Exhibit 10.1
TAX AGREEMENT
TAX AGREEMENT, dated as of September 15, 2000 (the "Agreement"), by and
among Cadbury Schweppes plc, an English public limited company ("CS"), SBG
Holdings Inc., a Delaware corporation ("SBGH"), Triarc Companies, Inc., a
Delaware corporation ("T Parent") and Triarc Consumer Products Group, LLC, a
Delaware limited liability company wholly-owned by T Parent ("TCPG").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and subject to the conditions set forth
in that Agreement and Plan of Merger by and among CS, T Parent and others of
even date herewith (the "Merger Agreement"), SBGH will acquire the stock of
Snapple Beverage Group, Inc., a Delaware corporation ("SBG"); and
WHEREAS, in connection with this acquisition and the other transactions
contemplated by the Merger Agreement, the parties hereto have determined that it
is in their best interests to make the election pursuant to Section 338(h)(10)
of the Code and, where available, comparable elections for state and local (but
not foreign) Tax law purposes (the "Election") with respect to SBG, Snapple
Beverage Corp., a Delaware corporation wholly-owned by SBG ("SBC"), and Mistic
Brands, Inc., a Delaware corporation wholly-owned by SBG ("M") (SBG, SBC and M,
together, the "Mandatory Election Companies"); and
WHEREAS, SBGH may determine to make or cause to be made the Election
with respect to any or all of the Subsidiaries of SBC (the "SBC Subsidiaries");
and
WHEREAS, unless defined in this Agreement, capitalized terms used
herein shall have the meanings ascribed to them in the Merger Agreement;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein and in the Merger Agreement, the
parties hereto agree as follows:
1. THE ELECTIONS. SBGH and T Parent shall jointly make or cause to be made the
Election with respect to the Mandatory Election Companies. At the election of
SBGH, SBGH and T Parent shall jointly make or cause to be made the Election, to
the extent permitted by law, with respect to such SBC Subsidiaries as SBGH, in
its sole discretion, may determine (such SBC Subsidiaries, together with the
Mandatory Election Companies, the "Election Companies").
2. COOPERATION. The parties hereto shall cooperate fully with each other
in the making of each Election. The parties shall provide or cause to be
provided to each other all necessary information to enable the Elections to be
made. The parties hereto shall, promptly following the Closing Date, take all
actions necessary and appropriate, within their control, including filing
Internal Revenue Service ("IRS") Form 8023 and such other forms, returns,
elections, schedules, attachments and other documents as may be required (the
"Forms"), to effect timely, valid Elections.
3. PURCHASE PRICE ALLOCATION.
a. ALLOCATION PRINCIPLES. The amounts of the Stock Allocations shall be
allocated in accordance with Section 2.2 of the Merger Agreement and further
allocated among the stock of the SBC Subsidiaries not included in the Stock
Allocations (all such allocations, the "Further Allocations"). With respect to
each corporation for which the Election is to be made, the aggregate deemed sale
price ("ADSP"), as defined in Treasury Regulation Section 1.338-4T, shall be
determined reflecting the amounts allocated pursuant to the preceding sentence.
The ADSP for each such Election Company shall be allocated among the assets of
such company in accordance with Treasury Regulation Section 1.338-4T (the
"Election Allocations"). Notwithstanding anything else in this Agreement, the
ADSP for any Election Company shall not include or take into account with
respect to such company (x) any of such company's accruals or expenses not
deducted for Tax purposes prior to the Closing Date (including any payment or
obligation to make payment pursuant to Section 5.14 of the Merger Agreement) and
(y) any contingent liabilities. The $200 million referred to in Section 4 of
this Agreement shall be allocated to SBG and further allocated to SBC and the
SBC Subsidiaries for purposes of determining the ADSP for such companies.
b. PROCEDURE FOR DETERMINATION OF ALLOCATIONS. SBGH shall make or cause
to be made the Further Allocations and the Election Allocations (together, the
"Allocations"). SBGH shall deliver a statement setting forth the Allocations
(the "Allocation Statement") to T Parent simultaneously with or prior to the
delivery to T Parent of the Audited Closing Balance Sheet pursuant to Section
2.2 of the Merger Agreement, but in any event at least ninety (90) days prior to
the last possible date for the timely filing of the IRS Form 8023. Within thirty
(30) days of its receipt of the Allocation Statement, T Parent shall deliver to
SBGH in writing either (a) a statement indicating that it has accepted the
Allocation Statement without change (the "Acceptance Statement") or (b) a
statement of proposed changes with respect to the Allocation Statement (the
"Statement of Changes"). If T Parent shall fail to deliver a Statement of
Changes within such 30-day period, T Parent also shall be deemed to have
accepted the Allocation Statement. If T Parent delivers to SBGH a Statement of
Changes, T Parent shall be deemed to accept all Allocations other than those set
forth in the Statement of Changes. In the event T Parent delivers to SBGH the
Acceptance Statement or fails to deliver the Statement of Changes within the
time set forth above, the Election Allocations contained in the Allocation
Statement shall be used in the Forms. If T Parent delivers to SBGH a Statement
of Changes, SBGH shall in good faith attempt to accommodate such changes, and
SBGH and T Parent shall negotiate in good faith in this regard, but if SBGH and
T Parent cannot agree on all items set forth in the Statement of Changes within
fifteen (15) days of SBGH's receipt thereof, SBGH and T Parent shall submit to
an Independent Accounting Firm, within five (5) days, those items, and only
those items, set forth in the Statement of Changes on which they do not agree
(the "Disputed Items"). Within thirty (30) days of its receipt of the Disputed
Items, the Independent Accounting Firm shall determine their resolution, which
shall be conclusive and binding upon the parties. T Parent and SBGH shall, and
shall cause their respective Affiliates to, provide the Independent Accounting
Firm full cooperation. T Parent, on the one hand, and CS and SBGH, on the other
hand, shall each pay fifty percent (50%) of the fees and disbursements of the
Independent Accounting Firm. The Allocations, as ultimately determined under
the procedures set forth in this Section 3(b), shall be called the "Final
Allocations." The Final Allocations shall be used in the Forms, which T
Parent and SBGH will promptly cause to be duly executed by the appropriate
parties and filed with the IRS or other appropriate Tax authority.
4. PAYMENT TO T PARENT. On the date on which the IRS Form 8023 is to be filed,
simultaneously, immediately prior to such filing, (a) the parties shall cause
four originals of each of the Forms to be duly executed, and T Parent shall take
two executed originals of each Form and SBGH shall take two executed originals
of each Form, and (b) CS and SBGH shall jointly and severally pay to T Parent an
aggregate of $200 million (the "Election Amount") by wire transfer of
immediately available funds to such account or accounts specified by T Parent in
writing, plus interest thereon (if any) on the terms set forth in the following
sentence. Notwithstanding anything else in this Agreement, T Parent is under no
obligation to file or cause to be filed the Forms unless and until the Election
Amount is paid to T Parent, plus, in the event the Forms are not filed within
forty-five (45) days of the Closing Date, interest thereon (i) at a rate per
annum equal to the three-month LIBOR rate as reported under the heading "Money
Rates" in the Wall Street Journal on the Closing Date ("LIBOR") plus 0.5%,
compounded quarterly, from (but excluding) the forty-fifth (45th) day following
the Closing Date to (and including) March 15, 2001, and (ii) (a) from (but
excluding) March 15, 2001 at 9% compounded daily on any unpaid balance of the
Election Amount up to and including $170 million, and (b) at a rate per annum
equal to LIBOR plus 0.5%, compounded quarterly, on any remaining balance of the
Election Amount outstanding.
5. FILING OF FORMS; LIQUIDATED DAMAGES. In the event that T Parent or an
Affiliate thereof takes or fails to take such action in breach of this Agreement
such that the Forms cannot be duly and timely filed as contemplated by this
Agreement, then T Parent shall pay to SBGH the sum of $30 million as liquidated
damages, which the parties hereto agree shall be in lieu of any other damages to
which SBGH or any of its Affiliates might be entitled hereunder. In the event
that CS, SBGH or an Affiliate thereof takes or fails to take such action in
breach of this Agreement such that the Forms cannot be duly and timely filed as
contemplated by this Agreement, then CS and SBGH shall be jointly and severally
obligated to pay to T Parent the sum of $30 million as liquidated damages, which
the parties hereto agree shall be in lieu of any other damages to which T Parent
or any of its Affiliates might be entitled to hereunder. These liquidated
damages are considered to be a fair and reasonable estimate of the damages that
may be incurred by the non- breaching parties, which damages cannot be
determined with reasonable certainty. This amount is not considered to be
disproportionate to the provable damages, unconscionable or a penalty by the
parties hereto.
6. REPORTING. The parties will not take, and shall cause their Affiliates
not to take, any position with respect to Taxes, financial reporting or
otherwise in any filing, judicial or administrative proceeding or other
circumstance that is inconsistent with the Forms as filed, except as may be
required by law.
7. MISCELLANEOUS
a. EXTENSION; WAIVER. The parties hereto may to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; and (ii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party. The failure of any party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights. No waiver 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.
b. AMENDMENT. This Agreement may be amended, modified or
supplemented only by written agreement of the parties hereto with respect to
any of the terms contained herein.
c. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to choice of law principles, including all matters of construction,
validity and performance.
d. NOTICES. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand
or by telecopy or on the date of receipt indicated on the return receipt if
mailed (registered or certified, return receipt requested, properly addressed
and postage prepaid):
If to T Parent; to:
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
Attention: Brian L. Schorr, Esq.
Facsimile: (212) 451-3216
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Neale M. Albert, Esq.
Facsimile: (212) 757-3990
and
If to SBGH or an Affiliate thereof, to:
Cadbury Schweppes plc
25 Berkeley Square
London, England W1X 6HT
Attention: Company Secretary
Facsimile: (011) 44 207 830 5221
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Charles E. Engros, Esq.
Steven A. Navarro, Esq.
Facsimile: (212) 309-6273
Such names and addresses may be changed by notice given in accordance with this
Section 7(d).
e. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original, but all
of which shall constitute one and the same original.
f. SEVERABILITY; ENFORCEMENT. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining
portions hereof.
g. CONSENT TO JURISDICTION. Each party hereto hereby irrevocably and
unconditionally (i) submits, for itself and its property, to the exclusive
jurisdiction of any Federal Court sitting in New York County of the State of New
York in any suit, action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement of any judgment rendered in any such
suit, action or proceeding, (ii) waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding in
any such court, including any claim that any such suit, action or proceeding has
been brought in an inconvenient forum and (iii) waives all rights to a trial by
jury in any such suit, action or proceeding. Any and all service of process and
any other notice and any such action or proceeding shall be effective against
any party if given personally or by registered or certified mail, return receipt
requested, or by any other means of mail that requires a signed receipt, postage
prepaid, mailed to such party as provided herein. Nothing herein contained shall
be deemed to affect the right of any party to serve process in any manner
permitted by law.
h. EFFECTIVE DATE. This Agreement shall be effective upon the
consummation of the Mergers as provided for in the Merger Agreement. If the
Merger Agreement is terminated in accordance with its terms, this Agreement
shall be null and void.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the date first above written.
CADBURY SCHWEPPES PLC
/s/ Henry A. Udow
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Name: Henry A. Udow
Title: Directors, Mergers
& Acquisitions
SBG HOLDINGS INC.
/s/ Henry A. Udow
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Name: Henry A. Udow
Title: President
TRIARC COMPANIES, INC.
/s/ Nelson Peltz, Peter W. May
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Name: Nelson Peltz, Peter W. May
Title: Chairman & CEO,
President & COO
TRIARC CONSUMER PRODUCTS
GROUP, LLC
/s/ Peter W. May
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Name: Peter W. May
Title: President & COO