Exhibit 2.1
STOCK PURCHASE AGREEMENT
dated as of December 8, 1997
by and between
THE ▇.▇. ▇▇▇▇▇▇▇▇ COMPANY;
TXL HOLDINGS, INC.;
and
TRIARC COMPANIES, INC.
for
SHARES OF C.H. PATRICK & CO., INC.
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................1
1.01 Definitions................................................1
ARTICLE II SALE OF PURCHASED SHARES, CLOSING AND POST-
CLOSING ADJUSTMENT........................................8
2.01 Sale of Purchased Shares...................................8
2.02 Closing....................................................8
2.03 Post-Closing Adjustment....................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TRIARC
AND PARENT................................................9
3.01 Corporate Existence of Parent and the Company.............10
3.02 Authority.................................................10
3.03 Capital Stock.............................................10
3.04 Subsidiaries..............................................11
3.05 No Conflicts..............................................11
3.06 Approvals and Filings.....................................11
3.07 Financial Statements and Condition; Absence of Undisclosed
Liabilities and Changes...................................12
3.08 Taxes.....................................................14
3.09 Legal Proceedings.........................................14
3.10 Compliance With Laws and Orders...........................14
3.11 Benefit Plans; ERISA......................................14
3.12 Real Property.............................................15
3.13 Tangible Personal Property................................16
3.14 Intellectual Property Rights..............................16
3.15 Contracts.................................................16
3.16 Licenses..................................................17
3.17 Insurance.................................................17
3.18 Labor Relations...........................................18
3.19 Environmental Matters.....................................18
3.20 Brokers...................................................19
3.21 Disclosure Schedule.......................................19
3.22 No Other Buyers...........................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER.............20
4.01 Corporate Existence.......................................20
4.02 Authority.................................................20
4.03 No Conflicts..............................................20
4.04 Governmental Approvals and Filings........................21
4.05 Legal Proceedings.........................................21
4.06 Purchase for Investment...................................21
4.07 Brokers...................................................21
4.08 Financing.................................................21
ARTICLE V COVENANTS OF TRIARC AND PARENT...........................22
5.01 Cooperation; Regulatory Approvals.........................22
5.02 HSR Filings...............................................22
5.03 Investigation by Purchaser................................23
5.04 Conduct of Business Pending Closing.......................23
ARTICLE VI COVENANTS OF PURCHASER...................................24
6.01 Corporation; Regulatory and Other Approvals...............24
6.02 HSR Filings...............................................25
6.03 Notice of Breaches........................................25
ARTICLE VII CONDITIONS TO OBLIGATIONS OF PURCHASER.................25
7.01 Representations and Warranties............................25
7.02 Performance...............................................26
7.03 Officers' Certificates....................................26
7.04 Orders and Laws...........................................26
7.05 Regulatory Consents and Approvals.........................26
7.06 Third Party Consents......................................26
7.07 Opinion of Counsel........................................26
7.08 Indebtedness; Encumbrances................................27
7.09 Delivery of Documents.....................................27
7.10 Material Adverse Effect...................................27
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF PARENT...................27
8.01 Representations and Warranties............................27
8.02 Performance...............................................27
8.03 Officers' Certificates....................................28
8.04 Orders and Laws...........................................28
8.05 Regulatory Consents and Approvals.........................28
8.06 Third Party Consents......................................28
8.07 Opinion of Counsel........................................28
8.08 Purchase Price............................................28
- ii -
ARTICLE IX TAX MATTERS.............................................28
9.01. Section 338(h)(10) Election...............................28
9.02. Tax Indemnity.............................................29
9.03. Tax Returns, Contests.....................................29
9.04. Tax Sharing Agreements....................................31
9.05. Exclusivity...............................................31
ARTICLE X SURVIVAL.................................................31
10.01 Survival of Representations, Warranties, Covenants
and Agreements............................................31
ARTICLE XI INDEMNIFICATION.........................................32
11.01 Indemnification...........................................32
11.02 Limitation of Liability...................................34
11.03 Procedure for Indemnification.............................34
11.04 Cooperation...............................................35
11.05 Exclusivity; Waiver.......................................35
ARTICLE XII ENVIRONMENTAL MATTERS..................................36
12.01 Indemnity Obligations Related to Environmental Matters....36
12.02 Notification of Disputes..................................37
12.03.Environmental Cost........................................38
12.04.Duty of Reasonable Cooperation............................38
12.05.Disclosure of Information.................................38
12.06.Retention of Rights by Indemnifying Party.................39
12.07.Sole and Exclusive Remedy.................................39
ARTICLE XIII TERMINATION...........................................39
13.01 Termination...............................................39
13.02 Effect of Termination.....................................39
ARTICLE XIV MISCELLANEOUS..........................................40
14.01 Notices...................................................40
14.02 Entire Agreement..........................................41
14.03 Expenses..................................................41
14.04 Public Announcements......................................41
14.05 Confidentiality...........................................41
14.06 Further Assurances; Post-Closing Cooperation; Supply
Agreement.................................................42
- iii -
14.07 Waiver....................................................42
14.08 Amendment.................................................43
14.09 No Third Party Beneficiary................................43
14.10 No Assignment; Binding Effect.............................43
14.11 Headings..................................................43
14.12 Invalid Provisions........................................43
14.13 Governing Law.............................................43
14.14 Counterparts..............................................44
14.15 Non-Competition Covenant..................................44
14.16 Triarc Guaranty...........................................44
- iv -
This Stock Purchase Agreement dated as of December 8, 1997 is made
and entered into by and between The ▇.▇. ▇▇▇▇▇▇▇▇ Company, a New York
corporation ("Purchaser"), Triarc Companies, Inc., a Delaware corporation
("Triarc"), and TXL Holdings, Inc., a Delaware corporation ("Parent").
Capitalized terms not otherwise defined herein have the meanings set forth in
Section 1.01 below.
WHEREAS, Parent owns all of the common stock, par value $1.00 per
share (the "Common Stock"), of C.H. Patrick & Co., Inc., a South Carolina
corporation (the "Company"), constituting all of the issued and outstanding
shares of capital stock of the Company;
WHEREAS, Purchaser desires to purchase from Parent, and Parent
desires to sell to Purchaser all of the issued and outstanding shares of Common
Stock ("Purchased Shares");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. (a) Defined Terms. As used in this Agreement,
the following defined terms have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
administrative proceeding, arbitration or Governmental or Regulatory Authority
investigation, whether pending or final.
"Adjusted Working Capital" means, with respect to a particular date,
an amount equal to the sum of the Company's (i) trade accounts receivable and
(ii) inventory less the Company's trade payables and less the Company's accrued
liabilities, except, in the case of the Company's accrued liabilities, such
accrued liabilities are to be calculated excluding the Adjustment Amount, based
on the Books and Records of the Company and calculated consistently with past
practices of the Company; provided that Adjusted Working Capital does not
include intercompany receivables and payables.
"Affiliate" means any Person that directly, or indirectly through one
of more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Agreement" means this Stock Purchase Agreement and the Exhibits, the
Disclosure Schedule and the Schedules hereto and the certificates delivered in
accordance with Sections 7.03 and 8.03, as the same shall be amended from time
to time.
"Adjustment Amount" means, the sum of: (i) the Company's intercompany
accounts, (ii) accruals, if any, under the Company's tax sharing agreements or
management services agreements, (iii) any interest expense accruals, and (iv)
any other income tax accruals.
"Asserted Liability" has the meaning ascribed to it in Section 11.03(a).
"Assets and Properties" of any Person means all assets and properties
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, and wherever situated), operated, owned
or leased by such Person.
"Benefit Plan" means any Plan established by the Company or any
predecessor or Affiliate of the Company existing at the Closing Date to which
the Company contributes, or under which any employee, former employee or
director of the Company or any beneficiary thereof is covered, is eligible for
coverage or has benefit rights.
"Books and Records" means all files, documents, instruments, papers,
books and records relating to the Business or Condition of the Company owned by
the Company, including without limitation financial statements, tax returns and
related work papers (other than books and records for income and franchise
taxes) and letters from accountants, budgets, pricing guidelines, ledgers,
journals, deeds, title policies, minute books, stock certificates and books,
stock transfer ledgers, Contracts, Licenses, customer lists, audit reports,
computer files and programs, retrieval programs, operating data and plans and
environmental studies and plans.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York or South Carolina are authorized or
obligated to close.
"Business or Condition of the Company" means the business, financial
condition or results of operations of the Company.
"CERCLIS" means the Comprehensive Environmental Response and Liability
Information System, as provided by 40 C.F.R. ss.300.5.
"Claim Notice" has the meaning ascribed to it in Section 11.03(a).
"Closing" means the closing of the transactions contemplated by Section 2.02.
"Closing Adjusted Working Capital" means the determination of the
Adjusted Working Capital of the Company as of the Closing Date resulting from
the resolution of all disputed matters, whether by the Reviewing Accountant or
by Triarc and Purchaser, in accordance with Section 2.03.
"Closing Date" means (a) the third Business Day after the day on
which the last of the consents, approvals, actions, filings, notices or waiting
periods described in or related to the filings described in Sections 7.05, 7.06,
8.05 and 8.06 has been obtained, made or given or has expired, as applicable, or
(b) such other date as Purchaser and Parent mutually agree upon in writing.
"Closing Disputed Matters" has the meaning ascribed to it in Section 2.03(b).
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor statute thereto) and the rules and regulations promulgated thereunder.
"Common Stock" has the meaning ascribed to it in the forepart of this
Agreement.
"Company" has the meaning ascribed to it in the forepart of this
Agreement.
"Contamination" means the presence of Hazardous Materials in soil,
subsurface, surface water, or groundwater on, in, under, or from any property or
facility.
"Contract" means any agreement, understanding, lease, license,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract which is binding upon the Company.
"Disclosure Schedule" has the meaning ascribed to it in Section 3.21.
"Environmental Actions" refers to any actual or, to the Knowledge of
Parent, threatened complaint, summons, citation, notice, directive, Order,
claim, litigation, investigation, judicial or administrative proceeding,
judgment, letter or other communication from any Governmental or Regulatory
Authority or any third party involving violation of Environmental Laws.
"Environmental Costs" means any monetary obligations, losses,
liabilities (including strict liability), damages, costs and expenses (including
all reasonable out-of-pocket fees, disbursements and expenses of outside
counsel, reasonable out-of-pocket expert and reasonable consulting fees and
reasonable out-of-pocket costs for environmental site assessments, remedial
investigation, feasibility studies and response and remedial actions), fines,
penalties, sanctions and interest.
"Environmental Laws" includes without limitation the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
9601 et seq., as amended; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901 et seq., as amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et
seq., as amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as
amended; and any other federal, state, local, municipal or foreign laws,
statutes, regulations, rules, ordinances or Orders imposing liability,
establishing standards of conduct for protection of the environment in effect on
the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"Financial Statements" means the financial statements of the Company
delivered to Purchaser pursuant to Section 3.07.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
periods covered by the Financial Statements.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, department, commission, official or other
instrumentality of the United States or any nation, or any state, county, city
or other political subdivision thereof.
"Hazardous Materials" shall mean (a) any element, compound, or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous
substance, extremely hazardous substance or chemical, hazardous waste or special
waste under Environmental Laws; (b) petroleum or any petroleum-based or
petroleum-derived products; (c) polychlorinated biphenyls; (d) any substance
listed as a hazardous waste in RCRA exhibiting the hazardous waste
characteristics set forth in 40 C.F.R. 261. The term "Hazardous Materials"
includes only those asbestos-containing materials which are friable and exposed.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Income Taxes" means all Taxes imposed with respect to, and on the
basis of, the income of the taxpayer.
"Indebtedness" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnified Environmental Matters" means any of the following: (a)
any violation of Environmental Laws or any License under Environmental Laws by
the Company or at the Williston facility on or prior to the Closing Date; (b)
any Releases or Contamination in violation of Environmental Laws which was
generated by the Company and was disposed of at any location other than any site
or facility now or previously owned, operated or leased by the Company and the
Williston facility (the "Properties") if the disposal or arrangement of the
disposal of the Hazardous Materials at such location took place on or prior to
the Closing Date which would trigger an Environmental Action or a liability,
Remedial Action or an affirmative obligation under Environmental Laws; and (c)
any Releases or Contamination in violation of Environmental Laws migrating from
or existing on the Closing Date at any of the Properties which would trigger an
Environmental Action or a liability, Remedial Action or an affirmative
obligation under Environmental Laws.
"Indemnified Party" means any Person seeking indemnification under
any provision of Article XI.
"ING Credit Agreement" means that certain $50,000,000 credit
agreement, dated as of May 16, 1996, by and among the Company (as borrower),
Triarc (as guarantor) and those certain lenders named therein, or any amendment
or replacement thereof.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XI.
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names, service marks, service names,
copyrights, and all pending applications for and registrations of patents,
trademarks, service marks and copyrights.
"Knowledge of Parent" means the actual knowledge of certain officers
and employees of Parent and the Company as listed in Section 1.01 of the
Disclosure Schedule.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States or any
nation, or any state, county, city or other political subdivision thereof or of
any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person required by GAAP to be reflected, accrued for or
reserved against in a balance sheet of such Person.
"Licenses" means licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
"Loss" means any and all damages, fines, penalties, deficiencies,
costs, liabilities, losses and expenses (including without limitation interest,
court costs, reasonable fees and disbursements of attorneys, accountants and
other experts or other reasonable expenses of litigation or other proceedings or
of any claim, default or assessment).
"Material Adverse Effect" means any change or effect that is
materially adverse to the Business or Condition of the Company; provided,
however, that Material Adverse Effect shall exclude any change or effect due to
(i) general business, economic or financial conditions that are not unique to
the Company but also affect other Persons who participate or are engaged in the
lines of business in which the Company also participates or is engaged, and (ii)
any continuation of an adverse trend or condition disclosed to Purchaser in the
Disclosure Schedule.
"Material Contract" has the meaning ascribed to it in Section 3.15(b).
"Notice Period" has the meaning ascribed to it in Section 11.03(a).
"NPL" means the National Priorities List under CERCLA.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right or option to (i) purchase or otherwise receive or be issued any
shares of capital stock of such Person or any security of any kind convertible
into or exchangeable or exercisable for any shares of capital stock of such
Person or (ii) receive or exercise any benefits or rights similar to any rights
enjoyed by or accruing to the holder of shares of capital stock of such Person,
including any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Parent" has the meaning ascribed to it in the forepart of this Agreement.
"Permitted Lien" means (i) any Lien for Taxes not yet due or payable
or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of Law with respect to a
Liability that is not yet due or delinquent and (iii) any minor imperfection of
title or similar Lien which individually or in the aggregate with other such
Liens could not reasonably be expected to have a Material Adverse Effect.
"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, day or dependent care, legal services, cafeteria, life,
health, accident, disability, worker's compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy or
arrangement of any kind, whether written or oral, including, but not limited to,
any "employee benefit plan" within the meaning of Section 3(3) of ERISA.
"Purchase Price" shall mean $72.0 million.
"Purchase Price Allocation" has the meaning ascribed to it in Section 9.01.
"Purchased Shares" has the meaning ascribed to it in the forepart of the
Agreement.
"Purchaser" has the meaning ascribed to it in the forepart of this
Agreement.
"Qualified Plan" means each Benefit Plan which is intended to
qualify under Section 401 of the Code.
"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing of Hazardous
Materials into the environment.
"Remedial Action" means any action or expenditure to the extent
required to remediate, investigate, clean up, remove, treat or otherwise
mitigate a Release or Contamination or to complete post-remedial investigations,
monitoring, operation and maintenance or other care with respect thereto.
"Representatives" has the meaning ascribed to it in Section 5.03.
"Reviewing Accountant" has the meaning ascribed to it in Section 2.03(b).
"Section 338(h)(10) Election" has the meaning ascribed to it in Section 9.01.
"September Adjusted Working Capital" means the Adjusted Working
Capital of the Company as of September 28, 1997 as set forth in Annex A.
"Taxes" means all taxes, assessments, fees, levies and charges of
any kind whatsoever imposed by any federal, state, local or foreign taxing
authority, including interest, penalties and additions thereto.
"Tax Returns" means all returns, reports, forms or other information
required to be filed with, or supplied to, any tax authority (federal, state,
local, or foreign) with respect to any Taxes.
"Transfer Taxes" means any and all transfer, documentary, use,
sales, ad valorem, gross receipts, fees, stamp, recording, intangibles, excise,
real property gains taxes, assessments or similar liabilities, together with any
interest, penalties and additions imposed by any taxing authority with respect
thereto, resulting from the closing of the sale of the Purchased Shares to
Purchaser.
"Triarc" has the meaning ascribed to it in the forepart of this Agreement.
"Unaudited Financial Statements" means the Financial Statements for
the most recent fiscal quarter of the Company delivered to Purchaser pursuant to
Section 3.07(a).
(b) Construction of Certain Terms and Phrases. Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement; (iv)
the terms "Article" or "Section" refer to the specified Article or Section of
this Agreement; and (v) the phrase "ordinary course of business" refers to the
business of the Company. Whenever this Agreement refers to a number of days,
such number shall refer to calendar days unless Business Days are specified. All
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP. Any representation or warranty contained
herein as to the enforceability of a Contract shall be subject to the effect of
any bankruptcy, insolvency, reorganization, moratorium or other similar law
affecting the enforcement of creditors' rights generally and to general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at Law).
ARTICLE II
SALE OF PURCHASED SHARES, CLOSING AND POST-CLOSING ADJUSTMENT
2.01 Sale of Purchased Shares. (a) Parent agrees to sell to
Purchaser, and Purchaser agrees to purchase from Parent, all of the right, title
and interest of Parent in and to the Purchased Shares at the Closing on the
terms and subject to the conditions of this Agreement.
(b) The Purchase Price shall be paid to Parent in immediately
available United States funds at the Closing in the manner provided in Section
2.02.
2.02 Closing. (a) The Closing will take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel to Parent, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as Purchaser and the Company mutually
agree, at 10:00 A.M. local time, on the Closing Date. At the Closing, Purchaser
will pay to Parent the Purchase Price by wire transfer of immediately available
funds to such account as Parent may reasonably direct by written notice
delivered to Purchaser by Parent at least one (1) Business Day before the
Closing Date, or by such other payment method as the parties may mutually agree
upon in writing. Simultaneously, Parent will assign and transfer to Purchaser
good and valid title in and to the Purchased Shares, free and clear of all Liens
(other than Liens created or suffered to exist by Purchaser), by delivering to
Purchaser a certificate or certificates representing the Purchased Shares, duly
endorsed in blank or accompanied by duly executed stock powers endorsed in
blank.
(b) At the Closing, there shall also be delivered to Parent
and the Company, on the one hand, and to Purchaser, on the other hand, the
opinions, certificates and other documents and instruments to be delivered under
Articles VII and VIII.
(c) Purchaser shall be responsible for all Transfer Taxes.
2.03 Post-Closing Adjustment. (a) The parties hereto acknowledge
and agree that the Company's September Adjusted Working Capital was $23.309
million.
(b) Following the Closing, Purchaser and its accountants shall
be afforded full access to any work papers prepared by the Company or other
independent accountants in the preparation of the Company's financial
statements, and reasonable access to any officers, employees or other
representatives of the Company that participates in the preparation thereof.
Within 30 days after the Closing, Purchaser shall deliver to Parent its
calculation of the Closing Adjusted Working Capital with a schedule setting
forth the basis of such computation in reasonable detail (the "Statement of
Working Capital"). The Statement of Working Capital shall be substantially in
the form attached as Annex A. Within 30 days of Parent's receipt of such notice,
Parent shall notify Purchaser in writing that either (A) it concurs with
Purchaser's calculation of Closing Adjusted Working Capital or (B) it disagrees
with such calculation, specifying in reasonable detail the items as to which
disagreement exists (the "Closing Disputed Matters") and setting forth its
calculation of the Closing Adjusted Working Capital. If a notice of disagreement
is delivered by Parent, Purchaser and Triarc shall negotiate in good faith to
resolve in writing any Closing Disputed Matters. If Purchaser and Triarc are
unable to reach an agreement within a period of 30 days after the receipt by
Parent of notice of the existence of any Closing Disputed Matter, then all
Closing Disputed Matters as to which written agreement has not been reached
shall be submitted to and reviewed by Price Waterhouse L.L.P. (the "Reviewing
Accountant"). The parties shall make available to the Reviewing Accountant all
work papers and all other information and materials in their respective
possessions relating to such dispute. The Reviewing Accountant shall consider
only the Closing Disputed Matters. The Reviewing Accountant shall be instructed
by the parties to act promptly to resolve all Closing Disputed Matters, and its
decision with respect thereto, and its calculation of the Closing Adjusted
Working Capital shall be final and binding upon the parties.
(c) Within five (5) business days after the earlier of (i)
receipt by Purchaser of Parent's concurrence with Purchaser's determination of
the Closing Adjusted Working Capital, (ii) Triarc and Purchaser otherwise
agreeing in writing as to the calculation of Closing Adjusted Working Capital,
(iii) the date on which Parent must deliver its notice to Purchaser if Parent
does not do so and (iv) the final determination by the Reviewing Accountant of
the Closing Adjusted Working Capital: (A) if the Closing Adjusted Working
Capital exceeds the September Adjusted Working Capital, Purchaser shall pay to
Parent the amount equal to such excess, or (B) if the Closing Adjusted Working
Capital is less than the September Adjusted
Working Capital, Parent shall pay to Purchaser the amount equal to such
deficiency. Any payment pursuant to (A) or (B) above shall be made by wire
transfer in immediately available funds and shall be accompanied by interest
thereon from the Closing Date to the date of payment at the rate of interest
equal to the prime rate as in effect from time to time as reported in The Wall
Street Journal column "Money Rates".
(d) Each party shall bear its own expenses and the fees and
expenses of its own representatives and experts, including its independent
auditors, in connection with the preparation, review and dispute (if any), and
the final determination, of the Closing Adjusted Working Capital. The parties
shall share equally in the costs, expenses and fees of the Reviewing Accountant.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TRIARC AND PARENT
Parent hereby represents and warrants to Purchaser (and Triarc
represents and warrants as to itself only) as follows:
3.01 Corporate Existence of Parent and the Company. Triarc, Parent
and the Company are corporations validly existing and in good standing under the
Laws of their respective State of incorporation. Triarc and Parent have full
corporate power and authority to execute and deliver this Agreement and to
perform their obligations hereunder and to consummate the transactions
contemplated hereby. The Company has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties. The Company is duly qualified, licensed or
admitted to do business and is in good standing in those jurisdictions specified
in Section 3.01 of the Disclosure Schedule, which are the only jurisdictions in
which the ownership, use or leasing of its Assets and Properties, or the conduct
or nature of its business, makes such qualification, licensing or admission
necessary except for those jurisdictions in which the adverse effects of all
such failures by the Company to be qualified, licensed or admitted and in good
standing in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
3.02 Authority. The execution and delivery by Triarc and Parent of
this Agreement, and the performance by Triarc and Parent of their obligations
hereunder, have been duly and validly authorized by the respective Board of
Directors of Triarc and Parent, no other corporate action on the part of Triarc
and Parent or its stockholder being necessary. This Agreement has been duly and
validly executed and delivered by Triarc and Parent and constitutes a legal,
valid and binding obligation of Triarc and Parent enforceable against Triarc and
Parent in accordance with its terms.
3.03 Capital Stock. (a) The authorized capital stock of the Company
consists solely of twenty-five thousand (25,000) shares of Common Stock, all of
which are duly and validly issued, outstanding, fully paid and nonassessable and
are owned of record directly and exclusively by Parent, and at the Closing, free
and clear of all Liens. Except for this Agreement, there are no outstanding
Options with respect to the Company. There are no other shares, capital stock,
treasury stock, or other form of capitalization or equity ownership of the
Company authorized, issued or outstanding. The Company has not issued and is not
bound by, and there are not in existence, any voting trusts or other agreements
or understandings with respect to the
Common Stock, outstanding or existing subscriptions, Options, warrants, calls,
contracts, demands, commitments, convertible or exchangeable securities,
subscription rights, preemptive or preferential rights or other agreements,
arrangements or understandings of any character or nature whatsoever, including
without limitation any such arrangement (other than with respect to a pledge
agreement executed in accordance with the ING Credit Agreement) under which
either Parent, Triarc or any other party is or may become obligated to issue,
acquire, assign, transfer or sell any of the Common Stock or forms of
capitalization or substantially all of the assets of Company.
(b) The Purchased Shares are fully paid and non-assessable.
The delivery of a certificate or certificates at the Closing representing the
Purchased Shares in the manner provided in Section 2.02 will grant Purchaser
good and valid title to the Purchased Shares, free and clear of all Liens other
than Permitted Liens and Liens created or suffered to exist by Purchaser.
3.04 Subsidiaries. (a) The Company does not own, directly or
indirectly, any subsidiaries, nor does it have any investment or proprietary
interest, directly or indirectly, in any corporation, association, trust,
partnership, joint venture or other entity, except as disclosed in Section 3.04
of the Disclosure Schedule.
(b) Except as set forth in the Financial Statements or as set
forth in Section 3.04 of the Disclosure Schedule, the Company has no commitment,
obligation, guarantee or other form of liability with respect to any entity set
forth in Section 3.04 of the Disclosure Schedule of any nature whatsoever.
3.05 No Conflicts. The execution and delivery by Triarc and Parent
of this Agreement do not, and the performance by Triarc and Parent of their
obligations hereunder and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate or articles of
incorporation or by-laws (or other comparable corporate charter documents) of
Triarc, Parent or the Company;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Section 3.06 or 7.06 of
the Disclosure Schedule, materially conflict with or result in a material
violation or breach of any term or provision of any Material Contract or Law or
Order applicable to Triarc, Parent or the Company or any of their respective
Assets and Properties (other than such conflicts, violations or breaches as
would occur solely as a result of the identity or the legal or regulatory status
of Purchaser or any of its Affiliates); or
(c) except as disclosed in Section 3.05 of the Disclosure
Schedule or as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or to adversely affect the ability of
Parent to consummate the transactions contemplated hereby or to perform its
obligations hereunder, (i) conflict with or result in a violation or breach of,
(ii) require Triarc, Parent or the Company to obtain any consent, approval or
action of, make any filing with or give any notice to any Person as a result or
under the terms of, or (iii) result in the creation or imposition of any Lien
upon Triarc, Parent or the Company or any of their
respective Assets and Properties under, any Contract or License to which Triarc,
Parent or the Company is a party or by which any of their respective Assets and
Properties is bound or affected.
3.06 Approvals and Filings. Except for filings under the HSR Act,
and as disclosed in Section 3.06 or 7.06 of the Disclosure Schedule, no material
consent, approval or action of, or material filing with or notice to any
Governmental or Regulatory Authority or with respect to any Material Contract on
the part of Triarc, Parent or the Company is required in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby except those as would be required solely as a
result of the identity or the legal or regulatory status of Purchaser or any of
its Affiliates.
3.07 Financial Statements and Condition; Absence of Undisclosed
Liabilities and Changes. (a) Prior to the execution of this Agreement, the
Company has delivered to Purchaser true and complete copies of the following
financial statements:
(i) the audited balance sheets of the Company as of
December 31, 1995 and December 31, 1996 and the related audited
consolidated statements of operations and cash flows for the fiscal year
then ended, together with a true and correct copy of the report on such
audited information by Deloitte & Touche, LLP, and all letters from such
accountants with respect to material internal control weaknesses for 1995
and 1996; and
(ii) the unaudited balance sheet of the Company as of
September 28, 1997, and the related unaudited consolidated statements of
operations and cash flows for the portion of the fiscal year then ended.
Except as set forth in the notes thereto and as disclosed in Section 3.07(a) of
the Disclosure Schedule, all such financial statements fairly present in all
material respects the consolidated financial condition and results of operations
of the Company as of the respective dates thereof and for the respective periods
covered thereby, in each case in conformity with GAAP applied on a consistent
basis throughout the periods involved and subject (in the case of the interim
financial statements referred to in clause (ii) above) to normal year-end
adjustments (the effects of which individually or in the aggregate will not be
materially adverse) and to the absence of footnote disclosures.
(b) Except for the execution and delivery of this Agreement
and the transactions to take place pursuant hereto on or prior to the Closing
Date and as disclosed in Section 3.07(b) of the Disclosure Schedule, since
September 28, 1997 there has not been any change in the Business or Condition of
the Company having a Material Adverse Effect.
(c) Since September 28, 1997, except as disclosed in the
Financial Statements, Section 3.07(c) of the Disclosure Schedule or any other
Section of the Disclosure Schedule, the Company has not incurred any Liabilities
which in the aggregate are material to the Business or Condition of the Company,
other than Liabilities incurred in the ordinary course of business.
(d) Except as otherwise disclosed in the Disclosure Schedules,
since September 28, 1997 to the date of this Agreement, the Company has operated
in the ordinary
course of business, and there has not been any transaction or occurrence in
which the Company has:
(i) sold, assigned, licensed, transferred, mortgaged,
pledged, or subjected to a Lien any of its Assets and Properties, other
than inventory sales and sales of obsolete machinery and equipment not
exceeding $100,000 in the aggregate;
(ii) terminated or amended in any material respect any
Material Contract to which it is a party or suffered any loss or
termination or, to the Knowledge of Parent, threatened loss or
termination, of any material supplier or customer;
(iii) issued or delivered any stock or other securities
(whether stock, bonds, debentures or other equity or debt securities) or
granted or agreed to grant any Options, or reclassified its shares of
capital stock into a different number of shares, or repurchased any shares
of any class of capital stock;
(iv) introduced any new or revised procedure or method of
management, operation or accounting;
(v) except as set forth in Section 3.07(d) of the
Disclosure Schedule (which obligations shall be the sole responsibility of
Triarc), granted or incurred any obligation for (i) any bonus or severance
pay or (ii) any increase in the compensation of any officer or employee of
the Company (including, without limitation, any increase pursuant to any
bonus, pension, profit-sharing, retirement, or other plan or commitment),
except for normal merit raises or otherwise in the ordinary course of
business consistent with past practice;
(vi) declared, set aside or made, or agreed to declare,
set aside or make any payments of dividends or any distribution to
shareholders or purchased, redeemed or otherwise acquired, directly or
indirectly, or agreed to purchase, redeem or acquire, contingently or
otherwise, any shares of stock or other securities (other than payments
pursuant to the tax sharing or management services agreements, or
repayments of intercompany indebtedness at any time and from time to time
through the Closing Date, provided that all such amounts are disclosed in
writing to Purchaser);
(vii) made any capital expenditure or commitment
exceeding the amount of $100,000 in the aggregate, or purchased inventory
or supplies other than in the ordinary course consistent with past
practice; or
(viii)agreed, so as to legally bind the Company whether
in writing or otherwise, to take any of the actions set forth in
paragraphs (i) through (vii) of this Section 3.07(d) that is not otherwise
permitted by this Agreement.
Notwithstanding the provisions of Section 3.07, it is agreed that Parent shall,
on or before the Closing Date, terminate such tax sharing and management
services agreements, as well as all intercompany indebtedness between the
Company and Triarc or Affiliates (including Parent) and repay in full third
party Indebtedness.
3.08 Taxes. The Company and any consolidated, combined or unitary
group (under any state or local Tax law) of which the Company is or has been a
member, has filed or caused to be filed in a timely manner (within any
applicable extension periods) all material non-Income Tax Returns required to be
filed, and all such Tax Returns are or will be correct and complete in all
material respects. All non-Income Taxes shown as due on such Tax Returns have
been or will be timely paid in full; and no tax liens that are not Permitted
Liens have been filed on any of the assets of the Company and no material claims
are being asserted with respect to any non-Income Taxes of the Company, and,
except as disclosed in Section 3.08 of the Disclosure Schedule, no examination,
audit or inquiry is currently being conducted by any taxing authority, including
any examination, audit or inquiry which could result in a liability for
non-Income Taxes for which the Company could be liable. There are no outstanding
waivers, extensions or comparable consents regarding the application of the
statute of limitations with respect to any non-Income Taxes or Tax Returns of
the Company.
3.09 Legal Proceedings. Except as disclosed in Section 3.09 of the
Disclosure Schedule, there are no Actions or Proceedings and no Orders pending
or, to the Knowledge of Parent, threatened in writing against, relating to or
affecting Parent or the Company or any of their respective Assets and Properties
which could reasonably be expected (i) to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement, or (ii)
to have a Material Adverse Effect. Section 3.09 of the Disclosure Schedule sets
forth, as of the date hereof, any pending Actions or Proceedings to which the
Company is a party or to which the Assets and Properties of the Company are
subject which if adversely determined would result in liability in excess of
$100,000.
3.10 Compliance With Laws and Orders. Except as disclosed in Section
3.10 of the Disclosure Schedule, the Company is in material compliance with, and
is not in violation in any material respect of, any Law or Order applicable to
the Company, its operations and activities, or any of its Assets and Properties.
3.11 Benefit Plans; ERISA. (a) Section 3.11(a) of the Disclosure
Schedule contains a true and complete list of all of the Benefit Plans, and
identifies each of the Benefit Plans that is a Qualified Plan.
(b) Except as disclosed in Section 3.11(b) of the Disclosure
Schedule, the Company does not maintain and is not obligated to provide benefits
under any life, medical or health plan (other than as an incidental benefit
under a Qualified Plan) which provides benefits to retirees or other terminated
employees other than benefit continuation rights under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.
(c) Each of the Benefit Plans that is subject to ERISA and the
Code is, and its administration is and has been since inception, in compliance
with ERISA and the Code in all respects, except for such failures to comply
which could not reasonably be expected to result in a material liability on the
part of Purchaser, the Company or any fiduciary of any such Benefit Plan.
(d) All contributions and other payments required to be made
by Parent or the Company to any Benefit Plan with respect to any period ending
before or at or including
the Closing Date have been made or reserves adequate for such contributions or
other payments have been or will be set aside therefor and have been accrued in
the Financial Statements in accordance with GAAP.
(e) There are no claims pending or, to the Knowledge of
Parent, threatened in writing by or on behalf of any Benefit Plan, by any Person
covered thereby, or otherwise, which allege violations of Law which,
individually or in the aggregate, could reasonably be expected to result in a
material liability on the part of Purchaser, the Company or any fiduciary of any
such Benefit Plan.
(f) The Company does not participate in or have any present or
future obligation or liability under any "multiemployer plan" as that term is
defined by ERISA. Each Qualified Plan which is qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
and no fact or event has occurred since the date of such determination which
would reasonably be expected to adversely affect the qualified status of any
such Benefit Plan. No non-exempt "prohibited transactions" as defined in Section
406 of ERISA or Section 4975 of the Code have occurred or been engaged in with
respect to any Benefit Plan. There are no "accumulated funding deficiencies" as
defined in Section 412 of the Code (whether or not waived) with respect to any
Pension Plan. No "reportable events" (as that term is defined in Section 4043(b)
of ERISA) have occurred with respect to the Pension Plans which would result in
any liability to the Company.
(g) Parent has heretofore delivered or made available to the
Purchaser correct and complete copies of each Benefit Plan and to the extent
required to be filed, the most recent Annual Report on Form 5500 and
accompanying schedules for each Benefit Plan as filed with the Internal Revenue
Service.
3.12 Real Property. (a) Section 3.12(a) of the Disclosure Schedule
contains a true and correct list of (i) each parcel of real property owned or
operated by the Company, (ii) each parcel of real property leased by the Company
(as lessor or lessee) and (iii) all Liens (other than Permitted Liens) relating
to or affecting any parcel of owned real property or Company's leasehold
interest in the leased property referred to in clauses (i) or (ii).
(b) Except as disclosed in Section 3.12(b) of the Disclosure
Schedule, the Company has good and marketable fee simple title to each parcel of
real property presently owned by it. Except for the real property leased by the
Company to other Persons referred to in clause (ii) of paragraph (a) above, the
Company is in possession of each parcel of real property presently owned by it,
together with all buildings, structures, facilities, fixtures and other
improvements thereon. To the Knowledge of Parent, the Company has received no
written notice of an adverse claim to its ownership of the owned real property
during the last three years.
(c) The Company has a valid and subsisting leasehold estate in
and the right to quiet enjoyment of the real properties leased by it as lessee
under leases referred to in clause (ii) of paragraph (a) above for the full term
of the lease thereof. Except as set forth in Section 3.12(c) of the Disclosure
Schedule, there is no default (or any condition or event which, after notice or
lapse of time or both, would constitute a default) thereunder except for such
defaults that could not, individually or in the aggregate with other such
defaults, reasonably be expected to have a Material Adverse Effect.
(d) To the Knowledge of Parent, the Company has not disposed
of any real property owned by it since April 1979.
3.13 Tangible Personal Property. The Company is in possession of and
has good title to, or has valid leasehold interests in or valid rights under
Contract to use, all material tangible personal property currently used in the
Business. All such tangible personal property is free and clear of all Liens,
other than Permitted Liens and Liens disclosed in Section 3.13 of the Disclosure
Schedule, and is in good working order and condition, ordinary wear and tear
excepted.
3.14 Intellectual Property Rights. Section 3.14 of the Disclosure
Schedule sets forth a true and correct list of all registered Intellectual
Property material to the Business or Condition of the Company presently owned or
licensed by the Company and used in the conduct of the business of the Company.
Except as disclosed in Section 3.14 of the Disclosure Schedule, the Company owns
or possesses licenses or other rights to use all material Intellectual Property
and all material inventions, know-how, discoveries, trade secrets, technology
and technical data and other proprietary information as is necessary to conduct
the Company's business as currently conducted; and there is no pending or, to
the Knowledge of Parent, threatened in writing, claim of infringement upon the
proprietary intellectual property rights relating to the Company's business and
there is no pending or, to the Knowledge of Parent, threatened written claim of
infringement upon the rights of others therein which, individually or in the
aggregate, would have a Material Adverse Effect.
3.15 Contracts. (a) Section 3.15(a) of the Disclosure Schedule
contains a true and complete list of each of the following types of Contracts
(true and complete copies of which, together with all amendments and supplements
thereto, have been delivered to Purchaser prior to the execution of this
Agreement), to which, as of the date hereof, the Company is a party or by which
any of its Assets and Properties is bound:
(i) all Contracts with any Person containing any
provision or covenant prohibiting or materially limiting the ability of
the Company to engage in any business activity or compete with any Person
or prohibiting or materially limiting the ability of any Person to compete
with the Company;
(ii) all partnership, joint venture, shareholders' or other
similar Contracts with any Person;
(iii) all Contracts relating to the future disposition
or acquisition of any Assets and Properties individually or in the
aggregate material to the Business or Condition of the Company, other than
dispositions of inventory, obsolete equipment in an amount less than
$100,000, or acquisitions of supplies in the ordinary course of business;
(iv) all collective bargaining or similar labor Contracts;
(v) all Contracts (other than this Agreement) that (A)
limit or contain restrictions on the ability of the Company to declare or
pay dividends on, to make any other distribution in respect of or to issue
or purchase, redeem or otherwise acquire its capital stock, to incur
Indebtedness, to incur or suffer to exist any Lien, to purchase or sell
any Assets and Properties, to change the lines of business in which it
participates or engages or to engage in any merger or other business
combination or (B) require the Company to maintain specified financial
ratios or levels of net worth or other indicia of financial condition; and
(vi) all contracts or commitments for capital goods or
equipment that require future expenditures in excess of $100,000 and all
supply and purchase Contracts with a term of more than one year relating
to goods and supplies, with a purchase price in excess of $100,000.
(b) Each Contract required to be disclosed in Section 3.15(a)
of the Disclosure Schedule (each, a "Material Contract") is in full force and
effect (except as may expire in accordance with its terms between the date
hereof and the Closing Date) and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, of the Company. Except as
disclosed in Section 3.15(b) of the Disclosure Schedule, neither the Company
nor, to the Knowledge of Parent, any other party thereto is in violation or
breach of or default under any Material Contract (or with notice or lapse of
time or both, would be in violation or breach of or default under any such
Material Contract), the effect of which, individually or in the aggregate with
other such violations, breaches and defaults, would reasonably be expected to
have a Material Adverse Effect.
3.16 Licenses. Except as disclosed in Section 3.16 of the Disclosure
Schedule, the Company owns or validly holds all Licenses material to the conduct
of the Company business as currently conducted, and the Company is not in
material default (or with the giving of notice or lapse of time or both, would
be in default) under any such License.
3.17 Insurance. Section 3.17 of the Disclosure Schedule contains a
true and complete list of all material insurance policies currently in effect
that insure the Assets and Properties or employees of the Company or affect or
relate to the ownership, use or operation of any of the Assets and Properties of
the Company and that (i) have been issued to the Company or (ii) have been
issued to any Person (other than the Company) for the benefit of the Company.
Each policy referred to in clause (i) above is valid and binding and in full
force and effect, no material premiums due thereunder have not been paid and the
Company has not received any written notice of cancellation or termination in
respect of any such policy or is in default thereunder in any material respect.
3.18 Labor Relations. Except as disclosed in Section 3.18 of the
Disclosure Schedule, no employee of the Company is presently a member of a
collective bargaining unit, and there are no pending material disputes,
grievances or unfair labor practice claims. Since September 28, 1997, there has
been no work stoppage, strike or other concerted action by employees of the
Company.
3.19 Environmental Matters. Except as disclosed in Section 3.19 of
the Disclosure Schedule:
(a) The Company has obtained and is in compliance with all
necessary Licenses required under Environmental Laws. The operations of the
Company are in compliance with Environmental Laws. The Company has not received
any written notification alleging a
violation of Licenses required under Environmental Laws from any Governmental or
Regulatory Authority and, to the Knowledge of Parent, there are no facts that
would reasonably give rise thereto.
(b) No written notification of a Release that would trigger a
Remedial Action has been received or provided by or on behalf of the Company and
no site or facility now or previously owned, operated, leased or, to the
Knowledge of Parent, used for disposal of wastes by the Company is listed on the
NPL, CERCLIS or any similar state or local list of sites requiring investigation
or Remedial Action required under Environmental Laws.
(c) Parent's representations and warranties regarding or
referring to any Environmental Laws, Licenses issued thereunder, Hazardous
Materials, Releases, or any other environmental matters are limited to the
language contained in this Section 3.19.
(d) No Environmental Actions have been asserted against the
Company nor has the Company received any written notice of any pending or, to
the Knowledge of Parent, threatened Environmental Action against the Company,
and neither the Parent nor the Company are bound by any Order relating to
compliance with applicable Environmental Laws or requiring either of them to
take or participate in any Remedial Action under Environmental Laws.
(e) The Company has no underground storage tanks at any of its
present or former operating locations, and no Hazardous Materials have been or
are currently located at, in, on, under or about the property of the Company in
a manner which requires notification to any Governmental or Regulatory Authority
or requires Remedial Action under applicable Environmental Laws.
(f) The premises of the Company do not contain any friable and
exposed asbestos-containing material or PCB containing material in violation of
applicable Environmental Laws and no environmental liens have attached to any
property owned or operated by the Company.
3.20 Brokers. Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., whose fees, commissions and expenses are the sole
responsibility of Parent, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Parent directly with
Purchaser without the intervention of any Person on behalf of Parent in such
manner as to give rise to any valid claim by any Person against Purchaser or the
Company for a finder's fee, brokerage commission or similar payment.
3.21 Disclosure Schedule. On or prior to the date hereof, Parent has
delivered to Purchaser a schedule (as the same may be revised or supplemented
pursuant to this Section 3.21, the "Disclosure Schedule") setting forth, among
other things, items of disclosure relating to any or all of the representations
and warranties of Parent; provided, that the mere inclusion of an item in the
Disclosure Schedule shall not be deemed an admission by Parent that such item
represents a material exception or fact, event or circumstance or that such item
would result in a Material Adverse Effect. Parent shall, by notice in accordance
with this Agreement, revise or supplement any Section of the Disclosure Schedule
to include any matters (x) which, if existing or occurring before or at the date
of this Agreement, would have caused any representation or warranty of Parent to
be untrue or incorrect if not set forth or described in the Disclosure
Schedule, and (y) hereafter arising prior to the Closing which, if existing or
occurring before or at the date of this Agreement, would have been required to
be set forth or described in the Disclosure Schedule; it being hereby agreed and
understood that any such revision or supplement to any Section of the Disclosure
Schedule shall not be deemed to modify or amend any representation or warranty
to which such revised or supplemented Disclosure Schedule relates unless
Purchaser shall expressly consent to such modification or amendment in writing.
In no event shall Parent have any liability by virtue of its failure to disclose
in response to any Section of this Agreement information which is disclosed
elsewhere in the Disclosure Schedule.
3.22 No Other Buyers. Triarc and Parent are free to negotiate,
execute, deliver and perform this Agreement and the transactions contemplated
herein without breaching, violating, or otherwise conflicting with any
contractual or other commitments to or with any party other than the Purchaser
regarding the potential transfer, sale or disposition of the Company's assets or
the Common Stock, and so long as this Agreement is in effect they shall not,
directly or through any representative or agent, discuss, negotiate, make
inquiry or review, offer, solicit, or accept any possible offer, or other
expression of interest of any kind or proposal as to the acquisition, sale,
transfer or purchase of substantially all of the Company's assets or the Common
Stock, in whole or in part, by any person or entity other than the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Parent as follows:
4.01 Corporate Existence. Purchaser is a corporation validly
existing and in good standing under the Laws of the State of New York. Purchaser
has full corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.
4.02 Authority. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder, have
been duly and validly authorized by the Board of Directors of Purchaser, no
other corporate action on the part of Purchaser or its stockholders being
necessary. This Agreement has been duly and validly executed and delivered by
Purchaser, and constitutes the legal, valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms.
4.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement does not, and the performance by Purchaser of its obligations
hereunder and the consummation of the transactions contemplated hereby will not:
(a) conflict with, or result in a violation or breach of, any
of the terms, conditions or provisions of the certificate of incorporation or
by-laws (or other comparable corporate charter document) of Purchaser;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in Schedule 4.04 hereto,
conflict with, or result in a violation or breach of, any term or provision of
any Law or Order applicable to Purchaser or any of its Assets and Properties
(other than such conflicts, violations or breaches (i) which could not
in the aggregate reasonably be expected to adversely affect the validity or
enforceability of this Agreement or (ii) as would occur solely as a result of
the identity or the legal or regulatory status of Triarc or any of its
Affiliates); or
(c) except as disclosed in Schedule 4.03 hereto or as could
not, individually or in the aggregate, reasonably be expected to adversely
affect the ability of Purchaser to consummate the transactions contemplated
hereby or to perform its obligations hereunder, (i) conflict with or result in a
violation or breach of, (ii) require Purchaser to obtain any consent, approval
or action of, make any filing with or give any notice to any Person as a result
or under the terms of, or (iii) result in the creation or imposition of any Lien
upon Purchaser or any of its Assets or Properties under, any Contract or License
to which Purchaser is a party or by which any of its Assets and Properties is
bound or affected.
4.04 Governmental Approvals and Filings. Except for compliance with
the HSR Act, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Purchaser is required in
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except where the failure
to obtain any such consent, approval or action, to make any such filing or to
give any such notice could not reasonably be expected to adversely affect the
ability of Purchaser to consummate the transactions contemplated by this
Agreement or to perform its obligations hereunder.
4.05 Legal Proceedings. There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be expected
to result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement.
4.06 Purchase for Investment. The Purchased Shares will be acquired
by Purchaser for its own account for the purpose of investment and not with the
view to, or for resale in connection with, any distribution thereof. Purchaser
acknowledges that Triarc has represented to it that the Purchased Shares have
not been, and will not be, registered under the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder (the "Securities
Act"), by reason of a specific exemption from the registration provisions of the
Securities Act, which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of Purchaser's representations as
expressed herein. Purchaser acknowledges that the Purchased Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. Purchaser will refrain from
transferring or otherwise disposing of any of the Purchased Shares, or any
interest therein, in such manner as to cause Triarc, Parent or the Company to be
in violation of the registration requirements of the Securities Act or
applicable state securities or blue sky laws.
4.07 Brokers. Except for NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.,
whose fees, commissions and expenses are the sole responsibility of Purchaser,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Purchaser directly with Triarc, Parent and the
Company without the intervention of any Person on behalf of Purchaser in such
manner as to give rise to any valid claim by any Person against Triarc, Parent
or the Company for a finder's fee, brokerage commission or similar payment.
4.08 Financing. Purchaser has sufficient funds to pay the Purchase
Price for the Purchased Shares.
ARTICLE V
COVENANTS OF TRIARC AND PARENT
Triarc and Parent covenant and agree with Purchaser that, at all
times from and after the date hereof until the Closing, Triarc and Parent will,
and will cause the Company to comply, with all covenants and provisions of this
Article V, except to the extent Purchaser may otherwise consent in writing.
5.01 Cooperation; Regulatory Approvals. (a) Triarc and Parent
agree to use their reasonable best 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 consummate the transactions contemplated hereby.
(b) In addition to the foregoing, Triarc and Parent will, and
will cause the Company to, (i) take all commercially reasonable steps necessary
or desirable, and proceed diligently and in good faith and use all commercially
reasonable efforts, as promptly as practicable to obtain all consents, approvals
or actions of, to make all filings with and to give all notices to Governmental
or Regulatory Authorities or any other Person required of Triarc, Parent and the
Company to consummate the transactions contemplated hereby, including without
limitation those described in Sections 3.05 and 3.06 of the Disclosure Schedule,
(ii) provide such other information and communications to such Governmental or
Regulatory Authorities or other Persons as such Governmental or Regulatory
Authorities or other Persons may reasonably request in connection therewith and
(iii) provide reasonable cooperation to Purchaser in obtaining all consents,
approvals or actions of, making all filings with and giving all notices to
Governmental or Regulatory Authorities or other Persons required of Purchaser to
consummate the transactions contemplated hereby. Parent will provide prompt
notification to Purchaser when any such consent, approval, action, filing or
notice referred to in clause (i) above is obtained, taken, made or given, as
applicable, and will advise Purchaser of any communications (and, unless
precluded by Law, provide copies of any such communications that are in writing)
with any Governmental or Regulatory Authority or other Person regarding any of
the transactions contemplated by this Agreement.
5.02 HSR Filings. In addition to and not in limitation of the
covenants of Triarc and Parent contained in Section 5.01, Parent will (a) take
promptly all actions necessary to make the filings required of Parent or its
Affiliates under the HSR Act, (b) comply at the earliest practicable date with
any request for additional information received by Parent or any of its
Affiliates from the Federal Trade Commission or the Antitrust Division of the
Department of Justice pursuant to the HSR Act and (c) cooperate with Purchaser
in connection with Purchaser's filing under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.
5.03 Investigation by Purchaser. From and after the date hereof,
Parent shall, and shall cause the Company to (a) provide Purchaser and its
officers, employees, and Purchaser's counsel, accountants, financial advisors,
consultants and other representatives
(collectively, the "Representatives") with reasonable access, upon reasonable
prior notice and during normal business hours, to all officers, employees,
agents and accountants of the Company and its Assets and Properties and Books
and Records but only to the extent that such access does not unreasonably
interfere with the business and operations of the Company, and (b) furnish
Purchaser and its Representatives with all such information and data concerning
the business and operations of the Company as Purchaser or any of such
Representatives reasonably may request in connection with such investigation
except to the extent that furnishing any such information or data would violate
any Law, Order, Contract or License applicable to Parent or the Company or by
which any of their respective Assets and Properties is bound.
5.04 Conduct of Business Pending Closing. Parent hereby covenants
that, from the date hereof to and including the Closing Date, unless Purchaser
shall otherwise consent (such consent not to be unreasonably withheld or
delayed) or as otherwise contemplated by this Agreement:
(a) the Company's business shall be conducted and the Assets
and Properties of the Company shall be repaired and maintained only in the
ordinary course, in a manner consistent with past practice;
(b) the Company shall not (i) make any commitment to make any
capital expenditures after the Closing Date in excess of $100,000, (ii) amend or
waive any material rights under any of its Material Contracts other than in the
ordinary course, or (iii) enter into (1) any written employment or severance
agreement with any of the Company's employees or (2) any new Benefit Plan or,
except to the extent necessary to comply with applicable Law (in which event any
additional liability shall be deemed an accrued liability for purposes of the
Closing Adjusted Working Capital), amend any existing Benefit Plan or grant any
increases in compensation to the Company's employees in excess of increases in
compensation consistent with the past practices of the Company's business;
(c) except in the ordinary course of business consistent with
past practice, the Company shall not dispose of any of its Assets or Properties,
other than (i) inventory sales, (ii) sales in the ordinary course of business of
obsolete machinery and equipment no longer used or useful in the business of the
Company not to exceed $100,000 in the aggregate and (iii) sales and other
dispositions of machinery and equipment, whether or not obsolete, in connection
with the purchase of machinery or equipment replacing the machinery or equipment
sold or disposed not to exceed $100,000 in the aggregate;
(d) the Company shall maintain in full force and effect all
insurance policies now in effect or renewals thereof covering the Assets and
Properties of the Company and the Company's employees;
(e) Parent shall promptly notify Purchaser of the following of
which it becomes aware: (i) any material breach or violation of, default or
event of default under, or actual or threatened termination or cancellation of
any Material Contract relating to the Company's business; (ii) any material loss
of or damage to any of the Assets and Properties; or (iii) any written notice
received by the Company alleging breach or violation by the Company of any
Material Contract;
(f) the Company shall not make any material change to any
business policy of its business, including, without limitation, promotional,
advertising, marketing, pricing, purchasing, personnel, return or product
acquisition policy (other than in the ordinary course in response to changes in
market conditions); and
(g) the Company shall use its commercially reasonable efforts
to preserve for the benefit of its business its relations with its customers and
suppliers.
Nothing contained in this Agreement shall restrict the Company from
paying cash dividends, making payments pursuant to the tax sharing or management
services agreements identified in the Disclosure Schedule, or repaying
intercompany indebtedness at any time and from time to time through the Closing
Date; provided that the foregoing shall not constitute authorization to the
Company, Parent or Triarc to conduct the business of the Company in violation of
the foregoing provisions of this Section 5.04.
5.05 Transfer of Savings Plan Assets. As soon as practicable after
the Closing Date, Triarc shall cause to be transferred out of the Triarc 401(k)
Master Trust the assets of C.H. Patrick & Co., Inc. Retirement Savings Plan into
a trust newly established by the Purchaser as is necessary for the purpose of
holding the assets of such plan. The parties agree to cooperate in good faith to
establish mutually agreeable procedures to effectuate such transfer promptly
following the Closing Date.
ARTICLE VI
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Parent that, at all times from
and after the date hereof until the Closing Purchaser will comply with all
covenants and provisions of this Article VI, except to the extent Parent may
otherwise consent in writing.
6.01 Corporation; Regulatory and Other Approvals. (a) Purchaser
agrees to use its reasonable best efforts to take or cause to be taken all
action and to do or cause to be done all things necessary, proper or advisable
to consummate the transactions contemplated hereby.
(b) In addition to the foregoing, Purchaser will (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all filings
with and to give all notices to Governmental or Regulatory Authorities or any
other Person required of Purchaser to consummate the transactions contemplated
hereby, including without limitation those described in Schedules 4.03 and 4.04
hereto, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as such Governmental or
Regulatory Authorities or other Persons may reasonably request in connection
therewith and (c) provide reasonable cooperation to Parent in obtaining all
consents, approvals or actions of, making all filings with and giving all
notices to Governmental or Regulatory Authorities or other Persons required of
Parent or the Company to consummate the transactions contemplated hereby.
Purchaser will provide prompt notification to Parent when any such consent,
approval, action, filing or notice referred to in clause (a) above is obtained,
taken, made or given, as applicable, and will advise Parent of any
communications (and, unless precluded by Law, provide copies of any such
communications that
are in writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement.
6.02 HSR Filings. In addition to and without limiting Purchaser's
covenants contained in Section 6.01, Purchaser will (i) take promptly all
actions necessary to make the filings required of Purchaser or its Affiliates
under the HSR Act, (ii) comply at the earliest practicable date with any request
for additional information received by Purchaser or its Affiliates from the
Federal Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act and (iii) cooperate with Parent and the Company in
connection with Parent's filing under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.
6.03 Notice of Breaches. From and after the date hereof, the
Purchaser shall promptly notify Parent and Triarc in writing of any material
breach or violation of any representation or warranty of Parent and Triarc
contained herein as to which the Purchaser's Designated Representatives have
actual knowledge. The "Purchaser's Designated Representatives" shall mean those
employees of Purchaser who participated in the negotiation of this Agreement or
the due diligence review of the Company or its Assets and Properties in
connection herewith.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Purchased
Shares are subject to the fulfillment, at or before the Closing, of each of the
following conditions (all or any of which may be waived in whole or in part by
Purchaser in its sole discretion):
7.01 Representations and Warranties. The representations and
warranties made by Triarc and Parent in this Agreement shall be true and correct
in all material respects (except that those representations and warranties which
expressly contain a materiality qualifier shall be true and correct in all
respects) on and as of the Closing Date as though made on and as of the Closing
Date or, in the case of representations and warranties made as of a specified
date earlier than the Closing Date, on and as of such earlier date.
7.02 Performance. Triarc and Parent shall have performed and
complied with, in all material respects, the agreements, covenants and
obligations required by this Agreement to be so performed or complied with by
Triarc and Parent at or before the Closing.
7.03 Officers' Certificates. Triarc and Parent shall have delivered
to Purchaser certificates, dated as of the Closing Date and executed by the
Chairman of the Board, the President or any Vice President of Triarc and Parent
in form and substance customary for transactions of this type and reasonably
satisfactory to Purchaser, and certificates, dated as of the Closing Date and
executed by the Secretary or any Assistant Secretary of Triarc and Parent in
form and substance customary for transactions of this type and reasonably
satisfactory to Purchaser.
7.04 Orders and Laws. No Actions or Proceedings shall have been
instituted (and be pending) by any Governmental or Regulatory Authority seeking
to restrain or prohibit this Agreement or the transactions contemplated hereby.
There shall not be in effect on the Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement.
7.05 Regulatory Consents and Approvals. All material consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Purchaser and Parent to perform their
respective obligations under this Agreement and to consummate the transactions
contemplated hereby shall have been duly obtained, made or given and shall be in
full force and effect, and all terminations or expirations of waiting periods
imposed by any Governmental or Regulatory Authority necessary for the
consummation of the transactions contemplated by this Agreement, including under
the HSR Act, shall have occurred.
7.06 Third Party Consents. The consents (or in lieu thereof
waivers) listed in Section 7.06 of the Disclosure Schedule shall have been
obtained and shall be in full force and effect.
7.07 Opinion of Counsel. Purchaser shall have received the opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel to Parent (which as to matters
concerning Triarc may rely on an opinion from Triarc's Vice President and
Associate General Counsel), dated the Closing Date, and the opinion of the
▇▇▇▇▇▇ Law Firm P.A., counsel to the Company, dated the Closing Date, in form
and substance customary for transactions of this type and reasonably acceptable
to Purchaser.
7.08 Indebtedness; Encumbrances. As of the Closing, (a) all
outstanding Indebtedness of the Company (including all Indebtedness (including
any and all interest expenses accrued and unpaid thereon and any prepayment fees
and penalties and any payment or reimbursement of expenses payable with respect
thereto) under the ING Credit Agreement and all intercompany debt) shall be paid
in full and (b) the Company shall have obtained the release of all Liens on all
Assets securing such Indebtedness. At the Closing, the Parent shall provide or
arrange to be provided to Purchaser all releases and other documents in form and
substance reasonably satisfactory to Purchaser necessary for the release (actual
and of record) of such Liens.
7.09 Delivery of Documents. Parent shall have executed and/or
delivered to the Purchaser the following items: (a) certificates representing
all of the Common Stock, duly endorsed in blank or accompanied by stock powers
duly endorsed in blank, in proper form for transfer to the Purchaser, and the
minute books, stock certificate books, stock ledgers, seal(s) and all other
corporate records of the Company; (b) a certified copy of the Articles of
Incorporation of the Company, and any amendments thereto; a copy of the By-laws
of the Company, and any amendments thereto, certified as true and accurate by an
officer of the Company; and a short form Certificate of Good Standing for
Triarc, Parent and the Company; (c) written resignations, effective as of the
Closing Date, of the directors of the Company; and (d) written resignations,
effective as of the Closing Date, of the officers of the Company who are also
officers of Triarc or Parent.
7.10 Material Adverse Effect. There shall not have occurred any
event or casualty that has a Material Adverse Effect upon the Company and its
Assets and Properties or
upon the Condition or Business of the Company.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF PARENT
The obligations of Parent hereunder are subject to the fulfillment,
at or before the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Parent in its sole discretion):
8.01 Representations and Warranties. The representations and
warranties made by Purchaser in this Agreement shall be true and correct in all
material respects (except that those representations and warranties which
expressly contain a materiality qualifier shall be true and correct in all
respects) on and as of the Closing Date as though made on and as of the Closing
Date.
8.02 Performance. Purchaser shall have performed and complied with,
in all material respects, the agreements, covenants and obligations required by
this Agreement to be so performed or complied with by Purchaser at or before the
Closing.
8.03 Officers' Certificates. Purchaser shall have delivered to
Parent a certificate, dated the Closing Date and executed by the Chairman of the
Board, the President or any Vice President of Purchaser, in form and substance
customary for transactions of this type and reasonably satisfactory to Parent,
and a certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Purchaser, in form and substance customary for
transactions of this type and reasonably satisfactory to Parent.
8.04 Orders and Laws. No Actions or Proceedings shall have been
instituted (and be pending) by any Governmental or Regulatory Authority seeking
to restrain or prohibit this Agreement or the transactions contemplated hereby.
There shall not be in effect on the Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement.
8.05 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Parent and Purchaser to perform their respective obligations
under this Agreement and to consummate the transactions contemplated hereby
shall have been duly obtained, made or given and shall be in full force and
effect, and all terminations or expirations of waiting periods imposed by any
Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement, including under the HSR Act, shall
have occurred.
8.06 Third Party Consents. The consents (or in lieu thereof
waivers) listed in Section 8.06 of the Disclosure Schedule shall have been
obtained and shall be in full force and effect.
8.07 Opinion of Counsel. Parent shall have received the opinion of
the Associate General Counsel to Purchaser, dated the Closing Date, in form and
substance customary for transactions of this type and reasonably satisfactory to
Parent.
8.08 Purchase Price. Purchaser shall have paid the Purchase Price
to the Parent in immediately available funds.
ARTICLE IX
TAX MATTERS
9.01. Section 338(h)(10) Election. Parent and Purchaser agree to
jointly make a timely election under Section 338(h)(10) of the Code and the
regulations issued thereunder and under any comparable provisions of applicable
state and local Income Tax laws (the "Section 338(h)(10) Election"). The Section
338(h)(10) Election shall be based upon the purchase price allocation set forth
in Section 9.01 of the Disclosure Schedule (the "Purchase Price Allocation").
Parent and Purchaser agree to act in accordance with the Purchase Price
Allocation in the preparation, filing and audit of any Tax Return.
9.02. Tax Indemnity. (a) Triarc and Parent, jointly and severally,
shall indemnify and hold harmless Purchaser and the Company with respect to (i)
any Income Taxes that may be imposed on the Company with respect to all taxable
periods of the Company ending on or prior to the Closing Date, including income
taxes resulting from the Section 338(h)(10) election described in Section 9.01,
other than Income Taxes imposed on transactions, if any occurring on the Closing
Date subsequent to the Closing, (ii) all Income Taxes allocated to Parent
pursuant to subsection (b) of this Section 9.02, and (iii) any Income Taxes
assessed against the Company for which the Company is severally liable under
Treasury Regulation ss. 1.1502-6 or any comparable state, local or foreign tax
provisions in connection with having been a member of a consolidated combined or
unitary group immediately prior to the Closing Date.
(b) If, for any United States federal, state, local or foreign
Income Tax purposes, the taxable period of the Company does not terminate on the
Closing Date, Income Taxes, if any, attributable to the taxable period of the
Company that includes the Closing Date shall be allocated to (i) Parent for the
period up to and including the Closing Date, and (ii) Purchaser for the period
subsequent to the Closing Date. For purposes of the preceding sentence, Taxes
for the period up to and including the Closing Date and for the period
subsequent to the Closing Date shall be determined on the basis of an interim
closing of the books as of the close of business on the Closing Date as if such
taxable period consisted of one taxable period ending on the Closing Date
followed by a taxable period beginning on the day following the Closing Date or
under such other reasonable method as the parties may agree. For purposes of
this subsection (b), exemptions, allowances or deductions that are calculated on
an annual basis, such as the deduction for depreciation, shall be apportioned on
a daily basis. Notwithstanding anything to the contrary in this Section 9.02(b),
Taxes imposed on transactions, if any, occurring on the Closing Date subsequent
to the Closing shall be allocated to Purchaser.
(c) Purchaser shall pay, or cause to be paid, and shall
indemnify Triarc and Parent against and hold each of them harmless from, (i) any
Income Taxes attributable to imposed with respect to all taxable periods of the
Company ending after the Closing Date (except to the extent such Taxes are
allocated to Parent pursuant to Section 9.02(b) hereof) and (ii) all other Taxes
relating to the Company or its business or assets other than Taxes for which the
Company and Purchaser are indemnified under Section 9.02(a) hereof.
9.03. Tax Returns, Contests. (a) Parent shall prepare or cause to be
prepared, and file or cause to be filed, all Tax Returns that include the
Company for all taxable periods of the Company which end on or prior to the
Closing Date. Purchaser shall cause to be prepared and filed all Tax Returns
that include the Company for taxable periods ending after but including the
Closing Date; provided, however, that no such Tax Returns shall be filed by
Purchaser which could result in Parent having an indemnity obligation under
Section 9.02(a) prior to the receipt of a written consent from Parent, which
consent shall not be unreasonably withheld or delayed.
(b) Pursuant to Section 13.06(c), after the Closing Date,
Purchaser and Parent shall make available to the other and to any taxing
authority all relevant information, records or documents relating to Tax
liabilities or potential Tax liabilities of the Company for all periods prior to
or including the Closing Date. Parent and Purchaser agree to furnish or cause to
be furnished to each other, and each at their own expense, as promptly as
practicable, such information (including access to books and records) and
assistance, including making employees available on a mutually convenient basis
to provide additional information and explanations of any material provided,
relating to the Company as is reasonably necessary for the filing of any Tax
Return and for the pursuit of any claim, suit or proceeding relating to any
adjustment or proposed adjustment with respect to Taxes. Purchaser shall cause
the Company to retain in its possession such supporting books and records and
any other materials that Parent may specify with respect to Tax matters relating
to any taxable period ending on, prior to or including the Closing Date until
the relevant statute of limitations (including extensions thereof) has expired.
After such time, Purchaser may dispose of such material, provided that prior to
such disposition Purchaser shall give Parent a reasonable opportunity to take
possession of such materials.
(c) The Purchaser shall promptly notify Parent in writing upon
receipt by Purchaser or the Company or any Affiliate thereof of written notice
of any pending or threatened Tax audits or assessments of the Company, which may
affect the liability of the Company for Taxes for which it is indemnified under
this Article IX. The failure of Purchaser to give notice regarding a claim under
the preceding sentence shall relieve Parent of any obligation hereunder to
indemnify Purchaser with respect to such claim if such failure materially
prejudices the defense of such claim. Parent shall have the sole right to
represent the interests of the Company in any tax audit or administrative or
court proceeding and to control the defense, compromise, settlement or
adjudication of any contest which may affect the liability of the Company for
Taxes for which Parent has indemnified the Company under this Article IX;
provided, however, that Parent shall not consent to any settlement that may
reasonably be expected to have a material adverse effect on the Taxes of the
Company with respect to the period after the Closing Date for which it may not
seek indemnity from Parent hereunder without the prior written consent of
Purchaser. Purchaser agrees to cooperate and cause the Company to cooperate
fully with Parent in any such proceeding.
(d) Any refunds or credits of Income Taxes of the Company
attributable to any taxable period ending on or before the Closing Date shall be
for the account of Parent. Any refunds or credits of other Taxes of the Company
shall be for the account of Purchaser. Any refunds or credits of Income Taxes of
Company attributable to a taxable period that includes (but does not end on) the
Closing Date shall be allocated between Parent and Purchaser in accordance with
the methodology set forth in Section 9.02(b) hereof. Any refund owed under this
Section 9.03(d) shall be paid promptly after the receipt thereof.
(e) The Parent shall promptly notify Purchaser in writing upon
receipt by Parent or any Affiliate thereof of written notice of any pending or
threatened Tax audits or assessments of the Company which may affect the
liability of the Company for Taxes for which Triarc and Parent are indemnified
under this Article IX. The failure of Parent to give notice regarding a claim
under the preceding sentence shall relieve Purchaser of any obligation hereunder
to indemnify Parent and Triarc with respect to such claim if such failure
materially prejudices the defense of such claim. Purchaser shall have the sole
right to represent the interests of the Company in any tax audit or
administrative or court proceeding and to control the defense, compromise,
settlement or adjudication of any contest which may affect the liability of the
Company for Taxes for which Purchaser has indemnified Triarc and Parent under
this Article IX; provided, however, that Purchaser shall not consent to any
settlement that may reasonably be expected to have a material adverse effect on
the Taxes of the Company with respect to which Purchaser may seek indemnity from
Parent hereunder without the prior written consent of Parent. Parent agrees to
cooperate fully with Purchaser in any such proceeding.
9.04. Tax Sharing Agreements. Any tax sharing or tax allocation
agreements to which the Company is a party prior to the Closing Date will be
terminated immediately prior to the Closing, with no on-going liability to the
Company whatsoever.
9.05. Exclusivity. Notwithstanding anything to the contrary
contained in this Agreement, any obligations of the parties hereto in respect of
indemnification for claims related to Taxes under this Agreement shall be
governed solely by the provisions of this Article IX.
ARTICLE X
SURVIVAL
10.01 Survival of Representations, Warranties, Covenants and
Agreements. All representations and warranties contained in this Agreement and
all claims and causes of action with respect thereto shall terminate on the
first anniversary of the Closing Date and notices of such claims for
indemnification under Section 11.01 shall be given within such one year period;
provided, however, that (a) the representations and warranties contained in
Section 3.19 will survive any investigation and inquiry made by or on behalf of
Purchaser and shall remain in full force and effect, and all claims and causes
of action with respect thereto shall survive, for a period of three (3) years
following the Closing Date, and (b) the representations and warranties contained
in Sections 3.01, 3.02, 3.03, 3.04 or 3.05(a) will survive any investigation and
inquiry made by or on behalf of Purchaser and shall remain in full force and
effect, and all claims and causes of action with respect thereto shall survive,
without limitation from and after the Closing Date. In the event notice of such
claim for indemnification under Section 11.01 is given within the applicable
survival period, the representations and warranties that are the subject of such
indemnification claim shall survive with respect to such claim until such time
as such claim is finally resolved. Nothing in the foregoing sentence shall
preclude Purchaser from bringing an action for fraud involving intentional and
wanton conduct involving the entire transaction provided for in this Agreement.
This Section shall not limit in any way the survival and enforceability of any
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Closing Date, which shall survive for the respective
periods set forth herein.
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification. (a) Subject to Section 10.01 and to paragraph
(c) of this Section and the other Sections of this Article XI, from and after
the Closing, Triarc and Parent, jointly and severally, shall defend and
indemnify Purchaser and its officers, directors, employees, agents and
Affiliates in respect of, and hold each of them harmless from and against, any
and all Losses suffered, incurred or sustained by any of them or to which any of
them becomes subject, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement contained in this Agreement on the part of Triarc or
Parent. To the extent that any Loss resulting from a breach of Section 3.19
involves an Indemnified Environmental Matter, Purchaser Group's exclusive remedy
shall be pursuant to Article XII.
(b) Subject to Section 10.01 and to paragraph (c) of this
Section and the other Sections of this Article XI, from and after the Closing,
Purchaser shall indemnify Triarc and Parent and its respective officers,
directors, shareholders, employees, agents and Affiliates in respect of, and
hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to any misrepresentation, breach of
warranty or nonfulfillment of or failure to perform any covenant or agreement on
the part of Purchaser contained in this Agreement.
(c) Notwithstanding anything to the contrary contained in this
Agreement, no amounts of indemnity shall be payable as a result of any claim in
respect of a Loss or Environmental Cost arising under paragraph (a) or (b) of
Section 11.01 or Article XII:
(i) unless, with respect to any claim, such claim involves
Losses or Environmental Costs in excess of $100,000;
(ii) unless, in the case of claims in respect of Losses
arising under paragraph (a) or (b) of Section 11.01 (other than under
Section 3.19), until and then only to the extent that the applicable
Indemnified Parties thereunder have suffered, incurred, sustained or
become subject to Losses in excess of $1,000,000 in the aggregate;
(iii) unless, in the case of claims in respect of Losses
arising under Section 3.19 or Environmental Costs arising under Article
XII, until and then only to the extent that the Purchaser Group has
suffered, incurred, sustained or become subject to such Losses or
Environmental Costs in excess of $1,000,000 in the aggregate and, to the
extent such Losses or Environmental Costs exceed $1,000,000, the
Indemnifying Parties shall be responsible for only (A) 60% of the next
$2,000,000 of such Losses and Environmental Costs and then (B) 85% of the
next $7,000,000 of such Losses and Environmental Costs;
(iv) to the extent that such indemnity would result in
aggregate liability for indemnification under this Agreement by the
applicable Indemnifying Parties in excess of $36,000,000;
(v) with respect to any claim for indemnification thereunder,
unless the Indemnified Party has given the Indemnifying Party a Claim
Notice with respect to such claim, setting forth in reasonable detail the
specific facts and circumstances pertaining thereto, as soon as
practicable following the time at which the Indemnified Party discovered
such claim (except to the extent the Indemnifying Party is not prejudiced
by any delay in the delivery of such Claim Notice);
(vi) with respect to any Loss resulting from a
misrepresentation, breach of warranty or nonfulfillment or failure to be
performed of a covenant or agreement that is either (A) disclosed in a
written notice, setting forth in reasonable detail the specific facts and
circumstances pertaining thereto, delivered by the Indemnifying Party to
the Indemnified Party after the date of this Agreement and at or prior to
the Closing or (B) otherwise actually known to the Indemnified Party prior
to the Closing, if in either case the Indemnified Party nevertheless
elects to close (regardless of whether the Indemnified Party waives such
misrepresentation, breach, nonfulfillment or failure in writing or
otherwise); provided, that such obligation to disclose shall not in any
way prejudice or impair the receiving party's right to use such disclosure
as evidence of the failure of the relevant condition to its obligation to
close; or
(vii) to the extent of any Losses suffered or sustained
by Purchaser or any of its Affiliates arising from or caused by actions
taken or failed to be taken by Purchaser, the Company or any of
Purchaser's Affiliates after the Closing.
(d) Indemnity for Excluded Liabilities. Triarc and Parent,
jointly and severally, shall defend and indemnify Purchaser and its officers,
directors, employees, agents and Affiliates in respect of, and hold each of them
harmless from and against any and all Losses suffered, incurred or sustained by
any of them or to which any of them become subject, resulting from, arising out
of or relating to intercompany indebtedness existing as of the Closing Date, tax
sharing or management services agreements identified in the Disclosure Schedule,
third party Indebtedness existing as of the Closing Date or the Company's
ownership of Taysung Enterprises Co., Ltd. or otherwise associated therewith of
any nature whatsoever (other than matters arising out of the commercial
activities of the Company after the Closing Date or in respect of taxes on
dividends or distributions received from Taysung). The indemnity contained in
this Section 11.1(d) is not subject to the limitations, restrictions or other
provisions of Section 10.01 or 11.01(c).
(e) Certain Exclusions. Notwithstanding any other provision of
this Agreement, the monetary thresholds and limitations of Section 11.01(c) and
the time limitations of Section 10.01 shall not in any event apply to any
Purchaser claim for indemnity hereunder which arises under or relates to: breach
of the representations and warranties contained in the first sentence of Section
3.01, or in Section 3.03 or 3.04(b); violation of the covenants set forth in
Section 14.15; Excluded Liabilities under Section 11.01(d); or Article IX.
11.02 Limitation of Liability. For purposes of this Article XI, all
Losses shall be computed net of (a) any insurance proceeds actually received
from third-party insurance (without consideration of deductibles) for the event
or occurrence giving rise to the Losses, and (b) any amounts actually received
from any third parties based on claims related to the event or occurrence giving
rise to the Losses that the Indemnified Party has against such third parties,
which reduce the Losses that would otherwise be sustained; provided, however,
that, in all cases,
the timing of the receipt or realization of insurance proceeds or recoveries
from third parties, the amount of increased costs of insurance arising from the
payment or collection of such insurance proceeds, and the costs of collection
shall be taken into account in determining the amount of reduction of Losses. If
any Indemnifying Party pays to the Indemnified Party any Losses under this
Article XI and the Indemnified Party subsequently recovers from some other
person any sum in respect of any matter giving rise to the relevant claim, the
Indemnified Party shall repay to the Indemnifying Party the lesser of (a) the
amount paid by the Indemnifying Party to the Indemnified Party and (b) the sum
recovered from such other person.
11.03 Procedure for Indemnification. Subject to Section 10.01, all
claims for indemnification under this Article XI shall be asserted and resolved
as follows:
(a) If any claim or demand, or other circumstances or state of
facts which could give rise to any claim or demand, for which an Indemnifying
Party may be liable to an Indemnified Party hereunder is asserted against or
sought to be collected by a third party (an "Asserted Liability"), the
Indemnified Party shall as soon as reasonably possible notify the Indemnifying
Party in writing of such Asserted Liability (the "Claim Notice"); provided, that
no delay on the part of the Indemnified Party in giving any such Claim Notice
shall relieve the Indemnifying Party of any indemnification obligation hereunder
except to the extent that the Indemnifying Party is materially prejudiced by
such delay. The Indemnifying Party shall have 60 days (or less if the nature of
the Asserted Liability requires) from its receipt of the Claim Notice (the
"Notice Period") to notify the Indemnified Party whether or not the Indemnifying
Party desires, at the Indemnifying Party's sole cost and expense and by counsel
of its own choosing to defend against such Asserted Liability; provided, that
if, under applicable standards of professional conduct a conflict on any
significant issue between the Indemnifying Party and any Indemnified Party
exists in respect of such Asserted Liability, then the Indemnifying Party shall
reimburse the Indemnified Party for the reasonable fees and expenses of one
additional counsel (who shall be reasonably acceptable to the Indemnifying
Party). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not be unreasonably withheld),
consent to any settlement unless such settlement (i) includes a full and
unconditional release of the Indemnified Party and (ii) does not require the
Indemnified Party to make any payment or forego or take any action.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
control, pay or settle any Asserted Liability which the Indemnifying Party shall
have undertaken to defend so long as the Indemnified Party shall also waive any
right to indemnification therefor by the Indemnifying Party. If the Indemnifying
Party undertakes to defend against such Asserted Liability, the Indemnified
Party shall cooperate fully with the Indemnified Party and its counsel in the
investigation, defense and settlement thereof, but the Indemnifying Party shall
control the investigation, defense and settlement thereof. If the Indemnified
Party desires to participate in any such defense it may do so at its sole cost
and expense. If the Indemnifying Party elects not to defend against such
Asserted Liability, then the Indemnifying Party shall have the right to
participate in any such defense at its sole cost and expense, but the
Indemnified Party shall control the investigation, defense and settlement
thereof at the reasonable cost and expense of the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any Asserted
Liability effected without its prior written consent (which consent shall not be
unreasonably withheld).
(b) If an Indemnified Party should have a claim against the
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or
sought to be collected from it by a third party, the Indemnified Party shall
send a Claim Notice with respect to such claim to the Indemnifying Party. The
Indemnifying Party shall have 60 days from the date such Claim Notice is
delivered during which to notify the Indemnified Party in writing of any good
faith objections it has to the Indemnified Party's Claim Notice or claims for
indemnification, setting forth in reasonable detail each of the Indemnifying
Party's objections thereto. If the Indemnifying Party does deliver such written
notice of objection within such 60-day period, the Indemnifying Party and the
Indemnified Party shall attempt in good faith to resolve any such dispute within
60 days of the delivery by the Indemnifying Party of such written notice of
objection.
11.04 Cooperation. If requested by the Indemnifying Party, the
Indemnified Party shall cooperate fully in the defense or prosecution of any
suit, action, claim, proceeding or investigation for which such Indemnifying
Party is being called upon to indemnify the Indemnified Party pursuant to this
Article XI, and the Indemnified Party shall furnish such records, information
and testimony and attend all such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in connection therewith and,
if appropriate, the Indemnified Party shall make any counterclaim against the
party asserting such suit, action, claim, proceeding or investigation or any
cross-complaint against any person in connection therewith and the Indemnified
Party further agrees to take such other actions as reasonably may be requested
by an Indemnifying Party to reduce or eliminate any Loss for which the
Indemnifying Party would have responsibility, but the Indemnifying Party will
reimburse the Indemnified Party for any fees or expenses incurred by it in so
cooperating or acting at the request of the Indemnifying Party.
11.05 Exclusivity; Waiver. After the Closing and except in the
instance of fraud involving intentional and wanton conduct involving the entire
transaction provided for in this Agreement, to the extent permitted by Law, the
indemnities set forth in this Article XI shall be the exclusive remedies of
Purchaser, Triarc, Parent and the Company and their respective officers,
directors, employees, agents and Affiliates for any misrepresentation, breach of
warranty or nonfulfillment or failure to be performed of any covenant or
agreement contained in this Agreement, and the parties shall not be entitled to
a rescission of this Agreement or to any further indemnification rights or
claims of any nature whatsoever in respect thereof, all of which the parties
hereto hereby waive. The foregoing shall not restrict a party's right to obtain
equitable relief for breach of the covenants contained in this Agreement.
ARTICLE XII
ENVIRONMENTAL MATTERS
12.01 Indemnity Obligations Related to Environmental Matters. (a)
Subject to the limitations set forth in Section 11.01(c), Section 12.01(b),
Section 12.03 and Section 12.04(d), Triarc and Parent (hereinafter the
"Indemnifying Parties"), jointly and severally, hereby agree to indemnify and
hold harmless the Purchaser and the Company (hereinafter, the "Purchaser Group")
from and against any and all Environmental Costs suffered, incurred or sustained
by them or to which any of them become subject, resulting from, arising out of
or relating to any Indemnified Environmental Matter as set forth herein,
provided, however, that in no event shall the Indemnifying Parties be obligated
to indemnify the Purchaser Group in respect of Environmental Costs (i)
associated with the operations of the Business by the Purchaser Group after the
Closing Date, subject to the rights and remedies otherwise available to the
Purchaser Group under this Agreement, or (ii) which are not the subject of a
notice hereunder given by the Purchaser Group to the Indemnified Parties within
five years from the Closing Date.
(b) The Indemnifying Parties' obligations under Section
12.01(a) (the "Environmental Indemnity Obligations") shall be subject to the
following:
(i) The Indemnifying Parties' obligations for an
Indemnified Environmental Matter will be satisfied upon resolution thereof
in accordance with applicable Environmental Law and payment of associated
Environmental Costs in accordance herewith.
(ii) The Purchaser Group shall notify the Indemnifying
Parties in writing within ten (10) days of each Indemnified Environmental
Matter, which notice shall be accompanied by such related documentation as
is then reasonably available. The Purchaser Group shall provide the
Indemnifying Parties with material supplemental documentation as the same
becomes reasonably available. The Indemnifying Parties shall have no
obligation for indemnification to the extent failure to provide written
notice and documentation prejudices the Indemnifying Parties.
(iii) Environmental Status Report. Purchaser Group shall
provide the Indemnifying Parties with a quarterly report (the
"Environmental Status Report"), on or prior to the fifth business day of
the month following the end of each calendar quarterly period regardless
if the deductible specified in Section 11.01(c)(ii) has been exceeded. The
Environmental Status Report shall describe in reasonable detail the status
of any matters alleged to be Indemnified Environmental Matters for which
Purchaser Group is exercising Principal Management. The Environmental
Status Report shall set forth the following information or documents for
each Indemnified Environmental Matter:
1. Amount and description of any Environmental Costs incurred by
Purchaser Group during the preceding quarterly period, together with
documentation sufficient to support any expenditures incurred;
2. Summary of any meeting or other interaction with any
governmental agency or third party during the preceding quarter together with
copies of any documents associated with such interaction;
3. Description of any Remedial Action taken during the
preceding quarter (including the evaluation used to select such
Remedial Action), or any other significant developments, together
with documentation thereof;
4. Estimate of remaining Environmental Costs to Purchaser
Group together with supporting documentation, including any
feasibility studies relating thereto;
5. Description of any planned meeting or other interaction
with an governmental agency or third party or any planned Remedial
Action (including the evaluation used to select such Remedial
Action), including, if known, the date and location of any such
interaction or Remedial Action;
6. Description and documentation of any developments during
the preceding quarter relating to recovery of any costs related to
Underground Storage Tanks ("UST") from any state or federal UST
trust fund together with any correspondence to or from any
representative of any such UST fund; and
7. Any of the following documents, to the extent prepared or
received during the preceding quarter: notices from government
agencies, reports, workplans, analytical data and any other
non-privileged documentation and correspondence materially bearing
on the Remedial Action.
12.02.Notification of Disputes. In the event the Indemnifying
Parties dispute the appropriateness of any action taken or planned by Purchaser
Group, the appropriateness of any Environmental Costs incurred by Purchaser
Group regarding a Indemnified Environmental Matter or whether any matter
constitutes an Indemnified Environmental Matter, the Indemnifying Parties agree
to notify Purchaser Group of such dispute within a reasonable time of having
received written indemnification demand from Purchaser Group. However, the
Indemnifying Parties' failure to provide such notice shall not limit the
Indemnifying Parties' right to later asset such a dispute except to the extent
Purchaser Group is materially prejudiced by such failure.
12.03.Environmental Cost. The parties agree that any Environmental
Cost incurred by Purchaser Group in connection with any alleged Indemnified
Environmental Matter shall be, as appropriate, applied to the deductible
specified in Section 11.01(c)(iii) or indemnified pursuant to the terms hereof;
provided, however, that the Remedial Action for which any such Environmental
Costs will be incurred shall satisfy all of the following criteria:
1. The Remedial Action is required by Environmental Laws as of the
Closing Date; and
2. To the extent the cost for performing the Remedial Action is
increased because the use of the Properties is not for an industrial purpose,
the increased costs are to be borne by the Purchaser Group;
12.04.Duty of Reasonable Cooperation. (a) The parties agree to reasonably
cooperate with one another in connection with any Indemnified Environmental
Matter, including allowing reasonable access to relevant personnel, records, and
facilities;
(b) The parties agree to promptly notify one another of any material
contact, whether written, verbal, or in person, by or with any government agency
or third party regarding any Indemnified Environmental Matter;
(c) The Indemnifying Parties shall have the right to audit at their
own expense the Purchaser Group's engineering efforts in connection with any
alleged Indemnified Environmental Matter, including, but not limited to (i)
consulting with Purchaser Group's engineer; (ii) taking split samples; (iii) the
right to request, which shall not be unreasonably denied, to take samples; (iv)
inspecting field conditions; (v) attending meetings between the Purchaser Group
and any Governmental or Regulatory Authority; (vi) observing Purchaser Group's
field activities or reviewing Purchaser Group's documentation relating to the
alleged Indemnified Environmental Matter; provided however that the foregoing
does not reasonably interfere with the Purchaser Group's engineering efforts;
and
(d) The Purchaser Group covenants to diligently pursue the lowest
cost alternative for Remedial Action relating to an Indemnified Environmental
Matter consistent with sound engineering practices reasonably calculated to
achieve compliance with Environmental Law and the Indemnifying Parties shall not
be required to indemnify the Purchaser Group to the extent of any breach of this
covenant. To the extent the Purchaser Group elects in writing to pursue a higher
cost alternative, the excess cost shall be borne by the Purchaser Group.
12.05.Disclosure of Information. The Parties agree not to submit or
disclose information about the environmental condition of the Properties
relating to any Indemnified Environmental Matter to any Person unless
affirmatively required to do so by Environmental Law or other Applicable Law. If
one of the Parties concludes that it is required to disclose such information
("Disclosing Party"), the Disclosing Party, shall immediately notify the Other
Party of: (i) the particular requirement involved, and (ii) any proposed
disclosures or submittals it intends to make. The Disclosing Party shall provide
the Other Party with a reasonable time period to review and comment upon such
proposed submittal or disclosure within the time period required under
Environmental Law. The Disclosing Party shall reasonably consider requested
modifications by the Other Party prior to making such submittal or disclosure.
12.06.Reimbursement of Environmental Costs By Purchaser Group . The
Purchaser Group covenants that it will diligently pursue reimbursement from any
state or federal UST trust fund or from any Person for Environmental Costs
incurred pursuant to any Indemnified Environmental Matter. The net amount of any
Environmental Costs so recovered shall be reimbursed to the Indemnifying Parties
to the extent theretofore paid or, to the extent not so paid, shall reduce the
Environmental Cost otherwise payable by the Indemnified Parties.
12.07.Sole and Exclusive Remedy. The parties agree that the
Indemnifying Parties' obligation to indemnify Purchaser Group for Indemnified
Environmental Matters shall constitute the Purchaser Group's sole and exclusive
remedy regarding any Indemnified Environmental Matters that may arise in
connection with this transaction. With the exception of a fraud claim or a claim
to enforce the terms of this Environmental Indemnity, the Purchaser Group hereby
waives all statutory or common law rights and remedies, including but not
limited to any
claims under CERCLA, against Triarc for any Environmental Costs associated with
Indemnified Environmental Matters.
ARTICLE XIII
TERMINATION
13.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of Parent and Purchaser;
(b) at any time before the Closing, by Parent or by Purchaser
in the event that any final and nonappealable Order or Law becomes effective
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement, upon
notification of the non-terminating party by the terminating party; or
(c) at any time after February 27, 1998 by Parent or by
Purchaser, upon notification of the non-terminating party by the terminating
party if the Closing shall not have occurred on or before such date and such
failure to consummate is not caused by a breach of this Agreement by the
terminating party.
13.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 13.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of Triarc, Parent or
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except that the provisions with respect to
expenses in Section 14.04 and confidentiality in Section 14.05 will continue to
apply following any such termination.
ARTICLE XIV
MISCELLANEOUS
14.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Purchaser, to:
The ▇.▇. ▇▇▇▇▇▇▇▇ Company
▇▇ ▇▇▇▇▇▇▇▇ Specialty Chemicals
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Legal
If to Triarc or Parent, to:
Triarc Companies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice
President and General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
14.02 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, except that certain confidentiality agreement between Triarc and
Purchaser, dated August 28, 1997 (the "Confidentiality Agreement"), and this
Agreement, together with the Confidentiality Agreement, contains the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, representations,
warranties, agreements or undertakings of any party hereto with respect to the
transactions contemplated by this Agreement other than those set forth herein or
made hereunder.
14.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 13.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the transactions contemplated
hereby.
14.04 Public Announcements. At all times at or before the Closing,
Triarc and Parent, on the one hand, and Purchaser, on the other hand, will not
issue or make any reports, statements or releases to the public or generally to
the employees, customers, suppliers or other Persons to whom the Company sell
goods or provide services or with whom the Company otherwise has significant
business relationships with respect to this Agreement or the transactions
contemplated hereby without the consent of the other, which consent shall not be
unreasonably withheld. If either party is unable to obtain the approval of its
public report, statement or release from the other party and such report,
statement or release is, in the opinion of legal counsel to such party, required
by Law or the rules and regulations of any applicable stock exchange in order
to discharge such party's disclosure obligations, then such party may make or
issue the required report, statement or release and promptly furnish the other
party with a copy thereof. Triarc and Parent, on the one hand, and Purchaser, on
the other hand, will also obtain the other party's prior approval of any press
release to be issued immediately following the Closing announcing the
consummation of the transactions contemplated by this Agreement, which approval
shall not be unreasonably withheld.
14.05 Confidentiality. The terms and provisions of the
Confidentiality Agreement are hereby incorporated by reference herein, and the
parties hereto agree to be bound by the terms of the Confidentiality Agreement
as if originally a party thereto; provided, however, that if any conflict exists
between this Agreement and the Confidentiality Agreement, the terms and
conditions set forth herein shall supersede and govern.
14.06 Further Assurances; Post-Closing Cooperation; Supply
Agreement. (a) Subject to the terms and conditions of this Agreement, at any
time or from time to time after the Closing, each of the parties hereto shall
execute and deliver such other documents and instruments, provide such materials
and information and take such other actions as may reasonably be necessary,
proper or advisable, to the extent permitted by Law, to fulfill its obligations
under this Agreement.
(b) Following the Closing, each party will afford the other
party, its counsel and its accountants, during normal business hours, reasonable
access to the books, records and other data relating to the Business or
Condition of the Company in its possession with respect to periods prior to the
Closing and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party in connection
with (i) the preparation of tax returns, (ii) the determination or enforcement
of rights and obligations under this Agreement, (iii) compliance with the
requirements of any Governmental or Regulatory Authority, (iv) the determination
or enforcement of the rights and obligations of any Indemnified Party or (v) in
connection with any actual or threatened Action or Proceeding. Further, each
party agrees for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any such books, records and other data unless
such party shall first offer in writing to surrender such books, records and
other data to the other party and such other party shall not agree in writing to
take possession thereof during the ten (10) day period after such offer is made.
(c) If, in order properly to prepare its tax returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a party be furnished with additional information, documents
or records relating to the Business or Condition of the Company not referred to
in paragraph (b) above, and such information, documents or records are in the
possession or control of the other party, such other party agrees to use
reasonable best efforts to furnish or make available such information, documents
or records (or copies thereof) at the recipient's request, cost and expense.
(d) Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with any provision of this Section in relation to such dispute shall be subject
to applicable rules relating to discovery.
(e) After the Closing, the Purchaser shall cause the Company
to, comply with the terms and provisions of that certain Supply Agreement, dated
as of March 31, 1996 by and between the Company and Avondale ▇▇▇▇▇, Inc.
14.07 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
14.08 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
14.09 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XI.
14.10 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder to a wholly-owned subsidiary, provided that any such
subsidiary agrees in writing to be bound by all of the terms, conditions and
provisions contained herein, but no such assignment referred to in clause (b)
shall relieve Purchaser of its obligations hereunder. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
14.11 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
14.12 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
14.13 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed entirely within such State, without giving
effect to the conflicts of laws principles thereof.
14.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
14.15 Non-Competition Covenant. (a) In consideration of Purchaser's
entering into and fulfilling its obligations under this Agreement, and ancillary
to the sale of the Common Stock as provided herein, Triarc and Parent agree
that, without the prior written consent of Purchaser, Triarc and Parent and
their Subsidiaries shall not for a period of five (5) years after the Closing
Date: (i) engage in any Competing Activity (as hereinafter defined) within the
geographic area in which Company or its Affiliates has conducted the Business,
it being understood and agreed by the parties that such geographic area is
world-wide; or (ii) either for its own benefit or purposes or the benefit or
purposes of any other person, interfere with, attempt to divert, entice away or
accept any business from any Person who was a customer of the Company for the
purpose of a Competing Activity.
(b) For the purposes of this Agreement, "Competing Activity"
means any participation in, or other ownership or organization of, any person or
entity which is engaged in, or hereafter engages in, the design, development,
manufacture, distribution or sale of any Product, whether Triarc or Parent or
their Subsidiaries are acting as an agent, consultant, investor, partner,
shareholder, proprietor or in any representative capacity.
(c) For the purposes of this Agreement, the term "Products"
means that group of products which has been designed, developed, and/or produced
and which is being sold or offered for sale by the Company on the Closing Date
in the operation of its business, and any products which are competitive
therewith or which perform substantially the same functions as them.
(d) Notwithstanding the foregoing, nothing herein shall
prevent or prohibit Triarc, Parent or any of their Subsidiaries from acquiring,
investing in, controlling, or otherwise having an interest in a business so long
as not more than ten percent (10%) of such business' sales and profits are
derived from an operation which is a Competing Activity, or from acquiring,
investing in, or otherwise having an interest in not more than a ten percent
(10%) equity interest or capital stock interest in a business whose sales and
profits are derived from a Competing Activity.
(e) Should any portion of the covenants set forth in this
Section 14.15 be unenforceable because of the scope thereof or the period
covered thereby, or otherwise, the subject covenant shall be deemed to be
reduced and limited to enable it to be enforced to the extent permissible under
the laws and public policies applicable to any legal action in which enforcement
is sought.
14.16 Triarc Guaranty. (a) Triarc hereby unconditionally guarantees
the full and prompt performance by Parent of each and every covenant,
obligation, indemnity or undertaking of Parent hereunder, and Triarc guarantees
that Parent shall at all times perform same in accordance with the terms and
conditions of this Agreement. Upon failure of Parent to perform, discharge,
satisfy or deliver pursuant to any such covenant, obligation, indemnity or
undertaking hereunder, Triarc shall forthwith on demand by Purchaser perform in
place of Parent as though Triarc had been the party hereunder in place of
Parent.
(b) The obligations of Triarc hereunder shall be unconditional
and absolute, and without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release of any obligation of Parent under this Agreement;
(ii) any modification or amendment of this Agreement;
(iii) any change in the corporate existence, structure
or ownership of Parent or any insolvency, bankruptcy, reorganization, or
similar proceeding affecting Parent or its assets, or the liquidation,
dissolution, merger or similar termination of the existence of Parent;
(iv) any act or omission to act or delay of any kind by
Parent, Triarc or any other person or entity or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of Parent's or Triarc's
obligations hereunder.
(c) Notwithstanding any other provision hereof, the provisions of
this Section 14.16 shall survive the Closing as independent obligations and
covenants of Triarc.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
THE ▇.▇. ▇▇▇▇▇▇▇▇ COMPANY
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TRIARC COMPANIES, INC.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
TXL HOLDINGS, INC.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: President
LIST OF OMITTED ANNEXES
Annex A -- C.H. Patrick & Co., Inc.
Working Capital Adjustments
Disclosure Schedules
The Registrant hereby agrees to furnish supplementally a copy of the omitted
annex or the Disclosure Schedules to the Securities and Exchange Commission upon
its request.