Exhibit 10.3
GUARANTY
by
RTM, INC.
RTM PARTNERS, INC.
RTM MANAGEMENT CO., LLC
TRIARC RESTAURANTS DISPOSITION 1, INC.
in favor of
ARBY'S, INC., ARBY'S RESTAURANT
DEVELOPMENT CORPORATION,
ARBY'S RESTAURANT HOLDING COMPANY,
ARBY'S RESTAURANT OPERATIONS COMPANY
AND TRIARC COMPANIES, INC.
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Dated as of ________ ___, 1997
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TABLE OF CONTENTS
Page
1. Definitions...............................................
2. The Guaranty..............................................
2.1 Guaranty by RTM, Holdco, RTM Management and Newco One
2.2 Guaranty by RTM, Holdco and RTM Management............
2.3 Guaranty by RTM, RTM Management and Newco One........
2.4 Guaranty by RTM, Holdco and Newco One................
2.5 Guaranty by RTM Management, Holdco and Newco One.....
2.6 Guaranty by RTM Management...........................
2.7 Guaranteed Obligations...............................
3. Liability of the Guarantor................................
3.1 Guaranty of Payment..................................
3.2 Continuing Guaranty..................................
3.3 Absolute and Unconditional Guaranty..................
4. Waivers of Notices and Defenses...........................
5. Bankruptcy and Related Matters............................
5.1 No Proceedings Against RTM, Holdco, RTM Management,
Newco One or Newco Two...............................
5.2 Guarantors Remain Obligated..........................
5.3 Stay of Acceleration.................................
5.4 Post-Petition Interest...............................
5.5 Reinstatement of Guaranty............................
5.6 Limitation of Guarantor's Liability..................
6. No Subrogation...........................................
7. Subordination of Other Obligations.......................
8. Setoff; Security Arrangements............................
8.1 Setoff..............................................
8.2 Security Arrangements...............................
8.3 RTM Fee.............................................
9. Taxes....................................................
9.1 Payments Free of Taxes..............................
9.2 Payment of Taxes Withheld...........................
9.3 Indemnification.....................................
10. Representations and Warranties...........................
10.1 Existence and Power.................................
10.2 Authorization; No Contravention.....................
10.3 Binding Obligation..................................
10.4 Not an Investment Company or Holding Company........
10.5 Relationship of RTM to Holdco, Newco One or Newco Two
10.6 Financial Condition.................................
10.7 Net Worth...........................................
11. Covenants................................................
11.1 Financial Condition of RTM, Holdco, RTM Management,
Newco One or Newco Two..............................
11.2 Financial Statements and Other Reports..............
11.3 Maintenance of Consolidated Net Worth...............
11.4 Notice of Events....................................
11.5 Management Agreements...............................
11.6 Board Member........................................
11.7 Dividends and Distributions.........................
11.8 Mergers or Sales....................................
12. Events of Default........................................
12.1 Default in Transaction Documents; Other Defaults....
12.2 Default in Other Agreements.........................
12.3 Involuntary Bankruptcy; Appointment of Custodian, Etc.
12.4 Voluntary Bankruptcy; Appointment of Custodian, Etc.
12.5 Judgments and Attachments...........................
12.6 Dissolution.........................................
12.7 Business Interruption...............................
12.8 Change of Control...................................
13. Miscellaneous............................................
13.1 Survival of Warranties..............................
13.2 Notices.............................................
13.3 No Waivers..........................................
13.4 Expenses............................................
13.5 Amendments and Waivers..............................
13.6 Successors and Assigns; No Third Party Beneficiaries
13.7 APPLICABLE LAW......................................
13.8 JURISDICTION........................................
13.9 Severability....................................
13.10 Interpretation..................................
13.11 Further Assurances..............................
GUARANTY
GUARANTY, dated as of February __, 1997, by RTM, Inc., a Georgia
corporation ("RTM"), RTM Partners, Inc., a Georgia subchapter S corporation
("Holdco"), RTM Management Co., LLC, a Georgia limited liability company ("RTM
Management") and Triarc Restaurants Disposition 1, Inc., a Delaware corporation
("Newco One") (collectively, the "Guarantors")(1) in favor of Arby's, Inc.,
a Delaware corporation ("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," and, together with ARDC and ARHC, the "Sellers")
and Triarc Companies, Inc., a Delaware corporation ("Triarc," and,
together with the Sellers, the "Beneficiaries").
R E C I T A L S
Pursuant to the Stock Purchase Agreement (the "Stock Purchase Agreement"),
dated as of February 13, 1997, among Holdco, the Sellers and RTM, the Sellers
have agreed to sell to Holdco, and Holdco has agreed to acquire from Sellers,
all of the issued and outstanding shares of common stock, par value $1.00 per
share of Newco One, (the "Newco One Shares"), and all of the issued and
outstanding shares of common stock, par value $1.00 per share of Triarc
Restaurants Disposition 2, Inc., a Delaware corporation ("Newco Two") (the
"Newco Two Shares" and, together with the
(1) If consented to by Franchise Finance Corporation of America, Triarc
Restaurants Disposition 2, Inc. ("Newco Two") shall be added as a Guarantor
hereunder (with obligations substantially mirroring those of Newco One) and
execute a Security Documents substantially similar to the ones to be executed by
Newco One.
Newco One Shares, the "Shares"), on the terms and conditions set forth therein
(the "Sale").
The Sellers have required, as a condition precedent to their
obligation to consummate the Sale under the Stock Purchase Agreement, that the
Guarantors execute and deliver this Guaranty. The Sellers would not sell the
Shares to Holdco but for the execution and delivery of this Guaranty by each of
the Guarantors.
In furtherance of the business purposes of each of the Guarantors,
each of the Guarantors desires to irrevocably and unconditionally guaranty all
of the Guaranteed Obligations (as hereafter defined).
Affiliates of RTM (the "Principals") are the direct owners of all
of the outstanding stock of Holdco and all of the membership (equity) interests
in RTM Management. Upon consummation of the Sale, Holdco will be the direct
owner of all of the capital stock of Newco One and Newco Two.
NOW, THEREFORE, based upon the foregoing, and in order to induce the
Beneficiaries to enter into the Stock Purchase Agreement and to sell the Shares
to Holdco, the Guarantors hereby agree as follows:
Definitions. Capitalized terms not otherwise defined in this
Guaranty shall have the meanings ascribed to them in the Stock Purchase
Agreement. As used in this Guaranty, the following terms have the following
meanings unless the context otherwise requires:
"Assets" means (i) the Assets (as defined in the Stock Purchase
Agreement) and proceeds from or accessions or additions to the Assets and any
substitutions for the Assets as permitted by the Debt Documents and (ii) all
rights of RTM Management under the Management Agreements, including without
limitation, all rights to receive the RTM Fees and all rights of Newco One and
Newco Two under the Management Agreements. For purposes of this definition of
the term "Assets," the term "Restaurants" as used in the definition of "Assets"
contained in the Stock Purchase Agreement shall, for purposes of incorporating
herein the definition of "Assets," be deemed to include any Restaurants
hereafter acquired or developed by Newco One pursuant to the Development
Agreement.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended.
"Change of Control" means, with respect to any Guarantor,
(i) the sale, lease or transfer of all or substantially all of the Guarantor's
assets to any other person or group (as such term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), (ii) the
liquidation or dissolution of the Guarantor, or (iii) the acquisition by any
person or group (as such term is used in Section 13(d)(3) of the Exchange Act)
of a direct or indirect majority in interest (more than 50%) of the aggregate
voting power of the Guarantor by way of merger or consolidation or otherwise,
provided, however, that no "Change of Control," as herein defined, shall be
deemed to have occurred as the result of (a) the merger of any two or more of
the Guarantors and/or, unless prohibited by any provision of the FFCA Loan
Agreements that is not waived, Newco Two, (b) the transfer of shares of Holdco,
among the Principals, interesse, or (c) a public offering of shares of common
stock of any of the Guarantors if (i) following such public offering, the
Principals, collectively, or Holdco (in the case of a public offering of common
stock of Newco One or Newco Two) continue to be controlling Affiliates, or the
controlling Affiliate, of the entity the shares of which are the subject of such
public offering and (ii) if such public offering occurs following the exercise
by Sellers of their options under the Option Agreements and each Seller has been
accorded the opportunity to participate on a pro rata basis as a seller in such
public offering (other than where the issuer is RTM Management or RTM as long as
there is no breach of the provisions of Section 15 of the Option Agreement).
"Event of Default" has the meaning ascribed to such term in
Section 12.
"Guaranteed Obligations" has the meaning ascribed to such term
in Section 2.
"Guaranty" means this Guaranty, as it may be amended, supplemented or
otherwise modified from time to time.
"Management Agreements" means the Management Agreement, dated as of the
date hereof between RTM Management and Newco One and the Management Agreement
dated as of the date hereof, between RTM Management and Newco Two.
"RTM Fees" means the fee of 5% of net sales of Newco One and Newco Two
to be paid by Newco One and Newco Two to RTM Management to cover RTM
Management's expenses for corporate overhead attributable to Newco One and/or
Newco Two pursuant to the Management Agreements.
"Security Documents" means the (i) the Pledge Agreement, dated
as of the date hereof, among Holdco and the Beneficiaries, (ii) the Security
Agreements, each dated as of the date hereof, (a) between RTM Management and the
Beneficiaries and (b) between Newco One and the Beneficiaries, and (iii) any and
all other documents, instruments and agreements contemplated by, or now or
hereafter delivered in connection with any of the foregoing, including any
extensions, modifications, substitutions, amendments and renewals thereof.
"Transaction Documents" means the Stock Purchase Agreement, the Notes,
this Guaranty, the Security Documents, the Debt Documents, the Assumption
Agreements and any and all other documents, instruments and agreements
contemplated by, or now or hereafter delivered in connection with any of the
foregoing including any extensions, modifications, substitutions, amendments and
renewals thereof, but not including the Licenses or any Market Development
Agreements.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the applicable jurisdiction.
The Guaranty.
Guaranty by RTM, Holdco, RTM Management and Newco One. Each of
RTM, Holdco, RTM Management and Newco One, jointly and severally, hereby
irrevocably guaranties the due and punctual payment in full when due (whether at
stated maturity, upon acceleration, demand or otherwise, including amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, or any successor provision), of any and all sums,
whether of principal, interest (including any interest payable subsequent to a
default), fees, expenses, indemnities and other amounts (including all
reasonable fees, disbursements and other charges of counsel actually incurred by
each of the Beneficiaries), payable by Newco Two pursuant to or arising under,
out of or in connection with the Transaction Documents (other than the Notes),
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, including, without limitation, the payment of
the Assumed Liabilities.
Guaranty by RTM, Holdco and RTM Management. Each of RTM,
Holdco and RTM Management, jointly and severally, hereby irrevocably guaranties
the due and punctual payment in full when due (whether at stated maturity, upon
acceleration, demand or otherwise, including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, or any successor provision), of any and all sums, whether of principal,
interest (including any interest
payable subsequent to a default), fees, expenses, indemnities and other amounts
(including all reasonable fees, disbursements and other charges of counsel
actually incurred by each of the Beneficiaries), payable by Newco One pursuant
to or arising under, out of or in connection with the Transaction Documents
(other than the Notes), whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter incurred, including, without
limitation, the payment of the Assumed Liabilities.
Guaranty by RTM, RTM Management and Newco One. Each of RTM,
RTM Management and Newco One, jointly and severally, hereby irrevocably
guaranties the due and punctual payment in full when due (whether at stated
maturity, upon acceleration, demand or otherwise, including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, or any successor provision), of any and all sums, whether
of principal, interest (including any interest payable subsequent to a default),
fees, expenses, indemnities and other amounts (including all reasonable fees,
disbursements and other charges of counsel actually incurred by each of the
Beneficiaries), payable by Holdco pursuant to or arising under, out of or in
connection with the Transaction Documents (other than the Notes), whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred.
Guaranty by RTM, Holdco and Newco One. Each of RTM, Holdco and
Newco One, jointly and severally, hereby irrevocably guaranties the due and
punctual payment in full when due (whether at stated maturity, upon
acceleration, demand or otherwise, including amounts that would become due but
for the operation of the automatic stay under Sec-
tion 362(a) of the Bankruptcy Code, or any successor provision), of any and all
sums, whether of principal, interest (including any interest payable subsequent
to a default), fees, expenses, indemnities and other amounts (including all
reasonable fees, disbursements and other charges of counsel actually incurred by
each of the Beneficiaries), payable by RTM Management pursuant to or arising
under, out of or in connection with the Transaction Documents (other than the
Notes), whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter incurred.
Guaranty by RTM Management, Holdco and Newco One. Each of RTM
Management, Holdco and Newco One, jointly and severally, hereby irrevocably
guaranties the due and punctual payment in full when due (whether at stated
maturity, upon acceleration, demand or otherwise, including amounts that would
become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, or any successor
provision), of any and all sums, whether of principal, interest (including any
interest payable subsequent to a default), fees, expenses, indemnities and other
amounts (including all fees, disbursements and other charges of counsel to each
of the Beneficiaries), payable by RTM pursuant to or arising under, out of or in
connection with the Transaction Documents (other than the Notes), whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred.
Guaranty by RTM Management. RTM Management hereby irrevocably
guarantees the due and punctual payment in full of the principal of, and
interest upon, the Notes when they become due upon the stated maturity date
thereof or by acceleration or otherwise.
Guaranteed Obligations. The obligations to pay all such sums
and perform all such payment terms and provisions set forth in this Section 2
are hereafter collectively referred to as the "Guaranteed Obligations." The
Guarantors acknowledge that there are no conditions whatsoever to the
effectiveness of this Guaranty.
Liability of the Guarantors. Each of the Guarantors agrees that
its obligations hereunder are irrevocable, continuing, absolute, independent and
unconditional and shall not be affected by any circumstance whatsoever (other
than the indefeasible payment in full and the complete performance of the
Guaranteed Obligations) which may consti-
tute a defense or a legal or equitable discharge (whether in whole or in part)
of a guarantor or surety, whether foreseen or unforeseen and whether similar or
dissimilar to any circumstance described in this Guaranty. In furtherance of the
foregoing and without limiting the generality thereof, each of the Guarantors
agrees as follows:
Guaranty of Payment. This Guaranty is a guaranty of payment
and performance of payment obligations, and not of collection only. Each
Guarantor waives any requirement that the Beneficiaries, as a condition of
payment by such Guarantor, (i) proceed against RTM, Holdco, RTM Management or
Newco One, as the case may be, any other guarantor of the Guaranteed Obligations
or any other person, (ii) proceed against or exhaust any security received from
RTM, Holdco, RTM Management or Newco One, as the case may be, any other
guarantor of the Guaranteed Obligations or any other person, or (iii) pursue any
other remedy whatsoever in the power of the Beneficiaries. Each of the
Guarantees set forth in this Section 2 shall be, and be deemed to be, an
agreement by the Guarantors identified therein to exonerate, and to hold and
save harmless, the Beneficiaries, and each of them, of, from and against all
obligations or
liabilities for payment of the Guaranteed Obligations.
Continuing Guaranty. This Guaranty shall remain in full force
and effect until all of the Guaranteed Obligations have been completely
performed and indefeasibly paid in full, notwithstanding that from time to time
prior thereto RTM, Holdco, RTM Management, Newco One or Newco Two, as the case
may be, may be free from any of the Guaranteed Obligations. A Guarantor's
payment of a portion, but not all, of the Guaranteed Obligations shall in no way
limit, affect, modify or abridge such Guarantor's liability for any portion of
the Guaranteed Obligations that has not been completely performed or
indefeasibly paid in full.
Absolute and Unconditional Guaranty. This Guaranty and the
obligations of the Guarantors hereunder are not subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than the
complete performance of payment obligations and the indefeasible payment in full
of the Guaranteed Obligations), including, without limitation, the occurrence of
any one or more of the following, whether or not such Guarantors shall have had
notice or knowledge of any of them:
any change in the manner, place or terms of
payment (including the currency thereof) of any of the Guaranteed
Obligations;
any settlement, compromise, release or
discharge of, or acceptance or refusal of any offer of performance with respect
to, or substitutions for, the Guaranteed Obligations or any agreement relating
thereto or any subordination of the payment of the Guaranteed Obligations to the
payment of any other obligations;
any rescission, waiver, extension, renewal,
alteration, amendment or modification of, or any consent to departure from, any
of the terms or provisions of the Guaranteed Obligations or any agreement
relating thereto, or any other guaranties or security for the Guaranteed
Obligations, in each case whether or not in accordance with the terms thereof;
the Guaranteed Obligations, this Guaranty or
any other agreement relating thereto at any time being found to be illegal,
invalid or unenforceable in any respect or the existence or invocation of any
provision of applicable law or regulation purporting to prohibit the payment by
RTM, Holdco, RTM Management, Newco One or Newco Two, as the case may be, of any
of the Guaranteed Obligations;
any request or acceptance of other guaranties
of the Guaranteed Obligations or the taking and holding of any security for the
payment of the Guaranteed Obligations, this Guaranty, or any other guaranty of
the Guaranteed Obligations or any release, impairment, surrender, exchange,
substitution, compromise, settlement, rescission or subordination thereof;
any failure to perfect or continue perfection
of a security interest in any collateral which secures any of the Guaranteed
Obligations; or any enforcement and application of any security now or hereafter
held by the Beneficiaries in respect of this Guaranty or the Guaranteed
Obligations and any direction of the order or manner of sale thereof, or the
exercise of any other right or remedy that the Beneficiaries may have with
respect to any such security, as the Beneficiaries in their sole discretion may
determine, including foreclo-sure on any such security pursuant to one or more
judicial or nonjudicial sales;
any failure or omission to exercise, assert or
enforce, or any agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Transaction Documents, at law, in equity or otherwise) with
respect to the Guaranteed Obligations or any agreement relating thereto, or with
respect to any other guaranties of or any security for the payment of the
Guaranteed Obligations;
any change in or reorganization of the
corporate structure of RTM, Holdco, RTM Management, Newco One or Newco Two or
any of their subsidiaries or any dissolution, termination, consolidation or
merger or sale or other disposition, whether or not for fair consideration, of
all or substantially all of the assets of any of the foregoing or any consent by
each of the Beneficiaries thereto or to any restructuring of the Guaranteed
Obligations;
the election by the Beneficiaries in any
proceeding instituted under the Bankruptcy Code of the application of Section
1111(b)(2) of the Bankruptcy Code; any borrowing or grant of a security interest
by RTM, Holdco, RTM Management, Newco One or Newco Two, as debtor-in-possession,
under Section 364 of the Bankruptcy Code; or the disallowance under Section 502
of the Bankruptcy Code of all or any portion of the claims of the Beneficiaries
for repayment of the Guaranteed Obligations; or
any other act or thing or omission, or delay to
do any other act or thing, which may or might in any manner or to any extent
vary the risk of any Guarantor as an obligor in respect of the Guaranteed
Obligations.
Waivers of Notices and Defenses. Each of the Guarantors
hereby waives, for the benefit of the Beneficiaries:
any defense arising by reason of the
incapacity, lack of authority or any disability of RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be;
any notice of the creation, renewal, extension
or accrual of any of the Guaranteed Obligations and notice of or proof of
reliance by the Beneficiaries upon this Guaranty or acceptance of this Guaranty
(the Guaranteed Obligations and all dealings between RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be, and the Guarantor, on
the one hand, and the Beneficiaries, on the other hand, being conclusively
deemed to have been created, incurred or conducted in reliance upon this
Guaranty);
any setoff or counterclaim (other than a setoff
or counterclaim that is acknowledged by the Beneficiaries, or judicially
determined by a court of competent jurisdiction, not subject to further appeal,
to be valid) any demand for performance, notice of nonperformance, diligence,
presentment, protest, notice of protest, notice of dishonor, notice of defaults
under the Stock Purchase Agreement or any other Transaction Document, notice of
any amendment, renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notice that any portion of the Guaranteed
Obligations is due, notice of any collection proceedings, and notice of any
other fact which might increase the risk of any Guarantor;
any defense based upon any statute or rule of
law that provides that the obligation of a surety cannot be larger in amount or
in other respects more burdensome than that of the principal;
any benefit of, or any right to participate in,
or any notices of exchange, sale, surrender or other handling of, any security
or collateral given to the Beneficiaries to secure payment or performance of the
Guaranteed Obligations or any other liability of RTM, Holdco, RTM Management,
Newco One or Newco Two, as the case may be, to any of the Beneficiaries; and
to the fullest extent permitted by law, any
other defenses or benefits that may be derived from or afforded by law which
limit the liability of, or exonerate, guarantors or sureties, or which may
conflict with the terms of this Guaranty, including, without limitation, failure
of consideration, breach of warranty, statute of frauds, statute of limitations,
accord and satisfaction, and usury.
Bankruptcy and Related Matters.
No Proceedings Against RTM, Holdco, RTM Management, Newco One
or Newco Two. So long as any of the Guaranteed Obligations remain outstanding,
the Guarantors shall not, without the prior written consent of each of the
Beneficiaries, commence or join with any other person in commencing any
bankruptcy, liquidation, reorganization or insolvency proceedings of, or
against, RTM, Holdco, RTM Management, Newco One or Newco Two, as the case may
be.
Guarantors Remain Obligated. The obligations of the
Guarantors under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding or action,
voluntary or involuntary, involving the bankruptcy, insolvency, receiver-
ship, reorganization, marshaling of assets, assignment for the benefit of
creditors, composition with creditors, readjustment, liquidation or arrangement
of RTM, Holdco, Management, Newco One or Newco Two, as the case may be, or
similar proceedings or actions or by any defense which RTM, Holdco, Management,
Newco One or Newco Two, as the case may be, may have by reason of the order,
decree or decision of any court or administrative body resulting from any such
proceeding or action. Without limiting the generality of the foregoing, each of
the Guarantors' liability shall extend to all amounts and obligations that
constitute the Guaranteed Obligations and would be owed by RTM, Holdco,
Management, Newco One or Newco Two, as the case may be, but for the fact that
they are unenforceable or not allowable due to the existence of any such
proceeding or action.
Stay of Acceleration. Each of the Guarantors agrees that,
notwithstanding anything to the contrary herein, if, after the occurrence and
during the continuance of an Event of Default, the Beneficiaries are prevented
by applicable law from exercising their respective rights to accelerate the
maturity of the Guaranteed Obligations, to collect interest on the Guaranteed
Obligations or to enforce or exercise any other right or remedy with respect to
the Guaranteed Obligations, or the Beneficiaries are prevented from taking any
action to realize on any security or collateral or are prevented from
collecting any of the Guaranteed Obligations, such Guarantor shall pay to the
Beneficiaries upon demand therefor the amount that would otherwise have been due
and payable had such rights and remedies been permitted to be exercised by the
Beneficiaries.
Post-Petition Interest. Pursuant to, and without limiting, the
foregoing, each of the Guarantors acknowledges and agrees that any interest on
any portion of the Guaranteed Obligations which accrues after the commencement
of any proceeding or action referred to in Section 5.2 (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding or action, such interest as would
have accrued on such portion of the Guaranteed Obligations if said proceedings
or actions had not been commenced) shall be included in the Guaranteed
Obligations, it being the intention of each of the Guarantors and the
Beneficiaries that the Guaranteed Obligations which are guarantied by the
Guarantors pursuant to this Guaranty shall be determined without regard to any
rule of law or order which may relieve RTM, Holdco, RTM Management, Newco One or
Newco Two, as the case may be, of any portion of such Guaranteed Obligations.
The Guarantors will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay the
Beneficiaries, or allow the claim of the Beneficiaries, in respect of, any such
interest accruing after the date on which such proceeding is commenced.
Reinstatement of Guaranty. Notwithstanding anything to the
contrary contained herein, in the event that all or any portion of the
Guaranteed Obligations are paid by RTM, Holdco, RTM Management or Newco One, as
the case may be, the obligations of the Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, if all or
any part of such payment(s) are rescinded or recovered, directly or indirectly,
from the Beneficiaries as a preference, fraudulent transfer or otherwise, and
any such payments which are so rescinded or recovered shall constitute
Guaranteed Obligations for all purposes under this Guaranty.
Limitation of Guarantor's Liability. Each Guarantor and by its
acceptance hereof each of the Beneficiaries hereby confirms that it is the
intention of all parties hereto that the guarantee by such Guarantor pursuant to
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
any bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law. To effectuate the
foregoing intention, each of the Beneficiaries and the Guarantors hereby
irrevocably agree that the
obligations of such Guarantor under this Guaranty shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Guaranty, result in the
obligations of such Guarantor under this Guaranty not constituting such
fraudulent transfer or conveyance.
No Subrogation. Notwithstanding any payment or payments made by
the Guarantors hereunder, or any set-off or application of funds of the
Guarantors by the Beneficiaries, the Guarantors hereby irrevocably waive any
claim or other rights that they may now or hereafter acquire against RTM,
Holdco, RTM Management, Newco One or Newco Two, as the case may be, or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantors' obligations under this Guaranty or any other
Transaction Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Beneficiaries against RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be, or any other insider
guarantor or any collateral security, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from RTM, Holdco, RTM Management, Newco
One or Newco Two, as the case may be, or any other insider guarantor, directly
or indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to any Guarantor in violation of the preceding sentence, such
amount shall be held by such Guarantor in trust for the Beneficiaries,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Beneficiaries in the exact form
received by such Guarantor (duly endorsed by such Guarantor to the
Beneficiaries, if so requested by the Beneficiaries), to be applied against the
Guaranteed Obligations, whether matured or unmatured, in such order as the
Beneficiaries may determine.
Subordination of Other Obligations. Each of the Guarantors hereby
agrees that any indebtedness of RTM, Holdco, RTM Management, Newco One or Newco
Two, as the case may be, now or hereafter held by the Guarantors, other than
indebtedness for borrowed money, is hereby subordinated in right of payment to
the Guaranteed Obligations, and any such indebtedness of RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be, to the Guarantors
collected or received by the Guarantors after an Event of Default has occurred
and is continuing shall
be held in trust for the Beneficiaries and shall forthwith be paid over to the
Beneficiaries to be credited and applied against the Guaranteed Obligations,
whether matured or unmatured, without in any way affecting, impairing or
limiting the liability of the Guarantors under this Guaranty.
Setoff; Security Arrangements.
Setoff. In addition to any rights and remedies of the
Beneficiaries provided by law or otherwise, upon the occurrence of a default and
acceleration of the obligations owing in connection with the Transaction
Documents, each Beneficiary shall have the right, without prior notice to the
Guarantors any such notice being expressly waived to the extent permitted by
applicable law, to set off and apply against any amounts due under the
Transaction Documents, whether matured or unmatured, of each of the Guarantors
to such or any other Beneficiary, and other amounts owing from such Beneficiary
to such Guarantor, whether matured or unmatured, at, or at any time after, the
happening of any of the above-mentioned events, and such right of set-off may be
exercised by such Beneficiary against such Guarantor or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, custodian or execution, judgment of attachment creditor of such
Guarantor, or against anyone else claiming through or against such Guarantor or
such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Beneficiary prior to the making, filing or issuance, or
service upon such Beneficiary of, or of notice of, any such petition, assignment
for the benefit of creditors, appointment or application for the appointment of
a receiver, or issuance of execution, subpoena, order or warrant. Each
Beneficiary agrees promptly to notify the Guarantors after any such set-off and
application made by such Beneficiary, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
Security Arrangements. Holdco, has given the Beneficiaries a
pledge of the stock of Newco One and Newco Two, RTM Management has granted to
the Beneficiaries security interests in the RTM Fees and Newco One has granted
to the Beneficiaries security interests in the Assets, in each case as
collateral security for the Guaranteed Obligations and such other obligations as
are specified in the Security Documents. Holdco, RTM Management and Newco One
will take all actions necessary or desirable, including the execution and
delivery of all agreements, mortgages, indentures, trust deeds and other
documents evidencing liens on real property and interests therein (collectively,
"Real Property Lien Documents"), assignments, documents and instruments and the
filing of appropriate financing statements and Real Property Lien Documents
under the provisions of the UCC or applicable governmental requirements in each
of the offices where such filings are necessary or appropriate, to grant the
Beneficiaries a duly perfected lien on the stock of Newco One and/or Newco Two
and/or the Assets and/or the RTM Fees, as the case may be, pursuant to the
Security Documents. Holdco has pledged all of the capital stock of Newco One and
Newco Two as collateral security for the Guaranteed Obligations and such other
obligations as are specified in the Security Documents. Holdco has delivered on
the date hereof stock certificates representing all of the issued and
outstanding shares of capital stock of Newco One and Newco Two accompanied by
stock powers duly executed by Holdco in blank with signatures guaranteed.
Reference is hereby made to Schedule 8.2 for the material terms of the Security
Documents, which shall also have such other and further terms and provisions as
are normally included in similar Security Documents and are mutually agreed upon
by the parties.
RTM Fees. RTM Management, Holdco and Newco One and Newco Two,
and each of them, hereby agree that upon the occurrence and continuance of an
Event of Default, Newco One and Newco Two shall pay the RTM Fees to the
Beneficiaries, instead of to RTM Management, which shall be relieved of any
obligation to perform services under the Management Agreements so long as the
RTM Fees are being paid to the Beneficiaries. The Beneficiaries shall have the
right (but not the obligation) to use the RTM Fees to provide (or cause to be
provided) all services which RTM Management would otherwise be required to
provide and to pay amounts then due under the Transaction Documents. Any amounts
received by the Beneficiaries in excess of amounts used to provide such services
(or cause them to be provided) or to pay amounts then due under the Transaction
Documents, shall be held in escrow by the Beneficiaries in an interest bearing
account and shall be returned to RTM Management together with all accrued
interest thereon when all Events of Default have been remedied or waived by
Triarc Companies, Inc. or, if earlier, when all Guaranteed Obligations have been
satisfied.
Taxes.
Payments Free of Taxes. All payments hereunder (including,
without limitation, payments on account of principal, interest and fees) shall
be made by the Guarantors free and clear of, and without deduction for, or on
account of, any present or future tax, duty, levy, impost, fee, assessment or
other charge of whatever nature now or hereafter imposed by any jurisdiction or
by any political subdivision or
taxing authority thereof or therein, together with any interest, additions to
tax or interest, and penalties or other liabilities with respect thereto, but
excluding therefrom in the case of each Beneficiary, taxes imposed on or
measured by the overall net income of such Beneficiary (all such tax or taxes,
other than such excluded tax or taxes, being referred to herein as a "Tax" or
"Taxes"). If any of the Guarantors is required by law to make any deduction or
withholding of any Taxes from any payment due hereunder, then the amount payable
will be increased as may be necessary so that, after making all required
deductions and taking account of any Taxes and excluded taxes imposed on such
increased amount the Beneficiaries receive an amount equal to the sum it would
have received had no such deduction or withholding been required.
Payment of Taxes Withheld. If any of the Guarantors makes any
payment hereunder in respect of which it is required by law to make any
deduction or withholding of any Taxes or excluded taxes, it shall pay the full
amount to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall deliver
to the Beneficiary within 30 days after it has made such payment to the
applicable authority a receipt issued by such authority evidencing the payment
to such authority of all amounts so required to be deducted or withheld from
such payment.
Indemnification. Without prejudice to the provisions of
Section 9.1, if any Beneficiary is required by law to make any payment on
account of Taxes on or in relation to any sum received or receivable hereunder
by such Beneficiary or any liability for Tax in respect of any such payment is
imposed, levied or assessed against such Beneficiary, the Guarantors will
promptly indemnify the Beneficiaries against such Tax payment or liability,
together with any interest, penalties and expenses (including counsel fees,
disbursements and other charges) payable or incurred in connection therewith,
including any Tax or excluded tax or taxes on the Beneficiaries arising by
virtue of payments under this Section 9.3, computed in a manner consistent with
Section 9.1. A certificate as to the amount of such payment by any Beneficiary,
absent manifest error, shall be final, conclusive and binding upon all parties
hereto for all purposes.
Representations and Warranties. Each of the Guarantors,
jointly and severally, hereby represents and warrants to the Beneficiaries
that the following statements are true and correct:
Existence and Power. Each of RTM, Holdco and Newco
One is a is a corporation, and RTM Management is a limited liability
company. Each of them is duly organized, validly existing and in good standing
under the laws of its state of organization; has all necessary power and all
material governmental licenses, authorizations, consents and approvals required
to own its property and to carry on its business as now conducted and is
qualified to do business in all jurisdictions in which such qualification is
necessary.
Authorization; No Contravention. The execution, delivery and
performance by such Guarantor of this Guaranty and each other Transaction
Document to which it is a party, are within such Guarantor's power under its
governance documents, have been duly authorized by all necessary corporate or
membership action, require no action by or in respect of, filing with or notice
to, any governmental authority (other than a filing pursuant to the HSR Act) and
do not contravene, or constitute a default under, or require the consent of any
creditor, stockholder or other person under, any provision of applicable law or
regulation or of the certificate of incorporation, by-laws or other governance
documents of such Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon such Guarantor or its subsidiaries or to
which any of their respective assets are subject, or result in the creation or
imposition of any lien on any asset of such Guarantor or any of its
subsidiaries.
Binding Obligation. This Guaranty and each other Transaction
Document to which such Guarantor is a party has been duly and validly executed
and delivered by such Guarantor and constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by equitable principles relating to the
availability of equitable remedies.
Not an Investment Company or Holding Company. Such Guarantor
is not an "investment company" within the meaning of the Investment Company Act
of 1940, as amended, or a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Relationship of RTM to Holdco, Newco One or Newco Two. The
Principals are the controlling persons of RTM, and the Principals are the direct
owners of all of the capital stock of Holdco and of all of the membership
interests in RTM Management; the agreement of the Sellers to sell the Shares to
Holdco is of substantial and material benefit to RTM and RTM Management, each of
which will receive substantial management fees following the sale of the shares
to Holdco; RTM and RTM Management induced
the Sellers to enter into, and the Sellers would not have entered into, the
agreement to sell the Shares to Holdco without issuance of the Notes and
execution of this Guaranty by RTM and RTM Management; and RTM and RTM Management
have each reviewed and approved copies of the Stock Purchase Agreement and all
other Transaction Documents and each is fully informed of the remedies the
Beneficiaries may pursue upon the occurrence of a default under any of the
Transaction Documents.
Financial Condition. The audited consolidated balance sheets
of RTM and its subsidiaries as at May 26, 1996 (the "May 26, 1996 Balance
Sheet") and May 28, 1995 and the related consolidated statements of operations,
common stockholders' equity and cash flows of RTM and its subsidiaries for the
years then ended, certified by RTM's independent certified public accounts,
copies of which have been delivered to the Beneficiaries, were prepared in
accordance with generally accepted accounting principles, have been prepared
from, and are consistent with, the books and records of RTM and its subsidiaries
and fairly present in all material respects the consolidated financial position
of RTM and its subsidiaries as at such dates and the consolidated results of
operations and cash flows of RTM and its subsidiaries for the years then ended.
The consolidated balance sheet of RTM and its subsidiaries as at November 10,
1996 and the related consolidated statements of operations and stockholders'
equity of RTM and its subsidiaries for the 26 weeks then ended, copies of which
have been delivered to the Beneficiaries, were prepared in accordance with
generally accepted accounting principles, have been prepared from, and are
consistent with, the books and records of RTM and its subsidiaries and fairly
present in all material respects the consolidated financial position of RTM and
its subsidiaries as at such date and the consolidated results of operations of
RTM and its subsidiaries for the period then ended. No events which have had or
could reasonably be expected to have a Material Adverse Effect on RTM have
occurred since November 10, 1996.
Net Worth. The consolidated net worth of RTM as of
the date hereof, computed in a manner consistent with the May 26, 1996
Balance Sheet is not less than $35 million.
Covenants.
Financial Condition of RTM, Holdco, RTM Management, Newco One
or Newco Two. Each of the Guarantors agrees that the Beneficiaries shall have no
obligation to disclose or discuss with any Guarantor their assessment, or such
Guarantor's assessment, of the financial condition of RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be. Each of the Guarantors
represents and warrants that it has adequate means to obtain information from
RTM, Holdco, RTM Management, Newco One or Newco Two, as the case may be, on a
continuing basis concerning the financial condition of RTM, Holdco, RTM
Management, Newco One or Newco Two, as the case may be, and their ability to
perform their obligations under the Transaction Documents, and each of the
Guarantors covenants and agrees to keep informed of the financial condition of
RTM, Holdco, RTM Management, Newco One and Newco Two, as the case may be, and of
all circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations.
Financial Statements and Other Reports. The
Guarantors will deliver to each of the Beneficiaries:
as soon as available and in any event within forty-five days
after the end of each of the first three fiscal quarter of each year, (1) the
consolidated balance sheets of each of RTM, Holdco, Newco One and Newco Two and
their subsidiaries as at the end of such fiscal quarter and (2) the related
consolidated statements of operations and stockholders' equity for such fiscal
quarter, in reasonable detail and certified by the chief financial officer of
each of RTM, Holdco, Newco One and Newco Two that they were prepared in
accordance with generally accepted accounting principles, consistently applied,
have been prepared from and are consistent with, the books and records of each
of ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and their subsidiaries, and fairly present
in all material respects the consolidated financial position of each of ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and their respective subsidiaries, as at the dates
indicated and the results of their operations for the periods indicated, subject
only to changes resulting from audit and normal year-end adjustments;
as soon as available and in any event within ninety days
after the end of each fiscal year, (1) the consolidated balance sheets of each
of ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and their respective subsidiaries as at the
end of such fiscal year, (2) the related consolidated statements of operations,
stockholders' equity and cash flows for such fiscal year, in reasonable detail
and certified by the chief financial officer of each of RTM, Holdco, Newco One
and Newco Two that they were prepared in accordance with generally accepted
accounting principles, consistently applied, have been prepared from and are
consistent with, the books and records of each of RTM, Holdco, Newco, Newco One,
Newco Two and their subsidiaries, and fairly present in all material respects
the consolidated financial position of each of ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two
and their respective subsidiaries, as at the dates indicated and the results of
their operations and their cash flows for the periods indicated and (3) a report
thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or other independent certified public
accountants of recognized national standing, which report shall express no
doubts about the ability of each of ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and their
respective subsidiaries to continue as a going concern, and shall state that
such consolidated financial statements fairly present the consolidated financial
positions of each of ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and their respective
subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the period indicated in conformity with generally accepted
accounting principles applied on a consistent basis with prior years (except as
otherwise disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards; and together
with each delivery of financial statements pursuant to Sections 11.2(i) and (ii)
above, (1) an officers'
certificate of each of RTM, Holdco, RTM Management, Newco One and Newco Two
stating that the signers have reviewed the terms of this Guaranty and have made,
or caused to be made under their supervision, a review in reasonable detail of
the transactions and condition of each of RTM, Holdco, RTM Management and Newco
One, and their subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of the officers' certificate, of any
condition or event which constitutes an Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action each of RTM, Holdco, RTM Management and Newco
One have taken, are taking and propose to take with respect thereto and (2) a
compliance certificate demonstrating in reasonable detail compliance (as
determined in accordance with generally accepted accounting principles,
consistently applied) during and at the end of such accounting periods with the
restrictions contained in Section 11.3.
Maintenance of Consolidated Net Worth. RTM shall not permit
its consolidated net worth computed in accordance with generally accepted
accounting principles as in effect from time to time hereafter (but excluding
from the computation any after tax writeoffs of non-cash charges) shall be not
less than $25 million.
Notice of Events. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give the Beneficiaries written notice of any
condition or event which has resulted or might reasonably be expected to result
in (i) a Material Adverse Effect with respect to any of the Guarantors, (ii) a
breach of, or noncompliance by any of the Guarantors with, any term, condition
or covenant contained herein or in any other Transaction Document or (iii) an
Event of Default.
Management Agreements. The Guarantors agree that each of the
Beneficiaries is a third party beneficiary of the Management Agreements and
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ Two and RTM Management shall not amend, modify, assign, alter,
waive any provision of, or terminate, the Management Agreements without the
prior written consent of Triarc Companies, Inc., which consent shall not be
unreasonably withheld.
Board Member. Until the tenth anniversary of the date hereof,
Holdco shall take any and all actions necessary to ensure that the Board of
Directors of Newco One and the Board of Directors of Newco Two, or any successor
to, or direct or indirect public parent of, Newco One and Newco Two, as the case
may be, shall each always include at least one member who shall be designated by
the Beneficiaries.
Dividends and Distributions. Holdco and Newco One agree that
until the occurrence of the indefeasible payment in full and the complete
performance of all obligations under the FFCA Loan Agreements, each of them
shall not, without the prior written consent of each of the Beneficiaries,
declare or pay, and Holdco will not permit Newco Two to declare or pay, any
dividend, or make any other payment or distribution, of any kind to its
respective shareholders or members on
account of Holdco's, Newco One's or Newco Two's equity or membership interests,
as the case may be; provided, however, (a) Holdco may, in connection with any
Principal's payments of personal income taxes to any taxing authority, make
dividend payments to each Principal in an aggregate amount, in respect of each
tax year of each Principal, which does not exceed the product of (i) the income
of Holdco includible in gross taxable income of its shareholders and allocable
to such Principal for such tax year multiplied by (ii) 45 percent, (b) Newco may
distribute to Holdco amounts not in excess of the amounts payable as dividends
by Holdco pursuant to the foregoing clause (a); provided that the amount of such
distribution when added together with all prior such distributions, shall not
exceed $150,000 in the aggregate and (c) the payments described above may be
made quarterly based upon the estimated taxable income of Holdco shown on the
respective estimated tax returns for the current tax year.
Mergers or Sales. Until the occurrence of the indefeasible
payment in full and the complete performance of the Guaranteed Obligations
hereunder, each of RTM, Holdco, RTM Management, Newco One and Newco Two will be
prohibited from selling, transferring or otherwise conveying all or
substantially all of its assets or merging or otherwise combining with any other
entity, except for a merger that would not result in a Change of Control and is
one of the following: (a) the merger of any two or more of the Guarantors, (b)
the merger of Holdco with Newco One and (c) the merger of RTM with an unrelated
entity so long as (i) RTM is the defacto survivor of such merger, and (ii) such
merger does not result in a violation of the covenant contained in Section 11.3
hereof.
Development of New Restaurants. The Guarantors (including,
without limitation, Holdco) shall not permit Newco Two to acquire, build or
otherwise develop any Restaurants or other retail outlets of any kind, which are
not owned by Newco Two on the date of this Guaranty, it being intended that all
development of new Restaurants or other retail outlets shall occur in Newco One.
Events of Default. If any of the following conditions or
events ("Events of Default") shall occur and be continuing:
Default in Transaction Documents; Other Defaults. (i) Failure
to make payment when due under the FFCA Loan Agreements, which failure shall
have continued for a period longer than one-half of the number of days in the
grace or cure period applicable to such payment under the FFCA Loan Agreements,
(ii) failure by Newco One or Newco Two to pay when due any uncontested license
fees or franchise fees to any Beneficiary, which failure shall have continued
for more than twenty days after written notice, (iii) the validity or
enforceability of this Guaranty or any of the Security Documents is challenged
by any of the Guarantors or any of their Affiliates and such challenge is not
effectively withdrawn within twenty days, (iv) this Guaranty and/or any of the
Security Agreements referred to herein shall have been determined by any court
having jurisdiction to be invalid or unenforceable against any of the
Guarantors, (v) any violation of any of the covenants set forth
in Sections 11.3, 11.5, 11.6, 11.7, 11.8 and 11.9 shall have occurred and such
violation shall have continued for twenty days after written notice, (vi) any
other failure or failures to pay any uncontested amounts required to be paid
under the Transaction Documents if such payment or payments, alone or in the
aggregate, equal $2 million or more, and such failure or failures to pay shall
not have been remedied or waived by Triarc Companies, Inc. within thirty days
after the date of written notice from one or more of the Beneficiaries or (vii)
any failure or failures to pay $2 million or more when due under the Debt
Documents other than the FFCA Loan Agreements, which failure shall have
continued for a period longer than one-half of the number of days in the grace
or cure period applicable to such payment under such Debt Documents..
Default in Other Agreements. Failure of any Guarantor or Newco
Two to pay at final maturity any principal on one or more issues of indebtedness
or contingent obligations of such Guarantor or Newco Two (other than the Assumed
Liabilities) or breach or default by such Guarantor or Newco Two with respect to
any other material term of any one or more issues of indebtedness or contingent
obligations of such Guarantor or Newco Two or any agreement or instrument
evidencing or securing such indebtedness or contingent obligations and such
default or breach (i) if it is a payment default permits the acceleration of
that indebtedness or contingent obligation prior to its stated maturity (whether
or not such an acceleration occurs) or (ii) if it is a breach or default of a
non-payment term, actually results in such an acceleration, and, in either case,
the principal amount of such indebtedness or contingent obligation and all other
such indebtedness or contingent obligations of Holdco, Newco One or Newco Two in
respect of which there is a failure to pay principal or interest, or a default
or breach that permits acceleration of indebtedness, which equals $5 million or
more.
Involuntary Bankruptcy; Appointment of Custodian, Etc.
A court of competent jurisdiction enters a bankruptcy order under any
bankruptcy law that:
is for relief against any of the Guarantors or
Newco Two any material subsidiary of any of the Guarantors or Newco
Two in an involuntary case or proceeding, or
appoints a custodian of any of the Guarantors or
Newco Two or any material subsidiary of any of the Guarantors or
Newco Two for all or substantially all of its properties, or
orders the liquidation of any of the
Guarantors or Newco Two or any material subsidiary of any of the
Guarantors or Newco Two, and
in each case the order or decree remains unstayed and in effect for 90
days.
Voluntary Bankruptcy; Appointment of Custodian, Etc. Any of
the Guarantors or Newco Two or any material subsidiary of any of the Guarantors
or Newco Two pursuant to or within the meaning of any bankruptcy law:
commences a voluntary case or proceeding, or
consents to the entry of a bankruptcy order for
relief against it in an involuntary case or proceeding, or
consents to the appointment of a custodian
of it or for all or substantially all of its property, or
makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness, or
consents to the filing of a petition in
bankruptcy against it, or
shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally.
Judgments and Attachments. Any money judgment, or
post-judgment writ or warrant of attachment, or similar process involving in any
individual case or in the aggregate at any time an amount in excess of $5
million (to the extent not covered by third-party insurance as to which the
insurance company has acknowledged coverage) shall be entered or filed against
any of the Guarantors or Newco Two, or any of their respective properties or
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 90 days or in any event later than ten days prior to the date of any
proposed sale thereunder.
Dissolution. Any order, judgment or decree shall be entered
against any of the Guarantors or Newco Two or any material subsidiary of any of
the Guarantors or Newco Two decreeing the dissolution or split-up of any of the
Guarantors or Newco Two or any material subsidiary of any of the Guarantors or
Newco Two and such order shall remain undischarged or unstayed for a period in
excess of 60 days.
Business Interruption. Any of the Guarantors or Newco Two, or
any material subsidiary of any of the Guarantors or Newco Two is required
permanently to discontinue all or substantially all of the business, or is
prevented from conducting all or substantially all of its business for a period
of such prolonged duration as is likely to render it unable to fulfill its
obligations under this Guaranty, whether by reason of (i) any injunction, order
or decree of any tribunal, or (ii) material damage to, or the loss, theft or
destruction of, any material portion of its assets, or (iii) any strike, lockout
or other labor dispute, or (iv) any act of God or public enemy or other casualty
or (v) the loss, suspension, forfeiture or inability to renew any license or
permit essential to its business, provided, that to the extent that the loss,
suspension, forfeiture or inability to renew any such license or permit is
dependent upon a decision by any Beneficiary of this Guaranty, such
Beneficiary's decision shall have been made in a manner substantially consistent
with the standards applied by it in making similar decisions in respect of the
granting, revoking, renewing, or refusing renewal of,
licenses or permits of its other franchisees, generally.
Change of Control. The occurrence of a Change of
Control of any of the Guarantors.
THEN (i) upon the occurrence of any Event of Default described in the
foregoing Sections 12.3 or 12.4, all of the amounts due under this Guaranty
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by each of the Guarantors, and (ii) upon the occurrence of any
other Event of Default, any of the Beneficiaries shall, by written notice to the
Guarantors, declare all of the amounts due under this Guaranty to be, and the
same shall forthwith become, due and payable; provided, however, that if any
declaration of acceleration under this Guaranty occurs solely because an Event
of Default set forth in Section 12.2 has occurred and is continuing, such
declaration of acceleration shall be automatically annulled if the holders of
the indebtedness which are the subject of such Event of Default have rescinded
their declaration of acceleration in respect of such indebtedness within thirty
days of such acceleration of such indebtedness and the Beneficiaries have
received written notice thereof within such time and if no other Event of
Default has occurred during such thirty-day period which has not been cured or
waived in accordance with this Agreement. Nevertheless, if at any time after
acceleration all Events of Default shall be remedied or waived, then the
Beneficiaries shall, by written notice to Guarantors rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. In addition to the rights and remedies granted to the
Beneficiaries pursuant to this Guaranty, the Beneficiaries have the rights and
remedies granted to them pursuant to the Security Documents.
Miscellaneous.
Survival of Warranties. All agreements, covenants,
representations and warranties made herein shall survive the execution and
delivery of this Guaranty, and the execution and delivery of the Stock Purchase
Agreement and the other Transaction Documents.
Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, facsimile
transmission, telex or similar writing) and shall be given to such party at its
address set forth in the Stock Purchase Agreement and in the case of Newco One
and Newco Two, c/o RTM, Inc. at the address set forth in the Stock Purchase
Agreement.
No Waivers. No failure or delay by the Beneficiaries in
exercising any right, power or privilege hereunder or under any other
Transaction Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Expenses. Each of the Guarantors agrees to pay, or cause to be
paid, on demand, and to save the Beneficiaries harmless against liability for,
any and all costs and expenses (including, without limitation, fees and
disbursements of counsel and fees, costs and expenses incurred in connection
with any bankruptcy proceeding) incurred or expended by each of the
Beneficiaries in connection with the enforcement, amendment, modification or
waiver of or preservation of any rights under this Guaranty and the collection
of amounts payable hereunder, and until so paid, such fees, costs, disbursements
and expenses shall be added to, and constitute, Guaranteed Obligations.
Amendments and Waivers. This writing is intended by the
Guarantors and the Beneficiaries as the final expression of this Guaranty and is
also intended as a complete statement of the terms of their agreement with
respect to the matters covered hereby. No amendment, modification, termination
or waiver of any provision of this Guaranty, or consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written consent
of each of the Beneficiaries.
Successors and Assigns; No Third Party Beneficiaries. This
Guaranty is a continuing guaranty and shall be binding upon the Guarantors and
their successors and assigns; provided, however, that the Guarantors may not
assign this Guaranty or any of the rights or obligations of the Guarantors
hereunder without the prior written consent of the Beneficiaries. This Guaranty
shall inure to the benefit of the Beneficiaries and their respective successors
and assigns. Nothing contained in this Guaranty shall be deemed to confer upon
anyone other than the parties hereto (and their permitted successors and
assigns) any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein.
APPLICABLE LAW. THIS GUARANTY SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
JURISDICTION.
ANY ACTION OR PROCEEDING AGAINST THE GUARANTORS RELATING IN
ANY WAY TO THIS GUARANTY OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT AND
ENFORCED IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND THE GUARANTORS IRREVOCABLY CONSENTS TO THE
JURISDICTION OF EACH SUCH COURT IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. THE
GUARANTORS FURTHER IRREVOCABLY CONSENT 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 EACH OF THE GUARANTORS AT
ITS ADDRESS AS PROVIDED FOR NOTICES HEREUNDER. THE FOREGOING SHALL NOT LIMIT THE
RIGHT OF ANY BENEFICIARY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING ANY ACTION OR PROCEEDING, OR TO OBTAIN EXECUTION OF ANY JUDGMENT, IN
ANY OTHER JURISDICTION.
THE GUARANTORS HEREBY IRREVOCABLY WAIVE 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 GUARANTY OR ANY OTHER
TRANSACTION DOCUMENT IN ANY COURT LOCATED IN ANY JURISDICTION CHOSEN BY THE
BENEFICIARY IN ACCORDANCE WITH CLAUSE (A) OF THIS SUBSECTION, AND HEREBY FURTHER
IRREVOCABLY WAIVE ANY CLAIM THAT A COURT LOCATED IN SUCH JURISDICTION IS NOT A
CONVENIENT FORUM FOR ANY SUCH ACTION OR PROCEEDING.
THE GUARANTORS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE UNITED STATES FEDERAL AND STATE LAW, ALL IMMUNITY
(WHETHER ON THE BASIS OF SOVEREIGNTY OR OTHERWISE) FROM JURISDICTION, SERVICE OF
PROCESS, 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 GUARANTY OR ANY OTHER TRANSACTION DOCUMENT IN THE COURTS OF THE STATE OF
NEW YORK, OF THE UNITED STATES OR OF ANY OTHER COUNTRY OR JURISDICTION, AND THE
GUARANTORS HEREBY WAIVE 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.
Severability. If any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
Interpretation. Section headings in this Guaranty are included
herein for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect. As used in
this Guaranty, the words "including" and "include" mean including without
limiting the generality of any description preceding such term.
Further Assurances. At any time or from time to time, upon the
request of the Beneficiaries, the Guarantors shall execute and deliver such
further documents and do such other acts and things as the Beneficiaries may
reasonably request in order to effect fully the
purposes of this Guaranty.
IN WITNESS WHEREOF, each of the Guarantors has executed this Guaranty
by its duly authorized officer as of the date first above written.
GUARANTORS:
RTM, INC.
By:_______________________
Name:
Title:
RTM PARTNERS, INC.
By:_______________________
Name:
Title:
RTM MANAGEMENT CO., LLC
By:_______________________
Name:
Title:
TRIARC RESTAURANTS DISPOSITION 1,
INC.
By:_______________________
Name:
Title:
Schedule 8.2
SCHEDULE OF SECURITY DOCUMENTS
Pledge Agreement of Holdco, Inc.
Coverage. All of the capital stock of Newco One and Newco Two
(collectively, "the "Shares"), together with all dividends and other income
received thereon, and the proceeds and avails of any disposition of all or any
part thereof.
Deposits. (i) Stock certificates representing all of the capital
stock of Newco One and Newco Two, together with stock powers in respect thereof,
duly endorsed in blank with signatures guaranteed, (ii) an assignment of the
dividends and other income received thereon, and the proceeds and avails of any
disposition thereof, and (iii) such UCC and other forms as are necessary to
perfect the Beneficiaries' liens on the dividends and other income received
thereon and the proceeds and avails of any disposition thereof.
Obligations of the Pledgor. To cause the business and operations
of Newco One and Newco Two to be conducted in a manner consistent with the
Guaranty and to cause Newco One and Newco Two to refrain from any conduct
inconsistent with the Guaranty.
Privileges of the Pledgor. Pledgor shall be entitled to vote the
Shares so long as there has not been a default under the Guaranty.
Covenants of the Pledgor. Substantially similar to those
made in the Guaranty.
Release provisions.
Upon satisfaction and discharge of all assumed liabilities
under the FFCA Loan Agreements, the Shares shall be released.
If there is a public offering of capital stock of Newco One
and/or Newco Two, which includes some (but not all) of the Shares, and no
default under the Guaranty exists either immediately before, or immediately
after, such public offering, the proceeds of sale of the Shares shall be
released from the lien of the pledge to the extent that such proceeds exceed the
value of the Shares that remain subject to the pledge if such remaining shares
then have an aggregate book value at least equal to 150% of the aggregate book
value of all Shares that were subject to the pledge immediately prior to the
public offering.
Upon satisfaction and discharge of all assumed liabilities
under the FFCA Loan Agreements, the pledged assets shall be released from the
pledge.
Security Agreement of Newco One.
Coverage. All Assets, as defined in the Guaranty, of Newco
One.
Deposits. A general assignment of the Assets, together with all
documents, instruments and papers necessary to enable the Beneficiaries to have
perfected security interests in all of such Assets.
Obligations of Newco One. To fulfill its obligations under
the Transaction Documents (including the Guaranty) and to refrain from any
conduct inconsistent therewith, including, without limitation, to refrain
from the declaration and payment of dividends and other distributions to
its stockholders.
Privileges of Newco One. To operate its business without
interference from the Beneficiaries so long as there is no default under
the Guaranty.
Covenants of Newco One. Substantially similar to those
made in the Guaranty.
Release provisions.
During the first eighteen months following execution of the
Security Agreement (the "Initial Release Period"), collateral having a value
(determined in a manner consistent with the valuation principles that apply for
purposes of allocating the purchase price under the Stock Purchase Agreement,
except that no Restaurant shall be deemed to have a value of less than $250,000)
of $10 million shall be released from the liens imposed by the Security
Agreement solely for the purpose of enabling Newco One to (i) finance a portion
of the costs of acquiring or developing new Restaurants to be owned and operated
by Newco One, (ii) to make improvements, which under generally accepted
accounting principles are capital improvements, to existing Restaurants and
(iii) to make repairs but only to the extent that the costs of repairs to any
Restaurant exceed 1.5% of the net sales of such Restaurant.
During each succeeding twelve month period following the
Initial Release Period, collateral having a value (determined as provided in
Section 2.6.1 hereof) of $5 million shall be released from the liens imposed by
the Security Agreement for the purposes described in Section 2.6.1 hereof.
Upon satisfaction and discharge of all assumed liabilities
under the FFCA Loan Agreements, all of the collateral of Newco One subject to
the liens under the Security Agreement shall be released.
Security Agreement of RTM Management.
Coverage. The Management Agreements, the RTM Fees
receivable thereunder, and all income earned thereon.
Deposits. (i) An assignment of the Management Agreements
and the RTM Fees and any income earned thereon, and (ii) such documents,
instruments and papers as are necessary to enable the Beneficiaries to
have perfected security interests therein.
Obligations of RTM Management. To perform all services required of
it under the Management Agreements and to collect all RTM Fees, subject to the
provisions of the Guaranty.
Covenants of RTM Management. Substantially similar to
those in the Guaranty.
Release Provisions. Upon satisfaction and discharge of all assumed
liabilities under the FFCA Loan Agreements, the Management Agreements shall be
released from the liens imposed by the Security Agreement.
Fees.
The Secured Parties, on the one hand, and the Guarantors, on the other
hand, shall each be responsible for 50% of the costs and expenses incurred in
connection with the preparation of the Security Documents and any related
filings or recordings of such documents; provided, however, that in no event
shall the Guarantors be obligated to pay more than $200,000 of such costs.
