EXHIBIT 2.3
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
by and among
TRIARC COMPANIES, INC.,
ARBY'S RESTAURANT GROUP, INC.,
as Buyer,
ALL THE MEMBERS OF
RTM ACQUISITION COMPANY, L.L.C.
as Sellers
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
and
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
as the RTM Representatives
___________________
Dated as of May 27, 2005
___________________
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TABLE OF CONTENTS
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ARTICLE I SALE AND PURCHASE OF MEMBERSHIP INTERESTS......................................................2
SECTION 1.01 SALE AND PURCHASE OF MEMBERSHIP INTERESTS.......................................2
SECTION 1.02 CLOSING.........................................................................2
SECTION 1.03 PAYMENT OF AGGREGATE PURCHASE PRICE.............................................3
SECTION 1.04 REQUIRED WITHHOLDING............................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO RTMAC.....................................3
SECTION 2.01 ORGANIZATION AND QUALIFICATION OF RTMAC.........................................3
SECTION 2.02 AUTHORIZATION OF RTMAC; ENFORCEABILITY..........................................4
SECTION 2.03 MEMBERSHIP INTERESTS............................................................4
SECTION 2.04 SUBSIDIARIES....................................................................4
SECTION 2.05 GOVERNMENTAL AUTHORIZATIONS.....................................................4
SECTION 2.06 NON CONTRAVENTION...............................................................5
SECTION 2.07 RESTATED COMBINED RTM FINANCIAL STATEMENTS; INTERNAL CONTROLS; INDEBTEDNESS.....5
SECTION 2.08 ABSENCE OF CERTAIN CHANGES OR EVENTS............................................6
SECTION 2.09 ABSENCE OF UNDISCLOSED LIABILITIES..............................................7
SECTION 2.10 COMPLIANCE WITH LAWS; PERMITS...................................................7
SECTION 2.11 LEGAL ACTIONS...................................................................7
SECTION 2.12 CONTRACTS.......................................................................8
SECTION 2.13 TAX MATTERS....................................................................10
SECTION 2.14 EMPLOYEE BENEFITS..............................................................11
SECTION 2.15 LABOR MATTERS..................................................................14
SECTION 2.16 ENVIRONMENTAL MATTERS..........................................................14
SECTION 2.17 INTELLECTUAL PROPERTY..........................................................15
SECTION 2.18 REAL PROPERTY..................................................................16
SECTION 2.19 PERSONAL PROPERTY..............................................................16
SECTION 2.20 SUFFICIENCY OF ASSETS..........................................................16
SECTION 2.21 INSURANCE......................................................................17
SECTION 2.22 INVENTORY......................................................................17
SECTION 2.23 ACCOUNTS RECEIVABLE............................................................17
SECTION 2.24 SUPPLIERS......................................................................17
SECTION 2.25 RTMAC RESTAURANTS..............................................................17
SECTION 2.26 TRANSACTIONS WITH AFFILIATES...................................................18
SECTION 2.27 BROKERS AND FINDERS............................................................18
SECTION 2.28 INVESTMENT COMPANY.............................................................19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS...............................................19
SECTION 3.01 TITLE TO THE MEMBERSHIP INTERESTS..............................................19
SECTION 3.02 ORGANIZATION AND AUTHORITY OF SUCH SELLER; ENFORCEABILITY......................19
SECTION 3.03 GOVERNMENTAL AUTHORIZATIONS....................................................19
SECTION 3.04 NON-CONTRAVENTION..............................................................20
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TABLE OF CONTENTS
(continued)
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TRIARC AND ARG.............................................20
SECTION 4.01 ORGANIZATION AND QUALIFICATION OF TRIARC AND ARG...............................20
SECTION 4.02 AUTHORIZATION OF TRIARC AND ARG; ENFORCEABILITY................................21
SECTION 4.03 GOVERNMENTAL AUTHORIZATIONS....................................................21
SECTION 4.04 NON-CONTRAVENTION..............................................................21
SECTION 4.05 BROKERS AND FINDERS............................................................22
SECTION 4.06 PURCHASE FOR INVESTMENT........................................................22
ARTICLE V INTERIM OPERATIONS COVENANTS..................................................................23
SECTION 5.01 CONDUCT OF BUSINESS OF RTMAC...................................................23
SECTION 5.02 CONTROL OF BUSINESS PENDING CLOSING............................................26
ARTICLE VI ADDITIONAL COVENANTS.........................................................................26
SECTION 6.01 ACCESS TO INFORMATION; CONFIDENTIALITY.........................................26
SECTION 6.02 COMMERCIALLY REASONABLE EFFORTS................................................26
SECTION 6.03 NOTICES OF CERTAIN EVENTS......................................................27
SECTION 6.04 CONSENTS; FILINGS..............................................................27
SECTION 6.05 ACTIONS WITH RESPECT TO DEBT FINANCING AND DEBT REFINANCINGS...................28
SECTION 6.06 NO SOLICITATION................................................................29
SECTION 6.07 DEFENSE OF LITIGATION..........................................................29
SECTION 6.08 EMPLOYEES AND EMPLOYEE BENEFITS, ETC...........................................30
SECTION 6.09 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.........................31
SECTION 6.10 PUBLIC ANNOUNCEMENTS...........................................................32
SECTION 6.11 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ COMPLIANCE......................................................32
SECTION 6.12 CHARITABLE COMMITMENTS.........................................................32
ARTICLE VII TAX MATTERS.................................................................................33
SECTION 7.01 TAX INDEMNIFICATION............................................................33
SECTION 7.02 TAX INDEMNIFICATION PROCEDURES.................................................34
SECTION 7.03 RTM TAX AUDITS AND CONTESTS; COOPERATION.......................................35
SECTION 7.04 PREPARATION OF TAX RETURNS AND PAYMENT OF TAXES................................37
SECTION 7.05 STRADDLE PERIODS...............................................................38
SECTION 7.06 REFUNDS........................................................................39
SECTION 7.07 CONVEYANCE TAXES...............................................................39
SECTION 7.08 TERMINATION OF TAX SHARING AGREEMENTS..........................................39
SECTION 7.09 SECTION 754 ELECTION...........................................................39
SECTION 7.10 TAX TREATMENT..................................................................39
SECTION 7.11 RTMAC ASSET RANGE..............................................................40
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(continued)
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ARTICLE VIII CONDITIONS TO CLOSING......................................................................40
SECTION 8.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE PURCHASE..................40
SECTION 8.02 CONDITIONS TO OBLIGATIONS OF TRIARC AND ARG TO EFFECT THE PURCHASE.............41
SECTION 8.03 CONDITIONS TO OBLIGATIONS OF THE SELLERS TO EFFECT THE PURCHASE................42
SECTION 8.04 FRUSTRATION OF CLOSING CONDITIONS..............................................43
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER............................................................43
SECTION 9.01 GROUNDS FOR TERMINATION........................................................43
SECTION 9.02 EFFECT OF TERMINATION..........................................................44
SECTION 9.03 AMENDMENT......................................................................44
SECTION 9.04 EXTENSION; WAIVER..............................................................44
ARTICLE X SURVIVAL; INDEMNIFICATION.....................................................................45
SECTION 10.01 SURVIVAL.......................................................................45
SECTION 10.02 OBLIGATION OF ARG TO INDEMNIFY.................................................45
SECTION 10.03 MATTERS PERTAINING TO INDEMNIFICATION BY ARG...................................46
SECTION 10.04 OBLIGATION OF THE SELLERS TO INDEMNIFY.........................................47
SECTION 10.05 MATTERS PERTAINING TO INDEMNIFICATION BY THE SELLERS...........................49
SECTION 10.06 PROCEDURE FOR INDEMNIFICATION..................................................51
SECTION 10.07 SOLE AND EXCLUSIVE REMEDY......................................................53
SECTION 10.08 MISCELLANEOUS..................................................................53
ARTICLE XI MISCELLANEOUS................................................................................53
SECTION 11.01 DEFINITIONS....................................................................53
SECTION 11.02 INTERPRETATION.................................................................65
SECTION 11.03 FEES, COSTS AND EXPENSES.......................................................65
SECTION 11.04 NOTICES........................................................................66
SECTION 11.05 GOVERNING LAW..................................................................68
SECTION 11.06 JURISDICTION...................................................................68
SECTION 11.07 WAIVER OF JURY TRIAL...........................................................68
SECTION 11.08 EXHIBITS AND DISCLOSURE LETTERS................................................68
SECTION 11.09 NO THIRD-PARTY BENEFICIARIES...................................................68
SECTION 11.10 SEVERABILITY...................................................................69
SECTION 11.11 RULES OF CONSTRUCTION..........................................................69
SECTION 11.12 ASSIGNMENT.....................................................................69
SECTION 11.13 REMEDIES.......................................................................69
SECTION 11.14 SPECIFIC PERFORMANCE...........................................................69
SECTION 11.15 COUNTERPARTS...................................................................69
SECTION 11.16 ENTIRE AGREEMENT...............................................................70
SECTION 11.17 RTM REPRESENTATIVES............................................................70
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SCHEDULES
Schedule I Sellers; Membership Interests; Aggregate Purchase Price
ANNEXES
Annex A Form of Escrow Agreement
MEMBERSHIP INTEREST PURCHASE AGREEMENT
MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated as of May 27, 2005 (this
"AGREEMENT"), by and among Triarc Companies, Inc., a Delaware corporation
("TRIARC"); Arby's Restaurant Group, Inc., a Delaware corporation and an
indirect wholly owned subsidiary of Triarc ("ARG"); each of the persons listed
on SCHEDULE I hereto (collectively, the "SELLERS," and each, a "SELLER"); and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, as the RTM
Representatives (as defined below), for the purchase and sale of all of the
membership interests in RTM Acquisition Company, L.L.C., a Georgia limited
liability company ("RTMAC").
WHEREAS, the Sellers are the beneficial and record owners of all of the
membership interests in RTMAC (the "MEMBERSHIP INTERESTS");
WHEREAS, the Sellers wish to sell to ARG, and ARG wishes to purchase
from the Sellers, all of the Membership Interests upon the terms and subject to
the conditions of this Agreement (the "PURCHASE");
WHEREAS, Triarc, Arby's Acquisition Co., a Georgia corporation and a
direct wholly owned subsidiary of Triarc ("MERGER SUB CORP."), Arby's
Restaurant, LLC, a Delaware limited liability company and a direct wholly owned
subsidiary of Triarc ("MERGER SUB LLC"), RTM Restaurant Group, Inc., a Georgia
corporation ("RTMRG") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and J.
▇▇▇▇▇▇▇ ▇▇▇▇▇, as the RTM Representatives, have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "RTMRG MERGER AGREEMENT"),
which provides, among other things, for the merger of Merger Sub Corp. with and
into RTMRG, with RTMRG surviving the merger and becoming a direct wholly owned
subsidiary of Triarc (the "FIRST MERGER"), followed immediately thereafter by
the merger of RTMRG with and into Merger Sub LLC, with Merger Sub LLC surviving
the merger (the "SECOND MERGER" and, together with the First Merger, the
"MERGERS") and immediately after the Second Effective Time (as defined in the
RTMRG Merger Agreement), Triarc will contribute all of the outstanding
membership interests in the surviving entity in the Second Merger directly or
indirectly to Triarc Restaurant Holdings, LLC, which will directly or indirectly
contribute all of the outstanding membership interests in the surviving entity
in the Second Merger to ARG (such contributions, the "TRIARC CONTRIBUTIONS");
WHEREAS, certain principal shareholders of RTMRG (the "RTMRG PRINCIPAL
SHAREHOLDERS"), who collectively beneficially own approximately 87.1% of the
outstanding shares of RTMRG Common Stock have entered into a Transaction Support
Agreement for the benefit of Triarc (the "TRANSACTION SUPPORT AGREEMENT"),
pursuant to which the RTMRG Principal Shareholders have agreed, INTER ALIA, on
the terms and subject to the conditions set forth in the Transaction Support
Agreement, (a) to seek to obtain the waiver from each shareholder of RTMRG of
dissenters rights in respect of the First Merger and (b) to the indemnification
obligations of the RTMRG Principal Shareholders set forth in RTMRG Merger
Agreement and the restrictive covenants set forth therein;
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WHEREAS, Triarc, ARG, RTMMC Acquisition, LLC, a Delaware limited
liability company and a direct wholly owned subsidiary of Triarc ("RTMMC
ACQUISITION SUB"), RTM Management Company, L.L.C., a Georgia limited liability
company ("RTMMC"), each of the members of RTMMC, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, as the RTM Representatives, have entered
into an Asset Purchase Agreement, dated as of the date hereof (the "RTMMC
PURCHASE AGREEMENT"), pursuant to which, INTER ALIA, simultaneously with the
Closing, RTMMC Acquisition Sub will acquire from RTMMC, on the terms and subject
to the conditions set forth therein, the Purchased Assets (as defined therein)
and the Assumed Liabilities (as defined therein) (the "RTMMC PURCHASE" and,
together with the Mergers and the Purchase, the "RTM TRANSACTIONS") for an
amount in cash equal to the cash portion of the Aggregate Purchase Price (as
defined therein) (as used herein, the "RTMMC AGGREGATE PURCHASE PRICE"); and
WHEREAS, simultaneously with, and as a condition to the obligation of
the parties hereto to effect, the Purchase, Triarc, ARG, each of the RTMRG
Principal Shareholders, each of the Sellers as of immediately prior to the
Closing, RTMMC, each of the members of RTMMC as of immediately prior to the
Closing, the RTM Representatives and the Escrow Agent (as defined below) will
enter into an Escrow Agreement in the form attached hereto as ANNEX A with such
changes as may be requested by the Escrow Agent (the "ESCROW AGREEMENT").
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF MEMBERSHIP INTERESTS
Section 1.01 SALE AND PURCHASE OF MEMBERSHIP INTERESTS. At the
Closing provided for in Section 1.02, upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements contained herein, the Sellers shall sell to Triarc,
and Triarc shall purchase from the Sellers, all of the Membership Interests for
an aggregate purchase price (the "AGGREGATE PURCHASE PRICE") to be paid in
accordance with Section 1.03 equal to $10.00. Immediately after such purchase,
Triarc shall contribute, or cause to be contributed, such Membership Interests
to ARG.
Section 1.02 CLOSING. Subject to the satisfaction or waiver of all of
the conditions to closing contained in Article VIII, the closing of the Purchase
(the "CLOSING") shall take place (a) at the offices of ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1285 Avenue of the Americas, New York, New York, at
10:00 a.m. on the third Business Day after the day on which the last of those
conditions (other than any conditions, including the consummation of the Mergers
and the RTMMC Purchase, that by their nature are to be satisfied at the Closing)
is satisfied or waived in accordance with this Agreement or (b) at such other
place and time or on such other date as Triarc and the
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RTM Representatives may agree in writing. The date on which the Closing occurs
is referred to as the "CLOSING DATE."
Section 1.03 PAYMENT OF AGGREGATE PURCHASE PRICE. At the Closing,
ARG shall, and Triarc shall cause ARG to, pay to each of the Sellers the
Aggregate Purchase Price pro rata in accordance with their Membership Interests
as set forth on SCHEDULE I (less any withholding of Taxes as provided in Section
1.07) by wire transfer of immediately available funds to an account designated
by such Seller in writing to Triarc not less than five Business Days prior to
the Closing, subject to Section 1.04.
Section 1.04 REQUIRED WITHHOLDING. ARG shall be entitled to deduct
and withhold from the cash portion of the Aggregate Purchase Price such amounts
as it may be required to deduct and withhold from such payment under any
applicable Laws, and shall deduct and withhold from the portion of the Aggregate
Purchase Price payable to a Seller an amount equal to the amounts specified
under Section 1445 of the Code (assuming for these purposes the application of
Section 1445 of the Code to the Mergers and the Purchase) if such Seller does
not duly execute and deliver on or prior to the Closing Date a certificate
stating that such Seller is not a "foreign person" within the meaning of Section
1445 of the Code, which certificate shall set forth all information required by,
and otherwise be executed in accordance with, Treasury Regulation ss.
1.1445-2(b)(2). If ARG so deducts or withholds any such amounts, such amounts
shall be treated for, all purposes as having been paid to the Person in respect
of whom ARG made such deduction and withholding.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AS TO RTMAC
Except as otherwise set forth in the disclosure letter delivered on or
prior to the date of this Agreement by the Sellers to Triarc (the "RTMAC
DISCLOSURE LETTER"), which RTMAC Disclosure Letter is arranged in Sections
corresponding to the Sections of this Agreement, the Sellers, jointly and
severally, represent and warrant to Triarc and ARG that:
Section 2.01 ORGANIZATION AND QUALIFICATION OF RTMAC. RTMAC is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Georgia, and has the limited liability company
power and authority to own or lease its assets and to carry on its business
substantially as it is being conducted on the date hereof. RTMAC is duly
qualified and licensed to do business and is in good standing in each
jurisdiction where the ownership or operation of its property and assets or the
conduct of its business requires such qualification, except where the failure to
be so qualified or in good standing has not had and could not reasonably be
expected to have, individually or in the aggregate, an RTMAC Material Adverse
Effect. RTMAC has made available to Triarc correct and complete copies of the
articles of organization and operating agreement of RTMAC (as amended to the
date hereof).
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Section 2.02 AUTHORIZATION OF RTMAC; ENFORCEABILITY. RTMAC has all
requisite limited liability company power and authority, and has taken all
limited liability company action necessary in order to execute, deliver and
perform its obligations under each of the Ancillary Agreements to which it is a
party and to consummate the transactions contemplated by each such Ancillary
Agreement. Each of the Ancillary Agreements to which it is a party have been
duly executed and delivered by RTMAC and constitute the legal, valid and binding
obligation of RTMAC, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability relating to or affecting
creditors' rights, and to general equity principles.
Section 2.03 MEMBERSHIP INTERESTS. The Sellers are the only members
of RTMAC and own the respective percentages of the Membership Interests set
forth on SCHEDULE I hereto. No other membership or other ownership interest of
RTMAC is authorized or outstanding. All of the Membership Interests have been
duly authorized and validly issued, are fully paid and nonassessable. There are
no options, warrants, calls, conversion rights, stock appreciation rights,
redemption rights, repurchase rights or other rights, agreements, arrangements
or commitments to which RTMAC is a party (A) relating to the issued or unissued
membership interests or other securities of RTMAC or (B) obligating RTMAC to
issue or sell any of its membership interests or other securities. Except as set
forth in Section 2.03 of the RTMAC Disclosure Letter, there are no voting
trusts, proxies or other agreements or understandings with respect to the voting
of the membership interests of RTMAC. RTMAC does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the members of RTMAC on any matter.
Section 2.04 SUBSIDIARIES. RTMAC does not directly or indirectly own
any Subsidiary. Section 2.04 of the RTMAC Disclosure Letter sets forth all
interests (the "INVESTMENTS") of RTMAC, listing the name of such Person, the
type of entity, jurisdiction of organization and the number and class, amount
and/or series of debt or equity interests of such Persons held by RTMAC and each
other holder of any equity or other ownership interest in such Person. RTMAC has
good and valid title, free and clear of any Liens, to the Investments.
Section 2.05 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by RTMAC of each of the Ancillary Agreements to which it is a party
do not, and the consummation by RTMAC of the transactions contemplated thereby
will not, require any consent, approval or other authorization of, or filing
with or notification to, any Governmental Entity, other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act
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in connection with this Agreement and the Registration Rights Agreement and the
transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 2.06 NON CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings, the
execution, delivery and performance by RTMAC of each of the Ancillary Agreements
to which it is a party do not, and the consummation by RTMAC of the transactions
contemplated thereby will not (a) contravene, conflict with, or result in any
violation or breach of, the articles of organization or the operating agreement
of RTMAC, (b) contravene or conflict with, or result in any violation or breach
of, in any material respect, any Laws, Orders or Permits applicable to RTMAC or
by which any assets of RTMAC are bound, assuming that all consents, approvals,
authorizations, filings and notifications described in Section 2.05, Section
3.03 and Section 4.03 have been obtained or made, (c) result in any violation or
breach of, or constitute a default (with or without notice or lapse of time or
both) under, (x) any RTMAC Material Contract or (y) any other Contract to which
RTMAC is a party or by which any assets of RTMAC are bound, other than in the
case of this clause (y) any such violation, breach or default that would not
reasonably be expected to be, individually or in the aggregate, material to
RTMAC, (d) require any consent, approval or other authorization of, or filing
with or notification to, any Person under (x) any RTMAC Material Contract or (y)
any other Contract to which RTMAC is a party or by which any assets of RTMAC are
bound, other than in the case of this clause (y) any such consent, approval,
authorization, filing or notification that, if not obtained or made, would not
reasonably be expected to be, individually or in the aggregate, material to
RTMAC, (e) give rise to any termination, cancellation, amendment, modification
or acceleration of any rights or obligations under (x) any RTMAC Material
Contract or (y) any other Contract to which RTMAC is a party or by which any
assets of RTMAC are bound, other than in the case of this clause (y) any such
termination, cancellation, amendment, modification or acceleration that would
not reasonably be expected to be, individually or in the aggregate, material to
RTMAC, or (f) cause the creation or imposition of any Liens (other than
Permitted Liens) on any material assets of RTMAC.
Section 2.07 RESTATED COMBINED RTM FINANCIAL STATEMENTS; INTERNAL
CONTROLS; INDEBTEDNESS.
(a) Section 2.07(a) of the RTMAC Disclosure Letter sets forth the
following combined financial statements of the RTM Parties and their
Subsidiaries (collectively, the "RESTATED COMBINED RTM FINANCIAL STATEMENTS"):
(i) the restated audited combined balance sheets as of May 30, 2004 and May 25,
2003 and statements of income, net capital deficiency and cash flows for the
fiscal years ended May 30, 2004, May 25, 2003 and May 26, 2002, for the RTM
Parties and their Subsidiaries (such statements, together with the footnotes
related thereto, being the "RESTATED COMBINED RTM AUDITED FINANCIAL STATEMENTS")
and (ii) the restated unaudited combined balance sheets as of March 6, 2005 and
May 30, 2004 and statements of income and retained earnings for the 40 weeks
ended March 6, 2005 and February 29, 2004, for the RTM Parties and their
Subsidiaries (such statements being the "RESTATED COMBINED RTM
6
UNAUDITED FINANCIAL STATEMENTS"). The Restated Combined RTM Financial Statements
(x) were prepared in accordance with GAAP applied on a consistent basis (except
as may be indicated in the notes to the Restated Combined RTM Financial
Statements and except for the absence of footnotes in the case of the Restated
Combined RTM Unaudited Financial Statements); and (y) fairly present, in all
material respects, the combined financial position of the RTM Parties and their
Subsidiaries as of the dates thereof and their combined results of operations
and cash flows for the periods then ended (subject, in the case of the Restated
Combined RTM Unaudited Financial Statements, to normal year-end adjustments).
(b) RTMAC maintains accurate books and records reflecting its assets
and liabilities and maintains proper and adequate internal accounting controls
which provide assurance that (i) transactions are executed with management's
authorization; (ii) transactions are recorded as necessary to permit preparation
of the financial statements of RTMAC and to maintain accountability for the
assets of RTMAC; (iii) access to the assets of RTMAC is permitted only in
accordance with management's authorization; (iv) the reporting of the assets of
RTMAC is compared with existing assets at regular intervals; and (v) accounts,
notes and other receivables and inventory are recorded accurately, and proper
and adequate procedures are implemented to effect the collection thereof on a
current and timely basis. RTMAC has heretofore made available to Triarc a true,
complete and correct copy of any disclosure (or, if unwritten, a summary
thereof) by any Representative of RTMAC to RTMAC's independent auditors relating
to (x) any significant deficiencies in the design or operation of internal
controls which could adversely affect the ability of RTMAC to record, process,
summarize and report financial data and any material weaknesses in internal
controls and (y) any fraud, whether or not material, that involves management or
other employees who have a significant role in the internal control over
financial reporting of RTMAC.
(c) Section 2.07(c) of the RTMAC Disclosure Letter sets forth a true
and correct list of all Indebtedness of RTMAC (which Section may be updated by
the Sellers prior to the Closing Date to reflect (x) any additions or deletions
thereto after the date hereof in compliance with Section 5.01 and (y) payments
of principal and interest and accrual of interest on such Indebtedness during
the period from the date hereof through the Closing Date). The aggregate amount
of prepayment penalties, premiums, make wholes, breakage and other costs and
expenses payable to the lenders as such of all such Indebtedness solely on
account of the repayment of such Indebtedness in the Debt Refinancings will not
exceed $20 million. Section 2.07(c) of the RTMAC Disclosure Letter specifically
identifies all Indebtedness of RTMAC or included in the Winners Indebtedness
Amount that constitutes RTM Non-Prepayable Debt. All Indebtedness of the RTM
Parties and their Subsidiaries and the Mrs. Winners Obligors, other than the RTM
Non-Prepayable Debt, is permitted by its terms to be prepaid, or the holder
thereof has consented in writing (which consent is in full force and effect) to
being prepaid, in connection with the Debt Refinancings.
Section 2.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except to the
extent relating to the transactions contemplated by this Agreement, since May
30, 2004 (i) RTMAC has in all material respects conducted its business in the
ordinary course of
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business consistent with past practice and (ii) there has not occurred any
event, and there does not exist any condition or set of circumstances, that has
had or could reasonably be expected to have, individually or in the aggregate,
an RTM Material Adverse Effect.
Section 2.09 ABSENCE OF UNDISCLOSED LIABILITIES. RTMAC does not have
any material Liabilities, except for (i) Liabilities set forth in the Restated
Combined RTM Financial Statements, (ii) Liabilities which have arisen after May
30, 2004 in the ordinary course of business consistent with past practice or in
compliance with Section 5.01, (iii) Liabilities set forth in Section 2.09 of the
RTMAC Disclosure Letter and (iv) Liabilities that are (A) the subject of any
other representation or warranty contained in this Article II and are
specifically disclosed pursuant to such representation or warranty or are not
required to be disclosed because such other representation or warranty is
limited or qualified with respect to dollar amount, Knowledge of the Sellers or
materiality or (B) taken into account in the determination of the RTM Estimated
Net Liabilities or RTM Closing Net Liabilities.
Section 2.10 COMPLIANCE WITH LAWS; PERMITS.
(a) Since December 31, 2001, except for matters specifically
addressed by Section 2.15 (last sentence only), Section 2.16 or Section 2.25(b),
(i) RTMAC has conducted its business in compliance in all material respects with
applicable Law; and (ii) RTMAC has not received any notice or other
communication (whether oral or written) from any Governmental Entity or any
other Person regarding any actual, alleged, possible, or potential failure to
comply in any material respect with any applicable Laws.
(b) RTMAC holds all material Permits issued or provided by
Governmental Entities under all Laws, which are necessary for it to own its
assets or operate its business as currently conducted (the "RTMAC PERMITS").
There have been no material misstatements or omissions in connection with any
RTMAC Permit that, individually or in the aggregate, would be reasonably likely
to result in the revocation, nonrenewal, suspension or adverse modification of
such RTMAC Permit except for such revocations, non-renewals, suspensions or
adverse modifications that have not been and would not reasonably be expected to
be, individually or in the aggregate, material to RTMAC. There is not pending,
nor to the Knowledge of the Sellers, threatened, against RTMAC, any application,
action, petition, objection or other pleading, or any proceeding, with any
Governmental Entity which questions or contests the validity of, or any rights
of the holder under, or nonrenewal or suspension of any RTMAC Permit.
Section 2.11 LEGAL ACTIONS. Section 2.11 of the RTMAC Disclosure
Letter sets forth a true and complete list of all Legal Actions pending or, to
the Knowledge of the Sellers, threatened against (a) RTMAC or (b) any director,
officer or employee of RTMAC or other Person for whom RTMAC may be liable, other
than in the case of clause (a) or (b) any such Legal Actions commenced or, to
the Knowledge of the Sellers, threatened after the date of this Agreement and
prior to the Closing Date that have not resulted in and would not reasonably be
expected to result in, individually or in the aggregate, (x) Losses to RTMAC in
excess of $1 million or (y) RTMAC being bound
8
by any material restriction (other than customary confidentiality restrictions).
RTMAC is not subject to or bound by any outstanding Order that is material to
RTMAC.
Section 2.12 CONTRACTS.
(a) Section 2.12(a) of the RTMAC Disclosure Letter lists the
following Contracts to which RTMAC is a party and which are outstanding (which
Section may be updated by the Sellers prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof in compliance with Section
5.01) (collectively, the "RTMAC MATERIAL CONTRACTS"):
(i) any Contract expressly requiring capital expenditures
involving consideration in excess of $50,000 in any twelve month period;
(ii) any Contract which restricts or limits, in any material
respect, the ability of RTMAC to freely engage in any aspect of the quick
service restaurant business whether as franchisor or owner/operator, or to
employ any individuals (other than any confidentiality agreement entered into in
connection with a potential acquisition containing any such restriction or
limitation to employ any individuals);
(iii) any collective bargaining agreement;
(iv) any Contract which involved payments from RTMAC of more
than $250,000 to any Person supplying food or paper products or distribution
services to any of the RTM Parties or any of their Subsidiaries during the
twelve-month period ended May 30, 2004;
(v) any Contract which involved payments from RTMAC of more
than $100,000 to any Person supplying advertising services or marketing services
or materials to any of the RTM Parties or any of their Subsidiaries during the
twelve-month period ended May 30, 2004;
(vi) any Contract which involved payments to RTMAC of more
than $100,000 from any Person supplying beverage products to any of the RTM
Parties or any of their Subsidiaries during the twelve-month period ended May
30, 2004;
(vii) any Contract relating to the employment of any employee,
and any Contract pursuant to which RTMAC is or may become obligated to make any
severance, termination, bonus or relocation payment or any other payment (other
than payments in respect of salary) in excess of $125,000, to any current or
former employee, officer or director;
(viii) any Contract which provides for indemnification by RTMAC
of (A) any officer, director or employee of any of the RTM Parties or any of
their Subsidiaries or (B) any agent of the RTM Parties or any of their
Subsidiaries or any other Person that, in the case of this clause (B), has
resulted in or would reasonably be expected to result in, individually or in the
aggregate, material Liabilities to RTMAC;
9
(ix) any Contract relating to any Indebtedness, guarantying
the performance of any Person or guarantying any Indebtedness;
(x) any Contract involving a purchase price of $50,000 or
more under which the closing of the transactions contemplated thereby has not
occurred or under which there remains outstanding obligations and which relates
to the acquisition by RTMAC of any operating business or the capital stock or
other equity securities of any other Person, or the sale by RTMAC of any
operating business or the capital stock or other equity securities of any former
Subsidiary of RTMAC;
(xi) any partnership or joint venture agreement or other
Contract involving a sharing of profits, losses, costs or Liabilities with any
other Person;
(xii) any Contract under which RTMAC uses or occupies or has
the right to use or occupy any real property (collectively, the "RTMAC REAL
PROPERTY LEASES") (and Section 2.12(a)(xii) of the RTMAC Disclosure Letter sets
forth a true and complete summary of the following terms of each such RTMAC Real
Property Lease: (1) the lessee; (2) the unit number; (3) the monthly rental
rate; (4) the monthly operating expenses payable to the landlord; (5) the
monthly rental taxes; (6) the commencement date and the termination date; (7)
any assignment or change in control provisions; and (8) any guaranty by a Person
other than an RTM Party or their Subsidiaries);
(xiii) any Contract under which RTMAC grants to any Person or
Persons the right of use or occupancy to any portion of any parcel of any RTMAC
Real Property (collectively, the "RTMAC LEASES") (and Section 2.12(a)(xiii) of
the RTMAC Disclosure Letter sets forth a true and complete summary of the
following terms of each such RTMAC Lease: (1) the sublessee; (2) the unit
number; (3) the monthly rental rate; (4) the monthly operating expenses payable
to the landlord; (5) the monthly rental taxes; (6) the commencement date and the
termination date; and (7) any guaranty by an RTM Party or any of their
Subsidiaries);
(xiv) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the acquisition or sale by
RTMAC of one or more parcels of real property, the aggregate purchase price of
which exceeds $50,000;
(xv) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the construction by RTMAC of
one or more new Restaurants, the estimated costs under which exceed $50,000 in
the aggregate;
(xvi) any Contract entered into out of the ordinary course
of business, including any Contract entered into in connection with any
settlement of any claim, action, suit, demand, proceeding, investigation or
dispute, involving payments by RTMAC in excess of $50,000 or any unfulfilled or
pending non-payment obligations of RTMAC; and
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(xvii) any Contract or pledge pursuant to which RTMAC or any
of its Subsidiaries has committed or undertaken to make any charitable
contribution with an unfulfilled amount in excess of $50,000 individually or
$250,000 in the aggregate.
(b) Each RTMAC Material Contract is valid, binding, in full force
and effect and enforceable in accordance with its terms against RTMAC and, to
the Knowledge of the Sellers, against any other party thereto. RTMAC and, to the
Knowledge of the Sellers, each other party thereto, is not in material breach or
material default under any RTMAC Material Contract and to the Knowledge of the
Sellers, no event has occurred or condition or set of circumstances exists
which, with or without notice or lapse of time or both, would constitute a
material breach or material default, or permit termination, modification or
acceleration, under any RTMAC Material Contract by any party thereto.
Section 2.13 TAX MATTERS.
(a) All income Tax Returns and all other material Tax Returns
required to be filed by or with respect to RTMAC have been properly prepared and
timely filed (including all applicable extensions), and all such Tax Returns
(including information provided therewith or with respect thereto) are true,
complete and correct in all material respects.
(b) RTMAC has fully and timely paid all material Taxes owed by RTMAC
(whether or not shown on any Tax Return), and has made adequate provision for
any such Taxes that are not yet due and payable, for all taxable periods, or
portions thereof, ending on or before the date hereof.
(c) There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from RTMAC for any
taxable period and no written request for any such waiver or extension is
currently pending.
(d) No audit or other proceeding by any Governmental Entity is
pending, no Governmental Entity has given written notice of any intention to
commence an audit or other proceeding, or assert any deficiency or claim for
additional Taxes against RTMAC, and no claim in writing has been made by any
Governmental Entity in a jurisdiction where RTMAC does not file Tax Returns with
respect to a particular Tax that it is or may be subject to taxation by that
jurisdiction with respect to such Tax, and all deficiencies for Taxes asserted
or assessed in writing against RTMAC have been fully and timely paid, settled or
properly reflected in the Restated Combined RTM Financial Statements.
(e) Since the formation of RTMAC, no jurisdiction in which RTMAC
files, or has filed, Tax Returns treats, or has treated, RTMAC as an entity
other than a partnership, or as being subject, or having been subject, to
entity-level Tax, for federal, state, local and foreign income or franchise Tax
purposes.
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(f) RTMAC has never made an election to be excluded from the
provisions of Subchapter K of the Code, is (or ever has been) subject to the
taxable mortgage pool rules under Section 7701(i) of the Code, or is (or ever
has been) classified as an association taxable as a corporation or a publicly
traded partnership taxable as a corporation under Section 7704 of the Code.
Section 2.13(f) of the RTMAC Disclosure Letter sets forth a description of each
election, and revocation of such election, if any, made by RTMAC under Section
754 of the Code (and any comparable provision of state, local or foreign Tax
Law).
(g) There are no Liens for Taxes upon the assets or properties of
RTMAC, except for statutory Liens for current Taxes not yet due.
(h) RTMAC is not a party to any Tax Sharing Agreement.
(i) RTMAC has withheld (or will withhold) from its employees,
independent contractors, creditors, members and third parties and timely paid to
the appropriate Governmental Entity proper and accurate amounts in all material
respects for all periods ending on or before the Closing Date in compliance with
all Tax withholding and remitting provisions of applicable Laws and have each
complied in all material respects with all Tax information reporting provisions
of all applicable Laws.
(j) RTMAC has not agreed, and is not required to make, any
adjustment under Section 481(a) of the Code, and no Governmental Entity has
proposed in writing any such adjustment or change in accounting method.
(k) RTMAC has not executed or entered into a closing agreement
pursuant to Section 7121 of the Code or any similar provision of state, local or
foreign Law, and RTMAC is not subject to any private letter ruling of the IRS or
comparable ruling of any other Governmental Entity.
(l) No property owned by RTMAC: (i) is property required to be
treated as being owned by another Person pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986, (ii)
constitutes "tax-exempt use property" within the meaning of Section 168(h)(1) of
the Code or (iii) is "tax-exempt bond financed property" within the meaning of
Section 168(g)(5) of the Code.
(m) The adjusted tax basis of each note, receivable or other
obligation among any of RTMAC, its direct or indirect members and its Affiliates
equals the principal amount of such note, receivable or obligation (including
any accrued but unpaid interest).
Section 2.14 EMPLOYEE BENEFITS.
(a) Except for severance agreements under which the remaining
aggregate payments to the applicable former employee are less than $125,000,
RTMAC does not maintain or contribute to or have any obligation to maintain or
contribute to, or have any direct or indirect Liability with respect to any
plan, program, arrangement or
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agreement that is a pension, profit-sharing, savings, retirement, employment,
consulting, severance pay, termination, executive compensation, incentive
compensation, deferred compensation, bonus, stock purchase, stock option,
phantom stock or other equity-based compensation, change-in-control, retention,
salary continuation, vacation, sick leave, disability, death benefit, group
insurance, hospitalization, medical, dental, life (including all individual life
insurance policies as to which RTMAC is the owner, the beneficiary, or both),
Code Section 125 "cafeteria" or "flexible" benefit, employee loan, educational
assistance, fringe benefit plan, whether written or oral, including, without
limitation, any (i) "employee benefit plan" within the meaning of Section 3(3)
of ERISA or (ii) other employee benefit plans, agreements, programs, policies,
arrangements or payroll practices, whether or not subject to ERISA (including
any funding mechanism therefor now in effect or required in the future as a
result of the transaction contemplated by this Agreement or otherwise) under
which any current or former employee, director, officer, leased employee or
agent (or their beneficiaries) of RTMAC has any present or future right to
benefits (each such plan, program, arrangement or agreement set forth in such
Section being individually, an "RTMAC EMPLOYEE PLAN," and collectively the
"RTMAC EMPLOYEE PLANS"). All references to "RTMAC" in this Section 2.14 shall
refer to RTMAC and any employer that would be considered a single employer with
RTMAC under Sections 414(b), (c), (m) or (o) of the Code.
(b) RTMAC does not maintain, contribute to or have any Liability
with respect to, and has not within the preceding six years maintained,
contributed to or had any Liability with respect to, any RTMAC Employee Plan
that is, or has been, (i) subject to Title IV of ERISA or Section 412 of the
Code, (ii) maintained by more than one employer within the meaning of Section
413(c) of the Code, (iii) subject to Sections 4063 or 4064 of ERISA, (iv) a
"multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, (v) a
"multiple employer welfare arrangement" as defined in Section 3(40) of ERISA,
(vi) maintained outside the jurisdiction of the United States, or (vii) an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is not intended to be qualified under Section 401(a) of the Code.
(c) (i) Each RTMAC Employee Plan has been established and
administered in all material respects in accordance with its terms and in
compliance with the applicable provisions of ERISA, the Code and all other
applicable Laws; (ii) with respect to each RTMAC Employee Plan, all reports,
returns, notices and other documentation that are required to have been filed
with or furnished to the IRS, the DOL or any other Governmental Entity, or to
the participants or beneficiaries of such RTMAC Employee Plan have been filed or
furnished on a timely basis; (iii) each RTMAC Employee Plan that is intended to
be qualified within the meaning of Section 401(a) of the Code is so qualified
and has received a favorable determination letter from the IRS to the effect
that the RTMAC Employee Plan satisfies the requirements of Section 401(a) of the
Code and that its related trust is exempt from taxation under Section 501(a) of
the Code and, to the Knowledge of the Sellers, there are no facts or
circumstances that could reasonably be expected to cause the loss of such
qualification or the imposition of any material Liability, penalty or Tax under
ERISA, the Code or any other applicable Laws; (iv) other than routine claims for
benefits, no Liens or Legal Actions to or by any Person or Governmental Entity
have been filed against any RTMAC Employee Plan or RTMAC
13
with respect to any RTMAC Employee Plan or, to the Knowledge of the Sellers,
against any other Person and, to the Knowledge the Sellers, no such Liens or
Legal Actions are contemplated or threatened with respect to any RTMAC Employee
Plan; (v) no individual who has performed services for RTMAC has been improperly
excluded from participation in any RTMAC Employee Plan; and (vi) there are no
audits or proceedings initiated pursuant to the Employee Plans Compliance
Resolution System or similar proceedings pending with the IRS or the DOL with
respect to any RTMAC Employee Plan.
(d) Neither RTMAC nor, to the Knowledge of the Sellers, any other
"party in interest" or "disqualified person" with respect to any RTMAC Employee
Plan has engaged in a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code involving such RTMAC Employee
Plan. To the Knowledge of the Sellers, no fiduciary has any Liability for breach
of fiduciary duty or any other failure to act or comply with the requirements of
ERISA, the Code or any other applicable Laws in connection with the
administration or investment of the assets of any RTMAC Employee Plan.
(e) All Liabilities or expenses of RTMAC in respect of any RTMAC
Employee Plan (including workers compensation) which have not been paid, have
been properly accrued on the Restated Combined RTM Unaudited Financial
Statements in compliance with GAAP. All contributions (including all employer
contributions and employee salary reduction contributions) or premium payments
required to have been made under the terms of any RTMAC Employee Plan, or in
accordance with applicable Law, as of the date hereof have been timely made or
reflected on the Restated Combined RTM Unaudited Financial Statements in
accordance with GAAP.
(f) Neither RTMAC nor any organization to which RTMAC is a successor
or parent corporation, within the meaning of Section 4069(b) of ERISA, has
engaged in any transaction described in Sections 4069 or 4212(c) of ERISA.
(g) RTMAC has no obligation to provide or make available
post-employment welfare benefits or welfare benefit coverage for any employee or
former employee, except as may be required under COBRA, and at the sole expense
of the employee or former employee.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
combination with another event) (i) result in any payment becoming due, or
increase the amount of any compensation due, to any current or former employee
of RTMAC; (ii) increase any benefits otherwise payable under any RTMAC Employee
Plan; (iii) result in the acceleration of the time of payment or vesting of any
such compensation or benefits; or (iv) result in the payment of any amount that
could, individually or in combination with any other such payment, constitute an
"excess parachute payment," as defined in Section 280G(b)(1) of the Code.
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(i) RTMAC has no plan, Contract or commitment, whether legally
binding or not, to create any additional employee benefit or compensation plans,
policies or arrangements or, except as may be required by Law, to modify any
RTMAC Employee Plan.
(j) There are no reserves, assets, surpluses or prepaid premiums
with respect to any "welfare plan" (as defined in Section 3(1) of ERISA) that
are disclosed in Section 2.14(a) of the RTMAC Disclosure Letter.
(k) RTMAC has not incurred any Liability or obligation under WARN
or any similar state or local Law within the last six months which remains
unsatisfied.
(l) RTMAC has no direct or indirect material Liability with respect
to any misclassification of any Person as an independent contractor rather than
as an employee, or with respect to any employee leased from another employer.
(m) The Sellers have made available to Triarc with respect to each
RTMAC Employee Plan (other than severance agreements under which the aggregate
remaining payments to the applicable former employee are less than $125,000), a
true, correct and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) the most recent
documents constituting the RTMAC Employee Plan and all amendments thereto, (ii)
any related trust agreement or other funding instrument; (iii) the most recent
IRS determination letter; (iv) the most recent summary plan description and
summary of material modifications; (v) the three most recent (A) Forms 5500 and
attached schedules, and (B) audited financial statements; (vi) for the last
three years, all correspondence with the IRS, the DOL and any other Governmental
Entity regarding the operation or the administration of any RTMAC Employee Plan;
and (vii) any other documents in respect of an RTMAC Employee Plan reasonably
requested by Triarc.
Section 2.15 LABOR MATTERS. RTMAC is not the subject of, nor, to
the Knowledge of the Sellers, is there threatened, any material claim asserting
that RTMAC has committed an unfair labor practice with respect to RTMAC
Employees located in the United States, nor is there pending or, to the
Knowledge of the Sellers, threatened, nor has there been since December 31,
2001, any organized effort or demand for recognition by any labor organization
or any labor dispute or slow-down that is material to the operations of RTMAC.
There is not pending, nor, to the Knowledge of the Sellers, is there threatened
any material labor strike, walk-out, work stoppage or lockout with respect to
RTMAC Employees. RTMAC is, and since December 31, 2001 has been, in compliance
in all material respects with all applicable foreign, federal, state and local
Laws respecting employment, employment of minors, employment practices, terms
and conditions of employment, withholding and wages and hours. RTMAC does not
have any employees who spend more than 25% of their work week for matters
related to any RTM Related Entity.
Section 2.16 ENVIRONMENTAL MATTERS. (i) RTMAC is not, and since
December 31, 2001 has not been, in violation in any material respect of any
applicable
15
Environmental Law; (ii) since December 31, 2001, RTMAC has not received any
written notice, demand, claim or request for information from any Governmental
Entity alleging the violation in any material respect of or any material
Liability under any applicable Environmental Law; (iii) RTMAC is not the subject
of any Order arising under any Environmental Law; and (iv) to the Knowledge of
the Sellers, there are no events, conditions or circumstances reasonably likely
to result in any material Liability to RTMAC under Environmental Laws.
Section 2.17 INTELLECTUAL PROPERTY.
(a) RTMAC owns, is licensed under, or otherwise possesses legally
enforceable rights to use all patents, trade secrets, inventions, trademarks,
trade names, service marks, trade dress rights, Internet domain names,
copyrights, and any applications and registrations therefor, technology,
know-how, computer software programs or applications, and tangible or intangible
proprietary information or materials that are used in and material to the
business of RTMAC as currently conducted; PROVIDED, that no representation or
warranty is being made under this Agreement with respect to the compliance by
ARG or its applicable Subsidiary with any Contracts pursuant to which ARG or its
applicable Subsidiary licenses the RTMAC Third-Party Intellectual Property
Rights to RTMAC or the sufficiency of any such Contract to grant valid rights to
such RTMAC Third-Party Intellectual Property Rights. Section 2.17(a) of the
RTMAC Disclosure Letter sets forth all material United States patents, patent
applications, trademark, service ▇▇▇▇ and copyright applications and
registrations, and Internet domain name registrations owned by RTMAC.
(b) RTMAC is not, nor will it be as a result of the execution
and delivery by the Sellers of this Agreement or the performance by the Sellers
of their obligations hereunder, in violation in any material respect of any
material licenses, sublicenses or other agreements as to which RTMAC is a party
and pursuant to which RTMAC is authorized to use any third-party patents,
inventions, trademarks, trade names, service marks, trade dress rights, Internet
domain names, copyrights, trade secrets or other intellectual property rights
(collectively, "RTMAC THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS").
(c) No claims with respect to (i) the right of RTMAC to use or to
sell, license or make available to any Person any of RTMAC's products or
services, or any of the patents, patent applications, registered and material
unregistered trademarks, trade names, service marks, registered copyrights, and
any applications therefor or trade secrets owned by RTMAC (collectively, the
"RTMAC INTELLECTUAL PROPERTY RIGHTS"); or (ii) RTMAC Third-Party Intellectual
Property Rights are, to the Knowledge of the Sellers, currently pending or
threatened by any Person against RTMAC, that if adversely determined could be
material to RTMAC; PROVIDED, that no representation or warranty is being made
with respect to claims made against ARG or any of its Subsidiaries of which the
Sellers do not have Knowledge.
(d) RTMAC has taken all necessary actions to maintain and protect
the RTMAC Intellectual Property Rights.
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Section 2.18 REAL PROPERTY. Section 2.18 of the RTMAC Disclosure
Letter sets forth a true, correct and complete schedule of all real property
owned by, or leased, subleased or licensed to, RTMAC (which Section may be
updated by the Sellers prior to the Closing Date to reflect any additions or
deletions thereto after the date hereof in compliance with Section 5.01)
(collectively, the "RTMAC REAL PROPERTY"). With respect to each such parcel of
RTMAC Real Property:
(a) RTMAC has good and marketable title to the RTMAC Real Property
owned by it and a valid leasehold interest in the RTMAC Real Property leased to
it, as the case may be, free and clear of any Liens, except for Permitted Liens;
(b) except for RTMAC Leases, there are no leases, subleases,
licenses, concessions, or other agreements entered into by RTMAC granting to any
Person or Persons the right of use or occupancy to any portion of the parcel of
any of such RTMAC Real Property;
(c) [intentionally omitted];
(d) all of the real property used by RTMAC in the conduct of its
business is included in the RTMAC Real Property, and is sufficient to operate
the Arby's quick service restaurant business as currently conducted;
(e) except for the RTMAC Restaurants (which are addressed in
Section 2.25), RTMAC has not received notice and, to the Knowledge of the
Sellers, there are no pending, threatened or contemplated condemnation
proceeding or proceedings affecting any of the RTMAC Real Property or any part
thereof or of any sale or other disposition of the RTMAC Real Property or any
part thereof in lieu of condemnation, in each case that, individually or in the
aggregate, is, or is reasonably likely to be, material to RTMAC; and
(f) no portion of any material RTMAC Real Property has suffered
any material damage by fire or other casualty which is uninsured or has not
heretofore been completely repaired and restored in full.
Section 2.19 PERSONAL PROPERTY. RTMAC has good and marketable title
to, or a valid and enforceable leasehold interest in, all material tangible
personal property or assets owned, used or held for use by it. RTMAC's ownership
of or leasehold interest in any such personal property or assets is not subject
to any Liens, except for Permitted Liens. Except for normal wear and tear, and
except to the extent addressed in Section 2.25(a), the machinery, equipment,
fixtures and improvements of RTMAC necessary for and material to the continued
conduct of its business are in good operating condition and in a state of
reasonable maintenance and repair.
Section 2.20 SUFFICIENCY OF ASSETS. The RTM Parties and their
Subsidiaries taken as a whole have, and upon completion of the RTM Transactions,
ARG shall have, directly or indirectly, ownership of or rights in all of the
assets necessary to
17
conduct the Arby's restaurant business of the RTM Parties and their Subsidiaries
in all material respects as currently conducted.
Section 2.21 INSURANCE. RTMAC maintains (or has maintained on its
behalf), and has maintained (or has maintained on its behalf) without
interruption, policies or binders of insurance covering risks and events and in
amounts adequate for its business and operations and customary in the industry
in which it operates. There are no material claims by RTMAC pending under any of
such policies or bonds in excess of $100,000 as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds or
in respect of which such underwriters have reserved their rights.
Section 2.22 INVENTORY. The Inventory of RTMAC consists of items
which are in all material respects of a quality and quantity usable and salable
in the ordinary course of business consistent with past practice.
Section 2.23 ACCOUNTS RECEIVABLE. All Accounts Receivable of
RTMAC that are reflected on the Restated Combined RTM Financial Statements or on
the accounting records of RTMAC as of the Closing Date represent or will
represent valid obligations arising from sales actually made or services
actually performed by RTMAC in the ordinary course of business. There is no
contest, claim, defense or right of setoff, other than returns in the ordinary
course of business of RTMAC, under any Contract with any account debtor of a
material Account Receivable relating to a material portion or validity of such
Account Receivable, other than any of the foregoing asserted after the date
hereof and where the result, individually or in the aggregate, is not and would
not reasonably be expected to be material to RTMAC.
Section 2.24 SUPPLIERS. No supplier or distributor that is
identified with an asterisk on Section 2.12(a) of the RTMAC Disclosure Letter
has reduced or otherwise discontinued or adversely modified the terms on which
such products or services are supplied, or threatened to reduce or discontinue
or adversely modify the terms in connection with supplying such items to RTMAC,
in a manner that is or would be material to RTMAC.
Section 2.25 RTMAC RESTAURANTS.
(a) Section 2.25(a) of the RTMAC Disclosure Letter sets forth a
true and complete list of the Restaurants owned or operated by RTMAC (which
Section may be updated by the Sellers prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof in compliance with Section
5.01) (the "RTMAC RESTAURANTS"). The stores, equipment, machinery, fixtures and
improvements owned by RTMAC or otherwise used by RTMAC in connection with the
operation of the RTMAC Restaurants are (as to physical plant and structure)
structurally sound, in good operating condition and repair, except for ordinary
wear and tear, and are adequate for the uses to which they are being put.
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(b) To the Knowledge of the Sellers, RTMAC has not received
written notice that any of the buildings and structures or any appurtenances
thereto or equipment therein or the operation or maintenance thereof related to
the RTMAC Restaurants violates in any material respect any restrictive
covenants, any insurance requirements or any applicable federal, state or local
Law, ordinance or zoning regulation. To the Knowledge of the Sellers, none of
the property nor any buildings, structures or improvements thereon related to
the RTMAC Restaurants violate in any material respect any building, fire,
environmental or other Laws.
(c) No Governmental Entity has issued or threatened, in writing,
to issue any written notice or order that materially affects the use of the
property of an RTMAC Restaurant as presently utilized and RTMAC has not received
written notice from any other third party of any adverse claim that would
materially adversely affect the current operations of the RTMAC Restaurants.
There are no condemnation or eminent domain proceedings pending or, to the
Knowledge of the Sellers, threatened, against the property where any such RTMAC
Restaurant is located, and RTMAC has not received written notice of the intent
of any Governmental Entity to take or use the property or any part thereof.
Section 2.26 TRANSACTIONS WITH AFFILIATES. Except for existing
employment agreements with RTMAC or existing RTMAC Employee Plans, RTMAC is not
a party to any Contract with any Affiliate of RTMAC (other than any other RTM
Party or any of their Subsidiaries or any of their Subsidiaries, except in the
case of RTMMC to the extent that such Contract is an Excluded Asset (as defined
in the RTMMC Purchase Agreement), any director, officer, member or employee of
RTMAC or, to the Knowledge of the Sellers, any Affiliates or Immediate Family
Members of any director, officer, member or employee of RTMAC. Section 2.26 of
the RTMAC Disclosure Letter also sets forth a true and complete list of all
outstanding loans or extensions of credit (other than travel advances made in
the ordinary course of business to directors, officers or employees) that RTMAC
has made directly or indirectly to any director, officer, member or employee of
RTMAC or any of their respective Affiliates or Immediate Family Members,
providing with respect to each such loan or extension of credit the outstanding
principal amount, the interest rate and final maturity date. Each Contract and
loan or extension of credit set forth or required to be set forth in Section
2.26 of the RTMAC Disclosure Letter is hereinafter referred to as a "RTMAC
RELATED PARTY ARRANGEMENT".
Section 2.27 BROKERS AND FINDERS. No broker, finder or investment
banker other than TM Capital is entitled to any brokerage, finder's or other fee
or commission in connection with the RTM Transactions or the other transactions
contemplated by this Agreement or the Ancillary Agreements based upon
arrangements made by or on behalf of RTMAC or any of the Sellers. RTMAC has made
available to Triarc a correct and complete copy of all agreements between RTMAC
and TM Capital under which TM Capital would be entitled to any payment relating
to the RTM Transactions or such other transactions, which agreements shall not
be amended or otherwise modified after the date hereof without the prior written
consent of Triarc.
19
Section 2.28 INVESTMENT COMPANY. RTMAC is not and is not controlled
by or affiliated with an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Except as otherwise set forth in the RTMAC Disclosure Letter, which
RTMAC Disclosure Letter is arranged in Sections corresponding to the Sections of
this Agreement, each Seller, severally and not jointly, represents and warrants
to Triarc and ARG that:
Section 3.01 TITLE TO THE MEMBERSHIP INTERESTS. Such Seller owns
beneficially and of record, free and clear of any Lien, and has full power and
authority to convey free and clear of any Lien, the percentage of the Membership
Interests set forth opposite such Seller's name on SCHEDULE I hereto, and, upon
payment for such Membership Interests at the Closing as provided in Section
1.03, such Seller will convey to ARG good and valid title thereto, free and
clear of any Lien.
Section 3.02 ORGANIZATION AND AUTHORITY OF SUCH SELLER;
ENFORCEABILITY. Such Seller has all requisite power and authority, and has taken
all action necessary in order to execute, deliver and perform its obligations
under this Agreement and each of the Ancillary Agreements to which it is a party
and to consummate the transactions contemplated by this Agreement and each such
Ancillary Agreement. This Agreement and each of the Ancillary Agreements to
which such Seller is a party have been duly executed and delivered by such
Seller and constitute the legal, valid and binding obligation of such Seller,
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors' rights, and to general
equity principles.
Section 3.03 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by such Seller of this Agreement and each of the Ancillary
Agreements to which it is a party do not, and the consummation by such Seller of
the transactions contemplated hereby and thereby will not, require any consent,
approval or other authorization of, or filing with or notification to, any
Governmental Entity, other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
20
(c) the pre-merger notification required under the HSR Act.
Section 3.04 NON-CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings, the
execution, delivery and performance by such Seller of this Agreement and each of
the Ancillary Agreements to which it is a party do not, and the consummation by
such Seller of the transactions contemplated hereby and thereby will not (a)
contravene, conflict with, or result in any violation or breach of, the articles
of organization or operating agreement of RTMAC, (b) contravene or conflict
with, or result in any violation or breach of, in any material respect, any
Laws, Orders or Permits applicable to RTMAC or such Seller or by which any
assets of any of RTMAC or such Seller are bound, assuming that all consents,
approvals, authorizations, filings and notifications described in Section 2.05,
Section 3.03 and Section 4.03 have been obtained or made, (c) result in any
violation or breach of, or constitute a default (with or without notice or lapse
of time or both) under, (x) any RTMAC Material Contract or (y) any other
Contract to which RTMAC or such Seller is a party or by which any assets of
RTMAC or such Seller are bound, other than in the case of this clause (y) any
such violation, breach or default that would not reasonably be expected to be,
individually or in the aggregate, material to RTMAC or such Seller, (d) require
any consent, approval or other authorization of, or filing with or notification
to, any Person under (x) any RTMAC Material Contract or (y) any other Contract
to which RTMAC or such Seller is a party or by which any assets of RTMAC or such
Seller are bound, other than in the case of this clause (y) any such consent,
approval, authorization, filing or notification that, if not obtained or made,
would not reasonably be expected to be, individually or in the aggregate,
material to RTMAC or such Seller, (e) give rise to any termination,
cancellation, amendment, modification or acceleration of any rights or
obligations under (x) any RTMAC Material Contract or (y) any other Contract to
which RTMAC or such Seller is a party or by which any assets of RTMAC or such
Seller are bound, other than in the case of this clause (y) any such
termination, cancellation, amendment, modification or acceleration that would
not reasonably be expected to be, individually or in the aggregate, material to
RTMAC or such Seller, or (f) cause the creation or imposition of any Liens
(other than Permitted Liens) on any material assets of RTMAC or such Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TRIARC AND ARG
Triarc and ARG jointly and severally represent and warrant to the
Sellers as follows:
Section 4.01 ORGANIZATION AND QUALIFICATION OF TRIARC AND ARG. Each
of Triarc and ARG is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has the
corporate power and authority to own or lease its assets and to carry on its
business substantially as it is being conducted on the date hereof. Each of
Triarc and ARG is duly qualified and licensed to do business and is in good
standing in each jurisdiction where the ownership or operation
21
of its property and assets or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing
has not had and would not reasonably be expected to have, individually or in the
aggregate, a Triarc Material Adverse Effect. Triarc has made available to the
RTM Representatives correct and complete copies of the certificate of
incorporation and bylaws of Triarc and ARG (as amended to the date hereof).
Section 4.02 AUTHORIZATION OF TRIARC AND ARG; ENFORCEABILITY. Each of
Triarc and ARG has all requisite corporate power and authority, and has taken
all corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement and each of the Ancillary Agreements to which
it is a party and to consummate the transactions contemplated by this Agreement
and each such Ancillary Agreement. This Agreement and each of the Ancillary
Agreements to which it is a party have been duly executed and delivered by each
of Triarc and ARG and constitute the legal, valid and binding obligation of each
of Triarc and ARG, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability relating to or affecting
creditors' rights, and to general equity principles.
Section 4.03 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by each of Triarc and ARG of this Agreement and each of the
Ancillary Agreements to which it is a party do not, and the consummation by each
of Triarc and ARG of the transactions contemplated hereby and thereby will not,
require any consent, approval or other authorization of, or filing with or
notification to, any Governmental Entity, other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 4.04 NON-CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings and
except as set forth in Section 4.05 of the Triarc Disclosure Letter, the
execution, delivery and performance by each of Triarc and ARG of this Agreement
and each of the Ancillary Agreements to which it is a party do not, and the
consummation by each of Triarc and ARG of the transactions contemplated hereby
and thereby will not (a) contravene, conflict with, or result in any violation
or breach of, the certificate of incorporation or by-laws (or comparable
organizational instruments) of any of Triarc and ARG, (b) contravene or conflict
with, or result in any violation or breach of, in any material respect, any
Laws, Orders or Permits applicable to Triarc or any of its Subsidiaries or by
22
which any assets of Triarc and its Subsidiaries are bound, assuming that all
consents, approvals, authorizations, filings and notifications described in
Section 2.05, Section 3.03 and Section 4.03 have been obtained or made, (c)
result in any violation or breach of, or constitute a default (with or without
notice or lapse of time or both) under, (x) any Contract filed with the Triarc
SEC Reports or (y) any other Contract to which Triarc or any of its Subsidiaries
is a party or by which any assets of Triarc or any of its Subsidiaries is bound,
other than in the case of this clause (y) any such violation, breach or default
that would not reasonably be expected to have, individually or in the aggregate,
a Triarc Material Adverse Effect, (d) require any consent, approval or other
authorization of, or filing with or notification to, any Person under, (x) any
Contract filed with the Triarc SEC Reports or (y) any other Contract to which
Triarc or any of its Subsidiaries is a party or by which any assets of Triarc or
any of its Subsidiaries is bound, other than in the case of this clause (y) any
such consent, approval, authorization, filing or notification that, if not
obtained or made, would not reasonably be expected to have, individually or in
the aggregate, a Triarc Material Adverse Effect, (e) give rise to any
termination, cancellation, amendment, modification or acceleration of any rights
or obligations under, (x) any Contract filed with the Triarc SEC Reports or (y)
any other Contract to which Triarc or any of its Subsidiaries is a party or by
which any assets of Triarc or any of its Subsidiaries is bound, other than in
the case of this clause (y) any such termination, cancellation, amendment,
modification or acceleration that would not reasonably be expected to have,
individually or in the aggregate, a Triarc Material Adverse Effect, or (f) cause
the creation or imposition of any Liens (other than Permitted Liens) on any
material assets of any of Triarc or any of its Subsidiaries.
Section 4.05 BROKERS AND FINDERS. No broker, finder or investment
banker other than as set forth on Section 3.29 of the Triarc Disclosure Letter
is entitled to any brokerage, finder's or other fee or commission in connection
with the RTM Transactions or the other transactions contemplated by this
Agreement or the Ancillary Agreements based upon arrangements made by or on
behalf of Triarc or any of its Subsidiaries. Triarc has made available to the
RTM Representatives a correct and complete copy of all agreements between Triarc
and those Persons set forth on Section 3.29 of the Triarc Disclosure Letter
under which such Persons would be entitled to any payment relating to the RTM
Transactions or such other transactions, which agreements shall not have been
amended or otherwise modified after the date hereof without the prior written
consent of the RTM Representatives.
Section 4.06 PURCHASE FOR INVESTMENT. ARG is purchasing the
Membership Interests for its own account for investment and not for resale or
distribution in any transaction that would be in violation of the securities
laws of the United States of America or any state thereof.
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ARTICLE V
INTERIM OPERATIONS COVENANTS
Section 5.01 CONDUCT OF BUSINESS OF RTMAC. During the period from
the date hereof until the Closing, except as required by Law or a Governmental
Entity or as otherwise contemplated by this Agreement or the Ancillary
Agreements or taken in connection with complying with the terms of this
Agreement or the Ancillary Agreements, the Sellers shall cause RTMAC to (x)
conduct its operations only in the ordinary course of business consistent with
past practice and with no less diligence and effort than would be applied in the
absence of this Agreement and (y) use its commercially reasonable efforts to
maintain and preserve intact its business organization, to retain the services
of its current officers and key employees, and to preserve the good will of its
customers, suppliers and other Persons with whom it has business relationships.
Without limiting the generality of the foregoing, and except as otherwise
contemplated by this Agreement or the Ancillary Agreements or as set forth in
Section 5.01 of the RTMAC Disclosure Letter, (i) the Sellers shall not permit
RTMAC to, without the prior written consent of Triarc (not to be unreasonably
withheld, conditioned or delayed), and (ii) with respect to Section 5.01(p), the
Sellers shall cause RTMAC to take the actions set forth in Section 5.01(p):
(a) ORGANIZATION DOCUMENTS. Amend its articles of organization
or operating agreement;
(b) DIVIDENDS. Make, declare or pay any dividend or distribution on
its membership interests or similar equity interests, other than (i)
distributions to members in an amount equal to their aggregate liability for
income Taxes based on the operations of RTMAC, as reasonably determined by
RTMAC, (ii) cash dividends or distributions in an amount that the RTM
Representatives have demonstrated to the reasonable satisfaction of Triarc
(based upon reasonably detailed information provided by the RTM Representatives
to Triarc), after taking into account any distributions described in clause (i)
that have been made or are expected to be made prior to the Closing, would not
reasonably be expected to result in the Net Liabilities of the RTM Parties and
their Subsidiaries being more than the RTM Benchmark as of the Closing Date and
(iii) dividends or distributions of proceeds from Excluded Asset Dispositions;
(c) EQUITY INTERESTS. (i) Adjust, split, combine or reclassify its
membership interests or similar equity interests, (ii) redeem, purchase or
otherwise acquire, directly or indirectly, any membership interests or similar
equity interests or any securities convertible or exchangeable into or
exercisable for any membership interests or similar equity interests, (iii)
grant any Person any right or option to acquire any of its membership interests
or similar equity interests, (iv) issue, deliver or sell any additional
membership interests or similar equity interests or any securities convertible
or exchangeable into or exercisable for any membership interests or similar
equity interests or such securities or (v) enter into any Contract,
understanding or arrangement with respect to the sale, voting, registration or
repurchase of its membership interests or similar equity interests;
24
(d) COMPENSATION AND BENEFITS. (i) Increase the compensation or
benefits payable or to become payable to any of its directors, officers or
employees, (ii) pay any compensation or benefits not required by any existing
plan or arrangement (including the granting of stock options, stock appreciation
rights, shares of restricted stock or performance units) to its directors,
officers or employees, (iii) grant any severance or termination pay to any of
its directors, officers or employees (except pursuant to existing agreements,
plans or policies), (iv) enter into any new employment or severance agreement
with any of its directors, officers or employees or (v) establish, adopt, enter
into, amend or take any action to accelerate rights under any RTMAC Employee
Plans, except in each case (A) for increases in salary, wages and benefits of
officers or employees consistent with past practice, or (B) in conjunction with
new hires, promotions or other changes in job status consistent with past
practice;
(e) ACQUISITIONS. Acquire, by merger, consolidation, acquisition of
equity interests or assets, or otherwise, any business or any corporation,
partnership, limited liability company, joint venture or other business
organization or division thereof;
(f) DISPOSITIONS. Sell, close, lease, license, transfer, pledge,
encumber, grant or dispose of any of its properties or assets, including RTMAC
Restaurants, other than (i) the sale of Inventory or (ii) the disposition of
used or excess equipment or machinery, in each case in the ordinary course of
business consistent with past practice;
(g) CONTRACTS. (i) Enter into any Contract that, had it been entered
into on or prior to the date hereof, would have constituted an RTMAC Material
Contract, other than in the ordinary course of business consistent with past
practice or (ii) terminate, cancel or request any material change in any RTMAC
Material Contract or any Contract entered into pursuant to clause (i) above,
other than in the ordinary course of business consistent with past practice;
(h) INDEBTEDNESS; GUARANTEES. (i) Incur, assume or prepay any
Indebtedness, other than (x) in the ordinary course of business consistent with
past practice under existing lines of credit to be used for working capital
purposes or with Triarc's consent to acquire, remodel, furnish or build new
Restaurants or to remodel RTMAC Restaurants or (y) any Indebtedness incurred
either on terms reasonably acceptable to Triarc the proceeds of which will be
used solely to make scheduled amortization payments of principal or scheduled
payments of interest on Indebtedness existing as of the date hereof or as set
forth in Section 5.01(h) of the RTMAC Disclosure Letter, or (ii) assume,
guarantee, endorse or otherwise become liable or responsible for the obligations
of any other Person, other than (x) guarantees in favor of the RTM Parties or
any of their wholly owned Subsidiaries in the ordinary course of business or (y)
endorsement of negotiable instruments in the ordinary course of business
consistent with past practice;
(i) LOANS. (i) Make any loans, advances or capital contributions to,
or investments in, any other Person, other than in the ordinary course of
business consistent
25
with past practice, or (ii) make any loans to its directors or officers, other
than travel and similar advances in the ordinary course of business consistent
with past practice;
(j) CAPITAL EXPENDITURES. Fail to make any capital expenditure,
including maintenance capital expenditures and capital expenditures for
remodeling of Restaurants, in accordance with the ordinary course of business
consistent with past practice;
(k) ACCOUNTING. Change its accounting policies or procedures, other
than as required by GAAP;
(l) LEGAL ACTIONS. Subject to Section 5.01(p), waive, release,
assign, settle or compromise any Legal Actions required to be disclosed pursuant
to Section 2.11, other than any such waiver, release, assignment, settlement or
compromise entered into in the ordinary course of business consistent with past
practice that (i) does not involve payment by RTMAC of more than $100,000 in any
one instance or multiple instances involving the same or related conduct, facts,
circumstances or events and (ii) does not require RTMAC to be bound by any
material restriction (other than customary confidentiality restrictions);
(m) INTELLECTUAL PROPERTY. Take any action or omit to take any
action that causes any material RTMAC Intellectual Property Rights to become
invalidated, abandoned or dedicated to the public domain;
(n) RTMAC REAL PROPERTY. (i) Enter into any RTMAC Real Property
Lease or acquire any real property, except in connection with acquisitions of
RTMAC Restaurants described in Section 5.01(e) of the RTMAC Disclosure Letter,
(ii) enter into any lease, sublease, license, concession or other Contract
granting to any Person or Persons the right to use or occupancy to any portion
of the parcel of any RTMAC Real Property, (iii) enter into any Contract relating
to the sale of any RTMAC Real Property, other than dispositions of RTMAC
Restaurants described in Section 5.01(f) of the RTMAC Disclosure Letter or (iv)
terminate, cancel or request any material change in any of the foregoing in
clauses (i), (ii) and (iii) above, other than in the case of this clause (iv) in
the ordinary course of business consistent with past practice; or
(o) RELATED ACTIONS. Authorize, commit or agree to do any of the
foregoing; and
(p) TAXES. (i) Prepare, in the ordinary course of business and
consistent with past practice (except as otherwise required by a change in
applicable law or a good faith resolution of a contest), and timely file all
material Tax Returns required to be filed by it on or before the Closing Date
("RTM POST-SIGNING RETURNS"); (ii) consult with Triarc with respect to all RTM
Post-Signing Returns other than income Tax Returns and deliver drafts of such
RTM Post-Signing Returns to Triarc no later than ten Business Days prior to the
date (including extensions) on which such RTM Post-Signing Returns are required
to be filed; (iii) fully and timely pay all Taxes due and payable in respect of
such RTM Post-Signing Returns that are so filed; (iv) properly reserve (and
reflect such
26
reserve in its books and records and financial statements), in accordance with
past practice and in the ordinary course of business, for all Taxes payable by
it for which no RTM Post-Signing Return is due prior to the Closing Date; and
(v) promptly notify Triarc of any suit, claim, action, investigation, proceeding
or audit with respect to income Taxes or any other material Tax (collectively,
"TAX ACTIONS"), pending against or with respect to RTMAC, and any settlement or
compromise of any such Tax Action.
Section 5.02 CONTROL OF BUSINESS PENDING CLOSING. Nothing contained
in this Agreement shall give Triarc or ARG, directly or indirectly, the right to
control or direct the operations of RTMAC prior to the Closing. Prior to the
Closing, RTMAC shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.01 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Prior to the Closing, the Sellers shall, and shall cause RTMAC
to: (A) provide to Triarc and its Representatives access at reasonable times
upon reasonable prior notice to the officers, employees, agents, properties,
books and records of RTMAC; and (B) furnish promptly such information concerning
RTMAC as Triarc or its Representatives may reasonably request, in each case to
the extent that such access or request does not unreasonably interfere with the
business or operations of RTMAC. No investigation conducted under this Section
6.01(a), however, will affect or be deemed to modify any representation or
warranty made in this Agreement.
(b) Triarc shall, and shall cause its Representatives and
Subsidiaries to, comply with all of the obligations of Triarc under, and the
Sellers shall, and shall cause their respective Representatives and RTMAC to,
comply with all of the obligations of RTMRG under, the Amended and Restated
Confidentiality Agreements, dated January 28, 2005 (the "CONFIDENTIALITY
AGREEMENTS"), between Triarc and RTMRG with respect to the information disclosed
under this Section 6.01.
Section 6.02 COMMERCIALLY REASONABLE EFFORTS. Prior to the Closing,
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with applicable Laws, each of the parties to this Agreement shall use
its commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable to
ensure that the conditions set forth in Article VIII are satisfied and to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements as promptly as practicable. Except as otherwise provided in Section
6.04(c), no party to this Agreement shall, or permit any of its respective
Subsidiaries to, take any action that could reasonably be expected to result in
any of the conditions set forth in Article VIII not being satisfied or
satisfaction of those conditions being delayed. Notwithstanding the foregoing,
it is understood and agreed
27
that Section 7.20 of the RTMRG Merger Agreement (and not this Section 6.02)
shall govern matters pertaining to the Trigger Event.
Section 6.03 NOTICES OF CERTAIN EVENTS.
(a) Prior to the Closing, Triarc shall notify the RTM
Representatives promptly of (i) any communication from any Person alleging that
the consent of such Person (or another Person) is or may be required in
connection with the transactions contemplated by this Agreement, (ii) any
communication from any Governmental Entity in connection with the transactions
contemplated by this Agreement, (iii) any material Legal Actions threatened or
commenced against or otherwise affecting ARG or any of its Subsidiaries or (iv)
any event, change, occurrence, circumstance or development between the date of
this Agreement and the Closing known to Triarc which would reasonably be
expected to result in the failure of any of the conditions set forth in Section
8.03(a) or Section 8.03(b).
(b) Prior to the Closing, the Sellers shall notify Triarc promptly
of (i) any communication from any Person alleging that the consent of such
Person (or another Person) is or may be required in connection with the
transactions contemplated by this Agreement, (ii) any communication from any
Governmental Entity in connection with the transactions contemplated by this
Agreement, (iii) any material Legal Actions threatened or commenced against or
otherwise affecting RTMAC or (iv) any event, change, occurrence, circumstance or
development between the date of this Agreement and the Closing known to any
Seller which would reasonably be expected to result in the failure of any of the
conditions set forth in Section 8.02(a) or Section 8.02(b).
Section 6.04 CONSENTS; FILINGS.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement and in accordance with applicable Laws, each of the
parties to this Agreement shall use its commercially reasonable efforts to (i)
obtain any consents, approvals or other authorizations required in connection
with the transactions contemplated by this Agreement and (ii) make any necessary
filings and notifications, and thereafter make any other submissions either
required or deemed appropriate by each of the parties to this Agreement, in
connection with the transactions contemplated by this Agreement under (A) the
Securities Act, the Exchange Act and state securities or "blue sky" Laws, (B)
the HSR Act, and (C) any other applicable Laws, including all real estate
transfer tax returns. Triarc and the Sellers shall cooperate and consult with
each other in connection with the making of all such filings and notifications.
Neither Triarc nor any of the Sellers shall consent to any voluntary extension
of any statutory deadline or waiting period or to any voluntary delay of the
consummation of the transactions contemplated by this Agreement at the behest of
any Governmental Entity without the consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed.
(b) Triarc shall promptly inform the RTM Representatives, and each
of the Sellers shall promptly inform Triarc, upon receipt of any communication
from the
28
Federal Trade Commission, the Department of Justice or any other Governmental
Entity regarding any of the transactions contemplated by this Agreement. If
Triarc or any of the Sellers (or any of their respective Affiliates) receives a
request for additional information from any such Governmental Entity that is
related to the transactions contemplated by this Agreement, then such party will
endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other party (or in the case of
Triarc, with the RTM Representatives), an appropriate response to such request.
Triarc shall advise the RTM Representatives promptly of any understandings,
undertakings or agreements (oral or written) which Triarc or any of its
Subsidiaries proposes to make or enter into with the Federal Trade Commission,
the Department of Justice or any other Governmental Entity in connection with
the transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, Triarc shall use its commercially reasonable
efforts to resolve any objections that may be asserted with respect to the
transactions contemplated by this Agreement under any antitrust, competition or
trade regulatory Laws.
(c) Notwithstanding the foregoing, nothing in this Section 6.04
shall require, or be construed to require, Triarc or any of the Sellers to agree
to (i) sell, hold separate, divest, discontinue or limit, before or after the
Closing Date, any assets, businesses or interest in any assets or businesses of
Triarc, RTMAC, any of the Sellers or any of their respective Affiliates, (ii)
any conditions relating to, or changes or restriction in, the operations of any
such assets or businesses which, in either case, would reasonably be expected to
(x) result in a Triarc Material Adverse Effect, an ARG Material Adverse Effect
or an RTMAC Material Adverse Effect or (y) materially and adversely impact the
economic or business benefits to Triarc and its stockholders of the transactions
contemplated by this Agreement or (iii) any modification or waiver of the terms
and conditions of this Agreement.
Section 6.05 ACTIONS WITH RESPECT TO DEBT FINANCING AND DEBT
REFINANCINGS.
(a) The Sellers shall, and shall cause RTMAC to, cooperate fully
with Triarc and its Affiliates in connection with the Debt Financing and Debt
Refinancings, including causing RTMAC and its Representatives to provide
reasonable cooperation in connection with the arrangement of any financing to be
consummated contemporaneously with or at or immediately after the Closing Date
in respect of the transactions contemplated by this Agreement or any Ancillary
Agreement, including reasonable participation in meetings, due diligence
sessions, road shows, provision of information, provision of financial
statements (including pro forma and interim financial statements), assistance in
rating agency process, the preparation of offering memoranda, private placement
memoranda, prospectuses and similar documents, the execution and delivery of any
customary underwriting or placement agreements, pledge and security documents,
other definitive financing documents, or other requested certificates or
documents, and including reasonable assistance with respect to obtaining
customary closing certificates, comfort letters of accountants, legal opinions
and real estate title documentation as may be reasonably requested by any
syndication agent, underwriter,
29
initial purchaser, arranger or placement agent with respect to all or a portion
of such financing.
(b) The Sellers shall, and shall cause RTMAC to, use commercially
reasonable efforts to obtain (at no cost or expense to ARG or any of its
Subsidiaries after the Closing) on or prior to the Closing Date payoff letters
to satisfy in full no later than sixty (60) days after the Closing Date each of
the Contracts governing the Indebtedness for borrowed money of any RTM Party or
its Subsidiaries or included in the Winners Indebtedness Amount and, if any such
payoff letter shall not have been obtained on or prior to the Closing Date, such
amendments, waivers and modifications (the "Required Debt Consents") to such
Contracts (x) as are necessary to permit all such Indebtedness (other than the
RTM Non-Prepayable Debt) to be prepaid no later than the earlier of sixty (60)
days after the Closing Date and the date any forbearance agreement in effect on
the Closing Date in respect of such Indebtedness shall expire after the Closing
Date and (y) with respect to the RTM Non-Prepayable Debt, that are identified in
Section 7.07(b) of the Triarc Disclosure Letter.
Section 6.06 NO SOLICITATION. From the date of this Agreement until
the Closing, each of the Sellers shall not, and shall cause each of their
respective Representatives and RTMAC not to, directly or indirectly (i) solicit,
initiate, facilitate or knowingly encourage any inquiries, offers or proposals
relating to a Takeover Proposal; (ii) engage in discussions or negotiations
with, or furnish or disclose any non public information relating to RTMAC to,
any Person that has made or indicated an intention to make a Takeover Proposal;
(iii) approve, endorse or recommend any Takeover Proposal; (iv) enter into any
agreement in principle, arrangement, understanding or Contract relating to a
Takeover Proposal; or (v) propose to do any of the foregoing or take any other
action inconsistent with the obligations of RTMAC and the Sellers under this
Section 6.06. Each of the Sellers shall promptly inform its Representatives and
RTMAC of its obligations under this Section 6.06. Each of the Sellers shall
notify Triarc promptly upon receipt of any Takeover Proposal or indication that
any Person is considering making a Takeover Proposal or any request for
non-public information relating to RTMAC. Each of the Sellers shall provide
Triarc promptly with the identity of such Person and a copy of such Takeover
Proposal, indication or request (or, where no such copy is available, a detailed
description of such Takeover Proposal).
Section 6.07 DEFENSE OF LITIGATION. Prior to the Closing, none of
the Sellers shall settle or offer to settle any Legal Action against such Seller
or RTMAC or any of its directors or officers arising out of or relating to this
Agreement or the Ancillary Agreements or the transactions contemplated by this
Agreement or the Ancillary Agreements without the prior written consent of
Triarc, which consent shall not be unreasonably withheld, delayed or
conditioned. Prior to the Closing, none of the Sellers shall cooperate with any
Person that may seek to restrain, enjoin, prohibit or otherwise oppose the
transactions contemplated by this Agreement or the Ancillary Agreements, and the
Sellers shall cooperate with the reasonable requests of Triarc in resisting any
such effort to restrain, enjoin, prohibit or otherwise oppose such transactions.
30
Section 6.08 EMPLOYEES AND EMPLOYEE BENEFITS, ETC.
(a) Except as otherwise agreed by Triarc and the RTM
Representatives, ARG shall, and shall cause its Subsidiaries to, retain in their
employ immediately after the Closing each of the employees of RTMAC, including
any employees on a leave of absence (the "RTMAC EMPLOYEES"), subject in each
case to the current terms of such employee's employment and the ability of
Triarc and its Subsidiaries in their sole discretion subsequent to the Closing
to terminate any such employee in accordance therewith.
(b) ARG shall be responsible for compliance with COBRA, including
the provision of continuation coverage with respect to all RTMAC Employees and
former employees of RTMAC and each of their qualified beneficiaries for whom a
qualifying event occurs prior to, on or after the Closing Date. The terms
"continuation coverage," "qualified beneficiaries," and "qualifying event" are
used herein with the meanings ascribed to them in COBRA.
(c) For the year in which the Closing occurs, Triarc shall cause
any welfare plan in which an RTMAC Employee who remains in the employ of ARG or
its Subsidiaries participates to credit such RTMAC Employee and his dependents
and beneficiaries with any deductible, co-payment and out-of-pocket expenses
incurred from January 1 through the Closing Date under the comparable welfare
plan in which the RTMAC Employee participates as of the Closing Date.
(d) In addition to the requirements of Section 6.08(a), for the
period beginning on the Closing Date and ending on January 2, 2006, 12:00
midnight Eastern time (the "TRANSITION PERIOD"), each RTMAC Employee who remains
in the employ of ARG or its Subsidiaries shall continue to participate in the
employee pension and welfare benefit plans of RTMRG in which such RTMAC Employee
participated immediately prior to the Closing Date.
(e) Each RTMAC Employee who remains in the employ of ARG or its
Subsidiaries shall be credited under the employee pension and welfare benefit
plans in which such RTMAC Employee shall become entitled to participate
following the end of the Transition Period (collectively, the "POST-TRANSITION
PERIOD BENEFIT PLANS") with all service credited under comparable plans of RTMAC
and its Subsidiaries, including but not limited to:
(i) under any Post-Transition Period Benefit Plan that is
a defined contribution plan, for purposes of eligibility to participate, vesting
and benefit levels;
(ii) under any Post-Transition Period Benefit Plan that
provides severance benefits, for purposes of eligibility to participate and the
calculation of the amount of the severance payment and other benefits;
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(iii) under any Post-Transition Period Benefit Plan that
provides for paid time off, for purposes of eligibility to participate and the
calculation of the amount to be accrued; and
(iv) under any Post-Transition Period Benefit Plan that
provides welfare benefits, for purposes of any waiting period requirements or
benefit level entitlements.
(f) Compensation and benefit packages for RTMAC Employees at or
above the Vice President level to be in effect as of the Closing Date shall be
subject to the approval of the RTM Representatives, not to be unreasonably
withheld, conditioned or delayed.
(g) RTMAC shall take all necessary actions to terminate each RTMAC
Employee Plan set forth on Section 6.08(g) of the RTMAC Disclosure Letter, in
each case effective as of immediately prior to the Closing and without any
Liability after the Closing to Triarc or any of their Affiliates.
(h) RTMAC shall take all necessary actions to cause the annual rate
of base salary of each RTMAC Employee whose name is set forth on Section 6.08(h)
of the RTMAC Disclosure Letter to equal the annual rate of base salary set forth
next to each such RTMAC Employee's name on such Section 6.08(h), in each case
effective as of immediately prior to the Closing.
(i) Not later than three months after the Closing Date (if the
Triarc B-1 Election shall have been made) or the date on which the shares of
Triarc Class B-2 Common Stock convert into shares of Triarc Class B-1 Common
Stock (if the Triarc B-2 Election shall have been made), Triarc shall request
that the Performance Compensation Subcommittee of its board of directors
consider granting to RTMAC Employees employed by ARG or any of its Subsidiaries
after the Closing Date options to purchase shares of Triarc B-1 Common Stock
under Triarc's 2002 Equity Participation Plan in such amounts and with such
exercise prices and other terms as the Performance Compensation Subcommittee
shall determine, in its sole discretion, taking into account the position held
and years of service to the Arby's restaurant system by each respective RTMAC
Employee.
Section 6.09 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) All rights to indemnification now existing in favor of any
director or officer of RTMAC (the "D&O INDEMNIFIED PARTIES") as provided in the
operating agreement of RTMAC, in agreements between a D&O Indemnified Party and
RTMAC, or otherwise in effect on the date of this Agreement shall, in each case,
survive the Purchase and the consummation of the other transactions contemplated
hereby and shall continue in full force and effect for a period of not less than
six years after the Closing.
(b) ARG shall cause RTMAC to indemnify all D&O Indemnified Parties
to the fullest extent permitted by applicable Laws with respect to all acts and
omissions arising out of or relating to its services as directors or officers of
RTMAC
32
occurring prior to the Closing. If any D&O Indemnified Party is or becomes
involved in any Legal Action in connection with any matter occurring prior to or
at the Closing, ARG shall cause RTMAC to pay as incurred such D&O Indemnified
Party's legal fees, costs and expenses incurred in connection with such Legal
Action, subject to ARG's receipt of an undertaking by or on behalf of such D&O
Indemnified Party to repay such legal fees, costs and expenses if it is
ultimately determined under applicable Laws that such D&O Indemnified Party is
not entitled to be indemnified.
(c) ARG shall cause RTMAC to obtain, for a period of six years after
the Closing, extended reporting or tail coverage on, or a substitute directors'
and officers' liability insurance policy for, the directors' and officers'
liability insurance policy maintained by RTMAC as of the date hereof for the
benefit of those persons who are covered by such policy immediately prior to the
Closing, on terms and conditions that are, in the aggregate, no less favorable
to the insured with respect to claims arising from acts or omissions arising
prior to and including the Closing than are currently in effect; PROVIDED, that
such extended reporting or tail coverage or such substitute policy, as the case
may be, can be obtained and maintained on commercially reasonable terms and at a
cost to RTMAC not greater than 150 percent of the aggregate annual premium for
the directors' and officers' liability insurance policy maintained by RTMAC on
the date hereof. If RTMAC is unable to obtain such coverage or policy for the
cost indicated in the preceding sentence, ARG shall cause RTMAC to procure the
most favorable coverage or policy, in ARG's reasonable judgment, that RTMAC can
reasonably obtain for the cost indicated in the preceding sentence.
Section 6.10 PUBLIC ANNOUNCEMENTS. Triarc shall consult with the RTM
Representatives, and the Sellers shall, and shall cause RTMAC to, consult with
Triarc, before issuing any press release or otherwise making any public
statements about this Agreement or any of the transactions contemplated by this
Agreement. Neither Triarc nor RTMAC or any of the Sellers shall issue or cause
to be issued any such press release or make any such public statement prior to
such consultation, except to the extent required by applicable Laws, in which
case that party shall use its commercially reasonable efforts to consult with
the other party before issuing any such release or making any such public
statement.
Section 6.11 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ COMPLIANCE. Prior to the Closing, the
Sellers shall cause RTMAC to take all actions that Triarc may deem necessary or
appropriate, and cooperate in the taking of such actions, to enable Triarc,
following the Closing, to satisfy the applicable obligations under Sections 302,
404 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated by the SEC pursuant thereto (as amended from time to time, the
"SOA") and the other requirements of the SOA, including establishing and
maintaining adequate disclosure controls and procedures and internal controls
over financial reporting as such terms are defined in the SOA.
Section 6.12 CHARITABLE COMMITMENTS. Prior to the Closing, the
Sellers shall cause RTMAC to fund in full and terminate each charitable
commitment described (or that should have been described) in Section
2.12(a)(xvii) of the RTMAC Disclosure Letter.
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ARTICLE VII
TAX MATTERS
Section 7.01 TAX INDEMNIFICATION.
(a) INDEMNIFICATION BY SELLERS. From and after the Closing Date,
the Sellers (jointly and severally) shall, subject to the applicable limitations
set forth in Article X, indemnify the Triarc Indemnified Parties against and
hold harmless from any and all liabilities, losses, damages, claims, costs,
expenses, interest, awards, judgments and penalties (including, without
limitation, reasonable fees for both in-house and outside counsel, accountants
and other outside consultants) suffered or incurred (each a "TAX LOSS" and
collectively, the "TAX LOSSES") arising out of:
(i) Taxes of RTMAC for periods or portions thereof ending
on or before the Closing Date ("PRE-CLOSING Taxes"), and Taxes of RTMAC
attributable to the RTMAC Transactions, in excess of the amount of Taxes which
are specifically identified as current liabilities (excluding any reserve for
deferred taxes established to reflect timing differences between book and Tax
income) on the RTM Closing Balance Sheet;
(ii) Taxes or other payments with respect to periods or
portions thereof ending on or before the Closing Date which are required to be
paid after the date hereof by RTMAC to any party under any Tax Sharing Agreement
(whether written or not) or by reason of being a successor-in-interest or
transferee of another entity; and
(iii) without duplication, Taxes imposed on Triarc or any
of its Subsidiaries as a result of (x) a breach of or inaccuracy in any
representation or warranty set forth in Section 2.13 or in the certificate
delivered by the RTM Representatives pursuant to Section 8.02(d) as of the date
such representation or warranty was made or as if such representation or
warranty were made on and as of the Closing Date (except for representations and
warranties that expressly relate to a specified date, the breach of or
inaccuracy in which will be determined with reference to such specified date) or
(y) a breach of any covenant or agreement set forth in Section 5.01(p) or this
Article VII, PROVIDED, that for purposes of this Section 7.01(a)(iii) only, a
breach of or inaccuracy in any representation, warranty, covenant or agreement
shall be determined without reference to any materiality qualifier with respect
thereto.
Notwithstanding the foregoing, the Sellers shall not be obligated to pay any
amounts under this Section 7.01(a) for any Tax Losses resulting from any
transaction of RTMAC on the Closing Date but after the Closing, other than any
transaction in the ordinary course of business and any RTMAC Transactions.
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(b) INDEMNIFICATION CALCULATIONS. All indemnification payments for
Tax Losses made pursuant to this Section 7.01, and for Losses made pursuant to
Section 10.02 and Section 10.04, shall be made on an after-tax basis.
Accordingly, in determining the amount of any indemnification payment for a Tax
Loss or Loss suffered or incurred by an indemnitee hereunder, the amount of such
Tax Loss or Loss shall be (i) increased to take into account any additional Tax
cost actually incurred by the indemnitee arising from the receipt of
indemnification payments hereunder ("TAX COSTS") and (ii) decreased to take into
account any deduction, credit or other tax benefit actually realized by the
indemnitee with respect to such Tax Loss or Loss ("TAX BENEFITS"). In computing
the amount of any such Tax Cost or Tax Benefit, the indemnitee shall be deemed
to recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnification payment
hereunder or the incurrence or payment of any indemnified Tax Loss or Loss;
PROVIDED, that if a Tax Cost or Tax Benefit is not realized in the taxable
period during which an indemnifying party makes an indemnification payment or
the indemnitee incurs or pays any Tax Loss or Loss, the parties hereto shall
thereafter make payments to one another at the end of each subsequent taxable
period to reflect the net Tax Costs and Tax Benefits realized by the parties
hereto in each such subsequent taxable period.
Section 7.02 TAX INDEMNIFICATION PROCEDURES.
(a) After the Closing, Triarc shall promptly notify the RTM
Representatives in writing of any demand, claim or notice of the commencement of
an audit received by such party from any Governmental Entity or any other Person
with respect to Taxes for which the Sellers are liable pursuant to Section 7.01;
PROVIDED, HOWEVER, that a failure to give such notice will not affect the Triarc
Indemnified Parties' rights to indemnification under this Article VII, except to
the extent the Sellers are actually prejudiced thereby. Such notice shall
contain factual information (to the extent known) describing the asserted Tax
liability and shall include copies of the relevant portion of any notice or
other document received from any Governmental Entity or any other Person in
respect of any such asserted Tax liability.
(b) Payment by the Sellers of any amount due to the Triarc
Indemnified Parties under this Article VII shall be made within ten days
following written notice by a Triarc Indemnified Party that payment of such
amounts to the appropriate Governmental Entity or other applicable third party
is due by a Triarc Indemnified Party, provided, that the Sellers shall not be
required to make any payment earlier than five Business Days before it is due to
the appropriate Governmental Entity or applicable third party. In the case of a
Tax that is contested in accordance with the provisions of Section 7.03, payment
of such contested Tax will not be considered due earlier than the date a "final
determination" to such effect is made by such Governmental Entity or a court of
competent jurisdiction. For this purpose, a "final determination" shall mean a
settlement, compromise, or other agreement with the relevant Governmental
Entity, whether contained in an IRS Form 870 or other comparable form, or
otherwise, or such procedurally later event, such as a closing agreement with
the relevant Governmental Entity, and agreement contained in an IRS Form 870-D
or other comparable form, an agreement that constitutes a "determination" under
35
Section 1313(a)(4) of the Code, a deficiency notice with respect to which the
period for filing a petition with the Tax Court or the relevant state, local or
foreign tribunal has expired or a decision of any court of competent
jurisdiction that is not subject to appeal or as to which the time for appeal
has expired.
(c) All amounts required to be paid pursuant to this Article VII
shall be paid promptly in immediately available funds by wire transfer to a bank
account designated by the indemnified party. In seeking indemnification under
this Article VII against the Sellers, the Triarc Indemnified Parties shall first
exercise its remedies with respect to the RTM Escrow Fund pursuant to the Escrow
Agreement and, if the RTM Escrow Fund has been exhausted in full, with respect
to the Sellers (individually or jointly) directly pursuant to this Agreement.
(d) Any payments required pursuant to this Article VII that are
not made within the time period specified in this Section 7.02 shall bear
interest at a rate and in the manner provided in the Code for interest on
underpayments of federal income Tax and, in the case of payments related to
Taxes other than U.S. federal income Taxes, at a rate and in the manner provided
under applicable Law for underpayments of such Tax.
Section 7.03 RTM TAX AUDITS AND CONTESTS; COOPERATION.
(a) After the Closing Date, the RTM Representatives shall control
the conduct, through counsel of their own choosing, of any audit, claim for
refund, or administrative or judicial proceeding involving any asserted Tax
liability or refund (any such audit, claim for refund, or proceeding relating to
an asserted Tax liability referred to herein as a "CONTEST") that relates solely
to Taxes for which the Triarc Indemnified Parties are indemnified under Section
7.01(a), but Triarc shall have the right to participate in such Contest at its
own expense, and the RTM Representatives shall not settle, compromise and/or
concede any portion of such Contest that is reasonably likely to affect the Tax
liability of Triarc or its Subsidiaries for any taxable year (or portion
thereof) beginning after the Closing Date without the consent of Triarc, which
consent shall not be unreasonably withheld, conditioned or delayed; PROVIDED,
that if the RTM Representatives fail to assume control of the conduct of any
such Contest within a reasonable period following the receipt by the RTM
Representatives of notice of such Contest, Triarc shall have the right to assume
control of such Contest and shall be able to settle, compromise and/or concede
such Contest in its sole discretion.
(b) After the Closing Date, subject to Section 7.03(a), Triarc
shall control the conduct of any Contest pertaining to RTMAC, but the RTM
Representatives shall have the right to participate in any such Contest that
relates to Taxes for which the Triarc Indemnified Parties are indemnified under
Section 7.01(a) ("PARTICIPATION CONTEST") at their own expense and Triarc shall
not settle, compromise and/or concede any portion of such Participation Contest
if such resolution is reasonably likely to give rise to a Tax liability for
which the Triarc Indemnified Parties are indemnified under Section 7.01(a),
without the consent of the RTM Representatives, which consent shall not be
unreasonably withheld, conditioned or delayed; PROVIDED, that if Triarc fails to
assume control of the conduct of any such Participation Contest within a
reasonable
36
period following the receipt by Triarc of notice of such Participation Contest,
the RTM Representatives shall have the right to assume control of such
Participation Contest and shall be able to settle, compromise and/or concede
such Participation Contest in its sole discretion.
(c) Triarc and the RTM Representatives agree to furnish or cause
to be furnished to each other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance relating to
RTMAC as is reasonably requested for the filing of any Tax Returns and the
preparation, prosecution, defense or conduct of any Contest. Triarc and the RTM
Representatives shall reasonably cooperate with each other in the conduct of any
Contest or other proceeding involving or otherwise relating to RTMAC (or its
income or assets) with respect to any Tax and each shall execute and deliver
such powers of attorney and other documents as are necessary to carry out the
intent of this Section 7.03(c). Without limiting the foregoing, Triarc shall
make available to the RTM Representatives promptly upon written request and for
as much time as reasonably required for purposes of reviewing or filing any Tax
Returns or conducting any Contest or other Tax proceeding related to Taxes of
RTMAC for Taxable periods (or portions thereof) ending on or before the Closing
Date any one or more of those employees of RTMAC or Triarc or their controlled
Affiliates (as specifically requested by the RTM Representatives) who prior to
the Closing were involved in the preparation of Tax Returns or the conduct of
Contests or other Tax proceedings for the benefit of RTMAC; PROVIDED, that
neither Triarc nor any of its controlled Affiliates shall have any obligation to
continue the employment of any employees; and PROVIDED, further, neither Triarc
nor any of its controlled Affiliates shall have any Liability to the RTM
Representatives for the acts or omissions of its employees under this Section
7.03(c). The parties agree that nothing in this Section 7.03(c) shall require
any of Triarc or its Affiliates to undertake any action that could unreasonably
interfere with, or otherwise cause an undue burden on, the activities of Triarc
or its Subsidiaries. The RTM Representatives shall reimburse Triarc for Triarc's
or its controlled Affiliates' reasonable costs, including allocated direct and
indirect costs, in satisfying its obligations under this Section 7.03(c) with
respect to the RTM Representatives. Any information obtained under this Section
7.03(c) shall be kept confidential, except as may be otherwise necessary in
connection with the filing of Tax Returns or in the conduct of a Contest or
other Tax proceeding.
(d) Triarc and its Subsidiaries shall (i) properly retain and
maintain the Tax and accounting records of RTMAC that are in its possession
after the Closing Date and that relate to Pre-Closing Taxable Periods for seven
years and shall thereafter provide the RTM Representatives with written notice
prior to any destruction, abandonment or disposition of all or any portions of
such records of RTMAC, (ii) transfer such records to the RTM Representatives
upon their written request prior to any such destruction, abandonment or
disposition and (iii) allow the RTM Representatives and their Representatives,
at times and dates reasonably and mutually acceptable to the parties, to from
time to time inspect and review such records as the RTM Representatives may deem
necessary or appropriate; PROVIDED, HOWEVER, that in all cases, such activities
are to be conducted by the RTM Representatives during normal business hours and
at the sole expense of the Sellers. Any information obtained under this Section
7.03(d) shall be kept
37
confidential, except as may be otherwise necessary in connection with the filing
of Tax Returns or in the conduct of a Contest or other Tax proceeding.
Section 7.04 PREPARATION OF TAX RETURNS AND PAYMENT OF TAXES.
(a) Triarc shall prepare (or cause to be prepared), and timely file
all Tax Returns of RTMAC that are required to be filed with any Governmental
Entity after the Closing Date other than Pre-Closing Income Tax Returns, and
shall pay (or cause to be paid) any Taxes due in respect of such Tax Returns.
With respect to any such Tax Returns filed with respect to any taxable periods
(or portions thereof) ending on or before the Closing Date ("PRE-CLOSING TAXABLE
PERIODS"), the Sellers shall be responsible for the Pre-Closing Taxes due in
respect of such Tax Returns for RTMAC, to the extent that the aggregate amount
of Pre-Closing Taxes due in respect of all such Tax Returns exceeds the amount
of Taxes that are specifically identified as current liabilities (excluding any
reserve for deferred taxes established to reflect timing differences between
book and Tax income) on the RTM Closing Balance Sheet, and Triarc shall, subject
to Section 7.01(a), be responsible for all other Pre-Closing Taxes shown as due
on such Tax Returns. Triarc shall notify the RTM Representatives of any amounts
due from the Sellers in respect of any such Tax Return no later than ten
Business Days prior to the date on which such Tax Return is due, and the Sellers
shall remit such payment to Triarc no later than five Business Days prior to the
date such Tax Return is due.
(b) In the case of any income Tax Returns of RTMAC with respect to
any Taxable periods ending on or before the Closing Date ("PRE-CLOSING INCOME
TAX RETURNS"), Triarc shall prepare (or cause to be prepared) such Tax Returns
in a manner consistent with past practice, except as otherwise required by a
change of law or a good faith resolution of a contest; PROVIDED, that RTM
Representatives shall reimburse Triarc and its Subsidiaries for their reasonable
costs, including allocated direct and indirect costs, in preparing such Tax
Returns; PROVIDED, FURTHER, that the RTM Representatives shall be responsible
for signing and filing any such Tax Returns as prepared in accordance with this
Section 7.04(b) and the Sellers shall be responsible for any Taxes shown to be
due on such Tax Returns. In the case of Tax Returns that are filed with respect
to a taxable period that ends on or prior to the Closing Date and Pre-Closing
Income Tax Returns, Triarc shall prepare (or cause to be prepared) such Tax
Return in a manner consistent with past practice, except as otherwise required
by a change in law or a good faith resolution of a contest, and shall deliver
any such Tax Return to the RTM Representatives for their review at least 30 days
prior to the date such Tax Return is required to be filed. If the RTM
Representatives dispute any item on such Tax Return, they shall notify Triarc of
such disputed item (or items) and the basis for its objection. The parties shall
act in good faith to resolve any such dispute prior to the date on which the
relevant Tax Return is required to be filed. If the parties cannot resolve any
disputed item, the item in question shall be resolved by the Independent
Accountants. In the case of Tax Returns other than Pre-Closing Income Tax
Returns, the fees and expenses of the Independent Accountants shall be borne
equally by Triarc and the RTM Representatives; and in the case of Pre-Closing
Income Tax Returns, the fees and expenses of the Independent Accountants shall
be borne by the RTM Representatives.
38
(c) With respect to Tax Returns that are required to be filed by or
with respect to RTMAC for a period that begins before and ends after the Closing
Date ("STRADDLE RETURNS"), such Straddle Returns shall be prepared in a manner
consistent with past practice (except as otherwise required by a change in law
or a good faith resolution of a contest), and the Sellers shall be responsible
for the Pre-Closing Taxes due in respect of such Straddle Returns in excess of
the amount of such Taxes which are specifically identified as current
liabilities (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) on the RTM Closing Balance
Sheet. Triarc shall notify the RTM Representatives of any amounts due from the
Sellers in respect of any Straddle Return no later than ten Business Days prior
to the date on which such Straddle Return is due, and the Sellers shall remit
such payment to Triarc no later than five Business Days prior to the date such
Straddle Return is due. Triarc shall deliver any Straddle Return to the RTM
Representatives for their review at least 30 days prior to the date on which
such Tax Return is required to be filed. If the RTM Representatives dispute any
item on such Tax Return, they shall notify Triarc of such disputed item (or
items) and the basis for their objection. The parties shall act in good faith to
resolve any such dispute prior to the date on which the relevant Tax Return is
required to be filed. If the parties cannot resolve any disputed item, the item
in question shall be resolved by the Independent Accountants. The fees and
expenses of the Independent Accountants shall be borne equally by Triarc and the
RTM Representatives.
(d) Neither Triarc nor any of its Affiliates shall (or shall cause
or permit any of their Subsidiaries to) amend, refile or otherwise modify any
Tax Return relating in whole or in part to RTMAC with respect to any Pre-Closing
Taxable Period without the written consent of the RTM Representatives, which
consent shall not be unreasonably withheld, conditioned or delayed.
Section 7.05 STRADDLE PERIODS. For purposes of this Agreement, in the
case of any Taxes of RTMAC that are payable with respect to any tax period that
begins before and ends after the Closing Date (a "STRADDLE PERIOD"), the portion
of any such Taxes that constitutes Pre-Closing Taxes shall: (i) in the case of
Taxes that are either (x) based upon or related to income or receipts, or (y)
imposed in connection with any sale, transfer or assignment or any deemed sale,
transfer or assignment of property (real or personal, tangible or intangible),
be deemed equal to the amount that would be payable if the tax year or period
ended on the Closing Date; and (ii) in the case of Taxes (other than those
described in clause (i) above) that are imposed on a periodic basis with respect
to the business or assets of RTMAC or otherwise measured by the level of any
item, be deemed to be the amount of such Taxes for the entire Straddle Period
(or, in the case of such Taxes determined on an arrears basis, the amount of
such Taxes for the immediately preceding Tax period) multiplied by a fraction
the numerator of which is the number of calendar days in the portion of the
Straddle Period ending on the Closing Date and the denominator of which is the
number of calendar days in the entire Straddle Period. For purposes of clause
(i) of the preceding sentence, any exemption, deduction, credit or other item
(including, without limitation, the effect of any graduated rates of tax) that
is calculated on an annual basis shall be allocated to the portion of the
Straddle Period ending on the Closing Date on a pro rata basis determined by
multiplying the total
39
amount of such item allocated to the Straddle Period times a fraction, the
numerator of which is the number of calendar days in the portion of the Straddle
Period ending on the Closing Date and the denominator of which is the number of
calendar days in the entire Straddle Period. In the case of any Tax based upon
or measured by capital (including net worth or long-term debt) or intangibles,
any amount thereof required to be allocated under this Section 7.05 shall be
computed by reference to the level of such items on the Closing Date. The
parties hereto will, to the extent permitted by applicable Law, elect with the
relevant Governmental Entity to treat a portion of any Straddle Period as a
short taxable period ending as of the close of business on the Closing Date.
Section 7.06 REFUNDS.
(a) Each of the Sellers (with respect to RTMAC) shall be entitled
to all credits and refunds (including interest received thereon) in respect of
any Pre-Closing Taxable Period relating to RTMAC. All credits and refunds
(including interest received thereon) in respect of any Straddle Period shall be
equitably apportioned between the Sellers pursuant to the principles set forth
in Section 7.05. Triarc shall cause each such refund to which the Sellers are
entitled to be paid to the Sellers promptly following its receipt.
(b) Except as provided in Section 7.06(a), Triarc and its
Subsidiaries (including RTMAC) shall be entitled to all credits and refunds
(including interest received thereon) in respect of any Taxes of Triarc and its
Subsidiaries (including RTMAC).
Section 7.07 CONVEYANCE TAXES. ARG shall pay all sales, use, value
added, transfer, stamp, registration, documentary, excise, real property
transfer or gains, or similar Taxes ("TRANSFER TAXES") incurred solely as a
result of the purchase and sale of the Membership Interests; and RTMAC and
Triarc agree to jointly file all required change of ownership and similar
statements.
Section 7.08 TERMINATION OF TAX SHARING AGREEMENTS. Any and all Tax
Sharing Agreements between RTMAC, on the one hand, and the Sellers and their
Affiliates, on the other hand, shall be terminated as to RTMAC as of the Closing
Date, and RTMAC shall not be obligated to make any payment pursuant to any such
Tax Sharing Agreement for any past or future period.
Section 7.09 SECTION 754 ELECTION. At Triarc's written request, each
of the Sellers shall cause RTMAC to make an election under Section 754 of the
Code (and any similar state, local or foreign Law), or ensure that such election
is in effect, for the taxable year in which the transfers of the Membership
Interests contemplated by this Agreement occur, and the RTM Representatives
shall cooperate with Triarc in the preparation and filing of IRS Form 1065 and
any other forms required in connection with making such an election, including
the execution of these forms where required.
Section 7.10 TAX TREATMENT. So long as the amendment contemplated
by Section 8.13 of the RTMRG Merger Agreement shall have been made prior to the
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Closing Date and the Allocation Requirement is satisfied, Triarc and the Sellers
shall file, and shall cause their respective Affiliates to file, all Federal
income Tax Returns in a manner consistent with the Purchase Price Allocation and
shall take no position contrary thereto for any Federal income Tax purposes,
unless otherwise required to do so by a good faith resolution of a contest or a
change in applicable law. The parties, each acting in good faith, shall attempt
to agree on the manner in which such amounts allocated to the Membership
Interests under the Purchase Price Allocation, and any liabilities of RTMAC, are
further allocated among the assets of RTMAC for Federal income Tax purposes and,
failing to reach agreement prior to the Closing, each shall be permitted to
report and allocate such amounts among the assets of RTMAC in their independent
and sole discretion.
Section 7.11 RTMAC ASSET RANGE. RTMAC and the Sellers agree that
the Aggregate Purchase Price, and any amounts treated as an adjustment to the
Aggregate Purchase Price pursuant to Section 10.08, shall be such amount
necessary to cause the aggregate amount allocated to the assets of RTMAC to be
an amount within the RTMAC Asset Range.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
PURCHASE. The respective obligation of each party to this Agreement to effect
the Purchase is subject to the satisfaction or waiver by Triarc and the RTM
Representatives on or prior to the Closing Date of each of the following
conditions:
(a) ANTITRUST. The waiting period applicable to the consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements
under the HSR Act shall have expired or been terminated.
(b) CONSENTS. All material consents, approvals and other
authorizations of any Governmental Entity required to consummate the Purchase
and the other transactions contemplated by this Agreement and the Ancillary
Agreements (other than the filing of the First Certificate of Merger with the
Secretary of State of the State of Georgia and the Second Certificate of Merger
with the Secretaries of State of the States of Delaware and Georgia pursuant to
the RTMRG Merger Agreement) shall have been obtained.
(c) NO INJUNCTIONS OR RESTRAINTS. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any Laws or Orders (whether
temporary, preliminary or permanent) that (i) restrain, enjoin or otherwise
prohibit consummation of the transactions contemplated by this Agreement or the
Ancillary Agreements or (ii) could reasonably be expected to have an RTMAC
Material Adverse Effect. No Governmental Entity shall have instituted any
proceeding seeking any such Orders.
41
(d) MERGERS. The Mergers shall be consummated simultaneously with
the Purchase.
(e) RTMMC PURCHASE. The RTMMC Purchase shall be consummated
simultaneously with the Purchase.
Section 8.02 CONDITIONS TO OBLIGATIONS OF TRIARC AND ARG TO EFFECT
THE PURCHASE. The obligations of Triarc and ARG to effect the Purchase are also
subject to the satisfaction or waiver by Triarc (in its sole discretion) on or
prior to the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Other than the representations
and warranties of the Sellers contained in Section 2.01 (the first sentence
only), Section 2.02, Section 2.03, Section 2.07(c) (the penultimate sentence
only), Section 2.08, Section 3.01 and Section 3.02, the representations and
warranties of the Sellers contained in this Agreement (as such representations
and warranties would read if all limitations or qualifications therein as to
materiality or RTMAC Material Adverse Effect (or similar concept) were deleted
therefrom) shall be true and correct in all respects as of the date of this
Agreement and shall be true and correct in all respects as of the Closing Date
as if made on and as of the Closing Date (except for any representations and
warranties made as of a specific date, the accuracy of which shall be determined
by reference to such specific date), unless the failure or failures of such
representations and warranties to be so true and correct in all respects has not
had and would not reasonably be expected to have, individually or in the
aggregate, an RTMAC Material Adverse Effect. The representations and warranties
of the Sellers contained in Section 2.01 (the first sentence only), Section
2.02, Section 2.03, Section 2.07(c) (the penultimate sentence only), Section
2.08, Section 3.01 and Section 3.02 shall be true and correct in all respects as
of the Closing Date as if made on and as of the Closing Date (except for any
such representations and warranties made as of a specific date, the accuracy of
which shall be determined by reference to such specific date).
(b) PERFORMANCE OF OBLIGATIONS. The Sellers shall have performed
in all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date.
(c) RTM MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall not have occurred any event, and there shall not exist any condition
or set of circumstances, that has had or could reasonably be expected to have,
individually or in the aggregate, an RTM Material Adverse Effect.
(d) CERTIFICATE. Triarc shall have received a certificate signed
by the RTM Representatives, certifying as to the matters set forth in Section
8.02(a), Section 8.02(b) and Section 8.02(c).
(e) CONSENTS UNDER AGREEMENTS. The Sellers shall have obtained
the consent, approval, waiver or other authorization of each Person, if any,
listed on Section 8.02(e) of the RTMAC Disclosure Letter.
42
(f) ESCROW AGREEMENT. Triarc shall have received a duly executed
copy of the Escrow Agreement from each of the RTMRG Shareholders, each of the
Sellers, RTMMC, each of the RTMMC Members, each of the RTM Representatives and
the Escrow Agent.
(g) RTMAC RELATED PARTY ARRANGEMENTS. Triarc shall have received
reasonably satisfactory evidence of the termination, cancellation and repayment
or settlement in full prior to or in connection with the Closing of each RTMAC
Related Party Arrangement, including the repayment of any Indebtedness or
obligation owed by an RTM Related Entity or a shareholder, member, officer or
director of an RTM Party or any of its Subsidiaries to RTMAC (other than as set
forth in Section 8.02(g) of the RTMAC Disclosure Letter).
(h) CERTAIN OFFICER RESIGNATIONS. Each of the officers of RTMAC
listed in Section 9.02(k) of the Triarc Disclosure Letter shall have tendered
his resignation, effective as of the Closing, without any Liability after the
Closing to RTMAC, Triarc or any of its Affiliates (other than rights under this
Agreement, the RTMRG Merger Agreement or the RTMMC Purchase Agreement and to the
extent included in current liabilities in RTM Estimated Net Liabilities or RTM
Closing Net Liabilities, unpaid salary and bonus and unreimbursed reasonable
business expenses incurred in the ordinary course of business consistent with
past practice).
(i) RTMMC AND RTMAC PURCHASE. The Aggregate Purchase Price, and
any amounts treated as an adjustment to the Aggregate Purchase Price pursuant to
Section 10.08, shall not cause the aggregate amount allocated to the assets of
RTMAC to be other than an amount within the RTMAC Asset Range, and the sum of
the RTMMC Aggregate Purchase Price, and any amounts treated as an adjustment to
the RTMMC Aggregate Purchase Price pursuant to Section 10.08 of the RTMMC
Purchase Agreement, and the RTMMC Assumed Liabilities will not be other than an
amount within the RTMMC Asset Range (the "ALLOCATION REQUIREMENT").
Section 8.03 CONDITIONS TO OBLIGATIONS OF THE SELLERS TO EFFECT
THE PURCHASE. The obligations of the Sellers to effect the Purchase are also
subject to the satisfaction or waiver by the RTM Representatives (in their sole
discretion) on or prior to the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Other than the representations
of Triarc contained in Section 4.01 (the first sentence only) and Section 4.02,
the representations and warranties of Triarc and ARG contained in this Agreement
(as such representations and warranties would read if all limitations or
qualifications therein as to materiality or material adverse effect (or similar
concept) were deleted therefrom) shall be true and correct in all respects as of
the date of this Agreement and shall be true and correct in all respects as of
the Closing Date as if made on and as of the Closing Date (except for any such
representations and warranties made as of a specific date, the accuracy of which
shall be determined by reference to such specific date), unless the failure or
failures to be so true and correct in all respects has not had and would not
reasonably be expected to have, individually or in the aggregate, a Triarc
Material
43
Adverse Effect. The representations and warranties of Triarc contained in
Section 4.01 (the first sentence only) and Section 4.02 shall be true and
correct in all respects as of the Closing Date as if made on and as of the
Closing Date (except for any such representations and warranties made as of a
specific date, the accuracy of which shall be determined by reference to such
specific date).
(b) PERFORMANCE OF OBLIGATIONS. Triarc and ARG shall have performed
in all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date.
(c) OFFICER'S CERTIFICATE. The Sellers shall have received a
certificate, signed on behalf of Triarc by the chief executive officer or chief
financial officer of Triarc, certifying as to the matters set forth in Section
8.03(a) and Section 8.03(b).
(d) CONSENTS UNDER AGREEMENTS. Triarc shall have obtained the
consent, approval, waiver or other authorization of each Person, if any, listed
on Section 9.03(e) of the Triarc Disclosure Letter.
(e) ESCROW AGREEMENT. The Sellers shall have received a duly
executed copy of the Escrow Agreement from each of Triarc, ARG and the Escrow
Agent. Section 8.04 FRUSTRATION OF CLOSING CONDITIONS. None of the parties to
this Agreement may rely on the failure of any condition set forth in this
Article VIII to be satisfied if such failure was caused by such party's failure
to use commercially reasonable efforts to consummate the Purchase and the other
transactions contemplated by this Agreement and the Ancillary Agreements.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.01 GROUNDS FOR TERMINATION. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written consent of Triarc and the RTM Representatives;
(b) by either Triarc or the RTM Representatives:
(i) if the Purchase has not been consummated by November
15, 2005, except that the right to terminate this Agreement under this clause
(b)(i) shall not be available to any party to this Agreement whose failure to
fulfill any of its obligations has been a principal cause of, or resulted in,
the failure to consummate the Purchase by such date;
(ii) if any Law prohibits consummation of the Mergers, the
Purchase or the RTMMC Purchase; or
44
(iii) if any Order restrains, enjoins or otherwise prohibits
consummation of the Mergers, the Purchase or the RTMMC Purchase, and such Order
has become final and nonappealable;
(c) by Triarc, if the Sellers breach any of their representations,
warranties, covenants or agreements contained in this Agreement, which breach
(i) would give rise to the failure of a condition set forth in Section 8.02(a),
Section 8.02(b) or Section 8.02(c) and (ii) has not been cured by the Sellers
within 20 Business Days after the RTM Representatives' receipt of written notice
of such breach from Triarc; or
(d) by the RTM Representatives, if either Triarc or ARG breaches
any of its representations, warranties, covenants or agreements contained in
this Agreement, which breach (i) would give rise to the failure of a condition
set forth in Section 8.03(a) or Section 8.03(b) and (ii) has not been cured by
Triarc or ARG within 20 Business Days after Triarc's receipt of written notice
of such breach from the RTM Representatives.
Section 9.02 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 9.01, it shall become void and of no further force and
effect, with no Liability on the part of any party to this Agreement (or any
stockholder, member, director, officer, employee, agent or representative of
such party), except that if such termination results from the willful (a)
failure of any party to perform its obligations or (b) breach by any party of
its representations or warranties contained in this Agreement, then such party
shall be fully liable for any Liabilities incurred or suffered by the other
parties as a result of such failure or breach. The provisions of this Section
9.02 and Article XI shall survive any termination of this Agreement.
Section 9.03 AMENDMENT. This Agreement may be amended by the parties
to this Agreement at any time. This Agreement may not be amended except by an
instrument in writing signed by each of Triarc, ARG and the RTM Representatives
on behalf of the Sellers.
Section 9.04 EXTENSION; WAIVER. Triarc and ARG, on the one hand, and
the RTM Representatives on behalf of the Sellers, on the other hand, may (a)
extend the time for the performance of any of the obligations of the other
party, (b) waive any inaccuracies in the representations and warranties of the
other party contained in this Agreement or in any document delivered under this
Agreement or (c) subject to applicable Laws, waive compliance with any of the
covenants or conditions contained in this Agreement. Any agreement on the part
of a party to any extension or waiver shall be valid only if set forth in an
instrument in writing signed by such party (or, in the case of the Sellers, the
RTM Representatives). The failure of any part to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights.
45
ARTICLE X
SURVIVAL; INDEMNIFICATION
Section 10.01 SURVIVAL. The express representations and warranties of
each party set forth in this Agreement constitute the sole and exclusive
obligation or duty of such party to the other party with respect to the
disclosure of material facts relating to the transactions contemplated by this
Agreement, and each of the parties, in deciding whether to enter into this
Agreement and to consummate the transactions contemplated hereby, is not relying
on any general obligation to disclose imposed by applicable Laws. All such
representations, warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing. All representations
and warranties contained in this Agreement shall terminate and expire 18 months
after the Closing Date; PROVIDED, HOWEVER, that Claims asserted in good faith
with reasonable specificity (to the extent known at such time) and in writing by
notice from either party to the breaching party prior to such date shall not
thereafter be barred by the expiration of the relevant representation or
warranty to the extent that it relates to such Claims; PROVIDED, FURTHER, that
the representations and warranties contained in (a) Section 2.16 shall terminate
and expire three years after the Closing Date; (b) Section 2.01 (first sentence
only), Section 2.02, Section 2.03, Section 2.27, Section 3.01, Section 3.02,
Section 4.01, Section 4.02 and Section 4.05, shall survive without limitation;
and (c) Section 2.13 and Section 2.14 shall terminate and expire on the date
which is 90 days after the date upon which the Liability to which any claim
based upon, arising out of or otherwise in respect of any inaccuracy or breach
of any such representation or warranty may relate is barred by all applicable
statutes of limitations (including all periods of extension, whether automatic
or permissive). Except as otherwise expressly provided in this Agreement, the
covenants and agreements contained in this Agreement shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
Section 10.02 OBLIGATION OF ARG TO INDEMNIFY. Subject to the
limitations contained in this Article X, from and after the Closing, ARG (but
not Triarc) agrees to indemnify, defend and hold harmless each Seller and its
Representatives, successors and assigns (collectively, the "SELLER INDEMNIFIED
PARTIES") from and against all Losses based upon or arising from:
(a) any breach of or inaccuracy in any representation or warranty
of Triarc or ARG contained in this Agreement or in the certificate delivered by
Triarc pursuant to Section 8.03(c), as of the date such representation or
warranty was made or as if such representation or warranty were made on and as
of the Closing Date (except for representations and warranties that expressly
relate to a specified date, the breach of or inaccuracy in which will be
determined with reference to such specified date);
(b) any breach of any covenant or agreement of Triarc or ARG
contained in this Agreement; or
46
(c) enforcing the indemnification provided for in this Section
10.02, but only if a court of competent jurisdiction determines in a final,
nonappealable judgment that such Seller Indemnified Party is entitled to
indemnification under Section 10.02(a) or Section 10.02(b), as applicable.
Section 10.03 MATTERS PERTAINING TO INDEMNIFICATION BY ARG. The
indemnification provided for in Section 10.02 shall be subject to the following
limitations:
(a) ARG shall not be obligated to pay any amounts in respect of
indemnification obligations under Section 10.02(a), except those based upon or
arising from Section 4.01 (first sentence only), Section 4.02 or Section 4.05
(the "ARG BASKET EXCLUSIONS"), until the aggregate amounts for indemnification
in respect of indemnification obligations under (i) such Section, except those
based upon or arising from the ARG Basket Exclusions, and (ii) Section 10.02(a)
of the RTMMC Purchase Agreement, except those based upon or arising from the ARG
Basket Exclusions (as defined therein), equals $4 million (the "ARG BASKET
AMOUNT"), after which ARG shall be obligated to pay in full all such amounts for
such indemnification in excess of the ARG Basket Amount. ARG shall not be
obligated to pay any amounts for indemnification under Section 10.02(a), except
those based upon or arising from the ARG Basket Exclusions, for any particular
Loss unless the amount of such Loss (together with the amount of all other
similar or related Losses under this Agreement and the RTMMC Purchase Agreement
involving the same or related conduct, facts, circumstances or events) exceeds
$75,000; for the avoidance of doubt, any amounts for indemnification that ARG is
not obligated to pay pursuant to this sentence shall not be included in
computing whether the ARG Basket Amount shall have been exceeded.
(b) ARG shall be obligated to pay any amounts for indemnification
based on the ARG Basket Exclusions without regard to the individual or aggregate
amounts thereof and without regard to whether all other indemnification payments
shall have exceeded, in the aggregate, the ARG Basket Amount.
(c) The maximum amount of indemnification payments under Section
10.02(a) of this Agreement and Section 10.02(a) of the RTMMC Purchase Agreement
to which the Seller Indemnified Parties shall be entitled to receive (other than
indemnification in connection with any of the ARG Basket Exclusions) shall not
exceed in the aggregate an amount equal to $40 million. ARG shall not be liable
for indemnification under this Agreement or the RTMMC Purchase Agreement in an
aggregate amount in excess of the sum of the Aggregate Merger Consideration, the
RTMMC Purchase Price and the Aggregate Purchase Price.
(d) For purposes of determining whether a representation, warranty,
covenant or agreement has been breached or is inaccurate, limitations or
qualifications as to dollar amount, materiality, Triarc Material Adverse Effect
or ARG Material Adverse Effect (or similar concept) set forth in such
representation, warranty, covenant or agreement shall not be disregarded, but if
a breach or inaccuracy is so determined, then the amount of any Loss determined
arising from such breach or inaccuracy of such
47
representation, warranty, covenant or agreement shall be determined without
regard to any limitation or qualification as to dollar amount, materiality,
Triarc Material Adverse Effect or ARG Material Adverse Effect (or similar
concept) set forth in such representation, warranty, covenant or agreement.
(e) Indemnification of a Seller Indemnified Party by ARG shall be
limited to the amount of any Loss that remains after deducting therefrom (and
the cumulative amount of all Losses for purposes of determining the ARG Basket
Amount shall be reduced by the amount of) any insurance proceeds or any
indemnity, contribution or other similar payment actually recovered (net of
out-of-pocket costs incurred in connection with such recovery) by a Seller
Indemnified Party from any insurer or third party with respect thereto;
PROVIDED, that no Seller Indemnified Party shall be obligated to seek any such
recovery.
(f) To the extent that a Seller Indemnified Party has recovered all
or any portion of its Losses with respect to any matter arising under one
provision of this Agreement, such Seller Indemnified Party shall not be entitled
to recover such portion of such Losses pursuant to other provisions of this
Agreement.
(g) In no event shall any Seller Indemnified Party be entitled to
be indemnified for or make a claim against ARG for (i) lost profits or other
consequential, incidental, special or punitive damages resulting hereunder
(other than such damages payable to a Governmental Entity or other Person in
respect of a third party claim as to which such damages were assessed) or (ii)
any Losses based upon or arising from any Legal Action threatened or commenced
against Triarc or any of its Subsidiaries or any of their respective directors,
officers, Affiliates, employees, Representatives, successors or assigns by any
shareholder of Triarc relating to the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
Section 10.04 OBLIGATION OF THE SELLERS TO INDEMNIFY.
(a) Subject to the limitations contained in this Article X, from
and after the Closing, each Seller agrees to jointly and severally indemnify,
defend and hold harmless Triarc and its Subsidiaries and their respective
directors, officers, control persons (but only to the extent such control
persons have liability under any federal or state securities law), employees,
Representatives, successors and assigns (collectively, the "TRIARC INDEMNIFIED
PARTIES") from and against all Losses based upon or arising from:
(i) any breach of or inaccuracy in any representation or
warranty of the Sellers contained in Article II (other than any representation
or warranty contained in Section 2.13, any breach of or inaccuracy in which is
addressed in Article VII) or in the certificate delivered by the RTM
Representatives pursuant to Section 8.02(d) in respect of such representations
and warranties, as of the date such representation or warranty was made or as if
such representation or warranty were made on and as of the Closing Date (except
for representations and warranties that expressly relate to a specified date,
the breach of or inaccuracy in which will be determined with reference to such
specified date);
48
(ii) any breach of any covenant or agreement of the Sellers
contained in this Agreement (other than any covenant or agreement contained in
Section 5.01(p) or Article VII, any breach of which is addressed in Article
VII);
(iii) except for the Indebtedness set forth in Section 7.16
of the RTMRG Disclosure Letter, any Liability of RTMAC or any of its
Subsidiaries arising out of or relating to (i) any RTMAC Related Party
Arrangement or (ii) the business, operations, properties or assets of any RTM
Related Entity, including any guaranties, leases or subleases by RTMAC or any of
its Subsidiaries of real property currently or formerly used as a Mrs. Winners
or Lees restaurant and not currently used in the Business;
(iv) any Legal Action (other than in respect of Dissenting
Shares under Article 13 of the GBCC) threatened or commenced by an RTMRG
Shareholder, an RTMMC Member or a Seller relating to the transactions
contemplated by this Agreement, the RTMMC Purchase Agreement or the RTMRG Merger
Agreement (other than any such Legal Action threatened or commenced by any party
to such agreement to enforce against Triarc or any of its direct or indirect
Subsidiaries, as applicable, the terms of this Agreement, the RTMRG Merger
Agreement, the RTMMC Purchase Agreement or agreements contemplated hereby or
thereby); or
(v) enforcing the indemnification provided for in this
Section 10.04(a), but only if a court of competent jurisdiction determines in a
final, nonappealable judgment that such Triarc Indemnified Party is entitled to
indemnification under Section 10.04(a)(i), Section 10.04(a)(ii), Section
10.04(a)(iii) or Section 10.04(a)(iv), as applicable.
(b) Subject to the limitations contained in this Article X, from
and after the Closing, each Seller agrees to jointly and severally (to the
extent of the RTM Escrow Fund) and thereafter severally and not jointly,
indemnify, defend and hold harmless the Triarc Indemnified Parties from and
against all Losses based upon or arising from:
(i) any breach of or inaccuracy in any representation or
warranty of such Seller contained in Article III or in the certificate delivered
by the RTM Representatives pursuant to Section 8.02(d) in respect of such
representations and warranties, as of the date such representation or warranty
was made or as if such representation or warranty were made on and as of the
Closing Date (except for representations and warranties that expressly relate to
a specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date); or
(ii) enforcing the indemnification provided for in this
Section 10.04, but only if a court of competent jurisdiction determines in a
final, nonappealable judgment that such Triarc Indemnified Party is entitled to
indemnification under Section 10.04(b)(i).
49
Section 10.05 MATTERS PERTAINING TO INDEMNIFICATION BY THE SELLERS.
The indemnification provided for in Section 10.04 shall be subject to the
following limitations:
(a) The Sellers shall not be obligated to pay any amounts in respect
of indemnification obligations under Section 10.04(a)(i) or Section 10.04(b)(i),
except those based upon or arising from Section 2.01 (first sentence only),
Section 2.02, Section 2.03, Section 2.07(c) (the second sentence only), Section
2.14, Section 2.27, Section 3.01 or Section 3.02 (the "RTMAC BASKET
EXCLUSIONS"), until the aggregate amounts for indemnification in respect of
indemnification obligations under (i) Section 10.04(a)(i) or Section
10.04(b)(i), except those based upon or arising from the RTMAC Basket
Exclusions, (ii) Section 11.04(a) of the RTMRG Merger Agreement, except those
based upon or arising from the RTMRG Basket Exclusions, and (iii) Section
10.04(a)(i) and Section 10.04(b)(i) of the RTMMC Purchase Agreement, except
those based upon or arising from the RTMMC Basket Exclusions, equals $5 million
(the "RTM BASKET AMOUNT"), after which the Sellers shall be obligated to pay in
full all such amounts for such indemnification in excess of the RTM Basket
Amount. The Sellers shall not be obligated to pay any amounts in respect of
indemnification obligations under Section 10.04(a)(i) and Section 10.04(b)(i),
except those based upon or arising from the RTMAC Basket Exclusions, for any
particular Loss unless the amount of such Loss (together with the amount of all
other Losses under this Agreement, the RTMRG Merger Agreement and the RTMMC
Purchase Agreement involving the same or related conduct, facts, circumstances
or events) exceeds $50,000 (or $75,000 in the case of any Loss (or Losses
involving the same or related conduct, facts, circumstances or events) based
upon or arising from breaches of or inaccuracies in the representations and
warranties contained in Section 5.16); for the avoidance of doubt, any amounts
for indemnification that the Sellers are not obligated to pay pursuant to this
sentence shall not be included in computing the RTM Basket Amount.
(b) The Sellers shall be obligated to pay any amounts for
indemnification based on the RTMAC Basket Exclusions without regard to the
individual or aggregate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the RTM Basket
Amount.
(c) The maximum amount of indemnification payments under Section
10.04(a)(i) and Section 10.04(b)(i) of this Agreement, Section 11.04(a) of the
RTMRG Merger Agreement and Section 10.04(a)(i) and Section 10.04(b)(i) of the
RTMMC Purchase Agreement to which the Triarc Indemnified Parties shall be
entitled to receive (other than indemnification in connection with any of the
RTMAC Basket Exclusions, the RTMRG Basket Exclusions and the RTMMC Basket
Exclusions) shall not exceed in the aggregate an amount equal to $40 million. No
Seller will be liable for indemnification under this Agreement (whether pursuant
to Article VII or this Article X), including in this calculation such Seller's
pro rata share of indemnification (but not purchase price adjustment) payments
made from the RTM Escrow Fund in an amount in excess of the sum of (x) 100% of
the sum of (i) the Per Share Merger Consideration received by, and to the extent
the following reduces dollar for dollar the amount of Per Share Merger
Consideration otherwise payable, the RTMRG Shareholders Obligations
50
Amount as of immediately prior to the Closing owed by, such Seller, (ii) the
portion of the Aggregate Purchase Price received by such Seller and (iii) a pro
rata portion of the RTMMC Aggregate Purchase Price based on such Seller's
percentage interest in RTMMC immediately prior to the Closing, PLUS (y) if such
Seller is an RTMRG Principal Shareholder, a pro rata portion of 12.9% of the
Aggregate Merger Consideration, such portion to be based on the number of shares
of RTMRG Common Stock held by such RTMRG Principal Shareholder relative to the
total number of shares of RTMRG Common Stock held by all RTMRG Principal
Shareholders immediately prior to the First Effective Time, MINUS (z) an amount
equal to any indemnification claims paid by such Seller under or in respect of
the RTMRG Merger Agreement or the RTMMC Purchase Agreement.
(d) In seeking indemnification hereunder, the Triarc Indemnified
Parties shall first exercise their remedies with respect to the RTM Escrow Fund
pursuant to the Escrow Agreement and, if the RTM Escrow Fund has been exhausted
in full, with respect to the Sellers (individually or jointly) directly pursuant
to this Agreement.
(e) For purposes of determining whether a representation, warranty,
covenant or agreement has been breached or is inaccurate, limitations or
qualifications as to dollar amount, materiality or RTMAC Material Adverse Effect
(or similar concept) set forth in such representation, warranty, covenant or
agreement shall not be disregarded, but if a breach or inaccuracy is so
determined, then the amount of any Loss arising from such breach or inaccuracy
of such representation, warranty, covenant and agreement shall be determined
without regard to any limitation or qualification as to dollar amount,
materiality or RTMAC Material Adverse Effect (or similar concept) set forth in
such representation, warranty, covenant and agreement.
(f) Indemnification of a Triarc Indemnified Party by the Sellers
shall be limited to the amount of any Loss that remains after deducting
therefrom (and the cumulative amount of all Losses for purposes of determining
the RTM Basket Amount shall be reduced by the amount of) any insurance proceeds
or any indemnity, contribution or other similar payment actually recovered (net
of out-of-pocket costs incurred in connection with such recovery) by a Triarc
Indemnified Party from any insurer or third party with respect thereto;
PROVIDED, that no Triarc Indemnified Party shall be obligated to seek any such
recovery.
(g) To the extent that a Triarc Indemnified Party has recovered all
or any portion of its Losses with respect to any matter arising under one
provision of this Agreement, such Triarc Indemnified Party shall not be entitled
to recover such portion of such Losses pursuant to other provisions of this
Agreement, the RTMRG Merger Agreement or the RTMMC Purchase Agreement. Without
limiting the generality of the foregoing, to the extent any Losses were taken
into account and had the effect of increasing the RTM Estimated Net Liabilities
or RTM Closing Net Liabilities determined pursuant to Section 2.08 of the RTMRG
Merger Agreement and Section 2.09 of the RTMRG Merger Agreement, respectively,
the amount by which such Losses resulted in an increase of the RTM Estimated Net
Liabilities or RTM Closing Net Liabilities, as the
51
case may be, shall reduce on a dollar-for-dollar basis the amount of such Loss
for which the Triarc Indemnified Parties are entitled to indemnification under
Section 10.04.
(h) In no event shall any Triarc Indemnified Party be entitled to
be indemnified for or make a claim against the Sellers for lost profits or other
consequential, incidental, special or punitive damages resulting hereunder
(other than such damages payable to a Governmental Entity or other Person in
respect of a third party claim as to which such damages were assessed).
Section 10.06 PROCEDURE FOR INDEMNIFICATION. The party making a claim
under this Article X is referred to as the "INDEMNIFIED PARTY" and the party
against whom such claims are asserted under this Article X is referred to as the
"INDEMNIFYING PARTY." If the Indemnifying Party is a Seller, the RTM
Representatives shall exercise, in accordance with Section 11.17, all rights of
such Seller as an Indemnifying Party in this Section 10.06, and for procedural
purposes only all references to the Indemnifying Party in this Section 10.06
shall be deemed to refer to the RTM Representatives. All claims by any
Indemnified Party under this Article X shall be asserted and resolved as
follows:
(a) NOTICE OF ASSERTED LIABILITY. Promptly after receipt by the
Indemnified Party of notice of the commencement of any action or proceeding, the
assertion of any claim by a third party, the imposition of any penalty or
assessment or a claim not involving a third party for which the Indemnified
Party seeks to be indemnified that may result in a Loss (each, an "ASSERTED
LIABILITY"), the Indemnified Party shall give written notice of such Asserted
Liability (the "CLAIMS NOTICE") to the Indemnifying Party. The failure to give
such prompt written notice shall not, however, relieve the Indemnifying Party of
its indemnification obligations, except and only to the extent that the
Indemnifying Party forfeits rights or defenses by reason of such failure or
actually incurs an incremental out-of-pocket expense by reason of such failure.
The Claims Notice shall describe the Asserted Liability in reasonable detail,
including (i) the representation, warranty, covenant or agreement that is
alleged to have been inaccurate or to have been breached, (ii) the basis for
such allegation, including the provision of supporting documentation and (iii)
if known, the aggregate amount of the Losses for which a claim is being made
under this Article X or, to the extent that such Losses are not known or have
not been incurred at the time such claim is made, an estimate, to be prepared in
good faith and accompanied by supporting documentation, of the aggregate
potential amount of such Losses.
(b) NON-THIRD PARTY CLAIMS. If the Claims Notice from the
Indemnified Party pertains to an Asserted Liability other than a claim or demand
from a third party, then the Indemnifying Party shall have 30 days following
receipt of the Claims Notice to make such investigation at the expense of the
Indemnifying Party of the Asserted Liability as the Indemnifying Party deems
necessary or desirable. For the purposes of such investigation, the Indemnified
Party agrees to make available to the Indemnifying Party the information relied
upon by the Indemnified Party to substantiate the Asserted Liability and such
other information in its possession that the Indemnifying Party may reasonably
request for purposes of such investigation. If the Indemnified Party and the
Indemnifying Party agree at or prior to the expiration of said 30 day period (or
52
any mutually agreed upon extension thereof) on the validity and amount of such
Asserted Liability, the Indemnifying Party shall promptly pay to the Indemnified
Party the full amount of the claim by wire transfer of immediately available
funds to an account designated by the Indemnified Party. If the Indemnified
Party and the Indemnifying Party do not agree at or prior to the expiration of
said 30 day period (as such period may be extended by mutual agreement) on the
validity and amount of such Asserted Liability, then each of the Indemnified
Party and the Indemnifying Party may pursue the remedies available under this
Agreement.
(c) OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS.
(i) If the Claims Notice pertains to an Asserted Liability
that relates to a claim or demand from a third party, the Indemnifying Party may
elect to compromise or defend, at its own expense and by its own counsel, such
Asserted Liability; PROVIDED, that if the Indemnifying Party is a Seller, such
Indemnifying Party shall not have the right to defend or direct the defense of
any such Asserted Liability that is asserted directly or indirectly by or on
behalf of a Person that is a current or prospective supplier or franchisee of
Triarc or any of its Subsidiaries if in the reasonable judgment of the
Indemnified Party (which may be asserted at any time) the Indemnifying Party's
defense of such Asserted Liability could reasonably be expected to have a
material adverse effect on the Indemnified Party's existing or prospective
relationship with such current or prospective supplier or franchisee.
(ii) If the Indemnifying Party elects to compromise or defend
such Asserted Liability, it shall promptly notify the Indemnified Party and any
other Indemnifying Parties in writing of its intent to do so, and the
Indemnified Party, at the expense of the applicable Indemnifying Party or
Indemnifying Parties, shall cooperate in the compromise of, or defense against,
such Asserted Liability.
(iii) If the Indemnifying Party elects not to compromise or
defend such Asserted Liability, fails to promptly notify the Indemnified Party
in writing of its election as provided in this Agreement, or otherwise abandons
the defense of such Asserted Liability, the Indemnified Party may pay,
compromise or defend such Asserted Liability and seek indemnification for any
and all Losses based upon, arising from or relating to such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party shall settle or compromise any Asserted Liability without the
prior written consent of the other (which consent shall not be unreasonably
withheld, conditioned or delayed);
(iv) The Indemnified Party shall have the right to
participate in the defense of any Asserted Liability with counsel selected by it
and reasonably satisfactory to the Indemnifying Party subject to the
Indemnifying Party's right to control the defense. The fees and disbursements of
such counsel shall be at the expense of the Indemnified Party; PROVIDED, that if
in the reasonable opinion of counsel to the Indemnified Party, (I) there are
legal defenses available to an Indemnified Party that are different from or
additional to those available to the Indemnifying Party or (II) there exists a
conflict of interest between the Indemnifying Party and the Indemnified Party
53
that cannot be waived, the Indemnifying Party shall be liable for the reasonable
legal fees and expenses of one separate counsel to all of the applicable
Indemnified Parties (in addition to one local counsel in each jurisdiction that
may be necessary or appropriate; PROVIDED, that the Indemnified Parties shall
use commercially reasonable efforts (to the extent the Indemnified Parties
reasonably believe it appropriate to do so) to minimize the need for local
counsel. If the Indemnifying Party chooses to defend any Asserted Liability, the
Indemnified Party shall make available to the Indemnifying Party any personnel,
books, records or other documents within its control that are necessary or
appropriate for such defense.
(v) The rights of the Sellers under this Section 10.06(c)
with respect to any Asserted Liability for which all of the Sellers are
Indemnifying Parties may be exercised solely by the RTM Representatives and, if
the RTM Representatives elect to defend such Asserted Liability, the RTM
Representatives shall have sole and exclusive control over such defense as
between the Sellers.
(vi) Notwithstanding any other provision of this Agreement,
the provisions of this Section 10.06(c) shall not apply to any Asserted
Liability for Taxes.
Section 10.07 SOLE AND EXCLUSIVE REMEDY. Except as otherwise provided
in Section 11.14, from and after the Closing, the remedies provided in Article
VII and this Article X and the Escrow Agreement shall be the sole recourse of
all parties hereto for all Losses based upon, arising from or relating to any
breach of any representation, warranty or covenant contained in this Agreement
or in any certificate delivered pursuant to Section 8.02(d) or Section 8.03(c);
PROVIDED, that the remedies provided in Article VII shall be the sole remedy of
the Triarc Indemnified Parties for all Tax Losses. Nothing in this Section 10.07
shall limit any Person's right to seek and obtain any equitable relief to which
any Person shall be entitled or to seek any remedy on account of any Person's
fraud.
Section 10.08 MISCELLANEOUS. It is the intention of the parties to
treat any indemnity payment made under this Agreement with respect to the
Purchase as an adjustment to the Aggregate Purchase Price for all federal,
state, local and foreign Tax purposes and the parties agree to file their Tax
Returns accordingly, except as otherwise required by a change in law or a good
faith resolution of a contest.
ARTICLE XI
MISCELLANEOUS
Section 11.01 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"ACCOUNTS RECEIVABLE" means, with respect to any Person, all rights of
such Person to payment for goods or services provided by such Person.
54
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by Contract or otherwise.
"AGGREGATE MERGER CONSIDERATION" has the meaning set forth in the RTMRG
Merger Agreement.
"AGGREGATE PURCHASE PRICE" has the meaning set forth in Section 1.01.
"AGREEMENT" has the meaning set forth in the preamble.
"ALLOCATION REQUIREMENT" has the meaning set forth in Section 8.02(i).
"ANCILLARY AGREEMENTS" means the Atlanta Office Leases, the Certificate
of Designation, the Corporate Services Agreement, the Escrow Agreement, the
Management Services Agreement, the Registration Rights Agreement, the RTMMC
Purchase Agreement, the RTMRG Merger Agreement, the Trademark License Agreement
and the Transaction Support Agreement.
"ARG" has the meaning set forth in the preamble.
"ARG BASKET AMOUNT" has the meaning set forth in Section 10.03(a).
"ARG BASKET EXCLUSIONS" has the meaning set forth in Section 10.03(a).
"ARG MATERIAL ADVERSE EFFECT" has the meaning set forth in the RTMRG
Merger Agreement.
"ASSERTED LIABILITY" has the meaning set forth in Section 10.06(a).
"ATLANTA OFFICE LEASES" has the meaning set forth in the RTMMC Purchase
Agreement.
"BUSINESS" means the business and operations of RTMAC in respect of the
"Arby's" restaurant franchise and not in respect of the "Mrs. Winner's" or
"▇▇▇'▇" restaurant franchises.
"BUSINESS DAY" means any day, other than Saturday, Sunday or a day on
which banks in New York City are permitted or required by Law to be closed, and
shall consist of the time period from 12:01 a.m. through 12:00 midnight Eastern
time.
"CERTIFICATE OF DESIGNATION" has the meaning set forth in the RTMRG
Merger Agreement.
55
"CLAIMS NOTICE" has the meaning set forth in Section 10.06(a).
"CLOSING" has the meaning set forth in Section 1.02.
"CLOSING DATE" has the meaning set forth in Section 1.02.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENTS" has the meaning set forth in Section
6.01(b).
"CONTEST" has the meaning set forth in Section 7.03(a).
"CONTRACTS" means any written or oral contracts, agreements, licenses,
notes, bonds, mortgages, indentures, commitments, leases or other instruments or
other legally binding obligations.
"CORPORATE SERVICES AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"D&O INDEMNIFIED PARTIES" has the meaning set forth in Section 6.09(a).
"DEBT FINANCING" has the meaning set forth in the RTMRG Merger
Agreement.
"DEBT REFINANCINGS" has the meaning set forth in the RTMRG Merger
Agreement.
"DISSENTING SHARES" has the meaning set forth in the RTMRG Merger
Agreement.
"DOL" means the United States Department of Labor.
"ENVIRONMENTAL LAWS" shall mean federal, state, local and foreign laws,
principles of common laws, civil laws, regulations and codes, as well as orders,
decrees, judgments or injunctions, issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environment or public or
employee health and safety, in each case as in effect on or prior to the date
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" has the meaning set forth in the RTMRG Merger Agreement.
56
"ESCROW AGREEMENT" has the meaning set forth in the recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCLUDED ASSET DISPOSITION" has the meaning set forth in the RTMRG
Merger Agreement.
"EXPENSE FUND" has the meaning set forth in the RTMRG Merger Agreement.
"EXPENSES" has the meaning set forth in Section 11.03(a).
"FIRST CERTIFICATE OF MERGER" has the meaning set forth in the RTMRG
Merger Agreement.
"FIRST EFFECTIVE TIME" has the meaning set forth in the RTMRG Merger
Agreement.
"FIRST MERGER" has the meaning set forth in the recitals.
"GAAP" means United States generally accepted accounting principles.
"GBCC" has the meaning set forth in the RTMRG Merger Agreement.
"GOVERNMENTAL ENTITY" means any international, national, federal,
state, provincial or local governmental, regulatory or administrative authority,
agency, commission, court, tribunal, arbitral body or self-regulated entity,
whether domestic or foreign.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"IMMEDIATE FAMILY MEMBER" means, with respect to any natural person,
(a) such person's spouse, parents, grandparents, children, grandchildren and
siblings, (b) such person's former spouses and current spouses of such person's
children, grandchildren and siblings and (c) estates, trusts, partnerships and
other entities of which substantially all of the interest is held directly or
indirectly by the foregoing.
"INDEBTEDNESS" has the meaning set forth in the RTMRG Merger Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in Section 10.06.
"INDEMNIFYING PARTY" has the meaning set forth in Section 10.06.
"INDEPENDENT ACCOUNTANTS" has the meaning set forth in the RTMRG Merger
Agreement.
57
"INVENTORY" means all merchantable inventory of food, beverages and
other consumables, paper and supplies, as well as new uniforms and promotional
items located or otherwise used at the Restaurants at the close of business on
the Closing.
"INVESTMENTS" has the meaning set forth in Section 2.04.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" means the knowledge of each respective Seller and of
▇▇▇▇▇▇▇ Abt, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and J. ▇▇▇▇▇▇▇
▇▇▇▇▇, after due inquiry.
"LAWS" means any domestic or foreign laws, statutes, ordinances, rules,
regulations, codes or executive orders executed, issued, adopted, promulgated or
applied by any Governmental Entity which, for the avoidance of doubt, shall
include the rules and regulations of any national securities exchange.
"LEGAL ACTIONS" means any legal actions, claims, demands, arbitrations,
hearings, charges, complaints, investigations, examinations, indictments,
litigations, suits or other civil, criminal, administrative or investigative
proceedings, at law, in equity or otherwise, by or before any Governmental
Entity.
"LIABILITIES" means all liabilities, whether accrued contingent,
absolute, inchoate or otherwise.
"LIENS" means any liens, pledges, security interests, claims,
encumbrances, options, rights of first refusal or offer, mortgages, deeds of
trust, easements, restrictive covenants, encroachments or other survey defects
or any other restriction or third party right, including restrictions on the
right to vote equity interests.
"LOSSES" means any and all losses, Liabilities, judgments, damages,
deficiencies, awards, fines, penalties, Taxes, diminutions in value, expenses,
fees, costs, or amounts paid in settlement (including interest and reasonable
costs or expenses (including reasonable attorneys' fees and costs)), arising out
of any incident, event, circumstance or proceeding asserted or initiated or
otherwise occurring or existing in respect of any matter.
"MANAGEMENT SERVICES AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"MEMBERSHIP INTERESTS" has the meaning set forth in the recitals.
"MERGER SUB CORP." has the meaning set forth in the recitals.
"MERGER SUB LLC" has the meaning set forth in the recitals.
"MERGERS" has the meaning set forth in the recitals.
58
"MRS. WINNERS OBLIGORS" has the meaning set forth in the RTMRG Merger
Agreement.
"NET LIABILITIES" has the meaning set forth in the RTMRG Merger
Agreement.
"ORDERS" means any orders, judgments, injunctions, awards, decrees or
writs handed down, adopted or imposed by any Governmental Entity.
"PARTICIPATION CONTEST" has the meaning set forth in Section 7.03(b).
"PER SHARE MERGER CONSIDERATION" has the meaning set forth in the RTMRG
Merger Agreement.
"PERMITS" means any franchises, grants, authorizations, licenses,
registrations, easements, variances, exceptions, consents, certificates,
approvals and other permits of any Governmental Entity.
"PERMITTED LIENS" means (i) Liens for Taxes (and assessments and other
governmental charges) not yet due and payable or that have been paid in full,
(ii) mechanics', landlord's, workmen's, repairmen's, warehousemen's, carriers'
or other like Liens (including Liens created by operation of law) arising in the
ordinary course of business consistent with past practice and securing amounts
that are not yet due and payable or are being contested in good faith, (iii)
Liens in respect of easements, permits, licenses, rights-of-way, restrictive
covenants, reservations or encroachments or other similar non-monetary title
exceptions with respect to real property which do not materially affect the
current use of the underlying asset, (iv) Liens in respect of pledges or
deposits under workers' compensation laws or similar legislation, unemployment
insurance or other types of social security or to secure the performance of
statutory obligations, surety and appeal, bonds, bids, leases, government
Contracts and similar obligations, (v) municipal by-laws, development
restrictions or regulations, facility cost sharing and servicing Contracts and
zoning, building or planning restrictions or regulations, (vi) Liens securing
Indebtedness to be repaid in the Debt Refinancings and (vii) Liens arising in
connection with this Agreement.
"PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, association, trust or other entity or organization,
including an unincorporated organization, a government or political subdivision
or an agency or instrumentality thereof.
"POST-TRANSITION PERIOD BENEFIT PLANS" has the meaning set forth in
Section 6.08(e).
"PRE-CLOSING INCOME TAX RETURNS" has the meaning set forth in Section
7.04(b).
59
"PRE-CLOSING TAXABLE PERIODS" has the meaning set forth in Section
7.04(a).
"PRE-CLOSING TAXES" has the meaning set forth in Section 7.01(a)(i).
"PURCHASE" has the meaning set forth in the recitals.
"PURCHASE PRICE ALLOCATION" means the following allocation: (x) the
aggregate Per Share Merger Consideration (subject to Section 2.02(c)(iv) as
adjusted for payments pursuant to Section 2.07 of the RTMRG Merger Agreement),
and any amounts treated as an adjustment to the aggregate Per Share Merger
Consideration pursuant to Section 11.08 of the RTMRG Merger Agreement, will be
allocated to the shares of RTMRG Common Stock outstanding on the Closing, (y)
the Aggregate Purchase Price, and any amounts treated as an adjustment to the
Aggregate Purchase Price pursuant to Section 10.08, will be allocated to the
Membership Interests, and (z) the RTMMC Aggregate Purchase Price, and any
amounts treated as an adjustment to the RTMMC Aggregate Purchase Price pursuant
to Section 10.08 of the RTMMC Purchase Agreement, and RTMMC Assumed Liabilities
will be allocated to the RTMMC Purchased Assets.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"REPRESENTATIVES" means, with respect to any Person, the directors,
officers, employees, consultants, accountants, legal counsel, investment
bankers, agents and other representatives of such Person and its Subsidiaries.
"REQUIRED DEBT CONSENTS" has the meaning set forth in Section 6.05(b).
"RESTATED COMBINED RTM AUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 2.07(a).
"RESTATED COMBINED RTM FINANCIAL STATEMENTS" has the meaning set forth
in Section 2.07(a).
"RESTATED COMBINED RTM UNAUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 2.07(a).
"RESTAURANTS" means "Arby's" branded restaurants and, with respect to
any Person, those certain "Arby's" restaurants owned or leased by such Person.
"RTM BASKET AMOUNT" has the meaning set forth in Section 10.05(a).
"RTM BENCHMARK" has the meaning set forth in the RTMRG Merger
Agreement.
"RTM CLOSING BALANCE SHEET" has the meaning set forth in the RTMRG
Merger Agreement.
60
"RTM CLOSING NET LIABILITIES" has the meaning set forth in the RTMRG
Merger Agreement.
"RTM ESCROW FUND" has the meaning set forth in the Escrow Agreement.
"RTM ESTIMATED NET LIABILITIES" has the meaning set forth in Section
1.05(a).
"RTM MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of the RTM Parties and their Subsidiaries, taken as a
whole, but shall exclude any change or development resulting from (i) any change
in Law or accounting rules or interpretations thereof, (ii) any change in
interest rates, general economic conditions or changes in the general economic
condition of any segment of the restaurant industry, or (iii) any change
resulting from the entry into or the announcement of this Agreement or the
transactions contemplated hereby, the performance of a party's obligations
hereunder or to avoid a breach of this Agreement or (b) that prevents,
materially delays or materially impairs the ability of any RTM Party, any RTMRG
Shareholder, any Seller, RTMMC or any RTMMC Member to perform its obligations
under this Agreement and the Ancillary Agreements to which it is a party or to
consummate the transactions contemplated hereby or thereby.
"RTM NON-PREPAYABLE DEBT" has the meaning set forth in the RTMRG Merger
Agreement.
"RTM PARTIES" means each of RTMRG, RTMAC and RTMMC.
"RTM POST-SIGNING RETURNS" has the meaning set forth in Section
5.01(p).
"RTM RELATED ENTITIES" means, collectively, ▇▇▇'▇ Famous Recipe, Inc.,
Crown Restaurants, Inc., Winners Corporation, Winners Partners, Mrs. Winners,
L.P. and Winners International Restaurants, Inc. and their respective
Subsidiaries.
"RTM REPRESENTATIVES" has the meaning set forth in Section 11.17(a).
"RTM TRANSACTIONS" has the meaning set forth in the recitals.
"RTMAC" has the meaning set forth in the preamble.
"RTMAC ASSET RANGE" means an amount greater than $29 million and less
than $33 million; provided, appropriate adjustments will be made to the RTMAC
Asset Range to the extent that, as of Closing, the assets of RTMAC, or the
condition of such assets, differ from the assets of RTMAC, or the condition of
such assets, as presented in the information supplied to Valuation Research
Corporation prior to the date hereof.
"RTMAC BASKET EXCLUSIONS" has the meaning set forth in Section
10.05(a).
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"RTMAC DISCLOSURE LETTER" has the meaning set forth in Article II.
"RTMAC EMPLOYEE PLAN" has the meaning set forth in Section 2.14(a).
"RTMAC EMPLOYEES" has the meaning set forth in Section 6.08(a).
"RTMAC INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
Section 2.17(c).
"RTMAC LEASES" has the meaning set forth in Section 2.12(a)(xiii).
"RTMAC MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of RTMAC, but shall exclude any change or development
resulting from (i) any change in Law or accounting rules or interpretations
thereof, (ii) any change in interest rates, general economic conditions or
changes in the general economic condition of any segment of the restaurant
industry, or (iii) any change resulting from the entry into or the announcement
of this Agreement or the transactions contemplated hereby, the performance of a
party's obligations hereunder or to avoid a breach of this Agreement or (b) that
prevents, materially delays or materially impairs the ability of RTMAC or any
Seller to perform its obligations under this Agreement and the Ancillary
Agreements to which it is a party or to consummate the transactions contemplated
hereby or thereby.
"RTMAC MATERIAL CONTRACTS" has the meaning set forth in Section
2.12(a).
"RTMAC PERMITS" has the meaning set forth in Section 2.10(b).
"RTMAC REAL PROPERTY" has the meaning set forth in Section 2.18.
"RTMAC REAL PROPERTY LEASE" has the meaning set forth in Section
2.12(a)(xii).
"RTMAC RELATED PARTY ARRANGEMENT" has the meaning set forth in Section
2.26.
"RTMAC RESTAURANTS" has the meaning set forth in Section 2.25(a).
"RTMAC THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS" has the meaning set
forth in Section 2.17(b).
"RTMAC TRANSACTIONS" means any transactions among any of Triarc, ARG,
RTMAC, its direct and indirect members, any of their Subsidiaries and any of
their Affiliates contemplated by this Agreement, the RTMRG Merger Agreement or
the RTMMC Purchase Agreement to occur on or before the Closing Date, including
any Excluded Asset Dispositions, any payment of the Aggregate Merger
Consideration, the Aggregate Purchase Price, RTMMC Aggregate Purchase Price and
the transactions described in Section 7.15, Section 7.16, Section 7.18, Section
7.19, Section 8.08,
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Section 8.11, Section 9.02(i) and Section 12.18 of the RTMRG Merger Agreement
and Section 6.02 of the RTMRG Disclosure Letter; Section 1.03, Section 6.11,
Section 8.02(g), Section 8.02(h), Section 8.02(i) and Section 8.02(j) of the
RTMMC Purchase Agreement; and Section 6.12 and Section 8.02(g) of this
Agreement.
"RTMMC" has the meaning set forth in the preamble.
"RTMMC ACQUISITION SUB" has the meaning set forth in the recitals.
"RTMMC AGGREGATE PURCHASE PRICE" has the meaning set forth in the
recitals.
"RTMMC ASSET RANGE" has the meaning set forth in the RTMMC Purchase
Agreement.
"RTMMC BASKET EXCLUSIONS" has the meaning set forth in the RTMMC
Purchase Agreement.
"RTMMC MEMBERS" means the "Members" as defined in the RTMMC Purchase
Agreement.
"RTMMC PURCHASE" has the meaning set forth in the recitals.
"RTMMC PURCHASE AGREEMENT" has the meaning set forth in the recitals.
"RTMMC PURCHASED ASSETS AND ASSUMED LIABILITIES" means, collectively,
the "Purchased Assets" and the "Assumed Liabilities," each as defined in the
RTMMC Purchase Agreement.
"RTMRG" has the meaning set forth in the recitals.
"RTMRG BASKET EXCLUSIONS" has the meaning set forth in the RTMRG Merger
Agreement.
"RTMRG COMMON STOCK" has the meaning set forth in the RTMRG Merger
Agreement.
"RTMRG DISCLOSURE LETTER" has the meaning set forth in the RTMRG Merger
Agreement.
"RTMRG MERGER AGREEMENT" has the meaning set forth in the recitals.
"RTMRG PRINCIPAL SHAREHOLDERS" has the meaning set forth in the
recitals.
"RTMRG SHAREHOLDERS" has the meaning set forth in the RTMRG Merger
Agreement.
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"RTMRG SHAREHOLDERS OBLIGATIONS AMOUNT" has the meaning set forth in
the RTMRG Merger Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SECOND CERTIFICATE OF MERGER" has the meaning set forth in the RTMRG
Merger Agreement.
"SECOND MERGER" has the meaning set forth in the recitals.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SELLER INDEMNIFIED PARTIES" has the meaning set forth in Section
10.02.
"SELLERS" has the meaning set forth in the preamble to this Agreement.
"SOA" has the meaning set forth in Section 6.11.
"STRADDLE PERIOD" has the meaning set forth in Section 7.05.
"STRADDLE RETURNS" has the meaning set forth in Section 7.04(c).
"SUBSIDIARY" means, as to any Person, (i) a corporation of which such
Person directly or indirectly owns securities or other equity interests
representing more than fifty percent (50%) of the aggregate voting power or (ii)
any other Person in which such Person, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
"TAKEOVER PROPOSAL" means any proposal or offer relating to (i) a
merger, consolidation, share exchange or business combination involving RTMAC,
(ii) a sale, lease, exchange, mortgage, transfer or other disposition, in a
single transaction or series of related transactions, of 20% or more of the
assets of RTMAC, (iii) a purchase or sale of shares of capital stock or other
securities, in a single transaction or series of related transactions,
representing 20% or more of the voting power of the capital stock or similar
equity interests of RTMAC, including by way of a tender offer or exchange offer,
(iv) a reorganization, recapitalization, liquidation or dissolution of RTMAC or
(v) any other transaction having a similar effect to those described in clauses
(i) - (iv), in each case other than the transactions contemplated by this
Agreement.
"TAX" or "TAXES" means (i) any and all federal, state, provincial,
local, foreign and other taxes (including withholding taxes), levies, fees,
imposts, duties, and similar governmental charges (including any interest,
fines, assessments, penalties or additions to tax imposed in connection
therewith or with respect thereto) including (x) taxes imposed on, or measured
by, income, franchise, profits or gross receipts, and (y) ad valorem, value
added, capital gains, sales, goods and services, use, real or personal property,
capital stock, license, branch, payroll, estimated withholding, employment,
social security (or similar), unemployment, compensation, utility, severance,
production,
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excise, stamp, occupation, premium, windfall profits, transfer and gains taxes,
and customs duties, and (ii) any transferee liability in respect of any items
described in the foregoing clause (i).
"TAX ACTIONS" has the meaning set forth in Section 5.01(p).
"TAX BENEFITS" has the meaning set forth in Section 7.01(b).
"TAX COSTS" has the meaning set forth in Section 7.01(b).
"TAX LOSS" has the meaning set forth in Section 7.01(a).
"TAX RETURNS" means any and all reports, returns, declarations, claims
for refund, elections, disclosures, estimates, information reports or returns or
statements required to be supplied to a taxing authority in connection with
Taxes, including any schedule or attachment thereto or amendment thereof.
"TAX SHARING AGREEMENT" means any agreement relating to the sharing,
allocation or indemnification of Taxes, or any similar agreement, Contract or
arrangement.
"TM CAPITAL" means TM Capital Corp., a Delaware corporation.
"TRADEMARK LICENSE AGREEMENT" has the meaning set forth in the RTMMC
Purchase Agreement.
"TRANSACTION SUPPORT AGREEMENT" has the meaning set forth in the
recitals.
"TRANSFER TAXES" has the meaning set forth in Section 7.07.
"TRANSITION PERIOD" has the meaning set forth in Section 6.08(d).
"TRIARC" has the meaning set forth in the preamble.
"TRIARC B-1 ELECTION" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIARC B-2 ELECTION" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIARC CLASS B-1 COMMON STOCK" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC CLASS B-2 COMMON STOCK" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC CONTRIBUTIONS" has the meaning set forth in the recitals.
65
"TRIARC DISCLOSURE LETTER" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC INDEMNIFIED PARTIES" has the meaning set forth in Section
10.04(a).
"TRIARC MATERIAL ADVERSE EFFECT" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC SEC REPORTS" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIGGER EVENT" has the meaning set forth in the RTMRG Merger
Agreement.
"WARN" means the Worker Adjustment and Retraining Notification Act, as
amended.
"WINNERS INDEBTEDNESS AMOUNT" has the meaning set forth in the RTMRG
Merger Agreement.
Section 11.02 INTERPRETATION. Any reference in this Agreement to a
statute shall be to such statute, as amended from time to time prior to the date
hereof, and to the rules and regulations promulgated thereunder prior to the
date hereof. Any reference to any agreement, document or instrument means such
agreement, document or instrument as amended or otherwise modified from time to
time in accordance with its terms. Unless the context otherwise requires, (1)
all references made in this Agreement to a Section, Schedule or an Exhibit are
to a Section, Schedule or an Exhibit of or to this Agreement, (2) "or" is
disjunctive but not necessarily exclusive, (3) "will" shall be deemed to have
the same meaning as the word "shall" and (4) words in the singular include the
plural and vice versa. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation," whether or not so followed. All references to "$" or
dollar amounts are to lawful currency of the United States of America, unless
otherwise expressly stated. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
Section 11.03 FEES, COSTS AND EXPENSES.
(a) If the RTM Transactions are consummated, all reasonable
out-of-pocket fees and expenses (including those payable to third party
Representatives) incurred by Triarc and ARG or the RTM Parties or their
Subsidiaries or on their behalf in connection with this Agreement and the
Ancillary Agreements and the transactions contemplated by this Agreement and the
Ancillary Agreements, including the previously contemplated initial public
offering of Arby's, Inc., the Debt Financing and the Debt Refinancings (other
than the costs and expenses of complying with Section 7.07(b) of the RTMRG
Merger Agreement, or any similar costs and expenses incurred or paid by any RTM
Party or its Subsidiaries prior to the date hereof), including the fees and
expenses of
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Ernst & Young LLP and Deloitte & Touche LLP ("EXPENSES"), shall be paid by ARG
promptly upon receipt of reasonably detailed invoices and other documentation
related thereto. Section 11.03(a) of the RTMAC Disclosure Letter sets forth a
true and complete description of the basis upon which the Expenses payable by or
on behalf of RTMAC to the advisors of RTMAC will be paid.
(b) If the RTM Transactions are not consummated, all Expenses shall
be paid by the party incurring those Expenses, except that the Expenses incurred
in connection with the filing fee under the HSR Act, the Expenses incurred in
connection with the previously contemplated initial public offering of Arby's,
Inc. (including those of Deloitte & Touche LLP in connection with the previously
contemplated initial public offering of Arby's, Inc.), the Debt Refinancings
(other than the costs and expenses of complying with Section 7.07(b) of the
RTMRG Merger Agreement, or any similar costs and expenses incurred or paid by
any RTM Party or its Subsidiaries prior to the date hereof), the registration
fee in respect of the Shelf Registration Statement, the fees and expenses of
Valuation Research and the Expenses incurred by RTMAC in connection with its
obligations under Section 6.11 shall be shared 60% by Triarc and 40% by RTMRG,
RTMMC and RTMAC.
Section 11.04 NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be delivered by hand or overnight courier service or by facsimile:
if to Triarc or ARG, to:
Triarc Companies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Sellers, to:
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the RTM Representatives, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other Persons, addresses or facsimile numbers as may be designated in
writing by the Person entitled to receive such communication as provided above.
Each such communication shall be effective (a) if delivered by hand, when such
delivery is made at the address specified in this Section 11.04, (b) if
delivered by overnight courier service, the next Business Day after such
communication is sent to the address specified in this Section 11.04 or (c) if
delivered by facsimile, when such facsimile is transmitted to the facsimile
number specified in this Section 11.04 and appropriate confirmation is received.
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Section 11.05 GOVERNING LAW. This Agreement and any claim or
controversy relating hereto shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflicts of law
rules of such state that would result in the application of the law of another
jurisdiction.
Section 11.06 JURISDICTION. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be brought in the United States District
Court for the Southern District of New York or any New York State court sitting
in New York City, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be deemed to have arisen from a transaction
of business in the State of New York, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 11.04 shall be deemed effective service of process on such
party.
Section 11.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 11.08 EXHIBITS AND DISCLOSURE LETTERS. Any matter, information
or item disclosed in the RTMAC Disclosure under any specific representation or
warranty or schedule number hereof, shall be deemed to have been disclosed for
all purposes of this Agreement in response to every representation or warranty
in this Agreement in respect of which such disclosure is reasonably apparent on
its face. The inclusion of any matter, information or item in the RTMAC
Disclosure Letter shall not be deemed to constitute an admission of any
Liability by the Sellers or any other Person to any third party or otherwise
imply, that any such matter, information or item is material or creates a
measure for materiality for the purposes of this Agreement. Nothing in the RTMAC
Disclosure Letter is intended or shall be deemed to broaden the scope of any
representation or warranty contained in this Agreement.
Section 11.09 NO THIRD-PARTY BENEFICIARIES. Except as provided in
Section 6.10, Article VII and Article X, this Agreement is not intended to
confer any rights or remedies upon any Person other than the parties to this
Agreement.
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Section 11.10 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted for that provision in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of the invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of that provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of that provision, or the application of that provision, in any other
jurisdiction.
Section 11.11 RULES OF CONSTRUCTION. The parties to this Agreement
have been represented by counsel during the negotiation and execution of this
Agreement and waive the application of any Laws or rule of construction
providing that ambiguities in any agreement or other document shall be construed
against the party drafting such agreement or other document.
Section 11.12 ASSIGNMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of each other party hereto, except as otherwise expressly provided
herein. Notwithstanding the foregoing, Triarc may assign its right to purchase
all or any portion of the Membership Interests to one or more of its
Subsidiaries (other than Merger Sub Corp. or Merger Sub LLC) without the prior
written consent of the other parties hereto.
Section 11.13 REMEDIES. Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement shall be cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity. The exercise by a party to
this Agreement of any one remedy shall not preclude the exercise by it of any
other remedy.
Section 11.14 SPECIFIC PERFORMANCE. The parties to this Agreement
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties to this Agreement shall be entitled to an injunction or injunctions
(without the payment or posting of any bond) to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States or any state having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.
Section 11.15 COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
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Section 11.16 ENTIRE AGREEMENT. This Agreement (including the Annexes
to this Agreement), the RTMAC Disclosure Letter, the Triarc Disclosure Letter,
the Confidentiality Agreement and the Ancillary Agreements constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 11.17 RTM REPRESENTATIVES.
(a) Effective as of the date hereof, each Seller, by such Seller's
execution and delivery of this Agreement, hereby irrevocably constitutes and
appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
acting by a majority, to act as his, her or its representatives under this
Agreement and the Ancillary Agreements (the "RTM REPRESENTATIVES"), with full
power of substitution, to exercise the powers and to perform:
(i) the duties required or permitted to be performed by the
RTM Representatives on behalf of the Sellers under and pursuant to this
Agreement and the Ancillary Agreements;
(ii) such other duties as are delegated to the RTM
Representatives under this Agreement and the Ancillary Agreements, to be
performed by the RTM Representatives on behalf of the Sellers in their
capacities as Sellers; and
(iii) such actions as are reasonably incident to any of the
duties referred to in the preceding clauses (i) and (ii) above, including the
taking of any action and the execution and delivery of any agreement or
instrument by or on behalf of each Seller which the RTM Representatives deem
necessary or reasonably required to accomplish the purposes of the foregoing.
The appointment set forth in this Section 11.17 shall be coupled with an
interest.
(b) Without limiting the generality of the foregoing, the RTM
Representatives, acting by a majority, shall have the right and power to do or
cause to be done any of the following things on behalf of each of the Sellers
and all of them collectively:
(i) act as the sole representatives of the Sellers and
exercise all rights of the Sellers under this Agreement or the Ancillary
Agreements, including the prosecution, defense and settlement of all claims and
actions under, and to resolve all matters relating to, indemnification hereunder
or under any related agreement;
(ii) (A) authorize delivery to any Triarc Indemnified Party
of all or a portion of the RTM Escrow Fund in accordance with the Escrow
Agreement, (B) receive any payments made to the Sellers or to the RTM
Representatives on such Sellers' behalf pursuant to this Agreement or the
Ancillary Agreements, (C) invest such funds pending their disbursement in such
manner as the RTM Representatives in their sole discretion, acting by a
majority, deem appropriate, and (D) disburse to the Sellers
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payments made to the RTM Representatives under this Agreement, the Escrow
Agreement or the Ancillary Agreements; and
(iii) otherwise take all actions and do all things reasonably
required or advisable to accomplish any of the matters referred to in this
Agreement or the Ancillary Agreements, including the execution and delivery of
any documents and instruments, and generally to act for and in the name of the
Sellers as fully as each Seller could if then personally present and acting. The
RTM Representatives, acting by a majority, are hereby empowered to determine, in
accordance with the terms of this Agreement or the Ancillary Agreements, the
time or times when, the purposes for which, and the manner in which, the power
herein conferred upon the RTM Representatives shall be exercised.
(c) Triarc, ARG and all other persons dealing with the RTM
Representatives may rely and act upon any writing believed in good faith to be
signed by a majority of the RTM Representatives or an authorized representative
of the RTM Representatives, and may assume that all actions of the RTM
Representatives, acting by majority, and any authorized representative of the
RTM Representatives have been duly authorized by the Sellers. The actions,
decisions and instructions of the RTM Representatives taken, made or given
pursuant to the authority granted to the RTM Representatives pursuant to this
Section 11.17 shall be conclusive and binding upon each Seller and each Seller's
heirs, representatives, successors and assigns, as applicable, and such Persons
shall not have the right to object, dissent, protest or otherwise contest the
same.
(d) The RTM Representatives shall promptly deliver to each Seller
copies of all statements, notices, letters of direction or other material
communications given or received by any of them in his capacity as one of the
RTM Representatives under this Agreement or any Ancillary Agreement. The RTM
Representatives, acting by a majority, shall have the sole power and authority,
without prior notice to or consultation with any of the Sellers, to take all
actions required or permitted to be taken by the RTM Representatives, the
Sellers or any of them under this Agreement or any Ancillary Agreement.
(e) The RTM Representatives may execute any of their duties under
this Agreement or any Ancillary Agreement by or through agents and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
the RTM Representatives' duties, as the case may be, hereunder and thereunder.
The RTM Representatives shall be entitled to rely on any notice, consent,
certificate, affidavit, letter, telegram, statement or other document believed
by the RTM Representatives to be genuine and correct and to have been signed and
sent by the proper person or persons and, in respect to legal matters, upon the
opinion of counsel selected by the RTM Representatives. The RTM Representative
may invest the Expenses Fund and other funds advanced to them for their expenses
in such interest or non-interest bearing accounts or investments as they deem
appropriate. Any remaining amounts in the Expenses Fund after payment of all of
the RTM Representative's expenses for acting as such, or after making adequate
provision therefor, shall be distributed to RTMRG
72
Shareholders pro rata based on shares of RTMRG Common Stock owned immediately
prior to the First Effective Time.
(f) The RTM Representatives shall be entitled to reimbursement for
all out-of-pocket expenses, including reasonable attorneys' and accountants'
fees and expenses, incurred by the RTM Representatives in connection with the
administration or enforcement of, or the preservation of any rights of the
Sellers under, this Agreement or any Ancillary Agreement, first out of the
Expenses Fund to the extent thereof and then from the RTMRG Principal
Shareholders, who shall reimburse the RTM Representatives for expenses. Each of
the RTMRG Principal Shareholders shall be responsible for such out-of-pocket
expenses pro rata in proportion to the percentage of the total number of shares
of RTMRG Common Stock held by the RTMRG Principal Shareholders immediately prior
to the Closing.
(g) Actions by the RTM Representatives will be effective only if
taken by a majority of the RTM Representatives. In carrying out their duties and
responsibilities in their capacity as RTM Representatives under this Agreement
or the Ancillary Agreements, neither the RTM Representatives nor any of their
agents shall be liable to any Seller for any action lawfully taken or omitted to
be taken by him, her, it or them in good faith under this Agreement, the Merger
Agreement or the Ancillary Agreements, except for the RTM Representatives' or
their agents' willful misconduct or fraud.
(h) The RTMRG Principal Shareholders, severally, hereby agree to
indemnify and hold harmless each of the RTM Representatives, his agents,
successors and assigns with respect to any act or omission of or by any of them
absent willful misconduct or fraud in connection with any and all matters
contemplated by this Agreement or the Ancillary Agreements.
(i) If any of the RTM Representatives should die, become disabled
or otherwise become unable to fulfill his responsibilities as one of the RTM
Representatives or shall resign, then the RTMRG Shareholders, the Sellers and
the RTMMC Members, by a majority vote based on their respective pro rata
interests in the Aggregate Merger Consideration, shall promptly appoint a
successor representative and shall promptly notify Triarc of such successor. The
authorizations of the RTM Representatives will be effective until their rights
and obligations under this Agreement and the Ancillary Agreements terminate by
virtue of the termination of any and all obligations of the Sellers to Triarc or
ARG under this Agreement and the Ancillary Agreements.
73
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
TRIARC COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman & CEO
By: /s/ ▇▇▇▇▇ ▇. May
----------------------------------
Name: ▇▇▇▇▇ ▇. May
Title: President & COO
ARBY'S RESTAURANT GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. May
----------------------------------
Name: ▇▇▇▇▇ ▇. May
Title: Executive Vice President
SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇. Samples
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▇▇▇▇▇ ▇. SAMPLES
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
RTM REPRESENTATIVES:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
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J. ▇▇▇▇▇▇▇ ▇▇▇▇▇