SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 1996
TRIARC COMPANIES, INC.
(Exact name of registrant as specified in charter)
STATE OF DELAWARE 1-2207 38-0471180
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
900 THIRD AVENUE, NEW YORK, NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 230-3000
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
Item 7. FINANCIAL STATEMENTS PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits:
Exhibit Number
(Referenced to Item
601 of Regulation S-K) Description of Exhibit
- ---------------------- ----------------------
2 Asset Purchase Agreement dated as of March 31, 1996
by and among the Registrant, Avondale Mills, Inc.,
Avondale Incorporated and Graniteville Company.
99.1 Registrant's press release, dated April 1, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: April 18, 1996
TRIARC COMPANIES, INC.
By: /S/ BRIAN L. SCHORR
--------------------------
Brian L. Schorr
Executive Vice President
and General Counsel
<PAGE>
EXHIBIT INDEX
Page Number in
Rule 0-3(b)
sequential
Exhibit number numbering system
(Referenced to Item where Exhibit
601 of Regulation S-K) Description of Exhibit can be found
- ---------------------- ---------------------- ----------------
2 Asset Purchase Agreement dated as of March 5
31, 1996 by and among the Registrant,
Avondale Mills, Inc., Avondale
Incorporated and Graniteville Company.
99.1 Registrant's press release, dated April 1,
1996.
ASSET PURCHASE AGREEMENT
by and among
AVONDALE MILLS, INC.,
AVONDALE INCORPORATED,
GRANITEVILLE COMPANY,
and
TRIARC COMPANIES, INC.
As of March 31, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE 1.
PURCHASE AND SALE
Section 1.1. Purchase and Sale..........................2
Section 1.2. Included Assets............................2
Section 1.3. Excluded Assets............................4
Section 1.4. Assumption of Assumed Liabilities..........6
Section 1.5. Excluded Liabilities.......................7
ARTICLE 2.
PURCHASE PRICE
Section 2.1. Purchase Price.............................9
Section 2.2. Payment of Purchase Price..................9
Section 2.3. Statement of Net Assets...................10
Section 2.4. Arbitration...............................12
Section 2.5. Post-Closing Adjustment...................13
Section 2.6. Interest..................................13
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1. Organization..............................13
Section 3.2. Authorization.............................14
Section 3.3. Absence of Restrictions and Conflicts.....15
Section 3.4. Capitalization of Seller; Subsidiaries....16
Section 3.5. Ownership of Assets and Related Matters...16
Section 3.6. Financial Statements......................21
Section 3.7. No Undisclosed Liabilities................23
Section 3.8. Absence of Certain Changes................24
Section 3.9. Legal Proceedings.........................25
Section 3.10. Compliance with Law.......................26
Section 3.11. Seller Contracts..........................27
Section 3.12. Tax Returns; Taxes........................28
Section 3.13. Officers, Directors and Employees.........28
Section 3.14. Seller Employee Benefit Plans.............29
Section 3.15. Labor Relations...........................33
Section 3.16. Insurance.................................34
Section 3.17. Environmental Matters.....................34
Section 3.18. Patents, Trademarks, Trade Names..........36
<PAGE>
Section 3.19. Transactions with Affiliates..............37
Section 3.20. Brokers, Finders and Investment Bankers...38
Section 3.21. Bank Accounts.............................39
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1. Organization..............................39
Section 4.2. Authorization.............................39
Section 4.3. Absence of Restrictions and Conflicts.....40
Section 4.4. Legal Proceedings.........................41
Section 4.5. Brokers, Finders and Investment Bankers...41
Section 4.6. Financing.................................42
ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS
Section 5.1. Conduct of Business by Seller.............42
Section 5.2. Inspection and Access to Information......47
Section 5.3. No Solicitation of Transactions...........47
Section 5.4. Reasonable Efforts; Further Assurances;
Cooperation...............................48
Section 5.5. Public Announcements......................51
Section 5.6. Supplements to Schedules..................52
Section 5.7. Offer of Employment.......................52
Section 5.8. Employee Benefit Plans....................52
Section 5.9. Conveyance Taxes..........................57
Section 5.10. Financial Statements......................58
Section 5.11. Seller Bank Accounts......................59
Section 5.12. Access to Books and Records...............59
Section 5.13. Nonsolicitation...........................60
Section 5.14. Insurance.................................60
Section 5.15. Purchase of Dyes and Chemicals............60
Section 5.16. Timber Contract...........................60
ARTICLE 6.
CONDITIONS
Section 6.1. Conditions to Each Party's Obligations....61
Section 6.2. Conditions to Obligations of Purchaser....62
Section 6.3. Conditions to Obligations of Seller.......64
<PAGE>
ARTICLE 7.
CLOSING
Section 7.1. Closing..................................65
Section 7.2. Items to be Delivered at Closing.........66
Section 7.3. Further Assurances.......................67
ARTICLE 8.
TERMINATION
Section 8.1. Termination...............................68
Section 8.2. Specific Performance and Other Remedies...69
Section 8.3. Effect of Termination.....................69
ARTICLE 9.
INDEMNIFICATION
Section 9.1. Indemnification Obligations of Seller.....70
Section 9.2. Indemnification Obligations of Purchaser..74
Section 9.3. Indemnification Procedure.................75
Section 9.4. Claims Period.............................78
Section 9.5. Liability Limits..........................79
Section 9.6. Compliance with Bulk Sales Laws...........80
Section 9.7. Investigations............................80
ARTICLE 10.
MISCELLANEOUS PROVISIONS
Section 10.1. Notices..................................81
Section 10.2. Schedules and Exhibits...................82
Section 10.3. Assignment; Successors in Interest.......82
Section 10.4. Number; Gender...........................82
Section 10.5. Captions.................................83
Section 10.6. Controlling Law; Integration; Amendment..83
Section 10.7. Severability.............................83
Section 10.8. Counterparts.............................84
Section 10.9. Enforcement of Certain Rights............84
Section 10.10. Waiver...................................84
Section 10.11. Valuation for Tax Reporting Purposes.....84
Section 10.12. Fees and Expenses........................85
Section 10.13. Guarantee................................86
Section 10.14. Cooperation on Taxes.....................87
Section 10.15. Knowledge...............................89
<PAGE>
SCHEDULES
Schedule 1.3(b) - Excluded Real Property
Schedule 1.3(m) - List of other Excluded Assets
Schedule 1.4 - List of Assumed Liabilities
Schedule 3.1 - List of jurisdictions in which Seller is qualified
to do business
Schedule 3.3 - Other governmental and regulatory consents of
Seller
Schedule 3.4 - Ownership interests held by Seller
Schedule 3.5(a)(i) - List of Real Property and related matters
Schedule 3.5(a)(ii) - List of Liens on Real Property
Schedule 3.5(a)(iii)- List of exceptions to possession of Real Property
and improvements
Schedule 3.5(a)(iv)- List of structural defects of buildings on Real
Property
Schedule 3.5(a)(v) - List of real property sold, assigned, transferred
or otherwise disposed of by Seller after July 30,
1995
Schedule 3.5(b)(i) - Real Property Leases
Schedule 3.5(b)(ii) - List of Leased Property held by employees
Schedule 3.5(c)(i) - Detailed Fixed Asset Ledger of the Business
Schedule 3.5(c)(ii) - List of Personal Property held by employees
Schedule 3.5(d)(i) - Title exceptions to the Assets
Schedule 3.5(d)(ii) - List of defects in production equipment
Schedule 3.5(d)(iii)- Assets owned by third parties which are located on
premises of Seller
Schedule 3.5(g) - List of third party options
Schedule 3.6 - Excluded Assets reflected on financial statements
Schedule 3.7 - List of certain liabilities and obligations of
Seller involving or affecting the Business or the
Assets
Schedule 3.8(b) - List of certain changes since December 31, 1995
Schedule 3.9 - List of legal proceedings
Schedule 3.10(i) - List of all Licenses
Schedule 3.10(ii) - List of OSHA violations since 1/1/93
Schedule 3.11(i) - List of certain Seller Contracts
Schedule 3.11(ii) - List of Defaults
Schedule 3.12 - List of claims for taxes
Schedule 3.13 - List of (i) officers of Seller and their annual
compensation, (ii) all salaried employees of
Seller, (iii) the approximate number of current
hourly employees, and (iv) all former employees
entitled to post-retirement benefits or any other
compensation
Schedule 3.14 - Seller Benefit Plans
Schedule 3.15 - List of certain labor relations matters
Schedule 3.16 - List of Seller's insurance policies and coverages
relating to the Assets and/or the Business
Schedule 3.17 - List of certain environmental matters
<PAGE>
Schedule 3.17(f) - List of environmental fines, penalties and
assessments
Schedule 3.18 - List of (i) all Intellectual Property, (ii)
agreements relating to Intellectual Property and
(iii) all jurisdictions in which Seller is
operating the Business under a tradename and
jurisdictions in which any such tradenames are
registered
Schedule 3.19 - List of transactions with Affiliates
Schedule 3.21 - List of Bank Accounts
Schedule 4.3 - Other governmental and regulatory consents of
Purchaser
Schedule 6.2(e) - List of Purchaser's debt and equity investors
Schedule 6.2(f) - Consents required to be delivered at Closing
Schedule 9.1(i) - Indemnification for certain contracts
<PAGE>
EXHIBITS
Exhibit AA July 30 Balance Sheet
Exhibit A Form of Statement of Net Assets
Exhibit B Legal Opinion of The McNair Law Firm, P.A.
Exhibit C Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
Exhibit D Supply Agreement
Exhibit E Legal Opinion of King & Spalding
Exhibit F Legal Opinion of Wyche, Burgess, Freeman & Parham
Exhibit G Form of Assumption Agreement
Exhibit H IRS Records Retention Agreement
<PAGE>
DEFINED TERMS
The following is a list of the defined terms used in this Agreement:
DEFINED TERMS SECTION
Acquisition Recitals
actual knowledge 10.15
Affiliate 3.19
Agreement Recitals
Arbitrator 2.4
Assets 1.1
Assumed Liabilities 1.4
Assumption Time 5.8(a)(ii)
Avondale Recitals
Bank Accounts 3.21
Business Recitals
Business Year-End Financial Statements 3.6
Cash 1.3(a)
CERCLA 3.17(b)
CIT 1.5(a)
CIT Agreement 1.5(a)
Claims Period 9.4
Closing 7.1
Closing Date 7.1
Code 3.14(h)
Commercially Reasonable Costs 9.1
Competing Transaction 5.3
control 3.19
Cutoff Time 1.3(a)
Deficit Amount 2.5
Delivery Date 2.3
Disputed Items 2.3
D&T 2.3(d)
Employment Contracts 3.14(c)
environment 3.17(e)
Environmental Laws 3.17(a)
Enterprise Mill 1.3(b)
ERISA 3.14(o)
ERISA Affiliate 3.14(o)
Excluded Agreements 1.3(e)
Excluded Assets 1.3
Excluded Liabilities 1.5
Excluded Real Property 1.3(b)
<PAGE>
Excluded Subsidiaries 1.3(c)
E&Y 2.3(b)
Factoring Agreement 1.5(a)
February 1996 Balance Sheet 3.6
FIFO 2.3(c)
Financial Statements 3.6
First Union Agreement 1.5(a)
FMLA 3.14(n)
GICs 5,8(a)(i)
hazardous materials 3.17
HSR Act 3.3
Illiquid GICs 5.8(a)(i)
Indemnified Party 9.3(a)
Indemnifying Party 9.3(a)
Interim Financial Statements 3.6
Intellectual Property 3.18
January 1996 Balance Sheet 3.6
January 1996 Income Statement 3.6
July 30 Balance Sheet 2.3(a)
knowledge 10.15
knows 10.15
Licensed Intellectual Property 3.18
Licenses 3.10
Liens 3.5(a)
LIFO 2.3(c)
Losses 9.1
Master Trust 5.8(a)(i)
Material Adverse Effect 3.1
Net Assets 2.3(a)
NLRB 3.15
Notice of Dispute 2.3
NPC Contract 1.3(e)
Order 5.4(b)
OSHA 3.10
Patrick Recitals
Permitted Liens 3.5(a)
Person 3.19
Personal Property Leases 3.5(b)
Personal Property Lists 3.5(c)
Proprietary Intellectual Property 3.18
Purchase Price 2.1
Purchaser Recitals
Purchaser Ancillary Documents 4.2
Purchaser Indemnified Parties 9.1
<PAGE>
Purchaser Losses 9.1
Real Property 1.2(g)
Real Property Leases 1.2(e)
release 3.17(e)
Review Period 2.3
Seller Recitals
Seller Ancillary Documents 3.2
Seller Benefit Plans 3.14(a)
Seller Basket Amount 9.5(a)
Seller Cap Amount 9.5(b)
Seller Contracts 3.11
Seller Indemnified Parties 9.2
Seller Losses 9.2
Seller Savings Plan 5.8(a)(i)
Seller Surviving Obligations 9.4(a)
Seller Surviving Representations 9.4(a)
Seller Year-End Financial Statements 3.6
Statement of Net Assets 2.3
Termination Date 8.1
Title IV Plan 3.14(b)
Triarc Recitals
Wachovia Agreement 1.5(a)
WARN 3.15
Williston Facility 1.3(b)
Work Papers 3.6
Year-End Financial Statements 3.6
<PAGE>
EXCEPT TO THE EXTENT THAT THE UNITED STATES ARBITRATION ACT APPLIES,
SECTION 2.4 OF THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO CHAPTER
48 OF TITLE 15 OF THE CODE OF LAWS OF SOUTH CAROLINA.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of March 31, 1996 (the
"Agreement"), is made and entered into by and among AVONDALE MILLS, INC.,
an Alabama corporation ("Purchaser"), AVONDALE INCORPORATED, a Georgia
corporation ("Avondale"), GRANITEVILLE COMPANY, a South Carolina
corporation ("Seller"), and TRIARC COMPANIES, INC., a Delaware corporation
("Triarc").
W I T N E S S E T H:
WHEREAS, Seller, an indirect wholly owned subsidiary of Triarc,
manufactures, dyes, finishes and sells cotton, synthetic and blended
(cotton and polyester) apparel fabrics for utility wear, including uniforms
and other occupational apparel, piece-dyed fabrics for sportswear, casual
wear and outerwear, indigo-dyed fabrics for jeans, sportswear and
outerwear, and speciality fabrics for recreational, industrial and military
end-uses, and dyes customer owned finished garments (the "Business"), which
business does not include C.H. Patrick & Co., Inc., a South Carolina
corporation ("Patrick"); and
WHEREAS, Seller and Purchaser desire to enter into this Agreement
pursuant to which Seller proposes to sell to Purchaser, and Purchaser
proposes to purchase from Seller, substantially all of the assets and
properties of Seller used or held for use in the Business, and Purchaser
proposes to assume substantially all of the liabilities and obligations of
Seller relating to the Business (the "Acquisition"), in each case, on such
conditions and subject to the terms set forth herein; and
<PAGE> Page 2
WHEREAS, Triarc agrees to guarantee certain obligations of Seller
hereunder, and Avondale agrees to guarantee certain obligations of
Purchaser hereunder, in each case on such conditions and subject to the
terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements set forth herein, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
PURCHASE AND SALE
Section 1.1. PURCHASE AND SALE. Subject to the terms and conditions
of this Agreement, at the Closing (as hereinafter defined) and except as
otherwise specifically provided in this Article 1, Seller shall grant,
sell, assign, transfer and deliver to Purchaser, and Purchaser will
purchase and acquire from Seller, all right, title and interest of Seller
in and to all of the assets, properties and rights of Seller as of the
Closing Date (as hereinafter defined) constituting the Business as a going
concern or used or held for use therein, of every kind and description,
real, personal and mixed, tangible and intangible, wherever situated (which
Business, assets, properties and rights are hereinafter collectively
referred to as the "Assets").
Section 1.2. INCLUDED ASSETS. Except as otherwise expressly set
forth in Section 1.3 hereof, the Assets shall include, without limitation,
the following assets, properties and rights of Seller as of the Closing
Date:
(a) all accounts receivable, prepaid expenses and credits;
(b) all notes receivable, security deposits, other deposits and
advances;
<PAGE> Page 3
(c) all inventories, including finished products, work-in-
process, raw materials, spare parts, stores and supplies, office
supplies and other inventory items;
(d) all machinery, equipment, business machines, computer
hardware, vehicles, furniture, fixtures, tools, dies, molds, parts,
leasehold and building improvements and other tangible property;
(e) all right, title and interest of Seller in all leases
pursuant to which Seller leases real property (the "Real Property
Leases") to the extent that the transfer of such right, title and
interest is permitted under the terms thereof or a consent or waiver
has been obtained;
(f) all right, title and interest of Seller in all contracts
(written or oral), agreements or other instruments relating to the
Business including, without limitation, all purchase orders for
cotton, polyester, yarn, greige fabric and other raw materials,
machinery, equipment, inventory, supplies and other items, contracts
with customers and suppliers and all leases of personal property to
the extent that the transfer of such right, title and interest is
permitted under the terms thereof or a consent or waiver has been
obtained;
(g) (i) all real property, including the buildings, structures,
fixtures and improvements located thereon, (ii) all licenses, permits,
approvals, qualifications, easements and other rights relating
thereto, to the extent that the transfer is permitted under the terms
thereof or a consent or waiver has been obtained (other than the
Excluded Real Property), and (iii) all easements and similar rights of
Seller that are utilized in or necessary to the Business with respect
to the Excluded Real Property or other real property (collectively,
the "Real Property");
<PAGE> Page 4
(h) all goodwill, patents, copyrights, know-how, software,
technical documentation, trade secrets, registered trademarks and
trade names (including "Graniteville") (and all rights thereto and
applications therefor);
(i) all rights to causes of action, lawsuits, judgments, claims
and demands of any nature available to or being pursued by Seller with
respect to the Business or the ownership, use, function or value of
any Asset, whether arising by way of counterclaim or otherwise;
(j) all guarantees, warranties, indemnities and similar rights
in favor of Seller or Triarc, and all proceeds under insurance
policies, each with respect to any Asset or the Business;
(k) all governmental permits, licenses or similar rights
relating to the Business;
(l) all other tangible and intangible assets of any kind or
description, wherever located, which are owned by Seller; and
(m) all information, files, correspondence, records, data,
plans, contracts and recorded knowledge, including customer and
supplier lists and all accounting books and records, relating to the
Business.
Section 1.3. EXCLUDED ASSETS. Notwithstanding anything to the
contrary set forth herein, the Business and the Assets shall not include
the following assets, properties and rights of Seller as of the Closing
Date (collectively, the "Excluded Assets"):
(a) all cash, commercial paper, certificates of deposit (other
than any certificate of deposit that has been posted as a security
deposit) and other bank deposits, all other cash equivalents and
marketable securities (collectively, "Cash"), in each case at or prior
to 8:00 a.m. (Atlanta time) on the Closing Date (the "Cutoff Time");
<PAGE> Page 5
(b) all property, whether real or personal, tangible or
intangible, including the buildings, structures, fixtures and
improvements located thereon and all licenses, permits, approvals,
qualifications, easements and other rights relating thereto, (i)
referred to as the "Enterprise Mill" located in Augusta, Georgia, (ii)
referred to as the "Williston Facility" located in Williston, South
Carolina, (iii) referred to as "Tract 0-2" located in Graniteville,
South Carolina, and (iv) specifically set forth on SCHEDULE 1.3(b)
which comprises certain non-textile related property owned by Seller
(collectively with any proceeds from the sale of such property prior
to the Closing Date, the "Excluded Real Property");
(c) all of the outstanding capital stock of Graniteville
Holdings, Inc., a Delaware corporation, Chesapeake Insurance Company
Limited, a Bermuda corporation, G.M.W. Industries, Inc., a Delaware
corporation, Graniteville International Sales, Inc., a South Carolina
corporation, Patrick and any subsidiary of Seller formed to hold
and/or own any or all of the Excluded Assets, and all of the assets,
properties and rights owned by each such entity together with all
liabilities and obligations of any nature whatsoever of each such
entity (such corporations are referred to collectively as the
"Excluded Subsidiaries");
(d) all accounts receivable and/or notes receivable owed to
Seller from Triarc, including accrued interest;
(e) all intercompany agreements (collectively, the "Excluded
Agreements") relating to Patrick or Triarc or any of their respective
Affiliates, other than (i) agreements between Patrick and Seller
relating to the purchase and sale of dyes and chemicals in the
ordinary course of business and (ii) that certain Lease, dated January
8, 1996, between Seller and National Propane Corporation (the "NPC
Contract");
<PAGE> Page 6
(f) any governmental permit, license or similar right that by
its terms is not transferable to Purchaser;
(g) all rights to contribution (or similar rights) in respect of
any claim as to which Seller is obligated to indemnify Purchaser
pursuant to Section 9 hereof and all rights to causes of action,
lawsuits, judgments, claims and demands of any nature to the extent
related to the Excluded Assets and the Excluded Liabilities;
(h) the corporate seal, articles of incorporation, minute books,
stock books, tax returns and other constituent records relating to the
corporate organization of Seller, and all books and records relating
exclusively to the Excluded Assets and the Excluded Liabilities;
(i) all rights of Seller under this Agreement and the Seller
Ancillary Documents;
(j) all rights to any federal, state, local or foreign income
tax refunds, offsets or credits, including interest and abatement of
penalties, and including the rights under any tax sharing agreement;
(k) all rights to refunds or similar payments including, without
limitation, any federal, state or local income tax refunds and any
refunds with respect to payment of rent relating to that certain
Sublease, dated July 31, 1973, between Monsanto Company and
Graniteville McCampbell Sales Division of Seller and any related
rights, including the right to make demands and claims and bring
lawsuits;
(l) security deposits held by Triarc; and
(m) the other assets, properties or rights set forth on SCHEDULE
1.3(m) hereto.
Section 1.4. ASSUMPTION OF ASSUMED LIABILITIES. Subject to the terms
and conditions of this Agreement, at the Closing and except as otherwise
specifically provided in Section 1.5 hereof,
<PAGE> Page 7
Purchaser shall assume and agree to pay, discharge or perform, as
appropriate, all liabilities and obligations of Seller existing as of the
Closing Date, whether accrued or contingent, arising out of the
conduct of or relating to the Business and/or the Assets prior to the
Closing Date (collectively, the "Assumed Liabilities"), including,
without limitation, the Assumed Liabilities set forth on SCHEDULE 1.4.
Section 1.5. EXCLUDED LIABILITIES. Notwithstanding anything to the
contrary set forth herein, the Assumed Liabilities shall not include, and
in no event shall Purchaser assume, agree to pay, discharge or perform or
incur any liability or obligation under this Agreement or otherwise become
responsible in respect of, the following (collectively the "Excluded
Liabilities"):
(a) any indebtedness (including principal and accrued interest)
outstanding under any bank credit agreement or other agreement or
instrument for borrowed money or funded indebtedness to which Seller
or any of its Affiliates is a party (either as debtor or guarantor)
including, without limitation, under (i) the Revolving Credit Term
Loan and Security Agreement dated as of April 23, 1993, as amended,
among Seller, Patrick, the financial institutions party thereto and
The CIT Group/ Commercial Services, Inc., as agent ("CIT") (the "CIT
Agreement"), (ii) the Term Loan Agreement, dated as of June 23, 1995,
between Seller and Wachovia Bank of South Carolina, N.A. (the
"Wachovia Agreement"), (iii) the Amended and Restated Non-Notification
Factoring Agreement dated as of April 23, 1993, among Seller, Patrick
and CIT (the "Factoring Agreement") and (iv) the Term Loan Agreement
dated as of April 7, 1994, between Seller and First Union National
Bank of Georgia (the "First Union Agreement");
<PAGE> Page 8
(b) any liability or obligation of Seller that did not arise out
of the conduct of or relate to the Business and/or the Assets;
(c) any liability or obligation arising under or relating to any
of the Excluded Assets (including, without limitation, any liability
or obligation of or relating to any of the Excluded Subsidiaries or
any other Affiliate of Seller);
(d) any liability or obligation, including, without limitation,
any accounts payable (other than accounts payable owed to Patrick from
the sale of dyes and chemicals to Seller but excluding any interest,
late fees or penalties relating to such accounts payable), of Seller
to any Excluded Subsidiary or any other Affiliate of Seller including,
without limitation, any management fees owed to Triarc;
(e) any federal, state or local income tax and all penalties and
interest relating thereto, including, without limitation, any such
taxes which (i) are payable by Seller, Triarc or any member of any
affiliated group of which Seller is a member, (ii) are imposed upon
Seller, Triarc or any member of any affiliated group of which Seller
is a member incident to or arising as a consequence of the negotiation
or consummation of this Agreement and the transactions contemplated
hereby or (iii) are related to any Seller Benefit Plan;
(f) any liability or obligation of Seller relating to or arising
from any fraudulent act of Seller or any intentional and knowing
material violation of or material noncompliance with any material law,
statute, rule or regulation of any country, state, municipality, or
any subdivision thereof, applicable to the Business;
(g) any liability or obligation of Seller arising out of or
incurred in connection with the operation and administration of any
employee benefit plan or program sponsored
<PAGE> Page 9
by Seller or an ERISA
Affiliate or to which Seller or an ERISA Affiliate is or was obligated
to make contributions (other than claims for benefits by employees and
former employees of the Business under the Seller Benefit Plans),
including, without limitation, the Triarc Companies, Inc. Healthcare
Plan, the Triarc Companies, Inc. Life Insurance Plan, the Triarc
Companies, Inc. Long-Term Disability Plan and the Triarc Companies,
Inc. Business Travel Accident Plan, any multiemployer plan or any
other plan subject to Title IV of ERISA;
(h) any liability or obligation of Seller arising or incurred in
connection with the negotiation, preparation and execution of this
Agreement and the transactions contemplated hereby and any fees and
expenses of counsel, accountants, brokers, financial advisors or other
experts of Seller or any of its Affiliates, except as otherwise
provided for herein; or
(i) any liability or obligation arising under or incurred in
connection with any of the Excluded Agreements.
ARTICLE 2.
PURCHASE PRICE
Section 2.1. PURCHASE PRICE. Subject to the post-Closing adjustment
described in Section 2.5, the purchase price for the Assets will be an
amount equal to Two Hundred Fifty-Five Million Dollars ($255,000,000) (the
"Purchase Price").
Section 2.2. PAYMENT OF PURCHASE PRICE. The Purchase Price will be
paid as follows:
(a) Purchaser shall pay to Seller on the Closing Date the amount
of $255,000,000; and
<PAGE> Page 10
(b) if there is a Deficit Amount (as determined pursuant to
Section 2.5), Seller shall pay to Purchaser, on the date specified in
Section 2.5, an amount equal to the Deficit Amount plus interest as
calculated in accordance with Section 2.6.
Any amounts payable pursuant to clauses (a) or (b) above shall be paid
by wire transfer of immediately available federal funds to an account to be
designated in writing to the paying party by the receiving party at least
two business days prior to the date such payment is required to be made
pursuant to this Agreement. Any post-Closing payment pursuant to Section
2.5 or any indemnity payments to or from Seller or to or from Purchaser
(other than interest) shall be treated by Purchaser and Seller as purchase
price adjustments for all tax purposes.
Section 2.3. STATEMENT OF NET ASSETS. As promptly as practicable
after the Closing Date, but in any case not later than 90 days thereafter,
Purchaser shall cause to be prepared and delivered to Seller a statement of
the Net Assets (as hereinafter defined) (the "Statement of Net Assets") in
accordance with the following guidelines (the date on which such Statement
of Net Assets is delivered by Purchaser to Seller is referred to herein as
the "Delivery Date"):
(a) the Statement of Net Assets shall be in the form attached as
EXHIBIT A and shall set forth the net book values of the Assets and
Assumed Liabilities as of the Closing Date (the "Net Assets"), which
net book values shall be (i) derived from and in accordance with the
books and records of the Business, and (ii) determined in accordance
with generally accepted accounting principles applied on a basis
consistent with the principles used in the preparation of the balance
sheet of the Business as of July 30, 1995 (the "July 30 Balance
Sheet"), including, without limitation, with respect to the
establishment of reserves for uncollectible receivables, contingent
liabilities and other items;
<PAGE> Page 11
(b) the Statement of Net Assets shall have been audited by Ernst
& Young LLP ("E&Y") and shall be accompanied by their report thereon;
(c) all inventories reflected on the Statement of Net Assets
shall be valued at the lower of cost or market consistent with past
practice with cost determined under the last-in, first-out ("LIFO") or
the first-in, first-out ("FIFO") valuation method, as appropriate for
the particular inventory, consistent with past practice; and
(d) Seller and Deloitte & Touche LLP ("D&T") shall have the
right to observe all steps (including any physical inventory) taken by
Purchaser, in connection with the preparation of the Statement of Net
Assets and to review all work papers and procedures relating thereto
and shall have complete access to all books and records of the
Business during normal business hours relevant to the preparation of
the Statement of Net Assets.
The Statement of Net Assets shall be accompanied by a statement
reflecting the amount of Cash in the Bank Accounts as of the Cutoff Time.
Seller shall (and shall instruct its bank(s) to) make available to
Purchaser and E&Y such bank records as are necessary to permit such
determination by Purchaser and E&Y.
Upon receipt by Seller of the Statement of Net Assets, Seller and D&T
shall have 60 days after the Delivery Date to review the Statement of Net
Assets delivered by Purchaser pursuant to Section 2.3 (the "Review
Period"). If Seller disputes the Statement of Net Assets so delivered by
Purchaser, Seller shall, on or prior to the last day of the Review Period,
prepare and submit to Purchaser a notice of dispute (a "Notice of Dispute")
which shall set forth Seller's proposed Statement of Net Assets and shall
specifically enumerate the items and calculations objected to in the
Statement of Net Assets delivered by Purchaser (the "Disputed Items"). If
Seller fails to deliver
<PAGE> Page 12
a Notice of Dispute prior to the last day of the
Review Period, the Statement of Net Assets delivered by Purchaser to Seller
pursuant to Section 2.3 shall be the final Statement of Net Assets for
purposes of this Agreement. Upon receipt of a Notice of Dispute, Seller
and Purchaser will, for a period of 20 days following delivery of such
Notice of Dispute, seek in good faith to resolve all Disputed Items and
agree on a Statement of Net Assets.
Section 2.4. ARBITRATION. After receipt of a Notice of Dispute, if
Seller and Purchaser are unable to agree on a Statement of Net Assets
within the 20-day period referred to in the last sentence of Section 2.3,
D&T and E&Y shall jointly choose a nationally recognized firm of
independent public accountants as promptly as practicable (the
"Arbitrator"), and each of Seller and D&T, on the one hand, and Purchaser
and E&Y, on the other hand, shall, within 45 days after the date on which
the Notice of Dispute was delivered by Seller to Purchaser, prepare and
submit to the other and to the Arbitrator its respective proposed Statement
of Net Assets together with a statement of its position with respect to any
unresolved Disputed Items. The Arbitrator shall, after the submission of
such information by Purchaser and Seller, review such Disputed Items only
and submit its written decision to Seller and Purchaser within 45 days
after receipt of such information by Purchaser and Seller, and the
Statement of Net Assets as adjusted by the Arbitrator shall be the final
Statement of Net Assets for purposes of this Agreement. In connection with
such review, the Arbitrator shall have complete access to all books and
records of the Business relevant to preparation of the Statement of Net
Assets. Any determination by the Arbitrator with respect to any disputes
regarding the Statement of Net Assets shall be final and binding on Seller
and Purchaser. The costs of the Arbitrator shall be borne 50% by Seller
and 50% by Purchaser.
<PAGE> Page 13
Section 2.5. POST-CLOSING ADJUSTMENT. For purposes of this
Agreement, the "Deficit Amount" shall equal the excess (if any) of (a)
$242,000,000 over (b) the actual amount of Net Assets shown on the final
Statement of Net Assets. Within five days after the final and conclusive
determination of the Statement of Net Assets pursuant to Section 2.3 or
2.4, as the case may be, Seller shall pay to Purchaser the additional
payment required by Section 2.2(b).
Section 2.6. INTEREST. The Deficit Amount, if any, shall accrue
interest at the "Prime Rate" (as reported in the "Money Rates" table of THE
WALL STREET JOURNAL) from the Closing Date through and including the date
on which the Deficit Amount is paid. The "Prime Rate" shall be adjusted as
of the first day of each month based on the rate reported in THE WALL
STREET JOURNAL as of the first business day of such month.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 3.1. ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of South Carolina and
has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Seller
is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction where the character of its
activities requires such qualification other than in such jurisdictions
where the failure to so qualify would not, individually or in the
aggregate, be reasonably likely to have a material adverse effect on the
assets, liabilities, results of operations, financial condition or business
of the Business ("Material Adverse Effect"), and SCHEDULE 3.1 contains a
true and correct list of such jurisdictions. Seller has heretofore made
available to
<PAGE> Page 14
Purchaser true, correct and complete copies of its articles of
incorporation and bylaws as in effect as of the date of this Agreement and
has permitted Purchaser to review the minute books of Seller.
Section 3.2. AUTHORIZATION. Each of Seller and Triarc has the full
corporate power and authority to execute and deliver this Agreement and any
other certificate, agreement, document or other instrument to be executed
and delivered by it in connection with the transactions contemplated hereby
(collectively, the "Seller Ancillary Documents"), to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and each of the Seller Ancillary Documents by Seller or Triarc,
as applicable, the performance by Seller and Triarc of their respective
obligations hereunder and thereunder and the consummation of the
transactions provided for herein and therein have been duly and validly
authorized by all necessary corporate action on the part of Seller and
Triarc. The board of directors and sole stockholder of Seller and the
board of directors of Triarc have approved the execution, delivery and
performance of this Agreement and each of the Seller Ancillary Documents as
applicable and the consummation of the transactions contemplated hereby and
thereby. This Agreement has been, and each of the applicable Seller
Ancillary Documents will be as of the Closing Date, duly executed and
delivered by Seller and Triarc, as applicable, and do or will, as the case
may be, constitute the valid and binding agreements of each of Seller and
Triarc, enforceable against it in accordance with their respective terms,
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
<PAGE> Page 15
Section 3.3. ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution,
delivery and performance of this Agreement and the Seller Ancillary
Documents, the consummation of the transactions contemplated by this
Agreement and the Seller Ancillary Documents and the fulfillment of and
compliance with the terms and conditions of this Agreement and the Seller
Ancillary Documents do not or will not (as the case may be), with the
passing of time or the giving of notice or both, violate or conflict with,
constitute a breach of or default under or permit the acceleration of any
obligation under, (a) any term or provision of the articles of
incorporation or bylaws of Seller or Triarc, (b) any Seller Contract, Real
Property Lease or Personal Property Lease (all as hereinafter defined),
(c) any judgment, decree or order of any court or governmental authority or
agency to which Seller or Triarc is a party or by which Seller or Triarc or
any of their respective properties (other than Excluded Assets) are bound
or (d) any material statute, law, rule or regulation applicable to Seller,
Triarc or the Business. Except for compliance with the applicable
requirements of (i) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (ii) state bulk sales laws, (iii) filing
of UCC-3 termination statements and documents with respect to release of
mortgages and (iv) as set forth in SCHEDULE 3.3, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
governmental agency or public or regulatory unit, agency, body or authority
with respect to Seller or Triarc is required in connection with the
execution, delivery or performance of this Agreement or the Seller
Ancillary Documents by Seller or Triarc or the consummation of the
transactions contemplated by this Agreement or the Seller Ancillary
Documents by Seller or Triarc, the failure of which to obtain would
adversely affect the Business in any material respect or adversely affect
the valid and legal consummation by Triarc
<PAGE> Page 16
or Graniteville of the
transactions contemplated hereby or Triarc's or Graniteville's ability to
perform their respective obligations hereunder.
Section 3.4. CAPITALIZATION OF SELLER; SUBSIDIARIES. All issued and
outstanding shares of capital stock of Seller are beneficially owned,
indirectly through one or more wholly owned subsidiaries, by Triarc. Other
than the Excluded Subsidiaries and except as set forth in SCHEDULE 3.4,
Seller does not own, directly or indirectly, any capital stock or any other
equity securities of any corporation, firm, partnership, joint venture,
association or other entity. The Excluded Subsidiaries (i) as of the
Closing Date will not own or possess any assets that are utilized in or
necessary to the operation of the Business, other than the inventory of
dyes and chemicals owned by Patrick in connection with the normal business
relations between Patrick and Seller, and (ii) other than Patrick, are not
material to the Business either individually or in the aggregate. Since
July 30, 1995, no assets or properties have been transferred from Seller to
any of its Affiliates other than the Excluded Assets and any returns of
dyes and chemicals to Patrick in the ordinary course of business consistent
with past practice.
Section 3.5. OWNERSHIP OF ASSETS AND RELATED MATTERS.
(a) REAL PROPERTY. SCHEDULE 3.5(a)(i) sets forth a true,
correct and complete list of all of the Real Property. The legal
description of each parcel of Real Property attached to the deeds
conveying such Real Property on the Closing Date will be true, correct
and complete. The Real Property includes, without limitation, all
real property owned by Seller or its Affiliates that is used or held
for use in the Business. Except as set forth in SCHEDULE 3.5(a)(ii),
Seller has (and at the Closing will convey to Purchaser) good and
marketable title to the Real Property free and clear of all liens,
pledges, security interests, charges, claims,
<PAGE> Page 17
leasehold interests,
tenancies, restrictions, encumbrances, rights-of way, building use
restrictions, exceptions, variances, reservations or limitations of
any nature whatsoever (collectively, "Liens") other than (i) liens for
taxes, assessments or governmental charges or levies if the same shall
not at the time be delinquent; (ii) statutory liens of landlords and
Liens of carriers, workmen, warehousemen, mechanics, materialmen and
repairmen incurred in the ordinary course of business and not yet due
or delinquent; (iii) pledges or deposits to secure obligations under
workmen's compensation laws, unemployment insurance, or other social
security or retirement benefits or similar legislation; (iv) purchase
money liens upon or in any Assets (other than Real Property) acquired
or held by Seller in the ordinary course of business; (v) zoning,
building or other restrictions, variances, covenants, rights-of-way,
encumbrances, easements and minor irregularities in title, none of
which, individually or in the aggregate, (A) will interfere in any
material respect with the present use or the occupancy of any of the
Real Property, (B) have a material effect on the value or use of any
individual Real Property or (C) would impair in any material respect
the ability of Purchaser to sell any such Real Property for its
present use; and (vi) rights of setoff existing as a matter of law
(collectively, "Permitted Liens"). Except as set forth on SCHEDULE
3.5(a)(iii), Seller is in possession of all of the Real Property and
all buildings, structures, fixtures and improvements located thereon.
Except for the easements and other rights described on SCHEDULE
3.5(a)(ii), none of the Excluded Real Property is used in the
Business, and none of the Excluded Real Property (other than the
property referred to as the "Enterprise Mill" located in Augusta,
Georgia and the properties referred to as "Tract N/N-6" and "Tract O-
2"
<PAGE> Page 18
located in Graniteville, South Carolina) is contiguous (including
by virtue of being across a public right-of-way) to any of the Real
Property.
Seller has heretofore made available to Purchaser true, correct
and complete copies of all deeds, deeds of trust, certificates of
occupancy, title insurance policies, title reports, surveys and
similar documents (including all amendments thereof) in the possession
of Seller relating to the Real Property. Except as set forth in
SCHEDULE 3.5(a)(iv), to the knowledge of Seller, there are no
structural defects (excluding those arising from ordinary wear and
tear taking into account the age of such buildings) in the buildings
on the Real Property that are likely to (A) interfere in any material
respect with the present use or the occupancy of such buildings or
(B) require any capital expenditure to repair such defect in excess of
$100,000 with respect to any single defect or $500,000 with respect to
all such defects. To the knowledge of Seller, there are no
condemnation or appropriation proceedings pending or threatened
against any of the Real Property or the improvements thereon.
SCHEDULE 3.5(a)(v) sets forth a true, correct and complete list
of each parcel of real property with a fair market value of more than
$25,000 sold, assigned, transferred or otherwise disposed of by Seller
since July 30, 1995; provided that the aggregate fair market value of
the parcels excluded from such Schedule as a result of the $25,000
threshold does not exceed $200,000.
(b) LEASES. SCHEDULE 3.5(b)(i) sets forth a true, correct and
complete list or copy of the Real Property Leases and each lease and
agreement of Seller granting possession of or rights to personal
property with an annual payment in excess of $10,000 individually (the
<PAGE> Page 19
"Personal Property Leases"); provided that the aggregate annual
payments under all leases and agreements excluded from such Schedule
as a result of the $10,000 threshold do not exceed $200,000 in the
aggregate. Seller has heretofore delivered to Purchaser true, correct
and complete copies of all of the Real Property Leases and the
Personal Property Leases set forth on SCHEDULE 3.5(b)(i). All of the
Real Property Leases and the Personal Property Leases are valid and
enforceable in accordance with their respective terms with respect to
Seller and, to the knowledge of Seller, each other party thereto.
Seller has physical possession of all real property, equipment and
other assets which are covered by the Real Property Leases and
Personal Property Leases, except for such equipment and other assets
(including automobiles) which Seller has loaned or made available to
its employees for use in connection with their employment, a correct
and complete list of which is set forth on SCHEDULE 3.5(b)(ii).
(c) PERSONAL PROPERTY. Seller has previously delivered to
Purchaser certain lists (the "Personal Property Lists") detailing the
following assets of Seller (in each case other than the Excluded
Assets): (i) production equipment; (ii) computer equipment; and (iii)
automobiles and other registered motor vehicles. Each of the assets
listed on the Personal Property Lists is included in the Assets
(except for assets disposed of in the ordinary course of business
consistent with past practice since the date indicated on the
applicable Personal Property List), and each of the Personal Property
Lists is a substantially complete list of assets of Seller within the
respective categories of assets purported to be listed thereon. The
detailed fixed asset ledger of the Business at December 31, 1995
attached hereto as SCHEDULE 3.5(c)(i) is true, accurate and complete
in all material respects. Each asset listed
<PAGE> Page 20
on the Personal Property
List which Seller has loaned to its employees for use in connection
with their employment is set forth on SCHEDULE 3.5(c)(ii).
(d) ASSETS. All assets owned by Seller or its Affiliates that
are used or held for use in the Business are included in the Assets.
Except as set forth in SCHEDULE 3.5 (a)(ii) with respect to the Real
Property and SCHEDULE 3.5(d)(i) with respect to all other property,
Seller has (and will convey to Purchaser at the Closing) good and
marketable title to the Assets free and clear of all Liens other than
Permitted Liens, if applicable. Since December 31, 1995, Seller has
not transferred any assets from the Real Property to the Excluded Real
Property with a fair market value in excess of $25,000 in the
aggregate. Except as set forth on SCHEDULE 3.5(d)(ii), Seller has no
knowledge of any material defects (except for such defects resulting
from ordinary wear and tear taking into account the age of such
production equipment) which would prevent any production equipment
contained in the Assets from being usable in the regular and ordinary
course of the Business and in conformance in all material respects
with all applicable laws, ordinances, codes, rules and regulations
applicable thereto. Except as set forth on SCHEDULE 3.5(d)(iii), no
person other than Seller owns any equipment or other tangible assets
or properties situated on the premises of Seller which are necessary
to the operation of the Business, except for the leased items that are
subject to the Personal Property Leases.
(e) INVENTORIES. The inventories of Seller (i) are of such
quantities as have been maintained in the ordinary course of business
consistent with past practice, (ii) consist of items which are good
and merchantable based on customary trade practices (subject to
applicable reserves consistent with past practice), (iii) are of a
quality and quantity presently
<PAGE> Page 21
usable or saleable in the ordinary
course of business of the Business (subject to applicable reserves
consistent with past practice), (iv) are valued on the books and
records of the Business at the lower of cost or market with the cost
determined under the LIFO or FIFO (as applied consistent with past
practice) inventory valuation method consistent with past practice and
(v) are subject to reserves determined in accordance with generally
accepted accounting principles, consistently applied. No previously
sold inventory is subject to returns in excess of those historically
experienced by the Business in the ordinary course of business
consistent with past practice.
(f) ACCOUNTS RECEIVABLE. The accounts receivable of Seller
arose from bona fide transactions in the ordinary course of business
and have been executed on terms consistent with the past practice of
the Business. The valuation of the accounts receivable of Seller and
the corresponding reserves for uncollectibility have been recorded in
accordance with generally accepted accounting principles applied on a
consistent basis.
(g) NO THIRD PARTY OPTIONS. Except as set forth in SCHEDULE
3.5(g), there are no existing agreements granting any person the right
to acquire any of Seller's assets, properties or rights or any
interest therein (other than the Excluded Assets and other than sales
of assets in the ordinary course of business consistent with past
practice).
Section 3.6. FINANCIAL STATEMENTS. Seller has delivered to Purchaser
the following: (a) the audited balance sheets of Seller and its
consolidated subsidiaries as of January 2, 1994, January 1, 1995 and
December 31, 1995, (b) the audited statements of income, stockholders'
equity and cash flows of Seller and its consolidated subsidiaries for the
ten-month period ended January 2, 1994 and the years ended January 1, 1995
and December 31, 1995 (the financial statements referred to in
<PAGE> Page 22
clauses (a) and (b) being referred to herein collectively as the "Seller Year
- -End Financial Statements"), (c) the audited balance sheets of the Business
as of January 2, 1994, January 1, 1995 and December 31, 1995, (d) the audited
statements of income, stockholders' equity and cash flows of the Business
for the ten-month period ended January 2, 1994 and the years ended January
1, 1995 and December 31, 1995 (the financial statements referred to in
clauses (c) and (d) are referred to herein collectively as the "Business
Year-End Financial Statements" and, together with the Seller Year-End
Financial Statements, the "Year-End Financial Statements"), and (e) all
significant work papers relating to the preparation of the Business Year-
End Financial Statements showing the consolidating accounts and adjustments
made to the Seller Year-End Financial Statements to derive the Business
Year-End Financial Statements (the "Work Papers"). In addition, Seller has
delivered to Purchaser: (v) the July 30 Balance Sheet, (w) the unaudited
balance sheet of the Business at January 28, 1996 (the "January 1996
Balance Sheet"), (x) the unaudited balance sheet of the Business at
February 25, 1996 (the "February 1996 Balance Sheet"), (y) the unaudited
statements of income, stockholders' equity and cash flows of the Business
for the four production week period ended January 28, 1996 (the "January
1996 Income Statement"), and (z) the unaudited statements of income,
stockholders' equity and cash flows of the Business for the four production
week period ended February 25, 1996 (together with the July 30 Balance
Sheet, the January 1996 Balance Sheet, the February 1996 Balance Sheet and
the January 1996 Income Statement, the "Interim Financial Statements,"
together with the Year-End Financial Statements, the "Financial
Statements"). The Financial Statements have been prepared from, and are in
accordance with, the books and records of Seller, and such books and
records have been maintained on a basis consistent with the past practice
of Seller or the Business, as the case may be. Each of the balance sheets
included in the
<PAGE> Page 23
Financial Statements (including the related notes and
schedules) fairly presents in all material respects the financial position
of Seller or the Business, as the case may be, as of the date thereof, and
each of the statements of income, stockholders' equity and cash flows
included in the Financial Statements (including any related notes and
schedules) fairly presents in all material respects the results of
operations and changes in cash flows, as the case may be, of Seller or the
Business, as the case may be, for the periods set forth therein, in each
case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein (subject, in the case of the Interim Financial Statements, to the
lack of footnotes and normal year-end audit adjustments). The January 1996
Balance Sheet and the February 1996 Balance Sheet have been prepared on a
basis consistent with the principles used in the preparation of the July 30
Balance Sheet, including, without limitation, with respect to the
establishment of reserves for uncollectible receivables, contingent
liabilities and other items. The Business Year-End Financial Statements
and the Interim Financial Statements have been prepared on a basis
consistent with the principles used in the preparation of the Seller Year-
End Financial Statements. Except as set forth on SCHEDULE 3.6, none of the
July 30 Balance Sheet, the January 1996 Balance Sheet or the February 1996
Balance Sheet reflects as an asset any Excluded Assets with a book value in
excess of $100,000 in the aggregate.
Section 3.7. NO UNDISCLOSED LIABILITIES. Except as disclosed in
SCHEDULE 3.7, Seller does not have any liabilities or obligations,
contingent or otherwise, relating to, involving or affecting the Business
or the Assets which would be required in accordance with generally accepted
accounting principles to be reflected on the February 1996 Balance Sheet
that are not adequately reflected or
<PAGE> Page 24
provided for in the February 1996
Balance Sheet, except liabilities and obligations incurred since the date
of the February 1996 Balance Sheet in the ordinary course of business of
the Business.
Section 3.8. ABSENCE OF CERTAIN CHANGES.
(a) Since December 31, 1995, there has not been (i) any material
adverse change (or, to the knowledge of Seller, any event relating
specifically to Seller or the Business which could reasonably be expected
to result in a material adverse change) in the assets, liabilities,
business, financial condition or results of operations of the Business,
except as relates solely to the Excluded Assets and excluding general
industry, business or economic conditions, or (ii) any damage, destruction,
loss or casualty to property or assets of the Business, whether or not
covered by insurance, which property or assets are material to the
Business. Since December 31, 1995, Seller has (w) maintained such
quantities of supplies and inventory of the Business as have been
maintained in the ordinary course of business consistent with past
practice, (x) extended credit to customers, collected accounts receivable
and paid accounts payable and similar obligations in the ordinary course of
business consistent with past practice, (y) funded obligations with respect
to the Seller Benefit Plans on a timely basis in the ordinary course of
business consistent with past practice and (z) conducted the Business in
the ordinary course on a basis consistent with past practice and not
engaged in any new line of business or entered into any agreement,
transaction or activity or made any commitment with respect to the Business
except those in the ordinary course of business.
(b) Except as set forth in SCHEDULE 3.8(b), since December 31, 1995,
there have not been with respect to the Business (i) any liability or
obligation (absolute, accrued or contingent) incurred except in the
ordinary course of business, (ii) any guaranteed checks, notes or accounts
receivable which have been written off or reserved against as
uncollectible, except bad debt reserves
<PAGE> Page 25
established in the ordinary course
of business consistent with past practice, (iii) any write-down of the
value of any asset or investment on the books or records of the Business in
excess of $25,000 individually for any asset or investment or $100,000 in
the aggregate, except for depreciation and amortization taken in the
ordinary course of business consistent with past practice, (iv) any
cancellation of any debts or waiver of any claims or rights (excluding
credit memos issued in the ordinary course of business) except in
transactions in the ordinary course of business consistent with past
practice and which in any event are not in excess of $25,000 individually
or $100,000 in the aggregate (other than Excluded Liabilities), (v) any
sale, transfer or other disposition of any properties or assets (real,
personal or mixed, tangible or intangible), other than (A) Excluded Assets,
(B) finished goods inventory in the ordinary course of business consistent
with past practice or (C) other assets sold, transferred or otherwise
disposed of in the ordinary course of business consistent with past
practice and which do not exceed $100,000 in any single transaction with
respect to greige goods and $50,000 in any single transaction with respect
to other assets, (vi) any credit memos issued in excess of $25,000
individually or other than in the ordinary course of business consistent
with past practice, (vii) any capital expenditures or commitments in excess
of $50,000 individually or $250,000 in the aggregate, (viii) any increase
in the compensation of officers, directors or employees, whether now or
hereafter payable, other than increases in compensation of non-officer
employees made in the ordinary course of business consistent with past
practice, (ix) any increase of any reserves for contingent liabilities, or
(x) any agreements to do any of the foregoing.
Section 3.9. LEGAL PROCEEDINGS. Except as set forth in SCHEDULE 3.9,
there are no suits, actions, claims, proceedings or investigations pending
or, to the knowledge of Seller, threatened in writing against, relating to
or involving Seller, the Business or the Assets before any court,
arbitrator
<PAGE> Page 26
or administrative or governmental body, except for any suits,
actions, claims, proceedings or investigations relating solely to the
Excluded Assets or the Excluded Liabilities. None of such suits, actions,
claims, proceedings or investigations are reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect. Neither Seller nor
the Business is subject to any judgment, decree, injunction or order of any
court which, in either case, imposes any restriction on the Business or
requires the payment of more than $25,000 individually or $100,000 in the
aggregate. The Business is not subject to any governmental restriction
specific to Seller and its Affiliates which is reasonably likely (a) to
have a Material Adverse Effect or (b) to cause a material limitation on
Purchaser's ability to operate the Business after the Closing in the same
manner as heretofore conducted by Seller.
Section 3.10. COMPLIANCE WITH LAW. Seller has all material
authorizations, approvals, licenses, permits and orders of and from all
governmental and regulatory officers and bodies necessary to carry on the
Business as it is currently being conducted, to own or hold under lease the
properties and assets it owns or holds under lease and to perform all of
its obligations under the agreements to which it is a party (collectively,
the "Licenses"). Seller is in compliance in all material respects with all
applicable laws, regulations and administrative orders (including, without
limitation, laws relating to employment of labor or use or occupancy of
properties or any part thereof) of any country, state or municipality or of
any subdivision thereof to which the Business is subject. SCHEDULE 3.10(i)
sets forth a true, correct and complete list of all Licenses. Seller has
made available to Purchaser all reports and filings made or filed by Seller
pursuant to the Occupational Safety and Health Act and related to the
Business since January 1, 1993. Except as set forth in SCHEDULE 3.10(ii),
since January 1, 1993, Seller has not violated in any material respect
<PAGE> Page 27
or failed to comply in any material respect with, or been the subject of any
written allegation by the Occupational Safety and Health Administration
("OSHA") that it has violated or failed to comply with, the Occupational
Health and Safety Act.
Section 3.11. SELLER CONTRACTS. SCHEDULE 3.11(i) sets forth a true,
correct and complete list or a copy of each of the contracts, agreements,
commitments, arrangements, understandings, or other instruments (in each
case whether oral or written) (but with respect to items (i) through (iv),
not including purchase orders or sales orders) relating to the Business
(including every amendment, modification or supplement to the foregoing)
(i) which involves an annual payment to or by Seller in excess of $50,000,
(ii) which requires more than 90 days prior notice by Seller to terminate
without any liability to Seller, (iii) which limits or restricts Seller
from engaging in any business in any jurisdiction, (iv) which is material
to the Business, (v) which constitute a purchase order with over $50,000
remaining to be paid with respect to such order, or (vi) which constitute a
sales order with over $500,000 remaining to be paid with respect to such
order (which, together with the Seller Benefit Plans listed separately in
Schedule 3.14, but excluding the Real Property Leases and the Personal
Property Leases, are herein referred to as the "Seller Contracts"). True,
correct and complete copies of all written Seller Contracts listed on
SCHEDULE 3.11(i), the Real Property Leases, the Personal Property Leases
and all polyester, cotton, yarn and greige purchase contracts have been
delivered to Purchaser. The Seller Contracts, the Real Property Leases and
the Personal Property Leases are valid and enforceable in accordance with
their respective terms with respect to Seller and, to the knowledge of
Seller, each other party thereto, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is
<PAGE> Page 28
considered in a
procedure at law or in equity). Except as set forth on SCHEDULE 3.11(ii),
there is no existing default of Seller under any Seller Contract, Real
Property Lease or Personal Property Lease or, to the knowledge of Seller,
of any of the other parties thereto (or events or conditions which with
notice or lapse of time or both would constitute a default), which default
will result in a total loss to Buyer (including reasonable attorneys' fees
and other out of pocket expenses, but excluding the original principal
amount owed not taking the default into account with respect to any
obligations for the payment of money that are past due as of the Closing
Date) of more than $10,000 individually for any single Seller Contract or
$60,000 in the aggregate for all Seller Contracts, Real Leases or Personal
Property Leases. Seller has delivered to Purchaser true, correct and
complete copies of the monthly financial packages provided to CIT since
December 31, 1995 under the terms of the CIT Agreement and the Factoring
Agreement.
Section 3.12. TAX RETURNS; TAXES. The aggregate liability for all
taxes (other than income taxes) reflected in the February 1996 Balance
Sheet is sufficient for the payment of all such unpaid taxes other than
income taxes (including any interest, penalties and additions to tax),
whether or not disputed, that are accrued or applicable for the period
ended February 25, 1996 and for all years and periods ended prior thereto.
Except as set forth on SCHEDULE 3.12, since January 1, 1991, no tax
deficiencies have been asserted against Seller as a result of any
examination by any taxing authority with respect to such taxes. Except as
set forth on SCHEDULE 3.12, there are no pending claims asserted for any
federal, state or local taxes of Seller (other than income taxes or any
interest, penalties or additions to tax). Seller has made all required tax
payments or deposits shown as due on returns as filed (other than with
respect to income taxes or any interest, penalties or additions to tax).
<PAGE> Page 29
Section 3.13. OFFICERS, DIRECTORS AND EMPLOYEES. SCHEDULE 3.13 contains
a true and complete list of (a) all of the officers of Seller specifying
their office and annual rate of compensation, (b) all salaried employees of
Seller (including a notation indicating which employees are plant
managers), (c) the approximate number of current hourly employees and (d)
all former employees entitled to post-retirement benefits or any other
compensation funded by Seller under each Seller Benefit Plan (other than
COBRA). Seller has (or will have as of the Closing Date) paid any bonuses
earned by any employee of the Business in respect of any period ending on
or prior to December 31, 1995 and has properly accrued on its books and
records any bonuses earned by any employee of the Business (whether or not
yet due and payable) in respect of any portion of 1996 ending on or prior
to the Closing Date.
Section 3.14. SELLER EMPLOYEE BENEFIT PLANS. Except as disclosed in
SCHEDULE 3.14:
(a) there are not any existing or former plans, programs,
policies or arrangements providing compensation or benefits of any
kind or description whatsoever (whether current or deferred and
whether paid in cash or in kind) to, or on behalf of, any current or
former employee or director of Seller or any of their dependents under
which Seller has any existing or continuing liability or obligation to
any such employee or director of Seller, including, but not limited
to, any such plan, program, practice, policy or arrangement subject to
ERISA but excluding any such plan, program, practice, policy or
arrangement relating solely to an Excluded Subsidiary (individually a
"Seller Benefit Plan" and collectively the "Seller Benefit Plans");
(b) Seller neither makes nor has any obligation to make, or has
made or had any obligation to make, either directly or indirectly (for
example, by reimbursing another
<PAGE> Page 30
employer), contributions to any plan,
program or arrangement, including a multiemployer plan, that is
subject to Title IV of ERISA ("Title IV Plan");
(c) Seller is not a party to and does not have any obligation
whatsoever under any contract or other arrangement under which Seller
has agreed to employ any person for any period (individually an
"Employment Contract" and collectively the "Employment Contracts");
(d) Seller has furnished to Purchaser: (i) a true, correct,
complete and current copy of (A) each written Seller Benefit Plan and
Employment Contract and any amendments thereto and (B) with respect to
each Seller Benefit Plan, all Internal Revenue Service, Department of
Labor or Pension Benefit Guaranty Corporation rulings or
determinations, annual reports, summary plan descriptions, actuarial
and other financial reports; (ii) a complete written description of
each unwritten Seller Benefit Plan and unwritten Employment Contract;
and (iii) such other documentation with respect to any Seller Benefit
Plan or Employment Contract as is reasonably requested by Purchaser;
(e) except with respect to the Graniteville Retirement Savings
Plan, the Graniteville Company Profit Sharing Plan for the Employees
of the McCampbell Sales Division, any terminated defined benefit plans
identified with respect to Section 3.14(b) above and the Graniteville
Company Long-Term Disability Trust, no assets have been set aside in a
trust or other separate account to pay directly or indirectly benefits
under any Seller Benefit Plan or Employment Contract. All assets of
the Graniteville Retirement Savings Plan are shown on the books and
records of the master trust at their current fair market value;
<PAGE> Page 31
(f) each Seller Benefit Plan, Employment Contract and each Title
IV Plan has been established, maintained and administered in
compliance in all material respects with all applicable laws and with
the terms of such plans as furnished to Buyer under Section 3.14(d)
above;
(g) Seller does not have an obligation to indemnify or hold
harmless any person or entity in connection with any liability
attributable to any acts or omissions by such person or entity with
respect to any Seller Benefit Plan or Employment Contract;
(h) Seller has not incurred (and no facts exist which are
reasonably likely to subject Seller to) any liability for any material
tax or penalty with respect to any Seller Benefit Plan, Employment
Contract, Title IV Plan or any group health plan (as described in
Section 5000 of the Internal Revenue Code of 1986, as amended (the
"Code")) of an ERISA Affiliate including, without limitation, any tax
or penalty under ERISA;
(i) neither Seller nor any ERISA Affiliate has (within the last
three years) terminated or withdrawn from or sought a funding waiver
for, and, to the knowledge of Seller, no facts exist which could
reasonably be expected to result in a termination or withdrawal from
or a request for a funding waiver for, any Title IV Plan;
(j) Seller has not incurred, and to the knowledge of Seller, no
facts exist which are reasonably likely to subject Seller to, any
liability as a result of a termination or withdrawal from or a funding
waiver for any Title IV Plan maintained by an ERISA Affiliate;
(k) there are no pending or threatened claims with respect to a
Seller Benefit Plan, Employment Contract or Title IV Plan (other than
routine claims made in the ordinary
<PAGE> Page 32
course of plan or contract
operations) or with respect to the terms and conditions of employment
or termination of employment of any employee or former employee of
Seller, which claims could reasonably be expected to result in any
material liability to Seller, and no audit or investigation by any
domestic or foreign governmental or other law enforcement agency is
pending or has been proposed with respect to any Seller Benefit Plan,
Employment Contract or Title IV Plan maintained by Seller or an ERISA
Affiliate;
(l) no written, or to the knowledge of Seller, oral
representations have been made by Seller to employees or former
employees of the Business (or their dependents or beneficiaries) to
the effect that coverage or benefits, including post-retirement
medical or life insurance coverage or benefits, under any Seller
Benefit Plan cannot be terminated, amended, reduced or otherwise
changed unilaterally by Seller or, after the Closing Date, by
Purchaser;
(m) the sale of the Business as contemplated by this Agreement
will not result in any additional payments to or increase the vested
interest of any current or former employee or director or their
dependents under any Seller Benefit Plan and, to the extent any such
payments or increase in vesting are required as a result of the
transactions contemplated by this Agreement, they will not result in
any "excess parachute payments" within the meaning of Section 280G of
the Code;
(n) Seller has provided Purchaser with a copy of Seller's policy
for providing leaves of absence under the Family and Medical Leave Act
("FMLA") and has identified (i) each employee who is eligible to
request FMLA leave; (ii) the amount of FMLA leave utilized by each
such employee during the current leave year; (iii) each employee who
is on
<PAGE> Page 33
FMLA leave at the Closing Date and his or her job title and
description, salary and benefits; (iv) each employee who has requested
FMLA leave to begin after the Closing Date and a description of the
leave requested; and (v) a copy of all notices provided to such
employee regarding that leave; and
(o) the Seller Savings Plan (as defined below) has at all times
satisfied the applicable qualification requirements under Section
401(a) of the Code and related Sections and regulations.
For purposes of this Section 3.14, (x) "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and
any regulations or published rulings promulgated or issued thereunder, and
(y) "ERISA Affiliate" shall mean any trade or business (whether
incorporated or unincorporated) which is a member of a group described in
Section 414(b), (c), (m) or (o) of Code, of which Seller is also a member.
Section 3.15. LABOR RELATIONS. Since January 1, 1993, except as set
forth in SCHEDULE 3.9 or SCHEDULE 3.15, (a) employees of Seller have not
been and are not represented by a labor organization which was either
National Labor Relations Board ("NLRB") certified or voluntarily recognized
or recognized under foreign law; (b) Seller has not been and is not a
signatory to a collective bargaining agreement with any labor organization;
(c) to the knowledge of Seller, no representation election petition has
been filed by employees of Seller or is pending with the NLRB and no union
organizing campaign involving employees of Seller has occurred or is in
progress; (d) to the knowledge of Seller, no NLRB unfair labor practice
claims have been filed and/or are presently pending against Seller or any
labor organization representing its employees; (e) to the knowledge of
Seller, no handbilling, picketing, work stoppage (sympathetic or
otherwise), or other
<PAGE> Page 34
"concerted action" involving the employees of Seller
has occurred or is in progress; (f) to the knowledge of Seller, no written
claim for unpaid wages or overtime or for child labor or recordkeeping
violations has been filed or is pending under the Fair Labor Standards Act,
Davis-Bacon Act, Walsh-Healey Act, or Service Contract Act or any other
Federal, state, local or foreign law, regulation, or ordinance, in each
case relating to the Business; (g) no citation has been issued by OSHA
against Seller and no notice of contest or OSHA administrative enforcement
proceeding involving Seller has been filed or is pending; (h) no citation
of Seller has occurred and no enforcement proceeding has been initiated or
is pending under Federal or foreign immigration law; and/or (i) except as
may result from Buyer's failure to rehire any current employees of Seller,
Seller has not taken any action that would constitute a "mass layoff" or
"plant closing" within the meaning of the Worker Adjustment and Retraining
Notification Act of 1988, as amended, or any similar state or local law
("WARN") or otherwise trigger notice requirements or liability under any
local or state plant closing notice law. Seller is in compliance in all
material respects with all federal, state and local laws respecting
employment and employment practices, terms and conditions of employment,
wages and hours.
Section 3.16. INSURANCE. SCHEDULE 3.16 sets forth a true, correct and
complete list of Seller's current insurance policies and coverages relating
to the Assets and/or the Business, including names of carriers, amounts of
coverage and premiums therefor. Seller has heretofore made available to
Purchaser true, correct and complete copies of all such insurance policies.
The Assets and the Business have been and are insured by financially sound
and reputable insurers in such amounts and against such risks as are
reasonable in relation to the Business, and Seller will maintain such
insurance at least through the Closing Date.
<PAGE> Page 35
Section 3.17. ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
3.17 or as to any matters relating solely to the Excluded Assets:
(a) Seller possesses, and is in compliance in all material
respects with, all material permits, licenses and government
authorizations and has filed all notices that are required for the
conduct of the Business under local, state, federal and foreign laws
and regulations relating to protection of the environment, pollution
control and hazardous materials (as defined below) as of the date
hereof ("Environmental Laws"), and Seller is in compliance in all
material respects with all other applicable limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables of Environmental Laws or contained in any
code, plan, order, decree, judgment, notice, permit or demand letter
issued, entered, promulgated or approved thereunder.
(b) To the knowledge of Seller, there are no facts or
circumstances which could form the basis for the assertion of any
material claim against Seller under any Environmental Laws including,
without limitation, the federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or any analogous local,
state or foreign law with respect to any on-site or off-site location.
(c) Since January 1, 1993, Seller has not entered into and is
not currently bound by any consent decree or order under, and is not
subject to any judgment, decree or judicial or administrative order
relating to compliance with, or the cleanup of regulated substances
under, any applicable Environmental Laws.
<PAGE> Page 36
(d) Seller has not been alleged in a writing delivered to Seller
to be in violation of, and has not been subject to any administrative
or judicial proceeding pursuant to, applicable Environmental Laws
either now or any time during the past five years.
(e) To the knowledge of Seller, Seller is not subject to any
material claim, obligation, liability, loss, damage or expense of
whatever kind or nature, contingent or otherwise, incurred or imposed
pursuant to or based upon any provision of any Environmental Law and
arising out of any act or omission of Seller, its employees, agents or
representatives or arising out of the ownership, use, control or
operation by Seller of any plant, facility, site, area or property
(including, without limitation, any plant, facility, site, area or
property currently or previously owned or leased by Seller included in
the Real Property or Real Property Leases) from which any substance
was released into the environment (the term "release" meaning any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the
environment, and the term "environment" meaning any surface or ground
water, drinking water supply, soil, surface or subsurface strata or
medium, or the ambient air).
(f) Seller has heretofore provided Purchaser with true, correct
and complete copies of or access to all files of Seller relating to
environmental matters and SCHEDULE 3.17(f) sets forth the amount of
all fines or penalties paid within the last five years by Seller with
respect to environmental matters, including the date of payment and
the basis for the assertions of liability.
As used in this Agreement, the term "hazardous materials" means any
waste, pollutant, hazardous substance, toxic, ignitable, reactive or
corrosive substance, hazardous waste, special
<PAGE> Page 37
waste, industrial substance,
by-product, process intermediate product or waste, petroleum or petroleum-
derived substance or waste, chemical liquids or solids, liquid or gaseous
products, or any constituent of any such substance or waste, the use,
handling or disposal of which by Seller is in any way governed by or
subject to any applicable law, rule or regulation of any governmental or
regulatory authority.
Section 3.18. PATENTS, TRADEMARKS, TRADE NAMES. SCHEDULE 3.18 sets
forth a true and complete list of: (a) all patents, registered trademarks
and trade names (including all federal, state and foreign registrations
pertaining thereto) and all copyright registrations owned by Seller and
used or held for use in, or otherwise relating to, the Business (together
with all software owned by Seller, collectively, the "Proprietary
Intellectual Property"); and (b) all patents, trademarks, trade names,
copyrights, software, technology and processes used by Seller in the
Business that are used pursuant to a license or other right granted by a
third party (collectively, the "Licensed Intellectual Property", and
together with the Proprietary Intellectual Property herein referred to as
"Intellectual Property"); provided that SCHEDULE 3.18 does not require the
listing of any "shrink wrap" software that Seller uses pursuant to the
standard form license of the software licensor. Seller owns, or has the
right to use pursuant to valid and effective agreements set forth in
SCHEDULE 3.18, all Intellectual Property material to the conduct of the
Business, and all such rights shall be assigned and transferred to
Purchaser in connection with the transactions contemplated hereby. No
written, or to the knowledge of Seller, oral claims are pending against or
have been delivered to Seller by any person with respect to the use of any
Intellectual Property or challenging or questioning the validity or
effectiveness of any license or agreement relating to the same, and the
current use by Seller of the Intellectual Property does not infringe in any
material respect on the rights of any third party. SCHEDULE 3.18 sets
<PAGE> Page 38
forth a list of all jurisdictions in which Seller is operating the Business
under a trade name, and each jurisdiction in which any such tradename is
registered.
Section 3.19. TRANSACTIONS WITH AFFILIATES. Except as set forth in
SCHEDULE 3.19, (i) no shareholder, officer or director of Seller or officer
or director of Triarc, (ii) to the knowledge of Seller or Triarc, any
person with whom any such shareholder, officer or director has any direct
or indirect relation by blood, marriage or adoption, or any entity in which
any such person owns any beneficial interest (other than a publicly held
corporation whose stock is traded on a national securities exchange or in
the over-the-counter market and less than 5% of the stock of which is
beneficially owned by all such persons), (iii) to the knowledge of Seller
or Triarc, any Affiliate of any of the foregoing or (iv) Triarc, or to the
knowledge of Triarc or Seller, any other Affiliate of Seller, has any
interest in: (a) any contract, arrangement or understanding with, or
relating to, the Business, the Assets or the Assumed Liabilities other than
contracts, arrangements or undertakings relating to the purchase of dyes
and chemicals from Patrick in the ordinary course of business consistent
with past practice; (b) any loan, arrangement, understanding, agreement or
contract for or relating to the Business or the Assets; or (c) any property
(real, personal or mixed), tangible or intangible, used or currently
intended to be used in the Business. Any accounts payable of the Business
due and payable to Patrick that are Assumed Liabilities are recorded on the
books and records of the Business at the fair market value thereof. For
purposes of this Agreement, "Affiliate" of any specified Person means any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes
of this definition, "control", when used with respect to any specified
Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
<PAGE> Page 39
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing. In addition,
for purposes of this definition, "Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Section 3.20. BROKERS, FINDERS AND INVESTMENT BANKERS. Neither Seller
nor any of its officers, directors or employees, has employed any broker,
finder or investment banker or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees or finders' fees in
connection with the transactions contemplated herein, except that Seller
(i) has retained Morgan Stanley & Co. Incorporated and Lazard Freres & Co.
LLC as its financial advisors and (ii) may incur fees in connection with
any prepayments of the CIT Agreement and any other indebtedness described
in Section 1.5(a).
Section 3.21. BANK ACCOUNTS. SCHEDULE 3.21 sets forth a true, correct
and complete description of each of Seller's bank accounts, lock box
accounts and other accounts in which it holds the assets described in
Section 1.3(a) (the "Bank Accounts").
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
Section 4.1. ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Alabama and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being
conducted.
<PAGE> Page 40
Section 4.2. AUTHORIZATION. Each of Purchaser and Avondale has the
full corporate power and authority to execute and deliver this Agreement
and any other certificate, agreement, document or other instrument to be
executed and delivered by it in connection with the transactions
contemplated hereby (collectively, the "Purchaser Ancillary Documents"), to
perform its respective obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and each of the Purchaser Ancillary
Documents by Purchaser or Avondale, as applicable, the performance by
Purchaser and Avondale of their respective obligations hereunder and
thereunder and the consummation of the transactions provided for herein and
therein have been duly and validly authorized by all necessary corporate
action on the part of Purchaser and Avondale. The boards of directors of
Purchaser and Avondale have approved the execution, delivery and
performance of this Agreement and each of the Purchaser Ancillary
Documents, as applicable, and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been, and each of the
Purchaser Ancillary Documents will be as of the Closing Date, duly executed
and delivered by Purchaser and Avondale, as applicable, and do or will, as
the case may be, constitute the valid and binding agreements of Purchaser
and Avondale, enforceable against it in accordance with their respective
terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
Section 4.3. ABSENCE OF RESTRICTIONS AND CONFLICTS. The execution,
delivery and performance of this Agreement and the Purchaser Ancillary
Documents, the consummation of the transactions contemplated by this
Agreement and the Purchaser Ancillary Documents and the
<PAGE> Page 41
fulfillment of and compliance with the terms and conditions of this
Agreement and the Purchaser Ancillary Documents do not or will not (as the
case may be), with the passing of time or the giving of notice or both,
violate or conflict with, constitute a breach of or default under or permit
the acceleration of any obligation under, (a) any term or provision of the
articles of incorporation or bylaws of Purchaser or Avondale, (b) any contract,
agreement, commitment, arrangement, understanding or other instrument (in
each case whether oral or written) to which Purchaser or Avondale is a
party or to which Purchaser or Avondale or any of their respective
properties are subject, (c) any judgment, decree or order of any court or
governmental authority or agency to which Purchaser or Avondale is a party
or by which Purchaser or Avondale or any of their respective properties are
bound or (d) any material statute, law, rule or regulation applicable to
Purchaser or Avondale. Except for compliance with the applicable
requirements of (i) the HSR Act, (ii) state bulk sales laws, (iii) filing
of UCC-3 termination statements and documents with respect to release of
mortgages and (iv) as set forth in SCHEDULE 4.3, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
government agency or public or regulatory unit, agency, body or authority
with respect to Purchaser or Avondale is required in connection with the
execution, delivery or performance of this Agreement and the Purchaser
Ancillary Documents by Purchaser or Avondale or the consummation of the
transactions contemplated by this Agreement and the Purchaser Ancillary
Documents by Purchaser or Avondale.
Section 4.4. LEGAL PROCEEDINGS. There are no actions or proceedings
pending or, to the knowledge of Purchaser, threatened in writing against,
relating to or involving Purchaser, Avondale or any of their assets or
properties which are reasonably likely to result in the issuance of an
order
<PAGE> Page 42
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated herein.
Section 4.5. BROKERS, FINDERS AND INVESTMENT BANKERS. Neither
Purchaser nor any of its officers, directors or employees has employed any
broker, finder or investment banker or incurred any liability for any
investment banking fees, financial advisory fees, brokerage fees or
finders' fees in connection with the transactions contemplated herein,
except that, (i) Purchaser has retained CS First Boston Corporation as its
financial advisor and (ii) may incur fees in connection with any
prepayments of the CIT Agreement.
Section 4.6. FINANCING. Purchaser has sufficient cash or available
credit facilities or commitment letters from banks or other suitable
financing sources for funds to pay the Purchase Price and to make all other
necessary payments of fees and expenses in connection with the transactions
contemplated by this Agreement and the Purchaser Ancillary Documents.
ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS
Section 5.1. CONDUCT OF BUSINESS BY SELLER. From the date hereof until
the Closing Date, Seller will with respect to the conduct of Business,
except as required in connection with the transactions contemplated by this
Agreement and except as otherwise consented to in writing by Purchaser:
(a) conduct the Business in the ordinary course on a basis
consistent with past practice and not engage in any new line of
business or enter into any agreement, transaction
<PAGE> Page 43
or activity or make
any commitment with respect to the Business except those in the
ordinary course of business and not otherwise prohibited under this
Section 5.1;
(b) use its commercially reasonable efforts to preserve intact
the goodwill of the Business in all material respects, keep the
officers and employees of Seller available to Purchaser (except to the
extent of voluntary terminations of employment) and preserve the
relationships of Seller with customers, suppliers and others having
business relations with the Business, except for the termination of
relationships in the ordinary course of business;
(c) not create any new subsidiary except to hold Excluded Assets
or Excluded Liabilities, acquire any capital stock or other equity
securities of any corporation or acquire any equity or ownership
interest in any business other than in the ordinary course of business
in connection with the collection of accounts receivable;
(d) not dispose of or, to the extent practicable, permit to
lapse any rights to the use of any material patent, trademark, trade
name, license or copyright relating to the Assets or the Business,
including, without limitation, any material Intellectual Property, or
dispose of or disclose to any person, any trade secret, formula,
process, technology or know-how other than in the ordinary course of
Business material to the Assets or the Business not heretofore a
matter of public knowledge;
(e) not (i) sell any assets other than Excluded Assets and
finished goods inventory sold in the ordinary course of business, (ii)
contractually incur any liability or obligation (absolute, accrued or
contingent) except in the ordinary course of business consistent with
past practice; (iii) write-off (or establish reserves against
uncollectibility for) any guaranteed checks, notes or accounts
receivable except in the ordinary course of
<PAGE> Page 44
business consistent with
past practice, (iv) write-down the value of any asset or investment
(including, without limitation, any of the Assets) on the books or
records of the Business, except for depreciation and amortization in
the ordinary course of business consistent with past practice, (v)
cancel any debt or waive any claims or rights except in the ordinary
course of business consistent with past practice, (vi) make any
commitment for any capital expenditure relating to the Business to be
made on or after April 29, 1996 (or, if the Closing occurs after April
29, 1996, on or after May 31, 1996), in excess of $5,000 in the case
of any single expenditure or $50,000 in the case of all capital
expenditures, or (vii) establish any new reserves or increase any
reserves already existing on Seller's books other than in the ordinary
course of business consistent with past practice based on information
of which Seller first becomes aware following the date hereof,
provided that clauses (iii), (iv) and (vii) of this Section 5.1(e)
will not prohibit Seller from taking any action required in accordance
with generally accepted accounting principles applied on a consistent
basis with Seller's past practices so long as Seller has given
Purchaser advance notice of such action;
(f) except as necessary to comply with applicable law, not enter
into, modify or extend in any manner the terms of any employment,
severance or similar agreements with officers, directors or employees
nor grant any increase in the compensation of officers, directors or
employees involved in the Business, whether now or hereafter payable,
including any such increase pursuant to any option, bonus, stock
purchase, pension, profit-sharing, deferred compensation, retirement
or other plan, arrangement, contract or commitment, provided that
Seller shall be permitted to increase the compensation of any
<PAGE> Page 45
salaried, non-officer employee in the ordinary course of business
consistent with past practice if such increase does not exceed 6% of
such employee's current salary;
(g) maintain supplies and inventory of the Business in
quantities historically maintained in the ordinary course of business
consistent with past practice;
(h) continue to extend customers credit, collect accounts
receivable and pay accounts payable and similar obligations in the
ordinary course of business consistent with past practice;
(i) neither amend or modify any Seller Benefit Plan nor commit
to make any such amendment to any Seller Benefit Plan or adopt any new
Seller Benefit Plan for the benefit of any employees of the Business,
except as necessary in order to comply with applicable law;
(j) perform in all material respects all of its obligations
under all, and not default in any material respect or suffer to exist
any event or condition which with notice or lapse of time or both
would constitute a default under any, Seller Contracts, Real Property
Leases and Personal Property Leases (except those being contested in
good faith) and not amend any contract or commitment that is or would
be a Seller Contract, Real Property Lease or Personal Property Lease,
other than in the ordinary course of business consistent with past
practice;
(k) to the extent available at commercially reasonable rates,
maintain in full force and effect and in the same amounts policies of
insurance comparable in amount and scope of coverage to that now
maintained with respect to the Business;
<PAGE> Page 46
(l) prepare and file all federal, state, local and foreign
returns for taxes and other tax reports, filings and amendments
thereto required to be filed by it, and allow Purchaser, at its
reasonable request, to review all such returns, reports, filings and
amendments, other than with respect to Excluded Assets or Excluded
Liabilities at Seller's offices during normal business hours upon
prior request prior to the filing thereof, which review shall not
interfere with the timely filing of such returns;
(m) continue to maintain and service the Assets used in the
conduct of the Business in the same manner as is consistent past
practice;
(n) continue to enter into contracts for the purchase of cotton,
polyester, yarn, greige fabrics and other raw materials in the
ordinary course of business consistent with past practice;
(o) continue to maintain its books and records in accordance
with generally accepted accounting principles, consistently applied
(to the extent applicable), and on a basis consistent with the past
practice of the Business;
(p) continue its cash management practices in the ordinary
course of business consistent with past practice;
(q) continue to fund its obligations with respect to the Seller
Benefit Plans on a timely basis in the ordinary course of business
consistent with past practice; and
(r) promptly notify Purchaser of any event or occurrence that
has had or may reasonably be expected to have a Material Adverse
Effect.
In connection with the continued operation of the Business between the
date of this Agreement and the Closing Date, Seller shall advise and, to
the extent permitted by applicable law,
<PAGE> Page 47
use its good faith reasonable
efforts to confer in good faith on a regular basis with the chief executive
officer of Purchaser and his designees with respect to material matters
affecting or impacting the operations of the Business and will advise and,
to the extent permitted by applicable law, use its good faith reasonable
efforts to consult in general with respect to the ongoing operations of the
Business including, without limitation, material matters regarding
litigation (including, without limitation, any proposed settlement
thereof), capital expenditures, credit approvals, environmental matters and
Seller's general plans and strategies with respect to purchases of cotton,
polyester, yarn, greige fabrics and other raw materials. Seller
acknowledges that Purchaser does not and will not waive any rights it may
have under this Agreement as a result of such consultations nor, if the
Acquisition is not consummated, shall Purchaser be responsible for any
decisions made by the officers or directors of Seller with respect to
matters which are the subject of such consultation.
Section 5.2 INSPECTION AND ACCESS TO INFORMATION. Except to the
extent that any inspection or access to information violates any law,
Order, Seller Contract or License, from the date of this Agreement to the
Closing Date or until this Agreement is terminated as provided in Article
8, Seller shall (and shall cause its subsidiaries and officers, directors,
employees, auditors and agents to) provide Purchaser and its accountants,
investment bankers, counsel, environmental consultants and other authorized
representatives, as often as may be reasonably requested, full access, upon
prior notice, during normal business hours and under reasonable
circumstances, to any and all of its premises, employees (including
executive officers), properties, contracts, commitments, books, records and
other information (including tax returns filed and those in preparation)
and shall cause its officers to furnish to Purchaser and its authorized
representatives, promptly upon reasonable request therefor, any and all
financial, technical and operating data and other information pertaining
<PAGE> Page 48
to the Business (other than tax returns with respect to Excluded Assets or
Excluded Liabilities), and otherwise fully cooperate with Purchaser's
conduct of its due diligence.
Section 5.3 NO SOLICITATION OF TRANSACTIONS. Neither Seller nor
Triarc nor any of their Affiliates shall directly or indirectly, through
any officer, director, agent or otherwise, initiate, solicit or knowingly
encourage (including by way of furnishing non-public information or
assistance), or take any other action to facilitate knowingly, any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Competing Transaction (as hereinafter defined),
or enter into discussions or negotiate with any person or entity in
furtherance of such inquiries or to obtain a Competing Transaction, or
agree to or endorse any Competing Transaction, or authorize or permit any
of the officers, directors or employees of Seller, Triarc or any of their
Affiliates or any investment banker, financial advisor, attorney,
accountant or other representative retained by such entities to take any
such action, except, in each case, as may be otherwise required under
applicable law in the exercise of the fiduciary duties of the board of
directors of Triarc. Seller shall notify Purchaser orally (within one
business day) and in writing (as promptly as practicable) of all relevant
terms of any such inquiries and proposals which Seller, Triarc or any of
their Affiliates or any such officer, director, employee, investment
banker, financial advisor, attorney, accountant or other representative may
receive relating to any of such matters, and if such inquiry or proposal is
in writing, Seller shall deliver to Purchaser a copy of such inquiry or
proposal. For purposes of this Agreement, "Competing Transaction" shall
mean any of the following with regard to all or any portion of the Business
or the Assets: (a) any merger, consolidation, share exchange, business
combination, stock sale or other similar transaction involving Seller; (b)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of any material portion of the Assets or
<PAGE> Page 49
Business in a single transaction
or series of transactions (other than the sale of Assets contemplated by
this Agreement); or (c) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of
the foregoing.
Section 5.4 REASONABLE EFFORTS; FURTHER ASSURANCES; COOPERATION.
Subject to the other provisions of this Agreement and except as may be
otherwise required under applicable law in the exercise of the fiduciary
duties of the board of directors of Triarc, the parties hereto shall each
use reasonable, good faith efforts to perform their obligations herein and
to take, or cause to be taken, or do, or cause to be done, all things
necessary, proper or advisable under applicable law to obtain all
regulatory approvals and satisfy all conditions to the obligations of the
parties under this Agreement and to cause the transactions contemplated
herein to be effected on or prior to April 30, 1996 in accordance with the
terms hereof and shall cooperate fully with each other and their respective
officers, directors, employees, agents, counsel, accountants and other
designees in connection with any steps required to be taken as a part of
their respective obligations under this Agreement, including, without
limitation:
(a) Seller and Purchaser shall promptly make their respective
filings and submissions and shall take all actions necessary, proper
or advisable under applicable laws and regulations to obtain any
required approval of any foreign, federal, state or local governmental
agency or regulatory body with jurisdiction over the transactions
contemplated by this Agreement. Seller and Purchaser shall furnish
all information required for any application or other filing to be
made pursuant to the rules and regulations of any applicable law,
including, without limitation, under the HSR Act, in connection with
the transactions contemplated by this Agreement;
<PAGE> Page 50
(b) Each of Seller and Purchaser will use their good faith
reasonable efforts vigorously to contest and resist any action,
including legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or
permanent) (an "Order") that is in effect and that restricts, prevents
or prohibits the consummation of the transactions contemplated by this
Agreement, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal and all
available legislative action. Each of Seller and Purchaser also
agrees to discuss and consider in good faith any and all actions,
including without limitation the disposition of assets or the
withdrawal from doing business in particular jurisdictions, required
by regulatory authorities as a condition to the granting of any
approvals required in order to permit the consummation of the
transactions contemplated by this Agreement or as may be required to
avoid, lift, vacate or reverse any legislative or judicial action
which would otherwise cause any condition to Closing not to be
satisfied;
(c) (i) Seller shall give any notices to third parties, and
Seller and Purchaser shall each use its good faith commercially
reasonable efforts (which shall not require payments of money to third
parties in order to obtain waivers or consents from such third
parties) (in consultation with each other) to obtain any third party
consents (A) necessary or proper to consummate the transactions
contemplated in this Agreement, (B) disclosed or required to be
disclosed in the Schedules to this Agreement, (C) required to avoid a
material breach of or default under any material Seller Contracts,
Real Property Leases or Personal Property Leases in connection with
the consummation of the transactions contemplated in this
<PAGE> Page 51
Agreement or (D) required to prevent a Material Adverse Effect from
occurring prior to the Closing Date or a material adverse effect on the
Business as currently conducted after the Closing Date;
(ii) In the event that Seller shall fail to obtain any third
party consent described in subsection (c)(i) above, Seller shall use
its good faith reasonable efforts (which shall not include the payment
of money by Seller unless fully reimbursed by Purchaser), and shall
take any such actions reasonably requested by Purchaser, to minimize
any adverse effect upon the Business as currently conducted resulting,
or which could reasonably be expected to result after the Closing
Date, from the failure to obtain such consent. Subject to the
immediately preceding sentence, such actions shall include, without
limitation, if reasonably requested by Purchaser and if such grant
would not constitute a violation of applicable law or a breach of the
applicable contract, the granting of a limited power of attorney by
Seller to Purchaser to permit Purchaser to act on Seller's behalf
under the applicable contracts and agreements, in which event
Purchaser shall indemnify Seller under Section 9.2(d) for any Losses
incurred by Seller as a result of Purchaser acting pursuant to such
power of attorney (other than any third party claim for breach to the
extent resulting from the actual grant by Seller of the limited power
of attorney); provided, that clause (ii) of Section 9.2(d) shall not
be operative solely by reason of the fact that Seller has been unable
to obtain such third party consent;
(d) Each party shall give prompt notice to the other of (i) the
occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty of
Seller or Purchaser, as the case may be, contained in this
<PAGE> Page 52
Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the Closing Date or that will or may
result in the failure to satisfy any of the conditions specified in
Article 6 hereof and (ii) any failure of Seller or Purchaser, as the
case may be, to comply with or satisfy any covenant, condition or
agreement in any material respect to be complied with or satisfied
by any of them hereunder; and
(e) Without the prior written consent of Purchaser, Seller will
not terminate any employee if such termination would result in the
payment of any amounts pursuant to "change in control" provisions of
any employment agreement or arrangement.
Section 5.5 PUBLIC ANNOUNCEMENTS. The timing and content of all
announcements regarding any aspect of this Agreement or the transactions
contemplated hereby to the financial community, government agencies,
employees or the general public shall be mutually agreed upon in advance by
Purchaser and Triarc (unless Seller or Purchaser is advised by counsel that
any such announcement or other disclosure not mutually agreed upon in
advance is required to be made by law or applicable stock exchange rule and
then only after making a reasonable attempt to comply with the provisions
of this Section), provided that upon the signing of this Agreement, Triarc
may file a current report on Form 8-K and issue a press release regarding
this Agreement and the transactions contemplated hereby, subject to
Avondale's right to review and comment on such Form 8-K and press release
prior to their issuances.
Section 5.6 SUPPLEMENTS TO SCHEDULES. From time to time up to the
Closing Date, Seller will promptly supplement or amend the Schedules which
it has delivered pursuant to this Agreement with respect to any matter
hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedules or which is
<PAGE> Page 53
necessary to correct any information in such
Schedules which has been rendered inaccurate thereby. No supplement or
amendment to any Schedule shall have any effect for the purpose of
determining satisfaction of the conditions set forth in Section 6.2 or 6.3
of this Agreement unless such supplement or amendment is accepted by
Purchaser in writing in its reasonable discretion; PROVIDED, HOWEVER, that
if the Closing occurs, all Schedules hereto shall be deemed amended to
reflect any supplements or amendments delivered to Buyer pursuant to this
Section 5.6.
Section 5.7 OFFER OF EMPLOYMENT. Purchaser may offer employment as of
the Closing Date to such employees of the Business as Purchaser desires to
employ. In connection with and immediately following the Closing,
Purchaser shall not act or fail to act in any manner which results in
Seller being in violation of or incurring a Loss under the WARN Act.
Section 5.8 EMPLOYEE BENEFIT PLANS
(a) RETIREMENT SAVINGS PLAN.
(i) On or prior to or as soon as practicable after the Closing
Date, Seller shall (A) spinoff the assets and liabilities of the
Graniteville Company Retirement Savings Plan attributable to the
current and former employees of Patrick into a separate plan in a
manner that satisfies the requirements of Section 414(l) of the Code
and Title I of ERISA and (B) cause the trustee of the Triarc
Companies, Inc. 401(k) Master Trust (the "Master Trust") to liquidate
assets representing an amount equal to the full account balances of
the current and former employees of Seller then participating in the
Graniteville Retirement Savings Plan as it exists after the spinoff
referred to in clause (A) above (the "Seller Savings Plan"); provided,
however, that to the extent the Seller Savings Plan is invested in
guaranteed investment contracts ("GICs") that cannot by their terms be
liquidated in connection with
<PAGE> Page 54
the sale of the Assets to Purchaser (the
"Illiquid GICs"), then such Illiquid GICs as are reasonably
acceptable to Purchaser (as determined by Purchaser based on the
conclusion that would be reached by a reasonably prudent person,
acting in a commercially reasonable manner, under similar
circumstances) and the total value of which bear the same proportion
to the total value of all Illiquid GICs as the total value of the
accounts of the Seller Savings Plan invested in the GIC fund under the
Master Trust as of the last day of the month immediately preceding the
Closing Date bears to the total value of the GIC fund as of such date
shall be allocated to the Seller Savings Plan; further provided that
in no event will the value of such Illiquid GICs allocated to the
Seller Savings Plan exceed $7,500,000.
(ii) Seller will provide Purchaser on or prior to April 3, 1996,
correct and complete copies (including all schedules) of the contracts
for the Illiquid GICs and will hereafter provide such additional
information regarding the GICs in the Master Trust as is reasonably
requested by Purchaser. Purchaser shall notify Seller in writing of
those Illiquid GICs (if any) that are not reasonably acceptable to
Purchaser as determined by Purchaser pursuant to clause (i) above on
or prior to April 11, 1996. Seller agrees to pay all expenses,
charges and penalties associated with the liquidation of the GICs held
by the Master Trust (including, without limitation, any GIC breakage
costs). Following the liquidation of such assets as can be liquidated
and the identification and allocation of the Illiquid GICs, the
trustee of the Master Trust shall segregate cash and cash equivalent
assets and the Illiquid GICs allocable to the Seller Savings Plan in a
manner that satisfies Section 414(1) of the Code and Title I of ERISA,
and shall notify Seller and Purchaser in writing that such segregation
is complete. As soon as practicable after the later of receipt of
such notice or
<PAGE> Page 55
the Closing Date, Purchaser shall assume and become the
sponsor of the Seller Savings Plan as the successor or assignee of
Seller (the "Assumption Time"), and Seller shall have no
responsibility as a plan sponsor, plan administrator, named fiduciary
or as a contributing employer with respect to the operation and
administration of the Seller Savings Plan after the Assumption Time.
Seller shall continue to serve as the plan sponsor for and shall be
responsible for the operation and administration of the Seller Savings
Plan until the Assumption Time, and Seller shall indemnify Purchaser,
its Affiliates and each officer, employee and director of Purchaser
and its Affiliates and each person or entity that is a fiduciary of
the Seller Savings Plan after the Assumption Time against, and hold
each of them harmless from, any and all Losses incurred or suffered by
any of them arising out of, in respect of or in connection with the
operation and administration of the Seller Savings Plan prior to the
Assumption Time. Seller shall make any and all filings and
submissions to the appropriate governmental agencies required to be
made on behalf of the Seller Savings Plan, including, but not limited
to Form 5500, for any period before the Assumption Time.
(iii) Notwithstanding the foregoing, (A) if Purchaser notifies
Seller on or prior to April 11, 1996, that the Illiquid GICs proposed
to be allocated to the Seller Savings Plan are not reasonably
acceptable to Purchaser (as determined by Purchaser pursuant to clause
(i) above), and the parties are unable to agree upon mutually
acceptable alternative arrangements prior to Closing or (B) if Seller
notifies Purchaser on or prior to April 3, 1996, that it desires to
remain as sponsor of the Seller Savings Plan, Seller shall retain
sponsorship of the Seller Savings Plan. In such event, Purchaser
agrees to allow any eligible rollover distributions made from the
Seller Savings Plan (including an eligible rollover distribution
<PAGE> Page 56
of notes held in connection with participant loans from the Seller
Savings Plan) to those employees of the Business who are employees of
Purchaser to be rolled over into a qualified plan maintained by
Purchaser provided such employees are employees of Purchaser at the
time of the rollover to Purchaser's plan.
(b) OTHER EMPLOYEE BENEFIT PLANS. Purchaser shall enroll those
employees of Seller who become employees of Purchaser or its Affiliates in
its employee benefit plans, effective as of the Closing (or as soon as
practicable thereafter), including its 401(k) plan, section 125 cafeteria
plan, medical plan, dental plan, life insurance plan, and disability plan,
under the same terms and conditions applicable to other similarly situated
employees of Purchaser, giving such employees service credit for their
employment with Seller for eligibility and vesting purposes for Purchaser's
401(k) plan and all other Purchaser employee benefit plans (including,
without limitation, job posting, vacation and service awards, but excluding
credit for early retirement benefits under Purchaser's medical plan) as if
such service had been performed with Purchaser and waiving any preexisting
condition exclusion with respect to Purchaser's medical plan, to the extent
that such preexisting condition would have been covered under Seller's
healthcare plan. Purchaser shall also enroll in its medical plan all
former employees of Seller or their dependents who are entitled as of the
Closing Date to continued coverage under Seller's healthcare plan either as
a result of the requirements of the Consolidated Omnibus Reconciliation Act
of 1985 or as retirees. Purchaser shall credit each such current employee
and former employee with all deductible payments and co-payments paid by
such current employee or former employee under Seller's healthcare plan
prior to the Closing Date during the current plan year for purposes of
determining the extent to which any such current or former employee has
satisfied his or her deductible and
<PAGE> Page 57
whether he or she has reached the out-
of-pocket maximum under the Purchaser'S medical plan for such plan year.
Purchaser shall pay claims for benefits by employees and former employees
of the Business under the Seller Benefit Plans incurred but not paid prior
to the Closing Date according to such transition claims procedures as may
be developed by Purchaser and Seller, and Triarc agrees to provide such
assistance as may be necessary to implement such transition claims
procedures.
Section 5.9 CONVEYANCE TAXES. Purchaser and Seller shall cooperate in
the preparation, execution, filing and audit of all returns,
questionnaires, applications, or other documents with respect to any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes (including any interest and penalties) which
become payable in connection with the transactions contemplated hereby that
are required or permitted to be filed on or before the Closing. Seller
shall be responsible for the payment of all real property transfer taxes
("Transfer Taxes") based on its good faith, reasonable estimate of the
value of the Real Property (which value shall be used by Seller in the
preparation and filing of its 1996 federal, state and local tax returns)
(the "Seller Value"). If the highest value allocated to the Real Property
by Purchaser in any federal, state or local tax return or on its books (the
"Purchaser Value") is higher than the Seller Value, and the amount of
Transfer Taxes initially paid by Seller is challenged by any taxing
authority such that Seller is required to pay additional Transfer Taxes,
Purchaser will reimburse Seller for the lesser of (a) such additional
Transfer Taxes or (b) the applicable Transfer Tax rate TIMES the excess of
the Purchaser Value over the Seller Value; provided that in no event will
Purchaser be required to pay more than 50% of the total Transfer Taxes
payable as a result of the transactions contemplated hereby. Each of
Purchaser and Seller shall pay any of such fees and taxes (other than
Transfer Taxes) that such party is
<PAGE> Page 58
obligated to pay under applicable law, and each of Purchaser and Seller shall
indemnify the other for any failure of such party to pay such fees and taxes
(including interest and penalties imposed thereon).
Section 5.10 FINANCIAL STATEMENTS. Prior to the Closing, Seller shall
deliver to Purchaser within fifteen (15) business days following the end of
each accounting period, (a) regularly prepared financial statements
including a balance sheet of the Business as of the last day of such
accounting period after the date of this Agreement together with the
statement of income, stockholders' equity and cash flows of the Business
for such accounting period which financial statements shall have been
prepared (i) from and shall be in accordance with the books and records of
Seller and shall fairly present in all material respects the financial
position of the Business as of the date thereof and the results of
operations and changes in cash flows for the periods set forth therein and
(ii) in accordance with generally accepted accounting principles
consistently applied during the periods involved (subject to lack of
footnotes and normal year-end audit adjustments), and (b) a certificate of
the chief financial officer of Seller certifying that such financial
statements delivered pursuant to clause (a) have been prepared in
accordance with the requirements of this Section 5.10.
Section 5.11 SELLER BANK ACCOUNTS. On the Closing Date, Seller shall
effect the transfer of all amounts held in the Bank Accounts as of the Cut-
Off Time to an account designated by Seller. Thereafter, Seller will cause
all amounts received in the Bank Accounts after the Cut-Off Time (other
than any proceeds included within the Excluded Assets) to be paid to
Purchaser on a daily basis by wire transfer of immediately available funds
to an account designated by Purchaser. Seller shall take all action
reasonably necessary to cause the administrator of the lock box account
maintained for the collection of trade receivables to deliver all
remittance advices
<PAGE> Page 59
and statements to Purchaser. Promptly following the end
of each month through and including December 1996 (and at any time
thereafter as reasonably requested by Purchaser), Seller shall deliver to
Purchaser a statement certified as accurate by the chief financial officer
of Seller or Triarc indicating the amount of cash received in each Bank
Account during such month and the amount transferred to Purchaser during
such month.
Section 5.12 ACCESS TO BOOKS AND RECORDS. Following the Closing,
Purchaser shall provide Seller with reasonable access to all books and
records and provide Seller with such cooperation, assistance and access to
personnel as Seller may reasonably request with respect to the tax basis of
the Assets and the filing of all transfer tax returns during normal
business hours upon prior notice, provided that such access shall be
subject to the execution of a mutually agreeable confidentiality agreement
(which agreement shall not be unreasonably withheld). Seller shall provide
Purchaser with reasonable access to all books and records and provide
Purchaser with such cooperation, assistance and access to personnel as
Purchaser may reasonably request with respect to the Excluded Assets and
Excluded Liabilities during normal business hours upon prior notice to the
extent reasonably necessary in connection with the ongoing operations of
the Business.
Section 5.13 NONSOLICITATION. Except as disclosed to Purchaser in
writing on or prior to the date hereof, Seller and Triarc hereby agree that
neither Seller, Triarc nor any of their respective Affiliates shall, during
the period ending two years after the date hereof, in any manner, directly
or by assisting others, employ or attempt to employ, on their behalf or on
behalf of any other person, firm or corporation, any employee of the
Business who is offered employment by the Purchaser.
Section 5.14 INSURANCE. Seller shall in good faith cooperate with
Purchaser and take all actions reasonably requested by Purchaser that are
necessary or desirable to permit Purchaser to
<PAGE> Page 60
have available to it
following the Closing the benefits (whether direct or indirect) of the
insurance policies maintained by Seller with respect to the Business which
are currently in force. All costs relating to the actions described in
this Section shall be borne by Purchaser.
Section 5.15 PURCHASE OF DYES AND CHEMICALS. From the date hereof
until the Closing Date, Purchaser will not enter into any commitment with
respect to the purchase of any dye or chemical for use primarily in Buyer's
textile manufacturing operations that has a term longer than three (3)
months.
Section 5.16 TIMBER CONTRACT. Seller shall use its commercially
reasonable good faith efforts to cause the current timber cutting on "Tract
L" included within the Real Property to cease as soon as possible; provided
that (i) Seller will not be required to pay any money in excess of a pro
rata portion of amounts previously paid to Seller for such timber rights,
based on the ratio of the number of acres as to which such rights were
granted that remain to be cut to the total number of acres as to which such
rights were granted, and (ii) Seller shall not effect any amendment or
other settlement with respect to such timber rights without the prior
consent of Purchaser. At the Closing, Seller shall pay Purchaser an amount
equal to $241,642 MINUS any amount paid by Seller (with Purchaser's
consent) to terminate such timber cutting on Tract L.
<PAGE> Page 61
ARTICLE 6.
CONDITIONS
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to effect the transactions contemplated hereby
shall be subject to the fulfillment at or prior to the Closing of each of
the following conditions:
(a) INJUNCTION. As of the Closing, there shall be no effective
injunction, writ or preliminary restraining order or any order of any
nature issued by a court or governmental or regulatory agency of
competent jurisdiction to the effect that the purchase and sale of the
Business and the Assets may not be consummated as herein provided, no
proceeding or lawsuit shall have been commenced by any court,
governmental or regulatory agency for the purpose of obtaining any
such injunction, writ or preliminary restraining order and no written
notice shall have been received from any such court or agency
indicating an intent to restrain, prevent, materially delay or
restructure the transactions contemplated by this Agreement.
(b) CONSENTS. All consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, any governmental
agency or public or regulatory unit, agency, body or authority
required in connection with the execution, delivery or performance of
this Agreement shall have been obtained or made, except where the
failure to have obtained or made any such consent, approval, order,
authorization, declaration or filing would not have a Material Adverse
Effect prior to the Closing or a material adverse effect on the
Business as currently conducted after the Closing.
<PAGE> Page 62
Section 6.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing of each of
the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller set forth in Article 3 of this Agreement shall be
true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except for those representations or warranties made as
of a specific date which shall be true and correct in all material
respects as of such date).
(b) PERFORMANCE OF OBLIGATIONS OF SELLER. Seller shall have
performed in all material respects all covenants and agreements
required to be performed by it under this Agreement on or prior to the
Closing Date.
(c) NO MATERIAL ADVERSE CHANGE. Between the date of this
Agreement and the Closing, there shall not have been (nor shall
Purchaser have become aware of) any material adverse change, or any
extraordinary event which could reasonably be expected to result in a
material adverse change (which shall not include any adverse change in
general economic, business or industry conditions), in or affecting
the assets, liabilities, results or operations, financial condition or
business of the Business or Seller.
(d) CERTIFICATE. Seller shall have delivered to Purchaser a
certificate of its appropriate officers as to compliance with the
conditions set forth in Sections 6.2(a), (b) and (c).
(e) OPINION OF SELLER'S COUNSEL. Purchaser and, at Purchaser's
request, such other persons listed on SCHEDULE 6.2(e), all of whom are
providing equity or debt financing to
<PAGE> Page 63
Purchaser in connection with the
Acquisition, shall have received an opinion of The McNair Law Firm,
P.A., and Purchaser shall have received an opinion of Paul, Weiss,
Rifkind, Wharton & Garrison, each dated the Closing Date,
substantially in the form attached hereto as EXHIBITS B and C,
respectively.
(f) MATERIAL CONTRACTS. Purchaser shall have received written
consents to the assignment of all Seller Contracts, Real Property
Leases and Personal Property Leases or written waivers of the
provisions of any Seller Contracts, Real Property Leases or Personal
Property Leases requiring the consents of third parties as set forth
in SCHEDULE 6.2(f). All such consents and waivers shall be in full
force and effect. For the purposes of this Section 6.2(f), if Seller
has satisfied in full its obligations under Section 5.4(c)(i) and
offers (pursuant to Section 5.4(c) or otherwise) to grant a limited
power of attorney to Purchaser on terms reasonably acceptable to
Purchaser to act on Seller's behalf under any Seller Contract, Real
Property Lease or Personal Property Lease requiring the consent of a
third party as set forth in Schedule 6.2(f), and delivery of such
power of attorney could reasonably be expected to afford Purchaser
substantially all of the rights and benefits available to Seller under
such Contract or Lease and would not be deemed to constitute a breach
of any such Contract or Lease or violate applicable law, such granting
of the limited power of attorney shall constitute the consent required
under this Section 6.2(f). In such circumstance, Purchaser shall
indemnify Seller under Section 9.2(d) for any Losses incurred by the
Seller as a result of Purchaser acting pursuant to such power of
attorney (other than any third party claim for breach to the extent
resulting from the actual grant by Seller of the limited power of
<PAGE> Page 64
attorney); provided that clause (ii) of Section 9.2(d) shall not be
operative solely by reason of the fact that Seller has been unable to
obtain such third party consent.
(g) SUPPLY AGREEMENT. Patrick shall have executed and delivered
to Purchaser the Supply Agreement in the form attached hereto as
EXHIBIT D.
(h) RELEASE OF LIENS. Seller shall have delivered to Purchaser
UCC-3 termination statements and mortgage releases which shall be
sufficient to release all Liens on the Assets (other than Permitted
Liens) including, without limitation, those set forth in SCHEDULES
3.5(a), affecting the Assets (including, without limitation, the Real
Property).
(i) NPC CONTRACT. The NPC Contract shall have been amended to
provide that it can be terminated by either party thereto upon six
months' prior written notice. Such amendment shall not be deemed to
be in breach or violation of any provision of this Agreement and shall
not be required to be reflected on any Schedule hereto.
Section 6.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller and Triarc to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing of
each of the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser set forth in Article 4 of this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except for those representations or warranties made as
of a specific date which shall be true and correct in all material
respects as of such date).
<PAGE> Page 65
(b) PERFORMANCE OF OBLIGATIONS BY PURCHASER. Purchaser shall
have performed in all material respects all covenants and agreements
required to be performed by it under this Agreement on or prior to the
Closing Date.
(c) CERTIFICATE. Purchaser shall have delivered to Seller a
certificate of its appropriate officers as to compliance with the
conditions set forth in Sections 6.3(a) and (b).
(d) OPINIONS OF PURCHASER COUNSEL. Seller shall have received
opinions of King & Spalding and Wyche, Burgess, Freeman & Parham
dated the Closing Date, to the effect set forth on EXHIBITS E and F,
respectively, and otherwise in form and substance reasonably
satisfactory to Seller.
(e) SUPPLY AGREEMENT. Purchaser shall have executed and
delivered to Seller the Supply Agreement in the form attached hereto
as EXHIBIT D.
(f) ASSUMPTION AGREEMENT. Purchaser shall have executed and
delivered to Seller the Assumption Agreement in the form attached
hereto as EXHIBIT G.
ARTICLE 7.
CLOSING
Section 7.1 CLOSING. The consummation of the transactions
contemplated by this Agreement are herein referred to as the "Closing."
The "Closing Date" shall be the date on which the Closing occurs. The
Closing shall occur three business days after Purchaser has given written
notice to Seller of its desire to close the Acquisition; PROVIDED, HOWEVER,
that the Closing shall not in any case occur on any date later than May 31,
1996, without Seller's written consent. Subject to the preceding sentence,
Purchaser and Seller acknowledge their desire to have the Closing occur at
<PAGE> Page 66
10:00 a.m. on April 29, 1996, or as soon thereafter as is reasonably
practicable. The Closing shall take place at the offices of King &
Spalding, 191 Peachtree Street, Atlanta, Georgia, or at such other place as
Seller and Purchaser shall agree.
Section 7.2 ITEMS TO BE DELIVERED AT CLOSING. At the Closing and
subject to the terms and conditions herein contained:
(a) Seller shall deliver to Purchaser the following:
(i) such bills of sale, assignments, endorsements,
certificates of title, special or limited warranty deeds with
respect to the Real Property, and other good and sufficient
instruments and documents of conveyance and transfer, in form
reasonably satisfactory to Purchaser and its counsel, as shall be
necessary and effective to transfer and assign to, and vest in
Purchaser all of Seller's right, title and interest in and to the
Assets, including, without limitation, (A) good and valid title
in and to all of the Assets (including, without limitation, the
Real Property and motor vehicles) owned by Seller on the Closing
Date, (B) good and valid leasehold interests in and to all of the
Assets leased by Seller as lessee on the Closing Date and (C) all
of Seller's rights under all agreements, contracts, commitments,
leases, instruments and other documents included in the Assets to
which Seller is a party or by which it has rights on the Closing
Date, and simultaneously with such delivery, all such reasonable
steps will be taken as may be required to place Purchaser in
actual possession and operating control of the Assets; and
(ii) copies of all such documentation to be used to effect
the change of the name of Seller and any Affiliates to a name
that does not include the name
<PAGE> Page 67
"Graniteville" and to reflect such
change in all jurisdictions where each Seller or any such
Affiliate is qualified to do business.
(b) Purchaser shall deliver to Seller the following:
(i) the Purchase Price deliverable pursuant to Section 2.1
hereof; and
(ii) an assumption agreement substantially in the form of
EXHIBIT G hereto pursuant to which Purchaser will assume and
agree to pay, discharge or perform, as appropriate, the Assumed
Liabilities.
(c) The parties hereto also shall deliver to each other the
documents and instruments referred to in Article 6 hereof and such
other documents and instruments as Seller and Purchaser (or their
respective counsel) shall reasonably request.
Section 7.3 FURTHER ASSURANCES. Seller from time to time shall, at or
after the Closing, at Purchaser's request, execute, acknowledge and deliver
to Purchaser such other instruments of conveyance and transfer and will
take such other actions and execute and deliver such other documents,
certifications and further assurances as Purchaser may reasonably request
in order to vest more effectively in Purchaser, or to put Purchaser more
fully in possession of, any of the Assets (including, without limitation,
the Real Property), or to better enable Purchaser to complete, perform or
discharge any of the Assumed Liabilities. Each of the parties hereto will
cooperate with the other and execute and deliver to the other such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any party hereto as necessary to carry out,
evidence and confirm the intended purposes of this Agreement.
<PAGE> Page 68
ARTICLE 8.
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated at any time
at or prior to the Closing (the "Termination Date"):
(a) in writing by mutual consent of Triarc and Avondale;
(b) by notice from Triarc to Avondale if the conditions set
forth in Sections 6.1 and 6.3 hereof shall not have been fulfilled and
such conditions cannot be fulfilled by Purchaser on or before May 31,
1996;
(c) by notice from Avondale to Triarc if the conditions set
forth in Sections 6.1 and 6.2 hereof shall not have been fulfilled and
such conditions cannot be fulfilled by Seller on or before May 31,
1996;
(d) by notice from either Avondale or Triarc to the other if the
Acquisition shall not have been consummated on or before May 31, 1996
(unless the failure to consummate the Acquisition by such date shall
be due to the action or failure to act of the party or its Affiliate
seeking to terminate this Agreement, including, without limitation,
any breach of its obligations under Section 5.4);
(e) by notice from Seller and Triarc to Purchaser and Avondale,
if the board of directors of Triarc is required under applicable law
in the exercise of its fiduciary duties to terminate this Agreement;
or
(f) by notice from Purchaser and Avondale to Seller and Triarc,
if Wachovia Bank of Georgia, N.A., as agent ("Wachovia"), has notified
Avondale in writing that it will not fund the loan for the purpose of
acquiring the Assets contemplated by that certain
<PAGE> Page 69
commitment letter,
dated March 11, 1996, primarily based on Wachovia's determination that
a material adverse change has occurred in either (i) the financial
condition, operations, assets, prospects or liabilities of Purchaser
and Avondale since August 25, 1995, or Seller since January 1, 1995 or
(ii) the financial markets since March 11, 1996.
Section 8.2 SPECIFIC PERFORMANCE AND OTHER REMEDIES. The parties
hereto each acknowledge that the rights of each party to consummate the
transactions contemplated hereby are special, unique and of extraordinary
character, and that, in the event that any party violates or fails or
refuses to perform any covenant or agreement made by it herein, the
non-breaching party may be without an adequate remedy at law. The parties
each agree, therefore, that in the event that either party violates or
fails or refuses to perform any covenant or agreement made by such party
herein, the non-breaching party or parties may, subject to the terms of
this Agreement and in addition to any remedies at law for damages or other
relief, institute and prosecute an action in any court of competent
jurisdiction to enforce specific performance of such covenant or agreement
or seek any other equitable relief.
Section 8.3 EFFECT OF TERMINATION. In the event of termination of
this Agreement pursuant to this Article 8, this Agreement shall forthwith
become void and there shall be no liability on the part of any party or its
respective officers, directors or stockholders, except for obligations
under Section 5.5, Article 10 (other than Sections 10.11 and 10.14) and
this Section, all of which shall survive the Termination Date.
Notwithstanding the foregoing, nothing contained herein shall relieve any
party from liability for any breach of this Agreement.
<PAGE> Page 70
ARTICLE 9.
INDEMNIFICATION
Section 9.1 INDEMNIFICATION OBLIGATIONS OF SELLER. Subject to the
provisions of Sections 9.3, 9.4 and 9.5, Seller shall indemnify, defend and
hold harmless Purchaser and its subsidiaries and Affiliates, each of their
respective officers, directors, employees, agents and representatives and
each of the heirs, executors, successors and assigns of any of the
foregoing (collectively, the "Purchaser Indemnified Parties") from, against
and in respect of any and all claims, liabilities, obligations, losses,
costs, expenses, penalties, fines and other judgments (at equity or at law)
and damages whenever arising or incurred (including, without limitation,
amounts paid in settlement in accordance with Section 9.3, costs of
investigation and reasonable attorneys' fees and expenses) (collectively,
"Losses") arising out of or relating to:
(a) any Excluded Liability;
(b) all or any portion of any Assumed Liability that is not
included as a liability on the Statement of Net Assets;
(c) all or any portion of any Assumed Liability that is in
excess of the amount of such Assumed Liability included as a
liability on the Statement of Net Assets;
(d) any breach or inaccuracy of any representation or
warranty made by Seller or any of its Affiliates in this
Agreement;
(e) any breach of any covenant, agreement or undertaking
made by Seller or any of its Affiliates in this Agreement;
<PAGE> Page 71
(f) subject to the last paragraph of Section 9.1, any
liability or obligation resulting from (i) any violation by
Seller of or noncompliance by Seller with, in each case in any
material respect, any Environmental Law, (ii) any notification,
directive or similar instrument issued in writing by any court or
other governmental agency with respect to any Environmental Law
instructing Purchaser to take any action with respect to any
environmental condition that existed or occurred at or prior to
the Closing arising out of Seller's conduct of the Business, to
the extent any liabilities or obligations resulting from such
notification, directive or similar instrument would not be
precluded from indemnification under clause (i) above or (iii)
any claim (including, without limitation, claims for nuisance or
trespass or exposure to hazardous or toxic materials in the
workplace) brought by any court or other governmental agency or
any third party under any Environmental Law with respect to any
events or circumstances that existed at or prior to the Closing,
arising out of Seller's conduct of the Business, that results in
the payment of any money by, or the imposition of any restriction
upon, Purchaser as a result of any judgment, administrative
order, consent order or settlement, to the extent any liability
or obligation resulting from such claim would not be precluded
from indemnification under clause (i) above. As used in this
paragraph (f), the clause "Seller's conduct of the Business"
shall include, without limitation, the transportation by or on
behalf of Seller to or disposal by or on behalf of Seller of
hazardous materials on property not owned by Seller, and Seller's
use, ownership or occupancy of the Real Property;
<PAGE> Page 72
(g) any fraud by Seller or any of its Affiliates in
connection with the transactions contemplated hereby ;
(h) any knowing and intentional breach of any
representation or warranty made in Section 3.4, Section 3.8 or
Section 3.21 by Seller or any of its Affiliates; or
(i) any failure or inability of Seller to obtain consents
to the assignment of the Seller Contracts listed on Schedule
9.1(i); PROVIDED, HOWEVER, the Purchaser Indemnified Parties
shall take such actions that a reasonably prudent person, acting
in a commercially reasonable manner and seeking to minimize or
mitigate his expenses to the extent reasonably practical
consistent with prudent business practices (assuming such person
did not have a right to indemnity under this Agreement), would
take in the circumstances, including, without limitation,
accepting a limited power of attorney from Seller on a basis
consistent with Section 6.2(f).
The Losses of the Purchaser Indemnified Parties described in this
Section 9.1 as to which the Purchaser Indemnified Parties are entitled
to indemnification are hereinafter collectively referred to as
"Purchaser Losses"; PROVIDED, HOWEVER, that Purchaser shall not be
entitled to indemnification for any type of Loss to the extent that
there is a reserve for such type of Loss on the Statement of Net
Assets, in which case Purchaser Losses shall only include the Losses
of that type in excess of such reserve; PROVIDED, FURTHER, HOWEVER,
that solely for the purposes of determining the amount of Purchaser
Losses under this Section 9.1, the reserve for Losses of the type
described in Section 9.1(f) shall equal $650,000, regardless of the
actual amount of the reserve for such Losses reflected on the
Statement of Net Assets; and PROVIDED, FURTHER, HOWEVER, that Section
9.1(f) shall be the
<PAGE> Page 73
sole source of indemnification with respect to claims arising pursuant
to Environmental Laws.
With respect to claims for indemnification pursuant to Section 9.1(f),
Purchaser Losses shall not include any Losses (i) which constitute
costs of causing the operation of the Business to comply with
Environmental Laws to the extent any costs so incurred exceed the
Commercially Reasonable Costs of causing the operation of the Business
to comply in all material respects with Environmental Laws; (ii) which
constitute costs of operating the Business in the ordinary course in
compliance with Environmental Laws in all material respects except to
the extent such costs constitute Commercially Reasonable Costs arising
out of violations of Environmental Laws that existed or occurred at or
prior to the Closing; (iii) which constitute costs of conducting the
investigation and remediation of environmental conditions to the
extent such costs exceed the Commercially Reasonable Costs of
conducting investigation and remediation of said environmental
conditions; or (iv) which arise out of or relate to the cost of
speeding up the production line, modernizing any plant or equipment or
production improvements except to the extent such speeding up,
modernization or improvements are required in order to comply in all
material respects with Environmental Laws. For purposes of this
Agreement, "COMMERCIALLY REASONABLE COSTS" shall mean the costs which
a reasonably prudent person, acting in a commercially reasonable
manner and seeking to minimize or mitigate his expenses to the extent
reasonably practicable consistent with prudent business practices
(assuming such person did not have any right of indemnity under this
Agreement), would expend to resolve the matter.
<PAGE> Page 74
Section 9.2 INDEMNIFICATION OBLIGATIONS OF PURCHASER. Subject to
the provisions of Sections 9.3, 9.4 and 9.5, Purchaser shall indemnify
and hold harmless Seller, Triarc and their subsidiaries and
affiliates, each of their respective officers, directors, employees,
agents and representatives and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the
"Seller Indemnified Parties") from, against and in respect of any and
all Losses arising out of or relating to:
(a) any of the Assumed Liabilities, except to the extent
such Assumed Liabilities constitute Purchaser Losses pursuant to
Section 9.1(b) or 9.1(c);
(b) any breach or inaccuracy of any representation or
warranty in this Agreement or in any Purchaser Ancillary
Documents;
(c) any breach of any covenant, agreement or undertaking
made by Purchaser in this Agreement or in any Purchaser Ancillary
Document; or
(d) the conduct of the Business after the Closing Date,
except to the extent that any Loss of the Seller Indemnified
Parties arising therefrom (i) is an Excluded Liability or (ii)
results directly from facts or circumstances for which the
Purchaser Indemnified Parties are entitled to indemnification
from Seller under Section 9.1; PROVIDED, HOWEVER, that with
respect to Section 9.1(f), the entitlement to indemnification
must result from facts or circumstances which constitute a breach
of Seller's representation and warranties in Article 3.
<PAGE> Page 75
The Losses of the Seller Indemnified Parties described in this Section 9.2
as to which the Seller Indemnified Parties are entitled to indemnification
are hereinafter collectively referred to as "Seller Losses."
Section 9.3 INDEMNIFICATION PROCEDURE.
(a) Promptly after receipt by a Purchaser Indemnified Party
or a Seller Indemnified Party (hereinafter collectively referred
to as an "Indemnified Party") of notice by a third party of any
complaint or the commencement of any action or proceeding with
respect to which such Indemnified Party may be entitled to
receive payment from the other party for any Purchaser Losses or
Seller Losses (as the case may be), such Indemnified Party shall
notify Purchaser or Seller within 10 days, whoever is the
appropriate indemnifying party hereunder (the "Indemnifying
Party"), of such complaint or of the commencement of such action
or proceeding; PROVIDED, HOWEVER, that the failure to so notify
the Indemnifying Party shall not relieve the Indemnifying Party
from liability for such claim arising otherwise than under this
Agreement and such failure to so notify the Indemnifying Party
shall relieve the Indemnifying Party from liability under this
Agreement with respect to such claim only if, and only to the
extent that, such failure to notify the Indemnifying Party
results in the forfeiture by the Indemnifying Party of rights and
defenses otherwise available to the Indemnifying Party with
respect to such claim. The Indemnifying Party shall have the
right, upon written notice delivered to the Indemnified Party
within 20 days thereafter, to assume the defense of such action
or proceeding, including the
<PAGE> Page 76
employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of the fees
and disbursements of such counsel. In the event, however, that
the Indemnifying Party declines or fails to assume the defense of
the action or proceeding within such 20-day period, then such
Indemnified Party may employ counsel to represent or defend it in
any such action or proceeding and the Indemnifying Party shall
pay the reasonable fees and disbursements of such counsel as
incurred; PROVIDED, HOWEVER, that the Indemnifying Party shall
not be required to pay the fees and disbursements of more than
one counsel for all Indemnified Parties in any jurisdiction in
any single action or proceeding. In any action or proceeding
with respect to which indemnification is being sought hereunder,
the Indemnified Party or the Indemnifying Party, whichever is not
assuming the defense of such action, shall have the right to
participate in such litigation and to retain its own counsel at
such party's own expense. The Indemnifying Party or the
Indemnified Party, as the case may be, shall at all times use
reasonable efforts to keep the Indemnifying Party or the
Indemnified Party, as the case may be, reasonably apprised of the
status of the defense of any action the defense of which they are
maintaining and to cooperate in good faith with each other with
respect to the defense of any such action.
(b) If the Indemnifying Party assumes the defense of a
claim pursuant to Section 9.3(a), no Indemnified Party may settle
or compromise such claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder
without the prior written consent of the Indemnifying Party,
unless such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party from all
liability arising out of such claim at no
<PAGE> Page 77
cost to the Indemnifying Party. If the Indemnifying Party does
not assume the defense of a claim pursuant to Section 9.3(a), the
Indemnified Party will not agree to any settlement, compromise or
consent with respect to such claim without the prior written
consent of the Indemnifying Party, which shall not be
unreasonably withheld (which reasonableness shall be determined
based on the actions that a reasonably prudent person, acting in
a commercially reasonable manner and seeking to mitigate or
minimize his expenses to the extent reasonably consistent with
prudent business practices (assuming such person did not have any
right of indemnity under this Agreement), would take in the
circumstances).
An Indemnifying Party may not, without the prior
written consent of the Indemnified Party, settle or compromise
any claim or consent to the entry of any judgment with respect to
which indemnification is being sought hereunder unless such
settlement, compromise or consent includes an unconditional
release of the Indemnified Party from all liability arising out
of such claim and does not contain any equitable order, judgment
or term which in any manner affects, restrains or interferes with
the business of the Indemnified Party or any of the Indemnified
Party's respective Affiliates.
(c) In the event an Indemnified Party shall claim a right
to payment pursuant to this Agreement, such Indemnified Party
shall send written notice of such claim to the appropriate
Indemnifying Party. Such notice shall specify in reasonable
detail the basis for such claim. As promptly as possible after
the Indemnified Party has given such notice, such Indemnified
Party and the appropriate Indemnifying Party shall establish the
merits and amount of such
<PAGE> Page 78
claim (by mutual agreement, litigation,
arbitration or otherwise) and, within five business days of the
agreement or the final judgment (with respect to litigation and
arbitration not subject to further appeal) of the merits and
amount of such claim, the Indemnifying Party shall pay to the
Indemnified Party immediately available funds in an amount equal
to such claim as determined hereunder.
Section 9.4 CLAIMS PERIOD. For purposes of this Agreement, a
"Claims Period" shall be the period after the earlier of the Closing
Date or the date of any termination of this Agreement pursuant to
Article 8 during which a claim for indemnification may be asserted
under this Agreement by an Indemnified Party. The Claims Periods
under this Agreement shall terminate as follows:
(a) with respect to Purchaser Losses arising under Section
9.1(d) with respect to any breach or inaccuracy of any
representation or warranty in Section 3.2, the fourth sentence of
Section 3.5(a), the second sentence of Section 3.5(d), Section
3.12, Section 3.19 and Section 3.20 (collectively, the "Seller
Surviving Representations") or under Sections 9.1(a), 9.1(e),
9.1(g) and 9.1(i) (collectively, the "Seller Surviving
Obligations"), the Claims Period shall continue indefinitely,
except as limited by law (including by applicable statutes of
limitation);
(b) with respect to Purchaser Losses arising under Section
9.1(f), the Claims Period shall terminate on the third
anniversary of the Closing Date;
(c) with respect to Seller Losses arising under Section
9.2(b) with respect to any breach or inaccuracy of any
representation or warranty under Section 4.2 or Section 4.5, or
under Sections 9.2(a), (c), (d) or (e), the Claims Period shall
continue indefinitely, except as limited by law (including any
applicable statutes of limitation); and
<PAGE> Page 79
(d) with respect to all other Purchaser Losses or Seller
Losses arising under this Agreement, the Claims Period shall
terminate on the date that is eighteen months after the Closing
Date.
Notwithstanding the foregoing, if prior to the close of business
on the last day of the applicable Claims Period, an Indemnifying Party
shall have been properly notified of a claim for indemnity hereunder
and such claim shall not have been finally resolved or disposed of at
such date, such claim shall continue to survive and shall remain a
basis for indemnity hereunder until such claim is finally resolved or
disposed of in accordance with the terms hereof.
Section 9.5 LIABILITY LIMITS. Notwithstanding anything to the
contrary set forth herein:
(a) Seller shall only be liable for Purchaser Losses to the
extent that any such Purchaser Losses (exclusive of Purchaser
Losses arising under or pursuant to any Seller Surviving
Representations or Seller Surviving Obligations or Section
9.1(h)) exceed, in the aggregate, $5,000,000 (the "Seller Basket
Amount") and such liability shall be only for amounts in excess
of the Seller Basket Amount; PROVIDED, HOWEVER, that Purchaser
Losses arising under or pursuant to any Selling Surviving
Representations and/or Seller Surviving Obligations or under
Section 9.1(h) shall not be subject to the Seller Basket Amount,
and Seller shall be liable for Purchase Losses arising under or
pursuant thereto from the first dollar;
(b) the indemnification obligations of Seller hereunder
shall not exceed in the aggregate $100,000,000 (the "Seller Cap
Amount"); PROVIDED, HOWEVER, that Purchaser Losses arising under
or pursuant to any Selling Surviving
<PAGE> Page 80
Representations and/or
Seller Surviving Obligations or under Section 9.1(h) shall not be
subject to the Seller Cap Amount and there shall be no limitation
on the indemnification obligations of Seller with respect to
Purchaser Losses arising under or pursuant to such provisions;
and
(c) the indemnity obligations of the Indemnifying Party
hereunder with respect to any Seller Losses or Purchaser Losses
(as applicable) shall not apply to the extent that the
Indemnified Party is compensated for the same Losses from
insurance proceeds actually received.
Section 9.6 COMPLIANCE WITH BULK SALES LAWS. Purchaser and
Seller hereby waive compliance by the parties hereto with the bulk
sales law and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement.
Section 9.7 INVESTIGATIONS. The respective representations and
warranties of Purchaser and Seller contained herein or in any
certificate or other document delivered by any party prior to the
Closing and the rights to indemnification set forth in Section 9 shall
not be deemed waived or otherwise affected by any investigation made
by a party hereto.
<PAGE> Page 81
ARTICLE 10.
MISCELLANEOUS PROVISIONS
Section 10.1 NOTICES. All notices, communications and deliveries
hereunder shall be made in writing signed by or on behalf of the party
making the same, shall specify the Section hereunder pursuant to which it
is given or being made, and shall be deemed given or made (a) on the date
delivered if delivered in person, (b) on the date after delivery to a
reputable overnight courier, fees prepaid, (c) upon transmission by
facsimile if receipt is confirmed by telephone or (d) on the fifth (5th)
business day after it is mailed if mailed by registered or certified mail
(return receipt requested) (with postage and other fees prepaid), if
addressed or transmitted as follows:
To Purchaser or Avondale:
Avondale Incorporated
506 South Broad Street
Monroe, Georgia 30655
Attn: G. Stephen Felker
Telecopy No.: (770) 267-2543
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Michael J. Egan III
Telecopy No.: (404) 572-5145
To Seller or Triarc:
Triarc Companies, Inc.
900 Third Avenue
31st Floor
New York, NY 10022
Attn: Brian L. Schorr
Telecopy No.: (212) 230-3216
<PAGE> Page 82
with a copy to:
Paul, Weiss, Rifkind
Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Attn: Neale M. Albert
Telecopy No.: (212) 757-3990
and, if delivered prior to Closing, with a copy to:
Graniteville Company
133 Marshall Street
Graniteville, SC 29829-0128
Attn: John L. Barnes, Jr.
Telecopy No.: (803) 663-5016
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
Section 10.2 SCHEDULES AND EXHIBITS. The Schedules and Exhibits hereto
are hereby incorporated into this Agreement and are hereby made a part
hereof as if set out in full in this Agreement.
Section 10.3 ASSIGNMENT; SUCCESSORS IN INTEREST. No assignment or
transfer by Avondale, Purchaser, Triarc or Seller of their respective
rights and obligations hereunder shall be made except with the prior
written consent of the other parties hereto. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
permitted successors and assigns, and any reference to a party hereto shall
also be a reference to a permitted successor or assign.
Section 10.4 NUMBER; GENDER. Whenever the context so requires, the
singular number shall include the plural and the plural shall include the
singular, and the gender of any pronoun shall include the other genders.
<PAGE> Page 83
Section 10.5 CAPTIONS. The titles, captions and table of contents
contained in this Agreement are inserted herein only as a matter of
convenience and for reference and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision hereof.
Unless otherwise specified to the contrary, all references to Articles and
Sections are references to Articles and Sections of this Agreement and all
references to Schedules or Exhibits are references to Schedules and
Exhibits, respectively, to this Agreement.
Section 10.6 CONTROLLING LAW; INTEGRATION; AMENDMENT. This Agreement
shall be governed by and construed and enforced in accordance with the
internal laws of the State of South Carolina without reference to South
Carolina's choice of law rules. This Agreement and the documents executed
pursuant hereto supersede all negotiations, agreements and understandings
among the parties with respect to the subject matter hereof (including,
without limitation, that certain letter agreement between Triarc and
Purchaser dated January 25, 1996, but excluding that certain
Confidentiality Agreement dated May 8, 1995 among Purchaser, Seller and
Triarc and that certain Confidentiality Agreement among Seller, Purchaser
and Triarc dated July 25, 1995 which confidentiality agreements shall
survive until the Closing, or if this Agreement is terminated,
indefinitely) and constitutes the entire agreement among the parties
hereto. This Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto.
Section 10.7 SEVERABILITY. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by law, the parties hereto waive any provision of law which
renders any such provision prohibited or unenforceable in any respect.
<PAGE> Page
Section 10.8 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement or the terms hereof to
produce or account for more than one of such counterparts.
Section 10.9 ENFORCEMENT OF CERTAIN RIGHTS. Nothing expressed or
implied in this Agreement is intended, or shall be construed, to confer
upon or give any person, firm or corporation other than the parties hereto,
and their successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, or result in such person,
firm or corporation being deemed a third party beneficiary of this
Agreement.
Section 10.10 WAIVER. Any agreement on the part of a party hereto to
any extension or waiver of any provision of this Agreement shall be valid
only if set forth in an instrument in writing signed on behalf of such
party. A waiver by a party of the performance of any covenant, agreement,
obligation, condition, representation or warranty shall not be construed as
a waiver of any other covenant, agreement, obligation, condition,
representation or warranty. A waiver by any party of the performance of
any act shall not constitute a waiver of the performance of any other act
or an identical act required to be performed at a later time.
Section 10.11 VALUATION FOR TAX REPORTING PURPOSES. Within 90 days
after the date on which the final Statement of Net Assets is delivered
pursuant to Section 2.3 or 2.4, Purchaser shall provide to Seller, for
Seller's review and comment, a written schedule indicating the respective
fair market values of the Assets, Assumed Liabilities and other items
acquired hereunder as determined in good faith by Purchaser. Purchaser and
Seller shall endeavor in good faith to agree on the appropriate fair market
values to be used in preparing and filing their respective Forms 8594 with
the Internal Revenue Service, as required by Section 1060 of the
<PAGE> Page 85
Code, determining Purchaser's cost basis and Seller's amount realized, and
for all other relevant federal and state tax purposes.
Section 10.12 FEES AND EXPENSES. Each of Seller, Triarc and Purchaser
shall pay its own fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including the fees,
costs and expenses of its financial advisors, accountants and counsel.
Notwithstanding the foregoing:
(a) If Seller and Triarc give notice of the termination of this
Agreement pursuant to Section 8.1(e), Seller shall pay to Purchaser a
termination fee of seven million five hundred thousand dollars ($7,500,000)
plus all of Purchaser's reasonable fees, costs and expenses (including, but
not limited to, fees, costs and expenses of its counsel, accountants,
financial advisors and lenders and all printer costs and expenses
associated with Purchaser's proposed financing), which fees, costs and
expenses shall not exceed in the aggregate two million five hundred
thousand dollars ($2,500,000). Such fee shall be paid within two (2)
business days following the giving of such notice by Seller and Triarc by
wire transfer of immediately available funds to an account designated by
Purchaser;
(b) If Purchaser and Avondale give notice of the termination of this
Agreement pursuant to Section 8.1(f), Purchaser shall pay to Seller a
termination fee of seven million five hundred thousand dollars ($7,500,000)
plus all of Seller's reasonable fees, costs and expenses (including, but
not limited to, fees, costs and expenses of its counsel, accountants and
financial advisors), which fees, costs and expenses shall not exceed in the
aggregate two million five hundred thousand dollars ($2,500,000). Such fee
shall be paid within two (2) business days following the giving of such
notice by Purchaser and Avondale by wire transfer of immediately available
funds to an account designated by Seller;
<PAGE> Page 86
(c) To the extent Seller elects, in its absolute and sole discretion,
to repay all or any portion of the indebtedness (including principal and
accrued interest) outstanding under the CIT Agreement and/or the Factoring
Agreement at the Closing and Seller incurs any prepayment penalties
(including, without limitation, LIBOR breakage costs) in connection
therewith, Seller and Purchaser agree to each pay 50% of any such
prepayment penalties; PROVIDED, HOWEVER, that Purchaser shall not in any
case pay any amount pursuant to this Section 10.12(c) in excess of
$2,900,000; and
(d) All fees, costs and expenses of any judicial, arbitrated or other
official proceedings (other than those contemplated in Section 2.4) brought
relating to any controversy or claim arising out of or relating to this
Agreement and the transactions contemplated hereby shall be paid by the
non-prevailing party (as determined by the judge(s), jury, arbitrator(s) or
the fact finder which rendered a decision in the proceeding) to such
proceeding. Such fees, costs and expenses shall include court costs and
other fees and expenses of the fact finder that heard the proceeding and
the reasonable attorneys', accountants', experts and other out-of-pocket
fees and expenses of the prevailing party incurred in connection with such
proceeding. The parties shall instruct the fact finder in any such
proceeding to make the determination contemplated by this paragraph. If
the fact finder determines that neither party is the prevailing party, each
party will bear its own costs of such proceeding.
Section 10.13 GUARANTEE. Avondale hereby unconditionally and
irrevocably guarantees to Seller the due and punctual payment by Purchaser
of (a) any amounts that are due and payable to Seller pursuant to Sections
2.1, 2.2, 2.5 and Section 10.12 and (b) any amounts that are due and
payable in respect of Purchaser's indemnification obligations under Article
9. Triarc hereby unconditionally and irrevocably guarantees to Purchaser
the due and punctual payment by Seller of (a) any amounts that are due and
payable to Purchaser under Section 2.2,
<PAGE> Page 87
Section 2.5, Section 2.6 and
Section 10.12 and (b) any amounts that are due and payable in respect of
Seller's indemnification obligations under Section 5.8(a) or Article 9.
Each of Avondale and Triarc agrees that its respective obligations
hereunder are absolute and unconditional, irrespective of the validity or
enforceability of or any change and/or amendment to this Agreement, the
institution or absence of any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable
discharge of, or defense to, a guarantor. Each of Avondale and Triarc
hereby unconditionally waives (x) protest, presentment, filing of claims
with the court in the event of bankruptcy, liquidation, reorganization or
similar case or proceeding of Purchaser or Seller, respectively, (y) any
right to require that Seller or Purchaser proceed first against Purchaser
or Seller, respectively, or any other person or pursue any other remedy
available to Seller or Purchaser, respectively, and (z) the right to
consent to any act, omission or delay which might in any manner or to any
extent vary the risk, reduce the liability or otherwise operate as a
discharge of Avondale or Triarc. If Seller or Purchaser, respectively,
elects not to pursue Purchaser or Seller, respectively, or any other person
or pursue any or all remedies available, then upon receipt of payment from
Avondale or Triarc, Seller or Purchaser, respectively, will, to the extent
permitted by applicable law, assign, transfer or otherwise convey all
rights and remedies Seller or Purchaser, respectively, may have relating to
such circumstance or claim forthwith to Avondale or Triarc, respectively.
Section 10.14 COOPERATION ON TAXES. Purchaser and Seller will, in good
faith, provide each other with such cooperation and information as either
of them reasonably may request of the other in filing any tax return,
amended tax return or claim for refund, determining a liability for taxes
or a right to a refund of taxes or conducting any audit or any other
proceeding in respect of taxes. Such cooperation and information by
Purchaser shall include any assistance reasonably requested by Seller
consistent with past practice to determine (i) the tax basis of
<PAGE> Page 88
Seller's assets at the time of Closing and (ii) taxable income for any period
through the Closing Date in a manner similar to the level of assistance
provided by employees of the Business prior to the Closing to the extent
such level of assistance is within the reasonable control of Purchaser.
Each party shall use its reasonable efforts to make its employees and
agents (including its attorneys, accountants and other professionals)
available to the other on a mutually convenient basis to provide
explanations of any documents or information provided hereunder. Purchaser
and Seller will provide such cooperation and assistance at their own
expense, provided, however, that all out of pocket fees and expenses,
including fees and expenses of outside accountants and lawyers, shall be
paid by the party requesting such cooperation and assistance.
Notwithstanding the preceding sentence, if in connection with an
examination by any taxing authority, Purchaser or Seller must expend
extraordinary employee time or other resources to provide such assistance,
the reasonable costs of such extraordinary employee time or other
resources, including a pro rata portion of salaries and benefits, shall be
paid by the party requesting such assistance. Purchaser will retain all
material records or other documents relating to tax matters of Seller for
taxable periods through the Closing Date until six months after the
expiration of the statute of limitations (including any extensions)
applicable to such returns and other documents. Any information pertaining
to Seller's taxes shall be kept confidential by Purchaser.
Upon the expiration of any statute of limitations (including any
extensions), with respect to a taxable period, Purchaser shall offer to
provide to Seller all records with respect to such period before destroying
such records. Purchaser will comply with the terms of the record retention
agreement executed between Seller and the Internal Revenue Service attached
hereto as EXHIBIT H.
Section 10.15 KNOWLEDGE. For purposes of this Agreement, "knowledge"
as of any date that a representation and warranty is given by any party
hereto shall mean the "actual
<PAGE> Page 89
knowledge" (i) with respect to Seller, the
management of Seller at the level of vice president and above and all of
the plant managers of Seller as of such date, and (ii) with respect to
Triarc, the management at the level of executive vice president and above
as of such date, and "knows" has a correlative meaning.
<PAGE> Page 90
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the date first above written.
AVONDALE MILLS, INC.
By: /S/ JACK R. ALTHERR, JR.
__________________________
Title: Vice President and CFO
AVONDALE INCORPORATED
By: /S/ JACK R. ALTHERR, JR.
__________________________
Title: Vice President and CFO
GRANITEVILLE COMPANY
By: /S/ JOHN BARNES
Title: Executive Vice President and CFO
TRIARC COMPANIES, INC.
By: /S/ BRIAN L. SCHORR
Title: Executive Vice President and General Counsel
<PAGE>
SUMMARY OF OMITTED SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.3(b) - Excluded Real Property
Schedule 1.3(m) - Other Excluded Assets
Schedule 1.4 - Liabilities assumed by the Buyer
Schedule 3.1 - Jurisdictions in which Seller is qualified to do
business
Schedule 3.3 - Governmental and regulatory consents of Seller
Schedule 3.4 - Ownership interests held by Seller in other
corporations
Schedule 3.5(a)(i) - Real Property
Schedule 3.5(a)(ii) - Liens on Real Property
Schedule 3.5(a)(iii) - Exceptions to possession of Real Property and
improvements
Schedule 3.5(a)(iv) - Structural defects of buildings on Real Property
Schedule 3.5(a)(v) - Real property sold, assigned, transferred or
otherwise disposed of by Seller after July 30,
1995
Schedule 3.5(b)(i) - Real Property Leases
Schedule 3.5(b)(ii) - Leased Property held by employees
Schedule 3.5(c)(i) - Detailed Fixed Asset Ledger of the Business
Schedule 3.5(c)(ii) - Personal Property held by employees
Schedule 3.5(d)(i) - Title exceptions to the Assets
Schedule 3.5(d)(ii) - Defects in production equipment
Schedule 3.5(d)(iii) - Assets owned by third parties which are located on
premises of Seller
Schedule 3.5(g) - Third party options to acquire any of Seller's
property
Schedule 3.6 - Assets excluded from the sale of assets reflected
on financial statements
Schedule 3.7 - Certain liabilities and obligations of Seller
involving affecting Seller's business
Schedule 3.8(b) - Certain changes since December 31, 1995
Schedule 3.9 - Legal proceedings
Schedule 3.10(i) - Licenses
Schedule 3.10(ii) - OSHA
Schedule 3.11(i) - Seller Contracts
Schedule 3.11(ii) - Defaults
Schedule 3.12 - Taxes
Schedule 3.13 - Officers and employees
Schedule 3.14 - Seller Employee Benefit Plans
Schedule 3.15 - Labor Relations
Schedule 3.16 - Insurance
Schedule 3.17 - Environmental matters
Schedule 3.17(f) - Additional environmental matters
Schedule 3.18 - Intellectual Property
Schedule 3.19 - Transactions with Affiliates
Schedule 3.21 - Bank Accounts
Schedule 4.3 - Governmental and regulatory consents of Purchaser
Schedule 6.2(e) - Purchaser's debt and equity investors
Schedule 6.2(f) - Required Consents
Schedule 9.1(i) - Indemnification
EXHIBITS
Exhibit AA July 30 Balance Sheet of Seller
Exhibit A Form of Statement of Net Assets
Exhibit B Form of Legal Opinion of The McNair Law Firm, P.A.
Exhibit C Form of Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
Exhibit D Supply Agreement - This exhibit is not being omitted and follows
this summary list
Exhibit E Form of Legal Opinion of King & Spalding
Exhibit F Form of Legal Opinion of Wyche, Burgess, Freeman & Parham
Exhibit G Form of Assumption Agreement
Exhibit H Records Retention Agreement
The Registrant hereby agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange Commission
upon its request.
<PAGE>
EXHIBIT D
EXCEPT TO THE EXTENT THAT THE UNITED STATES ARBITRATION ACT APPLIES, THIS
AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO CHAPTER 48 OF TITLE 15 OF
THE CODE OF THE LAWS OF SOUTH CAROLINA.
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT ("Agreement") is made and entered into
this 31st day of March, 1996, by and between AVONDALE MILLS, INC., an
Alabama corporation ("Mills"), and C.H. PATRICK & CO., INC., a South
Carolina corporation ("Seller").
W I T N E S S E T H:
WHEREAS, Mills, Avondale Incorporated, of which Mills is a
wholly owned subsidiary ("Avondale"), Triarc Companies, Inc. and
Graniteville Company ("Graniteville") intend to enter into an Asset
Purchase Agreement (the "Purchase Agreement"), pursuant to which
Graniteville will agree to sell to Mills substantially all of
Graniteville's textile assets and business;
WHEREAS, the execution of this Agreement is a condition to the
consummation of the transactions contemplated by the Purchase Agreement
(the "Closing"); and
WHEREAS, the parties have executed this Agreement as of the
date hereof, but recognize that this Agreement shall not be effective
until the Closing;
WHEREAS, Mills wishes to grant to Seller the opportunity to
sell to Mills and its Affiliates (as defined below) (collectively,
"Buyer") the textile dyes and chemicals purchased by Buyer during the
term of this Agreement, all in accordance with the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual promises and agreements contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
"Affiliate(s)" shall mean with respect to any entity, any
corporations, partnerships or other entities that, directly or
indirectly, are controlled by, control or are under common control with
such entity; provided that with respect to Mills, the term "Affiliate"
shall not include any corporation, partnership or other entity other than
Avondale that (i) directly or indirectly
<PAGE>
controls Mills and (ii) is not directly or indirectly controlled by
Avondale or G. Stephen Felker, members of his immediate family, his or
their heirs or representatives or any trusts established for their benefit
(collectively, "Felker"). The word "control", with respect to a person,
shall mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such person, whether
through the owning of voting securities, contract or otherwise.
"Business Day" shall mean any day other than a Saturday, Sunday
or day on which banks are authorized to be closed under the laws of the
State of South Carolina.
**** Confidential treatment is being requested for the blocked portions. ****
"Prime Rate", as of the date of determination, shall mean the
"Prime Rate" as published in the "Money Rates" table of The Wall Street
Journal on the Business Day immediately preceding such date.
**** Confidential treatment is being requested for the blocked portions.****
<PAGE>
"Purchase Order" shall mean, at any time, the form of purchase
order then generally utilized by Buyer for purchases of Products, as such
form is provided to Seller from time to time. The initial form of
Purchase Order is attached hereto as Exhibit B.
"Qualified Supplier" shall mean, with respect to any particular
Product that is included in a Bid Package, any company or other entity
other than Buyer that (i) provides, or is able to provide, such Product
in accordance with the Specifications therefor, (ii) has appropriate
production and/or delivery capacity (as applicable) and resources to
provide the amount of such Product to Buyer in accordance with the
requirements of the Bid Package and (iii) has previously supplied such
Product to Buyer or Graniteville or has provided a sample of such Product
to Buyer that has completed all plant trials to Buyer's reasonable
satisfaction prior to the Deadline Date (as defined below) set forth in
the Bid Package.
"Specifications" shall mean the written specifications and
standards for Products as established from time to time by Buyer and made
available to its potential suppliers.
ARTICLE 2
PURCHASE AND SALE OF PRODUCTS
**** Confidential treatment is being requested for the blocked portions.****
<PAGE>
**** Confidential treatment is being requested for the blocked portions.****
<PAGE>
2.2 Purchase Order. Not later than five (5) Business Days
after Seller makes a Low Bid or a Last Bid. Buyer shall submit a
Purchase Order to Seller for the required portion of the Product(s) that
were the subject of such Low Bid or Last Bid. The Purchase Order shall
be subject to any modifications set forth in the Bid Package, the Low Bid
and/or the Lowest Price Notice. All purchases and sales of Products
between Buyer and Seller shall be subject to the terms and conditions of
this Agreement, such Purchase Orders and applicable law.
**** Confidential treatment is being requested for the blocked portions.****
2.5 Current Purchases. Effective upon the Closing, all then-
existing purchase orders and other agreements (if any) between Seller and
Graniteville that are assumed by Mills pursuant to the Purchase Agreement
will be terminated without any further action by the parties.
Notwithstanding the foregoing, until such time as Buyer has completed the
initial bid process set forth in Section 2.1 with respect to a Product
that has been supplied by Seller to Graniteville during the past six
months, Buyer will continue to purchase the requirements of the former
Graniteville operations for such Product from Seller on the same terms
and conditions on which such Product was most recently supplied to
Graniteville by Seller.
**** Confidential treatment is being requested for the blocked portions.****
<PAGE>
**** Confidential treatment is being requested for the blocked portions.****
2.7 Periodic Reporting. On or prior to January 31 and July 31
of each year during the term of this Agreement, Mills shall prepare and
submit to Seller a statement setting forth (i) the quantity of each
Product delivered to Buyer by Seller during the approximately six-month
period ending on the last day of Buyer's fiscal accounting period ending
closest to the immediately preceding December 31 or June 30 (as the case
may be) and (ii) the quantity of each Product delivered to Buyer by all
suppliers (including Seller) during such approximately six-month period;
provided that the first such report shall be delivered to Seller on or
prior to January 31, 1997, with respect to the fiscal accounting period
ending closest to December 31, 1996. The quantities on such statement
shall be expressed in dollars and pounds/gallons with respect to those
Products which Seller has supplied to Buyer during the applicable period
and in pounds/gallons only for all other Products delivered to Buyer
during such period. Such statement shall be certified as accurate and
correct by the chief financial officer of Mills and shall be accompanied
by a certificate signed by the chief financial officer of Mills that to
this knowledge and belief (except as expressly described in such
certificate) all purchases of Products during such six-month period from
Seller and any other supplier have complied in all material respects with
Section 2.3 hereof. The exceptions identified on such statement will not
operate as a waiver by Seller of any of its rights under this Agreement.
2.8 Qualified Supplier. Buyer agrees that, as of the date
hereof, Seller is a Qualified Supplier of each of the Products listed on
Exhibit C.
**** Confidential treatment is being requested for the blocked portions.****
2.10 Existing Commitments. Buyer represents to Seller that
Exhibit D sets forth a complete and correct list of all existing
commitments by Buyer of longer than one month's
<PAGE>
duration for the purchase of Products, and, at the Closing, Buyer shall
deliver a revision of Exhibit D to Seller that is true and correct
as of the date of Closing and not in violation of Section 5.15 of the
Purchase Agreement.
2.11 Change in Specifications. If Buyer intends to change the
Specifications of any Product as to which Seller is a Qualified Supplier,
Buyer will use its good faith reasonable efforts to give Seller notice of
such change sufficiently in advance of Buyer's next purchase of such
Product so as to permit Seller a reasonable opportunity to complete any
sampling and plant trial procedures prior to the commencement of the bid
process for such purchase, provided that Buyer will not be required to
delay any bid process if such delay would have more than an insignificant
adverse effect on Buyer's business.
ARTICLE 3
TERM AND TERMINATION; REMEDIES
3.1 Term. The term of this Agreement shall commence on the
date of the Closing and continue until the tenth anniversary of the
Closing, unless earlier terminated pursuant to Section 3.2 below.
3.2 Termination.
(a) This Agreement shall terminate on June 1, 1996, if the
Closing has not occurred prior to such date, or, if earlier, upon the
termination of the Purchase Agreement.
(b) Mills shall have the right to terminate this Agreement in
the event of a pattern (a "Pattern") of repeated, material failures by
Seller to satisfy its obligations with respect to delivery schedules,
Product Specifications or any other material terms of any of the material
terms of the agreements between Buyer and Seller with respect to the
supply of Products (each such material failure being referred to herein
as a "Material Breach"). Any termination of this Agreement by Mills
pursuant to this Section 3.2(a) must comply with the following
procedures:
(i) Buyer must have given written notice (the "Initial
Notice") to Seller specifying in reasonable detail one or more
Material Breaches.
(ii) Within one year following the giving of the Initial
Notice, another Material Breach must have occurred and,
promptly thereafter, Buyer must have provide Seller with notice
(the "Second Notice") specifying in reasonable detail such
Material Breach and stating Buyer's determination that a
Pattern has occurred.
(iii)If Seller does not give Buyer notice of its objection
to such determination within fifteen (15) days following the
Second Notice and another
<PAGE>
Material Breach occurs within two (2)
years following the Second Notice, Buyer will have the right to
terminate this Agreement and all then-existing purchase orders
and other agreements between Buyer and Seller relating to the
Products without any further liability (other than for payment
of outstanding invoices).
(iv) If Seller gives such notice of its objection within
such 15-day period, the issue as to whether a Pattern has
occurred will be submitted to arbitration pursuant to Section
5.12. If the arbitrators determine that a Pattern has
occurred, Buyer will have the right to terminate this Agreement
and all then-existing purchase orders and other agreements
between Buyer and Seller relating to the Products without any
further liability (other than for payment of outstanding
invoices) if another Material Breach occurs at any time during
the two-year period following the Second Notice.
(c) Termination under this Section 3.2 will not be deemed a
waiver of any right or remedy either party may have for breach hereunder.
3.3 Specific Performance. In the event of a breach of this
Agreement, the aggrieved party shall be entitled to seek specific
performance or other equitable relief in addition to any other remedies
that may be available to such party.
3.4 Damages. Notwithstanding any remedy otherwise available
to Seller, if Mills willfully and in bad faith materially breaches its
obligations under or willfully and in bad faith terminates this Agreement
at a time when Mills is not controlled, directly or indirectly, by
Felker, Mills shall pay to Seller an amount equal to treble damages with
respect to any damages suffered or incurred by Seller as a result of any
such breach.
ARTICLE 4
CONFIDENTIALITY
4.1 Confidential Information. In the performance of their
respective obligations under this Agreement, Buyer and Seller may
disclose to each other certain confidential and proprietary information
relating to their respective businesses ("Confidential Information").
All information exchanged by the parties under this Agreement shall be
considered Confidential Information unless it is subject to any of the
exceptions in Section 4.3.
4.2. Non-Disclosure. Each recipient of Confidential
Information agrees that it shall:
(a) make no use of any Confidential Information belonging to
the other except as necessary for the performance of its
obligations under this Agreement;
<PAGE>
(b) not disclose to third parties any of the Confidential
Information belonging to the other without the prior
written consent of the other party; and
(c) take such precautions as it normally takes with its own
confidential and proprietary information to prevent
disclosure of Confidential Information to third parties.
4.3 Exceptions. Notwithstanding any of the foregoing, the
obligations under Section 4.2 shall not apply to:
(a) any information which at the time of disclosure is
publicly available or public knowledge;
(b) any information which, after disclosure, lawfully becomes
public knowledge through publication or otherwise, but
through no fault of the party hereto who received such
information;
(c) any information which the receiving party possess at the
time of disclosure of the Confidential Information and
which was not acquired, directly or indirectly, from the
other party; and
(d) any information acquired from a third party who has a
right to disclose such information.
ARTICLE 5
MISCELLANEOUS
5.1 Force Majeure. Neither Buyer nor Seller shall be
responsible or liable to the other for failure or delay in performance of
this Agreement due to war, fire, accident or other casualty, or any labor
disturbance or act of God or the public enemy, or any other contingency
beyond such party's reasonable control ("Force Majeure Event"). In
addition, in the event of the applicability of this Section 5.1, the
party affected by such Force Majeure Event shall use all commercially
reasonable efforts to eliminate, cure and overcome any of such causes and
resume performance of its obligations.
5.2 Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of South
Carolina.
5.3 Severability. Should any part of this Agreement or any of
the provisions hereof for any reason be declared to be invalid, such
decision or determination shall not in any way affect the validity of the
remaining portions of this Agreement, all of which shall remain in
<PAGE>
full force and effect as if the portion declared to be invalid had not been
contained herein at the time of the execution of this Agreement.
5.4 Headings; Number. The subject headings of this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of its provisions. Whenever the
context so requires, the singular shall include the plural and the plural
shall include the singular.
5.5 Survival of Terms. Article 4 shall survive the expiration
or termination of this Agreement.
5.6 No Rights of Offset. Neither Buyer nor Seller nor any of
Seller's respective Affiliates shall be entitled to offset any rights
under the Purchase Agreement against any obligations under this
Agreement.
5.7 Assignment. This Agreement shall be binding on, and shall
inure to the benefit of, Mills and Seller and their respective successors
and permitted assigns. Except as provided in this Section 5.7 or by
operation of law, neither Mills nor Seller shall be permitted to assign
their respective rights or obligations under this Agreement without the
express written consent of the other party. A change in control of a
party hereto shall not be deemed an assignment and shall not in any way
affect the parties' obligations hereunder. Notwithstanding the
foregoing, Seller shall be permitted (i) to assign all of its rights and
obligations under this Agreement to any acquiror (by purchase, merger or
otherwise) of all or substantially all of Seller's assets so long as such
entity delivers to Mills a written assumption agreement signed by such
entity in form reasonably satisfactory to Mills (provided that any such
assignment shall not relieve Seller of its obligations under Section 4)
and (ii) to pledge its rights (but not its obligations) to a bank, bank
holding company or financial institution in connection with any financing
obtained by Seller. In the case of a sale by Mills of all or
substantially all of its assets, Mills will be (i) permitted and required
to assign its rights and obligations hereunder to the purchaser of such
assets and (ii) required to cause such purchaser to execute and deliver
to Seller a written assumption agreement in form reasonably satisfactory
to Seller.
5.8 Entire Agreement. This Agreement constitutes the entire
agreement between Mills and Seller regarding the subject matter hereof,
and supersedes all prior agreements, negotiations or understandings
between them concerning the subject matter thereof.
5.9 Amendments. This Agreement may not be amended,
supplemented or modified except in a writing signed by the parties
hereto.
5.10 Waiver. No waiver of any default hereunder by either
party or any failure to enforce any rights hereunder shall be deemed to
constitute a waiver of any subsequent default with respect to the same or
any other provision hereof.
<PAGE>
5.11 Notices. Any notice required or permitted to be given
hereunder shall be made in writing and shall be given to the party to
receive such notice by (i) hand delivery, (ii) first-class registered or
certified mail, postage prepaid, return receipt requested, (iii)
overnight courier service, postage prepaid (iv) telecopy with evidence of
confirmation of transmission in each case at the address or telecopy
number set forth below:
To Seller: C. H. Patrick & Co., Inc.
200 Tanner Drive
Greenville, South Carolina 29687
Attention: Thomas J. Reardon
Telefax No. (864) 244-3090
If provided other than under Triarc Companies, Inc.
Section 2.1, with a copy to: 900 Third Avenue
31st Floor
New York, New York 10022
Attention: Brian L. Schorr
Telefax No. (212) 230-3216
To Buyer under Section 2.1: Avondale Mills, Inc.
900 Avondale Avenue
Sylacauga, Alabama 35150
Attention: Director of Purchasing
Telefax No. (205) 249-1317
To Mills or Buyer under all other Sections: Avondale Incorporated
506 South Broad Street
Monroe, Georgia 35150
Attention: G. Stephen Felker
Telefax No. (770) 267-2543
If provided other than under King & Spalding
Section 2.1, with a copy to: 191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: Michael J. Egan III
Telefax No. (404) 572-5145
All notices shall be deemed to have been given five (5) days after the
date of mailing thereof or on receipt, which is earlier. Either party
may change the information specified herein for the receipt of notices by
giving written notice to other party.
<PAGE>
5.12 Arbitration.
(a) Any controversy, claim or question of interpretation
arising out of or relating to this Agreement or the breach thereof shall
be finally settled by arbitration in the City of Charlotte, North
Carolina under the then-effective Commercial Arbitration Rules of the
American Arbitration Association as modified by this Agreement, and
judgment on the award rendered by the arbitrators may be final and
binding on the parties and not subject to further appeal. Such
arbitration can be initiated by written notice by either party to the
other party, which notice shall identify the claimant's selected
arbitrator. The party receiving such notice shall identify its
arbitrator within five (5) Business Days following its receipt of such
notice. The arbitrator selected by the claimant and the arbitrator
selected by the respondent shall, within five (5) Business Days of their
appointment, select a third neutral arbitrator. In the event that they
are unable to do so, either party may request the American Arbitration
Association to appoint the third neutral arbitrator. The arbitrators
shall have the authority to award any remedy or relief that a court in
South Carolina could order or grant, including, without limitation,
specific performance of any obligation created under this agreement, the
awarding of punitive damages, the issuance of injunctive or other
provisional relief, or the imposition of sanctions for abuse or
frustration of the arbitration process. The arbitration awards will be
in writing and specify the factual and legal basis for the award.
(b) It is the intent of the parties that any arbitration shall
be concluded as quickly as practicable (but, barring extraordinary
circumstances in any event not more than twenty (20) days after the date
the third arbitrator is selected). Unless the parties otherwise agree,
once commenced, the hearing on the disputed matters shall be held four
days a week until concluded with each hearing date to begin at 9:00 a.m.
and to conclude at 5:00 p.m. The arbitrators shall use their best
efforts to issue the final award or awards within a period of five (5)
Business Days after closure of the proceedings. Failure of the
arbitrators to meet the time limits of this Section 5.12(b) shall not be
a basis for challenging the award.
(c) The arbitrators shall instruct the non-prevailing party to
pay all costs of the proceedings, including the fees and expenses of the
arbitrators and the reasonable attorneys' fees and expenses of the
prevailing party. If the arbitrators determine that there is not a
prevailing party, each party shall be instructed to bear its own costs
and to pay one-half of the fees and expenses of the arbitrators.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed as of the date first above written.
AVONDALE MILLS, INC.
By: /S/ JACK R. ALTHERR, JR.
-------------------------------
Name: Jack R. Altherr, Jr.
Title: Vice President & CFO
C.H. PATRICK & CO., INC.
By: /S/ JOHN L. BARNES, JR.
--------------------------------
Name: John L. Barnes, Jr.
Title: Vice President
<PAGE>
EXHIBIT A
Products Utilized by Buyer
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
EXHIBIT B
Form of Purchase Order
<PAGE>
EXHIBIT C
Current Products of Seller
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
<PAGE>
EXHIBIT D
Existing Commitments of Buyer
<PAGE>
****Confidential treatment is being requested for the blocked portions.****
EXHIBIT 99.1
PRESS RELEASE
CONTACT: Martin M. Shea For Immediate Release
Triarc Companies, Inc.
212/230-3030
TRIARC ENTERS INTO DEFINITIVE AGREEMENT TO SELL GRANITEVILLE TO
AVONDALE FOR $255 MILLION IN CASH
NEW YORK, New York, April 1, 1996 -- Triarc Companies, Inc. (NYSE:TRY)
announced today that it has entered into a definitive agreement to sell its
Graniteville textile business to Avondale Mills, Inc. for $255 million in
cash, subject to certain post-closing adjustments, and expects to close
the sale during the second quarter. Consummation of the closing is subject
to customary closing conditions. Triarc also announced that it had
received early termination of the Hart-Scott-Rodino Antitrust Improvements
Act waiting period. C.H. Patrick & Co., Inc., Triarc's dyes and specialty
chemical subsidiary, and certain other excluded assets are not part of
the sale. As part of the sale, Avondale will assume all liabilities relating
to the textile business, other than income tax liabilities, Graniteville's
long-term debt (which will be repaid at the closing) and certain other
specified liabilities.
<PAGE>
In connection with the Graniteville sale, Avondale and C.H. Patrick have
entered into a 10-year supply agreement, pursuant to which C.H. Patrick
will have the right to supply to the combined Graniteville/Avondale textile
operations certain of its dyes and chemicals. The supply agreement will
become effective upon the closing of the Graniteville sale.
"We are very pleased that our associates at Graniteville will have the
opportunity to become an important part of Avondale," said Nelson Peltz,
chairman and chief executive officer of Triarc Companies, Inc.
* * *
Through its four core businesses, Triarc Companies, Inc. is involved in
restaurants (Arby's, Inc.), beverages (Royal Crown Company, Inc. and Mistic
Brands, Inc.), textiles (Graniteville Company and C.H. Patrick & Co., Inc.)
and liquefied petroleum gas (National Propane Corporation). Triarc Companies,
Inc. currently has annual revenues of more than $1 billion.
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