Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JP FOODSERVICE, INC.,
XXXXXX ACQUISITION CORP.
AND
XXXXXX-XXXXXX, INC.
DATED AS OF JUNE 30, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
SECTION 1.1. The Merger................................. 2
SECTION 1.2. Closing.................................... 2
SECTION 1.3. Effective Time............................. 2
SECTION 1.4. Effects of the Merger...................... 2
SECTION 1.5. Certificate of Incorporation and By-laws
of the Surviving Corporation and JPFI...... 3
SECTION 1.6. Directors and Officers..................... 3
SECTION 1.7. Reservation of Right to Revise
Transaction................................ 5
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
SECTION 2.1. Effect on Capital Stock.................... 5
SECTION 2.2. Exchange of Certificates................... 8
SECTION 2.3. Certain Adjustments........................ 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of RSI...... 12
(a) Organization, Standing and
Corporate Power....................... 12
(b) Subsidiaries.......................... 13
(c) Capital Structure..................... 13
(d) Authority; Noncontravention........... 15
(e) SEC Documents; Undisclosed
Liabilities........................... 17
(f) Information Supplied.................. 17
(g) Absence of Certain Changes or Events.. 18
(h) Compliance with Applicable Laws;
Litigation............................ 19
(i) Absence of Changes in Benefit Plans... 20
(j) ERISA Compliance...................... 20
(k) Taxes................................. 22
(l) Voting Requirements................... 23
(m) State Takeover Statutes;
Certain Provisions of RSI
Certificate........................... 23
(n) Accounting Matters.................... 24
(o) Brokers............................... 24
(p) Opinion of Financial Advisor.......... 24
(q) Ownership of JPFI Common Stock........ 25
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(r) Intellectual Property................. 25
(s) Certain Contracts..................... 25
(t) RSI Rights Agreement.................. 26
(u) Environmental Liability............... 26
SECTION 3.2. Representations and Warranties of JPFI..... 27
(a) Organization, Standing and Corporate
Power................................. 27
(b) Subsidiaries.......................... 27
(c) Capital Structure..................... 28
(d) Authority; Noncontravention........... 29
(e) SEC Documents; Undisclosed
Liabilities........................... 31
(f) Information Supplied.................. 32
(g) Absence of Certain Changes or Events.. 32
(h) Compliance with Applicable Laws;
Litigation............................ 33
(i) Absence of Changes in Benefit Plans... 34
(j) ERISA Compliance...................... 34
(k) Taxes................................. 36
(l) Voting Requirements................... 37
(m) State Takeover Statutes;
Certificate of Incorporation.......... 37
(n) Accounting Matters.................... 37
(o) Brokers............................... 38
(p) Opinion of Financial Advisors......... 38
(q) Ownership of RSI Common Stock......... 38
(r) Intellectual Property................. 38
(s) Certain Contracts..................... 39
(t) JPFI Rights Agreement................. 39
(u) Environmental Liability............... 40
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business....................... 40
SECTION 4.2. No Solicitation or Negotiations........... 45
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of the Form S-4 and the Joint
Proxy Statement; Stockholders Meetings.... 46
SECTION 5.2. Letters of RSI's Accountants.............. 47
SECTION 5.3. Letters of JPFI's Accountants............. 48
SECTION 5.4. Access to Information; Confidentiality.... 48
SECTION 5.5. Best Efforts.............................. 49
SECTION 5.6. Employment Agreements..................... 50
SECTION 5.7. Indemnification, Exculpation and
Insurance................................. 50
SECTION 5.8. Fees and Expenses......................... 51
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SECTION 5.9. Public Announcements...................... 52
SECTION 5.10. Affiliates................................ 52
SECTION 5.11. NYSE Listing.............................. 52
SECTION 5.12. Tax Treatment............................. 53
SECTION 5.13. Pooling of Interests...................... 53
SECTION 5.14. Standstill Agreements; Confidentiality
Agreements................................. 53
SECTION 5.15. Post-Merger Operations.................... 53
SECTION 5.16. Conveyance Taxes.......................... 53
SECTION 5.17 8 7/8% Indenture........................... 53
SECTION 5.18 Certain Tax Matters........................ 54
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to
Effect the Merger......................... 54
SECTION 6.2. Conditions to Obligations of JPFI......... 56
SECTION 6.3. Conditions to Obligations of RSI.......... 56
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination............................... 57
SECTION 7.2. Effect of Termination..................... 59
SECTION 7.3. Amendment................................. 59
SECTION 7.4. Extension; Waiver......................... 59
SECTION 7.5. Termination Expenses ..................... 60
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and
Warranties................................ 60
SECTION 8.2. Notices................................... 61
SECTION 8.3. Definitions............................... 61
SECTION 8.4. Interpretation............................ 62
SECTION 8.5. Counterparts.............................. 63
SECTION 8.6. Entire Agreement; No Third-Party
Beneficiaries............................. 63
SECTION 8.7. Governing Law............................. 63
SECTION 8.8. Assignment................................ 63
SECTION 8.9. Consent to Jurisdiction................... 63
SECTION 8.10. Headings, Etc............................. 64
SECTION 8.11. Severability.............................. 64
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Exhibit A Form of RSI Stock Option Agreement
Exhibit B Form of JPFI Stock Option Agreement
Exhibit C Form of Support Agreement
Exhibit D Form of JPFI Affiliate Letter
Exhibit E Form of RSI Affiliate Letter
Exhibit F Form of Amendment to Amended and Restated By-
Laws of JPFI
Exhibit G Form of Employment Agreement with Xxxx Xxx
Xxxxxxxxxxxx
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AGREEMENT AND PLAN OF MERGER dated as of June 30,
1997, among JP FOODSERVICE, INC., a Delaware corporation
("JPFI"), XXXXXX ACQUISITION CORP. ("Merger Sub"), a Delaware
corporation and a wholly-owned subsidiary of JPFI, and XXXXXX-
XXXXXX, 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 Sec-
tion 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 stock-
holders; and
WHEREAS, as a condition to, and on the date im-
mediately 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 in-
tended 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 follow-
ing, the execution of this Agreement, JPFI and certain stock-
holders of RSI will enter into, and RSI will execute an ac-
knowledgment to, a support agreement (the "Support Agreement")
attached hereto as Exhibit C; and
WHEREAS, JPFI and RSI desire to make certain repre-
sentations, warranties, covenants and agreements in connection
with the Merger and also to prescribe various conditions to the
Merger;
NOW, THEREFORE, in consideration of the representa-
tions, 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 ac-
cordance 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 Ef-
fective 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 provi-
sions 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 Certifi-
cate 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.
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SECTION 1.5. Certificate of Incorporation and By-
laws of the Surviving Corporation and JPFI. (a) At the Effec-
tive 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 Xxxxxx-Xxxxxx,
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, Xxxxx X. Xxxxxx shall be Chairman and Chief
Executive Officer of JPFI and Xxxx Xxx Xxxxxxxxxxxx shall be
Vice Chairman and President of JPFI and, subject to Section
1.6(b), shall be nominated for election to the class of direc-
tors of the JPFI Board of Directors whose terms shall expire in
1998.
(b) Prior to the Effective Time, JPFI shall (i) in-
crease 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 di-
rectors, as selected by JPFI prior to the Effective Time, plus
(B) seven individuals, no fewer than four of whom shall be out-
side directors, two of whom shall be individuals designated by
Xxxxxxx Xxxxx Capital Partners, Inc., one of whom shall be Xxxx
Xxx Xxxxxxxxxxxx, 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 Xxxxxxx Xxxxx Capital Part-
ners 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 Sec-
tion 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 direc-
tors each, three of whom shall be incumbent directors of the
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JPFI Board of Directors pursuant to clause (ii)(A) of this Sec-
tion 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 com-
prised of five directors, three of whom shall be incumbent di-
rectors 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 Xxxxxxx
Xxxxx 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 pur-
suant to clause (ii)(B) of the first sentence of this Section
1.6(b), Xxxxx X. Xxxxxx shall be appointed to the class of di-
rectors whose terms expire in 1998, and Xxxxxxx Xxxxx shall be
appointed to the class of directors whose terms expire in 1999.
(c) As of the Effective Time, the JPFI Board of Di-
rectors shall initially have three committees, as follows: an
audit committee, a compensation committee and a nominating com-
mittee. 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 replace-
ment 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 In-
corporation 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 Xxxxxxx Xxxxx Capital Partners, Inc. as RSI's
designee thereon.
(d) Except as set forth in Section 1.6(a), the di-
rectors 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 Sur-
viving Corporation.
(e) It is currently contemplated that the first
three vacancies on the JPFI Board of Directors to occur follow-
ing the Effective Time shall not be filled, but that in each
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case the number of directors shall be reduced, so that the to-
tal number of directors constituting the JPFI Board of Direc-
tors shall thereafter be 14.
SECTION 1.7. Reservation of Right to Revise Transac-
tion. 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) mate-
rially 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 deliv-
ered in exchange therefor.
(b) Conversion of RSI Common Stock. Subject to Sec-
tion 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
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0.84 (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 val-
idly issued, fully paid and nonassessable share of common stock
of the Surviving Corporation.
(d) JPFI Common Stock. At and after the Effective
Time, each share of JPFI Common Stock issued and outstanding
immediately prior to the Closing Date shall remain an issued
and outstanding share of common stock of JPFI and shall not be
affected by the Merger.
(e) Options and Warrants. (i) RSI will take all
action necessary such that, at the Effective Time, each option
granted by RSI to purchase shares of RSI Common Stock which is
outstanding and exercisable immediately prior thereto shall
cease to represent a right to acquire shares of RSI Common
Stock and shall be converted into an option to purchase shares
of JPFI Common Stock in an amount and at an exercise price de-
termined as provided below (and otherwise, in the case of op-
tions, subject to the terms of the RSI Stock Plans (as defined
in Section 3.1(c)) and the agreements evidencing grants there-
under) (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 Ra-
tio, provided that any fractional shares of JPFI Com-
mon 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 ex-
ercise price per share of RSI Common Stock under the
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original option divided by the Exchange Ratio, pro-
vided 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 ef-
fected 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 ref-
erences 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 Annu-
ity Association of America, the Nippon Credit Bank, Ltd. and
Dresdner Bank AG (each, an "Assumed Warrant") shall be assumed
by JPFI and shall constitute a warrant to acquire, otherwise on
the same terms and conditions as were applicable under such
Assumed Warrant, a number of shares of JPFI Common Stock equal
to the number of JPFI Common Shares that a holder of such As-
sumed Warrant would have received in the Merger if such holder
had exercised such Assumed Warrant for shares of RSI Common
Stock immediately prior to the Effective Time, at a price per
share equal to the aggregate exercise price for the shares of
RSI Common Stock subject thereto divided by the number of JPFI
Common Shares that a holder of such Assumed Warrant would have
received in the Merger if such holder had exercised such As-
sumed Warrant for shares of RSI Common Stock immediately prior
to the Effective Time.
(iv) As soon as practicable following the Effective
Time, JPFI shall deliver, upon due surrender of the Assumed
Options and Assumed Warrants, to holders of Assumed Options and
Assumed Warrants appropriate option and warrant agreements rep-
resenting 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 nec-
xxxxxx 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, ef-
fective as of, or reasonably promptly following, the Effective
Time, with respect to JPFI Common Stock subject to the Assumed
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Options and shall use commercially reasonable efforts to main-
tain the effectiveness of such registration statement or regis-
tration statements (and maintain the current status of the pro-
spectus or prospectuses contained therein) for so long as the
Assumed Options remain outstanding and exercisable. With re-
spect 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) Ex-
change Agent. As of the Effective Time, JPFI shall enter into
an agreement with such bank or trust company as may be desig-
nated 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 ac-
cordance with this Article II, through the Exchange Agent, cer-
tificates 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 "Ex-
change 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 out-
standing shares of RSI Common Stock (the "Certificates") whose
shares were converted into the right to receive the Merger Con-
sideration 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 sur-
rendering the Certificates in exchange for the Merger Consider-
ation. 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 re-
quired 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
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which such holder has the right to receive pursuant to the pro-
visions of this Article II, certain dividends or other distri-
butions 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 forth-
with 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 deliv-
ered 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 issu-
ance 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 estab-
lish 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 divi-
dends 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 Com-
mon 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 frac-
tional 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
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with this Article II. Subject to the effect of applicable es-
cheat or similar laws, following surrender of any such Certifi-
cate there shall be paid to the holder of the certificate rep-
resenting 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 Cer-
tificates 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 pay-
able 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 sat-
isfaction 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 Ar-
ticle II, except as otherwise provided by law.
(e) No Fractional Shares. (i) Nothstanding any-
thing 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 frac-
tional 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 frac-
tional shares, JPFI shall pay each former holder of RSI Common
Stock an amount in cash equal to the product obtained by multi-
plying (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 other-
wise be entitled by (B) the average of the closing prices of
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the JPFI Common Stock as reported on the NYSE Composite Report-
ing 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 Cer-
tificates 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 ac-
cordance 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 Cer-
tificates 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 frac-
tional 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 of-
ficial 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 di-
rected by JPFI, on a daily basis. Any interest and other in-
come 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 af-
fidavit 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 rea-
sonable amount as the Surviving Corporation may direct as in-
demnity against any claim that may be made against it with re-
spect 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
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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 contem-
plated by this Agreement prior to such reclassification, re-
capitalization, split-up, combination, exchange or dividend.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of RSI.
Except as disclosed in the Disclosure Schedule delivered by RSI
to JPFI prior to the execution of this Agreement (the "RSI Dis-
closure Schedule") and making reference to the particular sub-
section of this Agreement to which exception is being taken,
RSI represents and warrants to JPFI as follows:
(a) Organization, Standing and Corporate Power. (i)
Each of RSI and its subsidiaries (as defined in Section 8.3) is
a corporation or other legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions
which recognize such concept) under the laws of the jurisdic-
tion 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 subsidiar-
ies, for those jurisdictions where the failure to be so orga-
nized, existing or in good standing individually or in the ag-
gregate would not have a material adverse effect (as defined in
Section 8.3) on RSI. Each of RSI and its subsidiaries is duly
qualified or licensed to do business and is in good standing
(with respect to jurisdictions which recognize such concept) in
each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those juris-
dictions where the failure to be so qualified or licensed or to
be in good standing individually or in the aggregate would not
have a material adverse effect on RSI.
(ii) RSI has delivered to JPFI prior to the execution
of this Agreement complete and correct copies of any amendments
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to its certificate of incorporation (the "RSI Certificate") and
by-laws not filed as of the date hereof with the RSI Filed SEC
Documents (as defined in Section 3.1(g)).
(iii) In all material respects, the minute books of
RSI and its subsidiaries contain accurate records of all meet-
ings and accurately reflect all other actions taken by the
stockholders, the Board of Directors and all committees of the
Board of Directors of RSI (or, as the case may be, each of its
subsidiaries) since January 1, 1995.
(b) Subsidiaries. Exhibit 21 to RSI's Annual Report
on Form 10-K for the fiscal year ended April 27, 1996 includes
all the subsidiaries of RSI which as of the date of this Agree-
ment 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 Sig-
nificant 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, encum-
brances and security interests of any kind or nature whatsoever
(collectively, "Liens") and free of any other restriction (in-
cluding 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 agree-
ments 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 subsid-
iaries 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 Manage-
ment 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
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amended as of the date hereof, have been filed as exhibits to
the RSI Filed SEC Documents or delivered to JPFI (such plans,
collectively, the "RSI Stock Plans"); (v) 331,761 shares of RSI
Common Stock were reserved for issuance upon conversion of the
Assumed Warrants and (vi) 125,000 shares of RSI Preferred Stock
were reserved for issuance upon exercise of preferred stock
purchase rights (the "RSI Rights") issued pursuant to the
Amended and Restated Rights Agreement, dated as of May 15,
1996, by and between RSI and ChaseMellon Shareholder Services
L.L.C., as rights agent (as successor to Chemical Bank) (the
"RSI Rights Agreement"). Section 3.1(c) of the RSI Disclosure
Schedule sets forth a complete and correct list, as of June 27,
1997, of the number of shares of RSI Common Stock subject to
employee stock options or other rights to purchase or receive
RSI Common Stock granted under the RSI Stock Plans (col-
lectively, "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 Com-
mon Stock pursuant to the RSI Employee Stock Options or as ex-
pressly 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 ac-
quire from RSI or any RSI subsidiary, and any obligation of RSI
or any RSI subsidiary to issue, any capital stock, voting secu-
rities or securities convertible into or exchangeable or exer-
cisable for capital stock or voting securities of RSI, and (y)
there are no outstanding obligations of RSI or any RSI subsid-
iary to repurchase, redeem or otherwise acquire any such secu-
rities or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. There are no outstand-
ing (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.
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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 registra-
tion 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 subsidiar-
ies, 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 ordi-
nary 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 requi-
site corporate power and authority to enter into this Agree-
ment, each of the Option Agreements and, subject, in the case
of the Merger, to the RSI Stockholder Approval (as defined in
Section 3.1(l)), to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agree-
ment and each of the Option Agreements by RSI and the consumma-
tion 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 de-
livery 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 de-
fault (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or ac-
celeration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon any of the properties
or assets of RSI or any of its subsidiaries or (assuming the
consummation of the transactions contemplated hereby without
giving effect to Section 1.7) in any restriction on the conduct
of JPFI's business or operations under, (i) the RSI Certificate
or the by-laws of RSI or the comparable organizational docu-
ments 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
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governmental filings and other matters referred to in the fol-
lowing sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to RSI or any of its
subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such con-
flicts, violations, defaults, rights, losses, restrictions or
Liens that individually or in the aggregate would not (x) have
a material adverse effect on RSI or JPFI or (y) reasonably be
expected to impair the ability of RSI to perform its obliga-
tions under this Agreement and the Option Agreements. No con-
sent, approval, order or authorization of, action by or in re-
spect of, or registration, declaration or filing with, any fed-
eral, state, local or foreign government, any court, admin-
istrative, 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 con-
nection 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 Xxxx-Xxxxx-Xxxxxx 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 "Ex-
change Act"), as may be required in connection with this Agree-
ment, 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 docu-
ments with the relevant authorities of other states in which
RSI is qualified to do business and such filings with Govern-
mental Entities to satisfy the applicable requirements of state
securities or "blue sky" laws; and (4) such consents, approv-
als, 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 con-
summation of the transactions contemplated thereby has been
approved by the RSI Board of Directors in the manner contem-
plated by Section 3.1(a) of that certain Standstill Agreement
(the "Standstill Agreement"), dated as of May 17, 1996, by and
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between RSI and the ML Entities (as defined therein). The en-
try into this Agreement and the consummation of the transac-
tions 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) SEC Documents; Undisclosed Liabilities. RSI has
filed all required registration statements, prospectuses, re-
ports, schedules, forms, statements and other documents (in-
cluding exhibits and all other information incorporated
therein) with the SEC since December 31, 1994 (the "RSI SEC
Documents"). As of their respective dates, the RSI SEC Docu-
ments complied in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to
such RSI SEC Documents, and none of the RSI SEC Documents when
filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not mislead-
ing. The financial statements of RSI included in the RSI SEC
Documents comply as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in ac-
cordance with GAAP (except, in the case of unaudited state-
ments, as permitted by Form 10-Q of the SEC) applied on a con-
sistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the xxxxxxx-
dated financial position of RSI and its consolidated subsid-
iaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-
end audit adjustments). RSI has not treated as restructuring
charges any significant expenses that RSI would otherwise have
expensed against operating income in the ordinary course of
business. Except (i) as reflected in such financial statements
or in the notes thereto or (ii) for liabilities incurred in
connection with this Agreement, the Option Agreements or the
transactions contemplated hereby or thereby, neither RSI nor
any of its subsidiaries has any liabilities or obligations of
any nature which, individually or in the aggregate, would have
a material adverse effect on RSI.
(f) Information Supplied. None of the information
supplied or to be supplied by RSI specifically for inclusion or
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incorporation by reference in (i) the registration statement on
Form S-4 to be filed with the SEC by JPFI in connection with
the issuance of JPFI Common Stock in the Merger (the "Form
S-4") will, at the time the Form S-4 becomes effective under
the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not mis-
leading or (ii) the Joint Proxy Statement will, at the date it
is first mailed to RSI's stockholders or at the time of the RSI
Stockholders Meeting, contain any untrue statement of a mate-
rial fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are
made, not misleading. The Joint Proxy Statement will comply as
to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except
that no representation or warranty is made by RSI with respect
to statements made or incorporated by reference therein based
on information supplied by JPFI specifically for inclusion or
incorporation by reference in the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except
for liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby and
thereby, and except as permitted by Section 4.1(a), since April
27, 1996, RSI and its subsidiaries have conducted their busi-
ness only in the ordinary course consistent with past practice
or as disclosed in any RSI SEC Document filed since such date
and prior to the date hereof, and there has not been (i) any
material adverse change (as defined in Section 8.3) in RSI,
(ii) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with
respect to any of RSI's capital stock, (iii) any split, combi-
nation or reclassification of any of RSI's capital stock or any
issuance or the authorization of any issuance of any other se-
curities in respect of, in lieu of or in substitution for
shares of RSI's capital stock, except for issuances of RSI Com-
mon Stock upon exercise or conversion of RSI Employee Stock
Options, in each case awarded prior to the date hereof in ac-
cordance with their present terms or issued pursuant to Section
4.1(a), (iv)(A) any granting by RSI or any of its subsidiaries
to any current or former director, executive officer or other
key employee of RSI or its subsidiaries of any increase in com-
pensation, bonus or other benefits, except for normal increases
as a result of promotions, normal increases of base pay in the
ordinary course of business or as was required under any em-
ployment agreements in effect as of April 27, 1996 or disclosed
in Section 3.1(i) of the RSI Disclosure Schedule, (B) any
granting by RSI or any of its subsidiaries to any such current
or former director, executive officer or key employee of any
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increase in severance or termination pay, or (C) any entry by
RSI or any of its subsidiaries into, or any amendment of, any
employment, deferred compensation, consulting, severance, ter-
mination or indemnification agreement with any such current or
former director, executive officer or key employee, (v) except
insofar as may have been disclosed in RSI SEC Documents filed
and publicly available prior to the date of this Agreement (as
amended to the date hereof, the "RSI Filed SEC Documents") or
required by a change in GAAP, any change in accounting methods,
principles or practices by RSI materially affecting its assets,
liabilities or business, (vi) except insofar as may have been
disclosed in the RSI Filed SEC Documents, any tax election that
individually or in the aggregate would have a material adverse
effect on RSI or any of its tax attributes or any settlement or
compromise of any material income tax liability, or (vii) any
action taken by RSI or any of the RSI subsidiaries during the
period from April 28, 1996 through the date of this Agreement
that, if taken during the period from the date of this Agree-
ment through the Effective Time, would constitute a breach of
Section 4.1(a).
(h) Compliance with Applicable Laws; Litigation.
(i) RSI, its subsidiaries and employees hold all permits, li-
censes, variances, exemptions, orders, registrations and ap-
provals of all Governmental Entities which are required for the
operation of the businesses of RSI and its subsidiaries (the
"RSI Permits"), except where the failure to have any such RSI
Permits individually or in the aggregate would not have a mate-
rial adverse effect on RSI. RSI and its subsidiaries are in
compliance with the terms of the RSI Permits and all applicable
statutes, laws, ordinances, rules and regulations, except where
the failure so to comply individually or in the aggregate would
not have a material adverse effect on RSI. As of the date of
this Agreement, except as disclosed in the RSI Filed SEC Docu-
ments, no action, demand, requirement or investigation by any
Governmental Entity and no suit, action or proceeding by any
person, in each case with respect to RSI or any of its subsid-
iaries or any of their respective properties, is pending or, to
the knowledge (as defined in Section 8.3) of RSI, threatened,
other than, in each case, those the outcome of which individu-
ally or in the aggregate would not (A) have a material adverse
effect on RSI or (B) reasonably be expected to impair the abil-
ity of RSI to perform its obligations under this Agreement or
the Option Agreements or prevent or materially delay the con-
summation of any of the transactions contemplated hereby or
thereby.
(ii) Neither RSI nor any RSI subsidiary is subject to
any outstanding order, injunction or decree which has had or,
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insofar as can be reasonably foreseen, individually or in the
aggregate will have, a material adverse effect on RSI.
(i) Absence of Changes in Benefit Plans. RSI has
delivered to JPFI true and complete copies of (i) all severance
and employment agreements of RSI with directors, executive of-
ficers or key employees, (ii) all severance programs and poli-
cies of each of RSI and each RSI subsidiary, and (iii) all
plans or arrangements of RSI and each RSI subsidiary relating
to its employees which contain change in control provisions, in
each case which has not been filed as an exhibit to a RSI Filed
SEC Document. Since April 27, 1996, there has not been any
adoption or amendment in any material respect by RSI or any of
its subsidiaries of any collective bargaining agreement, em-
ployment agreement, consulting agreement, severance agreement
or any material bonus, pension, profit sharing, deferred com-
pensation, incentive compensation, stock ownership, stock pur-
chase, stock option, phantom stock, retirement, vacation, sev-
erance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding providing benefits to
any current or former employee, officer or director of RSI or
any of its wholly owned subsidiaries (collectively, the "RSI
Benefit Plans"), or any material change in any actuarial or
other assumption used to calculate funding obligations with
respect to any RSI pension plans, or any material change in the
manner in which contributions to any RSI pension plans are made
or the basis on which such contributions are determined. Since
April 27, 1996, neither RSI nor any RSI subsidiary has amended
any RSI Employee Stock Options or any RSI Stock Plans to ac-
celerate the vesting of, or release restrictions on, awards
thereunder, or to provide for such acceleration in the event of
a change in control.
(j) ERISA Compliance. (i) With respect to the RSI
Benefit Plans, no event has occurred and, to the knowledge of
RSI, there exists no condition or set of circumstances, in con-
nection with which RSI or any of its subsidiaries could be sub-
ject to any liability that individually or in the aggregate
would have a material adverse effect on RSI under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
the Code or any other applicable law.
(ii) Each RSI Benefit Plan has been administered in
accordance with its terms, except for any failures so to admin-
ister any RSI Benefit Plan that individually or in the ag-
gregate would not have a material adverse effect on RSI. RSI,
its subsidiaries and all the RSI Benefit Plans have been oper-
ated, 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
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failures to be in such compliance that individually or in the
aggregate would not have a material adverse effect on RSI.
Each RSI Benefit Plan that is intended to be qualified under
Section 401(a) or 401(k) of the Code has received a favorable
determination letter from the Internal Revenue Service ("IRS")
that it is so qualified and each trust established in connec-
tion with any RSI Benefit Plan that is intended to be exempt
from federal income taxation under Section 501(a) of the Code
has received a determination letter from the IRS that such
trust is so exempt. To the knowledge of RSI, no fact or event
has occurred since the date of any determination letter from
the IRS which is reasonably likely to affect adversely the
qualified status of any such RSI Benefit Plan or the exempt
status of any such trust.
(iii) Neither RSI nor any of its subsidiaries has in-
curred any unsatisfied liability under Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course). No RSI Benefit
Plan has incurred an "accumulated funding deficiency" (within
the meaning of Section 302 of ERISA or Section 412 of the Code)
whether or not waived. To the knowledge of RSI, there are not
any facts or circumstances that would materially change the
funded status of any RSI Benefit Plan that is a "defined ben-
efit" plan (as defined in Section 3(35) of ERISA) since the
date of the most recent actuarial report for such plan. Each
RSI Benefit Plan that is a "multiemployer plan" within the
meaning of Section 3(37) of ERISA is set forth on Section
3.1(j)(iii) of the RSI Disclosure Schedule.
(iv) With respect to each of the RSI Benefit Plans
(other than any multiemployer plan) that is subject to Title IV
of ERISA, the present value of accrued benefits under each such
plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such
plan's actuary with respect to such plan, did not, as of its
latest valuation date, exceed the then current value of the
aggregate assets of such plans allocable to such accrued bene-
fits in any material respect. With respect to any RSI Benefit
Plan that is a multiemployer plan, (A) neither RSI nor any of
its subsidiaries has any contingent liability under Section
4204 of ERISA, and no circumstances exist that present a mate-
rial risk that any such plan will go into reorganization, and
(B) the aggregate withdrawal liability of RSI and its subsid-
iaries, computed as if a complete withdrawal by RSI and any of
its subsidiaries had occurred under each such RSI Benefit Plan
on the date hereof, would not be material.
(v) No RSI Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former
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employees after retirement or other termination of service
(other than coverage mandated by applicable law or benefits,
the full cost of which is borne by the current or former em-
ployee) other than individual arrangements the amounts of which
are not material.
(vi) RSI has previously provided to JPFI a copy of
each collective bargaining or other labor union contract ap-
plicable to persons employed by RSI or any of its subsidiaries
to which RSI or any of its subsidiaries is a party. No collec-
tive bargaining agreement is being negotiated or renegotiated
by RSI or any of its subsidiaries. As of the date of this
Agreement, there is no labor dispute, strike or work stoppage
against RSI or any of its subsidiaries pending or, to the
knowledge of RSI, threatened which may interfere with the re-
spective business activities of RSI or any of its subsidiaries,
except where such dispute, strike or work stoppage individually
or in the aggregate would not have a material adverse effect on
RSI. As of the date of this Agreement, to the knowledge of
RSI, none of RSI, any of its subsidiaries or any of their re-
spective representatives or employees has committed any mate-
rial unfair labor practice in connection with the operation of
the respective businesses of RSI or any of its subsidiaries,
and there is no material charge or complaint against RSI or any
of its subsidiaries by the National Labor Relations Board or
any comparable governmental agency pending or threatened in
writing.
(vii) No employee of RSI will be entitled to any mate-
rial payment, additional benefits or any acceleration of the
time of payment or vesting of any benefits under any RSI Ben-
efit Plan as a result of the transactions contemplated by this
Agreement (either alone or in conjunction with any other event
such as a termination of employment), except that substantially
all RSI Employee Stock Options will vest as of the date on
which RSI Stockholder Approval is obtained.
(k) Taxes. (i) Each of RSI and its subsidiaries
has filed all material tax returns and reports required to be
filed by it (taking into account all applicable extensions) and
all such returns and reports are complete and correct in all
material respects, or requests for extensions to file such re-
turns or reports have been timely filed, granted and have not
expired, except to the extent that such failures to file, to be
complete or correct or to have extensions granted that remain
in effect individually or in the aggregate would not have a
material adverse effect on RSI. RSI and each of its subsidiar-
ies has paid (or RSI has paid or caused to be paid on its be-
half) all taxes (as defined herein) shown as due on such re-
turns, and the most recent financial statements contained in
-22-
the RSI Filed SEC Documents reflect an adequate reserve in ac-
cordance with GAAP for all taxes payable by RSI and its subsid-
iaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have, to the
knowledge of RSI, been proposed, asserted or assessed against
RSI or any of its subsidiaries that are not adequately reserved
for, except for deficiencies that individually or in the ag-
gregate would not have a material adverse effect on RSI. The
federal income tax returns of RSI and each of its subsidiaries
consolidated in such returns for tax years through 1993 (1992
in the case of U.S. Foodservice and its subsidiaries) have
closed by virtue of the applicable statute of limitations.
(iii) Neither RSI nor any of its subsidiaries has
taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Merger
from qualifying as a reorganization within the meaning of Sec-
tion 368(a) of the Code.
(iv) As used in this Agreement, "taxes" shall include
all (x) federal, state, local or foreign income, property,
sales, excise and other taxes or similar governmental charges,
including any interest, penalties or additions with respect
thereto, (y) liability for the payment of any amounts of the
type described in (x) as a result of being a member of an af-
filiated, consolidated, combined or unitary group, and (z) li-
ability for the payment of any amounts described in (x) or (y)
as a result of being party to any tax sharing agreement or as a
result of any express or implied obligation to indemnify any
other person with respect to the payment of any amounts of the
type described in clause (x) or (y).
(l) Voting Requirements. The affirmative vote at
the RSI Stockholders Meeting (the "RSI Stockholder Approval")
of the holders of a majority of all outstanding shares of RSI
Common Stock to adopt this Agreement is the only vote of the
holders of any class or series of RSI's capital stock necessary
to approve and adopt this Agreement and the transactions con-
templated hereby, including the Merger.
(m) State Takeover Statutes; Certain Provisions of
RSI Certificate. The Board of Directors of RSI has adopted a
resolution or resolutions approving this Agreement and the Op-
tion Agreements and the transactions contemplated hereby and
thereby and, assuming the accuracy of JPFI's representation and
warranty contained in Section 3.2(q), (a) such approval consti-
tutes approval of the Merger and the other transactions contem-
plated hereby and by the Option Agreements by the RSI Board of
-23-
Directors under (i) the provisions of Section 203 of the DGCL
such that Section 203 of the DGCL does not apply to this Agree-
ment, 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 re-
quired 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 ap-
proval 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 "memoran-
dum of understanding" contemplated by Article Twelfth) for pur-
poses 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 contem-
plated 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.
(n) Accounting Matters. To its knowledge, neither
RSI nor any of its affiliates (as such term is used in Section
5.10) has taken or agreed to take any action (including, with-
out limitation, in connection with any RSI Stock Plan or any
agreement thereunder) that would prevent the business combi-
nation 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" account-
ing.
(o) Brokers. No broker, investment banker, xxxxx-
cial advisor or other person other xxxx Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and Xxxxxxxxxxx
Xxxxxxx & Co., Inc. ("Xxxxxxxxxxx") , 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 commis-
sion in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of RSI.
RSI has furnished to JPFI true and complete copies of all
agreements under which any such fees or expenses are payable
and all indemnification and other agreements related to the
engagement of the persons to whom such fees are payable.
(p) Opinions of Financial Advisors. RSI has re-
ceived the opinions of Xxxxxxx Xxxxx and Xxxxxxxxxxx, each
dated the date of this Agreement, to the effect that, as of
such date, the Exchange Ratio for the conversion of RSI Common
Stock into JPFI Common Stock is fair from a financial point of
-24-
view to holders of shares of RSI Common Stock (other than JPFI
and its affiliates), signed copies of which opinions have been
delivered to JPFI, it being understood and agreed by JPFI that
such opinions are for the benefit of the Board of Directors of
RSI and may not be relied upon by JPFI, its affiliates or any
of their respective stockholders.
(q) Ownership of JPFI Common Stock. To the knowl-
edge of RSI, as of the date hereof (and before giving effect to
the JPFI Option Agreement, which will be entered into im-
mediately after the execution of this Agreement), neither RSI
nor, to its knowledge without independent investigation, any of
its affiliates, (i) beneficially owns (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, or (ii) is
party to any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of, in each
case, shares of capital stock of JPFI.
(r) Intellectual Property. RSI and its subsidiaries
own or have a valid license to use all trademarks, service
marks, trade names, patents and copyrights (including any reg-
istrations or applications for registration of any of the fore-
going) (collectively, the "RSI Intellectual Property") neces-
sary to carry on its business substantially as currently con-
ducted except for such RSI Intellectual Property the failure of
which to own or validly license individually or in the ag-
gregate would not have a material adverse effect on RSI. Nei-
ther RSI nor any such subsidiary has received any notice of in-
fringement of or conflict with, and, to RSI's knowledge, there
are no infringements of or conflicts (i) with the rights of
others with respect to the use of, or (ii) by others with re-
spect to, any RSI Intellectual Property that individually or in
the aggregate, in either such case, would have a material ad-
verse effect on RSI.
(s) Certain Contracts. Except as set forth in the
RSI Filed SEC Documents, neither RSI nor any of its subsidiar-
ies is a party to or bound by (i) any "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of
the SEC), (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material
respect the manner in which, or the localities in which, all or
any material portion of the business of RSI and its subsidiar-
ies (including, for purposes of this Section 3.1(s), JPFI and
its subsidiaries, assuming the Merger has taken place), taken
as a whole, is or would be conducted, (iii) any exclusive sup-
ply or purchase contracts or any exclusive requirements con-
tracts or (iv) any contract or other agreement which would pro-
hibit or materially delay the consummation of the Merger or any
-25-
of the transactions contemplated by this Agreement (all con-
tracts of the type described in clauses (i) and (ii) being re-
ferred to herein as "RSI Material Contracts"). RSI has deliv-
ered to JPFI, prior to the execution of this Agreement, com-
plete and correct copies of all RSI Material Contracts not
filed as exhibits to the RSI Filed SEC Documents. Each RSI
Material Contract is valid and binding on RSI (or, to the ex-
tent a RSI subsidiary is a party, such subsidiary) and is in
full force and effect, and RSI and each RSI subsidiary have in
all material respects performed all obligations required to be
performed by them to date under each RSI Material Contract,
except where such noncompliance, individually or in the ag-
gregate, would not have a material adverse effect on RSI. Nei-
ther RSI nor any RSI subsidiary knows of, or has received no-
xxxx of, any violation or default under (nor, to the knowledge
of RSI, does there exist any condition which with the passage
of time or the giving of notice or both would result in such a
violation or default under) any RSI Material Contract.
(t) RSI Rights Agreement. RSI has taken all action
(including, if required, redeeming all of the outstanding pre-
ferred stock purchase rights issued pursuant to the RSI Rights
Agreement or amending the RSI Rights Agreement) so that the
entering into of this Agreement, the RSI Option Agreement and
the Support Agreement, the Merger, the acquisition of shares
pursuant to the RSI Option Agreement and the other transactions
contemplated hereby and thereby do not and will not result in
the grant of any rights to any person under the RSI Rights
Agreement or enable or require the RSI Rights to be exercised,
distributed or triggered.
(u) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions,
causes of action, private environmental investigations or reme-
diation activities or governmental investigations of any nature
pending or threatened against RSI or any of its subsidiaries
seeking to impose, or that could reasonably be expected to re-
xxxx in the imposition of, on RSI or any of its subsidiaries,
any liability or obligation arising under common law or under
any local, state or federal environmental statute, regulation
or ordinance, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), which liability or obligation could rea-
sonably be expected to have a material adverse effect on RSI.
To the knowledge of RSI, there is no reasonable basis for any
such proceeding, claim, action or governmental investigation
that would impose any liability or obligation that could rea-
sonably be expected to have a material adverse effect on RSI.
-26-
SECTION 3.2. Representations and Warranties of JPFI
and Merger Sub. Except as disclosed in the Disclosure Schedule
delivered by JPFI and Merger Sub to RSI prior to the execution
of this Agreement (the "JPFI Disclosure Schedule") and making
reference to the particular subsection of this Agreement to
which exception is being taken, JPFI and Merger Sub jointly and
severally represent and warrant to RSI as follows:
(a) Organization, Standing and Corporate Power. (i)
Each of JPFI and its subsidiaries is a corporation or other le-
gal entity duly organized, validly existing and in good stand-
ing (with respect to jurisdictions which recognize such con-
cept) under the laws of the jurisdiction in which it is orga-
nized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now be-
ing conducted, except, as to subsidiaries, for those jurisdic-
tions where the failure to be so organized, existing or in good
standing individually or in the aggregate would not have a ma-
terial adverse effect on JPFI. Each of JPFI and its subsidiar-
ies is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions which recognize such
concept) in each jurisdiction in which the nature of its busi-
ness or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, except for
those jurisdictions where the failure to be so qualified or
licensed or to be in good standing individually or in the ag-
gregate would not have a material adverse effect on JPFI.
(ii) JPFI has delivered to RSI prior to the execution
of this Agreement complete and correct copies of any amendments
to its certificate of incorporation (the "JPFI Certificate")
and by-laws not filed as of the date hereof with the JPFI Filed
SEC Documents (as defined in Section 3.2(g)).
(iii) In all material respects, the minute books of
JPFI and its subsidiaries contain accurate records of all meet-
ings and accurately reflect all other actions taken by the
stockholders, the Board of Directors and all committees of the
Board of Directors of JPFI (or, as the case may be, each of its
subsidiaries) since January 1, 1995.
(b) Subsidiaries. Exhibit 21 to JPFI's Annual Re-
port on Form 10-K for the fiscal year ended June 29, 1996 in-
cludes all the subsidiaries of JPFI which as of the date of
this Agreement are Significant Subsidiaries. All the outstand-
ing 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 in-
directly by JPFI, free and clear of all Liens and free of any
other restriction (including any restriction on the right to
-27-
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 is-
sued and outstanding (including shares of restricted JPFI Com-
mon 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 Com-
mon Stock were reserved for issuance pursuant to all stock op-
tion, restricted stock or other stock-based compensation, ben-
efits or savings plans, agreements or arrangements in which
current or former employees or directors of JPFI or its subsid-
iaries 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 (col-
lectively, "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 au-
thorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth in this Sec-
tion 3.2(c), and except for changes since June 24, 1997 re-
sulting from the issuance of shares of JPFI Common Stock pur-
suant to the JPFI Employee Stock Options or as expressly per-
mitted 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 exer-
cisable for shares of capital stock or voting securities of
JPFI, (C) any warrants, calls, options or other rights to ac-
quire 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
-28-
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 outstand-
ing (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 agree-
ment restricting the purchase or transfer of, relating to the
voting of, requiring registration of, or granting any preemp-
tive or, except as provided by the terms of the JPFI Employee
Stock Options, antidilutive rights with respect to, any securi-
ties 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 ma-
terial to JPFI and its subsidiaries as a whole.
(d) Authority; Noncontravention. Each of JPFI and
Merger Sub has all requisite corporate power and authority to
enter into this Agreement, and JPFI has all requisite corporate
power and authority to enter into the Option Agreements and the
Support Agreement and, subject to the JPFI Stockholder Approval
(as defined in Section 3.2(l)), to consummate the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement by each of JPFI and Merger Sub, and the execu-
tion 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,
-29-
execution and delivery thereof by RSI, constitute (or will con-
stitute, as the case may be) the legal, valid and binding obli-
gation of JPFI (and, in the case of this Agreement, Merger
Sub), enforceable against JPFI (and, in the case of this Agree-
ment, Merger Sub) in accordance with their terms. The execu-
tion and delivery of this Agreement does not, and the execution
and delivery of the Option Agreements and the consummation of
the transactions contemplated hereby and thereby and compliance
with the provisions of this Agreement, the Support Agreement
and the Option Agreements will not, conflict with, or result in
any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termina-
tion, cancellation or acceleration of any obligation or loss of
a benefit under, or result in the creation of any Lien upon any
of the properties or assets of JPFI or any of its subsidiaries
or (assuming the consummation of the transactions contemplated
hereby without giving effect to Section 1.7) in any restriction
on the conduct of JPFI's business or operations under, (i) the
JPFI Certificate or the by-laws of JPFI or the comparable orga-
nizational documents of any of its subsidiaries, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, trust
document, lease or other agreement, instrument, permit, conces-
sion, 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 judg-
ment, order, decree, statute, law, ordinance, rule or regula-
tion applicable to JPFI or any of its subsidiaries or their
respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, de-
faults, rights, losses, restrictions or Liens that individually
or in the aggregate would not (x) have a material adverse ef-
fect on JPFI or (y) reasonably be expected to impair the abil-
ity of JPFI or Merger Sub to perform its obligations under this
Agreement (and, in the case of JPFI individually, under the
Option Agreements and the Support Agreement). No consent, ap-
proval, 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 con-
nection with this Agreement and the Option Agreements and the
-30-
transactions contemplated hereby and thereby; (3) the filing of
the Certificate of Merger with the Secretary of State of Dela-
ware 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 con-
sents, 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) reason-
ably be expected to impair the ability of JPFI or Merger Sub to
perform its obligations under this Agreement.
(e) SEC Documents; Undisclosed Liabilities. JPFI
has filed all required registration statements, prospectuses,
reports, schedules, forms, statements and other documents (in-
cluding exhibits and all other information incorporated
therein) with the SEC since December 31, 1994 (the "JPFI SEC
Documents"). As of their respective dates, the JPFI SEC Docu-
ments complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder
applicable to such JPFI SEC Documents, and none of the JPFI SEC
Documents when filed contained any untrue statement of a mate-
rial fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The financial statements of JPFI in-
cluded in the JPFI SEC Documents comply as to form, as of their
respective dates of filing with the SEC, in all material re-
spects with applicable accounting requirements and the pub-
lished rules and regulations of the SEC with respect thereto,
have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (ex-
cept as may be indicated in the notes thereto) and fairly
present the consolidated financial position of JPFI and its
consolidated subsidiaries as of the dates thereof and the con-
solidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited state-
ments, to normal year-end audit adjustments). JPFI has not
treated as restructing charges any significant expenses that
JPFI would otherwise have expensed against operating income in
the ordinary course of business. Except (i) as reflected in
such financial statements or in the notes thereto or (ii) for
liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby or
-31-
thereby, neither JPFI nor any of its subsidiaries has any li-
abilities or obligations of any nature which, individually or
in the aggregate, would have a material adverse effect on JPFI.
(f) Information Supplied. None of the information
supplied or to be supplied by JPFI specifically for inclusion
or incorporation by reference in (i) the Form S-4 will, at the
time the Form S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or neces-
sary to make the statements therein not misleading or (ii) the
Joint Proxy Statement will, at the date it is first mailed to
JPFI's stockholders or at the time of the JPFI Stockholders
Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading.
The Form S-4 and the Joint Proxy Statement will comply as to
form in all material respects with the requirements of the Se-
curities Act and the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made
by JPFI with respect to statements made or incorporated by ref-
erence therein based on information supplied by RSI specifi-
cally for inclusion or incorporation by reference in the Form
S-4 or the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except
for liabilities incurred in connection with this Agreement, the
Option Agreements or the transactions contemplated hereby or
thereby, and except as permitted by Section 4.1(b), since June
29, 1996, JPFI and its subsidiaries have conducted their busi-
ness only in the ordinary course consistent with past practice
or as disclosed in any JPFI SEC Document filed since such date
and prior to the date hereof, and there has not been (i) any
material adverse change in JPFI, (ii) any declaration, setting
aside or payment of any dividend or other distribution (whether
in cash, stock or property) with respect to any of JPFI's capi-
tal stock, (iii) any split, combination or reclassification of
any of JPFI's capital stock or any issuance or the authoriza-
tion of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of JPFI's capital stock,
except for issuances of JPFI Common Stock upon exercise or con-
version of JPFI Employee Stock Options, in each case awarded
prior to the date hereof in accordance with their present terms
or issued pursuant to Section 4.1(b), (iv)(A) any granting by
JPFI or any of its subsidiaries to any current or former direc-
tor, executive officer or other key employee of JPFI or its
subsidiaries of any increase in compensation, bonus or other
benefits, except for normal increases as a result of promo-
tions, normal increases of base pay in the ordinary course of
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business or as was required under any employment agreements in
effect as of June 29, 1996, (B) any granting by JPFI or any of
its subsidiaries to any such current or former director, execu-
tive officer or key employee of any increase in severance or
termination pay, or (C) any entry by JPFI or any of its subsid-
iaries into, or any amendment of, any employment, deferred com-
pensation, consulting, severance, termination or indemnifica-
tion agreement with any such current or former director, execu-
tive officer or key employee, (v) except insofar as may have
been disclosed in JPFI SEC Documents filed and publicly avail-
able prior to the date of this Agreement (as amended to the
date hereof, the "JPFI Filed SEC Documents") or required by a
change in GAAP, any change in accounting methods, principles or
practices by JPFI materially affecting its assets, liabilities
or business, (vi) except insofar as may have been disclosed in
the JPFI Filed SEC Documents, any tax election that individu-
ally or in the aggregate would have a material adverse effect
on JPFI or any of its tax attributes or any settlement or com-
promise of any material income tax liability or (vii) any ac-
tion taken by JPFI or any of the JPFI subsidiaries during the
period from June 30, 1996 through the date of this Agreement
that, if taken during the period from the date of this Agree-
ment through the Effective Time, would constitute a breach of
Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation.
(i) JPFI, its subsidiaries and employees hold all permits, li-
censes, variances, exemptions, orders, registrations and ap-
provals of all Governmental Entities which are required for the
operation of the businesses of JPFI and its subsidiaries (the
"JPFI Permits") except where the failure to have any such JPFI
Permits individually or in the aggregate would not have a mate-
rial adverse effect on JPFI. JPFI and its subsidiaries are in
compliance with the terms of the JPFI Permits and all ap-
plicable statutes, laws, ordinances, rules and regulations,
except where the failure so to comply individually or in the
aggregate would not have a material adverse effect on JPFI. As
of the date of this Agreement, except as disclosed in the JPFI
Filed SEC Documents, no action, demand, requirement or investi-
gation by any Governmental Entity and no suit, action or pro-
ceeding by any person, in each case with respect to JPFI or any
of its subsidiaries or any of their respective properties, is
pending or, to the knowledge of JPFI, threatened, other than,
in each case, those the outcome of which individually or in the
aggregate would not (A) have a material adverse effect on JPFI
or (B) reasonably be expected to impair the ability of JPFI or
Merger Sub to perform its obligations under this Agreement or
the Option Agreements or prevent or materially delay the con-
summation of any of the transactions contemplated hereby or
thereby.
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(ii) Neither JPFI nor any JPFI subsidiary is subject
to any outstanding order, injunction or decree which has had
or, insofar as can be reasonably foreseen, individually or in
the aggregate will have, a material adverse effect on JPFI.
(i) Absence of Changes in Benefit Plans. JPFI has
delivered to RSI true and complete copies of (i) all severance
and employment agreements of JPFI with directors, executive of-
ficers or key employees, (ii) all severance programs and poli-
cies of each of JPFI and each JPFI subsidiary, and (iii) all
plans or arrangements of JPFI and each JPFI subsidiary relating
to its employees which contain change in control provisions, in
each case which has not been filed as an exhibit to the JPFI
Filed SEC Documents. Since June 29, 1996, there has not been
any adoption or amendment in any material respect by JPFI or
any of its subsidiaries of any collective bargaining agreement,
employment agreement, consulting agreement, severance agreement
or any material bonus, pension, profit sharing, deferred com-
pensation, incentive compensation, stock ownership, stock pur-
chase, stock option, phantom stock, retirement, vacation, sev-
erance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding providing benefits to
any current or former employee, officer or director of JPFI or
any of its wholly owned subsidiaries (collectively, the "JPFI
Benefit Plans"), or any material change in any actuarial or
other assumption used to calculate funding obligations with
respect to any JPFI pension plans, or any material change in
the manner in which contributions to any JPFI pension plans are
made or the basis on which such contributions are determined.
Since June 29, 1996, neither JPFI nor any JPFI subsidiary has
amended any JPFI Employee Stock Options or any JPFI Stock Plans
to accelerate the vesting of, or release restrictions on,
awards thereunder, or to provide for such acceleration in the
event of a change in control.
(j) ERISA Compliance. (i) With respect to the JPFI
Benefit Plans, no event has occurred and, to the knowledge of
JPFI, there exists no condition or set of circumstances, in
connection with which JPFI or any of its subsidiaries could be
subject to any liability that individually or in the aggregate
would have a material adverse effect on JPFI under ERISA, the
Code or any other applicable law.
(ii) Each JPFI Benefit Plan has been administered in
accordance with its terms, except for any failures so to admin-
ister any JPFI Benefit Plan that individually or in the ag-
gregate would not have a material adverse effect on JPFI.
JPFI, its subsidiaries and all the JPFI Benefit Plans have been
operated, and are, in compliance with the applicable provisions
of ERISA, the Code and all other applicable laws and the terms
-34-
of all applicable collective bargaining agreements, except for
any failures to be in such compliance that individually or in
the aggregate would not have a material adverse effect on JPFI.
Each JPFI Benefit Plan that is intended to be qualified under
Section 401(a) or 401(k) of the Code has received a favorable
determination letter from the IRS that it is so qualified and
each trust established in connection with any JPFI Benefit Plan
that is intended to be exempt from federal income taxation un-
der Section 501(a) of the Code has received a determination
letter from the IRS that such trust is so exempt. To the
knowledge of JPFI, no fact or event has occurred since the date
of any determination letter from the IRS which is reasonably
likely to affect adversely the qualified status of any such
JPFI Benefit Plan or the exempt status of any such trust.
(iii) Neither JPFI nor any of its subsidiaries has in-
curred any unsatisfied liability under Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course). No JPFI Benefit
Plan has incurred an "accumulated funding deficiency" (within
the meaning of Section 302 of ERISA or Section 412 of the Code)
whether or not waived. To the knowledge of JPFI, there are not
any facts or circumstances that would materially change the
funded status of any JPFI Benefit Plan that is a "defined ben-
efit" plan (as defined in Section 3(35) of ERISA) since the
date of the most recent actuarial report for such plan.
(iv) With respect to each of the JPFI Benefit Plans
(other than any multiemployer plan) that is subject to Title IV
of ERISA, the present value of accrued benefits under each such
plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such
plan's actuary with respect to such plan, did not, as of its
latest valuation date, exceed the then current value of the
aggregate assets of such plans allocable to such accrued bene-
fits in any material respect. With respect to any JPFI Benefit
Plan that is a multiemployer plan, (A) neither JPFI nor any of
its subsidiaries has any contingent liability under Section
4204 of ERISA, and no circumstances exist that present a mate-
rial risk that any such plan will go into reorganization, and
(B) the aggregate withdrawal liability of JPFI and its subsid-
iaries, 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.
(v) No JPFI Benefit Plan provides medical benefits
(whether or not insured), with respect to current or former
employees after retirement or other termination of service
(other than coverage mandated by applicable law or benefits,
-35-
the full cost of which is borne by the current or former em-
ployee) other than individual arrangements the amounts of which
are not material.
(vi) JPFI has previously provided to RSI a copy of
each collective bargaining or other labor union contract ap-
plicable to persons employed by JPFI or any of its subsidiaries
to which JPFI or any of its subsidiaries is a party. No col-
lective bargaining agreement is being negotiated or renegoti-
ated by JPFI or any of its subsidiaries. As of the date of
this Agreement, there is no labor dispute, strike or work stop-
page against JPFI or any of its subsidiaries pending or, to the
knowledge of JPFI, threatened which may interfere with the re-
spective business activities of JPFI or any of its subsidiar-
ies, except where such dispute, strike or work stoppage indi-
vidually or in the aggregate would not have a material adverse
effect on JPFI. As of the date of this Agreement, to the
knowledge of JPFI, none of JPFI, any of its subsidiaries or any
of their respective representatives or employees has committed
any material unfair labor practice in connection with the op-
eration of the respective businesses of JPFI or any of its sub-
sidiaries, and there is no material charge or complaint against
JPFI or any of its subsidiaries by the National Labor Relations
Board or any comparable governmental agency pending or threat-
ened in writing.
(vii) No employee of JPFI will be entitled to any ma-
terial payment, additional benefits or any acceleration of the
time of payment or vesting of any benefits under any JPFI Ben-
efit Plan as a result of the transactions contemplated by this
Agreement (either alone or in conjunction with any other event
such as a termination of employment).
(k) Taxes. (i) Each of JPFI and its subsidiaries
has filed all material tax returns and reports required to be
filed by it (taking into account applicable extensions) and all
such returns and reports are complete and correct in all mate-
rial respects, or requests for extensions to file such returns
or reports have been timely filed, granted and have not ex-
pired, except to the extent that such failures to file, to be
complete or correct or to have extensions granted that remain
in effect individually or in the aggregate would not have a
material adverse effect on JPFI. JPFI and each of its subsid-
iaries has paid (or JPFI has paid or caused to be paid on its
behalf) all taxes shown as due on such returns, and the most
recent financial statements contained in the JPFI Filed SEC
Documents reflect an adequate reserve in accordance with GAAP
for all taxes payable by JPFI and its subsidiaries for all tax-
able periods and portions thereof accrued through the date of
such financial statements.
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(ii) No deficiencies for any taxes have, to the
knowledge of JPFI, been proposed, asserted or assessed against
JPFI or any of its subsidiaries that are not adequately re-
served for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on JPFI.
None of the federal income tax returns of JPFI and each of its
subsidiaries consolidated in such returns have closed by virtue
of the applicable statute of limitations.
(iii) Neither JPFI nor any of its subsidiaries has
taken any action or knows of any fact, agreement, plan or other
circumstance that is reasonably likely to prevent the Merger
from qualifying as a reorganization within the meaning of Sec-
tion 368(a) of the Code.
(l) Voting Requirements. The affirmative vote at
the JPFI Stockholders Meeting (the "JPFI Stockholder Approval")
of the holders of a majority of shares of JPFI Common Stock
present in person or by proxy at a duly convened and held meet-
ing 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 Com-
mon Stock pursuant to the Merger.
(m) State Takeover Statutes; Certificate of Incorpo-
ration. 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 Sec-
tion 3.1(q), such approval constitutes approval of the Merger
and the other transactions contemplated hereby and thereby by
the JPFI Board of Directors under the provisions of Section 203
of the DGCL such that Section 203 does not apply to this Agree-
ment, the Option Agreements, the Support Agreement or the
transactions contemplated hereby and thereby. To the knowledge
of JPFI, no state takeover statute other than Section 203 of
the DGCL (which has been rendered inapplicable) is applicable
to the Merger or the other transactions contemplated hereby.
(n) Accounting Matters. To its knowledge, neither
JPFI nor any of its affiliates (as such term is used in Section
5.10) has taken or agreed to take any action (including, with-
out limitation, in connection with any JPFI Stock Plan or any
agreement thereunder) that would prevent the business combina-
tion 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" account-
ing.
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(o) Brokers. No broker, investment banker, xxxxx-
cial advisor or other person, other than Xxxxxxx Sachs & Co.
("Goldman"), Xxxxx Xxxxxx Inc. ("Xxxxx Xxxxxx") 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 transac-
tions contemplated by this Agreement based upon arrangements
made by or on behalf of JPFI. JPFI has furnished to RSI true
and complete copies of all agreements under which any such fees
or expenses are payable and all indemnification and other
agreements related to the engagement of the persons to whom
such fees are payable.
(p) Opinions of Financial Advisors. JPFI has re-
ceived the opinions of Goldman and Xxxxx Xxxxxx, each dated the
date of this Agreement, each to the effect that, as of such
date, the Exchange Ratio for the conversion of RSI Common Stock
into JPFI Common Stock is fair from a financial point of view
to JPFI, signed copies of which opinions have been delivered to
RSI, it being understood and agreed by RSI that such opinions
are for the benefit of the Board of Directors of JPFI and may
not be relied upon by RSI, its affiliates or any of their re-
spective stockholders.
(q) Ownership of RSI Common Stock. To the knowledge
of JPFI, as of the date hereof or at any time within twelve
months prior to the date of this Agreement (and before giving
effect to the RSI Option Agreement, which will be entered into
immediately after the execution of this Agreement) neither JPFI
nor, to its knowledge without independent investigation, any of
its affiliates, (i) beneficially owns (as defined in either
Rule 13d-3 under the Exchange Act or in Article Fourteenth of
the RSI Certificate of Incorporation) or owned, directly or in-
directly, or (ii) is or was party to any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of, in each case, shares of capital stock of RSI.
(r) Intellectual Property. JPFI and its subsidiar-
ies own or have a valid license to use all trademarks, service
marks, trade names, patents and copyrights (including any reg-
istrations or applications for registration of any of the fore-
going) (collectively, the "JPFI Intellectual Property") neces-
sary to carry on its business substantially as currently con-
ducted, except for such JPFI Intellectual Property the failure
of which to own or validly license individually or in the ag-
gregate would not have a material adverse effect on JPFI. Nei-
ther JPFI nor any such subsidiary has received any notice of
infringement of or conflict with, and, to JPFI's knowledge,
there are no infringements of or conflicts (i) with the rights
of others with respect to the use of, or (ii) by others with
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respect to, any JPFI Intellectual Property that individually or
in the aggregate, in either such case, would have a material
adverse effect on JPFI.
(s) Certain Contracts. Except as set forth in the
JPFI Filed SEC Documents, neither JPFI nor any of its subsid-
iaries is a party to or bound by (i) any "material contract"
(as such term is defined in item 601(b)(10) of Regulation S-K
of the SEC), (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material
respect the manner in which, or the localities in which, all or
any material portion of the business of JPFI and its subsidiar-
ies (including RSI and its subsidiaries, assuming the Merger
had taken place), taken as a whole, is or would be conducted,
(iii) any exclusive supply or purchase contracts or any exclu-
sive requirements contracts or (iv) any contract or other
agreement which would prohibit or materially delay the consum-
mation of the Merger or any of the transactions contemplated by
this Agreement (all contracts of the type described in clauses
(i) and (ii) being referred to herein as "JPFI Material Con-
tracts"). JPFI has delivered to RSI, prior to the execution of
this Agreement, complete and correct copies of all JPFI Mate-
rial Contracts not filed as exhibits to the JPFI Filed SEC
Documents. Each JPFI Material Contract is valid and binding on
JPFI (or, to the extent a JPFI subsidiary is a party, such sub-
sidiary) and is in full force and effect, and JPFI and each
JPFI subsidiary have in all material respects performed all
obligations required to be performed by them to date under each
JPFI Material Contract, except where such noncompliance, indi-
vidually or in the aggregate, would not have a material adverse
effect on JPFI. Neither JPFI nor any JPFI subsidiary knows of,
or has received notice of, any violation or default under (nor,
to the knowledge of JPFI, does there exist any condition which
with the passage of time or the giving of notice or both would
result in such a violation or default under) any JPFI Material
Contract.
(t) JPFI Rights Agreement. JPFI has taken all ac-
tion (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.
-39-
(u) Environmental Liability. There are no legal,
administrative, arbitral or other proceedings, claims, actions,
causes of action, private environmental investigations or reme-
diation activities or governmental investigations of any nature
pending or threatened against JPFI or any of its subsidiaries
seeking to impose, or that could reasonably be expected to re-
xxxx in the imposition, on JPFI or any of its subsidiaries, of
any liability or obligation arising under common law or under
any local, state or federal environmental statute, regulation
or ordinance, including, without limitation, CERCLA, which li-
ability or obligation could reasonably be expected to have a
material adverse effect on JPFI. To the knowledge of JPFI,
there is no reasonable basis for any such proceeding, claim,
action or governmental investigation that would impose any li-
ability or obligation that could reasonably be expected to have
a material adverse effect on JPFI.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business. (a) Conduct of
Business by RSI. Except as set forth in Section 4.1(a) of the
RSI Disclosure Schedule, as otherwise expressly contemplated by
this Agreement or as consented to by JPFI in writing, such con-
sent not to be unreasonably withheld or delayed, during the
period from the date of this Agreement to the Effective Time,
RSI shall, and shall cause its subsidiaries to, carry on their
respective businesses in the ordinary course consistent with
past practice and in compliance in all material respects with
all applicable laws and regulations and, to the extent consis-
tent therewith, use all reasonable efforts to preserve intact
their current business organizations, use reasonable efforts to
keep available the services of their current officers and other
key employees and preserve their relationships with those per-
sons having business dealings with them to the end that their
goodwill and ongoing businesses shall be unimpaired at the Ef-
fective 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
-40-
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 issu-
ance 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 is-
sued pursuant to Section 4.1(a)(ii) or (z) purchase, re-
deem 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 cash-
less exercise of RSI Employee Stock Options outstanding on
the date hereof, or in connection with withholding obliga-
tions 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 con-
vertible into, or any rights, warrants or options to ac-
quire, 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 Op-
tions 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 250,000 shares of RSI Common Stock in the
aggregate);
(iii) amend its certificate of incorporation, by-
laws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, any business or
any person, or, except for transactions in the ordinary
course of business consistent with past practice pursuant
to contracts or agreements in force at the date of this
Agreement or pursuant to RSI's current capital and op-
erating budgets (in each case, as previously provided to
JPFI), make any material investment either by purchase of
-41-
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 securitiza-
tions), other than in the ordinary course of business con-
sistent with past practice;
(vi) take any action that would cause the repre-
sentations and warranties set forth in Section 3.1(g) and
qualified as to materiality to be no longer true and cor-
rect or, if not so qualified, to be no longer true and
correct in all material respects;
(vii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or en-
xxxxx, 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 re-
ceivables 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 pro-
ceeding involving money damages, except in the ordinary
course of business consistent with past practice;
(ix) enter into or terminate any material con-
tract or agreement, or make any change in any of its mate-
rial leases or contracts, other than amendments or renew-
als 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 as set
forth in Section 4.1(b) of the JPFI Disclosure Schedule, as
otherwise expressly contemplated by this Agreement or as con-
sented to by RSI in writing, such consent not to be unreason-
ably withheld or delayed, during the period from the date of
this Agreement to the Effective Time, JPFI shall, and shall
cause its subsidiaries to, carry on their respective businesses
-42-
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 busi-
ness organizations, use reasonable efforts to keep available
the services of their current officers and other key employees
and preserve their relationships with those persons having bus-
iness dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Time.
Without limiting the generality of the foregoing (but subject
to the above exceptions), during the period from the date of
this Agreement to the Effective Time, JPFI shall not, and shall
not permit any of its subsidiaries to:
(i) other than dividends and distributions by a
direct or indirect wholly owned subsidiary of JPFI to its
parent, or by a subsidiary that is partially owned by JPFI
or any of its subsidiaries, provided that JPFI or any such
subsidiary receives or is to receive its proportionate
share thereof, (x) declare, set aside or pay any dividends
on, make any other distributions in respect of, or enter
into any agreement with respect to the voting of, any of
its capital stock, (y) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in sub-
stitution for shares of its capital stock, except for is-
suances 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 capi-
tal 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 Op-
tions, or in connection with withholding obligations re-
lating 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 con-
vertible into, or any rights, warrants or options to ac-
quire, any such shares, voting securities or convertible
securities (other than the issuance of JPFI Common Stock
upon the exercise of JPFI Employee Stock Options outstand-
ing 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
-43-
business consistent with past practice for employees (so
long as such additional amount of JPFI Common Stock sub-
ject 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 oper-
ating 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 securitiza-
tions), other than in the ordinary course of business con-
sistent with past practice;
(vi) take any action that would cause the repre-
sentations and warranties set forth in Section 3.2(g) and
qualified as to materiality to be no longer be true and
correct or or, if not so qualified, to be no longer true
and correct in all material respects;
(vii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or en-
xxxxx, 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 re-
ceivables 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 in-
volving money damages, except in the ordinary course of
business consistent with past practice;
-44-
(ix) enter into or terminate any material con-
tract or agreement, or make any change in any of its mate-
rial leases or contracts, other than amendments or renew-
als 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 respec-
tive 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 sat-
isfied.
(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 repre-
sentation 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 mate-
rial respect any covenant, condition or agreement to be com-
plied 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 au-
thorize any individual, corporation or other entity to solicit
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or encourage (including by way of furnishing information), from
any third party any inquiries or proposals relating to, or con-
duct negotiations or discussions with any third party with re-
spect 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 relat-
ing to the disposition of its business or assets, or the acqui-
sition 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 prospec-
tus. 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
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and comment thereon. JPFI will advise RSI, promptly after it
receives notice thereof, of the time when the Form S-4 has be-
come effective or any supplement or amendment has been filed,
the issuance of any stop order, the suspension of the qualifi-
cation 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 mis-
leading, 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 stock-
holders (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 stock-
holders (the "JPFI Stockholders Meeting") in accordance with
the DGCL for the purpose of obtaining the JPFI Stockholder Ap-
proval 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
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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 indepen-
dent public accountants in connection with registration state-
ments similar to the Form S-4.
(b) RSI shall use best efforts to cause to be deliv-
ered 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 pool-
ing 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 indepen-
dent public accountants in connection with registration state-
ments similar to the Form S-4.
(b) JPFI shall use best efforts to cause to be de-
livered 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 Prin-
ciples Board and applicable SEC rules and regulations is ap-
propriate if the Merger is closed and consummated as contem-
plated 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 respec-
tive subsidiaries to, afford to the other party and to the of-
ficers, 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, con-
tracts, commitments, personnel and records (provided that such
access shall not interfere with the business or operations of
-48-
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, fi-
nancial 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 as-
sist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effec-
tive, in the most expeditious manner practicable, the Merger
and the other transactions contemplated by this Agreement, in-
cluding (i) the obtaining of all necessary actions or nonac-
tions, waivers, consents and approvals from Governmental Enti-
ties 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 neces-
sary consents, approvals or waivers, and any necessary or ap-
propriate 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 Agree-
ment, including seeking to have any stay or temporary restrain-
ing 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 Op-
tion Agreements, the Support Agreement or any of the transac-
tions contemplated hereby and thereby and (ii) if any state
takeover statute or similar statute or regulation becomes ap-
plicable to such agreements or transactions, take all action
necessary to ensure that such transactions may be consummated
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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 contem-
plated 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 em-
ployee benefit plans, programs and arrangements, including, but
not limited to, executive and incentive compensation, stock
option and supplemental executive retirement plans, for employ-
ees and directors of the Surviving Corporation and its subsid-
iaries from and after the Effective Time. Nothing in this Sec-
tion 5.6 shall be interpreted as preventing the Surviving Cor-
poration 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 in-
dividual, 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 indi-
cated on Section 5.6(b) of the RSI Disclosure Schedule to be
taken by it at or prior to the time specified therein, includ-
ing the execution, at the Effective Time, of an employment
agreement with Xxxx Xxx Xxxxxxxxxxxx in the form attached to
this Agreement as Exhibit G.
SECTION 5.7. Indemnification, Exculpation and Insur-
ance. (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
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USF Acquisition Corporation on May 17, 1996) as provided in
their respective certificates of incorporation or by-laws (or
comparable organizational documents) and any indemnification
agreements of RSI or in Section 7.13 of the Agreement and Plan
of Merger dated February 2, 1996, among RSI, USF Acquisition
Corporation and US Foodservice. In addition, from and after
the Effective Time, directors and officers of RSI who become
directors or officers of JPFI will be entitled to the same in-
demnity rights and protections, and directors' and officers'
liability insurance, as are afforded from time to time to other
directors and officers of JPFI.
(b) In the event that JPFI or any of its successors
or assigns (i) consolidates with or merges into any other per-
son and is not the continuing or surviving corporation or en-
tity of such consolidation or merger or (ii) transfers or con-
veys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will
be made so that the successors and assigns of JPFI assume the
obligations set forth in this Section 5.7.
(c) JPFI shall use its best efforts to provide to
RSI's current directors and officers, for six years after the
Effective Time, liability insurance covering acts or omissions
occurring prior to the Effective Time with respect to those
persons who are currently covered by RSI's directors' and offi-
cers' 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 in-
tended to be for the benefit of, and will be enforceable by,
each indemnified party, his or her heirs and his or her repre-
sentatives and (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that
any such person may have by contract or otherwise.
SECTION 5.8. Fees and Expenses. All fees and ex-
penses 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).
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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 con-
templated by this Agreement, the Option Agreements and the Sup-
port 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 re-
quired by applicable law, court process or by obligations pur-
suant 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 practi-
cable 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 ef-
forts 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 pub-
lish 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 ef-
forts 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.
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SECTION 5.12. Tax Treatment. Each of JPFI and RSI
shall use best efforts to cause the Merger to qualify as a re-
organization 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 fil-
ings.
SECTION 5.13. Pooling of Interests. Each of RSI and
JPFI shall use best efforts to cause the transactions contem-
plated by this Agreement, including the Merger, to be accounted
for as a pooling of interests under Opinion 16 of the Account-
ing 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 instru-
ment, 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 obtain-
ing 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 re-
turns, questionnaires, applications or other documents regard-
ing any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp taxes, any transfer, re-
cording, registration and other fees or any similar taxes which
become payable in connection with the transactions contemplated
by this Agreement that are required or permitted to be filed on
or before the Effective Time.
SECTION 5.17. 8 7/8% Indenture. Merger Sub, as the
Surviving Corporation, agrees that it will comply with the pro-
visions of Section 11.1 of the Indenture, dated as of November
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1, 1993, between RSI, as issuer, and Norwest Bank Minnesota,
N.A., as trustee, as supplemented on May 1, 1996 (relating to a
mandatory tender to the holders of the 8-7/8% Senior Subordi-
nated 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 other-
wise required by a determination (as defined in Section 1313 of
the Code).
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation
to Effect the Merger. The respective obligation of each party
to effect the Merger is subject to the satisfaction or waiver
on or prior to the Closing Date of the following conditions:
(a) Stockholder Approvals. Each of the RSI Stock-
holder 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 mat-
ters 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
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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, or-
der, decree, statute, law, ordinance, rule or regulation, en-
tered, 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 Merg-
er, or (ii) which otherwise is reasonably likely to have a ma-
terial adverse effect on RSI or JPFI, as applicable; provided,
however, that each of the parties shall have used its best ef-
forts to prevent the entry of any such Restraints and to appeal
as promptly as possible any such Restraints that may be en-
tered.
(e) Form S-4. The Form S-4 shall have become effec-
tive 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 initi-
ated 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, Xxxxx & Xxxx, counsel to JPFI, and RSI shall
have received from Xxxxx, Day, Xxxxxx & Xxxxx, 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 re-
ceived) 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 ex-
change for shares of RSI Common Stock pursuant to the Merger
will include the holding period of the shares of RSI Common
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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 representa-
tions 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 re-
ceived 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 Opin-
ion 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 representa-
tions and warranties of RSI set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if
made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties
to be so true and correct (without giving effect to any limita-
tion as to "materiality" or "material adverse effect" set forth
therein) does not have, and is not likely to have, individually
or in the aggregate, a material adverse effect on RSI.
(b) Performance of Obligations of RSI. RSI shall
have performed in all material respects all obligations re-
quired to be performed by it under this Agreement at or prior
to the Closing Date.
(c) No Material Adverse Change. At any time after
the date of this Agreement there shall not have occurred any
material adverse change relating to RSI.
(d) RSI Rights Agreement. The RSI Rights issued
pursuant to the RSI Rights Agreement shall not have become non-
redeemable, 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:
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(a) Representations and Warranties. The representa-
tions and warranties of JPFI set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if
made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties
to be so true and correct (without giving effect to any limita-
tion as to "materiality," or "material adverse effect" set
forth therein) does not have, and is not likely to have, indi-
vidually 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 re-
quired to be performed by it under this Agreement at or prior
to the Closing Date.
(c) No Material Adverse Change. At any time after
the date of this Agreement there shall not have occurred any
material adverse change relating to JPFI.
(d) JPFI Rights Agreement. The JPFI Rights issued
pursuant to the JPFI Rights Agreement shall not have become
nonredeemable, exercisable, distributed or triggered pursuant
to the terms of such agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time, and (except
in the case of 7.1(e) or 7.1(f)) whether before or after 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 consum-
mated 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 fail-
ure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by
such time;
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(ii) if the RSI Stockholder Approval shall not
have been obtained at a RSI Stockholders Meeting duly con-
vened 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 Governmen-
tal Entity that must grant a Requisite Regulatory Approval
has denied approval of the Merger and such denial has be-
come final and nonappealable; provided, that the party
seeking to terminate this Agreement pursuant to this Sec-
tion 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, war-
ranty, covenant or other agreement contained herein), if RSI
shall have breached or failed to perform in any material re-
spect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a con-
dition 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, war-
ranty, covenant or other agreement contained herein), if JPFI
shall have breached or failed to perform in any material re-
spect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a con-
dition 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 writ-
ten notice thereof;
(e) by the Board of Directors of JPFI, at any time
prior to the RSI Stockholders Meeting, if the RSI Board of Di-
rectors 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
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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 con-
tained in this Agreement, neither JPFI nor RSI shall be re-
lieved 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 Stockhold-
ers 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 con-
tained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set
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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, war-
ranty, covenant or agreement of RSI contained herein) or Sec-
tion 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 nego-
tiation of this Agreement and the other matters contemplated
hereby, RSI shall, within one business day following such ter-
mination, pay JPFI a fee of $30,000,000 in immediately avail-
able funds.
(b) In the event of a termination of this Agreement
and the abandonment of the Merger at any time (i) by RSI pursu-
ant to Section 7.1(d) (other than for a nonwillful breach of a
representation, warranty, covenant or agreement of JPFI con-
tained herein) or Section 7.1(f) or (ii) by JPFI or RSI pursu-
ant 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 contem-
plated 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 War-
ranties. None of the representations and warranties in this
Agreement or in any instrument delivered pursuant to this
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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 per-
sonally, 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.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopy No: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(b) if to Rykoff, to
Xxxxxx-Xxxxxx, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx
Telecopy No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxxx, Esq.
SECTION 8.3. Definitions. For purposes of this
Agreement:
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(a) except for purposes of Section 5.10, an "affili-
ate" of any person means another person that directly or indi-
rectly, through one or more intermediaries, controls, is con-
trolled by, or is under common control with, such first person,
where "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse
effect" means, when used in connection with RSI or JPFI, any
change, effect, event, occurrence or state of facts that is or
could reasonably be expected to be materially adverse to the
business, financial condition or results of operations of such
party and its subsidiaries taken as a whole;
(c) "person" means an individual, corporation, part-
nership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity;
(d) a "subsidiary" of any person means another per-
son, 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 govern-
ing body (or, if there are no such voting interests, 50% or
more of the equity interests of which) is owned directly or
indirectly by such first person; and
(e) "knowledge" of any person which is not an indi-
vidual means the knowledge of such person's executive officers
or senior management of such person's operating divisions and
segments, in each case after reasonable inquiry.
SECTION 8.4. Interpretation. When a reference is
made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article or Section of, or an Exhibit
to, this Agreement unless otherwise indicated. Whenever the
words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation". The words "hereof", "herein" and "here-
under" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any par-
ticular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any cer-
tificate 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
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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 stat-
utes) by succession of comparable successor statutes and refer-
ences to all attachments thereto and instruments incorporated
therein. References to a person are also to its permitted suc-
cessors 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 effec-
tive 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 Ben-
eficiaries. This Agreement (including the documents and in-
struments referred to herein), the Option Agreements, the Sup-
port Agreement and the Confidentiality Agreements (a) consti-
tute 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 Agree-
ment 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 par-
ties 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 Dela-
ware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions contem-
plated 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
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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 pur-
poses only and shall not affect in any way the meaning or in-
terpretation 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 ben-
efits anticipated by the parties to this Agreement. Upon such
determination that any term or other provision is invalid, il-
legal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to ef-
fect the original intent of the parties as closely as possible
to the fullest extent permitted by applicable law in an accept-
able manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, JPFI and RSI have caused this
Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
JP FOODSERVICE, INC.
By /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
XXXXXX-XXXXXX, INC.
By /s/ Xxxx Xxx Xxxxxxxxxxxx
Name: Xxxx Xxx Xxxxxxxxxxxx
Title: Chairman and
Chief Executive Officer
XXXXXX ACQUISITION CORP.
By /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
[MERGER AGREEMENT]
