Exhibit 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
CADBURY SCHWEPPES PLC,
CSN ACQUISITION INC.,
CRC ACQUISITION INC.,
TRIARC COMPANIES, INC.,
SNAPPLE BEVERAGE GROUP, INC.,
and
ROYAL CROWN COMPANY, INC.
September 15, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND TERMS.....................................
1.1 Specific Definitions......................................
1.2 Terms Defined Elsewhere in the Agreement..................
1.3 Other Definitional Provisions............................
1.4 References to Time.......................................
ARTICLE II THE MERGER.............................. ...............
2.1 The Merger...............................................
2.2 Merger Consideration.....................................
2.3 Closing..................................................
2.4 Effective Time...........................................
2.5 Effects of the Merger....................................
2.6 Certificate of Incorporation and By-Laws.................
2.7 Directors................................................
2.8 Officers.................................................
2.9 Conversion of Capital Stock..............................
2.10 Deliveries by CS.........................................
2.11 Deliveries by Parent and Merging Companies...............
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGING COMPANIES....................................
3.1 Organization and Qualification...........................
3.2 Capitalization; Subsidiaries.............................
3.3 Corporate Authorization..................................
3.4 Consents and Approvals...................................
3.5 Non-Contravention........................................
3.6 Binding Effect...........................................
3.7 Financial Statements; No Undisclosed Liabilities; Absence
of Certain Changes......................................
3.8 Litigation...............................................
3.9 Taxes....................................................
3.10 Employee Benefits........................................
3.11 Compliance with Laws.....................................
3.12 Intellectual Property....................................
3.13 Contracts.............................................
3.14 Brokers...............................................
3.15 Title to Properties...................................
3.16 Environmental Matters.................................
3.17 Labor Relations.......................................
3.18 Business Relationships; Receivables...................
3.19 Corporate Matters.....................................
3.20 Insurance.............................................
3.21 Inventories...........................................
3.22 SEC Documents.........................................
3.23 No Other Representations or Warranties................
3.24 Disclosure Schedule...................................
3.25 Loading...............................................
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF CS..................
4.1 Organization and Qualification........................
4.2 Corporate Authorization...............................
4.3 Consents and Approvals................................
4.4 Non-Contravention.....................................
4.5 Binding Effect........................................
4.6 Brokers...............................................
4.7 Purchase for Investment...............................
4.8 Sufficient Funds......................................
4.9 No Other Representations or Warranties................
ARTICLE V COVENANTS.............................................
5.1 Conduct of Businesses Pending Closing.................
5.2 Access................................................
5.3 Cooperation...........................................
5.4 Antitrust Notification................................
5.5 Supplemental Disclosure...............................
5.6 Further Assurances....................................
5.7 Announcements.........................................
5.8 Preservation of Records...............................
5.9 Related Party Payments................................
5.10 Insurance/Employee Benefits...........................
5.11 Assumption of 2018 Debentures.........................
5.11.1 Delivery of Class A Shares; Character
of Class A Shares....................
5.11.2 Conversion Rate.......................................
5.11.3 Preservation of Conversion Rights.....................
5.11.4 Corporate Existence...................................
5.11.5 Defaults under Parent Indenture.......................
5.11.6 Execution and Delivery of Supplemental
Parent Indenture.....................
5.11.7 Trustee Certificate...................................
5.11.8 Officers' Certificates; Opinion of Counsel to Parent..
5.11.9 Registration Rights...................................
5.11.10 Survival of Covenants...................... ..........
5.11.11 Indemnities...........................................
5.11.12 Actions by CS.........................................
5.12 Assumption of 10-1/4% Notes...........................
5.12.1 Defaults under Indenture..............................
5.12.2 Amendment of Indenture and Related Matters............
5.12.3 Survival of Covenants.................................
5.12.4 Trustee Certificate...................................
5.12.5 Officers' Certificate; Opinion of Counsel
to Parent and CS.....................
5.12.6 Actions by CS.........................................
5.12.7 Indemnities...........................................
5.13 No Solicitation.......................................
5.14 Payments for Options..................................
5.15 Debt Agreements.......................................
5.16 Confidentiality.......................................
5.17 Securities Law Filings................................
ARTICLE VI CONDITIONS TO CLOSING.................................
6.1 Conditions to the Obligations of CS, Merger Subs, Parent
and Merging Companies................................
6.2 Conditions to the Obligations of CS and Merger Subs...
6.3 Conditions to the Obligations of Parent and Merging
Companies........................................
ARTICLE VII SURVIVAL; GENERAL INDEMNIFICATION.....................
7.1 Survival of Representations and Warranties............
7.2 Indemnification by CS and Merger Sub..................
7.3 Indemnification by Parent and Merging Companies.......
7.4 Procedure for Indemnification.........................
7.5 Limits on Indemnification.............................
7.6 Characterization of Indemnification Payments..........
7.7 Computation of Losses; Disputes.......................
ARTICLE VIII TAX MATTERS; TAX INDEMNIFICATION......................
8.1 Tax Indemnities.......................................
8.2 Refunds and Tax Benefits..............................
8.3 Contests..............................................
8.4 Preparation of Tax Returns............................
8.5 Cooperation and Exchange of Information...............
8.6 Conveyance Taxes......................................
8.7 FIRPTA Certificates...................................
8.8 Miscellaneous.........................................
ARTICLE IX TERMINATION...........................................
9.1 Termination...........................................
9.2 Effect of Termination.................................
9.3 Termination Fee.......................................
ARTICLE X NONCOMPETITION........................................
10.1 Noncompetition Period.................................
10.2 Modification of Noncompetition Covenant...............
10.3 Equitable Remedy......................................
ARTICLE XI GENERAL PROVISIONS....................................
11.1 Extension; Waiver.....................................
11.2 Amendment.............................................
11.3 Expenses..............................................
11.4 Governing Law.........................................
11.5 Notices...............................................
11.6 Entire Agreement......................................
11.7 Disclosure Schedule...................................
11.8 Headings; References..................................
11.9 Counterparts..........................................
11.10 Parties in Interest; Assignment.......................
11.11 No Third Party Beneficiaries..........................
11.12 Severability; Enforcement.............................
11.13 Consent to Jurisdiction...............................
EXHIBITS
Exhibit A -- Form of Promissory Note
Exhibit B -- Form of Custody Agreement
Exhibit C -- Form of Indemnity Agreement
Exhibit D -- Form of Registration Rights Agreement
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 15, 2000
(the "AGREEMENT"), by and among CADBURY SCHWEPPES PLC, an English public limited
company ("CS"), CSN ACQUISITION INC., a Delaware corporation and an Affiliate of
CS ("MERGER SUB SB"), CRC ACQUISITION INC., a Delaware corporation and an
Affiliate of CS ("MERGER SUB RC" and, collectively with Merger Sub SB, the
"MERGERS SUBS"), TRIARC COMPANIES, INC., a Delaware corporation ("PARENT"),
SNAPPLE BEVERAGE GROUP, INC., a Delaware corporation ("SBG"), and ROYAL CROWN
COMPANY, INC., a Delaware corporation ("RC" and, together with SBG,
collectively, the "MERGING COMPANIES").
W I T N E S S E T H:
WHEREAS, (i) the respective boards of directors of CS, Merger
Sub SB and SBG have determined that the merger of Merger Sub SB with and into
SBG with SBG surviving as a wholly owned subsidiary of CS (the "SBG MERGER") and
(ii) the respective boards of directors of CS, Merger Sub RC, and RC have
determined that the merger of Merger Sub RC with and into RC with RC surviving
as a wholly owned subsidiary of CS (the "RC MERGER" and, collectively with the
SBG Merger, the "MERGERS"), is advisable and in the best interest of their
respective corporations and stockholders and consequently have approved and
adopted the Mergers (as applicable) and this Agreement.
WHEREAS, immediately prior to the Mergers (i) RC/Arby's
Corporation, a Delaware corporation and the owner of all of the outstanding
shares of capital stock of RC ("RCAC") will merge with and into a newly-formed
Delaware limited liability company ("NEW LLC") wholly owned by Triarc Consumer
Products Group, LLC, a Delaware limited liability company and the owner of 99.9%
of the outstanding shares of capital stock of SBG ("TCPG"), which will be the
surviving corporation in the merger and (ii) New LLC will sell, transfer and
deliver to an Affiliate of Merging Companies (the "MERGING COMPANIES
AFFILIATE"), all of the capital stock of Arby's, Inc., a Delaware corporation
("AI") (all such transactions, the "RESTRUCTURING");
WHEREAS, immediately prior to the Mergers, CS shall have made
or caused to be made a loan or loan(s) to Merging Companies Affiliate and SBG
(the "AFFILIATE LOANS") in an aggregate amount equal to all amounts due and
owing under the Credit Agreement (as defined herein) as of the Closing Date,
which loans shall be evidenced by promissory notes substantially in the form of
Exhibit A hereto, the proceeds of which shall be used by Merging Companies
Affiliate to acquire AI from New LLC. New LLC will use such funds and SBG shall
use any other proceeds from the Affiliate Loans to repay indebtedness of the
Beverage Companies under the Credit Agreement;
WHEREAS, as a condition to the obligations of CS and Merger
Subs to complete the Closing of the Mergers, the Affiliate Loans shall be repaid
concurrent with such Closing; and
WHEREAS, the parties are entering into the Tax Agreement of
even date herewith, pursuant to which certain elections are to be made.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1 SPECIFIC DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings set forth below:
"10-1/4% INDENTURE" shall mean the Indenture, dated as of
February 25, 1999, among TCPG, SBG, the Subsidiary Guarantors (as defined
therein) party thereto and The Bank of New York, as trustee, as amended,
supplemented or otherwise modified from time to time.
"10-1/4% NOTES" shall mean the 10-1/4% Senior Subordinated
Notes due 2009 issued pursuant to the 10-1/4% Indenture.
"2018 DEBENTURES" shall mean the Zero Coupon Convertible
Subordinated Debentures due 2018 issued pursuant to the Parent Indenture.
"AFFILIATE" shall mean, with respect to any specified Person,
any other Person directly or indirectly controlling, controlled by or under
common control with such specified Person.
"AFFILIATE LOANS" shall have the meaning set forth in the
recitals to this Agreement.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
together with all exhibits and schedules hereto, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
"AI" shall have the meaning set forth in the recitals to this
Agreement.
"APPLICABLE LAWS" shall mean, with respect to any Person, all
statutes, laws, ordinances, rules, orders and regulations of any Governmental
Authority applicable to such Person and its business, properties and assets.
"ASSUMED DEBT AMOUNT" shall mean, as of the Closing Date, (i)
the aggregate principal amount of and accrued interest on the 10-1/4% Notes plus
(ii) the accreted value of the 2018 Debentures, as of the Closing Date.
"BEVERAGE COMPANIES" shall mean SBG, RC and all of their
respective direct and indirect Subsidiaries as of the Closing Date.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday
or other day on which banks located in New York City are authorized or required
by law to close.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 eT Seq.).
"CLOSING" shall mean the closing of the transactions
contemplated by this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean any change or
effect that, singly or in the aggregate, is, or is reasonably likely to become,
materially adverse to the business, operations, properties or condition
(financial or otherwise) of the Beverage Companies taken as a whole; PROVIDED,
HOWEVER, that Company Material Adverse Effect shall exclude any change or effect
due to (i) general economic or industry-wide conditions, (ii) any change
resulting from this Agreement or the public announcement thereof or the
transactions contemplated hereby, and (iii) any condition described in the
Disclosure Schedules.
"COMPANY SEC REPORT" shall mean all forms, reports, schedules,
statements and documents (and all amendments, supplements and exhibits thereto)
filed with the United States Securities and Exchange Commission by TCPG or SBG
prior to the date hereof; including, without limitation, the Registration
Statement on Form S-1 (Registration No. 333-40198), as amended by the draft
Amendment No. 1, dated September 8, 2000 (the "DRAFT S-1 AMENDMENT"), and
supplemented on September 13, 2000 relating to the proposed initial public
offering by SBG of shares of its common stock.
"CONFIDENTIALITY AGREEMENT" shall mean the Agreement, dated
February 25, 2000, between CS and Parent.
"CONTRACT" shall mean any written note, bond, mortgage,
indenture, lease, license, franchise, contract, agreement, instrument,
obligation, understanding, arrangement or commitment.
"CS" shall have the meaning set forth in the preamble to this
Agreement.
"CS MATERIAL ADVERSE EFFECT" shall mean any change or effect
that would materially delay or impair the ability of CS or Merger Subs to
consummate the transactions contemplated by this Agreement or perform their
respective obligations hereunder.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"DOJ" shall mean the United States Department of Justice.
"EMPLOYEE BENEFIT PLANS" shall mean all compensation or
benefit plans, policies or arrangements, employment and severance agreements
(including but not limited to those described in Section 3(3) of ERISA), which
are sponsored, maintained or with respect to any multiemployer plan (within the
meaning of Section 3(37) of ERISA), if any, contributed to by Parent, a Merging
Company or a Beverage Company and in which any employee or former employee of a
Beverage Company participates or with respect to which a Beverage Company may
have any liability.
"ENCUMBRANCES" shall mean any and all mortgages, security
interests, liens, claims, pledges, restrictions, leases, title defects, rights
of others, charges or other encumbrances.
"ENVIRONMENT" means all air, surface water, groundwater, or
land, including land surface or subsurface, including all fish, wildlife, biota
and all other natural resources.
"ENVIRONMENTAL CLAIM" means any and all administrative or
judicial actions, suits, orders, written claims, liens, written notices, written
notices of violations, written complaints, written requests for information, or
proceedings, whether criminal or civil, (collectively, "CLAIMS") pursuant to any
applicable Environmental Law or any common law doctrine relating to the
presence, Releases of or exposures to a Hazardous Material by any Person
(including but not limited to any Governmental Authority, private person and
citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the Environment, of any Hazardous Materials at any
location, including but not limited to any off-Site location to which Hazardous
Materials or materials containing Hazardous Materials were sent for handling,
storage, treatment, or disposal.
"ENVIRONMENTAL CLEAN-UP SITE" means any location which is
listed or proposed by any Governmental Authority for listing on the National
Priorities List, the Comprehensive Environmental Response, Compensation and
Liability Information System, or on any similar state list of sites requiring
investigation or cleanup, or which is the subject of any pending or threatened
action, suit, proceeding, or investigation related to or arising from any
alleged violation of any Environmental Law.
"ENVIRONMENTAL LAW" means any and all applicable federal,
state, local, provincial and foreign, civil and criminal laws, statutes,
ordinances, orders, codes, rules, regulations, Environmental Permits, binding
policies, binding guidance documents, judgments, decrees, injunctions, or
agreements with any Governmental Authority, relating to the protection of the
Environment, and/or governing the handling, use, generation, treatment, storage,
transportation, disposal, manufacture, distribution, formulation, packaging,
labeling, or Release of Hazardous Materials, whether now existing or
subsequently amended or enacted, including but not limited to: the Clean Air
Act, 42 U.S.C. ss. 7401 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the
Hazardous Material Transportation Act 49 U.S.C. ss. 1801 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 136 et seq.; the
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss. 6901 et
seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; and the state analogies
thereto, all as amended or superseded from time to time.
"ENVIRONMENTAL PERMIT" means any federal, state, local,
provincial, or foreign permits, licenses, approvals, consents or authorizations
required by any Governmental Authority under or in connection with any
Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, or any successor law and the rules and regulations
promulgated thereunder.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" shall mean any foreign, federal,
state or local government, court, agency or commission or other governmental or
regulatory body or authority.
"HAZARDOUS MATERIAL" means petroleum, petroleum hydrocarbons
or petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous materials," "hazardous wastes,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "pollutants," "regulated substances," "solid wastes," or
"contaminants" or words of similar import, under any Environmental Law.
"INDEMNIFIED PARTY" shall mean any Person which is seeking
indemnification from an Indemnifying Party pursuant to the provisions of this
Agreement.
"INDEMNIFYING PARTY" shall mean any party hereto from which
any Indemnified Party is seeking indemnification pursuant to the provisions of
this Agreement.
"INDEPENDENT ACCOUNTING FIRM" means (a) an independent
certified public accounting firm in the United States of national recognition
mutually acceptable to the Parent and CS or (b) if Parent and CS are unable to
agree upon such a firm, then each party shall select one such firm and those two
firms shall select a third firm, in which event "Independent Accounting Firm"
shall mean such third firm.
"INTELLECTUAL PROPERTY RIGHTS" shall mean any and all United
States, international and foreign (by whatever name or term known or
designated), tangible and intangible, (a) rights associated with works of
authorship, whether or not registered, throughout the universe, including
without limitation, all exclusive exploitation rights, copyrights, neighboring
rights, and moral rights, (b) corporate name, trademark, trade name, trade
dress, product configuration, and any other similar rights, whether or not
registered, (c) patents, designs, algorithms and other industrial property
rights, (d) computer software, data, databases and documentation thereof,
software programs, source codes, object codes, information systems, proprietary
interfaces, routines, modules, procedures, functions, program specifications and
related documentation, and all rights under licenses relating to the use
thereof, (e) trade secrets and other confidential or proprietary information
(including formulas, recipes, know-how, processes, ideas, business methods,
techniques, proposals, technical data, marketing plans, customer data, including
customer lists, customer profiles, user preferences, click-stream data, and
supplier lists and information), (f) electronic addresses and passwords,
including Internet uniform resource locators, Internet domain names, and
registrations and applications for registration thereof, and any other similar
rights, (g) all copies and tangible embodiments of the foregoing in whatever
form or medium, (h) all other proprietary rights of every kind and nature
throughout the universe however designated, now known or hereafter existing,
including without limitation, rights to remuneration whether arising by
operation of law, contract, license or otherwise, and (i) all registrations,
applications, renewals, extensions, continuations, divisions or reissues thereof
now or hereafter in force throughout the universe.
"IRS" shall mean the United States Internal Revenue Service.
"KNOWLEDGE OF PARENT" or any similar phrase means the actual
knowledge of any of those Persons listed on Section 1.1 of the Disclosure
Schedule.
"LEGAL PROCEEDINGS" shall mean any judicial, governmental,
administrative or arbitral actions, suits, proceedings (public or private) or
investigations.
"LONG ISLAND SNAPPLE" shall mean Snapple Distributors of Long
Island, Inc.
"MATERIAL INTELLECTUAL PROPERTY RIGHTS" shall mean those
Intellectual Property Rights which are listed in Section 3.12 of the Disclosure
Schedule.
"MATERIAL THIRD PARTY INTELLECTUAL PROPERTY RIGHTS" shall mean
those Third Party Intellectual Property Rights which are listed in Section 3.12
of the Disclosure Schedule.
"MERGING COMPANIES" shall have the meaning set forth in the
preamble to this Agreement.
"MERGING COMPANIES AFFILIATE" shall have the meaning set forth
in the preamble to this Agreement.
"MILLROSE" shall mean Millrose Distributors, Inc.
"MISTIC" shall mean Mistic Brands, Inc.
"NEW LLC" shall have the meaning set forth in the preamble to
this Agreement.
"PARENT" shall have the meaning set forth in the preamble to
this Agreement.
"PARENT INDENTURE" shall mean the Indenture, dated as of
February 9, 1998, among Parent and The Bank of New York, as trustee, as amended,
supplemented or otherwise modified from time to time.
"PERMITTED LIENS" means (i) mechanics', carriers', workmen's,
repairmen's or other like liens arising or incurred in the ordinary course of
business with respect to liabilities that are not yet due or delinquent, (ii)
liens for Taxes, assessments and other governmental charges which are not due
and payable or which may hereafter be paid without penalty or which are being
contested in good faith by appropriate proceedings and (iii) other imperfections
of title or encumbrances, if any, which imperfections of title or other
encumbrances, individually or in the aggregate, could not be reasonably expected
to materially impair the ability of any of the Beverage Companies to use the
property or asset to which it relates in substantially the same manner as
it was used on the Closing Date.
"PERSON" or "PERSON" shall mean and includes any individual,
partnership, limited liability company, joint venture, corporation, association,
joint stock company, trust, unincorporated organization or similar entity.
"RC" shall have the meaning set forth in the recitals to this
Agreement.
"RCAC" shall have the meaning set forth in the recitals to
this Agreement and shall include any successors in interest thereto.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of a Hazardous Material into the Environment.
"SBC" shall mean Snapple Beverage Corp., a Delaware
corporation.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"SITE" means any of the real properties currently or within
the past three years owned, leased or operated by any of the Beverage Companies
in each case, including all soil, subsoil, surface waters and groundwater
thereat.
"XXXXXXX'X" shall mean Xxxxxxx'x Beverages, Inc.
"SUBSIDIARY" shall mean, with respect to any Person, (i) each
corporation, partnership, limited liability company, joint venture or other
legal entity of which such Person owns, either directly or indirectly, 50% or
more of the stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or similar governing
body of such corporation, partnership, limited liability company, joint venture
or other legal entity and (ii) each partnership or other entity in which such
Person or another Subsidiary of such Person is the general partner or
otherwise controls such partnership or other entity.
"TAX" or "TAXES" shall mean all taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) and shall include any transferee liability in respect of Taxes.
"TAX AGREEMENT" shall mean the agreement of even date herewith
by and among Parent, CS and others pursuant to which certain elections are to be
made.
"TAX RETURNS" shall mean all reports, returns, declaration
forms and statements filed or required to be filed with respect to Taxes.
"TCPG" shall have the meaning set forth in the preamble to
this Agreement.
1.2 TERMS DEFINED ELSEWHERE IN THE AGREEMENT. For purposes of
this Agreement, the following terms have the meanings set forth in the
sections indicated:
TERM SECTION
---- -------
3.7 Balance Sheets................................................... 3.9(b)
Acquisition Proposal................................................. 5.13(c)
Adjustment Event..................................................... 5.11.2(b)
Adjustment Payment Date.............................................. 2.2(c)
Xxxxxx Xxxxxxxx...................................................... 2.2(c)
Asserted Liability .................................................. 7.4(a)
Audited Closing Balance Sheet........................................ 2.2(c)
Casualty Insurance Claims............................................ 5.10(e)
Certificates of Merger............................................... 2.4
Claim Notice......................................................... 7.4(a)
Class A Shares....................................................... 5.11.1
Closing Balance Sheet................................................ 2.2(c)
Closing Balance Sheet Date........................................... 2.2(c)
Closing Date......................................................... 2.3
Contest.............................................................. 8.3(b)
Conversion Rate...................................................... 5.11.2
Conveyance Taxes..................................................... 8.6
Credit Agreement..................................................... 6.1(c)
CS Cap............................................................... 7.5(b)(i)
CS Indemnified Parties............................................... 7.3
CS Required Consent.................................................. 4.3
Custody Agreement.................................................... 5.11.1
Debt Agreements...................................................... 5.15
Determined Differences............................................... 2.2(c)
Differences.......................................................... 2.2(c)
Disagreement Notice.................................................. 2.2(c)
Disclosure Schedule.................................................. 3.24
Effective Time....................................................... 2.4
Employees............................................................ 5.10(a)
Environmental Representation Claim................................... 7.1
ERISA Claim.......................................................... 7.1
Final Adjustment Certificate......................................... 2.2(c)
Final CS Working Capital Adjustment.................................. 2.2(c)
Final Merging Companies' Working Capital Adjustment.................. 2.2(c)
Financial Statements................................................. 3.7(e)
General Claim........................................................ 7.1
HSR Act.............................................................. 3.4
Income Taxes......................................................... 8.1(a)
Indemnified Persons................................................. 5.10(d)(ii)
Initial Allocation................................................... 2.2(a)
Insurance Policies................................................... 5.10(e)
Losses............................................................... 7.2
Material Contracts................................................... 3.13
Merger Consideration................................................. 2.2(a)
Merging Companies Indemnified Parties................................ 7.2
Minimum Required Working Capital..................................... 2.2(c)
Notice Period........................................................ 7.4(a)
Option Payment....................................................... 5.14
Option Plan.......................................................... 3.2
Options.............................................................. 5.14
Other Antitrust Regulations.......................................... 3.4
Parent Cap........................................................... 7.5(a)(i)
Purchase Price....................................................... 2.2(a)
Quaker............................................................... 8.1(b)
Quaker Agreement..................................................... 8.1(b)
RC Common Stock...................................................... 2.2(a)
RC Shares............................................................ 3.2(a)
RC Surviving Corporation............................................. 2.1
Registration Rights Agreement........................................ 5.11.9
Representative....................................................... 5.13(a)
Required Consents.................................................... 3.5
Resolved Objections.................................................. 2.2(c)
Restricted Parties................................................... 10.1(i)
Review Period........................................................ 2.2(c)
SBG Common Stock..................................................... 2.2(a)
SBG Shares........................................................... 3.2
SBG Surviving Corporation............................................ 2.1
Shares............................................................... 3.2(a)
Stock Allocations.................................................... 2.2(a)
Substitute Securities................................................ 5.11.3
Superior Proposal.................................................... 5.13(a)
Supplemental Parent Indenture........................................ 5.11.6
Surviving Corporations............................................... 2.1
Tax Claim............................................................ 7.1
Termination Fee...................................................... 9.3
Third Party Intellectual Property Rights............................. 3.12(b)
Threshold............................................................ 7.5(a)(i)
Triarc Plan.......................................................... 5.10(c)
Working Capital...................................................... 2.2(c)
1.3 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof,"
"herein," and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(b) The terms defined in the singular shall
have a comparable meaning when used in the plural, and vice versa.
(c) The terms "DOLLARS" and "$" shall mean
United States dollars.
(d) As used in this Agreement, accounting
terms
which are specifically defined under GAAP and are not otherwise defined herein
shall have the respective meanings given to them under GAAP.
1.4 REFERENCES TO TIME. All references in this Agreement to
times of the day shall be to New York City time.
ARTICLE II
THE MERGER
2.1 THE MERGER. On the terms and subject to the conditions set
forth herein, at the Effective Time, in accordance with the DGCL, (i) Merger Sub
SB shall be merged with and into SBG and (ii) Merger Sub RC shall be merged with
and into RC, each in accordance with this Agreement, and the separate corporate
existence of each of Merger Sub SB and Merger Sub RC shall cease. SBG shall be
the surviving corporation in the SBG Merger (the "SBG SURVIVING CORPORATION")
and RC shall be the surviving corporation in the RC Merger (the "RC SURVIVING
CORPORATION" and, collectively with the SBG Surviving Corporation, the
"SURVIVING CORPORATIONS") and shall continue to be governed by the laws of the
State of Delaware, and the separate corporate existence of each of SBG and RC
with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Mergers.
2.2 MERGER CONSIDERATION. (a) At the Closing, pursuant to the
Mergers and the terms of this Agreement and subject to adjustment in accordance
with Sections 2.2(c) and 5.14, the holders of common stock, par value $1.00 per
share, of SBG ("SBG COMMON STOCK") and holders of common stock, par value $1.00
per share, of RC ("RC COMMON STOCK") shall receive an aggregate sum (the "MERGER
CONSIDERATION") of (i) $1,325,626,000 less (ii) the Assumed Debt Amount. The
parties hereto acknowledge that the gross purchase price for SBG and RC is
$1,325,626,000 (the "PURCHASE PRICE"), of which $200 million shall be allocated
to the RC Shares and the remainder (after any adjustments, as provided in
Sections 2.2(c) and 5.14, below) shall be allocated to the SBG Shares (the
"INITIAL ALLOCATION"). The amount allocated to the SBG Shares (after such
adjustments, if any) shall be further allocated $25 million to Xxxxxxx'x, $75
million to Mistic and the balance to SBC which shall be further allocated not
less than $21 million to Millrose and $19 million to Long Island Snapple (such
allocations, together with the Initial Allocation, the "STOCK ALLOCATIONS"). At
the Closing, the Merger Consideration shall be payable by CS to the holders of
the SBG Common Stock and the RC Common Stock by wire transfer of immediately
available funds to such bank accounts or bank account specified by Parent in
writing.
(b) Any adjustment to any amount due pursuant
to any provision of this Agreement (including, without limitation, adjustments
pursuant to Section 2.2(c), Section 5.14 and Articles VII and VIII) shall be
treated as adjustments to Purchase Price and initially allocated solely to SBG,
and then further allocated to SBC. The allocations of Purchase Price set forth
in this Section 2.2 shall be used for all purposes, including tax and financial
reporting.
(c) WORKING CAPITAL ADJUSTMENT.
(i) PREPARATION OF FINAL BALANCE SHEET
AND ADJUSTMENT CERTIFICATE. As soon as practicable, but in any event within 45
days after the Closing Date, CS shall prepare or cause to be prepared a
consolidated balance sheet of the Beverage Companies (the "CLOSING BALANCE
SHEET"), in accordance with GAAP consistently applied with the unaudited pro
forma combined balance sheet of the Beverage Companies as of January 2, 2000, as
of the close of business on the last day of Parent's fiscal month in which the
Closing Date occurs (the "CLOSING BALANCE SHEET DATE"), a copy of which shall be
delivered to Parent and Xxxxxx Xxxxxxxx ("XXXXXX XXXXXXXX"). For all purposes
relating to the calculation of the Working Capital Adjustment, from the Closing
Date to the Closing Balance Sheet Date, the business of the Beverage Companies
shall be operated and the treatment of Working Capital components shall each be
in the ordinary course of business consistent with past practice prior to the
Closing Date or, if not, appropriate adjustments shall be made to the actual
results for the purpose of the calculation.
(ii) Within 45 days after receipt thereof,
the Closing Balance Sheet shall be audited by Xxxxxx Xxxxxxxx (the "AUDITED
CLOSING BALANCE SHEET") and such firm shall deliver an audit opinion stating
that the Audited Closing Balance Sheet presents fairly, in all material
respects, the financial position of the Beverage Companies on a consolidated
basis as of the Closing Balance Sheet Date in accordance with GAAP consistently
applied with the unaudited pro forma combined balance sheet of the Beverage
Companies as of January 2, 2000. The Audited Closing Balance Sheet shall be
provided to Parent promptly upon the availability thereof. In addition, CS shall
prepare or cause to be prepared a certificate (the "FINAL ADJUSTMENT
CERTIFICATE") accompanied by a report of Xxxxxx Xxxxxxxx setting forth (i) the
calculations of the amount of Working Capital as of the Closing Balance Sheet
Date on the basis of the Audited Closing Balance Sheet, and (ii) the amounts
payable by Parent to CS and/or by CS to Parent, pursuant to Section 2.2(c)(v).
The Final Adjustment Certificate shall be provided to Parent promptly upon the
availability thereof.
(iii) REVIEW OF AUDITED CLOSING BALANCE
SHEET. Upon receipt of the Audited Closing Balance Sheet and the Final
Adjustment Certificate, Parent (together with its professional advisors) shall
have the right during the succeeding 30-day period (the "REVIEW PERIOD") to
examine the Audited Closing Balance Sheet and the Final Adjustment Certificate,
and all books and records used to prepare the Audited Closing Balance Sheet and
the Final Adjustment Certificate. Xxxxxx Xxxxxxxx shall provide access to the
work papers used to prepare, audit and review the Audited Closing Balance Sheet
and the Final Adjustment Certificate to Parent and its professional advisors. If
Parent objects to all or any part of the Audited Closing Balance Sheet or the
Final Adjustment Certificate, Parent shall so notify CS in writing (each such
notice, a "DISAGREEMENT NOTICE") on or before the last day of the Review Period,
setting forth a description of such party's objection and the amount of the
adjustment which such party believes should be made to each item of its
objection. If no Disagreement Notices are delivered within the Review Period,
the Audited Closing Balance Sheet and the Final Adjustment Certificate shall be
deemed to have been accepted by Parent and CS.
(iv) DISPUTE RESOLUTION.
(A) In the event that any
Disagreement Notice is delivered in accordance with Section 2.2(d)(ii), CS and
Parent shall attempt to resolve the objections set forth therein within 30 days
of receipt of such Disagreement Notice. The objections set forth in the
Disagreement Notice that are resolved by CS and Parent in accordance with this
Section 2.2(c)(iv) shall collectively be referred to herein as the "RESOLVED
OBJECTIONS." The Final Adjustment Certificate shall be adjusted to reflect any
Resolved Objections.
(B) If CS and Parent are unable
to resolve all the objections set forth in any Disagreement Notice within such
thirty (30) day period, the following procedure for dispute resolution shall
apply:
(i) Within 15 days of
the end of such thirty (30) day period, the parties shall jointly appoint the
Independent Accounting Firm to assist in the resolution of the outstanding
objections;
(ii) Upon appointment
of the Independent Accounting Firm, each party shall provide to the Independent
Accounting Firm, and to the other party, a copy of the Disagreement Notice and
any other written submissions or materials such party may wish to make, or
provide, in support of its position;
(iii) Each party may
submit a reply brief in response to the written submissions referred to above.
Such reply brief shall be delivered to the Independent Accounting Firm, and to
the other party, within five (5) Business Days of the date of receipt of the
other party's written submissions;
(iv) The Independent
Accounting Firm shall review the objections set forth in the Disagreement Notice
or Notices that are not Resolved Objections (collectively, the "DIFFERENCES")
and the written submissions, if any, and shall determine, based on the
requirements set forth in this Section 2.2, and only with respect to Differences
submitted, whether and to what extent the Audited Closing Balance Sheet and/or
the Final Adjustment Certificate require adjustment; PROVIDED, HOWEVER, that in
no event shall any determination by the Independent Accounting Firm of any
Difference result in an adjustment greater than the amount of the adjustment
requested with respect to such Difference in the Disagreement Notice or Notices;
(v) The Independent
Accounting Firm shall have the discretion to determine whether to convene a
meeting or meetings of the parties to assist in the resolution of the
Differences;
(vi) CS and Parent
shall each pay 50% of the fees and disbursements of the Independent Accounting
Firm. CS and Parent shall, and CS shall cause the Beverage Companies to, provide
to the Independent Accounting Firm their full cooperation; and
(vii) The Independent
Accounting Firm's resolution of the Differences shall be conclusive and binding
upon the parties. The Differences as resolved by the Independent Accounting
Firm, in accordance with this Section 2.2(c)(iv) shall be referred to herein
collectively as the "DETERMINED DIFFERENCES". The Final Adjustment Certificate
shall be adjusted to reflect any Determined Differences.
(v) CALCULATION OF FINAL MERGER
CONSIDERATION ADJUSTMENTS.
(A) If the amount of Working
Capital set forth in the Final Adjustment Certificate is greater by more than 5%
than the amount of the Minimum Required Working Capital, then Parent shall be
entitled to receive from CS the amount of the excess (above 5%) of the Working
Capital set forth in the Final Adjustment Certificate OVER the Minimum Required
Working Capital (the "FINAL MERGING COMPANIES' WORKING CAPITAL ADJUSTMENT").
(B) If the amount of Working
Capital set forth in the Final Adjustment Certificate is less by more than 5%
than the amount of the Minimum Required Working Capital, then CS shall be
entitled to receive from Parent the amount of the difference between (i) the
Minimum Required Working Capital minus 5% of the Minimum Required Working
Capital and (ii) the Working Capital set forth in the Final Adjustment
Certificate (the "FINAL CS WORKING CAPITAL ADJUSTMENT").
(vi) PAYMENT OF MERGER CONSIDERATION
ADJUSTMENTS. On the third Business Day following the latest to occur of (such
day, the "ADJUSTMENT PAYMENT DATE") (x) the 30th day following receipt of the
Audited Closing Balance Sheet and the Final Adjustment Certificate by Parent,
(y) the resolution by CS and Parent of all objections set forth in the
Disagreement Notice or Notices, if any and (z) the resolution by the Independent
Accounting Firm of all Differences, if any, CS shall pay to Parent the amount,
if any, equal to the Final Merging Companies' Working Capital Adjustment, and
Parent shall pay to CS the amount, if any, equal to the Final CS Working Capital
Adjustment, in either case as set forth in the Final Adjustment Certificate. The
Final CS Working Capital Adjustment and/or the Final Merging Companies' Working
Capital Adjustment shall be payable on the Adjustment Payment Date, with
interest accrued from the Closing Date until, but not including, the Adjustment
Payment Date, at a rate equal to six month LIBOR as appearing under the heading
"Money Rates" in The Wall Street Journal on the Closing Date plus 50 basis
points. Such payment or payments shall be made by wire transfer of immediately
available funds to a bank account or accounts designated by Parent to CS or by
CS to Parent, as the case may be.
"MINIMUM REQUIRED WORKING CAPITAL" shall mean (i) $65 million
for any date of determination prior to October 30, 2000; (ii) $64 million for
any date of determination from and including October 30, 2000 through and
including November 26, 2000; and (iii) $48 million for any date of determination
from and including November 27, 2000 through and including December 31, 2000.
For any date of determination on or after January 1, 2001, the Minimum Required
Working Capital shall be an amount to be mutually agreed in good faith between
CS and Parent.
"WORKING CAPITAL" means, at any date, on a consolidated or
combined basis, as appropriate, all inventory, receivables and prepaid expenses
and other current assets of the Beverage Companies MINUS all accounts payable
(including, without limitation, all amounts payable to Parent under the Supply
Agreement dated as of September 18, 1997, as amended, between Parent and Snapple
Beverage Corp. and Mistic Brands, Inc., Xxxxxxx'x Beverages, Inc. and RC and
accrued expenses (excluding accrued interest and income taxes)).
2.3 CLOSING. The Closing shall take place at the offices of
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
XX 00000 at 9:00 A.M., on the third Business Day following the satisfaction or
waiver (by the party entitled to waive the condition) of all conditions to the
Closing set forth in Article VI, unless another date, time or place is agreed to
by the parties hereto. The date on which the Closing occurs is called the
"CLOSING DATE."
2.4 EFFECTIVE TIME. At the Closing, the Merger Subs, CS and
Merging Companies will cause Certificates of Merger (the "CERTIFICATES OF
MERGER") to be signed, acknowledged and delivered for filing with the Secretary
of State of the State of Delaware as provided in Section 251 of the DGCL. The
Mergers shall become effective at the time when the Certificates of Merger have
been duly filed with the Secretary of State of the State of Delaware or such
other subsequent date or time as shall be agreed upon by the parties and set
forth in the Certificates of Merger and in accordance with the DGCL (the
"EFFECTIVE TIME").
2.5 EFFECTS OF THE MERGER. The Mergers shall have the effects
set forth in the DGCL, including Section 259 of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time (i) all
the properties, rights, privileges, powers and franchises of SBG and Merger Sub
SB shall vest in the SBG Surviving Corporation, and all debts, liabilities and
duties of SBG and Merger Sub SB shall become the debts, liabilities and duties
of the SBG Surviving Corporation and (ii) all the properties, rights,
privileges, powers and franchises of RC and Merger Sub RC shall vest in the RC
Surviving Corporation, and all debts, liabilities and duties of RC and Merger
Sub RC shall become the debts, liabilities and duties of the RC Surviving
Corporation.
2.6 CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) The
Certificate of Incorporation of Merger Sub SB in effect at the Effective Time
shall be the Certificate of Incorporation of the SBG Surviving Corporation,
until amended in accordance with the terms thereof and with applicable law. The
Certificate of Incorporation of Merger Sub RC in effect at the Effective Time
shall be the Certificate of Incorporation of the RC Surviving Corporation, until
amended in accordance with the terms thereof and with applicable law.
(b) The By-Laws of the SBG Surviving Corporation
shall be the By-Laws of Merger Sub SB in effect at the Effective Time, until
amended in accordance with the terms thereof and with applicable law. The
By-Laws of the RC Surviving Corporation shall be the By-Laws of Merger Sub RC in
effect at the Effective Time, until amended in accordance with the terms thereof
and with applicable law.
2.7 DIRECTORS. The directors of Merger Sub SB at the Effective
Time shall be the directors of the SBG Surviving Corporation, each to hold
office from the Effective Time in accordance with the Certificate of
Incorporation and By-Laws of the SBG Surviving Corporation and until his or her
successor is duly elected and qualified. The directors of Merger Sub RC at the
Effective Time shall be the directors of the RC Surviving Corporation, each to
hold office from the Effective Time in accordance with the Certificate of
Incorporation and By-Laws of the RC Surviving Corporation and until his or her
successor is duly elected and qualified.
2.8 OFFICERS. The officers of Merger Sub SB at the Effective
Time shall be the officers of the SBG Surviving Corporation, each to hold office
from the Effective Time in accordance with the Certificate of Incorporation and
By-Laws of the SBG Surviving Corporation and until his or her successor is duly
appointed and qualified. The officers of Merger Sub RC at the Effective Time
shall be the officers of the RC Surviving Corporation, each to hold office from
the Effective Time in accordance with the Certificate of Incorporation and
By-Laws of the RC Surviving Corporation and until his or her successor is duly
appointed and qualified.
2.9 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Mergers and without any action on the part of the holder of any
shares of SBG, RC, Merger Sub SBG or Merger Sub RC:
(a) Each issued and outstanding share of common
stock, par value $.01 per share, of Merger Sub SB shall be converted into and
become one fully paid and nonassessable share of common stock, par value $.01
per share, of the SBG Surviving Corporation. Each issued and outstanding share
of common stock, par value $.01 per share, of Merger Sub RC shall be converted
into and become one fully paid and nonassessable share of common stock, par
value $.01 per share, of the RC Surviving Corporation.
(b) All issued and outstanding shares of SBG
Common Stock that are owned by SBG as treasury stock shall automatically be
canceled and retired and shall cease to exist and no other consideration shall
be delivered in exchange therefor. All issued and outstanding shares of RC
Common Stock that are owned by RC as treasury stock shall automatically be
canceled and retired and shall cease to exist and no other consideration shall
be delivered in exchange therefor.
(c) Each issued and outstanding share of Common
Stock of SBG and RC (other than shares to be canceled in accordance with Section
2.9(b)) shall be converted into the right to receive an amount in cash equal to
the applicable portion of the Merger Consideration payable to the holder
thereof, without interest thereon, in accordance with Section 2.2.
2.10 DELIVERIES BY CS. At the Closing, CS shall deliver or
cause to be delivered to Parent the following:
(a) the Merger Consideration, in immediately
available funds by wire transfer as set forth in Section 2.4 (a) of the
Disclosure Schedule or such other accounts designated in writing by Parent not
less than two (2) Business Days prior to the Closing; and
(b) the certificates and other documents to be
delivered by CS pursuant to Section 6.3.
2.11 DELIVERIES BY PARENT AND MERGING COMPANIES. At the
Closing, Parent and Merging Companies shall deliver to CS the following:
(a) the certificates and other documents to be
delivered pursuant to Section 6.2;
(b) stock certificates or other evidences of
ownership by Merging Companies or another Beverage Company of all of the
ownership interests in each Subsidiary that is a Beverage Company, free and
clear of all Encumbrances, subscriptions, options, warrants, calls, proxies,
rights, commitments, restrictions or agreements of any kind;
(c) copies of the Required Consents;
(d) the payoff letters, releases and termination
statements referred to in Section 6.1(d); and
(e) the FIRPTA Certificates referred to in
Section 8.7.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGING COMPANIES
Parent and Merging Companies hereby jointly and severally
represent and warrant to CS and the Merger Subs as follows:
3.1 ORGANIZATION AND QUALIFICATION. Parent and each Beverage
Company is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite corporate or limited liability company power
and authority to own and operate its assets and properties and to carry on its
business as currently conducted. Parent and each Beverage Company is duly
qualified to do business and is in good standing in each jurisdiction where the
ownership or operation of its assets and properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified or in good standing, as the case may be, would not have a Company
Material Adverse Effect.
3.2 CAPITALIZATION; SUBSIDIARIES. (a) The authorized capital
stock of SBG consists of 2,000,000 shares of SBG Common Stock and 400,000 shares
of preferred stock, par value $1.00 per share (collectively with the shares of
SBG Common Stock, the "SBG SHARES"). The authorized capital stock of RC consists
of 1,000 shares of RC Common Stock (the "RC SHARES" and, collectively with the
SBG Shares, the "SHARES"). The RC Shares owned by RCAC constitute the only
shares of capital stock of RC issued and outstanding and the SBG Shares owned by
TCPG constitute 99.9% of the shares of capital stock of SBG issued and
outstanding (the remaining 0.1% being held by former employees of SBG). All of
the Shares are duly authorized, validly issued, fully paid and nonassessable and
are owned, of record and beneficially, by a Merging Company, free and clear of
all Encumbrances. Section 3.2 of the Disclosure Schedule contains a true and
complete list of the outstanding SBG options. Other than pursuant to the Snapple
Beverage Group, Inc. 1997 Stock Option Plan, as amended (the "OPTION PLAN") as
set forth in Section 3.2 of the Disclosure Schedule, and this Agreement, there
are no outstanding subscriptions, options, warrants, rights, puts, calls,
proxies, commitments, restrictions or other contracts, arrangements or
understandings issued by or binding upon any Beverage Company requiring or
providing for, and there are no outstanding debt or equity securities of any
Beverage Company which upon the conversion, exchange or exercise thereof would
require or provide for the issuance, transfer or sale by any Beverage Company
of any new or additional equity interests in any Beverage Company (or other
securities of any Beverage Company which, with notice, lapse of time or payment
of monies, are or would be convertible into or exercisable or exchangeable
for equity interests of any Beverage Company). The Beverage Companies contain
all of the material beverage business and operations of Merging Companies
and Parent. There are no memorabilia of or related to the beverage business of
any significant intrinsic value in the control or possession of Parent or
any of its Affiliates or Subsidiaries (other than the Beverage Companies)
which have not been or will not be delivered to and owned by the Beverage
Companies at or promptly following the Closing other than memorabilia personally
owned by individuals.
(b) Section 3.2(b) of the Disclosure Schedule
sets forth the name of each Beverage Company that is, or at the Closing will be,
a Subsidiary of SBG or RC and, with respect to each such Beverage Company (i)
the jurisdiction in which it is incorporated or organized, (ii) the number and
class of all outstanding equity interests of such Beverage Company and (iii) the
identity, as of the Closing Date, of each holder of such equity interests. All
of the issued and outstanding shares of capital stock or equity interests of
each such Beverage Company are, or will be as of the Closing Date, owned either
directly or indirectly by SBG or RC and are duly authorized, validly issued,
fully paid and nonassessable and, as of the Closing Date, will be owned free and
clear of all Encumbrances, subscriptions, options, warrants, rights, puts,
calls, proxies, commitments, restrictions or other contracts, arrangements or
understandings.
3.3 CORPORATE AUTHORIZATION. Parent and each Merging Company
has the requisite corporate or limited liability company power and authority to
execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance by Parent and each Merging Company of this
Agreement and the consummation by Parent and such Merging Company of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or limited liability company action on the part of Parent
and such Merging Company. No approval of the shareholders of Parent is necessary
to authorize this Agreement or the transactions contemplated hereby. Parent and
Merging Companies have heretofore made available to CS true, correct and
complete copies of the certificate of incorporation and bylaws or similar
organizational documents of Parent, each Merging Company and each Beverage
Company.
3.4 CONSENTS AND APPROVALS. Except as set forth in Section 3.4
of the Disclosure Schedule, no consent, approval or authorization of, or
registration, declaration or filing with, any Governmental Authority is required
by Parent, Merging Companies or any Beverage Company in connection with the
execution, delivery and performance by Parent and Merging Companies of this
Agreement and the consummation by Parent and Merging Companies of the
transactions contemplated by this Agreement, except (i) for the filing of a
premerger notification and report form by Merging Companies under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended ("HSR ACT"),
(ii) as may be required under any local, state or foreign antitrust statute,
law, regulation or rule applicable to CS, Parent, Merging Companies or any
Beverage Company ("OTHER ANTITRUST REGULATIONS"), (iii) as may be required under
any environmental, health, employment or safety law or regulation pertaining to
any notification, disclosure or required approval triggered by the transactions
contemplated by this Agreement, (iv) as may be required under the laws of any
foreign jurisdiction in which any Beverage Company or CS conducts business or
owns assets and (v) for such other consents, approvals, orders, authorizations,
registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, (x) have a Company Material
Adverse Effect or (y) materially impair or delay the ability of Parent or
Merging Companies to perform their obligations under this Agreement or
consummate the transactions contemplated by this Agreement.
3.5 NON-CONTRAVENTION. Except as set forth in Section 3.5 of
the Disclosure Schedule, the execution, delivery and performance by Parent and
Merging Companies of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Certificate of Incorporation or the By-laws (or similar organization documents)
of Parent, any Merging Company or any Beverage Company, (ii) subject to
obtaining the consents and approvals and providing the notifications referred to
in Section 3.5 of the Disclosure Schedule (the "REQUIRED CONSENTS"), conflict
with, or result in the breach of, or constitute a default under, or result in
the termination, cancellation or acceleration (whether after the filing of
notice or the lapse of time or both) of any right or obligation of Parent or any
of the Beverage Companies under, any Contract of Parent or any of the Beverage
Companies, or (iii) subject to the exceptions set forth in Section 3.4, violate,
or result in a breach of or constitute a default under any Applicable Law or
judgment, decree or order of any Governmental Authority to which Parent, Merging
Companies or any Beverage Company or their respective assets and properties is
subject, other than, in the cases of clauses (ii) and (iii), any conflict,
breach, termination, default, cancellation, acceleration, loss or violation
that, individually or in the aggregate, would not (x) have a Company Material
Adverse Effect or (y) materially impair or delay the ability of Parent or
Merging Companies to perform their obligations under this Agreement or
consummate the transactions contemplated by this Agreement.
3.6 BINDING EFFECT. This Agreement constitutes a valid and
legally binding obligation of Parent and Merging Companies, enforceable against
them in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
3.7 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES; ABSENCE
OF CERTAIN CHANGES. (a) The consolidated balance sheet of SBG and its
Subsidiaries as at January 2, 2000 and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the fiscal year
then ended, reported on by Deloitte & Touche, LLP, copies of which have been
made available by Parent to CS, present fairly in all material respects the
financial position of SBG and its Subsidiaries as at such date, and the results
of their operations and their cash flows for the fiscal year then ended.
(b) The unaudited consolidated balance sheet of
SBG and its Subsidiaries as at July 2, 2000 and the related unaudited
consolidated statements of operations and cash flows for the six-month period
ended on such date, copies of which have been made available by Parent to CS,
present fairly in all material respects the financial position of SBG and its
Subsidiaries as at such date, and the results of their operations and their cash
flows for the six-month period then ended (subject to normal, recurring year-end
adjustments).
(c) All such financial statements referred to in
paragraphs (a) and (b) above, including the related schedules, if any, and notes
thereto, have been prepared in accordance with GAAP (except for the absence of a
statement of stockholders' equity (deficit) and notes to financial statements of
SBG and its Subsidiaries as at July 2, 2000, and as disclosed in the Quarterly
Report of SBG on Form 10-Q for the period ended July 2, 2000) applied
consistently throughout the periods involved.
(d) Parent has delivered to CS a consolidated
balance sheet of RC and its Subsidiaries (including all Subsidiaries of RC as of
the Closing Date) as of January 2, 2000 and July 2, 2000 and consolidated
statements of operations and cash flows for RC and its Subsidiaries (including
all Subsidiaries of RC as of the Closing Date) for the year ended January 2,
2000 and the six months ended July 2, 2000. Except as set forth on Section
3.7(d) of the Disclosure Schedule, such financial statements have been
prepared in accordance with GAAP consistently applied and present fairly in
all material respects the financial position of RC and its Subsidiaries
(including all Subsidiaries of RC as of the Closing Date) as at such dates,
and such consolidated statements of operations and cash flows present
fairly in all material respects the results of their operations and
their cash flows for the fiscal periods then ended, except for the omission of a
statement of stockholders' equity (deficit) and notes to financial statements
and subject, in the case of interim financial statements, to normal, recurring
year-end adjustments and reporting reclassifications.
(e) Except (i) as set forth in the financial
statements referred to in Section 3.7(a), (b) and (d) (collectively, the
"FINANCIAL STATEMENTS") or in the Notes thereto, (ii) as set forth in Section
3.7(e) of the Disclosure Schedule, and (iii) for liabilities and obligations
incurred in the ordinary course of business as of the date hereof, the Beverage
Companies do not have any indebtedness, obligations or liabilities of any kind
(whether accrued, absolute, contingent or otherwise) that, individually or in
the aggregate, would have a Company Material Adverse Effect.
(f) Since January 2, 2000, except (i) for the
execution and delivery of this Agreement and (ii) as set forth in Section 3.7(f)
of the Disclosure Schedule, (a) SBG, RC and their respective Subsidiaries
(including all Subsidiaries of RC as of the Closing Date) have in all material
respects conducted their businesses only in the ordinary course and in a manner
consistent with past practice, (b) there has not been any Company Material
Adverse Effect and (c) there has not been (i) any declaration, setting aside or
payment of any dividend of other distribution with respect to any capital stock
of any Beverage Company, (ii) any split, combination or reclassification of any
of the capital stock of any Beverage Company or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for any shares of the capital stock of any Beverage Company,
(iii) any granting by any Beverage Company to any director or executive officer
of any Beverage Company of any material increase in compensation, other than in
the ordinary course and in a manner consistent with past practice, (iv) any
granting by any Beverage Company to any director or executive officer of any
increase in severance or termination pay, other than in the ordinary course and
in a manner consistent with past practice, (v) any entry by any Beverage Company
into any employment, severance or termination agreement with any director or
executive officer of any Beverage Company, or (vi) except insofar as may be
required by a change in GAAP, any change in Tax or accounting methods,
principles or practices by any Beverage Company.
(g) The unaudited pro forma combined balance
sheet of the Beverage Companies as of January 2, 2000 and the related unaudited
pro forma combined statement of operations for the fiscal year then ended,
copies of which have been made available to CS, include the consolidated
financial statements of SBG and RC (and all of their respective Subsidiaries as
of the Closing Date) and present fairly, in all material respects, the financial
position of SBG and RC as at such date and the results of each of their
operations for the fiscal year then ended and have been prepared in accordance
with GAAP, consistently applied, except for the absence of statements of changes
in stockholders' equity (deficit) and cash flows and notes to financial
statements. Such financial statements were derived from the internal financial
statement consolidations of TCPG and Subsidiaries as presented in the SBG Form
S-1 Registration Statement referred to in the definition "Company SEC Report".
Such unaudited pro forma combined financial statements present fairly the
information purported to be set forth therein.
(h) The unaudited pro forma combined balance
sheet of the Beverage Companies as of July 2, 2000 and the related unaudited pro
forma combined statement of operations for the six-month period then ended,
copies of which have been made available to CS, include the consolidated
financial statements of SBG and RC (and all of their respective Subsidiaries as
of the Closing Date) and present fairly, in all material respects, the financial
position of SBG and RC as at such date and the results of each of their
operations for the fiscal period then ended and have been prepared in accordance
with GAAP, consistently applied, except for the absence of statements of changes
in stockholders' equity (deficit) and cash flows and notes to financial
statements and subject to normal recurring year-end adjustments. Such financial
statements were derived from the internal financial statement consolidations of
TCPG and Subsidiaries as presented in the SBG Form S-1 Registration Statement
referred to in the definition "Company SEC Report". Such unaudited pro forma
combined financial statements present fairly the information purported to be set
forth therein.
3.8 LITIGATION. Except as set forth in any Company SEC Report
or Section 3.8 of the Disclosure Schedule, as of the date hereof, there are no
Legal Proceedings pending or, to the Knowledge of Parent, threatened, against
Parent or any Beverage Company that, individually or in the aggregate, would (i)
have a Company Material Adverse Effect, or (ii) materially impair or delay the
ability of Parent or Merging Companies to perform their obligations under this
Agreement or consummate the transactions contemplated by this Agreement.
3.9 TAXES. Except as set forth in Section 3.9 of the
Disclosure Schedule:
(a) all Tax Returns that are required to be
filed (taking into account applicable extensions) by the Beverage Companies or
by any consolidated, combined, unitary, aggregate or other similar group for Tax
purposes of which any of the Beverage Companies is or has been a member, have
been duly and timely filed and each such Tax Return is complete and correct,
except for Tax Returns as to which the failure to so file or be complete and
correct would not, individually or in the aggregate, have a Company Material
Adverse Effect;
(b) all Taxes shown to be due on the Tax Returns
referred to in clause (a) have been paid or recorded as reserves or current
liabilities on the balance sheets described in Section 3.7(b) and (d) (the "3.7
BALANCE SHEETS");
(c) no adjustments or deficiencies relating to
the Tax Returns referred to in clause (a) have been proposed, asserted or
assessed (in each case, in writing) by the Internal Revenue Service or the
appropriate state, local or foreign taxing authority, except for such
adjustments that would not, individually or in the aggregate, have a Company
Material Adverse Effect;
(d) there are no pending or, to the Knowledge
of Parent, threatened, written claims, actions or proceedings for the assessment
or collection of Taxes against any Beverage Company, except for such actions or
proceedings that would not, individually or in the aggregate, have a Company
Material Adverse Effect. There are no currently outstanding written claims for
Taxes in a jurisdiction where a Beverage Company does not file Tax Returns to
the effect that such company is or may be subject to Tax in that jurisdiction,
except for such claims that would not, individually or in the aggregate, have a
Company Material Adverse Effect;
(e) there are no outstanding waivers or
agreements extending the applicable statute of limitations for any period with
respect to any Taxes of any Beverage Company, except for such waivers or
agreements that, when taken together with all other such waivers and agreements
that are outstanding, would not, individually or in the aggregate, have a
Company Material Adverse Effect;
(f) to the Knowledge of Parent, no taxing
authorities are presently conducting any audits or other examinations of any Tax
Returns referred to in clause (a), except for such audits or examinations that
would not, individually or in the aggregate, have a Company Material Adverse
Effect;
(g) all Taxes required to have been withheld,
collected or deposited by the Beverage Companies have been timely withheld,
collected or deposited and have been paid to the relevant governmental or taxing
authorities, except for such failures which would not, individually or in the
aggregate, have a Company Material Adverse Effect;
(h) there are no Encumbrances for, or in respect
of, Taxes on any of the assets of the Beverage Companies, other than statutory
liens for current Taxes which are not yet due or payable except for any such
Encumbrances which would not, individually or in the aggregate, have a Company
Material Adverse Effect;
(i) except as recorded as reserves or
intercompany accounts, the Beverage Companies do not, in the aggregate, owe any
amount pursuant to any written or unwritten Tax sharing, group, or indemnity
agreement or arrangement, and will have no liability after the date hereof for
any amounts due under or in respect of any written or unwritten Tax sharing,
group or indemnity agreement or arrangement and will not otherwise have
liability for Taxes of any other Person (whether as transferee, successor, by
contract or otherwise);
(j) none of the Beverage Companies has, with
regard to any assets or property held or acquired by any of them, filed a
consent to the application of Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by any such
Beverage Companies;
(k) no Beverage Company has received any
written ruling of a Tax authority related to Taxes with respect to a Beverage
Company or entered into any written and legally binding agreement with a Tax
authority relating to Taxes with respect to a Beverage Company, except for
any such rulings or agreements as would not, individually or in the aggregate,
have a Company Material Adverse Effect;
(l) Parent has made available to CS complete
and correct copies of the Tax Returns set forth on Section 3.9(l) of the
Disclosure Schedule; and
(m) none of the Beverage Companies is required
to make any adjustment under Section 481 of the Code or any comparable provision
of state or local law by reason of a change in accounting except for any such
requirement as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
3.10 EMPLOYEE BENEFITS. Section 3.10 of the Disclosure
Schedule lists all material Employee Benefit Plans. Except as set forth on
Section 3.10 of the Disclosure Schedule as to any employees or former employees
of the Beverage Companies and except with respect to any multiemployer plan
within the meaning of Section 3(37) of ERISA, each Employee Benefit Plan has
been maintained and operated in material compliance with its terms and all
applicable laws, and each Employee Benefit Plan intended to qualify under
section 401(a) of the Code has been determined by the IRS to so qualify, and to
the Knowledge of Parent, no event or circumstances have occurred since the date
of such determination which would cause any such Benefit Plan to cease to so
qualify. Except as set forth in Section 3.10 of the Disclosure Schedule, no
Benefit Plan (i) is a "defined benefit plan" within the meaning of section 3(35)
of ERISA, (ii) is described in Section 401(a)(1) of Title I of ERISA, or (iii)
provides or provided post-retirement health or death benefit coverage to any
employee or former employee of the Beverage Companies (other than as required
under Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code).
Except as set forth in Section 3.10 of the Disclosure Schedule, no Beverage
Company has any outstanding material liability (either directly, secondarily,
jointly or contingently) under Title IV of ERISA or sections 4971 through 4980E
of the Code or under section 502(i) or (l) of ERISA. There are no circumstances
pursuant to which the Beverage Companies, CS or any of its Affiliates could have
any liability following the Closing arising in connection with any Employee
Benefit Plan or program sponsored, maintained or contributed to by Parent or its
Affiliates, other than an Employee Benefit Plan sponsored, maintained or
contributed to solely by the Beverage Companies. Except as set forth in Section
3.10 of the Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement, either alone or in conjunction with any other
event, will not (i) result in a violation of ERISA, or (ii) except as set forth
in Section 3.10 of the Disclosure Schedule or as provided in Section 5.10 or
5.13, trigger any payment or benefit under any Benefit Plan to any employee or
former employee of the Beverage Companies, or accelerate the timing thereof.
3.11 COMPLIANCE WITH LAWS. Except as set forth in Section 3.11
of the Disclosure Schedule, each of the Beverage Companies is in compliance with
all Applicable Laws, except where the failure to so comply, individually or in
the aggregate, would not have a Company Material Adverse Effect and the Beverage
Companies (i) have all permits, licenses, certificates of authority, orders and
approvals of, and have made all filings, applications and registrations with,
Governmental Authorities that are required in order for the Beverage Companies
to conduct their business as presently conducted and (ii) there has occurred no
violation of, default (with or without notice or lapse of time or both) under,
or event giving to others any right of termination, amendment or
cancellation of, with or without notice or lapse of time or both, any such
permits, licenses, certificates, orders, approvals, filings, applications
and registrations, except for any permits, licenses, certificates, orders,
approvals, filings, applications and registrations the failure to have or
make, or with respect to which a violation, default, termination,
amendment or cancellation would not, individually or in the aggregate,
have a Company Material Adverse Effect; it being understood that nothing in
this representation is intended to address any matters which are the
subject of the representation or warranty set forth in Section 3.16. No
suspensions or cancellations of any of the permits, licenses, certificates,
orders, approvals, filings, applications or registrations is pending or, to the
Knowledge of Parent, threatened, except for such suspensions or cancellations
which would not, individually or in the aggregate, have a Company Material
Adverse Effect.
3.12 INTELLECTUAL PROPERTY. Except as set forth in
Section 3.12 of the Disclosure Schedule:
(a) The Beverage Companies have good and
valid title to, or possess valid and subsisting licenses or other rights to
use, and to continue using all of the Intellectual Property Rights necessary
to conduct the business of the Beverage Companies as presently conducted, and
as proposed to be conducted, except those the lack of which would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Except as set forth in Section 3.12 of the Disclosure Schedule, the Material
Intellectual Property Rights are free and clear of all Encumbrances.
(b) No Beverage Company is, or will be as a
result of, the execution and delivery of this Agreement or the performance of
its obligations hereunder, in violation of any Contract as to which Merging
Companies or any of the Beverage Companies is a party and pursuant to which any
of the Beverage Companies is authorized to use any Intellectual Property Rights
of a third party which are incorporated in, are, or form a part of, any of the
Beverage Companies' products or which are necessary to conduct the business of
the Beverage Companies (collectively, the "THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS"), except as would not, individually or in the aggregate, have a Company
Material Adverse Effect. The Beverage Companies have entered into, or at the
Closing will be parties to, all necessary agreements and obtained all necessary
rights to acquire or utilize the Third Party Intellectual Property Rights,
except those which the failure to obtain would not, individually or in the
aggregate, have a Company Material Adverse Effect. At the Closing Date, all
agreements relating to Third Party Intellectual Property Rights will be in full
force and effect and will constitute valid, binding and enforceable obligations
by or against the Beverage Companies and, to the Knowledge of Merging
Companies, no event has occurred which constitutes or, with the giving of notice
or passage of time, or both, would constitute, a default or breach thereunder,
except as would not, individually or in the aggregate, have a Company Material
Adverse Effect.
(c) The Beverage Companies have not received
any written notice of any defect with respect to the ownership or validity of
the Material Intellectual Property Rights or the Material Third Party
Intellectual Property Rights relating to the business of the Beverage Companies.
The Beverage Companies have not received any written notice of any defect with
respect to the ownership or validity of the Intellectual Property Rights
other than the Material Intellectual Property Rights or the Material Third
Party Intellectual Property Rights, which individually or in the aggregate,
would have a Company Material Adverse Effect.
(d) The Beverage Companies have not received any
written notice of any conflict by or against any of the Beverage Companies with
respect to the Material Intellectual Property Rights or the Material Third Party
Intellectual Property Rights. The Beverage Companies have not received any
written notice of any conflict by or against any of the Beverage Companies with
respect to the Intellectual Property Rights other than the Material Intellectual
Property Rights or the Material Third Party Intellectual Property Rights, which
individually, or in the aggregate, would have a Company Material Adverse Effect.
(e) Since January 2, 2000, the acquisition,
protection and maintenance of Intellectual Property Rights necessary to conduct
the business of the Beverage Companies as presently conducted and as proposed to
be conducted, has been conducted in the ordinary course consistent with past
practice and, without limiting the generality of the foregoing, there has not
been any change in the historical practices, policies and procedures with
respect to the Intellectual Property Rights necessary to conduct the business of
the Beverage Companies as presently conducted and as proposed to be conducted,
or any sale, assignment, transfer, loss or grant of any rights under or with
respect to any Intellectual Property Rights or the Third Party Intellectual
Property Rights necessary to conduct the business of the Beverage Companies as
presently conducted and as proposed to be conducted, except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(f) To the Knowledge of Parent, no Person is
engaging in any activity that infringes upon the Intellectual Property Rights
or the Third Party Intellectual Property Rights, except as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Except as would not, individually or in the aggregate, have a Company Material
Adverse Effect, the consummation of the transactions contemplated by this
Agreement will not result in the termination, breach or impairment of any of the
Beverage Companies' Intellectual Property Rights or the Third Party Intellectual
Property Rights.
(g) To the Knowledge of Parent, with respect to
any Intellectual Property Rights of the Beverage Companies filed with or
recorded by any Governmental Authority (including patent, trademark, copyright
and other licenses, registrations and applications), all of such licenses,
registrations and applications are valid and in full force and effect and all
necessary registration, maintenance and renewal fees in connection therewith
have been paid and all necessary documents and certificates in connection
therewith have been filed with the relevant patent, copyright, trademark or
other authority in the United States or foreign jurisdictions, as the case may
be, for the purpose of maintaining the licenses, registrations or applications
for registration of the Intellectual Property Rights of the Beverage Companies,
except where the failure to be valid and in full force and effect or to make
such payment or filing either individually or in the aggregate for all such
failures, would not have a Company Material Adverse Effect.
(h) To the Knowledge of Parent, no product,
service, publication, advertising, marketing or promotional materials of the
Beverage Companies includes any defamatory statements or material that violates
any publicity or privacy rights of any Person which, individually or in the
aggregate, would have a Company Material Adverse Effect.
(i) To the Knowledge of Parent, the Beverage
Companies, as appropriate, have not failed to take reasonable security measures
to protect and preserve the confidentiality and value of their proprietary
information and trade secrets, including without limitation, any recipes,
formulae, technical data and processes used to manufacture the products of the
Beverage Companies, to a degree which, individually or in the aggregate, would
have a Company Material Adverse Effect.
(j) To the Knowledge of Parent, the Beverage
Companies' Intellectual Property Rights and the Beverage Companies' Third Party
Intellectual Property Rights do not infringe upon the Intellectual Property
Rights of any Person to a degree which, in the aggregate, would have a Company
Material Adverse Effect.
(k) Except as set forth on Section 3.12(k) of
the Disclosure Schedule, to the Knowledge of Parent, the Beverage Companies
have not (i) received any notice that any of the Beverage Companies has been
sued or charged in writing as a defendant in any claim, suit, or proceeding
which involves the Beverage Companies' or Merging Companies' Intellectual
Property Rights or the Beverage Companies' Third Party Intellectual Property
Rights, and (ii) received any written claim of infringement, suit, action or
proceeding involving a claim of infringement by the Beverage Companies of the
Intellectual Property Rights or the Third Party Intellectual Property Rights
of any other Person to a degree which, in the aggregate, would have a Company
Material Adverse Effect.
3.13 CONTRACTS. Section 3.13 of the Disclosure Schedule sets
forth the Contracts pertaining to the business of the Beverage Companies, in the
categories set forth in Section 3.13 of the Disclosure Schedule, which are
material to the business of the Beverage Companies taken as a whole
(collectively, "MATERIAL CONTRACTS"). Except as set forth in Section 3.13 of the
Disclosure Schedule, each Material Contract is a valid and binding agreement of
the Beverage Company which is a party thereto and is enforceable against the
Beverage Company party thereto, as the case may be, in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws relating to or
affecting creditors' rights and the exercise of judicial discretion in
accordance with general principles of equity, and, to the Knowledge of Parent,
is in full force and effect. Except as set forth in Section 3.13 of the
Disclosure Schedule, to the Knowledge of Parent there are no defaults under any
Material Contract set forth in Section 3.13 of the Disclosure Schedule which
have not been cured or waived and which, individually or in the aggregate, would
have a Company Material Adverse Effect.
3.14 BROKERS. Except for Xxxxxx Xxxxxxx Xxxx Xxxxxx and ING
Barrings LLC or an Affiliate thereof, each of whose fees will be paid by Parent,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Parent or the Beverage
Companies who might be entitled to any fee or commission from Merging Companies
or the Beverage Companies in connection with the transactions contemplated by
this Agreement.
3.15 TITLE TO PROPERTIES. Section 3.15 of the Disclosure
Schedule contains a true and complete list of all real property owned by the
Beverage Companies. Each of the Beverage Companies has good and valid title to
all of the material tangible assets and properties which it owns, and such
tangible assets and properties are owned free and clear of all Encumbrances,
except for (a) Encumbrances listed in Section 3.15 of the Disclosure Schedule,
(b) liens for current Taxes not yet due and payable or for Taxes the validity
of which is being contested in good faith, (c) Encumbrances to secure
indebtedness reflected on the Financial Statements or indebtedness
incurred in the ordinary course of business consistent with past practice, (d)
mechanic's liens, materialmen's liens and other Encumbrances which have arisen
in the ordinary course of business and (e) Encumbrances which, in the aggregate,
would not have a Company Material Adverse Effect. All leases under which any
Beverage Company leases any material real or personal property (i) are valid and
binding obligations of the Beverage Company party thereto and (ii) to the
Knowledge of Parent, except as set forth on Section 3.15 of the Disclosure
Schedule, there is not, under any of such leases, any existing default or event
which with notice or lapse of time or both would become a default by any
Beverage Company or, any other party thereto, which, in each of clauses (i) or
(ii), could reasonably be expected to, individually or in the aggregate, have a
Company Material Adverse Effect. There are no pending or, to the Knowledge of
Parent, threatened condemnation proceedings against or affecting any material
asset of any Beverage Company.
3.16 ENVIRONMENTAL MATTERS. Except as set forth in Section
3.16 of the Disclosure Schedule or as would not, individually or in the
aggregate, have a Company Material Adverse Effect:
(a) Each of the Beverage Companies has
obtained and holds all necessary Environmental Permits.
(b) Each of the Beverage Companies is in
compliance with all terms, conditions and provisions of all applicable (i)
Environmental Permits, (ii) Environmental Laws and (iii) common law relating to
environmental issues.
(c) There are no pending or threatened
Environmental Claims against any of the Beverage Companies or Merging Companies
in connection with any of the Beverage Companies.
(d) To the Knowledge of Parent, no Releases of
Hazardous Materials have occurred at, on or under any Site and no Hazardous
Materials are present in or on any Site that are reasonably likely to give rise
to an Environmental Claim against any of the Beverage Companies.
(e) No Site is a current or proposed
Environmental Clean-up Site.
(f) There are no Encumbrances (other than
Permitted Liens) arising under or pursuant to any Environmental Law on any Site.
(g) None of the Beverage Companies has
expressly assumed or undertaken, or expressly agreed to assume or undertake,
responsibility for any liability or obligation of any other Person, arising
under or relating to Environmental Laws, including but not limited to, any
obligation for investigation, corrective or remedial action.
(h) None of the Beverage Companies has
transported or arranged for the treatment, storage, handling, disposal, or
transportation of any Hazardous Material to any off-Site location which could
reasonably be expected to result in an Environmental Claim against any of the
Beverage Companies.
(i) There have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by,
on behalf of, or which are in the possession of Parent, during the past five
years, with respect to any Site which have not been delivered to CS prior to
execution of this Agreement.
3.17 LABOR RELATIONS. Except as set forth in Section 3.17 of
the Disclosure Schedule, none of the Beverage Companies is a party to any
collective bargaining agreements or any side Contract with any labor
organization, and no employees of any Beverage Company are represented by any
labor organization. Except as set forth in Section 3.17 of the Disclosure
Schedule, to the Knowledge of Parent, there are no pending or threatened
representations, campaigns, elections, certification proceedings or petitions,
seeking a representation proceeding brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority. Except as
set forth in Section 3.17 of the Disclosure Schedule, there is no unfair labor
practice complaint or other proceeding against any of the Beverage Companies
pending before the National Labor Relations Board which, if adversely decided,
would have a Company Material Adverse Effect, and there is no labor strike
pending or threatened against any Beverage Company which would have a Company
Material Adverse Effect.
3.18 BUSINESS RELATIONSHIPS; RECEIVABLES. (a) Section 3.18(a)
of the Disclosure Schedule lists the ten largest distributors and ten largest
bottlers of the Beverage Companies, taken as a whole (in terms of volume in the
fiscal year ended January 2, 2000) and the five largest suppliers of the
Beverage Companies (in the fiscal year ended January 3, 1999). Except as set
forth in Section 3.18(a) of the Disclosure Schedule, to the Knowledge of Parent
(i) no such Person has terminated or substantially decreased the extent of, or
given notice to any Merging Company, Parent or any Beverage Company, of the
termination or substantial reduction of, or of the intent to terminate or
substantially decrease the extent of such Person's business relationship
with any Beverage Company and (ii) no such Person from whom any Beverage
Company obtained goods or services has disrupted or substantially
decreased the level or continuity of its provision of such to any Beverage
Company or made such the subject of any allocation among its customers or
announced any intention to do so, nor to the Knowledge of Merging Companies
is any such action threatened.
(b) Except as set forth in Section 3.18(b) of
the Disclosure Schedule, all accounts receivable of the Beverage Companies (i)
arose from bona fide sales transactions in the ordinary course of business and
(ii) assuming the business of the Beverage Companies (including its
relationships with its customers) is conducted after the Closing in a manner
consistent with past practice, are collectible in the aggregate recorded amounts
thereof in accordance with their terms in an amount consistent with past
practice, net of applicable reserves and in accordance with GAAP applied on a
consistent basis.
3.19 CORPORATE MATTERS. Except as set forth in Section 3.19 of
the Disclosure Schedule, copies of the minute books, organizational records and
stock transfer books and ledgers of each Beverage Company have been delivered
to, or made available for review by, CS. With respect to each Beverage Company
from and after the date on which it was acquired or formed, directly or
indirectly, by Parent, such minute books and organizational records correctly
reflect in all material respects all actions taken by the directors,
shareholders, partners, members and managers of such companies and, since such
dates, such stock transfer books and ledgers correctly reflect in all material
respects all issuances and transfers of capital stock or other ownership
interests of such companies.
3.20 INSURANCE. The Beverage Companies are covered by
insurance of the kinds, covering such risks and in such amounts and with such
deductibles and exclusions, as are consistent with past business practice of
each Beverage Company and are reasonable for the business, assets and properties
of each Beverage Company.
3.21 INVENTORIES. Except as otherwise disclosed in Section
3.21 of the Disclosure Schedule, the inventories of each Beverage Company
consist of items of a quality and quantity usable or saleable in the ordinary
course of business, subject to spoilage and damage in amounts consistent with
the Beverage Companies' past practices and that are properly reserved against in
accordance with GAAP. The value of all items of inventory and promotional and
other selling materials shown in the financial statements described in Section
3.7 has been accounted for in accordance with GAAP, consistently applied.
The quantities of inventories of the Beverage Companies at the Closing will
be sufficient for currently anticipated order levels and product mixes in
the ordinary course of business consistent with past practice.
3.22 SEC DOCUMENTS. TCPG and SBG have filed with the
Securities and Exchange Commission all Company SEC Reports required to be filed
with the Securities and Exchange Commission by TCPG and SBG since January 1,
1999. No Subsidiary of TCPG (other than SBG) or SBG is required to file any
form, report, schedule, statement or other document with the Securities and
Exchange Commission. As of their respective dates, the Company SEC Reports filed
with the SEC complied in all material respects with the requirements of the
Securities Act, or the Securities Exchange Act of 1934, as amended, as the case
may be, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder applicable to such Company SEC Reports as of the date of
the filing thereof. Except to the extent that information contained in any
Company SEC Report has been revised or superseded by a later filed Company SEC
Report or as disclosed in the Draft S-1 Amendment, none of the Company SEC
Reports as of the date thereof contained any untrue statement of a material fact
or omitted a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The historical financial statements (including the
related notes) included in the Company SEC Reports comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Securities and Exchange Commission with respect
thereto, have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except as may be indicated therein or in the
notes thereto) and fairly present in all material respects the consolidated
financial positions of TCPG and SBG and their consolidated Subsidiaries as of
the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments).
3.23 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement, neither Parent nor
Merging Companies nor any other Person makes any other express or implied
representation or warranty.
3.24 DISCLOSURE SCHEDULE. On or prior to the date hereof,
Parent and Merger Companies have delivered to CS a schedule (the "DISCLOSURE
SCHEDULE") setting forth, among other things, items of disclosure relating to
any or all of the representations and warranties of Merger Companies and
Parent; PROVIDED, that the mere inclusion of an item in the Disclosure Schedule
shall not be deemed an admission by Merger Companies or Parent that such item
represents a material exception or fact, event or circumstance or that such
item would result in a Company Material Adverse Effect. Unless otherwise
specified, no information contained in any particular numbered section of the
Disclosure Schedule shall be deemed to be contained in any other numbered
section of the Disclosure Schedule unless it is reasonably apparent that it
should be included therein.
3.25 LOADING. Since January 2, 2000, no Beverage Company has
sold any material amount of product related to its respective businesses (i)
with payment terms longer than terms customarily offered by such Beverage
Company for such product, (ii) at a discount from listed price materially
differing from any discounts customarily offered by such Beverage Company for
such product, or (iii) with shipment terms materially differing from the
shipment terms customarily offered by such Beverage Company for such product as
of January 2, 2000, except in the ordinary course of business and in accordance
with past practice.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CS
CS and Merger Subs hereby jointly and severally represent and
warrant to Parent and Merging Companies as follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of CS and the Merger
Subs is a public limited company duly organized, validly existing and in good
standing under the laws of the United Kingdom, in the case of CS, and of
Delaware, in the case of the Merger Subs, and has all requisite corporate power
and authority to own and operate its assets and properties and to carry on its
business as currently conducted.
4.2 CORPORATE AUTHORIZATION. Each of CS and the Merger Subs
has the requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations under this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery and
performance by each of CS and the Merger Subs of this Agreement and the
consummation by each of CS and the Merger Subs of the transactions contemplated
by this Agreement have been duly authorized by all necessary corporate action on
the part of each of CS and the Merger Subs, as applicable, including, but not
limited to, approval by the board of directors of CS. No approval of the
shareholders of CS is necessary to authorize this Agreement or the transactions
contemplated hereby.
4.3 CONSENTS AND APPROVALS. Except as set forth in Schedule
4.3 (any item listed in such Schedule, a "CS REQUIRED CONSENT"), no consent,
approval or authorization of, or registration, declaration or filing with, any
Governmental Authority is required by CS or the Merger Subs in connection with
the execution, delivery and performance by CS and the Merger Subs of this
Agreement and the consummation by CS and the Merger Subs of the transactions
contemplated by this Agreement, except (i) for the filing of a premerger
notification and report form by CS under the HSR Act, (ii) as may be required
under any Other Antitrust Regulations, (iii) as may be required under any
environmental, health, employment or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the transactions
contemplated by this Agreement, (iv) as may be required under the laws of any
foreign jurisdiction in which CS or any Company conducts business or owns assets
and (v) for such other consents, approvals, orders, authorizations,
registrations, declarations and filings, the failure of which to be obtained or
made would not, individually or in the aggregate, have a CS Material Adverse
Effect.
4.4 NON-CONTRAVENTION. The execution, delivery and performance
by CS and the Merger Subs of this Agreement, and the consummation by CS and the
Merger Subs of the transactions contemplated hereby, do not and will not (i)
violate any provision of the Memorandum and Articles of Association of CS or the
Merger Subs; (ii) conflict with, or result in the breach of, or constitute a
default under, or result in the termination, cancellation or acceleration
(whether after the filing of notice or the lapse of time or both) of any right
or obligation of CS or any of its Subsidiaries under, any agreement, lease,
contract, note, mortgage, indenture or other obligation of CS or its
Subsidiaries; or (iii) subject to the exceptions set forth in Section 4.3,
violate, or result in a breach of or constitute a default under any Applicable
Law or judgment, decree or order of any Governmental Authority to which CS or
any of its Subsidiaries is subject, other than, in the case of clauses (ii) and
(iii), any conflict, breach, termination, default, cancellation, acceleration,
loss or violation which would not, individually or in the aggregate, have a CS
Material Adverse Effect.
4.5 BINDING EFFECT. This Agreement constitutes a valid and
legally binding obligation of CS and the Merger Subs enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
4.6 BROKERS. Except for Xxxxxxx Xxxxx Barney, whose fees will
be paid by CS, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of CS
or any Subsidiary of CS who might be entitled to any fee or commission from CS
or the Merger Subs in connection with the transactions contemplated by this
Agreement.
4.7 PURCHASE FOR INVESTMENT. CS is acquiring the Shares for
investment and not with a view toward, or for the purpose of, the resale or
distribution thereof. CS acknowledges that the sale of the Shares hereunder has
not been registered under the Securities Act and that the Shares may not be
sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed
of without registration under the Securities Act, pursuant to an exemption
therefrom or in a transaction not subject thereto. CS has no knowledge that any
representation or warranty of Merging Companies contained in Article III is not
true and correct in all material respects, except as previously discussed with
Parent with respect to the agreements set forth in Section 3.13(L)(1) and (2) of
the Disclosure Schedule.
4.8 SUFFICIENT FUNDS. CS has access to sufficient funds, and
as of the Closing Date will have sufficient funds, to complete the purchase of
the Shares.
4.9 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Article IV, none of CS, Merger
Subs or any other Person makes any other express or implied representation or
warranty on behalf of CS or Merger Subs.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESSES PENDING CLOSING. Except as otherwise
contemplated by this Agreement or as set forth in Section 5.1 of the Disclosure
Schedule, during the period from the date hereof to the Closing, Parent shall
cause the Beverage Companies to conduct their business only in the ordinary
course consistent with past practice, and use commercially reasonable best
efforts to comply in all material respects with all Applicable Laws. In
addition, from and after the date hereof to the Closing Date, except as
otherwise provided in this Agreement or as otherwise contemplated hereby or as
set forth in Section 5.1 of the Disclosure Schedule, Parent shall not permit any
Beverage Company to, without the prior written consent of CS (which consent
shall not be unreasonably withheld, conditioned or delayed):
(i) (w) declare, set aside or pay any dividends
on, or make any other distributions (whether in cash, stock or property) in
respect of, any of its capital stock, except for cash dividends or other
distributions payable to a Beverage Company by a Subsidiary of such Beverage
Company or to Merging Companies as permitted pursuant to the terms of the Credit
Agreement, (x) purchase, redeem or otherwise acquire any shares of capital stock
or any other securities of any Beverage Company (except in connection with and
in accordance with the terms hereof or of the Option Plans as in effect on the
date hereof, the purchase of the 0.1% equity interest in SBG held by former SBG
employees or a purchase, redemption or acquisition of any shares of capital
stock or any other securities of a Beverage Company by any other Beverage
Company) or any options, warrants, calls or rights to acquire any such shares or
other securities, (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or any of its other
securities (except in connection with and in accordance with the terms of the
Option Plans as in effect on the date hereof, or a purchase, redemption or
acquisition of any shares of capital stock or any other securities of a Beverage
Company by any other Beverage Company) or (z) liquidate, merge or consolidate
with any other person (other than a merger or consolidation of a Beverage
Company with any other Beverage Company);
(ii) except in connection with and in accordance
with the terms of the Option Plan, as in effect on the date hereof, issue,
deliver, sell, pledge, dispose of, grant, encumber or otherwise transfer or
authorize the issuance, delivery, sale, pledge, disposition, grant or
encumbrance of any shares of its capital stock, any other equity or voting
interests or any securities convertible into, or exchangeable for, or any
options, warrants, calls or rights to acquire, any such shares, voting
securities or convertible securities or any stock appreciation rights or other
rights;
(iii) amend or propose to amend its articles of
incorporation or by-laws (or similar organizational documents);
(iv) directly or indirectly acquire or agree to
acquire by merging or consolidating with, or by purchasing all or a substantial
portion of the assets or stock of, or in any other manner (A) any assets
constituting a business or any corporation, partnership, joint venture or
association or other entity or division thereof, or any direct or indirect
interest in any of the foregoing (other than acquisitions which, individually or
in the aggregate, do not exceed $1.0 million), or (B) any other assets other
than purchases of assets (including, subject to clause (vii) below, capital
assets) in the ordinary course of business (including, without limitation,
acquisitions of distribution rights with respect to products of the
Beverage Companies) consistent with past practice;
(v) directly or indirectly sell, lease, license,
sell and lease back, mortgage or otherwise encumber or subject to any
Encumbrance or otherwise dispose of any of its properties or assets or any
interest therein, except (i) sales of assets (including, without limitation,
distribution rights with respect to products of the Beverage Companies) in the
ordinary course of business consistent with past practice, (ii) pledges or
encumbrances pursuant to existing borrowing arrangements or (iii) any such
transaction not otherwise permitted with an aggregate value not to exceed
$250,000;
(vi) (x) incur any indebtedness (other than
indebtedness incurred under the Credit Agreement) or guarantee any indebtedness
of another person or issue or sell any debt securities or options, warrants,
calls or other rights to acquire any debt securities of any Beverage Company,
guarantee any debt securities of another Person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another Person
or enter into any arrangement having the economic effect of any of the
foregoing, (y) make any loans, advances or capital contributions to, or
investments in, any other Person or (z) enter into any hedging agreement or
other financial agreement or arrangement designed to protect any Beverage
Company against fluctuations in interest rates, commodities prices, currency
exchange rates or otherwise, except, in the cases of clauses (x), (y) and (z)
above, agreements or arrangements entered into in the ordinary course of
business consistent with past practice;
(vii) incur or commit to incur any capital
expenditures in an aggregate amount exceeding $1.0 million per month;
(viii) pay, discharge, settle or satisfy any
litigation, claims, liabilities or obligations (whether absolute, accrued,
asserted or unasserted, contingent or otherwise) in an aggregate amount
(excluding insurance proceeds) exceeding $300,000, other than the payment,
discharge or satisfaction in the ordinary course of business consistent with
past practice (including any payments with respect to the Credit Agreement) or
as required by their terms as in effect on the date of this Agreement of claims,
liabilities or obligations reflected, reserved against or otherwise disclosed in
the most recent financial statements (or the notes thereto) described in Section
3.7 or described in the Company SEC Reports (for amounts not in excess of such
reserves or as otherwise disclosed);
(ix) (A) grant to any employee, officer,
director, consultant or independent contractor of any Beverage Company any
material increase in cash compensation (except for cost of living increases or
contractually mandated increases) or pay any bonus, other than in the ordinary
course of business consistent with past practice, (B) grant to any employee,
officer, director, consultant or independent contractor of any Beverage Company
any increase in severance or termination pay, (C) establish, adopt, enter into
or amend in any material respect any collective bargaining agreement or Employee
Benefit Plan in respect of any current or former employee of the Beverage
Companies, other than as required by law or as a condition of maintaining any
tax benefit available thereunder, (D) other than with respect to the Option
Plan, take any action to accelerate any rights or benefits, take any action to
fund or in any other way secure the payment of compensation or benefits under
any Employee Benefit Plan or (E) grant any stock option, in each case above
other than (i) changes that are required by applicable law or (ii) to satisfy
obligations existing as of the date hereof or to effect changes previously
approved by the board of directors (or any committee thereof) of the Parent,
either Merging Company or any Beverage Company;
(x) fail to maintain existing insurance at
levels substantially comparable to current levels to the extent available on
commercially reasonable terms;
(xi) transfer or license to any Person or
otherwise extend, amend or modify any rights to any material Intellectual
Property Rights of any Beverage Company other than in the ordinary course of
business consistent with past practice; or
(xii) except insofar as may be required by a change
in GAAP or generally accepted Tax or accounting principles of the applicable
jurisdiction or changes in applicable law, make any changes in accounting
methods, principles or practices.
5.2 ACCESS. Prior to the Closing, Parent shall, and shall
cause the Beverage Companies to, permit CS and its officers, employees,
accountants, counsel, financial advisors and other representatives to have
reasonable access, during normal business hours and upon reasonable advance
notice, to the properties, books, records, accountants (subject to their
availability) and personnel of Parent and its Affiliates relating to the
Beverage Companies, and shall furnish, or cause to be furnished, to CS, all
other information concerning the Beverage Companies that is available to Parent
as CS may reasonably request. Without limiting the foregoing, Parent shall cause
the Beverage Companies to permit CS and its representatives access to the real
properties owned or leased by any Beverage Company for the purpose of conducting
phase I environmental reviews of such properties, as reasonably acceptable to
Parent. In connection with such access, CS's representatives shall cooperate
with Parent's representatives and shall use their reasonable best efforts to
minimize any disruption of the Beverage Companies. CS agrees to abide by
the terms of the Confidentiality Agreement with respect to such access and
any information furnished to it or its representatives pursuant to this
Section 5.2.
5.3 COOPERATION. Upon the terms and subject to the conditions
set forth in this Agreement, CS and Parent shall use their respective reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings with, and the taking of all reasonable steps
as may be necessary to obtain an approval or waiver from, or to avoid an action
or proceeding by, any Governmental Authority, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of any of the transactions
contemplated by this Agreement, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Authority vacated
or reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement; PROVIDED, HOWEVER, that, CS shall not be
required to consent to the divestiture or other disposition of any of its or its
Affiliates' assets (including the Shares or any of the assets of any Beverage
Company but excluding the shares or assets of any of the Beverage Companies
international businesses), PROVIDED, FURTHER, that, notwithstanding the
foregoing, the actions of Merging Companies and CS with respect to filings,
approvals and other matters pursuant to the HSR Act and Other Antitrust
Regulations shall be governed by Section 5.4.
5.4 ANTITRUST NOTIFICATION. (a) Parent and CS shall, as
promptly as practicable and before the expiration of any relevant legal
deadline, but in no event later than ten (10) Business Days following the
execution and delivery of this Agreement, file with (i) the FTC and the DOJ, the
notification and report form required for the transactions contemplated hereby
and any supplemental information requested in connection therewith pursuant to
the HSR Act and (ii) any other applicable Governmental Authority all filings,
reports, information and documentation required for the transactions
contemplated hereby pursuant to Other Antitrust Regulations. If a filing is
required to be made in Brazil by CS, it shall be made within 15 Business Days of
the execution of this Agreement. Each of Parent and CS shall furnish to each
other's counsel such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission
that is necessary under the HSR Act and Other Antitrust Regulations.
(b) Parent and CS shall use their commercially
reasonable best efforts to promptly obtain any clearance required under the HSR
Act and Other Antitrust Regulations for the consummation of the transactions
contemplated by this Agreement and shall keep each other apprised of the status
of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ and other Governmental Authorities and
shall comply promptly with any such inquiry or request; PROVIDED, HOWEVER, that
CS shall not be required to consent to the divestiture or other disposition of
any of its or its Affiliates' assets (including the Shares or any of the assets
of any Beverage Company, but excluding the shares or assets of any of the
Beverage Companies' international businesses).
(c) The parties hereto commit to instruct their
respective counsel to cooperate with each other and use reasonable best efforts
to facilitate and expedite the identification and resolution of any such issues
and, consequently, expiration of the applicable HSR Act waiting period at the
earliest practicable date. Said reasonable best efforts and cooperation include
but are not limited to counsel's undertaking (i) to keep each other
appropriately informed of communications from and to personnel of the reviewing
antitrust authority, and (ii) to confer with each other regarding appropriate
contacts with and response to personnel of said antitrust authority.
5.5 SUPPLEMENTAL DISCLOSURE. Parent shall confer on a regular
and frequent basis with CS, report on operational matters and promptly notify CS
of, and furnish CS with, any information it may reasonably request with respect
to any event or condition or the existence of any fact that would cause any of
the conditions to CS's obligation to consummate the transactions contemplated by
this Agreement not to be completed, and CS shall promptly notify Parent of, and
furnish Parent with, any information it may reasonably request with respect to
any event or condition or the existence of any fact that would cause any of the
conditions to Parent's obligation to consummate the transactions contemplated by
this Agreement not to be completed.
5.6 FURTHER ASSURANCES. At any time after the Closing Date,
Parent, on the one hand, and CS, on the other hand, shall promptly execute,
acknowledge and deliver any other assurances or documents reasonably requested
by CS or Parent, as the case may be, and necessary for it to satisfy its
respective obligations hereunder or obtain the benefits contemplated hereby.
5.7 ANNOUNCEMENTS. Prior to the Closing, neither Parent nor CS
will issue any press release or otherwise make any public statement with respect
to this Agreement and any of the transactions contemplated hereby without the
prior consent of the other (which consent shall not be unreasonably withheld,
conditioned or delayed) after having had a reasonable time to review such press
release or statement, except as expressly permitted by and in accordance with
the terms of the Confidentiality Agreement. The parties agree that the initial
press releases to be issued with respect to the transactions contemplated by
this Agreement shall be in the form heretofore agreed to by the parties.
5.8 PRESERVATION OF RECORDS. Subject to Section 8.5, CS agrees
that it shall, at its own expense, preserve and keep the records held by it
relating to the businesses of the Beverage Companies that could reasonably be
required after the Closing by Parent for the longer of six (6) years after the
Closing Date or the applicable statute of limitations. In addition, CS shall
make such records available to Parent as may be reasonably required by Parent
for legitimate business reasons, such as, but not limited to, the preparation of
Tax Returns or the defense of litigation or other proceedings. Except as may be
required in connection with such legitimate business purpose, Parent will hold
in confidence all confidential information identified as such by, and obtained
from, CS pursuant to this Section; PROVIDED, HOWEVER, that information which (i)
was in the public domain, (ii) was in fact known to Parent prior to disclosure
by CS, or (iii) becomes known to Parent from or through a third party not under
an obligation of non- disclosure to CS shall not be deemed to be confidential
information; and PROVIDED FURTHER that Parent may disclose any such confidential
information to any legal or financial advisor provided such advisor is advised
of the terms of this Section 5.8.
5.9 RELATED PARTY PAYMENTS. Except as set forth in Section 5.9
of the Disclosure Schedule and except as required under supply agreements
requiring reimbursement of Parent for raw material purchases identified in
Section 5.9 of the Disclosure Schedule and, except as set forth in Section 5.10,
all liabilities and obligations of the Beverage Companies to Parent and its
Affiliates shall be paid or otherwise settled prior to the Closing. Parent
shall, at the Closing, assign to the Beverage Companies raw material Contracts
relating to the business of the Beverage Companies, and CS shall cause the
Beverage Companies to assume all of the obligations of Parent thereunder.
5.10 INSURANCE/EMPLOYEE BENEFITS.
(a) EMPLOYEES. (i) For the one-year period
commencing on the Closing Date, except as otherwise provided by any collective
bargaining agreement, CS agrees to cause the Surviving Corporations and the
Subsidiaries thereof to provide those persons employed by the Beverage
Companies immediately prior to the Closing, including those employees on
vacation, leave of absence, disability (work-related or otherwise) or sick
leave or layoff (whether or not such employees return to active
employment with the Beverage Companies) (the "EMPLOYEES"), with employee
benefits (other than equity benefits and incentive-based benefits) that
in the aggregate are substantially comparable to those provided to such
Employees immediately prior to the Closing. Nothing contained herein shall
be deemed to impose on CS or any of its Subsidiaries any obligation to continue
to employ any Employee or to provide the benefits referred to herein to an
Employee after such person ceases to be employed by CS or any of its
Subsidiaries.
(ii) To the extent that service is
relevant for purposes of eligibility or vesting under any employee benefit plan,
program or arrangement established or maintained by CS or any of its
Subsidiaries for the benefit of the Employees pursuant to the obligations of
clause (i) above, such plan, program or arrangement shall credit such Employees
for service on or prior to the Closing with the Beverage Companies in the same
manner and to the same extent that prior service is credited for service
rendered by employees of the Parent and its Subsidiaries.
(b) SEVERANCE OBLIGATIONS. The parties agree
that any and all costs of severance relating to any Employees either under any
of the Contracts listed in Section 3.13 of the Disclosure Schedule (including,
without limitation, any related litigation costs), or arising by operation of
law shall be for CS's account.
(c) 401(K) PLAN. If elected by CS by written
notice to Parent prior to the Closing Date, then as soon as practicable after
the Closing Date, Parent shall cause assets representing the account balances of
all Employees under the Triarc Companies, Inc. Retirement Savings Plan (the
"TRIARC PLAN"), whether or not vested, to be transferred to a tax-qualified
defined contribution plan established as designated by CS. Such transfer shall
be made in cash or in kind, as determined by CS. If CS fails to make such
election, Parent shall cause all such account balances to be fully vested as of
the Closing Date. CS shall promptly reimburse Parent or pay to third parties any
costs or expenses properly allocable to the Beverage Companies or overpaid by
Parent, with respect to Employees under the Triarc Plan and whether or not such
amounts relate to the period before or after the Closing.
(d) INDEMNIFICATION AND DIRECTORS' AND
OFFICERS' LIABILITY INSURANCE. (i) The Articles of Incorporation and By-Laws of
the Surviving Corporations and each of the Beverage Companies shall contain
provisions no less favorable with respect to indemnification than are set
forth in the Articles of Incorporation and By-Laws of SBG and RC, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would affect adversely
the rights thereunder of individuals who at the Effective Time were
covered by such provisions unless such modification shall be required by law.
(ii) After the Effective Time, the
Surviving Corporations shall indemnify and hold harmless, each present and
former director, officer, employee, fiduciary and agent of the Beverage
Companies (collectively, the "INDEMNIFIED PERSONS") against any and all losses,
liabilities, obligations, damages, claims, actions, judgments, causes of action,
assessments, out of pocket costs or expenses (including, without limitation,
interest, penalties and reasonable attorney's fees and disbursements) (whether
arising before or after the Effective Time), based upon, arising out of or
otherwise in respect of any action or omission in their capacity as an officer,
director, employee, fiduciary or agent, whether occurring before or after the
Effective Time, for a period of six years after the Effective Time, to the
extent that such person was entitled to such protection as of the date hereof.
(iii) The Surviving Corporations shall use
their reasonable best efforts to maintain in effect for six years from the
Effective Time (without any gaps or lapses in coverage), if available,
directors' and officers' liability and fiduciary and employment practice
insurance policies with at least the same coverage and containing terms and
conditions which are not materially less favorable) with respect to matters
occurring prior to the Effective Time, PROVIDED, THAT the Surviving Corporations
shall not be required to expend pursuant to this Section 5.10(d) more than an
amount per year equal to 200% of the annual premiums currently paid by or on
behalf of the Beverage Companies in order to maintain such policies (which
premiums Parent represents and warrants to be approximately $650,000 in the
aggregate) or comparable policies and in the event that the cost of such
coverage shall exceed such amount, the Surviving Corporations shall purchase as
much coverage as possible for such amount.
(iv) In the event that either Surviving
Corporation or any of its successors or assigns (1) consolidates with or merges
into any other Person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (2) transfers all or substantially
all of its properties and assets to any Person, then, and in each such case,
proper provision shall be made so that the successors and assigns of such
Surviving Corporation shall assume the obligations set forth in this Section
5.10(d).
(v) Payments by the indemnifying party
pursuant to this Section 5.10(d) shall be limited to the amount of any losses
that remain after deducting therefrom any insurance proceeds and any indemnity,
contribution or other similar payment reasonably recoverable by the Indemnified
Person or any Affiliate thereof from any third party with respect thereto.
(vi) Any party that proposes to assert the
right to be indemnified under this Section 5.10(d) will, promptly after receipt
of notice of commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under this Section
5.10(d), notify the indemnifying party of the commencement of such action,
enclosing a copy of all the papers served, but the omission so to notify
promptly the indemnifying party will not relieve it from any liability that it
may have to any indemnified party under the provisions of this Section 5.10(d)
unless, and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party or otherwise materially
adversely affects the ability of the indemnifying party to defend against or
diminish the losses arising out of such claim, action or proceeding. If any such
action is brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written notice to
the indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(i) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based on advice of counsel to the indemnified party who is reasonably
satisfactory to the indemnifying party) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party,
who is reasonably satisfactory to the indemnifying party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party who has assumed the defense of any claim or action pursuant to this
Section 5.10(d) will not have the right to direct the defense of such action on
behalf of the indemnified party), or (iv) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. Any indemnifying party who
has assumed the defense of any claim or action pursuant to this Section 5.10(d)
will not be liable for any settlement of any action or claim effected without
its prior written consent. If the indemnifying party assumes the defense of any
claim or action pursuant to this Section 5.10(d), the indemnified party shall
make available to the indemnifying party any books, records or other documents
within its control that are reasonably necessary for such defense.
(vii) The obligations of the Surviving
Corporations under this Section 5.10(d) shall not be terminated or modified in
such a manner as to adversely affect any Indemnified Person to whom this Section
5.10(d) applies without the consent of each affected Indemnified Person (it
being expressly agreed that the Indemnified Persons to whom this Section 5.10(d)
applies shall be third-party beneficiaries of this Section 5.10(d)).
(viii) In the event that the Surviving
Corporations should fail, at any time from and after the Closing Date, to comply
with any of the foregoing obligations set forth in this Section 5.10(d), for any
reason, CS shall be responsible therefor and hereby agrees to perform such
obligations unconditionally without regard to any defense or other basis for
nonperformance which the Surviving Corporations may have or claim (except as
would be prohibited by applicable law), it being the intention of this
subsection (viii) that the Indemnified Persons shall be fully indemnified to the
extent provided in this Section 5.10(d) and that the provisions of this
subsection (viii) be a primary obligation of CS and not merely a guarantee by CS
of the obligations of the Surviving Corporations.
(e) INSURANCE. (i) Parent, Merging Companies
and CS agree that Casualty Insurance Claims relating to the Beverage Companies
(including reported claims and including incurred but not reported claims) will
remain with the Beverage Companies immediately following the Closing. For
purposes hereof, "CASUALTY INSURANCE CLAIMS" shall mean workers' compensation,
auto liability, general liability and products liability claims, fiduciary
coverage and employment practices coverage and all related expenses to the
extent not covered by insurance, including, but not limited to, claims,
retentions, loss sensitive adjustments, audits and third party administrative
adjustments. The Casualty Insurance Claims are subject to the provisions of
policies of insurance with insurance carriers and contractual arrangements
with insurance adjusters maintained by Parent or Merging Companies prior to
the Closing (collectively, the "INSURANCE POLICIES"). With respect to the
Casualty Insurance Claims, the following procedures shall apply: (i) Parent
shall continue to administer, adjust, settle and pay, on behalf of the
Beverage Companies, all Casualty Insurance Claims with dates of occurrence
prior to the date of closing; PROVIDED, that Parent will obtain the consent
of CS prior to adjusting, settling or paying any Casualty Insurance Claim of
an amount greater than $30,000; and (ii) Parent shall invoice the Beverage
Companies at the end of each month for Casualty Insurance Claims paid on behalf
of the Beverage Companies by Parent or Parent's insurance company or insurance
adjuster during the previous month. CS shall cause the Beverage Companies to
pay Parent within 15 days of the date of each monthly invoice. In the event
that the Beverage Companies do not pay Parent within 15 days of such invoice,
interest at the rate of 10% per annum shall accrue on the amount of such
invoice. Casualty Insurance Claims to be paid by the Beverage Companies
hereunder shall include all costs necessary to settle claims including, but
not limited to, compensatory, medical, legal, adjusting fees and other
allocated expenses. In the event that any Casualty Insurance Claim exceeds
a deductible or self-insured retention under the Insurance Policies, and
provided that the Beverage Companies shall have promptly paid any costs related
to such Casualty Insurance Claim, the Beverage Companies shall be entitled to
the benefit of any insurance proceeds that may be available to discharge
any portion of such Casualty Insurance Claim.
(ii) Parent shall not be responsible to
CS or any of its Affiliates for the failure of any insurer to pay under any such
Insurance Policy.
(iii) Nothing in this Agreement is intended
to provide or shall be construed as providing a benefit or release to any
insurer or claims service organization of any obligation under any Insurance
Policy. Parent, Merging Companies and CS confirm that the sole intention of this
Section 5.10(f) is to divide and allocate between them the benefits and
obligations under the Insurance Policies as of the Closing Date and not to
affect, enhance or diminish the rights and obligations of any insurer or claims
service organization thereunder. Nothing herein shall be construed as creating
or permitting any insurer or claims service organization the right of
subrogation against Parent, Merging Companies or CS or any of their Affiliates
in respect of payments made by one to the other under any Insurance Policy.
5.11 ASSUMPTION OF 2018 DEBENTURES.
5.11.1 DELIVERY OF CLASS A SHARES; CHARACTER OF
CLASS A SHARES. On the Closing Date, Parent shall deliver to the Custodian under
the Custody Agreement, dated as of the Closing Date, substantially in the form
attached hereto as Exhibit B (the "CUSTODY AGREEMENT") stock certificates duly
executed and in proper form and registered in blank representing 3,407,400
treasury shares of Class A Common Stock of Parent, par value $0.10 per share
(the "CLASS A SHARES"). The parties hereto agree that such Class A Shares shall
continue to be treasury shares of Parent until delivered in accordance with the
terms of the Custody Agreement. Until so delivered, no party hereto (other than
Parent to the extent permitted by law) shall have any rights with respect to
such shares including, without limitation, the right to vote such shares or the
right to receive dividends or distributions upon the dissolution, winding-up or
liquidation of Parent.
5.11.2 CONVERSION RATE. (a) The Class A Shares
delivered to the Custodian shall represent the maximum number of shares of Class
A Common Stock into which the 2018 Debentures are convertible based on a
conversion rate of 9.465 shares of Class A Common Stock per $1,000 aggregate
principal amount of the 2018 Debentures at maturity (the "CONVERSION RATE"). The
Conversion Rate is the rate that is currently in effect with respect to the
conversion of 2018 Debentures into shares of Class A Common Stock.
(b) In the event that Parent shall, directly or
indirectly, take any action (an "ADJUSTMENT EVENT") which results in or
necessitates an adjustment to the Conversion Rate and/or the required issuance,
upon conversion of the aggregate principal amount of the 2018 Debentures at
maturity or otherwise, of shares of Class A Common Stock exceeding the number of
shares of Class A Common Stock represented by the Class A Shares including,
without limitation, any of the actions described in Sections 11.06, 11.07, 11.08
and 11.12 of the Parent Indenture, then, no later than five (5) Business Days
after the Adjustment Event, Parent shall deliver to the Custodian such number of
additional shares of Class A Common Stock, determined pursuant to the applicable
provisions of the Indenture, including without limitation, Sections 11.06,
11.07, 11.08 or 11.12 of the Indenture, as is necessary to reflect the
Adjustment Event and ensure that the Custodian has a sufficient number of shares
of Class A Common Stock to deliver to each 2018 Debenture holder the maximum
number of shares of Class A Common Stock into which its 2018 Debentures are
convertible.
5.11.3 PRESERVATION OF CONVERSION RIGHTS. To the
extent that such actions do not otherwise conflict with Parent's covenants and
agreements herein, in the event that prior to February 9, 2003, Parent (i)
effects any reclassification of outstanding shares of Class A Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value), (ii) enters into any consolidation, merger, business
combination with another corporation or entity or similar transaction as a
result of which holders of Class A Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash) with respect to
or in exchange for their Class A Common Stock ("SUBSTITUTE SECURITIES") or (iii)
effects any sale or conveyance of any properties or assets to any other
corporation or entity as a result of which holders of Class A Common Stock shall
be entitled to receive Substitute Securities with respect to or in exchange for
their Class A Common Stock, then Parent shall (x) with respect to an event
described in clause (i), ensure that, and with respect to an event described in
clause (ii) or (iii) above, ensure that the agreement relating to such
transaction includes a covenant in favor of both Parent and CS providing that,
in each case to the extent required under the Parent Indenture, assuming for
this purpose that Parent remained subject thereto, each 2018 Debenture holder
shall be entitled to receive, upon any future conversion of the 2018 Debentures
held by such holder, the kind and amount of Substitute Securities that a holder
of the number of Class A Shares issuable upon conversion of each holder's 2018
Debentures immediately prior to such reclassification or transaction would have
received had each holder converted its 2018 Debentures immediately prior to the
reclassification or transaction, and (y) with respect to any of the events
described in clauses (i), (ii) and (iii) above, execute with the Trustee an
amendment to the Supplemental Parent Indenture providing for the conversion of
the 2018 Debentures into the Substitute Securities.
5.11.4 CORPORATE EXISTENCE. Prior to
February 9, 2003, Parent shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence where the
failure to do so would constitute an Event of Default under the Parent
Indenture, assuming for this purpose that Parent remained subject thereto.
5.11.5 DEFAULTS UNDER PARENT INDENTURE. (a)
Parent represents and warrants that to the Knowledge of Parent there are no
existing defaults or events that, with the passing of time or notice or both,
would become Events of Default (as defined in the Parent Indenture). Parent
shall not take any action prior to the Closing Date which would result, with the
passing of time or notice or both, in an Event of Default under the Parent
Indenture.
(b) No registration statement is currently
in effect with respect to the 2018 Debentures.
5.11.6 EXECUTION AND DELIVERY OF SUPPLEMENTAL
PARENT INDENTURE. Parent agrees to execute and deliver on the Closing Date a
supplemental Parent Indenture by and among CS, Parent and the Trustee (the
"Supplemental Parent Indenture"), in form and substance reasonably satisfactory
to CS and the Trustee, in order to provide for the assumption by CS of the
obligations of Parent under the Parent Indenture and the release of Parent from
its obligations under the Parent Indenture and the 2018 Debentures.
5.11.7 TRUSTEE CERTIFICATE. Parent shall request
the Trustee to deliver to CS on the Closing Date a certificate, in form and
substance reasonably satisfactory to CS and its counsel, certifying that as of
the Closing Date the Trustee has not received notice that a default has occurred
under the Parent Indenture.
5.11.8 OFFICERS' CERTIFICATES; OPINION OF COUNSEL
TO PARENT. (a) Each of Parent and CS shall deliver to the Trustee such Officers'
Certificates (as defined in the Parent Indenture) as the Trustee may reasonably
request in connection with the execution and delivery of the Supplemental Parent
Indenture and the effectuation of the matters contemplated by this Section 5.11.
(b) Each of Parent and CS shall cause its
counsel to deliver to the Trustee on the Closing Date its opinion addressed to
the Trustee, in form and substance reasonably satisfactory to Trustee, that all
conditions precedent to the execution and delivery of the Supplemental Parent
Indenture have been complied with by their respective clients and that the
Supplemental Parent Indenture complies with Article 5 of the Parent Indenture
and, in respect of the opinion delivered by Parent's counsel, that the related
consolidation, merger, conveyance, transfer or lease complies with Article 5 of
the Parent Indenture.
5.11.9 REGISTRATION RIGHTS. Parent and CS shall
execute and deliver prior to the Closing Date a registration rights agreement
substantially in the form of Exhibit D providing for the registration of the
delivery of shares of Class A Common Stock upon conversion of the 2018
Debentures (the "REGISTRATION RIGHTS AGREEMENT").
5.11.10 SURVIVAL OF COVENANTS. It is acknowledged
and agreed by the parties that the covenants of Parent set forth in this Section
5.11 shall survive the Closing Date until the earlier of (a) such time as there
are no 2018 Debentures outstanding or (b) February 9, 2003.
5.11.11 INDEMNITIES. Parent agrees to indemnify,
defend and hold harmless each of CS, its directors and officers and any person
who controls CS within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended, its Affiliates
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation but excluding the repayment of the accreted value of the 2018
Debentures) which any such person may incur, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon (x) the failure of
the representations and warranties of Parent set forth in Section 5.11.2 and
5.11.5 to be true and correct as of the date hereof and on the Closing Date, (y)
any failure to perform or breach by Parent in any material respect of the
covenants described in this Section 5.11 and any failure to perform its
obligations under the Registration Rights Agreement or the Custody Agreement,
and (z) any impairment of the rights of any holder of a 2018 Debenture to
convert, upon delivery of notice thereof, its 2018 Debentures, in whole or in
part, solely as a result of a blackout period being in effect under the terms of
the Registration Rights Agreement or the failure of the Registration Statement
for the Initial Shelf Registration (as defined in the Registration Rights
Agreement) to be declared effective on or prior to the Closing Date.
5.11.12 ACTIONS BY CS. (a) CS agrees to execute
and deliver on the Closing Date the Supplemental Parent Indenture, in form and
substance reasonably satisfactory to Parent and the Trustee, in order to provide
for the assumption by CS of the obligations of Parent under the Parent Indenture
(including those obligations relating to the delivery of shares of Class A
Common Stock upon conversion of the 2018 Debentures). CS agrees to use its
reasonable best efforts to take all such additional actions as may be necessary
and appropriate to (x) assume the obligations of Parent with respect to the 2018
Debentures (including those obligations relating to the delivery of shares of
Class A Common Stock upon conversion of the 2018 Debentures) and (y) to obtain
the release of Parent in full from all obligations under, or responsibilities
relating to, resulting from or arising out of the Parent Indenture with respect
to the 2018 Debentures; provided that it is understood that the foregoing shall
not relieve Parent from its obligations to CS and its Affiliates hereunder and
under the Custody Agreement relating to the issuance of shares of Class A Common
Stock upon conversions of the 2018 Debentures and Parent's obligations under the
Registration Rights Agreement relating to registration rights with respect to
the shares of Class A Common Stock issuable upon 2018 Debenture conversions.
(b) CS agrees to take all actions reasonably
necessary to call for redemption on February 9, 2003 all outstanding 2018
Debentures and pay the redemption price therefor so that all of the 2018
Debentures cease to be outstanding from and after such date.
5.12 ASSUMPTION OF 10-1/4% NOTES.
5.12.1 DEFAULTS UNDER INDENTURE. (a) Parent
represents and warrants that, to the Knowledge of Parent, there are no existing
defaults or events that, with the passing of time or notice or both, would
become Events of Default (as defined in the Indenture). Parent shall not take
any action prior to Closing which would, with the passing of time or notice or
both, result in an Event of Default under the Indenture.
(b) Neither Xxxxxx Xxxxx nor Xxxxx Xxx is a holder of any
10-1/4% Notes and the Registration Rights Agreement dated February 25, 1999
between TCPG, SBG and Messrs. Xxxxx and May is no longer in force or effect.
5.12.2 AMENDMENT OF INDENTURE AND RELATED MATTERS.
Parent agrees to cause TCPG to expeditiously prepare and to cooperate and work
with CS and its counsel with respect to a Supplemental Indenture which will
provide for, among other things, the (a) release of TCPG, AI and all of the
Subsidiaries of AI that are Issuers or Subsidiary Guarantors (as defined in the
Indenture) and the termination of their respective obligations, including
Subsidiary Guarantees (as defined in the Indenture) (the "Obligor Release") and
(b) addition of a parent company guaranty by an Affiliate of AI. Parent further
agrees to cause TCPG to execute and deliver the Supplemental Indenture on or
before the Closing Date.
5.12.3 SURVIVAL OF COVENANTS. It is acknowledged
and agreed by the parties that the covenants of Parent set forth in this Section
5.12 shall survive the Closing Date.
5.12.4 TRUSTEE CERTIFICATE. Parent shall request
the Trustee to deliver to CS on the Closing Date a certificate, in form and
substance reasonably satisfactory to CS and its counsel, certifying that as of
the Closing Date the Trustee has not received notice that a default has occurred
under the 10-1/4% Indenture.
5.12.5 OFFICERS' CERTIFICATE; OPINION OF COUNSEL
TO PARENT AND CS. (a) Each of Parent and CS shall deliver to the Trustee such
Officers' Certificates (as defined in the 10-1/4% Indenture) as the Trustee may
reasonably request in connection with the execution and delivery of the
Supplemental Indenture and the effectuation of the matters contemplated by this
Section 5.12.
(b) Each of Parent and CS shall cause its
counsel to deliver to the Trustee on the Closing Date its opinion addressed to
the Trustee, in form and substance reasonably satisfactory to the Trustee, that
all conditions precedent to the execution and delivery of the Supplemental
Indenture have been complied with by their respective clients and that the
Supplemental Indenture complies with the 10-1/4% Indenture and, in respect of
the opinion delivered by Parent's counsel, that the related consolidation,
merger or transfer complies with the 10-1/4% Indenture.
5.12.6 ACTIONS BY CS. CS agrees to execute and
deliver on or before the Closing Date the Supplemental Indenture, in form and
substance reasonably satisfactory to Parent and the Trustee, in order to provide
for the assumption by CS of the obligations of TCPG under the 10-1/4% Indenture
and to cause the Supplemental Indenture to be qualified under the Trust
Indenture Act of 1939, if required. CS agrees to use its reasonable best efforts
to take all such additional actions as may be necessary and appropriate to (x)
assume the obligations of Merging Companies under the 10-1/4% Indenture and the
10-1/4% Notes and (y) to obtain the release of TCPG, AI and all of the
Subsidiaries of AI that are Subsidiary Guarantors in full from their obligations
under, or responsibilities relating to, resulting from or arising out of the
10-1/4% Indenture with respect to the 10-1/4% Notes.
5.12.7 INDEMNITIES. Parent agrees to indemnify,
defend and hold harmless each of CS, its directors and officers and any person
who controls CS within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended, its Affiliates,
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation but excluding the repayment of the principal amount of, accrued
interest on or any applicable premium on the 10-1/4% Notes) which any such
person may incur, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (x) the failure of the representations and
warranties of Parent set forth in Section 5.12.1 to be true and correct as of
the date hereof and on the Closing Date, and (y) any failure to perform or
breach by Parent in any material respect of the covenants described in this
Section 5.12.
5.13 NO SOLICITATION. (a) Parent will not, nor will Parent
permit any of its Affiliates or their respective officers, directors, employees,
investment bankers, financial advisors, attorneys, accountants and other
representatives and agents (each a "REPRESENTATIVE"), directly or indirectly,
to (i) solicit, seek, initiate or encourage (including by way of furnishing
information), or take any other action to facilitate the submission of any
inquiries or the making of any proposal or offer that constitutes, or would be
reasonably likely to constitute or lead to, an Acquisition Proposal (as defined
below) or (ii) enter into, continue or otherwise participate in any
discussions or negotiations (including by way of furnishing information), or
otherwise cooperate in any way with, or assist, participate in, facilitate or
encourage, any effort or attempt by any Person to submit or otherwise act in
furtherance of, an Acquisition Proposal; PROVIDED, HOWEVER, that nothing
contained in this Section shall prohibit Parent or any Representative from
furnishing information to, or entering into discussions or negotiations with,
any Person that makes an unsolicited written, bona fide Acquisition Proposal
on or after the date hereof that the board of directors of Parent concludes in
good faith (after consultation with a financial advisor of nationally
recognized reputation and outside counsel) (1) is reasonably capable of being
completed, taking into account all legal, financial, regulatory and
other aspects of the Acquisition Proposal and the Person making the Acquisition
Proposal, and (2) would, if consummated, result in a transaction more favorable
to Parent and its stockholders from a financial point of view than the
transaction contemplated by this Agreement (any such more favorable Acquisition
Proposal being referred to herein as a "SUPERIOR PROPOSAL") if, prior to taking
such action, Parent (x) provides reasonable notice to CS to the effect that they
are taking such action, and (y) receives from such Person an executed
confidentiality agreement in reasonably customary form.
(b) At any time after 48 hours following
notification to CS of Parent's intent to do so (which notification shall include
the identity of the bidder and the material terms and conditions of the
proposal) and if Parent has otherwise complied with the terms of this Section,
the board of directors of Parent may cause Merging Companies to terminate this
Agreement and cause Parent and any of its Subsidiaries, as applicable, to enter
into any agreement with respect to a Superior Proposal, provided Merging
Companies shall pay or cause to be paid to CS the Termination Fee. If Merging
Companies shall have notified CS of the intent to enter into an agreement with
respect to a Superior Proposal in compliance with the preceding sentence and
have otherwise complied with such sentence, Parent or any of its Subsidiaries
may enter into an agreement with respect to such Superior Proposal (with the
bidder and on terms no less favorable than those specified in such notification
to CS) after the expiration of such 48- hour period.
(c) "ACQUISITION PROPOSAL" means any written
proposal or offer from any Person relating to any direct or indirect acquisition
or purchase of (i) 95% or more of the assets, net income or net revenues of the
Beverage Companies, taken as a whole, or (ii) 100% of the equity securities
of SBG or 100% of the equity securities of Parent (including by way of a tender
offer or exchange offer for shares of equity securities of Parent), or any
merger, consolidation, business combination or similar transaction involving
Parent or SBG (other than the transactions contemplated by this Agreement).
5.14 PAYMENTS FOR OPTIONS. Prior to the Closing, Parent shall
take such actions as may be necessary so that (i) each stock option outstanding
under the Option Plan immediately prior to the Closing (the "OPTIONS") is fully
vested simultaneously with the Closing, (ii) unless exercised by midnight of the
second Business Day following the Closing, shall terminate and (iii) a person
exercising any Option after the Closing shall receive a cash payment from SBG in
respect thereof, payable immediately following such exercise, equal to the
amount set forth in respect of such Option on Section 5.14 of the Disclosure
Schedule (as to each Option, the "OPTION PAYMENT"), less applicable tax
withholdings. Payment shall be made by wire transfer of immediately available
funds to such bank accounts or bank account specified by each holder of Options
in their notice of exercise of Options. The amount of any Option Payment listed
in Section 5.14 of the Disclosure Schedule may be changed and the number of
Options outstanding may be increased by up to 2,717 Options (subject to the
150,000 share limitation contained in the Option Plan) at the sole discretion of
Parent at any time prior to the Closing upon written notice to CS provided at
least one (1) Business Day prior to the Closing Date, provided that any increase
in the amount of any Option Payment will reduce the number set forth in clause
(i) of the first sentence of Section 2.2(a) and the first number set forth in
the second sentence of Section 2.2(a) by the amount of such increase, and any
reduction in the Option Payment will increase the number set forth in clause (i)
of the first sentence of Section 2.2(a) and the first number set forth in the
second sentence of Section 2.2(a) by the amount of such reduction. In the event
that a holder of an Option which is vested and exercisable prior to the Closing
exercises such Option prior to Closing, then the number set forth in clause (i)
of the first sentence of Section 2.2(a) and the first number set forth in the
second sentence of Section 2.2(a) shall each be increased by the sum of the
Option Payment attributable to such Option plus the exercise price (net of any
cash payment due to the holder of Options in connection with such exercise) for
such Option, and the Option Payment attributable to such Option shall not be
payable. Any termination of an Option holder's employment by, or service as an
officer of, SBG or any affiliate thereof on or within two (2) Business Days
following the Closing shall be treated as a termination without "Cause," as
defined in the Option Plan, for purposes of determining such person's rights
under his or her Options, after taking into account this Section 5.14.
5.15 DEBT AGREEMENTS. During the period from the date hereof
until the Closing, Parent and Merging Companies shall comply in all material
respects with, and cause each Beverage Company to comply in all material
respects with, all of the covenants and obligations of such Merging Company or
Beverage Company under each of the 10-1/4% Indenture, the 10-1/4% Notes, the
2018 Debentures, the Parent Indenture and the Credit Agreement (collectively,
the "DEBT AGREEMENTS"). Without the prior written consent of CS, which shall not
be unreasonably withheld or delayed, Parent and Merging Companies shall not, and
shall cause the other Beverage Companies not to, amend, modify, waive, terminate
or supplement any Debt Agreement in a manner which would have a Company Material
Adverse Effect.
5.16 CONFIDENTIALITY. From and after the date hereof, each
party hereto will hold, and will cause its Affiliates and their respective
agents and representatives to hold, in strict confidence unless (i) such Person
is compelled to disclose such by judicial or administrative process (including,
without limitation, in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of any Governmental
Authority) or by other requirements of law or (ii) disclosed in any action or
proceeding brought by a party hereto in pursuit of its rights or in the exercise
of its remedies hereunder, all documents and information concerning the other
party or any of its Affiliates furnished to it by the other party or such other
party's representatives in connection with this Agreement or the transactions
contemplated hereby, except as provided in Section 5.8 hereof or to the extent
that such documents or information can be shown to have been (a) previously
known by the party receiving such documents or information, (b) in the public
domain (either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) becomes known to the
receiving party from or through another source if the receiving party is not
aware that such source is under an obligation to another party hereto or to any
Beverage Company to keep such documents and information confidential PROVIDED
that after the Closing, the foregoing restrictions will not apply to CS's use or
disclosure of documents and information concerning the Beverage Companies and
their respective businesses furnished by Parent and Merging Companies hereunder,
and PROVIDED FURTHER that from and after the Closing, the foregoing restrictions
shall apply to Parent with respect to all confidential and proprietary
information regarding any Beverage Company and their respective businesses
without reference to (1) any qualification as to having obtained such
information from CS, or (2) clause (a) above. The parties hereto acknowledge and
agree that any remedy at law for breach of this Section 5.16 would be
inadequate, and Parent and Merging Companies hereby consent to the granting by
any court of competent jurisdiction of an injunction or other equitable relief,
without the necessity of actual monetary loss being proved, in order that the
breach or threatened breach of such provisions may be effectively restrained.
5.17 SECURITIES LAW FILINGS. Each of Parent and CS shall
furnish, or cause to be furnished, to the other party all information relating
to the Beverage Companies that is available to it and that the other party is
required to include in, or requires for the preparation of or verification of
information that is required to be included in, a specific filing pursuant to
the Securities Act, the Securities Exchange Act of 1934, as amended, the
securities laws of any State, or comparable laws or regulations of any other
jurisdiction, including, in the case of CS, any filing required to be made by CS
or any Subsidiary of CS in connection with or as a result of the actions
contemplated by Sections 5.11 or 5.12. Without limiting the foregoing, within
ten (10) days following the date on which CS receives written notice from Parent
that Parent is required to include in a specific filing financial information of
the Beverage Companies for any period prior to the Closing Date, CS shall
permit, and cause its Affiliates to permit, Parent and its officers, employees,
accountants, counsel, financial advisors and other representatives to have
reasonable access, during normal business hours and upon reasonable advance
notice, to the properties, books, records, accountants (subject to their
availability) and personnel of CS and its Affiliates relating to the Beverage
Companies solely for the purpose of obtaining the required information and, if
necessary, conducting an audit of the Beverage Companies (individually or as a
whole) or any division thereof for the relevant period or periods.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 CONDITIONS TO THE OBLIGATIONS OF CS, MERGER SUBS, PARENT
AND MERGING COMPANIES. The respective obligation of each party to effect the
Closing is subject to the satisfaction or waiver (to the extent permitted under
Applicable Laws) on or prior to the Closing Date of the following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS. No statute,
rule, regulation, decree, preliminary or permanent injunction, temporary
restraining order or other order of any nature of any U.S. federal or state
Governmental Authority shall be in effect that restrains, prevents or materially
changes the transactions contemplated hereby.
(b) ANTITRUST. The applicable waiting periods
under the HSR Act shall have expired or been terminated.
(c) REPAYMENT OF CREDIT AGREEMENT. Merging
Companies shall have repaid or caused to be repaid all outstanding principal and
accrued interest under the Credit Agreement dated as of February 25, 1999 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among SBG, Mistic Brands, Inc., Xxxxxxx'x Beverages, Inc., RCAC and
RC, as borrowers, various financial institutions party thereto as lenders, DLJ
Funding, Inc., as syndication agent, Xxxxxx Xxxxxxx Senior Funding, Inc., as
documentation agent, and The Bank of New York, as administrative agent, and
shall have obtained documentation reasonably satisfactory in form and substance
to CS, Parent and Merging Companies (such documentation to include, but not be
limited to, payment letters, releases and termination statements) evidencing the
release of Merging Companies, and all of the Subsidiaries of Merging Companies
that are guarantors under the Credit Agreement in full from all of their
obligations under, or responsibilities relating to, resulting from or arising
out of, the Credit Agreement and evidence the release of any Encumbrances
arising under the Credit Agreement (including the release of any Encumbrances on
any assets and properties of any Beverage Company arising under the Credit
Agreement).
6.2 CONDITIONS TO THE OBLIGATIONS OF CS AND MERGER SUBS. The
obligation of CS to effect the Closing is further subject to the satisfaction of
the following conditions, any or all of which may be waived on or prior to the
Closing Date in whole or in part by CS:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Parent and Merging Companies made hereunder
shall be true and correct, except (i) for changes permitted or contemplated by
this Agreement, (ii) to the extent that any representation or warranty is
expressly made as of a specified date, in which case such representation or
warranty shall be true and correct only as of such date and (iii) where failures
to be true and correct would not, individually or in the aggregate, have a
Company Material Adverse Effect (provided, however, in determining whether a
Company Material Adverse Effect has occurred, any qualification as to
materiality contained in such representation or warranty shall be deemed not to
apply). CS shall have received a certificate to that effect dated the Closing
Date and signed on behalf of Parent and Merging Companies by an authorized
officer of Parent and each Merging Company.
(b) AGREEMENTS. Parent and Merging Companies
shall have performed in all material respects all of their material obligations
required to be performed by them under this Agreement at or prior to the Closing
Date. CS shall have received a certificate to that effect dated the Closing Date
and signed on behalf of Merging Companies by an authorized officer of Parent
and each Merging Company.
(c) CONSENTS AND APPROVALS. The Required
Consents, if any, shall have been made or obtained.
(d) AFFILIATE LOANS. The Affiliate Loans shall
have been repaid in full concurrent with the Closing.
(e) CUSTODY AGREEMENT; REGISTRATION RIGHTS
AGREEMENT. Parent shall have duly executed and delivered the Custody Agreement,
substantially in the form of Exhibit B hereto, and the Registration Rights
Agreement, substantially in the form of Exhibit D hereto.
(f) ASSIGNMENT OF CONTRACTS. Evidence of the
assignments of the raw material Contracts described in Section 3.13(G)(2-7) of
the Disclosure Schedule shall have been provided to CS.
(g) SECTIONS 5.11 AND 5.12. Parent shall have
taken all actions under Sections 5.11 and 5.12 required to be taken by it prior
to the Closing Date.
(h) COLUMBUS, GEORGIA. Evidence of ownership
of title by a Beverage Company to 0000 00xx Xxxxxx, Xxxxxxxx, Xxxxxxx shall have
been delivered to CS.
6.3 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGING
COMPANIES. The obligation of Parent and Merging Companies to effect the Closing
is further subject to the satisfaction of the following conditions, any or all
of which may be waived on or prior to the Closing Date in whole or in part by
Parent and Merging Companies:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of CS and Merger Subs made hereunder shall be
true and correct in all respects, at and as of the Closing Date, except for (i)
changes permitted or contemplated by this Agreement, (ii) to the extent that any
representation or warranty is expressly made as of a specified date, in which
case such representation or warranty shall be true and correct only as of such
date and (iii) where failures to be true and correct would not, individually or
in the aggregate, have a CS Material Adverse Effect (PROVIDED, HOWEVER that in
determining whether a CS Material Adverse Effect has occurred, any
qualifications as to materiality included in such representation or warranty
shall be deemed not to apply). Parent and Merging Companies shall have received
a certificate to that effect dated the Closing Date and signed on behalf of CS
by an authorized officer of CS.
(b) AGREEMENTS. Each of CS and Merger Subs
shall have performed in all material respects all of its material obligations
required to be performed by it under this Agreement at or prior to the Closing
Date, and Parent and Merging Companies shall have received a certificate to that
effect dated the Closing Date and signed on behalf of CS by an authorized
officer of CS.
(c) CONSENTS AND APPROVALS. CS Required
Consents, if any, shall have been made or obtained.
(d) INDEMNITY. CS shall have executed an
indemnity agreement substantially in the form of Exhibit C hereto evidencing the
indemnification by CS of Parent and its Affiliates against all losses or
liabilities that may be incurred by any of them under the 10-1/4% Notes or the
2018 Debentures.
(e) AFFILIATE LOANS. The Affiliate Loans shall
have been made by CS to Merging Companies Affiliate and SBG.
(f) CUSTODY AGREEMENT; REGISTRATION RIGHTS
AGREEMENT. CS Affiliate shall have duly executed and delivered the Custody
Agreement, substantially in the form of Exhibit B hereto, and the Registration
rights Agreement, substantially in the form of Exhibit D hereto.
(g) SECTIONS 5.11 AND 5.12. CS shall have
taken all actions under Sections 5.11 and 5.12 required to be taken by it prior
to the Closing Date.
ARTICLE VII
SURVIVAL; GENERAL INDEMNIFICATION
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Notwithstanding any right of any party (whether or not
exercised) to investigate fully the accuracy of the representations and
warranties of the other party contained in this Agreement, Parent and Merging
Companies, on the one hand, and CS and Merger Subs, on the other hand, have the
right to rely fully upon the representations, warranties, covenants and
agreements of the other parties contained in this Agreement.
All such representations, warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing hereunder and all
representations and warranties shall terminate and expire (a) on the date that
is 18 months after the Closing Date, with respect to any General Claim based
upon, arising out of or otherwise in respect of any fact, circumstance or claim
of which the party claiming indemnification prior to that date shall not have
given notice to the other party; (b) (i) with respect to any Tax Claim, until
sixty (60) days after the expiration of the applicable statute of limitations;
and (ii) with respect to any ERISA Claim, until the expiration of the applicable
statute of limitations; and (c) two years after the Closing Date, with respect
to any Environmental Representation Claim based upon, arising out of or
otherwise in respect of any fact, circumstance or claim of which CS prior to
that date shall not have give notice to Parent.
As used herein:
"GENERAL CLAIM" means any claim (other than a Tax Claim, ERISA
Claim or an Environmental Representation Claim) based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any representation or
warranty contained in this Agreement.
"ENVIRONMENTAL REPRESENTATION CLAIM" means any claim based
upon, arising out of or otherwise in respect of any inaccuracy in or any breach
of any representation or warranty of Parent and Merging Companies contained in
Section 3.16 of this Agreement.
"ERISA CLAIM" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any representation or
warranty of Parent and Merging Companies contained in Section 3.10 of this
Agreement.
"TAX CLAIM" means any claim based upon, arising out of or
otherwise in respect of any inaccuracy in or any breach of any representation or
warranty of Parent and Merging Companies contained in Section 3.9 of this
Agreement related to Taxes.
7.2 INDEMNIFICATION BY CS AND MERGER SUBS. Subject to Sections
7.1 and 7.5 and except as otherwise provided in Article VIII and Sections 5.11
and 5.12, CS and Merger Subs hereby, jointly and severally, agree that they
shall indemnify, defend and hold harmless Parent and Merging Companies and, if
applicable, their respective directors, officers, employees, representatives,
advisors, agents and Affiliates (the "MERGING COMPANIES INDEMNIFIED PARTIES")
from, against and in respect of any and all damages, claims, losses, charges,
actions, suits, proceedings, deficiencies, Taxes, interest, penalties, and
reasonable costs and expenses (but not including, consequential, exemplary,
special and punitive damages and lost profits, other than such damages
awarded to any third party against an Indemnified Party) (collectively,
the "LOSSES") arising out of, relating to or resulting from, directly or
indirectly:
(a) any breach of any representation or
warranty made by CS contained in this Agreement;
(b) the breach in any material respect of any
covenant or agreement of CS or Merger Subs contained in this Agreement;
(c) except as (x) otherwise provided in Article
VIII and (y) for items as to which Parent and Merging Companies will indemnify
CS pursuant to Section 7.3, all auto liability, general liability, products
liability, workers' compensation and all obligations and liabilities of the
Beverage Companies; and
(d) the RC/Arby's Corporation Corporate
Guaranty relating to the Master Lease Agreement dated May 27, 1998, as amended
October 23, 1998, between RC Leasing, Inc. and Met Life Capital Limited
Partnership.
7.3 INDEMNIFICATION BY PARENT AND MERGING COMPANIES. Subject
to Sections 7.1 and 7.5, and except as otherwise provided in Article VIII,
Parent and Merging Companies jointly and severally hereby agree to indemnify,
defend and hold harmless CS and Merger Subs and, if applicable, their directors,
officers, employees, representatives, advisors, agents and Affiliates (other
than employees of the Beverage Companies) (the "CS INDEMNIFIED PARTIES") from,
against and in respect of any Losses arising out of, relating to or resulting
from, directly or indirectly:
(a) any breach of any representation or
warranty made by Parent or Merging Companies contained in this Agreement; or
(b) the breach in any material respect of any
covenant or agreement of Parent or Merging Companies contained in this
Agreement.
7.4 PROCEDURE FOR INDEMNIFICATION. Subject to Section 7.1, all
claims for indemnification under this Article VII or under Section 5.11 or 5.12
shall be asserted and resolved as follows:
(a) In the event that any claim or demand, or
other circumstance or state of facts which could give rise to any claim or
demand, for which an Indemnifying Party may be liable to an Indemnified Party
hereunder is asserted against or sought to be collected by a third party (an
"ASSERTED LIABILITY"), the Indemnified Party shall as soon as reasonably
possible notify the Indemnifying Party in writing of such Asserted Liability,
specifying the nature of such Asserted Liability (the "CLAIM NOTICE"); PROVIDED,
that no delay on the part of the Indemnified Party in giving any such Claim
Notice shall relieve the Indemnifying Party of any indemnification obligation
hereunder except to the extent that the Indemnifying Party is materially
prejudiced by such delay. The Indemnifying Party shall have thirty (30) days (or
less if the nature of the Asserted Liability requires) from its receipt of the
Claim Notice (the "NOTICE PERIOD") to notify the Indemnified Party whether the
Indemnifying Party desires, at the Indemnifying Party's sole cost and expense
and by counsel reasonably acceptable to the Indemnified Party to defend against
such Asserted Liability; PROVIDED, that (i) if, under applicable standards of
professional conduct a conflict on any significant issue between the
Indemnifying Party and any Indemnified Party exists in respect of such Asserted
Liability, or (ii) the Indemnifying Party shall reimburse the Indemnified Party
for the reasonable fees and expenses of one additional counsel (who shall be
reasonably acceptable to the Indemnifying Party). The Indemnifying Party shall
not, without the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld), consent to any settlement unless such
settlement (i) includes a complete release of the Indemnified Party and (ii)
does not require the Indemnified Party to make any payment or forego or take any
action. Notwithstanding the foregoing, the Indemnified Party shall have the
right to control, pay or settle any Asserted Liability which the Indemnifying
Party shall have undertaken to defend so long as the Indemnified Party shall
also waive any right to indemnification therefor by the Indemnifying Party. If
the Indemnifying Party undertakes to defend against such Asserted Liability, the
Indemnified Party shall cooperate fully with the Indemnifying Party and its
counsel in the investigation, defense and settlement thereof, but the
Indemnifying Party shall control the investigation, defense and settlement
thereof. If the Indemnified Party is controlling the defense of any Asserted
Liability in accordance with this Section 7.4 (i) at the request of the
Indemnified Party, the Indemnifying Party will at its own cost and expense
provide reasonable cooperation to the Indemnified Party and its counsel in
defending the Asserted Liability and (ii) the Indemnifying Party shall have the
right to participate in any such defense at its sole cost and expense, but the
Indemnified Party shall control the investigation, defense and settlement
thereof at the reasonable cost and expense of the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any Asserted
Liability effected without its prior written consent (which consent shall not be
unreasonably withheld).
(b) In the event that an Indemnified Party
should have a claim against the Indemnifying Party hereunder which does not
involve a claim or demand being asserted against or sought to be collected from
it by a third party, the Indemnified Party shall send a Claim Notice with
respect to such claim to the Indemnifying Party. The Indemnifying Party shall
have thirty (30) days from the date such Claim Notice is delivered during which
to notify the Indemnified Party in writing of any good faith objections it has
to the Indemnified Party's Claim Notice or claims for indemnification, setting
forth in reasonable detail each of the Indemnifying Party's objections thereto.
If the Indemnifying Party does deliver such written notice of objection within
such 30-day period, the Indemnifying Party and the Indemnified Party shall
attempt in good faith to resolve any such dispute within thirty (30) days of the
delivery by the Indemnifying Party of such written notice of objection.
(c) With respect to the liabilities for which
Parent shall be required to provide indemnification pursuant to Section
7.3(a)(i) resulting from a breach of Section 3.16, CS Indemnified Parties shall
cooperate with Parent, provide Parent as promptly as possible with all relevant
materials, information and data requested by Parent and shall grant Parent,
without charge, reasonable access to employees and premises of the Beverage
Companies, including the right to conduct environmental tests thereon and to
take samples therefrom.
(d) CS and Merger Subs acknowledge that except
for rights of specific performance expressly described herein, the
indemnification provisions contained in this Article VII and in Article VIII and
in Sections 5.11 and 5.12 constitute CS's and Merger Subs' sole remedy with
respect to any of the matters arising out of or in connection with this
Agreement, the Disclosure Schedule or any Exhibit hereto. Each of CS and Merger
Subs acknowledges and agrees that: (i) CS and its representatives have the
experience and knowledge to evaluate the business, financial condition, assets
and liabilities of the Beverage Companies; and (ii) in determining to effect the
Mergers and acquire Merging Companies as Subsidiaries, CS has made its own
investigation into, and based thereon CS has formed an independent judgment
concerning, Merging Companies and the underlying assets and liabilities of the
Beverage Companies (including the real property, fixtures and the tangible
personal property). CS and Merger Subs hereby waive, release and agree not to
make any claim or bring any contribution, cost recovery or other action against
Merging Companies, its Affiliates, and, if applicable, their respective
directors, officers, shareholders, partners, attorneys, accountants, agents
and employees and their heirs, successors and assigns, under the
Environmental Laws, common law, or any similar federal, state or local
environmental law or regulation now existing or hereafter enacted other than for
Losses which Parent is expressly required to indemnify CS under this Article
VII. CS and Merger Subs agree that they will not bring any such claim or action
under any Environmental Laws or any other environmental law or regulation which
seeks to allocate liabilities between CS and Merger Subs, on the one hand, and
Parent, on the other hand, in a different manner than as expressly set forth in
this Agreement
7.5 LIMITS ON INDEMNIFICATION. Notwithstanding anything in
this Agreement to the contrary, the right to indemnification under this Article
VII (but not Sections 5.11 and 5.12) shall from and after the Closing be subject
to the following terms:
(a)(i) except as provided in clause (ii) below,
Parent shall not be liable to CS Indemnified Parties for any Losses with respect
to the matters enumerated in Section 7.3(a) unless the Losses therefrom exceed
an aggregate amount equal to $10 million (the "THRESHOLD"), and then only for
such Losses in excess of $10 million and only up to an aggregate amount equal to
$200 million (the "PARENT CAP");
(ii) any Losses relating to breaches
of the representations and warranties contained in Sections 3.2, 3.3, 3.9 (but
only with respect to federal or state Income Taxes) and 3.14 shall not be
subject to the Threshold or the Parent Cap, and claims for indemnification as a
result of breaches of such sections may be made without regard to the Threshold
or the Parent Cap but shall not in the aggregate exceed the Merger
Consideration; and
(iii) no individual Loss will count
towards the Threshold unless such Loss equals or exceeds $200,000.
(b)(i) except as provided in clause (ii) below,
CS shall be liable to Parent Indemnified Parties for any Losses with respect to
the matters enumerated in Section 7.2(a) only up to an aggregate amount equal to
$200 million (the "CS CAP").
(ii) claims for indemnification as a
result of breaches of the representations and warranties contained in Section
4.2, and claims for indemnification that involve the recission, cancellation or
other unwinding of the transactions contemplated hereby, regardless of the
representation and warranty asserted to have been breached, shall not be subject
to the CS Cap, and may be made without regard thereto, but shall not in the
aggregate exceed the Merger Consideration.
7.6 CHARACTERIZATION OF INDEMNIFICATION PAYMENTS. All amounts
paid by CS, Merger Subs, Parent or Merging Companies, as the case may be, under
this Article VII or Article VIII shall be treated as adjustments to the Merger
Consideration and to the Purchase Price for all Tax purposes.
7.7 COMPUTATION OF LOSSES; DISPUTES. The amount of any Losses
or Taxes for which indemnification is provided under this Article VII or Article
VIII shall be reduced by (x) any related Tax benefits if and when actually
realized or received (but only after taking into account any Tax benefits
(including, without limitation, any net operating losses or other deductions and
any carryovers or carrybacks) to which the Indemnified Party would be entitled
without regard to such item), except to the extent such recovery has already
been taken into account in determining the amount of any such Losses or Taxes,
and (y) any insurance recovery if and when actually realized or received, in
each case in respect of such Losses or Taxes, and any recovery or
indemnification present under any agreement with respect to the sale of stock or
assets to a Beverage Company if and when actually realized or received. Any such
recovery shall be promptly repaid by the Indemnified Party to the Indemnifying
Party following the time at which such recovery is realized or received pursuant
to the previous sentence, minus all reasonably allocable costs, charges and
expenses incurred by the Indemnified Party in obtaining such recovery.
Notwithstanding the foregoing, if (x) the amount of Indemnifiable Losses or
Taxes for which the Indemnifying Party is obligated to indemnify the Indemnified
Party is reduced by any Tax benefit or insurance recovery in accordance with the
provisions of the previous sentence, and (y) the Indemnified Party subsequently
is required to repay the amount of any such Tax benefit or insurance recovery or
such Tax benefit or insurance recovery is disallowed, then the obligation of the
Indemnifying Party to indemnify with respect to such amounts shall be reinstated
immediately and such amounts shall be paid promptly to the Indemnified Party in
accor dance with the provisions of this Agreement. In determining the amount of
Losses or Taxes for purposes of Section 7.5(i), the reductions set forth in this
Section 7.7 shall be taken into account, and if such reductions reduce the
aggregate Losses or Taxes to an amount less than $10 million, all amounts
previously paid to the Indemnified Party shall be repaid to such Indemnifying
Party.
ARTICLE VIII
TAX MATTERS; TAX INDEMNIFICATION
8.1 TAX INDEMNITIES. (a) From and after the Closing Date,
Parent shall be responsible for, shall pay or cause to be paid, and shall
indemnify, defend and hold harmless CS and the Beverage Companies against and
reimburse CS and the Beverage Companies for: (i) any Tax with respect to any Tax
period or portion thereof that ends on or before the Closing Date for which any
Beverage Company may be liable under Section 1.1502-6 of the Treasury
Regulations (or any similar provision of state, local or foreign law); (ii) all
income Taxes (or Taxes based on net income) ("INCOME TAXES") of the Beverage
Companies with respect to any Tax period or portion thereof that ends on or
before the Closing Date in excess of $3,468,000 (after federal tax benefits
computed at 35% with respect to $2,815,000 of such amount);1/(iii) all Taxes of
the Beverage Companies other than Income Taxes with respect to any Tax period or
portion thereof that ends on or before the Closing Date and other than
Conveyance Taxes (as defined in Section 8.6) in excess of the sum of (x) the
aggregate accruals for current Taxes (other than Income Taxes) not yet due and
payable on the 3.7 Balance Sheets hereof, (y) accruals in the ordinary course of
business after July 2, 2000 and (z) $831,000 (after federal tax benefits
computed at 35% with respect to $650,000 of such amount)2/; (iv) any Income Tax
of the Beverage Companies with respect to any Tax period or portion thereof that
ends on or before the Closing Date, arising out of, resulting from or related
to, the elections under Sections 338 and 338(h)(10) of the Code provided for in
the Tax Agreement and; (v) any Tax of the Beverage Companies with respect to any
Tax period or portion thereof that ends on or before the Closing Date arising
out of, resulting from or related to the Restructuring; PROVIDED, HOWEVER, that
no indemnity shall be provided under this Agreement by Parent for any Tax
resulting from any transaction of the Beverage Companies occurring on the
Closing Date but after the Closing that is not in the ordinary course of
business or is not provided for in the Tax Agreement. At the election of Parent,
made at any time, 50% of any number set forth in this Section 8.1(a)(ii) may be
reduced (or increased) and a corresponding increase (or reduction) made to the
corresponding number set forth in Clause (z) of Section 8.1(a)(iii). Any
obligation for indemnity provided for in Section 8.1(a)(iii) shall be subject to
and limited by the provisions of Section 7.5 and shall be included as a Loss
under those provisions.
(b) From and after the Closing Date, CS and the Beverage
--------
[FN]
1/ $2,815,000 of reserves for income taxes and $653,000 of interest thereon.
2/ $650,000 of reserves for other taxes plus $181,000 of interest thereon.
Companies shall, jointly and severally, be responsible for, shall pay or cause
to be paid, and shall indemnify, defend and hold harmless Merging Companies and
their Affiliates against and reimburse Parent and its Affiliates for all Taxes
Parent and its Affiliates may at any time suffer or incur, or become subject to,
as a result of or in connection with the Beverage Companies that are not subject
to indemnification pursuant to paragraph (a) of this Section 8.1 (other than
Conveyance Taxes), including, but not limited to, Taxes resulting from any
transaction of the Beverage Companies occurring on the Closing Date but after
the Closing that is not in the ordinary course of business or is not provided
for in the Tax Agreement. CS agrees to comply with all provisions of Article
VIII of the Stock Purchase Agreement ("QUAKER AGREEMENT") between the Quaker
Oats Company ("QUAKER") and Parent, dated as of March 27, 1997 required for
Parent to obtain indemnification for Taxes from Quaker pursuant to Article VIII
of the Quaker Agreement and promptly to pay over to Parent all taxes received by
or credited to a Beverage Company which Parent is obligated to pay to Quaker
pursuant to the Quaker Agreement; PROVIDED, HOWEVER, no such payment shall
reduce Parent's indemnification obligation to CS hereunder.
(c) Payment by an indemnitor of any amount due
to an indemnitee under this Section 8.1 shall be made within 10 days following
written notice by the indemnitee that payment of such amounts to the appropriate
Tax authority is due by the indemnitee, provided that the indemnitor shall not
be required to make any payment earlier than five days before it is due to the
appropriate Tax authority. In the case of a tax that is contested in accordance
with the provisions of Section 8.3, payment of the Tax to the appropriate Tax
authority will not be considered to be due earlier than the date a final
determination to such effect is made by such Tax authority or a court.
(d) For purposes of this Agreement (including
without limitation determining Parent's indemnification obligations under
Section 8.1(a)), in the case of any Tax that is imposed on a periodic basis and
is payable for a period that begins before the Closing Date and ends after the
Closing Date, the portion of such Taxes payable for the period ending on the
Closing Date shall be (i) in the case of any Tax other than a Tax based upon or
measured by income, the amount of such Tax for the entire period multiplied by a
fraction, the numerator of which is the number of days in the period ending on
the Closing Date and the denominator of which is the number of days in the
entire period; PROVIDED, HOWEVER, that (x) if any property, asset or other right
of a Beverage Company is sold or otherwise transferred prior to the Closing
Date, then ad valorem Taxes pertaining to such property, asset or other right
shall be attributed entirely to the pre-Closing period, and (y) if any property,
asset or other right of a Beverage Company is purchased or otherwise acquired
after the Closing Date, then ad valorem Taxes pertaining to such property,
asset or other right shall be attributed entirely to the post-Closing period,
and (ii) in the case of any Tax based upon or measured by income, the amount
which would be payable if the taxable year ended as of the close of the
Closing Date, PROVIDED, HOWEVER, that any Tax resulting from the departure
of a Beverage Company from an affiliated, combined or consolidated group in
which it was a member in a pre-Closing period (resulting from the
triggering into income of deferred intercompany transactions under Section
1.1502-13 of the Treasury regulations or excess loss accounts under Section
1.1502-19 of the Treasury regulations or otherwise) shall be allocated to a
pre-Closing period. In the case of any Tax based upon or measured by capital
(including net worth or long-term debt) or intangibles, any amount thereof
required to be allocated under this Section 8.1(d) shall be computed by
reference to the level of such items on the Closing Date; PROVIDED, HOWEVER,
that (x) if any property, asset or other right of a Beverage Company is sold or
otherwise transferred prior to the Closing Date, then any such Tax computed by
reference to such property, asset or other right shall be attributed entirely to
the pre-Closing period, and (y) if any property, asset or other right of a
Beverage Company is purchased or otherwise acquired after the Closing Date, then
any such Tax computed by reference to such property, asset or other right shall
be attributed entirely to the post-Closing period.
8.2 REFUNDS AND TAX BENEFITS. Parent shall be entitled to any
refund or credit of Taxes (including any interest paid or credited with respect
thereto), and CS shall promptly pay to Parent any such refund or credit of Taxes
(including any interest paid or credited with respect thereto) received by or
credited to CS or the Beverage Companies relating to Taxes for which Parent is
responsible under Section 8.1(a) hereof, net of any costs or expenses incurred
by CS or the Beverage Companies with respect to such refund or credit. In the
event that any refund or credit of Taxes for which a payment has been made to
Parent pursuant to this Section 8.2 is subsequently redeemed or disallowed,
Parent shall indemnify, defend and hold harmless the Beverage Companies against
and reimburse the Beverage Companies for any Tax liability, including interest
and penalties, assessed against such Beverage Company by reason of the reduction
or disallowance; PROVIDED, HOWEVER, that any repayment of any refund or credit
of Taxes shall be limited to the net amount of such refund received by the
Parent pursuant to the preceding sentence. Without limiting the generality of
the preceding sentence, any such refund or other benefit realized by any
Beverage Company in a post-Closing period that results from the carryforward of
any net operating loss or capital loss or other Tax attributes (but not
including overpayments or prepayments of Tax attributable to a period or portion
thereof ending on or before the Closing) of a Beverage Company in any Tax period
or portion thereof ending on or before the Closing Date shall be the property of
such Beverage Company and shall be retained by such Beverage Company.
8.3 CONTESTS. (a) After the Closing, the party first receiving
notice shall promptly notify the other party in writing of any demand or claim
on the first party from any Tax authority or other party with respect to Taxes
for which the other party is liable pursuant to Section 8.1. Such notice shall
contain factual information (to the extent known) describing the asserted Tax
liability in reasonable detail and shall include copies of any notice or other
document received from any Tax authority in respect of any such asserted Tax
liability. If such notifying party fails to give the other party prompt notice
of an asserted Tax liability as required by this Section 8.3, then (a) if the
other party is precluded by the failure to give prompt notice from contesting
the asserted Tax liability in both the administrative and judicial forums, then
such notifying party shall have sole responsibility for such Tax liability or
(b) if the other party is not precluded from contesting but such failure to give
prompt notice results in detriment to the other party, then any amount that the
other party is otherwise required to pay to such notifying party pursuant to
Section 8.1 with respect to such liability shall be reduced by the amount of
such detriment.
(b) Parent, at its own expense, shall control
the conduct to a final determination, through counsel of its own choosing at its
own expense, of any audit, claim for refund and administrative or judicial
proceeding involving any asserted liability with respect to which indemnity may
be sought by CS under Section 8.1(a) (any such audit, claim for refund or
proceeding relating to an asserted Tax liability is referred to herein as a
"CONTEST"). Parent shall have all rights to settle, compromise and/or concede
such asserted liability and CS shall cooperate, and shall cause a Beverage
Company or any of its successors to cooperate, in each phase of such Contest
PROVIDED, HOWEVER, that Parent shall not settle, compromise or concede any such
liability that is reasonably likely to result in a cost to CS or its Affiliates
in excess of $100,000.00 without CS's consent, not to be unreasonably withheld.
Parent shall inform CS of all material developments and events relating to such
Contest (including, without limitation, providing to CS copies of all written
materials relating to such Contest reasonably requested by CS), and CS and its
authorized representatives shall be entitled, at the expense of CS, to attend,
but not participate in or control, all conferences, meetings and proceedings
relating to such Contest.
8.4 PREPARATION OF TAX RETURNS. Except as provided in the Tax
Agreement, Parent shall prepare and file all Tax Returns with respect to Taxes
for which Parent has agreed to indemnify CS in Section 8.1(a) (other than Taxes
described in Section 8.1(a)(iii)) for any Tax period ending on or prior to the
Closing Date and which are required to be filed after the Closing Date on a
basis consistent with prior tax years unless different treatment is required by
applicable law. Without limitation to the obligations of Parent under Section
8.1(a), Parent shall pay any Taxes shown to be due on such Tax Returns subject
to the obligations of CS under Section 8.1(b). CS shall prepare and file
all Tax Returns with respect to the Beverage Companies other than those which
Parent is to prepare pursuant to the first sentence of this Section 8.4.
Without limitation to the obligations of CS under Section 8.1(b), CS shall pay
any Taxes shown to be due on such Tax Returns subject to the obligations
of Parent under Section 8.1(a). The parties agree that if a Beverage Company
is permitted, but not required, under applicable state, local or foreign
income or franchise tax laws to treat the Closing Date as the last day of a Tax
period, they will treat the Tax period as ending on the Closing Date. CS will
deliver to Parent for its review and approval a complete copy of each Tax Return
required to be filed by CS or a Beverage Company under this Section 8.4 for
Tax periods that end on or prior to the Closing Date or that include the
Closing Date redacted as appropriate to remove information about
non-Beverage Companies, and any amendments to such Tax Return, accompanied
by an allocation between the pre-Closing period and the post-Closing period of
any Taxes shown to be due on such Tax Return at least 45 days prior to the date
such Tax Return is to be filed with the appropriate Tax authority. Within 20
days after the date of receipt by Parent of such Tax Return and allocation
Parent may deliver to CS a written request for changes to such Tax Return or
allocation. If CS and Parent have been unable to resolve their differences
within 10 days after CS has received Parent's written request for changes to
such Return and allocation, then any disputed issues shall be immediately
submitted to an Independent Accounting Firm to resolve (within 10 days after
receipt of such disputed issues) in a final binding manner after hearing the
views of both parties. The fees and expenses of the Independent Accounting Firm
shall be shared equally between Parent and CS. In the case of a Tax Return that
includes a period that begins on or before the Closing Date and ends after the
Closing Date, not later than (i) five Business Days before the due date
(including any extension thereof) for Taxes with respect to such Tax Return or
(ii) in the event of a dispute, five Business Days after the resolution thereof
either by mutual agreement of the parties or by a determination of an
Independent Accounting Firm, without prejudice to the obligations of the parties
under Section 8.1, each party shall pay the portion of the Taxes set forth on
such Tax Return that are allocable to the portion of the period for which such
party bears responsibility, after giving effect to any agreement of the parties
or any determination by the Independent Accounting Firm, net of any payments
made prior to the Closing Date in respect of such Taxes, whether as estimated
Taxes or otherwise.
8.5 COOPERATION AND EXCHANGE OF INFORMATION. Parent, CS and
the Beverage Companies will provide each other with such cooperation and
information as any of them reasonably may request of another in filing any Tax
Return, amended Tax Return or claim for refund, determining a liability for
Taxes or a right to a refund of Taxes or participating in or conducting any
audit or other proceeding in respect of Taxes. Such cooperation and information
shall include the preparation of tax packages for Parent in substantially the
same form and at the same time in which such information customarily was
provided to Parent in previous Tax periods and providing copies of relevant
Tax Returns or portions thereof, together with accompanying schedules and
related work papers and comments relating to rulings or other determinations by
Tax authorities. Each such party shall make its employees available on a
mutually convenient basis to provide explanations of any documents or
information provided hereunder. Subject to the preceding sentence, each
party required to file Tax Returns pursuant to this Agreement shall bear all
costs of filing such Tax Returns. Each such party will retain all Tax Returns,
schedules and work papers and all material records or other documents
relating to Tax matters of the Beverage Companies for their Tax period first
ending after the Closing Date and for all prior Tax periods until the
later of (a) the expiration of the statute of limitations of the Tax periods to
which such Tax Returns and other documents relate, or (b) eight years following
the due date for such Tax Returns. Any information obtained under this Section
8.5 shall be kept confidential, except as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
an audit or other proceeding. CS further agrees to comply, and to cause the
Beverage Companies to comply, with the terms of IRS record retention
requirements, including any record retention agreement entered into between the
IRS and Parent previously furnished to CS.
8.6 CONVEYANCE TAXES. Parent and CS shall each assume
liability for, indemnify each other and their Affiliates against and pay
one-half of all sales, value added, transfer, stamp, registration, real property
transfer or gains and similar Taxes ("CONVEYANCE TAXES") incurred as a result of
the transactions contemplated hereby (other than Taxes for which Parent has an
indemnification obligation under Section 8.1(a)(v)), and shall jointly file all
required change of ownership and similar statements.
8.7 FIRPTA CERTIFICATES. Parent and each of its Affiliates
shall deliver to CS on the Closing Date a duly completed and executed
certification of non-foreign status pursuant to Section 1.1445-2(b)(2) of the
Treasury regulations.
8.8 MISCELLANEOUS. (a) Except as expressly provided otherwise
and except for the representations contained in Section 3.9 of this Agreement
and the Tax Agreement, this Article VIII shall be the sole provision governing
Tax matters and indemnities therefor under this Agreement.
(b) For purposes of this Article VIII, all
references to CS or Parent include successors thereto.
(c) Except as provided in the Tax Agreement,
neither CS, its Affiliates nor any foreign Beverage Company shall take any
action which may result in a distribution with respect to the stock of a foreign
Beverage Company prior to the last day of the first U.S. taxable year of such
foreign Beverage Company which ends after the Closing Date.
(d) Except as provided in the Tax Agreement,
CS, its Affiliates and any Beverage Company shall not take any action or enter
into any transaction not in the ordinary course of business which may result in
an amount included in the gross income of Parent pursuant to Section 951 or
Section 956 of the Code and the Treasury regulations thereunder.
(e) The Tax Agreement and, except as expressly
provided otherwise, the indemnification provided for in this Article VIII shall
be the sole and exclusive remedy for any claim in respect of Taxes and the
provisions of Article VII (other than Sections 7.6 and 7.7, claims based on a
breach of Section 3.9, and as otherwise set forth in this Article VIII) shall
not apply to such claims.
(f) Any claim for indemnity under this Article
VIII may be made at any time prior to sixty (60) days after the expiration of
the applicable Tax statute of limitations with respect to the relevant taxable
period (including all periods of extension, whether automatic or permissive).
(g) Any and all Tax allocation or sharing
agreements or other agreements or arrangements relating to Tax matters between
any Beverage Company, on the one hand, and the Parent or any of its Affiliates,
on the other hand, shall be terminated with respect to such Beverage Company as
of the day before the Closing Date and, from and after the Closing Date, no
Beverage Company shall be obligated to make any payment pursuant to any such
agreement or arrangement for any past or future period.
ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by written agreement of CS and Parent;
(b) by either CS or Parent by giving written
notice of such termination to the other (i) if the Closing shall not have
occurred on or prior to February 28, 2001; (PROVIDED, HOWEVER, that if a second
request is necessary under the HSR Act such date shall be extended to April 30,
2001); PROVIDED, HOWEVER, that no party whose breach hereof has been the cause
of the failure to close may terminate this Agreement under this Section 9.1(b),
(ii) if any United States federal or state court of competent jurisdiction shall
have issued an order, injunction or other decree or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting or making
illegal the consummation of the Merger pursuant to the terms of this Agreement
and such order, injunction, decree or ruling or other action shall have become
final and nonappealable; and
(c) by Parent in accordance with Section
5.12(b) upon payment to CS of the Termination Fee.
9.2 EFFECT OF TERMINATION. In the event of termination by
Parent or CS pursuant to Section 9.1, written notice thereof shall promptly be
given to the other parties and, except as otherwise provided herein, the
transactions contemplated by this Agreement shall be terminated and become void
and have no effect, without further action by the other party, other than the
provisions of the last sentence of Section 5.2 and Article XI. Nothing in this
Section 9.2 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement.
9.3 TERMINATION FEE. Upon termination by Parent of this
Agreement pursuant to Section 9.1(c), Parent shall pay CS an amount (the
"TERMINATION FEE") in cash equal to $45 million.
ARTICLE X
NONCOMPETITION
10.1 NONCOMPETITION PERIOD. Parent and Merging Companies will,
and will cause their respective Subsidiaries for a period of three (3) years
from the Closing, to, refrain from, either alone or in conjunction with any
other Person, or directly or indirectly:
(i) soliciting for employment any Person who at
that time or within the preceding 45 days is an employee of any Beverage
Company; PROVIDED, HOWEVER, that nothing in this Article X shall prohibit
Parent, Merging Companies or their Subsidiaries (the "RESTRICTED PARTIES") from
discussions or negotiations with any such Person who (i) initiated such
discussions with any Restricted Party, or (ii) responded to a general
solicitation or advertisement regarding employment by a Restricted Party that is
directed to the general public and not solely to such Person;
(ii) causing or attempting to cause any client,
customer or supplier of any Beverage Company to terminate or reduce its business
with such Beverage Company; or
(iii) engaging in the manufacture, distribution
and sale of premium beverages or the manufacture of soft drink concentrates (a
"COMPETING BUSINESS") anywhere within the world; PROVIDED HOWEVER, that nothing
contained in this Section 10.1 shall prohibit or otherwise restrict a Restricted
Party from:
(x) acquiring, investing in, owning
or otherwise having an interest in securities of any Person that
engages in a Competing Business if either (x) the Restricted Parties do
not, in the aggregate, own more than five percent of any class of
equity securities of such Person that are registered under the Exchange
Act or (y) if such Person does not have a class of equity securities
that are registered under the Exchange Act, the Restricted Parties do
not, in the aggregate, own more than five percent of any class of
equity securities of such Person;
(y) acquiring, investing in,
controlling, owning or otherwise having an interest in a business as
long as not more than 10% of such business's sales and profits are
derived from operations which are a Competing Business.
10.2 MODIFICATION OF NONCOMPETITION COVENANT. The parties
hereto recognize that the laws and public policies of the various States of the
United States may differ as to the validity and enforceability of covenants
similar to those set forth in this Article X. It is the intention of the parties
that the provisions of this Article X be enforced to the fullest extent
permissible under the laws and policies of each jurisdiction in which
enforcement may be sought, and that the unenforceability (or the modification to
conform to such laws or policies) of any provisions of this Article X shall not
render unenforceable, or impair, the remainder of the provisions of this Article
X. Accordingly, if at the time of enforcement of any provision of this Article
X, a court of competent jurisdiction holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree
that the maximum period, scope, or geographic area reasonable under such
circumstances will be substituted for the stated period, scope or geographical
area and that such court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and geographical area permitted by
law.
10.3 EQUITABLE REMEDY. The parties hereto acknowledge and
agree that any remedy at law for any breach of the provisions of this Article X
would be inadequate, and Parent and Merging Companies hereby consent to the
granting by any court of competent jurisdiction of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved, in
order that the breach or threatened breach of such provisions may be effectively
restrained.
ARTICLE XI
GENERAL PROVISIONS
11.1 EXTENSION; WAIVER. The parties hereto, by action taken or
authorized by their respective boards of directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
No waiver of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion.
11.2 AMENDMENT. This Agreement may be amended, modified or
supplemented only by written agreement of CS, Merger Subs, Parent and Merging
Companies at any time prior to the Closing Date with respect to any of the terms
contained herein.
11.3 EXPENSES. Each of the parties hereto shall pay the fees
and expenses of its respective counsel, accountants and other experts and shall
pay all other costs and expenses incurred by it in connection with the
negotiation, preparation and execution of this Agreement and the consummation of
the transactions contemplated hereby; PROVIDED, HOWEVER, that the fees and
expenses of Merging Companies and the other Beverage Companies in connection
with the negotiation and consummation of this Agreement shall be paid by Parent.
11.4 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to choice of law principles, including all matters of construction,
validity and performance.
11.5 NOTICES. Notices, requests, permissions, waivers, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if signed by the respective persons giving them (in the case of
any corporation the signature shall be by an officer thereof) and delivered by
hand or by telecopy or on the date of receipt indicated on the return receipt if
mailed (registered or certified, return receipt requested, properly addressed
and postage prepaid):
If to Parent or, prior to the Closing, any Merging
Company, to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
and
If to CS or any Merger Sub, to:
Cadbury Schweppes plc
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0XX
Attention: Company Secretary
Facsimile: (000) 00 000 000 0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Such names and addresses may be changed by notice given in accordance with this
Section 11.5.
11.6 ENTIRE AGREEMENT. This Agreement, together with all
schedules, exhibits, annexes, certificates, instruments and agreements delivered
pursuant hereto and the Confidentiality Agreement contain the entire
understanding of the parties hereto and thereto with respect to the subject
matter contained herein and therein, and supersede and cancel all prior
agreements, negotiations, correspondence, undertakings and communications of the
parties, oral or written, respecting such subject matter. There are no
restrictions, promises, representations, warranties, agreements or undertakings
of any party hereto with respect to the transactions contemplated by this
Agreement other than those set forth herein or made hereunder.
11.7 DISCLOSURE SCHEDULE. The Disclosure Schedule is
incorporated into this Agreement by reference and made a part hereof.
11.8 HEADINGS; REFERENCES. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles," "Sections" or "Exhibits" shall be deemed to be
references to Articles or Sections hereof or Exhibits hereto unless otherwise
indicated.
11.9 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and each counterpart shall be deemed to be an original, but
all of which shall constitute one and the same original.
11.10 PARTIES IN INTEREST; ASSIGNMENT. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties; PROVIDED (i) that the rights, interests and obligations of RCAC
hereunder may be assigned to New LLC in connection with a merger of RCAC with
and into New LLC and (ii) CS may assign any or all of its rights, interests and
obligations hereunder (including, without limitation, its rights under Article
II) to any Subsidiary of CS organized in the United States. Subject to the
preceding sentence and Section 11.11, this Agreement shall inure to the benefit
of and be binding upon Parent, Merging Companies and CS and shall inure to the
sole benefit of Parent, Merging Companies and CS and their respective successors
and permitted assigns. No assignment shall release the assignor from its
obligations under this Agreement, unless otherwise agreed to in writing by all
parties hereto.
11.11 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies under or by reason of this Agreement, other than Persons expressly
entitled to indemnification under Section 5.10(d) and Article VII hereof.
11.12 SEVERABILITY; ENFORCEMENT. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, each party agrees that a
court of competent jurisdiction may enforce such restriction to the maximum
extent permitted by law, and each party hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
11.13 CONSENT TO JURISDICTION. Each party hereto hereby
irrevocably and unconditionally (i) submits, for itself and its property, to the
exclusive jurisdiction of any Federal Court sitting in New York County of the
State of New York in any suit, action or proceeding arising out of or relating
to this Agreement or for recognition or enforcement of any judgment rendered in
any such suit, action or proceeding, (ii) waives any objection which it may now
or hereafter have to the laying of venue of any such suit, action or proceeding
in any such court, including any claim that any such suit, action or proceeding
has been brought in an inconvenient forum and (iii) waives all rights to a trial
by jury in any such suit, action or proceeding. Any and all service of process
and any other notice and any such action or proceeding shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed
receipt, postage prepaid, mailed to such party as provided herein. Nothing
herein contained shall be deemed to affect the right of any party to serve
process in any manner permitted by law.
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
CADBURY SCHWEPPES PLC
By:/s/ Xxxxx X. Xxxx
------------------------
Name: Xxxxx X. Xxxx
Title: Director, Merger
& Acquisitions
SNAPPLE BEVERAGE GROUP, INC.
By: /s/ Xxxxxx Xxxxx,
Xxxxx X. May
------------------------
Name: Xxxxxx Xxxxx,
Xxxxx X. May
Title: Chairman, Vice
Chairman
ROYAL CROWN COMPANY, INC.
By: /s/ Xxxxxx Xxxxx,
Xxxxx X. May
-----------------------
Name: Xxxxxx Xxxxx,
Xxxxx X. May
Title:Chairman, Vice
Chairman
TRIARC COMPANIES, INC.
By: /s/ Xxxxxx Xxxxx,
Xxxxx X. May
-----------------------
Name:Xxxxxx Xxxxx,
Xxxxx X. May
Title: Chairman & CEO,
President & COO
CSN ACQUISITION INC.
By: /s/ Xxxxx X. Xxxx
-----------------------
Name: Xxxxx X. Xxxx
Title: President
CRC ACQUISITION INC.
By: /s/ Xxxxx X. Xxxx
-----------------------
Name: Xxxxx X. Xxxx
Title: President
EXHIBIT A
FORM OF PROMISSORY NOTE
$----------------------------------, 2000
SECTION 1. GENERAL.
FOR VALUE RECEIVED, TRIARC COMPANIES, INC. (the "BORROWER")
hereby unconditionally promises to pay to [CS Entity] (the "LENDER"), the
principal sum of U.S. $[_________] (U.S. ____________Dollars) together with
interest on the unpaid principal amount from time to time outstanding until such
amount is repaid in full. The principal amount of and the interest on this Note
shall be due and payable at such time and in such amounts as is set forth
herein.
This promissory note (this "NOTE") is being entered into
pursuant to the Agreement and Plan of Merger, dated as of September 15, 2000, by
and among Lender, Borrower, CSN Acquisition Inc., CRC Acquisition Inc., Snapple
Beverage Group, Inc. and Royal Crown Company, Inc. as the same may be amended,
modified or supplemented from time to time (the "MERGER AGREEMENT"), and is
subject in all respects to the provisions of the Merger Agreement. All
capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Merger Agreement.
SECTION 2. PAYMENT TERMS.
2.1 INTEREST. Interest on this Note shall accrue on the
outstanding principal amount from time to time outstanding, from, but excluding,
the date hereof to, but excluding, the date such amount is repaid in full at the
prime rate of interest as appearing in The Wall Street Journal on the date of
this Note. From the date hereof until the date this Note is paid in full, the
interest on this Note shall be payable quarterly in arrears commencing three
months after the date hereof and continuing until such time as the entire
principal amount, and all accrued and unpaid interest thereon, shall have been
paid in full.
2.2 MATURITY; METHOD OF PAYMENT. The principal amount of this
Note, together with interest accrued and unpaid thereon, shall be paid in
immediately available funds to the Lender on the date of this Note to the
account(s) designated in writing by the Lender to the Borrower.
SECTION 3. USE OF PROCEEDS. The proceeds of the loan represented by this Note
shall be used as provided in the Merger Agreement.
SECTION 4. DEFAULT.
3.1 Any of the following events shall constitute an event of
default hereunder:
(a)the Borrower shall not repay the principal amount due when
due at its stated maturity; or
(b) the Borrower shall default in the payment of interest when
due, and such default shall continue for a period of ten (10) days; or
(c) the Borrower shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to authorize any of the
foregoing; or
(d) an involuntary case or other proceeding shall be commenced
against the Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against the Borrower under the Federal bankruptcy laws as now
or hereafter in effect.
If an event of default shall occur and be continuing, upon notice from the
Lender to the Borrower (except that in the case of an event of default described
in clause (c) or (d), this Note shall be deemed to have been declared to be in
default without any notice or other action by the Lender), and the
then-outstanding principal amount hereof shall be immediately due and payable.
SECTION 5. PAYMENTS. All payments and prepayments of principal of and interest
on this Note shall be made in lawful money of the United States of America.
SECTION 6. NOTICE. Any notices or other communications required or permitted
hereunder shall be made in the manner set forth in the Merger Agreement.
SECTION 7. GOVERNING LAW.
This Note is made and delivered in and shall be governed by,
and construed and interpreted in accordance with, the laws of the State of New
York applicable to agreements made and to be wholly performed in such state,
without regard to the principles of conflicts of law thereof, and any suit
hereunder may be brought in, and the parties agree to the jurisdiction of, any
federal or state court in the State of New York.
IN WITNESS WHEREOF, this Note has been executed as of
_____________ __, 2000.
TRIARC COMPANIES, INC.
By:
---------------------------------
Name:
Title:
EXHIBIT B
FORM OF CUSTODY AGREEMENT
CUSTODY AGREEMENT, dated as of____________ 2000, among [CS
ENTITY], a [Delaware] corporation ("CS"), TRIARC COMPANIES, lNC., a Delaware
corporation ("Parent"), and American Stock Transfer & Trust Company, as
custodian (the "CUSTODIAN").
WHEREAS, Parent, Cadbury Schweppes plc ("CS_Parent"), CSN
Acquisition Inc., CRC Acquisition Inc., Snapple Beverage Group, Inc. And Royal
Crown Company, Inc., have entered into an Agreement and Plan of Merger dated
as
of September 15, 2000 (such agreement as it may be amended, supplemented or
otherwise modified from time to time, the "MERGER AGREEMENT")
WHEREAS, pursuant to the Merger Agreement, CS Parent has
agreed to take all actions as shall be necessary to assume all of the
obligations of Parent under the Indenture, dated as of February 9, 1998, among
Parent and the Bank of New York, as trustee (such agreement as it may be
amended, supplemented or otherwise modified from time to time, the "PARENT
INDENTURE"), and under the Zero Coupon Convertible Subordinated Debentures due
2018 that were issued pursuant to the Parent Indenture (the "2018 DEBENTURES")
WHEREAS, in accordance with the ISuiwlemental IndentureJ, CS
has agreed to assume all of the Parent's obligations under the Parent Indenture
and the 2018 Debentures;
WHEREAS, the Parent Indenture and the 2018 Debentures provide
that the 2018 Debentures are convertible into shares of the Parent's Common
Stock, all as provided in the Parent Indenture and the 2018 Debentures;
WHEREAS, as an inducement for CS to undertake the obligations
contemplated by Section 5.11 of the Merger Agreement and to enter into the
Supplemental Indenture and to enable CS to comply with the conversion provisions
of the Parent Indenture and the 2018 Debentures, Parent has agreed to enter into
this Agreement and to deposit the Convertible Shares (as defined below) with the
Custodian;
WHEREAS, the parties hereto desire the Custodian to receive,
hold and transfer the Convertible Shares in accordance with the terms,
conditions and provisions of this Agreement, and the Custodian is willing to do
so;
WHEREAS, it is the intention of the parties that the
Convertible Shares and the Substitute Securities, if any, not be considered
outstanding for any purpose until the shares are delivered to a Converting
Holder (as defined below) as provided herein; and
----------
The U.S. entity which will assume the 2018 Debentures and the parent
Indenture.
WHEREAS, the execution and delivery of this Agreement is a
condition to the consummation of the transactions contemplated by the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties agree as follows:
1. DELIVERY OF CONVERTIBLE SHARES. Concurrent with the
execution of this Agreement, the Custodian will segregate and hold for the
benefit of the holders of the 2018 Debentures a certificate (the "ORIGINAL
CERTIFICATE") representing 3,407,400 treasury shares (the "CONVERTIBLE SHARES")
of the Parent's Class A Common Stock, par value $.l0 per share ("COMMON STOCK").
Parent represents and warrants to CS and the Custodian that the Convertible
Shares are duly authorized and that, upon delivery by the Converting Holder of
the related 2018 Debentures being converted and payment with respect thereto in
accordance with this Agreement, the Convertible Shares delivered to such
Converting Holder will be validly issued and outstanding, fully paid and
nonassessable and shall be free from all pre-emptive rights and free of all
liens or other adverse rights other than those created by the Purchaser or a
Converting Holder.
2. DUTIES OF THE CUSTODIAN. The Custodian is hereby authorized
and directed (a) to hold in custody the Original Certificate and the Replacement
Certificate (as defined below), (b) from time to time in accordance with Section
3 of this agreement and provided CS has complied with Section 4 hereof, in its
capacity as the Parent's transfer agent to issue (i) a stock certificate or
certificates to a Converting Holder representing the Convertible Shares being
acquired by such Converting Holder upon conversion of those of its 2018
Debentures properly surrendered for conversion and (ii) a new certificate (the
"REPLACEMENT CERTIFICATE") representing the aggregate remaining Convertible
Shares not then being converted by Converting Holders and (c) in accordance with
Section 7 of this Agreement, on the next business day after the Termination Date
(as defined below), to return to the Parent the Original Certificate or
Replacement Certificate then held by the Custodian representing the Convertible
Shares that have not been issued to holders of the 2018 Debentures on or prior
to the Termination Date.
3. CONVERSION. (a) If, in accordance with the terms of the
Parent Indenture and the 2018 Debentures, any holder of the 2018 Debentures (a
"CONVERTING HOLDER") exercises its right to convert one or more of such
Converting Holder's 2018 Debentures for Common Stock, CS shall deliver to
Custodian and Parent a copy of the conversion notice (in the form attached to
the Supplemental Indenture) executed by the Converting Holder, a copy of the
2018 Debenture (marked "Copy") tendered for conversion and, if applicable,
evidence that the Converting Holder has complied with clauses (3) and (4) of the
third paragraph of Section 9 of the 2018 Debenture. Unless a Blackout (as
defined below) is then in effect, within two business days after receipt of such
notice, Custodian, in its capacity as Parent's transfer agent, shall, subject to
compliance by CS with the terms of Section 4 hereof: (a) issue and deliver to
the Converting Holder a certificate representing the number of whole shares of
Common Stock into which the Converting Holder has requested the surrendered 2018
Debentures be converted under the terms of the Parent Indenture and the 2018
Debentures and a check in the amount required to pay for any fractional shares;
and (b) cancel the Original Certificate or the then-current Replacement
Certificate and prepare and hold a Replacement Certificate for the number of
Convertible Shares remaining after giving effect to such conversion. Upon the
issuance of the Common Stock to the Converting Holder, CS, the Parent and
the Custodian shall take all action necessary to cause the 2018 Debentures or
portion thereof that were surrendered by such Converting Holder to be cancelled.
4. DELIVERY OF FUNDS BY CS. As a condition to the release to a
Converting Holder of any certificate representing Convertible Shares, CS shall
concurrently therewith deliver to Custodian immediately available funds equal to
the accreted value, through the date of conversion, of all 2018 Debentures being
then converted (the "ACCRETED VALUE"). Upon receipt of such funds and such other
documents as are required pursuant to Section 3 above, Custodian is authorized
to deliver the Convertible Shares to the Converting Holder (plus such funds as
may be necessary to pay for any fractional shares), and shall immediately
deliver the Accreted Value (less any funds necessary to pay the Converting
Holders for any fractional shares) to Parent.
5. SHELF REGISTRATION; BLACKOUTS.
(a) Pursuant to the Registration Rights Agreement, dated
_____, 2000, between Parent and CS (the "Registration Rights Agreement"), Parent
agreed to prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement for an offering to be made on a continuous basis
pursuant to Rule 415 of the Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder, registering the delivery from
time to time on behalf of CS Entity of Convertible Shares to Converting Holders
upon conversion of 2018 Debentures.
(b) If Parent shall deliver to CS and the Custodian a
certificate in writing executed by an officer thereof that the use of the
Prospectus included in the Registration Statement (each such term as defined in
the Registration Rights Agreement) covering the delivery of Convertible Shares
to Converting Holders upon conversion of 2018 Debentures has been suspended,
upon receipt of such certificate, the Custodian may not deliver any Convertible
Shares to Converting Holders pursuant to this Agreement until the Custodian is
advised in writing by Parent that use of the Prospectus may be resumed (a
"Blackout"). Parent has agreed with CS Entity that it will not be entitled to
exercise its right to effect a Blackout except as follows: Parent may effect a
Blackout for a period not to exceed 30 days in any three-month period, or not to
exceed an aggregate of 90 days in any 12-month period. Parent is not permitted
to extend a Blackout beyond such 30-day period.
6. CONVERSION RATE.
(a) At the Closing Date (as defined in the Merger Agreement),
the Convertible Shares do and shall represent the maximum number of shares of
Common Stock into which the 2018 Debentures are convertible based on a
conversion rate of 9.465 shares of Common Stock per $1,000 aggregate principal
amount of the 2018 Debentures at maturity (the "CONVERSION RATE"). The
Conversion Rate is the rate that is currently in effect and shall be in effect
on the Closing Date with respect to the conversion of the 2018 Debentures into
shares of Class A Common Stock.
(b) In the event that Parent shall, directly or indirectly,
take any action (an "Adjustment Event") which results in or necessitates an
adjustment to the Conversion Rate and/or the required issuance, upon
conversion of the aggregate principal amount of the 2018 Debentures at maturity
or otherwise, of shares of Common Stock exceeding the number of shares of
Common Stock represented by the Convertible Shares including, without
limitation, any of the actions described in Sections 11.06, 11.07, 11.08 and
11.12 of the Parent Indenture, then, no later than five (5) business days
after the Adjustment Event, Parent shall deliver to the Custodian such
number of additional shares of Common Stock, determined pursuant to the
applicable provisions of the Parent Indenture, as is necessary to reflect the
Adjustment Event. If as a result of an Adjustment Event or otherwise the
Custodian has deposited with it more Convertible Shares than are necessary
to allow for the full conversion of the then outstanding 2018 Debentures
("EXCESS SHARES"), Parent may deliver a certificate executed by an officer
thereof to CS and the Custodian and upon receipt the Custodian shall
promptly surrender to Parent a certificate representing the number of Excess
Shares.
(c) In the event that Parent (i) effects any reclassification
of outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value), (ii) enters into
any consolidation, merger or business combination with another corporation or
entity or similar transaction as a result of which holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for their Common Stock ("SUBSTITUTE
SECURITIES") or (iii) effects any sale or conveyance of any properties or assets
to any other corporation or entity as a result of which holders of Common Stock
shall be entitled to receive Substitute Securities with respect to or in
exchange for their Common Stock, then Parent shall deliver to Custodian and CS a
notice of such event, a certificate setting forth the Substitute Securities into
which 2018 Debentures may be converted and such number of Substitute Securities
as are necessary so that each 2018 Debenture holder shall be entitled to
receive, upon any future conversion of the 2018 Debentures held by such holder,
the kind and amount of Substitute Securities that a holder of the number of
Convertible Shares issuable upon conversion of each holder's 2018 Debentures
immediately prior to such transaction would have received had each holder
converted its 2018 Debentures immediately prior to the transaction. Upon
delivery to the Custodian of such Substitute Securities, Custodian shall return
to Parent all Convertible Shares no longer required for delivery to Converting
Holders.
7. TERMINATION DATE. For the purposes of this Agreement, the
"TERMINATION DATE" shall mean the earlier of (i) the first date upon which no
2018 Debentures remain outstanding and (ii) February 9, 2003. On the next
business day after the Termination Date, the Custodian shall surrender to Parent
the Original Certificate or the Replacement Certificate, as applicable,
representing all of the shares of Common Stock held by the Custodian pursuant to
this Agreement that were not transferred to or on behalf of the holders of 2018
Debentures in connection with the conversion of such Debentures.
8. TREASURY SHARES. The Convertible Shares and the Substitute
Securities, if any, until delivered to Converting Holders pursuant to the terms
of the Parent Indenture and this Agreement, shall continue to be treasury shares
of the Parent and shall not be or deemed to be outstanding for any purpose
including, without limitation, with respect to any vote to be taken by the
holders of the Common Stock, the payment of dividends, if any, by Parent or
any rights upon dissolution, winding up or liquidation of Parent. Neither the
Custodian nor CS shall have any rights with respect to Convertible Shares or
Substitute Securities including the right to vote such shares, the right to
receive dividends with respect to such shares or the right to receive any
distributions upon dissolution, winding up or liquidation.
9. THE CUSTODIAN.
(a) The Custodian shall have no duties or obligations
hereunder except those specifically set forth herein and such duties and
obligations shall be determined solely by the express provisions of this
Agreement. In connection with its duties hereunder, the Custodian shall be
protected in acting or refraining from acting upon any written notice, request,
consent, certificate, order, affidavit, letter, telegram or other document
furnished to it hereunder and believed by it to be genuine and to have been
signed or sent by the proper party or parties; and the Custodian shall not be
liable for anything it may do or refrain from doing in connection with its
duties hereunder, except for such liabilities as may result from its own gross
negligence or willful misconduct. The Custodian shall not be liable for any
action taken or omitted by it in good faith unless a court of competent
jurisdiction determines that the Custodian's gross negligence or willful
misconduct was the primary cause of loss to another party hereto. In the
administration of its duties under this Agreement, the Custodian may execute any
of its powers and perform its duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons to
be selected and retained by it. The Custodian shall not be liable for the
performance of agents selected by it with reasonable care or for anything done,
suffered or omitted in good faith by it in accordance with the advice or opinion
of any such counsel, accountants or other skilled persons.
(b) In the event the Custodian shall be uncertain as to its
duties or rights under this Agreement or shall receive any instruction, claim or
demand which, in the opinion of the Custodian, is in conflict with the
provisions of this Agreement (any of the foregoing, a "CUSTODIAN DISPUTE"), the
Custodian shall be entitled to refrain from taking any action with respect to
such Custodian Dispute until it shall be directed otherwise by a final and
nonappealable order of a court of competent jurisdiction or by an instrument
signed by Parent and CS. In the event of any Custodian Dispute, the Custodian
Agent shall be entitled to petition a court of competent jurisdiction in
Delaware or New York to resolve such Custodian Dispute, and Parent and CS hereby
consent to the jurisdiction of any such court with respect to any such Custodian
Dispute.
(c) Parent and CS, jointly and severally, agree to pay to the
Custodian the fees set forth in the letter agreement dated September ___ 2000
and to reimburse the Custodian for all reasonable out-of-pocket expenses,
including, without limitation, reasonable counsel fees and disbursements,
incurred by the Custodian in connection with the performance of its duties and
obligations under this Agreement. The parties cannot request or require that the
Custodian perform any duties outside the scope of this Agreement. As between
themselves, Parent and CS shall each be liable for 50% of all fees and expenses
to be paid or reimbursed to Custodian hereunder. In the event that either party
fails to pay any amount due to Custodian hereunder, the other party shall be
entitled to pay such amount on behalf of the defaulting party and the
defaulting party shall be obligated promptly to reimburse the other party
for any amounts so paid.
(d) The Custodian may resign at any time by giving at least 30
days' prior written notice to Parent and CS, which resignation shall become
effective only upon the acceptance of appointment by a successor Custodian as
hereinafter provided. The resigning Custodian may appoint a successor Custodian,
reasonably acceptable to Parent and CS, or Parent may appoint a successor
Custodian reasonably acceptable to CS (it being agreed that any independent
third party transfer agent for the Common Stock shall be acceptable to CS). If a
successor Custodian shall not have been appointed within 20 days after such
notice of resignation, Parent or CS may apply to any court of competent
jurisdiction to appoint a successor Custodian. Any successor Custodian, however
appointed, shall execute and deliver to the predecessor Custodian an instrument
accepting such appointment, and thereupon such successor Custodian shall,
without further act, become fully vested with all the rights, powers,
obligations and duties of the predecessor Custodian hereunder with the same
effect as if originally named the Custodian herein.
10. FURTHER ACTIONS. From and after the date hereof, each of
the parties hereto shall execute and deliver such documents and shall take such
further actions as may be reasonably required to carry out the provisions of
this Agreement and give effect to the transaction contemplated hereby.
11. NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile) and shall be
deemed to have been duly given only if delivered by a nationally recognized
overnight courier or delivered by hand against written receipt, or sent by
facsimile, addressed as follows:
(a) if to Parent, to (or such other address as it shall have
furnished to the other parties in writing):
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX, 00000
Fax: 000-000-0000
Attn.: Xxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxxx, Esq. Xxxx X.
Xxxxxxxx, Esq.
(b) if to CS, to (or such other address as it shall have
furnished to the other parties in writing):
Cadbury Schweppes plc
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
Fax: (000) 00-000-000-000 1
Attn.:Company Secretary
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn.:Xxxxxxx X. Xxxxxx, Esq.
(c) if to Custodian, to (or such other address as it shall
have furnished to the other parties in writing):
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn.:Xxxxxx Xxxxxxxxx
Each such notice, request or other communication shall be effective upon
receipt in the manner and at the address specified in this Section 11.
12. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, legal representatives, executors, administrators and permitted
assigns. Neither the Parent or CS nor (except as otherwise provided in Section
9(d)) the Custodian may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the prior written consent of Parent
and CS.
13. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by CS, Parent and the Custodian or, in the case of a waiver, by the
parties against whom the waiver is to be effective.
(b) No failure or delay by any party hereto in exercising any right,
power or privilege hereunder 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.
14. DESCRIPTIVE HEADINGS. The descriptive headings of the
Sections and subsections of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof Unless the context
otherwise requires, all references in this Agreement to Sections and subsections
are references to Sections and subsections of this Agreement.
15. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, applicable to
agreements made and to be performed entirely within such State.
16. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument. All
signatures of the parties hereto may be transmitted by facsimile and such
facsimile will, for all purposes, be deemed to be the original signature of the
party whose signature it reproduces and will be binding upon such party.
17. ENTIRE AGREEMENT. This Agreement sets forth the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, whether written
or oral, with respect to such subject matter.
18. INDEMNIFICATION. Parent and CS agree to jointly and
severally indemnify, defend and hold harmless the Custodian from all loss,
liability or expenses (including the reasonable fees and expenses of in-house or
outside counsel) arising out of or in connection with (a) its execution and
performance of this Agreement, except to the extent that such loss, liability or
expense is due to the gross negligence or willful misconduct of the Custodian,
or (b) its following any instructions or other directions from the Parent.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Custodian be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Custodian has been advised of the likelihood of such loss or damage and
regardless of the form of action. The parties hereto acknowledge that the
foregoing indemnities shall survive the resignation or removal of the Custodian
or the termination of this Agreement.
19. SUCCESSOR CORPORATIONS. Any corporation into which the
Custodian in its individual capacity may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Custodian in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Custodian in its individual capacity may be transferred, shall
be the Custodian under this Agreement without further act.
20. FORCE MAJEURE. In the event that the Custodian is unable
to perform its obligations under the terms of this Agreement because of acts of
God, strikes, equipment or transmission failure or damage reasonably beyond its
control or other cause reasonably beyond its control, the Custodian shall not be
liable for damages to the other parties for any unforeseeable damages resulting
from such failure to perform or otherwise from such causes. In such event,
performance by the Custodian under this Agreement shall resume when the
Custodian is able to perform substantially its duties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date and year first above written.
TRIARC COMPANIES, INC.
By:
----------------------------------
Name:
Title:
[CS ENTITY]
By:
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Name:
Title:
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By:
----------------------------------
Name:
Title:
EXHIBIT C
FORM OF INDEMNITY AGREEMENT
INDEMNITY AGREEMENT, dated as of ________, 2000 (this
"AGREEMENT"), by and between CADBURY SCHWEPPES PLC, an English public limited
company ("CS"), and TRIARC COMPANIES, INC., a Delaware corporation (the
"PARENT"),
Pursuant to an Agreement and Plan of Merger, dated as of
September 15, 2000, among CS, CSN Acquisition Inc., CRC Acquisition Inc.,
Snapple Beverage Group, Inc., Royal Crown Company, Inc. and Parent (including
any amendments thereto, the "MERGER AGREEMENT"), CS has agreed to assume all of
the Merging Companies' and TCPG's obligations under the 10-1/4% Indenture,
including, without limitation, all obligations with respect to the 10-1/4% Notes
and to assume all of the Parent's obligations under the Parent Indenture,
including, without limitation, all obligations with respect to the 2018
Debentures (collectively, the "ASSUMED DEBT");
Capitalized terms used herein but not defined herein shall
have the meaning assigned to such terms in the Merger Agreement;
It is a condition to the obligations of Parent and the Merging
Companies to consummate the transactions contemplated by the Merger Agreement
that CS execute and deliver this Agreement.
Accordingly, the parties agree as follows:
1. INDEMNIFICATION BY CS.
1.1. CS'S INDEMNIFICATION OBLIGATIONS. CS shall be liable to
and indemnify, defend and hold harmless Parent and its directors, officers,
employees, subsidiaries (including, without limitation, New LLC), affiliates,
successors and assigns (each, an "INDEMNIFIED PARTY") from and against any and
all damages, losses, claims, charges, actions, suits, proceeding, deficiencies,
taxes, interest, penalties, liabilities, payments of any nature and costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) (each a "LOSS" and collectively the "LOSSES") based upon, arising out
of or otherwise in respect of the Assumed Debt, except to the extent CS or its
affiliates are entitled to indemnification under Section 5.11.11, 5.12.7 or 7.3
of the Merger Agreement.
2. THIRD PARTY CLAIMS.
2.1. NOTICE OF ASSERTED LIABILITY. Promptly after receipt by
an Indemnified Party of notice of any demand, claim or circumstances by a third
party which, with the lapse of time, would or might give rise to a claim or the
commencement (or threatened commencement) of any action, audit, proceeding or
investigation (an "ASSERTED LIABILITY") that may result in a Loss in respect of
which indemnification may be sought from CS under this Agreement such
Indemnified Party shall give written notice thereof (the "INDEMNIFICATION
NOTICE") to CS. The Indemnification Notice shall describe the Asserted Liability
in reasonable detail, and shall indicate the amount (estimated, if necessary and
to the extent it is feasible) of the Loss that has been or may be suffered by
such Indemnified Party. The failure to give the Indemnification Notice promptly
shall not bar indemnification hereunder except and only to the extent such
failure materially prejudiced the party against whom indemnification is sought.
2.2. OPPORTUNITY TO DEFEND. CS shall be entitled to assume the
defense of any Asserted Liability for which it has an obligation to indemnify an
Indemnified Party pursuant to Section 1.1 hereof at its own expense, with
counsel reasonably satisfactory to such Indemnified Party; PROVIDED, HOWEVER,
that any Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense. Notwithstanding the foregoing, in any action, claim
or proceeding in which the defendants include both an Indemnified Party and CS,
if, in the reasonable opinion of counsel to such Indemnified Party, (i) there
are or may be legal defenses available to such Indemnified Party or to other
Indemnified Persons that are different from or additional to those available to
CS or (ii) a conflict or potential conflict exists between CS, on the one hand,
and such Indemnified Party, on the other hand, that would make separate
representation advisable, such Indemnified Party shall have the right to employ
separate counsel reasonably satisfactory to CS at the expense of CS and to
control its own defense of such action, claim or proceeding; PROVIDED, HOWEVER,
that CS shall not be liable for the fees and expenses of more than one counsel
to all Indemnified Parties in any one legal action or group of related legal
actions. If CS does not assume the defense of any Asserted Liability within
thirty (30) days (or less if the nature of the Asserted Liability requires its
receipt of the Indemnification Notice), the Indemnified Party shall control the
investigation, defense and settlement thereof at the reasonable cost of CS, and
CS shall make or cause to be made available to the Indemnified Party any books,
records or other documents within its control that are reasonably requested by
the Indemnified Party for such defense. CS shall not be liable for any
settlement of any claim, action or proceeding effected against an Indemnified
Party without its written consent, which consent shall not be unreasonably
withheld or delayed.
2.3. AUTHORITY OF CS. In the event an Indemnification Notice
is delivered to CS in respect of an Asserted Claim, and CS assumes the defense
thereof, CS shall have the discretion to make all decisions and determinations
permitted or required to be made by CS under Section 2.2 above with respect to
such Asserted Claim, and Parent shall make or cause to be made available to CS
any books, records or other documents within its control that are reasonably
requested by CS for such defense. CS agrees that it will not, without the prior
written consent of the Indemnified Party, which shall not be unreasonable
withheld or delayed, settle, compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding unless such settlement,
compromise or consent includes a full and unconditional release of all
Indemnified Parties from all liability arising or that may arise out of such
claim, action or proceeding.
3. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. Any legal action,
suit or proceeding arising out of or relating to this agreement shall be
instituted in the United States District Court for the Southern District of New
York, and each party agrees not to assert, by way of motion, as a defense, or
otherwise, in any such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of any such Court, that the action, suit
or proceeding is brought in an inconvenient forum, that the venue of the action,
suit or proceeding is improper or that this Indemnification Agreement or the
subject matter hereof may not be enforced in or by any such Court. Each party
irrevocably submits to the jurisdiction of any such Court in any such action,
suit or proceeding. Any and all service of process and any other notice in any
such action, suit or proceeding shall be effective against any party if given
personally or by registered or certified mail, return receipt requested, or by
any other means of mail that requires a signed receipt, postage prepaid, mailed
to such party as herein provided. Nothing herein contained shall be deemed to
affect the rights of any party to serve process in any manner permitted by law.
4. MISCELLANEOUS.
4.1. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been
delivered when delivered by hand or sent by telecopier (with receipt confirmed),
or if delivered by courier shall be deemed given on the close of business on
the second Business Day following the day when deposited with an overnight
courier or the close of business on the fifth (5th) Business Day when deposited
in the United States mail, postage prepaid, certified or registered addressed to
the party at the address set forth below, with copies sent to the persons
indicated:
(a) if to the Sellers, to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX, 00000
Fax: 000-000-0000
Attn.: Xxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
if to CS, to (or such other address as it
shall have furnished to the other parties in
writing):
Cadbury Schweppes plc
00 Xxxxxxxx Xxxxxx
Fax: (000) 00-000-000-0000
Attn: Company Secretary
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
4.2. ENTIRE AGREEMENT. This Agreement is entered into and
delivered pursuant to the Merger Agreement and as such contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto (other
than the Merger Agreement). In the event of any conflict or inconsistency
between the terms of this Agreement and the provisions of the Merger Agreement,
the parties agree that the provisions of this Agreement shall prevail.
4.3. WAIVERS AND AMENDMENTS. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by CS and Parent, or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any such right,
power or privilege, nor any single or partial exercise of any such right, power
or privilege preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
4.4. GOVERNING LAW. This Indemnification Agreement shall be
governed and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
4.5. ASSIGNMENT. CS may not assign any of its rights,
interests or obligations under this Agreement without the prior written consent
of Parent, which may be given or withheld in its sole discretion. This
Indemnification Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
4.6. FURTHER ASSURANCES. Each of the parties shall execute
such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and the
transactions contem plated hereby.
4.7. COUNTERPARTS. This Indemnification Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
4.8. HEADINGS. The headings in this Indemnification
Agreement are for reference only and shall not affect the interpretation of this
Indemnification Agreement.
IN WITNESS WHEREOF, the parties have executed this
Indemnification Agreement as of the date first above written.
CADBURY SCHWEPPES PLC
By:
---------------------------------
Name:
Title:
TRIARC COMPANIES INC.
By:
---------------------------------
Name:
Title:
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of _________, 2000, by and among TRIARC COMPANIES, INC., a
Delaware corporation (the "Company"), and [CS ENTITY], a __________ corporation
(the "Purchaser"), pursuant to the Agreement and Plan of Merger, dated as of
September 15, 2000 (the "Merger Agreement"), by and among Cadbury Schweppes plc,
an English public limited company ("CS"), CSN Acquisition Inc., a Delaware
corporation, CRC Acquisition Inc., a Delaware corporation, Snapple Beverage
Group, Inc., a Delaware corporation, and Royal Crown Companies, Inc., a Delaware
corporation. In order to induce CS to enter into the Merger Agreement and the
Purchaser to assume Parent's obligations under the Indenture (as defined below),
the Company has agreed to provide the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Merger Agreement.
The Company agrees with the Purchaser, as follows:
1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Merger
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
AFFILIATE: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, such specified person or
(ii) any executive officer or director of such other person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power (whether or not exercised) to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or otherwise
and the term "executive officer" has the meaning specified in Rule 3b-7 under
the Exchange Act.
BLACKOUT: See Section 2(d).
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
COMMON STOCK: The shares of Class A Common Stock, $.10 par
value per share, of the Company and any other shares of common stock as may
constitute "Common Stock" for purposes of the Indenture, in each case, as
issuable or issued upon conversion of the Debentures.
COMPANY: See the first paragraph of this Agreement.
CUSTODIAN: The Custodian under the Custody Agreement.
CUSTODY AGREEMENT: The Custody Agreement to be dated as of the
Closing Date, among the Purchaser, T Parent and American Stock Transfer & Trust
Company, as amended or supplemented from time to time in accordance with the
terms thereof.
DEBENTURES: The Zero Coupon Convertible Subordinated
Debentures Due 2018 of the Company issued and sold pursuant to the Placement
Agreement and the Indenture.
EFFECTIVENESS PERIOD: The period commencing with the date
hereof and ending on the earlier of February 10, 2003 and the date on which no
Debentures are outstanding.
EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
FILING DATE: See Section 2(a) hereof.
HOLDER(S): The holders from time to time of the Debentures.
INDENTURE: The Indenture, dated as of February 9, 1998 between
the Company and The Bank of New York, as Trustee, pursuant to which the
Debentures were issued, as amended or supplemented from time to time in
accordance with the terms thereof.
INITIAL SHELF REGISTRATION: See Section 2(a) hereof.
LOSSES: See Section 6 hereof.
PLACEMENT AGREEMENT: The Placement Agreement, dated as of
February 4, 1998, between the Company and Xxxxxx Xxxxxxx & Co. Incorporated,
as amended or supplemented from time to time.
PROSPECTUS: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
PURCHASER: See first paragraph of this Agreement.
REGISTRABLE SECURITIES: The shares of Common Stock of the
Company into which the Debentures are convertible or converted, whether or not
such Debentures have been converted, and which are to be delivered by the
Company on behalf of the Purchaser pursuant to the terms of the Indenture, the
Debentures and the Custody Agreement in order to enable Purchaser to satisfy its
obligation under the Indenture to deliver Common Stock to Holders who have
requested conversion of Debentures, until the earlier of February 9, 2003 or the
date on which no Debentures are outstanding.
REGISTRATION STATEMENT: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION: See Section 2(a) hereof.
SUBSEQUENT SHELF REGISTRATION: See Section 2(b) hereof.
TRUSTEE: The Trustee under the Indenture.
2. SHELF REGISTRATION.
(a) SHELF REGISTRATION. The Company shall
prepare and file with the SEC, as soon as practicable but in any event no later
than the Closing Date (the "Filing Date"), a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 of the Securities
Act (a "Shelf Registration") registering the sale and delivery from time to time
by the Company (or by the Purchaser if it is deemed a selling stockholder) of
the Registrable Securities to Holders who have requested conversion of
Debentures pursuant to the terms of the Indenture (the "Initial Shelf
Registration"). The Initial Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Registrable Securities for sale
or resale as contemplated herein. The Company shall use its reasonable best
efforts to cause the Initial Shelf Registration to be declared effective under
the Securities Act as soon as practicable but in any event no later than the
Closing Date and to keep the Initial Shelf Registration continuously effective
under the Securities Act until the earlier of the expiration of the
Effectiveness Period or the date a Subsequent Shelf Registration, as defined
below, covering all of the Registrable Securities has been declared effective
under the Securities Act.
(b) If the Initial Shelf Registration or any
Subsequent Shelf Registration, as defined below, ceases to be effective for
any reason as a result of the issuance of a stop order by the SEC at any
time during the Effectiveness Period, the Company shall use its reasonable
best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration in a manner reasonably expected
to obtain the withdrawal of the order suspending the effectiveness thereof, or
file an additional Shelf Registration covering all of the Registrable
Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Company shall use its reasonable best efforts to
cause the Subsequent Shelf Registration to be declared effective as soon as
practicable after such filing and to keep such Registration Statement
continuously effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the
Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration, if required by the Securities Act.
(d) The Purchaser agrees that
Registrable Securities may be delivered by the Company (or by the Purchaser, if
it is deemed a selling stockholder) pursuant to a Shelf Registration and related
Prospectus only as necessary to satisfy its obligation under the Indenture to
deliver Common Stock to Holders who have requested conversion of Debentures, and
may do so only in accordance with this Section 2(d) and the terms of the Custody
Agreement. In the event (A) of the happening of any event of the kind described
in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof or (B)
that, in the judgment of the Company, it is advisable to suspend use of the
Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which the Company believes that public disclosure would not
be in the best interests of the Company, the Company shall deliver a certificate
in writing, signed by an authorized executive officer of the Company, to the
Purchaser and the Custodian that the use of the Prospectus has been suspended
and, upon receipt of such certificate, the Purchaser will not deliver any
Registrable Securities upon conversion of Debentures until the Purchaser's and
Custodian's receipt of copies of the supplemented or amended Prospectus provided
for in Section 2(c) hereof, or until it (and the Custodian) is advised in
writing by the Company that the Prospectus may be used and the Purchaser has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus (a "Blackout"). The
Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed as soon as practicable and, in the case of a pending
development or event referred to in Section 2(d)(B) hereof, as soon as the
earlier of (x) public disclosure of such pending material corporate development
or similar material event, (y) in the judgment of the Company, public disclosure
of such material corporate development or similar material event would be in
the best interests of the Company or (z) the original circumstances creating
such pending material corporate development or similar material event cease to
exist. Notwithstanding the foregoing, the Company shall not under any
circumstances be entitled to exercise its right under this Section 2(d) to
effect a Blackout except as follows: the Company may effect a Blackout in
accordance with this Section 2(d) for a period not to exceed 30 days in any
three-month period, or not to exceed an aggregate of 90 days in any 12-month
period. In no event shall the Company be permitted to extend a Blackout beyond
such 30-day or 90- day period.
3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities solely as
necessary to enable the Purchaser to satisfy its obligation under the Indenture
to deliver Common Stock to Holders in connection with the conversion of
Debentures, and pursuant thereto the Company shall as expeditiously as possible
(and with respect to clause (a), no later than the Closing Date):
(a) Prepare and file with the SEC a Registration
Statement or Registration Statements on any appropriate form under the
Securities Act available for the sale and delivery of the Registrable Securities
upon conversion of the Debentures solely as necessary to enable the Purchaser to
satisfy its obligation under the Indenture to deliver Common Stock to Holders in
connection with the conversion of Debentures, and use its reasonable best
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; PROVIDED that before filing any such Registration
Statement or Prospectus or any amendments or supplements thereto (other than
documents that would be incorporated or deemed to be incorporated therein by
reference and that the Company is required by applicable securities laws or
stock exchange requirements to file) the Company shall furnish to the Purchaser
copies of all such documents proposed to be filed, which documents will be
subject to the review of the Purchaser and its counsel, and the Company shall
not file any such Registration Statement or amendment thereto or any Prospectus
or any supplement thereto (other than such documents which, upon filing, would
be incorporated or deemed to be incorporated by reference therein and that the
Company is required by applicable securities laws or stock exchange requirements
to file) to which the Purchaser shall reasonably object in writing within two
full Business Days.
(b) Prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period specified in Section 2; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement and Prospectus upon conversion of the Debentures.
(c) Notify the Purchaser and the Custodian,
promptly, and (if required by the Purchaser) confirm such notice in writing, (i)
when a Prospectus, any Prospectus supplement, a Registration Statement or a
post-effective amendment to a Registration Statement has been filed with the
SEC, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to a Registration Statement or related Prospectus or for additional information,
(iii) of the suspension of the effectiveness of a Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the existence of any fact or happening of
any event which makes any statement of a material fact in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which would require the making of
any changes in the Registration Statement or prospectus in order that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption
for qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
(e) If reasonably requested by the Purchaser (i)
promptly incorporate in a Prospectus supplement or post-effective amendment to a
Registration Statement such information as the Purchaser reasonably considers
should be included therein as required by applicable law, and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment; PROVIDED, that the Company shall not be required to take any actions
under this Section (3)(e) that are not, in the opinion of counsel for the
Company, in compliance with applicable law.
(f) Furnish to the Purchaser, without charge, at
least one conformed copy of the Registration Statement or Statements and any
amendment thereto, including financial statements but excluding schedules,
all documents incorporated or deemed to be incorporated therein by reference
and all exhibits.
(g) Deliver to the Purchaser without charge, as
many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as the Purchaser may reasonably request; and the Company
hereby consents to the use of such Prospectus or each amendment or supplement
thereto by the Purchaser in connection with the delivery of the Registrable
Securities covered by such Prospectus or any amendment or supplement thereto to
Holders as contemplated by this Agreement.
(h) Cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities within the United States,
except as may be required solely as a consequence of the nature of the
Purchaser, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals, as may be necessary to enable the Purchaser to consummate the
delivery of Registrable Securities as contemplated by this Agreement.
(i) During any period other than during a
Blackout, immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, promptly prepare and file (subject to the proviso in
Section 3(a)) a post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document (such as a Current Report on Form
8-K) that would be incorporated by reference into the Registration Statement so
that the Registration Statement shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and so that the
Prospectus will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, use its reasonable efforts
to cause it to become effective as soon as practicable.
(j) Cause the Common Stock covered by the
Registration Statement to be listed on each securities exchange or quoted on
each automated quotation system on which any of the Company's "Common Stock," as
that term is defined in the Indenture, is then listed or quoted no later than
the date the Registration is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
(k) Cooperate and assist in any filings
required to be made with the New York Stock Exchange, Inc. (the "NYSE").
(l) To register or qualify or cooperate with the
Purchaser in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as the Purchaser reasonably requests in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
applicable Registration Statement; provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
(m) Comply with all applicable rules and
regulations of the SEC and make generally available to its security holders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
52- or 53-week period (or 90 days after the end of any 52- or 53-week period if
such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Registration
Statement, which statements shall cover said 52- or 53-week periods.
(n) Cooperate with the Purchaser to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in such names
as the Purchaser may request.
4. PURCHASER'S OBLIGATIONS. In the event Purchaser is deemed
to be a selling stockholder under the Registration Statement, the Purchaser
agrees that it shall not be entitled to deliver any of such Registrable
Securities pursuant to a Registration Statement or to receive a Prospectus
relating thereto, unless the Purchaser has furnished the Company with such
information regarding the Purchaser and the distribution of such Registrable
Securities as the Company may from time to time reasonably request. The
Purchaser agrees promptly to furnish to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by the Purchaser not misleading. Any delivery of any Registrable
Securities by the Purchaser shall constitute a representation and warranty by
the Purchaser that the information relating to the Purchaser and the
distribution of Registrable Securities is as set forth in the Prospectus
delivered by the Purchaser in connection with such disposition, that such
Prospectus does not as of the time of such delivery contain any untrue statement
of a material fact relating to the Purchaser or the distribution and that
such Prospectus does not as of the time of such delivery omit to state any
material fact relating to the Purchaser or the distribution necessary to
make the statements in such Prospectus, in light of the circumstances under
which they were made, not misleading.
5. REGISTRATION EXPENSES. All fees and expenses incident to
the Company's performance of or compliance with this Agreement shall be borne by
the Company whether or not any of the Registration Statements become effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings or listing, as applicable, required to be made with the SEC
or the NYSE and (y) relating to compliance with Federal securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities), (iii) the reasonable fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock, (iv) messenger, telephone and delivery expense
relating to the performance of the Company's obligations hereunder, (v)
reasonable fees and disbursements of counsel for the Company in connection with
the Shelf Registration, (vi) fees and disbursements of the Company's independent
accountants and (vii) Securities Act liability insurance, to the extent obtained
by the Company in its sole discretion. In addition, each of the Purchaser and
the Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company
shall indemnify and hold harmless the Purchaser and each person, if any, who
controls the Purchaser (within the meaning of either Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) from and against all
losses, liabilities, damages and expenses (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (collectively, "Losses"), arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except as to the Purchaser insofar as such Losses arise out of or
are based upon the information relating to the Purchaser or the intended
distribution by the Purchaser furnished to the Company in writing by the
Purchaser expressly for use therein; PROVIDED, HOWEVER, that the Company shall
not be liable to the Purchaser (or any person controlling the Purchaser) to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary Prospectus if either (A)(i) the Purchaser, if required, failed
to send or deliver a copy of the Prospectus with or prior to delivery
of written confirmation of the sale by the Purchaser to the person asserting
the claims from which such Losses arise and (ii) the Prospectus would have
corrected such untrue statement or alleged untrue statement or such
omission or alleged omission, or (B)(x) such untrue statement or alleged
untrue statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and (y) having previously been furnished by or
on behalf of the Company with copies of the Prospectus as so amended or
supplemented, the Purchaser, being required to deliver such Prospectus,
thereafter fails to deliver such Prospectus as so amended or supplemented,
with or prior to the delivery of written confirmation of the sale of a
Registrable Security to the person asserting the claim from which such Losses
arise.
(b) INDEMNIFICATION BY THE PURCHASER. The Purchaser agrees to
indemnify and hold harmless the Company, its directors, its officers who sign a
Registration Statement, and each person, if any, who controls the Company,
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act), from and against all losses arising out of or based upon any
untrue statement of a material fact contained in any Registration Statement,
Prospectus or preliminary prospectus or arising out of or based upon any
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent
that such untrue statement or omission is contained in any information relating
to the Purchaser so furnished in writing by the Purchaser (or its
representative) to the Company expressly for use in such Registration Statement
or Prospectus.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Purchaser and all persons, if any, who
control the Purchaser within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, and (b) the fees and expenses of more
than one separate firm (in addition to any local counsel) for the Company,
its directors, its officers who sign a Registration Statement and each person,
if any, who controls the Company within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred.
In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In such case involving the Purchaser, and
persons who control the Purchaser, such firm shall be designated in writing by
the Purchaser. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party and its Affiliates from all
liability or claims that are the subject matter of such proceeding.
(d) CONTRIBUTION. If the indemnification
provided for in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof in respect of any Losses or is insufficient to hold
such indemnified party harmless, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of the Purchaser on the
one hand and the Company on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Purchaser or by the Company and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by PRO
RATA allocation or by any other method or allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
Losses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution form any person who was not guilty of such
fraudulent misrepresentations.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any liability the
Company may otherwise have hereunder, under the Merger Agreement or otherwise.
The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Purchaser or the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by the
Purchaser.
7. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the
Company of its obligations under this Agreement, the Purchaser, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, and all rights under the Merger Agreement and the Indemnity Agreement,
will be entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) NO CONFLICTING AGREEMENTS. The Company has
not, as of the date hereof, and shall not, on or after the date of this
Agreement, enter into any agreement with respect to its securities which
conflicts with the rights granted to the Purchaser in this Agreement. The
Company represents and warrants that the rights granted to the Purchaser
hereunder do not in any way conflict with the rights granted to the holders of
the Company's securities under any other agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Purchaser.
(d) NOTICES. All notices and other
communications provided for or permitted hereunder shall be made in writing and
shall be deemed given (i) when made, if made by hand delivery, (ii) upon
confirmation, if made by telecopier, or (iii) one business day after being
deposited with a reputable next-day courier, postage prepaid, to the parties as
follows:
(x) if to the Company:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
(y) if to the Purchaser:
[CS Entity]
c/o Cadbury Schweppes plc
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X0XX
Attention: Company Secretary
Telecopy No.: (000) 00 000 000 0000
with a copy to:
Xxxxxx, Xxxxx & Brockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address as such person may have furnished to the other persons
identified in this Section 7(d) in writing in accordance herewith.
(e) ASSIGNMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement shall be binding on and inure to the benefit of and be
enforceable by the parties and their respective successors and permitted
assigns. Neither party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the prior written consent of
the other party. This Agreement is intended for the sole benefit of, and is
enforceable by, the parties hereto and their respective successors and
permitted assigns, and no right, benefit or remedy of any nature whatsoever
is intended to be conferred upon any other person by reason of this Agreement.
(f) COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be original and
all of which taken together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(i) SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held to be invalid, illegal, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, illegal, void or unenforceable.
(j) ENTIRE AGREEMENT. This Agreement, together
with the Custody Agreement, Merger Agreement and the Indemnity Agreement, is
intended by the parties as a final expression of their agreement and is intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
among the parties with respect to such registration rights.
(k) ATTORNEYS' FEES. In any action or
proceeding brought to enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the prevailing party, as
determined by the court, shall be entitled to recover reasonable attorneys' fees
in addition to any other available remedy.
(l) FURTHER ASSURANCES. Each of the parties
hereto shall use all reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things reasonably necessary,
proper or advisable under applicable law, and execute and deliver such
documents and other papers, as may be required to carry out the provisions of
this Agreement and the other documents contemplated hereby and consummate and
make effective the transactions contemplated hereby.
(m) TERMINATION. This Agreement and the
obligations of the parties hereunder shall terminate upon the end of the
Effectiveness Period, except for any liabilities or obligations under Section 4,
5 or 6 hereof, each of which shall remain in effect in accordance with their
terms.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TRIARC COMPANIES, INC.,
By:
------------------------
Name:
Title:
Accepted as of the date first above written:
[CS ENTITY]
By:
-------------------------------------------
Name:
Title:
List of Omitted Schedules
SCHEDULES - Disclosure Schedules
SECTION 1.1 - Knowledge SECTION 3.2(a) - SBG Options Outstanding
SECTION 3.2(b) - Capitalization;Subsidiaries
SECTION 3.4 - Consents and Approvals
SECTION 3.5 - Non-Contravention
SECTION 3.7 - Financial Statements; No Undisclosed Liabilities;
Absence of Certain Changes
SECTION 3.8 - Litigation
SECTION 3.9 - Taxes
SECTION 3.10 - Employee Benefits
SECTION 3.11 - Compliance with Laws
SECTION 3.12 - Intellectual Property
SECTION 3.13 - Contracts
SECTION 3.16 - Environmental Matters
SECTION 3.17 - Labor Relations
SECTION 3.18 - Business Relationships; Receivables
SECTION 3.19 - Corporate Matters
SECTION 3.21 - Inventories
SECTION 5.1 - Conduct of Businesses Pending Closing
SECTION 5.9 - Related Party Payments
SECTION 5.14 - Payment for Options
The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedule to the Securities and Exchange Commission upon its request.
