1
Exhibit 2
AMENDMENT, dated as of December 28, 1995 (the "Amendment"), to the
Share Purchase Agreement, dated as of October 31, 1995 (the "Purchase
Agreement"), by and among WENDY'S INTERNATIONAL, INC., an Ohio Corporation
("Wendy's"), 1149658 ONTARIO INC., an Ontario corporation ("Newco"), 632687
ALBERTA LTD., an Alberta corporation (the "Company"), and XXXXXX X. XXXXX
("Seller").
WHEREAS, Wendy's, Newco, the Company and Seller are parties to the
Purchase Agreement; and
WHEREAS, the Company has been continued under the laws of Ontario as
1052106 Ontario Limited; and
WHEREAS, the parties to the Purchase Agreement desire to modify
certain provisions of the Purchase Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth herein, the parties hereto agree as follows:
1. All capitalized terms used in the Amendment and not otherwise
defined shall have the meanings ascribed to them in the Purchase Agreement.
2. (a) Section 1.1(b) of the Purchase Agreement is hereby
amended by adding the following after the parenthetical at the end of the first
sentence of such section: ", and Seller shall be paid the amount of Cdn. $100."
(b) Section 1.2(b) of the Purchase Agreement is hereby
amended by adding the following after the words "Share Consideration" at the end
of such section: ", and Seller shall receive a payment (by wire transfer or
cheque) in the amount of Cdn. $100."
(c) Section 5.3(d) of the Purchase Agreement is hereby
amended by adding the following words after the words "Share Consideration": ",
and Seller shall have received a payment (by wire transfer or cheque) in the
amount of Cdn $100."
3. Section 7.1 is hereby amended and restated in its entirety as
follows:
"Notwithstanding any investigation by any party hereto and
notwithstanding the Closing hereunder, all representations and
warranties made by any party in this Agreement or any
certificate or other writing delivered pursuant hereto or in
connection herewith shall survive the Closing for the period
commencing on the Closing Date and ending on the first
anniversary of the Closing Date (the
2
"Survival Period"); provided, however, that any claim relating
to the subject matter of any Wendy's Initial Notice, Seller
Initial Notice or notice of a third party claim pursuant to
Section 7.5(c) or Section 7.6(c) given within the Survival
Period shall survive the termination of the Survival Period and
continue until the resolution of such claim. The covenants and
agreements set forth in this Agreement shall survive the
Closing and shall continue in accordance with their terms."
4. (a) Section 7.2(a) of the Purchase Agreement is hereby
amended and restated in its entirety as follows:
"(a) Subject to the terms and conditions of this Article 7,
Seller and the Company hereby jointly and severally agree to
indemnify, defend and hold harmless Wendy's and Newco and each
of their respective directors and officers (collectively, the
"Wendy's Group") from and against any and all Damages (except
that, for purposes of this subsection 7.2(a)(i)(y), Damages
shall mean any actual Damages incurred, as well as any
potential Damages to the extent a reserve is required to be
established with respect thereto under U.S. GAAP) asserted
against, resulting from, imposed on or incurred or suffered by
the Wendy's Group directly or indirectly (with Damages of the
Company, a Company Subsidiary or an Affiliated Entity, other
than 467052 Ontario Limited, being deemed to be suffered by the
Wendy's Group) as a result of or arising from the following
(collectively, "Wendy's Claims"): (i)(x) any breach or alleged
breach of any of the representations or warranties made by
Seller or the Company in this Agreement, in any Transaction
Agreement or in any certificate or other document furnished by
or on behalf of Seller or the Company, any Company Subsidiary
or any Affiliated Entity pursuant to this Agreement or any of
the Transaction Agreements (other than Seller's and the
Company's representations and warranties with respect to any
Environmental Matter, including, but not limited to, the
representations and warranties contained in Section 2.23
hereof) or (y) any item listed on Schedule 7.2(a) hereto
(provided, however, that the Wendy's Group shall not be
entitled to indemnification for Wendy's Claims pursuant to this
clause (i) unless and until the Damages which the Wendy's Group
is entitled to claim pursuant to this clause (i) exceed, in the
aggregate, Cdn. $2,500,000 (the "Deductible"); and provided
further that, thereafter, subject to Section 7.3, the Wendy's
Group shall be entitled to indemnification in respect of all
Damages which may be claimed pursuant to this
- 2 -
3
clause (i) in excess of the Deductible); (ii) any failure or
alleged failure by Seller or the Company to perform any of its
covenants, obligations or agreements contained in this
Agreement, any Transaction Agreement or any certificate or
document furnished by or on behalf of Seller or the Company or
any Company Subsidiary pursuant to this Agreement or any of the
Transaction Agreements; and (iii) the disposition of the
interests of the Company or the Company Subsidiaries in the
assets described in Schedule 4.9(a)."
(b) Sections 7.5 (a) and (b) of the Purchase Agreement are
hereby amended and restated in their entirety as follows:
"(a) Prior to the assertion of any Wendy's Claim, Wendy's shall
notify Seller in writing that one or more members of the
Wendy's Group intend to assert a Wendy's Claim hereunder. Such
notice (the "Wendy's Initial Notice") shall not set forth the
amount of such Wendy's Claim, but shall generally describe the
nature thereof. Within 10 business days of the receipt by
Seller of a Wendy's Initial Notice, the Chief Executive Officer
of Wendy's (or his designee) shall meet with Seller (or his
designee) to discuss the Wendy's Claim which is the subject
matter of the Wendy's Initial Notice. The parties shall in good
faith endeavour to reach a mutually satisfactory agreement with
respect to the issues underlying such Wendy's Claim within 10
business days (a "Meeting Period") of the date of the first
meeting of Wendy's Chief Executive Officer (or his designee)
and Seller (or his designee) with respect to such Wendy's
Claim. Any such agreement reached by Wendy's and Seller
pursuant to this Section 7.5(a) shall be reduced to a writing
and be binding on all parties hereto. If no agreement is
reached prior to the expiration of such Meeting Period, Wendy's
shall be entitled to give notice (the "Wendy's Claim Notice")
to Seller of the assertion of a Wendy's Claim indicating (i)
the amount of the Wendy's Claim or, if an amount is not then
determinable, an approximate and reasonable estimate of the
potential amount of the Wendy's Claim and (ii) the alleged
basis of the Wendy's Claim. If Seller does not dispute the
basis and/or amount of any Wendy's Claim within 5 business days
of receiving a Wendy's Claim Notice, Wendy's shall have the
right on behalf of the claiming member or members of the
Wendy's Group making such Wendy's Claim promptly to recover
indemnity as and to the extent provided herein and in the
Escrow Agreement, which shall constitute recovery on behalf of
the relevant member or members of the Wendy's Group. If Seller
disagrees with the basis of
- 3 -
4
the Wendy's Claim specified in the Wendy's Claim Notice and/or
the amount of Damages caused thereby, then within 5 business
days of receiving such Wendy's Claim Notice, Seller shall give
notice to Wendy's of such disagreement. After receipt of such
notice, Wendy's shall be entitled to take the dispute to a
court of competent jurisdiction. Subject to Section 7.1 hereof,
the delay or failure of Wendy's to provide a Wendy's Initial
Notice or a Wendy's Claim Notice shall not in any way limit the
indemnification rights of the members of the Wendy's Group
hereunder. If the time periods set forth in this Section 7.5(a)
are not reasonably practical, the parties hereto shall agree to
such reasonably practical time periods as they deem
appropriate; provided, however, that such time periods shall
not exceed 45 business days, in the aggregate.
(b) During the period commencing on the date a Wendy's Initial
Notice is given until the date a Wendy's Claim Notice is given
or an agreement is reached in respect of the subject matter of
such Wendy's Initial Notice, Seller shall be entitled to make
(at his own cost and expense) such investigations with respect
to the Wendy's Claims specified in the Wendy's Initial Notice
as Seller deems necessary. For the purpose of such
investigation, the claiming member of the Wendy's Group shall
make available to Seller, at Seller's request, the information
which forms the basis for such Wendy's Claims."
(c) Sections 7.6 (a) and (b) of the Purchase Agreement are
hereby amended and restated in their entirety as follows:
"(a) Prior to the assertion of any Seller Claim, Seller shall
notify Wendy's in writing that Seller intends to assert a
Seller Claim hereunder. Such notice (the "Seller Initial
Notice") shall not set forth the amount of such Seller Claim,
but shall generally describe the nature thereof. Within 10
business days of the receipt by Wendy's of a Seller Initial
Notice, the Chief Executive Officer of Wendy's (or his
designee) shall meet with Seller (or his designee) to discuss
the Seller Claim which is the subject matter of the Seller
Initial Notice. The parties shall in good faith endeavour to
reach a mutually satisfactory agreement with respect to the
issues underlying such Seller Claim within a Meeting Period.
Any such agreement reached by Wendy's and Seller pursuant to
this Section 7.6(a) shall be reduced to a writing and be
binding on all parties hereto. If no agreement is reached prior
to the expiration of such Meeting Period,
- 4 -
5
Seller shall be entitled to give notice (the "Seller Claim
Notice") to Wendy's of the assertion of a Seller Claim
indicating (i) the amount of the Seller Claim or, if an amount
is not then determinable, an approximate and reasonable
estimate of the potential amount of the Seller Claim and (ii)
the alleged basis of the Seller Claim. If Wendy's does not
dispute the basis and/or amount of any Seller Claim within 5
business days of receiving a Seller Claim Notice, Seller shall
have the right promptly to recover indemnity as and to the
extent provided herein. If Wendy's disagrees with the basis of
the Seller Claim specified in the Seller Claim Notice and/or
the amount of damages caused thereby, then within 5 business
days of receiving such Seller Claim Notice, Wendy's shall give
notice to Seller of such disagreement. After receipt of such
notice, Seller shall be entitled to take the dispute to a court
of competent jurisdiction. Subject to Section 7.1 hereof, the
delay or failure of Seller to provide a Seller Initial Notice
or a Seller Claim Notice shall not in any way limit the
indemnification rights of Seller hereunder. If the time periods
set forth in this Section 7.6(a) are not reasonably practical,
the parties hereto shall agree to such reasonably practical
time periods as they deem appropriate; provided, however, that
such time periods shall not exceed 45 business days, in the
aggregate.
(b) During the period commencing on the date a Seller Initial
Notice is given until the date a Seller Claim Notice is given
or an agreement is reached in respect of the subject matter of
such Seller Initial Notice, Wendy's shall be entitled to make
(at his own cost and expense) such investigations with respect
to the Seller Claims specified in the Seller Initial Notice as
Wendy's deems necessary. For the purpose of such investigation,
Seller shall make available to Wendy's, at Wendy's request, the
information which forms the basis for such Seller Claims."
5. Section 8.1 shall be amended as follows:
(a) by inserting the following after the definition of
"Material Contracts" and before the definition of "Non-Standard Agreements":
"Meeting Period" has the meaning ascribed to it in Section
7.5(a);
(b) by inserting the following after the definition of "Seller
Claim" and before the definition of "Seller's Representatives":
- 5 -
6
"Seller Claim Notice" has the meaning ascribed thereto in
Section 7.6(a);
"Seller Initial Notice" has the meaning ascribed thereto in
Section 7.6(a);
(c) by inserting the following after the definition of "Wendy's
Claims" and before the definition of "Wendy's Common Shares":
"Wendy's Claim Notice" has the meaning ascribed thereto in
Section 7.5(a);
(d) by inserting the following after the definition of "Wendy's
Group" and before the definition of "Wendy's Material Adverse Effect":
"Wendy's Initial Notice" has the meaning ascribed thereto in
Section 7.5(a);
6. Schedule 4.9(a) to the Purchase Agreement is hereby amended by
adding the following two items:
"5. All of TDL's shares of 467052 Ontario Limited.
6. Condominium apartment owned by TDL, located in Fort
Lauderdale, Florida bearing municipal address Xxxx 000-X,
Xxxxxxxx Xxxxxxxx Condo, 0000 XX 00xx Xxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000."
7. Except as herein specifically provided otherwise, the Purchase
Agreement shall remain in full force and effect and shall not otherwise be
modified or amended hereby.
8. This Amendment shall be governed by and construed and enforced
in accordance with the laws of the Province of Ontario (and the laws of Canada
applicable therein), without regard to their respective conflict of law rules.
9. This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.
- 6 -
7
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
WENDY'S INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: President, Chief Executive
Officer and Chief Operating Officer
1149658 ONTARIO INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board and
President
XXXXXX X. XXXXX
/s/ Xxxxxx Xxxxx /s/ Xxxxxx X. Xxxxx
----------------------------- -----------------------------
Witness to signature
of Xxxxxx X. Xxxxx
1052106 ONTARIO LIMITED (formerly
632687 Alberta Ltd.)
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
- 7 -
8
Schedule 7.2(a)
1. The items listed under "Schedule 2.1(a) - Exceptions to Due Qualification"
on p. 1 of the List of Estimated Damages under the Share Purchase
Agreement, dated November 30, 1995 (the "List of Specified Items"),
attached to Xxxxxx Xxxxx' letter to Xxxxxx Xxxxx, dated December 1, 1995;
2. the items listed under "Schedule 2.9 - Employment Related Matters" on p. 7
of the List of Specified Items, to the extent Damages as a result of or
arising from such items exceed Cdn. $120,000, in the aggregate;
3. the items listed under "Schedule 2.10 - Litigation" on pp. 8 through 13 of
the List of Specified Items and the items listed on Schedule 4.4(a) to the
Purchase Agreement, to the extent Damages as a result of or arising from
such items exceed Cdn. $300,000, in the aggregate(1);
4. the following items listed under "Schedule 2.12":
4.1 "2.12(d)(ii) -Necessary Permits, Consents and Approvals" on p. 18 of
the List of Specified Items;
4.2 "2.12(d)(iv) - Franchise Agreements with Other Parties to Operate
Shops" on p. 18 of the List of Specified Items;
5. the items listed under "Schedule 2.12(e) and 2.15(c)" on pp. 19 through 25
of the List of Specified Items, to the extent Damages as a result of or
arising from such items are not the responsibility of Franchisees under
applicable leases;
6. the items listed under "Schedule 2.12(e) - Franchisee Real Property" on pp.
26 through 29 of the List of Specified Items, to the extent Damages as a
result of or arising from such items exceed Cdn. $65,000, in the aggregate;
7. the item listed under "Schedule 2.13 - Contracts and Commitments" "Section
2.13(c)" on p. 33 of the List of Specified Items;
-----------------------
(1) With respect to item 3 it is understood and agreed that none of such
litigation shall be settled without Seller's (or his representative's)
prior consent, not to be unreasonably withheld.
9
8. the items listed under "Schedule 2.15 - Company Leases" on p. 34 of the
List of Specified Items.
