EXHIBIT 2.1
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AGREEMENT AND PLAN
OF
MERGER
by and among
TRIARC COMPANIES, INC.,
ARBY'S ACQUISITION CO.,
ARBY'S RESTAURANT, LLC,
RTM RESTAURANT GROUP, INC.,
and
RUSSELL V. UMPHENOUR, JR.,
DENNIS E. COOPER
and
J. RUSSELL WELCH,
as the RTM Representatives
__________________________
Dated as of May 27, 2005
__________________________
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TABLE OF CONTENTS
PAGE
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ARTICLE I THE MERGERS ...................................................................................3
Section 1.01 The Mergers.....................................................................3
Section 1.02 Closing.........................................................................4
Section 1.03 Effective Times.................................................................4
Section 1.04 Organizational Instruments......................................................5
Section 1.05 Directors.......................................................................5
Section 1.06 Officers........................................................................5
Section 1.07 Certain Governance and Other Matters............................................6
ARTICLE II EFFECT OF THE MERGERS ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES; ESCROW; ADJUSTMENTS.........7
Section 2.01 Calculation of Aggregate Merger Consideration...................................7
Section 2.02 Conversion of Capital Stock in the First Merger.................................8
Section 2.03 Conversion of Capital Stock and Membership Interests in the Second
Merger.........................................................................10
Section 2.04 Exchange of Certificates.......................................................10
Section 2.05 Escrow.........................................................................13
Section 2.06 Treatment of RTMRG Stock Options...............................................15
Section 2.07 Dissenting Shares..............................................................16
Section 2.08 Pre-Closing Adjustments Based on Estimated Net Liabilities.....................16
Section 2.09 Post-Closing Adjustments Based on Closing Net Liabilities......................17
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES........................................20
Section 3.01 Organization and Qualification of Triarc Parties...............................21
Section 3.02 Authorization of Triarc Parties; Enforceability................................21
Section 3.03 Capitalization of Triarc.......................................................21
Section 3.04 Subsidiaries of ARG............................................................22
Section 3.05 Governmental Authorizations....................................................23
Section 3.06 Non-Contravention..............................................................23
Section 3.07 ARG Financial Statements; Internal Controls; Indebtedness......................24
Section 3.08 Absence of Certain Changes or Events...........................................25
Section 3.09 Absence of Undisclosed Liabilities.............................................25
Section 3.10 Compliance with Laws; Permits..................................................26
Section 3.11 Legal Actions..................................................................26
Section 3.12 Contracts......................................................................27
Section 3.13 Tax Matters....................................................................29
Section 3.14 Employee Benefits..............................................................31
Section 3.15 Labor Matters..................................................................33
Section 3.16 Environmental Matters..........................................................34
Section 3.17 Intellectual Property..........................................................34
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Section 3.18 Real Property..................................................................35
Section 3.19 Personal Property..............................................................35
Section 3.20 Sufficiency of Assets..........................................................36
Section 3.21 Insurance......................................................................36
Section 3.22 Inventory......................................................................36
Section 3.23 Accounts Receivable............................................................36
Section 3.24 Suppliers......................................................................36
Section 3.25 ARG Restaurants................................................................37
Section 3.26 Franchisees....................................................................37
Section 3.27 Transactions with Affiliates...................................................38
Section 3.28 Sufficient Funds...............................................................39
Section 3.29 Brokers and Finders............................................................39
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES.........................................39
Section 4.01 Organization and Qualification of Triarc Parties...............................40
Section 4.02 Authorization of Triarc Parties; Enforceability................................40
Section 4.03 Capitalization of Triarc.......................................................40
Section 4.04 Governmental Authorizations....................................................41
Section 4.05 Non-Contravention..............................................................41
Section 4.06 SEC Reports....................................................................42
Section 4.07 Triarc Financial Statements....................................................42
Section 4.08 Absence of Certain Changes or Events...........................................43
Section 4.09 Absence of Undisclosed Liabilities.............................................43
Section 4.10 Legal Actions..................................................................43
Section 4.11 Sufficient Funds...............................................................44
Section 4.12 Brokers and Finders............................................................44
Section 4.13 Certain Tax Matters............................................................44
ARTICLE V REPRESENTATIONS AND WARRANTIES OF RTMRG.......................................................45
Section 5.01 Organization and Qualification of RTMRG........................................45
Section 5.02 Authorization of RTMRG; Enforceability.........................................45
Section 5.03 Capitalization of RTMRG........................................................45
Section 5.04 Subsidiaries of RTMRG..........................................................46
Section 5.05 Governmental Authorizations....................................................47
Section 5.06 Non-Contravention..............................................................47
Section 5.07 Restated Combined RTM Financial Statements; Internal Controls;
Indebtedness...................................................................48
Section 5.08 Absence of Certain Changes or Events...........................................49
Section 5.09 Absence of Undisclosed Liabilities.............................................49
Section 5.10 Compliance with Laws; Permits..................................................50
Section 5.11 Legal Actions..................................................................50
Section 5.12 Contracts......................................................................51
Section 5.13 Tax Matters....................................................................53
Section 5.14 Employee Benefits..............................................................55
Section 5.15 Labor Matters..................................................................58
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Section 5.16 Environmental Matters..........................................................58
Section 5.17 Intellectual Property..........................................................58
Section 5.18 Real Property..................................................................59
Section 5.19 Personal Property..............................................................60
Section 5.20 Sufficiency of Assets..........................................................60
Section 5.21 Insurance......................................................................60
Section 5.22 Inventory......................................................................61
Section 5.23 Accounts Receivable............................................................61
Section 5.24 Suppliers......................................................................61
Section 5.25 RTMRG Restaurants..............................................................61
Section 5.26 Transactions with Affiliates...................................................62
Section 5.27 Brokers and Finders............................................................62
ARTICLE VI INTERIM OPERATIONS COVENANTS.................................................................63
Section 6.01 Conduct of Business of Triarc and its Subsidiaries.............................63
Section 6.02 Conduct of Business of RTMRG and its Subsidiaries..............................64
Section 6.03 Conduct of Business of Merger Sub Corp. and Merger Sub LLC.....................67
Section 6.04 Control of Business Pending Closing............................................67
ARTICLE VII ADDITIONAL COVENANTS........................................................................67
Section 7.01 Access to Information; Confidentiality.........................................67
Section 7.02 Commercially Reasonable Efforts................................................68
Section 7.03 Notices of Certain Events......................................................68
Section 7.04 Consents; Filings..............................................................69
Section 7.05 Shelf Registration Statement...................................................70
Section 7.06 Actions With Respect to RTMRG Shareholders.....................................70
Section 7.07 Actions With Respect to Debt Financing and Debt Refinancings...................71
Section 7.08 No Solicitation................................................................72
Section 7.09 Takeover Statutes..............................................................72
Section 7.10 Defense of Litigation..........................................................72
Section 7.11 Employees and Employee Benefits, Etc...........................................73
Section 7.12 Directors' and Officers' Indemnification and Insurance.........................74
Section 7.13 Public Announcements...........................................................75
Section 7.14 Sarbanes-Oxley Compliance......................................................75
Section 7.15 RTM Insurance Matters..........................................................76
Section 7.16 Certain Loan Repayments........................................................77
Section 7.17 Co-Branded Restaurants.........................................................78
Section 7.18 RTM Trademarks.................................................................78
Section 7.19 Charitable Commitments.........................................................78
Section 7.20 Actions With Respect to the Trigger Event......................................78
Section 7.21 Delivery of 2005 RTM Audited Financials........................................79
Section 7.22 Excluded Asset Disposition Proceeds............................................79
Section 7.23 Amendment of RTMRG Rollover Options............................................79
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ARTICLE VIII TAX MATTERS ...............................................................................79
Section 8.01 Tax Indemnification............................................................79
Section 8.02 Tax Indemnification Procedures.................................................81
Section 8.03 RTM Tax Audits and Contests; Cooperation.......................................83
Section 8.04 Preparation of Tax Returns and Payment of Taxes................................84
Section 8.05 Straddle Periods...............................................................86
Section 8.06 Refunds........................................................................86
Section 8.07 Conveyance Taxes...............................................................87
Section 8.08 Termination of Tax Sharing Agreements..........................................87
Section 8.09 Carrybacks.....................................................................87
Section 8.10 Tax Treatment..................................................................87
Section 8.11 RTMRG "Excess Loss Accounts"...................................................87
Section 8.12 Triarc Tax Sharing Agreement...................................................88
Section 8.13 RTMAC Management Agreement.....................................................88
ARTICLE IX CONDITIONS TO CLOSING........................................................................88
Section 9.01 Conditions to Each Party's Obligation to Effect the Mergers....................88
Section 9.02 Conditions to Obligations of the Triarc Parties to Effect the Mergers..........89
Section 9.03 Conditions to Obligation of RTMRG to Effect the Mergers........................91
Section 9.04 Frustration of Closing Conditions..............................................93
Section 9.05 Tax Treatment..................................................................93
Section 9.06 RTMMC and RTMAC Purchase.......................................................94
ARTICLE X TERMINATION, AMENDMENT AND WAIVER.............................................................94
Section 10.01 Grounds for Termination........................................................94
Section 10.02 Effect of Termination..........................................................94
Section 10.03 Amendment......................................................................95
Section 10.04 Extension; Waiver..............................................................95
ARTICLE XI SURVIVAL; INDEMNIFICATION....................................................................95
Section 11.01 Survival.......................................................................95
Section 11.02 Obligation of Triarc to Indemnify..............................................96
Section 11.03 Matters Pertaining to Indemnification by Triarc................................97
Section 11.04 Obligation of RTMRG Shareholders to Indemnify..................................99
Section 11.05 Matters Pertaining to Indemnification by the RTMRG Shareholders...............100
Section 11.06 Procedure for Indemnification.................................................103
Section 11.07 Sole and Exclusive Remedy.....................................................105
Section 11.08 Miscellaneous.................................................................105
ARTICLE XII MISCELLANEOUS..............................................................................105
Section 12.01 Definitions...................................................................105
Section 12.02 Interpretation................................................................127
Section 12.03 Fees, Costs and Expenses......................................................127
Section 12.04 Notices.......................................................................128
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Section 12.05 Governing Law.................................................................130
Section 12.06 Jurisdiction..................................................................130
Section 12.07 WAIVER OF JURY TRIAL..........................................................130
Section 12.08 Exhibits and Disclosure Letters...............................................130
Section 12.09 No Third-Party Beneficiaries..................................................131
Section 12.10 Severability..................................................................131
Section 12.11 Rules of Construction.........................................................131
Section 12.12 Assignment....................................................................131
Section 12.13 Remedies......................................................................131
Section 12.14 Specific Performance..........................................................131
Section 12.15 Counterparts..................................................................131
Section 12.16 Entire Agreement..............................................................132
Section 12.17 RTM Representatives...........................................................132
Section 12.18 Neutral Treatment for Pre-Approved Matter.....................................135
ANNEXES
Annex A - Certificate of Designation
Annex B - Form of Escrow Agreement
Annex C - Form of Registration Rights Agreement
Annex D - Terms of Management Services Agreement
Annex E - Form of Corporate Services Agreement
Annex F - List of Unaccredited RTMRG Shareholders
Annex G - List of Accredited RTMRG Shareholders
Annex H - Form of Press Release
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of May 27,
2005, by and among Triarc Companies, Inc., a Delaware corporation ("TRIARC");
Arby's Acquisition Co., a Georgia corporation and a direct wholly owned
subsidiary of Triarc ("MERGER SUB CORP."); Arby's Restaurant, LLC, a Delaware
limited liability company and a direct wholly owned subsidiary of Triarc
("MERGER SUB LLC" and, together with Triarc and Merger Sub Corp., the "TRIARC
PARTIES"); RTM Restaurant Group, Inc., a Georgia corporation ("RTMRG"); and
Russell V. Umphenour, Jr., Dennis E. Cooper and J. Russell Welch, as the RTM
Representatives (as defined below). Capitalized terms used in this Agreement
without definition shall have the meanings ascribed to them in Article XII.
W I T N E S S E T H:
WHEREAS, the respective boards of directors (or comparable governing
body) of each of the Triarc Parties and RTMRG have each approved and adopted
this Agreement and the Ancillary Agreements (as defined below) to which it is a
party and the transactions contemplated by this Agreement and such Ancillary
Agreements, in each case after making a determination that this Agreement and
such transactions are advisable and fair to, and in the best interests of, such
company and its shareholders (or members);
WHEREAS, certain shareholders of RTMRG, including the RTMRG Principal
Shareholders (as defined below), who collectively beneficially own at least 98%
of the outstanding shares of RTMRG Common Stock (as defined below), have duly
executed and delivered a written consent of such shareholders approving this
Agreement and the First Merger (as defined below) (the "RTMRG WRITTEN CONSENT");
WHEREAS, if the Triarc B-2 Election (as defined below) shall have been
duly made, then immediately prior to the Closing (as defined below), pursuant to
the transactions contemplated by this Agreement and on the terms and subject to
the conditions set forth herein, INTER ALIA, Triarc will, in accordance with the
Delaware General Corporation Law, as amended (the "DGCL"), create a new series
of Class B Common Stock, par value $0.10 per share, of Triarc (the "TRIARC CLASS
B COMMON STOCK") designated as Class B Common Stock, Series 2, par value $0.10
per share (the "TRIARC CLASS B-2 COMMON STOCK"), having such rights, preferences
and privileges substantially as set forth in the Certificate of Designation in
the form attached hereto as ANNEX A (the "CERTIFICATE OF DESIGNATION");
WHEREAS, pursuant to the transactions contemplated by this Agreement
and on the terms and subject to the conditions set forth herein, INTER ALIA, at
the First Effective Time (as defined below), Merger Sub Corp. will, in
accordance with the Georgia Business Corporation Code, as amended (the "GBCC"),
merge with and into RTMRG, with RTMRG as the surviving corporation (the "FIRST
MERGER"), and all of the outstanding shares of common stock, no par value per
share, of RTMRG (the "RTMRG COMMON Stock") will be converted into the right to
receive either (a) cash only or (b) a combination of cash and shares of either
(i) Class B Common Stock, Series 1, par value
$0.10 per share, of Triarc (the "TRIARC CLASS B-1 COMMON STOCK"), if the Triarc
B-1 Election shall have been made, or (ii) Triarc Class B-2 Common Stock, if the
Triarc B-2 Election shall have been made;
WHEREAS, immediately after the First Effective Time and at the Second
Effective Time (as defined below), RTMRG will, in accordance with the GBCC and
the Delaware Limited Liability Company Act, as amended (the "DLLCA"), merge with
and into Merger Sub LLC, with Merger Sub LLC as the surviving entity (the
"SECOND MERGER" and, together with the First Merger, the "MERGERS") and
immediately after the Second Effective Time, Triarc will contribute all of the
outstanding membership interests in the surviving entity in the Second Merger
directly or indirectly to Triarc Restaurant Holdings, LLC, which will directly
or indirectly contribute all of the outstanding membership interests in the
surviving entity in the Second Merger to Arby's Restaurant Group, Inc., a
Delaware corporation and an indirect wholly owned subsidiary of Triarc ("ARG")
(such contributions, the "TRIARC CONTRIBUTIONS");
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Mergers will be treated as a single integrated transaction that is characterized
as a merger of RTMRG into Triarc in a transaction that is a "reorganization"
within the meaning of section 368(a)(1)(A) of the Code and that the Triarc
Contributions will be treated as transactions described in section 351 of the
Code (the "EXPECTED TAX TREATMENT");
WHEREAS, certain principal shareholders of RTMRG (the "RTMRG PRINCIPAL
SHAREHOLDERS"), who collectively beneficially own approximately 87.1% of the
outstanding shares of RTMRG Common Stock, have entered into a Transaction
Support Agreement for the benefit of Triarc (the "TRANSACTION SUPPORT
AGREEMENT"), pursuant to which the RTMRG Principal Shareholders have agreed,
INTER ALIA, on the terms and subject to the conditions set forth in the
Transaction Support Agreement, (a) to seek to obtain the waiver from each
shareholder of RTMRG of dissenters rights in respect of the First Merger and (b)
to the indemnification obligations of the RTMRG Principal Shareholders set forth
in this Agreement and the restrictive covenants set forth therein;
WHEREAS, Triarc, ARG, each of the members of RTM Acquisition Company,
L.L.C., a Georgia limited liability company ("RTMAC"), and Russell V. Umphenour,
Jr., Dennis E. Cooper and J. Russell Welch,, as the RTM Representatives, have
entered into a Membership Interest Purchase Agreement, dated as of the date
hereof (the "RTMAC PURCHASE AGREEMENT"), pursuant to which, INTER ALIA,
simultaneously with the Closing, Triarc or its assignee(s) will purchase, on the
terms and subject to the conditions set forth therein, all of the outstanding
membership interests owned by each such member (the "RTMAC PURCHASE"), for an
amount in cash equal to the Aggregate Purchase Price (as defined therein) (as
used herein, the "RTMAC AGGREGATE PURCHASE PRICE");
WHEREAS, Triarc, ARG, RTMMC Acquisition, LLC, a Delaware limited
liability company and a direct wholly-owned subsidiary of Triarc ("RTMMC
ACQUISITION SUB"), RTM Management Company, L.L.C., a Georgia limited liability
company ("RTMMC"), each of the members of RTMMC and Russell V. Umphenour, Jr.,
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Dennis E. Cooper and J. Russell Welch, as the RTM Representatives, have entered
into an Asset Purchase Agreement, dated as of the date hereof (the "RTMMC
PURCHASE AGREEMENT"), pursuant to which, INTER ALIA, simultaneously with the
Closing, RTMMC Acquisition Sub will acquire from RTMMC, on the terms and subject
to the conditions set forth therein, the Purchased Assets (as defined therein)
and the Assumed Liabilities (as defined therein) (the "RTMMC PURCHASE" and,
together with the Mergers and the RTMAC Purchase, the "RTM TRANSACTIONS") for an
amount in cash equal to the cash portion of the Aggregate Purchase Price (as
defined therein) (as used herein, the "RTMMC AGGREGATE PURCHASE PRICE"); and
WHEREAS, simultaneously with, and as a condition to the obligation of
the parties hereto to effect, the Mergers, (a) Triarc, each of the RTMRG
Principal Shareholders, each of the members of RTMAC as of immediately prior to
the Closing, RTMMC, each of the members of RTMMC as of immediately prior to the
Closing, the RTM Representatives and the Escrow Agent (as defined below) will
enter into an Escrow Agreement in the form attached hereto as ANNEX B with such
changes as may be requested by the Escrow Agent (the "ESCROW AGREEMENT"), (b)
Triarc and the RTMRG Shareholders who receive a portion of the Aggregate Share
Consideration (as defined below) will enter into a Registration Rights Agreement
substantially in the form attached hereto as ANNEX C (the "REGISTRATION RIGHTS
AGREEMENT"), (c) ARG and one or more of the Mrs. Winners Obligors (as defined
below) will enter into a Management Services Agreement on substantially the same
terms as set forth in ANNEX D (the "MANAGEMENT SERVICES AGREEMENT") and (d) ARG
and Triarc will enter into a Corporate Services Agreement substantially in the
form attached hereto as ANNEX E (the "CORPORATE SERVICES AGREEMENT").
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGERS
Section 1.01 THE MERGERS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the GBCC, at the First Effective Time, (i)
Merger Sub Corp. shall be merged with and into RTMRG, (ii) the separate
existence of Merger Sub Corp. shall cease and RTMRG shall continue its existence
as a corporation under Georgia Law as the surviving corporation in the First
Merger (the "SURVIVING CORPORATION") and (iii) the Surviving Corporation shall
become an indirect wholly owned Subsidiary of Triarc. The First Merger shall
have the effects set forth in Section 14-2-1106 of the GBCC and in this
Agreement.
(b) Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the GBCC and the DLLCA, immediately after the
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First Effective Time and at the Second Effective Time, (i) the Surviving
Corporation shall be merged with and into Merger Sub LLC, (ii) the separate
existence of the Surviving Corporation shall cease and Merger Sub LLC shall
continue its existence as a limited liability company under Delaware Law as the
surviving entity in the Second Merger (the "SURVIVING LLC") and (iii) the
Surviving LLC shall remain an indirect wholly owned Subsidiary of Triarc. The
Second Merger shall have the effects set forth in Section 14-2-1106 of the GBCC,
Section 18-209 of the DLLCA and in this Agreement.
(c) Upon the terms and subject to the conditions set forth in this
Agreement, immediately after the Second Effective Time, Triarc shall make the
Triarc Contributions.
Section 1.02 CLOSING. Subject to the satisfaction or waiver of all of
the conditions to closing contained in Article IX, the closing of the Mergers
(the "CLOSING") shall take place (a) at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, at
10:00 a.m. on the third Business Day after the day on which the last of those
conditions (other than any conditions, including the consummation of the RTMAC
Purchase and the RTMMC Purchase, that by their nature are to be satisfied at the
Closing) is satisfied or waived in accordance with this Agreement or (b) at such
other place and time or on such other date as Triarc and the RTM Representatives
may agree in writing. The date on which the Closing occurs is referred to as the
"CLOSING DATE."
Section 1.03 EFFECTIVE TIMES.
(a) At the Closing, Triarc, Merger Sub Corp. and RTMRG shall cause a
certificate of merger in respect of the First Merger (the "FIRST CERTIFICATE OF
MERGER") to be executed, signed, acknowledged and filed with the Secretary of
State of the State of Georgia as provided in Section 14-2-1105 of the GBCC. The
First Merger shall become effective when the First Certificate of Merger has
been duly filed with the Secretary of State of the State of Georgia or at such
other subsequent date or time as Triarc, Merger Sub Corp. and RTMRG may agree
and specify in the First Certificate of Merger in accordance with the GBCC (the
"FIRST EFFECTIVE TIME").
(b) At the Closing and after the First Effective Time, Triarc,
Merger Sub LLC and the Surviving Corporation shall cause a certificate of merger
in respect of the Second Merger (the "SECOND CERTIFICATE OF MERGER") to be
executed, signed, acknowledged and filed with the Secretary of State of the
State of Georgia as provided in Section 14-2-1105 of the GBCC and the Secretary
of State of the State of Delaware as provided in Section 18-209(c) of the DLLCA.
The Second Merger shall become effective when the Second Certificate of Merger
has been duly filed with the Secretaries of State of the States of Georgia and
Delaware or at such other subsequent date or time as Triarc, Merger Sub LLC and
the Surviving Corporation may agree and specify in the Second Certificate of
Merger in accordance with the GBCC and the DLLCA (the "SECOND EFFECTIVE TIME").
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Section 1.04 ORGANIZATIONAL INSTRUMENTS.
(a) If the Triarc B-2 Election shall have been duly made, Triarc's
board of directors shall adopt the Certificate of Designation and Triarc shall
cause the Certificate of Designation to be filed with the Secretary of State of
the State of Delaware and to be effective as of immediately prior to the First
Effective Time.
(b) The articles of incorporation of Merger Sub Corp. in effect
immediately prior to the First Effective Time shall be, from and after the First
Effective Time, the articles of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by the GBCC. The bylaws of
Merger Sub Corp. in effect immediately prior to the First Effective Time shall
be, from and after the First Effective Time, the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein, by the
articles of incorporation of the Surviving Corporation or by the GBCC.
(c) The certificate of formation of Merger Sub LLC in effect
immediately prior to the Second Effective Time shall be, from and after the
Second Effective Time, the certificate of formation of the Surviving LLC until
thereafter changed or amended as provided therein or by the DLLCA. The limited
liability company agreement of Merger Sub LLC in effect immediately prior to the
Second Effective Time shall be, from and after the Second Effective Time, the
limited liability company agreement of the Surviving LLC until thereafter
changed or amended as provided therein or by the DLLCA.
Section 1.05 DIRECTORS.
(a) Triarc shall take all requisite action so that the directors of
Merger Sub Corp. immediately prior to the First Effective Time shall be, from
and after the Effective Time, the directors of the Surviving Corporation until
their successors are duly elected and qualified or until their earlier death,
resignation or removal in accordance with the articles of incorporation and
bylaws of the Surviving Corporation and the GBCC.
(b) Triarc shall take all requisite action so that the directors
(or managers) of Merger Sub LLC immediately prior to the Second Effective Time
shall be, from and after the Second Effective Time, the directors (or managers)
of the Surviving LLC until their successors are duly elected and qualified or
until their earlier death, resignation or removal in accordance with the limited
liability company agreement of the Surviving Entity and the DLLCA.
Section 1.06 OFFICERS.
(a) Triarc shall take all requisite action so that the officers of
Merger Sub Corp. immediately prior to the First Effective Time shall be, from
and after the First Effective Time, the officers of the Surviving Corporation
until their successors are duly elected and qualified or until their earlier
death, resignation or removal in accordance
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with the articles of incorporation and the bylaws of the Surviving Corporation
and the GBCC.
(b) Triarc shall take all requisite action so that the officers of
Merger Sub LLC immediately prior to the Second Effective Time shall be, from and
after the Second Effective Time, the officers of the Surviving LLC until their
successors are duly elected and qualified or until their earlier death,
resignation or removal in accordance with the limited liability company
agreement of the Surviving LLC and the DLLCA.
Section 1.07 CERTAIN GOVERNANCE AND OTHER MATTERS.
(a) If (x) the Triarc B-1 Election shall have been duly made or (y)
the Triarc B-2 Election shall have been duly made and the shares of Triarc B-2
Common Stock issued pursuant to the Triarc B-2 Election are converted into
shares of Triarc Class B-1 Common Stock on January 3, 2006 because the Trigger
Event shall not have occurred or prior to January 3, 2006 or because an Adverse
Board Determination shall have been made:
(i) The board of directors of Triarc promptly following the
Closing or such conversion, as applicable, shall, subject to compliance with its
fiduciary duties and applicable Law, take such actions as are necessary and
appropriate to cause the number of directors then comprising Triarc's board of
directors to be increased by one and to elect to fill such vacancy Russell V.
Umphenour Jr., until his successor is duly elected and qualified or until his
earlier death, resignation or removal in accordance with the certificate of
incorporation of Triarc (as amended as of the date hereof, the "TRIARC
CERTIFICATE OF INCORPORATION"), the bylaws of Triarc (as amended as of the date
hereof, the "TRIARC BYLAWS"), and the DGCL.
(ii) If Russell V. Umphenour, Jr. dies or becomes disabled
while serving on the board of directors of Triarc and the number of shares of
Triarc Class B-1 Common Stock that the RTMRG Shareholders in the aggregate
beneficially own (excluding, for this purpose, any unexercised options, warrants
or rights to purchase, and securities that are convertible into, or exchangeable
for, shares of Triarc Class B-1 Common Stock held by the RTMRG Shareholders), as
a percentage of the total number of shares of Triarc Class A Common Stock, and
Triarc Class B-1 Common Stock, issued and outstanding at such time is at least
ten percent, then the RTM Representatives shall have the right to designate,
subject to the Triarc board of directors' fiduciary duties and compliance with
Laws, another individual acceptable to Triarc to replace Russell V. Umphenour,
Jr. as a director of Triarc until such individual's successor is duly elected
and qualified or until such individual's earlier death, resignation or removal
in accordance with the Triarc Certificate of Incorporation, the Triarc Bylaws
and the DGCL.
(b) If the Triarc B-2 Election shall have been duly made and the
Trigger Event shall have occurred:
(i) The board of directors of Triarc promptly following
such Trigger Event shall, subject to compliance with its fiduciary duties and
applicable Law,
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take such actions as are necessary and appropriate to cause the number of
directors then comprising Triarc's board of directors to be increased by two and
to elect to fill such vacancies with Russell V. Umphenour, Jr. and one member
designated by the RTM Representatives who is acceptable to Triarc (the
"DESIGNATED RTMRG DIRECTOR"), until their successors are duly elected and
qualified or until their earlier death, resignation or removal in accordance
with the Triarc Certificate of Incorporation, the Triarc Bylaws and the DGCL.
(ii) If the number of shares of Triarc Class B-1 Common Stock
that the RTMRG Shareholders in the aggregate beneficially own (excluding, for
this purpose, any unexercised options, warrants or rights to purchase, and
securities that are convertible into, or exchangeable for, shares of Triarc
Class B-1 Common Stock held by the RTMRG Shareholders), as a percentage of the
total number of shares of Triarc Class A Common Stock, and Triarc Class B-1
Common Stock, issued and outstanding at such time is less than ten percent, then
the Designated RTMRG Director promptly shall resign from the board of directors
of Triarc.
(c) Upon the written request of Triarc, the RTM Representatives
promptly shall certify in writing to Triarc the aggregate number of shares of
Triarc Common Stock beneficially owned by the RTMRG Shareholders at such time
(calculated in accordance with Section 1.07(a)(ii) or Section 1.07(b)(ii)), as
the case may be, and Triarc shall be entitled fully to rely thereon in complying
with Section 1.07(a)(ii) or Section 1.07(b)(ii), as the case may be.
(d) Triarc shall enter into separate indemnification agreements with
each of the directors designated by the RTM Representatives substantially in the
form, if any, as are then in effect between Triarc and the other members of its
board of directors.
(e) The headquarters for ARG and its Subsidiaries shall be located
immediately following the Closing in the Atlanta, Georgia metropolitan area.
ARTICLE II
EFFECT OF THE MERGERS ON CAPITAL STOCK; EXCHANGE OF
CERTIFICATES; ESCROW; ADJUSTMENTS
Section 2.01 CALCULATION OF AGGREGATE MERGER CONSIDERATION. As used
herein,
(a) "AGGREGATE MERGER CONSIDERATION" means:
(i) cash in amount equal to $175 million, subject to
adjustment as provided in Section 2.08 and Section 2.09 (as adjusted, the
"AGGREGATE CASH CONSIDERATION"); and
(ii) at the election of the RTM Representatives by written
notice thereof to Triarc not less than five Business Days prior to the Closing
Date (which election shall be irrevocable), either:
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(A) 10,000,000 validly issued, fully-paid and
non-assessable shares of Triarc Class B-1 Common Stock (the "TRIARC B-1
ELECTION"), as adjusted for any stock splits, combinations or
reclassifications after the date hereof and prior to the Closing; or
(B) 10,000,000 validly issued, fully paid and
non-assessable shares of Triarc Class B-2 Common Stock (the "TRIARC B-2
ELECTION"), as adjusted for any stock splits, combinations or
reclassifications after the date hereof and prior to the Closing;
PROVIDED, HOWEVER, that if the Triarc B-2 Election shall not have been duly and
timely made in accordance with this Section 2.01, then the Triarc B-1 Election
shall be deemed to have been made (in either case, such shares as so elected,
the "AGGREGATE SHARE CONSIDERATION"); and
(b) "ADJUSTED AGGREGATE MERGER CONSIDERATION VALUE" means the sum of
(i) the amount of the Aggregate Cash Consideration (determined for purposes of
Closing and calculating the applicable Per Share Merger Consideration in
accordance with Section 2.02(c) without reference to any adjustment pursuant to
Section 2.09) PLUS (ii) the product of (A) the total number of shares included
in the Aggregate Share Consideration MULTIPLIED BY (B) the Current Market Price.
Section 2.02 CONVERSION OF CAPITAL STOCK IN THE FIRST MERGER. At the
First Effective Time, by virtue of the First Merger and without any action on
the part of Triarc, Merger Sub Corp., RTMRG or the holder of any shares of
capital stock of Merger Sub Corp. or RTMRG:
(a) CONVERSION OF MERGER SUB CORP. CAPITAL STOCK. Each share of
common stock, par value $1.00 per share, of Merger Sub Corp. issued and
outstanding immediately prior to the First Effective Time shall be converted
into and become one fully paid and non-assessable share of common stock, par
value $1.00 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK. Each share of RTMRG Common
Stock owned by RTMRG or any of its wholly owned Subsidiaries immediately prior
to the First Effective Time (collectively, the "EXCLUDED SHARES") shall be
canceled automatically and shall cease to exist, and no consideration shall be
paid in exchange for those Excluded Shares.
(c) CONVERSION OF RTMRG COMMON STOCK.
(i) Subject to adjustment as provided in Section 2.02(c)(iv)
below, each share of RTMRG Common Stock issued and outstanding immediately prior
to the First Effective Time held by each RTMRG Shareholder listed in ANNEX F
hereto, other than Dissenting Shares, shall be converted into the right to
receive, subject to Section 2.05, an amount of cash, without interest, equal to
the quotient obtained by dividing (x) the sum of the Adjusted Aggregate Merger
Consideration Value by (y) the
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sum of the total number of shares of RTMRG Common Stock issued and outstanding
immediately prior to the First Effective Time, other than Excluded Shares (the
"UNACCREDITED INVESTOR PER SHARE MERGER CONSIDERATION").
(ii) Subject to adjustment as provided in Section 2.02(c)(iv)
below, each share of RTMRG Common Stock issued and outstanding immediately prior
to the First Effective Time held by each RTMRG Shareholder listed in ANNEX G
hereto (each such shareholder having certified in writing on the date hereof to
Triarc as to his, her or its status as an "accredited investor," as such term is
defined in Rule 501(a) under the Securities Act), other than Dissenting Shares,
shall be converted into the right to receive, subject to Section 2.05, the
following (the "ACCREDITED INVESTOR PER SHARE MERGER CONSIDERATION," and
together with the Unaccredited Investor Per Share Merger Consideration, the "PER
SHARE MERGER CONSIDERATION"):
(A) an amount of cash, without interest, equal to
the quotient obtained by dividing (x) the difference between Aggregate
Cash Consideration (determined for purposes of Closing and calculating
the applicable Per Share Merger Consideration in accordance with
Section 2.02(c) without reference to any adjustment pursuant to Section
2.09) and the aggregate amount to be paid as Unaccredited Investor Per
Share Merger Consideration pursuant to Section 2.02(c)(i) by (y) the
total number of shares of RTMRG Common Stock issued and outstanding
immediately prior to the First Effective Time held by the RTMRG
Shareholders listed on ANNEX G hereto (the "ACCREDITED INVESTOR PER
SHARE CASH CONSIDERATION"); and
(B) a number of validly issued, fully paid and
non-assessable shares of Triarc Class B-1 Common Stock or Triarc Class
B-2 Common Stock, as applicable, equal to the quotient obtained by
dividing (x) the difference between (I) the Unaccredited Investor Per
Share Merger Consideration and (II) the Accredited Investor Per Share
Cash Consideration, by (y) the Current Market Price, subject to the
payment of cash in lieu of fractional shares as provided in Section
2.04(e).
(iii) All shares of RTMRG Common Stock that have been
converted into the right to receive the Per Share Merger Consideration as
provided in this Section 2.02(c) shall be canceled automatically and shall cease
to exist, and the holders of certificates which immediately prior to the First
Effective Time represented those shares ("RTMRG CERTIFICATES") shall cease to
have any rights with respect to those shares, other than the right to receive
the Per Share Merger Consideration upon surrender of RTMRG Certificates in
accordance with Section 2.04(b).
(iv) The Per Share Merger Consideration shall be reduced to
give effect to the in the money value at the time of grant of the Replacement
Options granted pursuant to Section 2.06.
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Section 2.03 CONVERSION OF CAPITAL STOCK AND MEMBERSHIP INTERESTS IN
THE SECOND MERGER. At the Second Effective Time, by virtue of the Second Merger
and without any action on the part of Triarc, Merger Sub LLC, the Surviving
Corporation or the holder of any shares of membership interests or capital stock
of Merger Sub LLC or the Surviving Corporation:
(a) CONVERSION OF MERGER SUB LLC MEMBERSHIP INTERESTS. The
membership interests of Merger Sub LLC issued and outstanding immediately prior
to the Second Effective Time shall be converted into and become fully paid and
non-assessable membership interests of the Surviving LLC.
(b) CANCELLATION OF CAPITAL STOCK OF SURVIVING CORPORATION. Each
share of common stock, par value $1.00 per share, of the Surviving Corporation
issued and outstanding immediately prior to the Second Effective Time shall be
canceled automatically and shall cease to exist, and no consideration shall be
paid in exchange for such shares.
Section 2.04 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Subject to the provisions of Section 2.05 and
Section 2.07, promptly following the First Effective Time, Triarc shall deposit
with Triarc's transfer agent for its shares of Triarc Class A Common Stock and
Triarc Class B-1 Common Stock, or with such other bank or trust company
designated by Triarc prior to the First Effective Time and reasonably acceptable
to the RTM Representatives (the "EXCHANGE AGENT"), for the benefit of the
holders of RTMRG Certificates and for exchange in accordance with this Article
II, (i) immediately available funds in amounts necessary to make the payments
pursuant to Section 2.02(c), (ii) certificates representing the portion of the
Aggregate Share Consideration issuable pursuant to Section 2.02(c)(ii)(B) and
(iii) the notes, marked "cancelled and paid in full," formerly evidencing in the
aggregate the RTMRG Shareholders Obligations Amounts for all RTMRG Shareholders
other than the RTMRG Shareholders listed in Section 9.02(i) of the RTMRG
Disclosure Letter (the "CANCELLED RTMRG SHAREHOLDER NOTES") (such funds and
certificates, together with any dividends or distributions with respect thereto
to which the holders of such certificates may be entitled pursuant to Section
2.04(c), being hereinafter referred to as the "EXCHANGE FUND") in exchange for
RTMRG Certificates.
(b) EXCHANGE PROCEDURES.
(i) LETTER OF TRANSMITTAL. Promptly after the First
Effective Time, Triarc shall cause the Exchange Agent to mail to each holder of
record of an RTMRG Certificate (A) a letter of transmittal in customary form,
specifying that delivery shall be effected, and risk of loss and title to the
RTMRG Certificates shall pass, only upon proper delivery of RTMRG Certificates
to the Exchange Agent; (B) a certificate in customary form stating that such
RTMRG Shareholder is not a "foreign person" within the meaning of Section 1445
of the Code (the "FIRPTA CERTIFICATE"); (C) instructions for surrendering RTMRG
Certificates; and (D) the stock transfer powers required by the Escrow Agent
pursuant to Section 2.05(a).
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(ii) SURRENDER OF RTMRG CERTIFICATES. Upon surrender of an
RTMRG Certificate for cancellation to the Exchange Agent, together with a duly
executed letter of transmittal and any other documents required by the Exchange
Agent, the holder of that RTMRG Certificate shall be entitled to receive in
exchange therefor the Per Share Merger Consideration payable in respect of that
RTMRG Certificate (less any withholding of Taxes as provided in Section 2.04(f))
and, if applicable, such holder's Cancelled RTMRG Shareholder Notes. Any RTMRG
Certificates so surrendered shall be canceled immediately. No interest shall
accrue or be paid on any amount payable upon surrender of RTMRG Certificates.
(iii) UNREGISTERED TRANSFEREES. If any Per Share Merger
Consideration is to be issued or paid to a Person other than the Person in whose
name the surrendered RTMRG Certificate is registered, then the Per Share Merger
Consideration may be issued or paid to such a transferee so long as (A) the
surrendered RTMRG Certificate is accompanied by all documents required to
evidence and effect that transfer and (B) the Person requesting such exchange
(1) pays any applicable transfer Taxes or (2) establishes to the satisfaction of
Triarc and the Exchange Agent that any such Taxes have already been paid or are
not applicable.
(iv) NO OTHER RIGHTS. Until surrendered in accordance with
this Section 2.04(b), each RTMRG Certificate shall be deemed, from and after the
First Effective Time, to represent only the right to receive the applicable Per
Share Merger Consideration. The Per Share Merger Consideration issued or paid
upon the surrender of any RTMRG Certificate shall be deemed to have been issued
or paid in full satisfaction of all rights pertaining to that RTMRG Certificate
and the shares of RTMRG Common Stock formerly represented by it.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends
or other distributions payable with respect to shares included in the Aggregate
Share Consideration that have a record date after the Effective Time shall be
paid to a holder of an unsurrendered RTMRG Certificate until that RTMRG
Certificate is properly surrendered in accordance with this Article II. Subject
to applicable Laws, following the proper surrender of any such RTMRG
Certificate, there shall be issued or paid to the holder of the certificate
representing shares included in the Aggregate Share Consideration (each, a
"TRIARC CERTIFICATE") issued in exchange therefor, without interest, (i) at the
time of such surrender, the dividends or other distributions payable with
respect to the shares included in the Aggregate Share Consideration represented
by that Triarc Certificate that have a record date after the First Effective
Time and a payment date on or prior to the date of issuance of that Triarc
Certificate and (ii) at the appropriate payment date, the dividends or other
distributions payable with respect to the shares included in the Aggregate Share
Consideration represented by that Triarc Certificate that have a record date
after the First Effective Time and a payment date after the date of issuance of
that Triarc Certificate.
(d) NO FURTHER TRANSFERS. At the First Effective Time, the transfer
books of RTMRG shall be closed and there shall be no further registration of
transfers of
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the shares of RTMRG Common Stock that were outstanding immediately prior to the
First Effective Time.
(e) FRACTIONAL SHARES. Each holder of RTMRG Certificates who would
otherwise have been entitled to receive a fraction of a share included in the
Aggregate Share Consideration under this Article II (after taking into account
all RTMRG Certificates delivered by such holder) shall receive from the Exchange
Agent, in accordance with the provisions of this Article II, a cash payment in
lieu of such fractional share interest based upon the Current Market Price.
Triarc shall pay to the Exchange Agent simultaneously with the payment made
pursuant to Section 2.04(a) an amount in cash sufficient for the Exchange Agent
to pay each holder of RTMRG Certificates an amount in cash equal to the product
obtained by multiplying (A) the fraction of a share included in the Aggregate
Share Consideration to which such holder would otherwise have been entitled by
(B) the Current Market Price.
(f) REQUIRED WITHHOLDING. Triarc and the Exchange Agent shall be
entitled to deduct and withhold from any Per Share Merger Consideration and with
respect to any RTMRG Rollover Options such amounts as they may be required to
deduct and withhold from such payment under any applicable Laws, and shall
deduct and withhold from any Per Share Merger Consideration payable to an RTMRG
Shareholder an amount equal to the amounts specified under Section 1445 of the
Code (assuming for these purposes the application of Section 1445 of the Code to
the First Merger and the RTMAC Purchase) if such RTMRG Shareholder does not duly
execute and deliver the FIRPTA Certificate, which FIRPTA Certificate shall set
forth all of the information required by, and otherwise be executed in
accordance with, Treasury Regulation ss. 1.1445-2(b)(2), together with the duly
executed and delivered letter of transmittal. If Triarc or the Exchange Agent,
as the case may be, so deducts or withholds any such amounts, such amounts shall
be treated for all purposes as having been paid to the Person in respect of whom
Triarc or the Exchange Agent, as the case may be, made such deduction and
withholding.
(g) RESTRICTIVE LEGEND. The Triarc Certificates, when issued
pursuant to this Agreement and, if the Triarc B-2 Election shall have been made,
when issued upon conversion of the shares of Triarc Class B-2 Common Stock, will
contain the following legend:
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON
CONVERSION OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR SECURITIES REGULATORS OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE, NOR MAY ANY INTEREST THEREIN BE,
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
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THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
BY, SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, IN FORM AND SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest the
cash portion of the Exchange Fund as directed by Triarc. Any interest and other
income resulting from such investment shall become a part of the Exchange Fund,
and any amounts in excess of the amounts payable under Section 2.02(c) shall be
paid promptly to Triarc.
(i) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains unclaimed by the holders of RTMRG Certificates 180 days after the
Effective Time shall be delivered by the Exchange Agent to Triarc upon demand.
Any holder of RTMRG Certificates who has not complied with this Article II shall
look thereafter only to Triarc for payment of the Per Share Merger
Consideration.
(j) NO LIABILITY. None of Triarc, the Surviving Corporation, the
Surviving LLC or the Exchange Agent shall be liable to any holder of RTMRG
Certificates for any Per Share Merger Consideration properly delivered to a
public official under any applicable abandoned property, escheat or similar
Laws. If any RTMRG Certificates have not been surrendered prior to five years
after the First Effective Time (or immediately prior to such earlier date on
which any Per Share Merger Consideration in respect of those RTMRG Certificates
would otherwise escheat to or become the property of any Governmental Entity),
any Per Share Merger Consideration payable in respect of those RTMRG
Certificates shall become the property of Triarc, free and clear of all claims
or interests of any Person previously entitled to that Per Share Merger
Consideration, to the extent permitted by applicable Laws.
(k) LOST, STOLEN OR DESTROYED CERTIFICATES. If any RTMRG Certificate
is lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such RTMRG Certificate to be lost, stolen or destroyed and
the posting by such Person of a bond in the form and amount reasonably required
by Triarc as indemnity against any claim that may be made against Triarc on
account of the alleged loss, theft or destruction, the Exchange Agent shall
issue the Per Share Merger Consideration in exchange for such lost, stolen or
destroyed RTMRG Certificate.
Section 2.05 ESCROW.
(a) There shall be withheld from (x) the shares that would otherwise
be included in the Aggregate Share Consideration issuable pursuant to Section
2.02(c)(ii)(B), a number of shares of Triarc Class B-1 Common Stock (if the
Triarc B-1 Election shall have been made) or Triarc Class B-2 common Stock (if
the Triarc B-2 election shall have been made) that is equal to the quotient
obtained by dividing $18 million by the Current Market Price, and (y) the cash
that would otherwise
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be included in the Per Share Merger Consideration payable to each holder of
RTMRG Common Stock (the "RTMRG SHAREHOLDERS') pursuant to Section 2.02(c)(i) and
Section 2.02(c)(ii)(A), cash in an amount equal to $2 million (such shares and
cash being withheld pursuant to this Section 2.05(a) being hereinafter referred
to as the "RTM ESCROW FUND"). To determine the number of shares and amount of
cash to be withheld from each RTMRG Shareholder:
(i) $20 million will be divided by the number of shares of
RTMRG Common Stock issued and outstanding immediately prior to the First
Effective Time, other than Excluded Shares and Dissenting Shares, to determine
the "ESCROW AMOUNT PER SHARE"; and each RTMRG Shareholder's "INDIVIDUAL ESCROW
AMOUNT" will be determined by multiplying the number of shares of RTMRG Common
Stock owned by such RTMRG Shareholder immediately prior to the First Effective
Time by the Escrow Amount Per Share.
(ii) There shall be withheld from each RTMRG Shareholder
listed in ANNEX G a pro rata portion of the total number of shares of Triarc
Common Stock to be withheld for the RTM Escrow Fund determined based on the
number of such shares to be issued to such RTMRG Shareholder and to all RTMRG
Shareholders listed in ANNEX G.
(iii) There shall be withheld from each RTMRG Shareholder
listed in ANNEX G an amount of cash for the RTM Escrow Fund equal to the
difference determined by subtracting from such RTMRG Shareholder's Individual
Escrow Amount the value of the shares of Triarc Common Stock being withheld from
him or her, valued at the Current Market Price.
(iv) There shall be withheld from each RTMRG Shareholder
listed in ANNEX F a pro rata portion of the amount of cash to be withheld for
the RTM Escrow Fund MINUS the amount of cash withheld pursuant to Section
2.05(a)(iii) determined based on the number of shares of RTMRG Common Stock
owned immediately prior to the First Effective Time by such RTMRG Shareholder
and all RTMRG Shareholders listed on Annex F.
(b) Triarc shall deliver such cash and Triarc Certificates
representing such number of shares included in the RTM Escrow Fund to an
institution reasonably acceptable to Triarc and the RTM Representatives, as
escrow agent (the "ESCROW AGENT"), and the RTMRG Shareholders will deliver to
the Escrow Agent related stock transfer powers executed by the RTMRG
Shareholders. The Escrow Agent shall hold such cash and Triarc Certificates
representing the RTM Escrow Fund as security for (x) the obligations of the
RTMRG Shareholders, the RTMAC Sellers, RTMMC and the RTMMC Members under the
Escrow Agreement. The Triarc Certificates included in the RTM Escrow Fund shall
be represented by stock certificates issued in the names of the applicable RTMRG
Shareholders.
(c) By their approval and adoption of this Agreement and by their
acceptance of the Per Share Merger Consideration, the RTMRG Shareholders will be
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conclusively deemed to have consented to, approved and agreed to be bound by:
(i) the obligations under 2.09 in respect of post Closing adjustments to the
Aggregate Merger Consideration; (ii) the indemnification provisions of Article
VIII and Article XI; (iii) the Escrow Agreement; and (iv) the appointment of
Russell V. Umphenour, Jr., Dennis E. Cooper and J. Russell Welch, as the RTM
Representatives.
(d) There shall also be withheld from the Aggregate Cash
Consideration the amount of $100,000 (the "EXPENSES FUND"), allocated to each
RTRMG Shareholder pro rata based on the number of shares of RTRMG Common Stock
owned immediately prior to the First Effective Time by such RTMRG Shareholder
and the number of such shares so owned by all RTMRG Shareholders. The Expenses
Fund shall be paid over to the RTM Representatives as an advance on expenses
that they may incur in performing their duties as such, and may be held and
applied by them in the manner they consider appropriate. Upon paying the
Expenses Fund over to the RTM Representatives as herein provided, neither Triarc
nor any of its Affiliates shall have any further obligations or any Liability
with respect thereto.
Section 2.06 TREATMENT OF RTMRG STOCK OPTIONS. Except for the RTMRG
Rollover Options, RTMRG shall take all necessary actions to cause each option to
acquire shares of RTMRG Common Stock (each, an "RTMRG OPTION" and collectively,
the "RTMRG OPTIONS") outstanding, whether or not then exercisable or vested,
either to be exercised or terminated and cancelled immediately prior to the
First Effective Time and without any Liability after the First Effective Time to
RTMRG, Triarc or any of their Affiliates, including obtaining all necessary
consents or approvals from holders of RTMRG Options. From and after the First
Effective Time, no holder of an RTMRG Option shall have any rights in respect
thereof. If requested by Triarc, RTMRG will use reasonable efforts to cause each
holder of an RTMRG Option to execute and deliver to Triarc prior to the Closing
a waiver and release form relating to such termination and cancellation in a
form reasonably satisfactory to Triarc. Each RTMRG Rollover Option shall be
terminated and cancelled, in accordance with the terms thereof, at the First
Effective Time and without any Liability after the First Effective Time to
RTMRG, Triarc or any of their Affiliates and an option to acquire such number of
shares of Triarc Class B-1 Common Stock (if the Triarc B-1 Election shall have
been made) or Triarc Class B-2 Common Stock (if the Triarc B-2 Election shall
have been made) shall be granted (each option so granted, individually, a
REPLACEMENT OPTION and, collectively, the "REPLACEMENT OPTIONS") to replace such
terminated RTMRG Rollover Option as is determined in a manner consistent with a
methodology mutually agreed to by Triarc and the RTM Representative and that
complies with the requirements of Section 409A of the Code (and any guidance
issued by the IRS thereunder) and other requirements of applicable Law, with
such exercise prices and other provisions (which, to the extent permitted by
Section 409A of the Code, shall be at least as favorable as the provisions of
the RTMRG Rollover Option being replaced as such provisions are in effect at the
time of such replacement) as are set forth in the respective agreements granting
such Replacement Options to the holders thereof.
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Section 2.07 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary,
any outstanding shares of RTMRG Common Stock for which the holder thereof (i)
has not consented to the First Merger in writing and (ii) has demanded the
appraisal of such shares in accordance with, and has complied in all respects
with, Sections 14-2-1301 to 14-2-1332 of the GBCC (collectively, the "DISSENTING
SHARES") shall not be converted into the right to receive the Per Share Merger
Consideration in accordance with Section 2.02(c). At the First Effective Time,
(x) all Dissenting Shares shall be cancelled and cease to exist and (y) the
holder or holders of Dissenting Shares shall be entitled only to such rights as
may be granted to them under Sections 14-2-1301 to 14-2-1332 of the GBCC.
(b) Notwithstanding the provisions of Section 2.07(a), if any holder
of Dissenting Shares effectively withdraws or loses such appraisal rights
(through failure to perfect such appraisal rights or otherwise), then that
holder's shares (i) shall no longer be deemed to be Dissenting Shares and (ii)
shall be treated as if they had been converted automatically at the First
Effective Time into the right to receive the applicable Per Share Merger
Consideration upon surrender of the RTMRG Certificate representing such shares
in accordance with Section 2.04.
(c) RTMRG shall give Triarc (i) prompt notice of any demands for
appraisal of any outstanding shares of RTMRG Common Stock, the withdrawals of
such demands, and any other instrument served on RTMRG under the provisions of
Sections 14-2-1301 to 14-2-1332 of the GBCC and (ii) the right to participate in
all negotiations and proceedings with respect to demands for appraisal under the
GBCC. RTMRG shall not offer to make or make any payment with respect to any
demands for appraisal without the prior written consent of Triarc.
Section 2.08 PRE-CLOSING ADJUSTMENTS BASED ON ESTIMATED NET
LIABILITIES.
(a) On the tenth (10th) Business Day prior to the anticipated
Closing Date, (i) Triarc shall deliver to the RTM Representatives a certificate
duly executed by the chief financial officer of Triarc setting forth in
reasonable detail the computation of the estimated Net Liabilities of ARG and
its Subsidiaries as of immediately prior to the Closing (the "ARG ESTIMATED NET
LIABILITIES") and (ii) the RTM Representatives shall deliver to Triarc a
certificate duly executed by the chief financial officer of each of the RTM
Parties setting forth in reasonable detail the computation of the estimated Net
Liabilities of the RTM Parties and their Subsidiaries as of immediately prior to
the Closing (the "RTM ESTIMATED NET LIABILITIES"). The items included in the ARG
Estimated Closing Net Liabilities and the RTM Estimated Closing Net Liabilities
shall be based on the most recently available month end balance sheets of ARG
and its Subsidiaries and the RTM Parties and their Subsidiaries, respectively,
with such adjustments thereto as are reasonably appropriate to reflect any
changes which are known to the applicable chief financial officer to have
occurred subsequent to that date or which, in the applicable chief financial
officer's reasonable judgment, will occur prior to the
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Closing, and shall be calculated in accordance with the accounting principles,
methods and practices utilized in preparing the ARG Audited Financial Statements
and the Restated Combined RTM Audited Financial Statements, as the case may be,
applied on a consistent basis in accordance with GAAP, with such exceptions
thereto as are set forth in the definition of Net Liabilities.
(b) At the Closing, based solely on the ARG Estimated Net
Liabilities set forth in such certificate: (i) if the ARG Estimated Net
Liabilities are less than $268.2 million (the "ARG Benchmark"), then Triarc
shall cause ARG to deliver to Triarc cash (by wire transfer of immediately
available funds) in an amount equal to the amount (if any) by which such
difference exceeds $1 million; and (ii) if the ARG Estimated Net Liabilities are
greater than the ARG Benchmark, then Triarc shall deliver to ARG cash (by wire
transfer of immediately available funds) in an amount equal to the amount (if
any) by which such difference exceeds $1 million.
(c) At the Closing, based solely on the RTM Estimated Net
Liabilities set forth in such certificate: (i) if the RTM Estimated Net
Liabilities are less than $440.1 million (the "RTM Benchmark"), then the amount
of the Aggregate Cash Consideration to be paid pursuant to Section 2.01(a)(i)
shall be increased by an amount equal to the amount (if any) by which such
difference exceeds $1 million; and (ii) if the RTM Estimated Net Liabilities are
greater than the RTM Benchmark, then the amount of the Aggregate Cash
Consideration shall be decreased by an amount equal to the amount (if any) by
which such difference exceeds $1 million.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, the provisions set forth in this Section 2.08 will apply only if the
Closing Date occurs after July 31, 2005.
Section 2.09 POST-CLOSING ADJUSTMENTS BASED ON CLOSING NET
LIABILITIES.
(a) As promptly as practicable and in any event no later than 90
days after the Closing Date, Triarc shall cause ARG to have prepared and
delivered to the RTM Representatives, and shall cause Deloitte & Touche LLP to
audit, at ARG's cost and expense, (i) a consolidated balance sheet of ARG and
its Subsidiaries as of immediately prior to the Closing (the "ARG CLOSING
BALANCE SHEET"), together with a statement certified by the chief financial
officer of ARG (the "ARG STATEMENT") setting forth in reasonable detail the
determination of the Net Liabilities of ARG and its Subsidiaries as of
immediately prior to the Closing based upon the amounts set forth on the ARG
Closing Balance Sheet (the "ARG CLOSING NET LIABILITIES"); PROVIDED, that Triarc
shall be obligated to cause Deloitte & Touche LLP to audit the ARG Closing
Balance Sheet only if the Triarc B-2 Election shall have been made; and (ii)
combined balance sheets of RTMRG and its Subsidiaries, RTMAC and the RTMMC
Purchased Assets and Assumed Liabilities as of immediately prior to the Closing
(the "RTM CLOSING BALANCE SHEET" and, together with the ARG Closing Balance
Sheet, the "CLOSING BALANCE SHEETS"), together with a statement certified by the
chief financial officer of ARG (the "RTM STATEMENT" and, together with the ARG
Statement, the
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"STATEMENTS") setting forth in reasonable detail the determination of the Net
Liabilities of the RTM Parties and their Subsidiaries as of immediately prior to
the Closing based upon the amounts set forth on the RTM Closing Balance Sheet
(the "RTM CLOSING NET LIABILITIES"). The Closing Balance Sheets and the
Statements (to the extent the items included thereon are of the type reflected
on a balance sheet) shall be prepared in accordance with the accounting
principles, methods and practices utilized in preparing the ARG Audited
Financial Statements and the Restated Combined RTM Audited Financial Statements,
as the case may be, applied on a consistent basis in accordance with GAAP, with
such exceptions thereto as are set forth in the definition of Net Liabilities.
The Closing Balance Sheets and the Statements shall be final and binding on the
parties hereto, subject to the process of objection provided in this Section
2.09 below.
(b) Triarc shall cause ARG, the Surviving LLC, RTMAC and RTMMC
Acquisition Sub and their respective Subsidiaries to give the RTM
Representatives and their respective Representatives reasonable access to all of
their books, records, personnel, accountants, offices and other facilities and
properties as the RTM Representatives may require to review the Closing Balance
Sheets and the Statements. If the RTM Representatives believe that the
calculation of the ARG Closing Net Liabilities and/or RTM Closing Net
Liabilities was not determined in the manner required by Section 2.09(a), then
the RTM Representatives may, within 45 days after delivery of the Closing
Balance Sheets and Statement, deliver a notice (the "DISPUTE NOTICE") to Triarc,
setting forth the RTM Representatives' calculation of the ARG Closing Net
Liabilities and/or the RTM Closing Net Liabilities and specifying, in reasonable
detail, those items or amounts affecting the calculation as to which it
disagrees and the reasons for such disagreement. If prior to the conclusion of
such 45-day period the RTM Representatives notify Triarc in writing that they
will not provide a Dispute Notice or if a Dispute Notice is not delivered within
such 45-day period, the applicable Closing Net Liabilities, as set forth on the
applicable Statement, shall become final, conclusive and binding on the parties
hereto for all purposes of this Section 2.09.
(c) If the RTM Representatives deliver a Dispute Notice as provided
above, Triarc and the RTM Representatives shall use commercially reasonable
efforts to reach agreement on the disputed items or amounts in order to
determine the applicable Closing Net Liabilities. If Triarc and the RTM
Representatives do not resolve all disputed items or amounts set forth in the
Dispute Notice within 15 days after delivery of such Dispute Notice, the
remaining disputed items and amounts will be submitted to a nationally
recognized independent accounting firm in the U.S. mutually agreed to by Triarc
and the RTM Representatives (the "INDEPENDENT ACCOUNTANTS") for resolution of
such disputed items and amounts. Triarc and the RTM Representatives will have
the opportunity to present their positions with respect to such disputed items
and amounts to the Independent Accountants, and such disputed items and amounts
shall be resolved by the Independent Accountants in accordance with the
requirements of Section 2.09(a). The Independent Accountants shall prepare a
written report setting forth the resolution of such disputed items and amounts
and calculating the revised amount of such Closing Net Liabilities, which shall
be delivered to each of Triarc and the RTM Representatives promptly, but in no
event later than 30 days after such disputed items and amounts are submitted to
the Independent Accountants. Such revised amount of such Closing Net
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Liabilities shall not reflect any difference from the amount of such Closing Net
Liabilities set forth on the applicable Statement other than differences
required to reflect the resolution of such disputed items and amounts by the
Independent Accountants. The revised amount of such Closing Net Liabilities set
forth on the Independent Accountants' written report shall be final, conclusive
and binding upon the parties hereto. The procedures set forth in this Agreement
for resolution of disputes concerning such Closing Net Liabilities shall be
final and binding on all of the parties, and shall not be subject to appeal of
any kind. The fees and disbursements of the Independent Accountants shall be
borne by the party whose determination of such Closing Net Liabilities is
farthest in difference from the revised amount of such Closing Net Liabilities
set forth in the Independent Accountants' written report. Each of Triarc and the
RTM Representatives shall execute a reasonably acceptable engagement letter, if
requested to do so by the Independent Accountants, and shall provide reasonable
access to their respective employees who are responsible for financial matters,
and Triarc shall provide reasonable access to the books and records of Triarc
and its Subsidiaries.
(d) The parties shall use their commercially reasonable efforts to
cause the final determination of the ARG Closing Net Liabilities in accordance
with this Section 2.09 to occur prior to the earlier of the Trigger Event and
January 3, 2006. Upon the final determination of the ARG Closing Net Liabilities
in accordance with this Section 2.09, the payment called for under Section
2.08(b) shall be recalculated by substituting the ARG Closing Net Liabilities
for the ARG Estimated Net Liabilities in the calculation. If such recalculation
results in Triarc being owed a payment, then Triarc shall cause ARG to deliver
to Triarc or its designee, within five Business Days after such final
determination, cash (by wire transfer of immediately available funds) in an
amount equal to the amount that Triarc would have been paid if the payment
called for in Section 2.08(b) had been calculated on the basis of the ARG
Closing Net Liabilities, PLUS interest thereon at the Applicable Rate accruing
from the Closing Date through the date of payment. If such recalculation results
in Triarc owing a payment, then Triarc shall deliver to ARG, within five
Business Days after such final determination, an amount of cash (by wire
transfer of immediately available funds) equal to the amount that ARG would have
been paid if the payment called for in Section 2.08(b) had been calculated on
the basis of the ARG Closing Net Liabilities, PLUS interest accrued thereon at
the Applicable Rate from the Closing Date to the date of payment. In computing
the amount of the recalculated payment owed by or to Triarc pursuant to this
Section 2.09(d), the effect of any payments made pursuant to Section 2.08(b)
shall be reversed, which may result in a greater or lesser payment being owed by
Triarc or a greater or lesser payment being owed to Triarc under this Section
2.09(d) than would have been the case had no payments been made under Section
2.08(b).
(e) Upon the final determination of the RTM Closing Net Liabilities
in accordance with this Section 2.09, the adjustment to the Aggregate Cash
Consideration called for under Section 2.08(c) shall be recalculated by
substituting the RTM Closing Net Liabilities for the RTM Estimated Net
Liabilities in the calculation. If the Aggregate Cash Consideration as
originally adjusted pursuant to Section 2.08(c) is less than the Aggregate Cash
Consideration would have been if the original adjustment were made on the basis
of the RTM Closing Net Liabilities, then Triarc shall cause ARG to deliver to
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the RTM Representatives, within five Business Days after such final
determination, for distribution by them pro rata to the RTMRG Shareholders, as
an increase to the Aggregate Cash Consideration, cash (by wire transfer of
immediately available funds) in an amount equal to the amount (if any) by which
the Aggregate Cash Consideration that would have been paid if the adjustment
pursuant to Section 2.08(c) had been calculated on the basis of the RTM Closing
Net Liabilities exceeds the Aggregate Cash Consideration that was paid, PLUS
interest thereon at the Applicable Rate accruing from the Closing Date through
the date of payment. If the Aggregate Cash Consideration as originally adjusted
pursuant to Section 2.08(c) is more than the Aggregate Cash Consideration would
have been if the original adjustment were made on the basis of the RTM Closing
Net Liabilities, then the RTMRG Shareholders and the RTMRG Principal
Shareholders (jointly and severally, pursuant to the Transaction Support
Agreement) shall deliver to ARG for no additional consideration an amount of
cash equal to the amount (if any) by which the Aggregate Cash Consideration that
was paid exceeds the Aggregate Cash Consideration that would have been paid if
the adjustment pursuant to Section 2.08(c) had been calculated on the basis of
the RTM Closing Net Liabilities, PLUS interest accrued thereon at the Applicable
Rate from the Closing Date to the date of payment (the "RTM SHORTFALL AMOUNT"),
and such delivery shall be effected as follows: (A) if the RTM Escrow Fund
contains cash at such time, then each of Triarc and the RTM Representatives
shall, in accordance with the terms of the Escrow Agreement, instruct the Escrow
Agent to deliver to ARG, from the RTM Escrow Fund, cash in an amount equal to
the lesser of (x) the RTM Shortfall Amount and (y) all cash contained in the RTM
Escrow Fund and (B) to the extent the RTM Shortfall Amount exceeds the amount
described in clause (y), or if the RTM Escrow Fund does not contain cash at such
time, the RTMRG Principal Shareholders (jointly and severally, pursuant to the
Transaction Support Agreement) promptly shall deliver to ARG cash (by wire
transfer of immediately available funds) in an amount equal to the positive
difference between the RTM Shortfall Amount less any amounts paid under clause
(A) above.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES
THE FOLLOWING REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES (AND
THE CORRESPONDING PORTIONS OF THE TRIARC DISCLOSURE LETTER) SHALL AUTOMATICALLY
AND IMMEDIATELY TERMINATE AND EXPIRE AND BE OF NO FURTHER FORCE OR EFFECT FOR
ANY PURPOSE IN THIS AGREEMENT OR OTHERWISE UPON (X) THE MAKING BY THE RTM
REPRESENTATIVES OF THE TRIARC B-1 ELECTION OR (Y) THE CONVERSION OF SHARES OF
TRIARC CLASS B-2 COMMON STOCK ISSUED PURSUANT TO THE TRIARC B-2 ELECTION INTO
SHARES OF TRIARC CLASS B-1 COMMON STOCK BECAUSE THE TRIGGER EVENT SHALL NOT HAVE
OCCURRED OR AN ADVERSE BOARD DETERMINATION SHALL HAVE BEEN MADE.
Except as otherwise set forth in the disclosure letter delivered on or
prior to the date of this Agreement by Triarc to RTMRG (the "TRIARC DISCLOSURE
LETTER"), which Triarc Disclosure Letter is arranged in Sections corresponding
to the Sections of this Agreement, the Triarc Parties jointly and severally
represent and warrant to RTMRG that:
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Section 3.01 ORGANIZATION AND QUALIFICATION OF TRIARC PARTIES. Each
of the Triarc Parties is a limited liability company or corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or organization and has the corporate power and
authority to own or lease its assets and to carry on its business substantially
as it is being conducted on the date hereof. Each of the Triarc Parties is duly
qualified and licensed to do business and is in good standing in each
jurisdiction where the ownership or operation of its property and assets or the
conduct of its business requires such qualification, except where the failure to
be so qualified or in good standing has not had and would not reasonably be
expected to have, individually or in the aggregate, a Triarc Material Adverse
Effect or an ARG Material Adverse Effect. Triarc has made available to RTMRG
correct and complete copies of the articles of incorporation and bylaws of each
of the Triarc Parties (as amended to the date hereof).
Section 3.02 AUTHORIZATION OF TRIARC PARTIES; ENFORCEABILITY. Each of
the Triarc Parties has all requisite limited liability company or corporate
power and authority, and has taken all limited liability company or corporate
action necessary in order to execute, deliver and perform its obligations under
this Agreement and each of the Ancillary Agreements to which it is a party and
to consummate the transactions contemplated by this Agreement and each such
Ancillary Agreement. This Agreement and each of the Ancillary Agreements to
which it is a party have been duly executed and delivered by each of the Triarc
Parties and constitute the legal, valid and binding obligation of each of the
Triarc Parties, enforceable in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors'
rights, and to general equity principles.
Section 3.03 CAPITALIZATION OF TRIARC.
(a) As of the close of business on May 16, 2005, the authorized
capital stock of Triarc consists solely of (i) 100,000,000 shares of Class A
Common Stock, par value $0.10 per share (the "TRIARC CLASS A COMMON STOCK"),
(ii) 150,000,000 shares of Triarc Class B Common Stock, of which 100,000,000
shares have been designated as Triarc Class B-1 Common Stock and (iii)
100,000,000 shares of Preferred Stock, par value $0.10 per share.
(b) As of the close of business on May 16, 2005, (i) 23,902,892
shares of Triarc Class A Common Stock and 42,663,278 shares of Triarc Class B-1
Common Stock were issued and outstanding, (ii) 5,647,771 shares of Triarc Class
A Common Stock and 16,438,048 shares of Triarc Class B-1 Common Stock were held
in treasury by Triarc, (iii) 8,335,250 shares of Triarc Class A Common Stock and
16,243,773 shares of Triarc Class B-1 Common Stock were reserved for issuance
under Triarc's stock plans set forth in Section 3.03(a) of the Triarc Disclosure
Letter (the "TRIARC OPTION PLANS") and (iv) 4,375,000 shares of Triarc Class A
Common Stock and 8,750,000 shares of Triarc Class B-1 Common Stock were reserved
for issuance upon conversion of outstanding 5% Convertible Notes due 2023 of
Triarc (the "TRIARC CONVERTIBLE NOTES"). Except as set forth in this Section
3.03(b), as of the close of business on May 16, 2005, no shares of capital stock
of Triarc were issued, reserved for issuance or outstanding.
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(c) All shares of Triarc Class B-1 Common Stock to be issued
pursuant to this Agreement and, if the Triarc B-2 Election shall have been made,
upon conversion of shares of Triarc Class B-2 Common Stock, and all shares of
Triarc Class B-2 Common Stock to be issued pursuant to this Agreement, upon
issuance (i) will be duly authorized, validly issued, fully paid and
non-assessable and (ii) will not be subject to pre-emptive rights.
(d) Except as set forth in Section 3.03(b), there are no warrants,
calls, conversion rights, stock appreciation rights, redemption rights,
repurchase rights or other rights, agreements, arrangements or commitments to
which Triarc or any of its Subsidiaries is a party (A) relating to the issued or
unissued capital stock or other securities of Triarc or (B) obligating Triarc to
issue or sell any shares of their capital stock or other securities.
(e) Except as set forth in Section 3.03(e) of the Triarc Disclosure
Letter, to the Knowledge of Triarc, there are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital stock of
Triarc. Other than the Triarc Convertible Notes, Triarc does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or are convertible into or exercisable for
securities having the right to vote) with the stockholders of Triarc on any
matters.
Section 3.04 SUBSIDIARIES OF ARG.
(a) Section 3.04(a) of the Triarc Disclosure Letter lists the name
of each direct and indirect Subsidiary of ARG, the type of entity, jurisdiction
of organization and the number and class and/or series of shares of capital
stock or similar equity interests of such Subsidiary that are outstanding, and
the identity of the record and beneficial holders thereof. Each Subsidiary of
ARG is duly organized or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of organization or formation,
as the case may be, has the power and authority to own or lease its assets and
to carry on its business substantially as it is being conducted on the date
hereof, and is duly qualified and licensed to do business and is in good
standing, in each jurisdiction where the ownership or operation of its
properties and assets or the conduct of its business requires such
qualification, except where the failure to be so qualified, licensed or in good
standing has not had and would not reasonably be expected to have, individually
or in the aggregate, an ARG Material Adverse Effect. Triarc has made available
to RTMRG correct and complete copies of the articles of incorporation and bylaws
(or similar organizational documents) of each Subsidiary of ARG (as amended to
the date hereof). Section 3.04(a) of the Triarc Disclosure Letter sets forth all
interests of ARG and its Subsidiaries in Persons other than Subsidiaries of ARG
(the "ARG INVESTMENTS"), listing the name of such Person, the type of entity,
jurisdiction of organization and the number and class, amount and/or series of
debt or equity interests of such Persons held by ARG, its Subsidiaries and each
other holder of any equity or other ownership interest in such Person. ARG and
its Subsidiaries have good and valid title, free and clear of any Liens, to the
ARG Investments.
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(b) All shares of capital stock or similar equity interests of each
Subsidiary of ARG are owned by ARG or another Subsidiary of ARG free and clear
of all Liens, and all such shares of capital stock have been duly authorized and
validly issued and are fully paid and nonassessable and all other such similar
equity interests have been duly authorized and validly issued and are fully
paid. Except as contemplated hereby, neither ARG nor any of its Subsidiaries has
any obligation to sell, transfer or assign or has entered into a Contract
regarding the sale, transfer or assignment of any of its rights, securities or
interests in any Subsidiary of ARG or any of the other equity interests owned by
ARG or any Subsidiary of ARG. There are no preemptive or other outstanding
rights, options, warrants, conversion rights, stock appreciation rights,
redemption rights, agreements, arrangements or commitments to issue or sell any
shares of capital stock or other securities of any Subsidiary of ARG or any
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire, any securities of any
Subsidiary of ARG, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. There are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital stock of
any Subsidiary of ARG. No Subsidiary of ARG has outstanding any bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into or exercisable for securities having the right to
vote) with the equityholders of any Subsidiary of ARG on any matter.
Section 3.05 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by each of the Triarc Parties of this Agreement and each of the
Ancillary Agreements to which it is a party do not, and the consummation by each
of the Triarc Parties of the transactions contemplated hereby and thereby will
not, require any consent, approval or other authorization of, or filing with or
notification to, any Governmental Entity, other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 3.06 NON-CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings, the
execution, delivery and performance by each of the Triarc Parties of this
Agreement and each of the Ancillary Agreements to which it is a party do not,
and the consummation by each of the Triarc Parties of the transactions
contemplated hereby and thereby will not (a) contravene, conflict with, or
result in any violation or breach of, the articles of incorporation or by-laws
(or comparable organizational instruments) of any of the Triarc Parties or ARG
or any of its Subsidiaries, (b) contravene or conflict with, or result in any
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violation or breach of, in any material respect, any Laws, Orders or Permits
applicable to any of the Triarc Parties or ARG or any of its Subsidiaries or by
which any assets of any of the Triarc Parties or ARG or any of its Subsidiaries
are bound, assuming that all consents, approvals, authorizations, filings and
notifications described in Section 3.05, Section 4.04 and Section 5.05 have been
obtained or made, (c) result in any violation or breach of, or constitute a
default (with or without notice or lapse of time or both) under, (x) any ARG
Material Contract or (y) any other Contract to which any of the Triarc Parties
or ARG or any of its Subsidiaries is a party or by which any assets of any of
the Triarc Parties or ARG or any of its Subsidiaries are bound, other than in
the case of this clause (y) any such violation, breach or default that would not
reasonably be expected to be, individually or in the aggregate, material to ARG
and its Subsidiaries, taken as a whole, (d) require any consent, approval or
other authorization of, or filing with or notification to, any Person under (x)
any ARG Material Contract or (y) any other Contract to which any of the Triarc
Parties or ARG or any of its Subsidiaries is a party or by which any assets of
any of the Triarc Parties or ARG or any of its Subsidiaries are bound, other
than in the case of this clause (y) any such consent, approval, authorization,
filing or notification that, if not obtained or made, would not reasonably be
expected to be, individually or in the aggregate, material to ARG and its
Subsidiaries, taken as a whole, (e) give rise to any termination, cancellation,
amendment, modification or acceleration of any rights or obligations under (x)
any ARG Material Contract or (y) any other Contract to which any of the Triarc
Parties or ARG or any of its Subsidiaries is a party or by which any assets of
any of the Triarc Parties or ARG or any of its Subsidiaries are bound, other
than in the case of this clause (y) any such termination, cancellation,
amendment, modification or acceleration that would not reasonably be expected to
be, individually or in the aggregate, material to ARG and its Subsidiaries,
taken as a whole, or (f) cause the creation or imposition of any Liens (other
than Permitted Liens) on any material assets of any of the Triarc Parties or ARG
or any of its Subsidiaries.
Section 3.07 ARG FINANCIAL STATEMENTS; INTERNAL CONTROLS;
INDEBTEDNESS.
(a) Schedule 3.07(a) of the Triarc Disclosure Letter sets forth the
following consolidated financial statements of ARG and its Subsidiaries
(collectively, the "ARG FINANCIAL STATEMENTS"): (i) the audited consolidated
balance sheet as of January 2, 2005 and December 28, 2003 and statements of
income, stockholders' deficit and cash flows for the fiscal years ended January
2, 2005, December 28, 2003 and December 29, 2002, for ARG and its Subsidiaries
(such statements, together with the footnotes related thereto, being the "ARG
AUDITED FINANCIAL STATEMENTS") and (ii) unaudited consolidated balance sheet as
of April 3, 2005 and January 2, 2005 and statements of income and cash flows for
the fiscal periods ended April 3, 2005 and March 28, 2004, for ARG and its
Subsidiaries (such statements being the "ARG UNAUDITED FINANCIAL STATEMENTS").
The ARG Financial Statements (x) were prepared in accordance with GAAP applied
on a consistent basis (except as may be indicated in the notes to the ARG
Financial Statements and except for the absence of footnotes in the case of the
ARG Unaudited Financial Statements); and (y) fairly present, in all material
respects, the consolidated financial position of ARG and its Subsidiaries as of
the dates thereof and their consolidated results
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of operations and cash flows for the periods then ended (subject, in the case of
the ARG Unaudited Financial Statements, to normal year-end adjustments).
(b) Each of ARG and its Subsidiaries maintains accurate books and
records reflecting its assets and liabilities and maintains proper and adequate
internal accounting controls which provide assurance that (i) transactions are
executed with management's authorization; (ii) transactions are recorded as
necessary to permit preparation of the consolidated financial statements of ARG
and its Subsidiaries and to maintain accountability for the consolidated assets
of ARG and its Subsidiaries; (iii) access to the assets of ARG and its
Subsidiaries is permitted only in accordance with management's authorization;
(iv) the reporting of the assets of ARG and its Subsidiaries is compared with
existing assets at regular intervals; and (v) accounts, notes and other
receivables and inventory are recorded accurately, and proper and adequate
procedures are implemented to effect the collection thereof on a current and
timely basis. Triarc has heretofore made available to RTMRG a true, complete and
correct copy of any disclosure (or, if unwritten, a summary thereof) by any
Representative of ARG or its Subsidiaries to ARG's independent auditors relating
to (x) any significant deficiencies in the design or operation of internal
controls which could adversely affect the ability of ARG or any of its
Subsidiaries to record, process, summarize and report financial data and any
material weaknesses in internal controls and (y) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the internal control over financial reporting of ARG or any of its
Subsidiaries.
(c) Section 3.07(c) of the Triarc Disclosure Letter sets forth a
true and correct list of all Indebtedness of ARG or any of its Subsidiaries
(other than any Indebtedness owed by ARG or any of its Subsidiaries to ARG or
any of its Subsidiaries) (which Section may be updated by Triarc prior to the
Closing Date to reflect (x) any additions or deletions thereto after the date
hereof and (y) payments of principal and interest and accrual of interest on
such Indebtedness during the period from the date hereof through the Closing
Date). The aggregate amount of prepayment penalties, premiums, make wholes,
breakage and other costs and expenses payable to the lenders and insurers as
such of all such Indebtedness solely on account of the repayment of such
Indebtedness in the Debt Refinancings will not exceed $37 million. All such
Indebtedness of ARG and its Subsidiaries is permitted by its terms to be prepaid
in connection with the Debt Refinancings.
Section 3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except to the
extent relating to the transactions contemplated by this Agreement, since
January 2, 2005 (i) ARG and its Subsidiaries taken as a whole have in all
material respects conducted their businesses in the ordinary course of business
consistent with past practice and (ii) there has not occurred any event, and
there does not exist any condition or set of circumstances, that has had or
could reasonably be expected to have, individually or in the aggregate, an ARG
Material Adverse Effect.
Section 3.09 ABSENCE OF UNDISCLOSED LIABILITIES. None of ARG and its
Subsidiaries has any material Liabilities, except for (i) Liabilities set forth
in the ARG Financial Statements, (ii) Liabilities which have arisen after
January 2, 2005 in the
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ordinary course of business consistent with past practice, (iii) Liabilities set
forth in Section 3.09 of the Triarc Disclosure Letter and (iv) Liabilities that
are (A) the subject of any other representation or warranty contained in this
Article III and are specifically disclosed pursuant to such representation or
warranty or are not required to be disclosed because such other representation
or warranty is limited or qualified with respect to dollar amount, Knowledge of
Triarc or materiality or (B) taken into account in the determination of the ARG
Estimated Net Liabilities or ARG Closing Net Liabilities.
Section 3.10 COMPLIANCE WITH LAWS; PERMITS.
(a) Since December 31, 2001, except for matters specifically
addressed by Section 3.15 (last sentence only), Section 3.16, Section 3.25(b) or
Section 3.26(e), (i) ARG and its Subsidiaries have conducted their respective
businesses in compliance in all material respects with applicable Law; and (ii)
neither ARG nor any of its Subsidiaries has received any notice or other
communication (whether oral or written) from any Governmental Entity or any
other Person regarding any actual, alleged, possible, or potential failure to
comply in any material respect with any applicable Laws.
(b) ARG and its Subsidiaries hold all material Permits issued or
provided by Governmental Entities under all Laws, which are necessary for them
to own their assets or operate their businesses as currently conducted (the "ARG
PERMITS"). There have been no material misstatements or omissions in connection
with any ARG Permit that, individually or in the aggregate, would be reasonably
likely to result in the revocation, nonrenewal, suspension or adverse
modification of such ARG Permit except for such revocations, non-renewals,
suspensions or adverse modifications that have not been and would not reasonably
be expected to be, individually or in the aggregate, material to ARG and its
Subsidiaries, taken as a whole. There is not pending, nor to the Knowledge of
Triarc threatened, against ARG or any of its Subsidiaries, any application,
action, petition, objection or other pleading, or any proceeding, with any
Governmental Entity which questions or contests the validity of, or any rights
of the holder under, or nonrenewal or suspension of any ARG Permit.
Section 3.11 LEGAL ACTIONS. Section 3.11 of the Triarc Disclosure
Letter sets forth a true and complete list of all Legal Actions pending or, to
the Knowledge of Triarc, threatened against (a) ARG or any of its Subsidiaries
or (b) any director, officer or employee of ARG or any of its Subsidiaries or
other Person, including Triarc, for whom ARG or any of its Subsidiaries may be
liable, other than in the case of clause (a) or (b) any such Legal Actions
commenced or, to the Knowledge of Triarc, threatened after the date of this
Agreement and prior to the Closing Date that have not resulted in and would not
reasonably be expected to result in, individually or in the aggregate, (x)
Losses to ARG and its Subsidiaries in excess of $1.5 million or (y) ARG or any
of its Subsidiaries being bound by any material restriction (other than
customary confidentiality restrictions). Neither ARG nor any of its Subsidiaries
is subject to or bound by any outstanding Order that is material to ARG and its
Subsidiaries, taken as a whole.
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Section 3.12 CONTRACTS.
(a) Section 3.12(a) of the Triarc Disclosure Letter lists the
following Contracts to which ARG or any of its Subsidiaries is a party and which
are outstanding (which Section may be updated by Triarc prior to the Closing
Date to reflect any additions or deletions thereto after the date hereof)
(collectively, the "ARG MATERIAL CONTRACTS"):
(i) any Contract expressly requiring capital expenditures
involving consideration in excess of $50,000 in any twelve month period;
(ii) any Contract which restricts or limits, in any material
respect, the ability of ARG or any of its Subsidiaries to freely engage in any
aspect of the quick service restaurant business, whether as franchisor or
owner/operator, or to employ any individuals (other than any confidentiality
agreement entered into in connection with a potential acquisition containing any
such restriction or limitation to employ any individuals);
(iii) any collective bargaining agreement;
(iv) any Contract which involved payments from ARG or any of
its Subsidiaries of more than $250,000 to any Person supplying food or paper
products or distribution services to ARG and its Subsidiaries during the
twelve-month period ended January 2, 2005;
(v) any Contract which involved payments from ARG or any of
its Subsidiaries of more than $100,000 to any Person supplying advertising
services or marketing services or materials to ARG and its Subsidiaries during
the twelve-month period ended January 2, 2005;
(vi) any Contract which involved payments to ARG or any of
its Subsidiaries of more than $100,000 from any Person supplying beverage
products during the twelve-month period ended January 2, 2005;
(vii) any Contract relating to the management or control of
any Person in which ARG or any of its Subsidiaries owns any equity securities
other than direct and indirect wholly owned Subsidiaries of ARG;
(viii) any Contract relating to the employment of any employee,
and any Contract pursuant to which ARG or any of its Subsidiaries is or may
become obligated to make any severance, termination, bonus or relocation payment
or any other payment (other than payments in respect of salary) in excess of
$125,000 to any current or former employee, officer or director;
(ix) any Contract which provides for indemnification by ARG
or any of its Subsidiaries of (A) any officer, director or employee of Triarc or
any of its Subsidiaries or (B) any agent of Triarc or any of its Subsidiaries or
any other Person that,
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in the case of this clause (B), has resulted in or would reasonably be expected
to result in, individually or in the aggregate, any material liabilities to ARG
or any of its Subsidiaries;
(x) any Contract relating to any Indebtedness, guarantying
the performance of any Person or guarantying any Indebtedness;
(xi) any Contract involving a purchase price of $50,000 or
more under which the closing of the transactions contemplated thereby has not
occurred or under which there remains outstanding obligations and which relates
to the acquisition by ARG or any of its Subsidiaries of any operating business
or the capital stock or other equity securities of any other Person, or the sale
by ARG or any of its Subsidiaries of any operating business or the capital stock
or other equity securities of any former Subsidiary of ARG;
(xii) any partnership or joint venture agreement or other
Contract involving a sharing of profits, losses, costs or Liabilities with any
other Person;
(xiii) any Contract under which ARG or any of its Subsidiaries
uses or occupies or has the right to use or occupy any real property
(collectively, the "ARG REAL PROPERTY LEASES") (and Section 3.12(a)(xiii) of the
Triarc Disclosure Letter sets forth a true and complete summary of the following
terms of each such ARG Real Property Lease: (1) the annual rental rate; and (2)
the termination date);
(xiv) any Contract under which ARG or any of its Subsidiaries
grants to any Person or Persons the right of use or occupancy to any portion of
any parcel of ARG Real Property (collectively, the "ARG LEASES");
(xv) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the acquisition or sale by ARG
or any of its Subsidiaries of one or more parcels of real property, the
aggregate purchase price of which exceeds $50,000;
(xvi) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the construction by ARG or any
of its Subsidiaries of one or more new Restaurants, the estimated costs under
which exceeds $50,000 in the aggregate;
(xvii) any Contract entered into out of the ordinary course of
business, including any Contract entered into in connection with any settlement
of any claim, action, suit, demand, proceeding, investigation or dispute,
involving payments by ARG and/or its Subsidiaries in excess of $50,000 or any
unfulfilled or pending non-payment obligations of ARG or any of its
Subsidiaries; and
(xviii) any Contract or pledge pursuant to which ARG or any of
its Subsidiaries has committed or undertaken to make any charitable contribution
with an unfulfilled amount in excess of $50,000 individually or $250,000 in the
aggregate for all such Contracts or pledges.
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(b) Each ARG Material Contract is valid, binding, in full force
and effect and enforceable in accordance with its terms against ARG or the
applicable Subsidiary of ARG and, to the Knowledge of Triarc, against any other
party thereto. ARG or the applicable Subsidiary of ARG and, to the Knowledge of
Triarc, each other party thereto, is not in material breach or material default
under any ARG Material Contract and to the Knowledge of Triarc, no event has
occurred or condition of set of circumstances exists which, with or without
notice or lapse of time or both, would constitute a material breach or material
default, or permit termination, modification or acceleration, under any ARG
Material Contract by any party thereto.
Section 3.13 TAX MATTERS.
(a) All income Tax Returns and all other material Tax Returns
required to be filed by or with respect to ARG or any of its Subsidiaries (other
than Sybra and its Subsidiaries) or by or with respect to Sybra and its
Subsidiaries for Tax Periods ending after December 27, 2002), have been properly
prepared and timely filed (including all applicable extensions), and all such
Tax Returns (including information provided therewith or with respect thereto)
are true, complete and correct in all material respects.
(b) ARG and its Subsidiaries (other than Sybra and its
subsidiaries), or by or with respect to Sybra and its Subsidiaries for Tax
periods ending after December 27, 2002) have fully and timely paid all income
Taxes and all other material Taxes owed by such companies (whether or not shown
on any Tax Return), and have made adequate provision for any such Taxes that are
not yet due and payable, for all taxable periods, or portions thereof, ending on
or before the date hereof.
(c) There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from ARG or any of
its Subsidiaries for any taxable period and no written request for any such
waiver or extension is currently pending.
(d) No audit or other proceeding by any Governmental Entity is
pending, no Governmental Entity has given written notice of any intention to
commence an audit or other proceeding, or assert any deficiency or claim for
additional Taxes against ARG or any of its Subsidiaries, and no claim in writing
has been made by any Governmental Entity in a jurisdiction where ARG and its
Subsidiaries do not file Tax Returns with respect to a particular Tax that it is
or may be subject to taxation by that jurisdiction with respect to such Tax, and
all deficiencies for Taxes asserted or assessed in writing against ARG or any of
its Subsidiaries have been fully and timely paid, settled or properly reflected
in the ARG Financial Statements.
(e) There are no Liens for Taxes upon the assets or properties of
ARG or any of its Subsidiaries, except for statutory Liens for current Taxes not
yet due.
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(f) Neither ARG nor any of its Subsidiaries is a party to any Tax
Sharing Agreement or has any Liability for Taxes of any Person (other than
members of the affiliated group, within the meaning of Section 1504(a) of the
Code, filing consolidated federal income tax returns of which Triarc is the
common parent (or members of any affiliated group filing combined or
consolidated Tax returns for state, local or foreign Law purposes or which any
of Triarc or its Subsidiaries is the common parent) under Treasury Regulation
ss. 1.1502-6, Treasury Regulation ss. 1.1502-78 or similar provision of state,
local or foreign Law, as a transferee or successor, by Contract, or otherwise.
(g) ARG and its Subsidiaries have each withheld (or will withhold)
from their respective employees, independent contractors, creditors,
stockholders and third parties and timely paid to the appropriate Governmental
Entity proper and accurate amounts in all material respects for all periods
ending on or before the Closing Date in compliance with all Tax withholding and
remitting provisions of applicable Laws and have each complied in all material
respects with all Tax information reporting provisions of all applicable Laws.
(h) Neither ARG nor any of its Subsidiaries has constituted a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for
tax-free treatment under Section 355 of the Code (i) in the two years prior to
the date of this Agreement or (ii) in a distribution that could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with this acquisition.
(i) Neither ARG nor any of its Subsidiaries has agreed, or is
required to make, any adjustment under Section 481(a) of the Code, and no
Governmental Entity has proposed in writing any such adjustment or change in
accounting method.
(j) Neither ARG nor any of its Subsidiaries has executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
similar provision of state, local or foreign Law, and neither ARG nor any of its
Subsidiaries is subject to any private letter ruling of the IRS or comparable
ruling of any other Governmental Entity.
(k) Neither ARG nor any of its Subsidiaries has any "deferred
gains" with respect to any "deferred intercompany transactions," within the
meaning of Treasury Regulation ss. 1.1502-13, and none of ARG's Subsidiaries has
an "excess loss account" within the meaning of Treasury Regulation ss.
1.1502-19.
(l) No property owned by any of ARG or its Subsidiaries: (i) is
property required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g)(5) of the Code.
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(m) As of the date hereof and as of the Closing Date, Triarc does
not have any plan or intention to sell or otherwise dispose of more than 50% of
the assets of RTMRG acquired pursuant to the Mergers, except for dispositions
made in the ordinary course of business, transfers pursuant to the Triarc
Contributions or transfers described in Section 368(a)(2)(C) of the Code or
Treasury Regulation ss. 1.368-2(k).
(n) As of the date hereof and as the of the Closing Date, Triarc
(or a member of Triarc's qualified group as defined in Treasury Regulation ss.
1.368-1(d)(4)(ii)) intends to continue the historic business of RTMRG and its
Subsidiaries or use a significant portion of their historic business assets in a
business.
Section 3.14 EMPLOYEE BENEFITS.
(a) Except for severance agreements under which the remaining
aggregate payments to the applicable former employee are less than $125,000, ARG
does not maintain or contribute to or have any obligation to maintain or
contribute to, or have any direct or indirect Liability with respect to any
plan, program, arrangement or agreement that is a pension, profit-sharing,
savings, retirement, employment, consulting, severance pay, termination,
executive compensation, incentive compensation, deferred compensation, bonus,
stock purchase, stock option, phantom stock or other equity-based compensation,
change-in-control, retention, salary continuation, vacation, sick leave,
disability, death benefit, group insurance, hospitalization, medical, dental,
life (including all individual life insurance policies as to which ARG is the
owner, the beneficiary, or both), Code Section 125 "cafeteria" or "flexible"
benefit, employee loan, educational assistance, fringe benefit plan, whether
written or oral, including, without limitation, any (i) "employee benefit plan"
within the meaning of Section 3(3) of ERISA or (ii) other employee benefit
plans, agreements, programs, policies, arrangements or payroll practices,
whether or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated by
this Agreement or otherwise) under which any current or former employee,
director, officer, leased employee or agent (or their beneficiaries) of ARG has
any present or future right to benefits (each such plan, program, arrangement or
agreement set forth in such Section being individually, an "ARG EMPLOYEE PLAN,"
and collectively, the "ARG EMPLOYEE PLANS"). All references to "ARG" in this
Section 3.14 shall refer to ARG and any employer that would be considered a
single employer with ARG under Sections 414(b), (c), (m) or (o) of the Code.
(b) ARG does not maintain, contribute to or have any Liability
with respect to, and has not within the preceding six years maintained,
contributed to or had any Liability with respect to, any ARG Employee Plan that
is, or has been, (i) subject to Title IV of ERISA or Section 412 of the Code,
(ii) maintained by more than one employer within the meaning of Section 413(c)
of the Code, (iii) subject to Sections 4063 or 4064 of ERISA, (iv) a
"multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, (v) a
"multiple employer welfare arrangement" as defined in Section 3(40) of ERISA,
(vi) maintained outside the jurisdiction of the United States, or (vii) an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is not intended to be qualified under Section 401(a) of the Code.
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(c) (i) Each ARG Employee Plan has been established and
administered in all material respects in accordance with its terms and in
compliance with the applicable provisions of ERISA, the Code and all other
applicable Laws; (ii) with respect to each ARG Employee Plan, all reports,
returns, notices and other documentation that are required to have been filed
with or furnished to the IRS, the DOL or any other Governmental Entity, or to
the participants or beneficiaries of such ARG Employee Plan have been filed or
furnished on a timely basis; (iii) each ARG Employee Plan that is intended to be
qualified within the meaning of Section 401(a) of the Code is so qualified and
has received a favorable determination letter from the IRS to the effect that
the ARG Employee Plan satisfies the requirements of Section 401(a) of the Code
and that its related trust is exempt from taxation under Section 501(a) of the
Code and, to the Knowledge of Triarc, there are no facts or circumstances that
could reasonably be expected to cause the loss of such qualification or the
imposition of any material Liability, penalty or Tax under ERISA, the Code or
any other applicable Laws; (iv) other than routine claims for benefits, no Liens
or Legal Actions to or by any Person or Governmental Entity have been filed
against any ARG Employee Plan or ARG with respect to any ARG Employee Plan or,
to the Knowledge of Triarc, against any other Person and, to the Knowledge of
Triarc, no such Liens or Legal Actions are contemplated or threatened with
respect to any ARG Employee Plan; (v) no individual who has performed services
for ARG has been improperly excluded from participation in any ARG Employee
Plan; and (vi) there are no audits or proceedings initiated pursuant to the
Employee Plans Compliance Resolution System or similar proceedings pending with
the IRS or the DOL with respect to any ARG Employee Plan.
(d) Neither ARG nor, to the Knowledge of Triarc, any other
"party in interest" or "disqualified person" with respect to any ARG Employee
Plan has engaged in a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code involving such ARG Employee
Plan. To the Knowledge of Triarc, no fiduciary has any Liability for breach of
fiduciary duty or any other failure to act or comply with the requirements of
ERISA, the Code or any other applicable Laws in connection with the
administration or investment of the assets of any ARG Employee Plan.
(e) All Liabilities or expenses of ARG in respect of any ARG
Employee Plan (including workers compensation) which have not been paid, have
been properly accrued on the ARG Unaudited Financial Statements in compliance
with GAAP. All contributions (including all employer contributions and employee
salary reduction contributions) or premium payments required to have been made
under the terms of any ARG Employee Plan, or in accordance with applicable Law,
as of the date hereof have been timely made or reflected on the ARG Unaudited
Financial Statements in accordance with GAAP.
(f) Neither ARG nor any organization to which ARG is a successor
or parent corporation, within the meaning of Section 4069(b) of ERISA, has
engaged in any transaction described in Sections 4069 or 4212(c) of ERISA.
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(g) ARG has no obligation to provide or make available
post-employment welfare benefits or welfare benefit coverage for any employee or
former employee, except as may be required under COBRA, and at the sole expense
of the employee or former employee.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
combination with another event) (i) result in any payment becoming due, or
increase the amount of any compensation due, to any current or former employee
of ARG; (ii) increase any benefits otherwise payable under any ARG Employee
Plan; (iii) result in the acceleration of the time of payment or vesting of any
such compensation or benefits; or (iv) result in the payment of any amount that
could, individually or in combination with any other such payment, constitute an
"excess parachute payment," as defined in Section 280G(b)(1) of the Code.
(i) ARG has no plan, Contract or commitment, whether legally binding
or not, to create any additional employee benefit or compensation plans,
policies or arrangements or, except as may be required by Law, to modify any ARG
Employee Plan.
(j) There are no reserves, assets, surpluses or prepaid premiums
with respect to any "welfare plan" (as defined in Section 3(1) of ERISA) that is
disclosed in Section 3.14(a) of the Triarc Disclosure Letter.
(k) ARG has not incurred any Liability or obligation under WARN
or any similar state or local Law within the last six months which remains
unsatisfied.
(l) ARG has no direct or indirect material Liability with respect
to any misclassification of any Person as an independent contractor rather than
as an employee, or with respect to any employee leased from another employer.
(m) Triarc has made available to RTMRG with respect to each ARG
Employee Plan (other than the Triarc Companies, Inc. Retirement Savings Plan and
severance agreements under which the remaining aggregate payments to the
applicable former employee are less than $125,000), a true, correct and complete
copy (or, to the extent no such copy exists, an accurate description) thereof
and, to the extent applicable: (i) the most recent documents constituting the
ARG Employee Plan and all amendments thereto, (ii) any related trust agreement
or other funding instrument; (iii) the most recent IRS determination letter;
(iv) the most recent summary plan description and summary of material
modifications; (v) the three most recent (A) Forms 5500 and attached schedules,
and (B) audited financial statements; (vi) for the last three years, all
correspondence with the IRS, the DOL and any other Governmental Entity regarding
the operation or the administration of any ARG Employee Plan; and (vii) any
other documents in respect of an ARG Employee Plan reasonably requested by
RTMRG.
Section 3.15 LABOR MATTERS. Neither ARG nor any of its Subsidiaries
is the subject of, nor, to the Knowledge of Triarc, is there threatened, any
material claim
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asserting that ARG or any of its Subsidiaries has committed an unfair labor
practice with respect to ARG Employees located in the United States, nor is
there pending or, to the Knowledge of Triarc, threatened, nor has there been
since December 31, 2001, any organized effort or demand for recognition by any
labor organization or any labor dispute or slow-down that is material to the
operations of ARG and its Subsidiaries, taken as a whole. There is not pending,
nor, to the Knowledge of Triarc, is there threatened any material labor strike,
walk-out, work stoppage or lockout with respect to ARG Employees. ARG and each
of its Subsidiaries is, and since December 31, 2001 has been, in compliance in
all material respects with all applicable foreign, federal, state and local Laws
respecting employment, employment of minors, employment practices, terms and
conditions of employment, withholding and wages and hours.
Section 3.16 ENVIRONMENTAL MATTERS. (i) Neither ARG nor any of its
Subsidiaries is, or since December 31, 2001 has been, in violation in any
material respect of any applicable Environmental Law; (ii) since December 31,
2001, neither ARG nor any of its Subsidiaries has received any written notice,
demand, claim or request for information from any Governmental Entity alleging
the violation in any material respect of or any material Liability under any
applicable Environmental Law; (iii) neither ARG nor any of its Subsidiaries is
the subject of any Order arising under any Environmental Law; and (iv) to the
Knowledge of Triarc, there are no events, conditions or circumstances reasonably
likely to result in any material Liability to ARG or any of its Subsidiaries
under Environmental Laws.
Section 3.17 INTELLECTUAL PROPERTY.
(a) ARG and/or each of its Subsidiaries owns, is licensed under,
or otherwise possesses legally enforceable rights to use all patents, trade
secrets, inventions, trademarks, trade names, service marks, trade dress rights,
Internet domain names, copyrights, and any applications and registrations
therefor, technology, know-how, computer software programs or applications, and
tangible or intangible proprietary information or materials that are used in and
material to the business of ARG and its Subsidiaries as currently conducted.
Section 3.17(a) of the Triarc Disclosure Letter sets forth all material United
States patents, patent applications, trademark, service mark and copyright
applications and registrations, and Internet domain name registrations owned by
ARG and its Subsidiaries.
(b) Neither ARG nor any of its Subsidiaries is, nor will it be as a
result of the execution and delivery by the Triarc Parties of this Agreement or
the performance by the Triarc Parties of their obligations hereunder, in
violation in any material respect of any material licenses, sublicenses or other
agreements as to which ARG or any of its Subsidiaries is a party and pursuant to
which ARG or any of its Subsidiaries is authorized to use any third-party
patents, inventions, trademarks, trade names, service marks, trade dress rights,
Internet domain names, copyrights, trade secrets or other intellectual property
rights (collectively, "ARG THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS").
(c) No claims with respect to (i) the right of ARG or any of its
Subsidiaries to use or to sell, license or make available to any Person any
products or
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services of ARG or any of its Subsidiaries, or any of the patents, patent
applications, registered and material unregistered trademarks, trade names,
service marks, registered copyrights, and any applications therefor, Internet
domain names, trade secrets or inventions owned by ARG or any of its
Subsidiaries (collectively, the "ARG INTELLECTUAL PROPERTY RIGHTS"); or (ii) ARG
Third-Party Intellectual Property Rights are, to the Knowledge of Triarc,
currently pending or threatened by any Person against ARG or any of its
Subsidiaries that if adversely determined could be material to ARG and its
Subsidiaries, taken as a whole.
(d) ARG and its Subsidiaries have taken all necessary actions to
maintain and protect the ARG Intellectual Property Rights.
Section 3.18 REAL PROPERTY. Section 3.18 of the Triarc Disclosure
Letter sets forth a true, correct and complete schedule of all real property
owned by, or leased, subleased or licensed to, ARG or any of its Subsidiaries
(which Section may be updated by Triarc prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof) (collectively, the "ARG
REAL PROPERTY"). With respect to each such parcel of ARG Real Property:
(a) ARG or its relevant Subsidiary has good and marketable title to
the ARG Real Property owned by it and a valid leasehold interest in the ARG Real
Property leased to it, as the case may be, free and clear of any Liens, except
for Permitted Liens;
(b) except for ARG Leases, there are no leases, subleases, licenses,
concessions, or other agreements entered into by ARG or any of its Subsidiaries
granting to any Person or Persons the right of use or occupancy to any portion
of the parcel of any of such ARG Real Property;
(c) [intentionally omitted];
(d) all of the real property used by ARG and its Subsidiaries in the
conduct of its business is included in the ARG Real Property, and is sufficient
to operate the Arby's quick service restaurant business as currently conducted;
(e) except for the ARG Restaurants (which are addressed in Section
3.25), ARG and its Subsidiaries have not received notice and, to the Knowledge
of Triarc, there are no pending, threatened or contemplated condemnation
proceeding or proceedings affecting any of the ARG Real Property or any part
thereof or of any sale or other disposition of the ARG Real Property or any part
thereof in lieu of condemnation, in each case that, individually or in the
aggregate, is, or is reasonably likely to be, material to ARG and its
Subsidiaries, taken as a whole; and
(f) no portion of any material ARG Real Property has suffered any
material damage by fire or other casualty which is uninsured or has not
heretofore been completely repaired and restored in full.
Section 3.19 PERSONAL PROPERTY. ARG and its Subsidiaries have good
and marketable title to, or a valid and enforceable leasehold interest in, all
material
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tangible personal property or assets owned, used or held for use by them.
Neither ARG's nor any of its Subsidiaries' ownership of or leasehold interest in
any such personal property or assets is subject to any Liens, except for
Permitted Liens and Liens securing Indebtedness of Sybra and its Subsidiaries.
Except for normal wear and tear and except to the extent addressed in Section
3.25(a), the machinery, equipment, fixtures and improvements of ARG and its
Subsidiaries necessary for and material to the continued conduct of their
respective businesses are in good operating condition and in a state of
reasonable maintenance and repair.
Section 3.20 SUFFICIENCY OF ASSETS. ARG and its Subsidiaries taken
as a whole have, directly or indirectly, ownership of or rights in all of the
assets necessary to conduct the Arby's restaurant business of ARG and its
Subsidiaries in all material respects as currently conducted.
Section 3.21 INSURANCE. ARG and its Subsidiaries maintain (or have
maintained on their behalf), and have maintained (or have maintained on their
behalf) without interruption, policies or binders of insurance covering risks
and events and in amounts adequate for their respective businesses and
operations and customary in the industry in which they operate. There are no
material claims by ARG or any Subsidiary of ARG pending under any of such
policies or bonds in excess of $100,000 as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds or
in respect of which such underwriters have reserved their rights.
Section 3.22 INVENTORY. The Inventory of ARG and its Subsidiaries
consists of items which are in all material respects of a quality and quantity
usable and salable in the ordinary course of business consistent with past
practice.
Section 3.23 ACCOUNTS RECEIVABLE. All Accounts Receivable that are
reflected on the ARG Financial Statements or on the accounting records of ARG
and its Subsidiaries as of the Closing Date represent or will represent valid
obligations arising from sales actually made or services actually performed by
ARG or its Subsidiaries in the ordinary course of business. There is no contest,
claim, defense or right of setoff, other than returns in the ordinary course of
business of ARG or its Subsidiaries, under any Contract with any account debtor
of an Account Receivable relating to the amount or validity of such Account
Receivable, other than any of the foregoing asserted after the date hereof and
where the result, individually or in the aggregate, is not and would not
reasonably be expected to be material to ARG and its Subsidiaries, taken as a
whole.
Section 3.24 SUPPLIERS. No supplier or distributor that is identified
with an asterisk on Section 3.12(a) of the Triarc Disclosure Letter has reduced
or otherwise discontinued or adversely modified the terms on which such products
or services are supplied, or threatened to reduce or discontinue or adversely
modify the terms in connection with supplying such items to ARG or its
Subsidiaries, in a manner that is or would be material to ARG and its
Subsidiaries, taken as a whole.
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Section 3.25 ARG RESTAURANTS.
(a) Section 3.25(a) of the Triarc Disclosure Letter sets forth a
true and complete list of the Restaurants owned or operated by ARG or any of its
Subsidiaries (which Section may be updated by Triarc prior to the Closing Date
to reflect any additions or deletions thereto after the date hereof) (the "ARG
RESTAURANTS"). The stores, equipment, machinery, fixtures and improvements owned
by ARG and its Subsidiaries or otherwise used by ARG and its Subsidiaries in
connection with the operation of the ARG Restaurants are (as to physical plant
and structure) structurally sound, in good operating condition and repair,
except for ordinary wear and tear, and are adequate for the uses to which they
are being put.
(b) To the Knowledge of Triarc, neither ARG nor any of its
Subsidiaries has received written notice that any of the buildings and
structures or any appurtenances thereto or equipment therein or the operation or
maintenance thereof related to the ARG Restaurants violates in any material
respect any restrictive covenants, any insurance requirements or any applicable
federal, state or local Law, ordinance or zoning regulation. To the Knowledge of
Triarc, none of the property nor any buildings, structures or improvements
thereon related to the ARG Restaurants violate in any material respect any
building, fire, environmental or other Laws.
(c) No Governmental Entity has issued or threatened, in writing,
to issue any written notice or order that materially affects the use of the
property of an ARG Restaurant as presently utilized and neither ARG nor any of
its Subsidiaries has received written notice from any other third party of any
adverse claim that would materially affect the current operations of an ARG
Restaurant. There are no condemnation or eminent domain proceedings pending or,
to the Knowledge of Triarc, threatened, against the property where any ARG
Restaurant is located, and neither ARG nor any of its Subsidiaries has received
written notice of the intent of any Governmental Entity to take or use the
property or any part thereof.
Section 3.26 FRANCHISEES.
(a) Set forth on Section 3.26(a) of the Triarc Disclosure Letter
is a list of all of the restaurants which are branded as "Arby's" and are not
owned or operated by ARG or any of its Subsidiaries and each of which is
operated pursuant to a franchise agreement with ARG or one of its Subsidiaries
(which Section may be updated by Triarc prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof) (each such restaurant, a
"FRANCHISED RESTAURANT", and each such franchise and license agreement, a
"FRANCHISE AGREEMENT"), indicating with respect to each Franchise Agreement: (i)
the name of the franchisee ("FRANCHISEE") or licensee ("LICENSEE"); (ii) the
unit numbers; (iii) the city and state; (iv) the royalty rate; and (v) the
termination date.
(b) Set forth on Section 3.26(b) of the Triarc Disclosure Letter
is a list of each development agreement for Restaurants (which Section may be
updated by Triarc prior to the Closing Date to reflect any additions or
deletions thereto after the date hereof)
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(collectively, the "DEVELOPMENT AGREEMENTS"), indicating with respect to each
Development Agreement: (i) the name of the developer; and (ii) the annual
commitments.
(c) Each Franchise Agreement and Development Agreement is valid,
binding, in full force and effect and enforceable in accordance with its terms
against ARG or the applicable Subsidiary of ARG. ARG or the applicable
Subsidiary of ARG is not in material breach or material default under any such
Franchise Agreement or Development Agreement.
(d) Section 3.26(d) of the Triarc Disclosure Letter sets forth a
true and complete list of (i) all jurisdictions, including without limitation,
all states in the United States, provinces in Canada or other countries, in
which ARG or any of its Affiliates is currently registered to sell franchises;
and (ii) all jurisdictions, including all states in the United States and
provinces in Canada, in which ARG or any of its Affiliates is exempt from the
registration provisions of such jurisdiction's franchise registration law. The
jurisdictions in which ARG and its Affiliates are so registered are the only
jurisdictions in which they are required to be registered in light of the rights
granted under the Franchise Agreements and Development Agreements, except where
the failure to be so registered has not been and would not reasonably be
expected to be, individually or in the aggregate, material to ARG and its
Subsidiaries, taken as a whole.
(e) Each offer and sale of a franchise for a Franchised Restaurant
since December 31, 2001 has been made in compliance in all material respects
with applicable Laws, and since such offers or sales, ARG and its Affiliates
have not committed any material violation of any applicable Laws with respect to
the operation of the Franchised Restaurants or the administration of any
Franchise Agreement or Development Agreement. Without limitation of the
foregoing, since December 31, 2001, no right of rescission has been asserted
with respect to any Franchise Agreement or Development Agreement.
Section 3.27 TRANSACTIONS WITH AFFILIATES. Except for existing
employment agreements with ARG or any of its Subsidiaries or existing ARG
Employee Plans or existing Contracts entered into between ARG and its
Subsidiaries, neither ARG nor any of its Subsidiaries is a party to any Contract
with Triarc or any of its Subsidiaries (other than ARG or any of its
Subsidiaries), any director, officer or employee of Triarc or any of its
Subsidiaries or, to the Knowledge of Triarc, any Affiliates or Immediate Family
Members of any director, officer or employee of Triarc or any of its
Subsidiaries. Section 3.27 of the Triarc Disclosure Letter also sets forth a
true and complete list of all outstanding loans or extensions of credit (other
than travel advances made in the ordinary course of business to directors,
officers or employees) that ARG or any of its Subsidiaries has made directly or
indirectly to Triarc or any of its Subsidiaries (other than ARG or any of its
Subsidiaries), any director, officer or employee of ARG or any of its
Subsidiaries or any of their respective Affiliates or Immediate Family Members,
providing with respect to each such loan or extension of credit the outstanding
principal amount, the amount of accrued and unpaid interest as of the date
hereof, the interest rate and final maturity date (which Section may be updated
by Triarc prior to the Closing Date to reflect (x) any
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additions or deletions thereto after the date hereof and (y) payments of
principal and interest and accrual of interest on such Indebtedness during the
period from the date hereof through the Closing Date).. Each Contract and loan
or extension of credit set forth or required to be set forth in Section 3.27 of
the Triarc Disclosure Letter is hereinafter referred to as an "ARG RELATED PARTY
ARRANGEMENT."
Section 3.28 SUFFICIENT FUNDS.
(a) Arby's Restaurant Holdings, LLC and ARG have received executed
commitment letters dated May 27, 2005 (together with the respective exhibits and
attachments thereto, the "DEBT FINANCING DOCUMENTS") from Citicorp North
America, Inc., Citigroup Global Markets Inc. and the other lenders parties
thereto (the "LENDERS") pursuant to which the Lenders have committed, subject to
the terms and conditions set forth therein and to be contained in the definitive
documentation referred to therein, to provide Arby's Restaurant Holdings, LLC
and ARG with an aggregate of $700 million of debt financing under available
senior secured credit facilities (the "DEBT FINANCING"). True and complete
copies of the Debt Financing Documents have been furnished to the RTM
Representatives.
(b) Triarc has, and at the First Effective Time will have sufficient
cash and cash equivalents to pay not less than $135 million of the Aggregate
Cash Consideration.
Section 3.29 BROKERS AND FINDERS. No broker, finder or investment
banker other than as set forth on Section 3.29 of the Triarc Disclosure Letter
is entitled to any brokerage, finder's or other fee or commission in connection
with the RTM Transactions or the other transactions contemplated by this
Agreement or the Ancillary Agreements based upon arrangements made by or on
behalf of Triarc or any of its Subsidiaries. Triarc has made available to RTMRG
a correct and complete copy of all agreements between Triarc and those Persons
set forth on Section 3.29 of the Triarc Disclosure Letter under which such
Persons would be entitled to any payment relating to the RTM Transactions or
such other transactions, which agreements shall not be amended or otherwise
modified after the date hereof without the prior written consent of RTMRG.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES
THE FOLLOWING REPRESENTATIONS AND WARRANTIES OF THE TRIARC PARTIES (AND
THE CORRESPONDING PORTIONS OF THE TRIARC DISCLOSURE LETTER) SHALL AUTOMATICALLY
AND IMMEDIATELY TERMINATE AND EXPIRE AND BE OF NO FURTHER FORCE AND EFFECT FOR
ANY PURPOSE OF THIS AGREEMENT OR OTHERWISE UPON THE CONVERSION OF SHARES OF
TRIARC B-2 COMMON STOCK ISSUED UNDER THE TRIARC B-2 ELECTION INTO SHARES OF
TRIARC B-1 COMMON STOCK AS A RESULT OF THE OCCURRENCE OF THE TRIGGER EVENT.
Except as otherwise set forth in the Triarc Disclosure Letter, which
Triarc Disclosure Letter is arranged in Sections corresponding to the Sections
of this
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Agreement, the Triarc Parties jointly and severally represent and warrant to
RTMRG that:
Section 4.01 ORGANIZATION AND QUALIFICATION OF TRIARC PARTIES. Each
of the Triarc Parties is a limited liability company or corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation or organization and has the corporate power and
authority to own or lease its assets and to carry on its business substantially
as it is being conducted on the date hereof. Each of the Triarc Parties is duly
qualified and licensed to do business and is in good standing in each
jurisdiction where the ownership or operation of its property and assets or the
conduct of its business requires such qualification, except where the failure to
be so qualified or in good standing has not had and would not reasonably be
expected to have, individually or in the aggregate, a Triarc Material Adverse
Effect. Triarc has made available to RTMRG correct and complete copies of the
articles of incorporation and bylaws of each of the Triarc Parties (as amended
to the date hereof).
Section 4.02 AUTHORIZATION OF TRIARC PARTIES; ENFORCEABILITY. Each
of the Triarc Parties has all requisite limited liability company or corporate
power and authority, and has taken all limited liability company or corporate
action necessary in order to execute, deliver and perform its obligations under
this Agreement and each of the Ancillary Agreements to which it is a party and
to consummate the transactions contemplated by this Agreement and each such
Ancillary Agreement. This Agreement and each of the Ancillary Agreements to
which it is a party have been duly executed and delivered by each of the Triarc
Parties and constitute the legal, valid and binding obligation of each of the
Triarc Parties, enforceable in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors'
rights, and to general equity principles.
Section 4.03 CAPITALIZATION OF TRIARC.
(a) As of the close of business on May 16, 2005, the authorized
capital stock of Triarc consists solely of (i) 100,000,000 shares of Triarc
Class A Common Stock, (ii) 150,000,000 shares of Triarc Class B Common Stock, of
which 100,000,000 shares have been designated as Triarc Class B-1 Common Stock
and (iii) 100,000,000 shares of Preferred Stock, par value $0.10 per share.
(b) As of the close of business on May 16, 2005, (i) 23,902,892
shares of Triarc Class A Common Stock and 42,663,278 shares of Triarc Class B-1
Common Stock were issued and outstanding, (ii) 5,647,771 shares of Triarc Class
A Common Stock and 16,438,048 shares of Triarc Class B-1 Common Stock were held
in treasury by Triarc, (iii) 8,335,250 shares of Triarc Class A Common Stock and
16,243,773 shares of Triarc Class B-1 Common Stock were reserved for issuance
under the Triarc Option Plans and (iv) 4,375,000 shares of Triarc Class A Common
Stock and 8,750,000 shares of Triarc Class B-1 Common Stock were reserved for
issuance upon conversion of the Triarc Convertible Notes. Except as set forth in
this Section 4.03(b), as of the close of
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business on May 16, 2005, no shares of capital stock of Triarc were issued,
reserved for issuance or outstanding.
(c) All shares of Triarc Class B-1 Common Stock to be issued
pursuant to this Agreement and, if the Triarc B-2 Election shall have been made,
upon conversion of shares of Triarc Class B-2 Common Stock, and all shares of
Triarc Class B-2 Common Stock to be issued pursuant to this Agreement, upon
issuance (i) will be duly authorized, validly issued, fully paid and
non-assessable and (ii) will not be subject to pre-emptive rights.
(d) Except as set forth in Section 4.03(b), there are no warrants,
calls, conversion rights, stock appreciation rights, redemption rights,
repurchase rights or other rights, agreements, arrangements or commitments to
which Triarc or any of its Subsidiaries is a party (A) relating to the issued or
unissued capital stock or other securities of Triarc or (B) obligating Triarc to
issue or sell any shares of its capital stock or other securities.
(e) Except as set forth in Section 3.03(e) of the Triarc Disclosure
Letter, to the Knowledge of Triarc, there are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital stock of
Triarc. Other than the Triarc Convertible Notes, Triarc does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or are convertible into or exercisable for
securities having the right to vote) with the stockholders of Triarc on any
matters.
Section 4.04 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by each of the Triarc Parties of this Agreement and each of the
Ancillary Agreements to which it is a party do not, and the consummation by each
of the Triarc Parties of the transactions contemplated hereby and thereby will
not, require any consent, approval or other authorization of, or filing with or
notification to, any Governmental Entity, other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 4.05 NON-CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings, the
execution, delivery and performance by each of the Triarc Parties of this
Agreement and each of the Ancillary Agreements to which it is a party do not,
and the consummation by each of the
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Triarc Parties of the transactions contemplated hereby and thereby will not (a)
contravene, conflict with, or result in any violation or breach of, the articles
of incorporation or by-laws (or comparable organizational instruments) of any of
the Triarc Parties, (b) contravene or conflict with, or result in any violation
or breach of, in any material respect, any Laws, Orders or Permits applicable to
Triarc or any of its Subsidiaries or by which any assets of Triarc and its
Subsidiaries are bound, assuming that all consents, approvals, authorizations,
filings and notifications described in Section 3.05, Section 4.04 and Section
5.05 have been obtained or made, (c) result in any violation or breach of, or
constitute a default (with or without notice or lapse of time or both) under,
(x) any Contract filed with the Triarc SEC Reports (as defined below) or (y) any
other Contract to which Triarc or any of its Subsidiaries is a party or by which
any assets of Triarc or any of its Subsidiaries is bound, other than in the case
of this clause (y) any such violation, breach or default that would not
reasonably be expected to have, individually or in the aggregate, a Triarc
Material Adverse Effect, (d) require any consent, approval or other
authorization of, or filing with or notification to, any Person under, (x) any
Contract filed with the Triarc SEC Reports or (y) any other Contract to which
Triarc or any of its Subsidiaries is a party or by which any assets of Triarc or
any of its Subsidiaries is bound, other than in the case of this clause (y) any
such consent, approval, authorization, filing or notification that, if not
obtained or made, would not reasonably be expected to have, individually or in
the aggregate, a Triarc Material Adverse Effect, (e) give rise to any
termination, cancellation, amendment, modification or acceleration of any rights
or obligations under, (x) any Contract filed with the Triarc SEC Reports or (y)
any other Contract to which Triarc or any of its Subsidiaries is a party or by
which any assets of Triarc or any of its Subsidiaries is bound, other than in
the case of this clause (y) any such termination, cancellation, amendment,
modification or acceleration that would not reasonably be expected to have,
individually or in the aggregate, a Triarc Material Adverse Effect, or (f) cause
the creation or imposition of any Liens (other than Permitted Liens) on any
material assets of any of Triarc or any of its Subsidiaries.
Section 4.06 SEC REPORTS. Triarc has filed all forms, reports,
schedules, statements and other documents required to be filed by Triarc with
the SEC since December 31, 2001 and prior to the date hereof. All such forms,
reports, schedules, statements and other documents (including those that Triarc
may file after the date hereof until the Closing) are referred herein as the
"TRIARC SEC REPORTS." The Triarc SEC Reports (i) at the time filed, were or will
be prepared in compliance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and (ii) did not or will
not at the time they were or are filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Triarc SEC Reports or necessary in order to make the statements in such Triarc
SEC Reports, in light of the circumstances under which they were made, not
misleading, except to the extent that such statements have been modified or
superseded by a later-filed Triarc SEC Report.
Section 4.07 TRIARC FINANCIAL STATEMENTS. The (i) audited
consolidated balance sheet as of January 2, 2005 and December 28, 2003 and
statements of income,
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stockholders' equity and cash flows for the fiscal years ended January 2, 2005,
December 28, 2003 and December 29, 2002, for Triarc and its Subsidiaries (such
statements, together with the footnotes related thereto, being the "TRIARC
AUDITED FINANCIAL STATEMENTS") and (ii) unaudited consolidated balance sheet as
of April 3, 2005 and January 2, 2005 and statements of income and cash flows for
the fiscal periods ended April 3, 2005 and March 28, 2004, for Triarc and its
Subsidiaries included or incorporated by reference in the Triarc SEC Reports
(such statements being the "TRIARC UNAUDITED FINANCIAL STATEMENTS" and together
with the Triarc Audited Financial Statements, the "TRIARC FINANCIAL STATEMENTS")
were prepared in accordance with GAAP applied on a consistent basis (except as
may be indicated in the notes to the Triarc Financial Statements and except for
the absence of footnotes in the case of the Triarc Unaudited Financial
Statements) and fairly present, in all material respects, the consolidated
financial position of Triarc and its Subsidiaries as of the dates thereof and
their consolidated results of operations and cash flows for the periods then
ended (subject, in the case of the Triarc Unaudited Financial Statements, to
normal year-end adjustments).
Section 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except to the
extent relating to the transactions contemplated by this Agreement, since
January 2, 2005 (i) Triarc and its Subsidiaries taken as a whole have in all
material respects conducted their businesses in the ordinary course of business
consistent with past practice and (ii) there has not occurred any event, and
there does not exist any condition or set of circumstances, that has had or
could reasonably be expected to have, individually or in the aggregate, a Triarc
Material Adverse Effect.
Section 4.09 ABSENCE OF UNDISCLOSED LIABILITIES. None of Triarc and
its Subsidiaries has any Liabilities that have had or could reasonably be
expected to have, individually or in the aggregate, a Triarc Material Adverse
Effect, except for (i) Liabilities set forth in the Triarc Financial Statements
or in Triarc SEC Reports filed at least five Business Days prior to the date of
this Agreement, (ii) Liabilities which have arisen after January 2, 2005, in the
ordinary course of business consistent with past practice, (iii) Liabilities set
forth in Section 4.09 of the Triarc Disclosure Letter and (iv) Liabilities that
are the subject of any other representation or warranty contained in this
Article IV and are specifically disclosed pursuant to such representation or
warranty or are not required to be disclosed because such other representation
or warranty is limited or qualified with respect to dollar amount, Knowledge of
Triarc, materiality or Triarc Material Adverse Effect.
Section 4.10 LEGAL ACTIONS. Section 4.10 of the Triarc Disclosure
Letter sets forth a true and complete list of all Legal Actions pending or, to
the Knowledge of Triarc, threatened against (a) Triarc or any of its
Subsidiaries or (b) any director, officer or employee of Triarc or any of its
Subsidiaries or other Person for whom Triarc or any of its Subsidiaries may be
liable, other than in the case of clause (a) or (b) any such Legal Actions
commenced or, to the Knowledge of Triarc, threatened after the date of this
Agreement and prior to the Closing Date that have not resulted in and would not
reasonably be expected to result in, individually or in the aggregate, (x)
Losses to Triarc
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and its Subsidiaries in excess of $10 million or (y) Triarc or any of its
Subsidiaries being bound by any material restriction (other than customary
confidentiality restrictions). Neither Triarc nor any of its Subsidiaries is
subject to or bound by any outstanding Order that could reasonably be expected
to have, individually or in the aggregate, a Triarc Material Adverse Effect.
Section 4.11 SUFFICIENT FUNDS.
(a) Arby's Restaurant Holdings, LLC and ARG have received the Debt
Financing Documents from the Lenders pursuant to which the Lenders have
committed, subject to the terms and conditions set forth therein and to be
contained in the definitive documentation referred to therein, to provide Arby's
Restaurant Holdings, LLC and ARG with the Debt Financing. True and complete
copies of the Debt Financing Documents have been furnished to the RTM
Representatives.
(b) Triarc has, and at the First Effective Time will have sufficient
cash and cash equivalents to pay not less than $135 million of the Aggregate
Cash Consideration.
Section 4.12 BROKERS AND FINDERS. No broker, finder or investment
banker other than as set forth on Section 3.29 of the Triarc Disclosure Letter
is entitled to any brokerage, finder's or other fee or commission in connection
with the RTM Transactions or the other transactions contemplated by this
Agreement or the Ancillary Agreements based upon arrangements made by or on
behalf of Triarc or any of its Subsidiaries. Triarc has made available to RTMRG
a correct and complete copy of all agreements between Triarc and those Persons
set forth on Section 3.29 of the Triarc Disclosure Letter under which such
Persons would be entitled to any payment relating to the RTM Transactions or
such other transactions, which agreements shall not be amended or otherwise
modified after the date hereof without the prior written consent of RTMRG.
Section 4.13 CERTAIN TAX MATTERS.
(a) As of the date hereof and as of the Closing Date, Triarc does
not have any plan or intention to sell or otherwise dispose of more than 50% of
the assets of RTMRG acquired pursuant to the Mergers, except for dispositions
made in the ordinary course of business, transfers pursuant to the Triarc
Contributions or transfers described in Section 368(a)(2)(C) of the Code or
Treasury Regulation ss. 1.368-2(k).
(b) As of the date hereof and as of the Closing Date, Triarc (or a
member of Triarc's qualified group as defined in Treasury Regulation ss.
1.368-1(d)(4)(ii)) intends to continue the historic business of RTMRG and its
Subsidiaries or use a significant portion of their historic business assets in a
business.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF RTMRG
Except as otherwise set forth in the disclosure letter delivered on or
prior to the date of this Agreement by RTMRG to Triarc (the "RTMRG DISCLOSURE
LETTER"), which RTMRG Disclosure Letter is arranged in Sections corresponding to
the Sections of this Agreement, RTMRG represents and warrants to the Triarc
Parties that:
Section 5.01 ORGANIZATION AND QUALIFICATION OF RTMRG. RTMRG is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has the corporate power and authority
to own or lease its assets and to carry on its business substantially as it is
being conducted on the date hereof. RTMRG is duly qualified and licensed to do
business and is in good standing in each jurisdiction where the ownership or
operation of its property and assets or the conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing has not had and could not reasonably be expected to have, individually
or in the aggregate, a RTMRG Material Adverse Effect. RTMRG has made available
to Triarc correct and complete copies of the articles of incorporation and
bylaws of RTMRG (as amended to the date hereof).
Section 5.02 AUTHORIZATION OF RTMRG; ENFORCEABILITY. RTMRG has all
requisite corporate power and authority, and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement and each of the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated by this Agreement and each such
Ancillary Agreement. This Agreement and each of the Ancillary Agreements to
which it is a party have been duly executed and delivered by RTMRG and
constitute the legal, valid and binding obligation of RTMRG, enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors' rights, and to general equity
principles.
Section 5.03 CAPITALIZATION OF RTMRG.
(a) The authorized capital stock of RTMRG consists of 100,000,000
shares of RTMRG Common Stock, of which 92,862,239 are the only shares of RTMRG
Common Stock issued and outstanding on the date hereof. All of the shares of
RTMRG Common Stock have been duly authorized and validly issued, are fully paid
and nonassessable. Except for outstanding RTMRG Options, there are no options,
warrants, calls, conversion rights, stock appreciation rights, redemption
rights, repurchase rights or other rights, agreements, arrangements or
commitments to which RTMRG or any of its Subsidiaries are a party (A) relating
to the issued or unissued capital stock or other securities of RTMRG or (B)
obligating RTMRG to issue or sell any shares of its capital stock or other
securities. There are no voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock of RTMRG. RTMRG
does not have any outstanding bonds, debentures, notes or other obligations the
holders of
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which have the right to vote (or convertible into or exercisable for securities
having the right to vote) with the shareholders of RTMRG on any matter.
(b) As of the date of this Agreement, RTMRG Options to acquire an
aggregate of 4,911,422 shares of RTMRG Common Stock have been granted to certain
RTMRG Employees. RTMRG has made available to Triarc correct and complete copies
of the RTMRG Options. Section 5.03 of the RTMRG Disclosure Letter sets forth a
correct and complete list of the following information, as of the date of this
Agreement, with respect to each RTMRG Option: (i) the name of the holder of that
option; (ii) the exercise price for that option; (iii) the number of shares of
RTMRG Common Stock subject to that option; and (iv) the dates on which that
option was granted, will vest and will expire.
Section 5.04 SUBSIDIARIES OF RTMRG.
(a) Section 5.04(a) of the RTMRG Disclosure Letter lists the name of
each direct and indirect Subsidiary of RTMRG, the type of entity, jurisdiction
of organization and the number and class and/or series of shares of capital
stock or similar equity interests of such Subsidiary that are outstanding, and
the identity of the record and beneficial holders thereof. Each Subsidiary of
RTMRG is duly organized or formed, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of organization or formation,
as the case may be, has the power and authority to own or lease its assets and
to carry on its business substantially as it is being conducted on the date
hereof, and is duly qualified and licensed to do business and is in good
standing, in each jurisdiction where the ownership or operation of its
properties and assets or the conduct of its business requires such
qualification, except where the failure to be so qualified, licensed or in good
standing has not had and would not reasonably be expected to have, individually
or in the aggregate, an RTMRG Material Adverse Effect. RTMRG has made available
to Triarc correct and complete copies of the articles of incorporation and
bylaws of each Subsidiary of RTMRG or comparable organizational instruments (as
amended to the date hereof). Section 5.04(a) of the RTMRG Disclosure Letter sets
forth all interests of RTMRG and its Subsidiaries in Persons other than
Subsidiaries of RTMRG (the "RTMRG INVESTMENTS"), listing the name of such
Person, the type of entity, jurisdiction of organization and the number and
class, amount and/or series of debt or equity interests of such Persons held by
RTMRG, its Subsidiaries and each other holder of any equity or other ownership
interest in such Person. RTMRG and its Subsidiaries have good and valid title,
free and clear of any Liens, to the Investments.
(b) All shares of capital stock or similar equity interests of each
Subsidiary of RTMRG are owned by RTMRG or the applicable Subsidiary of RTMRG
free and clear of all Liens, and all such shares of capital stock have been duly
authorized and validly issued and are fully paid and nonassessable and all other
such similar equity interests have been duly authorized and validly issued and
are fully paid. Except as contemplated hereby, neither RTMRG nor any of its
Subsidiaries has any obligation to sell, transfer or assign or has entered into
a Contract regarding the sale, transfer or assignment of any of its rights,
securities or interests in any Subsidiary of RTMRG or any of the other equity
interests owned by RTMRG or any Subsidiary of RTMRG. There are
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no preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, agreements, arrangements or
commitments to issue or sell any shares of capital stock, membership interests
or other securities of any Subsidiary of RTMRG or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any Person a
right to subscribe for or acquire, any securities of any Subsidiary of RTMRG,
and no securities or obligations evidencing such rights are authorized, issued
or outstanding. There are no voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock or membership
interests of any Subsidiary of RTMRG. No Subsidiary of RTMRG has outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or convertible into or exercisable for securities having the
right to vote) with the shareholders or members of any Subsidiary of RTMRG on
any matter.
Section 5.05 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery and
performance by RTMRG of this Agreement and each of the Ancillary Agreements to
which it is a party do not, and the consummation by RTMRG of the transactions
contemplated hereby and thereby will not, require any consent, approval or other
authorization of, or filing with or notification to, any Governmental Entity,
other than:
(a) the filing of the First Certificate of Merger with the Secretary
of State of the State of Georgia and the Second Certificate of Merger with the
Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 5.06 NON-CONTRAVENTION. Except with respect to Contracts to
be satisfied in full or terminated in connection with the Debt Refinancings, the
execution, delivery and performance by RTMRG of this Agreement and each of the
Ancillary Agreements to which it is a party do not, and the consummation by
RTMRG of the transactions contemplated hereby and thereby will not (a)
contravene, conflict with, or result in any violation or breach of, the articles
of incorporation or by-laws (or comparable organizational instruments) of RTMRG
or any of its Subsidiaries, (b) contravene or conflict with, or result in any
violation or breach of, in any material respect, any Laws, Orders or Permits
applicable to RTMRG or any of its Subsidiaries or by which any assets of RTMRG
or any of its Subsidiaries are bound, assuming that all consents, approvals,
authorizations, filings and notifications described in Section 3.05, Section
4.04 and Section 5.05 have been obtained or made, (c) result in any violation or
breach of, or constitute a default (with or without notice or lapse of time or
both) under, (x) any RTMRG Material Contract or (y) any other Contract to which
RTMRG or any of its Subsidiaries is a party or by which any assets of RTMRG or
any of its Subsidiaries are bound, other than in the case of this clause (y) any
such violation, breach or default that would not reasonably be expected to be,
individually or in the aggregate, material to
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RTMRG and its Subsidiaries, taken as a whole, (d) require any consent, approval
or other authorization of, or filing with or notification to, any Person under
(x) any RTMRG Material Contract or (y) any other Contract to which RTMRG or any
of its Subsidiaries is a party or by which any assets of RTMRG or any of its
Subsidiaries are bound, other than in the case of this clause (y) any such
consent, approval, authorization, filing or notification that, if not obtained
or made, would not reasonably be expected to be, individually or in the
aggregate, material to RTMRG and its Subsidiaries, taken as a whole, (e) give
rise to any termination, cancellation, amendment, modification or acceleration
of any rights or obligations under (x) any RTMRG Material Contract or (y) any
other Contract to which RTMRG or any of its Subsidiaries is a party or by which
any assets of RTMRG or any of its Subsidiaries are bound, other than in the case
of this clause (y) any such termination, cancellation, amendment, modification
or acceleration that would not reasonably be expected to be, individually or in
the aggregate, material to RTMRG and its Subsidiaries, taken as a whole, or (f)
cause the creation or imposition of any Liens (other than Permitted Liens) on
any material assets of RTMRG or any of its Subsidiaries.
Section 5.07 RESTATED COMBINED RTM FINANCIAL STATEMENTS; INTERNAL
CONTROLS; INDEBTEDNESS.
(a) Schedule 5.07(a) of the RTMRG Disclosure Letter sets forth the
following combined financial statements of the RTM Parties and their
Subsidiaries (collectively, the "RESTATED COMBINED RTM FINANCIAL STATEMENTS"):
(i) the restated audited combined balance sheets as of May 30, 2004 and May 25,
2003 and statements of income, net capital deficiency and cash flows for the
fiscal years ended May 30, 2004, May 25, 2003 and May 26, 2002, for the RTM
Parties and their Subsidiaries (such statements, together with the footnotes
related thereto, being the "RESTATED COMBINED RTM AUDITED FINANCIAL STATEMENTS")
and (ii) the restated unaudited combined balance sheets as of March 6, 2005 and
May 30, 2004 and statements of income and retained earnings for the 40 weeks
ended March 6, 2005 and February 29, 2004 for the RTM Parties and their
Subsidiaries (such statements being the "RESTATED COMBINED RTM UNAUDITED
FINANCIAL STATEMENTS"). The Restated Combined RTM Financial Statements and (when
delivered) the 2005 RTM Audited Financials (x) have been (or will have been, in
the case of the 2005 RTM Audited Financials) prepared in accordance with GAAP
applied on a consistent basis (except as may be indicated in the notes to the
Restated Combined RTM Financial Statements or 2005 RTM Audited Financials, as
applicable, and except for the absence of footnotes in the case of the Restated
Combined RTM Unaudited Financial Statements); and (y) fairly present, in all
material respects, the combined financial position of the RTM Parties and their
Subsidiaries as of the dates thereof and their combined results of operations
and cash flows for the periods then ended (subject, in the case of the Restated
Combined RTM Unaudited Financial Statements, to normal year-end adjustments).
(b) RTMRG and each of its Subsidiaries maintains accurate books and
records reflecting its assets and liabilities and maintains proper and adequate
internal accounting controls which provide assurance that (i) transactions are
executed with management's authorization; (ii) transactions are recorded as
necessary to permit
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preparation of the consolidated financial statements of RTMRG and its
Subsidiaries and to maintain accountability for the consolidated assets of RTMRG
and its Subsidiaries; (iii) access to the assets of RTMRG and its Subsidiaries
is permitted only in accordance with management's authorization; (iv) the
reporting of the assets of RTMRG and its Subsidiaries is compared with existing
assets at regular intervals; and (v) accounts, notes and other receivables and
inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis.
RTMRG has heretofore made available to Triarc a true, complete and correct copy
of any disclosure (or, if unwritten, a summary thereof) by any Representative of
RTMRG or its Subsidiaries to RTMRG's independent auditors relating to (x) any
significant deficiencies in the design or operation of internal controls which
could adversely affect the ability of RTMRG or any of its Subsidiaries to
record, process, summarize and report financial data and any material weaknesses
in internal controls and (y) any fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
control over financial reporting of RTMRG or any of its Subsidiaries.
(c) Section 5.07(c) of the RTMRG Disclosure Letter sets forth a true
and correct list of (i) all Indebtedness of RTMRG or any of its Subsidiaries
(other than any Indebtedness owed by RTMRG or any of its Subsidiaries to RTMRG
or any of its Subsidiaries) and (ii) all Indebtedness owed by the Mrs. Winners
Obligors to be repaid in connection with the Debt Refinancings (which Section
may be updated by RTMRG prior to the Closing Date to reflect (x) any additions
or deletions thereto after the date hereof in compliance with Section 6.02 and
(y) payments of principal and interest and accrual of interest on such
Indebtedness during the period from the date hereof through the Closing Date).
The aggregate amount of prepayment penalties, premiums, make wholes, breakage
and other costs and expenses payable to the lenders as such of all such
Indebtedness solely on account of the repayment of such Indebtedness in the Debt
Refinancings will not exceed $20 million. Section 5.07(c) of the RTMRG
Disclosure Letter specifically identifies all Indebtedness of RTMRG or any of
its Subsidiaries or included in the Winners Indebtedness Amount that constitutes
RTM Non-Prepayable Debt. All such Indebtedness of the RTM Parties and their
Subsidiaries and the Mrs. Winners Obligors, other than the RTM Non-Prepayable
Debt, is permitted by its terms to be prepaid, or the holder thereof has
consented in writing (which consent is in full force and effect) to being
prepaid, in connection with the Debt Refinancings.
Section 5.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except to the
extent relating to the transactions contemplated by this Agreement, since May
30, 2004 (i) RTMRG and its Subsidiaries taken as a whole have in all material
respects conducted their businesses in the ordinary course of business
consistent with past practice and (ii) there has not occurred any event, and
there does not exist any condition or set of circumstances, that has had or
could reasonably be expected to have, individually or in the aggregate, an RTM
Material Adverse Effect.
Section 5.09 ABSENCE OF UNDISCLOSED LIABILITIES. None of RTMRG or its
Subsidiaries have any material Liabilities, except for (i) Liabilities set forth
in the Restated Combined RTM Financial Statements, (ii) Liabilities which have
arisen after May 30, 2004 in the ordinary course of business consistent with
past practice or in
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compliance with Section 6.02, (iii) Liabilities set forth in Section 5.09 of the
RTMRG Disclosure Letter and (iv) Liabilities that are (A) the subject of any
other representation or warranty contained in this Article V and are
specifically disclosed pursuant to such representation or warranty or are not
required to be disclosed because such other representation or warranty is
limited or qualified with respect to dollar amount, Knowledge of RTMRG or
materiality or (B) taken into account in the determination of the RTM Estimated
Net Liabilities or RTM Closing Net Liabilities.
Section 5.10 COMPLIANCE WITH LAWS; PERMITS.
(a) Since December 31, 2001, except for matters specifically
addressed by Section 5.15 (last sentence only), Section 5.16 or Section 5.25(b),
(i) RTMRG and its Subsidiaries have conducted their respective businesses in
compliance in all material respects with applicable Law; and (ii) neither RTMRG
nor any of its Subsidiaries has received any notice or other communication
(whether oral or written) from any Governmental Entity or any other Person
regarding any actual, alleged, possible, or potential failure to comply in any
material respect with any applicable Laws.
(b) RTMRG and its Subsidiaries hold all material Permits issued or
provided by Governmental Entities under all Laws, which are necessary for them
to own their assets or operate their businesses as currently conducted (the
"RTMRG PERMITS"). There have been no material misstatements or omissions in
connection with any RTMRG Permit that, individually or in the aggregate, would
be reasonably likely to result in the revocation, nonrenewal, suspension or
adverse modification of such RTMRG Permit except for such revocations,
non-renewals, suspensions or adverse modifications that have not been and would
not reasonably be expected to be, individually or in the aggregate, material to
RTMRG and its Subsidiaries, taken as a whole. There is not pending, nor to the
Knowledge of RTMRG, threatened, against RTMRG or any of its Subsidiaries, any
application, action, petition, objection or other pleading, or any proceeding,
with any Governmental Entity which questions or contests the validity of, or any
rights of the holder under, or nonrenewal or suspension of any RTMRG Permit.
Section 5.11 LEGAL ACTIONS. Section 5.11 of the RTMRG Disclosure
Letter sets forth a true and complete list of all Legal Actions pending or, to
the Knowledge of RTMRG, threatened against (a) RTMRG or any of its Subsidiaries
or (b) any director, officer or employee of RTMRG or any of its Subsidiaries or
other Person for whom RTMRG or any of its Subsidiaries may be liable, other than
in the case of clause (a) or (b) any such Legal Actions commenced or, to the
Knowledge of RTMRG, threatened after the date of this Agreement and prior to the
Closing Date that have not resulted in and would not reasonably be expected to
result in, individually or in the aggregate, (x) Losses to RTMRG and its
Subsidiaries in excess of $1 million or (y) RTMRG or any of its Subsidiaries
being bound by any material restriction (other than customary confidentiality
restrictions). Neither RTMRG nor any of its Subsidiaries is subject to or bound
by any outstanding Order that is material to RTMRG and its Subsidiaries taken as
a whole.
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Section 5.12 CONTRACTS.
(a) Section 5.12(a) of the RTMRG Disclosure Letter lists the
following Contracts to which RTMRG or any of its Subsidiaries is a party and
which are outstanding (which Section may be updated by RTMRG prior to the
Closing Date to reflect any additions or deletions thereto after the date hereof
in compliance with Section 6.02) (collectively, the "RTMRG MATERIAL CONTRACTS"):
(i) any Contract expressly requiring capital expenditures
involving consideration in excess of $50,000 in any twelve month period;
(ii) any Contract which restricts or limits, in any material
respect, the ability of RTMRG or any of its Subsidiaries to freely engage in any
aspect of the quick service restaurant business whether as franchisor or
owner/operator, or to employ any individuals (other than any confidentiality
agreement entered into in connection with a potential acquisition containing any
such restriction or limitation to employ any individuals);
(iii) any collective bargaining agreement;
(iv) any Contract which involved payments from RTMRG or any
of its Subsidiaries of more than $250,000 to any Person supplying food or paper
products or distribution services to any of the RTM Parties or any of their
Subsidiaries during the twelve-month period ended May 30, 2004;
(v) any Contract which involved payments from RTMRG or any
of its Subsidiaries of more than $100,000 to any Person supplying advertising
services or marketing services or materials to any of the RTM Parties or any of
their Subsidiaries during the twelve-month period ended May 30, 2004;
(vi) any Contract which involved payments to RTMRG or any
of its Subsidiaries of more than $100,000 from any Person supplying beverage
products to any of the RTM Parties or any of their Subsidiaries during the
twelve-month period ended May 30, 2004;
(vii) any Contract relating to the management or control of
any Person in which RTMRG or any of its Subsidiaries owns any equity securities
other than direct and indirect wholly owned Subsidiaries of RTMRG;
(viii) any Contract relating to the employment of any employee,
and any Contract pursuant to which RTMRG or any of its Subsidiaries is or may
become obligated to make any severance, termination, bonus or relocation payment
or any other payment (other than payments in respect of salary) in excess of
$125,000, to any current or former employee, officer or director;
(ix) any Contract which provides for indemnification by
RTMRG or any of its Subsidiaries of (A) any officer, director or employee of any
of the RTM Parties or any of their Subsidiaries or (B) any agent of the RTM
Parties or any of
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their Subsidiaries or any other Person that, in the case of this clause (B), has
resulted in or would reasonably be expected to result in, individually or in the
aggregate, material Liabilities to RTMRG or any of its Subsidiaries;
(x) any Contract relating to any Indebtedness, guarantying
the performance of any Person or guarantying any Indebtedness;
(xi) any Contract involving a purchase price of $50,000 or
more under which the closing of the transactions contemplated thereby has not
occurred or under which there remains outstanding obligations and which relates
to the acquisition by RTMRG or any of its Subsidiaries of any operating business
or the capital stock or other equity securities of any other Person, or the sale
by RTMRG or any of its Subsidiaries of any operating business or the capital
stock or other equity securities of any former Subsidiary of RTMRG;
(xii) any partnership or joint venture agreement or other
Contract involving a sharing of profits, losses, costs or Liabilities with any
other Person;
(xiii) any Contract under which RTMRG or any of its
Subsidiaries uses or occupies or has the right to use or occupy any real
property (collectively, the "RTMRG REAL PROPERTY LEASES") (and Section
5.12(a)(xiii) of the RTMRG Disclosure Letter sets forth a true and complete
summary of the following terms of each such RTMRG Real Property Lease: (1) the
lessee; (2) the unit number; (3) the monthly rental rate; (4) the monthly
operating expenses payable to the landlord; (5) the monthly rental taxes; (6)
the commencement date and the termination date; (7) any assignment or change in
control provisions; and (8) any guaranty by a Person other than an RTM Party or
their Subsidiaries);
(xiv) any Contract under which RTMRG or any of its
Subsidiaries grants to any Person or Persons the right of use or occupancy to
any portion of any parcel of RTMRG Real Property (collectively, the "RTMRG
LEASES") (and Section 5.12(a)(xiv) of the RTMRG Disclosure Letter sets forth a
true and complete summary of the following terms of each such RTMRG Lease: (1)
the sublessee; (2) the unit number; (3) the monthly rental rate; (4) the monthly
operating expenses payable to the sublessor; (5) the monthly rental taxes; (6)
the commencement date and the termination date; and (7) any guaranty by an RTM
Party or their Subsidiaries);
(xv) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the acquisition or sale by
RTMRG or any of its Subsidiaries of one or more parcels of real property, the
aggregate purchase price of which exceeds $50,000;
(xvi) any Contract under which the closing of the transactions
contemplated thereby has not occurred relating to the construction by RTMRG or
any of its Subsidiaries of one or more new Restaurants, the estimated costs
under which exceeds $50,000 in the aggregate;
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(xvii) any Contract entered into out of the ordinary course of
business, including any Contract entered into in connection with any settlement
of any claim, action, suit, demand, proceeding, investigation or dispute,
involving payments by RTMRG and/or its Subsidiaries in excess of $50,000 or any
unfulfilled or pending non-payment obligations of RTMRG or any of its
Subsidiaries; and
(xviii) any Contract or pledge pursuant to which RTMRG or any of
its Subsidiaries has committed or undertaken to make any charitable contribution
with an unfulfilled amount in excess of $50,000 individually or $250,000 in the
aggregate.
(b) Each RTMRG Material Contract is valid, binding, in full force
and effect and enforceable in accordance with its terms against RTMRG or the
applicable Subsidiary of RTMRG and, to the Knowledge of RTMRG, against any other
party thereto. RTMRG or the applicable Subsidiary of RTMRG and, to the Knowledge
of RTMRG, each other party thereto, is not in material breach or material
default under any RTMRG Material Contract and to the Knowledge of RTMRG, no
event has occurred or condition or set of circumstances exists which, with or
without notice or lapse of time or both, would constitute a material breach or
material default, or permit termination, modification or acceleration, under any
RTMRG Material Contract by any party thereto.
Section 5.13 TAX MATTERS.
(a) All income Tax Returns and all other material Tax Returns
required to be filed by or with respect to RTMRG and its Subsidiaries have been
properly prepared and timely filed (including all applicable extensions), and
all such Tax Returns (including information provided therewith or with respect
thereto) are true, complete and correct in all material respects.
(b) RTMRG and its Subsidiaries have fully and timely paid all
income Taxes and all other material Taxes owed by such companies (whether or not
shown on any Tax Return), and have made adequate provision for any such Taxes
that are not yet due and payable, for all taxable periods, or portions thereof,
ending on or before the date hereof.
(c) There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from RTMRG or any of
its Subsidiaries for any taxable period and no written request for any such
waiver or extension is currently pending.
(d) No audit or other proceeding by any Governmental Entity is
pending, no Governmental Entity has given written notice of any intention to
commence an audit or other proceeding, or assert any deficiency or claim for
additional Taxes against RTMRG or any of its Subsidiaries, and no claim in
writing has been made by any Governmental Entity in a jurisdiction where RTMRG
and its Subsidiaries do not file Tax Returns with respect to a particular Tax
that it is or may be subject to taxation by that jurisdiction with respect to
such Tax, and all deficiencies for Taxes asserted or assessed
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in writing against RTMRG or any of its Subsidiaries have been fully and timely
paid, settled or properly reflected in the Restated Combined RTM Financial
Statements.
(e) There are no Liens for Taxes upon the assets or properties of
RTMRG or any of its Subsidiaries, except for statutory Liens for current Taxes
not yet due.
(f) Neither RTMRG nor any of its Subsidiaries is a party to any Tax
Sharing Agreement, or has any Liability for Taxes of any Person (other than
members of the affiliated group, within the meaning of Section 1504(a) of the
Code, filing consolidated federal income tax returns of which RTMRG is the
common parent or members of any affiliated group filing combined or consolidated
Tax Returns for state, local or foreign Law purposes of which any of RTMRG or
its Subsidiaries is the common parent) under Treasury Regulation ss. 1.1502-6,
Treasury Regulation ss. 1.1502-78 or similar provision of state, local or
foreign Law, as a transferee or successor, by Contract, or otherwise.
(g) RTMRG and its Subsidiaries have each withheld (or will withhold)
from their respective employees, independent contractors, creditors,
stockholders and third parties and timely paid to the appropriate Governmental
Entity proper and accurate amounts in all material respects for all periods
ending on or before the Closing Date in compliance with all Tax withholding and
remitting provisions of applicable Laws and have each complied in all material
respects with all Tax information reporting provisions of all applicable Laws.
(h) Neither RTMRG nor any of its Subsidiaries has constituted a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of shares qualifying for
tax-free treatment under Section 355 of the Code (i) in the two years prior to
the date of this Agreement or (ii) in a distribution that could otherwise
constitute part of a "plan" or "series of related transactions" (within the
meaning of Section 355(e) of the Code) in conjunction with this acquisition.
(i) Neither RTMRG nor any of its Subsidiaries has agreed, or is
required to make, any adjustment under Section 481(a) of the Code, and no
Governmental Entity has proposed in writing any such adjustment or change in
accounting method.
(j) Neither RTMRG nor any of its Subsidiaries has executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
similar provision of state, local or foreign Law, and neither RTMRG nor any of
its Subsidiaries is subject to any private letter ruling of the IRS or
comparable ruling of any other Governmental Entity.
(k) Neither RTMRG nor any of its Subsidiaries has any "deferred
gains" with respect to any "deferred intercompany transactions," within the
meaning of
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Treasury Regulation ss. 1.1502-13 and none of RTMRG's Subsidiaries has an
"excess loss account" within the meaning of Treasury Regulation ss. 1.1502-19.
(l) No property owned by any of RTMRG or its Subsidiaries: (i) is
property required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g)(5) of the Code.
(m) The adjusted tax basis of each note, receivable or other
obligation among RTMRG, its Subsidiaries, its direct or indirect shareholders
and its Affiliates equals the principal amount of such note, receivable or
obligation (including any accrued but unpaid interest).
(n) Assuming the consummation of the transactions described in
Section 8.11, there will be no "excess loss account" (within the meaning of
Treasury Regulation ss. 1.1502-19) with respect to the capital stock of any
Subsidiaries of RTMRG.
(o) Section 5.13(o) of the RTMRG Disclosure Letter sets forth the
outstanding third-party indebtedness for each ELA Subsidiary, the amount of such
indebtedness which could be prepaid on the Closing Date without penalty, and the
amount of such indebtedness which could be prepaid on the Closing Date with
penalty (and the amount of such penalty).
Section 5.14 EMPLOYEE BENEFITS.
(a) Except for severance agreements under which the remaining
aggregate payments to the applicable former employee are less than $125,000,
RTMRG does not maintain or contribute to or have any obligation to maintain or
contribute to, or have any direct or indirect Liability with respect to any
plan, program, arrangement or agreement that is a pension, profit-sharing,
savings, retirement, employment, consulting, severance pay, termination,
executive compensation, incentive compensation, deferred compensation, bonus,
stock purchase, stock option, phantom stock or other equity-based compensation,
change-in-control, retention, salary continuation, vacation, sick leave,
disability, death benefit, group insurance, hospitalization, medical, dental,
life (including all individual life insurance policies as to which RTMRG is the
owner, the beneficiary, or both), Code Section 125 "cafeteria" or "flexible"
benefit, employee loan, educational assistance, fringe benefit plan, whether
written or oral, including, without limitation, any (i) "employee benefit plan"
within the meaning of Section 3(3) of ERISA or (ii) other employee benefit
plans, agreements, programs, policies, arrangements or payroll practices,
whether or not subject to ERISA (including any funding mechanism therefor now in
effect or required in the future as a result of the transaction contemplated by
this Agreement or otherwise) under which any current or former employee,
director, officer, leased employee or agent (or their beneficiaries) of RTMRG
has any present or future right to benefits (each such plan, program,
arrangement or agreement set forth in such
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Section being individually, an "RTMRG EMPLOYEE PLAN," and collectively, the
"RTMRG EMPLOYEE PLANS"). All references to "RTMRG" in this Section 5.14 shall
refer to RTMRG and any employer that would be considered a single employer with
RTMRG under Sections 414(b), (c), (m) or (o) of the Code.
(b) RTMRG does not maintain, contribute to or have any Liability
with respect to, and has not within the preceding six years maintained,
contributed to or had any Liability with respect to, any RTMRG Employee Plan
that is, or has been, (i) subject to Title IV of ERISA or Section 412 of the
Code, (ii) maintained by more than one employer within the meaning of Section
413(c) of the Code, (iii) subject to Sections 4063 or 4064 of ERISA, (iv) a
"multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, (v) a
"multiple employer welfare arrangement" as defined in Section 3(40) of ERISA,
(vi) maintained outside the jurisdiction of the United States, or (vii) an
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA and
that is not intended to be qualified under Section 401(a) of the Code.
(c) (i) Each RTMRG Employee Plan has been established and
administered in all material respects in accordance with its terms and in
compliance with the applicable provisions of ERISA, the Code and all other
applicable Laws; (ii) with respect to each RTMRG Employee Plan, all reports,
returns, notices and other documentation that are required to have been filed
with or furnished to the IRS, the DOL or any other Governmental Entity, or to
the participants or beneficiaries of such RTMRG Employee Plan have been filed or
furnished on a timely basis; (iii) each RTMRG Employee Plan that is intended to
be qualified within the meaning of Section 401(a) of the Code is so qualified
and has received a favorable determination letter from the IRS to the effect
that the RTMRG Employee Plan satisfies the requirements of Section 401(a) of the
Code and that its related trust is exempt from taxation under Section 501(a) of
the Code and, to the Knowledge of RTMRG, there are no facts or circumstances
that could reasonably be expected to cause the loss of such qualification or the
imposition of any material Liability, penalty or Tax under ERISA, the Code or
any other applicable Laws; (iv) other than routine claims for benefits, no Liens
or Legal Actions to or by any Person or Governmental Entity have been filed
against any RTMRG Employee Plan or RTMRG with respect to any RTMRG Employee Plan
or, to the Knowledge of RTMRG, against any other Person and, to the Knowledge of
RTMRG, no such Liens or Legal Actions are contemplated or threatened with
respect to any RTMRG Employee Plan; (v) no individual who has performed services
for RTMRG has been improperly excluded from participation in any RTMRG Employee
Plan; and (vi) there are no audits or proceedings initiated pursuant to the
Employee Plans Compliance Resolution System or similar proceedings pending with
the IRS or the DOL with respect to any RTMRG Employee Plan.
(d) Neither RTMRG nor, to the Knowledge of RTMRG, any other "party
in interest" or "disqualified person" with respect to any RTMRG Employee Plan
has engaged in a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code involving such RTMRG Employee
Plan. To the Knowledge of RTMRG, no fiduciary has any Liability for breach of
fiduciary duty or any other failure to act or comply with the requirements of
ERISA, the Code or any other
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applicable Laws in connection with the administration or investment of the
assets of any RTMRG Employee Plan.
(e) All Liabilities or expenses of RTMRG in respect of any RTMRG
Employee Plan (including workers compensation) which have not been paid, have
been properly accrued on the Restated Combined RTM Unaudited Financial
Statements in compliance with GAAP. All contributions (including all employer
contributions and employee salary reduction contributions) or premium payments
required to have been made under the terms of any RTMRG Employee Plan, or in
accordance with applicable Law, as of the date hereof have been timely made or
reflected on the Restated Combined RTM Unaudited Financial Statements in
accordance with GAAP.
(f) Neither RTMRG nor any organization to which RTMRG is a successor
or parent corporation, within the meaning of Section 4069(b) of ERISA, has
engaged in any transaction described in Sections 4069 or 4212(c) of ERISA.
(g) RTMRG has no obligation to provide or make available
post-employment welfare benefits or welfare benefit coverage for any employee or
former employee, except as may be required under COBRA, and at the sole expense
of the employee or former employee.
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (either alone or in
combination with another event) (i) result in any payment becoming due, or
increase the amount of any compensation due, to any current or former employee
of RTMRG; (ii) increase any benefits otherwise payable under any RTMRG Employee
Plan; (iii) result in the acceleration of the time of payment or vesting of any
such compensation or benefits; or (iv) result in the payment of any amount that
could, individually or in combination with any other such payment, constitute an
"excess parachute payment," as defined in Section 280G(b)(1) of the Code.
(i) RTMRG has no plan, Contract or commitment, whether legally
binding or not, to create any additional employee benefit or compensation plans,
policies or arrangements or, except as may be required by Law, to modify any
RTMRG Employee Plan.
(j) There are no reserves, assets, surpluses or prepaid premiums
with respect to any "welfare plan" (as defined in Section 3(1) of ERISA) that is
disclosed in Section 5.14(a) of the RTMRG Disclosure Letter.
(k) RTMRG has not incurred any Liability or obligation under WARN
or any similar state or local Law within the last six months which remains
unsatisfied.
(l) RTMRG has no direct or indirect material Liability with
respect to any misclassification of any Person as an independent contractor
rather than as an employee, or with respect to any employee leased from another
employer.
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(m) RTMRG has made available to Triarc with respect to each RTMRG
Employee Plan (other than severance agreements under which the aggregate
remaining payments to the applicable former employee are less than $125,000), a
true, correct and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) the most recent
documents constituting the RTMRG Employee Plan and all amendments thereto, (ii)
any related trust agreement or other funding instrument; (iii) the most recent
IRS determination letter; (iv) the most recent summary plan description and
summary of material modifications; (v) the three most recent (A) Forms 5500 and
attached schedules, and (B) audited financial statements; (vi) for the last
three years, all correspondence with the IRS, the DOL and any other Governmental
Entity regarding the operation or the administration of any RTMRG Employee Plan;
and (vii) any other documents in respect of an RTMRG Employee Plan reasonably
requested by Triarc.
Section 5.15 LABOR MATTERS. Neither RTMRG nor any of its Subsidiaries
is the subject of, nor, to the Knowledge of RTMRG, is there threatened, any
material claim asserting that RTMRG or any of its Subsidiaries has committed an
unfair labor practice with respect to RTMRG Employees located in the United
States, nor is there pending or, to the Knowledge of RTMRG, threatened, nor has
there been since December 31, 2001, any organized effort or demand for
recognition by any labor organization or any labor dispute or slow-down that is
material to the operations of RTMRG and its Subsidiaries, taken as a whole.
There is not pending, nor, to the Knowledge of RTMRG, is there threatened any
material labor strike, walk-out, work stoppage or lockout with respect to RTMRG
Employees. RTMRG and each of its Subsidiaries is, and since December 31, 2001
has been, in compliance in all material respects with all applicable foreign,
federal, state and local Laws respecting employment, employment of minors,
employment practices, terms and conditions of employment, withholding and wages
and hours. Neither RTMRG nor any of its Subsidiaries has any employees who spend
more than 25% of their work week for matters related to any RTM Related Entity.
Section 5.16 ENVIRONMENTAL MATTERS. (i) Neither RTMRG nor any of its
Subsidiaries is, or since December 31, 2001 has been, in violation in any
material respect of any applicable Environmental Law; (ii) since December 31,
2001, neither RTMRG nor any of its Subsidiaries has received any written notice,
demand, claim or request for information from any Governmental Entity alleging
the violation in any material respect of or any material Liability under any
applicable Environmental Law; (iii) neither RTMRG nor any of its Subsidiaries is
the subject of any Order arising under any Environmental Law; and (iv) to the
Knowledge of RTMRG, there are no events, conditions or circumstances reasonably
likely to result in any material Liability to RTMRG or any of its Subsidiaries
under Environmental Laws.
Section 5.17 INTELLECTUAL PROPERTY.
(a) RTMRG and/or each of its Subsidiaries owns, is licensed under,
or otherwise possesses legally enforceable rights to use all patents, trade
secrets, inventions, trademarks, trade names, service marks, trade dress rights,
Internet domain names,
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copyrights, and any applications and registrations therefor, technology,
know-how, computer software programs or applications, and tangible or intangible
proprietary information or materials that are used in and material to the
business of RTMRG and its Subsidiaries as currently conducted; PROVIDED, that no
representation or warranty is being made under this Agreement with respect to
the compliance by ARG or its applicable Subsidiary with any Contracts pursuant
to which ARG or its applicable Subsidiary licenses the RTMRG Third-Party
Intellectual Property Rights to RTMRG and its Subsidiaries or the sufficiency of
any such Contract to grant valid rights to such RTMRG Third-Party Intellectual
Property Rights. Section 5.17(a) of the RTMRG Disclosure Letter sets forth all
material United States patents, patent applications, trademark, service mark and
copyright applications and registrations, and Internet domain name registrations
owned by RTMRG and its Subsidiaries.
(b) Neither RTMRG nor any of its Subsidiaries is, nor will it be as
a result of the execution and delivery by RTMRG of this Agreement or the
performance by RTMRG of its obligations hereunder, in violation in any material
respect of any material licenses, sublicenses or other agreements as to which
RTMRG or any of its Subsidiaries is a party and pursuant to which RTMRG or any
of its Subsidiaries is authorized to use any third-party patents, inventions,
trademarks, trade names, service marks, trade dress rights, Internet domain
names, copyrights, trade secrets or other intellectual property rights
(collectively, "RTMRG THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS").
(c) No claims with respect to (i) the right of RTMRG or any of its
Subsidiaries to use or to sell, license or make available to any Person any
products or services of RTMRG or any of its Subsidiaries, or any of the patents,
patent applications, registered and material unregistered trademarks, trade
names, service marks, registered copyrights, and any applications therefor or
trade secrets owned by RTMRG or any of its Subsidiaries (collectively, the
"RTMRG INTELLECTUAL PROPERTY RIGHTS"); or (ii) RTMRG Third-Party Intellectual
Property Rights are, to the Knowledge of RTMRG, currently pending or threatened
by any Person against RTMRG or its Subsidiaries, that if adversely determined
could be material to RTMRG and its Subsidiaries taken as a whole; PROVIDED, that
no representation or warranty is being made with respect to claims made against
ARG or any of its Subsidiaries of which RTMRG does not have Knowledge.
(d) RTMRG and its Subsidiaries have taken all necessary actions to
maintain and protect the RTMRG Intellectual Property Rights.
Section 5.18 REAL PROPERTY. Section 5.18 of the RTMRG Disclosure
Letter sets forth a true, correct and complete schedule of all real property
owned by, or leased, subleased or licensed to, RTMRG or any of its Subsidiaries
(which Section may be updated by RTMRG prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof in compliance with Section
6.02) (collectively, the "RTMRG REAL PROPERTY"). With respect to each such
parcel of RTMRG Real Property:
(a) RTMRG or the relevant Subsidiary thereof has good and marketable
title to the RTMRG Real Property owned by it and a valid leasehold interest
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in the RTMRG Real Property leased to it, as the case may be, free and clear of
any Liens, except for Permitted Liens;
(b) except for RTMRG Leases, there are no leases, subleases,
licenses, concessions, or other agreements entered into by RTMRG or any of its
Subsidiaries granting to any Person or Persons the right of use or occupancy to
any portion of the parcel of any of such RTMRG Real Property;
(c) [intentionally omitted];
(d) all of the real property used by RTMRG and its Subsidiaries in
the conduct of its business is included in the RTMRG Real Property, and is
sufficient to operate the Arby's quick service restaurant business as currently
conducted;
(e) except for the RTMRG Restaurants (which are addressed in Section
5.25), RTMRG and its Subsidiaries have not received notice and, to the Knowledge
of RTMRG, there are no pending, threatened or contemplated condemnation
proceeding or proceedings affecting any of the RTMRG Real Property or any part
thereof or of any sale or other disposition of the RTMRG Real Property or any
part thereof in lieu of condemnation, in each case that, individually or in the
aggregate, is, or is reasonably likely to be, material to RTMRG and its
Subsidiaries, taken as a whole; and
(f) no portion of any material RTMRG Real Property has suffered
any material damage by fire or other casualty which is uninsured or has not
heretofore been completely repaired and restored in full.
Section 5.19 PERSONAL PROPERTY. RTMRG and its Subsidiaries have
good and marketable title to, or a valid and enforceable leasehold interest in,
all material tangible personal property or assets owned, used or held for use by
them. Neither RTMRG nor any of its Subsidiaries' ownership of or leasehold
interest in any such personal property or assets is subject to any Liens, except
for Permitted Liens. Except for normal wear and tear and except to the extent
addressed in Section 5.25(a), the machinery, equipment, fixtures and
improvements of RTMRG and its Subsidiaries necessary for and material to the
continued conduct of their respective businesses are in good operating condition
and in a state of reasonable maintenance and repair.
Section 5.20 SUFFICIENCY OF ASSETS. The RTM Parties and their
Subsidiaries taken as a whole have, and upon completion of the RTM Transactions,
Triarc shall have, directly or indirectly, ownership of or rights in all of the
assets necessary to conduct the Arby's restaurant business of the RTM Parties
and their Subsidiaries in all material respects as currently conducted.
Section 5.21 INSURANCE. RTMRG and its Subsidiaries maintain (or have
maintained on their behalf), and have maintained (or have maintained on their
behalf) without interruption, policies or binders of insurance covering risks
and events and in amounts adequate for their respective businesses and
operations and customary in the industry in which they operate. There are no
material claims by RTMRG or any
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Subsidiary pending under any of such policies or bonds in excess of $100,000 as
to which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds or in respect of which such underwriters have reserved
their rights.
Section 5.22 INVENTORY. The Inventory of RTMRG and its Subsidiaries
consists of items which are in all material respects of a quality and quantity
usable and salable in the ordinary course of business consistent with past
practice.
Section 5.23 ACCOUNTS RECEIVABLE. All Accounts Receivable of RTMRG
or any of its Subsidiaries that are reflected on the Restated Combined RTM
Financial Statements or on the accounting records of RTMRG and its Subsidiaries
as of the Closing Date represent or will represent valid obligations arising
from sales actually made or services actually performed by RTMRG or its
Subsidiaries in the ordinary course of business. There is no contest, claim,
defense or right of setoff, other than returns in the ordinary course of
business of RTMRG or its Subsidiaries, under any Contract with any account
debtor of a material Account Receivable relating to a material portion or
validity of such Account Receivable, other than any of the foregoing asserted
after the date hereof and where the result, individually or in the aggregate, is
not and would not reasonably be expected to be material to RTMRG and its
Subsidiaries, taken as a whole.
Section 5.24 SUPPLIERS. No supplier or distributor that is identified
with an asterisk on Section 5.12(a) of the RTMRG Disclosure Letter has reduced
or otherwise discontinued or adversely modified the terms on which such products
or services are supplied, or threatened to reduce or discontinue or adversely
modify the terms in connection with supplying such items to RTMRG or its
Subsidiaries, in a manner that is or would be material to RTMRG and its
Subsidiaries, taken as a whole.
Section 5.25 RTMRG RESTAURANTS.
(a) Section 5.25(a) of the RTMRG Disclosure Letter sets forth a
true and complete list of the Restaurants owned or operated by RTMRG or any of
its Subsidiaries (which Section may be updated by RTMRG prior to the Closing
Date to reflect any additions or deletions thereto after the date hereof in
compliance with Section 6.02) (the "RTMRG RESTAURANTS"). The stores, equipment,
machinery, fixtures and improvements owned by RTMRG and its Subsidiaries or
otherwise used by RTMRG and its Subsidiaries in connection with the operation of
the RTMRG Restaurants are (as to physical plant and structure) structurally
sound, in good operating condition and repair, except for ordinary wear and
tear, and are adequate for the uses to which they are being put.
(b) To the Knowledge of RTMRG, neither RTMRG nor any of its
Subsidiaries have received written notice that any of the buildings and
structures or any appurtenances thereto or equipment therein or the operation or
maintenance thereof related to the RTMRG Restaurants violates in any material
respect any restrictive covenants, any insurance requirements or any applicable
federal, state or local Law, ordinance or zoning regulation. To the Knowledge of
RTMRG, none of the property nor
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any buildings, structures or improvements thereon related to the RTMRG
Restaurants violate in any material respect any building, fire, environmental or
other Laws.
(c) No Governmental Entity has issued or threatened, in writing, to
issue any written notice or order that materially affects the use of the
property of an RTMRG Restaurant as presently utilized and neither RTMRG nor any
of its Subsidiaries has received written notice from any other third party of
any adverse claim that would materially adversely affect the current operations
of the RTMRG Restaurants. There are no condemnation or eminent domain
proceedings pending or, to the Knowledge of RTMRG, threatened, against the
property where any such RTMRG Restaurant is located, and neither RTMRG nor any
of its Subsidiaries has received written notice of the intent of any
Governmental Entity to take or use the property or any part thereof.
Section 5.26 TRANSACTIONS WITH AFFILIATES. Except for existing
employment agreements with RTMRG or any of its Subsidiaries or existing RTMRG
Employee Plans or existing Contracts entered into between RTMRG and its
Subsidiaries, neither RTMRG nor any of its Subsidiaries is a party to any
Contract with any Affiliate of RTMRG or any of its Subsidiaries (other than any
other RTM Party or any of their Subsidiaries, except in the case of RTMMC to the
extent that such Contract is an Excluded Asset (as defined in the RTMMC Purchase
Agreement)), any director, officer, shareholder or employee of RTMRG or any of
its Subsidiaries or, to the Knowledge of RTMRG, any Affiliates or Immediate
Family Members of any director, officer, shareholder or employee of RTMRG or any
of its Subsidiaries. Section 5.26 of the RTMRG Disclosure Letter also sets forth
a true and complete list of all outstanding loans or extensions of credit (other
than travel advances made in the ordinary course of business to directors,
officers or employees) that RTMRG or any of its Subsidiaries has made directly
or indirectly to any director, officer, shareholder or employee of RTMRG or any
of its Subsidiaries or any of their respective Affiliates or Immediate Family
Members, providing with respect to each such loan or extension of credit the
outstanding principal amount, the interest rate and final maturity date (which
Section may be updated by RTMRG prior to the Closing Date to reflect (x) any
additions or deletions thereto after the date hereof in compliance with Section
6.02 and (y) payments of principal and interest and accrual of interest on such
Indebtedness during the period from the date hereof through the Closing Date).
Each Contract and loan or extension of credit set forth or required to be set
forth in Section 5.26 of the RTMRG Disclosure Letter is hereinafter referred to
as a "RTMRG RELATED PARTY ARRANGEMENT". Each of the promissory notes evidencing
the RTMRG Shareholders Obligations Amount, other than any such promissory notes
owed by any of the RTMRG Shareholders listed in Section 9.02(i) of the RTMRG
Disclosure Letter, provides that the aggregate principal amount and accrued
interest thereon shall become due and payable by its terms upon consummation of
the RTM Transactions.
Section 5.27 BROKERS AND FINDERS. No broker, finder or investment
banker other than TM Capital is entitled to any brokerage, finder's or other fee
or commission in connection with the RTM Transactions or the other transactions
contemplated by this Agreement or the Ancillary Agreements based upon
arrangements
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made by or on behalf of RTMRG or any of its Subsidiaries. RTMRG has made
available to Triarc a correct and complete copy of all agreements between RTMRG
and TM Capital under which TM Capital would be entitled to any payment relating
to the RTM Transactions or such other transactions, which agreements shall not
be amended or otherwise modified after the date hereof without the prior written
consent of Triarc.
ARTICLE VI
INTERIM OPERATIONS COVENANTS
Section 6.01 CONDUCT OF BUSINESS OF TRIARC AND ITS SUBSIDIARIES.
During the period from the date hereof until the Closing, except as required by
Law or a Governmental Entity or as otherwise contemplated by this Agreement or
the Ancillary Agreements or taken in connection with complying with the terms of
this Agreement or the Ancillary Agreements or as set forth in Section 6.01 of
the Triarc Disclosure Letter, Triarc shall not take any of the following
actions, without the prior written consent of the RTM Representatives (not to be
unreasonably withheld, conditioned or delayed):
(a) ORGANIZATION DOCUMENTS. Amend its certificate of incorporation
or bylaws or similar organizational instruments in a manner that materially
adversely affects the RTMRG Shareholders who will receive shares of Triarc Class
B-1 Common Stock (if the Triarc B-1 Election shall have been made) or Triarc
Class B-2 Common Stock (if the Triarc B-2 Election shall have been made) upon
consummation of the First Merger in a manner different from the other holders of
Triarc Common Stock (other than those that affect the holders of the Triarc
Class B-1 Common Stock and the Triarc Class B-2 Common Stock similarly);
(b) DIVIDENDS. Make, declare or pay any dividend or distribution on
(i) any shares of Triarc Class A Common Stock or Triarc Class B-1 Common Stock,
other than dividends or distributions in amounts that do not result in an
anti-dilution adjustment under the Triarc Convertible Notes, or (ii) any shares
of the capital stock or similar equity interests of ARG and its Subsidiaries
other than dividends or distributions to ARG or another Subsidiary of ARG;
PROVIDED, that the foregoing clause (ii) shall not prohibit or restrict in any
manner (w) any payments under any Tax Sharing Agreement or corporate services
agreement or arrangement with Triarc or any of its Subsidiaries, (x) cash
dividends or distributions in an amount that Triarc has demonstrated to the
reasonable satisfaction of the RTM Representatives (based upon reasonably
detailed information provided by Triarc to the RTM Representatives) would not
reasonably be expected to result in the Net Liabilities of ARG and its
Subsidiaries being more than the ARG Benchmark as of the Closing Date, (y) any
payments under or contemplated by this Agreement and (z) any direct or indirect
payments to Triarc the proceeds of which are used to pay accrued interest on the
Triarc Convertible Notes; or
(c) RELATED ACTIONS. Authorize, commit or agree to do any of the
foregoing.
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Section 6.02 CONDUCT OF BUSINESS OF RTMRG AND ITS SUBSIDIARIES.
During the period from the date hereof until the Closing, except as required by
Law or a Governmental Entity or as otherwise contemplated by this Agreement or
the Ancillary Agreements or taken in connection with complying with the terms of
this Agreement or the Ancillary Agreements, RTMRG shall, and shall cause each of
its Subsidiaries to, (x) conduct its operations only in the ordinary course of
business consistent with past practice and with no less diligence and effort
than would be applied in the absence of this Agreement and (y) use its
commercially reasonable efforts to maintain and preserve intact its business
organization, to retain the services of its current officers and key employees,
and to preserve the good will of its customers, suppliers and other Persons with
whom it has business relationships. Without limiting the generality of the
foregoing, and except as otherwise contemplated by this Agreement or the
Ancillary Agreements or as set forth in Section 6.02 of the RTMRG Disclosure
Letter, (i) RTMRG shall not, and shall not permit any of its Subsidiaries to,
take any of the following actions, without the prior written consent of Triarc
(not to be unreasonably withheld, conditioned or delayed), and (ii) with respect
to Section 6.02(p), RTMRG shall, and shall cause its Subsidiaries to, take the
actions set forth in Section 6.02(p):
(a) ORGANIZATION DOCUMENTS. Amend its certificate of incorporation
or bylaws or similar organizational instruments;
(b) DIVIDENDS. Make, declare or pay any dividend or distribution on
any shares of its capital stock or similar equity interests, other than (i) cash
dividends or distributions in an amount that the RTM Representatives have
demonstrated to the reasonable satisfaction of Triarc (based upon reasonably
detailed information provided by the RTM Representatives to Triarc) would not
reasonably be expected to result in the Net Liabilities of the RTM Parties and
their Subsidiaries being more than the RTM Benchmark as of the Closing Date,
(ii) dividends or distributions of proceeds from Excluded Asset Dispositions and
(iii) dividends or distributions paid by wholly-owned Subsidiaries to RTMRG or a
wholly-owned Subsidiary of RTMRG;
(c) CAPITAL STOCK. (i) Adjust, split, combine or reclassify its
capital stock or similar equity interests, (ii) redeem, purchase or otherwise
acquire, directly or indirectly, any shares of its capital stock or similar
equity interests or any securities convertible or exchangeable into or
exercisable for any shares of its capital stock or similar equity interests,
other than in connection with the cashless exercise of outstanding RTMRG
Options, (iii) grant any Person any right or option to acquire any shares of its
capital stock or similar equity interests, (iv) issue, deliver or sell any
additional shares of its capital stock or similar equity interests or any
securities convertible or exchangeable into or exercisable for any shares of its
capital stock or similar equity interests or such securities (other than
pursuant to the exercise of RTMRG Options that are outstanding as of the date of
this Agreement) or (v) enter into any Contract, understanding or arrangement
with respect to the sale, voting, registration or repurchase of its capital
stock or similar equity interests, other than in connection with the cashless
exercise of outstanding RTMRG Options;
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(d) COMPENSATION AND BENEFITS. (i) Increase the compensation or
benefits payable or to become payable to any of its directors, officers or
employees, (ii) pay any compensation or benefits not required by any existing
plan or arrangement (including the granting of stock options, stock appreciation
rights, shares of restricted stock or performance units) to its directors,
officers or employees, (iii) grant any severance or termination pay to any of
its directors, officers or employees (except pursuant to existing agreements,
plans or policies), (iv) enter into any new employment or severance agreement
with any of its directors, officers or employees or (v) establish, adopt, enter
into, amend or take any action to accelerate rights under any RTMRG Employee
Plans, except in each case (A) for increases in salary, wages and benefits of
officers or employees consistent with past practice or (B) in conjunction with
new hires, promotions or other changes in job status consistent with past
practice;
(e) ACQUISITIONS. Acquire, by merger, consolidation, acquisition
of equity interests or assets, or otherwise, any business or any corporation,
partnership, limited liability company, joint venture or other business
organization or division thereof;
(f) DISPOSITIONS. Sell, close, lease, license, transfer, pledge,
encumber, grant or dispose of any of its properties or assets, including RTMRG
Restaurants and the capital stock or similar equity interests of Subsidiaries of
RTMRG, other than (i) the sale of Inventory or (ii) the disposition of used or
excess equipment or machinery, in each case in the ordinary course of business
consistent with past practice;
(g) CONTRACTS. (i) Enter into any Contract that, had it been entered
into on or prior to the date hereof, would have constituted an RTMRG Material
Contract, other than in the ordinary course of business consistent with past
practice or (ii) terminate, cancel or request any material change in any RTMRG
Material Contract or any Contract entered into pursuant to clause (i) above,
other than in the ordinary course of business consistent with past practice;
(h) INDEBTEDNESS; GUARANTEES. Subject to Section 7.16, (i) incur,
assume or prepay any Indebtedness, other than (x) in the ordinary course of
business consistent with past practice under existing lines of credit to be used
for working capital purposes or with Triarc's consent to acquire, remodel,
furnish or build new Restaurants or to remodel RTMRG Restaurants or (y) any
Indebtedness incurred either on terms reasonably acceptable to Triarc the
proceeds of which will be used solely to make scheduled amortization payments of
principal or scheduled payments of interest on Indebtedness existing as of the
date hereof or as set forth in Section 6.02(h) of the RTMRG Disclosure Letter,
or (ii) assume, guarantee, endorse or otherwise become liable or responsible for
the obligations of any other Person, other than (x) guarantees in favor of the
RTM Parties or any of their wholly-owned Subsidiaries in the ordinary course of
business, or (y) endorsement of negotiable instruments in the ordinary course of
business consistent with past practice;
(i) LOANS. (i) Make any loans, advances or capital contributions to,
or investments in, any other Person, other than in the ordinary course of
business consistent with past practice, or (ii) make any loans to its directors
or officers, other than (x) travel
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and similar advances in the ordinary course of business consistent practice and
(y) loans to be included in the RTMRG Shareholders Obligations Amount and repaid
pursuant to Section 2.02(c) that are made in connection with the exercise of
outstanding RTMRG Options;
(j) CAPITAL EXPENDITURES. Fail to make any capital expenditure,
including maintenance capital expenditures and capital expenditures for
remodeling of Restaurants, in accordance with the ordinary course of business
consistent with past practice;
(k) ACCOUNTING. Change its accounting policies or procedures, other
than as required by GAAP;
(l) LEGAL ACTIONS. Subject to Section 6.02(p), waive, release,
assign, settle or compromise any Legal Actions required to be disclosed pursuant
to Section 5.11, other than any such waiver, release, assignment, settlement or
compromise entered into in the ordinary course of business consistent with past
practice that (i) does not involve payment by RTMRG or any of its Subsidiaries
of more than $100,000 in any one instance or multiple instances involving the
same or related conduct, facts, circumstances or events and (ii) does not
require RTMRG or any of its Subsidiaries to be bound by any material restriction
(other than customary confidentiality restrictions);
(m) INTELLECTUAL PROPERTY. Take any action or omit to take any
action that causes any material RTMRG Intellectual Property Rights to become
invalidated, abandoned or dedicated to the public domain;
(n) RTMRG REAL PROPERTY. (i) Enter into any RTMRG Real Property
Lease or acquire any real property, except in connection with acquisitions of
RTMRG Restaurants described in Section 6.02(e) of the RTMRG Disclosure Letter,
(ii) enter into any lease, sublease, license, concession or other Contract
granting to any Person or Persons the right to use or occupancy to any portion
of the parcel of any RTMRG Real Property, (iii) enter into any Contract relating
to the sale of any RTMRG Real Property, other than dispositions of RTMRG
Restaurants described in Section 6.02(f) of the RTMRG Disclosure Letter or (iv)
terminate, cancel or request any material change in any of the foregoing in
clauses (i), (ii) and (iii) above, other than in the case of this clause (iv) in
the ordinary course of business consistent with past practice; or
(o) RELATED ACTIONS. Authorize, commit or agree to do any of the
foregoing; and
(p) TAXES. (i) Prepare, in the ordinary course of business and
consistent with past practice (except as otherwise required by a change in
applicable Law or a good faith resolution of a Contest), and timely file all
material Tax Returns required to be filed by it (or them) on or before the
Closing Date ("RTM POST-SIGNING RETURNS"); (ii) consult with Triarc with respect
to all RTM Post-Signing Returns and deliver drafts of such RTM Post-Signing
Returns to Triarc no later than ten Business Days prior to the date (including
extensions) on which such RTM Post-Signing Returns are required to be
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filed; (iii) fully and timely pay all Taxes due and payable in respect of such
RTM Post-Signing Returns that are so filed; (iv) properly reserve (and reflect
such reserve in its books and records and financial statements), in accordance
with past practice and in the ordinary course of business, for all Taxes payable
by it (or them) for which no RTM Post-Signing Return is due prior to the Closing
Date; and (v) promptly notify Triarc of any suit, claim, action, investigation,
proceeding or audit with respect to income Taxes or any other material Tax
(collectively, "TAX ACTIONS"), pending against or with respect to RTMRG or any
of its Subsidiaries, and any settlement or compromise of any such Tax Action.
Section 6.03 CONDUCT OF BUSINESS OF MERGER SUB CORP. AND MERGER SUB
LLC. During the period from the date hereof until the Closing, except as
required by Law or a Governmental Entity or as otherwise contemplated by this
Agreement or the Ancillary Agreements or taken in connection with complying with
the terms of this Agreement or the Ancillary Agreements or otherwise necessary
to facilitate the transactions contemplated by this Agreement or the Ancillary
Agreements, Triarc shall not permit Merger Sub Corp. or Merger Sub LLC to engage
in any operations or transactions or otherwise conduct any activities or enter
into any Contracts.
Section 6.04 CONTROL OF BUSINESS PENDING CLOSING. Nothing contained
in this Agreement shall give Triarc, directly or indirectly, the right to
control or direct the operations of RTMRG or any of its Subsidiaries prior to
the Closing. Nothing contained in this Agreement shall give RTMRG, directly or
indirectly, the right to control or direct the operations of Triarc or any of
its Subsidiaries prior to the Closing. Prior to the Closing, each of Triarc and
RTMRG shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over their respective operations.
ARTICLE VII
ADDITIONAL COVENANTS
Section 7.01 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Prior to the Closing, (i) Triarc shall, and shall cause ARG and
its Subsidiaries to: (A) provide to RTMRG and its Representatives access at
reasonable times upon reasonable prior notice to the officers, employees,
agents, properties, books and records of ARG and its Subsidiaries; and (B)
furnish promptly such information concerning ARG and its Subsidiaries as RTMRG
or its Representatives may reasonably request, in each case to the extent that
such access or request does not unreasonably interfere with the business or
operations of Triarc or any of its Affiliates, and (ii) RTMRG shall, and shall
cause its Subsidiaries to: (A) provide to Triarc and its Representatives access
at reasonable times upon reasonable prior notice to the officers, employees,
agents, properties, books and records of RTMRG and its Subsidiaries; and (B)
furnish promptly such information concerning RTMRG and its Subsidiaries as
Triarc or its Representatives may reasonably request, in each case to the extent
that such access or request does not unreasonably interfere with the business or
operations of RTMRG or
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any of its Affiliates. No investigation conducted under this Section 7.01(a),
however, will affect or be deemed to modify any representation or warranty made
in this Agreement.
(b) Triarc and RTMRG shall comply with, and Triarc shall cause its
Representatives and Subsidiaries to comply with all of the obligations of Triarc
under, and RTMRG shall cause its Representatives and Subsidiaries to comply with
all of the obligations of RTMRG under, the Amended and Restated Confidentiality
Agreements dated January 28, 2005 (the "CONFIDENTIALITY AGREEMENTS"), between
Triarc and RTMRG with respect to the information disclosed under this Section
7.01.
Section 7.02 COMMERCIALLY REASONABLE EFFORTS. Prior to the Closing,
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with applicable Laws, each of the parties to this Agreement shall use
its commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable to
ensure that the conditions set forth in Article IX are satisfied and to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements as promptly as practicable. Except as otherwise provided in Section
7.04(c), no party to this Agreement shall, or shall permit any of its respective
Subsidiaries to, take any action that could reasonably be expected to result in
any of the conditions set forth in Article IX not being satisfied or
satisfaction of those conditions being delayed. Notwithstanding the foregoing,
it is understood and agreed that Section 7.20 (and not this Section 7.02) shall
govern matters pertaining to the Trigger Event.
Section 7.03 NOTICES OF CERTAIN EVENTS.
(a) Prior to the Closing, Triarc shall notify the RTM
Representatives promptly of (i) any communication from any Person alleging that
the consent of such Person (or another Person) is or may be required in
connection with the transactions contemplated by this Agreement, (ii) any
communication from any Governmental Entity in connection with the transactions
contemplated by this Agreement, (iii) any material Legal Actions threatened or
commenced against or otherwise affecting ARG or any of its Subsidiaries or (iv)
any event, change, occurrence, circumstance or development between the date of
this Agreement and the Closing known to Triarc which would reasonably be
expected to result in the failure of any of the conditions set forth in Section
9.03(a) or Section 9.03(b).
(b) Prior to the Closing, RTMRG shall notify Triarc promptly of (i)
any communication from any Person alleging that the consent of such Person (or
another Person) is or may be required in connection with the transactions
contemplated by this Agreement, (ii) any communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement, (iii)
any material Legal Actions threatened or commenced against or otherwise
affecting RTMRG or any of its Subsidiaries or (iv) any event, change,
occurrence, circumstance or development between the date of this Agreement and
the Closing known to RTMRG which would reasonably
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be expected to result in the failure of any of the conditions set forth in
Section 9.02(a) or Section 9.02(b).
Section 7.04 CONSENTS; FILINGS.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement and in accordance with applicable Laws, each of the
parties to this Agreement shall use its commercially reasonable efforts to (i)
obtain any consents, approvals or other authorizations required in connection
with the transactions contemplated by this Agreement and (ii) make any necessary
filings and notifications, and thereafter make any other submissions either
required or deemed appropriate by each of the parties to this Agreement, in
connection with the transactions contemplated by this Agreement under (A) the
Securities Act, the Exchange Act and state securities or "blue sky" Laws, (B)
the HSR Act, (C) the GBCC, (D) the DLLCA and (E) any other applicable Laws,
including all real estate transfer tax returns. Triarc and RTMRG shall cooperate
and consult with each other in connection with the making of all such filings
and notifications. Neither Triarc nor RTMRG shall consent to any voluntary
extension of any statutory deadline or waiting period or to any voluntary delay
of the consummation of the transactions contemplated by this Agreement at the
behest of any Governmental Entity without the consent of the other party, which
consent shall not be unreasonably withheld, conditioned or delayed.
(b) Triarc shall promptly inform the RTM Representatives, and RTMRG
shall promptly inform Triarc, upon receipt of any communication from the Federal
Trade Commission, the Department of Justice or any other Governmental Entity
regarding any of the transactions contemplated by this Agreement. If Triarc or
RTMRG (or any of their respective Affiliates) receives a request for additional
information from any such Governmental Entity that is related to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response to such
request. Triarc shall advise the RTM Representatives promptly of any
understandings, undertakings or agreements (oral or written) which Triarc
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other Governmental Entity in connection with the transactions
contemplated by this Agreement. In furtherance and not in limitation of the
foregoing, Triarc shall use its commercially reasonable efforts to resolve any
objections that may be asserted with respect to the transactions contemplated by
this Agreement under any antitrust, competition or trade regulatory Laws.
(c) Notwithstanding the foregoing, nothing in this Section 7.04
shall require, or be construed to require, Triarc or RTMRG to agree to (i) sell,
hold separate, divest, discontinue or limit, before or after the Closing Date,
any assets, businesses or interest in any assets or businesses of Triarc, RTMRG
or any of their respective Affiliates, (ii) any conditions relating to, or
changes or restriction in, the operations of any such assets or businesses
which, in either case, could reasonably be expected to (x) result in a Triarc
Material Adverse Effect, an ARG Material Adverse Effect or an RTMRG Material
Adverse Effect or (y) materially and adversely impact the economic or
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business benefits to Triarc and its stockholders of the transactions
contemplated by this Agreement or (iii) any modification or waiver of the terms
and conditions of this Agreement.
Section 7.05 SHELF REGISTRATION STATEMENT.
(a) RTMRG shall furnish all information concerning itself and its
Subsidiaries as Triarc may reasonably request in connection with the
preparation, as contemplated by the Registration Rights Agreement, of the
registration statement pertaining to the resale of the shares included in the
Aggregate Share Consideration, and all amendments thereto (the "SHELF
REGISTRATION STATEMENT").
(b) The information supplied by RTMRG (including the combined
financial statements of the RTM Parties and their Subsidiaries (excluding the
Excluded Assets and Excluded Liabilities, each as defined in the RTMMC Purchase
Agreement) and the notes related thereto (collectively, the "COMBINED RTM
FINANCIAL STATEMENTS") for inclusion in the Shelf Registration Statement will
not, at (i) the effective date of the Shelf Registration Statement and (ii) the
time of the sale of any shares of Triarc Class B-1 Common Stock registered under
the Shelf Registration Statement, contain any untrue statement of a material
fact or fail to state any material fact required to be stated in the Shelf
Registration Statement or necessary in order to make the statements in the Shelf
Registration Statement not misleading.
(c) RTMRG shall provide such assistance to and cooperate with their
independent auditors as such independent auditors may reasonably request to
enable them to complete the preparation of the Combined RTM Financial Statements
required to be included or incorporated by reference into the Shelf Registration
Statement, and to render an unqualified opinion on such Combined RTM Financial
Statements.
Section 7.06 ACTIONS WITH RESPECT TO RTMRG SHAREHOLDERS.
(a) As promptly as practicable after the execution and delivery of
this Agreement, and in any event not more than ten days after the RTMRG Written
Consent becomes effective, RTMRG shall give to each RTMRG Shareholder who has
not duly executed and delivered the RTMRG Written Consent prior to such time
written notice pursuant to Section 14-2-704(f) of the GBCC of the approval of
this Agreement and the First Merger pursuant to action taken by the Board of
Directors of RTMRG and by the RTMRG Written Consent, including notice of
applicable dissenters' rights as provided by Section 14-2-1320 of the GBCC and
the other information required by Section 14-2-704(b)(1) of the GBCC.
(b) RTMRG shall as promptly as practicable after the date hereof
distribute a waiver of dissenters rights for consideration by each of the RTMRG
Shareholders who did not executed the RTMRG Written Consent and shall use its
commercially reasonable efforts to obtain the waiver of dissenters rights duly
executed and delivered by such RTMRG Shareholders prior to the First Effective
Time.
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(c) As promptly as practicable after the First Effective Time, and
in any event not more than ten days after the First Effective Time, Triarc shall
cause Merger Sub LLC, as the surviving entity in the Second Merger, to give
written dissenters' notice in compliance with Section 14-2-1322 of the GBCC (the
"DISSENTERS' NOTICE") to each RTMRG Shareholder who satisfies the requirements
of Section 14-2-1321 of the GBCC and has not executed a waiver of dissenters
rights. The Dissenters' Notice shall specify that the date by which Merger Sub
LLC must receive the payment demand with respect to Dissenting Shares shall be
30 days after the date on which the Dissenters' Notice is delivered to the
applicable RTMRG Shareholders.
Section 7.07 ACTIONS WITH RESPECT TO DEBT FINANCING AND DEBT
REFINANCINGS.
(a) RTMRG shall cooperate fully with Triarc and its Subsidiaries in
connection with the Debt Financing and Debt Refinancings, including causing
RTMRG and its Representatives to provide reasonable cooperation in connection
with the arrangement of any financing (including the satisfaction of any closing
conditions therein relating to the RTM Parties and their Subsidiaries) to be
consummated contemporaneously with or at or immediately after the Closing Date
in respect of the transactions contemplated by this Agreement or any Ancillary
Agreement, including reasonable participation in meetings, due diligence
sessions, road shows, provision of information, provision of financial
statements (including pro forma and interim financial statements), assistance in
rating agency process, the preparation of offering memoranda, private placement
memoranda, prospectuses and similar documents, the execution and delivery of any
customary underwriting or placement agreements, pledge and security documents,
other definitive financing documents, or other requested certificates or
documents, and including reasonable assistance with respect to obtaining
customary closing certificates, comfort letters of accountants, legal opinions
and real estate title documentation as may be reasonably requested by any
syndication agent, underwriter, initial purchaser, arranger or placement agent
with respect to all or a portion of such financing.
(b) RTMRG shall use commercially reasonable efforts to obtain (at no
cost or expense to ARG or any of its Subsidiaries after the Closing) on or prior
to the Closing Date payoff letters to satisfy in full no later than sixty (60)
days after the Closing Date each of the Contracts governing the Indebtedness for
borrowed money of any RTM Party or its Subsidiaries or included in the Winners
Indebtedness Amount and, if any such payoff letter shall not have been obtained
on or prior to the Closing Date, such amendments, waivers and modifications (the
"REQUIRED DEBT CONSENTS") to such Contracts (x) as are necessary to permit all
such Indebtedness (other than the RTM Non-Prepayable Debt) to be prepaid no
later than the earlier of sixty (60) days after the Closing Date and the date
any forbearance agreement in effect on the Closing Date in respect of such
Indebtedness shall expire after the Closing Date and (y) with respect to the RTM
Non-Prepayable Debt, that are identified in Section 7.07(b) of the Triarc
Disclosure Letter.
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Section 7.08 NO SOLICITATION. From the date of this Agreement until
the Closing, RTMRG shall not, and shall cause each of its Subsidiaries and
Representatives not to, directly or indirectly (i) solicit, initiate, facilitate
or knowingly encourage any inquiries, offers or proposals relating to a Takeover
Proposal; (ii) engage in discussions or negotiations with, or furnish or
disclose any non public information relating to RTMRG or any of its
Subsidiaries, as the case may be, to, any Person that has made or indicated an
intention to make a Takeover Proposal; (iii) approve, endorse or recommend any
Takeover Proposal; (iv) enter into any agreement in principle, arrangement,
understanding or Contract relating to a Takeover Proposal; or (v) propose to do
any of the foregoing or take any other action inconsistent with the obligations
of RTMRG under this Section 7.08. RTMRG shall promptly inform its
Representatives of its obligations under this Section 7.08. RTMRG shall notify
Triarc promptly upon receipt of any Takeover Proposal or indication that any
Person is considering making a Takeover Proposal or any request for non-public
information relating to RTMRG or any of its Subsidiaries, as the case may be.
RTMRG shall provide Triarc promptly with the identity of such Person and a copy
of such Takeover Proposal, indication or request (or, where no such copy is
available, a detailed description of such Takeover Proposal).
Section 7.09 TAKEOVER STATUTES. If any "fair price," "moratorium,"
"control share acquisition," "business combination" or other similar state
anti-takeover Laws ("TAKEOVER STATUTES") is or becomes applicable to this
Agreement, the Ancillary Agreements, the Merger or the other transactions
contemplated by this Agreement or the Ancillary Agreements, each of Triarc and
RTMRG and their respective boards of directors shall take all necessary action
to ensure that such transactions may be consummated as promptly as practicable
upon the terms and subject to the conditions set forth in this Agreement and
otherwise act to use commercially reasonable efforts to eliminate or minimize
the effects of such Takeover Statute.
Section 7.10 DEFENSE OF LITIGATION. Prior to the Closing, RTMRG shall
not settle or offer to settle any Legal Action against RTMRG, any of its
Subsidiaries or any of their respective directors or officers arising out of or
relating to this Agreement or the Ancillary Agreements or the transactions
contemplated by this Agreement or the Ancillary Agreements without the prior
written consent of Triarc, which consent shall not be unreasonably withheld,
delayed or conditioned. Prior to the Closing, RTMRG shall not cooperate with any
Person that may seek to restrain, enjoin, prohibit or otherwise oppose the
transactions contemplated by this Agreement or the Ancillary Agreements, and
RTMRG shall cooperate with the reasonable requests of Triarc in resisting any
such effort to restrain, enjoin, prohibit or otherwise oppose such transactions.
Prior to the Closing, Triarc shall not settle or offer to settle any Legal
Action against Triarc, any of its Subsidiaries or any of their respective
directors or officers arising out of or relating to this Agreement or the
Ancillary Agreements or the transactions contemplated by this Agreement or the
Ancillary Agreements without the prior written consent of RTMRG, which consent
shall not be unreasonably withheld, delayed or conditioned; PROVIDED, that
notwithstanding the foregoing, Triarc shall be entitled to settle and offer to
settle in its sole and absolute discretion any Legal Action commenced or
threatened by any stockholder of Triarc. Prior to the Closing, Triarc shall not
cooperate with any Person
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that may seek to restrain, enjoin, prohibit or otherwise oppose the transactions
contemplated by this Agreement or the Ancillary Agreements, and Triarc shall
cooperate with the reasonable requests of RTMRG in resisting any such effort to
restrain, enjoin, prohibit or otherwise oppose such transactions.
Section 7.11 EMPLOYEES AND EMPLOYEE BENEFITS, ETC.
(a) Except as otherwise agreed by Triarc and the RTM
Representatives, Triarc shall cause ARG and its Subsidiaries to retain in their
employ immediately after the Closing each of the employees of RTMRG and its
Subsidiaries, including any employees on a leave of absence (the "RTMRG
EMPLOYEES"), and shall cause ARG and its Subsidiaries to retain in their employ
immediately after the Closing each of the employees of ARG and its Subsidiaries,
including any employees on a leave of absence, subject in each case to the
current terms of such employee's employment and the ability of Triarc and its
Subsidiaries in their sole discretion subsequent to the Closing to terminate any
such employee in accordance therewith.
(b) Triarc shall cause ARG to be responsible for compliance with
COBRA, including the provision of continuation coverage with respect to all
RTMRG Employees and former employees of RTMRG and its Subsidiaries and each of
their qualified beneficiaries for whom a qualifying event occurs prior to, on or
after the Closing Date. The terms "continuation coverage," "qualified
beneficiaries," and "qualifying event" are used herein with the meanings
ascribed to them in COBRA.
(c) For the year in which the Closing occurs, Triarc shall cause
any welfare plan in which an RTMRG Employee who remains in the employ of ARG or
its Subsidiaries participates to credit such RTMRG Employee and his dependents
and beneficiaries with any deductible, co-payment and out-of-pocket expenses
incurred from January 1 through the Closing Date under the comparable welfare
plan in which the RTMRG Employee participates as of the Closing Date.
(d) In addition to the requirements of Section 7.11(a), for the
period beginning on the Closing Date and ending on January 2, 2006, 12:00
midnight Eastern time (the "TRANSITION PERIOD"), each RTMRG Employee who remains
in the employ of ARG or its Subsidiaries shall continue to participate in the
employee pension and welfare benefit plans of RTMRG in which such RTMRG Employee
participated immediately prior to the Closing Date.
(e) Each RTMRG Employee who remains in the employ of ARG or its
Subsidiaries shall be credited under the employee pension and welfare benefit
plans in which such RTMRG Employee shall become entitled to participate
immediately following the end of the Transition Period (collectively, the
"POST-TRANSITION PERIOD BENEFIT PLANS") with all service credited under
comparable plans of RTMRG and its Subsidiaries, including but not limited to:
(i) under any Post-Transition Period Benefit Plan that is a
defined contribution plan, for purposes of eligibility to participate, vesting
and benefit levels;
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(ii) under any Post- Transition Period Benefit Plan that
provides severance benefits, for purposes of eligibility to participate and the
calculation of the amount of the severance payment and other benefits;
(iii) under any Post- Transition Period Benefit Plan that
provides for paid time off, for purposes of eligibility to participate and the
calculation of the amount to be accrued; and
(iv) under any Post- Transition Period Benefit Plan that
provides welfare benefits, for purposes of any waiting period requirements or
benefit level entitlements.
(f) Compensation and benefit packages for RTMRG Employees at or
above the Vice President level to be in effect as of the Closing Date shall be
subject to the approval of the RTM Representatives, not to be unreasonably
withheld, conditioned or delayed.
(g) RTMRG shall take all necessary actions to terminate each RTMRG
Employee Plan set forth on Section 7.11(g) of the RTMRG Disclosure Letter, in
each case effective as of immediately prior to the Closing and without any
Liability after the Closing to RTMRG, ARG or any of their Affiliates.
(h) RTMRG shall take all necessary actions to cause the annual
rate of base salary of each RTMRG Employee whose name is set forth on Section
7.11(h) of the RTMRG Disclosure Letter to equal the annual rate of base salary
set forth next to each such RTMRG Employee's name on such Section 7.11(h), in
each case effective as of immediately prior to the Closing.
(i) Not later than three months after the Closing Date (if the
Triarc B-1 Election shall have been made) or the date on which the shares of
Triarc Class B-2 Common Stock convert into shares of Triarc Class B-1 Common
Stock (if the Triarc B-2 Election shall have been made), Triarc shall request
that the Performance Compensation Subcommittee of its board of directors
consider granting to RTMRG Employees employed by ARG or any of its Subsidiaries
after the Closing Date options to purchase shares of Triarc Class B-1 Common
Stock under Triarc's 2002 Equity Participation Plan in such amounts and with
such exercise prices and other terms as the Performance Compensation
Subcommittee shall determine, in its sole discretion, taking into account the
position held and years of service to the Arby's restaurant system by each
respective RTMRG Employee.
Section 7.12 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) All rights to indemnification now existing in favor of any
director or officer of RTMRG or any of its Subsidiaries (the "D&O INDEMNIFIED
PARTIES") as provided in the articles of incorporation and bylaws (or similar
organizational instruments) of RTMRG or its Subsidiaries, in agreements between
a D&O Indemnified Party and RTMRG or one of its Subsidiaries, or otherwise in
effect on the date of this
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Agreement shall, in each case, survive the Mergers and the consummation of the
other transactions contemplated hereby and shall continue in full force and
effect for a period of not less than six years after the Closing.
(b) Triarc shall cause the Surviving LLC to indemnify all D&O
Indemnified Parties to the fullest extent permitted by applicable Laws with
respect to all acts and omissions arising out of or relating to its services as
directors or officers of RTMRG or its Subsidiaries occurring prior to the
Closing. If any D&O Indemnified Party is or becomes involved in any Legal Action
in connection with any matter occurring prior to or at the Closing, Triarc shall
cause the Surviving LLC to pay as incurred such D&O Indemnified Party's legal
fees, costs and expenses incurred in connection with such Legal Action, subject
to Triarc's receipt of an undertaking by or on behalf of such D&O Indemnified
Party to repay such legal fees, costs and expenses if it is ultimately
determined under applicable Laws that such D&O Indemnified Party is not entitled
to be indemnified.
(c) Triarc shall cause the Surviving LLC to obtain, for a period
of six years after the Closing, extended reporting or tail coverage on, or a
substitute directors' and officers' liability insurance policy for, the
directors' and officers' liability insurance policy maintained by RTMRG and its
Subsidiaries as of the date hereof for the benefit of those persons who are
covered by such policies immediately prior to the Closing, in each case, on
terms and conditions that are, in the aggregate, no less favorable to the
insured with respect to claims arising from acts or omissions arising prior to
and including the Closing than are currently in effect; PROVIDED, that such
extended reporting or tail coverage or such substitute policy, as the case may
be, can be obtained and maintained on commercially reasonable terms and at a
cost to the Surviving LLC not greater than 150 percent of the aggregate annual
premium for the directors' and officers' liability insurance policy maintained
by RTMRG on the date hereof. If the Surviving LLC is unable to obtain such
coverage or policy for the cost indicated in the preceding sentence, Triarc
shall cause the Surviving LLC to procure the most favorable coverage or policy,
in Triarc's reasonable judgment, that the Surviving LLC can reasonably obtain
for the cost indicated in the preceding sentence.
Section 7.13 PUBLIC ANNOUNCEMENTS. Triarc shall consult with the RTM
Representatives, and RTMRG shall consult with Triarc, before issuing any press
release or otherwise making any public statements about this Agreement or any of
the transactions contemplated by this Agreement. Neither Triarc nor RTMRG shall
issue or cause to be issued any such press release or make any such public
statement prior to such consultation, except to the extent required by
applicable Laws, in which case that party shall use its commercially reasonable
efforts to consult with the other party before issuing any such release or
making any such public statement.
Section 7.14 SARBANES-OXLEY COMPLIANCE. Prior to the Closing, RTMRG
shall, and shall cause its Subsidiaries and its Representatives to, take all
actions that Triarc may deem necessary or appropriate, and cooperate in the
taking of such actions, to enable Triarc, following the Closing, to satisfy the
applicable obligations under Sections 302, 404 and 906 of the Sarbanes-Oxley Act
of 2002 and the rules and
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regulations promulgated by the SEC pursuant thereto (as amended from time to
time, the "SOA") and the other requirements of the SOA, including establishing
and maintaining adequate disclosure controls and procedures and internal
controls over financial reporting as such terms are defined in the SOA.
Section 7.15 RTM INSURANCE MATTERS.
(a) The parties agree that Casualty Insurance Claims relating to
any of the RTM Parties or any of their Subsidiaries (including reported claims
and including incurred but not reported claims) and all claims under any of the
group policies identified on Section 5.14 of the RTMRG Disclosure Letter ("GROUP
INSURANCE CLAIMS") relating to any of the RTM Parties or any of their
Subsidiaries (including reported claims and incurred but not reported claims)
will remain with the applicable RTM Parties and their Subsidiaries (or their
successors pursuant to this Agreement or any Ancillary Agreement) immediately
following the Closing. The parties agree that Casualty Insurance Claims and
Group Insurance Claims relating to any Affiliates of the RTM Parties that will
not be a Subsidiary of Triarc immediately after the Closing, including the Mrs.
Winners Obligors (the "EXCLUDED RTM AFFILIATES") (including reported claims and
including incurred but not reported claims) will remain with the Excluded RTM
Affiliates immediately following the Closing. For purposes hereof, "CASUALTY
INSURANCE CLAIMS" shall mean workers' compensation and all liability policies
and all related expenses to the extent not covered by insurance, including, but
not limited to, claims, retentions, loss sensitive adjustments, audits and third
party administrative adjustments. The Casualty Insurance Claims and Group
Insurance Claims are subject to the provisions of policies of insurance with
insurance carriers and contractual arrangements with insurance adjusters
maintained by RTMRG prior to the Closing (collectively, the "RTM INSURANCE
POLICIES"). With respect to the Casualty Insurance Claims and Group Insurance
Claims, the following procedures shall apply to Casualty Insurance Claims and
Group Insurance Claims incurred prior to the Closing: (i) the Surviving LLC
shall continue to administer, adjust, settle and pay, in a manner consistent
with past practice, on behalf of the Excluded RTM Affiliates, all Casualty
Insurance Claims and Group Insurance Claims with dates of occurrence prior to
the Closing Date, (ii) to the extent such Casualty Insurance Claims or Group
Insurance Claims are accrued or reserved for on the RTM Closing Balance Sheet,
such payments shall be for the applicable Excluded RTM Affiliates' account, and
(iii) to the extent the aggregate amount of such Casualty Insurance Claims or
Group Insurance Claims exceed the amounts accrued or reserved for on the RTM
Closing Balance Sheet, the Surviving LLC will invoice the Excluded RTM
Affiliates at the end of each month for Casualty Insurance Claims and Group
Insurance Claims paid on behalf of the Excluded RTM Affiliates during the
previous month by the Surviving LLC, or to the extent the Surviving LLC is
obligated to reimburse its insurance companies or insurance adjusters therefor,
by such insurance companies or adjusters. Each such invoice shall be supported
by such detailed information as the Excluded RTM Affiliates may reasonably
request. The Excluded RTM Affiliates shall promptly pay the Surviving LLC each
monthly invoice. Casualty Insurance Claims and Group Insurance Claims to be paid
by the Excluded RTM Affiliates hereunder shall include all costs necessary to
settle claims including, but not limited to, compensatory, medical, legal,
adjusting fees and other expenses reasonably allocated by the Surviving LLC to
the Excluded RTM Affiliates,
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including audits and any adjustments to required collateral. If there is a
general deductible or self-insurance retention applicable on an aggregate basis
to all claims under an RTM Insurance Policy, the deductible or retention shall
be allocated to the Excluded RTM Affiliates based on their percentage of the
dollar value of all claims under the RTM Insurance Policy as determined by the
Surviving LLC. In the event that any Casualty Insurance Claim or Group Insurance
Claim exceeds a deductible or self-insured retention under the RTM Insurance
Policies, and provided that the Excluded RTM Affiliates shall have promptly paid
any costs related to such Casualty Insurance Claim or Group Insurance Claim, the
Excluded RTM Affiliates shall be entitled to the benefit of any insurance
proceeds that may be available to discharge any portion of such Casualty
Insurance Claims or Group Insurance Claims, which shall be promptly paid over by
RTMRG to the Excluded RTM Affiliates.
(b) Neither Triarc nor any of its Affiliates shall be responsible
to the Excluded RTM Affiliates for the failure of any insurer to pay under any
such RTM Insurance Policy other than for a failure to pay premiums when due.
(c) Nothing in this Agreement is intended to provide or shall be
construed as providing a benefit or release to any insurer or claims service
organization of any obligation under any RTM Insurance Policy. The parties
confirm that the sole intention of this Section 7.15 is to divide and allocate
between them and the benefits and obligations under the RTM Insurance Policies
as of the Closing Date and not to affect, enhance or diminish the rights and
obligations of any insurer or claims service organization thereunder. Nothing
herein shall be construed as creating or permitting any insurer or claims
service organization the right of subrogation against any of the parties or any
of their Affiliates in respect of payment made by one to the other under any RTM
Insurance Policy.
Section 7.16 CERTAIN LOAN REPAYMENTS.
(a) At the Closing, as part of the Debt Refinancings, Triarc shall
cause ARG to repay in full all of the Indebtedness identified in Section 7.16 of
the RTMRG Disclosure Letter, other than any such Indebtedness which by its terms
may not be prepaid at the Closing or may be prepaid at the Closing only upon
delivery prior to the Closing of irrevocable notice, in which case such
Indebtedness shall be prepaid or repaid in accordance with its terms as soon as
practicable following the Closing and thereupon provide to the RTM
Representatives evidence of the repayment of such Indebtedness and the
termination of all Liens and guarantees related thereto. At the Closing, RTMRG
shall transfer (i) to ARG the RTMMC receivable and (ii) to Triarc the promissory
notes evidencing the RTMRG Shareholders Obligations Amount for cancellation and
delivery to the RTMRG Shareholders in accordance with Article II.
(b) At the Closing, Triarc may, at its option, cause ARG to repay to
Triarc (x) all intercompany Indebtedness of ARG or any of its Subsidiaries owed
to Triarc or any of its Subsidiaries (other than ARG or any of its Subsidiaries)
and (y) an amount equal to all capital contributions made to ARG or any of its
Subsidiaries by
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Triarc or any of its Subsidiaries (other than ARG or any of its Subsidiaries)
after January 2, 2005.
(c) Prior to the Closing, Triarc shall cause ARG to request that the
counterparty release the guarantors (the "RELATED PERSON GUARANTORS") under any
or all of the guaranties of performance bonds and leases set forth in Section
7.16(c) of the RTMRG Disclosure Letter, it being acknowledged and agreed that
neither Triarc nor any of its Affiliates shall be obligated to pay any money or
incur any obligations to obtain such release. To the extent ARG fails to obtain
such releases, Triarc shall cause ARG and its Subsidiaries to indemnify, defend
and hold harmless the Related Person Guarantors from and against any Liabilities
arising from and after the Closing Date suffered by them under such guaranties.
Section 7.17 CO-BRANDED RESTAURANTS. Prior to the Closing, RTMRG
shall, and shall cause the Mrs. Winners Obligors to, amend the terms of the
franchise and other agreements related to the Restaurants that are co-branded
with the Mrs. Winners Obligors to permit the Surviving LLC or its Subsidiaries
to terminate such Mrs. Winner's franchise and other agreements at any time from
and after the Closing without any Liability for any royalty payments payable
thereunder in respect of any period after the date of such termination.
Section 7.18 RTM TRADEMARKS. Prior to the Closing, RTMRG shall cause
RTM, Inc. to assign all right, title and interest in and to the RTM trade name,
RTM service mark and the RTM trademarks, and all goodwill associated therewith,
including the trademark registrations set forth in Section 7.18 of the RTMRG
Disclosure Letter, to RTMMC. In connection with such assignment, RTMRG shall
cause RTM, Inc. to file assignment documentation, in a form and substance
reasonably satisfactory to Triarc, with the United States Patent and Trademark
Office for the purpose of recording such transfer.
Section 7.19 CHARITABLE COMMITMENTS. Prior to the Closing, (x) RTMRG
shall, or shall cause its applicable Subsidiary to, fund in full and terminate
each charitable commitment described (or that should have been described) in
Section 5.12(a)(xviii) of the RTMRG Disclosure Letter and (y) ARG shall, or
shall cause its applicable Subsidiary to fund in full and terminate each
charitable commitment described (or that should have been described) in Section
3.12(a)(xviii) of the Triarc Disclosure Letter.
Section 7.20 ACTIONS WITH RESPECT TO THE TRIGGER EVENT. On or
promptly after the date of this Agreement, Triarc shall issue a press release
which shall include the statements with respect to the Trigger Event in
substantially the form attached hereto as ANNEX H. Following the issuance of
such press release, Triarc agrees that, unless an Adverse Board Determination
shall have been made, it shall explore in good faith the implementation of the
Trigger Event. If Triarc's board of directors determines that it is in the best
interests of Triarc and its stockholders (other than stockholders holding shares
of Triarc Class B-2 Common Stock) to effect the Trigger Event and to do so prior
to January 3, 2006 (a "FAVORABLE BOARD DETERMINATION"), then Triarc shall,
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subject to applicable fiduciary duties of its board of directors and other
applicable Laws, the receipt of all requisite consents and approvals and the
right of its board of directors thereafter to make at any time an Adverse Board
Determination in its sole discretion, use its good faith efforts to effect the
Trigger Event prior to January 3, 2006 on such terms as Triarc's board of
directors determines. Nothing in this Section 7.20 shall be construed to require
(x) the board of directors of Triarc to make a Favorable Board Determination or
not to make an Adverse Board Determination or (y) Triarc to effect the Trigger
Event prior to January 3, 2006 or at any time thereafter.
Section 7.21 DELIVERY OF 2005 RTM AUDITED FINANCIALS. If the Closing
shall not have occurred prior to the date that is 90 days after May 29, 2005,
then on or prior to such date, RTMRG shall use commercially reasonable efforts
to deliver to Triarc the audited combined balance sheets and statements of
income, net capital deficiency and cash flows as of and for the fiscal year
ended May 29, 2005 for the RTM Parties and their Subsidiaries accompanied by an
unqualified audit report of Ernst & Young LLP (the "2005 RTM AUDITED
FINANCIALS").
Section 7.22 EXCLUDED ASSET DISPOSITION PROCEEDS. Triarc shall cause
RTMRG promptly to remit to the RTM Representatives for distribution to the RTMRG
Shareholders any proceeds received by RTMRG or any of its Subsidiaries after the
Closing in respect of any Excluded Asset Dispositions.
Section 7.23 AMENDMENT OF RTMRG ROLLOVER OPTIONS. No later than seven
business days following the date hereof, RTMRG shall amend each RTMRG Rollover
Option to provide that (i) such RTMRG Rollover Option shall continue to vest in
accordance with the vesting schedule set forth in the stock option agreement
pursuant to which such RTMRG Rollover Option was granted, and the vesting of
such RTMRG Rollover Option shall not be accelerated upon, or in connection with,
the consummation of the RTM Transactions and (ii) if not inconsistent with the
requirements of Section 409A of the Code as determined by RTMRG in its sole
discretion, to the extent that such RTMRG Rollover Option has a per share
exercise price that is less than the fair market value of a share of RTMRG
Common Stock immediately prior to the First Effective Time, such RTMRG Rollover
Option shall, to the extent then unvested, become vested upon the occurrence of
a termination of the holder of such RTMRG Rollover Option's employment following
the First Effective Time for any reason entitling such holder to severance
pursuant to the holder's employment agreement.
ARTICLE VIII
TAX MATTERS
Section 8.01 TAX INDEMNIFICATION.
(a) INDEMNIFICATION BY RTMRG SHAREHOLDERS. From and after the
Closing Date, the RTMRG Shareholders (to the extent of the RTM Escrow Fund), and
after the RTM Escrow Fund has been exhausted in full, the RTMRG Principal
Shareholders (jointly and severally, pursuant to the Transaction Support
Agreement),
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shall, subject to the applicable limitations set forth in Article XI, indemnify
the Triarc Indemnified Parties against and hold harmless from any and all
liabilities, losses, damages, claims, costs, expenses, interest, awards,
judgments and penalties (including, reasonable fees for both in-house and
outside counsel, accountants and other outside consultants) suffered or incurred
(each a "TAX LOSS" and collectively, the "TAX LOSSES") arising out of:
(i) Taxes of RTMRG or its Subsidiaries for periods or
portions thereof ending on or before the Closing Date ("PRE-CLOSING TAXES"), and
Taxes of RTMRG or its Subsidiaries attributable to the RTMRG Transactions, in
excess of the amount of Taxes which are specifically identified as current
liabilities (excluding any reserve for deferred taxes established to reflect
timing differences between book and Tax income) on the RTM Closing Balance
Sheet;
(ii) Taxes of any member of an affiliated, consolidated,
combined or unitary group of which RTMRG or any of its Subsidiaries is or was a
member on or prior to the Closing Date by reason of Liability under Treasury
Regulation ss.1.1502-6, Treasury Regulation ss.1.1502-78 or comparable provision
of foreign, state or local Law, excluding any Taxes of any member of an
affiliated, consolidated, combined or unitary group of which RTMRG or any of its
Subsidiaries becomes a member on the Closing Date on or after the Closing (or at
any time after the Closing Date) and any Taxes which are specifically identified
as current liabilities (excluding any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) on the RTM Closing
Balance Sheet;
(iii) Taxes or other payments with respect to periods or
portions thereof ending on or before the Closing Date which are required to be
paid after the date hereof by RTMRG or any of its Subsidiaries to any party
under any Tax Sharing Agreement (whether written or not) or by reason of being a
successor-in-interest or transferee of another entity; (iv) without duplication,
Taxes imposed on Triarc or any of its Subsidiaries as a result of (x) a breach
of or inaccuracy in any representation or warranty set forth in Section 5.13 or
in the certificate delivered by the RTM Representatives pursuant to Section
9.02(d), as of the date such representation or warranty was made or as if such
representation or warranty were made on and as of the Closing Date (except for
representations and warranties that expressly relate to a specified date, the
breach of or inaccuracy in which will be determined with reference to such
specified date) or (y) a breach of any covenant or agreement set forth in
Section 6.02(p) or this Article VIII; PROVIDED, that for purposes of this
Section 8.01(a)(iv) only, a breach of or inaccuracy in any representation,
warranty, covenant or agreement shall be determined without reference to any
materiality qualifier with respect thereto; and
(v) Taxes imposed on Triarc or any of its Subsidiaries
attributable to any "excess loss account" (within the meaning of Treasury
Regulation ss. 1.1502-19) existing as of the Closing Date with respect to the
capital stock of any Subsidiaries of RTMRG, except to the extent such Tax would
not have arisen but for the
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failure of Triarc and its Subsidiaries to make (in whole or in part) the Triarc
ELA Contributions.
Notwithstanding the foregoing, the RTMRG Shareholders or the RTMRG Principal
Shareholders (as the case may be) shall not be obligated to pay any amounts
under this Section 8.01(a) (x) for any Tax Losses resulting from any transaction
of RTMRG or its Subsidiaries on the Closing Date but after the Closing, other
than any transaction in the ordinary course of business and any RTMRG
Transactions, or (y) in respect of Pre-Closing Taxes attributable to an audit
adjustment by a Governmental Entity if such audit adjustment conforms the
treatment of an item on a Tax Return (other than a Straddle Return) of RTMRG or
its Subsidiaries for a Pre-Closing Taxable Period ("RTMRG PRE-CLOSING TAX
RETURN") to the treatment of the same item on a Tax Return (other than a
Straddle Return) of RTMRG or its Subsidiaries for any taxable period other than
a Pre-Closing Taxable Period ("RTMRG POST-CLOSING TAX RETURN"), excluding any
items related to any management agreements or similar arrangements among any of
RTMRG, its Affiliates and any of its shareholders, if the treatment of such item
on the RTMRG Post-Closing Tax Return is inconsistent with the treatment of such
item on the RTMRG Pre-Closing Tax Return until the aggregate amount of such
Pre-Closing Taxes equals $1 million (the "RTMRG TAX BASKET AMOUNT"), after which
the RTMRG Shareholders and the RTMRG Principal Shareholders shall be obligated
to pay the full amount of such Pre-Closing Taxes in excess of the RTMRG Tax
Basket Amount.
(b) INDEMNIFICATION CALCULATIONS. All indemnification payments
for Tax Losses made pursuant to this Section 8.01, and for Losses made pursuant
to Section 11.02 and Section 11.04, shall be made on an after-tax basis.
Accordingly, in determining the amount of any indemnification payment for a Tax
Loss or Loss suffered or incurred by an indemnitee hereunder, the amount of such
Tax Loss or Loss shall be (i) increased to take into account any additional Tax
cost actually incurred by the indemnitee arising from the receipt of
indemnification payments hereunder ("TAX COSTS") and (ii) decreased to take into
account any deduction, credit or other tax benefit actually realized by the
indemnitee with respect to such Tax Loss or Loss ("TAX BENEFITS"). In computing
the amount of any such Tax Cost or Tax Benefit, the indemnitee shall be deemed
to recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnification payment
hereunder or the incurrence or payment of any indemnified Tax Loss or Loss;
PROVIDED, that if a Tax Cost or Tax Benefit is not realized in the taxable
period during which an indemnifying party makes an indemnification payment or
the indemnitee incurs or pays any Tax Loss or Loss, the parties hereto shall
thereafter make payments to one another at the end of each subsequent taxable
period to reflect the net Tax Costs and Tax Benefits realized by the parties
hereto in each such subsequent taxable period.
Section 8.02 TAX INDEMNIFICATION PROCEDURES.
(a) After the Closing, Triarc shall promptly notify the RTM
Representatives in writing of any demand, claim or notice of the commencement of
an audit received by such party from any Governmental Entity or any other Person
with respect to Taxes for which the RTMRG Shareholders or the RTMRG Principal
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Shareholders (as the case may be) are liable pursuant to Section 8.01; PROVIDED,
HOWEVER, that a failure to give such notice will not affect the Triarc
Indemnified Parties' rights to indemnification under this Article VIII, except
to the extent that the RTMRG Shareholders or the RTMRG Principal Shareholders
(as the case may be) are actually prejudiced thereby. Such notice shall contain
factual information (to the extent known) describing the asserted Tax liability
and shall include copies of the relevant portion of any notice or other document
received from any Governmental Entity or any other Person in respect of any such
asserted Tax liability.
(b) Payment by the RTMRG Shareholders or the RTMRG Principal
Shareholders (as the case may be) of any amount due to the Triarc Indemnified
Parties under this Article VIII shall be made within ten Business Days following
written notice by a Triarc Indemnified Party that payment of such amounts to the
appropriate Governmental Entity or other applicable third party is due by a
Triarc Indemnified Party, PROVIDED, that the RTMRG Shareholders or the RTMRG
Principal Shareholders (as the case may be) shall not be required to make any
payment earlier than five Business Days before it is due to the appropriate
Governmental Entity or applicable third party. In the case of a Tax that is
contested in accordance with the provisions of Section 8.03, payment of such
contested Tax will not be considered due earlier than the date a "final
determination" to such effect is made by such Governmental Entity or a court of
competent jurisdiction. For this purpose, a "final determination" shall mean a
settlement, compromise, or other agreement with the relevant Governmental
Entity, whether contained in an IRS Form 870 or other comparable form, or
otherwise, or such procedurally later event, such as a closing agreement with
the relevant Governmental Entity, and agreement contained in an IRS Form 870-D
or other comparable form, an agreement that constitutes a "determination" under
Section 1313(a)(4) of the Code, a deficiency notice with respect to which the
period for filing a petition with the Tax Court or the relevant state, local or
foreign tribunal has expired or a decision of any court of competent
jurisdiction that is not subject to appeal or as to which the time for appeal
has expired.
(c) All amounts required to be paid pursuant to this Article VIII
shall be paid promptly in immediately available funds by wire transfer to a bank
account designated by the indemnified party. In seeking indemnification under
this Article VIII against the RTMRG Shareholders, the Triarc Indemnified Parties
shall first exercise its remedies with respect to the RTM Escrow Fund pursuant
to the Escrow Agreement and, if the RTM Escrow Fund has been exhausted in full,
with respect to the RTMRG Principal Shareholders (individually or jointly)
pursuant to the Transaction Support Agreement.
(d) Any payments required pursuant to this Article VIII that are
not made within the time period specified in this Section 8.02 shall bear
interest at a rate and in the manner provided in the Code for interest on
underpayments of federal income Tax and, in the case of payments related to
Taxes other than U.S. federal income Taxes, at a rate and in the manner provided
under applicable Law for underpayments of such Tax.
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Section 8.03 RTM TAX AUDITS AND CONTESTS; COOPERATION.
(a) After the Closing Date, the RTM Representatives shall control
the conduct, through counsel of their own choosing, of any audit, claim for
refund, or administrative or judicial proceeding involving any asserted Tax
liability or refund (any such audit, claim for refund, or proceeding relating to
an asserted Tax liability referred to herein as a "CONTEST") that relates solely
to Taxes for which the Triarc Indemnified Parties are indemnified under Section
8.01(a), but Triarc shall have the right to participate in such Contest at its
own expense, and the RTM Representatives shall not settle, compromise and/or
concede any portion of such Contest that is reasonably likely to affect the Tax
liability of Triarc or its Subsidiaries for any taxable year (or portion
thereof) beginning after the Closing Date without the consent of Triarc, which
consent shall not be unreasonably withheld, conditioned or delayed; PROVIDED,
that if the RTM Representatives fail to assume control of the conduct of any
such Contest within a reasonable period following the receipt by the RTM
Representatives of notice of such Contest, Triarc shall have the right to assume
control of such Contest and shall be able to settle, compromise and/or concede
such Contest in its sole discretion.
(b) After the Closing Date, subject to Section 8.03(a), Triarc shall
control the conduct of any Contest pertaining to RTMRG or any of its
Subsidiaries, but the RTM Representatives shall have the right to participate in
any such Contest that relates to Taxes for which the Triarc Indemnified Parties
are indemnified under Section 8.01(a) ("PARTICIPATION CONTEST") at their own
expense and Triarc shall not settle, compromise and/or concede any portion of
such Participation Contest if such resolution is reasonably likely to give rise
to a Tax liability for which the Triarc Indemnified Parties are indemnified
under Section 8.01(a), without the consent of the RTM Representatives, which
consent shall not be unreasonably withheld, conditioned or delayed; PROVIDED,
that if Triarc fails to assume control of the conduct of any such Participation
Contest within a reasonable period following the receipt by Triarc of notice of
such Participation Contest, the RTM Representatives shall have the right to
assume control of such Participation Contest and shall be able to settle,
compromise and/or concede such Participation Contest in its sole discretion.
(c) Triarc and the RTM Representatives agree to furnish or cause
to be furnished to each other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance relating to
RTMRG and its Subsidiaries as is reasonably requested for the filing of any Tax
Returns and the preparation, prosecution, defense or conduct of any Contest.
Triarc and the RTM Representatives shall reasonably cooperate with each other in
the conduct of any Contest or other proceeding involving or otherwise relating
to RTMRG or its Subsidiaries (or their income or assets) with respect to any Tax
and each shall execute and deliver such powers of attorney and other documents
as are necessary to carry out the intent of this Section 8.03(c). Without
limiting the foregoing, Triarc shall make available to the RTM Representatives
promptly upon written request and for as much time as reasonably required for
purposes of reviewing or filing any Tax Returns or conducting any Contest or
other Tax proceeding related to Taxes of RTMRG and its Subsidiaries for Taxable
periods (or portions thereof) ending on or before the Closing Date any one or
more of
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those employees of RTMRG or Triarc or their controlled Affiliates (as
specifically requested by the RTM Representatives) who prior to the Closing were
involved in the preparation of Tax Returns or the conduct of Contests or other
Tax proceedings for the benefit of the RTM Parties; PROVIDED, that neither
Triarc nor any of its controlled Affiliates shall have any obligation to
continue the employment of any employees; and PROVIDED, FURTHER, neither Triarc
nor any of its controlled Affiliates shall have any Liability to the RTM
Representatives for the acts or omissions of its employees under this Section
8.03(c). The parties agree that nothing in this Section 8.03(c) shall require
any of Triarc or its Affiliates to undertake any action that could unreasonably
interfere with, or otherwise cause an undue burden on, the activities of Triarc
or its Subsidiaries. The RTM Representatives shall reimburse Triarc for Triarc's
or its controlled Affiliates' reasonable costs, including allocated direct and
indirect costs, in satisfying its obligations under this Section 8.03(c) with
respect to the RTM Representatives. Any information obtained under this Section
8.03(c) shall be kept confidential, except as may be otherwise necessary in
connection with the filing of Tax Returns or in the conduct of a Contest or
other Tax proceeding.
(d) Triarc and its Subsidiaries shall (i) properly retain and
maintain the Tax and accounting records of RTMRG and its Subsidiaries that are
in its possession after the Closing Date and that relate to Pre-Closing Taxable
Periods for seven years and shall thereafter provide the RTM Representatives
with written notice prior to any destruction, abandonment or disposition of all
or any portions of such records of RTMRG and its Subsidiaries, (ii) transfer
such records to the RTM Representatives upon their written request prior to any
such destruction, abandonment or disposition and (iii) allow the RTM
Representatives and their Representatives, at times and dates reasonably and
mutually acceptable to the parties, to from time to time inspect and review such
records as the RTM Representatives may deem necessary or appropriate; PROVIDED,
HOWEVER, that in all cases, such activities are to be conducted by the RTM
Representatives during normal business hours and, in the case of activities
conducted by or on behalf of the RTM Representatives, at the RTM
Representatives' sole expense and, in the case of activities conducted by or on
behalf of Triarc, at Triarc's sole expense. Any information obtained under this
Section 8.03(d) shall be kept confidential, except as may be otherwise necessary
in connection with the filing of Tax Returns or in the conduct of a Contest or
other Tax proceeding.
Section 8.04 PREPARATION OF TAX RETURNS AND PAYMENT OF TAXES.
(a) Triarc shall prepare (or cause to be prepared), and timely file
all Tax Returns of RTMRG or any of its Subsidiaries that are required to be
filed with any Governmental Entity after the Closing Date relating to any
taxable periods (or portions thereof) ending on or before the Closing Date
("PRE-CLOSING TAXABLE PERIODS"). With respect to any such Tax Returns filed with
respect to a Pre-Closing Taxable Period, the RTMRG Shareholders or the RTMRG
Principal Shareholders (as the case may be) shall be responsible for the
Pre-Closing Taxes due in respect of such Tax Returns for RTMRG and its
Subsidiaries ("PRE-CLOSING RTMRG RETURNS"), to the extent that the aggregate
amount of Pre-Closing Taxes due in respect of all such Tax Returns exceeds the
amount of Taxes that are specifically identified as current liabilities
(excluding any reserve for
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deferred taxes established to reflect timing differences between book and Tax
income) on the RTM Closing Balance Sheet, and Triarc shall, subject to Section
8.01(a), be responsible for all other Pre-Closing Taxes shown as due on such Tax
Returns. Triarc shall notify the RTM Representatives of any amounts due from the
RTMRG Shareholders or the RTMRG Principal Shareholders in respect of any such
Tax Return no later than ten Business Days prior to the date on which such Tax
Return is due, and the RTMRG Shareholders or the RTMRG Principal Shareholders
shall remit such payment to Triarc no later than five Business Days prior to the
date such Tax Return is due.
(b) In the case of any Pre-Closing RTMRG Returns, Triarc shall
prepare (or cause to be prepared) such Tax Return in a manner consistent with
past practice, except as otherwise required by a change in law or a good faith
resolution of a contest, and shall deliver any such Tax Return to the RTM
Representatives for their review at least 30 days prior to the date such Tax
Return is required to be filed. If the RTM Representatives dispute any item on
such Tax Return, they shall notify Triarc of such disputed item (or items) and
the basis for its objection. The parties shall act in good faith to resolve any
such dispute prior to the date on which the relevant Tax Return is required to
be filed. If the parties cannot resolve any disputed item, the item in question
shall be resolved by the Independent Accountants. The fees and expenses of the
Independent Accountants shall be borne equally by Triarc and the RTM
Representatives.
(c) With respect to Tax Returns that are required to be filed by or
with respect to the RTMRG or any of its Subsidiaries for a period that begins
before and ends after the Closing Date ("STRADDLE RETURNS"), such Straddle
Returns shall be prepared in a manner consistent with past practice (except as
otherwise required by a change in law or a good faith resolution of a contest),
and the RTMRG Shareholders or the RTMRG Principal Shareholders (as the case may
be) shall be responsible for the Pre-Closing Taxes due in respect of such
Straddle Returns in excess of the amount of such Taxes which are specifically
identified as current liabilities (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) on the
RTM Closing Balance Sheet. Triarc shall notify the RTM Representatives of any
amounts due from the RTMRG Shareholders or the RTMRG Principal Shareholders (as
the case may be) in respect of any Straddle Return no later than ten Business
Days prior to the date on which such Straddle Return is due, and the RTMRG
Shareholders or the RTMRG Principal Shareholders (as the case may be) shall
remit such payment to Triarc no later than five Business Days prior to the date
such Straddle Return is due. Triarc shall deliver any Straddle Return to the RTM
Representatives for their review at least 30 days prior to the date on which
such Tax Return is required to be filed. If the RTM Representatives dispute any
item on such Tax Return, they shall notify Triarc of such disputed item (or
items) and the basis for their objection. The parties shall act in good faith to
resolve any such dispute prior to the date on which the relevant Tax Return is
required to be filed. If the parties cannot resolve any disputed item, the item
in question shall be resolved by the Independent Accountants. The fees and
expenses of the Independent Accountants shall be borne equally by Triarc and the
RTM Representatives.
(d) Neither Triarc nor any of its Affiliates shall (or shall cause
or permit any of their Subsidiaries to) amend, refile or otherwise modify any
Tax Return
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relating in whole or in part to RTMRG or any of its Subsidiaries with respect to
any Pre-Closing Taxable Period without the written consent of the RTM
Representatives, which consent shall not be unreasonably withheld, conditioned
or delayed.
Section 8.05 STRADDLE PERIODS. For purposes of this Agreement, in
the case of any Taxes of RTMRG or any of its Subsidiaries that are payable with
respect to any tax period that begins before and ends after the Closing Date (a
"STRADDLE PERIOD"), the portion of any such Taxes that constitutes Pre-Closing
Taxes shall: (i) in the case of Taxes that are either (x) based upon or related
to income or receipts, or (y) imposed in connection with any sale, transfer or
assignment or any deemed sale, transfer or assignment of property (real or
personal, tangible or intangible), be deemed equal to the amount that would be
payable if the tax year or period ended on the Closing Date; and (ii) in the
case of Taxes (other than those described in clause (i) above) that are imposed
on a periodic basis with respect to the business or assets of RTMRG or any of
its Subsidiaries or otherwise measured by the level of any item, be deemed to be
the amount of such Taxes for the entire Straddle Period (or, in the case of such
Taxes determined on an arrears basis, the amount of such Taxes for the
immediately preceding Tax period) multiplied by a fraction the numerator of
which is the number of calendar days in the portion of the Straddle Period
ending on the Closing Date and the denominator of which is the number of
calendar days in the entire Straddle Period. For purposes of clause (i) of the
preceding sentence, any exemption, deduction, credit or other item (including,
without limitation, the effect of any graduated rates of tax) that is calculated
on an annual basis shall be allocated to the portion of the Straddle Period
ending on the Closing Date on a pro rata basis determined by multiplying the
total amount of such item allocated to the Straddle Period times a fraction, the
numerator of which is the number of calendar days in the portion of the Straddle
Period ending on the Closing Date and the denominator of which is the number of
calendar days in the entire Straddle Period. In the case of any Tax based upon
or measured by capital (including net worth or long-term debt) or intangibles,
any amount thereof required to be allocated under this Section 8.05 shall be
computed by reference to the level of such items on the Closing Date. The
parties hereto will, to the extent permitted by applicable Law, elect with the
relevant Governmental Entity to treat a portion of any Straddle Period as a
short taxable period ending as of the close of business on the Closing Date.
Section 8.06 REFUNDS.
(a) The RTMRG Shareholders shall be entitled to all credits and
refunds (including interest received thereon) in respect of any Pre-Closing
Taxable Period relating to RTMRG or any of its Subsidiaries. All credits and
refunds (including interest received thereon) in respect of any Straddle Period
shall be equitably apportioned between the RTMRG Shareholders pursuant to the
principles set forth in Section 8.05. Triarc shall cause each such refund to
which the RTMRG Shareholders are entitled to be paid to the RTMRG Shareholders
promptly following its receipt.
(b) Except as provided in Section 8.06(a), Triarc and its
Subsidiaries shall be entitled to all credits and refunds (including interest
received thereon) in respect of any Taxes of Triarc, RTMRG and their
Subsidiaries.
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Section 8.07 CONVEYANCE TAXES. ARG shall pay all sales, use, value
added, transfer, stamp, registration, documentary, excise, real property
transfer or gains, or similar Taxes ("TRANSFER TAXES") incurred solely as a
result of the consummation of the Mergers; and RTMRG and ARG agree to jointly
file all required change of ownership and similar statements.
Section 8.08 TERMINATION OF TAX SHARING AGREEMENTS. Any and all
Tax Sharing Agreements between RTMRG and its Subsidiaries, on the one hand, and
the RTMRG Shareholders and their Affiliates, on the other hand, shall be
terminated as to RTMRG and its Subsidiaries as of the Closing Date, and RTMRG
and its Subsidiaries shall not be obligated to make any payment pursuant to any
such Tax Sharing Agreement for any past or future period.
Section 8.09 CARRYBACKS. Following the Closing Date, RTMRG and its
Subsidiaries shall, to the extent permissible under applicable Laws, waive the
right to carryback any Tax losses, credits or similar items attributable to such
Person from a taxable period (or portion thereof) beginning after the Closing
Date to a Pre-Closing Taxable Period.
Section 8.10 TAX TREATMENT. So long as the amendment contemplated by
Section 8.13 shall have been made prior to the Closing Date and the Allocation
Requirement is satisfied, Triarc and the RTMRG Shareholders shall file, and
shall cause their respective Affiliates to file, all Federal income Tax Returns
in a manner consistent with the Purchase Price Allocation, and shall take no
position contrary thereto for any Federal income Tax purposes, unless otherwise
required to do so by a good faith resolution of a contest or a change in
applicable law. The RTMRG Shareholders shall file, and shall cause their
respective Affiliates to file, all Federal income Tax Returns in a manner
consistent with the Expected Tax Treatment, and shall take no position contrary
thereto for any Federal income Tax purposes, unless otherwise required to do so
by a good faith resolution of a contest or a change in applicable law.
Section 8.11 RTMRG "EXCESS LOSS ACCOUNTS".
(a) On or prior to the Closing, RTMRG shall, and shall cause each of
its Subsidiaries to, make a capital contribution with respect to the capital
stock of any Subsidiary of RTMRG for which an "excess loss account" (within the
meaning of Treasury Regulation ss. 1.1502-19) exists ("ELA SUBSIDIARY") of any
intercompany note, receivable or other obligation owned by RTMRG or any of its
Subsidiaries with respect to which such ELA Subsidiary is the obligor, each as
set forth on Section 8.11(a) of RTMRG Disclosure Letter.
(b) After the Closing, Triarc may, at its option, make a capital
contribution or cause any of its Subsidiaries (including any of RTMRG and its
Subsidiaries) to, make a capital contribution with respect to the stock of any
ELA Subsidiary in the amounts set forth on Section 8.11(b) of the RTMRG
Disclosure Letter (such contributions, as adjusted under the immediately
following sentence, the "TRIARC ELA CONTRIBUTIONS"). Prior to the Closing Date,
the RTMRG Representatives shall
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deliver to Triarc a written confirmation of, or revision to, Section 8.11(b) of
the RTMRG Disclosure Letter which shall set forth the capital contributions
(other than any contributions contemplated by Section 8.11(a)) which, if made,
would eliminate all "excess loss account" (within the meaning of Treasury
Regulation ss. 1.1502-19) amounts with respect to each ELA Subsidiary as of the
Closing Date; and (x) the amount of such capital contributions with respect to
each ELA Subsidiary shall not be materially greater than the amounts set forth
on Section 8.11(b) of the RTMRG Disclosure Letter delivered pursuant to the
immediately preceding sentence, (y) the amount of such capital contributions
with respect to each ELA Subsidiary shall be less than the amount of outstanding
third-party indebtedness for such ELA Subsidiary which could be prepaid on the
Closing Date, and (z) the amount of any penalty related to the prepayment of any
such outstanding third-party indebtedness shall not differ materially from the
amount of such penalty set forth on Section 5.13(o) of the RTMRG Disclosure
Schedule.
Section 8.12 TRIARC TAX SHARING AGREEMENT. If the Triarc B-2 Election
shall have been made, Triarc shall enter into a Tax Sharing Agreement with ARG
and its Subsidiaries with terms generally consistent with the terms set forth in
the T/A Tax Sharing Agreement and with effect from and after the Closing Date,
except as otherwise required in connection with the Debt Financing.
Section 8.13 RTMAC MANAGEMENT AGREEMENT. Prior to the Closing Date,
RTMAC shall amend any management contract or similar arrangements with RTMRG and
its Subsidiaries to provide payment by RTMAC of $3 million per annum of costs
and expenses related to capital leases of RTMAC and its Subsidiaries, and a
management fee payable by RTMRG and its Subsidiaries to RTMAC in an amount of $8
million per annum.
ARTICLE IX
CONDITIONS TO CLOSING
Section 9.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGERS. The respective obligation of each party to this Agreement to effect the
Mergers is subject to the satisfaction or waiver by Triarc and RTMRG on or prior
to the Closing Date of each of the following conditions:
(a) ANTITRUST. The waiting period applicable to the consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements
under the HSR Act shall have expired or been terminated.
(b) CONSENTS. All material consents, approvals and other
authorizations of any Governmental Entity required to consummate the Mergers and
the other transactions contemplated by this Agreement and the Ancillary
Agreements (other than the filing of the First Certificate of Merger with the
Secretary of State of the State of Georgia and the Second Certificate of Merger
with the Secretaries of State of the States of Delaware and Georgia) shall have
been obtained.
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(c) NO INJUNCTIONS OR RESTRAINTS. No Governmental Entity shall have
enacted, issued, promulgated, enforced or entered any Laws or Orders (whether
temporary, preliminary or permanent) that (i) restrain, enjoin or otherwise
prohibit consummation of the transactions contemplated by this Agreement or the
Ancillary Agreements or (ii) could reasonably be expected to have a Triarc
Material Adverse Effect (if the Triarc B-1 Election shall have been made), an
ARG Material Adverse Effect (if the Triarc B-2 Election shall have been made) or
an RTMRG Material Adverse Effect. No Governmental Entity shall have instituted
any proceeding seeking any such Orders.
(d) RTMAC PURCHASE. The RTMAC Purchase shall be consummated
simultaneously with the First Merger.
(e) RTMMC PURCHASE. The RTMMC Purchase shall be consummated
simultaneously with the First Merger.
Section 9.02 CONDITIONS TO OBLIGATIONS OF THE TRIARC PARTIES TO
EFFECT THE MERGERS. The obligations of the Triarc Parties to effect the Mergers
are also subject to the satisfaction or waiver by Triarc (in its sole
discretion) on or prior to the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Other than the representations
and warranties of RTMRG contained in Section 5.01 (the first sentence only),
Section 5.02, Section 5.03(a), Section 5.03(b) (the first and second sentences
only), Section 5.04(b), Section 5.07(c) (the penultimate sentence only) and
Section 5.08, the representations and warranties of RTMRG contained in this
Agreement (as such representations and warranties would read if all limitations
or qualifications therein as to materiality or RTMRG Material Adverse Effect (or
similar concept) were deleted therefrom) shall be true and correct in all
respects as of the date of this Agreement and shall be true and correct in all
respects as of the Closing Date as if made on and as of the Closing Date (except
for any representations and warranties made as of a specific date, the accuracy
of which shall be determined by reference to such specific date), unless the
failure or failures of such representations and warranties to be so true and
correct in all respects has not had and would not reasonably be expected to
have, individually or in the aggregate, an RTMRG Material Adverse Effect. The
representations and warranties of RTMRG contained in Section 5.01 (the first
sentence only), Section 5.02, Section 5.03(a), Section 5.03(b) (the first and
second sentences only), Section 5.04(b), Section 5.07(c) (the penultimate
sentence only) and Section 5.08 shall be true and correct in all respects as of
the date of this Agreement and shall be true and correct in all respects as of
the Closing Date as if made on and as of the Closing Date (except for any such
representations and warranties made as of a specific date, the accuracy of which
shall be determined by reference to such specific date).
(b) PERFORMANCE OF OBLIGATIONS. RTMRG shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
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(c) RTM MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall not have occurred any event, and there shall not exist any condition
or set of circumstances, that has had or could reasonably be expected to have,
individually or in the aggregate, an RTM Material Adverse Effect.
(d) CERTIFICATE. Triarc shall have received a certificate, signed by
the RTM Representatives, certifying as to the matters set forth in Section
9.02(a), Section 9.02(b) and Section 9.02(c).
(e) CONSENTS UNDER AGREEMENTS. RTMRG shall have obtained the
consent, approval, waiver or other authorization of each Person, if any, listed
on Section 9.02(e) of the RTMRG Disclosure Letter.
(f) DEBT FINANCING. ARG shall have received the amount of funds set
forth in the Debt Financing Documents as a result of funding thereunder or as a
result of funding from one or more alternative sources of financing on terms not
less favorable, in the aggregate, to ARG than the terms set forth in the Debt
Financing Documents.
(g) DISSENTING RTMRG SHAREHOLDERS. RTMRG Shareholders representing
not more than 2% of the outstanding shares of RTMRG Common Stock shall have
dissented or exercised appraisal rights under the GBCC.
(h) ESCROW AGREEMENT. Triarc shall have received a duly executed
copy of the Escrow Agreement from each of the RTMRG Principal Shareholders, each
of the RTMAC Sellers, RTMMC, each of the RTMMC Members, each of the RTM
Representatives and the Escrow Agent.
(i) RTMRG RELATED PARTY ARRANGEMENTS. Triarc shall have received
reasonably satisfactory evidence of the termination, cancellation and repayment
or settlement in full prior to or in connection with the Closing of each RTMRG
Related Party Arrangement, including the repayment of any Indebtedness or
obligation owed by an RTM Related Entity or a shareholder, member, officer or
director of an RTM Party or any of its Subsidiaries to RTMRG or any of its
Subsidiaries, including those included in the RTMRG Shareholders Obligations
Amount (other than as set forth in Section 9.02(i) of the RTMRG Disclosure
Letter; PROVIDED THAT with respect to the RTMRG Shareholders Obligations Amounts
reflected therein as remaining outstanding following the Closing, the applicable
RTMRG Shareholder shall have executed and delivered to RTMRG an amended
promissory note secured by the pledge of all shares of Triarc Class B-1 Common
Stock or Triarc Class B-2 Common Stock received by such shareholder in the
Mergers, all in form and substance reasonably satisfactory to Triarc), and the
termination or cancellation of the Winners Letters of Credit.
(j) ARRANGEMENTS WITH RTMRG EMPLOYEES. ARG or its Subsidiaries
shall have entered into employment agreements with each of the individuals
listed in Section 9.02(j) of the Triarc Disclosure Letter as of the date hereof
on terms agreed to by ARG and such individuals prior to the date hereof.
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(k) CERTAIN OFFICER RESIGNATIONS. Each of the officers of RTMRG
and its Subsidiaries listed in Section 9.02(k) of the Triarc Disclosure Letter
shall have tendered his resignation, effective as of the Closing, without any
Liability after the Closing to RTMRG, Triarc or any of its Affiliates (other
than rights under or provided for in this Agreement, the RTMAC Purchase
Agreement or the RTMMC Purchase Agreement and, to the extent included as current
liabilities in the RTM Estimated Net Liabilities or the RTM Closing Net
Liabilities, unpaid salary and bonus and unreimbursed business expenses incurred
in the ordinary course of business consistent with past practice).
(l) RTMMC AND RTMAC PURCHASE. The RTMAC Aggregate Purchase Price,
and any amounts treated as an adjustment to the RTMAC Aggregate Purchase Price
pursuant to Section 10.08 of the RTMAC Purchase Agreement, shall not cause the
aggregate amount allocated to the assets of RTMAC to be other than an amount
within the RTMAC Asset Range, and the sum of the RTMMC Aggregate Purchase Price,
and any amounts treated as an adjustment to the RTMMC Aggregate Purchase Price
pursuant to Section 10.08 of the RTMMC Purchase Agreement, and the RTMMC Assumed
Liabilities will not be other than an amount within the RTMMC Asset Range (the
"ALLOCATION REQUIREMENT").
(m) 2005 RTM AUDITED FINANCIALS. If the Closing is to occur on or
after the date that is 90 days after May 29, 2005, RTMRG shall have delivered to
Triarc the 2005 RTM Audited Financials.
Section 9.03 CONDITIONS TO OBLIGATION OF RTMRG TO EFFECT THE MERGERS.
The obligation of RTMRG to effect the Mergers is also subject to the
satisfaction or waiver by RTMRG (in its sole discretion) on or prior to the
Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES.
(i) If the Triarc B-1 Election shall have been made, then
(A) other than the representations and warranties of the Triarc Parties
contained in Section 4.01 (the first sentence only), Section 4.02, Section 4.03
(other than paragraph (e) thereof), Section 4.08 and Section 4.13, the
representations and warranties of the Triarc Parties contained in Article IV (as
such representations and warranties would read if all limitations or
qualifications therein as to materiality or Triarc Material Adverse Effect (or
similar concept) were deleted therefrom) shall be true and correct in all
respects as of the date of this Agreement and shall be true and correct in all
respects as of the Closing Date as if made on and as of the Closing Date (except
for any such representations and warranties made as of a specific date, the
accuracy of which shall be determined by reference to such specific date),
unless the failure or failures to be so true and correct in all respects has not
had and would not reasonably be expected to have, individually or in the
aggregate, an Triarc Material Adverse Effect, and (B) the representations and
warranties of the Triarc Parties contained in Section 4.01 (the first sentence
only), Section 4.02, Section 4.03 (other than paragraph (e) thereof), Section
4.08 and Section 4.13 shall be true and correct in all respects as of the date
of this Agreement and
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shall be true and correct in all respects as of the Closing Date as if made on
and as of the Closing Date (except for any such representations and warranties
made as of a specific date, the accuracy of which shall be determined by
reference to such specific date).
(ii) If the Triarc B-2 Election shall have been made, then
(A) other than the representations and warranties of the Triarc Parties
contained in Section 3.01 (the first sentence only), Section 3.02, Section 3.03
(other than paragraph (e) thereof), Section 3.04(b), Section 3.08 and Section
3.13(m)-(n), the representations and warranties of the Triarc Parties contained
in Article III (as such representations and warranties would read if all
limitations or qualifications therein as to materiality or ARG Material Adverse
Effect (or similar concept) were deleted therefrom) shall be true and correct in
all respects as of the date of this Agreement and shall be true and correct in
all respects as of the Closing Date as if made on and as of the Closing Date
(except for any such representations and warranties made as of a specific date,
the accuracy of which shall be determined by reference to such specific date),
unless the failure or failures to be so true and correct in all respects has not
had and would not reasonably be expected to have, individually or in the
aggregate, an ARG Material Adverse Effect, and (B) the representations and
warranties of the Triarc Parties contained in Section 3.01 (the first sentence
only), Section 3.02, Section 3.03 (other than paragraph (e) thereof), Section
3.04(b), Section 3.08 and Section 3.13(m)-(n) shall be true and correct in all
respects as of the date of this Agreement and shall be true and correct in all
respects as of the Closing Date as if made on and as of the Closing Date (except
for any such representations and warranties made as of a specific date, the
accuracy of which shall be determined by reference to such specific date).
(b) PERFORMANCE OF OBLIGATIONS. The Triarc Parties shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date.
(c) TRIARC/ARG MATERIAL ADVERSE EFFECT. Since the date of this
Agreement, there shall not have occurred any event, and there shall not exist
any condition or set of circumstances, that has had or could reasonably be
expected to have, individually or in the aggregate, (i) a Triarc Material
Adverse Effect (if the Triarc B-1 Election shall have been made) or (ii) an ARG
Material Adverse Effect (if the Triarc B-2 Election shall have been made).
(d) OFFICER'S CERTIFICATE. RTMRG shall have received a certificate,
signed on behalf of Triarc by the chief executive officer or chief financial
officer of Triarc, certifying as to the matters set forth in Section 9.03(a),
Section 9.03(b) and Section 9.03(c).
(e) CONSENTS UNDER AGREEMENTS. Triarc shall have obtained the
consent, approval, waiver or other authorization of each Person, if any, listed
on Section 9.03(e) of the Triarc Disclosure Letter.
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(f) CERTIFICATE OF DESIGNATION. If the Triarc B-2 Election shall
have been made, Triarc shall have filed the Certificate of Designation with the
Secretary of State of the State of Delaware.
(g) ESCROW AGREEMENT. The RTM Representatives shall have received
a duly executed copy of the Escrow Agreement from each of Triarc and the Escrow
Agent.
(h) MANAGEMENT SERVICES AGREEMENT. The applicable Mrs. Winners
Obligors shall have received a duly executed copy of the Management Services
Agreement from ARG.
(i) REGISTRATION RIGHTS AGREEMENT. The RTM Representatives shall
have received a duly executed copy of the Registration Rights Agreement from
Triarc.
(j) REPAYMENT OF CERTAIN INDEBTEDNESS. All Indebtedness described
in Section 7.16 of the RTMRG Disclosure Letter shall have been repaid in full
and the RTM Representatives shall have received evidence of the repayment of
such Indebtedness and of the release and termination of any Liens and guarantees
relating to such Indebtedness, other than any such Indebtedness which by its
terms is not permitted to be prepaid at the Closing (or would require
irrevocable notice to be delivered prior to the Closing in order to permit
prepayment at the Closing).
(k) ARBY'S OWNERSHIP. Triarc shall not have sold, transferred,
conveyed or otherwise disposed of, directly or indirectly, all or a substantial
part of the equity interests or assets of ARG and its Subsidiaries, taken as a
whole, and shall not have entered into a definitive agreement to sell, transfer,
convey or otherwise dispose of, directly or indirectly, all or a substantial
part of the equity interests or assets of ARG and its Subsidiaries.
(l) TAX TREATMENT. Triarc shall have agreed to file, and cause its
Affiliates to file, all Federal income Tax Returns in a manner consistent with
the Expected Tax Treatment, and to take no position contrary thereto for any
Federal income Tax purposes, unless otherwise required to do so by a good faith
resolution of a contest or a change in applicable law.
Section 9.04 FRUSTRATION OF CLOSING CONDITIONS. None of the parties
to this Agreement may rely on the failure of any condition set forth in this
Article IX to be satisfied if such failure was caused by such party's failure to
use commercially reasonable efforts to consummate the Mergers and the other
transactions contemplated by this Agreement and the Ancillary Agreements.
Section 9.05 TAX TREATMENT. In the event there is a failure of the
condition set forth in Section 9.03(l), the parties hereto, each acting in good
faith, shall attempt to agree on appropriate amendments to this Agreement so
that the condition set forth in Section 9.03(l) is satisfied.
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Section 9.06 RTMMC AND RTMAC PURCHASE. In the event there is a
failure of the condition set forth in Section 9.02(l), the parties hereto, each
acting in good faith, shall attempt to agree on such arrangements so that the
condition set forth in Section 9.02(l) is satisfied.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.01 GROUNDS FOR TERMINATION. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written consent of Triarc and RTMRG;
(b) by either Triarc or RTMRG:
(i) if the Mergers have not been consummated by November
15, 2005, except that the right to terminate this Agreement under this clause
(b)(i) shall not be available to any party to this Agreement whose failure to
fulfill any of its obligations has been a principal cause of, or resulted in,
the failure to consummate the Mergers by such date;
(ii) if any Law prohibits consummation of the Mergers, the
RTMAC Purchase or the RTMMC Purchase; or
(iii) if any Order restrains, enjoins or otherwise prohibits
consummation of the Mergers, the RTMAC Purchase or the RTMMC Purchase, and such
Order has become final and nonappealable;
(c) by Triarc, if RTMRG breaches any of its representations,
warranties, covenants or agreements contained in this Agreement, which breach
(i) would give rise to the failure of a condition set forth in Section 9.02(a),
Section 9.02(b) or Section 9.02(c) and (ii) has not been cured by RTMRG within
20 Business Days after RTMRG's receipt of written notice of such breach from
Triarc; or
(d) by RTMRG, if any of the Triarc Parties breaches any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach (i) would give rise to the failure of a condition set
forth in Section 9.03(a), Section 9.03(b) or Section 9.03(c) and (ii) has not
been cured by such Triarc Party within 20 Business Days after Triarc's receipt
of written notice of such breach from RTMRG.
Section 10.02 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.01, it shall become void and of no further force and
effect, with no Liability on the part of any party to this Agreement (or any
stockholder, member, director, officer, employee, agent or representative of
such party), except that if such termination results from the willful (a)
failure of any party to perform its obligations or (b) breach by any party of
its representations or warranties contained in this Agreement, then such party
shall be fully liable for any Liabilities incurred or suffered by the other
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parties as a result of such failure or breach. The provisions of this Section
10.02 and Article XII shall survive any termination of this Agreement.
Section 10.03 AMENDMENT. This Agreement may be amended by the parties
to this Agreement at any time, so long as no amendment that requires shareholder
approval under applicable Laws shall be made without such required approval.
This Agreement may not be amended except by an instrument in writing signed by
each of the parties to this Agreement.
Section 10.04 EXTENSION; WAIVER. The Triarc Parties, on the one hand,
and RTMRG, on the other hand, may (a) extend the time for the performance of any
of the obligations of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained in this Agreement or
in any document delivered under this Agreement or (c) subject to applicable
Laws, waive compliance with any of the covenants or conditions contained in this
Agreement. Any agreement on the part of a party to any extension or waiver shall
be valid only if set forth in an instrument in writing signed by such party. The
failure of any part to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
Section 11.01 SURVIVAL.
(a) The express representations and warranties of each party set
forth in this Agreement constitute the sole and exclusive obligation or duty of
such party to the other party with respect to the disclosure of material facts
relating to the transactions contemplated by this Agreement, and each of the
parties, in deciding whether to enter into this Agreement and to consummate the
transactions contemplated hereby, is not relying on any general obligation to
disclose imposed by applicable Laws. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing. All representations and warranties contained in this
Agreement shall terminate and expire 18 months after the Closing Date; PROVIDED,
HOWEVER, that Claims asserted in good faith with reasonable specificity (to the
extent known at such time)and in writing by notice from either party to the
breaching party prior to such date shall not thereafter be barred by the
expiration of the relevant representation or warranty to the extent that it
relates to such Claims; PROVIDED, FURTHER, that, subject to Section 11.01(b),
the representations and warranties contained in (a) Section 3.16 and Section
5.16 shall terminate and expire three years after the Closing Date; (b) Section
3.01 (first sentence only), Section 3.02, Section 3.03 (other than paragraph (e)
thereof), Section 3.04(b), Section 3.29, Section 4.01 (first sentence only),
Section 4.02, Section 4.03 (other than paragraph (e) thereof), Section 4.12,
Section 5.01 (first sentence only), Section 5.02, Section 5.03(a), Section
5.03(b) (first and second sentences only), Section 5.04(b) and Section 5.27
shall survive without limitation; and (c) Section 3.13, Section 3.14, Section
4.13, Section 5.13 and Section 5.14 shall terminate and expire on the date which
is 90 days after the date upon which the Liability to which any claim
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based upon, arising out of or otherwise in respect of any inaccuracy or breach
of any such representation or warranty may relate is barred by all applicable
statutes of limitations (including all periods of extension, whether automatic
or permissive). Except as otherwise expressly provided in this Agreement, the
covenants and agreements contained in this Agreement shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT, (I) IF THE TRIARC B-1 ELECTION SHALL HAVE BEEN MADE, THEN THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III (AND THE CORRESPONDING
PORTIONS OF THE TRIARC DISCLOSURE LETTER) SHALL AUTOMATICALLY AND IMMEDIATELY
TERMINATE AND EXPIRE AT THE TIME OF SUCH TRIARC B-1 ELECTION AND BE OF NO
FURTHER FORCE AND EFFECT FOR ANY PURPOSE OF THIS AGREEMENT OR OTHERWISE, (II) IF
THE TRIARC B-2 ELECTION SHALL HAVE BEEN MADE AND THE TRIGGER EVENT SHALL HAVE
OCCURRED, THEN THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV (AND
THE CORRESPONDING PORTIONS OF THE TRIARC DISCLOSURE LETTER) SHALL AUTOMATICALLY
AND IMMEDIATELY TERMINATE AND EXPIRE AT THE TIME OF THE TRIGGER EVENT AND BE OF
NO FURTHER FORCE AND EFFECT FOR ANY PURPOSE OF THIS AGREEMENT OR OTHERWISE, AND
(III) IF THE TRIARC B-2 ELECTION SHALL HAVE BEEN MADE AND THE SHARES OF TRIARC
CLASS B-2 COMMON STOCK ARE CONVERTED INTO SHARES OF TRIARC CLASS B-1 COMMON
STOCK ON JANUARY 3, 2006 BECAUSE THE TRIGGER EVENT HAS NOT OCCURRED OR PRIOR TO
JANUARY 3, 2006 BECAUSE AN ADVERSE BOARD DETERMINATION SHALL HAVE BEEN MADE,
THEN THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III (AND THE
CORRESPONDING PORTIONS OF THE TRIARC DISCLOSURE LETTER) SHALL AUTOMATICALLY AND
IMMEDIATELY TERMINATE AND EXPIRE AT THE TIME OF SUCH CONVERSION AND BE OF NO
FURTHER FORCE AND EFFECT FOR ANY PURPOSE OF THIS AGREEMENT OR OTHERWISE.
Section 11.02 OBLIGATION OF TRIARC TO INDEMNIFY. Subject to the
limitations contained in this Article XI, from and after (a) the Closing, if the
Triarc B-1 Election shall have been made or (b) if the Triarc B-2 Election shall
have been made, the earliest of (x) the Trigger Event, (y) January 3, 2006 and
(z) the date of an Adverse Board Determination, Triarc agrees to indemnify,
defend and hold harmless each RTMRG Shareholder and its Representatives,
successors and assigns (collectively, the "RTMRG INDEMNIFIED PARTIES") from and
against all Losses based upon or arising from:
(a) any breach of or inaccuracy in any representation or warranty
of any Triarc Party contained in this Agreement that, in accordance with Section
11.01(b), is surviving at such time or in the certificate delivered by Triarc
pursuant to Section 9.03(d), as of the date such representation or warranty was
made or as if such representation or warranty were made on and as of the Closing
Date (except for representations and warranties that expressly relate to a
specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date); PROVIDED, that, in the case of any Losses
arising from any breach of or inaccuracy in any representation or warranty
contained in Section 3.13, indemnification under this Section 11.02(a) shall be
limited to Losses attributable to Taxes in excess of the amount of Taxes which
are specifically identified as current liabilities on the ARG Closing Balance
Sheet;
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(b) any breach of any covenant or agreement of any Triarc Party
contained in this Agreement;
(c) if the Triarc B-2 Election shall have been made and the shares
of Triarc Class B-2 Common Stock are converted into shares of Triarc Class B-1
Common Stock upon the occurrence of the Trigger Event, any Liability of Triarc
or any of its Subsidiaries to the extent arising out of or relating to the
business, operations, properties or assets of Triarc and its Subsidiaries other
than the quick-service restaurant business and costs and expenses related to
maintaining Triarc as a public company (an "UNRELATED LIABILITY"), except any
Losses arising out of (x) Taxes of Triarc or its Subsidiaries related to the
Trigger Event or Triarc's interest in AmeriGas Eagle Propane, L.P. (the
successor to National Propane L.P.) (or the disposition of such interest), or
(y) state Taxes of Triarc or its Subsidiaries related to Triarc's interest in
Snapple Beverage Group, Inc., Royal Crown Company, Inc. and their Subsidiaries
(or the disposition of such interest) (collectively, the "EXCLUDED UNRELATED
TAXES"); or
(d) enforcing the indemnification provided for in this Section
11.02, but only if a court of competent jurisdiction determines in a final,
nonappealable judgment that such RTMRG Indemnified Party is entitled to
indemnification under Section 11.02(a), Section 11.02(b) or Section 11.02(c), as
applicable.
Section 11.03 MATTERS PERTAINING TO INDEMNIFICATION BY TRIARC. The
indemnification provided for in Section 11.02 shall be subject to the following
limitations:
(a) The amount of indemnifiable Losses of an RTMRG Indemnified
Party under Sections 11.02(a) or 11.02(c) shall be measured based on the actual
Losses, if any, suffered by such RTMRG Indemnified Party upon the sale, transfer
or other disposition to an unaffiliated third party of shares included in the
Aggregate Share Consideration or issued upon conversion of such shares and not
based on asserted and unrealized diminutions in value thereof.
(b) Triarc shall not be obligated to pay any amounts in respect of
indemnification obligations under Section 11.02(a), except those based upon or
arising from Section 3.01 (first sentence only), Section 3.02, Section 3.03
(other than paragraph (e) thereof), Section 3.04(b), Section 3.07(c) (the second
sentence only), Section 3.13, Section 3.14, Section 3.29, Section 4.01 (first
sentence only), Section 4.02, Section 4.03 (other than paragraph (e) thereof)
and Section 4.13 (the "TRIARC BASKET EXCLUSIONS"), or Section 11.02(c), until
the aggregate amounts for indemnification in respect of indemnification
obligations under such Sections, except those based upon or arising from the
Triarc Basket Exclusions, equals (x) if the Triarc B-1 Election shall have been
made or if the Triarc B-2 Election shall have been made and the shares of Triarc
Class B-2 Common Stock are converted into shares of Triarc Class B-1 Common
Stock on January 3, 2006 because the Trigger Event has not occurred or before
January 3, 2006 because an Adverse Board Determination shall have been made, $6
million, or (y) if the Triarc B-2 Election shall have been made and the shares
of Triarc Class B-2 Common Stock are converted into shares of Triarc Class B-1
Common Stock upon the occurrence
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of the Trigger Event, $15 million (the "TRIARC BASKET AMOUNT"), after which
Triarc shall be obligated to pay in full all such amounts for such
indemnification in excess of the Triarc Basket Amount. Triarc shall not be
obligated to pay any amounts for indemnification under Section 11.02(a), except
those based upon or arising from the Triarc Basket Exclusions, or Section
11.02(c), for any particular Loss unless the amount of such Loss (together with
the amount of all other Losses involving the same or related conduct, facts,
circumstances or events) exceeds $75,000; for the avoidance of doubt, any
amounts for indemnification that Triarc is not obligated to pay pursuant to this
sentence shall not be included in computing whether the Triarc Basket Amount
shall have been exceeded.
(c) Triarc shall be obligated to pay any amounts for indemnification
based on the Triarc Basket Exclusions without regard to the individual or
aggregate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the Triarc
Basket Amount.
(d) The maximum amount of indemnification payments under Section
11.02(a) and (if applicable) Section 11.02(c) to which the RTMRG Indemnified
Parties shall be entitled to receive (other than indemnification in connection
with any of the Triarc Basket Exclusions) shall not exceed an amount equal to
$60 million. Triarc shall not be liable for indemnification under this Agreement
in an amount in excess of $60 million.
(e) For purposes of determining whether a representation, warranty,
covenant or agreement has been breached or is inaccurate, limitations or
qualifications as to dollar amount, materiality, Triarc Material Adverse Effect
or ARG Material Adverse Effect (or similar concept) set forth in such
representation, warranty, covenant or agreement shall not be disregarded, but if
a breach or inaccuracy is so determined, then the amount of any Loss arising
from such breach or inaccuracy of such representation, warranty, covenant or
agreement shall be determined without regard to any limitation or qualification
as to dollar amount, materiality, Triarc Material Adverse Effect or ARG Material
Adverse Effect (or similar concept) set forth in such representation, warranty,
covenant or agreement.
(f) Indemnification of an RTMRG Indemnified Party by Triarc shall
be limited to the amount of any Loss that remains after deducting therefrom (and
the cumulative amount of all Losses for purposes of determining the Triarc
Basket Amount shall be reduced by the amount of) any insurance proceeds or any
indemnity, contribution or other similar payment actually recovered (net of
out-of-pocket costs incurred in connection with such recovery) by an RTMRG
Indemnified Party from any insurer or third party with respect thereto;
PROVIDED, that no RTMRG Indemnified Party shall be obligated to seek any such
recovery.
(g) To the extent that an RTMRG Indemnified Party has recovered all
or any portion of its Losses with respect to any matter arising under one
provision of this Agreement, such RTMRG Indemnified Party shall not be entitled
to recover such portion of such Losses pursuant to other provisions of this
Agreement. Without limiting the
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generality of the foregoing, to the extent any Losses were taken into account
and had the effect of increasing the ARG Estimated Net Liabilities or ARG
Closing Net Liabilities determined pursuant to Section 2.08 and Section 2.09,
respectively, the amount by which such Losses resulted in an increase of the ARG
Estimated Net Liabilities or ARG Closing Net Liabilities, as the case may be,
shall reduce on a dollar-for-dollar basis the amount of such Loss for which the
RTMRG Indemnified Parties are entitled to indemnification under Section 11.02.
(h) In no event shall any RTMRG Indemnified Party be entitled to
be indemnified for or make a claim against Triarc for (i) lost profits or other
consequential, incidental, special or punitive damages resulting hereunder
(other than such damages payable to a Governmental Entity or other Person in
respect of a third party claim as to which such damages were assessed), (ii) any
Losses based upon or arising from any Legal Action threatened or commenced
against Triarc or any of its Subsidiaries or any of their respective directors ,
officers, Affiliates, employees, Representatives, successors or assigns by any
shareholder of Triarc relating to the transactions contemplated by this
Agreement or any of the Ancillary Agreements, (iii) any Taxes payable by such
RTMRG Shareholder in connection with the transactions contemplated by this
Agreement or any of the Ancillary Agreements or (iv) if (x) the Triarc B-1
Election shall have been made or (y) the Triarc B-2 Election shall have been
made and the shares of Triarc Class B-2 Common Stock are converted into shares
of Triarc Class B-1 Common Stock on January 3, 2006 because the Trigger Event
has not occurred or prior to January 3, 2006 because an Adverse Board
Determination shall have been made, any Liability described in Section 11.02(c).
Section 11.04 OBLIGATION OF RTMRG SHAREHOLDERS TO INDEMNIFY. Subject
to the limitations contained in this Article XI, from and after the Closing,
each RTMRG Shareholder (to the extent of the RTM Escrow Fund) and after the RTM
Escrow Fund has been exhausted in full, each RTMRG Principal Shareholder
(jointly and severally, pursuant to the Transaction Support Agreement), agrees
to indemnify, defend and hold harmless Triarc and its Subsidiaries and their
respective directors, officers, control persons (but only to the extent such
control persons have Liability under any federal or state securities Law),
employees, Representatives, successors and assigns (collectively, the "TRIARC
INDEMNIFIED PARTIES"), from and against all Losses based upon or arising from:
(a) any breach of or inaccuracy in any representation or warranty
of RTMRG contained in this Agreement (other than any representation or warranty
contained in Section 5.13, any breach of or inaccuracy in which is addressed in
Article VIII) or in the certificate delivered by the RTM Representatives
pursuant to Section 9.02(d), as of the date such representation or warranty was
made or as if such representation or warranty were made on and as of the Closing
Date (except for representations and warranties that expressly relate to a
specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date);
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(b) any breach of any covenant or agreement of RTMRG contained in
this Agreement (other than any covenant or agreement contained in Section
6.02(p) or Article VIII, any breach of which is addressed in Article VIII);
(c) the failure of any Excluded RTM Affiliate to promptly pay
any monthly invoice submitted by RTMRG to such Excluded RTM Affiliate pursuant
to Section 7.15(a);
(d) except for the Indebtedness set forth in Section 7.16 of the
RTMRG Disclosure Letter, any Liability of RTMRG or any of its Subsidiaries
arising out of or relating to (i) any RTMRG Related Party Arrangement, including
any RTMRG Shareholders Obligations Amounts that remain outstanding after the
Closing Date (other than those owed by any RTMRG Shareholder listed in Section
9.02(i) of the RTMRG Disclosure Letter), or (ii) the business, operations,
properties or assets of any RTM Related Entity, including any guaranties, leases
or subleases by RTMRG or any of its Subsidiaries of real property currently or
formerly used as a Mrs. Winners or Lees restaurant and not currently used in the
Business and any amounts drawn under the Winners Letters of Credit after the
Closing Date;
(e) any Legal Action (other than in respect of Dissenting Shares
under Article 13 of the GBCC) threatened or commenced by an RTMRG Shareholder,
an RTMMC Member or an RTMAC Seller relating to the transactions contemplated by
this Agreement, the RTMMC Purchase Agreement or the RTMAC Purchase Agreement
(other than any such Legal Action threatened or commenced by any party to such
agreement to enforce against any Triarc Party, ARG or RTMMC Acquisition Sub the
terms of this Agreement, the RTMMC Purchase Agreement, the RTMAC Purchase
Agreement or agreements contemplated hereby or thereby); or
(f) enforcing the indemnification provided for in this Section
11.04(a), but only if a court of competent jurisdiction determines in a final,
nonappealable judgment that such Triarc Indemnified Party is entitled to
indemnification under Section 11.04(a), Section 11.04(b), Section 11.04(c),
Section 11.04(d) or Section 11.04(e), as applicable.
Section 11.05 MATTERS PERTAINING TO INDEMNIFICATION BY THE RTMRG
SHAREHOLDERS. The indemnification provided for in Section 11.04 shall be subject
to the following limitations:
(a) The RTMRG Shareholders shall not be obligated to pay any amounts
in respect of indemnification obligations under Section 11.04(a), except those
based upon or arising from Section 5.01 (the first sentence only), Section 5.02,
Section 5.03(a), Section 5.03(b) (the first and second sentences only), Section
5.04(b), Section 5.07(c) (the second sentence only), Section 5.14, Section 5.26
(the last sentence only) or Section 5.27 (the "RTMRG BASKET EXCLUSIONS"), until
the aggregate amounts for indemnification in respect of indemnification
obligations under (i) such Section, except those based upon or arising from the
RTMRG Basket Exclusions, (ii) Section 10.04(a)(i) and Section 10.04(b)(i) of the
RTMAC Purchase Agreement,
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except those based upon or arising from the RTMAC Basket Exclusions, and (iii)
Section 10.04(a)(i) and Section 10.04(b)(i) of the RTMMC Purchase Agreement,
except those based upon or arising from the RTMMC Basket Exclusions, equals $5
million (the "RTM BASKET AMOUNT"), after which the RTMRG Shareholders shall be
obligated to pay in full all such amounts for such indemnification in excess of
the RTM Basket Amount. The RTMRG Shareholders shall not be obligated to pay any
amounts in respect of indemnification obligations under Section 11.04(a), except
those based upon or arising from the RTMRG Basket Exclusions, for any particular
Loss unless the amount of such Loss (together with the amount of all other
Losses under this Agreement, the RTMMC Purchase Agreement and the RTMAC Purchase
Agreement involving the same or related conduct, facts, circumstances or events)
exceeds $50,000 (or $75,000 in the case of any Loss (or Losses involving the
same or related conduct, facts, circumstances or events) based upon or arising
from breaches of or inaccuracies in the representations and warranties contained
in Section 5.16); for the avoidance of doubt, any amounts for indemnification
that the RTMRG Shareholders are not obligated to pay pursuant to this sentence
shall not be included in computing the RTM Basket Amount.
(b) The RTMRG Shareholders shall be obligated to pay any amounts for
indemnification based on the RTMRG Basket Exclusions without regard to the
individual or aggregate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the RTM Basket
Amount.
(c) The maximum amount of indemnification payments under Section
11.04(a) of this Agreement, Section 10.04(a)(i) and Section 10.04(b) of the
RTMAC Purchase Agreement and Section 10.04(a)(i) and Section 10.04(b)(i) of the
RTMMC Purchase Agreement which the Triarc Indemnified Parties shall be entitled
to receive (other than indemnification in connection with any of the RTMRG
Basket Exclusions, the RTMAC Basket Exclusions and the RTMMC Basket Exclusions)
shall not exceed in the aggregate an amount equal to $40 million. No RTMRG
Principal Shareholder will be liable for indemnification under this Agreement
(whether pursuant to Article VIII or this Article XI), including in this
calculation such RTMRG Principal Shareholder's pro rata share of indemnification
(but not purchase price adjustment) payments made from the RTM Escrow Fund, in
an amount in excess of the sum of (x) 100% of the sum of (i) the Per Share
Merger Consideration received by, and to the extent the following reduces dollar
for dollar the amount of Per Share Merger Consideration otherwise payable, the
RTMRG Shareholders Obligations Amount as of immediately prior to the Closing
owed by, such RTMRG Principal Shareholder, (ii) the portion of the RTMAC
Aggregate Purchase Price received by such RTMRG Principal Shareholder and (iii)
a pro rata portion of the RTMMC Aggregate Purchase Price based on such RTMRG
Principal Shareholder's percentage interest in RTMMC immediately prior to the
Closing, PLUS (y) a pro rata portion of 12.9% of the Aggregate Merger
Consideration, such portion to be based on the number of shares of RTMRG Common
Stock held by such RTMRG Principal Shareholder relative to the total number of
shares of RTMRG Common Stock held by all RTMRG Principal Shareholders
immediately prior to the First Effective Time, MINUS (z) an amount equal to any
indemnification
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claims paid by such RTMRG Principal Shareholder under the RTMAC Purchase
Agreement or the RTMMC Purchase Agreement.
(d) In seeking indemnification hereunder, the Triarc Indemnified
Parties shall first exercise their remedies with respect to the RTM Escrow Fund
pursuant to the Escrow Agreement and, if the RTM Escrow Fund has been exhausted
in full, with respect to the RTM Principal Shareholders (individually or
jointly) directly pursuant to the Transaction Support Agreement.
(e) For purposes of determining whether a representation, warranty,
covenant or agreement has been breached or is inaccurate, limitations or
qualifications as to dollar amount, materiality or RTMRG Material Adverse Effect
(or similar concept) set forth in such representation, warranty, covenant or
agreement shall not be disregarded but if a breach or inaccuracy is so
determined, the amount of any Loss arising from such breach or inaccuracy of
such representation, warranty, covenant or agreement shall be determined without
regard to any limitation or qualification as to dollar amount, materiality or
RTMRG Material Adverse Effect (or similar concept) set forth in such
representation, warranty, covenant or agreement.
(f) Indemnification of a Triarc Indemnified Party by the RTMRG
Shareholders shall be limited to the amount of any Loss that remains after
deducting therefrom (and the cumulative amount of all Losses for purposes of
determining the RTM Basket Amount shall be reduced by the amount of) any
insurance proceeds or any indemnity, contribution or other similar payment
actually recovered (net of out-of-pocket costs incurred in connection with such
recovery) by a Triarc Indemnified Party from any insurer or third party with
respect thereto; PROVIDED, that no Triarc Indemnified Party shall be obligated
to seek any such recovery.
(g) To the extent that a Triarc Indemnified Party has recovered all
or any portion of its Losses with respect to any matter arising under one
provision of this Agreement, such Triarc Indemnified Party shall not be entitled
to recover such portion of such Losses pursuant to other provisions of this
Agreement, the RTMAC Purchase Agreement or the RTMMC Purchase Agreement. Without
limiting the generality of the foregoing, to the extent any Losses were taken
into account and had the effect of increasing the RTM Estimated Net Liabilities
or RTM Closing Net Liabilities determined pursuant to Section 2.08 and Section
2.09, respectively, the amount by which such Losses resulted in an increase of
the RTM Estimated Net Liabilities or RTM Closing Net Liabilities, as the case
may be, shall reduce on a dollar-for-dollar basis the amount of such Loss for
which the Triarc Indemnified Parties are entitled to indemnification under
Section 11.04.
(h) In no event shall any Triarc Indemnified Party be entitled to
be indemnified for or make a claim against the RTMRG Shareholders for lost
profits or other consequential, incidental, special or punitive damages
resulting hereunder (other than such damages payable to a Governmental Entity or
other Person in respect of a third party claim as to which such damages were
assessed).
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Section 11.06 PROCEDURE FOR INDEMNIFICATION. The party making a claim
under this Article XI is referred to as the "INDEMNIFIED PARTY," and the party
against whom such claims are asserted under this Article XI is referred to as
the "INDEMNIFYING PARTY." If the Indemnifying Party is an RTMRG Shareholder, the
RTM Representatives shall exercise, in accordance with Section 12.17, all rights
of such RTMRG Shareholder as an Indemnifying Party in this Section 11.06, and
for procedural purposes only, all references to the Indemnifying Party in this
Section 11.06 shall be deemed to refer to the RTM Representatives. All claims by
any Indemnified Party under this Article XI shall be asserted and resolved as
follows:
(a) NOTICE OF ASSERTED LIABILITY. Promptly after receipt by the
Indemnified Party of notice of the commencement of any action or proceeding, the
assertion of any claim by a third party, the imposition of any penalty or
assessment or a claim not involving a third party for which the Indemnified
Party seeks to be indemnified that may result in a Loss (each, an "ASSERTED
LIABILITY"), the Indemnified Party shall give written notice of such Asserted
Liability (the "CLAIMS NOTICE") to the Indemnifying Party. The failure to give
such prompt written notice shall not, however, relieve the Indemnifying Party of
its indemnification obligations, except and only to the extent that the
Indemnifying Party forfeits rights or defenses by reason of such failure or
actually incurs an incremental out-of-pocket expense by reason of such failure.
The Claims Notice shall describe the Asserted Liability in reasonable detail,
including (i) the representation, warranty, covenant or agreement that is
alleged to have been inaccurate or to have been breached, (ii) the basis for
such allegation, including the provision of supporting documentation and (iii)
if known, the aggregate amount of the Losses for which a claim is being made
under this Article XI or, to the extent that such Losses are not known or have
not been incurred at the time such claim is made, an estimate, to be prepared in
good faith and accompanied by supporting documentation, of the aggregate
potential amount of such Losses.
(b) NON-THIRD PARTY CLAIMS. If the Claims Notice from the
Indemnified Party pertains to an Asserted Liability other than a claim or demand
from a third party, then the Indemnifying Party shall have 30 days following
receipt of the Claims Notice to make such investigation at the expense of the
Indemnifying Party of the Asserted Liability as the Indemnifying Party deems
necessary or desirable. For the purposes of such investigation, the Indemnified
Party agrees to make available to the Indemnifying Party the information relied
upon by the Indemnified Party to substantiate the Asserted Liability and such
other information in its possession that the Indemnifying Party may reasonably
request for purposes of such investigation. If the Indemnified Party and the
Indemnifying Party agree at or prior to the expiration of said 30 day period (or
any mutually agreed upon extension thereof) on the validity and amount of such
Asserted Liability, the Indemnifying Party shall promptly pay to the Indemnified
Party the full amount of the claim by wire transfer of immediately available
funds to an account designated by the Indemnified Party. If the Indemnified
Party and the Indemnifying Party do not agree at or prior to the expiration of
said 30 day period (as such period may be extended by mutual agreement) on the
validity and amount of such Asserted Liability, then each of the Indemnified
Party and the Indemnifying Party may pursue the remedies available under this
Agreement.
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(c) OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS.
(i) If the Claims Notice pertains to an Asserted Liability
that relates to a claim or demand from a third party, the Indemnifying Party may
elect to compromise or defend, at its own expense and by its own counsel, such
Asserted Liability; PROVIDED, that if the Indemnifying Party is an RTMRG
Shareholder, such Indemnifying Party shall not have the right to defend or
direct the defense of any such Asserted Liability that is asserted directly or
indirectly by or on behalf of a Person that is a current or prospective supplier
or franchisee of Triarc or any of its Subsidiaries if in the reasonable judgment
of the Indemnified Party (which may be asserted at any time) the Indemnifying
Party's defense of such Asserted Liability could reasonably be expected to have
a material adverse effect on the Indemnified Party's existing or prospective
relationship with such current or prospective supplier or franchisee.
(ii) If the Indemnifying Party elects to compromise or
defend such Asserted Liability, it shall promptly notify the Indemnified Party
and any other Indemnifying Parties in writing of its intent to do so, and the
Indemnified Party, at the expense of the applicable Indemnifying Party or
Indemnifying Parties, shall cooperate in the compromise of, or defense against,
such Asserted Liability.
(iii) If the Indemnifying Party elects not to compromise or
defend such Asserted Liability, fails to promptly notify the Indemnified Party
in writing of its election as provided in this Agreement, or otherwise abandons
the defense of such Asserted Liability, the Indemnified Party may pay,
compromise or defend such Asserted Liability and seek indemnification for any
and all Losses based upon, arising from or relating to such Asserted Liability.
Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party shall settle or compromise any Asserted Liability without the
prior written consent of the other (which consent shall not be unreasonably
withheld, conditioned or delayed);
(iv) The Indemnified Party shall have the right to
participate in the defense of any Asserted Liability with counsel selected by it
and reasonably satisfactory to the Indemnifying Party subject to the
Indemnifying Party's right to control the defense. The fees and disbursements of
such counsel shall be at the expense of the Indemnified Party; PROVIDED, that if
in the reasonable opinion of counsel to the Indemnified Party, (I) there are
legal defenses available to an Indemnified Party that are different from or
additional to those available to the Indemnifying Party or (II) there exists a
conflict of interest between the Indemnifying Party and the Indemnified Party
that cannot be waived, the Indemnifying Party shall be liable for the reasonable
legal fees and expenses of one separate counsel to all of the applicable
Indemnified Parties in addition to one local counsel in each jurisdiction that
may be necessary or appropriate; PROVIDED, that the Indemnified Parties shall
use commercially reasonable efforts (to the extent the Indemnified Parties
reasonably believe it appropriate to do so) to minimize the need for local
counsel. If the Indemnifying Party chooses to defend any Asserted Liability, the
Indemnified Party shall make available to the Indemnifying Party any personnel,
books, records or other documents within its control that are necessary or
appropriate for such defense.
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(v) The rights of the RTMRG Shareholders under this Section
11.06(c) with respect to any Asserted Liability for which all of the RTMRG
Shareholders or RTMRG Principal Shareholders, as the case may be, are
Indemnifying Parties may be exercised solely by the RTM Representatives and, if
the RTM Representatives elect to defend such Asserted Liability, the RTM
Representatives shall have sole and exclusive control over such defense as
between the RTMRG Shareholders.
(vi) Notwithstanding any other provision of this Agreement,
the provisions of this Section 11.06(c) shall not apply to any Asserted
Liability for Taxes.
Section 11.07 SOLE AND EXCLUSIVE REMEDY. Except as otherwise provided
in Section 12.14, from and after the Closing, the remedies provided in Article
VIII and this Article XI and the Escrow Agreement shall be the sole recourse of
all parties hereto for all Losses based upon, arising from or relating to any
breach of any representation, warranty or covenant contained in this Agreement
or in any certificate delivered pursuant to Section 9.02(d) or Section 9.03(d);
PROVIDED, that the remedies provided in Article VIII shall be the sole remedy of
the Triarc Indemnified Parties for all Tax Losses. Nothing in this Section 11.07
shall limit any Person's right to seek and obtain any equitable relief to which
any Person shall be entitled or to seek any remedy on account of any Person's
fraud.
Section 11.08 MISCELLANEOUS. It is the intention of the parties to
treat any indemnity payment made under this Agreement with respect to the Merger
as an adjustment to the Aggregate Merger Consideration for all federal, state,
local and foreign Tax purposes and the parties agree to file their Tax Returns
accordingly, except as otherwise required by a change in law or a good faith
resolution of a contest.
ARTICLE XII
MISCELLANEOUS
Section 12.01 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"2005 RTM AUDITED FINANCIALS" has the meaning set forth in Section
7.22.
"ACCOUNTS RECEIVABLE" means, with respect to any Person, all rights of
such Person to payment for goods or services provided by such Person.
"ACCREDITED INVESTOR PER SHARE CASH CONSIDERATION" has the meaning set
forth in Section 2.02(c)(ii)(A).
"ACCREDITED INVESTOR PER SHARE MERGER CONSIDERATION" has the meaning
set forth in Section 2.02(c)(ii).
"ACQUISITION SUB" has the meaning set forth in the recitals.
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"ADJUSTED AGGREGATE MERGER CONSIDERATION VALUE" has the meaning set
forth in Section 2.01(b).
"ADVERSE BOARD DETERMINATION" means a determination by Triarc's board
of directors that the Trigger Event will not occur.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by Contract or otherwise.
"AGGREGATE CASH CONSIDERATION" has the meaning set forth in Section
2.01(a)(i).
"AGGREGATE MERGER CONSIDERATION" has the meaning set forth in Section
2.01(a).
"AGGREGATE SHARE CONSIDERATION" has the meaning set forth in Section
2.01(a).
"AGREEMENT" has the meaning set forth in the preamble.
"ANCILLARY AGREEMENTS" means the Atlanta Office Leases, the Certificate
of Designation, the Corporate Services Agreement, the Escrow Agreement, the
Management Services Agreement, the Registration Rights Agreement, the RTMAC
Purchase Agreement, the RTMMC Purchase Agreement, the Trademark License
Agreement and the Transaction Support Agreement.
"APPLICABLE RATE" means, as of any date, the per annum rate of interest
applicable to borrowings under ARG's revolving credit facility or if ARG has no
revolving credit facility at such time LIBOR plus 175 basis points.
"ARG" has the meaning set forth in the recitals.
"ARG AUDITED FINANCIAL STATEMENTS" has the meaning set forth in Section
3.07(a).
"ARG BENCHMARK" has the meaning set forth in Section 2.08(b).
"ARG CLOSING BALANCE SHEET" has the meaning set forth in Section
2.09(a).
"ARG CLOSING NET LIABILITIES" has the meaning set forth in Section
2.09(a).
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"ARG EMPLOYEE PLAN" has the meaning set forth in Section 3.14(a).
"ARG EMPLOYEES" means all employees of ARG or its Subsidiaries.
"ARG ESTIMATED NET LIABILITIES" has the meaning set forth in Section
2.08(a).
"ARG FINANCIAL STATEMENTS" has the meaning set forth in Section
3.07(a).
"ARG INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in Section
3.17(c).
"ARG INVESTMENTS" has the meaning set forth in Section 3.04(a).
"ARG LEASE" has the meaning set forth in Section 3.12(a)(xiv).
"ARG MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of ARG and its Subsidiaries, taken as a whole, but
shall exclude any change or development resulting from (i) any change in Law or
accounting rules or interpretations thereof, (ii) any change in interest rates,
general economic conditions or changes in the general economic condition of any
segment of the restaurant industry, or (iii) any change resulting from the entry
into or the announcement of this Agreement or the transactions contemplated
hereby, the performance of a party's obligations hereunder or to avoid a breach
of this Agreement or (b) that prevents, materially delays or materially impairs
the ability of any Triarc Party to perform its obligations under this Agreement
and the Ancillary Agreements to which it is a party or to consummate the
transactions contemplated hereby or thereby.
"ARG MATERIAL CONTRACTS" has the meaning set forth in Section 3.12(a).
"ARG PERMITS" has the meaning set forth in Section 3.10(b).
"ARG REAL PROPERTY" has the meaning set forth in Section 3.18.
"ARG REAL PROPERTY LEASE" has the meaning set forth in Section
3.12(a)(xiii).
"ARG RELATED PARTY ARRANGEMENT" has the meaning set forth in Section
3.27.
"ARG RESTAURANTS" has the meaning set forth in Section 3.25(a).
"ARG SHORTFALL AMOUNT" has the meaning set forth in Section 2.09.
"ARG STATEMENT" has the meaning set forth in Section 2.09(a).
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"ARG THIRD PARTY INTELLECTUAL PROPERTY RIGHTS" has the meaning set
forth in Section 3.17(b).
"ARG UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.07(a).
"ASSERTED LIABILITY" has the meaning set forth in Section 11.06(a).
"ATLANTA OFFICE LEASES" has the meaning set forth in the RTMMC Purchase
Agreement.
"BUSINESS" means the business and operations of RTMRG and its
Subsidiaries in respect of the "Arby's" restaurant franchise and not in respect
of the "Mrs. Winner's" or "Lee's" restaurant franchises.
"BUSINESS DAY" means any day, other than Saturday, Sunday or a day on
which banks in New York City are permitted or required by Law to be closed, and
shall consist of the time period from 12:01 a.m. through 12:00 midnight Eastern
time.
"CANCELLED RTMRG SHAREHOLDER NOTES" has the meaning set forth in
Section 2.04(a)
"CASUALTY INSURANCE CLAIMS" has the meaning set forth in Section
7.15(a).
"CERTIFICATE OF DESIGNATION" has the meaning set forth in the recitals.
"CLAIMS NOTICE" has the meaning set forth in Section 11.06(a).
"CLOSING" has the meaning set forth in Section 1.02.
"CLOSING BALANCE SHEETS" has the meaning set forth in Section 2.09(a).
"CLOSING DATE" has the meaning set forth in Section 1.02.
"CLOSING PRICE" means, with respect to any shares of Triarc Class B-1
Common Stock as of the date of determination, the closing price per share of a
share of Triarc Class B-1 Common Stock on such date published in The Wall Street
Journal (National Edition) or, if no such closing price on such date is
published in The Wall Street Journal (National Edition), the average of the
closing bid and asked prices on such date, as officially reported on the
principal national securities exchange on which shares of Triarc Class B-1
Common Stock are then listed or admitted to trading.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMBINED RTM FINANCIAL STATEMENTS" has the meaning set forth in
Section 7.05(b).
"CONFIDENTIALITY AGREEMENTS" has the meaning set forth in Section
7.01(b).
"CONTEST" has the meaning set forth in Section 8.03(a).
"CONTRACTS" means any written or oral contracts, agreements, licenses,
notes, bonds, mortgages, indentures, commitments, leases or other instruments or
other legally binding obligations.
"CORPORATE SERVICES AGREEMENT" has the meaning set forth in the
recitals.
"CURRENT MARKET PRICE" means, with respect to a share of Triarc Class
B-1 Common Stock or Triarc Class B-2 Common Stock, as applicable, on any date of
determination, the average of the daily Closing Price of shares of Triarc Class
B-1 Common Stock for the immediately preceding five days on which the national
securities exchanges are open for trading; PROVIDED THAT, for purposes of
determining the Adjusted Aggregate Merger Consideration Value for purposes of
Section 2.02(c)(i) only (and not for purposes of Section 2.06 or any other
purpose of this Agreement or otherwise), if the Triarc B-2 Election shall have
been made, the Current Market Price of the Triarc Class B-2 Common Stock shall
be the greater of (x) the Current Market Price of the Triarc Class B-1 Common
Stock and (y) the amount as determined in good faith by TM Capital Corp.
"D&O INDEMNIFIED PARTIES" has the meaning set forth in Section 7.12(a).
"DEBT FINANCING" has the meaning set forth in Section 3.28(a).
"DEBT FINANCING DOCUMENTS" has the meaning set forth in Section
3.28(a).
"DEBT REFINANCINGS" means the payment, defeasance or other adequate
measures for immediate payment at the Closing or within 60 days thereafter of
all Indebtedness for borrowed money and capitalized lease obligations
outstanding as of immediately prior to the Closing (including the payment of all
associated prepayment penalties, premiums, make wholes, breakage or other costs
and expenses payable to the lenders thereunder) of ARG and its Subsidiaries and
of the RTM Parties and their Subsidiaries and the Mrs. Winners Obligors (other
than (i) Indebtedness of ARG and its Subsidiaries that Triarc determines not to
prepay in connection with the Debt Refinancings, (ii) RTM Non-Prepayable Debt,
and (iii) capital leases of ARG or any of its Subsidiaries or any other capital
lease other than those identified in Section 12.01 of the RTMRG Disclosure
Letter to be paid in the Debt Refinancings ), and the release in connection
therewith of all collateral securing, or guarantees in respect of, any such
Indebtedness, including any guarantees made by Triarc or any of its Subsidiaries
(other than ARG or any of its Subsidiaries) in favor of the lenders under such
Indebtedness of ARG and its Subsidiaries. Notwithstanding the foregoing, the
Indebtedness referred to in
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Section 7.16 shall be repaid as part of the Debt Refinancings in the manner
provided in Section 7.16.
"DESIGNATED RTMRG DIRECTOR" has the meaning set forth in Section
1.07(b)(i).
"DEVELOPMENT AGREEMENTS" has the meaning set forth in Section 3.26(b).
"DGCL" has the meaning set forth in the recitals.
"DISPUTE NOTICE" has the meaning set forth in Section 2.09(b).
"DISSENTERS' NOTICE" has the meaning set forth in Section 7.06(c).
"DISSENTING SHARES" has the meaning set forth in Section 2.07(a).
"DLLCA" has the meaning set forth in the recitals.
"DOL" means the United States Department of Labor.
"ELA SUBSIDIARY" has the meaning set forth in Section 8.11(a).
"ENVIRONMENTAL LAWS" shall mean federal, state, local and foreign laws,
principles of common laws, civil laws, regulations and codes, as well as orders,
decrees, judgments or injunctions, issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environment or public or
employee health and safety, in each case as in effect on or prior to the date
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. "ESCROW AGENT" has the meaning set forth in Section 2.05(b).
"ESCROW AGREEMENT" has the meaning set forth in the recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE AGENT" has the meaning set forth in Section 2.04(a).
"EXCHANGE FUND" has the meaning set forth in Section 2.04(a).
"EXCLUDED ASSET DISPOSITION" means any sale, lease, transfer,
termination or other disposition (or series of related sales, leases, transfers
or dispositions) to be completed prior to the Closing by any RTM Party or any of
their Subsidiaries to a Person other than an RTM Party or any of their
Subsidiaries, including any disposition by means of a merger, consolidation or
similar transaction (each referred to for the purposes of this definition as a
"disposition"), of any Excluded Asset.
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"EXCLUDED ASSETS" means (i) life insurance policies, automobiles and
other assets as contemplated by Section 6.02(f) of the RTMRG Disclosure Letter,
Section 5.01(f) of the RTMAC Disclosure Letter or Section 5.01(f) of the RTMMC
Disclosure Letter and (ii) split dollar agreements with RTMRG in effect on the
date hereof.
"EXCLUDED RTM AFFILIATES" has the meaning set forth in Section 7.15(a).
"EXCLUDED SHARES" has the meaning set forth in Section 2.02(b).
"EXCLUDED UNRELATED TAXES" has the meaning set forth in Section
11.02(c).
"EXPECTED TAX TREATMENT" has the meaning set forth in the recitals.
"EXPENSES" has the meaning set forth in Section 12.03(a).
"EXPENSES FUND" has the meaning set forth in Section 2.05(d).
"FAVORABLE BOARD DETERMINATION" has the meaning set forth in Section
7.20.
"FIRPTA CERTIFICATE" has the meaning set forth in Section 2.04(b)(i).
"FIRST CERTIFICATE OF MERGER" has the meaning set forth in Section
1.03(a).
"FIRST EFFECTIVE TIME" has the meaning set forth in Section 1.03(a).
"FIRST MERGER" has the meaning set forth in the recitals.
"FRANCHISE AGREEMENT" has the meaning set forth in Section 3.26(a).
"FRANCHISED RESTAURANT" has the meaning set forth in Section 3.26(a).
"FRANCHISEE" has the meaning set forth in Section 3.26(a).
"GAAP" means United States generally accepted accounting principles.
"GBCC" has the meaning set forth in the recitals.
"GOVERNMENTAL ENTITY" means any international, national, federal,
state, provincial or local governmental, regulatory or administrative authority,
agency, commission, court, tribunal, arbitral body or self-regulated entity,
whether domestic or foreign.
"GROUP INSURANCE CLAIMS" has the meaning set forth in Section 7.15(a).
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
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"IMMEDIATE FAMILY MEMBER" means, with respect to any natural person,
(a) such person's spouse, parents, grandparents, children, grandchildren and
siblings, (b) such person's former spouses and current spouses of such person's
children, grandchildren and siblings and (c) estates, trusts, partnerships and
other entities of which substantially all of the interest is held directly or
indirectly by the foregoing.
"INDEBTEDNESS" means, as to any Person, without duplication (a) all
obligations of such Person for borrowed money (including, without limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured), (b) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable and accrued commercial or trade Liabilities arising in
the ordinary course of business, (c) all interest rate and currency swaps, caps,
collars and similar agreements or hedging devices under which payments are
obligated to be made by such Person, whether periodically or upon the happening
of a contingency, (d) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all obligations of such Person under leases which have been
or should be, in accordance with GAAP consistently applied, recorded as capital
leases, (f) all indebtedness secured by any Lien (other than Liens in favor of
lessors) on any property or asset owned by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person, together with any accrued and unpaid
interest thereon, and (g) any guarantees made by such Person of any of the
Indebtedness of any other Person described in clauses (a) through (f) (other
than guarantees made by ARG or any of its Subsidiaries of any such Indebtedness
of any RTM Party or any of their Subsidiaries or vice versa). For the avoidance
of doubt, guarantees made by any Person of operating leases or any other any
obligation of any other Person that does not constitute Indebtedness shall not
be deemed Indebtedness of such Person.
"INDEMNIFIED PARTY" has the meaning set forth in Section 11.06.
"INDEMNIFYING PARTY" has the meaning set forth in Section 11.06.
"INDEPENDENT ACCOUNTANTS" has the meaning set forth in Section 2.09(c).
"INVENTORY" means all merchantable inventory of food, beverages and
other consumables, paper and supplies, as well as new uniforms and promotional
items located or otherwise used at the Restaurants at the close of business on
the Closing.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" means, (i) as it relates to Triarc, (x) for purposes of
Article III, the knowledge of Douglas N. Benham, Michael T. Welch, Todd
Weyhrich, Jordan Krolick, Curtis S. Gimson and Karen Shelledy after due inquiry,
and (y) for purposes of Article IV, the knowledge of Nelson Peltz, Peter W. May,
Edward P. Garden, Brian L.
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Schorr and Francis T. McCarron, after due inquiry, and (ii) as it relates to
RTMRG, the knowledge of Michael Abt, Jerry Ardizzone, Sharron L. Barton, Susan
Bauer, Daniel Collins, Dennis E. Cooper, Thomas A. Garrett, Michael Lippert,
David Pipes, Robert Rogers, Melissa Strait, John Todd, Russell V. Umphenour, Jr.
and J. Russell Welch, after due inquiry.
"LAWS" means any domestic or foreign laws, statutes, ordinances, rules,
regulations, codes or executive orders executed, issued, adopted, promulgated or
applied by any Governmental Entity which, for the avoidance of doubt, shall
include the rules and regulations of any national securities exchange.
"LEGAL ACTIONS" means any legal actions, claims, demands, arbitrations,
hearings, charges, complaints, investigations, examinations, indictments,
litigations, suits or other civil, criminal, administrative or investigative
proceedings, at law, in equity or otherwise, by or before any Governmental
Entity.
"LENDERS" has the meaning set forth in Section 3.28(a).
"LIABILITIES" means all liabilities, whether accrued contingent,
absolute, inchoate or otherwise.
"LICENSEE" has the meaning set forth in Section 3.26(a).
"LIENS" means any liens, pledges, security interests, claims,
encumbrances, options, rights of first refusal or offer, mortgages, deeds of
trust, easements, restrictive covenants, encroachments or other survey defects
or any other restriction or third party right, including restrictions on the
right to vote equity interests.
"LOSSES" means any and all losses, Liabilities, judgments, damages,
deficiencies, awards, fines, penalties, Taxes, diminutions in value, expenses,
fees, costs, or amounts paid in settlement (including interest and reasonable
costs or expenses (including reasonable attorneys' fees and costs)), arising out
of any incident, event, circumstance or proceeding asserted or initiated or
otherwise occurring or existing in respect of any matter.
"MANAGEMENT SERVICES AGREEMENT" has the meaning set forth in the
recitals.
"MERGERS" has the meaning set forth in the recitals.
"MERGER SUB CORP." has the meaning set forth in the preamble.
"MERGER SUB LLC" has the meaning set forth in the preamble.
"MRS. WINNERS OBLIGORS" means Winners, L.P., Winner's International
Restaurants, Inc., Lee's Famous Recipe, Inc., Mrs. Winners, L.P. and Lee's Co.
Operations.
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"NET LIABILITIES" means, (a) as to ARG and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, and (b) as to
the RTM Parties and their Subsidiaries on a combined basis in accordance with
GAAP consistently applied, the excess of (i) the sum of (A) current liabilities
PLUS (B) Indebtedness (including capitalized lease obligations and obligations
designated as "financing obligations") OVER (ii) current assets, in each case to
the extent GAAP consistently applied would require the item to be recorded on a
balance sheet.
In computing Net Liabilities, notwithstanding the requirements of GAAP:
(a) CURRENT LIABILITIES shall EXCLUDE (without duplication)
(I) deferred tax liabilities,
(II) current liabilities for Expenses,
(III) Indebtedness,
(IV) the current liabilities (including pre-development
costs) in respect of Restaurants that are acquired or first become
operational after the date hereof,
(V) accrued severance or termination costs for employees
terminated or identified to be terminated in connection with the
Closing as a result of the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements (other than
in respect of the individuals listed in Section 5.15 and Section
7.11(h) of the RTMRG Disclosure Letter, Section 6.08(h) of the RTMAC
Disclosure Letter and Section 6.08(h) of the RTMMC Disclosure Letter
and the three individuals previously identified by the parties to this
Agreement,
(VI) accruals for vacation pay for employees terminated or
identified to be terminated in connection with the Closing as a result
of the consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements to the extent such employees would not be
entitled to receive such vacation pay after the Closing, and
(VII) accruals for commitments to contribute up to $1 million
of cash to Arby's Foundation, Inc. that remain unfunded at the Closing.
(b) INDEBTEDNESS shall:
(x) INCLUDE (without duplication) the items of the
type specified in the definition of Indebtedness, subject to clause (y) of this
subparagraph (b), and also the following:
(I) in the case of the RTM Parties and their
Subsidiaries, without duplication, Indebtedness to be repaid as
contemplated by Section 7.16(a) and Indebtedness assumed by
RTMMC
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Acquisition Sub pursuant to Section 1.03(d) of the RTMMC
Purchase Agreement,
(II) in the case of ARG and its Subsidiaries,
without duplication, Indebtedness to be repaid and capital
contributions to be returned as contemplated by Section 7.16(b),
and
(III) prepayment penalties, premiums, make
wholes, breakage and other costs and expenses payable to the
lenders and insurers of Indebtedness solely on account of the
repayment of such Indebtedness in the Debt Refinancings, but
only to the extent that the aggregate amount thereof exceeds the
amount warranted by RTMRG in the second sentence of Section
5.07(c) or by Triarc in the second sentence of Section 3.07(c),
as applicable; and
(y) EXCLUDE (without duplication):
(I) Indebtedness in respect of undrawn
letters of credit or surety bonds,
(II) Indebtedness in respect of Restaurants
that are acquired or first become operational after the date
hereof,
(III) prepayment penalties, premiums, make
wholes, breakage and other costs and expenses other than the
amounts included by reference in clause (b)(x)(II) above, and
(IV) to the extent they would otherwise be
included in Indebtedness, any guaranties of leases or subleases
of any of the Mrs. Winners Obligors that are disclosed pursuant
hereto, and any contingent or residual liability of an entity
for leases of stores transferred to a third party.
(c) CURRENT ASSETS shall:
(x) INCLUDE (without duplication) the items of the
type classified as current assets under GAAP, subject to clause (y) of
this subparagraph (c), and also the following:
(I) as a prepaid expense (regardless of
whether ARG and its Subsidiaries will receive the
benefit thereof after the Closing), (i) amounts paid
prior to the Closing which, had they been accrued but
unpaid at Closing, would constitute Expenses, (ii)
amounts paid prior to the Closing by Triarc or any of
its Subsidiaries or by the RTM Parties or any of their
Subsidiaries (at the request of Triarc) in respect of
retention and other stay arrangements or incentives for
employees of ARG or any of its Subsidiaries, the
relocation of the corporate offices of ARG and its
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Subsidiaries from Ft. Lauderdale, Florida to Atlanta,
Georgia, or the implementation of transitional
operations resulting from the transactions contemplated
by this Agreement and (iii) severance or termination
costs paid prior to the Closing which had they not been
paid prior to the Closing, would be excluded from
current liabilities under clause (a)(V) above,
(II) in the case of ARG and its Subsidiaries,
(x) restricted cash and cash equivalents of ARG and its
Subsidiaries otherwise not classified as a current asset
and (y) the amount (up to $1 million) of cash
contributions made after the date hereof and prior to
the Closing to Arby's Foundation, Inc., and
(III) in the case of the RTM Parties and their
Subsidiaries, the RTMRG Shareholders Obligations Amount
for each RTMRG Shareholder to the extent such amount is
either repaid in connection with the Closing or, to the
extent the Unaccredited Investor Per Share Merger
Consideration or the Accredited Investor Per Share Cash
Consideration, as applicable, is insufficient, after
application to other payments, to repay the RTMRG
Shareholders Obligation Amount of such RTMRG Shareholder
in its entirety, the obligation is secured by a pledge
of shares of Triarc Common Stock on terms reasonably
acceptable to Triarc,
(y) EXCLUDE (without duplication):
(I) any current asset received after the
date hereof (x) under casualty or condemnation claims
relating to loss of real or personal property or (y)
from the sale or other disposition of any Restaurant
(other than the Restaurants identified in Section 12.01
of the RTMRG Disclosure Letter) or non-current asset,
(II) deferred tax assets of any RTM Party or
its Subsidiary and (ii) any asset in respect of a Tax
refund of any RTM Party or its Subsidiary relating to
the Pre-Closing Tax Period,
(III) any receivable arising out of ARG's
obligation to pay Expenses pursuant to Section 12.03(a)
of this Agreement, Section 11.03(a) of the RTMMC
Purchase Agreement or Section 11.03(a) of the RTMAC
Purchase Agreement,
(IV) prepaid expenses to the extent ARG and
its Subsidiaries will not receive the benefit thereof
after the Closing,
(V) any current assets in respect of
Restaurants that are acquired or first become
operational after the date hereof, and
(VI) any current assets in respect of or
arising out of the sale of Restaurants prior to the date
hereof to Cambridge Investments, LLC.
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(d) In the case of ARG and its Subsidiaries, there shall be
disregarded any accrued or paid Liabilities attributable to retention and other
stay arrangements and incentives for employees, the implementation of
transitional operations and the relocation of the corporate offices of ARG and
its Subsidiaries from Ft. Lauderdale, Florida to Atlanta, Georgia.
(e) In the case of the RTM Parties and their Subsidiaries:
(I) to the extent that Triarc requests that the RTM Parties
and their Subsidiaries undertake actions in respect of the relocation
of the corporate offices of ARG and its Subsidiaries from Ft.
Lauderdale, Florida to Atlanta, Georgia, there shall be disregarded any
Liabilities related thereto, and
(II) there shall be (x) excluded (i) any asset or liability
that is an Excluded Asset or any asset or liability of RTMMC that is
not a Purchased Asset or an Assumed Liability under the RTMMC Purchase
Agreement, and (ii) any proceeds from Excluded Asset Dispositions not
distributed to RTMRG Shareholders at or prior to the Closing and (y)
included any accruals for Liabilities related to an Excluded Asset
Disposition.
(f) The amount of cash and cash equivalents in any account will be
reduced by the amount of outstanding checks written against, and withdrawals
made after the close of business on the Closing Date against, such account,
except to the extent such outstanding checks or withdrawals are reflected as a
payable.
"ORDERS" means any orders, judgments, injunctions, awards, decrees or
writs handed down, adopted or imposed by any Governmental Entity.
"PARTICIPATION CONTEST" has the meaning set forth in Section 8.03(b).
"PER SHARE MERGER CONSIDERATION" has the meaning set forth in Section
2.02(c)(ii).
"PERMITS" means any franchises, grants, authorizations, licenses,
registrations, easements, variances, exceptions, consents, certificates,
approvals and other permits of any Governmental Entity.
"PERMITTED LIENS" means (i) Liens for Taxes (and assessments and other
governmental charges) not yet due and payable or that have been paid in full,
(ii) mechanics', landlord's, workmen's, repairmen's, warehousemen's, carriers'
or other like Liens (including Liens created by operation of law) arising in the
ordinary course of business consistent with past practice and securing amounts
that are not yet due and payable or are being contested in good faith, (iii)
Liens in respect of easements, permits, licenses, rights-of-way, restrictive
covenants, reservations or encroachments or other similar non-monetary title
exceptions with respect to real property which do not materially affect the
current use of the underlying asset, (iv) Liens in respect of pledges or
deposits under workers' compensation laws or similar legislation, unemployment
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insurance or other types of social security or to secure the performance of
statutory obligations, surety and appeal, bonds, bids, leases, government
Contracts and similar obligations, (v) municipal by-laws, development
restrictions or regulations, facility cost sharing and servicing Contracts and
zoning, building or planning restrictions or regulations, (vi) Liens securing
Indebtedness to be repaid in the Debt Refinancings and (vii) Liens arising in
connection with this Agreement.
"PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, association, trust or other entity or organization,
including an unincorporated organization, a government or political subdivision
or an agency or instrumentality thereof.
"POST-TRANSITION PERIOD BENEFIT PLANS" has the meaning set forth in
Section 7.11(e).
"PRE-CLOSING RTMRG RETURNS" shall have the meaning set forth in Section
8.04(a).
"PRE-CLOSING TAXABLE PERIODS" has the meaning set forth in Section
8.04(a).
"PRE-CLOSING TAXES" has the meaning set forth in Section 8.01(a)(i).
"PURCHASE PRICE ALLOCATION" means the following allocation: (x) the
aggregate Per Share Merger Consideration (subject to Section 2.02(c)(iv) and as
adjusted for payments pursuant to Section 2.07), and any amounts treated as an
adjustment to the aggregate Per Share Merger Consideration pursuant to Section
11.08, will be allocated to the shares of RTMRG Common Stock outstanding on the
Closing, (y) the RTMAC Aggregate Purchase Price, and any amounts treated as an
adjustment to the RTMAC Aggregate Purchase Price pursuant to Section 10.08 of
the RTMAC Purchase Agreement, will be allocated to the membership interests
acquired in the RTMAC Purchase and (z) the RTMMC Aggregate Purchase Price, and
any amounts treated as an adjustment to the RTMMC Aggregate Purchase Price
pursuant to Section 10.08 of the RTMMC Purchase Agreement, and RTMMC Assumed
Liabilities will be allocated to the RTMMC Purchased Assets.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in the
recitals.
"RELATED PERSON GUARANTORS" has the meaning set forth in Section
7.16(c).
"REPLACEMENT OPTIONS" has the meaning set forth in Section 2.06.
"REPRESENTATIVES" means, with respect to any Person, the directors,
officers, employees, consultants, accountants, legal counsel, investment
bankers, agents and other representatives of such Person and its Subsidiaries.
"REQUIRED DEBT CONSENTS" has the meaning set forth in Section 7.07(b).
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"RESERVES" means the excess of (x) the sum of (i) the aggregate
reserves provided for Taxes of Triarc and its Subsidiaries on the consolidated
financial statements of Triarc for the fiscal quarter ended April 3, 2005 and
(ii) the aggregate reserves provided for Taxes of Triarc and its Subsidiaries in
accordance with GAAP from April 3, 2005 through the Closing Date; OVER (y) the
sum of (i) the aggregate reserves provided for Excluded Unrelated Taxes on the
consolidated financial statements of Triarc for the fiscal quarter ended April
3, 2005 and (ii) the aggregate reserves provided for Excluded Unrelated Taxes in
accordance with GAAP from April 3, 2005 through the Closing Date.
"RESTATED COMBINED RTM AUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 5.07(a).
"RESTATED COMBINED RTM FINANCIAL STATEMENTS" has the meaning set forth
in Section 5.07(a).
"RESTATED COMBINED RTM UNAUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 5.07(a).
"RESTAURANTS" means "Arby's" branded restaurants and, with respect to
any Person, those certain "Arby's" restaurants owned or leased by such Person.
"RTM BASKET AMOUNT" has the meaning set forth in Section 11.05(a).
"RTM BENCHMARK" has the meaning set forth in Section 2.08(c).
"RTM CLOSING BALANCE SHEET" has the meaning set forth in Section
2.09(a).
"RTM CLOSING NET LIABILITIES" has the meaning set forth in Section
2.09(a)
"RTM DISPUTE NOTICE" has the meaning set forth in Section 2.09(b).
"RTM ESCROW FUND" has the meaning set forth in Section 2.05(a).
"RTM ESTIMATED NET LIABILITIES" has the meaning set forth in Section
2.08(a).
"RTM INSURANCE POLICIES" has the meaning set forth in Section 7.15(a).
"RTM MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of the RTM Parties and their Subsidiaries, taken as a
whole, but shall exclude any change or development resulting from (i) any change
in Law or accounting rules or interpretations thereof, (ii) any change in
interest rates, general economic conditions or changes in the general economic
condition of any segment of the restaurant industry, or (iii) any change
resulting from the entry into or the announcement of this Agreement or the
transactions contemplated hereby, the performance of a party's obligations
hereunder
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or to avoid a breach of this Agreement or (b) that prevents, materially delays
or materially impairs the ability of any RTM Party, any RTMRG Shareholder or any
RTMAC Seller, RTMMC or any RTMMC Member to perform its obligations under this
Agreement and the Ancillary Agreements to which it is a party or to consummate
the transactions contemplated hereby or thereby.
"RTM NON-PREPAYABLE DEBT" means all Indebtedness for borrowed money of
any RTM Party or their Subsidiaries or included in the Winners Indebtedness
Amount that is not by its terms permitted to be prepaid, or the holders thereof
has not consented in writing to being prepaid (which consent is in full force
and effect) within 60 days after the Closing Date.
"RTM PARTIES" means each of RTMRG, RTMAC and RTMMC.
"RTM POST-SIGNING RETURNS" has the meaning set forth in 7.02(p).
"RTM RELATED ENTITIES" means, collectively, Lee's Famous Recipe, Inc.,
Crown Restaurants, Inc., Winners Corporation, Winners Partners, Mrs. Winners,
L.P. and Winners International Restaurants, Inc. and their respective
Subsidiaries.
"RTM REPRESENTATIVES" has the meaning set forth in Section 12.17(a).
"RTM SHORTFALL AMOUNT" has the meaning set forth in Section 2.09(e).
"RTM STATEMENT" has the meaning set forth in Section 2.09(a).
"RTM TRANSACTIONS" has the meaning set forth in the recitals.
"RTMAC" has the meaning set forth in the recitals.
"RTMAC AGGREGATE PURCHASE PRICE" has the meaning set forth in the
recitals.
"RTMAC ASSET RANGE" has the meaning set forth in the RTMAC Purchase
Agreement.
"RTMAC BASKET EXCLUSIONS" has the meaning set forth in the RTMAC
Purchase Agreement.
"RTMAC PURCHASE" has the meaning set forth in the recitals.
"RTMAC PURCHASE AGREEMENT" has the meaning set forth in the recitals.
"RTMAC SELLERS" means the "Sellers" as defined in the RTMAC Purchase
Agreement.
"RTMMC" has the meaning set forth in the recitals.
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"RTMMC ACQUISITION SUB" has the meaning set forth in the recitals.
"RTMMC AGGREGATE PURCHASE PRICE" has the meaning set forth in the
recitals.
"RTMMC ASSET RANGE" has the meaning set forth in the RTMMC Purchase
Agreement.
"RTMMC BASKET EXCLUSIONS" has the meaning set forth in the RTMMC
Purchase Agreement.
"RTMMC MEMBERS" means the "Members" as defined in RTMMC Purchase
Agreement.
"RTMMC PURCHASE" has the meaning set forth in the recitals.
"RTMMC PURCHASE AGREEMENT" has the meaning set forth in the recitals.
"RTMMC PURCHASED ASSETS AND ASSUMED LIABILITIES" means, collectively,
the "Purchased Assets" and the "Assumed Liabilities," each as defined in the
RTMMC Purchase Agreement.
"RTMRG" has the meaning set forth in the preamble.
"RTMRG BASKET AMOUNT" has the meaning set forth in Section 11.05(a).
"RTMRG BASKET EXCLUSIONS" has the meaning set forth in Section
11.05(a).
"RTMRG CERTIFICATES" has the meaning set forth in Section 2.02(c)(iii).
"RTMRG COMMON STOCK" has the meaning set forth in the recitals.
"RTMRG DISCLOSURE LETTER" has the meaning set forth in Article V.
"RTMRG EMPLOYEE PLAN" has the meaning set forth in Section 5.14(a).
"RTMRG EMPLOYEES" has the meaning set forth in Section 7.11(a).
"RTMRG INDEMNIFIED PARTIES" has the meaning set forth in Section 11.02.
"RTMRG INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
Section 5.17(c).
"RTMRG INVESTMENTS" has the meanings set forth in Section 5.04(a).
"RTMRG LEASES" has the meaning set forth in Section 5.12(a)(xiv).
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"RTMRG MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of RTMRG and its Subsidiaries, taken as a whole, but
shall exclude any change or development resulting from (i) any change in Law or
accounting rules or interpretations thereof, (ii) any change in interest rates,
general economic conditions or changes in the general economic condition of any
segment of the restaurant industry, or (iii) any change resulting from the entry
into or the announcement of this Agreement or the transactions contemplated
hereby, the performance of a party's obligations hereunder or to avoid a breach
of this Agreement or (b) that prevents, materially delays or materially impairs
the ability of RTMRG or any RTMRG Shareholder to perform its obligations under
this Agreement and the Ancillary Agreements to which it is a party or to
consummate the transactions contemplated hereby or thereby.
"RTMRG MATERIAL CONTRACTS" has the meaning set forth in Section
5.12(a).
"RTMRG OPTIONS" has the meaning set forth in Section 2.06.
"RTMRG PERMITS" has the meaning set forth in Section 5.10(b).
"RTMRG PRE-CLOSING TAX RETURN" has the meanings set forth in Section
8.01(a).
"RTMRG POST-CLOSING TAX RETURN" has the meaning set forth in Section
8.01(a).
"RTMRG PRINCIPAL SHAREHOLDERS" has the meaning set forth in the
recitals.
"RTMRG REAL PROPERTY" has the meaning set forth in Section 5.18.
"RTMRG REAL PROPERTY LEASE" has the meaning set forth in Section
5.12(a)(xiii).
"RTMRG RELATED PARTY ARRANGEMENT" has the meaning set forth in Section
5.26.
"RTMRG RESTAURANTS" has the meaning set forth in Section 5.25.
"RTMRG ROLLOVER OPTIONS" means sixty-nine percent (69%) of each RTMRG
Option held as of the date hereof by Thomas A. Garrett, J. David Pipes and
Michael I. Lippert.
"RTMRG ROLLOVER OPTION SHARES" means the aggregate number of shares of
Triarc Class B-1 Common Stock (if the Triarc B-1 Election shall have been made)
or Triarc Class B-2 Common Stock (if the Triarc B-2 Election shall have been
made) for which the options granted in exchange for the RTMRG Rollover Options
may be exercised (treating such options as fully vested for this purpose) as of
immediately after the Closing.
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"RTMRG SHAREHOLDERS" has the meaning set forth in Section 2.05(a).
"RTMRG SHAREHOLDERS OBLIGATIONS AMOUNT" means, (i) as to any RTMRG
Shareholder, the Indebtedness (including any "board bonus overpayment" amounts)
outstanding immediately prior to the Closing that is owed to RTMRG or any of its
Subsidiaries by such RTMRG Shareholder or any Affiliate (other than any RTM
Party or RTM Related Entity or their respective Subsidiaries) or Immediate
Family Member of such RTMRG Shareholder (that is not itself, himself or herself
an RTMRG Shareholder), including all amounts advanced by RTMRG or any of its
Subsidiaries in connection with the exercise of RTMRG Options and (ii) as to the
RTMRG Shareholders collectively, the aggregate of such amounts.
"RTMRG TAX BASKET AMOUNT" has the meaning set forth in Section 8.01(a).
"RTMRG THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS" has the meaning set
forth in Section 5.17(b).
"RTMRG TRANSACTIONS" means any transactions among any of the Triarc
Parties, RTMRG, its shareholders, or any of their Subsidiaries or any of their
Affiliates contemplated by this Agreement, the RTMAC Purchase Agreement or the
RTMMC Purchase Agreement to occur on or before the Closing Date, including any
Excluded Asset Dispositions, any payment of the Aggregate Merger Consideration,
the RTMAC Aggregate Purchase Price or the RTMMC Aggregate Purchase Price and the
transactions described in Section 7.15, Section 7.16, Section 7.18, Section
7.19, Section 8.08, Section 8.11, Section 9.02(i) and Section 12.18 of this
Agreement and Section 6.02 of the RTMRG Disclosure Letter; Section 1.03, Section
6.11, Section 8.02(g), Section 8.02(h), Section 8.02(i) and Section 8.02(j) of
the RTMMC Purchase Agreement; and Section 6.12 and Section 8.02(g) of the RTMAC
Purchase Agreement.
"RTMRG WRITTEN CONSENT" has the meaning set forth in the recitals.
"SEC" means the United States Securities and Exchange Commission.
"SECOND CERTIFICATE OF MERGER" has the meaning set forth in Section
1.03(b).
"SECOND EFFECTIVE TIME" has the meaning set forth in Section 1.03(b).
"SECOND MERGER" has the meaning set forth in the recitals.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section
7.05(a).
"SOA" has the meaning set forth in Section 7.14.
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"STATEMENTS" has the meaning set forth in Section 2.09(a).
"STRADDLE PERIOD" has the meaning set forth in Section 8.05.
"STRADDLE RETURNS" has the meaning set forth in Section 8.04(c).
"SUBSIDIARY" means, as to any Person, (i) a corporation of which such
Person directly or indirectly owns securities or other equity interests
representing more than fifty percent (50%) of the aggregate voting power or (ii)
any other Person in which such Person, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
"SURVIVING CORPORATION" has the meaning set forth in Section 1.01(a).
"SURVIVING LLC" has the meaning set forth in Section 1.01(b).
"SYBRA" means Sybra, Inc., a Delaware corporation.
"T/A TAX SHARING AGREEMENT" means the Tax Sharing Agreement by and
among Triarc Companies, Inc. and Arby's Inc., effective from and after January
3, 2000.
"TAKEOVER PROPOSAL" means any proposal or offer relating to (i) a
merger, consolidation, share exchange or business combination involving RTMRG or
any of its Subsidiaries, (ii) a sale, lease, exchange, mortgage, transfer or
other disposition, in a single transaction or series of related transactions, of
20% or more of the assets of RTMRG and its Subsidiaries, taken as a whole, (iii)
a purchase or sale of shares of capital stock or other securities, in a single
transaction or series of related transactions, representing 20% or more of the
voting power of the capital stock or similar equity interests of RTMRG or any of
its Subsidiaries, including by way of a tender offer or exchange offer, (iv) a
reorganization, recapitalization, liquidation or dissolution of RTMRG or any of
its Subsidiaries, or (v) any other transaction having a similar effect to those
described in clauses (i) - (iv), in each case other than the transactions
contemplated by this Agreement.
"TAKEOVER STATUTES" has the meaning set forth in Section 7.09.
"TAX" or "TAXES" means (i) any and all federal, state, provincial,
local, foreign and other taxes (including withholding taxes), levies, fees,
imposts, duties, and similar governmental charges (including any interest,
fines, assessments, penalties or additions to tax imposed in connection
therewith or with respect thereto) including (x) taxes imposed on, or measured
by, income, franchise, profits or gross receipts, and (y) ad valorem, value
added, capital gains, sales, goods and services, use, real or personal property,
capital stock, license, branch, payroll, estimated withholding, employment,
social security (or similar), unemployment, compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer and
gains taxes, and customs duties, and (ii) any transferee liability in respect of
any items described in the foregoing clause (i).
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"TAX ACTIONS" has the meaning set forth in Section 6.02(p).
"TAX BENEFITS" has the meaning set forth in Section 8.01(b).
"TAX COSTS" has the meaning set forth in Section 8.01(b).
"TAX LOSS" has the meaning set forth in Section 8.01(a).
"TAX RETURNS" means any and all reports, returns, declarations, claims
for refund, elections, disclosures, estimates, information reports or returns or
statements required to be supplied to a taxing authority in connection with
Taxes, including any schedule or attachment thereto or amendment thereof.
"TAX SHARING AGREEMENT" means any agreement relating to the sharing,
allocation or indemnification of Taxes, or any similar agreement, Contract or
arrangement.
"TM CAPITAL" means TM Capital Corp., a Delaware corporation.
"TRADEMARK LICENSE AGREEMENT" has the meaning set forth in the RTMMC
Purchase Agreement.
"TRANSACTION SUPPORT AGREEMENT" has the meaning set forth in the
recitals.
"TRANSFER TAXES" has the meaning set forth in Section 8.07.
"TRANSITION PERIOD" has the meaning set forth in Section 7.11(d).
"TRIARC" has the meaning set forth in the preamble.
"TRIARC AUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 4.07.
"TRIARC B-1 ELECTION" has the meaning set forth in Section
2.01(a)(ii)(A).
"TRIARC B-2 ELECTION" has the meaning set forth in Section
2.01(a)(ii)(B).
"TRIARC BASKET AMOUNT" has the meaning set forth in Section 11.03(b).
"TRIARC BASKET EXCLUSIONS" has the meaning set forth in Section
11.03(b).
"TRIARC BYLAWS" has the meaning set forth in Section 1.07(a).
"TRIARC CERTIFICATE" has the meaning set forth in Section 2.04(c).
"TRIARC CERTIFICATE OF INCORPORATION" has the meaning set forth in
Section 1.07(a).
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"TRIARC CLASS A COMMON STOCK" has the meaning set forth in Section
3.03(a).
"TRIARC CLASS B COMMON STOCK" has the meaning set forth in the
recitals.
"TRIARC CLASS B-1 COMMON STOCK" has the meaning set forth in the
recitals.
"TRIARC CLASS B-2 COMMON STOCK" has the meaning set forth in the
recitals.
"TRIARC CONTRIBUTIONS" has the meaning set forth in the recitals.
"TRIARC CONVERTIBLE NOTES" has the meaning set forth in Section
3.03(b).
"TRIARC DISCLOSURE LETTER" has the meaning set forth in Article III.
"TRIARC ELA CONTRIBUTIONS" has the meaning set forth in Section
8.11(b).
"TRIARC FINANCIAL STATEMENTS" has the meaning set forth in Section
4.07.
"TRIARC INDEMNIFIED PARTIES" has the meaning set forth in Section
11.04.
"TRIARC MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of Triarc and its Subsidiaries, taken as a whole, but
shall exclude any change or development resulting from (i) any change in Law or
accounting rules or interpretations thereof, (ii) any change in interest rates,
general economic conditions or changes in the general economic condition of any
segment of the restaurant or asset management industry, or (iii) any change
resulting from the entry into or the announcement of this Agreement or the
transactions contemplated hereby, the performance of a party's obligations
hereunder or to avoid a breach of this Agreement or (b) that prevents,
materially delays or materially impairs the ability of any Triarc Party to
perform its obligations under this Agreement and the Ancillary Agreements to
which it is a party or to consummate the transactions contemplated hereby or
thereby.
"TRIARC OPTION PLANS" has the meaning set forth in Section 3.03(b).
"TRIARC PARTIES" has the meaning set forth in the preamble.
"TRIARC SEC REPORTS" has the meaning set forth in Section 4.06.
"TRIARC UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 4.07.
"TRIGGER EVENT" has the meaning set forth in the Certificate of
Designation.
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"UNACCREDITED INVESTOR PER SHARE MERGER CONSIDERATION" has the meaning
set forth in Section 2.03(c)(i).
"UNRELATED LIABILITY" has the meaning set forth in Section 11.02(c)
"WARN" means the Worker Adjustment and Retraining Notification Act, as
amended.
"WINNERS INDEBTEDNESS AMOUNT" means, as of the Closing Date, the
aggregate principal amount of and accrued interest on the Indebtedness of the
Mrs. Winners Obligors set forth in Section 5.07(c) of the RTMRG Disclosure
Letter, plus the amount of all prepayment penalties and premiums payable in
connection with the prepayment of such Indebtedness on the Closing Date.
"WINNERS LETTERS OF CREDIT" means the letters of credit in favor of
Liberty Mutual related to obligations of the Mrs. Winners Obligors or their
Subsidiaries.
Section 12.02 INTERPRETATION. Any reference in this Agreement to a
statute shall be to such statute, as amended from time to time prior to the date
hereof, and to the rules and regulations promulgated thereunder prior to the
date hereof. Any reference to any agreement, document or instrument means such
agreement, document or instrument as amended or otherwise modified from time to
time in accordance with its terms. Unless the context otherwise requires, (1)
all references made in this Agreement to a Section, Schedule or an Exhibit are
to a Section, Schedule or an Exhibit of or to this Agreement, (2) "or" is
disjunctive but not necessarily exclusive, (3) "will" shall be deemed to have
the same meaning as the word "shall" and (4) words in the singular include the
plural and vice versa. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation," whether or not so followed. All references to "$" or
dollar amounts are to lawful currency of the United States of America, unless
otherwise expressly stated. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
Section 12.03 FEES, COSTS AND EXPENSES.
(a) If the RTM Transactions are consummated, all reasonable
out-of-pocket fees and expenses (including those payable to third party
Representatives) incurred by the Triarc Parties or the RTM Parties or their
Subsidiaries on their behalf in connection with this Agreement and the Ancillary
Agreements and the transactions contemplated by this Agreement and the Ancillary
Agreements, including the previously contemplated initial public offering of
Arby's, Inc., the Debt Financing and the Debt Refinancings (other than the costs
and expenses of complying with Section 7.07(b), or any similar costs and
expenses incurred or paid by any RTM Party or its Subsidiaries prior to the date
hereof), including the fees and expenses of Ernst & Young LLP and Deloitte &
Touche LLP ("EXPENSES"), shall be paid by ARG promptly upon receipt of
reasonably detailed invoices and other documentation related thereto. Section
12.03(a) of the Triarc Disclosure Letter and Section 12.03(a) of the RTMRG
Disclosure Letter sets
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forth a true and complete description of the basis upon which the Expenses
payable by or on behalf of the Triarc Parties and RTMRG, respectively, to the
advisors of the Triarc Parties or RTMRG, as the case may be, will be paid.
(b) If the RTM Transactions are not consummated, all Expenses
shall be paid by the party incurring those Expenses, except that the Expenses
incurred in connection with the filing fee under the HSR Act, the Expenses
incurred in connection with the previously contemplated initial public offering
of Arby's, Inc. (including those of Deloitte & Touche LLP in connection with the
previously contemplated initial public offering of Arby's, Inc.), the Debt
Refinancings (other than the costs and expenses of complying with Section
7.07(b), or any similar costs and expenses incurred or paid by any RTM Party or
its Subsidiaries prior to the date hereof), the registration fee in respect of
the Shelf Registration Statement, the fees and expenses of Valuation Research
and the Expenses incurred by RTMRG in connection with its obligations under
Section 7.14 shall be shared 60% by Triarc and 40% by RTMRG, RTMMC and RTMAC.
Section 12.04 NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be delivered by hand or overnight courier service or by facsimile:
if to the Triarc Parties, to:
c/o Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Brian L. Schorr, Esq.
Fax: (212) 451-3216
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Paul D. Ginsberg, Esq.
Fax: (212) 757-3990
if to RTMRG, to:
RTM Restaurant Group, Inc.,
5995 Barfield Road
Atlanta, Georgia 30328-4411
Attention: Dennis E. Cooper
Fax: (404) 847-0183
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with a copy to:
Sutherland Asbill & Brennan LLP
995 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
Attention: Mark D. Kaufman, Esq.
Fax: (404) 853-8806
if to the RTM Representatives, to:
Russell V. Umphenour, Jr.
5995 Barfield Road
Atlanta, Georgia 30328-4411
Fax: (404) 250-4856
and
Dennis E. Cooper
5995 Barfield Road
Atlanta, Georgia 30328-4411
Fax: (404) 250-4856
and
J. Russell Welch 5995 Barfield Road Atlanta, Georgia
30328-4411 Fax: (404) 250-4856
with a copy to:
Sutherland Asbill & Brennan LLP
995 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
Attention: Mark D. Kaufman, Esq.
Fax: (404) 853-8806
or to such other Persons, addresses or facsimile numbers as may be designated in
writing by the Person entitled to receive such communication as provided above.
Each such communication shall be effective (a) if delivered by hand, when such
delivery is made at the address specified in this Section 12.04, (b) if
delivered by overnight courier service, the next Business Day after such
communication is sent to the address specified in this Section 12.04 or (c) if
delivered by facsimile, when such facsimile is transmitted to the facsimile
number specified in this Section 12.04 and appropriate confirmation is received.
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Section 12.05 GOVERNING LAW. This Agreement and any claim or
controversy relating hereto shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflicts of law
rules of such state that would result in the application of the law of another
jurisdiction, except to the extent that provisions of the GBCC or the DLLCA are
mandatorily applicable.
Section 12.06 JURISDICTION. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be brought in the United States District
Court for the Southern District of New York or any New York State court sitting
in New York City, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be deemed to have arisen from a transaction
of business in the State of New York, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 12.04 shall be deemed effective service of process on such
party.
Section 12.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 12.08 EXHIBITS AND DISCLOSURE LETTERS. Any matter, information
or item disclosed in the Triarc Disclosure Letter or the RTMRG Disclosure under
any specific representation or warranty or schedule number hereof, shall be
deemed to have been disclosed for all purposes of this Agreement in response to
every representation or warranty in this Agreement in respect of which such
disclosure is reasonably apparent on its face. The inclusion of any matter,
information or item in the Triarc Disclosure Letter or the RTMRG Disclosure
shall not be deemed to constitute an admission of any Liability by Triarc or
RTMRG or any other Person to any third party or otherwise imply, that any such
matter, information or item is material or creates a measure for materiality for
the purposes of this Agreement. Nothing in the RTMRG Disclosure Letter or the
Triarc Disclosure Letter is intended or shall be deemed to broaden the scope of
any representation or warranty contained in this Agreement.
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Section 12.09 NO THIRD-PARTY BENEFICIARIES. Except as provided in
Section 7.10, Article VIII and Article XI, this Agreement is not intended to
confer any rights or remedies upon any Person other than the parties to this
Agreement.
Section 12.10 SEVERABILITY. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted for that provision in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of the invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of that provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of that provision, or the application of that provision, in any other
jurisdiction.
Section 12.11 RULES OF CONSTRUCTION. The parties to this Agreement
have been represented by counsel during the negotiation and execution of this
Agreement and waive the application of any Laws or rule of construction
providing that ambiguities in any agreement or other document shall be construed
against the party drafting such agreement or other document.
Section 12.12 ASSIGNMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of each other party hereto, except as otherwise expressly provided
herein.
Section 12.13 REMEDIES. Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement shall be cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity. The exercise by a party to
this Agreement of any one remedy shall not preclude the exercise by it of any
other remedy.
Section 12.14 SPECIFIC PERFORMANCE. The parties to this Agreement
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties to this Agreement shall be entitled to an injunction or injunctions
(without the payment or posting of any bond) to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States or any state having jurisdiction, this being
in addition to any other remedy to which they are entitled at law or in equity.
Section 12.15 COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto
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were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by the other party
hereto.
Section 12.16 ENTIRE AGREEMENT. This Agreement (including the Annexes
to this Agreement), the Triarc Disclosure Letter, the RTMRG Disclosure Letter,
the Confidentiality Agreements and the Ancillary Agreements constitute the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 12.17 RTM REPRESENTATIVES.
(a) Effective as of the date hereof each RTMRG Principal
Shareholder, by such RTMRG Principal Shareholder's execution and delivery of the
Transaction Support Agreement, hereby irrevocably constitutes and appoints, and
effective as of the Effective Time, each other RTMRG Shareholder, by such RTMRG
Shareholder's acceptance of the Per Share Merger Consideration, will be
conclusively deemed to have irrevocably constituted and appointed, Russell V.
Umphenour, Jr., Dennis E. Cooper and J. Russell Welch, acting by a majority, to
act as his, her or its representatives under this Agreement and the Ancillary
Agreements (the "RTM REPRESENTATIVES"), with full power of substitution, to
exercise the powers and to perform:
(i) the duties required or permitted to be performed by the
RTM Representatives on behalf of the RTMRG Shareholders under and pursuant to
this Agreement and the Ancillary Agreements;
(ii) such other duties as are delegated to the RTM
Representatives under this Agreement and the Ancillary Agreements, to be
performed by the RTM Representatives on behalf of the RTMRG Shareholders in
their capacities as RTMRG Shareholders; and
(iii) such actions as are reasonably incident to any of the
duties referred to in the preceding clauses (i) and (ii) above, including the
taking of any action and the execution and delivery of any agreement or
instrument by or on behalf of each RTMRG Shareholder which the RTM
Representatives deem necessary or reasonably required to accomplish the purposes
of the foregoing. The appointment set forth in this Section 12.17 shall be
coupled with an interest.
(b) Without limiting the generality of the foregoing, the RTM
Representatives, acting by a majority, shall have the right and power to do or
cause to be done any of the following things on behalf of each of the RTMRG
Shareholders and all of them collectively:
(i) act as the sole representatives of the RTMRG
Shareholders and exercise all rights of the RTMRG Shareholders under this
Agreement or the Ancillary Agreements, including the prosecution, defense and
settlement of all claims
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and actions under, and to resolve all matters relating to, indemnification
hereunder or under any related agreement;
(ii) (A) authorize delivery to any Triarc Indemnified Party
of all or a portion of the RTM Escrow Fund in accordance with the Escrow
Agreement, (B) receive any payments made to the RTMRG Shareholders or to the RTM
Representatives on such RTMRG Shareholders behalf pursuant to this Agreement or
the Ancillary Agreements, (C) invest such funds pending their disbursement in
such manner as the RTM Representatives in their sole discretion, acting by a
majority, deem appropriate, and (D) disburse to the RTMRG Shareholders payments
made to the RTM Representatives under this Agreement, the Escrow Agreement or
the Ancillary Agreements; and
(iii) otherwise take all actions and do all things reasonably
required or advisable to accomplish any of the matters referred to in this
Agreement or the Ancillary Agreements, including the execution and delivery of
any documents and instruments, and generally to act for and in the name of the
RTMRG Shareholders as fully as each RTMRG Shareholder could if then personally
present and acting. The RTM Representatives, acting by a majority, are hereby
empowered to determine, in accordance with the terms of this Agreement or the
Ancillary Agreements, the time or times when, the purposes for which, and the
manner in which, the power herein conferred upon the RTM Representatives shall
be exercised.
(c) The Triarc Parties and all other persons dealing with the RTM
Representatives may rely and act upon any writing believed in good faith to be
signed by a majority of the RTM Representatives or an authorized representative
of the RTM Representatives, and may assume that all actions of the RTM
Representatives, acting by a majority, and any authorized representative of the
RTM Representatives have been duly authorized by the RTMRG Shareholders. The
actions, decisions and instructions of the RTM Representatives taken, made or
given pursuant to the authority granted to the RTM Representatives pursuant to
this Section 12.17 shall be conclusive and binding upon each RTMRG Shareholder
and each RTMRG Shareholder's heirs, representatives, successors and assigns, as
applicable, and such Persons shall not have the right to object, dissent,
protest or otherwise contest the same.
(d) The RTM Representatives shall promptly deliver to each RTMRG
Shareholder copies of all statements, notices, letters of direction or other
material communications given or received by any of them in his capacity as one
of the RTM Representatives under this Agreement or any Ancillary Agreement. The
RTM Representatives, acting by a majority, shall have the sole power and
authority, without prior notice to or consultation with any of the RTMRG
Shareholders, to take all actions required or permitted to be taken by the RTM
Representatives, the RTMRG Shareholders or any of them under this Agreement or
any Ancillary Agreement.
(e) The RTM Representatives may execute any of their duties under
this Agreement or any Ancillary Agreement by or through agents and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
the RTM
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Representatives' duties, as the case may be, hereunder and thereunder. The RTM
Representatives shall be entitled to rely on any notice, consent, certificate,
affidavit, letter, telegram, statement or other document believed by the RTM
Representatives to be genuine and correct and to have been signed and sent by
the proper person or persons and, in respect to legal matters, upon the opinion
of counsel selected by the RTM Representatives. The RTM Representative may
invest the Expenses Fund and other funds advanced to them for their expenses in
such interest or non-interest bearing accounts or investments as they deem
appropriate. Any remaining amounts in the Expenses Fund after payment of all of
the RTM Representative's expenses for acting as such, or after making adequate
provision therefor, shall be distributed to RTMRG Shareholders pro rata based on
shares of RTMRG Common Stock owned immediately prior to the First Effective
Time.
(f) The RTM Representatives shall be entitled to reimbursement for
all out-of-pocket expenses, including reasonable attorneys' and accountants'
fees and expenses, incurred by the RTM Representatives in connection with the
administration or enforcement of, or the preservation of any rights of the RTMRG
Shareholders under, this Agreement or any Ancillary Agreement, first out of the
Expenses Fund to the extent thereof and then from the RTMRG Principal
Shareholders, who shall reimburse the RTM Representatives for expenses. Each of
the RTMRG Principal Shareholders shall be responsible for such out-of-pocket
expenses pro rata in proportion to the percentage of the total number of shares
of RTMRG Common Stock held by the RTMRG Principal Shareholders immediately prior
to the Merger.
(g) Actions by the RTM Representatives will be effective only if
taken by a majority of the RTM Representatives. In carrying out their duties and
responsibilities in their capacity as RTM Representatives under this Agreement
or the Ancillary Agreements, neither the RTM Representatives nor any of their
agents shall be liable to any RTMRG Shareholder for any action lawfully taken or
omitted to be taken by him, her, it or them in good faith under this Agreement,
the Merger Agreement or the Ancillary Agreements, except for the RTM
Representatives' or their agents' willful misconduct or fraud.
(h) The RTMRG Principal Shareholders, severally, hereby agree to
indemnify and hold harmless each of the RTM Representatives, his agents,
successors and assigns with respect to any act or omission of or by any of them
absent willful misconduct or fraud in connection with any and all matters
contemplated by this Agreement or the Ancillary Agreements.
(i) If any of the RTM Representatives should die, become disabled
or otherwise become unable to fulfill his responsibilities as one of the RTM
Representatives or shall resign, then the RTMRG Shareholders, the RTMAC Sellers
and the RTMMC Members, by a majority vote based on their respective pro rata
interests in the Aggregate Merger Consideration, shall promptly appoint a
successor representative and shall promptly notify Triarc of such successor. The
authorizations of the RTM Representatives will be effective until their rights
and obligations under this Agreement and the Ancillary Agreements terminate by
virtue of the termination of any and all
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obligations of the RTMRG Shareholders to the Triarc Parties under this Agreement
and the Ancillary Agreements.
Section 12.18 NEUTRAL TREATMENT FOR PRE-APPROVED MATTER.
Notwithstanding anything to the contrary contained in this Agreement, with
respect to the transaction identified in Section 6.02 of the RTMRG Disclosure
Letter as the one being subject to Section 12.18, PROVIDED, that RTMRG shall
have afforded Triarc a reasonable opportunity to review the definitive
agreements related to such transaction prior to their execution and delivery and
such definitive agreements are reasonably satisfactory to Triarc: (a) any
current assets and current Liabilities related to the business, assets and
Liabilities acquired or assumed thereby, and any Indebtedness incurred in
connection therewith, shall be excluded from the calculation of RTM Estimated
Net Liabilities and RTM Closing Net Liabilities, (b) other than Section 6.02, no
representations, warranties or covenants whatsoever shall apply in respect of
such transaction or the business, assets and Liabilities acquired thereby, and
(c) the Triarc Indemnified Parties will not have any rights under Article VIII
or Article XI in respect of such transaction or the business, assets and
Liabilities acquired thereby, other than for any breach of any covenant or
agreement of RTMRG contained in Section 6.02 in respect thereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
TRIARC COMPANIES, INC.
By: /s/ Nelson Peltz
----------------------------------
Name: Nelson Peltz
Title: Chairman & CEO
By: /s/ Peter W. May
----------------------------------
Name: Peter W. May
Title: President & COO
ARBY'S ACQUISITION CO.
By: /s/ Peter W. May
----------------------------------
Name: Peter W. May
Title: Executive Vice President
ARBY'S RESTAURANT, LLC
By: /s/ Peter W. May
----------------------------------
Name: Peter W. May
Title: Executive Vice President
RTM RESTAURANT GROUP, INC.
By: /s/ Dennis E. Cooper
----------------------------------
Name: Dennis E. Cooper
Title: Chairman
By: /s/ J. Russell Welch
----------------------------------
Name: J. Russell Welch
Title: Assistant Secretary
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RTM REPRESENTATIVES:
/s/ Russell V. Umphenour, Jr.
--------------------------------------
RUSSELL V. UMPHENOUR, JR.
/s/ Dennis E. Cooper
--------------------------------------
DENNIS E. COOPER
/s/ J. Russell Welch
--------------------------------------
J. RUSSELL WELCH
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