RICHFOOD HOLDINGS, INC.
SECONDARY OFFERING OF COMMON STOCK
CUSTODY AGREEMENT
AND POWER OF ATTORNEY
The undersigned (the "Shareholder") has irrevocably elected, pursuant
to an election form submitted by the undersigned to Richfood Holdings, Inc. (the
"Company") in compliance with the registration rights provisions of the
Agreement and Plan of Reorganization, by and between the Company and Super Rite
Corporation (the "Registration Rights Provisions"), to sell _____ shares of
common stock, without par value (the "Common Stock") of the Company, such shares
being represented by the certificate(s) described in such election form (the
"Certificates"), to certain underwriters for whom J.P. Morgan Securities Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation, Interstate/Johnson Lane
Corporation and Wheat, First Securities, Inc. are acting as representatives
(collectively, the "Underwriters"), pursuant to the terms and conditions of the
Underwriting Agreement referred to below. The Shareholder understands that the
Underwriters propose to offer the shares of Common Stock purchased from the
Shareholder for sale to the public and that, in connection with such offering,
the Company has filed a Registration Statement on Form S-3, No. 333 -
___________ (the "Registration Statement") with the Securities and Exchange
Commission to register all of the shares of Common Stock tendered for sale by
the Selling Shareholders (as defined below) under the Securities Act of 1933, as
amended (the "Securities Act").
1. Definitions. When used herein, the following terms shall have the
following meanings, unless the context otherwise requires:
"Attorney": Alex Grass, as attorney-in-fact for the
Shareholder appointed pursuant to Section 12 hereof.
"Final Prospectus": The form of final prospectus relating to
the Securities and included in the Registration Statement, including any
information omitted therefrom at the time of effectiveness of such Registration
Statement in accordance with the rules and regulations of the Securities and
Exchange Commission under the Securities Act.
"NASDAQ": The Nasdaq National Market.
"Offering": The offering of the Securities to the
public pursuant to the Registration Statement.
"Securities": The shares of Common Stock that the
Shareholder has elected to sell in the Offering.
"Selling Shareholders": Those shareholders of the
Company who, together with the undersigned, have elected pursuant
to an election form submitted to the Company to sell all or a portion of the
shares of Common Stock held by such shareholders in connection with the
Offering.
"Underwriting Agreement": The agreement by and among the
Company, the Selling Shareholders and the Underwriters pursuant to which the
Underwriters shall agree, severally and not jointly and subject to certain
conditions, to purchase the Securities from the Selling Shareholders and to
offer such Securities for sale to the public pursuant to the Registration
Statement.
2. Deposit of Certificates. The Shareholder herewith deposits with the
Company, as Custodian, the Certificates. Each such Certificate is in negotiable
form (the "Custodian"), or is accompanied by a duly executed stock power or
powers in blank, bearing the Shareholder's signature.
3. Negotiation of Underwriting Agreement. The Shareholder hereby
authorizes and directs the Company to negotiate an Underwriting Agreement on the
Shareholder's behalf, subject in form and substance to the approval of the
Attorney, that shall provide for the sale of the Securities to the Underwriters
on a firm commitment basis with an underwriting discount to the Underwriters not
to exceed %. The Company hereby agrees to use its best efforts to negotiate
an Underwriting Agreement on behalf of the Shareholder meeting the conditions
specified herein. The Shareholder understands and acknowledges that the
obligations of the Underwriters pursuant to the Underwriting Agreement shall be
subject to (i) approval of certain legal matters by counsel to the Underwriters,
and (ii) various other conditions including, without limitation, certain market
conditions.
4. Expenses of Offering. In accordance with the Registration Rights
Provisions, the Company shall pay all costs and expenses associated with the
Offering, except the underwriting discount paid to the Underwriters in
connection with the sale of the Securities to the public and the fees and
expenses of any attorneys or advisors retained by any individual selling
Shareholder in connection with the Offering or the transactions contemplated
hereby. The Shareholder shall pay the Underwriter the underwriting discount, set
forth in the Underwriting Agreement, allocable to the Securities of the
Shareholder sold in the Offering and shall pay the fees and expenses of any
attorneys or advisors retained by the individual Shareholder in connection with
the Offering and the transactions contemplated hereby.
5. Authorization of the Custodian to Act. The Custodian is hereby
authorized and directed, subject to the instructions of the Attorney as provided
in Section 11 hereof, to (a) hold the
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Certificates delivered herewith in custody; (b) permit the Company's transfer
agent to examine the Certificates, together with any related stock powers,
certificates of qualification or other documents, so as to satisfy the transfer
agent that the Custodian holds the shares of Common Stock delivered herewith in
transferable form; (c) cause to be issued, against surrender of the
Certificates, new certificates (which certificates shall not bear any legends),
registered in such names and denominations as the Underwriters shall have
instructed; (d) cause to deliver such new certificates to the Underwriters at
the time and date for delivery in accordance with the Underwriting Agreement
(each such time and date of delivery of any shares of Common Stock pursuant to
the Underwriting Agreement, a "Time of Delivery") for the accounts of the
Underwriters under the Underwriting Agreement; (e) on the Shareholder's behalf,
accept and acknowledge receipt of payment by check, in accordance with the
Underwriting Agreement, of the purchase price for the Securities, net of the
underwriting discount and any taxes, fees and expenses to be paid by the
Shareholder pursuant to the Underwriting Agreement; and (f) deliver such check
to the Shareholder at the address listed below.
6. Representations, Warranties and Agreements. Without limiting
paragraph 7 in any respect, the Shareholder hereby represents and warrants as
follows:
(a) The Shareholder has, and at each Time of Delivery will
have, full right and power and all authorizations and approvals required by law
or otherwise to enter into this Custody Agreement and the Underwriting
Agreement, to carry out the terms and provisions hereof and of the Underwriting
Agreement and to make all of the representations, warranties and agreements
contained herein and in the Underwriting Agreement as of the date hereof and as
of the date such Underwriting Agreement is executed and at each Time of
Delivery.
(b) This Custody Agreement is, and the Underwriting Agreement
will be, the valid and binding agreements of the Shareholder in accordance with
their respective terms.
(c) The execution and delivery of this Custody Agreement and
the consummation of the transactions contemplated hereby and the fulfillment of
the terms hereof will not conflict with or result in the breach of any of the
terms, provisions, or conditions of, or constitute a default under, any note,
indenture, mortgage, deed or declaration of trust, agreement, or other
instrument, if any, to which the Shareholder is a party or by which Shareholder
is bound, or any existing law, order, rule, regulation, writ, injunction,
judgment or decree of any government, governmental instrumentality, agency or
body, arbitration tribunal or court, domestic or foreign, having jurisdiction
over the Shareholder or the Shareholder's property.
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(d) When the Securities are accepted for payment by the
Underwriters, and upon payment of the purchase price therefor, the Underwriters
will acquire good, marketable and unencumbered title to the Securities, free and
clear of all liens, restrictions, charges, encumbrances and adverse claims.
(e) The Shareholder will not directly or indirectly sell any
shares of Common Stock prior to the Offering (other than the Securities to the
Underwriters in accordance with the Underwriting Agreement).
(f) The Shareholder is not directly or indirectly affiliated
or associated with any member of the National Association of Securities Dealers,
Inc. (whether by means of employment, family relationship, shareholdings or
otherwise).
(g) Except as set forth below, since May 1, 1994: (i) the
Shareholder has not, and no member of Shareholder's immediate family has,
entered into any transaction or series of transactions with the Company or any
of its subsidiaries involving an amount in excess of $60,000; (ii) the
Shareholder has not, and no member of Shareholder's immediate family,
corporation (other than the Company) or partnership of which Shareholder or
members of Shareholder's immediate family are executive officers, or own more
than 10 percent of any class of equity securities or partnership interests has,
become indebted to the Company for an amount in excess of $60,000; and (iii) the
Shareholder has not served as an executive officer of, or owned, directly or
indirectly, in excess of 10 percent equity interest in, any firm, corporation or
other business entity (A) that has made or proposes to make during the coming
fiscal year payments to the Company or its subsidiaries in excess of $_____
million; (B) to which the Company or its subsidiaries was indebted for an amount
in excess of $__________ million; or (C) to which the Company made, or proposes
to make during the coming fiscal year, payments in excess of $__________
million. (Attach a sheet, if necessary)
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The foregoing representations, warranties and agreements, together with
any information provided in response to subparagraph (g) above, are made, or
provided, for the benefit of the Attorney, the Company, the Underwriters and
their respective representatives, agents and assigns and may be relied upon by
such persons or entities. The Shareholder understands and agrees
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that (i) any information provided in response to subparagraph (g) above may be
used by the Company in the preparation of the Final Prospectus, and (ii) certain
of the representations and warranties included in this Section 6 shall be
included in the Underwriting Agreement and made by the Attorney on behalf of the
Shareholder. In the event any such information, representation or warranty is
untrue or incorrect in any material respect, the Shareholder shall be obligated,
pursuant to the Underwriting Agreement, to indemnify each of the Company and the
Underwriters for any losses, including attorneys' fees and expenses, that the
Company or the Underwriters may suffer as a result of such misrepresentation or
inaccuracy.
7. Certificates. (a) The Shareholder, for the benefit of the Attorney,
the Company and the Underwriters, hereby certifies that the representations and
warranties and agreements to be made by the Shareholder in the Underwriting
Agreement (in substantially the form provided to the Shareholder) will be true
and correct at and as of the date such Underwriting Agreement is executed and at
and as of each Time of Delivery;
(b) For purposes of rendering an opinion pursuant to the
Underwriting Agreement, Hunton & Williams; Neuberger, Quinn, Gielen, Rubin &
Gibber, P.A.; and Davis Polk & Wardwell (and such other counsel as may be
required to render an opinion pursuant thereto) may rely on the representations
and warranties of the Shareholder set forth herein and in the Underwriting
Agreement as if said representations and warranties had been set forth in a
separate certificate directed to said counsel at and as of each Time of
Delivery; and
(c) For purposes of delivering any certificate on behalf of
the Shareholder which may be required in connection with the delivery of the
Shareholder's securities pursuant to the Underwriting Agreement, the Attorney
may rely on the representations and warranties of the Shareholder set forth
herein and in the Underwriting Agreement as if said representations and
warranties had been set forth in a separate certificate directed to the Attorney
at and as of each Time of Delivery.
8. Offering Not Conducted. If the Underwriting Agreement is not entered
into for any reason, or if the Securities are not accepted by the Underwriters
against payment therefor in accordance with the provisions of the Underwriting
Agreement or if the Underwriting Agreement is otherwise terminated, the
Custodian, after all obligations of the Shareholder under this Agreement and the
Underwriting Agreement, for expenses or otherwise, have been fulfilled, shall
promptly cause to be delivered to the Shareholder the Certificates delivered by
the Shareholder hereunder, together with all stock powers and other
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documents delivered to the Custodian in connection with such stock certificates.
9. Dividend and Voting Rights. Until the Securities have been delivered
to the Underwriters against payment therefor in accordance with the Underwriting
Agreement, the Shareholder shall retain all rights of ownership with respect to
the Securities, including the right to vote and to receive any dividends and
payments due on the Securities, except the right to dispose of the Securities,
which right is subject to the terms and conditions contained in this Agreement
and, following execution of the Underwriting Agreement on behalf of the
Shareholder, the Underwriting Agreement.
10. Effect of the Company's Signature. The Company's execution of this
Agreement shall evidence its acknowledgment, as Custodian, of receipt of the
Certificates and shall constitute the acceptance by the Company of the
authorizations and duties herein contained and the agreement of the Company to
carry out and perform its duties hereunder, regardless of the capacity in which
the Company is required to exercise such duties.
11. Liability and Indemnification of the Company. The Company is
authorized to take any and all actions hereunder as it shall, in its own
discretion, determine. The Company, regardless of the capacity in which it acts
hereunder, assumes no responsibility or liability to the Shareholder or to any
other person, other than to deal with the Securities in accordance with the
provisions of this Agreement. The Shareholder agrees to indemnify and hold the
Company harmless with respect to anything done by it in good faith in connection
with any and all matters contemplated herein or by the Underwriting Agreement,
regardless of the capacity in which it acts. The Company, in its capacity as
Custodian, shall be entitled to act and rely upon any statement, request, notice
or instruction respecting this Agreement given by the Attorney.
12. Power of Attorney. (a) The Shareholder hereby irrevocably appoints
Alex Grass as such Shareholder's attorney-in-fact with full power and authority
in the name, and on behalf, of the Shareholder to do and perform the following
as fully as could the Shareholder if personally present and acting:
(i) Subject to limitations and conditions set forth
herein, to sell, assign and transfer the Securities to the Underwriters and, in
connection therewith, to agree upon the underwriting discount and the price at
which the Securities will be initially offered to the public by the Underwriters
pursuant to the Underwriting Agreement;
(ii) For the purpose of effecting such sale and
subject to Section 3 hereof, to: (A) execute and deliver on
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behalf of the Shareholder an Underwriting Agreement among the Company, the
Selling Shareholders and the Underwriters; (B) comply with all provisions of the
Underwriting Agreement, including the making of all representations, warranties
and agreements provided in the Underwriting Agreement to be made by the
Shareholder (provided that all such representations, warranties and covenants
are several and not joint); (C) execute and deliver all documents on behalf of
the Shareholder required by the Underwriting Agreement; (D) exercise all
authority given to the Shareholder by the Underwriting Agreement; and (E) agree
or covenant on behalf of the Shareholder that the Shareholder, for a period of
one hundred twenty (120) days after the date of the Final Prospectus, (1) will
not, directly or indirectly, sell any shares of Common Stock without the prior
written consent of J. P. Morgan Securities Inc., and (2) has not and will not
distribute any prospectus or other offering material for the purpose of offering
or selling the Securities or any other shares of Common Stock held by the
Shareholder;
(iii) To give such orders and instructions to the
Custodian as the Attorney may in his sole discretion determine, with respect to:
(A) the transfer on the books of the Company of the Securities in order to
effect the sale to the Underwriters (including the names in which new stock
certificates representing the Securities are to be issued and the denominations
thereof); (B) the delivery to or for the account of the Underwriters of
Certificates against receipt by the Custodian of the purchase price to be paid
therefor; and (C) the disposition of the net proceeds from the sale of the
Securities in accordance with paragraph 5 hereof;
(iv) If necessary, to endorse (in blank or otherwise)
on behalf of the Shareholder the Certificates delivered hereunder, as well as
the stock powers attached to such stock certificates; and
(v) To make, execute, acknowledge and deliver all
such other orders, receipts, notices, requests, instructions, certificates,
letters and other writings, including communications to the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc. and
the securities or Blue Sky commissions of any jurisdiction, and amendments to
the Underwriting Agreement, and in general to do all things and to take all
actions that the Attorney, in his sole discretion, may consider necessary or
proper in connection with or to carry out the aforesaid sale of Securities to
the Underwriters.
(b) This power of attorney and all authority conferred hereby
are granted and conferred subject to the interests of the Underwriter and the
Company and in consideration of those interests, and for the purpose of
completing the transactions
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contemplated herein and the Underwriting Agreement. This power of attorney and
all authority conferred hereby is coupled with an interest and shall be
irrevocable and shall not be terminated by any act of the Shareholder, or
operation of law, whether by the death, incapacity, insolvency or dissolution of
the Shareholder, or the occurrence of any other event. If the Shareholder should
die, become incapacitated or insolvent or should dissolve or if any other such
event shall occur before the delivery of the Securities to the Underwriters
pursuant to the Underwriting Agreement, the Certificates shall be delivered by
or on behalf of the Shareholder in accordance with the terms and conditions of
this Agreement and the Underwriting Agreement, and actions taken by the Attorney
pursuant to this power of attorney shall be as valid as if such death,
incapacity or other event had not occurred, regardless of whether the Custodian,
the Attorney or any of them shall have received notice thereof.
(c) The Shareholder hereby ratifies all that the Attorney
shall do by virtue of this power of attorney.
(d) The Shareholder agrees to hold the Attorney free and
harmless from any and all loss, damage or liability that he may sustain as a
result of any action taken in good faith hereunder.
13. Irrevocability. This agreement shall not be terminated by operation
of law or upon the occurrence of any event whatsoever, including the death,
incapacity or insolvency of the Shareholder (if the Shareholder is an
individual), or by the death or incapacity of any executor or trustee (if the
Shareholder is an estate or trust), or the termination of such estate or trust,
or by the dissolution or insolvency of the Shareholder (if the Shareholder is a
partnership or corporation), or by the occurrence of any other event or events,
and the obligations of the Shareholder under the Underwriting Agreement
similarly are not to be subject to termination. If any such event occurs,
whether with or without notice thereof to the Company, the Attorney or any other
person or entity, the Company shall nevertheless be authorized to deliver and
deal with the Certificates, the shares represented thereby and any stock into
which such shares are converted on the Shareholder's behalf in accordance with
the terms and provisions of this Agreement and the Underwriting Agreement as if
such event had not occurred. Notwithstanding the foregoing, if the Underwriting
Agreement shall not have been executed by all parties thereto before the close
of business on May 31, 1996, then, from and after such date, the Shareholder
shall have the power, by giving written notice to the Attorney, at the address
set forth below, to terminate this agreement, subject, however, to all lawful
action taken or performed by the Attorney pursuant to this power of attorney
before the actual receipt of such notice.
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14. Acceptance by the Custodian of this Custody Agreement by the
execution hereof shall constitute an acknowledgment by the Custodian of receipt
of the Certificates and the acceptance by the Custodian of the authorization
herein conferred and shall evidence the Custodian's agreement to carry out and
perform this Custody Agreement in accordance with its terms.
15. This Custody Agreement may be executed in any number of
counterparts, which together shall constitute one and the same instrument.
16. This Custody Agreement for all purposes shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
17. Any notice given pursuant to this Custody Agreement shall be deemed
given if in writing and delivered in person, or if given by telephone or
telegraph if subsequently confirmed in writing (i) to the Shareholder at the
address set forth below the Shareholder's signature, (ii) to the Company, at its
office, 8258 Richfood Road, Mechanicsville, Virginia 23111, and (iii) to the
Underwriters, c/o J. P. Morgan Securities Inc., 60 Wall Street, New York, New
York, 10260. The Custodian shall be entitled to act and rely upon any statement,
request or notice with respect to the Custody Agreement given to the Custodian
on behalf of the Shareholder if the same shall be made or given to the Custodian
by any of the Attorneys acting on behalf of the Shareholder.
IN WITNESS WHEREOF, the undersigned, having read and agreed to all the
terms and conditions set forth herein, has executed this Agreement as of March
___, 1996.
[Name as it appears on the Certificates]
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Signature
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(Address to which payment should be sent)
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ACKNOWLEDGMENT
On this _____ day of __________, 1996, before me appeared
___________________, the person who signed the foregoing instrument, who
acknowledged that he or she signed it on behalf of the identified corporation
with full authority to do so.
STATE OF ___________________ )
)
COUNTY OF _________________ )
Subscribed and sworn to before me this ____ day of _________________,
1996.
My commission expires: _________________.
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Notary Public
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ACCEPTED:
RICHFOOD HOLDINGS, INC.
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By: Daniel R. Schnur
Title: Senior Vice President,
Secretary and General Counsel
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