PURCHASE AND AMENDMENT AGREEMENT
This Purchase and Amendment Agreement (this "Agreement") is made and
entered into as of August 3, 2005, by and between Pilgrim's Pride Corporation, a
Delaware corporation (the "Company"), and ConAgra Foods, Inc., a Delaware
corporation (the "Seller").
PRELIMINARY STATEMENTS
A. The Seller owns 15,443,054 shares of the issued and outstanding
common stock, par value $0.01 per share, of the Company (the "Common Stock").
B. Simultaneously herewith the Company is entering into an underwriting
agreement (the "Underwriting Agreement") with one or more underwriters selected
by the Company (the "Underwriter") pursuant to which the Company will issue and
sell to the Underwriter for cash in connection with a firm commitment
underwriting (the "Public Offering") up to 15,443,054 shares of Common Stock
(the closing of such issuance and sale pursuant to the Underwriting Agreement is
hereinafter referred to as the "Closing" and the date of such Closing is
hereinafter referred to as the "Closing Date").
C. The Seller desires to sell and transfer to the Company, and the
Company desires to purchase and redeem from the Seller, 15,443,054 shares of
Common Stock, all on and subject to the terms and conditions set forth in this
Agreement (such sale and purchase being hereinafter referred to as the
"Purchase").
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the parties agree as follows:
ARTICLE I
PURCHASE OF THE COMMON STOCK
1.1 Purchase. On and subject to the terms and conditions of this
Agreement, the Company agrees to purchase and redeem from the Seller, and the
Seller agrees to sell, assign, transfer and convey to the Company, 15,443,054
shares of Common Stock (the "Shares") at a price equal to $31.23735 per Share
(the "Purchase Price").
1.2 Closing.
(a) Subject to satisfaction or waiver of the conditions set forth
herein, the closing of the Purchase shall take place at the offices of Xxxxx &
XxXxxxxx LLP, 2300 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000
on the Closing Date concurrently with or promptly following the Closing (or at
such other time or place as shall be mutually agreed upon by the parties
hereto).
(b) At the closing of the Purchase, the Seller shall deliver to the
Company the certificates representing the Shares, duly endorsed in blank or
accompanied by separate stock powers so endorsed in form and substance
reasonably satisfactory to the Company, free and clear of any and all security
interests, liens, pledges, claims, encumbrances or rights of third parties
whatsoever other than restrictions under the Securities Act of 1933, as amended,
and state securities laws.
(c) Immediately following the Closing and the Company's receipt of
proceeds from the Public Offering, the Company shall deliver to the Seller by
wire transfer in immediately available funds to an account designated in advance
by the Seller (the number for which account shall have been furnished to Company
at least one (1) business day prior to the Closing Date) an aggregate amount
equal to the Purchase Price payable to the Seller, provided, however, if the
timing of the Company's receipt of proceeds from the Public Offering makes it
impractical to wire transfer the Purchase Price to the Seller on the Closing
Date, then the Company shall wire transfer the Purchase Price to Seller promptly
on the next business day following the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Company as follows:
2.1 Authorization of Transaction; Enforceability. The Seller has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Seller. This Agreement constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions.
2.2 Governmental Authorization. No consent, approval, authorization,
order, license, registration or qualification of or with any Governmental
Authority (as defined below) is required for the execution and delivery by the
Seller of this Agreement, the performance by the Seller of its obligations
hereunder and the consummation by the Seller of the transactions contemplated
hereby, except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications which, if not obtained, would not, individually
or in the aggregate, have a material adverse effect on the ability of the Seller
to perform its obligations hereunder or consummate the transactions contemplated
hereby on a timely basis. As used herein, the term "Governmental Authority"
means any agency, bureau, commission, authority, department, official, political
subdivision, tribunal or other instrumentality of any government, whether (a)
regulatory, administrative or otherwise, (b) federal, state or local or (c)
domestic or foreign.
2.3 Noncontravention. The execution and delivery by the Seller of this
Agreement, the performance by the Seller of its obligations hereunder and the
consummation by the Seller of the transactions contemplated hereby will not
conflict with or result in a breach or violation of (a) any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Seller or any of its subsidiaries is a party or by which
the Seller or any of its subsidiaries is bound or to which any of their property
or assets is subject, (b) any applicable law or statute or any order, rule or
regulation of any Governmental Authority having jurisdiction over the Seller or
any of its subsidiaries or any of their respective properties or (c) any
provision of the certificate of incorporation or the bylaws of the Seller.
2.4 Shares. The Seller holds of record and beneficially good and valid
title to the Shares, free and clear of any restrictions on transfer (other than
any restrictions under the Securities Act of 1933, as amended, and state
securities laws), security interests, liens, pledges, claims and other
encumbrances. Neither the Seller nor any of its subsidiaries hold any other
shares of capital stock of the Company other than the Shares.
2.5 Vesting of Title. Upon consummation of the transactions
contemplated by this Agreement and in accordance with the terms hereof, at the
closing of the Purchase, the Company will have good title to the Shares free and
clear of any and all security interests, liens, pledges, claims, encumbrances or
rights of third parties whatsoever.
2.6 Independent Investigation; Other Considerations. The Seller (a) has
the requisite knowledge, sophistication and experience in order to fairly
evaluate a disposition of the Shares, including the risks associated therewith,
and (b) has adequate information and has made its own independent investigation
and evaluation to the extent it deems necessary or appropriate concerning the
business, properties, results of operations and financial condition of Company
and its subsidiaries taken as a whole to make an informed decision regarding the
sale of the Shares pursuant to this Agreement. The Seller understands and
acknowledges that the Company intends to sell its shares of Common Stock in the
Public Offering at a price per share in excess of the Purchase Price received by
the Seller hereunder. Seller acknowledges that: (i) the Company may be, and the
Seller is proceeding on the assumption that the Company is, in possession of
material, non-public information concerning the Company and its direct and
indirect subsidiaries (the "Information") which is not or may not be known to
the Seller and that the Company has not disclosed to the Seller; (ii) the Seller
is voluntarily assuming all risks associated with the Purchase and expressly
warrants and represents (x) other than the representations and warranties
expressly made under this Agreement, the Company has not made, and the Seller
disclaims the existence of or its reliance on, any representation by the Company
concerning it, the Shares or the fairness of the Purchase Price and (y) it is
not relying on any disclosure or non-disclosure made or not made, or the
completeness thereof, in connection with or arising out of the Purchase, and
therefore has no claims against the Company with respect thereto; (iii) if any
such claim may exist, the Seller, recognizing its disclaimer of reliance and the
Company's reliance on such disclaimer as a condition to entering into this
Agreement, covenants and agrees not to assert it against the Company or any of
its officers, directors, stockholders, partners, representatives, agents or
affiliates; and (iv) the Company shall have no liability, and the Seller waives
and releases any such claim that it might have against the Company or its
officers, directors, stockholders, partners, representatives, agents and
affiliates whether under applicable securities law or otherwise, based on the
Company's knowledge, possession or non-disclosure to the Seller of the
Information.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Seller as follows:
3.1 Authorization of Transaction; Enforceability. The Company has full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Company. This Agreement constitutes the valid
and legally binding obligation of the Company, enforceable in accordance with
its terms and conditions.
3.2 Governmental Authorization. No consent, approval, authorization,
order, license, registration or qualification of or with any Governmental
Authority is required for the execution and delivery by Company of this
Agreement, the performance by Company of its obligations hereunder and the
consummation by Company of the transactions contemplated hereby, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act of 1933, as
amended, and the rules and regulations of the Securities and Exchange
Commission, and as may be required under state securities or blue sky laws in
connection with the Public Offering.
3.3 Noncontravention. The execution and delivery by Company of this
Agreement, the performance by Company of its obligations hereunder and the
consummation by Company of the transactions contemplated hereby will not
conflict with or result in a breach or violation of (a) any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of their
property or assets is subject, (b) any applicable law or statute or any order,
rule or regulation of any Governmental Authority having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties, or (c)
any provision of the certificate of incorporation or the bylaws of the Company.
ARTICLE IV
CONDITIONS; TERMINATION
4.1 Conditions to Obligations of the Company. The obligation of the
Company to purchase the Shares hereunder is subject to the satisfaction or
waiver on or before the closing of the Purchase of each of the following
conditions (any one or more of which may be waived in whole or in part by the
Company):
(a) No Governmental Authority having jurisdiction over Seller,
or any of its respective subsidiaries, shall have enacted, issued,
promulgated, enforced or entered any law, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the transactions contemplated
herein illegal or otherwise prohibiting consummation of the
transactions contemplated herein;
(b) The Closing shall have occurred or be concurrently
occurring in accordance with the terms of the Underwriting Agreement
(including the payment to the Company of the proceeds from such sale as
contemplated thereby);
(c) The representations and warranties of the Seller contained
in this Agreement shall be true and correct in all material respects on
and as of the date hereof and on and as of the Closing Date as though
made on and as of such date;
(d) The Seller shall have performed in all material respects
all of its obligations hereunder required to be performed by it on or
before the Closing Date;
(e) The Company shall have received a certificate signed by a
duly authorized officer of the Seller to the effect set forth in
Section 4.1(c) and (d) above;
(f) The Company shall have received a certificate of
non-foreign status from Seller in the format required by Treas. Reg.
1.1445-5(b)(3)(ii)(D)(2) issued pursuant to Section 1445 of the United
States Internal Revenue Code, as amended; and
(g) The Seller shall have delivered a properly completed W-9
to the Company.
4.2 Conditions to Obligations of the Seller. The obligation of the
Seller to sell the Shares hereunder is subject to the satisfaction or waiver on
or before the closing of the Purchase of each of the following conditions (any
one or more of which may be waived in whole or in part by the Seller):
(a) No Governmental Authority having jurisdiction over the
Company, or any of its respective subsidiaries, shall have enacted,
issued, promulgated, enforced or entered any law, decree, injunction or
other order (whether temporary, preliminary or permanent) which is then
in effect and has the effect of making the transactions contemplated
herein illegal or otherwise prohibiting consummation of the
transactions contemplated herein;
(b) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date
as though made on and as of such date;
(c) The Company shall have performed in all material respects
all of its obligations hereunder required to be performed by it on or
before the Closing Date; and
(d) The Seller shall have received a certificate signed by a
duly authorized officer of the Company to the effect set forth in
Section 4.2(b) and (c) above.
4.3 Termination. Notwithstanding any provision in this Agreement to the
contrary, this Agreement (other than the terms of this Section 4.3, Article V
and Article VI, which shall remain in full force and effect) shall terminate (a)
upon the date upon which the parties hereto mutually agree in writing to
terminate this Agreement, (b) upon the date on which the Underwriting Agreement
is terminated in accordance with its terms or (c) if the closing of the Purchase
does not occur on or before August 23, 2005, whichever occurs first. Upon
termination of this Agreement in accordance with the terms contained herein none
of the parties hereto nor any other person shall have any liability or further
obligation arising out of this Agreement except for any liability resulting from
the breach of this Agreement prior to termination; provided that notwithstanding
the foregoing, the rights and obligations of the Seller and the Company under
this Section 4.3, Article V and Article VI shall survive.
ARTICLE V
AMENDMENTS TO SUPPLY AGREEMENTS
5.1. Amendment to ConAgra Supply Agreement. Effective as of August 1,
2005, the first sentence of Section 3(b) of the ConAgra Supply Agreement dated
November 23, 2003, by and between the Seller and the Company (the "ConAgra
Agreement"), is hereby amended and restated in its entirety to read as follows:
"All Products supplied to ConAgra and/or the ConAgra Operating
Companies hereunder from the Batesville Facility shall be sold at
Pilgrim's actual production cost (meat cost plus complex overhead) in
producing Products at the Batesville Facility (which, as of the end of
ConAgra's April 2003 monthly period was reported on ConAgra's Plant
Costs - Consolidated with Debone Report for Period 1-11 of Fiscal Year
2003 (the "Plant Costs Report") as $.4838 per pound) ("Pilgrim's
Cost"), plus four cents ($.04) per pound of Product; provided further
that the maximum amount of Products that Pilgrim's and the Pilgrim
Operating Companies shall be required to supply to ConAgra and the
ConAgra Operating Companies hereunder from the Batesville Facility
shall not exceed 470,000 head per week of production and shall be in a
40-48 ounce weight range."
5.2 Termination of Xxxxxxxxxx Supply Agreement. The parties acknowledge
and confirm that the Xxxxxxxxxx Supply Agreement dated November 23, 2003, by and
between the Seller and the Company (the "Xxxxxxxxxx Agreement"), has been
terminated effective as of April 1, 2005 and is of no further force or effect
and that, except for amounts owed by the parties to each other under the
Xxxxxxxxxx Agreement, which amounts shall be paid in accordance with the terms
of such Agreement, neither party has any rights, duties or obligations under the
Xxxxxxxxxx Agreement; provided that Section 10 of the Xxxxxxxxxx Agreement shall
survive through and including April 1, 2007.
5.3 Ratification. Except as expressly modified and superseded by the
amendment set forth in Section 5.1 above, the terms and provisions of the
ConAgra Agreement are ratified and confirmed and shall continue in full force
and effect.
ARTICLE VI
MISCELLANEOUS
6.1 Expenses. Each party hereto shall pay all of the costs, fees and
expenses which each incurs incident to the preparation, execution and delivery
of this Agreement and all other documents as contemplated by this Agreement and
the performance of the obligations hereunder. For the avoidance of doubt, the
Company (a) shall bear all fees and expenses with respect to the Public
Offering, and (b) consents to the sale of the Securities by the Seller as
expressly provided by the Agreement and waives any restrictions to such sale to
the Company under the Registration Rights and Transfer Restriction Agreement.
6.2 Press Releases and Public Announcements. Either party may make any
public disclosure it believes in good faith based on the advice of counsel is
required to be made so as to not violate applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case the
parties will use reasonable efforts to advise the other prior to making the
disclosure);
6.3 Entire Agreement. This Agreement, together with the Registration
Rights and Transfer Restriction Agreement referenced below, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersede any prior understandings, agreements or representations by or
among the parties, written or oral, to the extent they relate in any way to the
subject matter hereof; provided that the terms and provisions of that certain
Registration Rights and Transfer Restriction Agreement dated November 23, 2003
by and among the Company, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx and the Seller
shall terminate upon the close of the Purchase and the payment of the Purchase
Price to Seller in accordance with Section 1.2(c).
6.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. Neither party may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of the other party. This Agreement shall not confer any rights or
remedies upon any person other than the parties and their respective successors
and permitted assigns.
6.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.6 Headings; Construction. The headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.
6.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware and the federal laws
of the United States of America without giving effect to any choice or conflict
of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware and the federal laws of the United States of
America.
6.8 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
party. No waiver by either party of any default, misrepresentation or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
6.9 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision shall be fully severable, this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
6.10 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be delivered by United
States certified mail, postage pre-paid, or guaranteed overnight delivery by a
recognized overnight delivery service, to the Company at 0000 XX Xxx 000 X.,
Xxxxxxxxx, Xxxxx 00000-0000, Facsimile 000-000-0000, Attention: Xxxxxxx X.
Xxxxxxx, and to the Seller at Xxx XxxXxxx Xxxxx, Xxxxx, XX 00000, Facsimile
000-000-0000, Attention: Xxxxx Xxxxxxxx. Notices shall be deemed received three
days following deposit in the United States mail, certified and postage
pre-paid, one business day following deposit with a recognized overnight
delivery service, when sent if by confirmed facsimile or upon receipt by the
recipient if by personal delivery. Any party hereto may change the address to
which notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving the other party notice in the manner herein set forth.
6.11 Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any action instituted in any court
of the United States or any state thereof having jurisdiction over the parties
and the matter, this being in addition to any other remedy to which they are
entitled at law or in equity.
6.12 Further Actions. The parties hereto agree that after the date of
this Agreement, they will, from time to time, upon the reasonable request of the
other party hereto, take such further action as such other party may reasonably
request to carry out the intent of this Agreement and the transfer and sale of
the Shares contemplated hereby.
[Remainder of This Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
PILGRIM'S PRIDE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Executive Vice-President, Chief
Financial Officer, Secretary and Treasurer
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CONAGRA FOODS, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Executive V.P. & Corporate Secretary
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