EXHIBIT 2.5
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EXECUTION COPY
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ASSET PURCHASE AGREEMENT
by and among
TRIARC COMPANIES, INC.,
ARBY'S RESTAURANT GROUP, INC.,
RTMMC ACQUISITION, LLC,
RTM MANAGEMENT COMPANY, L.L.C.,
ALL THE MEMBERS OF
RTM MANAGEMENT COMPANY, L.L.C.
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
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ARTICLE I TRANSFER OF THE BUSINESS; PAYMENT OF AGGREGATE PURCHASE PRICE........2
Section 1.01 Transfer of the Business..................................2
Section 1.02 Excluded Assets...........................................4
Section 1.03 Assumption of Liabilities.................................4
Section 1.04 Liabilities Not Assumed by Acquisition Sub................5
Section 1.05 Sale and Purchase of the Purchased Assets.................6
Section 1.06 Closing...................................................6
Section 1.07 Payment of Aggregate Purchase Price.......................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF RTMMC AND THE MEMBERS.............7
Section 2.01 Organization and Qualification of RTMMC...................7
Section 2.02 Authorization of RTMMC; Enforceability....................7
Section 2.03 Membership Interests......................................7
Section 2.04 Subsidiaries..............................................7
Section 2.05 Governmental Authorizations...............................7
Section 2.06 Non Contravention.........................................8
Section 2.07 Restated Combined RTM Financial Statements;
Internal Controls; Indebtedness..... .....................9
Section 2.08 Absence of Certain Changes or Events.....................10
Section 2.09 Absence of Undisclosed Liabilities.......................10
Section 2.10 Compliance with Laws; Permits............................10
Section 2.11 Legal Actions............................................11
Section 2.12 Contracts................................................11
Section 2.13 Tax Matters..............................................13
Section 2.14 Employee Benefits........................................14
Section 2.15 Labor Matters............................................17
Section 2.16 Environmental Matters....................................17
Section 2.17 Intellectual Property....................................17
Section 2.18 Real Property............................................18
Section 2.19 Purchased Assets and Personal Property...................19
Section 2.20 Sufficiency of Assets....................................19
Section 2.21 Insurance................................................19
Section 2.22 Inventory................................................20
Section 2.23 Accounts Receivable......................................20
Section 2.24 Suppliers................................................20
Section 2.25 Transactions with Affiliates.............................20
Section 2.26 Brokers and Finders......................................20
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MEMBERS.....................21
Section 3.01 Membership Interest......................................21
Section 3.02 Organization and Authority of Such Member;
Enforceability...................... ....................21
Section 3.03 Governmental Authorizations..............................21
Section 3.04 Non-Contravention........................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TRIARC, ARG AND ACQUISITION SUB..22
Section 4.01 Organization and Qualification of Triarc, ARG and
Acquisition Sub.............. ...........................22
Section 4.02 Authorization of Triarc, ARG and Acquisition Sub;
Enforceability............... ...........................23
Section 4.03 Governmental Authorizations..............................23
Section 4.04 Non-Contravention........................................23
Section 4.05 Brokers and Finders......................................24
ARTICLE V INTERIM OPERATIONS COVENANTS........................................24
Section 5.01 Conduct of Business of RTMMC.............................24
Section 5.02 Control of Business Pending Closing......................27
ARTICLE VI ADDITIONAL COVENANTS...............................................28
Section 6.01 Access to Information; Confidentiality...................28
Section 6.02 Commercially Reasonable Efforts..........................28
Section 6.03 Notices of Certain Events................................28
Section 6.04 Consents; Filings........................................29
Section 6.05 Actions With Respect to Debt Financing and Debt
Refinancings................... .........................30
Section 6.06 No Solicitation..........................................31
Section 6.07 Defense of Litigation....................................31
Section 6.08 Employees and Employee Benefits, Etc.....................31
Section 6.09 Public Announcements.....................................33
Section 6.10 Sarbanes-Oxley Compliance................................33
Section 6.11 RTM Trademarks...........................................34
Section 6.12 Bulk Sales...............................................34
ARTICLE VII TAX MATTERS.......................................................34
Section 7.01 Tax Indemnification......................................34
Section 7.02 Tax Indemnification Procedures...........................35
Section 7.03 Tax Audits and Contests; Cooperation.....................36
Section 7.04 Preparation of Tax Returns and Payment of Taxes..........38
Section 7.05 Straddle Periods.........................................39
Section 7.06 Refunds..................................................40
Section 7.07 Conveyance Taxes.........................................40
Section 7.08 Tax Treatment............................................40
Section 7.09 RTMMC Asset Range........................................41
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ARTICLE VIII CONDITIONS TO CLOSING............................................41
Section 8.01 Conditions to Each Party's Obligations to Effect
the Asset Purchase............ ..........................41
Section 8.02 Conditions to Obligations of Triarc, ARG and
Acquisition Sub to Effect the Asset Purchase.............42
Section 8.03 Conditions to Obligations of the RTMMC and the Members
to Effect the Asset Purchase.............................44
Section 8.04 Frustration of Closing Conditions........................45
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER..................................45
Section 9.01 Grounds for Termination..................................45
Section 9.02 Effect of Termination....................................46
Section 9.03 Amendment................................................46
Section 9.04 Extension; Waiver........................................46
ARTICLE X SURVIVAL; INDEMNIFICATION...........................................46
Section 10.01 Survival.................................................46
Section 10.02 Obligation of ARG and Acquisition Sub to Indemnify.......47
Section 10.03 Matters Pertaining to Indemnification by ARG and
Acquisition Sub............... ..........................47
Section 10.04 Obligation of RTMMC and the Members to Indemnify.........49
Section 10.05 Matters Pertaining to Indemnification by RTMMC
and the Members................. ........................51
Section 10.06 Procedure for Indemnification............................53
Section 10.07 Sole and Exclusive Remedy................................55
Section 10.08 Miscellaneous............................................55
ARTICLE XI MISCELLANEOUS......................................................55
Section 11.01 Definitions..............................................55
Section 11.02 Interpretation...........................................68
Section 11.03 Fees, Costs and Expenses.................................68
Section 11.04 Notices..................................................69
Section 11.05 Governing Law............................................71
Section 11.06 Jurisdiction.............................................71
Section 11.07 WAIVER OF JURY TRIAL.....................................71
Section 11.08 Exhibits and Disclosure Letters..........................71
Section 11.09 No Third-Party Beneficiaries.............................72
Section 11.10 Severability.............................................72
Section 11.11 Rules of Construction....................................72
Section 11.12 Assignment...............................................72
Section 11.13 Remedies.................................................72
Section 11.14 Specific Performance.....................................72
Section 11.15 Counterparts.............................................73
Section 11.16 Entire Agreement.........................................73
Section 11.17 RTM Representatives......................................73
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SCHEDULES
Schedule I Members; Membership Interests; Aggregate Purchase Price
ANNEXES
Annex A Form of Escrow Agreement
Annex B Terms of Atlanta Office Lease (5995 Barfield Road)
Annex C Terms of Assignment of Atlanta Office Lease (6045 Barfield Road)
Annex D Form of Trademark License Agreement
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of May 27, 2005 (this "AGREEMENT"),
by and among Triarc Companies, Inc., a Delaware corporation ("TRIARC"); Arby's
Restaurant Group, Inc., a Delaware corporation and an indirect wholly owned
subsidiary of Triarc ("ARG"); RTMMC Acquisition, LLC, a Delaware limited
liability company and a direct subsidiary of Triarc ("ACQUISITION SUB"); RTM
Management Company, L.L.C., a Georgia limited liability company ("RTMMC"); each
of the persons listed on SCHEDULE I hereto (collectively, the "MEMBERS," and
each, a "MEMBER"); and Russell V. Umphenour, Jr., Dennis E. Cooper and J.
Russell Welch, as the RTM Representatives (as defined below).
W I T N E S S E T H:
WHEREAS, the Members are the beneficial and record owners of all of the
membership interests in RTMMC;
WHEREAS, upon the terms and conditions set forth in this Agreement,
RTMMC wishes to sell to Acquisition Sub, and Acquisition Sub wishes to purchase
from RTMMC, certain of the assets of RTMMC as more fully described herein and to
assume certain Liabilities of RTMMC as more fully described herein
(collectively, the "ASSET PURCHASE"), primarily related to the Business (as
defined below);
WHEREAS, Triarc, Arby's Acquisition Co., a Georgia corporation and a
direct wholly owned subsidiary of Triarc ("MERGER SUB CORP."), Arby's
Restaurant, LLC, a Delaware limited liability company and a direct wholly owned
subsidiary of Triarc ("MERGER SUB LLC"), RTM Restaurant Group, Inc., a Georgia
corporation ("RTMRG") and Russell V. Umphenour, Jr., Dennis E. Cooper and J.
Russell Welch, as the RTM Representatives, have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "RTMRG MERGER AGREEMENT"),
which provides, among other things, for the merger of Merger Sub Corp. with and
into RTMRG, with RTMRG surviving the merger (the "FIRST MERGER"), followed
immediately thereafter by the merger of RTMRG with and into Merger Sub LLC, with
Merger Sub LLC surviving the merger (the "SECOND MERGER" and, together with the
First Merger, the "MERGERS") and immediately after the Second Effective Time (as
defined in the RTMRG Merger Agreement), Triarc will contribute all of the
outstanding membership interests in the surviving entity in the Second Merger
directly or indirectly to Triarc Restaurant Holdings, LLC, which will directly
or indirectly contribute all of the outstanding membership interests in the
surviving entity in the Second Merger to ARG (such contributions, the "TRIARC
CONTRIBUTIONS");
WHEREAS, certain principal shareholders of RTMRG (the "RTMRG PRINCIPAL
SHAREHOLDERS"), who collectively beneficially own approximately 87.1% of the
outstanding shares of the common stock, no par value, of RTMRG (the "RTMRG
COMMON STOCK") have entered into a Transaction Support Agreement for the benefit
of Triarc (the "TRANSACTION SUPPORT AGREEMENT"), pursuant to which the RTMRG
Principal Shareholders have agreed, INTER ALIA, on the terms and subject to the
conditions set forth in the Transaction Support Agreement, (a) to seek to obtain
the waiver from each
shareholder of RTMRG of dissenters rights in respect of the First Merger and (b)
to the indemnification obligations of the RTMRG Principal Shareholders set forth
in RTMRG Merger Agreement and the restrictive covenants set forth therein;
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" and,
together with the Mergers and the Asset Purchase, the "RTM TRANSACTIONS"), for
an amount in cash equal to the Aggregate Purchase Price (as defined therein) (as
used herein, the "RTMAC AGGREGATE PURCHASE PRICE");
WHEREAS, simultaneously with, and as a condition to the obligation of
the parties hereto to effect, the Asset Purchase, Triarc, ARG, each of the RTMRG
Principal Shareholders, each of the members of RTMAC as of immediately prior to
the Closing, each of the Members, the RTM Representatives and the Escrow Agent
(as defined below) will enter into an Escrow Agreement in the form attached
hereto as ANNEX A with such changes as may be requested by the Escrow Agent (the
"ESCROW AGREEMENT"); and
WHEREAS, simultaneously with, and as a condition to the obligation of
Acquisition Sub to consummate the transaction contemplated hereby, ARG and RTMMC
will enter into (i) a lease relating to 5995 Barfield Road, Atlanta, Georgia, on
substantially the same terms as set forth in ANNEX B and enter into an
assignment of the lease relating to 6045 Barfield Road, Atlanta, Georgia, on
substantially the same terms as set forth in ANNEX C (collectively, the "ATLANTA
OFFICE LEASES") and (ii) a Trademark License Agreement in the form attached
hereto as ANNEX D (the "TRADEMARK LICENSE 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
TRANSFER OF THE BUSINESS;
PAYMENT OF AGGREGATE PURCHASE PRICE
Section 1.01 TRANSFER OF THE BUSINESS. Except for the Excluded
Assets as provided in Section 1.02, at the Closing and with effect as of the
Closing Date, RTMMC shall sell, assign, transfer, convey and deliver to
Acquisition Sub free and clear of all Liens (other than any Permitted Liens)
(the "TRANSFER"), and Acquisition Sub shall, and Triarc shall cause Acquisition
Sub to, acquire from RTMMC, all of the right, title
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and interest of RTMMC in and to all of the assets, properties, rights and
business of RTMMC as of the Closing Date of every kind, nature, type and
description, real, personal and mixed, tangible and intangible, wherever
located, whether known or unknown, fixed or unfixed, or otherwise, whether or
not specifically referred to in this Agreement and whether or not reflected on
the books and records of RTMMC (collectively, the "PURCHASED ASSETS"), including
the following:
(a) the Personal Property;
(b) all of RTMMC's rights under the Contracts set forth in Section
1.01(b) of the RTMMC Disclosure Letter and Contracts entered into by RTMMC in
connection with the Business after the date hereof in compliance with Section
5.01 (the "ASSUMED CONTRACTS");
(c) the Leasehold Interests (including security deposits) under
the Leases set forth in Section 1.01(c) of the RTMMC Disclosure Letter (the
"ASSUMED LEASES");
(d) the Accounts Receivable;
(e) the Customer Lists;
(f) all transferable Permits necessary to own the Purchased Assets
or operate the Business;
(g) the RTMMC Intellectual Property Rights and RTMMC Third-Party
Intellectual Property Rights;
(h) the Books and Records, except as specifically provided by
Section 1.02(a);
(i) all other assets listed in Section 1.01(i) of the RTMMC
Disclosure Letter;
(j) cash and cash equivalents on hand and in the bank accounts
listed in Section 1.01(j) of the RTMMC Disclosure Letter;
(k) all of RTMMC's goodwill associated with the Purchased Assets;
(l) all insurance benefits of RTMMC to the extent arising from or
relating to the Purchased Assets or the Assumed Liabilities;
(m) all Inventory;
(n) all prepaid expenses and other deposits related to the
Purchased Assets to the extent Acquisition Sub will receive a benefit therefrom
after the Closing;
(o) any RTMMC Employee Plan and any related assets;
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(p) any Legal Actions of RTMMC against any third party (including
any Affiliate of RTMMC) relating to the Purchased Assets or the Assumed
Liabilities, whether choate or inchoate, known or unknown, contingent or
noncontingent.
To the extent that any of the Purchased Assets are not Transferable to
Acquisition Sub pursuant to Section 1.01, RTMMC shall, and the Members of RTMMC
shall cause RTMMC to, provide to Acquisition Sub, at Acquisition Sub's request
and at no additional cost to Acquisition Sub, any benefit under such Purchased
Assets.
Section 1.02 EXCLUDED ASSETS. Notwithstanding the provisions of
Section 1.01, the parties acknowledge and agree that the following assets,
properties, contracts and rights of RTMMC are not included among the Purchased
Assets and are excluded from the Transfer (collectively, the "EXCLUDED ASSETS"):
(a) any Books and Records which (i) RTMMC is required by Law to
retain; (ii) to the extent relating to the process of the sale of the Purchased
Assets and are not otherwise used in connection with or otherwise related to the
Purchased Assets; or (iii) to the extent relating to any other Excluded Asset;
PROVIDED, HOWEVER, that from time to time upon the prior request of Acquisition
Sub, RTMMC shall provide Acquisition Sub with access to such books and records
to the extent reasonably requested by Acquisition Sub;
(b) any Contracts between RTMMC, on the one hand, and any of its
Affiliates (other than RTMRG or any of its Subsidiaries or RTMAC or any of its
Subsidiaries), on the other hand;
(c) all insurance benefits of RTMMC to the extent relating to any
of the Excluded Assets or Excluded Liabilities;
(d) any Legal Actions against any third party to the extent
relating to any Excluded Asset or Excluded Liability; and
(e) any Excluded Receivables and any other assets, in each case,
specifically identified in Section 1.02(e) of the RTMMC Disclosure Letter.
Section 1.03 ASSUMPTION OF LIABILITIES. At the Closing,
Acquisition Sub shall, and Triarc shall cause Acquisition Sub to, assume the
Indebtedness for borrowed money of the Mrs. Winners Obligors included in the
Winners Indebtedness Amount and the following (and only the following)
Liabilities and obligations of RTMMC and no other Liabilities or obligations of
RTMMC (the specific Liabilities to be assumed by Acquisition Sub pursuant to
this Section 1.03 being collectively referred to as the "ASSUMED LIABILITIES"):
(a) all Liabilities (no matter when arising) to the extent related
to the Purchased Assets or the conduct of the Business prior to the Closing;
(b) all Liabilities to the extent reflected in the RTM Closing Net
Liabilities;
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(c) all Liabilities owed to RTMRG or any of its Subsidiaries or
RTMAC or any of its Subsidiaries; and
(d) all Liabilities in respect of the Indebtedness set forth on
Section 1.03(d) of the RTMMC Disclosure Letter.
Section 1.04 LIABILITIES NOT ASSUMED BY ACQUISITION SUB.
Notwithstanding anything to the contrary in this Agreement, Acquisition Sub
shall not assume, or in any way be liable or responsible for any, and RTMMC
shall pay, perform and discharge on a timely basis when due, all of its
obligations and Liabilities, except for the Assumed Liabilities (the "EXCLUDED
LIABILITIES"). Without limiting the generality of the foregoing, Excluded
Liabilities shall include the following obligations and Liabilities of RTMMC:
(a) except for Expenses, any Liability or obligation of RTMMC
arising out of or in connection with the negotiation and preparation of any of
this Agreement, the Ancillary Agreements or the consummation and performance of
the transactions contemplated hereby or thereby, including any Liability for
Taxes so arising (except as otherwise provided in Section 1.04(b) or Section
7.07);
(b) except as provided in Section 7.07 or to the extent of any
Liability for Taxes specifically identified in the RTM Closing Net Liabilities
(excluding any reserve for deferred taxes established to reflect timing
differences between book and Tax income), any Liability, obligation or expense
of any kind or nature relating to Taxes of RTMMC or any of its direct or
indirect members, or, with respect to the Purchased Assets or the Assumed
Liabilities, Taxes for any period or portion thereof ending on or before the
Closing Date (including any Liability, obligation or expense pursuant to any tax
sharing agreement, tax indemnification or similar arrangement), and any Taxes
attributable to the RTMMC Transactions;
(c) any Liability with respect to any RTMMC Employee (i) who does
not accept an offer of employment from ARG or any of its Subsidiaries made in
accordance with Section 6.08 or (ii) to whom an offer of employment is not made
pursuant to Section 6.08(b);
(d) except to the extent of any Liability therefor included in the
RTM Closing Net Liabilities, any Liability of RTMMC to any of its directors,
officers, employees, members or Affiliates (other than to the extent arising in
respect of the period after the Closing pursuant to employment arrangements
expressly assumed by ARG or its Subsidiaries);
(e) any Liability of RTMMC arising out of or relating to any Legal
Action to which RTMMC is or was a party to the extent relating to any Excluded
Asset or any other Excluded Liability;
(f) except for the Indebtedness set forth in Section 7.16 of the
RTMRG Disclosure Letter, any Liability of RTMMC arising out of or relating to
(i) any
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RTMMC Related Party Arrangement or (ii) the business, operations, properties or
assets of any RTM Related Entity, including any guaranties, leases or subleases
by RTMMC of real property currently or formerly used as a Mrs. Winners or Lees
restaurant and not currently used in the Business;
(g) except for any Liability included in the RTM Closing Net
Liabilities, any Liability or obligation of RTMMC arising out of matters that
constitute a breach of Section 2.14;
(h) any Liability of RTMMC under this Agreement or any of the
Ancillary Agreements; and
(i) any Liability under any Contracts or pledges identified (or
that should have been described) on Section 2.12(a)(xviii) of the RTMMC
Disclosure Letter.
Section 1.05 SALE AND PURCHASE OF THE PURCHASED ASSETS. At the
Closing provided for in Section 1.06, upon the terms and subject to the
conditions of this Agreement and in reliance upon the representations,
warranties and agreements contained herein, RTMMC shall Transfer to Acquisition
Sub, and Acquisition Sub shall, and Triarc shall cause Acquisition Sub to,
purchase from RTMMC, the Purchased Assets for an aggregate purchase price in an
amount in cash equal to $10.00 (such amount of cash being the "AGGREGATE
PURCHASE PRICE") to be paid in accordance with Section 1.07.
Section 1.06 CLOSING. Subject to the satisfaction or waiver of all
of the conditions to closing contained in Article VIII, the closing of the Asset
Purchase (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
Mergers and the RTMAC 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 Acquisition Sub and the RTM
Representatives may agree in writing. The date on which the Closing occurs is
referred to as the "CLOSING DATE." Immediately after the Closing, Triarc shall
contribute, or cause to be contributed, all of the membership interests in
Acquisition Sub to ARG.
Section 1.07 PAYMENT OF AGGREGATE PURCHASE PRICE. At the Closing,
Acquisition Sub shall, and Triarc shall cause Acquisition Sub to, pay to RTMMC
the Aggregate Purchase Price by wire transfer of immediately available funds to
an account designated by RTMMC in writing to Triarc not less than five Business
Days prior to the Closing.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF RTMMC AND THE MEMBERS
Except as otherwise set forth in the disclosure letter delivered on or
prior to the date of this Agreement by RTMMC and the Members to Triarc (the
"RTMMC DISCLOSURE LETTER"), which RTMMC Disclosure Letter is arranged in
Sections corresponding to the Sections of this Agreement, RTMMC and the Members,
jointly and severally, represent and warrant to Triarc, ARG and Acquisition Sub
that:
Section 2.01 ORGANIZATION AND QUALIFICATION OF RTMMC. RTMMC is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Georgia, and has the limited liability company
power and authority to own or lease the Purchased Assets and to carry on the
Business substantially as it is being conducted on the date hereof. RTMMC is
duly qualified and licensed to do business and is in good standing in each
jurisdiction where the ownership or operation of the Purchased Assets or the
conduct of the Business requires such qualification, except where the failure to
be so qualified or in good standing has not had and could not reasonably be
expected to have, individually or in the aggregate, an RTMMC Material Adverse
Effect. RTMMC has made available to Triarc correct and complete copies of the
articles of organization and operating agreement of RTMMC (as amended to the
date hereof).
Section 2.02 AUTHORIZATION OF RTMMC; ENFORCEABILITY. RTMMC has all
requisite limited liability company power and authority, and has taken all
limited liability company action necessary in order to execute, deliver and
perform its obligations under 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. Each of the
Ancillary Agreements to which it is a party have been duly executed and
delivered by RTMMC and constitute the legal, valid and binding obligation of
RTMMC, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors'
rights, and to general equity principles.
Section 2.03 MEMBERSHIP INTERESTS. The Members are the only
members of RTMMC. No other membership or other ownership interest of RTMMC is
authorized and outstanding.
Section 2.04 SUBSIDIARIES. RTMMC does not directly or indirectly
own any Subsidiary. Section 2.04 of the RTMMC Disclosure Letter sets forth all
interests (the "INVESTMENTS") of RTMMC, 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 RTMMC, its
Subsidiaries and each other holder of any equity or other ownership interest in
such Person. RTMMC has good and valid title, free and clear of any Liens, to the
Investments.
Section 2.05 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery
and performance by RTMMC of this Agreement and each of the Ancillary Agreements
to
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which it is a party do not, and the consummation by RTMMC 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 2.06 NON CONTRAVENTION. Except with respect to Contracts
to be satisfied in full or terminated in connection with the Debt Refinancings,
the execution, delivery and performance by RTMMC of this Agreement and each of
the Ancillary Agreements to which it is a party do not, and the consummation by
RTMMC of the transactions contemplated hereby and thereby will not (a)
contravene, conflict with, or result in any violation or breach of, the articles
of organization or the operating agreement of RTMMC, (b) contravene or conflict
with, or result in any violation or breach of, in any material respect, any
Laws, Orders or Permits applicable to RTMMC or by which any of the Purchased
Assets are bound, assuming that all consents, approvals, authorizations, filings
and notifications described in Section 2.05, Section 3.03 and Section 4.03 have
been obtained or made, (c) result in any violation or breach of, or constitute a
default (with or without notice or lapse of time or both) under, (x) any RTMMC
Material Contract or (y) any other Contract to which RTMMC is a party or by
which any of the Purchased Assets 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 RTMMC, (d) require
any consent, approval or other authorization of, or filing with or notification
to, any Person under (x) any RTMMC Material Contract or (y) any other Contract
to which RTMMC is a party or by which any of the Purchased Assets 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
RTMMC; (e) give rise to any termination, cancellation, amendment, modification
or acceleration of any rights or obligations under (x) any RTMMC Material
Contract or (y) any other Contract to which RTMMC is a party or by which any of
the Purchased Assets 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 RTMMC or (f) cause the creation or imposition of any Liens (other
than Permitted Liens) on the Purchased Assets.
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Section 2.07 RESTATED COMBINED RTM FINANCIAL STATEMENTS; INTERNAL
CONTROLS; INDEBTEDNESS.
(a) Section 2.07(a) of the RTMMC 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,
2005 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 (x) were
prepared in accordance with GAAP applied on a consistent basis (except as may be
indicated in the notes to the Restated Combined RTM Financial Statements and
except for the absence of footnotes in the case of the Restated Combined RTM
Unaudited Financial Statements); and (y) fairly present, in all material
respects, the combined financial position of the RTM Parties and their
Subsidiaries as of the dates thereof and their combined results of operations
and cash flows for the periods then ended (subject, in the case of the Restated
Combined RTM Unaudited Financial Statements, to normal year-end adjustments).
(b) RTMMC maintains accurate books and records reflecting its
assets and liabilities and maintains proper and adequate internal accounting
controls which provide assurance that (i) transactions are executed with
management's authorization; (ii) transactions are recorded as necessary to
permit preparation of the financial statements of RTMMC and to maintain
accountability for the assets of RTMMC; (iii) access to the assets of RTMMC is
permitted only in accordance with management's authorization; (iv) the reporting
of the assets of RTMMC 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. RTMMC 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 RTMMC to RTMMC's
independent auditors relating to (x) any significant deficiencies in the design
or operation of internal controls which could adversely affect the ability of
RTMMC 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 RTMMC.
(c) Section 2.07(c) of the RTMMC Disclosure Letter sets forth a
true and correct list of all Indebtedness of RTMMC (which Section may be updated
by RTMMC and the Members prior to the Closing Date to reflect (x) any additions
or deletions thereto after the date hereof in compliance with Section 5.01 and
(y) payments of principal and interest and accrual of interest on such
Indebtedness during the period
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from the date hereof through the Closing Date). The aggregate amount of
prepayment penalties, premiums, make wholes, breakage and other costs and
expenses payable to the lenders as such of all such Indebtedness solely on
account of the repayment of such Indebtedness in the Debt Refinancings will not
exceed $20 million. Section 2.07(c) of the RTMMC Disclosure Letter specifically
identifies all Indebtedness of RTMMC or included in the Winners Indebtedness
Amount that constitutes RTM Non-Prepayable Debt. All Indebtedness of the RTM
Parties and their Subsidiaries and the Mrs. Winners Obligors, other than the RTM
Non-Prepayable Debt, is permitted by its terms to be prepaid or the holder
thereof has consented in writing (which consent is in full force and effect) to
being prepaid, in connection with the Debt Refinancings.
Section 2.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except to the
extent relating to the transactions contemplated by this Agreement, since May
30, 2004 (i) RTMMC has in all material respects conducted the Business 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 2.09 ABSENCE OF UNDISCLOSED LIABILITIES. RTMMC does not
have any material Liabilities relating to the Purchased Assets, except for (i)
Liabilities set forth in the Restated Combined RTM Financial Statements, (ii)
Liabilities which have arisen after May 30, 2004 in the ordinary course of
business consistent with past practice or in compliance with Section 5.01, (iii)
Liabilities set forth in Section 2.09 of the RTMMC Disclosure Letter and (iv)
Liabilities that are (A) the subject of any other representation or warranty
contained in this Article II and are specifically disclosed pursuant to such
representation or warranty or are not required to be disclosed because such
other representation or warranty is limited or qualified with respect to dollar
amount, Knowledge of RTMMC or materiality or (B) taken into account in the
determination of the RTM Estimated Net Liabilities or RTM Closing Net
Liabilities.
Section 2.10 COMPLIANCE WITH LAWS; PERMITS. Since December 31,
2001, except for matters specifically addressed by Section 2.15 (last sentence
only) or Section 2.16, (i) RTMMC has conducted the Business in compliance in all
material respects with applicable Law; and (ii) RTMMC has not received any
notice or other communication (whether oral or written) from any Governmental
Entity or any other Person regarding any actual, alleged, possible, or potential
failure to comply in any material respect with any applicable Laws.
(a) RTMMC holds all material Permits issued or provided by
Governmental Entities under all Laws, which are necessary for it to own the
Purchased Assets as currently conducted (the "RTMMC PERMITS"). There have been
no material misstatements or omissions in connection with any RTMMC Permit that,
individually or in the aggregate, would be reasonably likely to result in the
revocation, nonrenewal, suspension or adverse modification of such RTMMC 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 RTMMC. There is not pending, nor to the Knowledge
of RTMMC, threatened, against RTMMC,
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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 RTMMC Permit.
Section 2.11 LEGAL ACTIONS. Section 2.11 of the RTMMC Disclosure
Letter sets forth a true and complete list of all Legal Actions pending or, to
the Knowledge of RTMMC, threatened against (a) RTMMC or (b) any director,
officer or employee of RTMMC or other Person for whom RTMMC may be liable, other
than in the case of clause (a) or (b) any such Legal Actions commenced or, to
the Knowledge of RTMMC, 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 RTMMC in excess of
$1 million or (y) RTMMC being bound by any material restriction (other than
customary confidentiality restrictions). RTMMC is not subject to or bound by any
outstanding Order that is material to RTMMC.
Section 2.12 CONTRACTS.
(a) Section 2.12(a) of the RTMMC Disclosure Letter lists the
following Contracts to which RTMMC is a party and which are outstanding (which
Section may be updated by RTMMC and the Members prior to the Closing Date to
reflect any additions or deletions thereto after the date hereof in compliance
with Section 5.01) (collectively, the "RTMMC 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 RTMMC 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 RTMMC 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 RTMMC 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 RTMMC 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;
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(vii) any Contract relating to the management or control of
any Affiliate of RTMMC, including any of the RTM Related Entities or the other
RTM Parties or their Subsidiaries;
(viii) any Contract relating to the employment of any
employee, and any Contract pursuant to which RTMMC 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
RTMMC of (A) any officer, director or employee of any of the RTM Parties or any
of their Subsidiaries or (B) any agent of the RTM Parties or any of their
Subsidiaries or any other Person that, in the case of this clause (B), has
resulted in or would reasonably be expected to result in, individually or in the
aggregate, material Liabilities to RTMMC;
(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 RTMMC of any operating business or the capital stock or
other equity securities of any other Person, or the sale by RTMMC of any
operating business or the capital stock or other equity securities of any former
Subsidiary of RTMMC;
(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 RTMMC uses or occupies or
has the right to use or occupy any real property (collectively, the "RTMMC REAL
PROPERTY LEASES") (and Section 2.12(a)(xiii) of the RTMMC Disclosure Letter sets
forth a true and complete summary of the following terms of each such RTMMC 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 RTMMC grants to any Person
or Persons the right of use or occupancy to any portion of any parcel of RTMMC
Real Property (collectively, the "RTMMC LEASES") (and Section 2.12(a)(xiv) of
the RTMMC Disclosure Letter sets forth a true an d complete summary of the
following terms of each such RTMMC 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);
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(xv) any Contract under which the closing of the
transactions contemplated thereby has not occurred relating to the acquisition
or sale by RTMMC 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 RTMMC of one or more new Restaurants, the estimated costs under which exceed
$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 RTMMC in excess of $50,000 or any unfulfilled or
pending non-payment obligations of RTMMC; and
(xviii) any Contract or pledge pursuant to which RTMMC 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 RTMMC Material Contract is valid, binding, in full force
and effect and enforceable in accordance with its terms against RTMMC and, to
the Knowledge of RTMMC, against any other party thereto. RTMMC and, to the
Knowledge of RTMMC, each other party thereto, is not in material breach or
material default under any RTMMC Material Contract and to the Knowledge of
RTMMC, 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 RTMMC Material Contract by any party thereto.
Section 2.13 TAX MATTERS.
(a) All material Tax Returns required to be filed by or with
respect to RTMMC 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) RTMMC has fully and timely paid all material Taxes owed by
RTMMC (whether or not shown on any Tax Return), and has made adequate provision
for any such Taxes that are not yet due and payable, for all taxable periods, or
portions thereof, ending on or before the date hereof.
(c) There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from RTMMC 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
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an audit or other proceeding, or assert any deficiency or claim for additional
Taxes against RTMMC, and no claim in writing has been made by any Governmental
Entity in a jurisdiction where RTMMC does not file Tax Returns with respect to a
particular Tax that it is or may be subject to taxation by that jurisdiction
with respect to such Tax.
(e) There are no Liens for Taxes upon the Purchased Assets, except
for statutory Liens for current Taxes not yet due.
(f) None of the Purchased Assets: (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.
(g) The adjusted tax basis of each note, receivable or other
obligation among any of RTMMC, its direct or indirect members, and its
Affiliates equals the principal amount of such note, receivable or obligation
(including any accrued but unpaid interest).
Section 2.14 EMPLOYEE BENEFITS.
(a) Except for severance agreements under which the remaining
aggregate payments to the applicable former employee are less than $125,000,
RTMMC 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 RTMMC 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 RTMMC
has any present or future right to benefits (each such plan, program,
arrangement or agreement set forth in such Section being individually, an "RTMMC
EMPLOYEE PLAN," and collectively, the "RTMMC EMPLOYEE PLANS"). All references to
"RTMMC" in this Section 2.14 shall refer to RTMMC and any employer that would be
considered a single employer with RTMMC under Sections 414(b), (c), (m) or (o)
of the Code.
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(b) RTMMC 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 RTMMC 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 RTMMC 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 RTMMC 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 RTMMC Employee Plan have been filed or
furnished on a timely basis; (iii) each RTMMC 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 RTMMC 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 RTMMC, 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 RTMMC Employee Plan or RTMMC with respect to any RTMMC Employee Plan
or, to the Knowledge of RTMMC, against any other Person and, to the Knowledge of
RTMMC, no such Liens or Legal Actions are contemplated or threatened with
respect to any RTMMC Employee Plan; (v) no individual who has performed services
for RTMMC has been improperly excluded from participation in any RTMMC 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 RTMMC Employee Plan.
(d) Neither RTMMC nor, to the Knowledge of RTMMC, any other "party
in interest" or "disqualified person" with respect to any RTMMC 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 RTMMC Employee
Plan. To the Knowledge of RTMMC, 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 RTMMC Employee Plan.
(e) All Liabilities or expenses of RTMMC in respect of any RTMMC
Employee Plan (including workers compensation) which have not been paid, have
been
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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 RTMMC 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 RTMMC nor any organization to which RTMMC 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) RTMMC 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 RTMMC; (ii) increase any benefits otherwise payable under any RTMMC 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) RTMMC 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
RTMMC Employee Plan.
(j) There are no reserves, assets, surpluses or prepaid premiums
with respect to any "welfare plan" (as defined in Section 3(1) of ERISA) that
are disclosed in Section 2.14(a) of the RTMMC Disclosure Letter.
(k) RTMMC 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) RTMMC 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) RTMMC has made available to Triarc with respect to each RTMMC
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
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RTMMC 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 RTMMC Employee Plan; and (vii) any
other documents in respect of an RTMMC Employee Plan reasonably requested by
Triarc.
Section 2.15 LABOR MATTERS. RTMMC is not the subject of, nor, to
the Knowledge of RTMMC, is there threatened, any material claim asserting that
RTMMC has committed an unfair labor practice with respect to RTMMC Employees
located in the United States, nor is there pending or, to the Knowledge of
RTMMC, 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 RTMMC. There is not pending,
nor, to the Knowledge of RTMMC, is there threatened any material labor strike,
walk-out, work stoppage or lockout with respect to RTMMC Employees. RTMMC 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. RTMMC does not have any employees
who spend more than 25% of their work week for matters related to any RTM
Related Entity.
Section 2.16 ENVIRONMENTAL MATTERS. (i) RTMMC is not, and since
December 31, 2001 has not been, in violation in any material respect of any
applicable Environmental Law; (ii) since December 31, 2001, RTMMC has not
received any written notice, demand, claim or request for information from any
Governmental Entity alleging the violation in any material respect of or any
material Liability under any applicable Environmental Law in connection with the
ownership of the Purchased Assets; (iii) RTMMC is not the subject of any Order
arising under any Environmental Law; and (iv) to the Knowledge of RTMMC, there
are no events, conditions or circumstances reasonably likely to result in any
material Liability under Environmental Laws in connection with the ownership of
the Purchased Assets.
Section 2.17 INTELLECTUAL PROPERTY.
(a) RTMMC 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 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 RTMMC Third-Party Intellectual Property Rights to RTMMC
or the sufficiency of any such Contract to grant valid rights to such RTMMC
Third-Party
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Intellectual Property Rights. Section 2.17(a) of the RTMMC 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 RTMMC.
(b) RTMMC is not, nor will it be as a result of the execution and
delivery by RTMMC or the Members of this Agreement or the performance by RTMMC
or the Members of their obligations hereunder, in violation in any material
respect of any material licenses, sublicenses or other agreements as to which
RTMMC is a party and pursuant to which RTMMC 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 in connection with the Purchased Assets
(collectively, "RTMMC THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS").
(c) No claims with respect to (i) the right of RTMMC to use or to
sell, license or make available to any Person any of RTMMC's products or
services, or any of the patents, patent applications, registered and material
unregistered trademarks, trade names, service marks, registered copyrights, and
any applications therefor or trade secrets owned by RTMMC (collectively, the
"RTMMC INTELLECTUAL PROPERTY RIGHTS"); or (ii) RTMMC Third-Party Intellectual
Property Rights are, to the Knowledge of RTMMC, currently pending or threatened
by any Person against RTMMC, that if adversely determined could be material to
the ownership or use of the Purchased Assets; PROVIDED, that no representation
or warranty is being made with respect to claims made against ARG or any of its
Subsidiaries of which RTMMC does not have Knowledge.
(d) RTMMC has taken all necessary actions to maintain and protect
the RTMMC Intellectual Property Rights.
(e) After the consummation of the transactions contemplated
herein, ARG and its Subsidiaries will own all right, title and interest in and
to, or have a valid written license to use, all RTMMC Intellectual Property and
all RTMMC Third-Party Intellectual Property Rights on identical terms and
conditions as RTMMC enjoyed immediately prior to such transaction.
Section 2.18 REAL PROPERTY. Section 2.18 of the RTMMC Disclosure
Letter sets forth a true, correct and complete schedule of all real property
used in connection with the operation of the Purchased Assets which is owned by,
or leased, subleased or licensed to, RTMMC, other than the Excluded Assets
(which Section may be updated by RTMMC prior to the Closing Date to reflect any
additions or deletions thereto after the date hereof in compliance with Section
5.01) (collectively, other than the Excluded Assets, the "RTMMC REAL PROPERTY").
With respect to each such parcel of RTMMC Real Property:
(a) RTMMC has good and marketable title to the RTMMC Real Property
owned by it and a valid leasehold interest in the RTMMC Real Property leased to
it, as the case may be, free and clear of any Liens, except for Permitted Liens;
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(b) except for RTMMC Leases, there are no leases, subleases,
licenses, concessions, or other agreements entered into by RTMMC granting to any
Person or Persons the right of use or occupancy to any portion of the parcel of
any of such RTMMC Real Property;
(c) [intentionally omitted];
(d) other than the RTMMC Real Property subject to the Atlanta
Office Leases, all of the real property used by RTMMC in the conduct of its
business is included in the RTMMC Real Property, and is sufficient to operate
the Arby's quick service restaurant business as currently conducted;
(e) RTMMC has not received notice and, to the Knowledge of RTMMC,
there are no pending, threatened or contemplated condemnation proceeding or
proceedings affecting any of the RTMMC Real Property or any part thereof or of
any sale or other disposition of the RTMMC 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 RTMMC; and
(f) no portion of any material RTMMC Real Property has suffered
any material damage by fire or other casualty which is uninsured or has not
heretofore been completely repaired and restored in full.
Section 2.19 PURCHASED ASSETS AND PERSONAL PROPERTY. RTMMC has
good and marketable title to, or a valid and enforceable leasehold interest in,
all Purchased Assets. RTMMC's ownership of or leasehold interest in any such
Purchased Assets is not subject to any Liens, except for Permitted Liens. Except
for normal wear and tear, the Personal Property included in the Purchased Assets
is in good operating condition and in a state of reasonable maintenance and
repair.
Section 2.20 SUFFICIENCY OF ASSETS. The RTM Parties and their
Subsidiaries taken as a whole have, and upon completion of the RTM Transactions,
ARG shall have, directly or indirectly, ownership of or rights in all of the
assets necessary to conduct the Arby's restaurant business of the RTM Parties
and their Subsidiaries in all material respects as currently conducted.
Section 2.21 INSURANCE. RTMMC maintains (or has maintained on its
behalf), and has maintained (or has maintained on its behalf) without
interruption, policies or binders of insurance covering risks and events and in
amounts adequate for the Purchased Assets and its operations and customary in
the industry in which it operates. There are no material claims by RTMMC 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.
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Section 2.22 INVENTORY. The Inventory of RTMMC consists of items
which are in all material respects of a quality and quantity usable and salable
in the ordinary course of business consistent with past practice.
Section 2.23 ACCOUNTS RECEIVABLE. All Accounts Receivable of RTMMC
that are reflected on the Restated Combined RTM Financial Statements or on the
accounting records of RTMMC as of the Closing Date represent or will represent
valid obligations arising from sales actually made or services actually
performed by RTMMC 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 RTMMC, 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 RTMMC.
Section 2.24 SUPPLIERS. No supplier or distributor that is
identified with an asterisk on Section 2.12(a) of the RTMMC 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 RTMMC,
in a manner that is or would be material to RTMMC.
Section 2.25 TRANSACTIONS WITH AFFILIATES. Except for existing
employment agreements with RTMMC or existing RTMMC Employee Plans, RTMMC is not
a party to any Contract (other than an Excluded Asset) with any Affiliate of
RTMMC (other than any other RTM Party or any of their Subsidiaries), any
director, officer, member or employee of RTMMC or, to the Knowledge of RTMMC,
any Affiliates or Immediate Family Members of any director, officer, member or
employee of RTMMC. Section 2.25 of the RTMMC 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 RTMMC has made directly or indirectly to any
director, officer, member or employee of RTMMC or any of their respective
Affiliates or Immediate Family Members, providing with respect to each such loan
or extension of credit the outstanding principal amount, the interest rate and
final maturity date. Each Contract and loan or extension of credit set forth or
required to be set forth in Section 2.25 of the RTMMC Disclosure Letter is
hereinafter referred to as an "RTMMC RELATED PARTY ARRANGEMENT".
Section 2.26 BROKERS AND FINDERS. No broker, finder or investment
banker other than TM Capital is entitled to any brokerage, finder's or other fee
or commission in connection with the RTM Transactions or the other transactions
contemplated by this Agreement or the Ancillary Agreements based upon
arrangements made by or on behalf of RTMMC or any of the Members. RTMMC has made
available to Triarc a correct and complete copy of all agreements between RTMMC
and TM Capital under which TM Capital would be entitled to any payment relating
to the RTM
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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 III
REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
Except as otherwise set forth in the RTMMC Disclosure Letter, which
RTMMC Disclosure Letter is arranged in Sections corresponding to the Sections of
this Agreement, each Member, severally and not jointly, represents and warrants
to Triarc, ARG and Acquisition Sub that:
Section 3.01 MEMBERSHIP INTEREST. Such Member owns the membership
interest ascribed to such Member on SCHEDULE I hereto.
Section 3.02 ORGANIZATION AND AUTHORITY OF SUCH MEMBER;
ENFORCEABILITY. Such Member has all requisite power and authority, and has taken
all action necessary in order to execute, deliver and perform its obligations
under this Agreement and each of the Ancillary Agreements to which it is a party
and to consummate the transactions contemplated by this Agreement and each such
Ancillary Agreement. This Agreement and each of the Ancillary Agreements to
which such Member is a party have been duly executed and delivered by such
Member and constitute the legal, valid and binding obligation of such Member,
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of
general applicability relating to or affecting creditors' rights, and to general
equity principles.
Section 3.03 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery
and performance by such Member of this Agreement and each of the Ancillary
Agreements to which it is a party do not, and the consummation by such Member 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 3.04 NON-CONTRAVENTION. Except with respect to Contracts
to be satisfied in full or terminated in connection with the Debt Refinancings,
the execution, delivery and performance by such Member of this Agreement and
each of the Ancillary
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Agreements to which it is a party do not, and the consummation by such Member of
the transactions contemplated hereby and thereby will not (a) contravene,
conflict with, or result in any violation or breach of, the articles of
organization or operating agreement of RTMMC, (b) contravene or conflict with,
or result in any violation or breach of, in any material respect, any Laws,
Orders or Permits applicable to RTMMC or such Member or by which the Purchased
Assets are bound, assuming that all consents, approvals, authorizations, filings
and notifications described in Section 2.05, Section 3.03 and Section 4.03 have
been obtained or made, (c) result in any violation or breach of, or constitute a
default (with or without notice or lapse of time or both) under, (x) any RTMMC
Material Contract or (y) any other Contract to which RTMMC or such Member is a
party or by which any of the Purchased Assets or any of the assets of such
Member 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 RTMMC or such Member, (d) require any consent,
approval or other authorization of, or filing with or notification to, any
Person under (x) any RTMMC Material Contract or (y) any other Contract to which
RTMMC or such Member is a party or by which any of the Purchased Assets or any
of the assets of such Member 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 RTMMC or such Member, (e) give rise to any
termination, cancellation, amendment, modification or acceleration of any rights
or obligations under (x) any RTMMC Material Contract or (y) any other Contract
to which RTMMC or such Member is a party or by which any of the Purchased Assets
or any of the assets of such Member 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 RTMMC or such Member, or (f) cause the creation or
imposition of any Liens (other than Permitted Liens) on any of the Purchased
Assets or any material assets of such Member.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF TRIARC, ARG AND ACQUISITION SUB
Triarc, ARG and Acquisition Sub jointly and severally represent and
warrant to RTMMC and the Members as follows:
Section 4.01 ORGANIZATION AND QUALIFICATION OF TRIARC, ARG AND
ACQUISITION SUB. Each of Triarc, ARG and Acquisition Sub is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of Delaware, and has the corporate or limited liability company
power and authority to own or lease its assets and to carry on its business
substantially as it is being conducted on the date hereof. Each of Triarc, ARG
and Acquisition Sub 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
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reasonably be expected to have, individually or in the aggregate, a Triarc
Material Adverse Effect. Triarc has made available to the RTM Representatives
correct and complete copies of the certificate of incorporation and bylaws of
Triarc and ARG (as amended to the date hereof).
Section 4.02 AUTHORIZATION OF TRIARC, ARG AND ACQUISITION SUB;
ENFORCEABILITY. Each of Triarc, ARG and Acquisition Sub has all requisite
corporate or limited liability company power and authority, and has taken all
corporate or limited liability company action necessary in order to execute,
deliver and perform its obligations under this Agreement and each of the
Ancillary Agreements to which it is a party and to consummate the transactions
contemplated by this Agreement and each such Ancillary Agreement. This Agreement
and each of the Ancillary Agreements to which it is a party have been duly
executed and delivered by each of Triarc, ARG and Acquisition Sub and constitute
the legal, valid and binding obligation of each of Triarc, ARG and Acquisition
Sub, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors'
rights, and to general equity principles.
Section 4.03 GOVERNMENTAL AUTHORIZATIONS. The execution, delivery
and performance by each of Triarc, ARG and Acquisition Sub of this Agreement and
each of the Ancillary Agreements to which it is a party do not, and the
consummation by each of Triarc, ARG and Acquisition Sub of the transactions
contemplated hereby and thereby will not, require any consent, approval or other
authorization of, or filing with or notification to, any Governmental Entity,
other than:
(a) the filing of the First Certificate of Merger with the
Secretary of State of the State of Georgia and the Second Certificate of Merger
with the Secretaries of State of the States of Delaware and Georgia;
(b) the filing with the SEC of any forms, reports, schedules,
statements and other documents that may be required under the Securities Act and
the Exchange Act in connection with this Agreement and the Registration Rights
Agreement and the transactions contemplated hereby and thereby; and
(c) the pre-merger notification required under the HSR Act.
Section 4.04 NON-CONTRAVENTION. Except with respect to Contracts
to be satisfied in full or terminated in connection with the Debt Refinancings
and except as set forth in Section 4.05 of the Triarc Disclosure Letter, the
execution, delivery and performance by each of Triarc, ARG and Acquisition Sub
of this Agreement and each of the Ancillary Agreements to which it is a party do
not, and the consummation by each of Triarc, ARG and Acquisition Sub of the
transactions contemplated hereby and thereby will not (a) contravene, conflict
with, or result in any violation or breach of, the certificate of incorporation
or by-laws (or comparable organizational instruments) of any of Triarc, ARG and
Acquisition Sub, (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
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bound, assuming that all consents, approvals, authorizations, filings and
notifications described in Section 2.05, Section 3.03 and Section 4.03 have been
obtained or made, (c) result in any violation or breach of, or constitute a
default (with or without notice or lapse of time or both) under, (x) any
Contract filed with the Triarc SEC Reports or (y) any other Contract to which
Triarc or any of its Subsidiaries is a party or by which any assets of Triarc or
any of its Subsidiaries is bound, other than in the case of this clause (y) any
such violation, breach or default that would not reasonably be expected to have,
individually or in the aggregate, a Triarc Material Adverse Effect, (d) require
any consent, approval or other authorization of, or filing with or notification
to, any Person under, (x) any Contract filed with the Triarc SEC Reports or (y)
any other Contract to which Triarc or any of its Subsidiaries is a party or by
which any assets of Triarc or any of its Subsidiaries is bound, other than in
the case of this clause (y) any such consent, approval, authorization, filing or
notification that, if not obtained or made, would not reasonably be expected to
have, individually or in the aggregate, a Triarc Material Adverse Effect, (e)
give rise to any termination, cancellation, amendment, modification or
acceleration of any rights or obligations under, (x) any Contract filed with the
Triarc SEC Reports or (y) any other Contract to which Triarc or any of its
Subsidiaries is a party or by which any assets of Triarc or any of its
Subsidiaries is bound, other than in the case of this clause (y) any such
termination, cancellation, amendment, modification or acceleration that would
not reasonably be expected to have, individually or in the aggregate, a Triarc
Material Adverse Effect, or (f) cause the creation or imposition of any Liens
(other than Permitted Liens) on any material assets of any of Triarc or any of
its Subsidiaries.
Section 4.05 BROKERS AND FINDERS. No broker, finder or investment
banker other than as set forth on Section 3.29 of the Triarc Disclosure Letter
is entitled to any brokerage, finder's or other fee or commission in connection
with the RTM Transactions or the other transactions contemplated by this
Agreement or the Ancillary Agreements based upon arrangements made by or on
behalf of Triarc or any of its Subsidiaries. Triarc has made available to the
RTM Representatives a correct and complete copy of all agreements between Triarc
and those Persons set forth on Section 3.29 of the Triarc Disclosure Letter
under which such Persons would be entitled to any payment relating to the RTM
Transactions or such other transactions, which agreements shall not have been
amended or otherwise modified after the date hereof without the prior written
consent of the RTM Representatives.
ARTICLE V
INTERIM OPERATIONS COVENANTS
Section 5.01 CONDUCT OF BUSINESS OF RTMMC. 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, RTMMC shall, and the Members shall cause
RTMMC to (x) conduct its operation of the Business and the Purchased Assets only
in the ordinary course of
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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 the Business and
the Purchased Assets, to retain the services of its current officers and key
employees, and to preserve the good will of its customers, suppliers and other
Persons with whom it has business relationships. Without limiting the generality
of the foregoing, and except as otherwise contemplated by this Agreement or the
Ancillary Agreements or as set forth in Section 5.01 of the RTMMC Disclosure
Letter, (i) RTMMC shall not, and the Members shall not permit RTMMC to, without
the prior written consent of Triarc (not to be unreasonably withheld,
conditioned or delayed),and (ii) with respect to Section 5.01(p), RTMMC shall,
and the Members shall cause RTMMC to, take the actions set forth in Section
5.01(p):
(a) ORGANIZATION DOCUMENTS. Amend its articles of organization or
operating agreement;
(b) DIVIDENDS. Make, declare or pay any dividend or distribution
on its membership interests or similar equity interests, other than (i)
distributions to members in an amount equal to their aggregate liability for
income Taxes based on the operations of RTMMC, as reasonably determined by
RTMMC, (ii) cash dividends or distributions in an amount that the RTM
Representatives have demonstrated to the reasonable satisfaction of Triarc
(based upon reasonably detailed information provided by the RTM Representatives
to Triarc), after taking into account any distributions described in clause (i)
that have been made or are expected to be made prior to Closing would not
reasonably be expected to result in the Net Liabilities of the RTM Parties and
their Subsidiaries being more than the RTM Benchmark as of the Closing Date and
(iii) dividends or distributions of proceeds from Excluded Asset Dispositions;
(c) EQUITY INTERESTS. (i) Adjust, split, combine or reclassify its
membership interests or similar equity interests, (ii) redeem, purchase or
otherwise acquire, directly or indirectly, any membership interests or similar
equity interests or any securities convertible or exchangeable into or
exercisable for any membership interests or similar equity interests, (iii)
grant any Person any right or option to acquire any of its membership interests
or similar equity interests, (iv) issue, deliver or sell any additional
membership interests or similar equity interests or any securities convertible
or exchangeable into or exercisable for any membership interests or similar
equity interests or such securities or (v) enter into any Contract,
understanding or arrangement with respect to the sale, voting, registration or
repurchase of its membership interests or similar equity interests;
(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,
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adopt, enter into, amend or take any action to accelerate rights under any RTMMC
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 the Purchased Assets, 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 RTMMC
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
RTMMC Material Contract or any Contract entered into pursuant to clause (i)
above, other than in the ordinary course of business consistent with past
practice;
(h) INDEBTEDNESS; GUARANTEES. (i) Incur, assume or prepay any
Indebtedness, other than (x) in the ordinary course of business consistent with
past practice under existing lines of credit to be used for working capital
purposes or (y) any Indebtedness incurred either on terms reasonably acceptable
to Triarc the proceeds of which will be used solely to make scheduled
amortization payments of principal or scheduled payments of interest on
Indebtedness existing as of the date hereof or as set forth in Section 5.01(h)
of the RTMMC 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 travel and similar advances in the ordinary course of
business consistent with past practice;
(j) CAPITAL EXPENDITURES. Fail to make any capital expenditure,
including maintenance capital expenditures and capital expenditures for
remodeling of Restaurants, in accordance with the ordinary course of business
consistent with past practice;
(k) ACCOUNTING. Change its accounting policies or procedures,
other than as required by GAAP;
(l) LEGAL ACTIONS. Subject to Section 5.01(p), waive, release,
assign, settle or compromise any Legal Actions required to be disclosed pursuant
to Section 2.11,
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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 RTMMC 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 RTMMC 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 RTMMC Intellectual Property Rights material to the
ownership or operation of the Purchased Assets to become invalidated, abandoned
or dedicated to the public domain;
(n) RTMMC REAL PROPERTY. (i) Enter into any RTMMC Real Property
Lease or acquire any real property, (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 RTMMC Real
Property, (iii) enter into any Contract relating to the sale of any RTMMC Real
Property or (iv) terminate, cancel or request any material change in any of the
foregoing in clauses (i), (ii) and (iii) above, other than in the case of this
clause (iv) in the ordinary course of business consistent with past practice; or
(o) RELATED ACTIONS. Authorize, commit or agree to do any of the
foregoing; and
(p) TAXES. (i) Prepare, in the ordinary course of business and
consistent with past practice (except as otherwise required by a change in
applicable law or a good faith resolution of a contest), and timely file all
material Tax Returns required to be filed by it on or before the Closing Date
("RTM POST-SIGNING RETURNS"); (ii) consult with Triarc with respect to all RTM
Post-Signing Returns other than income Tax Returns and deliver drafts of such
RTM Post-Signing Returns to Triarc no later than ten Business Days prior to the
date (including extensions) on which such RTM Post-Signing Returns are required
to be filed; (iii) fully and timely pay all Taxes due and payable in respect of
such RTM Post-Signing Returns that are so filed; (iv) properly reserve (and
reflect such reserve in its books and records and financial statements), in
accordance with past practice and in the ordinary course of business, for all
Taxes payable by it for which no RTM Post-Signing Return is due prior to the
Closing Date; and (v) promptly notify Triarc of any suit, claim, action,
investigation, proceeding or audit with respect to income Taxes or any other
material Tax (collectively, "TAX ACTIONS"), pending against or with respect to
RTMMC, and any settlement or compromise of any such Tax Action.
Section 5.02 CONTROL OF BUSINESS PENDING CLOSING. Nothing
contained in this Agreement shall give Triarc, ARG or Acquisition Sub, directly
or indirectly, the right to control or direct the operations of RTMMC prior to
the Closing. Prior to the Closing, RTMMC shall exercise, consistent with the
terms and conditions of this Agreement, complete control and supervision over
its operations.
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ARTICLE VI
ADDITIONAL COVENANTS
Section 6.01 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Prior to the Closing, RTMMC shall, and the Members shall cause
RTMMC 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 RTMMC; and (B) furnish promptly such
information concerning RTMMC 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 RTMMC. No
investigation conducted under this Section 6.01(a), however, will affect or be
deemed to modify any representation or warranty made in this Agreement.
(b) Triarc shall, and shall cause its Representatives and
Subsidiaries to, comply with all of the obligations of Triarc under, and RTMMC
and the Members shall, and shall cause their Representatives to, comply with all
of the obligations of RTMRG under, the Amended and Restated Confidentiality
Agreements, dated January 28, 2005 (the "CONFIDENTIALITY AGREEMENTS"), between
Triarc and RTMRG with respect to the information disclosed under this Section
6.01.
Section 6.02 COMMERCIALLY REASONABLE EFFORTS. Prior to the
Closing, upon the terms and subject to the conditions set forth in this
Agreement and in accordance with applicable Laws, each of the parties to this
Agreement shall use its commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable to ensure that the conditions set forth in Article VIII are
satisfied and to consummate the transactions contemplated by this Agreement and
the Ancillary Agreements as promptly as practicable. Except as otherwise
provided in Section 6.04(c), no party to this Agreement shall, or 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 VIII not being
satisfied or satisfaction of those conditions being delayed. Notwithstanding the
foregoing, it is understood and agreed that Section 7.20 of the RTMRG Merger
Agreement (and not this Section 6.02) shall govern matters pertaining to the
Trigger Event.
Section 6.03 NOTICES OF CERTAIN EVENTS.
(a) Prior to the Closing, Triarc shall notify the RTM
Representatives promptly of (i) any communication from any Person alleging that
the consent of such Person (or another Person) is or may be required in
connection with the transactions contemplated by this Agreement, (ii) any
communication from any Governmental Entity in connection with the transactions
contemplated by this Agreement, (iii) any material Legal Actions threatened or
commenced against or otherwise affecting ARG or any of its Subsidiaries or (iv)
any event, change, occurrence, circumstance or development between the date of
this Agreement and the Closing known to Triarc which would reasonably be
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expected to result in the failure of any of the conditions set forth in Section
8.03(a) or Section 8.03(b).
(b) Prior to the Closing, RTMMC and the Members 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 RTMMC or (iv) any event, change, occurrence, circumstance
or development between the date of this Agreement and the Closing known to RTMMC
or any Member which would reasonably be expected to result in the failure of any
of the conditions set forth in Section 8.02(a) or Section 8.02(b).
Section 6.04 CONSENTS; FILINGS.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement and in accordance with applicable Laws, each of the
parties to this Agreement shall use its commercially reasonable efforts to (i)
obtain any consents, approvals or other authorizations required in connection
with the transactions contemplated by this Agreement and (ii) make any necessary
filings and notifications, and thereafter make any other submissions either
required or deemed appropriate by each of the parties to this Agreement, in
connection with the transactions contemplated by this Agreement under (A) the
Securities Act, the Exchange Act and state securities or "blue sky" Laws, (B)
the HSR Act, and (C) any other applicable Laws, including all real estate
transfer tax returns. Triarc, RTMMC and the Members shall cooperate and consult
with each other in connection with the making of all such filings and
notifications. Neither Triarc, RTMMC nor any of the Members 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
RTMMC and each of the Members 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, RTMMC or any of the Members (or any of their
respective Affiliates) receives a request for additional information from any
such Governmental Entity that is related to the transactions contemplated by
this Agreement, then such party will endeavor in good faith to make, or cause to
be made, as soon as reasonably practicable and after consultation with the other
party (or in the case of Triarc, with the RTM Representatives), an appropriate
response to such request. Triarc shall advise the RTM Representatives promptly
of any understandings, undertakings or agreements (oral or written) which Triarc
or any of its Subsidiaries proposes to make or enter into with the Federal Trade
Commission, the Department of Justice or any other Governmental Entity in
connection with the transactions contemplated by this Agreement. In furtherance
and
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not in limitation of the foregoing, Triarc shall use its commercially reasonable
efforts to resolve any objections that may be asserted with respect to the
transactions contemplated by this Agreement under any antitrust, competition or
trade regulatory Laws.
(c) Notwithstanding the foregoing, nothing in this Section 6.04
shall require, or be construed to require, Triarc, RTMMC or any of the Members
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, RTMMC, any of the Members or any of their respective
Affiliates, (ii) any conditions relating to, or changes or restriction in, the
operations of any such assets or businesses which, in either case, would
reasonably be expected to (x) result in a Triarc Material Adverse Effect, an ARG
Material Adverse Effect or an RTMMC Material Adverse Effect or (y) materially
and adversely impact the economic or business benefits to Triarc and its
stockholders of the transactions contemplated by this Agreement or (iii) any
modification or waiver of the terms and conditions of this Agreement.
Section 6.05 ACTIONS WITH RESPECT TO DEBT FINANCING AND DEBT
REFINANCINGS.
(a) RTMMC shall, and the Members shall cause RTMMC to, cooperate
fully with Triarc and its Affiliates in connection with the Debt Financing and
the Debt Refinancings, including causing RTMMC 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) RTMMC shall, and the Members shall cause RTMMC to, use
commercially reasonable efforts to obtain (at no cost or expense to ARG or any
of its Subsidiaries after the Closing) on or prior to the Closing Date payoff
letters to satisfy in full no later than sixty (60) days after the Closing Date
each of the Contracts governing the Indebtedness for borrowed money of any RTM
Party or its Subsidiaries or included in the Winners Indebtedness Amount and, if
any such payoff letter shall not have been obtained on or prior to the Closing
Date, such amendments, waivers and modifications (the "REQUIRED DEBT CONSENTS")
to such Contracts (x) as are necessary to permit all such Indebtedness (other
than the RTM Non-Prepayable Debt) to be prepaid no later than the
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earlier of sixty (60) days after the Closing Date and the date any forbearance
agreement in effect on the Closing Date in respect of such Indebtedness shall
expire after the Closing Date and (y) with respect to the RTM Non-Prepayable
Debt, that are identified in Section 7.07(b) of the Triarc Disclosure Letter.
Section 6.06 NO SOLICITATION. From the date of this Agreement
until the Closing, RTMMC and each of the Members shall not, and shall cause each
of their respective Representatives and RTMMC 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
RTMMC 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 RTMMC and the Members under
this Section 6.06. RTMMC and each of the Members shall promptly inform its
Representatives of its obligations under this Section 6.06. RTMMC and each of
the Members 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 RTMMC. RTMMC and each of the
Members shall provide Triarc promptly with the identity of such Person and a
copy of such Takeover Proposal, indication or request (or, where no such copy is
available, a detailed description of such Takeover Proposal).
Section 6.07 DEFENSE OF LITIGATION. Prior to the Closing, none of
RTMMC or any of the Members shall settle or offer to settle any Legal Action
against such Member or RTMMC or any of its directors or officers arising out of
or relating to this Agreement or the Ancillary Agreements or the transactions
contemplated by this Agreement or the Ancillary Agreements without the prior
written consent of Triarc, which consent shall not be unreasonably withheld,
delayed or conditioned. Prior to the Closing, none of RTMMC or any of the
Members shall cooperate with any Person that may seek to restrain, enjoin,
prohibit or otherwise oppose the transactions contemplated by this Agreement or
the Ancillary Agreements, and RTMMC and the Members shall cooperate with the
reasonable requests of Triarc in resisting any such effort to restrain, enjoin,
prohibit or otherwise oppose such transactions.
Section 6.08 EMPLOYEES AND EMPLOYEE BENEFITS, ETC..
(a) RTMMC shall, and the Members shall cause RTMMC to, comply with
any applicable provisions of WARN, and any other Laws regarding plant closings
or layoffs (or similar triggering event) as they relate to the transactions
contemplated hereby.
(b) Effective on the Closing Date, ARG shall offer (and RTMMC
shall give ARG an opportunity to offer) employment to all RTMMC Employees (a
true and correct list, as of the date hereof, of which is set forth on Section
6.08(b)(i) of the RTMMC Disclosure Letter (which Section shall be updated
promptly by RTMMC and
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the Members until the Closing to reflect any additions or deletions thereto
after the date hereof)) including any employees on a leave of absence, on terms
and conditions which, in the aggregate and for a period of at least one year,
provide compensation that is at least as equal to that applicable to employees
of the same grade or position who are employees of ARG and its Subsidiaries but
excluding employees listed in Section 6.08(b)(ii) of the RTMMC Disclosure
Letter. ARG's offers of employment to such RTMMC Employees shall be made as soon
as practicable following the date hereof; PROVIDED, HOWEVER, that all such
offers of employment shall be made no later than the day prior to the Closing
Date and all such offers shall remain open at least until the Closing Date.
(c) For the year in which the Closing occurs, ARG shall cause any
welfare plan in which an RTMMC Employee who remains in the employ of ARG or its
Subsidiaries participates to credit such RTMMC 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 RTMMC Employee participates as of the Closing Date.
(d) For the period beginning on the Closing Date and ending on
January 2, 2006, 12:00 midnight Eastern time (the "TRANSITION PERIOD"), each
RTMMC 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 RTMMC Employee participated immediately prior to the Closing
Date.
(e) Each RTMMC 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 RTMMC Employee shall become entitled to participate
following the end of the Transition Period (collectively, the "POST-TRANSITION
PERIOD BENEFIT PLANS" with all service credited under comparable plans of RTMMC,
including but not limited to:
(i) under any Post-Transition Period Benefit Plan that is
a defined contribution plan, for purposes of eligibility to participate, vesting
and benefit levels;
(ii) under any Post-Transition Period Benefit Plan that
provides severance benefits, for purposes of eligibility to participate and the
calculation of the amount of the severance payment and other benefits;
(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 RTMMC Employees at or
above the Vice President level to be in effect as of the Closing Date shall be
subject to the
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approval of the RTM Representatives, not to be unreasonably withheld,
conditioned or delayed.
(g) RTMMC shall take all necessary actions to terminate each RTMAC
Employee Plan set forth on Section 6.08(g) of the RTMMC Disclosure Letter, in
each case effective as of immediately prior to the Closing and without any
Liability after the Closing to Triarc or any of its Affiliates.
(h) RTMMC shall take all necessary actions to cause the annual
rate of base salary of each RTMMC Employee whose name is set forth on Section
6.08(h) of the RTMMC Disclosure Letter to equal the annual rate of base salary
set forth next to each such RTMAC Employee's name on such Section 6.08(h), in
each case effective as of immediately prior to the Closing.
(i) Promptly after the Closing, subject to applicable Laws, RTMMC
shall transfer or cause to be transferred to ARG all employee records with
respect to RTMMC Employees.
(j) For purposes of payroll taxes with respect to all RTMMC
Employees that become employees of ARG or any of its Subsidiaries, ARG and RTMMC
shall treat the transactions contemplated hereby as a transaction described in
Treasury Regulation Sections 31.312(a)(1)-1(b)(2) and 31.3306(b)(1)-(b)(2).
(k) 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 RTMMC Employees employed by ARG or any of its Subsidiaries
after the Closing Date options to purchase shares of Triarc B-1 Common Stock
under Triarc's 2002 Equity Participation Plan in such amounts and with such
exercise prices and other terms as the Performance Compensation Subcommittee
shall determine, in its sole discretion, taking into account the position held
and years of service to the Arby's restaurant system by each respective RTMMC
Employee.
Section 6.09 PUBLIC ANNOUNCEMENTS. Triarc shall consult with the
RTM Representatives, and RTMMC and the Members shall, and the Members shall
cause RTMMC to, consult with Triarc, before issuing any press release or
otherwise making any public statements about this Agreement or any of the
transactions contemplated by this Agreement. Neither Triarc nor RTMMC nor any of
the Members shall issue or cause to be issued any such press release or make any
such public statement prior to such consultation, except to the extent required
by applicable Laws, in which case that party shall use its commercially
reasonable efforts to consult with the other party before issuing any such
release or making any such public statement.
Section 6.10 SARBANES-OXLEY COMPLIANCE. Prior to the Closing,
RTMMC and the Members shall
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cause their Representatives, and the Members shall cause RTMMC 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 regulations promulgated by the SEC pursuant thereto
(as amended from time to time, the "SOA") and the other requirements of the SOA,
including establishing and maintaining adequate disclosure controls and
procedures and internal controls over financial reporting as such terms are
defined in the SOA.
Section 6.11 RTM TRADEMARKS. Prior to the Closing Date, RTMMC
shall accept the assignment of 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, from RTM, Inc. At the Closing, RTMMC shall enter
into the Trademark License Agreement with ARG.
Section 6.12 BULK SALES. Each of the parties hereto waives
compliance with any applicable provisions of the Uniform Commercial Code Article
6 (Bulk Sales or Bulk Transfers) or analogous provisions of Law (the "BULK SALES
LAWS"), as such provisions may apply to the transactions contemplated herein.
ARTICLE VII
TAX MATTERS
Section 7.01 TAX INDEMNIFICATION.
(a) INDEMNIFICATION BY RTMMC AND THE MEMBERS. From and after the
Closing Date, RTMMC and each Member (jointly and severally) shall, subject to
the applicable limitations set forth in Article X, indemnify the Triarc
Indemnified Parties against and hold harmless from any and all liabilities,
losses, damages, claims, costs, expenses, interest, awards, judgments and
penalties (including, without limitation, reasonable fees for both in-house and
outside counsel, accountants and other outside consultants) suffered or incurred
(each a "TAX LOSS" and collectively, the "TAX LOSSES") arising out of:
(i) Taxes of RTMMC or any of its direct or indirect
members, and, with respect to the Purchased Assets and Assumed Liabilities,
Taxes for periods or portions thereof ending on or before the Closing Date
(including any Liability, obligation or expense pursuant to any Tax Sharing
Agreement, tax indemnification or similar arrangement) ("PRE-CLOSING TAXES"),
and Taxes of RTMMC attributable to the RTMMC 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; and
(ii) without duplication, Taxes imposed on Triarc or any
of its Subsidiaries as a result of (x) a breach of or inaccuracy in any
representation or warranty set forth in Section 2.13 or in the certificate
delivered by the RTM Representatives
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pursuant to Section 8.02(d) as of the date such representation or warranty was
made or as if such representation or warranty were made on and as of the Closing
Date (except for representations and warranties that expressly relate to a
specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date) or (y) a breach of any covenant or agreement
set forth in Section 5.01(p) or this Article VII; PROVIDED, that for purposes of
this Section 7.01(a)(ii) only, a breach of or inaccuracy in any representation,
warranty, covenant or agreement shall be determined without reference to any
materiality qualifier with respect thereto.
Notwithstanding the foregoing, RTMMC and the Members shall not be obligated to
pay any amounts under this Section 7.01(a) for any Tax Losses resulting from any
transaction with respect to the Purchased Assets and the Assumed Liabilities on
the Closing Date but after the Closing, other than any transaction in the
ordinary course of business and any RTMMC Transactions.
(b) INDEMNIFICATION CALCULATIONS. All indemnification payments for
Tax Losses made pursuant to this Section 7.01, and for Losses made pursuant to
Section 10.02 and Section 10.04, shall be made on an after-tax basis.
Accordingly, in determining the amount of any indemnification payment for a Tax
Loss or Loss suffered or incurred by an indemnitee hereunder, the amount of such
Tax Loss or Loss shall be (i) increased to take into account any additional Tax
cost actually incurred by the indemnitee arising from the receipt of
indemnification payments hereunder ("TAX COSTS") and (ii) decreased to take into
account any deduction, credit or other tax benefit actually realized by the
indemnitee with respect to such Tax Loss or Loss ("TAX BENEFITS"). In computing
the amount of any such Tax Cost or Tax Benefit, the indemnitee shall be deemed
to recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnification payment
hereunder or the incurrence or payment of any indemnified Tax Loss or Loss;
PROVIDED, that if a Tax Cost or Tax Benefit is not realized in the taxable
period during which an indemnifying party makes an indemnification payment or
the indemnitee incurs or pays any Tax Loss or Loss, the parties hereto shall
thereafter make payments to one another at the end of each subsequent taxable
period to reflect the net Tax Costs and Tax Benefits realized by the parties
hereto in each such subsequent taxable period.
Section 7.02 TAX INDEMNIFICATION PROCEDURES.
(a) After the Closing, Triarc shall promptly notify the RTM
Representatives in writing of any demand, claim or notice of the commencement of
an audit received by such party from any Governmental Entity or any other Person
with respect to Taxes for which RTMMC and the Members are liable pursuant to
Section 7.01; PROVIDED, HOWEVER, that a failure to give such notice will not
affect the Triarc Indemnified Parties' rights to indemnification under this
Article VII, except to the extent that RTMMC and the Members 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.
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(b) Payment by RTMMC and the Members of any amount due to the
Triarc Indemnified Parties under this Article VII 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 RTMMC
and the Members shall not be required to make any payment earlier than five
Business Days before it is due to the appropriate Governmental Entity or
applicable third party. In the case of a Tax that is contested in accordance
with the provisions of Section 7.03, payment of such contested Tax will not be
considered due earlier than the date a "final determination" to such effect is
made by such Governmental Entity or a court of competent jurisdiction. For this
purpose, a "final determination" shall mean a settlement, compromise, or other
agreement with the relevant Governmental Entity, whether contained in an IRS
Form 870 or other comparable form, or otherwise, or such procedurally later
event, such as a closing agreement with the relevant Governmental Entity, and
agreement contained in an IRS Form 870-D or other comparable form, an agreement
that constitutes a "determination" under Section 1313(a)(4) of the Code, a
deficiency notice with respect to which the period for filing a petition with
the Tax Court or the relevant state, local or foreign tribunal has expired or a
decision of any court of competent jurisdiction that is not subject to appeal or
as to which the time for appeal has expired.
(c) All amounts required to be paid pursuant to this Article VII
shall be paid promptly in immediately available funds by wire transfer to a bank
account designated by the indemnified party. In seeking indemnification under
this Article VII against RTMMC or the Members, 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 RTMMC or the Members (individually or jointly) directly pursuant
to this Agreement.
(d) Any payments required pursuant to this Article VII that are
not made within the time period specified in this Section 7.02 shall bear
interest at a rate and in the manner provided in the Code for interest on
underpayments of federal income Tax and, in the case of payments related to
Taxes other than U.S. federal income Taxes, at a rate and in the manner provided
under applicable Law for underpayments of such Tax.
Section 7.03 TAX AUDITS AND CONTESTS; COOPERATION.
(a) After the Closing Date, except as provided in (b) below, RTMMC
shall control the conduct, through counsel of its own choosing, of any audit,
claim for refund, or administrative or judicial proceeding involving any
asserted Tax liability or refund with respect to the Purchased Assets and
Assumed Liabilities (any such audit, claim for refund, or proceeding relating to
an asserted Tax liability referred to herein as a "CONTEST") with respect to a
taxable period ending on or prior to the Closing Date but Triarc shall have the
right to participate in such Contest at its own expense, and RTMMC 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
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if RTMMC fails 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) In the case of a Contest that relates to Straddle Periods (as
defined in Section 7.05), Triarc shall control the conduct of such Contest, but
RTMMC shall have the right to participate in such Contest at its own expense,
and Triarc shall not settle, compromise and/or concede any portion of such
Contest if such resolution is reasonably likely to give rise to a Tax liability
for which the Triarc Indemnified Parties are indemnified under Section 7.01(a)
without the consent of RTMMC, which consent shall not be unreasonably withheld,
conditioned or delayed; PROVIDED, that if Triarc fails to assume control of the
conduct of any such Contest within a reasonable period following the receipt by
Triarc of notice of such Contest, RTMMC 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.
(c) RTMMC and Triarc 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 the Purchased
Assets and Assumed Liabilities as is reasonably requested for the filing of any
Tax Returns and the preparation, prosecution, defense or conduct of any Contest.
RTMMC and Triarc shall reasonably cooperate with each other in the conduct of
any Contest or other proceeding involving or otherwise relating to Triarc or its
Subsidiaries or the Purchased Assets and Assumed Liabilities with respect to any
Tax and each shall execute and deliver such powers of attorney and other
documents as are necessary to carry out the intent of this Section 7.03(c).
Without limiting the foregoing, Triarc shall make available to RTMMC 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 RTMMC for taxable periods (or portions thereof)
ending on or before the Closing Date any one or more of those employees of ARG
or Triarc or their controlled Affiliates (as specifically requested by RTMMC)
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 RTMMC; PROVIDED,
that neither Triarc nor any of its controlled Affiliates shall have any
obligation to continue the employment of any employees; and PROVIDED, further,
that neither Triarc nor any of its controlled Affiliates shall have any
Liability to RTMMC for the acts or omissions of its employees under this Section
7.03(c). The parties agree that nothing in this Section 7.03(c) shall require
any of Triarc or its Affiliates to undertake any action that could unreasonably
interfere with, or otherwise cause an undue burden on, the activities of Triarc
or its Subsidiaries. RTMMC shall reimburse Triarc for Triarc's or its controlled
Affiliates' reasonable costs, including allocated direct and indirect costs, in
satisfying its obligations under this Section 7.03(c) with respect to RTMMC. Any
information obtained under this Section 7.03(c) shall be kept confidential,
except as may be otherwise necessary in connection with the filing of Tax
Returns or in the conduct of a Contest or other Tax proceeding.
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(d) Triarc and RTMMC shall (i) use their reasonable best efforts
to properly retain and maintain the Tax and accounting records with respect to
the Purchased Assets and Assumed Liabilities that relate to Pre-Closing Taxable
Periods and that are in such party's possession after the Closing Date for seven
years and shall thereafter provide RTMMC or Triarc, as the case may be, with
written notice prior to any destruction, abandonment or disposition of all or
any portions of such records, (ii) transfer such records to RTMMC or Triarc, as
the case may be, upon its written request prior to any such destruction,
abandonment or disposition and (iii) allow RTMMC or Triarc, and their Affiliates
and their respective Representatives, as the case may be, at times and dates
reasonably and mutually acceptable to the parties, to from time to time inspect
and review such records as RTMMC or Triarc, as the case may be, may deem
necessary or appropriate; PROVIDED, HOWEVER, that in all cases, such activities
are to be conducted by RTMMC or Triarc, as the case may be, during normal
business hours and at the sole expense of RTMMC or Triarc, as the case may be.
Any information obtained under this Section 7.03(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 7.04 PREPARATION OF TAX RETURNS AND PAYMENT OF TAXES.
(a) Triarc shall prepare (or cause to be prepared), and timely
file all Tax Returns with respect to the Purchased Assets and Assumed
Liabilities that are required to be filed with any Governmental Entity after the
Closing Date other than Pre-Closing Income Tax Returns and shall pay (or cause
to be paid) any Taxes due in respect of such Tax Returns. With respect to any
such Tax Returns filed with respect to any taxable periods (or portions thereof)
ending on or before the Closing Date ("PRE-CLOSING TAXABLE PERIODS"), RTMMC and
the Members shall be responsible for the Pre-Closing Taxes due in respect of
such Tax 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
deferred taxes established to reflect timing differences between book and Tax
income) on the RTM Closing Balance Sheet, and Triarc shall, subject to Section
7.01(a), be responsible for all other Pre-Closing Taxes shown as due on such Tax
Returns. Triarc shall notify the RTM Representatives of any amounts due from
RTMMC and the Members 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 RTMMC and
the Members shall remit such payment to Triarc no later than five Business Days
prior to the date such Tax Return is due.
(b) In the case of any income Tax Returns of RTMMC with respect to
any Taxable periods ending on or before the Closing Date ("PRE-CLOSING INCOME
TAX RETURNS"), RTMMC shall prepare such Tax Returns in a manner consistent with
past practice, except as otherwise required by a change of law or a good faith
resolution of a contest. In the case of Tax Returns that are filed with respect
to a Taxable period that ends on or prior to the Closing Date other than
Pre-Closing Income Tax Returns, Triarc shall prepare (or cause to be prepared)
such Tax Return in a manner consistent with past practice, except as otherwise
required by a change in law or a good faith resolution of a
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contest, and shall deliver any such Tax Return to RTMMC for its review at least
30 days prior to the date such Tax Return is required to be filed. If RTMMC
disputes any item on such Tax Return, it 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
RTMMC (including the Members).
(c) With respect to Tax Returns that are required to be filed by
or with respect to the Purchased Assets and Assumed Liabilities for a period
that begins before and ends after the Closing Date ("STRADDLE RETURNS"), such
Straddle Returns shall be prepared by Triarc 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 RTMMC and the Members 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 RTMMC of any amounts due from RTMMC and the Members in
respect of any Straddle Return no later than ten Business Days prior to the date
on which such Straddle Return is due, and RTMMC and the Members 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 RTMMC for
its review at least 30 days prior to the date on which such Tax Return is
required to be filed. If RTMMC disputes any item on such Tax Return, it 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 RTMMC (including the Members).
(d) Neither Triarc nor any of its Affiliates shall amend, refile
or otherwise modify any Tax Return relating in whole or in part to the Purchased
Assets and Assumed Liabilities with respect to any Pre-Closing Taxable Period
without the written consent of the RTMMC, which consent shall not be
unreasonably withheld, conditioned or delayed.
Section 7.05 STRADDLE PERIODS. For purposes of this Agreement, in
the case of any Taxes with respect to the Purchased Assets and Assumed
Liabilities 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
Purchased
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Assets 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 7.05 shall be
computed by reference to the level of such items on the Closing Date. The
parties hereto will, to the extent permitted by applicable Law, elect with the
relevant Governmental Entity to treat a portion of any Straddle Period as a
short taxable period ending as of the close of business on the Closing Date.
Section 7.06 REFUNDS.
(a) RTMMC shall be entitled to any credits and refunds (including
interest received thereon) with respect to the Purchased Assets and Assumed
Liabilities in respect of any Pre-Closing Taxable Period. All credits and
refunds (including interest received thereon) with respect to the Purchased
Assets and Assumed Liabilities for any Straddle Period shall be equitably
apportioned between Triarc and RTMMC pursuant to the principles set forth in
Section 7.05. Triarc shall cause each such refund to which RTMMC is entitled to
be paid to RTMMC promptly following its receipt.
(b) Except as provided in Section 7.06(a), Triarc and its
Subsidiaries shall be entitled to all credits and refunds (including interest
received thereon) in respect of any Taxes with respect to the Purchased Assets
and Assumed Liabilities.
Section 7.07 CONVEYANCE TAXES. ARG shall pay all sales, use, value
added, transfer, stamp, registration, documentary, excise, real property
transfer or gains, or similar Taxes ("TRANSFER TAXES") incurred solely as a
result of the purchase and sale of the Purchased Assets and assumption of the
Assumed Liabilities; and RTMMC and Triarc agree to jointly file all required
change of ownership and similar statements.
Section 7.08 TAX TREATMENT. So long as the amendment contemplated
by Section 8.13 of the RTMRG Merger Agreement shall have been made prior to the
Closing Date and the Allocation Requirement is satisfied, Triarc and RTMMC shall
file, and shall cause their respective Affiliates to file, all Federal income
Tax Returns in a manner consistent with the Purchase Price Allocation and shall
take no position contrary thereto for any Federal income Tax purposes, unless
otherwise required to do so by a good faith resolution of a contest or a change
in applicable law. The parties, each acting
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in good faith, shall attempt to agree on the manner in which such amounts
allocated to the Purchased Assets under the Purchase Price Allocation are
further allocated among the Purchased Assets for Federal income Tax purposes
and, failing to reach agreement prior to the Closing, each shall be permitted to
report and allocate such amounts among the Purchased Assets in their independent
and sole discretion.
Section 7.09 RTMMC ASSET RANGE. RTMMC and the Members agree that
the sum of the Aggregate Purchase Price, and any amounts treated as an
adjustment to the Aggregate Purchase Price pursuant to Section 10.08, and the
Assumed Liabilities shall be an amount within the RTMMC Asset Range.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.01 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
ASSET PURCHASE. The respective obligation of each party to this Agreement to
effect the Asset Purchase is subject to the satisfaction or waiver by Triarc,
RTMMC and the RTM Representatives on or prior to the Closing Date of each of the
following conditions:
(a) ANTITRUST. The waiting period applicable to the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements
under the HSR Act shall have expired or been terminated.
(b) CONSENTS. All material consents, approvals and other
authorizations of any Governmental Entity required to consummate the Asset
Purchase and the other transactions contemplated by this Agreement and the
Ancillary Agreements (other than the filing of the First Certificate of Merger
with the Secretary of State of the State of Georgia and the Second Certificate
of Merger with the Secretaries of State of the States of Delaware and Georgia
pursuant to the RTMRG Merger Agreement) shall have been obtained.
(c) NO INJUNCTIONS OR RESTRAINTS. No Governmental Entity shall
have enacted, issued, promulgated, enforced or entered any Laws or Orders
(whether temporary, preliminary or permanent) that (i) restrain, enjoin or
otherwise prohibit consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements or (ii) could reasonably be expected to
have an RTMMC Material Adverse Effect. No Governmental Entity shall have
instituted any proceeding seeking any such Orders.
(d) MERGERS. The Mergers shall be consummated simultaneously with
the Asset Purchase.
(e) RTMAC PURCHASE. The RTMAC Purchase shall be consummated
simultaneously with the Asset Purchase.
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Section 8.02 CONDITIONS TO OBLIGATIONS OF TRIARC, ARG AND
ACQUISITION SUB TO EFFECT THE ASSET PURCHASE. The obligations of Triarc, ARG and
Acquisition Sub to effect the Asset Purchase are also subject to the
satisfaction or waiver by Triarc (in its sole discretion) on or prior to the
Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Other than the representations
and warranties of (x) RTMMC and the Members contained in Section 2.01 (the first
sentence only), Section 2.02, Section 2.03, Section 2.07(c) (the penultimate
sentence only) and Section 2.08, and (y) the Members contained in Section 3.01
and Section 3.02, the representations and warranties of RTMMC and the Members
contained in this Agreement (as such representations and warranties would read
if all limitations or qualifications therein as to materiality or RTMMC 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 RTMMC
Material Adverse Effect. The representations and warranties of (x) RTMMC and the
Members contained in Section 2.01 (the first sentence only), Section 2.02,
Section 2.03, Section 2.07(c) (the penultimate sentence only) and Section 2.08,
and (y) the Members contained in Section 3.01 and Section 3.02, shall be true
and correct in all respects as of the Closing Date as if made on and as of the
Closing Date (except for any such representations and warranties made as of a
specific date, the accuracy of which shall be determined by reference to such
specific date).
(b) PERFORMANCE OF OBLIGATIONS. RTMMC and the Members shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date.
(c) RTM MATERIAL ADVERSE EFFECT. Since the date of this Agreement,
there shall not have occurred any event, and there shall not exist any condition
or set of circumstances, that has had or could reasonably be expected to have,
individually or in the aggregate, an RTM Material Adverse Effect.
(d) CERTIFICATE. Triarc shall have received a certificate, signed
by the RTM Representatives, certifying as to the matters set forth in Section
8.02(a), Section 8.02(b) and Section 8.02(c).
(e) CONSENTS UNDER AGREEMENTS. RTMMC and the Members shall have
obtained the consent, approval, waiver or other authorization of each Person, if
any, listed on Section 8.02(e) of the RTMMC Disclosure Letter.
(f) ESCROW AGREEMENT. Triarc shall have received a duly executed
copy of the Escrow Agreement from each of the RTMRG Shareholders, each of the
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RTMAC Sellers, RTMMC, each of the Members, each of the RTM Representatives and
the Escrow Agent.
(g) ATLANTA OFFICE LEASES. ARG shall have received duly executed
copies of the Atlanta Office Leases from RTMMC.
(h) TRADEMARK LICENSE AGREEMENT. ARG shall have received a duly
executed and delivered copy of the Trademark License Agreement. (i) RTMMC
RELATED PARTY ARRANGEMENTS. Triarc shall have received reasonably satisfactory
evidence of (x) the termination, cancellation and repayment or settlement in
full prior to or in connection with the Closing of each RTMMC 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 its Subsidiary to RTMMC (other than as set forth in Section 8.02(i) of
the RTMMC Disclosure Letter) and (y) the release of any and all guarantees of
Indebtedness of the Mrs. Winners Obligors and paid in the Debt Refinancings.
(i) RTMMC RELATED PARTY ARRANGEMENTS. Triarc shall have received
reasonably satisfactory evidence of (x) the termination, cancellation and
repayment or settlement in full prior to or in connection with the Closing of
each RTMMC 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 its Subsidiary to RTMMC (other
than as set forth in Section 8.02(i) of the RTMMC Disclosure Letter) and (y) the
release of any and all guarantees of Indebtedness of the Mrs. Winners Obligors
and paid in the Debt Refinancings.
(j) ASSIGNMENT OF ASSUMED CONTRACTS, ASSUMED LEASES, RTMMC
INTELLECTUAL PROPERTY RIGHTS AND RTMMC THIRD-PARTY INTELLECTUAL RIGHTS.
Acquisition Sub shall have received instruments assigning all of the Assumed
Contracts, Assumed Leases, RTMMC Intellectual Property Rights and RTMMC
Third-Party Intellectual Property Rights in a form reasonably satisfactory to
Acquisition Sub (including, if Acquisition Sub so requests, in recordable form),
and Acquisition Sub shall have received originals of all Assumed Contracts,
Assumed Leases, RTMMC Intellectual Property Rights and RTMMC Third-Party
Intellectual Property Rights to the extent in RTMMC's possession (or, to the
extent not in RTMMC's possession, true, correct and complete copies of said
Assumed Contracts, Assumed Leases, RTMMC Intellectual Property Rights and RTMMC
Third-Party Intellectual Property Rights).
(k) BILL OF SALE. RTMMC shall have executed and delivered to
Acquisition Sub, a bill of sale in form and substance reasonably satisfactory to
Acquisition Sub transferring all of RTMMC's right, title and interest in and to
the Purchased Assets.
(l) FIRPTA CERTIFICATE. RTMMC shall have furnished Triarc with a
certificate stating that RTMMC is not a "foreign" person within the meaning of
Section 1445 of the Code, which certificate shall set forth all information
required by, and otherwise be executed in accordance with, Treasury Regulation
ss. 1.1445-2(b)(2).
(m) 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 Aggregate Purchase Price, and
any amounts treated as an adjustment to the Aggregate Purchase Price pursuant to
Section
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10.08, and the Assumed Liabilities will not be other than an amount within the
RTMMC Asset Range (the "ALLOCATION REQUIREMENT").
Section 8.03 CONDITIONS TO OBLIGATIONS OF THE RTMMC AND THE
MEMBERS TO EFFECT THE ASSET PURCHASE. The obligations of RTMMC and the Members
to effect the Asset Purchase are also subject to the satisfaction or waiver by
the RTM Representatives (in their sole discretion) on or prior to the Closing
Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Other than the representations
of Triarc, ARG and Acquisition Sub contained in Section 4.01 (the first sentence
only) and Section 4.02, the representations and warranties of Triarc, ARG and
Acquisition Sub contained in this Agreement (as such representations and
warranties would read if all limitations or qualifications therein as to
materiality or material adverse effect (or similar concept) were deleted
therefrom) shall be true and correct in all respects as of the date of this
Agreement and shall be true and correct in all respects as of the Closing Date
as if made on and as of the Closing Date (except for any such representations
and warranties made as of a specific date, the accuracy of which shall be
determined by reference to such specific date), unless the failure or failures
to be so true and correct in all respects has not had and would not reasonably
be expected to have, individually or in the aggregate, a ARG Material Adverse
Effect. The representations and warranties of Triarc, ARG and Acquisition Sub
contained in Section 4.01 (the first sentence only) and Section 4.02 shall be
true and correct in all respects as of the Closing Date as if made on and as of
the Closing Date (except for any such representations and warranties made as of
a specific date, the accuracy of which shall be determined by reference to such
specific date).
(b) PERFORMANCE OF OBLIGATIONS. Triarc, ARG and Acquisition Sub
shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing Date.
(c) OFFICER'S CERTIFICATE. RTMMC shall have received a
certificate, signed by the chief executive officer or chief financial officer of
Triarc, certifying as to the matters set forth in Sections 8.03(a) and 8.03(b).
(d) CONSENTS UNDER AGREEMENTS. Triarc shall have obtained the
consent, approval, waiver or other authorization of each Person, if any, listed
on Section 9.03(e) of the Triarc Disclosure Letter.
(e) ESCROW AGREEMENT. RTMMC and the Members shall have received a
duly executed copy of the Escrow Agreement from each of Triarc, ARG and the
Escrow Agent.
(f) ASSIGNMENT AND ASSUMPTION AGREEMENT. Acquisition Sub shall
have executed and delivered to RTMMC, an Assignment and Assumption Agreement
providing for the assignment and assumption of the Assumed Liabilities (the
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"ASSIGNMENT AND ASSUMPTION AGREEMENT"), in a form reasonably satisfactory to
RTMMC.
(g) MRS. WINNERS INDEBTEDNESS. RTMMC and the Members shall have
received evidence of the repayment in full of the Winners Indebtedness Amount
and the release of any and all security interests and guarantees of Indebtedness
of the Ms. Winners Obligors paid in the Debt Refinancings.
Section 8.04 FRUSTRATION OF CLOSING CONDITIONS. None of the
parties to this Agreement may rely on the failure of any condition set forth in
this Article VIII to be satisfied if such failure was caused by such party's
failure to use commercially reasonable efforts to consummate the Asset Purchase
and the other transactions contemplated by this Agreement and the Ancillary
Agreements.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.01 GROUNDS FOR TERMINATION. This Agreement may be
terminated at any time prior to the Closing:
(a) by mutual written consent of Triarc and RTMMC;
(b) by either Triarc or RTMMC:
(i) if the Asset Purchase has not been consummated by
November 15, 2005, except that the right to terminate this Agreement under this
clause (b)(i) shall not be available to any party to this Agreement whose
failure to fulfill any of its obligations has been a principal cause of, or
resulted in, the failure to consummate the Asset Purchase by such date;
(ii) if any Law prohibits consummation of the Mergers, the
Asset Purchase or the RTMAC Purchase; or
(iii) if any Order restrains, enjoins or otherwise
prohibits consummation of the Mergers, the Asset Purchase or the RTMAC Purchase,
and such Order has become final and nonappealable;
(c) by Triarc, if RTMMC or the Members breach any of their
representations, warranties, covenants or agreements contained in this
Agreement, which breach (i) would give rise to the failure of a condition set
forth in Section 8.02(a), Section 8.02(b) or Section 8.02(c) and (ii) has not
been cured by the RTMMC or the Members within 20 Business Days after RTMMC's
receipt of written notice of such breach from Triarc; or
(d) by RTMMC, if any of Triarc, ARG or Acquisition Sub 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
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Section 8.03(a) or Section 8.03(b) and (ii) has not been cured by Triarc, ARG or
Acquisition Sub within 20 Business Days after Triarc's receipt of written notice
of such breach from RTMMC.
Section 9.02 EFFECT OF TERMINATION. If this Agreement is
terminated pursuant to Section 9.01, it shall become void and of no further
force and effect, with no Liability on the part of any party to this Agreement
(or any stockholder, member, director, officer, employee, agent or
representative of such party), except that if such termination results from the
willful (a) failure of any party to perform its obligations or (b) breach by any
party of its representations or warranties contained in this Agreement, then
such party shall be fully liable for any Liabilities incurred or suffered by the
other parties as a result of such failure or breach. The provisions of this
Section 9.02 and Article XI shall survive any termination of this Agreement.
Section 9.03 AMENDMENT. This Agreement may be amended by the
parties to this Agreement at any time. This Agreement may not be amended except
by an instrument in writing signed by each of Triarc, ARG, Acquisition Sub and
the RTM Representatives on behalf of RTMMC and the Members.
Section 9.04 EXTENSION; WAIVER. Triarc, ARG and Acquisition Sub,
on the one hand, and the RTM Representatives on behalf of RTMMC and the Members,
on the other hand, may (a) extend the time for the performance of any of the
obligations of the other party, (b) waive any inaccuracies in the
representations and warranties of the other party contained in this Agreement or
in any document delivered under this Agreement or (c) subject to applicable
Laws, waive compliance with any of the covenants or conditions contained in this
Agreement. Any agreement on the part of a party to any extension or waiver shall
be valid only if set forth in an instrument in writing signed by such party (or,
in the case of RTMMC or the Members, the RTM Representatives). The failure of
any part to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
ARTICLE X
SURVIVAL; INDEMNIFICATION
Section 10.01 SURVIVAL. The express representations and warranties
of each party set forth in this Agreement constitute the sole and exclusive
obligation or duty of such party to the other party with respect to the
disclosure of material facts relating to the transactions contemplated by this
Agreement, and each of the parties, in deciding whether to enter into this
Agreement and to consummate the transactions contemplated hereby, is not relying
on any general obligation to disclose imposed by applicable Laws. All such
representations, warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing. All representations
and warranties contained in this Agreement shall terminate and expire 18 months
after the Closing Date; PROVIDED, HOWEVER, that Claims asserted in good faith
with reasonable specificity (to the extent known at such time) and in writing by
notice from either party to the breaching party prior to such date shall not
thereafter be barred by the expiration of
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the relevant representation or warranty to the extent that it relates to such
Claims; PROVIDED, FURTHER, that the representations and warranties contained in
(a) Section 2.16 shall terminate and expire three years after the Closing Date;
(b) Section 2.01 (the first sentence only), Section 2.02, Section 2.03, Section
2.26, Section 3.01, Section 3.02, Section 4.01 (the first sentence only),
Section 4.02 and Section 4.05, shall survive without limitation; and (c) Section
2.13 and Section 2.14 shall terminate and expire on the date which is 90 days
after the date upon which the Liability to which any claim based upon, arising
out of or otherwise in respect of any inaccuracy or breach of any such
representation or warranty may relate is barred by all applicable statutes of
limitations (including all periods of extension, whether automatic or
permissive). Except as otherwise expressly provided in this Agreement, the
covenants and agreements contained in this Agreement shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
Section 10.02 OBLIGATION OF ARG AND ACQUISITION SUB TO INDEMNIFY.
Subject to the limitations contained in this Article X, from and after the
Closing, ARG and Acquisition Sub (but not Triarc) jointly and severally agree to
indemnify, defend and hold harmless RTMMC, each of the Members and each of their
respective directors, officers, employees, Representatives, successors and
assigns (collectively, the "RTMMC INDEMNIFIED PARTIES") from and against all
Losses based upon or arising from:
(a) any breach of or inaccuracy in any representation or warranty
of Triarc, ARG or Acquisition Sub contained in this Agreement or in the
certificate delivered by Triarc pursuant to Section 8.03(c), as of the date such
representation or warranty was made or as if such representation or warranty
were made on and as of the Closing Date (except for representations and
warranties that expressly relate to a specified date, the breach of or
inaccuracy in which will be determined with reference to such specified date);
(b) any breach of any covenant or agreement of Triarc, ARG or
Acquisition Sub contained in this Agreement;
(c) the ownership or operation of the Purchased Assets at any time
after the Closing (except to the extent Triarc is entitled to indemnification in
respect of such Loss under Section 10.04);
(d) any Assumed Liability; or
(e) enforcing the indemnification provided for in this Section
10.02, but only if a court of competent jurisdiction determines in a final,
nonappealable judgment that such RTMMC Indemnified Party is entitled to
indemnification under Section 10.02(a), Section 10.02(b), Section 10.02(c) or
Section 10.02(d), as applicable.
Section 10.03 MATTERS PERTAINING TO INDEMNIFICATION BY ARG AND
ACQUISITION SUB. The indemnification provided for in Section 10.02 shall be
subject to the following limitations:
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(a) Neither ARG nor Acquisition Sub shall be obligated to pay any
amounts in respect of indemnification obligations under Section 10.02(a), except
those based upon or arising from Section 4.01 (the first sentence only), Section
4.02 or Section 4.05 (the "ARG BASKET EXCLUSIONS"), until the aggregate amounts
for indemnification in respect of indemnification obligations under (i) such
Section, except those based upon or arising from the ARG Basket Exclusions, and
(ii) Section 10.02(a) of the RTMAC Purchase Agreement, except those based upon
or arising from the ARG Basket Exclusions (as defined therein), equals $4
million (the "ARG BASKET AMOUNT") after which ARG and Acquisition Sub jointly
and severally shall be obligated to pay in full all such amounts for such
indemnification in excess of the ARG Basket Amount. Neither ARG nor Acquisition
Sub shall be obligated to pay any amounts for indemnification under Section
10.02(a), except those based upon or arising from the ARG Basket Exclusions, for
any particular Loss unless the amount of such Loss (together with the amount of
all other Losses under this Agreement and the RTMAC Purchase Agreement including
the same or related conduct, facts, circumstances or events exceeds $75,000; for
the avoidance of doubt, any amounts for indemnification that neither ARG nor
Acquisition Sub is obligated to pay pursuant to this sentence shall not be
included in computing whether the ARG Basket Amount shall have been exceeded.
(b) ARG and Acquisition Sub jointly and severally shall be
obligated to pay any amounts for indemnification based on the ARG Basket
Exclusions without regard to the individual or aggregate amounts thereof and
without regard to whether all other indemnification payments shall have
exceeded, in the aggregate, the ARG Basket Amount.
(c) The maximum amount of indemnification payments under Section
10.02(a) of this Agreement and Section 10.02(a) of the RTMAC Purchase Agreement
to which the RTMMC Indemnified Parties shall be entitled to receive (other than
indemnification in connection with any of the ARG Basket Exclusions) shall not
in the aggregate exceed an amount equal to $40 million. Neither ARG nor
Acquisition Sub shall be liable for indemnification under this Agreement or the
RTMAC Purchase Agreement in an aggregate amount in excess of the sum of the
Aggregate Merger Consideration, the Aggregate Purchase Price and the RTMAC
Purchase Price.
(d) For purposes of determining whether a representation,
warranty, covenant or agreement has been breached or is inaccurate, limitations
or qualifications as to dollar amount, materiality, Triarc Material Adverse
Effect or ARG Material Adverse Effect (or similar concept) set forth in such
representation, warranty, covenant or agreement shall not be disregarded, but if
a breach or inaccuracy is so determined, then the amount of any Loss 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.
(e) Indemnification of an RTMMC Indemnified Party by ARG or
Acquisition Sub shall be limited to the amount of any Loss that remains after
deducting
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therefrom (and the cumulative amount of all Losses for purposes of determining
the ARG Basket Amount shall be reduced by the amount of) any insurance proceeds
or any indemnity, contribution or other similar payment actually recovered (net
of out-of-pocket costs incurred in connection with such recovery) by an RTMMC
Indemnified Party from any insurer or third party with respect thereto;
PROVIDED, that no RTMMC Indemnified Party shall be obligated to seek any such
recovery.
(f) To the extent that an RTMMC Indemnified Party has recovered
all or any portion of its Losses with respect to any matter arising under one
provision of this Agreement, such RTMMC Indemnified Party shall not be entitled
to recover such portion of such Losses pursuant to other provisions of this
Agreement.
(g) In no event shall any RTMMC Indemnified Party be entitled to
be indemnified for or make a claim against ARG or Acquisition Sub for (i) lost
profits or other consequential, incidental, special or punitive damages
resulting hereunder (other than such damages payable to a Governmental Entity or
other Person in respect of a third party claim as to which such damages were
assessed) or (ii) any Losses based upon or arising from any Legal Action
threatened or commenced against Triarc or any of its Subsidiaries or any of
their respective directors, officers, Affiliates, employees, Representatives,
successors or assigns by any shareholder of Triarc relating to the transactions
contemplated by this Agreement or any of the Ancillary Agreements.
Section 10.04 OBLIGATION OF RTMMC AND THE MEMBERS TO INDEMNIFY.
(a) Subject to the limitations contained in this Article X, from
and after the Closing, RTMMC and each Member jointly and severally 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:
(i) any breach of or inaccuracy in any representation or
warranty of RTMMC or any of the Members contained in Article II (other than any
representation or warranty contained in Section 2.13, any breach of or
inaccuracy in which is addressed in Article VII) or in the certificate delivered
by the RTM Representatives pursuant to Section 8.02(d) in respect of such
representations and warranties, as of the date such representation or warranty
was made or as if such representation or warranty were made on and as of the
Closing Date (except for representations and warranties that expressly relate to
a specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date);
(ii) any breach of any covenant or agreement of RTMMC
contained in this Agreement or any covenant or agreement of the Members
contained in this Agreement that is also a covenant or agreement of RTMMC
contained in this Agreement (other than, in each case, any covenant or agreement
contained in Section 5.01(p) or Article VII, any breach of which is addressed in
Article VII);
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(iii) any Excluded Liability (other than any Excluded
Liability related to Taxes, which is addressed in Article VII);
(iv) the failure to comply with any Bulk Sales Law in
connection with the transactions contemplated by this Agreement (other than a
Liability that is otherwise an Assumed Liability;
(v) any Legal Action (other than in respect to Dissenting
Shares (as defined in the Merger Agreement under Article 13 of the GBCC (as
defined in the RTMRG Merger Agreement)) threatened or commenced by an RTMRG
Shareholder, a Member or an RTMAC Seller relating to the transactions
contemplated by this Agreement, the RTMAC Purchase Agreement or the RTMRG Merger
Agreement (other than any such Legal Action threatened or commenced by any party
to such agreement to enforce against Triarc or any of its direct or indirect
Subsidiaries, as applicable, the terms of this Agreement, the RTMRG Merger
Agreement or the RTMAC Purchase Agreement or the agreements contemplated hereby
or thereby); or
(vi) enforcing the indemnification provided for in this
Section 10.04(a), but only if a court of competent jurisdiction determines in a
final, nonappealable judgment that such Triarc Indemnified Party is entitled to
indemnification under Section 10.04(a)(i), Section 10.04(a)(ii), Section
10.04(a)(iii), Section 10.04 (a)(iv) or Section 10.04(a)(v), as applicable.
(b) Subject to the limitations contained in this Article X, from
and after the Closing, each Member agrees to jointly and severally (to the
extent of the RTM Escrow Fund) and thereafter severally and not jointly,
indemnify, defend and hold harmless the Triarc Indemnified Parties from and
against all Losses based upon or arising from:
(i) any breach of or inaccuracy in any representation or
warranty of such Member contained in Article III or in the certificate delivered
by the RTM Representatives pursuant to Section 8.02(d) in respect of such
representations and warranties, as of the date such representation or warranty
was made or as if such representation or warranty were made on and as of the
Closing Date (except for representations and warranties that expressly relate to
a specified date, the breach of or inaccuracy in which will be determined with
reference to such specified date);
(ii) any breach of any covenant or agreement of such
Member contained in this Agreement that is not also a covenant or agreement of
RTMMC contained in this Agreement; or
(iii) enforcing the indemnification provided for in this
Section 10.04(b), but only if a court of competent jurisdiction determines in a
final, nonappealable judgment that such Triarc Indemnified Party is entitled to
indemnification under Section 10.04(b)(i) or Section 10.04(b)(ii).
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Section 10.05 MATTERS PERTAINING TO INDEMNIFICATION BY RTMMC AND
THE MEMBERS. The indemnification provided for in Section 10.04 shall be subject
to the following limitations:
(a) RTMMC and the Members shall not be obligated to pay any
amounts in respect of indemnification obligations under Section 10.04(a)(i) or
Section 10.04(b)(i), except those based upon or arising from Section 2.01 (the
first sentence only), Section 2.02, Section 2.03, Section 2.07(c) (the second
sentence only), Section 2.14, Section 2.26, Section 3.01 or Section 3.02 (the
"RTMMC BASKET EXCLUSIONS"), until the aggregate amounts for indemnification in
respect of indemnification obligations under (i) such Sections 10.04(a)(i) or
Section 10.04(b)(i), except those based upon or arising from the RTMMC Basket
Exclusions, (ii) Section 11.04(a) of the RTMRG Merger Agreement, except those
based upon or arising from the RTMRG Basket Exclusions, and (iii) Section
10.04(a)(i) and Section 10.04(b)(i) of the RTMAC Purchase Agreement, except
those based upon or arising from the RTMAC Basket Exclusions, equals $5 million
(the "RTM BASKET AMOUNT"), after which RTMMC and the Members shall be obligated
to pay in full all such amounts for such indemnification in excess of the RTM
Basket Amount. RTMMC and the Members shall not be obligated to pay any amounts
in respect of indemnification obligations under Section 10.04(a)(i) and Section
10.04(b)(i), except those based upon or arising from the RTMMC Basket
Exclusions, for any particular Loss unless the amount of such Loss (together
with the amount of all other Losses under this Agreement, the RTMRG Merger
Agreement and the 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 2.16); for the
avoidance of doubt, any amounts for indemnification that RTMMC and the Members
are not obligated to pay pursuant to this sentence shall not be included in
computing the RTM Basket Amount.
(b) RTMMC and the Members shall be obligated to pay any amounts
for indemnification based on the RTMMC Basket Exclusions without regard to the
individual or aggregate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the RTM Basket
Amount.
(c) The maximum amount of indemnification payments under Section
10.04(a)(i) and Section 10.04(b)(i) of this Agreement, Section 10.04(a) of the
RTMRG Merger Agreement and Section 10.04(a)(i) and Section 10.04(b)(i) of the
RTMAC Purchase Agreement to which the Triarc Indemnified Parties shall be
entitled to receive (other than indemnification in connection with any of the
RTMMC Basket Exclusions, the RTMRG Basket Exclusions and the RTMAC Basket
Exclusions) shall not exceed in the aggregate an amount equal to $40 million. No
Member will be liable for indemnification under this Agreement (whether pursuant
to Article VII or this Article X), including in this calculation such Member'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
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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 Member, (ii) the portion of the RTMAC Aggregate Purchase Price received by
such Member and (iii) a pro rata portion of the Aggregate Purchase Price based
on such Member's percentage interest in RTMMC immediately prior to the Closing,
PLUS (y) if such Member is an RTMRG Principal Shareholder, a pro rata portion of
12.9% of the Aggregate Merger Consideration, such portion to be based on the
number of shares of RTMRG Common Stock held by such RTMRG Principal Shareholders
relative to the total number of shares of RTMRG Common Stock held by all RTMRG
Principal Shareholders immediately prior to the First Effective Time, MINUS (z)
an amount equal to any indemnification claims paid by such Member under or in
respect of the RTMAC Purchase Agreement or the RTMRG Merger 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 RTMMC and the Members (individually or jointly)
directly pursuant to this Agreement.
(e) For purposes of determining whether a representation,
warranty, covenant or agreement has been breached or is inaccurate, limitations
or qualifications as to dollar amount, materiality or RTMMC 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
RTMMC Material Adverse Effect (or similar concept) set forth in such
representation warranty, covenant or agreement.
(f) Indemnification of a Triarc Indemnified Party by RTMMC or any
Member 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 RTMRG Merger Agreement. Without
limiting the generality of the foregoing, to the extent any Losses were taken
into account and had the effect of increasing the RTM Estimated Net Liabilities
or RTM Closing Net Liabilities determined pursuant to Section 2.08 of the RTMRG
Merger Agreement and Section 2.09 of the
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RTMRG Merger Agreement, respectively, the amount by which such Losses resulted
in an increase of the RTM Estimated Net Liabilities or RTM Closing Net
Liabilities, as the case may be, shall reduce on a dollar-for-dollar basis the
amount of such Loss for which the Triarc Indemnified Parties are entitled to
indemnification under Section 10.04.
(h) In no event shall any Triarc Indemnified Party be entitled to
be indemnified for or make a claim against RTMMC or any Member for lost profits
or other consequential, incidental, special or punitive damages resulting
hereunder (other than such damages payable to a Governmental Entity or other
Person in respect of a third party claim as to which such damages were
assessed).
Section 10.06 PROCEDURE FOR INDEMNIFICATION. The party making a
claim under this Article X is referred to as the "INDEMNIFIED PARTY," and the
party against whom such claims are asserted under this Article X is referred to
as the "INDEMNIFYING PARTY." If the Indemnifying Party is RTMMC or a Member, the
RTM Representatives shall exercise, in accordance with Section 11.17, all rights
of RTMMC or such Member as an Indemnifying Party in this Section 10.06, and for
procedural purposes only, all references to the Indemnifying Party in this
Section 10.06 shall be deemed to refer to the RTM Representatives. All claims by
any Indemnified Party under this Article X shall be asserted and resolved as
follows:
(a) NOTICE OF ASSERTED LIABILITY. Promptly after receipt by the
Indemnified Party of notice of the commencement of any action or proceeding, the
assertion of any claim by a third party, the imposition of any penalty or
assessment or a claim not involving a third party for which the Indemnified
Party seeks to be indemnified that may result in a Loss (each, an "ASSERTED
LIABILITY"), the Indemnified Party shall give written notice of such Asserted
Liability (the "CLAIMS NOTICE") to the Indemnifying Party. The failure to give
such prompt written notice shall not, however, relieve the Indemnifying Party of
its indemnification obligations, except and only to the extent that the
Indemnifying Party forfeits rights or defenses by reason of such failure or
actually incurs an incremental out-of-pocket expense by reason of such failure.
The Claims Notice shall describe the Asserted Liability in reasonable detail,
including (i) the representation, warranty, covenant or agreement that is
alleged to have been inaccurate or to have been breached, (ii) the basis for
such allegation, including the provision of supporting documentation and (iii)
if known, the aggregate amount of the Losses for which a claim is being made
under this Article X or, to the extent that such Losses are not known or have
not been incurred at the time such claim is made, an estimate, to be prepared in
good faith and accompanied by supporting documentation, of the aggregate
potential amount of such Losses.
(b) NON-THIRD PARTY CLAIMS. If the Claims Notice from the
Indemnified Party pertains to an Asserted Liability other than a claim or demand
from a third party, then the Indemnifying Party shall have 30 days following
receipt of the Claims Notice to make such investigation at the expense of the
Indemnifying Party of the Asserted Liability as the Indemnifying Party deems
necessary or desirable. For the purposes of such investigation, the Indemnified
Party agrees to make available to the Indemnifying Party the information relied
upon by the Indemnified Party to substantiate
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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.
(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
RTMMC or a Member, the 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
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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.
(v) The rights of RTMMC and the Members under this
Section 10.06(c) with respect to any Asserted Liability for which RTMMC and all
of the Members 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 RTMMC and the Members.
(vi) Notwithstanding any other provision of this
Agreement, the provisions of this Section 10.06(c) shall not apply to any
Asserted Liability for Taxes.
Section 10.07 SOLE AND EXCLUSIVE REMEDY. Except as otherwise
provided in Section 11.14, from and after the Closing, the remedies provided in
Article VII and this Article X and the Escrow Agreement shall be the sole
recourse of all parties hereto for all Losses based upon, arising from or
relating to any breach of any representation, warranty or covenant contained in
this Agreement or in any certificate delivered pursuant to Section 8.02(d) or
Section 8.03(c); PROVIDED, that the remedies provided in Article VII shall be
the sole remedy of the Triarc Indemnified Parties for all Tax Losses. Nothing in
this Section 10.07 shall limit any Person's right to seek and obtain any
equitable relief to which any Person shall be entitled or to seek any remedy on
account of any Person's fraud.
Section 10.08 MISCELLANEOUS. It is the intention of the parties to
treat any indemnity payment made under this Agreement with respect to the Asset
Purchase as an adjustment to the Aggregate Purchase Price for all federal,
state, local and foreign Tax purposes, and the parties agree to file their Tax
Returns accordingly, except as otherwise required by a change in law or a good
faith resolution of a contest.
ARTICLE XI
MISCELLANEOUS
Section 11.01 DEFINITIONS. The following terms, as used herein,
have the following meanings:
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"ACCOUNTS RECEIVABLE" means all rights of RTMMC to payment for goods or
services provided by RTMMC.
"ACQUISITION SUB" has the meaning set forth in the preamble.
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by Contract or otherwise.
"AGGREGATE MERGER CONSIDERATION" has the meaning set forth in the RTMRG
Merger Agreement.
"AGGREGATE PURCHASE PRICE" has the meaning set forth in Section 1.05.
"AGREEMENT" has the meaning set forth in the preamble.
"ALLOCATION REQUIREMENT" has the meaning set forth in Section 8.02(m).
"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 RTMRG Merger Agreement, the Trademark License Agreement
and the Transaction Support Agreement.
"ARG" has the meaning set forth in the preamble.
"ARG BASKET AMOUNT" has the meaning set forth in Section 10.03(a).
"ARG BASKET EXCLUSIONS" has the meaning set forth in Section 10.03(a).
"ARG MATERIAL ADVERSE EFFECT" has the meaning set forth in the RTMRG
Merger Agreement.
"ASSERTED LIABILITY" has the meaning set forth in Section 10.06(a).
"ASSET PURCHASE" has the meaning set forth in the recitals.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning set forth in
Section 8.03(f).
"ASSUMED CONTRACTS" has the meaning set forth in Section 1.01(b).
"ASSUMED LEASES" has the meaning set forth in Section 1.01(c).
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"ASSUMED LIABILITIES" has the meaning set forth in Section 1.03.
"ATLANTA OFFICE LEASES" has the meaning set forth in the recitals.
"BOOKS AND RECORDS" means all of the RTMMC's books and records used in
connection with or otherwise related to the Purchased Assets or the Assumed
Liabilities, including (a) all corporate records (or their limited liability
company equivalent), (b) executed copies of all of the Assumed Leases and the
Assumed Contracts, (c) all equipment, product and other warranties pertaining to
the Purchased Assets, (d) all technical information and data, maps, computer
files, diagrams, blueprints and schematics, (e) all filings made with or records
required to be kept by any Governmental Entity (including all backup information
on which such filings are based), (f) all research and development reports, (g)
all equipment and operating logs, (h) all financial and accounting records, (i)
all books and records relating to Tax matters, and (j) all creative, promotional
or advertising materials.
"BULK SALES LAWS" has the meaning set forth in Section 6.14.
"BUSINESS" means the business and operations of RTMMC 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.
"CERTIFICATE OF DESIGNATION" has the meaning set forth in the RTMRG
Merger Agreement.
"CLAIMS NOTICE" has the meaning set forth in Section 10.06(a).
"CLOSING" has the meaning set forth in Section 1.06.
"CLOSING DATE" has the meaning set forth in Section 1.06.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIALITY AGREEMENTS" has the meaning set forth in Section
6.01(b).
"CONTEST" has the meaning set forth in Section 7.03(a).
"CONTRACTS" means any written or oral contracts, agreements, licenses,
notes, bonds, mortgages, indentures, commitments, leases or other instruments or
other legally binding obligations.
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"CORPORATE SERVICES AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"CUSTOMER LISTS" means all lists, documents, records, written
information, computer files and other computer readable media used by RTMMC in
connection with or otherwise related to the Purchased Assets, concerning past,
present or prospective customers of, or other purchasers of goods or services
from, the Purchased Assets.
"DEBT FINANCING" has the meaning set forth in the RTMRG Merger
Agreement.
"DEBT REFINANCINGS" has the meaning set forth in the RTMRG Merger
Agreement.
"DOL" means the United States Department of Labor.
"ENVIRONMENTAL LAWS" shall mean federal, state, local and foreign laws,
principles of common laws, civil laws, regulations and codes, as well as orders,
decrees, judgments or injunctions, issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environment or public or
employee health and safety, in each case as in effect on or prior to the date
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" has the meaning set forth in the RTMRG Merger Agreement.
"ESCROW AGREEMENT" has the meaning set forth in the recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCLUDED ASSET DISPOSITION" has the meaning set forth in the RTMRG
Merger Agreement.
"EXCLUDED ASSETS" has the meaning set forth in Section 1.02.
"EXCLUDED LIABILITIES" has the meaning set forth in Section 1.04.
"EXCLUDED RECEIVABLES" means all receivables and other rights to
payment owed to RTMMC by any RTM Related Entity or any other Affiliate of RTMMC,
other than RTMRG, RTMAC or any of their respective Subsidiaries.
"EXPENSE FUND" has the meaning set forth in the RTMRG Merger Agreement.
"EXPENSES" has the meaning set forth in Section 11.03.
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"FIRST CERTIFICATE OF MERGER" has the meaning set forth in the RTMRG
Merger Agreement.
"FIRST EFFECTIVE TIME" has the meaning set forth in the RTMRG Merger
Agreement.
"FIRST MERGER" has the meaning set forth in the recitals.
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENTAL ENTITY" means any international, national, federal,
state, provincial or local governmental, regulatory or administrative authority,
agency, commission, court, tribunal, arbitral body or self-regulated entity,
whether domestic or foreign.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"IMMEDIATE FAMILY MEMBER" means, with respect to any natural person,
(a) such person's spouse, parents, grandparents, children, grandchildren and
siblings, (b) such person's former spouses and current spouses of such person's
children, grandchildren and siblings and (c) estates, trusts, partnerships and
other entities of which substantially all of the interest is held directly or
indirectly by the foregoing.
"INDEBTEDNESS" has the meaning set forth in the RTMRG Merger Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in Section 10.06.
"INDEMNIFYING PARTY" has the meaning set forth in Section 10.06.
"INDEPENDENT ACCOUNTANTS" has the meaning set forth in the RTMRG Merger
Agreement.
"INVENTORY" means all merchantable inventory of food, beverages and
other consumables, paper and supplies, as well as new uniforms and promotional
items located or otherwise used at the Restaurants at the close of business on
the Closing.
"INVESTMENTS" has the meaning set forth in Section 2.04.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" means the knowledge of each respective Member and 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.
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"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.
"LEASED REAL PROPERTY" means the leasehold interests of RTMMC as of the
date hereof that are used in connection with or otherwise related to the
Business, plus such additions thereto and less such deletions therefrom arising
between the date hereof and the Closing Date in accordance with Section 5.01
hereof.
"LEASEHOLD INTERESTS" means all of RTMMC's right, title and interest
in, to and under the Assumed Leases, including all of the RTMMC's right, title
and interest in and to any security deposits made under the Assumed Leases.
"LEASES" means all lease agreements pursuant to which RTMMC has been
granted, and currently holds, a leasehold estate and interest in any of the
Leased Real Property, and all rights associated therewith.
"LEGAL ACTIONS" means any legal actions, claims, demands, arbitrations,
hearings, charges, complaints, investigations, examinations, indictments,
litigations, suits or other civil, criminal, administrative or investigative
proceedings, at law, in equity or otherwise, by or before any Governmental
Entity.
"LIABILITIES" means all liabilities, whether accrued contingent,
absolute, inchoate or otherwise.
"LIENS" means any liens, pledges, security interests, claims,
encumbrances, options, rights of first refusal or offer, mortgages, deeds of
trust, easements, restrictive covenants, encroachments or other survey defects
or any other restriction or third party right, including restrictions on the
right to vote equity interests.
"LOSSES" means any and all losses, Liabilities, judgments, damages,
deficiencies, awards, fines, penalties, Taxes, diminutions in value, expenses,
fees, costs, or amounts paid in settlement (including interest and reasonable
costs or expenses (including reasonable attorneys' fees and costs)), arising out
of any incident, event, circumstance or proceeding asserted or initiated or
otherwise occurring or existing in respect of any matter.
"MANAGEMENT SERVICES AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"MEMBER" has the meaning set forth in the preamble.
"MEMBERSHIP INTEREST" means a membership interest in RTMMC.
"MERGER SUB CORP." has the meaning set forth in the recitals.
"MERGER SUB LLC" has the meaning set forth in the recitals.
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"MERGERS" has the meaning set forth in the recitals.
"MRS. WINNERS OBLIGORS" has the meaning set forth in the RTMRG Merger
Agreement.
"NET LIABILITIES" has the meaning set forth in the RTMRG Merger
Agreement.
"ORDERS" means any orders, judgments, injunctions, awards, decrees or
writs handed down, adopted or imposed by any Governmental Entity.
"PER SHARE MERGER CONSIDERATION" has the meaning set forth in the RTMRG
Merger Agreement.
"PERMITS" means any franchises, grants, authorizations, licenses,
registrations, easements, variances, exceptions, consents, certificates,
approvals and other permits of any Governmental Entity.
"PERMITTED LIENS" means (i) Liens for Taxes (and assessments and other
governmental charges) not yet due and payable or that have been paid in full,
(ii) mechanics', landlord's workmen's, repairmen's, warehousemen's, carriers' or
other like Liens (including Liens created by operation of law) arising in the
ordinary course of business consistent with past practice and securing amounts
that are not yet due and payable or are being contested in good faith, (iii)
Liens in respect of easements, permits, licenses, rights-of-way, restrictive
covenants, reservations or encroachments or other similar non-monetary title
exceptions with respect to real property which do not materially affect the
current use of the underlying asset, (iv) Liens in respect of pledges or
deposits under workers' compensation laws or similar legislation, unemployment
insurance or other types of social security or to secure the performance of
statutory obligations, surety and appeal, bonds, bids, leases, government
Contracts and similar obligations, (v) municipal by-laws, development
restrictions or regulations, facility cost sharing and servicing Contracts and
zoning, building or planning restrictions or regulations, (vi) Liens securing
Indebtedness to be repaid in the Debt Refinancings and (vii) Liens arising in
connection with this Agreement.
"PERSON" means an individual, corporation, partnership, joint venture,
limited liability company, association, trust or other entity or organization,
including an unincorporated organization, a government or political subdivision
or an agency or instrumentality thereof.
"PERSONAL PROPERTY" means all of the equipment, tools, leasehold
improvements, plant, inventory, spare parts, supplies and other tangible
personal property that are, as of the date hereof, owned or leased by RTMMC for
use in connection with or otherwise related to the Purchased Assets, plus such
additions thereto and less such deletions therefrom arising between the date
hereof and the Closing Date in accordance with Section 5.01 hereof.
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"POST-CLOSING TAXES" has the meaning set forth in Section 7.01(b).
"POST-TRANSITION PERIOD BENEFIT PLANS" has the meaning set forth in
Section 6.08(d).
"PRE-CLOSING INCOME TAX RETURNS" has the meaning set forth in Section
7.04(b).
"PRE-CLOSING TAXABLE PERIODS" has the meaning set forth in Section
7.04(a).
"PRE-CLOSING TAXES" has the meaning set forth in Section 7.01(a).
"PURCHASED ASSETS" has the meaning set forth in Section 1.01.
"PURCHASE PRICE ALLOCATION" means the following allocation: (x) the
Merger Consideration (subject to Section 2.02(c)(iv) and as adjusted for
payments pursuant to Section 2.07 of the RTMRG Merger Agreement), and any
amounts treated as an adjustment to the aggregate Per Share Merger Consideration
pursuant to Section 11.08 of the RTMRG Merger Agreement, will be allocated to
the shares of RTMRG Common Stock outstanding on the Closing, (y) the 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 Aggregate Purchase Price, and any amounts treated as an
adjustment to the Aggregate Purchase Price pursuant to Section 10.08, and
Assumed Liabilities will be allocated to the Purchased Assets.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in the RTMRG
Merger Agreement.
"REPRESENTATIVES" means, with respect to any Person, the directors,
officers, employees, consultants, accountants, legal counsel, investment
bankers, agents and other representatives of such Person and its Subsidiaries.
"REQUIRED DEBT CONSENTS" has the meaning set forth in Section 6.05(b).
"RESTATED COMBINED RTM AUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 2.07(a).
"RESTATED COMBINED RTM FINANCIAL STATEMENTS" has the meaning set forth
in Section 2.07(a).
"RESTATED COMBINED RTM UNAUDITED FINANCIAL STATEMENTS" has the meaning
set forth in Section 2.07(a).
"RESTAURANTS" means "Arby's" branded restaurants and, with respect to
any Person, those certain "Arby's" restaurants owned or leased by such Person.
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"RTM BASKET AMOUNT" has the meaning set forth in Section 10.05(a).
"RTM BENCHMARK" has the meaning set forth in the RTMRG Merger
Agreement.
"RTM CLOSING BALANCE SHEET" has the meaning set forth in the RTMRG
Merger Agreement.
"RTM CLOSING NET LIABILITIES" has the meaning set forth in the RTMRG
Merger Agreement.
"RTM ESCROW FUND" has the meaning set forth in the Escrow Agreement.
"RTM ESTIMATED NET LIABILITIES" has the meaning set forth in the RTMRG
Merger Agreement.
"RTM MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the business, condition (financial or otherwise), assets, properties
or results of operations of the RTM Parties and their Subsidiaries, taken as a
whole, but shall exclude any change or development resulting from (i) any change
in Law or accounting rules or interpretations thereof, (ii) any change in
interest rates, general economic conditions or changes in the general economic
condition of any segment of the restaurant industry, or (iii) any change
resulting from the entry into or the announcement of this Agreement or the
transactions contemplated hereby, the performance of a party's obligations
hereunder or to avoid a breach of this Agreement or (b) that prevents,
materially delays or materially impairs the ability of any RTM Party, any RTMRG
Shareholder, any RTMAC Seller, RTMMC or any Member to perform its obligations
under this Agreement and the Ancillary Agreements to which it is a party or to
consummate the transactions contemplated hereby or thereby.
"RTM NON-PREPAYABLE DEBT" has the meaning set forth in the RTMRG Merger
Agreement.
"RTM PARTIES" means each of RTMRG, RTMAC and RTMMC.
"RTM POST-SIGNING RETURNS" has the meaning set forth in Section
5.01(p).
"RTM RELATED ENTITIES" means, collectively, 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 11.17(a).
"RTM TRANSACTIONS" has the meaning set forth in the recitals.
"RTMAC" has the meaning set forth in the recitals.
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"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 preamble.
"RTMMC ASSET RANGE" means an amount greater than $117 million and less
than $127 million; PROVIDED, appropriate adjustments will be made to the RTMMC
Asset Range to the extent that, as of Closing, the assets of RTMMC, or the
condition of such assets, differ from the assets of RTMMC, or the condition of
such assets, as presented in the information supplied to Valuation Research
Corporation prior to the date hereof.
"RTMMC BASKET EXCLUSIONS" has the meaning set forth in Section
10.05(a).
"RTMMC DISCLOSURE LETTER" has the meaning set forth in Article II.
"RTMMC EMPLOYEE PLAN" has the meaning set forth in Section 2.14(a).
"RTMMC EMPLOYEES" means all employees of RTMMC.
"RTMMC INDEMNIFIED PARTIES" has the meaning set forth in Section 10.02.
"RTMMC INTELLECTUAL PROPERTY RIGHTS" has the meaning set forth in
Section 2.17(c).
"RTMMC LEASES" has the meaning set forth in Section 2.12(a)(xiv).
"RTMMC MATERIAL ADVERSE EFFECT" means an effect that (a) is materially
adverse to the Purchased Assets, condition (financial or otherwise), assets,
properties or results of operations of RTMMC, 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
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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 RTMMC or any 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.
"RTMMC MATERIAL CONTRACTS" has the meaning set forth in Section
2.12(a).
"RTMMC PERMITS" has the meaning set forth in Section 2.10(a).
"RTMMC PREPAYMENT PENALTIES" has the meaning set forth in Section
2.07(c).
"RTMMC REAL PROPERTY" has the meaning set forth in Section 2.18.
"RTMMC REAL PROPERTY LEASE" has the meaning set forth in Section
2.12(a)(xiii).
"RTMMC RELATED PARTY ARRANGEMENT" has the meaning set forth in Section
2.25.
"RTMMC THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS" has the meaning set
forth in Section 2.17(b).
"RTMMC TRANSACTIONS" means any transactions among any of Triarc, ARG,
Acquisition Sub, RTMMC, its direct and indirect members, or any of their
Subsidiaries or any of their Affiliates contemplated by this Agreement, the
RTMRG Merger Agreement or the RTMAC Purchase Agreement to occur on or before the
Closing Date, including any Excluded Asset Dispositions, any payment of the
Aggregate Merger Consideration, the Aggregate Purchase Price, the RTMAC
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 the RTMRG Merger Agreement and Section 6.02 of the RTMRG
Merger Agreement; Section 1.03, Section 6.11, Section 8.02(g), Section 8.02(h),
Section 8.02(i) and Section 8.02(j) of this Agreement; and Section 6.12 and
Section 8.02(g) of the RTMAC Purchase Agreement.
"RTMRG" has the meaning set forth in the recitals.
"RTMRG BASKET EXCLUSIONS" has the meaning set forth in the RTMRG Merger
Agreement.
"RTMRG COMMON STOCK" has the meaning set forth in the recitals.
"RTMRG DISCLOSURE LETTER" has the meaning set forth in the RTMRG Merger
Agreement.
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"RTMRG MERGER AGREEMENT" has the meaning set forth in the recitals.
"RTMRG PRINCIPAL SHAREHOLDERS" has the meaning set forth in the
recitals.
"RTMRG SHAREHOLDERS" has the meaning set forth in the RTMRG Merger
Agreement.
"RTMRG SHAREHOLDERS OBLIGATIONS AMOUNT" has the meaning set forth in
the RTMRG Merger Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SECOND CERTIFICATE OF MERGER" has the meaning set forth in the RTMRG
Merger Agreement.
"SECOND MERGER" has the meaning set forth in the recitals.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SOA" has the meaning set forth in Section 6.10.
"STRADDLE PERIOD" has the meaning set forth in Section 7.05.
"STRADDLE RETURNS" has the meaning set forth in Section 7.04(c).
"SUBSIDIARY" means, as to any Person, (i) a corporation of which such
Person directly or indirectly owns securities or other equity interests
representing more than fifty percent (50%) of the aggregate voting power or (ii)
any other Person in which such Person, directly or indirectly, has the power to
direct the policies, management and affairs thereof.
"TAKEOVER PROPOSAL" means any proposal or offer relating to (i) a
merger, consolidation, share exchange or business combination involving RTMMC,
(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 RTMMC, (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 RTMMC, including by way of a tender offer or exchange offer,
(iv) a reorganization, recapitalization, liquidation or dissolution of RTMMC or
(v) any other transaction having a similar effect to those described in clauses
(i) - (iv), in each case other than the transactions contemplated by this
Agreement.
"TAX" or "TAXES" means (i) any and all federal, state, provincial,
local, foreign and other taxes (including withholding taxes), levies, fees,
imposts, duties, and similar governmental charges (including any interest,
fines, assessments, penalties or additions to tax imposed in connection
therewith or with respect thereto) including (x) taxes imposed on, or measured
by, income, franchise, profits or gross receipts, and
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(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).
"TAX ACTIONS" has the meaning set forth in Section 5.01(p).
"TAX BENEFITS" has the meaning set forth in Section 7.01(b).
"TAX COSTS" has the meaning set forth in Section 7.01(b).
"TAX LOSS" has the meaning set forth in Section 7.01(a).
"TAX RETURNS" means any and all reports, returns, declarations, claims
for refund, elections, disclosures, estimates, information reports or returns or
statements required to be supplied to a taxing authority in connection with
Taxes, including any schedule or attachment thereto or amendment thereof.
"TAX SHARING AGREEMENT" means any agreement relating to the sharing,
allocation or indemnification of Taxes, or any similar agreement, Contract or
arrangement.
"TM CAPITAL" means TM Capital Corp., a Delaware corporation.
"TRADEMARK LICENSE AGREEMENT" has the meaning set forth in the
recitals.
"TRANSACTION SUPPORT AGREEMENT" has the meaning set forth in the
recitals.
"TRANSFER" has the meaning set forth in Section 1.01.
"TRANSFER TAXES" has the meaning set forth in Section 7.07.
"TRANSITION PERIOD" has the meaning set forth in Section 6.08(d).
"TRIARC" has the meaning set forth in the preamble.
"TRIARC B-1 ELECTION" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIARC B-2 ELECTION" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIARC CLASS B-1 COMMON STOCK" has the meaning set forth in the RTMRG
Merger Agreement.
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"TRIARC CLASS B-2 COMMON STOCK" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC CONTRIBUTIONS" has the meaning set forth in the recitals.
"TRIARC DISCLOSURE LETTER" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC INDEMNIFIED PARTIES" has the meaning set forth in Section
10.04(a).
"TRIARC MATERIAL ADVERSE EFFECT" has the meaning set forth in the RTMRG
Merger Agreement.
"TRIARC SEC REPORTS" has the meaning set forth in the RTMRG Merger
Agreement.
"TRIGGER EVENT" has the meaning set forth in the RTMRG Merger
Agreement.
"WARN" means the Worker Adjustment and Retraining Notification Act, as
amended.
"WINNERS INDEBTEDNESS AMOUNT" has the meaning set forth in the RTMRG
Merger Agreement.
Section 11.02 INTERPRETATION. Any reference in this Agreement to a
statute shall be to such statute, as amended from time to time prior to the date
hereof, and to the rules and regulations promulgated thereunder prior to the
date hereof. Any reference to any agreement, document or instrument means such
agreement, document or instrument as amended or otherwise modified from time to
time in accordance with its terms. Unless the context otherwise requires, (1)
all references made in this Agreement to a Section, Schedule or an Exhibit are
to a Section, Schedule or an Exhibit of or to this Agreement, (2) "or" is
disjunctive but not necessarily exclusive, (3) "will" shall be deemed to have
the same meaning as the word "shall" and (4) words in the singular include the
plural and vice versa. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation," whether or not so followed. All references to "$" or
dollar amounts are to lawful currency of the United States of America, unless
otherwise expressly stated. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
Section 11.03 FEES, COSTS AND EXPENSES.
(a) If the RTM Transactions are consummated, all reasonable
out-of-pocket fees and expenses (including those payable to third party
Representatives incurred by Triarc, ARG and Acquisition Sub or the RTM Parties,
or their Subsidiaries or on its behalf in connection with this Agreement and the
Ancillary Agreements and the
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transactions contemplated by this Agreement and the Ancillary Agreements,
including the previously contemplated initial public offering of Arby's, Inc.,
the Debt Financing and the Debt Refinancings (other than the costs and expenses
of complying with Section 7.07(b) of the RTMRG Merger Agreement, or any similar
costs and expenses incurred or paid by any RTM Party or its Subsidiaries prior
to the date hereof), including the fees and expenses of Ernst & Young, LLP and
Deloitte & Touche, LLP ("EXPENSES"), shall be paid by ARG promptly upon receipt
of reasonably detailed invoices and other documentation related thereto. Section
11.03(a) of the RTMMC Disclosure Letter sets forth a true and complete
description of the basis upon which the Expenses payable by or on behalf of
RTMMC to the advisors of RTMMC will be paid.
(b) If the RTM Transactions are not consummated, all Expenses
shall be paid by the party incurring those Expenses, except that the Expenses
incurred in connection with the filing fee under the HSR Act, the Expenses
incurred in connection with the previously contemplated initial public offering
of Arby's, Inc. (including those of Deloitte & Touche LLP in connection with the
previously contemplated initial public offering of Arby's, Inc.), the Debt
Refinancings (other than the costs and expenses of complying with Section
7.07(b) of the RTMRG Merger Agreement, or any similar costs and expenses
incurred or paid by any RTM Party or its Subsidiaries prior to the date hereof),
the registration fee in respect of the Shelf Registration Statement, the fees
and expenses of Valuation Research and the Expenses incurred by RTMMC and the
Members in connection with their obligations under Section 6.10 shall be shared
60% by Triarc and 40% by RTMMC, RTMRG and RTMAC.
Section 11.04 NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be delivered by hand or overnight courier service or by
facsimile:
if to Triarc, ARG or Acquisition Sub, to:
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
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if to RTMMC or the Members, to:
RTM Management Company, L.L.C.
5995 Barfield Road
Atlanta, Georgia 30328-4411
Attention: Dennis E. Cooper
Fax: (404) 847-0183
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
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communication shall be effective (a) if delivered by hand, when such delivery is
made at the address specified in this Section 11.04, (b) if delivered by
overnight courier service, the next Business Day after such communication is
sent to the address specified in this Section 11.04 or (c) if delivered by
facsimile, when such facsimile is transmitted to the facsimile number specified
in this Section 11.04 and appropriate confirmation is received.
Section 11.05 GOVERNING LAW. This Agreement and any claim or
controversy relating hereto shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflicts of law
rules of such state that would result in the application of the law of another
jurisdiction.
Section 11.06 JURISDICTION. Except as otherwise expressly provided
in this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be brought in the United States District
Court for the Southern District of New York or any New York State court sitting
in New York City, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby shall be deemed to have arisen from a transaction
of business in the State of New York, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 11.04 shall be deemed effective service of process on such
party.
Section 11.07 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE ANCILLARY
AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 11.08 EXHIBITS AND DISCLOSURE LETTERS. Any matter,
information or item disclosed in the RTMMC Disclosure Letter 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 RTMMC Disclosure Letter shall not be deemed to constitute an
admission of any Liability by RTMMC or the Members or any other Person to any
third party or otherwise imply, that any such matter, information
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or item is material or creates a measure for materiality for the purposes of
this Agreement. Nothing in the RTMMC Disclosure Letter is intended or shall be
deemed to broaden the scope of any representation or warranty contained in this
Agreement.
Section 11.09 NO THIRD-PARTY BENEFICIARIES. Except as provided in
Article VII and Article X, this Agreement is not intended to confer any rights
or remedies upon any Person other than the parties to this Agreement.
Section 11.10 SEVERABILITY. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted for that provision in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of the invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of that provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of that provision, or the application of that provision, in any other
jurisdiction.
Section 11.11 RULES OF CONSTRUCTION. The parties to this Agreement
have been represented by counsel during the negotiation and execution of this
Agreement and waive the application of any Laws or rule of construction
providing that ambiguities in any agreement or other document shall be construed
against the party drafting such agreement or other document.
Section 11.12 ASSIGNMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement without
the consent of each other party hereto, except as otherwise expressly provided
herein. Notwithstanding the foregoing, nothing herein will require that RTMMC
maintain its existence for any period of time after the Closing.
Section 11.13 REMEDIES. Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement shall be cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity. The exercise by a party to
this Agreement of any one remedy shall not preclude the exercise by it of any
other remedy.
Section 11.14 SPECIFIC PERFORMANCE. The parties to this Agreement
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties to this Agreement shall be entitled to an injunction or injunctions
(without the payment or posting of any bond) to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
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Agreement in any court of the United States or any state having jurisdiction,
this being in addition to any other remedy to which they are entitled at law or
in equity.
Section 11.15 COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other party hereto.
Section 11.16 ENTIRE AGREEMENT. This Agreement (including the
Annexes to this Agreement), the RTMMC Disclosure Letter, the Triarc 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 11.17 RTM REPRESENTATIVES.
(a) Effective as of the date hereof, RTMMC and each Member, by
their execution and delivery of this Agreement, hereby irrevocably constitutes
and appoints 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 RTMMC and the Members 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 RTMMC and the Members in their
capacities as Members; 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 RTMMC and each Member which the RTM
Representatives deem necessary or reasonably required to accomplish the purposes
of the foregoing. The appointment set forth in this Section 11.17 shall be
coupled with an interest.
(b) Without limiting the generality of the foregoing, the RTM
Representatives, acting by a majority, shall have the right and power to do or
cause to be done any of the following things on behalf of each of the Members
and all of them collectively:
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(i) act as the sole representatives of RTMMC and the
Members and exercise all rights of RTMMC and the Members under this Agreement or
the Ancillary Agreements, including the prosecution, defense and settlement of
all claims and actions under, and to resolve all matters relating to,
indemnification hereunder or under any related agreement;
(ii) (A) authorize delivery to any Triarc Indemnified
Party of all or a portion of the RTM Escrow Fund in accordance with the Escrow
Agreement, (B) receive any payments made to RTMMC and the Members or to the RTM
Representatives on RTMMC's and the Members' 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 RTMMC and the Members 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
RTMMC and the Members as fully as RTMMC and each Member could if then personally
present and acting. The RTM Representatives, acting by a majority, are hereby
empowered to determine, in accordance with the terms of this Agreement or the
Ancillary Agreements, the time or times when, the purposes for which, and the
manner in which, the power herein conferred upon the RTM Representatives shall
be exercised.
(c) Triarc, ARG, Acquisition Sub 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 RTMMC and the Members.
The actions, decisions and instructions of the RTM Representatives taken, made
or given pursuant to the authority granted to the RTM Representatives pursuant
to this Section 11.17 shall be conclusive and binding upon RTMMC and each Member
and RTMMC and each Member'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 RTMMC and
each Member 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 RTMMC or any of the
Members, to take all actions required or permitted to be taken by the RTM
Representatives, RTMMC, the Members or any of them under this Agreement or any
Ancillary Agreement.
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(e) The RTM Representatives may execute any of their duties under
this Agreement or any Ancillary Agreement by or through agents and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
the RTM Representatives' duties, as the case may be, hereunder and thereunder.
The RTM Representatives shall be entitled to rely on any notice, consent,
certificate, affidavit, letter, telegram, statement or other document believed
by the RTM Representatives to be genuine and correct and to have been signed and
sent by the proper person or persons and, in respect to legal matters, upon the
opinion of counsel selected by the RTM Representatives. The RTM Representative
may invest the Expenses Fund and other funds advances 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
Date.
(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 RTMMC and
the Members 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
RTMMC and the RTMRG Principal Shareholders shall be responsible for such
out-of-pocket expenses pro rata in proportion to the percentage of the total
number of shares of RTMRG Common Stock held by the RTMRG Principal Shareholders
immediately prior to the Closing.
(g) Actions by the RTM Representatives will be effective only if
taken by a majority of the RTM Representatives. In carrying out their duties and
responsibilities in their capacity as RTM Representatives under this Agreement
or the Ancillary Agreements, neither the RTM Representatives nor any of their
agents shall be liable to RTMMC or any Member 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 Members, by a majority vote based on their respective pro rata interests
in the Aggregate Per Share Merger Consideration, shall promptly appoint a
successor representative and shall
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promptly notify Triarc of such successor. The authorizations of the RTM
Representatives will be effective until their rights and obligations under this
Agreement and the Ancillary Agreements terminate by virtue of the termination of
any and all obligations of RTMMC and the Members to Triarc or Acquisition Sub
under this Agreement and the Ancillary Agreements.
[Remainder of page intentionally left blank]
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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 RESTAURANT GROUP, INC.
By: /s/ Peter W. May
-------------------------------
Name: Peter W. May
Title: Executive Vice President
RTMMC ACQUISITION, LLC
By: /s/ Brian L. Schorr
-------------------------------
Name: Brian L. Schorr
Title: Executive Vice President
RTM MANAGEMENT COMPANY, L.L.C.
By: RTM ENTERPRISES, INC.,
its Manager
By: /s/ Dennis E. Cooper
-------------------------------
Name: Dennis E. Cooper
Title: Chairman
By: /s/ J. Russell Welch
-------------------------------
Name: J. Russell Welch
Title: Assistant Secretary
MEMBERS:
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/s/ Sharron L. Barton
-----------------------------------
SHARRON L. BARTON
/s/ Susan A. Bauer
-----------------------------------
SUSAN A. BAUER
/s/ Ray Biondi
-----------------------------------
RAY BIONDI
/s/ Daniel T. Collins
-----------------------------------
DANIEL T. COLLINS
/s/ Dennis E. Cooper
-----------------------------------
DENNIS E. COOPER
/s/ Thomas A. Garrett
-----------------------------------
THOMAS A. GARRETT
/s/ Joseph Gondolfo
-----------------------------------
JOSEPH GONDOLFO
/s/ John L. Gray, Jr.
-----------------------------------
JOHN L. GRAY, JR.
/s/ Gregory L. Hawkins
-----------------------------------
GREGORY L. HAWKINS
/s/ Wendy E. Henderson
-----------------------------------
WENDY E. HENDERSON
/s/ Jeryl M. Mcintyre
-----------------------------------
JERYL M. MCINTYRE
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/s/ Deborah K. Pike
-----------------------------------
DEBORAH K. PIKE
/s/ Karen G. Samples
-----------------------------------
KAREN G. SAMPLES
/s/ Robert S. Stallings
-----------------------------------
ROBERT S. STALLINGS
/s/ John A. Todd, Jr.
-----------------------------------
JOHN A. TODD, JR.
/s/ Russell V. Umphenour, Jr.
-----------------------------------
RUSSELL V. UMPHENOUR, JR.
/s/ J. Russell Welch
-----------------------------------
J. RUSSELL WELCH
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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