EXHIBIT J
AFFILIATE SUBORDINATION AGREEMENT
AFFILIATE SUBORDINATION AGREEMENT, dated as of August 9,
1995 (as amended, supplemented or otherwise modified from time
to time, this "Agreement") among TRIARC COMPANIES, INC., a
corporation organized under the laws of Delaware (the
"Guarantor"), MISTIC BRANDS, INC., a corporation organized under
the laws of Delaware (the "Borrower"), and THE CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), a national banking association, as
agent (in such capacity, together with its successors in such
capacity, the "Agent") for the benefit of each of the lenders
(the "Lenders") signatory to the Credit Agreement dated as of
August 9, 1995 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower,
the Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by the Guarantor under the
Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their extensions of credit to the Borrower
under the Credit Agreement that the Guarantor shall have
executed and delivered this Agreement to the Agent to
subordinate certain obligations of the Borrower to the Guarantor
to the Senior Obligations.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to
purchase Participating Interests in Letters of Credit issued
under the Credit Agreement, each of the Guarantor, the Borrower
and the Agent agree as follows:
ARTICLE 1. DEFINITIONS.
Capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
The following terms, as used herein shall have the following
meanings:
"Default" means any event which with the giving of notice
or lapse of time, or both would become an Event of Default.
"Event of Default" means any "Event of Default" under the
Credit Agreement, the Unconditional Guaranty or any other
Facility Document.
"Management Agreement" means the Management Agreement dated
as of the date hereof between the Borrower and the Guarantor, in
the form of Exhibit I, as the same may be amended or
supplemented from time to time.
"Management Fees" means all fees and other amounts payable
by the Borrower to the Guarantor in respect of "Service Costs"
under and as defined in the Management Agreement (including,
without limitation, fees due, amounts accrued, and overhead and
administrative costs billed by the Guarantor to the Borrower).
"Security Documents" means the Unconditional Guaranty, the
Security Agreement, the Trademark Security Agreement, the Pledge
Agreement, this Agreement and each other security document that
may from time to time be delivered to the Agent in connection
with the Credit Agreement.
"Senior Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing
of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding), the Notes and
all other obligations and liabilities of any Obligor to the
Agent or any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Note, any Letter of Credit, any
Interest Rate Protection Agreement to which a Lender is a party,
any other Facility Document and any other document made,
delivered or given in connection therewith or herewith, whether
on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to
the Agent or any Lender) or otherwise.
"Subordinated Obligations" means all obligations from time
to time owing by the Borrower to the Guarantor in respect of
Management Fees.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES.
The Guarantor represents and warrants that:
Section 2.01. Incorporation, Good Standing and Due
Qualification. The Guarantor is duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own its assets and to transact the business in which it is now
engaged and is duly qualified as a foreign corporation and in
good standing under the laws of each other jurisdiction in which
such qualification is required, except where the failure to
qualify could not reasonably be expected to have a material
adverse effect on the business, profits, Properties or condition
of the Guarantor.
Section 2.02. Corporate Power and Authority; No Conflicts.
The execution, delivery and performance by the Guarantor of this
Agreement have been duly authorized by all necessary corporate
action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-
laws; (c) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule or
regulation or any order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability
to the Guarantor or any of its Subsidiaries; (d) result in a
breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Guarantor or any of
its Subsidiaries is a party or by which it or its Properties may
be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Security
Documents), upon or with respect to any of the Properties now
owned or hereafter acquired by the Guarantor or any of its
Subsidiaries; or (f) cause the Guarantor or any of its
Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease
or instrument.
Section 2.03. Legally Enforceable Agreement. Each
Facility Document to which the Guarantor is a party is a legal,
valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms, except to
the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).
ARTICLE 3. SUBORDINATION PROVISIONS.
It is intended by the Lenders that the subordination
provisions contained in this Agreement shall benefit the Lenders
equally (in priority) and ratably in order that the Senior
Obligations rank equally in right of payment over the
Subordinated Obligations. To implement the foregoing (but
without limiting the generality thereof as it may apply to other
provisions of this Agreement), the Guarantor agrees as follows:
Section 3.01. Subordination. The Guarantor hereby agrees
that, except as and to the extent hereinafter provided, the
Subordinated Obligations are and shall be subordinate and
subject in right of payment to the prior payment in full of all
of the Senior Obligations, whether or not such Senior
Obligations have been voided, disallowed or subordinated
pursuant to Section 548 of the United States Bankruptcy Code or
any applicable state fraudulent conveyance laws, whether
asserted directly or under Section 544 of the United States
Bankruptcy Code. Without limiting the foregoing, the Guarantor
also hereby agrees that, (a) except as otherwise provided in
Section 3.02 of this Agreement, it will not ask, demand, sue
for, take or receive from the Borrower (other than directing the
Borrower to make payment directly to the holders of the Senior
Obligations for the purpose of causing the Senior Obligations to
be paid), by set-off or in any other manner, payment of the
whole or any part of the Subordinated Obligations, or any
security therefor, and (b) it will not accelerate all or any
portion of the Subordinated Obligations or otherwise implement
any remedy it may have in respect of the Subordinated
Obligations (provided that the Guarantor may accelerate the
Subordinated Obligations if all outstanding Senior Obligations
shall have been previously accelerated), in each case unless and
until all of the Senior Obligations shall have been fully,
finally and indefeasibly paid in cash, whether or not such
Senior Obligations have been voided, disallowed or subordinated
pursuant to Section 548 of the United States Bankruptcy Code or
any applicable state fraudulent conveyance laws, whether
asserted directly or under Section 544 of the United States
Bankruptcy Code. The Guarantor hereby irrevocably directs the
Borrower to make such prior payment. The Guarantor further
agrees that it will not institute against the Borrower any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law until such
time as the Senior Obligations have been fully, finally and
indefeasibly paid in cash.
Section 3.02. Certain Payments Permitted. So long as no
Default or Event of Default has occurred and is continuing (and
only to the extent not prohibited by the provisions of the
Facility Documents), the Guarantor may from time to time receive
from the Borrower payments of all accrued and unpaid
Subordinated Obligations. Nothing in this Agreement shall limit
the right of the Guarantor to receive payments of the
Subordinated Obligations so long as the Senior Obligations shall
have been indefeasibly paid in full.
Section 3.03. Distributions, etc. In furtherance of, and
to make effective, the subordination provided for herein, the
Guarantor further agrees as follows:
(a) In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets
of the Borrower or the proceeds thereof, to creditors of the
Borrower, or upon any indebtedness of the Borrower, by reason of
(1) the liquidation, dissolution or other winding up, partial or
complete, of the Borrower or the Borrower's business, (2) any
receivership, insolvency or bankruptcy proceeding, or assignment
for the benefit of creditors, or (3) any proceeding by or
against the Borrower for any relief under any bankruptcy or
insolvency law or laws relating to the relief of debtors,
readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions, then and in any such event:
(i) any payment or distribution of any kind or
character, whether in cash, securities or other property
which but for this Agreement would be payable or
deliverable upon or with respect to any or all of the
Subordinated Obligations, shall instead be paid or
delivered directly to the Agent for application to the
Senior Obligations, whether then due or not due, until the
Senior Obligations shall have first been fully, finally and
indefeasibly paid in cash and satisfied; and
(ii) the Guarantor hereby irrevocably authorizes
and empowers the Agent to demand, sue for, collect and
receive every such payment or distribution and give
acquittance therefor, and to file and/or vote claims and
take such other proceedings, in the Agent's own name or in
the name of the Guarantor, or otherwise, as the Agent may
deem necessary or advisable for the enforcement of this
Agreement (including, without limitation, the filing of any
proof of claim in respect of the Subordinated Obligations
in any bankruptcy or insolvency proceeding of the
Borrower). In furtherance of the foregoing, the Guarantor
agrees duly and promptly to take such action as may be
reasonably requested by the Agent to assist in the
collection of the Subordinated Obligations for the account
of the Agent and/or to file appropriate proofs of claim in
respect of the Subordinated Obligations, and to execute and
deliver to the Agent on demand such powers of attorney,
proofs of claim, assignments of claim or other instruments
as may be reasonably requested by the Agent to enable the
Agent to enforce any and all claims upon or with respect to
the Subordinated Obligations, and to collect and receive
any and all payments or distributions which may be payable
or deliverable at any time upon or with respect to the
Subordinated Obligations.
(b) If any payment, distribution of security or
proceeds of any security are received by the Guarantor upon or
in respect of the Subordinated Obligations in contravention of
the provisions of this Article 3, the Guarantor will forthwith
deliver the same to the Agent in precisely the form received
(except for the endorsement or assignment of the Guarantor where
necessary), for application to the Senior Obligations, whether
then due or not due, and, until so delivered, the same shall be
held in trust by the Guarantor as property of the Agent. In the
event of the failure of the Guarantor to make any such
endorsement or assignment, the Agent, or any of its officers or
employees, are hereby irrevocably authorized to make the same.
(c) The Guarantor agrees that it will not transfer,
assign, pledge or encumber the Subordinated Obligations or any
part thereof or any instrument evidencing the same unless the
respective instrument of assignment specifically provides that
the assignee takes the Subordinated Obligations subject to the
provisions of this Agreement and such assignee executes and
delivers to the Agent an instrument in form and substance
satisfactory to the Agent pursuant to which such assignee agrees
to be bound by the provisions of this Agreement. From and after
the occurrence of any Default or Event of Default, and for so
long as the same shall be continuing, the Guarantor agrees that
it will not exchange, forgive, waive or cancel the Subordinated
Obligations or any part thereof or reduce the amount of the
Subordinated Obligations in whole or in part.
(d) Without limiting the effect of any of the other
provisions hereof, during the continuance of any Default or
Event of Default with respect to any Senior Obligation or any
default in the payment of any Senior Obligation, no payment
shall be made with respect to the Subordinated Obligations.
Section 3.04. Continuing Subordination, etc. The
subordination effected by this Agreement is a continuing
subordination, and the Guarantor hereby agrees that at any time
and from time to time, without prior notice to it:
(a) the time for the Borrower's performance of or
compliance with any of its obligations contained in the Credit
Agreement or any of the other Facility Documents may be extended
or such performance or compliance may be waived by the
applicable Lenders;
(b) any of the acts permitted under the Credit
Agreement or any of the other Facility Documents may be done;
(c) payment of any of the Senior Obligations or any
portion thereof may be extended; and
(d) any collateral security for the Senior
Obligations may be exchanged, sold, surrendered, released or
otherwise dealt with, in accordance with the terms of any of the
Facility Documents or any other present or future agreement
between the Borrower and the Lenders;
all without impairing or affecting the obligations of the
Guarantor hereunder.
Section 3.05. Waiver of Notice. The Guarantor hereby
unconditionally waives notice of the incurring of the Senior
Obligations or any part thereof in accordance with the terms of
the Facility Documents and reliance by any Lender upon the
subordination of the Subordinated Obligations to the Senior
Obligations.
Section 3.06. Application of Payments. Whenever any
payment or distribution shall be paid or delivered to the Agent
pursuant to the provisions of this Section 3 for application on
the Senior Obligations, such payment or distribution shall be
applied by the Agent to the repayment of the Senior Obligations
in accordance with the priorities set forth in the Credit
Agreement.
Section 3.07. Subrogation. Subject to the prior
indefeasible payment in full in cash of the Senior Obligations,
the Guarantor shall not be subrogated to the rights of the Agent
and the Lenders to receive payments or distributions in cash,
property or securities of the Borrower applicable to the Senior
Obligations until all amounts owing on the Senior Obligations
shall be paid in full, and as between and among the Borrower,
its creditors other than the Agent and the Lenders, and the
Guarantor, no such payment or distribution made to the Agent or
the Lenders by virtue of this Agreement which otherwise would
have been made to the Guarantor shall be deemed to be a payment
by the Borrower on account of the Senior Obligations, it being
understood that the provisions of this Section 3 are intended
solely for the purpose of defining the relative rights of the
Guarantor, the Agent and the Lenders. Nothing herein will
relieve the Borrower of its obligations to the Guarantor with
respect to the Subordinated Obligations.
Section 3.08. Certain Agreements. The Guarantor agrees
that:
(a) all holders of Senior Obligations, in determining
to acquire and retain Senior Obligations, have relied upon the
subordination of the Subordinated Obligations to the Senior
Obligations as provided herein;
(b) promptly upon the written request of the Agent,
the Guarantor shall execute and deliver to the Agent a written
instrument by which the Guarantor affirms and agrees that the
Subordinated Obligations is subordinated and junior in right of
payment to such Senior Obligations on the terms and conditions
provided herein;
(c) promptly upon the written request of the Agent,
the Guarantor shall take such other action as may be reasonably
requested by the Agent to effectuate the subordination provided
herein; and
(d) the Subordinated Obligations shall not at any
time be secured by any Lien or security interest on Property of
the Borrower.
ARTICLE 4. MISCELLANEOUS.
Section 4.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Guarantor, the Agent and the Required
Lenders, or by the Guarantor and the Agent acting with the
consent of the Required Lenders and any provision of this
Agreement may be waived by the Required Lenders or by the Agent
acting with the consent of the Required Lenders; provided that
no amendment, modification or waiver shall, unless by an
instrument signed by the Guarantor and all of the Lenders or by
the Agent acting with the consent of all of the Lenders:
(a) release the Guarantor from the subordination hereunder; or
(b) amend, waive or modify the definitions of Subordinated
Obligations or Senior Obligations.
Section 4.02. Expenses. The Guarantor shall reimburse the
Agent and each Lender for all reasonable out-of-pocket costs,
expenses and charges (including, without limitation, reasonable
fees and charges of external legal counsel for the Agent and
each Lender) in connection with the enforcement or preservation
of any rights or remedies during the existence of an Event of
Default (including, without limitation, in connection with any
restructuring or insolvency or bankruptcy proceeding) under this
Agreement.
Section 4.03. Survival. The obligations of the Guarantor
under Section 4.02 shall survive the repayment of the Loans and
the Letters of Credit and the termination of the Commitments.
Section 4.04. Successors and Assigns. This Agreement
shall be binding upon, and shall inure to the benefit of, the
Guarantor, the Borrower, the Agent, the Lenders and their
respective successors and assigns.
Section 4.05. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in
this Section, and except as otherwise provided in this
Agreement, notices shall be given to the Agent in writing, by
telex, telecopy or other writing or by telephone, confirmed by
telex, telecopy or other writing, and to the Lenders, to the
Borrower and to the Guarantor by ordinary mail, hand delivery,
overnight courier or telecopier addressed to such party at its
address on the signature page of this Agreement. Notices shall
be effective: (a) if given by mail, 72 hours after deposit in
the mails with first class postage prepaid, addressed as
aforesaid; and (b) if given by telecopier, when confirmation of
delivery of the telecopy to the telecopier number as aforesaid
is transmitted; provided that notices to the Agent and the
Lenders shall be effective upon receipt.
Section 4.06. Headings. The headings and captions
hereunder are for convenience only and shall not affect the
interpretation or construction of this Agreement.
Section 4.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 4.08. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing any such
counterpart.
SECTION 4.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
Section 4.10. Subject to the Credit Agreement. Any and
all rights granted to the Agent under this Agreement are to be
held and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the
extent set forth in the Facility Documents, each of the Lenders
shall be a beneficiary of the terms of this Agreement. Any and
all obligations under this Agreement of the parties to this
Agreement, and the rights granted to the Agent under this
Agreement, are created and granted subject to the terms of the
Credit Agreement.
Section 4.11. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Obligation,
any Letter of Credit or any Commitment is outstanding.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
TRIARC COMPANIES, INC.
By:
Name:
Title:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-
3216
MISTIC BRANDS, INC.
By:
Name:
Title:
Address for Notices:
Mistic Brands, Inc.
2525 Palmer Avenue
New Rochelle, NY 10801
Attention: Chief Financial
Officer
Telecopier No.: (914) 637-
0020
With a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: Executive Vice
President and General Counsel
Telecopier No.: (212) 230-
3216
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title:
Address for Notices:
New York Agency
4 Chase Metrotech Center
13th Floor
Brooklyn, NY 11245
Attention: Lucy D'Orazio
Telecopier No.: (718) 242-
6909
with a copy to:
31 Mamaroneck Avenue
White Plains, NY 10601
Attention: Michael D. Anthony
Telecopier No.: (914) 328-
8373