MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (the "Agreement") is made as of
February 25, 1999 by and among Triarc Companies, Inc., a Delaware corporation
("Triarc"), Snapple Beverage Corp., a Delaware corporation ("Snapple"), Mistic
Brands, Inc., a Delaware corporation ("Mistic"), Cable Car Beverage Corporation,
a Delaware corporation ("Cable Car"), and Royal Crown Company, Inc., a Delaware
corporation ("Royal Crown"). Snapple, Mistic, Cable Car and Royal Crown are
herein collectively referred to as the Companies.
Triarc currently provides certain management services to the Companies.
As used herein the term "Triarc Beverage Group" shall mean,
collectively, Snapple, Mistic, Cable Car, Royal Crown and any and all other
subsidiaries of Triarc Consumer Products Group, LLC (or any successor thereto)
that are primarily engaged in the beverage business or any business related,
ancillary or complementary thereto that become parties hereto in accordance with
paragraph 13 hereof.
Triarc and the Companies desire to enter into this Agreement to set
forth the terms and conditions upon which Triarc will continue to provide such
services to the Triarc Beverage Group.
The parties hereto agree as follows:
1. Term. The term of this Agreement shall commence as of February 25,
1999 and shall continue until December 31, 2009 (the "Original Term"), and
thereafter shall automatically be extended for successive one year periods (the
Original Term, as so extended, the "Term") unless either party hereto notifies
the other party hereto at least 90 days prior to the then scheduled end of the
Term of its desire that this Agreement be terminated.
2. Services to be Provided. Triarc shall provide to the Triarc Beverage
Group during the Term the services listed in this Agreement and such other
management services as the Triarc Beverage Group may reasonably request
(collectively, the "Services"). Such Services shall include the following:
a. Legal. Expertise and assistance in legal matters, including
any reporting obligations of any member of the Triarc Beverage Group
under the Securities Exchange Act of 1934, and the services of a
Corporate Secretary and such other support staff as Triarc shall
reasonably consider to be appropriate and necessary to handle such
matters.
b. Accounting. Expertise and assistance in financial presentation
and planning and such services as are reasonably necessary for the
Triarc Beverage Group to comply with its financial reporting obligations
to third parties, including report preparation, compliance with
generally accepted accounting principles, footnote disclosure,
compilation and review.
c. Finance. Expertise and assistance in treasury functions
(including ensuring that the Triarc Beverage Group is in compliance with
current lender requirements, monitoring of debt covenants, negotiation
of waivers and exceptions, monitoring of cash flow and negotiation of
lines of credit) and providing of such other financial expertise as may
be required from time to time.
d. Corporate Development. Expertise and advice with respect to
acquisitions or dispositions of or investments in beverage brands and
distributors and related, ancillary or complementary businesses.
e. Tax. Services and expertise required for all federal, state
and local tax preparation, planning and audits.
f. Risk Management. Services of a risk manager to obtain and
maintain insurance policies covering property and casualty, workers
compensation, comprehensive general liability and other risks.
g. Information Technology. Oversight of the design, installation
and maintenance of computer and data systems.
h. Benefits Design and Administration. Services and expertise
relating to the design and administration of employee benefit plans,
including executive compensation arrangements, retirement plans, and
health insurance programs.
i. Other. Such other services as the parties may agree are
necessary for the efficient and profitable operations of the Triarc
Beverage Group.
3. Fees. In consideration for the providing of the Services, each member
of the Triarc Beverage Group agrees, jointly and severally, to pay an aggregate
annual service fee of $6.7 million, subject to adjustment as provided in
paragraph 4 hereof (as so adjusted, the "Fee"). Such fee shall be paid in equal
quarterly installments on each February 15, May 15, August 15 and November 15,
commencing on May 15, 1999, provided that the payment due hereunder on May 15,
1999 shall be $717,857. In addition, on the effective date of this Agreement (as
provided in paragraph 13 hereof), each member of the Triarc Beverage Group shall
pay to Triarc all accrued and unpaid management fees for all prior periods
through February 25, 1999, which payment shall not be deemed to be a payment
with respect to the Fee due hereunder.
4. Annual Adjustment of Fee. Beginning and effective January 1, 2000,
and effective each January 1 thereafter, the Fee for the ensuing year shall be
subject to an increase, but not a decrease, equal to the percentage increase in
the United States Consumer Price Index for All Urban Consumers (or an
appropriate substitute index, as determined in good faith by Triarc, if such
index is no longer published) (the "Index"), which percentage increase shall be
computed by comparing the Index for December 31, 1998 with the Index for the
December 31 immediately preceding the relevant January 1 effective date.
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5. Reimbursement to Triarc of Certain Costs. In addition to the Fee,
each member of the Triarc Beverage Group agrees (jointly and severally) that it
shall reimburse Triarc for all costs and expenses incurred by Triarc: (i) in
connection with the supply agreements referred to in the Amended and Restated
Letter Agreement dated as of February 1, 1999 among Triarc and the Triarc
Beverage Group, as the same may be amended or supplemented from time to time
(the "Supply Agreement"); (ii) under any other supply agreements entered into by
Triarc pursuant to which it acquires raw materials, flavors, packaging or other
items used or useful in connection with the business of the Triarc Beverage
Group, all on a similar basis as the reimbursement provided for in the Supply
Agreement; (iii) under its agreements with Executive Jet Aviation, Inc, EJI
Sales, Inc. and their affiliates, to the extent that such costs and expenses are
incurred in connection with or otherwise allocable to the use by employees of
the Triarc Beverage Group of the aircraft referred to in any such agreements or
in any similar agreements with such service providers or any other parties; (iv)
in connection with the aircraft leased by Triarc from Triangle Aircraft Services
Corp., to the extent such costs and expenses are incurred in connection with or
otherwise allocable to the use by employees, agents or advisors of the Triarc
Beverage Group; (v) in connection with the management or operation of employee
benefit plans that are maintained by Triarc, in whole or in part, for the
benefit of the employees of the Triarc Beverage Group, to the extent that such
costs and expenses are allocable to such employees; (vi) in connection with
insurance maintained by Triarc (including, without limitation, medical, general
liability, and directors and officers liability insurance), to the extent that
such costs and expenses are allocable to coverage of the operations of, or any
employee or director of, any member of the Triarc Beverage Group; and (vii) in
connection with the acquisition from third parties of any goods or services
purchased or otherwise arranged for by Triarc, to the extent that such goods or
services are for the benefit of, or to be used by, any member of the Triarc
Beverage Group, their agents or advisors.
6. Allocation of Fee. Each member of the Triarc Beverage Group agrees
that, as between the members of the Triarc Beverage Group (and having no effect
on the joint and several obligations of the members of the Triarc Beverage Group
to Triarc under paragraph 3 hereof), the Fee shall be allocated among each of
the members of the Triarc Beverage Group in accordance with the following
formula. With respect to the Fee due for any fiscal year, each member of the
Triarc Beverage Group shall pay an amount equal to the Fee for such fiscal year
multiplied by a fraction, the numerator of which is the greater of (x) such
company's EBITDA, as set forth in such company's "Annual Operating Plan," for
the fiscal year for which the Fee is being computed (the "Reference Period") and
(y) 10% of such company's revenues for the Reference Period, as set forth in
such company's Annual Operating Plan, and the denominator of which is the sum of
the numerators for all of the members of the Triarc Beverage Group that are
parties hereto.
7. Limitation on Liability. Triarc will use commercially reasonable
efforts, skill and judgment to discharge properly its duties hereunder, but
shall have no liability with respect to, and shall not be obligated to indemnify
or hold harmless the Triarc Beverage Group, or the officers, directors,
employees, agents or other representatives of any member of the Triarc Beverage
Group from or against any cost, loss, expense, damage or liability arising out
of or otherwise in respect of the performance of the Services, except any such
cost, loss, expense,
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damage or liability resulting from the gross negligence, willful misconduct or
fraud of Triarc or its officers, employees or agents.
8. Not Employees of the Triarc Beverage Group. Employees of Triarc
engaged in performing the Services shall under no circumstances be considered to
be employees of any member of the Triarc Beverage Group.
9. Independent Contractor. In performing the Services, Triarc shall be
an independent contractor and neither party hereto shall be deemed to be an
agent, partner or co-venturer of the other due to the terms and provisions of
this Agreement.
10. Entire Agreement; Waivers and Amendments. This Agreement sets forth
the entire understanding between the members of the Triarc Beverage Group and
Triarc relating to the subject matter hereof and supercedes all prior management
services agreements between Triarc and each of the members of the Triarc
Beverage Group. Except as provided herein, this Agreement shall not be modified
or amended, and no provision hereof shall be waived, except by an instrument in
writing signed by each of the parties hereto, or in the case of a waiver, by the
party hereto against whom such waiver is sought to be enforced.
11. Governing Law. This Agreement shall be governed in all respects by
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
12. Notices. All notices, demands and other communications given to or
made by either party to the other in connection with this Agreement shall be
given in writing and either personally served on an officer or other authorized
representative of the party to which it is given or mailed by registered first
class mail, postage prepaid, to the headquarters of such party to the attention
of its chief financial officer, or to such other address and to the attention of
such persons as the party in question may from time to time specify to the other
by notice hereunder. All notices shall be deemed delivered and effective (i) if
hand-delivered, upon delivery, (ii) if telecopied, upon delivery, receipt
acknowledged or (iii) if mailed, three business days after mailing.
13. Effectiveness. This Agreement shall be effective as to each of the
parties hereto as of the date of this Agreement, provided, however, that this
Agreement shall be effective as to Royal Crown on the date on which the 9-3/4%
Senior Secured Notes due 2000 of RC/Arby's Corporation shall have been redeemed
in full. Upon the creation or acquisition of an entity that becomes a member of
the Triarc Beverage Group, such entity shall, if it desires to receive any of
the Services provided hereunder, execute a counterpart hereto and shall
thereafter be bound by the terms of this Agreement (including, without
limitation, the terms of paragraph 6 hereof) as if it were an original signatory
hereto.
14. Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of the date first above written.
TRIARC COMPANIES, INC.
By: /s/ XXXX X. XXXXXX, XX.
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Name: Xxxx X. Xxxxxx, Xx.
Title: Executive Vice President and
Chief Financial Officer
SNAPPLE BEVERAGE CORP.
By: /s/ XXXX X. XXXXXX, XX.
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Name: Xxxx X. Xxxxxx, Xx.
Title: Executive Vice President
MISTIC BRANDS, INC.
By: /s/ XXXX X. XXXXXX, XX.
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Name: Xxxx X. Xxxxxx, Xx.
Title: Executive Vice President
CABLE CAR BEVERAGE CORPORATION
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
ROYAL CROWN COMPANY, INC.
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Secretary
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