EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
___________ __, ____, by and between SMITHFIELD FOODS, INC., a Virginia
corporation (the "Company") and each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (each individually an "Investor" and
collectively "the Investors").
W I T N E S S E T H :
WHEREAS, the Company and the Investors are parties to an Acquisition
Agreement and Plan of Reorganization dated __________ __, 1999 (the "Acquisition
Agreement"); and
WHEREAS, upon the closing of the transactions contemplated thereby,
such Investors will then hold the respective numbers of shares of Common Stock
(as defined below) indicated on Schedule 1 hereto; and
WHEREAS, in connection with the Acquisition Agreement and the
transactions contemplated thereby, the parties hereto are also entering into an
Escrow Agreement and an Agreement with Shareholders (as defined below);
NOW, THEREFORE, for good and valuable consideration, the delivery and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following capitalized terms
shall have the meanings ascribed to them below:
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly controls, is controlled by or is under common control
with such person. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract or otherwise.
"Agreement with Shareholders" means the Agreement with
Shareholders dated the date hereof among the parties hereto.
"Common Stock" means the Common Stock, par value $.50 per
share, of the Company.
"Escrow Agreement" means the Escrow Agreement dated the date
hereof among the parties hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means, as of any time, a signatory hereto who is a
registered holder and beneficial owner of Registrable Securities.
"Person" means an individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement or any other amendments and supplements
to such prospectus, including without limitation any preliminary prospectus, any
pre-effective or post-effective amendment and all material incorporated by
reference in any prospectus.
"Registrable Securities" means (i) the shares of Common Stock
held on the date hereof by each of the Investors as indicated on Schedule 1
hereto, respectively, so long as such shares are continuously held by each such
Investor thereafter (including for purposes of this definition the numbers of
such shares initially held in escrow and eventually delivered to such Investors,
and excluding any such escrowed shares returned to the Company, in each case
pursuant to the terms of the Escrow Agreement and the Acquisition Agreement),
plus any further shares of Common Stock issued to such Investor pursuant to
post-closing adjustments effected in accordance with the Acquisition Agreement,
in each case so long as continuously held by such Investor thereafter, and (ii)
any securities issued or issuable in respect of or in exchange for any
Registrable Securities referred to in clause (i) by way of a stock dividend or
other distribution, stock split, reverse stock split or other combination of
shares, recapitalization, reclassification, merger, consolidation or exchange
offer and continuously held by such Investor thereafter. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such Registration Statement, (ii) such
securities shall have been sold or otherwise transferred, or (iii) such
securities shall have ceased to be outstanding.
"Registration Expenses" has the meaning set forth in Section
2.3.
2
"Registration Statement" means any registration statement of
the Company which covers Registrable Securities pursuant to the provisions of
this Agreement, all amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
ARTICLE II.
REGISTRATION RIGHTS
2.1 Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time during the
five-year period commencing on the date hereof, the Company proposes to register
any of its Common Stock under the Securities Act, for sale for its own account
for cash (other than a registration on Form S-4 or Form S-8, or any successor or
similar forms), in a manner that would permit registration of Registrable
Securities for cash sale to the public under the Securities Act, it will each
such time promptly give written notice to all Holders of Registrable Securities
of its intention to do so, of the registration form of the SEC that has been
selected by the Company and of the rights of Holders under this Section 2.1 (the
"Section 2.1 Notice"). The Company will use reasonable best efforts to include
in the proposed registration all Registrable Securities that the Company is
requested in writing, within 10 days after the Section 2.1 Notice is given, to
register by the Holders thereof (up to a maximum number of shares per Holder in
any twelve month period not in excess of 10% of the number of Registrable
Securities held by such Holder on the date hereof as indicated in Schedule 1
hereto), so long as an aggregate of not less than 500,000 shares of Common Stock
which are Registrable Securities are so requested by Holders to be included in
the proposed registration; provided, however, that (i) if, at any time after
giving written notice of its intention to register any equity securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such equity securities, the Company may, at its election, give written
notice of such determination to all Holders of Registrable Securities that duly
requested such registration, and thereupon shall be relieved of its obligation
to register any Registrable Securities in connection with such abandoned
registration and (ii) in case of a determination by the Company to delay
registration of its equity securities, the Company shall be permitted to delay
the registration of such Registrable Securities for the same period as the delay
in registering such other equity securities.
3
(b) Priority in Incidental Registration. Notwithstanding anything
to the contrary contained in this Agreement, if the managing underwriter for a
registration pursuant to this Section 2.1 that involves an underwritten offering
shall advise the Company that, in its reasonable opinion, the inclusion of the
amount and kind of Registrable Securities to be sold for the account of Holders
would adversely affect the success of the offering for the Company or any other
Person for whose account equity securities are to be sold, then the number of
Registrable Securities to be sold for the account of such Holders shall be
reduced (and may be reduced to zero) in accordance with the managing
underwriter's recommendation. In the event that the number of Registrable
Securities to be included in any registration is reduced (but not to zero), the
number of such Registrable Securities included in such registration shall be
allocated pro rata among all requesting Holders, on the basis of the relative
number of shares of such Registrable Securities each such Holder had requested
to be included in such registration. If, as a result of the proration provisions
of this paragraph (b) of this Section 2.1, any Holder shall not be entitled to
include all Registrable Securities in a registration pursuant to Section 2.1
that such Holder has requested be included, such Holder may elect to withdraw
its Registrable Securities from the registration by giving irrevocable notice
thereof to each other Holder and the Company (the "Withdrawal Notice");
provided, however, that such withdrawal election shall be irrevocable and, after
making a withdrawal election, a Holder shall no longer have any right to include
Registrable Securities in the registration as to which such withdrawal election
was made; provided, further, that the remaining Holders shall have the right, by
giving notice to the Company within 10 days of the date the Withdrawal Notice is
given, to increase the number of shares included in such registration on a pro
rata basis by an aggregate amount equal to the number of shares withdrawn
pursuant to the Withdrawal Notice, subject to the other terms of this Section
2.1. In a registration involving not only Holders but also other selling
shareholders, then in the event that the adjustments provided for in this
section shall be applied, they shall be applied to such Holders and to such
other selling shareholders alike.
(c) Merger, Consolidation, etc. Notwithstanding anything in this Section
2.1 to the contrary, Holders shall not have any right to include their
Registrable Securities in any distribution or registration of Common Stock by
the Company which is a result of or is conducted in connection with a proposed
or consummated merger, consolidation, acquisition, exchange offer,
recapitalization, other reorganization, dividend reinvestment plan, stock option
plan or other employee benefit plan, or any similar transaction having the same
effect.
2.2 Registration Procedures.
(a) The Company to Use Reasonable Best Efforts. In connection with the
Company's Piggyback Registration obligations pursuant to Section 2.1 hereof, the
Company shall use reasonable best efforts to effect such registrations to permit
the sale of such Registrable Securities in accordance with the intended method
or methods of disposition thereof, and pursuant thereto the Company shall use
reasonable best efforts:
4
(i) to prepare and file with the SEC within 90 days
after the Company's receipt of the appropriate registration
requests from Investors during the Section 2.1 Notice Period,
a Registration Statement on any form selected by the Company,
and to cause such Registration Statement to become effective
as soon as reasonably practicable and to remain continuously
effective for the time period required by this Agreement to
the extent permitted under applicable law; provided, however,
that nothing in this Agreement shall require the Company to
file or maintain any registration statement pursuant to "Rule
415" or "shelf" procedures;
(ii) to comply with the provisions of the Securities Act as
may be necessary to facilitate the disposition of all
Registrable Securities covered by such Registration Statement
during the applicable period in accordance with the intended
method or methods of disposition by the selling Holders
thereof set forth in such Registration Statement or such
Prospectus or Prospectus Supplement;
(iii) to notify the selling Holders and the managing
underwriters, if any, promptly if at any time (A) any
Prospectus, Registration Statement or amendment or supplement
thereto is filed, (B) any Registration Statement, or any post-
effective amendment thereto, becomes effective, (C) the SEC
requests any amendment or supplement to, or any additional
information in respect of, any Registration Statement or
Prospectus, (D) the SEC issues any stop order suspending the
effectiveness of a Registration Statement or initiates any
proceedings for that purpose, (E) the Company receives any
notice that the qualification of any Registrable Securities
for the sale in any jurisdiction has been suspended or that
any proceeding has been initiated for the purpose of
suspending such qualifications, or (F) any event occurs which
requires that any changes be made in such Registration
Statement or any related Prospectus so that such Registration
Statement or Prospectus will not contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading;
(iv) to make every reasonable best effort to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement, or the qualification of any
Registrable Securities for sale in any U.S. jurisdiction, as
soon as reasonably practicable;
(v) to furnish upon request to each selling Holder
and each managing underwriter, if any, one complete copy of
the Registration Statement or Registration Statements or any
post-effective amendment thereto, including all financial
statements and schedules thereto, all documents incorporated
therein by reference and all exhibits thereto (including
exhibits incorporated by reference);
5
(vi) to deliver to each selling Holder and each
underwriter, if any, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any
amendment or supplement thereto as such Persons may reasonably
request; and to consent to the use of such Prospectus or any
amendment or supplement thereto by each such selling Holder
and underwriter, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus,
amendment or supplement;
(vii) prior to any public offering of Registrable
Securities, to register or qualify, or to cooperate with the
selling Holders, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such U.S.
jurisdictions as may be reasonably requested by the Holders of
a majority of the Registrable Securities included in such
Registration Statement; provided, however, that the Company
will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of
process or taxation in any jurisdiction where it is not then
so subject;
(viii) to cooperate with the selling Holders and the
underwriters, if any, in the preparation and delivery of
certificates representing the Registrable Securities to be
sold, such certificates to be in such denominations and
registered in such names as such selling Holders or managing
underwriters may request at least two Business Days prior to
any sale of Registrable Securities represented by such
certificates;
(ix) upon the occurrence of any event described in
subclause (F) of clause (iii) of this paragraph (a), promptly
to prepare and file a supplement or post-effective amendment
to the applicable Registration Statement or Prospectus or any
document incorporated therein by reference, and any other
required document, so that such Registration Statement and
Prospectus will not thereafter contain an untrue statement of
a material fact or omit to state any material fact necessary
to make the statement therein not misleading, and to cause
such supplement or post-effective amendment to be filed or be
effective as soon as reasonably practicable;
(x) to take all other actions in connection therewith as are
reasonably necessary or desirable in order to facilitate the
disposition of the Registrable Securities included in such
Registration Statement and, in the case of an underwritten
offering, to enter into an underwriting agreement in customary
form, including, without limitation, customary indemnities;
6
(xi) to comply with all applicable rules and regulations of
the SEC relating to such Registration Statement and the
distribution of the securities being offered or otherwise
necessary in order to perform the Company's obligations under
this paragraph (a);
(xii) to cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc.
(the "NASD"); and
(xiii) to take all other reasonable steps necessary and
appropriate to effect such registration in the manner
contemplated by this Agreement.
(b) Holders' Obligation to Furnish Information. The Company
may require each Holder of Registrable Securities as to which any registration
is being effected to furnish to the Company such information regarding such
Holder and the distribution of such securities as the Company may from time to
time reasonably request. If the failure by a Holder of Registrable Securities to
furnish such information promptly would prevent (i) the Registration Statement
relating to such registration from being declared effective by the SEC or (ii)
members of the NASD from participating in the distribution of the Registrable
Securities, the Company may exclude such Holder's Registrable Securities from
such registration.
(c) Suspension of Sales Pending Amendment of Prospectus. Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in subclause (C), (D), (E) or (F) of clause
(iii) of paragraph (a) of this Section 2.2, such Holder will forthwith forego or
delay the disposition of any Registrable Securities covered by such Registration
Statement or Prospectus until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by clause (ix) of such paragraph
(a), or until it is advised in writing by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any additional
or supplemental filings which are incorporated by reference in such Prospectus,
and, if so directed by the Company, such Holder will deliver to the Company (at
the Company's expense, except as hereinafter provided in this paragraph (c)) all
copies, other than permanent file copies, then in such Holder's possession of
any Prospectus covering such Registrable Securities. Each Holder of Registrable
Securities agrees that such Holder will, as expeditiously as possible, notify
the Company at any time when a Prospectus relating to a Registration Statement
covering such Holder's Registrable Securities is required to be delivered under
the Securities Act, of the happening of any event of the kind described in
subclause (F) of clause (iii) of paragraph (a) of this Section 2.2 as a result
of any information provided by such Holder for inclusion in such Prospectus
included in such Registration Statement and, at the request of the Company,
promptly prepare and furnish to it such information as may be necessary so that,
after incorporation into a supplement or amendment of such Prospectus as
7
thereafter delivered to the purchasers of such Registrable Securities, the
information provided by such Holder shall not include an untrue statement of a
material fact or a misstatement of a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading, and in such event the expenses of
delivery to the Company of copies of any Prospectus in such Holder's possession
will be at the expense of the Holder giving such notice pursuant to this
sentence.
2.3 Registration Expenses.
With respect to each Piggyback Registration, the Company will
pay all expenses incident to the Company's performance of or compliance with its
obligations under this Agreement with respect thereto, including without
limitation all (i) registration and filing fees, (ii) fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications or
registrations (or the obtaining of exemptions therefrom) of the Registrable
Securities)), (iii) printing expenses (including expenses of printing
Prospectuses), (iv) messenger and delivery expenses, (v) internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (vi) reasonable fees and
disbursements of the Company's counsel and its independent certified public
accountants (including the expenses of any "comfort" letters required by or
incident to such performance or compliance), (vii) securities act liability
insurance (if the Company elects to obtain such insurance), (viii) reasonable
fees and expenses of any special experts retained by the Company in connection
with any registration hereunder, and (ix) reasonable fees and expenses of other
Persons retained by the Company (all such expenses being herein referred to as
"Registration Expenses"); provided, however, the selling Holders shall be
separately responsible for the fees and disbursements of their counsel or
respective counsels. The following costs and expenses shall be excluded from the
term "Registration Expenses": (1) all underwriting discounts and commissions,
(2) all applicable transfer taxes, if any, (3) the fees and disbursements of
counsel retained by the selling Holders, (4) certain specified registration
costs and expenses as provided in the last sentence of paragraph (c) of Section
2.2 hereof, and (5) except as provided in the first sentence of this Section
2.3, all other costs, fees and expenses incurred by any Holder in connection
with the exercise of its registration rights hereunder (all of the amounts set
forth in this sentence to be borne by the selling Holders of any Registrable
Securities pro rata on the basis of the total number of Registrable Securities
being registered by such Holders).
2.4 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
Section 2.1 hereof, the Company will, and hereby does, indemnify and hold
harmless, to the extent permitted by law, the Holder of any Registrable
Securities covered by such Registration Statement, and if applicable its
directors, officers and agents or general and limited partners (and the
directors, officer and agents thereof),
8
each other Person who participates as an underwriter, if any, in the offering or
sale of such securities and each other Person, if any, who controls such Holder
or any such underwriter within the meaning of the Securities Act, against any
and all losses, claims, damages or liabilities, joint or several, and reasonable
out-of-pocket expenses (including any amounts paid in any settlement effected
with the Company's signed consent) to which such Holder or any such director,
officer, agent, general or limited partner, underwriter or controlling Person
may become subject under the Securities Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such securities were registered under the Securities Act
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary Prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the SEC any amendment thereof or supplement thereto), if
used prior to the effective date of such Registration Statement, or contained in
the Prospectus, together with the documents incorporated by reference therein
(as amended or supplemented if the Company shall have filed with the SEC any
amendment thereof or supplement thereto), or 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 the Company will reimburse such Holder
and each such director, officer, agent, general or limited partner, underwriter
and controlling Person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, however, that the Company
shall not be liable to any such Holder or any such director, officer, agent,
general or limited partner, underwriter or controlling Person in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendments thereof or supplement thereto
or in any such preliminary, final or summary Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any such Holder or any such director, officer, agent, general or limited
partner, underwriter or controlling Person, for use in the preparation thereof;
and provided further, that the Company will not be liable to any Person who
participates as an underwriter in any underwritten offering or sale of
Registrable Securities, or to any Person who is a selling Holder in any
non-underwritten offering or sale of Registrable Securities, or any other
Person, if any, who controls such underwriter or Holder within the meaning of
the Securities Act, under the indemnity agreement in this paragraph (a) of
Section 2.4 with respect to any preliminary Prospectus or the final Prospectus
(including any amended or supplemented preliminary or final Prospectus), as the
case may be, to the extent that any such loss, claim, damage or liability of
such underwriter, Holder or controlling Person results from the fact that such
underwriter or Holder sold Registrable Securities to a person to whom there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the final Prospectus or of the final Prospectus as then amended or
supplemented, whichever is most recent, if the Company had previously furnished
copies thereof to such underwriter or Holder and such final Prospectus, as then
9
amended or supplemented, had corrected any such misstatement or omission. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any such director, officer, agent,
general or limited partner, underwriter or controlling Person and shall survive
the transfer of such securities by such underwriter or Holder.
(b) Indemnification by the Selling Holders. In consideration
of the Company's including any Registrable Securities in any Registration
Statement filed in accordance with Section 2.1 hereof, the Holder of such
Registrable Securities and any underwriter shall be deemed to have agreed to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in paragraph (a) of this Section 2.4) the Company and its directors,
officers and agents and each person controlling the Company within the meaning
of the Securities Act and all other prospective selling Holders and if
applicable their directors, officers, agents, general and limited partners and
respective controlling Persons with respect to any statement or alleged
statement in or omission or alleged omission from such Registration Statement,
any preliminary, final or summary Prospectus contained therein, or any amendment
or supplement, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company or its representatives by or on behalf of such Holder
or underwriter for use in the preparation of such Registration Statement,
preliminary, final or summary Prospectus or amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any of the prospective sellers or any of
their respective directors, officers, agents, general or limited partners or
controlling Persons and shall survive the transfer of such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 2.4, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein (i) shall not relieve
the indemnifying party of its obligations under the preceding paragraphs of this
Section 2.4, except to the extent that the failure results in the forfeiture by
the indemnifying party of substantial rights and (ii) will not, in any event,
relieve the indemnifying party from any obligation to any indemnified party
other than the indemnification obligation provided in paragraph (a) or (b)
above. 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 of its choosing; provided, however, that if, in
10
any indemnified party's reasonable judgment, a conflict of interest between the
indemnified party and the indemnifying party exists in respect of such claim,
then such indemnified party shall have the right to participate in the defense
of such claim and to employ counsel reasonably satisfactory to the indemnifying
party at the indemnifying party's reasonable expense to represent such
indemnified party; provided, however, that if the indemnified party or parties
in such instance is or are Holder(s), then one such firm of attorneys shall be
selected by a majority of the indemnified parties based upon their respective
percentage ownership of Registrable Securities covered by such Registration
Statement; and provided further, that if, in the reasonable judgment of any
indemnified party, a conflict of interest between such indemnified party and any
other indemnified parties exists in respect of such claim, each such indemnified
party shall be entitled to one additional counsel reasonably satisfactory to the
indemnifying party and the indemnifying party shall be obligated to pay the
reasonable fees and expenses of such additional counsel or counsels. Once the
indemnifying party has assumed the defense of any claim, no indemnified party
will consent to entry of any judgment or enter into any settlement without the
indemnifying party's consent to such judgment or settlement.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 2.4 (with appropriate
modifications) shall be given by the Company and each selling Holder of
Registrable Securities with respect to any required registration or other
qualification of securities under any state securities and "blue sky" laws.
(e) Contribution. If the indemnification provided for in this
Section 2.4 is unavailable or insufficient to hold harmless an indemnified party
under paragraphs (a) or (b) of Section 2.4 of this Agreement, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, or damages or liabilities
referred to in paragraphs (a) or (b) of Section 2.4 in such proportion as is
appropriate to reflect the relative benefits received by and the relative fault
of the indemnifying party on the one hand and the indemnified party on the other
hand in connection with statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. 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
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statements or omission. The Company agrees, and
the Holders (in consideration of the Company's including any Registrable
Securities in any Registration Statement filed in accordance with Section 2.1
hereof) and any underwriter shall be deemed to have agreed, that it would not be
just and equitable if contributions pursuant to this paragraph (e) of Section
2.4 were to be determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the first sentence of this paragraph (e) of Section 2.4. The amount paid
by an indemnified party as a result of the losses, claims, and damages or
liabilities referred to in the first sentence of this paragraph (e) of Section
2.4 shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in paragraph (c) of Section
11
2.4 if the indemnifying party has assumed the defense of any such action in
accordance with the provisions thereof) which is the subject of this paragraph
(e) of Section 2.4. 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. Notwithstanding anything contained in this paragraph (e) of
Section 2.4 to the contrary, with respect to the offering to which the losses,
claims, damages or liabilities of the indemnified parties relate, (i) no Holder
who is an indemnifying party shall be required pursuant to this paragraph (e) of
Section 2.4 to contribute any amount in excess of the proceeds received by such
Holder from the sale of Registrable Securities and (ii) no underwriter who is an
indemnifying party shall be required to contribute any amount in excess of the
discounts and commissions received by such underwriter.
2.5 Rule 144.
The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder, and shall take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemptions provided by Rule 144 under the
Securities Act. Upon the request of any Holder, the Company shall deliver to
such Holder a written statement stating whether it has complied with such
information and requirements.
2.6 Underwritten Registrations.
(a) Selection of Underwriters. With respect to any Piggyback
registration which is to be an underwritten offering, the Company shall select
the underwriter or underwriters and determine the terms of such offering and
underwriting.
(b) Agreements of Selling Holders. No Holder shall sell any of
its Registrable Securities in any underwritten offering pursuant to a
registration hereunder unless such Holder (i) agrees to sell such Registrable
Securities on the basis provided in any underwriting agreement or other
underwriting arrangements approved by the Company and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting agreements or other underwriting arrangements. In connection with
any Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to the Company in writing such
information and affidavits with respect to such Holders as the Company
reasonably requests for use in connection with any such Registration Statement
or Prospectus.
12
2.7 Holdback Agreements.
(a) Restrictions on Public Sales by Holders. To the extent not
inconsistent with applicable law, each Holder of Registrable Securities whose
securities are covered by a Registration Statement filed pursuant to Section 2.1
hereof who is timely notified in writing by the managing underwriter or
underwriters of an underwritten public offering shall not effect (other than as
part of such underwritten offering) any public sale or distribution (including a
sale pursuant to Rule 144) of any issue being registered, or any securities of
the Company similar to any such issue, or any securities of the Company
convertible into or exchangeable or exercisable for any such issue or any
similar issue, during the 10-day period prior to the effective date of the
applicable Registration Statement, or during the period beginning on such
effective date and ending 90 days after such date, except as part of such
registration.
(b) Restrictions on Public Sales by the Company. The Company
shall not effect any public sale or distribution of any issue of the same class
or series as Registrable Securities being registered in an underwritten offering
(other than pursuant to an employee stock option, stock purchase, stock bonus or
similar plan, pursuant to a merger, exchange offer or other transaction
comparable to or of the type specified in Rule 145(a) under the Securities Act),
or any securities of the Company similar to any such issue or any securities of
the Company convertible into or exchangeable or exercisable for any such issue,
during the 10-day period prior to the effective date of the applicable
Registration Statement, or during the period beginning on such effective date
and ending 30 days after such effective date, except as part of such
registration.
2.8 Controlling Agreements.
Simultaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering the Escrow Agreement
and an Agreement with Shareholders, each as contemplated by the Acquisition
Agreement. The terms of such other agreements, to the extent of any conflict
with the terms herein, shall control and govern over the terms of this
Agreement.
2.9 Adjustments.
References to shares of Common Stock herein are subject to
adjustment in the event of any stock split, combination, subdivision, exchange
or stock dividend with respect to the Common Stock (for instance, upon a 2-for-1
stock split, the 500,000 share minimum stated in Section 2.1(b) and Section
2.2(a) would become 1,000,000 share minimum), it being understood that the
Company will not effect or permit to occur any such event which would materially
adversely affect the ability of the Holders of Registrable Securities to include
such Registrable Securities in any registration under Section 2.1 or the
marketability of such Registrable Securities under any such registration.
13
ARTICLE III.
MISCELLANEOUS
3.1 Amendment and Waivers. This Agreement may be amended, and the Company or a
Holder may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company or the Holder shall have
obtained the written consent to such amendment, action or omission to act, of
the Company and the Holders of at least a majority of the Registrable Securities
then outstanding (and, in the case of any amendment, action or omission to act
that adversely affects any Holder or group of Holders differently from any of
the other Holders, the written consent of such Holder or a majority of the
Registrable Securities held by such group of Holders). Holders shall be bound
from and after the date of receipt of a written notice from the Company setting
forth such amendment or waiver by any consent authorized by this Section 3.1,
whether or not the certificates representing such Registrable Securities shall
have been marked to indicate such consent.
3.2 Successors, Assigns and Transferees. This Agreement may not be transferred
or assigned by the Company or by any Holder, other than by operation of law.
This Agreement shall be binding upon and shall inure to the benefit of the
Holders and the Company and their permitted successors, assigns and transferees.
3.3 Integration. Subject to Section 2.8, this Agreement and the documents
referred to herein or delivered pursuant hereto that form a part hereof contain
the entire understanding of the parties thereto with respect to its subject
matter; there are no restrictions, agreements, promises, rights,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein; and this
Agreement supersedes all prior agreements and understandings of the parties
hereto with respect to its subject matter.
3.4 Notices. All notices required to be delivered hereunder shall be in writing
and shall be deemed to have been given if (i) delivered personally or by
documented courier or delivery service, (ii) transmitted by facsimile during
normal business hours or (iii) mailed by registered or certified mail (return
receipt requested and postage prepaid) to the following listed persons at the
addresses and facsimile numbers specified below, or to such other persons,
addresses or facsimile numbers as a party entitled to notice shall give, in the
manner hereinabove described, to the others entitled to notice:
if to the Company, to:
Smithfield Foods, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
14
with copies to:
McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Holders, to their respective addresses,
initially those set forth below:
[To be specified]
with a copy to:
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Law Firm PLLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Reef ▇. ▇▇▇▇, ▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
15
If given personally or by documented courier or delivery service, or transmitted
by facsimile, a notice shall be deemed to have been given when it is received.
If given by mail, it shall be deemed to have been given on the third business
day following the day on which it was posted.
3.5 Termination. This Agreement will terminate upon the earliest to occur of (i)
the first date that there are no Holders, (ii) the first date that there are
fewer than 500,000 Registrable Securities in aggregate or (iii) the fifth
anniversary of the date hereof.
3.6 Descriptive Headings. The headings in this Agreement are for convenience of
reference only and shall not limit, expand or otherwise affect the meaning of
the terms contained herein.
3.7 Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the Company and the
Holders shall be enforceable to the fullest extent permitted by law.
3.8 Governing Law. This Agreement shall be governed by the internal law of the
Commonwealth of Virginia, without regard to principles of conflicts of law.
3.9 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument. Any party's
execution and delivery of this Agreement may be evidenced by physical delivery
or by telecopier, facsimile or other written communication thereof to the other
parties.
16
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
SMITHFIELD FOODS, INC.
By: __________________________
Name:
Title:
INVESTORS:
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
17
SCHEDULE 1
[This schedule will list each Investor and his/her shares
issued to him/her in connection with the acquisitions.]