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Exhibit 1.2
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U.S. FOODSERVICE
(a Delaware corporation)
[ ] Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
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Dated: March [ ], 1999
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Table of Contents
Page
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SECTION 1. Representations and Warranties...................................... 4
SECTION 2. Sale and Delivery to International Managers; Closing................ 17
SECTION 3. Covenants of the Company............................................ 19
SECTION 4. Payment of Expenses................................................. 23
SECTION 5. Conditions of International Managers' Obligations................... 24
SECTION 6. Indemnification..................................................... 29
SECTION 7. Contribution........................................................ 33
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...... 34
SECTION 9. Termination of Agreement............................................ 34
SECTION 10. Default by One or More of the International Managers............... 35
SECTION 11. Default by One or More of the Selling Shareholders or the Company.. 36
SECTION 12. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities......................................................... 37
SECTION 13. Notices............................................................ 38
SECTION 14. Parties............................................................ 38
SECTION 15. Governing Law and Time............................................. 38
SECTION 16. Effect of Headings................................................. 38
SCHEDULES
Schedule A - List of International Managers............ Sch A-1
Schedule B - List of Selling Shareholders.............. Sch B-1
Schedule C - Pricing Information....................... Sch C-1
Schedule D - List of Subject Subsidiaries.............. Sch D-1
Schedule E - List of Registration Rights Agreements.... Sch E-1
Schedule F - List of Counsel to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇.. Sch F-1
EXHIBITS
Exhibit A-1 - Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.. A-1-1
Exhibit A-2 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇....... A-2-1
Exhibit A-3 - Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ A-3-1
Exhibit B - Form of Opinion of Katten, Muchin & Zavis. B-1
Exhibit C - Form of Supplemental Agreement............ C-1
Exhibit D - Form of Letter of Resignation............. D-1
U.S. FOODSERVICE
(a Delaware corporation)
Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
March , 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
▇▇▇▇▇▇▇ Sachs International
Salomon Brothers International Limited
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
as Lead Managers of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
U.S. Foodservice, a Delaware corporation (the "Company"), and the other
persons listed in Schedule B hereto (collectively, the "Selling Shareholders"),
confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇
▇▇▇▇▇") and each of the other international underwriters named in Schedule A
hereto (collectively, the "International Managers", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ International and Salomon
Brothers International Limited are acting as lead managers (in such capacity,
the "Lead Managers"), with respect to (i) the sale by the Selling Shareholders,
acting severally and not jointly, and the purchase by the International
Managers, acting severally and not jointly, of the respective numbers of shares
of Common Stock, par value $.01 per share, of the Company (the "Common Stock")
set forth in Schedules A and B hereto and (ii) the grant by the Company to the
International Managers, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of additional
shares of Common Stock to cover over-allotments, if any. The aforesaid shares
of Common Stock (the "Initial International Securities") to be purchased by the
International Managers and all or any part of the shares of Common Stock
subject to the option described in Section 2(b) hereof (the "International
Option Securities") are hereinafter called, collectively, the "International
Securities".
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Selling Shareholders of
an aggregate of shares of Common Stock (the "Initial U.S. Securities") through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters") for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co, ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., ▇.▇.
▇▇▇▇▇▇▇▇ & Co. and First Union Capital Markets Corp. are acting as
representatives (the "U.S. Representatives", which term shall also include any
underwriter substituted as provided in Section 10 of the U.S. Purchase
Agreement) and the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to additional shares of Common Stock
solely to cover over-allotments, if any (the "U.S. Option Securities"). The
Initial U.S. Securities and the U.S. Option Securities are hereinafter called
the "U.S. Securities". It is understood that the Selling Shareholders are not
obligated to sell and the International Managers are not obligated to purchase
any Initial International Securities unless all of the Initial U.S. Securities
are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
called, collectively, the "Underwriters" and, individually, an "Underwriter";
the Initial International Securities and the Initial U.S. Securities are
hereinafter collectively called the "Initial Securities"; the International
Option Securities and the U.S. Option Securities are hereinafter collectively
called the "Option Securities"; the International Securities and the U.S.
Securities are hereinafter collectively called the "Securities"; and this
Agreement and the U.S. Purchase Agreement are hereinafter called, collectively,
the "Purchase Agreements" and, individually, a "Purchase Agreement".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-73447) and certain
amendments thereto covering the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses. Promptly after execution and delivery of
this Agreement, the Company will either (i) prepare and file an international
prospectus and a U.S. prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form of
International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting". The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
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referred to as "Rule 434 Information". Each Form of U.S. Prospectus and Form of
U.S. Prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called, together with the
documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, a "preliminary prospectus".
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated or deemed to be incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement", and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of International Prospectus and the final
Form of U.S. Prospectus, in each case including the documents incorporated or
deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the respective forms first furnished to the Underwriters
for use in connection with the offering of the Securities, are herein called the
"U.S. Prospectus" and the "U.S. Prospectus", respectively, and, collectively,
the "Prospectuses" and, individually, a "Prospectus". If Rule 434 is relied on,
the terms "International Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated March 15, 1999 and preliminary U.S.
Prospectus dated March 15, 1999, respectively, each together with the applicable
Term Sheet, and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules and
other information which is "given", "set forth", "described", "contained"
"included" or "stated" in the Registration Statement, any preliminary prospectus
or any Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated or deemed to be incorporated by reference in
the Registration Statement, such preliminary prospectus or such Prospectus, as
the case may be; and all references in this Agreement to amendments to the
Registration Statement or amendments or supplements to any preliminary
prospectus or any Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated or deemed to be incorporated by reference in the
Registration Statement, such preliminary prospectus or such Prospectus, as the
case may be.
As used in this Agreement, "Standstill Agreement" means the Standstill
Agreement dated as of May 17, 1996 by and between ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., a
Delaware corporation, and the ML Entities (as defined therein), "Support
Agreement" means the Amended and Restated Support Agreement, dated as of June
30, 1997, by and among JP Foodservice, Inc., a Delaware corporation, ▇▇▇▇▇▇▇
▇▇▇▇▇ Capital Partners, Inc. and the other persons whose names are set forth on
the signature pages thereof and acknowledged by ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., and
"Supplemental Agreement" means a Supplemental Agreement substantially in the
form of Exhibit D hereto
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among the Company, U.S. Foodservice, Inc., a Delaware corporation ("USF"), and
the other parties thereto.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International Option
Securities are purchased, at each Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any International Option Securities are purchased, at each Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434. The representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any International Manager through the Lead Managers expressly for use in
the Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and each prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary
prospectus and each of the Prospectuses delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
4
(ii) Incorporated Documents. The documents incorporated or
----------------------
deemed to be incorporated by reference in the Registration Statement and
the Prospectuses, at the respective times they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectuses, (A) at the time the
Registration Statement became effective did not contain and, at the time
any Rule 462(b) Registration Statement becomes effective, will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (B) at the time the Prospectuses were issued and at the
Closing Time (and, if any International Option Securities are purchased, at
each Date of Delivery), did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
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the Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified, after giving effect to
the restatement of such financial statements to reflect acquisitions made
by the Company which, in accordance with GAAP (as defined below), were
accounted for as poolings of interests; such financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved; and
the combination of the Company's consolidated financial statements with the
financial statements of businesses acquired in pooling-of-interests
transactions has been prepared in accordance with GAAP. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
summary financial data and the selected financial data included in the
Prospectuses present fairly the information shown therein and have been
compiled on a basis consistent with that of the financial statements from
which such data were derived. No pro forma financial statements, and no
financial statements of any entity or business other than the consolidated
financial statements of the Company and its consolidated subsidiaries as of
June 28, 1997 and June 27, 1998, for the fiscal years ended June 29, 1996,
June 28, 1997 and June 27, 1998, as of September 26, 1998, for the three
months ended September 27, 1997 and September 26, 1998, as of December 26,
1998 and for the three and six-month periods ended December 27, 1997 and
December 26, 1998, are included in the Registration Statement or the
Prospectuses.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition,
5
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has the corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under the Purchase Agreements and the Supplemental Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
-----------------------------
Company has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its organization, has the
corporate power and authority or the power and authority as a limited
liability company, limited partnership or general partnership, as the
case may be, to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect; and, except as otherwise disclosed in the Registration
Statement, (A) all of the issued and outstanding capital stock of each
such subsidiary that is a corporation has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through wholly-owned subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, and none of the outstanding shares of capital stock of any such
subsidiary were issued in violation of the preemptive or similar rights
of any security holder of such subsidiary, (B) all of the issued and
outstanding limited liability company interests of each such subsidiary
that is a limited liability company, if any, have been duly authorized
and validly issued, are fully paid and non-assessable and are owned by
the Company, directly or through wholly-owned subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, and none of the outstanding limited liability company
interests of any such subsidiary were issued in violation of the
preemptive or similar rights of any security holder of such subsidiary,
and (C) all of the issued and outstanding limited and general partnership
interests of each such subsidiary that is a partnership have been duly
authorized and validly issued and are owned by the Company, directly or
through wholly-owned subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, and none
of the outstanding limited
6
or general partnership interests of any such subsidiary were issued in
violation of the preemptive or similar rights of any security holder of
such subsidiary.
(viii) Revenues and Assets of Subject Subsidiaries. As of
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December 26, 1998 and for the six months then ended, the Company and the
subsidiaries of the Company listed on Schedule D hereto (the "Subject
Subsidiaries") had total net sales and total assets (determined on a
consolidated basis in accordance with GAAP but excluding therefrom all
amounts attributable to (A) any other subsidiary and (B) any investment
(other than an investment classified as a cash equivalent in accordance
with GAAP) or other equity interest in any entity that is not a Subject
Subsidiary) of not less than 70% of net sales and 70% of total assets,
respectively, of the Company and its subsidiaries determined on a
consolidated basis in accordance with GAAP. Each Subject Subsidiary is a
corporation and Schedule D accurately sets forth the jurisdiction of
incorporation of each Subject Subsidiary.
(ix) Capitalization. All of the issued and outstanding shares of
--------------
capital stock of the Company (including the Securities to be purchased by
the Underwriters from the Selling Shareholders pursuant to the Purchase
Agreements) have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company (including the Securities to be purchased by the Underwriters from
the Selling Shareholders pursuant to the Purchase Agreements) were issued
in violation of preemptive or other similar rights of any security holder
of the Company.
(x) Authorization of Agreement. This Agreement and the U.S.
--------------------------
Purchase Agreement have been duly authorized, executed and delivered by the
Company.
(xi) Authorization and Description of Securities. The Securities
-------------------------------------------
which the International Managers and the U.S. Underwriters have the option
to purchase from the Company have been duly authorized for issuance and
sale to the International Managers pursuant to this Agreement and to the
U.S. Underwriters pursuant to the U.S. Purchase Agreement, respectively,
and, if and when issued and delivered by the Company pursuant to this
Agreement and the U.S. Purchase Agreement, respectively, against payment of
the consideration set forth herein and therein, respectively, will be
validly issued, fully paid and non-assessable; the Common Stock, the
Company's authorized but unissued preferred stock, par value $.01 per share
(the "Preferred Stock"), the Company's authorized but unissued Preferred
Stock designated as Series A Junior Participating Preferred Stock, the
Rights Agreement dated as of February 19, 1996, as amended (the "Rights
Agreement"), between the Company and The Bank of New York, as rights agent,
and the preferred share purchase rights (the "Rights") issued under the
Rights Agreement conform to all of the respective statements relating
thereto contained in the Prospectuses and such statements conform to the
rights set forth in the instruments defining such rights; no holder of
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive
or other similar rights of any security holder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws,
partnership agreement, limited
7
liability company agreement or other similar organizational document or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any subsidiary is subject
(collectively, the "Agreements and Instruments") except for such
violations or defaults that would not have a Material Adverse Effect; and
the execution, delivery and performance of the Purchase Agreements and
the consummation of the transactions contemplated in the Purchase
Agreements and in the Registration Statement (including the sale to the
Underwriters and public offering of the Securities, and the issuance and
sale (if any) of the Securities which the Underwriters have the option to
purchase from the Company pursuant to the Purchase Agreements and the use
of the proceeds therefrom by the Company as described in the Prospectuses
under the caption "Use of Proceeds") and compliance by the Company with
its obligations under the Purchase Agreements have been duly authorized
by the Company by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, any of the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not, in the case of any Agreement or Instrument
other than the Escrow Agreement (as defined below) and the Stock Purchase
Agreement dated as of October 30, 1998 (the "Stock Purchase Agreement")
among the Company, ▇▇▇▇▇▇ ▇▇▇▇ Foods, Inc. and the Webb Sellers, result
in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws, partnership
agreement, limited liability company agreement or other similar
organizational document of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any
of their respective assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xiii) Rights Plan. Each share of issued and outstanding Common
-----------
Stock (including the Securities to be purchased by the Underwriters from
the Selling Shareholders pursuant to the Purchase Agreements) has one
Right attached to it, and each of the Securities which the Underwriters
have the option to purchase from the Company pursuant to the Purchase
Agreements will, if and when issued, have one Right attached to it; and
the purchase by the Underwriters of the Securities to be purchased by
them pursuant to the Purchase Agreements will not result in the
occurrence of a "Distribution Date" (as defined in the Rights Agreement)
or otherwise result in the separation of Rights from the related Common
Stock certificates or the distribution of separate certificates
evidencing the Rights.
8
(xiv) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in any such case, might reasonably be expected to
result in a Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in
the Purchase Agreements or the performance by the Company or the Selling
Shareholders of their respective obligations under the Purchase
Agreements; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the businesses of the Company and its
subsidiaries, could not reasonably be expected to result in a Material
Adverse Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvii) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the
businesses now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, might reasonably be expected to result in a Material Adverse
Effect.
(xviii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the performance
by the Company of its obligations under the Purchase Agreements, in
connection with the sale to the Underwriters and public offering of the
Securities or the issuance and sale, if any, of the Securities which the
Underwriters have the option to purchase from the Company under the
Purchase Agreements, or for the consummation of
9
the other transactions contemplated by the Purchase Agreements, except
such as have already been obtained under the 1933 Act or the 1933 Act
Regulations and such as may be required under state securities or blue
sky laws.
(xix) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the businesses now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all real property owned by them and good
title to all other properties owned by them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described
in the Prospectuses or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectuses, are in full force and effect,
and neither the Company nor any of its subsidiaries has any notice of any
claim that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the leases or subleases
referred to above, or affecting or questioning the rights of the Company
or such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease, which, singly or in the
aggregate, might reasonably be expected to result in a Material Adverse
Effect.
(xxi) Compliance with Cuba Act. To the extent applicable, the
------------------------
Company has complied with, and is and will be in compliance with, the
provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations thereunder (collectively, the "Cuba Act")
or is exempt therefrom.
(xxii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale (if any) of the Securities which the Underwriters have
the option to purchase from the Company pursuant to the Purchase
Agreements and the application of the net proceeds therefrom as described
in the Prospectuses, will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
10
(xxiii) Environmental Laws. Except as described in the
------------------
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with the requirements of such
Environmental Laws, permits, authorizations and approvals, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxiv) NYSE. The outstanding shares of Common Stock (including
----
the Securities to be sold by the Selling Shareholders to the Underwriters
under the Purchase Agreements) are listed on the New York Stock Exchange
and the Securities which the Underwriters have the option to purchase from
the Company pursuant to the Purchase Agreements have been approved for
listing, subject to official notice of issuance, on the New York Stock
Exchange.
(xxv) Stock Certificates. The certificates evidencing the
------------------
Securities sold by the Selling Shareholders to the Underwriters pursuant to
the Purchase Agreements will not, upon delivery to the Underwriters, bear
any restrictive legends or be subject to any stop transfer instructions or
similar restrictions on transfer.
(xxvi) Registration Rights. Except for the instruments and
-------------------
agreements listed on Schedule E hereto (collectively, the "Registration
Rights Agreements"), there are no contracts, agreements or understandings
between the Company or any of its subsidiaries, on the one hand, and any
person, on the other hand, granting such person the right to require the
Company or any of its subsidiaries to file a registration statement under
the 1933 Act with respect to any securities (other than contractual
obligations by the Company to file registration statements on Form S-8
covering issuances of its Common Stock pursuant to its employee or director
stock, bonus or compensation plans) or to require the Company or any of its
subsidiaries to include such securities in any registration statement filed
by the Company under the 1933 Act or in any public offering of securities.
True, complete and correct copies of the Registration Rights Agreements
have been delivered to the Lead Managers, and, except in the case of the
RSI Agreement
11
(as defined in Schedule E hereto), Schedule E accurately sets forth, for
each such Registration Rights Agreement, (i) the total number and type of
securities which are entitled to the registration rights thereunder and
(ii) the name of each holder of any such securities and the number of
securities held by each such holder. The Company and its subsidiaries have
complied with all of their obligations under the Registration Rights
Agreements in connection with the transactions contemplated by the Purchase
Agreements, and each person who has or would have had a right to register
any securities pursuant to the Registration Statement or to include any
securities in the offerings contemplated by the Purchase Agreements has
been offered the opportunity to register such securities pursuant to the
Registration Statement and to include such securities in the offerings
contemplated by the Purchase Agreements, all in compliance with the
Registration Rights Agreements, and each such person has either waived or
elected not to exercise such rights or there has been included in the
Registration Statement and the offerings contemplated by the Purchase
Agreements the number and type of securities such person is entitled to
include therein pursuant to the relevant Registration Rights Agreement.
(xxvii) Supplemental Agreement. The Supplemental Agreement has
----------------------
been duly authorized, executed and delivered by, and is a valid, binding
and enforceable agreement of, the Company and USF, enforceable against the
Company and USF in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or
by general equitable principles; and the representations and warranties of
the Company and USF set forth in the Supplemental Agreement are true,
complete and correct; and, at the Closing Time, the Standstill Agreement
will have been terminated and the Support Agreement will have been
terminated to the extent provided in the Supplemental Agreement .
(xxviii) No Right of First Refusal. Assuming that the ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ Sellers (as defined in Schedule B hereto) comply, in connection with
the Offering Transactions (as defined in the Supplemental Agreement), with
their respective obligations under Section 4.1(c) of the Standstill
Agreement as amended by the Supplemental Agreement, neither the Company nor
any of its subsidiaries has any right of first refusal or other similar
right to purchase any of the Securities to be sold by the Selling
Shareholders to the Underwriters pursuant to the Purchase Agreements. None
of the Securities to be sold by the Webb Sellers (as defined in Schedule B
hereto) is subject to any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind (collectively,
"Encumbrances") in favor of the Company or any of its subsidiaries or
securing any obligation to or agreement with the Company or any of its
subsidiaries, except that certain such Securities are subject to the terms
of the Escrow Agreement dated as of November 16, 1998 between the Company
PNC Bank, National Association, as escrow agent (the "Escrow Agent"), and
the Webb Sellers (the "Escrow Agreement'). The Escrow Agreement does not
constitute or create a security interest, mortgage or lien on, or other
pledge of, any such Securities, and neither the Company nor any of its
subsidiaries has filed or recorded any financing statement, mortgage or
other similar document in any governmental office in respect of any such
Securities; the Company has full right, power and authority under the
Escrow Agreement and otherwise to duly and validly waive any provisions of
the Escrow Agreement and any Encumbrances created
12
thereby; and the Company hereby waives any and all Encumbrances arising
under or pursuant to the Escrow Agreement in respect of the Securities to
be sold to the Underwriters by the Webb Sellers pursuant to the Purchase
Agreements and also waives any provisions of the Escrow Agreement which
would limit or prevent, or be breached or violated by, the sale or transfer
of such Securities to the Underwriters, provided that the foregoing waiver
shall not alter or affect any agreement between the Company and the Webb
Sellers requiring that proceeds from the sale of certain such Securities be
deposited in escrow by the Custodian (as defined below) or the Webb Sellers
or requiring that certain such Securities be returned to escrow by the
Custodian or the Webb Sellers in the event that the Purchase Agreements are
terminated or the sale of such Securities to the Underwriters is not
consummated, it being understood that neither the Lead Managers nor the
U.S. Underwriters nor any of the Underwriters shall have any responsibility
or obligation whatsoever for depositing any such monies in escrow or for
returning any such Securities to escrow.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder, severally and not jointly, represents and warrants to each
International Manager as of the date hereof, as of the Closing Time, and, if
such Selling Shareholder is selling Option Securities on a Date of Delivery, as
of each such Date of Delivery, and agrees with each International Manager, as
follows, except that the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (as defined in Schedule B hereto)
do not make the representations and warranties set forth in subparagraphs (iv),
(v), (x)(A) or (xii) of this Section 1(b), the Webb Sellers do not make the
representations and warranties set forth in subparagraph (x)(B) of this Section
1(b), and only ML Offshore LBO Partnership No. B-XVIII and ML Offshore LBO
Partnership No. XIII make the representations and warranties set forth in
subparagraph (xiii) of this Section 1(b):
(i) Accurate Disclosure. At the respective times the
-------------------
Registration Statement, and the Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective and the Closing Time
(and, if any Option Securities are purchased, at each Date of Delivery),
the Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any
International Option Securities are purchased, at each Date of Delivery),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the representations and warranties in
this subparagraph (i) shall only apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, the
Prospectuses and any amendments or supplements thereto made in reliance
upon and in conformity with information furnished or confirmed in writing
to the Company by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement or any Prospectus or any amendment or
supplement thereto; and such Selling Shareholder is not prompted to sell
the Securities to be sold by such Selling Shareholder under the Purchase
Agreements by any information concerning the Company or any subsidiary of
the Company which is not set forth in the Prospectuses.
13
(ii) Authorization of Agreements. Such Selling Shareholder (if
---------------------------
not a natural person) has been duly organized and is validly existing and
in good standing under the laws of the jurisdiction of its organization.
Such Selling Shareholder has full right, power and authority to execute,
deliver and perform its obligations under the Purchase Agreements and,
except in the case of the representations and warranties made by the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (none of whom is entering into a Power of Attorney or
Custody Agreement), its Power of Attorney and its Custody Agreement (as
such terms are defined below), and to sell, transfer and deliver the
Securities to be sold by such Selling Shareholder under the Purchase
Agreements. The execution and delivery of the Purchase Agreements and,
except in the case of the representations and warranties made by the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, its Power of Attorney and its Custody Agreement by
such Selling Shareholder, the sale and delivery of the Securities to be
sold by such Selling Shareholder pursuant to the Purchase Agreements and
the consummation of the other transactions contemplated by the Purchase
Agreements, and compliance by such Selling Shareholder with its obligations
under the Purchase Agreement and, except in the case of the representations
and warranties made by the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, its Power of Attorney and
its Custody Agreement, have been duly authorized by such Selling
Shareholder and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon any of the Securities to be sold by such Selling
Shareholder or any other property or assets of such Selling Shareholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other agreement or instrument to
which such Selling Shareholder is a party or by which such Selling
Shareholder may be bound, or to which any of the property or assets of such
Selling Shareholder is subject, nor will such action result in any
violation of the provisions of, except in the case of the Webb Sellers, the
charter or by-laws, partnership agreement, limited liability company
agreement or other similar organizational documents of such Selling
Shareholder or the provisions of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has,
-------------------------
and will at the Closing Time and, if any Option Securities are purchased
from such Selling Shareholder, on the relevant Date of Delivery have, good
and marketable title to the Securities to be sold by such Selling
Shareholder under the Purchase Agreements on such date, free and clear of
any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to the Purchase Agreements;
upon delivery of such Securities and payment of the purchase price therefor
as contemplated in the Purchase Agreements, assuming none of the
Underwriters has notice of an "adverse claim" (within the meaning of
Section 8-102(a)(1) of the Uniform Commercial Code of the State of New York
(the "UCC")) with respect to such Securities, each of the Underwriters will
receive good and marketable title to the Securities purchased by it from
such Selling Shareholder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind,
and will be a "protected purchaser" within the meaning of UCC Section 8-
303; and the Securities to be sold by such Selling Shareholder are not
subject to any option, warrant, put, call, right of first refusal or other
right to acquire or purchase any such Securities.
14
(iv) Power of Attorney. Such Selling Shareholder has duly
-----------------
authorized, executed and delivered a Power of Attorney (a "Power of
Attorney") appointing ▇▇▇▇ ▇. ▇▇▇▇▇ and (A) in the case of the Power of
Attorney executed by J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, M. ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇, (B) in the case of the Power of Attorney executed by M. ▇▇▇▇ ▇▇▇▇▇,
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ and (C) in the case of the Power of
Attorney executed by ▇▇▇▇▇ ▇. ▇▇▇▇▇, J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and M. ▇▇▇▇
▇▇▇▇▇), as attorneys-in-fact (the "Attorneys-in-Fact") of such Selling
Shareholder, and such Power of Attorney is a valid and binding obligation
of such Selling Shareholder, enforceable against such Selling Shareholder
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles; and each Attorney-in-Fact is authorized to execute
and deliver, on behalf of such Selling Shareholder, the Purchase Agreements
and the certificates required to be delivered by such Selling Shareholder
pursuant to Section 5 of each of the Purchase Agreements, to sell, assign,
transfer and deliver to the Underwriters the Securities to be sold by such
Selling Shareholder under the Purchase Agreements, to determine the
purchase price of the Securities to be paid by the Underwriters to such
Selling Shareholder under the Purchase Agreements, to authorize the
delivery of the Securities to be sold by such Selling Shareholder to the
Underwriters under the Purchase Agreements and to accept payment therefor,
and otherwise to act on behalf of such Selling Shareholders in connection
with the Purchase Agreements and all transactions related thereto.
(v) Custody Agreement. Such Selling Shareholder has duly
-----------------
authorized, executed and delivered a Custody Agreement (a "Custody
Agreement") with ChaseMellon Shareholder Services, L.L.C., as custodian
(the "Custodian"), and such Custody Agreement is a valid, binding and
enforceable agreement of such Selling Shareholder, enforceable against such
Selling Shareholder in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles; and the Custodian is
authorized to deliver the Securities to be sold by such Selling Shareholder
under the Purchase Agreements, to accept payment therefor from the
Underwriters and to execute and deliver a receipt for such payment. For
purposes of this Agreement, references to "its Power of Attorney" and "its
Custody Agreement", when used with respect to any ▇▇▇▇ Seller, mean the
Power of Attorney and Custody Agreement which have been executed by such
▇▇▇▇ Seller.
(vi) Purchase Agreements. Each of the International Purchase
-------------------
Agreement and the U.S. Purchase Agreement has been duly authorized,
executed and delivered by such Selling Shareholder.
(vii) Absence of Manipulation. Such Selling Shareholder has not
-----------------------
taken, and, during the period from and including the date of this Agreement
and ending at such time as the distribution of the Securities contemplated
by the Purchase Agreements has been completed, will not take, directly or
indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
15
(viii) Absence of Further Requirements. No filing with, or
-------------------------------
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations under the Purchase Agreements or, except in
the case of the representations and warranties made by the ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, its Power of Attorney or its Custody Agreement, or in connection
with the sale and delivery by such Selling Shareholder of the Securities to
be sold by it under the Purchase Agreements or the consummation by such
Selling Shareholder of the other transactions contemplated by the Purchase
Agreements, except such as may have previously been made or obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities or blue sky laws.
(ix) Restriction on Sale of Securities. During a period of 90
---------------------------------
days from the date of this Agreement, such Selling Shareholder will not,
without the prior written consent of the Global Coordinator, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant for the sale of or otherwise dispose of or
transfer (including, without limitation, by distribution to the limited
partners, stockholders or other holders of equity interests, if any, in
such Selling Shareholder) any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or repayable with
Common Stock, whether now owned or hereafter acquired by such Selling
Shareholder or with respect to which such Selling Shareholder has or
hereafter acquires the power of disposition, or file or cause to be filed
any registration statement under the 1933 Act with respect to any of the
foregoing or cause any of the foregoing to be included in a registration
statement under the 1933 Act by means of any piggy-back or similar
registration rights or (ii) enter into any swap or any other agreement or
transaction that transfers, in whole or in part, the economic consequence
of ownership of the Common Stock or any securities convertible into or
exchangeable or exercisable for or repayable with Common Stock, whether any
such swap or other agreement or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise. The foregoing sentence shall not apply to the Securities
to be sold by such Selling Shareholder under the Purchase Agreements.
The foregoing paragraph will not restrict any transfer of Common Stock
by any ▇▇▇▇ Seller to the Company or any of its subsidiaries or to a trust
for the benefit of such ▇▇▇▇ Seller or such ▇▇▇▇ Seller's spouse or lineal
descendants, or any transfer of Common Stock by gift, will or intestate
succession to such ▇▇▇▇ Seller's spouse or lineal descendants, provided, in
each case, that as a condition and prior to such transfer, the transferee,
or the trustee or legal guardian on behalf of the transferee, executes and
delivers to the Global Coordinator a lock-up agreement containing terms
equivalent to those contained in the foregoing paragraph.
(x) Certificates Suitable for Transfer. (A) In the case of any
----------------------------------
▇▇▇▇ Seller, certificates for all of the Securities to be sold by such
Selling Shareholder pursuant to the Purchase Agreements, in suitable form
for transfer by delivery and accompanied by duly executed stock powers
endorsed in blank with signatures guaranteed, have been placed in custody
with the Custodian. (B) In the case of any ▇▇▇▇▇▇▇ ▇▇▇▇▇ Seller,
certificates for all of the Securities to be sold by such Selling
Shareholder pursuant to the Purchase
16
Agreements, in form suitable for transfer by delivery and accompanied by
duly executed stock powers endorsed in blank or otherwise endorsed for
transfer with signatures guaranteed, will be delivered to the registrar and
transfer agent for the Common Stock no later than 48 hours prior to the
Closing Time.
(xi) No Association with NASD. Other than the ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Sellers (as defined in Schedule B hereto), neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under direct
or indirect common control with, or has any other association with (within
the meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the National
Association of Securities Dealers, Inc.
(xii) Spousal Consent. Such Selling Shareholder either (i) is
---------------
married and has caused his or her spouse to join in and consent to the
terms of its Custody Agreement, the Purchase Agreements and its Power of
Attorney by executing the spousal consent attached to the Custody Agreement
or (ii) if such spousal consent is unsigned, such Selling Shareholder has
no spouse. No former spouse, if any, of such Selling Shareholder has any
claim with respect to any of the shares of Common Stock deposited by such
Selling Shareholder under its Custody Agreement.
(xiii) Submission to Jurisdiction. Each of ML Offshore LBO
--------------------------
Partnership No. B-XVIII and ML Offshore LBO Partnership No. XIII has the
power to submit, and pursuant to this Agreement has legally, validly,
effectively and irrevocably submitted, to the jurisdiction of any federal or
state court in the Borough of Manhattan, The City of New York, and has the
power to designate, appoint and empower and pursuant to this Agreement has
legally, validly, effectively and irrevocably designated, appointed and
empowered an agent for service of process in any suit or proceeding based on
or arising under this Agreement in any federal or state court in the Borough
of Manhattan, The City of New York, as provided in Section 12 hereof.
(c) Certificates. Any certificate signed by any officer of the Company or
any of its subsidiaries and delivered to the Global Coordinator, the Lead
Managers or counsel for the International Managers shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby; and any certificate signed by or on behalf of any Selling
Shareholder and delivered to the Global Coordinator, the Lead Managers or
counsel for the International Managers pursuant to the terms of this Agreement
shall be deemed a representation and warranty by such Selling Shareholder to
each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
----------------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, each
of the Selling Shareholders, severally and not jointly, agrees to sell to each
International Manager, severally and not jointly, and each International
Manager, severally and not jointly, agrees to purchase from each Selling
Shareholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial International Securities set forth in Schedule B opposite
the name of such Selling
17
Shareholder which the number of Initial International Securities set forth in
Schedule A opposite the name of such International Manager, plus any additional
number of Initial International Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial International Securities, subject, in each case, to
such adjustments among the International Managers as the Lead Managers in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional shares of Common
Stock, as set forth in Schedule B, at the price per share set forth in Schedule
C, less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial International Securities but not payable
on the International Option Securities. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial International
Securities upon notice by the Global Coordinator to the Company setting forth
the number of International Option Securities as to which the several
International Managers are then exercising the option and the time and date of
payment and delivery for such International Option Securities. Any such time and
date of delivery for the International Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of such option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager, plus any additional number of Initial
International Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the total number of
Initial International Securities, subject in each case to such adjustments as
the Global Coordinator in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of ▇▇▇▇▇ & ▇▇▇▇ llp,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Global Coordinator and the Company, at 9:00 A.M.
(New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Global Coordinator and the Company (such time and date of payment and
delivery being herein called the "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
18
Payment shall be made to the Webb Sellers by wire transfer of immediately
available funds to a single bank account designated by the Custodian or, at the
option of Lead Managers, to a single bank account designated by ▇▇▇▇ ▇. ▇▇▇▇▇,
as Attorney-in-Fact, payment shall be made to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ by wire
transfer of immediately available funds to a single bank account designated by
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc. and payment to the Company shall be made by
wire transfer of immediately available funds to a bank account designated by the
Company, in each case against delivery to the Lead Managers for the respective
accounts of the International Managers of certificates for the International
Securities to be purchased by them. It is understood that each International
Manager has authorized the Lead Managers, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial
International Securities and the International Option Securities, if any, which
it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the International Managers, may (but shall not be obligated
to) make payment of the purchase price for the Initial International Securities
or the International Option Securities, if any, to be purchased by any
International Manager whose funds have not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial International
Securities and the International Option Securities, if any, shall be in such
denominations and registered in such names as the Lead Managers may request in
writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
--------- ------------------------
International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i) when
the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment to the Registration Statement shall become
effective or any supplement to any Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to any Prospectus or
for additional information and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or Prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceedings for any of such purposes. The Company
will promptly effect the filings necessary pursuant to Rule 424(b) and will
take such steps as it deems necessary to ascertain promptly whether the
forms of prospectus transmitted for filing under Rule 424(b) were received
for filing by the Commission and, in the event that they were not, it will
promptly file such prospectuses. The Company will make every reasonable
effort to prevent the issuance of
19
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either of the
prospectuses included in the Registration Statement at the time it became
effective or to either of the Prospectuses, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the
International Managers shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel for the
International Managers, without charge, four signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts, and
will also deliver to the Lead Managers, without charge, a conformed copy of
the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the International Managers. The
copies of the Registration Statement and each amendment thereto furnished
to the International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T .
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, including in
connection with market-making transactions in the Common Stock, such number
of copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in the Purchase Agreements and in the
Prospectuses. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the International Managers or for the Company, to
amend the Registration Statement or amend or supplement any Prospectus in
order that such Prospectus will not include any untrue statements of a
material fact or omit to state a
20
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or such Prospectus comply with such
requirements, and the Company will furnish to the International Managers
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Global Coordinator may designate
and to maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds, if
any, received by it from the sale of the Securities in the manner specified
in the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Option Securities on the New York Stock Exchange, subject to
official notice of issuance.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of this Agreement, the Company will not, without the
prior written consent of the Global Coordinator, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant for the sale of or otherwise dispose of or transfer any shares
of Common Stock or any securities convertible into or exchangeable or
exercisable for or repayable with Common Stock (including, without
limitation, any Common Stock or other such securities issued by the Company
or which are now owned or hereafter acquired by the Company or with respect
to which the Company has or hereafter acquires the power of
21
disposition), or file or cause the filing of a registration statement under
the 1933 Act with respect to any of the foregoing, or (ii) enter into any
swap or any other agreement or transaction that transfers, in whole or in
part, the economic consequence of ownership of the Common Stock or any
securities convertible into or exchangeable or exercisable for or repayable
with Common Stock, whether any such swap or other agreement or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. Notwithstanding the
provisions of the foregoing sentence, the Company may do any of the
following: (1) issue Common Stock under its employee or director stock,
bonus or compensation plans, or grant options to purchase Common Stock or
other awards under such plans, in each case as such plans are in effect on
the date of this Agreement, and file one or more registration statements on
Form S-8 covering the offering and sale of securities issuable under such
plans; (2) issue Common Stock or securities convertible into or
exchangeable or exercisable for or repayable with Common Stock to owners of
businesses which the Company may acquire in the future, whether by merger,
acquisition of assets or capital stock or otherwise, as consideration for
the acquisition of such businesses or to management employees of such
businesses in connection with any such acquisition, enter into and
implement collar and other price protection arrangements in connection with
any such acquisition, and file one or more registration statements on Form
S-4 covering the offering and sale of Common Stock or such other securities
by the Company to such owners in connection with such acquisitions; (3) in
connection with the future acquisition of any business, whether by merger,
acquisition of assets or capital stock or otherwise, that has outstanding
warrants, options or other securities convertible into or exchangeable or
exercisable for or repayable with common stock or other equity securities,
or that maintains employee or director bonus or compensation plans
providing for the issuance of common stock or options to purchase common
stock or other awards, (A) issue substantially similar new warrants,
options or other securities to replace the outstanding options, warrants or
other securities of such acquired business or assume the obligations of
such acquired business under such outstanding warrants, options or other
securities or such plans, and issue Common Stock pursuant to any such
warrants, options or other securities, as in effect on the date of such
issuance or assumption, or grant options to purchase Common Stock or other
awards and issue Common Stock under any such plans, as in effect on the
date of acquisition, and (B) file one or more registration statements on
Form S-8 covering the offering and sale of securities issuable under such
plans; (4) issue Common Stock pursuant to acquisition agreements existing
on the date of this Agreement which were entered into by the Company to
effect the acquisitions of Lone Star Institutional Grocers, Inc., ▇.▇. ▇▇▇▇
& Sons, L.L.C. and ▇▇▇▇▇▇ ▇▇▇▇ Foods, Inc., as described under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Introduction" in the Prospectuses, as such agreements are in
effect on the date hereof and implement collar and other price protection
provisions contained in such agreements; (5) issue Common Stock upon
exercise of an outstanding warrant to purchase 71,460 shares of Common
Stock as of January 31, 1999, subject to anti-dilution adjustments, as such
warrant is in effect on the date hereof; and (6) file one or more shelf
registration statements covering the resale of (A) Common Stock issued to
owners of businesses acquired by the Company prior to the date hereof or to
the owner of the warrant referred to in clause (5) of this sentence under
registration rights agreements existing on the date hereof, as such
agreements are in effect on the date hereof, and (B) Common Stock issued in
accordance with clause (2) of this sentence to owners of
22
businesses acquired by U.S. Foodservice subsequent to the date hereof,
whether by merger, acquisition of assets or capital stock or otherwise, as
consideration for the acquisition of such businesses under registration
rights agreements entered into in connection with such acquisitions.
(k) Reporting Requirements. The Company, during the period when
the Prospectuses are required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(l) Supplemental Agreement. The Company and USF will perform and
comply with all of their respective covenants and obligations under the
Supplemental Agreement. Upon the purchase by the Underwriters of the
Initial Securities to be sold by the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the
Purchase Agreements and delivery of the resignation letters contemplated by
Section 5(k) hereof, the Company will at the Closing Time deliver a
certificate to the effect that the conditions set forth in clauses (a) and
(b) of the first paragraph of Section 4 of the Supplemental Agreement have
been satisfied and that the Standstill Agreement and, to the extent
provided in the Supplemental Agreement, the Support Agreement have been
terminated.
SECTION 4. Payment of Expenses.
------------ --------------------
(a) Expenses of the Company. The Company will pay all expenses incident to
the performance of its obligations and the obligations of the Selling
Shareholders under this Agreement (except for the expenses payable by the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to Section 4(b) hereof and the expenses payable
by the Webb Sellers pursuant to Section 4(c) hereof), including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the word processing or printing, copying and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Agreement
among Managers, the Intersyndicate Agreement and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors and the
reasonable fees and disbursements of a single law firm representing the ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, word processing or printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the copying of
closing documents, (ix) the fees and expenses of the Custodian and any transfer
agent or registrar for the Securities, (x) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities and (xi) the fees and
expenses incurred in connection with the listing of the Option Securities on the
New York Stock Exchange.
23
(b) Expenses of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇. The ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
severally and not jointly, will pay the following expenses incident to the
performance of their respective obligations under, and the consummation of the
transactions contemplated by, the Purchase Agreements: (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of their
Securities to the Underwriters, (ii) the fees and disbursements of their
respective counsel and accountants, except that the Company shall, as provided
in Section 4(a) above, pay the reasonable fees and disbursements of a single law
firm representing the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, and (iii) underwriting discounts
and commissions with respect to the Securities sold by them to the Underwriters.
(c) Expenses of the Webb Sellers. The Webb Sellers, severally and not
jointly, will pay the following expenses incident to the performance of their
respective obligations under, and the consummation of the transactions
contemplated by, the Purchase Agreements: (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of their Securities to
the Underwriters, (ii) the fees and disbursements of their respective counsel
and accountants and (iii) underwriting discounts and commissions with respect to
the Securities sold by them to the Underwriters.
(d) Allocation of Expenses. The provisions of this Section 4 shall not
enlarge or otherwise alter the respective rights or obligations of the ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ or the Company under the RSI Agreement with respect to the sharing
or allocation of such costs and expenses or affect any other agreement that the
Company and any of the Selling Shareholders have made or may make for sharing or
allocation of such costs and expenses, including, without limitation, the
Registration Rights Agreement dated as of November 16, 1998 among the Company
and the Webb Sellers.
(e) Termination of Agreement. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company shall reimburse the International Managers for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.
SECTION 5. Conditions of International Managers, Obligations. The
-------------------------------------------------
obligations of the several International Managers under this Agreement are
subject to the accuracy of the representations and warranties of the Company and
the Selling Shareholders contained in Section 1 hereof or in certificates of any
officer of the Company or any subsidiary of the Company or of or on behalf of
any Selling Shareholder delivered pursuant to the provisions hereof, to the
performance by the Company and the Selling Shareholders of their respective
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and
at the Closing Time and at each Date of Delivery no stop order suspending
the effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the International Managers. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall
have been filed
24
and declared effective in accordance with the requirements of Rule 430A) or,
if the Company has elected to rely upon Rule 434, a Term Sheet shall have
been filed with the Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for Company. At the Closing Time, the Lead
Managers shall have received the favorable opinions, each dated as of the
Closing Time and addressed to the Lead Managers and the U.S.
Representatives, of (i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, in
form and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other Underwriters, to the effect set forth in Exhibit A-1 hereto and to
such further effect as counsel to the International Managers may reasonably
request, and (ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, special Illinois counsel to the Company,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special Nevada counsel to the Company, each in
form and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letters for each of the
other Underwriters, to the effect set forth in Exhibit A-2 and A-3 hereto,
respectively, and to such further effect as counsel to the International
Managers may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At the Closing
Time, the Lead Managers shall have received the favorable opinions, each
dated as of the Closing Time and addressed to the Lead Managers and the U.S.
Representatives, of (i) each of the attorneys listed on Schedule F attached
hereto for the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ listed opposite such attorney's name,
each in form and substance satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letters for each
of the other Underwriters, each such opinion to be in the form and to the
effect heretofore approved by the Lead Managers and to such further effect
as counsel to the International Managers may reasonably request, and (ii)
Katten, Muchin & Zavis, counsel for the Webb Sellers, in form and substance
satisfactory to counsel for the International Managers, together with signed
or reproduced copies of such letter for each of the other Underwriters, to
the effect set forth in Exhibit B hereto and to such further effect as
counsel to the International Managers may reasonably request.
(d) Opinion of Counsel for International Managers. At the Closing Time,
the Lead Managers shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇ & ▇▇▇▇ llp, counsel for the International Managers,
with respect to the organization of the Company, the validity of the
Securities (if any) to be sold by the Company, this Agreement, the
Registration Statement, the Prospectuses and such other related matters as
the Lead Managers may require, together with signed or reproduced copies of
such letter for each of the other Underwriters, and the Company and the
Selling Shareholders shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such matters.
(e) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Lead Managers shall have received a certificate of the President or a
Vice
25
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of the Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force
and effect as though expressly made at and as of the Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or, to the best knowledge of such officers, are contemplated by the
Commission.
(f) Certificate of Selling Shareholders; Letter of Escrow Agent. At
Closing Time, the Lead Managers shall have received a certificate signed by
all of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and a certificate signed by all of the Webb
Sellers or on behalf of all of the Webb Sellers by an Attorney-in-Fact, each
dated as of the Closing Time, to the effect that (i) the representations and
warranties of each such Selling Shareholder in Section 1(b) hereof are true
and correct with the same force and effect as though expressly made at and
as of the Closing Time, (ii) each such Selling Shareholder has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time and (iii) in the case of the
certificate signed by the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
have delivered and sold to the Underwriters pursuant to the Purchase
Agreements a number of shares of Common Stock which is equal to or greater
than the Subject Number (as defined in the Supplemental Agreement). Prior to
the time of execution of this Agreement, the Lead Managers shall have
received from the Escrow Agent a letter addressed to the Lead Managers and
the U.S. Representatives, in form and substance satisfactory to the Lead
Managers, to the effect that (i) all amounts payable to the Escrow Agent
pursuant to the Escrow Agreement (including, without limitation, Sections
6.7 and 6.8 thereof) have been paid in full and (ii) the Escrow Agent
releases any and all liens it may have with respect to the Securities to be
sold by the Webb Sellers pursuant to the Purchase Agreements.
(g) Comfort Letter from KPMG LLP. At the time of the execution of this
Agreement, the Lead Managers shall have received from KPMG LLP a letter
dated such date, in form and substance satisfactory to the Lead Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses and which shall
cover, among other things, the financial statements of Valley Industries,
Inc. and subsidiaries and Z Leasing Company, a general partnership.
(h) Comfort Letter from PricewaterhouseCoopers LLP. At the time of the
execution of this Agreement, the Lead Managers shall have received from
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Lead Managers, together with signed or reproduced copies
of such letter for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
26
(i) Comfort Letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. At the time of the
execution of this Agreement, the Lead Managers shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance
satisfactory to the Lead Managers, together with signed or reproduced copies
of such letter for each of the other Underwriters containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(j) Bring-down Comfort Letters. At the Closing Time, the Representatives
shall have received from each of KPMG LLP, PricewaterhouseCoopers LLP and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, in form and substance satisfactory to the Lead
Managers and dated as of Closing Time, to the effect that they reaffirm the
statements made in the letters furnished pursuant to subsections (g), (h)
and (i), respectively, of this Section, except that the "specified date"
referred to shall be a date not more than three business days prior to
Closing Time.
(k) Executed Supplemental Agreement. Prior to the execution of this
Agreement, the Lead Managers shall have received a copy of the Supplemental
Agreement, in form and substance satisfactory to the Lead Managers, duly
executed by the parties thereto, and the Supplement Agreement shall be in
full force and effect at the Closing Time; and, at the Closing Time, the
Representatives shall have received (i) a certificate of the Company, signed
by the President or a Vice President of the Company and the chief financial
or chief accounting officer of the Company, to the effect that the
Standstill Agreement and, to the extent provided in the Supplemental
Agreement, the Support Agreement have been terminated and (ii) a letter of
resignation in substantially the form of Exhibit D hereto from each of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ III.
(l) Approval of Listing. At the Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(m) No Objection. Prior to the date of this Agreement, the NASD shall
have confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(n) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities to be purchased by them under the U.S. Purchase
Agreement.
(o) Deposit of Securities. On or prior to the date of this Agreement,
the Securities to be sold by the Webb Sellers to the Underwriters pursuant
to the Purchase Agreements shall have been deposited with the Custodian,
together with stock powers duly endorsed in blank by each of the Webb
Sellers. Not later than the second business day before the Closing Time, the
Securities to be sold by the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ to the Underwriters
pursuant to the Purchase Agreements shall have been delivered to the
registrar and transfer agent for the Common Stock, duly endorsed in blank or
together with stock
27
powers duly endorsed in blank, by each of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
together with instructions to transfer such Securities to the Underwriters
at Closing Time.
(p) Tax Forms. At the Closing Time, the Lead Managers shall have
received a properly completed and executed United States Treasury Department
Form W-9 or W-8 (or other applicable form) from each of the Selling
Shareholders.
(q) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company and the
Selling Shareholders contained herein and the statements in any certificates
furnished by the Company or any subsidiary of the Company or by or on behalf
of any Selling Shareholder hereunder shall be true and correct on and as of
the Date of Delivery for such International Option Securities and, at such
Date of Delivery, the Lead Managers shall have received:
(i) Opinions of Counsel for Company. The favorable opinions of
--- -------------------------------
(i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, dated
such Date of Delivery and addressed to the Lead Managers and the U.S.
Representatives, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof, together with signed or reproduced
copies of such letter for each of the Underwriters, and (ii) ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, special Illinois counsel to the Company, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, special Nevada counsel to the Company, each in form and
substance satisfactory to counsel for the International Managers, dated
such Date of Delivery and addressed to the Lead Managers and the U.S.
Representatives, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the respective
opinions required by Section 5(b) hereof, together with signed or
reproduced copies of such letters for each of the Underwriters.
(ii) Opinion of Counsel for International Managers. The
---- ---------------------------------------------
favorable opinion of ▇▇▇▇▇ & Wood llp, counsel for the International
Managers, dated such Date of Delivery, relating to the Option Securities
to be purchased from the Company on such Date of Delivery and otherwise
to the same effect as the opinion required by Section 5(d) hereof.
(iii) Officers' Certificate. A certificate, dated such Date of
----- ---------------------
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company to the same
effect as the certificate delivered at the Closing Time pursuant to
Section 5(e) hereof.
(iv) Bring-down Comfort Letter. A letter from each of KPMG LLP,
---- -------------------------
PricewaterhouseCoopers LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, each in form and
substance satisfactory to the Lead Managers and dated such Date of
Delivery, to the effect that they reaffirm the statements made in the
letters furnished to the Lead Managers pursuant to Sections 5(g), (h) and
(i) hereof, respectively, hereof,
28
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three days prior to such Date of
Delivery.
(r) Additional Documents. At the Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents and opinions as they may require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Shareholders in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the Lead
Managers and counsel for the International Managers.
(s) Termination of Agreement. If any condition specified in this Section
5 shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
International Option Securities, may be terminated by the Lead Managers by
notice to the Company at any time at or prior to the Closing Time or such Date
of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof and except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
--------- ---------------
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless each International Manager, each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, each Selling Shareholder and each person, if any,
who controls any Selling Shareholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or any Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to
29
Section 6(e) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇
for the International Managers and all persons, if any, who control any
International Managers as aforesaid, and the fees and disbursements of
counsel chosen by the Majority Selling Shareholders (as defined below) for
the Selling Shareholders and all persons, if any, who control any Selling
Shareholders as aforesaid), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or in any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto); provided, further, that the Company shall not be liable under this
-------- --------
indemnity agreement to any Selling Shareholder or person controlling such
Selling Shareholder to the extent that any such loss, liability, claim, damage
or expense arises out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or in any preliminary prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Shareholder expressly for use therein; and, provided,
--------
further, that this indemnity agreement with respect to any preliminary
--------
prospectus shall not inure to the benefit of any International Manager from whom
the person asserting any such losses, liabilities, claims, damages or expenses
purchased Securities, or any person controlling such International Manager, if a
copy of the International Prospectus (as then amended or supplemented if the
Company shall have furnished any such amendments or supplements thereto, but
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of such International Manager to
such person, if such sending or giving of the International Prospectus is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the International Prospectus (as so amended or
supplemented, if applicable) would have corrected the defect giving rise to such
loss, liability, claim, damage or expense, except that this proviso shall not be
applicable if such defect shall have been corrected in a document which is
incorporated or deemed to be incorporated by reference in the International
Prospectus. As used in this Agreement, the term "Majority Selling Shareholders"
means the Selling Shareholders who, at the date of this Agreement, held a
majority of the Initial International Securities to be sold to the International
Managers by the Selling Shareholders pursuant to this Agreement.
(b) Indemnification by Selling Shareholders. Each Selling Shareholder
agrees, severally and not jointly, to indemnify and hold harmless each
International Manager, each person, if any,
30
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, the Company, its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or any Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
information furnished or confirmed in writing to the Company by or on behalf of
such Selling Shareholder expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or Prospectus (or any
amendment or supplement thereto); provided, that the aggregate liability of any
--------
Selling Shareholder pursuant to this paragraph (b) shall be limited to an amount
equal to the net proceeds (before deducting expenses) received by such Selling
Shareholder from the sale of Securities.
(c) Indemnification by International Managers. Each International
Manager agrees, severally and not jointly, to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary International prospectus or the International Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary International Prospectus or the
International Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the respective indemnified parties shall be selected as
follows: counsel to the International Managers and all persons, if any, who
control any International Managers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇; counsel to
the Company, its directors, each of its officers who signed the Registration
Statement and all persons, if any, who control the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by
the Company; and counsel to the Selling Shareholders and all persons, if any,
who control any Selling Shareholders within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall be selected by the Majority Selling
Shareholders. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except
31
with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for (i) the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from the indemnifying parties' own counsel for all International Managers and
all persons, if any, who control any International Manager within the meaning of
Section 15 of the 1933 Act or ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, (▇▇) the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from the indemnifying parties' own counsel for the Company, its directors, its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, and (iii) the fees and expenses of more than one separate
counsel (in addition to any local counsel) separate from the indemnifying
parties' own counsel for all Selling Shareholders and all persons, if any, who
control any Selling Shareholder within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act, in each case in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section 6 or Section 7 hereof shall not affect any agreements among the
Company and the Selling Shareholders with respect to indemnification of each
other or contribution.
(g) Currencies. Any payment made by the Company, any Selling Shareholder
or any International Manager pursuant to this Section 6 or Section 7 hereof with
respect to any loss, liability, claim, damage or expense incurred in a currency
other than U.S. dollars shall be made by the Company, such Selling Shareholder
or such International Manager, as the case may be, in such amount of U.S.
dollars as shall be necessary to enable the indemnified party to purchase the
amount of such other currency needed to satisfy such loss, liability, claim,
damage or expense, including any premiums and costs of exchange payable in
connection with the conversion of U.S. dollars into the relevant currency.
32
(h) Insofar as the indemnity agreements in Section 6(a) hereof may
permit indemnification for liabilities under the 1933 Act of any person who is a
partner of an International Manager or a Selling Shareholder or who controls an
International Manager or a Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and who, at the date of this
Agreement, is a director or officer of the Company or controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
such indemnity agreement is subject to the undertaking of the Company in the
Registration Statement under Item 17 thereof with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
--------- ------------
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the International Managers on the other
hand from the offering of the International Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) 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 and the Selling Shareholders on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the International Managers on the other hand in connection
with the offering of the International Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the one
hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether the applicable 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 Selling
Shareholders or by the International Managers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholders and the International Managers agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the International Managers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
33
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, (i) no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged
omission and (ii) no Selling Shareholder shall be required to contribute any
amount in excess of the amount of net proceeds (before deducting expenses)
received by such Selling Shareholder from the sale of Securities.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, each director of the Company, each officer of the Company
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company, and each
person, if any, who controls any Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Selling Shareholder. The International Managers'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial International Securities set forth opposite
their respective names in Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreements among the
Company and the Selling Shareholders with respect to contribution between
themselves.
SECTION 8. Representations, Warranties and Agreements to Survive
--------- -----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
---------
Agreement or in certificates of officers of the Company or any of its
subsidiaries or in certificates signed by or on behalf of the Selling
Shareholders submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
International Manager or controlling person of any International Manager, or by
or on behalf of the Company or any Selling Shareholder or any controlling person
of the Company or any Selling Shareholder, and shall survive delivery of the
International Securities to the International Managers.
SECTION 9. Termination of Agreement.
--------- ------------------------
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to the Closing Time, and the obligations of the International Managers
to purchase International Option Securities on any Date of Delivery which is
after the Closing Time may be terminated by the Lead Managers, by notice to the
Company, at or prior to such Date of Delivery, (i) if there has been, since the
time of execution of this Agreement and prior to the Closing Time or such Date
of Delivery, as the
34
case may be, or since the respective dates as of which information is given in
any Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Lead Managers, impracticable to market the Securities or to
enforce contracts for the sale of the International Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of such exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either federal, Maryland or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section 9, or if the obligation of the International Managers to purchase
International Option Securities on any Date of Delivery which is after the
Closing Time is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except (in the case of any
termination of this Agreement) as provided in Section 4 hereof, and provided
further that Sections 1, 6, 7 and 8 hereof shall survive any such termination of
this Agreement and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If one
---------- ----------------------------------------------------
or more of the International Managers shall fail at the Closing Time or a Date
of Delivery to purchase the International Securities which it or they are
obligated to purchase under this Agreement on such date (the "Defaulted
Securities"), the Lead Managers shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
International Managers, or any other underwriters, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Lead Managers shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of International Securities to be purchased on such date, each
of the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the International Managers to purchase and
of the Company to sell the International Option Securities to be purchased
and sold on such Date of Delivery shall terminate without liability on the
part of any non-defaulting International Manager.
35
No action taken pursuant to this Section 10 shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "International Manager" includes any person substituted for an
International Manager under this Section 10.
SECTION 11. Default by one or more of the Selling Shareholders or the
---------- --------------------------------------------------------
Company.
--------
(a) If one or more of the Selling Shareholders shall fail at the Closing
Time to sell and deliver the number of Securities which it or they, as the case
may be, are obligated to sell under this Agreement on such date, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder on such date to the total number of shares to be sold by all Selling
Shareholders (including such defaulting Selling Shareholder or Selling
Shareholders, as the case may be) on such date, then the International Managers
may, at the option of the Lead Managers, by notice from the Lead Managers to the
Company and the non-defaulting Selling Shareholders, either (a) terminate this
Agreement without any liability on the part of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 hereof shall survive such
termination and remain in full force and effect, or (b) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder on such date. No action taken pursuant to this Section 11 shall
relieve any Selling Shareholder so defaulting from liability, if any, in respect
of such default.
(b) If the Company shall fail at a Date of Delivery to sell and deliver
the number of Securities that it is obligated to sell under this Agreement on
such date, then the International Managers may, at the option of the Lead
Managers, by notice from the Lead Managers to the Company and the Selling
Shareholders, terminate this Agreement or, in the case of any Date of Delivery
which occurs after the Closing Time, terminate the obligations of the
International Managers to purchase the International Option Securities to be
purchased on such Date of Delivery, in each case without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 hereof shall survive any such termination of this Agreement and
remain in full force and effect. No action taken pursuant to this Section 11
shall relieve the Company from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder or the Company
referred to in this Section 11 which does not result in the termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligations of the International
Managers to purchase the relevant International Option Securities, as the case
may be, either the Lead Managers or the Company shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not
36
exceeding seven days in order to effect any required change in the Registration
Statement or Prospectuses or in any other documents or arrangements.
SECTION 12. Agent for Service; Submission to Jurisdiction; Waiver of
---------- --------------------------------------------------------
Immunities. Each of ML Offshore LBO Partnership No. B-XVIII and ML Offshore LBO
----------
Partnership No. XIII (each for purposes of this Section 12, a "Subject Entity")
irrevocably (i) agrees, severally and not jointly, that any legal suit, action
or proceeding against such Subject Entity brought by any International Manager
or by any person who controls any International Manager arising out of or based
upon this Agreement or the transactions contemplated hereby may be instituted in
any federal or state court in the Borough of Manhattan, The City of New York,
(ii) waives, to the fullest extent it may effectively do so under applicable
law, any objection which it may now or hereafter have to the laying of venue of
any such proceeding or to the convenience of the forum and (iii) submits to the
non-exclusive jurisdiction of any federal or state court in the State of New
York in any such suit, action or proceeding. Each Subject Entity has appointed
as its authorized agent (the "Authorized Agent"), which term, as used herein,
includes any successor in such capacity, upon whom process may be served in any
such action arising out of or based on this Agreement or any of the transactions
contemplated hereby which may be instituted in any federal or state court in the
Borough of Manhattan, The City of New York by any International Manager or by
any person who controls any International Manager, expressly consents to the
jurisdiction of any such court in respect of any such action and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. Each Subject Entity represents
and warrants that the Authorized Agent has agreed to act as such agent for
service of process. Service of process upon the Authorized Agent and written
notice of such service to such Subject Entity (delivered as provided in Section
13 hereof) shall be deemed, in every respect, effective service of process upon
such Subject Entity.
In respect of any judgment or order given or made against a Subject
Entity (the "Indemnifying Subject Entity") in favor of any International Manager
or any person, if any, who controls any International Manager for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, such Indemnifying Subject Entity shall
indemnify such International Manager against any loss incurred by such
International Manager or controlling person as a result of any variation between
(i) the rate of exchange at which the United States dollar amount is converted
into the judgment currency for the purpose of such judgment or order and (ii)
the rate of exchange at which such International Manager or controlling person
is able to purchase United States dollars with the amount of judgment currency
actually received by such International Manager or controlling person. The
foregoing indemnity shall constitute separate and independent obligations of
each Subject Entity and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.
To the extent that any Subject Entity or any of such Subject Entity's
properties, assets or revenues may have or may hereafter become entitled to, or
have attributed to it, any right of immunity, on the grounds of sovereignty,
from (i) any legal action, suit or proceeding, (ii) setoff or counterclaim,
(iii) the jurisdiction of any court, (iv) service of process, (v) attachment
upon or prior to judgment, (vi) attachment in aid of execution of judgment,
(vii) execution of judgment, or (viii) other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, in any jurisdiction
in which proceedings may at any time be commenced, with
37
respect to its obligations, liabilities or any other matter under or arising out
of or in connection with this Agreement, such Subject Entity (to the maximum
extent permitted by law) hereby irrevocably and unconditionally waives, and
agrees not to plead or claim, any such immunity and consents to such relief and
enforcement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, Ropemaker Place, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
attention of Syndicate Operations; notices to the Company shall be directed to
it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇; notices to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be directed to them at
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
Inc., World Financial Center, North Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; and notices to the Webb
Sellers shall be directed to them at ▇▇▇▇▇ Holdings, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, with a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., Katten, Muchin & Zavis, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
SECTION 14. Parties. This Agreement shall each inure to the benefit of
-------
and Shareholders and their respective successors. Nothing expressed in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the International Managers, the Company and the
Selling Shareholders and their respective successors, and such controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any International Manager shall be deemed to be a successor by
reason merely of such purchase.
SECTION 15. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME, UNLESS OTHERWISE INDICATED.
SECTION 16. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
[SIGNATURE PAGES FOLLOW]
38
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the International Managers,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
U.S. FOODSERVICE
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION
PARTNERSHIP NO. B-XVIII, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. B-IV,
L.P., as General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994
By: KECALP Inc., as General Partner
By:
------------------------------------
Name:
Title:
39
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. B-IV,
L.P., as Investment General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
ML IBK POSITIONS, INC.
By:
------------------------------------
Name:
Title:
MLCP ASSOCIATES L.P. NO. II
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1991
By: KECALP Inc., as General Partner
By:
------------------------------------
Name:
Title:
40
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION
PARTNERSHIP NO. XIII, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. IV,
L.P., as General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. IV,
L.P., as Investment General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc., as
General Partner
41
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1987
By: KECALP Inc., as General Partner
By:
------------------------------------
Name:
Title:
MERCHANT BANKING L.P. NO. II
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ MBP Inc., as General
Partner
By:
------------------------------------
Name:
Title:
MLCP ASSOCIATES L.P. NO. IV
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.,
as General Partner
By:
------------------------------------
Name:
Title:
---------------------------------------
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
M. ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
42
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇, SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
BY: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
BY:
---------------------------
Attorney-in-Fact
For themselves and as Lead Managers of the
other International Managers named in Schedule A hereto.
43
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
----------------------------- -------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International...............................................
▇▇▇▇▇▇▇ Sachs International...............................................
Salomon Brothers International Limited....................................
▇.▇. ▇▇▇▇▇▇▇▇ & Co........................................................
_________
Total.............................................................
=========
Sch A-1
SCHEDULE B
Number of Initial International Maximum Number of International
Securities to be Sold Option
Securities to Be Sold
-------------------------------- -------------------------------
U.S. Foodservice...................... 0 260,878
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation
Partnership No. B-XVIII, L.P.(1)..... 675,413 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994(1)..... 10,521 0
ML Offshore LBO Partnership No.
B-XVIII(1)........................... 339,819 0
ML IBK Positions, Inc. (1)............ 223,228 0
MLCP Associates L.P. No. II (1)....... 8,100 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1991(1)..... 29,418 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation
Partnership No. XIII, L.P. (1)....... 251,116 0
ML Offshore LBO Partnership No.
XIII(1).............................. 6,384 0
ML Employees LBO Partnership No. I,
L.P. (1)............................. 6,242 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1987(1)..... 4,717 0
Merchant Banking L.P. No. II(1)....... 4,717 0
MCLP Associates L.P. No. IV(1)........ 2,104 0
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇(2)............... 70,964 0
M. ▇▇▇▇ ▇▇▇▇▇ (2)..................... 70,964 0
▇▇▇▇▇ ▇. ▇▇▇▇▇ (2).................... 35,482 0
------------------ -------------------
Total................................. 1,739,189 260,878
================== ===================
----------------------------------------------
(1) The entities whose names are marked with (1) are herein sometimes referred
to, collectively, as the "▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇" and, individually, as a
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Seller".
(2) The persons whose names are marked with (2) are herein sometimes referred
to, collectively, as the "Webb Sellers", and, individually, as a "▇▇▇▇
Seller".
Sch B-1
SCHEDULE C
1. The initial public offering price per share for the International
Securities shall be $.
2. The purchase price per share for the International Securities to
be paid by the several International Managers shall be $, being an amount
equal to the initial public offering price set forth above less $ per
share; provided that the purchase price per share for any International
Option Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial International Securities but not payable on the International
Option Securities.
Sch C-1
SCHEDULE D
LIST OF SUBJECT SUBSIDIARIES
Name of Subsidiary Jurisdiction of Incorporation
-------------------------------------------------------- -------------------------------
White Swan, Inc. Delaware
JP Foodservice Distributors, Inc. Delaware
▇▇▇▇ ▇▇▇▇▇▇ & Co. Delaware
Illinois Fruit & Produce Corp. Illinois
U.S. Foodservice, Inc. Delaware
▇▇▇▇▇▇▇ Brothers, Inc. Delaware
E & H Distributing Co. Nevada
▇▇▇▇▇▇ ▇▇▇▇ Foods, Inc. Delaware
Sch D-1
SCHEDULE E
Registration Rights Agreements
1. Registration Rights Agreement dated as of May 17, 1996 (the "RSI Agreement")
among ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., a Delaware corporation, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Appreciation Partnership, No. B-XVIII, L.P. and the other parties thereto
and assumed by USF.
2. Common Stock Purchase Warrant expiring September 30, 2005, dated
December 24, 1997, issued by JP Foodservice, Inc., a Delaware corporation,
and registered in the name of Bankers Trust New York Corporation.
(a) Type of securities entitled to registration rights thereunder: Common
Stock.
(b) Total number of securities entitled to registration rights thereunder:
71,460 shares as of January 31, 1999, subject to adjustment pursuant to
anti-dilution provisions therein.
(c) Holder of securities entitled to registration rights thereunder:
Bankers Trust New York Corporation.
3. Registration Rights Agreement dated as of October 23, 1998 between U.S.
Foodservice and ▇▇▇▇▇▇▇▇ ▇▇▇▇.
(a) Type of securities entitled to registration rights thereunder: Common
Stock.
(b) Total number of securities entitled to registration rights thereunder:
550,543 shares, subject to post-closing adjustments as provided in the
related acquisition agreement.
(c) Holder of securities entitled to registration rights thereunder:
▇▇▇▇▇▇▇▇ ▇▇▇▇.
4. Registration Rights Agreement dated as of November 16, 1998 among U.S.
Foodservice and the stockholders of ▇▇▇▇▇▇ ▇▇▇▇ Foods, Inc. identified as
such on the signature pages thereof.
(a) Type of securities entitled to registration rights thereunder: Common
Stock.
(b) Total number of securities entitled to registration rights thereunder:
896,057 shares, subject to post-closing adjustments and earn-out
issuances as provided in the related acquisition agreement.
(c) Holders of securities entitled to registration rights thereunder and
number of such securities held by each such holder: J. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, 358,423 shares; M. ▇▇▇▇ ▇▇▇▇▇, 358,423 shares; and ▇▇▇▇▇ ▇.
▇▇▇▇▇, 179,211 shares, subject to adjustments as indicated in (b)
above.
5. Registration Rights Agreement dated as of March 20, 1998 among U.S.
Foodservice and each of the stockholders of Westland Provisions, Inc.
identified on the signature pages thereof.
(a) Type of securities entitled to registration rights thereunder: Common
Stock.
(b) Total number of securities entitled to registration rights thereunder:
46,795 shares.
Sch E-1
(c) Holders of securities entitled to registration rights thereunder and
number of such securities held by each such holder as of March 1, 1999:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 30,049 shares; ▇▇▇▇ ▇▇▇▇▇▇, 498 shares; ▇▇▇▇▇ ▇▇▇▇▇,
2,322 shares; ▇▇▇ ▇▇▇▇, 6,337 shares; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 166 shares; and
B. ▇▇▇▇▇ ▇▇▇▇, 7,423 shares.
6. Registration Rights Agreement dated as of July 6, 1998 among U.S.
Foodservice and C. ▇▇▇▇▇▇ ▇▇▇▇▇.
(a) Type of securities entitled to registration rights thereunder: Common
Stock.
(b) Total number of securities entitled to registration rights thereunder:
12,925 shares.
(c) Holders of securities entitled to registration rights thereunder and
number of such securities held by such holder as of March 1, 1999: C.
▇▇▇▇▇▇ ▇▇▇▇▇.
Sch E-2
SCHEDULE F
List of Counsel to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇ Seller
-------- --------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq................ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No. B
XVIII, L.P.
ML IBK Positions, Inc.
MLCP Associates L.P. No. II
MLCP Associates L.P. No. IV
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No.
XIII, ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No.
XIII, L.P.
ML Employees LBO Partnership No. I, L.P.
▇▇▇▇▇ Mass, Esq....................... ▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1991
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1987
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq............... Merchant Banking L.P. No. II
▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Colt & Mosle
and ▇.▇. ▇▇▇▇▇▇ & Company............. ML Offshore LBO Partnership No. B-XVIII
ML Offshore LBO Partnership No. XIII
Sch F-1
Exhibit A
FORM OF OPINION OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the Purchase
Agreements.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the States of Maryland, [ ] and [ ].
(iv) The authorized capital stock of the Company is as set forth in the
Prospectuses in the column entitled "Actual" under the caption "Capitalization".
The shares of issued and outstanding capital stock (including the Securities to
be purchased by the Underwriters from the Selling Shareholders pursuant to the
Purchase Agreements) have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of capital stock of
the Company (including the Securities to be purchased by the Underwriters from
the Selling Shareholders pursuant to the Purchase Agreements) was issued in
violation of the preemptive or other similar rights of any security holder of
the Company arising under the charter or by-laws of the Company, the General
Corporation law of the State of Delaware (the "DGCL"), the Standstill Agreement,
the Support Agreement or, to the best of our knowledge, otherwise.
(v) The Securities which the U.S. Underwriters and the International
Managers have the option to purchase from the Company have been duly authorized
for issuance and sale to the U.S. Underwriters and the International Managers
pursuant to the U.S. Purchase Agreement and the International Purchase
Agreement, respectively, and, when issued and delivered by the Company pursuant
to the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the U.S.
Purchase Agreement and the International Purchase Agreement, will be validly
issued and fully paid and non-assessable; and no holder of any of the Securities
is subject to personal liability by reason of being such a holder.
(vi) The issuance by the Company of the Securities which the U.S.
Underwriters and the International Managers have the option to purchase from the
Company pursuant to the Purchase Agreements is not subject to preemptive or
other similar rights of any security holder of the Company arising under the
charter or by-laws of the Company, the DGCL, the Standstill Agreement, the
Support Agreement or, to the best of our knowledge, otherwise.
A-1
(vii) Each of White Swan, Inc., JP Foodservice Distributors, Inc., ▇▇▇▇
▇▇▇▇▇▇ & Co., U.S. Foodservice, Inc., ▇▇▇▇▇▇▇ Brothers, Inc. and ▇▇▇▇▇▇ ▇▇▇▇
Foods, Inc., each a Delaware corporation (collectively, the "Delaware
Subsidiaries" and, individually, a "Delaware Subsidiary"), is validly existing
and in good standing under the laws of the jurisdiction of its organization, has
the corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectuses and is duly qualified
to transact business and is in good standing in [ ]; and except as other
wise disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each Delaware Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of our knowledge, all
of the issued and outstanding capital stock of each Delaware Subsidiary is owned
by the Company, directly or through wholly-owned subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) The U.S. Purchase Agreement and the International Purchase Agreement
have been duly authorized, executed and delivered by the Company.
(ix) The Supplemental Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and USF,
enforceable against the Company and USF in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(xi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, and the Prospectuses, excluding the documents incorporated by
reference therein, and each amendment or supplement to the Registration
Statement and any of the Prospectuses, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules and other financial data
included therein or omitted therefrom, as to which we need express no opinion),
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xii) The documents incorporated by reference in the Prospectuses (other
than the financial statements and supporting schedules and other financial data
included therein or omitted therefrom, as to which we need express no opinion),
when they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder.
A-2
(xiii) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable requirements of the DGCL, with any
applicable requirements of the charter and by-laws of the Company and with all
applicable requirements of the New York Stock Exchange.
(xiv) The information in the Prospectuses under "Risk Factors--Future sales
of our common stock in the public market could adversely affect our stock price
and our ability to raise funds in new stock offerings", "Risk Factors--
Provisions in our charter and bylaws and in Delaware law could discourage
takeover attempts we oppose even if our stockholders might benefit from a change
in control of U.S. Foodservice", "Risk Factors--We have adopted a shareholder
rights plan which could discourage hostile acquisitions of control in which our
stockholders may wish to participate", "Business--Legal Proceedings",
"Description of Capital Stock", "Shares Eligible for Future Sale" and "Certain
U.S. Tax Consequences to Non-U.S. Holders", the information in the Registration
Statement under Item 15 thereof, and the information in the Company's Annual
Report on Form 10-K/A-1 for its fiscal year ended June 27, 1998 under "Legal
Proceedings", in each case to the extent that it constitutes, summaries of legal
matters, summaries of the Company's charter or by-laws, the Rights Agreement or
other instruments or agreements, summaries of legal proceedings or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xv) All descriptions in the Prospectuses of contracts and other documents
to which the Company or its subsidiaries are a party are accurate and correct in
all material respects.
(xvi) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency (other than under the 1933 Act and the 1933 Act Regulations, which have
been obtained, or as may be required under state securities or blue sky laws, as
to which we need express no opinion) is necessary or required for the execution,
delivery or performance by the Company of its obligations under the Purchase
Agreements, in connection with the sale to the Underwriters and public offering
of the Securities, in connection with the issuance and sale, if any, of the
Securities which the Underwriters have the option to purchase from the Company
pursuant to the Purchase Agreements and the use of the proceeds therefrom by the
Company as described in the Prospectuses under "Use of Proceeds" or for the
consummation of the transactions contemplated by the Purchase Agreements.
(xvii) The execution, delivery and performance of the Purchase Agreements
and the consummation of the transactions contemplated in the Purchase Agreements
and in the Registration Statement (including the sale to the Underwriters and
public offering of the Securities and the issuance and sale, if any, by the
Company of the Securities which the Underwriters have the option to purchase
from the Company and the use of the proceeds therefrom by the Company as
described in the Prospectuses under the caption "Use of Proceeds") and
compliance by the Company with its obligations under the
A-3
Purchase Agreements have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in the Purchase Agreements) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, (A) any instrument or
agreement listed on Schedule E to the Purchase Agreements, the Standstill
Agreement, the Support Agreement, the Agreement and Plan of Merger dated as of
June 30, 1997 among JP Foodservice, Inc., ▇▇▇▇▇▇ Acquisition Corp and ▇▇▇▇▇▇-
▇▇▇▇▇▇, Inc., the Stock Purchase Agreement or the Escrow Agreement or (B) any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any subsidiary is subject filed
as an exhibit to the Registration Statement or as an exhibit to any document
incorporated or deemed to be incorporated by reference in the Registration
Statement (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or any Delaware Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court having jurisdiction over the Company or any
subsidiary or any of their respective assets, properties or operations.
(xviii) The Company is not an "investment company" as such term is defined
in the 1940 Act.
(xix) To our knowledge, each share of issued and outstanding Common Stock
(including the Securities to be purchased by the Underwriters from the Selling
Shareholders pursuant to the Purchase Agreements) has one Right attached to it;
and each of the Securities which the Underwriters have the option to purchase
from the Company pursuant to the Purchase Agreements will, if and when issued,
have one Right attached to it. The purchase by the Underwriters of the
Securities to be purchased by them pursuant to the Purchase Agreements will not
result in the occurrence of a "Distribution Date" (as defined in the Rights
Agreement) or otherwise result in the separation of Rights from the related
Common Stock certificates or the distribution of separate certificates
evidencing the Rights.
(xx) To the best of our knowledge, neither the Company nor any of its
subsidiaries has any right of first refusal or other similar right to purchase
any of the Securities to be sold by the Selling Shareholders to the Underwriters
pursuant to the Purchase Agreements.
During the course of the preparation of the Registration Statement and
the Prospectuses, we participated in conferences with officers and other
representatives of the Company, with representatives of the independent public
accountants of the Company, and with you and your representatives at which the
contents of the Registration Statement and the Prospectuses (including the
documents incorporated or deemed to be incorporated by reference therein) were
discussed. While we have not undertaken to
A-4
determine independently, and we do not assume any responsibility for, the
accuracy, completeness or fairness of the statements in the Registration
Statement or Prospectuses, except as set forth in paragraph (xiv) above, we may
state on the basis of these conferences and our activities as counsel to the
Company in connection with the Registration Statement and the Prospectuses that
no facts have come to our attention which cause us to believe that (i) the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
the Prospectuses, as of [date of Prospectuses] or as of the date of this
opinion, contained or contain an untrue statement of a material fact or omitted
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, (iii) there are any legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries that are required to
be disclosed in the Registration Statement or the Prospectuses or the documents
incorporated or deemed to be incorporated by reference therein, other than those
disclosed therein, or which might reasonably be expected to result in a Material
Adverse Effect or which might reasonably be expected to materially and adversely
affect the consummation of any of the transactions contemplated by the Purchase
Agreement or the performance by the Company or the Selling Shareholders of their
respective obligations thereunder or (iv) there are any statutes, regulations,
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement, the Prospectuses or the documents incorporated or deemed to be
incorporated by reference therein or to be filed as exhibits to the Registration
Statement or the documents incorporated or deemed to be incorporated by
reference therein that are not described or referred to therein or so filed;
provided that in making the foregoing statements (which shall not
--------
constitute an opinion), we are not expressing any views as to the financial
statements and supporting schedules and other financial data included in or
omitted from the Registration Statement or the Prospectuses.
Such opinion shall state that it covers matters governed by and arising
under the DGCL and the laws of the State of Maryland, the State of New York and
the federal laws of the United States of America and shall further state that,
insofar as such opinion covers the Supplemental Agreement, the Support
Agreement, the Standstill Agreement or any other instrument or agreement which
is governed by the laws of a jurisdiction other than the State of Maryland or
the State of New York, such counsel has assumed that the laws governing such
instrument or agreement are identical to the laws of the State of New York. In
rendering such opinion, such counsel may rely, as to matters of fact (but not as
to legal conclusions), to the extent they deem proper, on certificates of the
Company and public officials.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
(Illinois Local Counsel)
(1) Illinois Fruit & Produce Corp. (the "Subject Subsidiary") has been duly
incorporated and is validly existing and in good standing under the laws of the
State of Illinois, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses (including the documents incorporated by reference therein) and is
duly qualified to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Subject Subsidiary and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"); and except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of the
Subject Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned by the Company,
directly or through wholly-owned subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity and none of the
outstanding shares of capital stock of the Subject Subsidiary was issued in
violation of the preemptive or similar rights of any security holder of the
Subject Subsidiary arising under the charter or bylaws of the Subject Subsidiary
or the corporate law of the State of Illinois or, to the best or our knowledge,
otherwise.
(2) The execution, delivery and performance of the Purchase Agreement and
the consummation of the transactions contemplated in the Purchase Agreements
will not result in any violation of the provisions of the charter or by-laws of
the Subject Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, governmental
instrumentality or court having jurisdiction over the Subject Subsidiary or any
of its subsidiaries or any of their respective assets, properties or operations.
Such opinion shall state that it covers matters governed by and arising
under the laws of the State of Illinois and the federal laws of the United
States of America and shall further state that, insofar as such opinion covers
any instrument or agreement which is governed by the laws of a jurisdiction
other than the State of Illinois, such counsel has assumed that the laws
governing such instrument or agreement are identical to the laws of the State of
Illinois. In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of the Subject Subsidiary and public officials.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
(Nevada Local Counsel)
(1) E&H Distributing Co. (the "Subject Subsidiary") has been duly
incorporated and is validly existing and in good standing under the laws of the
State of Nevada, has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses
(including the documents incorporated by reference therein) and is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Subject Subsidiary and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"); and except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of the
Subject Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge, is owned by the Company,
directly or through wholly-owned subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity and none of the
outstanding shares of capital stock of the Subject Subsidiary was issued in
violation of the preemptive or similar rights of any security holder of the
Subject Subsidiary arising under the charter or bylaws of the Subject Subsidiary
or the corporate law of the State of Nevada or, to the best or our knowledge,
otherwise.
(2) The execution, delivery and performance of the Purchase Agreement and
the consummation of the transactions contemplated in the Purchase Agreements
will not result in any violation of the provisions of the charter or by-laws of
the Subject Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, governmental
instrumentality or court having jurisdiction over the Subject Subsidiary or any
of its subsidiaries or any of their respective assets, properties or operations.
Such opinion shall state that it covers matters governed by and arising
under the laws of the State of Nevada and the federal laws of the United States
of America and shall further state that, insofar as such opinion covers any
instrument or agreement which is governed by the laws of a jurisdiction other
than the State of Nevada, such counsel has assumed that the laws governing such
instrument or agreement are identical to the laws of the State of Nevada. In
rendering such opinion, such counsel may rely, as to matters of fact (but not as
to legal conclusions), to the extent they deem proper, on certificates of the
Subject Subsidiary and public officials.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-3-1
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE WEBB SELLERS
(i) No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or governmental authority or
agency (other than the issuance of the order of the Commission declaring the
Registration Statement effective and as may be required under state securities
or blue sky laws, as to which we need express no opinion) is necessary or
required to be obtained by any of the Webb Sellers (the "Subject Shareholders")
for the performance by each Subject Shareholder of its obligations under the
Purchase Agreements or its Power of Attorney or its Custody Agreement, in
connection with the offer, sale or delivery of the Securities to be sold by the
Subject Shareholders under the Purchase Agreements or the consummation by the
Subject Shareholders of the other transactions contemplated by the Purchase
Agreements.
(ii) A Power of Attorney and a Custody Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of,
each Subject Shareholder, enforceable against such Subject Shareholder in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditor's rights generally or by general equitable
principles.
(iii) Each of the U.S. Purchase Agreement and the International Purchase
Agreement has been duly authorized, executed and delivered by each of the
Subject Shareholders.
(iv) The execution, delivery and performance by each of the Subject
Shareholders of the Purchase Agreements, its Power of Attorney and its Custody
Agreement, the sale and delivery of the Securities to be sold by each of the
Subject Shareholders pursuant to the Purchase Agreements, the consummation by
each of the Subject Shareholders of the other transactions contemplated by the
Purchase Agreements, and compliance by each of the Subject Shareholders with its
obligations under the Purchase Agreements, its Powers of Attorney and its
Custody Agreement do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax, lien, charge
or encumbrance upon any of the Securities to be sold by the Subject Shareholders
pursuant to, the Escrow Agreement, the Stock Purchase Agreement, the
Registration Rights Agreement dated as of November 16, 1998 by and among the
Company and the Webb Sellers or any indenture, mortgage, deed of trust, loan
agreement, credit agreement, note or other instrument or agreement, known to us,
to which any Subject Shareholder is a party or by which any Subject Shareholder
may be bound or to which any of the Securities to be sold by any Subject
Shareholder is subject, nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order or decree, known to
us, of any government, government instrumentality or court having jurisdiction
over any of the Subject Shareholders or any of their respective assets,
properties or operations.
(v) To the best of our knowledge, each Subject Shareholder has valid and
marketable title to the Securities to be sold by such Subject Shareholder under
the Purchase Agreements,
B-1
free and clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind other than pursuant to the Purchase
Agreements. Upon the delivery of and payment for the U.S. Securities and the
International Securities as contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, each of the U.S. Underwriters
and the International Managers will receive good and marketable title to the
U.S. Securities and the International Securities, respectively, purchased by it
from the Subject Shareholders, free and clear, to our knowledge, of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, and will be a "protected purchaser" within the meaning of UCC Section 8-
303. In rendering the opinion set forth in this paragraph, we have assumed that
the U.S. Underwriters and the International Managers have no notice of an
adverse claim (within the meaning of UCC Section 8-102(a)(1) with respect to the
Securities being sold by the Subject Shareholders pursuant to the Purchase
Agreements.
Although we are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of any of the statements contained in the
Prospectuses, the information in the Prospectuses under "Principal and Selling
Stockholders," insofar as such information relates to the Subject Shareholders,
has been reviewed by us and is, to the best of our knowledge, correct and
accurate in all material respects.
Such opinion shall state that it covers matters governed by and arising
under the laws of the State of Illinois and the State of New York and the
federal laws of the United States of America and shall further state that,
insofar as such opinion covers any instrument or agreement which is governed by
the laws of a jurisdiction other than the State of Illinois or the State of New
York, such counsel has assumed that the laws governing such instrument or
agreement are identical to the laws of the State of Illinois. In rendering such
opinion, such counsel may rely, as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of the Subject
Shareholders and public officials.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
B-2
EXHIBIT C
Supplemental Agreement
----------------------
Supplemental Agreement dated as of March [ ], 1999 among U.S. Foodservice,
a Delaware corporation (the "Company"), formerly known as JP Foodservice, Inc.,
U.S. Foodservice, Inc., a Delaware corporation ("USF"), and the other persons
whose names appear on the signature pages hereof (such other persons are
hereinafter called, collectively, the "ML Entities" and, individually, an "ML
Entity").
WHEREAS, USF is the successor in interest to ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., a
Delaware corporation ("RSI"), and has succeeded to all of RSI's rights and has
assumed all of RSI's obligations under the Standstill Agreement dated as of May
17, 1996 (the "Standstill Agreement") between RSI and the ML Entities;
WHEREAS, the Company and the ML Entities are parties to an Amended and
Restated Support Agreement dated as of June 30, 1997 (the "Support Agreement");
WHEREAS, the Company has agreed to register under the Securities Act of
1933, as amended (the "Securities Act"), approximately 7.8 million shares of its
common stock, par value $.01 per share (the "Common Stock"), currently owned by
the ML Entities in order to permit the ML Entities to sell such shares in a
public offering and, in connection therewith, the Company, the ML Entities and
certain other stockholders of the Company intend to enter into a U.S. Purchase
Agreement (the "U.S. Purchase Agreement") with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc., ▇.▇. ▇▇▇▇▇▇▇▇ & Co. and First Union Capital Markets Corp., as U.S.
representatives (the "U.S. Representatives") of the several U.S. underwriters
(the "U.S. Underwriters") to be named therein, and an International Purchase
Agreement (the "International Purchase Agreement") with ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, ▇▇▇▇▇▇▇ Sachs International, Salomon Brothers International
Limited and ▇.▇. ▇▇▇▇▇▇▇▇ & Co., as lead managers (the "Lead Managers") of the
several international managers (the "International Managers" and, together with
the U.S. Underwriters, the "Underwriters") to be named therein;
WHEREAS, a number of transactions will be undertaken in connection with the
U.S. Purchase Agreement and the International Purchase Agreement (collectively,
the "Purchase Agreements" and individually, a "Purchase Agreement"), including,
without limitation, the sale and delivery of Common Stock by the ML Entities,
and, if applicable, certain other stockholders and the Company to the
Underwriters, the public offering and sale by the Underwriters of such Common
Stock in U.S. and international offerings pursuant to Registration Statement No.
333-73447 (collectively, the "Offerings"), the purchase, offer, sale and
delivery of Common Stock by the Underwriters in connection with stabilization
transactions relating to the Offerings, market-making transactions by ▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International in the Common Stock and, in the event that
any of the Underwriters is unable to sell any shares of Common Stock in the
Offerings, subsequent offers, sales and deliveries of such shares of Common
Stock (the Offerings, together with all of the foregoing transactions and all
other transactions contemplated by or relating to any of the transactions
contemplated by the Purchase Agreements are hereinafter called, collectively,
the "Offering Transactions");
WHEREAS, the parties hereto wish to provide for the amendment and waiver of
certain provisions of the Standstill Agreement and for the waiver of certain
provisions of the Support Agreement in order to effectuate the Offering
Transactions and to provide for the termination of the Standstill Agreement, and
to the extent provided herein, the Support Agreement upon consummation of the
Offerings;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Certain Definitions. Capitalized terms used in this Agreement
-------------------
which are defined in the recitals to this Agreement or the paragraph preceding
such recitals shall have the meanings set forth therein, and other capitalized
terms used in this Agreement and not defined shall have the meanings set forth
in the U.S. Purchase Agreement.
Section 2. Support Agreement. The parties hereto agree that (i) the
-----------------
provisions of Sections 2, 3(c) and 5 of the Support Agreement shall not be
applicable with respect to the Offering Transactions and (ii) upon the sale and
delivery by the ML Entities of the Initial Securities to be sold by them to the
Underwriters under the Purchase Agreements, and subject to the satisfaction of
the conditions set forth in clauses (a) and (b) if the first paragraph of
Section 4 hereof, Sections 2, 3(c) and 5 of the Support Agreement will
automatically terminate, effective as of the Closing Time; provided, however,
that the termination of such provisions of the Support Agreement shall be
without prejudice to the rights of any party thereto arising out of the breach
by any other party of any such provisions which occurred prior to such
termination, it being understood that such provisions are not applicable with
respect to the Offering Transactions.
Section 3. Standstill Agreement.
--------------------
(a) The parties hereto agree that, insofar as pertains to the Offering
Transactions, the definition of Voting Securities appearing in Article I,
Paragraph (n) of the Standstill Agreement is amended by deleting the words "RSI
Common Shares", "issued by RSI" and "directors of RSI" and replacing such words
with the words "common stock, par value $.01 per share of U.S. Foodservice, a
Delaware corporation", "issued by U.S. Foodservice, a Delaware corporation," and
"directors of U.S. Foodservice, a Delaware corporation", respectively. For all
purposes other than as pertains to the Offering Transactions, the definition of
Voting Securities appearing in Article I, Paragraph (n) of the Standstill
Agreement shall remain in effect in accordance with its original terms.
(b) The Company and USF agree that, provided that the ML Entities comply
(in connection with the Offering Transactions) with their respective obligations
under Section 4.1(c) of the Standstill Agreement as amended hereby, the Offering
Transactions shall not constitute a breach or violation of the Standstill
Agreement, and, without limitation to the foregoing, that the limitation on the
purchase of Common Stock set forth in clause (i) of the first proviso in Section
3.1(c) of the Standstill Agreement shall not be applicable to the Offering
Transactions and that the provisions of Section 4.1(c)(ii) of the Standstill
Agreement, as amended hereby, shall not be applicable to the acquisition of
Common Stock or other securities by the
2
Underwriters (whether in their capacity as underwriters of the Offerings or
otherwise and including, without limitation, acquisitions in market-making
transactions) in connection with the Offering Transactions. The Company and USF
agree that the Offerings contemplated by the Purchase Agreements satisfy the
requirements of Section 4.1(c)(i) of the Standstill Agreement.
(c) The parties hereto agree that, insofar as pertains to the Offering
Transactions, Section 4.1(c)(ii) of the Standstill Agreement shall be amended
and restated to read in full as follows:
"(ii) prevent any Person or Group from acquiring from the
underwriters for such offering beneficial ownership of Voting
Securities or securities convertible into Voting Securities
representing in the aggregate 5% or more of the Total Voting Power (it
being understood that only Voting Securities and such convertible
securities sold by such underwriters to any such Person or Group in
such offering shall be counted in making the calculation under this
clause (ii) and that any such Voting Securities or such convertible
securities sold by such underwriters shall not be aggregated with any
Voting Securities or convertible securities previously owned or
thereafter acquired by any such Person or Group)".
For all purposes other than as pertains to the Offering Transactions,
Section 4.1(c)(ii) shall remain in effect in accordance with its original terms.
(d) The Company and USF (i) confirm and agree that, provided that the ML
Entities comply (in connection with the Offering Transactions) with their
respective obligations under Section 4.1(c) of the Standstill Agreement as
amended hereby, neither the Company nor USF nor any of their respective
subsidiaries or affiliates has or will have any right of first refusal with
respect to the shares of Common Stock to be sold by the ML Entities pursuant to
the Purchase Agreements, (ii) waive the application of Section 4.2 of the
Standstill Agreement to the Offering Transactions to the extent such Section 4.2
otherwise may be applicable to the Offering Transactions, and (iii) consent to
the sale of the Securities by the ML Entities to the Underwriters pursuant to
the Offering Transactions.
(e) The Company and USF agree that, provided that the ML Entities comply
(in connection with the Offering Transactions) with their respective obligations
under Section 4.1(c) of the Standstill Agreement as amended hereby, upon
delivery of certificates representing the shares of Common Stock to be purchased
by the Underwriters from the ML Entities pursuant to the Purchase Agreements,
such certificates will not bear any legend, and such shares will not be subject
to any stop transfer orders, contemplated by the Standstill Agreement or the
Support Agreement.
(f) The parties hereto confirm and agree that, upon sale and delivery by
the ML Entities of the Initial Securities to be sold by them to the Underwriters
pursuant to the Purchase Agreements and subject to the satisfaction of the
conditions set forth in clauses (a) and (b) of the first paragraph of Section 4
hereof, the Standstill Agreement will automatically terminate,
3
effective as of the Closing Time, and the Standstill Agreement shall thereafter
not be subject to reinstatement pursuant to Article VIII thereof; provided,
however, that such termination shall be without prejudice to the rights of any
party thereto arising out of the breach by any other party of any provisions of
the Standstill Agreement as amended hereby which occurred prior to such
termination.
Section 4. Conditions to Termination of Agreements. The termination of the
---------------------------------------
Support Agreement to the extent provided in Section 2 hereof and the termination
of the Standstill Agreement as provided in Section 3 hereof shall be subject to
the satisfaction of the following conditions on or before the Closing Time:
(a) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ III shall have resigned
from the Board of Directors of the Company and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have
resigned from the Nominating Committee of the Board of Directors of the Company;
(b) the ML Entities shall have delivered and sold to the Underwriters
pursuant to the Purchase Agreements a number of shares of Common Stock which is
equal to or greater than the Subject Number. As used in this Agreement, the term
"Subject Number" means a number of shares of Common Stock equal to (i) 7,808,898
shares of Common Stock minus (ii) the greater of (x) 482,617 shares of Common
Stock and (y) 1% of the number of outstanding shares of Common Stock at the
Closing Time.
In the event that the conditions set forth in clauses (a) and (b) of the
immediately preceding paragraph are satisfied, the parties hereto agree that the
Registration Rights Agreement (the "Registration Agreement") dated as of May 17,
1996 among RSI and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation Partnership No. B-XVIII,
L.P. and the other parties thereto, and assumed by the Company effective as of
December 23, 1997, shall automatically terminate, effective as of the Closing
Time; provided, however, that such termination shall be without prejudice to the
rights of any party thereto arising out of any breach by any other party thereto
of any provisions of such Registration Rights Agreement or any other events or
circumstances which occurred prior to such termination; and provided, further,
that such termination shall not affect any obligation of the Company pursuant to
the Registration Agreement to pay costs and expenses relating to the Offering
Transactions or otherwise relating to the Offering Transactions.
Section 5. Representations and Warranties of the Company and USF. The
-----------------------------------------------------
Company and USF jointly and severally represent and warrant to the ML Entities
as follows:
(a) This Agreement has been authorized, executed and delivered by, and is a
valid, binding and enforceable agreement of, each of the Company and USF,
enforceable against each of the Company and USF in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(b) USF is a wholly-owned subsidiary of the Company and the successor in
interest to RSI. USF has succeeded to all of RSI's
4
rights and powers and has assumed all of RSI's obligations under the Standstill
Agreement and the Company has succeeded to all of RSI's rights and powers and
has assumed all of RSI's obligations under the Registration Agreement, in each
case including, without limitation, the right to consent to any amendments,
waivers or termination thereof. USF has also succeeded to RSI's right to consent
to waivers of any provisions of the Support Agreement and to the termination of
the Support Agreement and any provisions thereof. As of the date of the Support
Agreement, the Company was known as JP Foodservice, Inc. and the Company
subsequently changed its name to U.S. Foodservice by means of a statutory short
form merger, effected in accordance with the Delaware General Corporation Law,
whereby a wholly-owned subsidiary of the Company was merged into the Company,
with the Company as the surviving corporation.
(c) This Agreement has been approved by a majority of the Continuing
Directors (as defined in the Standstill Agreement) and in accordance with
Section 9.2 of the Standstill Agreement.
(d) No consent, approval or authorization of the Company, USF or any of
their respective subsidiaries or of any of the directors of the Company, USF or
any of their respective subsidiaries is required in connection with the
amendments and waivers to, and terminations of, the Standstill Agreement, the
Support Agreement and the Registration Agreement effected by this Agreement,
other than such authorizations as have been obtained and are in full force and
effect.
Section 6. Representations and Warranties by the ML Entities. Each of the
-------------------------------------------------
ML Entities, severally and not jointly, represents and warrants to the Company
as follows:
This Agreement has been duly authorized, executed and delivered by, and is
a valid, binding and enforceable agreement of, such ML Entity, enforceable
against such ML Entity in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
Section 7. Miscellaneous.
-------------
(a) Notices, Etc. All notices, requests, demands or other communications
------------
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given to any party when delivered personally
(by courier service or otherwise), when delivered by telecopy and confirmed by
return telecopy, or seven days after being mailed by first-class mail, postage
prepaid, in each case to the applicable addresses set forth below:
If to the Company or USF:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
5
If to any ML Entity:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
World Financial Center
North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as such party shall have designated by notice so given
to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
------------------------
supplemented, waived or otherwise modified or terminated except by an instrument
in writing signed by the Company, USF and each of the ML Entities.
(c) Successors and Assigns. This Agreement shall be binding upon and shall
----------------------
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns, including any successor by merger or otherwise.
(d) Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement. This Agreement shall not be used to interpret any provision of
the Standstill Agreement other than for the purpose of effectuating the Offering
Transactions.
(e) Severability. If any term of this Agreement or the application thereof
------------
to any party or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such term to the
other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
--------
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages are
--------------------
not an adequate remedy for violations of this Agreement and that any party may,
in its sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other
6
relief as such court may deem just and proper in order to enforce this Agreement
or prevent any violation hereof and, to the extent permitted by applicable law,
each party waives any objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies provided under
-------------------
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any right, power
---------
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
(i) Third-Party Beneficiaries. This Agreement is not intended to be for the
-------------------------
benefit of and shall not be enforceable by any person or entity who or which is
not a party hereto, except that the U.S. Representatives, the Lead Managers and
the Underwriters are hereby expressly acknowledged to be third party
beneficiaries of this Agreement and this Agreement may be enforced, on behalf of
the Underwriters, by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as a
U.S. Representative.
(j) Jurisdiction. Each party hereby irrevocably submits to the non-
------------
exclusive jurisdiction of the Court of Chancery in the State of Delaware or the
United States District Court for the Southern District of New York or any court
of the State of New York located in The City of New York in any action, suit or
proceeding arising in connection with this Agreement and waives any objection
based on forum non conveniens or any other objection to venue therein; provided,
-------------------- --------
however, that such consent to jurisdiction is solely for the purpose referred to
-------
in this paragraph (j) and shall not be deemed to be a general submission to the
jurisdiction of said Courts or in the States of Delaware or New York other than
for such purposes. Each party hereto hereby waives any right to a trial by jury
in connection with any such action, suit or proceeding.
(k) Governing Law. This Agreement and all disputes hereunder shall be
-------------
governed by and construed and enforced in accordance with the General
Corporation Law of the State of Delaware to the fullest extent possible and
otherwise by the internal laws of the State of New York without regard to
principles of conflicts of law.
(l) Name, Captions, Gender. The name assigned this Agreement and the
----------------------
section captions used herein are convenience of reference only and shall not
affect the interpretation or construction hereof. Whenever the context may
require, any pronoun used herein shall include the corresponding masculine,
feminine or neuter forms.
(m) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one
7
instrument. Each counterpart may instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Limitation on Liability. No ML Entity shall have any liability
-----------------------
hereunder for any actions or omissions of any other ML Entity.
(o) Expenses. Each of the parties hereto shall bear its own expenses
--------
incurred in connection with this Agreement and the transactions contemplated
hereby, except that in the event of a dispute concerning the terms or
enforcement of this Agreement, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
[SIGNATURE PAGE FOLLOWS]
8
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
U.S. FOODSERVICE
By:
------------------------------
Name:
Title:
U.S. FOODSERVICE, INC.
By:
------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL PARTNERS, INC.
By:
------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION PARTNERSHIP NO.
B-XVIII, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. B-IV, L.P., as
General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-----------------------------
Name:
Title:
9
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994
By: KECALP Inc., as General Partner
By:
-----------------------------
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. B-IV, L.P., as
Investment General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-----------------------------
Name:
Title:
ML IBK POSITIONS, INC.
By:
-----------------------------
Name:
Title:
MLCP ASSOCIATES L.P. NO. II
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-----------------------------
Name:
Title:
10
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1991
By: KECALP Inc., as General Partner
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL APPRECIATION PARTNERSHIP NO.
XIII, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. IV, L.P., as
General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-------------------------------
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LBO Partners No. IV, L.P., as
Investment General Partner
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-------------------------------
Name:
Title:
11
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc., as General
Partner
By:
------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1987
By: KECALP Inc., as General Partner
By:
------------------------------
Name:
Title:
MERCHANT BANKING L.P. NO. II
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ MBP Inc., as General Partner
By:
-----------------------------
Name:
Title:
MLCP ASSOCIATES L.P. NO. IV
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Partners, Inc., as
General Partner
By:
-----------------------------
Name:
Title:
12
Exhibit D
FORM OF LETTER OF RESIGNATION
U.S. Foodservice
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
Dear Sir or Madam:
Reference is hereby made to the U.S. Purchase Agreement dated March [],
1999 among U.S. Foodservice, a Delaware corporation (the "Company"), certain
stockholders of the Company named therein and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated and the other parties thereto (the "U.S. Purchase Agreement")
and the International Purchase Agreement dated March [], 1999 among the Company,
certain stockholders of the Company named therein and ▇▇▇▇▇▇▇ ▇▇▇▇▇
International and the other parties thereto (the "International Purchase
Agreement" and, together with the U.S. Purchase Agreement, the "Purchase
Agreements").
This is to advise you that I resign my position as a member of the Board of
Directors of the Company and, if applicable, of any of its subsidiaries and I
also resign my position, if applicable, as a member of any committees of the
Board of Directors of the Company and of any of its subsidiaries, each such
resignation to be effective as of the Closing Time (as defined in the Purchase
Agreements).
Very truly yours,
[▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇]
[▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ III]
D-1