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EXHIBIT 1
MERGER AGREEMENT AND PLAN OF REORGANIZATION
UNDER SECTION 368(a) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION UNDER SECTION 368(a) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (the "Agreement"), dated January
22, 2001, by and among GUEST SUPPLY, INC., a New Jersey corporation (the
"Company"; the Company together with all of its Subsidiaries set forth on
Schedule 4.1(b)(i) are hereinafter collectively referred to as "Guest Supply"),
SYSCO CORPORATION, a Delaware corporation ("Sysco"); and SYSCO FOOD SERVICES OF
NEW JERSEY, INC., a Delaware corporation and a wholly-owned subsidiary of Sysco
("Merger Sub") (Sysco and Merger Sub are hereinafter collectively referred to as
the "Sysco Companies").
RECITALS
A. Guest Supply is in the following business ("Business"):
(i) manufacturing, packaging and distributing to the lodging industry,
nursing homes, cruise ships and others personal care guest amenities (which
include, among other items, shampoo, hair conditioners, soap, bath gel, and
mouthwash), housekeeping supplies, furnishings, room accessories and
textiles; and
(ii) manufacturing and packaging personal care products for consumer
products and retail companies.
B. The respective Boards of Directors of Sysco, Merger Sub and the Company
have each approved the acquisition of the Company by Sysco upon the terms and
the conditions set forth in this Agreement.
C. In furtherance of such acquisition, it is proposed that Merger Sub shall
make an exchange offer (the "Offer") to exchange shares of common stock, $1.00
par value ("Sysco Common Stock"), of Sysco for all of the issued and outstanding
shares of common stock, no par value ("Common Stock"), of the Company, including
the associated Company Rights (as defined in Section 4.5) (each share of the
Common Stock together with its associated Company Right, is hereinafter referred
to as a "Share" and collectively, as the "Shares") upon the terms and subject to
the conditions set forth in this Agreement.
D. Also in furtherance of such acquisition, the respective Boards of
Directors of Sysco, Merger Sub and the Company have each approved the merger of
Merger Sub with the Company ("Merger") upon the terms and subject to the
conditions set forth in this Agreement.
E. The respective Boards of Directors of Sysco, Merger Sub and the Company
have each determined that the Offer and the Merger and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals and are in the best interests of their respective
stockholders.
F. For federal income tax purposes, it is intended that the Offer and
Merger qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended ("Code"), and that this Agreement
constitutes a plan of reorganization.
G. Sysco, Merger Sub and the Company desire to make certain
representations, warranties, covenants, each to the other, and agreements in
connection with the Offer and the Merger and also to prescribe various
conditions to the Offer and the Merger and the other transactions contemplated
by this Agreement.
H. The agreements, certificates and other documents listed on Schedule I
hereto have been executed and delivered prior to, or simultaneously with, this
Agreement.
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NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:
ARTICLE 1
THE OFFER AND MERGER
1.1 The Offer; Merger Election. (a) Provided that this Agreement shall
not have been terminated in accordance with Section 7.1 and none of the events
set forth in Annex A hereto shall be existing (other than paragraphs (g), (i)
and (k) therein), Merger Sub shall, as promptly as practicable after the date
hereof, but in no event later than ten (10) business days after the date hereof,
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) the Offer. Each Share accepted by Merger
Sub in accordance with the Offer shall be exchanged for the right to receive
from Merger Sub the consideration determined in accordance with Section 1.2(A)
below (collectively, the "Offer Consideration)." The Offer shall be subject to
the condition that there be validly tendered and not withdrawn prior to the
expiration of the Offer such number of Shares which, when added to the Shares,
if any, beneficially owned by Sysco or Merger Sub, would constitute a majority
of the Shares outstanding on a fully diluted basis (the "Minimum Condition") and
to the other conditions set forth in Annex A hereto (any of which may be waived
in whole or in part by Merger Sub in its sole discretion except as otherwise
provided herein). Sysco and Merger Sub shall comply with the obligations
respecting prompt payment and announcement under the Exchange Act, and, without
limiting the generality of the foregoing, subject to the terms and conditions of
this Agreement, including but not limited to the conditions of the Offer, Merger
Sub shall, and Sysco shall cause Merger Sub to, accept for payment and pay for
Shares tendered pursuant to the Offer as soon as practicable after expiration
thereof. The obligations of Merger Sub to consummate the Offer and to accept for
payment and to pay for any Shares validly tendered on or prior to the expiration
of the Offer and not withdrawn shall be subject only to the conditions set forth
in Annex A hereto. Each of Sysco and Merger Sub expressly reserves the right to
waive the conditions of the Offer and to amend any of the terms and conditions
of the Offer; provided, that Merger Sub shall not without the prior written
consent of the Company (such consent to be authorized by the Board of Directors
of the Company (the "Company Board") or a duly authorized committee thereof) (i)
decrease the Offer Consideration, (ii) decrease the number of Shares sought,
(iii) change the form of consideration to be paid pursuant to the Offer as set
forth in Section 1.2 below, (iv) impose conditions to the Offer in addition to
those set forth in Annex A hereto, (v) amend any other term or condition of the
Offer in any manner adverse to the holders of the Shares, (vi) extend the
expiration date of the Offer, or (vii) waive the Minimum Condition or the
conditions set forth in subsection (f) or (h) of Annex A. Notwithstanding the
foregoing, Merger Sub may, without the consent of the Company, (A) extend the
Offer, if at the initial scheduled or any extended expiration date of the Offer
any of the conditions of the Offer shall not be satisfied or waived, until such
time as such conditions are satisfied or waived, (B) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
United States Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer, (C) extend the Offer for up to twenty (20)
business days if there have not been validly tendered and not withdrawn prior to
the expiration of the Offer such number of Shares that, together with Shares, if
any, beneficially owned by Sysco or Merger Sub, would constitute at least 90% of
the fully diluted Shares as of the date of determination, provided that all
other conditions to the Offer are satisfied or waived and (D) extend the Offer
for any reason for up to five (5) business days; provided, that no more than
three extensions in the aggregate shall be permitted under clauses (C) and (D)
of this sentence; provided, however, that notwithstanding the foregoing, unless
this Agreement has been terminated pursuant to Section 7.1 and, subject to
Section 1.1(c), Merger Sub shall extend the Offer from time to time in the event
that, at a then-scheduled expiration date, all of the conditions to the Offer
have not been satisfied or waived as permitted pursuant to this Agreement, each
such extension not to exceed the lesser of ten (10) additional business days or
such fewer number of days that Merger Sub reasonably believes is necessary to
permit the conditions to the Offer to be satisfied. In addition, the Offer
Consideration may be increased and the Offer may be extended to the extent
required by law, in each case without the consent of the Company.
Notwithstanding the foregoing or any other provision herein to the contrary, in
the event that the Minimum Condition has been satisfied and
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all other conditions set forth in Annex A have been satisfied or waived, then
Merger Sub shall, and Sysco shall cause Merger Sub to, accept for payment and
pay for all Shares tendered pursuant to the Offer and not withdrawn as soon as
practicable after the date that all such conditions have been satisfied or
waived, and nothing herein shall prohibit Merger Sub from making a subsequent
offer for Shares not so purchased upon the consummation of the Offer subject to
and in compliance with Rule 14d-11 of the Exchange Act (a "Subsequent Offer").
(b) As soon as practicable after the date of this Agreement, Sysco shall
prepare and file with the SEC a registration statement on Form S-4 under the
Securities Act of 1933, as amended (the "Securities Act"), to register the offer
and sale of Sysco Common Stock pursuant to the Offer and any Subsequent Offer
(the "Form S-4"). The Form S-4 will include a preliminary prospectus containing
the information required under Rule 14d-4(b) promulgated under the Exchange Act
(the "Preliminary Prospectus"). As soon as practicable on the date of
commencement of the Offer, Sysco and Merger Sub shall (i) file with the SEC a
Tender Offer Statement on Schedule TO with respect to the Offer and any
Subsequent Offer (the "Schedule TO") which will contain or incorporate by
reference all or part of the Preliminary Prospectus and form of the related
letter of transmittal (together with any supplements or amendments thereto,
collectively the "Offer Documents") and (ii) subject to the Company's compliance
with Section 1.3(c), cause the Offer Documents to be disseminated to holders of
Shares. Sysco, Merger Sub and the Company each agree promptly to correct any
information provided by it for use in the Form S-4 or the Offer Documents if and
to the extent that it shall have become false or misleading in any material
respect. Sysco and Merger Sub agree to take all steps necessary to cause the
Offer Documents as so corrected, and any other filings or documents, to be filed
with the SEC and to be disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Sysco further agrees
that it shall cause the Offer Documents, Form S-4, and any other documents filed
with the SEC, to comply in all material respects with the Exchange Act, and the
rules and regulations thereunder, and other applicable laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Schedule TO, the Form S-4 and the Offer Documents prior to its being filed with
the SEC. In addition, Sysco agrees to provide the Company and its counsel in
writing with any comments, whether written or oral, that Sysco or its counsel
may receive from time to time from the SEC or its staff with respect to the
Schedule TO, the Form S-4 and the Offer Documents promptly after the receipt of
such comments or other communications.
(c) If, on April 30, 2001 (the "Final Expiration Date"), Merger Sub has not
consummated the Offer in accordance with its terms, Merger Sub shall thereupon
terminate the Offer (in accordance with all applicable laws) without the
acceptance of any Shares previously tendered. If, at the Final Expiration Date,
the Minimum Condition has not been satisfied, Merger Sub shall, unless Sysco and
the Company otherwise agree, terminate the Offer, and the parties shall, subject
to the terms and conditions hereof in accordance with all applicable laws, use
all commercially reasonable efforts to consummate the Merger unless the
Agreement has been terminated pursuant to Section 7.1(h).
(d) In the event that this Agreement has been terminated pursuant to
Section 7.1, Merger Sub shall, and Sysco shall cause Merger Sub to, promptly
terminate the Offer (in accordance with all applicable laws) without accepting
any Shares for payment or exchange.
1.2(A) Offer Consideration. The consideration per Share due to each holder
of Common Stock (a "Stockholder") in connection with the Offer (and any
Subsequent Offer) is the "Offer Consideration" and shall be payable by Sysco in
the form of shares of Sysco Common Stock as provided in subsection (a) below.
(a) In connection with the Offer (and any Subsequent Offer), the
number of shares of Sysco Common Stock which each Stockholder is entitled
to receive, and which Sysco shall issue, for each Share owned by a
Stockholder shall be determined by dividing $26.00 by the Average Sysco
Offer Price (as defined in Section 1.2(A)(b) below).
(b) The "Average Sysco Offer Price" means the average of the closing
prices of the Sysco Common Stock as reported on the NYSE Composite
Reporting Tape (as reported in The Wall Street Journal, or, if not reported
therein, any other authoritative source) on the fifteen (15) trading days
ending on the date
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(the "Offer Determination Date") which is five (5) trading days immediately
preceding the expiration date of the Offer as it may from time to time be
extended in accordance with this Agreement; provided, however,
notwithstanding the foregoing, in the event that (x) such average is less
than $22.00, then the Average Sysco Offer Price shall be $22.00 and (y)
such average is more than $30.00, then the Average Sysco Offer Price shall
be $30.00.
(B) Merger Consideration Upon Termination of Offer. In the event that the
Offer has been terminated pursuant to Section 1.1(c) and the Agreement has not
been terminated pursuant to Section 7.1, the parties shall use all commercially
reasonable efforts to consummate the Merger in accordance with the terms of this
Agreement. The consideration per Share due to each Stockholder in connection
with the Merger is the "Merger Consideration" and shall be payable as set forth
in subsection (a) below. The Merger Consideration payable to the Stockholders in
connection with the Merger upon such termination of the Offer shall be payable
by Sysco in the form of shares of Sysco Common Stock.
(a) In the event that the Offer has been terminated pursuant to
Section 1.1(c), in connection with the Merger the number of shares of Sysco
Common Stock which each Stockholder is entitled to receive, and which Sysco
shall issue, for each Share owned by a Stockholder shall be determined by
dividing $26.00 by the Average Sysco Merger Price (as defined in Section
1.2(B)(b) below).
(b) The "Average Sysco Merger Price" means the average of the closing
prices of the Sysco Common Stock as reported on the NYSE Composite
Reporting Tape (as reported in The Wall Street Journal, or, if not reported
therein, any other authoritative source) on the fifteen (15) trading days
ending on the date (the "Merger Determination Date") which is five (5)
trading days immediately preceding the date of the Stockholders Meeting (as
defined in Section 1.12) for the Merger following a termination of the
Offer pursuant to Section 1.1(c); provided, however, notwithstanding the
foregoing, in the event that (x) such average is less than $22.00, then the
Average Sysco Merger Price shall be $22.00 and (y) such average is more
than $30.00, then the Average Sysco Merger Price shall be $30.00. The
Average Sysco Merger Price shall be used in determining Merger
Consideration payable in connection with the Merger following the
termination of the Offer pursuant to Section 1.1(c) and for no other
purpose.
(C) Merger Consideration Upon Consummation of Offer. In the event that
Merger Sub accepts for payment any Shares in the Offer, the parties shall
consummate the Merger in accordance with the terms of this Agreement and the
Merger Consideration payable to the Stockholders in connection with the Merger
shall be payable by Sysco in the same form and same amount as the Offer
Consideration and there shall be no calculation of the Average Sysco Merger
Price.
1.3 Company Actions.
(a) The Company hereby consents to the Offer and represents that the
Company Board, at a meeting duly called and held, has unanimously (i) determined
that this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, are advisable and are fair to and in the best interest of
the Stockholders, (ii) approved this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, (iii) taken all steps, or will take
all steps, at the proper time in connection with this Agreement, the
transactions contemplated hereby, the Offer and the Merger, necessary to comply
with any applicable state takeover law, including to ensure that the Offer and
the Merger, and the transactions contemplated hereby, do not constitute a
"takeover bid" under the New Jersey Shareholders Protection Act (NJSA 14A:10A-1
et seq.) and the New Jersey Corporation Takeover Bid Disclosure Law (NJSA 49:5-1
et seq.) (collectively, the "New Jersey Takeover Acts"), including, without
limitation, taking the steps contemplated by the proviso in Section 4.28 hereof,
(iv) taken all steps necessary to exempt the Offer (and any Subsequent Offer),
the Merger and this Agreement from the Rights Agreement (as defined in Section
4.5), and (v) resolved to recommend acceptance of the Offer (and any Subsequent
Offer) and approval and adoption of this Agreement and the Merger by the
Stockholders (the recommendations referred to in this clause (iv) are
collectively referred to in this Agreement as the "Company Recommendations").
(b) As soon as practicable on the date the Offer Documents are filed with
the SEC, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all
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amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-9") containing the Company Recommendations, subject to the
provisions of Section 7.1. At the time the Offer Documents are first mailed to
the Stockholders, the Company shall mail or cause to be mailed to the
Stockholders such Schedule 14D-9 together with such Offer Documents. The Company
further agrees that it shall cause the Schedule 14D-9 to comply in all material
respects with the Exchange Act, and the rules and regulations thereunder, and
other applicable laws. The Company further agrees to take all steps reasonably
necessary to cause the Schedule 14D-9 to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Each of the Company, on the one hand, and Sysco and Merger Sub, on the
other hand, agrees promptly to correct any information provided by it for use in
the Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. Sysco and its counsel
shall be given a reasonable opportunity to review the Schedule 14D-9 before it
is filed with the SEC. In addition, the Company agrees to provide Sysco, Merger
Sub and their counsel in writing with any comments, whether written or oral,
that the Company or its counsel may receive from time to time from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments or other communications.
(c) In connection with the Offer (and any Subsequent Offer) and the Merger,
the Company shall promptly furnish or cause to be furnished to Merger Sub
mailing labels, security position listings and any available listing or computer
file containing the names and addresses of the record holders of the Shares as
of a recent date, and shall furnish Merger Sub with such information and
assistance as Merger Sub or its agents may reasonably request in communicating
the Offer (and any Subsequent Offer) to the Stockholders. Except for such steps
as are necessary to disseminate the Offer Documents, Sysco and Merger Sub shall
hold in confidence the information contained in any of such labels and lists and
the additional information referred to in the preceding sentence, will use such
information only in connection with the Offer and the Merger, and, if this
Agreement is terminated, will upon request of the Company deliver or cause to be
delivered to the Company all copies of such information then in its possession
or the possession of its agents or representatives.
1.4 Directors.
(a) Subject to compliance with the New Jersey Business Corporation Act (the
"NJBCA"), the Company's Certificate of Incorporation and applicable law,
promptly upon the payment for Shares by Merger Sub which represent at least a
majority of the then outstanding shares of Common Stock pursuant to the Offer,
the Company shall, at the request of Sysco, promptly use its commercially
reasonable efforts to take all actions necessary to cause the Company Board to
include such number of directors designated by Sysco, rounded up to the next
whole number, as is equal to the product of the total number of directors on the
Company Board (giving effect to the directors designated by Sysco pursuant to
this sentence) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Merger Sub, Sysco and any of their affiliates (including
Shares so accepted for payment) bears to the total number of shares of Common
Stock then outstanding, including by accepting the resignations of such number
of its incumbent directors as is necessary to enable Sysco's designees to be
elected or appointed. At such times, the Company will cause individuals
designated by Sysco to constitute the same percentage (rounded up to the nearest
whole number) as such individuals represent on the Company Board of (A) each
committee of the Company Board and (B) each board of directors (and committee
thereof) of each Company Subsidiary in each case to the extent permitted by
applicable law or the rules or applicable listing agreement of any stock
exchange or over-the-counter market on which the Common Stock is listed or
traded. Notwithstanding the foregoing, until the Effective Time (as defined in
Section 1.7 hereof), the Company shall use its commercially reasonable efforts
to retain as members of the Company Board at least two directors that are
directors of the Company on the date hereof (the "Independent Directors"). The
Company's obligations under this Section 1.4(a) shall be subject to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company
shall promptly take all actions, and shall include in the Schedule 14D-9 all
information with respect to the Company and its officers and directors, required
pursuant to such Section 14(f) and Rule l4f-1 in order to fulfill its
obligations under this Section 1.4(a), including mailing to Stockholders the
information required by
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such Section 14(f) and Rule 14f-1 as is necessary to enable Sysco's designees to
be elected or appointed to the Company Board. Sysco or Merger Sub shall supply
the Company any information with respect to either of them and their nominees,
officers, directors and affiliates required by such Section 14(f) and Rule
14f-1. The provisions of this Section 1.4 are in addition to and shall not limit
any rights which Merger Sub, Sysco or any of their Affiliates may have as a
holder or beneficial owner of Shares as a matter of law with respect to the
election of directors or otherwise.
(b) In the event that Sysco's designees are elected or appointed to the
Company Board as aforesaid, until the Effective Time, the Company shall use its
commercially reasonable efforts to maintain as members of the Company Board at
least two directors who are Independent Directors, provided that, in such event,
if the number of Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director, if any, shall be entitled to
designate a person to fill such vacancy who shall be deemed to be an Independent
Director for purposes of this Agreement or, if no Independent Director then
remains, the other directors shall designate two persons to fill such vacancies
who shall not be stockholders, Affiliates or associates of Sysco or Merger Sub,
and each such person shall be deemed to be an Independent Director, for purposes
of this Agreement. Notwithstanding anything in this Agreement to the contrary,
in the event that Sysco's designees constitute a majority of the directors on
the Company Board (the effective date on which Sysco's designees constitute such
a majority shall be hereinafter referred to as the "Control Date"), the
affirmative vote of a majority of the Independent Directors shall be required
after the acceptance for payment of Shares pursuant to the Offer and prior to
the Effective Time, to (a) amend or terminate this Agreement by the Company, (b)
exercise or waive any of the Company's rights, benefits or remedies hereunder if
such exercise or waiver materially and adversely affects holders of Shares other
than Sysco or Merger Sub, (c) take action with respect to the retention of
counsel and other advisors in connection with the transactions contemplated
hereby or (d) take any other action under or in connection with this Agreement
if such action materially and adversely affects holders of Shares other than
Sysco or Merger Sub; provided, that if there shall be no such directors, such
actions may be effected by unanimous vote of the entire Company Board. The
Independent Directors shall have the right to retain, at the expense of the
Company, one separate firm of counsel and one investment banking firm to
represent them in connection with the transactions contemplated hereby.
1.5 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the relevant provisions of the Delaware
General Corporation Law ("DGCL") and the relevant provisions of the NJBCA,
Merger Sub shall be merged with and into the Company at the Effective Time (as
defined in Section 1.7). Following the Effective Time, the separate corporate
existence of Merger Sub shall cease and the Company shall be the surviving
corporation of the Merger ("Surviving Corporation") and shall succeed to and
assume all of the rights and obligations of Merger Sub and the Company in
accordance with the NJBCA.
1.6 Closing. The closing of the Merger ("Closing") will take place at
10:00 a.m., Eastern time, on a date to be specified by the parties ("Closing
Date"), which shall be no later than the tenth 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 the offices of
Torys, 000 Xxxx Xxxxxx, Xxx Xxxx, XX, or such other location as may be agreed to
by the parties hereto.
1.7 Effective Time. Subject to the provisions of this Agreement, as soon
as practicable on the Closing Date, the parties shall cause the Merger to be
consummated by filing certificates of merger or other appropriate documents (in
any such case, the "Certificates of Merger") executed in accordance with the
relevant provisions of the DGCL and the relevant provisions of the NJBCA and
shall make all other filings or recordings required under the DGCL and the
NJBCA. The Merger shall become effective at such time as the Certificates of
Merger are duly filed with, and declared effective by the Secretary of State of
Delaware and the Secretary of State of New Jersey, or at such subsequent date or
time as Sysco and the Company shall agree and specify in the Certificates of
Merger (the time the Merger becomes effective being hereinafter referred to as
the "Effective Time").
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1.8 Statutory Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL and Section 14A:10-6 of the NJBCA. The laws
which are to govern the Surviving Corporation are the laws of the State of New
Jersey.
1.9 Certificate of Incorporation and Bylaws. The Certificate of
Incorporation (as amended by the amendments, if any, set forth in the
Certificates of Merger) and Bylaws of the Company at the Effective Time shall be
the Certificate of Incorporation and Bylaws of the Surviving Corporation.
1.10 Directors and Officers. The directors and officers of Merger Sub
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and the Bylaws of the Surviving Corporation.
1.11 Subsequent Actions. If at any time after the Effective Time, the
Surviving Corporation will consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or Merger Sub, all such deeds, bills of
sale, instruments of conveyance, assignments and assurances and to take and do,
in the name and on behalf of each of such corporations or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
1.12 Stockholders Meeting.
(a) If (x) required by applicable law in order to consummate the Merger
following the payment for the Shares pursuant to the Offer, or (y) the Offer has
been terminated pursuant to Section 1.1(c), the Company, acting through the
Company Board, shall, in accordance with all applicable laws:
(i) duly call, give notice of, convene and hold a special meeting of
its Stockholders (the "Stockholders Meeting") as soon as practicable
following the acceptance for payment and purchase of Shares by Merger Sub
pursuant to the Offer for the purpose of considering and taking action upon
the approval of the Merger and the adoption of this Agreement;
(ii) (a) the Company shall prepare and file with the SEC a preliminary
proxy or information statement relating to the Merger and this Agreement
and shall obtain and furnish the information required to be included by the
SEC in the Proxy Statement (as hereinafter defined) and, after consultation
with Sysco, to respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any amendment or
supplement thereto (the "Proxy Statement"), to be mailed to its
Stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with Sysco and
its counsel and (b) Sysco shall prepare and file with the SEC any
amendments required to be filed, including a post-effective amendment, to
the S-4 (the "Post-Effective Amendment"). The Company will advise Sysco,
promptly after it receives notice thereof, of any request by the SEC for
the amendment of the Proxy Statement 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 the Company or
Sysco, or any of their respective affiliates, officers or directors, should
be discovered by the Company or Sysco which should be set forth in an
amendment or supplement to either of the Post-Effective Amendment or the
Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law,
disseminated to the Stockholders.
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(iii) include in the Proxy Statement the recommendation of the Company
Board that Stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement; and
(iv) use its commercially reasonable efforts to solicit from holders
of Shares proxies in favor of the Merger and shall take all other action
necessary or, in the reasonable opinion of Sysco, advisable to secure any
vote or consent of Stockholders required by the NJBCA to effect the Merger.
(b) Sysco agrees that it will provide the Company with the information
concerning Sysco and Merger Sub required to be included in the Proxy Statement
wand will vote, or cause to be voted, all of the Shares then owned by it, Merger
Sub or any of its other Merger Subsidiaries and Affiliates in favor of the
approval of the Merger and the adoption of this Agreement.
1.13 Merger Without Meeting of Stockholders. Notwithstanding Section 1.12
hereof, in the event that Sysco, Merger Sub or any other subsidiary of Sysco
shall acquire in the aggregate a number of the outstanding Shares, pursuant to
the Offer or otherwise, sufficient to enable Merger Sub or the Company to cause
the Merger to become effective under applicable law without a meeting of
Stockholders, the parties hereto shall, at the request of Sysco and subject to
Article VI hereof, take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after such acquisition, without a
meeting of Stockholders, in accordance with the NJBCA.
1.14 Terminated Offer. In the event the Offer is terminated pursuant to
Section 1.1(c), the parties hereto shall complete the Merger consistent with the
terms and conditions of this Agreement as amended by the terms and conditions
contained in Annex B in lieu of Article VI contained herein, and in such event,
upon such termination, this Agreement shall be deemed to be amended to
incorporate the terms and conditions contained therein without any further
action by Sysco, Merger Sub or the Company.
ARTICLE 2
OPTIONS; EXCHANGE OF CERTIFICATES
2.1 Stock Options. (a) At the Effective Time, each outstanding option to
purchase shares of Common Stock (a "Company Stock Option") issued pursuant to
any of the Company Stock Plans, whether vested or unvested, shall be assumed by
Sysco. Each Company Stock Option shall be deemed to constitute an option to
acquire, on the same terms and conditions as were applicable under such Company
Stock Option, (i) the same number of whole shares of Sysco Common Stock as the
holder of such Company Stock Option would have been entitled to receive pursuant
to the Merger had such holder exercised such option in full immediately prior to
the Effective Time, (ii) at a price per share (rounded up to the nearest whole
cent) equal to (A) the aggregate exercise price for the shares of Common Stock
otherwise purchasable pursuant to such Company Stock Option divided by (B) the
number of whole shares of Sysco Common Stock deemed purchasable pursuant to such
Company Stock Option; provided, however, that in the case of any Company Stock
Option to which Section 421 of the Code applies by reason of its qualification
under Section 422 of the Code ("incentive stock options"), the option price, the
number of shares purchasable pursuant to such Company Stock Option and the terms
and conditions of exercise of such Company Stock Option shall be determined in
order to comply with Section 424(a) of the Code. As used herein, the term,
"Company Stock Plan," shall mean and refer to (as the context requires) any of
the Company's: (i) 1983 Stock Option Plan, (ii) 1993 Stock Option Plan and (iii)
1996 Long Term Incentive Plan, and the term "Company Stock Plans," shall mean
and refer to all of such Plans collectively.
(b) As soon as practicable after the Effective Time, Sysco shall deliver to
the holders of Company Stock Options appropriate notices setting forth such
holders' rights with respect to such Company Stock Options pursuant to the
applicable Company Stock Plan and the certificates evidencing the grants of such
Company Stock Options shall continue in effect on the same terms and conditions
(subject to the adjustments required by Section 2.1(a) after giving effect to
the Merger and the assumption by Sysco as set forth above). Sysco shall comply
with the terms of the applicable Company Stock Plan and shall use its
commercially reasonable efforts to ensure, to the extent required by, and
subject to the provisions of, such Plan, that Company Stock
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Options which qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Sysco after the Effective
Time.
(c) Sysco shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Sysco Common Stock for delivery upon exercise
of Company Stock Options assumed by it in accordance with Section 2.1(a). As
soon as practicable, but in no event more than 20 days, after the Effective
Time, Sysco shall file a registration statement on Form S-8 (or any successor or
other appropriate form) with respect to the shares of Sysco Common Stock subject
to such Company Stock Options assumed by Sysco as aforesaid, and shall use its
commercially reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses referred to therein) for so long as
such Company Stock Options remain outstanding.
(d) The Company shall use its commercially reasonable efforts to cause all
individuals holding options under the Company's 1993 Stock Option Plan to waive
all of their respective rights under Section 5(k) of such plan effective from
and after the Control Date pursuant to a waiver agreement in form and substance
reasonably satisfactory to Sysco.
2.2 Fractional Shares. No fractional shares of Sysco Common Stock shall
be issued in the Merger or the Offer. If a fractional share results from the
calculations set forth in Section 1.2, a Stockholder shall receive an amount in
cash in lieu of such fractional share, equal to such fraction multiplied by the
Average Sysco Offer Price or, if the Offer has been terminated in accordance
with the terms and conditions of this Agreement, the Average Sysco Merger Price.
2.3 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of Sysco, Merger Sub, Guest Supply or
the Stockholders:
(a) Conversion of Common Stock. Each issued and outstanding share of
Common Stock shall be converted into solely the right to receive the Merger
Consideration paid in connection with the consummation of the Merger and,
each share of Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
Stockholder shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration.
(b) Cancellation of Treasury Stock. Each share of Common Stock held
in the treasury of the Company shall automatically be cancelled and
extinguished and no Merger Consideration shall be paid with respect
thereto.
(c) Merger Sub Common Stock. Each share of common stock, par value
$.001 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one share of newly issued Common
Stock and shall remain outstanding as a validly issued, fully paid and non-
assessable share of common stock of the Surviving Corporation.
(d) Sysco Common Stock. At and after the Effective Time, each share
of Sysco Common Stock issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding and shall not be
affected by the Merger.
2.4 Exchange of Certificates.
(a) Exchange Agent. As of the Effective Time, Sysco shall enter into an
agreement with Sysco's transfer agent or such other bank or trust company as may
be designated by Sysco and reasonably satisfactory to the Company (the "Exchange
Agent") which shall provide that Sysco shall deposit with the Exchange Agent as
of the Effective Time, for the benefit of the Stockholders, for exchange in
accordance with this Section 2.4 through the Exchange Agent, certificates
representing the shares of Sysco Common Stock to be issued as the Merger
Consideration (such shares of Sysco Common Stock, together with any dividends or
distributions with respect thereto with a record date after the Effective Time
or cash payable in lieu of any fractional shares of Sysco Common Stock are
collectively the "Exchange Fund").
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(b) Exchange Procedures.
(i) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each Stockholder (A) a letter of transmittal
("Letter of Transmittal") (which shall specify that delivery shall be
effected, and risk of loss of the Common Stock shall pass, only upon
delivery to the Exchange Agent of the certificates representing same
(collectively, the "Certificates"), and shall be in such form and have such
other provisions as Sysco and the Company may reasonably specify) and (B)
instructions for use in surrendering the Certificates in exchange for the
Merger Consideration.
(ii) Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with the Letter of Transmittal, duly executed, and such
other documents as may reasonably be required by the Exchange Agent, the
holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of Sysco
Common Stock which such holder has the right to receive pursuant to the
provisions of Section 1.2 and cash in lieu of any fractional share of Sysco
Common Stock in accordance with Section 2.2 and the Certificates so
surrendered shall forthwith be cancelled.
(iii) If a surrendered Certificate is not registered in the transfer
records of the Company under the name of the person surrendering such
Certificate, the Merger Consideration may be delivered to the surrendering
person only if such Certificate has been properly endorsed for transfer and
the surrendering person pays any applicable transfer or other Taxes.
(iv) Until surrendered as contemplated by this Section 2.4(b), 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.
(c) Distributions with Respect to Unexchanged Shares. With respect to any
unsurrendered Certificate, any interest, dividends or other distributions
otherwise payable to the holder therefor shall be included in the Exchange Fund,
in each case until the surrender of such Certificate in accordance with this
Section 2.4. Subject to the effect of applicable escheat or similar laws,
following surrender of any such Certificate there shall be paid to the holder of
the Certificate: (i) a certificate representing whole shares of Sysco Common
Stock issued in exchange therefor, (ii) the amount of dividends or other
distributions without interest, with a record date after the Effective Time
theretofore paid with respect to such whole shares of Sysco Common Stock, and
(iii) the amount of any cash payable in lieu of a fractional share of Sysco
Common Stock to which such holder is entitled.
(d) Further Ownership Rights in Common Stock. All shares of Sysco Common
Stock issued and cash paid upon the surrender for exchange of Certificates in
accordance with the terms of this Section 2.4 shall be deemed in full
satisfaction of all rights of the Stockholders pertaining to the shares of
Common Stock theretofore represented by such Certificates, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of any shares of Common Stock other than pursuant to Section 2.2(d).
If, after the Effective Time, Certificates are presented to Sysco, the Surviving
Corporation or the Exchange Agent for any reason, they shall be cancelled and
exchanged as provided in this Section 2.4, except as otherwise provided by law.
(e) 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 Sysco, upon demand, and any holders of
the Certificates who have not theretofore complied with this Section 2.4 shall
thereafter look only to Sysco for payment of their claim for Merger
Consideration.
(f) No Liability; Escheat. None of the Company, Sysco, the Surviving
Corporation or the Exchange Agent shall be liable to any person in respect of
any shares of Sysco Common Stock, any dividends or distributions with respect
thereto, any cash in lieu of fractional shares of Sysco Common Stock or any
other cash from the Exchange Fund, in each case delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
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(g) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Sysco, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Sysco.
(h) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
shall issue and pay to such person in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration.
2.5 Adjustment. If, between the date of this Agreement and the Effective
Time, as the case may be, (i) the outstanding shares of Common Stock or Sysco
Common Stock shall have been changed into a different number of shares or a
different class by reason of any classification, recapitalization, split-up,
combination, exchange of shares, or readjustment or a stock dividend thereon
shall be declared with a record date within such period, or (ii) the Company
shall have issued additional shares of Common Stock (other than upon the
exercise or conversion of stock options, warrants or other convertible
securities issued or granted prior to the date hereof) or Options or warrants to
purchase the same, or securities convertible into the same, the number of shares
of Sysco Common Stock issued as Offer Consideration or Merger Consideration, as
the case may be, shall be adjusted to accurately reflect such change (it being
acknowledged that the Company elsewhere herein covenants not to take any of the
actions described in (i) or (ii) above).
2.6 Shares of Sysco Common Stock. The shares of Sysco Common Stock
delivered as the Offer Consideration or Merger Consideration, as the case may
be, are hereinafter collectively referred to as the "Sysco Shares." The Sysco
Shares when issued to Stockholders shall be registered under the Securities Act
and shall contain no restrictions by Sysco or Merger Sub other than, as to
certain Affiliates, pursuant to Rules 144 and 145 of the Securities Act.
ARTICLE 3
OTHER COVENANTS AND AGREEMENTS
3.1 Employee Matters.
(a) Conditions of Employment. From and after the Control Date, the Company
will continue employment of the persons who are current employees of Guest
Supply immediately prior to the Control Date (the "Current Employees") on
substantially the same terms and conditions as such Current Employees are
employed by the Guest Supply (other than with respect to employee benefit
coverages) subject to the following conditions: (i) Sysco and Surviving
Corporation shall not, and shall not be obligated to, continue the employment of
those Current Employees who do not meet Sysco's then-current employment
standards; (ii) nothing contained herein shall preclude Sysco or Surviving
Corporation from revising conditions of employment after the Control Date or
effecting the termination of any Current Employees after the Control Date.
(b) Employee Benefits. With respect to employee benefits, nothing contained
in this Agreement shall prohibit Sysco from changing or eliminating the benefits
of Current Employees or employees of the Surviving Corporation or eliminating or
modifying benefits currently being made available by Guest Supply to its Current
Employees.
3.2 Consents. Promptly after execution of this Agreement, Guest Supply
will apply for or otherwise seek, and use its commercially reasonable efforts to
obtain, all consents and approvals required with respect to the Company for
consummation by the Company of the transactions contemplated hereby, including
without limitation, those consents listed in Schedule 4.4. Any charges imposed
by any parties for such consents and estoppels shall be paid solely by Guest
Supply prior to the Closing.
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3.3 Business Information.
(a) Access to Books, Records, and Employees. Upon reasonable prior notice,
Guest Supply, its employees, agents and representatives shall provide Sysco, its
employees, agents, counsel, accountants and financial consultants full access
during normal business hours, and, with Guest Supply's prior approval, after
normal business hours, to the offices, properties, books, records, files and
other documents and information of or relating to the Business as Sysco, its
employees, agents, counsel, accountants or financial consultants may request,
provided that such shall not unduly interfere with Guest Supply's business
operations. Guest Supply shall allow Sysco, its employees, agents, counsel,
accountants and financial consultants, access to a work area within such
business office and shall allow the copying, at Sysco's expense, of any such
records as requested by such party.
(b) Inspection of the Real Property. Subject to the requirements of Guest
Supply's leases and other contracts, including without limitation prior notice
to or permission from such contracting parties, Sysco, its agents and
representatives shall have full and complete access to all real property
currently owned or leased by Guest Supply ("Real Property") in which to make
such studies, tests, inspections, measurements of all kinds and/or inspections
as Sysco deems reasonably necessary, including, without limitation, engineering,
environmental, hydrologic, compaction, soils, surveys, and tests, observations
and/or studies including, without limitation, the taking of soil and ground
water samples. Sysco hereby agrees to indemnify Guest Supply and its contracting
parties and hold it and them harmless from any loss, cost or damage to the
physical condition of the Real Property actually incurred by Guest Supply or
such contracting parties and proximately caused by Sysco's or its agent's
inspection of and access to the Real Property.
(c) Interim Financials. The Company shall have delivered to Sysco within
three (3) business days from the date of this Agreement unaudited, consolidated
monthly balance sheets for Guest Supply as of December 29, 2000 and an
unaudited, consolidated income statement for Guest Supply for the two (2) months
then ended, prepared in accordance with generally accepted accounting principles
("GAAP"), which fairly present in all material respects the financial condition
of Guest Supply at the date thereof and the results of the operations for the
two (2) months then ended (subject to normal year-end audit adjustments,
collectively, together with those additional financial statements to be
delivered after the date hereof pursuant to this Section 3.3(c), collectively,
the "Interim Financials"). Within fifteen (15) days after the end of each month
commencing with the month of January 2001 and continuing for each month prior to
the month in which the Control Date occurs, the Company shall prepare and
deliver Interim Financials to Sysco which will be as of the end of the preceding
month. The Interim Financials shall fairly present in all material respects the
financial condition of Guest Supply at, and as of, the dates thereof and the
results of the operations for the periods then ended (subject to normal year-end
adjustments).
(d) No Waiver. Sysco's due diligence review and any inspections pursuant
hereto shall not waive or release Guest Supply from any of its representations,
warranties or covenants under this Agreement.
3.4 Conduct of Business by the Company. The Company covenants and agrees
that, unless Sysco shall otherwise consent in writing, between the date hereof
and the Control Date, the Business shall be conducted in, and Guest Supply shall
not take any action except in, the ordinary course of Business and in a manner
consistent with its past practice; and Guest Supply will use its commercially
reasonable efforts consistent with past practices, but recognizing the effects
that the transaction contemplated hereby may have, to preserve substantially
intact the business organization of the Business, to keep available the services
of the present officers, employees and consultants of Guest Supply and to
preserve the present relationships of Guest Supply with customers, suppliers and
other persons with which Guest Supply has significant business relations.
(a) By way of amplification and not limitation, except as expressly
provided for in this Agreement, the Company shall not, between the date
hereof and the Control Date, directly or indirectly, do any of the
following in respect of the Business without the prior written consent of
Sysco:
(i)(A) issue, sell, pledge, dispose of, encumber, authorize, or
propose the issuance, sale, pledge, disposition, encumbrance or
authorization of any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital
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stock of, or any other ownership interest in, Guest Supply; provided,
however, the Company shall have the right to issue Common Stock pursuant
to the Company's Employee Stock Purchase Plan and to issue Common Stock
to those persons and entities who properly exercise or convert a Company
Stock Option, warrant or other convertible security to acquire Common
Stock which Company Stock Options, warrants and convertible securities
were issued and outstanding prior to the date of this Agreement; (B)
amend or propose to amend the Certificates of Incorporation, bylaws (or
other comparable organizational document) of Guest Supply; (C) split,
combine or reclassify any outstanding share of the Company's capital
stock, or declare, set aside or pay any dividend or distribution payable
in cash, stock, property or otherwise with respect to the Company's
capital stock; (D) redeem, purchase or otherwise acquire or offer to
redeem, purchase or otherwise acquire any shares of the Company's
capital stock; or (E) enter into any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this Section
3.4(a)(i);
(ii)(A) directly or indirectly acquire (by merger, consolidation,
or acquisition of stock or assets) any interest in any entity or person;
(B) except in the ordinary course of Business and in a manner consistent
with its past practices, sell, pledge, dispose of, or encumber or
authorize or propose the sale, pledge, disposition or encumbrance of any
assets of Guest Supply used or held for use by the Business; (C) enter
into any material contract or agreement, except in the ordinary course
of Business and in a manner consistent with its past practice; (D)
authorize any single capital expenditure in excess of $50,000 or capital
expenditures in the aggregate in excess of $200,000; or (E) enter into
or amend any contract, agreement, commitment or arrangement with respect
to any of the matters set forth in this Section 3.4(a)(ii);
(iii) take any action other than in the ordinary course of Business
and in a manner consistent with its past practice with respect to
increasing compensation (including bonuses), or other remuneration of
any director, officer or employee of Guest Supply or with respect to the
grant of any severance or termination pay (otherwise than as fully
disclosed to Sysco in writing prior thereto) or with respect to any
increase of benefits payable under its severance or termination pay
policies in effect on the date hereof;
(iv) make any payments except in the ordinary course of Business
and in amounts and in a manner consistent with its past practice (none
of which payments shall be unreasonable or unusual), under any Employee
Benefit Plan (defined in Section 4.18), or otherwise to any employee of
Guest Supply, enter into any Employee Benefit Plan, any employment or
consulting agreement, grant or establish any new awards under any such
existing Employee Benefit Plan or agreement, or adopt or otherwise amend
(except as required or contemplated hereby) any of the foregoing;
(v) take any action, except in the ordinary course of Business and
in a manner consistent with past practice, with respect to, or make any
change in, its methods of management, purchasing, distribution,
marketing, or operating (or practices relating to payment of trade
accounts or to other payments or relating to writing down or failing to
write down or writing up the value of any inventory or other assets of
Guest Supply) or make any change in the method of accounting of Guest
Supply;
(vi) take any action to incur or increase prior to the Control Date
any indebtedness for borrowed money from banks, financial institutions,
or any other persons or entities (other than trade payables incurred in
the ordinary course of Business and in a manner consistent with its past
practices and other than borrowings under existing credit facilities) or
cancel without payment in full, any notes, loans or, except in the
ordinary course of Business and in a manner consistent with its past
practices, other receivables;
(vii) loan or advance monies to any person under any circumstance
whatsoever, except travel advances, advances in connection with
vacations, or other reasonable expense advances to employees of Guest
Supply but in no event shall any advance exceed $1,000 per person;
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(viii) change any existing bank accounts or lock box arrangements
of Guest Supply except for deposits, withdrawals or changes in
signatories in the ordinary course of Business and in a manner
consistent with its past practices;
(ix) waive any material rights of Guest Supply or settle any single
claim involving more than $50,000 or in the aggregate involving more
than $200,000; or
(x) do any act or omit to do any act which would cause a material
breach of any material contract, commitment or obligation of Guest
Supply.
3.5 No Negotiations. The Company hereby agrees that neither Guest Supply
nor any of its officers, directors, employees, investment bankers,
representatives or agents shall, directly or indirectly:
(i) solicit, initiate, entertain, encourage or respond to any
inquiries or proposals that constitute or could reasonably be expected to
lead to an Alternative Transaction, as defined below; provided, however,
the Company shall not be in breach of this Section 3.5 for responses (but
not to an Alternative Transaction) relating to the contested proxy
solicitation initiated by BFMA Holding Corporation for the Company's 2001
Annual Meeting of Stockholders, so long as the Company does not breach the
covenants of the fourth sentence of Section 3.8; or
(ii) negotiate, discuss or provide any non-public information to any
third party in connection with an Alternative Transaction; or
(iii) from and after the date hereof until the termination of this
Agreement and except as expressly permitted by the following provisions of
this Section 3.5, permit any of its Subsidiaries to, and will not authorize
any officer, director or employee of or any investment banker, attorney,
accountant or other advisor or representative of, the Company or any of its
Subsidiaries to (and will instruct such persons not to), directly or
indirectly, (i) solicit, initiate or encourage the submission of a proposal
for any Alternative Transaction (as hereinafter defined) or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) (a "Third Party") other than Sysco, Merger
Sub or any affiliate thereof any information with respect to, or take any
other action knowingly to facilitate, any Alternative Transaction or any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Alternative Transaction; provided, however,
that nothing contained in this Section 3.5(iii) or in Sections 3.5(i) or
3.5(ii) shall prohibit the Company Board from furnishing information to, or
entering into discussions or negotiations with, any Third Party that makes
an unsolicited bona fide written proposal of an Alternative Transaction if,
and only to the extent that (A) the Company Board, after consultation with
legal counsel, determines in good faith that such action is necessary for
the Company Board to comply with its fiduciary duties to the Stockholders
under applicable law, (B) the Company Board determines in good faith, after
consultation with a financial advisor of nationally recognized reputation,
that such Alternative Transaction would, if consummated, constitute or be
reasonably likely to constitute a Superior Proposal (as hereinafter
defined) and (C) prior to taking such action, the Company (x) provides
notice to Sysco to the effect that it is taking such action (including,
without limitation, the material terms and conditions thereof and the
identity of the person making it) as promptly as practicable (but in no
case later than 24 hours) after taking such action, (y) provides Sysco with
a copy of any Alternative Transaction or amendments or supplements thereto
and (z) receives from such Third Party an executed confidentiality
agreement in reasonably customary form and in any event containing terms at
least as stringent as those between Sysco and the Company. Subsequent to
furnishing information to, or entering into discussions or negotiations
with, any Third Party in accordance with this Section 3.5, the Company
shall inform Sysco on a prompt basis of the status of any discussions or
negotiations with such Third Party, and any material changes to the terms
and conditions of such Alternative Transaction. Promptly after the
execution and delivery of this Agreement, the Company will, and will cause
its Subsidiaries to, and will instruct their respective officers,
directors, employees, investment bankers, attorneys, accountants and other
agents to, cease and terminate any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
possible Alternative Transaction
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and shall notify each party that it, or any officer, director, investment
advisor, financial advisor, attorney or other representative retained by
it, has had discussions with during the 60 days prior to the date of this
Agreement that the Company Board no longer seeks the making of any
Alternative Transaction.
(iv) (x) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Sysco, the Company Recommendations or (y) approve or
recommend an Alternative Transaction unless the Company Board, after
consultation with legal counsel, determines in good faith that such action
is necessary for the Company Board to comply with its fiduciary duties to
the Stockholders under applicable Law; provided, however, the Company Board
may not approve or recommend (and in connection therewith, withdraw or
modify the Company Recommendations) an Alternative Transaction unless (i)
such Alternative Transaction is a Superior Proposal, (ii) the Company Board
shall have first consulted with legal counsel and have determined that such
action is necessary for the Company Board to comply with its fiduciary
duties to the Stockholders, (iii) the Company Board has provided written
notice to Sysco (a "Notice of Superior Proposal") advising Sysco that the
Company Board has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal and identifying the person
making such Superior Proposal, and (iv) two business days have elapsed
after Sysco's receipt of the Notice of Superior Proposal and Sysco has not
made an offer such that the Company Board determines in its good faith
judgment (after consultation with a financial adviser of nationally
recognized reputation and consultation with legal counsel) that the
Alternative Transaction is not a Superior Proposal. If Sysco makes an offer
as contemplated by clause (iv) of the preceding sentence, upon the
Company's request Sysco shall execute an amendment to this Agreement to
implement the terms contemplated by such offer.
Nothing contained in this Section 3.5 shall prohibit the Company from
taking and disclosing to the Stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure
to the Stockholders which, in the good faith reasonable judgment of the
Company Board, after consultation with legal counsel, is required under
applicable law; provided, that except as otherwise permitted in this
Section 3.5, the Company shall not withdraw or modify, or propose to
withdraw or modify, the Company Recommendations or approve or recommend, or
propose to approve or recommend, an Alternative Transaction.
Notwithstanding anything contained in this Agreement to the contrary, any
action by the Company Board permitted by, and taken in accordance with,
this Section 3.5 shall not constitute a breach of this Agreement by the
Company. Notwithstanding anything in this Agreement to the contrary but
subject to the proviso contained in the first sentence of Section 3.5(iii)
hereof, nothing in this Agreement shall (x) limit the Company Board's
ability to make any disclosure to the Stockholders that the Company Board
determines in good faith (after consultation with legal counsel) is
required to be made to satisfy its fiduciary duties under applicable law or
(y) limit the Company's ability to make any disclosure required by
applicable law, and such actions shall not be considered a breach of this
Agreement.
(v) For all purposes of this Agreement, "Alternative Transaction"
means the occurrence of any of the following events: (i) the acquisition of
the Company by merger or otherwise by any Third Party, (ii) the acquisition
by a Third Party of 20% or more of the assets of the Company and its
Subsidiaries taken as a whole, (iii) the acquisition by a Third Party of
20% or more of the outstanding Shares or the issuance by the Company of
capital stock containing terms which are inconsistent with the consummation
of the transactions contemplated by this Agreement, (iv) the adoption by
the Company of a plan of liquidation or the declaration or payment by the
Company of an extraordinary dividend representing 20% or more of the value
of the Company and its Subsidiaries taken as a whole or (v) the repurchase
by the Company or any of its Subsidiaries of more than 20% of the
outstanding Shares.
For all purposes of this Agreement, a "Superior Proposal" means any
bona fide written unsolicited proposal of an Alternative Transaction
(except that, for purposes of the definition of Superior Proposal, 50%
shall be substituted for 20% wherever it appears in the definition of
Alternative Transaction) that the Company Board determines in its good
faith judgment (after consultation with a financial advisor of nationally
recognized reputation and consultation with legal counsel) (i) would result
in a transaction, if consummated, that would be superior to the
Stockholders from a financial point of view as compared to
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the transactions contemplated hereby and any alternative proposed by Sysco
or Merger Sub in accordance with Section 3.5(iv) and (ii) to be reasonably
capable of being consummated in accordance with its terms (including that
any financing required to consummate the transaction contemplated by such
proposal is capable of being, and is reasonably likely to be, obtained), in
each case taking into account all factors the Company Board considers
relevant, including all legal, financial, regulatory and other aspects of
the proposal by the Third Party. Any change in the terms of an Alternative
Transaction shall be deemed to constitute a new Alternative Transaction
hereunder, subject to all of the applicable provisions of this Section 3.5.
The Company shall notify Sysco promptly if it or, to its knowledge,
any of its officers, directors, employees, investment bankers,
Stockholders, representatives, agents, or Affiliates receives any
indications of interest, requests for non-public information or offers in
respect of an Alternative Transaction, and will communicate to Sysco in
reasonable detail the terms of any such indication, request or proposal,
and will provide Sysco with copies of all written communications relating
to any such indication, request or proposal. The Company represents that it
is not party to or bound by any agreement with respect to an Alternative
Transaction other than this Agreement.
3.6 Expenses.
(a) Except as otherwise specifically provided herein, all of the expenses
incurred by Sysco and Merger Sub in connection with the authorization,
negotiation, preparation, execution and performance of this Agreement and other
agreements referred to herein, including, without limitation, all fees and
expenses of agents, representatives, brokers, counsel and accountants for Sysco,
and Merger Sub, shall be paid by Sysco.
(b) Except as otherwise specifically provided herein, all expenses incurred
by Guest Supply in connection with the authorization, negotiation, preparation,
execution and performance of this Agreement and the other agreements referred to
herein, including without limitation, all fees and expenses of agents,
representatives, brokers, counsel and accountants for Guest Supply shall be paid
by Guest Supply. Guest Supply shall be solely responsible for paying the fees
owed to U.S. Bancorp Xxxxx Xxxxxxx ("Xxxxx Xxxxxxx") incurred in connection with
this transaction. Guest Supply shall be solely responsible for paying any and
all sales, use and transfer taxes incurred in connection with the transactions
described herein.
3.7 Notification of Certain Matters. The Company shall give prompt notice
to Sysco of the following:
(a) The occurrence or nonoccurrence of any event of which it obtains
knowledge whose occurrence or nonoccurrence would be reasonably likely to
cause either (A) a material breach of any representation or warranty of the
Company contained in this Agreement at any time from the date hereof to the
Control Date, or (B) directly or indirectly, any Material Adverse Effect.
The term "Material Adverse Effect" means any change in or effect that is or
may reasonably be expected to be materially adverse to the operations,
condition (financial or otherwise) or assets of Guest Supply, or the
Business, in either case, taken as a whole, provided, however, that the
term "Material Adverse Effect" shall not include any change or effect to
the extent attributable to the matters set forth on Schedule 3.7. Sysco's
knowledge of any facts obtained by Sysco prior to the date hereof or
disclosed herein that may give rise after the date hereof to a Material
Adverse Effect shall not affect whether or not a Material Adverse Effect
shall have occurred.
(b) Any material failure by the Company to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
Notwithstanding the foregoing, the delivery of any notice pursuant to this
Section 3.7 shall not limit or otherwise affect the remedies available hereunder
to Sysco upon receiving such notice.
3.8 Confidentiality and Public Announcements. Until the disclosure
contemplated by the next following sentence is made, the parties hereto each
agree to, and to direct their respective directors, officers, employees,
representatives and agents with a need to know such information to, maintain the
confidentiality of the transactions contemplated by this Agreement, unless
disclosure is required by applicable federal or state
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laws or regulations or common law. Further, the parties hereto agree to announce
the consummation of the transactions contemplated by this Agreement
simultaneously at a mutually agreeable time as promptly as practicable after the
execution and delivery of this Agreement (except as required by applicable law).
The content of all announcements and publicity relating to this Agreement will
be subject to the mutual approval of the Company and Sysco (except as otherwise
required by law), which approval shall not be unreasonably withheld or delayed.
Guest Supply shall, and shall cause its representatives to, maintain the
confidentiality of all non-public information concerning Sysco (other than such
information which becomes generally available to the public other than as a
result of disclosure by Guest Supply) which becomes known by Guest Supply or
such representatives solely as a result of the negotiation or consummation of
the transactions contemplated by this Agreement, and shall promptly return and
cause its agents and representatives to return to Sysco all written materials
containing such information in the event that the Closing does not occur within
the time limit herein provided for. Without limiting the terms and conditions of
the Confidentiality Agreement dated September 19, 2000 between Sysco and the
Company, Sysco shall, and shall cause its representatives to, maintain the
confidentiality of all non-public information concerning Guest Supply (other
than such information which becomes generally available to the public other than
as a result of disclosure by Sysco) which becomes known by Sysco or such
representatives solely as a result of its due diligence investigations or
efforts conducted prior to or after the date hereof or the negotiation or
consummation of the transactions contemplated by this Agreement, and shall
promptly return, and cause its agents and representatives to return, to Guest
Supply all written materials containing such information in the event that the
Closing does not occur within the time limit herein provided for. Nothing
contained herein shall limit the right of any such persons to disclose any such
information to its subsidiaries, employees, agents, representatives, counsel,
accountants, financial advisors, underwriters and sources of financing (and
their counsel and accountants) for the purpose of facilitating the consummation
of the transactions contemplated hereby.
3.9 Tax Matters.
(a) Defined Terms. As used in this Agreement, the following terms have the
specified meanings:
(i) "Tax Authority" shall mean any United States federal, foreign,
national, state, county or municipal or other local government, any
subdivision, agency, commission or authority thereof, or any
quasi-governmental body exercising any taxing authority or any other
authority exercising tax regulatory authority.
(ii) "Tax Return" shall mean any return, amended return, estimated
return, information return or statement (including any related or
supporting information) filed or to be filed with any Tax Authority in
connection with the determination, assessment, collection or administration
of any Tax or filed by or including Guest Supply in respect of the
Business.
(iii) "Tax" or "Taxes" shall mean all taxes, charges, fees, interest,
fines, penalties, additions to tax or other assessments, including without
limitation, income, excise, environmental, property, sales, gross receipts,
gains, transfer, occupation, privilege, employment (including social
security and unemployment), withholding, use, value added, capital stock or
surplus, franchise taxes, advance corporate tax and customs duties imposed
by any Tax Authority, payable by Guest Supply or relating to or chargeable
against Guest Supply's assets, revenues or income.
(b) Tax Returns. After the Closing, Sysco will cause to be prepared and
filed all Tax Returns for Guest Supply for any period ending on or before the
Closing Date and for any period which includes the Closing Date and ends after
the Closing Date.
3.10 Regulatory Authorization. Sysco and the Company shall, within five
business days of the execution hereof, file with the United States Federal Trade
Commission ("FTC") and the United States Department of Justice ("DOJ") their
respective notification and report forms required for the transactions
contemplated hereby in connection therewith pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR Act") and each agrees to
file as promptly as practicable any supplemental information requested by the
FTC or DOJ. Any such notification and report forms and supplemental
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information will be in substantial compliance with the requirements of the HSR
Act. Sysco shall be solely responsible for all filing fees required in
connection with such filings. Each party shall cooperate in all reasonable
respects with each other and the FTC and the DOJ.
3.11 Letters of Guest Supply's Accountants. The Company shall use
commercially reasonable efforts to cause to be delivered to Sysco two letters
from the Company's independent accountants, one dated a date within two business
days before the date on which the Form S-4 shall become effective (the "Guest
Supply S-4 Comfort Letter") and one dated a date within two business days before
the Closing Date (the "Guest Supply Merger Comfort Letter"), each addressed to
Sysco, in form and substance reasonably satisfactory to Sysco and customary in
scope and substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
3.12 Letters of Sysco's Accountants. Sysco shall use commercially
reasonable efforts to cause to be delivered to the Company two letters from
Sysco's independent accountants, one dated a date within two business days
before the date on which the Form S-4 shall become effective (the "Sysco S-4
Comfort Letter") and one dated a date within two business days before the
Closing Date (the "Sysco Merger Comfort Letter"), each addressed to the Company,
in form and substance reasonably satisfactory to the Company and customary in
scope and substance for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
3.13 Affiliates. As soon as practicable after the date hereof, the
Company shall deliver to Sysco a list of all persons or entities who, to its
knowledge, may be deemed to be, at the time this Agreement is submitted for
adoption to the Stockholders, "Affiliates" of the Company for purposes of Rule
145 under the Securities Act. Such list shall be updated, from time to time,
upon receipt of knowledge thereof, as necessary to reflect changes from the date
hereof. The Company shall use commercially reasonable efforts to cause each
person identified on such list to deliver to Sysco not less than 10 days prior
to the Effective Time, a written agreement containing customary terms and
otherwise reasonably satisfactory to Sysco.
3.14 ISRA. The Sysco Companies and Guest Supply acknowledge that the sale
of the Business is subject to compliance with the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 ("ISRA"). Prior to the Closing Date, Guest Supply agrees to
apply to and obtain from the New Jersey Department of Environmental Protection
("NJDEP") one of the following with respect to the entirety of each property
owned or leased by Guest Supply in New Jersey (the "NJ Properties"): (i) a
letter of Non-Applicability ("LNA") pursuant to N.J.S.A. 7:26B-2.22; (ii) a
Remediation Agreement ("RA") pursuant to N.J.S.A. 7:26b-4.1; or (iii) a
regulated underground storage tank waiver pursuant to N.J.A.C. 7:26B-5.3 ("UST
Waiver")(collectively, the "ISRA Approvals"). Guest Supply further agrees that,
if it chooses to obtain an RA or UST Waiver, Guest Supply will use commercially
reasonable efforts to obtain Shore Point Distributor's signature on the RA or on
documents pertaining to the UST Waiver, and an agreement to fund the
implementation of the RA or work resulting from U.S.T Waiver in compliance with
Shore Point Distributors' obligations pursuant to the Rider to Lease Between
Shore Point Distributors and Guest Supply. In the event that Shore Point
Distributors has not executed the documents necessary to obtain the ISRA
Approvals for the property owned by Shore Point Distributors within seven (7)
days after the date hereof, Guest Supply shall file the documents necessary to
obtain such ISRA Approvals in its own name and without the signature of Shore
Point Distributors.
If any investigation or remediation is performed in connection with Guest
Supply's ISRA compliance or underground storage tank remediation, Case
#96-10-25-1305-57/UST #0042400, in advance of the Closing Date, then Guest
Supply shall provide to Sysco, at the same time it provides to NJDEP, a copy of
any analytical data report or other report prepared by or on behalf of Guest
Supply in connection therewith.
3.15 Director and Officer Liability. (a) Sysco agrees that the
certificate of incorporation and the bylaws of the Surviving Corporation shall
contain at least the provisions with respect to exculpation from liability and
indemnification set forth in the certificate of incorporation and bylaws of the
Company as of the date hereof, which provisions (along with all provisions
regarding indemnification or exculpation from liability contained in the
governing documents of any of the Company's subsidiaries or in any agreements or
commitments of the Company or any of its subsidiaries) shall not be amended,
repealed, or otherwise modified in any manner that would adversely affect the
rights thereunder of individuals who at the Effective
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Time were present or former directors, officers, employees, or agents of the
Company, unless such modification is required by applicable law.
(b) From and after the earlier to occur of the Effective Time or the
acceptance for payment of the Shares in the Offer, Sysco and the Surviving
Corporation will, jointly and severally, indemnify, defend, and hold harmless
the present and former directors and officers of the Company and each of its
subsidiaries against all losses, claims, damages, and liabilities and amounts
paid in settlement in connection with any claim, action, suit, proceeding, or
investigation, whether civil, criminal, administrative, or investigative, to
which any of them was or is a party or is threatened to be made a party by
reason of the fact that he or she was or is a director or officer of the Company
or any of its subsidiaries in respect of acts or omissions occurring at or prior
to the Effective Time to the fullest extent that the Company or such subsidiary
would have been permitted to indemnify such Person under applicable law and the
certificate of incorporation and bylaws of the Company or such subsidiary in
effect on the date hereof, provided, however; that the aggregate indemnification
liability of Sysco pursuant to this Section 3.15 shall not exceed the
consolidated net worth (determined in accordance with GAAP) of the Company at
December 29, 2000. Sysco shall, without any lapse in coverage, either (i) for at
least six (6) years after the Effective Time, provide officers' and directors'
liability insurance ("D&O Insurance") in respect of acts or omissions occurring
at or prior to the Effective Time covering each person currently covered by the
Company's D&O Insurance policy on terms with respect to coverage and amount no
less favorable than those contained in such policy as in effect on the date
hereof; (ii) purchase tail insurance in respect of the Company's existing D&O
Insurance for six (6) years for a premium not to exceed the amount of the
customary premium for such tail insurance, or (iii) if such D&O Insurance or
tail insurance is only available at premiums in excess of the premiums currently
paid by the Company for its existing D&O Insurance, then purchase the highest
level of D&O Insurance or tail insurance available for an amount equal to 150%
of such annual premium.
(c) Any person who is entitled to indemnification under this Section 3.15
(an "Indemnified Party") wishing to claim such indemnification, upon learning of
any such claim, action, suit, proceeding, or investigation, shall promptly
notify Sysco thereof, but failure to so notify will not relieve Sysco of
liability except to the extent Sysco is materially adversely affected thereby.
In the event of any such claim, action, suit, proceeding, or investigation
(whether arising before or after the Effective Time), (i) Sysco or the Surviving
Corporation shall have the right to assume the defense thereof, and Sysco shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if Sysco or the Surviving
Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that, in such counsel's reasonable judgment, there are issues
that constitute conflicts of interest between Sysco or the Surviving Corporation
and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Sysco and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided that, Sysco shall be
obligated pursuant to this subsection (c) to pay for only one firm of counsel
for all Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties
will cooperate in the defense of any such matter, and (iii) Sysco shall not be
liable for any settlement effected without its prior written consent; and
provided further that, Sysco shall not have any obligation hereunder to any
Indemnified Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law. The rights of the Indemnified Parties
under this Section 3.15 are in addition to any rights they may have under the
certificate of incorporation and bylaws of the Surviving Corporation or any
subsidiary of the Surviving Corporation or under any indemnification agreement
with the Company or any subsidiary of the Company.
(d) Sysco agrees that if the Surviving Corporation or any of its successors
or assigns (i) shall consolidate with or merge into any other person or entity
and shall not be the continuing or surviving person of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any person or entity, then and in each such case, proper provisions
shall be made so that the successors and assigns of the Surviving Corporation
shall assume all of the obligations set forth in this Section 3.15.
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(e) The provisions of this Section 3.15 are intended to be for the benefit
of, and shall be enforceable by, each of the present and former directors,
officers, employees, and agents, their representatives.
3.16 Agreement to Vote All Shares. Sysco and Merger Sub agree to vote all
Shares acquired in the Offer or otherwise beneficially owned by them or any of
their subsidiaries in favor of approval and adoption of this Agreement and the
Merger at the Stockholders Meeting and to take such other actions to effectuate
as promptly as practicable the Merger pursuant to Section 14A:10-3 of the NJBCA,
on the terms and subject to the conditions set forth in this Agreement.
3.17 Form 8-K. The Company shall, within five business days of the
execution hereof, prepare and file with the SEC a current report on Form 8-K
containing a description of the Company's capital stock in compliance with Item
202 of the SEC's Regulation S-K.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
In order to induce Sysco and Merger Sub to enter into this Agreement and
consummate the transactions contemplated hereby, the Company hereby makes the
following representations and warranties to Sysco and Merger Sub, each of which
is relied upon by Sysco and Merger Sub:
4.1 Organization and Authority.
(a) The Company. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey. The
Company is duly qualified as a foreign corporation in all jurisdictions in which
the conduct of its business or the ownership of its properties requires such
qualification where the failure to have so qualified would cause a Material
Adverse Effect and Schedule 4.1(a)is a true, correct and complete list of all of
the states and foreign jurisdictions where the Company is so qualified.
(b) Subsidiaries. Schedule 4.1(b)(i) lists all corporations,
partnerships, joint ventures and other business entities in which the Company
owns, of record or beneficially, a majority of the direct or indirect equity
interest or any right (contingent or otherwise) to acquire a majority of the
equity interest of any entity (collectively, the "Subsidiaries"). The Company
and/or a Subsidiary owns all of the issued and outstanding capital stock or
equitable interest of each Subsidiary free and clear of any security interest,
pledge, lien, charge, or restriction on ownership, voting or transfer
restriction, or encumbrance of any kind. Each Subsidiary is duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization, as applicable, all of which are listed on
Schedule 4.1(b)(i). Except as set forth on Schedule 4.1(b)(ii), each Subsidiary
is duly qualified as a foreign corporation (or foreign entity, as applicable) in
all jurisdictions where the failure to have so qualified would cause a Material
Adverse Effect and, Schedule 4.1(b)(ii) is a true, correct and complete list all
of the states and foreign jurisdictions where each Subsidiary is so qualified.
Since November 15, 2000, Guest Supply has had no material operations or business
in New Zealand other than in connection with the liquidation and closure of
Guest Supply's operations and business conducted in New Zealand.
(c) Power and Authority. Guest Supply has all necessary corporate power
and authority to own, lease and operate its properties and conduct the Business
as it is currently being conducted.
4.2 Corporate Power and Authority; Due Authorization. The Company has
full corporate power and authority to execute and deliver this Agreement and
each of the Transaction Documents to which the Company is or will be a party and
subject to the Stockholders' approval, to consummate the transactions
contemplated hereby and thereby. "Transaction Documents" means each of the
agreements, documents and instruments referenced in this Agreement to be
executed and delivered by the Company. The Company Board has, in accordance with
Section 1.3(a), duly approved and authorized the execution and delivery of this
Agreement and each of the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby, and no other corporate proceedings
are necessary, other than the Stockholders' approval.
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Assuming that this Agreement and each of the Transaction Documents which are
also Sysco Companies' Transaction Documents (defined in Section 5.2) constitutes
a valid and binding agreement of the Sysco and Merger Sub, this Agreement and
each of the Transaction Documents constitutes, or will constitute when executed
and delivered, a valid and binding agreement of the Company enforceable by Sysco
and Merger Sub in accordance with its terms, subject to laws of general
application in effect affecting creditors' rights and subject to the exercise of
judicial discretion in accordance with general equitable principles. The duly
elected officers and directors of Guest Supply are set forth on Schedule 4.2.
True, correct and complete copies of the Articles of Incorporation, the Bylaws
and comparable organizational documents and all minutes of Guest Supply are
contained in the minute books of Guest Supply. True, correct and complete copies
of the minute books of Guest Supply have been delivered to Sysco.
4.3 Title to Assets. Other than as set forth on Schedule 4.3, Guest
Supply has good and valid title to all of the assets reflected on Guest Supply's
consolidated, audited September 29, 2000 balance sheet (and a valid and
enforceable leasehold interest in the real and personal property which is
leased) and the Interim Financials except for assets disposed of since the date
of such financial statements in the ordinary course of Business and in a manner
consistent with past practices (collectively, the "Assets"), free and clear of
any liens, pledges, encumbrances, claims or similar rights of third parties. All
of the Assets are in satisfactory operating condition, normal wear and tear
excepted.
4.4 No Conflict; Required Consents. Other than the consents, approvals,
authorizations and other actions listed on Schedule 4.4 , the execution and
delivery by the Company of this Agreement and the Transaction Documents and the
consummation by the Company of the transactions contemplated hereby and thereby
do not and will not (a) require the consent, approval or action of, or any
filing or notice to, any corporation, firm, person or other entity or any
foreign, federal, state, or local government, court, administrative, regulatory
or other governmental agency, commission or authority, or any non-governmental
self-regulatory agency, commission or authority (collectively, "Governmental
Authority"); (b) violate the terms of any instrument, document or agreement to
which Guest Supply is a party, or by which the Business or any Assets are bound,
or be in conflict with, result in a breach of or constitute (upon the giving of
notice or lapse of time or both) a default under any such instrument, document
or agreement, or result in the creation of any lien upon the Business or any of
the Assets; (c) violate any applicable order, writ, injunction, decree,
judgment, restriction, ruling, law, or regulation (collectively, "Laws") of any
Governmental Authority; or (d) violate the Certificate of Incorporation, Bylaws,
or comparable organizational document of Guest Supply. Except as set forth on
Schedule 4.4, Guest Supply is not subject to, or a party to, any mortgage, lien,
lease, agreement, contract instrument, order, judgment or decree or other
restriction of any kind or character which would prevent or hinder the continued
operation of the Business immediately after the Closing on substantially the
same basis as theretofore operated.
4.5 Capital Stock.
(a) The Company. The Company has 20,000,000 shares of Common Stock
authorized of which 6,839,837 shares are issued and outstanding and no shares
are held in the treasury of the Company as of the date hereof. As of the date
hereof, the Company has authorized 1,000,000 shares of preferred stock, no par
value, of the Company ("Preferred Stock"), of which no shares of Preferred Stock
are issued and outstanding on the date hereof. 40,000 shares of Preferred Stock
were reserved for issuance upon exercise of the rights (the "Company Rights" or,
individually, a "Company Right") distributed in connection with that certain
Rights Agreement dated July 15, 1988, as amended by Amendment No. 1 dated August
15, 1997 (the "Rights Agreement"). Schedule 4.5(a)(i) is a true, correct and
complete list as of the date hereof of: (x) the number of options which the
Company has been authorized to issue, and (y) the number of Company Stock
Options which are issued and outstanding together with the applicable exercise
price(s), vesting dates, and expiration dates. Schedule 4.5(a)(ii) is a true,
correct and complete copy of all of the option plans, forms of agreements
pursuant to which the Company Stock Options were granted, and a list of
convertible promissory notes. All outstanding shares of Common Stock, and all
outstanding Company Stock Options, and convertible promissory notes have been
duly authorized, and are validly issued, and all outstanding shares of Common
Stock are fully paid and nonassessable and free of preemptive rights. Except as
set forth on Schedule 4.5(a)(i)-(ii), as of the date hereof there are
outstanding (i) no shares of capital stock or other voting
X-00
00
xxxxxxxxxx xx xxx Xxxxxxx, (xx) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
(iii) no options (including employee stock options), warrants or rights of
conversion or other rights, agreements, arrangements or commitments obligating,
or which may obligate, the Company to sell or issue any additional shares of the
Company's capital stock, (iv) no obligation of the Company to issue any voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company and (v) no equity equivalents, interests in the
ownership or earnings, or other similar rights of or with respect to the Company
(the items in clauses (i), (ii), (iii), (iv) and (v) being referred to
collectively as the "Company Securities"). There are no outstanding obligations
of the Company to repurchase, redeem or otherwise acquire any of the Company
Securities.
(b) Subsidiaries. Schedule 4.5(b) is a true correct and complete list of:
(x) the authorized, issued and outstanding capital stock (or other ownership
interest, as applicable) of each Subsidiary, and (y) the number of shares of
capital stock (or other ownership interest, as applicable) held by the Company.
Except as set forth on Schedule 4.5(b), all outstanding shares of capital stock
(or other ownership interest, as applicable) of the Subsidiaries have been duly
authorized, and are validly issued, fully paid and nonassessable are solely
owned (of record and beneficially) by the Company. Except as set forth on
Schedule 4.5(b), there are outstanding (i) no shares of capital stock or other
voting securities of the Subsidiaries, (ii) no securities of the Subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of any Subsidiary, (iii) no options (including employee stock
options), warrants or rights of conversion or other rights, agreements,
arrangements or commitments obligating, or which may obligate, any Subsidiary to
sell or issue any additional shares of any Subsidiary's capital stock, (iv) no
obligation of any Subsidiary to issue any voting securities or securities
convertible into or exchangeable for capital stock or voting securities of any
Subsidiary and (v) no equity equivalents, interests in the ownership or
earnings, or other similar rights of or with respect to any Subsidiary (the
items in clauses (i), (ii), (iii), (iv) and (v) being referred to collectively
as the "Subsidiary Securities"). There are no outstanding obligations of Guest
Supply to repurchase, redeem or otherwise acquire any Subsidiary Securities.
4.6 Compliance with Laws. Except as set forth on Schedule 4.6, the
Assets, the Business, Guest Supply, and its directors, officers and employees in
the conduct of their duties on behalf of Guest Supply are in, and have been in,
compliance with all applicable Laws of all applicable Governmental Authorities.
Other than as set forth on Schedule 4.6, since December 31, 1999, Guest Supply
has received no written notice of any noncompliance with the foregoing which has
not been cured in all material respects.
4.7 Licenses and Permits. Except as set forth on Schedule 4.7, Guest
Supply holds and is in compliance with all material licenses, permits,
concessions, grants, franchises, approvals and authorizations listed on Schedule
4.7 ("Licenses and Permits"), and such list constitutes all of the material
licenses, permits, concessions, grants, franchises, approvals and authorizations
necessary or required for the use or ownership of Guest Supply's Assets and the
operation of the Business. Except as set forth on Schedule 4.7, Guest Supply has
not received within the preceding thirty-six (36) months written notice of any
material violations in respect of any such Licenses and Permits. Except as set
forth on Schedule 4.7, no proceeding is pending or, to the best knowledge of
Guest Supply (defined in Section 8.16(a)), threatened, which seeks revocation or
limitation of any such Licenses and Permits.
4.8 Financial Information.
(a) Prior to the date hereof, Guest Supply has delivered to Sysco copies of
the audited consolidated balance sheets of Guest Supply as of October 1, 1999
and September 29, 2000 and audited consolidated income statements for the fiscal
years then ended (collectively, the "Historical Financials"). All such
Historical Financials (including any related notes and schedules) have been
prepared in accordance with GAAP and fairly present in all material aspects the
financial condition of Guest Supply at the respective dates thereof and the
results of its operations for the periods then ended.
(b) On the date hereof, there are no liabilities or obligations of Guest
Supply or the Business of any nature, whether liquidated, unliquidated, accrued,
absolute, contingent or otherwise which are required by GAAP to be reflected or
reserved against on a balance sheet or in the notes thereto, except for (i)
those that
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are specifically reflected or reserved against as to amount in the September 29,
2000 audited consolidated balance sheet or in the notes thereto; (ii) that are
specifically set forth on Schedule 4.8; (iii) those that are specifically
reflected or reserved against in the balance sheets contained in the Interim
Financials (subject to normal recurring year-end adjustments, the effect of
which will not have a Material Adverse Effect) and/or (iv) current liabilities
incurred in the ordinary course of Business and in a manner consistent with its
past practices since the date of the Interim Financials.
(c) Guest Supply has not been during the preceding twenty-four (24) months
immediately preceding the execution of this Agreement insolvent within the
meaning of 11 U.S.C. sec.101(31). Guest Supply has paid and is paying its debts
as they become due.
4.9 Sufficiency of Assets. The Assets constitute all the material assets
of any nature with which Guest Supply has conducted the Business for the
preceding twelve (12) month period, subject only to additions and deletions of
inventory and other assets in the ordinary course of Business and in a manner
consistent with its past practices and no other material assets are necessary to
operate the Business in its ordinary course and in a manner consistent with its
past practices. Title to all of the Assets is held solely by Guest Supply, and
except as set forth on Schedule 4.9, all agreements, obligations, expenses and
transactions related to the Business have been entered into, incurred and
conducted on behalf of Guest Supply only by Guest Supply, and no Affiliate of
Guest Supply or any other person or entity owns or has any rights in or to any
of the Assets.
4.10 Deposits. Attached hereto as Schedule 4.10 is a true, correct and
complete list of all security and other deposits, prepayments and prepaid
expenses of Guest Supply as of September 29, 2000 not reflected on the
Historical Financials (collectively, the "Deposits" and individually, a
"Deposit"), setting forth the amount of each Deposit.
4.11 Accounts Receivable; Obligations.
(a) Schedule 4.11(a)(i) is a true, correct and complete list of all
accounts receivable, notes receivable, and other rights to receive payments
("Accounts Receivable") of Guest Supply as of December 31, 2000 showing the
terms and time period for collection thereof, and all such Accounts Receivable
listed thereon are bona fide, arose in the ordinary course of Business and in a
manner consistent with its past practices.
(b) Schedule 4.11(b) is a true, correct and complete list of all
obligations for all indebtedness for borrowed money on the date hereof owed by
Guest Supply and all obligations of Guest Supply in respect of the Business
incurred other than in the ordinary course of Business and in a manner
consistent with its past practices. None of the items set forth on Schedule
4.11(b) is overdue.
4.12 Tax Returns and Payments.
(a) Payment of Taxes and Other Matters. Except as otherwise disclosed in
Schedule 4.12: (i) all Tax Returns, including estimated Tax returns and reports
of every kind with respect to Taxes which are due to have been filed by Guest
Supply on or before the Closing Date in accordance with any applicable law in
all jurisdictions where Guest Supply is subject to Taxes, have been duly filed
and are true, correct and complete in all material respects; (ii) all Taxes,
including estimated tax payments, required to be paid (whether or not shown on a
Tax Return) by Guest Supply on or prior to the Closing Date have been paid in
full; (iii) the unpaid Taxes of Guest Supply attributable to periods ending on
or prior to the Closing Date or the pre-Closing portion of any Tax period ending
after the Closing Date, will not exceed the reserve for such Tax liability
accrued on the Interim Financials; (iv) there are not now any extensions of time
in effect with respect to the dates on which any Tax Returns or reports of Taxes
were or are due to be filed; (v) all deficiencies asserted as a result of any
examination of any Tax Return or report of Taxes by Guest Supply have been paid
in full, accrued or reserved as a Tax liability on the Interim Financials or
finally settled or are the subject of on-going good faith negotiations or
litigation, and no audit or investigation of any Tax Return or report of Taxes
is currently underway, pending, or to the Company's knowledge, threatened; (vii)
there are no outstanding waivers or agreements by Guest Supply for the extension
of time for the assessment of any Taxes or deficiency thereof, nor are there any
notices of proposed reassessment of any property owned or leased by Guest
Supply; (viii) there are no liens for Taxes upon any property or assets of Guest
Supply except liens for current Taxes
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not yet delinquent; (ix) Guest Supply does not have any liability for the Taxes
of any Person under Treas. Reg. sec. 1.1502-6 (or any similar provision of
state, local or foreign law), as transferee or successor, by contract or
otherwise; (x) Guest Supply is not a party to or bound by any tax allocation or
tax sharing agreement and has no contractual obligation to indemnify any other
person with respect to Taxes; (xi) no property of Guest Supply is property that
is "tax-exempt use property" within the meaning of Section 168(h) of the Code;
and (xii) Guest Supply is not required to include in income any adjustment
pursuant to Section 481(a) of the Code by reason of a voluntary change in
accounting method initiated by it, nor has the IRS proposed any adjustment or
change in accounting methods for Guest Supply.
(b) Submission of Tax Returns. Guest Supply has made available to Sysco
copies of all Tax Returns relating to the operations of Guest Supply for the
periods set forth on Schedule 4.12(b).
4.13 Intellectual Property. Schedule 4.13 lists all registered
trademarks, service marks, trade names, service names, copyrights, patents,
applications therefor and licenses and other rights in respect thereof of Guest
Supply that is material to the conduct of the Business (collectively,
"Intellectual Property") used by Guest Supply in the operation of its Business.
Guest Supply owns and/or has a binding and enforceable right to use all of the
Intellectual Property. Upon the consummation of the transactions contemplated
hereby Guest Supply will continue to have the binding and enforceable right to
own and use the Intellectual Property. No claims have been asserted and no
claims are pending or, to the best knowledge of Guest Supply, threatened by any
person or entity, as to the use by Guest Supply of any such Intellectual
Property or challenging or questioning the validity or effectiveness of any
state or federal registration of the Intellectual Property, and Guest Supply
does not know of any valid basis for such claim. Guest Supply's use of the
Intellectual Property and trade secrets and, to the best knowledge of Guest
Supply, Guest Supply's continued use of the same following the Closing in the
same manner as used by Guest Supply prior to Closing, does not, and will not,
infringe on the rights of any person or entity.
4.14 Contracts. Schedule 4.14 sets forth a true, correct and complete
list of all written and oral contracts, agreements, leases and other instruments
to which Guest Supply is a party which involve any of the following
(collectively, the "Contracts"):
(i) projected revenue or expense to Guest Supply in excess of $50,000
annually;
(ii) limitations in any respect on the locations in which Guest Supply
can conduct its Business or restrictions on the lines of business in which
Guest Supply can engage;
(iii) loans to or from (in excess of $1,000 per person) Guest Supply,
including without limitation, any loan agreements, promissory notes,
indentures;
(iv) the payment of cash or other benefit upon the change in control
of the Company;
(v) any joint venture, partnership or other arrangement which involves
the sharing or profits, losses, costs or liabilities;
(vi) calculating the price of an item for one party to the agreement
based on cost of such item to the other party to the agreement;
(vii) any leases for real property of which Guest Supply is a party;
and
(viii) any written employment agreement between any employee of Guest
Supply and Guest Supply.
Prior to execution of this Agreement, Guest Supply has provided or made
available to Sysco true, correct and complete copies of the written Contracts
and accurate descriptions of the terms of oral Contracts. The Contracts are
valid, legally binding and enforceable against Guest Supply, and, to Guest
Supply's knowledge, the other parties thereto, subject to laws of general
application in effect affecting creditors' rights and subject to the exercise of
judicial discretion in accordance with general equitable principles. Neither
Guest Supply nor, to the best knowledge of Guest Supply, any other party to any
of the Contracts is in breach of, or in default under, any of the Contracts and,
no event has occurred which, with the notice or lapse of time, or both,
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would constitute a breach or default by Guest Supply or, to the best knowledge
of Guest Supply, any other party to any of the Contracts.
4.15 Litigation; Judgments.
(a) On the date hereof, except as set forth on Schedule 4.15, there is no
action, proceeding or investigation pending by or before any Governmental
Authority (or, to the best knowledge of Guest Supply, threatened) (i) against
Guest Supply, (ii) against the Company's executive officers or directors in
their capacity as such, nor (iii) seeking to restrain or prohibit or to obtain
damages or other relief in connection with the consummation of the Merger, or
Guest Supply's or Stockholders' ability to consummate the transactions
contemplated by this Agreement and the Transaction Documents. Except as set
forth on Schedule 4.15, neither Guest Supply nor, to its knowledge, the
Stockholders are subject to any judgment, order or decree entered in any lawsuit
or proceeding relating to the Assets or the operation of the Business.
(b) There does not exist under any customer contract of Guest Supply any
basis, regardless of the giving of notice or the lapse of time or both, for a
claim by the customer with respect to how the cost of products is calculated
thereunder or with respect to the method for pricing of products sold to such
customer thereunder ("Cost Plus Contract Claims").
4.16 Insurance. Guest Supply maintains property, fire, casualty, workers
compensation, general liability insurance and other forms of insurance relating
to the operation of the Business against risks of the kind customarily insured
against and in amounts customarily insured. Guest Supply will maintain its
insurance policies in full force and effect through the Closing Date. Schedule
4.16 lists all of the insurance policies maintained by Guest Supply, which
schedule includes the name of the insurance company, the policy number, a
description of the type of insurance covered by such policy, the dollar limit of
the policy, and the annual premiums for such policy. All premiums thereon due
and payable have been paid, and Guest Supply has received no notice of
cancellation with respect thereto. There are no pending or, to the best
knowledge of Guest Supply, threatened, terminations of, or premium increases
with respect to, any of such policies and bonds, and Guest Supply is in
compliance, in all material respects, with all conditions contained therein.
Guest Supply has delivered or made available to Sysco true, complete and correct
copies of all of the above-described insurance policies.
4.17 Employees; Union; Labor. Except as otherwise designated on Schedule
4.17(i), Guest Supply does not use the services of independent contractors as
sales agents or consultants in connection with the Business. Guest Supply is not
a party to any collective bargaining agreement or any other contract, written or
oral, with any trade or labor union, employees' association or similar
organization. There are no strikes or labor disputes with its employees
generally pending or, to the best knowledge of Guest Supply, threatened, or to
the best knowledge of Guest Supply, any attempts at union organization of the
employees of Guest Supply. All salaries and wages paid and withheld by Guest
Supply are and have been in compliance with all applicable foreign, federal,
state and local laws. Schedule 4.17(ii) lists each current employee of Guest
Supply whose aggregate annualized compensation exceeded $50,000 or whose
employment by Guest Supply has ceased for any reasons since January 1, 2000.
4.18 Benefit Plans and ERISA (a) Set forth on Schedule 4.18(a) hereto is
a correct and complete list of each "employee benefit plan" within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and any other bonus, profit sharing, pension, compensation,
deferred compensation, stock option, stock purchase, fringe benefit, severance,
post-retirement, scholarship, disability, sick leave, vacation, individual
employment, commission, bonus, payroll practice, retention or other plan,
agreement, policy, trust fund, arrangement, or understanding (regardless of
whether legally enforceable) (each such plan, agreement, policy, trust fund,
arrangement or understanding is referred to herein as a "Benefit Plan," and
collectively, the "Benefit Plans") that is currently in effect or followed, was
maintained since December 31, 1996, or which has been approved before the date
hereof but is not yet effective, for the benefit of (X) directors or employees
of Guest Supply or any other persons performing services for Guest Supply, (Y)
former directors or former employees of Guest Supply or any other persons
formerly performing services for Guest Supply, and/or (Z) beneficiaries of
anyone described in (X) or (Y) (collectively,
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"Business Employees") or with respect to which Guest Supply or any "ERISA
Affiliate" (hereby defined to include any trade or business, whether or not
incorporated, other than the Company, which has employees who are or have been
at any date of determination occurring within the preceding six years treated
pursuant to Section 4001(a)(14) of ERISA and/or Section 414 of the Code as
employees of a single employer which includes the Company) has or has had any
obligation on behalf of any Business Employee. Guest Supply has delivered or
made available to Sysco copies of all Benefit Plans and all financial
statements, actuarial reports and annual reports and returns filed with the
Internal Revenue Service ("IRS") or Department of Labor ("DOL") with respect to
such Benefit Plans for a period of three years prior to the date hereof and,
except as disclosed on Schedule 4.18(a) attached hereto, there are no other
benefits to which any Business Employee is entitled or for which Guest Supply or
any ERISA Affiliate has any obligation. In addition, except as set forth on
Schedule 4.18(a):
(i) Each Benefit Plan has been operated and administered in material
compliance with its terms;
(ii) Each Benefit Plan complies in all material respects with all
requirements of ERISA and the Code and with all other applicable law;
(iii) Each Benefit Plan intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the Internal
Revenue Service as to its qualification under Section 401(a) of the Code,
which determination letter has not been modified, revoked or limited, and
nothing has occurred or is expected to occur that caused or could cause the
loss of its qualification under Section 401(a) of the Code or the
imposition of any liability, penalty or Tax with respect to such Benefit
Plan. Guest Supply has delivered to Sysco copies of the most recent
determination letter it has received with respect to each Benefit Plan
intended to qualify under Section 401(a) of the Code;
(iv) Neither Guest Supply nor any ERISA Affiliate maintains, sponsors
or contributes to, or has maintained, sponsored or contributed in the past
six years to, any "defined benefit plan" (within the meaning of Section
3(35) of ERISA), any multiemployer plan (within the meaning of Section
3(37) of ERISA) or any voluntary employee beneficiary association intended
to be tax-exempt under Section 501(c)(9) of the Code;
(v) No non-exempt "prohibited transaction" (within the meaning of
Section 4975 of the Code and Section 406 of ERISA) has occurred or is
expected to occur with respect to the Benefit Plans (and the transactions
contemplated by this Agreement will not constitute or directly or
indirectly result in such a "prohibited transaction") which has subjected
or could subject Guest Supply, any ERISA Affiliate or Sysco , or any
officer, director or employee of Guest Supply, any ERISA Affiliate or
Sysco, or the Benefit Plans' trustees, administrators or other fiduciaries,
to a tax or penalty on prohibited transactions imposed by either Section
502 of ERISA or Section 4975 of the Code or any other liability with
respect thereto;
(vi) No provision of any Benefit Plan limits the right of Guest Supply
to amend or terminate any Benefit Plan on no more than 90 days' notice,
subject to the requirements of applicable law;
(vii) All contributions, insurance premiums, Taxes, or other
liabilities or charges with respect to any Benefit Plan required to be paid
on or prior to the Closing Date have been or will be paid in full on or
prior to the Closing Date. All unpaid contributions, insurance premiums,
Taxes, or other liabilities or charges with respect to any Benefit Plan
attributable to periods prior to the Closing Date, including the
pre-Closing portion of any period ending after the Closing Date, have been
accrued and properly reflected as liabilities on Guest Supply's historical
financial statements and Interim Financials. Contributions for purposes of
this Section 4.18(a)(vii) shall include, without limitation, any matching
or employer profit sharing contributions required or customarily made under
a "defined contribution plan" (within the meaning of Section 3(34) of
ERISA) sponsored by Guest Supply;
(viii) Other than claims in the ordinary course for benefits with
respect to the Benefit Plans, there are no actions, suits or claims pending
with respect to any Benefit Plan, or, to Guest Supply's Knowledge, any
circumstances which might give rise to any such action, suit or claim;
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(ix) All reports, returns and similar documents with respect to the
Benefit Plans required to be filed with any governmental agency have been
so filed;
(x) Guest Supply has no obligation to provide health or other welfare
benefits to former, retired or terminated employees, except as specifically
required under Section 4980B of the Code or Section 601 of ERISA. Guest
Supply has complied in all material respects with the notice and
continuation requirements of Section 4980B of the Code and Section 601 of
ERISA and the regulations thereunder;
(xi) Each Benefit Plan that purports to provide benefits that qualify
for tax-favored treatment under Sections 79, 105, 106, 117, 125, 127, 129,
or 132 of the Code complies with the requirements of such Section and the
regulations promulgated thereunder;
(xii) All amendments required to bring the Benefit Plans into
conformity with applicable law, including, without limitation, ERISA and
the Code, have been timely adopted;
(xiii) No Benefit Plan is under audit or investigation by the IRS or
the DOL or any other governmental authority, and no such completed audit,
if any, has resulted in the imposition of any Tax, interest or penalty that
remains unpaid as of the Closing Date;
(xiv) Guest Supply is not subject to any liens, and excise or other
Taxes, under ERISA, the Code or other applicable law relating or with
respect to any Benefit Plan; and
(xv) The Sysco Companies, and from and after the Closing Date, Guest
Supply, shall have no liability for, under, with respect to or otherwise in
connection with any Benefit Plan (assuming a like definition of "Benefit
Plan" were applicable to ERISA Affiliates as to those same types of plans,
agreements, policies, trusts, funds, and arrangements sponsored, maintained
or contributed to by them) sponsored or maintained for the benefit of
employees (and beneficiaries and covered dependents thereof) of any ERISA
Affiliate, excluding Guest Supply, at any relevant time prior to the
Closing Date (other than a liability for providing benefits arising in the
ordinary course of business when ordinarily due under such Benefit Plan),
which liability arises under ERISA or the Code, by virtue of Guest Supply
being aggregated in a controlled group or affiliated service group with any
ERISA Affiliate for purposes of ERISA or the Code at any relevant time
prior to the Closing Date.
(b) Parachute Payments. Set forth on Schedule 4.18(b) is a true, correct
and complete list of each Business Employee, who, as a result of the
consummation of the transactions contemplated by this Agreement, would be
entitled, under any agreement or plan binding on Guest Supply prior to the
Control Date, to: (i) any severance compensation, bonus, increase in
compensation or like benefit, or (ii) any acceleration or vesting of any
benefits or payments (other than the acceleration or vesting of Company Stock
Options) including, without limitation, any Employee Benefits (collectively
"Parachute Benefits"), other than as may be required by law. All of the Business
Employees listed on Schedule 4.18(b) have waived in writing their Parachute
Benefits, effective as of the execution and delivery of this Agreement.
4.19 Brokers Fees and Expenses. Guest Supply has not retained or utilized
the services of any broker, finder or intermediary, other than Xxxxx Xxxxxxx, or
paid or agreed to pay any fee or commission to any person or entity for or on
account of the transactions contemplated hereby, or had any communications with
any person or entity with respect thereto which would obligate Sysco to pay any
such fees or commissions.
4.20 Absence of Material Changes. Except as set forth on Schedule 4.20,
from September 29, 2000 to the date of this Agreement:
(a) there has not been any Material Adverse Effect;
(b) there has been no Material Adverse Effect resulting from Guest
Supply's relations with, nor has Guest Supply lost (or received written
notice that it may lose), any distributors or suppliers with which Guest
Supply has significant business relations;
(c) Guest Supply has operated the Business in the ordinary course and
has not sold, assigned, or transferred any of its Assets, except in the
ordinary course of its Business consistent with past practice;
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(d) Guest Supply has not mortgaged, pledged or subjected to any lien,
pledge, mortgage, security interest, conditional sales contract, or other
encumbrance of any nature whatsoever, any of its Assets;
(e) there has been no amendment, termination, or waiver of any
material right of Guest Supply under any Contract, License or Permit that
reasonably may be anticipated to have a Material Adverse Effect on the
Assets, or the Business;
(f) Guest Supply has not:
(i) paid any judgment resulting from any suit, proceeding,
arbitration, claim or counterclaim filed before any Governmental
Authority or arbitration panel in respect of its Assets or the Business
in excess of $25,000 (provided that all such excluded payments do not
aggregate to more than $100,000);
(ii) made any such payment to any party in settlement of any such
suit, proceeding, arbitration, claim or counterclaim in excess of
$25,000 (provided that all such excluded payments do not aggregate to
more than $100,000);
(iii) written down or failed to write down (in accordance with
generally accepted accounting principles), or written up the value of
any inventory or Assets;
(iv) made any material changes in the customary methods of
operation of the Business, including practices and policies relating to
purchasing, marketing, selling or payment of trade creditors or made any
change in its method of accounting;
(v) incurred any indebtedness or guaranteed any indebtedness
(except in respect of ordinary trade payables), except for borrowings
under existing loans or lines of credit in the ordinary course of
Business and in a manner consistent with its past practices;
(vi) issued or sold any of its stock, notes, bonds or other
securities, or any option, warrant or other rights to purchase the same
except stock issuances upon exercise of outstanding Company Stock
Options, warrants and convertible securities;
(vii) taken any action other than in the ordinary course of
Business and in a manner consistent with its past practices with respect
to increasing the compensation of any employee of Guest Supply in the
Business or with respect to the grant or increase of any severance or
termination pay to any such person (otherwise than as disclosed to Sysco
in writing prior to the date hereof);
(viii) declared, set aside or paid any dividend or distribution
payable in cash, stock, property or otherwise with respect to the
Company's capital stock; or
(ix) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 4.20.
4.21 Bank Accounts; Powers of Attorney. Schedule 4.21(i) is a true,
complete and correct list showing the name and location of each bank or other
institution in which Guest Supply has any account or safe deposit box, together
with a listing of account numbers and the persons authorized to draw thereon or
have access thereto. Schedule 4.21(ii) is a true, complete and correct list of
the persons holding effective general or special powers of attorney from Guest
Supply and description of such power.
4.22 Certain Arrangements. Schedule 4.22 is a true, correct and complete
list of any transaction (other than in respect of employee salary, bonus, or
travel or expense account reimbursement in the ordinary course of Business
consistent with its past practice) that any director, officer, employee,
Stockholder or other Affiliate, or any relative of any director or officer, is a
party to:
(i) any contract, agreement, understanding, commitment or other
arrangement providing for the furnishing of services, or the rental of real
or personal property from or otherwise requiring payments to any such
person (outside of his or her capacity as such director or officer) or to
any such relative of such person; and
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(ii) any loans or advances to or from Guest Supply (exclusive of
travel advances, expense advances, and normal salary advances in connection
with vacation periods, or compensation, or travel or expense account
reimbursement, all in the ordinary course of Business and in a manner
consistent with its past practices), giving for each the principal amount
outstanding, interest rate, maturity date and security therefore.
4.23 Environmental Matters. For purposes of this Agreement: (i)
"Environmental Laws" means the New Jersey Spill Compensation and Control Act,
N.J.S.A. 58:10.23.11, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and all laws,
ordinances, rules, regulations and requirements issued by any Governmental
Authority, as well as any common law doctrines pertaining to environmental,
health, safety or ecological conditions, along with any regulations promulgated
thereunder; and (ii) "Hazardous Material" means (A) any "hazardous substance,"
"hazardous waste" or "hazardous material" defined as such in (or for purposes
of) any Environmental Law; (B) any petroleum product, asbestos-containing
material, urea formaldehyde or PCBs; and (C) any other substance, regardless of
physical form, that is subject to any Environmental Law regulating, or imposing
obligations, liability, or standards of conduct concerning the protection of
human health, plant life, animal life or natural resources. Except as set forth
in the Environmental Reports (as defined below) or on Schedule 4.23:
(i) Neither Guest Supply, nor to the best knowledge of Guest Supply,
any prior owner, user or occupant of the Real Property or any property
formerly owned, leased, or occupied by Guest Supply (collectively, the
"Properties") has conducted or authorized the storage, treatment, or
disposal of any Hazardous Material on the Properties, which, if discovered
or reported, is reasonably likely to give rise to a liability or obligation
on the part of Guest Supply or the Sysco Companies;
(ii) There has been no spill, discharge, release, emission of, or
contamination resulting from any Hazardous Material on, at, under or
migrating to or from any of the Properties, and No Hazardous Material
currently exists on, at, in, under or about any of the Properties, which,
if disclosed or discovered, is reasonably likely to require remediation or
give rise to a claim or liability against Guest Supply or the Sysco
Companies;
(iii) Guest Supply has not received any written or actual notice of
any violation, directive, complaint, suit, order or other notice with
respect to any Environmental Law, the disposal or release of Hazardous
Material from the Properties onto any other property, or that Guest Supply
or the Properties have incurred any liability under any Environmental Law,
and Guest Supply has no knowledge that any such notice is pending,
threatened or otherwise anticipated from any person, including but not
limited to a Governmental Authority;
(iv) There is no pending litigation, investigation or proceeding by
any person, including but not limited to any Governmental Authority, in
which it is alleged that there has been a discharge, spill, disposal or
release of any Hazardous Material or any violation of Environmental Law
with respect to the Properties, nor is Guest Supply aware of any facts or
circumstances that would reasonably lead it to believe that any person or
Governmental Authority would allege any of the foregoing;
(v) There are no written agreements, including but not limited to
Consent Orders or Memoranda of Agreement, between Guest Supply and any
Governmental Authority relating in any way to the presence, spill,
discharge, release, threat of release, storage, treatment or disposal of
any Hazardous Material;
(vi) Other than as provided in Section 3.14 with respect to ISRA,
there are no Environmental Laws applicable to the Properties that would
require Guest Supply to obtain the approval of or provide notice to any
Governmental Authority (which has not been obtained or provided) as a
condition to the consummation of the Merger;
(vii) Guest Supply has owned, leased and operated the Properties in
compliance with all applicable Environmental Laws;
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(viii) Guest Supply and the Business have in full force and effect,
and are in compliance with, all Licenses and Permits required under the
Environmental Laws that are necessary for the operation of the Business;
(ix) Neither Guest Supply nor the Properties has incurred any
liability or obligation, contingent or non-contingent, under the
Environmental Laws or otherwise pertaining to Hazardous Materials that
remains unresolved or has not been complied with so as to bring Guest
Supply or the Properties into compliance with Environmental Law;
(x) Guest Supply has delivered or made available to Sysco true,
correct and complete copies of all reports or tests with respect to the
compliance of the Properties and the Assets with the Environmental Laws
and/or the presence of any Hazardous Material on the Properties that were
(A) prepared for Guest Supply; or (B) prepared for other parties and are in
the possession of Guest Supply (collectively, the "Environmental Reports")
and, to the knowledge of Guest Supply, all such reports and tests contain
no material misstatements or omissions; and
(xi) There are no leaking or non-compliant underground storage tanks
owned or operated by Guest Supply on the Properties, nor to Guest Supply's
knowledge, were there any such leaking or non-compliant tank systems owned
or operated by Guest Supply on any of the Properties.
(xii) Neither Guest Supply nor, to the knowledge of Guest Supply, any
prior owner, user or occupant of the Properties, have filed or otherwise
provided notice to any Governmental Authority under any Environmental Law
of any past or present release or discharge of a Hazardous Material into
the Environment.
(xiii) No risk to human health or the environment exists as a result
of any Hazardous Material previously or currently located on, at, in, under
or about the Properties that is reasonably likely to give rise to a
liability against Guest Supply or the Sysco Companies.
(xiv) Guest Supply has not received any notice, demand, or information
request regarding its alleged disposal of, or arrangement for disposal of,
any Hazardous Materials on any real property not owned by Guest Supply that
is on the USEPA's National Priorities List or the CERCLIS list or any
similar state list, or, to the knowledge of Guest Supply, which is or
reasonably could be the subject of any remedial action by a federal or
state agency or by a third party seeking reimbursement of cleanup expenses
from Guest Supply under federal or state law;
(xv) During Guest Supply's ownership, leasing and/or occupancy of the
Properties, no construction debris or other debris was buried on any of the
Properties, which, if disclosed or discovered, is reasonably likely to
require remediation.
(xvi) No lien, nor any deed notice or use restriction that precludes
the Real Property from being used for their current commercial purposes,
has been issued, filed, or recorded pursuant to any Environmental Law with
respect to the Real Property.
4.24 Unlawful Payments. Neither Guest Supply nor any of its directors,
officers, agents, employees, or other persons associated with or acting on
behalf of Guest Supply has, directly or indirectly:
(i) used any funds of Guest Supply for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to domestic or foreign government
officials or employees, or to domestic or foreign political parties or
campaigns, from corporate funds;
(iii) violated any provision of the Foreign Corrupt Practices Act of
1977, as amended;
(iv) established or maintained any unlawful or unrecorded fund of
Guest Supply monies or other assets;
(v) made any false or fictitious entry on the books or records of
Guest Supply;
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(vi) made any bribe, unlawful rebate, payoff, influence payment,
kickback, or other unlawful payment;
(vii) given any favor or gift which is not deductible for federal
income tax purposes; or
(viii) made any bribe, kickback or other payment of a similar or
comparable nature, whether lawful or not, to any person or entity, private
or public, regardless of form, whether in money, property, or services, to
obtain favorable treatment in securing business or to obtain special
concessions, or to pay for favorable treatment for business secured or for
special concessions already obtained.
4.25 Internet Presence. Schedule 4.25 describes Guest Supply's public,
private or reserved presence on the world wide web, multi-party extranet,
virtual private network, or similar internet based, linked system ("Internet
Presence"). Guest Supply's domain name(s), if any, are currently registered with
the currently authorized Internet Domain Name Registrar and are in good
standing.
4.26 Information Supplied. Neither the Schedule 14D-9, nor any of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Form S-4, the Post-Effective Amendment or the
Offer Documents will, at the respective times any such documents or any
amendments or supplements thereto are filed with the SEC, are first published,
sent or given to Stockholders or become effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Proxy Statement will not, at the time the Proxy Statement is
first mailed to the Stockholders or, at the time of the 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 Schedule 14D-9 and the Proxy Statement will comply as to form in
all material respects with the requirements of all applicable laws, including
the Exchange Act and the rules and regulations thereunder. No representation or
warranty is made by the Company with respect to statements made or incorporated
by reference therein based on information supplied by Sysco or Merger Sub
specifically for inclusion or incorporation by reference therein.
4.27 Books and Records; Deliveries.
(a) Guest Supply has maintained all books and records in the ordinary
course of its Business, in accordance with good business practice, and such
books and records are complete and accurate in all material respects.
(b) The Company has delivered or made available to Sysco , true, correct
and complete copies of all documents listed on or referred to in the Schedules
(other than Schedule 4.15).
4.28 State Takeover Laws. The Offer will not require any filing under the
New Jersey Corporation Takeover Bid Disclosure Law (NJSA 49:5-1 et seq.) in
connection with this Agreement, the Offer or the Merger; provided that the
Company properly discloses the terms of the Offer to the Stockholders, including
the disclosure of all special incentives, inducements and consideration made
available to the officers and directors of the Company that were not made
available to the Stockholders generally. Assuming the representation set forth
in Section 5.12 is true and correct, neither this Agreement, the Offer (any
Subsequent Offer) nor the Merger is prohibited by the New Jersey Shareholders
Protection Act (NJSA 14A:10A-1 et seq.).
4.29 Representations as to Real Property.
(a) Real Property. Schedule 4.29(a)(i) is a true, correct and complete
list of all of the Real Property, to which Guest Supply has fee simple title and
the Real Property which Guest Supply occupies pursuant to a lease.
(b) No Condemnation Proceedings. No condemnation or eminent domain
proceedings are pending or, to the best of Guest Supply's knowledge, threatened
or contemplated against the Real Property, or any part thereof, and Guest Supply
has received no notice, oral or written, of the desire of any public authority
or other
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entity to take or use the Real Property, or any part thereof. Guest Supply will
give Sysco prompt written notice of any actual or, if known to Guest Supply, any
threatened or contemplated condemnation of any part of the Real Property.
(c) Zoning and Use. Except as set forth on Schedule 4.29(c) or Schedule
4.23, there are no outstanding notices or orders of any Governmental Authority
requiring, as of the date hereof or as of a specified or unspecified date in the
future, any repairs or alterations or additions or improvements thereto.
(d) Encroachment. No improvements located on the Real Property owned by
Guest Supply violate any setback requirements or encroach on any adjacent
property and no buildings or other improvements of any kind encroach on the Real
Property owned by Guest Supply.
4.30 Shareholder Rights Plan. The Company Board has taken all actions
necessary to cause the Rights Agreement, to be ineffective as to the Offer, the
Merger and the other transactions described in this Agreement.
4.31 SEC Filings.
(a) The Company has filed all forms, reports and documents required to be
filed by the Company with the SEC since January 1, 1998, and has made available
to Sysco such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that the Company may
file subsequent to the date hereof) are referred to herein as the "Company SEC
Reports." As of their respective dates, the Company SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act, or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Company SEC Reports and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
corrected prior to the date of this Agreement by a subsequently filed Company
SEC Report. None of the Company's Subsidiaries is required to file any forms,
reports or other documents with the SEC.
4.32 Full Disclosure. The representations and warranties made by the
Company in this Agreement and in the Schedules and Exhibits referenced herein do
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances under which they were made, not misleading. Prior to the
Closing, the Company shall promptly notify Sysco and Merger Sub at such time(s)
it becomes aware that any representation or warranty is untrue or misleading in
any material respect.
4.33 Fairness Opinion. The Company has received from Xxxxx Xxxxxxx a
written opinion (the "Fairness Opinion") addressed to the Company Board dated
January 22, 2001, to the effect that, as of the date of such opinion, the
Exchange Ratio (as hereinafter defined) to be received by the Stockholders,
pursuant to this Agreement, is fair to the Stockholders from a financial point
of view, and such opinion has not been modified or withdrawn as of the date
hereof. For purposes of the Fairness Opinion, (a) the "Exchange Ratio" is
defined as the Offer Exchange Ratio and the Merger Exchange Ratio, (b) the
"Offer Exchange Ratio" is defined as (i) if the Average Sysco Offer Price is
greater than or equal to $22.00 per share and less than or equal to $30.00 per
share, a number of Sysco Shares per share of Common Stock equal to $26.00
divided by the Average Sysco Offer Price, (ii) if the Average Sysco Offer Price
is less than $22.00, 1.1818 Sysco Shares per share of Common Stock and (iii) if
the Average Sysco Offer Price is greater than $30.00, 0.8667 Sysco Shares per
share of Common Stock and (c) the "Merger Exchange Ratio" is defined as (i) if
the Average Sysco Merger Price is greater than or equal to $22.00 per share and
less than or equal to $30.00 per share, a number of Sysco Shares per share of
Common Stock equal to $26.00 divided by the Average Sysco Merger Price, (ii) if
the Average Sysco Merger Price is less than $22.00, 1.1818 Sysco Shares per
share of Common Stock and (iii) if the Average Sysco Merger Price is greater
than $30.00, 0.8667 Sysco Shares per share of Common Stock.
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4.34 Inventory. Guest Supply's inventory, net of reasonable (in
accordance with GAAP) reserves, consists of Salable (defined below) inventory of
a quality and quantity generally maintained and sold in the ordinary course of
Business and in a manner consistent with its past practices. For purposes
hereof, inventory is "Salable" only if it (including its packaging) is in the
physical condition to be sold to customers in the ordinary course of Business
and in a manner consistent with its past practices and in accordance with
industry standards and applicable government regulations; provided, however,
that "Salable" inventory does not include:
(a) any item whose supplier notifies any of the parties hereto prior
to the Closing that such item may not be distributed following Closing;
(b) any items which are private label products for customers who
immediately prior to the Closing are no longer customers of Guest Supply to
the extent such products are not otherwise salable (after appropriate but
non-material modifications) to other customers at prices comparable to the
pricing for the products as generally prepared;
(c) items which are, pursuant to industry or Governmental Authority
standards, out of date (or perishable product in excess, in days supply, of
the normal shelf life of such product); or
(d) items of obsolete inventory.
4.35 Immigration Matters.
(a) With respect to all current employees (as defined in Section 274a.1(g)
of Title 8, Code of Federal Regulations) of Guest Supply, true and complete
copies of all Forms I-9 (Employment Eligibility Verification Forms) completed
pursuant to the Immigration Reform and Control Act of 1986, as amended, and all
regulations promulgated thereunder ("IRCA"), and any and all copies of
documentation, records or other papers retained with Forms I-9 (Employment
Eligibility Verification Forms), have been made available to Sysco. Guest Supply
has complied with IRCA with respect to the completion of Forms I-9 for all
employees and the reverification of the employment status of any and all
employees whose employment authorization documents indicated a limited period of
employment authorization.
(b) With respect to all former employees who left Guest Supply's employment
within three (3) years prior to Closing, Guest Supply has complied with IRCA
with respect to the maintenance of Forms I-9 for at least three (3) years or for
one (1) year beyond the date of termination, whichever is later.
(c) The Company has made available true and correct information with
respect to all employees of Guest Supply working under INS authorization in E,
F, H, J, L, M, O, P, or TN Visa Status. The Company maintains current files
containing all Labor Condition Application (LCA) related public and non-public
access documentation which it must present upon request by the DOL or the
general public, including but not limited to all documentation noted in 20 CFR
sec.655.760.
(d) Guest Supply has not had immigration violations, nor has it employed
individuals not authorized to work in the United States. Guest Supply has never
been the subject of any inspection or investigation relating to its compliance
with or violation of the Immigration and Nationality Act, 8 U.S.C. 1101 ("INA")
or IRCA, nor has it been warned, fined or otherwise penalized by reason of any
failure to comply with INA or IRCA, nor is such proceeding pending or
threatened.
(e) The consummation of the transactions contemplated by this Agreement
will not give rise to any liability for the failure to properly complete,
maintain and update Forms I-9, or give rise to any liability for the employment
of individuals not authorized to work in the United States, or cause any current
employee to become unauthorized to work in the United States.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SYSCO
In order to induce the Company to enter into this Agreement and consummate
the transactions contemplated hereby, Sysco and Merger Sub hereby make the
following representations and warranties to the Company, each of which
representations and warranties is relied upon by the Company:
5.1 Organization of Sysco and Merger Sub. Sysco and Merger Sub are
corporations duly organized and validly existing under the laws of the State of
Delaware and each has the corporate power and authority to own its respective
properties and to carry on its respective businesses as now being conducted by
it.
5.2 Power and Authority; Due Authorization. Sysco and Merger Sub have
full power and authority to execute and deliver this Agreement and each of the
agreements, documents and instruments referenced in this Agreement to which
Sysco or Merger Sub is or will be a party ("Sysco Companies' Transaction
Documents") and to consummate the transactions contemplated hereby and thereby.
The Boards of Directors of Sysco and Merger Sub have duly approved and
authorized the execution and delivery of this Agreement and each of the Sysco
Companies' Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and no other corporate proceedings or approvals
on the part of Sysco and Merger Sub are necessary to approve and authorize the
execution and delivery of this Agreement and the Sysco Companies' Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby. Assuming that this Agreement and each of the Sysco Companies'
Transaction Documents constitutes a valid and binding agreement of the Company,
this Agreement and each of the Sysco Companies' Transaction Documents
constitutes, or will constitute when executed and delivered, a valid and binding
agreement of Sysco and Merger Sub, in each case enforceable against Sysco and
Merger Sub in accordance with its terms, subject to laws of general application
in effect affecting creditors' rights and subject to the exercise of judicial
discretion in accordance with general equitable principles.
5.3 No Conflict. Assuming all consents, approvals, authorizations, and
other actions listed on Schedule 5.3 have been obtained or taken prior to the
date hereof or Closing as indicated thereon, the execution and delivery by Sysco
and Merger Sub of this Agreement, the Sysco Companies' Transaction Documents and
the consummation by Sysco and Merger Sub of the transactions contemplated hereby
and thereby do not and will not (a) require the consent, approval or action of,
or any filing or notice to, any corporation, firm, person or other entity or any
public, governmental or judicial authority; (b) violate the terms of any
instrument, document or agreement to which Sysco or Merger Sub is a party, or by
which Sysco or Merger Sub or the properties of Sysco or Merger Sub is bound, or
be in conflict with, result in a breach of or constitute (upon the giving of
notice or lapse of time, or both) a default under any such instrument, document
or agreement; (c) violate Sysco's or Merger Sub's Certificate of Incorporation
or Bylaws; or (d) violate any order, writ, injunction, decree, judgment, ruling,
law or regulation of any Governmental Authority applicable to Sysco or Merger
Sub, or the business or assets of Sysco or Merger Sub.
5.4 Brokers Fees and Expenses. Neither Sysco nor Merger Sub has retained
or utilized the services of any broker, finder, or intermediary, or paid or
agreed to pay any fee or commission to any person or entity for or on account of
the transactions contemplated hereby, or had any communications with any person
or entity which would obligate Guest Supply to pay any such fees or commissions.
5.5 Offer Consideration and Merger Consideration. The Sysco Shares, when
issued and delivered to the Stockholders pursuant to the Offer or the Merger, as
the case may be, in accordance with this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable shares of Sysco Common Stock. Upon
delivery of the Sysco Shares, Stockholders will receive good and unencumbered
title to the Sysco Shares, free and clear of all liens, restrictions, charges,
encumbrances and other security interests of any kind or nature whatsoever,
except for restrictions existing under applicable securities laws regarding
transferability of the Sysco Shares and the restrictions imposed in this
Agreement. Sysco shall use commercially reasonable efforts to cause the Sysco
Shares to be approved for listing on the New York Stock Exchange ("NYSE"),
subject to official notice of issuance prior to the delivery of the Shares to
the Stockholders.
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5.6 Information Supplied. Neither the Offer Documents, the Form S-4 or
the Post-Effective Amendment, nor any of the information supplied or to be
supplied by Sysco or its representatives for inclusion or incorporation by
reference in the Schedule 14D-9 or the Proxy Statement will, at the respective
times any such documents or any amendments or supplements thereto are filed with
the SEC, are first published, sent or given to the Stockholders or become
effective under the Securities Act or, in the case of the Proxy Statement, at
the time of the Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Offer Documents the
Form S-4 and the Post-Effective Amendment will comply as to form in all material
respects with the requirements of all applicable laws, including the Securities
Act and the Exchange Act, as applicable, and the rules and regulations
thereunder. No representation or warranty is made by Sysco or Merger Sub with
respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
5.7 SEC Filings. (a) Sysco has filed all forms, reports and documents
required to be filed by Sysco with the SEC since January 1, 1998, and has made
available to the Company such forms, reports and documents in the form filed
with the SEC. All such required forms, reports and documents (including those
that Sysco may file subsequent to the date hereof) are referred to herein as the
"Sysco SEC Reports." As of their respective dates, the Sysco SEC Reports (i)
were prepared in accordance with the requirements of the Securities Act, or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Sysco SEC Reports and (ii) did not at the time
they were filed (or if amended of superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement or
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
corrected prior to the date of this Agreement by a subsequently filed Sysco SEC
Report.
5.8 Absence of Certain Changes or Events. Except as disclosed in the
Sysco SEC filed and publicly available prior to the date of this Agreement,
there has not been any event, occurrence or development of a state of
circumstances that has had or could reasonably be expected to have a material
adverse effect on Sysco and its subsidiaries taken as a whole.
5.9 Financial Information. Prior to the date hereof, Sysco has delivered
to the Company copies of the unaudited consolidated statement of earnings of
Sysco dated as of December 30, 2000 for the thirteen (13) week and twenty-six
(26) week periods then ended (collectively, the "Sysco Historical Financials").
The Sysco Historical Financials have been prepared in accordance with GAAP
(except for the absence of footnotes required by GAAP) and fairly present in all
material respects the consolidated statement of earnings of Sysco for the
periods then ended.
5.10 Brokers' Fees and Expenses. Neither Sysco nor Merger Sub has
retained or utilized in the services of any broker, finder or intermediary, or
paid or agreed to pay any fee or commission to any person or entity for or on
account of the transactions contemplated hereby, or had any communications with
any person or entity with respect thereto, which, in any case, obligate Guest
Supply to pay any such fees or commissions.
5.11 Full Disclosure. Except as disclosed in the Sysco SEC Reports filed
and publicly available prior to the date of this Agreement, since September 30,
2000, there has not been any event, occurrence or development or a state of
circumstances that has had or could reasonably be expected to have a material
adverse effect on the financial condition or results of operations of Sysco.
Copies of all documents with respect to Sysco or its ongoing business or
financial condition which have been delivered or made available to the Company
are true, correct and complete copies thereof.
5.12 No Ownership of Company Capital Stock. As of the date hereof,
neither Sysco nor Merger Sub owns any shares of Common Stock or has the right to
acquire any equity interest in the Company other than pursuant to this
Agreement.
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ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party under this Agreement to effect the
Merger shall be subject to the fulfillment, on or prior to the Closing, of each
of the following conditions, unless and to the extent any such condition is
expressly waived in writing by Sysco, Merger Sub or the Company, as the case may
be:
6.1 Shareholder Approval. If required by the NJBCA, this Agreement and
the Merger shall have been approved and adopted by the requisite votes of the
Stockholders.
6.2 Purchase of Shares in the Offer. Merger Sub shall have accepted for
exchange all of the Shares tendered pursuant to the Offer unless the failure to
consummate the Offer is the result of a willful and material breach of this
Agreement by the party asserting such condition.
6.3 No Government Action. There shall not be pending any action or
proceeding before any Governmental Authority by any Government Authority in
which it is sought to restrain or prohibit the transactions contemplated by this
Agreement.
6.4 No Illegality. No federal or state statute, rule, regulation or
injunction shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which is in effect and has the effect of making
the transactions contemplated hereby illegal or otherwise prohibiting the
consummation of the transactions contemplated hereby.
6.5 Form S-4. Form S-4 or the Post-Effective Amendment, as the case may
be, shall have become effective under the Securities Act and shall not be the
subject of any stop order or proceeding seeking a stop order, if any.
6.6 NYSE Listing. The shares of Sysco Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
6.7 Fairness Opinion. Xxxxx Xxxxxxx shall have delivered the Fairness
Opinion to the Company Board and such Fairness Opinion shall not have been
modified or withdrawn prior to the payment for the Shares in the Offer.
ARTICLE 7
TERMINATION; TERMINATION FEES
7.1 Termination. This Agreement may be terminated (and, in the case of
subsection (h) below, shall be terminated) at any time before the Closing Date
(notwithstanding any approval of the Merger and adoption of this Agreement by
the Stockholders):
(a) by mutual written consent of Sysco and the Company; or
(b) by Sysco if, prior to the acceptance for payment of any Shares
under the Offer, (i) there occurs in respect of the Company or the
Business, a Material Adverse Effect or (ii) there has been a breach by the
Company of any representation, warranty, covenant or agreement contained in
this Agreement that is not curable and such breach would give rise to a
failure of the condition set forth in (a) or (b) of Annex A hereof; in
either case provided that Sysco is not then in breach in any material
respect of any of its obligations under this Agreement; or
(c) by the Company if, prior to the acceptance for payment of any
Shares under the Offer, (i) there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement
on the part of Sysco, provided that the Company is not then in breach in
any material respect of any of its obligations under this Agreement; or
(d) by the Company or Sysco (only if no Shares were purchased by
Merger Sub pursuant to the Offer) if the Merger has not been consummated by
August 31, 2001, provided that the party seeking to
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exercise such right is not then in breach in any material respect of any of
its obligations under this Agreement;
(e) by either Sysco or the Company if a Stockholders Meeting is
required under the NJBCA and the Merger shall fail to receive the requisite
vote for approval at the Stockholders Meeting; or
(f) by the Company, prior to acceptance for payment of any Shares
under the Offer, in order to enter into a definitive written agreement with
respect to an Alternative Transaction with a Third Party, provided that,
prior to entering into such definitive agreement, the Company shall have
given Sysco notice of such Alternative Transaction as required by Section
3.5 and is otherwise not prohibited by Section 3.5 from entering into such
agreement;
(g) by Sysco if a Triggering Event shall have occurred.
For purposes of this Agreement, a "Triggering Event" shall be deemed
to have occurred if, (i) the Company Board or any committee thereof shall
have approved or recommended to the Stockholders any Alternative
Transaction, (ii) the Company Board or any committee thereof shall for any
reason have withdrawn or shall have amended or modified in a manner adverse
to Sysco the Company Recommendations; (iii) the Company shall have failed
to include in the Offer Documents, the Schedule 14D-9 or the Post-Effective
Amendment the Company Recommendations; or (iv) a tender or exchange offer
relating to 40% or more of the Shares shall have been commenced by a person
unaffiliated with Sysco, and Company shall not have sent to its
Stockholders pursuant to Rule 14e-2 promulgated under the Securities Act,
within 10 business days after such tender or exchange offer is first
published sent or given, a statement disclosing that the Company recommends
rejection of such tender or exchange offer.
(h) This Agreement shall automatically terminate, without any action
on the part of Sysco, Merger Sub or the Company, if there shall be validly
tendered at the Final Expiration Date such number of Shares which, when
added to the Shares, if any, owned by Sysco or Merger Sub, would constitute
less than thirty five percent (35%) of the Shares outstanding on a fully
diluted basis.
Sysco shall not have the right to terminate this Agreement as a result
of or arising out of any action taken by the Company or its officers,
directors, employees, investment bankers, representatives or agents in
connection with the contested proxy solicitation involving the Company's
2001 Annual Meeting of Stockholders that is not in breach of any provision
hereof.
7.2 Effect of Termination.
(a) Termination Fee. The Company shall pay to Sysco in cash the sum of
$5,500,000 ("Termination Fee") plus all reasonable out-of-pocket fees and
expenses incurred by Sysco in connection with this Agreement, including, without
limitation, all filing fees with all Governmental Authorities, reasonable
out-of-pocket legal fees and expenses incurred by Sysco for accounting advice
and environmental due diligence if:
(i) within four (4) months after the date of this Agreement, the
Company receives a proposal for an Alternative Transaction (including the
commencement of a tender offer made directly to the Stockholders) from any
person or entity (other than Sysco or its Affiliates) and such Alternative
Transaction (including such tender offer) is consummated within twelve (12)
months after the date of this Agreement (a "Covered Alternative
Transaction"); or
(ii) (A) this Agreement is terminated by the Company pursuant to
Section 7.1(f), or (B) this Agreement is terminated by Sysco pursuant to
Section 7.1(g).
(b) Timing of Payment of Termination Fee. The Termination Fee shall be due
and payable to Sysco within ten (10) days of the first to occur of (i) the
consummation of a Covered Alternative Transaction and (ii) the events set forth
in Section 7.2(a)(ii).
(c) Effect of Termination. Termination of this Agreement pursuant to
Section 7.1 shall terminate all obligations and liabilities of the parties to
each other hereunder, except for the obligations under Sections 3.6, 3.8,
7.2(a), 7.2(b) and 8.14 hereof.
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(x) Sole and Exclusive Remedy. Each party hereto acknowledges and agrees
that such party's sole and exclusive remedy with respect to any losses,
liabilities, costs, expenses or damages of any kind and all claims for any
breach or liability under this Agreement or otherwise relating to the subject
matter hereof and the transactions contemplated hereby shall be solely in
accordance with, and limited by, Section 7.1, subsections (a), (b) and (c) of
Section 7.2 and Section 8.17 hereof, provided, however, if all conditions to the
obligations to the applicable party hereto at Closing contained in Article 6,
Annex A or Annex B, as applicable, have been satisfied (or waived by the party
entitled to waive such conditions) and such party does not proceed with the
Closing, all remedies available to the other party, at law or in equity, on
account of such failure to close, shall be preserved including, without
limitation, specific performance. Without limiting the generality of the
foregoing, the parties hereto agree that the payment provided for in Section
7.2(a) shall be the sole and exclusive remedy of Sysco and the Merger Sub upon
termination of this Agreement under the circumstances set forth in Section
7.2(a) and such remedies shall be limited to the sum stipulated in Section
7.2(a) regardless of the circumstances (including willful or deliberate conduct)
giving rise to such termination. The provisions of this Section 7.2 shall
survive any termination of this Agreement.
ARTICLE 8
MISCELLANEOUS PROVISIONS
8.1 Risk of Loss. The risk of loss occurring with respect to Guest Supply
prior to the Closing shall remain the liability of Guest Supply.
8.2 Severability. If any provision of this Agreement is prohibited by the
laws of any jurisdiction as those laws apply to this Agreement, that provision
shall be ineffective to the extent of such prohibition and/or shall be modified
to conform with such laws, without invalidating the remaining provisions hereto.
8.3 Modification and Waiver. This Agreement may not be changed or
modified except in writing specifically referring to this Agreement and signed
by the Sysco, Merger Sub, and Guest Supply. No change, amendment or attempted
waiver of any provision hereof shall be binding on the other parties unless
reduced to writing and signed by Sysco, Merger Sub, and Guest Supply. Unless
specifically provided otherwise herein or agreed to by Sysco, Merger Sub, and
Guest Supply in writing, no modification, waiver, termination, rescission,
discharge or cancellation of this Agreement shall affect the right of the
parties hereto to enforce any claim, whether or not liquidated, which accrued
prior to the date of such modification, waiver, termination, rescission,
discharge, or cancellation of this Agreement, and no waiver of any provision or
of any default under this Agreement shall affect the right of any party to
enforce such provision or to exercise any right or remedy in the event of any
other default, whether or not similar.
8.4 Assignment, Survival and Binding Agreement. This Agreement, the
Transaction Documents and the Sysco Companies' Transaction Documents may not be
assigned by any party hereto without the prior written consent of the other
parties, provided that Sysco may assign this Agreement in whole or in part to
one or more wholly-owned subsidiaries without the consent of Guest Supply (but
no such assignment shall relieve Sysco of its obligations hereunder). The terms
and conditions hereof shall survive the Closing and shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
8.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, with the same effect as
if the signatures thereto were in the same instrument. This Agreement shall be
effective and binding on all parties when all parties have executed and
delivered a counterpart of this Agreement.
8.6 Notices. All notices, requests, demands, claims or other
communications hereunder will be in writing and shall be deemed duly given if
personally delivered, sent by telefax, or sent by a recognized overnight
delivery service which guarantees next day delivery ("Overnight Delivery") or
mailed registered or certified mail, return receipt requested, postage prepaid,
transmitted or addressed to the intended recipient as set forth below:
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39
If to the Company: Guest Supply, Inc.
0000 X.X. Xxxxxxx Xxx
Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telefax: (000) 000-0000
with copies to: (1) Xxxxxx X. Xxxxxx, Esq.
General Counsel
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telefax: (000) 000-0000
and
(2) Xxxxxxx X. Cost, Esq
Torys
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telefax: (000) 000-0000
If to the Sysco or Merger Sub: Sysco Corporation
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telefax: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxx, Esq.
Xxxxxx Xxxxxx Xxxxxxx LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telefax: (000) 000-0000
or at such other address as any party hereto notifies the other parties hereof
in writing. The parties hereto agree that notices or other communications that
are sent in accordance herewith (i) by personal delivery or telefax, will be
deemed received on the day sent or on the first business day thereafter if not
sent on a business day, (ii) by Overnight Delivery, will be deemed received on
the first business day immediately following the date sent, and (iii) by U.S.
mail, will be deemed received three (3) business days immediately following the
date sent.
8.7 Entire Agreement; No Third Party Beneficiaries. This Agreement,
together with the Exhibits, and Schedules referenced herein, constitutes the
entire agreement and supersedes any and all other prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof and, except as otherwise expressly provided
herein, is not intended to confer upon any person other than Sysco, Guest Supply
and, after the Closing Date, the Stockholders, any rights or remedies hereunder.
8.8 Further Assurances. The parties to this Agreement agree to execute
and/or deliver, both before and after Closing, any additional information,
documents or agreements contemplated hereby and/or necessary or appropriate to
effect and consummate the transactions contemplated hereby. Subject to Section
3.8 hereof, Guest Supply agrees to provide to Sysco before the Closing such
information as Sysco may reasonably request in order to consummate the
transactions contemplated hereby and to effect an orderly transition of the
Business following Closing.
8.9 Construction. Within this Agreement the singular shall include the
plural and the plural shall include the singular and any gender shall include
all other genders, all as the meaning and context of this
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40
Agreement shall require. In connection with any action or event which by the
terms hereof requires consent of a party hereto, such consent shall not be
unreasonably withheld or delayed.
8.10 Choice of Law. This Agreement and all documents executed in
connection therewith shall be governed by, and construed in accordance with, the
laws of the State of New Jersey, regardless of the laws that might otherwise
govern under applicable principles of conflict of laws thereof.
8.11 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 New Jersey or any New Jersey state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of New Jersey or a New Jersey state court.
8.12 Schedules and Exhibits; Sections and Articles. All Schedules and
Exhibits referenced in this Agreement, whether or not attached hereto, shall be
deemed to be a part of this Agreement, and this Agreement shall be construed in
accordance therewith.
8.13 Definition of Days. For purposes of this Agreement, a "business day"
is a day on which banks in the New York, New York are open for business but
shall not include a Saturday or Sunday or federal holiday. Notwithstanding
anything to the contrary in this Agreement, no action shall be required of the
parties hereto except on a business day and in the event an action is required
on a day which is not a business day, such action shall be required to be
performed on the next succeeding day which is a business day. All references to
"day" or "days" shall mean calendar days unless specified as a "business day."
8.14 Expenses. Except as otherwise set forth in Section 7.2(a), each
party will pay its own legal, accounting and other expenses incurred by such
party or on its behalf in connection with this Agreement and the transactions
contemplated herein.
8.15 Defined Terms.
(a) The best knowledge. As used herein, the terms "the best knowledge of
Guest Supply" or "the best knowledge of the Company" or "the knowledge of Guest
Supply" or "the knowledge of the Company" or words of similar import shall mean
the actual knowledge of either of the CEO/President or the Vice President of
Finance on the date of this Agreement or on the Closing Date.
(b) Affiliate. As used herein, the term "Affiliate" shall have the meaning
set forth in Rule 144 promulgated under the Securities Act.
8.16 Survival. The representations and warranties of Sysco, Merger Sub
and the Company contained in this Agreement shall survive until the earlier to
occur of (i) the termination of this Agreement, or (ii) the third anniversary of
the date hereof.
8.17 Injunctive Relief. In the event of a breach or threatened breach by
any party hereto of any of its covenants or other obligations hereunder,
including, without limitation, the parties' respective obligations to close the
transactions contemplated hereby, each of the parties hereby consents and agrees
that the non-breaching party shall be entitled to an injunction or similar
equitable relief restraining the breaching party(s) from committing or
continuing any such breach or threatened breach or granting specific performance
of any act required to be performed by the breaching party(s) under any such
provision, without the necessity of showing any actual damage or that money
damages would not afford an adequate remedy and without the necessity of posting
any bond or other security.
* * *
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41
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement under seal as of the date first written above.
GUEST SUPPLY:
GUEST SUPPLY, INC.
By: /s/ XXXXXXXX X. XXXXXXX
------------------------------------
Print Name: Xxxxxxxx X. Xxxxxxx
------------------------------------
Title: President
------------------------------------
SYSCO:
SYSCO CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Print Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
MERGER SUB:
SYSCO FOOD SERVICES OF NEW
JERSEY, INC.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Print Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: President
------------------------------------
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SCHEDULE I
DOCUMENTS EXECUTED PRIOR TO OR SIMULTANEOUS WITH SIGNING OF MERGER AGREEMENT
1. Employment Agreements (including termination of prior Employment
Agreements)
- Xxxxxxxx X. Xxxxxxx
- Xxxx X. Xxxxx
- Xxxxxx X. Xxxxx
2. Severance Payment Waivers
- Xxxxxxxx X. Xxxxxxx
- Xxxx X. Xxxxx
- Xxxxxx X. Xxxxx
3. Employment Amendment and Waiver of Severance Payment
- Xxxx X. Xxxxxxxx
4. Non Compete of Xxxxxxxx Xxxxxxx
5. Non Compete of Xxxx X. Xxxxx
6. Torys Opinion
7. Xxxxxx Xxxxxx Xxxxxxx LLP Opinion
8. Opinion of Xxxxxx Xxxxxxxx, LLP
9. Fairness Opinion
10. Secretary's Certificates re: Charter, Bylaws, Incumbency and Certified
Resolutions
11. Amendment No. 2 to Rights Agreement
12. Waiver of Reload Provision of Options under 1993 Option Plan
- Xxxxxx X. Xxxxx
- Xxxxxx X. Xxxxxxxx
- Xxxxxx X. Xxxxx
- Xxxxxx X. Xxxxxx
- Xxxxxxxx X. Xxxxxxx
- Xxxx X. Xxxxx
- Xxxx X. Xxxxxxxx
13. Tender Agreement
- Xxxxxxxx X. Xxxxxxx
- Xxxx X. Xxxxx
- Xxxxxx X. Xxxxx
- Xxxxxx X. Xxxxx
- Xxxxxx X. Xxxxxxxx
- Xxxxxx X. Xxxxxx
- Xxxx X. Xxxxxxxx
14. Amendment to General Counsel Agreement
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APPENDIX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the terms of
this Agreement, Merger Sub shall not be required to accept for exchange or
exchange or deliver any shares of Sysco Common Stock (or in the case of
fractional shares, cash) for (subject to any applicable rules and regulations of
the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Merger
Sub's obligation to pay for or return tendered Shares after the termination or
withdrawal of the Offer)) any Shares tendered, if by the expiration of the Offer
(as it may be extended in accordance with the requirements of Section 1.1), (1)
the Minimum Condition shall not have been satisfied, (2) the applicable waiting
period under the HSR Act and any other applicable antitrust laws shall not have
expired or been terminated, (3) the Form S-4 shall not have become effective
under the Securities Act or shall be the subject of any stop order or
proceedings seeking a stop order, (4) the shares of Sysco Common Stock to be
issued in the Offer and the Merger shall not have been approved for listing on
the NYSE, subject to official notice of issuance, or (5) any of the following
conditions exist:
(a) The representations and warranties of the Company set forth in
this Agreement that are qualified as to "materiality," "in all material
respects," "Material Adverse Effect" or similar qualifier or threshold
shall not be true and correct as of the date of this Agreement and as of
the expiration of the Offer (including any extension thereof) (except to
the extent expressly made as of an earlier date, in which case as of such
date), or any of the representations and warranties set forth in this
Agreement that are not so qualified shall not be true and correct in all
material respects as of the date of this Agreement and as of the expiration
of the Offer (except to the extent expressly made as of an earlier date, in
which case as of such date); provided that this condition shall not be
deemed to have been satisfied unless any such breaches of representation
and warranty (without regard to any "materiality," "in all material
respects," "Material Adverse Effect" or similar qualifier or threshold),
individually or in the aggregate, have had a Material Adverse Effect.
(b) The Company shall have failed to perform and comply with all
agreements, conditions and obligations required by this Agreement to be
performed or complied with by it prior to or at the expiration of the Offer
and such failure has had a Material Adverse Effect.
(c) There shall be pending any action or proceeding before any
Governmental Authority in the United States by any Governmental Authority
in the United States in which it is sought to restrain or prohibit the
transactions contemplated by this Agreement.
(d) There shall exist any Material Adverse Effect.
(e) Any federal or state statute, rule, regulation, injunction, order
or decree shall have been enacted, entered, promulgated or enforced by any
Governmental Authority in the United States, Canada or England which is in
effect and has the effect of making the transactions contemplated hereby
illegal or otherwise prohibiting the consummation of the transactions
contemplated hereby.
(f) This Agreement has been terminated in accordance with Section 7.1
hereof.
(g) The Company shall not have obtained the ISRA Approvals.
(h) The Fairness Opinion shall have been modified or withdrawn.
(i) The Company shall not have delivered the Guest Supply S-4 Comfort
Letter to Sysco.
(j) The Company shall not have caused an opinion of counsel to the
Company to be delivered to Sysco substantially in the form of Schedule
A(j).
(k) The Company shall not have delivered to Sysco a certificate signed
by an authorized officer on behalf of the Company certifying that the
conditions set forth in subsections (a) and (b) of this Annex A do not
exist on the date of the acceptance for payment of the Shares in the Offer.
44
The foregoing conditions are for the sole benefit of Sysco and Merger Sub
and may be asserted by Sysco regardless of the circumstances (including any
action or omission by Sysco or Merger Sub, other than a material and willful
breach by Sysco or Merger Sub of this Agreement) giving rise to any such
condition or (other than the Minimum Condition and subsections (f) and (h)
above) may, subject to the terms of this Agreement, be waived by Sysco and
Merger Sub in their sole discretion in whole at any time or in part from time to
time. The failure by Sysco or Merger Sub at any time to exercise its rights
under any of the foregoing conditions shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right which may be
asserted at any time or from time to time.
00
XXXXXXXX X
TERMINATION OF OFFER
In accordance with Section 1.14 of this Agreement, in the event the Offer
is terminated pursuant to Section 1.1(c), this Agreement shall be deemed amended
to incorporate the following terms and conditions without any further action by
Sysco, Merger Sub or the Company:
Section 1. Article 6 shall be amended and restated in its entirety as
follows:
"ARTICLE 6
CONSUMMATION OF THE MERGER
The obligation of Sysco and Merger Sub under this Agreement to effect the
Merger shall be subject to the fulfillment, on or prior to the Closing, of each
of the following conditions, unless and to the extent any such condition is
expressly waived in writing by Sysco:
6.1 Representations and Warranties True at Closing. The representations
and warranties of the Company set forth in this Agreement that are qualified as
to "materiality," "in all material respects," "Material Adverse Effect" or
similar qualifier or threshold shall be true and correct as of the date of this
Agreement and as of the Closing Date (except to the extent expressly made as of
an earlier date, in which case as of such date), and the representations and
warranties set forth in this Agreement that are not so qualified shall be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date (except to the extent expressly made as of an earlier date, in
which case as of such date); provided that this condition shall be deemed to
have been satisfied unless any such breaches of representation and warranty
(without regard to any "materiality," "in all material respects," "Material
Adverse Effect" or similar qualifier or threshold), individually or in the
aggregate, have had a Material Adverse Effect.
6.2 Obligations Performed. The Company shall have performed and complied
with all agreements, conditions and obligations required by this Agreement to be
performed or complied with by it prior to or at the Closing except for any
failures which would not have a Material Adverse Effect.
6.3 Consents. The Company shall have obtained and delivered to Sysco
written consents of all persons or entities listed on Schedule 4.4 and
designated by an asterisk and all of such consents shall remain in full force
and effect at and as of the Closing.
6.4 Closing Deliveries. The Company shall have executed (where
applicable) and delivered to Sysco the following:
(i) a certified copy of the corporate resolutions of the Company Board
and Stockholders authorizing and approving the Merger and the execution,
delivery and performance by the Company of this Agreement and all other
documents, instruments and agreements contemplated by this Agreement to be
executed, delivered or performed by the Company, together with an
incumbency certificate with respect to officers of the Company executing
documents or instruments on behalf of the Company;
(ii) a certificate of the President of the Company certifying as to
the matters set forth in Sections 6.1, 6.2 and 6.3 hereof and as to the
satisfaction in all material respects of all other covenants of the Company
set forth in this Agreement;
(iii) an opinion of counsel to the Company substantially in the form
of Schedule B-6.4(iii);
(iv) the Certificates of Merger duly executed by the Company;
(v) Good Standing Certificates issued by the Secretary of State for
the states in which the Company is either organized or qualified as a
foreign corporation certifying that the Company is in
46
good standing as a corporation (or applicable entity) under the laws of
said states, such certificates to be in form and substance acceptable to
Sysco and Merger Sub; and
(vi) evidence reasonably satisfactory to Sysco that the Company has
obtained the ISRA Approvals.
6.5 No Challenge. There shall not be pending any action or proceeding
before any Governmental Authority in the United States by any Governmental
Authority in the United States in which it is sought to restrain or prohibit the
transactions contemplated by this Agreement.
6.6 No Material Adverse Effect. There shall not exist any Material
Adverse Effect.
6.7 Legality. No federal or state statute, rule, regulation, injunction,
order or decree shall have been enacted, entered, promulgated or enforced by any
Governmental Authority in the United States, Canada or England which is in
effect and has the effect of making the transactions contemplated hereby illegal
or otherwise prohibiting the consummation of the transactions contemplated
hereby.
6.8 Regulatory Matters. The waiting period shall have expired or been
terminated under the HSR Act.
6.9 Issuance of Securities. The Merger shall have been approved at the
Stockholders Meeting and the Form S-4 shall have become effective under the
Securities Act prior to the mailing of the Proxy Statement by the Company to its
Stockholders and no stop order or proceedings seeking a stop order shall be
threatened by the SEC or shall have been initiated by the SEC.
The obligation of the Company under this Agreement to effect the Merger
shall be subject to the fulfillment, on or prior to the Closing, of each of the
following conditions, unless and to the extent any such condition is
specifically waived in writing by the Company:
6.10 Comfort Letters. The Company shall have caused to be delivered to
Sysco the Guest Supply S-4 Comfort Letter and the Guest Supply Merger Comfort
Letter.
6.11 Representations and Warranties True at Closing. The representations
and warranties made by Sysco and Merger Sub in to this Agreement shall be true
and correct in all material respects on and as of the Closing Date with the same
effect as though such representations and warranties had been made or given on
and as of the Closing Date.
6.12 Obligations Performed. Sysco and Merger Sub shall have performed and
complied in all material respects with all of their respective agreements,
conditions and obligations required by this Agreement which are to be performed
or complied with by them prior to or at the Closing.
6.13 Consents. Sysco and Merger Sub shall have obtained and delivered to
the Company written consents of all persons or entities listed on Schedule 5.3,
and all of such consents shall remain in full force and effect at and as of the
Closing.
6.14 Closing Deliveries. Sysco and Merger Sub shall have delivered to the
Company all of the following:
(i) written confirmation from Sysco's transfer agent that stock
certificates evidencing the shares of Sysco Common Stock, to be issued as
the Merger Consideration and the cash in lieu of fractional shares, have
been reserved for issuance upon the exchange provided for in Section 2.4;
(ii) certified copies of the corporate resolutions of the Board of
Directors of Sysco and of the Board of Directors and sole stockholder of
Merger Sub authorizing and approving the Merger and the execution, delivery
and performance by Sysco and Merger Sub of this Agreement and all other
documents, instruments and agreements contemplated by this Agreement,
together with incumbency certificates with respect to the respective
officers of Sysco and Merger Sub executing documents or instruments on
behalf of Sysco and Merger Sub;
47
(iii) a certificate of an authorized officer of Sysco and Merger Sub
certifying as to the matters set forth in Sections 6.11, 6.12 and 6.13
hereof and as to the satisfaction in all material respects of all other
covenants of Sysco and Merger Sub, respectively, set forth herein;
(iv) the Certificates of Merger executed by Merger Sub;
(v) an Opinion of counsel to Sysco substantially in the form of
Schedule B-6.14(v)
(vi) Good Standing Certificates issued by the Secretary of State for
the State of Delaware certifying that Sysco and Merger Sub are in good
standing under the DGCL, such certificates to be in form and substance
reasonably satisfactory to the Company.
6.15 No Challenge. There shall not be pending any action or proceeding
before any Governmental Authority in the United States by any Governmental
Authority in the United States in which it is sought to restrain or prohibit
transactions contemplated by this Agreement.
6.16 Legality. No federal or state statute, rule, regulation, injunction,
order or decree shall have been enacted, entered, promulgated or enforced by any
Governmental Authority in the United States, Canada or England which is in
effect and has the effect of making the transactions contemplated herein illegal
or otherwise prohibiting the consummation of the transactions contemplated
herein.
6.17 Regulatory Matters. The Waiting Period shall have expired or been
terminated under the HSR Act.
6.18 Issuance of Securities. The Merger shall have been approved at the
Stockholders Meeting and the Form S-4 shall have become effective under the
Securities Act prior to the mailing of the Proxy Statement by the Company to its
Stockholders and no stop order or proceedings seeking a stop order shall be
threatened by the SEC or shall have been initiated by the SEC and the Sysco
Common Stock to be issued as Merger Consideration shall have been listed and
approved for trading on the NYSE (subject to notice of issuance)."
6.19 Fairness Opinion. The Fairness Opinion shall not have been modified
or withdrawn.
6.20 Comfort Letters. Sysco shall cause to be delivered to the Company
the Sysco S-4 Comfort Letter and the Sysco Merger Comfort Letter.
48
DISCLOSURE SCHEDULES
Schedule 3.7 Certain Definitions
Schedule 4.1(a) Jurisdictions and Qualifications of the Company
Schedule 4.1(b)(i) Subsidiaries
Schedule 4.1(b)(ii) Foreign Qualifications of the Subsidiaries
Schedule 4.2 Officers and Directors
Schedule 4.3 Liens
Schedule 4.4 Consents and Approvals
Schedule 4.5(a)(i) Issued and Outstanding Options
Schedule 4.5(a)(ii) Option Plans
Schedule 4.5(b) Ownership of Subsidiaries
Schedule 4.6 Compliance with Laws
Schedule 4.7 Licenses and Permits
Schedule 4.8 Liabilities
Schedule 4.9 Sufficiency of Assets
Schedule 4.10 Deposits
Schedule 4.11(a)(i) Accounts Receivable
Schedule 4.11(b) Indebtedness
Schedule 4.12 Tax Returns
Schedule 4.12(b) Submission of Tax Returns
Schedule 4.13 Intellectual Property
Schedule 4.14 Certain Material Contract Matters
Schedule 4.15 Litigation; Judgments
Schedule 4.16 List of Insurance Policies
Schedule 4.17(i) Independent Contractors
Schedule 4.17(ii) Employee Matters
Schedule 4.18(a) Employee Benefit Plans
Schedule 4.18(b) Parachute Payments
Schedule 4.20 Absence of Material Changes
Schedule 4.21(i) Bank Accounts
Schedule 4.21(ii) Powers of Attorney
Schedule 4.22 Certain Arrangements
Schedule 4.23 Environmental Matters
Schedule 4.25 Internet Presence
Schedule 4.29(a)(i) Real Property
Schedule 4.29(c) Zoning and Use
Schedule 5.3 No Conflict
