, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers.

Date: [•]

JBS S.A.
By:
	Name: [•]
	Title:   [•]
By:
	Name:   [•]
	Title:     [•]

69

(Form of Trustee’s Certificate of Authentication)

This is one of the 10.50 per cent. Senior Notes Due 2016 described in the Indenture referred to in this Note.

JPMORGAN CHASE BANK, N.A. as Trustee
By:
	Authorized Officer

70

[Reverse Side of Note]

JBS S.A.

10.50 per cent. Senior Note Due 2016

1 Principal and Interest

The Company promises to pay the principal of this Note on August 4, 2016.

The Company promises to pay interest on the principal amount of this Note on each Interest Payment Date, as set forth on the face of this Note, at the rate of 10.50 per cent. per annum.

Interest will be payable semi-annually (to the holders of record of the Notes at the close of business on the July 20 and January 20 immediately preceding the Interest Payment Date) on each Interest Payment Date, commencing February 4, 2007.

Interest on this Note will accrue from the most recent date to which interest has been paid on this Note (or, if there is no existing default in the payment of interest and if this Note is authenticated between a Regular Record Date and the next Interest Payment Date, from such Interest Payment Date) or, if no interest has been paid, from the Issue Date. Interest will be computed in the basis of a 360-day year of twelve 30-day months.

The Company will pay interest on overdue principal, premium, if any, and, to the extent lawful, interest at a rate per annum that is 1 per cent. per annum in excess of the rate per annum borne by this Note. Interest not paid when due and any interest on principal, premium or interest not paid when due will be paid to the Persons that are Holders on a special record date, which will be the 15th day preceding the date fixed by the Company for the payment of such interest, whether or not such day is a Business Day. At least 15 days before a special record date, the Company will send to each Holder and to the Trustee a notice that sets forth the special record date, the payment date and the amount of interest to be paid.

2 Indentures

This is one of the Notes issued under an Indenture dated as of August 4, 2006 (as amended from time to time, the “Indenture”), among the Company, and JPMorgan Chase Bank, N.A., as Trustee, The Bank of Tokyo-Mitsubishi UFJ Ltd., acting through its London branch, as Principal Paying Agent and J.P. Morgan Bank Luxembourg S.A., as Luxembourg Paying Agent and Transfer Agent. Capitalized terms used herein are used as defined in the Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture, as may be amended from time to time. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control.

The Notes are general unsecured obligations of the Company. The Indenture limits the original aggregate principal amount of the Notes to US$300,000,000, but Additional Notes may be issued pursuant to the Indenture, and the originally issued Notes and all such Additional Notes vote together for all purposes as a single class.

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3 Redemption and Repurchase; Discharge Prior to Redemption or Maturity

This Note may be the subject of an Offer to Purchase, as further described in the Indenture. There is no sinking fund or mandatory redemption applicable to this Note.

The Note is subject to redemption for tax reasons as described in Section 3.3.

Additional Amounts will be paid in respect of any payments of interest or principal so that the amount a holder receives after Brazilian withholding tax, will equal the amount that the holder would have received if no withholding tax had been applicable, to the extent described in Section 3.1.

If the Company deposits with the Trustee money or U.S. Government Obligations sufficient to pay the then outstanding principal of, premium, if any, and accrued interest on the Notes to redemption or maturity, the Company may in certain circumstances be discharged from the Indenture and the Notes or may be discharged from certain of its obligations under certain provisions of the Indenture.

4 Registered Form; Denominations; Transfer; Exchange

The Notes are in registered form without coupons in denominations of US$100,000 principal amount and any multiple of US$1,000 in excess thereof. A Holder may register the transfer or exchange of Notes in accordance with the Indenture. The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Pursuant to the Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note.

5 Defaults and Remedies

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 25 per cent. in principal amount of the Notes may declare all the Notes to be due and payable. If a bankruptcy default with respect to the Company occurs and is continuing, the Notes automatically become due and payable. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in its exercise of remedies.

6 Amendment and Waiver

Subject to certain exceptions, the Indenture and the Notes may be amended, or default may be waived, with the consent of the Holders of a majority in principal amount of the outstanding Notes. Without notice to or the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency if such amendment or supplement does not adversely affect the interests of the Holders in any material respect.

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7 Authentication

This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of authentication on the other side of this Note.

8 Governing Law

This Note shall be governed by, and construed in accordance with, the laws of the State of New York. Reference is hereby made to the further provisions of submission to jurisdiction, agent for service, waiver of immunities and judgment currency set forth in the Indenture, which will for all purposes have the same effect as if set forth herein.

9 Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

The Company will furnish a copy of the Indenture to any Holder upon written request and without charge.

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[Form of Transfer Notice]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

Please print or typewrite name and address including zip code of assignee

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

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[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES BEARING A RESTRICTED LEGEND]

In connection with any transfer of this Note occurring prior to [•], the undersigned confirms that such transfer is made without utilizing any general solicitation or general advertising and further as follows:

Check One

¨ (1) This Note is being transferred to a “qualified institutional buyer” in compliance with Rule 144A under the U.S. Securities Act of 1933, as amended, and certification in the form of Exhibit E to the Indenture is being furnished herewith.

¨ (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from registration under the U.S. Securities Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of Exhibit E to the Indenture is being furnished herewith.

or

¨ (3) This Note is being transferred other than in accordance with (1) or (2) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in the Indenture have been satisfied.

Date: [•]

Seller

By 

Notice: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

Signature Guarantee:5
	By
	To be executed by an executive officer

⁵ Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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Option of Holder to Elect Purchase

If you wish to have all of this Note purchased by the Company pursuant to Section 4.14 or Section 4.13 of the Indenture, check the box: ¨

If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.14 or Section 4.13 of the Indenture, state the amount (in original principal amount) below:

US$__________________________.

Date:  ___________________________

Your Signature:  _______________________

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:¹  __________________________

¹ Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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Schedule of Exchanges of Notes¹

The following exchanges of a part of this Global Note for Physical Notes or a part of another Global Note have been made:

Date of Exchange Amount of decrease
in principal amount
of this Global Note Amount of increase
in principal amount
of this Global Note Principal amount of
this Global Note
following such decrease
(or increase) Signature of
authorized officer
of Trustee

¹ For Global Notes.

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Exhibit B

Form of Supplemental Indenture

Dated [•]

JBS S.A.

as Issuer

and

SIGNIFICANT SUBSIDIARY

as Guarantor

and

JPMORGAN CHASE BANK, N.A.,

as Trustee

and

THE BANK OF TOKYO-MITSUBISHI UFJ, Ltd., acting through its London branch

as Principal Paying Agent

and

J.P. MORGAN BANK LUXEMBOURG S.A.,

as Luxembourg Paying Agent and Transfer Agent

SUPPLEMENTAL INDENTURE

10.50 per cent.

Senior Notes

Due 2016

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This Supplemental Indenture (this “Supplemental Indenture”), entered into as of [•], [•], among JBS S.A., a sociedade anônima (corporation) incorporated under the laws of the Federative Republic of Brazil, as the Company, [Significant Subsidiary] as the Undersigned, JPMORGAN CHASE BANK, N.A., a New York banking corporation, as Trustee, THE BANK OF TOKYO-MITSUBISHI UFJ, Ltd., acting through its London branch, as Principal Paying Agent, and J.P. MORGAN BANK LUXEMBOURG S.A., as Luxembourg Paying Agent and Transfer Agent.

Recitals:

Whereas, the Company and the Trustee entered into the Indenture, dated as of August 4, 2006 (the “Indenture”), relating to the Company’s 10.50 per cent. Senior Notes due 2016 (the “Notes”).

Whereas, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Company agreed pursuant to the Indenture to cause any newly acquired or created Significant Subsidiaries to provide a guarantee pursuant to clause 2 of this Supplemental Indenture in certain circumstances.

Agreement:

Now, therefore, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

1 Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

2 The Undersigned, by its execution of this Supplemental Indenture, agrees to be a guarantor under the Indenture and to be bound by the terms of this Supplemental Indenture pursuant to the following provisions (the “Guarantor”):

2.1 The Guarantee

Subject to the provisions of this Section, the Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally with all current and subsequent Guarantors, if any, on an unsecured basis, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under the Indenture. Upon failure by the Company to pay punctually any such amount, the Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in this Indenture.

2.2 Guarantee Unconditional

The obligations of the Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

2.2.1 any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under this Indenture or any Note, by operation of law or otherwise;

79

2.2.2 any modification or amendment of or supplement to this Indenture or any Note;

2.2.3 any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in this Indenture or any Note;

2.2.4 the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions; PROVIDED that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

2.2.5 any invalidity or unenforceability relating to or against the Company for any reason of this Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

2.2.6 any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.

2.3 Discharge; Reinstatement

The Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under this Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

2.4 Waiver by the Guarantor

The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

2.5 Subrogation and Contribution

Upon making any payment with respect to any obligation of the Company under this clause 2, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation; PROVIDED that the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other Guarantor, if any, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

80

2.6 Stay of Acceleration

If acceleration of the time for payment of any amount payable by the Company under this Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of this Indenture are nonetheless payable by the Guarantor hereunder forthwith on demand by the Trustee or the Holders.

2.7 Limitation on Amount of Guarantee

Notwithstanding anything to the contrary in this clause 2, the Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the guarantee of the Guarantor not constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantor hereby irrevocably agree that the obligations of the Guarantor under its guarantee are limited to the maximum amount that would not render the Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law.

The Trustee, the Holders and the Guarantor further hereby irrevocably agree that the obligations of the Guarantor under its guarantee are limited to the maximum amount that would not result in a breach or violation by the Guarantor of any agreement to which the Guarantor is a party and entered into prior to the date that the Guarantor constituted a Significant Subsidiary.

2.8 Execution and Delivery of Guarantee

The execution by the Guarantor of this supplemental indenture evidences the guarantee of the Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Note. The delivery of any Note by the Trustee after authentication constitutes due delivery of the guarantee set forth in this clause 2 on behalf of the Guarantor.

2.9 Release of Guarantee

The guarantee of a Guarantor will terminate upon:

2.9.1 a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Subsidiary) otherwise permitted by this Indenture;

2.9.2 if the guarantee was required pursuant to the terms of this Indenture, the cessation of the circumstances requiring the guarantee; or

2.9.3 defeasance or discharge of the Notes, as provided in Section 8 of the Indenture.

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Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the foregoing effect, the Trustee will execute any documents reasonably requested by the Company in writing in order to evidence the release of the Guarantor from its obligations under its guarantee.

3 This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

4 This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

5 This Supplemental Indenture is an amendment supplemental to the Indenture, and the Indenture and this Supplemental Indenture will henceforth be read together.

82

In witness whereof, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

JBS S.A. as Issuer
By:
	Name: [•]
	Title:   [•]
[SIGNIFICANT SUBSIDIARY] as Guarantor
By:
	Name: [•]
	Title:   [•]
By:
	Name: [•]
	Title:   [•]
JPMORGAN CHASE BANK, N.A. as Trustee
By:
	Name: [•]
	Title:   [•]

The Bank of Tokyo-Mitsubishi UFJ, Ltd., acting through its London branch

as Principal Paying Agent
By:
	Name: [•]
	Title:   [•]

J.P. MORGAN BANK LUXEMBOURG S.A. as Luxembourg Paying Agent and Transfer Agent
By:
	Name: [•]
	Title:   [•]

83

Exhibit C

Restricted Legend

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

(1) REPRESENTS THAT

(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, OR

(B) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT); AND

(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

(A) TO THE COMPANY,

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT;

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT;

(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; OR

(E) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND EXECUTED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

84

Exhibit D

DTC Legend

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

85

Exhibit E

Regulation S Certificate

[•]

JPMorgan Chase Bank, N.A.

[4 New York Plaza

Institutional Trust Services, 15th Floor

New York, New York, 10004]

Attention:	Corporate Trust Administration
Re:	JBS S.A., as Issuer 10.50 per cent. Senior Notes due 2016 (the “Notes”) Issued under the Indenture (the “Indenture”) dated as of August 4, 2006 relating to the Notes

Ladies and Gentlemen:

Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

[CHECK A OR B AS APPLICABLE.]

¨ A.  This Certificate relates to our proposed transfer of US$[•] principal amount of Notes issued under the Indenture. We hereby  certify as follows:

 1. The offer and sale of the Notes was not and will not be made to a person in the United States (unless such person is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad;

 2. Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our behalf knows that the transaction was pre-arranged with a buyer in the United States;

 3. Neither we, any of our affiliates, nor any person acting on our or their behalf, has made any directed selling efforts in the United States with respect to the Notes;

 4. The proposed transfer of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act; and

 5. If we are an officer or director of the Company or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904(b) of Regulation S.

86

¨ B.  This Certificate relates to our proposed exchange of US$[•] principal amount of Notes issued under the Indenture for an equal  principal amount of Notes to be held by us. We hereby certify as follows:

 1. At the time the offer and sale of the Notes was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we were not a member of an identifiable group of U.S. citizens abroad;

 2. Unless the circumstances described in paragraph 1(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and we did not pre-arrange the transaction in the United States; and

 3. The proposed exchange of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours, [NAME OF SELLER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
By:
	Name:	[•]
	Title:	[•]
	Address:	[•]

Date: [•]

87

Exhibit F

Rule 144A Certificate

[•]

JPMorgan Chase Bank, N.A.

[4 New York Plaza

Institutional Trust Services, 15th Floor

New York, New York, 10004]

Re: JBS S.A., as Issuer

10.50 per cent. Senior Notes due 2016 (the “Notes”) Issued under the Indenture (the “Indenture”) dated as of August 4, 2006 relating to the Notes

Ladies and Gentlemen:

TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.

This Certificate relates to:

[CHECK A OR B AS APPLICABLE.]

¨ A. Our proposed purchase of US$[•] principal amount of Notes issued under the Indenture.

¨ B. Our proposed exchange of US$[•] principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

We and, if applicable, each account for which we are acting in the aggregate owned and invested more than US$100,000,000 in securities of issuers that are not affiliated with us (or such accounts, if applicable), as of [•], 200[•], which is a date on or since close of our most recent fiscal year. We and, if applicable, each account for which we are acting, are a qualified institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the ”Securities Act”). If we are acting on behalf of an account, we exercise sole investment discretion with respect to such account. We are aware that the transfer of Notes to us, or such exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we have received such information regarding the Company as we have requested pursuant to Rule 144A(d)(4) to the extent that the Company is not then subject to Section 13 or 15(d) of the Exchange Act, or is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act or have determined not to request such information.

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,

[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

By:
	Name:	[•]
	Title:	[•]
	Address:	[•]

Date: [•]

88

EX-10.1.3

Exhibit 10.1.3

EXECUTION VERSION

FIRST SUPPLEMENTAL INDENTURE

dated as of January 31, 2007

among

JBS S.A.,

as Issuer,

JBS FINANCE LTD.,

as Co-Issuer,

FLORA PRODUTOS DE HIGIENE E LIMPEZA LTDA.,

as Guarantor,

and

THE BANK OF NEW YORK,

as Trustee

SUPPLEMENTAL INDENTURE

U.S.$300,000,000 10.50% Senior Notes due 2016

This First Supplemental Indenture (this “Supplemental Indenture”), entered into as of January 31, 2007, among JBS S.A., a corporation (sociedade anônima) incorporated under the laws of the Federative Republic of Brazil (the “Company”), JBS FINANCE LTD., a limited liability company incorporated under the laws of the Cayman Islands (“JBS Finance”), FLORA PRODUTOS DE HIGIENE E LIMPEZA LTDA., a limited liability company (sociedade limitada) organized under the laws of the Federative Republic of Brazil (“Flora”), and THE BANK OF NEW YORK, a New York Banking Corporation (the “Trustee”).

Recitals:

Whereas, the Company and the Trustee are party to that certain Indenture, dated as of August 4, 2006 (the “Indenture”), relating to the Company’s U.S.$300,000,000 principal amount of 10.50 percent Senior Notes due 2016 (the “Notes”);

Whereas, the Company intends to transfer all of the assets and certain related liabilities of its hygiene and cleaning products division, as well as certain other assets that are not directly related to its core beef business (collectively, the “Flora Net Assets”), to its newly created affiliate, Flora, a wholly-owned subsidiary of J&F Participações Ltda., a limited liability company (sociedade limitada) organized under the laws of the Federative Republic of Brazil and the parent company of the Company (such transfer, the “Flora Transaction”);

Whereas, the parties hereto intend to provide that, simultaneously upon the consummation of the Flora Transaction, Flora will jointly and severally guarantee the Notes pursuant to and subject to the provisions set forth in Section 2 of this Supplemental Indenture and be bound by certain covenants pursuant to and subject to the provisions set forth in Section 3 of this Supplemental Indenture, and upon such transfer, the Flora Net Assets will no longer be part of (or otherwise included in) the assets and liabilities of the Company; and

Whereas, JBS Finance has agreed to act as a co-issuer of the Notes and be bound by certain covenants pursuant to and subject to the provisions set forth in Sections 5 and 6 of this Supplemental Indenture.

Agreement:

Now, therefore, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

1 Definitions

“Flora Guarantee” means the guarantee by Flora with respect to the Notes pursuant to Section 2 of this Supplemental Indenture;

“Flora Net Assets” has the meaning set forth in the recitals hereto;

“Flora Officer’s Certificate” means a certificate of Flora signed in the name of Flora by the chairman of the board of directors of Flora, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary of Flora;

“Flora Opinion of Counsel” means a written opinion signed by legal counsel, who may be an employee of or counsel to Flora or the Company, reasonably satisfactory to the Trustee;

“Flora Transaction” has the meaning set forth in the recitals hereto;

“Organizational Documents” means, with respect to JBS Finance, the memorandum of association, bylaws and any other documents governing the formulation and organization of JBS Finance, or the equivalents of such constitutive documents under the laws of the Cayman Islands;

“S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc. and its successors; and

“Subsidiary of Flora” means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interest (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or officers thereof is at the time owned or controlled, directly or indirectly, by (1) Flora, (2) Flora and one or more of its Subsidiaries, or (3) one or more Subsidiaries of Flora.

Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

2 The Flora Guarantee

Notwithstanding any other provision of the Indenture, the Company and Flora may enter into and effect the Flora Transaction, which Flora Transaction may be effected by the Company and Flora retroactively as of December 31, 2006 or any date thereafter prior to the date hereof; provided that, Flora, by its execution of this Supplemental Indenture, agrees to be a guarantor under the Indenture and to be bound by the terms of this Supplemental Indenture pursuant to the following provisions (the “Flora Guarantee”) and the covenants and agreements set forth in Sections 3, 4 and 7 hereof:

2.1 The Flora Guarantee

Subject to the provisions of this Section 2, Flora hereby irrevocably and unconditionally guarantees, jointly and severally with all current and subsequent guarantors, if any, on an unsecured basis, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable by the Company under the Indenture. Upon failure by the Company to pay punctually any such amount, Flora shall forthwith on demand pay the amount not so paid at the place and in the manner specified.

2.2 Guarantee Unconditional

The obligations of Flora hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

2.2.1   any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Note, by operation of law or otherwise;

2.2.2   any modification or amendment of or supplement to the Indenture or any Note;

2.2.3   any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture or any Note;

2.2.4   the existence of any claim, set-off or other rights which Flora may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions; provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

2.2.5   any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

2.2.6   any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to Flora’s obligations hereunder.

2.3 Waiver

Flora irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

2.4 Subrogation and Contribution

Upon making any payment with respect to any obligation of the Company under this Section 2, Flora will be subrogated to the rights of the payee against the Company with respect to such obligation; provided that Flora may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other guarantor, if any, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

2.5 Stay of Acceleration

If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by Flora hereunder forthwith on demand by the Trustee or the Holders.

2.6 Limitation on Amount of the Flora Guarantee

Notwithstanding anything to the contrary in this Section 2, Flora, and by its acceptance of the Flora Guarantee, each Holder, hereby confirms that it is the intention of all such parties that the Flora Guarantee not constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and Flora hereby irrevocably agree that the obligations of Flora under the Flora Guarantee are limited to the maximum amount that would not render Flora’s obligations subject to avoidance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law.

2.7 Execution and Delivery of Guarantee

The execution by Flora of this Supplemental Indenture evidences the Flora Guarantee. The delivery of any Note by the Trustee after authentication constitutes due delivery of the Flora Guarantee set forth in this Section 2 on behalf of Flora.

2.8 Release of Flora

Notwithstanding any other provision herein, (1) the Flora Guarantee will terminate, (2) the covenants applicable to Flora and the defined terms used in connection therewith set forth in Sections 3 and 4 of this Supplemental Indenture shall be of no further force or effect, provided, however, that Section 4.8 of the Indenture shall apply to the principal amount of any intercompany indebtedness owed by the Company or any Subsidiary of the Company to Flora or any Subsidiary of Flora as if such indebtedness were incurred immediately following termination of the Flora Guarantee, and (3) the Events of Default, as modified in Section 7 of this Supplemental Indenture, shall no longer refer or be applicable to Flora, upon the earlier of the following (such earlier date, the “Flora Release Date”):

2.8.1   A sale or other disposition (including by way of consolidation or merger) of Flora or the sale or disposition of all or substantially all of the assets of Flora (in each case other than to the Company or a Subsidiary of the Company) otherwise permitted by the Indenture;

2.8.2   defeasance or discharge of the Notes, as provided in Article 8 of the Indenture;

2.8.3   payment in full of all obligations under the Indenture; or

2.8.4   an increase made exclusively in cash, in one or more transactions following the consummation of the Flora Transaction, in the Company’s total share capital and additional paid-in capital in an aggregate amount not less than the reduction of the total shareholders’ equity of the Company as a direct result of the Flora Transaction immediately following consummation thereof, but only to the extent that JBS receives written confirmation that the rating of the Notes by both the Rating Agencies in effect immediately prior to the release of the Flora Guarantee will not be downgraded as a result of such release.

Upon delivery by the Company to the Trustee of an Officer’s Certificate to the foregoing effect, the Trustee will execute any documents reasonably requested by the Company in writing in order to evidence the release of Flora from its obligations under the Flora Guarantee.

3 Covenants of Flora

3.1 For purposes of this Section 3.1, until the occurrence of the Flora Release Date, (1) each of the references to the “Company” set forth in the following sections of the Indenture shall refer to, and apply with respect to, both the Company and Flora, including in respect of defined terms used in the following sections (and solely for purposes of the following sections), (2) each of the references to “Subsidiary” set forth in the following sections of the Indenture shall refer to, and apply with respect to, Subsidiaries of each of the Company and Flora, including in respect of defined terms used in the following sections (and solely for purposes of the following sections), and (3) the audited annual consolidated financial statements and unaudited quarterly financial statements required to be delivered hereunder by the Company shall be combined consolidated financial statements of the Company and Flora, and each of their respective Subsidiaries:

• Section 4.3 (“Existence”);

• Section 4.4 (“Compliance with Laws”);

• Section 4.5 (“Maintenance of Books and Records”);

• Section 4.6 (“Payment of Taxes and other Claims”);

• Section 4.7 (“Maintenance of Properties and Insurance”);

• Section 4.8 (“Limitation on Debt”);

• Section 4.9 (“Limitation on Restricted Payments”);

• Section 4.10 (“Limitation on Liens”);

• Section 4.11 (“Limitation on Sale and Leaseback Transactions”);

• Section 4.12 (“Limitation on Dividend and other Payment Restrictions Affecting Subsidiaries”);

• Section 4.13 (“Repurchase of Notes Upon a Change of Control”);

• Section 4.14 (“Limitation on Asset Sales”);

• Section 4.15 (“Guarantees by Significant Subsidiaries”);

• Section 4.16 (“Limitation on Transactions with Affiliates”);

• Section 4.17 (“Line of Business”);

• Section 4.18 (“Financial Reports”);

• Section 4.19 (“Reports to Trustee”);

• Section 4.22 (“Provision of Information”); and

• Section 4.23 (“Covenant Suspension”).

3.2 Ranking

Flora will ensure that its obligations under the Indenture, the Notes and the Flora Guarantee will at all times constitute direct and unconditional obligations of Flora, ranking at all times at least pari passu in priority of payment, in right of security and in all other respects among themselves and with all other Debt of Flora, except to the extent any such other Debt of Flora ranks above such obligations by reason of Liens permitted under Section 4.10 of the Indenture.

4 Consolidation, Merger or Sale of Assets

4.1 Until the occurrence of the Flora Release Date, Flora will not consolidate with or merge into, or convey, transfer or lease all or substantially all of its assets to, any Person unless:

(i) the resulting, surviving or transferee Person (if not Flora) will be a Person organized and existing under the laws of the Federative Republic of Brazil or any political subdivision thereof or any country that is a member of the Organization for Economic Co-operation and Development (OECD), and such Person will expressly assume, by a supplement to the Indenture, executed and delivered to the Trustee, all of the obligations of Flora under the Flora Guarantee and the Indenture;

(ii) immediately after giving effect to the transaction (and treating any Debt that becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been Incurred by such Person at the time of such transaction), no Default will have occurred and be continuing;

(iii) immediately after giving effect to such transaction, the resulting, surviving or transferee Person would be able to Incur at least U.S.$1.00 of Debt under the Net Debt to EBITDA Ratio test set forth in Section 4.8.1 of the Indenture, as modified by Section 3 above; and

(iv) Flora will have delivered to the Trustee a Flora Officer’s Certificate and an independent Flora Opinion of Counsel of recognized standing, each stating that such consolidation, merger or transfer and such supplement to the Indenture (if any) comply with the Notes and the Indenture;

The Trustee will accept such certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set forth in clause (iii) above, in which event it will be conclusive and binding on the Holders.

5 JBS Finance Obligations

JBS Finance, by its execution of this Supplemental Indenture, agrees to be a co-issuer under the Indenture and to be bound by the terms of this Supplemental Indenture pursuant to the following provisions:

5.1 JBS Finance Obligations

JBS Finance hereby irrevocably and unconditionally agrees to be jointly and severally liable, together with the Company on an unsecured basis, for the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under the Indenture (collectively, the “JBS Finance Obligations”).

5.2 JBS Finance Obligations Unconditional

The JBS Finance obligations are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

5.2.1   any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Note, by operation of law or otherwise;

5.2.2   any modification or amendment of or supplement to the Indenture or any Note;

5.2.3   any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture or any Note;

5.2.4   the existence of any claim, set-off or other rights which JBS Finance may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions; provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

5.2.5   any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

5.2.6   any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to JBS Finance’s obligations hereunder.

5.3 Waiver

JBS Finance irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

5.4 Stay of Acceleration

If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by JBS Finance hereunder forthwith on demand by the Trustee or the Holders.

6. Limitation and Restrictions on Activities of JBS Finance

6.1 JBS Finance shall not engage in any business or enterprise or enter into any transaction or agreement other than in connection with (i) the issuance, sale, redemption or repurchase of the Notes, Additional Notes, if any, and activities incidentally related thereto, (ii) the entering into Hedging Agreements (with the exception of options or futures contracts or other similar agreements or arrangements) directly related to payments on the Notes, and (iii) import and export financing transactions; provided that nothing herein shall prevent JBS Finance from engaging in any business or enterprise or entering into any transaction or agreement as required by law.

6.2 JBS Finance shall not acquire or own any Subsidiaries, substituting JBS Finance for the Company in the definition of Subsidiary, or other assets or properties (either real or personal), except for (i) an interest in the Hedging Agreements (with the exception of options or futures contracts or other similar agreements or arrangements) directly related to payments on the Notes and instruments evidencing the interests in the foregoing, (ii) cash, cash equivalents or marketable securities, (iii) any assets related to import and export financing transactions, and (iv) the Notes.

6.3 JBS Finance shall not create, incur, assume or suffer to exist any Debt other than any Debt (i) incurred solely or the purpose of complying with its obligations under the Notes, (ii) the issuance of Additional Notes, if any, and (iii) in respect of Hedging Agreements (with the exception of options or futures contracts or other similar agreements or arrangements) directly related to payments on the Notes.

6.4 JBS Finance shall not create, assume, incur or suffer to exist any Lien upon or with respect to any of its properties or assets, except for any Liens imposed by law.

6.5 JBS Finance shall not enter into any consolidation, merger, amalgamation, joint venture or other form of combination with any Person, and shall not sell, lease, convey or otherwise dispose of any of its assets or receivables.

6.6 JBS Finance shall not amend, supplement, waive or modify, or consent to any amendment, supplement, waiver or modification of its Organizational Documents except in accordance with the provisions of this Section 6.6. Any provision of any Organizational Document may be amended, waived, supplemented, restated, discharged or terminated without the consent of the Holders; provided that such amendment, waiver, supplement or restatement does not result in a Default or Event of Default; and provided, further, that the Trustee shall have received prior notice thereof together with copies of any documentation related thereto. Any amendment, waiver, supplement or restatement of any Organizational Document (including any exhibit thereto) that would result in a Default or Event of Default shall require the written consent of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes).

7 Events of Default

For purposes of this Section 7, (1) each reference to “Company” set forth in Article 6 of the Indenture shall refer to, and apply with respect to, (i) Flora and (ii) JBS Finance, by substituting each of the Company, Flora and JBS Finance for the Company, including in respect of defined terms used in Article 6 of the Indenture (and solely for purposes of Article 6 of the Indenture), and (2) each reference to “Notes” set forth in Sections 6.1.10 and 6.1.12 of the Indenture shall also refer to, and apply with respect to, the Flora Guarantee with respect to Flora.

8 Obligations of the Company and Flora in Remitting Funds from Brazil

Each of the Company and Flora agrees to remit any funds payable by it under the Notes from Brazil solely in accordance with applicable Central Bank authorizations and regulations.

9 Operative Date

Notwithstanding an earlier execution date, Sections 2, 3, 4 and 7 (as to Flora) of this Supplemental Indenture shall not become operative until such time as the Flora Transaction has been consummated and all conditions precedent have been satisfied (or waived), including payment of the consent fees due in respect of this Supplemental Indenture.

10 Governing Law; Submission to Jurisdiction; Agent for Service

This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York. By its execution and delivery of this Supplemental Indenture, each of Flora and JBS Finance (i) acknowledges that it hereby designates and appoints National Corporate Research, Ltd., currently located at 225 West 34th Street, Suite 910, New York, NY 10122, as its authorized agent upon which process may be served in any suit, action or proceeding with respect to, arising out of, or relating to, this Supplemental Indenture, the Flora Guarantee (as to Flora) or the JBS Finance Obligations (as to JBS Finance), that may be instituted in any Federal or state court in the State of New York, The City of New York, the Borough of Manhattan, or brought under Federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder), and acknowledges that National Corporate Research, Ltd. has accepted such designation, (ii) submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) agrees that service of process upon National Corporate Research, Ltd. shall be deemed in every respect effective service of process upon Flora and JBS Finance, as the case may be, in any such suit, action or proceeding.

11 Notices

Any notice or communication to JBS Finance or Flora will be deemed given if given to the Company.

12 Miscellaneous

12.1   This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

12.2   This Supplemental Indenture is an amendment supplemental to the Indenture, and the Indenture and this Supplemental Indenture will henceforth be read together.

12.3   The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Company, JBS Finance and Flora.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

In witness whereof, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

JBS S.A.

as Issuer

By:

Name:

Title:

JBS FINANCE LTD.

as Co-Issuer

By:

Name:

Title:

By:

Name:

Title:

FLORA PRODUTOS DE HIGIENE E LIMPEZA LTDA.

as Guarantor

By:

Name:

Title:

[Signature Page to First Supplemental Indenture]

THE BANK OF NEW YORK

as Trustee

By:

Name:

Title:

[Signature Page to First Supplemental Indenture]

EX-10.1.4

Exhibit 10.1.4

EXECUTION COPY

SECOND SUPPLEMENTAL INDENTURE

dated as of September 6, 2007

among

JBS S.A.,

as Co-Issuer,

JBS Finance Ltd.,

as Co-Issuer

Swift & Company,

as Guarantor,

and

THE BANK OF NEW YORK,

as Trustee

SUPPLEMENTAL INDENTURE

U.S.$300,000,000 10.50% Senior Notes due 2016

This Second Supplemental Indenture (this “Supplemental Indenture”), entered into as of September 6, 2007, among JBS S.A., a corporation (sociedade anônima) incorporated under the laws of the Federative Republic of Brazil (the “Company”), JBS Finance Ltd., a limited liability company incorporated under the laws of the Cayman Islands (“JBS Finance”), Swift Foods Company (the “Undersigned”) and THE BANK OF NEW YORK, a New York banking corporation (the “Trustee”).

Recitals:

Whereas, the Company and the Trustee entered into the Indenture, dated as of August 4, 2006 (the “Indenture”), relating to the Company’s U.S.$300,000,000 principal amount of 10.50 percent Senior Notes due 2016 (the “Notes”).

Whereas, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Company agreed pursuant to the Indenture to cause any newly acquired or created Significant Subsidiaries to provide a guarantee pursuant to clause 2 of this Supplemental Indenture in certain circumstances.

Agreement:

Now, therefore, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

1 Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

2 The Undersigned, by its execution of this Supplemental Indenture, agrees to be a guarantor under the Indenture and to be bound by the terms of this Supplemental Indenture pursuant to the following provisions (the “Guarantor”):

2.1 The Guarantee

Subject to the provisions of this clause 2, the Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally with all current and subsequent Guarantors, if any, on an unsecured basis, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company or JBS Finance under the Indenture. Upon failure by the Company to pay punctually any such amount, the Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Indenture.

2.2 Guarantee Unconditional

The obligations of the Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

2.2.1 any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Note, by operation of law or otherwise;

2.2.2 any modification or amendment of or supplement to the Indenture or any Note;

2.2.3 any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture or any Note;

2.2.4 the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions; PROVIDED that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

2.2.5 any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

2.2.6 any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.

2.3 Discharge; Reinstatement

The Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

2.4 Waiver by the Guarantor

The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

2.5 Subrogation and Contribution

Upon making any payment with respect to any obligation of the Company under this clause 2, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation; PROVIDED that the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other Guarantor, if any, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

2.6 Stay of Acceleration

If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by the Guarantor hereunder forthwith on demand by the Trustee or the Holders.

2.7 Limitation on Amount of Guarantee

Notwithstanding anything to the contrary in this clause 2, the Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the guarantee of the Guarantor not constitute a fraudulent conveyance under applicable fraudulent conveyance

provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantor hereby irrevocably agree that the obligations of the Guarantor under its guarantee hereunder are limited to the maximum amount that would not render the Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law.

The Trustee, the Holders and the Guarantor further hereby irrevocably agree that the obligations of the Guarantor under its guarantee hereunder are limited to the maximum amount that would not result in a breach or violation by the Guarantor of any agreement to which the Guarantor is a party and entered into prior to the date that the Guarantor constituted a Significant Subsidiary.

2.8 Execution and Delivery of Guarantee

The execution by the Guarantor of this Supplemental Indenture evidences the guarantee of the Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Note. The delivery of any Note by the Trustee after authentication constitutes due delivery of the guarantee set forth in this clause 2 on behalf of the Guarantor.

2.9 Release of Guarantee

The guarantee of a Guarantor will terminate upon:

2.9.1 a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Subsidiary) otherwise permitted by the Indenture;

2.9.2 if the guarantee was required pursuant to the terms of the Indenture, the cessation of the circumstances requiring the guarantee; or

2.9.3 defeasance or discharge of the Notes, as provided in Section 8 of the Indenture.

Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the foregoing effect, the Trustee will execute any documents reasonably requested by the Company in writing in order to evidence the release of the Guarantor from its obligations under its guarantee.

3 This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

4 This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

5 This Supplemental Indenture is an amendment supplemental to the Indenture, and the Indenture and this Supplemental Indenture will henceforth be read together.

6 The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for in respect of the recitals contained herein, all of which are made solely by the Company, JBS Finance and the Undersigned.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

EXECUTION COPY

In witness whereof, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

JBS S.A.

as Co-Issuer

By:

Name:

Title:

JBS Finance Ltd.

as Co-Issuer

By:

Name:

Title:

Swift Foods Company

as Guarantor

By:

Name:

Title:

By:

Name:

Title:

THE BANK OF NEW YORK

as Trustee

By:

Name:

Title:

[Signature Page to Second Supplemental Indenture]

EX-10.1.5

Exhibit 10.1.5

EXECUTION VERSION

THIRD SUPPLEMENTAL INDENTURE

dated as of August 14, 2008

among

JBS S.A.,

as Issuer,

JBS FINANCE LTD.,

as Co-Issuer,

and

THE BANK OF NEW YORK MELLON,

as Trustee

SUPPLEMENTAL INDENTURE

U.S.$300,000,000 10.50% Senior Notes Due 2016

This Third Supplemental Indenture (this “Supplemental Indenture”), entered into as of August 14, 2008, among JBS S.A., a corporation (sociedade anônima) incorporated under the laws of the Federative Republic of Brazil (the “Company”), JBS FINANCE LTD., a limited liability company incorporated under the laws of the Cayman Islands (“JBS Finance,” and together with the Company, the “Issuers”), and THE BANK OF NEW YORK MELLON, a New York Banking Corporation (the “Trustee”).

RECITALS:

WHEREAS, the Issuers and the Trustee are party to that certain Indenture, dated as of August 4, 2006 (the “Indenture”), relating to the Issuers’ U.S.$300,000,000 principal amount of 10.50 percent Senior Notes due 2016 (the “Notes”);

WHEREAS, pursuant to the Solicitation Statement dated July 31, 2008, as amended or supplemented (the “Solicitation Statement”), the Company has solicited consents from the holders of the Notes to amend the Indenture as set forth herein;

WHEREAS, the Company has received consents from the holders of the requisite amount of Notes in order to amend the Indenture as set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

I. AMENDMENTS

1. Amendments to Section 1.1 of the Indenture

A. Section 1.1 of the Indenture is amended to replace the following definitions in their entirety with the following:

“Change of Control” means the Permitted Holders, directly or indirectly, cease to have the power to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by contract or otherwise.

“Net Debt to EBITDA Ratio” means, at any time, the ratio of:

(a) Net Debt at that time to;

(b) EBITDA for the then most recently concluded period of four consecutive fiscal quarters for which financial statements are publicly available (the “Reference Period”);

provided, however, that in making the foregoing calculation:

(i) pro forma effect will be given to any Debt Incurred during or after the Reference Period to the extent the Debt is outstanding or is to be Incurred on the transaction date as if the Debt had been Incurred on the first day of the Reference Period; and

(ii) pro forma effect will be given to:

(a) the acquisition or disposition of companies, divisions or lines of businesses by the Company and its Subsidiaries, including any acquisition or disposition of a company, division or line of business during or after the Reference Period by a Person that became a Subsidiary during or after the Reference Period; and

(b) the discontinuation of any discontinued operations;

in each case, that have occurred during or after the Reference Period as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of the Reference Period.

“Permitted Holders” means (1) any member of the Batista Family or any Affiliate or Affiliates of any of the foregoing and (2) any Person the voting stock of which (or in the case of a trust, the beneficial interests in which), are owned at least 51% by Persons specified in clause (1).

“Permitted Liens” means

(a) any Lien existing on the Supplemental Indenture Date;

(b) Liens securing the Notes;

(c) Liens incurred in the ordinary course of business not securing Debt and not in the aggregate materially detracting from the value of the properties or their use in the operation of the business of the Company and its Subsidiaries;

(d) Liens on property or assets (including Capital Stock) of any Person that secure Debt incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of such property or asset and which attach within 365 days after the date of such purchase or the completion of construction or improvement;

(e) Liens on property or assets of a Person at the time such Person becomes a Subsidiary of the Company, provided that such Liens were not created in contemplation thereof and do not extend to any other property of the Company or any of its Subsidiaries;

(f) Liens on property or assets at the time the Company or any of its Subsidiaries acquires such property or assets, including any acquisition by means of a merger or consolidation with or into the Company or any of its Subsidiaries, provided that such Liens were not created in contemplation thereof;

(g) any Lien imposed by law that was incurred in the ordinary course of business, including, without limitation, carriers’, warehousemen’s and mechanics’ liens and other similar encumbrances arising in the ordinary course of business, in each case for sums not yet due or being contested in good faith by appropriate proceedings;

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(h) any pledge or deposit made in connection with workers’ compensation, unemployment insurance or other similar social security legislation, any deposit to secure appeal bonds in proceedings being contested in good faith to which the Company or any Subsidiary is a party, good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Subsidiary is a party or deposits for the payment of rent, in each case made in the ordinary course of business;

(i) any Lien in favor of issuers of surety or performance bonds or letters of credit issued pursuant to the request of and for the account of the Company or any Subsidiary in the ordinary course of business;

(j) any Lien securing taxes, assessments and other governmental charges, the payment of which are not yet due or are being contested in good faith by appropriate proceedings and for which such reserves or other appropriate provisions, if any, have been established as required by GAAP;

(k) defects, easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, licenses, restrictions on the use of property or assets or imperfections in title that do not materially impair the value or use of the property or assets affected thereby, and any leases and subleases of real property that do not interfere with the ordinary conduct of the business of the Company or any Subsidiary, and which are made on customary and usual terms applicable to similar properties;

(1) any rights of set-off of any Person with respect to any deposit account of the Company or any Subsidiary arising in the ordinary course of business;

(m) Liens granted to secure borrowing from (i) Banco Nacional de Desenvolvimento Economico e Social—BNDES or any other Brazilian governmental development bank or credit agency, or (ii) any international or multilateral development bank, government-sponsored agency, export-import bank or official export-import credit insurer;

(n) any Liens on the inventory and receivables of the Company or any Subsidiary (and all intangibles related thereto and proceeds thereof), securing the obligations of such Person under any credit facility or in connection with any structured export or import financing or other trade transaction; provided that the aggregate principal amount of Debt incurred that is secured by receivables that shall fall due in any calendar year shall not exceed (i) with respect to transactions secured by receivables from export sales, 80% of the Company’s consolidated gross revenues from export sales for the 12-month period ending on the last day of the Company’s most recently completed fiscal quarter or (ii) with respect to transactions secured by receivables from non-export sales, 80% of such Person’s consolidated gross revenues from non-export sales for the 12-month period ending on the last day of the Company’s most recently completed fiscal quarter; and provided, further, that Advance Transactions shall not be deemed transactions secured by receivables for purpose of the above calculation;

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(o) any Lien securing Hedging Agreements so long as such Hedging Agreements are entered into for bona fide, non-speculative purposes;

(p) extensions, renewals or replacements of any Liens referred to in clauses (a), (b), (d), (e) or (f) in connection with the refinancing of the obligations secured thereby, provided that the amount secured by such Lien is not increased; and

(q) other Liens securing obligations in an aggregate amount not to exceed 20% of Consolidated Net Tangible Assets.

For purposes of determining compliance with the Limitation on Lien covenant: (i) in the event that a Permitted Lien meets the criteria of more than one of the types of Permitted Liens described above, including the first paragraph of the covenant, the Company, in its sole discretion, may classify, and from time to time may reclassify, such item of Permitted Lien, in any manner that complies with this covenant; and (ii) a Permitted Lien permitted by the covenant (including the first paragraph of the covenant), need not be permitted solely by reference to one provision permitting such Permitted Lien but may be permitted in part by one such provision and in part by one or more other provisions of the covenant permitting such Permitted Lien.

B. Section 1.1 of the Indenture is amended to add the following definitions:

“Advance Transaction” means an advance from a financial institution involving either (a) a foreign exchange contract (ACC — Adiantamento sobre Contrato de Câmbio) or (b) an export contract (ACE — Adiantamento sobre Contrato de Exportação).

“Capital Lease” means, with respect to any Person, any lease of any property which, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

“Existing Rating” means (i) B+ for Standard & Poor, (ii) Bl for Moody’s and (iii) B+ for Fitch, representing the equivalent rating from Fitch.

“Fitch” means Fitch Ratings, Ltd. and its successors.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Rating Agency” means (i) S&P and (ii) Moody’s; provided that the Company may substitute S&P or Moody’s at any time with Fitch.

“Ratings Decline” means that any time within 90 days (which period shall be extended so long as the rating of the Company is under publicly announced consideration for possible downgrade by any Rating Agency) after the date of a public notice of a Change of Control,

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or of the Company’s intention or that of any Person to effect a Change of Control, the then-applicable rating of the Company is decreased by any Rating Agency by one or more categories; provided that any such Rating Decline is in whole or in part in connection with a Change of Control.

“S&P” means Standard & Poor’s Ratings Group and its successors.

“Substantially Wholly-Owned” means, with respect to any Subsidiary, a Subsidiary of at least 90% of the outstanding Capital Stock of which (other than director’s qualifying shares) is owned by the Company or one or more Wholly Owned Subsidiaries (or a combination thereof) of the Company.

“Supplemental Indenture Date” shall mean the date on which the supplemental indenture relating to the Notes and the Indenture is effective.

“Wholly Owned” means, with respect to any Subsidiary, a Subsidiary all of the outstanding Capital Stock of which (other than any director’s qualifying shares) is owned by the Company and one or more Wholly Owned Subsidiaries (or a combination thereof).

2. Amendment to Section 4.1 of the Indenture

Section 4.1 of the Indenture is amended by adding the following clause 4.1.5:

4.1.5  In the event that the Existing Rating of the Company is decreased by one or more categories by either Rating Agency, the Company agrees to pay, beginning on the Interest Payment Date immediately following any such rating decline, additional interest on the Notes at the rate of 0.25% per annum in excess of the rate per annum then borne by the Notes for each international rating category applicable to the Company that is decreased by either such Rating Agency; provided, however, that, at any time the international rating of the Company by a Rating Agency that had previously downgraded the Company is increased by such Rating Agency by one or more categories following any such rating decline, then the interest on the Notes will, beginning on the Interest Payment Date immediately following such increase in rating, decrease at the rate of 0.25% per annum for each international rating category applicable to the Company that is increased by such Rating Agency (not to exceed the applicable Existing Rating of the Company). The Company will provide written notice to the Trustee when both the (i) Existing Rating of the Company is decreased or increased and (ii) interest on the Notes is increased or decreased.

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3. Amendment to 4.8 of the Indenture

Section 4.8 of the Indenture is amended to replace Section 4.8 in its entirety with the following:

4.8. Limitation on Debt. 4.8.1 The Company will not, and will not permit any Subsidiary to, Incur, directly or indirectly, any Debt unless the pro forma Net Debt to EBITDA Ratio at the date of such Incurrence at any time commencing on the Supplemental Indenture Date is less than 4.75 to 1.0.

4.8.2 Notwithstanding the preceding paragraph, the Company or any Subsidiary may issue the following Debt (“Permitted Debt”):

(i) the Notes and the guarantee;

(ii) Debt outstanding on the Supplemental Indenture Date;

(iii) Debt (“Permitted Refinancing Debt”), the proceeds of which are used to refinance any Debt permitted by clause (i) or (ii) above or permitted by the first paragraph above; provided, however, that (a) the principal amount of the Debt so issued does not exceed the principal amount of the Debt so refinanced and (b) the Debt so issued (i) does not mature prior to the stated maturity of the Debt so refinanced and (ii) is subordinated on a pari passu basis to the extent that the Debt being refinanced is so subordinated;

(iv) Debt owed to and held by a: (i) Wholly Owned Subsidiary or a Substantially Wholly Owned Subsidiary; and (ii) Subsidiary to the extent that such Debt is subordinated to the prior payment of all obligations with respect to the Notes and the guarantee;

(v) Debt of a Subsidiary owed to or held by the Company;

(vi) Debt of the Company or any Subsidiary pursuant to (a) interest rate swap or similar agreements designed to protect the Company or such Subsidiary against fluctuations in interest rates or interest rate indices in respect of Debt of the Company or such Subsidiary to the extent the notional principal amount of such obligation does not exceed the aggregate principal amount of the Debt to which such interest rate contracts relate and (b) foreign exchange or commodity hedge, exchange or similar agreements designed to protect the Company or such Subsidiary against fluctuations in foreign currency exchange rates or commodity prices in respect of foreign exchange or commodity exposures incurred by the Company or such Subsidiary:

(vii) Acquired Debt, provided that after giving effect to the incurrence thereof, the Company could incur at least U.S.$1.00 of Debt under the Net Debt to EBITDA Ratio test set forth in the first paragraph of this covenant;

(viii) Debt of the Company or any Subsidiary, which may include Capital Leases, incurred on or after the issue date no later than 365 days after the date of purchase or completion of construction or improvement of property (including Capital Stock) for the purpose of financing all or any part of the purchase price or cost of construction or improvement, provided that the principal amount of any Debt incurred pursuant to this clause may not, prior to March 1, 2011, exceed U.S.$30.0 million (or the equivalent thereof at the time of determination) and, on or after March 1, 2011, exceed U.S.$60.0 million (or the equivalent thereof at the time of determination);

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(ix) Debt of the Company or any Subsidiary incurred to pay all or a portion of the purchase price of the acquisition or lease of equipment, vehicles and services used in the ordinary course of the business of the Company or its Subsidiaries; provided that such Debt is incurred within 360 days prior to or after any such acquisition (or addition, improvement or construction);

(x) Debt of the Company or any Subsidiary consisting of guarantees of Debt of the Company or any Subsidiary Incurred under any other clause of this covenant;

(xi) Debt of the Company or any of its Subsidiaries to the extent the net proceeds thereof are promptly used to purchase notes in connection with a tender offer effected by the Company or an Affiliate of the Company or deposited to defease or discharge the notes, in each case, in accordance with the indenture;

(xii) All obligations of the Company or any Subsidiary for the reimbursement of any obligor on any letter of credit, banker’s acceptance, surety bond or similar credit transaction; provided that if at any time after the issuance of such letter of credit, surety bond or other similar credit transaction there is a drawing thereunder, such drawing must, as of the date thereof, then otherwise be permitted pursuant to this covenant; and

(xiii) Debt of the Company and/or its Subsidiaries incurred on or after the date on which the Notes were originally issued not otherwise permitted in an aggregate principal amount at any time outstanding not to exceed the greater of (i) U.S.$50.0 million (or the equivalent amount thereof at the time of determination) or (ii) 25% of EBITDA for the then most recently concluded period of four consecutive fiscal quarters for which financial statements are publicly available.

For purposes of determining compliance with this covenant: (i) in the event that an item of Debt meets the criteria of more than one of the types of Debt described above, including the first paragraph above, the Company, in its sole discretion, may classify, and from time to time may reclassify, such item of Debt, in any manner that complies with this covenant; and (ii) Debt permitted by this covenant (including the first paragraph above), need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Debt.

For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Debt, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate determined on the date of incurrence, in the case of term Debt, or first committed, in the case of revolving credit Debt. Notwithstanding any other provision of this covenant, neither the Company nor any Subsidiary shall, with respect to any outstanding Debt incurred, be deemed to be in violation of this covenant solely as a result of fluctuations in the exchange rates of currencies.

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With respect to any holder of Debt of the Company or any of its Subsidiaries, such holder of Debt (or its assignee) shall not be deemed to have provided such Debt to the Company or any such Subsidiary in violation of this Indenture if such holder of such Debt or its agent or representative (a) had no actual knowledge at the time of the incurrence of such Debt that such incurrence violated this Indenture and (b) shall have received an officer’s certificate to the effect that the incurrence of such Debt does not violate the provisions of this Indenture.

In connection with an acquisition or disposition of a company, division or line of business (an “Acquired Entity”) for which audited or reviewed financial statements are not available, EBITDA for such Acquired Entity shall be calculated in good faith by the Company based upon management reports or other similar information (“Initial EBITDA”). Notwithstanding any other provision of this covenant, neither the Company nor any Subsidiary shall, with respect to any Debt Incurred pursuant to this Initial EBITDA calculation (the “New Debt”), be deemed to be in violation of Section 4.08; provided however that the Company shall be required by the date that is 90 days following the consummation of the acquisition of the Acquired Entity to recalculate EBITDA, for the period of four consecutive fiscal quarters for which financial statements of the Company are publicly available (or a period most closely coinciding with such period to the extent that the fiscal year of the Acquired Entity does not correspond to the fiscal year of the Company, using financial statements of the Acquired Entity that have been audited or subjected to a limited reviewed (“Recalculated EBITDA”). If (1) the Recalculated EBITDA is less than the Initial EBITDA and (2) as a result, the Company or any Subsidiary Incurred New Debt that exceeded (by an amount in excess of U.S.$15.0 million) what it would have been permitted to Incur using Recalculated EBITDA, then the Company or any Subsidiary within 90 days thereafter shall be required to repay such amount of New Debt that would ensure that it would have been in compliance with Section 4.8 had it used Recalculated EBITDA to determine the amount of Debt it was permitted to Incur thereunder.

4. Amendment to Section 4.12 of the Indenture

Section 4.12 of the Indenture is amended to replace Section 4.12 in its entirety with the following:

4.12. Limitation on Dividend and other Payment Restrictions Affecting Subsidiaries.

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4.12.1 The Company will not, and will not permit any Subsidiary to, create or otherwise cause or permit to exist or become effective any encumbrance or restriction of any kind on the ability of any Subsidiary to:

(i) pay cash dividends or make any other cash distributions on any Equity Interests of the Subsidiary owned by the Company or any other Subsidiary;

(ii) pay in cash any Debt or other obligation owed to the Company or any other Subsidiary; or

(iii) make loans or advances to the Company or any other Subsidiary.

4.12.2 The provisions of clause 4.12.1 do not apply to any encumbrances or restrictions:

(i) existing on the Supplemental Indenture Date as provided for in the Indenture or any other agreements in effect on the Supplemental Indenture Date, and any extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

(ii) existing under or by reason of applicable law;

(iii) existing with respect to any Person, or to the Property of any Person, at the time the Person is acquired by the Company or any Subsidiary,

which encumbrances or restrictions: (i) are not applicable to any other Person or the Property of any other Person; and (ii) were not put in place in anticipation of such event, and any extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

(iv) of the type described in clause 4.12.1(iv) arising or agreed to in the ordinary course of business: (a) that restrict in a customary manner the subletting, assignment or transfer of any Property that is subject to a lease or license or (b) by virtue of any Lien on, or agreement to transfer, option or similar right with respect to any Property of, the Company or any Subsidiary;

(v) with respect to a Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or Property of, the Subsidiary that is permitted by clause 4.14;

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(vi) with respect to a Subsidiary and imposed pursuant to a customary provision in a joint venture or other similar agreement with respect to such Subsidiary that was entered into in the ordinary course of business;

(vii)  imposed by the standard loan documentation in connection with loans from Banco Nacional de Desenvolvimento Econômico e Social — BNDES (the Brazilian National Development Bank) to any Subsidiary, or loans from the International Finance Corporation, the Inter-American Development Bank or any other governmental or multi-lateral agency to any Subsidiary other than a Significant Subsidiary;

(viii)  required pursuant to the Indenture; or

(ix)  with respect to a limitation imposed pursuant to a provision in a credit agreement or any other agreement to which a Subsidiary is party that limits such Subsidiary’s ability to pay more than 50% of the aggregate amount of its net income accrued on a cumulative basis during the period, taken as one accounting period, beginning on the Supplemental Indenture Date and ending on the last day of such Subsidiary’s most recently completed fiscal quarter as dividends or any other distributions on its Equity Interests.

5. Amendments to Section 4.13 of the Indenture

Section 4.13 of the Indenture is amended to replace Section 4.13 in its entirety with the following:

4.13. Repurchase of Notes Upon a Change of Control. Not later than 30 days following a Change of Control that results in a Ratings Decline, the Company will make an Offer to Purchase all outstanding Notes at a purchase price equal to 101 percent of the principal amount plus accrued interest to the date of purchase.

6. Deletion of Section 4.7 of the Indenture

Section 4.7 entitled “Maintenance of Properties and Insurance” of the Indenture is hereby deleted in its entirety.

7. Amendments to Sections 6.1.5 and 6.1.6 of the Indenture

The cross-default amount and failure to pay the final judgment amount in the events of default set forth in Sections 6.1.5 and 6.1.6 of the Indenture are hereby amended from U.S.$10.0 million to U.S.$30.0 million.

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II. MISCELLANEOUS

8. Effective Date; Operative Date

This Supplemental Indenture shall become effective upon execution and delivery by the parties hereto; provided, however, that none of the provisions hereof shall become operative until the Company shall have paid, as set forth in the Solicitation Statement, all consent fees to the holders of Notes that have validly consented, pursuant to Solicitation Statement and related Consent Letter, to the amendments effected by this Supplemental Indenture.

9. Governing Law

This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

10. Miscellaneous

10.1  This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

10.2  This Supplemental Indenture is an amendment supplemental to the Indenture, and the Indenture and this Supplemental Indenture will henceforth be read together.

10.3  Except as amended by this Supplemental Indenture, the Indenture and the Notes are in all respects ratified and confirmed and all the terms shall remain in full force and effect.

11. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Issuers.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

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In witness whereof, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above:

In witness whereof, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.

EX-15

Exhibit 15

July 22, 2009

Securities and Exchange Commission

100 F Street N.E.

Washington, D.C. 20549

We are aware that JBS USA Holdings, Inc. has included in the Prospectus constituting a part of this Registration Statement our report dated July 17, 2009, relating to the unaudited interim consolidated financial statements of the Company. Pursuant to Regulation C under the Securities Act of 1933, that report is not considered a part of the registration statement prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act.

/s/ BDO Seidman, LLP

Dallas, Texas

EX-21

Exhibit 21

List of subsidiaries of the registrant

Name	Jurisdiction of organization
JBS USA, LLC	Delaware
JBS USA Finance, Inc.	Delaware
Kabushiki Kaisha SAC Japan	Japan
Swift Beef Company	Delaware
Swift Brands Company	Delaware
JBS Packerland, Inc.	Delaware
S&C Resale Company	Delaware
Swift Pork Company	Delaware
JBS US Holding LLC	Delaware
Swift Refrigerated Foods, S.A. de C.V.	Mexico
JBS Holdco Australia P.L	Australia
JBS Southern Holdco P/L	Australia
Swift & Company International Sales Corporation	Colorado
Miller Bros. Co, Inc.	Utah
JBS Trading International, Inc.	Colorado
Cattle Production System, Inc.	Delaware
JBS Souderton, Inc.	Pennsylvania
JBS Green Bay, Inc.	Delaware
MF Cattle Feeding, Inc.	Colorado
Calf Source, LLC	Wisconsin
Skippack Creek Corporation	Delaware
Five Star Cattle Systems, LLC	Colorado
JBS Five Rivers Cattle Feeding, LLC	Delaware
Moyer Distribution, LLC	Delaware
MOPAC of Virgina, Inc.	Virginia
Mountain View Rendering Company, LLC	Virginia
Northern Colorado Feed, LLC	Colorado
Packerland Distribution, LLC	Delaware
JBS Plainwell, Inc.	Delaware
Packerland Transport, Inc.	Delaware
JBS Tolleson, Inc.	Arizona
S&C Australia Holdco Pty Ltd.	Australia
ZM Australia P/L	Australia
Swift Australia P/L	Australia
Burcher Pty. Limited	Australia
JBS Southern Australia P/L	Australia
Swift Australia (Southern) P/L	Australia
Industry Park Pty Ltd	Australia
Baybrick Pty Ltd.	Australia

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

JBS USA Holdings, Inc.

Greeley, Colorado

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated July 21, 2009, relating to our audit of the consolidated financial statements of JBS USA Holdings, Inc. which is contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO Seidman, LLP

Dallas, Texas

July 22, 2009

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We have issued our report dated July 1, 2009, with respect to the consolidated financial statements of JBS USA Holdings, Inc. and subsidiaries contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

July 22, 2009

EX-23.3

Exhibit 23.3

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 31, 2009, with respect to the consolidated financial statements of Smithfield Beef Group, Inc. included in the Registration Statement (Form S-1) and related Prospectus of JBS USA Holdings, Inc. for the registration of shares of its common stock.

/s/ Ernst & Young LLP

Milwaukee, Wisconsin

July 22, 2009

EX-23.4

Exhibit 23.4

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Registration Statement on Form S-1 of JBS USA Holdings, Inc. of our report dated May 30, 2008, relating to the financial statements of Five Rivers Ranch Cattle Feeding LLC as of and for year ended March 31, 2008, appearing in the prospectus, which is part of this Registration Statement, and to the reference to us as under the heading “Experts” in such prospectus.

/s/ Deloitte & Touche LLP

Denver, Colorado

July 22, 2009