EXHIBIT 10.1
Sachs Capital Management LLC
c/o Redleaf Management Company, LLC
0000 X. Xxxx Xxxx, Xxxxx 000X
Xxxxxxx, Xxxxxxxx 00000
May 25, 2007
Deerfield & Company LLC
Xxx X'Xxxx Xxxxxx
0xx Xxxxx
0000 X. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Triarc Companies, Inc.
000 Xxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
RE: Exercise of Put Right
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Reference is made to (i) the Fourth Amended and Restated Operating
Agreement of Deerfield & Company LLC (the "Company"), dated as of June 26, 2004
(as amended, supplemented or otherwise modified from time to time, the
"Operating Agreement"), (ii) the notice provided to Sachs Capital Management LLC
("SCM") pursuant to Section 9.11(e)(iv) of the Operating Agreement, by letter
dated April 23, 2007 (the "Company Sale Notice"), (iii) the extension letter,
dated May 17, 2007, by and among SCM, Spensyd Asset Management LLLP, a Sachs
Affiliated Party ("XXX"), the Company, Triarc Companies, Inc. ("Triarc") and
Triarc Deerfield Holdings, LLC (as the holder of a majority of the Voting
Membership Interests) and (iv) the Employment Agreement, dated as of June 26,
2004 (as amended, supplemented or otherwise modified from time to time, the
"Employment Agreement"), among the Company, Deerfield Capital Management LLC and
Xxxxxxx X. Xxxxx ("Sachs"). Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to such terms in the Operating
Agreement.
1. Put Election.
(a) Pursuant to Section 9.11(e)(iv) of the Operating Agreement, and
subject to paragraph 1(b) hereof, SCM and XXX each hereby provide notice to
Triarc and the Company of the irrevocable exercise of their put right in
connection with the Company Sale contemplated by the Agreement and Plan of
Merger, dated as of April 19, 2007 (as amended, supplemented or otherwise
modified from time to time, the "Merger Agreement"), by and among Xxxxxxxxx
Xxxxxx Xxxxxxx Xxxx. ("XXX"), XXX Merger Company LLC, the Company and Triarc, as
sellers' representative, and referenced in the Company Sale Notice (the "Company
Sale Put Right") with respect to the 23.040% Percentage Interest (or 23.839%
Percentage Interest before giving effect to the Class C Profits Only Interests)
beneficially owned by SCM and the 1.948% Percentage Interest (or 2.015%
Percentage Interest before giving effect to the Class C Profits Only Interests)
beneficially owned by XXX, as of the date hereof, constituting all of the
Membership Interests beneficially owned by all Sachs Affiliated Parties as of
the date hereof.
(b) Notwithstanding anything to the contrary contained herein or in
the Operating Agreement, SCM shall have the right (exercisable by delivery of
written notice to the Company and Triarc no later than five Business Days after
delivery by the Company or Triarc of a written notice described in the next
sentence) to withdraw the exercise of the Company Sale Put Right contained in
paragraph 1(a) hereof, if there is any material change or modification in the
terms or structure of the transactions contemplated by the Merger Agreement. The
Company or Triarc shall give written notice to SCM no later than three Business
Days after any changes to the terms or structure of the transactions
contemplated by the Merger Agreement. If such exercise is withdrawn pursuant to
this paragraph 1(b), the Company Sale Put Right shall be reinstated and shall be
exercisable in connection with the Company Sale contemplated by the Merger
Agreement as so changed or modified (or any other Company Sale).
2. Resignations.
(a) As required under Section 9.11(e)(iv) of the Operating Agreement
in connection with the Company Sale Put Right exercised hereby, and subject to
paragraph 2(c) hereof, Sachs hereby irrevocably tenders his resignation, to
become effective subject to and immediately upon the closing of the Company Sale
contemplated by the Merger Agreement, from all positions of employment with the
Company and its Subsidiaries. Notwithstanding anything to the contrary contained
in the Operating Agreement, the Company and Sachs agree that, solely for
purposes of calculating the amount of Severance Benefit (as defined in the
Employment Agreement) payable to Sachs under the Employment Agreement, Sachs's
resignation shall be deemed to be a termination of employment "by the Deerfield
Companies without Cause (other than by reason of Employee's death or
Disability)". For purposes of determining the timing of payment of such
Severance Benefits, the date of the Notice of Termination (as defined in the
Employment Agreement) shall be deemed to be the date of the closing of the
Company Sale.
(b) Furthermore, as required under Section 3(f) of the Employment
Agreement, and subject to paragraph 2(c) hereof, in connection with Sachs's
resignation of employment as tendered hereby, Sachs hereby irrevocably tenders
his resignation, to become effective subject to and immediately upon the closing
of the Company Sale contemplated by the Merger Agreement, as a director and
Chairman of the Board of the Company and its Subsidiaries and as an officer or
director of any Affiliate of the Deerfield Companies (as defined in the
Employment Agreement). The foregoing does not apply to, or effect, Sachs's
position as a member of the board of directors of DFR.
(c) Notwithstanding anything to the contrary contained herein or in
the Employment Agreement, the resignations contained in paragraphs 2(a) and 2(b)
hereof shall be deemed withdrawn if the exercise of the Company Sale Put Right
contained in paragraph 1(a) hereof is withdrawn pursuant to Section 1(b) hereof.
3. Determination and Payment of Standard Price.
(a) Notwithstanding anything to the contrary contained in the
Operating Agreement, the parties hereto have mutually determined, through a
process of negotiation, and hereby agree that the Standard Price for the
Membership Interests subject to the Company Sale Put Right shall be calculated
using a Fair Market Value for all outstanding Membership Interests (including
those Membership Interests subject to the Company Sale Put Right) of
$285,373,000 minus the amount of the Severance Benefit determined pursuant to
paragraph 2(a) hereof and the Pro Rata Bonus (as defined in the Employment
Agreement) that is actually subtracted from the Aggregate Cash Consideration (as
defined in the Merger Agreement) in determining the Closing Date Aggregate Cash
Consideration (as defined in the Merger Agreement as in effect on the date
hereof) (such amount, the "Agreed Upon Fair Market Value"). Notwithstanding the
foregoing, to the extent the calculation of the Severance Benefit determined
pursuant to paragraph 2(a) hereof differs from the calculation of the Severance
Benefit that would have resulted under the Employment Agreement for a
termination of employment "by the Employee for Good Reason", such positive
difference shall, solely for purposes of this paragraph 3(a), result in a
dollar-for-dollar reduction in the Agreed Upon Fair Market Value only to the
extent such positive difference was not subtracted from the Aggregate Cash
Consideration in determining the Closing Date Aggregate Cash Consideration.
Triarc and the Company each represents and warrants that the last version of the
schedule of Company Expenses (as defined in the Merger Agreement) anticipated to
be incurred prior to the closing of the Company Sale contemplated by the Merger
Agreement that was delivered to SCM and XXX on the date hereof was prepared in
good faith based on currently available estimates and judgments.
(b) The parties hereto further agree that the Standard Price in
connection with the Company Sale Put Right shall be calculated as follows:
($149,224,590 x (23.839% + 2.015%)) + ((the Agreed Upon Fair Market Value -
$149,224,590) x (23.040% + 1.948%)) = Standard Price
The Standard Price as so computed shall be paid by Triarc in full
satisfaction of its obligations under Section 9.11(e)(iv) of the Operating
Agreement by wire transfer of immediately-available funds to accounts designated
by SCM and XXX, respectively, against delivery by SCM and XXX to Triarc of the
Membership Interests subject to the Company Sale Put Right (which SCM and XXX
hereby represent and warrant to Triarc shall be owned of record and beneficially
by them free and clear of all Liens), contemporaneously with the closing of the
Company Sale contemplated by the Merger Agreement. Notwithstanding anything to
the contrary contained in the Operating Agreement, no interest shall accrue on
the Standard Price as determined hereunder from the date hereof to the date of
payment.
4. Status as Member. The parties hereto acknowledge and agree that until
the consummation of the Company Sale and the Company Sale Put Right, SCM and XXX
shall be entitled to all rights as, and subject to all obligations of, Members
for purposes of the Operating Agreement, and all rights, but not any
obligations, as Members for purposes of the Merger Agreement, including Sections
6.1(b)(xvi), 6.21 and 6.22 of the Merger Agreement; provided, that for all
purposes under Article III of the Merger Agreement and Sections 11.1 through
(and including) 11.8 of the Merger Agreement, Triarc (and not SCM or XXX) shall
be considered a "Member that held issued and outstanding Membership Interests as
of immediately prior to the Effective Time" and "a holder of Membership
Interests issued and outstanding as of immediately prior to the Effective Time"
(or similar concept) with respect to the Membership Interests subject to the
Company Sale Put Right; provided further, (1) that for purposes of the second
sentence of Section 6.22(a), SCM and XXX (and not Triarc) shall be considered
"Members that held issued and outstanding Membership Interests as of immediately
prior to the Effective Time" with respect to the Membership Interests subject to
the Company Sale Put Right and shall be entitled to payments, if any made
pursuant thereto and (2) that nothing contained herein shall affect SCM and
SAM's rights under Section 6.14 which shall survive the consummation of the
Company Sale without limitation. In furtherance of the foregoing, the parties
acknowledge and agree that the distributions that are made by the Company to its
members, including without limitation SCM and XXX, in accordance with their
respective Percentage Interests (as defined in the Operating Agreement) in
effect at the time of each such distribution, prior to the closing of the
Company Sale contemplated by the Merger Agreement shall satisfy fully the
Company's obligations under Section 9.11(g) of the Operating Agreement.
The parties hereto agree that except as expressly provided herein, this
letter agreement shall not by implication or otherwise, alter, modify, amend or
in any way affect any of the terms, conditions, obligations or agreements
contained in the Operating Agreement or the Employment Agreement and the
Operating Agreement and the Employment Agreement shall each otherwise remain in
full force and effect in accordance with its terms. This letter agreement shall
be governed by and construed in accordance with the domestic substantive laws of
the State of Illinois, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any other
jurisdiction. This letter agreement shall be binding on the parties and their
respective successors and permitted assigns. This letter agreement and any
rights and obligations hereunder may not be assigned by any party without the
prior written consent of the other parties, except in connection with a sale of
all or substantially all of the assets of such party in which all of the
obligations of such party hereunder are assumed by the purchaser of such assets.
None of the provisions in this letter agreement shall be for the benefit of or
enforceable by any Person other than the parties and their respective successors
and permitted assigns. This letter agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the same
document and shall constitute the same instrument.
[Signature page follows.]
If the foregoing accurately reflects our understanding, please so indicate
by signing below and returning a copy of this letter to us.
Very truly yours,
SACHS CAPITAL MANAGEMENT LLC
/s/XXXXXXX X. XXXXX
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By: Xxxxxxx X. Xxxxx
Its: Manager
SPENSYD ASSET MANAGEMENT LLLP
By: Rosedon Capital Holdings, LLC
Its: General Partner
/s/XXXXXXX X. XXXXX
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By: Xxxxxxx X. Xxxxx
Its: Manager
/s/XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Agreed to and accepted as of
the date first written above:
DEERFIELD & COMPANY LLC
/s/XXXX X. XXXXXX
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By: Xxxx X. Xxxxxx
Its:Chief Operating Officer
TRIARC COMPANIES, INC.
/s/XXXXX X. XXXXXX
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By: Xxxxx X. Xxxxxx
Its: Executive Vice President
