Exhibit 10.1
STOCK PURCHASE AGREEMENT
by and among
RTM, Inc.
RTM Partners, Inc.
and
ALL OF THE STOCKHOLDERS OF
Triarc Restaurants Disposition 1, Inc.
and
Triarc Restaurants Disposition 2, Inc.
and Arby's, Inc.
February 13, 1997
-------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I......................................................
DEFINITIONS................................................
1.1 Definitions.......................................
ARTICLE II.....................................................
PURCHASE AND SALE OF SHARES................................
2.1 Sale and Purchase of Shares.......................
2.2 Delivery of Shares................................
2.3 Consideration to be Paid by Holdco; Allocation....
2.4 Transfer of Assets to Newco; Liabilities Assumed by Newco
2.5 Excluded Liabilities.............................
2.6 Post Closing Adjustments to Purchase Price........
ARTICLE III....................................................
REPRESENTATIONS AND WARRANTIES OF THE SELLERS..............
3.1 Organization and Authority; Formation of Newco....
3.2 Corporate Power and Authority; Due Authorization..
3.3 No Conflict; Consents.............................
3.4 Compliance with Laws..............................
3.5 Inventory.........................................
3.6 Title to Assets...................................
3.7 Litigation; Judgments.............................
3.8 Benefit Plans and ERISA...........................
3.9 Financial Information.............................
3.10 No Broker or Finder..............................
3.11 No Hazardous Substance...........................
3.12 Restaurants......................................
3.13 Owned Store Real Property; Liens.................
3.14 Capitalization...................................
3.15 Ownership of Shares..............................
3.16 Subsidiaries.....................................
3.17 Contracts and Agreements.........................
3.18 Arby's Canada, Inc...............................
3.19 Standards........................................
ARTICLE IV.....................................................
REPRESENTATIONS AND WARRANTIES OF HOLDCO...................
4.1 Organization and Authority........................
4.2 Corporate Power and Authority; Due Authorization..
4.3 No Conflict; Consents.............................
4.4 Litigation; Judgments.............................
4.5 No Broker or Finder...............................
4.6 Capitalization of Holdco..........................
4.7 Arby's Employees..................................
4.8 Purchase for Investment...........................
4.9 No Liquidation....................................
ARTICLE V......................................................
COVENANTS AND AGREEMENTS...................................
5.1 Conduct of Business Prior to Closing..............
5.2 Full Access.......................................
5.3 Payment by the Sellers of the Sellers' Vendors....
5.4 Arby's Fees.......................................
5.5 FFCA Loan Agreements..............................
5.6 New Products and Marketing Programs; Training
Facilities; Multi-Branding........................
5.7 Employee Matters..................................
5.8 Cooperation; Power of Attorney; Operating Agreement
5.9 Purchase of POS Equipment.........................
5.10 Title and Environmental Reports..................
5.11 Tax Covenants....................................
5.12 Licenses.........................................
5.13 Premerger Notification...........................
5.14 Further Assurances...............................
5.15 Replacement of Bonds and Letters of Credit.......
5.16 FFCA Loan Agreements.............................
5.17 Amendment of all Schedules.......................
5.18 Excluded Liabilities.............................
ARTICLE VI.....................................................
CONDITIONS TO HOLDCO'S OBLIGATIONS.........................
6.1 Representations and Warranties True;
Obligations Performed.............................
6.2 Closing Deliveries of the Sellers.................
6.3 No Injunction.....................................
ARTICLE VII....................................................
CONDITIONS TO THE SELLERS' OBLIGATIONS.....................
7.1 Representations and Warranties True;
Obligations Performed.............................
7.2 Closing Deliveries of Holdco and Newco............
7.3 No Injunction.....................................
ARTICLE VIII...................................................
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties of the
Sellers and Arby's After Closing..................
8.2 Obligation of the Sellers and Arby's to Indemnify.
8.3 Obligation of Holdco to Indemnify.................
8.4 Notice and Opportunity to Defend..................
8.5 Limitations on Indemnification....................
8.6 Computation of Losses.............................
8.7 Sole Remedy.......................................
ARTICLE IX.....................................................
MISCELLANEOUS PROVISIONS...................................
9.1 Headings..........................................
9.2 Entire Agreement; Amendment; Waiver...............
9.3 Counterparts......................................
9.4 Binding Effect....................................
9.5 Expenses..........................................
9.6 Nature of Representations.........................
9.7 Notices...........................................
9.8 Governing Law.....................................
9.9 Jurisdiction. ...................................
9.10 Confidentiality..................................
9.11 Public Announcement..............................
9.12 Severability.....................................
9.13 Limitation on Rights of Third Parties............
9.14 Valuation For Tax Reporting Purposes.............
9.15 Cooperation on Taxes.............................
9.16 Termination and Cancellation.....................
9.17 Assignment.......................................
9.18 No Solicitation, Etc.............................
SCHEDULES
1(a) -- Restaurants
1(b) -- Multi-Brand Locations
2 -- Owned Store Real Property
3 -- Capitalized Leases
4 -- Operating Leases and Other Debt Documents
5 -- Equipment Leases
6 -- Xxxxx Cash
7 -- Restaurant Leases
2.5 -- Excluded Liabilities
3.3 -- No Conflict; Consents
3.4 -- Compliance with Laws
3.7 -- Litigation; Judgements
3.11 -- No Hazardous Substance
3.13 -- Owned Store Real Property; Liens
3.16 -- Subsidiaries
3.17 -- Contracts
4.6 -- Capitalization of Holdco
5.5 -- Amendments to FFCA Loan Agreements
5.15 -- Bonds and Letters of Credit
6.2(j) -- Restaurants Requiring Landlord's Estoppel Certificates
and Consents
7.2(m) -- Indemnification of Guarantees
7.2(s) -- Restaurants Requiring Landlord's Estoppel Certificates
and Consents
EXHIBITS
1(a), (b), (c) -- Form of Multi-Brand Licenses
2.3 -- Form of Notes
5.8 -- Form of Operating Agreement
6.2(c) -- Form of Lease Assignment and Assumption Agreements
6.2(e) -- Consents
6.2(f) -- Form of FIRPTA Certificate
6.2(h) -- Form of Special Warranty Xxxx of Sale
6.2(i) -- Form of Special Warranty Deed
6.2(j) -- Form of Landlord's Estoppel Certificates and Consents
6.2(k) -- Form of Quitclaim Deed
6.2(l) -- Form of Equipment Lease Assignment and Assumption Agreement
6.2(m) -- Form of Owner's Affidavit
6.2(r) -- Form of Management Agreement
7.2(j) -- Holdco Consents
7.2(k) -- Form of Option Agreement
7.2(l) -- Form of Guaranty
7.2(n) -- Form of Development Agreement
7.2(s) -- Form of Landlord's Estoppel Certificates and Consents
STOCK PURCHASE AGREEMENT
THIS AGREEMENT dated the ___ day of February, 1997, by and among
Arby's, Inc. ("Arby's"), Arby's Restaurant Development Corporation, a Delaware
corporation ("ARDC"), Arby's Restaurant Holding Company, a Delaware corporation
("ARHC"), Arby's Restaurant Operations Company, a Delaware corporation ("AROC"),
RTM Partners, Inc., a Georgia subchapter S corporation ("Holdco"), and, for
purposes of Paragraph 5.7, 5.11, 9.14 and 9.15 only, RTM, Inc., a Georgia
corporation ("RTM"). Each of ARDC, ARHC and AROC is sometimes herein referred to
as a "Seller" and ARDC, ARHC and AROC are sometimes herein collectively referred
to as the "Sellers."
The Sellers and Arby's own and operate those certain three hundred
fifty-five (355) restaurants operating under the trade name of "Arby's(R),"
described on Schedule 1(a) attached hereto and by this reference incorporated
herein (hereinafter referred to as the "Restaurants").
Prior to the Closing (as hereinafter defined), the Sellers, other than
ARDC, will, subject to the receipt of all requisite consents and approvals,
convey the Restaurants and the shares in the Subsidiaries (as hereinafter
defined) and the Assets that they hold (as hereinafter defined) to Triarc
Restaurants Disposition 1, Inc., a Delaware corporation ("Newco One"), subject
to certain liabilities described herein, in exchange for all of the issued and
outstanding common stock, par value $1.00, per share (the "Newco One Shares"),
of Newco One, and ARDC will, subject to receipt of all requisite consents and
approvals, convey the Restaurants and Assets that it owns to Triarc Restaurants
Disposition 2, Inc., a Delaware corporation ("Newco Two"), subject to certain
liabilities described herein, in exchange for all of the issued and outstanding
common stock, par value $1.00, per share (the "Newco Two Shares" and, together
with the Newco One Shares, the "Shares") of Newco Two. Holdco desires to
purchase , and the Sellers desire to sell, convey, assign and transfer to
Holdco, all of the Shares. Newco One and Newco Two are sometimes hereinafter
collectively referred to as "Newco."
The parties hereto desire to enter into this Agreement for the purpose
of setting forth the terms and conditions upon which the foregoing will be
accomplished.
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this document, the following
definitions shall control and have the meanings as set forth herein:
1. "Accrued Personal Absence Pay" means the aggregate amount of
personal absence pay, including the effect of all employee benefits such as
FICA, that will be earned as of the Closing Date by those Affected Employees (as
hereinafter defined) who are employees of Sellers or Arby's on the Closing Date
and who are hired by RTM or Newco One on the Closing Date.
2. "Accrued Vacation Pay" means the aggregate amount of accrued
vacation pay as of the Closing Date, excluding pay for holidays, but including
the effect of all employee benefits such as FICA, for those Affected Employees
who are employees of Sellers or Arby's on the Closing Date and who are hired by
RTM or Newco One on the Closing Date.
3. "Affiliate" means, with respect to any Person, any other person
controlling, controlled by or under common control with, such Person.
4. "Arby's Headquarters Employee" means any salaried employee of
Arby's (as defined herein) employed at Arby's corporate offices in Ft.
Lauderdale, Florida whose primary duties do not relate to the operation of the
Restaurants.
5. "Assets" means, subject to Paragraph 5.8 hereof, as of the Closing
Date, all of the Sellers' right, title and interest in, and to, all of the
assets located at the Restaurants that are used by the Sellers in the operation
of the Restaurants, whether owned or leased by the Sellers, including, without
limitation, the following: (i) all of the Sellers' right, title, and interest in
and to the Restaurant Leases, whether as lessor or lessee or both; (ii) all
Security Deposits; (iii) all leasehold improvements ("Leasehold Improvements")
owned by the Sellers with respect to the leased Restaurants (if not included in
the Restaurant Leases); (iv) all furniture, fixtures, equipment and personal
property, including, without limitation, cash registers (to the extent not
included under the POS Agreements), owned or leased by the Sellers and used in
the business of and located at the Restaurants (hereinafter the "FF&E"); (v) all
rights of the Sellers as lessor or lessee or both under the Equipment Leases;
(vi) all of the Sellers' right, title and interest in and
to those certain tracts or parcels of land, together with improvements located
thereon, owned by the Sellers and listed on Schedule 2 hereto (hereinafter
referred to as "Owned Store Real Property"); (vii) all of the Seller's right,
title and interest in and to all Assumed Contracts; (viii) all of the Sellers'
rights under the POS Agreements, including, without limitation, the right to use
the software described therein; (ix) all of the Sellers' rights under the ILC
Agreements; (x) the Inventory; (xi) the Xxxxx Cash; (xii) all District PP&E (as
hereinafter defined); and (xiii) the capital stock of the Subsidiaries (as
hereinafter defined). Notwithstanding anything herein to the contrary, except as
expressly set forth in clauses (v), (vi), (viii), (ix) and (x) above or as
otherwise provided in the Licenses, the Sellers are not transferring to Newco,
and the Assets shall not include, the Seller's or Arby's right, title and
interest in or to the right to use the name Arby's(R), P.T. Noodle's(R), T.J.
Cinnamons(R) or ZuZu(R) or any other intellectual or intangible property of the
Sellers or Arby's, or the service business operated by Arby's Canada, Inc., the
rights of Arby's Canada, Inc. as subfranchisor of Store No. 2035 or any rights
to tax refunds belonging to Arby's Canada, Inc.
6. "Assumed Contracts" means all of the contracts to which Newco One or
Newco Two is, or as of the Closing will be, a party or shall have assumed,
including only those contracts required to be assumed under Paragraph 3.17,
and/or listed on Schedule 3.17 hereto to the extent accepted by Newco (which
acceptance shall not be unreasonably withheld), true, correct and complete
copies of which have been or will be delivered to or made available to Holdco by
Sellers prior to the date which is at least ten (10) days prior to the Final
Date.
7. "Assumed Contract Obligations" means only those obligations of
Sellers under the Assumed Contracts which are assumed by Newco One or Newco Two
and arise and accrue from and after the Closing Date, and shall exclude any and
all obligations of Sellers which arise or accrue prior to the Closing Date under
the Assumed Contracts.
8. "Business Day" means any day on which banks in New York, New York
are open for general banking business, other than a Saturday, a Sunday, a legal
holiday or any other day on which banks in New York, New York are required or
authorized by law to close.
9. "Capitalized Leases" means, collectively, each of the leases
listed on Schedule 3 hereto.
10. "Closing" means the sale of the Shares contemplated hereby at the
offices of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other location as shall be
agreed upon by the parties hereto.
11. "Closing Date" means the date two Business Days after the date on
which each of the closing conditions set forth in Articles VI and VII hereof
have been satisfied or waived, or such other date as shall be agreed upon by the
parties hereto.
12. "Debt Documents" means collectively, the Amended and Restated Loan
Agreement dated as of October 13, 1995 by and between FFCA Acquisition
Corporation (n/k/a FFCA Mortgage Corporation) ("FFCA") and ARDC, the Loan
Agreement dated as of October 13, 1995 by and between FFCA and ARHC, the Loan
Agreement dated as of September 5, 1996 by and between FFCA and ARHC, each as
amended and supplemented through the date of this Agreement, and each of the
promissory notes issued thereunder, other than those described on Schedule 2.5
hereto (the "Excluded FFCA Liabilities"), and each of the documents and
agreements entered into in connection therewith (collectively, the "FFCA Loan
Agreements"), each of the Capitalized Leases and each of the operating leases
and other agreements, as all such Debt Documents are listed on Schedule 4
hereto. As used herein "Debt Documents" does not include the agreements related
to the Excluded Liabilities (as herein defined).
13. "District PP&E" means all personal property owned or leased by the
Sellers and utilized by the Sellers' Area Managers or Directors of Operations in
connection with the ownership and/or operation of the Restaurants.
14. "Equipment Leases" means all of the equipment leases, including
the equipment leases between ARDC and AROC, listed on Schedule 5 hereto.
15. "Final Date" is the date immediately preceding the Closing Date.
16. "ILC Liabilities" means the rights and obligations of the Sellers
or Arby's under the Master Lease, signed by Arby's on April 15, 1994, between
Arby's and International Leasing Corporation, and all equipment schedules
thereto (the "ILC Agreements").
17. "Inventory" means all merchantable inventory of food, beverages and
other consumables, paper and supplies, as well as new uniforms and promotional
items reasonably acceptable to Holdco located or otherwise used at the
Restaurants at the close of business
on the Final Date. "Inventory Cost" means the cost of Inventory as of the Final
Date, determined as set forth in Paragraph 2.6(a)(i) hereof.
18. "Knowledge" means, as to the Sellers, the actual knowledge of the
President, Chief Financial Officer or any Senior Vice President of Sellers, of
Arby's or Triarc (as hereinafter defined) or any Senior Vice President and the
Vice President - Legal, Vice President - Franchise Services and Vice President -
Development of Arby's or of any Divisional Vice President of Sellers or Arby's.
19. "Licenses" means collectively, (i) new Arby's license agreements,
in the form of the "0000-000000-00 LA" license (the "Arby's Licenses"), which
shall be executed and delivered by Arby's and Newco immediately following the
Closing and shall remain in effect until such time as a new license agreement
reasonably acceptable to Holdco (the "New Arby's License") becomes effective
under applicable franchise laws, and thereafter, upon execution and delivery
thereof, such New Arby's Licenses, and (ii) the new T.J. Cinnamons, ZuZu and
P.T. Noodle's license agreements in the forms of Exhibits 1(a), 1(b) and 1(c)
hereto, respectively (the "Multi-Brand Licenses"), between Newco and Arby's to
be entered into immediately following the Closing and shall remain in effect
until such time as a new license agreement reasonably acceptable to Holdco (also
a "New Arby's License") becomes effective under applicable franchise laws, and
thereafter, upon execution and delivery thereof, such New Arby's License. Arby's
Licenses are being issued, and subsequent to the Closing New Arby's Licenses
will, in accordance with Paragraph 5.12 hereof, be issued, for each of the
Restaurants listed on Schedule 1(a) hereto. Multi-Brand Licenses are being
issued for each of the Restaurants to the extent set forth on Schedule 1(b)
hereto. The New Arby's Licenses issued to each Restaurant listed on Schedule
1(a) hereto shall provide for a term of twenty years minus the period such
Restaurant operated under the "0000-000000-00 LA" form of license.
20. "Person" means any individual, corporation, trust, limited
liability company, unincorporated organization, governmental authority or any
other form of entity.
21. "Xxxxx Cash" means the sum of the amounts set forth for each
Restaurant on Schedule 6 hereto.
22. "POS Liabilities" means the rights and obligations for payments of
hardware lease rental costs, but excluding periodic software license and
maintenance agreement costs, as reflected in the Adjusted Cash Flow Calculations
referred to in Section 3.9 hereof, of the Sellers under the Term Lease Master
Agreement, executed by Arby's on December 27, 1994 and by IBM Credit Corporation
on February 8, 1995, and each of the leases entered into in accordance therewith
(the "POS Agreements").
23. "POS Software" means any and all rights that Sellers possess to any
owned or licensed software that the Sellers utilize in the operation of the
Restaurants pursuant to the POS Agreements or which has been internally
developed in connection with the interpretation of information generated by the
POS equipment leased by the Sellers pursuant to the POS Agreements.
24. "Restaurant Leases" are the leases of land and building or land,
building and equipment, including without limitation, the leases between ARDC
and AROC relating to certain of the Restaurants, together with any and all
amendments thereto, which leases are listed on Schedule 7 hereto and true,
correct and complete copies of which have been made available to RTM and Holdco,
or will be made available to RTM and Holdco as soon as is reasonably practical,
but in any event at least ten days prior to the Final Date.
25. "Transaction Documents" means this Agreement and any and all
documents called for herein to be executed by any Seller, RTM, Holdco, Newco One
or Newco Two and/or third parties, including, but not limited to, the Licenses,
the Guaranty (as hereinafter defined), the Security Documents (as defined in the
Guaranty) and all other closing delivery items called for in Paragraphs 6.2 and
7.2 hereof.
Accordingly, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound, the parties hereto agree as
follows:
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 Sale and Purchase of Shares. At the Closing and upon the terms and
subject to the conditions of this Agreement, the Sellers shall sell to Holdco,
and Holdco shall purchase from the Sellers, all of the Shares.
2.2 Delivery of Shares. At the Closing, each Seller shall deliver, or
cause to be delivered, to Holdco stock certificates representing all of the
Shares owned by it, duly endorsed in blank or accompanied by stock powers duly
executed in proper form for transfer, which shares, in the aggregate, shall
constitute all of the Shares.
2.3 Consideration to be Paid by Holdco; Allocation. The consideration
to be paid by Holdco to the Sellers hereunder shall be determined, paid and
allocated as provided herein. Subject to Paragraph 2.6 below, the purchase price
for the Shares shall be payable by (i) delivery at the Closing of (A) cash in
the amount of $50,000.00 and (B) promissory notes of RTM, in the aggregate
principal amount at maturity of $1,950,000, in the form of Exhibit 2.3 hereto
(the "Notes"), (ii) execution and delivery by Holdco of the Option Agreements
(as hereinafter defined), and (iii) the execution and delivery by RTM, Holdco,
Newco and RTM Management of the Guaranty (the "Purchase Price"). The Purchase
Price will be allocated among the Sellers in the manner set forth in writing and
delivered by Sellers to Holdco not later than ten (10) days prior to the Final
Date, subject to Paragraphs 9.14 and 9.15 below.
2.4 Transfer of Assets to Newco; Liabilities Assumed by Newco. Holdco
acknowledges and agrees that prior to the Closing, subject to receipt of
requisite consents and approvals, the Sellers other than ARDC, shall convey or
cause to be conveyed to Newco One, and ARDC shall convey to Newco Two, all of
their right, title and interest in and to the Assets, and that Newco One shall
assume obligations of Arby's and the Sellers, other than ARDC, and Newco Two
shall assume from ARDC, and shall become liable for, and Newco as between Newco
and the Sellers and Arby's, shall be responsible for and hold harmless Sellers
and Arby's with respect to only the following liabilities (collectively, the
"Assumed Liabilities"):
(i) the rights and obligations of the Sellers or Arby's under
the Restaurant Leases and the Equipment Leases arising and accruing after
the Final Date;
(ii) the rights and obligations of the Sellers under the Debt
Documents arising and accruing after the Final Date;
(iii) all fees, dues and assessments arising and accruing
after the Final Date for the Arby's Franchise Association and for any of
the Sellers' or Arby's' other advertising programs occurring after the
Final Date, whether local or national;
(iv) the Prorated Expenses (to the extent provided in Paragraph
2.6(a)(vi) below), Accrued Vacation Pay and Accrued Personal Absence Pay
and other items to the extent set forth in Paragraphs 2.6(a);
(v) the obligations and liabilities of the Sellers under
the Assumed Contracts arising and accruing on or after the Closing Date; and
(vi) POS periodic software, license and maintenance
agreement costs arising and accruing after the Closing Date as reflected in
the Adjusted Cash Flow Calculations referred to in Section 3.9 hereof.
2.5 Excluded Liabilities. Notwithstanding anything to the contrary set
forth herein, but subject to Paragraphs 2.6 (a)(iii), 2.6(a)(iv) and 2.6(a)(v)
hereof, Newco shall not assume obligations of Sellers or Arby's or be liable for
any of the Sellers' or Arby's liabilities listed on Schedule 2.5 hereto nor any
of the liabilities of Sellers or Arby's other than the Assumed Liabilities ("the
Excluded Liabilities").
2.6 Post Closing Adjustments to Purchase Price.
(a) Inventory Cost, Xxxxx Cash, Security Deposits and Prorated
Expenses. On or before thirty (30) days following the Closing Date, Newco One
shall pay to the Sellers, on behalf of Holdco, as additional Purchase Price, an
amount, in cash, equal to the excess, if any, of the sum of the Inventory Cost,
plus the Xxxxx Cash, plus the Security Deposits minus the Accrued Personal
Absence Pay, minus the Accrued Vacation Pay and plus Prorated Expenses. Such
items shall be determined as follows:
(i) Inventory Cost shall be as set forth on a schedule
prepared by the Sellers as of the close of business on the Final Date,
which schedule shall be (i) derived from and in accordance with the books
and records of the Sellers and (ii) determined using generally accepted
accounting principles consistent with past practice of the Sellers and
Arby's. Newco shall have the
right to review the Sellers' and Arby's' books and records and Inventory in
order to verify the Sellers' schedule of Inventory and Inventory Cost;
(ii) Xxxxx Cash shall be as shown on Schedule 6 hereto,
as agreed by Sellers and Holdco;
(iii) All security deposits under leases relating to the
Assets and all utility deposits and any other prepaid amounts (other than
tax-related deposits) reasonably acceptable to Newco (collectively,
"Security Deposits"), shall be as set forth on a schedule prepared by the
Sellers as of the close of business on the Final Date. Newco shall have the
right to review the Seller's and Arby's books and records in order to
verify the Seller's schedule of Security Deposits;
(iv) Accrued Personal Absence Pay shall be as set forth
on a schedule prepared by the Sellers as of the close of business on the
Final Date and delivered to Newco within 20 days after the Closing. Newco
shall have the right to review the Seller's and Arby's books and records in
order to verify the Seller's schedule of Accrued Personal Absence Pay;
(v) Accrued Vacation Pay shall be as set forth on a
schedule prepared by the Sellers as of the close of business on the Final
Date and delivered to Newco within 20 days after the Closing. Newco shall
have the right to review the Seller's and Arby's' books and records in
order to verify the Seller's schedule of Accrued Vacation Pay;
(vi) "Prorated Expenses" means Newco's portion of those
costs and expenses which the Sellers or Arby's have paid but which are to
be prorated between Newco and the Sellers or Arby's on a per-diem basis
effective as of the Closing Date, including, without limitation, all rents
for the Restaurant Leases and the Equipment Leases (other than the
Restaurant Leases and Equipment Leases between ARDC and AROC), all interest
payments under the Debt Documents and all other charges and fees
customarily prorated and adjusted in similar transactions, including
property taxes, but excluding all sales, transfer and use taxes and similar
charges, if any, arising out of the transfer of the Assets
contemplated by this Agreement, all of which excluded taxes and similar
charges should be paid in accordance with Paragraph 9.5 hereof. "Prorated
Expenses" shall not include (i) any income, sales, use, business,
occupation, withholding, employment, security or similar tax, or any other
taxes of any kind whatsoever with respect to the Assets and the operation
of the Restaurants relating to any period before the close of business on
the Final Date, all of which shall be paid by the Sellers or Arby's, (ii)
any income, sales, use, business, occupation, withholding, employment,
security or similar tax, or any other taxes of any kind whatsoever with
respect to the Assets and the operation of the Restaurants relating to any
period after the close of business on the Final Date, all of which shall be
paid by Newco and (iii) any payments under Restaurant Leases and Equipment
Leases between ARDC and AROC to the extent that any such payments would
duplicate payments actually made by Newco pursuant to the Debt Documents.
In addition, Holdco shall cause all utilities to be metered as of the close
of business on the Final Date and Newco One shall make provisions for
separate billing thereafter to Newco One for all utility charges commencing
on the Closing Date; and
(b) Other Items. Notwithstanding the foregoing, within thirty
(30) days of the Closing Date, if the 1997 real and/or personal property
taxes and/or other taxes, as to the Restaurants, have not been previously
paid by the Sellers or Arby's, then Newco shall be entitled to a credit
against the amount due to the Sellers under Paragraph 2.6(a) above, and, if
and to the extent that such credit exceeds such amount, then Sellers shall
pay such excess to Newco in cash within thirty (30) days after the
determination of such excess in an amount equal to the Sellers' or Arby's'
pro-rata share of the 1997 property taxes assessed against the Real and
Personal Property and Sellers' and Arby's' portion of all sales taxes
payable for or attributable to the operation of the Restaurants prior to
the Closing Date. If Newco receives such a credit in the 30-day
reconciliation period referred to above, Newco shall pay or cause to be
paid all of the 1997 tax year real and personal property taxes when said
bills are rendered. Said prorations shall either be based: (i) on the
amount assessed for 1997, if
determined; or (ii) on the amount paid in 1996, if the amount of the 1997
taxes are not as yet determined, and in such case, shall be further
adjusted between Newco and the Sellers when the 1997 tax bills become
available. Newco or the Sellers, as applicable, shall further pay to the
appropriate party within thirty (30) days following the Closing Date, the
net amount of any further adjustments made under Paragraphs 2.6(a)(vi)
hereof and this Paragraph 2.6(b) which are not ascertainable on the Final
Date.
(c) Store No. 13. At least ten (10) Business Days prior to the
Final Date, the Sellers and Arby's will deliver to Holdco a certificate,
reasonably acceptable in form and substance to Holdco, setting forth the cost to
the Sellers and Arby's of building Store No. 13, located at 0000 X. Xxxxx,
Xxxxxx, Xxxx, with appropriate invoices or other evidence, reasonably
satisfactory to Holdco of such costs, attached thereto. Holdco hereby agrees to
cause Newco to assume, and to relieve Sellers and Arby's of any obligations with
respect to, the principal amount (and any related future interest, premiums and
penalties) of Excluded FFCA Liabilities equal to the full amount set forth on
such certificate. Additionally, Sellers shall assign or cause to be assigned the
Ground Lease, including improvements, relating to Unit #13 to Newco free and
clear of all liens and other encumbrances that may have been placed on the
premises by Sellers or by any mechanic or materialman as a result of work
performed at the premises by or on behalf of Sellers or Arby's, but excluding
the recordation of the Ground Lease and/or any liens placed on the premises by
the landlord under the Ground Lease, except for those amounts set forth on the
certificate provided for above as finally approved.
(d) Sale of Restaurants by Newco. If Newco One or Newco Two (or
any of their Affiliates) shall, directly or indirectly, sell, transfer, assign
or otherwise dispose of, or enter into a letter of intent or other agreement
(whether oral or written), including without limitation, an option agreement,
within 12 months of the Closing Date, to sell, transfer, assign or otherwise
dispose of, any of the Restaurants, for an amount in excess of the amount
allocated to such Restaurants (whether in an asset sale or by sale of stock) on
Schedule 1(a) hereto, Newco One or Newco Two, as the case may be, shall, at the
closing of such sale, pay to the Seller that transferred directly
(or indirectly) such Restaurant or shares to Newco One or Newco Two, as the case
may be, an amount, in cash, equal to the excess of 80% of such excess amount
minus 80% of such party's reasonable costs and expenses of such sale. The
parties acknowledge that any such payment is a cost of sale to Newco and not a
purchase price adjustment as to such Restaurant. Notwithstanding the foregoing,
the maximum liability of Newco under this Paragraph 2.6(d) shall not exceed
$2,000,000, in the aggregate. For purposes of this provision, the sale price for
any such Restaurant shall include, without duplication, the amount of debt or
other liabilities of Newco (or such affiliate) that are assumed or repaid in
connection with, or otherwise cease to exist after the occurrence of, such sale.
(e) Condemnation or Casualty. In the event any of the Owned Store
Real Property and any of the real property covered by the Restaurant Leases is
or becomes the subject of an actual condemnation proceeding or actual casualty
loss, Sellers shall notify Holdco and Holdco shall, subject to terms and
conditions of this Agreement, proceed to closing and, at the option of Holdco,
either (i) the applicable Restaurant shall be transferred to Newco One or Newco
Two, as the case may be, prior to the Closing and Newco One or Newco Two, as the
case may be, shall accept an assignment of all of Sellers' right in and to any
condemnation proceeds/casualty insurance proceeds or (ii) the applicable
Restaurant shall be excluded from the Restaurants transferred to Newco, with a
corresponding reduction in the Purchase Price in an amount equal to the amount
allocated to such Restaurant on Schedule 1(a) hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND ARBY'S
In order to induce Holdco and RTM to enter into this Agreement and
consummate the transactions contemplated hereby, each Seller represents and
warrants, jointly and severally, and Arby's represents and warrants, severally
and not jointly, to Holdco and RTM as follows:
3.1 Organization and Authority; Formation of Newco. (a) Seller and
Arby's. Such Seller and Arby's is a corporation duly organized, validly
existing and in good
standing under the laws of the State of Delaware. Such Seller and Arby's is duly
qualified as a foreign corporation in such jurisdictions as the conduct of its
business or the ownership of its properties require. Such Seller and Arby's has
all necessary corporate power and authority to own its properties and conduct
its business as it is presently being conducted.
(b) Newco. Each of Newco One and Newco Two is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Newco One and Newco Two is duly qualified as a foreign
corporation in such jurisdictions as the conduct of its business or the
ownership of its properties require. Each of Newco One and Newco Two has all
necessary corporate power and authority to own its properties and conduct its
business as it is presently being conducted.
(c) Formation of Newco. Newco One and Newco Two have been formed
and prior to the Closing, neither entity will have had any operations, entered
into any agreements (written or oral) or incurred any liabilities except those
expressly contemplated by this Agreement, franchise taxes, qualification fees
and other related liabilities.
3.2 Corporate Power and Authority; Due Authorization. Such Seller and
Arby's have full corporate power and authority to execute and deliver the
Transaction Documents to which such Seller or Arby's is or will be a party and
to consummate the transactions contemplated thereby. The Board of Directors of
such Seller and Arby's has duly approved and authorized the execution and
delivery of this Agreement and each of the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, and no other
corporate or other proceedings on the part of any Seller or Arby's (other than
consents of the sole shareholder of such Seller and Arby's) are necessary or
required to authorize or approve the execution and delivery of this Agreement or
any of the Transaction Documents to which such Seller or Arby's is a party, or
the consummation of any of the transactions contemplated hereby or thereby. This
Agreement and each of the Transaction Documents to which such Seller or Arby's
is a party constitutes, or will constitute, when executed and delivered, a valid
and binding agreement of such Seller and Arby's, in each case enforceable in
accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
3.3 No Conflict; Consents. Subject to and contingent upon obtaining all
of the consents, approvals, authorizations and/or loan payoffs set forth in
Schedule 3.3 hereto, the execution and delivery by such Seller and Arby's of
this Agreement and the required documents and the consummation by such Seller or
Arby's of the transactions contemplated hereby and thereby (including, without
limitation, the transfer of the Restaurants and Assets to Newco) do not and will
not: (a) to such Seller's or Arby's' Knowledge violate the terms of any
instrument, document or agreement to which such Seller or Arby's is a party or
by which such Seller or Arby's or the property of such Seller or Arby's is
bound, or be in conflict with, result in a breach of or constitute (upon the
giving of notice or lapse of time or both) a default under any such instrument,
document or agreement, or result in the creation of any lien upon any of the
property or Assets of such Seller or Arby's; or (b) violate any order, writ,
injunction, decree, judgment, ruling binding upon such Seller or Arby's or, to
such Seller's or Arby's' Knowledge, any law (other than bulk sales laws), rule
or regulation of any federal, state, county, municipal, or foreign court or
governmental authority applicable to such Seller or Arby's and relating to the
business of the Restaurants or the Assets.
3.4 Compliance with Laws. Except as set forth on Schedule 3.4, at the
Closing each Seller and Arby's is not to its Knowledge in violation of, or under
any investigation with respect to, or has received any written notice of any
non-compliance with, enforcement action under or violation of, any applicable
law, statute, order, rule, regulation, agency agreement, judgment, decree,
arbitration award, penalty or fine entered by any federal, state, county,
municipal, or foreign court or governmental authority relating to the business
of the Restaurants or to the Assets, excluding, those matters covered by
Paragraphs 3.11 and 3.12 hereof.
3.5 Inventory. Such Seller's Inventory consists, and as of the close
of business on the Final Date and Closing Date Newco's Inventory will consist,
of items
which are in all material respects of a quality and quantity usable and salable
in the ordinary course of business.
3.6 Title to Assets. Prior to Closing, there shall have been
transferred and/or assigned to Newco One or Newco Two all of the Assets
currently owned by such Seller and Arby's, free and clear of all claims, liens,
encumbrances, security interests, mortgages and similar interests of any kind or
nature whatsoever ("Liens"), subject only to the Assumed Liabilities and the
Permitted Exceptions (as defined in Paragraph 3.13 below).
3.7 Litigation; Judgments. Except as set forth on Schedule 3.7 hereto,
there is no action, proceeding or investigation pending or threatened, in
writing, against or involving such Seller or Arby's relating to the Assets or
the operation of the Restaurants that, individually or in the aggregate, is
reasonably likely to have an adverse effect on Newco. Such Seller and Arby's is
not subject to any judgment, order or decree entered in any lawsuit or
proceeding relating to the Assets or the operation of the Restaurants, which is
reasonably likely to have an adverse effect on Newco.
3.8 Benefit Plans and ERISA. All "employee benefit plans," as defined
by Section 3(3) of ERISA, and any other benefit plans, including, without
limitation, vacation pay, Medicare and Medicaid supplements, retirement
supplements, salary continuation for disability and scholarship programs
maintained by such Seller or any member of a "Controlled Group" (within the
meaning of Section 4001(a)(14) of ERISA in which Seller is a member (the
"Controlled Group")) to which such Seller or any member of a Controlled Group
contributes are hereinafter collectively referred to as the "Plans." No Plan
obligates or will obligate Newco, following the Closing, to make any
contributions or obligations whatsoever thereunder, other than any required
employer 401K contributions with respect to the period prior to the Closing,
which are obligations of the Sellers or Arby's.
3.9 Financial Information. The schedule titled "Arby's, Inc., Adjusted
Cash Flow Calculations Based on the Latest Twelve Months Ended November 30,
1996", previously provided by or on behalf of any Seller to Holdco or its
representatives, is true and correct, was prepared from the books and records of
Sellers with adjustments
made as disclosed in the schedule. Since the respective date of such
information, there have not been any changes, other than insignificant changes,
in the financial condition, assets, liabilities, revenues, expenses or
operations of such Seller's Restaurants. The schedules titled "Lease Summaries"
and "Leases", previously provided by or on behalf of any Seller to Holdco or its
representatives, are true and correct and were prepared from the books and
records of Sellers.
3.10 No Broker or Finder. Such Seller and Arby's has not authorized any
broker or agent to act on its behalf, nor does such Seller or Arby's have any
Knowledge of any broker or agent purporting to act on its behalf with respect to
transactions contemplated by this Agreement or any other Transaction Document.
3.11 No Hazardous Substance. For purposes of this paragraph, "hazardous
substance" means any material, in each case giving rise to liability under the
Resources Conservation Recovery Act, 42 U.S.C. Section 6901 et seq., the
Comprehensive Environment Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., and/or any other federal, state, provincial or other
applicable "environmental laws," rules, ordinances or regulations, or generally
any contaminant, petroleum product, asbestos, oil, radioactive or other
material, in each case the removal of which is required or the maintenance of
which is prohibited or penalized by any applicable local, state or federal
agency, authority or governmental unit. To such Seller's and Arby's Knowledge,
except as set forth on Schedule 3.11 hereto (i) no hazardous substance exists at
the Restaurants owned by such Seller, and (ii) there are no pending or
threatened, in writing, litigation or proceedings before any administrative
agency in which any person or entity alleges the presence, release, threat of
release, placement on or in any Restaurants owned by such Seller, or the
generation, transportation, storage, treatment, or disposal at the Restaurants
owned by such Seller of any hazardous substance. To such Seller's and Arby's
Knowledge, neither such Seller nor Arby's has received any written notice of and
neither such Seller nor Arby's has Knowledge that any governmental authority or
any employee or agent thereof has determined, or threatens to determine, that
there is a presence, release, threat of release, placement on or in any
Restaurants owned by such Seller, or the generation, transportation, storage,
treatment or disposal at the Restaurants owned
by such Seller of, any hazardous substance. As to those Restaurants set forth on
Schedule 3.11, and to Arby's' Knowledge, (i) no remediation process is presently
ongoing (ii) no testing and no test results relating to such Restaurants is
required to be reported to any governmental authority and (iii) no remediation
has been mandated for any of such Restaurants.
3.12 Restaurants. To such Seller's and Arby's Knowledge, neither such
Seller nor Arby's has received written notice that any of the buildings and
structures or any appurtenances thereto or equipment therein or the operation or
maintenance thereof violates any restrictive covenants or any applicable
federal, state or local law, ordinance or zoning regulation. To such Seller's
and Arby's' Knowledge, none of the property nor any buildings, structures or
improvements thereon violate any building, fire, environmental or other
regulatory laws, ordinances or regulations, and to such Seller's and Arby's'
Knowledge, neither such Seller nor Arby's has received written notice of any
violation. To such Seller's and Arby's' Knowledge, no governmental authority has
issued or threatened, in writing, to issue any written notice or order that
materially adversely affects the use of any of the Restaurants or other Assets
as presently utilized and to such Seller's and Arby's' Knowledge neither such
Seller nor Arby's has received written notice from any other third party of any
adverse claim that would materially adversely affect the current operations of
any of the Restaurants. There are no condemnation or eminent domain proceedings
pending or, to such Seller's and Arby's' Knowledge, threatened in writing,
against the property, and neither such Seller nor Arby's has received written
notice of the intent of any public authority or government entity to take or use
the property or any part thereof.
3.13 Owned Store Real Property; Liens. Neither such Seller nor Arby's
is a "Foreign Person" for the purposes of the withholding rules of the Federal
Deficit Reduction Act of 1984 or the Foreign Investor in Real Property Tax Act.
Such Seller has made available to Holdco true, correct and complete copies of
all deeds and other conveyance instruments by which such Seller acquired any
right, title or interest in and to the Owned Store Real Property and of all
other material instruments, agreements and documents pertaining to such Owned
Store Real Property or to any rights or privileges
pertaining or appurtenant thereto. Prior to the Closing, such Seller will
transfer to Newco One or Newco Two, as the case may be, fee-simple title to the
Owned Store Real Property owned by such Seller, together with all the tenements,
appurtenances, rights, easements, privileges and rights-of-way incident thereto
by special warranty deed, free and clear of all Liens, and insured by a
nationally recognized title insurance company at standard rates in a policy form
reasonably acceptable to Holdco (and Holdco acknowledges that Lawyers Title
Insurance Company is a nationally recognized title insurance company and that a
policy form acceptable to FFCA shall be accepted by Holdco) but subject to:
liens relating to the Assumed Liabilities and the Excluded Liabilities;
easements, restrictive covenants and conditions of record that do not materially
interfere with the conduct of the business at the applicable Restaurant; matters
that would be revealed by a current and accurate survey of the property that do
not materially interfere with the conduct of the business at the applicable
Restaurant; Liens of landlords, carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law for sums not more than 60 days delinquent or
which are being contested in good faith, have been satisfactorily bonded over or
for which appropriate reserves have been made or for which such Seller will make
payment or otherwise clear of record by indemnifying Newco's title insurance
company in order to remove any such exception from any title insurance policy
being issued to Newco; with respect to Restaurants that are subject to a
Restaurant Lease, the terms of such Restaurant Lease so long as no default
exists thereafter that has not been cured provided and upon the condition that
the lessee under any such Restaurant Lease has received notice of any such
default and such default has not been cured within the time period provided for
under the applicable Restaurant Lease or the applicable Landlord under such
Restaurant Lease has waived any such default; matters set forth in Schedule 3.13
hereto; zoning ordinances and any violations thereof which are permitted as non
conforming uses, if any; liens for taxes, assessments or other governmental
charges not yet due or payable or that are being contested in good faith or for
which such Seller will make payment or otherwise clear of record by indemnifying
Newco's title insurance company (to the extent that such taxes are not yet due
and payable) in order to remove any such exception from any title insurance
policy being
issued to Newco; matters which do not materially adversely affect the use of the
property as presently utilized; and such other matters, if any, as may be
approved in writing by Holdco, as set forth in the Special Warranty Deeds
delivered by the Sellers to Newco One or Newco Two, as the case may be, at the
Closing (collectively, the "Permitted Exceptions"). There are no outstanding
invoices or monies owed by such Seller to any third party under any easement
agreement or declaration of covenants encumbering the Owned Store Real Property,
and such Seller will pay (or reimburse Newco One or Newco Two, as the case may
be, for) any charges assessed under any such easements or declaration of
covenants which charges relate to periods prior to the Closing Date, but are
assessed subsequent to the Closing Date.
3.14 Capitalization. Each of Newco One and Newco Two is authorized to
issue 3,000 shares of common stock, par value $1.00 per share (collectively, the
"Common Stock"), of which 1,000 shares of Newco One and 1,000 shares of Newco
Two are issued and outstanding. No shares of Common Stock are held as treasury
stock. No other class of capital stock or other ownership interest of Newco One
or Newco Two is authorized or outstanding. There is no outstanding right,
subscription, warrant, call, unsatisfied preemptive right, option or other
agreement of any kind to purchase or otherwise to receive from Newco One or
Newco Two any of the outstanding, authorized but unissued, unauthorized or
treasury shares of the capital stock or any other security of Newco One or Newco
Two and there is no outstanding security of any kind convertible into any such
capital stock.
3.15 Ownership of Shares. All of the outstanding shares of Common Stock
owned by such Seller are, and at the Closing will be, owned by such Seller free
and clear of all Liens. All of the outstanding shares of capital stock of Newco
One or Newco Two owned by such Seller are duly authorized and validly issued,
fully paid and nonassessable.
3.16 Subsidiaries. Schedule 3.16 hereto sets forth the name and
jurisdiction of organization for each corporation or other entity (collectively,
"Subsidiaries") in which Newco One has, or at the Closing will have, a direct or
indirect ownership interest. Newco One owns 100% of the outstanding ownership
interests
in the Subsidiaries. Each Subsidiary is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization. Except for the
Subsidiaries, neither Newco One nor Newco Two has or will have, at the Closing,
directly or indirectly own any interest in any other Person.
3.17 Contracts and Agreements. Except as set forth on Schedule 3.17, at
the Closing, Newco will not be a party to any contract which (A) has a term that
expires more than one year after the Closing Date or (B) pursuant to the terms
of which there is either a current or future obligation of Newco to make an
annual payment in excess of (x) $20,000 with respect to capital improvements of
any Restaurant or (y) $10,000 with respect to the operations of any Restaurant,
or (C) which materially affects the business, operations, assets (including,
without limitation, the Assets), properties or condition of Newco and was not
executed in the ordinary course of business of operating Restaurants.
3.18 Arby's Canada, Inc. The representations and warranties set forth
in Sections 3.3 through 3.13 are hereby made by Arby's as to the Restaurants
leased or owned by Arby's Canada, Inc.
3.19 Standards. Notwithstanding anything to the contrary contained
herein, if a representation or warranty contained in Article III hereof is based
on "Knowledge" or a derivation thereof is not true and correct and has had or
would have an adverse effect on the business, assets, properties or condition of
Newco which causes Newco to incur Losses (as hereafter defined) in excess of
$5,000 with respect to any one Restaurant, then in such event, such inaccuracy
or breach shall be treated as a Special Claim (as hereinafter defined).
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT,
NEITHER THE SELLERS NOR ANY OF THEIR AGENTS OR PERSONS ACTING ON THEIR BEHALF
MAKES ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE
SHARES, THE ASSETS, THE RESTAURANTS OR ANY OTHER PROPERTY THAT IS THE SUBJECT OF
THIS AGREEMENT, AND THE SELLERS HEREBY DISCLAIM ANY SUCH REPRESENTATION OR
WARRANTY NOT SET FORTH IN THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDCO
In order to induce the Sellers to enter into this Agreement and
consummate the transactions contemplated hereby, Holdco represents and warrants
to the Sellers as follows:
4.1 Organization and Authority. Each of Holdco and RTM is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia. RTM is duly qualified as a foreign corporation in such
jurisdictions as the conduct of its business or the ownership of its properties
requires such qualification. Holdco is qualified to do business in all
jurisdictions in which such qualification is necessary. Holdco has had no
operations, has not entered into any agreements (written or oral) and has not
incurred any liabilities.
4.2 Corporate Power and Authority; Due Authorization. Each of Holdco
and RTM are authorized and permitted under its governance documents to execute
and deliver this Agreement and each of the Transaction Documents to which it is
or will be a party and to consummate the transactions contemplated hereby and
thereby. The Board of Directors of RTM has duly approved and authorized and all
necessary action by the Board of Directors of Holdco has occurred to duly
approve and authorize, the execution and delivery of this Agreement and each of
the Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby, and no other corporate proceedings
on the part of Holdco or RTM is or shall be necessary to approve and authorize
the execution and delivery of this Agreement and such Transaction Documents and
the consummation of the transactions contemplated hereby and thereby. This
Agreement and each of the Transaction Documents to which Holdco or RTM is a
party constitutes, or will constitute, when executed and delivered, a valid and
binding agreement of Holdco or RTM, as the case may be, in each case enforceable
against Holdco or RTM, as the case may be, in accordance with its terms, subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
4.3 No Conflict; Consents. The execution and delivery by Holdco and RTM
of this Agreement and/or the Transaction Documents to which each entity is a
party and the consummation by Holdco and RTM of the transactions contemplated
hereby and thereby does not and will not: (a) violate the terms of any material
instrument, document or agreement to which Holdco or RTM is a party or by which
Holdco or RTM or any of their property is bound, or be in conflict with, result
in a breach of or constitute (upon the giving of notice or lapse of time, or
both) a default under any such instrument, document or agreement, or result in
the creation of any lien upon any of the property or assets of Holdco or RTM or
any of their Affiliates; or (b) violate any order, writ, injunction, decree,
judgment, ruling, law or regulation of any federal, state, county, municipal or
foreign court or governmental authority applicable to Holdco or RTM and relating
to the purchase of the Shares or the ownership by Newco of the Restaurants and
the Assets.
4.4 Litigation; Judgments. There is no action, proceeding or
investigation pending or threatened against or involving Holdco, RTM or any of
their Affiliates relating to the Shares or the ownership by Newco of the Assets
or the Restaurants or that would adversely affect the ability of Holdco, RTM and
their Affiliates to consummate the transactions contemplated hereby and by the
other Transaction Documents. Neither Holdco, RTM nor any of their Affiliates is
subject to any judgment, order or decree entered in any lawsuit or proceeding
relating to the purchase of the Shares or the ownership by Newco of the Assets
or the Restaurants.
4.5 No Broker or Finder. Neither Holdco, RTM nor any of their
Affiliates has authorized any broker or agent to act on its behalf, nor does
Holdco, RTM nor any of their Affiliates have any knowledge of any broker or
agent purporting to act on its behalf with respect to transactions contemplated
by this Agreement or any other Transaction Document.
4.6 Capitalization of Holdco. All of the outstanding stock interests of
Holdco are, or at the Closing will be, owned by the Persons listed on Schedule
4.6 hereto, free and clear of all Liens (except as contemplated by this
Agreement and the other Transaction Documents). No other class of ownership
interest of Holdco is, or at the Closing will be, authorized or outstanding.
There is no outstanding right,
subscription, warrant, call, unsatisfied preemptive right, option or other
agreement of any kind to purchase or otherwise to receive from Holdco any stock
interests or any other security of Holdco and there is no outstanding security
of any kind convertible into any such stock interests.
4.7 Arby's Employees. Neither Holdco nor any of its Affiliates has
offered employment to any current Arby's Headquarters Employee or has entered
into any agreements to employ any such employee in the future. Holdco agrees
that it will not, and will not permit its Affiliates to, without Arby's prior
written consent, directly or indirectly, hire, or solicit the hiring of, any
Arby's Headquarters Employee during the two year period commencing on the date
of this Agreement.
4.8 Purchase for Investment. Holdco is purchasing the Shares for its
own account for investment and not for resale or distribution.
4.9 No Liquidation. Holdco has no current plan or intention of
liquidating Newco One or Newco Two or transferring, conveying or otherwise
disposing of all or substantially all of the assets of Newco One or Newco Two.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Conduct of Business Prior to Closing. The Sellers and Arby's
covenant and agree that prior to the commencement of business on the Closing
Date and except as otherwise consented to or approved by Holdco in writing, the
Sellers and Arby's and Newco shall operate the Restaurants, in the ordinary
course and substantially in the same manner as heretofore conducted. Without
limiting the foregoing, (A) the Sellers and Arby's shall, and prior to the
Closing shall cause Newco to: (i) maintain Inventory at normal levels consistent
with ordinary business practices; (ii) use commercially reasonable efforts to
maintain all Assets in good operating condition and repair, ordinary wear and
tear excepted; (iii) not further encumber the Assets (other than by Permitted
Exceptions); and (iv) not take any action, omit to take any action or permit any
third party to take any action which would cause any Seller to be in breach, in
any material respect, at the Closing Date of any of its representations,
warranties or covenants contained herein; and (B) the Sellers and Arby's shall
not, and shall not cause
or permit Newco to (i) enter into, modify or amend any of the Assumed Contracts;
(ii) enter into, modify or amend any Debt Documents; (iii) enter into, modify or
amend any ILC Agreements; or (iv) enter into, modify or amend any of the POS
Agreements; without consulting with Holdco, to the extent reasonably
practicable, in each of the circumstances as described in clauses 5.1(B)(i)-(iv)
above.
5.2 Full Access. The Sellers and Arby's covenant and agree that between
the date hereof and the Closing Date, Holdco and its officers, employees and
authorized representatives shall, upon prior notice, have full access at
reasonable business hours to the Assets, Sellers' and Arby's' employees and any
and all files, books, documents and other records maintained by the Sellers,
Arby's, their agents, employees, accountants and other representatives
pertaining to any of the Assets or the operation of the Restaurants, the Assumed
Contracts, the Debt Documents, the Excluded FFCA Liabilities and/or the Excluded
Liabilities.
5.3 Payment by the Sellers of the Sellers' Vendors. Each Seller and
Arby's covenants and agrees that within thirty (30) days following the Closing
Date, such Seller and Arby's will pay in full all monies owed by such Seller or
Arby's to any vendor, supplier, merchant, wholesaler, distributor, service
company or similar supplier of products and services to the Restaurants
(collectively, "Vendors") for products or services purchased prior to the
Closing, if the same is then due; provided that, in the event such Seller or
Arby's disputes in good faith any amount claimed to be owed to a Vendor or
Vendors, and such Seller or Arby's is using reasonable efforts to resolve such
dispute or disputes, such Seller and Arby's is not obligated to pay such amount
unless and until such Seller and Arby's and Vendor or Vendors settle their
dispute or disputes. Thereafter, such Seller and Arby's will make prompt payment
of any Vendor invoices subsequently received by such Seller or Arby's or Newco
relating to the operation of the Restaurants prior to and through the Final Date
as such invoices become due and in accordance with such Seller's or Arby's'
payment practices to such Vendors. The obligations of Seller and Arby's under
this Paragraph shall survive the Closing and are Excluded Liabilities under this
Agreement.
5.4 Arby's Fees. Holdco and the Sellers hereby acknowledge that Arby's,
as franchisor, shall agree in the Licenses to waive the payment of customary
initial franchise fees relating to the acquisition by Newco of the Restaurants,
and, in the case of a transfer by Newco One or Newco Two of any of the
Restaurants to an existing Arby's franchisee within 12 months of the Closing
Date, the customary transfer fees relating to transfers of Arby's restaurants.
Holdco acknowledges and agrees that the waiver of such fees does not apply to
any of the restaurants to be opened by Newco pursuant to the Development
Agreement (as hereinafter defined). Until the third anniversary of the Closing
Date, Seller will consent to a transfer of location of a License to another
location approved by Arby's within five (5) miles of the existing location
within the applicable designated market area, and will waive one-half the
customary transfer fees relating to such transfers, provided that (i) Newco is
not then in default under such Arby's License Agreement, (ii) such transfer does
not violate any other Arby's Licensing Agreement with any other Arby's licensee
and (iii) with respect to such a transferred License, Holdco shall ensure that
Newco One or Newco Two, as the case may be, enters into a New Arby's License (or
then current License, as applicable) prior to any opening of such Restaurant.
Any transfer of License and subsequent reopening of a Restaurant pursuant to
transfer, as contemplated above, will not count toward the fulfillment of any
requirements under the Development Agreement. Additionally, Newco shall be
entitled to open three Restaurants, without paying initial franchise fees as to
such three Restaurants, provided that Arby's approves the location of such
Restaurants in accordance with its standard licensing procedures.
5.5 FFCA Loan Agreements. The Sellers and Holdco covenant and agree to
use commercially reasonable efforts to obtain prior to the Closing, the
amendments to the FFCA Loan Agreements described on Schedule 5.5 hereto.
Notwithstanding the foregoing, (i) neither Sellers nor Holdco shall be under any
obligation to make any payment or other concession (monetary or otherwise, other
than to pay FFCA's fees and expenses, which shall be borne one-half by Sellers
and one-half by RTM or an Affiliate thereof) to FFCA in connection with their
attempt to obtain such amendments.
5.6 New Products and Marketing Programs; Training Facilities; Multi-
Branding.
(a) New Products and Marketing Programs. Holdco covenants and
agrees, after the Closing, to permit, and to cause Newco to permit, at the
option of Arby's, Sellers and their Affiliates to use, at any one time, up to
twenty (20) of the Restaurants or the restaurants opened by Newco pursuant to
the Development Agreement, at least one of which shall be located in Canada,
unless Newco at such time does not own any Restaurants in Canada, (such 20
Restaurants and/or restaurants, the "Test and Training Restaurants"), any ten
(10) of such Test and Training Restaurants which, at any one time, may be in the
same Designated Market Area for test marketing of products and for testing
marketing concepts. The Sellers agree that they shall, or shall cause their
Affiliates to, reimburse Newco for any incremental costs incurred by Newco in
connection with the foregoing. Holdco agrees to follow, and to cause Newco to
follow, Arby's operating procedures in the preparation and implementation of
such products and/or marketing concepts, and, at the Sellers' cost and expense
(other than for related inventory, which shall be at the sole cost and expense
of Newco), to participate in the development of new products and new marketing
programs, as well as testing of multi-brand concepts and products in the Test
and Training Restaurants, such participation, and the determination of the
locations of the Test and Training Restaurants, to be on terms mutually agreed
upon by the Sellers and Newco.
(b) Training Facilities. Upon prior written notice, Holdco
covenants and agrees, subsequent to the Closing, to permit, and to cause Newco
to permit, Sellers and their Affiliates to use up to ten (10) Test and Training
Restaurants (no more than one of which may be in any one Designated Market Area)
to train existing and future franchisees in the operation and management of an
Arby's restaurant. The Sellers agree to reimburse Newco for any incremental
costs incurred by Newco in connection with the foregoing.
(c) Good Faith Negotiations. Holdco covenants and agrees to
negotiate, and to cause Newco to negotiate, in good faith with the Sellers, and
Sellers covenant and agree to negotiate in good faith with Holdco and/or Newco,
with respect to
the determination of the locations of the Test and Training Restaurants, the
deployment of products and marketing programs and the testing of multi-brand
concepts and products in the Test and Training Restaurants, and the costs and
expenses to be paid for and/or reimbursed by Sellers in connection with any of
the foregoing.
5.7 Employee Matters.
(a) Affected Employees. As soon as is reasonably practical, and in
any event not less than ten (10) days prior to the Final Date, RTM covenants and
agrees to deliver to Sellers and Arby's a list of all employees of Sellers and
their Affiliates involved in the operation of the Restaurants (other than those
employees (the "Store Level Employees") located at the Restaurants), who hold a
title at or below Area Manager (the "Restaurant Employees"). The Restaurant
Employees and Store Level Employees are sometimes herein collectively referred
to as the "Affected Employees."
(b) Offer to Employ. RTM covenants and agrees, immediately
following the Closing, to offer to employ each Restaurant Employee as of the
Closing Date at a compensation and benefit level that are substantially
equivalent to the compensation and benefit level provided to such Restaurant
Employee on the Final Date, provided, however, that nothing in this Agreement
shall be construed to limit the right of RTM to terminate the employment of any
Restaurant Employee who accepts such offer of employment, for cause or
otherwise, at any time after the Closing Date. Newco One covenants and agrees,
immediately following the Closing, to offer to employ each Store Level Employee
as of the Closing Date at a compensation level and benefit level that are
substantially equivalent to the compensation and benefit level provided to such
Store Level Employee on the Final Date, provided, however, that nothing in this
Agreement shall be construed to limit the right of Newco One to terminate the
employment of any Store Level Employee who accepts such offer of employment, for
cause or otherwise, at any time after the Closing Date. Neither RTM nor Newco
shall be obligated hereby to offer employment to any Affected Employee who is
not lawfully employed by Sellers or their Affiliates, with all appropriate
documentation regarding the same, under any applicable laws, rules, regulations
or ordinances in effect as of the Closing Date, including without limitation any
and all immigration laws. Sellers and Arby's represent and warrant to RTM and
Newco
that, to their knowledge, all Affected Employees are so lawfully employed by
Sellers and their Affiliates.
(c) WARN. Each party shall deliver to the other a copy of the
draft notices, if any, required to be issued by such party in accordance with
the Worker Adjustment and Retraining Notification Act of 1988, as amended
("WARN") (or any similar foreign or domestic laws), which notices shall be
subject to the other party's review and comment. If RTM and Newco One do not
offer employment to, or continue to employ, other than as an independent
contractor or a consultant, on or promptly after the Closing Date any Affected
Employee, then RTM shall reimburse the Sellers for any liability that any one or
more of them may incur under WARN (or other similar foreign or domestic laws).
(d) Employee Benefit Plans. RTM covenants and agrees to enroll the
Affected Employees who become employees of RTM or Newco One in RTM's employee
benefit plans, effective as of the Closing (or as soon as practicable
thereafter), including, as applicable, its medical plan, dental plan, life
insurance plan, and disability plan, under the same coverage applicable to other
similarly situated employees of RTM, giving such employees service credit for
their employment with the Sellers for eligibility and vesting purposes for all
of RTM's employee benefit plans (including, without limitation, health coverage
and vacation plans), as if such service had been performed with RTM and waiving
any preexisting condition exclusion with respect to RTM's medical plan, to the
extent that such preexisting condition would have been covered under the
Sellers' healthcare plan. RTM shall credit each such current employee with all
deductible payments and co-payments paid by such current employee under the
Sellers' or their Affiliates' healthcare plans prior to the Closing Date during
1997 for purposes of determining the extent to which any such current employee
has satisfied his or her deductible and whether he or she has reached the
out-of-pocket maximum under RTM's medical plan for such plan year. Claims for
benefits by Affected Employees and former employees under the Sellers' or their
Affiliates' Plans which are incurred but not paid prior to the Closing Date
shall be paid according to such transition claims procedures as may be agreed
upon by RTM and the Sellers.
(e) Severance. RTM shall bear all of the severance costs
(including, without limitation, "COBRA" costs and severance costs incurred by
the Sellers and their Affiliates) arising out of the failure by RTM or Newco One
to comply with their obligations under this Paragraph 5.7.
5.8 Cooperation; Power of Attorney; Operating Agreement. (a)
Cooperation. The Sellers shall give any notices to third parties, and the
Sellers and Holdco shall each use their good faith commercially reasonable
efforts (which shall not require payments of money to third parties in order to
obtain waivers or consents from such third parties, other than the payment of
FFCA's fees and expenses) (in consultation with each other) to obtain any third
party consents (A) necessary or proper to consummate the transactions
contemplated in this Agreement, (B) disclosed or required to be disclosed in the
Schedules to this Agreement, (C) required to avoid a breach of or default under
any of the Sellers' material agreements in connection with the consummation of
the transactions contemplated in this Agreement (including, without limitation,
the transfer of the Restaurants and the Assets to Newco) or (D) required to
prevent a material adverse effect from occurring on or prior to the Closing Date
or a material adverse effect after the Closing Date. For purposes of this clause
5.8(a)(D), and without limitation of other matters having such effect, a
"material adverse effect" shall be deemed to have occurred if a party is unable
to operate any Restaurant for in excess of fifteen (15) consecutive days, or
incurs costs, expenses or losses in excess of $25,000.00 as a result thereof.
(b) Power of Attorney; Operating Agreement. In the event that the
Sellers or Arby's shall fail to obtain any third party consent described in
Paragraph 5.8 (a) above, the Sellers and Arby's shall use their good faith
reasonable efforts (which shall not include the payment of money by the Sellers
or Arby's unless fully reimbursed by Holdco), and shall take any such actions
reasonably requested by Holdco, to minimize any adverse effect upon the Assets
which could reasonably be expected to result after the Closing Date, from the
failure to obtain such consent. Subject to the immediately preceding sentence,
such actions shall include, without limitation, if reasonably requested by
Holdco and if such grant would not constitute a violation of applicable law
or a breach of the applicable contract, the granting of a limited power of
attorney by the Sellers and Arby's to Holdco or Newco to permit Holdco or Newco,
as the case may be, to act on behalf of Sellers or Arby's under the applicable
contracts and agreements, or a management agreement, in form and substance
reasonably satisfactory to Holdco and the Sellers and Arby's, pursuant to which
Newco One will manage the affected Restaurants for Sellers and Arby's until such
time as such consent was no longer required, in which event Holdco and Newco One
shall indemnify the Sellers and Arby's for any expenses or losses incurred by
the Sellers and Arby's under the applicable contracts and agreements or as a
result of Holdco or Newco One, as the case may be, acting pursuant to such power
of attorney (other than any third party claim for breach of an applicable
contract or agreement by reason of and to the extent resulting from (i) the
actual grant by the Sellers and Arby's of the limited power of attorney or (ii)
the execution and delivery of the Operating Agreement substantially in the form
attached hereto as Exhibit 5.8 and the contemplated performance by Newco One of
its obligations thereunder). The Sellers and Holdco agree that up to 15% of the
leased Restaurants may be managed by Newco pursuant to an operating agreement
following the Closing, which for purposes of Paragraphs 6.2(j) and 7.2(s) shall
be deemed to constitute compliance with such Paragraphs.
5.9 Purchase of POS Equipment. The Sellers covenant and agree that, if
requested by Holdco or Newco, the Sellers will use their commercially reasonable
efforts (i) to cause Arby's to assign to Newco One the right under the POS
Agreements and ILC Agreements to exercise the buyout or lease option with
respect to the equipment, software and other products leased pursuant to the POS
Agreements and ILC Agreements or, (ii) if after exercise by Arby's of
commercially reasonable efforts, such assignment is not possible and the Sellers
receive from Holdco or Newco the full amount, in cash, required with respect
thereto, to cause Arby's to exercise the buyout or lease option with respect to
the equipment, software and other products leased pursuant to the POS Agreements
and ILC Agreements and convey to Newco by Limited Warranty Xxxx of Sale, free
and clear of all liens and encumbrances (other than Permitted Exceptions) title
to the equipment, software and other products covered by said POS Agreements and
ILC Agreements.
5.10 Title and Environmental Reports. The Sellers covenant and agree to
deliver to Holdco, within 10 days after the execution of this Agreement, copies
of all title insurance policies, surveys, and environmental reports covering the
Owned Store Real Properties and all properties covered by the Restaurant Leases
which the Sellers have in their possession. The Sellers covenant and agree,
within 10 days after the execution of this Agreement, to request from the
lenders under the Debt Documents all title insurance policies, surveys and
environmental reports covering the Owned Real Properties and all properties
covered by the Restaurant Leases which are in the possession of such lenders (to
the extent the Sellers and Arby's do not already have such documents) and, to
the extent that Sellers receive the same from such lenders, to promptly make
available such policies, surveys and reports to Holdco. All of such information
shall be subject to Holdco's review and reasonable approval.
5.11 Tax Covenants. Holdco and its Affiliates shall join with the
Sellers in making an election under Section 338(h)(10) of the Internal Revenue
Code of 1986, as amended (the "Code") (and comparable elections pursuant to
state and local law) with respect to the purchase and sale of the Shares (such
election under Section 338(h)(10) of the Code, coupled with all comparable state
and local elections, being collectively referred to as the "Section 338
Election") and shall not take any position inconsistent with the Section 338
Election. Holdco and the Sellers shall (a) cause an IRS Form 8023-A that has
been completed in accordance with Treasury Regulations Section 1.338(h) (10)-1
and all comparable forms required or appropriate pursuant to any relevant state
law to be executed on the Closing and (b) take such other action as the Sellers
or Holdco, as the case may be, shall reasonably request, including, but not
limited to, providing the Sellers with any requested information, and making
available and causing appropriate Persons to take any action on behalf of Holdco
and its Affiliates, or the Sellers and its Affiliates, as the case may be,
required or appropriate for the making of such Section 338 Election in
accordance with Treasury Regulations Section 1.338(h)(10)-1 and Form 8023-A (and
in accordance with relevant state and local law). Holdco and its Affiliates and
the Sellers and its Affiliates will appropriately and timely prepare and file an
IRS Form 8594 (and any other forms required by Section 338(h)(10)(C) or 1060 of
the Code) reporting the sale and purchase made pursuant to this Agreement (and
in accordance with relevant state and local law). In the event that Newco is
included in a consolidated or combined tax filing with Holdco and/or its
Affiliates, Newco will enter into a tax sharing agreement with Holdco and/or its
Affiliates to provide for Newco's share of taxes with respect to such
consolidated or combined tax filing. The tax sharing agreement will provide that
Newco's liability with respect to such consolidated or combined tax filing shall
be equal to the amount of taxes Newco would have paid if Newco had filed a
separate tax return (or a consolidated or combined filing by Newco and any of
its subsidiaries). Provided that Newco makes such payment, Newco shall be
indemnified against any tax liability with respect to such consolidated or
combined filing. In the event that Newco has losses or credits, Newco shall be
entitled to a refund of amounts previously paid or to be paid with respect to
such consolidated or combined filing, provided Newco could have carried back or
carried forward such losses or credits if it had filed a separate tax return.
All payments to be made by or to Newco shall be made at the time such payments
would be made to or by any taxing authority, determined as if Newco had filed a
separate tax return, whether by estimated tax, amended return, refund claim or
otherwise. Any payments by or to Newco shall be adjusted to reflect audit
adjustments by any taxing authority and shall reflect appropriate interest and
penalties determined as if Newco had filed a separate return. However, no
payments shall be made by Newco with respect to penalties unless such penalties
are actually imposed with respect to Newco by a taxing authority. Any payment by
Newco with respect to a consolidated or combined state tax filing shall be
treated as a deductible tax for federal income tax purposes. Deferred
intercompany gains or losses shall only be reflected in determining the amount
to be paid by or to Newco at the time such transactions are no longer deferred
for tax purposes.
5.12 Licenses. Holdco covenants and agrees to cause Newco One, subject
to and in accordance with paragraph 19 of Section 1.1, to execute and deliver to
Arby's, immediately following the Closing, Arby's Licenses and Multi-Brand
Licenses (as applicable) for each of the Restaurants and, within ten (10)
Business Days of the date that Arby's notifies Holdco, in writing, that the New
Arby's Licenses are effective under
applicable franchise laws, to execute and deliver to Arby's New Arby's Licenses
for each of the Restaurants, as well as for any restaurants which to such date
have been opened by Newco One pursuant to the Development Agreement.
Notwithstanding anything to the contrary set forth herein or in the Arby's
Licenses, the New Arby's Licenses or the Multi-Brand Licenses, Sellers agree
that, in the event Newco or Holdco refinances the debt evidenced by the Debt
Documents or enters into the Amendments to FFCA Loan Agreements contemplated
hereby, and as a result of such refinancing or amendment, FFCA requests, as a
condition to such refinancing or amendment, that the Arby's Licenses, the New
Arby's Licenses and/or the Multi-Brand Licenses be collaterally assigned to
FFCA, Sellers hereby agree to consent to such collateral assignments, provided
and upon the express conditions that (i) such collateral assignments are in the
form previously approved by Sellers in connection with the closings under the
Debt Documents; (ii) any changes to such form of collateral assignment shall be
subject to Sellers' prior written consent; and (iii) such consent shall be
limited to the properties originally financed by FFCA under the Debt Documents
and shall not, under any circumstances, include any other property owned or
controlled by either Newco or Holdco and financed by FFCA for which Arby's
Licenses, New Arby's Licenses and/or Multi-Brand Licenses have been or will be
issued.
5.13 Premerger Notification. Within 10 Business Days of the date of
this Agreement, the Sellers and Holdco shall file or cause to be filed
notification and report forms with respect to the transactions contemplated
hereby in accordance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended, and the rules and regulations promulgated thereunder (the "HSR
Act").
5.14 Further Assurances.
(a) Sellers and Arby's. At any time on or after the Closing Date,
each Seller will execute and will cause Arby's to execute and deliver any
further assignments, conveyances and other assurances, documents and instruments
of transfer reasonably requested by Holdco and will take any other action
consistent with the terms of this Agreement that may be reasonably requested by
Holdco for the purpose of assigning, transferring, granting, conveying and
confirming to Holdco or Newco, or
reducing to possession, any or all of the Assets, or as necessary to carry out
such Seller's and Arby's obligations under this Agreement. If reasonably
requested by Holdco, each Seller and Arby's further agrees, at Holdco's sole
cost and expense, to prosecute or otherwise enforce in its own name for the
benefit of Holdco or Newco any claims, rights or benefits that are transferred
to Holdco or Newco and that require prosecution or enforcement in the name of
such Seller or Arby's.
(b) RTM, Holdco and Newco. At any time on or after the Closing
Date, RTM, Holdco and Newco will execute and deliver any further assignments,
conveyances and other assurances, documents and instruments of transfer
reasonably requested by the Sellers or Arby's and will take any other action
consistent with the terms of this Agreement that may be reasonably requested by
the Sellers or Arby's for the purpose of assigning, transferring, granting,
conveying and confirming to Newco, or reducing to possession, any or all of the
Assets, or as necessary to carry out RTM's, Holdco's and Newco's obligations
under this Agreement and the other Transaction Documents. If reasonably
requested by the Sellers or Arby's, RTM, Holdco and Newco further agree, at the
sole cost of Sellers and Arby's, to prosecute or otherwise enforce in its own
name for the benefit of the Sellers and Arby's any claims, rights or benefits
that are transferred to the Sellers or Arby's by this Agreement and the other
Transaction Documents and that require prosecution or enforcement in RTM's,
Holdco's or Newco's name.
5.15 Replacement of Bonds and Letters of Credit. Set forth on Schedule 5.15
hereto, is a list of all bonds and letters of credit posted by or on behalf of
the Sellers in connection with the utilities provided to the Restaurants. Holdco
agrees that it will, or will cause Newco One to, replace each such bond or
letter of credit with a bond or letter of credit obtained by Holdco or Newco One
on or prior to the earlier of (i) 45 days after the date of the Closing and (ii)
the expiration date for such bond or letter of credit. Holdco agrees to
indemnify and hold harmless each of the Sellers and Arby's from and against any
Losses (as hereinafter defined) incurred by the Sellers or Arby's after the
Closing in connection with, or in any way relating to, the bonds and letters of
credit listed on Schedule 5.15 hereto.
5.16 FFCA Loan Agreements. The Sellers agree that, prior to the
Closing, they will not, and will not permit Newco One or Newco Two to, borrow
any additional funds under the FFCA Loan Agreements, nor shall Sellers (or any
of them) request any additional advance, or borrow any additional funds, under
the FFCA Loan Agreements.
5.17 Amendment of all Schedules. The parties hereto acknowledge and
agree that notwithstanding anything to the contrary set forth herein, Sellers
shall deliver, amend, modify or delete any and all of the Schedules attached
hereto at any time after the date hereof up to and including the Final Date,
subject to Holdco's review and reasonable approval thereof and to Section 6.1
below, provided that the Sellers may not amend Schedule 3.17 to add any
contracts which (A) has a term that expires more than one year after the Closing
Date, or (B) pursuant to the terms of which there is either a current or future
obligation of Newco to make an annual payment in excess of (x) $20,000 with
respect to capital improvements of any Restaurant or (y) $10,000 with respect to
the operations of any Restaurant, or (C) which materially affects the business,
operations, assets (including, without limitation, the Assets), properties or
condition of Newco or was not executed in the ordinary course of operating
Restaurants.
5.18 Excluded Liabilities. The Sellers and Arby's covenant and agree
to pay all Excluded Liabilities.
ARTICLE VI
CONDITIONS TO HOLDCO'S OBLIGATIONS
The obligations of Holdco under this Agreement to consummate the
purchase of the Shares shall be subject to the fulfillment on or prior to the
Closing Date of each of the following conditions:
6.1 Representations and Warranties True; Obligations Performed. The
representations and warranties of each Seller and Arby's contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same force and effect as if made as of the Closing Date, except
those representations and warranties that relate to a specific date, which shall
be true and correct in all material respects as of such date, and all the
covenants contained in this Agreement to be complied with by each Seller on or
before the Closing Date shall have been complied
with in all material respects. If and to the extent the representation and
warranties of any Seller and Arby's contained in this Agreement are not true and
correct in all material respects as of the Closing Date (or such other specific
date) and the covenants and conditions contained in this Agreement to be
complied with in all material respects by any Seller on or before the Closing
Date have not been so complied with, then such Seller shall promptly notify
Holdco in writing in reasonable detail thereof before consummation of the
Closing. At the Closing, each Seller and Arby's shall deliver to Holdco an
officer's certificate as to compliance by such Seller with the conditions set
forth in this Paragraph 6.1. The information to be set forth on any and all
Schedules and the forms of any and all Exhibits, shall be subject to the review
and reasonable approval of Holdco and Sellers prior to Closing. In the event
that any condition precedent in this Article 6 is not satisfied in full prior to
Closing or waived by Holdco in its sole election, then Holdco and Sellers agree
to use their respective commercially reasonable efforts, in good faith, to
negotiate an adjustment to the consideration payable by Holdco under Section
2.3(a)(i) and/or to the Assumed Liabilities under Section 2.4 above, taking into
account the information originally provided to RTM and the basis upon which the
parties originally structured this transaction and entered into this Agreement.
The parties acknowledge that because Sellers are unable to transfer the right to
own and operate Store No. 2035, then Holdco and Sellers agree to use their
respective commercially reasonable efforts, in good faith, to negotiate an
adjustment to the consideration payable by Holdco under Section 2.3(a)(i) and/or
to the Assumed Liabilities under Section 2.4 above, taking into account the
information originally provided to RTM and the basis upon which the parties
originally structured this transaction and entered into this Agreement.
6.2 Closing Deliveries of the Sellers. All of the items below shall
have been delivered, and all of the transactions described shall have been
consummated at or prior to the Closing:
(a) Share Certificates. Sellers shall have delivered stock
certificates representing all of the Shares, duly endorsed for transfer or
accompanied by duly executed stock powers;
(b) Directors' Resolutions. Sellers and Arby's shall have
delivered copies certified by the Secretary or Assistant Secretary of each
Seller and Arby's of resolutions of the Board of Directors of such Seller and
Arby's authorizing the execution and delivery of this Agreement and the
Transaction Documents and consummation of the transactions contemplated herein
and therein;
(c) Lease Assignment and Assumption Agreements. Sellers shall
have delivered Lease Assignment and Assumption Agreements of the Restaurant
Leases by Newco, in substantially the form shown on Exhibit 6.2(c) hereto;
(d) Licenses. Arby's shall have executed and delivered the
Licenses for each of the Restaurants;
(e) Consents. Sellers shall have delivered executed copies of
each of the consents listed on Schedule 6.2(e) hereto;
(f) FIRPTA Certificate. Sellers shall have delivered a certificate
duly executed by each Seller setting forth such Seller's address and tax
identification number certifying that such Seller is not a foreign person for
purposes of the foreign investment in real property tax act, substantially in
the form of Exhibit 6.2(f) hereto;
(g) Possession of Assets. Prior to the Closing , the Sellers shall
have delivered to Newco full possession of the Assets or executed the power of
attorney or Operating Agreement referred to in Paragraph 5.8 hereof with respect
to those Assets not so delivered to Newco;
(h) Special Warranty Xxxx of Sale. Sellers shall have delivered
to Newco Special warranty bills of sale in and to the FF&E located at the
Restaurants, and to the District PP&E, in each case, substantially in the form
of Exhibit 6.2(h) hereto;
(i) Special Warranty Deed. Sellers shall have delivered to Newco
Special Warranty Deeds in and to the Owned Real Property, substantially in the
form of Exhibit 6.2(i) hereto;
(j) Landlord's Estoppel Certificates and Consents. Sellers shall
have delivered to Newco Landlord's Estoppel Certificates and Consents for those
Restaurants listed on Schedule 6.2(j), substantially in the form of Exhibit
6.2(j) hereto;
(k) Quitclaim Deed. Sellers shall have delivered to Newco
Quitclaim Deeds, substantially in the form of Exhibit 6.2(k) hereto, which
convey any and all right, title and interest that each Seller has in and to the
leasehold improvements located at the locations covered by the Restaurant
Leases, if not conveyed by assignment of the applicable Restaurant Lease;
(l) Equipment Lease Assignment and Assumption Agreement. Sellers
shall have delivered to Newco lease assignment and assumption agreements
assigning the Equipment Leases, substantially in the form of Exhibit 6.2(l)
hereto;
(m) Owner's Affidavit. Each Seller shall have delivered to
Holdco, an Owner's Affidavit which applies to the Owned Store Real Property,
substantially in the form of Exhibit 6.2(m) hereto;
(n) Assumption of Debt Documents. Newco shall have executed and
delivered assignments and assumption agreements evidencing the assumption by
Newco of each of the Debt Documents in the form and substance reasonably
satisfactory to Holdco.
(o) Security Deposits. Sellers shall have delivered to Newco
[One] an assignment of all of Seller's right, title and interest in and to the
Security Deposits;
(p) Resignations. Each of the directors and officers of Newco
shall have resigned effective as of the Closing.
(q) HSR Act. The applicable waiting period under the HSR Act shall
have expired or been terminated.
(r) Management Agreements. Newco One shall have executed and
delivered the Management Agreements with each of RTM and RTM Management,
substantially in the form of Exhibit 6.2(r) hereto (the "Management Agreement").
(s) Landlord's Estoppel Certificates and Consents. Newco shall
have delivered to Sellers Landlord's Estoppel Certificates and Consents for
those Restaurants listed on Schedule 7.2(s), substantially in the form of
Exhibit 7.2(s) hereto.
(t) Development Agreement. At or prior to Closing, Arby's shall
have executed and delivered a development agreement substantially in the form
of Exhibit 7.2(n) hereto (the "Development Agreement").
(u) FFCA Loan Agreement Amendments. FFCA shall have agreed to the
Amendments to the FFCA Loan Agreements described in Schedule 5.5 hereto.
6.3 No Injunction. As of the Closing, there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental or regulatory agency of competent jurisdiction
to the effect that the transfer of the Assets to Newco or the sale of the Shares
to Holdco may not be consummated as herein provided, no proceeding or lawsuit
shall have been commenced by any court, governmental or regulatory agency for
the purpose of obtaining any such injunction, writ or preliminary restraining
order and no written notice shall have been received from any such court or
agency indicating an intent to restrain, prevent, materially delay or
restructure the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO THE SELLERS' OBLIGATIONS
The Obligations of the Sellers under this Agreement to consummate the
sale of the Shares shall be subject to the fulfillment on or prior to the
Closing Date of each of the following conditions:
7.1 Representations and Warranties True; Obligations Performed. The
representations and warranties of each of Holdco and its Affiliates contained in
this Agreement and in the other Transaction Documents shall be true and correct
in all material respects as of the Closing Date with the same force and effect
as if made as of the Closing Date, and all the covenants contained in this
Agreement to be complied with by Holdco and its Affiliates on or before the
Closing Date shall have been complied with in all material respects. If and to
the extent the representations and warranties of Holdco and its Affiliates
contained in this Agreement or in any of the other Transaction Documents are not
true and correct in all material respects as of the Closing Date and the
covenants and conditions contained in this Agreement to be complied with in all
material respects by Holdco or its Affiliates on or before the Closing Date have
not been so complied with, then Holdco shall promptly notify the Sellers in
writing in reasonable detail thereof before consummation of the Closing. At the
Closing, Holdco shall deliver
to the Sellers an officer's certificate as to compliance by Holdco of the
conditions set forth in this Paragraph 7.1.
7.2 Closing Deliveries of Holdco and Newco. At or prior to the Closing,
Holdco and Newco, as the case may be, shall have executed and delivered to the
Sellers or otherwise caused to be delivered to the Sellers, as the case may be,
each of the following documents or other items:
(a) Payment. At the Closing, Newco shall have assumed the Assumed
Liabilities, as described in Paragraph 2.4, and, to the extent provided in
Paragraph 2.6(c), the Excluded FFCA Liabilities, in each case pursuant to
assignment and assumption agreements in form and substance reasonably
satisfactory to the Sellers;
(b)(i) The Notes. RTM shall have executed and delivered to the
Sellers the Notes. (ii) Cash Payment. Holdco shall have made the cash payment
required pursuant to this Agreement.
(c) Lease Assignment and Assumption Agreement. Newco shall have
executed and delivered Lease Assignment and Assumption Agreements with respect
to the Restaurant Leases, substantially in the form of Exhibit 6.2(c) hereto;
(d) Equipment Lease Assignment and Assumption Agreement. Newco
shall have executed and delivered lease assignment and assumption agreements
with respect to the Equipment Leases substantially in the form of Exhibit 6.2(l)
hereto;
(e) Debt Documents Assignment and Assumption Agreements. Newco
shall have executed and delivered assignment and assumption agreements
evidencing the assumption by Newco of each of the Debt Documents in form and
substance reasonably satisfactory to the Sellers;
(f) Licenses. Newco One shall have executed and delivered the
Licenses for each of the Restaurants;
(g) Articles of Incorporation; Bylaws. Holdco shall have
delivered certified copies of the Articles of Incorporation and by-laws of
Holdco;
(h) Certificate of Good Standing. Holdco shall have delivered a
Certificate of Good Standing of Holdco from its jurisdiction of incorporation;
(i) Directors' Resolutions. Holdco shall have delivered copies,
certified by the Secretary of RTM, Holdco and RTM Management, of resolutions of
the Board of Directors of RTM, Holdco and RTM Management authorizing the
execution and delivery of this Agreement and/or the Transaction Documents to
which such entity is a party and consummation of the transactions contemplated
herein and therein;
(j) Holdco Consents. Holdco shall have delivered executed copies
of each of the consents listed on Schedule 7.2 (j) hereto;
(k) Option Agreements. Holdco shall have executed and delivered to
each Seller Option Agreements substantially in the form of Exhibit 7.2(k)
hereto, which Option Agreements, in the aggregate, grant to the Sellers the
right to acquire 20% of the outstanding shares of Newco One and 20% of the
outstanding shares of Newco Two;
(l) Guaranty. RTM, Holdco, Newco One and RTM Management shall
have executed and delivered a Guaranty substantially in the form of Exhibit
7.2 (1) hereto (the "Guaranty");
(m) Indemnification of Guarantees. RTM shall have executed and
delivered an indemnification agreement, in form and substance reasonably
satisfactory to the Sellers, evidencing the indemnification by RTM of Triarc
Companies, Inc. ("Triarc") for any amounts paid by Triarc under any of the
guarantees listed on Schedule 7.2 (m) hereto; and
(n) Development Agreement. At or prior to the Closing, Newco One
shall have executed and delivered the Development Agreement.
(o) HSR Act. The applicable waiting period under the HSR Act shall
have expired or been terminated.
(p) Management Agreement. RTM and RTM Management shall have
executed and delivered the Management Agreements to which they are a party,
respectively.
(q) Opinion of Counsel. The Sellers shall have received the
opinion of outside counsel to Holdco, who shall be reasonably acceptable to the
Sellers, dated the Closing Date, addressed to the Sellers, as to the
enforceability of the Notes, the Guaranty and the Security Documents (as defined
in the Guaranty), excluding real estate
Security Documents, against RTM, Holdco, Newco, RTM Management and the
Principals (as defined in the Guaranty) as the case may be.
(r) Sellers' Legal Opinion. The Sellers shall have received the
favorable opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to the
Sellers, covering such matters relating to the Transaction Documents and the
consummation of the transactions thereby as the Sellers may reasonably request,
the cost of which shall be borne by Sellers.
(s) Landlord's Estoppel Certificates and Consents. Newco shall
have delivered to Sellers Landlord's Estoppel Certificates and Consents for
those Restaurants listed on Schedule 7.2(s), substantially in the form of
Exhibit 7.2(s) hereto.
(t) FFCA Loan Agreements Amendments. FFCA shall have agreed to
the amendments to the FFCA Loan Agreements described in Schedule 5.5 hereto.
7.3 No Injunction. As of the Closing, there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental or regulatory agency of competent jurisdiction
to the effect that the transfer of the Assets to Newco or the sale of the Shares
to Holdco may not be consummated as herein provided, no proceeding or lawsuit
shall have been commenced by any court, governmental or regulatory agency for
the purpose of obtaining any such injunction, writ or preliminary restraining
order and no written notice shall have been received from any such court or
agency indicating an intent to restrain, prevent, materially delay or
restructure the transactions contemplated by this Agreement.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties of the Sellers and
Arby's After Closing. All representations, warranties, covenants and agreements
of the Sellers and Arby's and Holdco and its Affiliates in this Agreement and
the Transaction Documents shall survive the execution and delivery of this
Agreement and the Closing hereunder. Except as otherwise specifically provided
in this Agreement, all representations and warranties of the Sellers and Arby's
contained in this Agreement or in any Transaction Documents shall thereafter
terminate and expire (i) on the date that is one (1) year from
the Closing Date, with respect to any General Claim (as defined below) based
upon, arising out of or otherwise in respect of any fact, circumstance, action
or proceeding of which Holdco shall not have given written notice to the Sellers
on or prior to the date that is one (1) year from the Closing Date, (ii) with
respect to any Tax Claim (as defined below), on the later of (a) the date upon
which the liability to which any such Tax Claim may relate is barred by all
applicable statutes of limitation or (b) the date upon which any claim for
refund or credit related to such Tax Claim is barred by all applicable statutes
of limitations, and (iii) on the fifth anniversary of the Closing Date, with
respect to any Environmental Claim (as defined below) based upon, arising out of
or otherwise in respect of any fact, circumstance, action or proceeding of which
Holdco shall not have given written notice to the Sellers and Arby's on or prior
to the fifth anniversary of the Closing Date and (iv) as of the Closing with
respect to Paragraph 3.09 hereof. Except as otherwise provided in this
Agreement, the covenant and agreement of the Sellers and Arby's contained in
Paragraph 5.18 shall terminate and expire on the date upon which such Excluded
Liability to which it may relate is barred by all applicable statutes of
limitation. As used in this Agreement, the following terms have the following
meanings:
(w) "General Claim" means any claim (other than a Tax Claim, an
Environmental Claim or a Special Claim) based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of any representation, warranty,
covenant or agreement of any Seller or Arby's contained in this Agreement or in
any Transaction Document delivered pursuant to this Agreement.
(x) "Tax Claim" means any claim based upon, arising out of or otherwise
in respect of any inaccuracy in or any breach of any representation, warranty,
covenant or agreement of any Seller or Arby's contained in this Agreement or in
any Transaction Document delivered pursuant to this Agreement related to taxes.
(y) "Environmental Claim" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of the representation
and warranties of any Seller or Arby's contained in Paragraph 3.11 hereof.
(z) "Special Claim" means any claim based upon, arising out of or
otherwise in respect of any breach of any covenant or agreement of any Seller or
Arby's with respect to (i) any lawsuit or worker's compensation claim pending on
the Closing Date which relates solely to the ownership or operation of the
Restaurants by the Sellers on or prior to the Final Date, (ii) the payment by
the Sellers of the Excluded Liabilities and/or the Excluded FFCA Liabilities,
(iii) failure by the Sellers to comply with applicable bulk sales laws.
8.2 Obligation of the Sellers and Arby's to Indemnify. Subject to the
limitations contained in Paragraph 8.1 and Paragraph 8.5, each of the Sellers,
jointly and severally, and Arby's, severally and not jointly, agrees to
indemnify, defend and hold harmless Holdco (and its directors, officers,
employees, affiliates, successors and assigns) from and against all losses,
liabilities, damages, deficiencies, demands, claims, actions, judgments or
causes of action, assessments, costs or expenses (including, without limitation,
interest, penalties and reasonable attorneys' fees and disbursements)("Losses")
based upon, arising out of or otherwise in respect of (i) any inaccuracy in or
any breach of any representation, warranty, covenant or agreement of such Seller
contained in this Agreement or in any Transaction Document delivered pursuant to
this Agreement or (ii) the failure of such Seller to comply with any applicable
bulk sales law.
8.3 Obligation of Holdco to Indemnify. Holdco agrees to indemnify,
defend and hold harmless the Sellers from and against all Losses based upon,
arising out of or otherwise in respect of (i) any inaccuracy in or any breach of
any representation, warranty, covenant or agreement of Holdco, RTM or any of
their Affiliates contained in this Agreement or in any Transaction Document
delivered pursuant to this Agreement, (ii) the operations of Newco from and
after the Closing Date and (iii) any Assumed Liabilities, until paid. Except as
otherwise provided in this Agreement, the covenant and agreement of Holdco in
respect of any Assumed Liability shall terminate and expire upon the date upon
which such Assumed Liability is barred by all applicable statutes of limitation.
8.4 Notice and Opportunity to Defend.
(a) Notice of Claims. Promptly after receipt by any party hereto
(the "Indemnitee") of notice of any demand, claim or circumstances which, with
the lapse of time, would or might give rise to a claim or the commencement (or
threatened commencement) of any action, proceeding or investigation (an
"Asserted Liability") that may result in a Loss, the Indemnitee shall give
notice thereof (the "Claims Notice") to any other party (or parties) obligated
to provide indemnification pursuant to Paragraph 8.2 or 8.3 hereof (the
"Indemnifying Party"). The Claims Notice shall describe the Asserted Liability
in reasonable detail, and shall indicate the amount (estimated, if necessary and
to the extent feasible) of the Loss that has been or may be suffered by the
Indemnitee.
(b) Opportunity to Defend. The Indemnifying Party may elect to
compromise or defend, at its own expense and by its own counsel, any Asserted
Liability. If the Indemnifying Party elects to compromise or defend such
Asserted Liability, it shall within 30 days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Asserted Liability. If the
Indemnifying Party elects not to compromise or defend the Asserted Liability,
fails to notify the Indemnitee of its election as herein provided or contests
its obligation to indemnify under this Agreement, the Indemnitee may pay,
compromise or defend such Asserted Liability. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or compromise any
claim over the objection of the other; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld. In any event, the
Indemnitee and the Indemnifying Party may participate, at their own expense, in
the defense of such Asserted Liability. If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the Indemnifying Party
any books, records or other documents within its control that are necessary or
appropriate for such defense.
8.5 Limitations on Indemnification. The indemnification provided for
in Paragraph 8.2 shall be subject to the following limitations:
(i) The Sellers and Arby's shall not be obligated to pay any
amounts for indemnification under this Article VIII, except those based
upon, arising out of or otherwise in respect of Special Claims or
Paragraphs 3.1(c), 3.2, 3.10, 3.14, 5.3, 5.18 and 9.5 hereof (collectively,
the "Basket Exclusions"), until the aggregate amounts for indemnification,
exclusive of those based on the Basket Exclusions, equals $2,000,000 (the
"Basket Amount"), whereupon the Sellers shall be obligated to pay in full
all such amounts for indemnification in excess of the Basket Amount.
(ii) Subject to the limitations set forth in clauses (iii) and
(iv) of this Section 8.5 the Sellers and Arby's shall be obligated to pay
any amounts for indemnification based on the Basket Exclusions (in
accordance with their liability as set forth in Paragraph 8.2) without
regard to the individual or aggregate amounts thereof and without regard to
whether the aggregate of all other indemnification payments shall have
exceeded, in the aggregate, the Basket Amount.
(iii) The indemnification obligations of the Sellers hereunder
shall not exceed, in the aggregate, $55,000,000.
(iv) The indemnification obligations of Sellers under Section
8.2 ("Sellers' Indemnification Obligations") shall be suspended (and Seller
shall not be required to make any indemnification payments) from and after the
date on which the legality or enforceability of the Guaranty as against any of
the Guarantors is challenged in any judicial (or alternative dispute resolution)
action or proceeding and shall remain suspended until a final, non-appealable,
decision is rendered in such action or proceeding. Sellers' Indemnification
Obligations shall cease and determine, and be of no further force or effect, and
Sellers shall have no liability therefor, from and after the first date on which
(a) it is determined that the Guaranty cannot be enforced as against any one or
more of the Guarantors or (b) any one or more of the Guarantors shall fail
timely to honor its stated obligations under the Guaranty for any reason
whatsoever, including, without limitation, its inability or unwillingness to do
so.
8.6 Computation of Losses. (i) The amount of any Losses for which
indemnification is provided under this Article VIII shall be reduced by 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 Indemnitee 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 Indemnitee in obtaining such
recovery. Notwithstanding the foregoing, if (x) the amount of Indemnifiable
Losses for which the Indemnifying Party is obligated to indemnify the Indemnitee
is reduced by any insurance recovery in accordance with the provisions of the
previous sentence, and (y) the Indemnitee subsequently is required to repay the
amount of any such insurance recovery or such 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 shall be paid promptly
to the Indemnitee in accordance with the provisions of this Agreement.
(ii) With respect to claims for indemnification pursuant to this
Article VIII, Losses shall not include any Losses (i) which constitute costs of
causing the operation of the Restaurants to comply with applicable laws to the
extent any costs so incurred exceed the Commercially Reasonable Costs of causing
the operation of the Restaurants to comply in all material respects with such
laws; (ii) which constitute costs of operating the Restaurants in the ordinary
course in compliance with applicable laws in all material respects except to the
extent such costs constitute Commercially Reasonable Costs arising out of
violations of applicable laws that existed or occurred at or prior to the
Closing; or (iii) which constitute costs of conducting the investigation and
remediation of environmental conditions to the extent such costs exceed the
Commercially Reasonable Costs of conducting investigation and remediation of
said environmental conditions. For purposes of this Agreement, "Commercially
Reasonable Costs" shall mean the costs which a reasonably prudent person, acting
in a commercially reasonable manner and seeking to minimize or mitigate his
expenses to the extent reasonably practicable consistent with prudent business
practices (assuming such person did not have any right of indemnity under this
Agreement), would expend to resolve the matter.
8.7 Sole Remedy. Holdco acknowledges that the indemnification
provisions contained in this Article VIII constitute Holdco's sole remedy
following the Closing with respect to any of the matters arising out of or in
connection with this Agreement. Holdco acknowledges and agrees that: (i) Holdco
and its Affiliates have the experience and knowledge to evaluate the business,
financial condition, assets and liabilities of the Sellers and Arby's; and (ii)
in determining to acquire the Shares and, therefore, the underlying assets and
liabilities of Newco (including the real property, fixtures and tangible
personal property), Holdco has made its own investigation into, and based
thereon Holdco has formed an independent judgment concerning, the Shares and the
underlying assets and liabilities of Newco (including the real property,
fixtures and tangible personal property). It is therefore expressly understood
and agreed that Holdco hereby waives, releases and agrees not to make any claim
or bring any contribution, cost recovery or other action against the Sellers,
their Affiliates, and, if applicable, their respective directors, officers,
shareholders, partners, attorneys, accountants, agents and employees and their
heirs, successors and assigns, under any applicable law (including environmental
laws) or regulation now existing or hereafter enacted other than for Losses for
which the Sellers are expressly required to indemnify Holdco under this Article
VIII. Holdco agrees that it will not bring any such claim or action under any
law or regulation (including environmental laws) which seeks to allocate
liabilities between Holdco and the Sellers 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 laws in effect on the date hereof.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Headings. The subject headings of the paragraphs, sections and
subsections of this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions.
9.2 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior agreements, representations and understandings of
the parties.
No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by both parties. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
9.3 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.4 Binding Effect. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
9.5 Expenses. Except as expressly provided herein, Holdco and the
Sellers shall each respectively be responsible for their own fees and expenses
(and those of their Affiliates), including the fees and expenses of its counsel,
accountants and other advisors, incurred in connection with the preparation,
execution and delivery of this Agreement and the other Transaction Documents,
including, but not limited to, legal and accounting fees. Each of Holdco, on the
one hand, and the Sellers, on the other hand, agree to be liable for one-half of
(i) the fees payable by each of the parties hereto under the HSR Act, (ii) the
payment of all FFCA costs and FFCA related mortgage recording and other charges,
and (iii) all sales, transfer and use taxes and similar charges (other than any
transferee liability with respect to taxes relating to non-compliance with bulk
sales laws, which shall be borne by Sellers), if any, arising out of any
transfers of the Assets contemplated by this Agreement, including the transfer
of assets to Newco.
9.6 Nature of Representations. No representations or warranties
whatsoever are made by any party, except as specifically set forth in this
Agreement, or as specifically set forth in any schedule, instrument,
certificate, exhibit or other writing provided for herein. All statements
contained in any such instrument or other writing shall be deemed to be
representations and warranties under this Agreement to the extent specified in
this Agreement. All such representations and warranties shall not survive the
execution and delivery of this Agreement.
9.7 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally or telecopied (receipt
confirmed) on the party to whom notice is to be given, one (1) business day
after the date of depositing the same with a reputable overnight courier service
or five (5) days after the date of depositing the same in the U.S. mail, if
mailed to the party to whom notice is to be given, by first-class mail,
registered or certified, postage prepaid and properly addressed as follows:
To any Seller:
c/o Arby's, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
To RTM:
RTM, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Senior Vice President
To Holdco:
[Holdco]
c/o RTM, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Senior Vice President
with a copy to:
Arnall Golden & Xxxxxxx
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Any party may change its address for purposes of this section by giving
the other party written notice of the new address in the manner set forth above.
9.8 Governing Law. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of Florida applicable to agreements
made and to be performed entirely within such State.
9.9 Jurisdiction.
(a) Any action or proceeding relating in any way to this Agreement
or any of the Transaction Documents may be brought and enforced in the courts of
the State of Florida or of the United States that are located in Broward County,
Florida, and each of the parties irrevocably consents to the jurisdiction of
each such court in respect of any such action or proceeding. Each of the parties
further irrevocably consents to the service of process in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, return receipt requested, to such party at its address as
provided for notices hereunder. The foregoing shall not limit the right of any
party to serve process in any other jurisdiction.
(b) Each party hereby irrevocably waives any objection that it may
now or hereafter have to the laying of venue of any action or proceeding arising
under or relating to this Agreement or any other Transaction Documents in any
court located in any jurisdiction chosen by any other party in accordance with
clause (a) of this Paragraph 9.9, and hereby further irrevocably waives any
claim that a court located in any such jurisdiction is not a convenient forum
for any such action or proceeding.
(c) Each party hereby irrevocably waives, to the fullest extent
permitted by applicable law, all immunity (whether on the basis of sovereignty
or otherwise) from jurisdiction, attachment (both before and after judgment) and
execution to which it might otherwise be entitled in any action or proceeding
relating in any way to this Agreement or any of the Transaction Documents in the
courts of the State of Florida of the United States located in Broward County,
Florida or of any other country or jurisdiction, and each party hereby waives
any right it might otherwise have to raise or claim or cause to be pleaded any
such immunity at or in respect of any such action or proceeding.
9.10 Confidentiality. At all times, both during the term of this
Agreement and after the Closing, each of the parties hereto and their respective
agents,
representatives, attorneys, accountants, financial advisors, partners and
employees shall keep strictly confidential all non-public confidential or
proprietary information in the possession of or known by them in connection with
the business or operations of any of the other parties hereto. All information
provided or obtained by Holdco or any of its Affiliates pursuant to this
Agreement and the Transaction Documents shall be held in accordance with and
subject to the terms of the Confidentiality Agreement, dated October 28, 1996,
between RTM and Arby's (the "Confidentiality Agreement").
9.11 Public Announcement. Neither the Sellers, nor Holdco or any of
their respective affiliates (including, without limitation Triarc or RTM) shall
make any public announcement concerning the subject of this Agreement or any of
the Transaction Documents without the prior written approval of the other
parties to this Agreement, except as may be required to comply with the
requirements of applicable law or the rules and regulations of any applicable
stock exchange, and then only after consultation with the other parties to this
Agreement.
9.12 Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect.
9.13 Limitation on Rights of Third Parties. Nothing expressed or
implied in this Agreement is intended, or shall be construed, to confer upon or
give any person, other than the parties hereto, and their permitted successors
or assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, or result in such person, being deemed a third party
beneficiary of this Agreement. 9.14 Valuation For Tax Reporting Purposes. RTM
and the Sellers shall cooperate on the allocation of the Purchase Price together
with the Assumed Liabilities and any other consideration payable pursuant to
this Agreement to be used in preparing and filing their
respective Forms 8594 with the Internal Revenue Service, as required by Section
1060 of the Code and for all other relevant federal and state tax purposes.
9.15 Cooperation on Taxes. RTM, Holdco and the Sellers will, in good
faith, provide each other with such cooperation and information as either of
them reasonably may request of the other in filing any tax return, amended tax
return or claim for refund, determining a liability for taxes or a right to a
refund of taxes or conducting any audit or any other proceeding in respect of
taxes. Each party shall use its reasonable best efforts to make its employees
and agents (including attorneys, accountants and other professionals) available
to the other on a mutually convenient basis to provide explanations of any
documents or information provided hereunder. RTM, Holdco and the Sellers will
provide such cooperation and assistance at their own expense, provided however,
that all out-of-pocket fees and expenses, including fees and expenses of outside
accountants and lawyers, shall be paid by the party requesting such cooperation
and assistance. RTM and Holdco will retain any material records or other
documents that they obtain pursuant to this Agreement or any of the Transaction
Documents which relate to tax matters of Sellers for taxable periods through the
Closing Date until six months after the expiration of the statute of limitations
(including any extensions) applicable to such returns and other documents. Any
information pertaining to Sellers' taxes shall be kept confidential by RTM and
Holdco. Upon the expiration of any statute of limitations (including any
extensions), with respect to a taxable period, RTM and Holdco shall offer to
provide to the Sellers all records with respect to such period before destroying
such records.
9.16 Termination and Cancellation.
(a) This Agreement may be terminated as follows: (i) at the election of
Holdco, if one or more of the conditions contained in Article VI to the
obligations of Holdco to close has not been satisfied or waived on or prior to
June 30, 1997, (ii) at the election of the Sellers, if one or more of the
conditions contained in Article VII to their obligation to close has not been
satisfied or waived on or prior to June 30, 1997 or (iii) at any time prior to
the Closing Date by the mutual written consent of the parties hereto. If this
Agreement is terminated pursuant to the provisions hereof and
the transactions contemplated hereby are not consummated as described herein the
parties hereto agree that the provisions of the Confidentiality Agreement shall
survive and remain in full force and effect in accordance with the terms thereof
for the period provided therein.
(b) Upon the termination of this Agreement, each party shall bear its
own expenses incurred in connection with the negotiation, preparation, execution
and performance of this Agreement. In the event of the termination of this
Agreement due to a breach by any party of its material obligations under this
Agreement, such breaching party shall bear the reasonable expenses of the other
parties incurred in connection with the negotiation, preparation, execution and
performance of this Agreement in addition to any other damages that may be
applicable.
9.17 Assignment. No party may assign this Agreement or any part hereof,
without the prior written consent of the other parties hereto.
9.18 No Solicitation, Etc.. Subject to any fiduciary duties under
applicable law, from the date of this Agreement until the earlier of: (i) 90
days from the date hereof, (ii) the Closing or (iii) this Agreement is
terminated as provided in Article VIII of this Agreement, the Sellers and Arby's
and Triarc shall not solicit or enter into any discussions or negotiations with
or furnish or cause to be furnished any information concerning the Sellers or
Arby's to any person or entity (other than Holdco and its officers, directors,
shareholders, employees and other agents) in connection with any acquisition of
all or substantially all of the Restaurants, whether by merger, sale of capital
stock, sale of assets or other business combination involving the Sellers or
Arby's.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
ARBY'S , INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP & XX
XXXXXXX:
ARBY'S RESTAURANT DEVELOPMENT CORPORATION
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP
ARBY'S RESTAURANT HOLDING COMPANY
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP
ARBY'S RESTAURANT OPERATIONS COMPANY
By: /s/Xxxx X. Xxxxxx, Xx.
------------------------
Its: VP
Triarc Companies, Inc. ("Triarc") hereby irrevocably guarantees the prompt and
complete payment and/or performance by the Sellers and Arby's, Inc. of each of
the Seller's and Arby's, Inc.'s obligations under this Agreement; provided,
however, that any time after the date hereof Arby's, Inc. or any direct or
indirect parent company of Arby's, Inc. which owns more than 50% of the
outstanding voting securities of Arby's, Inc. may be substituted for Triarc as
guarantor and Triarc shall be released from its obligations hereunder, subject
to the approval of Holdco, which will not be withheld unreasonably, if Arby's,
Inc. or such parent expressly assumes in writing the prompt and complete payment
and/or performance of the Sellers' and Arby's, Inc.'s obligations under this
Agreement.
Such guaranty shall survive the Closing.
TRIARC COMPANIES, INC.
By: /s/Xxxx X. Xxxxxx, Xx.
------------------------
Its: SVP
PURCHASER:
RTM PARTNERS, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Its: SVP
For purposes of Paragraphs 5.7, 5.11, 9.14 and 9.15 only:
RTM, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Its: SVP
In addition to the foregoing, RTM, Inc. hereby irrevocably guarantees the prompt
and complete payment and/or performance by RTM Partners, Inc. of all of RTM
Partners, Inc.'s obligations under this Agreement. Such guaranty shall terminate
at the Closing.
RTM, INC.
By: /s/Xxxxxx X. Xxxxxx
------------------------
Its: SVP
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Its: SVP
SUMMARY OF OMITTED SCHEDULES AND EXHIBITS
SCHEDULES
1(a) -- Restaurants
1(b) -- Multi-Brand Locations
2 -- Owned Store Real Property
3 -- Capitalized Leases
4 -- Operating Leases and Other Debt Documents
5 -- Equipment Leases
6 -- Xxxxx Cash
7 -- Restaurant Leases
2.5 -- Excluded Liabilities
3.3 -- No Conflict; Consents
3.4 -- Compliance with Laws
3.7 -- Litigation; Judgements
3.11 -- No Hazardous Substance
3.13 -- Owned Store Real Property; Liens
3.16 -- Subsidiaries
3.17 -- Contracts
4.6 -- Capitalization of Holdco
5.5 -- Amendments to FFCA Loan Agreements
5.15 -- Bonds and Letters of Credit
6.2(j) -- Restaurants Requiring Landlord's Estoppel Certificates and
Consents
7.2(m) -- Indemnification of Guarantees
7.2(s) -- Restaurants Requiring Landlord's Estoppel Certificates and
Consents
EXHIBITS
1(a), (b), (c) -- Form of Multi-Brand Licenses
2.3 -- Form of Notes
5.8 -- Form of Operating Agreement
6.2(c) -- Form of Lease Assignment and Assumption Agreements
6.2(e) -- Consents
6.2(f) -- Form of FIRPTA Certificate
6.2(h) -- Form of Special Warranty Xxxx of Sale
6.2(i) -- Form of Special Warranty Deed
6.2(j) -- Form of Landlord's Estoppel Certificates and Consents
6.2(k) -- Form of Quitclaim Deed
6.2(l) -- Form of Equipment Lease Assignment and Assumption
Agreement
6.2(m) -- Form of Owner's Affidavit
6.2(r) -- Form of Management Agreement
7.2(j) -- Holdco Consents
7.2(k) -- Form of Option Agreement
7.2(l) -- Form of Guaranty
7.2(n) -- Form of Development Agreement
7.2(s) -- Form of Landlord's Estoppel Certificates and Consents
The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Securities and Exchange Commission upon its request.
