Exhibit 4.8(a)
EXECUTION COPY
SMITHFIELD FOODS, INC.
$200,000,000
7 5/8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
February 4, 1998
CHASE SECURITIES INC.
270 Park Avenue
4th floor
New York, New York 10017
Ladies and Gentlemen:
Smithfield Foods, Inc., a Virginia corporation (the
"Company"), proposes to issue and sell $200,000,000 aggregate principal amount
of its 7 5/8% Senior Subordinated Notes due 2008 (the "Securities"). The
Securities will be issued pursuant to an Indenture to be dated as of February 9,
1998 (the "Indenture") between the Company and SunTrust Bank, Atlanta, as
trustee (the "Trustee"). The Company hereby confirms its agreement with Chase
Securities Inc. (the "Initial Purchaser") concerning the purchase of the
Securities from the Company by the Initial Purchaser.
The Securities will be offered and sold to the Initial
Purchaser without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon exemptions therefrom. The Company has
prepared a preliminary offering memorandum dated January 22, 1998 (including the
documents incorporated by reference therein, the "Preliminary Offering
Memorandum") and will prepare an offering memorandum dated the date hereof
(including the documents incorporated by reference therein, the "Offering
Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchaser pursuant to the terms of this Agreement. Any references herein to the
Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to
include all amendments and supplements thereto, unless otherwise noted. The
Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Securities by the Initial Purchaser in accordance with Section
2.
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Holders of the Securities (including the Initial Purchaser and
its direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Company will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to, and agrees with, the Initial Purchaser
on and as of the date hereof and the Closing Date (as defined in Section 3) as
set forth below in this Section 1. Any reference to persons acting on behalf of
the Company, or on behalf of any of the Company's affiliates, does not include
the Initial Purchaser, with respect to whom the Company makes no representation.
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Preliminary
Offering Memorandum or the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchaser
furnished to the Company by or on behalf of the Initial Purchaser
specifically for use therein (the "Initial Purchaser's Information"),
as specified in Section 15 hereof.
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchaser contained in Section 2 and its
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchaser and the offer, resale and delivery of the Securities
by the Initial Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the
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Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) The documents incorporated by reference in the Offering
Memorandum, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations of
the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Offering Memorandum or any further
amendment or supplement thereto, when such documents are filed with the
Commission, will conform in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder, and will 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 not misleading.
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and
each of its subsidiaries listed on Schedule I hereto (the
"Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction.
(f) The Company has an authorized capitalization as set forth
in the Offering Memorandum under the heading "Capitalization," and all
the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description of the capital stock in the Offering
Memorandum; and all of the issued shares of capital stock of each of
the Subsidiaries have been duly and validly authorized and issued, are
fully paid and non-assessable and other than as set forth or
contemplated in the Offering Memorandum are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(g) The Company has full corporate power and authority to
execute and deliver this Agreement, the Indenture, the Registration
Rights Agreement and the Securities (collectively, the "Transaction
Documents") and to perform its obligations
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hereunder and thereunder; and all corporate action required to be taken
for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law) and
considerations of public policy as they relate to the enforcement of
the indemnification provisions hereof.
(i) The Registration Rights Agreement has been duly authorized
by the Company and, when duly executed and delivered in accordance with
its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
to general equitable principles (whether considered in a proceeding in
equity or at law).
(j) The Indenture has been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law). On
the Closing Date, the Indenture will conform in all material respects
to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(k) The Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein, will be duly
and validly issued and outstanding and will constitute valid and
legally binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law).
(l) The Exchange Securities have been duly authorized by the
Company and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and the Registration Rights Agreement, will
be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in
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accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in
equity or at law).
(m) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(n) The issue and sale of the Securities and the Exchange
Securities by the Company and the compliance by the Company with all of
the provisions of this Agreement and the other Transaction Documents
and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement 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 is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such conflicts, breaches,
violations or defaults that would not have a Material Adverse Effect
(as defined below), nor will such action result in any violations of
the provisions of the charter or by-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, except any such violation that would not have
a Material Adverse Effect; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement and the other Transaction Documents,
except for such consents, approvals, authorizations, registrations or
qualifications (i) which shall have been obtained or made prior to the
Closing Date and as may be required to be obtained or made under the
Securities Act and applicable state securities laws, as provided in the
Registration Rights Agreement or (ii) the failure of which to be
obtained or made would not have a Material Adverse Effect.
(o) Arthur Andersen LLP ("Arthur Andersen") are independent
certified public accountants with respect to the Company and its
subsidiaries (i) as required by the Securities Act and the rules and
regulations of the Commission thereunder and (ii) within the meaning of
Rule 101 of the Code of Professional Conduct of the American Institute
of Certified Public Accountants ("AICPA") and its interpretations and
rulings thereunder. The historical financial statements (including the
related notes) contained in the Offering Memorandum comply as to form
in all material respect with the applicable accounting requirements of
the Securities Act and the related published rules and regulations;
such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the
respective dates indicated and the results of their operations and
their cash flows for the respective periods indicated; and the
financial information contained in the Offering Memorandum under the
headings "Summary--Summary
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Consolidated Condensed Financial Information," "Capitalization,"
"Selected Historical Consolidated Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and the financial information contained in the Company's
Notice of Annual Meeting of Stockholders dated July 28, 1997,
incorporated by reference in the Offering Memorandum, under the heading
"Executive Compensation" are derived from the accounting records of the
Company and its subsidiaries and fairly present the information
purported to be shown thereby. The pro forma financial information
contained in the Offering Memorandum has been prepared on a basis
consistent with the historical financial statements contained or
incorporated in the Offering Memorandum (except for the pro forma
adjustments specified therein), includes all material adjustments to
the historical financial information required by Rule 11-02 of
Regulation S-X under the Securities Act and the Exchange Act to reflect
the transactions described in such pro forma financial information,
gives effect to assumptions made on a reasonable basis and fairly
presents the transactions described therein. The other historical
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, fairly presented.
(p) Other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is the subject
which, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate would have a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole ("Material Adverse Effect"); and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(q) No injunction, restraining order or order of any nature by
any federal or state court of competent jurisdiction has been issued
with respect to the Company or any of its Subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use of
the Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to
the best knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries before any court or arbitrator or
any governmental agency, body or official, domestic or foreign, which
could reasonably be expected to interfere with or adversely affect the
issuance of the Securities or in any manner draw into question the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; and the Company has
complied with any and all known requests, or any and all requests that
should have been reasonably known, by any securities authority in any
jurisdiction for additional information to be included in the
Preliminary Offering Memorandum and the Offering Memorandum.
(r) Neither the Company nor any of its Subsidiaries is (i) in
violation of its charter or by-laws, (ii) in default, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or
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observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject,
which default under clause (ii) or violation under clause (iii) could
reasonably be expected to have a Material Adverse Effect.
(s) The Company and each of its Subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the
Offering Memorandum, except where the failure to possess or make the
same would not have, singularly or in the aggregate, a Material Adverse
Effect, and neither the Company nor any of its Subsidiaries has
received notification of any revocation or modification of any such
license, certificate, authorization or permit or has any reason to
believe that any such license, certificate, authorization or permit
will not be renewed in the ordinary course.
(t) The Company and each of its Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Offering Memorandum or such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries; and any real property and buildings held under lease by
the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company and its
Subsidiaries.
(u) No material labor disturbance by or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the
best knowledge of the Company, is contemplated or threatened.
(v) Other than as set forth in the Offering Memorandum, there
has been no storage, generation, transportation, handling, treatment,
disposal, discharge, emission or other release of any kind of toxic or
other wastes or other hazardous substances by, due to or caused by the
Company or any of its Subsidiaries (or, to the best knowledge of the
Company, any other entity (including any predecessor) for whose acts or
omissions the Company or any of its Subsidiaries is or could reasonably
be expected to be liable) upon any of the property now or previously
owned or leased by the Company or any of its Subsidiaries, or upon any
other property (i) in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or (ii) which would,
under any statute or any ordinance, rule (including rule of common
law), regulation, order, judgment, decree or permit, give rise to any
liability, except in the case of both clauses (i) and (ii), for any
violation or liability which could not
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reasonably be expected to have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; and there
has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with respect to
which the Company has any knowledge, except for any such disposal,
discharge, emission or other release of any kind which could not
reasonably be expected to have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect.
(w) None of the proceeds of the sale of the Securities will be
used, directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(x) Other than this Agreement, neither the Company nor any of
its Subsidiaries is a party to any contract, agreement or understanding
with any person that would give rise to a valid claim against the
Company or the Initial Purchaser for a brokerage commission, finder's
fee or like payment in connection with the offering and sale of the
Securities.
(y) None of the Company, any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (as such term is defined in Rule 902(b) of
Regulation S under the Securities Act ("Regulation S")) with respect to
the Securities, and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S to the extent
applicable.
(z) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as such
term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(aa) None of the Company or any of its affiliates or any other
person acting on its or their behalf has engaged, in connection with
the offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act.
(bb) When the Securities are delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the
meaning of Rule 144A under the Securities Act ("Rule 144A")) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act, or quoted in a
U.S. automated inter-dealer quotation system.
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(cc) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Securities (other than
actions taken by the Initial Purchaser, as to which the Company makes
no representation).
(dd) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Preliminary Offering Memorandum or the Offering
Memorandum has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
(ee) Since the date as of which information is given in the
Offering Memorandum, except as otherwise stated or contemplated
therein, there has been no material adverse change or any development
involving a prospective material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs,
management or business prospects of the Company, whether or not arising
in the ordinary course of business, the Company has not incurred any
material liability or obligation, direct or contingent, other than in
the ordinary course of business and there has not been any material
change in the capital stock or long-term debt of the Company, or any
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(ff) No holder of securities of the Company or any of its
Subsidiaries will be entitled to have such securities registered under
the registration statements required to be filed by the Company
pursuant to the Registration Rights Agreement, other than as expressly
permitted thereby.
2. Purchase and Resale of the Securities. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, $200,000,000 aggregate principal amount of Securities at a purchase
price equal to 97.411% of the principal amount thereof. The Company shall not be
obligated to deliver any of the Securities except upon payment for all of the
Securities to be purchased as provided herein.
(b) The Initial Purchaser has advised the Company that it
proposes to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. The Initial
Purchaser represents and warrants to, and agrees with, the Company that (i) it
is purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and will not solicit offers for, or offer to sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (iii) it has solicited and will solicit offers for the
Securities only from, and has offered or sold and will offer, sell or deliver
the Securities, at any time prior to the completion of its distribution of the
Securities, only (A) within the United States to persons whom it reasonably
believes to be qualified institutional
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buyers ("Qualified Institutional Buyers") as defined in Rule 144A, or if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
it that each such account is a Qualified Institutional Buyer to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A and
in each case, in transactions in accordance with Rule 144A and (B) outside the
United States to persons other than U.S. persons in reliance on Regulation S.
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, the Initial Purchaser represents, warrants and agrees
that:
(i) the Securities have not been registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except pursuant
to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act;
(ii) the Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of its
distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act;
(iii) neither the Initial Purchaser nor any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts as such term is defined in
Regulation S with respect to the Securities, and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S;
(iv) at or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."; and
(v) it has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of
the Securities, except with its affiliates or with the prior written
consent of the Company.
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Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) The Initial Purchaser represents, warrants and agrees that
(i) it has not offered or sold and prior to the date six months after the
Closing Date will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 and the Public Offers of Securities Regulations 1995 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(e) The Initial Purchaser agrees that, prior to or
simultaneously with the confirmation of sale by it to any purchaser of any of
the Securities purchased by the Initial Purchaser from the Company pursuant
hereto, the Initial Purchaser shall furnish to that purchaser a copy of the
Offering Memorandum (and any amendment or supplement thereto that the Company
shall have furnished to the Initial Purchaser prior to the date of such
confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Sections 5(c) and (d), counsel
for the Company and for the Initial Purchaser, respectively, may rely upon the
accuracy of the representations and warranties of the Initial Purchaser and its
compliance with its agreements contained in this Section 2, and the Initial
Purchaser hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial
Purchaser may sell Securities to any of its affiliates and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of McGuire, Woods,
Battle & Boothe LLP, Richmond, Virginia, or at such other place as shall be
agreed upon by the Initial Purchaser and the Company, at 10:00 A.M., Richmond
time, on February 9, 1998, or at such other time or date, not later than seven
full business days thereafter, as shall be agreed upon by the Initial Purchaser
and the Company (such date and time of payment and delivery being referred to
herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchaser of the
certificate(s) evidencing the Securities. Time shall be of the essence, and
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delivery by the Company at the time and place specified pursuant to this
Agreement is a further condition of the obligations of the Initial Purchaser
hereunder. Upon delivery, the Securities shall be in global form, registered in
such names and in such denominations as the Initial Purchaser shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by the Initial Purchaser in Richmond,
Virginia at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with
the Initial Purchaser:
(a) at any time prior to the completion of the distribution by
the Initial Purchaser of the Securities, to advise the Initial
Purchaser promptly and, if requested, confirm such advice in writing,
of the happening of any event which makes any statement of a material
fact made in the Offering Memorandum untrue or which requires the
making of any additions to or changes in the Offering Memorandum (as
amended or supplemented from time to time) in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchaser promptly of
any order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance
of any such order preventing or suspending the use of the Preliminary
Offering Memorandum or the Offering Memorandum or suspending any such
qualification and, if any such suspension is issued, to obtain the
lifting thereof at the earliest possible time;
(b) at any time prior to the completion of the distribution by
the Initial Purchaser of the Securities, to furnish promptly to the
Initial Purchaser and counsel for the Initial Purchaser, without
charge, as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum (and any amendments or supplements thereto) as may
be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to the Initial Purchaser
and counsel for the Initial Purchaser and not to effect any such
amendment or supplement to which the Initial Purchaser shall reasonably
object by notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for the Initial Purchaser or counsel for the Company, to amend or
supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading,
13
or if it is necessary to amend or supplement the Offering Memorandum to
comply with applicable law, to promptly prepare such amendment or
supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for so long as the Securities are outstanding, to furnish
to the Initial Purchaser copies of any annual reports, quarterly
reports and current reports filed by the Company with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to the Trustee or to
the holders of the Securities pursuant to the Indenture or the Exchange
Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchaser may reasonably request to qualify the Securities for
offering and sale by the Initial Purchaser under the securities or Blue
Sky laws of such jurisdictions as the Initial Purchaser may designate
and to continue such qualifications in effect for so long as required
for the resale of the Securities; and to arrange for the determination
of the eligibility for investment of the Securities under the laws of
such jurisdictions as the Initial Purchaser may reasonably request;
provided that neither the Company nor any of its subsidiaries shall be
obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to file a general consent to service of
process in any jurisdiction or subject itself to taxation in excess of
a nominal dollar amount in any such jurisdiction where it is not then
so subject;
(h) to assist the Initial Purchaser in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through The Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
14
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
(k) for a period of 45 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities with a maturity greater than one
year issued or guaranteed by the Company or any of its Subsidiaries
(other than the Securities, the Exchange Securities or under the
Revolving Credit Facilities (as defined in the Offering Memorandum))
without the prior written consent of the Initial Purchaser;
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchaser, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment Company,
unit investment trust or face- amount certificate Company that is or is
required to be registered under Section 8 of the Investment Company
Act, and not to be or become, or be or become owned by, a closed-end
investment Company required to be registered, but not registered
thereunder;
(n) in connection with the offering of the Securities, until
the Initial Purchaser shall have notified the Company of the completion
of the resale of the Securities, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to,
either alone or with one or more other persons, bid for or purchase,
for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent active trading in or of raising the price of the
Securities;
15
(o) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchaser;
(p) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its reasonable best efforts to
satisfy all conditions precedent on its part to the delivery of the
Securities;
(q) to not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture;
(r) to not take any action prior to the Closing Date which
would in the Company's reasonable judgment require the Offering
Memorandum to be amended or supplemented pursuant to Section 4(d);
(s) prior to the Closing Date, not to issue any press release
or other public communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the Initial Purchaser is notified), without the prior written
consent of the Initial Purchaser, which consent may not be unreasonably
withheld, unless in the judgment of the Company and its counsel, and
after notification to the Initial Purchaser, such press release or
communication is required by law; and
(t) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder are subject to the accuracy, on
and as of the date hereof and the Closing Date, of the representations and
warranties of the Company contained herein, to the accuracy of the statements of
the Company and its officers made in any certificates delivered pursuant hereto,
to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchaser may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no
proceedings for that purpose shall have been commenced or shall be
pending or threatened.
16
(b) All requisite corporate proceedings and other legal
matters incident to the authorization, form and validity of each of the
Transaction Documents and the Offering Memorandum, and all other legal
matters relating to the Transaction Documents and the transactions
contemplated thereby, shall be satisfactory in all material respects to
the Initial Purchaser, and the Company shall have furnished to the
Initial Purchaser all documents and information that it or its counsel
may reasonably request to enable them to pass upon such matters.
(c) McGuire, Woods, Battle & Boothe LLP shall have furnished
to the Initial Purchaser their written opinion, as counsel to the
Company, addressed to the Initial Purchaser and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial Purchaser,
substantially to the effect set forth in Annex B hereto.
(d) The Initial Purchaser shall have received from Simpson
Thacher & Bartlett, counsel for the Initial Purchaser, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchaser may reasonably require, and the Company shall have
furnished to such counsel such documents and information as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Initial Purchaser
a letter (the "Initial Letter") of Arthur Andersen, addressed to the
Initial Purchaser and dated the date hereof, in form and substance
reasonably satisfactory in all material respects to the Initial
Purchaser and counsel for the Initial Purchaser.
(f) The Company shall have furnished to the Initial Purchaser
a letter (the "Bring-Down Letter") of Arthur Andersen, addressed to the
Initial Purchaser and dated the Closing Date (i) confirming that they
are independent public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder,
(ii) stating, as of the date of the Bring-Down Letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to the
date of the Bring-Down Letter), that the conclusions and findings of
such accountants with respect to the financial information and other
matters covered by the Initial Letter are accurate and (iii) confirming
in all material respects the conclusions and findings set forth in the
Initial Letter.
(g) The Company shall have furnished to the Initial Purchaser
a certificate, dated the Closing Date, of its Vice President, Secretary
and Treasurer, and its Vice President and Controller stating that (A)
such officers have carefully examined the Offering Memorandum, (B) in
their opinion, the Offering Memorandum, as of its date, did not include
any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and since the date of the
Offering Memorandum, no event has occurred which should
17
have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or
supplemented) would not include any untrue statement of a material fact
and would not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
and (C) as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct in all material
respects, the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder on or
prior to the Closing Date, and subsequent to the date of the most
recent financial statements contained in the Offering Memorandum, there
has been no material adverse change in the financial position or
results of operation of the Company or any of its subsidiaries, or any
change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole, except as set forth in the Offering Memorandum.
(h) The Initial Purchaser shall have received a counterpart of
the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company.
(i) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(j) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(k) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchaser shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchaser reasonably in advance of the Closing
Date.
(l) There shall not have occurred any invalidation of Rule
144A or Regulation S under the Securities Act by any court or any
withdrawal or proposed withdrawal of any rule or regulation under the
Securities Act or the Exchange Act by the Commission or any amendment
or proposed amendment thereof by the Commission which in the reasonable
judgment of the Initial Purchaser would materially impair the ability
of the Initial Purchaser to purchase, hold or effect resales of the
Securities contemplated hereby.
(m) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto),
there shall not have been any change in the capital stock or long-term
debt or any change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise),
18
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, the effect of which, in any such case
described above, is, in the reasonable judgment of the Initial
Purchaser, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(o) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities or preferred
stock by any "nationally recognized statistical rating organization",
as such term is defined by the Commission for purposes of Rule
436(g)(2) of the rules and regulations of the Commission under the
Securities Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its
rating of the Securities or any of the Company's other debt securities
or preferred stock.
(p) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Company on any exchange or in the
over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv),
is, in the reasonable judgment of the Initial Purchaser, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or the delivery of the Securities on the terms and in the
manner contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to Simpson Thacher & Bartlett.
19
6. Termination. The obligations of the Initial Purchaser
hereunder may be terminated by the Initial Purchaser, in its sole absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(l), (m), (n), (o) or (p) shall have occurred and be
continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason other than by reason of a default by the Initial Purchaser or (c) the
Initial Purchaser shall decline to purchase the Securities for any reason
permitted under this Agreement, the Company shall reimburse the Initial
Purchaser for such out-of-pocket expenses (including reasonable fees and
disbursements of counsel) as shall have been reasonably incurred by the Initial
Purchaser in connection with this Agreement and the proposed purchase and resale
of the Securities.
8. Indemnification. (a) The Company shall indemnify and hold
harmless the Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(a) and
Section 9 as an Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which the Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum or in any amendment or supplement thereto or in any
information provided by the Company pursuant to Section 4(e) or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse the Initial Purchaser promptly upon demand for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Initial Purchaser's Information; and
provided, further, that with respect to any such untrue statement in or omission
from the Preliminary Offering Memorandum, the indemnity agreement contained in
this Section 8(a) shall not inure to the benefit of the Initial Purchaser to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by the Initial Purchaser and any such
loss, claim, damage, liability or action of or with respect to it results from
the fact that both (A) a copy of the Offering Memorandum was not sent or given
to such person at or prior to the written confirmation of the sale of such
Securities to such person and (B) the untrue statement in or omission from
20
the Preliminary Offering Memorandum was corrected in the Offering Memorandum
unless, in either case, such failure to deliver the Offering Memorandum was a
result of non-compliance by the Company with Section 4(b).
(b) The Initial Purchaser shall indemnify and hold harmless
the Company, its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(b) and Section 9 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any Initial
Purchaser's Information, and shall reimburse the Company promptly upon demand
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
21
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to no more than one local counsel in any jurisdiction) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceedings.
The obligations of the Company and the Initial Purchaser in
this Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other from the offering of the Securities or (ii) if
the allocation provided by clause (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 (i) above but also the relative fault of the Company on
the one hand and the Initial Purchaser on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits
22
received by the Company on the one hand and the Initial Purchaser on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Company,
on the one hand, and the total discounts and commissions received by the Initial
Purchaser with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault 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 the
Company or information supplied by the Company on the one hand or to any Initial
Purchaser's Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omissions. The Company and the Initial Purchaser agree
that it would not be just and equitable if contributions pursuant to this
Section 9 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 9 shall be deemed to include, for purposes of this Section
9, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 9, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by the Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which it has otherwise paid or become liable to pay by
reason of any 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchaser, the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company and
the Initial Purchaser and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 10, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. Expenses. The Company agrees with the Initial Purchaser to
pay (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum and any amendments or supplements
thereto; (c) the costs of reproducing and distributing each of the Transaction
Documents; (d) the costs incident to the preparation, printing and delivery of
the certificates evidencing the Securities, including stamp duties and
23
transfer taxes, if any, payable upon issuance of the Securities; (e) the fees
and expenses of the Company's counsel and independent accountants; (f) the
reasonable fees and expenses of qualifying the Securities under the securities
laws of the several jurisdictions as provided in Section 4(g) and of preparing,
printing and distributing Blue Sky Memoranda (including related fees and
expenses of counsel for the Initial Purchaser); (g) any fees charged by rating
agencies for rating the Securities; (h) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); (i) all expenses and application fees incurred in connection with the
application for the inclusion of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by DTC; and (j) all other
costs and expenses incident to the performance of the obligations of the Company
under this Agreement which are not otherwise specifically provided for in this
Section 11; provided, however, that except as provided in this Section 11 and
Section 7, the Initial Purchaser shall pay its own costs and expenses, including
the fees, disbursements and expenses of its counsel, its road-show costs and any
transfer taxes on the Securities that it may sell.
12. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Initial Purchaser contained in this Agreement or made by or on behalf of the
Company or the Initial Purchaser pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
13. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by
mail or telecopy transmission to Chase Securities Inc., 270 Park
Avenue, New York, New York 10017, Attention: Mr. Gerry Murray
(telecopier no.: (212) 270-0994); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the
Offering Memorandum, Attention: Mr. Aaron D. Trub, Vice President,
Secretary and Treasurer (telecopier no.: (757) 365-3017), with a copy
to Robert L. Burrus, Jr., Esq., McGuire, Woods, Battle & Boothe LLP
(telecopier no.: (804) 775-1061);
provided that any notice to the Initial Purchaser pursuant to Section 8(c) shall
also be delivered or sent by mail to the Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made by the Initial Purchaser.
14. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
and commercial
24
banks in New York, New York and Richmond, Virginia are open for trading, (b) the
term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act
and (c) except where otherwise expressly provided, the term "affiliate" has the
meaning set forth in Rule 405 under the Securities Act.
15. Initial Purchaser's Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchaser's Information consists solely of the following information in the
Preliminary Offering Memorandum and the Offering Memorandum: (i) the last
paragraph on the front cover page concerning the terms of the offering by the
Initial Purchaser; (ii) the legend on page 3 concerning over-allotment and
trading activities by the Initial Purchaser; and (iii) the statements concerning
the Initial Purchaser contained in the third, fifth, seventh, ninth, twelfth and
thirteenth paragraphs, and the second sentence of the fourth paragraph under the
heading "Plan of Distribution".
16. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed agreement, counterparts
shall each be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
18. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto (it being understood that the successful delivery of and payment
for the Securities shall constitute an effective waiver of any outstanding
pre-closing condition contained in Section 5 hereof, known to the Initial
Purchaser on the Closing Date).
19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the Initial
Purchaser in accordance with its terms.
Very truly yours,
SMITHFIELD FOODS, INC.
By /s/ C. Larry Pope
------------------------
Name: C. Larry Pope
Title: Vice President &
Controller
Accepted:
CHASE SECURITIES INC.
By /s/ Gerard J. Murray
---------------------------
Authorized Signatory
Address for notices pursuant to Section 8(c):
1 Chase Plaza, 25th floor
New York, New York 10081
Attention: Legal Department
SCHEDULE I
SUBSIDIARIES OF THE COMPANY
The Smithfield Packing Company, Incorporated
John Morrell & Co.
Gwaltney of Smithfield, Ltd.
Patrick Cudahy Incorporated
Lykes Meat Group, Inc.
Brown's of Carolina, Inc.
ANNEX A
[Form of Exchange and Registration Rights Agreement]
ANNEX B
[Form of Opinion of Counsel for the Company]
McGuire, Woods, Battle & Boothe LLP shall have furnished to
the Initial Purchaser their written opinion, as counsel to the Company,
addressed to the Initial Purchaser and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchaser, substantially to the
effect set forth below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business
requires such qualification except to the extent that the failure so to
qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries taken as a whole, and has all
corporate power and authority necessary to own or hold its properties
and to conduct its businesses substantially as described in the
Offering Memorandum;
(ii) the Company has an authorized capitalization as set
forth in the Offering Memorandum, and all of the outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; the capital stock of the
Company conforms in all material respects to the description thereof
contained in the Offering Memorandum and the shareholders of the
Company have no preemptive rights;
(iii) each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except to the extent that the failure so to qualify or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of each of the Subsidiaries have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for the shares owned by Ronald G. Brown and
comprising 14% of the oustanding common stock of Brown's of Carolina,
Inc.) are owned directly or indirectly by the Company, free and clear
of all perfected liens, encumbrances, equities or claims and to such
counsel's knowledge any other liens, encumbrances, equities or claims;
(iv) the Purchase Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company enforceable against
the Company in accordance with its terms, subject
2
to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law); provided, however,
that such counsel does not opine as to the enforceability against the
Company of any rights to indemnification or contribution provided for
therein;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in
equity or at law);
(vii) the Securities have been duly authorized, executed and
issued by the Company and, assuming due authentication thereof by the
Trustee and upon payment and delivery in accordance with the Purchase
Agreement, will constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law);
(viii) the Exchange Securities have been duly authorized by
the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and contemplated by the
Registration Rights Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law);
(ix) each Transaction Document conforms in all material
respects to the respective descriptions thereof contained in the
Offering Memorandum;
(x) the execution, delivery and performance by the Company
of its obligations under each of the Transaction Documents, the
issuance, authentication, sale and delivery of the Securities and
compliance by the Company with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or
instrument, in each case, known to such counsel, to which the 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 the property or assets of
the Company or any of its subsidiaries is subject, which breach,
violation or default could reasonably be expected to have a material
adverse effect on the Company and
3
its subsidiaries taken as a whole, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or
any statute, judgment, order, decree, rule or regulation known to such
counsel of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets (other than the securities and Blue Sky
laws of the various states, as to which such counsel expresses no
opinion); and no consent, approval, authorization, order, registration
or qualification of or with, any such court or governmental agency or
body is required for the execution, delivery and performance by the
Company of each of the Transaction Documents, the issuance,
authentication, sale and delivery of the Securities and compliance by
the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, registrations or qualifications
(i) which have been obtained or made prior to the Closing Date, (ii) as
may be required under state securities and Blue Sky laws and (iii) as
may be required to be obtained or made under the Securities Act and
applicable state securities laws as contemplated by the Registration
Rights Agreement;
(xi) other than as set forth in the Offering Memorandum,
nothing has come to such counsel's attention that would lead them to
believe that there are any legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject,
which (A) singularly or in the aggregate, if determined adversely to
the Company or any of its subsidiaries, could reasonably be expected to
have a material adverse effect on the Company and its subsidiaries
taken as a whole or (B) questions the validity or enforceability of any
of the Transaction Documents or any action taken or to be taken
pursuant thereto; and nothing has come to their attention that would
lead them to believe that any such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xii) to our knowledge neither the Company nor any of its
Subsidiaries is (A) in violation of its charter or by-laws, (B) in
default, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (C) in violation of
any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject, which default under
clause (B) or violation under clause (C) could reasonably be expected
to have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(xiii) assuming that the Securities are offered and sold in
the manner contemplated by, and in accordance with, this Agreement and
the Offering Memorandum, no registration of the Securities under the
Securities Act or qualification of the Indenture under the Trust
Indenture Act is required in connection with the issuance and sale of
the Securities by the Company and the offer, resale and delivery of the
Securities by the Initial Purchaser; and
4
(xiv) the documents incorporated by reference or deemed to
be incorporated by reference in the Offering Memorandum (collectively,
the "Exchange Act Documents") complied as to form when filed in all
material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except
that in each case such counsel need express no opinion with the respect
to the financial statements or other financial data contained in or
incorporated by reference in or omitted from the Exchange Act
Documents.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of Arthur Andersen LLP, independent auditors for the Company,
the Initial Purchaser and counsel for the Initial Purchaser, at which the
contents of the Preliminary Offering Memorandum and the Offering Memorandum and
any amendment thereof or supplement thereto and related matters were discussed,
and, although they have not undertaken to investigate or verify independently,
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Preliminary Offering Memorandum and the
Offering Memorandum or any amendment thereof or supplement thereto (except as
expressly stated in paragraph (ix) above), no facts have come to such counsel's
attention which would lead them to believe that the Offering Memorandum and any
amendment thereof or supplement thereto as of its date (other than the
historical, pro forma or other financial statements, financial information and
financial data and statistical information and statistical data included or
incorporated by reference therein, in each case as to which no opinion need be
given) contained any untrue statement of material fact or omitted to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or that the Offering
Memorandum and any amendment thereof or supplement thereto at the date of such
opinion (other than the historical, pro forma or other financial statements,
financial information and financial data, and statistical information and
statistical data included or incorporated by reference therein, in each case as
to which no opinion need be given) includes any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may (A) rely in
respect of matters of fact upon certificates of the Company and of executive
officers of the Company and its subsidiaries and upon information obtained from
public officials and other sources believed by such counsel to be responsible,
(B) state that their opinion is limited to the laws of the Commonwealth of
Virginia, the General Corporation Law of the State of Delaware and the federal
laws of the United States, (C) rely, insofar as laws other than the laws of the
Commonwealth of Virginia, the General Corporation Law of the State of Delaware
and the federal laws of the United States are concerned, solely on the opinions
of local counsel (provided that such counsel shall state that they believe that
both the Initial Purchaser and they are justified in relying upon such opinions)
and may state that their opinion is subject to the same qualifications and
limitations expressed in such opinions, (D) rely in respect of the opinions
expressed in clause (iii) upon reports of the Uniform Commercial Code search
services and (E) make other customary and reasonable assumptions.
5
Such opinion shall also state that the opinion is being
rendered to the Initial Purchaser pursuant to Section 5(c) of this Agreement and
that such opinion may not be relied upon by the Initial Purchaser for any other
purpose, or relied upon by, or furnished to, any other person, firm or
corporation without such counsel's prior consent, except that the law firm of
Simpson Thacher & Bartlett may rely upon such opinion with respect to matters of
the laws of the Commonwealth of Virginia in connection with the delivery of its
opinions pursuant to Section 5(d) of this Agreement and the Indenture.