-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XBZzlN3iya6DvgJG8awVmzwSVIhLxQY4SpNgxUumadzd80gCxg4gd85iVS9bIQw6 HMuYqJKUxIOPA4zo06DKHA== 0000950152-94-000054.txt : 19940131 0000950152-94-000054.hdr.sgml : 19940131 ACCESSION NUMBER: 0000950152-94-000054 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19940128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: 2011 IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 33 SEC FILE NUMBER: 033-51995 FILM NUMBER: 94503522 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848011 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 S-3/A 1 CHUQUITA BRANDS FORM S-3 1 THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-43946 ******************************************************************************** * * * * * AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1994. * * * * * ******************************************************************************** REGISTRATION NO. 33-51995 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION ------------------ AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ CHIQUITA BRANDS INTERNATIONAL, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) New Jersey 04-1923360 (STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.) ORGANIZATION)
250 East Fifth Street Cincinnati, Ohio 45202 (513) 784-8011 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) CHARLES R. MORGAN, Esq. Vice President, General Counsel and Secretary CHIQUITA BRANDS INTERNATIONAL, INC. 250 East Fifth Street Cincinnati, Ohio 45202 (513) 784-8332 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------ WITH COPIES TO: GARY L. SELLERS, Esq. Simpson Thacher & Bartlett 425 Lexington Avenue New York, New York 10017 ------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS DETERMINED IN LIGHT OF MARKET CONDITIONS AND OTHER FACTORS. ------------------ If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ ------------------ Pursuant to Rule 429 of the Rules under the 1933 Act, this Registration Statement contains a combined prospectus that also relates to a Registration Statement on Form S-3 No. 33-43946 (relating to an aggregate of $350,000,000 principal amount of Senior Debt Securities) previously filed by the registrant and declared effective on November 22, 1991. This Registration Statement constitutes Post-Effective Amendment No. 1 to Registration Statement No. 33-43946 with respect to the remaining $100,000,000 of unsold securities thereunder, and such Post-Effective Amendment shall hereafter become effective concurrently with the effectiveness of this Registration Statement and in accordance with Section 8(c) of the Securities Act of 1933. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 *************************************************************************** * * * SUBJECT TO COMPLETION * * * * PRELIMINARY PROSPECTUS DATED , 1994 * * * * Information contained herein is subject to completion or amendment. A * * registration statement relating to these securities has been filed * * with the Securities and Exchange Commission. These securities may not * * be sold nor may offers to buy be accepted prior to the time the * * registration statement becomes effective. This prospectus shall not * * constitute an offer to sell or the solicitation of an offer to buy * * nor shall there be any sale of these securities in any State in which * * such offer, solicitation or sale would be unlawful prior to * * registration or qualification under the securities laws of any such * * State. * * * *************************************************************************** PROSPECTUS [LOGO] $400,000,000 CHIQUITA BRANDS INTERNATIONAL, INC. DEBT SECURITIES PREFERRED STOCK COMMON STOCK ------------------ Chiquita Brands International, Inc. ("Chiquita" or the "Company") may offer from time to time (i) in one or more series unsecured debt securities, which may be either senior or subordinated debt securities (together, the "Debt Securities"), consisting of debentures, notes and/or other evidences of indebtedness; (ii) in one or more series shares of Non-Voting Cumulative Preferred Stock, par value $1.00 per share ("Preferred Stock"), and (iii) shares of its Capital Stock, par value $0.33 per share ("Common Stock") (the Debt Securities, Preferred Stock and Common Stock being collectively referred to as the "Securities"), or any combination of the foregoing, at an aggregate initial offering price not to exceed $400,000,000, at prices and on terms to be determined at or prior to the time of sale. Specific terms of the Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement ("Prospectus Supplement"), together with the terms of the offering of the Securities and the initial price and the net proceeds to Chiquita from the sale thereof. The Prospectus Supplement will set forth with regard to the particular Securities, without limitation, the following: (i) in the case of Debt Securities, the specific designation, aggregate principal amount, ranking as senior debt or subordinated debt, authorized denominations, maturity, rate (or method of calculation thereof) of interest and dates (or method of determination thereof) for payment thereof, and any exchangeability, conversion, redemption, prepayment or sinking fund provisions, (ii) in the case of Preferred Stock, the designation, number of shares, liquidation preference per share, initial public offering price, dividend rate (or method of calculation thereof), dates on which dividends shall be payable and dates from which dividends shall accrue, any redemption or sinking fund provisions, any conversion or exchange rights and any special voting or other special rights and (iii) in the case of Common Stock, the number of shares of Common Stock and the terms of the offering and sale thereof. The Prospectus Supplement will also contain information, where applicable, about certain Federal income tax considerations relating to, and any listing on a securities exchange of, the Securities covered by the Prospectus Supplement. The Securities may be offered for sale directly, through agents, to or through underwriters or dealers designated from time to time or through a combination of such methods. If agents of Chiquita or any underwriters or dealers are involved in the sale of the Securities the names of such agents, underwriters or dealers and any applicable commission or discounts will be set forth in the Prospectus Supplement. See "Plan of Distribution." SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ THE DATE OF THIS PROSPECTUS IS , 1994. 3 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. AVAILABLE INFORMATION Chiquita is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy and information statements and other information with the Securities and Exchange Commission (the "Commission"). Chiquita has filed with the Commission a Registration Statement on Form S-3 (together with all amendments and exhibits, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement and exhibits thereto, or amendments thereto, to which reference is hereby made. Such reports, proxy and information statements, Registration Statement and exhibits and other information filed by Chiquita may be inspected and, upon payment of the Commission's customary charges, copied at the public reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the Commission at Suite 1300, 7 World Trade Center, New York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Chiquita's Common Stock is listed on the New York, Boston and Pacific Stock Exchanges. Reports, proxy and information statements and other information concerning Chiquita may be inspected and copied at the Library of the New York Stock Exchange at 20 Broad Street, New York, New York; at the Secretary's Office of the Boston Stock Exchange at 1 Boston Place, Boston, Massachusetts; and at the Listing Department of the Pacific Stock Exchange at 301 Pine Street, San Francisco, California. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Chiquita will furnish, without charge, to any person to whom this Prospectus is delivered, upon such person's written or oral request, a copy of any and all of the information that has been incorporated by reference in the Registration Statement of which this Prospectus is a part (not including exhibits to such information unless such exhibits are specifically incorporated by reference into such information). Any such request should be directed to the Vice President, Corporate Affairs of Chiquita, 250 East Fifth Street, Cincinnati, Ohio 45202; telephone: (513) 784-6366. The Annual Report on Form 10-K for the year ended December 31, 1992 (which incorporates by reference certain information contained in the Company's 1992 Annual Report to Shareholders) (the "1992 10-K"), the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30, 1993 and September 30, 1993 (the "1993 Third Quarter 10-Q" and, collectively, the "1993 10-Q's") and the Current Reports on Form 8-K dated January 13, 1993, March 4, 1993 and January 21, 1994 filed by Chiquita with the Commission (Commission file number 1-1550) are incorporated herein by reference and made a part hereof. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so 2 4 modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY Chiquita Brands International, Inc. is a leading international marketer, processor and producer of quality fresh and processed food products. Chiquita produces and markets an extensive line of fresh fruits and vegetables sold under the Chiquita(R) and other brand names. These products include tropical fruit, such as bananas, pineapples, mangos, papaya, kiwi and citrus, and a wide variety of other fresh produce. The core of the Company's operations is the marketing, distribution and sourcing of bananas. The Company's operations also include brand extensions, such as fruit and vegetable juices and banana puree, and other processed fruits and vegetables marketed worldwide under the Chiquita and other brand names; wet and dry salads sold under various brand names; and consumer packaged foods marketed in Latin America under various brand names. During the fourth quarter of 1992, the Company adopted a plan of disposal for its Meat Division and classified it as a discontinued operation. The Meat Division encompasses a wide range of value-added fresh meats and processed meat products sold in the United States nationally under the John Morrell and Mosey's brand names and under a number of regional brand names. See "Recent Developments -- Discontinued Operations." American Financial Corporation ("AFC") owns, either directly or through its subsidiaries, approximately 47% of Chiquita's outstanding shares of Common Stock and 31% of Chiquita's $1.32 Depositary Shares. All of the outstanding common stock of AFC is owned by Carl H. Lindner and members of his family. Chiquita is a New Jersey corporation. The address of its principal executive offices is 250 East Fifth Street, Cincinnati, Ohio 45202 and its telephone number is (513) 784-8011. Unless the context indicates otherwise, the term "Chiquita" also includes the subsidiaries of the Company. INVESTMENT CONSIDERATIONS In addition to the other information set forth in this Prospectus, prospective investors should carefully consider the following before making an investment in the Securities. SUBSIDIARIES Substantially all of the operations of the Company are conducted through its subsidiaries and the Company is therefore dependent on the cash flow of its subsidiaries to meet its obligations. Because the assets of the Company are held by its subsidiaries (some of which are highly leveraged and others of which are unleveraged), the claims of holders of the Securities will be structurally subordinated to any existing and future obligations (whether or not for borrowed money) of such subsidiaries. As of September 30, 1993, the total debt of the Company's subsidiaries aggregated $748 million, of which $381 million represented non-recourse long-term debt of the Company's shipping subsidiaries secured by ships and related equipment and $114 million represented short-term notes and loans payable. RECENT LOSSES From 1984 to 1991, Chiquita reported a continuous record of growth in annual earnings. In 1992, however, Chiquita experienced unprecedented challenges, including a decline in product quality resulting from an extraordinary outbreak of banana plant disease and unusual weather patterns in Latin America. These factors contributed to a loss of $146 million ($2.91 per share) from continuing operations before taxes and non-recurring charges for the year ended December 31, 1992. Chiquita's management addressed these challenges by implementing control measures to address the quality issues and commenced an aggressive program to adjust the Company's fresh fruit volume and cost structure to reduce significantly production, distribution and overhead costs. This program included consolidation of operations, asset disposals and workforce reductions. As a result of the adoption of this program, restructuring and reorganization charges of 3 5 $61 million ($1.18 per share) were recorded in the fourth quarter of 1992. In addition, during the fourth quarter of 1992, the Company adopted a plan of disposal for its Meat Division and classified it as a discontinued operation. The net loss for the year, including non-recurring charges and losses from discontinued operations, was $284 million ($5.48 per share). Fixed charges exceeded earnings by approximately $239 million for the year. See "Recent Developments -- Results of Operations" below and "Management's Analysis of Operations and Financial Condition" in the Company's 1992 10-K. For the nine months ended September 30, 1993, the Company reported net income of $9.3 million, compared to a net loss of $90.6 million (including a loss on discontinued operations of $21.4 million) for the same period in 1992. However, the Company expects to report a fourth quarter 1993 net loss in the range of approximately $52 to $67 million, or $1.00 to $1.30 per share, compared to a net loss of $193 million, or $3.77 per share (including restructuring and reorganization charges of $61 million, or $1.18 per share, and a loss from discontinued operations of $41 million, or $.80 per share) for the same period last year. For the year ended December 31, 1993, the Company expects to report a net loss in the range of $43 to $58 million, or $.82 to $1.12 per share, compared to a net loss of $284 million, or $5.48 per share, (including restructuring and reorganization charges of $61 million, or $1.18 per share, and a loss from discontinued operations of $62 million, or $1.20 per share) reported in 1992. The improvement in 1993 over 1992 is attributable principally to the continuing benefits of Chiquita's multi-year investment spending program and the ongoing impact of its restructuring and cost reduction efforts. See "Recent Developments -- Results of Operations." LEVERAGE As of September 30, 1993, the Company had short-term notes and loans payable of $114.3 million and long-term debt (including current maturities) of approximately $1.5 billion. As of September 30, 1993, the Company had total long-term debt maturities and sinking fund requirements for the remainder of 1993 of $16 million, and for the years 1994 through 1997 amounts ranging from $81 million to $96 million. The percentage of total debt to total capitalization for the Company was 71.1% at September 30, 1993. COMPETITION AND PRICING Approximately 60% of the Company's consolidated net sales comes from the sale of bananas. Banana marketing is highly competitive. In order to compete successfully, Chiquita must be able to source bananas of uniformly high quality and distribute them in worldwide markets on a timely basis. A limited number of competitors account for most of the banana imports throughout the world. While smaller companies, including growers' cooperatives, have also become a competitive factor, Chiquita's principal competitors continue to be a limited number of international companies. In addition, competition in the sale of bananas also comes from other fresh fruit. Chiquita has been able to obtain a premium price for its bananas due to its reputation for quality and its innovative marketing techniques. The effect of competition with respect to the majority of the Company's products is intensified by their perishable nature. Bananas are highly perishable and must be brought to market and sold generally within 60 days after harvest. Therefore, selling prices which importers receive for bananas are significantly affected by fluctuations in the available supplies of bananas and other fresh fruit in each market and by the relative quality and wholesaler and retailer acceptance of bananas offered by competing importers. Excess supplies may result in increased price competition. Although production of bananas tends to be relatively stable throughout the year, competition in the sale of bananas from other fresh fruit may be seasonal in nature. The resulting seasonal variations in demand cause banana pricing to be seasonal, with the first six months of the calendar year being the strongest. ADVERSE WEATHER CONDITIONS AND CROP DISEASE Bananas are also vulnerable to adverse local weather conditions, which are quite common but difficult to predict, and to crop disease, the control of which entails significant expense. These factors may restrict worldwide supplies and result in increased prices for bananas. However, competitors may be affected differently, depending upon their ability to obtain adequate supplies from sources in other geographic areas. During 1993, approximately 30% of all bananas sold by Chiquita were sourced from Panama. Bananas sourced from other countries, including Colombia, Costa Rica, Guatemala, Honduras, Mexico and the Philippines, comprised from 6% to 17% (depending on the country) of bananas sold by Chiquita during 1993. See the Company's 1992 10-K. 4 6 EUROPEAN COMMUNITY BANANA REGULATION On July 1, 1993, the European Community ("EC") implemented a new quota restricting the volume of Latin American bananas imported into the EC. Most of the Company's bananas are produced in Latin America and subject to the quota. The quota is administered through a licensing system. Since imposition of the new EC quota regime on July 1, 1993, prices within the EC have increased to a higher level than for prior years. Banana prices in other worldwide markets, however, have been lower than in previous years, as the displaced EC volume has entered those markets. Challenges to the quota and many matters regarding implementation and administration of the quota remain to be resolved. Therefore, there can be no assurance that EC banana regulation will not change further. See "Recent Developments -- European Community Banana Regulation" and "-- Results of Operations" for further discussion of the EC quota and its impact on current operations. OTHER RISKS OF INTERNATIONAL OPERATIONS A significant portion of the Company's operations are conducted in foreign countries, and are subject to risks that are inherent in operating in such foreign countries, including government regulation, currency restrictions and other restraints, risks of expropriation and burdensome taxes. There is also a risk that legal or regulatory requirements will be changed or that administration and enforcement policies will change. Certain of the Company's operations are dependent upon leases and other agreements with the governments of these countries. Although the Company's operations are a significant factor in the economies of many of the countries where the Company produces and purchases bananas and other agricultural and consumer products, the Company's overall risk from these factors, as well as from political changes, is reduced by the large number and geographic diversity of its sources of bananas, which exceed that of any competitor. The Company's operations worldwide and the products it sells are subject to numerous governmental regulations and inspections by environmental, food safety and health authorities. Although the Company believes it is substantially in compliance with such regulations, changes in legislation or regulations and actions by regulators, including changes in administration and enforcement policies, may from time to time require operational improvements or modifications at various locations or the payment of fines and penalties, or both. The Company is also subject to a variety of governmental regulations in certain countries where it markets its products, including import quotas and tariffs, currency exchange controls and taxes. The Company's operations involve transactions in a variety of currencies. Results of its operations may be significantly affected by fluctuations of currency exchange rates. Such fluctuations are significant to the Company's banana operations because many of its costs are incurred in currencies different from those that are received from the sale of bananas in foreign markets, and there is normally a time lag between the incurrence of such costs and collection of the related sales proceeds. The Company's policy is to exchange local currencies for dollars immediately upon receipt, thus reducing exchange risk. The Company also engages from time to time in various hedging activities to minimize potential losses on cash flows originating in foreign currencies. See Note 1 to the Company's Consolidated Financial Statements and "Management's Analysis of Operations and Financial Condition" included in the Company's 1992 10-K for information with respect to foreign exchange. SHARES AVAILABLE FOR FUTURE SALE No prediction can be made as to the effect, if any, that future sales of shares of Common Stock, or the availability of such shares for future sales, will have on the market price of Common Stock, or any then outstanding preferred stock, prevailing from time to time. Sales of substantial amounts of Common Stock, or the perception that such sales could occur, could adversely affect prevailing market prices for the Common Stock or, in certain instances, the Preferred Stock. At January 17, 1994, the Company had outstanding 48,511,853 shares of Common Stock, including 22,868,805 shares held, directly or indirectly, by AFC, and 648,310 shares of Cumulative Preference Stock, including 200,000 shares held, directly or indirectly, by AFC. In addition to the Securities offered from time to time hereby, the Company has filed a Registration Statement on Form S-3 registering 1,616,480 shares of Common Stock pursuant to the Securities Act on behalf of certain former stockholders of Friday Canning Corporation. These shares were issued to such holders 5 7 in connection with the merger of Friday Canning Corporation into the Company during the first quarter of 1992. Such Registration Statement was declared effective on January 26, 1994. ABSENCE OF PUBLIC MARKET FOR SECURITIES (OTHER THAN COMMON STOCK) Since the Debt Securities and the Preferred Stock will be newly issued, there is no current market for such Securities. The Company may, but has no obligation to, apply for listing of such Securities on the New York Stock Exchange or another stock exchange, and there can be no assurance that the applicable listing requirements of any such exchange will be met. There can be no assurance that there will be an active trading market for such Securities. RECENT DEVELOPMENTS EUROPEAN COMMUNITY BANANA REGULATION On July 1, 1993, the EC implemented a new quota effectively restricting the volume of Latin American bananas imported into the EC to approximately 80% of prior levels. The quota is administered through a licensing system. Challenges to the quota and many matters regarding implementation and administration of the quota remain to be resolved. In May 1993, the principles underlying the new regulation that discriminate against Latin American banana exporting countries in favor of certain African, Caribbean and Pacific countries were ruled illegal under the General Agreement on Tariffs and Trade ("GATT") by a GATT dispute settlement panel. In December 1993, EC representatives discussed a tentative, even more discriminatory proposal with a few Latin American banana producing countries. The tentative proposal was rejected by an overwhelming majority of the Latin American countries. As widely reported in the press, in January 1994 a GATT dispute settlement panel ruled on a second lawsuit against the current EC regulation in favor of the Latin American countries. GATT rulings in favor of the Latin American countries could result in an increase in the total volume of Latin American bananas, including banana volume of the Company, which could be imported under the quota. However, there can be no assurance that the EC will comply, or the manner in which it would comply, with such rulings. (See "Results of Operations" below for discussion of the impact of the EC quota on current operations.) RESULTS OF OPERATIONS Net sales for the third quarter of 1993 of $552 million and first nine months of 1993 of $1.966 billion declined from the comparable prior year amounts of $612 million and $2.102 billion primarily as a result of lower banana volumes and prices. Nevertheless, for the third quarter of 1993, the Company reported a reduced net loss of $25.9 million, or $.50 per share, compared to a 1992 third quarter net loss of $79.4 million, or $1.55 per share (including a loss on discontinued operations of $7.5 million, or $.15 per share). For the nine months ended September 30, 1993, the Company reported net income of $9.3 million, or $.18 per share, as compared to a net loss of $90.6 million, or $1.74 per share, in the same period of 1992 (which included a loss on discontinued operations of $21.4 million, or $.41 per share). This improvement is attributable to the continuing benefits of Chiquita's multi-year investment spending program and the ongoing impact of its restructuring and cost reduction efforts. These programs address all aspects of the banana business including a decreased reliance on high-cost purchased fruit, enhanced production practices, shipping fleet realignment, reorganization and consolidation of marketing organizations, and overhead reductions. Since imposition of the new EC quota regime on July 1, 1993, prices within the EC have increased to a higher level than the levels in prior years. Banana prices in other worldwide markets have been lower than in previous years, as displaced EC volume has entered those markets. The favorable cost comparisons achieved during the first nine months of 1993 as a result of the Company's investment spending and cost reduction programs have continued throughout the fourth quarter. Fourth quarter banana price levels in the EC remained higher than pre-quota price levels of the 1992 fourth quarter. However, EC prices weakened during the fourth quarter from earlier post-quota levels partially as a result of the EC's late issuance of fourth quarter import licenses and its announcement of an expiration date for these licenses that was earlier than marketplace expectations. The Company expects to report a fourth 6 8 quarter 1993 net loss in the range of approximately $52 to $67 million, or $1.00 to $1.30 per share, compared to a net loss of $193 million, or $3.77 per share (including restructuring and reorganization charges of $61 million, or $1.18 per share, and a loss from discontinued operations of $41 million, or $.80 per share) for the same period last year. For the year ended December 31, 1993, the Company expects to report a net loss in the range of $43 to $58 million, or $.82 to $1.12 per share, compared to a net loss of $284 million, or $5.48 per share, (including restructuring and reorganization charges of $61 million, or $1.18 per share, and a loss from discontinued operations of $62 million, or $1.20 per share) reported in 1992. Based on the expected range of results above, earnings before interest, income tax, depreciation and amortization ("EBITDA") for 1993 are estimated to be in the range of $214 to $229 million. For 1992, EBITDA excluding restructuring and reorganization charges and discontinued operations was $44 million. Chiquita also expects that the improved cost trend will continue into 1994. In addition, the EC quota impact could cause first half 1994 banana prices in the EC to exceed pre-quota first half 1993 levels as they have since implementation of the quota. First half 1994 prices outside the EC could continue at levels lower than in previous years as they have since implementation of the quota, although the continuing growth in per capita consumption of bananas outside the EC could mitigate any such decline. DISCONTINUED OPERATIONS During the fourth quarter of 1992, after evaluation of reorganization plans announced earlier that year and completion of other preparatory actions, the Company adopted a plan of disposal for all remaining Meat Division operations. Accordingly, these operations were classified as discontinued operations and were deconsolidated. (See Note 3 to the Company's Consolidated Financial Statements for the year ended December 31, 1992, included in the Company's 1992 10-K.) Pursuant to the plan, the Company immediately completed the sale of a major fresh pork processing facility in December 1992. During 1993, the Company engaged in extensive activity with respect to execution of the balance of its disposal plan. Numerous proposals for the purchase of individual components of the Meat Division were received from a larger number of buyers than originally expected. Although progress under the plan has been slower than anticipated, partially as a result of the Company evaluating all these proposals in the interest of maximizing shareholder value, the Company has made significant progress in the implementation of its disposal plan. This progress includes: - successful ongoing cost reduction efforts that have contributed to the improvement in Meat Division operating results to approximately breakeven levels for 1993. - progress toward obtaining further substantial cost reductions for 1994 and beyond relating to retiree medical costs. In June 1993, the Company received a favorable court ruling on its previously filed litigation that confirms its right to unilaterally reduce medical benefits of retired hourly employees. This ruling is being appealed by the union and a hearing on the appeal is scheduled for February 1994. - receiving subsidies and concessions from the State of South Dakota and the City of Sioux Falls that will enhance the operating profitability of the Sioux Falls plant. These incentives were offered in September 1993 by newly installed state and city administration officials who took office in April 1993 after their predecessors, including the Governor of South Dakota, were killed in a plane crash on their return from a meeting to discuss incentives with Company and Meat Division representatives. - obtaining financial incentives and concessions in November 1993 from the City of Sioux City, Iowa and the local labor union to enhance the salability of the Sioux City pork processing plant as an operating facility. - signing a letter of intent in December 1993 for the sale of the entire Specialty Meat Group. The Company is presently negotiating with this buyer and expects to complete the sale of this group in the first half of 1994. 7 9 - obtaining a new stand-alone revolving credit facility in June 1993 to fund the Meat Division's working capital needs. The Company also continues to be engaged in vigorous marketing efforts with respect to the remaining Meat Division operations that now reflect improved prospects as a result of the favorable developments described above. It expects to complete the divestitures of these operations by the end of 1994. The Company has reevaluated its provision for loss on discontinued operations recorded in 1992 and believes it is adequate to provide for any losses on disposition. The developments during 1993 regarding the Company's Meat Division have not had and are not expected to have a material adverse effect on the Company's liquidity, financial condition or results of operations. Net sales from discontinued operations for the nine months ended September 30, 1993 were approximately $1.2 billion. USE OF PROCEEDS Unless otherwise indicated in the Prospectus Supplement, the net proceeds to be received by the Company from the sale of the Securities will be used to repay outstanding debt of the Company and its subsidiaries and for general corporate purposes. 8 10 SELECTED CONSOLIDATED FINANCIAL DATA The selected consolidated financial data set forth below for the years ended December 31, 1988 through 1992 were derived from the Company's audited consolidated financial statements. Information presented below for interim periods was derived from the Company's unaudited consolidated financial statements and in the opinion of management includes all adjustments (which include only normal recurring adjustments) necessary to present fairly the results of operations for the interim periods. This information should be read in conjunction with the Company's Consolidated Financial Statements and notes thereto and "Management's Analysis of Operations and Financial Condition" included or incorporated by reference in the Company's Reports on Forms 10-K and 10-Q for such periods. Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year.
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, ----------------------- -------------------------------------------------------------- 1993 1992 1992 1991 1990 1989 1988 ---------- ---------- ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) INCOME STATEMENT DATA: Net sales............................ $1,965,790 $2,102,289 $2,723,250 $2,604,128 $2,186,452 $1,892,657 $1,679,429 Operating expenses Cost of sales...................... 1,520,718 1,736,968 2,309,425 2,027,669 1,698,557 1,497,306 1,333,688 Selling, general and administrative expenses......................... 246,122 279,966 368,675 324,240 284,299 205,780 205,712 Depreciation....................... 75,484 56,645 80,438 54,401 37,416 31,825 25,797 Restructuring and reorganization... -- -- 61,300 -- -- -- -- ---------- ---------- ---------- ---------- ---------- ---------- ---------- 1,842,324 2,073,579 2,819,838 2,406,310 2,020,272 1,734,911 1,565,197 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Operating income (loss)............ 123,466 28,710 (96,588) 197,818 166,180 157,746 114,232 Interest income...................... 17,512 32,830 43,301 47,319 31,461 28,169 25,376 Interest expense..................... (126,612) (111,829) (155,036) (88,406) (55,361) (53,952) (38,923) Other income (expense), net.......... 5,969 (8,979) (8,385) 3,278 11,251 3,077 3,731 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations before income taxes... 20,335 (59,268) (216,708) 160,009 153,531 135,040 104,416 Income taxes......................... (11,000) (10,000) (5,000) (49,100) (57,700) (51,200) (47,200) ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations....................... 9,335 (69,268) (221,708) 110,909 95,831 83,840 57,216 Discontinued operations(1)......... -- (21,355) (62,332) 17,586 (1,913) (16,073) 3,147 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income (loss).................... $ 9,335 $ (90,623) $ (284,040) $ 128,495 $ 93,918 $ 67,767 $ 60,363 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Fully diluted earnings (loss) per common share: Continuing operations.............. $ .18 $ (1.33) $ (4.28) $ 2.19 $ 2.24 $ 2.05 $ 1.38 Discontinued operations(1)......... -- (.41) (1.20) .33 (.04) (.38) .07 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income (loss).................. $ .18 $ (1.74) $ (5.48) $ 2.52 $ 2.20 $ 1.67 $ 1.45 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Ratio of earnings to fixed charges(2)......................... 1.08 --(2) --(2) 1.73 2.13 2.20 2.18 Ratio of earnings to combined fixed charges and preferred stock dividends(2)....................... 1.06 --(2) --(2) 1.73 2.13 2.20 2.18 BALANCE SHEET DATA: Cash and marketable securities..... $ 194,820 $ 491,206 $ 413,181 $ 825,447 $ 318,246 $ 287,658 $ 188,619 Working capital.................... 301,966 648,775 482,338 960,093 433,424 394,640 345,784 Total assets....................... 2,821,898 3,034,410 2,880,624 2,937,344 1,913,674 1,373,480 1,230,946 Short-term debt.................... 189,966 196,198 229,286 187,821 106,698 58,540 18,236 Long-term debt (other than subordinated debt)............... 805,607 717,656 778,784 571,493 221,884 85,398 69,950 Subordinated debt.................... 633,530 632,226 632,535 631,346 272,298 299,852 297,764 Shareholders' equity................. 663,000 874,252 674,887 967,925 687,709 463,954 400,792 OTHER DATA: Operating income (loss) plus depreciation and amortization.... $ 204,351 $ 90,390 $ (9,079) $ 258,076 $ 208,963 $ 194,919 $ 144,482 Capital expenditures(3)............ 174,185 381,578 472,273 395,641 312,698 117,425 63,621 Dividends declared per common share............................ .39 .49 .66 .55 .35 .20 .20 - --------------- (1) Includes net operating results (and, in 1992, provision for loss on disposal) of the Company's Meat Division operations, which have been classified as discontinued operations. See "Recent Developments -- Discontinued Operations" and Note 3 to the Company's Consolidated Financial Statements for the year ended December 31, 1992, included in the Company's 1992 10-K. All other Income Statement Data presented above have been restated to exclude amounts relating to the Meat Division. The Company's net investment in discontinued operations, which is included in "Total assets", aggregated approximately $42 million at September 30, 1993. The net assets of discontinued operations consist principally of property, plant and equipment and trademarks, and at September 30, 1993 include a seasonally high $53 million of short-term borrowings under an $80 million credit facility secured by Meat Division working capital. These net assets also include net liabilities recorded for Meat Division defined benefit pension plans of approximately $40 million at September 30, 1993. (2) For purposes of calculating the ratios of earnings to fixed charges and of earnings to combined fixed charges and preferred stock dividends, earnings are calculated as the sum of the income (loss) from continuing operations before income taxes, fixed charges (other than capitalized interest) and amortization of capitalized interest, less undistributed earnings of less-than-fifty-percent-owned investees. Fixed charges consist of interest on indebtedness (including amortization of debt discount and capitalized interest) and a portion (one-third) of rent considered to represent interest cost. Preferred dividends are dividends on shares of Chiquita's Mandatorily Exchangeable Cumulative Preference Stock, Series C, which have been outstanding since October 1992. Fixed charges and combined fixed charges and preferred stock dividends both exceeded earnings by approximately $80 million for the nine months ended September 30, 1992, and approximately $239 million for the year ended December 31, 1992. (3) Includes capital expenditures in connection with the acquisition of ships and containers of approximately $120 million during the nine months ended September 30, 1993, $225 million during the nine months ended September 30, 1992, $280 million in 1992, $180 million in 1991, $200 million in 1990 and $20 million in 1989.
9 11 DESCRIPTION OF THE DEBT SECURITIES The following description of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement and the extent, if any, to which such general provisions do not apply to those Debt Securities will be described in the Prospectus Supplement relating to such Debt Securities. The Debt Securities will be general unsecured obligations of the Company and will constitute either senior debt securities or subordinated debt securities. In the case of Debt Securities that will be senior debt securities ("Senior Debt Securities"), the Debt Securities will be issued under an Indenture (the "Senior Indenture") to be executed between the Company and The Fifth Third Bank, Cincinnati, Ohio, as trustee (the "Senior Debt Trustee"), under the Senior Indenture. In the case of Debt Securities that will be subordinated debt securities ("Subordinated Debt Securities"), the Debt Securities will be issued under an Indenture (the "Subordinated Indenture") to be executed by the Company and Star Bank, N.A., Cincinnati, Ohio, as trustee (the "Subordinated Debt Trustee"), under the Subordinated Indenture. The Senior Indenture and the Subordinated Indenture are sometimes referred to herein individually as an "Indenture" and collectively as the "Indentures." The Senior Debt Trustee and the Subordinated Debt Trustee are sometimes referred to herein individually as the "Trustee" or collectively as the "Trustees." The statements made under this caption relating to the Debt Securities and the Indentures are summaries only, do not purport to be complete and are qualified in their entirety by reference to the forms of Indentures or the Indentures which have been filed with the Commission in connection with the issuance of any series of Debt Securities. Such summaries make use of terms defined in the Indentures. Wherever such terms are used herein, such terms are incorporated by reference from the Indentures as part of the statements made herein. Summaries of certain terms used herein will be included in the Prospectus Supplement relating to the issuance of any particular series of Debt Securities. PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES GENERAL. Except as may be set forth in the terms of the Debt Securities and described in the Prospectus Supplement relating to such Debt Securities, neither of the Indentures limits the amount of Debt Securities which can be issued thereunder and each provides that additional Debt Securities may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company's Board of Directors. Reference is made to the Prospectus Supplement for the following terms of the particular series of Debt Securities being offered thereby: (i) the designation, aggregate principal amount and authorized denominations of the series; (ii) the price at which the series will be issued; (iii) the date or dates on which the series will mature (or manner of determining the same); (iv) the rate or rates per annum, if any, at which the series will bear interest (or the manner of calculation thereof) and the date or dates from which such interest will accrue; (v) certain covenants which will be applicable to that series of Debt Securities; (vi) the times at which any interest will be payable (or manner of determining the same) and the Regular Record Dates for Interest Payment Dates; (vii) the place or places where the principal of (and premium, if any) and interest, if any, on the series will be payable and each office or agency, as described below under "Denominations, Registration and Transfer," where the Debt Securities may be presented for transfer or exchange; (viii) any mandatory or optional sinking fund or analogous provisions; (ix) the date, if any, after which, and the price at which, such Debt Securities are payable pursuant to any optional or mandatory redemption provisions; (x) the terms and conditions upon which the Debt Securities of such series may be repayable prior to maturity at the option of the holder thereof and the price at which such Debt Securities are so repayable; (xi) any provisions regarding exchangeability or conversion of the Debt Securities; (xii) information with respect to book-entry procedures, if any; (xiii) any provisions of the Indenture which will not be applicable to that series of Debt Securities; (xiv) whether the Debt Securities are Senior Debt Securities or Subordinated Debt Securities; and (xv) any other additional provisions or specific terms which may be applicable to that series of Debt Securities. Some of the Debt Securities may be issued as Discounted Securities (bearing no interest or interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any Discounted Securities will be described in the Prospectus Supplement relating thereto. 10 12 DENOMINATIONS, REGISTRATION AND TRANSFER. The Debt Securities of a series will be issuable only in fully registered form. Unless otherwise provided in an applicable Prospectus Supplement with respect to a series of Debt Securities, Debt Securities will be issued only in denominations of $1,000 or any integral multiple thereof. Debt Securities of any series will be exchangeable for other Debt Securities of the same series and of a like aggregate principal amount and tenor of different authorized denominations. Debt Securities may be presented for exchange or for registration of transfer (with the form of transfer duly executed) at the office of a transfer agent designated by the Company for such purpose with respect to any series of Debt Securities. If a Prospectus Supplement refers to any transfer agent initially designated by the Company with respect to any series of Debt Securities, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that the Company will be required to maintain a transfer agent in each Place of Payment for such series. The Company is not required to issue, register the transfer of or exchange Debt Securities of any series for the 15-day period prior to the mailing of a notice of redemption and, with respect to any Debt Securities called for redemption in whole or in part (except for the unredeemed portion of any Debt Securities being redeemed in part), following such mailing. PAYMENT AND PAYING AGENTS. Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of (and premium, if any) and interest, if any, on Debt Securities will be made (i) by check mailed or delivered to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account (with a bank located inside the United States) maintained by the Person entitled thereto. Unless otherwise indicated in an applicable Prospectus Supplement, payment of any installment of interest on any Debt Security will be made to the Person in whose name such Debt Security is registered at the close of business on the Regular Record Date for such interest payment. All moneys paid by the Company to the Trustee or a Paying Agent for the payment of principal of (and premium, if any) and interest, if any, on any Debt Security which remains unclaimed at the end of two years after such principal, premium or interest shall have become due and payable will be repaid to the Company and the holder of such Debt Security will thereafter look only to the Company for payment thereof. CONSOLIDATION, MERGER AND SALE OF ASSETS. Under each of the Indentures, the Company may not consolidate with or merge into any other entity or sell, convey, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets as an entirety to any entity, unless: (1) either (a) the Company shall be the continuing corporation or (b) the entity (if other than the Company) formed by such consolidation or into which the Company is merged or the entity that acquires, by sale, assignment, conveyance, transfer, lease or disposition, all or substantially all of the properties and assets of the Company as an entirety shall be a corporation, partnership or trust organized and validly existing under the laws of the United States or any State thereof or the District of Columbia, and shall expressly assume by a supplemental indenture, the due and punctual payment of the principal of and premium, if any, and interest on all the Debt Securities and the performance and observance of every covenant of the Indenture on the part of the Company to be performed or observed; (2) immediately thereafter, no Event of Default (and no event that, after notice or lapse of time, or both, would become an Event of Default) shall have occurred and be continuing; and (3) certain other conditions, if any, are met, as are described in the Prospectus Supplement relating to the Debt Securities being offered thereby. In the event of any transaction (other than a lease) described in and complying with the conditions listed in the immediately preceding paragraphs in which the Company is not the continuing corporation, the successor entity formed or remaining would be substituted for the Company and the Company would be discharged from all obligations and covenants under the Indenture and the Debt Securities. EVENTS OF DEFAULT. The following events are defined in each of the Indentures as "Events of Default" with respect to a series of Debt Securities: (i) default in the payment of any installment of interest on any Debt Securities in such series for 30 days after becoming due; (ii) default in the payment of the principal of (or premium, if any, on) any Debt Securities in such series when due; (iii) default in the performance of any 11 13 other covenant applicable to such series contained in the Debt Securities or the Indenture for a period of 60 days after written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of 25% in aggregate principal amount of such series of Debt Securities then Outstanding; (iv) default shall have occurred under any other series of Debt Securities or any agreements, indentures or instruments under which the Company then has outstanding Indebtedness in excess of $10 million in the aggregate and, if not already matured in accordance with its terms, such Indebtedness shall have been accelerated and such acceleration shall not have been rescinded or annulled within ten days after notice thereof shall have been given to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of such series of Debt Securities then Outstanding, provided, that if, prior to the entry of judgment in favor of the Trustee, such default under such indenture or instrument shall be remedied or cured by the Company, or waived by the holders of such Indebtedness, then the Event of Default under such Indenture shall be deemed likewise to have been remedied, cured or waived and provided, further, that if such default results from an action of the United States government or a foreign government which prevents the Company from performing its obligations under such agreement, indenture or instrument, the occurrence of such default will not be an Event of Default under such Indenture; (v) one or more judgments, orders or decrees for the payment of money in excess of $10 million, either individually or in the aggregate, shall be entered against the Company and shall not be discharged, there shall have been a period of 60 days during which a stay of enforcement of such judgment or order, by reason of an appeal or otherwise, shall not be in effect and there shall have been given written notice of the default to the Company by the Trustee or to the Company and the Trustee by the holders of 25% in aggregate principal amount of such series of Debt Securities then Outstanding; or (vi) certain events of bankruptcy, insolvency or reorganization with respect to the Company shall have occurred. If an Event of Default shall occur and be continuing with respect to a series of Debt Securities, either the Trustee or the holders of at least 25% in principal amount of the Outstanding Debt Securities of such series may declare the entire principal amount, or, in the case of Discounted Securities, such lesser amount as may be provided for in such Discounted Securities, of all the Debt Securities of such series to be immediately due and payable. Under each of the Indentures, the Company is required to furnish the Trustee annually a statement by certain officers of the Company to the effect that to the best of their knowledge the Company is not in default in the fulfillment of any of its obligations under the Indenture or, if there has been a default in the fulfillment of any such obligation, specifying each such default. Each of the Indentures provides that the Trustee shall, within 90 days after the occurrence of a default with respect to a particular series of Debt Securities, give the holders of the Debt Securities of such series notice of such default known to it (the term default to mean the events specified above without grace periods); provided that, except in the case of a default in the payment of principal of (or premium, if any) or interest, if any, on any of the Debt Securities of such series, the Trustee shall be protected in withholding such notice if it in good faith determines the withholding of such notice is in the interest of the holders of the Debt Securities of such series. The holders of a majority in principal amount of a particular series of Debt Securities Outstanding have the right, subject to certain limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee with respect to such series or exercising any trust or power conferred on the Trustee, and to waive certain defaults. Each of the Indentures provides that in case an Event of Default shall occur and be continuing, the Trustee shall exercise such of its rights and powers under the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any of the holders of the Debt Securities unless they shall have offered to the Debt Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request. SATISFACTION AND DISCHARGE. Except as may otherwise be set forth in the Prospectus Supplement relating to a series of Debt Securities, each of the Indentures provides that the Company shall be discharged from its 12 14 obligations under the Debt Securities of such series (with certain exceptions) at any time prior to the Stated Maturity or redemption thereof when (a) the Company has deposited with the Trustee, in trust, sufficient funds to pay the principal of (and premium, if any) and interest, if any, to Stated Maturity (or redemption) on, the Debt Securities of such series, (b) the Company has paid all other sums payable with respect to the Debt Securities of such series and (c) certain other conditions are met. Upon such discharge, the holders of the Debt Securities of such series shall no longer be entitled to the benefits of the Indenture, except for certain rights, including registration of transfer and exchange of the Debt Securities of such series and replacement of mutilated, destroyed, lost or stolen Debt Securities, and shall look only to such deposited funds. Such discharge may be treated as a taxable exchange of the related Debt Securities for an issue of obligations of the trust or a direct interest in the cash and securities held in the trust. In that case, holders of such Debt Securities would recognize gain or loss as if the trust obligations or the cash or securities deposited, as the case may be, had actually been received by them in exchange for their Debt Securities. Such holders thereafter might be required to include in income a different amount than would be includable in the absence of discharge. Prospective investors are urged to consult their own tax advisors as to the specific consequences of discharge. MODIFICATION AND WAIVER. Certain modifications and amendments (which, generally, either benefit or do not affect the holders of Outstanding Debt Securities) of each of the Indentures may be made by the Company and the Trustee without the consent of holders of the Debt Securities. Other modifications and amendments of each Indenture require the consent of the holders of more than 50% in principal amount of the Outstanding Debt Securities of each series issued under the Indenture affected by the modification or amendment; provided, however, that no such modification or amendment may, without the consent of the holder of each Outstanding Debt Security affected thereby, (a) change the Stated Maturity of the principal of, or any installment of principal of or interest, if any, on any Debt Security, (b) reduce the principal amount of (or premium, if any) or interest, if any, on any Debt Security, (c) reduce the amount of principal of a Discounted Security payable upon acceleration of the Maturity thereof, (d) change the Place of Payment, (e) impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date) or (f) reduce the percentage in principal amount of Outstanding Debt Securities of any series, the consent of the holders of which is required for modification or amendment of such Indenture or for waiver of compliance with certain provisions of such Indenture or for waiver of certain defaults. The holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the holders of all Debt Securities of that series waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the Indenture. The holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the holders of all Debt Securities of that series waive any past default under the Indenture with respect to that series, except a default in the payment of the principal of (or premium, if any) and interest, if any, on any Debt Security of that series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each Outstanding Debt Security of that series affected. NOTICES. Notices to holders of Debt Securities will be given by mail to the addresses of such holders as they appear in the Security Register. GOVERNING LAW. The Indentures and the Debt Securities are to be governed by and construed in accordance with the laws of the State of New York. PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES Senior Debt Securities will be issued under the Senior Indenture and will rank pari passu with all other unsecured and unsubordinated debt of the Company. 13 15 PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES GENERAL. Subordinated Debt Securities will be issued under the Subordinated Indenture and will rank pari passu with certain other subordinated debt of the Company that may be outstanding from time to time and will rank junior to all senior indebtedness of the Company (including any Senior Debt Securities) that may be outstanding from time to time. SUBORDINATION. The Indebtedness represented by the Subordinated Debt Securities is subordinated in right of payment to the prior payment in full of all Senior Indebtedness. No payment or distribution shall be made on account of the principal of or premium, if any, or interest on, or the purchase, redemption or other acquisition of, the Subordinated Debt Securities in the event and during the continuation of any default in the payment of any Senior Indebtedness beyond any applicable grace period. Payments of principal, premium, if any, and interest on, or redemption or other acquisition by the Company of, the Subordinated Debt Securities may also be blocked in the event of other defaults which allow acceleration of the maturity of any Senior Indebtedness. The Subordinated Indenture will provide that in the event of any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or its assets, or any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary, or any assignment for the benefit of creditors or other marshalling of assets or liabilities of the Company, all Senior Indebtedness must be paid in full, or provision made for such payment, before any payment or distribution (excluding certain permitted equity or subordinated securities) is made on account of the principal of or premium, if any, or interest on the Subordinated Debt Securities. By reason of such subordination, in the event of liquidation or insolvency, creditors of the Company who are holders of Senior Indebtedness may recover more, ratably, than the holders of the Subordinated Debt Securities. By reason of such subordination, in the event of liquidation or insolvency, creditors of the Company who are holders of Senior Indebtedness may recover more, ratably, than the holders of the Subordinated Debt Securities. For purposes of the foregoing, Senior Indebtedness will be defined to mean all Indebtedness of the Company and any accrued but unpaid interest on such Indebtedness, unless in each case by the terms of the instrument creating or evidencing such Indebtedness it is provided that such Indebtedness is not senior in right of payment to the Subordinated Debt Securities or that such Indebtedness is pari passu with or subordinate in right of payment to the Subordinated Debt Securities; provided that Senior Indebtedness does not include (i) the Company's 9 1/8% Subordinated Debentures due February 1, 1998, 10 1/4% Subordinated Debentures due August 1, 2005, 10 1/2% Subordinated Debentures due August 1, 2004, 11 1/2% Subordinated Notes due June 1, 2001, 11 7/8% Subordinated Debentures due May 1, 2003 and 7% Convertible Subordinated Debentures due March 28, 2001, (ii) any obligations of the Company to any of its subsidiaries, or (iii) any obligations of the Company arising from redeemable stock. CONCERNING THE TRUSTEES. The Senior Debt Trustee, The Fifth Third Bank, Cincinnati, Ohio, is a state banking association organized under the laws of the State of Ohio. The Bank is a regional commercial bank offering a wide range of banking services to individual and business customers. The Subordinated Debt Trustee, Star Bank, National Association, Cincinnati, Ohio, is a national banking association organized under the laws of the United States of America. DESCRIPTION OF EQUITY SECURITIES Chiquita has 100,000,000 authorized shares of Capital Stock, par value $.33 per share (the "Common Stock"), of which 48,511,853 shares were outstanding on January 17, 1994. Chiquita has authorized 10,000,000 shares of Non-Voting Cumulative Preferred Stock, $1.00 par value per share (the "Preferred Stock"); 46,028 shares of voting $3.00 Cumulative Preferred Stock, without par value (the "$3.00 Preferred"); and 4,000,000 shares of Cumulative Preference Stock, without par value (the "Cumulative Preference Stock"), of which 2,568,096 shares have been designated $1.20 Cumulative Convertible Preference Stock, Series A, none of which is currently outstanding, 75,813 shares have been designated $3.20 14 16 Cumulative Convertible Preference Stock, Series B, none of which is currently outstanding, and 1,000,000 shares have been designated Mandatorily Exchangeable Cumulative Preference Stock, Series C, 648,310 shares of which are currently outstanding. Each of the Preferred Stock and the Cumulative Preference Stock may be issued in one or more series having such designated preferences and rights, qualifications and limitations as the Board of Directors may from time to time determine without requiring any vote of the shareholders; however, the terms of the designated series of Cumulative Preference Stock and of the $3.00 Preferred are fixed and, should they be reissued, would have such terms unless the Company's shareholders amend the Restated Certificate of Incorporation to delete such terms and designations. The issuance of preferred or preference stock by the Board of Directors could be utilized, under certain circumstances, as a method of preventing a takeover of Chiquita. There are no other provisions in the Company's Restated Certificate of Incorporation or By-Laws that would have an effect of delaying, deferring or preventing a change in control of Chiquita. Various debt instruments of the Company restrict, among other things, dividends and other distributions on, and repurchases or redemptions of, the Company's capital stock. At September 30, 1993, these restrictions would have allowed the payment of approximately $90 million for dividends and other corporate distributions, redemptions or repurchases. The ability of the Company to pay dividends when, as and if declared by the Board of Directors, may be subject to restrictions contained in any future debt agreements and to limitations contained in future series or classes of preferred or preference shares and is subject to the legal availability of funds. DESCRIPTION OF COMMON STOCK Chiquita has 100,000,000 authorized shares of Common Stock, of which 48,511,853 were outstanding on January 17, 1994. Holders of Common Stock are entitled to one vote per share on the election of directors and all other matters submitted to a vote of shareholders. Shares of Common Stock do not have cumulative voting rights. Holders of Common Stock are entitled to receive dividends when, as and if declared by the Board of Directors, out of funds legally available therefor; provided, however, that all dividends on any preferred stock and preference stock which may be issued in the future must be fully paid or declared and set apart before any dividends can be paid or declared and set apart with respect to the Common Stock. Upon liquidation, dissolution or winding-up of Chiquita, the holders of the Common Stock are entitled to share ratably in the assets of Chiquita remaining after the payment of its obligations and liabilities and after payment due the holders of Chiquita's preferred stock and preference stock. Holders of Common Stock have no preemptive or other rights to subscribe for or purchase additional securities of Chiquita. All outstanding shares of Common Stock are fully paid and nonassessable. DESCRIPTION OF PREFERRED STOCK The Board of Directors of the Company may provide for the issuance of up to 10,000,000 shares of Preferred Stock in one or more series. The rights, preferences, privileges and restrictions, including dividend rights, conversion rights, terms of redemption and liquidation preferences, of the Preferred Stock of each series will be fixed or designated by the Board of Directors without any further vote or action by the Company's shareholders. Upon issuance after full payment of the purchase price therefor, shares of Preferred Stock offered hereby will be fully paid and nonassessable. The description of the terms of a particular series of Preferred Stock which will be set forth in a Prospectus Supplement does not purport to be complete and is qualified in its entirety by reference to the Restated Certificate of Incorporation of the Company and the Certificate of Amendment thereto which will be filed with the Secretary of State of New Jersey to set forth the terms and designations of the particular series of Preferred Stock. The specific terms of a particular series of Preferred Stock offered hereby will be described in a Prospectus Supplement relating to such series and will include, without limitation, the following: (i) The maximum number of shares to constitute the series and the distinctive designation thereof; 15 17 (ii) The annual dividend rate, if any, on shares of the series, whether such rate is fixed or variable or both, the date or dates from which dividends will begin to accrue or accumulate and whether dividends will be cumulative; (iii) Whether the shares of the series will be redeemable and, if so, the price at and the terms and conditions on which the shares of the series may be redeemed, including the time during which shares of the series may be redeemed and any accumulated dividends thereon that the holders of shares of the series shall be entitled to receive upon the redemption thereof; (iv) The liquidation preference, if any, applicable to shares of the series; (v) Whether the shares of the series will be subject to operation of a retirement or sinking fund and, if so, the extent and manner in which any such fund shall be applied to the purchase or redemption of the shares of the series for retirement or for other corporate purposes, and the terms and provisions relating to the operation of such fund; (vi) The terms and conditions, if any, on which the shares of the series shall be convertible into, or exchangeable for, any other debt or equity securities; (vii) Special voting rights, if any, of any series; and (viii) Any other preferences and relative, participating, optional or other special rights or qualifications, limitations or restrictions thereof. PLAN OF DISTRIBUTION The Company may sell the Securities (i) through underwriters or dealers; (ii) through agents; (iii) directly to one or more institutional purchasers; or (iv) through a combination of any such methods of sale. The Prospectus Supplement with respect to the Securities offered thereby will set forth the terms of the offering of such Securities, including the name or names of any underwriters, dealers or agents, the purchase price of such Securities and the proceeds to the Company from such sale, any underwriting discounts and other items constituting compensation to underwriters, dealers or agents, any initial public offering price, any discounts or concessions allowed or reallowed or paid by underwriters or dealers to other dealers and any securities exchanges on which such Securities may be listed. Only underwriters so named in the Prospectus Supplement are deemed to be underwriters in connection with the Securities offered thereby. If underwriters or dealers are used in the sale, the Securities will be acquired by the underwriters or dealers for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more of such firms. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase such Securities will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all of the Securities offered by the Prospectus Supplement if any are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. The Securities may be sold directly by the Company or through agents designated by the Company from time to time. Any agent involved in the offering and sale of the Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent (or the method by which such commissions can be determined) will be set forth, in the Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement any such agent will be acting on a best efforts basis for the period of its appointment. If so indicated in the Prospectus Supplement, the Company will authorize underwriters, dealers or other persons acting as the Company's agents to solicit offers by certain specified institutions to purchase Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to contracts providing for payment and delivery on a specified date in the future. Institutional investors to which such offers may be made, when authorized, include commercial and savings banks, insurance companies, pension funds, 16 18 investment companies, educational and charitable institutions and such other institutions as may be approved by the Company. The obligations of any such purchasers pursuant to such delayed delivery and payment arrangements will not be subject to any conditions except that such purchase shall not at the time of delivery be prohibited under the laws of any jurisdiction to which such purchaser is subject. The Prospectus Supplement will set forth the commission payable for solicitation of such contracts. The underwriters and other persons soliciting such contracts will have no responsibility for the validity or performance of any such contracts. Underwriters, dealers and agents may be entitled under agreements entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act, or to contribution by the Company with respect to payments they may be required to make in respect thereof. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. Securities other than the Company's Common Stock may or may not be listed on a national securities exchange. No assurances can be given that there will be a market for such Securities. LEGAL MATTERS The legality of the Securities and certain other legal matters in connection with the offering will be passed upon for Chiquita by Charles R. Morgan, Vice President, General Counsel and Secretary of the Company. Certain legal matters will be passed upon for any underwriter or agent by Simpson Thacher & Bartlett (a partnership which includes professional corporations), New York, New York. Charles R. Morgan presently holds shares of Chiquita's Common Stock in the Company's Savings and Investment (401(k)) Plan as well as employee stock options to purchase additional shares of Chiquita's Common Stock. EXPERTS The Consolidated Financial Statements incorporated by reference in this Prospectus and the Prospectus Supplement (other than those for interim periods) have been audited by Ernst & Young, independent auditors, as stated in their opinion (which is incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 1992), and have been so included in reliance upon such opinion given upon the authority of that firm as experts in accounting and auditing. 17 19 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated expenses to be incurred by Chiquita in connection with the issuance and distribution of the securities being registered hereby: SEC registration fee.................................................... $103,448 Accounting fees and expenses............................................ 30,000 Legal fees and expenses................................................. 30,000 Blue Sky fees and expenses.............................................. 22,000 Printing and engraving expenses......................................... 20,000 Trustees' fees and expenses............................................. 20,000 Rating agency fees...................................................... 130,000 Marketing expenses...................................................... 350,000 Miscellaneous........................................................... 44,552 -------- TOTAL......................................................... $750,000 ========
All the above expenses other than the SEC registration fee are estimates. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article VI of Chiquita's By-Laws provides directors and officers with the right to indemnification and advancement of expenses to the fullest extent not prohibited by the New Jersey Business Corporation Act. Directors and officers of Chiquita are indemnified generally against expenses and liabilities incurred in connection with any proceedings, including proceedings by or on behalf of Chiquita, relating to their service to or at the request of Chiquita. However, no indemnification may be made if a final adjudication establishes that a person's acts or omissions (a) breached the person's duty of loyalty to Chiquita or its shareholders, (b) were not in good faith or involved a knowing violation of law, or (c) resulted in receipt by the person of an improper personal benefit. Section VIII of Chiquita's Certificate of Incorporation (Restated) also limits the liability of Chiquita's directors and officers, to the fullest extent permitted by the New Jersey Business Corporation Act, to Chiquita or its shareholders for monetary damages for breach of any duty, except in the situations set forth in (a) through (c) above. ITEM 16. EXHIBITS. The following Exhibits are filed as part of this Registration Statement:
EXHIBIT NO. 1 Form of Underwriting Agreement Basic Provisions (with forms of Terms Agreement attached) 4(a) Restated Certificate of Incorporation of the Company, as amended 4(b) By-Laws of the Company, as amended 4(c) Form of Indenture between the Company and The Fifth Third Bank, as Senior Debt Trustee, relating to the Senior Debt Securities 4(d) Form of Indenture between the Company and Star Bank, National Association, as Subordinated Debt Trustee, relating to the Subordinated Debt Securities 5 Opinion of counsel 12 Statement of computation of ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends 23(a) Consent of Independent Auditors 23(b) Consent of Counsel (included in Exhibit 5) 24 Powers of Attorney
II-1 20
EXHIBIT NO. 25(a) Statement of Eligibility on Form T-1 of The Fifth Third Bank, as Senior Debt Trustee, under the Trust Indenture Act of 1939, as amended, relating to the Senior Indenture 25(b) Statement of Eligibility on Form T-1 of Star Bank, N.A., as Subordinated Debt Trustee, under the Trust Indenture Act of 1939, as amended, relating to the Subordinated Indenture
The Company will furnish to the Commission upon request its long-term debt instruments not listed in this Item. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: *(a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. *(b) That for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. *(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. *(i) (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) II-2 21 under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. *(j) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. - --------------- *Paragraph references correspond to those of Item 512 of Regulation S-K. II-3 22 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Cincinnati, Ohio, as of the 28th day of January, 1994. CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ WILLIAM A. TSACALIS ------------------------------- William A. Tsacalis Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment to Registration Statement has been signed by the following persons in the capacities indicated as of the 28th day of January, 1994. SIGNATURE TITLE * Chairman of the Board and Carl H. Lindner Chief Executive Officer * Director, President and Keith E. Lindner Chief Operating Officer * Director S. Craig Lindner Director Hugh F. Culverhouse /s/ FRED J. RUNK Director, Vice President and Fred J. Runk Chief Financial Officer Director Jean H. Sisco * Director Ronald F. Walker /s/ WILLIAM A. TSACALIS Vice President and Controller William A. Tsacalis (Chief Accounting Officer)
- --------------- * Pursuant to Power of Attorney /s/ WILLIAM A. TSACALIS William A. Tsacalis II-4 23 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ---- ----------------------------------------------------------------------------------- 1 Form of Underwriting Agreement Basic Provisions (with forms of Terms Agreement attached) *4(a) Restated Certificate of Incorporation of the Company, as amended *4(b) By-Laws of the Company, as amended **4(c) Form of Indenture between the Company and The Fifth Third Bank, as Senior Debt Trustee, relating to the Senior Debt Securities **4(d) Form of Indenture between the Company and Star Bank, N.A., as Subordinated Debt Trustee, relating to the Subordinated Debt Securities **5 Opinion of counsel **12 Statement of computation of ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividends **23(a) Consent of Independent Auditors **23(b) Consent of Counsel (included in Exhibit 5) **24 Powers of Attorney **25(a) Statement of Eligibility on Form T-1 of The Fifth Third Bank, as Senior Debt Trustee, under the Trust Indenture Act of 1939, as amended, relating to the Senior Indenture **25(b) Statement of Eligibility on Form T-1 of Star Bank, N.A., as Subordinated Debt Trustee, under the Trust Indenture Act of 1939, as amended, relating to the Subordinated Indenture
- --------------- * Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1992. ** Previously filed. II-5 EX-1 2 CHUQUITA BRANDS EXHIBIT 1 1 DRAFT 1/27/94 CHIQUITA BRANDS INTERNATIONAL, INC. Securities Underwriting Agreement Basic Provisions January, 1994 Chiquita Brands International, Inc., a New Jersey corporation (the "Company"), proposes to issue and sell from time to time senior debt securities, subordinated debt securities (collectively, "Debt Securities"), preferred stock and common stock registered under the registration statement referred to in Paragraph 1(a) ("Underwritten Securities"). If specified in a Terms Agreement (as defined in Paragraph 2), the Company proposes to grant to the underwriters an option to purchase up to that amount of Underwritten Securities specified in such Terms Agreement (the "Option Securities"). The Debt Securities will be issued under indentures (as they may be amended or supplemented from time to time, the "Indentures"), more particularly described in a Terms Agreement, between the Company and the trustees named therein (the "Trustee(s)"), in one or more series, which series may vary as to interest rates, maturities, redemption provisions, conversion or exchange provisions, selling prices and other terms, with all such terms for any particular series of the Debt Securities being determined at the time of sale. The preferred stock will be issued in one or more series, which series may vary as to voting rights, dividends, optional and mandatory redemption provisions, liquidation preference and conversion or exchange provisions and other terms, with all such terms for any particular series or issue of the preferred stock being determined at the time of issue. The Underwritten Securities will be sold pursuant to one or more Terms Agreements, for resale in accordance with terms of offering determined at the time of sale. The Underwritten Securities (together with the Option Securities) involved in any such offering are hereinafter referred to as the "Securities." The firm or firms which agree to purchase all or any portion of the Securities are hereinafter referred to as the "Underwriters" of such Securities, and the representative or representatives of the Underwriters, if any, specified in a Terms Agreement are hereinafter referred to as the "Representatives"; provided, however, that if the Terms Agreement does not specify any representative of the Underwriters, the term "Representatives," as used in this Agreement (other than in Paragraphs 1(b), 7 and 9 and the second sentence of Paragraph 2) shall mean the Underwriters. 2 2 1. Representations, Warranties and Agreements of the Company. The Company represents and warrants to and agrees with each Underwriter that: (a) A registration statement on Form S-3 with respect to the Securities (i) has been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") thereunder, (ii) has been filed by the Company with the Commission under the Act and (iii) has been declared effective by the Commission. If any post- effective amendment to such registration statement has been filed with the Commission prior to the execution and delivery of the Terms Agreement, the most recent such amendment has been declared effective by the Commission. Copies of such registration statement (including all documents incorporated by reference in the latest prospectus contained therein) as amended as of the date of the Terms Agreement have been delivered by the Company to the Representatives. As used in this Agreement, "Registration Statement" means such registration statement (including documents incorporated by reference therein), as it became effective under the Act, including all exhibits (other than Form T-1) and financial schedules thereto, as amended as of the date of the Terms Agreement; "Basic Prospectus" means the prospectus (including documents incorporated by reference therein) included in the Registration Statement; and "Prospectus" means the Basic Prospectus, together with any prospectus amendment or supplement specifically relating to the Underwritten Securities to be purchased by the Underwriters pursuant to the Terms Agreement, as filed with, or mailed for filing to, the Commission pursuant to Rule 424(b) of the Rules and Regulations ("Rule 424"). As of the date of the Terms Agreement the Commission has not issued any order preventing or suspending the use of any Prospectus. (b) The Registration Statement and the Prospectus comply, and, at all times when a prospectus is required to be delivered in connection with offers or sales of the Underwritten Securities, the Registration Statement, any amendment thereof, the Prospectus and the Prospectus as amended or supplemented, including any document filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date of such Registration Statement or Prospectus, as the case may be, and incorporated by reference in such Registration Statement or Prospectus ("Incorporated Documents"), will comply, as to form in all material respects with the requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), if applicable, and the rules 3 3 and regulations under such acts; the Indenture, if any, specified in any Terms Agreement including any amendments and supplements thereto, will comply as to form in all material respects with the requirements of the Trust Indenture Act and the rules and regulations of the Commission thereunder; and the Registration Statement and the Prospectus (including any Incorporated Documents) do not contain, and at all times when a prospectus is required to be delivered in connection with offers or sales of Underwritten Securities, will not include, 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, provided that the Company makes no representation or warranty as to information contained in or omitted from the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives, if any, specifically for inclusion therein. The Indenture, if any, described in the Terms Agreement has been qualified under the Trust Indenture Act. (c) The documents which are incorporated by reference in the Registration Statement and the Prospectus have been, and each Incorporated Document will be, prepared by the Company in conformity with the requirements of the Act and the Exchange Act and the rules and regulations thereunder and such documents have been, or in the case of an Incorporated Document will be, timely filed as required thereby. Copies of each of the documents incorporated by reference in the Registration Statement and the Prospectus, together with satisfactory evidence of the filing thereof, have been delivered by the Company to the Representatives. (d) The Company has all necessary corporate power and authority to execute and deliver the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and perform its obligations under the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") has been duly authorized, executed and delivered by the Company, constitutes the valid and binding agreement of the Company and is enforceable against the Company in accordance with its terms, subject to the qualification that the enforceability of the Company's obligations thereunder and hereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights, by general equity principles and by public policy restrictions on provisions relating to indemnification. (e) The execution, delivery and performance of the Terms Agreement (including the provisions of this 4 4 "Underwriting Agreement Basic Provisions") and the consummation of the transactions contemplated therein and herein and compliance by the Company with the provisions of the Underwritten Securities and the Indenture, if any, described in the Terms Agreement will not conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of its Significant Subsidiaries (as defined in Paragraph 13) pursuant to the terms of, or constitute a default (or an event which with the giving of notice or the lapse of time or both will constitute a default) under, any agreement, indenture or instrument, or result in a violation of the corporate charter or by-laws of the Company or any of its Significant Subsidiaries or any law, treaty, order, rule, regulation or determination of any arbitrator, court or governmental agency having jurisdiction over the Company, any of its Significant Subsidiaries or their property. Except as required by the Act, the Trust Indenture Act, if applicable, the Exchange Act, and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and the Indenture, if any, described in the Terms Agreement. (f) Since the respective dates as of which information is given in the Registration Statement and the Prospectus and prior to the Delivery Date (as defined in Paragraph 4 hereof), there has not been, and there will not have been, any material change in the capital stock of the Company, any material increase in the long-term debt of the Company or any of its Significant Subsidiaries or any material adverse change in, or any development which might reasonably be expected to have a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. (g) To the best knowledge of the Company, Ernst & Young, whose reports are included or incorporated by reference in the Registration Statement and the Prospectus, are independent public accountants as required by the Act and the Rules and Regulations. (h) On the Delivery Date (i) the Indenture, if any, described in the Terms Agreement will have been validly authorized, executed and delivered by the Company, will have been duly qualified under the Trust Indenture Act and will constitute the valid and legally binding obligation of the Company, enforceable in accordance with its terms; (ii) the Debt Securities, if any, described in the Terms Agreement will have been validly authorized for issuance, and, upon execution, authentication, delivery and payment therefor as provided in this Agreement and such Indenture, will be 5 5 validly issued and outstanding, and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits of such Indenture; (iii) such Indenture will conform to the descriptions thereof in the Prospectus; (iv) if any Securities to be issued are convertible or exchangeable, the shares of capital stock issuable upon conversion or exchange are duly and validly authorized, have been duly reserved for issuance upon conversion or exchange of the Securities and, when issued upon the conversion or exchange of the Securities, will be duly and validly issued, fully paid and non-assessable; (v) the common stock and preferred stock, if any, described in the Terms Agreement have been duly and validly authorized and when issued will be fully paid and non-assessable; (vi) no further approval or authority of the stockholders or the Board of Directors of the Company will be required for the issuance and sale of the Securities as contemplated herein or the issuance of the shares of capital stock upon conversion or exchange of the Securities; and (vii) the Securities will conform to the description thereof in the Prospectus. (i) The Company and each of its Significant Subsidiaries have been duly organized, are validly existing and in good standing under the laws of their respective jurisdictions of incorporation and are duly qualified to do business and in good standing as foreign corporations in each jurisdiction in which their respective ownership of property or lease of property or the conduct of their respective businesses requires such qualification and in which the failure to qualify might reasonably be expected to have, singularly or in the aggregate with all such failures, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. Each of the Company and its Significant Subsidiaries has the corporate power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged. All of the authorized and outstanding shares of capital stock of the Company are duly authorized, validly issued and outstanding and are fully paid and non-assessable, with no personal liability attaching to the ownership thereof. All outstanding shares of capital stock of the Significant Subsidiaries of the Company are duly authorized, validly issued and outstanding, fully paid and non-assessable and, except for director's and employee's qualifying shares and other nominal interests in certain non-U.S. Significant Subsidiaries, are owned, directly by the Company or a wholly-owned subsidiary of the Company (except that 356,400 common shares of the 7,302,000 common shares outstanding of United Brands Japan, Ltd. are held by other shareholders) free and clear of any lien, claim, encumbrance, restriction upon voting or transfer, preemptive rights or any other claim of any third party, except that 6 6 all of the issued and outstanding shares of Chiriqui Land Company are pledged to secure a Financing Agreement between Chiriqui Land Company and Overseas Private Investment Corporation dated as of March 16, 1987, with a maximum principal balance of $26,500,000. (j) Neither the Company nor any of its Significant Subsidiaries (i) is in default, and no event has occurred which, with notice or lapse of time or both, may constitute such a default, under any lease, license, indenture, mortgage, deed of trust, note, bank loan or other evidence of indebtedness or any other agreement, understanding or instrument to which the Company or any such Significant Subsidiary is a party or by which the Company or any such Significant Subsidiary or any property of the Company or any such Significant Subsidiary may be bound or affected, the effect of which default might reasonably be expected to have, singularly or in the aggregate with all such defaults, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole, or (ii) is in violation of the Company's or any such Significant Subsidiary's corporate charter and by-laws or any law, ordinance, governmental rule or regulation or court decree to which it may be subject or has failed to obtain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, which violation or failure might reasonably be expected to have, singularly or in the aggregate with all such violations and failures, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. (k) The Company and each of its Significant Subsidiaries owns, or has valid rights to use, all items of real and personal property which are material to the business of the Company and its subsidiaries taken as a whole, free and clear of all liens, encumbrances and claims which might reasonably be expected to materially interfere with the conduct of the business of the Company and its subsidiaries taken as a whole. The Company and each of its Significant Subsidiaries (i) carries or, in the case of a Significant Subsidiary is covered by, insurance in such amounts and covering such risks as is generally maintained in the same general area by companies of established repute engaged in the same or similar business, and (ii) owns or possesses adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, permits and certificates from governmental authorities necessary for the conduct of its business and has no reason to believe that the conduct of its business will conflict with, and has not received any 7 7 notice of any claim of conflict with, the rights of others in respect thereof which conflict might reasonably be expected to have, singularly or in the aggregate with all such conflicts, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. (l) Except as disclosed in the Registration Statement and the Prospectus, there is no litigation or proceeding pending before or by any court or governmental agency, authority or body, or any arbitrator or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries which (i) would affect the subject matter of the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") or the transactions contemplated by the Prospectus or (ii) might be expected to have, singularly or in the aggregate with all such litigation and proceedings, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. (m) The financial statements (including the related notes and supporting schedules) filed as part of or incorporated by reference in the Registration Statement or included or incorporated by reference in the Prospectus present fairly in accordance with generally accepted accounting principles the consolidated financial condition and results of operations of the Company, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (n) No relationship, direct or indirect, exists between or among the Company or any of its Significant Subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or of any of its Significant Subsidiaries, on the other hand, which is required by the Act or by the Rules and Regulations to be described in the Registration Statement and the Prospectus which is not so described or is not adequately described. (o) Except as disclosed in the Registration Statement and the Prospectus, no labor disturbance by the employees of the Company or any of its Significant Subsidiaries exists or, to the knowledge of the Company, is threatened which might reasonably be expected to have, singularly or in the aggregate with all such disturbances, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. 8 8 (p) Except as described in the Registration Statement and Prospectus, the Company and each of its Significant Subsidiaries has fulfilled its obligations, if any, under the minimum funding standards of the United States Retirement Income Security Act of 1974 ("ERISA") and the regulations and published interpretations thereunder with respect to each "plan" (as defined in ERISA and such regulations and published interpretations) of the Company or any of its Significant Subsidiaries and each such plan is in compliance in all material respects with the presently applicable provisions of ERISA and such regulations and published interpretations, and has not incurred any liability to the Pension Benefit Guaranty Corporation or to any such plan under Title IV of ERISA. (q) There has been no storage, disposal, generation, manufacture, refinement, transportation, production or treatment of toxic wastes, solid wastes, hazardous wastes or hazardous substances by the Company or any of its Significant Subsidiaries (or, to the best knowledge of the Company, any of their predecessors in interest) at or upon any of the property owned or leased by the Company or its Significant Subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which, singularly or in the aggregate with all such violations and remedial actions, might reasonably be expected not to have a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole. There has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property, of any toxic wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or any of its Significant Subsidiaries or with respect to which the Company or any of its Significant Subsidiaries have knowledge. The terms "hazardous wastes" and "hazardous substances" shall have the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection. 2. Purchases and Offering of Securities. The obligation of the Underwriters to purchase, and the Company to sell, any Underwritten Securities will be evidenced by an exchange of a telegram, telex or other written communication (the "Terms Agreement") delivered at the time the Company determines to sell the Underwritten Securities. Each Terms Agreement will be substantially in the form of Annex II(A) or (B) attached hereto and will incorporate by reference the provisions of this Agreement, except as otherwise provided therein, and will specify the firm or firms which will be Underwriters, the names of any 9 9 Representatives, the amount to be purchased by each Underwriter, the purchase price to be paid by the Underwriters and certain terms of the Securities and whether any of the Securities may be sold to institutional investors pursuant to Delayed Delivery Contracts (as defined below). The Terms Agreement specifies any details of the terms of the offering which should be reflected in a post- effective amendment to the Registration Statement or the supplement to the Prospectus relating to the offering of the Underwritten Securities. The obligations of the Underwriters to purchase the Underwritten Securities will be several and not joint. It is understood that the Underwriters propose to offer the Securities for sale as set forth in the Prospectus. If specified in a Terms Agreement, on the basis of the representations, warranties and covenants herein contained, and subject to the terms and conditions herein set forth, the Company grants an option to the several Underwriters to purchase, severally and not jointly, up to that amount of the Option Securities, as shall be specified in the Terms Agreement, from the Company at the same price as the Underwriters shall pay for the Underwritten Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters and may be exercised in whole or in part at any time (but not more than once) on or before the thirtieth day after the date of the Terms Agreement upon written or telegraphic notice by the Representatives to the Company setting forth (i) the amount of the Option Securities as to which the several Underwriters are exercising the option and (ii) the date, time and place of delivery of the Option Securities. The amount of Option Securities to be purchased by each Underwriter shall be the same percentage of the total amount of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, as adjusted by the Representatives in such manner as they deem advisable to avoid fractional shares/units. If the Terms Agreement provides for sales of Securities pursuant to delayed delivery contracts, the Company authorizes the Underwriters to solicit offers to purchase Securities pursuant to delayed delivery contracts substantially in the form of Annex I attached hereto ("Delayed Delivery Contract") with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are only to be with institutional investors, including commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions. On the Delivery Date the Company will pay, as compensation, to the Representatives for the accounts of the Underwriters, the fee set forth in such Terms Agreement in respect of the amount of Securities to be sold pursuant to Delayed Delivery Contracts ("Contract Securities"). The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts, the Contract Securities will be deducted from the Securities to be purchased by the several Underwriters and the aggregate amount 10 10 of Securities to be purchased by each Underwriter will be reduced pro rata in proportion to the amount of Securities set forth opposite each Underwriter's name in such Terms Agreement, except to the extent that the Representatives determine that such reduction shall be otherwise than pro rata and so advise the Company. The Company will advise the Representatives not later than the business day prior to the Delivery Date of the amount of Contract Securities. 3. Conditions of Company's Obligations; Defaulting Underwriters. The Company shall not be obligated to deliver any Underwritten Securities except upon payment for all Underwritten Securities to be purchased pursuant to this Agreement as hereinafter provided. If any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non- defaulting Underwriters shall be obligated to purchase the Underwritten Securities which the defaulting Underwriter agreed but failed to purchase in the respective proportions which the amount of Underwritten Securities set forth in the Terms Agreement to be purchased by each remaining non-defaulting Underwriter bears to the aggregate amount of Underwritten Securities set forth in such Terms Agreement for all the remaining non-defaulting Underwriters; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any Underwritten Securities if the aggregate amount of Underwritten Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase exceeds 9.09% of the total amount of Underwritten Securities, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the amount of Underwritten Securities set forth in the Terms Agreement to be purchased by it. If the foregoing maximums are exceeded, the remaining non- defaulting Underwriters, or those other underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not be obligated, to purchase (in such proportions as may be agreed upon among them) all the Underwritten Securities. If the foregoing maximums are exceeded and the remaining Underwriters or other underwriters satisfactory to the Representatives do not elect to purchase the Underwritten Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of expenses to any non-defaulting Underwriter as set forth in Paragraph 6. Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company for damages caused by such Underwriter's default. If other underwriters are obligated or agree to purchase the Underwritten Securities of a defaulting Underwriter, either the Representatives or the Company may postpone the Delivery Date for up to seven full business days in order to effect any changes that, in the opinion of counsel for the Company or counsel for 11 11 the Underwriters, may be necessary in the Registration Statement, the Prospectus or any other document or arrangement. 4. Delivery of and Payment for the Underwritten Securities. Delivery of and payment for the Underwritten Securities shall be made at the time and place specified in the Terms Agreement, on the fifth business day following the date of the Terms Agreement or at such other location, time and date as shall be determined by agreement between the Representatives and the Company. This date and time are sometimes referred to as the "Delivery Date". On the Delivery Date, the Company shall deliver the Underwritten Securities to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price for the Underwritten Securities by certified or official bank checks payable in New York Clearing House (next day) funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. The Securities shall be prepared in such form, names and denominations as the Representatives shall request in writing not less than three full business days prior to the Delivery Date. For the purpose of expediting the checking and packaging of the Underwritten Securities, the Company shall make the Underwritten Securities available, or cause such Underwritten Securities to be available, for inspection by the Representatives in New York City, New York not later than 2:00 P.M., New York City time, on the business day prior to the Delivery Date. 5. Further Agreements of the Company. The Company agrees: (a) To furnish promptly to the Representatives and to counsel for the Underwriters a signed copy of the Registration Statement as originally filed, and each amendment or supplement thereto filed, with the Commission, including all consents and exhibits filed therewith; (b) To deliver promptly to the Representatives and to each Underwriter such number of conformed copies of the Registration Statement as originally filed and each amendment thereto (excluding exhibits other than this "Underwriting Agreement Basic Provisions", the Indentures and the computation of the ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends) and the Prospectus and any amended or supplemented Prospectus as the Representatives may reasonably request during the period referred to in clause (c) of this Paragraph 5; (c) To file timely with the Commission during such period following the date of each Terms Agreement as a prospectus is required to be delivered in connection with offers or sales of Underwritten Securities any amendment or supplement to the Registration Statement or the Prospectus 12 12 that may, in the reasonable judgment of the Company or the Representatives, be required by the Act or requested by the Commission and approved by the Representatives; (d) Prior to filing with the Commission during the period referred to in clause (c) of this Paragraph 5 (i) any amendment or supplement to the Registration Statement or (ii) the Prospectus and any amendment or supplement thereto, or (iii) any document incorporated by reference in any of the foregoing, to furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the consent of the lead Representative to the filing, which consent shall not be unreasonably withheld; (e) To advise the Representatives promptly (i) when any post-effective amendment to the Registration Statement relating to or covering the Underwritten Securities becomes effective, (ii) of any request or proposed request by the Commission for an amendment or supplement to the Registration Statement (to the extent that the amendment or supplement relates to or covers the Underwritten Securities) or to the Prospectus or for any additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order directed to the Prospectus or the initiation or threat of any stop order proceeding, (iv) of receipt by the Company of any notification with respect to the suspension of the qualification (or exemption from qualification) of the Underwritten Securities for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose, and (v) of the happening of any event prior to the termination of any offering of Underwritten Securities which makes untrue any statement of a material fact made in the Registration Statement or the Prospectus, or which requires the making of a change in the Registration Statement or the Prospectus in order to make any material statement therein not misleading or which requires the filing of any document under the Exchange Act; (f) If, during the period referred to in clause (c) of this Paragraph 5, the Commission shall issue a stop order or any order preventing or suspending the effectiveness of the Registration Statement, to make every reasonable effort to obtain the lifting of that order at the earliest possible time; (g) As soon as practicable, but not later than 16 months after the date of each Terms Agreement, to make generally available to its security holders and to deliver to the Representatives an earning statement of the Company and its subsidiaries, covering a period of at least 12 months beginning after the later of (i) the effective date of the Registration Statement, (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of such 13 13 Terms Agreement or (iii) the date of the Company's most recent Annual Report on Form 10-K filed with the Commission prior to the date of such Terms Agreement, which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act; (h) To endeavor to qualify the Underwritten Securities for offer and sale under the securities laws of such jurisdictions as the Representatives may reasonably request, except for such jurisdictions where the qualification of the Underwritten Securities would require the Company to qualify to do business as a foreign corporation or file a general consent to service of process; (i) If the Underwritten Securities are to be listed on a securities exchange, to use its best efforts to complete the listing of the Underwritten Securities to be sold by the Company on such exchange; (j) Subject to Paragraph 5(d) hereof, until the termination of any offering of Underwritten Securities, to file in a timely manner all documents and any amendments of previously filed documents required to be filed pursuant to Section 13, 14 or 15(d) of the Exchange Act; (k) During the period of three years after the date of any Terms Agreement, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, if any, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K and definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other information concerning the Company as the Representatives may reasonably request; (l) To apply the net proceeds of the sale of the Underwritten Securities as set forth in the Prospectus; and (m) To not (i) in the event of an offering of common stock or convertible preferred stock, offer, sell, contract to sell or otherwise dispose of any shares of common stock or any securities convertible into or exchangeable or exercisable for or any rights to purchase or acquire common stock for that period specified in the Terms Agreement, other than shares of common stock or options to purchase common stock granted under the Company's employee benefit plans; and (ii) for a period beginning at the time of execution of the Terms Agreement and ending on the Delivery Date, in the event of an offering of Debt Securities, offer, sell, contract to sell or otherwise dispose of any debt securities of the Company with maturities longer than one 14 14 year, other than (A) the Debt Securities to the Underwriters or the Contract Securities; (B) borrowings in the ordinary course of business; and (C) other borrowings in an aggregate principal amount not to exceed $10 million, in either case without the prior consent of the Representatives. 6. Expenses. The Company agrees to pay the costs incident to the authorization, issuance, sale and delivery of the Underwritten Securities and any taxes payable in that connection; the costs incident to the preparation, printing and filing under the Act of the Registration Statement and any amendments, supplements and exhibits thereto, and the Prospectus and any amendment or supplement to the Prospectus; the costs of distributing the Registration Statement as originally filed and each amendment and any post-effective amendments thereof (including exhibits), the Prospectus and any amendment or supplement to the Prospectus as provided in this Agreement; the costs of printing this Agreement and the Indenture; the costs of filings with the National Association of Securities Dealers, Inc.; fees paid to rating agencies in connection with the rating of the Underwritten Securities; the costs incident to the listing of the Underwritten Securities on any securities exchange; the fees and expenses of qualifying the Underwritten Securities under the securities laws of the several jurisdictions as provided in this Paragraph and of preparing and printing a Blue Sky Memorandum, and a memorandum concerning the legality of the Underwritten Securities as an investment (including reasonable fees and expenses of counsel to the Underwriters in connection therewith); the cost of preparing the Underwritten Securities; the fees and expenses of any Trustee and any agent of any Trustee and the fees and disbursements of counsel for any Trustee in connection with the Indenture and the Underwritten Securities; any transfer agent's fees; and all other costs and expenses incident to the performance of the obligations of the Company under this Agreement; provided that except as provided in this Paragraph and in Paragraphs 3 and 10, the Underwriters shall pay all of their own costs and expenses, including the fees and expenses of their counsel, any transfer taxes on the Underwritten Securities which they may sell and the expenses of advertising any offering of the Underwritten Securities made by the Underwriters; provided, however, that the Company shall have no obligation to pay the expenses of a defaulting Underwriter, as set forth in Paragraph 3. 7. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of the Act, from and against any loss, claim, damage or liability, joint or several, and any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Underwritten Securities), to which that Underwriter or controlling person may become subject, under the Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement 15 15 or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, any Incorporated Document or the Registration Statement or the Prospectus, in each case as amended or supplemented, or (ii) 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 and shall reimburse each Underwriter and each such controlling person for any legal and other out of pocket expenses reasonably incurred by that Underwriter or controlling person in 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; 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, any untrue statement or alleged untrue statement or omission or alleged omission made in any blue sky application, the Registration Statement, the Prospectus or any amendment thereof or supplement thereto, made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives, if any, specifically for inclusion therein; and provided further that as to any Prospectus this indemnity agreement shall not inure to the benefit of any Representative, Underwriter or any person controlling an Underwriter on account of any loss, claim, damage, liability or action arising from the sale of Underwritten Securities to any person by that Underwriter if that Underwriter failed to send or give a copy of the Prospectus (or the Prospectus as amended or supplemented) to such person within the time required by the Act, and the untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in such Prospectus was remedied or corrected in such Prospectus, unless such failure resulted from non-compliance by the Company with Paragraph 5(b) hereof. For purposes of the second proviso to the immediately preceding sentence, the term Prospectus shall not be deemed to include the documents incorporated therein by reference, and no Underwriter shall be obligated to send or give any supplement or amendment to any document incorporated by reference in any Prospectus to any person other than a person to whom such Underwriter had delivered such incorporated document or documents in response to a written request therefor. The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to any Underwriter or any such controlling person of that Underwriter. (b) Each Underwriter severally, and not jointly, shall indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of the Act, from and against any loss, claim, damage, expense or liability, joint or several, and any action in respect thereof, to which the Company or any such director or officer or controlling person may become subject, under the Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon any untrue statement or 16 16 alleged untrue statement of a material fact contained in any blue sky application, the Registration Statement, the Prospectus or the Registration Statement or Prospectus, in each case as amended or supplemented, or arises out of, or is based upon, 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, 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 information furnished in writing to the Company by or on behalf of that Underwriter through the Representatives, if any, specifically for inclusion therein, and shall reimburse the Company or any such director or officer or controlling person for any legal and other expenses reasonably incurred by the Company or any such director or officer or controlling person in investigating or defending or preparing to defend against any such loss, claim, damage, liability or action. The foregoing indemnity agreement is in addition to any liability which any Underwriter may otherwise have to the Company or any such director, officer or controlling person. (c) Promptly after receipt by an indemnified party under this Paragraph 7 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 under this Paragraph 7, 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 to an indemnified party otherwise than under this Paragraph 7. 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 Paragraph 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, if the defendants in any such action include both an indemnified party and an indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties under this Paragraph 7 shall have the right to employ not more than one counsel to represent them and, in that event, the reasonable fees and expenses of not more than one such separate counsel shall be paid by the indemnifying party. No indemnifying party shall be liable for any settlement of any claim or action effected without its written consent. 17 17 (d) If the indemnification provided for in this Paragraph 7 shall be for any reason unavailable or insufficient to hold the indemnified party harmless, 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 Underwriters on the other hand from the offering of the Underwritten 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 Underwriters on the other hand with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Underwritten Securities (before deducting expenses) received by the Company bear to the total underwriting discounts, commissions and fees received by the Underwriters with respect to such offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Paragraph 7(d) were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take 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 Paragraph 7(d) shall be deemed to include, for purposes of this Paragraph 7(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Paragraph 7(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Underwritten Securities underwritten by it and distributed to the public was offered to the public exceeds the amount of any damages which such Underwriter 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 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The 18 18 Underwriters' obligations to contribute as provided in this Paragraph 7(d) are several in proportion to their respective underwriting obligations (or proceeds) and not joint. (e) The Underwriters severally confirm that the statements with respect to the offering to the public of the Underwritten Securities set forth on the cover page of, and under the captions "Plan of Distribution" and "Underwriting" in, the Registration Statement and the Prospectus are correct and were furnished in writing to the Company by or on behalf of the Underwriters severally for inclusion in the Registration Statement and the Prospectus. (f) The agreements contained in this Paragraph 7 and the representations, warranties and agreements of the Company in Paragraphs 1 and 5 shall survive the delivery of the Underwritten 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 indemnified party. 8. Conditions of Underwriters' Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy on the date of the Terms Agreement and the Delivery Date, of the representations and warranties of the Company contained herein, to performance by the Company of its obligations hereunder and to each of the following additional terms and conditions: (a) The Prospectus shall have been timely filed with the Commission in accordance with Paragraph 5(c) of this Agreement; at or before the Delivery Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued, and prior to that time no stop order proceeding shall have been initiated or threatened by the Commission; any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with or otherwise satisfied; and the Company shall not have filed with the Commission the Prospectus or any amendment or supplement to the Registration Statement or the Prospectus or any Incorporated Document without the consent of the lead Representative, provided that after the Delivery Date no such consent shall be unreasonably withheld. (b) No Underwriter shall have discovered and disclosed to the Company, on or prior to the Delivery Date, that the Registration Statement or the Prospectus or any amendment or supplement thereto or any Incorporated Document contains an untrue statement of a fact which, in the opinion of Simpson Thacher & Bartlett, counsel to the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this 19 19 Agreement, the Underwritten Securities and the Indenture and the form of Registration Statement and the Prospectus, other than financial statements and other financial data, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be satisfactory in all respects to Simpson Thacher & Bartlett, counsel to the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. (d) The Company shall have furnished to the Representatives the opinion of Charles R. Morgan, Vice President, General Counsel and Secretary of the Company, addressed to the Underwriters and dated the Delivery Date and, if Option Securities are purchased, at any date after the Delivery Date as specified in a Terms Agreement, an additional opinion from such counsel, addressed to the Underwriters and dated such later date, confirming that the statements expressed as of the Delivery Date in such opinion remain valid as of such later date, to the effect that: (i) The Company has been duly organized and each of its Designated Subsidiaries (as defined in Paragraph 13) is duly incorporated; the Company and its Designated Subsidiaries are validly existing and in good standing under the laws of their respective jurisdictions of incorporation and have all requisite corporate power and authority to own and operate their properties and to conduct the businesses in which they are engaged; (ii) All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable, with no personal liability attaching to the ownership thereof; all the outstanding shares of capital stock of each of the Company's Designated Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable and, except for director's or employee's qualifying shares and other nominal interests in certain non-U.S. Designated Subsidiaries, are owned, directly by the Company or a wholly-owned subsidiary of the Company (except that 356,400 common shares of the 7,302,000 common shares outstanding of United Brands Japan, Ltd. are held by other shareholders) free and clear of any lien, claim, encumbrance, restriction upon voting or transfer, preemptive rights or any other claim of any third party known to such counsel, except that all of the issued and outstanding shares of Chiriqui Land Company are pledged to secure a Financing Agreement between Chiriqui Land Company and Overseas Private Investment Corporation dated as of March 16, 1987, with a maximum principal balance of $26,500,000; (iii) The Indenture, if any, described in the Terms Agreement has been duly authorized, executed and delivered by the Company and has been duly qualified under the Trust 20 20 Indenture Act; the Debt Securities, if any, described in the Terms Agreement are in a form contemplated by such Indenture and have been duly authorized by all necessary corporate action; such Debt Securities other than any Contract Securities have been duly executed, authenticated, issued and delivered; such Indenture and such Debt Securities other than any Contract Securities constitute, and any Contract Securities, when executed, authenticated, issued and delivered in the manner provided in the Indenture and sold pursuant to Delayed Delivery Contracts, will constitute, valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to the qualification that the enforceability of the Company's obligations thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights and by general equity principles; (iv) If any Securities to be issued are convertible or exchangeable, the shares of capital stock into which the Securities will be initially convertible or exchangeable are duly and validly authorized; have been duly reserved for issuance upon conversion or exchange of the Securities; and when issued upon the conversion or exchange of the Securities, will be duly and validly issued, fully paid and non-assessable; (v) The common stock and preferred stock, if any, described in the Terms Agreement have been duly and validly authorized and issued and are fully paid and non-assessable; (vi) The Securities other than any Contract Securities conform and the Indenture, if any, described in the Terms Agreement and any Contract Securities, when so issued and delivered and sold, will conform, in all material respects to the description thereof contained in the Prospectus; (vii) The Registration Statement has become effective under the Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made within the time period required by Rule 424(b); and no stop order suspending its effectiveness has been issued by the Commission and, to the best of such counsel's knowledge, no proceeding for that purpose is pending or threatened by the Commission; (viii) To the best of such counsel's knowledge, no order directed to any document incorporated by reference in the Prospectus and the Registration Statement has been issued by the Commission and to the knowledge of such counsel, no challenge by the Commission has been made to the accuracy or adequacy of any such document; (ix) The Registration Statement and the Prospectus and any amendment or supplement thereto, as of its date, comply as to form in all material respects with the requirements of 21 21 the Act, the Rules and Regulations thereunder and the Trust Indenture Act, if applicable, and the documents incorporated by reference in the Registration Statement and the Prospectus comply as to form in all material respects with the applicable requirements of the Act or the Exchange Act and the rules and regulations thereunder; (x) The Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and any Delayed Delivery Contracts have been duly authorized, executed and delivered by the Company; (xi) To the best of such counsel's knowledge, the Company is not in violation of its corporate charter or by-laws or in default under any material agreement, indenture or instrument, except to the extent such violations or defaults could not reasonably be expected to have, singularly or in the aggregate, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole; (xii) The Company has all necessary corporate power to execute and deliver the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and the Indenture, if any, described in the Terms Agreement and to perform its obligations under the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions") and under such Indenture; (xiii) The execution, delivery and performance of the Terms Agreement (including the provisions of this "Underwriting Agreement Basic Provisions"), and the issuance and sale of the Underwritten Securities and the compliance with the terms and provisions of the Underwritten Securities and the Indenture, if any, described in the Terms Agreement will not conflict with, or result in the creation or imposition of any material lien, claim, encumbrance, restriction upon any of the assets of the Company or any of its Designated Subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument known to such counsel and to which the Company or any of its Designated Subsidiaries is a party or bound, or result in a violation of the corporate charter or by-laws of the Company or any of its Designated Subsidiaries or any law, treaty, order, rule or regulation or any determination known to such counsel of any arbitrator, court or governmental agency having jurisdiction over the Company, any of the Company's Designated Subsidiaries or any of their properties. Except as required by the Act, the Exchange Act, the Trust Indenture Act, if applicable, and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency in the 22 22 United States is required for the execution, delivery and performance of this Agreement by the Company; (xiv) There are no legal or governmental proceedings to which the Company or any of its Designated Subsidiaries is a party, pending or, to the best of such counsel's knowledge, threatened against the Company or any of its Designated Subsidiaries which (A) might reasonably be expected to have a material adverse effect on the subject matter of the Terms Agreement or the transactions contemplated by the Prospectus or (B) might reasonably be expected to have, singularly or in the aggregate with all such litigation and proceedings, a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Company and its subsidiaries taken as a whole; and (xv) Nothing has come to such counsel's attention that causes him to believe that (A) the Registration Statement as of its effective date contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein are not misleading or (B) the Prospectus as of the Delivery Date contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (such counsel need express no opinion or belief as to the financial statements or other financial or statistical data included in or incorporated by reference in the Registration Statement and the Prospectus). (e) The Company shall have furnished to the Representatives on the Delivery Date a certificate dated the Delivery Date, and on any later date on which Option Securities are purchased if specified in a Terms Agreement, a certificate dated such date, signed on behalf of the Company by either the Company's Chief Executive Officer, President or Executive Vice President and by the Company's Chief Financial Officer or Controller stating that: (i) The representations, warranties and agreements of the Company in Paragraph 1 hereof are true and correct as of such date; the Company has complied with all its agreements contained herein; and the conditions on its part to be fulfilled prior to such date set forth herein have been fulfilled; and (ii) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened; and (iii) They have carefully examined the Registration Statement and the Prospectus and, in their judgment, (A) neither the Registration Statement, as of its effective date, nor the Prospectus, as of the date on which it was filed with the Commission pursuant to Rule 424 of the Rules 23 23 and Regulations, included any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the effective date, no event has occurred which should have been set forth in the Prospectus or a supplement thereto or amendment thereof which has not been set forth in such a supplement or amendment and there has been no document required to be filed under the Exchange Act and the rules and regulations thereunder that upon such filing would be deemed to be incorporated by reference into the Prospectus that has not been so filed. (f) The Company shall have furnished to the Representatives on the Delivery Date and any later date on which Option Securities are purchased if specified in a Terms Agreement, a letter of Ernst & Young, addressed to the Underwriters and dated such date, confirming that they are independent public accountants with respect to the Company within the meaning of the Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as of the date of such letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given or incorporated by reference in the Prospectus, as of a date not more than five days prior to the date of such letter), the conclusions and findings of such firm with respect to the financial information and other matters covered by its letter delivered to the Representatives concurrently with the execution of this Agreement and confirming in all material respects the conclusions and findings set forth in such prior letter. (g) The NASD, upon review of the terms of the public offering of the Underwritten Securities, if any, shall not have objected to the participation by any of the Underwriters in such offering or asserted any violations of the By-Laws of the NASD. (j) In the event of an offering of common stock or convertible preferred stock, the Company shall have furnished to the Representatives a letter agreement of American Financial Corporation ("AFC"), addressed to the Underwriters and dated on or before the date of the Terms Agreement relating to such offering, providing in substance that for that period specified in the Terms Agreement (i) AFC will not, and will cause its direct and indirect subsidiaries (other than the Company and subsidiaries of the Company) not to, sell, offer or contract to sell, sell or grant options, rights or warrants with respect to or otherwise dispose of, directly or indirectly, except to direct or indirect subsidiaries of AFC, any common stock or preferred stock of the Company (or securities convertible into or exchangeable for common stock or preferred stock of the Company) except with the prior written consent of Lehman Brothers Inc. and (ii) AFC has not taken, and will not take, directly or indirectly, and will cause its direct and indirect subsidiaries 24 24 not to take, directly or indirectly, any action that might reasonably be expected to cause or result in stabilization of the price of the common stock or preferred stock of the Company or manipulation of the price of the common stock or preferred stock of the Company. All opinions, letters, certificates and documents mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof if they are exactly in the form set forth above and, if not, or if no particular form is set forth above, only if they are in form and substance reasonably satisfactory to Simpson Thacher & Bartlett, counsel to the Underwriters. 9. Termination. The obligations of the Underwriters hereunder may be terminated by the Representatives, if any, on behalf of the Underwriters (or, if there are no Representatives, by a majority in interest of the Underwriters), in their or its absolute discretion, by notice given to and received by the Company prior to delivery of and payment for the Underwritten Securities, if on or after the date of this Agreement and prior to that time there shall have occurred any of the following: (a) any change, or any development involving a prospective change, in or affecting primarily the business, properties, condition (financial or other), results of operations or prospects of the Company and its subsidiaries taken as a whole that materially impairs the investment quality of the Underwritten Securities, or (b) a general suspension of or material limitation in trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the over-the-counter market or minimum prices shall have been established on one or more of such exchanges or such market, or (c) a general banking moratorium declared by United States federal or New York State authorities, or (d) any downgrading accorded the Company's debt securities or preferred securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading of such rating) or (e)(i) a material adverse change in national or international political, financial or economic conditions or national or international equity markets or currency exchange rates or controls, if the existing effect of any such event, in the reasonable judgment of the Representatives, makes it inadvisable to proceed with the payment for and delivery of the Underwritten Securities or (ii) the engagement by the United States in active military conflict, or an outbreak or significant increase in hostilities which would likely result in the declaration of a national emergency or war, if the existing effect of any such event, in the reasonable judgment of the Representatives, makes it inadvisable to proceed with the payment for and delivery of the Underwritten Securities. 25 25 10. Expenses upon Termination. If the Company shall fail for any reason to tender the Underwritten Securities on the Delivery Date to the Underwriters under this Agreement, or if the Underwriters shall decline to purchase the Underwritten Securities for any reason permitted under this Agreement, the Company shall reimburse the Underwriters for the reasonable fees and expenses of their counsel and for such other out-of-pocket expenses as shall have been incurred by them in connection with this Agreement and the proposed purchase of the Underwritten Securities and upon demand the Company shall pay the full amount thereof to the Representatives. If this Agreement is terminated pursuant to Paragraph 3 by reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse any defaulting Underwriter on account of those expenses. 11. Notices. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made by the Representatives. Any notice to the Underwriters shall be sufficient if given in writing or by telegraph addressed to the Underwriters at the address set forth for that purpose in the Terms Agreement, and any notice to the Company shall be sufficient if, given in writing or by telegraph addressed to Chiquita Brands International, Inc., 250 East Fifth Street, Cincinnati, Ohio 45202, Attention: Charles R. Morgan. 12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company, and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Act and (b) the indemnity agreement of the Underwriters contained in Paragraph 7 of this Agreement shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company. Nothing in this Agreement is intended or shall be construed to give any person other than the persons mentioned in the preceding two sentences any legal or equitable rights, remedy or claim under or in respect of this Agreement or any provision contained herein. 13. Certain Definitions. For purposes of this Agreement, (a) "business day" means any day on which the New York Stock Exchange is open for trading, (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations, (c) "Significant Subsidiary" shall mean each of the entities set forth on Schedule 1 attached hereto and made a part hereof and (d) "Designated Subsidiary" shall mean each of the entities set forth on Schedule 2, attached hereto and made a part hereof. 14. Governing Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the 26 26 State of New York. The Terms Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall together constitute a single instrument. 15. 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. 27 SCHEDULE 1 SIGNIFICANT SUBSIDIARIES
SUBSIDIARY JURISDICTION OF INCORPORATION ---------- ----------------------------- Caribbean Enterprises, Inc. Delaware Chiquita Brands, Inc. Delaware CRH Shipping, Ltd. Bermuda Great White Fleet, Ltd. Bermuda Chiquita Brands Company, North America Delaware Chiquita Europe, B.V. Netherlands Chiquita Banana Company, B.V. Netherlands Chiquita International Trading Company Delaware Chiquita International Limited Bermuda Chiquita Tropical Products Company Delaware Chiriqui Land Company Delaware Maritrop Trading Corporation Delaware Tela Railroad Company Delaware Polymer United, Inc. Delaware Progressive Produce Corporation Ohio Compania Palma Tica Delaware Compania Mundimar Delaware Compania Numar S.A. Costa Rica United Marketing, S.A. Delaware John Morrell & Company Delaware United Brands Japan, Ltd. Japan
28 SCHEDULE 2 DESIGNATED SUBSIDIARIES
SUBSIDIARY JURISDICTION OF INCORPORATION ---------- ----------------------------- Caribbean Enterprises, Inc. Delaware Chiquita Brands, Inc. Delaware Chiquita Brands Company, North America Delaware Chiquita Europe, B.V. Netherlands Chiquita Banana Company B.V. Netherlands Chiquita International Trading Company Delaware Chiquita International Limited Bermuda Chiriqui Land Company Delaware Maritrop Trading Corporation Delaware Tela Railroad Company Delaware Polymer United, Inc. Delaware Compania Mundimar Delaware United Marketing, S.A. Delaware John Morrell & Company Delaware United Brands Japan, Ltd. Japan
29 ANNEX I (Three copies of this Delayed Delivery Contract should be signed and returned to the address shown below so as to arrive not later than 9:00 A.M., New York time, on _______________ __, 19__*.) DELAYED DELIVERY CONTRACT [Insert date of initial public offering] CHIQUITA BRANDS INTERNATIONAL, INC. c/o [Name and address of Underwriter[s]] Gentlemen: The undersigned hereby agrees to purchase from CHIQUITA BRANDS INTERNATIONAL, INC. a New Jersey corporation ("Company"), and the Company agrees to sell to the undersigned, [If one delayed closing, insert---as of the date hereof, for delivery on __________________, 19__ ("Delivery Date"),] [$] ------------------------------- principal amount of the Company's [Insert title of securities] ("Securities"), offered by the Company's Prospectus dated ____________ _____, 19__ and a Prospectus Supplement dated _________, 19__, relating thereto, receipt of copies of which is hereby acknowledged, at __% of the principal amount thereof plus accrued interest from __________________, 19__, if any, and on the further terms and conditions set forth in this Delayed Delivery Contract ("Contract"). [If two or more delayed closings, insert the following: The undersigned will purchase from the Company as of the date hereof, for delivery on the dates set forth below, Securities in the principal amounts set forth below: Delivery Date Principal Amount [$] - ------------------------ ------------- [$] - ------------------------ ------------- - ---------------------------------- */ Insert date which is third full business day prior to Delivery Date under the Terms Agreement. 30 2 Each of such delivery dates is hereinafter referred to as a Delivery Date.] Payment for the Securities that the undersigned has agreed to purchase for delivery on---the--each--Delivery Date shall be made to the Company or its order by certified or official bank check in New York Clearing House (next day) funds at the office of _____________________ at _________ __.M. on-- the--such--Delivery Date upon delivery to the undersigned of the Securities to be purchased by the undersigned---for delivery on such Delivery Date--in definitive fully registered form and in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to--the---such--Delivery Date. It is expressly agreed that the provisions for delayed delivery and payment are for the sole convenience of the undersigned; that the purchase hereunder of Securities is to be regarded in all respects as a purchase as of the date of this Contract; that the obligation of the Company to make delivery of and accept payment for, and the obligation of the undersigned to take delivery of and make payment for, Securities on--the--each--Delivery Date shall be subject only to the conditions that (1) investment in the Securities shall not at--the--such--Delivery Date be prohibited under the laws of any jurisdiction in the United States to which the undersigned is subject and (2) the Company shall have sold to the Underwriters the total principal amount of the Securities less the principal amount thereof covered by this and other similar Contracts. The undersigned represents that its investment in the Securities is not, as of the date hereof, prohibited under the laws of any jurisdiction to which the undersigned is subject and which governs such investment. Promptly after completion of the sale to the Underwriters the Company will mail or deliver to the undersigned at its address set forth below, notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. This Contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that the acceptance of any such Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If this Contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to 31 3 the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is so mailed or delivered. Yours very truly, -------------------------------- (Name of purchaser) By -------------------------------- -------------------------------- (Title of Signatory) -------------------------------- -------------------------------- (Address of Purchaser) Accepted, as of the above date, CHIQUITA BRANDS INTERNATIONAL, INC. By ---------------------------- Name: Title: 32 ANNEX II(A) CHIQUITA BRANDS INTERNATIONAL, INC. ("Company") Debt Securities TERMS AGREEMENT ___________, 199__ CHIQUITA BRANDS INTERNATIONAL, INC. 250 East Fifth Street Cincinnati, Ohio 45202 Attention: Charles R. Morgan Vice President, General Counsel and Secretary Dear Sirs: On behalf of the several Underwriters named in Schedule A hereto and for their respective accounts, we offer to purchase, on and subject to the terms and conditions of the Underwriting Agreement Basic Provisions relating to the Debt Securities of Chiquita Brands International, Inc. dated ___________ __, 1994 ("Underwriting Agreement"), the following securities ("Securities") on the following terms: Debt Securities Title: Rank: [Senior Debt] [Subordinated Debt] Securities Principal Amount: $ Interest Rate: ____% from ___________, 199_, payable: Maturity: Form and Denomination: Optional Redemption: Sinking Fund: Indenture: Delayed Delivery Contracts: [authorized][not authorized] Delivery Date: 33 2 Minimum Contract: Maximum aggregate principal amount: Fee: ___% Purchase Price: __%, plus accrued interest, or amortized original issue discount, if any, from 19__. Expected Reoffering Price: Names and Addresses of Representatives: The respective principal amounts of the Debt Securities to be purchased by each of the Underwriters are set forth opposite their names in Schedule A hereto. The provisions of the Underwriting Agreement are incorporated herein by reference. The Closing will take place at ________ A.M., New York City time, on _________, 199__, at the offices of ______________. The Securities will be made available for checking and packaging at the office of _________ not later than 2:00 p.m., New York City time, on the business day prior to the Delivery Date. Please signify your acceptance by signing the enclosed response to us in the space provided and returning it to us. Very truly yours, 34 SCHEDULE A DEBT SECURITIES Underwriter Principal Amount --------------- Total . . . . . . . . . . . . . . . . . . . =============== 35 To: [Insert name(s) of Representatives or Underwriters] As [Representative[s] of the Several] Underwriter[s], [c/o [Name of Representative]] We accept the offer contained in your [letter] [wire], dated , 19 , relating to ____________ shares of our [Insert title of Securities] (the "Terms Agreement"). We also confirm that, to the best of our knowledge after reasonable investigation, the representations and warranties of the undersigned in the Underwriting Agreement Basic Provisions filed as an exhibit to the undersigned's registration statement on Form S-3 (No. 33-_____) (together with the Terms Agreement, the "Underwriting Agreement") are true and correct, no stop order suspending the effectiveness of the Registration Statement (as defined in the Underwriting Agreement) or of any part thereof has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the undersigned, are contemplated by the Securities and Exchange Commission and, subsequent to the respective dates of the most recent financial statements in the Prospectus (as defined in the Underwriting Agreement), there has been (or in the case of a form of prospectus filed pursuant to Rule 424(b)(1) or (4) there will be, as of the date of such prospectus) no material adverse change in the financial position or results of operations of the undersigned and its subsidiaries except as set forth in or contemplated by the Prospectus. Very truly yours, CHIQUITA BRANDS INTERNATIONAL, INC. By -------------------------------- Name: Title: 36 ANNEX II(B) CHIQUITA BRANDS INTERNATIONAL, INC. ("Company") Equity Securities TERMS AGREEMENT CHIQUITA BRANDS INTERNATIONAL, INC. 250 East Fifth Street Cincinnati, Ohio 45202 ____________ ,19__ Attention: Charles R. Morgan Vice President, General Counsel and Secretary Dear Sirs: On behalf of the several Underwriters named in Schedule A hereto and for their respective accounts, we offer to purchase, on and subject to the terms and conditions of the Underwriting Agreement Basic Provisions relating to the Equity Securities of Chiquita Brands International Inc. dated ___________ __, 1994 ("Underwriting Agreement"), the following securities ("Securities") on the following terms: Equity Securities Title: [Capital Stock, par value $.33 per share] [Preferred Stock, par value $1.00 per share] Number of Shares to be issued: ______ shares [For Preferred Stock: Voting Rights: Preferred Stock Dividends: cash dividends to accrue at an annual rate of $ per share, cumulative and payable quarterly in arrears on _____ __, ______ __, _______ __ and _______ __. Optional Redemption: Mandatory Redemption/Sinking Fund: Liquidation Preference: $ per share plus . Name of Exchange or Market: [New York Stock Exchange] [NASDAQ National Market System] [American Stock Exchange] Period Designated Pursuant to Paragraph 5(m)(i) of the Underwriting Agreement: ___ days. 37 2 Period Designated Pursuant to Paragraph 8(j) of the Underwriting Agreement: ___ days Conversion Provisions: Other Terms Price to Public: $________ per share Underwriting Discounts and Commission: Proceeds to Company: Over-Allotment Option: Delivery Date: A.M. on , 19 , at _____________________ in New York [Clearing House (next day)] [Federal (same-day)] funds. Name of Transfer Agent and Registrar: Names and Addresses of Representatives: [For Common Stock: Name of Exchange or Market: [New York Stock Exchange] [NASDAQ National Market System] [American Stock Exchange] Period Designated Pursuant to Paragraph 5(m)(i) of the Underwriting Agreement: ___ days. Period Designated Pursuant to Paragraph 8(j) of the Underwriting Agreement: ______ days. Other Terms Price to Public: $________ per share Underwriting Discounts and Commission: Proceeds to Company: Over-Allotment Option: Delivery Date: A.M. on , 19 , at _____________________ in New York [Clearing House (next day)] [Federal (same-day)] funds. Name of Transfer Agent and Registrar: Names and Addresses of Representatives:] The respective shares of the Securities to be purchased by each of the Underwriters are set forth opposite their names in Schedule A hereto. 38 3 [It is understood that we may, with your consent, amend this offer to add additional Underwriters and reduce the number of shares to be purchased by the Underwriters listed in Schedule A hereto by the number of shares to be purchased by such additional Underwriters.] The provisions of the Underwriting Agreement are incorporated herein by reference [except that the obligations and agreements set forth in Paragraph 3 ("Conditions of Company's Obligations; Defaulting Underwriters") of the Underwriting Agreement shall not apply to the obligations of the Underwriters to purchase the above Securities]. The Securities will be made available for checking and packaging at the office of at least 24 hours prior to the Delivery Date. [Please signify your acceptance of our offer by signing the enclosed response to us in the space provided and returning it to us.] [Please signify your acceptance of the foregoing by return wire not later than P.M. today.] Very truly yours, 39 SCHEDULE A Number of Underwriter Shares --------------- Total . . . . . . . . . . . . . . . . . . . =============== 40 To: [Insert name(s) of Representatives or Underwriters] As [Representative[s] of the Several] Underwriter[s], [c/o [Name of Representative]] We accept the offer contained in your [letter] [wire], dated , 19 , relating to ____________ shares of our [Insert title of Securities] (the "Terms Agreement"). We also confirm that, to the best of our knowledge after reasonable investigation, the representations and warranties of the undersigned in the Underwriting Agreement Basic Provisions filed as an exhibit to the undersigned's registration statement on Form S-3 (No. 33-_____) (together with the Terms Agreement, the "Underwriting Agreement") are true and correct, no stop order suspending the effectiveness of the Registration Statement (as defined in the Underwriting Agreement) or of any part thereof has been issued and no proceedings for that purpose have been instituted or, to the knowledge of the undersigned, are contemplated by the Securities and Exchange Commission and, subsequent to the respective dates of the most recent financial statements in the Prospectus (as defined in the Underwriting Agreement), there has been (or in the case of a form of prospectus filed pursuant to Rule 424(b)(1) or (4) there will be, as of the date of such prospectus) no material adverse change in the financial position or results of operations of the undersigned and its subsidiaries except as set forth in or contemplated by the Prospectus. Very truly yours, CHIQUITA BRANDS INTERNATIONAL, INC. By -------------------------------- Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----