EXHIBIT 1.1
6,261,382 Shares
PILGRIM'S PRIDE CORPORATION
Common Stock
UNDERWRITING AGREEMENT/1/
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July __, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
X.X. XXXXXXX & SONS, INC.
As representatives of the
several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Certain stockholders named in Schedule II hereto (the "Selling
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Stockholders") severally propose to sell to the several Underwriters named in
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Schedule I hereto (the "Underwriters"), an aggregate of 6,261,382 shares (the
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"Firm Shares") of common stock, par value $.01 per share, of Pilgrim's Pride
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Corporation, a Delaware corporation (the "Company"), each Selling Stockholder
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selling the amount set forth opposite such Selling Stockholder's name in
Schedule II hereto. The Company also proposes to issue and sell to the several
Underwriters not more than 939,207 additional shares of its common stock, $.01
par value per share
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/1/ This form assumes that the Underwriting Agreement is executed and delivered
after the Registration Statement has been declared effective and that at
the time of effectiveness, the Registration Statement omitted pricing and
other related information as permitted by Rule 430A under the Act.
(the "Additional Shares") if requested by the Underwriters as provided in
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Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
referred to collectively as the "SHARES". The shares of common stock of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON STOCK". The Company and the Selling
Stockholders are hereinafter sometimes collectively referred to as the
"SELLERS".
Section 1. Registration Statement and Prospectus. The Company has
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prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
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as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1, including a
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prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "Registration Statement";
and the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the "Prospectus". If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
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reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
Section 2. Agreements to Sell and Purchase and Lock-Up Agreements. On the
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basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) each Selling Stockholder agrees,
severally and not jointly, to sell the number of Firm Shares set forth opposite
such Selling Stockholder's name in Schedule II hereto and (ii) each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder at
a price per Share of $______ (the "Purchase Price") the number of Firm Shares
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(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Firm Shares to
be sold by such Selling Stockholder as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional
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Shares and the Underwriters shall have the right to purchase, severally and not
jointly, up to 939,207 Additional Shares from the Company at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Company within
30 days after the date of this Agreement. You shall give any such notice on
behalf of the Underwriters and such notice shall specify the aggregate number of
Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no earlier
than two business days after such notice has been given (and, in any event, no
earlier than the Closing Date (as hereinafter defined)) and (ii) no later than
ten business days after such notice has been given. If any Additional Shares
are to be purchased, each Underwriter, severally and not jointly, agrees to
purchase from the Company the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
Each Seller hereby agrees not to (i) offer, pledge, 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 Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 90 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. The Company
also agrees not to file any registration statement with respect to any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock for a period of 90 days after the date of the Prospectus
without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation. In addition, each Selling Stockholder agrees that, for a period of
90 days after the date of the Prospectus without the prior written consent of
Xxxxxxxxx, Lufkin & Xxxxxxxx
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Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
The Company shall, prior to or concurrently with the execution of this
Agreement, deliver an agreement executed by (i) each Selling Stockholder and
(ii) each of the directors and executive officers of the Company who is not a
Selling Stockholder listed on Annex 1 hereto to the effect that such person will
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not, during the period commencing on the date such person signs such agreement
and ending 90 days after the date of the Prospectus, without the prior written
consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
Section 3. Terms of Public Offering. The Sellers are advised by you that
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the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. Delivery to the Underwriters of and
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payment for the Firm Shares shall be made at 9:00 A.M., New York City time, on
__________ , 1997 (the "Closing Date") at such place as you shall designate.
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The Closing Date and the location of delivery of and payment for the Firm Shares
may be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at such place as you shall designate
at 9:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 (an "Option Closing Date").
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Any such Option Closing Date and the location of delivery of and payment for
such Additional Shares may be varied by agreement between you and the Company.
Certificates for the Shares (other than the DTC Shares (as defined below))
shall be registered in such names and issued in such denominations as you shall
request in writing not later than two full business days prior to the Closing
Date or an Option Closing Date, as the case may be. Such certificates shall be
made available to you for inspection not later than 9:30 A.M.,
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New York City time, on the business day prior to the Closing Date or the
applicable Option Closing Date, as the case may be. Certificates in definitive
form evidencing the Shares (other than the DTC Shares) shall be delivered to you
on the Closing Date or the applicable Option Closing Date, as the case may be,
with any transfer taxes thereon duly paid by the respective Sellers, for the
respective accounts of the several Underwriters, against payment to the Sellers
of the Purchase Price therefor by wire transfer of Federal or other funds
immediately available in New York City. The DTC Shares shall be transferred to
you or your designee(s) on the books of The Depositary Trust Company on the
Closing Date, with any transfer taxes thereon duly paid by ADM, for the
respective accounts of the several Underwriters, against payment to ADM of the
Purchase Price therefor by wire transfer of Federal or other funds immediately
available in New York City. As used herein, "DTC Shares" shall mean the 514,900
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Shares beneficially owned by ADM (as defined in Section 5(i)) and held by The
Depositary Trust Company.
Section 5. Agreements of the Company. The Company agrees with you:
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(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes,
(iii) when any amendment to the Registration Statement becomes effective,
(iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective and (v) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the
Company will use its best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time.
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(b) To furnish to you three signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, without exhibits, as you
may reasonably request.
(c) To prepare the Prospectus in a form reasonably acceptable to you
and to file the Prospectus in such form with the Commission within the
applicable period specified in Rule 424(b) under the Act; not to file any
further amendment to the Registration Statement and not to make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised or to which you shall reasonably object after being so
advised; and to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
amendment or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Shares by you, and to
use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the second business
day after the date of this Agreement and from time to time thereafter for
such period as in the opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City to each Underwriter
and any dealer as many copies of the Prospectus (and of any amendment or
supplement to the Prospectus) as such Underwriter or dealer may reasonably
request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so
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delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as
many copies thereof as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided, however, that
the Company shall not be required in connection therewith to register or
qualify as a foreign corporation in any jurisdiction in which it is not now
so qualified or to take any action that would subject it to service of
process or taxation other than as to matters and transactions relating to
the Prospectus, the Registration Statement, any preliminary prospectus or
the offering or sale of the Shares, in any jurisdiction in which it is not
now so subject.
(g) To mail and make generally available to its stockholders as soon
as practicable an earnings statement covering the twelve-month period
ending September 27, 1998 that shall satisfy the provisions of Section
11(a) of the Act, and to advise you in writing when such statement has been
so made available.
(h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished
to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other
publicly available information concerning the Company and its subsidiaries
as you may reasonably request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery
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of the Shares under the Act and all other fees or expenses in connection
with the preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing prior to or during the period specified in Section 5(d),
including the mailing and delivering of copies thereof to the Underwriters
and dealers in the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement and any other agreements or documents
prepared and delivered by you or your counsel with the consent of the
Company in connection with the offering, purchase, sale or delivery of the
Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of
counsel for the Underwriters in connection with the review and clearance of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (vi) all costs and expenses incident to the listing of the
Shares on the New York Stock Exchange, (vii) the cost of printing
certificates representing the Shares, (viii) the costs and charges of any
transfer agent, registrar and/or depositary, and (ix) all other costs and
expenses incident to the performance of the obligations of the Company and
the Selling Stockholders hereunder for which provision is not otherwise
made in this Section. The provisions of this Section shall not supersede
or otherwise affect any agreement that the Company and the Selling
Stockholders may otherwise have for allocation of such expenses among
themselves, including, without limitation, that certain agreement, dated as
of July __, 1997, among the Company and Xxxxxx-Xxxxxxx-Midland Company, a
Delaware corporation ("ADM"), Xxxxxxx Xxxxx Xxxxxxx and Xxxxx Xxxxxxx
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Xxxxx.
(j) To use its best efforts to list, subject to notice of issuance,
the Additional Shares, if any, on the New York Stock Exchange and to
maintain the listing of the Shares on the New York Stock Exchange for a
period of three years after the date of this Agreement.
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(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
6. Representations and Warranties of the Company. The Company represents
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and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement;
and no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement), when it became effective, did not contain and, as
amended, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement (other than any Rule 462(b) Registration Statement
to be filed by the Company after the effectiveness of this Agreement) and
the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Act, (iii) if the Company is
required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement
and any amendments thereto, when they become effective (A) will not contain
any untrue statement
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of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (B)
will comply in all material respects with the Act and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(d) The Company has no subsidiaries other than those listed on Exhibit
22.1 to the Registration Statement. Each of the Company and its
subsidiaries is a corporation, limited partnership or business trust that
has been duly formed, is validly existing and in good standing under the
laws of its jurisdiction of organization and has the power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing
as a foreign corporation, limited partnership or business trust authorized
to do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
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(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling
any person to purchase or otherwise to acquire any ownership interest in
the Company or any of its subsidiaries, except as otherwise disclosed in
the Registration Statement.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be
issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by
this Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(g) All of the outstanding shares of capital stock, partnership
interests or other ownership interests, as applicable, of each of the
Company's subsidiaries are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature, except as set
forth on Annex II hereto. All of the outstanding shares of capital stock
of each of the Company's corporate subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement by the
Company, compliance by the Company with all the provisions hereof and the
consummation of the
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transactions contemplated hereby (i) will not require any consent,
approval, authorization or other order of, or qualification with, any court
or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, (A) the charter or by-laws of the Company or any of its
subsidiaries or (B) any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their
respective property is bound except for breaches or defaults that would not
be material to the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, and (iii)
(assuming compliance with all applicable state securities or Blue Sky laws,
rules and regulations) will not violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any of
its subsidiaries or their respective property.
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described as required; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed
as required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
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Laws") or any provisions of the Employee Retirement Income Security Act of
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1974, as amended, or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not
have a material adverse effect on the business, prospects, financial
condition or results of operation of the Company and its subsidiaries,
taken as a whole.
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(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "Authorization") of, and has made all filings with and
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notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without
limitation, under any applicable Environmental Laws, as are necessary to
own, lease, license and operate its respective properties and to conduct
its business, except where the failure to have any such Authorization or to
make any such filing or notice would not, singly or in the aggregate, have
a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a
whole. Each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with all the
terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse
of time or both, would result in any other impairment of the rights of the
holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be
in compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
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(o) This Agreement has been duly authorized, executed and delivered by
the Company.
(p) Ernst & Young LLP are independent public accountants with respect
to the Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly in all
material respects the consolidated financial position, results of
operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared
on a basis consistent with such financial statements and the books and
records of the Company.
(r) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(s) Except for that certain Stock Purchase Agreement, dated as of May
12, 1992, between the Company and ADM, there are no contracts, agreements
or understandings between the Company and any person granting such person
the right to require the Company to file a registration statement under the
Act with respect to any securities of the Company or to require the Company
to include such securities with the Shares registered pursuant to the
Registration Statement.
(t) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings,
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business, management or operations of the Company and its subsidiaries,
taken as a whole, (ii) there has not been any material adverse change or
any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its
subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(u) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operations of the Company and its subsidiaries considered as a whole, each
of the Company and its subsidiaries has good and marketable title, free and
clear of all liens, claims, encumbrances and restrictions except liens for
taxes not yet due and payable, to all property and assets described in the
Registration Statement as being owned by it. All leases to which the
Company or any of its subsidiaries is a party are valid and binding and no
default has occurred or is continuing thereunder, which might result in any
material adverse change in the business, prospects, financial condition or
results of operations of the Company and its subsidiaries taken as a whole,
and the Company and each of its subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which the Company or any of its
subsidiaries is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company or such subsidiary.
(v) The Company maintains reasonably adequate insurance.
Section 7. Representations and Warranties of the Selling Stockholders.
----------------------------------------------------------
Each Selling Stockholder represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on
the Closing Date will have, good and clear title to such Shares, free of
all restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever.
(b) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement signed
by such
15
Selling Stockholder and Xxxxxx Trust and Savings Bank, as Custodian,
relating to the deposit of the Shares to be sold by such Selling
Stockholder (the "Custody Agreement") and the Power of Attorney of such
-----------------
Selling Stockholder (in the case of Xxxxxxx Xxxxx Xxxxxxx and Xxxxx Xxxxxxx
Xxxxx) appointing Xxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxx as such Selling
Stockholder's attorneys-in-fact (the "Attorneys") to the extent set forth
---------
therein, relating to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement (the "Power of Attorney")
-----------------
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder in the manner provided herein and therein.
(c) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(d) The Custody Agreement of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms.
(e) The Power of Attorney of such Selling Stockholder (in the case of
Xxxxxxx Xxxxx Xxxxxxx and Xxxxx Xxxxxxx Xxxxx) has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and
binding instrument of such Selling Stockholder, enforceable in accordance
with its terms, and, pursuant to such Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys, or any one
of them, to execute and deliver on such Selling Stockholder's behalf this
Agreement and any other document that they, or any one of them, may deem
necessary or desirable in connection with transactions contemplated hereby
and thereby and to deliver the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(f) Upon delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(g) The execution, delivery and performance of this Agreement and the
Custody Agreement and, in the case of Xxxxxxx Xxxxx Xxxxxxx and Xxxxx
Xxxxxxx Xxxxx, the Power of
16
Attorney of such Selling Stockholder by or on behalf of such Selling
Stockholder, compliance by such Selling Stockholder with all the provisions
hereof and thereof and the consummation of the transactions contemplated
hereby and thereby will not require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body or
agency (except such as may be required under the securities or Blue Sky
laws of the various states) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any property
of such Selling Stockholder is bound, or violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over such
Selling Stockholder or any property of such Selling Stockholder.
(h) The information in the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relates to such
Selling Stockholder does not, and will not on the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(i) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(h), such Selling
Stockholder will immediately notify you of such change.
Section 8. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, damages,
------------
liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses,
claims, damages,
17
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use
therein; provided that the foregoing indemnity with respect to any
--------
preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages,
liabilities, actions or expenses purchased Shares, or any controlling
person of such Underwriter, if a copy of the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) had not been sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the
sale of Shares to such person by such Underwriter and the untrue statement
or omission (or alleged untrue statement or omission) of a material fact in
such preliminary prospectus was corrected in the Prospectus (as amended or
supplemented).
(b) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter, its directors, its officers
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to such persons but only with
reference to information included in, or omissions from, the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus made in reliance upon and
in conformity with written information furnished to the Company or any
Underwriter by such Selling Stockholder, directly or through such Selling
Stockholder's representatives. Notwithstanding the foregoing, the
aggregate liability of any Selling Stockholder pursuant to this Section
8(b) shall be limited to an amount equal to the total proceeds (before
deducting expenses) received by such Selling Stockholder from the
Underwriters for the sale of the Shares sold by such Selling Stockholder
hereunder.
18
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, each Selling Stockholder and each person, if any, who controls such
Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from
the Company to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Company by such
Underwriter through you expressly for use in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a), 8(b) or
8(c) (the "indemnified party"), the indemnified party shall promptly notify
-----------------
the person against whom such indemnity may be sought (the "indemnifying
------------
party") in writing and the indemnifying party shall assume the defense of
-----
such action, including the employment of counsel reasonably satisfactory to
the indemnified party and the payment of all fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to Section 8(c) and one or more of
Sections 8(a) and 8(b), the Underwriter shall not be required to assume the
defense of such action pursuant to this Section 8(d), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action
or employ counsel reasonably satisfactory to the indemnified party or (iii)
the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party, and the
indemnified party and the indemnifying party shall have been advised by
such counsel that there may be one or more legal defenses available to the
indemnified party which are different from or additional to those available
to the
19
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection
with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for (i) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel)
for all Underwriters, their officers and directors and all persons, if any,
who control any Underwriter within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, (ii) the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration
Statement and all persons, if any, who control the Company within the
meaning of either such Section and (iii) the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
Selling Stockholders and all persons, if any, who control any Selling
Stockholder within the meaning of either such Section, and all such fees
and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters, their officers and directors and
such control persons of any Underwriters, such firm shall be designated in
writing by Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation. In the
case of any such separate firm for the Company and such directors, officers
and control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the
Selling Stockholders and such control persons of any Selling Stockholders,
such firm shall be designated in writing by the Attorneys. The
indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and
judgments by reason of any settlement of any action (i) effected with its
written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party
for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and,
prior to the date of such settlement, the indemnifying party shall have
failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement or compromise of, or consent to the entry of judgment with
20
respect to, any pending or threatened action in respect of which the
indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the indemnified party.
(e) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand from
the offering of the Shares or (ii) if the allocation provided by clause
8(e)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(e)(i) above but also the relative fault of the Sellers on the one hand
and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the
public of the Shares, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders
on the one hand or the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
21
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
incurred by such indemnified party in connection with investigating or
defending any matter, including any action, that could have given rise to
such losses, claims, damages, liabilities or judgments. Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 8(e) are several in proportion to
the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
(f) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) Each Selling Stockholder (other than ADM) hereby designates
Pilgrim's Pride Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
00000, as its authorized agent, upon which process may be served in any
action which may be instituted by any Underwriter, any director or officer
of any Underwriter or any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section
8. A copy of any such process shall be sent or given to such Selling
Stockholder at the address for notices specified in Section 12 hereof. ADM
hereby agrees that any such process may be served on it at the address for
notices to it specified in Section 12
22
hereof. Each Selling Stockholder agrees that it will accept the
jurisdiction of any state or federal court in the State of New York in any
such action, and waives, to the fullest extent permitted by applicable law,
any defense based upon lack of personal jurisdiction or venue.
Section 9. Conditions of Underwriters' Obligations. The several
---------------------------------------
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or, to the knowledge of the Company, contemplated by the Commission.
(c) On or after the date hereof there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating of the Company
or any of the Company's securities or in the rating outlook of the Company
(including, without limitation, the placing of any of the foregoing ratings
on creditwatch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule 436(g)(2)
under the Act.
(d) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by Xxxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx, in
their capacities as the Executive President and Chief Financial Officer of
the Company, confirming the matters set forth in Sections 9(a), 9(b), 9(e),
and 9(m) (with respect to the Company) and, to their knowledge, 9(c).
23
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any material adverse change
or any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii)
there shall not have been any change or any development involving a
prospective material adverse change in the capital stock or in the long-
term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, which is material to the Company and its
subsidiaries taken as a whole, other than those incurred in the ordinary
course of business consistent in both type and amount with past practice,
the effect of which, in any such case described in clause 9(e)(i), 9(e)(ii)
or 9(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus.
(f) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing
Date, from each Selling Stockholder.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Xxxxx & XxXxxxxx, counsel for the Company and the Selling
Stockholders (other than ADM), to the effect that:
(i) each of the Company and its subsidiaries is a corporation,
limited partnership or business trust validly existing and, in the
case of any such corporation or business trust, in good standing under
the laws of its jurisdiction of incorporation or formation and has the
power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties;
(ii) the Company is duly qualified as a foreign corporation in
the states of Arizona, Arkansas, Oklahoma and Texas;
24
(iii) all the Firm Shares have been duly authorized and validly
issued and are fully paid, non-assessable and were not issued in
violation of any statutory preemptive rights or, to such counsel's
knowledge, other rights to subscribe for or purchase any securities;
(iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any statutory
preemptive rights or, to such counsel's knowledge, other rights to
subscribe for or purchase any securities;
(v) to such counsel's knowledge, all of the outstanding shares of
capital stock, partnership interests or other ownership interests, as
applicable, of each of the Company's subsidiaries are owned by the
Company, directly or indirectly through one or more subsidiaries, free
and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature, except as set forth on Annex II
hereto; and all of the outstanding shares of capital stock of each of
the Company's corporate subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and by or on behalf of each Selling
Stockholder (other than ADM);
(vii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(viii) based solely on telephonic confirmation from the
Commission, the Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission;
(ix) the statements under the caption "Description of Capital
Stock" in the Prospectus and Items 14 and 15 of Part II of the
Registration Statement, insofar as
25
such statements constitute a summary of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings;
(x) the execution, delivery and performance of this Agreement by
the Company, compliance by the Company with all the provisions hereof
and the consummation of the transactions contemplated hereby (A) will
not require any consent, approval, authorization or other order of, or
qualification with, any federal, Delaware corporate or Texas
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (B) will not
violate or constitute a breach of any of the terms or provisions of,
or a default under, (1) the charter or by-laws of the Company or (2)
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound and of which such counsel is aware, except for
violations, breaches or defaults which could not reasonably be
expected to have a material adverse effect on the business,
properties, or financial condition of the Company and its subsidiaries
taken as a whole, and (C) will not violate any applicable federal,
Delaware corporate or Texas law, rule or regulation (other than
federal or state securities or blue sky laws, rules or regulations, as
to which such counsel need express no opinion), or, to such counsel's
knowledge, any judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or their respective property;
(xi) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described as required, or of any statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
26
(xii) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(xiii) to such counsel's knowledge, except for that certain
Stock Purchase Agreement, dated as of May 12, 1992, between the
Company and ADM, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act
with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant
to the Registration Statement;
(xiv) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial data included therein as to which no opinion need
be expressed) comply as to form in all material respects with the Act;
(xv) each Selling Stockholder (other than ADM) is the record
owner of the Shares to be sold by such Selling Stockholder pursuant to
this Agreement;
(xvi) the Custody Agreement of each Selling Stockholder (other
than ADM) has been duly executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity);
(xvii) the Power of Attorney of each Selling Stockholder (other
than ADM) has been duly executed and
27
delivered by such Selling Stockholder and is a valid and binding
instrument of such Selling Stockholder, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity);
(xviii) upon delivery of and payment for the Shares to be sold
by each Selling Stockholder (other than ADM) pursuant to this
Agreement, each Underwriter that takes delivery without notice of any
adverse claim will be a protected purchaser with respect to such
Shares within the meaning of Article 8 of the Uniform Commercial Code
and good and clear title to such Shares will pass to such Underwriter,
free of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever; and
(xix) the execution, delivery and performance of this Agreement,
the Custody Agreement and the Power of Attorney by such Selling
Stockholder (other than ADM) and the compliance by such Selling
Stockholder with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby (A)
will not require any consent, approval, authorization or other order
of, or qualification with, any federal, Delaware corporate or Texas
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (B) to such
counsel's knowledge, will not violate or constitute a breach of any of
the terms or provisions of, or a default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which
such Selling Stockholder is a party or by which any property of such
Selling Stockholder is bound, and (C) will not violate any applicable
federal, Delaware corporate or Texas law, rule or regulation (other
than federal or state securities or blue sky laws, rules or
regulations, as to which such counsel need express no opinion), or, to
such counsel's knowledge, any judgment, order or decree of any court
or any governmental body or agency having jurisdiction over such
Selling Stockholder or any property of such Selling Stockholder.
28
Such counsel shall also state that they have participated in
conferences with directors, officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, representatives of the Underwriter, and counsel for the
Underwriter, at which conferences the contents of the Registration
Statement, the Prospectus and related matters were discussed, and although
such counsel have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, no
facts have come to such counsel's attention that lead such counsel to
believe that the Registration Statement, on the effective date thereof or
the date hereof, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading, or that the
Prospectus, on the date thereof or on the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make
the statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel need
express no view with respect to the financial statements and notes thereto,
the financial statement schedules and the other financial, accounting and
statistical data included in the Registration Statement or the Prospectus).
The opinion of Xxxxx & XxXxxxxx described in Section 9(g) above shall
be rendered to you at the request of the Company and the Selling
Stockholders (other than ADM) and shall so state therein. Insofar as any
of the matters described in Sections 9(g)(i) and (v) are governed by
federal or state laws of Mexico, the opinions with respect to such matters
may be rendered by Von Wobeser Y Sierra, S.C. Any such opinion shall state
therein that it is being rendered to you at the request of the Company.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Xxxxx X. Xxxxx, Vice President and General Counsel for ADM, to the
effect that:
29
(i) ADM is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(ii) this Agreement has been duly authorized, executed and
delivered by ADM;
(iii) ADM is the lawful owner of the Shares to be sold by ADM
pursuant to this Agreement;
(iv) ADM has full legal right, power and authority, and all
authorization and approval required by law, to enter into this
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder in the manner provided herein;
(v) upon delivery of and payment for the Shares to be sold by ADM
pursuant to this Agreement, each Underwriter that takes delivery
without notice of any adverse claim will be a protected purchaser with
respect to such Shares within the meaning of Article 8 of the Uniform
Commercial Code and good and clear title to such Shares will pass to
such Underwriter, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims whatsoever; and
(vi) the execution, delivery and performance of this Agreement by
ADM and the compliance by ADM with all the provisions hereof and the
consummation of the transactions contemplated hereby and thereby (A)
will not require any consent, approval, authorization or other order
of, or qualification with, any federal, Delaware corporate, or
Illinois governmental body or agency (except such as may be required
under the securities or Blue Sky laws of the various states), (B) will
not violate or constitute a breach of any of the terms or provisions
of, or a default under, (1) the organizational documents of ADM, or
(2) any indenture, loan agreement, mortgage, lease or other agreement
or instrument to which ADM is a party or by which any property of ADM
is bound, and (C) will not violate any applicable federal, Delaware
corporate or Illinois law, rule or regulation (other than federal or
state securities or blue sky laws, rules or regulations, as to which
such counsel need express no opinion), or, to such counsel's
knowledge, any judgment, order or decree of any court or any
governmental body or agency having jurisdiction over ADM or any
property of ADM.
30
(i) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriters,
as to the matters referred to in Sections 9(g)(iv), 9(g)(vi) (but only with
respect to the Company), 9(g)(vii), and 9(g)(xiv).
Such counsel shall also state that they have participated in
conferences with directors, officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants for the Company, and representatives of the Underwriter, at
which conferences the contents of the Registration Statement, the
Prospectus and related matters were discussed, and although such counsel
have not independently verified and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement, on the effective date thereof or the date hereof,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading, or that the Prospectus, on the
date thereof or on the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view with
respect to the financial statements and notes thereto, the financial
statement schedules and the other financial and accounting data included in
the Registration Statement or the Prospectus.
(j) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Ernst & Young
LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus.
31
(k) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and effect on
the Closing Date.
(l) The Shares shall have been duly listed, subject, if applicable, to
notice of issuance, on the New York Stock Exchange.
(m) The Company and the Selling Stockholders shall not have failed at
or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with
by the Company or the Selling Stockholders, as the case may be, at or prior
to the Closing Date.
(n) You shall have received on the Closing Date from each Selling
Stockholder a properly completed and executed United States Treasury
Department Form W-9.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
Section 10. Effectiveness of Agreement and Termination. This
------------------------------------------
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication,
32
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in
33
order that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 11. Agreements of the Selling Stockholders. Each Selling
--------------------------------------
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold
by such Selling Stockholder pursuant to this Agreement.
(c) To pay the fees and expenses of any counsel engaged by, or on
behalf of, such Selling Stockholder.
Section 12. Miscellaneous. Notices given pursuant to any provision
-------------
of this Agreement shall be addressed as follows: (i) if to the Company, to
Pilgrim's Pride Corporation, 000 Xxxxx Xxxxx Xxxxxx, X.X. Xxx 00, Xxxxxxxxx,
Xxxxx 00000, Attention: Xxxxxxxx X. Xxxxxx, (ii) if to the Selling Stockholders
(other than ADM), to Xxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxx c/o Pilgrim's
Pride Corporation, 000 Xxxxx Xxxxx Xxxxxx, X.X. Xxx 00, Xxxxxxxxx, Xxxxx 00000,
(iii) if to ADM, to 0000 Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Treasurer, and (iv) if to any Underwriter or to you, to you c/x Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
34
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), each Seller whose Shares are not so delivered
shall reimburse the several Underwriters for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof and
the Selling Stockholders shall be liable for all expenses which they have agreed
to pay pursuant to Section 11 hereof. Each Seller also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights against such Seller hereunder (including, without
limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
35
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
36
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
PILGRIM'S PRIDE CORPORATION
By:
--------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice Chairman of the Board
and Executive President
XXXXXX-XXXXXXX-MIDLAND COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
THE SELLING STOCKHOLDERS NAMED IN SCHEDULE II HERETO
(OTHER THAN XXXXXX-XXXXXXX-MIDLAND COMPANY), ACTING
SEVERALLY
By:
--------------------------------------
Xxxxxxxx X. Xxxxxx, Attorney-in-Fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
X.X. XXXXXXX & SONS, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
---------------------------
Name:
-------------------------
Title:
------------------------
37
SCHEDULE I
----------
Number of Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
X.X. Xxxxxxx & Sons, Inc.
Total 6,261,382
1
SCHEDULE II
-----------
Selling Stockholders
--------------------
Number of Firm
Name Shares Being Sold
---- -----------------
Xxxxxx-Xxxxxxx-Midland Company 5,514,900
Xxxxxxx Xxxxx Xxxxxxx 370,982
Xxxxx Xxxxxxx Xxxxx 375,500
Total 6,261,382
2
Annex I
Xxxxxx "Bo" Pilgrim
Xxxxxxxx X. Xxxxxx
Xxxxx X. "Buddy" Pilgrim
Xxxxx Xxx Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxx
Xxxxxx Xxx Xxxxxxx
3
Annex II
8,575,460 shares of capital stock of Xxxxxxx Pesada S.A. de C.V. are issued
and outstanding, of which (i) 4,716,504 shares are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any nature,
and (ii) 3,858,956 shares are owned by certain other stockholders.
4
