SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: U.S. FOODSERVICE
CENTRAL INDEX KEY: 0000928395
STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES &
GENERAL LINE [5141]
IRS NUMBER: 521634568
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0627
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT:
SEC FILE NUMBER: 005-43415
FILM NUMBER: 98500181
BUSINESS ADDRESS:
STREET 1: 9755 PATUXENT WOODS WY
CITY: COLUMBIA
STATE: MD
ZIP: 21046
BUSINESS PHONE: 4103127100
MAIL ADDRESS:
STREET 1: 9755 PATUXENT WOODS WAY
CITY: COLUMBIA
STATE: MD
ZIP: 21046
<PAGE>
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: MERRILL LYNCH & CO., INC.
CENTRAL INDEX KEY: 0000065100
STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS
& FLOTATION COMPANIES [6211]
IRS NUMBER: 132740599
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1228
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: 250 VESEY ST
STREET 2: WORLD FINANCIAL CTR N TOWER
CITY: NEW YORK
STATE: NY
ZIP: 10281-1334
BUSINESS PHONE: 2124491000
MAIL ADDRESS:
STREET 1: 250 VESEY ST
STREET 2: WORLD FINANCIAL CTR N TOWER
CITY: NEW YORK
STATE: NY
ZIP: 10281-1334
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No.2)
U.S. Foodservice
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
90331R101
(CUSIP Number)
c/o Merrill Lynch Capital Partners, Inc.
225 Liberty Street
New York, New York 10080-6123
Attention: James V. Caruso
Telephone: (212) 236-7753
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
Copy to:
Frank J. Marinaro, Esq.
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, New York 10281-1312
Telephone: (212) 449-7948
March 31, 1999
(Date of Event which Requires Filing of this Statement)
========================================
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [__].
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH & CO., INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 45,000
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 45,000
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 45,000
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) less than 1%
(14) Type of Reporting Person (See Instructions) HC, CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH GROUP, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) HC, CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH MBP INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERCHANT BANKING L.P. NO. II
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL PARTNERS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML EMPLOYEES LBO MANAGERS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH LBO PARTNERS NO. IV, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. XIII, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. XIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH LBO PARTNERS NO. B-IV, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL APPRECIATION
PARTNERSHIP NO. B-XVIII, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MLCP ASSOCIATES L.P. NO. II
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MLCP ASSOCIATES L.P. NO. IV
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML IBK POSITIONS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
KECALP INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1987
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1991
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 90331R101
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1994
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power -0-
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power -0-
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person -0-
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) -0-
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
This Amendment No. 2 amends the Statement on Schedule 13D initially filed
with the Securities and Exchange Commission on January 2, 1998 (the "Original
Filing") and subsequently amended by Amendment No. 1 filed with the Securities
and Exchange Commission on March 8, 1999 ("Amendment No. 1") with respect to the
common stock, par value $.01 per share (the "Shares") of JP Foodservice, Inc.
(subsequently renamed U.S. Foodservice) by (a) Merchant Banking L.P. No. II, (b)
ML Employees LBO Partnership No. I, L.P., (c) Merrill Lynch Capital Appreciation
Partnership No. XIII, L.P., (d) ML Offshore LBO Partnership No. XIII, (e)
Merrill Lynch Capital Appreciation Partnership No. B-XVIII, L.P., (f) ML
Offshore LBO Partnership No. B-XVIII, (g) MLCP Associates L.P. No. II, (h) MLCP
Associates L.P. No. IV, (i) ML IBK Positions, Inc., (j) Merrill Lynch KECALP
L.P. 1987, (k) Merrill Lynch KECALP L.P. 1991, (l) Merrill Lynch KECALP L.P.
1994 (collectively, the "ML Investors"), (m) Merrill Lynch & Co., Inc., (n)
Merrill Lynch Group, Inc., (o) Merrill Lynch MBP Inc., (p) Merrill Lynch Capital
Partners, Inc., (q) ML Employees LBO Managers, Inc., (r) Merrill Lynch LBO
Partners No. IV, (s) Merrill Lynch LBO Partners No. B-IV and (t) KECALP, Inc.
(collectively with the ML Investors, the "Filing ML Entities") (as so amended,
the Schedule 13D"). This Amendment No. 2 is being filed to reflect the sale of
Shares by the ML Investors pursuant to the Registration Rights Agreement. Unless
otherwise defined herein all capitalized terms shall have the meanings ascribed
to them in the Original Filing or Amendment No. 1.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by deleting the final
paragraph thereof in its entirety and replacing it with the following:
On March 31, 1999, pursuant to the registration statement on Form S-3
originally filed by the Issuer on March 5, 1999 (No. 333-73447), as amended, the
ML Investors sold 7,808,898 shares of Issuer Common Stock to the public at a
sales price of $43.00 per Share, less underwriting commissions.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Schedule 13D is hereby amended by the addition of the
following to the end thereof:
On March 31, 1999, pursuant to the registration statement on Form S-3 filed
by the Issuer on March 5, 1999 (No. 333-73447), as amended, the ML Investors
sold shares of Issuer Common Stock to the public at a sales price of $43.00 per
Share, less underwriting commissions. As a result, the Filing ML Entities ceased
to be beneficial owners of more than 5% of the outstanding shares of the Issuer
Common Stock as of March 31, 1999. The ML Investors sold their Shares pursuant
to their rights under the Registration Rights Agreement. Merrill Lynch & Co.,
Inc. may be deemed to be a beneficial owner of 45,000 Shares held by its
broker-dealer affiliate as of March 31, 1999.
<PAGE>
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 of the Schedule 13D is hereby amended by the addition of the
following to the end thereof:
On March 25, 1998, in connection with the sale of the Shares, the ML
Investors, the Issuer, and certain other selling stockholders party thereto
entered into a U.S. purchase agreement and an international purchase agreement
(the "Purchase Agreements") with the underwriters (the "Underwriters") parties
thereto. Pursuant to the Purchase Agreements, the ML Investors agreed to sell
all of their respective Shares to the Underwriters at a sales price of $43.00
per Share, less underwriting commissions. Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Merrill Lynch International, affiliates of the Filing ML
Entities, were parties to the U.S. purchase agreement and international purchase
agreement, respectively, and received underwriting fees in connection with the
Offering.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Original Filing is hereby amended by the addition of the
following exhibit to the end thereof:
G. U.S. Purchase Agreement dated March 25, 1999 among the ML
Investors, the Issuer, the underwriters listed on the schedules
thereto and certain other selling stockholders listed on the
schedules thereto.
H. International Purchase Agreement dated March 25, 1999 among the ML
Investors, the Issuer, the underwriters listed on the schedules
thereto and certain other selling stockholders listed on the
schedules thereto.
<PAGE>
Signature Page
--------------
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this Statement is true, complete and
correct.
April 1, 1999 MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
<TABLE>
<S> <C>
EXHIBIT INDEX
Exhibits A through F were filed as attachements to the Original Filing.
* A. Agreement and Plan of Merger dated as of June 30, 1997, as amended, among the Issuer, Merger
Sub and Rykoff.
* B. Amended and Restated Support Agreement dated as of June 30, 1997, among the Issuer and the ML
Entities, acknowledged by Rykoff.
* C. Standstill Agreement dated as of May 17, 1996 among the ML Entities, certain other stockholders
of Rykoff and Rykoff.
* D. Registration Rights Agreement dated as of May 17, 1996 among the ML Investors and Rykoff.
* E. Assumption Agreement dated as of December 23, 1997, with respect to Registration Rights
Agreement, by JP Foodservice.
* F. Joint Filing Agreement dated as of December 31, 1997 among the Filing ML Entities.
G. U.S. Purchase Agreement dated March 25, 1999 among the ML Investors, the Issuer, the
underwriters listed on the schedules thereto and certain other
selling stockholders listed on the schedules thereto.
H. International Purchase Agreement dated March 25, 1999 among the ML Investors, the Issuer, the
underwriters listed on the schedules thereto and certain other
selling stockholders listed on the schedules thereto.
- ------------------------
* Previously filed.
</TABLE>
<PAGE>
EXHIBIT G
U.S. FOODSERVICE
(a Delaware corporation)
6,247,119 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: March 25, 1999
<PAGE>
<TABLE>
<S> <C>
Table of Contents
Page
SECTION 1. Representations and Warranties...................................................................4
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.................................................16
SECTION 3. Covenants of the Company........................................................................18
SECTION 4. Payment of Expenses.............................................................................21
SECTION 5. Conditions of U.S. Underwriters Obligations.....................................................22
SECTION 6. Indemnification.................................................................................27
SECTION 7. Contribution....................................................................................31
SECTION 8. Representations, Warranties and Agreements to Survive Delivery..................................32
SECTION 9. Termination of Agreement........................................................................33
SECTION 10. Default by One or More of the U.S. Underwriters................................................33
SECTION 11. Default by One or More of the Selling Shareholders or the Company..............................34
SECTION 12. Agent for Service; Submission to Jurisdiction; Waiver of Immunities............................35
SECTION 13. Notices........................................................................................36
SECTION 14. Parties........................................................................................36
SECTION 15. Governing Law and Time.........................................................................36
SECTION 16. Effect of Headings.............................................................................36
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 the Selling Shareholders..............................Sch F-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Hogan & Hartson L.L.P...................................A-1-1
Exhibit A-2 - Form of Opinion of Chapman & Cutler........................................A-2-1
Exhibit A-3 - Form of Opinion of Lionel Sawyer & Collins.................................A-3-1
Exhibit B -[Omitted Intentionally]........................................................B-1
Exhibit C - Form of Supplemental Agreement................................................C-1
Exhibit D - Form of Letter of Resignation.................................................D-1
<PAGE>
U.S. FOODSERVICE
(a Delaware corporation)
6,247,119 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
March 25, 1999
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
J.C. Bradford & Co.
First Union Capital Markets Corp.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
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 Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") 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 Merrill Lynch, Goldman, Sachs & Co.,
Salomon Smith Barney Inc., J.C. Bradford & 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 937,067 additional shares of
Common Stock to cover over-allotments, if any. The aforesaid 6,247,119 shares of
Common Stock (the "Initial U.S. Securities") to be purchased by the U.S.
Underwriters and all or any part of the 937,067 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 1,561,779 shares of Common Stock (the "Initial International
Securities") through arrangements with certain underwriters outside the United
States and Canada (the "International Managers") for which Merrill Lynch
International, Goldman Sachs International, Salomon Brothers International
Limited and J.C. Bradford & 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 234,267 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 Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith 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 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 U.S. preliminary prospectus dated March 15, 1999 and international
preliminary 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 ("EDGAR").
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 Rykoff-Sexton, 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, Merrill Lynch Capital
Partners, Inc. and the other persons whose names are set forth on the signature
pages thereof and acknowledged by Rykoff-Sexton, Inc., and "Supplemental
Agreement" means a Supplemental Agreement substantially in the form of Exhibit C
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 transmitted copies thereof filed with the Commission
pursuant to EDGAR, 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.
(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 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 (the "Rights Agent"), and the preferred share purchase
rights (the "Rights") issued under the Rights Agreement conform to all
of the respective statements relating thereto contained in the
Prospectuses and such statements conform to the rights set forth in
the instruments defining such rights; no holder of Securities will be
subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any security holder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws, partnership
agreement, limited 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 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. Amendment No. 5 dated as of March
25, 1998 to the Rights Agreement has been duly authorized, executed
and delivered by the Company and has been executed and delivered by
the Rights Agent.
(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 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").
(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 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 Selling Shareholders
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.
(xxix) Webb Lock-Up. The Company has, on the date of this Agreement,
delivered to each of J. Christopher Reyes, M. Jude Reyes and David K.
Reyes (the "Webb Holders"), with a copy to Katten, Muchen & Zavis,
attention: Stephen B. Napolitano, written notice pursuant to Section
5(e) of the Webb Registration Agreement (as defined in Schedule E
hereto) stating that the Company is invoking the restrictions set
forth in Section 5(e) of the Webb Registration Agreement and that the
Webb Holders may not offer or sell any Common Stock, or any securities
convertible into or exchangeable for Common Stock (whether or not such
Common Stock constitutes Registrable Securities (as defined in the
Webb Registration Agreement), and however acquired) during the period
of 90 days from the date of this Agreement; and such notice has been
delivered in accordance with the applicable notice provisions of the
Webb Registration Agreement. The Company has delivered written stop
transfer instructions to the registrar and transfer agent (the
"Transfer Agent") for the Common Stock with respect to 358,423 shares
of Common Stock owned by J. Christopher Reyes, 358,423 shares of
Common Stock owned by M. Jude Reyes and 179,211 shares of Common Stock
owned by David K. Reyes, constituting all of the shares of Common
Stock issued to the Webb Holders pursuant to the Stock Purchase
Agreement, and, in the event that any additional shares of Common
Stock are issued to any of the Webb Holders pursuant to the Stock
Purchase Agreement during the aforesaid 90-day period, the Company has
delivered or will deliver stop transfer instructions with respect to
such shares to the Transfer Agent prior to the issuance thereof. The
Company agrees that, during the 90-day period referred to in the first
sentence of this paragraph, it will not amend or modify Section 5(e)
of the Webb Registration Agreement or grant any waiver thereunder, or
rescind any such stop transfer instructions or grant any waiver
thereunder, in each case without the prior written consent of the
Global Coordinator, and that the Company will, during such 90-day
period, take such action as the Global Coordinator may reasonably
request to enforce the restrictions set forth in Section 5(e) of the
Webb Registration Agreement and such stop transfer instructions.
(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 and as of the Closing Time, and agrees with
each U.S. Underwriter, as follows, except that only ML Offshore LBO Partnership
No. B-XVIII and ML Offshore LBO Partnership No. XIII make the representations
and warranties set forth in subparagraph (ix) 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.
(ii) Authorization of Agreements. Such Selling Shareholder 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 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 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 Agreements
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 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 the
charter or by-laws, limited partnership 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 have, good and marketable title to the Securities to
be sold by such Selling Shareholder under the Purchase Agreements,
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.
(iv) 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.
(v) 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.
(vi) 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 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.
(vii) 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.
(viii) Certificates Suitable for Transfer. Certificates for all of the
Securities to be sold by such Selling Shareholder pursuant to the
Purchase 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.
(ix) 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 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 937,067 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 Brown & Wood LLP,
One World Trade Center, New York, New York 10048, 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. Payment shall be made to the
Selling Shareholders by wire transfer or intra-bank transfer of immediately
available funds to the accounts designated by the Selling Shareholders or
Merrill Lynch 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. Merrill Lynch, 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 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 EDGAR, 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
EDGAR, 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 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 so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date
of the Registration Statement and any Rule 462(b) Registration
Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds, if any,
received by it from the sale of the Securities in the manner specified
in the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing of
the Option Securities on the New York Stock Exchange, subject to
official notice of issuance.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of this Agreement, the Company will not, without the prior
written consent of the Global Coordinator, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of or otherwise dispose of or transfer
any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or repayable with Common Stock
(including, without limitation, any Common Stock or other such
securities issued by the Company or which are now owned or hereafter
acquired by the Company or with respect to which the Company has or
hereafter acquires the power of disposition), or file or cause the
filing of a registration statement under the 1933 Act with respect to
any of the foregoing, or (ii) enter into any swap or any other
agreement or transaction that transfers, in whole or in part, the
economic consequence of ownership of the Common Stock or any
securities convertible into or exchangeable or exercisable for or
repayable with Common Stock, whether any such swap or other agreement
or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or other securities, in cash or otherwise.
Notwithstanding the provisions of the foregoing sentence, the Company
may do any of the following: (1) issue Common Stock under its employee
or director stock, bonus or compensation plans, or grant options to
purchase Common Stock or other awards under such plans, in each case
as such plans are in effect on the date of this Agreement, and file
one or more registration statements on Form S-8 covering the offering
and sale of securities issuable under such plans; (2) issue Common
Stock or securities convertible into or exchangeable or exercisable
for or repayable with Common Stock to owners of businesses which the
Company may acquire in the future, whether by merger, acquisition of
assets or capital stock or otherwise, as consideration for the
acquisition of such businesses or to management employees of such
businesses in connection with any such acquisition, enter into and
implement collar and other price protection arrangements in connection
with any such acquisition, and file one or more registration
statements on Form S-4 covering the offering and sale of Common Stock
or such other securities by the Company to such owners in connection
with such acquisitions; (3) in connection with the future acquisition
of any business, whether by merger, acquisition of assets or capital
stock or otherwise, that has outstanding warrants, options or other
securities convertible into or exchangeable or exercisable for or
repayable with common stock or other equity securities, or that
maintains employee or director bonus or compensation plans providing
for the issuance of common stock or options to purchase common stock
or other awards, (A) issue substantially similar new warrants, options
or other securities to replace the outstanding options, warrants or
other securities of such acquired business or assume the obligations
of such acquired business under such outstanding warrants, options or
other securities or such plans, and issue Common Stock pursuant to any
such warrants, options or other securities, as in effect on the date
of such issuance or assumption, or grant options to purchase Common
Stock or other awards and issue Common Stock under any such plans, as
in effect on the date of acquisition, and (B) file one or more
registration statements on Form S-8 covering the offering and sale of
securities issuable under such plans; (4) issue Common Stock pursuant
to acquisition agreements existing on the date of this Agreement which
were entered into by the Company to effect the acquisitions of Lone
Star Institutional Grocers, Inc., J.H. Haar & Sons, L.L.C. and Joseph
Webb 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 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 Merrill Lynch Sellers 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 Selling
Shareholders pursuant to Section 4(b) 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 Selling Shareholders, (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.
(b) Expenses of the Selling Shareholders. The Selling Shareholders, 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 Selling Shareholders, and (iii) underwriting discounts and
commissions with respect to the Securities sold by them to the Underwriters.
(c) Allocation of Expenses. The provisions of this Section 4 shall not enlarge
or otherwise alter the respective rights or obligations of the Selling
Shareholders 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.
(d) 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 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) Hogan & Hartson 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) Chapman & Cutler, special Illinois counsel to the Company, and
Lionel Sawyer & Collins, 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 each of the attorneys listed on Schedule F attached
hereto for the Selling Shareholders 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.
(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 Brown & Wood 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, 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. At Closing Time, the U.S.
Representatives shall have received a certificate signed by all of the
Selling Shareholders, 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) the Selling Shareholders 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).
(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) Opinion of Delaware Counsel. At the Closing Time, the U.S. Representatives
shall have received the favorable opinion, dated as of the Closing Time and
addressed to the U.S. Representatives and the Lead Managers, of Richards,
Layton & Finger, special Delaware counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed and reproduced copies of such letter for each of the other
Underwriters, to the effect that a majority of the "Continuing Directors"
(as defined in the Standstill Agreement) have approved the Supplemental
Agreement or, alternatively, that the Supplemental Agreement validly amends
the Standstill Agreement, and to such further effect as counsel to the U.S.
Underwriters may reasonably request.
(i) Comfort Letter from Arthur Andersen LLP. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from Arthur
Andersen 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 and Arthur Andersen 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) 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 Supplemental 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
Matthias B. Bowman and Albert J. Fitzgibbons 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) Delivery of Securities; Webb Lock-Up. Not later than the second business
day before the Closing Time, the Securities to be sold by the Selling
Shareholders 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 with signatures guaranteed, by each of the Selling Shareholders,
together with instructions to transfer such Securities to the Underwriters
at the Closing Time. On or prior to the date of this Agreement, the U.S.
Representatives shall have received a signed copy of the notice and a
signed copy of the stop transfer instructions referred to in Section
1(a)(xxix), together with evidence that such notice has been duly delivered
as contemplated by Section 1(a)(xxix) and that such stop transfer
instructions have been duly delivered to the Transfer Agent.
(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) Hogan &
Hartson 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) Chapman & Cutler, special Illinois counsel to
the Company, and Lionel Sawyer & Collins, 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 Brown &
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 and Arthur
Andersen LLP, each in form and substance satisfactory to the U.S.
Representatives and dated such Date 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) 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.
(v) Opinion of Delaware Counsel. The favorable opinion of Richards, Layton &
Finger, special Delaware 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,
to the same effect as the opinion required by Section 5(h), together with
signed or reproduced copies of such letter for each of the Underwriters.
(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 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 Merrill Lynch 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.
(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 U.S. 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 such U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto) or such U.S.
preliminary 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 Merrill Lynch; counsel to the
Company, its directors, each of its officers who signed the Registration
Statement and all persons, if any, who control the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by
the Company; and counsel to the Selling Shareholders and all persons, if any,
who control any Selling Shareholders within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall be selected by the Majority Selling
Shareholders. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except 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 Section 20 of the 1934 Act,
(ii) 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.
(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 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 1933 Act) 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 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 1Default 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.
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 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 Merrill Lynch Capital Partners,
Inc. 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 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 Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith 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 9755 Patuxent Woods Drive, Columbia, Maryland
21046, attention of David M. Abramson; and notices to the Selling Shareholders
or to the Authorized Agent shall be directed to them at Merrill Lynch Capital
Partners, Inc., 225 Liberty Street, New York, New York 10080-6123, Attention of
William Orlando, with a copy to Merrill Lynch & Co., Inc., World Financial
Center, North Tower, 250 Vesey Street, New York, New York 10281-1323, Attention
of Frank J. Marinaro, Esq.
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]
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:
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP
NO. B-XVIII, L.P.
By: Merrill Lynch LBO Partners No. B-IV, L.P.,
as General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By:
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
By: Merrill Lynch LBO Partners No. B-IV, L.P.,
as Investment General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
ML IBK POSITIONS, INC.
By:
Name:
Title:
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By:
Name:
Title:
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP
NO. XIII, L.P.
By: Merrill Lynch LBO Partners No. IV, L.P., as
General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: Merrill Lynch LBO Partners No. IV, L.P., as
Investment General Partner
By: Merrill Lynch 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:
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By:
Name:
Title:
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as General Partner
By:
Name:
Title:
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
<PAGE>
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
J.C. BRADFORD & CO.
FIRST UNION CAPITAL MARKETS CORP.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
<PAGE>
SCHEDULE A
Name of U.S. Underwriter Number of
Initial U.S.
Securities
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............................. 1,812,707
Goldman, Sachs & Co. .................................... 1,812,706
Salomon Smith Barney Inc. ............................... 1,812,706
J.C. Bradford & Co. ..................................... 303,500
First Union Capital Markets Corp. ....................... 303,500
A.G. Edwards & Sons, Inc. ............................... 45,000
Morgan Stanley & Co. Incorporated ....................... 45,000
Schroder & Co. Inc. ..................................... 45,000
Wasserstein Perella Securities, Inc. .................... 45,000
Blaylock & Partners, L.P. ............................... 22,000
-------------
Total...................................... 6,247,119
=============
<PAGE>
SCHEDULE B
Number of Initial U.S. Maximum Number of U.S. Option
Securities to be Sold Securities to Be Sold
U.S. Foodservice....................... 0 937,067
- -----------------------------------------
Merrill Lynch Capital Appreciation 2,701,653 0
Partnership No. B-XVIII, L.P.........
- -----------------------------------------
Merrill Lynch KECALP L.P. 1994......... 42,085 0
- -----------------------------------------
ML Offshore LBO Partnership No. B-XVIII 1,359,277 0
- -----------------------------------------
ML IBK Positions, Inc.................. 892,912 0
- -----------------------------------------
MLCP Associates L.P. No. II............ 32,399 0
- -----------------------------------------
Merrill Lynch KECALP L.P. 1991......... 117,671 0
- -----------------------------------------
Merrill Lynch Capital Appreciation 1,004,463 0
Partnership No. XIII, L.P............
- -----------------------------------------
ML Offshore LBO Partnership No. XIII... 25,536 0
- -----------------------------------------
ML Employees LBO Partnership No. I, L.P. 24,969 0
- -----------------------------------------
Merrill Lynch KECALP L.P. 1987......... 18,869 0
- -----------------------------------------
Merchant Banking L.P. No. II........... 18,869 0
MCLP Associates L.P. No. IV............ 8,416 0
----------------- -------------------
Total.................................. 6,247,119 937,067
===================================================================================================================
<PAGE>
SCHEDULE C
1. The initial public offering price per share for the U.S.
Securities shall be $43.00.
2. The purchase price per share for the U.S. Securities to be
paid by the several U.S. Underwriters shall be $41.385, being an amount
equal to the initial public offering price set forth above less $1.615
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.
<PAGE>
SCHEDULE D
LIST OF SUBJECT SUBSIDIARIES
Name of Subsidiary Jurisdiction of Incorporation
White Swan, Inc. Delaware
JP Foodservice Distributors, Inc. Delaware
John Sexton & Co. Delaware
Illinois Fruit & Produce Corp. Illinois
U.S. Foodservice, Inc. Delaware
Biggers Brothers, Inc. Delaware
E & H Distributing Co. Nevada
Joseph Webb Foods, Inc. Delaware
<PAGE>
SCHEDULE E
Registration Rights Agreements
Registration Rights Agreement dated as of May 17, 1996 (the "RSI Agreement")
among Rykoff-Sexton, Inc., a Delaware corporation, and Merrill Lynch
Capital Appreciation Partnership, No. B-XVIII, L.P. and the other
parties thereto and assumed by USF.
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.
Registration Rights Agreement dated as of October 23, 1998 between U.S.
Foodservice and Geoffrey Haar.
(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:
Geoffrey Haar.
Registration Rights Agreement dated as of November 16, 1998 (the "Webb
Registration Agreement") among U.S. Foodservice and the stockholders of
Joseph Webb 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. Christopher Reyes, 358,423 shares; M. Jude Reyes,
358,423 shares; and David K. Reyes, 179,211 shares, subject to
adjustments as indicated in (b) above.
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.
Holders of securities entitled to registration rights thereunder and number
of such securities held by each such holder as of March 1, 1999: Richard Hafdal,
30,049 shares; Gary Hafdal, 498 shares; Frank Roedl, 2,322 shares; Rod Buck,
6,337 shares; Sharon Robbins, 166 shares; and B. Scott Ball, 7,423 shares.
Registration Rights Agreement dated as of July 6, 1998 among U.S.
Foodservice and C. Donald Stahl.
(a) Type of securities entitled to registration rights thereunder:
Common Stock.
(b) Total number of securities entitled to registration rights thereunder:
12,925 shares.
Holders of securities entitled to registration rights thereunder and number
of such securities held by such holder as of March 1, 1999: C. Donald Stahl.
<PAGE>
SCHEDULE F
List of Counsel to the Selling Shareholders
Attorney Selling Shareholder
Frank J. Marinaro, Esq...............................Merrill Lynch Capital Appreciation Partnership No. B XVIII, L.P.
ML IBK Positions, Inc.
MLCP Associates L.P. No. II
MLCP Associates L.P. No. IV
Merrill Lynch Capital Appreciation Partnership No. XIII, L.P.
ML Employees LBO Partnership No. I, L.P.
Robin Mass, Esq......................................Merrill Lynch KECALP L.P. 1994
Merrill Lynch KECALP L.P. 1991
Merrill Lynch KECALP L.P. 1987
Margaret E. Nelson, Esq..............................Merchant Banking L.P. No. II
Curtis, Mallet-Prevost, Colt & Mosle
and W.S. Walker & Company............................ML Offshore LBO Partnership No. B-XVIII
ML Offshore LBO Partnership No. XIII
<PAGE>
Exhibit A
FORM OF OPINION OF HOGAN & HARTSON L.L.P.
(a) The Company has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware.
(b) The Company has the corporate power and authority under the Company's
certificate of incorporation (the "Certificate of Incorporation"), the Company's
by-laws (the "By-Laws") and the Delaware General Corporation Law 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.
(c) The Company is authorized to transact business as a foreign corporation in
each jurisdiction specified in Schedule 1 to such opinion as of the respective
dates specified therein.
(d) The authorized capital stock of the Company is as set forth under the
caption "Capitalization" in the Prospectuses. All shares of issued and
outstanding Common 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 were not issued in violation of any preemptive rights
arising under the Certificate of Incorporation, the By-Laws or the Delaware
General Corporation Law.
(e) The Option Securities 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 in accordance with 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, fully paid and
non-assessable. No holder of any of the Option Securities will be subject to
personal liability by reason of being such a holder, except as such holder may
be liable by reason of such holder's own conduct and acts.
(f) The issuance and sale by the Company of the Option Securities to the
Underwriters is not subject to any preemptive rights arising under the
Certificate of Incorporation, the By-Laws or the Delaware General Corporation
Law or, to our knowledge, any similar contractual rights.
(g) Each Delaware Subsidiary was incorporated and is validly existing and in
good standing under the laws of the State of Delaware.
(h) Each Delaware Subsidiary has the corporate power and authority under its
certificate of incorporation, its bylaws and the Delaware General Corporation
Law to own, lease and operate its properties and to conduct its business as
described in the Prospectuses, and each Delaware Subsidiary and each of Illinois
Fruit & Produce Corp. and E&H Distributing Co. is authorized to transact
business as a foreign corporation in each jurisdiction specified in Schedule 2
or Schedule 3 to such opinion with respect to it as of the respective dates
specified therein.
(i) All of the issued and outstanding capital stock of each Delaware Subsidiary
has been duly authorized and validly issued and is fully paid and non-assessable
and, to our knowledge, is owned of record by the Company, directly or through
wholly-owned subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(j) The U.S. Purchase Agreement and the International Purchase Agreement have
been duly authorized, executed and delivered on behalf of the Company.
(k) The Supplemental Agreement has been duly authorized, executed and delivered
on behalf of the Company and USF and is a valid and binding agreement of the
Company and USF, enforceable against the Company and USF in accordance with its
terms, except (i) as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including, without
limitation, the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and (ii) as may be
limited by the exercise of judicial discretion and the application of principles
of equity, including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the Supplemental
Agreement, the Support Agreement or the Standstill Agreement is considered in a
proceeding in equity or at law).
(l) The Registration Statement has become effective under the Securities Act,
the Prospectuses have been filed pursuant to Rule 424(b) promulgated pursuant to
the Securities Act in the manner and within the time period required by Rule
424(b) and, to our knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and (ii) no
proceedings for that purpose have been instituted or are threatened by the
Commission.
(m) The Registration Statement, including the Rule 430A Information, and the
Prospectuses, excluding the Incorporated Filings, 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 express no opinion), complied as to form in all material respects with
the requirements of the Securities Act and the rules and regulations of the
Commission thereunder.
(n) Each Incorporated Filing (other than the financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as to
which we express no opinion), on the date such Incorporated Filing was filed
with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder.
(o) The form of certificate used to evidence the Common Stock complies in all
material respects with all applicable requirements of the Delaware General
Corporation Law, with any applicable requirements of the Certificate of
Incorporation and the By-Laws and with all applicable requirements of the New
York Stock Exchange.
(p) The information in the Prospectuses under the captions "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," "Description of Capital
Stock," "Shares Eligible for Future Sale" and "U.S. Tax Consequences to Non-U.S.
Holders" and the information in the Registration Statement under Item 15
thereof, in each case to the extent that the information constitutes summaries
of legal matters, summaries of the Certificate of Incorporation, the By-Laws,
the Rights Agreement or other instruments or agreements, or legal conclusions,
has been reviewed by us and is correct in all material respects.
(q) All descriptions in the Prospectuses of contracts and other documents to
which the Company or any of its subsidiaries is a party have been reviewed by us
and are correct in all material respects.
(r) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any federal or Delaware, Maryland or
New York state court or governmental authority or agency (other than under the
Securities Act and the rules and regulations promulgated thereunder, which have
been obtained, or as may be required under state securities or blue sky laws, as
to which we express no opinion) is necessary or required by or on behalf of the
Company for the execution and delivery of the Purchase Agreements by the Company
or the performance by the Company as of the Closing Time of its obligations
under the Purchase Agreements, including the issuance and sale of the Option
Securities to the Underwriters and the use of the proceeds by the Company from
the sale of the Option Securities as described in the Prospectuses under the
caption "Use of Proceeds," or in connection with the sale of the Securities by
the Selling Shareholders to the Underwriters and the public offering of the
Securities and the Option Securities by the Underwriters.
(s) The execution and delivery by the Company of, and the performance by the
Company as of the Closing Time of its obligations under, the Purchase
Agreements, including the issuance and sale of the Option Securities to the
Underwriters and the use of the proceeds by the Company from the sale of the
Option Securities as described in the Prospectuses under the caption "Use of
Proceeds," and the sale of the Securities by the Selling Shareholders to the
Underwriters and the public offering of the Securities and the Option Securities
by the Underwriters do not and will not (i) violate the Certificate of
Incorporation or the By-Laws or the certificate of incorporation or bylaws of
any Delaware Subsidiary, (ii) violate the Delaware General Corporation Law, any
law or regulation of the State of Maryland or the State of New York or, to our
knowledge, any provision of applicable federal law, (iii) violate any judgment,
order, writ or decree applicable to the Company or any subsidiary known to us of
any federal, Delaware, Maryland or New York government, government
instrumentality or court or (iv) conflict with or, whether with or without the
giving of notice or passage of time or both, breach or constitute a default or
Repayment Event 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 instrument or agreement listed on Schedule E to the
Purchase Agreements, the Agreement and Plan of Merger (the "Merger Agreement")
dated as of June 30, 1997, as amended as of September 3, 1997 and as of November
5, 1997, among the Company, Rykoff-Sexton, Inc. and Hudson Acquisition Corp.,
any agreement or other document filed or incorporated by reference as an exhibit
to the Registration Statement or as an exhibit to the documents incorporated or
deemed to be incorporated by reference therein, the Support Agreement (other
than Section 7 thereof, as to which we have not been called upon to express, and
do not express, any opinion) or the Standstill Agreement, except for such
conflicts, breaches or defaults, Repayment Events or liens, charges or
encumbrances that would not have a Material Adverse Effect. We express no
opinion with respect to any breach or default not ascertainable from the face of
any indenture, loan agreement or other agreement, or arising under or based upon
any cross-default provision insofar as such breach or default relates to a
default under any indenture, loan agreement or other agreement not referred to
in this Paragraph (s), or arising under or based upon any covenant of a
financial or numerical nature or requiring computation.
(t) The Company is not an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(u) To our knowledge, pursuant to the Rights Agreement, each share of issued and
outstanding Common Stock (including the Securities to be sold by the Selling
Shareholders to the Underwriters pursuant to the Purchase Agreements) has one
Right attached to it, and each of the Option Securities to be issued and sold by
the Company to the Underwriters will 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.
(v) To our knowledge, neither the Company nor any of its subsidiaries has any
right of first refusal under the Standstill Agreement 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 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 (p) 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 March 25, 1999 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 any instrument or agreement which is governed by
the laws of a jurisdiction other than the DGCL, 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, with respect to matters relating to good
standing or qualification as a foreign corporation, on certificates public
officials and, as to matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of the Company and, in rendering the
opinions set forth in Paragraph (k), (s) and (v) above, such counsel may assume
that a majority of the "Continuing Directors" (as defined in the Standstill
Agreement) have approved the Supplemental Agreement or, alternatively, that the
Supplemental Agreement validly amends the Standstill Agreement.
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).
<PAGE>
Exhibit A-2
FORM OF OPINION OF CHAPMAN & CUTLER
(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; and 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 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. 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 our knowledge, otherwise.
(2) The execution, delivery and performance of the Purchase Agreements and the
consummation of the transactions contemplated in the Purchase Agreements do not
and will not result in any violation of (i) the provisions of the articles of
incorporation or by-laws of the Subject Subsidiary, (ii) any applicable Illinois
law, statute, rule or regulation, or (iii) to our knowledge, any judgment,
order, writ or decree, of any government, governmental instrumentality or court
having jurisdiction over the Subject Subsidiary or any of its assets, properties
or operations. Such opinion shall state that it covers matters governed by and
arising under 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).
<PAGE>
Exhibit A-3
FORM OF OPINION OF LIONEL SAWYER & COLLINS
(Nevada Local Counsel)
(1) E&H Distributing Co., a Nevada corporation (the "Subject Subsidiary"), is a
corporation that has been duly incorporated and is validly existing and in good
standing under the laws of the State of Nevada.
(2) The Subject Subsidiary has the corporate power and authority under the laws
of the State of Nevada to own, lease and operate the properties of the Subject
Subsidiary, and to conduct the business of the Subject Subsidiary, as described
in the Registration Statement.
(3) All of the issued and outstanding capital stock of the Subject Subsidiary
("Subject Subsidiary Stock") has been duly authorized and validly issued, and is
fully paid and non-assessable, and, to the best of our knowledge, is owned by
the Company, directly or through wholly-owned subsidiaries of the Company, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. No Subject Subsidiary Stock was issued in violation of any preemptive
rights of any stockholder of the Subject Subsidiary under the articles of
incorporation or the bylaws of the Subject Subsidiary or the corporate statutes
of the State of Nevada, or, to the best of our knowledge, any other preemptive
or similar rights of any stockholder of the Subject Subsidiary.
(4) The execution, delivery and performance of the Purchase Agreements and the
consummation of the transactions contemplated in the Purchase Agreements do not
and will not result in any violation of the provisions of the articles of
incorporation or bylaws of the Subject Subsidiary, or any law, statute, rule or
regulation of the State of Nevada applicable to the Subject Subsidiary, or, to
the best of our knowledge, any judgment, order, writ or decree of any
government, governmental instrumentality or court having jurisdiction over the
Subject Subsidiary.
Such opinion shall state that it covers matters governed by and arising under
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).
<PAGE>
Exhibit B
[OMITTED INTENTIONALLY]
<PAGE>
Exhibit C
FORM OF SUPPLEMENTAL AGREEMENT
<PAGE>
Exhibit D
FORM OF LETTER OF RESIGNATION
March ____, 1999
U.S. Foodservice
9755 Patuxent Woods Drive
Columbia, MD 21046
Attention: James L. Miller
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 25, 1999
among U.S. Foodservice, a Delaware corporation (the "Company"), certain
stockholders of the Company named therein and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and the other parties thereto (the "U.S. Purchase Agreement")
and the International Purchase Agreement dated March 25, 1999 among the Company,
certain stockholders of the Company named therein and Merrill Lynch
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,
[Matthias B. Bowman]
[Albert J. Fitzgibbons III]
<PAGE>
EXHIBIT H
U.S. FOODSERVICE
(a Delaware corporation)
1,561,779 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: March 25, 1999
<PAGE>
ii
Table of Contents
Page
SECTION 1. Representations and Warranties...................................................................4
SECTION 2. Sale and Delivery to International Managers; Closing............................................16
SECTION 3. Covenants of the Company........................................................................18
SECTION 4. Payment of Expenses.............................................................................21
SECTION 5. Conditions of International Managers Obligations................................................22
SECTION 6. Indemnification.................................................................................27
SECTION 7. Contribution....................................................................................31
SECTION 8. Representations, Warranties and Agreements to Survive Delivery..................................32
SECTION 9. Termination of Agreement........................................................................33
SECTION 10. Default by One or More of the International Managers...........................................33
SECTION 11. Default by one or more of the Selling Shareholders or the Company..............................34
SECTION 12. Agent for Service; Submission to Jurisdiction; Waiver of Immunities............................35
SECTION 13. Notices........................................................................................36
SECTION 14. Parties........................................................................................36
SECTION 15. Governing Law and Time.........................................................................36
SECTION 16. Effect of Headings.............................................................................37
SCHEDULES
Schedule A - List of International Managers...........................................Sch A-1
Schedule B - List of Selling Shareholders.............................................Sch B-1
Schedule C - Pricing Information......................................................Sch C-1
Schedule D - List of Subject Subsidiaries.............................................Sch D-1
Schedule E - List of Registration Rights Agreements...................................Sch E-1
Schedule F - List of Counsel to the Selling Shareholders..............................Sch F-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Hogan & Hartson L.L.P...................................A-1-1
Exhibit A-2 - Form of Opinion of Chapman & Cutler........................................A-2-1
Exhibit A-3 - Form of Opinion of Lionel Sawyer & Collins.................................A-3-1
Exhibit B -[Omitted Intentionally]........................................................B-1
Exhibit C - Form of Supplemental Agreement................................................C-1
Exhibit D - Form of Letter of Resignation.................................................D-1
<PAGE>
U.S. FOODSERVICE
(a Delaware corporation)
1,561,779 Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
March 25, 1999
Merrill Lynch International
Goldman Sachs International
Salomon Brothers International Limited
J.C. Bradford & Co.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
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 Merrill Lynch International ("Merrill Lynch")
and each of the other international underwriters named in Schedule A hereto
(collectively, the "International Managers", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Merrill Lynch, Goldman Sachs International and Salomon Brothers International
Limited are acting as lead managers (in such capacity, the "Lead Managers"),
with respect to (i) the sale by the Selling Shareholders, acting severally and
not jointly, and the purchase by the International Managers, acting severally
and not jointly, of the respective numbers of shares of Common Stock, par value
$.01 per share, of the Company (the "Common Stock") set forth in Schedules A and
B hereto and (ii) the grant by the Company to the International Managers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 234,267 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 1,561,779 shares of Common Stock (the
"Initial International Securities") to be purchased by the International
Managers and all or any part of the 234,267 shares of Common Stock subject to
the option described in Section 2(b) hereof (the "International Option
Securities") are hereinafter called, collectively, the "International
Securities".
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Selling Shareholders of
an aggregate of 6,247,119 shares of Common Stock (the "Initial U.S. Securities")
through arrangements with certain underwriters in the United States and Canada
(the "U.S. Underwriters") for whom Merrill Lynch & Co, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co., Salomon Smith Barney Inc.,
J.C. Bradford & Co. and First Union Capital Markets Corp. are acting as
representatives (the "U.S. Representatives", which term shall also include any
underwriter substituted as provided in Section 10 of the U.S. Purchase
Agreement) and the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to 937,067 additional shares of Common
Stock solely to cover over-allotments, if any (the "U.S. Option Securities").
The Initial U.S. Securities and the U.S. Option Securities are hereinafter
called the "U.S. Securities". It is understood that the Selling Shareholders are
not obligated to sell and the International Managers are not obligated to
purchase any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter called,
collectively, the "Underwriters" and, individually, an "Underwriter"; the
Initial International Securities and the Initial U.S. Securities are hereinafter
collectively called the "Initial Securities"; the International Option
Securities and the U.S. Option Securities are hereinafter collectively called
the "Option Securities"; the International Securities and the U.S. Securities
are hereinafter collectively called the "Securities"; and this Agreement and the
U.S. Purchase Agreement are hereinafter called, collectively, the "Purchase
Agreements" and, individually, a "Purchase Agreement".
The Underwriters will concurrently enter into an Intersyndicate Agreement of
even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-73447) and certain
amendments thereto covering the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), including the related
preliminary prospectus or prospectuses. Promptly after execution and delivery of
this Agreement, the Company will either (i) prepare and file an international
prospectus and a U.S. prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of U.S. Prospectus is identical to the Form of
International Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting". The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information". Each Form of U.S. Prospectus and Form of U.S. Prospectus
used before such registration statement became effective, and any prospectus
that omitted, as applicable, the Rule 430A Information or the Rule 434
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called, together with the documents
incorporated or deemed to be incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act, a "preliminary prospectus". Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement". Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement", and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final Form of International Prospectus and the final Form of U.S.
Prospectus, in each case including the documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the respective forms first furnished to the Underwriters for use in
connection with the offering of the Securities, are herein called the "U.S.
Prospectus" and the "U.S. Prospectus", respectively, and, collectively, the
"Prospectuses" and, individually, a "Prospectus". If Rule 434 is relied on, the
terms "International Prospectus" and "U.S. Prospectus" shall refer to the
international preliminary prospectus dated March 15, 1999 and U.S. preliminary
prospectus dated March 15, 1999, respectively, each together with the applicable
Term Sheet, and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
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 Rykoff-Sexton, 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, Merrill Lynch Capital
Partners, Inc. and the other persons whose names are set forth on the signature
pages thereof and acknowledged by Rykoff-Sexton, Inc., and "Supplemental
Agreement" means a Supplemental Agreement substantially in the form of Exhibit C
hereto among the Company, U.S. Foodservice, Inc., a Delaware corporation
("USF"), and the other parties thereto.
SECTION 17. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each International
Manager, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at each Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither of the
Prospectuses nor any amendments or supplements thereto, at the time the
Prospectuses or any amendments or supplements thereto were issued and
at the Closing Time (and, if any International Option Securities are
purchased, at each Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement
or the International Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any
International Manager through the Lead Managers expressly for use in
the Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and each prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and each of the Prospectuses delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, 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
International Option Securities are purchased, at each Date of
Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(iii)Independent Accountants. The accountants who certified the 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.
(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 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 U.S. Purchase
Agreement have been duly authorized, executed and delivered by the
Company.
(xi) Authorization and Description of Securities. The Securities which
the International Managers and the U.S. Underwriters have the
option to purchase from the Company have been duly authorized for
issuance and sale to the International Managers pursuant to this
Agreement and to the U.S. Underwriters pursuant to the U.S.
Purchase Agreement, respectively, and, if and when issued and
delivered by the Company pursuant to this Agreement and the U.S.
Purchase Agreement, respectively, against payment of the
consideration set forth herein and therein, respectively, will be
validly issued, fully paid and non-assessable; the Common Stock,
the Company's authorized but unissued preferred stock, par value
$.01 per share (the "Preferred Stock"), the Company's authorized
but unissued Preferred Stock designated as Series A Junior
Participating Preferred Stock, the Rights Agreement dated as of
February 19, 1996, as amended (the "Rights Agreement"), between
the Company and The Bank of New York, as rights agent (the
"Rights Agent"), and the preferred share purchase rights (the
"Rights") issued under the Rights Agreement conform to all of the
respective statements relating thereto contained in the
Prospectuses and such statements conform to the rights set forth
in the instruments defining such rights; no holder of Securities
will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any security holder of the
Company.
(xii)Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws,
partnership agreement, limited 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 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. Amendment No. 5
dated as of March 25, 1998 to the Rights Agreement has been duly
authorized, executed and delivered by the Company and has been
executed and delivered by the Rights Agent.
(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 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").
(xxiii) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have
all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with the
requirements of such Environmental Laws, permits, authorizations
and approvals, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries
and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiv) NYSE. The outstanding shares of Common Stock (including the
Securities to be sold by the Selling Shareholders to the
Underwriters under the Purchase Agreements) are listed on the New
York Stock Exchange and the Securities which the Underwriters
have the option to purchase from the Company pursuant to the
Purchase Agreements have been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange.
(xxv)Stock Certificates. The certificates evidencing the Securities
sold by the Selling Shareholders to the Underwriters pursuant to
the Purchase Agreements will not, upon delivery to the
Underwriters, bear any restrictive legends or be subject to any
stop transfer instructions or similar restrictions on transfer.
(xxvi) Registration Rights. Except for the instruments and agreements
listed on Schedule E hereto (collectively, the "Registration
Rights Agreements"), there are no contracts, agreements or
understandings between the Company or any of its subsidiaries, on
the one hand, and any person, on the other hand, granting such
person the right to require the Company or any of its
subsidiaries to file a registration statement under the 1933 Act
with respect to any securities (other than contractual
obligations by the Company to file registration statements on
Form S-8 covering issuances of its Common Stock pursuant to its
employee or director stock, bonus or compensation plans) or to
require the Company or any of its subsidiaries to include such
securities in any registration statement filed by the Company
under the 1933 Act or in any public offering of securities. True,
complete and correct copies of the Registration Rights Agreements
have been delivered to the Lead Managers, and, except in the case
of the RSI Agreement (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 Selling
Shareholders 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.
(xxix) Webb Lock-Up. The Company has, on the date of this Agreement,
delivered to each of J. Christopher Reyes, M. Jude Reyes and
David K. Reyes (the "Webb Holders"), with a copy to Katten,
Muchen & Zavis, attention: Stephen B. Napolitano, written notice
pursuant to Section 5(e) of the Webb Registration Agreement (as
defined in Schedule E hereto) stating that the Company is
invoking the restrictions set forth in Section 5(e) of the Webb
Registration Agreement and that the Webb Holders may not offer or
sell any Common Stock, or any securities convertible into or
exchangeable for Common Stock (whether or not such Common Stock
constitutes Registrable Securities (as defined in the Webb
Registration Agreement), and however acquired) during the period
of 90 days from the date of this Agreement; and such notice has
been delivered in accordance with the applicable notice
provisions of the Webb Registration Agreement. The Company has
delivered written stop transfer instructions to the registrar and
transfer agent (the "Transfer Agent") for the Common Stock with
respect to 358,423 shares of Common Stock owned by J. Christopher
Reyes, 358,423 shares of Common Stock owned by M. Jude Reyes and
179,211 shares of Common Stock owned by David K. Reyes,
constituting all of the shares of Common Stock issued to the Webb
Holders pursuant to the Stock Purchase Agreement, and, in the
event that any additional shares of Common Stock are issued to
any of the Webb Holders pursuant to the Stock Purchase Agreement
during the aforesaid 90-day period, the Company has delivered or
will deliver stop transfer instructions with respect to such
shares to the Transfer Agent prior to the issuance thereof. The
Company agrees that, during the 90-day period referred to in the
first sentence of this paragraph, it will not amend or modify
Section 5(e) of the Webb Registration Agreement or grant any
waiver thereunder, or rescind any such stop transfer instructions
or grant any waiver thereunder, in each case without the prior
written consent of the Global Coordinator, and that the Company
will, during such 90-day period, take such action as the Global
Coordinator may reasonably request to enforce the restrictions
set forth in Section 5(e) of the Webb Registration Agreement and
such stop transfer instructions.
(b) Representations and Warranties by the Selling Shareholders. Each Selling
Shareholder, severally and not jointly, represents and warrants to each
International Manager as of the date hereof and as of the Closing Time, and
agrees with each International Manager, as follows, except that only ML Offshore
LBO Partnership No. B-XVIII and ML Offshore LBO Partnership No. XIII make the
representations and warranties set forth in subparagraph (ix) of this Section
1(b):
(i) Accurate Disclosure. At the respective times the Registration
Statement, and the Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective and the
Closing Time (and, if any Option Securities are purchased, at
each Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements
thereto did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing
Time (and, if any International Option Securities are purchased,
at each Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided that the representations and warranties in
this subparagraph (i) shall only apply to statements in or
omissions from the Registration Statement, any Rule 462(b)
Registration Statement, the Prospectuses and any amendments or
supplements thereto made in reliance upon and in conformity with
information furnished or confirmed in writing to the Company by
or on behalf of such Selling Shareholder expressly for use in the
Registration Statement or any Prospectus or any amendment or
supplement thereto; and such Selling Shareholder is not prompted
to sell the Securities to be sold by such Selling Shareholder
under the Purchase Agreements by any information concerning the
Company or any subsidiary of the Company which is not set forth
in the Prospectuses.
(ii) Authorization of Agreements. Such Selling Shareholder 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 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 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 Agreements
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
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 the charter or by-laws,
limited partnership 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 have, good and marketable title to the
Securities to be sold by such Selling Shareholder under the
Purchase Agreements, 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.
(iv) Purchase Agreements. Each of the International Purchase Agreement
and the U.S. Purchase Agreement has been duly authorized,
executed and delivered by such Selling Shareholder.
(v) 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.
(vi) 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 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.
(vii)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.
(viii) Certificates Suitable for Transfer. Certificates for all of the
Securities to be sold by such Selling Shareholder pursuant to the
Purchase 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.
(ix) Submission to Jurisdiction. Each of ML Offshore LBO Partnership
No. B-XVIII and ML Offshore LBO Partnership No. XIII has the
power to submit, and pursuant to this Agreement has legally,
validly, effectively and irrevocably submitted, to the
jurisdiction of any federal or state court in the Borough of
Manhattan, The City of New York, and has the power to designate,
appoint and empower and pursuant to this Agreement has legally,
validly, effectively and irrevocably designated, appointed and
empowered an agent for service of process in any suit or
proceeding based on or arising under this Agreement in any
federal or state court in the Borough of Manhattan, The City of
New York, as provided in Section 12 hereof.
(c) Certificates. Any certificate signed by any officer of the Company or any of
its subsidiaries and delivered to the Global Coordinator, the Lead Managers or
counsel for the International Managers shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
and any certificate signed by or on behalf of any Selling Shareholder and
delivered to the Global Coordinator, the Lead Managers or counsel for the
International Managers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to each Underwriter as
to the matters covered thereby.
SECTION 18. Sale and Delivery to International Managers; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, each
of the Selling Shareholders, severally and not jointly, agrees to sell to each
International Manager, severally and not jointly, and each International
Manager, severally and not jointly, agrees to purchase from each Selling
Shareholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial International Securities set forth in Schedule B opposite
the name of such Selling Shareholder which the number of Initial International
Securities set forth in Schedule A opposite the name of such International
Manager, plus any additional number of Initial International Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial International
Securities, subject, in each case, to such adjustments among the International
Managers as the Lead Managers in their sole discretion shall make to eliminate
any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional 234,267 shares of
Common Stock, as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
International Securities upon notice by the Global Coordinator to the Company
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of such option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof,
bears to the total number of Initial International Securities, subject in each
case to such adjustments as the Global Coordinator in its discretion shall make
to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Brown & Wood LLP,
One World Trade Center, New York, New York 10048, or at such other place as
shall be agreed upon by the Global Coordinator and the Company, at 9:00 A.M.
(New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Global Coordinator and the Company (such time and date of payment and
delivery being herein called the "Closing Time").
In addition, in the event that any or all of the International Option Securities
are purchased by the International Managers, payment of the purchase price for,
and delivery of certificates for, such International Option Securities shall be
made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Global Coordinator and the Company, on each Date of Delivery as
specified in the notice from the Global Coordinator to the Company.
Payment shall be made to the Selling Shareholders by wire transfer or intra-bank
transfer of immediately available funds to the accounts designated by the
Selling Shareholders or Merrill Lynch Capital Partners, Inc. and payment to the
Company shall be made by wire transfer of immediately available funds to a bank
account designated by the Company, in each case against delivery to the Lead
Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial International
Securities and the International Option Securities, if any, shall be in such
denominations and registered in such names as the Lead Managers may request in
writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 19. Covenants of the Company.
The Company covenants with each International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective
amendment to the Registration Statement shall become effective or any
supplement to any Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to any Prospectus or for
additional information and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus or
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the forms of
prospectus transmitted for filing under Rule 424(b) were received for
filing by the Commission and, in the event that they were not, it will
promptly file such prospectuses. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator notice
of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either of the prospectuses included in
the Registration Statement at the time it became effective or to either of
the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Lead Managers and counsel for the International Managers,
without charge, four signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the International Managers. The copies of the Registration Statement and
each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each International
Manager, without charge, as many copies of each preliminary prospectus as
such International Manager reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, including in connection with
market-making transactions in the Common Stock, such number of copies of
the International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in the Purchase Agreements and in the
Prospectuses. If at any time when a prospectus is required by the 1933 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the International Managers or for the Company, to
amend the Registration Statement or amend or supplement any Prospectus in
order that such Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement any Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or such
Prospectus comply with such requirements, and the Company will furnish to
the International Managers such number of copies of such amendment or
supplement as the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions as the Global Coordinator may designate and to maintain
such qualifications in effect for a period of not less than one year from
the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934
Act as are necessary in order to make generally available to its security
holders as soon as practicable an earnings statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds, if any, received by
it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing of the
Option Securities on the New York Stock Exchange, subject to official
notice of issuance.
(j) Restriction on Sale of Securities. During a period of 90 days from the date
of this Agreement, the Company will not, without the prior written consent
of the Global Coordinator, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale
of or otherwise dispose of or transfer any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or repayable
with Common Stock (including, without limitation, any Common Stock or other
such securities issued by the Company or which are now owned or hereafter
acquired by the Company or with respect to which the Company has or
hereafter acquires the power of disposition), or file or cause the filing
of a registration statement under the 1933 Act with respect to any of the
foregoing, or (ii) enter into any swap or any other agreement or
transaction that transfers, in whole or in part, the economic consequence
of ownership of the Common Stock or any securities convertible into or
exchangeable or exercisable for or repayable with Common Stock, whether any
such swap or other agreement or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise. Notwithstanding the provisions of the foregoing
sentence, the Company may do any of the following: (1) issue Common Stock
under its employee or director stock, bonus or compensation plans, or grant
options to purchase Common Stock or other awards under such plans, in each
case as such plans are in effect on the date of this Agreement, and file
one or more registration statements on Form S-8 covering the offering and
sale of securities issuable under such plans; (2) issue Common Stock or
securities convertible into or exchangeable or exercisable for or repayable
with Common Stock to owners of businesses which the Company may acquire in
the future, whether by merger, acquisition of assets or capital stock or
otherwise, as consideration for the acquisition of such businesses or to
management employees of such businesses in connection with any such
acquisition, enter into and implement collar and other price protection
arrangements in connection with any such acquisition, and file one or more
registration statements on Form S-4 covering the offering and sale of
Common Stock or such other securities by the Company to such owners in
connection with such acquisitions; (3) in connection with the future
acquisition of any business, whether by merger, acquisition of assets or
capital stock or otherwise, that has outstanding warrants, options or other
securities convertible into or exchangeable or exercisable for or repayable
with common stock or other equity securities, or that maintains employee or
director bonus or compensation plans providing for the issuance of common
stock or options to purchase common stock or other awards, (A) issue
substantially similar new warrants, options or other securities to replace
the outstanding options, warrants or other securities of such acquired
business or assume the obligations of such acquired business under such
outstanding warrants, options or other securities or such plans, and issue
Common Stock pursuant to any such warrants, options or other securities, as
in effect on the date of such issuance or assumption, or grant options to
purchase Common Stock or other awards and issue Common Stock under any such
plans, as in effect on the date of acquisition, and (B) file one or more
registration statements on Form S-8 covering the offering and sale of
securities issuable under such plans; (4) issue Common Stock pursuant to
acquisition agreements existing on the date of this Agreement which were
entered into by the Company to effect the acquisitions of Lone Star
Institutional Grocers, Inc., J.H. Haar & Sons, L.L.C. and Joseph Webb
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 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 Selling Shareholders 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 20. 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 Selling
Shareholders pursuant to Section 4(b) 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 Selling Shareholders, (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.
(b) Expenses of the Selling Shareholders. The Selling Shareholders, 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 Selling Shareholders, and (iii) underwriting discounts and
commissions with respect to the Securities sold by them to the Underwriters.
(c) Allocation of Expenses. The provisions of this Section 4 shall not enlarge
or otherwise alter the respective rights or obligations of the Selling
Shareholders 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.
(d) Termination of Agreement. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company shall reimburse the International Managers for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.
SECTION 21. Conditions of International Managers Obligations. The obligations of
the several International Managers under this Agreement are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company or of or on behalf of any Selling
Shareholder delivered pursuant to the provisions hereof, to the performance by
the Company and the Selling Shareholders of their respective covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and
at the Closing Time and at each Date of Delivery no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the International Managers. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinions of Counsel for Company. At the Closing Time, the Lead Managers
shall have received the favorable opinions, each dated as of the Closing
Time and addressed to the Lead Managers and the U.S. Representatives, of
(i) Hogan & Hartson L.L.P., counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit A-1 hereto and to such
further effect as counsel to the International Managers may reasonably
request, and (ii) Chapman & Cutler, special Illinois counsel to the
Company, and Lionel Sawyer & Collins, special Nevada counsel to the
Company, each in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of such
letters for each of the other Underwriters, to the effect set forth in
Exhibit A-2 and A-3 hereto, respectively, and to such further effect as
counsel to the International Managers may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At the Closing Time, the
Lead Managers shall have received the favorable opinions, each dated as of
the Closing Time and addressed to the Lead Managers and the U.S.
Representatives, of each of the attorneys listed on Schedule F attached
hereto for the Selling Shareholders listed opposite such attorney's name,
each in form and substance satisfactory to counsel for the International
Managers, together with signed or reproduced copies of such letters for
each of the other Underwriters, each such opinion to be in the form and to
the effect heretofore approved by the Lead Managers and to such further
effect as counsel to the International Managers may reasonably request.
(d) Opinion of Counsel for International Managers. At the Closing Time, the
Lead Managers shall have received the favorable opinion, dated as of the
Closing Time, of Brown & Wood LLP, counsel for the International Managers,
with respect to the organization of the Company, the validity of the
Securities (if any) to be sold by the Company, this Agreement, the
Registration Statement, the Prospectuses and such other related matters as
the Lead Managers may require, together with signed or reproduced copies of
such letter for each of the other Underwriters, and the Company and the
Selling Shareholders shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters.
(e) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead
Managers shall have received a certificate of the President or a Vice
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. At Closing Time, the Lead Managers
shall have received a certificate signed by all of the Selling Shareholders
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) the
Selling Shareholders 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).
(g) Comfort Letter from KPMG LLP. At the time of the execution of this
Agreement, the Lead Managers shall have received from KPMG LLP a letter
dated such date, in form and substance satisfactory to the Lead Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses and which
shall cover, among other things, the financial statements of Valley
Industries, Inc. and subsidiaries and Z Leasing Company, a general
partnership.
(h) Opinion of Delaware Counsel. At the Closing Time, the U.S. Representatives
shall have received the favorable opinion, dated as of the Closing Time and
addressed to the U.S. Representatives and the Lead Managers, of Richards,
Layton & Finger, special Delaware counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed and reproduced copies of such letter for each of the other
Underwriters, to the effect that a majority of the "Continuing Directors"
(as defined in the Standstill Agreement) have approved the Supplemental
Agreement or, alternatively, that the Supplemental Agreement validly amends
the Standstill Agreement, and to such further effect as counsel to the U.S.
Underwriters may reasonably request.
(i) Comfort Letter from Arthur Andersen LLP. At the time of the execution of
this Agreement, the Lead Managers shall have received from Arthur Andersen
LLP a letter dated such date, in form and substance satisfactory to the
Lead Managers, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses.
(j) Bring-down Comfort Letters. At the Closing Time, the Representatives shall
have received from each of KPMG LLP and Arthur Andersen LLP a letter, in
form and substance satisfactory to the Lead Managers and dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letters furnished pursuant to subsections (g) and (i), respectively, of
this Section, except that the "specified date" referred to shall be a date
not more than three business days prior to Closing Time.
(k) Executed Supplemental Agreement. Prior to the execution of this Agreement,
the Lead Managers shall have received a copy of the Supplemental Agreement,
in form and substance satisfactory to the Lead Managers, duly executed by
the parties thereto, and the Supplemental 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
Matthias B. Bowman and Albert J. Fitzgibbons III.
(l) Approval of Listing. At the Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(m) No Objection. Prior to the date of this Agreement, the NASD shall have
confirmed that it has not raised any objection with respect to the fairness
and reasonableness of the underwriting terms and arrangements.
(n) Purchase of Initial U.S. Securities. Contemporaneously with the purchase by
the International Managers of the Initial International Securities under
this Agreement, the U.S. Underwriters shall have purchased the Initial U.S.
Securities to be purchased by them under the U.S. Purchase Agreement.
(o) Delivery of Securities; Webb Lock-Up. On or prior to the date of this
Agreement, the Securities to be sold by the Webb Sellers to the
Underwriters pursuant to the Purchase Agreements shall have been deposited
with the Custodian, together with stock powers duly endorsed in blank by
each of the Webb Sellers. Not later than the second business day before the
Closing Time, the Securities to be sold by the Selling Shareholders 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 with signatures
guaranteed, by each of the Selling Shareholders, together with instructions
to transfer such Securities to the Underwriters at Closing Time. On or
prior to the date of this Agreement, the U.S. Representatives shall have
received a signed copy of the notice and a signed copy of the stop transfer
instructions referred to in Section 1(a)(xxix), together with evidence that
such notice has been duly delivered as contemplated by Section 1(a)(xxix)
and that such stop transfer instructions have been duly delivered to the
Transfer Agent.
(p) Tax Forms. At the Closing Time, the Lead Managers shall have received a
properly completed and executed United States Treasury Department Form W-9
or W-8 (or other applicable form) from each of the Selling Shareholders.
(q) Conditions to Purchase of International Option Securities. In the event
that the International Managers exercise their option provided in Section
2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company and the
Selling Shareholders contained herein and the statements in any
certificates furnished by the Company or any subsidiary of the Company or
by or on behalf of any Selling Shareholder hereunder shall be true and
correct on and as of the Date of Delivery for such International Option
Securities and, at such Date of Delivery, the Lead Managers shall have
received:
(i) Opinions of Counsel for Company. The favorable opinions of (i) Hogan &
Hartson L.L.P., counsel for the Company, in form and substance satisfactory
to counsel for the International Managers, dated such Date of Delivery and
addressed to the Lead Managers and the U.S. Representatives, relating to
the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof, together with signed or reproduced copies of such letter for each
of the Underwriters, and (ii) Chapman & Cutler, special Illinois counsel to
the Company, and Lionel Sawyer & Collins, special Nevada counsel to the
Company, each in form and substance satisfactory to counsel for the
International Managers, dated such Date of Delivery and addressed to the
Lead Managers and the U.S. Representatives, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the respective opinions required by Section 5(b) hereof,
together with signed or reproduced copies of such letters for each of the
Underwriters.
(ii) Opinion of Counsel for International Managers. The favorable opinion of
Brown & Wood LLP, counsel for the International Managers, dated such Date
of Delivery, relating to the Option Securities to be purchased from the
Company on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(iii)Officers' Certificate. A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company to the same effect as the
certificate delivered at the Closing Time pursuant to Section 5(e) hereof.
(iv) Bring-down Comfort Letter. A letter from each of KPMG LLP and Arthur
Andersen LLP, each in form and substance satisfactory to the Lead Managers
and dated such Date of Delivery, to the effect that they reaffirm the
statements made in the letters furnished to the Lead Managers pursuant to
Sections 5(g), (h) and (i) hereof, respectively, hereof, 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.
(v) Opinion of Delaware Counsel. The favorable opinion of Richards, Layton &
Finger, special Delaware 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,
to the same effect as the opinion required by Section 5(h), together with
signed or reproduced copies of such letter for each of the Underwriters.
(r) Additional Documents. At the Closing Time and at each Date of Delivery,
counsel for the International Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Shareholders in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the Lead
Managers and counsel for the International Managers.
(s) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant International Option Securities, may be terminated by
the Lead Managers by notice to the Company at any time at or prior to the
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 hereof and except that Sections 1, 6, 7 and
8 hereof shall survive any such termination and remain in full force and
effect.
SECTION 22. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and hold
harmless each International Manager, each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, each Selling Shareholder and each person, if any,
who controls any Selling Shareholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
any Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that (subject
to 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 Merrill Lynch for the
International Managers and all persons, if any, who control any
International Managers as aforesaid, and the fees and disbursements of
counsel chosen by the Majority Selling Shareholders (as defined below)
for the Selling Shareholders and all persons, if any, who control any
Selling Shareholders as aforesaid), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or in any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto); provided, further, that the Company shall not be liable under this
indemnity agreement to any Selling Shareholder or person controlling such
Selling Shareholder to the extent that any such loss, liability, claim, damage
or expense arises out of any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or in any preliminary prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Shareholder expressly for use therein; and, provided,
further, that this indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any International Manager from whom
the person asserting any such losses, liabilities, claims, damages or expenses
purchased Securities, or any person controlling such International Manager, if a
copy of the International Prospectus (as then amended or supplemented if the
Company shall have furnished any such amendments or supplements thereto, but
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of such International Manager to
such person, if such sending or giving of the International Prospectus is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the International Prospectus (as so amended or
supplemented, if applicable) would have corrected the defect giving rise to such
loss, liability, claim, damage or expense, except that this proviso shall not be
applicable if such defect shall have been corrected in a document which is
incorporated or deemed to be incorporated by reference in the International
Prospectus. As used in this Agreement, the term "Majority Selling Shareholders"
means the Selling Shareholders who, at the date of this Agreement, held a
majority of the Initial International Securities to be sold to the International
Managers by the Selling Shareholders pursuant to this Agreement.
(b) Indemnification by Selling Shareholders. Each Selling Shareholder agrees,
severally and not jointly, to indemnify and hold harmless each International
Manager, each person, if any, who controls any International Manager within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, the
Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with information furnished or confirmed in
writing to the Company by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or Prospectus (or any amendment or supplement thereto); provided,
that the aggregate liability of any Selling Shareholder pursuant to this
paragraph (b) shall be limited to an amount equal to the net proceeds (before
deducting expenses) received by such Selling Shareholder from the sale of
Securities.
(c) Indemnification by International Managers. Each International Manager
agrees, severally and not jointly, to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, each Selling Shareholder and each
person, if any, who controls any Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any international
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such International Manager through the Lead Managers
expressly for use in the Registration Statement (or any amendment thereto) or
such international preliminary prospectus or the International Prospectus (or
any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the respective indemnified parties shall be selected as
follows: counsel to the International Managers and all persons, if any, who
control any International Managers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall be selected by Merrill Lynch; counsel to
the Company, its directors, each of its officers who signed the Registration
Statement and all persons, if any, who control the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall be selected by
the Company; and counsel to the Selling Shareholders and all persons, if any,
who control any Selling Shareholders within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall be selected by the Majority Selling
Shareholders. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for (i) the fees and expenses of more than one counsel (in addition to
any local counsel) separate from the indemnifying parties' own counsel for all
International Managers and all persons, if any, who control any International
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, (ii) the fees and expenses of more than one counsel (in addition to
any local counsel) separate from the indemnifying parties' own counsel for the
Company, its directors, its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, and (iii) the fees and expenses
of more than one separate counsel (in addition to any local counsel) separate
from the indemnifying parties' own counsel for all Selling Shareholders and all
persons, if any, who control any Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, in each case in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of this
Section 6 or Section 7 hereof shall not affect any agreements among the Company
and the Selling Shareholders with respect to indemnification of each other or
contribution.
(g) Currencies. Any payment made by the Company, any Selling Shareholder or any
International Manager pursuant to this Section 6 or Section 7 hereof with
respect to any loss, liability, claim, damage or expense incurred in a currency
other than U.S. dollars shall be made by the Company, such Selling Shareholder
or such International Manager, as the case may be, in such amount of U.S.
dollars as shall be necessary to enable the indemnified party to purchase the
amount of such other currency needed to satisfy such loss, liability, claim,
damage or expense, including any premiums and costs of exchange payable in
connection with the conversion of U.S.
dollars into the relevant currency.
(h) Insofar as the indemnity agreements in Section 6(a) hereof may permit
indemnification for liabilities under the 1933 Act of any person who is a
partner of an International Manager or a Selling Shareholder or who controls an
International Manager or a Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and who, at the date of this
Agreement, is a director or officer of the Company or controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
such indemnity agreement is subject to the undertaking of the Company in the
Registration Statement under Item 17 thereof with respect to indemnification.
SECTION 23. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the International Managers on the other
hand from the offering of the International Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholders on the one hand and of the
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Shareholders on
the one hand and the International Managers on the other hand in connection with
the offering of the International Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the International Securities pursuant to this Agreement (before
deducting expenses) received by the Company and the Selling Shareholders and the
total underwriting discount received by the International Managers, in each case
as set forth on the cover of the International Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the International Securities as set forth on
such cover.
The relative fault of the Company and the Selling Shareholders on the one hand
and the International Managers on the other hand shall be determined by
reference to, among other things, whether the applicable untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Shareholders or by the International Managers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholders and the International Managers agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the International Managers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission and (ii) no Selling Shareholder shall be required to contribute any
amount in excess of the amount of net proceeds (before deducting expenses)
received by such Selling Shareholder from the sale of Securities.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls an International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such International Manager, each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company, and each person, if any, who controls any Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Selling
Shareholder. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule A
hereto and not joint.
The provisions of this Section 7 shall not affect any agreements among the
Company and the Selling Shareholders with respect to contribution between
themselves.
SECTION 24. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or in
certificates signed by or on behalf of the Selling Shareholders submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person of any International Manager, or by or on behalf of the
Company or any Selling Shareholder or any controlling person of the Company or
any Selling Shareholder, and shall survive delivery of the International
Securities to the International Managers.
SECTION 25. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this Agreement, by
notice to the Company and the Selling Shareholders, at any time at or prior to
the Closing Time, and the obligations of the International Managers to purchase
International Option Securities on any Date of Delivery which is after the
Closing Time may be terminated by the Lead Managers, by notice to the Company,
at or prior to such Date of Delivery, (i) if there has been, since the time of
execution of this Agreement and prior to the Closing Time or such Date of
Delivery, as the case may be, or since the respective dates as of which
information is given in any Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the International
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of such exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either federal, Maryland or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section 9, or
if the obligation of the International Managers to purchase International Option
Securities on any Date of Delivery which is after the Closing Time is terminated
pursuant to this Section 9, such termination shall be without liability of any
party to any other party except (in the case of any termination of this
Agreement) as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 hereof shall survive any such termination of this Agreement and
remain in full force and effect.
SECTION 2Default by One or More of the International Managers. If one or more of
the International Managers shall fail at the Closing Time or a Date of Delivery
to purchase the International Securities which it or they are obligated to
purchase under this Agreement on such date (the "Defaulted Securities"), the
Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Lead Managers shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date,
each of the non-defaulting International Managers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase and of the Company to sell the International Option Securities
to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting International
Manager.
No action taken pursuant to this Section 10 shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the International
Managers to purchase and the Company to sell the relevant International Option
Securities, as the case may be, either the Lead Managers or the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any other
documents or arrangements. As used herein, the term "International Manager"
includes any person substituted for an International Manager under this Section
10.
SECTION 27. Default by one or more of the Selling Shareholders or the Company.
(a) If one or more of the Selling Shareholders shall fail at the
Closing Time to sell and deliver the number of Securities which it or they, as
the case may be, are obligated to sell under this Agreement on such date, and
the remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder on such date to the total number of shares to be sold by all Selling
Shareholders (including such defaulting Selling Shareholder or Selling
Shareholders, as the case may be) on such date, then the International Managers
may, at the option of the Lead Managers, by notice from the Lead Managers to the
Company and the non-defaulting Selling Shareholders, either (a) terminate this
Agreement without any liability on the part of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 hereof shall survive such
termination and remain in full force and effect, or (b) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder on such date. No action taken pursuant to this Section 11 shall
relieve any Selling Shareholder so defaulting from liability, if any, in respect
of such default.
(b) If the Company shall fail at a Date of Delivery to sell and deliver
the number of Securities that it is obligated to sell under this Agreement on
such date, then the International Managers may, at the option of the Lead
Managers, by notice from the Lead Managers to the Company and the Selling
Shareholders, terminate this Agreement or, in the case of any Date of Delivery
which occurs after the Closing Time, terminate the obligations of the
International Managers to purchase the International Option Securities to be
purchased on such Date of Delivery, in each case without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 hereof shall survive any such termination of this Agreement and
remain in full force and effect. No action taken pursuant to this Section 11
shall relieve the Company from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder or the Company referred to
in this Section 11 which does not result in the termination of this Agreement
or, in the case of a Date of Delivery which is after the Closing Time, which
does not result in a termination of the obligations of the International
Managers to purchase the relevant International Option Securities, as the case
may be, either the Lead Managers or the Company shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectuses or in any other documents or
arrangements.
SECTION 28. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.
Each of ML Offshore LBO Partnership No. B-XVIII and ML Offshore LBO Partnership
No. XIII (each for purposes of this Section 12, a "Subject Entity") irrevocably
(i) agrees, severally and not jointly, that any legal suit, action or proceeding
against such Subject Entity brought by any International Manager or by any
person who controls any International Manager arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in any
federal or state court in the Borough of Manhattan, The City of New York, (ii)
waives, to the fullest extent it may effectively do so under applicable law, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding or to the convenience of the forum and (iii) submits to the
non-exclusive jurisdiction of any federal or state court in the State of New
York in any such suit, action or proceeding. Each Subject Entity has appointed
Merrill Lynch Capital Partners, Inc. as its authorized agent (the "Authorized
Agent"), which term, as used herein, includes any successor in such capacity,
upon whom process may be served in any such action arising out of or based on
this Agreement or any of the transactions contemplated hereby which may be
instituted in any federal or state court in the Borough of Manhattan, The City
of New York by any International Manager or by any person who controls any
International Manager, expressly consents to the jurisdiction of any such court
in respect of any such action and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. Each Subject Entity represents and warrants that the Authorized
Agent has agreed to act as such agent for service of process. Service of process
upon the Authorized Agent and written notice of such service to such Subject
Entity (delivered as provided in Section 13 hereof) shall be deemed, in every
respect, effective service of process upon such Subject Entity.
In respect of any judgment or order given or made against a Subject Entity (the
"Indemnifying Subject Entity") in favor of any International Manager or any
person, if any, who controls any International Manager for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, such Indemnifying Subject Entity shall
indemnify such International Manager against any loss incurred by such
International Manager or controlling person as a result of any variation between
(i) the rate of exchange at which the United States dollar amount is converted
into the judgment currency for the purpose of such judgment or order and (ii)
the rate of exchange at which such International Manager or controlling person
is able to purchase United States dollars with the amount of judgment currency
actually received by such International Manager or controlling person. The
foregoing indemnity shall constitute separate and independent obligations of
each Subject Entity and shall continue in full force and effect notwithstanding
any such judgment or order as aforesaid. The term "rate of exchange" shall
include any premiums and costs of exchange payable in connection with the
purchase of or conversion into United States dollars.
To the extent that any Subject Entity or any of such Subject Entity's
properties, assets or revenues may have or may hereafter become entitled to, or
have attributed to it, any right of immunity, on the grounds of sovereignty,
from (i) any legal action, suit or proceeding, (ii) setoff or counterclaim,
(iii) the jurisdiction of any court, (iv) service of process, (v) attachment
upon or prior to judgment, (vi) attachment in aid of execution of judgment,
(vii) execution of judgment, or (viii) other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, in any jurisdiction
in which proceedings may at any time be commenced, with 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 29. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the International Managers
shall be directed to the Lead Managers at Merrill Lynch International, Ropemaker
Place, 25 Ropemaker Street, London EC2Y 9LY, England, attention of Syndicate
Operations; notices to the Company shall be directed to it at 9755 Patuxent
Woods Drive, Columbia, Maryland 21046, attention of David M. Abramson; and
notices to the Selling Shareholders or to the Authorized Agent shall be directed
to them at Merrill Lynch Capital Partners, Inc., 225 Liberty Street, New York,
New York 10080-6123, Attention of William Orlando, with a copy to Merrill Lynch
& Co., Inc., World Financial Center, North Tower, 250 Vesey Street, New York,
New York 10281-1323, Attention of Frank J. Marinaro, Esq.
SECTION 30. Parties. This Agreement shall each inure to the benefit of and be
binding upon the International Managers, 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 International Managers, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the International Managers, the Company and the
Selling Shareholders and their respective successors, and such controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any International Manager shall be deemed to be a successor by
reason merely of such purchase.
SECTION 31. 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 32. 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]
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the International Managers,
the Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
U.S. FOODSERVICE
By:
Name:
Title:
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP
NO. B-XVIII, L.P.
By: Merrill Lynch LBO Partners No. B-IV, L.P.,
as General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By:
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
By: Merrill Lynch LBO Partners No. B-IV, L.P.,
as Investment General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
ML IBK POSITIONS, INC.
By:
Name:
Title:
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By:
Name:
Title:
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP
NO. XIII, L.P.
By: Merrill Lynch LBO Partners No. IV, L.P., as
General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: Merrill Lynch LBO Partners No. IV, L.P., as
Investment General Partner
By: Merrill Lynch 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:
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By:
Name:
Title:
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as General Partner
By:
Name:
Title:
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By:
Name:
Title:
<PAGE>
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH INTERNATIONAL
GOLDMAN, SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
By: MERRILL LYNCH INTERNATIONAL
By:
Attorney-in-fact
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
<PAGE>
SCHEDULE A
Name of International Manager Number of
Initial International
Securities
Merrill Lynch International ........................................................... 488,055
Goldman Sachs International ............................................................ 488,055
Salomon Brothers International Limited ................................................. 488,055
J.C. Bradford & Co. ................................................................... 97,614
-----------------------
Total.................................................................... 1,561,779
=========
<PAGE>
SCHEDULE B
Number of Initial International Maximum Number of International Option
Securities to be Sold Securities to Be Sold
U.S. Foodservice....................... 0 234,267
- -----------------------------------------
Merrill Lynch Capital Appreciation 675,413 0
Partnership No. B-XVIII, L.P.........
- -----------------------------------------
Merrill Lynch KECALP L.P. 1994......... 10,521 0
- -----------------------------------------
ML Offshore LBO Partnership No. B-XVIII 339,819 0
- -----------------------------------------
ML IBK Positions, Inc.................. 223,228 0
- -----------------------------------------
MLCP Associates L.P. No. II ........... 8,100 0
- -----------------------------------------
Merrill Lynch KECALP L.P. 1991......... 29,418 0
- -----------------------------------------
Merrill Lynch Capital Appreciation 251,116 0
Partnership No. XIII, L.P............
- -----------------------------------------
ML Offshore LBO Partnership No. XIII... 6,384 0
- -----------------------------------------
ML Employees LBO Partnership No. I, L.P. 6,242 0
- -----------------------------------------
Merrill Lynch KECALP L.P. 1987......... 4,717 0
- -----------------------------------------
Merchant Banking L.P. No. II........... 4,717 0
- -----------------------------------------
MCLP Associates L.P. No. IV............ 2,104 0
- -----------------------------------------
----------------- -------------------
Total.................................. 1,561,779 234,267
<PAGE>
SCHEDULE C
1. The initial public offering price per share for the
International Securities shall be $43.00.
2. The purchase price per share for the International
Securities to be paid by the several International Managers shall be
$41.385, being an amount equal to the initial public offering price set
forth above less $1.615 per share; provided that the purchase price per
share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
<PAGE>
SCHEDULE D
LIST OF SUBJECT SUBSIDIARIES
Name of Subsidiary Jurisdiction of Incorporation
White Swan, Inc. Delaware
JP Foodservice Distributors, Inc. Delaware
John Sexton & Co. Delaware
Illinois Fruit & Produce Corp. Illinois
U.S. Foodservice, Inc. Delaware
Biggers Brothers, Inc. Delaware
E & H Distributing Co. Nevada
Joseph Webb Foods, Inc. Delaware
<PAGE>
SCHEDULE E
Registration Rights Agreements
Registration Rights Agreement dated as of May 17, 1996 (the "RSI Agreement")
among Rykoff-Sexton, Inc., a Delaware corporation, and Merrill Lynch
Capital Appreciation Partnership, No. B-XVIII, L.P. and the other
parties thereto and assumed by USF.
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.
Registration Rights Agreement dated as of October 23, 1998 between U.S.
Foodservice and Geoffrey Haar.
(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: Geoffrey Haar.
Registration Rights Agreement dated as of November 16, 1998 ( the "Webb
Registration Agreement") among U.S. Foodservice and the stockholders of
Joseph Webb 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. Christopher Reyes, 358,423 shares; M. Jude Reyes,
358,423 shares; and David K. Reyes, 179,211 shares, subject to
adjustments as indicated in (b) above.
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.
(c) Holders of securities entitled to registration rights
thereunder and number of such securities held by each such
holder as of March 1, 1999: Richard Hafdal, 30,049 shares;
Gary Hafdal, 498 shares; Frank Roedl, 2,322 shares; Rod Buck,
6,337 shares; Sharon Robbins, 166 shares; and B. Scott Ball,
7,423 shares.
Registration Rights Agreement dated as of July 6, 1998 among U.S.
Foodservice and C. Donald Stahl.
(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. Donald Stahl.
<PAGE>
SCHEDULE F
List of Counsel to the Selling Shareholders
Attorney Selling Shareholder
Frank J. Marinaro, Esq...............................Merrill Lynch Capital Appreciation Partnership No. B XVIII, L.P.
ML IBK Positions, Inc.
MLCP Associates L.P. No. II
MLCP Associates L.P. No. IV
Merrill Lynch Capital Appreciation Partnership No. XIII, L.P.
ML Employees LBO Partnership No. I, L.P.
Robin Mass, Esq......................................Merrill Lynch KECALP L.P. 1994
Merrill Lynch KECALP L.P. 1991
Merrill Lynch KECALP L.P. 1987
Margaret E. Nelson, Esq..............................Merchant Banking L.P. No. II
Curtis, Mallet-Prevost, Colt & Mosle
and W.S. Walker & Company............................ML Offshore LBO Partnership No. B-XVIII
ML Offshore LBO Partnership No. XIII
<PAGE>
Exhibit A
FORM OF OPINION OF HOGAN & HARTSON L.L.P.
(w) The Company has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware.
(x) The Company has the corporate power and authority under the Company's
certificate of incorporation (the "Certificate of Incorporation"), the Company's
by-laws (the "By-Laws") and the Delaware General Corporation Law 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.
(y) The Company is authorized to transact business as a foreign corporation in
each jurisdiction specified in Schedule 1 to such opinion as of the respective
dates specified therein.
(z) The authorized capital stock of the Company is as set forth under the
caption "Capitalization" in the Prospectuses. All shares of issued and
outstanding Common 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 were not issued in violation of any preemptive rights
arising under the Certificate of Incorporation, the By-Laws or the Delaware
General Corporation Law.
(aa) The Option Securities 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 in accordance with 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, fully paid and
non-assessable. No holder of any of the Option Securities will be subject to
personal liability by reason of being such a holder, except as such holder may
be liable by reason of such holder's own conduct and acts.
(bb) The issuance and sale by the Company of the Option Securities to the
Underwriters is not subject to any preemptive rights arising under the
Certificate of Incorporation, the By-Laws or the Delaware General Corporation
Law or, to our knowledge, any similar contractual rights.
(cc) Each Delaware Subsidiary was incorporated and is validly existing and in
good standing under the laws of the State of Delaware.
(dd) Each Delaware Subsidiary has the corporate power and authority under its
certificate of incorporation, its bylaws and the Delaware General Corporation
Law to own, lease and operate its properties and to conduct its business as
described in the Prospectuses, and each Delaware Subsidiary and each of Illinois
Fruit & Produce Corp. and E&H Distributing Co. is authorized to transact
business as a foreign corporation in each jurisdiction specified in Schedule 2
or Schedule 3 to such opinion with respect to it as of the respective dates
specified therein.
(ee) All of the issued and outstanding capital stock of each Delaware Subsidiary
has been duly authorized and validly issued and is fully paid and non-assessable
and, to our knowledge, is owned of record by the Company, directly or through
wholly-owned subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(ff) The U.S. Purchase Agreement and the International Purchase Agreement have
been duly authorized, executed and delivered on behalf of the Company.
(gg) The Supplemental Agreement has been duly authorized, executed and delivered
on behalf of the Company and USF and is a valid and binding agreement of the
Company and USF, enforceable against the Company and USF in accordance with its
terms, except (i) as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including, without
limitation, the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and (ii) as may be
limited by the exercise of judicial discretion and the application of principles
of equity, including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether the Supplemental
Agreement, the Support Agreement or the Standstill Agreement is considered in a
proceeding in equity or at law).
(hh) The Registration Statement has become effective under the Securities Act,
the Prospectuses have been filed pursuant to Rule 424(b) promulgated pursuant to
the Securities Act in the manner and within the time period required by Rule
424(b) and, to our knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and (ii) no
proceedings for that purpose have been instituted or are threatened by the
Commission.
(ii) The Registration Statement, including the Rule 430A Information, and the
Prospectuses, excluding the Incorporated Filings, 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 express no opinion), complied as to form in all material respects with
the requirements of the Securities Act and the rules and regulations of the
Commission thereunder.
(jj) Each Incorporated Filing (other than the financial statements and
supporting schedules and other financial data included therein or omitted
therefrom, as to which we express no opinion), on the date such Incorporated
Filing was filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
(kk) The form of certificate used to evidence the Common Stock complies in all
material respects with all applicable requirements of the Delaware General
Corporation Law, with any applicable requirements of the Certificate of
Incorporation and the By-Laws and with all applicable requirements of the New
York Stock Exchange.
(ll) The information in the Prospectuses under the captions "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," "Description of Capital
Stock," "Shares Eligible for Future Sale" and "U.S. Tax Consequences to Non-U.S.
Holders" and the information in the Registration Statement under Item 15
thereof, in each case to the extent that the information constitutes summaries
of legal matters, summaries of the Certificate of Incorporation, the By-Laws,
the Rights Agreement or other instruments or agreements, or legal conclusions,
has been reviewed by us and is correct in all material respects.
(mm) All descriptions in the Prospectuses of contracts and other documents to
which the Company or any of its subsidiaries is a party have been reviewed by us
and are correct in all material respects.
(nn) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any federal or Delaware, Maryland or
New York state court or governmental authority or agency (other than under the
Securities Act and the rules and regulations promulgated thereunder, which have
been obtained, or as may be required under state securities or blue sky laws, as
to which we express no opinion) is necessary or required by or on behalf of the
Company for the execution and delivery of the Purchase Agreements by the Company
or the performance by the Company as of the Closing Time of its obligations
under the Purchase Agreements, including the issuance and sale of the Option
Securities to the Underwriters and the use of the proceeds by the Company from
the sale of the Option Securities as described in the Prospectuses under the
caption "Use of Proceeds," or in connection with the sale of the Securities by
the Selling Shareholders to the Underwriters and the public offering of the
Securities and the Option Securities by the Underwriters.
(oo) The execution and delivery by the Company of, and the performance by the
Company as of the Closing Time of its obligations under, the Purchase
Agreements, including the issuance and sale of the Option Securities to the
Underwriters and the use of the proceeds by the Company from the sale of the
Option Securities as described in the Prospectuses under the caption "Use of
Proceeds," and the sale of the Securities by the Selling Shareholders to the
Underwriters and the public offering of the Securities and the Option Securities
by the Underwriters do not and will not (i) violate the Certificate of
Incorporation or the By-Laws or the certificate of incorporation or bylaws of
any Delaware Subsidiary, (ii) violate the Delaware General Corporation Law, any
law or regulation of the State of Maryland or the State of New York or, to our
knowledge, any provision of applicable federal law, (iii) violate any judgment,
order, writ or decree applicable to the Company or any subsidiary known to us of
any federal, Delaware, Maryland or New York government, government
instrumentality or court or (iv) conflict with or, whether with or without the
giving of notice or passage of time or both, breach or constitute a default or
Repayment Event 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 instrument or agreement listed on Schedule E to the
Purchase Agreements, the Agreement and Plan of Merger (the "Merger Agreement")
dated as of June 30, 1997, as amended as of September 3, 1997 and as of November
5, 1997, among the Company, Rykoff-Sexton, Inc. and Hudson Acquisition Corp.,
any agreement or other document filed or incorporated by reference as an exhibit
to the Registration Statement or as an exhibit to the documents incorporated or
deemed to be incorporated by reference therein, the Support Agreement (other
than Section 7 thereof, as to which we have not been called upon to express, and
do not express, any opinion) or the Standstill Agreement, except for such
conflicts, breaches or defaults, Repayment Events or liens, charges or
encumbrances that would not have a Material Adverse Effect. We express no
opinion with respect to any breach or default not ascertainable from the face of
any indenture, loan agreement or other agreement, or arising under or based upon
any cross-default provision insofar as such breach or default relates to a
default under any indenture, loan agreement or other agreement not referred to
in this Paragraph (s), or arising under or based upon any covenant of a
financial or numerical nature or requiring computation.
(pp) The Company is not an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(qq) To our knowledge, pursuant to the Rights Agreement, each share of issued
and outstanding Common Stock (including the Securities to be sold by the Selling
Shareholders to the Underwriters pursuant to the Purchase Agreements) has one
Right attached to it, and each of the Option Securities to be issued and sold by
the Company to the Underwriters will 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.
(rr) To our knowledge, neither the Company nor any of its subsidiaries has any
right of first refusal under the Standstill Agreement 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 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 (p) 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 March 25, 1999 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 any instrument or agreement which is governed by
the laws of a jurisdiction other than the DGCL, 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, with respect to matters relating to good
standing or qualification as a foreign corporation, on certificates public
officials and, as to matters of fact (but not as to legal conclusions), to the
extent they deem proper, on certificates of the Company and, in rendering the
opinions set forth in Paragraph (k), (s) and (v) above, such counsel may assume
that a majority of the "Continuing Directors" (as defined in the Standstill
Agreement) have approved the Supplemental Agreement or, alternatively, that the
Supplemental Agreement validly amends the Standstill Agreement.
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).
<PAGE>
Exhibit A-2
FORM OF OPINION OF CHAPMAN & CUTLER
(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; and 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 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. 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 our knowledge, otherwise.
(2) The execution, delivery and performance of the Purchase Agreements and the
consummation of the transactions contemplated in the Purchase Agreements do not
and will not result in any violation of (i) the provisions of the articles of
incorporation or by-laws of the Subject Subsidiary, (ii) any applicable Illinois
law, statute, rule or regulation, or (iii) to our knowledge, any judgment,
order, writ or decree, of any government, governmental instrumentality or court
having jurisdiction over the Subject Subsidiary or any of its assets, properties
or operations.
Such opinion shall state that it covers matters governed by and arising
under 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).
<PAGE>
Exhibit A-3
FORM OF OPINION OF LIONEL SAWYER & COLLINS
(Nevada Local Counsel)
(1) E&H Distributing Co., a Nevada corporation (the "Subject Subsidiary"), is a
corporation that has been duly incorporated and is validly existing and in good
standing under the laws of the State of Nevada.
(2) The Subject Subsidiary has the corporate power and authority under the laws
of the State of Nevada to own, lease and operate the properties of the Subject
Subsidiary, and to conduct the business of the Subject Subsidiary, as described
in the Registration Statement.
(3) All of the issued and outstanding capital stock of the Subject Subsidiary
("Subject Subsidiary Stock") has been duly authorized and validly issued, and is
fully paid and non-assessable, and, to the best of our knowledge, is owned by
the Company, directly or through wholly-owned subsidiaries of the Company, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim. No Subject Subsidiary Stock was issued in violation of any preemptive
rights of any stockholder of the Subject Subsidiary under the articles of
incorporation or the bylaws of the Subject Subsidiary or the corporate statutes
of the State of Nevada, or, to the best of our knowledge, any other preemptive
or similar rights of any stockholder of the Subject Subsidiary.
(4) The execution, delivery and performance of the Purchase Agreements and the
consummation of the transactions contemplated in the Purchase Agreements do not
and will not result in any violation of the provisions of the articles of
incorporation or bylaws of the Subject Subsidiary, or any law, statute, rule or
regulation of the State of Nevada applicable to the Subject Subsidiary, or, to
the best of our knowledge, any judgment, order, writ or decree of any
government, governmental instrumentality or court having jurisdiction over the
Subject Subsidiary.
Such opinion shall state that it covers matters governed by and arising under
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).
<PAGE>
B-1
Exhibit B
[OMITTED INTENTIONALLY]
<PAGE>
Exhibit C
FORM OF SUPPLEMENTAL AGREEMENT
<PAGE>
Exhibit D
FORM OF LETTER OF RESIGNATION
March _____, 1999
U.S. Foodservice
9755 Patuxent Woods Drive
Columbia, MD 21046
Attention: James L. Miller
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 25, 1999
among U.S. Foodservice, a Delaware corporation (the "Company"), certain
stockholders of the Company named therein and Merrill Lynch, Pierce, Fenner &
Smith Incorporated and the other parties thereto (the "U.S. Purchase Agreement")
and the International Purchase Agreement dated March 25, 1999 among the Company,
certain stockholders of the Company named therein and Merrill Lynch
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,
[Matthias B. Bowman]
[Albert J. Fitzgibbons III]
</TABLE>
