TAX SHARING AGREEMENT
TAX SHARING AGREEMENT (the "Agreement"), made as of the 25th day of
February, 1999 by and among Triarc Companies, Inc., a Delaware corporation
("TRI"), Triarc Consumer Products Group, LLC ("TCPG") a Delaware limited
liability company, and, Triarc Beverage Holdings Corp. ("TBHC"), Snapple
Beverage Corp. ("Snapple"), Mistic Brands, Inc. ("Mistic"), Cable Car Beverage
Corp. ("Cable Car"), RC/Arby's Corp. ("RCAC"), Royal Crown Company, Inc.
("RCCI"), Arby's, Inc. ("Arby's"), each a Delaware corporation and ARHC, LLC
("ARHC"), a Delaware limited liability company..
TRI is the common parent of an affiliated group (within the meaning of
Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code")) of
corporations (collectively the "TRI Group") and files consolidated federal
income tax returns on the basis of a taxable year consisting of 52 or 53 weeks
ending on the Sunday closest to December 31st on behalf of itself and all other
members of the TRI Group.
TRI and TBHC are parties to a tax sharing agreement dated as of May 22,
1997, as amended as of August 15, 1998, that includes Snapple, Mistic and Cable
Car. TRI and RCAC are parties to a tax sharing agreement dated as of April 23,
1993, as amended as of October 3, 1994. (Collectively, the tax sharing
agreements are referred to as the "Prior Agreements".) TRI and ARHC, as
successor by merger to Arby's Restaurant Holding Company, Arby's Restaurant
Development Corporation and Arby's Restaurant Operations Company, each a
Delaware corporation, are parties to a letter agreement dated April 30, 1997
(the "Letter Agreement").
TCPG is a limited liability company that is treated as a division of TRI
for federal income tax purposes.
Each of TRI and TCPG desires to provide, from and after the date hereof
(the "Effective Date"), for payment on behalf of TCPG (or any successor thereto)
and any direct or indirect
subsidiaries of TCPG that may now or after the Effective Date be included in the
TRI Group (the "TCPG Subsidiaries") (hereinafter, TCPG and the TCPG Subsidiaries
(if any) are sometimes collectively referred to as the "TCPG Group") to TRI of
the amounts payable by the TCPG Group in respect of federal income taxes and of
certain state and local taxes and for payments by TRI to TCPG as provided
herein, determined in each case as if TCPG was a corporation.
Accordingly, the parties to this Agreement agree as follows:
1. Treatment of TCPG/Agreement to Join in Consolidated
Returns
1.1 For purposes of this Agreement, TCPG shall be treated as a separate,
corporate member of the TRI Group.
1.2 TCPG agrees to cause the other members of the TCPG Group to join with
TRI in any consolidated federal income tax return ("Consolidated Return") for
any taxable year for which TRI files a Consolidated Return that includes such
other member of the TCPG Group.
1.3 TCPG, on behalf of itself and the other members of the TCPG Group,
hereby irrevocably designates TRI as its agent for the purpose of taking any and
all actions necessary or incidental to the filing of Consolidated Returns. TCPG
agrees to furnish, and to cause the TCPG Subsidiaries to furnish, TRI with any
and all information requested by TRI in order to carry out the provisions of
this Agreement; to cooperate, and to cause the TCPG Subsidiaries to cooperate,
with TRI in filing any return or consent contemplated by this Agreement; to take
such actions, and to cause the TCPG Subsidiaries to take such actions, as TRI
may request, including, but not limited to, the filing of all elections and the
filing of requests for the extension of time within which to file tax returns;
and to cooperate, and to cause the TCPG Subsidiaries to cooperate, in connection
with any refund claim.
1.4 In each taxable year ending after the Effective Date, TCPG shall make
or cause any of
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the TCPG Subsidiaries to make payment to TRI of an amount in respect of federal
income taxes of the TCPG Group for such taxable year, determined in accordance
with Section 2 hereof, and TRI shall have the sole responsibility for making any
required payments to the Internal Revenue Service (the "Service") in
satisfaction of the consolidated federal income tax liability of the TCPG Group
for such year. For each quarter of each fiscal year ending after the Effective
Date, TCPG shall make or cause any of the TCPG Subsidiaries to make payment to
TRI of a portion of the amount required to be paid pursuant to Section 2 hereof
equal to the amount of the installment payment of estimated income tax TCPG
would be required to make on behalf of the TCPG Group to the Service for such
quarter under Section 6655 of the Code no later than five business days prior to
the date upon which TCPG would be required to make such payment to the Service.
Promptly following the close of each fiscal year ending after the Effective
Date, TCPG shall pay or cause any of the Subsidiaries to pay to TRI the excess,
if any, of the amount payable with respect to such taxable year, determined in
accordance with Section 2 hereof, over the aggregate of all amounts previously
paid pursuant to this Section 1.4 by or on behalf of TCPG to TRI with respect to
such taxable year. Each member of the TCPG Group shall be jointly and severally
liable for any payments due TRI by TCPG under this Agreement. If TRI fails to
file a Consolidated Return that includes the TCPG Group for any taxable year for
which TCPG has made or caused to be made a payment or payments pursuant to this
Section 1.3, TRI shall promptly refund such payment or payments.
1.5 The amount of any overpayment or underpayment made pursuant to Section
1.4 hereof shall be credited against or added to, as the case may be, the amount
otherwise required to be paid for the fiscal quarter within which the amount of
such overpayment or underpayment first becomes reasonably ascertainable;
provided, however, that, upon TCPG providing to TRI all information required by
the Service (including supporting schedules) after the close of any taxable year
but within the period described in section 6425(a)(1) of the Code, TRI shall
repay to or on behalf of TCPG, within the period described in section 6425(b)(1)
of the Code, the amount of any net remaining overpayment of consolidated tax
liability of the TCPG Group for such year.
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1.6 Except for the payments required under this Agreement, TRI agrees to
indemnify and hold harmless the TCPG Group against and from any claims of
liability for federal income tax, interest thereon, and penalties with respect
thereto asserted by the Service, arising from any taxable period for which this
Agreement is in effect, provided, however, that no such indemnification shall be
made to the extent that TCPG has failed to make or cause to be made any payments
required to be made to TRI in respect of such liability under the provision of
this Agreement.
1.7 TCPG shall cooperate, and cause the TCPG Subsidiaries to cooperate,
fully with TRI in any audit or any proceeding relating to any Consolidated
Return and shall pay an appropriate share of the expenses of any such audit or
other proceeding. TRI shall have sole control over and discretion as to the
undertaking, conduct, settlement or other disposition of any tax controversy
arising out of any Consolidated Return filed by TRI.
2. Computation of Tax Liability of the TCPG Group
For the first taxable year ending after the Effective Date, and for each
subsequent taxable year of the TRI Group for which this Agreement remains in
effect, TCPG shall pay or cause to be paid to TRI (in the manner provided in
Section 1.4 hereof), on behalf of itself and any members of the TCPG Group, an
amount equal to the federal income tax liability that would have been payable by
the members of the TCPG Group for such year, determined as if TCPG had filed a
separate, consolidated federal income tax return for such year and all prior
years for which the Agreement was in effect on behalf of itself and all TCPG
Subsidiaries that were includible corporations (within the meaning of section
1504(a)(1) of the Code) in the TCPG Group for such year, computed in accordance
with the actual elections, conventions and other determinations with respect to
the TCPG Group reflected in the Consolidated Return filed by TRI; provided,
however, that (i) any item of income or loss of a member of the TCPG Group that
is treated as deferred on the Consolidated Return filed by TRI (e.g., gain or
loss on an intercompany transaction between a member of the TCPG Group and TRI
that is deferred pursuant to section 1.1502-13 or 1.1502-13T of the regulations)
shall be taken into account
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in computing taxable income of the TCPG Group for purposes of this Agreement
only at such time and in such amount as such item is actually taken into account
on the Consolidated Return filed by TRI; and (ii) the following items shall be
disregarded: (a) losses, credits and overpayments of any member of the TCPG
Group carried over from 1998 or prior years; (b) deductions with respect to the
write-off of call premiums and debt issuance expenses on indebtedness of members
of the TCPG Group that was outstanding prior to the Effective Date; (c)
deductions with respect the exercise or payment in cancellation of stock options
of TRI; and (d) any losses with respect to any investment made prior to the
Effective Date in Chesapeake Insurance Company Limited by a member of the TCPG
Group. If TCPG shall be the sole member of the TCPG Group for any year (or
portion thereof), the payment required to be made by or on behalf of TCPG
pursuant to this Section 2 shall be determined as hereinbefore provided in this
Section, but as if TCPG had filed a separate income tax return for such year (or
portion thereof). Any amount payable by or on behalf of TCPG pursuant to this
Section 2 shall be allocated among the members of the TCPG Group as directed by
TCPG. Payments made by TCPG or on behalf of TCPG by the TCPG Subsidiaries
pursuant to this Section and Section 1.3 above shall be in lieu of any other
payment by the TCPG Group (or any member thereof) on account of its share, if
any, of the consolidated federal income tax liability of the TRI Group for such
taxable year. Except as hereinbefore provided with respect to deferred
transaction, payments made for any taxable year by TCPG pursuant to this Section
2 shall be made without regard to the actual consolidated federal income tax
liability, if any, of the TRI Group for such taxable year.
3. Adjustments
Any adjustment of income, deduction, or credit that results after the
taxable year in question by reason of any carryback, amended return, claim for
refund, or audit shall be given effect by redetermining amounts payable and
reimbursable hereunder for such taxable year (and other taxable years, where
appropriate) for which the Agreement is in effect as if such adjustment had been
part of the original determination hereunder, with interest payable (by TCPG or
TRI, as the case may be) in the amounts provided in section 6621 of the Code and
penalties thereon payable only to the
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extent that penalties are actually paid by TRI to any taxing authority with
respect to such adjustment. Except with respect to any required adjustment in
accordance with Sections 1.3, 1.4, 2 and 3 hereof, any increases in the
consolidated federal income tax liability (including interest and penalties) of
the TRI Group shall be the sole responsibility of TRI and any refunds of
consolidated federal income taxes previously paid shall be the sole property of
TRI.
4. Payment for Tax Benefits of Members
The TCPG Group shall be entitled to a refund of federal income taxes
previously paid to TRI pursuant to this Agreement computed in the manner
described in Section 2 hereof as a result of any consolidated net operating
losses, net capital losses or tax credits claimed by the TCPG Group for any
taxable year for which this Agreement is in effect (provided such losses or
credits are not in fact utilized in a taxable year in which this Agreement is
not in effect), determined as if TCPG had filed a separate consolidated federal
income tax return for such year on behalf of itself and all the TCPG
Subsidiaries that were includible corporations in the manner described in
Section 2 above (any such loss or credit being referred to herein as a "TCPG
Group Loss" and any such entitlement to a refund being referred to herein as a
"TCPG Group Benefit"), that would otherwise have been available to the TCPG
Group by reason of a carryback of such TCPG Group Loss, determined in accordance
with the actual election under Section 172 (b) (3) of the Code reflected in the
Consolidated Return filed by TRI, provided TCPG furnishes to TRI all information
required by the Service (including supporting schedules) within the period
described in section 6411(a) of the Code, and TRI shall pay the amount of such
TCPG Group Benefit to TCPG, within the period described in section 6411(b) of
the Code. If TCPG shall be the sole member of the TCPG Group for any year, the
payment of the TCPG Group Benefit to TCPG pursuant to this Section 4 shall be
determined as hereinbefore provided in this Section, but as if TCPG had filed a
separate income tax return for such year. The portion of such TCPG Group Loss
(if any) that is not carried back shall be carried forward to the extent
otherwise permitted by the Code in computing the liability of the TCPG Group
pursuant to Section 2 above.
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5. State Taxes
5.1 TCPG agrees at the request of TRI to join, and to cause the TCPG
Subsidiaries to join, TRI or any direct or indirect subsidiary of TRI in any
consolidated or combined state or local income or franchise tax return
("Combined Return") for any taxable year for which TRI or any direct or indirect
subsidiary of TRI files a Combined Return that may include TCPG or any of the
TCPG Subsidiaries.
5.2 If, at any time from and after the Effective Date, the liability for
any state or local income or franchise taxes of (i) TCPG or any of the TCPG
Subsidiaries and (ii) TRI or any other direct or indirect subsidiary of TRI is
determined on a consolidated or combined basis, this Agreement shall be applied
in like manner to all matters relating to such taxes; provided, however, that
the liability of the TCPG Group with respect to a Combined Return shall be at
least equal to any increase in taxes resulting from the inclusion of TCPG or any
of the TCPG Subsidiaries in such Combined Return.
5.3 In the event that, as of any date, any party would cease to be
described in Section 5.2 of this Agreement, Section 9 of this Agreement shall be
applied, as of such date, with respect to such party in like manner to all
matters relating to such return and all previous comparable returns.
6. Prior Agreements/Letter Agreement
The terms of the Prior Agreements shall continue to apply to determine
amounts to be paid by, or to TRI, TBHC and RCAC after the Effective Date of this
Agreement with respect to taxable periods ending prior to the Effective Date of
this Agreement, provided, however, that the provisos in the first sentence of
Section 2 of this Agreement shall apply. From and after the Repayment Date, TRI
shall have no obligations of any kind with respect to the Letter Agreement
including, without limitation, any such obligations incurred by TRI prior to
such Repayment Date.
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7. Disputes
In the event of a disagreement between TRI and TCPG with respect to any
determination required to be made pursuant to this Agreement, the determination
of the Chief Financial Officer of TRI, in the absence of manifest error, shall
be conclusive.
8. Effective Date
This Agreement shall be effective for the taxable years of TRI, TCPG and
the TCPG Subsidiaries ending after the Effective Date in which TRI files a
Consolidated Return that includes TCPG, unless terminated by mutual agreement of
the parties and the first year shall commence January 4, 1999. Notwithstanding
the foregoing, this Agreement shall not be binding with respect to RCAC and its
subsidiaries, and RCAC and its subsidiaries shall have no obligations hereunder,
until the date of the repayment of the RCAC 9 3/4% Senior Secured Notes due
2000 (the "Repayment Date").
9. Termination
In the event that any party ceases to be a member of the TCPG Group or of
the TRI Group (the "Former Member") (the date of such cessation being the
"Termination Date"):
(a) the rights and obligations of the Former Member under this
Agreement with respect to Federal income tax matters for all tax periods or
portions thereof subsequent to the Termination Date shall terminate; and
(b) except as otherwise agreed to by TRI, the rights and obligations
of the Former Member with respect to Federal income tax matters for all tax
periods or portions thereof through the Termination Date shall continue in full
force and effect; provided that the obligations of the Former Member to make
payments or the rights of such Former Member to receive refunds shall be limited
to payments or refunds attributable to such Former Member.
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10. Captions
All Section captions contained in this Agreement are for convenience only
and shall not be deemed a part of this Agreement.
11. Counterparts
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
12. Amendment; Waiver
This Agreement may be amended, modified, superseded, cancelled or extended,
and the provisions hereof may be waived, only by a written instrument signed by
the parties or, in the case of a waiver, by the party waiving compliance.
13. Governing Law
This Agreement shall be governed by the laws of the State of New York,
without regard to the conflict of laws rules thereof.
14. Successors and Assigns
This Agreement shall be binding upon, and shall inure to all the benefits
of, the parties hereto and their respective successors and assigns.
15. Notices
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Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or overnight express
mail, postage prepaid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if mailed
by overnight mail, the day after the date of deposit with a reputable courier
service, or if mailed by non-overnight certified or registered mail, five days
after the date of deposit in the United States mails, as follows:
(i) if to TRI to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President
and General Counsel
Facsimile: (000) 000-0000
(ii) if to TCPG to:
Triarc Consumer Products Group, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
IN WITNESS WHEREOF, TRI and TCPG have executed this Agreement as of
the
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day and year first above written.
TRIARC COMPANIES, INC. TRIARC CONSUMER PRODUCTS
GROUP, LLC
By: /s/ XXXX X. XXXXXX, XX. By: /s/ XXXXXXX X. XXXXXXXX
................................... ....................................
Name: Xxxx X. Xxxxxx, Xx. Name: Xxxxxxx X. XxXxxxxx
Title: Executive Vice President Title: Senior Vice President
--Taxes
SNAPPLE BEVERAGE CORP. MISTIC BRANDS, INC.
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXXXX X. XXXXXXXX
................................... ....................................
Name: Xxxxxxx X. XxXxxxxx Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President--Taxes Title: Senior Vice President--Taxes
TRIARC BEVERAGE HOLDINGS CABLE CAR BEVERAGE
CORP. CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXXXX X. XXXXXXXX
................................... ....................................
Name: Xxxxxxx X. XxXxxxxx Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President--Taxes Title: Senior Vice President--Taxes
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RC/ARBY'S CORPORATION ROYAL CROWN COMPANY, INC.
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXXXX
..................................... ....................................
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President, General Title: Senior Vice President--Taxes
Counsel and Secretary
ARBY'S, INC. ARHC, LLC
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXX X. XXXXXX, XX.
.................................. ....................................
Name: Xxxxxxx X. XxXxxxxx Name: Xxxx X. Xxxxxx, Xx.
Title: Senior Vice President--Taxes Title: Executive Vice President
and Chief Financial Officer
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