RICHFOOD HOLDINGS, INC.
3,450,000 Shares
Common Stock
Underwriting Agreement
March __, 1996
J.P. Morgan Securities Inc.
Donaldson, Lufkin & Jenrette
Securities Corporation
Wheat, First Securities, Inc.
Interstate/Johnson Lane Corporation
As Representatives
of the Several Underwriters
Listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Ladies and Gentlemen:
The persons named in Schedule II hereto (the "Firm Selling
Shareholders") propose to sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), and the Underwriters propose to purchase from such Firm
Selling Shareholders, an aggregate of 3,450,000 shares of common stock, without
par value, of Richfood Holdings, Inc., a Virginia corporation (the "Company"),
which are referred to herein as the "Underwritten Shares."
In addition, the persons named in Schedule III hereto (the
"Optional Selling Shareholders," and together with the Firm Selling
Shareholders, the "Selling Shareholders") propose to sell to the several
Underwriters,
for the sole purpose of covering over-allotments in connection with the sale of
the Underwritten Shares, at the option of the Underwriters, up to an additional
475,845 shares of Common Stock (the "Option Shares"). The Underwritten Shares
and the Option Shares are herein referred to as the "Shares."
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (file no. 333- ), including a prospectus, relating to the
Shares. The registration statement as amended at the time when it shall become
effective, or, if a post-effective amendment is filed with respect thereto, as
amended by such post-effective amendment at the time of its effectiveness,
including in each case information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act, is referred to in this Agreement as the "Registration
Statement," and the prospectus in the form first used to confirm sales of Shares
is referred to in this Agreement as the "Prospectus." Any reference in this
Agreement to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the effective date of the Registration Statement or the date of such
preliminary prospectus or the Prospectus, as the case may be and any reference
to "amend," "amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") that are deemed to be incorporated
by reference therein.
The Company and the Selling Shareholders wish to confirm as
follows their agreement with you and the other several Underwriters on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Underwriters:
1. Each Firm Selling Shareholder hereby agrees to sell to each
Underwriter as hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase at a price of
[$ ] per share (the "Purchase
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Price") from such Firm Selling Shareholder the respective number of Underwritten
Shares (subject to such adjustments to eliminate any fractional shares as the
Representatives in their sole discretion may make) that bears the same
proportion to the number of Underwritten Shares to be sold by such Firm Selling
Shareholder to the Underwriters as set forth on Schedule II hereto as the number
of Underwritten Shares set forth opposite the name of such Underwriter on
Schedule I hereto (or such number of Underwritten Shares increased as set forth
in Section 11 hereof), bears to the total number of Underwritten Shares.
In addition, each Optional Selling Shareholder agrees to sell
to the several Underwriters as hereinafter provided and, on the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, the Underwriters shall have the option to purchase,
severally and not jointly, from each Optional Selling Shareholder up to the
maximum number of Option Shares set forth opposite such Optional Selling
Shareholder's name on Schedule III hereto at the Purchase Price for the sole
purpose of covering over-allotments (if any) in the sale of Underwritten Shares
by the several Underwriters.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number of Underwritten Shares
increased as set forth in Section 11 hereof) bears to the aggregate number of
Underwritten Shares being purchased from the Firm Selling Shareholders by the
several Underwriters, subject, however, to such adjustments to eliminate any
fractional shares as the Representatives in their sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representatives to the Attorneys-in-Fact (as defined below). Such notice shall
set forth the aggregate number of Option Shares as to which the option is being
exercised and the date and time when the Option Shares are to be delivered and
paid for which may be the same date and time as the Closing Date (as hereinafter
defined) but shall not be earlier than the Closing Date nor later than the tenth
full Business Day (as hereinafter defined) after the date of such notice (unless
such time and date are postponed in accordance with the
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provisions of Section 11 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
Certificates in transferable form for the Shares (including
any Option Shares) which each of the Selling Shareholders agrees to sell
pursuant to this Agreement have been placed in custody with the Company, as
custodian (the "Custodian"), for delivery under this Agreement pursuant to a
Custody Agreement executed by each Selling Shareholder (individually, a "Custody
Agreement"). Each Selling Shareholder agrees that (i) the Shares of such Selling
Shareholder represented by the certificates held in custody pursuant to such
Selling Shareholder's Custody Agreement are subject to the interests of the
Underwriters, (ii) the arrangements made by such Selling Shareholder for such
custody are, except as specifically provided in such Selling Shareholder's
Custody Agreement, irrevocable, and (iii) the obligations of such Selling
Shareholder hereunder and under such Selling Shareholder's Power (as defined
below) and Custody Agreement shall not be terminated by any act of such Selling
Shareholder or by operation of law, whether by the dissolution or liquidation of
such Selling Shareholder or the occurrence of any other event. If any Selling
Shareholder shall dissolve or liquidate or if any other event shall occur before
the delivery of the Shares hereunder, certificates for the Shares of such
Selling Shareholder shall be delivered to the Underwriters by Alex Grass or any
other person to be named as an attorney-in-fact (collectively, the
"Attorneys-in-Fact"), acting as agents and attorneys-in-fact of such Selling
Shareholder pursuant to an irrevocable power of attorney (individually, a
"Power") as included in the Custody Agreement in accordance with the terms and
conditions of this Agreement and such Selling Shareholder's Power and Custody
Agreement as if such dissolution or liquidation or other event had not occurred,
regardless of whether or not the Attorneys-in-Fact or any Underwriter shall have
received notice of such dissolution, liquidation or other event. Each
Attorney-in-Fact is authorized, on behalf of each of the Selling Shareholders,
to, among other acts, execute this Agreement and any receipts, notices, requests
and instructions in connection with the sale of the Shares to be sold hereunder
by such Selling Shareholder, to make delivery of the certificates for such
Shares, to receive the proceeds of the sale of such Shares, to give receipts for
such proceeds, to pay therefrom any expenses to be borne by such Selling
Shareholder in connection with the sale and public offering of such Shares, to
distribute the balance thereof to such Selling Shareholder and to take such
other action as may be
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necessary or desirable in connection with the transactions
contemplated by this Agreement.
2. The Company and the Selling Shareholders understand that
the Underwriters intend (i) to make a public offering of the Shares as soon
after the Registration Statement and this Agreement have become effective as in
the judgment of the Representatives is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made to the Custodian or
its order by certified or official bank check or checks payable in New York
Clearing House or other next day funds at the office of J.P. Morgan Securities
Inc., 60 Wall Street, New York, New York 10260 at 10:00 A.M., New York City
time, in the case of the Underwritten Shares, on ____________, 1996, or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Representatives and the Attorneys-in-Fact on behalf of the
Selling Shareholders may agree upon in writing or, in the case of the Option
Shares, on the date and time specified by the Representatives in the written
notice of the Underwriters' election to purchase such Option Shares. The time
and date of such payment for the Underwritten Shares are referred to herein as
the Closing Date and the time and date for such payment for the Option Shares,
if other than the Closing Date, are herein referred to as the Additional Closing
Date. As used herein, the term "Business Day" means any day other than a day on
which banks are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date registered in such names and in such
amounts as the Representatives shall request in writing not later than two full
Business Days prior to the Closing Date or the Additional Closing Date, as the
case may be with any transfer taxes payable in connection with the transfer to
the Underwriters of the Shares duly paid. The certificates for the Shares will
be made available for inspection and packaging by the Representatives at the
office of J.P. Morgan Securities Inc. not later than 1:00 P.M., New York City
time, on the Business Day prior to the Closing Date or the Additional Closing
Date, as the case may be.
4. The Company represents and warrants to each
Underwriter that:
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(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and did 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; provided that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives
expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented at the Closing Date, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing representations and warranties shall not apply to
statements or omissions in the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;
(c) the documents incorporated by reference in
the Prospectus, when they were filed with the
Commission, conformed in all material respects to the
6
requirements of the Exchange Act and none of such documents contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(d) the financial statements of the Company, and the related
notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, and the supporting schedules included or incorporated
by reference in the Registration Statement present fairly the
information required to be stated therein;
(e) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole ("Material Adverse Change") or any development
involving a prospective Material Adverse Change, otherwise than as set
forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or
not in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(f) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of its incorporation, with power and authority (corporate and other) to
own its
7
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole ("Material Adverse Effect");
(g) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect; and all the outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and
validly issued, are fully-paid and non-assessable, and (except in the
case of foreign subsidiaries, for directors' qualifying shares) are
owned by the Company, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims;
(h) this Agreement and each of the Custody Agreements have
been duly authorized, executed and delivered by the Company and each of
the Custody Agreements constitutes a valid and binding agreement of the
Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability; to the best of the Company's
knowledge, this Agreement and the Custody Agreement of each Selling
Shareholder have been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder; the Custody Agreement of each
Selling Shareholder constitutes a valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights
8
generally and (ii) the availability of equitable
remedies may be limited by equitable principles of
general applicability;
(i) the authorized capital stock of the Company conforms as to
legal matters to the description thereof set forth in the Registration
Statement and the Prospectus, and all of the outstanding shares of
capital stock of the Company (including the Shares to be sold by the
Selling Shareholders) have been duly authorized and validly issued, are
fully-paid and non-assessable and are not subject to any preemptive or
similar rights; and, except as described in or expressly contemplated
by the Prospectus, there are no outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock
of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
(j) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in
violation of or in default under, its articles of incorporation or
by-laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate could not be expected to have a
Material Adverse Effect; the sale of the Shares by the Selling
Shareholders and the performance by the Company and each Selling
Shareholder of their respective obligations under this Agreement and
the Custody Agreement and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company, any of the
Company's subsidiaries, or to the best of the Company's knowledge, any
Selling Shareholder is a party or by which the Company, any of the
Company's subsidiaries, or to the best of the Company's knowledge, any
Selling Shareholder is bound, or to which any of the property or assets
of the
9
Company, any of the Company's subsidiaries, or to the best of the
Company's knowledge, any Selling Shareholder is subject, nor will any
such action result in any violation of the provisions of the Articles
of Incorporation, the Bylaws of the Company or, to the best of the
Company's knowledge, the organizational documents of any Selling
Shareholder, or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their
respective properties or, to the best of the Company's knowledge, any
Selling Shareholder or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the sale of the
Shares by the Selling Shareholders or the consummation by the Company
or, to the best of the Company's knowledge, the Selling Shareholders of
the transactions contemplated by this Agreement and the Custody
Agreements except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky Laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(l) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company, could individually or in the
aggregate reasonably be expected to have a Material Adverse Effect,
and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others; and there are no contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the
Prospectus which are not filed or described as required;
(m) the Company and its subsidiaries have good and marketable
title in fee simple to all items of real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described or referred to in the Prospectus or such as
10
do not materially affect the value of such property and do not
interfere with the use made or proposed to be made of such property by
the Company and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries are held by them
under valid, existing and enforceable leases with such exceptions as
are not material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company or its
subsidiaries;
(n) no relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which is required
by the Securities Act to be described in the Registration Statement and
the Prospectus which is not so described;
(o) no person has the right to require the Company to register
any securities for offering and sale under the Securities Act by reason
of the filing of the Registration Statement with the Commission or the
sale of the Shares by the Selling Shareholders;
(p) the Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(q) in the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
material associated costs and liabilities (including, without
limitation, any material capital or operating
11
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any
material related constraints on operating activities and any material
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and
(r) the Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
5. Each Selling Shareholder represents and
warrants to each Underwriter that:
(a) such Selling Shareholder has, and immediately prior to the
Closing Date and any Additional Closing Date such Selling Shareholder
will have, good and valid title to the Shares to be sold on such
Closing Date or Additional Closing Date, as the case may be, by such
Selling Shareholder, free and clear of all liens, encumbrances,
equities or claims and, upon delivery of the Shares to be delivered on
such Closing Date or Additional Closing Date by such Selling
Shareholder pursuant to this Agreement and payment therefor pursuant
hereto, good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several
Underwriters;
(b) such Selling Shareholder now has, and on the Closing Date
and any Additional Closing Date will have, full right, power and
authority, to enter into and perform its obligations under, this
Agreement and the Custody Agreement of such Selling Shareholder will
not contravene any provision of applicable law, or the certificate of
incorporation or by-laws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or any agreement or other instrument
binding upon such Selling Shareholder or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over such
Selling Shareholder, and no consent, approval, authorization or order
of or qualification with any governmental body or agency is required
for the performance by such Selling Shareholder of its obligations
under this Agreement and the Custody Agreement of such Selling
Shareholder except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of
the Shares;
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(c) this Agreement and the Custody Agreement of such Selling
Shareholder have been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder; the Custody Agreement and of such
Selling Shareholder are valid and binding agreements of such Selling
Shareholder, enforceable in accordance with their terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(d) the execution and delivery by or on behalf of such Selling
Shareholder of this Agreement and the Custody Agreement of such Selling
Shareholder, the sale of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement, the compliance by such Selling
Shareholder with all of the provisions of this Agreement and the
Custody Agreement of such Selling Shareholder and the consummation of
the transactions herein and therein contemplated, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling
Shareholder is bound, or to which any of the property or assets of such
Selling Shareholder is subject, nor will any such action conflict with
or result in a breach or violation of any of the provisions of the
certificate or articles of incorporation or by-laws of, or other
organizational documents governing, such Selling Shareholder, if such
Selling Shareholder is a corporation, or if such Selling Shareholder is
some other form of legal entity, the organizational or other documents
governing such entity, or any applicable law or statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or the property or assets of
such Selling Shareholder; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental body or agency is required for the execution and delivery
by or on behalf of such Selling Shareholder of this Agreement or the
Custody Agreement of such Selling Shareholder, the sale of the Shares
to be sold by such Selling Shareholder pursuant to this Agreement, the
compliance by such Selling Shareholder with all of the provisions of
this Agreement and the Custody Agreement of such Selling Shareholder or
the consummation by such Selling Shareholder of the
13
transactions herein and therein contemplated, except such consents,
approvals, authorizations, registrations or qualifications as have been
obtained under the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares;
(e) certificates in negotiable form for all Shares to be sold
by such Selling Shareholder under this Agreement have been irrevocably
delivered to the Custodian for the purpose of effecting delivery under
this Agreement;
(f) such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or that 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 Shares;
(g) the Shares to be sold by such Selling Shareholder pursuant
to this Agreement have been duly authorized and are validly issued,
fully paid and non-assessable; and
(h) all information relating to such Selling Shareholder
furnished by or on behalf of such Selling Shareholder for use in the
Registration Statement and Prospectus is, and on the Closing Date will
be, true, correct and complete; to the extent that any statements or
omissions relating to such Selling Shareholder made in the Registration
Statement, the Prospectus or any amendment or supplement thereto are
made in reliance upon and in conformity with information furnished by
or on behalf of such Selling Shareholder for use therein, the
Registration Statement and Prospectus, as amended or supplemented,
comply, or will comply, as the case may be, in all material respects
with the Securities Act and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
6. The Company covenants and agrees with the
several Underwriters as follows:
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(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act;
(b) to deliver, at the expense of the Company, to the
Representatives, six signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein, and to each
other Underwriter a conformed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case without
exhibits but including the documents incorporated by reference therein
and, during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments
and supplements thereto and documents incorporated by reference
therein) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to deliver any
written communications from the Commission or any state securities
commission, (i) when the Registration Statement shall become effective,
(ii) when any amendment to the Registration Statement shall have become
effective, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any
proceeding for that purpose, and (v) of the receipt by the Company of
any notification with respect to any suspension of the qualification of
the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to prevent the issuance of any
15
such stop order or notification and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at the expense of the Company, to the Underwriters
and to the dealers (whose names and addresses the Representatives will
furnish to the Company) to which Shares may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Shares and to pay all fees and expenses (including fees and
disbursements of counsel to the Underwriters) reasonably incurred in
connection with such qualification; provided that the Company shall not
be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement
covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) so long as the Shares are outstanding, to
furnish to the Representatives copies of all reports or
other communications (financial or other) furnished to
16
holders of Shares, and copies of any reports and
financial statements furnished to or filed with the
Commission or any national securities exchange;
(i) for a period of 120 days after the date of the Prospectus,
without the prior written consent of J.P. Morgan Securities Inc. not to
(i) offer, sell, contract to sell or grant any option to purchase or
otherwise dispose of any shares of common stock of the Company or any
securities convertible into or exercisable or exchangeable for shares
of common stock of the Company other than the Shares to be sold
hereunder and any shares of common stock of the Company issued upon the
exercise of options granted under existing employee stock option plans
or (ii) file any registration statement under the Securities Act with
respect to shares of common stock of the Company or any securities
convertible into or common exercisable or exchangeable for shares of
common stock of the Company; and
(j) to pay all costs and expenses incident to the performance
of the obligations hereunder of the Company and the Selling
Shareholders, including without limiting the generality of the
foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution and delivery of the unlegended certificates
evidencing the Shares, (ii) incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in
connection with the registration or qualification of the Shares under
the laws of such jurisdictions as the Representatives may designate
(including filing fees and fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the quotation on The Nasdaq
National Market, (v) related to the filing with, and clearance of the
offering by, the National Association of Securities Dealers, Inc. and
(vi) in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, all other agreements
relating to underwriting and syndication arrangements, the Preliminary
and Supplemental Blue Sky Memoranda and the furnishing to the
Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided.
17
7. Each of the Selling Shareholders covenants
and agrees with the several Underwriters as follows:
(a) such Selling Shareholder will do or perform all things
required to be done or performed by such Selling Shareholder prior to
the Closing Date or any Additional Closing Date, as the case may be, to
satisfy all conditions precedent to the delivery of the Shares pursuant
to this Agreement;
(b) in order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder agrees to deliver to you prior
to or at the Closing Date or the Additional Closing Date, as
applicable, a properly completed and executed United States Treasury
Department Form W-9 or Form W-8, as applicable (or other applicable
forms or statements specified by Treasury Department regulations in
lieu thereof);
(c) for a period of 120 days after the date of this Agreement
not to offer, sell, contract to sell or otherwise dispose of any shares
of common stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of common stock of the Company
without the prior written consent of J.P. Morgan Securities Inc., other
than the Shares to be sold hereunder, any shares of common stock of the
Company issued upon the exercise of outstanding options, the grant of
options under existing employee stock option plans, and shares issuable
upon the exercise of warrants outstanding on the date hereof; and
(d) such Selling Shareholder agrees to pay or cause to be paid
all taxes, if any, on the transfer and sale of the Shares being sold by
such Selling Shareholder.
8. The several obligations of the Underwriters
hereunder to purchase the Underwritten Shares are subject to
the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the
18
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by
the Commission; and all requests for additional information shall have
been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company
contained herein are true and correct on and as of the Closing Date as
if made on and as of the Closing Date and the Company shall have
complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended
or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities
of or guaranteed by the Company by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus there shall not
have been any Material Adverse Change or any development involving a
prospective Material Adverse Change, otherwise than as set forth or
contemplated in the Prospectus, the effect of which in the judgment of
the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and
in the manner contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date a certificate of an executive officer of the Company
satisfactory to the Representatives to the effect set forth in
subsections (a) through (c) of this Section and to the further effect
that there has not occurred any Material Adverse Change, or any
development involving a prospective Material Adverse Change, from that
set forth or contemplated in the Registration Statement and the
Prospectus;
(f) Hunton & Williams, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the
Closing Date, in form and
19
substance satisfactory to the Representatives, to the
effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a Material
Adverse Effect;
(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under
the laws of its jurisdiction of incorporation with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified
and in good standing would not have a Material Adverse Effect;
and all of the outstanding shares of capital stock of each
subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except in the case of
foreign subsidiaries, for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge,
threatened to which the Company or any of its subsidiaries is
or may be a party or to which any property of the Company or
its subsidiaries is or may be the subject which, if determined
adversely to the Company or such subsidiaries, could
individually or in the aggregate reasonably be expected to
have a
20
Material Adverse Effect; to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and such
counsel does not know of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed
or described as required;
(v) this Agreement and each of the Custody
Agreements have been duly authorized, executed and
delivered by the Company;
(vi) the sale of the Shares by the Selling
Shareholders and the performance by the Company and the
Selling Shareholders of their respective obligations under
this Agreement and the Custody Agreements and the consummation
of the transactions contemplated herein and therein will not
result in any violation of the provisions of the Articles of
Incorporation or any law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company and its subsidiaries, the
Selling Shareholders or any of their respective properties;
and no consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency
or body is required for the sale of the Shares by the Selling
Shareholders or the consummation by the Company or the Selling
Shareholders of the transactions contemplated by this
Agreement or the Custody Agreements;
(vii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Registration Statement and the Prospectus;
(viii) the shares of capital stock of the Company
outstanding (including the Shares to be sold by the Selling
Shareholders) have been duly and validly authorized and issued
by the Company, are registered in the books of the Company as
fully paid and conform to the description thereof in the
Prospectus; the holders of shares of common stock of the
Company are not subject to any preemptive or similar rights
under the laws of Virginia, the Articles of Incorporation or
the
21
Bylaws; the registered holders have good and valid title to
their respective shares of common stock of the Company on the
assumption that they have not entered into any liens,
encumbrances, equities or claims which could give rise to any
equitable interest on the part of any third party in respect
of such shares of Common Stock;
(ix) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when delivered to and
paid for the Underwriters in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable and the issuance of the Shares is not subject
to any preemptive or similar rights;
(x) the compliance by the Company and the Selling
Shareholders with their respective obligations under this
Agreement and the Custody Agreements and the consummation of
the transactions contemplated herein and therein do not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other similar
agreement or instrument of which such counsel has knowledge,
after inquiry of the Company's and its subsidiaries' officers,
to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject;
(xi) assuming the representations of each Selling
Shareholder in the Custody Agreement of such Selling
Shareholder are true and correct (such counsel having made no
independent investigation with respect thereto), no consent,
approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is
required for the sale of the Shares by the Selling
Shareholders or the consummation by the Selling Shareholders
or the Company of the other transactions contemplated by this
Agreement and the Custody Agreements, except such consents,
approvals, authorizations, registrations or qualifications as
have been obtained under the Securities Act and as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters;
22
(xii) each of the Custody Agreements constitutes a
valid and binding agreement of the Company, enforceable in
accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(xiii) neither the Company nor any of its subsidiaries is,
or with the giving of notice or lapse of time or both would
be, in violation of or in default under, its Articles of
Incorporation or Bylaws or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its
subsidiaries is a party or by which it or any of them or any
of their respective properties is bound, except for violations
and defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole;
the issue and sale of the Shares and the performance by the
Company of its obligations under this Agreement and the
consummation of the transactions contemplated herein will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, nor will any such action result in
any violation of the provisions of the Articles of
Incorporation, or the Bylaws of the Company or any applicable
law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective
properties;
(xiv) the statements in the Prospectus under
"Description of Capital Stock" and "Underwriting," in the
Prospectus incorporated by reference from Item 3 of Part I of
the Company's Annual Report on Form 10-K for the year ended
April 29, 1995 and in the Registration Statement in Item 15,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present the information called for
23
with respect to such legal matters, documents or
proceedings; and
(xv) such counsel (A) is of the opinion that each
document incorporated by reference in the Registration
Statement and the Prospectus (except for the financial
statements included therein as to which such counsel need
express no opinion) complied as to form in all material
respects, when filed with the Commission, with the Exchange
Act; (B) is of the opinion that the Registration Statement and
the Prospectus and any amendments and supplements thereto
(except for the financial statements included therein as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the
Securities Act and (C) believes that (except for the financial
statements included therein as to which such counsel need
express no belief) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective did not contain any 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 that the Prospectus as
amended or supplemented, if applicable, does not contain any
untrue statement of a material fact 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.
In rendering such opinions, such counsel may rely (A)
as to matters involving the application of laws other than the laws of
the United States, the State of Virginia and the State of New York, to
the extent such counsel deems proper and to the extent specified in
such opinion, if at all, upon an opinion or opinions (reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable
laws; and (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company and
certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good
standing of the Company. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in such counsel's opinion, the
24
Underwriters and they are justified in relying thereon. With respect to
the matters to be covered in subparagraph (xvii) above, counsel may
state their opinion and belief is based upon their participation in the
preparation of the Registration Statement and the Prospectus and any
amendment or supplement thereto (including the documents incorporated
by reference therein) and review and discussion of the contents thereof
but is without independent check or verification except as specified.
(g) Counsel for each Selling Shareholder (which counsel shall
be acceptable to the Representatives), shall have furnished to the
Representatives their written opinion, dated the Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:
(i) such Selling Shareholder has full right, power
and authority, and all authorization and approval required by
law, to enter into this Agreement and the Custody Agreement of
such Selling Shareholder and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Shareholder
pursuant to this Agreement;
(ii) each of this Agreement and the Custody Agreement
of such Selling Shareholder has been duly authorized, executed
and delivered by or on behalf of such Selling Shareholder;
(iii) the Custody Agreement of such Selling
Shareholder is a valid and binding agreements of
such Selling Shareholder;
(iv) upon delivery of the Shares being sold by such
Selling Shareholder pursuant to this Agreement and payment
therefor as contemplated herein, the Underwriters will acquire
good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims;
(v) the execution and delivery by or on behalf of
such Selling Shareholder of this Agreement and the Custody
Agreement of such Selling Shareholder, the sale of the Shares
to be sold by such Selling Shareholder pursuant to this
Agreement, the compliance by such Selling Shareholder with all
of the provisions of this Agreement and the Custody Agreement
of such Selling Shareholder and the consummation of the
25
transactions herein and therein contemplated do not, to the
best of such counsel's knowledge after due inquiry, conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder is bound or to which any of the
property or assets of such Selling Shareholder is subject, nor
does any such action conflict with or result in any breach or
violation of any of the provisions of the certificate or
articles of incorporation or by-laws of such Selling
Shareholder, if such Selling Shareholder is a corporation, or
if such Selling Shareholder is some other form of legal
entity, the organizational or other documents governing such
entity, or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or any of its
property or assets;
(vi) no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body having jurisdiction over such
Selling Shareholder or any property or assets of such Selling
Shareholder is required for the execution and delivery by or
on behalf of such Selling Shareholder of this Agreement or the
Custody Agreement of such Selling Shareholder, the sale of the
Shares to be sold by such Selling Shareholder pursuant to this
Agreement, the compliance by such Selling Shareholder with all
of the provisions of this Agreement and the Custody Agreement
of such Selling Shareholder or the consummation by such
Selling Shareholder of the transactions contemplated herein
and therein, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under
the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters; and
(vii) the descriptions in the Registration Statement,
the Prospectus and any amendment or supplement thereto of
agreements, whether written or oral, and of other documents to
which the
26
Selling Shareholder or any of its affiliates (other than the
Company) is a party, are accurate and fairly present the
information required to be shown with respect thereto by Form
S-3 under the Securities Act. There are no agreements, whether
written or oral, or other documents to which the Selling
Shareholder or any of its affiliates (other than the Company)
is a party, which, to the knowledge of such counsel, exist
that are required by the Securities Act or the rules and
regulations to be described in the Registration Statement or
filed as exhibits to the Registration Statement that are not
described or filed as required.
(h) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date, KPMG Peat
Marwick LLP shall have furnished to the Representatives letters, dated
the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Registration Statement and the Prospectus;
(i) the Representatives shall have received on and as of the
Closing Date an opinion of Davis Polk & Wardwell, counsel to the
Underwriters, with respect to the Registration Statement, the
Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(j) the Selling Shareholders shall have complied
with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to
the Closing Date; and
(k) on or prior to the Closing Date the Company and each
Selling Shareholder shall have furnished to the Representatives such
further certificates and documents as the Representatives shall
reasonably request.
The several obligations of the Underwriters to purchase Option Shares hereunder
on the Additional Closing Date are, unless otherwise agreed by the Underwriters,
subject to the
27
delivery to the Representatives on the Additional Closing Date of such documents
as they may reasonably request.
9. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein; provided
that the foregoing indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and, if required by law, a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Shares to such person.
Each Selling Shareholder, except Alex Grass and Martin Grass,
agrees, severally and not jointly, to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration
28
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Selling Shareholder furnished in writing by or on behalf of such Selling
Shareholder for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any preliminary prospectus. Notwithstanding the
foregoing, no Selling Shareholder shall be liable hereunder for any amount in
excess of the total proceeds (before deducting expenses) received by such
Selling Shareholder from the Underwriters for the Shares sold by such Selling
Shareholder hereunder.
Each of Alex Grass and Martin Grass agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and the Company, its directors,
its officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section, from and against
any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading. Notwithstanding the foregoing, neither Alex
Grass nor Martin Grass shall be liable hereunder for any amount in excess of the
total proceeds (before deducting expenses) received by such Selling Shareholder
from the Underwriters for the Shares sold by Such Shareholder hereunder.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, the Selling Shareholders and each person who
controls the Company or any Selling Shareholder within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation
the legal fees and other expenses incurred in connection with
29
any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
three preceding paragraphs, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) (a) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, (b) for the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (c) for all Selling
Shareholders
30
and all persons, if any, who control any Selling Shareholder within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. Any such separate firm for the Underwriters and such
control persons of the Underwriters shall be designated in writing by J.P.
Morgan Securities Inc.; any such separate firm for the Company, its directors,
its officers who sign the Registration Statement and such control persons of the
Company shall be designated in writing by the Company; and any such separate
firm for the Selling Shareholders and such control persons of Selling
Shareholders shall be designated by the Attorneys-in-Fact. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first, second and
third paragraphs of this Section 9 is unavailable to an Indemnified Person in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (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 Underwriters on the other hand from the offering of the
31
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholders on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, 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 Underwriters on the other shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Selling Shareholders
and the total underwriting discounts and the commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Shares. The
relative fault of the Company and the Selling Shareholders on the one hand and
the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Shareholders or by the 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 Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9, in no event (i)
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission and (ii)
shall any Selling Shareholder be required to contribute any amount in excess
32
of the amount by which the total proceeds (before deducting expenses) received
by such Selling Shareholder from the Underwriters for the Shares sold by such
Selling Shareholder hereunder exceeds the amount of any damages that such
Selling Shareholder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The indemnity and contribution agreements contained in this
Section 9 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 9 and the representations and warranties of the Company and the Selling
Shareholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, by or on behalf of any Selling Shareholder or any person
controlling any Selling Shareholder or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Shares.
10. Notwithstanding anything herein contained, this Agreement
(or the obligations of the several Underwriters with respect to the Option
Shares) may be terminated in the absolute discretion of the Representatives, by
notice given to the Company and the Attorneys-in-Fact, if after the execution
and delivery of this Agreement and prior to the Closing Date (or, in the case of
the Option Shares, prior to the Additional Closing Date) (i) trading generally
shall have been suspended or materially limited on or by any of the New York
Stock Exchange, the American Stock Exchange, The Nasdaq National Market, the
National Association of Securities Dealers, Inc., the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended or materially
limited in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either
33
U.S. Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representatives, is material and
adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
11. This Agreement shall become effective upon the later of
(x) execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Shares set forth opposite their respective names in Schedule I hereto bears to
the aggregate number of Underwritten Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 11 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date or the
Additional Closing Date, as the case may be, any Underwriter or Underwriters
shall fail or refuse to purchase Shares which it or they have agreed to purchase
hereunder on such date, and the number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares to be
purchased on such date, and arrangements satisfactory to the Representatives,
the Selling Shareholders and the Company for the purchase of such Shares are not
made within 36 hours after such default, this Agreement (or the obligations of
the several Underwriters to purchase the Option Shares, as the case may be)
shall terminate without liability on the part of any non-defaulting Underwriter,
the Selling Shareholders or the Company. In any such case the Representatives,
the Selling Shareholders or the Company shall have the right to postpone
34
the Closing Date (or, in the case of the Option Shares, the Additional Closing
Date), but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
12. If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company or
any Selling Shareholder to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or any Selling
Shareholder shall be unable to perform its obligations under this Agreement or
the Custody Agreement of such Selling Shareholder or any condition of the
Underwriters' obligations cannot be fulfilled, the Company agrees to reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and expenses of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
13. This Agreement shall inure to the benefit of and be
binding upon the Company, each Selling Shareholder, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
14. Any action by the Underwriters hereunder may be taken by
the Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of
the Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities alone shall be binding upon the Underwriters. 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 Underwriters shall be given to the
Representatives c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New
York 10260 (telex: _______); Attention: Syndicate Department. Notices to the
Company shall be given to it at
35
- ----------------------, -------------, ----------------,
(telex:________); Attention:___________.
15. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof.
36
If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
RICHFOOD HOLDINGS, INC.
By:_________________________
Title:
EACH OF THE SELLING SHAREHOLDERS
NAMED IN SCHEDULES II AND III
HERETO
By:
Name: Alex Grass
Attorney-in-Fact
Accepted: _______________, 1996
J.P. MORGAN SECURITIES INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
WHEAT, FIRST SECURITIES, INC.
INTERSTATE/JOHNSON LANE CORPORATION
Acting severally on behalf of
themselves and the
several Underwriters listed
in Schedule I hereto.
By: J.P. Morgan Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By: ________________________
Title:
37
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation. . . . . . . . . . . . . . . . .
Wheat, First Securities, Inc. . . . . . . . . . . . . . .
Interstate/Johnson Lane
Corporation . . . . . . . . . . . . . . . . . . . . . .
----------------
Total: . . . . . . . . . . . .
1
SCHEDULE II
Number of
Underwritten
Shares
Selling Shareholder To Be Sold
Alex Grass........................................ 1,057,863
Louise Grass...................................... 4,484
Martin Grass...................................... 1,234,116
Trust f/b/o Martin Grass' Children................ 397,689
Elizabeth Grass Weese Trust....................... 182,650
Trusts f/b/o Linda Grass Shapiro's Children....... 182,650
Peter Vanderveen.................................. 43,957
Peter Vanderveen and Lois Vanderveen.............. 214,212
David Grundling................................... 126,985
H. Irwin Levy..................................... 2,697
Neil Norry........................................ 2,697
Total: ....................................... 3,450,000
2
SCHEDULE III
Maximum
Number of Optional Shares
Selling Shareholder To Be Sold
Total: ......................................... ----------------