Agreement
between and among
TJ Holding Company, Inc.
Arby's, Inc. d/b/a Triarc Restaurant Group
Paramark Enterprises, Inc.
TABLE OF CONTENTS
Page
ARTICLE 1 ASSIGNMENT OF THE TJC LICENSE AGREEMENTS; PAYMENT; CLOSING 2
Section 1.1 Assignment of the TJC License
Agreements 2
Section 1.2 Closure of Poughkeepsie Bakery 3
Section 1.3 Consideration 3
Section 1.4 Additional Consideration 3
Section 1.5 Off-Set of Deferred Payments 5
Section 1.6 The Closing 5
Section 1.7 No Assumption of Liabilities 5
ARTICLE 2 DISCHARGE AND RELEASE; ACCOUNTING; CONTINUING RESTRICTIONS 6
Section 2.1 Discharge and Release 6
Section 2.2 Termination of Agreements 6
Section 2.3 Accounting 6
Section 2.4 Continuing Restrictions and
Obligations 6
ARTICLE 3 REPRESENTATIONS OF PARAMARK 6
Section 3.1 Organization and Authority 6
Section 3.2 Authorization; No Conflicts 7
Section 3.3 Ownership of the TJC License
Agreements 7
Section 3.4 Litigation 8
Section 3.5 Financial Statements 8
Section 3.6 Franchises 8
Section 3.7 Approvals 9
Section 3.8 Contracts and Commitments 9
Section 3.9 Compliance with Laws 9
Section 3.10 Disclosure 9
Section 3.11 Absence of Certain Changes 9
Section 3.12 Product Liability 10
Section 3.13 Finders 10
Section 3.14 Undisclosed Liabilities 10
Section 3.15 Financial Condition 10
Section 3.16 The Purchase Agreement 11
ARTICLE 4 REPRESENTATIONS OF TJHC 11
Section 4.1 Organization and Authority 11
Section 4.2 Authorization; No Conflicts 11
Section 4.3 Regulatory Approvals 12
Section 4.4 Finders 12
Section 4.5 The Purchase Agreement 12
Section 4.6 Disclosure 12
ARTICLE 5 REPRESENTATIONS OF ARBY'S 12
Section 5.1 Organization and Authority 12
Section 5.2 Authorization; No Conflicts 12
Section 5.3 Regulatory Approvals 13
Section 5.4 Finders 13
Section 5.5 The Purchase Agreement 13
Section 5.6 Disclosure 13
ARTICLE 6 COVENANTS OF PARAMARK 14
Section 6.1 Interim Operations of Paramark 14
Section 6.2 Access to Information 14
Section 6.3 Consents and Approvals 15
Section 6.4 Additional Agreements 15
Section 6.5 Notification of Certain Matters 15
Section 6.6 SEC Filings 16
Section 6.7 Continuation of Business. 16
Section 6.8 Shareholder Approval 16
ARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF TJHC AND ARBY'S 17
Section 7.1 Truth of Representations and
Warranties of Paramark; Compliance
with Covenants and Obligations 17
Section 7.2 Closing Deliveries 17
Section 7.3 Corporate Proceedings 17
Section 7.4 Government Approvals 17
Section 7.5 Third Party Consents 17
Section 7.6 Bulk Sales Law Compliance 18
Section 7.7 Adverse Proceedings 18
Section 7.8 Financial Condition 18
Section 7.9 Termination of Broker Contracts 18
ARTICLE 8 CONDITIONS TO THE OBLIGATIONS OF PARAMARK 18
Section 8.1 Truth of Representations and
Warranties of TJHC and Arby's;
Compliance with Covenants and
Obligations 18
Section 8.2 Government Approvals 19
Section 8.3 Corporate Proceedings 19
Section 8.4 Adverse Proceedings 19
Section 8.5 Fairness Opinion 19
ARTICLE 9 INDEMNIFICATION 19
Section 9.1 Indemnification of TJHC and
Paramark for Misrepresentations 19
Section 9.2 Indemnification of Arby's and
Paramark for Misrepresentations 20
Section 9.3 Survival of Representations 20
Section 9.4 Paramark's Indemnity 20
Section 9.5 TJHC's and Arby's Indemnity 20
Section 9.6 Notice for Claims of
Indemnification 20
Section 9.7 Defense by Indemnifying Party 21
Section 9.8 Indemnification Under the
Purchase Agreement 21
ARTICLE 10 GENERAL PROVISIONS 22
Section 10.1 Termination 22
Section 10.2 Effect of Termination 22
Section 10.3 Notices 22
Section 10.4 Successors and Assigns 23
Section 10.5 Amendments 23
Section 10.6 Waivers 23
Section 10.7 Expenses 24
Section 10.8 Construction 24
Section 10.9 Interpretation 24
Section 10.10 Governing Law 24
Section 10.11 No Third Party Beneficiaries 24
Section 10.12 Waiver of Jury Trial 24
Section 10.13 Entire Agreement 24
EXHIBITS
EXHIBIT A FORM OF THE NEW PROMISSORY NOTE
EXHIBIT B GUARANTY
EXHIBIT C WHOLESALE LICENSE AGREEMENT
EXHIBIT D TRANSACTIONS AT CLOSING
EXHIBIT E ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT F RELEASE AND DISCHARGE (PARAMARK) (TJHC/ARBY'S)
EXHIBIT G PARAMARK CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT H LOCCISANO CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT I XXXXXXXX CONFIDENTIALITY AND NON-COMPETE AGREEMENT
EXHIBIT J OPINION OF COUNSEL FOR PARAMARK
SCHEDULES
SCHEDULE 1.1 TJC LICENSE AGREEMENTS
SCHEDULE 1.7 ASSUMED LIABILITIES
SCHEDULE 3.5 FINANCIAL STATEMENTS
SCHEDULE 3.6 LOCATIONS OF TJC BAKERIES
SCHEDULE 3.7 APPROVAL AND FILINGS (of Paramark)
SCHEDULE 3.8 CONTRACTS AND COMMITMENTS
SCHEDULE 3.11 ADVERSE CHANGES
SCHEDULE 3.12 PRODUCT LIABILITY
SCHEDULE 4.3 REGULATORY APPROVALS AND FILINGS (of TJHC)
SCHEDULE 5.3 REGULATORY APPROVALS (of Arby's)
AGREEMENT
This Agreement (the "Agreement"), dated June 30, 1998, is by and among
Paramark Enterprises, Inc., a Delaware corporation ("Paramark"), TJ Holding
Company, Inc., a Delaware corporation ("TJHC"), and Arby's, Inc., d/b/a Triarc
Restaurant Group, a Delaware corporation ("Arby's"). Paramark, TJHC, and Arby's
are collectively referred to in this Agreement as the "Parties" and,
individually, as a "Party."
PRELIMINARY STATEMENT
A. Pursuant to a purchase agreement (the "Purchase Agreement") dated June 3,
1996, TJHC acquired certain proprietary marks (the "Proprietary Marks"), secret
recipes, and technical information (the Proprietary Marks, secret recipes, and
technical information are collectively referred to as "Intellectual Property")
related to a system (the "TJC System") owned by Paramark, formerly known as T.J.
Cinnamons, Inc., for developing and operating food service units offering
gourmet cinnamon rolls and other bakery items ("TJC Products"). TJHC
subsequently licensed its affiliate Arby's to use and license others to use the
Intellectual Property. Pursuant to the Purchase Agreement, T.J. Cinnamons, Inc.
changed its name to Paramark Enterprises, Inc.
B. Paramark owns and operates, and franchises others ("Franchisees") to operate,
retail locations ("TJC Bakeries") using the Intellectual Property pursuant to
franchise agreements ("Franchise Agreements"); licenses or permits others
("Retail Licensees") to use the Intellectual Property to prepare and sell TJC
Products at or from certain retail locations other than TJC Bakeries ("TJC
Retail Locations"), prepares and sells at wholesale ("Wholesale Accounts"), for
resale through retail food stores, certain TJC Products, and markets and sells
certain TJC Products for sale to Wholesale Accounts through independent food
brokers ("Brokers"). The Franchisees, Retail Licensees, Wholesale Accounts, and
Brokers are referred to herein as the "TJC Licensees". The agreements between
Paramark and the Franchisees, Retail Licensees, Wholesale Accounts, and Brokers
are referred to herein, in the aggregate, as the "TJC License Agreements".
C. Arby's and Paramark entered into a License Agreement dated August 29, 1996,
whereby Paramark was authorized to use the Intellectual Property to prepare and
sell TJC Products at one specified retail location (the "Poughkeepsie Bakery");
distribute and authorize TJC Wholesale Licensees to distribute TJC Products,
subject to certain conditions; and to fulfill the obligations under the TJC
License Agreements, including the continuity of rights of Franchisees and Retail
Licensees to prepare and sell TJC Products, and to use the Intellectual Property
in connection therewith.
D. On August 29, 1996, TJHC and Paramark entered into a management agreement
(the "Management Agreement"), and on August 29, 1996, TJHC assigned the
Management Agreement to Arby's, whereby Arby's agreed to manage and operate the
business of Paramark related to the TJC Bakeries, the Franchise Agreements, the
Poughkeepsie Bakery, and the Retail Locations. The Purchase Agreement, License
Agreement, and Management Agreement are referred to in the aggregate herein as
the "TJC Agreements."
E. Pursuant to the License Agreement:
(a) Xxxxxxx X. Xxxxxxxxx and Xxxx Xxxxxxxx entered into
Confidentiality and Non- Competition Agreements with TJHC and
Arby's, dated August 29, 1996.
(b) Xxxxxx Xxxxxxxxxx and Xxxxxxx Xxxxxxxxx entered into
Confidentiality Agreements with TJHC and Arby's, dated August
29, 1996; and
(c) Xxxx Xxxxxx and Xxxx Xxxxxxxx, as trustees of the Xxxxxxx
X. Xxxxxxxxx Irrevocable Trust F/B/O Xxxxxxx Xxxxxxxxx and the
Xxxxxxx X. Xxxxxxxxx Irrevocable Trust F/B/O Xxxxxxx
Xxxxxxxxx, entered into a Stock Restriction Agreement with
TJHC and Arby's.
F. The Parties wish to terminate the TJC Agreements, except with respect to
certain indemnification obligations and survival of representations and
warranties, as provided in this Agreement.
G. Subject to and upon the terms and conditions set forth in this Agreement,
Paramark wishes to assign to TJHC all of its rights and obligations under
certain TJC License Agreements, and TJHC wishes to assume all of the rights and
obligations of Paramark under certain TJC License Agreements. All TJC License
Agreements not assigned to TJHC will be terminated.
Therefore, in consideration of the mutual covenants and conditions
contained in this Agreement, Paramark, TJHC, and Arby's agree as follows:
ARTICLE 1
ASSIGNMENT OF THE TJC LICENSE AGREEMENTS; PAYMENT; CLOSING
Section 1.1 Assignment of the TJC License Agreements. Subject to and upon
the terms and conditions of this Agreement, on the Closing
Date (as defined in Section 1.6), Paramark shall transfer,
convey, assign, and deliver to TJHC, and TJHC shall assume
from Paramark, free and clear of any and all pledges, liens,
security interests, restrictions, prior assignments,
encumbrances, or claims of any kind or nature (collectively,
"Liens," and each a "Lien") (a) all of Paramark's rights,
obligations, title, and interest in, under, and to the TJC
License Agreements identified in Schedule 1.1 to this
Agreement; and (b) upon the expiration or termination of the
Wholesale License Agreement referred to in Section 1.4.1, such
inventory, product ingredients, and materials used in
producing the TJC Products that use or include the
Intellectual Property, and other assets identified in Schedule
1.1 that are owned or controlled by Paramark and used by
Paramark in conjunction with Paramark's operations under the
TJC License Agreements or the Wholesale License Agreement.
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Section 1.2 Closure of Poughkeepsie Bakery. On or before the Closing Date,
Paramark shall cease operating the Poughkeepsie Bakery, and
cease using the Proprietary Marks or any of the Intellectual
Property at the site of the Poughkeepsie Bakery, and Paramark
shall terminate the lease for such site. TJHC shall pay to
Paramark an amount not to exceed one half (1/2) of Paramark's
"buy-out costs" that Paramark actually pays to the landlord of
the site upon termination of the lease for the site. "Buy-out
costs" shall mean the net present value of the remaining rent
payments that would be due under the lease from the date of
termination until the end of the lease, which Paramark
represents is not later than June 30, 1999. Buy-out costs
shall include only the per square foot rental charges, and
shall exclude common area maintenance charges, taxes, or other
charges and expenses under the lease. TJHC shall pay Paramark
the amount specified under this Section 1.2 thirty (30) days
following TJHC's receipt of a statement from the landlord
specifying Paramark's buy-out costs actually paid to the
landlord.
Section 1.3 Consideration. The consideration to be paid by TJHC for the
assignment of the TJC License Agreements by Paramark and the
performance of all of its obligation pursuant to this
Agreement (the "Price"), shall be Four Million Dollars
($4,000,000), which shall be paid as follows:
1.3.1 Cash at the Closing in the amount of Three Million Dollars
($3,000,000).
1.3.2 Delivery at the Closing of a promissory note (the "New
Promissory Note"), substantially in the form of Exhibit A to
this Agreement, in the principal amount of One Million Dollars
($1,000,000), without interest, payable in twenty-four equal
monthly installments of Forty-One Thousand Six Hundred
Sixty-Six Dollars and sixty-seven cents ($41,666.67) on the
first (1st) day of each month following the month of the
Closing Date, provided, however, that such payments shall be
subject to the provisions of Section 1.5. All payments of
principal on the New Promissory Note will be guaranteed by
Triarc Companies, Inc. (the "Guaranty"). The Guaranty shall be
substantially in the form attached here to as Exhibit B.
Section 1.4 Additional Consideration. In addition to the consideration
specified in Section 1.3 above, TJHC shall pay to Paramark the
following amounts ("Additional Consideration") in accordance
with the following terms and conditions:
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1.4.1 Upon execution of this Agreement, Paramark shall execute an
agreement with Arby's attached hereto as Exhibit C (the
"Wholesale License Agreement") whereby Paramark will have the
right to produce and distribute certain TJC Products, as
specifically set forth in the Wholesale License Agreement, for
a limited period of time.
1.4.2 Provided that Paramark is operating in compliance with the
Wholesale License Agreement, Arby's shall be obligated to pay
to Paramark the following amounts if, for the period January
1, 1998 through December 31, 1998 ("Fiscal 1998"), the total
Net Sales (as defined in the Wholesale License Agreement) of
TJC Products sold by Paramark to the Wholesale Accounts
assigned to TJHC hereunder and specified in the Wholesale
License Agreement meet or exceed the following Net Sales
targets:
1.4.2.1 If the total Net Sales for Fiscal 1998 exceed Two Million Two
Hundred Fifty Thousand Dollars ($2,250,000), but do not exceed
Two Million Seven Hundred Thousand Dollars ($2,700,000), the
Additional Consideration shall be Two Hundred Fifty Thousand
Dollars ($250,000);
1.4.2.2 If the total Net Sales for Fiscal 1998 exceed Two Million
Seven Hundred Thousand Dollars ($2,700,000), but do not exceed
Three Million One Hundred Fifty Thousand Dollars ($3,150,000),
the Additional Consideration shall be Five Hundred Thousand
Dollars ($500,000);
1.4.2.3 If the total Net Sales for Fiscal 1998 exceed Three Million
One Hundred Fifty Thousand Dollars ($3,150,000), but do not
exceed Three Million Six Hundred Thousand Dollars
($3,600,000), the Additional Consideration shall be Seven
Hundred Fifty Thousand Dollars ($750,000);
1.4.2.4 If the total Net Sales for Fiscal 1998 exceed Three Million
Six Hundred Thousand Dollars ($3,600,000), the Additional
Consideration will be One Million Dollars ($1,000,000).
1.4.3 Paramark shall provide to TJHC and Arby's monthly reports
concerning Net Sales, within fifteen (15) days following the
end of each month, and shall provide TJHC and Arby's with
copies of all of Paramark's quarterly filings with the
Securities and Exchange Commission, within ten (10) days
following such filings. All Net Sales shall be subject to
verification and/or audit by TJHC at any time. The Additional
Consideration, if any, shall not be paid unless Paramark has
provided (a) a final Net Sales report; and (b) either (i) an
audited financial statement for Fiscal 1998, or (ii) an audit
of the final Net Sales report. Any payment of Additional
Consideration shall be subject to offset as provided for in
Section 1.5. The audited financial statement or unaudited
final Net Sales report shall segregate clearly Net Sales (as
defined in the Wholesale License Agreement) as separate line
items, and shall include data by SKUs (Stockkeeping units) and
by vendor. Any Additional Consideration shall be paid fifteen
(15) business days following delivery of the later of (a)
Paramark's audited financial statements for Fiscal 1998, or
(b) the audited final Net Sales report, provided that such
information is acceptable to TJHC, based on TJHC's reasonable
discretion or reasonable verification.
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Section 1.5 Off-Set of Deferred Payments. All payments owed by Arby's or
TJHC to Paramark under Section 1.3.2 or Section 1.4 shall be
reduced by any amount claimed as damages by TJHC or Arby's
under Section 9.1 or Section 9.4 of this Agreement in
connection with any misrepresentation, breach of warranty, or
non- fulfillment of or failure to perform any covenant,
condition, or agreement of Paramark set forth in, or attached
to, this Agreement, any transactions contemplated by this
Agreement, or any statement, certificate, schedule, or
document furnished pursuant to this Agreement, or any other
claim against Paramark subject to the provisions of Section
9.1 or 9.4 hereof. Any amount not paid by TJHC or Arby's
pursuant to Section 1.3.2 or Section 1.4 shall be credited to
satisfy any final and unappealable judgment awarded to TJHC or
Arby's in any proceedings to the extent of such award, and the
remainder, if any, shall be paid to Paramark. In the event
Paramark shall ultimately not be found liable for any damages
to or costs of TJHC or Arby's in a final and unappealable
judgment, the full amount shall be paid by TJHC or Arby's to
Paramark.
Section 1.6 The Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of
Rudnick, Wolfe, Xxxxxxx & Xxxxxxx, located at 0000 Xxx Xxxx
Xxxxxx, X.X., Xxxxxxxxx, Xxxxxxxxxx, X.X. (a) on July 31,
1998, at 10:00 a.m.; or (b) as soon as practical after
Paramark receives shareholder approval of the transaction; or
(c) at such other place, time, or date as may be mutually
agreed upon in writing by the Parties (the "Closing Date"),
upon satisfaction of the conditions as set forth in Article 7
and Article 8 of this Agreement. The transactions to take
place at the Closing are set forth in Exhibit D to this
Agreement.
Section 1.7 No Assumption of Liabilities. Except as set forth in Schedule
1.7, neither TJHC nor Arby's has assumed and shall not assume,
any liabilities or obligations of any nature, known or
unknown, existing or contingent of Paramark, except TJHC shall
assume all obligations of Paramark to TJC Licensees under the
TJC License Agreements existing on or after the Closing Date
arising out of TJHC's conduct on or after the Closing Date
pursuant to an Assignment and Assumption Agreement
substantially in the form attached hereto as Exhibit E.
Without limiting the foregoing, neither TJHC nor Arby's shall
assume any contract, or any liability or obligation under any
contract, between Paramark and a food broker, wholesaler, or
retail account.
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ARTICLE 2
DISCHARGE AND RELEASE; ACCOUNTING; CONTINUING RESTRICTIONS
Section 2.1 Discharge and Release. At the Closing Date, Paramark shall
release and discharge TJHC and Arby's and TJHC and Arby's
shall each release and discharge Paramark, with respect to all
obligations of TJHC or Arby's to Paramark or Paramark to TJHC
or Arby's after the Closing Date pursuant to any of the TJC
Agreements, and such other liabilities and obligations as are
set forth in the release and discharge. The release and
discharge shall be substantially in the form of Exhibit F.
Section 2.2 Termination of Agreements. At the Closing Date, TJHC and/or
Arby's will terminate the Confidentiality and Non-Competition
Agreements executed by Xxxxxxx X. Xxxxxxxxx, and Xxxx
Xxxxxxxx, and TJHC or Arby's shall pay to Loccisano and
Xxxxxxxx any payments due under the Confidentiality and
Non-Competition Agreements
Section 2.3 Accounting. Paramark shall conduct an inventory of all
products, ingredients, and materials used by Paramark under
the License Agreement, as of midnight the day preceding the
Closing Date, and shall provide such inventory list to TJHC or
Arby's on the Closing Date.
Section 2.4 Continuing Restrictions and Obligations. In order to ensure a
smooth transition and assignment of Wholesale Accounts and
agreements with Brokers, if any, Arby's and Paramark will
enter into the Wholesale License Agreement. Further, and
notwithstanding the execution of the Wholesale License
Agreement, Paramark, Paramark's affiliates, including
Interbake Brands, Inc., Loccisano and Xxxxxxxx each shall
execute a confidentiality and non-competition agreement, each
substantially in the form of Exhibit G, Exhibit H, and Exhibit
I, to the Agreement, respectively.
ARTICLE 3
REPRESENTATIONS OF PARAMARK
Paramark represents and warrants to each of TJHC and Arby's as follows:
Section 3.1 Organization and Authority. Paramark is a corporation duly
organized, validly existing, and in good standing under the
laws of the state of Delaware; and has all requisite power and
authority (corporate and other) to own its properties, to
carry on its business as now being conducted, to perform its
obligations under the TJC License Agreements, to execute and
deliver this Agreement and all other agreements contemplated
hereby, to perform its obligations hereunder and thereunder,
and to consummate the transactions contemplated hereby.
6
Section 3.2 Authorization; No Conflicts. The execution and delivery by
Paramark of this Agreement and the performance by Paramark of
its obligations hereunder have been duly and validly
authorized by all requisite corporate action. All requisite
corporate actions, including, without limitation, obtaining
shareholders' approval of this Agreement and the contemplated
transactions, shall be completed prior to the Closing. This
Agreement constitutes, and each of the other agreements
referred to herein, when executed, will constitute, the valid
and legally binding obligations of Paramark, enforceable
against Paramark in accordance with their respective terms.
The execution, delivery, and performance of this Agreement,
and the consummation by Paramark of the transactions
contemplated hereby, do not and will not, (a) conflict with,
violate or breach the provisions of any law, rule, or
regulation applicable to Paramark; (b) conflict with, violate,
or breach any provision of Paramark's Certificate of
Incorporation or Bylaws; (c) conflict with, violate, or breach
any judgment, decree, order, or award of any court, arbitral
tribunal, administrative agency or commission, or other
government entity or regulatory authority or agency; (d)
constitute a fraudulent conveyance under any state law or
federal bankruptcy law; or (e) conflict with or result in the
breach or termination of any term or provision of any
agreement or instrument to which Paramark is a party or by
which Paramark is or may be bound.
Section 3.3 Ownership of the TJC License Agreements. Paramark has all
exclusive rights, title, and interest in and to the TJC
License Agreements; and will transfer, convey, and assign the
TJC License Agreements to TJHC at the Closing, free and clear
of any Liens. Each of the TJC License Agreements is binding
upon the parties thereto, is in full force and effect, and is
not subject to the payment of any taxes of any kind or the
taking of any other actions by Paramark to maintain its
validity or effectiveness; and (i) there are no restrictions
on the direct or indirect transfer and assignment of the TJC
License Agreements, or any interest therein, held by Paramark
in respect of the TJC Licenses Agreement; and (ii) Paramark is
not, nor has it received any notice that it is, in default (or
with the giving of any notice or lapse or time or both, would
be in default) under any TJC License Agreement or any
contract, agreement, or understanding with respect thereto.
The delivery to TJHC of the Assignment and Assumption
Agreement contemplated by this Agreement will exclusively vest
all of Paramark's rights, title, and interest in and to each
TJC License Agreements and the goodwill relating to or
associated with each TJC License Agreement, in TJHC, free and
clear of any Liens.
7
Section 3.4 Litigation. There is no litigation, suit, claim, action,
investigation, dispute, proceeding, or controversy, pending or
threatened, before any court, administrative agency, or other
governmental authority or arbitrator relating to or affecting
the rights and obligations of Paramark under any TJC License
Agreement or any other agreement or contract used or
previously used in connection with Paramark's operation of a
franchise system that used the Proprietary Marks. Paramark is
not aware of any facts or circumstances that could reasonably
be interpreted to give rise to any such litigation, suit,
claim, action, investigation, dispute, proceeding, or
controversy with respect thereto. Paramark is not in violation
of or in default with respect to any judgement, order, writ,
injunction, decree, or rule of any court, administrative
agency, governmental authority, or arbitrator, or any
regulation of any administrative agency or governmental
authority which would adversely affect Paramark's rights and
obligations pursuant to this Agreement or any TJC License
Agreement. There is no unsatisfied judgement, order, decree,
stipulation, or injunction against Paramark relating to the
obligations of Paramark under any TJC License Agreement nor
any claim, dispute, complaint, action, suit, proceeding,
hearing, or investigation of, in any court or governmental
entity or before any arbitrator, to which Paramark is a party
or is threatened to be made a party.
Section 3.5 Financial Statements. Attached as Schedule 3.5 are complete
copies of Paramark's financial statements (balance sheets,
statements of operation, and statements of cash flow;
collectively the "Financial Statements") audited as of, and
for the fiscal year ended, December 31, 1997. The Financial
Statements fairly present the financial condition of Paramark
as of the date indicated, the results of operations, the sales
of TJC Products, and the revenues from Retail Licensees and
Wholesale Accounts for the respective period specified, and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis. Since the
date of the Financial Statements, there has not been any
change or any event or development which, individually or
together with other such events or developments, could
reasonably be expected to have a material adverse effect on,
the condition (financial or otherwise), results of operations,
business, or assets of, or the sale of TJC Products by,
Paramark, or the prospects of the TJC Licensees.
Section 3.6 Franchises. Attached as Schedule 3.6 is a complete list of all
of the locations of TJC Bakeries, and Paramark has delivered
to TJHC and Arby's, on or prior to the date hereof, a copy of
the Franchise Agreements currently in effect, as of the date
hereof, with respect to each of the TJC Bakeries (excluding
the Poughkeepsie Bakery owned and operated by Paramark) and
all amendments thereto. Other than as provided in the
Franchise Agreements, there are no outstanding commitments,
promises, agreements, or understandings, either written or
verbal, which have been made by Paramark with respect to the
rights and obligations of any of the Franchisees.
8
Section 3.7 Approvals. All consents, approvals, authorizations, and other
requirements required by any TJC Agreements, or prescribed by
any law, rule, or regulation which must be obtained or
satisfied by Paramark, which are necessary for the execution
and delivery of this Agreement and the other documents to be
executed and delivered by Paramark in connection with this
Agreement are set forth in Schedule 3.7 attached hereto, and
have been, or will be, obtained and satisfied prior to the
Closing. Paramark is not required to submit any notice,
report, or other filing with or to any third party or
governmental entity in connection with the execution,
delivery, or performance of this Agreement by Paramark, except
as shown in Schedule 3.7.
Section 3.8 Contracts and Commitments. There are no contractual
commitments, whether written or oral of Paramark, with respect
to the TJC License Agreements other than those contained in
the TJC License Agreements. Paramark has not breached,
received any written claim or threat that it has breached, or
received any material oral claim or threat that it has
materially breached, any of the terms or conditions of the TJC
License Agreements. Except as set forth in Schedule 3.8,
Paramark is not aware of any breach of any of the terms and
conditions of the TJC License Agreements or any other
agreements, contracts, or commitments used or previously used
in connection with the TJC System, by any party to such
agreements, contracts, or commitments or any of their
successors or assigns.
Section 3.9 Compliance with Laws. Paramark is not, nor has it at any time
within the last five (5) years been, nor has it received any
notice that it is or has at any time within the last five (5)
years been, in violation of or in default under, in any
material respect, any law or order applicable to Paramark, the
TJC Products, or the TJC System, including any franchise sales
or relationship laws.
Section 3.10 Disclosure. No representation or warranty by Paramark in this
Agreement or in any exhibit, list, statement, document, or
information set forth in or attached to any schedule delivered
or to be delivered pursuant to this Agreement, contains or
will contain any untrue statement of a material fact or omits
or will omit any material fact necessary in order to make the
statements contained in this Agreement not misleading.
Paramark has disclosed to TJHC all material facts pertaining
to the transactions contemplated by this Agreement.
Section 3.11 Absence of Certain Changes. Since December 31, 1997, and
except as set forth in Schedule 3.11, there has been no event
or occurrence, nor sale, lease, license, or purchase of any
tangible or intangible asset, or occurrence, that has had or
could reasonably be expected to have a material adverse effect
on Paramark, its financial condition or business operations.
9
Section 3.12 Product Liability. Except as set forth in Schedule 3.12,
Paramark does not have any liability (and there is no basis
for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against
Paramark giving rise to any liability) arising out of any
injury to persons or property as a result of the ownership,
possession, or use of any product manufactured, sold, or
delivered by Paramark or any TJC Licensee from or with respect
to the TJC Products, prior to the date hereof.
Section 3.13 Finders. No broker's, finder's, or any similar fee have been
incurred by or on behalf of Paramark in connection with the
origin, negotiation, execution, or performance of this
Agreement or the transactions contemplated hereby for which
TJHC or Arby's shall have any liability.
Section 3.14 Undisclosed Liabilities. Paramark does not have any liability
related to its business (and there is no basis for any present
or future charge, complaint, action, suit, proceeding,
hearing, investigation, claim, or demand against it giving
rise to any liability), except for (a) liabilities set forth
on the face of the Financial Statements and (b) liabilities
which have arisen after the date of the Financial Statements
in the ordinary course of business, none of which relates to
any breach of contract, breach of warranty, tort,
infringement, or violation of law or arose out of any charge,
complaint, action, suit, proceeding, hearing, investigation,
claim, or demand.
Section 3.15 Financial Condition. Paramark is not entering into the
transactions contemplated by this Agreement with the actual
intent to hinder, delay, or defraud either present or future
creditors. On and as of the Closing:
3.15.1 the present fair salable value of the assets of Paramark (on a
going concern basis) will exceed the probable liability of
Paramark on its debts (including its contingent obligations);
3.15.2 Paramark has not incurred, nor does it intend to or believe
that it will incur, debts (including contingent obligations)
beyond its ability to pay such debts as such debts mature
(taking into account the timing and amounts of cash to be
received from any source, and of amounts to be payable on or
in respect of debts), and the amount of cash available to
Paramark after taking into account all other anticipated uses
of funds is anticipated to be sufficient to pay all such
amounts on or in respect to debts, when such amounts are
required to be paid; and
3.15.3 Paramark will have sufficient capital with which to conduct
its present and proposed business, and the property of
Paramark does not and will not constitute an unreasonably
small amount of capital with which to conduct its present or
proposed business.
In addition, Paramark will be solvent as of the Closing Date,
as measured by its short term assets exceeding its short term
liabilities, its total assets exceeding its total liabilities,
and that Paramark has paid, and will continue to pay, its
debts as they come due. Paramark shall furnish to TJHC and
Arby's at Closing a certificate, signed by Xxxx Xxxxxxxx,
attesting to the truth and accuracy of this representation.
10
Section 3.16 The Purchase Agreement. The representations and warranties of
Paramark in the Purchase Agreement are true and correct as of
the date of this Agreement, and shall survive the termination
of the Purchase Agreement.
ARTICLE 4
REPRESENTATIONS OF TJHC
TJHC represents and warrants to Paramark as follows:
Section 4.1 Organization and Authority. TJHC is a corporation duly
organized, validly existing, and in good standing under the
laws of the state Delaware; and has all requisite power and
authority (corporate and other) to own its properties, and has
full power to execute and deliver this Agreement and all other
agreements contemplated hereby, to perform its obligations
hereunder and thereunder, and to consummate the transactions
contemplated thereby.
Section 4.2 Authorization; No Conflicts. The execution and delivery of
this Agreement and the performance of TJHC of its obligations
hereunder by TJHC has been duly and validly authorized by all
requisite corporate action. Without limiting the generality of
the foregoing, the Board of Directors of TJHC has duly
authorized the transactions contemplated by the Agreement.
This Agreement and each of the other agreements referred to
herein, when executed will constitute the valid and legally
binding obligations of TJHC, enforceable against TJHC in
accordance with their respective terms, except that (i) such
enforcement may be subject to applicable bankruptcy,
insolvency, or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding
therefore may be brought. The execution, delivery, and
performance of this Agreement, and the consummation by TJHC of
the transactions contemplated hereby, will not, (a) violate
the provisions of any law, rule, or regulation applicable to
TJHC; (b) conflict with, violate, or breach a provision of
TJHC's Certificate of Incorporation or Bylaws; (c) conflict
with, violate any judgment, decree, order, or award of any
court, arbitral tribunal, administrative agency or commission,
or other governmental entity or regulatory authority or
agency; or (d) conflict with or result in the breach or
termination of any term or provision of any agreement or
instrument to which TJHC is a party or by which TJHC is or may
be bound.
11
Section 4.3 Regulatory Approvals. All consents, approvals, authorizations,
and other requirements prescribed by any law, rule, or
regulation which must be obtained or satisfied by TJHC, which
are necessary for the execution and delivery of this Agreement
and the other documents to be executed and delivered by TJHC
in connection with this Agreement are set forth on Schedule
4.3 attached hereto, and have been, or will be, obtained and
satisfied prior to the Closing. TJHC is not required to submit
any notice, report, or other filing with or to any
governmental entity in connection with the execution,
delivery, or performance of this Agreement by TJHC, except as
shown in Schedule 4.3.
Section 4.4 Finders. No broker's, finder's, or any similar fee have been
incurred by or on behalf of TJHC in connection with the
origin, negotiation, execution, or performance of this
Agreement or the transactions contemplated hereby for which
Paramark shall have any liability.
Section 4.5 The Purchase Agreement. The representations and warranties of
TJHC in the Purchase Agreement are true and correct as of the
date of this Agreement, and shall survive the termination of
the Purchase Agreement.
Section 4.6 Disclosure. No representation or warranty by TJHC in this
Agreement contains any untrue statement of a material fact or
omits any material fact necessary in order to make the
statements contained in this Agreement not misleading.
ARTICLE 5
REPRESENTATIONS OF ARBY'S
Arby's represents and warrants to Paramark as follows:
Section 5.1 Organization and Authority. Arby's is a corporation duly
organized, validly existing, and in good standing under the
laws of the state Delaware; and has all requisite power and
authority (corporate and other) to own its properties and has
full power to execute and deliver this Agreement and to
consummate the transactions contemplated thereby.
Section 5.2 Authorization; No Conflicts. The execution and delivery of
this Agreement and the performance of Arby's of its
obligations hereunder has been duly and validly authorized by
all requisite corporate action. Without limiting the
generality of the foregoing, the Board of Directors of Arby's
has duly authorized the transactions contemplated by the
Agreement. This Agreement and each of the other agreements
referred to herein, when executed will constitute the valid
and legally binding obligations of Arby's, enforceable against
Arby's in accordance with their respective terms, except that
(i) such enforcement may be subject to applicable bankruptcy,
insolvency, or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding
therefore may be brought. The execution, delivery, and
performance of this Agreement, and the consummation by Arby's
of the transactions contemplated hereby, will not, (a) violate
the provisions of any law, rule, or regulation applicable to
Arby's; (b) conflict with, violate or breach a provision of
Arby's Certificate of Incorporation or Bylaws; (c) conflict
with, violate any judgment, decree, order, or award of any
court, arbitral tribunal, administrative agency or commission,
or other governmental entity or regulatory authority or
agency; or (d) conflict with or result in the breach or
termination of any term or provision of any agreement or
instrument to which Arby's is a party or by which Arby's is or
may be bound.
12
Section 5.3 Regulatory Approvals. All consents, approvals, authorizations,
and other requirements prescribed by any law, rule, or
regulation which must be obtained or satisfied by Arby's,
which are necessary for the execution and delivery of this
Agreement and the other documents to be executed and delivered
by Arby's in connection with this Agreement are set forth on
Schedule 5.3 attached hereto, and have been, or will be,
obtained and satisfied prior to the Closing. Arby's is not
required to submit any notice, report, or other filing with or
to any governmental entity in connection with the execution,
delivery, or performance of this Agreement by Arby's, except
as shown in Schedule 5.3.
Section 5.4 Finders. No broker's, finder's, or any similar fee have been
incurred by or on behalf of Arby's in connection with the
origin, negotiation, execution, or performance of this
Agreement or the transactions contemplated hereby for which
Paramark shall have any liability.
Section 5.5 The Purchase Agreement. The representations and warranties of
Arby's in the Purchase Agreement are true and correct as of
the date of this Agreement, and shall survive the termination
of the Purchase Agreement.
Section 5.6 Disclosure. No representation or warranty by Arby's in this
Agreement contains any untrue statement of a material fact or
omits any material fact necessary in order to make the
statements contained in this Agreement not misleading. Arby's
has disclosed to Paramark all material facts pertaining to the
transactions contemplated by this Agreement.
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ARTICLE 6
COVENANTS OF PARAMARK
Section 6.1 Interim Operations of Paramark. Paramark covenants and agrees
that, except (i) as expressly provided in this Agreement, or
(ii) with the prior written consent of TJHC and Arby's, after
the date of this Agreement and prior to the Closing Date:
(a) the business of Paramark shall be conducted only in the
ordinary course of business consistent with past practice, and
Paramark shall use all reasonable efforts to preserve its
business organization intact and maintain its existing
relations with material customers, distributors, suppliers,
employees, creditors, and business partners;
(b) Paramark shall not modify, amend, or terminate any of the
TJC License Agreements or waive, release, or assign any
material rights or claims, except in the ordinary course of
business consistent with past practice and any existing
agreements;
(c) Paramark will not adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other material
reorganization or any agreement relating to the sale of all or
substantially all of the assets (other than this Agreement);
(d) Paramark will not engage in any transaction with, or enter
into any agreement, arrangement, or understanding with,
directly or indirectly, any of its affiliates, including,
without limitation, any transactions, agreements,
arrangements, or understandings with any affiliate or other
person covered under Item 404 of Regulation S-K under the
Securities Act of 1933 that would be required to be disclosed
under such Item 404, other than such transactions of the same
general nature, scope, and magnitude as are disclosed in
Paramark's documents filed with the Securities and Exchange
Commission ("SEC"), or required under any law, rule, or
regulation governing the offer, sale, or registration of
securities.
Section 6.2 Access to Information. Paramark shall (and shall cause each of
its affiliates to) afford to the officers, employees,
accountants, counsel, financing sources, and other
representatives of TJHC and/or Arby's, reasonable access,
during normal business hours, during the period prior to the
Closing Date, to all of its and its affiliates' properties,
books, contracts, commitments, and records (including any tax
returns or other tax related information pertaining to
Paramark and its affiliates) and, during such period, Paramark
shall (and shall cause each of its affiliates to) furnish
promptly to TJHC and/or Arby's (a) a copy of each report,
schedule, registration statement, and other document filed or
received by it during such period pursuant to the requirements
of the federal securities laws or any insurance regulatory
laws and (b) all other information concerning its business,
properties, and personnel as TJHC and/or Arby's may reasonably
request (including any tax returns or other tax related
information pertaining to Paramark and its affiliates). TJHC
and/or Arby's will hold any such information which is
nonpublic in confidence.
14
Section 6.3 Consents and Approvals. Paramark will take all reasonable
actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to this
Agreement, which actions shall include, without limitation,
furnishing all information in connection with approvals of or
filings with any governmental authority, including, without
limitation, any schedule or reports required to be filed with
the SEC, and will promptly cooperate with and furnish
information to TJHC and Arby's in connection with any such
requirements imposed upon it or any of its affiliates in
connection with this Agreement and the transactions
contemplated hereby. Paramark will, and will cause its
affiliates to, take all reasonable actions necessary to obtain
any consent, authorization, order, or approval of, or any
exemption by, any governmental authority or other public or
private third party, required to be obtained or made by
Paramark, or any of its affiliates in connection with any
action contemplated by this Agreement.
Section 6.4 Additional Agreements. Subject to the terms and conditions
herein provided, Paramark agrees to use its best efforts to
take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable, whether
under applicable laws and regulations or otherwise, or to
remove any injunctions or other impediments or delays, legal
or otherwise, to consummate and make effective the
transactions contemplated by this Agreement. In case at any
time after the Closing Date any further action is necessary or
desirable to carry out the purposes of this Agreement, the
proper officers and directors of Paramark shall use their best
efforts to take, or cause to be taken, all such necessary
actions.
Section 6.5 Notification of Certain Matters. Paramark shall give prompt
notice to TJHC and/or Arby's of (a) the occurrence, or
non-occurrence of any event the occurrence or non-occurrence
of which would cause any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Closing Date and (b) any material
failure of Paramark to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice
pursuant to this Section 6.5 shall not limit or otherwise
affect the remedies available hereunder to the party receiving
such notice.
15
Section 6.6 SEC Filings
(a) As soon as practicable after the date hereof, Paramark
shall prepare and file with the SEC the proxy statement,
notice of shareholders meeting, and such other information and
materials as may be required under the Securities Act of 1933
or the Securities Exchange Act of 1934. Paramark shall prepare
and provide TJHC and Arby's with information concerning
Paramark, this Agreement, and the transactions contemplated
hereby required to be included in the proxy statement. Such
information prepared and provided by Paramark shall comply in
all material respects with all applicable requirements of law.
(b) Paramark shall use its reasonable best efforts to (i)
respond to any comments of the SEC and (ii) cause the proxy
statement to be mailed to the shareholders of Paramark as
promptly as practicable after receiving necessary approvals
from the SEC. Paramark shall notify TJHC and Arby's of the
receipt of any comments from the SEC and of any request by the
SEC for amendments or supplements to the proxy statement or
for additional information, and will supply TJHC and Arby's
with copies of all correspondence between Paramark or any of
its representatives and the SEC, with respect to the proxy
statement. The proxy statement shall comply in all material
respects with all applicable requirements of law. Paramark
shall take any action required to be taken under state blue
sky or securities laws in connection with the transactions
contemplated by this Agreement.
(c) No amendment or supplement to the proxy statement will be
made without the approval of TJHC and Arby's, which approval
will not be unreasonably withheld or delayed.
Section 6.7 Continuation of Business. From the date hereof, through and
after the Closing Date, and for at least three (3) years
following the Closing Date, Paramark shall use commercially
reasonable efforts to (a) preserve substantially its
relationships with suppliers, customers, and employees; (b)
carry on its business in the ordinary course and consistent
with past practice; (c) maintain its corporate existence; and
(d) maintain adequate insurance to cover potential and/or
unknown liabilities and losses that arise prior to Closing,
and potential liabilities and losses that arise as a result of
operations following Closing.
Section 6.8 Shareholder Approval. Xxxxxxx Xxxxxxxxx and Xxxx Xxxxxxxx,
as shareholders of Paramark, shall vote all of the shares of
Paramark owned or controlled by each of them in favor of the
transactions contemplated by this Agreement.
16
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF TJHC AND ARBY'S
The obligations of TJHC and Arby's hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any which may be waived in whole or in part by TJHC or Arby's in their sole
discretion):
Section 7.1 Truth of Representations and Warranties of Paramark;
Compliance with Covenants and Obligations. Each of the
representations and warranties of Paramark in this Agreement
shall be true and correct on and as of the Closing Date as
though such representations and warranties were made on and as
of such date, with the same force and effect as if made on and
as of the Closing Date, except for any changes consented to in
writing by TJHC and Arby's, and except (a) as a result of (x)
the taking by any person of any action contemplated by the
Agreement or (y) events or changes occurring or arising after
the date hereof in the ordinary course of Paramark's business;
or (b) insofar as any representation or warranty relates to
any specified earlier date. Paramark shall have performed and
complied with all terms, conditions, covenants, obligations,
agreements, and restrictions required by this Agreement to be
performed or complied with by Paramark prior to or at the
Closing Date.
Section 7.2 Closing Deliveries. TJHC and Arby's shall have received from
Paramark the documents and other materials specified in
Exhibit D.
Section 7.3 Corporate Proceedings. All corporate and other proceedings
required to be taken on the part of Paramark to authorize or
carry out this Agreement and to transfer, convey, assign, and
deliver the TJC License Agreements and execute and deliver
such other documents as are set out in Schedule 5.2 shall have
been taken.
Section 7.4 Government Approvals. All government agencies, departments,
bureaus, commissions, and similar bodies, the consent,
authorization, or approval of which is necessary under any
applicable law, rule, order, or regulation for the
consummation by Paramark of the transactions contemplated by
the Agreements shall have been received, and the documents
shall be in form and substance reasonably satisfactory to TJHC
and Arby's.
Section 7.5 Third Party Consents. All third party consents necessary under
any contract, agreement, or law for the consummation by
Paramark of the transactions contemplated by this Agreement
shall have been received, and the documents soliciting and
evidencing the consents shall be in form and substance
reasonably satisfactory to TJHC and Arby's.
17
Section 7.6 Bulk Sales Law Compliance. Paramark shall have complied with
the bulk sales law of the State of New Jersey or obtained an
opinion of counsel satisfactory to TJHC and Arby's that the
bulk sales law of the State of New Jersey does not apply to
the transactions contemplated by this Agreement.
Section 7.7 Adverse Proceedings. No action or proceeding by any third
party or any governmental entity shall have been instituted or
threatened which seeks to restrain, prohibit, enjoin, make
illegal, or invalidate the transactions contemplated by this
Agreement or which might affect any right of TJHC and Arby's
with respect to the TJC License Agreements or under this
Agreement.
Section 7.8 Financial Condition. From the date of the Financial Statements
until the Closing, there shall not have been any change or any
event or development which, individually or together with
other such events or developments, could reasonably be
expected to have a material adverse effect on, the condition
(financial or otherwise), results of operations, business, or
assets of, or the sale of TJC Products by, Paramark, or the
prospects of the TJC Licensees.
Section 7.9 Termination of Broker Contracts. Paramark shall have furnished
to TJHC and Arby's copies of notices of termination of
contracts with Brokers that Paramark hereby covenants to
deliver to each Broker identified in Schedule 3.8. Such
notices shall include Paramark's written notice of termination
of its contractual commitments with each such Broker as of the
termination or expiration of the Wholesale License Agreement,
to the extent such contract and commitment relates to the sale
or distribution of TJC Products. The written termination
notices to the Brokers shall be provided at least thirty (30)
days prior to the expiration or expected termination of the
Wholesale License Agreement, or, such longer period of time as
may be required or contemplated under the written or oral
contract with the Broker, such that no contractual commitment
with any such Broker may extend beyond the expiration or
termination of the Wholesale License Agreement.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF PARAMARK
The obligations of Paramark hereunder are subject to the fulfillment,
at or before the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Paramark in its sole discretion):
Section 8.1 Truth of Representations and Warranties of TJHC and Arby's;
Compliance with Covenants and Obligations. The representations
and warranties of TJHC and Arby's in this Agreement shall be
true on and as of the Closing Date as though such
representations and warranties were made on and as of such
date with the same force and effect as if made on and as of
the Closing Date, except (a) as a result of (x) the taking by
any person of any action contemplated by this Agreement, or
(y) events or changes occurring or arising after the date
hereof in the ordinary course of TJHC's or Arby's business; or
(b) insofar as any representation or warranty relates to any
specified earlier date. TJHC and/or Arby's shall have
performed and complied in all respects with all terms,
conditions, obligations, agreements, and restrictions required
by this Agreement to be performed or complied with by TJHC
and/or Arby's prior to or at the Closing Date.
18
Section 8.2 Government Approvals. All government agencies, departments,
bureaus, commissions, and similar bodies, the consent,
authorization, or approval of which is necessary under any
applicable law, rule, order, or regulation for the
consummation by TJHC or Arby's of the transactions
contemplated by the Agreements shall have been received, and
the documents shall be in form and substance reasonably
satisfactory to Paramark.
Section 8.3 Corporate Proceedings. All corporate and other proceedings
required to be taken on the part of TJHC and Arby's to
authorize or carry out this Agreement shall have been taken.
Section 8.4 Adverse Proceedings. No action or proceeding by any third
party shall have been instituted or threatened which seeks to
restrain, prohibit, or invalidate the transactions
contemplated by this Agreement or which might affect the
rights of Paramark to assign the TJC License Agreements.
Section 8.5 Fairness Opinion. Paramark shall have received an opinion,
with respect to the fairness to the shareholders and creditors
of Paramark of the transactions contemplated by this
Agreement. The opinion shall be prepared by a certified public
accountant or investment adviser, and the content of the
opinion shall be satisfactory to TJHC and Arby's prior to and
at the Closing.
ARTICLE 9
INDEMNIFICATION
Section 9.1 Indemnification of TJHC and Paramark for Misrepresentations.
TJHC and Paramark each hereby indemnifies and holds the other
harmless against all claims, damages, losses, liabilities,
costs, and expenses (including, without limitation, settlement
costs and any legal, accounting or other expenses for
investigating or defending any actions or threatened actions)
incurred by TJHC or Paramark in connection with any
misrepresentation, breach of warranty, or non-fulfillment of
or failure to perform any covenant, condition, or agreement
set forth in, or attached to, this Agreement, any transactions
contemplated by this Agreement, or any statement, certificate,
schedule, or document furnished by such Party pursuant to this
Agreement or in connection with the transactions contemplated
hereby.
19
Section 9.2 Indemnification of Arby's and Paramark for Misrepresentations.
Arby's and Paramark each hereby indemnifies and holds the
other harmless against all claims, damages, losses,
liabilities, costs, and expenses (including, without
limitation, settlement costs and any legal, accounting or
other expenses for investigating or defending any actions or
threatened actions) incurred by Arby's or Paramark in
connection with any misrepresentation, breach of warranty, or
non-fulfillment of or failure to perform any covenant,
condition, or agreement set forth in, or attached to, this
Agreement, or any statement, certificate, schedule, or
document furnished by such Party pursuant to this Agreement or
in connection with the transactions contemplated hereby.
Section 9.3 Survival of Representations. All representations and
warranties made by the Parties herein or in any instrument or
document furnished in connection with this Agreement shall
survive the Closing and any investigation at any time made by,
or on behalf of, the Parties to this Agreement. All such
representations and warranties shall expire on the third (3rd)
anniversary of the Closing Date.
Section 9.4 Paramark's Indemnity. Paramark hereby agrees to indemnify and
hold TJHC and Arby's, and their officers, directors,
shareholders, and affiliates (the "TJHC/Arby's Indemnitees")
harmless from any and all claims, damages, losses,
liabilities, costs, and expenses (including, without
limitation, settlement costs and any legal, accounting, or
other expenses for investigating or defending any actions or
threatened actions) incurred by the TJHC/Arby's Indemnitees,
in connection with any claims against the TJHC/Arby's
Indemnitees based upon, relating to, resulting from, or in
connection with actions or failure to act of Paramark or its
officers, directors, shareholders or affiliates.
Section 9.5 TJHC's and Arby's Indemnity. TJHC and Arby's hereby agree to
indemnify and hold Paramark, and its officers, directors,
shareholders, and affiliates (the "Paramark Indemnitees")
harmless from any and all claims, damages, losses,
liabilities, costs, and expenses (including, without
limitation, settlement costs and any legal, accounting, or
other expenses for investigating or defending any actions or
threatened actions) reasonably incurred by the Paramark
Indemnitees, in connection with any claims against the
Paramark Indemnitees based upon actions or failure to act of
TJHC or Arby's.
Section 9.6 Notice for Claims of Indemnification. Whenever any claim shall
arise for indemnification pursuant to this Article 9, the
Party seeking indemnification (the "Indemnified Party"), shall
promptly notify the Party from whom indemnification is sought
(the"Indemnifying Party") of the claim and, when known, the
facts constituting the basis for such claim provided that no
delay on the part of the Indemnified Party in giving such
notice shall relieve the Indemnifying Party of any
indemnification obligation hereunder except to the extent the
Indemnifying Party is materially prejudiced by such delay. In
the event of any such claim for indemnification hereunder
resulting from or in connection with any claim or legal
proceedings by a third-party, the notice to the Indemnifying
Party shall specify, the amount if known, or an estimate of
the amount of the liability arising therefrom. The Indemnified
Party shall not settle or compromise any claim by a third
party for which it is entitled to indemnification without the
prior written consent of the Indemnifying Party, which shall
not be unreasonably withheld, unless suit shall have been
instituted against it and the Indemnifying Party shall not
have taken control of such suit after notification thereof.
20
Section 9.7 Defense by Indemnifying Party. With respect to any claim
giving rise to indemnity resulting from or arising out of any
claim or legal proceeding by a person who is not a party to
this Agreement, the Indemnifying Party, at its sole cost and
expense, may, upon written notice to the Indemnified Party,
assume the defense of any such claim or legal proceeding if it
acknowledges, to the Indemnified Party, in writing, its
obligations to indemnify the Indemnified Party with respect to
all elements of such claim. The Indemnified Party shall be
entitled to participate in (but not control) the defense of
any such action, with its counsel and at its own expense. If
the Indemnifying Party does not assume the defense of any such
claim or litigation resulting therefrom within thirty (30)
days after the date such claim is made, the Indemnified Party
may defend against such claim or litigation, in such manner as
it may deem appropriate, including, but not limited to,
settling such claim or litigation, after giving notice of the
same to the Indemnifying Party, on such terms as the
Indemnified Party may deem appropriate, and the Indemnifying
Party shall be entitled to participate in (but not control)
the defense of such action, with its counsel and at its own
expense. If the Indemnifying Party thereafter seeks to
question the manner in which the Indemnified Party defended
such third party claim or the amount or nature of any such
settlement, the Indemnifying Party shall have the burden to
prove by a preponderance of the evidence that the Indemnified
Party did not defend or settle such third party claim in a
reasonably prudent manner.
Section 9.8 Indemnification Under the Purchase Agreement. The
indemnification of Paramark and TJHC, each to the other,
contained in the Purchase Agreement shall survive the
termination of the Purchase Agreement.
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ARTICLE 10
GENERAL PROVISIONS
Section 10.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement among the Parties;
(b) upon notification to the non-terminating parties by the
terminating party that the satisfaction of any condition to
the terminating party's obligations under this Agreement has
become impossible to satisfy, illegal, or subject to a
non-appealable order enjoining or restraining the Closing; or
(c) at any time after September 30, 1998, by Paramark, TJHC,
or Arby's, upon notification to the non-terminating parties by
the terminating party, if the Closing shall not have occurred
on or before such date and such failure to consummate is not
caused by a breach of this Agreement by the terminating party.
Section 10.2 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 10.1, this Agreement will immediately
become null and void, and there will be no liability or
obligation on the part of Paramark, TJHC, or Arby's (or any of
their respective officers, directors, employees, agents,
representatives, or affiliates) except as provided in the next
succeeding sentence and except that the provisions with
respect to expenses in Section 10.7 will continue to apply
following any such termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination
of this Agreement pursuant to Section 10.1(b), each Party will
remain liable to the other Parties for any breach of this
Agreement by such Party existing at the time of such
termination, and each Party may seek such remedies, including
damages and attorney's fees, against the others, with respect
to any such breach as is provided in this Agreement or as may
otherwise be available at law or in equity.
Section 10.3 Notices. Any notices or other communications required or
permitted by this Agreement shall be sufficiently given if
delivered personally or sent by telex, facsimile, overnight
courier, registered or certified mail postage prepaid,
addressed as follows or to such other address of which the
parties may have given notice:
To Paramark: Paramark Enterprises, Inc.
Attn: Xxxx X. Xxxxxxxx, President
Xxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Fax: (000) 000-0000
With copies to: Xxxx Xxxxxx, Esq.
000-00 Xxxxx Xxxxxxxx
Xxx Xxxxxx Xxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
To TJHC and
Arby's: Triarc Restaurant Group
Attn: Xxxxxxxx X. May, Vice President
0000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
With copies to: Triarc Restaurant Group
Attn: General Counsel
0000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Rudnick, Wolfe, Xxxxxxx & Xxxxxxx
Attn: Xxxx X. Xxxxxx, Esq.
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxx
Xxxxxxxxxx, X.X. 00000
Fax: (000) 000-0000
All notices or other communications shall be deemed received on the date
delivered if delivered personally, by facsimile, by telex, or by overnight
courier, or three (3) business days after being sent, if sent by registered or
certified mail.
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Section 10.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the Parties and their
respective successors and assigns. No assignment shall release
a Party from any obligation or liability under this Agreement.
Section 10.5 Amendments. The Parties, by the consent of their respective
Boards of Directors or officers authorized by such Boards, may
amend or modify this Agreement and the exhibits and schedules
hereto, in such manner as may be agreed upon, by a written
instrument executed by each Party.
Section 10.6 Waivers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent
such occurrence.
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Section 10.7 Expenses. Each of the Parties shall bear its own costs and
expenses (including legal fees and expenses) incurred in
connection with this Agreement.
Section 10.8 Construction. If any of the provisions of this Agreement may
be construed in more than one way, one of which would render
the provision illegal or otherwise voidable or unenforceable,
such provision shall have the meaning which renders it valid
and enforceable. The language of all of the provisions of this
Agreement shall be construed according to its fair meaning and
not strictly construed against any Party.
Section 10.9 Interpretation. This Agreement has been negotiated at arm's
length. In the event of any ambiguity in any of the terms and
provisions, this Agreement shall not be interpreted against or
in favor of any party nor shall there be any presumption
against or in favor of any party, but this Agreement shall be
interpreted in accordance with the intent of the parties and
the function of its terms and provisions.
Section 10.10 Governing Law. Any dispute with respect to the entering into,
performance, or interpretation of this Agreement shall be
governed by the laws of the State of Florida, without regard
to the Florida law of conflicts. The Parties hereby agree that
to the extent any disputes arise that cannot be resolved
directly between the Parties, the Parties shall file any
necessary suit only in the federal or state court having
jurisdiction where Arby's principal office is then located.
The Parties irrevocably submit to the jurisdiction of any such
court and waive any objection they may have to either the
jurisdiction or venue of any such court.
Section 10.11 No Third Party Beneficiaries. Nothing in this Agreement is
intended, nor shall be deemed, to confer upon any person or
entity, other than the Parties and their successors and
assigns, any rights or remedies under or by reason of this
Agreement.
Section 10.12 Waiver of Jury Trial. THE PARTIES IRREVOCABLY WAIVE TRIAL BY
JURY OF ANY ACTION, PROCEEDING, OR COUNTERCLAIM, WHETHER AT
LAW OR IN EQUITY, BROUGHT BY EITHER OF THEM AGAINST THE OTHER
AND WHETHER OR NOT THERE ARE OTHER PARTIES TO SUCH ACTION,
PROCEEDING, OR COUNTERCLAIM.
Section 10.13 Entire Agreement. This Agreement and all schedules and
exhibits hereto, and all agreements and instruments to be
delivered by the Parties pursuant to this Agreement, represent
the entire understanding and agreement between the Parties
with respect to the subject matter hereof and supersede all
prior oral and written and all contemporaneous oral
negotiations, commitments, and understandings between such
Parties.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
Parties as of and on the date first above written.
(Corporate Seal) PARAMARK ENTERPRISES, INC.,
a Delaware corporation
ATTEST:
By: /s/ Paramark Enterprises, Inc.
Name:
Title:
Secretary
(Corporate Seal) TJ HOLDING COMPANY, INC.,
a Delaware corporation
ATTEST:
By: /s/ T.J. Holding Company, Inc.
Name:
Title:
Secretary
(Corporate Seal) ARBY'S, INC., d/b/a TRIARC RESTAURANT GROUP, a
Delaware corporation
ATTEST:
By: /s/ Arby's, Inc.
Name:
Title:
Secretary
with respect to the provisions of Section 6.8:
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Witness
/s/ Xxxx Xxxxxxxx
Xxxx X. Xxxxxxxx
Witness
