Exhibit 1.1
--------------------------------------------------------------------------------
U.S. FOODSERVICE
(a Delaware corporation)
[ ] Shares of Common Stock
U.S. PURCHASE AGREEMENT
-----------------------
Dated: March [ ], 1999
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Table of Contents
Page
----
SECTION 1. Representations and Warranties.................................. 4
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing................. 17
SECTION 3. Covenants of the Company........................................ 19
SECTION 4. Payment of Expenses............................................. 23
SECTION 5. Conditions of U.S. Underwriters' 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 U.S. Underwriters................ 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 Underwriters.......................... 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)
U.S. PURCHASE AGREEMENT
March , 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
First Union Capital Markets Corp.
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other U.S.
underwriters named in Schedule A hereto (collectively, the "U.S. Underwriters",
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ Lynch, Goldman, Sachs & Co.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇.▇. ▇▇▇▇▇▇▇▇ & Co. and First Union Capital Markets
Corp. are acting as representatives (in such capacity, the "U.S.
Representatives"), with respect to (i) the sale by the Selling Shareholders,
acting severally and not jointly, and the purchase by the U.S. Underwriters,
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 U.S.
Underwriters, 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 U.S. Securities") to be purchased by the U.S. Underwriters and all
or any part of the shares of Common Stock subject to the option described in
Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities".
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for
the offering by the Selling Shareholders of an aggregate of shares of Common
Stock (the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International Managers")
for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇▇ Sachs International, Salomon
Brothers International Limited and ▇.▇. ▇▇▇▇▇▇▇▇ & Co. are acting as lead
managers (the "Lead Managers", which term shall also include any underwriter
substituted as provided in Section 10 of the International Purchase Agreement)
and the grant by the Company to the International Managers, acting severally and
not jointly, of an option to purchase all or any part of the International
Managers' pro rata portion of up to additional shares of Common Stock solely to
cover over-allotments, if any (the "International Option Securities"). The
Initial International Securities and the International Option Securities are
hereinafter called the "International Securities". It is understood that the
Selling Shareholders are not obligated to sell and the U.S. Underwriters are not
obligated to purchase any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers.
The U.S. Underwriters and the International Managers are hereinafter
called, collectively, the "Underwriters" and, individually, an "Underwriter";
the Initial U.S. Securities and the Initial International Securities are
hereinafter collectively called the "Initial Securities"; the U.S. Option
Securities and the International Option Securities are hereinafter collectively
called the "Option Securities"; the U.S. Securities and the International
Securities are hereinafter collectively called the "Securities"; and this
Agreement and the International 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 U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives 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 a U.S. prospectus
and an international 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 U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical
to the Form of U.S. 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
2
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 referred to as
"Rule 434 Information". Each Form of U.S. Prospectus and Form of International
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 U.S. Prospectus and the final Form of
International 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 "International Prospectus", respectively, and,
collectively, the "Prospectuses" and, individually, a "Prospectus". If Rule 434
is relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated March 15, 1999 and preliminary
International 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 U.S. Prospectus, the International 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
3
on the signature pages thereof and acknowledged by ▇▇▇▇▇▇-▇▇▇▇▇▇, Inc., and
"Supplemental Agreement" means a Supplemental Agreement substantially in the
form of Exhibit D hereto 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 U.S. Underwriter 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 U.S. Underwriter,
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 U.S. 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 U.S. 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 U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through the
U.S. Representatives 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
4
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(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 U.S. 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
-----------------------
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 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.
5
(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, 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
6
through wholly-owned subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, and none of the
outstanding limited 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 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
--------------------------
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(xi) Authorization and Description of Securities. 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 pursuant to this Agreement and to the
International Managers pursuant to the International Purchase Agreement,
respectively, and, if and when issued and delivered by the Company pursuant
to this Agreement and the International 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.
7
(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 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 U.S. Representatives, and, except in the case of
the RSI
11
Agreement (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 U.S. Representatives nor
the International Managers 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
U.S. Underwriter 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 U.S. Underwriter, 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 U.S.
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 U.S. Purchase Agreement and the
-------------------
International 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
(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 U.S.
Representatives or counsel for the U.S. Underwriters 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 U.S. Representatives or
counsel for the U.S. Underwriters 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 U.S. Underwriters; 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
U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
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 U.S. Securities set forth in Schedule B opposite the name of such
Selling Shareholder
17
which the number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter, plus any additional number of Initial U.S.
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial U.S.
Securities, subject, in each case, to such adjustments among the U.S.
Underwriters as the U.S. Representatives 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 U.S.
Underwriters, 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 U.S. Securities but not
payable on the U.S. 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 U.S. Securities
upon notice by the Global Coordinator to the Company setting forth the number of
U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery for the U.S. 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 U.S. Option Securities,
each of the U.S. Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of U.S. Option Securities then being
purchased which the number of Initial U.S. Securities set forth in Schedule A
opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the total number of
Initial U.S. 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 U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. 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 the U.S. Representatives, 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 U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter 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 U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives 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
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives 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 U.S.
------------------------
Underwriter 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 U.S.
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, 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 U.S. Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters 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 U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter 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 U.S. Underwriter, without charge, during
the period when the U.S. 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 U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters 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 U.S. Underwriters 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 material fact necessary in order to make the
statements therein not misleading in the light
20
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 U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, 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 otherwise so subject. In each jusrisdiction
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 disposition), or file or cause the
filing of a registration statement under the 1933 Act with
21
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 businesses
acquired by U.S. Foodservice subsequent to the date hereof, whether by
22
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 U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the U.S. Underwriters for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters Obligations. The obligations of
-------------------------------------------
the several U.S. Underwriters 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 U.S. Underwriters. 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 and
24
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 U.S.
Representatives shall have received the favorable opinions, each dated as
of the Closing Time and addressed to the U.S. Representatives and the Lead
Managers, of (i) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Company, in form
and substance satisfactory to counsel for the U.S. Underwriters, 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 U.S. Underwriters 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 U.S. Underwriters,
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 U.S.
Underwriters may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At the Closing
Time, the U.S. Representatives shall have received the favorable opinions,
each dated as of the Closing Time and addressed to the U.S. Representatives
and the Lead Managers, 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
U.S. Underwriters, 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 U.S. Representatives and
to such further effect as counsel to the U.S. Underwriters may reasonably
request, and (ii) Katten, Muchin & Zavis, counsel for the Webb Sellers, in
form and substance satisfactory to counsel for the U.S. Underwriters,
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 U.S. Underwriters may reasonably request.
(d) Opinion of Counsel for U.S. Underwriters. At the Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
the Closing Time, of ▇▇▇▇▇ & ▇▇▇▇ llp, counsel for the U.S. Underwriters,
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 U.S. Representatives may require, together with signed or reproduced
copies of such letter for each of the other U.S. 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,
25
and the U.S. Representatives shall have received a certificate of the
President or a Vice 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; Letters of Escrow Agent. At
Closing Time, the U.S. Representatives 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 U.S. Representatives shall have received from the
Escrow Agent a letter addressed to the U.S. Representatives and the Lead
Managers, in form and substance satisfactory to the U.S. Representatives,
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 U.S. Representatives shall have received from KPMG LLP a
letter dated such date, in form and substance satisfactory to the U.S.
Representatives, together with signed or reproduced copies of such letter
for each of the other U.S. 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 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 U.S. Representatives shall have received
from PricewaterhouseCoopers LLP a letter dated such date, in form and
substance satisfactory to the U.S. Representatives, 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
26
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(i) Comfort Letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. At the time of the
execution of this Agreement, the U.S. Representatives shall have received
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, 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 U.S. Representatives 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 U.S. Representatives shall have received a copy of the
Supplemental Agreement, in form and substance satisfactory to the U.S.
Representatives, 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 International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities to be purchased by them under the
International 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
27
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 powers duly endorsed in blank, by each of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, together with instructions to transfer such
Securities to the Underwriters at the Closing Time.
(p) Tax Forms. At the Closing Time, the U.S. Representatives 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 U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. 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 U.S. Option Securities and, at such Date of Delivery, the
U.S. Representatives 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 U.S. Underwriters, dated
such Date of Delivery and addressed to the U.S. Representatives and
the Lead Managers, 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 U.S.
Underwriters, dated such Date of Delivery and addressed to the U.S.
Representatives and the Lead Managers, 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 U.S. Underwriters. The favorable
----------------------------------------
opinion of ▇▇▇▇▇ & Wood llp, counsel for the U.S. Underwriters, 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 U.S. Representatives and dated such Date
28
of Delivery, to the effect that they reaffirm the statements made in
the letters furnished to the U.S. Representatives pursuant to Sections
5(g), (h) and (i) hereof, respectively, hereof, 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 U.S. Underwriters 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 U.S.
Representatives and counsel for the U.S. Underwriters.
(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 U.S. Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the several U.S. Underwriters to purchase the
relevant U.S. Option Securities, may be terminated by the U.S.
Representatives 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 U.S. Underwriter, each person, if any, who controls any U.S.
Underwriter 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
29
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 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 U.S. Underwriters and all persons, if any, who control any U.S.
Underwriters 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
U.S. Underwriter through the U.S. Representatives 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 U.S. 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 U.S.
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 U.S. Underwriter from whom the person asserting any
such losses, liabilities, claims, damages or expenses purchased Securities, or
any person controlling such U.S. Underwriter, if a copy of the U.S. 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 U.S. Underwriter to such person, if such sending or giving of the
U.S. Prospectus is required by law, at or prior to the written confirmation of
the sale of such Securities to such person and if the U.S. 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 U.S.
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 U.S. Securities to be sold to the U.S. Underwriters by
the Selling Shareholders pursuant to this Agreement.
30
(b) Indemnification by Selling Shareholders. Each Selling Shareholder
agrees, severally and not jointly, to indemnify and hold harmless each U.S.
Underwriter, each person, if any, who controls any U.S. Underwriter 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 U.S. Underwriters. Each U.S. Underwriter 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 U.S.
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
U.S. prospectus or the U.S. 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 U.S. Underwriters and all persons, if any, who control
any U.S. Underwriters 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
31
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 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 U.S. Underwriters and all persons, if any, who control any U.S.
Underwriter 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 U.S. Underwriter 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
U.S. Underwriter, 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 a U.S. Underwriter or a Selling Shareholder or who controls a U.S.
Underwriter 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 U.S. Underwriters on the other hand
from the offering of the U.S. 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 U.S. Underwriters 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 U.S. Underwriters on the other hand in connection with
the offering of the U.S. 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 U.S. Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the U.S. Underwriters, in each case as set
forth on the cover of the U.S. Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the one
hand and the U.S. Underwriters 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 U.S. Underwriters 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 U.S. Underwriters 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 U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to 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
33
any 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 U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter 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 a U.S.
Underwriter 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 U.S.
Underwriter, 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 U.S. Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial U.S. 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 U.S. Underwriter or controlling
person of any U.S. Underwriter, 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 U.S. Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives 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 U.S. Underwriters to
purchase U.S. Option Securities on any Date of Delivery which is after the
Closing Time may be terminated by the U.S. Representatives, 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 U.S. Representatives, impracticable to market the Securities or
to enforce contracts for the sale of the U.S. 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 U.S. Underwriters to purchase U.S. 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 U.S. Underwriters. If one or more
-----------------------------------------------
of the U.S. Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the U.S. Securities which it or they are obligated to purchase under
this Agreement on such date (the "Defaulted Securities"), the U.S.
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, 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 U.S. Representatives 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 U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters 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 U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
U.S. 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 U.S. Underwriters to purchase and of the Company to sell
the U.S. Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-
defaulting U.S. Underwriter.
35
No action taken pursuant to this Section 10 shall relieve any defaulting
U.S. Underwriter 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 U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives 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 "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter 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 U.S. Underwriters may,
at the option of the U.S. Representatives, by notice from the U.S.
Representatives 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 U.S. Underwriters may, at the option of the U.S. Representatives,
by notice from the U.S. Representatives 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 U.S.
Underwriters to purchase the U.S. 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 U.S.
Underwriters to purchase the relevant U.S. Option Securities, as the case may
be, either the U.S. Representatives 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 exceeding seven days
36
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 U.S. Underwriter or by
any person who controls any U.S. Underwriter 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 U.S. Underwriter or by any
person who controls any U.S. Underwriter, 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 U.S. Underwriter or any
person, if any, who controls any U.S. Underwriter 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
U.S. Underwriter against any loss incurred by such U.S. Underwriter 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 U.S. Underwriter or controlling person is able to purchase United States
dollars with the amount of judgment currency actually received by such U.S.
Underwriter 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 U.S.
Underwriters shall be directed to the U.S. Representatives at ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, North Tower, World
Financial Center, New York, New York 10281-1209, attention of Equity Capital
Markets; 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
-------
be binding upon the U.S. Underwriters, the Company and the Selling 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
U.S. Underwriters, 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 U.S.
Underwriters, 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 U.S. Underwriter 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 U.S. Underwriters, 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
By:
---------------------------------
Name:
Title:
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:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
FIRST UNION CAPITAL MARKETS CORP.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BY:
---------------------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
43
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ -------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated...........................................................
▇▇▇▇▇▇▇, Sachs & Co.......................................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc..................................................
▇.▇. ▇▇▇▇▇▇▇▇ & Co........................................................
First Union Capital Markets Corp..........................................
_________
Total.............................................................
=========
Sch A-1
SCHEDULE B
Number of Initial U.S. Maximum Number of U.S. Option
Securities to be Sold Securities to Be Sold
--------------------- -------------------------------
U.S. Foodservice...................... 0 1,043,513
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation 2,701,653 0
Partnership No. B-XVIII, L.P.(1).....
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1994(1)..... 42,085 0
ML Offshore LBO Partnership No.
B-XVIII(1)........................... 1,359,277 0
ML IBK Positions, Inc. (1)............ 892,912 0
MLCP Associates L.P. No. II (1)....... 32,399 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1991(1)..... 117,671 0
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Appreciation 1,004,463 0
Partnership No. XIII, L.P. (1).......
ML Offshore LBO Partnership No. 25,536 0
XIII(1)..............................
ML Employees LBO Partnership No. I, 24,969 0
L.P. (1).............................
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1987(1)..... 18,869 0
Merchant Banking L.P. No. II(1)....... 18,869 0
MCLP Associates L.P. No. IV(1)........ 8,416 0
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇(2)............... 283,855 0
M. ▇▇▇▇ ▇▇▇▇▇ (2)..................... 283,855 0
▇▇▇▇▇ ▇. ▇▇▇▇▇ (2).................... 141,928 0
---------------------- -----------------------
Total................................. 6,956,757 1,043,513
====================== =======================
---------------------------------------------------------------------
(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 U.S.
Securities shall be $.
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters 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 U.S. 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 U.S.
Securities but not payable on the U.S. 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 otherwise 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
74