SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
JP Foodservice, Inc.
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
466232105
(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
December 23, 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 [__].
CUSIP No. 466232105
(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 7,814,745
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,814,745
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,814,745
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) HC, CO
CUSIP No. 466232105
(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 7,814,745
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,814,745
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,814,745
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) HC, CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. XIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
(2) Check the Appropriate Box if a Member of Group (See Instructions)
[__] (a)
[__] (b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e).
(6) Citizenship or Place of Organization Delaware
Number of (7) Sole Voting Power -0-
Shares
Beneficially (8) Shared Voting Power 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) CO
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
CUSIP No. 466232105
(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 7,808,898
Owned by
Each (9) Sole Dispositive Power -0-
Reporting
Person (10) Shared Dispositive Power 7,808,898
With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,808,898
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 17.3%
(14) Type of Reporting Person (See Instructions) PN
Item 1. Security and Issuer.
The class of equity securities to which this Statement on Schedule
13D relates is the common stock, par value $.01 per share (the "Issuer Common
Stock"), of JP Foodservice, Inc., a Delaware corporation (the "Issuer"). The
address of the Issuer's principal executive offices is 9830 Patuxent Woods
Drive, Columbia, Maryland 21046.
Item 2. Identity and Background.
This Statement is being filed by (a) Merchant Banking L.P. No. II, (b) ML
Employees LBO Partnership No. I, L.P., (c) Merrill Lynch Capital Appreciation
Partnership No. XIII, L.P., (d) ML Offshore LBO Partnership No. XIII, (e)
Merrill Lynch Capital Appreciation Partnership No. B-XVIII, L.P., (f) ML
Offshore LBO Partnership No. B-XVIII, (g) MLCP Associates L.P. No. II, (h) MLCP
Associates L.P. No. IV, (i) ML IBK Positions, Inc., (j) Merrill Lynch KECALP
L.P. 1987, (k) Merrill Lynch KECALP L.P. 1991, (l) Merrill Lynch KECALP L.P.
1994 (collectively, the "ML Investors"), (m) Merrill Lynch & Co., Inc., (n)
Merrill Lynch Group, Inc., (o) Merrill Lynch MBP Inc., (p) Merrill Lynch Capital
Partners, Inc., (q) ML Employees LBO Managers, Inc., (r) Merrill Lynch LBO
Partners No. IV, (s) Merrill Lynch LBO Partners No. B-IV and (t) KECALP, Inc.
(collectively with the ML Investors, the "Filing ML Entities").
Merrill Lynch Group, Inc. is a wholly owned subsidiary of Merrill Lynch &
Co. Inc. Merrill Lynch MBP Inc., Merrill Lynch Capital Partners, Inc., ML IBK
Positions, Inc. and KECALP Inc. are wholly owned subsidiaries of Merrill Lynch
Group, Inc. Merrill Lynch MBP Inc. is the general partner of Merchant Banking
L.P. II. Merrill Lynch Capital Partners, Inc. is the general partner of Merrill
Lynch LBO Partners No. IV, Merrill Lynch LBO Partners No. B-IV, MLCP Associates
L.P. No. II and MLCP Associates L.P. No. IV. ML Employees LBO Managers, Inc. is
a wholly owned subsidiary of Merrill Lynch Capital Partners, Inc. ML Employees
LBO Managers, Inc. is the general partner of ML Employees LBO Partnership No. I
L.P. Merrill Lynch LBO Partners No. IV is the general partner of Merrill Lynch
Capital Appreciation Partnership No. XIII, L.P. and the investment general
partner of ML Offshore LBO Partnership No. XIII. Merrill Lynch LBO Partners No.
B-IV is the general partner of Merrill Lynch Capital Appreciation Partnership
No. B-XVIII, L.P. and the investment general partner of ML Offshore LBO
Partnership No. B-XVIII. KECALP, Inc. is the general partner of Merrill Lynch
KECALP L.P. 1987, Merrill Lynch KECALP L.P. 1991 and Merrill Lynch KECALP L.P.
1994. Merrill Lynch International, Inc. is a wholly owned subsidiary of Merrill
Lynch & Co., Inc., and Merrill Lynch International Capital Management (Guernsey)
II Limited is a wholly owned subsidiary of Merrill Lynch International, Inc.
Merrill Lynch International Capital Management (Guernsey) II Limited is the
administrative general partner of both ML Offshore LBO Partnership No. XIII and
ML Offshore LBO Partnership No. B-XVIII.
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. and Merrill Lynch International, Inc.
(collectively, the "ML Domestic Corporate Entities") are each corporations
organized under the laws of the state of Delaware, and Merrill Lynch
International Capital Management (Guernsey) II Limited (together with the ML
Domestic Corporate Entities, the "ML Corporate Entities") is a corporation
organized under the laws of Guernsey, Channel Islands. Merchant Banking L.P. No.
II, ML Employees LBO Partnership No. I, L.P., Merrill Lynch LBO Partners No. IV,
Merrill Lynch LBO Partners No. B-IV, Merrill Lynch Capital Appreciation
Partnership No. XIII, L.P., Merrill Lynch Capital Appreciation Partnership No.
B-XVIII, L.P., MLCP Associates L.P. No. II, MLCP Associates L.P. No. IV, Merrill
Lynch KECALP L.P. 1987, Merrill Lynch KECALP L.P. 1991 and Merrill Lynch KECALP
L.P. 1994 (collectively, the "ML Domestic Partnerships") are each limited
partnerships organized under the laws of the State of Delaware. ML Offshore LBO
Partnership No. XIII and ML Offshore LBO Partnership No. B-XVIII (collectively,
the "ML Offshore Partnerships") are each limited partnerships organized under
the laws of the Cayman Islands.
Attached hereto as Appendix A is a list of each of the ML
Corporate Entities, each of the ML Domestic Partnerships and each of the ML
Offshore Partnerships setting forth the following information with respect to
each such entity:
(a) name;
(b) principal business; and
(c) address of principal business and office.
Attached hereto as Appendix B is a list of the executive officers
and directors of each ML Corporate Entity setting forth the following
information with respect to each such person:
(a) name;
(b) business address (or residence where indicated);
(c) present principal occupation or employment and the name,
principal business and address of any corporation or
other organization in which such employment is conducted;
and
(d) citizenship.
During the last five years, no entity listed on Appendix A and, to
the knowledge of the Filing ML Entities, no person listed on Appendix B, has
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and, as a result of
such proceeding, was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
This statement relates to shares of the Issuer Common Stock that
the ML Investors received as consideration in the merger (the "Merger") of
Rykoff-Sexton, Inc., a Delaware corporation ("Rykoff"), with and into Hudson
Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary
of the Issuer ("Merger Sub"), in accordance with the terms and conditions of an
Agreement and Plan of Merger dated as of June 30, 1997, as amended (the "Merger
Agreement"), among the Issuer, Merger Sub and Rykoff. On December 23, 1997,
pursuant to the Merger Agreement, (A) the Merger was consummated, and (B) each
outstanding share of Common Stock, par value $.10 per share, of Rykoff (the
"Rykoff Common Stock") was converted into the right to receive 0.775 of a share
of Issuer Common Stock (or cash in lieu of fractional shares of Issuer Common
Stock). Immediately prior to the Merger, the ML Investors owned 10,076,004
shares of Rykoff Common Stock, which represented approximately 35.2% of the then
outstanding shares of Rykoff Common Stock.
A copy of the Merger Agreement is attached hereto as Exhibit A and
is hereby incorporated herein by reference.
Item 4. Purpose of Transaction.
The Issuer Common Stock was acquired by the ML Investors pursuant
to the Merger. The Issuer Common Stock so acquired by the ML Investors is being
held for investment purposes and not with the intention of acquiring control of
the Issuer.
The Filing ML Entities from time to time intend to review their
respective investments in the Issuer on the basis of various factors, including
the Issuer's business, financial condition, results of operations and prospects,
general economic and industry conditions, the securities markets in general and
those for the Issuer's securities in particular, as well as other developments
and other investment opportunities. Based upon such review, and subject to the
restrictions set forth in the agreements referred to below, the Filing ML
Entities will take such actions in the future as the Filing ML Entities may deem
appropriate in light of the circumstances existing from time to time.
Pursuant to the Merger Agreement, upon the consummation of the
Merger, the Board of Directors of the Issuer was increased from nine to
seventeen directors and two of the directors were designated by Merrill Lynch
Capital Partners, Inc.
Merrill Lynch Capital Partners, Inc. and the ML Investors
(collectively, the "ML Entities") are parties to certain agreements with the
Rykoff and the Issuer described in Item 6 below and the information contained in
Item 6 is hereby incorporated herein by reference.
None of the Filing ML Entities has formulated any plans or
proposals that relate to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
The Filing ML Entities beneficially own an aggregate of 7,808,898
shares of Issuer Common Stock, representing approximately 17.3% of the total
currently outstanding.
For each Filing ML Entity, the information contained in Items 7
through 11 and Item 13 on the applicable cover page hereto regarding such Filing
ML Entity is hereby incorporated herein by reference.
Each Filing ML Entity disclaims beneficial ownership of the shares
of Issuer Common Stock not held of record by such Filing ML Entity.
Messrs. Bowman and Fitzgibbons (two individuals listed on Appendix
B) directly own 38,750 and 7,750 shares of Issuer Common Stock, respectively.
None of the entities listed on Appendix A and, to the knowledge of the Filing ML
Entities, no other person listed on Appendix B, has any contract, arrangement,
understanding or relationship (legal or otherwise) with either Mr. Bowman or Mr.
Fitzgibbons with respect to such shares of Issuer Common Stock, including, but
not limited to, transfer or voting of any such shares, 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.
None of the entities listed on Appendix A and, to the knowledge of
the Filing ML Entities, no person listed on Appendix B has effected any
transaction in the Issuer Common Stock during the past 60 days, in each case,
other than the acquisition of the Issuer Common Stock pursuant to the Merger.
The Merger and the Merger Agreement are described in Item 3 hereof, and the
information contained in Item 3 is hereby incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The Issuer and the ML Entities entered into a support agreement
dated as of June 30, 1997 in connection with the execution by the Issuer and
Rykoff of the Merger Agreement. Subsequently, the Issuer and the ML Entities
entered into an Amended and Restated Support Agreement dated as of June 30, 1997
(the "Support Agreement"). Each ML Entity agreed, pursuant to the Support
Agreement, among other things, 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 its subsidiaries, or the acquisition of voting securities of the
Issuer or its subsidiaries, or the merger or consolidation of the Issuer or any
of its subsidiaries with or into any corporation or other entity, other than the
Merger or related transactions. A copy of the Support Agreement is attached
hereto as Exhibit B and is hereby incorporated herein by reference.
The ML Entities have entered into certain agreements with Rykoff,
described below, which the Issuer has expressly assumed or which otherwise
remain in effect.
Rykoff and the ML Entities are parties to an agreement which
imposes certain standstill, voting and transfer restrictions on the ML Entities,
and provides for representation on the Rykoff Board of Directors and certain
committees thereof by individuals selected by the ML Entities (the "Standstill
Agreement"). The Standstill Agreement remains in full force and effect.
The following describes the provisions of the Standstill Agreement
as in effect immediately prior to the Merger. The Standstill Agreement provided,
among other things, (i) for the designation by the ML Entities of four nominees
to Rykoff's Board of Directors, with such number of nominees and Board members
decreasing if the percentage of outstanding shares of Rykoff Common Stock held
by the ML Entities fell below certain levels, (ii) that, for a period of ten
years, the ML Entities would not acquire beneficial ownership of additional
voting securities of Rykoff representing voting power in excess of 36.4% of the
outstanding voting securities of Rykoff and would not take certain other actions
relating to the control of Rykoff, (iii) that the ML Entities would vote in
favor of Rykoff's nominees for Rykoff's Board of Directors, (iv) for certain
restrictions on transfer of Rykoff's voting securities held by the ML Entities
and (v) for a right of first refusal, under specified circumstances, for Rykoff
in respect of certain transfers by the ML Entities of shares of Rykoff Common
Stock. Notwithstanding the foregoing, the Standstill Agreement provided that
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") and its affiliates
(other than the ML Entities) could effect or recommend transactions in the
ordinary course of its or their business provided that they did not acquire
beneficial ownership of more than 2% of the outstanding voting securities of
Rykoff (with such percentage increasing up to 5% if the percentage of
outstanding voting securities of Rykoff held by the ML Entities fell below
certain levels). A copy of the Standstill Agreement is attached hereto as
Exhibit C and is incorporated herein by reference.
Rykoff and the ML Investors are parties to an agreement (the
"Registration Rights Agreement") which provides the ML Investors with certain
"demand" and "piggyback" registration rights and certain other parties with
"piggyback" registration rights, subject to certain conditions, requiring Rykoff
to register for sale under the Securities Act all or a portion of Rykoff Common
Stock owned by them. JP Foodservice has expressly assumed the obligations of
Rykoff under the Registration Rights Agreement pursuant to an assumption
agreement (the "Assumption Agreement") dated as of December 23, 1997. A copy of
the Registration Rights Agreement is attached hereto as Exhibit D and is
incorporated herein by reference. A copy of the Assumption Agreement is attached
hereto as Exhibit E and is incorporated herein by reference.
Except for the Support Agreement, the Standstill Agreement and the
Registration Rights Agreement (including the related Assumption Agreement), none
of the entities listed on Appendix A and, to the knowledge of the Filing ML
Entities, no person listed on Appendix B, 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.
Item 7. Material to be Filed as Exhibits.
A. Agreement and Plan of Merger dated as of June 30, 1997, as amended, among the Issuer,
Merger Sub and Rykoff.
B. Amended and Restated Support Agreement dated as of June 30, 1997, among the Issuer and the
ML Entities, acknowledged by Rykoff.
C. Standstill Agreement dated as of May 17, 1996 among the ML Entities, certain other
stockholders of Rykoff and Rykoff.
D. Registration Rights Agreement dated as of May 17, 1996 among the ML Investors and Rykoff.
E. Assumption Agreement dated as of December 23, 1997, with respect to Registration Rights
Agreement, by JP Foodservice.
F. Joint Filing Agreement dated as of December 31, 1997 among the Filing ML Entities.
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.
January 2, 1998 MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
Exhibit Index
Exhibit Description Page
A. Agreement and Plan of Merger dated as of June 30,
1997, as amended, among the Issuer, Merger Sub
and Rykoff. A-1
B. Amended and Restated Support Agreement dated as
of June 30, 1997, among the Issuer and the ML
Entities, acknowledged by Rykoff. B-1
C. Standstill Agreement dated as of May 17, 1996
among the ML Entities, certain other stockholders
of Rykoff and Rykoff. C-1
D. Registration Rights Agreement dated as of May 17,
1996 among the ML Investors and Rykoff. D-1
E. Assumption Agreement dated as of December 23,
1997, with respect to Registration Rights
Agreement, by JP Foodservice. E-1
F. Joint Filing Agreement dated as of December 31,
1997 among the Filing ML Entities. F-1
APPENDIX A
CORPORATIONS AND LIMITED PARTNERSHIPS
The names and principal businesses of the reporting entities are set forth
below. Unless otherwise noted, the ML Corporate Entities and the ML Domestic
Partnerships have as the address of their principal business and office 225
Liberty St., New York, NY 10080; and the ML Offshore Partnerships have as the
address of their principal business and office c/o CIBC Bank and Trust Company
(Cayman) Limited, P.O. Box 694 GT, Edward Street, Grand Cayman, Cayman Islands.
NAME PRINCIPAL BUSINESS
ML Corporate Entities
- ---------------------
Merrill Lynch & Co., Inc. 1 Holding Company that, through its subsidiaries
and affiliates, provides investment, financing,
insurance and related services on a global
basis.
Merrill Lynch Group, Inc.2 Holding Company.
Merrill Lynch MBP Inc. Acts as general partner for Merchant Banking L.P. No. II.
Merrill Lynch Capital Partners, Inc. Acts as general partner for various investment partnerships.
ML IBK Positions, Inc. Holds proprietary investments for Merrill Lynch & Co., Inc.
KECALP Inc. Acts as general partner for various KECALP investment partnerships.
ML Employees LBO Managers, Inc. Acts as general partner for ML Employees LBO Partnership No. 1, L.P.
Merrill Lynch International Incorporated 3 Provides through its subsidiaries and affiliates
investment, financing, insurance and related
services outside the US and Canada.
Merrill Lynch International Capital Management Acts as administrative General Partner for various
(Guernsey) II Limited 4 investment partnerships.
ML Domestic Partnerships
- ------------------------
Merchant Banking L.P. No. II Investment partnership.
ML Employees LBO Partnership No. I, L.P. Investment partnership.
Merrill Lynch LBO Partners No. IV Acts as general partner for various investment
partnerships.
Merrill Lynch LBO Partners No. B-IV Acts as general partner for various investment
partnerships.
Merrill Lynch Capital Appreciation Partnership No. Investment partnership.
XIII, L.P.
Merrill Lynch Capital Appreciation Partnership No. Investment partnership.
B-XVIII, L.P.
MLCP Associates L.P. No. II Investment partnership.
MLCP Associates L.P. No. IV Investment partnership.
Merrill Lynch KECALP L.P. 1987 Investment partnership.
Merrill Lynch KECALP L.P. 1991 Investment partnership.
Merrill Lynch KECALP L.P. 1994 Investment partnership.
ML Offshore Partnerships
- ------------------------
ML Offshore LBO Partnership No. XIII Investment partnership.
ML Offshore LBO Partnership No. B-XVIII Investment partnership.
APPENDIX B
EXECUTIVE OFFICERS AND DIRECTORS
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. Bourke 5 Former Chairman and CEO, Reynolds Metals Co.
Director
Worley H. Clark 6 Former Chairman and CEO, Nalco Chemical Co.
Director
Jill K. Conway 7 Visiting Scholar, Massachusetts Institute of
Director Technology
Edward L. Goldberg Same
Exec. VP, Operations,
Systems & Communications
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch & Co., Inc.(Cont.)
- --------------------------------
Stephen L. Hammerman Same
Vice Chairman, Director & General Counsel
Earle H. Harbison, Jr. 8 Chairman, Harbison Corporation
Director
George B. Harvey 9 Chairman, President & CEO, Pitney Bowes Inc.
Director
William R. Hoover 10 Chairman & Former CEO, Computer Sciences Corp.
Director
Jerome P. Kenney Same
Exec. VP, Corp. Strategy & Research
Herbert M. Allison, Jr. Same
President, COO & Director
Robert P. Luciano 11 Chairman, Schering-Plough Corporation
Director
David K. Newbigging 12 Chairman of Equitas Holdings Limited
Director
Aulana L. Peters 13 Partner of Gibson, Dunn & Crutcher
Director
John J. Phelan, Jr. Senior Advisor, Boston Consulting Group
Director
Winthrop H. Smith, Jr. 14 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. Weiss 15 Chairman Emeritus, Ameritech Corporation
Director
Joseph T. Willet Same
CFO & Senior VP
Arthur H. Zeikel 16 Same
Exec. V.P., Merrill Lynch Asset Management Group
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch Group, Inc.
- ------------------------
Mark B. Goldfus Senior VP & Associate General Counsel
Director & Vice President
Theresa Lang Senior VP & Treasurer
Director & President & Treasurer
Stanley Schaefer 17 Director of Tax
Director & Vice President
Michael J. Castellano Director, Corporate Reporting
Director & Vice President
Allen G. Braithwaite, III, 18 Same
Vice President
Richard S. Miller Same
Vice President
H. Allen White 19 Director, Corporate Real Estate and Purchasing
Vice President
Merrill Lynch MBP Inc.
- ----------------------
Herbert M. Allison, Jr Exec. VP, Corporate and Institutional Client Group
Vice President & Director
Matthias B. Bowman Vice Chairman, Investment Banking
President
James V. Caruso 20 Director, Partnership Analysis and Management
Treasurer & Vice President
Thomas W. Davis Co-head, Investment Banking
Vice President & Director
Barry S. Friedberg Exec. VP
Director
Theresa Lang Senior VP & Treasurer
Vice President & Director
Jack Levy Managing Director and Co-head, M&A
Vice President & Director
Robert F. Tully 21 Vice President, Investment Banking
Treasurer & Vice President
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
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.22 Managing Partner, Stonington Partners, Inc.
Director
James V. Caruso Director, Partnership Analysis and Management
Vice President, Treasurer
Evelyne Estey Director, M&A
Director
Robert F. End 23 Partner, Stonington Partners, Inc.
Director
Albert J. Fitzgibbons III 24 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. McLean 25 Partner, Stonington Partners, Inc.
Director
Ross D. McMahon 26 VP, Partnership Analysis and Management
Vice President
Alexis P. Michas 27 Partner and COO, Stonington Partners, Inc.
Director
Jerry G. Rubenstein 28 Independent Adviser, Omni Management Associates
Director
Rupinder S. Sidhu 29 Partner, Stonington Partners, Inc.
Director
Nathan C. Thorne Managing Director, Investment Banking
Vice President, Director
Robert W. Williamson 30 Senior VP & Chief Credit Officer
Director
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
ML IBK Positions, Inc.
- ---------------------
Matthias B. Bowman Vice Chairman, Investment Banking
President, Director
James V. Caruso 31 Director, Partnership Analysis and Management
Vice President, Director
Jeffrey A. Gelfand FVP & Director, Finance & Administration
Vice President, Director
Mark McAndrews CAO, Investment Banking
Vice President, Director
Nathan C. Thorne Managing Director, Investment Banking
Vice President
Neven Viducic VP, Accounting
Treasurer
KECALP, Inc.
- -----------
Matthias B. Bowman Vice Chairman, Investment Banking
President & Director
James V. Caruso 32 Director, Partnership Analysis and Management
Director
Mark B. Goldfus Senior VP & Associate General Counsel
Vice President & Director
Andrew J. Melnick Director, Global Fundamental Equity Research
Vice President & Director
John L. Steffens
Chairman & Director
Daniel G. Tully
Director
Patrick J. Walsh Senior VP & Director, Human Resources
Vice President & Director
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
ML Employees LBO Managers, Inc.
- ------------------------------
Kevin K. Albert Managing Director, Private Equity Group,
Director Investment Banking
Daniel H. Bayly Co-head, Investment Banking
Director
Matthias B. Bowman Vice Chairman, Investment Banking
President, Director
James V. Caruso 33 Director, Partnership Analysis and Management
Vice President, Treasurer, Director
Alfred F. Hurley, Jr.
Director
Jeffrey M. Peek Director, Research
Vice President, Director
Nathan C. Thorne Managing Director, Investment Banking
Vice President
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch International Incorporated
- ----------------------------------------
Winthrop H. Smith, Jr. 34 Same
Chairman, Director
Michael J.P. Marks35 Co-head, Global Equities, Merrill Lynch
Deputy Chairman, Director International
Donald N. Gershuny General Counsel, Private Client
Senior Vice President, Director
Carlos M. Morales Senior VP & General Counsel, Corporate &
Senior Vice President, Director Institutional Client
Ronald J. Strauss FVP, Merrill Lynch International
Senior Vice President and COO, Director
Paul J. O'Sullivan Senior Finance Officer, Treasury
Senior Vice President & CFO
Anthony Vanadia Same
Vice President & Treasurer
Malcolm B. Binks Same
Senior Vice President
Brian C. Henderson Same
Senior Vice President
NAME/POSITION PRESENT PRINCIPAL OCCUPATION
- ------------- ----------------------------
Merrill Lynch International Capital Management
(Guernsey) II Ltd.
- ----------------------------------------------
James V. Caruso 36 Director, Partnership Analysis and Management
Director
Roger O. Healy 37 Secretary, Merrill Lynch Bank & Trust Company
Director (Cayman) Limited
Jonathan S. Nicholson 38 Managing Director
Director
1 250 Vesey St., New York, NY 10281.
2 250 Vesey St., New York, NY 10281.
3 250 Vesey St., New York, NY 10281.
4 CIBC Bank and Trust Company (Cayman) Limited
P.O. Box 694GT, Edward Street
Grand Cayman, Cayman Islands
5 Reynolds Metal Company
6601 West Broad St.
Richmond, VA 23230
6 W. H. Clark Associates, Ltd.
135 South LaSalle St.
Suite 1117
Chicago, IL 60603
7 Massachusetts Institute of Technology
Program on Science, Technology & Society
STS Building
E-51, Room 209 F
Cambridge, MA 02139
8 Harbison Corporation
7700 Bonhomme Ave.
Suite 750
St. Louis, MO 63105
9 Pitney Bowes Inc.
World Headquarters
Location #65-27
One Elmcroft Road
Stamford, CT 06926-0700
10 Computer Sciences Corp.
2100 East Grand Ave.
El Segundo, CA 90245
11 Schering-Plough Corp.
P.O. Box 1000
One Giralda Farms
Madison, NJ 07940-1000
12 Wah Kwong House, 9th Floor
10 Albert Embankment
London SEI 7SP
13 Gibson, Dunn & Crutcher
333 South Grand Ave.
47th Floor
Los Angeles, CA 90071
14 225 Liberty St.
New York, NY 10080
15 One First National Plaza
21 South Clark St.
Suite 2530C
Chicago, IL 60603-2006
16 Merrill Lynch Asset Management
800 Scudders Mill Rd.
Plainsboro, NJ 08536
17 225 Liberty St.
New York, NY 10080
18 225 Liberty St.
New York, NY 10080
19 225 Liberty St.
New York, NY 10080
20 225 Liberty St.
New York, NY 10080
21 225 Liberty St.
New York, NY 10080
22 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
23 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
24 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
25 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
26 225 Liberty St.
New York, NY 10080
27 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
28 123 Coulter Ave.
Ardmore, PA 19003
29 Stonington Partners, Inc.
767 Fifth Avenue
48th Floor
New York, NY 10153
30 225 Liberty St.
New York, NY 10080
31 225 Liberty St.
New York, NY 10080
32 225 Liberty St.
New York, NY 10080
33 225 Liberty St.
New York, NY 10080
34 225 Liberty St.
New York, NY 10080
35 P.O. Box 293
20 Farringdon Road
London EC1M 3NH, England
36 225 Liberty St.
New York, NY 10080
37 Merrill Lynch Bank and Trust Co. (Cayman) Ltd.
P.O. Box 1164
British American Building
Phase III, 5th Floor
Jennett Street
Georgetown, Grand Cayman BWI
38 Merrill Lynch Bank and Trust Co. (Cayman) Ltd.
P.O. Box 1164
British American Building
Phase III, 5th Floor
Jennett Street
Georgetown, Grand Cayman BWI
Exhibit A
AGREEMENT AND PLAN OF MERGER dated as of June 30, 1997, as amended as of
September 3, 1997 and as of November 5, 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:
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 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, including 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 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:
(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
0.775 (the "Exchange Ratio") validly issued, fully paid and non-assessable
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) JPFI 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 unexercised 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 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 determined pursuant to the terms of Sections 2 and 3
of the Assumed Warrants, copies of which have been delivered to JPFI.
(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.
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 surrendered 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) Notwithstanding anything to the contrary
contained herein, no certificates 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 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 (i) disclosed
to an executive officer of JPFI in writing prior to the date of Amendment No. 2
to this Agreement or (ii) disclosed in (w) the Disclosure Schedule delivered by
RSI to JPFI prior to the execution of this Agreement as supplemented by the
Supplemental Disclosure Schedule attached to Amendment No. 2 to this Agreement
(collectively, the "RSI Disclosure Schedule"), (x) any RSI SEC Document (as
defined in Section 8.3) filed and publicly available prior to the date of
Amendment No. 2 to this Agreement (as amended to the date hereof, "RSI Filed SEC
Documents"), (y) the Form S-4 (as defined in Section 8.3) filed prior to the
date of this Amendment No. 2 or (z) any RSI Press Release (as defined in Section
4.1(a)), 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.
(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.
(b) Subsidiaries. Exhibit 21 to RSI's Annual Report on Form 10-K for the
fiscal year ended June 28, 1997 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 (336,637 as of September 27,
1997) 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, validly 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(h)), 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, (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),
conflicts, violations, or defaults that would not prevent RSI from consummating
the Merger under this Agreement. 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 the Support
Agreement (including, without limitation, Section 2.2(a) thereof).
(e) Financial Statements. To RSI's knowledge, the financial statements
included in RSI's Annual Report on Form 10-K for the fiscal year ended June 28,
1997 and such other periodic reports filed with the SEC under the Exchange Act
since such date 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 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 year-end audit adjustments).
(f) ERISA Compliance. (i) To RSI's knowledge, each RSI Benefit Plan (as
defined in Section 4.1(a)) has been administered in accordance with its terms,
except for any failures so to administer any RSI Benefit Plan that individually
or in the aggregate would not have a material adverse effect on RSI. To RSI's
knowledge, RSI, its subsidiaries and all the RSI Benefit Plans have been
operated, and are in compliance with the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("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. To RSI's
knowledge, no fact or event has occurred since the date of any determination
letter from the Internal Revenue Service ("IRS") that, to RSI's knowledge, is
reasonably likely to affect adversely the qualified status of any such RSI
Benefit Plan or the exempt status of any such trust.
(ii) To RSI's knowledge, 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 RSI's knowledge, there are not any facts
or circumstances that, to RSI's knowledge, would materially adversely 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.
(iii) With respect to any RSI Benefit Plan that is a multiemployer plan, to
RSI's knowledge (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.
(iv) To RSI's knowledge, 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.
(g) Taxes. (i) To RSI's knowledge, no deficiencies for any taxes have 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.
(ii) 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.
(h) 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.
(i) 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(m), (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.
(j) 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.
(k) 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.
(l) Opinions of Financial Advisors. RSI has received the opinions of
Merrill Lynch and Wasserstein, each dated the date of Amendment No. 2 to this
Agreement, to the effect that, as of such date, the Exchange Ratio for the
conversion of RSI Common Stock into JPFI Common Stock, as amended by such
Amendment No. 2, 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 on or before the date of Amendment No. 2 to
this Agreement, 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.
(m) 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.
(n) 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.
SECTION 3.2. Representations and Warranties of JPFI and Merger Sub. Except
(i) as disclosed to an executive officer of RSI in writing prior to the date of
Amendment No. 2 to this Agreement or (ii) disclosed in (w) the Disclosure
Schedule delivered by JPFI and Merger Sub to RSI prior to the execution of this
Agreement as supplemented by the Supplemental Disclosure Schedule attached to
Amendment No. 2 to this Agreement (collectively, the "JPFI Disclosure
Schedule"), (x) any JPFI SEC Document (as defined in Section 8.3) filed and
publicly available prior to the date of Amendment No. 2 to this Agreement (as
amended to the date hereof, "JPFI Filed SEC Documents"), (y) the Form S-4 filed
prior to the date of this Amendment No. 2 or (z) any JPFI Press Release (as
defined in Section 4.1(b)), 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.
(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.
(b) Subsidiaries. Exhibit 21 to JPFI's Annual Report on Form 10-K for the
fiscal year ended June 28, 1997, as amended, 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 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 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(h)), 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, (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), conflicts, violations or defaults that would not
prevent JPFI from consummating the Merger under this 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 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) Financial Statements. To JPFI's knowledge, the financial statements
included in JPFI's Annual Report on Form 10-K for the fiscal year ended June 28,
1997 and such other periodic reports filed with the SEC under the Exchange Act
since such date 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 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 year-end audit adjustments).
(f) ERISA Compliance. (i) To JPFI's knowledge, each JPFI Benefit Plan
(defined in Section 4.1(b)) 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. To JPFI's
knowledge, 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. To JPFI's knowledge, no fact or event has occurred since the date of any
determination letter from the IRS that, to JPFI's knowledge, is reasonably
likely to affect adversely the qualified status of any such JPFI Benefit Plan or
the exempt status of any such trust.
(ii) To JPFI's knowledge, 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 JPFI's knowledge, there are not any facts
or circumstances that, to JPFI's knowledge, would materially adversely 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.
(iii) With respect to any JPFI Benefit Plan that is a multiemployer plan,
to JPFI's knowledge, (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.
(iv) To JPFI's knowledge, 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), except that certain JPFI
Employee Stock Options may vest in connection with such transactions.
(g) Taxes. (i) To JPFI's knowledge, no deficiencies for any taxes have 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.
(ii) 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.
(h) 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.
(i) 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(m), 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.
(j) 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.
(k) 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.
(l) Opinions of Financial Advisors. JPFI has received the opinions of
Goldman and Smith Barney, each dated the date of Amendment No. 2 to this
Agreement, to the effect that, as of such date, the Exchange Ratio for the
conversion of RSI Common Stock into JPFI Common Stock, as amended by such
Amendment No. 2, is fair from a financial point of view to JPFI, signed copies
of which opinions have been delivered to RSI on or before the date of Amendment
No. 2 to this Agreement, 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.
(m) 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.
(n) 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.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. (a) Conduct of Business by RSI. Except (i) as disclosed to an
executive officer of JPFI in writing prior to the date of Amendment No. 2 to
this Agreement ("Amendment No. 2"), or (ii) as disclosed in (A) the RSI
Disclosure Schedule, (B) any RSI Filed SEC Document, or (C) any press release
issued by RSI prior to the date of this Amendment (each, an "RSI Press
Release"), (iii) as otherwise expressly contemplated by this Agreement or the
transactions contemplated thereby, or (iv) 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, (I) 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, (II) except as may be required by law or any plan, program,
contract or arrangement in effect on the date of Amendment No. 2, 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, (A) grant to any current or former
director, officer, any regional vice president or president of any division of
RSI or its subsidiaries any increase in compensation, bonus or other benefits,
except as required by employment agreements in effect as of April 27, 1996; (B)
grant to any such current or former director, officer, any regional vice
president or president of any division any increase in severance or termination
pay; or (C) enter into, or amend, any employment, deferred compensation,
consulting, severance, termination or indemnification agreement with any such
current or former director, officer, regional vice president or president of any
division, or (III) except as may be required by law or any plan, program,
contract or arrangement in effect on the date of Amendment No. 2, during the
period from the date of Amendment No. 2 to the Effective Time, RSI shall not,
and shall not permit any of its subsidiaries to adopt or amend, and to RSI's
knowledge since October 8, 1997, RSI has not and has not permitted any of its
subsidiaries to, adopt or amend, any collective bargaining agreement (other than
renegotiations required by any such collective bargaining agreement), employment
agreement, consulting agreement, severance agreement or any 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"), in any manner which would, individually, or in the
aggregate, involve amounts in excess of $1,000,000. Anything in this Section
4.1(a) to the contrary notwithstanding, RSI and any RSI subsidiary shall not be
deemed in violation of this Section 4.1(a) if such violation is cured prior to
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 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
the lesser of (x) 400,000 shares of RSI Common Stock in the aggregate and (y)
the number of shares of RSI Common Stock subject to RSI Employee Stock Options
issued during RSI's fiscal year ended June 28, 1997 and so long as no RSI
Employee Stock Option issued pursuant to this Section 4.1(a)(ii) shall contain
any terms providing for, or otherwise permit or give rise to any right to,
accelerated vesting, the releasing of restrictions or any payment (in cash or
otherwise) as a result of the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
(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) make any tax election that individually or in the aggregate would have
a material adverse effect on RSI or any of its tax attributes or settle or
compromise any material income tax liability;
(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 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 (i) as disclosed to an executive
officer of RSI in writing prior to the date of Amendment No. 2, or (ii) as
disclosed in (A) the JPFI Disclosure Schedule as amended by Schedule V to
Amendment No. 2, (B) any JPFI Filed SEC Document, or (C) any press release
issued by JPFI prior to the date of Amendment No. 2 (each, a "JPFI Press
Release"), (iii) as otherwise expressly contemplated by this Agreement or the
transactions contemplated thereby, or (iv) 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, (I) 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, (II) except as may be required by law or any plan, program,
contract or arrangement in effect on the date of Amendment No. 2, 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, (A) grant to any current or
former director, officer, any regional vice president or president of any
division of JPFI or its subsidiaries any increase in compensation, bonus or
other benefits, except as required by employment agreements in effect as of June
29, 1996; (B) grant to any such current or former director, officer, any
regional vice president or president of any division any increase in severance
or termination pay, or (C) enter into, or amend, any employment, deferred
compensation, consulting, severance, termination or indemnification agreement
with any such current or former director, officer or any regional vice president
or president of any division, or (III) except as may be required by law or any
plan, program, contract or arrangement in effect on the date of Amendment No. 2,
during the period from the date of Amendment No. 2 to the Effective Time, JPFI
shall not, and shall not permit any of its subsidiaries to adopt or amend, and
to JPFI's knowledge since October 8, 1997, JPFI has not and has not permitted
any of its subsidiaries to, adopt or amend, any collective bargaining agreement
(other than renegotiations required by any such collective bargaining
agreement), employment agreement, consulting agreement, severance agreement or
any 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"), in any
manner which would, individually, or in the aggregate, involve amounts in excess
of $1,000,000. Anything in this Section 4.1(b) to the contrary notwithstanding,
JPFI and any JPFI subsidiary shall not be deemed in violation of this Section
4.1(b) if such violation is cured prior to 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);
(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) make any tax election that individually or in the aggregate would have
a material adverse effect on JPFI or any of its tax attributes or settle or
compromise any material income tax liability;
(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 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 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 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 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 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. The certificate of incorporation and bylaws of
the Surviving Corporation shall contain the provisions (and the Surviving
Corporation's Certification of Incorporation and by-laws may be amended to
incorporate such provisions) with respect to indemnification that are set forth
in the certificate of incorporation and bylaws of RSI (in each case in effect as
of June 30, 1997 and as provided to JPFI prior to such date), which provisions
shall not be amended, repealed or otherwise modified, except as required by law,
for a period of six years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at (or at any time
prior to) the Effective Time were directors or officers of RSI or its
subsidiaries (or any of its predecessors). 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, the Surviving Corporation or any of their
respective 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 or the
Surviving Corporation (as the case may be) 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 representatives 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.
(e) Without limiting the generality of the foregoing, the provisions of
this Section 5.7 shall apply to any litigation, action, suit, claim,
investigation or proceeding described in Item 11 to Schedule II to Amendment No.
2.
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.
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. 87/8% 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 87/8% Senior Subordinated Notes due 2003
thereunder upon a "change of control" (as defined in such Indenture)).
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).
Notwithstanding the foregoing, each of RSI and JPFI agrees that taking into
account the modification of the Exchange Ratio, substantial authority exists as
of the date of Amendment No. 2 that, as of the Effective Time, the position set
forth in this Section 5.18 shall continue to be applicable. Without the prior
written consent of RSI, JPFI agrees that it shall not, and shall not permit any
of its subsidiaries to, take any action not required by any binding contract or
plan in effect as of the date of Amendment No. 2 or by applicable law that would
prevent the statement set forth in the preceding sentence from being true and
correct as of the Effective Time, including without limitation, any action with
respect to the issuance of 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, whether or not permitted by any other provision of this Agreement.
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.
(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 (i) to the extent
expressly made as of an earlier date, in which case such representations and
warranties shall be true and correct as of such date, and (ii) for the
representations and warranties set forth in Sections 3.1(f) and 3.1(g)(i), in
which case such representations and warranties shall be true and correct as of
the date of Amendment No. 2) except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation 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; provided, however, that the
obligations of RSI set forth in Clauses (II) and (III) of Section 4.1(a) shall
have been performed in all respects, without reference to any limitation on such
RSI obligations in respect of "materiality" or "material adverse effect."
(c) 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 (i) to the extent
expressly made as of an earlier date, in which case such representations and
warranties shall be true and correct as of such date, and (ii) for the
representations and warranties set forth in Sections 3.2(f) and 3.2(g)(i), in
which case such representations and warranties shall be true and correct as of
the date of Amendment No. 2) except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation 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; provided, however, that the
obligations of JPFI set forth in Clauses (II) and (III) of Section 4.1(b) shall
have been performed in all respects, without reference to any limitation on such
JPFI obligations in respect of "materiality" or "material adverse effect."
(c) 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 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, or if RSI shall have breached or failed
to perform in any respect its covenants and agreements set forth in Clause (II)
or Clause (III) of the first paragraph of Section 4.1(a), 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, or if JPFI shall have breached or failed
to perform in any respect its convenants and agreements set forth in Clause (II)
or Clause (III) of the first paragraph of Section 4.1(b), 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
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 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
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; provided, however, that no change, effect, event,
occurrence or state of facts relating to, or arising or resulting from, any of
the following matters, regardless of the amounts involved shall constitute a
"material adverse change" or "material adverse effect": (i) any actions taken or
omitted to be taken with the prior written approval of JPFI in anticipation or
reliance upon the consummation of the Merger or the transactions contemplated
thereby, (ii) any failure by RSI or its subsidiaries to keep available the
services of their current officers or other employees, or to preserve any
relationships with those persons having business dealings with them; or (iii)
any of the matters disclosed in the RSI Disclosure Schedule, in any RSI Filed
SEC Document, in any RSI Press Release, or otherwise disclosed to an executive
officer of JPFI in writing by RSI prior to the date of Amendment No. 2;
(c) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(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;
(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;
(f) "Securities Act" means the Securities Act of 1933, as amended;
(g) "RSI SEC Documents" means all required reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) filed with the SEC by RSI since June 28, 1997, and the
Form S-4 as filed prior to the date of Amendment No. 2;
(h) "JPFI SEC Documents" means all required reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) filed with the SEC by JPFI since June 28, 1997, and the
Form S-4 as filed prior to the date of Amendment No. 2;
(i) "To RSI's knowledge" shall mean the actual knowledge, without any
inquiry or investigation whatsoever, of Mark Van Stekelenburg, RSI's Chairman,
CEO and President, Robert J. Harter Jr., RSI's Senior Vice President and General
Counsel, Richard J. Martin, RSI's Executive Vice President and Chief Financial
Officer, and Christopher Mellon, RSI's Vice President and Controller. "To JPFI's
knowledge" shall mean the actual knowledge, without any inquiry or investigation
whatsoever, of Jim Miller, JPFI's Chairman of the Board, President and CEO,
David Abramson, JPFI's Senior Vice President and General Counsel, Lewis Hay,
III, JPFI's Senior Vice President and Chief Financial Officer and George T.
Megas, JPFI's Vice President-Finance; and
(j) "Form S-4" means 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.
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.
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.
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.
LOGO
By
Name: James L. Miller
Title: Chairman, President and
Chief Executive Officer
RYKOFF-SEXTON, INC.
LOGO
By
Name: Mark Van Stekelenburg
Title: Chairman and Chief Executive Officer
HUDSON ACQUISITION CORP.
LOGO
By
Name: James L. Miller
Title: Chairman, President and Chief Executive
Officer
Amendment No. 2 to the Merger Agreement contains the following additional
provisions, which are part of the Merger Agreement.
18. Deemed Disclosure.
(a) The parties hereto agree that the matters set forth on the Schedules to
this Amendment (i) shall be, and hereby are, deemed to have been disclosed in
such sections of the RSI Disclosure Schedule with respect to which such matters
are relevant, in each case as of the date of the Merger Agreement, and
accordingly such disclosures shall be, and hereby are, deemed to modify the
representations and warranties of RSI in the Merger Agreement as of such date;
(ii) shall not be asserted by JPFI as a breach of the Merger Agreement; and
(iii) shall not be asserted by JPFI as the cause of a failure to be satisfied
any condition set forth in the Merger Agreement.
(b) Section 4.1 of the RSI Disclosure Schedule shall be amended by adding
Schedule I hereto thereto. Section 4.1 of the JPFI Disclosure Schedule shall be
amended by adding Schedule V hereto thereto.
(c) The introduction to the JPFI and RSI Disclosure Schedules shall be
amended by adding the following sentence:
"All information set forth in the agreements, documents and instruments
referred to herein shall be deemed disclosed in the following schedules as fully
and completely as if set forth herein. Any information disclosed in any of the
following schedules shall be deemed disclosed and incorporated into any other
schedule to the Merger Agreement where such disclosure would be relevant."
19. Filings. As soon as practicable following the date of this Amendment,
RSI and JPFI shall prepare and file with the SEC an amendment to the Joint Proxy
Statement, and JPFI shall prepare and file with the SEC an amendment to the Form
S-4, in which the Joint Proxy Statement will be included. The parties will use
their best efforts to make such filings within 10 days of the date of this
Amendment. 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.
20. Release. (a) Each of JPFI and Merger Sub hereby waives, and releases
and discharges RSI, and its stockholders, affiliates, successors, assigns,
officers, directors, agents, representatives and employees (collectively
"Representatives") of RSI from, any claim for damages (whether for loss of
benefit of the bargain, costs or expenses or otherwise), other claims,
liabilities, damages and causes of action, in each case to the extent related to
or based on (i) any breach or alleged breach of the Merger Agreement prior to
the date of this Amendment, or (ii) this Amendment, the subject matter thereof
or any matter set forth on the Schedules to this Agreement. This paragraph does
not limit JPFI's or Merger Sub's right to terminate the Merger Agreement in
accordance with its terms as amended hereby based on any such breach or alleged
breach.
(b) RSI and its affiliates hereby waive, and release and discharge JPFI,
Merger Sub and the Representatives of each of them from, any claim for damages
(whether for loss of benefit of the bargain, costs or expenses or otherwise),
other claims, liabilities, damages and causes of action, in each case to the
extent related to or based on (i) any breach or alleged breach of the Merger
Agreement prior to the date of this Amendment, or (ii) this Amendment, the
subject matter thereof or any matter set forth on the Schedules to this
Agreement. This paragraph does not limit RSI's right to terminate the Merger
Agreement in accordance with its terms as amended hereby based on any such
breach or alleged breach.
21. Disclaimer of Projections. Each of RSI and JPFI acknowledges that any
financial projections that may have been or are hereafter delivered to the other
party (the "Financial Projections") reflect a number of estimates and highly
subjective assumptions and judgments concerning anticipated results of
operations. These assumptions and judgments may or may not prove to be correct
and there can be no assurance that any projected results are attainable or will
be realized. Each of JPFI and RSI expressly disclaims any representation or
warranty, express or implied, as to the accuracy or completeness of the
Financial Projections and each of RSI and JPFI acknowledges that it has not
relied and will not rely on the Financial Projections, in connection with its
evaluation of the transactions contemplated by the Merger Agreement and shall
have no right to terminate this Agreement or to not consummate the Merger on the
basis of RSI's or JPFI's failure to achieve any Financial Projections.
22. Authority.
(a) RSI has all requisite corporate power and authority to enter into this
Amendment. The execution and delivery of this Amendment and the consummation by
RSI of the transactions contemplated hereby has been duly authorized by all
necessary corporate action on the part of RSI, including without limitation the
due approval of this Amendment by the Board of Directors of RSI (for the
purposes contemplated by Section 3.1(h) of the Agreement and otherwise) and a
majority of the ML Directors. This Amendment has been duly executed and
delivered by RSI and, assuming the due authorization, execution and delivery
thereof by each of JPFI and Merger Sub, constitutes the legal, valid and binding
obligation of RSI, enforceable against RSI in accordance with its terms.
(b) Each of JPFI and Merger Sub has all requisite corporate power and
authority to enter into this Amendment. The execution and delivery of this
Amendment and the consummation by each of JPFI and Merger Sub of the
transactions contemplated hereby has been duly authorized by all necessary
corporate action on the part of each of JPFI and Merger Sub, including without
limitation the due approval of this Amendment by the Board of Directors of JPFI
(for the purposes contemplated by Section 3.2(h) of the Agreement and
otherwise). This Amendment has been duly executed and delivered by each of JPFI
and Merger Sub, and assuming due authorization, execution and delivery thereof
by RSI, constitutes the legal, valid and binding obligation of each of JPFI and
Merger Sub, enforceable against each of JPFI and Merger Sub in accordance with
its terms.
23. Governing Law. This Amendment 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.
24. Counterparts. This Amendment 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.
25. Merger Agreement Confirmed. Except as amended hereby, the Merger
Agreement is ratified and confirmed in all respects. All representations,
warranties, covenants or agreements of the parties set forth in the Merger
Agreement, as amended hereby, shall be deemed to have been made June 30, 1997
and as of the date hereof, except as otherwise expressly provided therein or
herein, and RSI and JPFI hereby waive any right to terminate, or not consummate
the transactions contemplated by, the Merger Agreement according to its original
terms and agree that any such rights shall arise only out of the provisions of
the Merger Agreement as amended hereby.
26. Notice of Breaches. JPFI and RSI shall give prompt written notice to
the other party to the extent it has knowledge of breach by it or such other
party of the covenants and agreements set forth in Section 4.1(a) or 4.1(b).
Exhibit B
AMENDED AND RESTATED SUPPORT AGREEMENT
AMENDED AND RESTATED 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, the parties hereto have previously entered into, and
Rykoff-Sexton, Inc., a Delaware corporation ("Rykoff-Sexton"), has previously
acknowledged, a Support Agreement, dated as of June 30, 1997 (the "Original
Support Agreement"); and
WHEREAS, concurrently with the execution and delivery of the
Original Support Agreement, JPFI, Hudson Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of JPFI ("Merger Sub") and
Rykoff-Sexton, entered 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"); and
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 the Original Support Agreement; and
WHEREAS, the parties to the Original Support Agreement, and
Rykoff-Sexton, wish to amend and restate such Original Support Agreement, as set
forth herein;
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 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 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 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 and JPFI or their respective counsel that as
of the Effective Time it has no plan or intention to (other than incident or
pursuant to an Extraordinary Transaction) sell, exchange or otherwise dispose
of, or enter into an agreement (a "Sales Agreement") to sell, exchange or
otherwise dispose of, shares of JPFI Common Stock during the two-year period
immediately following the Effective Time, and moreover that it is not subject to
or obligated to enter into any agreement to sell, exchange or otherwise dispose
of shares of JPFI Common Stock, if any resulting sale, exchange or disposition
would (when taken in combination with actions by other Stockholders and assuming
all Sales Agreements are consummated) cause the Stockholders in the aggregate to
retain ownership for federal income tax purposes of less than the lesser of (i)
25% of the shares of JPFI Common Stock received by the Stockholders in the
aggregate in the Merger or (ii) the Shortfall Percent of the shares of JPFI
Common Stock issued in the Merger to stockholders of Rykoff. For purposes of
these representations, the phrase "sell, exchange or otherwise dispose of" shall
include entry into transactions whereby a Stockholder gives up substantially all
the benefits and burdens of ownership in JPFI Common Stock or which otherwise
constitute a transfer of ownership of such stock for federal income tax
purposes. "Shortfall Percent" shall mean the greater of zero or that percentage
which, when added to the following percentage, shall equal 45%: 100% minus the
sum of (i) the per- cent of shares of JPFI Common Stock issuable in the Merger
to stockholders of Rykoff that is issuable to the Stockholders and (ii) the
percent of shares of JPFI Common Stock issuable in the Merger to stockholders of
Rykoff that is issuable to any other persons that can be identified immediately
prior to the Effective Time 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). Notwithstanding the foregoing, no Stockholder
shall be required to provide the representations described herein if, as 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 otherwise), when delivered by
telecopy and confirmed by return telecopy, or seven days after being mailed by
first-class mail, postage prepaid in each case to the applicable addresses set
forth below:
If to 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
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, including without limitation the Original Support Agreement.
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 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 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.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
JP FOODSERVICE, INC.
By: /s/ James L. Miller
- ----------------------------------------
Name: James L. Miller,
Title: Chairman, President and
Chief Executive Officer
MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
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: Matthias B. Bowman
Title:
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
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: Matthias B. Bowman
Title:
ML IBK POSITIONS, INC.
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
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: Matthias B. Bowman
Title:
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: Merrill Lynch LBO Partners No. IV, L.P.,
as Investment General Partner
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc.,
as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc.,
as General Partner
By: /s/ Matthias B. Bowman
- ----------------------------------------
Name: Matthias B. Bowman
Title:
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
Exhibit C
STANDSTILL AGREEMENT
STANDSTILL AGREEMENT (the "Agreement"), dated as of May 17, 1996, by
and between RYKOFF-SEXTON, INC., a Delaware corporation ("RSI"), on the one
hand, and the other Persons set forth on the signature pages hereto
(collectively, the "ML Entities"), on the other hand.
W I T N E S S E T H:
WHEREAS, RSI, USF Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of RSI ("Merger Sub"), and US Foodservice Inc., a
Delaware corporation (the "Company"), have entered into an Agreement and Plan of
Merger dated February 2, 1996 (the "Merger Agreement"; capitalized terms used
without definition herein having the meanings ascribed thereto in the Merger
Agreement);
WHEREAS, as a result of the Merger, the ML Entities will beneficially
own approximately 36.4% of the issued and outstanding RSI Common Shares,
depending upon the Exchange Ratio; and
WHEREAS, pursuant to the Agreement dated as of February 2, 1996 (the
"ML Agreement") between RSI, on the one hand, and the ML Entities, on the other
hand, RSI and the ML Entities have agreed that at the Effective Time they shall
enter into a Standstill Agreement in the form of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, RSI and the ML Entities
hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms have the following
meanings:
(a) "Additional Percentage" shall mean (w) 2% of the Total Voting
Power, in the event that the ML Entities and their Affiliates beneficially own
Voting Securities representing in the aggregate at least 30% of the Total Voting
Power; (x) 3% of the Total Voting Power, in the event that the ML Entities and
their Affiliates beneficially own Voting Securities representing in the
aggregate less than 30%, but at least 22%, of the Total Voting Power; (y) 4% of
the Total Voting Power, in the event that the ML Entities and their Affiliates
beneficially own Voting Securities representing in the aggregate less than 22%,
but at least 16%, of the Total Voting Power; and (z) 5% of the Total Voting
Power, in the event that the ML Entities and their Affiliates beneficially own
Voting Securities representing in the aggregate less than 16%, but at least 10%,
of the Total Voting Power.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2
of the Securities and Exchange Act of 1934, as amended (the "Exchange Act");
provided, however, that any corporation in which an ML Entity or any of its
Affiliates owns less than a majority of the securities entitled generally to
vote for the election of directors shall not be considered an Affiliate of such
ML Entity or such Affiliate unless such ML Entity or such Affiliate otherwise
controls such corporation.
(c) "Beneficial ownership" and "beneficially own" shall have
the meanings set forth in Rule 13d-3 under the Exchange Act.
(d) "Continuing Director" and "Continuing Director Quorum"
shall have the meanings set forth in Article Thirteenth of the Restated
Certificate of Incorporation of RSI, as amended from time to time; provided,
however, that no ML Director shall constitute a Continuing Director or be
counted in determining the presence of a Continuing Director Quorum.
(e) "Control" shall mean, with respect to a Person or a Group,
(i) beneficial ownership by such Person or Group of securities entitling it to
exercise in the aggregate more than 50 percent of the votes in any election of
directors or other governing body of the entity in question; or (ii) possession
by such Person or Group of the power, directly or indirectly, (x) to elect a
majority of the board of directors (or equivalent governing body) of the entity
in question or (y) in case of a non-corporate entity, to manage or govern the
business, operations or investments of any such non-corporate entity.
(f) "Group" shall have the meaning comprehended by Section
13(d)(3) of the Exchange Act; provided that, solely for purposes of Section
3.1(a)(iv) of this Agreement, the ML Entities shall not by themselves constitute
a "Group."
(g) "Person" shall have the meaning set forth in Section
3(a)(9) of the Exchange Act.
(h) "ML Representative" means any natural person who has been
chosen in writing, with notice thereof to RSI, by the ML Entities holding
beneficial ownership of Voting Securities representing in the aggregate a
majority of the Total Voting Power held by the ML Entities, Matthias B. Bowman
being hereby designated as the initial ML Representative.
(i) "Schedule 13D Filer" means any Person or Group which,
based on its direct or indirect beneficial ownership of any Voting Securities,
is, or after the acquisition of such beneficial ownership would be, required to
file a statement on Schedule 13D with the SEC in accordance with Rule 13d-1
under the Exchange Act, but shall not include any Schedule 13G Filer.
(j) "Schedule 13G Filer" means any Person or Group which,
based on its direct or indirect beneficial ownership of any Voting Securities,
is, or after the acquisition of such beneficial ownership would be, required to
file a statement on Schedule 13D with the SEC in accordance with Rule 13d-1
under the Exchange Act, but which in lieu of such filing may instead file a
short-form statement on Schedule 13G in accordance with such Rule.
(k) "Standstill Percentage" means 36.4% of the Total Voting
Power; provided that in the event that the percentage of the Total Voting Power
represented by the shares of Voting Securities beneficially owned by the ML
Entities and their Affiliates from time to time is less than 36.4%, then the
Standstill Percentage shall be automatically reduced to the percentage of Total
Voting Power represented by shares of Voting Securities beneficially owned by
the ML Entities and their Affiliates from time to time; provided further, that
(x) following any such reduction in the Standstill Percentage, the Standstill
Percentage shall not thereafter be subject to any increase (other than as
provided for in the following clause (y)), and (y) if the percentage of Total
Voting Power represented by shares of Voting Securities beneficially owned by
the ML Entities and their Affiliates is increased as a result of any RSI Action
(as defined in Section 3.1(a)(i) of this Agreement), the Standstill Percentage
shall be automatically increased to reflect such RSI Action.
(l) "Total Voting Power" means, at any time, the aggregate
number of votes which may be cast by holders of outstanding Voting Securities.
(m) "Transfer" means sell, transfer, assign, pledge,
hypothecate, give away or in any manner dispose of any Voting Securities.
(n) "Voting Securities" means the RSI Common Shares and any
other securities (including voting preferred stock) issued by RSI which are
entitled to vote generally for the election of directors of RSI, whether
currently outstanding or hereafter issued (other than securities having such
powers only upon the occurrence of a contingency).
ARTICLE II
BOARD REPRESENTATION
2.1 Initial Board Representation. At the Effective Time, RSI will (a) take
such action as may be necessary to increase the size of the Board of Directors
of RSI (the "Board of Directors") to 12, and (b) use its best efforts to fill
four of the vacancies thereby created in the three classes of directors with
directors designated by the ML Representative (each, a "ML Director" and,
collectively, the "ML Directors") in accordance with Article Thirteenth of RSI's
Restated Certificate of Incorporation. Of the four initial ML directors, one
shall be appointed to Class A (current term expiring in 1996), one shall be
appointed to Class B (current term expiring in 1998) and two shall be appointed
to Class C (current terms expiring in 1997). The ML Entities acknowledge that
any designees of ML Directors who are not employees of either an ML Entity which
is controlled by Merrill Lynch & Co., Inc. or an Affiliate of an ML Entity which
is controlled by Merrill Lynch & Co., Inc. must be reasonably acceptable to the
Continuing Directors of RSI.
2.2 Continuing Board Representation. Until such time as the ML Entities no
longer beneficially own Voting Securities representing in the aggregate at least
10% of the Total Voting Power, RSI covenants and agrees as follows:
(a) except as contemplated by this Agreement or as otherwise
agreed to by a majority of the ML Directors, RSI will not take or recommend to
its stockholders any action which would (i) cause the Board of Directors to
consist of any number of directors other than twelve directors divided into
three classes of four directors each or (ii) result in any amendment to the
By-Laws of RSI or the By-Laws or Regulations of any Subsidiary (as defined in
Section 2.3(b) hereof) in effect on the date hereof that would impose any
qualifications to the eligibility of directors of RSI or any Subsidiary to serve
on any committee of the Board of Directors, any Subsidiary Board or any
committee of any Subsidiary Board, except as may be required by applicable law;
(b) so long as the ML Entities beneficially own Voting
Securities representing in the aggregate at least 34% of the Total Voting Power,
RSI will use its best efforts to cause the Nominating Committee of the Board of
Directors (the "Nominating Committee") (or if the Nominating Committee makes no
such recommendation, the Board of Directors) to recommend for election in the
applicable year in which the respective class term expires, one ML Director in
Class A, one ML Director in Class B and two ML Directors in Class C, in each
case as designated by the ML Representative; provided, that if despite such best
efforts, any such ML Director is not elected by the stockholders of RSI, RSI
shall have no further obligations under this Section 2.2(b) for the applicable
year;
(c) in the event that the ML Entities beneficially own Voting
Securities representing in the aggregate less than 34%, but at least 27%, of the
Total Voting Power, RSI will use its best efforts to cause the Nominating
Committee (or if the Nominating Committee makes no such recommendation, the
Board of Directors) to recommend for election in the applicable year in which
the respective class term expires, one ML Director in Class A, one ML Director
in Class B and one ML Director in Class C, in each case as designated by the ML
Representative; provided, that if despite such best efforts, any such ML
Director is not elected by the stockholders of RSI, RSI shall have no further
obligations under this Section 2.2(c) for the applicable year;
(d) in the event that the ML Entities beneficially own Voting
Securities representing in the aggregate less than 27%, but at least 16%, of the
Total Voting Power, RSI will use its best efforts to cause the Nominating
Committee (or if the Nominating Committee makes no such recommendation, the
Board of Directors) to recommend for election in the applicable year in which
the respective class term expires, one ML Director in Class A and one ML
Director in Class B or Class C, in each case as designated by the ML
Representative; provided, that if despite such best efforts, any such ML
Director is not elected by the stockholders of RSI, RSI shall have no further
obligations under this Section 2.2(d) for the applicable year; and
(e) in the event that the ML Entities beneficially own Voting
Securities representing in the aggregate less than 16%, but at least 10%, of the
Total Voting Power, RSI will use its best efforts to cause the Nominating
Committee (or if the Nominating Committee makes no such recommendation, the
Board of Directors) to recommend for election in the applicable year in which
the respective class term expires, one ML Director in Class A; provided, that if
despite such best efforts, such ML Director is not elected by the stockholders
of RSI, RSI shall have no further obligations under this Section 2.2(e) for the
applicable year.
2.3 Committee Representation; Subsidiary Board Representation. (a)
Until such time as the ML Entities no longer beneficially own Voting Securities
representing in the aggregate at least 16% of the Total Voting Power, to the
extent that, and for so long as, any of the ML Directors is qualified under the
then-current rules and regulations of the New York Stock Exchange ("NYSE
Rules"), the rules and regulations under the Internal Revenue Code of 1986, as
amended, relating to the qualification of employee stock benefit plans, the
rules and regulations under Section 16(b) of the Exchange Act, including Rule
16b-3 thereunder or any successor rule, and RSI's Bylaws, RSI shall use its best
efforts to cause the Board of Directors to designate one of the ML Directors to
serve on each of the committees of the Board of Directors to the same extent,
and on the same basis, as the other members of the Board of Directors; provided,
however, that subject to the foregoing director qualification requirements, in
the event that, and for so long as, the ML Entities own Voting Securities
representing in the aggregate at least 10% of the Total Voting Power, RSI shall
use its best efforts to cause the Board of Directors to designate one of the ML
Directors to serve on the Nominating Committee and the Management Development
Compensation and Stock Option Committee of the Board of Directors to the same
extent, and on the same basis, as the other members of the Board of Directors.
(b) Until such time as the ML Entities no longer beneficially
own Voting Securities representing in the aggregate at least 10% of the Total
Voting Power, to the extent that (I) any Continuing Director who is not an
officer or employee of RSI ("Outside Director") is also a director of any
wholly-owned subsidiary of RSI ("Subsidiary"), and (II) the ML Directors are
qualified under the Bylaws or Regulations of the relevant Subsidiary, RSI shall
cause to be included (i) on the board of directors of such Subsidiary a number
of ML Directors equal to the product of (x) the number of Continuing Directors
on the board of directors of such Subsidiary (a "Subsidiary Board"), multiplied
by (y) a quotient, the numerator of which shall be the total number of ML
Directors which RSI is required to use its best efforts to cause the Nominating
Committee to recommend for election pursuant to Section 2.2(b), 2.2(c), 2.2(d)
or 2.2(e), as the case may be, and the denominator of which shall be twelve,
provided that if the product calculated above is less than 1, then to the extent
that any Outside Director is also a director of any such Subsidiary, one ML
Director designated by the ML Representative shall be entitled to sit on such
Subsidiary Board so long as the ML Entities beneficially own Voting Securities
representing at least 10% of the Total Voting Power; and (ii) on each committee
of each Subsidiary Board, if an ML Director is entitled to sit on any Subsidiary
Board, one ML Director designated by the ML Representative, subject to the rules
and regulations described in Section 2.3(a) and qualification under the Bylaws
or Regulations of the relevant Subsidiary.
2.4 Removal of Directors; Vacancies. The ML Representative shall have
the right, with cause, to request the removal from the Board of Directors of any
ML Director. Any such removal shall be subject to the applicable provisions of
the Restated Certificate of Incorporation and By-Laws of RSI (including, without
limitation, any stockholder vote requirement), as well as applicable statutory
provisions; provided that RSI will use its best efforts to cause the Continuing
Directors to vote, subject to Section 2.6, in favor of such requested removal.
In the event that any ML Director for any reason ceases to serve as a member of
the Board of Directors during his or her term of office and at such time the ML
Representative would have the right to a designation hereunder if an election
for the resulting vacancy were to be held, (a) the director to fill such vacancy
("ML Director Vacancy") shall be designated by the ML Representative and, if not
an employee of an ML Entity which is controlled by Merrill Lynch & Co., Inc. or
an Affiliate of an ML Entity which is controlled by Merrill Lynch & Co, Inc.,
shall be reasonably acceptable to the Continuing Directors of RSI, and (b) such
ML Director Vacancy shall be filled in accordance with Article Thirteenth of
RSI's Restated Certificate of Incorporation. In the event that, and for so long
as, any ML Director is a member of the Nominating Committee of the Board of
Directors, the ML Entities shall cause the ML Directors to take such action as
may be necessary and to vote in accordance with the recommendation of the
Continuing Directors to fill any vacancies in the Board of Directors (other than
an ML Director Vacancy).
2.5 Resignation. In the event that the percentage of Total Voting Power
represented by the Voting Securities beneficially owned in the aggregate by the
ML Entities at any time decreases below the minimum percentage thresholds
specified in Sections 2.2(b), (c), (d) or (e) or Sections 2.3(a) or (b), the ML
Entities shall cause such number of ML Directors to resign as is necessary to
adjust the number of remaining ML Directors to the number (if any) to which the
ML Entities would have been entitled under such Sections if the nominations to
the Board of Directors or Subsidiary Board or the selections for committees of
the Board of Directors or Subsidiary Board were made at such time; provided that
in the event of any such decrease below any such minimum percentage threshold,
any subsequent increase in the percentage of the Total Voting Power represented
in the aggregate by the Voting Securities beneficially owned by the ML Entities
above such minimum percentage threshold shall not entitle the ML Entities to
have any additional ML Directors named or elected to the Board of Directors or
any committee thereof or any Subsidiary Board or any committee thereof.
2.6 Charter and Bylaws; Fiduciary Duties. The obligations of RSI set
forth in this Article II are subject to compliance with the provisions of
Article Thirteenth of RSI's Restated Certificate of Incorporation and RSI's
Bylaws, and the fiduciary duties of the Board of Directors and the Nominating
Committee to RSI's stockholders. Nothing contained in this Article II shall
require RSI to violate any such provisions or to require any director of RSI to
breach any such fiduciary duty.
2.7 No Voting Trust. This Agreement does not create or constitute, and
shall not be construed as creating or constituting, a voting trust agreement
under the Delaware General Corporation Law or any other applicable corporation
law.
2.8 Notification of Nominations. The rights of the ML Entities, ML
Directors and ML Representative and the obligations of RSI under this Article II
shall be subject to compliance with Article III, Section 3a of RSI's Bylaws.
2.9 No Duty to Designate; Reduction of Board Representation. Nothing
contained in this Article II shall be construed as requiring the ML Entities to
designate any ML Directors or, once designated and elected, to require any ML
Director to continue to serve in office if such ML Director elects to resign.
Until such time as the ML Entities no longer beneficially own Voting Securities
representing in the aggregate at least 10% of the Total Voting Power, in the
event of any vacancy created by the resignation or removal of an ML Director or
the failure of the ML Representative to designate an ML Director, other than a
vacancy created by the resignation or removal of an ML Director pursuant to
Section 2.5 hereof, upon the written request of the ML Representative, RSI shall
take such action as may be necessary to reduce the size of the Board of
Directors to a number equal to (x) 12 (or such lesser number as exists following
one or more previous reductions of the size of the Board pursuant to this
Section 2.9) minus (y) the number of such vacancies, and thereafter,
notwithstanding any other provisions of this Article II, the ML Entities shall
have no right to designate any ML Directors to the extent of such reduction.
2.10 Effect of Change in Control. Notwithstanding anything to the
contrary contained in this Agreement, the rights under this Article II are for
the benefit of, and shall only extend to, those ML Entities which are controlled
by Merrill Lynch & Co., Inc. In the event of any transaction, including any
Transfer of any securities or partnership interests, resulting in Merrill Lynch
& Co., Inc. no longer controlling such ML Entity, such ML Entity shall no longer
have any rights under this Article II and shall not be deemed to be an ML Entity
for purposes of this Article II, but shall remain bound by the other provisions
of this Agreement.
ARTICLE III
STANDSTILL RESTRICTIONS; VOTING MATTERS
3.1 Standstill Restrictions. (a) During the term of this Agreement,
each of the ML Entities covenants and agrees that without the prior affirmative
vote of a majority of the Continuing Directors at a meeting at which a
Continuing Director Quorum is present, the ML Entities shall not, and shall not
permit any of their respective Affiliates to, directly or indirectly:
(i) acquire, propose to acquire (or publicly announce or
otherwise disclose an intention to propose to acquire) or offer to
acquire, by purchase or otherwise, any Voting Securities, if the effect
of such acquisition would be to increase the outstanding number of
shares of Voting Securities then beneficially owned by the ML Entities
and their Affiliates, in the aggregate, to an amount representing Total
Voting Power in excess of the Standstill Percentage; provided that this
Section 3.1(a)(i) shall not be applicable, and no ML Entity shall be
obligated to dispose of Voting Securities, if the aggregate percentage
of the Total Voting Power represented by Voting Securities beneficially
owned by the ML Entities is increased as a result of corporate action
taken solely by RSI and not caused by any action taken by any ML Entity
or any Affiliate of any ML Entity ("RSI Action");
(ii) propose (or publicly announce or otherwise disclose
an intention to propose), solicit, offer, seek to effect, negotiate
with or provide any confidential information relating to RSI or its
business to any other Person with respect to, any tender or exchange
offer, merger, consolidation, share exchange, business combination,
restructuring, recapitalization or similar transaction involving RSI;
provided, that nothing set forth in this Section 3.1(a)(ii) shall
prohibit ML Entities from soliciting, offering, seeking to effect and
negotiating with any Person with respect to Transfers of Voting
Securities otherwise permitted by Article IV of this Agreement;
provided further, that in so doing the ML Entities shall not (x) issue
any press release or otherwise make any public statements (other than
statements made in response to any request by any Person for
confirmation by any ML Entity or any Affiliate of an ML Entity of
information contained in any statement on Schedule 13D under the
Exchange Act) with respect to such action other than in accordance with
Section 9.14 hereof (provided that the ML Entities may, and may permit
their Affiliates to, make any statement required by applicable law,
including without limitation, the amendment of any statement on
Schedule 13D under the Exchange Act), or (y) provide any confidential
information relating to RSI or its business to any such Person.
(iii) make, or in any way participate in, any
"solicitation" of "proxies" to vote (as such terms are defined in Rule
14a-1 under the Exchange Act), solicit any consent with respect to the
voting of any Voting Securities or become a "participant" in any
"election contest" (as such terms are defined or used in Rule 14a-11
under the Exchange Act) with respect to RSI;
(iv) except to the extent contemplated by the
Registration Rights Agreement, form, participate in or join any Person
or Group with respect to any Voting Securities (except an arrangement
solely among any or all of the ML Entities), or otherwise act in
concert with any third Person (other than an ML Entity) for the purpose
of (x) acquiring any Voting Securities or (y) holding or disposing of
Voting Securities for any purpose otherwise prohibited by this Section
3.1(a);
(v) deposit any Voting Securities into a voting trust or
subject any Voting Securities to any arrangement or agreement with
respect to the voting thereof (except for this Agreement and except for
any such arrangement solely among any or all of the ML Entities);
(vi) initiate, propose or otherwise solicit stockholders
for the approval of one or more stockholder proposals with respect to
RSI as described in Rule 14a-8 under the Exchange Act, or induce or
attempt to induce any other Person to initiate any stockholder
proposal;
(vii) except as specifically provided for in Article II
hereof or as contemplated by Section 3.1(e), seek election to or seek
to place a representative on the Board of Directors, or seek the
removal of any member of the Board of Directors (other than an ML
Director);
(viii) call or seek to have called any meeting of the
stockholders of RSI for any purpose otherwise prohibited by this
Section 3.1(a);
(ix) take any other action to seek to control RSI;
(x) demand, request or propose to amend, waive or
terminate the provisions of this Section 3.1(a); or
(xi) agree to do any of the foregoing, or advise, assist,
encourage or persuade any third party to take any action with respect
to any of the foregoing.
(b) Each of the ML Entities agrees that it will notify RSI
promptly if any inquiries or proposals are received by, any information is
exchanged with respect to, or any negotiations or discussions are initiated or
continued with, any ML Entity or, to the knowledge of any officer of Merrill
Lynch Capital Partners, Inc. or ML IBK Positions, Inc., any of their respective
Affiliates, regarding any matter described in Section 3.1(a) hereof; provided,
however, that the foregoing obligation is subject to any confidentiality
policies of any such Affiliate of any ML Entity. The ML Entities and RSI shall
mutually agree upon an appropriate response to be made to any such proposals
received by any ML Entity, or, to the knowledge of any such officer, any
Affiliate of such ML Entity or any such officer.
(c) Notwithstanding the provisions of Section 3.1(a), Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and its Affiliates
(other than the ML Entities) may effect or recommend transactions, either as
principal or as agent on behalf of third parties, in the ordinary course of
Merrill Lynch's business or the business of such Affiliates, in, relating to or
involving Voting Securities, including, without limitation, transactions in
which Merrill Lynch or such Affiliates are acting as an investment banking
organization providing advisory services, an investment advisor, an investment
company, a broker or dealer in securities, as an underwriter or placement agent
of securities, a market maker, a specialist, an arbitrageur or a block
positioner; provided, however, that (i) in no event shall Merrill Lynch and its
Affiliates (other than the ML Entities) acquire beneficial ownership of Voting
Securities representing Total Voting Power in excess of the Additional
Percentage; and (ii) for purposes of this Section 3.1(c), transactions in the
ordinary course of Merrill Lynch's or its Affiliates' business shall in no event
be deemed to include any activities or transactions which have the purpose or
effect of seeking to control or influence the management, policies or affairs of
RSI, including, without limitation, through advising any Person with respect to
any unsolicited bid for control of, or any other offer for securities of or any
business combination involving, RSI; provided, however, that this Section
3.1(c)(ii) shall not prohibit or restrict Merrill Lynch from performing such
obligations as may be required by law or the rules or other requirements of any
regulatory authority.
(d) The ML Entities shall not be deemed to have breached
Section 3.1(a)(i) of this Agreement if (i) the ML Entities or their Affiliates
inadvertently and in good faith acquire Voting Securities so as to cause the
Total Voting Power represented by the Voting Securities beneficially owned by
the ML Entities and their Affiliates to exceed the Standstill Percentage, and
(ii) the ML Entities as soon as practicable divest a sufficient number of shares
of Voting Securities beneficially owned by the ML Entities and their Affiliates
so as to result in the Total Voting Power represented by the Voting Securities
beneficially owned by the ML Entities and their Affiliates to be equal to or
less than the Standstill Percentage.
(e) Nothing contained in this Article III shall be deemed to
restrict the manner in which the ML Directors may participate in deliberations
or discussions of the Board of Directors or individual consultations with the
Chairman of the Board or any other members of the Board of Directors, so long as
such actions do not otherwise violate any provision of Section 3.1(a).
3.2 Voting. Until such time as the ML Entities no longer beneficially
own Voting Securities representing in the aggregate at least 10% of the Total
Voting Power, the ML Entities will take all such action as may be required so
that all Voting Securities owned by the ML Entities and their Affiliates, as a
group, are (i) voted (in person or by proxy) for RSI's nominees to the Board of
Directors, in accordance with the recommendation of the Nominating Committee
(or, if the Nominating Committee makes no such recommendation, the Board of
Directors), provided that if the ML Representative has requested representation
on the Nominating Committee, RSI shall have performed its obligations described
in the proviso to Section 2.3(a) hereof, provided further that if the ML
Entities have a reasonable, good faith objection to any one (and only one) such
nominee for election to the Board of Directors at any annual meeting of RSI
stockholders (other than any nominee who was a member of the Board of Directors
as of the date of the Merger Agreement), based on such nominee's personal
qualifications to serve as a member of the Board of Directors ("Objectionable
Nominee"), the ML Entities may abstain from, or vote against, the election of
such Objectionable Nominee at such meeting, but only if (x) the board of
directors of the general partner of such ML Entity determines in good faith that
such action is required to fulfill its fiduciary duties to the limited partners
of such ML Entity under applicable law based upon the advice of outside counsel
(who may be such general partner's regularly engaged outside counsel) and (y) at
least two Business Days in advance of the date of mailing of the proxy statement
for such annual meeting of RSI stockholders, one or more ML Directors objects to
the proposed nomination of the Objectionable Nominee in writing to RSI or orally
during a meeting of the Board of Directors or the Nominating Committee, and (ii)
on all other matters to be voted on by holders of Voting Securities, actually
voted (in person or by proxy) by the ML Entities. Each of the ML Entities shall
be present, in person or by proxy, at all duly held meetings of stockholders of
RSI so that all Voting Securities held by the ML Entities may be counted for the
purposes of determining the presence of a quorum at such meetings.
ARTICLE IV
TRANSFERS; RIGHT OF FIRST REFUSAL
4.1 Transfers of Voting Securities. None of the ML Entities shall, directly
or indirectly, Transfer any Voting Securities except:
(a) to RSI;
(b) pursuant to a merger or consolidation of RSI or pursuant
to a plan of liquidation of RSI, which has been approved by the affirmative vote
of a majority of the members of the Board of Directors then in office; provided
that at the time of such approval the number of ML Directors then serving on the
Board of Directors shall not exceed the number contemplated by Article II
hereof;
(c) provided that the rights of the ML Entities under this
Agreement shall not transfer to the transferee of such securities, pursuant to a
bona fide public offering registered under the Securities Act of 1933, as
amended (the "Securities Act"), in which the ML Entities shall use commercially
reasonable efforts to (i) effect as wide a distribution of such Voting
Securities as is reasonably practicable, and (ii) prevent any Person or Group
from acquiring pursuant to such offering beneficial ownership of Voting
Securities or securities convertible into Voting Securities representing in the
aggregate 5% or more of the Total Voting Power;
(d) provided that the rights of the ML Entities under this
Agreement shall not transfer to the transferee of such securities, pursuant to
Rule 144 under the Securities Act;
(e) provided that the rights of the ML Entities under this
Agreement shall not transfer to the transferee of such securities, pursuant to a
pro rata distribution (including any such distribution pursuant to any
liquidation or dissolution of any ML Entity) by any ML Entity to its partners or
stockholders if no successor or distributee, as the case may be, and no Person
that controls such successor or distributee, acquires from any ML Entity
beneficial ownership of Voting Securities representing more than 3% of the Total
Voting Power in such distribution (in each case other than any distributee which
is an Affiliate of an ML Entity provided that such Affiliate shall thereafter
promptly distribute all such Voting Securities to its own partners or
stockholders and such partners or stockholders do not thereby acquire from such
Affiliate beneficial ownership of Voting Securities representing more than 3% of
the Total Voting Power in such distribution).
(f) provided that the rights of the ML Entities under this
Agreement shall not transfer to the transferee of such securities, (i) Transfers
of Voting Securities to any Person or Group which is a Schedule 13D Filer and
which, after giving effect to such Transfer, would beneficially own Voting
Securities representing in the aggregate less than 5% of the Total Voting Power,
and (ii) Transfers to any Person or Group which is a Schedule 13G Filer of
Voting Securities representing in the aggregate less than 10% of the Total
Voting Power;
(g) provided that (i) the rights of the ML Entities under this
Agreement shall not transfer to the transferee of such securities, and (ii) the
Transfer is made on or after January 1, 2000 in connection with the required
dissolution of any ML Entity, Transfers of Voting Securities to any Person or
Group (A) which, after giving effect to such Transfer would beneficially own
Voting Securities representing in the aggregate less than the greater of (x) 15%
of the Total Voting Power or (y) such other percentage of the Total Voting Power
as would make such Person or Group an "Acquiring Person" under RSI's
shareholders' rights plan or (B) approved by the prior affirmative vote of a
majority of the Continuing Directors at a meeting at which a Continuing Director
Quorum is present;
(h) pursuant to a tender offer or exchange offer that the
Board of Directors, by action taken by the affirmative vote of a majority of the
members of the Board of Directors then in office, has determined not to oppose;
or
(i) in accordance with the provisions of Section 4.2.
4.2 Right of First Refusal. Except as otherwise permitted by Section
4.1, if any ML Entity or ML Entities (each a "Selling ML Entity" and,
collectively, the "Selling ML Entities") shall receive an offer from, or have
entered into any agreement or understanding with, a third party or parties to
purchase or otherwise acquire Voting Securities from such Selling ML Entity,
such Selling ML Entity shall have the right, provided that the rights of such
Selling ML Entity under this Agreement shall not transfer to such third party or
parties, to Transfer the amount of Voting Securities which are the subject of
such offer by, or agreement or understanding with, such third party or parties
if, prior to such Transfer, RSI shall have been given the opportunity, in the
following manner, to purchase such Voting Securities:
(a) The Selling ML Entities shall give notice (the "Transfer
Notice") to RSI in writing of such proposed Transfer specifying the amount of
Voting Securities proposed to be sold or transferred, the proposed price
therefor (the "Transfer Consideration"), the identity of the offeror and the
other material terms upon which such Transfer is proposed to be made.
(b) RSI shall have the right, exercisable by written notice
given by RSI to the Selling ML Entities within 15 Business Days after receipt of
the Transfer Notice, to purchase from such Selling ML Entities all, but not less
than all, the Voting Securities specified in such Transfer Notice for cash in an
amount equivalent to the Transfer Consideration.
(c) If the Transfer Consideration specified in the Transfer
Notice includes any property other than cash, such Transfer Consideration shall
be deemed to be the amount of any cash included in the Transfer Consideration
plus the value (as jointly determined by a nationally recognized investment
banking firm selected by each party) of such other property included in such
Transfer Consideration. For this purpose, the parties shall use their reasonable
best efforts to cause any determination of the value of any such other property
included in the Transfer Consideration to be made within ten Business Days after
the date of delivery of the Transfer Notice. If the firms selected by RSI and
the Selling ML Entities are unable to agree upon the value of any such other
property within such ten Business Day period, such firms shall promptly select a
third nationally recognized investment banking firm whose determination shall be
conclusive.
(d) If RSI exercises its right of first refusal hereunder, the
closing of the purchase of the Voting Securities with respect to which such
right has been exercised shall take place within 60 days after RSI gives notice
of such exercise, which period of time shall be extended as necessary (but in no
event for a period of time longer than 60 days after the end of such 60 day
period) in order to comply with applicable securities and other laws and
regulations or any listing agreement to which RSI is a party. Upon exercise of
its right of first refusal, RSI shall be legally obligated to consummate the
purchase contemplated thereby, shall use its reasonable best efforts to secure
all approvals required in connection therewith, and shall be liable in damages
to the Selling ML Entities if for any reason, including the failure to obtain
any requisite approvals, the purchase is not consummated; provided, however,
that if RSI does not obtain any required approval of its stockholders with
respect to such purchase, (i) RSI shall have no liability to the Selling ML
Entities with respect to the failure of such purchase to be consummated and (ii)
the Voting Securities with respect to which such right was exercised shall not
thereafter be subject to the right of first refusal under this Section 4.2
unless to the extent that RSI specifies a designee to purchase Voting Securities
pursuant to Section 4.2(f) hereof and such designee consummates its purchase of
Voting Securities within the time remaining in the time period during which RSI
was to have consummated its purchase of such Voting Securities.
(e) If RSI does not exercise its right of first refusal
hereunder within the time specified for such exercise, the Selling ML Entities
shall be free, during the period of 60 days following the expiration of such
time for exercise (which period of time may be extended as necessary (but in no
event for a period of time longer than 60 days after the end of such 60 day
period) in order to comply with applicable securities and other laws and
regulations), to Transfer the Voting Securities specified in the Transfer Notice
to the offeror specified in the Transfer Notice on the terms described in the
Transfer Notice and at a price not less than the Transfer Consideration. If the
Selling ML Entities fail to Transfer the Voting Securities specified in the
Transfer Notice in such manner within such period, the Voting Securities
specified in the Transfer Notice shall again be subject to the terms of Sections
4.1 and 4.2 hereof.
(f) If RSI elects to exercise any of its rights under this
Section 4.2, RSI may specify, prior to closing such purchase, another Person as
its designee to purchase the Voting Securities to which such notice of intention
to exercise such rights relates. If RSI designates another Person as the
purchaser pursuant to this Section 4.2, RSI shall be legally obligated, in
accordance with Section 4.2(d) above, to complete such purchase if its designee
fails to do so.
ARTICLE V
Legends and Stop Transfer Orders
5.1 Legend. All certificates evidencing Voting Securities beneficially
owned by any of the ML Entities shall bear the following legend:
"The securities represented by this certificate are subject to the
restrictions on disposition and to the other provisions of a Standstill
Agreement dated as of May __, 1996 among Rykoff-Sexton, Inc., Merrill Lynch
Capital Partners, Inc., Merrill Lynch Capital Appreciation Partnership No.
B-XVIII, L.P., Merrill Lynch KECALP L.P. 1994, ML Offshore LBO Partnership
No. B-XVIII, ML IBK Positions, Inc., MLCP Associates L.P. No. II, MLCP
Associates L.P. No. IV, Merrill Lynch KECALP L.P. 1991, Merrill Lynch
Capital Appreciation Partnership No. XIII, L.P., ML Offshore LBO
Partnership No. XIII, ML Employees LBO Partnership No. I, L.P., Merrill
Lynch KECALP L.P. 1987, Merchant Banking L.P. No. II. Copies of such
Agreement are on file at the respective offices of such parties."
5.2 Stop Transfer Orders. The ML Entities each hereby consent to the
entry of stop transfer orders with the transfer agents of any such Voting
Securities against the transfer of such legended certificates representing such
Voting Securities except in compliance with this Agreement.
5.3 Removal or Modification of Legend. RSI agrees that upon any
Transfer of the securities represented by such certificates made in compliance
with the provisions of this Agreement, it will, upon the presentation to its
transfer agent of the certificates containing such legend, remove such legend
from the certificates being sold or registered.
ARTICLE VI
Representations and Warranties
6.1 Representations and Warranties of the ML Entities. Each of the ML
Entities severally and not jointly represent and warrant to RSI as follows:
(a) Merrill Lynch Capital Partners, Inc. and ML IBK Positions,Inc. are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware. Merrill Lynch Capital Appreciation Partnership
No. B-XVIII, L.P., MLCP Associates L.P. No. II, MLCP Associates L.P. No. IV,
Merrill Lynch KECALP L.P. 1991, Merrill Lynch KECALP L.P. 1994, Merrill Lynch
Capital Appreciation Partnership No. XIII, L.P., ML Employees LBO Partnership
No. I, L.P., Merrill Lynch KECALP L.P. 1987 and Merchant Banking L.P. No. II are
each limited partnerships, duly organized, validly existing and in good standing
under the laws of the State of Delaware. ML Offshore LBO Partnership No. B-XVIII
and ML Offshore LBO Partnership No. XIII are each limited partnerships, duly
organized, validly existing and in good standing under the laws of the Cayman
Islands.
(b) Assuming that (i) the ML Entities Shares (as defined below) are duly
authorized, validly issued, fully paid and nonassessable, and, immediately prior
to their receipt by the ML Entities, are free and clear of all security
interests, liens, claims, proxies, charges, encumbrances and options of any
nature whatsoever created by any Person other than an ML Entity (other than
those created by this Agreement, the Registration Rights Agreement and the Tax
Agreement), and (ii) the issuance of the ML Entities Shares to the ML Entities
is properly recorded in the stock ledger of RSI, then, upon the issuance of the
ML Entities Shares to the ML Entities pursuant to Sections 4.1 and 4.2 of the
Merger Agreement, each of the ML Entities will be the beneficial and record
owner of RSI Common Shares in the respective amounts set forth in Schedule I
attached hereto (the "ML Entities Shares"), free and clear of all security
interests, liens, claims, proxies, charges, encumbrances and options of any
nature whatsoever, and there will be no outstanding options, warrants or rights
to purchase or acquire, or agreements relating to, any of the ML Entities Shares
(other than those created by this Agreement, the Registration Rights Agreement
and the Tax Agreement).
(c) Except for the ML Entities Shares and 2,100 shares of Voting Securities
owned by Merrill Lynch, neither any of the ML Entities, nor any of their
Affiliates, owns beneficially or of record, directly or indirectly, any Voting
Securities or any options, warrants or rights of any nature (including
conversion and exchange rights) to acquire beneficial ownership of any Voting
Securities.
(d) Each of the ML Entities has full legal right, power and authority to
enter into and perform this Agreement. This Agreement has been duly authorized,
executed and delivered by each of the ML Entities. This Agreement constitutes a
legally valid and binding agreement of each of the ML Entities, enforceable in
accordance with its terms, except that such enforceability may be subject to
bankruptcy, insolvency, receivership, reorganization, moratorium or other
similar laws relating to creditors' rights now or hereafter in effect and by
general equitable principles.
(e) The execution and delivery of this Agreement by the ML Entities does
not conflict with or constitute a violation of or default under the respective
certificates of incorporation, partnership agreements or certificates of
partnership (or comparable documents) of any of the ML Entities or any statute,
law, regulation, order or decree applicable to any of the ML Entities, or any
contract, commitments, agreement, arrangement or restriction of any kind to
which any of the ML Entities are a party or by which any of the ML Entities are
bound, other than such violations as would not prevent or materially delay the
performance by such ML Entity of its obligations hereunder or otherwise subject
RSI to any claim or liability.
(f) Schedule II hereto sets forth a true, accurate and complete list of the
percentage ownership interests of each partner or securityholder (without naming
them) in each ML Entity listed thereon. Schedule III hereto sets forth, with
respect to each ML Entity listed thereon, the latest dissolution date for such
ML Entity under the terms of its partnership agreement.
6.2 Representations and Warranties of RSI. RSI hereby represents and
warrants to the ML Entities as follows:
(a) RSI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) RSI has full legal right, power and authority to enter into and perform
this Agreement and the execution and delivery of this Agreement by RSI have been
duly authorized by all necessary corporate action on behalf of RSI. This
Agreement constitutes a legally valid and binding agreement of RSI, enforceable
in accordance with its terms, except that such enforceability may be subject to
bankruptcy, insolvency, receivership, reorganization, moratorium or other
similar laws relating to creditors' rights now or hereafter in effect, and by
general equitable principles.
(c) Neither the execution and delivery of this Agreement nor the
consummation by RSI of the transactions contemplated hereby conflicts with or
constitutes a violation of or default under the Restated Certificate of
Incorporation or By-laws of RSI, any statute, law, regulation, order or decree
applicable to RSI, or any contract, commitment, agreement, arrangement or
restriction of any kind to which RSI is a party or by which RSI is bound, other
than such violations as would not prevent or materially delay the performance by
RSI of its obligations hereunder or otherwise subject any ML Entity to any claim
or liability.
ARTICLE VII
Further Assurances
Each party 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 their obligations
under this Agreement. If reasonably requested by RSI, each ML Entity agrees to
execute a letter to RSI confirming that the beneficial ownership of Voting
Securities by the ML Entities and their Affiliates does not represent in the
aggregate Total Voting Power in excess of the Standstill Percentage as of the
date of such letter.
ARTICLE VIII
Termination
Unless earlier terminated by written agreement of the parties hereto,
this Agreement shall terminate on the earlier of (i) the tenth anniversary of
the Effective Date and (ii) the date on which the ML Entities and their
Affiliates beneficially own Voting Securities representing in the aggregate less
than 10% of the Total Voting Power; provided, that if, prior to the tenth
anniversary of the Effective Date, (x) the ML Entities shall beneficially own
Voting Securities representing in the aggregate 10% or more of the Total Voting
Power, or (y) the ML Entities and their Affiliates shall beneficially own Voting
Securities representing in the aggregate 5% or more of the Total Voting Power
which causes them to be a Schedule 13D Filer, this Agreement shall automatically
be reinstated. Any termination of this Agreement as provided herein shall be
without prejudice to the rights of any party arising out of the breach by any
other party of any provisions of this Agreement which occurred prior to the
termination.
ARTICLE IX
Miscellaneous
9.1 Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy and confirmed by return telecopy, or seven days after being mailed by
first-class mail, postage prepaid in each case to the applicable addresses set
forth below:
If to RSI:
Rykoff-Sexton, Inc.
1050 Warrenville Road
Lisle, Illinois 60532-5201
Attn: Mark Van Stekelenburg, Chairman,
President and Chief Executive
Officer
Telecopy: (708) 971-6588
with a copy to:
Elizabeth C. Kitslaar, Esq.
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, Illinois 60601-1692
Telecopy: (312) 782-8585
If to the ML Entities:
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:
Marcia L. Tu, Esq.
Merrill Lynch & Co.
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281-1323
Telecopy: (212) 449-3207
with a copy to:
Bonnie Greaves, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telecopy: (212) 848-7179
or to such other address as such party shall have designated by notice so given
to each other party.
9.2 Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by the holders of a majority in number of the ML
Entities Shares and by RSI following approval thereof by a majority of the
Continuing Directors.
9.3 Successors and Assigns. Except as otherwise provided herein,
including, without limitation, Section 2.10, this Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the parties and
their respective Affiliates and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise. Except as otherwise provided herein,
this Agreement shall not be assignable.
9.4 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, the Merger Agreement and the ML Agreement.
9.5 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.
9.6 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.
9.7 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.
9.8 No Third Party Beneficiaries. This Agreement is not intended to be
for the benefit of and shall not be enforceable by any Person who or which is
not a party hereto.
9.9 Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware 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 Section 9.9 and shall not be deemed
to be a general submission to the jurisdiction of said court or in the State of
Delaware 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.
9.10 Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the law of the State
of Delaware.
9.11 Name, Captions. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
9.12 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.
9.13 Expenses. Each of the parties hereto shall bear their own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, except that in the event of a dispute concerning the terms or
enforcement of this Agreement, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
9.14 Press Releases. The initial press release relating to this
Agreement shall be a joint press release and, thereafter, RSI and the ML
Representative shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement, and
neither RSI nor any ML Entity shall issue any such press release or make any
such public statement without the consent (which shall not be unreasonably
withheld) of the other (the ML Representative acting on behalf of the ML
Entities for such purpose), except to the extent required by applicable law or
the rules and requirements of the New York Stock Exchange, in which case the
issuing party shall use its reasonably best efforts to consult with the other
party (the ML Representative in case of the ML Entities) before issuing any such
release or making any such public statement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
RYKOFF-SEXTON, INC.
By: /s/ Mark Van Stekelenburg
Mark Van Stekelenburg
Chairman, President and
Chief Executive Officer
MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
ML IBK POSITIONS, INC.
By: /s/ James V. Caruso
James V. Caruso
Vice President
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc.,
as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
SCHEDULE I
SHARE OWNERSHIP
Name of Stockholder RSI Common Shares
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. 4,357,505
B-XVIII, L.P.
MERRILL LYNCH KECALP L.P. 1994 67,879
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII 2,192,382
ML IBK POSITIONS, INC. 1,440,181
MLCP ASSOCIATES L.P. NO. II 52,257
MLCP ASSOCIATES L.P. NO. IV 13,575
MERRILL LYNCH KECALP L.P. 1991 189,793
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. 1,620,103
XIII, L.P.
ML OFFSHORE LBO PARTNERSHIP NO. XIII 41,188
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P. 40,273
MERRILL LYNCH KECALP L.P. 1987 30,434
MERCHANT BANKING L.P. NO. II 30,434
SCHEDULE II
PERCENTAGE OWNERSHIPS
DISTRIBUTION TO ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
DISTRIBUTION OF 100% OF US FOODSERVICE COMMON SHARES
JANUARY 1996
EXCHANGE
US FOODSERVICE
% OF SHARES FOR
US FOODSERVICE US FOODSERVICE 1.457 SHARES OF
CAPITAL ORIGINAL DISTRIBUTION SHARES REVERSE STOCK RYKOFF-SEXTON
PARTNERS CONTRIBUTION PERCENTAGE OF SHARES OUTSTANDING SPLIT OF .396 COMMON STOCK
- - --------------------------------------- ------------ ---------- ------------ -------------- -------------- ---------------
MERRILL LYNCH CAPITAL $17,120,179 71.82% 2,728,888 12.22% 1,080,640 1,574,492
APRECIATION COMPANY LIMITED II
MERRILL LYNCH CAPITAL APPRECIATION 6,480,221 27.18% 1,032,921 4.63% 409,037 595,967
LIMITED PARTNERSHIP II (SPECIAL LP)
MERRILL LYNCH CAPITAL PARTNERS, INC 0 0.00% 0 0.00% 0 0
INVESTMENT GENERAL PARTNER 238,290 1.00% 37,983 0.17% 15,041 21,915
ADMINISTRATIVE GENERAL PARTNER 100 0.00% 16 0.00% 6 9
----------- ------ --------- ----- --------- ---------
TOTAL $23,838,790 100.00% 3,799,808 17.02% 1,504,724 2,192,383
=========== ====== ========= ===== ========= =========
SECOND TIER DISTRIBUTION TO SHAREHOLDERS OF MERRILL LYNCH
CAPITAL APPRECIATION COMPANY LIMITED II FROM ML OFFSHORE
LBO PARTNERSHIP NO. B-XVIII AS A RESULT OF THE DISTRIBUTION
OF 100% OF US FOODSERVICE COMMON SHARES
JANUARY 1996
EXCHANGE
US FOODSERVICE
% OF SHARES FOR
% DISTRIBUTION US FOODSERVICE US FOOSERVICE 1.457 SHARES OF
OF TOTAL OF SHARES REVERSE STOCK RYKOFF-SEXTON
# SHARES SHARES SHARES OUTSTANDING SPLIT OF .396 COMMON STOCK
- - --- -------- -------- ------------ -------------- ------------- ---------------
1 7,513 43.85% 1,196,645* 5.36% 473,872 690,432
2 5,009 29.24% 797,817* 3.57% 315,936 460,319
3 1,373 8.01% 218,687 0.98% 86,600 126,176
4 501 2.92% 79,798 0.36% 31,600 46,041
5 1,036 6.05% 165,011 0.74% 65,344 95,206
6 440 2.57% 70,082 0.31% 27,752 40,435
7 402 2.35% 64,029 0.29% 25,355 36,942
8 176 1.03% 28,033 0.13% 11,101 16,174
9 201 1.17% 32,015 0.14% 12,678 18,472
10 240 1.40% 38,226 0.17% 15,138 22,056
11 198 1.16% 31,537 0.14% 12,489 18,196
12 44 0.26% 7,008 0.03% 2,775 4,043
------ ------- --------- --------- ---------- ---------
17,133 100.00% 2,728,888 12.22% 1,080,640 1,574,492
====== ====== ========= ========= ========== =========
* REPRESENTS OVER 1% OF O/S STOCK. (2 INVESTORS)
SECOND TIER DISTRIBUTION TO PARTNERS OF MERRILL LYNCH
CAPITAL APPRECIATION LIMITED PARTNERSHIP II (SPECIAL LP)
FROM ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII AS A RESULT OF
THE DISTRIBUTION OF 100% OF US FOODSERVICE COMMON SHARES
JANUARY 1996
EXCHANGE
CAPITAL US FOODSERVICE
ACCOUNT FOR PERCENT % OF SHARES FOR
B-XVIII OF TOTAL DISTRIBUTION US FOODSERVICE US FOOSERVICE 1.457 SHARES OF
INVESTMENT CAPITAL OF SHARES REVERSE STOCK RYKOFF-SEXTON
# @ 1/1/95 ACCOUNT SHARES OUTSTANDING SPLIT OF .396 COMMON STOCK
- - --- --------------- ---------------------- -------------- ------------- ---------------
1 $2,039,980.00 31.43% 324,678* 1.45% 128,571 187,328
2 917,990.00 14.14% 146,105 0.65% 57,858 84,299
3 506,995.00 7.81% 80,692 0.36% 31,954 46,557
4 917,990.00 14.14% 146,105 0.65% 57,858 84,299
5 463,995.00 7.15% 73,848 0.33% 29,244 42,609
6 407,996.00 6.29% 64,936 0.29% 25,715 37,467
7 1,003,990.00 15.47% 159,792 0.72% 63,278 92,196
8 0.00 0.00% 0 0.00% 0 0
9 230,998.00 3.56% 36,765 0.16% 14,559 21,212
------------- -------------------- ----------------------------------------------
$6,489,934.00 100.00% 1,032,921 4.63% 409,037 595,967
============= ====== ========= ========= ========= ========
* REPRESENTS OVER 1% OF O/S STOCK. (1 INVESTOR)
MERRILL LYNCH CAPITAL APPRECIATION FUND I & II
& OTHER MERRILL LYNCH ENTITIES
PORTFOLIO INVESTMENT POSITION IN COMMON STOCK OF
US FOODSERVICE, INC.
DECEMBER 31, 1995
Ownership of
# Partnership/Corporation Common Shares
- - --- ---------------------------------------------------------------- -------------
1. Merrill Lynch Capital Appreciation Partnership No. XIII, L.P. 2,807,941.6552
2. ML Offshore LBO Partnership No. XIII 71,387.8790
3. Merrill Lynch Capital Appreciation Partnership No. B-XVIII, L.P. 7,552,369.5000
4. ML Offshore LBO Partnership No. B-XVIII 3,799,808.0000
5. ML IBK Positions, Inc.* 2,496,102.7370
6. ML Employees LBO Partnership No. I, L.P. 69,802.2183
7. MLCP Associates L.P. No II 90,572.5000
8. MLCP Associates L.P. No IV 23,529.0000
9. Merrill Lynch KECALP L.P. 1987 52,748.5393
10. Merrill Lynch KECALP L.P. 1991 328,947.0000
11. Merrill Lynch KECALP L.P. 1994 117,647.0000
12. Merchant Banking L.P. No II 52,748.5393
---------------
Total 17,463,604.5681
===============
* - Merrill Lynch itself.
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. XIII, L.P.
DISTRIBUTION OF 100% OF US FOODSERVICE COMMON SHARES
JANUARY 1996
US FOODSERVICE
% OF SHARES FOR
TOTAL % DISTRIBUTION US FOODSERVICE US FOODSERVICE 1,457 SHARES OF
CAPITAL OF OF SHARES REVERSE STOCK RYKOFF-SEXTON
# COMMITMENT OWNERSHIP SHARES OUTSTANDING SPLIT OF .396 COMMON STOCK
- - --- ------------- ------------ ------------ --------------- -------------- ---------------
1 $ 90,000,000 25.42% 706,745* 3.16% 279,869 407,769
2 30,000,000 8.47% 235,582* 1.05% 93,290 135,924
3 29,500,000 8.33% 231,655* 1.04% 91,735 133,658
4 25,000,000 7.06% 196,318 0.88% 77,742 113,270
5 25,000,000 7.06% 196,318 0.88% 77,742 113,270
6 19,000,000 5.37% 149,202 0.67% 59,084 86,085
7 15,000,000 4.24% 117,791 0.53% 46,645 67,962
8 10,000,000 2.82% 78,527 0.35% 31,097 45,308
9 10,000,000 2.82% 78,527 0.35% 31,097 45,308
10 10,000,000 2.82% 78,527 0.35% 31,097 45,308
11 10,000,000 2.82% 78,527 0.35% 31,097 45,308
12 6,000,000 1.69% 47,116 0.21% 18,658 27,185
13 5,000,000 1.41% 39,264 0.18% 15,549 22,655
14 5,000,000 1.41% 39,264 0.18% 15,549 22,655
15 5,000,000 1.41% 39,264 0.18% 15,549 22,655
16 5,000,000 1.41% 39,264 0.18% 15,549 22,655
17 5,000,000 1.41% 39,264 0.18% 15,549 22,655
18 5,000,000 1.41% 39,264 0.18% 15,549 22,655
19 4,000,000 1.13% 31,411 0.14% 12,439 18,124
20 4,000,000 1.13% 31,411 0.14% 12,439 18,124
21 4,000,000 1.13% 31,411 0.14% 12,439 18,124
22 3,000,000 0.85% 23,558 0.11% 9,329 13,592
23 3,000,000 0.85% 23,558 0.11% 9,329 13,592
24 3,000,000 0.85% 23,558 0.11% 9,329 13,592
25 3,000,000 0.85% 23,558 0.11% 9,329 13,592
26 3,000,000 0.85% 23,558 0.11% 9,329 13,592
27 2,500,000 0.71% 19,632 0.09% 7,774 11,327
28 2,500,000 0.71% 19,632 0.09% 7,774 11,327
29 2,500,000 0.71% 19,632 0.09% 7,774 11,327
30 2,000,000 0.56% 15,705 0.07% 6,219 9,061
31 2,000,000 0.56% 15,705 0.07% 6,219 9,061
32 2,000,000 0.56% 15,705 0.07% 6,219 9,061
33 2,000,000 0.56% 15,705 0.07% 6,219 9,061
34 2,000,000 0.56% 15,705 0.07% 6,219 9,061
------------ ------- --------- ------ ---------- ----------
$354,000,000 100.00% 2,779,863 12.45% $1,100,826 $1,603,903
------------ ======= --------- ------ ---------- ----------
3,575,758 28,079 0.13% 11,119 16,201
------------ --------- ------ ---------- ----------
$357,575,758 2,807,942 12.57% 1,111,945 1,620,104
============ ======= ========= ====== ========== ==========
* REPRESENTS OVER 1% OF O/S STOCK. (3 INVESTORS)
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. B-XVIII, L.P.
DISTRIBUTION OF 100% OF US FOODSERVICE COMMON SHARES
JANUARY 1996
EXCHANGE
US FOODSERVICE
% OF SHARES FOR
CAPITAL ACCOUNT % DISTRIBUTION US FOODSERVICE US FOODSERVICE 1,457 SHARES OF
BALANCE AT OF OF SHARES REVERSE STOCK RYKOFF-SEXTON
# JANUARY 1, 1995 OWNERSHIP SHARES OUTSTANDING SPLIT OF .396 COMMON STOCK
- - --- --------------- ----------- ------------- -------------- -------------- ---------------
1. $2,267,896 4.50% 336,522* 1.51% 133,262 194,163
2. 3,469,299 6.89% 514,792* 2.31% 203,856 297,016
3. 1,120,249 2.22% 166,228 0.74% 65,826 95,908
4. 2,655,143 5.27% 393,983* 1.76% 156,017 227,317
5. 2,601,973 5.16% 386,093* 1.73% 152,893 222,765
6. 2,857,970 5.67% 424,079* 1.90% 167,935 244,681
7. 2,601,974 5.16% 386,094* 1.73% 152,893 222,765
8. 2,036,418 4.04% 302,174* 1.35% 119,661 174,346
9. 1,642,568 3.26% 243,732* 1.09% 96,518 140,627
10. 3,917,840 7.78% 581,348* 2.60% 230,214 335,422
11. 2,381,643 4.73% 353,400* 1.58% 139,946 203,901
12. 1,896,530 3.76% 281,416* 1.26% 111,441 162,370
13. 2,168,310 4.30% 321,744* 1.44% 127,411 185,638
14. 1,295,989 2.57% 192,305 0.86% 76,153 110,955
15. 2,083,124 4.13% 309,104* 1.38% 122,405 178,344
16. 1,036,791 2.06% 153,844 0.69% 60,922 88,763
17. 619,206 1.23% 91,881 0.41% 36,385 53,013
18. 518,396 1.03% 76,922 0.34% 30,461 44,382
19. 952,658 1.89% 141,360 0.63% 55,979 81,561
20. 412,805 0.82% 61,254 0.27% 24,257 35,342
21. 758,611 1.51% 112,566 0.50% 44,576 64,947
22. 471,962 0.94% 70,032 0.31% 27,733 40,407
23. 758,611 1.51% 112,566 0.50% 44,576 64,947
24. 952,658 1.89% 141,360 0.63% 55,979 81,561
25. 518,396 1.03% 76,922 0.34% 30,461 44,382
26. 867,325 1.72% 128,698 0.58% 50,964 74,255
27. 758,611 1.51% 112,566 0.50% 44,576 64,947
28. 412,805 0.82% 61,254 0.27% 24,257 35,342
29. 518,396 1.03% 76,922 0.34% 30,461 44,382
30. 518,396 1.03% 76,922 0.34% 30,461 44,382
31. 518,396 1.03% 76,922 0.34% 30,461 44,382
32. 833,248 1.65% 123,641 0.55% 48,962 71,338
33. 606,890 1.20% 90,053 0.40% 35,661 51,958
34. 311,037 0.62% 46,153 0.21% 18,277 26,630
35. 259,197 0.51% 38,461 0.17% 15,231 22,192
36. 226,789 0.45% 33,652 0.15% 13,326 19,416
37. 259,197 0.51% 38,461 0.17% 15,231 22,192
38. 259,197 0.51% 38,461 0.17% 15,231 22,192
39. 433,660 0.86% 64,349 0.29% 25,482 37,127
40. 259,197 0.51% 38,461 0.17% 15,231 22,192
41. 207,358 0.41% 30,769 0.14% 12,185 17,754
42. 207,358 0.41% 30,769 0.14% 12,185 17,754
43. 207,358 0.41% 30,769 0.14% 12,185 17,754
44. 124,471 0.25% 18,470 0.08% 7,314 10,656
45. 239,418 0.48% 35,526 0.16% 14,068 20,497
46. 155,518 0.31% 23,077 0.10% 9,138 13,314
47. 129,599 0.26% 19,231 0.09% 7,615 11,095
48. 77,760 0.15% 11,538 0.05% 4,569 6,657
----------- ------- --------- ------ --------- ---------
50,388,201 100.00% 7,476,846 33.48% 2,960,831 4,313,931
----------- ====== --------- ===== --------- ---------
508,971 75,524 0.34% 29,908 43,576
----------- --------- ------ --------- ---------
$50,897,172 7,552,370 33.82% 2,990,739 4,357,507
=========== ====== ========= ===== ========= =========
* REPRESENTS OVER 1% OF O/S STOCK. (13 INVESTORS)
SCHEDULE III
DISSOLUTION DATES
Name of Stockholder Latest
Dissolution Date
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. B-XVIII, L.P. December 31, 2003
MERRILL LYNCH KECALP L.P. 1994 December 31, 2034
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII December 31, 2003
ML IBK POSITIONS, INC. None.
MLCP ASSOCIATES L.P. NO. II December 31, 2002
MLCP ASSOCIATES L.P. NO. IV December 31, 2006
MERRILL LYNCH KECALP L.P. 1991 December 31, 2033
MERRILL LYNCH CAPITAL APPRECIATION PARTNERSHIP NO. XIII, L.P. December 31, 2000
ML OFFSHORE LBO PARTNERSHIP NO. XIII December 31, 2000
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P. December 31, 2004
MERRILL LYNCH KECALP L.P. 1987 December 31, 2029
MERCHANT BANKING L.P. NO. II December 31, 2000
Exhibit D
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of May 17, 1996,
between RYKOFF-SEXTON, INC., a Delaware corporation (the "Company"), and the
other signatories hereto listed on the signature pages hereof.
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger dated
February 2, 1996 (the "Merger Agreement"), between the Company, USF Acquisition
Corporation, a Delaware corporation ("Merger Sub") and a wholly owned subsidiary
of the Company, and US Foodservice Inc., a Delaware corporation ("USF"), USF has
merged into Merger Sub on the date hereof, and pursuant thereto shares of Class
A Common Stock, par value $.01 per share, and Class B Common Stock, par value
$.01 per share, of USF ("USF Common Stock"), held by the USF stockholders have
been converted into shares of Common Stock, of the par value of $.10 per share,
of the Company ("Common Stock"); and
WHEREAS, pursuant to an Agreement dated as of February 2,
1996, as amended by Amendment No. 1 to Agreement dated as of April 8, 1996 (as
so amended, the "ML Agreement"), the Company has agreed to enter into this
Agreement to provide certain registration rights to the Shareholders with
respect to such shares of Common Stock.
NOW, THEREFORE, it is hereby agreed as follows:
1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Merger Agreement. For
purposes of this Agreement, the following terms shall have the following
meanings:
"Affiliate" has the meaning specified in Rule 12b-2 under the Exchange Act.
"Blackout Period" has the meaning specified in Section 6(a).
"Business Day" means a day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or in the case of determining a
date on which any payment is due, a day other than Saturday, Sunday or any day
on which banks located in New York City are authorized or obligated by law to
close.
"Counsel to the Holders" means the single law firm from time to time
representing the Holders, as appointed by the Holders of a majority in number of
the Registrable Securities.
"Effective Period" means, with respect to any Holder, a period commencing
on the date of this Agreement and ending on the earlier of (i) the first date as
of which all Registrable Securities cease to be Registrable Securities and (ii)
the date on which such Holder may sell Registrable Securities in accordance with
Rule 145(d)(3) under the Securities Act.
"Equitable Holder" means each of the Equitable Entities (as such term in
defined in the Merger Agreement) that is a holder of Registrable Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means each Shareholder, and each Person who is an Affiliate of
such Shareholder, that is a holder of Registrable Securities.
"Initiating Holder" has the meaning specified in Section 3(a).
"Inspectors" has the meaning specified in Section 7(l).
"ML Holder" means each of the ML Entities (as such term in defined in the
Merger Agreement), and each Affiliate of ML IBK Positions, Inc., that is a
holder of Registrable Securities.
"NASD" means the National Association of Securities Dealers, Inc.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
any Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
"Records" has the meaning specified in Section 7(l).
"Registrable Securities" means, collectively, (i) the shares of Common
Stock issued to the Persons signatory hereto pursuant to the Merger,
(collectively, the "Shares") and (ii) any securities paid, issued or distributed
in respect of any Shares by way of stock dividend or distribution or stock split
or in connection with a combination of shares, recapitalization, reorganization,
merger, consolidation or otherwise. Securities will cease to be Registrable
Securities in accordance with Section 2 hereof.
"Registration Expenses" means any and all out-of-pocket expenses incident
to the Company's performance of or compliance with this Agreement, including,
without limitation, (i) all SEC, NASD and securities exchange registration and
filing fees, (ii) all fees and expenses of complying with state securities or
blue sky laws (including reasonable fees and disbursements of counsel for any
underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees
and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange or automated quotation system pursuant to
Section 7(h), (v) the fees and disbursements of counsel for the Company and of
its independent public accountants, (vi) the reasonable fees and expenses of any
special experts retained by the Company in connection with the requested
registration, (vii) the reasonable fees and expenses of Counsel to the Holders
and (viii) out-of-pocket expenses of underwriters customarily paid by the issuer
to the extent provided for in any underwriting agreement, but excluding (x)
underwriting discounts and commissions, transfer taxes, if any, and documentary
stamp taxes, if any, and (y) any fees or disbursements of counsel to the Holders
or any Holder (other than Counsel to the Holders).
"Registration Statement" means any registration statement of the Company
referred to in Section 3 or 4, including any Prospectus, amendments and
supplements to any such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in any
such registration statement.
"Registration Hold Period" means a Section 7(e) Period or a Section 7(m)
Period.
"Related Securities" means any securities of the Company similar or
identical to any of the Registrable Securities, including, without limitation,
Common Stock and all options, warrants, rights and other securities convertible
into, or exchangeable or exercisable for, Common Stock.
"Requesting Holder" has the meaning specified in Section 3(a).
"SEC" means the Securities and Exchange Commission.
"Section 7(e) Period" has the meaning specified in Section 7(e).
"Section 7(m) Period" has the meaning specified in Section 7(m).
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder" means each of the Persons other than the Company who are
parties to this Agreement; provided, however, that for purposes of Section 3 of
this Agreement, Frank H. Bevevino shall be a Shareholder only as of such date he
ceases to be an employee of the Company or any Subsidiary of the Company.
"Shelf Registration" means a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act (or any successor
rule that may be adopted by the SEC).
"Underwritten Registration or Underwritten Offering" shall mean an
underwritten offering in which securities of the Company are sold to an
underwriter for reoffering to the public.
"Warrantholders Securities" means the securities proposed to be sold by
those holders of the Company's Common Stock Purchase Warrants who exercise their
registration rights pursuant to Section 20.2 thereof.
2. Securities Subject to This Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities. For the purposes of
this Agreement, any particular Registrable Securities will cease to be
Registrable Securities when and to the extent that (i) a Registration Statement
covering such Registrable Securities has been declared effective under the
Securities Act and such Registerable Securities have been disposed of pursuant
to such effective Registration Statement, (ii) such Registrable Securities are
distributed to the public pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act, (iii) such Registrable Securities shall have
been otherwise transferred or disposed of, new certificates therefor not bearing
a legend restricting further transfer shall have been delivered by the Company
and, at such time, subsequent transfer or disposition of such securities shall
not require registration or qualification of such securities under the
Securities Act or any similar state law then in force or (iv) such Registrable
Securities have ceased to be outstanding.
3. Piggy-Back Registration Rights.
a. Whenever during the Effective Period the Company shall propose to file a
registration statement under the Securities Act relating to the public offering
of Company Common Stock for the Company's own account (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or filed
in connection with an exchange offer or an offering of securities solely to
existing stockholders or employees of the Company) or for the account of any
holder of Common Stock (the "Initiating Holder") and on a form and in a manner
that would permit registration of Registrable Securities for sale to the public
under the Securities Act, the Company shall (i) give written notice at least 20
Business Days prior to the filing thereof to each Holder of Registrable
Securities then outstanding, specifying the approximate date on which the
Company proposes to file such registration statement and advising such Holder of
its right to have any or all of the Registrable Securities then held by such
Holder included among the securities to be covered thereby and (ii) at the
written request of any such Holder given to the Company within 15 days after
such Holder's receipt of written notice from the Company, include among the
securities covered by such registration statement the number of Registrable
Securities which such Holder ("Requesting Holder") shall have requested be so
included (subject, however, to reduction in accordance with paragraph (b) of
this Section).
b. Each Holder of Registrable Securities desiring to participate in an
offering pursuant to Section 3(a) may include shares of Company Common Stock in
any Registration Statement relating to such offering to the extent that the
inclusion of such shares of Company Common Stock shall not reduce the number of
shares of Company Common Stock to be offered and sold by the Company or any
Initiating Holder pursuant thereto. If the lead managing underwriter selected by
the Company for an underwritten offering pursuant to Section 3(a) determines
that marketing factors require a limitation on the number of shares of Company
Common Stock to be offered and sold by Requesting Holders in such offering,
there shall be included in the offering only that number of shares of Company
Common Stock, if any, that such lead managing underwriter reasonably and in good
faith believes will not jeopardize the success of the offering of all the shares
of Company Common Stock that the Company desires to sell for its own account or
that the Initiating Holder desires to sell for its own account, as the case may
be. In such event and provided the lead managing underwriter has so notified the
Company in writing, the shares of Company Common Stock to be included in such
offering shall consist of (i) first, the securities the Company or the
Initiating Holder, as the case may be, proposes to sell, and (ii) second, the
number, if any, of Registrable Securities and Warrantholders Securities
requested to be included in such registration that, in the opinion of such lead
managing underwriter can be sold without jeopardizing the success of the
offering of all the securities that the Company or the Initiating Holder, as the
case may be, desires to sell for its own account, such amount to be allocated on
a pro rata basis among the holders of Registrable Securities and Warrantholders
Securities who have requested their securities to be so included based on the
number of Registrable Securities and Warrantholders Securities that each holder
thereof has requested to be so included.
c. Nothing in this Section 3 shall create any liability on the part of the
Company to the Holders of Registrable Securities if the Company for any reason
should decide not to file a registration statement proposed to be filed under
Section 3(a) or to withdraw such registration statement subsequent to its
filing, regardless of any action whatsoever that a Holder may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
d. A request by Holders to include Registrable Securities in a proposed
underwritten offering pursuant to Section 3(a) shall not be deemed to be a
request for a demand registration pursuant to Section 4.
4. Demand Registration Rights.
(a) Upon the written request during the Effective Period of ML Holders
holding at least a majority in number of the Registrable Securities held by the
ML Holders that the Company effect the registration with the SEC under and in
accordance with the provisions of the Securities Act of all or part of such ML
Holder's or ML Holders' Registrable Securities (which written request shall
specify the aggregate number of shares of Registrable Securities requested to be
registered and the means of distribution), the Company will file a Registration
Statement covering such ML Holder's or ML Holders' Registrable Securities
requested to be registered within 30 Business Days after receipt of such
request; provided, however, that the Company shall not be required to take any
action pursuant to this Section 4:
(1) if prior to the date of such request the Company shall have effected
four registrations pursuant to this Section 4;
(2) if the Company has effected a registration pursuant to this Section 4
within the 180-day period next preceding such request which permitted ML Holders
holding Registrable Securities to register Registrable Securities;
(3) if the Company shall at the time have effective a Shelf Registration
pursuant to which the ML Holder or ML Holders that requested registration could
effect the disposition of such ML Holder's or ML Holders' Registrable Securities
in the manner requested;
(4) if the Registrable Securities which the Company shall have been
requested to register shall have a then current market value of less than
$50,000,000, unless such registration request is for all remaining Registrable
Securities held by the ML Holders; or
(5) during the pendency of any Blackout Period;
provided, however, that the Company shall be permitted to satisfy its
obligations under this Section 4(a) by amending (to the extent permitted by
applicable law) within 10 Business Days after a written request for
registration, any Registration Statement previously filed by the Company under
the Securities Act so that such Registration Statement (as amended) shall permit
the disposition (in accordance with the intended methods of disposition
specified as aforesaid) of all of the Registrable Securities for which a demand
for registration has been made under this Section 4(a). If the Company shall so
amend a previously filed Registration Statement, it shall be deemed to have
effected a registration for purposes of this Section 4.
b. The ML Holders delivering such request may distribute the Registrable
Securities covered by such request by means of an underwritten offering or any
other means, as determined by the ML Holders holding a majority of Registrable
Securities so requested to be registered.
c. Except for a Registration Statement subject to Section 4(d), a
registration requested pursuant to this Section 4 shall not be deemed to be
effected for purposes of this Section 4 if it has not been declared effective by
the SEC or become effective in accordance with the Securities Act and the rules
and regulations thereunder.
d. ML Holders holding a majority in number of the Registrable Securities
held by ML Holders to be included in a Registration Statement pursuant to this
Section 4 may, at any time prior to the effective date of the Registration
Statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request. If a Registration Statement
is so revoked, the ML Holders holding Registrable Securities requesting the
filing of such Registration Statement shall reimburse the Company for all its
out-of-pocket expenses incurred in the preparation, filing and processing of the
Registration Statement.
e. The Company will not include any securities which are not Registrable
Securities in any Registration Statement filed pursuant to a demand made under
this Section 4 without the prior written consent of the ML Holders holding a
majority in number of the Registrable Securities held by ML Holders and covered
by such Registration Statement.
5. Selection of Underwriters. In connection with any underwritten offering
pursuant to a Registration Statement filed pursuant to a demand made pursuant to
Section 4, ML Holders holding a majority in number of the Registrable Securities
to be included in the Registration Statement shall have the right to select a
lead managing underwriter or underwriters to administer the offering, which lead
managing underwriter or underwriters shall be reasonably satisfactory to the
Company; provided, however, that the Company shall have the right to select a
co-managing underwriter or underwriters for the offering, which co-managing
underwriter or underwriters shall be reasonably satisfactory to the ML Holders
holding a majority in number of the Registrable Securities held by ML Holders to
be included in the Registration Statement.
6. Blackout Periods; Holdback. a. If the Company determines in good faith
that the registration and distribution of Registrable Securities (i) would
materially impede, delay, interfere with or otherwise adversely affect any
pending financing, registration of securities, acquisition, corporate
reorganization or other significant transaction involving the Company or (ii)
would require disclosure of non-public material information that the Company has
a bona fide business purpose for preserving as confidential, as determined by
the Board of Directors of the Company in good faith, the Company shall promptly
give the Holders notice of such determination and shall be entitled to postpone
the filing or effectiveness of a Registration Statement for the shortest period
of time reasonably required, but in any event not to exceed 180 days with
respect to matters covered by clause (i) above, and not to exceed 90 days with
respect to matters covered by clause (ii) above (a "Blackout Period"); provided,
that a Blackout Period with respect to a registration of securities proposed by
the Company may, at the election of the Company, commence on the date that is 30
days prior to the date the Company in good faith estimates will be the date of
filing of, and end no later than the date, following the effective date of such
registration, specified in the form of underwriting agreement relating to such
registration during which the Company shall be prohibited from selling, offering
or otherwise disposing of Common Stock, but in no event to exceed 180 days;
provided further, that the Company shall not obtain any deferral under this
Section 6(a) more than once in any twelve-month period, other than normal
deferrals required prior to the public release of quarterly financial results of
the Company. The Company shall promptly notify each Holder of the expiration or
earlier termination of a Blackout Period.
b. Each Holder from time to time of more than 1% of Company Common Stock
agrees by acquisition of the Registrable Securities, if so requested in writing
by any managing underwriter, not to effect any public sale or distribution of
such securities or Related Securities during the seven days prior to and the 120
days after the effective time of any underwritten registration by the Company
(either for its own account, or for the benefit of the Holders of any securities
of the Company, including Registrable Securities, in each case as to which the
Holders are entitled to request to be included pursuant to Section 3) has become
effective or such period of time shorter than 120 days that is sufficient and
appropriate, in the opinion of the managing underwriter, in order to complete
the sale and distribution of securities included in such registration.
7. Registration Procedures. If and whenever the Company is required to use
reasonable best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, the Company
will:
a. prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on any form for which the
Company then qualifies or which counsel for the Company shall deem
appropriate, and which form shall be available for the sale of the
Registrable Securities in accordance with the intended methods of
distribution thereof (including, if so requested by the Holders,
distributions under Rule 415 under the Securities Act pursuant to a
Shelf Registration Statement), and use its reasonable best efforts to
cause such Registration Statement to become and remain effective;
b. prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement (including any Shelf
Registration referred to in Section 4(a)) and such amendments and
supplements to the Prospectus used in connection therewith as may be
necessary to maintain the effectiveness of such registration or as may
be required by the rules, regulations or instructions applicable to the
registration form utilized by the Company or by the Securities Act or
rules and regulations thereunder necessary to keep such Registration
Statement effective (i) in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution
of all securities purchased by it and (ii) in the case of any other
registration, for up to 90 days (or longer period in the event of a
Registration Hold Period during such offering, as provided in this
Section 7) and cause the Prospectus as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to otherwise comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement
until the earlier of (x) such 90th day (or longer period) and (y) such
time as all Registrable Securities covered by such Registration
Statement have ceased to be Registrable Securities;
c. furnish to each Holder of such Registrable Securities such
number of copies of such Registration Statement and of each amendment
and post-effective amendment thereto, any Prospectus or Prospectus
supplement and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable
Securities by such Holder (the Company hereby consenting to the use
(subject to the limitations set forth in the last paragraph of this
Section 7) of the Prospectus or any amendment or supplement thereto in
connection with such disposition);
d. use its reasonable best efforts to register or qualify such
Registrable Securities covered by such Registration Statement under
such other securities or blue sky laws of such jurisdictions as each
Holder shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Holder, except that the Company
shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for
the requirements of this Section 7(d), it would not be obligated to be
so qualified, to subject itself to taxation in any such jurisdiction,
or to consent to general service of process in any such jurisdiction;
e. notify each Holder of any such Registrable Securities
covered by such Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 7(b), of the
Company's becoming aware that the Prospectus included in such
Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing (the period
during which the Holders are required to refrain from effecting public
sales or distributions in such case being referred to as a "Section
7(e) Period"), and prepare and furnish to such Holder a reasonable
number of copies of an amendment to such Registration Statement or
related Prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities, such Prospectus shall
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, and the time during which such Registration Statement shall
remain effective pursuant to Section 7(b) shall be extended by the
number of days in the Section 7(e) Period;
f. notify each Holder of Registrable Securities covered by
such Registration Statement at any time,
(1) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become
effective;
(2) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional
information;
(3) of the issuance by the SEC of any stop order of which the Company or
its counsel is aware or should be aware suspending the effectiveness
of the Registration Statement or any order preventing the use of a
related Prospectus, or the initiation or any threats of any
proceedings for such purposes; and
(4) of the receipt by the Company of any written notification of the
suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction or the initiation or any threats of any
proceeding for that purpose;
g. otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the SEC, and make available to
its stockholders an earnings statement which shall satisfy the
provisions of Section 11(a) of the Securities Act, provided that the
Company shall be deemed to have complied with this paragraph if it has
complied with Rule 158 under the Securities Act;
h. use its reasonable best efforts to cause all such
Registrable Securities to be listed on any securities exchange or
automated quotation system on which the Common Stock is then listed, if
such Registrable Securities are not already so listed and if such
listing is then permitted under the rules of such exchange or automated
quotation system, and to provide a transfer agent and registrar for
such Registrable Securities covered by such Registration Statement no
later than the effective date of such Registration Statement;
i. if the registration is an underwritten registration, enter
into a customary underwriting agreement and in connection therewith:
(1) make such representations and warranties to the underwriters in form,
substance and scope as are customarily made by issuers to underwriters
in comparable underwritten offerings;
(2) obtain opinions of counsel to the Company (in form, scope and
substance reasonably satisfactory to the managing underwriters),
addressed to the underwriters, and covering the matters customarily
covered in opinions requested in comparable underwritten offerings;
(3) obtain "cold comfort" letters and bring-downs thereof from the
Company's independent certified public accountants addressed to the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters by
independent accountants in connection with underwritten offerings;
(4) if requested, provide indemnification in accordance with the
provisions and procedures of Section 10 hereof to all parties to be
indemnified pursuant to said Section; and
(5) deliver such documents and certificates as may be reasonably requested
by the managing underwriters to evidence compliance with clause (f)
above and with any customary conditions contained in the underwriting
agreement.
j. cooperate with the Holders of Registrable Securities
covered by such Registration Statement and the managing underwriter or
underwriters or agents, if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends)
representing the securities to be sold under such Registration
Statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or underwriters or
agents, if any, or such Holders may request;
k. if reasonably requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in
connection with an underwritten offering, incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Holders of a majority in number of the Registrable
Securities being sold agree should be included therein relating to the
plan of distribution with respect to such Registrable Securities,
including, without limitation, information with respect to the
principal amount of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten
offering of the Registrable Securities to be sold in such offering and
make all required filings of such Prospectus supplement or
post-effective amendment as promptly as practicable upon being notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
l. provide any Holder of Registrable Securities included in
such Registration Statement, any underwriter participating in any
disposition pursuant to such Registration Statement and any attorney,
accountant or other agent retained by any such Holder or underwriter
(collectively, the "Inspectors") with reasonable access during normal
business hours to appropriate officers of the Company and the Company's
subsidiaries to ask questions and to obtain information reasonably
requested by any such Inspector and make available for inspection all
financial and other records and other information, pertinent corporate
documents and properties of any of the Company and its subsidiaries and
affiliates (collectively, the "Records"), as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility; provided, however, that the Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors in writing are confidential shall not be disclosed to any
Inspector unless such Inspector signs or is otherwise bound by a
confidentiality agreement reasonably satisfactory to the Company; and
m. in the event of the issuance of any stop order of which the
Company or its counsel is aware or should be aware suspending the
effectiveness of the Registration Statement or of any order suspending
or preventing the use of any related Prospectus or suspending the
qualification of any Registrable Securities included in the
Registration Statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain its withdrawal; and
the period for which the Registration Statement shall be kept effective
shall be extended by a number of days equal to the number of days
between the issuance and withdrawal of any stop orders (a "Section 7(m)
Period").
The Company may require each Holder of Registrable Securities as to which
any registration is being effected to furnish the Company with such information
regarding such Holder and pertinent to the disclosure requirements relating to
the registration and the distribution of such securities as the Company may from
time to time reasonably request.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Sections 7(e) or 7(m), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Prospectus or Registration Statement
covering such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 7(e) or the
withdrawal of any stop order contemplated by Section 7(m), and, if so directed
by the Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities at the time of receipt of such notice.
8. Registration Expenses. The Company will pay all Registration Expenses in
connection with all registrations of Registrable Securities pursuant to Sections
3 and 4, and each Holder shall pay (x) any fees or disbursements of counsel to
such Holder (other than Counsel to the Holders) and (y) all underwriting
discounts and commissions and transfer taxes, if any, and documentary stamp
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Registration Statement.
9. Reports Under the Exchange Act. The Company agrees to:
a. file with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and
b. furnish to any Holder, during the Effective Period, forthwith upon
request (A) a written statement by the Company that it has complied with the
current public information and reporting requirements of Rule 144 under the
Securities Act and the Exchange Act and (B) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company with the SEC under the Exchange Act.
10. Indemnification; Contribution.
a. Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Holder of Registrable Securities, its officers, directors, agents,
trustees, stockholders and each Person who controls such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act),
against all losses, claims, damages, liabilities and expenses (including
reasonable attorneys' fees, disbursements and expenses, as incurred) incurred by
such party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or preliminary Prospectus, or any amendment or supplement to any of
the foregoing or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of a Prospectus or a preliminary Prospectus, in light of the
circumstances then existing) not misleading, except in each case insofar as the
same arise out of or are based upon any such untrue statement or omission made
in reliance on and in conformity with information with respect to such
indemnified party furnished in writing to the Company by such indemnified party
or its counsel expressly for use therein. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their officers,
directors, agents, trustees, stockholders and each Person who controls such
underwriters (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities. Notwithstanding the
foregoing provisions of this Section 10(a), the Company will not be liable to
any Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriter (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), under the indemnity agreement in this Section 10(a) for
any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense that arises out of such Person's failure to send or deliver
a copy of the final Prospectus to the Person asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of the Registrable Securities to such Person if
such statement or omission was corrected in such final Prospectus and the
Company has previously furnished copies thereof to such Holder or other Person
in accordance with this Agreement.
b. Indemnification by Holders of Registrable Securities. In connection with
any Registration Statement filed pursuant hereto, each Holder of Registrable
Securities to be covered thereby will furnish to the Company in writing such
information with respect to such Holder, including the name, address and the
amount of Registrable Securities held by such Holder, as the Company reasonably
requests for use in such Registration Statement or the related Prospectus and
agrees severally and not jointly to indemnify and hold harmless the Company, all
other Holders or any underwriter, as the case may be, and their respective
directors, officers, agents, trustees, stockholders and controlling Persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees, disbursements and expenses, as incurred),
incurred by such party pursuant to any actual or threatened action, suit,
proceeding or investigation arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in, or any omission or alleged
omission of a material fact required to be stated in, such Registration
Statement, Prospectus or preliminary Prospectus or any amendment or supplement
to any of the foregoing or necessary to make the statements therein (in case of
a Prospectus or preliminary Prospectus, in the light of the circumstances then
existing) not misleading, but only to the extent that any such untrue statement
or omission is made in reliance on and in conformity with information with
respect to such Holder furnished in writing to the Company by such Holder or its
counsel specifically for inclusion therein; provided, however, that the
liability of each Holder hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense that is equal to the proportion
that the net proceeds from the sale of shares sold by such Holder under such
registration statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by such Holder from the sale of Registrable Securities covered by such
Registration Statement.
c. Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such indemnified party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Agreement (provided that
failure to give such notification shall not affect the obligations of the
indemnifying party pursuant to this Section 10 except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure). In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgement of any indemnified party a
conflict of interest is likely to exist, based on the written opinion of
counsel, between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party shall
not be liable for the fees and expenses of (i) more than one counsel for all
Holders of Registrable Securities who are indemnified parties, selected by a
majority of the Holders of Registrable Securities who are indemnified parties
(which choice shall be reasonably satisfactory to the Company), (ii) more than
one counsel for the underwriters or (iii) more than one counsel for the Company
in connection with any one action or separate but similar or related actions. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claims, unless in the reasonable judgment of any indemnified party based on
the written opinion of counsel a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels. No indemnifying party, in
defense of any such action, suit, proceeding or investigation, shall, except
with the consent of each indemnified party, consent to the entry of any judgment
or entry into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such action, suit, proceeding or
investigation to the extent the same is covered by the indemnity obligation set
forth in this Section 10. No indemnified party shall consent to entry of any
judgment or enter into any settlement without the consent of each indemnifying
party.
d. Contribution. If the indemnification from the indemnifying party
provided for in this Section 10 is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations; provided, however, that the liability of each
Holder hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense that is equal to the proportion that the net
proceeds from the sale of shares sold by such Holder under such Registration
Statement bears to the total net proceeds from the sale of all securities sold
thereunder, but not in any event to exceed the net proceeds received by such
Holder from the sale of Registrable Securities covered by such Registration
Statement. The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 10(c), any legal and other fees and expenses reasonably
incurred by such indemnified party in connection with any investigation or
proceeding.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 10, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 10(a) or (b), as the case may be, without regard to the relative fault
of said indemnifying parties or indemnified party or any other equitable
consideration provided for in this Section 10(d).
e. The provisions of this Section 10 shall be in addition to any liability
which any indemnifying party may have to any indemnified party and shall survive
the termination of this Agreement.
11. Participation in Underwritten Offerings. No Holder of Registrable
Securities may participate in any underwritten offering pursuant to Section 3
hereunder unless such Holder (a) agrees to sell such Holder's securities on the
basis provided in any underwriting arrangements approved by the Company in its
reasonable discretion and (b) completes and executes all questionnaires, powers
of attorney, custody agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements.
12. Miscellaneous. a. Remedies. 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.
b. Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Securities then outstanding.
c. Notices. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission and by courier service (with
proof of service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
(i) if to an ML Holder to:
Merrill Lynch Capital Partners, Inc.
225 Liberty Street
New York, NY 10080-6123
Attn: James V. Caruso
Telecopy: (212) 236-7364
with a copy to:
Marcia L. Tu, Esq.
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
250 Vesey Street
New York, NY 10281-1323
Telecopy: (212) 449-3207
with a copy to:
Bonnie Greaves, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Telecopy: (212) 848-7179
(ii) if to an Equitable Holder to:
Alliance Corporate Finance
Group Incorporated
1285 Avenue of the Americas
19th Floor
New York, NY 10019
Attention: Corporate Finance
Department
Telecopy: (212) 554-1032
(iii) if to Frank H. Bevevino to:
Frank H. Bevevino
US Foodservice Inc.
Crosscreek Pointe
1065 Highway 315, Suite 101
Wilkes-Barre, PA 18702
Telecopy: (717) 822-0909
(iv) if to the Company to:
Rykoff-Sexton, Inc.
1050 Warrenville Road
Lisle, IL 60532-5201
Attn: Mark Van Stekelenburg,
Chairman, President and
Chief Executive Officer
Telecopy: (708) 971-6588
with copies to:
Elizabeth C. Kitslaar, Esq.
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, IL 60601-1692
Telecopy: (312) 782-8585
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
d. Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, any Holder other than the Shareholders and
any successors thereof; provided, however, that (i) any Holder shall have agreed
in writing to become a Holder under this Agreement and to be bound by the terms
and conditions hereof and (ii) subject to clause (i), this Agreement and the
provisions of this Agreement that are for the benefit of the Holders shall not
be assignable by any Holder to any Person that is not so permitted to be a
Holder, and any such purported assignment shall be null and void.
e. 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.
f. Descriptive Headings. The descriptive heading used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
g. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
h. Severability. If any term of this Agreement or the application thereof
to any party or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such term to the
other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
i. Entire Agreement. This Agreement constitutes 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
RYKOFF-SEXTON, INC.
By: /s/ Mark Van Stekelenburg
Mark Van Stekelenburg
Chairman, President and Chief
Executive Officer
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/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1994
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
ML IBK POSITIONS, INC.
By: /s/ James V. Caruso
James V. Caruso
Vice President
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1991
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
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/ James V. Caruso
James V. Caruso
Vice President
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERRILL LYNCH KECALP L.P. 1987
By: KECALP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc., as General Partner
By: /s/ James V. Caruso
James V. Caruso
Vice President
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: /s/ U. Peter C. Gummeson
U. Peter C. Gummeson
Investment Officer
EQUITABLE DEAL FLOW FUND, L.P.
By: EQUITABLE MANAGED ASSETS, L.P., as General Partner
By: THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED
STATES, as General Partner
By: /s/ U. Peter C. Gummeson
U. Peter C. Gummeson
Investment Officer
EQUITABLE VARIABLE LIFE INSURANCE COMPANY
By: /s/ U. Peter C. Gummeson
U. Peter C. Gummeson
Investment Officer
/s/ Frank H. Bevevino
Frank H. Bevevino
Exhibit E
ASSUMPTION AGREEMENT
This Assumption Agreement is dated as of the 23rd day of
December, 1997. Capitalized terms used but not otherwise defined herein have the
meanings assigned to such terms in the Amended and Restated Support Agreement,
dated as of June 30, 1997 (the "Support Agreement"), among JP Foodservice, Inc.,
a Delaware corporation ("JPFI"), and the other persons whose names are set forth
on the signature pages thereto (collectively the "Stockholders").
WHEREAS, in conjunction with the Merger, JPFI wishes to assume
all of the obligations of Rykoff-Sexton under the Registration Rights Agreement
dated as of May 17, 1996 among Rykoff-Sexton and the other persons whose
signatures are set forth on the signature pages thereto (the "Registration
Rights Agreement");
NOW, THEREFORE, in consideration for the execution by the
Stockholders of the Support Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
effective at the Effective Time, JPFI shall unconditionally assume and assure
all of Rykoff-Sexton's obligations under the Registration Rights Agreement.
IN WITNESS WHEREOF, JPFI has executed this Assumption Agreement as of the
date first written above.
JP FOODSERVICE, INC.
By: /s/ David M. Abramson
Name: David M. Abramson
Title: Senior Vice President
Exhibit F
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D, dated
as of December 31, 1997 (the "Schedule 13D"), with respect to the common stock,
par value $.01 per share, of JP Foodservice, Inc. is, and any amendments thereto
shall be, filed on behalf of each of us pursuant to and in accordance with the
provisions of Rule 13d-1(f)(1) under the Securities and Exchange Act of 1934, as
amended, and that this Agreement shall be included as an Exhibit to the Schedule
13D and each such amendment. Each of the undersigned agrees to be responsible
for the timely filing of the Schedule 13D and any amendments thereto, and for
the completeness and accuracy of the information concerning itself contained
therein. Each of the undersigned further agrees that Merrill Lynch Capital
Partners, Inc. may file the Schedule 13D, and any and all amendments thereto, on
its behalf. This Agreement may be executed in any number of counterparts, all of
which when taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 2nd day of January, 1998.
MERRILL LYNCH & CO., INC.
By: /s/ Marcia L. Tu
Name: Marcia L. Tu
Title: Attorney-in-fact *
MERRILL LYNCH GROUP, INC.
By: /s/ Marcia L. Tu
Name: Marcia L. Tu
Title: Attorney-in-fact *
MERRILL LYNCH MBP INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERCHANT BANKING L.P. NO. II
By: Merrill Lynch MBP Inc., as
General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH CAPITAL PARTNERS, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
ML EMPLOYEES LBO MANAGERS, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
ML EMPLOYEES LBO PARTNERSHIP NO. I, L.P.
By: ML Employees LBO Managers, Inc.
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH LBO PARTNERS NO. IV, L.P.
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
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/ James V. Caruso
Name: James V. Caruso
Title: Vice President
ML OFFSHORE LBO PARTNERSHIP NO. XIII
By: Merrill Lynch LBO Partners
No. IV, L.P., as General Partner
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH LBO PARTNERS NO. B-IV, L.P.
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
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/ James V. Caruso
Name: James V. Caruso
Title: Vice President
ML OFFSHORE LBO PARTNERSHIP NO. B-XVIII
By: Merrill Lynch LBO Partners
No. B-IV, L.P., as General Partner
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MLCP ASSOCIATES L.P. NO. II
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MLCP ASSOCIATES L.P. NO. IV
By: Merrill Lynch Capital Partners, Inc.,
as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
ML IBK POSITIONS, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
KECALP, INC.
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH KECALP L.P. 1987
By: KECALP, Inc., as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH KECALP L.P. 1991
By: KECALP, Inc., as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
MERRILL LYNCH KECALP L.P. 1994
By: KECALP, Inc., as General Partner
By: /s/ James V. Caruso
Name: James V. Caruso
Title: Vice President
* (See Powers of Attorney Attached)
\par POWER OF ATTORNEY
\par TO PREPARE AND EXECUTE DOCUMENTS PURSUANT TO SECTIONS 13 AND 16 OF THE
\par SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
\par AND RULES THEREUNDER, BY AND ON BEHALF OF
\par
\par MERRILL LYNCH & CO., INC.
\par
\par KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
\par appoints MARCIA L. TU its true and lawfully attorney-in-fact to:
\par
\par (1) to prepare and execute, for and on behalf of the undersigned, any and
\par all forms, schedules, reports and other documents relating to Merrill Lynch &
\par Co., Inc.'s direct or indirect ownership of securities that are required to be
\par filed with the United States Securities and Exchange Commission pursuant to
\par Section 13 and 16 of the Securities Exchange Act of 1934, as amended, and the
\par rules thereunder (collectively, the "Exchange Act");
\par
\par (2) do and perform any and all acts for and on behalf of the undersigned
\par which may be necessary or desirable to comply with the requirements of Sections
\par 13 and 16 of the Exchange Act including, but not limited to, executing documents
\par required by said sections of the Exchange Act and effecting the timely filing
\par thereof with the United States Securities and Exchange Commission and any other
\par authority; and
\par
\par (3) take any other action of any type whatsoever in connection with the
\par foregoing which, in the opinion of such attorney-in-fact, may be of benefit to,
\par in the best interest of, or legally required by, the undersigned, it being
\par understood that the documents executed by such attorney-in-fact on behalf of the
\par undersigned pursuant to this Power of Attorney shall be in such form and shall
\par contain such terms and conditions as such attorney-in-fact may approve in his
\par discretion.
\par
\par The undersigned hereby grants to such attorney-in-fact full power
\par and authority to do and perform all and every act and thing whatsoever
\par requisite, necessary and proper to be done in the exercise of any of the rights
\par and powers herein granted, as fully to all intents and purposes as such
\par attorney-in-fact might or could do if personally present, hereby ratifying and
\par confirming all that such attorney-in-fact shall lawfully do or cause to be done
\par by virtue of this power of attorney and the rights and powers herein granted.
\par The undersigned acknowledges that the foregoing attorney-in-fact, in serving in
\par such capacity at the request of the undersigned, is not assuming any of the
\par undersigned's responsibilities to comply with Sections 13 or 16 of the Exchange
\par Act.
\par
\par IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
\par be executed as of this 30th day of November 1994.
\par
\par MERRILL LYNCH & CO., INC.
\par
\par
\par
\par By /s/Barry S. Friedberg
\par ----------------------------
\par Barry S. Friedberg
\par Executive Vice President
\par
\par
\par
\par
\par
\par POWER OF ATTORNEY
\par TO PREPARE AND EXECUTE DOCUMENTS PURSUANT TO SECTIONS 13 AND 16 OF THE
\par SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
\par AND RULES THEREUNDER, BY AND ON BEHALF OF
\par
\par MERRILL LYNCH GROUP, INC.
\par
\par KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
\par appoints MARCIA L. TU its true and lawful attorney-in-fact to:
\par
\par (1) to prepare and execute, for and on behalf of the undersigned, any and
\par all forms, schedules, reports and other documents relating to Merrill Lynch
\par Group, Inc.'s direct or indirect ownership of securities that are required to be
\par filed with the United States Securities and Exchange Commission pursuant to
\par Section 13 and 16 of the Securities Exchange Act of 1934, as amended, and the
\par rules thereunder (collectively, the "Exchange Act");
\par
\par (2) do and perform any and all acts for and on behalf of the undersigned
\par which may be necessary or desirable to comply with the requirements of Sections
\par 13 and 16 of the Exchange Act including, but not limited to, executing documents
\par required by said sections of the Exchange Act and effecting the timely filing
\par thereof with the United States Securities and Exchange Commission and any other
\par authority; and
\par
\par (3) take any other action of any type whatsoever in connection with the
\par foregoing which, in the opinion of such attorney-in-fact, may be of benefit to,
\par in the best interest of, or legally required by, the undersigned, it being
\par understood that the documents executed by such attorney-in-fact on behalf of the
\par undersigned pursuant to this Power of Attorney shall be in such form and shall
\par contain such terms and conditions as such attorney-in-fact may approve in his
\par discretion.
\par
\par The undersigned hereby grants to such attorney-in-fact full power and
\par authority to do and perform all and every act and thing whatsoever requisite,
\par necessary and proper to be done in the exercise of any of the rights and powers
\par herein granted, as fully to all intents and purposes as such attorney-in-fact
\par might or could do if personally present, hereby ratifying and confirming all
\par that such attorney-in-fact shall lawfully do or cause to be done by virtue of
\par this power of attorney and the rights and powers herein granted. The undersigned
\par acknowledges that the foregoing attorney-in-fact, in serving in such capacity at
\par the request of the undersigned, is not assuming any of the undersigned's
\par responsibilities to comply with Sections 13 or 16 of the Exchange Act.
\par
\par IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to
\par be executed as of this 8th day of December 1994.
\par
\par
\par MERRILL LYNCH GROUP, INC.
\par
\par
\par
\par By: /s/Rosemary T. Berkery
\par ----------------------------
\par Rosemary T. Berkery
\par Vice President
\par
\par
\par