TAX SHARING AGREEMENT
TAX SHARING AGREEMENT (the "Agreement"), made as of the 25th day
of November, 1997 by and among Triarc Companies, Inc., a Delaware corporation
("TRI"), and Cable Car Beverage Corporation, a Delaware corporation ("CCB").
TRI is the common parent of an affiliated group (within the meaning of
Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code")) of
corporations (collectively the "TRI Group") of which CCB is a member, and files
consolidated federal income tax returns on the basis of a taxable year ending
December 31st on behalf of itself and all other members of the TRI Group.
Each of TRI and CCB desires to provide, from and after the date hereof
(the "Effective Date"), for payment on behalf of CCB and any direct or indirect
subsidiaries of CCB that may now or after the Effective Date be included in the
TRI Group (the "CCB Subsidiaries") (hereinafter, CCB and the CCB Subsidiaries
(if any) are sometimes collectively referred to as the "CCB Group") to TRI of
the amounts payable by the CCB Group in respect of federal income taxes and of
certain state and local taxes and for payments by TRI to CCB as provided
herein.
Accordingly, TRI and CCB agree as follows:
1. Agreement to Join in Consolidated Returns
1.1 CCB agrees to join, and to cause the other members of the CCB Group to
join, with TRI in any consolidated federal income tax return ("Consolidated
Return") for any taxable year for which TRI files a Consolidated Return that
includes CCB or such other member of the CCB Group.
1.2 CCB, on behalf of itself and the other members of the CCB Group,
hereby irrevocably designates TRI as its agent for the purpose of taking any and
all actions necessary or incidental to the filing of Consolidated Returns. CCB
agrees to furnish, and to cause the CCB Subsidiaries to furnish,
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TRI with any and all information requested by TRI in order to carry out the
provisions of this Agreement; to cooperate, and to cause the CCB Subsidiaries to
cooperate, with TRI in filing any return or consent contemplated by this
Agreement; to take such actions, and to cause the CCB Subsidiaries to take such
actions, as TRI may request, including, but not limited to, the filing of all
elections and the filing of requests for the extension of time within which to
file tax returns; and to cooperate, and to cause the CCB Subsidiaries to
cooperate, in connection with any refund claim.
1.3 In each taxable year ending after the Effective Date, CCB shall make or
cause any of the CCB Subsidiaries to make payment to TRI of an amount in respect
of federal income taxes of the CCB Group for such taxable year, determined in
accordance with Section 2 hereof, and TRI shall have the sole responsibility for
making any required payments to the Internal Revenue Service (the "Service") in
satisfaction of the consolidated federal income tax liability of the CCB Group
for such year. For each quarter of each fiscal year ending after the Effective
Date, CCB shall make or cause any of the CCB Subsidiaries to make payment to TRI
of a portion of the amount required to be paid pursuant to Section 2 hereof
equal to the amount of the installment payment of estimated income tax CCB would
be required to make on behalf of the CCB Group to the Service for such quarter
under Section 6655 of the Code no later than five business days prior to the
date upon which CCB would be required to make such payment to the Service.
Promptly following the close of each fiscal year ending after the Effective
Date, CCB shall pay or cause any of the Subsidiaries to pay to TRI the excess,
if any, of the amount payable with respect to such taxable year, determined in
accordance with Section 2 hereof, over the aggregate of all amounts previously
paid pursuant to this Section 1.3 by or on behalf of CCB to TRI with respect to
such taxable year. Each member of the CCB Group shall be jointly and severally
liable for any payments due TRI by CCB under this Agreement. If TRI fails to
file a Consolidated Return that includes the CCB Group for any taxable year for
which CCB has made or caused to be made a payment or payments pursuant to this
Section 1.3, TRI shall promptly refund such payment or payments.
1.4 The amount of any overpayment or underpayment made pursuant to Section
1.3 hereof shall be credited against or added to, as the case may be, the amount
otherwise required to be paid
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for the fiscal quarter within which the amount of such overpayment or
underpayment first becomes reasonably ascertainable; provided, however, that,
upon CCB providing to TRI all information required by the Service (including
supporting schedules) after the close of any taxable year but within the period
described in section 6425(a)(1) of the Code, TRI shall repay to or on behalf of
CCB, within the period described in section 6425(b)(1) of the Code, the amount
of any net remaining overpayment of consolidated tax liability of the CCB Group
for such year.
1.5 Except for the payments required under this Agreement, TRI agrees to
indemnify and hold harmless the CCB Group against and from any claims of
liability for federal income tax, interest thereon, and penalties with respect
thereto asserted by the Service, arising from any taxable period for which this
Agreement is in effect, provided, however, that no such indemnification shall be
made to the extent that CCB has failed to make or cause to be made any payments
required to be made to TRI in respect of such liability under the provision of
this Agreement.
1.6 CCB shall cooperate, and cause the CCB Subsidiaries to cooperate, fully
with TRI in any audit or any proceeding relating to any Consolidated Return and
shall pay an appropriate share of the expenses of any such audit or other
proceeding. TRI shall have sole control over and discretion as to the
undertaking, conduct, settlement or other disposition of any tax controversy
arising out of any Consolidated Return filed by TRI.
2. Computation of Tax Liability of the CCB Group
For the first taxable year ending after the Effective Date, and for each
subsequent taxable year of the TRI Group for which this Agreement remains in
effect, CCB shall pay or cause to be paid to TRI (in the manner provided in
Section 1.3 hereof), on behalf of itself and any members of the CCB Group, an
amount equal to the federal income tax liability that would have been payable by
the members of the CCB Group for such year, determined as if CCB had filed a
separate, consolidated federal income tax return for such year and all prior
years for which the Agreement was in effect on behalf of itself and all CCB
Subsidiaries that were includible corporations (within the meaning of
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section 1504(a)(1) of the Code) in the CCB Group for such year, computed in
accordance with the actual elections, conventions and other determinations with
respect to the CCB Group reflected in the Consolidated Return filed by TRI;
provided, however, that any item of income or loss of a member of the CCB Group
that is treated as deferred on the Consolidated Return filed by TRI (e.g.,
gain or loss on an intercompany transaction between a member of the CCG Group
and TRI that is deferred pursuant to section 1.1502-13 or 1.1502-13T of the
regulations) shall be taken into account in computing taxable income of the CCB
Group for purposes of this Agreement only at such time and in such amount as
such item is actually taken into account on the Consolidated Return filed by
TRI. If CCB shall be the sole member of the CCB Group for any year (or portion
thereof), the payment required to be made by or on behalf of CCB pursuant to
this Section 2 shall be determined as hereinbefore provided in this Section,
but as if CCB had filed a separate income tax return for such year (or portion
thereof). Any amount payable by or on behalf of CCB pursuant to this Section 2
shall be allocated among the members of the CCB Group as directed by CCB.
Payments made by CCB or on behalf of CCB by the CCB Subsidiaries pursuant to
this Section and Section 1.3 above shall be in lieu of any other payment by the
CCB Group (or any member thereof) on account of its share, if any, of the
consolidated federal income tax liability of the TRI Group for such taxable
year. Except as hereinbefore provided with respect to deferred transaction,
payments made for any taxable year by CCB pursuant to this Section 2 shall be
made without regard to the actual consolidated federal income tax liability, if
any, of the TRI Group for such taxable year.
3. Adjustments
Any adjustment of income, deduction, or credit that results after the
taxable year in question by reason of any carryback, amended return, claim for
refund, or audit shall be given effect by redetermining amounts payable and
reimbursable hereunder for such taxable year (and other taxable years, where
appropriate) for which the Agreement is in effect as if such adjustment had been
part of the original determination hereunder, with interest payable (by CCB or
TRI, as the case may be) in the amounts provided in section 6621 of the Code and
penalties thereon payable only to the extent that penalties are actually paid by
TRI to any taxing authority with respect to such adjustment.
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Except with respect to any required adjustment in accordance with Sections 1.3,
1.4, 2 and 3 hereof, any increases in the consolidated federal income tax
liability (including interest and penalties) of the TRI Group shall be the sole
responsibility of TRI and any refunds of consolidated federal income taxes
previously paid shall be the sole property of TRI.
4. Payment for Tax Benefits of Members
The CCB Group shall be entitled to a refund of federal income taxes
previously paid to TRI pursuant to this Agreement computed in the manner
described in Section 2 hereof as a result of any consolidated net operating
losses, net capital losses or tax credits claimed by the CCB Group for any
taxable year for which this Agreement is in effect (provided such losses or
credits are not in fact utilized in a taxable year in which this Agreement is
not in effect), determined as if CCB had filed a separate consolidated federal
income tax return for such year on behalf of itself and all the CCB Subsidiaries
that were includible corporations in the manner described in Section 2 above
(any such loss or credit being referred to herein as a "CCB Group Loss" and any
such entitlement to a refund being referred to herein as a "CCB Group Benefit"),
that would otherwise have been available to the CCB Group by reason of a
carryback of such CCB Group Loss, determined in accordance with the actual
election under Section 172(b)(3) of the Code reflected in the Consolidated
Return filed by TRI, provided CCB furnishes to TRI all information required by
the Service (including supporting schedules) within the period described in
section 6411(a) of the Code, and TRI shall pay the amount of such CCB Group
Benefit to CCB, within the period described in section 6411(b) of the Code. If
CCB shall be the sole member of the CCB Group for any year, the payment of the
CCB Group Benefit to CCB pursuant to this Section 4 shall be determined as
hereinbefore provided in this Section, but as if CCB had filed a separate income
tax return for such year. The portion of such CCB Group Loss (if any) that is
not carried back shall be carried forward to the extent otherwise permitted by
the Code in computing the liability of the CCB Group pursuant to Section 2
above.
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5. State Taxes
5.1 CCB agrees at the request of TRI to join, and to cause the CCB
Subsidiaries to join, TRI or any direct or indirect subsidiary of TRI in any
consolidated or combined state or local income or franchise tax return
("Combined Return") for any taxable year for which TRI or any direct or indirect
subsidiary of TRI files a Combined Return that may include CCB or any of the CCB
Subsidiaries.
5.2 If, at any time from and after the Effective Date, the liability for
any state or local income or franchise taxes of (i) CCB or any of the CCB
Subsidiaries and (ii) TRI or any other direct or indirect subsidiary of TRI is
determined on a consolidated or combined basis, this Agreement shall be applied
in like manner to all matters relating to such taxes; provided, however, that
the liability of the CCB Group with respect to a Combined Return shall be at
least equal to any increase in taxes resulting from the inclusion of CCB or
any of the CCB Subsidiaries in such Combined Return.
6. Disputes
In the event of a disagreement between TRI and CCB with respect to any
determination required to be made pursuant to this Agreement, the
determination of the Chief Financial Officer of TRI, in the absence of manifest
error, shall be conclusive.
7. Effective Date and Termination
This Agreement shall be effective for the taxable years of TRI, CCB and the
CCB Subsidiaries ending after the Effective Date in which TRI files a
Consolidated Return that includes CCB, unless terminated by mutual agreement of
the parties.
8. Captions
All Section captions contained in this Agreement are for convenience only
and shall not be
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deemed a part of this Agreement.
9. Counterparts
This Agreement may be executed in counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
10. Amendment; Waiver
This Agreement may be amended, modified, superseded, cancelled or extended,
and the provisions hereof may be waived, only by a written instrument signed by
the parties or, in the case of a waiver, by the party waiving compliance.
11. Governing Law
This Agreement shall be governed by the laws of the State of New York,
without regard to the conflict of laws rules thereof.
12. Successors and Assigns
This Agreement shall be binding upon, and shall inure to all the benefits
of, the parties hereto and their respective successors and assigns.
13. Notices
Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or overnight express
mail, postage prepaid. Any such notice shall be deemed given when
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so delivered personally, telegraphed, telexed or sent by facsimile transmission
or, if mailed by overnight mail, the day after the date of deposit with a
reputable courier service, or if mailed by non-overnight certified or
registered mail, five days after the date of deposit in the United States mails,
as follows:
(i) if to TRI to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President
and General Counsel
Facsimile: (000) 000-0000
(ii) if to CCB to:
Cable Car Beverage Corporation
000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
IN WITNESS WHEREOF, TRI and CCB have executed this Agreement as of the day
and year first above written.
TRIARC COMPANIES, INC. CABLE CAR BEVERAGE
CORPORATION & CO., INC.
By: /s/ Xxxxxxx X. XxXxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------------- --------------------------
Name: Xxxxxxx X. XxXxxxxx Name: Xxxxxx X. Xxxxx
Title: Senior Vice President--Taxes Title: Assistant Vice President--Taxes
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