S&S DRAFT
7/01/97
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
RYKOFF-SEXTON, INC.
(Name of Issuer)
Common Stock, Par Value $.10 Per Share
(Title of Class of Securities)
783759103
(CUSIP Number)
c/o Merrill Lynch Capital Partners, Inc.
225 Liberty Street
New York, New York 10080-6123
Attention: James V. Caruso
Telephone: (212) 236-7753
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
Copy to:
Marcia L. Tu, Esq.
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, New York 10281-1323
Telephone: (212) 449-8412
June 30, 1997
(Date of Event which Requires Filing of this Statement)
========================================
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH & CO, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,078,639
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,078,639
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,078,639
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) HC, CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH GROUP, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) HC, CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH MBP INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERCHANT BANKING L.P. NO. II
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL PARTNERS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML EMPLOYEES LBO MANAGERS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH LBO PARTNERS NO. IV, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. XIII, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. XIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Cayman Islands
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH LBO PARTNERS NO. B-IV, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH CAPITAL APPRECIATION
PARTNERSHIP NO. B-XVIII, L.P.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Cayman Islands
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MLCP ASSOCIATES L.P. NO. II
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MLCP ASSOCIATES L.P. NO. IV
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML IBK POSITIONS, INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
KECALP INC.
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) CO
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1987
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1991
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
CUSIP No. 783759103
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
MERRILL LYNCH KECALP L.P. 1994
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
|_| (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 10,076,004
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 10,076,004
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 10,076,004
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares\
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 36.0%
(14) Type of Reporting Person (See Instructions) PN
<PAGE>
Item 1. Security and Issuer.
This Amendment No. 1 to Schedule 13D relates to the common stock, par
value $.10 per share (the "Issuer Common Stock"), of Rykoff-Sexton, Inc., a
Delaware corporation (the "Issuer"), and is being filed on behalf of the Filing
ML Entities to amend the Schedule 13D, filed on May 28, 1996 the "Schedule
13D". The address of the Issuer's principal executive offices is 613 Baltimore
Drive, Wilkes-Barre, Pennsylvania, 18702. Unless otherwise indicated, all
capitalized terms used but not defined herein shall have the respective meanings
set forth in the Schedule 13D.
Item 2. Identity and Background.
Item 2 of Schedule 13D is hereby amended by replacing Appendix B
referred to therein with the amended Schedule B attached hereto.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by deleting the last
paragraph thereof and substituting therefor the following:
The Issuer entered into an Agreement and Plan of Merger dated as of
June 30, 1997 (the "JPFI Merger Agreement") with JP Foodservice, Inc., a
Delaware corporation ("JPFI"), and Hudson Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of JPFI ("Hudson"), pursuant to which
the Issuer is to be merged (the "JPFI Merger") with and into Hudson. Upon
consummation of the JPFI Merger in accordance with the terms and conditions of
the JPFI Merger Agreement, each share of Issuer Common Stock will be converted
into the right to receive 0.84 shares of common stock, par value $.01 per share,
of JPFI.
A copy of the JPFI Merger Agreement is attached hereto as Exhibit F and
is hereby incorporated herein by reference.
In connection with the JPFI Merger, as more fully described in Item 6
below, the ML Entities have entered into a Support Agreement dated June 30, 1997
(the "Support Agreement") pursuant to which the ML Entities have agreed, among
other things, to vote all shares of Issuer Common Stock held by them for
approval and adoption of the JPFI Merger Agreement and the JPFI Merger at the
meeting of the stockholders of the Issuer to be called and held to consider such
adoption and approval.
Other than as set forth above, and as more fully described in Item 6
below, in each case with respect to the JPFI Merger, none of the Filing ML
Entities has formulated any plans or proposals that relate to or would result
in: (a) the acquisition by any person of additional securities of the Issuer, or
the disposition of securities of the Issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Issuer or any of its subsidiaries; (d) any change in the
present board of directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the board; (e) any material change in the present capitalization or
dividend policy of the Issuer; (f) any other material change in the Issuer's
business or corporate structure; (g) changes in the Issuer's charter or bylaws
or other actions which may impede the acquisition of control of the Issuer by
any person; (h) a class of securities of the Issuer being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934; or (j) any action similar to any of those enumerated above.
<PAGE>
Item 5. Interest in Securities of the Issuer.
Item 5 of Schedule 13D is hereby amended by deleting the first
paragraph thereof and substituting therefor the following:
The Filing ML Entities beneficially own an aggregate of 10,078,639
shares of Issuer Common Stock, representing approximately 36.0% of the total
currently outstanding.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Item 6 of Schedule 13D is hereby amended by deleting the last paragraph
thereof and substituting therefor the following:
JPFI and the ML Entities entered into the Support Agreement dated as of
June 30, 1997 in connection with the execution of the JPFI Merger Agreement.
Each ML Entity has agreed, pursuant to the Support Agreement, to vote all shares
of Issuer Common Stock held by it for approval and adoption of the JPFI Merger
Agreement and the JPFI Merger at the meeting of the stockholders of the Issuer
to be called and held to consider such adoption and approval. In addition, the
ML Entities have agreed not to take certain actions during the term of the
Support Agreement relating to the disposition of the businesses or assets of the
Issuer or JPFI or their respective subsuduaries, or the acquisition of voting
securities of the Issuer or JPFI or their respective subsidiaries, or the merger
or consolidation of the Issuer or JPFI or any of their respective subsidiaries
with or into any corporation or other entity, other than the JPFI Merger or
related transactions. The Support Agreement will terminate in the event that the
JPFI Merger Agreement is terminated in accordance with its terms. A copy of the
Support Agreement is attached hereto as Exhibit G and is hereby incorporated
herein by reference.
Except for the Standstill Agreement, the Registration Rights Agreement
the Tax Agreement and the Support Agreement, none of the entities listed on
Schedule I and, to the knowledge of the Filing ML Entities, none of the persons
listed on Schedule II has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to any securities
of the Issuer, including, but not limited to, transfer or voting of any such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
<PAGE>
Item 7. Material to be Filed as Exhibits.
F. Merger Agreement dated as of June 30, 1997 among the Issuer, JPFI and
Hudson.
G. Support Agreement dated as of June 30, 1997 among the ML Investors and
JPFI.
<PAGE>
Signature
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this Statement is true,
complete and correct.
July 3, 1997 MERRILL LYNCH CAPITAL
PARTNERS, INC.
By: /s/ James V. Caruso
------------------------
Name: James V. Caruso
Title: Vice President
<PAGE>
Exhibit Index
Exhibit Description Page
- ------- ----------- ----
F. Merger Agreement dated as of June 30, 1997
among the Issuer, JPFI and Hudson.
G. Support Agreement dated as of June 30, 1997
among the ML Investors and JPFI.
<PAGE>
APPENDIX B
EXECUTIVE OFFICERS AND DIRECTORS
Appendix B of Schedule 13D is hereby amended in its entirety to read as
follows:
The names and principal occupations of each of the executive officers
and directors of Merrill Lynch & Co., Inc.; Merrill Lynch Group, Inc.; Merrill
Lynch MBP Inc.; Merrill Lynch Capital Partners, Inc.; ML IBK Positions, Inc.;
KECALP Inc.; ML Employees LBO Managers, Inc.; Merrill Lynch International
Incorporated; and Merrill Lynch International Capital Management (Guernsey) II
Limited are set forth below. Unless otherwise noted, all of these persons are
United States citizens, and have as their business address World Financial
Center, New York, NY 10281.
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch & Co., Inc.
- -------------------------
David H. Komansky Same
Chairman & CEO, Director
Thomas W. Davis Same
Exec. VP, Corporate and Institutional
Client Group
E. Stanley O'Neal Same
Exec. VP, Corporate and Institutional
Client Group
William O. Bourke1 Former Chairman and CEO, Reynolds
Director Metals Co.
Worley H. Clark2 Former Chairman and CEO, Nalco
Director Chemical Co.
Jill K. Conway3 Visiting Scholar, Massachusetts
Director Institute of Technology
- --------
1 Reynolds Metal Company
6601 West Broad St.
Richmond, VA 23230
2 W. H. Clark Associates, Ltd.
135 South LaSalle St.
Suite 1117
Chicago, IL 60603
3 Massachusetts Institute of Technology
Program on Science, Technology & Society
STS Building
E-51, Room 209 F
Cambridge, MA 02139
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Edward L. Goldberg Same
Exec. VP, Operations,
Systems & Communications
Stephen L. Hammerman Same
Vice Chairman, Director & General Counsel
Earle H. Harbison, Jr.4 Chairman, Harbison Corporation
Director
George B. Harvey5 Chairman, President & CEO, Pitney
Director Bowes Inc.
William R. Hoover6 Chairman & Former CEO, Computer
Director Sciences Corp.
Jerome P. Kenney Same
Exec. VP, Corp. Strategy & Research
Herbert M. Allison, Jr. Same
President, COO & Director
Robert P. Luciano7 Chairman, Schering-Plough
Director Corporation
- --------
4 Harbison Corporation
7700 Bonhomme Ave.
Suite 750
St. Louis, MO 63105
5 Pitney Bowes Inc.
World Headquarters
Location #65-27
One Elmcroft Road
Stamford, CT 06926-0700
6 Computer Sciences Corp.
2100 East Grand Ave.
El Segundo, CA 90245
7 Schering-Plough Corp.
P.O. Box 1000
One Giralda Farms
Madison, NJ 07940-1000
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
David K. Newbigging8 Chairman of Equitas Holdings
Director Limited
Aulana L. Peters9 Partner of Gibson, Dunn & Crutcher
Director
John J. Phelan, Jr. Senior Advisor, Boston Consulting
Director Group
Winthrop H. Smith, Jr.10 Same
Chairman, Merrill Lynch International
Exec. V.P. Int'l Private Client Group
John L. Steffens Same
Vice Chairman, U.S., Private Client Group
William L. Weiss11 Chairman Emeritus, Ameritech
Director Corporation
Joseph T. Willet Same
CFO & Senior VP
Arthur H. Zeikel12 Same
Exec. V.P., Merrill Lynch Asset Management
Group
- --------
8 Wah Kwong House, 9th Floor
10 Albert Embankment
London SEI 7SP
9 Gibson, Dunn & Crutcher
333 South Grand Ave.
47th Floor
Los Angeles, CA 90071
10 225 Liberty St.
New York, NY 10080
11 One First National Plaza
21 South Clark St.
Suite 2530C
Chicago, IL 60603-2006
12 Merrill Lynch Asset Management
800 Scudders Mill Rd.
Plainsboro, NJ 08536
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch Group, Inc.
- -------------------------
Mark B. Goldfus Senior VP & Associate General
Director & Vice President Counsel
Theresa Lang Senior VP & Treasurer
Director & President & Treasurer
Stanley Schaefer13 Director of Tax
Director & Vice President
Michael J. Castellano Director, Corporate Reporting
Director & Vice President
Allen G. Braithwaite, III,14 Same
Vice President
Richard S. Miller Same
Vice President
H. Allen White15 Director, Corporate Real Estate
Vice President and Purchasing
Merrill Lynch MBP Inc.
- ----------------------
Herbert M. Allison, Jr President, COO and Director,
Vice President & Director Merrill Lynch & Co., Inc.
Matthias B. Bowman Vice Chairman, Investment Banking
President
James V. Caruso16 Director, Partnership Analysis
Treasurer & Vice President and Management
Thomas W. Davis Exec. VP, Corporate and
Vice President & Director Institutional Client Group
Barry S. Friedberg Exec. VP
Director
- --------
13 225 Liberty St.
New York, NY 10080
14 225 Liberty St.
New York, NY 10080
15 225 Liberty St.
New York, NY 10080
16 225 Liberty St.
New York, NY 10080
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Theresa Lang Senior VP & Treasurer
Vice President & Director
Jack Levy Managing Director and Co-head, M&A
Vice President & Director
Robert F. Tully17 Vice President, Investment Banking
Treasurer & Vice President
Merrill Lynch Capital Partners, Inc.
- ------------------------------------
Gerald S. Armstrong Partner, Stonington Partners, Inc.
Director
Daniel H. Bayly Co-head, Investment Banking
Director
Matthias B. Bowman Vice Chairman, Investment Banking
President, Director
James J. Burke, Jr.18 Managing Partner, Stonington
Director Partners, Inc.
James V. Caruso Director, Partnership Analysis and
Vice President, Treasurer Management
David M. Johnson Managing Director, Operations
Director
Robert F. End19 Partner, Stonington Partners, Inc.
Director
- --------
17 225 Liberty St.
New York, NY 10080
18 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
19 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Albert J. Fitzgibbons III20 Partner, Stonington Partners, Inc.
Director
Barry S. Friedberg Exec. VP
Director
Jerome P. Kenney Exec. VP
Director
Theresa Lang Senior VP & Treasurer
Director
Mark McAndrews CAO, Investment Banking
Director
Stephen M. McLean21 Partner, Stonington Partners, Inc.
Director
Ross D. McMahon22 VP, Partnership Analysis and
Vice President Management
Alexis P. Michas23 Partner and COO, Stonington
Director Partners, Inc.
Jerry G. Rubenstein24 Independent Adviser, Omni
Director Management Associates
- --------
20 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
21 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
22 225 Liberty St.
New York, NY 10080
23 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
24 123 Coulter Ave.
Ardmore, PA 19003
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Rupinder S. Sidhu25 Partner, Stonington Partners, Inc.
Director
Nathan C. Thorne Managing Director, Investment
Vice President, Director Banking
Michael von Clemm26 Chairman, Highmount Capital, Inc.
Director
Robert W. Williamson27 Senior VP & Chief Credit Officer
Director
ML IBK Positions, Inc.
- ----------------------
Matthias B. Bowman Vice Chairman, Investment Banking
President, Director
James V. Caruso28 Director, Partnership Analysis and
Vice President, Director Management
Jeffrey A. Gelfand FVP & Director, Finance &
Vice President, Director Administration
Jeffrey S. Martin Managing Director, Investment
Vice President, Director Banking
Mark McAndrews CAO, Investment Banking
Vice President, Director
Nathan C. Thorne Managing Director, Investment
Vice President Banking
Neven Viducic VP, Accounting
Treasurer
- --------
25 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
26 2 Drayson Mews
London W8 4LY, England
27 225 Liberty St.
New York, NY 10080
28 225 Liberty St.
New York, NY 10080
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
KECALP, Inc.
- ------------
Matthias B. Bowman Vice Chairman, Investment Banking
President & Director
James V. Caruso29 Director, Partnership Analysis and
Director Management
Mark B. Goldfus Senior VP & Associate General
Vice President & Director Counsel
Andrew J. Melnick Director, Global Fundamental
Vice President & Director Equity Research
John L. Steffens Vice Chairman, U.S. Private Client
Chairman & Director Group
Daniel G. Tully Managing Director, Equity Capital
Director Markets
Patrick J. Walsh Senior VP & Director, Human
Vice President & Director Resources
ML Employees LBO Managers, Inc.
- -------------------------------
Kevin K. Albert Managing Director, Private Equity
Director Group, Investment Banking
Daniel H. Bayly Co-head, Investment Banking
Director
Matthias B. Bowman Vice Chairman, Investment Banking
President, Director
James V. Caruso30 Director, Partnership Analysis and
Vice President, Treasurer, Director Management
Alfred F. Hurley, Jr. Managing Director, Corporate
Director Banking
Jeffrey M. Peek Director, Research
Vice President, Director
Nathan C. Thorne Managing Director, Investment
Vice President Banking
- --------
29 225 Liberty St.
New York, NY 10080
30 225 Liberty St.
New York, NY 10080
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch International Incorporated
- ----------------------------------------
Winthrop H. Smith, Jr.31 Same, Exec. VP, International
Chairman, Director Private Client Group
Michael J.P. Marks32 Co-head, Global Equities, Merrill
Deputy Chairman, Director Lynch International
Donald N. Gershuny General Counsel, Private Client
Senior Vice President, Director
Carlos M. Morales Senior VP & General Counsel,
Senior Vice President, Director Corporate & Institutional Client
Ronald J. Strauss FVP, Merrill Lynch International
Senior Vice President and COO, Director
Gregory E. Andrews Senior Finance Officer, Private
Senior Vice President & CFO Client Group
Anthony Vanadia Same
Vice President & Treasurer
Malcolm B. Binks Same
Senior Vice President
Brian C. Henderson Same
Senior Vice President
Merrill Lynch International Capital
Management (Guernsey) II Ltd.
- -----------------------------------
James V. Caruso33 Director, Partnership Analysis and
Director Management
- --------
31 225 Liberty St.
New York, NY 10080
32 P.O. Box 293
20 Farringdon Road
London EC1M 3NH, England
33 225 Liberty St.
New York, NY 10080
<PAGE>
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Roger O. Healy34 Secretary, Merrill Lynch Bank &
Director Trust Company (Cayman) Limited
Jonathan S. Nicholson35 Managing Director, Merrill Lynch
Director Bank & Trust Company (Cayman)
Limited
- --------
34 Bank of Butterfield Intl. (Cayman)
PO Box 1164G
Grand Cayman, Cayman Islands
British West Indies
35 Bank of Butterfield Intl. (Cayman)
PO Box 1164G
Grand Cayman, Cayman Islands
British West Indies
EXHIBIT F
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JP FOODSERVICE, INC.,
HUDSON ACQUISITION CORP.
AND
RYKOFF-SEXTON, INC.
DATED AS OF JUNE 30, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER............................... 3
SECTION 1.1. The Merger ................................................... 3
SECTION 1.2. Closing ...................................................... 3
SECTION 1.3. Effective Time ............................................... 3
SECTION 1.4. Effects of the Merger ........................................ 3
SECTION 1.6. Directors and Officers ....................................... 4
SECTION 1.7. Reservation of Right to Revise Transaction ................... 5
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES............ 5
SECTION 2.1. Effect on Capital Stock ...................................... 5
(a) Cancellation of Treasury Stock and JPFI-Owned Stock.... 6
(b) Conversion of RSI Common Stock ........................ 6
(c) Conversion of Merger Sub Common Stock ................. 6
(d) JPFI Common Stock ..................................... 6
(e) Options and Warrants .................................. 6
SECTION 2.2. Exchange of Certificates ..................................... 8
(a) Exchange Agent ........................................ 8
(b) Exchange Procedures ................................... 8
(c) Distributions with Respect to Unexchanged Shares ...... 9
(d) No Further Ownership Rights in RSI Common Stock ....... 9
(e) No Fractional Shares .................................. 9
(f) Termination of Exchange Fund .......................... 10
(g) No Liability .......................................... 10
(h) Investment of Exchange Fund ........................... 10
(i) Lost Certificates ..................................... 10
SECTION 2.3. Certain Adjustments .......................................... 11
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES...................... 11
SECTION 3.1. Representations and Warranties of RSI ........................ 11
(a) Organization, Standing and Corporate Power ............ 11
(b) Subsidiaries .......................................... 12
(c) Capital Structure ..................................... 12
(d) Authority; Noncontravention ........................... 13
(e) SEC Documents; Undisclosed Liabilities ................ 15
(f) Information Supplied .................................. 15
(g) Absence of Certain Changes or Events .................. 16
(h) Compliance with Applicable Laws; Litigation ........... 16
(i) Absence of Changes in Benefit Plans ................... 17
(j) ERISA Compliance ...................................... 17
(k) Taxes ................................................. 19
(l) Voting Requirements ................................... 20
(m) State Takeover Statutes; Certain Provisions of RSI
Certificate ........................................... 20
(n) Accounting Matters .................................... 21
(o) Brokers ............................................... 21
(p) Opinions of Financial Advisors ........................ 21
(q) Ownership of JPFI Common Stock ........................ 21
(r) Intellectual Property ................................. 21
(s) Certain Contracts ..................................... 22
(t) RSI Rights Agreement .................................. 22
(u) Environmental Liability ............................... 22
SECTION 3.2. Representations and Warranties of JPFI and Merger Sub . ...... 22
(a) Organization, Standing and Corporate Power ............ 23
(b) Subsidiaries .......................................... 23
(c) Capital Structure ..................................... 23
(d) Authority; Noncontravention ........................... 25
(e) SEC Documents; Undisclosed Liabilities ................ 26
(f) Information Supplied .................................. 26
(g) Absence of Certain Changes or Events .................. 27
(h) Compliance with Applicable Laws; Litigation ........... 27
(i) Absence of Changes in Benefit Plans ................... 28
(j) ERISA Compliance ...................................... 28
(k) Taxes ................................................. 30
(l) Voting Requirements ................................... 31
(m) State Takeover Statutes; Certificate of Incorporation . 31
(n) Accounting Matters .................................... 31
(o) Brokers ............................................... 31
ii
<PAGE>
(p) Opinions of Financial Advisors ........................ 31
(q) Ownership of RSI Common Stock ......................... 32
(r) Intellectual Property ................................. 32
(s) Certain Contracts ..................................... 32
(t) JPFI Rights Agreement ................................. 33
(u) Environmental Liability ............................... 33
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business .......................................... 34
(a) Conduct of Business by RSI ............................ 34
(b) Conduct of Business by JPFI ........................... 36
(c) Other Actions ......................................... 37
(d) Advice of Changes ..................................... 38
SECTION 4.2. No Solicitation or Negotiations .............................. 38
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of the Form S-4 and the Joint Proxy Statement;
Stockholders Meetings ........................................ 38
SECTION 5.2. Letters of RSI's Accountants ................................. 40
SECTION 5.3. Letters of JPFI's Accountants ................................ 40
SECTION 5.4. Access to Information; Confidentiality ....................... 40
SECTION 5.5. Best Efforts ................................................. 41
SECTION 5.6. Employment Agreements ........................................ 41
SECTION 5.7. Indemnification, Exculpation and Insurance ................... 42
SECTION 5.8. Fees and Expenses ............................................ 43
SECTION 5.9. Public Announcements ......................................... 43
SECTION 5.10. Affiliates ................................................... 43
SECTION 5.11. NYSE Listing ................................................. 44
SECTION 5.12. Tax Treatment ................................................ 44
SECTION 5.13. Pooling of Interests ......................................... 44
SECTION 5.14. Standstill Agreements; Confidentiality Agreements ............ 44
SECTION 5.15. Post-Merger Operations ....................................... 44
SECTION 5.16. Conveyance Taxes ............................................. 44
SECTION 5.17. 8 7/8% Indenture ............................................. 44
SECTION 5.18. Certain Tax Matters .......................................... 45
iii
<PAGE>
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to Effect the Merger ... 45
(a) Stockholder Approvals ................................. 45
(b) HSR Act ............................................... 45
(c) Governmental, Regulatory and Other Approvals .......... 45
(d) No Injunctions or Restraints .......................... 45
(e) Form S-4 .............................................. 46
(f) NYSE Listing .......................................... 46
(g) Tax Opinions .......................................... 46
(h) Pooling Letters ....................................... 46
SECTION 6.2. Conditions to Obligations of JPFI ............................ 46
(a) Representations and Warranties ........................ 46
(b) Performance of Obligations of RSI ..................... 47
(c) No Material Adverse Change ............................ 47
(d) RSI Rights Agreement .................................. 47
SECTION 6.3. Conditions to Obligations of RSI ............................. 47
(a) Representations and Warranties ........................ 47
(b) Performance of Obligations of JPFI . .................. 47
(c) No Material Adverse Change ............................ 47
(d) JPFI Rights Agreement ................................. 47
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination .................................................. 47
SECTION 7.2. Effect of Termination ........................................ 49
SECTION 7.3. Amendment .................................................... 49
SECTION 7.4. Extension; Waiver ............................................ 49
SECTION 7.5. Termination Expenses ......................................... 49
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and Warranties ................ 50
SECTION 8.2. Notices ...................................................... 50
SECTION 8.3. Definitions .................................................. 51
iv
<PAGE>
SECTION 8.4. Interpretation ............................................... 52
SECTION 8.5. Counterparts ................................................. 52
SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries ............... 52
SECTION 8.7. Governing Law ................................................ 52
SECTION 8.8. Assignment ................................................... 53
SECTION 8.9. Consent to Jurisdiction ...................................... 53
SECTION 8.10. Headings, Etc ................................................ 53
SECTION 8.11. Severability ................................................. 53
Exhibit D Form of Affiliate Letter to be signed by JPFI Affiliates...... 1
Exhibit E Form of Affiliate Letter to be signed by RSI Affiliates....... 2
Exhibit F Form of Amendment to Amended and Restated
By-Laws of JPFI............................................... 6
v
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of June 30, 1997, among
JP FOODSERVICE, INC., a Delaware corporation ("JPFI"), HUDSON ACQUISITION CORP.
("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of JPFI,
and RYKOFF-SEXTON, INC., a Delaware corporation ("RSI").
WHEREAS, the respective Boards of Directors of JPFI, Merger
Sub and RSI have each approved the merger of RSI with and into Merger Sub (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, par value
$.10 per share, of RSI ("RSI Common Stock", which reference shall be deemed to
include the associated RSI Rights (as defined in Section 3.1(c) attached
thereto), other than shares owned by JPFI or RSI, will be converted into the
right to receive the Merger Consideration (as defined in Section 1.7); and
WHEREAS, the respective Boards of Directors of JPFI, Merger
Sub and RSI have each determined that the Merger and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals and are in the best interests of their respective
stockholders; and
WHEREAS, as a condition to, and on the date immediately
following, the execution of this Agreement, JPFI and RSI will enter into a stock
option agreement (the "RSI Option Agreement") attached hereto as Exhibit A and a
stock option agreement (the "JPFI Option Agreement" and, together with the RSI
Option Agreement, the "Option Agreements") attached hereto as Exhibit B; and
WHEREAS, for federal income tax purposes, it is intended that
the Merger will qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for financial accounting purposes, it is intended
that the Merger will be accounted for as a pooling of interests transaction
under United States generally accepted accounting principles ("GAAP"); and
WHEREAS, as a condition to, and immediately following, the
execution of this Agreement, JPFI and certain stockholders of RSI will enter
into, and RSI will execute an acknowledgment to, a support agreement (the
"Support Agreement") attached hereto as Exhibit C; and
WHEREAS, JPFI and RSI desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
<PAGE>
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), RSI shall be merged with and into Merger
Sub at the Effective Time (as defined in Section 1.3). Following the Effective
Time, the separate corporate existence of RSI shall cease and Merger Sub shall
be the surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of RSI in accordance with the DGCL.
SECTION 1.2. Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m., New York City time, on a date to be
specified by the parties (the "Closing Date"), which shall be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Article VI, unless another time or date is agreed to by the parties hereto. The
Closing will be held at such location in the City of New York as is agreed to by
the parties hereto.
SECTION 1.3. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall cause
the Merger to be consummated by filing a certificate of merger or other
appropriate documents (in any such case, the "Certificate of Merger") executed
in accordance with the relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with the Secretary of
State of Delaware, or at such subsequent date or time as JPFI and RSI shall
agree and specify in the Certificate of Merger (the time the Merger becomes
effective being hereinafter referred to as the "Effective Time").
SECTION 1.4. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 1.5. Certificate of Incorporation and By-laws of the
Surviving Corporation and JPFI.
(a) At the Effective Time, the Certificate of Incorporation
and the by-laws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation and by-laws of the Surviving
Corporation, in each case until thereafter amended in accordance with applicable
law; provided, however, that Article First of the Certificate of Incorporation
of the Surviving Corporation shall be amended to read as follows:
The name of the Corporation (which is hereinafter referred to
as the "Corporation") is Rykoff-Sexton, Inc.
(b) At the Effective Time, the by-laws of JPFI shall be
amended as set forth
2
<PAGE>
in Exhibit F and, as so amended, such by-laws shall be the by-laws of JPFI until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.6. Directors and Officers.
(a) As of the Effective Time, James L. Miller shall be
Chairman and Chief Executive Officer of JPFI and Mark Van Stekelenburg shall be
Vice Chairman and President of JPFI and, subject to Section 1.6(b), shall be
nominated for election to the class of directors of the JPFI Board of Directors
whose terms shall expire in 1998.
(b) Prior to the Effective Time, JPFI shall (i) increase the
number of members of the Board of Directors of JPFI to 17; (ii) take such action
as may be necessary such that the Board of Directors of JPFI, immediately
following the Effective Time, is comprised of (A) nine individuals, incuding
each of the incumbent members of the JPFI Board of Directors (or their
replacements), no fewer than five of whom shall be outside directors, as
selected by JPFI prior to the Effective Time, plus (B) seven individuals, no
fewer than four of whom shall be outside directors, two of whom shall be
individuals designated by Merrill Lynch Capital Partners, Inc., one of whom
shall be Mark Van Stekelenburg, and four of whom shall be current incumbents of
the RSI Board of Directors who are not employees of RSI or its subsidiaries or
affiliated with Merrill Lynch Capital Partners Inc. to be selected by RSI prior
to the Effective Time, and (C) one additional person to be designated by the
Chairman of JPFI following the Merger; provided that no person shall be deemed
not to be an outside director for purposes of this Section 1.6(b) solely because
such person is or has been an ML Director (as defined in Section 3.1(d)); and
(iii) take such action as may be necessary such that two of the three classes of
the JPFI Board of Directors shall be comprised of six directors each, three of
whom shall be incumbent directors of the JPFI Board of Directors pursuant to
clause (ii)(A) of this Section 1.6(b) and three of whom shall be designated as
directors by RSI pursuant to clause (ii)(B) of this Section 1.6(b), and the
third class of the JPFI Board of Directors shall be comprised of five directors,
three of whom shall be incumbent directors of the JPFI Board of Directors
pursuant to clause (ii)(A) of this Section 1.6(b), one of whom shall be
designated as a director by RSI pursuant to clause (ii)(B) of this Section
1.6(b) and one of whom shall be designated as a director by the Chairman of JPFI
pursuant to clause (ii)(C) of this Section 1.6(b). The two directors who shall
be designated by Merrill Lynch Capital Partners, Inc. shall be appointed, one
each, to the class of directors whose terms expire in 1999 and 2000,
respectively. Of the four directors to be selected by RSI pursuant to clause
(ii)(B) of the first sentence of this Section 1.6(b), James I. Maslon shall be
appointed to the class of directors whose terms expire in 1998, and Bernard
Sweet shall be appointed to the class of directors whose terms expire in 1999.
(c) As of the Effective Time, the JPFI Board of Directors
shall initially have three committees, as follows: an audit committee, a
compensation committee and a nominating committee. Each committee will be
comprised of four directors, two of whom shall be designated by JPFI, one of
whom shall be designated by RSI and one of whom shall be designated by mutual
agreement of JPFI and RSI. The initial chairman of each of the of the audit
committee, the compensation committee and the nominating committee shall be,
until such
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chairman's replacement is duly designated by the JPFI Board of Directors, the
JPFI director who is currently the incumbent chairman of such committee;
provided, however, that in the event any of such chairs becomes vacant for any
reason prior to the Effective Time, the chairman shall be the person thereafter
designated by the JPFI Board of Directors pursuant to the Certificate of
Incorporation and By-Laws of JPFI. One member of the nominating committee of the
JPFI Board of Directors (and of an executive committee thereof, if such a
committee is established) shall be designated by Merrill Lynch Capital Partners,
Inc. as RSI's designee thereon.
(d) Except as set forth in Section 1.6(a), the directors and
officers of Merger Sub immediately prior to the Effective Time shall be the
initial directors and officers of the Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and By-Laws of the Surviving
Corporation.
(e) It is currently contemplated that the first three
vacancies on the JPFI Board of Directors to occur following the Effective Time
shall not be filled, but that in each case the number of directors shall be
reduced, so that the total number of directors constituting the JPFI Board of
Directors shall thereafter be 14.
SECTION 1.7. Reservation of Right to Revise Transaction. If
each of RSI, Merger Sub and JPFI agree, the parties hereto, prior to the receipt
of the RSI Stockholder Approval and the JPFI Stockholder Approval (each as
defined herein), may change the method of effecting the business combination
between JPFI and RSI, and each party shall cooperate in such efforts, including
to provide for (a) a merger of RSI with and into JPFI, or (b) mergers (to occur
substantially simultaneously) of separate subsidiaries of a Delaware corporation
jointly formed by JPFI and RSI for such purpose into each of JPFI and RSI;
provided, however, that no such change shall (i) alter or change the amount or
kind of consideration to be issued to holders of RSI Common Stock as provided
for in this Agreement (the "Merger Consideration"), other than, in the case of
clause (b) above, the identity of the issuer thereof, (ii) adversely affect the
proposed accounting treatment for the Merger or the tax treatment to JPFI, RSI
or their respective stockholders as a result of receiving the Merger
Consideration, or (iii) materially delay receipt of any approval referred to in
Section 6.1(c) or the consummation of the transactions contemplated by this
Agreement.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
SECTION 2.1. Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of Merger Sub,
RSI or the holder of any shares of the following securities:
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(a) Cancellation of Treasury Stock and JPFI-Owned Stock. Each
share of RSI Common Stock that is owned by RSI, Merger Sub or JPFI shall
automatically be cancelled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(b) Conversion of RSI Common Stock. Subject to Section 2.2(e),
each issued and outstanding share of RSI Common Stock (other than shares to be
cancelled in accordance with Section 2.1(a)) shall be converted into the right
to receive 0.84 (the "Exchange Ratio") validly issued, fully paid and
nonassessable shares of common stock, par value $.01 per share ("JPFI Common
Stock"), of JPFI. As of the Effective Time, all such shares of RSI Common Stock
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares of RSI Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration and any cash in lieu of
fractional shares of JPFI Common Stock to be issued or paid in consideration
therefor upon surrender of such certificate in accordance with Section 2.2,
without interest.
(c) Conversion of Merger Sub Common Stock. Each share of
common stock, par value $0.10 per share, of Merger Sub ("Merger Sub Common
Stock") issued and outstanding immediately prior to the Effective Time shall
remain outstanding as a validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation.
(d) JPFI Common Stock. At and after the Effective Time, each
share of JPFI Common Stock issued and outstanding immediately prior to the
Closing Date shall remain an issued and outstanding share of common stock of
JPFI and shall not be affected by the Merger.
(e) Options and Warrants.
(i) RSI will take all action necessary such that, at
the Effective Time, each option granted by RSI to purchase shares of
RSI Common Stock which is outstanding and exercisable immediately prior
thereto shall cease to represent a right to acquire shares of RSI
Common Stock and shall be converted into an option to purchase shares
of JPFI Common Stock in an amount and at an exercise price determined
as provided below (and otherwise, in the case of options, subject to
the terms of the RSI Stock Plans (as defined in Section 3.1(c)) and the
agreements evidencing grants thereunder) (the "Assumed Options"):
(1) The number of shares of JPFI Common
Stock to be subject to the new option shall be equal to the
product of the number of shares of RSI Common Stock subject to
the original option and the Exchange Ratio, provided that any
fractional shares of JPFI Common Stock resulting from such
multiplication shall be rounded to the nearest whole share;
and
(2) The exercise price per share of JPFI
Common Stock under the new option shall be equal to the
exercise price per share of RSI Common
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Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded to the
nearest whole cent.
(ii) The adjustment provided herein with respect to
any options that are "incentive stock options" (as defined in Section
422 of the Code) shall be and is intended to be effected in a manner
that is consistent with Section 424(a) of the Code. The duration and
other terms of the new options shall be the same as the original
options except that all references to RSI shall be deemed to be
references to JPFI.
(iii) At the Effective Time, the warrants, dated May
17, 1996, between RSI and each of Teachers Insurance and Annuity
Association of America, the Nippon Credit Bank, Ltd. and Dresdner Bank
AG (each, an "Assumed Warrant") shall be assumed by JPFI and shall
constitute a warrant to acquire, otherwise on the same terms and
conditions as were applicable under such Assumed Warrant, a number of
shares of JPFI Common Stock equal to the number of JPFI Common Shares
that a holder of such Assumed Warrant would have received in the Merger
if such holder had exercised such Assumed Warrant for shares of RSI
Common Stock immediately prior to the Effective Time, at a price per
share equal to the aggregate exercise price for the shares of RSI
Common Stock subject thereto divided by the number of JPFI Common
Shares that a holder of such Assumed Warrant would have received in the
Merger if such holder had exercised such Assumed Warrant for shares of
RSI Common Stock immediately prior to the Effective Time.
(iv) As soon as practicable following the Effective
Time, JPFI shall deliver, upon due surrender of the Assumed Options and
Assumed Warrants, to holders of Assumed Options and Assumed Warrants
appropriate option and warrant agreements representing the right to
acquire JPFI Common Stock on the same terms and conditions as contained
in the Assumed Options and Assumed Warrants (except as otherwise set
forth in this Section 2.1(e)). Except as expressly contemplated herein,
JPFI shall comply with the terms of the RSI Stock Plans as they apply
to the Assumed Options. JPFI shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of JPFI Common
Stock for delivery upon exercise of the Assumed Options and Assumed
Warrants in accordance with this Section 2.1(e). JPFI shall file a
registration statement on Form S-8 (or any successor form) or on
another appropriate form, effective as of, or reasonably promptly
following, the Effective Time, with respect to JPFI Common Stock
subject to the Assumed Options and shall use commercially reasonable
efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as the
Assumed Options remain outstanding and exercisable. With respect to
those individuals who, subsequent to the Effective Time, will be
subject to the reporting requirements of Section 16 of the Exchange
Act, JPFI shall administer the Hudston Stock Plans, where applicable,
in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act.
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SECTION 2.2. Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, JPFI shall enter
into an agreement with such bank or trust company as may be designated by JPFI
and reasonably satisfactory to RSI (the "Exchange Agent") which shall provide
that JPFI shall deposit with the Exchange Agent as of the Effective Time, for
the benefit of the holders of shares of RSI Common Stock, for exchange in
accordance with this Article II, through the Exchange Agent, certificates
representing the shares of JPFI Common Stock (such shares of JPFI Common Stock,
together with any dividends or distributions with respect thereto with a record
date after the Effective Time, any Excess Shares (as defined in Section 2.2(e))
and any cash (including cash proceeds from the sale of the Excess Shares)
payable in lieu of any fractional shares of JPFI Common Stock being hereinafter
referred to as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange
for outstanding shares of RSI Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of RSI Common Stock (the "Certificates") whose
shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.1, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent, and shall be
in such form and have such other provisions as JPFI and RSI may reasonably
specify) and (ii) instructions for use in surrendering the Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of JPFI
Common Stock which such holder has the right to receive pursuant to the
provisions of this Article II, certain dividends or other distributions in
accordance with Section 2.2(c) and cash in lieu of any fractional share of JPFI
Common Stock in accordance with Section 2.2(e), and the Certificate so
surrendered shall forthwith be cancelled. Notwithstanding anything to the
contrary contained herein, no certificate representing JPFI Common Stock or cash
in lieu of a fractional share interest shall be delivered to a person who is an
affiliate of RSI for purposes of qualifying the Merger for pooling of interests
accounting treatment under Opinion 16 of the Accounting Principles Board and
applicable Securities and Exchange Commission ("SEC") rules and regulations,
unless such person has executed and delivered an agreement in the form of
Exhibit E hereto. In the event of a surrender of a Certificate representing
shares of RSI Common Stock which are not registered in the transfer records of
RSI under the name of the person surrendering such Certificate, a certificate
representing the proper number of shares of JPFI Common Stock may be issued to a
person other than the person in whose name the Certificate so surrendered is
registered if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such issuance shall pay any
transfer or other taxes required by reason of the issuance of shares of JPFI
Common Stock to a person other than the registered holder of such Certificate or
establish to the satisfaction of JPFI that such tax has been paid or is not
applicable. Until sur-
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rendered as contemplated by this Section 2.2, each Certificate shall be deemed
at any time after the Effective Time to represent only the right to receive upon
such surrender the Merger Consideration which the holder thereof has the right
to receive in respect of such Certificate pursuant to the provisions of this
Article II, certain dividends or other distributions in accordance with Section
2.2(c) and cash in lieu of any fractional share of JPFI Common Stock in
accordance with Section 2.2(e). No interest shall be paid or will accrue on any
cash payable to holders of Certificates pursuant to the provisions of this
Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to JPFI Common Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of JPFI Common Stock represented thereby,
and, in the case of Certificates representing RSI Common Stock, no cash payment
in lieu of fractional shares shall be paid to any such holder pursuant to
Section 2.2(e), and all such dividends, other distributions and cash in lieu of
fractional shares of JPFI Common Stock shall be paid by JPFI to the Exchange
Agent and shall be included in the Exchange Fund, in each case until the
surrender of such Certificate in accordance with this Article II. Subject to the
effect of applicable escheat or similar laws, following surrender of any such
Certificate there shall be paid to the holder of the certificate representing
whole shares of JPFI Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of JPFI Common Stock and, in the case of
Certificates representing RSI Common Stock, the amount of any cash payable in
lieu of a fractional share of JPFI Common Stock to which such holder is entitled
pursuant to Section 2.2(e) and (ii) at the appropriate payment date, the amount
of dividends or other distributions with a record date after the Effective Time
and with a payment date subsequent to such surrender payable with respect to
such whole shares of JPFI Common Stock.
(d) No Further Ownership Rights in RSI Common Stock. All
shares of JPFI Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Article II (including any cash
paid pursuant to this Article II) shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the shares of RSI Common Stock
theretofore represented by such Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by RSI on such shares of RSI Common Stock which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of RSI Common
Stock which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to JPFI, the Surviving
Corporation or the Exchange Agent for any reason, they shall be cancelled and
exchanged as provided in this Article II, except as otherwise provided by law.
(e) No Fractional Shares.
(i) Nothstanding anything to the contrary contained
herein, no cer-
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tificates or scrip representing fractional shares of JPFI Common Stock
shall be issued upon the surrender for exchange of Certificates, no
dividend or distribution of JPFI shall relate to such fractional share
interests and such fractional share interests will not entitle the
owner thereof to vote or to any rights of a stockholder of JPFI. In
lieu of the issuance of such fractional shares, JPFI shall pay each
former holder of RSI Common Stock an amount in cash equal to the
product obtained by multiplying (A) the fractional share interest to
which such former holder (after taking into account all shares of RSI
Common Stock held at the Effective Time by such holder) would otherwise
be entitled by (B) the average of the closing prices of the JPFI Common
Stock as reported on the NYSE Composite Reporting Tape (as reported in
The Wall Street Journal, or, if not reported therein, any other
authoritative source) during the ten trading days preceding the fifth
trading day prior to the Closing Date (such average, the "Average JPFI
Price").
(ii) As soon as practicable after the determination
of the amount of cash, if any, to be paid to holders of Certificates
formerly representing RSI Common Stock with respect to any fractional
share interests, the Exchange Agent shall make available such amounts
to such holders of Certificates formerly representing RSI Common Stock
subject to and in accordance with the terms of Section 2.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to JPFI, upon demand, and any
holders of the Certificates who have not theretofore complied with this Article
II shall thereafter look only to JPFI for payment of their claim for Merger
Consideration, any dividends or distributions with respect to JPFI Common Stock
and any cash in lieu of fractional shares of JPFI Common Stock.
(g) No Liability. None of JPFI, RSI, Merger Sub, the Surviving
Corporation or the Exchange Agent shall be liable to any person in respect of
any shares of JPFI Common Stock, any dividends or distributions with respect
thereto, any cash in lieu of fractional shares of JPFI Common Stock or any cash
from the Exchange Fund, in each case delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law.
(h) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by JPFI, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to JPFI.
(i) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration and, if applicable, any unpaid dividends
and distributions on shares of JPFI Common Stock deliverable in respect thereof
and any cash in lieu of fractional shares, in each
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case pursuant to this Agreement.
SECTION 2.3. Certain Adjustments. If between the date hereof
and the Effective Time, the outstanding shares of RSI Common Stock or of JPFI
Common Stock shall be changed into a different number of shares by reason of any
reclassification, recapitalization, split-up, combination or exchange of shares,
or any dividend payable in stock or other securities shall be declared thereon
with a record date within such period, the Exchange Ratio shall be adjusted
accordingly to provide to the holders of RSI Common Stock the same economic
effect as contemplated by this Agreement prior to such reclassification,
recapitalization, split-up, combination, exchange or dividend.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of RSI. Except as
disclosed in the Disclosure Schedule delivered by RSI to JPFI prior to the
execution of this Agreement (the "RSI Disclosure Schedule") and making reference
to the particular subsection of this Agreement to which exception is being
taken, RSI represents and warrants to JPFI as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of RSI and its subsidiaries (as defined in
Section 8.3) is a corporation or other legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdiction in
which it is organized and has the requisite corporate or other power,
as the case may be, and authority to carry on its business as now being
conducted, except, as to subsidiaries, for those jurisdictions where
the failure to be so organized, existing or in good standing
individually or in the aggregate would not have a material adverse
effect (as defined in Section 8.3) on RSI. Each of RSI and its
subsidiaries is duly qualified or licensed to do business and is in
good standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its business or
the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a material
adverse effect on RSI.
(ii) RSI has delivered to JPFI prior to the execution
of this Agreement complete and correct copies of any amendments to its
certificate of incorporation (the "RSI Certificate") and by-laws not
filed as of the date hereof with the RSI Filed SEC Documents (as
defined in Section 3.1(g)).
(iii) In all material respects, the minute books of
RSI and its
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subsidiaries contain accurate records of all meetings and accurately
reflect all other actions taken by the stockholders, the Board of
Directors and all committees of the Board of Directors of RSI (or, as
the case may be, each of its subsidiaries) since January 1, 1995.
(b) Subsidiaries. Exhibit 21 to RSI's Annual Report on Form
10- K for the fiscal year ended April 27, 1996 includes all the subsidiaries of
RSI which as of the date of this Agreement are Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the SEC). All the outstanding shares
of capital stock of, or other equity interests in, each such Significant
Subsidiary have been validly issued and are fully paid and nonassessable and are
owned directly or indirectly by RSI, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens") and free of any other restriction (including
any restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests), other than Liens and restrictions imposed
by RSI's debt agreements included as exhibits to the RSI Filed SEC Documents.
(c) Capital Structure. The authorized capital stock of RSI
consists of 40,000,000 shares of RSI Common Stock and 10,000,000 shares of
preferred stock, par value $.10 per share ("RSI Preferred Stock"). At the close
of business on June 25, 1997: (i) 27,969,503 shares of RSI Common Stock were
issued and outstanding; (ii) 271,020 shares of RSI Common Stock were held by RSI
in its treasury; (iii) no shares of RSI Preferred Stock were issued and
outstanding; (iv) 1,479,113 shares of RSI Common Stock were reserved for
issuance pursuant to all stock option, restricted stock or other stock-based
compensation, benefits or savings plans, agreements or arrangements in which
current or former employees or directors of RSI or its subsidiaries participate
as of the date hereof (including, without limitation, the 1980 Stock Option
Plan, the 1988 Stock Option and Compensation Plan, the RSI 1989 Director Stock
Option Plan, the RSI 1993 Director Stock Option Plan, the 1995 Key Employees
Stock Option and Compensation Plan, the RSI Convertible Award Plan (Officer and
Key Employee Edition), the RSI Convertible Award Plan (Director Edition), the
Amended and Restated Management Stock Option Plan of WS Holdings Corporation,
the Amended and Restated US Foodservice Inc. 1992 Stock Option Plan and the
Amended and Restated US Foodservice Inc. 1993 Stock Option Plan), complete and
correct copies of which, in each case as amended as of the date hereof, have
been filed as exhibits to the RSI Filed SEC Documents or delivered to JPFI (such
plans, collectively, the "RSI Stock Plans"); (v) 331,761 shares of RSI Common
Stock were reserved for issuance upon conversion of the Assumed Warrants and
(vi) 125,000 shares of RSI Preferred Stock were reserved for issuance upon
exercise of preferred stock purchase rights (the "RSI Rights") issued pursuant
to the Amended and Restated Rights Agreement, dated as of May 15, 1996, by and
between RSI and ChaseMellon Shareholder Services L.L.C., as rights agent (as
successor to Chemical Bank) (the "RSI Rights Agreement"). Section 3.1(c) of the
RSI Disclosure Schedule sets forth a complete and correct list, as of June 27,
1997, of the number of shares of RSI Common Stock subject to employee stock
options or other rights to purchase or receive RSI Common Stock granted under
the RSI Stock Plans (collectively, "RSI Employee Stock Options"), the dates of
grant and exercise prices thereof. All outstanding shares of capital stock of
RSI are, and all shares which may be issued will be, when issued, duly
authorized, val-
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idly issued, fully paid and nonassessable and not subject to preemptive rights.
Except as set forth in this Section 3.1(c) and except for changes since June 27,
1997 resulting from the issuance of shares of RSI Common Stock pursuant to the
RSI Employee Stock Options or as expressly permitted by this Agreement, (x)
there are not issued, reserved for issuance or outstanding (A) any shares of
capital stock or other voting securities of RSI, (B) any securities of RSI or
any RSI subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of RSI, (C) any warrants, calls, options or
other rights to acquire from RSI or any RSI subsidiary, and any obligation of
RSI or any RSI subsidiary to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of RSI, and (y) there are no outstanding obligations of RSI or
any RSI subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. There are no outstanding (A) securities of RSI or any
RSI subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any RSI
subsidiary, (B) warrants, calls, options or other rights to acquire from RSI or
any RSI subsidiary, and any obligation of RSI or any RSI subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any RSI subsidiary or (C)
obligations of RSI or any RSI subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of RSI subsidiaries or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities. Except
as described in Section 3.1(b), neither RSI nor any RSI subsidiary is a party to
any agreement restricting the purchase or transfer of, relating to the voting
of, requiring registration of, or granting any preemptive or, except as provided
by the terms of the RSI Employee Stock Options, antidilutive rights with respect
to, any securities of the type referred to in the two preceding sentences. Other
than the RSI subsidiaries, RSI does not directly or indirectly beneficially own
any securities or other beneficial ownership interests in any other entity
except for non-controlling investments made in the ordinary course of business
in entities which are not individually or in the aggregate material to RSI and
its subsidiaries as a whole.
(d) Authority; Noncontravention. RSI has all requisite
corporate power and authority to enter into this Agreement, each of the Option
Agreements and, subject, in the case of the Merger, to the RSI Stockholder
Approval (as defined in Section 3.1(l)), to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the Option Agreements by RSI and the consummation by RSI of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of RSI, subject, in the case of the
Merger, to the RSI Stockholder Approval. This Agreement has been, and the Option
Agreements will be, duly executed and delivered by RSI and, assuming the due
authorization, execution and delivery thereof by JPFI, constitutes (or will
constitute, as the case may be) the legal, valid and binding obligation of RSI,
enforceable against RSI in accordance with their terms. The execution and
delivery of this Agreement does not, and the execution and delivery of the
Option Agreements and the consummation of the transactions contemplated hereby
and thereby and compliance with the provisions of this Agreement and the Option
Agreements will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancella-
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tion or acceleration of any obligation or loss of a benefit under, or result in
the creation of any Lien upon any of the properties or assets of RSI or any of
its subsidiaries or (assuming the consummation of the transactions contemplated
hereby without giving effect to Section 1.7) in any restriction on the conduct
of JPFI's business or operations under, (i) the RSI Certificate or the by-laws
of RSI or the comparable organizational documents of any of its subsidiaries,
(ii) except as contemplated by Section 5.17, any loan or credit agreement, note,
bond, mortgage, indenture, trust document, lease or other agreement, instrument,
permit, concession, franchise, license or similar authorization applicable to
RSI or any of its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to RSI or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses, restrictions or Liens that
individually or in the aggregate would not (x) have a material adverse effect on
RSI or JPFI or (y) reasonably be expected to impair the ability of RSI to
perform its obligations under this Agreement and the Option Agreements. No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any nongovernmental self-regulatory agency,
commission or authority (a "Governmental Entity") is required by or with respect
to RSI or any of its subsidiaries in connection with the execution and delivery
of this Agreement or the Option Agreements by RSI or the consummation by RSI of
the transactions contemplated hereby and thereby, except for (1) the filing of a
pre-merger notification and report form by RSI under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (2) the filing
with the SEC of (A) a proxy statement relating to the RSI Stockholders Meeting
(as defined in Section 5.1(b)) (such proxy statement, together with the proxy
statement relating to the JPFI Stockholders Meeting (as defined in Section
5.1(c)), in each case as amended or supplemented from time to time, the "Joint
Proxy Statement"), and (B) such reports under Section 13(a), 13(d), 15(d) or
16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as may be required in connection with this Agreement, the Option Agreements and
the transactions contemplated hereby and thereby; (3) the filing of the
Certificate of Merger with the Secretary of State of Delaware and appropriate
documents with the relevant authorities of other states in which RSI is
qualified to do business and such filings with Governmental Entities to satisfy
the applicable requirements of state securities or "blue sky" laws; and (4) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on RSI or (y) reasonably be expected to impair the ability of RSI to
perform its obligations under this Agreement. The entry into the Support
Agreement by the Stockholders (as defined in the Support Agreement) and the
consummation of the transactions contemplated thereby has been approved by the
RSI Board of Directors in the manner contemplated by Section 3.1(a) of that
certain Standstill Agreement (the "Standstill Agreement"), dated as of May 17,
1996, by and between RSI and the ML Entities (as defined therein). The entry
into this Agreement and the consummation of the transactions contemplated hereby
has been agreed to by a majority of the ML Directors (as defined in the
Standstill Agreement) for all purposes of the Standstill Agreement as may be
relevant to effecting the transactions contemplated by this Agreement and
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the Support Agreement (including, without limitation, Section 2.2(a) thereof).
(e) SEC Documents; Undisclosed Liabilities. RSI has filed all
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) with the SEC since December 31, 1994 (the "RSI SEC
Documents"). As of their respective dates, the RSI SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such RSI
SEC Documents, and none of the RSI SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of RSI included in the RSI SEC Documents comply as to form, as of
their respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of RSI and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). RSI has not treated as restructuring charges any significant
expenses that RSI would otherwise have expensed against operating income in the
ordinary course of business. Except (i) as reflected in such financial
statements or in the notes thereto or (ii) for liabilities incurred in
connection with this Agreement, the Option Agreements or the transactions
contemplated hereby or thereby, neither RSI nor any of its subsidiaries has any
liabilities or obligations of any nature which, individually or in the
aggregate, would have a material adverse effect on RSI.
(f) Information Supplied. None of the information supplied or
to be supplied by RSI specifically for inclusion or incorporation by reference
in (i) the registration statement on Form S-4 to be filed with the SEC by JPFI
in connection with the issuance of JPFI Common Stock in the Merger (the "Form
S-4") will, at the time the Form S-4 becomes effective under the Securities Act,
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 or (ii) the Joint Proxy Statement will, at the date it is first
mailed to RSI's stockholders or at the time of the RSI Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by RSI with
respect to statements made or incorporated by reference therein based on
information supplied by JPFI specifically for inclusion or incorporation by
reference in the Joint Proxy Statement.
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(g) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement, the Option Agreements or
the transactions contemplated hereby and thereby, and except as permitted by
Section 4.1(a), since April 27, 1996, RSI and its subsidiaries have conducted
their business only in the ordinary course consistent with past practice or as
disclosed in any RSI SEC Document filed since such date and prior to the date
hereof, and there has not been (i) any material adverse change (as defined in
Section 8.3) in RSI, (ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with respect
to any of RSI's capital stock, (iii) any split, combination or reclassification
of any of RSI's capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in substitution
for shares of RSI's capital stock, except for issuances of RSI Common Stock upon
exercise or conversion of RSI Employee Stock Options, in each case awarded prior
to the date hereof in accordance with their present terms or issued pursuant to
Section 4.1(a), (iv)(A) any granting by RSI or any of its subsidiaries to any
current or former director, executive officer or other key employee of RSI or
its subsidiaries of any increase in compensation, bonus or other benefits,
except for normal increases as a result of promotions, normal increases of base
pay in the ordinary course of business or as was required under any employment
agreements in effect as of April 27, 1996 or disclosed in Section 3.1(i) of the
RSI Disclosure Schedule, (B) any granting by RSI or any of its subsidiaries to
any such current or former director, executive officer or key employee of any
increase in severance or termination pay, or (C) any entry by RSI or any of its
subsidiaries into, or any amendment of, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with any such
current or former director, executive officer or key employee, (v) except
insofar as may have been disclosed in RSI SEC Documents filed and publicly
available prior to the date of this Agreement (as amended to the date hereof,
the "RSI Filed SEC Documents") or required by a change in GAAP, any change in
accounting methods, principles or practices by RSI materially affecting its
assets, liabilities or business, (vi) except insofar as may have been disclosed
in the RSI Filed SEC Documents, any tax election that individually or in the
aggregate would have a material adverse effect on RSI or any of its tax
attributes or any settlement or compromise of any material income tax liability,
or (vii) any action taken by RSI or any of the RSI subsidiaries during the
period from April 28, 1996 through the date of this Agreement that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 4.1(a).
(h) Compliance with Applicable Laws; Litigation.
(i) RSI, its subsidiaries and employees hold all
permits, licenses, variances, exemptions, orders, registrations and
approvals of all Governmental Entities which are required for the
operation of the businesses of RSI and its subsidiaries (the "RSI
Permits"), except where the failure to have any such RSI Permits
individually or in the aggregate would not have a material adverse
effect on RSI. RSI and its subsidiaries are in compliance with the
terms of the RSI Permits and all applicable statutes, laws, ordinances,
rules and regulations, except where the failure so to comply
individually or in the aggregate would not have a material adverse
effect on RSI. As of the date of this Agreement, except as disclosed in
the RSI Filed SEC Documents, no action, demand,
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requirement or investigation by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to RSI or
any of its subsidiaries or any of their respective properties, is
pending or, to the knowledge (as defined in Section 8.3) of RSI,
threatened, other than, in each case, those the outcome of which
individually or in the aggregate would not (A) have a material adverse
effect on RSI or (B) reasonably be expected to impair the ability of
RSI to perform its obligations under this Agreement or the Option
Agreements or prevent or materially delay the consummation of any of
the transactions contemplated hereby or thereby.
(ii) Neither RSI nor any RSI subsidiary is subject to
any outstanding order, injunction or decree which has had or, insofar
as can be reasonably foreseen, individually or in the aggregate will
have, a material adverse effect on RSI.
(i) Absence of Changes in Benefit Plans. RSI has delivered to
JPFI true and complete copies of (i) all severance and employment agreements of
RSI with directors, executive officers or key employees, (ii) all severance
programs and policies of each of RSI and each RSI subsidiary, and (iii) all
plans or arrangements of RSI and each RSI subsidiary relating to its employees
which contain change in control provisions, in each case which has not been
filed as an exhibit to a RSI Filed SEC Document. Since April 27, 1996, there has
not been any adoption or amendment in any material respect by RSI or any of its
subsidiaries of any collective bargaining agreement, employment agreement,
consulting agreement, severance agreement or any material bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan, arrangement
or understanding providing benefits to any current or former employee, officer
or director of RSI or any of its wholly owned subsidiaries (collectively, the
"RSI Benefit Plans"), or any material change in any actuarial or other
assumption used to calculate funding obligations with respect to any RSI pension
plans, or any material change in the manner in which contributions to any RSI
pension plans are made or the basis on which such contributions are determined.
Since April 27, 1996, neither RSI nor any RSI subsidiary has amended any RSI
Employee Stock Options or any RSI Stock Plans to accelerate the vesting of, or
release restrictions on, awards thereunder, or to provide for such acceleration
in the event of a change in control.
(j) ERISA Compliance.
(i) With respect to the RSI Benefit Plans, no event
has occurred and, to the knowledge of RSI, there exists no condition or
set of circumstances, in connection with which RSI or any of its
subsidiaries could be subject to any liability that individually or in
the aggregate would have a material adverse effect on RSI under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
the Code or any other applicable law.
(ii) Each RSI Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any
RSI Benefit Plan that individually
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or in the aggregate would not have a material adverse effect on RSI.
RSI, its subsidiaries and all the RSI Benefit Plans have been operated,
and are, in compliance with the applicable provisions of ERISA, the
Code and all other applicable laws and the terms of all applicable
collective bargaining agreements, except for any failures to be in such
compliance that individually or in the aggregate would not have a
material adverse effect on RSI. Each RSI Benefit Plan that is intended
to be qualified under Section 401(a) or 401(k) of the Code has received
a favorable determination letter from the Internal Revenue Service
("IRS") that it is so qualified and each trust established in
connection with any RSI Benefit Plan that is intended to be exempt from
federal income taxation under Section 501(a) of the Code has received a
determination letter from the IRS that such trust is so exempt. To the
knowledge of RSI, no fact or event has occurred since the date of any
determination letter from the IRS which is reasonably likely to affect
adversely the qualified status of any such RSI Benefit Plan or the
exempt status of any such trust.
(iii) Neither RSI nor any of its subsidiaries has
incurred any unsatisfied liability under Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course). No RSI Benefit Plan has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code) whether or not waived. To the
knowledge of RSI, there are not any facts or circumstances that would
materially change the funded status of any RSI Benefit Plan that is a
"defined benefit" plan (as defined in Section 3(35) of ERISA) since the
date of the most recent actuarial report for such plan. Each RSI
Benefit Plan that is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA is set forth on Section 3.1(j)(iii) of the RSI
Disclosure Schedule.
(iv) With respect to each of the RSI Benefit Plans
(other than any multiemployer plan) that is subject to Title IV of
ERISA, the present value of accrued benefits under each such plan,
based upon the actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such plan's actuary with
respect to such plan, did not, as of its latest valuation date, exceed
the then current value of the aggregate assets of such plans allocable
to such accrued benefits in any material respect. With respect to any
RSI Benefit Plan that is a multiemployer plan, (A) neither RSI nor any
of its subsidiaries has any contingent liability under Section 4204 of
ERISA, and no circumstances exist that present a material risk that any
such plan will go into reorganization, and (B) the aggregate withdrawal
liability of RSI and its subsidiaries, computed as if a complete
withdrawal by RSI and any of its subsidiaries had occurred under each
such RSI Benefit Plan on the date hereof, would not be material.
(v) No RSI Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former employees
after retirement or other termination of service (other than coverage
mandated by applicable law or benefits, the full cost of which is borne
by the current or former employee) other than individual arrangements
the amounts of which are not material.
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(vi) RSI has previously provided to JPFI a copy of
each collective bargaining or other labor union contract applicable to
persons employed by RSI or any of its subsidiaries to which RSI or any
of its subsidiaries is a party. No collective bargaining agreement is
being negotiated or renegotiated by RSI or any of its subsidiaries. As
of the date of this Agreement, there is no labor dispute, strike or
work stoppage against RSI or any of its subsidiaries pending or, to the
knowledge of RSI, threatened which may interfere with the respective
business activities of RSI or any of its subsidiaries, except where
such dispute, strike or work stoppage individually or in the aggregate
would not have a material adverse effect on RSI. As of the date of this
Agreement, to the knowledge of RSI, none of RSI, any of its
subsidiaries or any of their respective representatives or employees
has committed any material unfair labor practice in connection with the
operation of the respective businesses of RSI or any of its
subsidiaries, and there is no material charge or complaint against RSI
or any of its subsidiaries by the National Labor Relations Board or any
comparable governmental agency pending or threatened in writing.
(vii) No employee of RSI will be entitled to any
material payment, additional benefits or any acceleration of the time
of payment or vesting of any benefits under any RSI Benefit Plan as a
result of the transactions contemplated by this Agreement (either alone
or in conjunction with any other event such as a termination of
employment), except that substantially all RSI Employee Stock Options
will vest as of the date on which RSI Stockholder Approval is obtained.
(k) Taxes.
(i) Each of RSI and its subsidiaries has filed all
material tax returns and reports required to be filed by it (taking
into account all applicable extensions) and all such returns and
reports are complete and correct in all material respects, or requests
for extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failures
to file, to be complete or correct or to have extensions granted that
remain in effect individually or in the aggregate would not have a
material adverse effect on RSI. RSI and each of its subsidiaries has
paid (or RSI has paid or caused to be paid on its behalf) all taxes (as
defined herein) shown as due on such returns, and the most recent
financial statements contained in the RSI Filed SEC Documents reflect
an adequate reserve in accordance with GAAP for all taxes payable by
RSI and its subsidiaries for all taxable periods and portions thereof
accrued through the date of such financial statements.
(ii) No deficiencies for any taxes have, to the
knowledge of RSI, been proposed, asserted or assessed against RSI or
any of its subsidiaries that are not adequately reserved for, except
for deficiencies that individually or in the aggregate would not have a
material adverse effect on RSI. The federal income tax returns of RSI
and each of its subsidiaries consolidated in such returns for tax years
through 1993 (1992 in the case of U.S. Foodservice and its
subsidiaries) have closed by virtue of the
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applicable statute of limitations.
(iii) Neither RSI nor any of its subsidiaries has
taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
(iv) As used in this Agreement, "taxes" shall include
all (x) federal, state, local or foreign income, property, sales,
excise and other taxes or similar governmental charges, including any
interest, penalties or additions with respect thereto, (y) liability
for the payment of any amounts of the type described in (x) as a result
of being a member of an affiliated, consolidated, combined or unitary
group, and (z) liability for the payment of any amounts described in
(x) or (y) as a result of being party to any tax sharing agreement or
as a result of any express or implied obligation to indemnify any other
person with respect to the payment of any amounts of the type described
in clause (x) or (y).
(l) Voting Requirements. The affirmative vote at the RSI
Stockholders Meeting (the "RSI Stockholder Approval") of the holders of a
majority of all outstanding shares of RSI Common Stock to adopt this Agreement
is the only vote of the holders of any class or series of RSI's capital stock
necessary to approve and adopt this Agreement and the transactions contemplated
hereby, including the Merger.
(m) State Takeover Statutes; Certain Provisions of RSI
Certificate. The Board of Directors of RSI has adopted a resolution or
resolutions approving this Agreement and the Option Agreements and the
transactions contemplated hereby and thereby and, assuming the accuracy of
JPFI's representation and warranty contained in Section 3.2(q), (a) such
approval constitutes approval of the Merger and the other transactions
contemplated hereby and by the Option Agreements by the RSI Board of Directors
under (i) the provisions of Section 203 of the DGCL such that Section 203 of the
DGCL does not apply to this Agreement, the Option Agreements and the
transactions contemplated hereby and thereby and (ii) Section A.2. of Article
Fourteenth of the RSI Certificate such that the 80% vote otherwise required by
Article Fourteenth does not apply to this Agreement, the Option Agreements or
the transactions contemplated hereby or thereby; and (b) for purposes of Article
Twelfth of the RSI Certificate ("Article Twelfth"), such approval constitutes
approval of this Agreement and the Option Agreements and the transactions
contemplated hereby and thereby (and the RSI Board of Directors has conclusively
determined, pursuant to Article Twelfth, that such agreements together
constitute the "memorandum of understanding" contemplated by Article Twelfth)
for purposes of Section B of Article Twelfth such that the 80% vote otherwise
required by Article Twelfth does not apply to this Agreement, the Option
Agreements or the transactions contemplated hereby or thereby. To the knowledge
of RSI, except for Section 203 of the DGCL (which has been rendered
inapplicable), no state takeover statute is applicable to the Merger or the
other transactions contemplated hereby.
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(n) Accounting Matters. To its knowledge, neither RSI nor any
of its affiliates (as such term is used in Section 5.10) has taken or agreed to
take any action (including, without limitation, in connection with any RSI Stock
Plan or any agreement thereunder) that would prevent the business combination to
be effected by the Merger from being accounted for as a "pooling of interests"
and RSI has no reason to believe that the Merger will not qualify for "pooling
of interests" accounting.
(o) Brokers. No broker, investment banker, financial advisor
or other person other than Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and Wasserstein Perella & Co., Inc. ("Wasserstein") , the fees
and expenses of which will be paid by RSI, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of RSI. RSI has furnished to JPFI true and complete copies
of all agreements under which any such fees or expenses are payable and all
indemnification and other agreements related to the engagement of the persons to
whom such fees are payable.
(p) Opinions of Financial Advisors. RSI has received the
opinions of Merrill Lynch and Wasserstein, each dated the date of this
Agreement, to the effect that, as of such date, the Exchange Ratio for the
conversion of RSI Common Stock into JPFI Common Stock is fair from a financial
point of view to holders of shares of RSI Common Stock (other than JPFI and its
affiliates), signed copies of which opinions have been delivered to JPFI, it
being understood and agreed by JPFI that such opinions are for the benefit of
the Board of Directors of RSI and may not be relied upon by JPFI, its affiliates
or any of their respective stockholders.
(q) Ownership of JPFI Common Stock. To the knowledge of RSI,
as of the date hereof (and before giving effect to the JPFI Option Agreement,
which will be entered into immediately after the execution of this Agreement),
neither RSI nor, to its knowledge without independent investigation, any of its
affiliates, (i) beneficially owns (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, or (ii) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, shares of capital stock of JPFI.
(r) Intellectual Property. RSI and its subsidiaries own or
have a valid license to use all trademarks, service marks, trade names, patents
and copyrights (including any registrations or applications for registration of
any of the foregoing) (collectively, the "RSI Intellectual Property") necessary
to carry on its business substantially as currently conducted except for such
RSI Intellectual Property the failure of which to own or validly license
individually or in the aggregate would not have a material adverse effect on
RSI. Neither RSI nor any such subsidiary has received any notice of infringement
of or conflict with, and, to RSI's knowledge, there are no infringements of or
conflicts (i) with the rights of others with respect to the use of, or (ii) by
others with respect to, any RSI Intellectual Property that individually or in
the aggregate, in either such case, would have a material adverse effect on RSI.
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(s) Certain Contracts. Except as set forth in the RSI Filed
SEC Documents, neither RSI nor any of its subsidiaries is a party to or bound by
(i) any "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC), (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
business of RSI and its subsidiaries (including, for purposes of this Section
3.1(s), JPFI and its subsidiaries, assuming the Merger has taken place), taken
as a whole, is or would be conducted, (iii) any exclusive supply or purchase
contracts or any exclusive requirements contracts or (iv) any contract or other
agreement which would prohibit or materially delay the consummation of the
Merger or any of the transactions contemplated by this Agreement (all contracts
of the type described in clauses (i) and (ii) being referred to herein as "RSI
Material Contracts"). RSI has delivered to JPFI, prior to the execution of this
Agreement, complete and correct copies of all RSI Material Contracts not filed
as exhibits to the RSI Filed SEC Documents. Each RSI Material Contract is valid
and binding on RSI (or, to the extent a RSI subsidiary is a party, such
subsidiary) and is in full force and effect, and RSI and each RSI subsidiary
have in all material respects performed all obligations required to be performed
by them to date under each RSI Material Contract, except where such
noncompliance, individually or in the aggregate, would not have a material
adverse effect on RSI. Neither RSI nor any RSI subsidiary knows of, or has
received notice of, any violation or default under (nor, to the knowledge of
RSI, does there exist any condition which with the passage of time or the giving
of notice or both would result in such a violation or default under) any RSI
Material Contract.
(t) RSI Rights Agreement. RSI has taken all action (including,
if required, redeeming all of the outstanding preferred stock purchase rights
issued pursuant to the RSI Rights Agreement or amending the RSI Rights
Agreement) so that the entering into of this Agreement, the RSI Option Agreement
and the Support Agreement, the Merger, the acquisition of shares pursuant to the
RSI Option Agreement and the other transactions contemplated hereby and thereby
do not and will not result in the grant of any rights to any person under the
RSI Rights Agreement or enable or require the RSI Rights to be exercised,
distributed or triggered.
(u) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature pending or threatened against RSI or
any of its subsidiaries seeking to impose, or that could reasonably be expected
to result in the imposition of, on RSI or any of its subsidiaries, any liability
or obligation arising under common law or under any local, state or federal
environmental statute, regulation or ordinance, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), which liability or obligation could reasonably be
expected to have a material adverse effect on RSI. To the knowledge of RSI,
there is no reasonable basis for any such proceeding, claim, action or
governmental investigation that would impose any liability or obligation that
could reasonably be expected to have a material adverse effect on RSI.
SECTION 3.2. Representations and Warranties of JPFI and Merger
Sub. Except
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as disclosed in the Disclosure Schedule delivered by JPFI and Merger Sub to RSI
prior to the execution of this Agreement (the "JPFI Disclosure Schedule") and
making reference to the particular subsection of this Agreement to which
exception is being taken, JPFI and Merger Sub jointly and severally represent
and warrant to RSI as follows:
(a) Organization, Standing and Corporate Power.
(i) Each of JPFI and its subsidiaries is a
corporation or other legal entity duly organized, validly existing and
in good standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is organized
and has the requisite corporate or other power, as the case may be, and
authority to carry on its business as now being conducted, except, as
to subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the
aggregate would not have a material adverse effect on JPFI. Each of
JPFI and its subsidiaries is duly qualified or licensed to do business
and is in good standing (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a material
adverse effect on JPFI.
(ii) JPFI has delivered to RSI prior to the execution
of this Agreement complete and correct copies of any amendments to its
certificate of incorporation (the "JPFI Certificate") and by-laws not
filed as of the date hereof with the JPFI Filed SEC Documents (as
defined in Section 3.2(g)).
(iii) In all material respects, the minute books of
JPFI and its subsidiaries contain accurate records of all meetings and
accurately reflect all other actions taken by the stockholders, the
Board of Directors and all committees of the Board of Directors of JPFI
(or, as the case may be, each of its subsidiaries) since January 1,
1995.
(b) Subsidiaries. Exhibit 21 to JPFI's Annual Report on Form
10-K for the fiscal year ended June 29, 1996 includes all the subsidiaries of
JPFI which as of the date of this Agreement are Significant Subsidiaries. All
the outstanding shares of capital stock of, or other equity interests in, each
such Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by JPFI, free and clear of
all Liens and free of any other restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests).
(c) Capital Structure. The authorized capital stock of JPFI
consists of 75,000,000 shares of JPFI Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share ("JPFI Preferred Stock"). At the close
of business on June 24, 1997: (i) 22,588,688.61 shares of JPFI Common Stock were
issued and outstanding (including shares of
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restricted JPFI Common Stock); (ii) no shares of JPFI Common Stock were held by
JPFI in its treasury; (iii) no shares of JPFI Preferred Stock were issued and
outstanding; (iv) 4,264,329 shares of JPFI Common Stock were reserved for
issuance pursuant to all stock option, restricted stock or other stock-based
compensation, benefits or savings plans, agreements or arrangements in which
current or former employees or directors of JPFI or its subsidiaries participate
as of the date hereof, including, without limitation, the JPFI 1994 Stock
Incentive Plan, the JPFI Stock Option Plan for Outside Directors and the JPFI
1994 Employee Stock Purchase Plan, complete and correct copies of which, in each
case as amended as of the date hereof, have been filed with the JPFI Filed SEC
Documents or delivered to RSI (such plans, collectively, the "JPFI Stock
Plans"); and (v) 350,000 shares of JPFI Preferred Stock were reserved for
issuance upon exercise of preferred share purchase rights issued pursuant to the
Rights Agreement, dated as of February 19, 1996, between JPFI and The Bank of
New York, as rights agent (the "JPFI Rights Agreement"). Section 3.2(c) of the
JPFI Disclosure Schedule sets forth a complete and correct list, as of June 24,
1997, of the number of shares of JPFI Common Stock subject to employee stock
options or other rights to purchase or receive JPFI Common Stock granted under
the JPFI Stock Plans (collectively, "JPFI Employee Stock Options"), the dates of
grant and exercise prices thereof. All outstanding shares of capital stock of
JPFI are, and all shares which may be issued pursuant to this Agreement or
otherwise will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. Except as set forth in this
Section 3.2(c), and except for changes since June 24, 1997 resulting from the
issuance of shares of JPFI Common Stock pursuant to the JPFI Employee Stock
Options or as expressly permitted by this Agreement, (x) there are not issued,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of JPFI, (B) any securities of JPFI or any JPFI subsidiary
convertible into or exchangeable or exercisable for shares of capital stock or
voting securities of JPFI, (C) any warrants, calls, options or other rights to
acquire from JPFI or any JPFI subsidiary, and any obligation of JPFI or any JPFI
subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of JPFI, and (y) there are no outstanding obligations of JPFI or any
JPFI subsidiary to repurchase, redeem or otherwise acquire any such securities
or to issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities. There are no outstanding (A) securities of JPFI or any JPFI
subsidiary convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any JPFI subsidiary,
(B) warrants, calls, options or other rights to acquire from JPFI or any JPFI
subsidiary, and any obligation of JPFI or any JPFI subsidiary to issue, any
capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any JPFI subsidiary or (C)
obligations of JPFI or any JPFI subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of JPFI subsidiaries or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such securities.
Neither JPFI nor any JPFI subsidiary is a party to any agreement restricting the
purchase or transfer of, relating to the voting of, requiring registration of,
or granting any preemptive or, except as provided by the terms of the JPFI
Employee Stock Options, antidilutive rights with respect to, any securities of
the type referred to in the two preceding sentences. Other than the JPFI
subsidiaries, JPFI does not directly or indirectly beneficially own any
securities or other beneficial ownership interests in any other
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entity except for non-controlling investments made in the ordinary course of
business in entities which are not individually or in the aggregate material to
JPFI and its subsidiaries as a whole.
(d) Authority; Noncontravention. Each of JPFI and Merger Sub
has all requisite corporate power and authority to enter into this Agreement,
and JPFI has all requisite corporate power and authority to enter into the
Option Agreements and the Support Agreement and, subject to the JPFI Stockholder
Approval (as defined in Section 3.2(l)), to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement by
each of JPFI and Merger Sub, and the execution and delivery of the Option
Agreements and the Support Agreement by JPFI and the consummation by JPFI and
Merger Sub of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of JPFI and Merger Sub,
subject, in the case of the Merger and the issuance of JPFI Common Stock in
connection with the Merger, to the JPFI Stockholder Approval. This Agreement has
been, and the Support Agreement and Option Agreements will be, duly executed and
delivered by JPFI (and, in the case of this Agreement, by Merger Sub) and,
assuming the due authorization, execution and delivery thereof by RSI,
constitute (or will constitute, as the case may be) the legal, valid and binding
obligation of JPFI (and, in the case of this Agreement, Merger Sub), enforceable
against JPFI (and, in the case of this Agreement, Merger Sub) in accordance with
their terms. The execution and delivery of this Agreement does not, and the
execution and delivery of the Option Agreements and the consummation of the
transactions contemplated hereby and thereby and compliance with the provisions
of this Agreement, the Support Agreement and the Option Agreements will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon any of the properties or assets of JPFI
or any of its subsidiaries or (assuming the consummation of the transactions
contemplated hereby without giving effect to Section 1.7) in any restriction on
the conduct of JPFI's business or operations under, (i) the JPFI Certificate or
the by-laws of JPFI or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, trust document, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to JPFI or
any of its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to JPFI or any of its subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses, restrictions or Liens that
individually or in the aggregate would not (x) have a material adverse effect on
JPFI or (y) reasonably be expected to impair the ability of JPFI or Merger Sub
to perform its obligations under this Agreement (and, in the case of JPFI
individually, under the Option Agreements and the Support Agreement). No
consent, approval, order or authorization of, action by, or in respect of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to JPFI or any of its subsidiaries in connection with the
execution and delivery of this Agreement by JPFI and Merger Sub, or the
execution and delivery by JPFI of the Option Agreements and the Support
Agreement, or the consummation by JPFI or Merger Sub of the transactions
contemplated hereby or thereby, except for (1) the filing of
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a pre-merger notification and report form by JPFI under the HSR Act; (2) the
filing with the SEC of (A) the Joint Proxy Statement relating to the JPFI
Stockholders Meeting, (B) the Form S-4 and (C) such reports under Section 13(a),
13(d), 15(d) or 16(a) of the Exchange Act as may be required in connection with
this Agreement and the Option Agreements and the transactions contemplated
hereby and thereby; (3) the filing of the Certificate of Merger with the
Secretary of State of Delaware and appropriate documents with the relevant
authorities of other states in which JPFI is qualified to do business and such
filings with Governmental Entities to satisfy the applicable requirements of
state securities or "blue sky" laws; (4) such filings with and approvals of the
NYSE to permit the shares of JPFI Common Stock that are to be issued in the
Merger and under the RSI Stock Plans to be listed on the NYSE; and (5) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on JPFI or (y) reasonably be expected to impair the ability of JPFI or
Merger Sub to perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities. JPFI has filed all
required registration statements, prospectuses, reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) with the SEC since December 31, 1994 (the "JPFI SEC
Documents"). As of their respective dates, the JPFI SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such JPFI SEC Documents, and none of the
JPFI SEC Documents when filed contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of JPFI included
in the JPFI SEC Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of JPFI
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments). JPFI
has not treated as restructing charges any significant expenses that JPFI would
otherwise have expensed against operating income in the ordinary course of
business. Except (i) as reflected in such financial statements or in the notes
thereto or (ii) for liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby or thereby, neither
JPFI nor any of its subsidiaries has any liabilities or obligations of any
nature which, individually or in the aggregate, would have a material adverse
effect on JPFI.
(f) Information Supplied. None of the information supplied or
to be supplied by JPFI specifically for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 becomes effective under the
Securities Act, 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 or (ii) the Joint Proxy Statement will, at the
date it
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is first mailed to JPFI's stockholders or at the time of the JPFI Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Form S-4 and the Joint Proxy Statement will comply as to form in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by JPFI with respect to statements made or
incorporated by reference therein based on information supplied by RSI
specifically for inclusion or incorporation by reference in the Form S-4 or the
Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement, the Option Agreements or
the transactions contemplated hereby or thereby, and except as permitted by
Section 4.1(b), since June 29, 1996, JPFI and its subsidiaries have conducted
their business only in the ordinary course consistent with past practice or as
disclosed in any JPFI SEC Document filed since such date and prior to the date
hereof, and there has not been (i) any material adverse change in JPFI, (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of JPFI's capital
stock, (iii) any split, combination or reclassification of any of JPFI's capital
stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of JPFI's
capital stock, except for issuances of JPFI Common Stock upon exercise or
conversion of JPFI Employee Stock Options, in each case awarded prior to the
date hereof in accordance with their present terms or issued pursuant to Section
4.1(b), (iv)(A) any granting by JPFI or any of its subsidiaries to any current
or former director, executive officer or other key employee of JPFI or its
subsidiaries of any increase in compensation, bonus or other benefits, except
for normal increases as a result of promotions, normal increases of base pay in
the ordinary course of business or as was required under any employment
agreements in effect as of June 29, 1996, (B) any granting by JPFI or any of its
subsidiaries to any such current or former director, executive officer or key
employee of any increase in severance or termination pay, or (C) any entry by
JPFI or any of its subsidiaries into, or any amendment of, any employment,
deferred compensation, consulting, severance, termination or indemnification
agreement with any such current or former director, executive officer or key
employee, (v) except insofar as may have been disclosed in JPFI SEC Documents
filed and publicly available prior to the date of this Agreement (as amended to
the date hereof, the "JPFI Filed SEC Documents") or required by a change in
GAAP, any change in accounting methods, principles or practices by JPFI
materially affecting its assets, liabilities or business, (vi) except insofar as
may have been disclosed in the JPFI Filed SEC Documents, any tax election that
individually or in the aggregate would have a material adverse effect on JPFI or
any of its tax attributes or any settlement or compromise of any material income
tax liability or (vii) any action taken by JPFI or any of the JPFI subsidiaries
during the period from June 30, 1996 through the date of this Agreement that, if
taken during the period from the date of this Agreement through the Effective
Time, would constitute a breach of Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation.
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(i) JPFI, its subsidiaries and employees hold all
permits, licenses, variances, exemptions, orders, registrations and
approvals of all Governmental Entities which are required for the
operation of the businesses of JPFI and its subsidiaries (the "JPFI
Permits") except where the failure to have any such JPFI Permits
individually or in the aggregate would not have a material adverse
effect on JPFI. JPFI and its subsidiaries are in compliance with the
terms of the JPFI Permits and all applicable statutes, laws,
ordinances, rules and regulations, except where the failure so to
comply individually or in the aggregate would not have a material
adverse effect on JPFI. As of the date of this Agreement, except as
disclosed in the JPFI Filed SEC Documents, no action, demand,
requirement or investigation by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to JPFI
or any of its subsidiaries or any of their respective properties, is
pending or, to the knowledge of JPFI, threatened, other than, in each
case, those the outcome of which individually or in the aggregate would
not (A) have a material adverse effect on JPFI or (B) reasonably be
expected to impair the ability of JPFI or Merger Sub to perform its
obligations under this Agreement or the Option Agreements or prevent or
materially delay the consummation of any of the transactions
contemplated hereby or thereby.
(ii) Neither JPFI nor any JPFI subsidiary is subject
to any outstanding order, injunction or decree which has had or,
insofar as can be reasonably foreseen, individually or in the aggregate
will have, a material adverse effect on JPFI.
(i) Absence of Changes in Benefit Plans. JPFI has delivered to
RSI true and complete copies of (i) all severance and employment agreements of
JPFI with directors, executive officers or key employees, (ii) all severance
programs and policies of each of JPFI and each JPFI subsidiary, and (iii) all
plans or arrangements of JPFI and each JPFI subsidiary relating to its employees
which contain change in control provisions, in each case which has not been
filed as an exhibit to the JPFI Filed SEC Documents. Since June 29, 1996, there
has not been any adoption or amendment in any material respect by JPFI or any of
its subsidiaries of any collective bargaining agreement, employment agreement,
consulting agreement, severance agreement or any material bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan, arrangement
or understanding providing benefits to any current or former employee, officer
or director of JPFI or any of its wholly owned subsidiaries (collectively, the
"JPFI Benefit Plans"), or any material change in any actuarial or other
assumption used to calculate funding obligations with respect to any JPFI
pension plans, or any material change in the manner in which contributions to
any JPFI pension plans are made or the basis on which such contributions are
determined. Since June 29, 1996, neither JPFI nor any JPFI subsidiary has
amended any JPFI Employee Stock Options or any JPFI Stock Plans to accelerate
the vesting of, or release restrictions on, awards thereunder, or to provide for
such acceleration in the event of a change in control.
(j) ERISA Compliance.
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(i) With respect to the JPFI Benefit Plans, no event
has occurred and, to the knowledge of JPFI, there exists no condition
or set of circumstances, in connection with which JPFI or any of its
subsidiaries could be subject to any liability that individually or in
the aggregate would have a material adverse effect on JPFI under ERISA,
the Code or any other applicable law.
(ii) Each JPFI Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any
JPFI Benefit Plan that individually or in the aggregate would not have
a material adverse effect on JPFI. JPFI, its subsidiaries and all the
JPFI Benefit Plans have been operated, and are, in compliance with the
applicable provisions of ERISA, the Code and all other applicable laws
and the terms of all applicable collective bargaining agreements,
except for any failures to be in such compliance that individually or
in the aggregate would not have a material adverse effect on JPFI. Each
JPFI Benefit Plan that is intended to be qualified under Section 401(a)
or 401(k) of the Code has received a favorable determination letter
from the IRS that it is so qualified and each trust established in
connection with any JPFI Benefit Plan that is intended to be exempt
from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that such trust is so
exempt. To the knowledge of JPFI, no fact or event has occurred since
the date of any determination letter from the IRS which is reasonably
likely to affect adversely the qualified status of any such JPFI
Benefit Plan or the exempt status of any such trust.
(iii) Neither JPFI nor any of its subsidiaries has
incurred any unsatisfied liability under Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation
arising in the ordinary course). No JPFI Benefit Plan has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code) whether or not waived. To the
knowledge of JPFI, there are not any facts or circumstances that would
materially change the funded status of any JPFI Benefit Plan that is a
"defined benefit" plan (as defined in Section 3(35) of ERISA) since the
date of the most recent actuarial report for such plan.
(iv) With respect to each of the JPFI Benefit Plans
(other than any multiemployer plan) that is subject to Title IV of
ERISA, the present value of accrued benefits under each such plan,
based upon the actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such plan's actuary with
respect to such plan, did not, as of its latest valuation date, exceed
the then current value of the aggregate assets of such plans allocable
to such accrued benefits in any material respect. With respect to any
JPFI Benefit Plan that is a multiemployer plan, (A) neither JPFI nor
any of its subsidiaries has any contingent liability under Section 4204
of ERISA, and no circumstances exist that present a material risk that
any such plan will go into reorganization, and (B) the aggregate
withdrawal liability of JPFI and its subsidiaries, computed as if a
complete withdrawal by JPFI and any of its subsidiaries had occurred
under each such JPFI Benefit Plan on the date hereof, would not be
material.
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(v) No JPFI Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former employees
after retirement or other termination of service (other than coverage
mandated by applicable law or benefits, the full cost of which is borne
by the current or former employee) other than individual arrangements
the amounts of which are not material.
(vi) JPFI has previously provided to RSI a copy of
each collective bargaining or other labor union contract applicable to
persons employed by JPFI or any of its subsidiaries to which JPFI or
any of its subsidiaries is a party. No collective bargaining agreement
is being negotiated or renegotiated by JPFI or any of its subsidiaries.
As of the date of this Agreement, there is no labor dispute, strike or
work stoppage against JPFI or any of its subsidiaries pending or, to
the knowledge of JPFI, threatened which may interfere with the
respective business activities of JPFI or any of its subsidiaries,
except where such dispute, strike or work stoppage individually or in
the aggregate would not have a material adverse effect on JPFI. As of
the date of this Agreement, to the knowledge of JPFI, none of JPFI, any
of its subsidiaries or any of their respective representatives or
employees has committed any material unfair labor practice in
connection with the operation of the respective businesses of JPFI or
any of its subsidiaries, and there is no material charge or complaint
against JPFI or any of its subsidiaries by the National Labor Relations
Board or any comparable governmental agency pending or threatened in
writing.
(vii) No employee of JPFI will be entitled to any
material payment, additional benefits or any acceleration of the time
of payment or vesting of any benefits under any JPFI Benefit Plan as a
result of the transactions contemplated by this Agreement (either alone
or in conjunction with any other event such as a termination of
employment).
(k) Taxes. (i) Each of JPFI and its subsidiaries has filed all
material tax returns and reports required to be filed by it (taking into account
applicable extensions) and all such returns and reports are complete and correct
in all material respects, or requests for extensions to file such returns or
reports have been timely filed, granted and have not expired, except to the
extent that such failures to file, to be complete or correct or to have
extensions granted that remain in effect individually or in the aggregate would
not have a material adverse effect on JPFI. JPFI and each of its subsidiaries
has paid (or JPFI has paid or caused to be paid on its behalf) all taxes shown
as due on such returns, and the most recent financial statements contained in
the JPFI Filed SEC Documents reflect an adequate reserve in accordance with GAAP
for all taxes payable by JPFI and its subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial statements.
(ii) No deficiencies for any taxes have, to the
knowledge of JPFI, been proposed, asserted or assessed against JPFI or
any of its subsidiaries that are not adequately reserved for, except
for deficiencies that individually or in the aggregate would not have a
material adverse effect on JPFI. None of the federal income tax re-
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turns of JPFI and each of its subsidiaries consolidated in such returns
have closed by virtue of the applicable statute of limitations.
(iii) Neither JPFI nor any of its subsidiaries has
taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
(l) Voting Requirements. The affirmative vote at the JPFI
Stockholders Meeting (the "JPFI Stockholder Approval") of the holders of a
majority of shares of JPFI Common Stock present in person or by proxy at a duly
convened and held meeting of JPFI stockholders is the only vote of the holders
of any class or series of JPFI's capital stock necessary to approve and adopt
this Agreement and the transactions contemplated hereby, including the Merger
and the issuance of the JPFI Common Stock pursuant to the Merger.
(m) State Takeover Statutes; Certificate of Incorporation. The
Board of Directors of JPFI has approved this Agreement, the Option Agreements,
the Support Agreement and the transactions contemplated hereby and thereby, and,
assuming the accuracy of RSI's representation and warranty contained in Section
3.1(q), such approval constitutes approval of the Merger and the other
transactions contemplated hereby and thereby by the JPFI Board of Directors
under the provisions of Section 203 of the DGCL such that Section 203 does not
apply to this Agreement, the Option Agreements, the Support Agreement or the
transactions contemplated hereby and thereby. To the knowledge of JPFI, no state
takeover statute other than Section 203 of the DGCL (which has been rendered
inapplicable) is applicable to the Merger or the other transactions contemplated
hereby.
(n) Accounting Matters. To its knowledge, neither JPFI nor any
of its affiliates (as such term is used in Section 5.10) has taken or agreed to
take any action (including, without limitation, in connection with any JPFI
Stock Plan or any agreement thereunder) that would prevent the business
combination to be effected by the Merger from being accounted for as a pooling
of interests, and JPFI has no reason to believe that the Merger will not qualify
for "pooling of interest" accounting.
(o) Brokers. No broker, investment banker, financial advisor
or other person, other than Goldman Sachs & Co. ("Goldman"), Smith Barney Inc.
("Smith Barney") and PaineWebber Inc., the fees and expenses of which will be
paid by JPFI, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of JPFI. JPFI has
furnished to RSI true and complete copies of all agreements under which any such
fees or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees are payable.
(p) Opinions of Financial Advisors. JPFI has received the
opinions of Goldman and Smith Barney, each dated the date of this Agreement,
each to the effect that, as
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of such date, the Exchange Ratio for the conversion of RSI Common Stock into
JPFI Common Stock is fair from a financial point of view to JPFI, signed copies
of which opinions have been delivered to RSI, it being understood and agreed by
RSI that such opinions are for the benefit of the Board of Directors of JPFI and
may not be relied upon by RSI, its affiliates or any of their respective
stockholders.
(q) Ownership of RSI Common Stock. To the knowledge of JPFI,
as of the date hereof or at any time within twelve months prior to the date of
this Agreement (and before giving effect to the RSI Option Agreement, which will
be entered into immediately after the execution of this Agreement) neither JPFI
nor, to its knowledge without independent investigation, any of its affiliates,
(i) beneficially owns (as defined in either Rule 13d-3 under the Exchange Act or
in Article Fourteenth of the RSI Certificate of Incorporation) or owned,
directly or indirectly, or (ii) is or was party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, shares of capital stock of RSI.
(r) Intellectual Property. JPFI and its subsidiaries own or
have a valid license to use all trademarks, service marks, trade names, patents
and copyrights (including any registrations or applications for registration of
any of the foregoing) (collectively, the "JPFI Intellectual Property") necessary
to carry on its business substantially as currently conducted, except for such
JPFI Intellectual Property the failure of which to own or validly license
individually or in the aggregate would not have a material adverse effect on
JPFI. Neither JPFI nor any such subsidiary has received any notice of
infringement of or conflict with, and, to JPFI's knowledge, there are no
infringements of or conflicts (i) with the rights of others with respect to the
use of, or (ii) by others with respect to, any JPFI Intellectual Property that
individually or in the aggregate, in either such case, would have a material
adverse effect on JPFI.
(s) Certain Contracts. Except as set forth in the JPFI Filed
SEC Documents, neither JPFI nor any of its subsidiaries is a party to or bound
by (i) any "material contract" (as such term is defined in item 601(b)(10) of
Regulation S-K of the SEC), (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
business of JPFI and its subsidiaries (including RSI and its subsidiaries,
assuming the Merger had taken place), taken as a whole, is or would be
conducted, (iii) any exclusive supply or purchase contracts or any exclusive
requirements contracts or (iv) any contract or other agreement which would
prohibit or materially delay the consummation of the Merger or any of the
transactions contemplated by this Agreement (all contracts of the type described
in clauses (i) and (ii) being referred to herein as "JPFI Material Contracts").
JPFI has delivered to RSI, prior to the execution of this Agreement, complete
and correct copies of all JPFI Material Contracts not filed as exhibits to the
JPFI Filed SEC Documents. Each JPFI Material Contract is valid and binding on
JPFI (or, to the extent a JPFI subsidiary is a party, such subsidiary) and is in
full force and effect, and JPFI and each JPFI subsidiary have in all material
respects performed all obligations required to be performed by them to date
under each JPFI Material Contract, except where such
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noncompliance, individually or in the aggregate, would not have a material
adverse effect on JPFI. Neither JPFI nor any JPFI subsidiary knows of, or has
received notice of, any violation or default under (nor, to the knowledge of
JPFI, does there exist any condition which with the passage of time or the
giving of notice or both would result in such a violation or default under) any
JPFI Material Contract.
(t) JPFI Rights Agreement. JPFI has taken all action
(including, if required, redeeming all of the outstanding preferred stock
purchase rights issued pursuant to the JPFI Rights Agreement or amending the
JPFI Rights Agreement) so that the entering into of this Agreement, the JPFI
Option Agreement and the Merger, the acquisition of shares pursuant to the JPFI
Option Agreement and the other transactions contemplated hereby and thereby do
not and will not result in the grant of any rights to any person under the JPFI
Rights Agreement or enable or require the JPFI Rights to be exercised,
distributed or triggered.
(u) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions, causes of
action, private environmental investigations or remediation activities or
governmental investigations of any nature pending or threatened against JPFI or
any of its subsidiaries seeking to impose, or that could reasonably be expected
to result in the imposition, on JPFI or any of its subsidiaries, of any
liability or obligation arising under common law or under any local, state or
federal environmental statute, regulation or ordinance, including, without
limitation, CERCLA, which liability or obligation could reasonably be expected
to have a material adverse effect on JPFI. To the knowledge of JPFI, there is no
reasonable basis for any such proceeding, claim, action or governmental
investigation that would impose any liability or obligation that could
reasonably be expected to have a material adverse effect on JPFI.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business. (a) Conduct of Business by
RSI. Except as set forth in Section 4.1(a) of the RSI Disclosure Schedule, as
otherwise expressly contemplated by this Agreement or as consented to by JPFI in
writing, such consent not to be unreasonably withheld or delayed, during the
period from the date of this Agreement to the Effective Time, RSI shall, and
shall cause its subsidiaries to, carry on their respective businesses in the
ordinary course consistent with past practice and in compliance in all material
respects with all applicable laws and regulations and, to the extent consistent
therewith, use all reasonable efforts to preserve intact their current business
organizations, use reasonable efforts to keep available the services of their
current officers and other key employees and preserve their relationships with
those persons having business dealings with them to the end that their goodwill
and ongoing businesses shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing (but subject to the above exceptions),
during the period from the date of this Agreement to the Effective Time, RSI
shall not, and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions by a
direct or indirect wholly owned subsidiary of RSI to its parent, or by
a subsidiary that is partially owned by RSI or any of its subsidiaries,
provided that RSI or any such subsidiary receives or is to receive its
proportionate share thereof, or regular semi-annual dividends not to
exceed $.03 per share, (x) declare, set aside or pay any dividends on,
make any other distributions in respect of, or enter into any agreement
with respect to the voting of, any of its capital stock, (y) split,
combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, except for issuances of
RSI Common Stock upon the exercise of RSI Employee Stock Options or the
Assumed Warrants, in each case, outstanding as of the date hereof in
accordance with their present terms (including cashless exercise) or
issued pursuant to Section 4.1(a)(ii) or (z) purchase, redeem or
otherwise acquire any shares of capital stock of RSI or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (except, in the
case of clause (z), for the deemed acceptance of shares upon cashless
exercise of RSI Employee Stock Options outstanding on the date hereof,
or in connection with withholding obligations relating thereto);
(ii) issue, deliver, sell, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock, any
other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of RSI
Common Stock upon the exercise or conversion of RSI Employee Stock
Options or the Assumed Warrants, in each case, outstanding as of the
date hereof in accordance with their present terms or the
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issuance of RSI Employee Stock Options (and shares of RSI Common Stock
upon the exercise thereof) granted after the date hereof in the
ordinary course of business consistent with past practice for employees
(so long as such additional amount of RSI Common Stock subject to RSI
Employee Stock Options issued to such employees does not exceed 250,000
shares of RSI Common Stock in the aggregate);
(iii) amend its certificate of incorporation, by-laws
or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any person, or,
except for transactions in the ordinary course of business consistent
with past practice pursuant to contracts or agreements in force at the
date of this Agreement or pursuant to RSI's current capital and
operating budgets (in each case, as previously provided to JPFI), make
any material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other entity
other than a subsidiary of RSI;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets (including securitizations), other than in the
ordinary course of business consistent with past practice;
(vi) take any action that would cause the
representations and warranties set forth in Section 3.1(g) and
qualified as to materiality to be no longer true and correct or, if not
so qualified, to be no longer true and correct in all material
respects;
(vii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for the obligations of any
person for borrowed money, other than pursuant to a revolving credit
facility or receivables facility in effect as of the date hereof, in
the ordinary course of business consistent with past practice;
(viii) settle any material claim, action or
proceeding involving money damages, except in the ordinary course of
business consistent with past practice;
(ix) enter into or terminate any material contract or
agreement, or make any change in any of its material leases or
contracts, other than amendments or renewals of contracts and leases
without material adverse changes of terms; or
(x) authorize, or commit or agree to take, any of the
foregoing actions;
provided that the limitations set forth in this Section 4.1(a) (other than
clause (iii)) shall not
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apply to any transaction between RSI and any wholly owned subsidiary or between
any wholly owned subsidiaries of RSI.
(b) Conduct of Business by JPFI. Except as set forth in
Section 4.1(b) of the JPFI Disclosure Schedule, as otherwise expressly
contemplated by this Agreement or as consented to by RSI in writing, such
consent not to be unreasonably withheld or delayed, during the period from the
date of this Agreement to the Effective Time, JPFI shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary course
consistent with past practice and in compliance in all material respects with
all applicable laws and regulations and, to the extent consistent therewith, use
all reasonable efforts to preserve intact their current business organizations,
use reasonable efforts to keep available the services of their current officers
and other key employees and preserve their relationships with those persons
having business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing (but subject to the above exceptions), during the
period from the date of this Agreement to the Effective Time, JPFI shall not,
and shall not permit any of its subsidiaries to:
(i) other than dividends and distributions by a
direct or indirect wholly owned subsidiary of JPFI to its parent, or by
a subsidiary that is partially owned by JPFI or any of its
subsidiaries, provided that JPFI or any such subsidiary receives or is
to receive its proportionate share thereof, (x) declare, set aside or
pay any dividends on, make any other distributions in respect of, or
enter into any agreement with respect to the voting of, any of its
capital stock, (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock, except for issuances of JPFI Common Stock upon the exercise of
JPFI Employee Stock Options outstanding as of the date hereof in
accordance with their present terms (including cashless exercise) or
issued pursuant to Section 4.1(b)(ii) or (z) purchase, redeem or
otherwise acquire any shares of capital stock of JPFI or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities (except, in the
case of clause (z), for the deemed acceptance of shares upon cashless
exercise of JPFI Employee Stock Options, or in connection with
withholding obligations relating thereto);
(ii) issue, deliver, sell, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock, any
other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities (other than the issuance of JPFI
Common Stock upon the exercise of JPFI Employee Stock Options
outstanding as of the date hereof in accordance with their present
terms or the issuance of JPFI Employee Stock Options (and shares of
JPFI Common Stock upon the exercise thereof) granted after the date
hereof in the ordinary course of business consistent with past practice
for employees (so long as such additional amount of JPFI Common Stock
subject to JPFI Employee Stock Options issued to employees does not
exceed 300,000 shares of JPFI Common Stock in the aggregate);
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(iii) except as contemplated hereby, amend its
certificate of incorporation, by-laws or other comparable
organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any person, or,
except for transactions in the ordinary course of business consistent
with past practice pursuant to contracts or agreements in force at the
date of this Agreement or pursuant to JPFI's current capital and
operating budgets (in each case, as previously provided to RSI), make
any material investment either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other entity
other than a subsidiary of JPFI;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets (including securitizations), other than in the
ordinary course of business consistent with past practice;
(vi) take any action that would cause the
representations and warranties set forth in Section 3.2(g) and
qualified as to materiality to be no longer be true and correct or or,
if not so qualified, to be no longer true and correct in all material
respects;
(vii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for the obligations of any
person for borrowed money, other than pursuant to a revolving credit
facility or receivables facility in effect as of the date hereof, in
the ordinary course of business consistent with past practice;
(viii) settle any claim, action or proceeding
involving money damages, except in the ordinary course of business
consistent with past practice;
(ix) enter into or terminate any material contract or
agreement, or make any change in any of its material leases or
contracts, other than amendments or renewals of contracts and leases
without material adverse changes of terms; or
(x) authorize, or commit or agree to take, any of the
foregoing actions;
provided that the limitations set forth in this Section 4.1(b) (other than
clause (iii)) shall not apply to any transaction between JPFI and any wholly
owned subsidiary or between any wholly owned subsidiaries of JPFI.
(c) Other Actions. Except as required by law, RSI and JPFI
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be expected to,
result in (i) any of the representations and warranties
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of such party set forth in this Agreement that are qualified as to materiality
becoming untrue at the Effective Time, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any material respect at
the Effective Time, or (iii) any of the conditions to the Merger set forth in
Article VI not being satisfied.
(d) Advice of Changes. RSI and JPFI shall promptly advise the
other party orally and in writing to the extent it has knowledge of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply in any
material respect with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement and
(iii) any change or event having, or which, insofar as can reasonably be
foreseen, could reasonably be expected to have a material adverse effect on such
party or on the truth of such party's representations and warranties or the
ability of the conditions set forth in Article VI to be satisfied; provided,
however, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
SECTION 4.2. No Solicitation or Negotiations. (a) Neither JPFI
nor RSI shall, directly or indirectly, solicit or encourage (including by way of
furnishing information), or authorize any individual, corporation or other
entity to solicit or encourage (including by way of furnishing information),
from any third party any inquiries or proposals relating to, or conduct
negotiations or discussions with any third party with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or that may reasonably be expected to lead to, any proposal or
offer relating to the disposition of its business or assets, or the acquisition
of its voting securities, or the merger or consolidation of it or any of its
subsidiaries with or into any corporation or other entity other than as provided
in this Agreement, the Option Agreements or the Support Agreement (and each
party shall promptly notify the other of all of the relevant details relating to
all inquiries and proposals which it may receive relating to any such matters).
(b) Nothing contained in Section 4.2(a) or Section 5.1 shall
prohibit RSI or JPFI from taking and disclosing to its respective stockholders a
position contemplated by Rule 14e-2(a) promulgated under the Exchange Act.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of the Form S-4 and the Joint Proxy
Statement; Stockholders Meetings. (a) As soon as practicable following the date
of this Agreement, RSI and JPFI shall prepare and file with the SEC the Joint
Proxy Statement, and JPFI shall prepare and file with the SEC the Form S-4, in
which the Joint Proxy Statement will be included as a
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prospectus. Each of RSI and JPFI shall use best efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. RSI will use all best efforts to cause the Joint Proxy Statement to
be mailed to RSI's stockholders, and JPFI will use all best efforts to cause the
Joint Proxy Statement to be mailed to JPFI's stockholders, in each case as
promptly as practicable after the Form S-4 is declared effective under the
Securities Act. JPFI shall also take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or to file a
general consent to service of process) required to be taken under any applicable
state securities laws in connection with the issuance of JPFI Common Stock in
the Merger and RSI shall furnish all information concerning RSI and the holders
of RSI Common Stock as may be reasonably requested in connection with any such
action. No filing of, or amendment or supplement to, the Form S-4 or the Joint
Proxy Statement will be made by JPFI without RSI's prior consent (which shall
not be unreasonably withheld) and without providing RSI the opportunity to
review and comment thereon. JPFI will advise RSI, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the JPFI Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction, or any request by the
SEC for amendment of the Joint Proxy Statement or the Form S-4 or comments
thereon and responses thereto or requests by the SEC for additional information.
If at any time prior to the Effective Time any information relating to RSI or
JPFI, or any of their respective affiliates, officers or directors, should be
discovered by RSI or JPFI which should be set forth in an amendment or
supplement to any of the Form S-4 or the Joint Proxy Statement, so that any of
such documents would not include any misstatement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law, disseminated to
the stockholders of RSI and JPFI.
(b) RSI shall, as promptly as practicable after the Form S-4
is declared effective under the Securities Act, duly call, give notice of,
convene and hold a meeting of its stockholders (the "RSI Stockholders Meeting")
in accordance with the DGCL for the purpose of obtaining the RSI Stockholder
Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby.
(c) JPFI shall, as promptly as practicable after the Form S-4
is declared effective under the Securities Act, duly call, give notice of,
convene and hold a meeting of its stockholders (the "JPFI Stockholders Meeting")
in accordance with the DGCL for the purpose of obtaining the JPFI Stockholder
Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby.
(d) JPFI and RSI will use best efforts to hold the RSI
Stockholders Meeting and the JPFI Stockholders Meeting on the same date and as
soon as reasonably practicable after
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the date hereof.
SECTION 5.2. Letters of RSI's Accountants. (a) RSI shall use
best efforts to cause to be delivered to JPFI two letters from RSI's independent
accountants, one dated a date within two business days before the date on which
the Form S-4 shall become effective and one dated a date within two business
days before the Closing Date, each addressed to JPFI, in form and substance
reasonably satisfactory to JPFI and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
(b) RSI shall use best efforts to cause to be delivered to
JPFI and JPFI's independent accountants a letter from RSI's independent
accountants addressed to JPFI and RSI, dated as of the date the Form S-4 is
declared effective and as of the Closing Date, stating that accounting for the
Merger as a pooling of interests under Opinion 16 of the Accounting Principles
Board and applicable SEC rules and regulations is appropriate if the Merger is
closed and consummated as contemplated by this Agreement.
SECTION 5.3. Letters of JPFI's Accountants. (a) JPFI shall use
best efforts to cause to be delivered to RSI two letters from JPFI's independent
accountants, one dated a date within two business days before the date on which
the Form S-4 shall become effective and one dated a date within two business
days before the Closing Date, each addressed to RSI, in form and substance
reasonably satisfactory to RSI and customary in scope and substance for comfort
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
(b) JPFI shall use best efforts to cause to be delivered to
RSI and RSI's independent accountants a letter from JPFI's independent
accountants, addressed to RSI and JPFI, dated as of the date the Form S-4 is
declared effective and as of the Closing Date, stating that accounting for the
Merger as a pooling of interests under Opinion 16 of the Accounting Principles
Board and applicable SEC rules and regulations is appropriate if the Merger is
closed and consummated as contemplated by this Agreement.
SECTION 5.4. Access to Information; Confidentiality. Subject
to the Confidentiality Agreements dated April 22, 1997, each as amended as of
June 13, 1997, between JPFI and RSI (the "Confidentiality Agreements"), and
subject to applicable law, each of RSI and JPFI shall, and shall cause each of
its respective subsidiaries to, afford to the other party and to the officers,
employees, accountants, counsel, financial advisors and other representatives of
such other party, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records (provided that such access shall
not interfere with the business or operations of such party) and, during such
period, each of RSI and JPFI shall, and shall cause each of its respective
subsidiaries to, furnish promptly to the other party (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (b)
all other information concerning its business, properties
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and personnel as such other party may reasonably request. No review pursuant to
this Section 5.4 shall affect any representation or warranty given by the other
party hereto. Each of RSI and JPFI will hold, and will cause its respective
officers, employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information in accordance
with the terms of the Confidentiality Agreements.
SECTION 5.5. Best Efforts. (a) Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers, and any necessary or
appropriate financing arrangements, from third parties, (iii) the defending of
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
by this Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or reversed, and
(iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement.
(b) In connection with and without limiting the foregoing, RSI
and JPFI shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to this
Agreement, the Option Agreements, the Support Agreement or any of the
transactions contemplated hereby and thereby and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to such agreements
or transactions, take all action necessary to ensure that such transactions may
be consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger and the other transactions contemplated by this Agreement.
SECTION 5.6. Employment Agreements. (a) From and after the
Effective Time, JPFI will, and will cause Merger Sub to, honor in accordance
with their respective terms, and assume and agree to perform, in the same manner
and to the same extent that RSI would be required to do if the Merger had not
taken place, the RSI Benefit Plans, the RSI Stock Plans (subject to Section
2.1(e)) and all employment, severance and change in control agreements in effect
as of the date hereof. For the purpose of any such Plan or agreement that
contains a provision relating to a change in control of RSI and that is
disclosed as such on Section 5.6(a) of the RSI Disclosure Schedule, JPFI
acknowledges that the consummation of the Merger constitutes such a change in
control. RSI and JPFI will cooperate on and after the date of this Agreement to
develop appropriate employee benefit plans, programs and arrangements,
including, but not limited to, executive and incentive compensation, stock
option and
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supplemental executive retirement plans, for employees and directors of the
Surviving Corporation and its subsidiaries from and after the Effective Time.
Nothing in this Section 5.6 shall be interpreted as preventing the Surviving
Corporation from amending, modifying or terminating any RSI Stock Plans or RSI
Benefit Plans, or other contracts, arrangements, commitments or understandings,
in accordance with their terms and applicable law, or be deemed to constitute an
employment contract between JPFI or the Surviving Corporation and any
individual, or a waiver of JPFI's or the Surviving Corporation's right to
discharge any employee at any time, with or without cause.
(b) Each of RSI and JPFI will take the actions indicated on
Section 5.6(b) of the RSI Disclosure Schedule to be taken by it at or prior to
the time specified therein, including the execution, at the Effective Time, of
an employment agreement with Mark Van Stekelenburg in the form attached to this
Agreement as Exhibit G.
SECTION 5.7. Indemnification, Exculpation and Insurance. (a)
JPFI agrees to maintain in effect in accordance with their terms all rights to
indemnification and exculpation from liabilities for acts or omissions occurring
at or prior to the Effective Time existing as of the date of this Agreement in
favor of the current or former directors or officers of RSI and its subsidiaries
(and any of their respective predecessors, including, without limitation, US
Foodservice Inc., a Delaware corporation ("US Foodservice"), that was merged
within and into USF Acquisition Corporation on May 17, 1996) as provided in
their respective certificates of incorporation or by-laws (or comparable
organizational documents) and any indemnification agreements of RSI or in
Section 7.13 of the Agreement and Plan of Merger dated February 2, 1996, among
RSI, USF Acquisition Corporation and US Foodservice. In addition, from and after
the Effective Time, directors and officers of RSI who become directors or
officers of JPFI will be entitled to the same indemnity rights and protections,
and directors' and officers' liability insurance, as are afforded from time to
time to other directors and officers of JPFI.
(b) In the event that JPFI or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of JPFI assume the obligations set forth in this
Section 5.7.
(c) JPFI shall use its best efforts to provide to RSI's
current directors and officers, for six years after the Effective Time,
liability insurance covering acts or omissions occurring prior to the Effective
Time with respect to those persons who are currently covered by RSI's directors'
and officers' liability insurance policy on terms with respect to such coverage
and amount no less favorable than those of such policy in effect on the date
hereof, provided that in no event shall JPFI be required to expend more than
200% of the current amount expended by RSI to maintain such coverage.
(d) The provisions of this Section 5.7 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her repre-
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sentatives and (ii) are in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such person may have by
contract or otherwise.
SECTION 5.8. Fees and Expenses. All fees and expenses incurred
in connection with the Merger, this Agreement, and the transactions contemplated
by this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except (x) to the extent set forth in
Section 7.5 hereof and (y) that each of JPFI and RSI shall bear and pay one-half
of the costs and expenses incurred in connection with (1) the filing, printing
and mailing of the Form S-4 and the Joint Proxy Statement (including SEC filing
fees) and (2) the filings of the pre-merger notification and report forms under
the HSR Act (including filing fees).
SECTION 5.9. Public Announcements. JPFI and RSI will consult
with each other before issuing, and provide each other the opportunity to
review, comment upon and concur with, and use reasonable efforts to agree on,
any press release or other public statements with respect to the transactions
contemplated by this Agreement, the Option Agreements and the Support Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as either party may
determine is required by applicable law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or stock
market. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
SECTION 5.10. Affiliates. (a) As soon as practicable after the
date hereof, RSI shall deliver to JPFI a letter identifying all persons who may
be deemed to be, at the time this Agreement is submitted for adoption by the
stockholders of RSI, "affiliates" of RSI for purposes of Rule 145 under the
Securities Act or for purposes of qualifying the Merger for pooling of interests
accounting treatment under Opinion 16 of the Accounting Principles Board and
applicable SEC rules and regulations, and such list shall be updated as
necessary to reflect changes from the date hereof. RSI shall use best efforts to
cause each person identified on such list to deliver to JPFI not less than 30
days prior to the Effective Time, a written agreement substantially in the form
attached as Exhibit E hereto. JPFI shall use best efforts to cause all persons
who are "affiliates" of JPFI for purposes of qualifying the Merger for pooling
of interests accounting treatment under Opinion 16 of the Accounting Principles
Board and applicable SEC rules and regulations to deliver to RSI not less than
30 days prior to the Effective Time, a written agreement substantially in the
form of the fourth paragraph of Exhibit D hereto.
(b) JPFI shall use reasonable best efforts to publish no later
than 45 days after the end of the first month after the Effective Time in which
there are at least 30 days of post Merger combined operations (which month may
be the month in which the Effective Time occurs), combined sales and net income
figures as contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 135.
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SECTION 5.11. NYSE Listing. JPFI shall use best efforts to
cause the JPFI Common Stock issuable under Article II to be approved for listing
on the NYSE, subject to official notice of issuance, as promptly as practicable
after the date hereof, and in any event prior to the Closing Date.
SECTION 5.12. Tax Treatment. Each of JPFI and RSI shall use
best efforts to cause the Merger to qualify as a reorganization under the
provisions of Section 368 of the Code and to obtain the opinions of counsel
referred to in Section 6.1(g). The parties will characterize the Merger as such
a reorganization for purposes of all tax returns and other filings.
SECTION 5.13. Pooling of Interests. Each of RSI and JPFI shall
use best efforts to cause the transactions contemplated by this Agreement,
including the Merger, to be accounted for as a pooling of interests under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such accounting treatment to be accepted by the SEC, and each
of RSI and JPFI agrees that it shall take no action that would cause such
accounting treatment not to be obtained.
SECTION 5.14. Standstill Agreements; Confidentiality
Agreements. During the period from the date of this Agreement through the
Effective Time, except as JPFI and RSI otherwise mutually agree pursuant to a
written instrument, neither RSI nor JPFI shall terminate, amend, modify or waive
any provision of any confidentiality or standstill agreement to which it or any
of its respective subsidiaries is a party. Except as JPFI and RSI otherwise
mutually agree pursuant to a written instrument, during such period, RSI or
JPFI, as the case may be, shall enforce, to the fullest extent permitted under
applicable law, the provisions of any such agreement, including by obtaining
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
of America or of any state having jurisdiction.
SECTION 5.15. Post-Merger Operations. Following the Effective
Time, JPFI shall have its headquarters and principal corporate offices in
Columbia, Maryland.
SECTION 5.16. Conveyance Taxes. JPFI and RSI shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees or any similar taxes which become payable
in connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time.
SECTION 5.17. 8 7/8% Indenture. Merger Sub, as the Surviving
Corporation, agrees that it will comply with the provisions of Section 11.1 of
the Indenture, dated as of November 1, 1993, between RSI, as issuer, and Norwest
Bank Minnesota, N.A., as trustee, as supplemented on May 1, 1996 (relating to a
mandatory tender to the holders of the 8-7/8% Senior Subordinated Notes due 2003
thereunder upon a "change of control" (as defined in such Indenture)).
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SECTION 5.18. Certain Tax Matters. Provided that the structure
of the transaction as contemplated in Section 1.1 has not been revised pursuant
to Section 1.7, each of RSI and JPFI agrees that it will not treat the Merger as
a change in the ownership or effective control of RSI, or a change in the
ownership of a substantial portion of the assets of RSI, each within the meaning
of Section 280G of the Code, unless RSI or JPFI, as the case may be, concludes,
in its sole discretion, that substantial authority (within the meaning of
Section 6621 of the Code) does not exist for such position or unless otherwise
required by a determination (as defined in Section 1313 of the Code).
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. Each of the RSI Stockholder
Approval and the JPFI Stockholder Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
(c) Governmental, Regulatory and Other Approvals. (i) Other
than the filing provided for under Section 1.3 and filings pursuant to the HSR
Act (which are addressed in Section 6.1(b)), all consents, approvals and actions
of, filings with and notices to any Governmental Entity required of RSI, JPFI or
any of their subsidiaries to consummate the Merger and the other transactions
contemplated hereby (together with the matters contemplated by Section 6.1(b),
the "Requisite Regulatory Approvals") shall have been obtained and (ii) except
as would not have a material adverse effect on any of RSI, JPFI or the Surviving
Corporation, the consents and approvals set forth on Section 3.1(d) of the RSI
Disclosure Schedule and Section 3.2(d) of the JPFI Disclosure Schedule shall
have been obtained or shall no longer be required.
(d) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity of competent
jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect (i) preventing the consummation of the Merger,
or (ii) which otherwise is reasonably likely to have a material adverse effect
on RSI or JPFI, as applicable; provided, however, that each of the parties shall
have used its best efforts to prevent the entry of any such Restraints and to
appeal as promptly as possible any such Restraints that may be entered.
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(e) Form S-4. The Form S-4 shall have become effective under
the Securities Act prior to the mailing of the Joint Proxy Statement by each of
RSI and JPFI to their respective stockholders and no stop order or proceedings
seeking a stop order shall be threatened by the SEC or shall have been initiated
by the SEC.
(f) NYSE Listing. The shares of JPFI Common Stock issuable to
RSI's stockholders as contemplated by Article II shall have been approved for
listing on the NYSE subject to official notice of issuance.
(g) Tax Opinions. JPFI shall have received from Wachtell,
Lipton, Rosen & Katz, counsel to JPFI, and RSI shall have received from Jones,
Day, Reavis & Pogue, counsel to RSI, an opinion, dated the Closing Date,
substantially to the effect that: (i) the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and JPFI and
RSI will each be a party to such reorganization within the meaning of Section
368(b) of the Code; (ii) no gain or loss will be recognized by JPFI or RSI as a
result of the Merger; (iii) no gain or loss will be recognized by the
stockholders of RSI upon the exchange of their shares of RSI Common Stock solely
for shares of JPFI Common Stock pursuant to the Merger, except with respect to
cash, if any, received in lieu of fractional shares of JPFI Common Stock; (iv)
the aggregate tax basis of the shares of JPFI Common Stock received solely in
exchange for shares of RSI Common Stock pursuant to the Merger (including
fractional shares of JPFI Common Stock for which cash is received) will be the
same as the aggregate tax basis of the shares of RSI Common Stock exchanged
therefor; and (v) the holding period for shares of JPFI Common Stock received in
exchange for shares of RSI Common Stock pursuant to the Merger will include the
holding period of the shares of RSI Common Stock exchanged therefor, provided
such shares of RSI Common Stock were held as capital assets by the stockholder
at the Effective Time.
In rendering such opinions, each of counsel for JPFI and RSI
shall be entitled to receive and rely upon representations of fact contained in
certificates of officers of JPFI, RSI and stockholders of RSI, which
representations shall be in form and substance satisfactory to such counsel.
(h) Pooling Letters. JPFI and RSI shall have received letters
from each of RSI's independent accountants and JPFI's independent accountants,
dated as of the Closing Date, in each case addressed to JPFI and RSI, stating
that the Merger qualifies for accounting as a pooling of interests under Opinion
16 of the Accounting Principles Board and applicable SEC rules and regulations.
SECTION 6.2. Conditions to Obligations of JPFI. The obligation
of JPFI to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of RSI set forth herein shall be true and correct both when made and
at and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to
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be so true and correct (without giving effect to any limitation as to
"materiality" or "material adverse effect" set forth therein) does not have, and
is not likely to have, individually or in the aggregate, a material adverse
effect on RSI.
(b) Performance of Obligations of RSI. RSI shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of
this Agreement there shall not have occurred any material adverse change
relating to RSI.
(d) RSI Rights Agreement. The RSI Rights issued pursuant to
the RSI Rights Agreement shall not have become nonredeemable, exercisable,
distributed or triggered pursuant to the terms of such agreement.
SECTION 6.3. Conditions to Obligations of RSI. The obligation
of RSI to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of JPFI set forth herein shall be true and correct both when made and
at and as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to "materiality," or
"material adverse effect" set forth therein) does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on JPFI.
(b) Performance of Obligations of JPFI. JPFI shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the date of
this Agreement there shall not have occurred any material adverse change
relating to JPFI.
(d) JPFI Rights Agreement. The JPFI Rights issued pursuant to
the JPFI Rights Agreement shall not have become nonredeemable, exercisable,
distributed or triggered pursuant to the terms of such agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at
any time prior to the Effective Time, and (except in the case of 7.1(e) or
7.1(f)) whether before or after
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the RSI Stockholder Approval or the JPFI Stockholder Approval:
(a) by mutual written consent of JPFI and RSI, if the Board of
Directors of each so determines by a vote of a majority of its entire Board;
(b) by either the Board of Directors of JPFI or the Board of
Directors of RSI:
(i) if the Merger shall not have been consummated by
April 1, 1998; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(i) shall not be available to
any party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by
such time;
(ii) if the RSI Stockholder Approval shall not have
been obtained at a RSI Stockholders Meeting duly convened therefor or
at any adjournment or postponement thereof;
(iii) if the JPFI Stockholder Approval shall not have
been obtained at a JPFI Stockholders Meeting duly convened therefor or
at any adjournment or postponement thereof; or
(iv) if any Restraint having any of the effects set
forth in Section 6.1(d) shall be in effect and shall have become final
and nonappealable, or if any Governmental Entity that must grant a
Requisite Regulatory Approval has denied approval of the Merger and
such denial has become final and nonappealable; provided, that the
party seeking to terminate this Agreement pursuant to this Section
7.1(b)(iv) shall have used best efforts to prevent the entry of and to
remove such Restraint or to obtain such Requisite Regulatory Approval,
as the case may be;
(c) by the Board of Directors of JPFI (provided that JPFI is
not then in material breach of any representation, warranty, covenant or other
agreement contained herein), if RSI shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 6.2(a) or
(b), and (B) is incapable of being cured by RSI or is not cured within 45 days
of written notice thereof;
(d) by the Board of Directors of RSI (provided that RSI is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein), if JPFI shall have breached or failed to perform in
any material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 6.3(a) or
(b), and (B) is incapable of being cured by JPFI or is not cured within 45 days
of written notice thereof;
(e) by the Board of Directors of JPFI, at any time prior to
the RSI
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Stockholders Meeting, if the RSI Board of Directors shall have (A) failed to
make, no later than the date of the first mailing of the Joint Proxy Statement
to the RSI Stockholders, its recommendation referred to in Section 5.1(b), (B)
withdrawn such recommendation or (C) modified or changed such recommendation in
a manner adverse to the interests of JPFI; or
(f) by the Board of Directors of RSI, at any time prior to the
JPFI Stockholders Meeting, if the JPFI Board of Directors shall have (A) failed
to make, no later than the date of the first mailing of the Joint Proxy
Statement to the JPFI Stockholders, its recommendation referred to in Section
5.1(c), (B) withdrawn such recommendation or (C) modified or changed such
recommendation in a manner adverse to the interests of RSI.
SECTION 7.2. Effect of Termination. In the event of
termination of this Agreement by either RSI or JPFI as provided in Section 7.1,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of JPFI or RSI, other than the provisions of
the last sentence of Section 5.4, Section 5.8, this Section 7.2, Section 7.5 and
Article VIII, which provisions shall survive such termination, and except that,
notwithstanding anything to the contrary contained in this Agreement, neither
JPFI nor RSI shall be relieved or released from any liabilities or damages
arising out of its willful breach of any provision of this Agreement.
SECTION 7.3. Amendment. Subject to compliance with applicable
law, this Agreement may be amended by the parties at any time before or after
the RSI Stockholder Approval or the JPFI Stockholder Approval; provided,
however, that after any such approval, there may not be, without further
approval of such the stockholders of RSI (in the case of the RSI Stockholders
Approval) and the stockholders of JPFI (in the case of the JPFI Stockholders
Approval), any amendment of this Agreement that changes the amount or the form
of the consideration to be delivered to the holders of RSI Common Stock
hereunder, or which by law otherwise requires the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto and duly approved by the
parties' respective Boards of Directors or a duly designated committee thereof.
SECTION 7.4. Extension; Waiver. At any time prior to the
Effective Time, a party may, subject to the proviso of Section 7.3, (a) extend
the time for the performance of any of the obligations or other acts of the
other parties, (b) waive any inaccuracies in the representations and warranties
of the other parties contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) waive compliance by the other party with any
of the agreements or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. Any extension
or waiver given in compliance with this Section 7.4 or failure to insist on
strict compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
SECTION 7.5. Termination Expenses. (a) In the event of a
termination of this
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Agreement and the abandonment of the Merger at any time (i) by JPFI pursuant to
Section 7.1(c) (other than for a nonwillful breach of a representation,
warranty, covenant or agreement of RSI contained herein) or Section 7.1(e) or
(ii) by JPFI or RSI pursuant to Section 7.1(b)(ii) (if, at such time, in the
case of clause (ii) of this Section 7.5(a), any event has occurred that would
give JPFI the right to exercise the RSI Stock Option), and in order to
compensate JPFI for the expenses associated with the negotiation of this
Agreement and the other matters contemplated hereby, RSI shall, within one
business day following such termination, pay JPFI a fee of $30,000,000 in
immediately available funds.
(b) In the event of a termination of this Agreement and the
abandonment of the Merger at any time (i) by RSI pursuant to Section 7.1(d)
(other than for a nonwillful breach of a representation, warranty, covenant or
agreement of JPFI contained herein) or Section 7.1(f) or (ii) by JPFI or RSI
pursuant to 7.1(b)(iii) (if, at such time, in the case of clause (ii) of this
Section 7.5(b), any event has occurred that would give RSI the right to exercise
the JPFI Stock Option), and in order to compensate RSI for the expenses
associated with the negotiation of this Agreement and the other matters
contemplated hereby, JPFI shall, within one business day following such
termination, pay RSI a fee of $30,000,000 in immediately available funds.
(c) A party's right to receive the fee contemplated by this
Section 7.5, and its ability to enforce the provisions this Section 7.5, shall
not be subject to approval by the stockholders of either JPFI or RSI.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
SECTION 8.2. Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to JPFI, to
JP Foodservice, Inc.
9830 Patuxent Woods Drive
Columbia, Maryland 21046
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Telecopy No: (410) 312-7149
Attention: David M. Abramson, Esq.
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52 Street
New York, New York 10019
Telecopy No.: (212) 403-2000
Attention: Edward D. Herlihy, Esq.
(b) if to Rykoff, to
Rykoff-Sexton, Inc.
1050 Warrenvill Road
Lisle, Illinois
Telecopy No. (717) 830-7112
Attention: Robert J. Harter, Jr., Esq.
with a copy to:
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 10022
Telecopy No.: (312) 782-8585
Attention: Elizabeth Kitslaar, Esq.
SECTION 8.3. Definitions. For purposes of this Agreement:
(a) except for purposes of Section 5.10, an "affiliate" of any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first person, where "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by contract, as
trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse effect"
means, when used in connection with RSI or JPFI, any change, effect, event,
occurrence or state of facts that is or could reasonably be expected to be
materially adverse to the business, financial condition or results of operations
of such party and its subsidiaries taken as a whole;
(c) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity;
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(d) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person; and
(e) "knowledge" of any person which is not an individual means
the knowledge of such person's executive officers or senior management of such
person's operating divisions and segments, in each case after reasonable
inquiry.
SECTION 8.4. Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
SECTION 8.5. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein), the
Option Agreements, the Support Agreement and the Confidentiality Agreements (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement and (b) except for the provisions of Section
5.7, are not intended to confer upon any person other than the parties any
rights or remedies.
SECTION 8.7. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflict of laws thereof.
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SECTION 8.8. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding two
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 8.9. Consent to Jurisdiction. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court.
SECTION 8.10. Headings, Etc. The headings and table of
contents contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
SECTION 8.11. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect, insofar as the foregoing can
be accomplished without materially affecting the economic benefits anticipated
by the parties to this Agreement. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, JPFI and RSI have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
JP FOODSERVICE, INC.
By /s/ James L. Miller
Name: James L. Miller
Title: Chairman, President and
Chief Executive Officer
RYKOFF-SEXTON, INC.
By /s/ Mark Van Stekelenburg
Name: Mark Van Stekelenburg
Title: Chairman and
Chief Executive Officer
HUDSON ACQUISITION CORP.
By /s/ James L. Miller
Name: James L. Miller
Title: Chairman, President and
Chief Executive Officer
1
EXHIBIT G
SUPPORT AGREEMENT
AGREEMENT, dated as of June 30, 1997, by and among JP
FOODSERVICE, INC., a Delaware corporation ("JPFI") and the other persons whose
names are set forth on the signature pages hereto (collectively, the
"Stockholders").
WHEREAS, concurrently herewith, JPFI, Hudson Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of JPFI ("Merger
Sub") and Rykoff-Sexton, Inc., a Delaware corporation ("Rykoff"), are entering
into an Agreement and Plan of Merger (the "Merger Agreement"; capitalized terms
used without definition herein having the meanings ascribed thereto in the
Merger Agreement);
WHEREAS, the Stockholders are the beneficial owners of the
number of shares of Rykoff Common Stock set forth in Schedule I hereto (the
"Subject Shares");
WHEREAS, approval of the Merger Agreement by the stockholders
of Rykoff is a condition to the consummation of the Merger; and
WHEREAS, as a condition to its entering into the Merger
Agreement, JPFI has required that the Stockholders agree, and the Stockholders
have agreed, to enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
Section 1. Agreement to Vote. (a) Each Stockholder hereby
agrees to attend the Rykoff Stockholders Meeting, in person or by proxy, and to
vote (or cause to be voted) all Subject Shares, and any other voting securities
of Rykoff, whether issued heretofore or hereafter, that such Stockholder owns or
has the right to vote, for approval and adoption of the Merger Agreement and the
Merger. Such agreement to vote shall apply also to any adjournment or
adjournments of the Rykoff Stockholders Meeting, and to any other meeting of
stockholders at which any item of business referred to in the preceding sentence
is presented for approval.
(b) To the extent inconsistent with the foregoing provisions
of this Section 1, each Stockholder hereby revokes any and all previous proxies
with respect to such Stockholder's Subject Shares or any other voting securities
of Rykoff.
Section 2. No Solicitation. No Stockholder shall, directly or
indirectly, solicit or encourage (including by way of furnishing information),
or authorize any individual, corporation or other entity to solicit or encourage
(including by way of furnishing information), from any third party any inquiries
or proposals relating to, or conduct negotiations or discussions
<PAGE>
with any third party with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or that may reasonably
be expected to lead to, any proposal or offer relating to the disposition of
business or assets of Rykoff or JPFI or their respective subsidiaries, or the
acquisition of the voting securities of Rykoff or JPFI or their respective
subsidiaries, or the merger or consolidation of Rykoff or JPFI or any of their
respective subsidiaries with or to any corporation or other entity other than as
provided in the Merger Agreement, the Option Agreements or the Support Agreement
(and the Stockholders shall promptly notify JPFI of all of the relevant details
relating to all inquiries and proposals which such Stockholders may receive
relating to any such matters).
Section 3. Securities Act Covenants and Representations. Each
Stockholder hereby agrees and represents to JPFI as follows:
(a) Such Stockholder has been advised that the offering, sale
and delivery of JPFI Common Stock pursuant to the Merger will be registered
under the Securities Act on a Registration Statement on Form S-4. Such
Stockholder has also been advised, however, that to the extent such Stockholder
is considered an "affiliate" of Rykoff at the time the Merger Agreement is
submitted to a vote of the stockholders of Rykoff any public offering or sale by
such Stockholder of any shares of JPFI Common Stock received by such Stockholder
in the Merger will, under current law, require either (i) the further
registration under the Securities Act of any shares of JPFI Common Stock to be
sold by such Stockholder, (ii) compliance with Rule 145 promulgated by the SEC
under the Securities Act or (iii) the availability of another exemption from
such registration under the Securities Act.
(b) Such Stockholder has read this Agreement and the Merger
Agreement and has discussed their requirements and other applicable limitations
upon such Stockholder's ability to sell, transfer or otherwise dispose of shares
of JPFI Common Stock, to the extent such Stockholder believed necessary, with
such Stockholder's counsel or counsel for Rykoff.
(c) Such Stockholder also understands that stop transfer
instructions will be given to JPFI's transfer agent with respect to JPFI Common
Stock and that a legend will be placed on the certificates for the JPFI Common
Stock issued to such Stockholder, or any substitutions therefor, to the extent
such Stockholder is considered an "affiliate" of Rykoff at the time the Merger
Agreement is submitted to a vote of the stockholders of Rykoff.
Section 4. Pooling Covenants and Representations. Each
Stockholder hereby agrees and represents to JPFI that such Stockholder will not
sell, transfer or otherwise dispose of any securities of Rykoff or of any shares
of JPFI Common Stock received by such Stockholder in the Merger or other shares
of capital stock of JPFI during the period beginning 30 days prior to the
Effective Time and ending at such time as results covering at least 30 days of
combined operations of Rykoff and JPFI have been published by JPFI, in the form
of a quarterly earnings report, an effective registration statement filed with
the SEC, a report to the SEC on Form 10-K, 10-Q or 8-K, or any other public
filing or announcement which includes the
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combined results of operations, except for transfers or other dispositions that,
taking into account the actions of other affiliates of Rykoff, will not prevent
JPFI from accounting for the Merger as a pooling of interests.
Section 5. Further Assurances. Each of JPFI and the
Stockholders shall execute and deliver such additional instruments and other
documents and shall take such further actions as may be necessary or appropriate
to effectuate, carry out and comply with all of its obligations under this
Agreement. Without limiting the generality of the foregoing, none of JPFI or any
of the Stockholders shall enter into any agreement or arrangement (or alter,
amend or terminate any existing agreement or arrangement) if such action would
materially impair the ability of any party to effectuate, carry out or comply
with all the terms of this Agreement.
Section 6. Representations and Warranties of JPFI. JPFI
represents and warrants to each Stockholder as follows: Each of this Agreement
and the Merger Agreement has been approved by the Board of Directors of JPFI,
representing all necessary corporate action on the part of JPFI other than
approval of the Merger Agreement by the stockholders of JPFI. Each of this
Agreement and the Merger Agreement has been duly executed and delivered by a
duly authorized officer of JPFI. Each of this Agreement and the Merger Agreement
constitutes a valid and binding agreement of JPFI, enforceable against JPFI in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
application which may affect the enforcement of creditors' rights generally and
by general equitable principles. JPFI covenants and agrees that, effective as of
the Effective Time, JPFI shall assume the rights and obligations of Rykoff under
that certain Registration Rights Agreement, dated as of May 17, 1996, by and
among Rykoff and the other persons whose signatures are set forth on the
signature pages thereto pursuant to an agreement in form and substance
satisfactory to JPFI and such other persons.
Section 7. Representations and Warranties of Stockholders.
Each Stockholder represents and warrants to JPFI that this Agreement (i) has
been duly authorized, executed and delivered by such Stockholder and (ii)
constitutes the valid and binding agreement of such Stockholder, enforceable
against such Stockholder in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general application which may affect the enforcement of
creditors' rights generally and by general equitable principles. Each such
Stockholder is the record and beneficial owner of the Subject Shares set forth
opposite its respective name on Schedule I. The Subject Shares listed next to
the name of such Stockholder on Schedule I hereto are the only voting securities
of Rykoff owned (beneficially or of record) by such Stockholder. Neither the
execution or delivery of this Agreement nor the consummation by such Stockholder
of the transactions contemplated hereby will violate (a) the certificate of
incorporation, by-laws, partnership agreement or other organizational document,
as applicable, of any such Stockholder, or (b) any provisions of any law, rule
or regulation applicable to such Stockholder or any contract or agreement to
which such Stockholder is a party, other than such violations described in the
foregoing clause (b) as would not prevent or materially delay the performance by
such Stockholder
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of its obligations hereunder or impose any liability or obligation on JPFI. Each
Stockholder agrees that, at or prior to the Effective Time, it shall represent
to Rykoff, JPFI or their respective counsel that, during the two-year period
immediately following the Effective Time, it shall not (other than incident or
pursuant to an Extraordinary Transaction) sell, exchange or otherwise dispose of
(or enter into an agreement to sell, exchange or otherwise dispose of) shares of
JPFI Common Stock equal to more than the lesser of (i) 25% or (ii) the Shortfall
Percent, in each case of the shares of JPFI Common Stock received by it in the
Merger. The "Shortfall Percent" shall equal that percentage of the total number
of shares of JPFI Common Stock issued in the Merger as, when added to the
following percentage of shares of JPFI Common Stock, shall equal 45%: 100% minus
the sum of (i) the percent of shares of JPFI Common Stock issuable in the Merger
to the Stockholders and (ii) the percent of shares of JPFI Common Stock issuable
in the Merger to any other persons that can be identified immediately prior to
the Merger as holding 5% or more of the total number of shares of Rykoff Common
Stock outstanding at such time (for which purposes shares held by a family of
mutual funds shall, to the extent possible, be identified with separate funds
within such family and, to the extent so separately identifiable, treated as
separate stockholders). For purposes of the restriction on disposition of JPFI
Common Stock pursuant to the foregoing representation, the shares of JPFI Common
Stock held by the Stockholders shall be aggregated, and the Stockholders shall
be regarded as a single Stockholder. Notwithstanding the foregoing, no
Stockholder shall be required to provide the representation described herein if,
as a result of a change in law (including, without limitation, a change pursuant
to Treasury regulations that may be applied, by election or otherwise, to the
Merger), the facts intended to be reached by such representation are not a
necessary condition for qualification of the Merger under Section 368 of the
Internal Revenue Code of 1986, as amended.
For purposes of this Section 7, an "Extraordinary Transaction"
means a merger, consolidation or other business combination, tender or exchange
offer, share exchange, restructuring, recapitalization or other similar
transaction involving JPFI, so long as any such transaction is not arranged as
part of an overall plan to which such Stockholder is a party and pursuant to
which the Merger is also being consummated.
Section 8. Effectiveness and Termination. It is a condition
precedent to the effectiveness of this Agreement that the Merger Agreement shall
have been executed and delivered and be in full force and effect. In the event
the Merger Agreement is terminated in accordance with its terms, this Agreement
shall automatically terminate and be of no further force or effect. Upon such
termination, except for any rights any party may have in respect of any breach
by any other party of its or his obligations hereunder, none of the parties
hereto shall have any further obligation or liability hereunder.
Section 9. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or
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<PAGE>
otherwise), when delivered by telecopy and confirmed by return telecopy, or
seven days after being mailed by first-class mail, postage prepaid in each case
to the applicable addresses set forth below:
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If to JPFI:
9830 Patuxent Woods Drive
Columbia, Maryland 21046
Attn: David M. Abramson, Esq.
Telecopy: (410) 312-7149
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Edward D. Herlihy, Esq.
Telecopy: (212) 403-2000
If to any Stockholder:
Merrill Lynch Capital Partners, Inc.
225 Liberty Street
New York, New York 10080-6123
Attn: James V. Caruso
Telecopy: (212) 236-7364
with a copy to:
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281-1323
Attn: Marcia L. Tu, Esq.
Telecopy: (212) 449-3207
and a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attn: Bonnie Greaves, Esq.
Telecopy: (212) 848-7179
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If to Rykoff:
Rykoff-Sexton, Inc.
1050 Warrenville Road
Lisle, Illinois
Telecopy No. (717) 830-7112
Attention: Robert J. Harter, Jr., Esq.
with a copy to:
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 10022
Telecopy No.: (312) 782-8585
Attention: Elizabeth Kitslaar, Esq.
or to such other address as such party shall have
designated by notice so given to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by an instrument in writing signed by JPFI, each of the Stockholders and
Rykoff.
(c) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the parties and
their respective successors and assigns, including without limitation in the
case of any corporate party hereto any corporate successor by merger or
otherwise, and in the case of any individual party hereto any trustee, executor,
heir, legatee or personal representative succeeding to the ownership of such
party's Subject Shares or other securities subject to this Agreement.
Notwithstanding any transfer of Subject Shares, the transferor shall remain
liable for the performance of all obligations under this Agreement of the
transferor.
(d) Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. There are no representations, warranties or covenants by the
parties hereto relating to such subject matter other than those expressly set
forth in this Agreement.
(e) Severability. If any term of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such term to the other parties or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by applicable law,
provided that in such event the parties shall negotiate in good faith in an
attempt to agree to another provision (in lieu of the term or application held
to be invalid or unenforceable) that will
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be valid and enforceable and will carry out the parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(i) No Third-Party Beneficiaries. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any person or
entity who or which is not a party hereto.
(j) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware or the
United States District Court for the Southern District of New York or any court
of the State of New York located in the City of New York in any action, suit or
proceeding arising in connection with this Agreement, and agrees that any such
action, suit or proceeding shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this paragraph (j) and shall not be deemed to be a
general submission to the jurisdiction of said Courts or in the States of
Delaware or New York other than for such purposes. Each party hereto hereby
waives any right to a trial by jury in connection with any such action, suit or
proceeding.
(k) Governing Law. This Agreement and all disputes hereunder
shall be governed by and construed and enforced in accordance with the General
Corporation Law of the State of Delaware to the fullest extent possible and
otherwise by the internal laws of the State of New York without regard to
principles of conflicts of law.
(l) Name, Captions, Gender. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
shall not affect the interpretation
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or construction hereof. Whenever the context may require, any pronoun used
herein shall include the corresponding masculine, feminine or neuter forms.
(m) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one instrument. Each counterpart may consist of
a number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Limitation on Liability. No Stockholder shall have any
liability hereunder for any actions or omissions of any other Stockholder.
(o) Expenses. JPFI and Rykoff shall each bear its own
expenses, and Rykoff shall bear the reasonable expenses of the Stockholders,
incurred in connection with this Agreement and the transactions contemplated
hereby, except that in the event of a dispute concerning the terms or
enforcement of this Agreement, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
JP FOODSERVICE, INC.
By: /s/ James Miller
----------------------------------------
Name and Title: James L. Miller,
Chairman, President and Chief
Executive Officer
MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MERRILL LYNCH CAPITAL APPRECIATION
PARTNERSHIP NO. B-XVIII, L.P.
By: Merrill Lynch LBO Partners No. B-IV,
L.P., as General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
[SUPPORT AGREEMENT]
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<PAGE>
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
ML OFFSHORE LBO PARTNERSHIP NO. B-
XVIII
By: Merrill Lynch LBO Partners
No. B-IV, L.P., as Investment General
Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
ML IBK POSITIONS, INC.
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
[SUPPORT AGREEMENT]
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<PAGE>
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MERRILL LYNCH CAPITAL APPRECIATION
PARTNERSHIP NO. XIII, L.P.
By: Merrill Lynch LBO Partners No. IV, L.P.,
as General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
[SUPPORT AGREEMENT]
3
<PAGE>
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: Merrill Lynch LBO Partners No. IV, L.P.,
as Investment General Partner
By: Merrill Lynch Capital Partners, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
ML EMPLOYEES LBO PARTNERSHIP NO. I,
L.P.
By: ML Employees LBO Managers, Inc., as
General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as General
Partner
By: /s/ Matthias B. Bowman
----------------------------------------
Name and Title:
[SUPPORT AGREEMENT]
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<PAGE>
Rykoff hereby consents to the entry by each Stockholder into
this Agreement, and the consummation of the transactions expressly contemplated
hereby, in each case for purposes of Section 3.1(a) of the that certain
Standstill Agreement (the "Standstill Agreement"), dated as of May 17, 1996, by
and between RSI and the ML Entities (as defined therein). Rykoff represents and
warrants to JPFI that the entry by each Stockholder into this Agreement, and the
consummation of the transactions expressly contemplated hereby, each has been
previously approved by the affirmative vote of a majority of the Continuing
Directors (as defined in the Standstill Agreement) of Rykoff at a meeting at
which a Continuing Director Quorum (as defined in the Standstill Agreement) was
present. Rykoff also hereby acknowledges and consents to its obligations
pursuant to Section 9(o) hereof.
RYKOFF-SEXTON, INC.
By: /s/ Mark Van Stekelenburg
------------------------------
Name: Mark Van Stekelenburg
Title: Chairman and Chief Executive
Officer
[SUPPORT AGREEMENT]
5
