UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 1997
TRIARC COMPANIES, INC.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-2207 38-0471180
----------------- -------------- --------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation of
organization)
280 Park Avenue
New York, NY 10017
----------------------------------------------- -----------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
-------------------------------------------- -----------------
(Former name or former address, (Zip Code)
if changed since last report)
Page 1 of 4 Pages
Exhibit Index appears on Page 4
1
<PAGE>
Item 5. Other Events
On March 27, 1997, Triarc announced that it had entered into a
definitive agreement to acquire Snapple Beverage Corp. from The Quaker Oats
Company for $300 million in cash, subject to certain post-closing adjustments.
The acquisition, which is expected to be consummated during the second quarter
of 1997, is subject to customary closing conditions, including Hart-Scott-
Rodino antitrust clearance. Snapple, with its ready-to-drink teas and juice
drinks, is a market leader in the premium beverage category. Snapple had 1996
sales of approximately $550 million.
A copy of the press release is being filed herewith as an exhibit
hereto and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Filed herewith are certain agreements and documents entered into by or
otherwise relating to the Registrant and its subsidiaries.
(c) Exhibits
2.1 -- Stock Purchase Agreement dated as of March 27, 1997 between
The Quaker Oats Company and Triarc.
3.1 -- By-laws of Triarc, as currently in effect.
4.1 -- Consent, Waiver and Amendment dated November 5, 1996 among
National Propane, L.P. and each of the Purchasers under the Note
Purchase Agreement, dated as of June 26, 1996 (the "Note Purchase
Agreement") among National Propane, L.P. and each of the
Purchasers thereunder.
4.2 -- Second Consent, Waiver and Amendment dated January 14, 1997
among National Propane, L.P. and each of the Purchasers under the
Note Purchase Agreement.
4.3 -- Credit Agreement dated as of May 16,1996 between: C. H. Patrick &
Co., Inc., the Registrant, each of the lenders party thereto,
Internationale Nederlanden (U.S.) Capital Corporation, as agent,
and The First National Bank of Boston, as co-agent.
4.4 -- Third Amendment Agreement dated as of December 30, 1996 among
Mistic Brands, Inc., The Chase Manhattan Bank, N.A., as agent,
and the other lenders party thereto.
10.1 -- Triarc's 1993 Equity Participation Plan, as currently in effect.
10.2 --Form of Non-Incentive Stock Option Agreement under Triarc's 1993
Equity Participation Plan.
2
<PAGE>
10.3 --Employment Agreement dated as of April 29, 1996 between Triarc
and John L. Barnes, Jr.
99.1 --Press release dated March 27, 1997.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized.
TRIARC COMPANIES, INC.
By: Brian L. Schorr
---------------------------------------------
Brian L. Schorr, Executive Vice President
Dated: March 31, 1997
3
<PAGE>
EXHIBIT
Exhibit
No. Description Page No.
2.1 -- Stock Purchase Agreement dated as of March 27, 1997
between The Quaker Oats Company and Triarc.
3.1 -- By-laws of Triarc, as currently in effect.
4.1 -- Consent, Waiver and Amendment dated November 5,
1996 among National Propane, L.P. and each of the
Purchasers under the Note Purchase Agreement, dated
as of June 26, 1996 (the "Note Purchase Agreement")
among National Propane, L.P. and each of the
Purchasers thereunder.
4.2 -- Second Consent, Waiver and Amendment dated
January 14, 1997 among National Propane, L.P. and
each of the Purchasers under the Note Purchase
Agreement.
4.3 -- Credit Agreement dated as of May 16,1996 between:
C.H. Patrick & Co., Inc., the Registrant, each of the
lenders party thereto, Internationale Nederlanden
(U.S.) Capital Corporation, as agent, and The First
National Bank of Boston, as co-agent.
4.4 -- Third Amendment Agreement dated as of December
30, 1996 among Mistic Brands, Inc., The Chase
Manhattan Bank, N.A., as agent, and the other lenders
party thereto.
10.1 -- Triarc's 1993 Equity Participation Plan, as currently in
effect.
10.2 -- Form of Non-Incentive Stock Option Agreement under
Triarc's 1993 Equity Participation Plan.
10.3 -- Employment Agreement dated as of April 29, 1996
between Triarc and John L. Barnes, Jr.
99.1 -- Press release dated March 27, 1997.
L:\LEGAL\TRY-S01\SEC\8-K.97\TRIARC\03-00-96\TRI-8K.WP5
4
<PAGE>
EXHIBIT 99.1
PRESS RELEASE
CONTACT: MARTIN M. SHEA FOR IMMEDIATE RELEASE
TRIARC COMPANIES, INC.
212/451-3030
TRIARC TO ACQUIRE SNAPPLE BEVERAGES
NEW YORK, New York, March 27, 1997 -- Triarc Companies, Inc. (NYSE:TRY),
announced today that it has entered into a definitive agreement to acquire
Snapple Beverage Corp. from The Quaker Oats Company for $300 million in cash,
subject to certain post-closing adjustments. The acquisition is expected to be
consummated during the second quarter of 1997, subject to customary closing
conditions, including Hart-Scott-Rodino antitrust clearance.
Snapple, with its ready-to-drink teas and juice drinks, is a market leader in
the premium beverage category. Snapple had 1996 sales of approximately $550
million. Triarc, which owns Mistic Brands, will operate Snapple and Mistic under
the leadership of Michael Weinstein, chief executive officer of the Triarc
Beverage Group. This transaction will transform the Triarc Beverage Group into a
leader in the premium beverage category.
"We are very proud to be the future owners of a brand as great as Snapple and
believe that our strong management team led by Triarc Beverage Group's Mike
Weinstein will be able to move our beverage business forward," said Nelson
Peltz, chairman and chief executive officer of Triarc. "Our strategy at Triarc
revolves around our ability to acquire brands and combine them under talented
management to deliver value to our shareholders. The acquisition of Snapple
beverages fits very well into that overall objective," continued Peltz.
<PAGE>
"Through the combination of these great brands, we will have products which will
enjoy premium status in their various distribution channels. This top level
positioning should strengthen our relationship with the independent beverage
distribution system," said Peter W. May, president and chief operating officer
of Triarc. According to Mike Weinstein, "Snapple defines the premium beverage
category, and we are excited about this acquisition due to Snapple's strong
consumer equity and broad synergy potential with our Mistic Brands."
Through its four businesses, beverages (Royal Crown Company, Mistic Brands,
Inc.), restaurants (Arby's, Inc.), liquefied petroleum gas (National Propane),
and specialty dyes and chemicals (C.H. Patrick), Triarc Companies currently has
annual revenues of nearly $1 billion.
# # #
<PAGE>
Exhibit 2.1
STOCK PURCHASE AGREEMENT
BETWEEN
THE QUAKER OATS COMPANY
AND
TRIARC COMPANIES, INC.
Dated as of March 27, 1997
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND TERMS
1.1 Specific Definitions....................................... 1
1.2 Terms Defined Elsewhere in the Agreement................... 6
1.3 Other Definitional Provisions.............................. 7
1.4 References to Time......................................... 8
ARTICLE II
PURCHASE AND SALE OF THE SHARES
2.1 Purchase and Sale of the Shares............................ 8
2.2 Purchase Price............................................. 8
2.3 Closing.................................................... 9
2.4 Deliveries by Acquiror..................................... 9
2.5 Deliveries by Seller....................................... 9
2.6 Adjustment to Purchase Price............................... 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization and Qualification............................. 11
3.2 Capitalization; Subsidiaries............................... 11
3.3 Corporate Authorization.................................... 12
3.4 Consents and Approvals..................................... 13
3.5 Non-Contravention.......................................... 13
3.6 Binding Effect............................................. 14
3.7 Financial Statements; Absence of Certain
Changes.................................................... 14
3.8 Litigation................................................. 15
3.9 Taxes...................................................... 16
3.10 Employee Benefits.......................................... 18
3.11 Compliance with Laws....................................... 19
3.12 Intellectual Property...................................... 19
3.13 Contracts.................................................. 19
3.14 Brokers.................................................... 20
3.15 Title to Properties........................................ 20
3.16 Environmental Matters...................................... 21
3.17 Labor Relations............................................ 21
3.18 No Other Representations or Warranties..................... 21
3.19 Disclosure Schedule........................................ 22
3.20 Standard................................................... 22
i
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Section Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.1 Organization and Qualification............................. 23
4.2 Corporate Authorization.................................... 23
4.3 Consents and Approvals..................................... 23
4.4 Non-Contravention.......................................... 24
4.5 Binding Effect............................................. 24
4.6 Brokers.................................................... 24
4.7 Purchase for Investment.................................... 25
4.8 Financial Capability....................................... 25
4.9 No Other Representations or Warranties..................... 25
ARTICLE V
COVENANTS
5.1 Conduct of Snapple Business................................ 25
5.2 Access..................................................... 27
5.3 Reasonable Best Efforts.................................... 27
5.4 Antitrust Notification..................................... 29
5.5 Supplemental Disclosure.................................... 29
5.6 Further Assurances......................................... 30
5.7 Announcements.............................................. 30
5.8 Employee Matters........................................... 31
5.9 Preservation of Records.................................... 33
5.10 Other Agreements........................................... 33
5.11 Financial Statements....................................... 34
5.12 Related Party Payments..................................... 34
5.13 Continental PET............................................ 35
5.14 Use of Cash................................................ 35
5.15 Payment of Proceeds........................................ 35
5.16 Insurance.................................................. 35
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Acquiror and
Seller..................................................... 37
6.2 Conditions to the Obligations of Acquiror.................. 37
6.3 Conditions to the Obligations of Seller.................... 38
ARTICLE VII
SURVIVAL; GENERAL INDEMNIFICATION
7.1 Survival................................................... 39
ii
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Section Page
7.2 Indemnification by Acquiror................................ 39
7.3 Indemnification by Seller.................................. 40
7.4 Procedure for Indemnification.............................. 40
7.5 Characterization of Indemnification Payments............... 43
7.6 Computation of Losses; Disputes............................ 43
ARTICLE VIII
TAX MATTERS; TAX INDEMNIFICATION
8.1 Tax Indemnification........................................ 44
8.2 No Tax Elections........................................... 45
8.3 Preparation of Tax Returns; Payment of Taxes............... 45
8.4 Cooperation with Respect to Tax Returns. .................. 48
8.5 Tax Audits................................................. 48
8.6 Refund Claims.............................................. 49
8.7 Transfer Taxes............................................. 50
8.8 Other Tax Matters.......................................... 50
8.9 Disputes................................................... 50
ARTICLE IX
TERMINATION
9.1 Termination................................................ 51
9.2 Effect of Termination...................................... 51
9.3 Termination Fee............................................ 52
ARTICLE X
GENERAL PROVISIONS
10.1 Extension; Waiver.......................................... 52
10.2 Amendment.................................................. 53
10.3 Expenses................................................... 53
10.4 Governing Law.............................................. 53
10.5 Notices.................................................... 53
10.6 Entire Agreement........................................... 54
10.7 Disclosure Schedule........................................ 54
10.8 Headings; References....................................... 55
10.9 Counterparts............................................... 55
10.10 Parties in Interest; Assignment............................ 55
10.11 Severability; Enforcement.................................. 55
10.12 Consent to Jurisdiction.................................... 55
iii
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
EXHIBITS
Exhibit A -- Transition Services Agreement
Exhibit B -- Patent License Agreement
Exhibit C -- Shared Technology License Agreement
Exhibit D -- Brooks Agreement
Exhibit E -- Power Packaging Agreement
Exhibit F -- Assignment and Assumption Agreement
Exhibit G -- Opinion of Seller's Counsel
Exhibit H -- Opinion of Acquiror's Counsel
Exhibit I -- Guaranty Agreement
iv
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 27, 1997, between THE
QUAKER OATS COMPANY, a New Jersey corporation ("Seller"), and TRIARC COMPANIES,
INC., a Delaware corporation ("Acquiror").
W I T N E S S E T H :
WHEREAS, Snapple Beverage Corp., a Delaware corporation ("Snapple"),
is engaged, directly and through its subsidiaries, in the business of producing,
marketing and distributing beverages and other products under the Snapple
trademark and related trademarks and trade names (the "Snapple Business");
WHEREAS, Seller is the owner of 1,000 shares of Common Stock, par
value $1.00 per share (the "Shares"), of Snapple, which Shares constitute all of
the outstanding shares of capital stock of Snapple; and
WHEREAS, Seller desires to sell, transfer and deliver to Acquiror,
and Acquiror desires to purchase from Seller, all of the Shares, on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1 Specific Definitions. For purposes of this
Agreement, the following terms shall have the meanings set
forth below:
"Acquiror" shall have the meaning set forth in the
preamble to this Agreement.
"Affiliate" shall mean, with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such specified Person.
1
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
"Agreed Rate" shall mean the 30-day commercial paper rate published
in the most current issue of Federal Reserve Statistical Release H.15 (Selected
Interest Rates) at the Closing Date and reset at such rate as published at
30-day intervals thereafter.
"Agreement" shall mean this Stock Purchase Agreement, together with
all exhibits and schedules hereto, as the same may be amended or supplemented
from time to time in accordance with the terms hereof.
"Applicable Laws" shall mean, with respect to any Person, all
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority applicable to such Person and its business, properties and assets.
"Base Working Capital Amount" shall mean
$58,000,000.
"Business" shall mean the Snapple Business and any terminated,
divested or discontinued business or operations that at the time of termination,
divestiture or discontinuation was conducted by any of the Snapple Companies or
its predecessors.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which banks located in New York City are authorized or required by
law to close.
"Cash Equivalents" shall mean cash on hand, all other cash in any
bank, savings or similar accounts at any financial institution, and checks,
drafts and similar instruments and any publicly traded stocks, bonds or similar
marketable securities, certificates of deposit, commercial paper, eurodollar
deposits and any other cash equivalents held in the name of or for the account
of any of the Snapple Companies.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.).
"Closing" shall mean the closing of the trans-actions contemplated
by this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
2
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
"Confidentiality Agreement" shall mean the Agreement, dated December
4, 1996, between Acquiror and Seller.
"DOJ" shall mean the United States Department of
Justice.
"Employee Arrangements" shall mean all employment and consulting
agreements, and all bonus and other incentive compensation, deferred
compensation, disability, severance, stock award, stock option, stock purchase,
collective bargaining or workers' compensation agreements, plans, programs,
policies and arrangements with respect to the employment or termination of
employment of any employee, officer, director or other Person who is or was
employed by any of the Snapple Companies or primarily in the Snapple Business.
"Employee Benefit Plans" shall mean all "employee benefit plans", as
defined in Section 3(3) of ERISA, which Seller or the Snapple Companies
maintains and in which any employee or former employee employed by the Snapple
Companies or primarily in the Snapple Business participates.
"Encumbrances" shall mean any and all mortgages, security interests,
liens, claims, pledges, restrictions, leases, title exceptions, rights of
others, charges or other encumbrances.
"Environmental Law" shall mean any law, statute, ordinance, rule,
regulation, order, judgment or decree as in effect as of the date of this
Agreement relating to (i) the protection of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface or subsurface land) or (ii) the exposure of Persons (other than Persons
employed by the Snapple Business or the Snapple Companies) to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labelling, protection, release or disposal of, Hazardous Substances, but
excluding any such law, statute, ordinance, rule, regulation, order, judgment or
decree, including common law, (x) governing protection of worker health and
safety or human health (other than exposure of Persons other than Persons
employed by the Snapple Business or the Snapple Companies to Hazardous
Substances), or (y) establishing the basis for a claim for product liability.
3
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Estimated Cash Equivalents" shall mean the amount of Cash
Equivalents set forth on the Estimated Statement.
"Estimated Working Capital" shall mean the amount of Working Capital
set forth on the Estimated Statement.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean generally accepted accounting principles in effect
in the United States of America.
"Governmental Authority" shall mean any foreign, federal, state or
local government, court, agency or commission or other governmental or
regulatory body or authority.
"Hazardous Substances" shall mean any hazardous substances within
the meaning of 101(14) of CERCLA, 42 U.S.C. ss. 9601(14).
"Indemnified Party" shall mean any Person which is seeking
indemnification from an Indemnifying Party pursuant to the provisions of this
Agreement.
"Indemnifying Party" shall mean any party hereto from which any
Indemnified Party is seeking indemnification pursuant to the provisions of this
Agreement.
"Independent Law Firm" shall mean a nationally recognized
independent law firm, jointly selected by the parties; or, if the parties cannot
agree on such law firm, Seller and Acquiror shall each submit the name of a
nationally recognized independent law firm that does not at the time provide,
and has not in the prior two years provided, services to Seller or Acquiror, and
the "Independent Law Firm" shall mean the firm selected by lot from these two
firms.
"IRS" shall mean the United States Internal Revenue Service.
"Knowledge" of Seller or any Snapple Company or any similar phrase
means the actual knowledge of those management employees of Seller identified in
Section 1.1(a) of the Disclosure Schedule, and only with respect to the
4
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
following Snapple personnel, William Barker, Mark Entsminger, Charles Maniscalco
and Michael Schott, after reasonable inquiry.
"Legal Proceedings" shall mean any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or governmental
proceedings.
"Material Adverse Effect" shall mean, with respect to any Person,
any change or effect that is materially adverse to the business of such Person
and its Subsidiaries taken as a whole; provided, however, that Material Adverse
Effect shall exclude any change or effect due to (i) general economic or
industry-wide conditions, including, without limitation, devaluation,
revaluation or decline in value of any foreign currency against the U.S. dollar,
(ii) any continuation of an adverse trend disclosed to Acquiror on or prior to
the date hereof, and (iii) any condition described in the Disclosure Schedule.
"Person" or "person" shall mean and includes any individual,
partnership, joint venture, corporation, association, joint stock company,
trust, unincorporated organization or similar entity.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Shares" shall have the meaning set forth in the recitals to this
Agreement.
"Snapple" shall have the meaning set forth in the recitals to this
Agreement.
"Snapple Business" shall have the meaning set forth in the recitals
to this Agreement.
"Snapple Companies" shall mean Snapple and all of its direct and
indirect Subsidiaries.
"Subsidiary" shall mean, with respect to any Person, (i) each
corporation, partnership, joint venture or other legal entity of which such
Person owns, either directly or indirectly, 50% or more of the stock or other
equity
5
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
interests the holders of which are generally entitled to vote for the election
of the board of directors or similar governing body of such corporation,
partnership, joint venture or other legal entity and (ii) each partnership in
which such Person or another Subsidiary of such Person is the general partner or
otherwise controls such partnership.
"Tax" or "Taxes" shall mean all taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) and shall include any transferee liability in respect of Taxes.
"Tax Returns" shall mean all reports, returns, declaration forms and
statements filed or required to be filed with respect to Taxes.
"Working Capital" shall mean the sum of all inventory and trade
accounts receivable of the Snapple Business conducted worldwide, minus all trade
accounts payable of the Snapple Business conducted worldwide; provided, however,
that Working Capital shall not include intercompany receivables and payables.
"Working Capital Amount" shall mean the Estimated Working Capital
minus the Base Working Capital Amount.
1.2 Terms Defined Elsewhere in the Agreement. For purposes of
this Agreement, the following terms have the meanings set forth in the sections
indicated:
Term Section
Acquiror Indemnified Parties......................................7.3(a)
Asserted Liability................................................7.4(a)
Assigned Contracts...................................................5.3
Assignment and Assumption Agreement.................................5.10
Audited Financial Statements........................................5.11
Brooks Agreement....................................................5.10
Cash.................................................................4.8
Casualty Insurance Claims........................................5.15(a)
6
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Claim Notice......................................................7.4(a)
Closing Date.........................................................2.3
Closing Statement.................................................2.6(a)
Contract............................................................3.13
CPA Firm..........................................................2.6(b)
Deposit...........................................................2.2(a)
Disclosure Schedule.................................................3.19
Escrow Agent......................................................2.2(a)
Escrow Agreement..................................................2.2(a)
Estimated Amount..................................................2.6(c)
Estimated Statement...............................................2.2(c)
Final Amount......................................................2.6(c)
Financial Statements..............................................3.7(a)
HSR Act..............................................................3.4
Independent Accounting Firm..........................................8.9
Insurance Policies...............................................5.15(a)
Losses...............................................................7.2
Notice Period.....................................................7.4(a)
Objection.........................................................2.6(b)
Other Antitrust Regulations..........................................3.4
Patent License Agreement............................................5.10
Power Packaging Agreement...........................................5.10
Purchase Price....................................................2.2(b)
Quaker Facility Co-Pack Agreement...................................5.10
Seller Indemnified Parties...........................................7.2
Shared Technology License Agreement.................................5.10
Snapple Employees.................................................5.8(b)
Snapple Employee Arrangements.....................................5.8(a)
Snapple Employee Benefit Plans....................................5.8(a)
Statement of Assets and Liabilities...............................3.7(a)
SVC.................................................................5.10
Tax Agreement, Consent or Election................................3.9(f)
Tax Ruling........................................................3.9(f)
Transition Services Agreement.......................................5.10
1.3 Other Definitional Provisions. (a) The words "hereof",
"herein", and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
7
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(d) As used in this Agreement, accounting terms which are
specifically defined under GAAP and are not otherwise defined herein shall have
the respective meanings given to them under GAAP.
1.4 References to Time. All references in this Agreement to
times of the day shall be to New York City time.
ARTICLE II
PURCHASE AND SALE OF THE SHARES
2.1 Purchase and Sale of the Shares. On the terms and subject to the
conditions set forth herein, at the Closing, Seller agrees to sell, transfer and
deliver to Acquiror, and Acquiror agrees to purchase from Seller, the Shares.
2.2 Purchase Price. (a) Upon the execution of this Agreement,
Acquiror shall pay to Weil, Gotshal & Manges LLP, in its capacity as escrow
agent (the "Escrow Agent") pursuant to that certain Escrow Agreement, dated as
of the date hereof, among Acquiror, Seller and the Escrow Agent (the "Escrow
Agreement"), by certified check or wire transfer of immediately available funds,
the sum of $20,000,000 (the "Deposit"), which pursuant to the Escrow Agreement
shall either (i) be applied as a deposit on the Purchase Price as provided in
Section 2.4(a), (ii) be applied toward Acquiror's payment obligation pursuant to
Section 9.3, if any, or (iii) be returned to Acquiror in the event that the
Closing does not occur on or before the date set forth in Section 9.1(b) due to
Seller's failure to satisfy the closing conditions set forth in Section 6.2 or
the non-occurrence of any closing condition set forth in Section 6.1.
(b) The purchase price for the Shares shall be $300,000,000 plus
the sum of the Working Capital Amount and the Estimated Cash Equivalents (the
"Purchase Price"), as adjusted pursuant to Section 2.6.
(c) Seller shall prepare and deliver to Acquiror, at least five days
but not more than 30 days immediately preceding the Closing Date, an estimated
statement of Working Capital and Cash Equivalents as of the Closing Date (the
"Estimated Statement").
8
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
2.3 Closing. The Closing shall take place at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 at 10:00 A.M.,
on the later of (a) the second Business Day following the satisfaction or waiver
(by the party entitled to waive the condition) of all conditions to the Closing
set forth in Article VI, or (b) 60 days after the date of this Agreement unless
another date, time or place is agreed to by the parties hereto. The date on
which the Closing occurs is called the "Closing Date".
2.4 Deliveries by Acquiror. At the Closing, Acquiror shall
deliver to Seller the following:
(a) an amount which, when added to the Deposit plus accrued interest
thereon which is paid to Seller pursuant to the Escrow Agreement, will total the
Purchase Price, in immediately available funds by wire transfer to Seller's
account set forth in Section 2.4(a) of the Disclosure Schedule or such other
account designated in writing by Seller not less than two Business Days prior to
the Closing; and
(b) the certificates and other documents to be delivered
pursuant to Section 6.3.
2.5 Deliveries by Seller. At the Closing, Seller shall deliver
to Acquiror the following:
(a) a certificate or certificates representing the Shares,
registered in the name of Acquiror; and
(b) the certificates and other documents to be delivered
pursuant to Section 6.2.
2.6 Adjustment to Purchase Price. (a) Within 60 days following the
Closing Date, Seller shall, at its expense, prepare, or cause to be prepared,
and deliver to Acquiror a statement (the "Closing Statement"), which shall set
forth in reasonable detail the amount of Working Capital and Cash Equivalents as
of the Closing Date. The line items included in the Closing Statement shall be
prepared on a basis consistent with the line items contained in the Statement of
Assets and Liabilities of the Snapple Business as of December 31, 1996 included
in the Financial Statements; provided, however, that the trade accounts payable
reflected on the Closing Statement shall, to the extent reasonably practicable,
reflect the trade accounts
9
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
payable directly attributable to the Snapple Business, consistent with past
practice.
(b) Acquiror shall have 30 days to review the Closing Statement and
to inform Seller in writing of its disagreement (the "Objection") with the
Closing Statement, if any. If Seller does not receive Acquiror's Objection
within such 30-day period, the amount of Working Capital and Cash Equivalents
set forth in the Closing Statement delivered pursuant to Section 2.6(a) shall be
deemed to have been accepted by Acquiror and shall become binding upon Acquiror.
If Acquiror does deliver Acquiror's Objection to Seller, Seller shall then have
30 days to review and respond to Acquiror's Objection. If Seller and Acquiror
are unable to resolve all of their disagreements with respect to the
determination of Working Capital and Cash Equivalents as of the Closing Date
within 10 days following the completion of Seller's review of Acquiror's
Objection, they may refer, at the option of either party, their differences to
an internationally recognized firm of independent public accountants selected
jointly by Seller and Acquiror, who shall, acting as experts and not as
arbitrators, determine only with respect to the differences so submitted,
whether and to what extent, if any, the amount of Working Capital and Cash
Equivalents set forth in the Closing Statement requires adjustment. If Seller
and Acquiror are unable to so select the independent public accountants within
five days of either party requesting such referral, either Acquiror or Seller
may thereafter request that the American Arbitration Association make such
selection (the firm selected by Seller and Acquiror or by the American
Arbitration Association is referred to as the "CPA Firm"). Seller and Acquiror
shall direct the CPA Firm to use its best efforts to render its determination
within 30 days. The CPA Firm's determination shall be conclusive and binding
upon Seller and Acquiror. The fees and disbursements of the CPA Firm shall be
shared equally by Seller and Acquiror. Seller and Acquiror shall make readily
available to the CPA Firm all relevant books and records relating to the Closing
Statement and all other items reasonably requested by the CPA Firm.
(c) If the sum of the amount of Working Capital and Cash Equivalents
as of the Closing Date determined in accordance with the procedures set forth in
this Section 2.6 (the "Final Amount") is less than the sum of the amount of
Working Capital and Cash Equivalents set forth in the Estimated Statement (the
"Estimated Amount"), Seller shall,
10
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
within 10 days following the determination of the Final Amount, pay to Acquiror
an amount in cash equal to such difference, and if the Final Amount is greater
than the Estimated Amount, Acquiror shall, within such 10 days, pay to Seller an
amount in cash equal to such difference.
(d) The amount payable by Seller to Acquiror or from Acquiror to
Seller, as the case may be, under this Section 2.6 shall bear interest at the
Agreed Rate as in effect from time to time, computed from the Closing Date to
the date of payment of such amount and shall be wire transferred to an account
designated by Acquiror or Seller, as the case may be.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller, subject to Sections 3.18, 3.19 and 3.20, hereby represents
and warrants to Acquiror as follows:
3.1 Organization and Qualification. Seller and each Snapple Company
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own and operate its assets and properties and to carry on
its business as currently conducted. Each Snapple Company is duly qualified to
do business and is in good standing in each jurisdiction where the ownership or
operation of its assets and properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing, as the case may be, would not have a Material Adverse Effect with
respect to Snapple.
3.2 Capitalization; Subsidiaries. (a) The authorized capital stock
of Snapple consists of 1,000 shares of Common Stock, par value $1.00 per share,
and 1,000,000 shares of Preferred Stock, par value $0.01 per share. The Shares
constitute the only shares of capital stock of Snapple issued and outstanding.
All of the Shares are duly authorized, validly issued, fully paid and
nonassessable and are owned, of record and beneficially, by Seller, free and
clear of all Encumbrances. Other than pursuant to this Agreement, there are no
outstanding subscriptions, options, warrants, rights, puts, calls, commitments,
or other contracts, arrangements or understandings issued by or
11
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
binding upon any Snapple Company requiring or providing for, and there are no
outstanding debt or equity securities of any Snapple Company which upon the
conversion, exchange or exercise thereof would require or provide for the
issuance, transfer or sale by any Snapple Company of any new or additional
equity interests in Snapple (or any other securities of Snapple which, with
notice, lapse of time or payment of monies, are or would be convertible into or
exercisable or exchangeable for equity interests in Snapple). Upon transfer of
the Shares to Acquiror in accordance with the terms of Article II hereof,
Acquiror will receive valid title to the Shares, free and clear of all
Encumbrances.
(b) Section 3.2(b) of the Disclosure Schedule sets forth the name of
each Subsidiary of Seller which is a Snapple Company and, with respect to each
such Snapple Company, the jurisdiction in which it is incorporated or organized
and, if not a wholly-owned direct or indirect Subsidiary of Snapple, the
percentage owned directly or indirectly by Snapple. All of the issued and
outstanding shares of capital stock or equity interests of each Snapple Company
owned either directly or indirectly by Snapple or by officers and directors of
Snapple as nominees on behalf of any Snapple Company are duly authorized,
validly issued, fully paid and nonassessable and are owned free and clear of all
Encumbrances. Except as set forth in Section 3.2(b) of the Disclosure Schedule,
there is no subscription, option, warrant, right, put, call, contract,
agreement, commitment, understanding or arrangement to which any Snapple Company
is a party with respect to the issuance, sale, delivery or transfer of capital
stock or other equity interests of any Snapple Company.
3.3 Corporate Authorization. Seller has the requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance by Seller of this
Agreement and the consummation by Seller of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Seller. Seller has heretofore made available to Acquiror true,
correct and complete copies of the certificate of incorporation and bylaws of
each of the Snapple Companies.
12
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
3.4 Consents and Approvals. Except as set forth in Section 3.4 of
the Disclosure Schedule, no consent, approval or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by Seller or any Snapple Company in connection with the execution, delivery and
performance by Seller of this Agreement and the consummation by Seller of the
transactions contemplated by this Agreement, except (i) for the filing of a
premerger notification and report form by Seller under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act"), (ii) as may be
required under any local, state or foreign antitrust statute, law, regulation or
rule applicable to Acquiror, Seller or any Snapple Company ("Other Antitrust
Regulations"), (iii) as may be required under any environmental, health,
employment or safety law or regulation pertaining to any notification,
disclosure or required approval triggered by the transactions contemplated by
this Agreement, (iv) as may be required under the laws of any foreign
jurisdiction in which any Snapple Company or Acquiror conducts business or owns
assets and (v) for such other consents, approvals, orders, authorizations,
registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) have a Material Adverse
Effect with respect to Snapple or (y) materially impair or delay the ability of
Seller to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
3.5 Non-Contravention. Except as set forth in Section 3.5 of the
Disclosure Schedule, the execution, delivery and performance by Seller of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not (i) violate any provision of the Certificate of Incorporation or
the By-laws of Seller or any Snapple Company, (ii) subject to obtaining the
consents and approvals referred to in Section 3.5 of the Disclosure Schedule,
conflict with, or result in the breach of, or constitute a default under, or
result in the termination, cancellation or acceleration (whether after the
filing of notice or the lapse of time or both) of any material right or
obligation of any of the Snapple Companies under, any material agreement, lease,
contract, note, mortgage, indenture or other obligation of any of the Snapple
Companies; or (iii) subject to the exceptions set forth in Section 3.4, violate,
or result in a breach of or constitute a default under any Applicable Law or
judgment, decree or order of any Governmental Authority to which Seller or any
13
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Snapple Company is subject, other than, in the cases of clauses (ii) and (iii),
any conflict, breach, termination, default, cancellation, acceleration, loss or
violation that, individually or in the aggregate, would not have a Material
Adverse Effect with respect to Snapple or materially impair or delay the ability
of Seller to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
3.6 Binding Effect. This Agreement constitutes a valid and legally
binding obligation of Seller, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
3.7 Financial Statements; Absence of Certain Changes. (a) Section
3.7(a) of the Disclosure Schedule contains (i) the Statement of Assets and
Liabilities of the Snapple Business as of December 31, 1996 (the "Statement of
Assets and Liabilities") and (ii) the Financial Summary-Direct Contribution of
the Snapple Business for the year ended December 31, 1995 and the year ended
December 31, 1996 (collectively, the "Financial Statements").
(b) Except as noted in the Financial Statements or in the Notes
thereto, or otherwise set forth in this Section 3.7(b) or in Section 3.7(b) of
the Disclosure Schedule, the Financial Statements:
(i) have been derived from the consolidated
financial statements of Seller;
(ii) have been prepared in accordance with GAAP and Seller's
internal accounting procedures, applied on a consistent basis for all
periods presented and on a basis consistent with Seller's audited
consolidated financial statements and unaudited interim financial
statements; and
(iii) fairly present, in all material respects, the assets and
liabilities of the Snapple Business to be transferred and assumed
hereunder through the purchase of the Shares as of the date set forth
therein and the direct contribution of the Snapple Business for the
periods indicated.
14
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(c) Except (i) as set forth in the Financial Statements or in the
Notes thereto, (ii) as set forth in Section 3.7(c) of the Disclosure Schedule or
in any other Section of the Disclosure Schedule, (iii) for liabilities and
obligations incurred in the ordinary course of business and (iv) for
indebtedness, obligations or liabilities addressed in any other representation
or warranty set forth in this Article III (including items which need not be
disclosed pursuant to the terms of such representations and warranties), as of
the date hereof, to the Knowledge of Seller, the Snapple Companies do not have
any indebtedness, obligations or liabilities of any kind (whether accrued,
absolute, contingent or otherwise) that, individually or in the aggregate, would
have a Material Adverse Effect with respect to Snapple.
(d) Except as set forth in Section 3.7(d) of the Disclosure
Schedule, since December 31, 1996, the Snapple Business has been conducted only
in the ordinary course, and, as of the date hereof, there have not been any
changes or developments that, individually or in the aggregate, would have a
Material Adverse Effect with respect to Snapple.
3.8 Litigation. Except as set forth in Section 3.8 of the Disclosure
Schedule, as of the date hereof, there are no Legal Proceedings pending or, to
the Knowledge of Seller, threatened, against Seller or any Snapple Company that,
individually or in the aggregate, would (i) have a Material Adverse Effect with
respect to Snapple or (ii) materially impair or delay the ability of Seller to
perform its obligations under this Agreement or consummate the transactions
contemplated by this Agreement. Except as set forth in Section 3.8 of the
Disclosure Schedule, as of the date hereof, there is no order, judgment,
injunction or decree of any Governmental Authority outstanding against Seller or
any of the Snapple Companies that, individually or in the aggregate, would have
any effect referred to in the foregoing clauses (i) and (ii). Except as set
forth in Section 3.8 of the Disclosure Schedule, (i) all notices required to
have been given to any insurance company insuring against any Legal Proceeding
have been timely and duly given, and (ii) no insurance company has asserted,
orally or in writing, that such Legal Proceeding is not covered by the
applicable policy relating to such Legal Proceeding other than where the failure
to give such notice or the absence of such coverage would not have, individually
or in the aggregate, a Material Adverse Effect with respect
15
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
to Snapple. Except as set forth in Section 3.8 of the Disclosure Schedule, (i)
there are no product liability Legal Proceedings against or involving any of the
Snapple Companies or any product manufactured, marketed or distributed at any
time by or on behalf of any of the Snapple Companies, and (ii) no such Legal
Proceeding has been settled, adjudicated or otherwise disposed of since December
31, 1996 other than such Legal Proceedings and such settlements, adjudications
and dispositions thereof that, individually or in the aggregate, would not have
a Material Adverse Effect with respect to Snapple. Except as set forth in
Section 3.8 of the Disclosure Schedule, there are no Legal Proceedings pending
or, to the Knowledge of Seller, threatened that would give rise to any right of
indemnification on the part of any director or officer of any of the Snapple
Companies or the heirs, executors or administrators of such director or officer,
against any of the Snapple Companies or any successor to the Snapple Business
other than such Legal Proceedings that, individually or in the aggregate, would
not have a Material Adverse Effect with respect to Snapple.
3.9 Taxes. (a) Each Snapple Company, and each affiliated group
(within the meaning of Section 1504 of the Code) of which any Snapple Company is
a member, has timely filed all federal income Tax Returns and all other material
Tax Returns required to be filed by it. All such Tax Returns are complete and
correct in all material respects. Each of the Snapple Companies has paid (or
Seller or a Subsidiary of Seller has paid on its behalf) all taxes shown due on
such Tax Returns.
(b) Except as disclosed on Section 3.9 of the Disclosure Schedule,
no material deficiencies for any Taxes have been proposed, asserted or assessed
against any of the Snapple Companies that have not been fully paid or adequately
provided for in the appropriate Financial Statements, no requests for waivers of
the time to assess any Taxes are pending, and no power of attorney with respect
to any Taxes has been executed or filed with any taxing authority. No material
issues relating to Taxes have been raised by the relevant taxing authority
during any presently pending audit or examination.
(c) No liens for Taxes exist with respect to any assets or
properties of the Snapple Companies, except for statutory liens for Taxes not
yet due.
16
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(d) Except as disclosed in Section 3.9 of the Disclosure Schedule,
no federal, state, local or foreign audits or other administrative proceedings
or court proceedings are presently pending with regard to any federal income or
material state, local or foreign Taxes or Tax Returns of any of the Snapple
Companies and none of the Snapple Companies has received a written notice of any
pending audit or proceeding.
(e) None of the Snapple Companies has, with regard to any assets or
property held or acquired by any of them, filed a consent to the application of
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by any of the Snapple Companies.
(f) Except as set forth in Section 3.9 of the Disclosure Schedule,
since December 6, 1994 and, to the Knowledge of Seller, at any time prior to
December 6, 1994, none of the Snapple Companies or any of their present or
former Affiliates has received a Tax Ruling or made or entered into a Tax
Agreement, Consent or Election (foreign or domestic) that will have a continuing
adverse effect after the Closing Date on any Snapple Company or any asset of any
Snapple Company, and there are no applications or negotiations pending with
respect to any of the foregoing. For purposes of the preceding sentence, the
term "Tax Ruling" shall mean written rulings of a taxing authority relating to
Taxes and the term "Tax Agreement, Consent or Election" shall mean a written
agreement, consent or election relating to Taxes.
(g) Except as set forth in Section 3.9 of the Disclosure Schedule,
none of the Snapple Companies is a party to, or bound by, or has any obligation
under any Tax indemnity, sharing, allocation, or similar agreement or
arrangement, express or implied, other than the provisions of this Agreement.
(h) The Snapple Companies are for federal, state and local income
tax purposes amortizing over 15 years under Section 197 of the Code, the
acquired deductible intangibles using the bases set forth in Annex 1, Attachment
L of Section 3.7(a) of the Disclosure Schedule. No taxing authority has at any
time proposed or asserted that any such asset or group of assets is not properly
amortizable.
17
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(i) Seller has made available to Acquiror complete and correct
copies of all federal and all material foreign and state income Tax Returns for
taxable periods December 7, 1994 to June 30, 1995 and July 1, 1995 to December
31, 1995 that have been filed by or with respect to each of the Snapple
Companies.
3.10 Employee Benefits. (a) Section 3.10(a) of the Disclosure
Schedule sets forth a complete and correct list of all material Employee Benefit
Plans in the United States and all material Employee Arrangements in the United
States.
(b) With respect to each material Employee Benefit Plan and each
material Employee Arrangement referred to above, a complete and correct copy of
each of the following documents (if applicable) has been provided or made
available to Acquiror: (i) the most recent plan document or agreement and all
amendments thereto; and (ii) the most recent summary plan description and all
related summaries of material modifications.
(c) Except as set forth in Section 3.10(c) of the Disclosure
Schedule, none of the Snapple Employee Benefit Plans is subject to Section 4063,
4064 or 4202 of ERISA.
(d) The Snapple Employee Benefit Plans and their related trusts
intended to qualify under Sections 401 and 501(a) of the Code, respectively,
have been determined by the IRS to qualify under such sections, as amended by
the Tax Reform Act of 1986.
(e) All contributions required to have been made by Snapple or
Seller under any Snapple Employee Benefit Plan or any Applicable Law to any
trusts established thereunder or in connection therewith have been made by the
due date therefor (including any valid extensions).
(f) The Snapple Employee Benefit Plans and Snapple Employee
Arrangements have been maintained, in all material respects, in accordance with
their terms and, to Seller's knowledge, Applicable Laws, including, but not
limited to, the filing of applicable reports, documents and notices regarding
any Snapple Employee Benefit Plans with the Secretary of Labor and the Secretary
of the Treasury, or the furnishing of such documents to participants in the
Snapple Employee Benefit Plans, except where any failure to
18
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
comply would not, individually or in the aggregate, have a Material Adverse
Effect with respect to Snapple.
3.11 Compliance with Laws. Except as set forth in Section 3.11 of
the Disclosure Schedule, to the Knowledge of Seller, each of the Snapple
Companies is in compliance with all Applicable Laws, except where the failure to
so comply, individually or in the aggregate, would not have a Material Adverse
Effect with respect to Snapple, and the Snapple Companies have all permits,
licenses, certificates of authority, orders and approvals of, and have made all
filings, applications and registrations with, Governmental Authorities that are
required in order for the Snapple Companies to conduct the Snapple Business as
presently conducted, except for such permits, licenses, certificates, orders,
approvals, filings, applications and registrations, the failure to have or make
would not, individually or in the aggregate, have a Material Adverse Effect with
respect to Snapple; it being understood that nothing in this representation is
intended to address any matters which are the subject of the representation or
warranty set forth in Section 3.16.
3.12 Intellectual Property. Section 3.12 of the Disclosure Schedule
sets forth a list and description (including the country of registration) of all
material trademarks, trade names, service marks, copyrights and patents owned or
licensed by any of the Snapple Companies and all material patent applications of
any of the Snapple Companies. Except as set forth in Section 3.12 of the
Disclosure Schedule, the Snapple Companies own or possess licenses or other
rights to use all patents, trademarks, trade names, service marks, copyrights,
licenses and product licenses or registrations (including applications for any
of the foregoing) as are necessary to conduct the Snapple Business as currently
conducted, except those the lack of which would not, individually or in the
aggregate, have a Material Adverse Effect with respect to Snapple; and none of
Seller or any of the Snapple Companies has any Knowledge of any conflict with
the proprietary intellectual property rights relating to the Snapple Business or
any Knowledge of any conflict by Seller or any of the Snapple Companies with the
rights of others therein which, individually or in the aggregate, would have a
Material Adverse Effect with respect to Snapple.
3.13 Contracts. Section 3.13 of the Disclosure Schedule sets
forth a list, as of the date hereof, of each
19
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
material written contract and lease and each material oral contract or lease as
to which Seller has Knowledge and to which any of the Snapple Companies is a
party ("Contract") (other than (i) any purchase or sale orders arising in the
ordinary course of business, (ii) any Contract involving the payment of less
than $1,000,000 in the aggregate and (iii) any Contract listed in any other
Section of the Disclosure Schedule). Except as set forth in Section 3.13 of the
Disclosure Schedule, each Contract set forth in Section 3.13 of the Disclosure
Schedule is a valid and binding agreement of the Snapple Company which is a
party thereto and, to the Knowledge of Seller, is in full force and effect.
Except as set forth in Section 3.13 of the Disclosure Schedule, Seller has no
Knowledge of any material default under any Contract set forth in Section 3.13
of the Disclosure Schedule which default has not been cured or waived and which
default would have a Material Adverse Effect with respect to Snapple.
3.14 Brokers. Except for Goldman, Sachs & Co., whose fees will be
paid by Seller, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Seller or the Snapple Companies who might be entitled to any fee or commission
from Seller or the Snapple Companies in connection with the transactions
contemplated by this Agreement.
3.15 Title to Properties. Each of the Snapple Companies has good and
valid title to all of the material tangible assets and properties which it owns
and which are reflected on the Statement of Assets and Liabilities (except for
assets and properties sold, consumed or otherwise disposed of by the Snapple
Companies in the ordinary course of business since the date of the Statement of
Assets and Liabilities), and such tangible assets and properties are owned free
and clear of all Encumbrances, except for (a) Encumbrances listed in Section
3.15 of the Disclosure Schedule, (b) liens for current Taxes not yet due and
payable or for Taxes the validity of which is being contested in good faith, (c)
Encumbrances to secure indebtedness reflected on the Statement of Assets and
Liabilities or indebtedness incurred in the ordinary course of business
consistent with past practice after the date thereof, (d) mechanic's liens,
materialmen's liens and other Encumbrances which have arisen in the ordinary
course of business and (e) Encumbrances which, in the aggregate, would not have
a Material Adverse Effect with respect to Snapple
20
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
or materially adversely interfere with the use of such material assets and
properties as they are presently being used.
3.16 Environmental Matters. (a) Except as set forth in Section 3.16
of the Disclosure Schedule, to the Knowledge of Seller, the Snapple Companies
are in compliance with all applicable Environmental Laws, except where the
failure to be in compliance would not, individually or in the aggregate, have a
Material Adverse Effect with respect to Snapple.
(b) Except as set forth in Section 3.16 of the Disclosure Schedule,
to the Knowledge of Seller, none of the Snapple Companies has received any
written request for information, or has been notified that it is a potentially
responsible party, under CERCLA or any similar state law with respect to any
on-site or off-site location for which liability is currently being asserted.
(c) Except as set forth in Section 3.16 of the Disclosure Schedule,
there are no writs, injunctions, decrees, orders or judgments outstanding, or
any actions, suits, proceedings or investigations pending or, to the knowledge
of Seller, threatened, relating to compliance by the Snapple Companies with any
Environmental Law that, individually or in the aggregate, would have a Material
Adverse Effect with respect to Snapple.
3.17 Labor Relations. Except as set forth in Section 3.17 of the
Disclosure Schedule, none of the Snapple Companies is a party to any collective
bargaining agreements. Except as set forth in Section 3.17 of the Disclosure
Schedule, there is no unfair labor practice complaint or other proceeding
against any of the Snapple Companies pending before the National Labor Relations
Board which, if adversely decided, would have a Material Adverse Effect with
respect to Snapple, and there is no labor strike pending or threatened against
any Snapple Company which would have a Material Adverse Effect with respect to
Snapple.
3.18 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither Seller nor
any other Person makes any other express or implied representation or warranty
on behalf of Seller.
21
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
3.19 Disclosure Schedule. On or prior to the date hereof, Seller has
delivered to Acquiror a schedule (as the same may be amended or supplemented
pursuant to this Section 3.19, the "Disclosure Schedule") setting forth, among
other things, items of disclosure relating to any or all of the representations
and warranties of Seller; provided, that (i) no such item is required to be set
forth in the Disclosure Schedule as an exception to a representation or warranty
if its absence would not result in the related representation or warranty being
deemed untrue or incorrect under the standard established by Section 3.20, and
(ii) the mere inclusion of an item in the Disclosure Schedule shall not be
deemed an admission by Seller that such item represents a material exception or
fact, event or circumstance or that such item would result in a Material Adverse
Effect with respect to Snapple. Seller may, by notice in accordance with this
Agreement, amend or supplement any Section of the Disclosure Schedule to include
any matters (x) which, if existing or occurring before or at the date of this
Agreement, would have caused any representation or warranty of the Seller to be
untrue or incorrect if not set forth or described in the Disclosure Schedule,
and (y) hereafter arising prior to the Closing which, if existing or occurring
before or at the date of this Agreement, would have been required to be set
forth or described in the Disclosure Schedule, it being hereby agreed and
understood that any such amendment or supplement to any Section of the
Disclosure Schedule shall not operate to cure any prior breach by Seller, under
the standard established by Section 3.20, of any representation or warranty to
which such amended or supplemented schedule relates. In no event shall Seller
have any liability by virtue of its failure to disclose in response to any
Section of this Agreement information which is disclosed herein in response to
another Section of this Agreement.
3.20 Standard. No representation or warranty of Seller contained in
Article III hereof shall be deemed untrue or incorrect, and Seller shall not be
deemed to have breached a representation or warranty, as a consequence of the
existence of any fact, circumstance or event unless such fact, circumstance or
event, individually or taken together with all other facts, circumstances or
events inconsistent with any Section of Article III, has had or would have a
Material Adverse Effect with respect to Snapple.
22
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to Seller as follows:
4.1 Organization and Qualification. Acquiror is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its assets and properties and to carry on its
business as currently conducted. Acquiror is duly qualified to do business and
is in good standing in each jurisdiction where the ownership or operation of its
assets and properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing,
as the case may be, would not have a Material Adverse Effect with respect to
Acquiror.
4.2 Corporate Authorization. Acquiror has the requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations under this Agreement and to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance by Acquiror of this
Agreement and the consummation by Acquiror of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate action on
the part of Acquiror.
4.3 Consents and Approvals. Except as set forth in Section 4.3 of
the Disclosure Schedule, no consent, approval or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by Acquiror in connection with the execution, delivery and performance by
Acquiror of this Agreement and the consummation by Acquiror of the transactions
contemplated by this Agreement, except (i) for the filing of a premerger
notification and report form by Acquiror under the HSR Act, (ii) as may be
required under any Other Antitrust Regulations, (iii) as may be required under
any environmental, health, employment or safety law or regulation pertaining to
any notification, disclosure or required approval triggered by the transactions
contemplated by this Agreement, (iv) as may be required under the laws of any
foreign jurisdiction in which Acquiror or any Snapple Company conducts business
or owns assets and (v) for such other consents, approvals, orders,
authorizations,
23
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) have a Material Adverse
Effect with respect to Acquiror or (y) materially impair or delay the ability of
Acquiror to perform its obligations under this Agreement or consummate the
transactions contemplated by this Agreement.
4.4 Non-Contravention. The execution, delivery and performance by
Acquiror of this Agreement, and the consummation by Acquiror of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Certificate of Incorporation or the By-laws of Acquiror; (ii) conflict with, or
result in the breach of, or constitute a default under, or result in the
termination, cancellation or acceleration (whether after the filing of notice or
the lapse of time or both) of any material right or obligation of Acquiror or
any of its Subsidiaries under, any material agreement, lease, contract, note,
mortgage, indenture or other obligation of Acquiror or its Subsidiaries; or
(iii) subject to the exceptions set forth in Section 4.3, violate, or result in
a breach of or constitute a default under any Applicable Law or judgment, decree
or order of any Governmental Authority to which Acquiror or any of its
Subsidiaries is subject, other than, in the case of clauses (ii) and (iii), any
conflict, breach, termination, default, cancellation, acceleration, loss or
violation which, individually or in the aggregate, would not have a Material
Adverse Effect with respect to Acquiror or materially impair or delay the
ability of Acquiror to perform its obligations under this Agreement or
consummate the transactions contemplated by this Agreement.
4.5 Binding Effect. This Agreement constitutes a valid and legally
binding obligation of Acquiror enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
4.6 Brokers. Except for Morgan Stanley & Co., Incorporated and
Salomon Brothers Inc, whose fees will be paid by Acquiror, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of Acquiror or any Subsidiary of Acquiror
who might be entitled to any fee or commission
24
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
from Acquiror in connection with the transactions contemplated by this
Agreement.
4.7 Purchase for Investment. Acquiror is acquiring the Shares for
investment and not with a view toward, or for the purpose of, the resale or
distribution thereof. Acquiror acknowledges that the sale of the Shares
hereunder has not been registered under the Securities Act and that the Shares
may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act, pursuant to
an exemption therefrom or in a transaction not subject thereto. Acquiror has no
knowledge that any representation or warranty of Seller contained in Article III
is not true and correct in all material respects.
4.8 Financial Capability. Acquiror will have on the Closing Date
sufficient funds to purchase the Shares and consummate the transactions
contemplated by this Agreement. As of the date hereof, Acquiror has cash and
cash equivalents of approximately $195,000,000 (the "Cash").
4.9 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Acquiror
nor any other Person makes any other express or implied representation or
warranty on behalf of Acquiror.
ARTICLE V
COVENANTS
5.1 Conduct of Snapple Business. Except as otherwise contemplated by
this Agreement or as set forth in Section 5.1 of the Disclosure Schedule or in
any other Section of the Disclosure Schedule, during the period from the date
hereof to the Closing, Seller shall, and shall cause the Snapple Companies to,
taking into account any matters that may arise that are attributable to the
pendency of the transactions contemplated by this Agreement, conduct the Snapple
Business only in the ordinary course. In addition, from and after the date
hereof to the Closing Date, except as otherwise provided in this Agreement or as
otherwise contemplated hereby or as set forth in Section 5.1 of the Disclosure
Schedule or in any other Section of the Disclosure Schedule, Seller shall not
permit any Snapple
25
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Company to, without the prior written consent of Acquiror (which consent shall
not be unreasonably withheld):
(i) amend its Certificate of Incorporation, By-Laws or other
comparable charter or organizational documents or merge with or into or
consolidate with any other person;
(ii) issue, sell, pledge, dispose of or encumber, or
authorize or propose the issuance, sale, pledge, disposition or
encumbrance of, any shares of, or securities convertible or exchangeable
for, or options, puts, warrants, calls, commitments or rights of any kind
to acquire, any of its capital stock or subdivide or in any way reclassify
any shares of its capital stock or change or agree to change in any manner
the rights of its outstanding capital stock;
(iii) except as may be required by agreements or arrangements
disclosed in the Disclosure Schedule, grant any severance or termination
pay to, or enter into, extend or amend any employment, consulting,
severance or other compensation agreement with, any of its directors,
officers or other employees whose annual base salary is in excess of
$200,000 which would bind any Snapple Company from and after the Closing
Date;
(iv) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of any properties or assets
material to the Snapple Business having a fair market value in excess of
$2 million individually or $10 million in the aggregate;
(v) terminate any distributor or co-packer relationship;
(vi) enter into any material contract or other arrangement
with any new co-packer with a term of more than three months;
(vii) enter into any material distribution agreement with
respect to the Snapple Business, other than those agreements which have
been delivered to distributors prior to the date hereof, but not yet
mutually executed, as described in Section 3.13 of the Disclosure
Schedule;
26
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(viii) implement any change in its accounting principles,
practices or methods, other than as may be required by GAAP and other than
as may be necessary or advisable in connection with the transactions
contemplated hereby; or
(ix) authorize any of, or commit or agree to take any of,
the actions referred to in paragraphs (i) through (viii) above.
5.2 Access. Prior to the Closing, Seller shall, and shall cause the
Snapple Companies to, permit Acquiror and its officers, employees, accountants,
counsel, financial advisors and other representatives to have reasonable access,
during normal business hours and upon reasonable advance notice, to the
properties, books, records, accountants (subject to their availability) and
personnel of Seller and its Affiliates relating to the Snapple Business, and
shall furnish, or cause to be furnished, to Acquiror, all other information
concerning the Snapple Business or the Snapple Companies that is available as
Acquiror may reasonably request. In connection with such access, Acquiror's
representatives shall cooperate with Seller's and Snapple's representatives and
shall use their reasonable best efforts to minimize any disruption of the
Snapple Business. Acquiror agrees to abide by the terms of the Confidentiality
Agreement with respect to such access and any information furnished to it or its
representatives pursuant to this Section 5.2.
5.3 Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, Seller and Acquiror shall use their
respective reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Authorities and the making of all necessary registrations and filings with, and
the taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Authority,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties (including, without limitation, any necessary consents for the
assignment to Acquiror of the contracts and arrangements
27
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
referenced in the Assignment and Assumption Agreement), (iii) the defending of
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of any of the transactions
contemplated by this Agreement, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Authority vacated
or reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement; provided, however, that, notwithstanding the
foregoing, the actions of Seller and Acquiror with respect to filings, approvals
and other matters pursuant to the HSR Act and Other Antitrust Regulations shall
be governed by Section 5.4. To the extent that any contract, permit or other
arrangement that the parties intend to assign, as specified herein and in the
Assignment and Assumption Agreement (hereinafter, collectively the "Assigned
Contracts"), is not capable of being assigned or transferred without the consent
or waiver of the other party thereto or any other third party (including a
government or governmental unit), or if such assignment or transfer or attempted
assignment or transfer would constitute a breach thereof or a violation of any
law, decree, order, regulation or other governmental edict, this Agreement shall
not constitute an assignment or transfer thereof, or an attempted assignment or
transfer of any such Assigned Contracts until such time as such consent or
waiver is obtained. Anything in this Agreement to the contrary notwithstanding,
Seller is not obligated to transfer to Acquiror any of its rights and
obligations in and to any of the Assigned Contracts without first having
obtained all necessary consents and waivers. Prior to the Closing Date, Seller
shall use its reasonable best efforts to obtain consents to the assignment of
the Assigned Contracts, provided, however, that Seller shall not, without
Acquiror's consent (which shall not be unreasonably withheld), agree to any
modification of any such Assigned Contracts in the course of obtaining any such
consents or waivers. Prior to and for a reasonable period of time after the
Closing Date, Seller shall cooperate with Acquiror to assist Acquiror in
obtaining any other consents and waivers under any Assigned Contract which are
reasonably requested by Acquiror. If any such consent or waiver cannot be
obtained, Seller and Acquiror will cooperate to implement reasonable
arrangements resulting in Acquiror obtaining the benefits and privileges of the
relevant Assigned Contract (including without limitation enforcement for the
benefit of Acquiror of any
28
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
and all rights of Seller against a third party or otherwise) while protecting
Seller from continuing liabilities or obligations thereunder.
5.4 Antitrust Notification. (a) Seller and Acquiror shall, as
promptly as practicable, but in no event later than 10 Business Days following
the execution and delivery of this Agreement, file with (i) the FTC and the DOJ,
the notification and report form required for the transactions contemplated
hereby and any supplemental information requested in connection therewith
pursuant to the HSR Act and (ii) any other applicable Governmental Authority all
filings, reports, information and documentation required for the transactions
contemplated hereby pursuant to Other Antitrust Regulations. Each of Seller and
Acquiror shall furnish to each other's counsel such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission that is necessary under the HSR Act and
Other Antitrust Regulations.
(b) Each of Seller and Acquiror shall use its best efforts to obtain
any clearance required under the HSR Act and Other Antitrust Regulations for the
consummation of the transactions contemplated by this Agreement and shall keep
each other apprised of the status of any communications with, and any inquiries
or requests for additional information from, the FTC and the DOJ and other
Governmental Authorities and shall comply promptly with any such inquiry or
request.
(c) Each of Seller and Acquiror shall use its best efforts to take
any action reasonably necessary to vigorously defend, lift, mitigate and rescind
the effect of any litigation or administrative proceeding adversely affecting
this Agreement or the transactions contemplated hereby, including, without
limitation, promptly appealing any adverse court or administrative order or
injunction.
5.5 Supplemental Disclosure. Seller shall confer on a regular and
frequent basis with Acquiror, report on operational matters and promptly notify
Acquiror of, and furnish Acquiror with, any information it may reasonably
request with respect to, any event or condition or the existence of any fact
that would cause any of the conditions to Acquiror's obligation to consummate
the transactions contemplated by this Agreement not to be completed, and
Acquiror shall promptly notify Seller of, and furnish Seller
29
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
with any information it may reasonably request with respect to, any event or
condition or the existence of any fact that would cause any of the conditions to
Seller's obligation to consummate the transactions contemplated by this
Agreement not to be completed. Prior to the Closing, Seller shall deliver to
Acquiror within 21 days of the end of each month monthly financial statements of
the Snapple Business, which monthly financial statements are prepared in the
ordinary course of business, on a basis consistent with the direct contribution
and invested capital statements previously delivered.
5.6 Further Assurances. (a) At any time after the Closing Date,
Seller, on the one hand, and Acquiror, on the other hand, shall promptly
execute, acknowledge and deliver any other assurances or documents reasonably
requested by Acquiror or Seller, as the case may be, and necessary for it to
satisfy its respective obligations hereunder or obtain the benefits contemplated
hereby.
(b) In the event that, subsequent to the Closing Date, Acquiror
shall receive written notice from Seller that certain specified assets which
were transferred to Acquiror through the sale of the Shares constitute assets
which were used predominantly in the Seller's non-Snapple Business prior to the
Closing Date, Acquiror shall transfer and deliver any and all of such assets to
Seller without the payment by Seller of any consideration therefor, subject to
all liabilities relating thereto, environmental or otherwise, that were in
effect when such assets were transferred to Acquiror, shall execute such
instruments of conveyance and transfer, assignments, bills of sale and other
documents as may be reasonably requested by Seller in connection therewith and
shall cooperate with Seller in causing the transfer of such assets to occur in a
manner to appropriately minimize the payment of Taxes. In addition, any transfer
of assets pursuant to this Section 5.6(b) shall be treated as if such assets
were distributed as a dividend by Snapple to Seller on the day immediately
preceeding the Closing Date.
5.7 Announcements. Prior to the Closing, neither Seller nor Acquiror
will issue any press release or otherwise make any public statement with respect
to this Agreement and any of the transactions contemplated hereby without the
prior consent of the other (which consent shall not be unreasonably withheld),
except as expressly permitted by and in accordance with the terms of the
Confidentiality
30
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Agreement. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
5.8 Employee Matters. (a) Section 5.8(a) of the Disclosure Schedule
sets forth a complete and correct list of all Employee Benefit Plans or portions
thereof which Acquiror hereby covenants and agrees that the Snapple Companies or
Acquiror will assume and be liable for with respect to any employee or former
employee of the Snapple Companies or the Snapple Business after the Closing Date
(the "Snapple Employee Benefit Plans"). Section 5.8(a) of the Disclosure
Schedule also sets forth a complete and correct list of all Employee
Arrangements or portions thereof which Acquiror hereby covenants and agrees that
the Snapple Companies or Acquiror will assume and be liable for with respect to
any employee or former employee of the Snapple Companies or the Snapple Business
after the Closing Date (the "Snapple Employee Arrangements"). Effective as of
the Closing Date, Snapple Employees (as hereinafter defined in Section 5.8(b))
will cease participation in all Employee Benefit Plans and all Employee
Arrangements other than the Snapple Employee Benefit Plans and the Snapple
Employee Arrangements. Snapple Employees will be treated as 100% vested in their
accrued benefits under any such Employee Benefit Plan constituting a qualified
pension plan under Section 401(a) of the Code.
(b) Prior to the Closing, Seller shall cause the employees listed in
Section 5.8(b) of the Disclosure Schedule to become employees of Snapple or
another applicable Snapple Company (to the extent that such employees are not
employees of Snapple or another applicable Snapple Company as of the date
hereof). All such employees, any other employees in the Snapple division working
exclusively on the Snapple Business, and any other employees that are hired by a
Snapple Company between the date hereof and the Closing Date, are hereinafter
collectively referred to as the "Snapple Employees". The parties agree that all
Snapple Employees will remain employees of a Snapple Company immediately
following the Closing. Notwithstanding the foregoing, the term "Snapple
Employees" shall not include employees who as of the Closing Date are "disabled"
(within the meaning of the long-term disability plans applicable to the Snapple
Companies), former employees and retired employees of the Snapple Companies.
31
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(c) No provision of this Agreement shall be construed to prohibit
the Snapple Companies or any Affiliate thereof from having the right to
terminate the employment of any Snapple Employee, with or without cause, or to
amend or to terminate any Snapple Employee Benefit Plans or Snapple Employee
Arrangements established, maintained or contributed to by the Snapple Companies,
Acquiror or their Affiliates after the Closing.
(d) Service by Snapple Employees with the Snapple Companies or any
of their Affiliates shall be recognized under any benefit plan or arrangement
established, maintained or contributed to by Acquiror, the Snapple Companies, or
any of their Affiliates after the Closing for the benefit of any Snapple
Employee solely for purposes of eligibility to participate and vesting, and for
accrual under any severance plan, but in no event shall such service be taken
into account in determining the accrual of benefits under a defined benefit
plan. Acquiror shall indemnify Seller for any claim by Snapple Employees that
they are entitled to severance or similar payments as a result of the
transactions contemplated by this Agreement or any act of Acquiror following the
Closing; provided, that to the extent any such claim arises under any
arrangement, agreement or plan maintained by Seller or any of its Affiliates,
such arrangement, agreement or plan shall have been disclosed to Acquiror prior
to the date of this Agreement.
(e) Prior to the Closing Seller shall take all action necessary to
assume all liabilities of the Snapple Companies arising under, in connection
with or relating to, any Employee Benefit Plan, other than any Snapple Employee
Benefit Plan or any Snapple Employee Arrangement, and all liabilities arising
under, in connection with or relating to all Snapple Employee Benefit Plans and
Snapple Employee Arrangements shall be assumed and paid by Acquiror.
(f) Following the Closing, the Snapple Employees shall have
substantially the same compensation, benefits and severance as provided for
similarly situated employees of Acquiror's Mistic business. It is understood
that Acquiror is not required to maintain any of the benefit plans and
arrangements listed in the Disclosure Schedule.
(g) Seller and Acquiror agree to cooperate to carry out the duties
and responsibilities contained in this Section 5.8. In addition, Seller agrees
to make available to Acquiror such information as Acquiror may reasonably
32
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
request to facilitate the determination of (i) the period of service of any
Snapple Employee with the Snapple Companies or any of their Affiliates prior to
the Closing Date, (ii) individual service accruals and salary histories of
Snapple Employees and (iii) such other information as Acquiror may reasonably
request to carry out the provisions of this Section 5.8.
5.9 Preservation of Records. Subject to Section 8.4, Acquiror agrees
that it shall, at its own expense, preserve and keep the records held by it
relating to the Snapple Business that could reasonably be required after the
Closing by Seller for as long as is specified for such categories of records in
Seller's document retention program in effect on the Closing Date (a copy of
which has been provided to Acquiror). In addition, Acquiror shall make such
records available to Seller as may be reasonably required by Seller in
connection with, among other things, any insurance claim, legal proceeding or
governmental investigation relating to the Snapple Business.
5.10 Other Agreements. Each of Seller and Acquiror agrees that it
shall (and, with respect to clauses (ii) through (vii) below, shall cause
Snapple to), on or prior to the Closing, enter into (i) a Transition Services
Agreement, substantially in the form of Exhibit A hereto (the "Transition
Services Agreement"), with respect to shared arrangements between any Snapple
Company, on the one hand, and Seller or any of its other Subsidiaries, on the
other hand, (ii) a Patent License Agreement, substantially in the form of
Exhibit B hereto (the "Patent License Agreement"), with respect to the licensing
of certain patents, (iii) a Shared Technology License Agreement, substantially
in the form of Exhibit C hereto (the "Shared Technology License Agreement"),
with respect to the cross-licensing of shared technology, (iv) an Assignment and
Delegation Agreement Regarding Services of Beverage America, Inc. d/b/a Brooks
Pro-Pak, substantially in the form of Exhibit D hereto (the "Brooks Agreement"),
(v) an Assignment and Delegation Agreement Regarding Services of Power
Packaging, Inc., substantially in the form of Exhibit E hereto (the "Power
Packaging Agreement"), provided, however, that if for any reason prior to the
Closing Date Stokely-Van Camp, Inc. ("SVC"), Snapple and Power Packaging, Inc.
do not enter into an amended Manufacturing Agreement, substantially in the form
of the January 1997 draft previously provided to Acquiror, with respect to the
Tolleson facility, then Seller, Snapple and Acquiror shall enter into an
agreement
33
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
with respect to SVC's and Snapple's rights and obligations under the existing
Facility Construction and Manufacturing Agreement dated as of November 30, 1993
between Snapple and Power Packaging, Inc. that is substantially similar in
effect to the Power Packaging Agreement and (vi) an Assignment and Assumption
Agreement, substantially in the form of Exhibit F hereto (the "Assignment and
Assumption Agreement").
5.11 Financial Statements. Seller shall, at Acquiror's expense, (i)
within 90 days following the date of this Agreement, deliver to Acquiror audited
financial statements for the Snapple Companies for the years ended December 31,
1996, December 31, 1995 and December 31, 1994, such audited financial statements
to present the consolidated balance sheets of the Snapple Companies as of such
dates and the related consolidated statements of operations and cash flows and
related footnotes for each of such years (collectively, the "Audited Financial
Statements") and (ii) within 90 days following the date on which Seller receives
written notice from Acquiror that Acquiror is required to include such interim
financial information in a specific filing with the United States Securities and
Exchange Commission, unaudited financial statements for the Snapple Companies
for the quarters ended March 31, 1996 and March 31, 1997, such unaudited
financial statements to present the consolidated balance sheets of the Snapple
Companies as of such dates and the related consolidated statement of operations
and cash flows and related footnotes each for such period. In addition, if
Acquiror proposes to engage in a transaction or filing regarding any of the
Snapple Companies that requires the creation of pro forma or historical
financial statements for any of the Snapple Companies, individually or in some
combination (including any filing with the United States Securities and Exchange
Commission that requires financial statements for any of the Snapple Companies
prepared in accordance with Regulation S-X), for any period of time prior to the
Closing Date, Seller shall permit Acquiror and its officers, employees,
accountants, counsel, financial advisors and other representatives, to have
reasonable access, during normal business hours and upon reasonable advance
notice, to the properties, books and records of Seller and its Affiliates
relating to the Snapple Business solely for such purpose.
5.12 Related Party Payments. Except as otherwise provided in
this Agreement and the other agreements and documents contemplated hereby, all
liabilities and obliga-
34
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
tions of the Snapple Companies to Seller and its Affiliates shall be paid or
otherwise settled on or prior to the Closing.
5.13 Continental PET. Seller shall use commercially reasonable
efforts to provide, in connection with products co-packed by Seller, the
remaining calendar 1997 requirements, and 1998 and 1999 requirements (as
described and limited in the Brooks Agreement and the Power Packaging
Agreement), of Snapple for 20 oz. bottles that are produced for Seller pursuant
to any contract with Continental PET Technologies, Inc. and co-packed at
Seller's Tolleson facility or at the Brooks Pro-Pak facility at a cost equal to
that charged to Seller by Continental PET Technologies, Inc.
5.14 Payment of Proceeds. Acquiror agrees to cause Snapple to pay to
Seller, immediately upon receipt, any proceeds paid to Snapple in connection
with the settlement of the Snapple Beverage Corp. v. Sterling & Sterling
Litigation (E.D.N.Y.). Any payments made under this Section 5.14 shall be net of
any Taxes payable with respect to the receipt or accrual of any such proceeds
after the Closing (taking into account any actual reduction in Tax liability
after the Closing realized or that will be realized upon the payments pursuant
to this Section 5.14).
5.15 Insurance. (a) Seller and Acquiror agree that Casualty
Insurance Claims relating to the Snapple Business (including reported claims and
including incurred but not reported claims) will remain with the Snapple
Companies immediately following the Closing. For purposes hereof, "Casualty
Insurance Claims" shall mean workers' compensation, auto liability, general
liability and products liability claims. The Casualty Insurance Claims are
subject to the provisions of policies of insurance with insurance carriers and
contractual arrangements with insurance adjusters maintained by Seller prior to
the Closing (collectively, the "Insurance Policies"). With respect to the
Casualty Insurance Claims, the following procedures shall apply: (i) Seller
shall continue to administer, adjust, settle and pay, on behalf of Snapple, all
Casualty Insurance Claims with dates of occurrence prior to the date of Closing;
provided, that Seller will obtain the consent of Acquiror prior to adjusting,
settling or paying any Casualty Insurance Claim of an amount greater than
$50,000; and (ii) Seller shall invoice Snapple at the end of each month for
Casualty Insurance Claims paid on behalf of Snapple by the
35
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Seller or Seller's insurance company or insurance adjuster during the previous
month. Acquiror shall cause Snapple to pay the Seller within 15 days of the date
of each monthly invoice. In the event that Snapple does not pay Seller within 15
days of such invoice, interest at the rate of 10% per annum shall accrue on the
amount of such invoice. Casualty Insurance Claims to be paid by Snapple
hereunder shall include all costs necessary to settle claims including, but not
limited to, compensatory, medical, legal and other allocated expenses. In the
event that any Casualty Insurance Claim exceeds a deductible or self-insured
retention under the Insurance Policies, and provided that Snapple shall have
properly paid any costs related to such Casualty Insurance Claim, Snapple shall
be entitled to the benefit of any insurance proceeds that may be available to
discharge any portion of such Casualty Insurance Claim.
(b) Seller makes no representation or warranty with respect
to the existence, applicability, validity or adequacy of any Insurance Policy,
and Seller shall not be responsible to Acquiror or any of its Affiliates for the
failure of any insurer to pay under any such Insurance Policy.
(c) Nothing in this Agreement is intended to provide or
shall be construed as providing a benefit or release to any insurer or claims
service organization of any obligation under any Insurance Policy. Seller and
Acquiror confirm that the sole intention of this Section 5.15 is to divide and
allocate the benefits and obligations under the Insurance Policies between them
as of the Closing Date and not to affect, enhance or diminish the rights and
obligations of any insurer or claims service organization thereunder. Nothing
herein shall be construed as creating or permitting any insurer or claims
service organization the right of subrogation against Seller or Acquiror or any
of their Affiliates in respect of payments made by one to the other under any
Insurance Policy.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to the Obligations of Acquiror
and Seller. The respective obligation of each party to
effect the Closing is subject to the satisfaction or waiver
36
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(to the extent permitted under Applicable Laws) on or prior to the Closing Date
of the following conditions:
(a) No Injunctions or Restraints. No statute, rule, regulation,
decree, preliminary or permanent injunction, temporary restraining order or
other order of any nature of any U.S. federal or state Governmental Authority
shall be in effect that restrains, prevents or materially changes the
transactions contemplated hereby; provided, however, that in the case of a
decree, injunction or other order, each of the parties shall have used its best
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order.
(b) Updating. If Seller has, in accordance with Section 3.19 of this
Agreement, amended or supplemented any Section of the Disclosure Schedule, the
matters included in such amendments or supplements shall not, individually or in
the aggregate, have a Material Adverse Effect with respect to Snapple.
(c) HSR Act. The applicable waiting periods under the HSR Act shall
have expired or been terminated.
6.2 Conditions to the Obligations of Acquiror. The obligation of
Acquiror to effect the Closing is further subject to the satisfaction of the
following conditions, any or all of which may be waived on or prior to the
Closing Date in whole or in part by Acquiror:
(a) Representations and Warranties. The representations and
warranties of Seller made hereunder shall be true and correct, subject to the
standard set forth in Section 3.20, at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement and except to the extent
that any representation or warranty is expressly made as of a specified date, in
which case such representation or warranty shall be true and correct, subject to
the standard set forth in Section 3.20, only as of such date. Acquiror shall
have received a certificate to that effect dated the Closing Date and signed on
behalf of Seller by an authorized officer of Seller.
(b) Agreements. Seller shall have performed in all material
respects all of its material obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Acquiror shall have
received
37
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
a certificate to that effect dated the Closing Date and signed on behalf of
Seller by an authorized officer of Seller.
(c) Legal Opinion. Acquiror shall have received the opinion of
Seller's in-house counsel, dated as of the Closing Date, addressed to Acquiror
substantially to the effect set forth in Exhibit G hereto.
6.3 Conditions to the Obligations of Seller. The obligation of
Seller to effect the Closing is further subject to the satisfaction of the
following conditions, any or all of which may be waived on or prior to the
Closing Date in whole or in part by Seller:
(a) Representations and Warranties. The representations and
warranties of Acquiror made hereunder shall be true and correct in all material
respects, at and as of the Closing Date, except for changes permitted or
contemplated by this Agreement and except to the extent that any representation
or warranty is expressly made as of a specified date, in which case such
representation or warranty shall be true and correct in all material respects,
only as of such date. Seller shall have received a certificate to that effect
dated the Closing Date and signed on behalf of Acquiror by an authorized officer
of Acquiror.
(b) Agreements. Acquiror shall have performed in all material
respects all of its material obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Seller shall have received a
certificate to that effect dated the Closing Date and signed on behalf of
Acquiror by an authorized officer of Acquiror.
(c) Legal Opinion. Seller shall have received the opinion of
Acquiror's counsel, dated as of the Closing Date, addressed to Seller
substantially to the effect set forth in Exhibit H hereto.
ARTICLE VII
SURVIVAL; GENERAL INDEMNIFICATION
7.1 Survival. All of the representations and warranties of
Seller and Acquiror contained in this Agreement (other than in Section 3.9) and
all claims and causes of action with respect thereto shall terminate upon the
38
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
first anniversary of the Closing Date and notices of such claims for
indemnification under Section 7.2 or 7.3(a) shall be given within such one-year
period. In the event notice of such claim for indemnification under Section 7.2
or Section 7.3(a) is given (within the meaning of Section 10.5) within the
applicable survival period, the representations and warranties that are the
subject of such indemnification claim shall survive with respect to such claim
until such time as such claim is finally resolved.
7.2 Indemnification by Acquiror. Subject to Section 7.1 and except
as otherwise provided in Article VIII, Acquiror hereby agrees that it shall
indemnify, defend and hold harmless Seller and, if applicable, its directors,
officers, employees, representatives, advisors, agents and Affiliates (the
"Seller Indemnified Parties") from, against and in respect of any and all
damages, claims, losses, charges, actions, suits, proceedings, deficiencies,
Taxes, interest, penalties, and reasonable costs and expenses (but not
including, consequential, exemplary, special and punitive damages and lost
profits, other than such damages awarded to any third party against an
Indemnified Party) (collectively, the "Losses") arising out of, relating to or
resulting from, directly or indirectly:
(i) any breach of any representation or warranty made by
Acquiror contained in this Agreement;
(ii) the breach of any covenant or agreement of Acquiror
contained in this Agreement; and
(iii) except as otherwise provided in Article VIII or specifically
enumerated as an item as to which Seller will indemnify Acquiror pursuant
to Section 7.3, all liabilities and obligations of the Snapple Companies
and the Business, regardless of when they arose or arise and regardless of
by whom or when asserted.
7.3 Indemnification by Seller. (a) Subject to Sections 7.1 and
7.3(b), and except as otherwise provided in Article VIII, Seller hereby agrees
that it shall indemnify, defend and hold harmless Acquiror and, if applicable,
its directors, officers, employees, representatives, advisors, agents and
Affiliates (other than employees of the Snapple Companies) (the "Acquiror
Indemnified Parties") from, against and in respect of any Losses arising out of,
relating to or resulting from, directly or indirectly:
39
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(i) any breach, subject to the standard set forth in Section
3.20, of any representation or warranty made by Seller contained in this
Agreement;
(ii) the breach of any covenant or agreement of Seller contained
in this Agreement; and
(iii) any liabilities and expenses attributable to Employee Benefit
Plans (other than Snapple Employee Benefit Plans) and Employee
Arrangements (other than Snapple Employee Arrangements), except for
liabilities and expenses to be paid by Acquiror and/or Snapple pursuant to
Section 5.8.
(b) Seller shall not be liable to the Acquiror Indemnified Parties
for any Losses with respect to the matters enumerated in Section 7.3(a) unless
the Losses therefrom exceed an aggregate amount equal to 3% of the Purchase
Price, and then only for such Losses in excess of 3% of the Purchase Price and
only up to an aggregate amount equal to 25% of the Purchase Price; provided,
however, that the foregoing shall not apply to any Losses for claims under
Article II of this Agreement.
7.4 Procedure for Indemnification. Subject to Section 7.1, all
claims for indemnification under this Article VII shall be asserted and resolved
as follows:
(a) In the event that any claim or demand, or other circumstance or
state of facts which could give rise to any claim or demand, for which an
Indemnifying Party may be liable to an Indemnified Party hereunder is asserted
against or sought to be collected by a third party (an "Asserted Liability"),
the Indemnified Party shall as soon as reasonably possible notify the
Indemnifying Party in writing of such Asserted Liability, specifying the nature
of such Asserted Liability (the "Claim Notice"); provided, that no delay on the
part of the Indemnified Party in giving any such Claim Notice shall relieve the
Indemnifying Party of any indemnification obligation hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such delay. The
Indemnifying Party shall have 60 days (or less if the nature of the Asserted
Liability requires) from its receipt of the Claim Notice (the "Notice Period")
to notify the Indemnified Party whether or not the Indemnifying Party desires,
at the Indemnifying Party's sole cost and expense and by counsel of its own
choosing to defend against such Asserted Liability; provided, that if,
40
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
under applicable standards of professional conduct a conflict on any significant
issue between the Indemnifying Party and any Indemnified Party exists in respect
of such Asserted Liability, then the Indemnifying Party shall reimburse the
Indemnified Party for the reasonable fees and expenses of one additional counsel
(who shall be reasonably acceptable to the Indemnifying Party). The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party
(which consent shall not be unreasonably withheld), consent to any settlement
unless such settlement (i) includes a complete release of the Indemnified Party
and (ii) does not require the Indemnified Party to make any payment or forego or
take any action. Notwithstanding the foregoing, the Indemnified Party shall have
the right to control, pay or settle any Asserted Liability which the
Indemnifying Party shall have undertaken to defend so long as the Indemnified
Party shall also waive any right to indemnification therefor by the Indemnifying
Party. If the Indemnifying Party undertakes to defend against such Asserted
Liability, the Indemnified Party shall cooperate fully with the Indemnifying
Party and its counsel in the investigation, defense and settlement thereof, but
the Indemnifying Party shall control the investigation, defense and settlement
thereof. If the Indemnified Party desires to participate in any such defense it
may do so at its sole cost and expense. If the Indemnifying Party elects not to
defend against such Asserted Liability, then the Indemnifying Party shall have
the right to participate in any such defense at its sole cost and expense, but
the Indemnified Party shall control the investigation, defense and settlement
thereof at the reasonable cost and expense of the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any Asserted
Liability effected without its prior written consent (which consent shall not be
unreasonably withheld).
(b) In the event that an Indemnified Party should have a claim
against the Indemnifying Party hereunder which does not involve a claim or
demand being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall send a Claim Notice with respect to such
claim to the Indemnifying Party. The Indemnifying Party shall have 60 days from
the date such Claim Notice is delivered during which to notify the Indemnified
Party in writing of any good faith objections it has to the Indemnified Party's
Claim Notice or claims for indemnification, setting forth in reasonable detail
each of the Indemnifying Party's objections thereto. If the Indemnifying Party
does
41
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
deliver such written notice of objection within such 60-day period, the
Indemnifying Party and the Indemnified Party shall attempt in good faith to
resolve any such dispute within 60 days of the delivery by the Indemnifying
Party of such written notice of objection.
(c) With respect to the liabilities for which Seller shall be
required to provide indemnification pursuant to Section 7.3(a)(i) resulting from
a breach of Section 3.16, (i) the Acquiror Indemnified Parties shall cooperate
with Seller, provide Seller as promptly as possible with all relevant materials,
information and data requested by Seller and shall grant Seller, without charge,
reasonable access to employees and premises of the Snapple Companies, including
the right to conduct environmental tests thereon and to take samples therefrom.
(d) Acquiror acknowledges that the indemnification provisions
contained in this Article VII and in Article VIII constitute Acquiror's sole
remedy with respect to any of the matters arising out of or in connection with
this Agreement, the Disclosure Schedule or any Exhibit hereto. Acquiror
acknowledges and agrees that: (i) Acquiror and its representatives have the
experience and knowledge to evaluate the business, financial condition, assets
and liabilities of the Snapple Companies; and (ii) in determining to acquire the
Shares and, therefore, the Snapple Business and the underlying assets and
liabilities of the Snapple Companies (including the real property, fixtures and
the tangible personal property), Acquiror has made its own investigation into,
and based thereon Acquiror has formed an independent judgment concerning, the
Shares, the Snapple Business and the underlying assets and liabilities of the
Snapple Companies (including the real property, fixtures and the tangible
personal property). It is therefore expressly understood and agreed that, except
as otherwise provided in this Agreement, Acquiror accepts the condition of the
real property and tangible personal property of the Snapple Companies "AS IS,
WHERE IS" without any representation, warranty or guarantee, express or implied,
as to merchantability, fitness for a particular purpose or otherwise as to the
condition, size, extent, quantity, type or value of such property. Acquiror
hereby waives, releases and agrees not to make any claim or bring any
contribution, cost recovery or other action against Seller, its Affiliates, and,
if applicable, their respective directors, officers, shareholders, partners,
attorneys, accountants, agents and employees and their heirs, successors and
42
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
assigns, under the Environmental Laws, common law, or any similar federal, state
or local environmental law or regulation now existing or hereafter enacted other
than for Losses which Seller is expressly required to indemnify Acquiror under
this Article VII. Acquiror agrees that it will not bring any such claim or
action under any Environmental Laws or any other environmental law or regulation
which seeks to allocate liabilities between Acquiror and Seller in a different
manner than as expressly set forth in this Agreement or in a more costly manner
than would be the case under applicable Environmental Laws in effect on the date
hereof.
7.5 Characterization of Indemnification Payments. All amounts paid
by Acquiror or Seller, as the case may be, under this Article VII or Article
VIII shall be treated as adjustments to the Purchase Price for all Tax purposes.
7.6 Computation of Losses; Disputes. The amount of any Losses for
which indemnification is provided under this Article VII or Article VIII shall
be reduced by (x) any related Tax benefits if and when actually realized or
received (but only after taking into account any Tax benefits (including,
without limitation, any net operating losses or other deductions and any
carryovers or carrybacks) to which the Indemnified Party would be entitled
without regard to such item), except to the extent such recovery has already
been taken into account in determining the amount of any such Losses, and (y)
any insurance recovery if and when actually realized or received, in each case
in respect of such Losses. Any such recovery shall be promptly repaid by the
Indemnified Party to the Indemnifying Party following the time at which such
recovery is realized or received pursuant to the previous sentence, minus all
reasonably allocable costs, charges and expenses incurred by the Indemnified
Party in obtaining such recovery. Notwithstanding the foregoing, if (x) the
amount of Indemnifiable Losses for which the Indemnifying Party is obligated to
indemnify the Indemnified Party is reduced by any Tax benefit or insurance
recovery in accordance with the provisions of the previous sentence, and (y) the
Indemnified Party subsequently is required to repay the amount of any such Tax
benefit or insurance recovery or such Tax benefit or insurance recovery is
disallowed, then the obligation of the Indemnifying Party to indemnify with
respect to such amounts shall be reinstated immediately and such amounts
43
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
shall be paid promptly to the Indemnified Party in accordance with the
provisions of this Agreement.
ARTICLE VIII
TAX MATTERS; TAX INDEMNIFICATION
8.1 Tax Indemnification. (a) Seller agrees to be responsible for and
to indemnify and hold the Acquiror Indemnified Parties harmless from and against
any and all Taxes (and claims with respect to Taxes) that may be imposed upon or
assessed against any of the Snapple Companies or the assets of any of the
Snapple Companies:
(i) with respect to all taxable periods ending on or prior
to the Closing Date, except for Taxes arising out of any transaction
occurring after the Closing but on the Closing Date not in the ordinary
course;
(ii) with respect to any and all Taxes of any of the Snapple
Companies for the period allocated to Seller pursuant to Section 8.3(d);
(iii) arising by reason of any breach by Seller of any of the
representations contained in Section 3.9 hereof;
(iv) with respect to any claim under the Asset Purchase Agreement
dated as of January 31, 1992 by and among Snapple Beverage Corp., Snapple
Holding Corp., Unadulterated Food Products, Inc., Hyman Golden, Arnold
Greenberg and Leonard Marsh, including under Section 1.09 of such
agreement;
(v) with respect to all taxable periods ending on or prior to
the Closing Date, any Taxes arising by reason of Treasury Regulation
Section 1.1502-6 or any comparable provision of state, local or foreign
law; and
(vi) arising by reason of a transfer of assets described in
Section 5.6(b).
(b) Acquiror agrees to indemnify and hold harmless the Seller
Indemnified Parties from and against any and all Taxes of the Snapple Companies
(i) with respect to any
44
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
taxable period of the Snapple Companies beginning after the Closing Date, (ii)
arising out of any transaction occurring after the Closing but on the Closing
Date not in the ordinary course and (iii) attributable to the period allocated
to Acquiror pursuant to Section 8.3(d).
8.2 No Tax Elections. Seller and Acquiror acknowledge that no
election will be made under Section 338(a) or Section 338(h)(10) of the Code to
treat the purchase and sale of the Shares pursuant to this Agreement as a sale
of assets for income tax purposes. Seller agrees that neither it nor any
Affiliate will apply for, enter into or make any Tax Agreement, Consent or
Ruling with respect to any of the Snapple Companies, or any of the assets owned
by any Snapple Company on the Closing Date. Further, Seller agrees that neither
it nor any Affiliate will make any Tax election with respect to any of the
Snapple Companies or any of the assets owned by any Snapple Company on the
Closing Date without the consent of Acquiror (which consent shall not be
unreasonably withheld), except for those Tax elections consistent with the prior
practice of the Snapple Companies or required by a change in applicable Tax
laws, rules or regulations.
8.3 Preparation of Tax Returns; Payment of Taxes. (a) Seller shall
include the Snapple Companies or cause the Snapple Companies to be included in,
and shall timely file or cause to be timely filed, (i) the United States
consolidated federal income Tax Returns of Seller or its Affiliates for the
taxable periods of the Snapple Companies ending on or prior to the Closing Date
and (ii) where applicable, all other consolidated, combined or unitary Tax
Returns of Seller or its Affiliates for the taxable periods of Snapple ending on
or prior to the Closing Date, and shall pay any and all Taxes due with respect
to the returns referred to in clause (i) or (ii) of this Section 8.3(a). The Tax
Returns referred to in this Section 8.3(a) shall be prepared in a manner
consistent with the prior practice of the Snapple Companies unless otherwise
required by a change in applicable Tax laws, rules or regulations. Seller shall
provide Acquiror with copies of such Tax Returns, but only to the extent of the
discrete Snapple federal income Tax Return which is made part of and includable
in the United States consolidated federal income Tax Return of Seller and the
discrete Snapple state income tax returns which are made part of and includable
in any consolidated, combined or unitary state Tax Return. Seller shall provide
such Tax Returns (or the portion thereof) to
45
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Acquiror at least 30 days prior to the due date for filing such return, and
Acquiror shall have the right to review and comment on such Tax Returns for 15
days following receipt thereof. Nothing contained in the foregoing shall in any
manner terminate, limit or adversely affect any right of Acquiror Indemnified
Parties, Seller or Snapple to receive indemnification pursuant to any provision
in this Agreement.
(b) In addition to the Tax Returns referred to in Section 8.3(a)
above, Seller shall prepare all other Tax Returns of, or which include, any of
the Snapple Companies for taxable periods that end on, end prior to or which
include the Closing Date. To the extent any such Tax Returns are required to be
filed (taking into account any extensions) on or prior to the Closing Date,
Seller shall timely file or shall cause the Snapple Companies to timely file
such Tax Returns and shall pay any and all Taxes due with respect to such Tax
Returns. To the extent any such Tax Returns are required to be filed after the
Closing Date, and provided that Acquiror has complied with its obligations
pursuant to Section 8.4 in a timely manner so as to permit Seller to perform the
following obligations, (i) Seller shall provide Acquiror with copies of such Tax
Returns and, in the case of those Tax Returns for taxable periods that end after
the Closing Date, a schedule showing the computation of Taxes allocated to each
of Seller and Acquiror (such allocation computed in the manner described in
Section 8.3(d) hereunder) at least 30 days prior to the due date for filing such
Tax Returns (taking into account any extensions), (ii) Acquiror shall have the
right to review and approve (which approval shall not be unreasonably withheld)
such Tax Returns, and in the case of those Tax Returns for taxable periods that
end after the Closing Date, the schedule setting forth the computation of the
allocation of Taxes, (iii) Seller shall pay Acquiror any amount owing from
Seller under Section 8.1(a)(i) and (ii) no later than two Business Days before
the filing of the underlying Tax Returns, and (iv) Acquiror shall timely file or
cause to be timely filed all such Tax Returns and shall pay or cause to be paid
all Taxes due with respect to such Tax Returns, provided, however, that nothing
contained in the foregoing shall in any manner terminate, limit or adversely
affect any right of Acquiror Indemnified Parties, Seller Indemnified Parties or
Snapple to receive indemnification pursuant to the terms of this Agreement. Any
disputes between Seller and Acquiror shall be resolved as provided in Section
8.9.
46
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(c) Acquiror shall reimburse Seller for all costs, expenses and fees
incurred in connection with Seller's preparation of Tax Returns required to be
filed after the Closing Date, including, without limitation, those costs
associated with the services of Seller's employees in connection therewith,
which shall be valued at $140 per hour. Seller shall invoice Acquiror at the end
of each month for such costs, expenses and fees incurred by Seller and Acquiror
shall pay Seller the amount shown as due on such invoice within 15 days of the
invoice date. In the event that Acquiror does not pay Seller within 15 days of
such invoice, interest at the rate of 10% per annum shall accrue on the unpaid
amount. The liability of Acquiror pursuant to this Section 8.3(c) shall not
exceed $50,000.
(d) For federal income tax purposes, the taxable year of Snapple
shall end as of the close of the Closing Date and, with respect to all other
Taxes, Seller and Acquiror will, unless prohibited by Applicable Law, close the
taxable period of the Snapple Companies as of the close of the Closing Date.
Neither Seller nor Acquiror shall take any position inconsistent with the
preceding sentence on any Tax Return. Notwithstanding anything contained herein
to the contrary, Seller and Acquiror shall report all transactions not in the
ordinary course of business occurring after the Closing but on the Closing Date
on Acquiror's federal unconsolidated and other consolidated or combined Tax
Returns. In any case where Applicable Law does not permit Snapple and its
Subsidiaries to close its taxable year on the Closing Date or in any case in
which a Tax is assessed with respect to a taxable period which includes the
Closing Date (but does not begin or end on that day), then Taxes, if any,
attributable to the taxable period of any of the Snapple Companies beginning
before and ending after the Closing Date shall be allocated (i) to Seller for
the period up to and including the Closing Date and (ii) to Acquiror for the
period subsequent to the Closing Date. Any allocation of income or deductions
required to determine any Taxes attributable to any period beginning before and
ending after the Closing Date shall be made by means of a closing of the books
and records of the Snapple Companies as of the close of the Closing Date,
provided that exemptions, allowances or deductions that are calculated on an
annual basis (including, but not limited to, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period.
47
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
8.4 Cooperation with Respect to Tax Returns. Acquiror and Seller
agree to furnish or cause to be furnished to each other, and each at their own
expense, as promptly as practicable, such information (including access to books
and records) and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of any
material provided, relating to the Snapple Companies or the Snapple Business as
is reasonably necessary for the filing of any Tax Return and elections in
respect thereof, for the preparation for any audit, and for the prosecution or
defense of any claim, suit or proceeding relating to any adjustment or proposed
adjustment with respect to Taxes. Acquiror or Snapple shall retain in its
possession, and shall provide Seller reasonable access to (including the right
to make copies of), such supporting books and records and any other materials
that Seller may specify with respect to Tax matters relating to any taxable
period ending on or prior to the Closing Date until the relevant statute of
limitations (or extensions thereof) has expired. After such time, Acquiror may
dispose of such material, provided that prior to such disposition Acquiror shall
give Seller a reasonable opportunity to take possession of such materials.
8.5 Tax Audits. (a) Seller shall have the sole right to represent
the interests of the Snapple Companies in any Tax audit or administrative or
court proceeding relating to taxable periods of the Snapple Companies which end
on or before the Closing Date and to employ counsel of its choice at its
expense. Acquiror agrees that it will cooperate fully with Seller and its
counsel in the defense against or compromise of any claim in any said
proceeding. Seller agrees that it will not settle any such proceeding in a
manner that has a Material Adverse Effect on Acquiror for any taxable period
that ends after the Closing Date. Seller agrees that it will keep Acquiror fully
informed as to the status and resolution of any such proceeding.
(b) If any taxing authority asserts a claim, makes an assessment or
otherwise disputes or affects the Tax reporting position of the Snapple
Companies for taxable periods ending on or prior to the Closing Date, Acquiror
shall, promptly upon receipt by Acquiror or any of the Snapple Companies of
notice thereof, inform Seller thereof.
48
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
(c) Seller and Acquiror jointly shall represent the interests of the
Snapple Companies in any Tax audit or administrative or court proceeding
relating to any taxable period of the Snapple Companies which includes (but does
not begin or end on) the Closing Date. All costs, fees and expenses paid to
third parties in the course of such proceeding shall be borne by Seller and
Acquiror in the same ratio as the ratio in which, pursuant to the terms of this
Agreement, Seller and Acquiror would share the responsibility for payment of the
Taxes asserted by the taxing authority in such claim or assessment if such claim
or assessment were sustained in its entirety.
(d) Acquiror shall have the sole right to represent the interests of
the Snapple Companies in any Tax audit or administrative or court proceeding
relating to taxable periods of the Snapple Companies which begins after the
Closing Date and to employ counsel of its choice at its expense. Acquiror agrees
that it will not settle any such proceeding in a manner which has a Material
Adverse Effect on Seller for any taxable period that ends on, ends prior to or
which includes the Closing Date.
(e) Seller shall not take any position on any Tax Return, Tax refund
claim or in any Tax audit or administrative or court proceeding that is
inconsistent with the representation contained in Section 3.9(h) of this
Agreement, unless otherwise required by applicable Tax laws, rules or
regulations.
8.6 Refund Claims. Seller shall not file any amended Tax Return or
file or apply for any Tax refund with respect to any Snapple Company without the
consent of Acquiror, which consent shall not be unreasonably withheld, it being
understood and agreed that the foregoing shall not apply to the utilization of
any loss arising on the sale of the Shares. Except as otherwise provided in
Section 8.7, to the extent any determination of Tax liability of the Snapple
Companies results in any refund of Taxes paid with respect to (i) any period
which ends on or before the Closing Date or (ii) any period which includes the
Closing Date but does not begin or end on that day, any such refund shall belong
to Seller, provided that any Tax refund described in clause (i) or (ii) of this
Section 8.6 that is attributable to a carryback with respect to state or local
income Taxes arising after the Closing Date shall belong to Acquiror to the
extent that Acquiror is not permitted under the applicable state or local law to
elect to carry forward the
49
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
relevant tax attribute and provided further that in the case of any Tax refund
described in clause (ii) of this Section 8.6 the portion of such Tax refund
which shall belong to Seller shall be that portion that is attributable to the
portion of that period which ends on the Closing Date (determined on the basis
of an interim closing of the books as of the Closing Date), Acquiror shall
promptly pay any such refund that belongs to Seller, and the interest actually
received thereon, to Seller upon receipt thereof by Acquiror. Any payments made
under this Section 8.6 shall be net of any Taxes payable with respect to such
refund, credit or interest thereon (taking into account any actual reduction in
Tax liability realized upon the payment pursuant to this Section 8.6).
8.7 Transfer Taxes. Acquiror shall be liable for and shall pay (and
shall indemnify and hold harmless Seller against) all sales, use, stamp,
documentary, filing, recording, transfer or similar fees or taxes or
governmental charges as levied by any taxing authority or governmental agency in
connection with the transfer of the Shares (other than taxes measured by or with
respect to income imposed on Seller). Acquiror hereby agrees to file all
necessary documents (including, but not limited to, all Tax Returns) with
respect to all such amounts in a timely manner.
8.8 Other Tax Matters. (a) The indemnification provided for in
this Article VIII shall be the sole and exclusive remedy for any claim in
respect of Taxes and the provisions of Article VII (other than Sections 7.5 and
7.6) shall not apply to such claims.
(b) Any claim for indemnity under this Article VIII may be made at
any time prior to 60 days after the expiration of the applicable Tax statute of
limitations with respect to the relevant taxable period (including all periods
of extension, whether automatic or permissive).
8.9 Disputes. If the parties disagree as to the amount of any
payment to be made under, or any other matter arising out of this Article VIII,
the parties shall attempt in good faith to resolve such dispute, and any agreed
upon amount shall be paid to the appropriate party. If such dispute is not
resolved within 15 days, the parties shall, in accordance with the procedures
set forth in Section 2.6(b) for selecting a CPA Firm, select an internationally
recognized firm of independent public accountants to resolve the dispute (the
"Independent Accounting Firm"). If and to
50
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
the extent that the dispute presents legal issues, the Independent Accounting
Firm shall have the authority to consult an Independent Law Firm. The fees of
the Independent Accounting Firm and the Independent Law Firm shall be borne
equally by Seller and Acquiror, and the decision of such Independent Accounting
Firm and Independent Law Firm shall be final and binding on all parties.
Following the decision of the Independent Accounting Firm and/or the Independent
Law Firm, the parties shall each take or cause to be taken any action that is
necessary or appropriate to implement such decision of the Independent
Accounting Firm and the Independent Law Firm.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by agreement of Acquiror and Seller;
(b) by either Acquiror, on the one hand, or Seller, on the other
hand, by giving written notice of such termination to the other, if the Closing
shall not have occurred on or prior to June 30, 1997; provided, however, that
the terminating party is not in breach of its obligations under this Agreement;
or
(c) by Seller if, as a result of action or inaction by Acquiror, the
Closing shall not have occurred on or prior to the later of (i) the date that is
two Business Days following the date on which all of the conditions to Closing
set forth in Sections 6.1 and 6.2 are satisfied or waived or (ii) 60 days after
the date of this Agreement.
9.2 Effect of Termination. In the event of termination by Seller or
Acquiror pursuant to Section 9.1, written notice thereof shall promptly be given
to the other party and, except as otherwise provided herein, the transactions
contemplated by this Agreement shall be terminated and become void and have no
effect, without further action by the other party, other than the provisions of
the last sentence of Section 5.2 and Article X. Nothing in this Section 9.2
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement.
51
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
9.3 Termination Fee. In the event the Closing does not occur on or
before the earlier of the dates set forth in Section 9.1(b) or 9.1(c) for any
reason other than (i) Seller's failure to satisfy the closing conditions set
forth in Section 6.2, or (ii) the non-occurrence of any closing condition set
forth in Section 6.1, then Acquiror agrees to pay Seller either of the following
amounts, immediately upon Seller's demand and election, which election shall be
made in Seller's sole discretion within fourteen (14) days following the earlier
of the dates set forth in Section 9.1(b) or 9.1(c), as applicable: (x) the sum
of $10,000,000 as a termination fee, in which case the parties agree that
payment of such fee shall not relieve Acquiror from liability for its breach
hereunder or be construed as limiting Seller's rights in any manner, except that
such $10,000,000 shall be credited against any damages which may be awarded to
Seller or (y) the sum of $20,000,000 as liquidated damages, which the parties
agree shall be in lieu of any other damages to which Seller might be entitled
hereunder and shall relieve Acquiror from any liability for its breach
hereunder. Any amounts payable to Seller pursuant to this Section 9.3 shall be
applied against the Deposit and the remainder of the Deposit shall be returned
to Acquiror pursuant to the terms of the Escrow Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Extension; Waiver. The parties hereto, by action taken or
authorized by their respective boards of directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
10.2 Amendment. This Agreement may be amended, modified or
supplemented only by written agreement of
52
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
Acquiror and Seller at any time prior to the Closing Date with respect to any of
the terms contained herein.
10.3 Expenses. Each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants and other experts and shall pay
all other costs and expenses incurred by it in connection with the negotiation,
preparation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Except as otherwise specifically provided
herein, Seller shall pay any fees and expenses incurred prior to Closing of any
counsel, accountants and other experts of any of the Snapple Companies and shall
pay all other costs and expenses incurred by any of the Snapple Companies
incurred prior to Closing in connection with the negotiation and preparation of
this Agreement.
10.4 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to choice of law principles, including all matters of construction,
validity and performance.
10.5 Notices. Notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if signed by the respective persons giving them (in the case of any
corporation the signature shall be by an officer thereof) and delivered by hand
or by telecopy or on the date of receipt indicated on the return receipt if
mailed (registered or certified, return receipt requested, properly addressed
and postage prepaid):
If to Seller, to:
The Quaker Oats Company
321 N. Clark Street
Chicago, Illinois 60610
Attention: John G. Jartz
Facsimile: (312) 245-3341
53
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Dennis J. Block, Esq.
Facsimile: (212) 310-8007
and,
If to Acquiror, to:
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
Attention: Brian L. Schorr, Esq.
Facsimile: (212) 451-3216
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Neale M. Albert, Esq.
Facsimile: (212) 373-2377
Such names and addresses may be changed by notice given in accordance with this
Section 10.5.
10.6 Entire Agreement. This Agreement, together with all schedules,
exhibits, annexes, certificates, instruments and agreements delivered pursuant
hereto and the Confidentiality Agreement contain the entire understanding of the
parties hereto and thereto with respect to the subject matter contained herein
and therein, and supersede and cancel all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting such subject matter. There are no restrictions, promises,
representations, warranties, agreements or undertakings of any party hereto with
respect to the transactions contemplated by this Agreement other than those set
forth herein or made hereunder.
10.7 Disclosure Schedule. The Disclosure Schedule is
incorporated into this Agreement by reference and made a part hereof.
54
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
10.8 Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles", "Sections" or "Exhibits" shall be deemed to be
references to Articles or Sections hereof or Exhibits hereto unless otherwise
indicated.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original, but all of
which shall constitute one and the same original.
10.10 Parties in Interest; Assignment. Neither this Agreement nor
any of the rights, interest or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties;
provided, however, that Acquiror may, in its sole discretion, assign any or all
of its rights, interests and obligations to an Affiliate in which event Acquiror
shall guarantee unconditionally and irrevocably the obligations assigned to such
Affiliate in a guarantee agreement in the form attached hereto as Exhibit I.
Subject to the preceding sentence this Agreement shall inure to the benefit of
and be binding upon Seller and Acquiror and shall inure to the sole benefit of
Seller and Acquiror and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies under or by reason of this Agreement.
10.11 Severability; Enforcement. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, each party agrees that a
court of competent jurisdiction may enforce such restriction to the maximum
extent permitted by law, and each party hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
10.12 Consent to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally (i) submits, for itself and its property, to the exclusive
jurisdiction of any Federal Court sitting in New York County of the State of New
York in any suit, action or proceeding arising out of or relating to this
Agreement or for recognition or enforcement
55
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
of any judgment rendered in any such suit, action or proceeding, (ii) waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding in any such court, including any claim that any such
suit, action or proceeding has been brought in an inconvenient forum and (iii)
waives all rights to a trial by jury in any such suit, action or proceeding. Any
and all service of process and any other notice and any such action or
proceeding shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as
provided herein. Nothing herein contained shall be deemed to affect the right of
any party to serve process in any manner permitted by law.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
THE QUAKER OATS COMPANY
By: Luther C. McKinney
-----------------------------
Name: Luther C. McKinney
Title: Senior Vice President
TRIARC COMPANIES, INC.
By: Nelson Peltz Peter W. May
-------------------------------------
Name: Nelson Peltz
Title: Chairman and Chief Executive Officer
and Peter W. May
President and Chief Operating Officer
56
NYFS09...:\69\68669\0030\165\AGRN266W.00J
<PAGE>
EXECUTION COPY
LIST OF OMITTED EXHIBITS
Exhibit A -- Transition Services Agreement
Exhibit B -- Patent License Agreement
Exhibit C -- Shared Technology License Agreement
Exhibit D -- Brooks Agreement
Exhibit E -- Power Packaging Agreement
Exhibit F -- Assignment and Assumption Agreement
Exhibit G -- Opinion of Seller's Counsel
Exhibit H -- Opinion of Acquiror's Counsel
Exhibit I -- Guaranty Agreement
Disclosure Schedules
The Registrant hereby agrees to furnish supplementally a copy of any omitted
exhibit or the Disclosure Schedules to the Securities and Exchange Commission
upon its request.
Exhibit 3.1
TRIARC MERGER CORPORATION
BY-LAWS
(as amended through 3/28/97)
ARTICLE I
Offices
SECTION 1. Registered Office in Delaware. The registered office of
the Corporation (as defined in Article IX below) in the State of Delaware shall
be located at 1209 Orange Street in the City of Wilmington, County of New
Castle, and the name of the resident agent in charge thereof shall be The
Corporation Trust Company.
SECTION 2. Executive Offices. The Corporation shall maintain an
executive office in New York, New York, or such other location as the Board of
Directors shall determine.
SECTION 3. Other Offices. In addition to the registered office in the
State of Delaware and the principal executive office, the Corporation may have
offices at such other places within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
Meeting of Stockholders
SECTION 1. Annual Meetings. The annual meeting of stockholders of the
Corporation for the election of directors and the transaction of such other
business as may be brought before the meeting in accordance with the Certificate
of Incorporation (as defined in Article IX below) and these By-Laws shall be
held on the date and at the time fixed from time to
1
<PAGE>
time by the Board of Directors within thirteen (13) months after the date of the
preceding annual meeting. The annual meeting of stockholders of the Corporation
shall not be called or held otherwise than as provided in the Certificate of
Incorporation or in these By-Laws.
SECTION 2. Special Meeting. Special meetings of stockholders of the
Corporation may be called only at the direction of the Chairman and Chief
Executive Officer, the President and Chief Operating Officer or the Board of
Directors.
SECTION 3. Place of Meeting. Annual and special meetings of
stockholders of the Corporation shall be held at the registered office of the
Corporation in the City of Wilmington, County of New Castle, State of Delaware,
unless some other place within or without the State of Delaware shall have been
fixed by a resolution adopted by the Board and designated in the notice of
meeting.
SECTION 4. Notice of Meetings. Notice of every meeting of
stockholders of the Corporation, annual or special, stating the time, place and,
in general terms, the purpose or purposes thereof, shall be given by the
Chairman and Chief Executive Officer or the President and Chief Operating
Officer or the Secretary of the Corporation to each stockholder of record
entitled to vote at the meeting. Notice of the time, place and purposes of any
annual or special meeting of stockholders may be dispensed with if every
stockholder entitled to notice of and to vote at such meeting shall attend,
either in person or by proxy, or if every absent stockholder entitled to such
notice and vote shall, in a writing or writings filed with the records of the
meeting either before or after the holding thereof, waives such notice.
SECTION 5. Means of Giving Notice. A notice of any annual or
special meeting of stockholders of the Corporation may be given either
personally or by mail or other means of written communication, charges
prepaid, addressed to the stockholder at such stockholder's address
appearing on the books of the Corporation or given by such stockholder to
the Corporation for the purpose of notice. If a stockholder gives no address
to the Corporation for the purpose of notice, notice is duly given to such
stockholder if sent by mail or other means of written communication addressed
to the place where the registered office of the Corporation is situated, or
if published, at least once in a newspaper of general circulation in the county
in which such office is located.
SECTION 6. Time of Notice. Any required notice of any meeting of
stockholders of the Corporation shall be sent to each stockholder entitled
thereto not less than ten (10) nor more than sixty (60) days prior to the date
of the meeting.
SECTION 7. Record Date. The record date for determining stockholders
entitled to notice of and to vote at any meeting of stockholders of the
Corporation shall be that date, not less than ten (10) nor more than sixty (60)
days preceding the date of the meeting, fixed for such purpose by the
affirmative vote of a majority of the Board of Directors, or, if no such date is
fixed for such purpose by the Board of Directors, the date next preceding the
day on which notice of the meeting is given, or, if notice of the meeting is
waived, the day next preceding the day on which the meeting is held.
SECTION 8. List of Stockholders. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten (10) days
before every meeting of stockholders of the Corporation, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
showing the address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at the place where
the meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected by
any stockholder.
SECTION 9. Quorum. At any meeting of stockholders of the Corporation
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding stock of the Corporation entitled to vote shall constitute a
quorum for the transaction of business brought before the meeting in accordance
with the Certificate of Incorporation and these By-Laws and, a quorum being
present, the affirmative vote of the holders of a majority in voting power
present in person or represented by proxy and entitled to vote shall be required
to effect action by stockholders; provided, however, that the affirmative vote
of a plurality in voting power present in person or represented by proxy and
entitled to vote shall be required to effect elections of directors. The
stockholders present at any duly organized meeting of stockholders may continue
to do business until adjournment, notwithstanding the withdrawal of enough
stockholders to have less than a quorum.
SECTION 10. Adjournment. Any meeting of stockholders of the
Corporation may be adjourned from time to time, without notice other than by
announcement at the meeting by the chairman of the meeting at which such
adjournment is taken, and at any such adjourned meeting at which a quorum shall
be present any action may be taken that could have been taken at the meeting
originally called; provided, however, that if the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the adjourned meeting.
SECTION 11. Organization. At every meeting of stockholders of the
Corporation, the Chairman and Chief Executive Officer or, in the absence of such
officer, the President and Chief Operating Officer or, in the absence of both
such officers, such individual as shall have been designated by the Chairman and
Chief Executive Officer, or if such officer has not done so, then by the
President and Chief Operating Officer, or if such officer has not done so, by a
resolution adopted by the affirmative vote of a majority of the Board of
Directors, shall act as chairman of the meeting. The Secretary of the
Corporation or, in the absence of such officer, an Assistant Secretary in
attendance or, in the absence of the Secretary and an Assistant Secretary, an
individual appointed by the chairman of the meeting shall act as secretary of
the meeting and keep a record of the proceedings of the meeting.
SECTION 12. Agenda and Rules of Order. The chairman of the meeting
shall have sole authority to prescribe the agenda and rules of order for the
conduct of any meeting of stockholders of the Corporation and to determine all
questions arising thereat relating to the order of business and the conduct of
the meeting, except as otherwise required by law.
SECTION 13. Conduct of Business at Meetings. Except as otherwise
provided by law, at any annual or special meeting of stockholders of the
Corporation only such business shall be conducted as shall have been properly
brought before the meeting. In order to be properly brought before the meeting,
such business must have either been:
(A) specified in the written notice of the meeting (or any supplement
thereto) given to stockholders of record on the record date for such meeting by
or at the direction of the Board of Directors; or
(B) brought before the meeting at the direction of the Chairman and Chief
Executive Officer, the President and Chief Operating Officer or the Board of
Directors.
SECTION 14. Stockholder Action by Consent. Any action required or
permitted to be taken by the holders of the issued and outstanding stock of the
Corporation may be effected at an annual or special meeting of stockholders or
by the consent in writing of such stockholders or any of them, which writing
shall be filed with the minutes of proceedings of the stockholders.
ARTICLE III
Board of Directors
SECTION 1. Board of Directors. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
SECTION 2. Qualification of Director. Each director shall be at
east eighteen (18) years of age. Directors need not be stockholders of the
Corporation.
SECTION 3. Number of Directors. The Board of Directors shall consist
of not fewer than two (2) nor more than fifteen (15) individuals, the exact
number to be fixed from time to time by the Board of Directors pursuant to a
resolution adopted by a majority of directors then in office.
SECTION 4. Election and Term of Office. The members of the Board of
Directors shall be elected by the stockholders at the annual meeting of
stockholders and each director shall hold office until the annual meeting of
stockholders next succeeding his or her election and until his or her successor
is elected and qualified, or until his or her earlier death, resignation,
retirement, disqualification or removal.
SECTION 5. Vacancies. Any vacancy in the Board of Directors caused by
death, resignation, retirement, disqualification or removal or any other cause
(including an increase in the number of directors) may be filled solely by
resolution adopted by the affirmative vote of a majority of the directors then
in office, whether or not such majority constitutes less than a quorum, or by a
sole remaining director. Any new director elected to fill a vacancy on the Board
of Directors will serve for the remainder of the full term of the director for
which the vacancy occurred. No decrease in the size of the Board of Directors
shall have the effect of shortening the term of any incumbent director.
SECTION 6. Resignation of Directors. Any director may resign at any
time. Such resignation shall be made in writing and shall take effect at the
time specified therein, and if no time be specified, shall take effect at the
time of its receipt by the Chairman and Chief Executive Officer, the President
and Chief Operating Officer or the Secretary of the Corporation. The acceptance
of a resignation shall not be necessary to make it effective, but no resignation
shall discharge any accrued obligation or duty of a director.
SECTION 7. Removal of Directors. A duly elected director of the
Corporation may be removed from such position, with or without cause, only by
the affirmative vote of the holders of two-thirds (2/3) of the voting power of
the outstanding capital stock of the Corporation entitled to vote in the
election of directors, voting as a single class.
SECTION 8. Quorum of Directors. Except as otherwise required by
law or by the Certificate of Incorporation or by these By-Laws, (i) a majority
of the directors in office at the time of a duly assembled meeting shall
constitute a quorum and be sufficient for the transaction of business, and (ii)
any act of a majority of the directors present at a meeting at which there is a
quorum shall be the act of the Board of Directors.
SECTION 9. Place of Meeting. Subject to the provisions of Section
10 of this Article III, the Board of Directors may hold any meeting at such
place or places within or without the State of Delaware as it may determine.
SECTION 10. Organization Meeting. After each annual meeting of
stockholders of the Corporation, the Board of Directors shall meet immediately
at the place where such meeting of stockholders was held for the purpose of
organization, election of Executive Officers (as defined in Section 1 of Article
V), and the transaction of other business.
SECTION 11. Regular Meetings. Regular meetings of the Board of
Directors may be held at such times and at such places within or without the
State of Delaware as the Board of Directors shall from time to time determine.
SECTION 12. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman and Chief Executive Officer, the
President and Chief Operating Officer or any two directors, and any such meeting
shall be held at such time and at such place within or without the State of
Delaware as shall be specified in the notice of meeting.
SECTION 13. Notice of Meetings. Subject to the provisions of Section
10 of this Article III, notice of the place, day and hour of every meeting of
the Board of Directors shall be given to each director by mailing such notice at
least two (2) days before the meeting to his or her last known address or by
personally delivering, telegraphing or telephoning such notice to him or her at
least twenty-four (24) hours before the meeting.
SECTION 14. Organization. The Chairman and Chief Executive Officer
or, in the absence of such officer, the President and Chief Operating Officer
shall call meetings of the Board of Directors to order and shall act as the
chairman thereof. In the absence of the Chairman and Chief Executive Officer
and the President and Chief Operating Officer, a majority of the directors
present may elect as chairman of the meeting any director present. The
Secretary of the Corporation or, in the absence of such officer, an Assistant
Secretary in attendance or, in the absence of the Secretary and an Assistant
Secretary, an individual appointed by the chairman of the meeting shall act as
a secretary of the meeting and keep a record of the proceedings of the meeting.
SECTION 15. Order of Business. Unless otherwise determined by the
Board of Directors the order of business and rules of order at any meeting of
the Board of Directors shall be determined by the chairman of the meeting.
SECTION 16. Adjournment. Any meeting of the Board of Directors may be
adjourned from time to time by a majority of the directors present, whether or
not they shall constitute a quorum, and no notice shall be required of any
adjourned meeting beyond the announcement of such adjournment at the meeting.
SECTION 17. Action by Board of Directors Without a Meeting. Unless
otherwise restricted by the Certificate of Incorporation or these By-Laws, any
action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if all the
members of the Board or the committee, as the case may be, consent thereto in
writing and the writings are filed with the minutes of the proceedings of the
Board of Directors or committee, as the case may be.
SECTION 18. Action by Conference Telephone. Unless otherwise
restricted by the Certificate of Incorporation or these By-Laws, members
of the Board of Directors or of any committee thereof may participate in a
meeting of the Board of Directors or of such committee, as the case may be,
by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other,
and participation in a meeting in such manner shall constitute presence in
person at such a meeting.
SECTION 19. Compensation. Each director, in consideration of his or
her serving as such, shall be entitled to receive from the Corporation such
compensation as the Board of Directors shall from time to time determine,
together with reimbursement for reasonable expenses incurred by him or her in
attending meetings of the Board of Directors. Each director who shall serve as a
member of any committee of the Board of Directors, in consideration of his or
her serving as such, shall be entitled to such additional compensation as the
Board of Directors shall from time to time determine, together with
reimbursement for reasonable expenses incurred by him or her in attending
meetings of such committee. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
ARTICLE IV
Committees of Directors
SECTION 1. Committees. The Board of Directors may appoint one or more
committees, which may include as members directors only or directors and
non-directors, as the Board of Directors may from time to time consider
desirable, and such committees shall have such powers and duties as the Board of
Directors shall determine and as shall be specified in the
resolution of appointment; provided, however, that the powers and duties of any
such committee whose members shall include non-directors shall be limited to
making recommendations to the Board of Directors.
SECTION 2. Committee Vacancies. Any member of a committee appointed
pursuant to this Article IV shall serve at the pleasure of the Board of
Directors, which Board shall have the power at any time to remove any member,
with or without cause, and to fill vacancies in the membership of a committee.
No committee appointed pursuant to this Article IV shall have the power to fill
any vacancy in the membership of such committee. Any committee appointed
pursuant to Section 1 of this Article IV shall exist at the pleasure of the
Board of Directors, which Board shall have the power at any time to change the
powers and duties of any such committee or to dissolve it.
SECTION 3. Committee Meetings. Regular meetings of a committee
appointed pursuant to this Article IV shall be held at such times and at such
places within or without the State of Delaware as the Board of Directors or the
committee shall from time to time determine, and no notice of such regular
meetings shall be required. Special meetings of any committee may be called by
the chairman of such committee or by the Chairman and Chief Executive Officer or
by the President and Chief Operating Officer, and shall be called by the
Secretary of the Corporation on the written request of any member of such
committee. Notice of a special meeting of any committee shall be given to each
member thereof by mailing such notice at least forty-eight (48) hours, or by
personally delivering, telegraphing or telephoning the same at least eighteen
(18) hours, before the meeting. It shall not be requisite for the validity of
any meeting of any committee that notice thereof shall have been given to any
committee member who is present at the meeting or, if absent, waives notice
thereof in writing filed with the records of the meeting either before or after
the holding thereof. The majority of the members of a committee shall
constitute a quorum for the transaction of committee business, and the act of a
majority of the members present at any meeting at which there is a quorum shall
be the act of the committee. A committee shall keep regular minutes of its
meetings and all action taken or resolutions adopted shall be reported to the
Board of Directors at the meeting of the Board next following such action.
ARTICLE V
Officers
SECTION 1. Executive Officers. At the organization meeting of the
Board of Directors following the annual meeting of stockholders, the Board of
Directors shall elect as executive officers of the Corporation a Chairman and
Chief Executive Officer, a President and Chief Operating Officer, a Secretary
and a Treasurer, and may elect as executive officers of the Corporation one or
more Chairmen Emeritus, Vice Chairmen, Executive Vice Presidents and Senior Vice
Presidents. All such executive officers elected by the Board of Directors are
referred to in these By-Laws as "Executive Officers." The Board of Directors may
from time to time appoint such other officers and agents of the Corporation as
the interests of the Corporation may require and may fix their duties and terms
of office. To the extent permitted by law, any number of offices may be held by
the same person.
SECTION 2. Other Officers. In addition to the Executive Officers
elected by the Board of Directors pursuant to Section 1 of this Article V, the
Chairman and Chief Executive Officer and the President and Chief Operating
Officer may from time to time appoint such other
officers of the Corporation, including, Vice Presidents, Assistant Vice
Presidents, Staff Vice Presidents, Assistant Secretaries, Assistant Treasurers
and Controllers, as the interests of the Corporation may require (the "Other
Officers"); provided, however, that no Other Officer may be appointed to the
office of Chairman Emeritus, Vice Chairman, President and Chief Operating
Officer, Executive Vice President, Senior Vice President, Secretary or
Treasurer. Each appointment of an Other Officer shall be in writing and shall
set forth the duties of the Other Officer being appointed and, subject to
Section 3 of this Article V, such officer's term of office.
SECTION 3. Term of Office. Each Executive Officer shall hold office
until the organization meeting of the Board of Directors following the annual
meeting of stockholders next succeeding such officer's election and until such
officer's successor is elected and qualified, or until such officer's earlier
death, resignation, retirement or removal. Each Other Officer shall hold office
for a term to be decided by the appointing Chairman and Chief Executive Officer
or President and Chief Operating Officer, as the case may be; provided, however,
that no such term shall be for a period longer than the term of office of the
appointing Chairman and Chief Executive Officer or President and Chief Operating
Officer.
SECTION 4. Removal of Officers. Any Executive Officer or Other
Officer may be removed from office with or without cause at any time by the
affirmative vote of a majority of the Board of Directors. Any Other Officer may
be removed from office at any time with or without cause by the Chairman and
Chief Executive Officer or President and Chief Operating Officer.
SECTION 5. Vacancies. A vacancy in any Executive Office or Other
Office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. A vacancy in any Other Office arising from any
cause may be filled for the unexpired portion of the term by the Chairman and
Chief Executive Officer or President and Chief Operating Officer.
SECTION 6. Compensation of Officers. The salaries or compensation, if
any, of the Executive Officers shall be fixed by the Board of Directors or the
Compensation Committee of the Board of Directors, if their be one. The salaries
or compensation of the Other Officers and division officers, if there be any,
may be fixed from time to time by the Board of Directors, the Chairman and Chief
Executive Officer or the President and Chief Operating Officer.
SECTION 7. Chairman and Chief Executive Officer. The Chairman and
Chief Executive Officer shall be Chairman of the Board of Directors and of the
Executive Committee, if any, shall be the chief executive officer of the
Corporation and, subject to the control of the Board of Directors, shall have
general charge and control of the business and affairs of the Corporation with
power and authority, when acting in the ordinary course of business of the
Corporation, in the name and on behalf of the Corporation and under its seal
attested by the Secretary or an Assistant Secretary of the Corporation, or
otherwise, to (i) execute and deliver agreements, contracts, certificates and
other instruments, (ii) purchase and accept delivery of stocks, bonds, evidences
of interest and indebtedness, rights and options to acquire the same, and all
other securities, whether negotiable or non-negotiable, (iii) sell, assign,
transfer and deliver all stocks, bonds, evidence of interest and indebtedness,
rights and options to acquire the same, and all other securities, corporate or
otherwise, now or hereafter standing in the name of or owned beneficially by the
Corporation, (iv) open and maintain accounts with banking institutions,
including investment banks and brokerage firms, and (v) borrow from banks and
other financial
institutions, including investment banks and brokerage firms, such sums of money
for such periods of time and upon such terms as such officer shall deem
necessary or appropriate, and execute and deliver notes, other evidences of
indebtedness and agreements for the repayment of any sums so borrowed in the
name and on behalf of the Corporation; provided, however, that no borrowing
pursuant to this clause (v) shall have an original maturity of more than one
year. Such officer shall preside at all meetings of stockholders of the
Corporation and the Board of Directors at which such officer is present. Such
officer shall perform all other duties and enjoy all other powers which are
commonly incident to the office of Chairman and Chief Executive Officer, or are
delegated to such officer from time to time by the Board of Directors or are or
may at any time be authorized or required by law.
SECTION 8. Chairman Emeritus and Vice Chairmen of the Board. The
Chairman Emeritus and Vice Chairmen of the Board, if there be any, shall be
members of the Board of Directors and shall have such powers and perform such
duties as may from time to time be assigned to them by the Board of Directors,
the Chairman and Chief Executive Officer or the President and Chief Operating
Officer.
SECTION 9. President and Chief Operating Officer. The President and
Chief Operating Officer shall be a member of the Board of Directors and of the
Executive Committee, if any, shall be the chief operating officer of the
Corporation responsible for directing, administering and coordinating the
business operations of the Corporation in accordance with policies, goals and
objectives established by the Board of Directors and the Chairman and Chief
Executive Officer with power and authority, when acting in the ordinary course
of business of the Corporation, in the name and on behalf of the Corporation and
under its seal attested by the
Secretary or an Assistant Secretary of the Corporation, or otherwise, to, (i)
execute and deliver agreements, contracts, certificates and other instruments,
(ii) purchase and accept delivery of stocks, bonds, evidences of interest and
indebtedness, rights and options to acquire the same, and all other securities,
whether negotiable or non-negotiable, (iii) sell, assign, transfer and deliver
all stocks, bonds, evidences of interest and indebtedness, rights and options to
acquire the same, and all other securities, corporate or otherwise, now or
hereafter standing in the name of or owned beneficially by the Corporation, (iv)
open and maintain accounts with banking institutions, including investment banks
and brokerage firms, and (v) borrow from banks and other financial institutions,
including investment banks and brokerage firms, such sums of money for such
periods of time and upon such terms as such officer shall deem necessary or
appropriate, and execute and deliver notes, other evidences of indebtedness and
agreements for the repayment of any sums so borrowed in the name and on behalf
of the Corporation; provided, however, that no borrowing pursuant to this clause
(v) shall have an original maturity of more than one year. Such officer shall
perform all other duties and enjoy all other powers which are commonly incident
to the office of President and Chief Operating Officer or which are delegated to
such officer by the Board of Directors or the Chairman and Chief Executive
Officer. In the absence of the Chairman and Chief Executive Officer, the
President and Chief Operating Officer shall perform all duties and may exercise
all powers of the Chairman and Chief Executive Officer and shall preside at
meetings of stockholders of the Corporation and the Executive Committee.
SECTION 10. Executive Vice Presidents, Senior Vice Presidents and
Vice Presidents Elected by the Board. The Executive Vice Presidents, the Senior
Vice Presidents and the Vice Presidents elected by the Board of Directors
pursuant to Section 1 of this Article V, if
there be any, shall have such powers and perform such duties as may from time to
time be assigned to them by the Board of Directors, the Chairman and Chief
Executive Officer or the President and Chief Operating Officer.
SECTION 11. Secretary. The Secretary shall record the proceedings of
all meetings of stockholders of the Corporation and of the Board of Directors
which such officer attends in a book or books to be kept for that purpose. Such
officer shall attend to the giving and serving of all notices on behalf of the
Corporation, shall have custody of the records and the seal of the Corporation
and shall affix the seal to any instrument which requires the seal of the
Corporation. Such officer shall, in general, perform all the duties and
functions incident to the office of Secretary and shall also perform such other
duties as may from time to time be assigned to such officer by the Board of
Directors, the Chairman and Chief Executive Officer or the President and Chief
Operating Officer.
SECTION 12. Treasurer. The Treasurer shall have custody and control
of all funds and securities of the Corporation, except as otherwise provided by
the Board of Directors. Such officer shall keep full and accurate accounts of
all receipts and disbursements of the Corporation in books to be kept for that
purpose, shall deposit all money and other valuable effects in the name and to
the credit of the Corporation in such depositories as may be designated by the
Board of Directors, and shall render to the Chairman and Chief Executive
Officer, the President and Chief Operating Officer or the Board of Directors,
whenever any of them may require it, an account of all such officer's
transactions as Treasurer and an account of the financial condition of the
Corporation. Such officer shall also perform such other duties as may from time
to time be assigned to such officer by the Board of Directors, the Chairman and
Chief Executive Officer or the President and Chief Operating Officer.
SECTION 13. Powers and Duties of Other Officers. The Other Officers
shall have such powers and perform such duties as may from time to time be
assigned to them by the Board of Directors, the Chairman and Chief Executive
Officer or the President and Chief Operating Officer.
ARTICLE VI
Capital Stock
SECTION 1. Certificates. Each stockholder of the Corporation shall be
entitled to a certificate or certificates signed by or in the name of the
Corporation by the Chairman and Chief Executive Officer, the President and Chief
Operating Officer, an Executive Vice President or a Senior Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, certifying the number of shares of stock of the Corporation owned by
such stockholder. Any or all of the signatures on the certificates may be a
facsimile.
In case any officer, Transfer Agent or Registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, Transfer Agent or Registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he, she
or it was such officer, Transfer Agent or Registrar at the date of issue.
All certificates of each class or series shall be consecutively
numbered and shall be entered in the books of the Corporation as they are
issued. Every certificate shall certify the name of the Person owning the shares
represented thereby, with the number of shares and the date of issue. The names
and addresses of all Persons owning shares of the Corporation, with the number
of shares owned by each and the date or dates of issue of the shares held by
each, shall be entered in the books of the Corporation kept for that purpose by
the proper officers, agents or employees of the Corporation.
The Corporation shall be entitled to treat the holder of record of
any share or shares of stock of the Corporation as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other Persons, whether
or not it has actual or other notice thereof, except as provided by law.
SECTION 2. Cancellation of Certificates. All certificates surrendered
to the Corporation shall be cancelled and, except in the case of lost, stolen or
destroyed certificates, no new certificates shall be issued until the former
certificate or certificates for the same number of shares of the same class of
stock have been surrendered and cancelled.
SECTION 3. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of the fact
by the Person claiming the certificate or certificates to be lost, stolen or
destroyed. In its discretion and as a condition precedent to the issuance of any
such new certificate or certificates, the Board of Directors may require that
the owner of such lost, stolen or destroyed certificate or certificates, or such
Person's legal representative, advertise the same in such manner as the Board
shall require and/or give the Corporation and its Transfer Agent or Agents,
Registrar or Registrars a bond in such form and amount as the Board of Directors
may direct as indemnity against any claim that may be made against the
Corporation and its Transfer Agent or Agents, Registrar or Registrars, and that
the owner requesting such new certificate or certificates obtain a final order
or decree of a court of competent jurisdiction as such owner's right to receive
such new certificate or certificates.
SECTION 4. Transfer of Shares. Shares of stock shall be
transferable on the books of the Corporation by the holder thereof, in
person or by duly authorized attorney, upon the surrender of the certificate
or certificates representing the shares to be transferred, properly endorsed,
with such proof or guarantee of the authenticity of the signature as the
Corporation or its agents may reasonably require.
SECTION 5. Transfer Agents and Registrars. The Corporation may have
one or more Transfer Agents and one or more Registrars of its stocks, whose
respective duties the Board of Directors may define from time to time. No
certificate of stock shall be valid until countersigned by a Transfer Agent, if
the Corporation shall have a Transfer Agent, or until registered by the
Registrar, if the Corporation shall have a Registrar. The duties of Transfer
Agent and Registrar may be combined.
SECTION 6. Closing of Transfer Books and Fixing of Record Date. The
Board of Directors shall have power to close the stock transfer books of the
Corporation for a period not exceeding sixty (60) days preceding the date of any
meeting of stockholders, or the date for payment of any dividend, or the date
for the allotments of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or for a period not exceeding
sixty (60) days in connection with obtaining the consent of stockholders for any
purpose, provided, however, that in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date, which shall not be
more than sixty (60) days nor less than ten (10) days before the date of any
meeting of stockholders nor more than sixty (60) days before the date for
the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent, as a record date
for the determination of the stockholders entitled to notice of, and to vote at,
any such meeting and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the rights
in respect of any such change, conversion or exchange of capital stock, or to
give such consent, and in such case such stockholders, and only such
stockholders as shall be stockholders of record on the date so fixed, shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
ARTICLE VII
Contracts, Checks, Drafts, Proxies
SECTION 1. Execution of Contracts. The Board of Directors may
authorize any Executive or Other Officer, agent or employee of the Corporation
to enter into any contract or execute and deliver any instrument in the name or
on behalf of the Corporation, and such authority may be general or confined to
specific instances, and, unless so authorized by the Board of Directors, no
Executive or Other Officer, agent or employee except the Chairman and Chief
Executive Officer and the President and Chief Operating Officer shall have any
power or authority to bind the Corporation by any contract or to pledge its
credit or to render it liable pecuniarily for any purpose or to any amount.
SECTION 2. Loans. Except as otherwise provided in these By-Laws, no
loan shall be contracted in the name or on behalf of the Corporation, and no
evidence of indebtedness shall be issued, endorsed or accepted in its name, or
on its behalf, unless authorized by the Board of Directors. Such authority may
be general or confined to specific instances. When so authorized, the Executive
or Other Officer, agent or employee thereunto authorized may effect loans and
advances at any time for the Corporation from any Person (including any bank,
trust company or other institution) and for such loans and advances may make,
execute and deliver promissory notes or other evidences of indebtedness of the
Corporation, and, when authorized as aforesaid, as security for the payment of
any and all loans and advances may make, execute and deliver promissory notes or
other evidences of indebtedness and liabilities of the Corporation, may
mortgage, pledge, hypothecate or transfer any real or personal property at any
time owned or held by the Corporation, and to that end execute instruments of
mortgage or pledge or otherwise transfer such property.
SECTION 3. Checks, Drafts, etc. All checks, drafts, bills of exchange
or other orders for the payment of money, obligations, notes or other evidences
of indebtedness, bills of lading, warehouse receipts and insurance certificates
of the Corporation, shall be signed or endorsed by the Chairman and Chief
Executive Officer, the President and Chief Operating Officer or such other
Executive Officer or Other Officer, agent, attorney, or employee of the
Corporation as shall from time to time be determined by the Board of Directors,
the Chairman and Chief Executive Officer or the President and Chief Operating
Officer.
SECTION 4. Proxies in Respect of Securities of Other Corporations.
The Chairman and Chief Executive Officer, the President and Chief Operating
Officer and such other Executive or Other Officers as are designated by
the Chairman and Chief Executive Officer or the President and Chief Operating
Officer are authorized to vote by casting a ballot in person or by voting
by proxy on behalf of the Corporation the shares owned by the Corporation of
the stock or other securities in any other Corporation at meetings of the
holders of the stock or other securities of such other corporation, or to
consent in writing, in the name of the Corporation as such holder, to any
action by such other corporation.
ARTICLE VIII
Indemnification
The Corporation shall, and by reason of the enactment of this By-Law
hereby does, indemnify each and every individual (including his or her heirs,
executors and assigns) who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
or she is or was a director, Executive Officer or Other Officer of the
Corporation, or, while a director, Executive Officer or Other Officer of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with such action,
suit or proceeding, to the full extent that it has the power to do so under
Delaware Law. Such indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under the Certificate of
Incorporation or under any agreement, contract of insurance, vote of
stockholders or disinterested directors, or otherwise, or of the broader power
of the Corporation to indemnify a director, Executive Officer, Other Officer,
employee or agent of the Corporation as authorized by Delaware Law.
ARTICLE IX
Definitions
For purposes of these By-Laws, the following terms shall have the meanings
set forth below:
"Corporation" shall mean Triarc Merger Corporation.
"Delaware Law" shall mean the General Corporation Law of the State of
Delaware, as amended from time to time.
"Executive Officers" shall have the meaning set forth in Section 1 of
Article V of these By-Laws.
"Other Officer" shall have the meaning set forth in Section 2 of Article V
of these By-Laws.
"Person" shall mean any individual, firm, corporation or other entity.
"Certificate of Incorporation" shall mean the Certificate of Incorporation
of the Corporation, as from time to time amended.
"Voting Shares" shall mean any issued and outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors.
ARTICLE X
Miscellaneous
SECTION 1. Books and Records. The books and records of the
Corporation may be kept at such places within or without the State of Delaware
as the Board of Directors may from time to time determine. The stock record
books and the blank stock certificate books shall be kept by the Secretary or by
any other officer or agent designated by the Board of Directors.
SECTION 2. Dividends and Reserves. The Board of Directors, from time
to time, may determine whether any, and, if any, what part of its net profits of
the Corporation, or of its net assets in excess of its capital, available
therefor pursuant to law and the Certificate of Incorporation, shall be declared
by it as dividends on the stock of the Corporation. The Board of Directors, in
its discretion, in lieu of declaring any such dividend, may use and apply any of
such net profits or net assets as a reserve for working capital, to meet
contingencies, for the purpose of maintaining or increasing the property or
business of the Corporation or for any other lawful purpose which it may think
conducive to the best interests of the Corporation.
SECTION 3. Seal. The corporate seal of the Corporation shall be in
the form of a circle and shall bear the name of the Corporation and the year
and state of its incorporation.
SECTION 4. Fiscal Year. The fiscal year of the Corporation shall
end on the last day of December in each year unless the Board of Directors shall
determine otherwise.
ARTICLE XI
Amendments
All By-Laws of the Corporation shall be subject to alteration, amendment
or repeal, in whole or in part, and new By-Laws not inconsistent with Delaware
Law or any provision of the Certificate of Incorporation may be made, by (i) the
affirmative vote of stockholders holding not
less than two-thirds of the voting power of the Voting Shares (as defined in
Article IX above) of the Corporation then entitled to vote on such issue, or
(ii) the affirmative vote of not less than a majority of all of the directors of
the Corporation then holding office and entitled to vote on such issue.
(try-f01\forms\by-laws\tri-merg)
2
<PAGE>
Exhibit 4.1
CONSENT, WAIVER AND AMENDMENT
November 5, 1996
NATIONAL PROPANE, L.P.
Suite 1700
IES Tower
200 First Street
Cedar Rapids, Iowa 52401
Ladies and Gentlemen:
Reference is hereby made to (i) the Credit Agreement dated as of June 26,
1996 by and among National Propane, L.P. (the "Company"), The First National
Bank of Boston, as Administrative Agent and a Lender (the "Administrative
Agent"), Bank of America NT & SA, as a Lender, and BA Securities, Inc., as
Syndication Agent (the "Credit Agreement"); (ii) the several Note Agreements
dated as of June 26, 1996 among the Company, National Propane Corporation,
National Propane SGP, Inc. and the investors name therein (the "Note Holders")
(the "Note Agreements"); (iii) that certain Letter dated as of July 2, 1996 of
the Company, accepted and agreed to by the Administrative Agent and incorporated
in the Note Agreements as Exhibit R thereto (the "Side Letter"); (iv) the
Intercreditor and Trust Agreement dated as of June 26, 1996 among the Company,
National Propane Partners, L.P., National Propane Corporation, The Bank of New
York, as Trustee (the "Trustee"), the Note Holders, the Banks party thereto and
certain other parties party thereto from time to time (the "Trust Agreement");
and (v) the Pledge and Security Agreement dated as of June 26, 1996 among the
Company, National Propane Corporation, the Trustee, and other parties party
thereto from time to time (the "Security Agreement"). All capitalized terms not
defined herein shall have the meanings assigned to them in the Credit
1
<PAGE>
Agreement and the Note Agreements.
Paragraph (v) of the Side Letter required the Company, within ninety (90)
days from the date of the Closing, to (A) use reasonable efforts to provide or
cause to be provided to the Lenders and Note Holders legal descriptions for all
leased properties (those leasehold properties for which legal descriptions have
been obtained, the "Included Properties") and (B) provide or cause to be
provided to the Lenders legal descriptions for certain Required Properties (as
defined therein), excluding the Required Properties listed in the proviso
thereto (together with all other leased real properties that are not Required
Properties or Included Properties, the "Excluded Properties").
The obligations of the Company in paragraph (v) of the Side Letter
reflects the fact that Uniform Commercial Code and other filings with respect to
fixtures (the "Fixture Filings") located at the leased real property of the
Company could not be made until legal descriptions for such properties, which
had not been obtained as of the Closing Date, were obtained. In addition,
Paragraph (v) of the Side Letter reflects the intention of the Note Holders and
the Lenders to relieve the Company from the obligation to make Fixture Filings
and perfect a security interest in fixtures located at Excluded Properties for
which legal descriptions were not obtained despite the use by the Company of its
reasonable efforts to obtain the same. Notwithstanding the Side Letter, the
Credit Agreement, the Note Agreements and the Security Agreement contain
provisions requiring the Company to have made all the Fixture Filings
(including, without limitation, with respect to fixtures located at the Excluded
Properties) on or prior to the Closing Date in order to create a valid and duly
perfected security interest in favor of the Trustee in all such Collateral.
In addition, notwithstanding the Side Letter, Section 4.14 of the Security
Agreement requires the Company, within 120 days after the Closing Date, to
deliver to the Trustee a certificate executed by a financial officer of the
Company setting forth, with respect to each filing, recording or registration
contemplated by Section 4.01 thereof (including, without limitation, Fixture
Filings with respect to the Included Properties, the Required Properties and the
Excluded Properties),
2
<PAGE>
the filing office date and file number thereof and attaching true, correct and
complete acknowledgment copies of each such filing, recording or registration
(the "Filing Certificate").
Accordingly, for good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, each of the undersigned Note Holders,
constituting collectively the Required Holders, each of the undersigned Lenders,
constituting collectively the Required Lenders (and together with the Required
Holders, constituting collectively the Requisite Percentage (as defined in the
Trust Agreement)), and the Trustee, hereby agree, consent, waive and amend all
provisions of the Credit Agreement, the Note Agreements, the Security Agreement
and each other Operative Agreement to give effect to the following:
1. The Company shall not be required to make Fixture
Filings with respect to the Excluded Properties for
which legal descriptions have not been obtained as of
the date hereof; and
2. The Company shall have (x) 60 days from the date hereof to make
Fixture Filings with respect to the Included Properties and the
Required Properties (other than the Excluded Properties) and (y) 120
days from the date hereof to deliver the Filing Certificate.
In addition, the undersigned Note Holders, Lenders and Trustee hereby
waive any Default, Potential Event of Default or Event of Default resulting from
the failure of the Company to take the actions referred to in the foregoing
paragraph on or prior to the dates required therefor in the Credit Agreement,
the Note Agreements and the Security Agreement, provided, that the Company files
the Fixture Filings with respect to the Included Property and the other Required
Properties (other than the Excluded Properties) within 60 days from the date
hereof and delivers the Filing Certificate to the Trustee within 120 days from
the date hereof.
3
<PAGE>
Each of the Note Holders represents and warrants to the Company that it is
the registered owner of the principal amount of Notes set forth below its name
on the signature pages hereto. Each of the Lenders represents and warrants to
the Company that it is the holder of the aggregate principal amount of
outstanding Loans, aggregate amount of letter of credit exposure and aggregate
amount of unused Commitments set forth below its name on the signature pages
hereto.
This Consent, Waiver and Amendment shall become effective as of the date
first above written when the Company shall have received counterparts of this
Consent, Waiver and Amendment that, when taken together, bear the signatures of
the Company, the Required Holders, the Required Lenders, the Requisite
Percentage
and the Trustee.
This Consent, Waiver and Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
This Consent, Waiver and Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute the same instrument.
4
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below.
Very truly yours,
REQUIRED LENDERS:
THE FIRST NATIONAL BANK OF BOSTON
By: Michael P. Hannon
------------------------------
Name: Michael P. Hannon
Title: Director
Principal Amount of outstanding
Loans: $1,049,090.90
Aggregate amount of Letter of Credit
Exposure: $0.00
Aggregate amount of Unused
Commitments: $18,950,909.10
BANK OF AMERICA NT & SA
By: David E. Sisler
--------------------------------
Name: David E. Sisler
Title: Vice President
Principal Amount of outstanding
Loans: $1,049,090.90
Aggregate amount of Letter of Credit
Exposure: $0.00
Aggregate amount of Unused
Commitments: $18,950.909.10
UNION BANK OF CALIFORNIA, N.A.
By: Walter M. Roth
---------------------------------
Name: Walter M. Roth
Title: Vice President
Principal Amount of outstanding
Loans: $786,818.20
Aggregate amount of Letter of Credit
5
<PAGE>
Exposure: $0.00
Aggregate amount of Unused
Commitments: $14,213,181.80
6
<PAGE>
REQUIRED HOLDERS:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
-------------------------------
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
$15,000,000
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf
of its Separate Account 66
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
-------------------------------
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
$3,000,000
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
----------------------------------
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
$3,000,000
7
<PAGE>
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: John Litchfield
--------------------------------------
Name: John Litchfield
Title: Director--Private Placements
Principal Amount of Notes:
$21,000,000
MIDWESTERN UNITED LIFE INSURANCE
COMPANY
Principal Amount of Notes: $2,000,000
PEERLESS INSURANCE COMPANY
Principal Amount of Notes: $2,000,000
SECURITY LIFE OF DENVER INSURANCE
COMPANY
Principal Amount of Notes: $4,000,000
By: ING Investment Management, Inc.,
its Agent
By: Fred C. Smith
--------------------------------
Name: Fred C. Smith
Title: Senior Vice President &
Managing Director
GENERAL AMERICAN LIFE INSURANCE
COMPANY
By: Conning Asset Management Company
By: Douglas R. Koester
-------------------------------------
Name: Douglas R. Koester
Title: Senior Vice President
Principal Amount of Notes:
$5,000,000
8
<PAGE>
JEFFERSON-PILOT LIFE INSURANCE
COMPANY
By: James E. McDonald
------------------------------------
Name: James E. McDonald
Title:
Principal Amount of Notes:
$6,000,000
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: Richard A. Strait
--------------------------------
Name: Richard A. Strait
Title: Vice President
Principal Amount of Notes:
$23,000,000
PACIFIC MUTUAL LIFE INSURANCE
COMPANY
By: William R. Schmidt
---------------------------------
Name: William R. Schmidt
Title: Assistant Vice President
Principal Amount of Notes:
$6,000,000
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: Clint Woods
---------------------------------
Name: Clint Woods
Title: Counsel
Principal Amount of Notes:
$13,000,000
TMG LIFE INSURANCE COMPANY
9
<PAGE>
By: The Mutual Group (U.S.), Inc., its
agent
By: _____________________________
Name:
Title:
Principal Amount of Notes:
$2,000,000
KEYPORT LIFE INSURANCE COMPANY
By: Stein Roe & Farnham Incorporated,
as agent
By: _____________________________
Name:
Title:
Principal Amount of Notes:
$12,000,000
NORTHERN LIFE INSURANCE COMPANY
By: _____________________________
Name:
Title:
Principal Amount of Notes:
$3,000,000
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By: _____________________________
Name:
Title:
Principal Amount of Notes:
$5,000,000
TRUSTEE:
10
<PAGE>
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By: Mark G. Walsh
----------------------------------
Name: Mark G. Walsh
Title: Assistant Vice President
11
<PAGE>
The foregoing Consent, Waiver and Acceptance is hereby accepted as of the date
first written:
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its managing general partner
By: Ronald R. Rominiecki
--------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President & CFO
L:\LEGAL\NPC\AGMTS\CONSENT1.WPD
12
<PAGE>
Exhibit 4.2
SECOND CONSENT, WAIVER AND AMENDMENT
January 14, 1997
NATIONAL PROPANE, L.P.
Suite 1700
IES Tower
200 First Street
Cedar Rapids, Iowa 52401
Ladies and Gentlemen:
Reference is hereby made to (i) the Credit Agreement dated as of June 26,
1996 by and among National Propane, L.P. (the "Company"), The First National
Bank of Boston, as Administrative Agent and a Lender (the "Administrative
Agent"), Bank of America NT & SA, as a Lender, and BA Securities, Inc., as
Syndication Agent (as amended, the "Credit Agreement"); (ii) the several Note
Agreements each dated as of June 26, 1996 among the Company, National Propane
Corporation, National Propane SGP, Inc. and the investors named therein (the
"Note Holders") (as amended, the "Note Agreements"); (iii) that certain Letter
dated as of July 2, 1996 of the Company, accepted and agreed to by the
Administrative Agent and incorporated in the Note Agreements as Exhibit R
thereto (the "Side Letter"); (iv) the Intercreditor and Trust Agreement dated as
of June 26, 1996 among the Company, National Propane Partners, L.P., National
Propane Corporation, The Bank of New York, as Trustee (the "Trustee"), the Note
Holders, the Banks party thereto and certain other parties party thereto from
time to time (the "Trust Agreement"); (v) the Pledge and Security Agreement
dated as of June 26, 1996 among the Company, National Propane Corporation, the
Trustee, and other parties party thereto
1
<PAGE>
from time to time (as amended, the "Security Agreement"); and (vi) the Consent,
Waiver and Amendment dated as of November 5, 1996 by the Lenders (as defined in
the Credit Agreement), the Administrative Agent, the Noteholders and the Trustee
and accepted by National Propane. All capitalized terms not defined herein shall
have the meanings assigned to them in the Credit Agreement and the Note
Agreements.
2
<PAGE>
Section 6.14(a) of the Credit Agreement requires that the Company "deliver
to the Trustee and the Administrative Agent within six calendar months of the
Closing Date" original certificates of title of the Company's motor vehicles and
other rolling stock. Section 10.14(a) of the Note Agreements also requires that
the Company "deliver to the Trustee and . . . special counsel [to the Note
Holders (i.e., Debevoise & Plimpton)] within six calendar months of the date of
the Closing" originals of such certificates of title.
In addition, pursuant to Section 4.01(c) of the Security Agreement, the
Company covenants that it "will cause the certificates of title to the motor
vehicles and rolling stock set forth on Schedule 10 [to the Security Agreement]
to have been . . . delivered on or prior to six calendar months of the Closing
Date by the applicable department of motor vehicles, [in order] to perfect the
security interests granted to the Trustee in such motor vehicles and other
rolling stock." Finally, pursuant to Section 4.23 of the Security Agreement,
"[w]ithin six calendar months after the Closing Date," the Company covenants to
deliver "to the Trustee a complete set of certificates of title to all of the
motor vehicles and other rolling stock evidencing the perfected security
interests of the Trustee."
Under the laws of certain of the states in which the Company's motor
vehicles and other rolling stock are located, such states do not issue
certificates of title for certain motor vehicles and other rolling stock, such
as those which were manufactured before a certain year (e.g., in New York,
vehicles manufactured before 1973) or are of a certain type and weight (e.g., in
New York, trailers with an unladen weight less than 1,000 lbs.).
In addition, certificates of title for approximately 10 vehicles have not
been delivered to the Trustee, the Administrative Agent and Debevoise & Plimpton
because the appropriate departments of motor vehicles have indicated that liens
to third parties remain on such vehicles (the "Encumbered Certificates").
Although the Company believes that these liens do not reflect any current
indebtedness of the Company, it has not yet been able to contact the lien
holders to arrange for the release of such liens.
Finally, although the Company has complied with the other requirements of
the Credit Agreement, the Note Agreements, the Security Agreement and the Side
Letter pertaining to the granting and perfection of security interests in the
Company's motor vehicles and other rolling stock, and despite the Company's best
efforts, certificates of title for approximately 10% of the Company's motor
vehicles and other rolling stock have not been returned to the Company or
delivered to the Trustee by the appropriate departments of motor vehicles within
six calendar
3
<PAGE>
months of the Closing Date (such certificates of title, the "Outstanding
Certificates"). The Company hereby represents that it has filed all Outstanding
Certificates with the appropriate departments of motor vehicles.
Accordingly, for good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, each of the undersigned Note Holders, each of
the undersigned Lenders and the Trustee hereby agree, consent, waive and amend
all provisions of the Credit Agreement, the Note Agreements, the Security
Agreement and each other Operative Agreement to give effect to the following:
1. The Company shall not be required to obtain or deliver to the
Trustee, the Administrative Agent or Debevoise & Plimpton any
certificate of title for any motor vehicle or other rolling stock of
the Company for which no such certificate of title is issued
pursuant to the laws of the state in which such motor vehicle or
other rolling stock is registered; and
2. The Company shall use its reasonable best efforts to deliver, or to
cause to be delivered, as soon as possible, to the Trustee, the
Administrative Agent and Debevoise & Plimpton, any Encumbered
Certificates, free and clear of any third party liens, and any
Outstanding Certificates, in all cases reflecting liens granted in
the name of the Trustee.
In addition, the undersigned Note Holders, Lenders and Trustee hereby
waive any Default, Potential Event of Default or Event of Default resulting from
the failure of the Company to take the actions referred to in the foregoing
paragraph on or prior to the dates required therefor in the Credit Agreement,
the Note Agreements and the Security Agreement, provided, that the Company (i)
promptly takes any additional steps, if any, necessary or reasonably requested
by the Trustee to perfect the security interests granted in all of the Company's
uncertificated motor vehicles and other rolling stock and (ii) continues to use
its reasonable best efforts to deliver, or to cause to be delivered to the
Trustee, the Administrative Agent and Debevoise & Plimpton, any Encumbered
Certificates and Outstanding Certificates until all Encumbered Certificates and
Outstanding Certificates have been delivered in accordance with clause 2 of the
preceding paragraph.
Each of the Note Holders represents and warrants to the Company that it is
the registered owner of the principal amount of Notes set forth below its name
on the signature pages hereto. Each of the Lenders represents and warrants to
the Company that it is the holder of the aggregate principal amount of
outstanding
4
<PAGE>
Loans, aggregate amount of letter of credit exposure and aggregate amount of
unused Commitments set forth below its name on the signature pages hereto.
This Second Consent, Waiver and Amendment shall become effective as of the
date first above written when the Company shall have received counterparts of
this Second Consent, Waiver and Amendment that, when taken together, bear the
signatures of the Company, the Required Holders, the Required Lenders, the
Requisite Percentage and the Trustee.
This Second Consent, Waiver and Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
This Second Consent, Waiver and Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute the same instrument.
If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below.
Very truly yours,
REQUIRED LENDERS:
THE FIRST NATIONAL BANK OF BOSTON
By: Michael P. Hannon
Name: Michael P. Hannon
Title: Director
Principal Amount of outstanding
Loans: $1,049,090.90
Aggregate amount of Letter of
Credit
Exposure: $0.00
Aggregate amount of Unused
Commitments: $18,950,909.10
5
<PAGE>
BANK OF AMERICA NT & SA
By: David E. Sisler
Name: David E. Sisler
Title: Vice President
Principal Amount of outstanding
Loans: $1,049,090.90
Aggregate amount of Letter of Credit
Exposure: $0.00
Aggregate amount of Unused
Commitments: $18,950.909.10
UNION BANK OF CALIFORNIA, N.A.
By: Walter M. Roth
Name: Walter M. Roth
Title: Vice President
Principal Amount of outstanding
Loans: $786,818.20
Aggregate amount of Letter of Credit
Exposure: $0.00
Aggregate amount of Unused
Commitments: $14,213,181.80
REQUIRED HOLDERS:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
$15,000,000
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on behalf
of its Separate Account 66
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
3,000,000
6
<PAGE>
LIFE INSURANCE COMPANY OF
NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: James G. Schelling
Name: James G. Schelling
Title: Managing Director
Principal Amount of Notes:
$3,000,000
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: John Litchfield
Name: John Litchfield
Title: Director--Private Placements
Principal Amount of Notes:
$21,000,000
MIDWESTERN UNITED LIFE INSURANCE
COMPANY
Principal Amount of Notes: $2,000,000
PEERLESS INSURANCE COMPANY
Principal Amount of Notes: $2,000,000
SECURITY LIFE OF DENVER INSURANCE
COMPANY
Principal Amount of Notes: $4,000,000
By: ING Investment Management, Inc.,
its Agent
By: Fred C. Smith
Name: Fred C. Smith
Title: Senior Vice President &
Managing Director
7
<PAGE>
GENERAL AMERICAN LIFE INSURANCE
COMPANY
By: Conning Asset Management Company
By: ___________________________
Name:
Title:
Principal Amount of Notes:
$5,000,000
JEFFERSON-PILOT LIFE INSURANCE
COMPANY
By: ________________________________
Name:
Title:
Principal Amount of Notes:
$6,000,000
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: Richard A. Strait
Name: Richard A. Strait
Title: Vice President
Principal Amount of Notes:
$23,000,000
PACIFIC MUTUAL LIFE INSURANCE
COMPANY
By: ________________________________
Name:
Title:
Principal Amount of Notes:
$6,000,000
8
<PAGE>
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: Christopher Henderson
Name: Christopher Henderson
Title: Counsel
By: Clint Woods
Name: Clint Woods
Title: Counsel
Principal Amount of Notes:
$13,000,000
TMG LIFE INSURANCE COMPANY
By: The Mutual Group (U.S.), Inc., its
agent
By:______________________________
Name:
Title:
Principal Amount of Notes:
$2,000,000
KEYPORT LIFE INSURANCE COMPANY
By: Stein Roe & Farnham Incorporated,
as agent
By:______________________________
Name:
Title:
Principal Amount of Notes:
$12,000,000
NORTHERN LIFE INSURANCE COMPANY
By:______________________________
Name:
Title:
Principal Amount of Notes:
$3,000,000
9
<PAGE>
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By: ___________________________
Name:
Title:
Principal Amount of Notes:
$5,000,000
TRUSTEE:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Trustee
By: Mark G. Walsh
Name: Mark G. Walsh
Title: Assistant Vice President
The foregoing Consent, Waiver and Acceptance is hereby accepted as of the date
first written:
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
Its managing general partner
By: David C. Watson, Esq.
Name: David C. Watson, Esq.
Title: Senior Vice President--Administration &
General Counsel
L:\LEGAL\NPC\AGMTS\CONSENT2.WPD
10
<PAGE>
EXHIBIT 4.3
************************************************************
C.H. PATRICK & CO., INC.
and
TRIARC COMPANIES, INC.*
-----------------------------
CREDIT AGREEMENT
Dated as of May 16, 1996
------------------------------
INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION,
as Administrative Agent
THE FIRST NATIONAL BANK OF BOSTON,
as Co-Agent
************************************************************
* Solely for the purposes of Sections 6 and 12 (other than Section 12.03)
24184999
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement
to which it is attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters.................. 1
1.01 Certain Defined Terms............................... 1
1.02 Accounting Terms and Determinations................. 17
1.03 Classes and Types of Loans.......................... 18
1.04 References to Subsidiaries.......................... 18
Section 2. Commitments, Loans, Notes and Prepayments........... 19
2.01 Loans............................................... 19
2.02 Borrowings.......................................... 19
2.03 Letters of Credit................................... 19
2.04 Changes of Commitments.............................. 23
2.05 Commitment Fee...................................... 23
2.06 Lending Offices..................................... 23
2.07 Several Obligations; Remedies Independent........... 23
2.08 Notes............................................... 24
2.09 Optional Prepayments and Conversions or
Continuations of Loans........................... 24
2.10 Mandatory Prepayments and Reductions of Commitments. 25
Section 3. Payments of Principal and Interest.................. 26
3.01 Repayment of Loans.................................. 26
3.02 Interest............................................ 28
Section 4. Payments; Pro Rata Treatment; Computations; Etc..... 29
4.01 Payments............................................ 29
4.02 Pro Rata Treatment.................................. 30
4.03 Computations........................................ 30
4.04 Minimum Amounts..................................... 30
4.05 Certain Notices..................................... 30
4.06 Non-Receipt of Funds by the Administrative Agent.... 31
4.07 Sharing of Payments, Etc............................ 32
Section 5. Yield Protection, Etc............................... 33
5.01 Additional Costs.................................... 33
5.02 Limitation on Types of Loans........................ 35
5.03 Illegality.......................................... 35
5.04 Treatment of Affected Loans......................... 35
5.05 Compensation........................................ 36
5.06 Additional Costs in Respect of Letters of Credit.... 36
5.07 U.S. Taxes.......................................... 37
5.08 Mitigation.......................................... 38
Section 6. Guarantee; Other Triarc Matters..................... 38
6.01 The Guarantee....................................... 38
6.02 Obligations Unconditional........................... 38
6.03 Reinstatement....................................... 39
6.04 Subrogation......................................... 39
-i-
24184999
<PAGE>
Page
6.05 Remedies............................................ 39
6.06 Instrument for the Payment of Money................. 39
6.07 Continuing Guarantee................................ 40
6.08 Rights of Contribution.............................. 40
6.09 General Limitation on Guarantee Obligations......... 40
6.10 Representations and Warranties of Triarc............ 41
6.11 Covenants of Triarc.................................. 41
Section 7. Conditions Precedent................................ 42
7.01 Initial Extension of Credit......................... 42
7.02 Initial and Subsequent Extensions of Credit......... 45
Section 8. Representations and Warranties...................... 46
8.01 Corporate Existence................................. 46
8.02 Financial Condition................................. 46
8.03 Litigation.......................................... 46
8.04 No Breach........................................... 46
8.05 Action.............................................. 47
8.06 Approvals........................................... 47
8.07 Use of Credit....................................... 47
8.08 ERISA............................................... 47
8.09 Taxes............................................... 47
8.10 Investment Company Act.............................. 47
8.11 Public Utility Holding Company Act.................. 47
8.12 Material Agreements and Liens....................... 48
8.13 Environmental Matters............................... 48
8.14 Capitalization...................................... 49
8.15 Investments; Subsidiaries, Etc...................... 50
8.16 Title to Assets..................................... 50
8.17 True and Complete Disclosure........................ 50
8.18 Real Property....................................... 50
8.19 Management Agreements, Etc.......................... 50
Section 9. Covenants of the Company............................ 51
9.01 Financial Statements, Etc........................... 51
9.02 Litigation.......................................... 53
9.03 Existence, Etc...................................... 53
9.04 Insurance........................................... 54
9.05 Prohibition of Fundamental Changes.................. 56
9.06 Limitation on Liens................................. 56
9.07 Indebtedness........................................ 57
9.08 Investments......................................... 58
9.09 Dividend Payments................................... 58
9.10 Minimum EBITDA...................................... 58
9.11 Leverage Ratio...................................... 59
9.12 Interest Coverage Ratio............................. 60
9.13 Fixed Charges Ratio................................. 60
9.14 Capital Expenditures................................ 61
9.15 Interest Rate Protection Agreements................. 61
9.16 Lines of Business................................... 61
9.17 Transactions with Affiliates........................ 61
-ii-
24184999
<PAGE>
Page
9.18 Management Fees..................................... 62
9.19 Use of Proceeds..................................... 62
9.20 Subsidiaries; Etc................................... 62
9.21 Modifications of Certain Documents.................. 62
Section 10. Events of Default.................................. 63
Section 11. The Agents......................................... 65
11.01 Appointment, Powers and Immunities................. 65
11.02 Reliance by Agent.................................. 66
11.03 Defaults........................................... 66
11.04 Rights as a Lender................................. 66
11.05 Indemnification.................................... 66
11.06 Non-Reliance on Agents and Other Lenders........... 67
11.07 Failure to Act..................................... 67
11.08 Resignation or Removal of Agent.................... 67
11.09 Agency Fee......................................... 68
11.10 Consents under Other Basic Documents............... 68
Section 12. Miscellaneous...................................... 68
12.01 Waiver............................................. 68
12.02 Notices............................................ 68
12.03 Expenses, Etc...................................... 68
12.04 Amendments, Etc.................................... 69
12.05 Successors and Assigns............................. 70
12.06 Assignments and Participations..................... 70
12.07 Survival........................................... 72
12.08 Captions........................................... 72
12.09 Counterparts....................................... 72
12.10 Governing Law; Submission to Jurisdiction.......... 72
12.11 Waiver of Jury Trial............................... 72
12.12 Confidentiality.................................... 72
-iii-
24184999
<PAGE>
SCHEDULE I - Liens, Litigation and Material Agreements
SCHEDULE II - Environmental Matters
SCHEDULE III - Investments and Indebtedness
SCHEDULE IV - Real Property
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term A Loan Note
EXHIBIT A-3 - Form of Term B Loan Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Pledge and Security Agreement
EXHIBIT D - Form of Pledge Agreement
EXHIBIT E-1 - Form of Mortgage
EXHIBIT E-2 - Form of Leasehold Mortgage
EXHIBIT F - Form of Opinion of New York Counsel to the Obligors
EXHIBIT G - Form of Opinion of South Carolina Counsel to the Company
EXHIBIT H - Form of Confidentiality Agreement
EXHIBIT I - Form of Assignment Agreement
-iv-
24184999
<PAGE>
CREDIT AGREEMENT dated as of May 16, 1996, between: C.H. PATRICK &
CO., INC., a corporation duly organized and validly existing under the laws of
the State of South Carolina (the "Company"); TRIARC COMPANIES, INC. (only with
respect to Sections 6 and 12 (other than Section 12.03)), a corporation duly
organized and validly existing under the laws of the State of Delaware ("Triarc"
and, together with any Subsidiary Guarantor created or established pursuant to
Section 9.20(a) hereof (each, a "Subsidiary Guarantor"), the "Guarantors"; and
the Guarantors collectively with the Company, the "Obligors"); each of the
lenders that is a signatory hereto identified under the caption "LENDERS" on the
signature pages hereto or that, pursuant to Section 12.06(b) hereof, shall
become a "Lender" hereunder (individually, a "Lender" and, collectively, the
"Lenders"); INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware
Corporation, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"); and THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, as co-agent for the Lenders (in
such capacity, together with its successors in such capacity, the "Co-Agent"
and, together with the Administrative Agent, the "Agents").
The Company is engaged in the business of manufacturing, distributing
and selling dyes and other chemicals and related products, and in related
businesses. The Company has requested that the Lenders extend credit to the
Company in an aggregate principal amount not exceeding $50,000,000 to finance
the operations of the Company and the Subsidiary Guarantors, and for general
corporate purposes.
To induce the Lenders to extend such credit, the Obligors, the
Lenders and the Administrative Agent propose to enter into this Agreement
pursuant to which the Lenders will make loans to, and issue letters of credit
for account of, the Company, and each Guarantor will guarantee the credit so
extended to the Company and certain Obligors (other than Triarc) will agree to
execute and deliver mortgages, pledge agreements and/or security agreements
providing for security interests and liens to be granted by such Obligors on
certain of their respective Properties as collateral security for the
obligations of the Obligors to the Lenders and the Administrative Agent
hereunder. Each of the Obligors expects to derive benefit, directly or
indirectly, from the credit so extended to the Company.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company. As
used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise). Notwithstanding the foregoing,
(a) none of the Wholly Owned Subsidiaries of the Company shall be Affiliates,
and (b) neither the Administrative Agent, the Co-Agent nor any Lender shall be
an Affiliate.
"Applicable Lending Office" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or such
other office of such Lender (or of an affiliate of such Lender) as such Lender
may from time to time specify to the Administrative Agent and the Company as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, with respect to each Loan, the
percentage per annum set forth below:
24184999
<PAGE>
Applicable Margin (% p.a.)
Base Eurodollar
Loan Rate Loans Loans
Term Loan A 1.75 2.75
Term Loan B 2.25 3.25
Revolving Credit Loan 1.75 2.75
"Avondale Mills" means Avondale Mills, Inc., an Alabama corporation.
"Avondale Mills Receivables" shall mean, as at any date, all
Receivables at such date payable by Avondale Mills or any of its Affiliates to
the Company or any Subsidiary Guarantor.
"Avondale Supply Agreement" shall mean the Supply Agreement dated
March 31, 1996 between Avondale Mills and the Company.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"Base Rate" shall mean, for any day, the fluctuating rate per annum
that shall be in effect from time to time, which rate per annum shall at all
times be equal to the higher of (a) the Federal Funds Rate for such day plus 1/2
of 1% and (b) the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in the Base
Rate shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the
Notes, the Letter of Credit Documents and the Security Documents.
"BKB" shall mean The First National Bank of Boston.
"Borrowing Base" shall mean, as at any date, the sum of the following:
(a) 85% of the aggregate amount of Eligible Receivables at said date,
plus
(b) 75% of the aggregate amount of Eligible Avondale Mills
Receivables at said date, plus
(c) the lesser of (i) 50% of the aggregate value of Eligible
Inventory at said date, and (ii) $10,000,000, plus
(d) the aggregate amount of cover for Letter of Credit Liabilities
held by the Administrative Agent as at said date in the Collateral Account
as contemplated in Section 2.10(g) hereof, minus
(e) $50,000, which is estimated to approximate an amount equal to two
times the average aggregate monthly commissions or processing fees payable
to bailees, warehousemen, terminal operators, third-party processors or
other third parties holding Inventory during the period of two fiscal
quarters of the Company most recently ended on or before said date.
The "value" of Eligible Inventory shall be determined at the lower of cost or
market in accordance with GAAP, except that cost shall be determined on a
first-in-first-out basis.
-2-
24184999
<PAGE>
"Borrowing Base Certificate" shall mean a certificate of the
President or a senior financial officer of the Company, substantially in the
form of Exhibit B hereto and appropriately completed.
"Business Day" shall mean (a) any day on which commercial banks are
not authorized or required to close in New York City and (b) if such day relates
to the giving of notices in connection with a borrowing of, a payment or
prepayment of principal of or interest on, a Conversion of or into, or an
Interest Period for, a Eurodollar Loan or a notice by the Company with respect
to any such borrowing, payment, prepayment, Conversion or Interest Period, any
day on which dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Expenditures" shall mean, for any period, the aggregate of
all expenditures (including, without limitation, the aggregate amount of Capital
Lease Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period determined in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as capital lease
obligations on a balance sheet of such Person under GAAP, and, for purposes of
this Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Carry Forward Year" shall have the meaning set forth in Section
9.08(e).
"Casualty Event" shall mean, with respect to any material Property of
any Person, any material loss of or material damage to, or any condemnation or
other taking of, such Property for which such Person or any of its Subsidiaries
receives insurance proceeds, or proceeds of a condemnation award or other
similar compensation.
"Change of Control" shall mean (i) that any Person or two or more
Persons acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act) of more than 50% of the outstanding shares of common stock of
Triarc (other than Nelson Peltz and Peter May and any of their respective
Affiliates, including, without limitation, DWG Acquisition Group, L.P., or any
Affiliate thereof); or (ii) at any time, a majority of the board of directors of
Triarc shall no longer be composed of individuals (a) who were members of the
board of directors on the date of this Agreement, or (b) whose election or
nomination to said board was approved by the individuals referred to in clause
(a) above constituting at the time of such election or nomination at least a
majority of said board, or (c) whose election or nomination to said board was
approved by individuals referred to in clauses (a) and (b) above constituting at
the time of such election or nomination at least a majority of said board.
"Class" shall have the meaning assigned to such term in Section 1.03
hereof.
"Closing Date" shall mean the date upon which the initial extension
of credit hereunder is made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral Account" shall have the meaning assigned to such term in
Section 4.01 of the Security Agreement.
"Commitments" shall mean the Revolving Credit Commitments and the
Term Loan Commitments.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
-3-
24184999
<PAGE>
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.09 hereof of one Type of Loan into another Type of Loan,
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.
"Debt Service" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all payments of principal of
Indebtedness (including, without limitation, the principal component of any
payments in respect of Capital Lease Obligations) scheduled to be made during
such period plus (b) all Interest Expense for such period.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of any Property sold or disposed of in
the ordinary course of business.
"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Subsidiaries), but excluding
dividends payable solely in shares of common stock of the Company; provided,
however, that the term "Dividend Payment" shall not include any payments made by
the Company under the Tax Sharing Agreement or the Management Services
Agreement.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum, for the Company and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net operating income (calculated
(x) before income taxes, Interest Expense, extraordinary items (including, for
any period ended on or before March 31, 1996, any amounts thereof in respect of
the litigation referred to in the definition of "Sequa Settlement Agreement" in
this Section 1.01) and income or loss attributable to equity in Affiliates, but
(y) after any amounts paid in respect of Management Fees for such period) for
such period plus (b) depreciation and amortization (to the extent deducted in
determining net operating income) for such period plus (or minus) (c) any other
non-cash expenses (or income) deducted (or added) in determining net operating
income minus (d) any cash payments made in connection with previous non-cash
restructuring charges or non-recurring charges.
"Eligible Avondale Mills Receivables" shall mean, as at any date, the
aggregate amount of all Avondale Mills Receivables, which are subject to a first
priority perfected security interest in favor of the Administrative Agent on
behalf of the Lenders, at such date payable to the Company or any Subsidiary
Guarantor other than the following (determined without duplication):
(a) any Avondale Mills Receivable not payable in Dollars,
(b) any Avondale Mills Receivable that, at the date of issuance of
the invoice therefor, was payable:
(i) with respect to shipments of Inventory made prior to April
29, 1998, more than 90 days;
-4-
24184999
<PAGE>
(ii) with respect to shipments of Inventory made after April 29,
1998 and prior to April 29, 2001, more than 60 days; and
(iii) with respect to shipments of Inventory made after April
29, 2001, more than 30 days after shipment of the related Inventory,
(c) any Avondale Mills Receivable if the Majority Lenders (through
the Administrative Agent) have notified the Company, in writing at least
30 days prior to such date, that such account debtor does not have a
satisfactory credit standing (as determined in the sole discretion of the
Majority Lenders, provided that during such 30 day period, the Company
will be entitled to present to the Administrative Agent such evidence to
persuade the Majority Lenders otherwise),
(d) any Avondale Mills Receivable that is more than 10 Business Days
past due,
(e) all Avondale Mills Receivables if more than 20% of the aggregate
amount of such Receivables are more than 10 Business Days past due,
(f) any Avondale Mills Receivable as to which there is any unresolved
dispute (which dispute continues unresolved for more than 30 days) with
the account debtor (but only to the extent of the amount thereof in
dispute),
(g) any Avondale Mills Receivable evidenced by an Instrument (as
defined in the Security Agreement) not in the possession of the Administrative
Agent, and
(h) any Avondale Mills Receivable representing an obligation for
goods sold on consignment, approval or a sale-or-return basis or subject
to any other repurchase or return arrangement.
"Eligible Inventory" shall mean, as at any date, all Inventory:
(i) that is owned by (and in the possession or under the control of)
the Company or any Subsidiary Guarantor as at such date,
(ii) that is located in a jurisdiction in the United States of
America,
(iii) that is subject to a first priority perfected security interest
in favor of the Administrative Agent on behalf of the Lenders,
(iv) that is in good condition,
(v) that meets all material standards imposed by any governmental
agency or department or division thereof having regulatory authority over
such Inventory, its use or sale, and
(vi) that is either currently usable or currently saleable in the
normal course of such Obligor's business without any notice to, or consent
of, any governmental agency or department or division thereof
(excluding however, except to the extent that the Majority Lenders otherwise
agree with respect to any specific customer, any such Inventory that has been
shipped to a customer of such Obligor, even if on a consignment or "sale or
return" basis), provided that (x) upon a determination by the Company that the
aggregate value of any Inventory at such date is less than 90% of its original
aggregate value, the amount of the net decrease in such aggregate value shall
cease to be "Eligible Inventory" and (y) the Majority Lenders (through the
Administrative Agent) may, upon at least 30 days prior written notice to the
Company, at any time exclude from Eligible Inventory any type of Inventory that
the Majority Lenders (in their sole discretion) determine to be unmarketable,
provided that during such 30 day
-5-
24184999
<PAGE>
period, the Company will be entitled to present to the Administrative Agent such
evidence to persuade the Majority Lenders otherwise.
"Eligible Receivables" shall mean, as at any date, the aggregate
amount of all Receivables, which are subject to a first priority perfected
security interest in favor of the Administrative Agent on behalf of the Lenders,
at such date payable to the Company or any Subsidiary Guarantor, other than the
following (determined without duplication):
(a) any Receivable not payable in Dollars,
(b) any Receivable that, at the date of issuance of the invoice
therefor, was payable more than 60 days after shipment of the related
Inventory,
(c) any Receivable owing from a Subsidiary or Affiliate of such
Obligor,
(d) any Receivable owing from an account debtor whose principal place
of business is located outside of the United States of America or Canada,
(e) any Receivable owing from an account debtor that the Majority
Lenders (through the Administrative Agent) have notified the Company, in
writing at least 30 days prior to such date, does not have a satisfactory
credit standing (as determined in the sole discretion of the Majority
Lenders, provided that during such 30 day period, the Company will be
entitled to present to the Administrative Agent such evidence to persuade
the Majority Lenders otherwise),
(f) any Receivable that is unpaid for more than 90 days after
shipment of the related Inventory,
(g) all Receivables of any account debtor if more than 20% of the
aggregate amount of the Receivables owing from such account debtor are
more than 60 days past due,
(h) with respect to any account debtor (other than Avondale Mills)
whose Receivables comprise in the aggregate more than 20% of all
Receivables then payable to the Company or any Subsidiary Guarantor, that
percentage of such Receivables in excess of 20%,
(i) any Receivable as to which there is any unresolved dispute (which
dispute continues unresolved for more than 30 days) with the respective
account debtor (but only to the extent of the amount thereof in dispute),
(j) any Receivable evidenced by an Instrument (as defined in the
Security Agreement) not in the possession of the Administrative Agent,
(k) all Avondale Mills Receivables, and
(l) any Receivable representing an obligation for goods sold on
consignment, approval or a sale-or-return basis or subject to any other
repurchase or return arrangement.
"Environmental Claim" shall mean, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any
-6-
24184999
<PAGE>
claim by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to the
environment.
"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders or
decrees, in each case as now or hereafter in effect, relating to the regulation
or protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants or toxic or hazardous
substances, chemicals or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or toxic or hazardous substances, chemicals
or wastes.
"Equity Issuance" shall mean any issuance or sale by the Company or
any of its Subsidiaries after the Closing Date of (i) any capital stock, (ii)
any warrants or options exercisable in respect of capital stock (other than (a)
any stock appreciation rights or similar rights issued to officers or employees
of the Company or any of its Subsidiaries and (b) any warrants or options issued
to directors, officers or employees of the Company or any of its Subsidiaries
pursuant to employee benefit plans established in the ordinary course of
business and any capital stock of the Company issued upon the exercise of such
warrants and options) or (iii) any other security or instrument representing an
equity interest (or the right to obtain any equity interest) in the Company or
any of its Subsidiaries; provided that Equity Issuance shall not include (x) any
such issuance or sale by any Subsidiary of the Company to the Company or any
Wholly Owned Subsidiary of the Company or (y) any capital contribution by the
Company or any Wholly Owned Subsidiary of the Company to any Subsidiary of the
Company.
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.
"Eurodollar Loans" shall mean Loans that bear interest at the
Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for
any Interest Period therefor, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal
to the quotient of (a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%), reported, at 11:00 a.m. (London time) on the date two
Business Days prior to the first day of such Interest Period, on Telerate Access
Service Page 3750 (British Bankers Association Settlement Rate) as the London
interbank offered rate for Dollar deposits having a term comparable to the
duration of such Interest Period and in an amount equal to or greater than
$1,000,000, divided by (b) 1 minus the Reserve Requirement (if any) for such
Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 10 hereof.
"Excess Cash Flow" shall mean, for any fiscal year (a "calculation
year"), the excess of:
(a) EBITDA for such calculation year, over
-7-
24184999
<PAGE>
(b) the sum of the following:
(i) the aggregate amount of Capital Expenditures and Permitted
Acquisitions made during such calculation year (except for any such
Capital Expenditures to the extent financed with the proceeds of
Indebtedness, or Capital Lease Obligations, incurred pursuant to
Section 9.07(d) hereof during such period), plus
(ii) the aggregate amount (if any) of Capital Expenditures and
Permitted Acquisitions permitted to be carried forward from such
calculation year to the immediately following fiscal year pursuant to
Section 9.08(e) hereof, minus
(iii) the aggregate amount (if any) of Capital Expenditures and
Permitted Acquisitions permitted to be carried forward to such
calculation year from the fiscal year immediately preceding such
calculation year pursuant to Section 9.08(e), plus
(iv) the aggregate amount of Debt Service for such period, plus
(v) increases (or minus decreases) in the working capital accounts
for accounts receivable, inventory, prepaid expenses net of accounts
payable and accrued expenses, minus
(vi) provision for income tax expense for such period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average of the quotations for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
"Fee Letters" shall mean, collectively, (a) the fee letter, dated the
date hereof between the Company and ING and (b) the fee letter, dated the date
hereof between the Company and BKB, in each case relating to fees payable by the
Company in connection with this Agreement.
"Fixed Charges Ratio" shall mean,
(i) with respect to the Fixed Charges Ratio calculated pursuant to Section
9.13(a) hereof, as at any date, the ratio of (a) Free Cash Flow for the
respective fiscal quarters specified therein to (b) Debt Service for such
period, and
(ii) with respect to the Fixed Charges Ratio calculated pursuant to
Section 9.13(b) hereof, as at any date, the ratio of (a) Free Cash Flow
for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Debt Service for such period.
"Free Cash Flow" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) EBITDA for such period, minus (b)
provision for income tax expense for such period, minus (c) the lesser of (A)
the product of (x) $1,500,000 and (y) the number of months during such period as
a fraction of a year, and (B) the aggregate amount of Capital Expenditures made
by the Company and its Subsidiaries during such period.
-8-
24184999
<PAGE>
"GAAP" shall mean generally accepted accounting principles applied on
a basis consistent with those that, in accordance with the last sentence of
Section 1.02(a) hereof, are to be used in making the calculations for purposes
of determining compliance with this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals or other
materials or substances that are now or hereafter become defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (c) any other chemical or other
material or substance, exposure to which is now or hereafter prohibited, limited
or regulated under any Environmental Law.
"Indebtedness" shall mean, for any Person (without duplication): (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 90 days of the date the
respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective Indebtedness so secured has been assumed by such Person;
(d) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such Person; and (f)
Indebtedness of others Guaranteed by such Person.
"ING" shall mean Internationale Nederlanden (U.S.) Capital
Corporation.
"Interest Coverage Ratio" shall mean,
(i) with respect to the Interest Coverage Ratio calculated pursuant to
Section 9.12(a) hereof, as at any date, the ratio of (a) EBITDA for the
respective fiscal quarters specified therein to (b) Interest Expense for
such period, and
(ii) with respect to the Interest Coverage Ratio calculated pursuant to
Section 9.12(b) hereof, as at any date, the ratio of (a) EBITDA for the
period of four consecutive fiscal quarters ending on or most recently
ended prior to such date to (b) Interest Expense for such period.
"Interest Expense" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Lease Obligations) accrued or capitalized
during such period (whether or not actually paid during such period) plus (b)
the net amount payable (or minus the net amount receivable) under Interest Rate
Protection
-9-
24184999
<PAGE>
Agreements during such period (whether or not actually paid or received during
such period), plus (c) the pro rata portion attributable to such period of any
amounts paid as an up-front fee under Interest Rate Protection Agreements.
"Interest Period" shall mean, with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or Converted
from a Loan of another Type or the last day of the next preceding Interest
Period for such Loan and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof, except that each Interest Period that
commences on the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing: (i) no Interest Period for any Term Loan
may commence before and end after any Principal Payment Date unless, after
giving effect thereto, the aggregate principal amount of the Term Loans having
Interest Periods that end after such Principal Payment Date shall be equal to or
less than the aggregate principal amount of the Term Loans scheduled to be
outstanding after giving effect to the payments of principal required to be made
on such Principal Payment Date; (ii) each Interest Period that would otherwise
end on a day that is not a Business Day shall end on the next succeeding
Business Day or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day; and (iii)
notwithstanding clauses (i) and (ii) above, no Interest Period for any
Eurodollar Loan shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a shorter period,
such Loan shall not be available hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Inventory" shall mean dyes and any other chemicals and related
products and other readily marketable materials, including raw materials, but
excluding any work-in-process, of a type manufactured or consumed by the Company
or any Subsidiary Guarantor in the ordinary course of business as presently
conducted.
"Investment" shall mean, for any Person: (a) the acquisition (whether
for cash, Property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of any securities
at a time when such securities are not owned by the Person entering into such
sale); (b) the making of any deposit with, or advance, loan or other extension
of credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days representing the
purchase price of inventory or supplies sold by such Person in the ordinary
course of business, excluding travel advances); (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Interest Rate Protection Agreement.
"L/C Issuer" shall mean ING, as the issuer of Letters of Credit under
Section 2.03 hereof, together with its successors and assigns in such capacity;
provided, that if the Administrative Agent, with respect to any Letter of
Credit, requests that BKB or any other Lender issue such Letter of Credit, then,
subject to the agreement of BKB or such Lender (as the case may be) the L/C
Issuer with respect to such Letter of Credit shall be BKB or, as the case may
be, such other Lender in such capacity.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.03 hereof.
"Letter of Credit Documents" shall mean, with respect to any Letter
of Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of
-10-
24184999
<PAGE>
the parties concerned or at risk with respect to such Letter of Credit or (b)
any collateral security for any of such obligations, each as the same may be
modified and supplemented and in effect from time to time.
"Letter of Credit Interest" shall mean, for each Revolving Credit
Lender, such Lender's participation interest (or, in the case of the L/C
Issuer, the L/C Issuer's retained interest) in the L/C Issuer's liability
under Letters of Credit and such Lender's rights and interests in
Reimbursement Obligations and fees, interest and other amounts payable in
connection with Letters of Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the maximum amount
permitted to be drawn with respect to such Letter of Credit plus (b) the
aggregate unpaid principal amount of all Reimbursement Obligations of the
Company at such time due and payable in respect of all drawings made under such
Letter of Credit. For purposes of this Agreement, a Revolving Credit Lender
(other than the L/C Issuer) shall be deemed to hold a Letter of Credit Liability
in an amount equal to its participation interest in the related Letter of Credit
under Section 2.03 hereof, and the L/C Issuer shall be deemed to hold a Letter
of Credit Liability in an amount equal to its retained interest in the related
Letter of Credit after giving effect to the acquisition by the Revolving Credit
Lenders other than the L/C Issuer of their participation interests under said
Section 2.03.
"Leverage Ratio" shall mean, at any time, the ratio of Total Funded
Indebtedness of the Company at such time to EBITDA for the period of four
consecutive fiscal quarters ending on or most recently ended prior to such date.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Loans" shall mean Revolving Credit Loans and Term Loans.
"Majority Lenders" shall mean Lenders having at least 66-2/3% of the
sum of: (a) the aggregate unpaid principal amount of the Loans plus (b) the
aggregate amount of all Letter of Credit Liabilities plus (c) the aggregate
amount of the unused Revolving Credit Commitments (to the extent such
Commitments have not been terminated).
"Management Fees" shall have the meaning set forth in Section 9.18.
"Management Services Agreement" shall mean the Management Services
Agreement, dated as of April 29, 1996, between Triarc and the Company.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, condition (financial or otherwise), or operations,
present or prospective, of the Company and its Subsidiaries taken as a whole,
(b) the ability of any Obligor to perform its material obligations under any of
the Basic Documents to which it is a party (including without limitation, the
timely payment of the principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection herewith and therewith), (c)
the validity or enforceability of any of the Basic Documents, or (d) the rights
and remedies of the Lenders and the Administrative Agent under any of the Basic
Documents.
"Monthly Dates" shall mean the last Business Day of each calendar
month in each year, the first of which shall be the first such day after the
date of this Agreement.
-11-
24184999
<PAGE>
"Mortgage(s)" shall mean, collectively, one or more Mortgages,
Leasehold Mortgages, Deeds of Trust, Assignments of Rents, Security Agreements
and Fixture Filings executed by the Company in favor of the Administrative Agent
and the Lenders, in each case substantially in the form of Exhibits E-1 and E-2
hereto and covering the respective Properties identified in Schedules I and II
thereto.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(i) in the case of any Disposition, the amount of Net Cash Payments
received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Company and its Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by the Company and its Subsidiaries in
connection therewith and (B) contractually required repayments of
Indebtedness to the extent secured by a Lien on such Property and any
income and transfer taxes payable by the Company or any of its
Subsidiaries in respect of such Casualty Event; and
(iii) in the case of any Equity Issuance, the aggregate amount of all
cash received by the Company and its Subsidiaries in respect of such
Equity Issuance net of reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith.
"Net Cash Payments" shall mean, with respect to any Disposition, the
aggregate amount of all cash payments, and the fair market value of any non-cash
consideration, received by the Company and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (a) Net Cash
Payments shall be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Company and its
Subsidiaries in connection with such Disposition and (ii) any Federal, state and
local income or other taxes estimated to be payable by the Company and its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority or paid to Triarc under the terms of the Tax Sharing
Agreement) and (b) Net Cash Payments shall be net of any repayments by the
Company or any of its Subsidiaries of Indebtedness to the extent that (i) such
Indebtedness is secured by a Lien on the Property that is the subject of such
Disposition and (ii) the transferee of (or holder of a Lien on) such Property
requires that such Indebtedness be repaid as a condition to the purchase of such
Property.
"Notes" shall mean the Term Loan Notes and the Revolving Credit Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means the acquisition by the Company or a
Subsidiary of the Company, of any Person (or any stock or other equity interest
therein) or a substantial part of the assets used in the business of any Person;
provided that (a) the Person being acquired is engaged, or the assets being
acquired are used, in the manufacture, distribution or sale of dyes or other
specialty chemicals or related products; (b) such acquisition shall not be
opposed by the boards of directors (or any other person or persons performing
similar functions) of any of the parties to such acquisition; and (c) after
giving effect to such acquisition, no Default shall have occurred and be
continuing.
"Permitted Investments" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than one year from the date of
acquisition thereof; (b) certificates of
-12-
24184999
<PAGE>
deposit and other time deposits issued by any commercial bank or trust company
organized under the laws of the United States of America or any state thereof
and having capital, surplus and undivided profits of at least $100,000,000,
maturing not more than one year from the date of acquisition thereof; (c)
commercial paper maturing not more than one year from the date of acquisition
thereof; (d) any money market deposit accounts issued or offered by a commercial
bank (including any Lender) having capital and surplus in excess of $100,000,000
or the equivalent thereof; and (e) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clause (a)
above entered into with any financial institution; provided, in the case of
clauses (b), (c) and (d) that the short-term debt of such commercial bank or
trust company (other than a Lender) or, with respect to clause (c), the
commercial paper, has a rating, at the time of investment, of A-1 or better or
P-1 by Standard & Poor's Corporation or Moody's Investors Service Inc.,
respectively (or their respective successors).
"Person" shall mean any individual, corporation, company, limited
liability company, voluntary association, partnership, limited liability
partnership, joint venture, trust, unincorporated organization or government (or
any agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Pledge Agreement" shall mean a Pledge Agreement substantially in the
form of Exhibit D hereto between TXL and the Administrative Agent, as the same
shall be modified and supplemented and in effect from time to time.
"Prime Rate" shall mean the rate of interest from time to time
announced by BKB at its Principal Office as its prime commercial lending rate.
"Principal Office" shall mean, with respect to ING, the principal
office of ING, located on the date hereof at 135 East 57th Street, New York, New
York 10022, and, with respect to BKB, the principal office of BKB, located on
the date hereof at 100 Federal Street, Boston, Massachusetts 02110.
"Principal Payment Dates" shall mean the Principal Payment Dates with
respect to Term Loan A and the Principal Payment Dates with respect to Term Loan
B, in each case, as set forth in Section 3.01(b).
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Receivables" shall mean, as at any date, the unpaid portion of the
obligation, as stated on the respective invoice, of a customer of the Company or
any Subsidiary Guarantor in respect of Inventory sold and shipped by such
Obligor to such customer, net of any credits, rebates or offsets owed to such
customer and also net of any commissions payable to third parties (and for
purposes hereof, a credit or rebate paid by check or draft of the Company or any
Subsidiary Guarantor shall be deemed to be outstanding until such check or draft
shall have been debited to the account of such Obligor on which such check or
draft was drawn).
"Regulations A, D, U and X" shall mean, respectively, Regulations A,
D, U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Lender, any
written change after the date of this Agreement in Federal, state or foreign law
or regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks including such Lender of or under any Federal, state or foreign
law or regulations (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
-13-
24184999
<PAGE>
"Reimbursement Obligations" shall mean, at any time, the obligations
of the Company then outstanding, or that may thereafter arise in respect of all
Letters of Credit then outstanding, to reimburse amounts paid by the L/C Issuer
in respect of any drawings under a Letter of Credit.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Relevant Parties" shall have the meaning assigned to such term in
Section 10(b) hereof.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Rate is to be
determined as provided in the definition of "Eurodollar Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets that includes
Eurodollar Loans.
"Revolving Credit Commitment" shall mean, for each Revolving Credit
Lender, the obligation of such Lender to make Revolving Credit Loans in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set forth opposite the name of such Lender on the signature pages
hereof under the caption "Revolving Credit Commitment" (as the same may be
reduced from time to time pursuant to Section 2.04 hereof). The original
aggregate principal amount of the Revolving Credit Commitments is $15,000,000.
"Revolving Credit Commitment Percentage" shall mean, with respect to
any Revolving Credit Lender, the ratio of (a) the amount of the Revolving Credit
Commitment of such Lender to (b) the aggregate amount of the Revolving Credit
Commitments of all of the Lenders.
"Revolving Credit Commitment Termination Date" shall mean September
30, 2001.
"Revolving Credit Lenders" shall mean (a) on the date hereof, the
Lenders having Revolving Credit Commitments on the signature pages hereof and
(b) thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments after giving effect to any assignments thereof
permitted by Section 12.06 hereof.
"Revolving Credit Loans" shall mean the loans provided for by Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory notes provided for
by Section 2.08(a) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"SEC" means the Securities and Exchange Commission (or any
governmental agency substituted therefor) .
"Security Agreement" shall mean a Pledge and Security Agreement
substantially in the form of Exhibit C hereto between the Company, the
Subsidiary Guarantors and the Administrative Agent, as the same shall be
modified and supplemented and in effect from time to time.
-14-
24184999
<PAGE>
"Security Documents" shall mean, collectively, the Security
Agreement, the Pledge Agreement, the Mortgages and all Uniform Commercial Code
financing statements required by this Agreement, the Security Agreement, the
Pledge Agreement or the Mortgages to be filed with respect to the security
interests in personal Property and fixtures created pursuant to the Security
Agreement, the Pledge Agreement or the Mortgages.
"Sequa Settlement Agreement" shall mean the settlement agreement or
agreements entered into between Sequa Chemicals, Inc. and the Company relating
to the out-of-court settlement of that certain claim referred to as Sequa
Chemicals, Inc. v. C.H. Patrick & Co., Inc., CA# 0:93-1633-19, and the court
order reflecting the same.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement, dated
as of April 29, 1996, between Triarc and the Company.
"Term Loan A" shall mean the loans provided for under the Term Loan A
Commitment and as provided for by Section 2.01(b) hereof, which may be Base Rate
Loans and/or Eurodollar Loans.
"Term Loan A Commitment" shall mean, for each Term Loan Lender, the
obligation of such Lender to make one or more Term Loan A Loans in an aggregate
amount up to but not exceeding the amount set forth opposite the name of such
Lender on the signature pages hereof under the caption "Term Loan A Commitment"
(as the same may be reduced from time to time pursuant to Section 2.04 hereof).
The original aggregate principal amount of the Term Loan A Commitments is
$15,000,000.
"Term Loan A Notes" shall mean the promissory notes provided for by
Section 2.08(b) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Term Loan B" shall mean the loans provided for under the Term Loan B
Commitment and as provided for by Section 2.01(b) hereof, which may be Base Rate
Loans and/or Eurodollar Loans.
"Term Loan B Commitment" shall mean, for each Term Loan Lender, the
obligation of such Lender to make one or more Term Loan B Loans in an aggregate
amount up to but not exceeding the amount set forth opposite the name of such
Lender on the signature pages hereof under the caption "Term Loan B Commitment"
(as the same may be reduced from time to time pursuant to Section 2.04 hereof).
The original aggregate principal amount of the Term Loan B Commitments is
$20,000,000.
"Term Loan B Notes" shall mean the promissory notes provided for by
Section 2.08(c) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Term Loan Commitments" shall mean, for each Term Loan Lender, such
Lender's Term Loan A Commitment and Term Loan B Commitment.
"Term Loan Commitment Termination Date" shall mean June 15, 1996.
"Term Loans" shall mean Term Loan A and Term Loan B.
-15-
24184999
<PAGE>
"Term Loan Lenders" shall mean (a) on the date hereof, the Lenders
having Term Loan Commitments on the signature pages hereof and (b) thereafter,
the Lenders from time to time holding Term Loans and Term Loan Commitments after
giving effect to any assignments thereof permitted by Section 12.06 hereof.
"Term Loan Notes" shall mean the Term Loan A Notes and the Term Loan
B Notes.
"Total Funded Indebtedness" shall mean, for any Person: (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 90 days of the date the
respective goods are delivered or the respective services are rendered; (c)
Capital Lease Obligations of such Person; and (d) Total Funded Indebtedness of
others Guaranteed by such Person.
"TXL" means TXL Holdings, Inc., a Delaware corporation.
"Type" shall have the meaning assigned to such term in Section 1.03
hereof.
"Wholly Owned Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares and Equity Rights granted to officers or employees
of the Company or any of its Subsidiaries) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with generally accepted accounting principles applied on
a basis consistent with those used in the preparation of the latest financial
statements furnished to the Lenders hereunder (which, prior to the delivery of
the first financial statements under Section 9.01 hereof, shall mean the audited
financial statements as at December 31, 1995 referred to in Section 8.02
hereof). All calculations made for the purposes of determining compliance with
this Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders pursuant to Section 9.01 hereof
(or, prior to the delivery of the first financial statements under Section 9.01
hereof, used in the preparation of the audited financial statements as at
December 31, 1995 referred to in Section 8.02 hereof) unless (i) the Company
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority Lenders shall so
object in writing within 30 days after delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 9.01 hereof,
shall mean the audited financial statements referred to in Section 8.02 hereof).
(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 9.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
-16-
24184999
<PAGE>
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 9 hereof, the Company will not change
(i) the last day of its fiscal year from the Sunday nearest December 31 of each
year, or (ii) the method of determination of the last days of the first three
fiscal quarters in each of its fiscal years. For the purpose of determining the
first and last days of periods, and the dates on which calculations are made, in
Sections 9.10, 9.11, 9.12 and 9.13 hereof, (x) the first dates of periods shall
be the first day of the fiscal quarter of the Company commencing on or nearest
to the date specified in such Section as the first day of such period and (y)
the last dates of periods and the dates on which calculations are made shall be
the last day of the fiscal period of the Company ending on or nearest to the
date specified in such Section as the last day of such period or the date on
which the relevant calculation is made.
(d) So long as the Company and its Subsidiaries shall be included in
consolidated Federal income tax returns filed by Triarc pursuant to a tax
consolidation agreement, whenever making determinations under this Agreement of
the amount of Federal income taxes payable during any period (or the amount of
refunds in respect of such taxes receivable during any period) by the Company
and its Subsidiaries, the amount of such taxes payable or receivable shall be
deemed to be equal to the amounts payable or receivable, as the case may be, in
respect of such taxes under such tax consolidation agreement without reference
to whether Triarc and its Subsidiaries as an affiliated group shall in fact pay
any amounts in respect of Federal income taxes (or receive any amounts in
respect of refunds of Federal income taxes) during the relevant period.
1.03 Classes and Types of Loans. Loans hereunder are distinguished by
"Class" and by "Type". The "Class" of a Loan (or of a Commitment to make a Loan)
refers to whether such Loan is a Revolving Credit Loan, a Term Loan A Loan or a
Term Loan B Loan, each of which constitutes a Class. The "Type" of a Loan refers
to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
1.04 References to Subsidiaries. On the date hereof, the Company has
no Subsidiaries. The various references in this Agreement to "Subsidiaries" of
the Company and "Subsidiary Guarantors" are included to facilitate any
acquisition or creation by the Company, in accordance with Section 9.20 hereof,
of any Subsidiaries.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans.
(a) Revolving Credit Loans. Each Revolving Credit Lender severally
and not jointly with the other Lenders agrees, on the terms and conditions of
this Agreement, to make loans to the Company from time to time in Dollars during
the period from and including the Closing Date to but not including the
Revolving Credit Commitment Termination Date in an aggregate principal amount at
any one time outstanding up to but not exceeding the amount of the Revolving
Credit Commitment of such Lender as in effect from time to time, provided that
in no event shall the aggregate principal amount of all Revolving Credit Loans,
together with the aggregate amount of all Letter of Credit Liabilities, exceed
the aggregate amount of the Revolving Credit Commitments as in effect from time
to time. Subject to the terms and conditions of this Agreement, during such
period the Company may borrow, repay and reborrow the amount of the Revolving
Credit Commitments by means of Base Rate Loans and Eurodollar Loans and may
Convert Revolving Credit Loans of one Type into Revolving Credit Loans of
another Type (as provided in Section 2.09 hereof) or Continue Revolving Credit
Loans of one Type as Revolving Credit Loans of the same Type (as provided in
Section 2.09 hereof); provided that prior to the earlier to occur of (x) the
conclusion of the syndication period with respect to the Loans, as notified to
the Company by the Administrative Agent and (y) the 90th day after the Closing
Date, all Revolving Credit Loans shall be Base Rate Loans.
(b) Term Loans. Each Term Loan Lender holding a Term Loan A
Commitment severally and not jointly with the other Lenders agrees, on the terms
and conditions of this Agreement, to make a single term loan to the Company in
Dollars on or before the Term Loan Commitment Termination Date in a principal
amount up to but not exceeding the amount of the Term Loan A Commitment of such
Lender. Each Term Loan Lender holding a
-17-
24184999
<PAGE>
Term Loan B Commitment severally agrees, on the terms and conditions of this
Agreement, to make a single term loan to the Company in Dollars on or before the
Term Loan Commitment Termination Date in a principal amount up to but not
exceeding the amount of the Term Loan B Commitment of such Lender. Thereafter
the Company may Convert Term Loans of one Type into Term Loans of another Type
(as provided in Section 2.09 hereof) or Continue Term Loans of one Type as Term
Loans of the same Type (as provided in Section 2.09 hereof); provided that prior
to the earlier to occur of (x) the conclusion of the syndication period with
respect to the Loans, as notified to the Company by the Administrative Agent and
(y) the 90th day after the Closing Date, all Term Loans shall be Base Rate
Loans.
(c) Limit on Eurodollar Loans. No more than three separate Interest
Periods in respect of Eurodollar Loans of a Class from each Lender may be
outstanding at any one time.
2.02 Borrowings. The Company shall give the Administrative Agent
notice of each borrowing hereunder as provided in Section 4.05 hereof. Not later
than 1:00 p.m. New York time on the date specified for each borrowing of Loans
hereunder, each Lender shall deposit in immediately available funds the amount
of the Loan or Loans to be made by it on such date, such deposit to be made to
an account which the Administrative Agent shall specify from time to time by
notice to the Lenders. The amount so received by the Administrative Agent shall,
subject to the terms and conditions of this Agreement, be made available to the
Company by depositing the same, in immediately available funds, to an account of
the Company so designated by the Company in its notice of borrowing.
2.03 Letters of Credit. Subject to the terms and conditions of this
Agreement, the Revolving Credit Commitments may be utilized, upon the request of
the Company, in addition to the Revolving Credit Loans provided for by Section
2.01(a) hereof, by the issuance by the L/C Issuer from time to time of letters
of credit (collectively, "Letters of Credit") for account of the Company,
provided that in no event shall (i) the aggregate amount of all Letter of Credit
Liabilities, together with the aggregate principal amount of the Revolving
Credit Loans, exceed the aggregate amount of the Revolving Credit Commitments as
in effect from time to time, (ii) the outstanding aggregate amount of all Letter
of Credit Liabilities exceed $2,000,000 and (iii) the expiration date of any
Letter of Credit extend beyond the earlier of the Revolving Credit Commitment
Termination Date and the date 120 days following the issuance of a commercial
Letter of Credit or one year following the issuance of any other Letter of
Credit. The following additional provisions shall apply to Letters of Credit:
(a) The Company shall give the Administrative Agent at least three
Business Days' irrevocable prior notice (effective upon receipt)
specifying the Business Day (which shall be no later than 30 days
preceding the Revolving Credit Commitment Termination Date) each Letter of
Credit is to be issued and the account party or parties therefor and
describing in reasonable detail the proposed terms of such Letter of
Credit (including the beneficiary thereof) and the nature of the
transactions or obligations proposed to be supported thereby (including
whether such Letter of Credit is to be a commercial letter of credit or a
standby letter of credit). Upon receipt of any such notice, the
Administrative Agent shall advise the L/C Issuer of the contents thereof.
(b) On each day during the period commencing with the issuance by the
L/C Issuer of any Letter of Credit and until such Letter of Credit shall
have expired or been terminated, the Revolving Credit Commitment of each
Revolving Credit Lender shall be deemed to be utilized for all purposes of
this Agreement in an amount equal to such Lender's Revolving Credit
Commitment Percentage of the then undrawn face amount of such Letter of
Credit. Each Revolving Credit Lender (other than the L/C Issuer) agrees
that, upon the issuance of any Letter of Credit hereunder, it shall
automatically acquire a participation in the L/C Issuer's liability under
such Letter of Credit in an amount equal to such Lender's Revolving Credit
Commitment Percentage of such liability, and each Revolving Credit Lender
(other than the L/C Issuer) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to the L/C Issuer to pay and discharge when due,
its Revolving Credit Commitment Percentage of the L/C Issuer's liability
under such Letter of Credit, provided, that such obligations may not be
discharged by way of set-off or counterclaim.
-18-
24184999
<PAGE>
(c) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment under such Letter of Credit, the L/C Issuer shall
promptly notify the Company (through the Administrative Agent) of the
amount to be paid by the L/C Issuer as a result of such demand and the
date on which payment is to be made by the L/C Issuer to such beneficiary
in respect of such demand. Notwithstanding the identity of the account
party of any Letter of Credit, the Company hereby unconditionally agrees
to pay and reimburse the Administrative Agent for account of the L/C
Issuer for the amount of each demand for payment under such Letter of
Credit at or prior to the date on which payment is to be made by the L/C
Issuer to the beneficiary thereunder, without presentment, demand, protest
or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in clause (c)
of this Section 2.03, the Company shall advise the Administrative Agent
whether or not the Company intends to borrow hereunder to finance its
obligation to reimburse the L/C Issuer for the amount of the related
demand for payment and, if it does, submit a notice of such borrowing as
provided in Section 4.05 hereof. In the event that the Company fails to so
advise the Administrative Agent, or if the Company fails to reimburse the
L/C Issuer for a payment under a Letter of Credit by the date of such
payment, the Administrative Agent shall give each Revolving Credit Lender
prompt notice of the amount of the demand for payment, specifying such
Lender's Revolving Credit Commitment Percentage of the amount of the
related demand for payment.
(e) Each Revolving Credit Lender (other than the L/C Issuer) shall
pay to the Administrative Agent for account of the L/C Issuer at the
Principal Office in Dollars and in immediately available funds, the amount
of such Lender's Revolving Credit Commitment Percentage of any payment
under a Letter of Credit upon notice by the L/C Issuer (through the
Administrative Agent) to such Revolving Credit Lender requesting such
payment and specifying such amount. Each such Revolving Credit Lender's
obligation to make such payment to the Administrative Agent for account of
the L/C Issuer under this clause (e), and the L/C Issuer's right to
receive the same, shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation,
the failure of any other Revolving Credit Lender to make its payment under
this clause (e), the financial condition of the Company (or any other
account party), the existence of any Default or the termination of the
Commitments. Each such payment to the L/C Issuer shall be made without any
offset, abatement, withholding or reduction whatsoever. If any Revolving
Credit Lender shall default in its obligation to make any such payment to
the Administrative Agent for account of the L/C Issuer, for so long as
such default shall continue the Administrative Agent may at the request of
the L/C Issuer withhold from any payments received by the Administrative
Agent under this Agreement or any Note for account of such Revolving
Credit Lender the amount so in default and, to the extent so withheld, pay
the same to the L/C Issuer in satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Revolving Credit Lender to
the L/C Issuer pursuant to clause (e) above in respect of any Letter of
Credit, such Lender shall, automatically and without any further action on
the part of the Administrative Agent, the L/C Issuer or such Lender,
acquire (i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the L/C Issuer by the Company hereunder
and under the Letter of Credit Documents relating to such Letter of Credit
and (ii) a participation in a percentage equal to such Lender's Revolving
Credit Commitment Percentage in any interest or other amounts payable by
the Company hereunder and under such Letter of Credit Documents in respect
of such Reimbursement Obligation (other than the commissions, charges,
costs and expenses payable to the L/C Issuer pursuant to clause (g) of
this Section 2.03). Upon receipt by the L/C Issuer from or for account of
the Company of any payment in respect of any Reimbursement Obligation or
any such interest or other amount (including by way of setoff or
application of proceeds of any collateral security) the L/C Issuer shall
promptly pay to the Administrative Agent for account of each Revolving
Credit Lender entitled thereto, such Revolving Credit Lender's Revolving
Credit Commitment Percentage of such payment, each such payment by the L/C
Issuer to be made in the same currency and the same availability of funds
in which received by the L/C Issuer. In the event any payment received by
the L/C Issuer and so paid to the Revolving Credit Lenders hereunder is
rescinded or must otherwise be returned by the L/C Issuer, each Revolving
Credit Lender shall, upon the request of the L/C Issuer (through the
Administrative Agent),
-19-
24184999
<PAGE>
repay to the L/C Issuer (through the Administrative Agent) the amount of
such payment paid to such Lender, with interest at the rate specified in
clause (j) of this Section 2.03.
(g) The Company shall pay to the Administrative Agent for account of
each Revolving Credit Lender (ratably in accordance with their respective
Commitment Percentages) a letter of credit fee in respect of each Letter
of Credit in an amount equal to 2.50% per annum of the daily average
undrawn face amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit (i) in the case of
a Letter of Credit that expires in accordance with its terms, to and
including such expiration date and (ii) in the case of a Letter of Credit
that is drawn in full or is otherwise terminated other than on the stated
expiration date of such Letter of Credit, to but excluding the date such
Letter of Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on each Monthly Date and on the
Revolving Credit Commitment Termination Date and to be calculated for any
day after giving effect to any payments made under such Letter of Credit
on such day). In addition, the Company shall pay to the Administrative
Agent for account of the L/C Issuer a fronting fee in respect of each
Letter of Credit in an amount equal to 0.25% per annum of the daily
average undrawn face amount of such Letter of Credit for the period from
and including the date of issuance of such Letter of Credit (i) in the
case of a Letter of Credit that expires in accordance with its terms, to
and including such expiration date and (ii) in the case of a Letter of
Credit that is drawn in full or is otherwise terminated other than on the
stated expiration date of such Letter of Credit, to but excluding the date
such Letter of Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on each Monthly Date and on the
Revolving Credit Commitment Termination Date and to be calculated for any
day after giving effect to any payments made under such Letter of Credit
on such day) plus all commissions, charges, costs and expenses in the
amounts customarily charged by the L/C Issuer from time to time in like
circumstances with respect to the issuance of each Letter of Credit and
drawings and other transactions relating thereto.
(h) Promptly following the end of each calendar month, the L/C Issuer
shall deliver (through the Administrative Agent) to each Revolving Credit
Lender and the Company a notice describing the aggregate amount of all
Letters of Credit outstanding at the end of such month. Upon the request
of any Revolving Credit Lender from time to time, the L/C Issuer shall
deliver any other information reasonably requested by such Lender with
respect to each Letter of Credit then outstanding.
(i) The issuance by the L/C Issuer of each Letter of Credit shall, in
addition to the conditions precedent set forth in Section 7 hereof, be
subject to the conditions precedent that (i) such Letter of Credit shall
be in such form, contain such terms and support such transactions as shall
be reasonably satisfactory to the L/C Issuer consistent with its then
current practices and procedures with respect to letters of credit of the
same type and (ii) the Company shall have executed and delivered such
applications, agreements and other instruments relating to such Letter of
Credit as the L/C Issuer shall have reasonably requested consistent with
its then current practices and procedures with respect to letters of
credit of the same type, provided that in the event of any conflict
between any such application, agreement or other instrument and the
provisions of this Agreement or any Security Document, the provisions of
this Agreement and the Security Documents shall control.
(j) To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to clause (e) or (f) of this Section 2.03 on
the due date therefor, such Lender shall pay interest to the L/C Issuer
(through the Administrative Agent) on such amount from and including such
due date to but excluding the date such payment is made, provided that if
such Lender shall fail to make such payment to the L/C Issuer within three
Business Days of such due date, then, retroactively to the due date, such
Lender shall be obligated to pay interest on such amount at the Base Rate
for Revolving Credit Loans plus the Applicable Margin for Revolving Credit
Loans plus 2%.
(k) The issuance by the L/C Issuer of any modification or supplement
to any Letter of Credit hereunder shall be subject to the same conditions
applicable under this Section 2.03 to the issuance of new Letters of
Credit, and no such modification or supplement shall be issued hereunder
unless either (i) the
-20-
24184999
<PAGE>
respective Letter of Credit affected thereby would have complied with such
conditions had it originally been issued hereunder in such modified or
supplemented form or (ii) each Revolving Credit Lender shall have
consented thereto.
The Company hereby indemnifies and holds harmless each Revolving Credit Lender,
the Administrative Agent and the L/C Issuer from and against any and all claims
and damages, losses, liabilities, costs or expenses that such Lender or the
Administrative Agent may incur (or that may be claimed against such Lender or
the Administrative Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or refusal to pay by
the L/C Issuer under any Letter of Credit; provided that the Company shall not
be required to indemnify any Lender or the Administrative Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of the L/C
Issuer in determining whether a request presented under any Letter of Credit
complied with the terms of such Letter of Credit or (y) in the case of the L/C
Issuer, such Lender's failure to pay under any Letter of Credit after the
presentation to it of a request complying with the terms and conditions of such
Letter of Credit. Nothing in this Section 2.03 is intended to limit the other
obligations of the Company, any Lender or the Administrative Agent under this
Agreement.
2.04 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit Commitments shall be
automatically reduced to zero on the Revolving Credit Commitment Termination
Date.
(b) The Company shall have the right at any time or from time to time
(i) so long as no Revolving Credit Loans or Letter of Credit Liabilities are
outstanding, to terminate the Revolving Credit Commitments and (ii) to reduce
the aggregate unused amount of the Revolving Credit Commitments (for which
purpose use of the Revolving Credit Commitments shall be deemed to include the
aggregate amount of Letter of Credit Liabilities); provided that (x) the Company
shall give notice of each such termination or reduction as provided in Section
4.05 hereof and (y) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000, (or a larger multiple of $500,000).
(c) The aggregate amount of the Term Loan Commitments shall be
automatically reduced to zero on the Term Loan Commitment Termination Date.
(d) The Commitments once terminated or reduced may not be reinstated.
2.05 Commitment Fee. The Company shall pay to the Administrative
Agent for account of each Lender a commitment fee on the daily average unused
amount of such Lender's Revolving Credit Commitment (for which purpose the
aggregate amount of any Letter of Credit Liabilities shall be deemed to be a pro
rata (based on the Revolving Credit Commitments) use of each Lender's Revolving
Credit Commitment), for the period from and including the date of this Agreement
to but not including the earlier of the date such Revolving Credit Commitment is
terminated and the Revolving Credit Commitment Termination Date, at a rate per
annum equal to 1/2 of 1%. The Company shall pay to the Administrative Agent for
account of each Lender a commitment fee on the daily average unused amount of
such Lender's Term Loan Commitment, for the period from and including the date
of this Agreement to but not including the earlier of the date such Term Loan
Commitment is terminated and the Term Loan Commitment Termination Date, at a
rate per annum equal to 1/2 of 1%. Accrued commitment fee shall be payable on
the Closing Date, on each Monthly Date and on the earlier of the date the
relevant Commitments are terminated and the Revolving Credit Commitment
Termination Date or the Term Loan Commitment Termination Date, as the case may
be.
2.06 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
-21-
24184999
<PAGE>
2.07 Several Obligations; Remedies Independent. The failure of any
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to fund and make its Loan on such
date, but neither any Lender nor any Agent shall be responsible for the failure
of any other Lender to make a Loan to be made by such other Lender, and no
Lender shall have any obligation to the Administrative Agent or any other Lender
for the failure by such Lender to make any Loan required to be made by such
Lender. The amounts payable by the Company at any time hereunder and under the
Notes to each Lender shall be a separate and independent debt, and each Lender
shall be entitled to protect and enforce its rights arising out of this
Agreement and the Notes, and it shall not be necessary for any other Lender or
the Administrative Agent to consent to, or be joined as an additional party in,
any proceedings for such purposes.
2.08 Notes.
(a) The Revolving Credit Loans made by each Lender shall be evidenced
by a single promissory note of the Company substantially in the form of Exhibit
A-1 hereto, dated the Closing Date, payable to such Lender in a principal amount
equal to the amount of its Revolving Credit Commitment as originally in effect
and otherwise duly completed.
(b) The Term Loans made by each Lender pursuant to its Term Loan A
Commitment shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-2 hereto, dated the Closing Date, payable
to such Lender in a principal amount equal to the amount of its Term Loan A
Commitment as originally in effect and otherwise duly completed.
(c) The Term Loans made by each Lender pursuant to its Term Loan B
Commitment shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-3 hereto, dated the Closing Date, payable
to such Lender in a principal amount equal to the amount of its Term Loan B
Commitment as originally in effect and otherwise duly completed.
(d) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan of each Class made by each Lender to the
Company, and each payment made on account of the principal thereof, may be
recorded by such Lender on its books and, prior to any transfer of the Note
evidencing the Loans of such Class held by it, endorsed by such Lender on the
schedule attached to such Note or any continuation thereof; provided that the
failure of such Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due of any amount
owing hereunder or under such Note in respect of the Loans to be evidenced by
such Note.
(e) No Lender shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Lender's
relevant Commitment, Loans and Notes pursuant to Section 12.06(b) hereof.
2.09 Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof, the Company shall have the right to prepay
Loans, or to Convert Loans of one Type into Loans of another Type or Continue
Loans of one Type as Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Administrative Agent notice of
each such prepayment, Conversion or Continuation as provided in Section 4.05
hereof (and, upon the date specified in any such notice of prepayment, the
amount to be prepaid shall become due and payable hereunder); (b) Eurodollar
Loans may be prepaid or Converted only on the last day of an Interest Period for
such Loans; (c) prepayments of the Term Loans shall be applied ratably to
outstanding amounts of Term Loan A and Term Loan B and ratably among the
maturities of the installments of such Term Loans, provided that for so long as
Term Loan A is outstanding, any Lender holding a Term Loan B Loan may waive its
right to such Lender's portion of any prepayment made pursuant to this Section
2.09, in which case such amounts that would have been paid to such Lender will
be applied ratably to outstanding amounts of Term Loan A and Term Loan B (other
than such Term Loan B Loans that are the subject of the waiver) and ratably
among the maturities of the installments of such Term Loans; and (d) no Loan may
be Converted into a Eurodollar Loan until the earlier to occur of (x) the
conclusion of the syndication period with respect to the Loans, as notified to
the
-22-
24184999
<PAGE>
Company by the Administrative Agent and (y) the 90th day after the Closing Date.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 10 hereof, in the event that any Event of Default
shall have occurred and be continuing, the Administrative Agent may (and at the
request of the Majority Lenders shall) suspend the right of the Company to
Convert any Loan into a Eurodollar Loan, or to Continue any Loan as a Eurodollar
Loan, in which event all Loans shall be Converted (on the last day(s) of the
respective Interest Periods therefor) or Continued, as the case may be, as Base
Rate Loans.
2.10 Mandatory Prepayments and Reductions of Commitments.
(a) Borrowing Base. Until the Revolving Credit Commitment Termination
Date, the Company shall from time to time prepay the Revolving Credit Loans
(and/or provide cover for Letter of Credit Liabilities as specified in clause
(g) below) in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of the Revolving Credit Loans at any time together
with the outstanding Letter of Credit Liabilities at such time shall not exceed
the Borrowing Base at such time, such amount to be applied, first, to Revolving
Credit Loans outstanding and, second, as cover for Letter of Credit Liabilities
outstanding.
(b) Casualty Events. Upon the later to occur of (x) the date 45 days
following the receipt by the Company of the proceeds of insurance, condemnation
award or other compensation in respect of any Casualty Event affecting any
material Property of the Company or any of its Subsidiaries (or upon such
earlier date as the Company or such Subsidiary, as the case may be, shall have
determined not to repair or replace the Property affected by such Casualty
Event) and (y) if applicable, the last day of the shortest Interest Period in
effect on such 45th day referred to in clause (x), the Company shall prepay the
Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (g) below), and the Commitments shall be subject to automatic reduction,
in an aggregate amount, if any, equal to 100% of the Net Available Proceeds of
such Casualty Event not theretofore applied to the repair or replacement of such
Property, such prepayment and reduction to be effected in each case in the
manner and to the extent specified in clause (f) of this Section 2.10.
Notwithstanding the foregoing, in the event that a Casualty Event shall occur
with respect to Property covered by the Mortgage(s), the Company shall prepay
the Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (g) below), and the Commitments shall be subject to automatic reduction,
on the dates, and in the amounts of the required prepayments, specified in the
Mortgage(s). Nothing in this clause (b) shall be deemed to limit any obligation
of the Company or any of its Subsidiaries pursuant to any of the Security
Documents to remit to a collateral or similar account (including, without
limitation, the Collateral Account) maintained by the Administrative Agent
pursuant to any of the Security Documents the proceeds of insurance,
condemnation award or other compensation received in respect of any Casualty
Event.
(c) Equity Issuance. Without limiting the obligation of Triarc
pursuant to Section 6.11(d) hereof, upon any Equity Issuance, the Company shall
prepay the Loans (and/or provide cover for Letter of Credit Liabilities as
specified in clause (g) below), and the Commitments shall be subject to
automatic reduction, in an aggregate amount equal to 100% of the Net Available
Proceeds thereof, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in clause (f) of this Section 2.10.
(d) Excess Cash Flow. Not later than the earlier of (i) 30 days after
the receipt by the Company of its audited financial statements for each fiscal
year and (ii) 150 days after the end of each fiscal year of the Company ending
after the date of this Agreement (the first such fiscal year ending on December
31, 1996), the Company shall prepay the Loans (and/or provide cover for Letter
of Credit Liabilities as specified in clause (g) below), and the Commitments
shall be subject to automatic reduction, in an aggregate amount equal to 75% of
Excess Cash Flow for such fiscal year, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in clause (f) of
this Section 2.10.
(e) Sale of Assets. Without limiting the obligation of the Company to
obtain the consent of the Majority Lenders pursuant to Section 9.05 hereof to
any Disposition not otherwise permitted hereunder, in the event that the Net
Available Proceeds of any Disposition (herein, the "Current Disposition"), and
of all prior Dispositions which occurred within the previous consecutive 24
month period of such Current Disposition shall exceed in the aggregate $550,000
then, no later than five Business Days after the occurrence of the Current
Disposition, the
-23-
24184999
<PAGE>
Company will deliver to the Lenders a statement, certified by the senior
financial officer of the Company, in form and detail satisfactory to the
Administrative Agent, of the amount of the Net Available Proceeds of the Current
Disposition and of all such prior Dispositions within such previous consecutive
24 month period and will prepay the Loans (and/or provide cover for Letter of
Credit Liabilities as specified in clause (g) below), and the Commitments shall
be subject to automatic reduction, in an aggregate amount equal to the excess
over $500,000 of the aggregate amount of the Net Available Proceeds of the
Current Disposition and the Net Available Proceeds of such prior Dispositions.
Such prepayment and reduction to be effected in each case in the manner and to
the extent specified in clause (f) of this Section 2.10.
(f) Application. Prepayments and reductions of Commitments described
in the above clauses of this Section 2.10 (other than in clause (a) above) shall
be effected as follows:
(i) first, the amount of the prepayment specified in such clauses
shall be applied ratably to Term Loan A and Term Loan B then outstanding
and, with respect to each Term Loan, ratably among the maturities of the
installments thereof, provided that for so long as Term Loan A is
outstanding, any Lender holding a Term Loan B Loan may waive its right to
such Lender's portion of any mandatory prepayment made pursuant to Section
2.10(b), (c), (d) or (e), in which case such amounts that would have been
paid to such Lender will be applied ratably to Term Loan A and Term Loan B
(other than such Term Loan B Loans that are the subject of the waiver) and
ratably among the maturities of the installments of such Term Loans; and
(ii) second, the Revolving Credit Commitments shall be automatically
reduced in an amount equal to any excess over the amounts prepaid pursuant
to the foregoing paragraph (i) (and to the extent that, after giving
effect to such reduction, the aggregate principal amount of Revolving
Credit Loans, together with the aggregate amount of all Letter of Credit
Liabilities, would exceed the Revolving Credit Commitments, the Company
shall, first, prepay Revolving Credit Loans and, second, provide cover for
Letter of Credit Liabilities as specified in clause (g) below, in an
aggregate amount equal to such excess).
(g) Cover for Letter of Credit Liabilities. In the event that the
Company shall be required pursuant to this Section 2.10, or pursuant to Section
3.01(a) hereof, to provide cover for Letter of Credit Liabilities, the Company
shall effect the same by paying to the Administrative Agent immediately
available funds in an amount equal to the required amount, which funds shall be
retained by the Administrative Agent in the Collateral Account (as provided
therein as collateral security in the first instance for the Letter of Credit
Liabilities) until such time as the Letters of Credit shall have been terminated
and all of the Letter of Credit Liabilities paid in full.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Administrative Agent
for account of each Lender the entire outstanding principal amount of such
Lender's Revolving Credit Loans, and each Revolving Credit Loan shall mature, on
the Revolving Credit Commitment Termination Date.
(b) The Company hereby promises to pay to the Administrative Agent
for account of each Lender the principal of such Lender's Term Loans in
installments payable on the respective dates (the "Principal Payment Dates") set
forth below:
-24-
24184999
<PAGE>
Term Loan A
Principal Payment Date Amount of Installment ($)
June 30, 1996 $500,000
September 30, 1996 $500,000
December 31, 1996 $500,000
March 31, 1997 $500,000
June 30, 1997 $625,000
September 30, 1997 $625,000
December 31, 1997 $625,000
March 31, 1998 $625,000
June 30, 1998 $687,500
September 30, 1998 $687,500
December 31, 1998 $687,500
March 31, 1999 $687,500
June 30, 1999 $750,000
September 30, 1999 $750,000
December 31, 1999 $750,000
March 31, 2000 $750,000
June 30, 2000 $875,000
September 30, 2000 $875,000
December 31, 2000 $875,000
March 31, 2001 $875,000
June 30, 2001 $625,000
September 30, 2001 $625,000
Term Loan B
June 30, 1996 $62,500
September 30, 1996 $62,500
December 31, 1996 $62,500
March 31, 1997 $62,500
June 30, 1997 $62,500
September 30, 1997 $62,500
December 31, 1997 $62,500
June 30, 1998 $62,500
March 31, 1998 $62,500
September 30, 1998 $62,500
December 31, 1998 $62,500
March 31, 1999 $62,500
June 30, 1999 $250,000
September 30, 1999 $250,000
-25-
24184999
<PAGE>
December 31, 1999 $250,000
March 31, 2000 $250,000
June 30, 2000 $250,000
September 30, 2000 $250,000
December 31, 2000 $250,000
March 31, 2001 $250,000
June 30, 2001 $1,250,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $3,062,500
September 30, 2002 $3,062,500
December 31, 2002 $3,062,500
March 31, 2003 $3,062,500
If the Company does not borrow the full amount of the aggregate Term Loan
Commitments on or before the Term Loan Commitment Termination Date, the
shortfall shall be applied to reduce the foregoing installments ratably.
3.02 Interest. (a) The Company hereby promises to pay to the
Administrative Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and including the
date of such Loan to but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(i) during such periods as such Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) plus the Applicable Margin; and
(ii) during such periods as such Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Rate for such Loan for
such Interest Period plus the Applicable Margin.
(b) Notwithstanding the foregoing, the Company hereby promises to pay to
the Administrative Agent for account of each Lender,
(i) with regard to Base Rate Loans, upon the occurrence and during
the continuance of a Default, interest at the Base Rate plus the
Applicable Margin plus 2%;
(ii) with regard to Eurodollar Loans, upon the occurrence and during
the continuance of a Default, interest at the Eurodollar Rate plus the
Applicable Margin plus 2%; and
(iii) with respect to any Reimbursement Obligation held by such
Lender and any interest, fees or any other amount payable by the Company
hereunder or under the Notes held by such Lender to or for account of such
Lender, upon the occurrence and during the continuance of a Default,
interest at the Base Rate plus the Applicable Margin for Revolving Credit
Loans plus 2%.
(c) Accrued interest on each Loan shall be payable (i) in the case of a
Base Rate Loan, on the Monthly Dates, (ii) in the case of a Eurodollar Loan, on
the earlier of the last day of each Interest Period therefor and, if such
Interest Period is longer than three months, at three-month intervals following
the first day of such Interest Period, and (iii) in the case of any Loan, upon
the payment or prepayment thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid or Converted),
except that interest payable
-26-
24184999
<PAGE>
pursuant to the foregoing clause (b) shall be payable from time to time on
demand. Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall give notice thereof
to the Lenders to which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
the Company under this Agreement and the Notes and the Fee Letters, and, except
to the extent otherwise provided therein, all payments to be made by the
Obligors under any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Administrative Agent to such account as the Administrative Agent shall specify
from time to time, not later than 1:00 p.m. New York time on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to be made may
(but shall not be obligated to) debit the amount of any such payment that is not
made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company and the Administrative Agent).
(c) The Company shall, at the time of making each payment under this
Agreement or any Note for account of any Lender, specify to the Administrative
Agent (which shall so notify the intended recipient(s) thereof) the Loans,
Reimbursement Obligations or other amounts payable by the Company hereunder to
which such payment is to be applied (and in the event that the Company fails to
so specify, or if an Event of Default has occurred and is continuing, the
Administrative Agent may distribute such payment to the Lenders for application
in such manner as it or the Majority Lenders, subject to Section 4.02 hereof,
may determine to be appropriate).
(d) Except to the extent otherwise provided in the last sentence of
Section 2.03(e) hereof, each payment received by the Administrative Agent under
this Agreement or any Note for account of any Lender shall be paid by the
Administrative Agent promptly to such Lender, in immediately available funds,
for account of such Lender's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable for
any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of a particular Class from the Lenders under
Section 2.01 hereof shall be made from the relevant Lenders, each payment of
commitment fee under Section 2.05 hereof in respect of Commitments of a
particular Class shall be made for account of the relevant Lenders, and each
termination or reduction of the amount of the Commitments of a particular Class
under Section 2.04 hereof shall be applied to the respective Commitments of such
Class of the relevant Lenders, pro rata according to the amounts of their
respective Commitments of such Class; (b) the making, Conversion and
Continuation of Revolving Credit Loans and Term Loans of a particular Type
(other than Conversions provided for by Section 5.04 hereof) shall be made pro
rata among the relevant Lenders according to the amounts of their respective
Revolving Credit and Term Loan Commitments (in the case of making of Loans) or
their respective Revolving Credit Loans and Term Loans (in the case of
Conversions and Continuations of Loans), except as provided in Section 5.04
hereof, Eurodollar Loans of each Class having the same Interest Period shall be
allocated pro rata among the Lenders holding the relevant Commitments or Loans
according to the amounts of their Commitments of such Class (in the case of the
making of Loans) or their respective Loans of such Class (in the case of
Conversions and Continuations of Loans) ; (c) each payment or prepayment of
principal of Revolving Credit Loans or Term Loans by the Company shall be made
for account of the relevant Lenders pro rata in accordance with
-27-
24184999
<PAGE>
the respective unpaid principal amounts of the Loans of such Class held by them
(and, with respect to prepayments of Term Loans, pro rata among Term Loan A and
Term Loan B); and (d) each payment of interest on Revolving Credit Loans and
Term Loans by the Company shall be made for account of the relevant Lenders pro
rata in accordance with the amounts of interest on such Loans then due and
payable to the respective Lenders.
4.03 Computations. Interest on all Loans, Reimbursement Obligations,
letter of credit fees and commitment fee shall be computed on the basis of a
year of 360 days and actual days elapsed (including the first day but, except as
otherwise provided in Section 2.03(g) hereof, excluding the last day) occurring
in the period for which payable.
4.04 Minimum Amounts. Except for mandatory prepayments made pursuant
to Section 2.10 hereof and Conversions or prepayments made pursuant to Section
5.04 hereof, each borrowing, Conversion and partial prepayment of principal of
Loans shall be in an aggregate amount at least equal to $500,000 or a larger
multiple of $500,000 (borrowings, Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having different Interest
Periods at the same time hereunder to be deemed separate borrowings, Conversions
and prepayments for purposes of the foregoing, one for each Type or Interest
Period), provided that the aggregate principal amount of Eurodollar Loans having
the same Interest Period shall be in an amount at least equal to $1,000,000 or a
larger multiple of $500,000 and, if any Eurodollar Loans would otherwise be in a
lesser principal amount for any period, such Loans shall be Base Rate Loans
during such period.
4.05 Certain Notices. Notices by the Company to the Administrative
Agent of terminations or reductions of the Commitments, of borrowings,
Conversions, Continuations and optional prepayments of Loans and of Classes of
Loans, of Types of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 10:00 a.m. New York time on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
Number of
Business
Notice Days Prior
Termination or reduction
of Revolving Credit Commitment 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 1
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount to be
terminated or reduced. Each such notice of borrowing, Conversion, Continuation
or optional prepayment shall specify the Class of Loans to be borrowed,
Converted, Continued or prepaid and the amount (subject to Section 4.04 hereof)
and Type of each Loan to be borrowed, Converted, Continued or prepaid (and, in
the case of a Conversion, the Type of Loan to result from such Conversion) and
the date of borrowing, Conversion, Continuation or optional prepayment (which
shall be a Business Day). Each such notice of the duration of an Interest Period
shall specify the Loans to which such Interest Period is to relate. The
Administrative Agent shall promptly notify the Lenders of the contents of each
such notice. In the event that the Company fails to select the Type of Loan, or
the duration of any Interest Period for any Eurodollar Loan, within the time
period and otherwise as provided in this Section 4.05, such Loan (if outstanding
as a Eurodollar Loan) will be automatically Converted into a Base Rate Loan on
the last day of the then current Interest
-28-
24184999
<PAGE>
Period for such Loan or (if outstanding as a Base Rate Loan) will remain as, or
(if not then outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by such Lender hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date (the "Advance Date") such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day and, if
such recipient(s) shall fail promptly to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, provided that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Administrative Agent
within three Business Days of the Advance Date, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to pay
interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made by
the Company to the Lenders, the Company and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment at the Base Rate plus the Applicable Margin for the
related Loan plus 2% (and, in case the recipient(s) shall return the
Required Payment to the Administrative Agent, without limiting the
obligation of the Company under Section 3.02 hereof to pay interest to
such recipient(s) at the rate provided for in clause (b) thereof) in
respect of the Required Payment) and
(ii) if the Required Payment shall represent proceeds of a Loan to be
made by the Lenders to the Company, the Payor and the Company shall each
be obligated retroactively to the Advance Date to pay interest in respect
of the Required Payment at the rate of interest provided for such Required
Payment pursuant to Section 3.02 hereof (and, in case the Company shall
return the Required Payment to the Administrative Agent, without limiting
any claim the Company may have against the Payor in respect of the
Required Payment).
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, banker's lien or counterclaim a Lender may otherwise
have, each Lender shall be entitled, at its option, to offset balances held by
it for account of the Company at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans,
Reimbursement Obligations or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such balances are then due to
the Company), in which case it shall promptly notify the Company and the
Administrative Agent thereof, provided that such Lender's failure to give such
notice shall not affect the validity thereof.
(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan of any Class or Letter of Credit Liability
owing to it or payment of any other amount under this Agreement or any other
Basic Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from the Administrative
Agent as provided herein), and, as a result of such payment, such Lender shall
have received a greater percentage of the principal of or interest on the Loans
of such Class or Letter of Credit Liabilities or such other amounts then due
hereunder or thereunder by such Obligor to such Lender than the percentage
received by any other Lender, it shall promptly purchase from such other Lenders
participations in (or, if
-29-
24184999
<PAGE>
and to the extent specified by such Lender, direct interests in) the Loans of
such Class or Letter of Credit Liabilities or such other amounts, respectively,
owing to such other Lenders (or in interest due thereon, as the case may be) in
such amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans of such Class or Letter of
Credit Liabilities or such other amounts, respectively, owing to each of the
Lenders, provided that if at the time of such payment the outstanding principal
amount of the Loans of any Class shall not be held by the Lenders pro rata in
accordance with their respective Commitments of such Class in effect at the time
such Loans were made, then such purchases of participations and/or direct
interests shall be made in such manner as will result, as nearly as is
practicable, in the outstanding principal amount of the Loans being held by the
Lenders pro rata according to the amounts of such Commitments. To such end all
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of any Obligor. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from time to time
such amounts as such Lender may reasonably determine to be necessary to
compensate such Lender for any costs that such Lender determines are
attributable to its making or maintaining of any Eurodollar Loans or its
obligation to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such Loans or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
that:
(i) shall subject any Lender (or its Applicable Lending Office
for any of such Loans) to any tax, duty or other charge in respect of such
Loans or its Notes or changes the basis of taxation of any amounts payable
to such Lender under this Agreement or its Notes in respect of any of such
Loans (other than (a) any tax, duty or charge imposed upon any Lender by
any jurisdiction other than the United States or any political subdivision
thereof and (b) franchise, capital, branch profits taxes or taxes imposed
with respect to the net income of such Lender or of its Applicable Lending
Office with respect to any of such Loans by the jurisdiction in which such
Lender is organized or has its principal office or such Applicable Lending
Office or in any other jurisdiction if not imposed by reason of the
presence of the Company or its Affiliates in such jurisdiction); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, such Lender (including, without
limitation, Eurodollar Rate Loans), or any commitment of such Lender
(including, without limitation, the Commitments of such Lender hereunder);
or
-30-
24184999
<PAGE>
(iii) imposes any other condition affecting this Agreement or its
Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender thereafter to make or Continue
Loans of the Type with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable), provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender that includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets that it may hold, then, if such Lender so
elects by notice to the Company (with a copy to the Administrative Agent), the
obligation of such Lender to make or Continue, or to Convert Loans of any other
Type into, Loans of such Type hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 5.04
hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any costs that it
determines are attributable to the maintenance by such Lender (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory Change
or (ii) implementing any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the national level the
Basle Accord (including, without limitation, the Final Risk-Based Capital
Guidelines of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 208, Appendix A; 12 C.F.R. Part 225, Appendix A) and the Final Risk-Based
Capital Guidelines of the Office of the Comptroller of the Currency (12 C.F.R.
Part 3, Appendix A)), of capital in respect of its Commitments or Loans (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Lender (or any Applicable Lending
Office or such bank holding company) to a level below that which such Lender (or
any Applicable Lending Office or such bank holding company) could have achieved
but for such law, regulation, interpretation, directive or request). For
purposes of this Section 5.01(c) and Section 5.06 hereof, "Basle Accord" shall
mean the proposals for risk-based capital framework described by the Basle
Committee on Banking Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect from time to time
or any replacement thereof.
(d) Each Lender shall notify the Company of any event occurring after
the date of this Agreement entitling such Lender to compensation under paragraph
(a) or (c) of this Section 5.01 as promptly as practicable, but in any event
within 45 days, after such Lender obtains actual knowledge thereof; provided
that (i) if any Lender fails to give such notice within 45 days after it obtains
actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of any costs
resulting from such event, only be entitled to payment under this Section 5.01
for costs incurred from and after the date 45 days prior to the date that such
Lender does give such notice and (ii) each Lender will designate a different
Applicable Lending Office for the Loans of such Lender affected by such event if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no obligation
to designate an Applicable Lending Office located in the United States of
America. Each Lender will furnish to the Company a certificate setting forth the
basis and amount of each request
-31-
24184999
<PAGE>
by such Lender for compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Lender for purposes of this Section 5.01
of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this
Section 5.01, or of the effect of capital maintained pursuant to paragraph (c)
of this Section 5.01, on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in respect of Loans,
and of the amounts required to compensate such Lender under this Section 5.01,
shall be conclusive, provided that such determinations and allocations are made
on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate for
any Interest Period:
(a) the Administrative Agent reasonably determines, which
determination shall be conclusive (in the absence of demonstrable error),
that quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for any Type of Eurodollar Loans
as provided herein; or
(b) the Majority Lenders reasonably determine, which determination
shall be conclusive (in the absence of demonstrable error), and notify (or
notifies, as the case may be) the Administrative Agent that the relevant
rates of interest referred to in the definition of "Eurodollar Rate" in
Section 1.01 hereof upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined are not
likely adequately to cover the cost to such Lenders of making or
maintaining such Type of Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Loans of such Type, to Continue
Loans of such Type or to Convert Loans of any other Type into Loans of such
Type, and the Company shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Loans of such Type, either prepay such Loans or
Convert such Loans into another Type of Loan in accordance with Section 2.09
hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder, such Lender shall promptly notify the Company thereof (with a
copy to the Administrative Agent) and such Lender's obligation to make or
Continue, or to Convert Loans of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain Eurodollar
Loans (in which case the provisions of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Lender to
make a particular Type of Eurodollar Loan or to Continue, or to Convert Loans of
any other Type into, Loans of a particular Type shall be suspended pursuant to
Section 5.01 or 5.03 hereof (Loans of such Type being herein called "Affected
Loans" and such Type being herein called the "Affected Type"), such Lender's
Affected Loans shall be automatically Converted into Base Rate Loans on the last
day(s) of the then current Interest Period(s) for Affected Loans (or, in the
case of a Conversion required by Section 5.01(b) or 5.03 hereof, on such earlier
date as such Lender may specify to the Company with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its
Base Rate Loans;
(b) all Loans that would otherwise be made or Continued by such
Lender as Loans of the Affected Type shall be made or Continued instead as
Base Rate Loans, and all Loans of such Lender that would otherwise be
Converted into Loans of the Affected Type shall be Converted instead into
(or shall remain as) Base Rate Loans; and
-32-
24184999
<PAGE>
(c) if Loans of other Lenders of the Affected Type are subsequently
Converted into Loans of another Type (other than Base Rate Loans), such
Lender's Base Rate Loans shall be automatically Converted on the
Conversion date for such Loans of the other Lenders into Loans of such
other Type to the extent necessary so that, after giving effect thereto,
all Loans held by such Lender and the Lenders whose Loans are so Converted
are held pro rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
If such Lender gives notice to the Company with a copy to the Administrative
Agent that the circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to the Conversion of such Lender's Affected Loans pursuant to this Section
5.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the Affected Type made
by other Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the Affected Type, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Loans of the Affected Type and by such Lender are held pro rata (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative Agent
for account of each Lender, upon the written request of such Lender (accompanied
by a schedule setting forth in reasonable detail the determination of the costs
of such Lender) through the Administrative Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost or expense that such Lender determines is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 10 hereof)
on a date other than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 7 hereof to be satisfied) to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender).
5.06 Additional Costs in Respect of Letters of Credit. Without
limiting the obligations of the Company under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord there shall be imposed, modified or deemed applicable any tax,
reserve, special deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to any Lender or
Lenders of issuing (or purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit hereunder or reduce any amount receivable by any Lender hereunder in
respect of any Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Lender's or Lenders' reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then, upon demand by such Lender or Lenders (through the Administrative
Agent), the Company shall pay immediately to the Administrative Agent for
account of such Lender or Lenders, from time to
-33-
24184999
<PAGE>
time as specified by such Lender or Lenders (through the Administrative Agent),
such additional amounts as shall be sufficient to compensate such Lender or
Lenders (through the Administrative Agent) for such increased costs or
reductions in amount. A statement as to such increased costs or reductions in
amount incurred by any such Lender or Lenders, submitted by such Lender or
Lenders to the Company shall be conclusive in the absence of manifest error as
to the amount thereof.
5.07 U.S. Taxes.
(a) The Company agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Tax imposed with respect to such payment (or
in lieu thereof, payment of such U.S. Tax by such non-U.S. Person), will not be
less than the amount stated herein to be then due and payable, provided that the
foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to a Lender hereunder unless such Lender is, on
the date hereof (or on the date it becomes a Lender as provided in Section
12.06(b) hereof) and on the date of any change in the Applicable Lending
Office of such Lender, completely exempt from withholding of U.S. tax and
either entitled to submit a Form 1001 (relating to such Lender and
entitling it to a complete exemption from withholding on all interest to
be received by it hereunder in respect of the Loans) or Form 4224
(relating to all interest to be received by such Lender hereunder in
respect of the Loans), or
(ii) to any U.S. Tax imposed solely by reason of the failure by such
non-U.S. Person to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of
such non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition to relief or
exemption from such U.S. Tax.
For the purposes of this Section 5.07(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), (y) "U.S. Person" shall mean a citizen, national or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United States of
America, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof or
therein.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Lender from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Company
shall deliver to the Administrative Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction, withholding or payment
(as the case may be).
(c) Provided that no Default shall have occurred and be continuing,
the Company may, at any time, replace any Lender which is not a U.S. Person and
as to which the Company is obligated to make payments under this Section 5.07,
by giving not less than ten Business Days' prior notice to the Administrative
Agent (who shall promptly notify such Lender), that it intends to replace such
Lender with one or more lenders (including, but not limited to, any other Lender
under this Agreement) selected by the Company that (i) have agreed to replace
such Lender as provided in this paragraph and (ii) are reasonably acceptable to
the Administrative Agent. Upon the effective date of any replacement under this
paragraph and as a condition to such replacement, the replacement lender or
lenders shall pay to the Lender being replaced the principal of the Loans held
by such Lender and the
-34-
24184999
<PAGE>
Company shall pay to such Lender all accrued interest on such Loans and all
other amounts owing to such Lender hereunder (including any amounts payable
under Section 5.05 hereof as if such Loans were being prepaid by the Company),
whereupon each such replacement lender (if not already a Lender) shall become a
"Lender" for all purposes of this Agreement.
5.08 Mitigation. If any taxes are imposed for which the Company would
be required to make a payment under Section 5, the applicable Lender shall use
its reasonable efforts to avoid or reduce such taxes by taking any appropriate
action (including, without limitation, assigning its rights hereunder to a
related entity or a different Applicable Lending Office).
Section 6. Guarantee; Other Triarc Matters.
6.01 The Guarantee. The Guarantors hereby jointly and severally
guarantee to each Lender and each Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lenders to, and the Notes held by each Lender of, the Company and all other
amounts from time to time owing to the Lenders or the Administrative Agent by
the Company under this Agreement and under the Notes and by any Obligor under
any of the other Basic Documents, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called the "Guaranteed
Obligations"). The Guarantors hereby further jointly and severally agree that if
the Company shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
6.02 Obligations Unconditional. The payment obligations of the
Guarantors under Section 6.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the payment obligations of the Company under this Agreement,
the Notes or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the payment obligations
of the Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the payment liability of the Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.
-35-
24184999
<PAGE>
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The payment obligations of the Guarantors under
this Section 6 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Guarantors jointly and
severally agree that they will indemnify the Administrative Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
6.04 Subrogation. The Guarantors hereby jointly and severally agree
that until the payment and satisfaction in full of all Guaranteed Obligations
and the expiration and termination of the Commitments of the Lenders under this
Agreement they shall not exercise any right or remedy arising by reason of any
performance by them of their guarantee in Section 6.01 hereof, whether by
subrogation or otherwise, against the Company or any other guarantor of any of
the Guaranteed Obligations or any security for any of the Guaranteed
Obligations. The Company will not, and will not cause its Subsidiaries to, pay
to any Guarantor any amounts paid by such Guarantor to the Lenders pursuant to
Section 6.01 if, prior to or after giving effect to such payment, any Default
shall be continuing.
6.05 Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Lenders, the payment obligations of the Company
under this Agreement and the Notes may be declared to be forthwith due and
payable as provided in Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 10)
for purposes of Section 6.01 hereof notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Company) shall forthwith become due and payable by the Guarantors for purposes
of said Section 6.01.
6.06 Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Section 6 constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08 Rights of Contribution. The Subsidiary Guarantors hereby agree,
as between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the Properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 6.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 6 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.
-36-
24184999
<PAGE>
For purposes of this Section 6.08, (i) "Excess Funding Guarantor"
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "Excess Payment" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro
Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share" shall mean,
for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all Properties of
such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this Section 6.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Closing Date and the aggregate present fair saleable value
of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such
value and amount on the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.
6.09 General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, any Lender, the Administrative
Agent or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
6.10 Representations and Warranties of Triarc. Triarc hereby
represents and warrants that:
(a) Action and Approvals. Triarc has full power and authority to execute,
deliver and perform Section 6 and Section 12 (other than Section 12.03) of this
Agreement and the other Basic Documents to which Triarc is a party and to incur
the obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary corporate action. No authorizations,
approvals or consents of, and no filings or registrations with, any governmental
or regulatory authority or agency, or any securities exchange, are necessary for
the execution, delivery or performance by Triarc of Section 6 and Section 12
(other than Section 12.03) of this Agreement or any other Basic Document to
which Triarc is a party.
(b) Enforceability. Section 6 and Section 12 (other than Section 12.03) of
this Agreement and each other Basic Document to which Triarc is a party
constitute the legal, valid and binding obligation of Triarc, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and (b) the application of general principles of equity
(regardless of whether such enforcement is considered in a proceeding at law or
in equity).
(c) No Breach. None of the execution and delivery of this Agreement and
the other Basic Documents to which Triarc is a party, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of Triarc, or any applicable
law or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any material agreement or instrument to
which Triarc is a party or by which it or any of its Property is bound or to
which it is subject, or constitute a material default under any such
-37-
24184999
<PAGE>
agreement or instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any Lien upon any
Property of Triarc pursuant to the terms of any such agreement or instrument.
(d) No Prior Claims. On the date hereof, there exist no claims (including
claims for indemnification or contribution) in favor of Triarc and against the
Company for any damages to Triarc, liabilities of the Company (whether for
indebtedness or for services rendered) or for costs or expenses of Triarc
payable by the Company, other than pursuant to any material agreements set forth
in Part C of Schedule I hereto.
6.11 Covenants of Triarc. Triarc covenants and agrees with the
Lenders and the Administrative Agent that, so long as any Commitment, Loan or
Letter of Credit Liability is outstanding and until payment in full of all
amounts payable hereunder:
(a) Quarterly Triarc Financials. Triarc shall deliver to each of
the Lenders the following financial information regarding Triarc:
(I) as soon as available, each quarterly report of Triarc on
Form 10-Q, in the form filed with the SEC or distributed to
stockholders of Triarc, together with any amendments or supplements
to any such report; and
(II) in the event that Triarc shall no longer be subject to
reporting requirements under the Exchange Act, as soon as available
and in any event within 50 days after the end of each quarterly
fiscal period of each fiscal year of Triarc, consolidated statements
of income, retained earnings and cash flow of Triarc and its
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheets of Triarc and its Subsidiaries as at the
end of such period, setting forth in each case in comparative form
the corresponding consolidated figures for the corresponding period
in the preceding fiscal year, accompanied by a certificate of a
senior financial officer of Triarc, which certificate shall state
that said consolidated financial statements fairly present in all
material respects the consolidated financial condition and results of
operations of Triarc and its Subsidiaries in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such period (subject to normal year-end audit
adjustments); and
(b) Annual Triarc Financials. Triarc shall deliver to each of the
Lenders the following financial information regarding Triarc:
(I) as soon as available, each annual report of Triarc on Form
10-K and filed with the SEC and each Annual Report to Stockholders
for such fiscal year, in each case, in the form filed with the SEC or
distributed to stockholders of Triarc, together with any amendments
or supplements to any such report; and
(II) in the event that Triarc shall no longer be subject to
reporting requirements under the Exchange Act, as soon as available
and in any event within 115 days after the end of each fiscal year of
Triarc, consolidated statements of income, retained earnings and cash
flow of Triarc and its Subsidiaries for such fiscal year and the
related consolidated balance sheets of Triarc and its Subsidiaries as
at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated figures for the
preceding fiscal year, and accompanied by an opinion thereon of
Deloitte & Touche, LLP or other independent certified public
accountants of recognized national standing, which opinion shall be
given without material qualification or a "going concern" exception,
and shall state that said consolidated financial statements fairly
present in all material respects the consolidated financial condition
and results of operations of Triarc and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with generally
accepted accounting principles, and a certificate of such accountants
stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any
Default.
-38-
24184999
<PAGE>
(c) Management Fees. Triarc agrees with the Company and the Lenders
that, within 60 days after the end of the fiscal years of the Company ending on
December 31, 1996 and December 31, 1997, it will pay to the Company (as a
reimbursement of overpaid Management Fees) an amount equal to the excess (if
any) of:
(i) the aggregate amount of Management Fees paid to Triarc during
such fiscal year, over
(ii) the excess (if any) of (x) EBITDA for such fiscal year over
(y) $12,500,000.
(d) Wholly Owned Subsidiary. Triarc will at all times cause the
Company to be a Wholly Owned Subsidiary of Triarc.
Section 7. Conditions Precedent.
7.01 Initial Extension of Credit. The obligation of any Lender to
make its initial extension of credit hereunder (whether by making a Loan or
issuing a Letter of Credit) is subject to the conditions precedent that (i) such
extension of credit shall be made on or before June 15, 1996 and (ii) the
Administrative Agent shall have received the following documents, each of which
shall be satisfactory to the Administrative Agent (and to the extent specified
below, to each Lender or the Co-Agent) in form and substance:
(a) Corporate Documents. Certified copies of the charter and by-laws
(or equivalent documents) of each Obligor and of all corporate authority
for each Obligor (including, without limitation, board of director
resolutions and evidence of the incumbency of officers) with respect to
the execution, delivery and performance of such of the Basic Documents to
which such Obligor is intended to be a party and each other document to be
delivered by such Obligor from time to time in connection herewith and the
extensions of credit hereunder (and the Administrative Agent and each
Lender may conclusively rely on such certificate until it receives notice
in writing from such Obligor to the contrary).
(b) Officer's Certificate. A certificate of a senior officer of the
Company, dated the Closing Date, to the effect set forth in the first sentence
of Section 7.02 hereof.
(c) Pro Forma Balance Sheet. A pro forma balance sheet of the
Company, giving effect to the making of the Loans on the Closing Date and
the consummation of the other transactions contemplated to occur on the
Closing Date, in form and substance satisfactory to the Lenders.
(d) Lock-box Arrangements. The agreements required by Section 4.02
of the Security Agreement with respect to the payment of the Company's accounts
receivable.
(e) Borrowing Base Certificate. A Borrowing Base Certificate as of
a date not more than seven days prior to the Closing Date, in form and substance
reasonably satisfactory to the Co-Agent.
(f) Opinion of New York Counsel to the Obligors. An opinion, dated
the Closing Date, of Irene B. Fisher, Assistant General Counsel of Triarc
Companies, Inc., substantially in the form of Exhibit F hereto and
covering such other matters as the Administrative Agent, the Co-Agent or
any Lender may reasonably request (and each Obligor hereby instructs such
counsel to deliver such opinion to the Lenders, the Administrative Agent
and the Co-Agent).
(g) Opinion of South Carolina Counsel to the Company. An opinion,
dated the Closing Date, of the McNair Law Firm, P.A., South Carolina
counsel to the Company, substantially in the form of Exhibit G hereto (and
the Company hereby instructs such counsel to deliver such opinion to the
Lenders, the Administrative Agent and the Co-Agent).
(h) Notes. The Notes, duly completed and executed.
-39-
24184999
<PAGE>
(i) Security Agreement. The Security Agreement, duly executed and
delivered by the Company, and the Subsidiary Guarantors and the
Administrative Agent. In addition, the Company shall have taken such other
action (including, without limitation, delivering to the Administrative
Agent, for filing, appropriately completed and duly executed copies of
Uniform Commercial Code financing statements) as the Administrative Agent
shall have requested in order to perfect the security interests created
pursuant to the Security Agreement.
(j) Pledge Agreement. The Pledge Agreement, duly executed and
delivered by TXL and the Administrative Agent and the certificates
identified in Annex 1 thereto, accompanied by undated stock powers
executed in blank. In addition, TXL shall have taken such other action
(including, without limitation, delivering to the Administrative Agent,
for filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Administrative Agent shall
have requested in order to perfect the security interests created pursuant
to the Pledge Agreement.
(k) Mortgage and Title Insurance. The following documents each of
which shall be executed (and, where appropriate, acknowledged) by Persons
satisfactory to the Administrative Agent:
(i) one or more Mortgages covering the facilities of the Company
located in Greenville County, South Carolina and Barnwell County,
South Carolina, duly executed and delivered by the Company in
recordable form (in such number of copies as the Administrative Agent
shall have requested); and
(ii) one or more mortgagee policies of title insurance on forms
of and issued by one or more title companies satisfactory to each
Lender (the "Title Companies"), insuring the validity and priority of
the Liens created under the Mortgage(s) for and in amounts
satisfactory to each Lender, subject only to such exceptions as are
satisfactory to each Lender and, to the extent necessary under
applicable law, for filing in the appropriate county land office(s),
Uniform Commercial Code financing statements covering fixtures, in
each case appropriately completed and duly executed.
In addition, the Company shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the
issuance of such policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes payable in
connection with recording the Mortgage in the appropriate county land
office(s).
(l) Insurance. Certificates of insurance evidencing the existence of
all insurance required to be maintained by the Company pursuant to Section
9.04 hereof and the designation of the Administrative Agent as the loss
payee or additional named insured, as the case may be, thereunder to the
extent required by said Section 9.04, such certificates to be in such form
and contain such information as is specified in said Section 9.04. In
addition, the Company shall have delivered a certificate of the chief
executive officer or the chief operating officer of the Company setting
forth the insurance obtained by it in accordance with the requirements of
Section 9.04 and stating that such insurance is in full force and effect
and that all premiums then due and payable thereon have been paid. In
addition, the Lenders shall be satisfied with the Company's existing
insurance coverage, including, as to the amount of coverage deductibles,
types of coverage and exceptions thereto.
(m) Environmental Report. An executive summary of the environmental
survey and assessment prepared by Pilko & Associates, dated April 30,
1996, in form and substance satisfactory to each Lender.
(n) Solvency Certificate. A certificate of the chief executive
officer or the chief operating officer of the Company, to the effect that,
as of the Closing Date and after giving effect to the extensions of credit
to be made hereunder on the Closing Date and the other transactions
contemplated hereby, (x) the aggregate value of all Properties of the
Company at their present fair saleable value (i.e., the amount that may be
-40-
24184999
<PAGE>
realized within a reasonable time, considered to be six months to one
year, either through collection or sale at the regular market value,
conceiving the latter as the amount that could be obtained for the
Property in question within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under
ordinary selling conditions), exceed the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Company, (y) the Company will not have an
unreasonably small capital with which to conduct its business operations
as heretofore conducted and (z) the Company will have sufficient cash flow
to enable it to pay its debts as they mature.
(o) TXL Matters. Each of the following:
(i) Certified copies of the Bill of Sale with respect to the
Graniteville Sale (as defined below), dated April 29, 1996, and such
receipts, payment instructions and flow of funds memoranda, in each
case, relating to the consummation of the sale of the assets of
Graniteville Company, a South Carolina corporation, to Avondale Mills
(the "Graniteville Sale"), on terms and conditions satisfactory to
the Administrative Agent, the Co-Agent and the Lenders; and
(ii) a certified copy of the Avondale Supply Agreement.
(p) Triarc Matters. Each of the following:
(i) a certified copy of the Management Services Agreement;
and
(ii) a certified copy of the Tax Sharing Agreement,
in each case, in form and substance satisfactory to the Co-Agent.
(q) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to the Administrative Agent may
reasonably request.
The obligation of any Lender to make its initial extension of credit hereunder
is also subject to the payment by the Company of such fees as the Company and
Triarc shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith pursuant to the Fee Letters, including, without limitation,
the reasonable fees and expenses of Mayer, Brown & Platt, special New York
counsel to ING and BKB in connection with the negotiation, preparation,
execution and delivery of this Agreement and the Notes and the other Basic
Documents and the extensions of credit hereunder (to the extent that statements
for such fees and expenses have been delivered to the Company, setting forth the
details of the services performed by the respective parties).
7.02 Initial and Subsequent Extensions of Credit. The obligation of
any Lender to make any Loan (including such Lender's initial Loan) or otherwise
extend any credit to the Company upon the occasion of each borrowing or other
extension of credit hereunder is subject to the further conditions precedent
that, both immediately prior to the making of such Loan or other extension of
credit and also after giving effect thereto and to the intended use thereof: (a)
no Default shall have occurred and be continuing; (b) the representations and
warranties made by the Company and, with respect to any Subsidiary of the
Company established pursuant to Section 9.20, such Subsidiary, in Section 8
hereof, and by each Obligor in each of the other Basic Documents to which it is
a party, shall be true and complete on and as of the date of the making of such
Loan or other extension of credit with the same force and effect as if made on
and as of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date); and
(c) the aggregate principal amount of the Revolving Credit Loans together with
the aggregate amount of all Letter of Credit Liabilities shall not exceed the
Borrowing Base reflected on the most recent Borrowing Base Certificate delivered
pursuant to Section 9.01(f) hereof. Each notice of borrowing or request for the
issuance of a Letter of Credit by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the preceding sentence
(both as of the date of such notice or request and, unless the Company otherwise
notifies the Administrative Agent prior to the date of such borrowing or
issuance, as of the date of such borrowing or issuance).
-41-
24184999
<PAGE>
Section 8. Representations and Warranties. The Company represents
and warrants to the Administrative Agent and the Lenders that:
8.01 Corporate Existence. Each of Triarc and the Company: (a) is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation; (b) has all requisite
corporate power and authority, to own its assets and carry on its business
as now being or as proposed to be conducted; and (c) is qualified to do
business and is in good standing in all jurisdictions in which the nature of
the business conducted by it makes such qualification necessary and where
failure so to qualify could (either individually or in the aggregate) have a
Material Adverse Effect.
8.02 Financial Condition. The Company has heretofore furnished or
caused to be furnished to each of the Lenders the following:
(i) balance sheets of the Company as at December 31, 1995 and the
related statements of income, retained earnings and cash flow of the
Company for the fiscal year ended on said date, with the opinion thereon
(in the case of said balance sheet and statements) of Deloitte & Touche,
LLP, and the unaudited balance sheets of the Company as at March 31, 1996
and the related statements of income, retained earnings and cash flow of
the Company for the three-month period ended on such date; and
(ii) the annual report of Triarc for the fiscal year ended on
December 31, 1995 on Form 10-K, together with any amendments or
supplements to any such report.
All such financial statements are complete and correct and fairly present in all
material respects the consolidated financial condition of the Company as at said
dates and the results of operations for the fiscal year and the three-month
period ended on said date (subject, in the case of such financial statements as
at March 31, 1996, to normal year-end audit adjustments), all in accordance with
generally accepted accounting principles and practices applied on a consistent
basis. The Company does not have on the date hereof any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said balance sheets as at said
dates. Since December 31, 1995, there has been no material adverse change in the
consolidated financial condition, operations or business of the Company from
that set forth in said financial statements as at said date.
8.03 Litigation. Except as disclosed to the Lenders in Part B of
Schedule I hereto, there are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of the Company) threatened against the Company or
any of its Subsidiaries that, if adversely determined could reasonably be
expected to (either individually or in the aggregate) have a Material Adverse
Effect.
8.04 No Breach. None of the execution and delivery of this Agreement
and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of any Obligor, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any material agreement or
instrument to which Triarc or the Company is a party or by which any of them or
any of their Property is bound or to which any of them is subject, or constitute
a material default under any such agreement or instrument, or (except for the
Liens created pursuant to the Security Documents) result in the creation or
imposition of any Lien upon any Property of Triarc or the Company pursuant to
the terms of any such agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate power and
authority to execute, deliver and perform its obligations under each of the
Basic Documents to which it is a party; the execution, delivery and performance
by each Obligor of each of the Basic Documents to which it is a party have been
duly authorized by all necessary corporate action on its part (including,
without limitation, any required shareholder approvals); this
-42-
24184999
<PAGE>
Agreement has been duly and validly executed and delivered by each Obligor and
constitutes, and each of the Notes and the other Basic Documents to which it is
a party when executed and delivered by such Obligor (in the case of the Notes,
for value) will constitute, its legal, valid and binding obligation, enforceable
against each Obligor in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and the Avondale Supply Agreement has been
duly and validly executed and delivered by the Company and, to the Company's
knowledge, by Avondale Mills, and constitutes a legal, valid, and binding
obligation of the Company and, to the Company's knowledge and based on certain
legal opinions, Avondale Mills, enforceable in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for filings
and recordings in respect of the Liens created pursuant to the Security
Documents.
8.07 Use of Credit. Neither Triarc nor the Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of any extension of credit
hereunder will be used to buy or carry any Margin Stock.
8.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which the Company would be
under an obligation to furnish a report to the Lenders under Section 9.01(e)
hereof.
8.09 Taxes. The Company and its Subsidiaries have filed (either
directly, or indirectly through a "common parent" (within the meaning of Section
1504 of the Code)) all Federal income tax returns and all other material tax
returns that are required to be filed by them and have paid (either directly, or
indirectly through Triarc) all taxes shown as due pursuant to such returns or
pursuant to any assessment agreed to by the Company or any of its Subsidiaries.
The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Company, adequate.
8.10 Investment Company Act. Neither Triarc nor the Company is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
8.11 Public Utility Holding Company Act. Neither Triarc nor the
Company is a "holding company", or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
8.12 Material Agreements and Liens.
(a) Part C of Schedule I hereof sets forth an exclusive list of the
material agreements to which the Company is a party, certified copies or
summaries of the material terms of which have been heretofore delivered to the
Lenders.
-43-
24184999
<PAGE>
(b) Part A of Schedule I hereto is a complete and correct list, as of
the date of this Agreement, of each Lien securing Indebtedness of any Person and
covering any Property of the Company or any of its Subsidiaries, and the
aggregate Indebtedness secured (or that may be secured) by each such Lien and
the Property covered by each such Lien is correctly described in Part A of said
Schedule I.
8.13 Environmental Matters. Each of the Company and its Subsidiaries
has obtained all environmental, health and safety permits, licenses and other
authorizations required under all Environmental Laws to carry on its business as
now being or as proposed to be conducted, except to the extent failure to have
any such permit, license or authorization would not (either individually or in
the aggregate) have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect, except to the extent that the
failure to be full force and effect would not (individually or in the aggregate)
have a Material Adverse Effect, and each of the Company and its Subsidiaries is
in compliance with the terms and conditions thereof, and is also in compliance
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Environmental Law or in any regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except in either case to the extent failure to comply therewith
would not (either individually or in the aggregate) have a Material Adverse
Effect.
In addition, except as set forth in Schedule II hereto:
(a) No written notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed,
no penalty has been assessed and no investigation or review is pending or,
to the knowledge of the Company, threatened by any governmental or other
entity with respect to any alleged failure by the Company or any of its
Subsidiaries to have any environmental, health or safety permit, license
or other authorization required under any Environmental Law in connection
with the conduct of the business of the Company or any of its Subsidiaries
or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any Hazardous
Materials generated by the Company or any of its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries owns, operates or
leases a treatment, storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and
(i) no polychlorinated biphenyls (PCB's) is or has been present
at any site or facility now owned, operated or leased by the Company or any of
its Subsidiaries;
(ii) no asbestos or asbestos-containing materials is or has been
present at any site or facility now owned, operated or leased by the
Company or any of its Subsidiaries in a condition which is in
material violation of Environmental Laws or which will result in a
material obligation to undertake remediation pursuant to
Environmental Laws;
(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, at any
site or facility now owned, operated or leased by the Company or any
of its Subsidiaries in a condition which is in material violation of
Environmental Laws or which will result in a material obligation to
undertake remediation pursuant to Environmental Laws;
(iv) no Hazardous Materials have been Released at, on or under
any site or facility now owned, operated or leased by the Company or
any of its Subsidiaries in a reportable quantity established by
statute, ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise Released at, on
or under any site or facility now owned, operated or leased by the
Company or any of its Subsidiaries that would (either individually or
in the aggregate) have a Material Adverse Effect.
-44-
24184999
<PAGE>
(c) Neither the Company nor any of its Subsidiaries has transported
or arranged for the transportation of any Hazardous Material to any
location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion on the NPL by
the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
ss. 300.5 ("CERCLIS"), or on any similar state or local list or that is
the subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims against the Company
or any of its Subsidiaries.
(d) To the knowledge of the Company, no Hazardous Material generated
by the Company or any of its Subsidiaries has been recycled, treated,
stored, disposed of or Released by the Company or any of its Subsidiaries
at any location other than those listed in Schedule II hereto, except for
such recycling, treatment, storage, disposal or Releases which will not
result in a material obligation to undertake remediation pursuant to
Environmental Laws.
(e) No written notification of a Release of a Hazardous Material has
been filed by or on behalf of the Company or any of its Subsidiaries and
no site or facility now owned, operated or leased by the Company or any of
its Subsidiaries is listed or proposed for listing on the NPL, CERCLIS or
any similar state list of sites requiring investigation or clean-up.
(f) To the knowledge of the Company, no Liens have arisen under or
pursuant to any Environmental Laws on any site or facility owned, operated
or leased by the Company or any of its Subsidiaries, and no government
action has been taken or is in process that could subject any such site or
facility to such Liens and neither the Company nor any of its Subsidiaries
would be required to place any notice or restriction relating to the
presence of Hazardous Materials at any site or facility owned by it in any
deed to the real property on which such site or facility is located.
(g) All environmental investigations, studies, audits, tests, reviews
or other analyses conducted by or that are in the possession of the
Company or any of its Subsidiaries in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries and that
could result in a Material Adverse Effect have been made available to the
Lenders.
8.14 Capitalization. The authorized capital stock of the Company
consists, on the date hereof, of an aggregate of 25,000 shares of common stock,
par value $1.00 per share, of which 25,000 shares are duly and validly issued
and outstanding, each of which shares is fully paid and nonassessable. As of the
date hereof all of such issued and outstanding shares of common stock are owned
beneficially and of record by TXL. As of the date hereof, (x) there are no
outstanding Equity Rights with respect to the Company and (y), there are no
outstanding obligations of the Company or Triarc or any of their Subsidiaries to
repurchase, redeem, or otherwise acquire any shares of capital stock of the
Company nor are there any outstanding obligations of the Company or Triarc or
any of their Subsidiaries to make payments to any Person, such as "phantom
stock" payments, where the amount thereof is calculated with reference to the
fair market value or equity value of the Company or any of its Subsidiaries.
8.15 Investments; Subsidiaries, Etc.
(a) Set forth in Part A of Schedule III hereto is a complete and
correct list, as of the date of this Agreement, of all Investments held by the
Company or any of its Subsidiaries in any Person and, for each such Investment,
(x) the identity of the Person or Persons holding such Investment and (y) the
nature of such Investment. Except as disclosed in Part A of Schedule III hereto,
each of the Company and its Subsidiaries owns, free and clear of all Liens
(other than Liens created pursuant to the Security Documents), all such
Investments.
(b) As of the date of this Agreement, the Company has no
Subsidiaries.
-45-
24184999
<PAGE>
8.16 Title to Assets. The Company owns and has on the date hereof,
and will own and have on the Closing Date, good and marketable title (subject
only to Liens permitted by Section 9.06 hereof) to the Properties shown to be
owned in the most recent financial statements referred to in Section 8.02 hereof
(other than Properties disposed of in the ordinary course of business or
otherwise permitted to be disposed of pursuant to Section 9.05 hereof). The
Company owns and has on the date hereof, and will own and have on the Closing
Date, good and marketable title to, and enjoys on the date hereof, and will
enjoy on the Closing Date, peaceful and undisturbed possession of, all
Properties (subject only to Liens permitted by Section 9.06 hereof) that are
necessary for the operation and conduct of its businesses.
8.17 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Obligors to the Administrative Agent or any Lender in connection
with the negotiation, preparation or delivery of this Agreement and the other
Basic Documents or included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole is true and accurate in all material respects and
do not omit to state a material fact that would make such information, reports,
financial statements, exhibits and schedules, in context in which they were
made, not misleading. All written information furnished after the date hereof by
the Company to the Administrative Agent and the Lenders in connection with this
Agreement and the other Basic Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in all material respects, or (in
the case of projections) based on reasonable estimates, on the date as of which
such information is stated or certified. There are no matters (other than
matters of general economic, political or social nature which do not affect the
Company uniquely) of which the Company has actual knowledge that could
reasonably be expected to result in a Material Adverse Effect that has not been
disclosed herein, in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Lenders for use in connection with the transactions contemplated hereby or
thereby.
8.18 Real Property. Set forth on Schedule IV attached hereto is a
list, as of the Closing Date, of all of the real property interests held by the
Company and its Subsidiaries, indicating in each case whether the respective
Property is owned or leased, the identity of the owner or lessee and the
location of the respective Property.
8.19 Management Agreements, Etc. Other than as set forth in Part C of
Schedule I hereto, there are no other agreements or arrangements with respect to
the management of the Company or relating to the employment of, or compensation
for, any senior officers of the Company to which the Company is bound.
Section 9. Covenants of the Company. The Company covenants and agrees
with the Lenders and the Administrative Agent that, so long as any Commitment,
Loan or Letter of Credit Liability is outstanding and until payment in full of
all amounts payable by the Company hereunder:
9.01 Financial Statements, Etc. The Company (for itself and on
behalf of Triarc) shall deliver to each of the Lenders:
(a) Monthly Company Financials -- as soon as available and in any
event within 30 days after the end of each calendar month, consolidated
statements of income, retained earnings and cash flow of the Company and
its Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheets of the Company and its Subsidiaries as at the
end of such period, setting forth in each case in comparative form the
corresponding consolidated figures for the corresponding periods in the
preceding fiscal year and the corresponding projections with respect to
such month as set forth in the budget prepared by the Company with respect
to such fiscal year and furnished to the Lenders pursuant to clause (g)
hereof, accompanied by a certificate of a senior financial officer of the
Company, which certificate shall state that said consolidated financial
statements fairly present the consolidated financial condition and results
of operations of the Company and its Subsidiaries in all material
respects, in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such month (subject to
normal year-end audit adjustments);
-46-
24184999
<PAGE>
(b) Annual Company Financials -- as soon as available and in any
event within 115 days after the end of each fiscal year of the Company,
consolidated statements of income, retained earnings and cash flow of the
Company and its Subsidiaries for such fiscal year and the related
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such fiscal year, setting forth in each case
in comparative form the corresponding consolidated and consolidating
figures for the preceding fiscal year, and accompanied by an opinion
thereon of Deloitte & Touche, LLP, or other independent certified public
accountants of recognized national standing, which opinion shall be given
without material qualification or a "going concern" exception, and shall
state that said consolidated financial statements fairly present in all
material respects the consolidated financial condition and results of
operations of the Company and its Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted accounting
principles, and a certificate of such accountants stating that, in making
the examination necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Default;
(c) SEC Filings -- except as otherwise provided in this Section 9.01,
promptly upon their becoming available, copies of all registration
statements and regular periodic reports, if any, that the Company shall
have filed with the SEC or any national securities exchange;
(d) Shareholder Reports -- promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all financial statements,
reports and proxy statements so mailed;
(e) ERISA -- as soon as possible, and in any event within ten days
after the Company knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan
has occurred or exists, a statement signed by a senior financial officer
of the Company setting forth details respecting such event or condition
and the action, if any, that the Company or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice required
to be filed with or given to PBGC by the Company or an ERISA Affiliate
with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(c) of ERISA
and the regulations issued thereunder, with respect to a Plan, as to
which PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event (provided that a failure to meet the minimum funding
standard of Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or before its
due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless of
the issuance of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under Section 412(d) of the Code
for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Company or an
ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan
by the Company or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the
receipt by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
-47-
24184999
<PAGE>
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a
part if the Company or an ERISA Affiliate fails to timely provide
security to the Plan in accordance with the provisions of said
Sections;
(f) Borrowing Base Certificates -- as soon as available and in any
event within three Business Days after the end of each weekly accounting
period (ending each Friday of each week) of the Company, a Borrowing Base
Certificate as at the last day of such accounting period;
(g) Budgets -- as soon as available and in any event not later than
March 31 of each fiscal year of the Company, either (i) the budget of the
Company, broken down by quarter for such fiscal year and approved by the
Board of Directors of Triarc; or (ii) a draft of the budget referred to in
clause (i), subject to approval of the Board of Directors of Triarc,
followed by a final budget approved by such Board, to be delivered not
later than April 30 of such fiscal year;
(h) Collateral Audits; Textile Industry Consultant Report -- (i)
within 90 days after the Closing Date and otherwise periodically at the
request of the Administrative Agent, the Co-Agent or the Majority Lenders,
a report of an independent collateral auditor (which may be, or be
affiliated with, one of the Lenders) with respect to the Receivables and
Inventory components included in the Borrowing Base as at the end of any
week or monthly accounting period which report shall indicate that, based
upon a review by such auditors of the Receivables (including, without
limitation, verification with respect to the amount, aging, identity and
credit of the respective account debtors and the billing practices of the
Company and its Subsidiaries) and Inventory (including, without
limitation, verification as to the value, location and respective types),
the information set forth in the Borrowing Base Certificate delivered by
the Company as at the end of such accounting period is accurate and
complete in all material respects and in addition, as soon as available
and in any event within 120 days after the end of each fiscal year of the
Company, a like report of BKB or independent public accountants with
respect to the Receivables and Inventory components included in the
Borrowing Base as at the end of such fiscal year; (provided, that for so
long as a Default shall not have occurred or be continuing, the Company
shall not be required to reimburse the Agents for such collateral audits
performed more frequently than one time during any fiscal quarter of the
Company); and (ii) at any time after the Closing Date at the request of
the Administrative Agent, the Co-Agent or the Majority Lenders, a report
of an independent textile industry consultant, which report shall only be
required to be performed once;
(i) Events of Default -- promptly after the Company knows or has
reason to believe that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with such notice or
as soon thereafter as possible, a description of the action that the
Company has taken or proposes to take with respect thereto; and
(j) Other Information -- from time to time such other information
regarding the financial condition, operations or business of the Company,
Triarc or any of Triarc's other Subsidiaries (including, without
limitation, any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender or the
Administrative Agent may reasonably request.
The Company will furnish to each Lender a certificate of a senior financial
officer of the Company, which shall be delivered with each set of financial
statements prepared with respect to a monthly period coinciding with the end of
a fiscal quarter of the Company (which financial statements are to be delivered
pursuant to paragraph (a) above) (i) to the effect that to the Company's
knowledge, no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail and
describing the action that the Company has
-48-
24184999
<PAGE>
taken or proposes to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Company is
in compliance with Sections 9.07(c), 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15
and 9.18 hereof as of the end of the respective month.
9.02 Litigation. The Company will promptly give to each Lender notice
of all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceedings, affecting the Company or any of its
Subsidiaries, except proceedings that, if adversely determined, would not
(either individually or in the aggregate) have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Company will give to each
Lender notice of the assertion of any Environmental Claim by any Person against,
or with respect to the activities of, the Company or any of its Subsidiaries and
notice of any alleged violation of or non-compliance with any Environmental Laws
or any permits, licenses or authorizations, other than any Environmental Claim
or alleged violation that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises, except where the failure to
so preserve and maintain the same (other than with respect to the
maintenance of its legal existence) would not (individually or in the
aggregate) have a Material Adverse Effect (provided that nothing in this
Section 9.03 shall prohibit any transaction expressly permitted under
Section 9.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements could (either individually or in
the aggregate) have a Material Adverse Effect;
(c) pay and discharge all material taxes, assessments and
governmental charges or levies imposed on it or on its income or profits
or on any of its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;
(d) maintain all of its Properties used in its business in good
working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account (which shall be
maintained separate and apart from those of any other Person), in which
entries which are complete in all material respects will be made in
accordance with generally accepted accounting principles consistently
applied;
(f) permit representatives of any Lender or the Administrative Agent,
during normal business hours, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such Lender or the Administrative Agent (as the case may be);
and
(g) practice and adhere to corporate formalities; maintain its
principal deposit and other bank accounts and all of its assets separate
from those of any other Person and ensure that no other Person is an
account party or is entitled to make withdrawals with respect to the
Company's principal deposit accounts; refrain from filing or otherwise
initiating or supporting the filing of a motion in any bankruptcy or other
insolvency proceeding involving Triarc to substantively consolidate the
Company or any of its Subsidiaries with Triarc; and conduct all of its
business solely in its own name or under the name "ERS" or "Environmental
Recycling Systems" and in any case, not under the name of any of its
Affiliates.
9.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
-49-
24184999
<PAGE>
usually maintained by corporations engaged in the same or similar business
similarly situated, against loss, damage and liability of the kinds and in the
amounts customarily maintained by such corporations. The Company will in any
event maintain (with respect to itself and each of its Subsidiaries):
(1) Casualty Insurance -- insurance against loss or damage covering
all of the tangible real and personal Property and improvements of the
Company and each of its Subsidiaries by reason of any Peril (as defined
below) in such amounts (subject to such deductibles as shall be
satisfactory to the Majority Lenders) as shall be reasonable and customary
and sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy but in any event in an amount (i)
in the case of fixed assets and equipment (including, without limitation,
vehicles), at least equal to 100% of the actual replacement cost of such
assets (including, without limitation, foundation and footings costs),
subject to deductibles as aforesaid and (ii) in the case of inventory, not
less than the fair market value thereof, subject to deductibles as
aforesaid.
(2) Automobile Liability Insurance for Bodily Injury and Property
Damage -- insurance against liability for bodily injury and property
damage in respect of all vehicles (whether owned, hired or rented by the
Company or any of its Subsidiaries) at any time located at, or used in
connection with, its Properties or operations in such amounts as are then
customary for vehicles used in connection with similar Properties and
businesses, but in any event to the extent required by applicable law.
(3) Comprehensive General Liability Insurance -- insurance against
claims for bodily injury, death or Property damage occurring on, in or
about the Properties (and adjoining streets, sidewalks and waterways) of
the Company and its Subsidiaries, in such amounts as are then customary
for Property similar in use in the jurisdictions where such Properties are
located.
(4) Workers' Compensation Insurance -- workers' compensation
insurance (including, without limitation, Employers' Liability Insurance)
to the extent required by applicable law.
(5) Product Liability Insurance -- insurance against claims for
bodily injury, death or Property damage resulting from the use of products
sold by the Company or any of its Subsidiaries in such amounts as are then
customarily maintained by responsible persons engaged in businesses
similar to that of the Company and its Subsidiaries.
(6) Business Interruption Insurance -- blanket insurance policy
against loss of operating income (subject to a deductible, or self-insured
amount, not in excess of $250,000) by reason of any Peril.
(7) Other Insurance -- such other insurance, including, without
limitation, War-Risk Insurance when and to the extent obtainable from the
United States Government, in each case as generally carried by owners of
similar Properties in the jurisdictions where such Properties are located,
in such amounts and against such risks as are then customary for Property
similar in use.
Such insurance shall be written by financially responsible companies selected by
the Company and having an A. M. Best rating of "A+" or better and being in a
financial size category of IX or larger, or by other companies acceptable to the
Majority Lenders, and (other than workers' compensation) shall name the
Administrative Agent as loss payee (to the extent covering risk of loss or
damage to tangible property) and as an additional named insured as its interests
may appear (to the extent covering any other risk). Each policy referred to in
this Section 9.04 shall provide that it will not be canceled or reduced, or
allowed to lapse without renewal, except after not less than 30 days' notice to
the Administrative Agent and shall also provide that the interests of the
Administrative Agent and the Lenders shall not be invalidated by any act or
negligence of the Company or any Person having an interest in any Property
covered by the Mortgage nor by occupancy or use of any such Property for
purposes more hazardous than permitted by such policy nor by any foreclosure or
other proceedings relating to such Property. The Company will advise the
Administrative Agent promptly of any policy cancellation, reduction or
amendment.
-50-
24184999
<PAGE>
On or before the Closing Date, the Company will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Company hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage and showing
that such insurance will remain in effect through July 17, 1996, subject only to
the payment of premiums as they become due (and attaching original copies of any
policies with respect to casualty insurance). Thereafter, on each June 17 in
each year (commencing with June 17, 1996), the Company will deliver to the
Administrative Agent certificates of insurance evidencing that all insurance
required to be maintained by the Company hereunder will be in effect through the
July 17 of the calendar year following the calendar year of the current June 17,
subject only to the payment of premiums as they become due. In addition, the
Company will not modify any of the provisions of any policy with respect to
casualty insurance without delivering the original copy of the endorsement
reflecting such modification to the Administrative Agent. The Company will not
obtain or carry separate insurance concurrent in form or contributing in the
event of loss with that required by this Section 9.04 unless the Administrative
Agent is the named insured thereunder, with loss payable as provided herein. The
Company will immediately notify the Administrative Agent whenever any such
separate insurance is obtained and shall deliver to the Administrative Agent the
certificates evidencing the same.
Without limiting the obligations of the Company under the foregoing
provisions of this Section 9.04, in the event the Company shall fail to maintain
in full force and effect insurance as required by the foregoing provisions of
this Section 9.04, then the Administrative Agent may, but shall have no
obligation so to do, procure insurance covering the interests of the Lenders and
the Administrative Agent in such amounts and against such risks as the
Administrative Agent (or the Majority Lenders) shall deem appropriate, and the
Company shall reimburse the Administrative Agent in respect of any premiums paid
by the Administrative Agent in respect thereof.
For purposes hereof, the term "Peril" shall mean, collectively, fire,
lightning, flood (only to the extent that coverage for the same is commercially
available), windstorm, hail, earthquake (only to the extent that coverage for
the same is commercially available), explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
all other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of the Company and its Subsidiaries are
located.
9.05 Prohibition of Fundamental Changes. Except as otherwise
permitted herein, the Company will not, nor will it permit any of its
Subsidiaries to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution). Notwithstanding anything herein to the contrary,
any Subsidiary shall be permitted to liquidate, wind up or dissolve itself into
another Subsidiary of the Company. The Company will not, nor will it permit any
of its Subsidiaries to, acquire any business or Property from, or capital stock
of, or be a party to any acquisition of, any Person except for purchases of
inventory and other Property to be sold or used in the ordinary course of
business, Investments permitted under Section 9.08 hereof, and Capital
Expenditures permitted under Section 9.14 hereof. Except as otherwise permitted
herein, the Company will not, nor will it permit any of its Subsidiaries to,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, any part of its business or Property, whether now owned
or hereafter acquired (including, without limitation, receivables and leasehold
interests, but excluding (i) obsolete or worn-out Property, tools or equipment
no longer used in its business and (ii) any inventory or other Property sold or
disposed of in the ordinary course of business). Notwithstanding anything herein
to the contrary, in the event that the Company shall sell all or substantially
all of its assets, and simultaneous to such sale, repay all of the Loans, the
Letter of Credit Liabilities and all other obligations hereunder outstanding on
such date and terminate any Commitments then outstanding, such sale shall not
require the consent of the Lenders.
9.06 Limitation on Liens. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
-51-
24184999
<PAGE>
(b) Liens in existence on the date hereof and listed in Part A of
Schedule I hereto (excluding, however, following the making of the initial
Loans hereunder, Liens securing Indebtedness to be repaid with the
proceeds of such Loans, as indicated on said Schedule I);
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are
not overdue for a period of more than 60 days or that are being contested
in good faith and by appropriate proceedings and Liens securing judgments
but only to the extent for an amount and for a period not resulting in an
Event of Default under Section 10(h) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on
the use of Property or minor imperfections in title thereto that, in the
aggregate, are not material in amount, and that do not in any case
materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or any
of its Subsidiaries; and
(h) Liens upon real and/or tangible personal Property acquired after
the date hereof (by purchase, construction or otherwise) by the Company or
any of its Subsidiaries, each of which Liens either (A) existed on such
Property before the time of its acquisition and was not created in
anticipation thereof or (B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund,
the cost (including the cost of construction) of such Property; provided
that (i) no such Lien shall extend to or cover any Property of the Company
or such Subsidiary other than the Property so acquired and improvements
thereon and (ii) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed 80% of the fair market value (as determined
in good faith by a senior financial officer of the Company) of such
Property at the time it was acquired (by purchase, construction or
otherwise).
9.07 Indebtedness. The Company will not, nor will it permit any of
its Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed in Part B
of Schedule III hereto (excluding, however, following the making of the
initial Loans hereunder, the Indebtedness to be repaid with the proceeds
of such Loans, as indicated on said Part B of Schedule III);
(c) Indebtedness of Subsidiaries of the Company to the Company or to
other Subsidiaries of the Company;
(d) additional Indebtedness of the Company and its Subsidiaries
(including, without limitation, Capital Lease Obligations and other
Indebtedness secured by Liens permitted under Section 9.06(h) hereof) up
to but not exceeding $5,000,000 at any one time outstanding; and
-52-
24184999
<PAGE>
(e) unsecured Indebtedness of the Company to Triarc incurred by the
Company after the Closing Date, in an aggregate amount at any one time
outstanding up to but not to exceeding $5,000,000, provided that (i) such
Indebtedness shall not bear or accrue interest at a rate greater than 6%
per annum, and such Indebtedness shall not accrue any other fee or charge,
(ii) interest shall be payable quarterly in arrears, (iii) such
Indebtedness shall be subordinated, on terms satisfactory to the
Administrative Agent, to the payment obligations of the Company hereunder,
until the payment in full of amounts payable by the Company hereunder, and
(iv) no payment of principal or interest in respect of such Indebtedness
may be made if, prior to or after giving effect to such payment, any
Default shall be continuing.
9.08 Investments. The Company will not, nor will it permit any of its
Subsidiaries to, make or permit to remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified in
Part A of Schedule III hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Interest Rate Protection Agreements required to be entered into
pursuant to Section 9.15 hereof;
(e) Permitted Acquisitions not to exceed, together with Capital
Expenditures, $3,000,000 for any fiscal year; provided, that the Company
may carry forward the following unused amounts to be used for Permitted
Acquisitions and Capital Expenditures in the next succeeding fiscal year
(such succeeding fiscal year, the "Carry Forward Year"):
(i) with respect to the fiscal year ended the Sunday nearest to
December 31, 1996, the Company may carry forward up to $1,000,000 of
unused amounts, and
(ii) with respect to any other fiscal year, the Company may
carry forward up to $500,000 of unused amounts;
provided, that in each case, (x) unused amounts may not be carried forward
beyond the Carry Forward Year and (y) no amount that has been carried
forward may be used until amounts allocable for Permitted Acquisitions and
Capital Expenditures during the Carry Forward Year have been used in full;
and
(f) other Investments in the ordinary course of business in the
aggregate amount not to exceed $250,000 at any one time.
9.09 Dividend Payments. The Company will not, nor will it permit any
of its Subsidiaries to, declare or make any Dividend Payment at any time, except
that nothing herein to the contrary shall limit or otherwise affect the
Company's right to declare and make a single Dividend Payment to the
shareholders of the Company in an amount not to exceed $35,000,000.
9.10 Minimum EBITDA. (a) The Company will not permit EBITDA to
fall below following respective amounts at any time during the following
respective periods:
(i) for the fiscal quarter ending June 30, 1996: $ 2,600,000;
(ii) for the two fiscal quarters ending September 30, 1996:
$5,200,000; and
(iii) for the three fiscal quarters ending December 31, 1996:
$ 8,000,000.
-53-
24184999
<PAGE>
(b) The Company will not permit EBITDA to fall below the following
respective amounts at any time during the period of four consecutive fiscal
quarters ending on or most recently ended prior to the following dates:
Date Amount
March 31, 1997 $ 10,500,000
June 30, 1997 $ 11,000,000
September 30, 1997 $ 11,000,000
December 31, 1997 $ 11,000,000
March 31, 1998 $ 11,500,000
June 30, 1998 $ 12,000,000
September 30, 1998 $ 12,000,000
December 31, 1998 $ 12,000,000
March 31, 1999 $ 13,000,000
June 30, 1999 $ 13,500,000
September 30, 1999 $ 14,000,000
December 31, 1999 $ 14,000,000
March 31, 2000 $ 14,000,000
June 30, 2000 $ 14,000,000
September 30, 2000 $ 14,000,000
December 31, 2000 $ 14,000,000
March 31, 2001 $ 14,000,000
June 30, 2001 $ 14,000,000
September 30, 2001 $ 14,000,000
December 31, 2001 $ 14,000,000
March 31, 2002 $ 14,000,000
June 30, 2002 $ 14,000,000
September 30, 2002 $ 14,000,000
December 31, 2002 $ 14,000,000
March 31, 2003 $ 14,000,000
June 30, 2003 $ 14,000,000
September 30, 2003 $ 14,000,000
December 31, 2003 $ 14,000,000
9.11 Leverage Ratio. The Company will not permit the Leverage Ratio
to exceed the following respective ratios at any time during the following
respective periods:
Period Ratio
From the Closing Date
through December 31, 1997 3.60 to 1
From January 1, 1998
through June 30, 1998 3.50 to 1
Period Ratio
From July 1, 1998
through March 31, 1999 3.00 to 1
From April 1, 1999
through December 31, 2003 2.50 to 1
-54-
24184999
<PAGE>
9.12 Interest Coverage Ratio. (a) The Company will not permit the
Interest Coverage Ratio to fall below the following respective ratios at any
time during the following respective periods:
(i) for the fiscal quarter ending June 30, 1996, 2.60 to 1;
(ii) for the two fiscal quarters ending September 30, 1996, 2.60 to
1; and
(iii) for the three fiscal quarters ending December 31, 1996, 2.60 to
1.
(b) The Company will not permit the Interest Coverage Ratio to fall below
the following respective ratios at any time during the following respective
periods ending:
Date Ratio
March 31, 1997 2.80 to 1
June 30, 1997 2.80 to 1
September 30, 1997 2.80 to 1
December 31, 1997 3.00 to 1
March 31, 1998 3.00 to 1
June 30, 1998 3.00 to 1
September 30, 1998 3.00 to 1
December 31, 1998 3.25 to 1
March 31, 1999 3.25 to 1
June 30, 1999 and
at all times thereafter 3.50 to 1
9.13 Fixed Charges Ratio. (a) The Company will not permit the
Fixed Charges Ratio to fall below the following respective ratios at any time
during the following respective periods:
(i) for the fiscal quarter ending June 30, 1996, 1.10 to 1;
(ii) for the two fiscal quarters ending September 30, 1996, 1.10 to
1; and
(iii) for the three fiscal quarters ending December 31, 1996, 1.10 to
1.
(b) The Company will not permit the Fixed Charges Ratio to fall below the
following respective ratios at any time during the following respective periods
ending:
Date Ratio
March 31, 1997 1.10 to 1
June 30, 1997 1.10 to 1
September 30, 1997 1.10 to 1
December 31, 1997 1.10 to 1
March 31, 1998 1.20 to 1
June 30, 1998 1.20 to 1
September 30, 1998 1.20 to 1
December 31, 1998 1.20 to 1
March 31, 1999 and
at all times thereafter 1.25 to 1
-55-
24184999
<PAGE>
9.14 Capital Expenditures. The Company will not permit the
aggregate amount of Capital Expenditures made by the Company and its
Subsidiaries to exceed $3,000,000 for any fiscal year.
9.15 Interest Rate Protection Agreements. The Company will within 90
days of the Closing Date and at all times thereafter maintain in full force and
effect one or more Interest Rate Protection Agreements with one or more of the
Lenders (and/or with a bank or other financial institution having capital,
surplus and undivided profits of at least $500,000,000), that effectively
enables the Company (in a manner satisfactory to the Agents), as at any date, to
protect itself against three-month London interbank offered rates exceeding a
per annum percentage acceptable to the Administrative Agent and the Co-Agent as
to a notional principal amount at least equal to 50% of the Term Loans
outstanding on the Closing Date for a period of at least three years, and
otherwise on such terms as are acceptable to the Administrative Agent and the
Co-Agent.
9.16 Lines of Business. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than the business of manufacturing, distributing and
selling dyes, specialty chemicals and the recycling of drums.
9.17 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an Affiliate; (b)
transfer, sell, lease, assign or otherwise dispose of any Property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire Property
from an Affiliate; (d) prepay any amounts owing to any Affiliate under any
purchase agreement or otherwise; or (e) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of an Affiliate);
provided that (x) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (y) the
Company and its Subsidiaries may enter into transactions (other than extensions
of credit by the Company or any of its Subsidiaries to an Affiliate) providing
for the leasing of Property, the rendering or receipt of services or the
purchase or sale of inventory and other Property in the ordinary course of
business if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Company and its Subsidiaries as the
monetary or business consideration that would obtain in a comparable transaction
with a Person not an Affiliate, provided that any such transactions shall be
disclosed to the Administrative Agent. Without limiting the generality of the
foregoing, the Company shall not pay or agree to pay to an Affiliate, any
amounts on account of taxes in excess of such amounts as are required to be paid
pursuant to the Tax Sharing Agreement.
9.18 Management Fees. The Company shall not pay (but may accrue) any
management or like fees to any Person (collectively, "Management Fees");
provided that the Company may pay monthly Management Fees to Triarc, so long as:
(i) the aggregate amount of Management Fees paid in any fiscal year
of the Company shall not exceed $1,000,000;
(ii) that and such Management Fees shall only be paid in arrears; and
(iii) prior to making any such payment, and after giving effect
thereto, no Default shall have occurred and be continuing.
9.19 Use of Proceeds. The Company shall use the proceeds of the Loans
hereunder for general corporate purposes; provided that (a) no more than
$35,000,000 of such proceeds may be issued as a dividend to the shareholders of
the Company, and (b) neither the Administrative Agent nor any Lender shall have
any responsibility as to the use of any of such proceeds.
9.20 Subsidiaries; Etc.
-56-
24184999
<PAGE>
(a) The Company will take such action, and will cause each of its
Subsidiaries to take such action, from time to time as shall be necessary to
ensure that all Subsidiaries of the Company are Subsidiary Guarantors and,
thereby, "Obligors" hereunder. Without limiting the generality of the foregoing,
in the event that the Company or any of its Subsidiaries shall form or acquire
any new Subsidiary, the Company or the respective Subsidiary will cause such new
Subsidiary to (i) become a "Subsidiary Guarantor" (and, thereby, an "Obligor")
hereunder pursuant to a written instrument in form and substance satisfactory to
each Lender and the Administrative Agent, (ii) become a party to, and pledge
their respective assets to the Administrative Agent under the Security
Agreement, and (iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with those
delivered by each Obligor pursuant to Section 7.01 hereof upon the Closing Date
or as any Lender or the Administrative Agent shall have requested; provided,
however, that nothing in this Section 9.20(a) shall obligate the Company or any
Subsidiary Guarantor to take any action to the extent that such action may
subject the Company to tax under Section 956 of the Code.
(b) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that each of
its Subsidiaries is a Wholly Owned Subsidiary. In the event that any additional
shares of stock shall be issued by any Subsidiary, the respective Obligor agrees
forthwith to deliver to the Administrative Agent pursuant to the Security
Agreement the certificates evidencing such shares of stock, accompanied by
undated stock powers executed in blank and to take such other action as the
Administrative Agent shall request to perfect the security interest created
therein pursuant to the Security Agreement. The Company will not permit any of
its Subsidiaries to enter into, after the date of this Agreement, any indenture,
agreement, instrument or other arrangement that, directly or indirectly,
prohibits or restrains, or has the effect of prohibiting or restraining, or
imposes materially adverse conditions upon, the incurrence or payment of
Indebtedness, the granting of Liens, the declaration or payment of dividends,
the making of loans, advances or Investments or the sale, assignment, transfer
or other disposition of Property.
9.21 Modifications of Certain Documents. The Company will not consent
to any modification, supplement or waiver of any of the provisions of (a) the
Avondale Supply Agreement, (b) any agreement, instrument or other document
evidencing or relating to the Indebtedness referred to in Section 9.07(e)
hereof, (c) the Management Services Agreement, (d) the Tax Sharing Agreement or
(e) any agreement, instrument or document set forth in Part C Schedule I, in
each case without the prior consent of the Administrative Agent (with the
approval of the Majority Lenders).
Section 10. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any principal of
any Loan or any Reimbursement Obligation when due (whether at stated
maturity or at mandatory or optional prepayment); or (ii) default in the
payment of any interest on any Loan, any fee or any other amount payable
by it hereunder or under any other Basic Document when due and such
default shall have continued unremedied five or more days; or
(b) (i) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
indebtedness aggregating $100,000 or more, or in the payment when due of
any amount under any Interest Rate Protection Agreement, or (ii) Triarc or
any of its Subsidiaries shall default in the payment when due of any
principal of or interest on any of its indebtedness aggregating
$10,000,000 or more, or in the payment when due of any amount under any
Interest Rate Protection Agreement (Triarc, the Company and such
Subsidiaries herein collectively called the "Relevant Parties"); or any
event specified in any note, agreement, indenture or other document
evidencing or relating to any such indebtedness referred to in clause (i)
and (ii), as applicable, or any event specified in any Interest Rate
Protection Agreement shall occur if the effect of such event is to cause,
or (with the giving of any notice or the lapse of time or both) to permit
the holder or holders of such indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have
-57-
24184999
<PAGE>
the interest rate thereon reset to a level so that securities evidencing
such indebtedness trade at a level specified in relation to the par value
thereof or, in the case of an Interest Rate Protection Agreement, to
permit the payments owing under such Interest Rate Protection Agreement to
be liquidated; or
(c) Any representation, warranty or certification made or deemed made
pursuant to Section 7.02 hereof herein or in any other Basic Document (or
in any modification or supplement hereto or thereto) by any Relevant
Party, or any certificate furnished to any Lender or the Administrative
Agent pursuant to the provisions hereof or thereof, shall prove to have
been false or misleading as of the time made or furnished in any material
respect; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 9.01(f), 9.01(h), 9.01(i), 9.05, 9.06,
9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15, 9.17, 9.18 or 9.19
hereof or any Obligor shall default in the performance of any of its
obligations under Section 4.02 or 5.02 of the Security Agreement, Section
4.01 or 5.02 of the Pledge Agreement or any provisions of the Mortgage; or
any Obligor shall default in the performance of any of its other
obligations in this Agreement or any other Basic Document and such default
shall continue unremedied for a period of ten or more days after notice
thereof to the Company by the Administrative Agent or any Lender (through
the Agent); or
(e) Any Obligor shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) Any Obligor shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee, examiner
or liquidator of itself or of all or a substantial part of its Property,
(ii) make a general assignment for the benefit of its creditors, (iii)
commence a voluntary case under the Bankruptcy Code, (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or
winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the Bankruptcy
Code or (vi) take any corporate action for the purpose of effecting any of
the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the affected Obligor, in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its
debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator or the like of such Obligor or of all or any substantial part
of its Property, or (iii) similar relief in respect of such Obligor under
any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 60 or more days; or an order for relief against
any Obligor shall be entered in an involuntary case under the Bankruptcy
Code; or
(h) (i) A final judgment or judgments for the payment of money in
excess of $100,000 in the aggregate shall be rendered by one or more
courts, administrative tribunals or other similar bodies having
jurisdiction against the Company or any of its Subsidiaries; or (ii) A
final judgment or judgments for the payment of money in excess of
$10,000,000 in the aggregate shall be rendered by one or more courts,
administrative tribunals or other similar bodies having jurisdiction
against Triarc or any of its Subsidiaries and, in each such case, the same
shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and the applicable Relevant Party
shall not, within said period of 30 days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(e) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such
-58-
24184999
<PAGE>
events or conditions, the Company or any ERISA Affiliate shall incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any combination of
the foregoing) that would (either individually or in the aggregate) have a
Material Adverse Effect; or
(j) Either (i) an Environmental Claim shall have been asserted that
is reasonably likely to be determined adversely to the Company or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Company or any of its Subsidiaries but
after deducting any portion thereof that is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor) or
(ii) or the cost associated with any Environmental Claim described in the
preceding clause(i) is reasonably likely to exceed $100,000; or
(k) A Change of Control; or
(l) The Liens created by the Security Documents shall at any time not
constitute a valid and perfected Lien on the collateral intended to be
covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Administrative Agent, free and clear of all other Liens (other than Liens
permitted under Section 9.06 hereof or under the respective Security
Documents), or, except for expiration in accordance with its terms, any of
the Security Documents shall for whatever reason be terminated or cease to
be in full force and effect, or the enforceability thereof shall be
contested by any Obligor; or
(m) The Avondale Supply Contract shall be terminated or shall expire,
or Avondale Mills or the Company shall default in the performance of any
of its material obligations under the Avondale Supply Contract;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 10 with respect to any Obligor, upon request
of the Majority Lenders the Administrative Agent shall, by notice to the
Company, terminate the Commitments, and they shall thereupon terminate, and
declare the principal amount then outstanding of, and the accrued interest on,
the Loans, the Reimbursement Obligations and all other amounts payable by the
Obligors hereunder and under the Notes (including, without limitation, any
amounts payable under Section 5.05 or 5.06 hereof) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by each Obligor; and (2) in the case of the occurrence
of an Event of Default referred to in clause (f) or (g) of this Section 10 with
respect to any Obligor, the Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other amounts payable by the
Obligors hereunder and under the Notes (including, without limitation, any
amounts payable under Section 5.05 or 5.06 hereof) shall automatically become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor.
In addition, upon the occurrence and during the continuance of any
Event of Default (if the Administrative Agent has declared the principal amount
then outstanding of, and accrued interest on, the Revolving Credit Loans and all
other amounts payable by the Company hereunder and under the Notes to be due and
payable), the Company agrees that it shall, if requested by the Administrative
Agent or the Majority Lenders through the Administrative Agent (and, in the case
of any Event of Default referred to in clause (f) or (g) of this Section 10 with
respect to the Company or Triarc, forthwith, without any demand or the taking of
any other action by the Administrative Agent or such Lenders) provide cover for
the Letter of Credit Liabilities by paying to the Administrative Agent
immediately available funds in an amount equal to the then aggregate undrawn
face amount of all Letters of Credit, which funds shall be held by the
Administrative Agent in the Collateral Account as collateral security in the
first instance for the Letter of Credit Liabilities and be subject to withdrawal
only as therein provided.
-59-
24184999
<PAGE>
Section 11. The Agents.
11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Basic Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Basic Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent and the Co-Agent
(which terms as used in this sentence and in Section 11.05 and the first
sentence of Section 11.06 hereof shall include reference to their respective
affiliates, such affiliates' officers, directors, employees and agents): (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Basic Documents, and shall not by reason of this
Agreement or any other Basic Document be a trustee for any Lender; (b) shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Basic Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Basic Document or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and (d) shall not be
responsible for any action taken or omitted to be taken by either Agent
hereunder or under any other Basic Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for such Agent's own gross negligence or willful
misconduct. Each Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by such Agent in good faith. The Administrative Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a notice of the assignment or transfer thereof shall
have been filed with the Administrative Agent, together with the consent of the
Company to such assignment or transfer (to the extent provided in Section
12.06(b) hereof).
11.02 Reliance by Agent. The Administrative Agent shall be entitled
to rely upon any certification, notice or other communication (including,
without limitation, any thereof by telephone, telecopy, telex, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the
Majority Lenders or, if provided herein, in accordance with the instructions
given by all of the Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.
11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received notice from a Lender or the Company specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 11.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Lenders,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Lenders except to
the extent that this Agreement expressly requires that such action be taken, or
not be taken, only with the consent or upon the authorization of the Majority
Lenders or all of the Lenders.
11.04 Rights as a Lender. With respect to its Commitments and the
Loans made by it, ING and BKB (and any successor acting as Administrative Agent
or Co-Agent, respectively) in its capacity as a Lender hereunder shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Administrative Agent or, as the case may be,
the Co-Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include each such Agent in its individual capacity. ING,
-60-
24184999
<PAGE>
BKB (and any successor acting as Administrative Agent or Co-Agent, respectively)
and their respective Affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with the Obligors (and
any of their Subsidiaries or Affiliates) as if it were not acting as the
Administrative Agent or, as the case may be, the Co-Agent, and ING, BKB and
their respective affiliates may accept fees and other consideration from the
Obligors for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify each Agent (to
the extent not reimbursed under Section 12.03 hereof, but without limiting the
obligations of the Company under said Section 12.03, and including in any event
any payments under any indemnity that the Administrative Agent is required to
issue to any bank referred to in Section 4.02 of the Security Agreement to which
remittances in respect of Accounts, as defined therein, are to be made) ratably
in accordance with each such Lender's respective Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against each Agent (including by any Lender)
arising out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 12.03 hereof, and
including also any payments under any indemnity that the Administrative Agent is
required to issue to any bank referred to in Section 4.02 of the Security
Agreement to which remittances in respect of Accounts, as defined therein, are
to be made, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Agents and Other Lenders. Each Lender agrees
that it has, independently and without reliance on either Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Triarc and its Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon either Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or under any other Basic Document. The Agents shall not be required to
keep themselves informed as to the performance or observance by any Obligor of
this Agreement or any of the other Basic Documents or any other document
referred to or provided for herein or therein or to inspect the Properties or
books of Triarc or any of its Subsidiaries. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Agents hereunder or under the Security Documents, the Agents
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
Triarc or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agents or any of their respective affiliates.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Basic Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 11.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders, the Company and Triarc, and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, that shall be a bank or other financial
-61-
24184999
<PAGE>
institution that has an office in New York, New York. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 11 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
11.09 Agency Fee. So long as the Commitments are in effect and until
payment in full of the principal of and interest on the Loans and all other
amounts payable by the Company hereunder, the Company will pay to the
Administrative Agent an agency fee in such amounts and in accordance with the
terms of the Fee Letter between the Company and ING, payable annually in advance
commencing on the date of execution and delivery of this Agreement by all
parties hereto and on each anniversary thereof. Such fee, once paid, shall be
non-refundable.
11.10 Consents under Other Basic Documents. The Administrative Agent
may, with the prior consent of the Majority Lenders (but not otherwise), consent
to any modification, supplement or waiver under any of the Basic Documents,
provided that, without the prior consent of each Lender, the Administrative
Agent shall not (except as provided herein or in the Security Documents) release
any material collateral or otherwise terminate any Lien under any Basic Document
providing for collateral security, or agree to additional obligations being
secured by such collateral security (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the other obligations
secured by such Basic Document), except that no such consent shall be required,
and the Administrative Agent is hereby authorized, to release any Lien covering
Property that is the subject of a disposition of Property permitted hereunder or
to which the Majority Lenders have consented.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent or
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Administrative Agent or any Lender relating in any way to this Agreement should
be dismissed or stayed by reason, or pending the resolution, of any action or
proceeding commenced by any Obligor relating in any way to this Agreement
whether or not commenced earlier. To the fullest extent permitted by applicable
law, the Obligors shall take all measures necessary for any such action or
proceeding commenced by the Administrative Agent or any Lender to proceed to
judgment prior to the entry of judgment in any such action or proceeding
commenced by any Obligor.
12.02 Notices. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telex or telecopy) delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof (below the name
of the Company, in the case of any Guarantor); or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telex or telecopier
or personally delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or reimburse each
of the Lenders and each Agent for: (a) all reasonable out-of-pocket costs and
expenses of the Agents (including, without limitation, the reasonable fees and
expenses of Mayer, Brown & Platt, special New York counsel to the Administrative
Agent and
-62-
24184999
<PAGE>
the Co-Agent) in connection with (i) the negotiation, preparation, execution and
delivery of this Agreement and the other Basic Documents and the extension of
credit hereunder and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Basic Documents; (b) all reasonable out-of-pocket costs and expenses of the
Lenders and the Agents (including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom, including, without
limitation, all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 12.03; (c) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any of the other Basic Documents or
any other document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein; and (d) all costs,
expenses and other charges in respect of title insurance procured with respect
to the Liens created pursuant to the Mortgage.
The Company hereby agrees to indemnify the Agents and each Lender and
their respective directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or reasonable expenses incurred by any of them (including, without
limitation, any and all losses, liabilities, claims, damages or reasonable
expenses incurred by the Agents to any Lender, whether or not the Agents
or any Lender is a party thereto) arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to the extensions
of credit hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified). Without limiting the generality of the
foregoing, the Company will (x) indemnify the Administrative Agent for any
payments that the Administrative Agent is required to make under any indemnity
issued to any bank referred to in Section 4.02 of the Security Agreement to
which remittances in respect to Accounts, as defined therein, are to be made
and (y) indemnify each Agent and each Lender from, and hold each Agent and each
Lender harmless against, any losses, liabilities, claims, damages or
expenses described in the preceding sentence (including any Lien filed against
any Property covered by the Mortgage(s) or any part of the mortgage estate
thereunder in favor of any governmental entity, but excluding, as provided in
the preceding sentence, any loss, liability, claim, damage or expense
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified) arising under any Environmental Law as a result of the past,
present or future operations of the Company or any of its Subsidiaries (or any
predecessor in interest to the Company or any of its Subsidiaries), or the
past, present or future condition of any site or facility owned, operated or
leased at any time by the Company or any of its Subsidiaries (or any such
predecessor in interest), or any Release or threatened Release of any Hazardous
Materials at or from any such site or facility.
12.04 Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by the Company, the Administrative Agent, the
Co-Agent and the Majority Lenders, or by the Company and the Administrative
Agent acting with the consent of the Majority Lenders, and any provision of this
Agreement may be waived by the Majority Lenders or by the Administrative Agent
acting with the consent of the Majority Lenders; provided that: (a) no
modification, supplement or waiver shall, unless by an instrument signed by the
Company and all of the Lenders or by the Administrative Agent acting with the
consent of all of the Lenders: (i) increase, or extend the term of any of the
Commitments, or extend the time or waive any requirement for the reduction or
termination of any of the Commitments, (ii) extend the date fixed for the
payment of principal of or interest on any Loan, the Reimbursement Obligations
or any fee hereunder, (iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon or any fee is payable
hereunder, (v) alter the rights or obligations of the Company to prepay Loans,
including the allocations of such prepayments among the Classes of Loans, (vi)
alter the terms of this Section 12.04, (vii) modify the definition of the term
"Majority Lenders", or
-63-
24184999
<PAGE>
modify in any other manner the number or percentage of the Lenders required to
make any determinations or waive any rights hereunder or to modify any provision
hereof, (viii) waive any of the conditions precedent set forth in Section 7.01
hereof or (ix) release any Guarantor from its obligations hereunder and under
the other Basic Documents; (b) any modification or supplement of Section 11
hereof shall require the consent of the Administrative Agent; and (c) any
modification or supplement of Section 6 hereof shall require the consent of each
Guarantor.
12.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or obligations hereunder
or under the Notes without the prior consent of all of the Lenders and the
Administrative Agent.
(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and, if such Lender is a Revolving Credit Lender, its Letter of
Credit Interest (but only with the consent of, in the case of its outstanding
Commitments, the Company (unless any Event of Default shall have occurred and be
continuing at such time) and the Administrative Agent and, in the case of the
Revolving Credit Commitment or a Letter of Credit Interest, the L/C Issuer);
provided that (i) no such consent by the Company or the Administrative Agent
shall be required in the case of any assignment to another Lender; (ii) any such
partial assignment to a Person other than another Lender shall be in an amount
at least equal to $5,000,000 (unless any Event of Default shall have occurred
and be continuing at such time, in which case there shall be no minimum amount);
(iii) each such assignment by a Lender of its Revolving Credit Loans, Revolving
Credit Note, Revolving Credit Commitment or Letter of Credit Interest shall be
made in such manner so that the same portion of its Revolving Credit Loans,
Revolving Credit Note, Revolving Credit Commitment and Letter of Credit Interest
is assigned to the respective assignee; (iv) each such assignment by a Lender of
its Term Loan A Loan, Term Loan A Note or Term Loan A Commitment shall be made
in such manner so that the same portion of its Term Loan A Loan, its Term Loan A
Note and its Term Loan A Commitment is assigned to the respective assignee, and
(v) each such assignment by a Lender of its Term Loan B Loan, Term Loan B Note
or Term Loan B Commitment shall be made in such manner so that the same portion
of its Term Loan B Loan, its Term Loan B Note and its Term Loan B Commitment is
assigned to the respective assignee. Upon execution and delivery by the assignee
to the Company, the Administrative Agent and the L/C Issuer of an instrument in
writing pursuant to which such assignee agrees to become a "Lender" hereunder
(if not already a Lender) having the Commitment(s), Loans, and, if applicable,
Letter of Credit Interest specified in such instrument, and upon consent thereto
by the Company, the Administrative Agent and the L/C Issuer, to the extent
required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the Company
(provided that no Default has occurred or is continuing at such time), the
Administrative Agent and the L/C Issuer), the obligations, rights and benefits
of a Lender hereunder holding the Commitment(s), Loans and, if applicable,
Letter of Credit Interest (or portions thereof) assigned to it (in addition to
the Commitment(s), Loans and Letter of Credit Interest, if any, theretofore held
by such assignee) and the assigning Lender shall, to the extent of such
assignment, be released from the Commitment(s) (or portion(s) thereof) so
assigned. Upon each such assignment the assigning Lender shall pay the
Administrative Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loans or Letter of Credit Interest held
by it, or in its Commitments, in which event each purchaser of a participation
(a "Participant") shall be entitled to the rights and benefits of the provisions
of Section 9.01(j) hereof with respect to its participation in such Loans,
Letter of Credit Interest and Commitments as if (and the Company shall be
directly obligated to such Participant under such provisions as if) such
Participant were a "Lender" for purposes of said Section, but, except as
otherwise provided in Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Note or any other Basic Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Company to any Lender under Section 5
hereof in respect of Loans, Letter of Credit Interest held by it, and its
Commitments, shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest and
Commitments, and as if such Lender
-64-
24184999
<PAGE>
were funding each of such Loan, Letter of Credit Interest and Commitments in the
same way that it is funding the portion of such Loan, Letter of Credit Interest
and Commitments in which no participations have been sold. In no event shall a
Lender that sells a participation agree with the Participant to take or refrain
from taking any action hereunder or under any other Basic Document except that
such Lender may agree with the Participant that it will not, without the consent
of the Participant, agree to (i) increase or extend the term, or extend the time
or waive any requirement for the reduction or termination, of such Lender's
related Commitment, (ii) extend the date fixed for the payment of principal of
or interest on the related Loan or Loans, Reimbursement Obligations or any
portion of any fee hereunder payable to the Participant, (iii) reduce the amount
of any such payment of principal, (iv) reduce the rate at which interest is
payable thereon, or any fee hereunder payable to the Participant, to a level
below the rate at which the Participant is entitled to receive such interest or
fee, (v) alter the rights or obligations of the Company to prepay the related
Loans or (vi) consent to any modification, supplement or waiver hereof or of any
of the other Basic Documents to the extent that the same, under Section 11.10 or
12.04 hereof, requires the consent of each Lender.
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 12.06, any Lender may (without notice
to the Company, the Administrative Agent or any other Lender and without payment
of any fee) (i) assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank and (ii) assign all
or any portion of its rights under this Agreement and its Loans and its Notes to
an affiliate. No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) A Lender may furnish any information concerning Triarc and the
Company or any of their Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 12.12 hereof.
(f) Anything in this Section 12.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan or Reimbursement
Obligation held by it hereunder to the Company or any of its Affiliates or
Subsidiaries without the prior consent of each Lender.
(g) Each Lender shall be solely responsible for obtaining from any of
its Participants, and providing to the Company, all forms under Section 5.07
hereof. The availability of any benefits to any Participant pursuant to Section
5.07 hereof shall be subject to compliance by such Participant with the
applicable provisions thereof. Notwithstanding any other provision to the
contrary, no Participant shall be entitled to receive any greater payment
pursuant to Section 5.07 hereof than the Lender from which it acquired its
participation would have been entitled to receive.
12.07 Survival. The obligations of the Company under Sections 5.01,
5.05, 5.06, 5.07 and 12.03 hereof, the obligations of each Guarantor under
Section 6.03 hereof, and the obligations of the Lenders under Section 11.05
hereof, shall survive the repayment of the Loans and Reimbursement Obligations
and the termination of the Commitments. In addition, each representation and
warranty made, or deemed to be made pursuant to Section 7.02 hereof by a notice
of any extension of credit (whether by means of a Loan or a Letter of Credit),
herein or pursuant hereto shall survive the making of such representation and
warranty, and no Lender shall be deemed to have waived, by reason of making any
extension of credit hereunder (whether by means of a Loan or a Letter of
Credit), any Default that may arise by reason of such representation or warranty
proving to have been false or misleading in any material respect.
12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
-65-
24184999
<PAGE>
12.10 Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. Each Obligor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Obligor irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.12 Confidentiality. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by Triarc or
the Company pursuant to this Agreement that is identified by such Person as
being confidential at the time the same is delivered to the Lenders or the
Administrative Agent, provided that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for any of the Lenders or the Administrative
Agent, (iii) to bank examiners, auditors or accountants, (iv) to the
Administrative Agent or any other Lender, (v) in connection with any litigation
to which any one or more of the Lenders or the Administrative Agent is a party,
(vi) as such information pertains to any enforcement proceedings following a
Default hereunder or any proceedings in anticipation of or preparation for a
legal proceeding with respect to the Basic Documents, (vii) to a subsidiary or
Affiliate of such Lender or (viii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Lender a Confidentiality Agreement substantially in the form of
Exhibit H hereto.
-66-
24184999
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
C.H. PATRICK & CO., INC.
By: /s/John L. Barnes, Jr.
----------------------------
Title: CEO
Address for Notices:
200 Tanner Drive
Taylors, South Carolina 29687
Attention: President
Telecopier No.: (864) 244-3090
Telephone No.: (864) 244-4831
with a copy to:
Triarc Companies, Inc.
900 Third Avenue
New York, New York 10022
Attention: General Counsel
Telecopier No.: (212) 230-3216
Telephone No.: (212) 230-3045
TRIARC COMPANIES, INC.
only for purposes of and with respect to Sections
6 and 12 (other than Section 12.03) hereof
By: /s/Thomas E. Shultz
------------------------------
Title: VP & Assistant Treasurer
Address for Notices:
900 Third Avenue
New York, New York 10022
Attention: General Counsel
Telecopier No.: (212) 230-3216
Telephone No.: (212) 230-3045
24184999
<PAGE>
LENDERS
Revolving Credit Commitment INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL
CORPORATION
$7,500,000
Term Loan A Commitment
$7,500,000
By /s/ Robert L. Fellows
---------------------------
Term Loan B Commitment Title: Vice President
$10,000,000
Lending office for all Loans:
Internationale Nederlanden (U.S.)
Capital Corporation
135 East 57th Street
New York, New York 10022
Address for Notices:
Internationale Nederlanden (U.S.)
Capital Corporation
135 East 57th Street
New York, New York 10022
Attention:
Telecopier No.:
Telephone No.:
24184999
<PAGE>
Revolving Credit CommitmenTHE FIRST NATIONAL BANK OF BOSTON
$7,500,000
Term Loan A Commitment
$7,500,000 By /s/ Gretchen Bergstresser
-----------------------------
Title: Vice President
Term Loan B Commitment
$10,000,000 Lending office for all Loans:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Address for Notices:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention:
Telecopier No.:
Telephone No.:
24184999
<PAGE>
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION,
as Administrative Agent
By /s/ Robert L. Fellows
---------------------------
Title: Vice President
Address for Notices to
ING as Administrative Agent:
Internationale Nederlanden (U.S.)
Capital Corporation
135 East 57th Street
New York, New York 10022
Attention:
Telecopier No.:
Telephone No.:
THE FIRST NATIONAL BANK OF BOSTON,
as Co-Agent
By /s/ Gretchen Bergstresser
------------------------------
Title: Vice President
Address for Notices to
BKB as Co-Agent:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention:
Telecopier No.:
Telephone No.:
24184999
<PAGE>
List of Omitted Schedules and Exhibits
SCHEDULE I - Liens, Litigation and Material Agreements
SCHEDULE II - Environmental Matters
SCHEDULE III - Investments and Indebtedness
SCHEDULE IV - Real Property
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term A Loan Note
EXHIBIT A-3 - Form of Term B Loan Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Pledge and Security Agreement
EXHIBIT D - Form of Pledge Agreement
EXHIBIT E-1 - Form of Mortgage
EXHIBIT E-2 - Form of Leasehold Mortgage
EXHIBIT F - Form of Opinion of New York Counsel to the Obligors
EXHIBIT G - Form of Opinion of South Carolina Counsel to the Company
EXHIBIT H - Form of Confidentiality Agreement
EXHIBIT I - Form of Assignment 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.
L:\LEGAL\PATRICK\CREDIT\AGREEMTS\CR-FILIN.AGM
24184999
<PAGE>
Exhibit 10.1
TRIARC COMPANIES, INC.
1993 EQUITY PARTICIPATION PLAN
(AS AMENDED THROUGH 3/28/97)
1. PURPOSE
The purpose of the 1993 Equity Participation Plan (the "Plan") of Triarc
Companies, Inc. (the "Company") is to promote the interests of the Company and
its stockholders by (i) securing for the Company and its stockholders the
benefits of the additional incentive inherent in the ownership of the capital
stock of the Company (the "Capital Stock") by selected officers, directors
("Directors") and key employees of, and key consultants to, the Company and its
subsidiaries who are important to the success and growth of the business of the
Company and its subsidiaries and (ii) assisting the Company to secure and retain
the services of such persons. The Plan provides for granting such persons (a)
options ("Options") for the purchase of shares of Capital Stock (the "Shares"),
(b) tandem stock appreciation rights ("SARs") and (c) Shares which are both
restricted as to transferability and subject to a substantial risk of forfeiture
("Restricted Shares").
2. ADMINISTRATION
The Plan shall be administered by a Committee (the "Committee") consisting
of two or more Directors appointed by the Board of Directors of the Company.
Except as provided in Section 11 below, no member of the Committee shall be, or
within one year before having become a member thereof shall have been granted or
awarded pursuant to the Plan or any other plan of the Company or any of its
subsidiaries or affiliates, Options, SARs or Restricted Shares of the Company or
any of its subsidiaries or affiliates. The members of the Committee may be
changed at any time and from time to time in the discretion of the Board of
Directors of the Company. Subject to the limitations and conditions hereinafter
set forth, the Committee shall have authority to grant Options hereunder, to
determine the number of Shares for which each Option shall be granted and the
Option price or prices, to determine any conditions pertaining to the exercise
or to the vesting of each Option, to grant tandem SARs in connection with any
Option either at the time of the Option grant or thereafter, to make awards of
Restricted Shares, to determine the number of Restricted Shares to be granted,
and to establish in its discretion the restrictions to which any such Restricted
Shares shall be subject. The Committee shall have full power to construe and
interpret the Plan and any Plan agreement executed pursuant to the Plan to
establish and amend rules for its administration, and to establish in its
discretion terms and conditions applicable to the exercise of Options and SARs
and the grant of Restricted Shares. The determination of the Committee on all
matters relating to the Plan or any Plan agreement shall be conclusive. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any award hereunder.
3. SHARES SUBJECT TO THE PLAN
The Shares to be transferred or sold pursuant to the grant of Restricted
Shares or the exercise
1
<PAGE>
of Options or SARs granted under the Plan shall be authorized Shares, and may be
issued Shares reacquired by the Company and held in its treasury or may be
authorized but unissued Shares. Subject to the provisions of Section 19 hereof
(relating to adjustments in the number and classes or series of Capital Stock to
be delivered pursuant to the Plan), the maximum aggregate number of Shares to be
granted as Restricted Shares or to be delivered on the exercise of Options shall
be 10,000,000 and all such shares shall be shares of the Company's Class A
Common Stock, par value $0.10 per share (the "Class A Common Stock").
If an Option expires or terminates for any reason during the term of the
Plan and prior to the exercise in full of such Option or the related SAR, if
any, or if Restricted Shares are forfeited as provided in the grant of such
Shares, the number of Shares previously subject to but not delivered under such
Option, related SAR or grant of Restricted Shares shall be available for the
grant of Options, SARs or Restricted Shares thereafter; provided, however, that
the grantee (or the grantee's beneficiary) has not enjoyed any of the benefits
of stock ownership (other than voting rights or dividends that are forfeited).
An Option that terminates upon the exercise of a tandem SAR shall be deemed to
have been exercised at the time of the exercise of such tandem SAR, and the
Shares subject thereto shall not be available for further grants under the Plan.
4. ELIGIBILITY
Options, SARs or Restricted Shares may be granted from time to time to
selected officers and key employees of, key consultants to, and, subject to the
provisions of Section 2 hereof, Directors (including non-employee Directors) of
the Company or any consolidated subsidiary, as defined in this Section 4. In
addition, Options and SARs shall be granted automatically to non-employee
Directors as provided in Section 11 hereof. From time to time, the Committee
shall designate from such eligible officers, employees and consultants those who
will be granted Options, SARs or Restricted Shares, and in connection therewith,
the number of Shares to be covered by each grant of Options or Restricted
Shares. Persons granted Options are referred to hereinafter as "optionees," and
persons granted restricted Shares are referred to hereinafter as "grantees."
Nothing in the Plan, or in any grant of Options, SARs or Restricted Shares
pursuant to the Plan, shall confer on any person any right to continue in the
employ of the Company or any of its subsidiaries, nor in any way interfere with
the right of the Company or any of its subsidiaries to terminate the person's
employment at any time.
The term "subsidiary" shall mean, at the time of reference, any corporation
organized or acquired (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
Option, each of the corporations (including the Company) other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain. The term "affiliate" shall mean any person or entity which, at
the time of reference, directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company. Notwithstanding any other provision of the Plan to the contrary, in no
event may the aggregate number of shares of Class A Common Stock with respect to
which Options and SARs are granted under the Plan to any individual exceed
2
<PAGE>
5,000,000 during the term of the Plan.
PROVISIONS RELATING TO OPTIONS AND SARS
5. CHARACTER OF OPTIONS
Options granted hereunder shall not be incentive stock Options as such term
is defined in Section 422 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"). Options granted hereunder shall be "non-qualified"
stock options subject to the provisions of Section 83 of the Code.
If an Option granted under the Plan (other than an Option granted pursuant
to Section 11 of the Plan) is exercised by an optionee, then, at the discretion
of the Committee, the optionee may receive a replacement or reload Option
hereunder to purchase a number of Shares equal to the number of Shares utilized
to pay the exercise price and/or withholding taxes on the Option exercise, with
an exercise price equal to the "fair market value" (as defined in Section 7 of
the Plan) of a Share on the date such replacement or reload Option is granted,
and, unless the Committee determines otherwise, with all other terms and
conditions (including the date or dates on which the Option shall become
exercisable and the term of the Option) identical to the terms and conditions of
the Option with respect to which the reload Option is granted. No replacement or
reload Option shall be granted in respect of the exercise of any Option granted
pursuant to Section 11 of the Plan.
6. STOCK OPTION AGREEMENT
Each Option granted under the Plan, whether or not accompanied by SARs,
shall be evidenced by a written stock Option agreement, which shall be executed
by the Company and by the person to whom the Option is granted. The agreement
shall contain such terms and provisions, not inconsistent with the Plan, as
shall be determined by the Committee.
7. OPTION EXERCISE PRICE
The price per Share to be paid by the optionee on the date an Option is
exercised shall not be less than 50 percent of the fair market value of one
Share on the date the Option is granted.
For purposes of this Plan, the "fair market value" as of any date in respect
of any Shares of Common Stock shall mean the closing price per share of Common
Stock for the trading day on or on the first trading day immediately subsequent
to such date. The closing price for such day shall be (a) as reported on the
composite transactions tape for the principal exchange on which the Common Stock
is listed or admitted to trading (the "Composite Tape"), or if the Common Stock
is not reported on the Composite Tape or if the Composite Tape is not in use,
the last reported sales price regular way on the principal national securities
exchange on which such Common Stock shall be listed or admitted to trading
(which shall be the national securities
3
<PAGE>
exchange on which the greatest number of such shares of Common Stock has been
traded during the 30 consecutive trading days commencing 45 trading days before
such date), or, in either case, if there is no transaction on any such day, the
average of the bid and asked prices regular way on such day, or (b) if such
Common Stock is not listed on any national securities exchange, the closing
price, if reported, or, if the closing price is not reported, the average of the
closing bid and asked prices, as reported on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). If on any such date
the Common Stock is not quoted by any such exchange or NASDAQ, the fair market
value of the Common Stock on such date shall be determined by the Committee in
its sole discretion. In no event shall the fair market value of any share be
less than its par value.
8. OPTION TERM
The period after which Options granted under the Plan may not be exercised
shall be determined by the Committee with respect to each Option granted, but
may not exceed fifteen years from the date on which the Option is granted,
subject to the third paragraph of Section 9 hereof.
9. EXERCISE OF OPTIONS
The time or times at which or during which Options granted under the Plan
may be exercised, and any conditions pertaining to such exercise or to the
vesting in the optionee of the right to exercise Options or SARs, shall be
determined by the Committee in its sole discretion. Subsequent to the grant of
an Option which is not immediately exercisable in full, the Committee, at any
time before complete termination of such Option, may accelerate or extend the
time or times at which such Option and the related SAR, if any, may be exercised
in whole or in part.
Except as provided in this paragraph, no Option or SAR granted under the
Plan shall be assignable or otherwise transferable by the optionee, either
voluntarily or involuntarily, except by will or the laws of descent and
distribution and an Option or SAR shall be exercisable during the optionee's
lifetime only by the optionee. The Committee may in the applicable Option
agreement or at any time thereafter in an amendment to an Option agreement
provide that Options granted hereunder (including Options outstanding as of the
date this second paragraph of Section 9 becomes effective) may be transferred
with or without consideration by the Optionee, subject to such rules as the
Committee may adopt to preserve the purposes of the Plan, (i) pursuant to a
domestic relations order or (ii) to one or more of:
(x) the optionee's spouse, children or grandchildren (including adopted
children, stepchildren and grandchildren) (collectively, the
"Immediate Family");
(y) a trust solely for the benefit of the optionee and/or his or her
Immediate Family;
4
<PAGE>
(z) a partnership or limited liability company, the partners or members
of which are imited to the optionee and his or her Immediate Family;
or
(zz) any other person or entity authorized by the Committee.
(each transferee is hereinafter referred to as a "Permitted Transferee");
provided, however, that the optionee gives the Committee advance written
notice describing the terms and conditions of the proposed transfer and
the Committee notifies the optionee in writing that such a transfer would
comply with the requirements of the Plan, any applicable Option agreement
and any amendments thereto.
The terms and conditions of any Option transferred in accordance with the
immediately preceding sentence shall apply to the Permitted Transferee and any
reference in the Plan or in an Option agreement or any amendment thereto to an
optionee or grantee shall be deemed to refer to the Permitted Transferee, except
that (a) Permitted Transferees shall not be entitled to transfer any Options,
other than by will or the laws of descent and distribution; (b) Permitted
Transferees shall not be entitled to exercise any transferred Options unless
there shall be in effect a registration statement on an appropriate form
covering the shares to be acquired pursuant to the exercise of such Option if
the Committee determines that such a registration statement is necessary or
appropriate and; (c) the Committee or the Company shall not be required to
provide any notice to a Permitted Transferee, whether or not such notice is or
would otherwise have been required to be given to the optionee under the Plan or
otherwise; and (d) the events of termination of employment by, or services to,
the Company under clause (b) of the third paragraph of Section 9 and Section
11.1, as the case may be, hereof shall continue to be applied with respect to
the original optionee, following which the Options shall be exercisable by the
Permitted Transferee only to the extent, and for the periods, specified in
Section 9 and Section 11.1, as the case may be.
The unexercised portion of any Option or SAR granted under the Plan shall
automatically and without notice terminate and become null and void at the time
of the earliest to occur of the following:
(a) the expiration of the period of time determined by the Committee upon
the grant of such Option; provided that such period shall not exceed
fifteen years from the date on which such Option was granted;
(b) the termination of the optionee's employment by, or services to, the
Company and its subsidiaries if such termination constitutes or is
attributable to a breach by the optionee of an employment or consulting
agreement with the Company or any of its subsidiaries, or if the optionee
is discharged or if his or her services are terminated for cause; or
(c) the expiration of such period of time or the occurrence of such event
as the Committee in its discretion may provide upon the granting thereof.
5
<PAGE>
The Committee and the Board of Directors shall have the right to determine
what constitutes cause for discharge or termination of services, whether the
optionee has been discharged or his or her services terminated for cause and the
date of such discharge or termination of services, and such determination of the
Committee or the Board of Directors shall be final and conclusive.
In the event of the death of an optionee, Options or SARs, if any,
exercisable by the optionee at the time of his or her death may be exercised
within one year thereafter by the person or persons to whom the optionee's
rights under the Options or SARs, if any, shall pass by will or by the
applicable law of descent and distribution. However, in no event may any Option
or SAR be exercised by anyone after the earlier of (a) the final date upon which
the optionee could have exercised it had the optionee continued in the
employment of the Company or its subsidiaries to such date, or (b) one year
after the optionee's death.
An Option may be exercised only by a notice in writing complying in all
respects with the applicable stock Option agreement. Such notice may instruct
the Company to deliver Shares due upon the exercise of the Option to any
registered broker or dealer approved by the Company (an "approved broker") in
lieu of delivery to the optionee. Such instructions shall designate the account
into which the Shares are to be deposited. The optionee may tender such notice,
properly executed by the optionee, together with the aforementioned delivery
instructions, to an approved broker. The purchase price of the Shares as to
which an Option is exercised shall be paid in cash or by check, except that the
Committee may, in its discretion, allow such payment to be made by surrender of
unrestricted Shares (at their fair market value on the date of exercise), or by
a combination of cash, check and unrestricted Shares.
Payment in accordance with Section 9 may be deemed to be satisfied, if and
to the extent provided in the applicable Option agreement, by delivery to the
Company of an assignment of a sufficient amount of the proceeds from the sale of
Shares acquired upon exercise to pay for all of the Shares acquired upon
exercise and an authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be made at the grantee's direction at the time
of exercise, provided that the Committee may require the grantee to furnish an
opinion of counsel acceptable to the Committee to the effect that such delivery
would not result in the grantee incurring any liability under Section 16 of the
Securities Exchange Act of 1934, as amended, and does not require the consent,
clearance or approval of any governmental or regulatory body (including any
securities exchange or similar self-regulatory organization).
Wherever in this Plan or any Option agreement an optionee is permitted to
pay the exercise price of an Option or taxes relating to the exercise of an
Option by delivering Shares, the optionee may, subject to procedures
satisfactory to the Committee, satisfy such delivery requirement by presenting
proof of beneficial ownership of such Shares, in which case the Company shall
treat the Option as exercised without further payment and shall withhold such
number of Shares from the Shares acquired by the exercise of the Option (or if
the Option is paid in cash, cash in an amount equal to the fair market value of
such shares on the date of exercise).
6
<PAGE>
The obligation of the Company to deliver Shares upon such exercise shall be
subject to all applicable laws, rules and regulations, and to such approvals by
governmental agencies as may be deemed appropriate by the Committee, including,
among others, such steps as counsel for the Company shall deem necessary or
appropriate to comply with requirements of relevant securities laws. Such
obligation shall also be subject to the condition that the Shares reserved for
issuance upon the exercise of Options granted under the Plan shall have been
duly listed on any national securities exchange which then constitutes the
principal trading market for the Shares.
10. STOCK APPRECIATION RIGHTS
The Committee may in its discretion grant SARs in connection with any
Option, either at the time the Option is granted or at any time thereafter while
the Option remains outstanding, to any person who at that time is eligible to be
granted an Option. The number of SARs granted to a person which shall be
exercisable during any given period of time shall not exceed the number of
Shares which he or she may purchase upon the exercise of the related Option or
Options during such period of time. Upon the exercise of an Option pursuant to
the Plan, the SARs relating to the Shares covered by such exercise shall
terminate. Upon the exercise of SARs pursuant to the Plan, the related Option to
the extent of an equal number of Shares shall terminate.
Upon an optionee's exercise of some or all of his or her SARs, the optionee
shall receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised, payable in cash, Shares or
a combination thereof, as determined in the sole discretion of the Committee.
The stock appreciation for an SAR is the difference between (I) the fair market
value of the underlying Share on the date of the exercise of such SAR and (ii)
the Option price specified for the related Option. At the time of such exercise,
the optionee shall have the right to elect the portion of the amount to be
received that shall consist of cash and the portion that shall consist of
Shares, which, for purposes of calculating the number of Shares to be received,
shall be valued at their fair market value on the date of the exercise of such
SARs. The Committee in its sole discretion shall have the right to disapprove an
optionee's election to receive cash in full or partial settlement of the SARs
exercised, and to require the Shares to be delivered in lieu of cash. If Shares
are to be received upon exercise of an SAR, cash shall be delivered in lieu of
any fractional share.
An SAR is exercisable only during the period when the Option to which it is
related is also exercisable. However, in no event shall an SAR be exercisable
during the first six months after being granted except that an SAR shall be
exercisable at the time of death or disability of the optionee if the related
Option is then exercisable. No SAR may be exercised for cash, in whole or in
part, except during the period beginning on the third business day following the
date of release of the Company's quarterly and annual summary statements of
sales and earnings and ending on the twelfth business day following such date.
7
<PAGE>
11. AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS;
ELECTIVE PURCHASE OF SHARES
11.1 AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS
Notwithstanding any other provision of the Plan, each Director who is not
then an employee of the Company or any subsidiary shall receive on the later of
(I) the date of his initial election or appointment to the Board of Directors
and (ii) the date of adoption of the Plan by the Board of Directors,
nonqualified Options to purchase 3,000 Shares and, in connection therewith, SARs
for the same number of Shares. On the date of each subsequent annual meeting of
stockholders of the Company at which a Director is reelected, he shall receive
nonqualified Options to purchase 1,000 Shares and, in connection therewith, SARs
for the same number of Shares. Each such Option shall have a term of ten years,
subject to the provisions of this Section 11.1 below. Each such Option shall
become exercisable to the extent of one-half thereof on each of the two
immediately succeeding anniversaries of the date of grant. The price per Share
to be paid by the holder of such an Option shall equal the fair market value of
one Share on the date the Option is granted. The purchase price of the Shares as
to which such an Option is exercised shall be paid in cash, by check, by the
delivery of unrestricted Shares held by the Director for at least six months,
through the cashless exercise program described in Section 9, or any combination
thereof, at the Director's election. SARs issued under this Section 11.1 shall
be exercisable for Shares. Any Director holding Options or SARs granted under
this Section 11.1 who is a member of the Committee shall not participate in any
action of the Committee with respect to any claim or dispute involving such
Director.
Subject to the provisions of the applicable Plan agreement, the unexercised
portion of any such Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:
(a) the expiration of ten years from the date on which such Option
was granted;
(b) the termination of the optionee's services to the Company and
its subsidiaries if the optionee's services are terminated for "cause,"
that is (I) on account of fraud, embezzlement or other unlawful or
tortious conduct, whether or not involving or against the Company or any
affiliate, (ii) for violation of a policy of the Company or any affiliate,
(iii) for serious and willful acts or misconduct detrimental to the
business or reputation of the Company of any affiliate or (iv) for "cause"
or any like term as defined in any written contract between the Company
and the optionee; or
(c) if the optionee's service terminates for reasons other than as
provided in subsection (a), (b) or (d) of this Section 11.1, the portion
of Options granted to such optionee which were exercisable immediately
prior to such termination may be exercised until the earlier of (I) 90
days after his termination of service or (ii) the date on which such
Options terminate or expire in accordance with the provisions of the Plan
(other than this Section 11.1) and the Plan agreement; or
8
<PAGE>
(d) if the optionee's service terminates by reason of his death, or
if the optionee's service terminates in the manner described in Subsection
(c) of this Section 11.1 and he dies within such period for exercise
provided for therein, the portion of Options exercisable by him
immediately prior to his death shall be exercisable by the person to whom
such Options pass under such optionee's will (or, if applicable, pursuant
to the laws of descent and distribution) until the earlier of (I) one year
after the optionee's death or (ii) the date on which such Options
terminate or expire in accordance with the provisions of the Plan (other
than this Section 11.1) and the Plan agreement.
To the extent necessary to comply with Rule 16b-3 of the Securities Exchange
Act of 1934 (the "Act") as in effect from time to time or any successor rule
thereafter ("Rule 16b-3"), the provisions of this Section 11.1 shall not be
amended more than once every six months other than to comport with changes in
the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder.
11.2 ELECTIVE PURCHASE OF SHARES
In addition to any other benefit to which any Director may be entitled under
the terms of the Plan, a Director shall be permitted to elect to receive all or
any portion of the annual retainer fees and/or board of directors or committee
meeting attendance fees, if any (collectively, the "Fees") that otherwise would
be payable in cash to such Director, in Shares rather than cash in accordance
with the provisions of this Section 11.2.
Any Director may elect to receive all or any portion of his or her Fees in
Shares rather than cash by delivering a written election (an "Election Notice,"
the election set forth therein being referred to as the "Election") to the
Secretary of the Company. An Election shall continue in effect until it is
revoked by delivery to the Secretary of the Company of a written revocation
notice (a "Revocation") or modified by delivery to the Secretary of the Company
of a new Election Notice. Any Election or Revocation under this Section 11.2
shall be effective with respect to Fees that otherwise would be paid after the
later of (x) with respect to an Initial Election (as defined below), the date of
receipt by the Secretary of the Company of the Election Notice or, if later, the
date specified in such Election Notice, and (y) with respect to any Revocation
or any Election other than an Initial Election, six months after the date of
receipt by the Secretary of the Company of such Revocation or Election Notice.
There shall be no limit on the number of Elections or Revocations that may be
made a Director. A Director who does not elect that all or a portion of his Fees
be paid in Shares shall receive his Fees in cash on the date that such Fees are
otherwise due. Any Shares payable under this Section 11.2 shall be issued to the
Director on the same date that the Fees would have been paid in cash. The number
of Shares to be issued to a Director who makes an Election under this Section
11.2 shall be determined by dividing:
(i) The amount of the Director's Fees for which he has made an
Election under this Section 11.2, by
9
<PAGE>
(ii) the average of the fair market value of the Shares (as defined
in Section 7 of the Plan) for the twenty (20) consecutive trading days
immediately preceding the date as of which the Fees otherwise would be
payable. Only full Shares shall be issued pursuant to this Section. If the
formula set forth above would result in a Director receiving any
fractional Share, then, in lieu of such fractional Share, the Director
shall be paid cash.
For purposes of this Section 11.2 an "Initial Election" means an Election
received by the Secretary of the Company from a Director on a date not later
than the later of (a) ten days following the date on which the Company's
shareholders shall have approved the addition to the Plan of this Section 11.2,
and (b) ten days after a Director is first elected a director of the Company.
PROVISIONS RELATING TO RESTRICTED SHARES
12. GRANTING OF RESTRICTED SHARES
The Committee may grant Restricted Shares to eligible persons at any time.
In granting Restricted Shares, the Committee shall determine in its sole
discretion the period or periods during which the restrictions on
transferability applicable to such Shares will be in force (the "Restricted
Period"). The Restricted Period may be the same for all such Shares granted at a
particular time or to any one grantee or may be different with respect to
different grantees or with respect to various of the Shares granted to the same
grantee, all as determined by the Committee in its sole discretion.
Each grant of Restricted Shares under the Plan shall be evidenced by an
agreement which shall be executed by the Company and by the person to whom the
Restricted Shares are granted. The agreement shall contain such terms and
provisions, not inconsistent with the Plan, as shall be determined by the
Committee.
13. RESTRICTIONS ON TRANSFERABILITY
During the Restricted Period applicable to each grant of Restricted Shares,
such Shares may not be sold, assigned, transferred or otherwise disposed of, or
mortgaged, pledged or otherwise encumbered. Furthermore, a grantee's eventual
right, if any, to such Shares may not be assigned or transferred except by will
or by the laws of descent and distribution. The restrictions on the
transferability of Restricted Shares imposed by this section are referred to in
this Plan as the "Transferability Restrictions."
14. DETERMINATION OF VESTING RESTRICTIONS
With respect to each grant of Restricted Shares, the Committee shall
determine in its sole discretion the restrictions on vesting which will apply to
the Shares for the Restricted Period, which restrictions as initially determined
and as they may be modified pursuant to the Plan, are
10
<PAGE>
referred to hereinafter as the "Vesting Restrictions." By way of illustration
but not by way of limitation, any such determination of Vesting Restrictions by
the Committee may provide (a) that the grantee will not be entitled to any such
Shares unless he or she is still employed by the Company or its subsidiaries at
the end of the Restricted Period; (b) the grantee will become vested in such
Shares according to such schedule as the Committee may determine; (c) that the
grantee will become vested in such Shares at the end of or during the Restricted
Period based upon the achievement (in such manner as the Committee may
determine) of such performance standards as the Committee may determine; (d)
that the grantee will become vested in such Shares in any combination of the
foregoing or under such other terms and conditions as the Committee in its sole
discretion may determine; and (e) how any such Vesting Restrictions will be
applied, modified or accelerated in the case of the grantee's death, total and
permanent disability (as determined by the Committee) or retirement.
The performance standards, if any, set by the Committee for any grantee may
be individual performance standards applicable to the grantee, may be
performance standards for the Company or the division, business unit or
subsidiary by which the grantee is employed, may be performance standards set
for the grantee under any other plan providing for incentive compensation for
the grantee, or may be any combination of such standards. Performance standards
set at the time of the grant of any Restricted Shares may be revised at any time
prior to the beginning of the last year of the Restricted Period, but only to
take into account significant changes in circumstances as determined by the
Committee in its sole discretion.
If the Committee deems the Vesting Restrictions inappropriate for any
grantee, it may approve the award and delivery to such grantee of all or any
portion of the Restricted Shares then held in escrow pursuant to Section 15. Any
Restricted Shares so awarded and delivered to a grantee shall be delivered free
and clear of the Transferability Restrictions.
15. MANNER OF HOLDING AND DELIVERING RESTRICTED SHARES
Each certificate issued for Restricted Shares granted hereunder will be
registered in the name of the grantee and will be deposited with the Company or
its designee in an escrow account accompanied by a stock power executed in blank
by the grantee covering such Shares. The certificates for such Shares will
remain in escrow until the earlier of the end of the applicable Restricted
Period, or, if the Committee has provided for earlier termination of the
Transferability Restrictions following a grantee's death, total and permanent
disability, retirement or earlier vesting of such Shares, such earlier
termination of the Transferability Restrictions. At whichever time is
applicable, the certificates representing the number of such Shares to which the
grantee is then entitled will be released from escrow and delivered to the
grantee free and clear of the Transferability Restrictions, provided that in the
case of a grantee who is not entitled to receive the full number of such Shares
evidenced by the certificates then being released from escrow because of the
application of the Vesting Restrictions, such certificates will be returned to
the Company and canceled, and a new certificate representing the Shares, if any,
to which the grantee is entitled pursuant to the Vesting Restrictions, will be
issued and delivered to the grantee, free and clear of the Transferability
Restrictions.
11
<PAGE>
16. TRANSFER IN THE EVENT OF DEATH, DISABILITY OR RETIREMENT
Notwithstanding a grantee's death, total and permanent disability or
retirement, the certificates for his or her Restricted Shares will remain in
escrow and the Transferability Restrictions will continue to apply to such
Shares unless the Committee determines otherwise. Upon the release of such
Shares from escrow and the termination of the Transferability Restrictions,
either upon any such determination by the Committee or at the end of the
applicable Restricted Period, as the case may be, the portion of such grantee's
Restricted Shares to which he or she is entitled, determined pursuant to his or
her applicable Vesting Restrictions, will be awarded and delivered to the
grantee or to the person or persons to whom the grantee's rights, if any, to the
Shares shall pass by will or by the applicable law of descent and distribution,
as the case may be. However, the Committee may in its sole discretion award and
deliver all or any greater portion of the Restricted Shares to any such grantee
or to such person or persons.
17. LIMITATIONS ON OBLIGATION TO DELIVER SHARES
The Company shall not be obligated to deliver any Restricted Shares free and
clear of the Transferability Restrictions until the Company has satisfied itself
that such delivery complies with all laws and regulations by which the Company
is bound.
GENERAL PROVISIONS
18. SHAREHOLDER RIGHTS
Except for the Transferability Restrictions, a grantee of Restricted Shares
shall have the rights of a holder of the Shares, including the right to receive
dividends paid on such Shares and the right to vote such Shares at meetings of
shareholders of the Company. However, no optionee shall have any of the rights
of a shareholder with respect to any Shares unless and until he or she has
exercised his or her Option with respect to such Shares and has paid the full
purchase price therefor.
19. CHANGES IN SHARES
In the event of (I) any split, reverse split, combination of shares,
reclassification, recapitalization or similar event which involves, affects or
is made with regard to any class or series of Capital Stock which may be
delivered pursuant to the Plan ("Plan Shares"), (ii) any dividend or
distribution on Plan Shares payable in Capital Stock, or (iii) a merger,
consolidation or other reorganization as a result of which Plan Shares shall be
increased, reduced or otherwise changed or affected, then in each such event the
Committee shall, to the extent it deems it to be consistent with such event and
necessary or equitable to carry out the purposes of the Plan, appropriately
adjust (a) the maximum number of shares of Capital Stock and the classes or
series of such Capital Stock which may be delivered pursuant to the Plan, (b)
the number of shares of
12
<PAGE>
Capital Stock and the classes or series of Capital Stock subject to outstanding
Options or SARs, (c) the Option price per share of all Capital Stock subject to
outstanding Options, and (d) any other provisions of the Plan, provided,
however, that (I) any adjustments made in accordance with clauses (b) and (c)
shall make any such outstanding Option or SAR as nearly as practicable,
equivalent to such Option or SAR, as the case may be, immediately prior to such
change and (ii) no such adjustment shall give any optionee any additional
benefits under any outstanding Option.
20. REORGANIZATION
In the event that the Company is merged or consolidated with another
corporation, or in the event that all or substantially all of the assets of the
Company are acquired by another corporation, or in the event of a reorganization
or liquidation of the Company (each such event being hereinafter referred to as
a "Reorganization Event") or in the event that the Board of Directors shall
propose that the Company enter into a Reorganization Event, then the Committee
may in its discretion take any or all of the following actions: (I) by written
notice to each optionee, provide that his or her Options will be terminated
unless exercised within thirty days (or such longer period as the Committee
shall determine in its sole discretion) after the date of such notice (without
acceleration of the exercisability of such Options); and (ii) advance the date
or dates upon which any or all outstanding Options shall be exercisable.
Whenever deemed appropriate by the Committee, any action referred to in
subparagraph (a) above may be made conditional upon the consummation of the
applicable Reorganization Event. The provisions of this Section 20 shall apply
notwithstanding any other provision of the Plan.
21. CHANGE OF CONTROL
Notwithstanding anything in the Plan to the contrary, upon (I) the
acquisition by any person of 50% or more of the combined voting power of the
Company's outstanding securities entitled to vote generally in the election of
directors, or (ii) a majority of the directors of the Company being individuals
who are not nominated by the Board of Directors (a "Change of Control"), any
outstanding Options granted under the Plan to officers or directors of the
Company shall be fully and immediately exercisable and any Vesting Restrictions
applicable to any Restricted Shares held by an officer of the Company shall
lapse and such Restricted Shares shall be delivered free and clear of all
Transferability Restrictions. The acquisition of any portion of the combined
voting power of the Company by DWG Acquisition Group, L.P., Nelson Peltz or
Peter May or by any person affiliated with such persons (or the acquisition or
disposition by any person or persons who receive any award under Section 11
hereof) shall in no event constitute a Change of Control.
22. WITHHOLDING TAXES
Whenever under the Plan shares of Common Stock are to be delivered pursuant
to an award, the Committee may require as a condition of delivery that the
optionee or grantee remit an
13
<PAGE>
amount sufficient to satisfy all federal, state and other governmental holding
tax requirements related thereto. Whenever cash is to be paid under the Plan
(whether upon the exercise of an SAR or otherwise), the Company may, as a
condition of its payment, deduct therefrom, or from any salary or other payments
due to the grantee, an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto or to the delivery of
any shares of Common Stock under the Plan. Notwithstanding any provision of this
Plan to the contrary, in connection with the transfer of an Option to a
Permitted Transferee pursuant to Section 9 of the Plan, the optionee shall
remain liable for any withholding taxes required to be withheld upon the
exercise of such Option by the Permitted Transferee.
Without limiting the generality of the foregoing, (I) an optionee or grantee
may elect to satisfy all or part of the foregoing withholding requirements by
delivery of unrestricted shares of Common Stock owned by the optionee or grantee
for at least six months (or such other period as the Committee may determine)
having a fair market value (determined as of the date of such delivery by the
optionee or grantee) equal to all or part of the amount to be so withheld,
provided that the Committee may require, as a condition of accepting any such
delivery, the optionee or grantee to furnish an opinion of counsel acceptable to
the Committee to the effect that such delivery would not result in the optionee
or grantee incurring any liability under Section 16(b) of the Act; and (ii) the
Committee may permit any such delivery to be made by withholding shares of
Common Stock from the Shares otherwise issuable pursuant to the award giving
rise to the tax withholding obligation (in which event the date of delivery
shall be deemed the date such award was exercised).
23. AMENDMENT AND DISCONTINUANCE
The Board of Directors may alter, suspend, or discontinue the Plan, but,
except as provided in Section 19, may not, without the approval of the holders
of a majority of the Class A Common Stock, make any alteration or amendment
hereto which operates (a) to materially increase the number of Shares which are
available for the grant of Options, SARs and Restricted Shares under the Plan,
(b) to extend the term during which Options may be granted under the Plan or the
maximum Option period provided in Section 8, (c) to decrease the minimum Option
price provided in Section 7, (d) to materially increase the rights of optionees
with respect to SARs in a manner which would not comply with Rule 16b-3, (e) to
amend Section 11 in a manner which would not comply with Rule 16b-3, or (f) to
materially modify the requirements as to eligibility for participation in the
Plan, or (g) as otherwise required to comply with Rule 16b-3.
24. GOVERNING LAWS
The Plan shall be applied and construed in accordance with an governed by
the law of the State of Delaware, to the extent such law is not superseded by or
inconsistent with Federal law.
14
<PAGE>
25. EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall become effective on April 24, 1993, the date of its adoption
by the Board of Directors; subject, however, to the approval of the Plan by the
holders of a majority of the Class A Common Stock outstanding and entitled to
vote generally in the election of directors on or prior to April 24, 1994. The
term during which Options, SARs and Restricted Shares may be granted under the
Plan shall expire on April 24, 1998.
26. AMENDMENTS TO AGREEMENTS
Notwithstanding any other provision of the Plan, the Board of Directors, or
any authorized committee thereof, may amend the terms of any agreement entered
into in connection with any award granted pursuant to the Plan, provided that
the terms of such amendment are not inconsistent with the terms of the Plan.
L:\LEGAL\TRY-S01\SEC\10-K.95\EXHIBIT.101
15
<PAGE>
Exhibit 10.2
NON-INCENTIVE STOCK OPTION AGREEMENT
Under
TRIARC COMPANIES, INC.
1993 EQUITY PARTICIPATION PLAN
_____ Shares of Common Stock
TRIARC COMPANIES, INC. (the "Company"), pursuant to the terms of
its 1993 Equity Participation Plan (the "Plan"), hereby irrevocably grants to
_____ (the "Optionee") the right and option to purchase _____ shares of Class A
Common Stock, par value $.10 per share (the "Common Stock"), of the Company upon
and subject to the following terms and conditions:
1. The Option is not intended to qualify as an incentive stock
option under the provisions of Section 422 of the Internal Revenue Code of 1986
or its predecessor (the "Code").
2. _____ is the date of grant of the Option ("Date of Grant").
3. The purchase price of the shares of Common Stock subject to
the Option shall be $_____ per share.
4. The Option shall be exercisable as follows:
(a) One-third of the shares of Common Stock subject to the
Option shall be exercisable after _____.
(b) One-third of the shares of Common Stock subject to the
Option shall be exercisable after _____.
(c) One-third of the shares of Common Stock subject to the
Option shall be exercisable after _____.
5. The unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the expiration of ten (10)
years from the Date of Grant.
6. The unexercised portion of any such Option shall automatically
and without notice terminate and become null and void at the time of the
earliest to occur of the following:
(a) _____20__;
(b) the termination of the Optionee's services to the
Company and its subsidiaries if the Optionee's services are terminated for
"cause," that is for "cause" or any like term, as defined in any written
contract between the Company and the optionee; or if not so defined, (i) on
account of fraud, embezzlement or other unlawful or tortious conduct, whether or
not involving or against the Company or any affiliate, (ii) for violation of a
policy of the Company or any affiliate, (iii) for serious and willful acts or
misconduct detrimental to the business or reputation of the Company or any
affiliate; or
1
<PAGE>
(c) the termination of Optionee's services to the Company
and its subsidiaries for reasons other than as provided in subsection (b) or (d)
of this Section 6; provided, however, that the portion of Options granted to
such optionee which were exercisable immediately prior to such termination may
be exercised until the earlier of (i) 90 days after his termination of service
or (ii) the date on which such Options terminate or expire in accordance with
the provisions of this Agreement (other than this Section 6); or
(d) the termination of Optionee's services to the Company
and its subsidiaries by reason of his death, or if the Optionee's services
terminate in the manner described in subsection (c) of this Section 6 and he
dies within such period for exercise provided for therein; provided, however,
that the portion of Options exercisable by him immediately prior to his death
shall be exercisable by the person to whom such Options pass under such
Optionee's will (or, if applicable, pursuant to the laws of descent and
distribution) until the earlier of (i) one year after the optionee's death or
(ii) the date on which such Options terminate or expire in accordance with the
provisions of this Agreement (other than this Section 6).
To the extent necessary to comply with Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Act") as in effect from time
to time or any successor rule thereafter ("Rule 16b-3"), the provisions of this
Section 6 shall not be amended more than once every six months other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
7. The Option shall be exercised by the Optionee (or by the
Optionee's executors or administrators, as provided in Section 10), subject to
the provisions of the Plan and of this Agreement, as to all or part of the
shares of Common Stock covered hereby, as to which the Option shall then be
exercisable, by the giving of written notice of such exercise to the Company at
its principal business office, accompanied by payment of the full purchase price
for the shares being purchased. Payment of such purchase price shall be made (a)
by cash or by check payable to the Company and/or (b) by delivery of
unrestricted shares of Common Stock having a fair market value (determined as of
the date the Option is exercised, but in no event at a price per share less than
the par value per share of the Common Stock delivered) equal to all or part of
the purchase price and, if applicable, of a check payable to the Company for any
remaining portion of the purchase price. Payment in accordance with this Section
7 may be satisfied by delivery to the Company of an assignment of sufficient
amount of the proceeds from the sale of shares of Common Stock acquired upon
exercise of the Option to pay for all of the shares of Common Stock acquired
upon such exercise and on authorization to the broker or selling agent to pay
that amount to the Company, which sale shall be made at the Optionee's direction
at the time of exercise, provided that the Committee may require Optionee to
furnish an opinion of counsel acceptable to the Committee to the effect that
such delivery would not result in the Optionee incurring any liability under
Section 16 of the Act and does not require the consent, clearance or approval of
any governmental or regulatory body (including any securities exchange or
similar self-regulatory organization).
The Company shall cause certificates for the shares so purchased
to be delivered to the Optionee or the Optionee's executors or administrators,
against payment of the purchase price, as soon as practicable following the
Company's receipt of the notice of exercise.
2
<PAGE>
8. Neither the Optionee nor the Optionee's executors or
administrators shall have any of the rights of a stockholder of the Company with
respect to the shares subject to the Option until a certificate or certificates
for such shares shall have been issued upon the exercise of the option.
9. The Option shall not be transferable by the Optionee other
than to the Optionee's executors or administrators by will or the laws of
descent and distribution, and during the Optionee's lifetime shall be
exercisable only by the Optionee.
10. In the event of the Optionee's death, the Option shall
thereafter be exercisable (to the extent otherwise exercisable hereunder) only
by the Optionee's executors or administrators.
11. The terms and conditions of the Option, including the number
of shares and the class or series of capital stock which may be delivered upon
exercise of the Option and the purchase price per share, are subject to
adjustment as provided in Paragraph 19 of the Plan.
12. The Optionee, by the Optionee's acceptance hereof, represents
and warrants to the Company that the Optionee's purchase of shares of capital
stock upon the exercise hereof shall be for investment and not with a view to
distribution and agrees that the shares of capital stock will not be disposed of
except pursuant to an applicable effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), unless the Company
shall have received an opinion of counsel satisfactory to the Company that such
disposition is exempt from such registration under the Securities Act.
The Optionee agrees that the obligation of the Company to issue
shares upon the exercise of the Option shall also be subject, as conditions
precedent, to compliance with applicable provisions of the Act, state securities
or corporation laws, rules and regulations under any of the foregoing and
applicable requirements of any securities exchange upon which the Company's
securities shall be listed.
The Company may endorse an appropriate legend referring to the
foregoing representations and restrictions upon the certificate or certificates
representing any shares issued or transferred to the Optionee upon the exercise
of the Option.
13. The Option has been granted subject to the terms and
conditions of the Plan, a copy of which has been provided to the Optionee and
which the Optionee acknowledges having received and reviewed. Any conflict
between this Agreement and the Plan shall be decided in favor of the provisions
of the Plan. Terms used but not defined in this Agreement shall have the
meanings given to them in the Plan. This Agreement may not be amended in any
manner adverse to the Optionee except by a written agreement executed by the
Optionee and the Company.
3
<PAGE>
14. Nothing herein shall confer upon the Optionee the right to
continue to serve as a director or officer to the Company or any of its
subsidiaries.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed by an officer duly authorized thereto as of the _____ day of _____, ____.
TRIARC COMPANIES, INC.
By:___________________________
Name:
Title:
ACCEPTED AND AGREED TO:
--------------------------------
L:\LEGAL\TRY-S01\SEC\8-K.97\TRIARC\SHELL.3YR
4
<PAGE>
Page 1
Exhibit 10.3
As of April 29, 1996
Mr. John L. Barnes, Jr.
31 Old Redding Road
Weston, CT 06883
Dear Jack:
It is with great pleasure that we hereby confirm your employment as
Senior Vice President of Triarc Companies, Inc. ("Triarc"), on the terms and
conditions set forth in this letter and in the attached term sheet (the
"Employment Term Sheet").
You will report to the President and Chief Operating Officer of Triarc
and your duties will be performed primarily at the corporate headquarters of
Triarc in New York, New York. The term of your employment shall continue through
April 28, 1999.
In the event of termination of your employment by Triarc prior to April
28, 1999 without good cause, Triarc shall, (i) within 30 days after the date of
such termination, pay to you a lump sum equal to one-half (1/2) your then
current base salary that would otherwise have been payable to you through April
28, 1999, (ii) commencing 6 months after the date of termination of your
employment, pay to you a sum equal to one-half (1/2) your annual base salary in
effect at the date of termination, payable semi-monthly through April 28, 1999,
so that the sum of such semi-monthly payments in the aggregate is equal to
one-half of the annual base salary you would have received from the date of
termination through April 28, 1999 if you had not been so terminated, (iii)
continue your health insurance benefits under the terms as an active employee
through April 28, 1999, or the first of the month following the acceptance of
full-time employment, whichever is earlier, and (iv) each stock option granted
to you (a) which has not vested as of the termination date shall vest
immediately as of such date and (b) which has vested prior to or as of the
termination date must be exercised within the earlier of (i) one year or (ii)
the date on which such option expires or be forfeited.
Your employment with Triarc shall terminate upon your death. In the
event of your death during the term of your employment with Triarc, your estate
or other legal representative shall be entitled to the following: (i) your then
current base salary through the last day of the calendar quarter in which you
die, (ii) any earned but unpaid base salary or vacation and (iii) any accrued
but unpaid bonus for the immediately preceding fiscal year. Such amounts shall
be paid by Triarc in a lump sum, subject to all withholdings, within 30 days of
the date of death. If you are unable to perform all or
<PAGE>
Page 2
substantially all of your duties and responsibilities on account of illness
(either physical or mental) or other incapacity, Triarc shall continue to pay
you the full amount and benefits provided hereunder for the period of such
illness or incapacity; provided, however, that in the event such illness or
incapacity continues for a period of longer than 180 consecutive days or for an
aggregate of 175 days during any consecutive 9-month period (each, a
"disability"), Triarc's Board of Directors shall have the right to terminate
your employment by giving you not less than 30 days written notice of Triarc's
election to do so. In the event your employment is terminated on account of
disability pursuant to this paragraph, you will be entitled to the payments sets
forth in the first sentence of this paragraph.
For the purposes of this agreement, the term "Change in Control" shall
mean (i) the acquisition by any person of 50% or more of the combined voting
power of Triarc's outstanding securities entitled to vote generally in the
election of directors, or (ii) a majority of the Directors of Triarc, being
individuals who are not nominated by the Board of Directors of Triarc.
Notwithstanding the foregoing, (i) the acquisition of any portion of the
combined voting power of Triarc by DWG Acquisition Group, L.P., Nelson Peltz or
Peter May, or by any person affiliated with such persons, (ii) the distribution
by means of a dividend or otherwise, of voting securities of Triarc or (iii) any
sale of securities by Triarc pursuant to a public offering, shall in no event
constitute a Change in Control. In the event of a Change in Control, Triarc
shall be obligated to employ you as Senior Vice President, and you shall be
obligated to accept and continue in employment hereunder as Senior Vice
President, pursuant to the terms and conditions of this agreement, until the
first anniversary of the Change in Control (the "Termination Date"). You shall
have the absolute right to resign as an officer and employee of Triarc,
effective as of the Termination Date, by written notice to Triarc given not less
than 30 days before the Termination Date and to receive, commencing with the
Termination Date, the same payments and other benefits to which you would have
been entitled had Triarc terminated your employment without good cause.
Triarc will indemnify you, to the maximum extent permitted by applicable
law, against all costs, charges and expenses incurred or sustained by you in
connection with any action, suit or proceeding to which you may be made a party
by reason of your being an officer, director or employee of Triarc or of any
subsidiary or affiliate of Triarc.
For purposes of this agreement "for cause" means: (i) commission of any
act of fraud or gross negligence by you in the course of your employment
hereunder which, in the case of gross negligence, has a materially adverse
effect on the business or financial condition of Triarc or any of its
affiliates; (ii) willful material misrepresentation at any time by you to any
superior executive officer of Triarc or any of their affiliates; (iii) voluntary
termination by you of your employment or failure, refusal or neglect by you to
comply with any of your material obligations hereunder or failure by you to
comply with a reasonable instruction of any superior officer of Triarc or its
Board of Directors, which failure, refusal or neglect, if curable, is not fully
and completely cured to the reasonable satisfaction of Triarc as soon as
reasonably possible upon written notice to you; (iv) engagement by you in any
conduct or the commission by you of any act which is, in the reasonable opinion
of Triarc, materially injurious
<PAGE>
Page 3
or detrimental to the substantial interest of Triarc; (v) conviction of a
felony, whether with respect to your employment or otherwise, under the criminal
laws of the United States or any state thereof or any similar foreign law to
which you may be subject; (vi) any failure substantially to comply with any
written rules, regulations, policies or procedures of Triarc, which, if not
complied with, could have a material adverse effect on the business of Triarc or
any of its affiliates; or (vii) any willful failure to comply with Triarc's
internal policies regarding insider trading.
You agree to treat as confidential and not to disclose to anyone other
than Triarc and its subsidiaries and affiliated companies, and you agree that
you will not at any time during your employment and for a period of four years
thereafter, without the prior written consent of Triarc, divulge, furnish, or
make known or accessible to, or use for the benefit of anyone other than Triarc,
its subsidiaries, and affiliated companies, any information of a confidential
nature relating in any way to the business of Triarc or its subsidiaries or
affiliated companies, or any of their respective direct business customers,
unless (i) you are required to disclose such information by requirements of law,
(ii) such information is in the public domain through no fault of yours, or
(iii) such information has been lawfully acquired by you from other sources
unless you know that such information was obtained in violation of an agreement
of confidentiality. You further agree that during the period referred to in the
immediately preceding sentence you will refrain from engaging in any conduct or
making any statement written or oral which is detrimental to the interests of
Triarc, its subsidiaries or any of its affiliates or any of their respective
shareholders, directors, officers or employees.
You agree that in addition to any other remedy provided at law or in
equity, (a) Triarc shall be entitled to a temporary restraining order, and both
preliminary and permanent injunctive relief restraining you from violating the
provisions of the immediately preceding paragraph, (b) you will indemnify and
hold Triarc harmless from and against any and all damages or loss incurred by
Triarc or any of its affiliates (including attorneys' fees and expenses) as a
result of any such violation; and (c) Triarc's remaining obligations this
agreement, if any, shall cease (other than payment of your base salary through
the date of such violation and any earned but unpaid vacation or except as may
be required by law).
This agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
<PAGE>
Page 4
If you agree with the terms outlined above and in the Employment Term
Sheet, please date and sign the copy of this letter enclosed for that purpose
and return it to us.
Best regards,
Sincerely,
Peter W. May
Peter W. May
President and
Chief Operating Officer
AGREED TO AND ACCEPTED:
John L. Barnes, Jr.
- -----------------------
John L. Barnes, Jr.
As of April 29, 1996
l:\legal\try-e01\emp-term\ltrs\barnes4.bls
<PAGE>
Page 5
EMPLOYMENT TERM SHEET
JOHN L. BARNES, JR.
Provision Term
Contract Term 3 years commencing 4/29/96
Title Senior Vice President; responsible for C.H.
Patrick; CFO of Triarc upon retirement of existing
CFO (on or about 8/15/96).
Base Salary $300,000/year subject to increase, but not decrease
from time to time.
Bonus, etc. $200,000 minimum with respect to first 12
months. Thereafter to be treated in a manner
comparable to other senior executives. Will be
eligible to participate in any long or short-term
management incentive plan which Triarc shall from
time to time provide for its senior executives
generally.
Stock Options 30,000 shares in connection with the
commencement of employment. Thereafter, awards on
basis comparable to other senior executives.
Relocation See attachment.
Financial Advisory Services Comparable to that provided to other senior
executives of Triarc.
Health, medical, life and
disability insurance,
vacation, pension Comparable to that provided to other senior
executives of Triarc generally.
Home/Office Will be provided portable computer and docking
station, printer, monitor, modem and fax machine
for home/office with attendant supplies and service
agreements.
Housing Support on
early termination,
non-renewal If employment is terminated by Triarc without cause
or Triarc does not renew contract at end of 3-year
term, Triarc will reimburse Executive for any loss
on sale of his N.Y. area home (based on difference
between Executive's original purchase price and his
ultimate sale price within 12 months of termination
of employment) up to a maximum of $150,000 and the
provisions of the attached relocation policy will be
applicable to the Executive's relocation outside of
the New York metropolitan area for six months from
the date of such termination or non-renewal.
l:\legal\try-e01\emp-term\ltrs\barnes4.bls
<PAGE>
Page 6
TRIARC COMPANIES, INC. - RELOCATION
---------------------------------------------------------------
RELOCATION ALLOWANCE
Officers will be provided with a relocation allowance payable in one
lump sum (as fully taxed) equal to two months salary at the officer's new salary
rate upon commencement of work at his or her new location. The purpose of the
relocation allowance is to help defray incidental expenses connected with the
move for which reimbursement is not provided. Examples of the types of expenses
for which the relocation allowance are provided are:
- additional return home trips and/or additional travel for the
spouse beyond the provisions of the moving policy
- charges for disconnection, reinstallation and/or alterations of
draperies, carpets, television antennas, etc.
- telephone installation charges and utility deposits
- new automobile license plates and registration fees
HOUSE HUNTING TRIPS
The officer and spouse (excluding children) are authorized three house
hunting trips to locate housing in the new location, each trip not to exceed
seven days. All reasonable expenses for such trips, including lodging, meals,
business class air fare, car rental and car mileage will be reimbursed.
TRANSPORTATION OF HOUSEHOLD GOODS
Triarc will be financially responsible for the packing, shipping,
unloading and insurance of all normal household goods and two personal
automobiles.
TRAVEL TO NEW LOCATION
All expenses associated with travelling from the location of the former
residence to the new location will be reimbursed for the officer and family,
including business class air fare.
<PAGE>
Page 2
TEMPORARY LIVING AT NEW LOCATION
If it becomes necessary for an officer to occupy temporary living
quarters during the course of the relocation, reasonable expenses for the actual
cost of lodging shall be reimbursed for a period of up to 90 days or Triarc will
rent for your use furnished housing for such period.
RESIDENCE SALE
Triarc will pay approved expenses incurred in selling a principal
residence at the old location. Such expenses include:
- broker's commission (normal and customary) - escrow fees/seller's
attorney's fees - recording fees - mortgage satisfaction fee -
mortgage prepayment penalty fee - title policy fee
- documentary tax stamps and state and local sales transfer taxes
MAINTAINING TWO HOMES
If an officer purchases a new home prior to selling the present home,
and therefore incurs duplicate house carrying expenses (subsequent to the
provisions of "Temporary Living at New Location" above), the Company will
reimburse the officer on a pro rated basis for the mortgage interest only for a
maximum of 60 days.
RESIDENCE PURCHASE
The officer will be reimbursed for the normal closing costs associated
with buying a new house. Such costs shall include those items which by local
custom are normally paid by the buyer. Typical costs may include escrow fees,
attorney's fees, appraisals, recording fees, state transfer taxes and fee
(owner's) title insurance.
TENANT RELOCATION
If the transferee is a tenant rather than a homeowner, the Company will
reimburse the transferee for reasonable expenses incurred in connection with
early termination or breaking of the transferee's lease.
l:\legal\try-e01\emp-term\ltrs\barnes4.bls
<PAGE>
Exhibit 4.4
THIRD AMENDMENT AGREEMENT
dated as of December 30, 1996
among
MISTIC BRANDS, INC.
TRIARC COMPANIES, INC.
THE LENDERS SIGNATORY HERETO
and
THE CHASE MANHATTAN BANK
as Agent
<PAGE>
THIRD AMENDMENT AGREEMENT
THIRD AMENDMENT AGREEMENT (this "Agreement") dated as of December 30, 1996
among MISTIC BRANDS, INC., a corporation organized under the laws of Delaware
(the "Borrower"), TRIARC COMPANIES, INC., a corporation organized under the laws
of Delaware (the "Guarantor"), each of the lenders which is a signatory hereto
(the "Lenders") and THE CHASE MANHATTAN BANK, a bank organized under the laws of
the State of New York, as agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Agent").
WHEREAS, the Borrower, the Lenders and the Agent have entered into that
certain Credit Agreement dated as of August 9, 1995 (as amended by that certain
First Amendment Agreement dated as of October 6, 1995, as further amended by
that certain Second Amendment Agreement dated as of March 31, 1996, as further
amended by that certain side letter dated May 8, 1996 and, as in effect prior to
the effectiveness of this Agreement, the "Existing Credit Agreement" and, as
amended by this Agreement, the "Amended Credit Agreement") pursuant to which the
Lenders have extended credit to the Borrower evidenced by certain Promissory
Notes issued by the Borrower and guarantied by the Guarantor under the
Unconditional Guaranty;
WHEREAS, the Borrower, the Guarantor, the Lenders and the Agent have
agreed to enter this Agreement to provide for, among other things, modifications
of certain covenants and definitions contained in the Existing Credit Agreement
and the Affiliate Subordination Agreement, waivers of certain Defaults and
Events of Default, consent to the incurrence of certain Debt and a covenant to
provide for certain additional Guaranties; and
WHEREAS, the Facility Documents, as amended and supplemented by this
Agreement (including, without limitation, this Agreement and the Amended Credit
Agreement), and as each may be amended or supplemented from time to time, are
referred to herein as the "Amended Facility Documents".
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.AMENDMENTS TO EXISTING AGREEMENTS.
Section 1.01. Amendments to Existing Credit Agreement. Each of the
Borrower and the Guarantor and, subject to the satisfaction of the conditions
set forth in Section 3, the Agent and the Lenders hereby consents and agrees to
the amendments to the Existing Credit Agreement set forth below:
(a) The definition of "Excess Cash Flow" in Section 1.01 of the
Existing Credit Agreement is hereby amended to substitute "December 28, 1997" in
place of "December 31, 1997".
(b) The definition of "Fiscal Quarter" in Section 1.01 of the
Existing Credit Agreement is hereby amended and restated to read as follows:
"Fiscal Quarter" means any fiscal quarter of the Consolidated
Entities.
(c) The definition of "Fiscal Year" in Section 1.01 of the Existing
Credit Agreement is hereby amended and restated to read as follows:
"Fiscal Year" means any fiscal year of the Consolidated
Entities.
(d) Section 1.01 of the Existing Credit Agreement is hereby amended
to add the following definition in appropriate alphabetical order:
"Intercompany Note" means that certain Note dated February 14, 1997
issued by the Borrower in favor of the Guarantor in the original principal
amount of $3,500,000.
1
<PAGE>
(e) The second sentence of Section 2.01(b) of the Existing Credit
Agreement is hereby amended and restated to read as follows:
The Term Loans shall be repaid in twenty-four quarterly installments,
each such installment to be payable on the dates set forth below beginning
on December 31, 1995 and ending on the Term Loan Termination Date and to
be in the aggregate amounts set forth below, such that on each such
payment date, each Lender shall be paid an amount equal to such Lender's
pro rata share of the Term Loans (calculated based on its Term Loan
Percentage) of the amount set forth below:
Aggregate Amount
Payment Date of Installments
December 31, 1995 $ 1,250,000
March 31, 1996 $ 1,250,000
June 30, 1996 $ 1,250,000
September 30, 1996 $ 1,250,000
December 31, 1996 $ 1,250,000
March 30, 1997 $ 1,250,000
June 29, 1997 $ 1,250,000
September 28, 1997 $ 1,250,000
December 28, 1997 $ 2,500,000
March 29, 1998 $ 2,500,000
June 28, 1998 $ 2,500,000
September 27, 1998 $ 2,500,000
December 27, 1998 $ 2,500,000
March 28, 1999 $ 2,500,000
June 27, 1999 $ 2,500,000
September 26, 1999 $ 2,500,000
December 26, 1999 $ 3,750,000
March 26, 2000 $ 3,750,000
June 25, 2000 $ 3,750,000
September 24, 2000 $ 3,750,000
December 31, 2000 $ 3,750,000
March 31, 2001 $ 3,750,000
June 30, 2001 $ 3,750,000
September 30, 2001 $ 3,750,000
-----------
TOTAL $60,000,000
(f) Section 2.06(a)(i) of the Existing Credit Agreement is hereby
amended to substitute "December 28, 1997" in place of "December 31, 1997".
(g) Section 2.06(g)(ii) of the Existing Credit Agreement is hereby
amended to substitute "$12,500,000" in place of "$5,000,000".
(h) Section 2.13 of the Existing Credit Agreement is hereby amended
(i) to substitute "shortened to the immediately preceding" in place of "extended
to the next succeeding" and (ii) to delete the parenthetical in the penultimate
sentence therein.
(i) Section 7.08(d) of the Existing Credit Agreement is hereby
amended to substitute "as of the last Sunday in December" in place of "for the
month ending December 31".
(j) Section 7.08(e)(i) of the Existing Credit Agreement is hereby
amended to substitute "each Fiscal Quarter and each interim calendar month" in
place of "each calendar month".
(k) Section 8.01(i)(ii) of the Existing Credit Agreement is hereby
amended to substitute "December 28, 1997" in place of "December 31, 1997".
(l) Section 8.13(e) of the Existing Credit Agreement is hereby
amended and restated to read as follows: "(e) during the Fiscal Years ending on
2
<PAGE>
December 31, 1996 and on December 28, 1997, no Management Fees may be paid
during either such Fiscal Year;".
(m) Section 8.13(f) of the Existing Credit Agreement is hereby
amended and restated to read as follows: "(f) during the Fiscal Year ending on
December 27, 1998 and during each Fiscal Year ending thereafter, no more than
(i) for the Fiscal Years ending on December 27, 1998 and on December 26, 1999,
$750,000 and (ii) for each Fiscal Year ending thereafter, $1,750,000, of
Management Fees may be paid (including amounts accrued and unpaid for prior
Fiscal Years) during each such Fiscal Year;".
(n) Section 8.19 of the Existing Credit Agreement is hereby amended
and restated to read as follows:
Section 8.19. Fiscal Periods. Permit (a) any fiscal year of the
Consolidated Entities to end on a day other then the last Sunday in
December or (b) any fiscal quarter of the Consolidated Entities to be less
than or greater than 13 calendar weeks (other than the fiscal quarter
ending on December 31, 2000, which shall be 14 calendar weeks).
(o) Article 9 of the Existing Credit Agreement is hereby amended and
restated to read as follows:
"ARTICLE 9. FINANCIAL COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of Credit shall
remain outstanding or any Lender shall have any Commitment:
Section 9.01. Interest Coverage Ratio. The Borrower shall maintain, as
determined at the end of each Fiscal Quarter, an Interest Coverage Ratio of not
less than the applicable ratio set forth in the following table:
IF SUCH FISCAL QUARTER ENDS APPLICABLE RATIO
on or after December 31, 1996 and
before September 28, 1997 2.00 to 1.00
on September 28, 1997 2.20 to 1.00
on December 28, 1997 2.50 to 1.00
after December 28, 1997 and
on or before September 27, 1998 2.75 to 1.00
after September 27, 1998 and
on or before September 26, 1999 3.50 to 1.00
after September 26, 1999 4.00 to 1.00
Section 9.02. Fixed Charge Coverage Ratio. The Borrower shall maintain, as
determined at the end of each Fiscal Quarter, a Fixed Charge Coverage Ratio of
not less than the applicable ratio set forth in the following table:
IF SUCH FISCAL QUARTER ENDS APPLICABLE RATIO
on or after December 31, 1996
and on or before September 28, 1997 1.10 to 1.00
after September 28, 1997 and
on or before September 24, 2000 1.15 to 1.00
after September 24, 2000 1.10 to 1.00
3
<PAGE>
Section 9.03. Leverage Ratio. The Borrower shall maintain, as determined
at the end of each Fiscal Quarter, a Leverage Ratio of not greater than the
applicable ratio set forth in the following table:
IF SUCH FISCAL QUARTER ENDS APPLICABLE RATIO
on December 31, 1996 and
on March 30, 1997 5.00 to 1.00
on June 29, 1997 4.80 to 1.00
on September 28, 1997 4.40 to 1.00
after September 28, 1997 and
on or before September 27, 1998 3.70 to 1.00
after September 27, 1998 and
on or before September 26, 1999 2.50 to 1.00
after September 26, 1999 and on or before
September 24, 2000 2.25 to 1.00
after September 24, 2000 2.00 to 1.00
Section 9.04. Minimum Net Worth. The Borrower shall maintain at all
times Net Worth of not less than the applicable amount set forth in the
following table:
IF SUCH TIME IS APPLICABLE AMOUNT
on or after December 31, 1996
and before September 28, 1997 $26,500,000
on or after September 28, 1997
and before December 28, 1997 $28,000,000
on or after December 28, 1997
and before December 27, 1998 $29,000,000
on or after December 27, 1998
and before December 26, 1999 $33,000,000
on or after December 26, 1999
and before December 31, 2000 $40,000,000
on or after December 31, 2000 $50,000,000
Section 9.05. Current Ratio. The Borrower shall maintain at all times a
Current Ratio of not less than the applicable ratio set forth in the following
table:
IF SUCH TIME IS APPLICABLE RATIO
on or after December 31, 1996
and before June 29, 1997 1.05 to 1.00
on or after June 29, 1997 and
before September 28, 1997 1.00 to 1.00
on or after September 28, 1997
and before December 28, 1997 .90 to 1.00
on or after December 28, 1997
and before December 27, 1998 .70 to 1.00
on or after December 27, 1998 1.05 to 1.00"
4
<PAGE>
(p) Section 10.03 of the Existing Credit Agreement is hereby amended
to substitute "the last Sunday in December" in place of "December 31".
Section 1.02. Amendments to Affiliate Subordination Agreement. Each of the
Borrower and the Guarantor and, subject to the satisfaction of the conditions
set forth in Section 3, the Agent and the Lenders hereby consents and agrees to
the amendments to the Affiliate Subordination Agreement set forth below:
(a) The definition of "Subordinated Obligations" is hereby amended
and restated to read as follows:
"Subordinated Obligations" means all obligations from time to time
owing by the Borrower to the Guarantor in respect of Management Fees or in
respect of the Intercompany Note.
(b) Section 3.02 of the Affiliate Subordination Agreement is hereby
amended to insert immediately prior to the end of the first sentence of such
Section: "; provided that the Guarantor may receive payments from the Borrower
under the Intercompany Note so long as such Default or Event of Default does not
arise from noncompliance with Section 2.01(a) or Section 2.06(f) of the Credit
Agreement."
ARTICLE 2.REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and the Guarantor hereby represents and warrants that
as of the Effective Date:
Section 2.01. Existing Representations and Warranties. Each of the
representations and warranties contained in Article 6 of the Amended Credit
Agreement and in each of the other Amended Facility Documents are true and
correct in all material respects (provided that any representations and
warranties which speak to a specific date shall remain true and correct in all
material respects as of such specific date).
Section 2.02. No Defaults. Except for such Defaults and Events of Default
specifically waived by the Agent and the Lenders pursuant to Article 4 of this
Agreement, no event has occurred and no condition exists which would constitute
a Default or an Event of Default under the Facility Documents, and no event has
occurred and no condition exists which would constitute a Default or an Event of
Default under the Amended Facility Documents.
Section 2.03. Corporate Power and Authority; No Conflicts. The execution,
delivery and performance by each of the Borrower and the Guarantor of the
Amended Facility Documents to which it is a party do not and will not: (a)
require any consent or approval of the Guarantor's stockholders; (b) contravene
its charter or by-laws; (c) violate any provision of, or require any filing
(other than the filing of the financing statements and assignments required
pursuant to the terms of the Security Documents), registration, consent or
approval under, any law, rule or regulation (including, without limitation,
Regulations G, T, U and X of the Federal Reserve Board) or any order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Guarantor or any of its Subsidiaries; (d) result in a
breach of or constitute a default or require any consent under any indenture or
loan or credit agreement or any other agreement, lease or instrument to which
the Guarantor or any of its Subsidiaries is a party or by which it or its
Properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Amended Facility
Documents), upon or with respect to any of the Properties now owned or hereafter
acquired by the Guarantor or any of its Subsidiaries; or (f) cause the Guarantor
or any of its Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument.
Section 2.04. Legally Enforceable Agreements. Each Amended Facility
Document to which the Borrower or the Guarantor is a party is, or when delivered
5
<PAGE>
under this Agreement will be, a legal, valid and binding obligation of such
Person enforceable against such Person in accordance with its terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
Section 2.05. Financial Statements.
(a) The balance sheet of the Borrower as at December 31, 1995, and
the related income statement and statement of cash flows and changes in
stockholders' equity of the Borrower, for the Fiscal Year then ended, and the
accompanying footnotes, together with the opinion thereon of Deloitte and Touche
LLP, independent certified public accountants, and the unaudited interim balance
sheet of the Borrower as at September 30, 1996 and the related unaudited income
statement and statement of cash flows and changes in stockholders' equity of the
Borrower for the nine month period then ended, copies of which have been
furnished to each of the Lenders, are complete and correct in all material
respects and fairly present the financial condition of the Borrower at such
dates and the results of the operations of the Borrower for the periods covered
by such statements, all in accordance with GAAP (subject, in the case of the
aforementioned interim financial statements, to year-end adjustments and that no
footnotes are provided) consistently applied. Except as set forth on the balance
sheet of the Borrower as at September 30, 1996, there are no liabilities of the
Borrower, fixed or contingent, which are material but are not reflected on such
financial statements, or in the notes thereto and which would be required to be
recorded on such financial statements or notes in accordance with GAAP, other
than liabilities arising in the ordinary course of business since September 30,
1996. No information, exhibit or report furnished by the Borrower, the Guarantor
or any Affiliate to the Lenders in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material face or any fact necessary to make the statements contained therein not
materially misleading. Since December 31, 1995, there has been no change (other
than events affecting the general economy of the United States or affecting all
participants in the beverage industry) which could reasonably be expected to
have a Material Adverse Effect.
(b) The consolidated balance sheet of the Guarantor and its
Subsidiaries as at December 31, 1995, and the related consolidated income
statement and statement of cash flows and changes in stockholders' equity of the
Guarantor and its Subsidiaries, for the Fiscal Year then ended, and the
accompanying footnotes, together with the opinion thereon of Deloitte and Touche
LLP, independent certified public accountants, and the unaudited interim balance
sheet of the Guarantor and its Subsidiaries as at September 30, 1996 and the
related unaudited income statement and statement of cash flows and changes in
stockholders' equity of the Guarantor and its Subsidiaries for the nine month
period then ended, copies of which have been furnished to each of the Lenders,
are complete and correct in all material respects and fairly present the
financial condition of the Guarantor and its Subsidiaries at such dates and the
results of the operations of the Guarantor and its Subsidiaries for the periods
covered by such statements, all in accordance with GAAP (subject, in the case of
the aforementioned interim financial statements, to year-end adjustments and
that no footnotes are provided) consistently applied. Except as set forth on the
consolidated balance sheet of the Guarantor and its Subsidiaries as at September
30, 1996, there are no liabilities of the Guarantor and its Subsidiaries, fixed
or contingent, which are individually in excess of $20,000,000 but are not
reflected on such financial statements, or in the notes thereto and which would
be required to be recorded on such financial statements or notes in accordance
with GAAP, other than liabilities arising in the ordinary course of business
since September 30, 1996. There is no fact or facts actually known to the
Guarantor, other than (i) conditions affecting the United States economy
generally, (ii) trends affecting generally the industries in which the
Guarantor's Subsidiaries do business and (iii) potential non-cash charges
associated with the possible sale by Arby's, Inc. of all of its restaurants and
assumption by the buyer of indebtedness related thereto, that the Guarantor has
6
<PAGE>
not disclosed to the Lenders that materially adversely affects or, so far as the
Guarantor can now reasonably foresee, will materially adversely affect, the
condition of the business, Properties or assets of the Guarantor and its
Subsidiaries, taken as a whole.
ARTICLE 3.CONDITIONS PRECEDENT.
The consent and the agreement of the Agent and the Lenders to the
amendments set forth in Article 1, the waivers set forth in Article 4 and the
consents set forth in Article 5 are subject to the condition precedent that the
Agent shall have received on or before February 14, 1997 (the "Effective Date")
each of the following, in form and substance satisfactory to the Agent and its
counsel:
(a) counterparts of this Agreement executed by each of the
Borrower, the Guarantor, the Lenders and the Agent;
(b) a legal opinion of the Vice President and Associate General
Counsel of the Guarantor, in substantially the form of EXHIBIT A; and
(c) the receipt by the Agent for the account of the Lenders of
sufficient proceeds under the Intercompany Note to be applied to the repayment
of the Revolving Credit Loans in order that the Borrower will be in compliance
with Section 2.01(a) and Section 2.06(f) as of January 31, 1997.
ARTICLE 4.CERTAIN WAIVERS.
Subject to the satisfaction of the conditions set forth in Article 3
hereof, each of the Agent and the Lenders hereby waive any Default or Event of
Default arising from noncompliance by the Borrower with Section 2.01(a) or
Section 2.06(f) of the Existing Credit Agreement prior to the Effective Date.
Except for the foregoing waivers, the terms of this Agreement shall not operate
as a waiver by the Agent or the Lenders, or otherwise prejudice the rights,
remedies or powers of the Agent or the Lenders, under the Amended Facility
Documents or under applicable law. Except as expressly provided herein: (x) no
terms and provisions of the Facility Documents are modified or changed by this
Agreement; and (y) the terms and provisions of the Facility Documents shall
continue in full force and effect.
ARTICLE 5.CERTAIN CONSENTS.
Subject to the satisfaction of the conditions set forth in Article 3
hereof, notwithstanding Section 8.01 and Section 8.08 of the Existing Credit
Agreement, each of the Agent and the Lenders consents to the incurrence of Debt
by the Borrower in favor of the Guarantor under the Intercompany Note up to an
aggregate principal amount of $3,500,000 provided that such Debt is subordinated
to the Obligations on terms and conditions set forth in the Affiliate
Subordination Agreement.
ARTICLE 6.CERTAIN COVENANTS.
The Guarantor shall, promptly upon any Person becoming a direct or
indirect beneficial owner of at least 50.1%, or, in the case of any of its
Subsidiaries, any, of the outstanding equity securities of the Borrower, cause
such Person (a) to guarantee the Obligations, pursuant to a Guaranty
substantially in the form of the Unconditional Guaranty, (b) to secure such
Guaranty by pledging all of the equity securities in the Borrower held by such
Person, pursuant to a pledge agreement in form and substance reasonably
satisfactory to the Agent and (c) deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as the Agent
shall have reasonably requested.
ARTICLE 7.MISCELLANEOUS.
Section 7.01. Defined Terms. The terms used herein and not defined herein
shall have the meanings assigned to such terms in the Amended Credit Agreement.
7
<PAGE>
Section 7.02. Reaffirmation. Each of the Borrower and the Guarantor
acknowledges that the Liens granted to the Agent under the Security Documents in
and to the Collateral secures all of the Obligations under the Amended Credit
Agreement and the other Amended Facility Documents. Each of the Borrower and the
Guarantor further acknowledges and reaffirms all of its other respective
obligations and duties under the Amended Facility Documents to which it is a
party.
Section 7.03. Amendments and Waivers. Any provision of this Agreement may
be amended or modified only by an instrument in writing signed by the Borrower,
the Guarantor, the Agent and the Required Lenders, or by the Borrower, the
Guarantor and the Agent acting with the consent of the Required Lenders and any
provision of this Agreement may be waived by the Required Lenders or by the
Agent acting with the consent of the Required Lenders.
Section 7.04. Expenses. The Borrower shall reimburse the Agent on demand
for all reasonable out-of-pocket costs, expenses and charges (including, without
limitation, reasonable fees and charges of external legal counsel for the Agent)
in connection with the preparation of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
other Amended Facility Document and any other documents prepared in connection
herewith or therewith. The Borrower shall pay to the Agent for the account of
the Lenders an amendment fee equal to $100,000 to be split among the Banks in
accordance with the pro rata share of the principal amount of the Obligations
held by them.
Section 7.05. Notices. Unless the party to be notified otherwise notifies
the other party in writing as provided in this Section, and except as otherwise
provided in this Agreement, notices shall be given to the Agent in writing, by
telex, telecopy or other writing or by telephone, confirmed by telex, telecopy
or other writing, and to the Lenders, the Borrower and the Guarantor by ordinary
mail, hand delivery, overnight courier or telecopier addressed to such party at
its address on the signature page of this Agreement. Notices shall be effective:
(a) if given by mail, 72 hours after deposit in the mails with first class
postage prepaid, addressed as aforesaid; and (b) if given by telecopier, when
confirmation of delivery of the telecopy to the telecopier number as aforesaid
is transmitted; provided that notices to the Agent and the Lenders shall be
effective upon receipt.
Section 7.06. Severability. The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 7.07. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 7.08. Integration. The Amended Facility Documents set forth the
entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
SECTION 7.09. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MISTIC BRANDS, INC.
By:/s/Ernest J. Cavallo
Name: Ernest J. Cavallo
Title: President and COO
Address for Notices:
Mistic Brands, Inc.
709 Westchester Avenue
White Plains, NY 10604
Attention: Chief Financial Officer
Telecopier No.: (914) 686-2287
With a copy to:
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Executive Vice President
and General Counsel
Telecopier No.: (212) 451-3216
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
TRIARC COMPANIES, INC.
By:/s/John L. Cohlan
Name: John L. Cohlan
Title: Senior Vice President
Address for Notices:
280 Park Avenue
New York, New York 10017
Attention: Executive Vice President
and General Counsel
Telecopier No.: (212) 451-3216
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
AGENT:
THE CHASE MANHATTAN BANK
By:/s/Jon Goplerud
Name: Jon Goplerud
Title: Vice President
Address for Notices:
Loan & Agency Services Dept.
One Chase Manhattan Plaza
8th Floor
New York, NY 10081
Attention: Andrea Grullen
Telecopier No.: (212) 552-5650
with a copy to:
106 Corporate Park Drive
White Plains, NY 10604
Attention: Jon S. Goplerud
Telecopier No.: (914) 993-7938
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
THE CHASE MANHATTAN BANK
By:/s/Jon Goplerud
Name: Jon Goplerud
Title: Vice President
Lending Office and Address for
Notices:
106 Corporate Park Drive
White Plains, NY 10604
Attention: Jon S. Goplerud
Telecopier No.: (914) 993-7938
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
BARCLAYS BANK PLC
By:
Name:
Title:
Lending Office and Address for Notices:
Barclays-BZW Division
222 Broadway
New York, NY 10038
Attention: Arthur Strassle
Telecopier No.: (212) 412-2441
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
FIRST SOURCE FINANCIAL LLP
BY FIRST SOURCE FINANCIAL, INC., ITS
MANAGER
By:/s/James Wilson
Name: James Wilson
Title: Senior Vice President
Lending Office and Address for
Notices:
2850 West Golf Road
5th Floor
Rolling Meadows, IL 60008
Attention: Bob Baker
Telecopier No.: (847) 734-7910
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
HARRIS TRUST AND SAVINGS BANK
By:/s/R. Michael Newton
Name: R. Michael Newton
Title: Vice President
Lending Office and Address for
Notices:
11 West Monroe Street
Chicago, IL 60690
Attention: R. Michael Newton
Telecopier No.: (312) 293-4586
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:/s/Joanna M. Solowski
Name: Joanna M. Solowski
Title: Vice President
By:/s/Barbara A. Hyland
Name: Barbara A. Hyland
Title: Senior Vice President
Lending Office and Address for Notices:
245 Park Avenue
New York, NY 10167-0062
Attention: Corporate Services
Telecopier No.: (212) 916-7801
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By:/s/Jeffrey W. Maillet
Name: Jeffrey W. Maillet
Title: Senior Vice President and
Director
Lending Office and Address for
Notices:
One Parkview Place
Oakbrook Terrace, IL 60161
Attention: Jeffrey Maillet
Telecopier No.: (630) 684-6740
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
LENDERS:
CORESTATES BANK, N.A.
By:/s/John T. Haurin
Name: John T. Haurin
Title: Vice President
Lending Office and Address for
Notices:
P.O. Box 7616
Philadelphia, PA 19010
Attention: John T. Haurin
Telecopier No.: (215) 786-8523
A:\3RDAMEND.AGR
[SIGNATURE PAGE TO THIRD AMENDMENT AGREEMENT]
<PAGE>
