-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GjAfdbYUaxHHvSTO8/dPu2feF/A6HI42U0FNVmNChYpc1IPW3HCw7RCX9qNOaNdt d4Us8zrL52uD+96V0xYXYA== 0000030697-01-500010.txt : 20010402 0000030697-01-500010.hdr.sgml : 20010402 ACCESSION NUMBER: 0000030697-01-500010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20010330 ITEM INFORMATION: FILED AS OF DATE: 20010330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIARC COMPANIES INC CENTRAL INDEX KEY: 0000030697 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 380471180 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-02207 FILM NUMBER: 1586954 BUSINESS ADDRESS: STREET 1: 280 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2124513000 MAIL ADDRESS: STREET 1: 280 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: DWG CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DWG CIGAR CORP DATE OF NAME CHANGE: 19680820 FORMER COMPANY: FORMER CONFORMED NAME: DEISEL WEMMER GILBERT CORP DATE OF NAME CHANGE: 19680820 8-K 1 k801.txt 3/30/01 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) March 30, 2001 TRIARC COMPANIES, INC. -------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 1-2207 38-0471180 ----------------- -------------- -------------- (State or other (Commission (I.R.S. Employer jurisdiction of File No.) Identification No.) incorporation of organization) 280 Park Avenue New York, NY 10017 ---------------------------------- ------------ (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (212) 451-3000 ---------------------------------- ------------ (Former name or former address, (Zip Code) if changed since last report) Item 7. Exhibits (c) Exhibits 3.1 - By-laws of Triarc Companies, Inc., as currently in effect. 4.1 - Supplemental Indenture No. 8, dated as of November 14, 2000, among SBG Holdings Inc. and Snapple Beverage Group, Inc., as issuers, the Subsidiary Guarantors parties thereto and The Bank of New York, as trustee. 4.2 - Indenture, dated as of November 21, 2000, among Arby's Franchise Trust, as issuer, Ambac Assurance Corporation, as insurer, and BNY Midwest Trust Company, a Bank of New York Company, as Indenture Trustee. 10.1 - Deferral Plan for Senior Executives Officers of Triarc Companies, Inc. 10.2 - Trust Agreement for the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., dated January 23, 2001, between Triarc Companies, Inc. and Wilmington Trust Company, as trustee. 10.3 - Trust Agreement for the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., dated January 23, 2001, between Triarc Companies, Inc. and Wilmington Trust Company, as trustee. 10.4 - Servicing Agreement, dated as of November 21, 2000, among Arby's Franchise Trust, as Issuer, Arby's, Inc., as Servicer, and BNY Midwest Trust Company, a Bank of New York Company, as Indenture Trustee. 10.5 - Promissory Note, dated April 1, 2000, issued by Nelson Peltz and Peter W. May to Triarc Companies, Inc. in the original principal amount of $5,000,000. 10.6 - Stipulation and Agreement of Compromise, Settlement and Release, dated August 17, 2000. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized. TRIARC COMPANIES, INC. By: /s/ BRIAN L. SCHORR -------------------------- Brian L. Schorr Executive Vice President and General Counsel Dated: March 30, 2001 EXHIBIT INDEX Exhibit No. Description Page No. 3.1 - By-laws of Triarc Companies, Inc., as currently in effect. 4.1 - Supplemental Indenture No. 8, dated as of November 14, 2000, among SBG Holdings Inc. and Snapple Beverage Group, Inc., as issuers, the Subsidiary Guarantors parties thereto and The Bank of New York, as trustee. 4.2 - Indenture, dated as of November 21, 2000, among Arby's Franchise Trust, as issuer, Ambac Assurance Corporation, as insurer, and BNY Midwest Trust Company, a Bank of New York Company, as Indenture Trustee. 10.1 - Deferral Plan for Senior Executives Officers of Triarc Companies, Inc. 10.2 - Trust Agreement for the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., dated January 23, 2001, between Triarc Companies, Inc. and Wilmington Trust Company, as trustee. 10.3 - Trust Agreement for the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., dated January 23, 2001, between Triarc Companies, Inc. and Wilmington Trust Company, as trustee. 10.4 - Servicing Agreement, dated as of November 21, 2000, among Arby's Franchise Trust, as Issuer, Arby's, Inc., as Servicer, and BNY Midwest Trust Company, a Bank of New York Company, as Indenture Trustee. 10.5 - Promissory Note, dated April 1, 2000, issued by Nelson Peltz and Peter W. May to Triarc Companies, Inc. in the original principal amount of $5,000,000. 10.6 - Stipulation and Agreement of Compromise, Settlement and Release, dated August 17, 2000. EX-3.1 2 bylaw.txt TRI BYLAWS Exhibit 3.1 TRIARC COMPANIES, INC. BY-LAWS (as amended through November 16, 2000) ARTICLE I Offices SECTION 1. Registered Office in Delaware. The registered office of the Corporation (as defined in Article IX below) in the State of Delaware shall be located at 1209 Orange Street in the City of Wilmington, County of New Castle, and the name of the resident agent in charge thereof shall be The Corporation Trust Company. SECTION 2. Executive Offices. The Corporation shall maintain an executive office in New York, New York, or such other location as the Board of Directors shall determine. SECTION 3. Other Offices. In addition to the registered office in the State of Delaware and the principal executive office, the Corporation may have offices at such other places within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II Meeting of Stockholders SECTION 1. Annual Meetings. The annual meeting of stockholders of the Corporation for the election of directors and the transaction of such other business as may be brought before the meeting in accordance with the Certificate of Incorporation (as defined in Article IX below) and these By-Laws shall be held on the date and at the time fixed from time to time within thirteen (13) months after the date of the preceding annual meeting by the Board of Directors, by a resolution adopted by the affirmative vote of a majority of the total number of directors determined from time to time by the Board of Directors pursuant to a resolution adopted pursuant to Section 3 of Article III of these By-Laws. The annual meeting of stockholders of the Corporation shall not be called or held otherwise than as provided in the Certificate of Incorporation or in these By-Laws. SECTION 2. Special Meeting. Special meetings of stockholders of the Corporation may be called only at the direction of the Chairman and Chief Executive Officer, the President and Chief Operating Officer or the Board of Directors. SECTION 3. Place of Meeting. Annual and special meetings of stockholders of the Corporation shall be held at the registered office of the Corporation in the City of Wilmington, County of New Castle, State of Delaware, unless some other place within or without the State of Delaware shall have been fixed by a resolution adopted by the Board and designated in the notice of meeting. SECTION 4. Notice of Meetings. Notice of every meeting of stockholders of the Corporation, annual or special, stating the time, place, if any, and, for special meetings, in general terms, the purpose or purposes thereof, shall be given by the Chairman and Chief Executive Officer or the President and Chief Operating Officer or the Secretary of the Corporation to each stockholder of record entitled to vote at the meeting. Notice of the time, place, if any, and purposes of any annual or special meeting of stockholders may be dispensed with if every stockholder entitled to notice of and to vote at such meeting shall attend, either in person or by proxy, or if every absent stockholder entitled to such notice and vote shall, in a writing or writings or by electronic transmission filed with the records of the meeting either before or after the holding thereof, waive such notice. SECTION 5. Means of Giving Notice. A notice of any annual or special meeting of stockholders of the Corporation may be given either personally or by mail or other means of written communication, charges prepaid, addressed to the stockholder at such stockholder's address appearing on the books of the Corporation or given by such stockholder to the Corporation for the purpose of notice. Notices given to stockholders may be given by electronic transmission in the manner provided by law. SECTION 6. Time of Notice. Any required notice of any meeting of stockholders of the Corporation shall be sent to each stockholder entitled thereto not less than ten (10) nor more than sixty (60) days prior to the date of the meeting. SECTION 7. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) or less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting (including by telegram, cablegram or other electronic transmission as permitted by law), the Board of Directors may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall be not more than ten (10) days after the date upon which the resolution fixing the record date is adopted. If no record date has been fixed by the Board of Directors and no prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Article II, Section 14 hereof. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law with respect to the proposed action by written consent of the stockholders, the record date for determining stockholders entitled to consent to corporate action in writing shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. SECTION 8. List of Stockholders. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in the name of such stockholder, shall be open to the examination of any such stockholder in the manner provided by law. The stockholder list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. SECTION 9. Quorum. At any meeting of stockholders of the Corporation the presence in person or by proxy of the holders of a majority in voting power of the outstanding stock of the Corporation entitled to vote shall constitute a quorum for the transaction of business brought before the meeting in accordance with the Certificate of Incorporation and these By-Laws and, a quorum being present, the affirmative vote of the holders of a majority in voting power present in person or represented by proxy and entitled to vote shall be required to effect action by stockholders; provided, however, that the affirmative vote of a plurality in voting power present in person or represented by proxy and entitled to vote shall be required to effect elections of directors. The stockholders present at any duly organized meeting of stockholders may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to have less than a quorum. SECTION 10. Adjournment. Any meeting of stockholders of the Corporation may be adjourned from time to time, without notice other than by announcement at the meeting by the chairman of the meeting at which such adjournment is taken, and at any such adjourned meeting at which a quorum shall be present any action may be taken that could have been taken at the meeting originally called; provided, however, that if the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. SECTION 11. Organization. At every meeting of stockholders of the Corporation, the Chairman and Chief Executive Officer or, in the absence of such officer, the President and Chief Operating Officer or, in the absence of both such officers, such individual as shall have been designated by the Chairman and Chief Executive Officer, or if such officer has not done so, then by the President and Chief Operating Officer, or if such officer has not done so, by a resolution adopted by the affirmative vote of a majority of the Board of Directors, shall act as chairman of the meeting. The Secretary of the Corporation or, in the absence of such officer, an Assistant Secretary in attendance or, in the absence of the Secretary and an Assistant Secretary, an individual appointed by the chairman of the meeting shall act as secretary of the meeting and keep a record of the proceedings of the meeting. SECTION 12. Agenda and Rules of Order. The chairman of the meeting shall have sole authority to prescribe the agenda and rules of order for the conduct of any meeting of stockholders of the Corporation and to determine all questions arising thereat relating to the order of business and the conduct of the meeting, except as otherwise required by law. SECTION 13. Conduct of Business at Meetings. Except as otherwise provided by law, at any annual or special meeting of stockholders only such business shall be conducted as shall have been properly brought before the meeting. Except as otherwise provided in this Article II or in the Certificate of Incorporation, in order to be properly brought before the meeting, such business must have either been: (A) specified in the written notice of the meeting (or any supplement thereto) given to stockholders of record on the record date for such meeting by or at the direction of the Board of Directors; or (B) brought before the meeting at the direction of the Chairman and Chief Executive Officer, the President and Chief Operating Officer or the Board of Directors. SECTION 14. Stockholder Action by Consent. Any action required or permitted to be taken by the holders of the issued and outstanding stock of the Corporation may be effected at an annual or special meeting of stockholders or by the consent in writing of such stockholders or any of them, which writing shall be filed with the minutes of proceedings of the stockholders. A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder shall be deemed to be in writing for purposes of this section to the extent permitted by law. ARTICLE III Board of Directors SECTION 1. Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. SECTION 2. Qualification of Director. Each director shall be at least eighteen (18) years of age. Directors need not be stockholders of the Corporation. SECTION 3. Number of Directors. The Board of Directors shall consist of not fewer than seven (7) nor more than fifteen (15) individuals, the exact number to be fixed from time to time by the Board of Directors pursuant to a resolution adopted by a majority of directors then in office. SECTION 4. Election and Term of Office. The members of the Board of Directors shall be elected by the stockholders at the annual meeting of stockholders and each director shall hold office until the annual meeting of stockholders next succeeding his or her election and until his or her successor is elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal. SECTION 5. Vacancies. Any vacancy in the Board of Directors caused by death, resignation, retirement, disqualification or removal or any other cause (including an increase in the number of directors) may be filled solely by resolution adopted by the affirmative vote of a majority of the directors then in office, whether or not such majority constitutes less than a quorum, or by a sole remaining director. Any new director elected to fill a vacancy on the Board of Directors will serve for the remainder of the full term of the director for which the vacancy occurred. No decrease in the size of the Board of Directors shall have the effect of shortening the term of any incumbent director. SECTION 6. Resignation of Directors. Any director may resign at any time. Such resignation shall be made in writing or by electronic transmission and shall take effect at the time specified therein, and if no time be specified, shall take effect at the time of its receipt by the Chairman and Chief Executive Officer, the President and Chief Operating Officer or the Secretary of the Corporation. The acceptance of a resignation shall not be necessary to make it effective, but no resignation shall discharge any accrued obligation or duty of a director. SECTION 7. Removal of Directors. A duly elected director of the Corporation may be removed from such position, with or without cause, only by the affirmative vote of the holders of two-thirds (2/3) of the voting power of the outstanding capital stock of the Corporation entitled to vote in the election of directors, voting as a single class. SECTION 8. Quorum of Directors. Except as otherwise required by law or by the Certificate of Incorporation or by these By-Laws, (i) a majority of the directors in office at the time of a duly assembled meeting shall constitute a quorum and be sufficient for the transaction of business, and (ii) any act of a majority of the directors present at a meeting at which there is a quorum shall be the act of the Board of Directors. SECTION 9. Place of Meeting. Subject to the provisions of Section 10 of this Article III, the Board of Directors may hold any meeting at such place or places within or without the State of Delaware as it may determine. SECTION 10. Organization Meeting. After each annual meeting of stockholders of the Corporation, the Board of Directors shall meet immediately at the place where such meeting of stockholders was held for the purpose of organization, election of Executive Officers (as defined in Section 1 of Article V), and the transaction of other business. SECTION 11. Regular Meetings. Regular meetings of the Board of Directors may be held at such times and at such places within or without the State of Delaware as the Board of Directors shall from time to time determine. SECTION 12. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman and Chief Executive Officer, the President and Chief Operating Officer or any two directors, and any such meeting shall be held at such time and at such place within or without the State of Delaware as shall be specified in the notice of meeting. SECTION 13. Notice of Meetings. Subject to the provisions of Section 10 of this Article III, notice of the place, day and hour of every meeting of the Board of Directors shall be given to each director by mailing such notice at least two (2) days before the meeting to his or her last known address or by personally delivering, telegraphing or telephoning such notice to him or her at least twenty-four (24) hours before the meeting. SECTION 14. Organization. The Chairman and Chief Executive Officer or, in the absence of such officer, the President and Chief Operating Officer shall call meetings of the Board of Directors to order and shall act as the chairman thereof. In the absence of the Chairman and Chief Executive Officer and the President and Chief Operating Officer, a majority of the directors present may elect as chairman of the meeting any director present. The Secretary of the Corporation or, in the absence of such officer, an Assistant Secretary in attendance or, in the absence of the Secretary and an Assistant Secretary, an individual appointed by the chairman of the meeting shall act as a secretary of the meeting and keep a record of the proceedings of the meeting. SECTION 15. Order of Business. Unless otherwise determined by the Board of Directors the order of business and rules of order at any meeting of the Board of Directors shall be determined by the chairman of the meeting. SECTION 16. Adjournment. Any meeting of the Board of Directors may be adjourned from time to time by a majority of the directors present, whether or not they shall constitute a quorum, and no notice shall be required of any adjourned meeting beyond the announcement of such adjournment at the meeting. SECTION 17. Action by Board of Directors Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all the members of the Board or the committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Board of Directors or committee, as the case may be. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. SECTION 18. Action by Conference Telephone. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, members of the Board of Directors or of any committee thereof may participate in a meeting of the Board of Directors or of such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting in such manner shall constitute presence in person at such a meeting. SECTION 19. Compensation. Each director, in consideration of his or her serving as such, shall be entitled to receive from the Corporation such compensation as the Board of Directors shall from time to time determine, together with reimbursement for reasonable expenses incurred by him or her in attending meetings of the Board of Directors. Each director who shall serve as a member of any committee of the Board of Directors, in consideration of his or her serving as such, shall be entitled to such additional compensation as the Board of Directors shall from time to time determine, together with reimbursement for reasonable expenses incurred by him or her in attending meetings of such committee. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE IV Committees of Directors SECTION 1. Committees. The Board of Directors may appoint one or more committees, which may include as members directors only or directors and non-directors, as the Board of Directors may from time to time consider desirable, and such committees shall have such powers and duties as the Board of Directors shall determine and as shall be specified in the resolution of appointment; provided, however, that the powers and duties of any such committee whose members shall include non-directors shall be limited to making recommendations to the Board of Directors. SECTION 2. Committee Vacancies. Any member of a committee appointed pursuant to this Article IV shall serve at the pleasure of the Board of Directors, which Board shall have the power at any time to remove any member, with or without cause, and to fill vacancies in the membership of a committee. No committee appointed pursuant to this Article IV shall have the power to fill any vacancy in the membership of such committee. Any committee appointed pursuant to Section 1 of this Article IV shall exist at the pleasure of the Board of Directors, which Board shall have the power at any time to change the powers and duties of any such committee or to dissolve it. SECTION 3. Committee Meetings. Regular meetings of a committee appointed pursuant to this Article IV shall be held at such times and at such places within or without the State of Delaware as the Board of Directors or the committee shall from time to time determine, and no notice of such regular meetings shall be required. Special meetings of any committee may be called by the chairman of such committee or by the Chairman and Chief Executive Officer or by the President and Chief Operating Officer, and shall be called by the Secretary of the Corporation on the written request of any member of such committee. Notice of a special meeting of any committee shall be given to each member thereof by mailing such notice at least forty-eight (48) hours, or by personally delivering, telegraphing or telephoning the same at least eighteen (18) hours, before the meeting. It shall not be requisite for the validity of any meeting of any committee that notice thereof shall have been given to any committee member who is present at the meeting or, if absent, waives notice thereof in writing filed with the records of the meeting either before or after the holding thereof. The majority of the members of a committee shall constitute a quorum for the transaction of committee business, and the act of a majority of the members present at any meeting at which there is a quorum shall be the act of the committee. A committee shall keep regular minutes of its meetings and all action taken or resolutions adopted shall be reported to the Board of Directors at the meeting of the Board next following such action. ARTICLE V Officers SECTION 1. Executive Officers. At the organization meeting of the Board of Directors following the annual meeting of stockholders, the Board of Directors shall elect as executive officers of the Corporation a Chairman and Chief Executive Officer, a President and Chief Operating Officer, a Secretary and a Treasurer, and may elect as executive officers of the Corporation one or more Chairmen Emeriti, Vice Chairmen, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. All such executive officers elected by the Board of Directors are referred to in these By-Laws as "Executive Officers." The Board of Directors may from time to time appoint such other officers and agents of the Corporation as the interests of the Corporation may require and may fix their duties and terms of office. To the extent permitted by law, any number of offices may be held by the same person. SECTION 2. Other Officers. In addition to the Executive Officers elected by the Board of Directors pursuant to Section 1 of this Article V, the Chairman and Chief Executive Officer and the President and Chief Operating Officer may from time to time appoint such other officers of the Corporation, including, Vice Presidents, Assistant Vice Presidents, Staff Vice Presidents, Assistant Secretaries, Assistant Treasurers and Controllers, as the interests of the Corporation may require (the "Other Officers"); provided, however, that no Other Officer may be appointed to the office of Chairman Emeritus, Vice Chairman, President and Chief Operating Officer, Executive Vice President, Senior Vice President, Secretary or Treasurer. Each appointment of an Other Officer shall be in writing and shall set forth the duties of the Other Officer being appointed and, subject to Section 3 of this Article V, such officer's term of office. SECTION 3. Term of Office. Each Executive Officer shall hold office until the organization meeting of the Board of Directors following the annual meeting of stockholders next succeeding such officer's election and until such officer's successor is elected and qualified, or until such officer's earlier death, resignation, retirement or removal. Each Other Officer shall hold office for a term to be decided by the appointing Chairman and Chief Executive Officer or President and Chief Operating Officer, as the case may be; provided, however, that no such term shall be for a period longer than the term of office of the appointing Chairman and Chief Executive Officer or President and Chief Operating Officer. SECTION 4. Removal of Officers. Any Executive Officer or Other Officer may be removed from office with or without cause at any time by the affirmative vote of a majority of the Board of Directors. Any Other Officer may be removed from office at any time with or without cause by the Chairman and Chief Executive Officer or President and Chief Operating Officer. SECTION 5. Vacancies. A vacancy in any Executive Office or Other Office arising from any cause may be filled for the unexpired portion of the term by the Board of Directors. A vacancy in any Other Office arising from any cause may be filled for the unexpired portion of the term by the Chairman and Chief Executive Officer or President and Chief Operating Officer. SECTION 6. Compensation of Officers. The salaries or compensation, if any, of the Executive Officers shall be fixed by the Board of Directors or the Compensation Committee of the Board of Directors, if their be one. The salaries or compensation of the Other Officers and division officers, if there be any, may be fixed from time to time by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 7. Chairman and Chief Executive Officer. The Chairman and Chief Executive Officer shall be Chairman of the Board of Directors and of the Executive Committee, if any, shall be the chief executive officer of the Corporation and, subject to the control of the Board of Directors, shall have general charge and control of the business and affairs of the Corporation with power and authority, when acting in the ordinary course of business of the Corporation, in the name and on behalf of the Corporation and under its seal attested by the Secretary or an Assistant Secretary of the Corporation, or otherwise, to (i) execute and deliver agreements, contracts, certificates and other instruments, (ii) purchase and accept delivery of stocks, bonds, evidences of interest and indebtedness, rights and options to acquire the same, and all other securities, whether negotiable or non-negotiable, (iii) sell, assign, transfer and deliver all stocks, bonds, evidence of interest and indebtedness, rights and options to acquire the same, and all other securities, corporate or otherwise, now or hereafter standing in the name of or owned beneficially by the Corporation, (iv) open and maintain accounts with banking institutions, including investment banks and brokerage firms, and (v) borrow from banks and other financial institutions, including investment banks and brokerage firms, such sums of money for such periods of time and upon such terms as such officer shall deem necessary or appropriate, and execute and deliver notes, other evidences of indebtedness and agreements for the repayment of any sums so borrowed in the name and on behalf of the Corporation; provided, however, that no borrowing pursuant to this clause (v) shall have an original maturity of more than one year. Such officer shall preside at all meetings of stockholders of the Corporation and the Board of Directors at which such officer is present. Such officer shall perform all other duties and enjoy all other powers which are commonly incident to the office of Chairman and Chief Executive Officer, or are delegated to such officer from time to time by the Board of Directors or are or may at any time be authorized or required by law. SECTION 8. Chairman Emeritus and Vice Chairmen of the Board. The Chairman Emeritus and Vice Chairmen of the Board, if there be any, shall be members of the Board of Directors and shall have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 9. President and Chief Operating Officer. The President and Chief Operating Officer shall be a member of the Board of Directors and of the Executive Committee, if any, shall be the chief operating officer of the Corporation responsible for directing, administering and coordinating the business operations of the Corporation in accordance with policies, goals and objectives established by the Board of Directors and the Chairman and Chief Executive Officer with power and authority, when acting in the ordinary course of business of the Corporation, in the name and on behalf of the Corporation and under its seal attested by the Secretary or an Assistant Secretary of the Corporation, or otherwise, to, (i) execute and deliver agreements, contracts, certificates and other instruments, (ii) purchase and accept delivery of stocks, bonds, evidences of interest and indebtedness, rights and options to acquire the same, and all other securities, whether negotiable or non-negotiable, (iii) sell, assign, transfer and deliver stocks, bonds, evidences of interest and indebtedness, rights and options to acquire the same, and all other securities, corporate or otherwise, now or hereafter standing in the name of or owned beneficially by the Corporation, (iv) open and maintain accounts with banking institutions, including investment banks and brokerage firms, and (v) borrow from banks and other financial institutions, including investment banks and brokerage firms, such sums of money for such periods of time and upon such terms as such officer shall deem necessary or appropriate, and execute and deliver notes, other evidences of indebtedness and agreements for the repayment of any sums so borrowed in the name and on behalf of the Corporation; provided, however, that no borrowing pursuant to this clause (v) shall have an original maturity of more than one year. Such officer shall perform all other duties and enjoy all other powers which are commonly incident to the office of President and Chief Operating Officer or which are delegated to such officer by the Board of Directors or the Chairman and Chief Executive Officer. In the absence of the Chairman and Chief Executive Officer, the President and Chief Operating Officer shall perform all duties and may exercise all powers of the Chairman and Chief Executive Officer and shall preside at meetings of stockholders of the Corporation and the Executive Committee. SECTION 10. Executive Vice Presidents, Senior Vice Presidents and Vice Presidents Elected by the Board. The Executive Vice Presidents, the Senior Vice Presidents and the Vice Presidents elected by the Board of Directors pursuant to Section 1 of this Article V, if there be any, shall have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 11. Secretary. The Secretary shall record the proceedings of all meetings of stockholders of the Corporation and of the Board of Directors which such officer attends in a book or books to be kept for that purpose. Such officer shall attend to the giving and serving of all notices on behalf of the Corporation, shall have custody of the records and the seal of the Corporation and shall affix the seal to any instrument which requires the seal of the Corporation. Such officer shall, in general, perform all the duties and functions incident to the office of Secretary and shall also perform such other duties as may from time to time be assigned to such officer by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 12. Treasurer. The Treasurer shall have custody and control of all funds and securities of the Corporation, except as otherwise provided by the Board of Directors. Such officer shall keep full and accurate accounts of all receipts and disbursements of the Corporation in books to be kept for that purpose, shall deposit all money and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors, and shall render to the Chairman and Chief Executive Officer, the President and Chief Operating Officer or the Board of Directors, whenever any of them may require it, an account of all such officer's transactions as Treasurer and an account of the financial condition of the Corporation. Such officer shall also perform such other duties as may from time to time be assigned to such officer by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 13. Powers and Duties of Other Officers. The Other Officers shall have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. ARTICLE VI Capital Stock SECTION 1. Certificates. Each stockholder of the Corporation shall be entitled to a certificate or certificates signed by or in the name of the Corporation by the Chairman and Chief Executive Officer, the President and Chief Operating Officer, an Executive Vice President or a Senior Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, certifying the number of shares of stock of the Corporation owned by such stockholder. Any or all of the signatures on the certificates may be a facsimile. In case any officer, Transfer Agent or Registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, Transfer Agent or Registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he, she or it was such officer, Transfer Agent or Registrar at the date of issue. All certificates of each class or series shall be consecutively numbered and shall be entered in the books of the Corporation as they are issued. Every certificate shall certify the name of the Person owning the shares represented thereby, with the number of shares and the date of issue. The names and addresses of all Persons owning shares of the Corporation, with the number of shares owned by each and the date or dates of issue of the shares held by each, shall be entered in the books of the Corporation kept for that purpose by the proper officers, agents or employees of the Corporation. The Corporation shall be entitled to treat the holder of record of any share or shares of stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other Persons, whether or not it has actual or other notice thereof, except as provided by law. SECTION 2. Cancellation of Certificates. All certificates surrendered to the Corporation shall be cancelled and, except in the case of lost, stolen or destroyed certificates, no new certificates shall be issued until the former certificate or certificates for the same number of shares of the same class of stock have been surrendered and cancelled. SECTION 3. Lost, Stolen or Destroyed Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of the fact by the Person claiming the certificate or certificates to be lost, stolen or destroyed. In its discretion and as a condition precedent to the issuance of any such new certificate or certificates, the Board of Directors may require that the owner of such lost, stolen or destroyed certificate or certificates, or such Person's legal representative, advertise the same in such manner as the Board shall require and/or give the Corporation and its Transfer Agent or Agents, Registrar or Registrars a bond in such form and amount as the Board of Directors may direct as indemnity against any claim that may be made against the Corporation and its Transfer Agent or Agents, Registrar or Registrars, and that the owner requesting such new certificate or certificates obtain a final order or decree of a court of competent jurisdiction as such owner's right to receive such new certificate or certificates. SECTION 4. Transfer of Shares. Shares of stock shall be transferable on the books of the Corporation by the holder thereof, in person or by duly authorized attorney, upon the surrender of the certificate or certificates representing the shares to be transferred, properly endorsed, with such proof or guarantee of the authenticity of the signature as the Corporation or its agents may reasonably require. SECTION 5. Transfer Agents and Registrars. The Corporation may have one or more Transfer Agents and one or more Registrars of its stocks, whose respective duties the Board of Directors may define from time to time. No certificate of stock shall be valid until countersigned by a Transfer Agent, if the Corporation shall have a Transfer Agent, or until registered by the Registrar, if the Corporation shall have a Registrar. The duties of Transfer Agent and Registrar may be combined. ARTICLE VII Contracts, Checks, Drafts, Proxies SECTION 1. Execution of Contracts. The Board of Directors may authorize any Executive or Other Officer, agent or employee of the Corporation to enter into any contract or execute and deliver any instrument in the name or on behalf of the Corporation, and such authority may be general or confined to specific instances, and, unless so authorized by the Board of Directors, no Executive or Other Officer, agent or employee except the Chairman and Chief Executive Officer and the President and Chief Operating Officer shall have any power or authority to bind the Corporation by any contract or to pledge its credit or to render it liable pecuniarily for any purpose or to any amount. SECTION 2. Loans. Except as otherwise provided in these By-Laws, no loan shall be contracted in the name or on behalf of the Corporation, and no evidence of indebtedness shall be issued, endorsed or accepted in its name, or on its behalf, unless authorized by the Board of Directors. Such authority may be general or confined to specific instances. When so authorized, the Executive or Other Officer, agent or employee thereunto authorized may effect loans and advances at any time for the Corporation from any Person (including any bank, trust company or other institution) and for such loans and advances may make, execute and deliver promissory notes or other evidences of indebtedness of the Corporation, and, when authorized as aforesaid, as security for the payment of any and all loans and advances may make, execute and deliver promissory notes or other evidences of indebtedness and liabilities of the Corporation, may mortgage, pledge, hypothecate or transfer any real or personal property at any time owned or held by the Corporation, and to that end execute instruments of mortgage or pledge or otherwise transfer such property. SECTION 3. Checks, Drafts, etc. All checks, drafts, bills of exchange or other orders for the payment of money, obligations, notes or other evidences of indebtedness, bills of lading, warehouse receipts and insurance certificates of the Corporation, shall be signed or endorsed by the Chairman and Chief Executive Officer, the President and Chief Operating Officer or such other Executive Officer or Other Officer, agent, attorney, or employee of the Corporation as shall from time to time be determined by the Board of Directors, the Chairman and Chief Executive Officer or the President and Chief Operating Officer. SECTION 4. Proxies in Respect of Securities of Other Corporations. The Chairman and Chief Executive Officer, the President and Chief Operating Officer and such other Executive or Other Officers as are designated by the Chairman and Chief Executive Officer or the President and Chief Operating Officer are authorized to vote by casting a ballot in person or by voting by proxy on behalf of the Corporation the shares owned by the Corporation of the stock or other securities in any other Corporation at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation. ARTICLE VIII Indemnification The Corporation shall, and by reason of the enactment of this By-Law hereby does, indemnify each and every individual (including his or her heirs, executors and assigns) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "Proceeding"), by reason of the fact that he or she is or was a director, Executive Officer or Other Officer of the Corporation, or, while a director, Executive Officer or Other Officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter as "Indemnitee"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with such action, suit or proceeding, to the full extent that it has the power to do so under Delaware Law. Such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled under the Certificate of Incorporation or under any agreement, contract of insurance, vote of stockholders or disinterested directors, or otherwise, or of the broader power of the Corporation to indemnify a director, Executive Officer, Other Officer, employee or agent of the Corporation as authorized by Delaware Law. ARTICLE IX Definitions For purposes of these By-Laws, the following terms shall have the meanings set forth below: "Certificate of Incorporation" shall mean the Certificate of Incorporation of the Corporation, as from time to time amended. "Corporation" shall mean Triarc Companies, Inc. "Delaware Law" shall mean the General Corporation Law of the State of Delaware, as amended from time to time. "Executive Officers" shall have the meaning set forth in Section 1 of Article V of these By-Laws. "Indemnitee" shall have the meaning set forth in Section 1 of Article VIII of these By-Laws. "Other Officer" shall have the meaning set forth in Section 2 of Article V of these By-Laws. "Person" shall mean any individual, firm, corporation or other entity. "Proceeding" shall have the meaning set forth in Section 1 of Article VIII of these By-Laws. "Voting Shares" shall mean any issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. ARTICLE X Miscellaneous SECTION 1. Books and Records. The books and records of the Corporation may be kept at such places within or without the State of Delaware as the Board of Directors may from time to time determine. The stock record books and the blank stock certificate books shall be kept by the Secretary or by any other officer or agent designated by the Board of Directors. SECTION 2. Dividends and Reserves. The Board of Directors, from time to time, may determine whether any, and, if any, what part of the net profits of the Corporation, or of its net assets in excess of its capital, available therefor pursuant to law and the Certificate of Incorporation, shall be declared by it as dividends on the stock of the Corporation. The Board of Directors, in its discretion, in lieu of declaring any such dividend, may use and apply any of such net profits or net assets as a reserve for working capital, to meet contingencies, for the purpose of maintaining or increasing the property or business of the Corporation or for any other lawful purpose which it may think conducive to the best interests of the Corporation. SECTION 3. Seal. The corporate seal of the Corporation shall be in the form of a circle and shall bear the name of the Corporation and the year and state of its incorporation. SECTION 4. Fiscal Year. The fiscal year of the Corporation shall end on the Sunday that is closest to December 31 of each year unless the Board of Directors shall determine otherwise. ARTICLE XI Amendments All By-laws of the Corporation shall be subject to alteration, amendment or repeal, in whole or in part, and new By-laws not inconsistent with Delaware law or any provision of the Certificate of Incorporation may be made by a vote of two-thirds of the entire Board of Directors that would be in office if no vacancy existed, whether or not present at a meeting; provided, however, that any By-laws made, amended or repealed by the Board of Directors may be amended or repealed, and any By-laws may be made, by the stockholders of the Corporation by vote of a majority of the holders of shares of stock of the Corporation entitled to vote in the election of directors of the Corporation. EX-4.1 3 ex12a.txt SUPPLEMENTAL INDENTURE 8 ` Exhibit 4.1 SUPPLEMENTAL INDENTURE NO. 8 dated as of November 14, 2000 among SBG HOLDINGS INC., and SNAPPLE BEVERAGE GROUP, INC., as Issuers, the SUBSIDIARY GUARANTORS party hereto, and THE BANK OF NEW YORK, as Trustee 10-1/4% Senior Subordinated Notes due 2009 SUPPLEMENTAL INDENTURE No. 8 dated as of November 14, 2000 (this "Supplemental Indenture"), among SBG Holdings Inc., a Delaware corporation, (the "Company"), and Snapple Beverage Group, Inc., a Delaware corporation, as issuers (collectively, the "Issuers"), the Subsidiary Guarantors parties hereto and The Bank of New York, as trustee (the "Trustee"). RECITALS WHERAS, the Issuers, the Subsidiary Guarantors and the Trustee entered into the Indenture dated as of February 25, 1999 (as supplemented by Supplemental Indenture No. 1 dated as of February 26, 1999, Supplemental Indenture No. 2 dated as of September 8, 1999, Supplemental Indenture No. 3 dated as of December 16, 1999, Supplemental Indenture No. 4 dated as of January 2, 2000, Supplemental Indenture No. 5 dated as of October 25, 2000, Supplemental Indenture No. 6 dated as of October 25, 2000, Supplemental Indenture No. 7 dated as of October 25, 2000, and as otherwise supplemented and amended from time to time, the "Indenture"), relating to the Issuers' 10 1/4 % Senior Subordinated Notes due 2009 (the "Notes"); and WHEREAS, Section 9.02 of the Indenture provides, among other things, that with the written consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes, the Issuers, the Trustee, and the Subsidiary Guarantors may amend or supplement the Notes or the Indenture; and WHEREAS, the Notes constitute the only series of securities outstanding under the Indenture; and WHEREAS, all action on the part of the Company necessary to authorize its execution, delivery and performance of the Indenture has been duly taken; and WHEREAS, the Company has solicited the consents of the Holders of the Notes to certain amendments to the Indenture pursuant to that certain Consent Solicitation Statement dated November 7, 2000; and WHEREAS, Holders of not less than a majority in aggregate principal amount of the outstanding Notes have consented to the amendments and instruments evidencing such consent have been delivered to the Trustee; and WHEREAS, the Company desires and has requested Snapple Beverage Group, Inc, the Subsidiary Guarantors, and the Trustee to join in the execution and delivery of this Supplemental Indenture for the purpose of amending the Indenture; AGREEMENT NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, it is mutually covenanted and agreed for the equal and ratable benefit of all Holders of the Notes as follows: Section 1. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture. Section 2. When used herein, "Tender Offer Completion Event" shall mean such time as each of the following events shall have occurred; (i) the Company shall have completed a tender offer in accordance with the terms and conditions set forth in the Company's Letter to Holders dated November 8, 2000, and (ii) each Holder that has tendered its Notes pursuant to the tender offer shall have received payment for any Notes purchased pursuant to the tender offer. Section 3. Upon the occurrence of the Tender Offer Completion Event, Section 1.01 of the Indenture shall be amended by deleting the definition of each term that is used in the Indenture only in the Sections or subsections thereof that are deleted pursuant to Section 4 and Section 5, hereof. Section 4. Upon the occurrence of the Tender Offer Completion Event, the following sections of the Indenture, together with all references to those sections and definitions used exclusively in those sections, will be deleted in their entirety, unless otherwise specified, and replaced with the words "Intentionally Omitted": SECTION 4.06. (Limitation on Indebtedness); SECTION 4.07. (Limitation on Restricted Payments); SECTION 4.08. (Limitation on Restrictions on Distributions from Restricted Subsidiaries); SECTION 4.09 (Limitation on Sales of Assets and Subsidiary Stock); SECTION 4.10. (Limitation on Affiliate Transactions); SECTION 4.11. (Limitation on Liens); SECTION 4.14. (Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries); SECTION 4.17. (Maintenance of Properties and Insurance); and SECTION 4.18. (Additional Subsidiary Guarantees). Section 5. Upon the occurrence of the Tender Offer Completion Event, the following sections of the Indenture, together with all references to those sections and definitions used exclusively in those sections, will be amended as follows: SECTION 4.04. (SEC Reports) is hereby amended to state, in its entirety, the following: All obligors on the Notes will comply with Section 314(a) of the TIA. SECTION 5.01 (Consolidation, Merger or Sale of Assets by the Company) is hereby amended to state, in its entirety, the following: (a) The Company shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of related transactions, all or substantially all its assets to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company under the Notes and this Indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and (iii) the Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; provided that any such transaction shall not have as one of its purposes the evasion of the foregoing limitations. SECTION 5.03 (Consolidation, Merger or Sale of Assets by a Material Subsidiary Obligor) is hereby amended to state, in its entirety, the following: (a) No Material Subsidiary Obligor shall consolidate with or merge with or into (unless such Material Subsidiary Obligor or an Issuer or any Wholly-Owned Subsidiary that is or becomes a Subsidiary Guarantor concurrently with such transaction is the surviving Person and a Wholly Owned Subsidiary, after giving effect to such transaction or the Company is the surviving Person), or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all its assets to, any Person (other than an Issuer or any Wholly Owned Subsidiary that is or becomes a Subsidiary Guarantor concurrently with such transaction) unless: (i) except as set forth in Section 5.03(b), the resulting, surviving or transferee Person shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of such Material Subsidiary Guarantor under the Notes or its Subsidiary Guarantee, as the case may be, and this Indenture; and (ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing. All the Subsidiary Guarantees issued pursuant to clause (i) above shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof. (b)(i) The requirements of clause (i) of Section 5.03(a) will not apply in the case of a sale or other disposition (including by way of consolidation or merger) of a Material Subsidiary Obligor or the sale or disposition of all or substantially all the assets of a Material Subsidiary Obligor (in each case other than to the Company or an Affiliate of the Company) otherwise permitted by this Indenture (and in compliance with clause (ii) of Section 5.03(a)). Upon delivery by the Issuers to the Trustee of an Officer's Certificate and an Opinion of Counsel to the effect that a sale or other disposition of a Material Subsidiary Obligor was made by the Issuers in accordance with the applicable provisions of this Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of such Material Subsidiary Obligor from its obligations under the Notes or its Subsidiary Guarantee, as the case may be, and the Indenture. (ii) Triarc Beverage shall not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Person unless concurrently therewith, a corporate Restricted Subsidiary of the Company (which may be the successor to Triarc Beverage as a result of such transaction) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of an Issuer under the Notes and this Indenture. SECTION 6.01 (Events of Default) is hereby amended as follows: The text of subsections 6.01(e), and 6.01(f) is deleted and replaced with the text "Intentionally Omitted". Subsection 6.01(c) is hereby amended to state, in its entirety, the following: (c) the failure by the Issuers to comply with their obligations under Article 5 above and under Section 4.13. SECTION 6.02 (Acceleration) is hereby amended to state, in its entirety, the following: (a) If an Event of Default (other than an Event of Default specified in clause (g) or (h) of Section 6.01 that occurs with respect to an Issuer) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 50% in aggregate principal amount of the Notes then Outstanding, by written notice to the Issuers (and to the Trustee if such notice is given by the Holders (the "Acceleration Notice")), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon a declaration of acceleration, such principal, premium, if any, and accrued interest shall be immediately due and payable; provided that if any Designated Senior Indebtedness is outstanding, such principal, premium and interest shall not become due and payable until five Business Days after the Representatives of all the issues of Designated Senior Indebtedness receive notice of such acceleration. If an Event of Default specified in clause (g) or (h) of Section 6.01 occurs with respect to an Issuer, the principal of, premium, if any, and accrued interest on the Notes then Outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. (b) If payment of the Notes is accelerated because of an Event of Default, the Issuers or the Trustee shall promptly notify the holders of Designated Senior Indebtedness or the Representative of such holders of the acceleration. If any Designated Senior Indebtedness is outstanding upon such declaration of acceleration, neither the Issuers nor any Subsidiary Guarantor may pay the Notes until five Business Days after the Representatives of all issues of Designated Senior Indebtedness receive notice of such acceleration and, thereafter, the Issuers or any Subsidiary Guarantor may pay the Notes only if this Indenture otherwise permits payment at that time. Section 6. If any provision of this Supplemental Indenture limits, qualifies or conflicts with the duties imposed by operation of Section 318(c) of the Trust Indenture Act of 1939, the imposed duties shall control. Section 7. This Supplemental Indenture shall be governed by, and construed in accordance with the laws of the State of New York, without giving effect to any principles or conflicts of laws to the extent that the application of the law of another jurisdiction would be required thereby. Section 8. All agreements of the Issuers and the Subsidiary Guarantors in this Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successor. Section 9. This Supplemental Indenture may be signed in various counterparts which together shall constitute one and the same instrument. Section 10. The recitals herein contained are made by the Company and the Successor, and the Trustee assumes no responsibility for the correctness thereof. Section 11. This Supplemental Indenture is an amendment supplemental to the Indenture and the said Indenture and Supplemental Indenture shall henceforth be read together. Section 12. In case any one or more of the provisions in this Supplemental Indenture shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality, enforceability, of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law. IN WITNESS WHEREOF, the parties have duly executed and delivered this Supplemental Indenture or have caused this Supplemental Indenture to be duly executed on their respective behalf by their respective officers thereunder duly authorized, as of the day and year first written. SNAPPLE BEVERAGE GROUP, INC., as Issuer By: BRUCE FUTTERER ------------------------------- Name: Bruce Futterer Title:Treasurer and Secretary SBG HOLDINGS INC., as Issuer By: BRUCE FUTTERER ------------------------------- Name: Bruce Futterer Title:Treasurer and Secretary RCAC, LLC as a Subsidiary Guarantor By: STUART I. ROSEN ------------------------------- Name: Stuart I. Rosen Title:Senior Vice President ARBY'S ACQUISITION, LLC as a Subsidiary Guarantor By: STUART I. ROSEN ------------------------------- Name: Stuart I. Rosen Title:Senior Vice President MISTIC BRANDS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President STEWART'S BEVERAGES, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Vice President OLD SAN FRANCISCO SELTZER, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Vice President FOUNTAIN CLASSICS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Vice President SNAPPLE BEVERAGE CORP. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President SNAPPLE INTERNATIONAL CORP. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President SNAPPLE CARIBBEAN CORP. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President SNAPPLE WORLDWIDE CORP. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President SNAPPLE FINANCE CORP. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President PACIFIC SNAPPLE DISTRIBUTORS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President MR. NATURAL, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President MILLROSE DISTRIBUTORS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President MPAS HOLDINGS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President MILLROSE, L.P. as a Subsidiary Guarantor By: MILLROSE DISTRIBUTORS, INC., as general partner By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President PROMOCIONES HOLDINGS, LLC as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Authorized Signatory SNAPPLE DISTRIBUTORS OF LONG ISLAND, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President KELRAE, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Authorized Signatory RC LEASING, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President ROYAL CROWN BOTTLING COMPANY OF TEXAS as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President ROYAL CROWN COMPANY, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President RETAILER CONCENTRATE PRODUCTS, INC. as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President TRIBEV CORPORATION as a Subsidiary Guarantor By: GARY G. LYONS ------------------------------ Name: Gary G. Lyons Title: Senior Vice President THE BANK OF NEW YORK, as Trustee By: JULIE SALOVITCH-MILLER ----------------------------- Name: Julie Salovitch-Miller Title: Vice President EX-4.2 4 indarb.txt INDENTURE ARBY'S Exhibit 4.2 INDENTURE dated as of November 21, 2000 among ARBY'S FRANCHISE TRUST, as Issuer, AMBAC ASSURANCE CORPORATION, as Insurer and BNY MIDWEST TRUST COMPANY, A BANK OF NEW YORK COMPANY as Indenture Trustee TABLE OF CONTENTS ARTICLE ONE DEFINITIONS SECTION 1.01 Definitions.................................................... SECTION 1.02 Interpretation................................................. ARTICLE TWO THE NOTES SECTION 2.01 Forms Generally................................................ SECTION 2.02 Forms of Notes and Certificates of Authentication.............. SECTION 2.03 Authorized Amount; Denominations............................... SECTION 2.04 Execution, Authentication, Delivery and Dating................. SECTION 2.05 Registration of Notes, Registration of Transfers and Exchange.. SECTION 2.06 Mutilated, Defaced, Destroyed, Lost or Stolen Notes............ SECTION 2.07 Payment of Principal and Interest; Principal and Interest Rights Preserved...................................................... SECTION 2.08 Persons Deemed Owners.......................................... SECTION 2.09 Cancellation................................................... SECTION 2.10 Tax Purposes................................................... SECTION 2.11 Withholding Tax................................................ SECTION 2.12 Actions Under the Policy....................................... SECTION 2.13 Subrogation Rights of the Insurer; Payment of Reimbursements... SECTION 2.14 Additional Covenant of the Insurer............................. SECTION 2.15 Policy Account................................................. ARTICLE THREE REPRESENTATIONS AND COVENANTS SECTION 3.01 Payment of Principal and Interest.............................. SECTION 3.02 Maintenance of Office or Agency................................ SECTION 3.03 Money for Note Payments to Be Held in Trust.................... SECTION 3.04 Existence of the Issuer........................................ SECTION 3.05 Protection of Trust Estate..................................... SECTION 3.06 Performance of Obligations..................................... SECTION 3.07 Negative Covenants............................................. SECTION 3.08 Issuer May Not Consolidate, Etc., Without Consent.............. SECTION 3.09 Successor Substituted.......................................... SECTION 3.10 No Other Business.............................................. SECTION 3.11 Indebtedness................................................... SECTION 3.12 Representations and Warranties................................. SECTION 3.13 Note Interest Amount; Note Principal Amount.................... SECTION 3.14 Affirmative Covenants.......................................... SECTION 3.15 Further Assurances............................................. SECTION 3.16 Financial Covenants............................................ ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 4.01 Satisfaction and Discharge of Indenture........................ SECTION 4.02 Application of Trust Money..................................... SECTION 4.03 Reinstatement.................................................. ARTICLE FIVE REMEDIES SECTION 5.01 Events of Default.............................................. SECTION 5.02 Insurer Defaults............................................... SECTION 5.03 [Reserved]..................................................... SECTION 5.04 [Reserved]..................................................... SECTION 5.05 Acceleration of Maturity; Rescission and Annulment............. SECTION 5.06 Enforcement; Recourse Limited to Collateral.................... SECTION 5.07 Application of Monies Collected by Indenture Trustee........... SECTION 5.08 Waiver of Appraisement, Valuation, Stay and Right to Marshaling. SECTION 5.09 Remedies Cumulative; Delay or Omission Not a Waiver............ SECTION 5.10 Control by the Insurer......................................... ARTICLE SIX THE INDENTURE TRUSTEE SECTION 6.01 Certain Duties and Responsibilities............................ SECTION 6.02 Notice of Default.............................................. SECTION 6.03 Certain Rights of Indenture Trustee............................ SECTION 6.04 Not Responsible for Recitals or Issuance of Notes.............. SECTION 6.05 May Hold Notes................................................. SECTION 6.06 Money Held in Trust............................................ SECTION 6.07 Compensation and Reimbursement................................. SECTION 6.08 Resignation and Removal; Appointment of Successor.............. SECTION 6.09 Acceptance of Appointment by Successor......................... SECTION 6.10 Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.............................................. SECTION 6.11 Limitation of Liability........................................ ARTICLE SEVEN [RESERVED] ARTICLE EIGHT SUPPLEMENTAL INDENTURES SECTION 8.01 Supplemental Indentures Without Consent of Noteholders......... SECTION 8.02 Consents to Supplemental Indentures............................ SECTION 8.03 Execution of Supplemental Indentures........................... SECTION 8.04 Effect of Supplemental Indentures.............................. SECTION 8.05 Reference in Notes to Supplemental Indenture................... ARTICLE NINE REDEMPTION OF NOTES SECTION 9.01 Optional Redemption, Election to Redeem......................... SECTION 9.02 Notice to Indenture Trustee, and Insurer of Optional Redemption. SECTION 9.03 Notice of Optional Redemption or Maturity by the Issuer......... SECTION 9.04 Notes Payable on Optional Redemption Date....................... SECTION 9.05 Mandatory Redemption............................................ ARTICLE TEN COLLECTION OF FUNDS AND MAINTENANCE OF ACCOUNTS SECTION 10.01 Segregation of Money.......................................... SECTION 10.02 Collection Account; Canadian Sub-Account...................... SECTION 10.03 Disbursement of Monies from Collection Account. Distribution of Available Funds............................................... SECTION 10.04 Reports....................................................... SECTION 10.05 [Reserved].................................................... SECTION 10.06 Notices to the Insurer and the Rating Agencies................ SECTION 10.07 Debt Service Reserve Account.................................. SECTION 10.08 Seasonality Coverage Account.................................. SECTION 10.09 Indemnification Account....................................... ARTICLE ELEVEN SUBSTITUTION OF DEBTOR SECTION 11.01 Conditions to Substitution.................................... SECTION 11.02 No Regard to Consequences for Individual Holders.............. SECTION 11.03 Effect of Substitution........................................ ARTICLE TWELVE MISCELLANEOUS SECTION 12.01 Form of Documents Delivered to Indenture Trustee.............. SECTION 12.02 Governing Law................................................. SECTION 12.03 Notices, Etc. to Indenture Trustee, Issuer, Insurer, the Ratings Agencies and the Servicers............................ SECTION 12.04 Notices and Reports to Noteholders; Waiver of Notice.......... SECTION 12.05 Effect of Headings and Table of Contents...................... SECTION 12.06 Successors and Assigns........................................ SECTION 12.07 Severability.................................................. SECTION 12.08 Benefits of Indenture......................................... SECTION 12.09 Counterparts.................................................. SECTION 12.10 Submission to Jurisdiction.................................... SECTION 12.11 Resignation or Removal of a Servicer.......................... SECTION 12.12 Calculations.................................................. SECTION 12.13 Prescription.................................................. SECTION 12.14 No Petition................................................... EXHIBIT A-1 FORM OF TEMPORARY REGULATION S GLOBAL NOTE EXHIBIT A-2 FORM OF PERMANENT REGULATION S GLOBAL NOTE EXHIBIT B FORM OF RULE 144A GLOBAL NOTE EXHIBIT C FORM OF DEFINITIVE NOTE EXHIBIT D FORM OF REGISTERED NOTE EXHIBIT E FORM OF CLEARANCE CERTIFICATE FOR DELIVERY OF PERMANENT REGULATION S GLOBAL NOTES EXHIBIT F FORM OF CERTIFICATE OF NON- U.S. OWNERSHIP EXHIBIT G FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER OF NOTES (RULE 144A) EXHIBIT H FORM OF TRANSFEREE CERTIFICATE FOR TRANSFER OF NOTES (RULE 144A) EXHIBIT I FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER OF NOTES (REGULATION S) EXHIBIT J FORM OF TRANFEREE CERTIFICATE FOR TRANSFER OF NOTES (REGULATION S) EXHIBIT K FORM OF DTC NOTICE TO INVESTORS EXHIBIT L TARGETED PRINCIPAL AMORTIZATION SCHEDULE EXHIBIT M FORMS OF REPORTS INDENTURE, dated as of November 21, 2000, among ARBY'S FRANCHISE TRUST, a business trust formed under the laws of the State of Delaware (the "Issuer"), AMBAC ASSURANCE CORPORATION, a Wisconsin stock insurance corporation (the "Insurer"), and BNY MIDWEST TRUST COMPANY, A BANK OF NEW YORK COMPANY, an Illinois banking corporation, as indenture trustee (in such capacity, together with its permitted successors and assigns in such capacity, the "Indenture Trustee"). PRELIMINARY STATEMENT The Issuer is duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided in this Indenture. All covenants and agreements made by the Issuer herein are for the benefit and security of the Secured Parties. Concurrently with the execution of this Indenture and the issuance of the Notes and subject to the terms and conditions contained in the Insurance Agreement, the Insurer will issue and deliver to and in favor of the Indenture Trustee for the benefit of the Noteholders the Policy which, subject to certain terms and conditions contained therein, unconditionally and irrevocably guarantees the payment of interest payable on each Payment Date (other than Additional Interest) and payment of any Aggregate Outstanding Principal Amount remaining on the Legal Final Payment Date to the Noteholders. The Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms have been done. GRANTING CLAUSES To secure (A) the payment of the principal of and interest on the Notes authenticated and delivered hereunder, (B) the payment of amounts due and payable to the Insurer as provided herein and in the Insurance Agreement (including but not limited to the Premium), (C) the payment to the Indenture Trustee of all Indenture Trustee Fees if and when due and payable as provided in this Indenture and (D) the payment and performance of all other obligations, covenants and liabilities of the Issuer arising under this Indenture, the Notes and the Insurance Agreement, the Issuer hereby Grants a security interest to the Indenture Trustee, for the benefit and security of the Secured Parties, in all of its right, title and interest, whether now owned or hereafter acquired, in and to all accounts, contract rights, general intangibles, chattel paper, instruments, financial assets, documents, money, deposit accounts, certificates of deposit, goods, letters of credit, advices of credit, and certificated and uncertificated securities consisting of, arising from, or relating to: (i) the Franchisee Payments and Franchise Documents, including the present and continuing exclusive right, remedy, power and authority to exercise each and every right, remedy, power and authority of the Issuer under or in respect of the Franchisee Payments and Franchise Documents but excluding the Pre-Cut-Off Date Franchisee Payments; (ii) the present and continuing exclusive right, power and authority, subject to the provisions of the Servicing Agreements, to make claim for, collect, receive and make receipt for any of the sums, amounts, income, revenues, issues, profits and proceeds under, on account of or with respect to, the Franchise Assets (excluding the Pre-Cut-Off Date Franchisee Payments), including, without limitation, all payments made in respect thereof, voluntary or involuntary, whether upon maturity, prepayment, acceleration, conversion, liquidation, casualty or otherwise and paid from any source (including both timely and delinquent payments); (iii) all monies and securities from time to time held by the Indenture Trustee in any Account created under the terms of this Indenture and all interest, profits, proceeds, or other income derived from such moneys and securities; (iv) the Transaction Documents, including the present and continuing exclusive right, power and authority to exercise each and every right, remedy, power and authority of the Issuer thereunder; (v) the present and continuing exclusive right, power and authority, subject to the provisions of the Servicing Agreements and this Indenture, to give and receive notices and other communications, to make waivers or other agreements in respect of, or to make claims for and demand performance on, under or pursuant to any of the Franchise Assets, to bring actions and proceedings thereunder or for the enforcement thereof, and to exercise all remedies, powers, privileges and options and to do any and all things which the Issuer is or may become entitled to do under or in respect of the Franchise Assets; (vi) any and all property of every name and nature, now or hereafter transferred, mortgaged, pledged or assigned as security or additional security for payment or performance of any obligation of the Franchisees to the Issuer under the Franchise Documents or otherwise, and the liabilities, obligations and the indebtedness evidenced thereby or reflected therein; and (vii) all income, revenues, issues, products, revisions, substitutions, replacements, profit and proceeds of and from all of the foregoing (collectively, the "Collateral"). The Indenture Trustee acknowledges each such Grant, accepts the trusts hereunder in accordance with the provisions hereof and agrees to perform the duties expressly set forth herein. ARTICLE ONE DEFINITIONS SECTION 1.01 Definitions. As used herein the following terms have the following meanings: "Account" shall mean any account or fund, and any subaccount thereof, established under Article Ten hereof. "Accountants' Certificate" shall mean a certificate of any firm of independent certified public accountants of national reputation in the United States. "Accounting Date" shall mean, with respect to any Payment Date, the 10th calendar day of the calendar month of such Payment Date or if such day is not a Business Day, the next succeeding Business Day. "Accrual Period" shall mean, with respect to any Payment Date, the period from and including the prior Payment Date to but excluding such Payment Date. For purposes of the first Payment Date, the Accrual Period will be the period from and including the Closing Date to but excluding December 20, 2000. "Additional Interest" shall mean any interest accrued at the Note Rate on overdue interest on the Notes to the extent permitted by law. "Additional Premium Amount" shall mean the amount equal to the sum of the Incremental Additional Premiums. "Advertising Fees" shall mean an advertising and marketing fee payable by the Franchisee to the Franchisor pursuant to the U.S. Franchise Agreements of up to two percent (2%) of monthly Gross Sales (or up to 1.5% of monthly Gross Sales under certain Franchise Agreements as specified therein) or such other greater percentage of which the Indenture Trustee and the Insurer shall have been given notice by the American Servicer certifying that such greater percentage has been established for new U.S. Franchise Agreements (and American Servicer shall, upon the request of either the Indenture Trustee or the Insurer, deliver such substantiation thereof as may reasonably be requested by the Insurer or the Indenture Trustee). For avoidance of doubt, the Advertising Fees received by the Issuer will not be part of the Trust Estate. "Affiliate" of any specified Person shall mean any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Members" shall mean members of, or participants in, Euroclear or Clearstream. "Aggregate Outstanding Principal Amount" shall mean, when used with respect to any Outstanding Note or all Outstanding Notes, the aggregate unpaid principal amount of such Note or Notes at the date of determination, provided, however, to the extent that principal of the Notes has been paid with the proceeds of the Policy, such principal amount shall continue to remain unpaid for purposes of this definition until the Insurer has been paid such principal amount as subrogee hereunder or reimbursed pursuant to the Insurance Agreement, in either such case, as evidenced by a written notice from the Insurer delivered to the Indenture Trustee and the Issuer (such notice not to be unreasonably withheld or delayed). "American Servicer" shall mean Arby's, as servicer under the American Servicing Agreement, until a successor Person shall have become the American Servicer pursuant to the provisions of the American Servicing Agreement and thereafter "American Servicer" shall mean such successor Person. "American Servicing Agreement" shall mean the Servicing Agreement, dated as of the Closing Date, among the Issuer, the American Servicer and the Indenture Trustee, and if from time to time amended as permitted therein and herein, as so amended. "Applicable Procedures" shall have the meaning set forth in Section 2.05(c) of this Indenture. "Arby's" shall mean Arby's, Inc., a Delaware corporation. "Arby's IP" shall mean all of Arby's trademarks and service marks, whether registered or unregistered and whether currently used or hereafter developed, trademark applications and trademark registrations, and all of Arby's other intellectual property rights, in each case currently or hereafter employed by Arby's in connection with the Arby's(R) branded business, including all of Arby's rights to the current and hereafter developed proprietary and/or confidential information, inventions, discoveries, patents, trade names, logos, trade dress, art work, copyrights, moral rights, jingles, software, shop rights, licenses, developments, research data, designs, technology, test procedures, processes, route lists, computer programs, computer discs, computer tapes, literature, know-how, systems of operation, procedures, trade secrets, techniques, standards, specifications and domain names that are necessary to (i) offer and sell Arby's(R) branded franchises in the United States and Canada, (ii) serve as "Franchisor" under the Franchise Agreements and (iii) otherwise administer the Arby's(R) branded franchise network in the United States and Canada. Arby's IP does not include any trademarks or intellectual property rights, currently or hereafter employed by Arby's in connection with non-Arby's(R) branded products whether or not sold in Arby's(R) branded restaurants. "Authenticating Agent" shall mean with respect to any Notes, the Indenture Trustee, or any other Person authorized by the Indenture Trustee to authenticate any Notes. "Authorized Insurer Representative" means a Managing Director, Director, First Vice President, Vice President, General Counsel or Assistant General Counsel of the Insurer or any other officer, employee or other agent of the Insurer who is authorized to give or receive instructions or notices or otherwise to act hereunder on behalf of the Insurer. "Authorized Officer" shall mean, (i) in the case of the Issuer, shall mean an "authorized officer" of the Issuer Trustee or an officer of the Trust as defined in the Trust Agreement, (ii) in the case of a Servicer, shall mean any Vice President or more senior officer or controller thereof, (iii) in the case of the Indenture Trustee, shall mean a Responsible Officer of such Indenture Trustee and (iv) with respect to any other Person (other than the Insurer) any director, officer, managing director or any other Person appointed as attorney-in-fact who is authorized to act for such Person in matters relating to, and binding upon, such Person. Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the authority of any person to act, and such certification may be considered to be in full force and effect until receipt by such other party of written notice to the contrary. "Available Funds" shall mean, with respect to a Payment Date, (i) any and all amounts held in the Collection Account (other than Excluded Fees) on the related Accounting Date representing Franchisee Payments which were received in the related Collection Period; (ii) the Debt Service Release Amount and any Cash Trap Excess released from the Debt Service Reserve Account; (iii) Capital Contributions; (iv) the Seasonality Release Amount; and (v) Investment Income on the Collection Account and Seasonality Coverage Account. "Bankruptcy Code" shall mean Title 11 of the United States Code, as amended. "Bloomberg Financial Markets Commodities News" shall mean the financial news service provided by Bloomberg and its affiliates. "BOA Lockbox Agreement" shall mean the Multi-Party Agreement Relating to Lockbox Services dated as of November 21, 2000 among Bank of America, the Issuer, Arby's, the Trustee and the Insurer, and if from time to time amended, as so amended. "Breach" shall have the meaning set forth in Section 5.01(l) of this Indenture. "Business Day" shall mean a day other than a Saturday, Sunday or a day on which banking institutions located in the City of New York, New York, in Wilmington, Delaware or in the city, state or province where the principal offices of each of the Indenture Trustee and the Servicers are located, are authorized or obligated by law, regulation or executive order to be closed. "Canadian Advertising Fees" shall mean an advertising and marketing fee payable by the Franchisee to the Franchisor pursuant to a Canadian Franchise Agreement for Canadian national advertising media (and related expenses) not to exceed three percent (3%) of the Franchisee's monthly Gross Sales or such other percentage of which the Indenture Trustee and the Insurer shall have been given notice by the Canadian Servicer certifying that such greater percentage has been established for new Canadian Franchise Agreements (and Canadian Servicer shall, upon the request of either the Indenture Trustee or the Insurer, deliver such substantiation thereof as may be reasonably requested by the Insurer or the Indenture Trustee). For avoidance of doubt, the Canadian Advertising Fees received by the Issuer will not be part of the Trust Estate. "Canadian Servicer" shall mean Arby's of Canada, Inc., as servicer under the Canadian Servicing Agreement, until a successor Person shall have become the Canadian Servicer pursuant to the provisions of the Canadian Servicing Agreement, and thereafter "Canadian Servicer" shall mean such successor Person. "Canadian Servicing Agreement" shall mean the Servicing Agreement dated as of the Closing Date, among the Issuer, the Canadian Servicer and the Indenture Trustee, and if from time to time amended as permitted therein and herein, as so amended. "Capital Contributions" shall mean capital contributions to the Issuer by FinCo. "Cash" shall mean such coin or currency of the United States of America as at the time shall be legal tender for payment of all public and private debts. "Cash Trap Event" shall for purposes hereof be deemed to have occurred if, on any Accounting Date, the Debt Service Coverage Ratio calculated as of the last day of the preceding Collection Period is less than the Minimum Debt Service Coverage Ratio, but greater than 1.20x; provided that such Cash Trap Event shall be deemed to continue until such time as the Minimum Debt Service Coverage Ratio is met for three consecutive Collection Periods calculated as of each related Accounting Date. "Cash Trap Excess" shall mean the amount by which the Debt Service Reserve Account exceeds the Minimum Debt Service Reserve Amount. "Cash Trap Reserve Amount" shall mean, for purposes of calculation on any Accounting Date (based on the preceding Collection Period), the sum of (i) the Minimum Funding Amount and (ii) the Residual Trap Amount. "Certificate" shall mean a certificate representing a beneficial interest in the Issuer. "Certificates of Authentication" shall have the meaning specified in Section 2.01 of this Indenture. "Certificateholder" shall mean a holder of the Certificate. "Clearance System" shall mean each of DTC, Euroclear and Clearstream. "Clearing Agency" shall mean an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "Clearstream" shall mean Clearstream Banking, societe anonyme, a professional depositary incorporated under the laws of Luxembourg, and any successors thereto. "Closing Date" shall mean November 21, 2000. "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. "Collateral" shall have the meaning set forth in the Granting Clauses hereof. "Collections" shall mean, with respect to any Collection Period, the sum of (i) all Franchisee Payments received in the Collection Account during such Collection Period and (ii) interest income earned during such Collection Period on the Collection Account. "Collection Account" shall mean the trust account (account no. 001629) established pursuant to Section 10.02 of this Indenture. "Collection Period" shall mean, with respect to each Payment Date, the period from and including the 1st day of the calendar month preceding the calendar month in which such Payment Date occurs through and including the last day of the calendar month preceding the calendar month in which such Payment Date occurs. "Common Depositary" shall mean DTC and its respective successors. "Competitor" shall mean any Person that is a direct or indirect franchisor, franchisee, owner or operator of a large regional or national quick service restaurant concept (including a franchisee of Arby's(R) branded restaurants); provided, however, that a person shall not be a "Competitor" solely by virtue of its direct and indirect ownership of less than 7% of the equity securities in a "Competitor"; provided, further, that a franchisee shall only be a "Competitor" if it directly or indirectly, owns in the aggregate 20 or more individual restaurant locations of a particular concept. "Contribution Agreement" shall mean any of the Initial Contribution Agreement, the Intermediate Contribution Agreement and the Final Contribution Agreement. "Controlling Party" means, as of any date of determination: (i) if no Insurer Default has occurred and is continuing as of such date of determination, the Insurer; (ii) if an Insurer Default has occurred and is continuing as of such date of determination, the Indenture Trustee; or (iii) (A) after the payment in full of the Notes, any Premium or Reimbursements owing to the Insurer and all other amounts owing to the Insurer under the Insurance Agreement and (B) the expiration of the Term of the Policy with respect to and as defined in the Policy, the Indenture Trustee; provided, however, that, to the extent the Indenture Trustee is exercising rights as the Controlling Party under clause (ii) or clause (iii) of this definition, it shall do so only upon the written direction of the Holders of a Majority in Aggregate Outstanding Principal Amount. "Controlling Party Order" and "Controlling Party Request" mean, respectively, a written order or request signed on behalf of the Controlling Party (if and for so long as it is the Insurer, by any Authorized Insurer Representative) and delivered to the Indenture Trustee and the Issuer. "Corporate Trust Office" shall mean the principal corporate trust office of the Indenture Trustee, which at the date of execution hereof is located at 2 North LaSalle, Suite 1020, Chicago, Illinois 60602, Attention: Indenture Trust Administration or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Insurer and the Issuer or the principal corporate trust office of any successor Indenture Trustee. "Cut-Off Date" shall mean October 31, 2000. "Debt Service" shall mean, with respect to any Payment Date, the sum of Interest Distribution for such Payment Date (without regard to clause (b) of the definition of Interest Distribution) plus the Targeted Principal Payments related to such Payment Date. "Debt Service Coverage Ratio" shall mean, for any Accounting Date, the ratio calculated (without rounding) by dividing (a) an amount equal to the aggregate Net Cash Flow for the immediately preceding four Collection Periods by (b) an amount equal to the Debt Service for the Payment Date to which such Accounting Date relates together with the Debt Service for the three preceding Payment Dates. "Debt Service Release Amount" shall mean (a) funds in the Debt Service Reserve Account in excess of the Maximum Debt Service Reserve Amount and (b) investment income earned on the Debt Service Reserve Account in the event that Minimum Debt Service Amount is met, and, in each case, shall be deemed to be Available Funds for application in accordance with the Priority of Payments. "Debt Service Reserve Account" shall mean the trust account (account no. 001632) established pursuant to Section 10.07 of this Indenture. "Debt Service Reserve Amount" shall mean funds held in the Debt Service Reserve Account. "Default" shall mean any event, circumstance or condition that, with notice or the lapse of time or both, will become an Event of Default. "Defective Franchise Agreement" shall mean a Franchise Agreement that breaches in any material respect the representations or warranties contained in Section 4.1(h) of any Contribution Agreement. "Definitive Notes" shall mean, with respect to the Notes, any securities in fully registered form substantially in the form set forth in Exhibit C hereto which may be issued in exchange for Permanent Regulation S Global Notes pursuant to Section 2.02(a)(iv) of this Indenture. "Delinquent Franchisee" shall mean a Franchisee that is delinquent on its Franchisee Payments as of the end of the related Collection Period in which they were due. "Distribution Compliance Period" shall mean a period that begins on the later of (a) the date on which the Notes are first offered to Persons other than the Initial Purchasers in reliance upon Regulation S under the Securities Act and (b) the Closing Date, and continues until the end of a 40-day period from the date on which such period commenced. "DTC" shall mean The Depository Trust Company or any of its successors. "DTC Reference Directory" shall mean a directory distributed by DTC periodically to all DTC participants that includes (i) a list of all issuers who have advised DTC that they are issuing securities to Persons who are "qualified purchasers" within the meaning of Section 3(c)(7) of the Investment Company Act and (ii) CUSIP numbers for all such securities. "Eligible Institution" shall mean a depository institution organized under the laws of the United States of America or any one of the States thereof, the deposits of which depository institution are insured, to the full extent permitted by applicable law, by the FDIC through the Bank Insurance Fund, which is subject to supervision and examination by federal or state authorities and (a) whose long-term unsecured debt obligations are rated "AAA" by Standard & Poor's or whose short-term unsecured debt obligations are rated A-1+ by Standard & Poor's at the time of any deposit therein and (b) whose long-term unsecured debt obligations are rated "Aa3" by Moody's or whose short-term unsecured debt obligations are rated "P-1" by Moody's at the time of any deposit therein. "Eligible Investments" shall mean any of the following: (i) Government Obligations; or (ii) commercial paper having an original maturity of less than 270 days and a rating of "A-1" or higher by Standard & Poor's or "P-1" or higher by Moody's at the time of such investment; or (iii) certificates of deposit of, banker's acceptances issued by or federal funds sold by any depository institution or trust company (including the Indenture Trustee or any agent of the Indenture Trustee acting in its commercial capacity so long as it is an Eligible Institution) incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by federal and/or state authorities, so long as at the time of such investment or contractual commitment providing for such investment such depository institution or trust company has a long-term unsecured debt rating in the highest rating category of Standard & Poor's and Moody's, and provided that each such investment has an original maturity of less than 365 days, and any other demand or time deposit or certificate of deposit, which is fully insured by the FDIC through the Bank Insurance Fund and rated "A-1" by Standard & Poor's; or (iv) repurchase obligations with respect to (a) any security described in clause (i) collateralized at not less than 102% of the principal amount of such repurchase obligations or (b) any other security issued or guaranteed as to timely payment by an agency or instrumentality of the United States of America, collateralized at not less than 102% of the principal amount of such repurchase obligations in either case entered into with a depository institution or trust company (including the Indenture Trustee), acting as principal, whose obligations having the same maturity as that of the repurchase agreement would be Eligible Investments under clause (iii) above (provided that the counterparty is rated at least "A-1" by Standard & Poor's and "P-1" by Moody's); or (v) guaranteed investment contracts issued by any insurance company or other corporation having a claims paying ability rating, financial strength rating, counterparty risk rating, long-term unsecured debt rating or guaranteed by an entity with such rating in the highest rating category of Standard & Poor's and Moody's, at the time of such investment; or (vi) money market funds having ratings in the highest available rating category of Standard & Poor's and Moody's; or (vii) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (i) of the definition of "Government Obligations" or clause (ii) or (iii) of this definition of "Eligible Investments;" or (viii) investments in securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any State of the United States of America or by any political subdivision or taxing authority thereof, and rated at least "AAA" by Standard & Poor's or "Aaa" by Moody's; or (ix) investments approved in writing by the Controlling Party and that satisfy the Insurer Condition. "ERISA" shall mean the United States Employee Retirement Income Security Act of 1974, as amended. "ERISA Plans" shall mean "employee benefit plans" (as defined in Section 3(3) of ERISA) that are subject to Title I of ERISA. "Euroclear" shall mean Morgan Guaranty Trust Company of New York, Brussels office, in its capacity as operator of the Euroclear System, and any successors thereto. "Event of Default" shall have the meaning set forth in Section 5.01 of this Indenture. "Exchange Act" shall have the meaning set forth in Section 3.14(x) of this Indenture. "Excluded Fees" shall mean (i) Non-Branded Payments which are, in the aggregate, equal to an amount that is less than 3% of the total cumulative gross Franchisee Payments as of any date of determination within the 12-month period after the Cut-Off Date, and in any 12-month period thereafter, (ii) Advertising Fees, (iii) Canadian Advertising Fees and (iv) amounts payable in respect of the Canadian Franchise Agreements relating to the goods and services tax, the provincial tax and the harmonized sales tax. "Expected Priority Payments" shall mean an amount, calculated as of an Accounting Date for any related Payment Date, equal to the sum of (i) Ordinary SPV Operating Expenses, (ii) the Premium, (iii) Interest Distribution (without taking into account clause (b) of the definition thereof) and (iv) Targeted Principal Payments, in each case for the related Collection Period. "Final Contribution Agreement" shall mean the Contribution Agreement between FinCo and the Issuer dated as of the Closing Date, as the same may be amended and supplemented from time to time. "Financing Statements" shall mean financing statements relating to the Collateral naming the Issuer as debtor and the Indenture Trustee, on behalf of the Secured Parties, as secured party, and all financing statements relating to the Collateral naming a Transferor as debtor and the applicable Transferee, as secured party. "FinCo" shall mean Arby's Finance, LLC, a Delaware limited liability company. "Foreign Investor" shall mean any Noteholder or Note Owner who is not (i) an individual who is a citizen or resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof, (iii) a trust the administration of which is exercisable by a court in the United States and the authority to control all substantial decisions of which is exercisable by one or more United States Persons, or (iv) a Person otherwise subject to United States federal income taxation on its worldwide income. "Franchise Agreement" shall mean a franchise agreement with the Franchisor pursuant to which a Franchisee operates an Arby's(R) branded restaurant at a location in the United States or Canada. "Franchise Assets" shall mean the Franchise Documents and the right to receive Franchisee Payments after the Cut-Off Date. "Franchise Documents" shall mean the Franchise Agreements, MDA Agreements and LOA Agreements. "Franchise Fees" shall mean franchise fees payable under the Franchise Documents including without limitation, the License Fees, MDA Fees, LOA Fees and Transfer/Renewal Fees. "Franchise Royalties" shall mean royalty payments payable by a Franchisee to the Franchisor pursuant to a Franchise Agreement based upon the Royalty Rate multiplied by Gross Sales. "Franchisee" shall mean a Person identified as "Franchisee" pursuant to a Franchise Document. "Franchisee Payments" shall mean the payments payable under the Franchise Documents, including without limitation, Franchise Fees, Franchise Royalties and Non-Branded Payments, and shall include the right to receive all of the foregoing; provided, however, that Franchisee Payments shall not include payments related to Excluded Fees or any payments with respect to non-Arby's(R) branded products sold by Arby's or its Affiliates outside of the Restaurants. "Franchisor" shall mean, prior to the Closing Date, Arby's, and subsequent to the Closing Date, the Issuer. "Global Note" shall mean a Rule 144A Global Note or Regulation S Global Note. "Government Obligations" shall mean (i) non-callable direct obligations of, or non-callable obligations fully guaranteed by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America, or (ii) an investment in a no-load money market fund rated AAA-G or AAA-M by Standard & Poor's and Aaa by Moody's, the assets of which are invested solely in obligations described in clause (i) of this definition . "Governmental Authority" shall mean any governmental body, subdivision, board, official, authority, agency, court or arbitrator, domestic or foreign. "Grant" shall mean to grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of set-off against, deposit, set over and confirm. A Grant of the Collateral or of any other instruments shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including, without limitation, the immediate continuing right to claim for, collect, receive and receipt for Franchisee Payments in respect of the Collateral and all other monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto. "Gross Sales" shall mean the total amount received from the sale of all products and performance of all services on or from a Restaurant but excluding sales tax or any similar tax. "Holdings" shall mean Arby's Holdings, LLC, a Delaware limited liability company. "Incremental Additional Premium" shall mean, for each Accrual Period until the Incremental Additional Premium Payment Date, an amount equal to the Aggregate Outstanding Principal Amount multiplied by a rate of 6 basis points per annum. "Incremental Additional Premium Payment Date" shall mean the date upon which the payment in full of the Notes is made. "Indebtedness" shall mean, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person upon which interest charges are customarily paid, (iv) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (v) all obligations of such Person issued or assumed as the deferred purchase price of property or services, (vi) all obligations as lessee under any lease which shall have been or should be, in accordance with generally accepted accounting principles, treated as a capital lease, and (vii) all obligations under direct or indirect guarantees in respect of, and all obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of any other Person of the kinds referred to in clauses (i) through (vi) above; provided, however, that "Indebtedness" shall in no case be construed to include any obligations to any party arising under this Agreement or any Transaction Document or in respect of the Notes. "Indemnification Account" shall mean the trust account (account no. 001636) established pursuant to Section 10.09 of this Indenture. "Indemnification Amount" shall mean an amount payable by FinCo to the Issuer for each Defective Franchise Agreement equal to the product of (i) the quotient obtained by dividing (A) the aggregate Gross Sales (other than Gross Sales associated with Non-Branded Payments that constitute Excluded Fees) for the Restaurant associated with such Defective Franchise Agreement for the 12-month period immediately preceding the Cut-Off Date by (B) the aggregate Gross Sales (other than Gross Sales associated with Non-Branded Payments that constitute Excluded Fees) for all Restaurants for the 12-month period immediately preceding the Cut-Off Date, (ii) 66.67% (provided, however, if a Franchisee has more than 50% of its Franchise Agreements deemed to be defective, then with respect to such Franchisee, the Indemnification Amount shall be calculated at 100% and not 66.67%) and (iii) the Initial Principal Amount. "Indemnification Mandatory Redemption Event" shall mean the Accounting Date on which the aggregate Indemnification Amount on deposit in the Indemnification Account equals or exceeds $500,000. "Indemnitees" shall have the meaning set forth in Section 6.07(c) of this Indenture. "Indenture" shall mean this instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended. "Indenture Trustee" shall have the meaning ascribed thereto in the opening paragraph of this Indenture, or its successor appointed in accordance with Section 6.08 of this Indenture. "Indenture Trustee Fees" shall mean (x) all compensation and indemnification payable to the Indenture Trustee under the terms of this Indenture and (y) all expenses reasonably required to be incurred by or on behalf of the Indenture Trustee under the terms of this Indenture, including, without limitation, all fees, expenses and other amounts payable to the Indenture Trustee under Section 6.07 of this Indenture. "Independent Accountant" shall mean the firm of independent accountants appointed pursuant to each Servicing Agreement or any successor independent accountant. "Independent Accountant Fees" shall mean all fees payable to the Independent Accountants by the Issuer pursuant to or in connection with the fee letter dated November 20, 2000 between the Issuer and the Independent Accountants and any amendments or any successor letter thereto. "Industry Consultant" shall mean the consultant engaged pursuant to the Industry Consultant Letter. "Industry Consultant Fees" shall mean all fees and indemnities payable by the Issuer to the Industry Consultant pursuant to the fee letter related to the Industry Consultant Letter. "Industry Consultant Letter" shall mean the engagement letter dated October 24, 2000 pursuant to which the Insurer engaged the Industry Consultant to provide services as specified therein, and if from time to time amended, as so amended. "Initial Principal Amount" shall mean, with respect to any of the Notes, the initial principal amount of such Notes on the Closing Date. "Initial Purchasers" shall mean Morgan Stanley & Co. Incorporated and ING Baring (U.S.) Capital, LLC. "Insolvency Law" shall mean any applicable federal, state or provincial law relating to liquidation, insolvency, bankruptcy, rehabilitation, composition, reorganization, conservation or other similar law now or hereafter in effect. "Insurance Agreement" shall mean the Insurance Agreement dated as of the Closing Date among the Issuer, the Indenture Trustee, the Insurer, and the American Servicer, as amended or supplemented in accordance with the provisions thereof. "Insured Payments" shall have the meaning assigned thereto in the Policy. "Insurer" shall have the meaning ascribed thereto in the opening paragraph of this Indenture. "Insurer Condition" shall mean, with respect to any action hereunder, the reasonable satisfaction of the Insurer as determined in good faith that such action, if taken, would not adversely affect the rating of this transaction without regard to the Policy or the Insurer's capital charge attributable to the risk associated with this transaction, by either Rating Agency. "Insurer Default" shall have the meaning set forth in Section 5.02 of this Indenture. "Insurer Indemnities" shall mean indemnity payments payable to the Insurer and the Principal Reinsurer pursuant to the Insurance Agreement. "Intermediate Contribution Agreement" shall mean the Contribution Agreement between Holdings and FinCo dated as of the Closing Date, as the same may be amended and supplemented from time to time. "Interest Distribution" shall mean with respect to the Notes on any Payment Date, the sum of (a) the amount of interest accrued during the related Accrual Period at the Note Rate on the Aggregate Outstanding Principal Amount on the Business Day immediately prior to such Payment Date plus (b) any previously accrued and unpaid interest at the Note Rate for prior Payment Dates (including any Additional Interest). "Investment Company Act" shall mean the United States Investment Company Act of 1940, as amended and in effect from time to time. "Investment Income" shall mean the difference (but not below zero) of (i) the sum of all investment interest or other earnings on Accounts that are part of the Trust Estate, minus (ii) any investment losses incurred in respect of Accounts that are part of the Trust Estate. "IP Contribution Agreement" means the Contribution Agreement between Holdings and the IP Holder, as the same may be amended and supplemented from time to time. "IP Holder" shall mean Arby's IP Holder Trust, a Delaware statutory business trust formed pursuant to the IP Holder Trust Agreement. "IP Holder Trust Agreement" shall mean the Amended and Restated Trust Agreement dated as of November 21, 2000 between Wilmington Trust Company, a Delaware banking corporation acting not in its individual capacity but solely as trustee with respect to the IP Holder, or such successor person as shall become trustee pursuant to the IP Holder Trust Agreement, and Holdings. "IP Servicer" shall mean Arby's, as servicer under the IP Servicing Agreement, until a successor Person shall have become the IP Servicer pursuant to the provisions of the IP Servicing Agreement and the "IP Servicer" shall mean such successor Person. "IP Servicing Agreement" shall mean the Servicing Agreement, dated as of the Closing Date, between the IP Holder and the IP Servicer, and if from time to time as amended as permitted therein and herein, as so amended. "Issuer" shall have the meaning set forth in the opening paragraph of this Indenture. "Issuer Order" and "Issuer Request" shall mean a written order or request dated and signed in the name of the Issuer by two Authorized Officers of the Issuer. "Issuer's Office" shall mean the principal office of the Issuer to be maintained at 1000 Corporate Drive, Fort Lauderdale, Florida 33334-3651 pursuant to Section 3.02 of this Indenture. "Issuer Trustee" shall mean Wilmington Trust Company, a Delaware banking corporation, acting not in its individual capacity but solely as trustee with respect to the Issuer, or such successor Person as shall become trustee with respect to the Issuer pursuant to the applicable provisions of the Trust Agreement. "Legal Final Payment Date" shall mean December 20, 2020. "License Agreement" shall mean the License and Security Agreement (U.S. and Canada) dated the date hereof between the Issuer and the IP Holder, and if from time to time as amended as permitted therein and herein, as so amended. "License Fees" shall mean fees payable by a Franchisee upon its signing a Franchise Agreement subject to reduction by application of any previous deposits (including any allocable LOA Fees and MOA Fees) made by the Franchisee with Franchisor. "Lien" or collectively, "Liens," shall mean all liens, pledges, charges, encumbrances, security interests or other similar rights; provided that the term "Lien" or "Liens" shall not include (A) a license or right to use the Arby's IP by (x) Franchisees of Arby's in accordance with the terms of their respective Franchise Agreements and (y) AFA Service Corporation, AFC Advertising Association and ARCOP, Inc., in each case, in the ordinary course of business, (B) a license or right of other third parties to use the Arby's IP in the ordinary course consistent with the License Agreement, (C) liens that remain on record at the applicable Governmental Authority but have been paid and discharged prior to the Closing Date, provided that written evidence of such payment and discharge shall have been received, (D) liens for the benefit of the trustee pursuant to the IP Holder Trustee Agreement and the Issuer Trustee pursuant to the Trust Agreement or (E) liens for the benefit of the American Lock-Box Bank and the Canadian Lock-Box Bank (as each such term is defined in the Servicing Agreement) pursuant to the applicable Account Control Agreement (as defined in the Servicing Agreement). "LLC Agreement" shall mean either of the Amended and Restated Limited Liability Company Agreement of Holdings dated as of November 21, 2000 and the Amended and Restated Limited Liability Company Agreement of FinCo dated as of November 21, 2000. "LOA Agreement" shall mean a license option agreement between the Franchisor and a Franchisee that grants a Franchisee the option, exercisable for a one-year period, to build a Restaurant on one specified site. "LOA Fee" shall mean fees payable by a Franchisee pursuant to an LOA Agreement. "Lockbox Agreement" shall mean any of the BOA Lockbox Agreement and the RBC Lockbox Agreement. "Majority" shall mean with respect to the Notes, the Holders of more than 50% of the Aggregate Outstanding Principal Amount of the Notes. "Make Whole Premium" shall mean an amount equal to the excess, if any, of (i) the discounted present value as of the Optional Redemption Date of each of the Targeted Principal Payments on the Aggregate Outstanding Principal Amount being redeemed and the Interest Distributions on the Aggregate Outstanding Principal Amount being redeemed scheduled to be paid after the Optional Redemption Date, determined at a discount rate equal to 0.25 percent plus the yield on a U.S. treasury bill or note of a constant maturity which is equal to the remaining Weighted Average Life of the Notes as of the Optional Redemption Date, such discount rate to be converted to a monthly equivalent rate, over (ii) the Aggregate Outstanding Principal Amount being redeemed. Such reference to U.S. Treasury yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (ii) interpolating linearly between yields reported for various maturities if no maturity corresponds to the applicable remaining Weighted Average Life of the Notes. "Mandatory Redemption Date" shall mean any Payment Date following the Accounting Date on which an event leading to a mandatory redemption pursuant to Section 9.05 hereof occurs. "Mandatory Redemption Price" shall mean an amount equal to the sum of (i) the par value of the Aggregate Outstanding Principal Amount being redeemed and (ii) accrued and unpaid interest at the Note Rate on the Aggregate Outstanding Principal Amount being redeemed through the Mandatory Redemption Date. "Material Adverse Effect" shall mean, a material adverse effect on any of the following: (A) with respect to the Issuer (x) its condition, financial or otherwise, (y) its earnings, or business affairs or (z) its ability to own its properties or to conduct its business or to enter into or perform its respective obligations, as applicable under the Transaction Documents, (B) with respect to any material Arby's IP individually or with respect to the Arby's IP taken as a whole, the enforceability of the terms thereof, the likelihood of the payment of the amounts required as of the date hereof with respect thereto in accordance with the terms thereof, the value thereof, the transferability or the transfer thereof to the Issuer or the ownership thereof and the security interest in the rights thereto Granted under the License Agreement by the IP Holder or Granted under the terms of this Indenture by the Issuer, (C) with respect to the existing and reasonably anticipated future Franchise Assets taken as a whole, the enforceability of the terms thereof, the likelihood of the payment of the amounts required as of the date hereof with respect thereto in accordance with the terms thereof, the value thereof, the transferability or the transfer thereof to the Issuer or the ownership thereof or (D) with respect to the Notes, security therefor Granted in this Indenture, the benefits intended to be provided the Noteholders thereby and, upon payment therefor, the Noteholders' respective right, title and interest in and to the Notes. For avoidance of doubt, the fact that the Debt Service Coverage Ratio is then, or would remain, at 1.20x or greater shall not, solely in and of itself, preclude or negate the determination of a Material Adverse Effect in any instance. "Maturity" shall mean, with respect to the Notes, the date on which the unpaid principal of the Notes becomes due and payable as therein or herein provided, whether at the Legal Final Payment Date or by declaration of acceleration, call for redemption or otherwise. "Maximum Debt Service Reserve Amount" shall mean, as of any Payment Date, an amount equal to the lesser of (i) the first 12 months of Expected Priority Payments and (ii) any remaining Expected Priority Payments. "MDA Agreement" shall mean a market development agreement between the Franchisor and a Franchisee pursuant to which a Franchisee commits to build two or more Restaurants within a specified geographic territory within a specified time frame. "MDA Fee" shall mean fees payable by a Franchisee pursuant to an MDA Agreement. "Minimum Debt Service Reserve Amount" shall mean, as of any Payment Date, an amount equal to the lesser of (i) the first nine months of Expected Priority Payments and (ii) the remaining Expected Priority Payments. "Minimum Debt Service Coverage Ratio" shall mean, as of any Accounting Date, an amount equal to the greater of (i) 1.20x and (ii) the lesser of (A) 75% of the highest Debt Service Coverage Ratio previously calculated on any Accounting Date and (B) 1.70x. "Minimum Funding Amount" shall mean either (i) if the Debt Service Reserve Amount is less than the Minimum Debt Service Reserve Amount, the difference between the Minimum Debt Service Reserve Amount and the Debt Service Reserve Amount or (ii) if the Debt Service Reserve Amount is equal to or greater than the Minimum Debt Service Reserve Amount, $0. "Misdirected Payments" shall have the meaning set forth in Section 10.02 hereof. "Money" shall have the meaning set forth in Section 1-201(24) of the UCC. "Moody's" shall mean Moody's Investors Service, Inc. and its successors and assigns, if such successors and assigns shall continue to perform the functions of a securities rating agency; if Moody's Investors Services, Inc. or such successor and assign shall for any reason no longer perform the functions of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized rating agency designated by the Issuer with the written consent of the Insurer (so long as no Insurer Default shall have occurred and be continuing). "Net Cash Flow" shall mean, with respect to any Collection Period and related Accounting Date, an amount equal to the difference between (i) the sum of (A) Collections and Investment Income on Collections, (B) Capital Contributions that the Controlling Party has consented to include in Net Cash Flow for a specified Collection Period for purposes of this definition, such consent not to be unreasonably withheld, (C) the Seasonality Release Amount and (D) so long as an amount no less than the Minimum Debt Service Reserve Amount is on deposit in the Debt Service Reserve Account, Investment Income earned on the Debt Service Reserve Account minus (ii) the sum of (A) SPV Operating Expenses, (B) the Premium, (C) the Seasonality Deposit Amount and (D) Servicing Fees, in each case paid or, in the case of Investment Income, earned during such Collection Period. "Non-Branded Payments" shall mean payments related to non-Arby's(R) branded products sold under brands owned or licensed by Affiliates of Arby's which are sold through Restaurants. "Note Interest Amount" shall have the meaning set forth in Section 3.13 of this Indenture. "Note Owner" shall mean, with respect to any Global Note, each Person that appears on the records of a Clearance System (other than each such Clearance System to the extent that it is an accountholder with the other Clearance System for the purpose of operating the "bridge" between them) as entitled to a particular amount of Notes by reason of an interest in a Global Note (for all purposes other than with respect to the payment of principal of and interest on the Notes, the right to which shall be vested, as against the Issuer and the Indenture Trustee, solely in the Person in whose name the Global Note is registered in the Note Register); provided, however, that the Indenture Trustee may conclusively rely upon the certificate of a Clearance System as to the identity of such Persons holding an interest in a Global Note. "Note Principal Amount" shall have the meaning set forth in Section 3.13 of this Indenture. "Note Rate" shall mean with respect to any Accrual Period, a per annum rate equal to 7.44% which shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. "Note Register" shall have the meaning set forth in Section 2.05 of this Indenture. "Note Registrar" shall have the meaning set forth in Section 2.05 of this Indenture. "Noteholder" or "Holder" shall mean the registered owner of a Note as evidenced by the Note Register. "Notes" shall mean the Notes which are authorized by, and authenticated and delivered under, this Indenture substantially in the forms attached hereto. "Notice of Claim" shall mean any notice delivered by the Indenture Trustee to the Insurer or its agent pursuant to the Policy in the form set forth in Exhibit A to the Policy. "Offering Circular" shall mean the Offering Circular dated November 17, 2000 relating to Arby's Franchise Trust 7.44% Fixed Rate Insured Notes Due December 20, 2020. "Officer" shall mean, with respect to any corporation other than the Indenture Trustee, the President, any Vice President, the Secretary or the Treasurer (collectively, an "Executive Officer") of such corporation; with respect to any partnership, any general partner thereof; with respect to any bank or trust company acting as trustee of an express trust or as custodian, any Responsible Officer thereof; with respect to any limited liability company, any manager, any managing member or Executive Officer thereof; and with respect to the Issuer, the chief executive officer, the president, any executive vice president, senior vice president or any vice president of the Issuer. "Officers' Certificate" shall mean, unless otherwise specified, a certificate signed by any Authorized Officer of the party delivering such certificate, delivered to the Indenture Trustee. "Opinion of Counsel" shall mean a written opinion of counsel to the Issuer, addressed to the Insurer and to the Indenture Trustee for the benefit of the Noteholders, in form and substance reasonably satisfactory to the Indenture Trustee and the Insurer. "Optional Redemption Date" shall mean any Payment Date specified for an optional redemption of Notes pursuant to Section 9.01 of this Indenture. "Optional Redemption Price" shall mean, as of the Optional Redemption Date, the sum of (i) the Aggregate Outstanding Principal Amount being redeemed, (ii) the accrued and unpaid interest at the Note Rate on the Aggregate Outstanding Principal Amount being redeemed through the Optional Redemption Date and (iii) the Make Whole Premium on the Aggregate Outstanding Principal Amount being redeemed. "Ordinary SPV Operating Expenses" shall mean SPV Operating Expenses of the Issuer that are budgeted or incurred in the ordinary course of business (and which term excludes any indemnification claims). "Organizational Expenses" shall mean any expenses incurred by the Issuer in connection with the maintenance of its existence in the State of Delaware and in connection with its qualification to do business in any State. "Outstanding" shall mean Notes theretofore authenticated and delivered under this Indenture, except: (i) Notes theretofore canceled or delivered for cancellation; (ii) Notes or portions thereof, money for the payment or prepayment of the principal and interest of which has theretofore been deposited with the Indenture Trustee in trust for the Noteholders corresponding thereto; provided that, if such Notes or portions thereof are to be prepaid, notice of such prepayment has been duly given pursuant to this Indenture or provision therefor satisfactory to the Indenture Trustee has been made; provided further that, until paid, such Notes or portions thereof for which payment or prepayment money has been deposited with the Indenture Trustee but not made to the corresponding Noteholders shall continue to be deemed to be Outstanding for purposes of Noteholder vote, consent or waiver; (iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture including, without limitation, Section 2.05 hereof, unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser in whose hands such Notes are valid obligations of the Issuer; and (iv) Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.06; provided, however, that (1) to the extent that any Notes have been paid with proceeds of the Policy, such Notes shall continue to remain Outstanding for purposes of this Indenture until the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a written notice from the Insurer delivered to the Indenture Trustee, and the Insurer shall be deemed to be the Holder of such Notes to the extent of any payments thereon made by the Insurer; and (2) Notes held by or to the order of the Issuer will not be considered Outstanding for purposes of establishing a quorum of Noteholders at any meeting of Noteholders. "Participants" shall mean the direct participants of DTC, which include securities brokers and dealers, banks, trust companies, clearing corporations (including the Agent Member) and other organizations. "Payment Date" shall mean the 20th day of the calendar month, or, if any such 20th day is not a Business Day, then the next succeeding Business Day, commencing on December 20, 2000. "Permanent Regulation S Global Note" shall have the meaning set forth in Section 2.02 of this Indenture. "Permitted Indebtedness" shall mean (a) Indebtedness that (i) is represented by an invoice, statement of account, check, work request, purchase order or other similar document representing expenses relating to activities of the Issuer in accordance with Article Three hereof, (ii) is fully and explicitly subordinated to the Notes and (iii) does not constitute a claim against the Issuer to the extent that excess proceeds of the Trust Estate are insufficient to pay such debt and (b) the payables associated with SPV Operating Expenses. "Person" shall mean any legal person, including any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "Plan" shall mean any ERISA Plan or "plan" (as defined in Section 4975 of the Code) that is subject to Section 4975 of the Code. "Policy" shall mean the Note Guaranty Insurance Policy No. AB0408BE issued by the Insurer in respect of the Notes on the Closing Date. "Policy Account" shall have the meaning set forth in Section 2.15 of this Indenture. "Pre-Cut-Off Date Franchisee Payments" shall mean all payments under the Franchise Documents received on or prior to the Cut-Off Date. "Preference Claim" shall have the meaning set forth in Section 2.12(e) of this Indenture. "Premium" shall mean the premium payable to the Insurer by the Issuer as specified in the Premium Letter including the Additional Premium Amount. "Premium Letter" shall mean that certain Premium Letter dated the Closing Date between the Insurer and the Issuer, relating to the Policy, and if from time to time as amended as permitted therein and herein, as so amended. "Principal Distribution" shall mean with respect to the Notes on any Payment Date, the lesser of (i) Available Funds after payment of amounts required pursuant to clauses 10.03(i) through 10.03(iv) as set forth in the Priority of Payments and (ii) the Targeted Principal Payment plus any unpaid Targeted Principal Payments from prior Payment Dates. "Principal Reinsurer" shall have the meaning assigned to such term in the Insurance Agreement. "Priority of Payments" shall mean the application of funds provided for in Section 10.03 of this Indenture. "Proceeding" shall mean a suit in equity, action at law or other judicial or administrative proceeding. "Qualified Institutional Buyer" shall have the meaning set forth in Rule 144A. "Qualified Purchaser" shall have the meaning set forth in Section 2(a)(51)(A) of the Investment Company Act. "Rating Agency" shall mean Standard & Poor's and Moody's. "RBA Lockbox Agreement" shall mean the Blocked Accounts Agreement dated as of November 21, 2000 among Royal Bank of Canada, Arby's of Canada Inc. and the Trustee, and if amended from time to time, as so amended. "Record Date" shall mean, with respect to a Payment Date, the last day of the immediately preceding calendar month. "Registered" shall mean a debt obligation that is in registered form within the meaning of Section 881(c)(2)(B)(i) of the Code. "Registered Notes" shall have the meaning set forth in Section 2.02(c) of this Indenture. "Regulation S" shall mean Regulation S under the Securities Act, as such regulation may be amended, supplemented, replaced or otherwise modified from time to time. "Regulation S Global Note" shall have the meaning set forth in Section 2.02 of this Indenture. "Reimbursement" shall mean the reimbursement (including any interest thereon) payable by the Issuer, with respect to any payment made by the Insurer under the Policy, pursuant to the terms of the Insurance Agreement. "Residual Trap Amount" shall mean, for purposes of calculation on any Accounting Date, either (i) upon the occurrence and continuation of a Cash Trap Event, 25% of the Available Funds after payment of the sum of (A) the Priority of Payments described in Sections 10.03(i) through Section 10.03(v) hereof and (B) the Minimum Funding Amount on such Accounting Date or (ii) if a Cash Trap Event is no longer continuing, $0. "Responsible Officer" shall mean, when used with respect to the Indenture Trustee, any officer within the corporate trust and agency group of the Indenture Trustee (or any successor group of the Indenture Trustee), including any managing director, vice president, assistant vice president, assistant secretary or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above-designated officers, who shall in any case be responsible for the administration of this document or have familiarity with it, and, with respect to particular corporate trust matters, any other officer to whom any corporate trust matter is referred at the Corporate Trust Office because of his or her knowledge of and familiarity with the particular subject. "Restaurant" shall mean an Arby's(R) branded restaurant at a location in the United States or Canada. "Royalty Rate" shall mean a fixed percentage specified in each Franchise Agreement utilized to calculate the Franchise Royalties payable by a Franchisee to the Franchisor. "Rule 144A" shall mean Rule 144A under the Securities Act, as such rule may be amended, supplemented, replaced or otherwise modified from time to time. "Rule 144A Global Note" shall have the meaning set forth in Section 2.02(b) of this Indenture. "Seasonality Coverage Account" shall mean the trust account (account no. 001633), established pursuant to Section 10.08 of this Indenture. "Seasonality Coverage Balance" shall mean the funds on deposit in the Seasonality Coverage Account. "Seasonality Deposit Amount" shall mean an amount equal to the greater of (i) the lesser of (A) $50,000 and (B) any amounts remaining after application of Available Funds in accordance with Sections 10.03(i) through 10.03(viii), and (ii) the amount specified by the Issuer, subject to a maximum amount of $500,000 on each Payment Date in each of December, January and February. "Seasonality Release Amount" shall mean (i) for each Accounting Date in each of March, April and May of each year, such amount as may be released at the direction of the Issuer to reduce the Seasonality Coverage Balance, provided, however, the Seasonality Release Amount on the Accounting Date for the month of each May shall be the amount necessary to reduce the Seasonality Coverage Balance to $0. "Secured Parties" shall mean (i) the Indenture Trustee on behalf of the Noteholders and the Insurer, (ii) the Indenture Trustee in its individual capacity and (iii) the Insurer, all as parties secured by the Collateral, as their interest may appear in this Indenture, including the Granting Clauses and Priority of Payments hereof. "Securities Account" shall have the meaning set forth in Section 8-501 of the UCC. "Securities Act" shall mean the U.S. Securities Act of 1933, as amended and in effect from time to time and the rules and regulations promulgated thereunder. "Securities Intermediary" shall have the meaning set forth in Section 8-102(a)(14) of the UCC. "Security Entitlement" shall have the meaning set forth in Section 8-102(a)(17) of the UCC. "Servicer Order" or "Manager Order" shall mean an order of an Authorized Officer of the American Servicer, the Canadian Servicer or the IP Servicer, as applicable. "Servicer Termination Event" shall have the meaning set forth in the American Servicing Agreement and the Canadian Servicing Agreement. "Servicers" shall mean the American Servicer and the Canadian Servicer. "Servicing Agreements" shall mean the American Servicing Agreement and the Canadian Servicing Agreement. "Servicing Fee" shall mean the fees payable to the American Servicer and the Canadian Servicer pursuant to the applicable Servicing Agreement which for any Payment Date shall mean an amount equal to such Servicer's expenses incurred on a GAAP basis in the related Collection Period, provided that such fees shall be capped, (i) with respect to the 12-month period after the Cut-Off Date, at $36,500,000 in the aggregate for both Servicers and (ii) with respect to each 12-month period thereafter commencing on an anniversary of the Cut-Off Date, at 42% of gross Franchisee Payments received during such period in the aggregate for both Servicers (such cap to be calculated as of any date during such 12-month period based on cumulative gross Franchisee Payments received from the commencement of such 12-month period to such date) provided, however, that if the Debt Service Coverage Ratio is 1.10x or less, Servicing Fees shall not, without the consent of the Controlling Party, exceed $25,000,000 per 12-month period thereafter (subject to an annual 3% increase as of each anniversary of the Cut-Off Date) (the "$25,000,000 cap") until the Debt Service Coverage Ratio has exceeded 1.10x for six consecutive Collection Periods, at which time the cap on Servicing Fees shall once again be calculated in accordance with clause (ii) above with the consent of the Controlling Party (which consent shall not be unreasonably withheld), provided that, if at any time during the period when the Debt Service Coverage Ratio is 1.10x or less, if the $25,000,000 cap is greater than if the cap on the Servicing Fees is calculated in accordance with clause (ii) above, the cap on Servicing Fees shall be calculated in accordance with clause (ii) above; provided, further, in the event that a Servicer Termination Event shall have occurred and a new Servicer succeeds to the existing Servicer, the successor Servicer shall be entitled to receive a Servicing Fee based on a market rate so long as such total Servicing Fee does not, without the consent of the Controlling Party and the Certificateholder (such consent not to be unreasonably withheld), exceed the cap specified in this definition. "SPE Administrator" shall mean the administrator engaged by the Issuer pursuant to the SPE Administrator Letter. "SPE Administrator Fees" shall mean all fees and indemnities payable by the Issuer to the SPE Administrator pursuant to the SPE Administrator Letter. "SPE Administrator Letter" shall mean the engagement letter dated November 13,, 2000 pursuant to which the Issuer engaged the SPE Administrator to provide certain services as specified therein, and if from time to time amended as permitted therein and herein, as so amended. "SPV Indemnities" shall mean the sum of (i) all indemnification obligations of the Issuer pursuant to the Transaction Documents and (ii) the indemnification obligations which the Issuer, and to the extent arising out of the transactions effected pursuant to the Transaction Documents, IP Holder, FinCo and Holdings have to their respective officers, directors or managers under their related organizational documents to the extent such obligations in this subclause (ii) are not subject to or exceed insurance coverage. "SPV Operating Expenses" shall mean all Trustee Fees, Industry Consultant Fees, Independent Accountant Fees, SPE Administrator Fees, Insurer Indemnities, SPV Indemnities, Ordinary SPV Operating Expenses, Organizational Expenses and fees, if any, relating to the replacement of the IP Servicer, provided, however, such amounts (other than the Industry Consultant Fees upon the occurrence of a Servicer Termination Event and other than indemnities) shall not exceed $500,000 in the aggregate in any given 12-month period; provided, further, that SPV Operating Expenses comprised of indemnities shall not exceed in the first 12-month period following the Closing Date $1,000,000 in the aggregate, and in each subsequent 12-month period such maximum amount shall increase by an amount not exceeding $1,000,000 to the extent indemnities are not paid during such prior 12-month period or decrease to the extent indemnities are paid during such prior 12-month period, but the maximum amount shall in no event exceed $5,000,000 in the aggregate during any such subsequent 12-month period or be less than $1,000,000 in any such subsequent 12-month period. For avoidance of doubt, any SPV Operating Expenses comprised of indemnities that exceed the maximum amount as described in the second proviso in the foregoing sentence, shall remain as accrued and unpaid SPV Operating Expenses payable in accordance with the Priority of Payments. "Standard & Poor's" shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and its successors and assigns, if such successors and assigns shall continue to perform the functions of a securities rating agency; if such division or successors and assigns shall for any reason no longer perform the functions of a securities rating agency, "Standard & Poor's" shall be deemed to refer to any other nationally recognized rating agency designated by the Issuer with the written consent of the Insurer (so long as no Insurer Default shall have occurred and be continuing). "Substituted Person" shall have the meaning set forth in Section 11.01 of this Indenture. "Targeted Principal Payment" shall mean, for any Payment Date, the principal payment as specified on the targeted principal amortization schedule attached as Exhibit L hereto. "Temporary Regulation S Global Note" shall have the meaning set forth in Section 2.02(a) of this Indenture. "Term of the Policy" shall have the meaning set forth in the Policy. "Transaction Documents" shall mean the Contribution Agreements, the Notes, the Trust Agreement, the Indenture, each Servicing Agreement, the IP Contribution Agreement, the License Agreement, the Insurance Agreement, the Lockbox Agreements and the organizational documents of each of Holdings, FinCo, IP Holder and the Issuer. "Transfer/Renewal Fees" shall mean fees payable by Franchisees in connection with the renewal or transfer of any existing Franchise Agreement. "Transferee" shall mean the Person that receives a contribution pursuant to a Contribution Agreement or the IP Contribution Agreement. "Transferor" shall mean a Person that makes a contribution pursuant to a Contribution Agreement or the IP Contribution Agreement. "Trust Account" shall mean each of the Collection Account, the Debt Service Reserve Account, the Seasonality Coverage Account and the Indemnification Account. "Trust Agreement" shall mean the Amended and Restated Trust Agreement, dated as of November 21, 2000, by and between the Issuer Trustee and FinCo, as it may be amended or supplemented from time to time as permitted thereby. "Trust Estate" shall mean the Collateral and the rights of the Indenture Trustee under the Policy, and including, without limitation, all other money, instruments and other property and rights subject or intended to be subject to the Lien of this Indenture for the benefit of all or any of the Secured Parties as of any particular time, including all proceeds thereof. "Trust Termination Date" shall mean the date on which the obligations of the Issuer hereunder are terminated pursuant to Section 4.01 of this Indenture. "Trustee Fees" shall mean fees and indemnities payable by the Issuer or the IP Holder, as the case may be, pursuant to the fee letters with the Issuer Trustee, Indenture Trustee and the trustee of the IP Holder. "UCC" shall mean the Uniform Commercial Code as amended and in effect from time to time in the State of New York. "U.S. person" shall mean a "U.S. person" as defined in Regulation S. "Weighted Average Life" shall mean the weighted average life of the Notes as determined in accordance with customary and standard industry practices. SECTION 1.02 Interpretation. The definitions of terms defined herein are equally applicable both to the singular and plural forms of such terms, and references to such terms in the masculine, feminine or neuter gender shall be deemed to include all genders. The words "herein", "hereof", "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision hereof. ARTICLE TWO THE NOTES SECTION 2.01 Forms Generally. The Notes and the Authenticating Agent's certificates of authentication thereon (the "Certificates of Authentication") shall be in substantially the forms required by this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Authorized Officer(s) of the Issuer executing such Notes as evidenced by their execution of such Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note. The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officer(s) executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication. The terms of the Notes set forth in the Exhibits hereto are part of the terms of this Indenture. SECTION 2.02 Forms of Notes and Certificates of Authentication. (a) Regulation S Global Notes. (i) The Notes sold in "offshore transactions" in reliance on (and as defined in) Regulation S shall be represented initially by one or more global notes (each, a "Temporary Regulation S Global Note") substantially in the forms set forth in Exhibit A-1 (form of Temporary Regulation S Global Note) which the Issuer shall issue to the Common Depositary on terms that the Common Depositary shall hold the same for the account of the Note Owners. The Temporary Regulation S Global Notes shall be exchanged for interests in one or more permanent global notes (each, a "Permanent Regulation S Global Note" which, together with the Temporary Regulation S Global Notes, are hereinafter referred to as the "Regulation S Global Notes") substantially in the form set forth in Exhibit A-2 (form of Permanent Regulation S Global Note) pursuant to Section 2.02(a)(iii), below. Regulation S Global Notes shall be issued in fully registered form without interest coupons attached. (ii) The Permanent Regulation S Global Notes shall be exchangeable in their entirety for Definitive Notes only pursuant to Section 2.02(a)(iv) hereof and in accordance with their terms and without charge (other than the costs of postage and postal insurance) and, upon complete exchange thereof or payment in full of the principal of and interest on the Permanent Regulation S Global Notes, such Notes shall be surrendered for cancellation forthwith to the Indenture Trustee at the Corporate Trust Office. Until such exchange and except as provided in the Permanent Regulation S Global Notes, the Note Owner of a Permanent Regulation S Global Note shall be entitled to the same rights and benefits under this Indenture as if it were the Holder of Definitive Notes represented by such Permanent Regulation S Global Notes. (iii) At such time as the Distribution Compliance Period shall have terminated, and subject to the receipt by the Indenture Trustee of a certificate substantially in the form of Exhibit E (form of clearance system certificate) hereto signed by the applicable Clearing Agency and a certificate substantially in the form of Exhibit F hereto (form of certificate of non-U.S. ownership), beneficial interests in the Temporary Regulation S Global Notes may be exchanged outside of the United States for equal beneficial interests in the Permanent Regulation S Global Notes, with such legends as may be applicable thereto. The Permanent Regulation S Global Notes delivered in exchange for the Temporary Regulation S Global Notes shall not be mailed or otherwise delivered to any location in the United States in connection with such exchange. Upon any exchange of any beneficial interest in the Temporary Regulation S Global Notes for a beneficial interest in the Permanent Regulation S Global Notes, the Temporary Regulation S Global Notes shall be endorsed by the Indenture Trustee outside of the United States to reflect the reduction of the principal amount evidenced thereby, whereupon the principal amount of the Temporary Regulation S Global Notes shall be reduced for all purposes by the amount so exchanged and endorsed. (iv) Each Permanent Regulation S Global Note will be exchangeable in its entirety for Definitive Notes in fully registered form without interest coupons attached upon the occurrence of one or more of the following events: (A) either Euroclear or Clearstream is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise), or (B) as a result of any amendment to or change in, the laws or regulations of the State of Delaware or of any authority therein or thereof having power to tax or in the interpretation or administration of such laws or regulations which become effective on or after the Closing Date, the Issuer or the Indenture Trustee is or will be required to make any deduction or withholding from any payment in respect of the Notes which would not be required if the Notes were in definitive form. Upon the surrender of any such Permanent Regulation S Global Note to the Indenture Trustee for such exchange, the Issuer will execute and deliver at or from a location outside the United States, and the Authenticating Agent will authenticate and deliver at or from a location outside the United States, Definitive Notes in exchange for such Permanent Regulation S Global Note within 30 days of any such occurrence and shall record the names of the Holders of such Notes in the Note Register in accordance with the provisions of Section 2.05 hereof. Except as provided in this Section, Note Owners will not be entitled to receive physical delivery of Definitive Notes (however, nothing in this Section 2.02(a)(iv) shall be read to limit the rights of any Note Owner of a Regulation S Global Note to transfer such interest in accordance with Sections 2.05(d)(i) or (ii) hereof). (b) Rule 144A Global Notes. The Notes offered and sold in the United States or to U.S. persons shall initially be issued in the form of one or more global notes (each, a "Rule 144A Global Note" and, together with the Regulation S Global Notes, the "Global Notes") in fully registered form without interest coupons, substantially in the form set forth in Exhibit B with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and such legends as may be applicable thereto, which shall be deposited with the Indenture Trustee at its Corporate Trust Office, as custodian for DTC and registered in the name of a nominee of DTC, duly executed by the Issuer and authenticated by the Authenticating Agent as hereinafter provided. (i) The Issuer shall (A) request of DTC, and cooperate with DTC to ensure, that the DTC security description and delivery order include a "3(c)(7) marker" and confirm that the DTC user's manual contains an accurate description of the restriction on the holding and transfer of the Rule 144A Global Notes due to the Issuer's reliance on the exclusion to registration provided by Section 3(c)(7) of the Investment Company Act, (B) request of DTC, and cooperate with DTC to ensure, that DTC sends to its Participants in connection with the initial offering of the Notes a notice substantially in the form attached hereto as Exhibit K and (C) request of DTC, and cooperate with DTC to ensure, that the DTC Reference Directory includes each class of Rule 144A Global Notes in the listing of 3(c)(7) issues together with an attached description of the limitations as to the distribution, purchase, sale and holding of the Rule 144A Global Notes. (ii) The Issuer shall maintain on the systems of DTC and Bloomberg Financial Markets Commodities News the "3(c)(7) marker" in place on or about the Closing Date, except to the extent that the Issuer is advised by counsel that such indicators may be changed or deleted without the loss of the Issuer's exemption from registration under the Investment Company Act. Except to the extent that the Issuer is advised by counsel that such indicator may be changed or deleted without the loss of the Issuer's exemption from registration under the Investment Company Act, the Issuer shall ensure that any Bloomberg screen containing information about any Note includes the following (or similar) language: (A) "Note Box" on bottom of "Security Display" page describing the security should state: "Iss'd Under 144A/3c7". (B) "Security Display" page should have flashing red indicator "See Other Available Information". The indicator should link to the "Additional Security Information" page, which should state that the securities "are being offered in reliance on the exemption from registration under Rule 144A of the Securities Act to persons who are (i) Qualified Institutional Buyers (as defined in Rule 144A under the Securities Act), (ii) qualified purchasers (as defined under Section 3(c)(7) under the Investment Company Act of 1940) and (iii) not a Competitor. (c) Registered Notes. The Notes sold to investors that are (1) Qualified Institutional Buyers pursuant to Rule 144A, (2) Qualified Purchasers and (3) not Competitors, or issued upon the transfer of a beneficial interest in a Note in the form of a Global Note to a U.S. person that is (1) a Qualified Institutional Buyer pursuant to Rule 144A, (2) a Qualified Purchaser and (3) not a Competitor, may be issued in definitive, fully registered form without interest coupons with the applicable legend set forth in Exhibit D (form of Registered Note) and shall be registered in the name of the beneficial owner or its nominee, duly executed by the Issuer and authenticated by the Authenticating Agent as hereinafter provided. SECTION 2.03 Authorized Amount; Denominations. On the Closing Date, the Notes that shall be authenticated and delivered under this Indenture shall be issued in the Aggregate Outstanding Principal Amount of $290,000,000, except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.05 or 2.06 of this Indenture. The Notes shall be issuable in minimum denominations of $1,000,000, and integral multiples of $1,000 in excess thereof. SECTION 2.04 Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Issuer by one of the Authorized Officers of the Issuer. The signature of such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signatures of individuals who were at the time of such signature the Authorized Officers of the Issuer shall bind the Issuer, notwithstanding the fact that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of issuance of such Notes. At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed by the Issuer to the Authenticating Agent for authentication and the Authenticating Agent, upon receipt of an Issuer Order, shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. Each Note authenticated and delivered by the Authenticating Agent upon Issuer Order on the Closing Date shall be dated as of the Closing Date. All other Notes that are authenticated after the Closing Date for any other purpose under this Indenture shall be dated the date of their authentication. Upon the transfer, exchange or replacement of a Note under this Section 2.04, or under Section 2.05 or 2.06, the Issuer may require the payment by the Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Indenture Trustee) connected therewith. Notes issued upon transfer, exchange or replacement of other Notes shall be issued in authorized denominations reflecting the original Aggregate Outstanding Principal Amount of the Notes so transferred, exchanged or replaced, but shall represent only the current Aggregate Outstanding Principal Amount of the Notes so transferred, exchanged or replaced. In the event that any Note is divided into more than one Note in accordance with this Article Two, the original Aggregate Outstanding Principal Amount of such Note shall be proportionately divided among the Notes delivered in exchange therefor and shall be deemed to be the original Aggregate Outstanding Principal Amount of such subsequently issued Notes. No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a Certificate of Authentication, substantially in the form provided for herein, executed by the Authenticating Agent by the manual signature of one of their Responsible Officers, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. SECTION 2.05 Registration of Notes, Registration of Transfers and Exchange. (a) The Issuer shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Note Register shall be in written form or be capable of being converted into written form within a reasonable time. The Indenture Trustee is initially appointed "Note Registrar" for purposes of registering the Notes. Upon any resignation or removal of the Note Registrar, the Issuer shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Note Registrar. If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of a Note Registrar and of the location, and any change in the location, of the Note Registrar, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof and the Indenture Trustee shall have the right to rely conclusively upon a certificate executed on behalf of the Note Registrar by an Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and numbers of such Notes. A Note and the obligations evidenced thereby may be assigned or otherwise transferred in whole or in part pursuant to the terms of this Section 2.05 only by the registration of such assignment and transfer of such Note on the Note Register (and each Note shall so expressly provide). Any assignment or transfer of all or a part of a Note shall be registered on the Note Register only upon surrender for registration of assignment or transfer of the Note duly endorsed (or accompanied by a written instrument of assignment or transfer reasonably satisfactory to the Indenture Trustee duly executed by such transferee) by the registered holder thereof, and thereupon one or more new Notes in the same Aggregate Outstanding Principal Amount shall be issued to the designated assignee or transferee and the old Note shall be returned to the Issuer marked "canceled". Prior to the due presentment for registration or assignment or transfer of any Note, the Issuer, the Indenture Trustee and the Registrar shall treat the Person in whose name such Note is registered as the owner thereof for the purpose of receiving all payments thereon and, subject to the provision of Section 2.08 hereof, for all other purposes, notwithstanding any notice to the contrary. Subject to this Section 2.05, upon surrender for registration of transfer of any Note at the Issuer's Office, the Issuer shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like Aggregate Outstanding Principal Amount. Subject to the provisions of Section 2.02, at the option of the Holder, Notes may be exchanged for Notes of like terms, in any authorized denominations and of like Aggregate Outstanding Principal Amount, upon surrender of the Notes to be exchanged at the Issuer's Office. Whenever any Note is surrendered for exchange, the Issuer shall execute and the Authenticating Agent shall authenticate and deliver the Notes that the Noteholder making the exchange is entitled to receive. All Notes issued and authenticated upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Issuer shall not be required (i) to issue, register the transfer of or exchange any Note during a period beginning at the opening of business 15 days before any selection of Notes to be redeemed and ending at the close of business in New York, New York the day of the mailing of the relevant notice of redemption, or (ii) to register the transfer of or exchange any Note so selected for redemption. (b) No Note may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act and is exempt under applicable state securities laws and the laws of any other applicable jurisdiction. No Note may be offered, sold or delivered within the United States or to, or for the benefit of, U.S. persons except to persons who are (i) Qualified Institutional Buyers, (ii) Qualified Purchasers and (iii) not Competitors who are purchasing Notes in an Aggregate Principal Outstanding Amount of not less than $1,000,000 for their own account, or for the accounts of one or more Persons that are (1) Qualified Institutional Buyers, (2) Qualified Purchasers and (3) not Competitors in a transaction exempt from the registration requirements of the Securities Act pursuant to Rule 144A or in a transaction exempt from the registration requirements of the Securities Act. The Notes may also be sold or resold, as the case may be, to non-U.S. persons who are (i) not U.S. residents for purposes of Section 7(d) of the Investment Company Act in "offshore transactions" in reliance on Regulation S, (ii) Qualified Purchasers and (iii) not Competitors. No interest in a Regulation S Global Note or Definitive Note may be held by a U.S. person at any time. Furthermore, no Note may be sold or transferred (including without limitation, by pledge or hypothecation) to a Competitor. None of the Issuer, the Indenture Trustee, the Insurer or any other Person may register any of the Notes under the Securities Act or any state securities laws. (c) The applicable procedures utilized or imposed from time to time by any Clearance System (collectively, "Applicable Procedures") shall be applicable to the Global Notes insofar as and to the extent beneficial interests in such Global Notes are held by the Agent Members of or indirect participants in DTC, Euroclear or Clearstream. Note Owners or Agent Members of DTC, Euroclear and Clearstream shall have no rights under this Agreement with respect to such Global Notes, and the Noteholder may be treated by the Issuer, the Indenture Trustee, and the Insurer (and any agent of any of the foregoing) as the owner of such Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, or the Indenture Trustee from giving effect to any written certification, proxy or other authorization furnished by any Clearance System or impair, as between the Clearance System and its Agent Members or indirect participants, the operation of customary practices governing the exercise of the rights of a Holder of any Global Note. Requests or directions from, or votes of, the Common Depositary or any Clearance System with respect to any matter shall not be deemed inconsistent if made with respect to (or in separate proportions corresponding to) different beneficial owners. The Indenture Trustee shall not have any duty to monitor, maintain records concerning (or determine compliance with any of the restrictions on transfer set forth herein with respect to) Note Owners. Neither the Issuer nor the Indenture Trustee shall have any liability for the accuracy of the records of the Common Depositary or any Clearance System, or any actions or omissions of the Common Depositary or any Clearance System (or of the Agent Members of or indirect participants in any Clearance System). (d) A Noteholder may transfer a Note and a Note Owner may transfer its beneficial interest in a Global Note only in accordance with the following provisions: (i) Temporary Regulation S Global Note to Registered Note. If a Note Owner of a Temporary Regulation S Global Note wishes at any time after the Distribution Compliance Period to transfer its beneficial interest in an Aggregate Outstanding Principal Amount of not less than $1,000,000 in such Temporary Regulation S Global Note to a U.S. person, such Note Owner shall, subject to the provisions of this Section 2.05 and the Applicable Procedures, transfer its beneficial interest in such Temporary Regulation S Global Note for an equivalent beneficial interest in a Registered Note. Upon receipt by the Indenture Trustee of (A) a transfer certificate in the form of Exhibit G, given by the holder of such beneficial interest and stating that, in the case of a transfer, the Person transferring such interest in the Temporary Regulation S Global Note reasonably believes that the Person acquiring such interest in the Registered Note is (i) a Qualified Institutional Buyer and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) is not a Competitor, (B) a transfer certificate in the form of Exhibit H, given by the Person acquiring such beneficial interest stating that such Person is (i) a Qualified Institutional Buyer and is acquiring such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any State of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) not a Competitor and (C) a written order given in accordance with the Applicable Procedures, the Indenture Trustee shall instruct the Common Depositary to endorse the Temporary Regulation S Global Note to reflect a reduction of the Aggregate Outstanding Principal Amount thereof by the Aggregate Outstanding Principal Amount of the beneficial interest thereof to be so transferred and, concurrently with such reduction, the Issuer shall execute and furnish to the Indenture Trustee and the Indenture Trustee shall authenticate and deliver to such transferee of such Note Owner a Registered Note in the Aggregate Outstanding Principal Amount equal to the amount of the reduction in the Aggregate Outstanding Principal Amount of the Temporary Regulation S Global Note. (ii) Permanent Regulation S Global Note to Registered Note. If a Note Owner of a Permanent Regulation S Global Note wishes at any time after the Distribution Compliance Period to transfer its beneficial interest in an Aggregate Outstanding Principal Amount of not less than $1,000,000 in such Permanent Regulation S Global Note to a U.S. person, such Note Owner shall, subject to the provisions of this Section 2.05 and the Applicable Procedures, transfer its beneficial interest in such Permanent Global Note for an equivalent beneficial interest in a Registered Note. Upon receipt by the Indenture Trustee of (A) a transfer certificate in the form of Exhibit G given by the holder of such beneficial interest and stating that, in the case of a transfer, the Person transferring such interest in the Permanent Regulation S Global Note reasonably believes that the Person acquiring such interest in the Registered Note is (i) a Qualified Institutional Buyer and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) not a Competitor, (B) a transfer certificate in the form of Exhibit H, given by the Person acquiring such beneficial interest stating that such Person is (i) a Qualified Institutional Buyer and is acquiring such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any State of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) not a Competitor and (C) a written order given in accordance with the Applicable Procedures, the Indenture Trustee shall instruct the Common Depositary to endorse the Permanent Regulation S Global Note to reflect a reduction of the Aggregate Outstanding Principal Amount thereof by the Aggregate Outstanding Principal Amount of the beneficial interest thereof to be so transferred and, concurrently with such reduction, the Issuer shall execute and furnish to the Indenture Trustee, and the Indenture Trustee shall authenticate and deliver to such transferee of such Note Owner, a Registered Note in a principal amount equal to the amount of the reduction in the Aggregate Outstanding Principal Amount of the Permanent Regulation Global Note. (iii) Temporary Regulation S Global Note to Rule 144A Global Note. If a Note Owner of a Temporary Regulation S Global Note and deposited with the Common Depositary wishes at any time after the Distribution Compliance Period to exchange its interest in such Temporary Regulation S Global Note for an interest in a Rule 144A Global Note or to transfer not less than $1,000,000 in an Aggregate Outstanding Principal Amount of its interest in such Temporary Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Note, such holder may, subject to the immediately succeeding sentence and the Applicable Procedures, cause the exchange or transfer of such interest for an equivalent beneficial interest in the Rule 144A Global Note. To the extent that the Indenture Trustee, as Note Registrar, has received (A) instructions from DTC, Euroclear, Clearstream or the Common Depositary, as the case may be, directing the Indenture Trustee, as Note Registrar, to cause to be credited a beneficial interest in the Rule 144A Global Note equal to the beneficial interest in the Temporary Regulation S Global Note to be exchanged or transferred but not less than the minimum denomination applicable to any Notes held in the form of Rule 144A Global Notes, such instructions to contain information regarding the participant account with the Common Depositary to be credited with such increase, (B) a certificate in the form of Exhibit G, given by the holder of such beneficial interest and stating that, (1) in the case of a transfer, the Person transferring such interest in the Temporary Regulation S Global Note reasonably believes that the Person acquiring such interest in the Rule 144A Global Note is (a) a Qualified Institutional Buyer and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, (b) a Qualified Purchaser and (c) not a Competitor and, (C) a transfer certificate in the form of Exhibit H, given by the Person acquiring such beneficial interest stating that such Person is (i) a Qualified Institutional Buyer and is acquiring such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any State of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) not a Competitor and (D) in the case of an exchange, a certificate satisfactory to the Indenture Trustee and the Issuer stating that the holder is a Qualified Institutional Buyer and a Qualified Purchaser, then the Indenture Trustee, as Note Registrar, will instruct the Common Depositary to reduce the Temporary Regulation S Global Note by the Aggregate Outstanding Principal Amount of the beneficial interest in the Temporary Regulation S Global Note to be transferred or exchanged, and the Indenture Trustee, as Note Registrar, shall instruct the Common Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note equal to the reduction in the principal amount of the Regulation S Global Note. (iv) Permanent Regulation S Global Note to Rule 144A Global Note. If a Note Owner of a Permanent Regulation S Global Note deposited with the Common Depositary wishes at any time after the Distribution Compliance Period to exchange its interest in such Permanent Regulation S Global Note for an interest in a Rule 144A Global Note or to transfer not less than $1,000,000 in an Aggregate Outstanding Principal Amount of its interest in such Permanent Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Note, such holder may, subject to the immediately succeeding sentence and the Applicable Procedures, cause the exchange or transfer of such interest for an equivalent beneficial interest in the Rule 144A Global Note. To the extent that the Indenture Trustee, as Note Registrar, has received (A) instructions from DTC, Euroclear, Clearstream or the Common Depositary, as the case may be, directing the Indenture Trustee, as Note Registrar, to cause to be credited a beneficial interest in the Rule 144A Global Note equal to the beneficial interest in the Permanent Regulation S Global Note to be exchanged or transferred but not less than the minimum denomination applicable to any Notes held in the form of Rule 144A Global Notes, such instructions to contain information regarding the participant account with the Common Depositary to be credited with such increase, (B) a certificate in the form of Exhibit G hereto given by the holder of such beneficial interest and stating that, (1) in the case of a transfer, the Person transferring such interest in the Permanent Regulation S Global Note reasonably believes that the Person acquiring such interest in the Rule 144A Global Note is (a) a Qualified Institutional Buyer and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction, (b) a Qualified Purchaser and (c) not a Competitor and (C) a transfer certificate in the form of Exhibit H, given by the Person acquiring such beneficial interest stating that such Person is (i) a Qualified Institutional Buyer and is acquiring such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any State of the United States or any other jurisdiction, (ii) a Qualified Purchaser and (iii) not a Competitor, then DTC, Euroclear, Clearstream or the Indenture Trustee, as Note Registrar, will instruct the Common Depositary to reduce the Permanent Regulation S Global Note by the Aggregate Outstanding Principal Amount of the beneficial interest in the Permanent Regulation S Global Note to be transferred or exchanged, and the Indenture Trustee, as Note Registrar, shall instruct the Common Depositary, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note equal to the reduction in the principal amount of the Regulation S Global Note. (v) Registered Note to Regulation S Global Note. If a Holder of a Registered Note wishes at any time to transfer its beneficial interest in such Registered Note to a Person that is not a U.S. person, such Holder shall, subject to the provisions of this Section 2.05 and the Applicable Procedures, transfer its beneficial interest in such Registered Note for an equivalent beneficial interest in the applicable Temporary Regulation S Global Note (or, after the end of the Distribution Compliance Period the Permanent Regulation S Global Note). Such transfer to a Person that is not a U.S. person shall be to non-U.S. persons who are (i) not U.S. residents for purposes of Section 7(d) of the Investment Company Act in "offshore transactions" in reliance on Regulation S, (ii) Qualified Purchasers and (iii) not Competitors. Upon receipt by the Indenture Trustee of (A) transfer certificates substantially in the form of the transfer certificates set forth as Exhibit I and Exhibit J, (B) a certificate substantially in the form of the certificate of non U.S. ownership set forth as Exhibit F hereto and (C) a written order given in accordance with the Applicable Procedures, the Indenture Trustee shall cancel such Registered Note in accordance with Section 2.09 and record the transfer in the Note Register in accordance with Section 2.05(a) and concurrently with such cancellation and recordation shall instruct the Common Depositary to endorse the Temporary Regulation S Global Note (or, after the end of the Distribution Compliance Period, the Permanent Regulation S Global Note) to reflect an increase of the aggregate principal amount thereof by the Aggregate Outstanding Principal Amount of the Registered Note to be so transferred. (vi) Registered Note to Rule 144A Global Note. If a Holder of a Registered Note wishes at any time to transfer its beneficial interest in such Registered Note to a Person that is a U.S. person, such Holder shall, subject to the provisions of this Section 2.05 and the Applicable Procedures, transfer its beneficial interest in such Registered Note for an equivalent beneficial interest in the applicable Rule 144A Global Note. Such transfer to a U.S. person shall be persons who are (i) Qualified Institutional Buyers, (ii) Qualified Purchasers and (iii) not Competitors who are purchasing Notes in an Aggregate Principal Outstanding Amount of not less than $1,000,000 for their own account, or for the accounts of one or more Persons that are (1) Qualified Institutional Buyers, (2) Qualified Purchasers and (3) not Competitors in a transaction exempt from the registration requirements of the Securities Act pursuant to Rule 144A or in a transaction exempt from the registration requirements of the Securities Act. Upon receipt by the Indenture Trustee of (A) transfer certificates substantially in the form of the transfer certificates set forth as Exhibit G and H, and (B) a written order given in accordance with the Applicable Procedures, the Indenture Trustee shall cancel such Registered Note in accordance with Section 2.09 and record the transfer in the Note Register in accordance with Section 2.05(a) and concurrently with such cancellation and recordation shall instruct the Common Depositary to endorse the Rule 144A Global Note to reflect an increase of the aggregate principal amount thereof by the Aggregate Outstanding Principal Amount of the Registered Note to be so transferred. (vii) Rule 144A Global Note to Regulation S Global Note. If a Note Owner of a Rule 144A Global Note deposited with the Common Depositary wishes at any time to exchange its interest in such Rule 144A Global Note for an interest in the corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Note, such holder, provided such holder or, in the case of a transfer to another Person, such Person is not a U.S. Person, may, subject to Section 2.05(d) hereof and the immediately succeeding sentence and the Applicable Procedures, exchange or transfer or cause the exchange or transfer of such interest for an equivalent beneficial interest in the Regulation S Global Note; provided that, in each case, such beneficial interest in such Regulation S Global Note shall be held at all times through DTC. Upon receipt by the Indenture Trustee, as Note Registrar, of (A) instructions given in accordance with the Common Depositary's procedures from an Agent Member directing the Indenture Trustee to cause to be credited a beneficial interest in the Regulation S Global Note in an amount equal to the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, (B) a written order given in accordance with the Common Depositary's procedures containing information regarding the participant account of the Common Depositary and, in the case of a transfer or exchange pursuant to and in accordance with Regulation S, the DTC account to be credited with such increase, (C) a certificate substantially in the form of the certificate of non U.S. ownership set forth as Exhibit F hereto, (D) a certificate in the form of Exhibit I given by the holder of such beneficial interest stating that the exchange or transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes, including in accordance with Regulation S and (E) a certificate in the form of Exhibit J given by the purchaser of such beneficial interest stating that the exchange or transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes, including in accordance with Regulation S, the Indenture Trustee, as Note Registrar, shall instruct the Common Depositary to reduce the principal amount of the Rule 144A Global Note and to increase the principal amount of the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, and to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A Global Note. (viii) Transfer of Interests in a Registered Note. Registered Notes may only be transferred to investors that are (A) Qualified Institutional Buyers who are also Qualified Purchasers in transactions exempt under Rule 144A from the registration requirements of the Securities Act, (B) non-U.S. persons who are also Qualified Purchasers in transactions exempt under Regulation S from the registration requirements of the Securities Act, which investors take delivery in the form of a Regulation S Global Note or, if applicable, a Definitive Note and (C) in each case with respect to clauses (A) and (B) above, to investors who are not Competitors and in accordance with any applicable securities laws of any state of the United States and any other applicable jurisdiction and in compliance with the requirements of this Section 2.05. The transferor and transferee of any such Registered Note shall be required to execute and deliver to the Indenture Trustee, a transfer certificate in substantially the form of the transfer certificate set forth as Exhibit G and H, respectively. (ix) Transfer of Interests in the Global Notes. Notwithstanding anything herein to the contrary, transfers of interests in a Global Note may be made (a) by book-entry transfer of beneficial interests within the relevant Clearing Agency or (b) (i) in the case of transfers of interests in a Rule 144A Global Note, in accordance with Section 2.05(d)(iii) hereof, or (ii) in the case of transfers of interest in a Regulation S Global Note, in accordance with Section 2.05(d)(vi) hereof; provided that, in the case of any such transfer of interests pursuant to clause (a) or (b) above, such transfer is made in accordance with subsection (x) below. (x) Restrictions on Transfers. (A) Transfers of interest in a Regulation S Global Note to a U.S. Person or a U.S. resident (as determined for purposes of the investment Company Act) after the Distribution Compliance Period shall be made by (a) delivery of an interest in a Rule 144A Global Note and shall be limited to transfers made pursuant to the provisions of Sections 2.05(d)(iii) or (iv) or (b) delivery of an interest in a Registered Note and shall be limited to transfers made pursuant to the provisions of Section 2.05(d)(i) or (ii). Beneficial interests in a Regulation S Global Note may only be held through Euroclear and Clearstream. (B) Any transfer of an interest in a Rule 144A Global Note or a Registered Note to a U.S. Person or a U.S. resident (as determined for purposes of the Investment Company Act) that is not a Qualified Purchaser shall be null and void and shall not be given effect for any purpose hereunder, and the Indenture Trustee shall hold any funds conveyed by the intended transferee of such interest in such Rule 144A Global Note or such Registered Note in trust for the transferor and shall promptly reconvey such funds to such Person in accordance with the written instructions thereof delivered to the Indenture Trustee. Beneficial interests in Rule 144A Global Notes may only be held through DTC. (xi) Transfer of Interests in a Definitive Note. Definitive Notes may only be transferred to investors that are (A) non-U.S. persons who are not U.S. residents for purposes of Section 7(d) of the Investment Company Act in transactions exempt under Regulation S from the registration requirement of the Securities Act and who are also Qualified Purchasers or (B) (I) Qualified Institutional Buyers and (II) Qualified Purchasers in transactions exempt under Rule 144A from the registration requirements of the Securities Act and which investors take delivery in the form of a Registered Note and (C) in each case with respect to clauses (A) and (B) above, to investors who are not Competitors. (e) Each Person who becomes a Holder of a Registered Note will make, or if permitted by the Issuer, be deemed to have made the representations set forth below: (i) (A) The Holder is a Qualified Institutional Buyer and a Qualified Purchaser, (B) the Holder is aware that the sale to it is being made pursuant to Rule 144A and is purchasing the Notes for its own account or the account of another Qualified Purchaser that is also a Qualified Institutional Buyer as to which the Holder exercises sole investment discretion and each of the Holder and any such account is acquiring the Notes as principal for its own account for investment and not for sale in connection with any distribution thereof, (C) the Holder and any such account was not formed solely for the purpose of investing in the Notes (except when each beneficial owner of the Holder or any such account is a Qualified Purchaser), (D) to the extent the Holder (or any account for which it is purchasing the Notes) is a private investment company formed before April 30, 1996, the Holder and each such account has received the necessary consent from its beneficial owners without loss of any applicable exemptions under the Investment Company Act, (E) the Holder and any such account is not a pension, profit sharing or other retirement trust fund or plan in which the partners, beneficiaries or participants, as applicable, may designate the particular investments to be made, (F) the Holder is not a broker-dealer that owns and invests on a discretionary basis less than $25,000,000 in securities of issuers that are not affiliated persons of the dealer, (G) the Holder agrees that it and each such account shall not hold such Notes for the benefit of any other Person and shall be the sole beneficial owner thereof for all purposes and that it shall not sell participation interests in the Notes or enter into any other arrangement pursuant to which any other Person shall be entitled to a beneficial interest in the distributions on the Notes, (H) the Notes purchased directly or indirectly by the Holder or any account for which it is purchasing the Notes constitute an investment of no more than 40% of the Holder's and each such account's assets (except when each beneficial owner of the Holder or any such account is a Qualified Purchaser), (I) the Holder and each such account is purchasing the Notes in a principal amount of not less than $1,000,000 for the Holder and each such account, (J) the Holder will provide notice of the transfer restrictions set forth in this Indenture (including the exhibits hereto) to any transferee of its Notes and (K) the Holder understands and agrees that any purported transfer of the Notes to a Holder that does not comply with the requirements of this subsection (i) shall be null and void ab initio and that no representation is made by the Issuer, the Insurer or the Initial Purchasers, as the case may be, to the Holder as to the availability of any exemption under the Securities Act, the Investment Company Act or any state securities laws for the resales of the Notes. (ii) The Holder understands that the Notes are being offered only in a transaction not involving any public offering or sale in the United States within the meaning of the Securities Act, the Notes have not been and will not be registered under the Securities Act, and, if in the future the Holder decides to offer, resell, pledge or otherwise transfer the Notes, such Notes may be reoffered, resold or pledged or otherwise transferred only (A) (i) to a person whom the purchaser reasonably believes is a Qualified Institutional Buyer purchasing for its own account or for the account of a Qualified Institutional Buyer as to which the purchaser exercises sole investment discretion in a transaction meeting the requirements of Rule 144A or (ii) in an offshore transaction complying with Regulation S and (B) in accordance with all applicable securities laws of the states of the United States. The Holder also understands that the Issuer has not been registered under the Investment Company Act. Before any interest in a Note may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in the Regulation S Global Notes, the transferor and the transferee will be required to provide the Indenture Trustee with a written certification in the form of Exhibits I and J respectively, as to compliance with the transfer restrictions described herein. The Holder understands and agrees that any purported transfer of the Notes to a purchaser that does not comply with the requirements of this clause (ii) shall be null and void ab initio and that no representation is made by the Issuer or the Initial Purchasers, as the case may be, as to the availability of any exemption under the Securities Act, the Investment Company Act or any state securities laws for resale of the Notes. (iii) The Holder is not purchasing the Notes with a view to the resale, distribution or other disposition thereof in violation of the Securities Act. The Holder understands that an investment in the Notes involves certain risks, including the risk of loss of all or a substantial part of its investment under certain circumstances. The Holder has had access to such financial and other information concerning the Issuer and the Notes as it deemed necessary or appropriate in order to make an informed investment decision with respect to its purchase of the Notes, including an opportunity to ask questions of and request information from the Issuer. (iv) In connection with the purchase of the Notes: (A) none of the Issuer, the Initial Purchasers, the Insurer or the Servicers is acting as a fiduciary or financial or investment adviser for the Holder; (B) the Holder is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Initial Purchasers, the Insurer, the Indenture Trustee or the Servicers other than in a current offering memorandum for such Notes and any representations expressly set forth in a written agreement with such party; (C) none of the Issuer, the Initial Purchasers, the Insurer, the Indenture Trustee or the Servicers have given to the Holder (directly or indirectly through any other Person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise) of this Indenture or documentation for the Notes; (D) the Holder has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisers to the extent it has deemed necessary, and it has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Issuer, the Initial Purchasers, the Insurer, the Indenture Trustee or the Servicers; (E) the Holder has determined that the rates, prices or amounts and other terms of the purchase and sale of the Notes reflect those in the relevant market for similar transactions; (F) the Holder is purchasing the Notes with a full understanding of all of the terms, conditions and risks thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks; and (G) the Holder is a sophisticated investor. (v) The Holder understands that the Notes offered in reliance on the exemption from registration under the Securities Act provided by Rule 144A or on an exemption from registration under the Securities Act will bear the applicable legend set forth in Exhibit D, and will be represented by one or more Registered Notes. The Holder also understands that the Registered Notes and Rule 144A Notes may not at any time be held by or on behalf of U.S. persons that are (A) Competitors, (B) not Qualified Institutional Buyers or (C) not Qualified Purchasers. Before any interest in a Registered Note may be offered, resold, pledged or otherwise transferred to a Person who takes delivery in the form of an interest in a Global Note, the transferor will be required to comply with the requirements set forth above in Section 2.05(d)(v) or (vi), as applicable as to compliance with the transfer restrictions. (vi) (A) The Holder or any holder of an interest in a Note understands that no employee benefit or other plan that is subject to ERISA or Section 4975 of the Code, and no entity whose underlying assets include "plan assets" by reason of any such plan's investment in the entity, and no governmental plan which is subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code may purchase or hold such Note or any interest therein, unless such purchase and the holding of such Note or such interest therein would not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or in the case of a governmental plan, any substantially similar federal, state or local law). The Holder of a Note, or any holder of an interest in a Note by its purchase and holding of a Note or any interest therein, represents and warrants that (1) it is neither an employee benefit or other plan that is subject to ERISA or Section 4975 of the Code nor any entity whose underlying assets include "plan assets" by reason of such plan investment in the entity nor a governmental plan subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code; or (2) if it is an entity described in clause (1), the acquisition or holding of such Note or an interest therein will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or in the case of a governmental plan, any substantially similar federal, state or local law). (vii) The Holder will not, at any time, offer to buy or offer to sell the Notes by any form of general solicitation or advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or seminar or meeting whose attendees have been invited by general solicitations or advertising. (viii) The Holder is not a Competitor. (ix) The Holder understands that the Issuer, the Indenture Trustee, the Insurer, the Initial Purchasers and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and it hereby consents to such reliance. (f) Each Person who becomes a Note Owner of a Rule 144A Global Note will represent, or if permitted by the Issuer, will be deemed to have represented and agreed with the Issuer as follows: (i) (A) The Note Owner is a Qualified Institutional Buyer and a Qualified Purchaser, (B) the Note Owner is aware that the sale to it is being made pursuant to Rule 144A and is purchasing the Notes for its own account or the account of another Qualified Purchaser that is also a Qualified Institutional Buyer as to which the Note Owner exercises sole investment discretion and each of the Note Owner and any such account is acquiring the Notes as principal for its own account for investment and not for sale in connection with any distribution thereof, (C) the Note Owner and any such account was not formed solely for the purpose of investing in the Notes (except when each beneficial owner of the Note Owner or any such account is a Qualified Purchaser), (D) to the extent the Note Owner (or any account for which it is purchasing the Notes) is a private investment company formed before April 30, 1996, the Note Owner and each such account has received the necessary consent from its beneficial owners without loss of any applicable exemption under the Investment Company Act, (E) the Note Owner and any such account is not a pension, profit sharing or other retirement trust fund or plan in which the partners, beneficiaries or participants, as applicable, may designate the particular investments to be made, (F) the Note Owner is not a broker-dealer that owns and invests on a discretionary basis less than $25,000,000 in securities of issuers that are not affiliated persons of the dealer, (G) the Note Owner agrees that it and each such account shall not hold such Notes for the benefit of any other Person and shall be the sole beneficial owner thereof for all purposes and that it shall not sell participation interests in the Notes or enter into any other arrangement pursuant to which any other Person shall be entitled to a beneficial interest in the distributions on the Notes, (H) the Notes purchased directly or indirectly by the Note Owner or any account for which it is purchasing the Notes constitute an investment of no more than 40% of the Note Owner's and each such account's assets (except when each beneficial owner of the Note Owner or any such account is a Qualified Purchaser), (I) the Note Owner and each such account is purchasing the Notes in a principal amount of not less than $1,000,000 for the Note Owner and each such account, (J) the Note Owner will provide notice of the transfer restrictions set forth in this Indenture (including the exhibits hereto) to any transferee of its Notes and (K) the Note Owner understands and agrees that any purported transfer of the Notes to a Note Owner that does not comply with the requirements of this subsection (i) shall be null and void ab initio and that no representation is made by the Issuer, the Insurer or the Initial Purchasers, as the case may be, to the Note Owner as to the availability of any exemption under the Securities Act, the Investment Company Act or any state securities laws for the resales of the Notes. (ii) The Note Owner understands that the Notes have not been and will not be registered under the Securities Act, and may be reoffered, resold or pledged or otherwise transferred only (A) (i) to a person whom the purchaser reasonably believes is a Qualified Institutional Buyer purchasing for its own account or for the account of a Qualified Institutional Buyer as to which the purchaser exercises sole investment discretion in a transaction meeting the requirements of Rule 144A or (ii) in an offshore transaction complying of Regulation S and (B) in accordance with all applicable securities laws of the states of the United States. The Note Owner also understands that the Issuer has not been registered under the Investment Company Act. Before any interest in a Note may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in the Regulation S Global Securities, the transferor and the transferee will be required to provide the Indenture Trustee with written certifications in the form of Exhibits I and J respectively, as to compliance with the transfer restrictions described herein. The Note Owner understands and agrees that any purported transfer of the Notes to a purchaser that does not comply with the requirements of this clause (ii) shall be null and void ab initio and that no representation is made by the Issuer or the Initial Purchasers, as the case may be, as to the availability of any exemption under the Securities Act, the Investment Company Act or any state securities laws for resale of the Notes. (iii) The Note Owner is not purchasing the Notes with a view toward the resale, distribution or other disposition thereof in violation of the Securities Act. The Note Owner understands that an investment in the Notes involves certain risks, including the risk of loss of its entire investment in the Notes under certain circumstances. The Note Owner has had access to such financial and other information concerning the Issuer and the Notes as it deemed necessary or appropriate in order to make an informed investment decision with respect to its purchase of the Notes, including an opportunity to ask questions of and request information from the Issuer. (iv) In connection with the purchase of the Notes: (A) none of the Issuer, the Initial Purchasers, the Servicers, the Insurer or the Indenture Trustee is acting as a fiduciary or financial or investment adviser for the holder; (B) the Note Owner is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Initial Purchasers, the Servicers or the Indenture Trustee other than in the offering circular for such Notes and any representations expressly set forth in a written agreement with such party; (C) none of the Issuer, the Initial Purchasers, the Insurer, the Servicers or the Indenture Trustee has given to the Note Owner (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence or benefit (including legal, regulatory, tax, financial, accounting or otherwise) as to an investment in the Notes; (D) the Note Owner has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent it has deemed necessary, and it has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Issuer, the Initial Purchasers, the Insurer, the Servicers or the Indenture Trustee; (E) the Note Owner has evaluated the rates, prices or amounts and other terms and conditions of the purchase and sale of the Notes with a full understanding of all of the risks thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks; and (F) the Note Owner is a sophisticated investor. (v) The Note Owner or any Note Owner of an interest in a Note understands that no employee benefit or other plan that is subject to ERISA or Section 4975 of the Code, and no entity whose underlying assets include "plan assets" by reason of any such plan's investment in the entity, and no governmental plan which is subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code may purchase or hold such Note or any interest therein, unless such purchase and the owning of such Note or such interest therein would not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or in the case of a governmental plan, any substantially similar federal, state or local law). The Note Owner or any owner of an interest in a Note, by its purchase and owning of a Note or any interest therein, represents and warrants that (1) it is neither an employee benefit or other plan that is subject to ERISA or Section 4975 of the Code nor any entity whose underlying assets include "plan assets" by reason of such plan investment in the entity nor a governmental plan subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code; or (2) if it is an entity described in clause (1), that the acquisition or holding of such Note or an interest therein will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or in the case of a governmental plan, any substantially similar federal, state or local law). (vi) The Note Owner will not, at any time, offer to buy or offer to sell the Notes by any form of general solicitation or advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or seminar or meeting whose attendees have been invited by general solicitations or advertising. (vii) The Notes will bear the applicable legends set forth in Exhibit B hereto. (viii) The Note Owner is not a Competitor. (ix) The Note Owner understands that the Issuer, the Indenture Trustee, the Insurer, the Initial Purchasers, and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and it hereby consents to such reliance. (g) Each Note Owner of a beneficial interest in a Regulation S Global Security will be deemed to have represented and agreed with the Issuer as set forth in clauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above and to have further represented and agreed with the Issuer that (i) the Note Owner is a non-U.S. Person that is a Qualified Purchaser acquiring the Notes in an offshore transaction meeting the requirements of Regulation S and in a principal amount of not less than $1,000,000; (ii) such Note Owner is not acquiring any Note as part of a plan to reduce, avoid or evade U.S. federal income taxes owed, owing or potentially owed or owing; (iv) the Note Owner is aware that the Notes being sold to it will be represented (1) initially by one or more Temporary Regulation S Global Notes and (2) on or after the last day of the Distribution Compliance Period, by one or more Permanent Regulation S Global Notes, and that in each case beneficial interests therein may be held only through Euroclear or Clearstream; and (v) the Note Owner understands that, prior to the first Business Day following the Distribution Compliance Period, any resale or other transfer of beneficial interests in a Temporary Regulation S Global Note in the United States or to U.S. Persons shall not be permitted. (h) Each Note Owner of a beneficial interest in a Definitive Security will represent and agree, or if permitted by the Issuer, will be deemed to have represented and agreed with the Issuer as set forth in Section 2.05(g) above (other than with respect to Section 2.05 (g)(iv) and (v)). (i) Notwithstanding a request made to remove any legend pursuant to Rule 144A, Regulation S or Section 4(1) of the Securities Act from any of the Notes, such Notes shall bear the applicable legend, and the applicable legend shall not be removed unless there is delivered to the Issuer such satisfactory evidence, which may include an Opinion of Counsel satisfactory to the Issuer, as may be reasonably required by the Issuer to the effect that neither the applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Regulation S or Section 4(1) of the Securities Act, as applicable, and the Investment Company Act. Upon provision of such satisfactory evidence (a copy of which shall be provided by the Indenture Trustee to the Insurer), the Indenture Trustee, at the direction of the Issuer, a copy of which shall be delivered to the Insurer, shall authenticate and deliver the Notes that do not bear such legend. (j) Any transfer of a Registered Note initially issued in reliance on Rule 144A to a U.S. person or a U.S. resident (as determined for purposes of the Investment Company Act) that is not a Qualified Purchaser shall be null and void and shall not be given effect for any purpose hereunder, and the Indenture Trustee shall hold any funds conveyed by the intended transferee of such definitive Registered Note in trust for the transferor and shall promptly reconvey such funds to such Person in accordance with the written instructions thereof delivered to the Indenture Trustee at its address listed in Section 15.03. (k) Any purported transfer of a Note not in accordance with this Section 2.05 shall be null and void and shall not be given effect for any purpose hereunder. (l) Nothing in this Section 2.05 shall be construed to limit any contractual restrictions on transfers of Notes or interests therein that may apply to any Person. SECTION 2.06 Mutilated, Defaced, Destroyed, Lost or Stolen Notes. If (a) any mutilated or defaced Note is surrendered to the Indenture Trustee or (b) (x) if there shall be delivered to the Issuer or the Indenture Trustee evidence to its reasonable satisfaction of the destruction, loss or theft of any Note, and (y) there is delivered to the Issuer, the Indenture Trustee and the Insurer such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Issuer and the Indenture Trustee that such Note has been acquired by a protected purchaser, the Issuer shall execute and, upon Issuer Request, the Authenticating Agent shall authenticate and deliver, in lieu of any such mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor (including the same date of issuance) and equal principal amount, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number not contemporaneously outstanding. If, after delivery of such new Note, a bona fide purchaser of the predecessor Note presents for payment, transfer or exchange such predecessor Note, the Issuer, the Indenture Trustee, and the Insurer shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking therefrom, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Indenture Trustee and the Insurer in connection therewith. Furthermore, the Issuer, the Indenture Trustee and the Insurer shall be able to recover from the Person to whom such new Note was delivered, any amounts distributed by the Indenture Trustee to such Person in respect of such new Note, including any loss, damage, cost or expenses incurred by the Issuer, the Indenture Trustee and the Insurer in connection therewith. In case any such mutilated, defaced, destroyed, lost or stolen Note has become due and payable, the Issuer or Indenture Trustee, in their discretion may, instead of issuing a new Note, pay such Note without requiring surrender thereof except that any mutilated or defaced Note shall be surrendered; provided, that security or indemnity is furnished as required above. Upon the issuance of any new Note under this Section 2.06, the Issuer may require the payment by the Note Owner thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Indenture Trustee) connected therewith. Every new Note issued pursuant to this Section 2.06 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer and such new Note shall be entitled, subject to the second paragraph of this Section 2.06, to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. All Notes surrendered to the Indenture Trustee under the terms of this Section 2.06 shall be canceled by the Indenture Trustee. The provisions of this Section 2.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes. SECTION 2.07 Payment of Principal and Interest; Principal and Interest Rights Preserved. (a) General. The Notes shall accrue interest at the Note Rate and such interest shall be payable on each Payment Date as specified therein. Additional Interest shall also accrue on interest accrued and unpaid on the Notes as of each Payment Date, from such Payment Date to the date such accrued and unpaid interest is paid. For avoidance of doubt, payment of Additional Interest shall not be guaranteed under the Policy. (b) Payments of the applicable principal and interest will be made by the Indenture Trustee, to the extent such funds are available in the Trust Estate to, or to the order of, the relevant Holders of the Notes appearing on the Note Register on the Record Date by transfer to the bank account of each such Holder specified by such Holder in a written notice to the Indenture Trustee not less than five (5) Business Days before the Record Date. If no such account is specified by the Holder, such payment shall be made to the bank account specified by such Holder in the last such notice received by the Indenture Trustee or, if no such notice was given, by a banker's draft or order and posted to such Holder at the address shown in the Note Register at the risk of such Holder. (c) Claims in respect of the Notes will become void unless made within a period of three years from the due date of payment thereof. (d) The Holders of Notes as of the Record Date in respect of a Payment Date shall be entitled to the interest accrued and payable (including Additional Interest) in accordance with the Priority of Payments and principal payable in accordance with the Priority of Payments on such Payment Date. All such payments that are mailed or wired and returned to the Indenture Trustee shall be held for payment as herein provided at the Issuer's Office. (e) All reductions in the Aggregate Outstanding Principal Amount of a Note (or one or more predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all future Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note. (f) No recourse shall be had for the payment of any amount owing in respect of the Notes or any Transaction Document against any Officer, director, employee member, manager, equity interest holder, beneficial owner, stockholder or incorporator of the Issuer, the Noteholders, either Servicer, the Note Register, the Indenture Trustee, either Initial Purchaser, the Insurer, their respective Affiliates or any of their successors or assigns in their capacities as such. It is further understood that the foregoing provision of this paragraph (f) shall not limit the right of any Person to name the Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any of the Persons enumerated in the preceding sentence in their respective capacity enumerated therein. (g) Subject to the foregoing provisions of this Section 2.07, each Note delivered under this Indenture and upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights of unpaid interest and principal that were carried by such other Note. (h) Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and annulled and the provisions of Section 5.02 are not applicable, then payments of principal of and interest on such Notes shall be made in accordance with Section 10.03. (i) [Reserved.] (j) [Reserved.] (k) Promptly following the date on which all principal of and interest on any Notes have been paid in full and any such Notes have been surrendered to the Indenture Trustee, the Indenture Trustee shall, upon written notice from the Insurer of the amounts, if any, that the Insurer has paid in respect of the Notes under the Policy or otherwise which has not been reimbursed to it, deliver such surrendered Notes to the Insurer to the extent not previously canceled or destroyed. (l) Notwithstanding the provisions of this Section 2.07 to the contrary, if and to the extent the Insurer shall have made any unreimbursed payments on the Notes, the provisions of Section 2.13 shall apply with respect thereto. SECTION 2.08 Persons Deemed Owners. The Issuer, the Insurer, and the Indenture Trustee, shall treat the Person in whose name any Note is registered on the Note Register as the owner of such Note on the applicable Record Date for the purpose of receiving payments of principal of and interest on such Note and on any other date for all other purposes whatsoever (whether or not such Note is overdue), and neither the Issuer, the Insurer, or the Indenture Trustee shall be affected by notice to the contrary. SECTION 2.09 Cancellation. Notes surrendered for payment, exchange or redemption may be delivered for cancellation to the Indenture Trustee at the Corporate Trust Office. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled in accordance with the written instructions of the Issuer. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture. SECTION 2.10 Tax Purposes. The Issuer, each Holder and each beneficial owner of a Note by acceptance of its Note or its interest in a Note shall be deemed to have agreed to treat the Notes as debt of the Issuer for United States federal income tax purposes. SECTION 2.11 Withholding Tax. (a) The Issuer shall not be obligated to pay any additional amounts to the Holders of the Notes as a result of any withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges. (b) Each Foreign Investor may deliver to each of the Issuer and the Indenture Trustee two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI (or any subsequent versions thereof), or, in the case of a Foreign Investor claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest" a certificate representing that such Foreign Investor (i) does not own, actually or constructively, 10% or more of the total combined voting power of all classes of stock of Arby's entitled to vote within the meaning of Section 871(h)(3) of the Code and the regulations thereunder, is not a controlled foreign corporation related, directly or indirectly, to Arby's through stock ownership and is not a bank receiving interest described in Section 881(c)(3)(A) of the Code, and (ii) two copies of Form W-8BEN or any subsequent versions thereof properly completed and duly executed by such Foreign Investor claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments of interest by the Issuer under this Indenture and the other Transaction Documents. In addition, each Foreign Investor shall deliver such forms promptly upon the obsolescence, expiration or invalidity of any such form previously delivered by such Foreign Investor. Each such Foreign Investor shall promptly notify the Issuer and the Indenture Trustee at any time it determines that it is no longer in a position to provide any previously delivered form to the Issuer and the Indenture Trustee (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Any amount withheld shall appropriately reflect any such forms that are timely delivered to the Issuer and the Indenture Trustee. SECTION 2.12 Actions Under the Policy. (a) Any payment made by the Insurer to the Indenture Trustee for the benefit of the Noteholders (whether under the Policy or otherwise) shall not be deemed to be a payment made by or on behalf of the Issuer and shall not discharge the obligations of the Issuer with respect thereto, and such amounts shall continue to be due and owing under the Notes until paid by or on behalf of the Issuer. All such payments shall constitute Reimbursements, repayable by the Issuer pursuant to Section 10.03. (b) If payment by the Insurer is made in respect of interest on the Notes (other than Additional Interest), the Insurer shall be deemed to have purchased the right to receive interest on such Notes so paid from the Holder thereof to the extent of such payment by the Insurer. If payment by the Insurer is made in respect of principal on the Notes, the Insurer shall be deemed to have purchased such Notes in an aggregate principal amount equal to the Aggregate Outstanding Principal Amount of the Notes so paid by the Insurer. The Insurer shall be deemed to be a Holder of such Notes during any period in which the Insurer may exercise subrogation rights pursuant to Section 2.13. (c) If, by 3:00 p.m. in the city in which the Corporate Trust Office is located on the Accounting Date preceding any Payment Date, the amount then on deposit in the Collection Account, after giving effect to transfers of funds pursuant to Section 10.03(b) hereof from the Debt Service Reserve Account and the Seasonality Coverage Account, is insufficient to pay the Insured Payments due on such Payment Date, then, on or before 12:00 p.m. (New York time) on the Business Day following such Accounting Date, the Indenture Trustee shall give written notice to the Insurer of the amount of such deficiency, and thereupon submit a Notice of Claim in respect of such amount, all in accordance with the terms of this Indenture and in strict compliance with the terms of the Policy. (d) In the event that the Indenture Trustee has received a certified copy of an order of the appropriate court that any Insured Payment of principal of or interest on a Note has been avoided in whole or in part as a preference payment under applicable bankruptcy law, the Indenture Trustee shall so notify the Insurer, shall comply with the provisions of the Policy to obtain payment by the Insurer of such avoided payment, and shall, at the time it provides notice to the Insurer, notify Holders of the Notes by mail that, in the event that any Noteholder's Insured Payment is so recovered, such Noteholder will be entitled to payment pursuant to the terms of the Policy. The Indenture Trustee shall furnish to the Insurer or its Fiscal Agent (as defined in the Insurance Agreement) the Indenture Trustee's records evidencing the payments of principal of and interest on Notes, if any, which have been made by the Indenture Trustee and subsequently recovered from Noteholders, and the dates on which such payments were made. Pursuant to the terms of the Policy, the Insurer will make such payment on behalf of the Noteholder to the receiver, conservator, debtor-in-possession or trustee in bankruptcy named in the Order (as defined in the Policy) and not to the Indenture Trustee or any Noteholder directly (unless a Noteholder has previously paid such payment to the receiver, conservator, debtor-in-possession or Indenture Trustee in bankruptcy, in which case the Insurer will make such payment to the Indenture Trustee for distribution to such Noteholder upon proof of such payment reasonably satisfactory to the Insurer). (e) The Indenture Trustee shall promptly notify the Insurer of any proceeding or the institution of any action (of which the Indenture Trustee has actual knowledge) seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (a "Preference Claim") of any distribution made with respect to the Notes. Each Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agree that so long as an Insurer Default shall not have occurred and be continuing, the Insurer may at any time during the continuation of any proceeding relating to a Preference Claim direct all matters relating to such Preference Claim including, without limitation, (i) the direction of any appeal of any order relating to any Preference Claim and (ii) the posting of any surety, supersedes or performance bond pending any such appeal at the expense of the Insurer, but subject to reimbursement as provided in the Insurance Agreement. In addition, and without limitation of the foregoing, as set forth in Section 2.13 hereof, the Insurer shall be subrogated to, and each Noteholder and the Indenture Trustee hereby delegate and assign, to the fullest extent permitted by law, the rights of the Indenture Trustee and each Noteholder in the conduct of any proceeding with respect to a Preference Claim, including, without limitation, all rights of any party to an adversary proceeding with respect to any court order issued in connection with any such Preference Claim. SECTION 2.13 Subrogation Rights of the Insurer; Payment of Reimbursements. (a) Upon the payment by the Insurer to the Indenture Trustee (or otherwise in accordance with the Policy) for the benefit of the Noteholders, the Insurer, without the need for further action on the part of the Insurer, the Issuer, the Indenture Trustee or any other Person, shall be fully subrogated to the rights, as applicable, of each Holder of the Notes to receive payments of principal of and/or interest on the Notes from the Issuer in accordance with the Priority of Payments, to the extent of the amounts paid by the Insurer under the Policy. In addition, until the Insurer is fully reimbursed in accordance with this Indenture and the Insurance Agreement for any amounts paid by the Insurer to the Noteholders, the Insurer may exercise any option, vote, right, power or the like with respect to the Notes to the extent that it has made payment of principal or interest for the benefit of the Notes pursuant to the Policy. In furtherance of the foregoing, the Indenture Trustee shall give effect to such subrogation by distributing to the Insurer (as subrogee of the Holders of the Notes) the amounts that otherwise would have been distributed by the Indenture Trustee to such Holders in respect of principal and interest on the Notes to the extent of any payments by the Insurer under the Policy. To evidence such subrogation to the rights of the Noteholders, the Note Registrar shall note the Insurer's rights as subrogee in the Note Register upon receipt from the Insurer of proof of payment by the Insurer in respect of interest on or principal of the Notes. In addition, and without limiting the foregoing, (a) if the Insurer makes any payment under the Policy in respect of interest on the Notes, the Insurer shall be fully subrogated to the rights of the Noteholders to receive such interest, together with interest thereon at the Late Payment Rate (as defined in the Insurance Agreement) under the Priority of Payments, and (b) if the Insurer makes any payment under the Policy in respect of principal of the Notes, the Insurer shall be fully subrogated to the rights of the Noteholders to receive such principal, together with interest thereon at the Late Payment Rate (as defined in the Insurance Agreement) under the Priority of Payments. (b) The Insurer may, at its option, direct the allocation of any payment of Reimbursements as provided in Section 10.03 as being the repayment of principal and/or interest as to Reimbursements then owing as of such reimbursement or payment date. (c) Anything hereunder notwithstanding, it is understood and agreed that the Insurer shall be entitled to payment of Reimbursement only at the times and as provided in this Indenture and in the Insurance Agreement. All payments received by the Insurer pursuant to the exercise of its rights under the Notes as subrogee as described in subsection (a) above shall, solely by operation of the definition of "Reimbursements," cause a corresponding reduction (on a dollar-for-dollar basis) in the Reimbursements owing to the Insurer, and all payments received by the Insurer in respect of Reimbursements as provided in subsection (b) above shall cause a corresponding reduction (on a dollar-for-dollar basis) in the amounts which may be owing to the Insurer pursuant to such subrogation rights. (d) The Insurer acknowledges and agrees that, notwithstanding any of the provisions of this Indenture, the Insurance Agreement or otherwise, it shall have recourse only to the Collateral. The Collateral having been fully applied in accordance with the terms hereof, the Insurer shall not be entitled to take any further actions against the Issuer to recover any sums due but still unpaid hereunder or thereunder, all claims in respect of which shall be extinguished as against the Issuer. In particular, the Insurer agrees not to take any action or institute any proceeding against the Issuer (whether pursuant to its rights to be reimbursed for Reimbursements or pursuant to its subrogation rights or otherwise) which action or proceeding arises under any Insolvency Law applicable to the Issuer or which would be likely to cause the Issuer to be subject to, or to seek the protection of, any Insolvency Law applicable to the Issuer; provided, that the Insurer may become a party to and participate in any Proceeding or action under any Insolvency Law applicable to the Issuer that is initiated by any Person that is not an Affiliate of the Insurer. For avoidance of doubt, this Section 2.13(d) shall not include any actions taken against the Servicer or any other Affiliate of the Servicer in respect of matters unrelated to Reimbursement by the Issuer. SECTION 2.14 Additional Covenant of the Insurer. The Insurer agrees to promptly notify in writing, upon the Insurer's knowledge of such event, the Indenture Trustee of the actual or prospective occurrence of any event which constitutes or would constitute an Insurer Default. SECTION 2.15 Policy Account. (a) As of the date hereof, the Indenture Trustee has established in the name of the Indenture Trustee a separate special purpose trust account with the corporate trust department of The Bank of New York in New York (account no. 001621) (such account, the "Policy Account") for the benefit of the Indenture Trustee on behalf of the Noteholders. The Policy Account shall be maintained in a depository institution which at all times is rated at least "P-1" by Moody's and "A-1" by Standard & Poor's and if such depository institution at any time is rated below "P-1" by Moody's or "A-1" by Standard & Poor's, the Policy Account shall be transferred from and established at another depository institution meeting such criteria within one month of the occurrence of such ratings downgrade. The Indenture Trustee shall have exclusive dominion and control over and sole right of withdrawal of any amounts in the Policy Account. Amounts in the Policy Account shall be invested at the written direction of the American Servicer in Eligible Investments consisting solely of obligations issued and guaranteed as to the full and timely payment of principal and interest by the United States of America. All such Eligible Investments shall have maturities of a period ending on the earlier of the next Payment Date or the Optional Redemption Date or the Mandatory Redemption Date, as the case may be. Amounts in the Policy Account shall be disbursed by the Indenture Trustee in respect of the Notes in the same manner as principal and interest payments are to be made with respect to the Notes hereunder. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay Insured Payments with other funds available to make such payments. However, the amount of any Insured Payment to be paid from the Policy Account shall be noted as provided in subsection (c) below. (b) Any funds received by the Indenture Trustee from the Insurer as a result of any claim under the Policy (together with any interest thereon) shall be deposited by the Indenture Trustee in the Policy Account; the only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Policy Account shall be to make the Insured Payments in respect of the Notes (including Notes held for the Indenture Trustee's own account), in the case of the Policy, due on the related Payment Date in respect of which such funds are paid, to the extent such Insured Payments are not otherwise paid pursuant to the Priority of Payments. All proceeds of the Policy, if any, must be applied solely to the payment of Insured Payments of principal of and interest on the Notes and such funds may not be applied to pay any costs or expenses, liabilities or advances of the Indenture Trustee. Any funds remaining in the Policy Account following a Payment Date shall promptly be remitted to the Insurer; provided, that any remaining funds in the Policy Account in respect of amounts due and unpaid on the Notes that remain undistributed as a result of such funds being unclaimed shall be disposed of by the Indenture Trustee in accordance with Section 3.03(c). Amounts payable under the Policy shall be deemed discharged upon payment to the Indenture Trustee or to any other payee thereof under the Policy or, if deposited by the Insurer into the Policy Account, upon such deposit. (c) The Indenture Trustee shall keep a complete and accurate record of all funds, if any, remitted by the Insurer to the Indenture Trustee for deposit into the Policy Account and the allocation of such funds to payment of interest on and principal in respect of any Note. The Insurer shall have the right to inspect such records at reasonable times upon one Business Day's prior written notice to the Indenture Trustee or, if requested in writing by the Insurer, the Indenture Trustee shall within two Business Days of such request, at the expense of the Issuer, deliver copies of such records to the Insurer. ARTICLE THREE REPRESENTATIONS AND COVENANTS SECTION 3.01 Payment of Principal and Interest. Subject to Section 2.07, the Issuer shall duly and punctually pay the principal of and interest on the Notes in accordance with the terms of the Notes and this Indenture. SECTION 3.02 Maintenance of Office or Agency. The Issuer hereby appoints the Indenture Trustee as the Issuer's agent where notices and demands to or upon the Issuer in respect of the Notes or this Indenture may be served and where Notes may be surrendered for registration of transfer or exchange. No notice or demands issued by the Noteholders to the Indenture Trustee shall be effective unless and until the Indenture Trustee forwards such notice or demand to the Issuer. The Issuer hereby appoints the Indenture Trustee as paying agent for the payment of principal and interest on the Notes. The Issuer or the Indenture Trustee may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes, with notice to the Insurer of such appointment. The Issuer shall give prompt written notice to the Indenture Trustee, the Insurer, the Rating Agencies and the Noteholders of the appointment or termination of any such agent and of the location and any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency, or shall fail to furnish the Indenture Trustee with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding paragraph) at and notices and demands may be served on the Issuer at its registered office, and Notes may be presented and surrendered for payment to the Indenture Trustee at its main office and the Issuer hereby appoints the same as its agent to receive such respective presentations, surrenders, notices and demands. SECTION 3.03 Money for Note Payments to Be Held in Trust. (a) All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account shall be made on behalf of the Issuer by the Indenture Trustee in accordance with Section 2.07 hereof. (b) The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct the Indenture Trustee to pay to the Noteholders all sums held in trust by the Indenture Trustee; and upon such payment by the Indenture Trustee, the Indenture Trustee shall be released from all further liability with respect to such money. (c) Any money held by the Indenture Trustee in trust for the payment of any amount due with respect to any Note and remaining unclaimed for 60 months after such amount has become due and payable to such Noteholder shall be discharged from such trust and paid to the Issuer (or to the Insurer, if such monies relate to payments made by the Insurer into the Policy Account) and such Noteholder shall thereafter look only to the Issuer (or Insurer, as the case may be, if monies have been returned to the Insurer) for payment thereof (but only to the extent of the amounts so paid to the Issuer or Insurer), and all liability of the Indenture Trustee with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee, before making any such payment to the Issuer or the Insurer (as the case may be), shall at the expense of the Issuer cause notice to be given as provided in Section 12.04 hereof that such money remains unclaimed and, after a date specified therein, which shall not be less than 30 days from the date of such notice, any unclaimed balance of such money then remaining will be repaid to the Issuer or the Insurer (is the case may be), provided further that in the case of funds to be repaid to the Issuer, all amounts due and owing to the Indenture Trustee shall have been paid. The Indenture Trustee may also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such release of payment. Upon repayment of such money to the Issuer or the Insurer, such Noteholder shall, to the extent of the money repaid to the Issuer or Insurer, as applicable, be an unsecured general creditor of the Issuer or the Insurer, as the case may be. SECTION 3.04 Existence of the Issuer. Subject to Section 3.09 and Article Eleven of this Indenture, the Issuer will maintain in full force and effect its existence as a statutory business trust organized under the laws of the State of Delaware and will preserve, to the extent permitted by law, its qualification to do business as a foreign entity in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture or the Notes or to avoid any Material Adverse Effect on any property included in the Trust Estate. SECTION 3.05 Protection of Trust Estate. The Issuer shall from time to time and at its expense execute and deliver all such supplements and amendments hereto and all such Financing Statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action as may be necessary or advisable to: (a)(i) maintain or preserve the Lien of this Indenture, and the status of the Collateral as being free of Liens except for Liens that do not exceed $100,000 in the aggregate; (ii) perfect or protect the validity of any Grant made or to be made by this Indenture; or (iii) (iii) preserve title to the Trust Estate and the rights of the Secured Parties in such Trust Estate against the claims of all persons and parties; and (b)(i) Grant more effectively all or any portion of the Trust Estate; (ii) carry out more effectively the purposes of maintaining or preserving the Lien (and its status as being free of Liens) of this Indenture; (iii) except as otherwise permitted under the Servicing Agreements, enforce any instruments or property included in the Trust Estate; (iv) defend title to the Trust Estate and the rights of the Secured Parties in such Trust Estate against the claims of all persons and parties; or (v) pay any and all taxes levied or assessed upon all or any part of the Trust Estate. The Issuer or the Insurer (so long as no Insurer Default shall have occurred and be continuing) may direct the Indenture Trustee in writing, at the Issuer's expense, to execute any such Financing Statement, continuation statement, instrument of further assurance or other instrument. The Issuer or the Insurer, as applicable, hereby designates the Indenture Trustee as agent and attorney-in-fact to execute any Financing Statement, continuation statement or other instrument required pursuant to this Section 3.05. The Indenture Trustee may execute any such Financing Statement, continuation statement or other instrument only with the written consent of the Controlling Party. On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of Counsel stating the necessary events upon the occurrence of which the security interest of the Indenture Trustee in the Trust Estate shall be a perfected security interest, free of Liens other than the Lien of this Indenture and other Liens permitted hereunder and confirming that such events have occurred and such security interest is so perfected and unencumbered. Within 50 days after the beginning of each calendar year, commencing in 2002, the Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of Counsel (which opinion subsequent to the first such opinion so furnished may be delivered by counsel to the Issuer who may also be an officer or employee of the Issuer) stating that the security interest of the Indenture Trustee in the Trust Estate is a perfected security interest and that the Trust Estate is free of Liens other than the Lien of this Indenture and other Liens permitted hereunder. SECTION 3.06 Performance of Obligations. Except as otherwise permitted by this Indenture or as a Servicer is permitted under a Servicing Agreement, the Issuer shall take no action that would release any Person from any of such Person's covenants or obligations under any agreement, instrument or underlying instrument included in the Trust Estate. SECTION 3.07 Negative Covenants. (a) Except as otherwise permitted under this Indenture or the Servicing Agreements, the Issuer shall not: (i) sell, convey, transfer or grant any rights in respect of any of the Collateral to any other Person, permit to exist any Lien with respect to any of the Collateral except for certain Liens permitted under this Indenture and the Lien of this Indenture, take any other action in connection with any of the Collateral, including (but not limited to) any amendment of, or any consent to any waiver of rights or to any other action under or in respect of the Collateral; (ii) [Reserved]; (iii) have any subsidiaries; (iv) without the consent of the Controlling Party, such consent not to be unreasonably withheld or delayed, amend, supplement or otherwise modify any of the Transaction Documents or waive any breach or proposed breach of any provision of the Transaction Documents or give any consent thereunder; (v) sell, transfer, exchange or otherwise grant any rights in or dispose of any of its assets; (vi) dissolve or liquidate; (vii) [Reserved]; (viii) terminate the appointment of either of the Servicers; (ix) permit the validity or effectiveness of the Notes or any Transaction Document to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged; (x) take any affirmative action to permit the Lien of this Indenture not to constitute a valid perfected security interest in the Trust Estate that is of first priority as provided herein, or take any affirmative action to permit the Trust Estate to be subject to any Lien thereon other than the Lien of this Indenture and any other Liens expressly permitted hereunder; (xi) [Reserved]; (xii) have any employees; (xiii) take any action, or fail to take any action, if such action or failure to take action could reasonably be expected to interfere in any material respect with the enforcement of any rights of the Insurer and the Indenture Trustee under the agreements or instruments relating to any of the Trust Estate, and the Issuer fails to cease such action or take the action omitted, as necessary to avoid such potential effect within 10 days of the Issuer's knowledge of such potential effect; (xiv) (A) fail to pay any assessment, including any tax assessment, charge or fee with respect to the Trust Estate in excess of $100,000 in the aggregate at any one time outstanding and the Issuer shall not have remedied such failure to pay within 30 days of the Issuer's knowledge of such failure, or (B) fail to defend any action known to the Issuer, if, in any such case, such failure to pay or defend may adversely affect the priority or enforceability of the Lien over the Trust Estate created by this Indenture, provided that the Issuer shall not be required to (1) pay any assessment, including any tax assessment, charge or fee with respect to the Trust Estate if the same is being contested in good faith, by appropriate proceedings diligently pursued, so long as such nonpayment will not, under applicable law, entitle any Person to place a Lien on or result in the forfeiture of the Trust Estate or any material portion thereof or (2) defend an action or actions known to the Issuer solely for civil damages not in excess of an aggregate amount of $100,000 or (xv) take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above in this Section 3.07. (b) The Issuer will not act as a dealer in hedging or derivative instruments or otherwise make a market in, or hold as inventory for purposes of resale to customers, any securities or assets owned by the Issuer. For this purpose, "dealer" means a merchant of securities with an established place of business who in the ordinary course of business is engaged as a merchant in purchasing securities and selling them to customers with a view to the gains and profits that may be derived therefrom. SECTION 3.08 Issuer May Not Consolidate, Etc., Without Consent. The Issuer shall not consolidate or merge with or into any other Person, or convey or transfer all or substantially all of its assets to any Person, or substitute a new debtor for the Issuer without the consent of the Controlling Party, and unless: (a) the formed, surviving, substitute or transferee Person (i) shall be an entity organized and existing under the laws of the State of Delaware or under the laws of any other jurisdiction approved by the Controlling Party; provided, that the Issuer shall have delivered to the Indenture Trustee an Opinion of Counsel to the effect that after giving effect to such consolidation, merger, conveyance, transfer or substitution neither the Trust Estate nor the surviving Person shall be subject to income taxes or other applicable taxes that would reduce in any manner the interest and principal currently payable to the Noteholders or the amount of funds available therefor and (ii) shall, if such Person is not the Issuer, expressly assume, by an indenture supplemental hereto in form and substance satisfactory to the Controlling Party, executed and delivered to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance of every covenant and obligation under this Indenture and the Transaction Documents to which the Issuer is a party on the part of the Issuer to be performed or observed herein or therein, all as provided herein; (b) if the Notes are Outstanding and assigned a rating by the Rating Agencies, the Rating Agencies and the Controlling Party shall be notified at least 10 Business Days prior to such proposed consolidation, merger, conveyance, transfer or substitution pursuant to this Section 3.08 and the Rating Agencies shall have confirmed such ratings to the Controlling Party after giving effect to the consummation of such transaction and the Insurer Condition shall be satisfied; (c) any formed, surviving or transferee Person shall have agreed with the Secured Parties (i) to Grant on behalf of the Secured Parties perfected security interests in all the right, title and interest of such Person in the Trust Estate, to the same extent as the Issuer has granted perfected security interests to the Trust Estate to the Secured Parties hereunder, free of any Liens, and (ii) not to consolidate or merge with or into any other Person or substitute a new debtor for the Issuer or convey or transfer the Trust Estate or its respective assets substantially as an entirety to any other Person except in accordance with the provisions of this Section 3.08 and with Article Eleven of this Indenture; (d) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (e) the Issuer shall have delivered to the Indenture Trustee and the Insurer an Officers' Certificate and one or more Opinions of Counsel, as necessary or appropriate, each stating that such consolidation, merger, conveyance or transfer and such supplemental indenture, if any, comply with this Article Three and that all conditions precedent in this Article Three, including the Grant of a valid and perfected security interest in the Trust Estate free of any Liens, relating to such transaction have been complied with and that this Indenture, the supplemental indenture and the Transaction Documents to which the Issuer is a party constitute the legal, valid and binding obligations of the surviving transferee or Person subject to customary assumptions, qualifications and exceptions. SECTION 3.09 Successor Substituted. Upon any consolidation or merger in which the Issuer is not the surviving corporation, or conveyance or transfer of all or substantially all of the properties and assets of the Issuer, in each case in accordance with Section 3.08 hereof or Article Eleven of this Indenture, the Person with which such consolidation or merger is consummated, or to which such conveyance or transfer is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein and shall expressly assume, by an indenture supplemental hereto in form and substance satisfactory to the Controlling Party, executed and delivered to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance of every covenant and obligation under this Indenture and the Transaction Documents to which the Issuer is a party on the part of the Issuer to be performed or observed herein or therein, all as provided herein. In the event of any such consolidation, merger, conveyance or transfer, the Person named as the "Issuer" in the first paragraph of this instrument or any successor which shall theretofore have become such in the manner prescribed in this Article Three may be dissolved, wound up and liquidated at any time thereafter, and such Person shall be released from its liabilities as obligor and maker on all the Notes and from its obligations under this Indenture. SECTION 3.10 No Other Business. The Issuer shall not engage in any business or activity other than those transactions contemplated by the terms hereof or the other Transaction Documents, including (a) issuing and selling the Notes and acquiring, owning, preserving, enforcing, holding and pledging the Collateral and any other instrument or property included in the Trust Estate in connection therewith, (b) acting as franchisor of the Arby's(R) branded system in the United States and Canada; and (c) engaging in any other activities which are necessary or appropriate to accomplish the foregoing. SECTION 3.11 Indebtedness. Except for Permitted Indebtedness, the Issuer shall not incur or have outstanding any Indebtedness, or assume or guarantee any Indebtedness (excluding incurring or having outstanding any indebtedness arising from any tax liabilities) of any Person other than pursuant to this Indenture or the other Transaction Documents. SECTION 3.12 Representations and Warranties. The Issuer hereby represents, warrants and agrees as of the date hereof as follows: (a) The Issuer is a statutory business trust duly formed and validly existing under the laws of the State of Delaware and has all requisite power and authority to own its properties and conduct its business as such properties are presently owned and such business is presently conducted, and to execute, deliver and perform its obligations under this Indenture and any other document or instrument (including the Notes) delivered by the Issuer pursuant hereto or in connection herewith; (b) The execution and delivery of this Indenture and each Transaction Document to which the Issuer is a party and the consummation of the transactions provided for in this Indenture and each Transaction Document to which the Issuer is a party to have been duly authorized by the Issuer by all necessary action on the part of the Issuer; (c) The execution and delivery of this Indenture and each Transaction Document to which the Issuer is a party, the performance of the transactions contemplated by this Indenture and each Transaction Document to which the Issuer is a party, and the fulfillment of the terms hereof and thereof applicable to the Issuer, will (A) not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, (x) the Issuer's organizational documents or (y) any indenture, contract, agreement, mortgage, deed or trust or other instrument to which the Issuer is a party or by which it or its assets is bound and (B) not result in or require the creation of any Lien on any of the Issuer's properties, except for Liens permitted under this Indenture (or the Lien of this Indenture); (d) There are no Proceedings or investigations pending or, to the knowledge of the Issuer, threatened against the Issuer, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (A) questioning the validity of this Indenture or any Transaction Documents to which the Issuer is a party to, (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture or any Transaction Documents to which the Issuer is a party, (C) seeking any determination or ruling that would, individually or in the aggregate, materially and adversely affect the performance by the Issuer of its obligations under this Indenture or any Transaction Documents to which the Issuer is a party or (D) seeking any determination or ruling that would, individually or in the aggregate, materially and adversely affect the validity or enforcement of this Indenture or any Transaction Documents to which the Issuer is a party; (e) Except for filings of Financing Statements, filings with the Patent and Trademark Office and filings required under state franchise laws and as otherwise disclosed in the Offering Circular, all authorizations, consents, orders and approvals of, and notices to and filings and recordings and registrations by the Issuer with, any court or other governmental authority and all other governmental actions necessary to be taken by the Issuer in connection with the execution and delivery of this Indenture and any Transaction Documents to which the Issuer is a party and the performance of the material transactions contemplated by this Indenture and any Transaction Documents to which the Issuer is a party have been obtained, made or taken, as the case may be, and are in full force and effect; (f) Each of this Indenture and each Transaction Document to which the Issuer is a party constitutes a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law; (g) The Issuer is the owner of all the Collateral, and (to the best knowledge of the Officers of the Issuer) there are no Liens with respect to, no Liens upon, or any restrictions on the transferability of (other than those restrictions included in the terms of such instruments), the Collateral; (h) The Issuer has no subsidiaries; (i) The Issuer is not required in connection with the sale of the Notes to register or qualify the Notes under the Securities Act or, any applicable United States state securities law; (j) The Issuer is not an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act; (k) The Issuer is not required in connection with the sale of the Notes to qualify this Indenture under the United States Trust Indenture Act of 1939, as amended; (l) The Notes satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act; (m) [Reserved]; (n) The Notes shall be "debt securities" within the meaning of Rule 902 of the Securities Act; (o) The Issuer is not (i) in violation of its organizational documents or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement to which it is a party or by which it may be bound, except where such default would not have a Material Adverse Effect on the Issuer, the Arby's IP or the Notes, and it is not in violation of any law, order, rule, regulation, writ, injunction, judgment or decree of any Governmental Authority having jurisdiction over it or over its properties, except where such violation would not have a Material Adverse Effect on the Issuer, the Arby's IP or the Notes; and (s) no payments to be made to the Issuer under any of the Franchise Assets will be subject to any value-added tax or other similar tax (other than Canadian GST or HST). SECTION 3.13 Note Interest Amount; Note Principal Amount. (a) On each Accounting Date, the Issuer shall (or shall cause the American Servicer to) determine at the Note Rate the amount of interest for the applicable Accrual Period payable in respect of the Aggregate Outstanding Principal Amount of each Note (the "Note Interest Amount") (rounded to the nearest cent, with half a cent being rounded upward). Any Note Interest Amount due on any Payment Date but not paid on such Payment Date shall bear interest at the Note Rate until paid in full. (b) On each Accounting Date, the Issuer shall cause the American Servicer to determine the amount of the Principal Distribution payable for the related Payment Date (the "Note Principal Amount") (rounded to the nearest cent, with half a cent being rounded upward); provided, however, that if the American Servicer is unable to determine the Note Principal Amount in respect of the related Collection Period prior to 3:00 p.m. on such Accounting Date, the Issuer shall cause the American Servicer to determine the Note Principal Amount for the Notes as soon as practicable following such Accounting Date, but no later than 12:00 noon on the Business Day following such Accounting Date. SECTION 3.14 Affirmative Covenants. So long as any of the Notes remain Outstanding and the Term of the Policy shall not have expired, the Issuer shall: (a) do or cause to be done all things necessary to enable it to comply with all applicable legal and accounting rules and regulations; (b) keep proper books of account and records and, upon the request of the Controlling Party, appoint independent public accountants (reasonably acceptable to the Insurer) to audit the books of account and financial statements of the Issuer; and, upon request of the Controlling Party, to prepare annual audited balance sheets, profit and loss statements and retained earnings statements of the Issuer within six months after the end of each fiscal year (and a copy of each such audited financial statement shall be provided to each of the Indenture Trustee, the Insurer, Moody's and Standard & Poor's, and allow the Indenture Trustee, the Insurer and any Person appointed by either of them, access to the books of account and records of the Issuer at all reasonable times upon reasonable notice during normal business hours, and permit the Indenture Trustee, the Insurer and any Person appointed by either of them to discuss the affairs, finances and accounts of the Issuer with any of its officers, directors and employees and to discuss the affairs, finances and accounts of the Issuer with the Issuer's independent public accountants (to the extent such accountants have been appointed); (c) [Reserved]; (d) give notice in writing to the Indenture Trustee, the Servicer and the Insurer promptly upon becoming aware of the occurrence of any circumstance that might reasonably be expected to constitute an Event of Default or Default, and such notice shall contain a description of the facts, circumstances or events that might reasonably be expected to constitute such Event of Default or Default, provided that in connection with such notice, the Issuer may disclaim in good faith any admission that such circumstance does constitute an Event of Default or Default; (e) so far as permitted by law, at all times give to the Indenture Trustee such information as it shall reasonably require for the purpose of the discharge of the duties, powers, trusts, authorities and discretions vested in it by this Indenture; (f) take all reasonable actions necessary so as to be exempt from registration under the Investment Company Act; (g) take all reasonable actions necessary so as to exempt from registration the sale of Notes under the Securities Act, or under any applicable securities laws; (h) maintain all licenses, permits, charters and registrations which are material to the conduct of its business; (i) deliver to the Indenture Trustee and, so long as any Notes are Outstanding, the Insurer, (x) annually and (y) within 10 days after any reasonable request by the Indenture Trustee or the Insurer, an Officer's Certificate of the Issuer to the effect that, having made all reasonable inquiries, to the best of the knowledge, information and belief of the Issuer there did not exist, as at a date not more than five days prior to the date of the certificate nor had there existed at any time prior thereto since the date hereof or the date of the last such certificate (if any), any Event of Default or any Default or, if such an Event of Default or Default did then exist or had existed, specifying the same; (j) deliver to the Indenture Trustee and the Insurer as soon as practicable prior to the date of delivery, a copy of the form of each notice to be delivered to the Holders of the Notes (such notice to be in a form approved by the Indenture Trustee and the Insurer (which approval shall not be unreasonably withheld or delayed)); (k) file all income tax returns of any jurisdiction which, to the knowledge of the officers of the Issuer, are required to be filed and pay all taxes as shown on said returns, if and to the extent such taxes become due; provided, however, the Issuer shall not be required to pay or discharge or cause to be paid or discharged any such taxes whose amount, applicability or validity is being contested in good faith by appropriate proceedings so long as (i) there shall be no material risk of forfeiture of property in the Trust Estate and (ii) the Issuer maintains adequate reserves for the payment of contested taxes; (l) in addition to any other notices, certificates or information provided pursuant to this Indenture, promptly inform the Indenture Trustee and the Insurer in writing of the following: (i) the commencement of any rulemaking or disciplinary Proceeding or the promulgation of any proposed or final rule (other than a rule or proceeding which has general applicability to Persons including the Issuer) which would have a Material Adverse Effect; (ii) the commencement of any Proceedings by or against the Issuer in any court of competent jurisdiction or before any governmental body or agency, or before any arbitration board, or the threat of any such proceedings, which might reasonably be expected to have a Material Adverse Effect on the Issuer or on the Issuer's ability to comply with the Notes or perform its obligations under any provision of the Transaction Documents to which it is a party; and (iii) the receipt of notice from any Governmental Authority having authority over the conduct of the Issuer's business that (A) the Issuer is being placed under regulatory supervision, (B) any license, permit, charter, membership or registration relating to the conduct of the Issuer's business is to be suspended or revoked, and such suspension or revocation could reasonably be expected to have a Material Adverse Effect on the Issuer, or (C) the Issuer is to cease and desist any practice, procedure or policy employed by the Issuer in the conduct of its business, and such cessation would have a Material Adverse Effect upon the Issuer; (m) maintain corporate records and books of account separate from any Person which owns more than 50% of its equity securities; (n) [Reserved]; (o) so long as any Notes are Outstanding, deliver to each Rating Agency by which the Notes are for the time being rated such information as such Rating Agency may request and which is material in maintaining its surveillance of the transactions contemplated by the Transaction Documents; (p) generally pay its debts as they become due; (q) [Reserved]; (r) [Reserved]; (s) apply its funds (other than any transaction fees paid to it in respect of the Notes) towards the payment of amounts due under the Notes and towards the other sums payable by the Issuer under the Transaction Documents in connection with the transactions contemplated therein and for no other purpose; provided, however, Issuer shall be permitted to apply its funds to amounts payable to the Certificateholder pursuant to Section 10.03(xi) hereof; (t) no later than 30 Business Days prior to the optional redemption of the Notes in whole pursuant to this Indenture or otherwise, furnish to the Insurer a notice of such redemption, and, upon a redemption or other payment of all of the Notes and the expiration of the Term of the Policy, to surrender the Policy to the Insurer for cancellation; (u) (A) act and conduct its business solely in its own name through the Issuer Trustee or through other agents selected in accordance with the Trust Agreement, including, without limitation, its Officers and the Servicers; (B) maintain separately the Issuer's funds and assets from those of any Certificateholder and any Affiliates of the Certificateholder, and such funds and assets shall not be commingled with the funds and assets of any other Person; (C) maintain complete and correct books and records of account and minutes of the proceedings of the Issuer, separate from the books and records of any other Person or entity; (D) use stationery, invoices, checks and other business forms of the Issuer and not those of any Certificateholder or any Affiliate of a Certificateholder, and shall not have the appearance (x) of conducting business on behalf of any Certificateholder or any Affiliate of a Certificateholder or (y) that the assets of the Issuer are available to pay the creditors of any Certificateholder or any Affiliate of a Certificateholder; (E) except as otherwise specified in the Trust Agreement, pay all of Issuer's liabilities out of its own funds, provided that Arby's shall be liable for the initial organizational expenses of the Issuer, (F) not hold itself out as being liable for the debts of any Certificateholder or any Affiliate of a Certificateholder; (G) not engage in any transaction with any Certificateholder or any Affiliate of a Certificateholder, except as contemplated by the Final Contribution Agreement or either Servicing Agreement, and otherwise as required, or specifically permitted by this Agreement or the Trust Agreement; provided, however, that any such transaction must be commercially reasonable on terms similar to those available in an arm's length transaction; (H) not incur any debt other than as contemplated by the Trust Agreement or this Indenture; (I) maintain separate financial statements showing its assets and liabilities separate and apart from those of any other Person; (J) not guarantee or become obligated for the debts of any other Person or hold out is credit as being available to satisfy the obligations of others' (K) allocate fairly and reasonably any overhead expenses that are shared with Affiliates, including the payments for office space; (L) hold itself out as a separate entity, correct any known misunderstandings regarding its separate identity, and not identify itself as a division of any other Person; (M) maintain adequate capital in light of its contemplated business operations; (N) while any amounts under this Indenture remain outstanding, not dissolve, liquidate, merge, consolidate or sell substantially all of its assets, except in accordance with the Section 3.08 and Article Eleven hereof, (O) maintain bank accounts separate from those of any other Person and not permit any Affiliate independent access to such bank accounts; (P) not acquire obligations or securities of any Certificateholder or any Affiliate of a Certificateholder; (Q) observe all Delaware statutory business trust formalities; (R) not pledge its assets for the benefit of any other Person or make loans or advances to any Person other than as contemplated by the Trust Agreement or this Indenture; and (S) cause the Officers of the Issuer and its agents, including the Servicers, to act at all times with respect to the Issuer consistently with, and in furtherance of, the foregoing and in the best interests of the Issuer (subject, with respect to the Servicers, to their respective rights under the terms of the Servicing Agreements); (v) comply with all directions of the Controlling Party properly given in accordance with the terms of this Indenture; (w) if requested, to use its best efforts to permit the Notes to be designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. relating to trading in the PORTAL market; and (x) permit compliance with Rule 144A under the Securities Act in connection with the sale of the Notes, and furnish upon request of a holder of a Note to such holder and a prospective purchaser designated by such holder the information required to be delivered under Rule 144A(d)(4) under the Securities Act if at the time of the request the Issuer is not a reporting company under Section 13 or Section 15(d) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), or exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act; (y) at the request of the Insurer, engage the Industry Consultant (satisfactory to the Insurer) at the expense of the Issuer that will monitor for the benefit of the Insurer the performance of each Servicer in accordance with the terms of the Industry Consultant Letter and pay its fees in accordance with the fee letter related thereto; (z) engage the SPE Administrator (satisfactory to the Insurer) at the expense of the Issuer that will provide certain services in accordance with the SPE Administrator Letter and pay its fees in accordance with the SPE Administrator Letter; (aa) enforce the obligations of the Affiliates of the Issuer under and pursuant to the Transaction Documents; and (bb) (x) apply all Capital Contributions received from FinCo to Available Funds for distribution in accordance with the Priority of Payments or in order to consummate an optional redemption in accordance with Section 9.01 hereof, in whole or in part, and (y) with the consent of the Controlling Party, such consent not to be unreasonably withheld or delayed, include Capital Contributions in the calculation of Net Cash Flow for the purpose of calculating the Debt Service Coverage Ratio. SECTION 3.15 Further Assurances. (a) The Issuer or the Indenture Trustee at the direction of the Issuer, shall execute and deliver, or cause to be executed and delivered, all such additional instruments, and do, or cause to be done, all such additional acts as (i) may be necessary or proper, consistent with the Granting Clauses, to carry out the purposes of this Indenture and to make subject to the Lien hereof any property intended so to be subject, including in the event of any change in applicable law or regulations, (ii) may be necessary or proper to transfer to any successor Indenture Trustee or co-Indenture Trustee the estate, powers, instruments and funds held in trust hereunder and to confirm the Lien of this Indenture, or (iii) the Indenture Trustee or the Insurer may reasonably request. In addition, the Issuer shall (at the direction or with the consent of the Insurer, so long as the Insurer is the Controlling Party), take all actions, and shall direct the Indenture Trustee in writing to take all actions as shall be specified to the Issuer, necessary to preserve and protect the security interest in the Collateral created hereunder, free of any Liens, including but not limited to the removal and transfer of any such Collateral from any existing location or jurisdiction to another location or jurisdiction so as to prevent the impairment of the security interest in such Collateral created by this Indenture. (b) [Reserved.] (c) All oral and written communications made by the Issuer or by any Person on behalf of the Issuer, including, without limitation, letters, invoices, purchase orders, contracts, statements, loan applications, and all notices, certificates or information required to be delivered or communicated pursuant to this Indenture, shall be made or delivered by the Issuer or by any such Person on behalf of the Issuer. (d) The Indenture Trustee shall cooperate in all respects with any reasonable written request by the Insurer to preserve or enforce the Insurer's rights and interests under this Indenture. SECTION 3.16 Financial Covenants. (a) If funds in the Debt Service Reserve Account are less than the Minimum Debt Service Reserve Amount, then all investment income earned on funds in the Debt Service Reserve Account shall be retained in the Debt Service Reserve Account until the funds in the Debt Service Reserve Account are equal to or greater than the Minimum Debt Service Reserve Amount. If funds in the Debt Service Reserve Account are greater than or equal to the Minimum Debt Service Reserve Amount, then all investment income earned on funds in the Debt Service Reserve Account, shall be released to the Collection Account for distribution as Available Funds in accordance with the Priority of Payments. (b) (i) On each Payment Date, in accordance with the Priority of Payments, the Cash Trap Reserve Amount shall be deposited into the Debt Service Reserve Account. (ii) If a Cash Trap Event has occurred but is no longer continuing, then, on the Payment Dates relating to each of the four Collection Periods commencing with the Collection Period related to the Accounting Date on which the Cash Trap Event ceases, 25% of the Cash Trap Excess existing as of the Accounting Date on which such cessation occurred shall be deemed to be Available Funds and the Issuer shall release such amount to the Collection Account for distribution in accordance with the Priority of Payments. The Issuer shall cease any such release of the Cash Trap Excess upon the occurrence of any subsequent Cash Trap Event, in which case the Issuer shall make any subsequent release of Cash Trap Excess only upon the cessation of such subsequent Cash Trap Event and only in the amount (on each of the four applicable Payment Dates) of 25%, of the Cash Trap Excess existing as of the date of the cessation of such subsequent Cash Trap Event. (c) So long as any Notes are Outstanding, on each Payment Date in each of December, January and February of each year, the Issuer shall deposit the Seasonality Deposit Amount into the Seasonality Coverage Account. On each Accounting Date in March, April and May, the Issuer shall reduce the Seasonality Coverage Balance by the Seasonality Release Amount. The Seasonality Release Amount shall be deemed to be Available Funds on such Accounting Date for distribution in accordance with the Priority of Payments. (d) So long as any Notes are Outstanding, the Issuer shall maintain a Royalty Rate of not less than 4% for all new Franchise Agreements entered into on and after the Closing Date and the Issuer shall maintain the Royalty Rate as of the Cut-Off Date for each Franchise Agreement existing as of the Cut-Off Date and any renewal thereof (subject to an exception for 20 Franchise Agreements per year and 50 Franchise Agreements in the aggregate at any one time in effect; provided, that with the prior consent of the Controlling Party, such consent not to be unreasonably withheld or delayed, such exception may be modified or amended). ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 4.01 Satisfaction and Discharge of Indenture. (a) This Indenture shall cease to be of further effect with respect to the Notes except as to (1) rights of registration of transfer and exchange, (2) substitution of mutilated, destroyed, defaced, lost or stolen Notes, (3) rights of Noteholders to receive payments of principal thereof and interest thereon and the Insurer to receive any reimbursement or other amounts due or to become due hereunder or under the Insurance Agreement that have not been previously paid, (4) the rights, obligations and immunities of the Indenture Trustee hereunder including, without limitation, the rights to compensation, reimbursement and indemnification and (5) the rights of Noteholders as beneficiaries hereof with respect to the property deposited with the Indenture Trustee and payable to all or any of them, and all Collateral, rights and interest hereby conveyed or assigned or pledged and not disposed of previously pursuant to Section 5.06 then remaining, if any, shall revert to the Issuer, and the estate, right, title and interest of the Indenture Trustee and the Secured Parties therein shall thereupon cease, terminate and become void, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute instruments in form and substance reasonably satisfactory to the Issuer and the Indenture Trustee acknowledging satisfaction and discharge of this Indenture and releasing the Collateral from the Lien of this Indenture, and execute and deliver such other instruments or documents as may be reasonably requested by the Issuer or the American Servicer to give effect to such release, and shall convey, assign and transfer, or cause to be conveyed, assigned or transferred, and shall deliver or cause to be delivered to the Issuer, all such remaining Collateral, including money, then held by the Indenture Trustee or any co-trustee, other than moneys deposited with the Indenture Trustee pursuant to clause (ii) below, when: (i) either (A) all Notes theretofore authenticated and delivered (other than (x) Notes which have been destroyed, lost or stolen and which have been paid or replaced as provided in Section 2.06 hereof, and (y) Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03 hereof) have been delivered to the Indenture Trustee for cancellation; or (B) all Notes not theretofore delivered to the Indenture Trustee for cancellation (x) have become due and payable, (y) will become due and payable at the Legal Final Payment Date within one year or (z) are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name and at the expense of the Issuer, and there has been irrevocably deposited with the Indenture Trustee, in trust for such purpose, cash or Eligible Investments in a principal amount sufficient to pay and discharge the entire indebtedness on such Notes on the earlier of a redemption date or the Legal Final Payment Date, whichever is applicable, and the Issuer has delivered an Accountants' Certificate to the Indenture Trustee confirming such calculations; (ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer and no other amounts will become due and payable by the Issuer; (iii) the Issuer has delivered to the Indenture Trustee and the Insurer an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to the Notes have been complied with; and (iv) the Policy has expired or been terminated or canceled by the Indenture Trustee in accordance with its terms and the Indenture Trustee has returned the Policy to the Insurer; provided, however, the Indenture Trustee shall be required to cancel the Policy if all amounts under the Notes and the Insurance Agreement have been paid and the Insurer shall have confirmed in writing that the Issuer has provided an Opinion of Counsel, or such other adequate assurances as may be required by the Insurer in its sole judgment, to the Insurer that the discharge of the Indenture will not subject the Insurer to a risk of preference or recapture on amounts previously paid by the Issuer to discharge the Notes. The foregoing provision notwithstanding, amounts owing in respect of Notes which shall have been paid, or for which provision shall have been made, by a payment from the Insurer pursuant to the Policy shall continue to be Outstanding under this Indenture, and the conditions set forth in this Section 4.01 shall not be satisfied, and the Insurer shall become the Holder of such Notes for all purposes of this Indenture; provided, that if the Issuer shall make payment to the Insurer of all Reimbursements due hereunder and under the Insurance Agreement in respect of any payments by the Insurer of principal of and interest on the Notes, together with any interest due under the Insurance Agreement thereon, the obligation of the Issuer with respect to payment of such Notes shall cease to the extent of such Reimbursement, and if such Reimbursement shall be sufficient to pay the principal of and interest due on such Notes, such Notes shall no longer be deemed Outstanding for purposes of this Indenture. (b) Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuer, the Noteholders and the Secured Parties under Sections 2.07, 2.13(d), 3.01, 3.03(c), 3.14(v), 4.02, 5.06(e), 6.06, 6.07(e) and 10.03 hereof shall survive such satisfaction and discharge. SECTION 4.02 Application of Trust Money. All monies, Cash or Eligible Investments deposited with the Indenture Trustee pursuant to Section 4.01 hereof shall be irrevocably held in trust by the Indenture Trustee and applied by it, in accordance with the provisions of the Notes and this Indenture and in the Priority of Payments set forth in Section 10.03, to the payment to the Person or Persons entitled thereto of the principal and interest for whose payment such monies, Cash and Eligible Investments have been deposited with the Indenture Trustee, and such monies, Cash and Eligible Investments shall be held in a segregated trust account identified as being held in trust for the benefit of the Noteholders and the Secured Parties. SECTION 4.03 Reinstatement. If the Indenture Trustee is unable to apply any cash or Eligible Investments in accordance with Section 4.01 hereof by reason of any Proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 4.01 hereof until such time as the Indenture Trustee is permitted to apply all such cash or Eligible Investments in accordance with Section 4.01 hereof; provided, however, that if the Issuer has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the holders who received such cash or Eligible Investments to receive such payment from the Notes held by the Indenture Trustee. ARTICLE FIVE REMEDIES SECTION 5.01 Events of Default. Any of the following shall be an event constituting a default under this Indenture (an "Event of Default") with respect to the Notes then Outstanding, or any of them: (a) a default shall occur in the payment of principal of the Notes on the Legal Final Payment Date (without giving effect to payments made with the proceeds of a drawing under the Policy); (b) a default shall occur in the payment of any interest due in respect of the Notes; provided, however, if such default is due solely to administrative error and funds are otherwise available therefor in the Collection Account and without taking into account the availability of the Policy, then such default shall have occurred and continued for one (1) full Business Day; (c) the Issuer fails to perform or comply with any of the covenants contained in Sections 3.04, 3.05(a), 3.07, 3.08, 3.10, 3.11, 3.14(u)(B), (H), (J), (N), (O), (R), 3.14(bb) or 3.14(v) hereof; (d) the occurrence of a Servicer Termination Event under the American Servicing Agreement (other than a Servicer Termination Event that occurs solely with respect to the Debt Service Coverage Ratio); (e) the occurrence of a Servicer Termination Event under the Canadian Servicing Agreement (other than a Servicer Termination Event that occurs solely with respect to the Debt Service Coverage Ratio); provided that a Servicer Termination Event under the Canadian Servicing Agreement shall only be an Event of Default if, at such time the Servicer Termination Event occurs and is continuing, Collections from Restaurants located in Canada exceed 10% of the Collections from all Restaurants located in the United States and Canada calculated as of the last preceding Accounting Date; (f) the Issuer fails to perform or observe any of its other obligations under this Indenture not covered by clause (c) above and such failure continues for a period ending on the earlier to occur of 30 consecutive days after the Issuer shall have become aware of such failure or after the Issuer shall have received notice of such failure; provided, however, so long as the Issuer is diligently attempting to cure such failure, such cure period shall be extended by an additional period as may be required but in no event more than an additional 30 days; (g) an effective resolution is passed by the Issuer for the winding up or liquidation of the Issuer, except a winding up for the purpose of a merger, reconstruction or amalgamation in accordance with Section 3.08, the terms of which winding up or liquidation have previously been approved in writing, by the Controlling Party; (h) any petition is filed, or any case or proceeding is commenced, against the Issuer under the Bankruptcy Code or any other similar applicable federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, and such filing, case or proceeding has not been dismissed within 60 days after such filing or commencement; (i) the institution by the Issuer of Proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency Proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization relief under the Bankruptcy Code or any other similar applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of action by the Issuer in furtherance of any such action; (j) the Issuer shall be required to register as an "investment company" under the Investment Company Act; (k) (i) (A) Arby's shall fail to perform or comply with any of its covenants contained in subsection (c)(iv) of Section 4.5 of the American Servicing Agreement; (B) either Holdings or FinCo shall fail to perform or comply with any of the limitations on its activities contained in subsections (A) (solely as such provision relates to Bank Accounts), (E), (K), (R) and (S) of Section 9(j)(iv) of its respective LLC Agreement; or (C) IP Holder shall fail to perform or comply with any of the operating standards contained in subsections (b), (h), (k), (o), (q) and (t) of Section 2.9 of the IP Holder Trust Agreement; or (ii) (A) either Holdings or FinCo shall fail to perform or comply with any of the limitations on its activities contained in Section 9(j)(iv) of its respective LLC Agreement not specified in (i)(B) above; or (B) IP Holder shall fail to perform or comply with any of the operating standards contained in Section 2.9 of the IP Holder Trust Agreement not specified in (i)(C) above and, in the case of the preceding clauses (ii)(A) and (ii)(B), such failure continues for a period ending on the earlier to occur of 30 consecutive days after Holdings, FinCo or IP Holder, as the case may be, shall have become aware of such failure or shall have received notice of such failure, provided, however, so long as Holdings, FinCo or IP Holder, as the case may be, is diligently attempting to cure such failure, such cure period shall be extended by an additional period as may be required but in no event more than an additional 30 days; (l) the Debt Service Coverage Ratio is less than or equal to 1.00; (m) any representation or warranty made by the Issuer in any Transaction Document shall prove to be false or incorrect in any material respect as of the date made or deemed to be made or as of any other date specified in the applicable Transaction Document (a "Breach"), provided that if any such Breach is capable of being remedied within 30 days of the Issuer's knowledge of such Breach or receipt of notice thereof, then an Event of Default shall occur under this clause (l) as a result of such Breach if it is not cured in all material respects by the end of such 30-day period; provided, further, that so long as the Issuer is diligently attempting to cure such failure, such cure period shall be extended by an additional period as may be required but in no event more than an additional 30 days; or (n) the occurrence and continuation of an "Event of Default" under the Insurance Agreement. SECTION 5.02 Insurer Defaults. "Insurer Default" means the occurrence and continuance of any of the following events: (a) the Insurer shall have failed to make a payment required under the Policy in accordance with its terms; (b) the Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii) made a general assignment for the benefit of its creditors, or (iii) had an order for relief entered against it under the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or (c) a court of competent jurisdiction, the New York Department of Insurance or other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, trustee, agent or receiver for the Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Insurer (or the taking of possession of all or any material portion of the property of the Insurer). The Insurer shall promptly notify the Indenture Trustee and the Issuer in writing of any Insurer Default described in subsection (b) or (c) above, and the Indenture Trustee and the Issuer shall not be deemed to have knowledge of any such events until receipt of written notice of such event from the Insurer or any other Person or Responsible Officer of the Indenture Trustee or the Issuer, as the case may be, responsible for administering the transactions herein described has actual knowledge of such event. SECTION 5.03 [Reserved]. SECTION 5.04 [Reserved]. SECTION 5.05 Acceleration of Maturity; Rescission and Annulment. (a) At any time after an Event of Default has occurred and is continuing, other than an Event of Default specified in clause (f), (g) or (h) of Section 5.01, the Indenture Trustee shall, at the direction of the Controlling Party and on behalf of the Holders of the Notes, declare on written notice to the Issuer, the Aggregate Outstanding Principal Amount of the Notes to be immediately due and payable, and upon any such declaration, such principal, together with all accrued and unpaid interest thereon, and other amounts payable hereunder, shall automatically become immediately due and payable in accordance with the Priority of Payments; provided that such acceleration shall not result in an acceleration of payments under the Policy. If an Event of Default specified in clause (f), (g) or (h) of Section 5.01 shall have occurred and be continuing, all unpaid principal, together with all accrued and unpaid interest thereon, of all of the Notes, and other amounts payable hereunder, shall automatically become due and payable; provided that such acceleration shall not result in an acceleration of payments under the Policy. (b) At any time after an Event of Default has occurred and the Notes have been accelerated pursuant to Section 5.05(a) above, the Indenture Trustee (or either of the Servicers on behalf of the Indenture Trustee) shall at the written direction of the Controlling Party invest or dispose of any or all of the Collateral. The Indenture Trustee shall not be bound to institute any Proceedings or take any other action unless (i) with respect to an acceleration of the Notes pursuant to this Section 5.05(a), it shall have been so requested by the Controlling Party and (ii) it shall have been provided security or indemnity to its reasonable satisfaction. (c) At any time after such a declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article Five, the Controlling Party, by written notice to the Issuer and the Indenture Trustee (if it is not the Controlling Party), may rescind and annul such declaration and its consequences if: (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay: (A) all overdue installments of interest and principal on the Notes, (B) all unpaid taxes, SPV Operating Expenses and other sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel and any due and unpaid Servicing Fees, and (C) all outstanding Reimbursements and the Premium owed to the Insurer; and (ii) the Indenture Trustee has determined, after consultation with counsel of its own choosing (which may include obtaining such Opinions of Counsel as it deems necessary or advisable), that all Events of Default, other than the non-payment of the interest on or principal of Notes that have become due solely by such acceleration, have been cured and the Controlling Party, by written notice to the Indenture Trustee, has agreed with such determination (which agreement shall not be unreasonably withheld or delayed) or waived as provided in Section 5.08. No such rescission and annulment shall affect any subsequent Default or Event of Default or impair any right consequent thereon. SECTION 5.06 Enforcement; Recourse Limited to Collateral. (a) At any time after an Event of Default has occurred and is continuing, the Indenture Trustee shall, pursuant to a Controlling Party Order, institute Proceedings to seek or enforce any remedy to protect and enforce any rights or powers of the Indenture Trustee hereunder or any of the rights or powers of the Insurer and Holders of all of the Notes. Upon the acceleration of the Notes under Section 5.05 hereof, the Indenture Trustee shall, if and as directed pursuant to a Controlling Party Order, (i) institute Proceedings to enforce the rights of the Indenture Trustee with respect to the Collateral, including, without limitation, to foreclose upon the Collateral or sell the Collateral under a decree of a court or courts of competent jurisdiction, and (ii) may at its discretion take any other action of a secured party as permitted by the laws of the State of New York. Except as provided in Section 3.05 or otherwise in this Indenture, the Indenture Trustee shall have no right of enforcement against the Collateral unless and until the Notes have been accelerated as provided in Section 5.05 hereof. In addition, in the case of an Insurer Default, the Indenture Trustee shall institute such Proceedings or take such other action to enforce the obligations of the Insurer under the Policy as the Holders of a Majority of the Aggregate Outstanding Principal Amount of the Notes shall direct in writing. No Noteholder shall be entitled to institute Proceedings or take such other action directly against the Issuer, the Insurer or the Collateral with respect to the Notes, whether to enforce the Issuer's obligations hereunder or under such Notes, or against any Collateral securing the Notes, unless an Insurer Default has occurred and is continuing and unless the Indenture Trustee, having become bound so to act, fails to institute Proceedings against the Issuer or with respect to any such Collateral within a reasonable time and such failure is continuing. (b) At any time after the Notes then Outstanding have become payable upon acceleration in accordance with Section 5.05 hereof, the Indenture Trustee may, or shall at the written direction of the Insurer (so long as it is the Controlling Party), from time to time sell, in any manner permitted by law, without recourse, at public or private sale, for Cash or Notes in lieu of Cash as provided in Section 5.06(c)(iv) and for such price or prices and on such terms (as to any or all of which manner, prices and terms the Indenture Trustee may rely conclusively on the opinion of a financial adviser selected by it as provided in Section 6.03), with respect to an acceleration pursuant to Section 5.05(a), as the Indenture Trustee shall be directed in writing by the Controlling Party, all or any part of the Collateral. Notwithstanding the foregoing, if such prices or terms are such that a sale of the Collateral at such prices or terms would result in sales proceeds that are insufficient to satisfy the obligations of the Issuer under this Indenture, the Indenture Trustee shall not proceed with a sale of any portion of the Collateral without the consent of the Insurer (so long as it is the Controlling Party), and, if the Insurer is no longer the Controlling Party, Holders of a Majority of the Aggregate Outstanding Principal Amount of the Notes. (c) Upon any sale of all of the Collateral securing the Notes as provided in this Indenture made either under the power of sale given under this Indenture or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Indenture, the following shall be applicable: (i) The Indenture Trustee is hereby irrevocably appointed the true and lawful attorney of the Issuer to the extent permitted by law, in its name and stead, to make all necessary deeds, bills of sale and instruments of assignment, transfer or conveyance of the property thus sold; and for that purpose may make instruments and instructions and may substitute one or more Persons with like power; and the Issuer hereby ratifies and confirms all that its said attorney, or such substitute or substitutes, shall lawfully do by virtue hereof. (ii) If so requested by the Indenture Trustee or by any purchaser, the Issuer shall ratify and confirm any such sale, or transfer by executing and delivering to the Indenture Trustee or to such purchaser or purchasers all proper deeds, bills of sale, instruments of assignment, conveyance or transfer and releases as may be designated in any such request. (iii) To the extent permitted by applicable law, any Noteholder, the Indenture Trustee or the Insurer may bid for and purchase any of the Collateral, and upon compliance with the terms of sale, may hold, retain, possess and dispose of such Collateral in his or its own absolute right without further accountability. (iv) Any purchaser at any such sale may, in paying the purchase price for Collateral securing the Notes, deliver any Notes in lieu of Cash and apply to the purchase price the amount that upon distribution of the net proceeds of such sale, after application to the costs of the action and any other sums that the Indenture Trustee is authorized to deduct under this Indenture, would have been payable on such Notes so delivered in respect of principal and interest. (v) The receipt of the purchase price by the Indenture Trustee or of the officer making such sale under judicial proceeding shall be sufficient discharge to any purchaser for his purchase money, and, after paying such purchase money and receiving such receipt, such purchaser or its personal representatives or assigns shall not be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof. (vi) Any such sale, to the maximum extent permitted by law, shall operate to divest the Issuer of all right, title, interest, claim and demand whatsoever, either at law or in equity or otherwise, in and to the Collateral so sold and shall be a perpetual bar both at law and at equity or otherwise against the Issuer, and its successors and assigns, and any and all Persons claiming or who may claim the Collateral sold or any part thereof from, through or under the Issuer, or its successors and assigns. (vii) Any moneys collected by the Indenture Trustee upon any sale made either under the power of sale given by this Indenture or under judgment or decree in any judicial proceedings for foreclosure or otherwise for the enforcement of this Indenture shall be applied as provided in Section 5.07 hereof. (d) In accordance with the terms of this Indenture, at any time the Indenture Trustee is directed to institute Proceedings to enforce the Notes or this Indenture with respect to such Notes, the following shall be applicable: (i) The Indenture Trustee in its own name, and as trustee of an express trust, shall be entitled and empowered to institute any suits, actions or other Proceedings at law, in equity or otherwise, to recover judgment against the Issuer on such Notes for the whole amount due and unpaid, and against the Insurer for any amounts owing under the Policy and may prosecute any such claims or Proceedings to judgment or final decree against the Issuer or the Insurer and collect the monies adjudged or decreed to be payable in any manner provided by law, whether before or after or during the pendency of any Proceedings for the enforcement of the Lien of this Indenture, or of any of the Indenture Trustee's rights or the rights of the Insurer or the Holders of the Notes under this Indenture or the Indenture Trustee's rights under the Policy, and such power of the Indenture Trustee shall not be affected by any sale hereunder or by the exercise of any other right, power or remedy for the enforcement of the provisions of this Indenture or for the foreclosure of the Lien hereof. (ii) Subject to Section 5.06(e) hereof, in case of a sale of Collateral and of the application of the proceeds of such sale to the payment of the principal of and interest on such Notes and other amounts owing hereunder in accordance with the Priority of Payments, the Indenture Trustee in its own name, and as trustee of an express trust, shall be entitled and empowered, by any appropriate means, legal, equitable or otherwise, to enforce payment of, and to receive all amounts then remaining due and unpaid to the Secured Parties, for the benefit of the Secured Parties, with, as applicable, interest at the rate borne by such Notes or such other rate as applicable thereto under the Transaction Documents. (iii) Except as required by applicable law or the terms of such judgment or final decree, no recovery of any judgment or final decree by the Indenture Trustee and no levy of any execution under any such judgment upon any of the Collateral shall in any manner or to any extent affect the Lien of this Indenture upon any of such Collateral, or any rights, powers or remedies of the Indenture Trustee, but all such Liens, rights, powers and remedies shall continue unimpaired as before. (iv) The Indenture Trustee in its own name, or as Indenture Trustee of an express trust, or as attorney-in-fact for Holders of Notes or the Insurer, as the case may be, or in any one or more of such capacities (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the payment of overdue principal or interest), shall be entitled and empowered to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee and of the Insurer and the Holders of Notes, as applicable (whether such claims be based upon the provisions of such Notes, the Policy or of this Indenture), allowed in any receivership, insolvency, bankruptcy, moratorium, liquidation, readjustment, reorganization or any other judicial or other Proceedings relative to the Issuer or the Insurer, the creditors of the Issuer, the Insurer or the Collateral, and any receiver, assignee, Indenture Trustee, liquidator, sequestrator (or other similar official) in any such judicial or other Proceeding is hereby authorized to make such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of such payments directly to the Noteholders or the Insurer, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel. The Indenture Trustee is hereby irrevocably appointed (and the successive respective Holders of the Notes and the Insurer by taking and holding the same, shall be conclusively deemed to have so appointed the Indenture Trustee) the true and lawful attorney-in-fact of the respective Noteholders and the Insurer with authority to (x) make and file in the respective names of the Noteholders and the Insurer (subject to deduction from any such claims of the amounts of any claims filed by any of the Noteholders and the Insurer themselves to the extent permitted hereby) any claim, proof of claim or amendment thereof, debt, proof of debt or amendment thereof, petition or other document in any such Proceeding and to receive payment of amounts distributable on account thereof, (y) execute any such other papers and documents and do and perform any and all such acts and things for and on behalf of such Noteholders and the Insurer as may be necessary or advisable in order to have the respective claims of the Indenture Trustee and of the Noteholders and the Insurer against the Issuer or the Collateral, and (z) receive payment of or on account of such claims and debt; provided that nothing contained in this Indenture shall be deemed to give to the Indenture Trustee any right to accept or consent to any plan of reorganization or otherwise by action of any character in any such Proceeding to waive or change in any way any right of any Noteholder or the Insurer. Any monies collected by the Indenture Trustee under this subsection (d) shall be applied as provided in Section 5.07. (v) All rights of action and of asserting claims under this Indenture, the Policy, or under any of the Notes enforceable by the Indenture Trustee may be enforced by the Indenture Trustee to the extent permitted by law without possession of any of such Notes or the production thereof at the trial or other Proceedings relative thereto. (vi) In case the Indenture Trustee shall have proceeded to enforce any right under this Indenture by suit, foreclosure or otherwise and such Proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Indenture Trustee, then in every such case the Issuer, the Insurer and the Indenture Trustee shall, to the extent permitted by law, be restored without further act to their respective former positions and rights hereunder, and all rights, remedies and powers of the Indenture Trustee shall continue as though no such Proceedings had been taken, except to the extent determined in litigation adversely to the Indenture Trustee. (e) Notwithstanding any other provision of this Indenture, the Notes, the Insurance Agreement, the Servicing Agreements or any other Transaction Document or otherwise, the liability of the Issuer to the Noteholders, the Insurer, the Servicers, the Initial Purchasers, and the Indenture Trustee under or in relation to the Notes, this Indenture, the Insurance Agreement, the Servicing Agreements or any other Transaction Document or otherwise, is limited in recourse to the Collateral. The Collateral having been applied in accordance with the terms hereof, none of the Indenture Trustee, the Noteholders, the Insurer, the Initial Purchasers and the Servicers shall be entitled to take any further steps against the Issuer to recover any sums due but still unpaid hereunder, under the Notes or under any of the other agreements or documents described in this paragraph (e), all claims in respect of which shall be extinguished. In particular, the Indenture Trustee agrees, and each Noteholder by its acceptance of a Note and each other Secured Party and the Servicers by their acceptance of the benefits of this Indenture will be deemed to have agreed, not to take any action or institute any proceeding against the Issuer under any Insolvency Law applicable to the Issuer; provided that each of the Indenture Trustee and the Noteholders, any other Secured Party and the Servicers may become parties to and participate in any Proceeding or action under any Insolvency Law applicable to the Issuer that is initiated by any Person that is not an Affiliate of it. SECTION 5.07 Application of Monies Collected by Indenture Trustee. Any monies withdrawn, collected or to be applied by the Indenture Trustee with respect to the Notes pursuant to this Article Five shall be deposited in the Collection Account (other than proceeds of the Policy which shall be deposited into the Policy Account) and, together with any other monies that may then be held by the Indenture Trustee under any of the provisions of this Indenture as part of the Collateral with respect to the Notes, shall be applied in accordance with the priorities set forth in Section 10.03. SECTION 5.08 Waiver of Appraisement, Valuation, Stay and Right to Marshaling. To the extent it may lawfully do so, the Issuer for itself and for any Person who may claim through or under it hereby: (a) agrees that neither it nor any such Person will step up, plead, claim or in any manner whatsoever take advantage of any appraisement, valuation, stay, extension or redemption laws, now or hereafter in force in any jurisdiction, which may delay, prevent or otherwise hinder (i) the performance, enforcement or foreclosure of this Indenture, (ii) the sale of any of the Collateral, or (iii) the putting of the purchaser or purchasers thereof into possession of such property immediately after the sale thereof; (b) waives all benefit or advantage of any such laws; (c) waives and releases all rights to have the Collateral marshaled upon any foreclosure, sale or other enforcement of this Indenture; and (d) consents and agrees that, subject to the terms of this Indenture, all the Collateral may at any such sale be sold by the Indenture Trustee as an entirety. SECTION 5.09 Remedies Cumulative; Delay or Omission Not a Waiver. To the extent permitted by law, every remedy given hereunder to the Indenture Trustee, the Insurer or to any of the Noteholders shall not be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and in addition to every statute, law, equity or otherwise. Subject to the terms of this Indenture specifically including the rights of the Insurer as Controlling Party (so long as it is the Controlling Party) to direct actions of the Indenture Trustee in accordance with the terms of this Indenture, the Indenture Trustee may exercise all or any of the powers, rights or remedies given to it hereunder or which may be now or hereafter given by statute, law, equity or otherwise, in its absolute discretion. No course of dealing between the Issuer, the Insurer and the Indenture Trustee or the Noteholders or any delay or omission of the Indenture Trustee, the Insurer or of the Noteholders to exercise any right, remedy or power accruing upon any Event of Default shall impair any right, remedy or power or shall be construed to be a waiver of any such Event of Default or of any right of the Indenture Trustee, the Insurer or of the Noteholders or acquiescence therein, and every right, remedy and power given by this Article Five to the Indenture Trustee, the Insurer or to the Noteholders may, to the extent permitted by law, be exercised from time to time and as often as may be deemed expedient by the Indenture Trustee, the Insurer or by the Noteholders. SECTION 5.10 Control by the Insurer. Notwithstanding any other provision of this Indenture (but subject, for the avoidance of any doubt, to the provisions of Sections 5.06(e) and 12.03 hereof), the Controlling Party (so long as it is the Insurer) shall have the right to cause the institution of, and direct the time, method and place of, conducting any Proceeding for any remedy available to the Indenture Trustee and to direct the exercise of any trust, right, remedy or power conferred on the Indenture Trustee, provided that: (a) such direction shall be in writing and shall not conflict with any rule of law or with this Indenture; (b) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction or this Indenture; provided, however, that, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability (unless the Indenture Trustee has received satisfactory indemnity against such liability as set forth below); and (c) the Indenture Trustee shall have been provided with indemnity satisfactory to it. ARTICLE SIX THE INDENTURE TRUSTEE SECTION 6.01 Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default known to the Indenture Trustee, the Indenture Trustee undertakes to perform such duties and obligations and only such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee. (b) In case an Event of Default actually known to the Indenture Trustee has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in such exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (c) No provision of this Indenture shall be construed to relieve the Indenture Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that, subject to Section 6.01(b): (i) this subsection shall not be construed to limit the effect of subsection (a) of this Section 6.01; (ii) the Indenture Trustee may consult with counsel of its own choosing and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (iii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not verify the accuracy of the contents thereof) and shall promptly notify the party delivering the same if such certificate or opinion does not conform. If a corrected form shall not have been delivered to the Indenture Trustee within 30 days after such notice from the Indenture Trustee, the Indenture Trustee shall so notify the Insurer and the Noteholders; (iv) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proven that the Indenture Trustee was negligent in ascertaining the pertinent facts; (v) the Indenture Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith with respect to the method and place of conducting any Proceeding for any remedy available to the Indenture Trustee, or with respect to exercising any trust or power conferred upon the Indenture Trustee, under this Indenture; (vi) no provision of this Indenture shall be construed as requiring the Indenture Trustee to expend or risk its own funds or otherwise incur any liability, loss or risk in the performance of any of its duties hereunder, financial or otherwise, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; (vii) the Indenture Trustee shall not be liable or responsible for any loss resulting from any investment of monies held by it under this Indenture invested in accordance with the terms hereof or resulting from the redemption or sale of any investment as herein authorized; and (viii) for all purposes of this Indenture, the Indenture Trustee shall not be deemed to have knowledge of an Event of Default, nor shall it be obligated to exercise any remedies with respect thereto, unless (A) a Responsible Officer of the Indenture Trustee shall have actual knowledge thereof or (B) written notice of such Event of Default shall have been received by a Responsible Officer of the Indenture Trustee from the Issuer, the Insurer or from the Holders of greater than 50% in Aggregate Outstanding Principal Amount of the Notes then Outstanding, provided that, with respect to an Event of Default under Section 5.01(a) or Section 5.01(b) hereof, such written notice may be received from any individual Holder of a Note. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Article Six. (e) Whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Issuer Order or Controlling Party Order as the case may be, delivered to the Trustee and such Issuer Order or Controlling Party Order, as the case may be, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. (f) The Indenture Trustee shall require that any agent appointed hereunder agree to be bound by the terms of this Indenture with respect to any actions to be taken outside of the United States. SECTION 6.02 Notice of Default. Promptly (and in no event later than two Business Days) after the Indenture Trustee becomes actually aware of the occurrence of any Default or Event of Default, the Indenture Trustee shall notify the Insurer, the Issuer, the Rating Agencies and all Noteholders in accordance with Section 12.04 hereof of the occurrence of such Event of Default, unless such Default or Event of Default shall have been cured or waived in accordance with the terms hereof. If any securities exchange with respect to which any of the Notes may be listed so requires, the Indenture Trustee shall publish such notice in accordance with such requirements from funds available for such purpose in accordance with Section 10.03. SECTION 6.03 Certain Rights of Indenture Trustee. Subject to Section 6.01 hereof: (a) the Indenture Trustee may rely conclusively and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper or document (including facsimile transmission) believed by it to be genuine and to have been signed or presented by the proper party or parties and the Indenture Trustee shall have no responsibility to ascertain or confirm the genuineness of any signature of any such party or parties; (b) any request of the Issuer shall be sufficiently evidenced by an Issuer Request or Issuer Order; (c) whenever in the administration of this Indenture the Indenture Trustee shall (i) deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely conclusively upon an Officers' Certificate or Opinion of Counsel or (ii) be required to determine the value of any collateral or funds hereunder or the cash flows projected to be received therefrom, the Indenture Trustee may, in the absence of bad faith or its part, rely conclusively on reports of nationally recognized accounting firms or other persons qualified to provide the information required to make such determination, including nationally or internationally recognized dealers, of the type of collateral being valued and securities quotation services; (d) as a condition to the taking or omitting of any action by it hereunder, the Indenture Trustee may consult with counsel, financial advisors or accountants of its own choosing and the advice of such counsel (including any opinion provided by such counsel), financial advisors or accountants shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon; (e) the Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to honor the request or direction of any of the Noteholders, the Controlling Party or either of the Servicers pursuant to this Indenture unless such request or direction is in writing and such parties shall have offered to the Indenture Trustee security or indemnity satisfactory to the Indenture Trustee against all costs, expenses and liabilities which might reasonably be incurred by it in compliance with such request or direction; provided, however, that the Indenture Trustee shall have no liability for failing to take any action or to exercise any of the rights or powers under this Indenture (other than any action or exercise in the ordinary course of performing its services under this Indenture) if any such required indemnity or security is not provided with respect to such action or exercise; (f) the Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note or other paper documents, but the Indenture Trustee, upon written direction of the Insurer or Noteholders of more than 50% of the Aggregate Outstanding Principal Amount of the Notes, shall make such further inquiry or investigation into such facts or matters as it may see fit or as it shall be directed; (g) the Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys; provided, however, that so long as the Indenture Trustee shall have received the consent of the Controlling Party prior to such appointment the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of any agent appointed, or attorney appointed, with due care by it hereunder. The Insurer hereby consents to the appointment by the Issuer of the Indenture Trustee, as paying agent; (h) to the extent permitted by applicable law, the Indenture Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise; and (i) the Indenture Trustee shall not be deemed to have notice or knowledge of any matter unless a Responsible Officer assigned to and working in the Indenture Trustee's corporate trust department has actual knowledge thereof or unless written or facsimile notice thereof is received by the Indenture Trustee at the Corporate Trust Office and such notice references the Notes generally, the Issuer or this Indenture. Whenever reference is made in this Indenture to an Event of Default such reference shall, insofar as determining any liability on the part of the Indenture Trustee is concerned, be construed to refer only to an Event of Default of which the Indenture Trustee is deemed to have knowledge in accordance with this paragraph. SECTION 6.04 Not Responsible for Recitals or Issuance of Notes. The recitals contained in this Indenture and in the Notes (except for the Indenture Trustee's certificate of authentication) shall be taken as statements of the Issuer, and the Indenture Trustee assumes no responsibility of the correctness of the same. The Indenture Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Notes or any offering memorandum related thereto or the Trust Estate, or any money paid to the Issuer or upon the Issuer's direction under any provision hereof or the application by the Issuer of the Notes or the proceeds thereof. The Indenture Trustee shall not be accountable for the use or application by the Issuer of Notes or the proceeds thereof. SECTION 6.05 May Hold Notes. The Indenture Trustee may, subject to restrictions otherwise applicable to the Notes, become the owner or pledgee of Notes and, may otherwise deal with the Issuer or any Affiliate thereof, with the same rights it would have if it were not Indenture Trustee. SECTION 6.06 Money Held in Trust. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed upon with the Issuer and except to the extent of income or other gain on investments which are deposits in or certificates of deposit of the Indenture Trustee in its commercial capacity and income or other gain actually received by the Indenture Trustee on Eligible Investments. The Indenture Trustee shall not be held responsible for nor be required to reimburse any Person for any loss of principal or interest on any amounts invested in Eligible Investments in accordance with the terms hereof. SECTION 6.07 Compensation and Reimbursement. (a) The Issuer shall pay to the Indenture Trustee from time to time compensation for all of its services rendered in accordance with the terms and conditions hereof as has been separately agreed to by the Issuer and the Indenture Trustee. The Indenture Trustee's compensation hereunder shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Indenture Trustee upon request for all reasonable disbursements, expenses and advances incurred or made by it hereunder. Such expenses shall include the compensation, disbursements and expenses of the Indenture Trustee's agents and counsel. (b) When the Indenture Trustee incurs expenses or renders services after an Event of Default occurs, the expenses and the compensation for such services are intended to constitute expenses of administration under any Insolvency Law to the extent permissible thereunder. (c) The Issuer shall indemnify, protect and hold harmless the Indenture Trustee (in its individual capacity and as Indenture Trustee), its directors, officers, employees and agents (collectively, the "Indemnitees") from and against any and all actions, claims, damages, liabilities, judgments, losses, costs, charges and expenses (including, without limitation, legal fees and expenses) relating to or arising out of or in connection with actions or omissions from actions in any capacity hereunder, except actions, claims, damages, liabilities, judgments, losses, costs, charges and expenses caused by the negligence or willful misconduct of the Indenture Trustee, its directors, officers, employees or agents. The Indemnitees shall incur no liability and shall be indemnified and held harmless by the Issuer for (i) any error resulting from use of or reliance on a source or publication required to be used under the terms of the Notes or this Indenture, (ii) any error of judgment made without negligence, bad faith or willful misconduct by a Responsible Officer or officers or employees of the Indenture Trustee, (iii) any loss resulting from an investment of funds made by the Indenture Trustee in Eligible Investments in accordance with this Indenture, including any loss of principal, or (iv) any tax liability in relation to Eligible Investments or any interest thereon or any income on any of the Trust Estate including the costs and expenses of defending itself against any claim of liability in the premises. The Indemnitees shall incur no liability and shall be indemnified, protected and held harmless by the Issuer for, or in respect of, any actions taken, omitted to be taken or suffered to be taken in accordance with this Indenture without negligence, bad faith or willful misconduct by the Indenture Trustee in reliance upon (i) a written Opinion of Counsel, (ii) a written instruction or Officers' Certificate from the Issuer, (iii) written instruction or Controlling Party Order from the Controlling Party, (iv) written instruction of the American Servicer or (v) written instructions of the Noteholders of more than 50% of the Aggregate Outstanding Principal Amount of the Notes. (d) The obligations of the Issuer under this Section 6.07 to compensate the Indenture Trustee and to pay, indemnify or reimburse the Indenture Trustee and any predecessor Indenture Trustee for actions, claims, damages, liabilities, judgments, losses, costs and charges and expenses, shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Indenture Trustee, as provided hereunder but are limited in recourse to the Collateral. Amounts payable and reimbursable to the Indenture Trustee pursuant to this Section 6.07 shall constitute Trustee Fees and shall be paid or reimbursed to the Indenture Trustee solely from the amounts on deposit in the Collection Account in accordance with the Priority of Payments. (e) Compensation payable to a successor Indenture Trustee appointed under Section 6.08 of this Indenture shall be subject to the Priority of Payments to the same extent and with the same priority as the Indenture Trustee Fees. SECTION 6.08 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article Six shall become effective until the acceptance of appointment by the successor Indenture Trustee under Section 6.09 hereof. (b) The Indenture Trustee may resign at any time by (i) giving written notice thereof to the Noteholders, the Issuer and the Insurer in accordance with Section 12.04 hereof and (ii) obtaining the written consent of the Insurer (unless the Insurer is no longer the Controlling Party), which consent shall not be withheld if the Indenture Trustee has identified a successor Indenture Trustee meeting the requirements of this Section 6.08 which is reasonably acceptable to the Insurer and who is willing to accept the appointment described below for a market rate fee. No resignation of the Indenture Trustee shall be effected until a successor is appointed in accordance with this Section 6.08. (c) Upon receiving such notice of resignation, the Issuer shall promptly, with the prior written consent of the Insurer (so long as the Insurer is the Controlling Party and is continuing), appoint a successor Indenture Trustee by written instrument, in duplicate, executed by Authorized Officers of the Issuer on behalf of the Issuer, one original copy of which shall be delivered to the Indenture Trustee so resigning, one original copy to the successor Indenture Trustee and one original copy to the Insurer, together with notice to each Noteholder in accordance with Section 12.04 hereof (at the expense of the Issuer). (d) The Indenture Trustee may be removed at any time upon prior written notice by the Issuer or by Noteholders holding more than 50% of the Aggregate Outstanding Principal Amount of the Notes (in each case, with the Insurer's prior written consent if it is the Controlling Party), delivered to the Indenture Trustee and the Issuer. (e) If at any time: (i) the Indenture Trustee shall fail to resign after written request therefor by the Issuer, the Insurer or by Noteholders holding more than 50% of the Aggregate Outstanding Principal Amount of the Notes (with the Insurer's prior written consent); or (ii) the Indenture Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver or liquidator of the Indenture Trustee or of its property shall be appointed or any public officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, (x) the Issuer, by Issuer Order, (y) the Holders of more than 50% of the Aggregate Outstanding Principal Amount of the Notes may with the consent of the Insurer (so long as it is the Controlling Party) or (z) the Insurer if it is the Controlling Party may, at its sole discretion, remove the Indenture Trustee. In the event that the Issuer shall remove the Indenture Trustee in accordance with this Section 6.08(e), the Issuer shall, promptly, and in any event within three days thereof, notify each Noteholder of such removal in accordance with Section 12.04. (f) If the Indenture Trustee shall be removed or become incapable of acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, the Issuer, upon written direction from the Insurer or the Holders of more than 50% of the Aggregate Outstanding Principal Amount of the Notes (with the Insurer's prior written consent if it is the Controlling Party), shall promptly appoint a successor Indenture Trustee. If no successor Indenture Trustee shall have been appointed pursuant to Section 6.08(c) hereof and shall have accepted appointment in the manner hereinafter provided within 90 days, the Indenture Trustee, the Insurer or any Noteholder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. (g) The Indenture Trustee hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or any state thereof authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $150,000,000 and subject to supervision or examination by federal or state authority and be acceptable to the Insurer (so long as it is the Controlling Party) and have an actual or implied short-term debt of at least "P-1" by Moody's and "A-1" by Standard & Poor's and an actual or implied long-term debt rating of at least "Baa1" by Moody's and "BBB+" by Standard & Poor's. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section 6.08(g), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08(g), the Indenture Trustee shall resign immediately in the manner and with the effect specified in Sections 6.08(b)(i) and 6.08(b)(ii) hereof. (h) The successor Indenture Trustee shall give prompt notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee by notifying the Insurer and the Noteholders in accordance with Section 12.04 hereof. Each notice shall include the name of the successor Indenture Trustee and the address of its Corporate Trust Office. (i) As long as no Insurer Default shall have occurred and be continuing, the Insurer may at any time require the Issuer to remove the Indenture Trustee if, (i) the Insurer determines that reasonable cause exists for such removal or (ii) in the opinion of independent counsel of recognized standing (A) any payment of interest or principal or premium in respect of any of the Collateral would be subject to withholding or deduction for or on account of taxes, (B) the Indenture Trustee would not be entitled to receive a gross-up in respect of such payment, and (C) such withholding or deduction could be avoided by appointing a successor Indenture Trustee; provided that in the case of subsection (ii) the Issuer shall not be required to remove the Indenture Trustee if the Issuer or the Indenture Trustee takes other action to avoid such withholding or deduction which is reasonably satisfactory to the Insurer (including the appointment of a co-Indenture Trustee). The Insurer may exercise its rights hereunder by giving written notice of such exercise to the Indenture Trustee and the Issuer, in which case the Issuer shall promptly remove the Indenture Trustee and appoint a successor thereto with the consent of the Insurer by written instrument, in duplicate, executed upon an Issuer Order, one copy of which instrument shall be delivered to the Indenture Trustee and one copy to the successor Indenture Trustee. SECTION 6.09 Acceptance of Appointment by Successor. (a) Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer, the Insurer and the retiring Indenture Trustee an instrument in form and substance reasonably satisfactory to the Insurer accepting such appointment, and thereupon, upon receipt by such retiring or removed Indenture Trustee, of all sums due under Section 6.07 or 7.02 hereof, as applicable, the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Indenture Trustee; but, on written request of the Issuer, the Insurer or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges then unpaid, execute and deliver an instrument in form and substance reasonably satisfactory to such successor Indenture Trustee and the Insurer transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder. Upon written request of any such successor Indenture Trustee, the Issuer and the Insurer shall execute any and all instruments reasonably necessary to more fully and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts. (b) Upon acceptance of appointment by a successor Indenture Trustee as provided in this Section 6.09, the successor Indenture Trustee shall notify the Noteholders in accordance with Section 12.04 hereof. SECTION 6.10 Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee. Any corporation into which the Indenture Trustee 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 Indenture Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that written notice of such merger, conversion or consolidation shall be provided to the Issuer, the Insurer and the Rating Agencies and provided, further, that the resulting or successor corporation is eligible under Section 6.08(g). In case any Notes subsequent thereto have been authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Indenture Trustee had itself authenticated such Notes. SECTION 6.11 Limitation of Liability.. It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by Wilmington Trust Company, not individually or personally but solely as trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose of binding only the Trust Property (as defined in the Trust Agreement) and (c) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or the other Transaction Documents to which the Issuer is a party. ARTICLE SEVEN [RESERVED] ARTICLE EIGHT SUPPLEMENTAL INDENTURES SECTION 8.01 Supplemental Indentures Without Consent of Noteholders. (a) The Issuer, the Insurer and the Indenture Trustee, without the consent of the Noteholders, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee: (i) to correct or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subject to the Lien of this Indenture (including, without limitation, in order to obtain a security interest thereto in a manner consistent with Section 7.02), or to subject to the Lien of this Indenture additional property; (ii) to evidence the succession of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer contained herein and in the Notes; (iii) to add to the covenants of the Issuer, in each case only to the extent not adverse to the interests of any Noteholder or the Insurer, or to surrender any right or power herein conferred upon the Issuer; (iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee for the benefit of Secured Parties or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of Notes; (v) to evidence and provide for the acceptance of appointment hereunder by a successor Indenture Trustee and to add to or change any of the provisions as shall be necessary to facilitate the administration of the trusts hereunder by more than one Indenture Trustee, pursuant to the requirements of Sections 6.08 and 6.09 hereof; (vi) to take any action necessary or advisable to prevent the Issuer or the Indenture Trustee from becoming subject to any withholding or other taxes, fees or assessments; (vii) to cure any ambiguity or to correct or supplement any provisions herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture; (viii) to facilitate the transfer of Notes in accordance with applicable law (as evidenced by an Opinion of Counsel), which may include providing for the maintenance of a book-entry trading system; (ix) to take any action necessary and appropriate to facilitate the originations of new Franchise Agreements, the servicing of Franchise Assets and the preservation and maintenance of the Arby's IP and the Franchise Assets; and (x) with the prior consent of the Controlling Party, take any action necessary or advisable to effectuate any lockbox arrangements entered into by the Issuer. (b) The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Indenture Trustee shall not be obligated to enter into any such supplemental indenture that materially adversely affects the Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise except to the extent required by law. (c) Copies of any Supplemental Indenture entered into in accordance with this Section 8.01 shall be available upon request by any Noteholder duly given to the Indenture Trustee. SECTION 8.02 Consents to Supplemental Indentures. (a) With the written consent of the Controlling Party, the Issuer and at the written direction of the Issuer, the Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Noteholders under this Indenture; provided, however, that any such supplemental indenture for which approval of Noteholders has not been obtained as provided in this Section 8.02(a) may be entered into only upon satisfaction of the Insurer Condition and written confirmation by each Rating Agency that such action would not have an adverse effect upon the ratings of the Notes; and provided, further, that no supplemental indenture shall be entered into without the written consent of the Insurer and all the Holders of Outstanding Notes affected thereby (in which event such confirmation from the Rating Agencies and satisfaction of the Insurer Condition shall not be required) that would do any of the following: (i) change the Legal Final Payment Date, or the due date of any installment of principal of or interest on, any Note, or reduce the principal amount thereof or the Note Rate thereon, change the provisions of Section 10.03 of this Indenture or change any place where, or the coin or currency in which, any Note or the interest thereon is payable, or the date or manner of payment, or impair the right to institute suit for the enforcement of any such payment on or after the Legal Final Payment Date thereof (or, in the case of the termination of the obligations of the Issuer hereunder, on or after the applicable Trust Termination Date); (ii) reduce the percentage in Aggregate Outstanding Principal Amount of the Notes, the consent of the Noteholders of which is required for the execution of any such supplemental indenture, or the consent of the Noteholders of which is required for any waiver of compliance with any provisions of this Indenture or any Defaults hereunder and their consequences provided for in this Indenture; (iii) impair or adversely affect the Trust Estate except as otherwise permitted herein; (iv) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Trust Estate or terminate the Lien of this Indenture on any property at any time subject hereto or deprive any Noteholder of the security afforded by the Lien of this Indenture except as otherwise permitted herein; (v) reduce the percentage of the Aggregate Outstanding Principal Amount of the Notes, the consent of the Noteholders of which is required to request that the Indenture Trustee preserve the Trust Estate or to rescind the Indenture Trustee's election to preserve the Trust Estate pursuant to Section 5.06 hereof or to sell or liquidate the Trust Estate pursuant to Section 5.06 hereof; (vi) modify any of the provisions of this Section 8.02, except to increase the percentage of the Aggregate Outstanding Principal Amount of the Notes the consent of the Holders of which is required for any supplemental indenture or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Noteholder of each Outstanding Note affected thereby; (vii) modify the definition of the term "Outstanding"; (viii) release the Insurer from all or any part of its obligation to make each and every payment under the Policy; or (ix) modify any of the provisions of this Indenture in such a manner as to affect the calculation of the amount of any payment of Interest Distribution or Principal Distribution on any Payment Date (including the calculation of any of the individual components of such calculation) or to reduce the amount payable upon the redemption of such Notes or change the time at which any Note may be redeemed. (b) With respect to any supplemental indenture entered into in accordance with this Section 8.02, it shall not be necessary for Noteholders to approve the particular form of any proposed supplemental indenture, only the substance thereof. SECTION 8.03 Execution of Supplemental Indentures. In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article Eight or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and (subject to Sections 6.01 and 6.03 hereof) shall be fully protected in relying conclusively upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that such supplemental indenture is the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms (subject to customary exceptions). The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that materially adversely affects the Indenture Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 8.04 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article Eight, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Outstanding Note theretofore and thereafter authenticated and delivered hereunder shall be bound thereby. SECTION 8.05 Reference in Notes to Supplemental Indenture. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article Eight may, and if required by the Indenture Trustee shall, bear a notation in form satisfactory to the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes, so modified as to conform in the opinion of the Indenture Trustee and the Issuer to any such supplemental indenture, may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. ARTICLE NINE REDEMPTION OF NOTES SECTION 9.01 Optional Redemption, Election to Redeem. (a) Optional Redemption by Issuer. The Notes shall be subject to redemption, in whole or in part, at the option of the Issuer on any Payment Date at the Optional Redemption Price. (b) Installments of interest and principal due on or prior to an Optional Redemption Date shall continue to be payable to the Holders of such Notes according to their terms. The election of the Issuer to redeem any Notes pursuant to this Section 9.01 shall be evidenced by an Issuer Order from the American Servicer directing the Indenture Trustee to make payment of the Optional Redemption Price of the Aggregate Outstanding Principal Amount of the Notes to be redeemed from funds in the Collection Account as described below. The Notes shall be redeemed on a pro rata basis, based on the Aggregate Outstanding Principal Amount of the Notes held by each Noteholder. The Issuer shall deposit, or cause to be deposited, the funds required for an optional redemption in whole or in part, as applicable, in the Collection Account on or before the Business Day prior to the Optional Redemption Date. The Issuer shall set the Optional Redemption Date and give notice thereof to the Indenture Trustee, and the Insurer pursuant to Section 9.02 hereof. SECTION 9.02 Notice to Indenture Trustee, and Insurer of Optional Redemption. In the event of any optional redemption pursuant to Section 9.01, the Issuer shall, at least 30 days prior to the proposed Optional Redemption Date but no more than 60 days prior to such date (unless the Indenture Trustee shall agree to a shorter notice period), notify the Indenture Trustee, the Insurer and the Servicers in writing of such Optional Redemption Date, the Aggregate Outstanding Principal Amount to be redeemed on such Optional Redemption Date and the Optional Redemption Price of such Aggregate Outstanding Principal Amount and as further specified in Section 9.03 hereof and in accordance with Section 12.03 hereof. SECTION 9.03 Notice of Optional Redemption or Maturity by the Issuer. (a) Upon receipt of notice pursuant to Section 9.02, notice of such redemption of the Notes shall be given by the Indenture Trustee to the Rating Agencies and the Noteholders not less than 20 days prior to the scheduled Optional Redemption Date. (b) All notices of optional redemption shall state: (1) the CUSIP number, Common Code or ISIN, as applicable, of the Notes to be redeemed and that the Notes shall be redeemed on a pro rata basis, based on the Aggregate Outstanding Principal Amount; (2) the Optional Redemption Date; (3) the Optional Redemption Price; (4) in the case of an optional redemption in whole, that all the Notes are being paid in full and that interest on such Notes shall cease to accrue on the date specified in the notice, or, in the case of a redemption in part, the amount of principal of each Note that will be repaid and that interest on such amount of principal shall cease to accrue on the date specified in the notice; (5) in the case of an optional redemption in whole, the place or places where such Notes to be redeemed in whole are to be surrendered for payment of the Optional Redemption Price which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02; and (6) that the redemption is subject to the satisfaction of certain conditions set forth in this Indenture. (c) The Issuer shall have the option to withdraw the notice of optional redemption up to the fifth Business Day prior to the scheduled Optional Redemption Date by written notice to the Indenture Trustee, , the Insurer and the Servicers. (d) [Reserved.] (e) Notice of redemption shall be given by the Issuer or, at the Issuer's request, by the Indenture Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Notes. SECTION 9.04 Notes Payable on Optional Redemption Date. (a) Notice of redemption having been given as aforesaid, the Notes to be redeemed pursuant to an optional redemption shall, on the Optional Redemption Date, become due and payable at the Optional Redemption Price therein specified, and from and after the Optional Redemption Date (unless the Issuer shall Default in the payment of the Optional Redemption Price and accrued interest) such Notes shall cease to bear interest. Upon final payment on a Note to be redeemed in full, the Holder shall present and surrender such Note at the place specified in the notice of redemption on or prior to such Optional Redemption Date; provided, however, that if there is delivered to the Issuer, the Insurer, and the Indenture Trustee such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such Note, then, in the absence of notice to the Issuer, the Insurer or the Indenture Trustee that the applicable Note has been acquired by a bona fide purchaser, such final payment shall be made without presentation or surrender. Payments of interest on Notes so to be redeemed shall be payable to the Holders of such Notes, or one or more predecessor Notes, according to the terms and provisions of Section 2.07 hereof. (b) If any Note called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Optional Redemption Date at the Note Rate for each successive Accrual Period the Note remains Outstanding. (c) Upon the partial redemption of any Notes and the surrender thereof, the Issuer shall to the extent necessary issue, and the Authenticating Agent shall authenticate, new Notes equal to the Aggregate Outstanding Principal Amount of the Notes not so redeemed. SECTION 9.05 Mandatory Redemption. (a) The Notes are subject to mandatory redemption, in whole or in part, at the Mandatory Redemption Price upon the occurrence of any of the following events in the manner set forth below: (i) If the Debt Service Coverage Ratio, on any Accounting Date is less than or equal to 1.20 but greater than 1.10, then, on each Payment Date following such Accounting Date, all funds remaining after the application of Available Funds in accordance with Section 10.03(i) through Section 10.03(vi) hereof, shall be applied to redeem Notes on a pro rata basis, based on the Aggregate Outstanding Principal Amount of the Notes held by each Noteholder. Such redemption of Notes on each such Payment Date shall continue until the Debt Service Coverage Ratio exceeds 1.20 and remains greater than 1.20 for six consecutive Collection Periods. (ii) If the Debt Service Coverage Ratio, on any Accounting Date, is less than or equal to 1.10, then on each Payment Date following such Accounting Date, (i) the sum of (A) all funds available after the application of Available Funds in accordance with Section 10.03(i) through Section 10.03(v) hereof, (B) all funds in the Debt Service Reserve Account, and (C) all funds in the Seasonality Coverage Account, shall be applied to redeem Notes on a pro rata basis, based on the Aggregate Outstanding Principal Amount of the Notes held by each Noteholder, until the Legal Final Payment Date of the Notes and (ii) such occurrence shall constitute a Servicer Termination Event. (iii) If an Indemnification Mandatory Redemption Event occurs, on the related Payment Date, all Indemnification Amounts on deposit in the Indemnification Account shall be released as Available Funds and shall be applied to redeem Notes on a pro rata basis, based on the Aggregate Outstanding Principal Amount of the Notes held by each Noteholder. The Indenture Trustee shall give notice to the Noteholders of the occurrence of any of the foregoing events as indicated in a monthly report delivered to the Indenture Trustee by the Issuer. (b) Upon the occurrence of an event leading to a mandatory redemption as described in Sections 9.05(a)(i), 9.05(a)(ii) and 9.05(a)(iii) above, the Aggregate Outstanding Principal Amount to be redeemed shall, on the Mandatory Redemption Date, become due and payable at the Mandatory Redemption Price and from and after such Mandatory Redemption Date (unless the Issuer shall Default in the payment of the Mandatory Redemption Price and accrued interest) such Notes shall cease to bear interest. Upon final payment on a Note to be redeemed in full, the Holder shall present and surrender such Note at the office or agency of the Issuer to be maintained as provided in Section 3.02 hereof on or promptly following such Mandatory Redemption Date; provided, however, that if there is delivered to the Issuer, the Insurer, and the Indenture Trustee such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such Note, then, in the absence of notice to the Issuer, the Insurer or the Indenture Trustee that the applicable Note has been acquired by a bona fide purchaser, such final payment shall be made without presentation or surrender. Payments of interest on Notes so to be redeemed shall be payable to the Holders of such Notes, or one or more predecessor Notes, according to the terms and provisions of Section 2.07 hereof. If any Note called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Mandatory Redemption Date at the Note Rate for each successive Accrual Period the Note remains Outstanding. Upon the partial redemption of any Notes and the surrender thereof, the Issuer shall to the extent necessary issue, and the Authenticating Agent shall authenticate, new Notes equal to the Aggregate Outstanding Principal Amount of the Notes not so redeemed. ARTICLE TEN COLLECTION OF FUNDS AND MAINTENANCE OF ACCOUNTS SECTION 10.01 Segregation of Money. The Indenture Trustee shall segregate and hold all money and property received by it in trust for the Noteholders and shall apply it as provided in this Indenture. SECTION 10.02 Collection Account; Canadian Sub-Account. (a) The Indenture Trustee shall, prior to the Closing Date, establish a segregated trust account at the corporate trust department of The Bank of New York in New York which shall be held in trust in the name of the Indenture Trustee for the benefit of the Secured Parties and designated as the Collection Account. (i) Funds shall be deposited into the Collection Account immediately upon the receipt thereof. (ii) All monies deposited from time to time in the Collection Account pursuant to this Indenture shall be held by the Indenture Trustee as part of the Trust Estate and shall be applied for the purposes herein provided. The Issuer shall, prior to the Closing Date, establish a sub-account of the Collection Account which shall be held in trust in the name of the Indenture Trustee for the benefit of the Secured Parties at the corporate trust department of the Royal Bank of Canada. The Canadian Servicer shall deposit any Franchisee Payments (denominated in Canadian dollars) it receives pursuant to any Canadian Franchise Agreements into such sub-account. On each Payment Date, in accordance with the monthly report delivered to the Indenture Trustee by the Issuer on the related Accounting Date, the Indenture Trustee shall transfer to the Collection Account all funds then in such sub-account net of the sum of (i) the Servicing Fee payable to the Canadian Servicer, (ii) amounts constituting Excluded Fees and (iii) fees payable in connection with the conversion of funds denominated in Canadian dollars to funds denominated in U.S. dollars. (b) All payments to be made from time to time by the Indenture Trustee to the Holders of Notes out of funds in the Collection Account pursuant to this Indenture shall be made by the Indenture Trustee according to the written direction of the American Servicer. Upon the request of the American Servicer in accordance with Section 2.2(b) of the American Servicing Agreement, the Indenture Trustee shall be authorized to promptly withdraw on a weekly basis any amounts necessary to pay any Advertising Fees or Canadian Advertising Fees. In addition, the Indenture Trustee, shall, at the written direction of the American Servicer in accordance with Section 2.2(b) of the American Servicing Agreement, withdraw any amounts in the Collection Account which have been mistakenly deposited in the Collection Account, which amounts are not part of the Trust Estate (such amounts, "Misdirected Payments"). (c) Upon delivery of a Servicer Order, monies in the Collection Account shall be invested and reinvested by the Indenture Trustee as directed in a Servicer Order in one or more Eligible Investments. If the Indenture Trustee does not receive such investment instructions for three consecutive Business Days, then upon the next following Business Day, the Indenture Trustee shall invest and reinvest such monies in Government Obligations. All income or other gain from such investments shall be credited to such Collection Account and any loss resulting from such investments shall be charged to such Collection Account. The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in the Collection Account resulting from any loss on any Eligible Investment. If such Servicer Order is received after 1:00 p.m. (New York time) on any Business Day, the Indenture Trustee will have no obligation to make such investment on such day but shall use its best efforts to make such investment on such day, and in any event shall make such investment by the next Business Day. SECTION 10.03 Disbursement of Monies from Collection Account. Distribution of Available Funds. (a) On each Payment Date, Available Funds received with respect to the related Collection Period to the extent available will be distributed in the following order of priority: (i) to the payment to the Industry Consultant, Independent Accountant, the Insurer, the Principal Reinsurer, the SPE Administrator, Issuer Trustee, the trustee of the IP Holder, the Issuer and the Indenture Trustee, as applicable, of the SPV Operating Expenses (solely, with respect to indemnities, on a pro rata basis in proportion to the total indemnity amounts then payable to indemnitees, respectively) (including any accrued and unpaid SPV Operating Expenses) as of such Payment Date; (ii) to the Servicers, an amount equal to the Servicing Fees due on such Payment Date, including any accrued and unpaid Servicing Fees as of such Payment Date; (iii) to the Insurer, an amount equal to the sum of (A) the Premium due under the Insurance Agreement due on such Payment Date (including any accrued and unpaid Premium) and (B) any Reimbursements owed to the Insurer (including any accrued and unpaid Reimbursements); (iv) to the Noteholders, an amount equal to the Interest Distribution (including any Additional Interest, if any); (v) to the Noteholders, an amount equal to the Principal Distribution; (vi) if the Notes are not subject to a mandatory redemption pursuant to Section 9.05(a)(ii) hereof, to the Debt Service Reserve Account, the Cash Trap Reserve Amount; (vii) to the Noteholders, in the event of a mandatory redemption, in whole or in part, in accordance with Section 9.05 hereof, an amount necessary to fund such mandatory redemption; (viii) to the Noteholders, in the event of an optional redemption, in whole or in part, in accordance with Section 9.01 hereof, an amount necessary to fund such optional redemption; (ix) to the Seasonality Coverage Account, the amount equal to the Seasonality Deposit Amount; (x) to each of the Industry Consultant, Independent Accountant, the Issuer Trustee, the Issuer, the trustee of the IP Holder, the Insurer, the Principal Reinsurer, the SPE Administrator and the Indenture Trustee, as applicable and on a pro rata basis in proportion to the indemnity amounts payable to them, respectively, the payment of the (A) indemnities in excess of the prevailing cap on such indemnities and not paid under clause (i) above, and (B) any indemnities accrued and unpaid as of such Payment Date; and (xi) to the Certificateholder, any remaining Available Funds. (b) To the extent funds on deposit in the Collection Account are insufficient to pay the Expected Priority Payments on any Payment Date, the Trustee shall transfer to the Collection Account funds from the Seasonality Coverage Account, in an amount sufficient to make the payment of the Expected Priority Payments on such Payment Date, and to the extent necessary, after application of such funds from the Seasonality Coverage Account, the Indenture Trustee shall transfer funds from the Debt Service Reserve Account. SECTION 10.04 Reports. Subject to the limitations set forth in this paragraph, the Indenture Trustee shall supply in a timely fashion to the Issuer, the Servicers, the Insurer, the Rating Agencies and the Noteholders any information in the possession of the Indenture Trustee that the Issuer, the Servicers, the Insurer, the Rating Agencies or any Noteholder may from time to time request in writing with respect to the Franchise Assets and the Collection Account (which shall include all officer's certificates) and accountants' reports delivered or caused to be delivered by the Servicers to the Indenture Trustee as provided in the Servicing Agreements). Such information shall be furnished by the office of the Indenture Trustee so long as the Indenture Trustee is authorized to release such information by the Issuer, provided that the Indenture Trustee is hereby irrevocably authorized to release such information at all times to the Insurer. The Indenture Trustee agrees to maintain all information received from the Issuer or its Affiliates in a confidential manner and shall not disclose such information except as specifically authorized by the Issuer in writing or as set forth in the second following sentence. The Indenture Trustee acknowledges that the information it may receive in the course of its duties hereunder may be non-public in nature and should be safe-guarded with these concerns in mind. In addition, the Indenture Trustee shall supply to the Rating Agencies and the Noteholders to the extent available (a) a monthly report no later than the Payment Date and (b) a quarterly report no later than 10 days after the receipt thereof by the Indenture Trustee (such quarterly report together with the monthly report referred to in clause (a), the "Reports"), in each case, substantially in the forms attached hereto as Exhibit M. Nothing herein shall obligate the Indenture Trustee, the Issuer or the American Servicer to disclose any information regarding its operations or business which is of a proprietary or confidential nature. The Servicers shall supply to the Indenture Trustee and the Insurer in a timely fashion any information in their possession regarding the Franchise Assets; necessary to permit the Indenture Trustee to prepare the Reports or to perform its other duties hereunder. Notwithstanding anything to the contrary herein, the Indenture Trustee shall not be obligated to prepare a Report in the event that the Servicers have not provided to the Indenture Trustee information necessary to prepare such reports. SECTION 10.05 [Reserved] SECTION 10.06 Notices to the Insurer and the Rating Agencies. The Indenture Trustee shall, promptly after receipt, deliver copies of the following documents to the Insurer and the Rating Agencies or, as the case may be, give prior notice to (and, if unable to give prior notice, to the extent the Indenture Trustee has actual knowledge thereof, to notify promptly, and in any event within 10 Business Days after the occurrence thereof) the Insurer and the Rating Agencies of the following events: (a) any proposed amendment or supplement to this Indenture; (b) the occurrence of an Event of Default under this Indenture; (c) any resignation or removal of the Indenture Trustee or appointment of a successor Indenture Trustee; (d) any change in the Servicers; (e) effectiveness of any supplemental indenture pursuant to Section 8.01 or 8.02; (f) the Trust Termination Date; (g) a copy of the annual financial statements of the Issuer; (h) any redemption of Notes; and (i) a substitution of debtor pursuant to Article Eleven. SECTION 10.07 Debt Service Reserve Account. The Indenture Trustee shall, prior to the Closing Date, establish a segregated account at the corporate trust department of The Bank of New York in New York, which shall be held in trust in the name of the Indenture Trustee for the benefit of the Secured Parties and designated as the Debt Service Reserve Account. Any payments under Section 10.03(vi) of this Indenture on any Payment Date shall be deposited in the Debt Service Reserve Account and invested in Eligible Investments as directed in writing by the American Servicer pursuant to a Servicer Order. If the Indenture Trustee does not receive investment instructions for three consecutive Business Days after receipt of such deposit, the Indenture Trustee shall invest and reinvest such monies in Government Obligations. SECTION 10.08 Seasonality Coverage Account. The Indenture Trustee shall, prior to the Closing Date, establish a segregated account at the corporate trust department of The Bank of New York in New York, which shall be held in trust in the name of the Indenture Trustee for the benefit of the Secured Parties and designated as the Seasonality Coverage Account. Any payments under Section 10.03(ix) of this Indenture on any Payment Date shall be deposited in the Seasonality Coverage Account and invested in Eligible Investments as directed in writing by the American Servicer pursuant to a Servicer Order. If the Indenture Trustee does not receive investment instructions for three consecutive Business Days after receipt of such deposit, the Indenture Trustee shall invest and reinvest such monies in Government Obligations. SECTION 10.09 Indemnification Account. The Indenture Trustee shall, prior to the Closing Date, establish a segregated account at the corporate trust department of The Bank of New York in New York, which shall be held in trust in the name of the Indenture Trustee for the benefit of the Secured Parties and designated as the Indemnification Account. All Indemnification Amounts paid by FinCo or deducted on a current basis (at the option of the Issuer) from amounts owed on a current basis to FinCo, in its capacity as Certificateholder pursuant to Section 10.03(x) hereof, shall be deposited in the Indemnification Account and invested in Eligible Investments as directed in writing by the American Servicer pursuant to a Servicer Order. If the Indenture Trustee does not receive investment instructions for three consecutive Business Days after receipt of such deposit, the Indenture Trustee shall invest and reinvest such monies in Government Obligations. ARTICLE ELEVEN SUBSTITUTION OF DEBTOR SECTION 11.01 Conditions to Substitution. The Indenture Trustee shall, without the consent of the Noteholders, agree with the Issuer and the Insurer (if it is the Controlling Party) to the substitution in place of the Issuer (or of any previously substituted Person under this Section), as the debtor in respect of this Indenture, the Insurance Agreement and the Notes, of any other Person (the "Substituted Person") in accordance with the provisions of this Article Eleven. The Indenture Trustee shall agree with the Issuer and the Insurer (if it is the Controlling Party) as to such substitution, and such substitution shall be effected if the Insurer so directs in a Controlling Party Order (so long as it is the Controlling Party), in the event that the Insurer reasonably believes that such substitution would have the result of avoiding the imposition of, or the lessening of, any present or future tax (including but not limited to any withholding tax), assessment or other governmental charge on the Issuer, the Collateral or the Notes; provided, however, that any such substitution shall be effected only upon confirmation by each Rating Agency that such action would not have an adverse effect upon the ratings of the Notes and upon satisfaction of the Insurer Condition. The Indenture Trustee may also receive an Opinion of Counsel, if requested by the Indenture Trustee, to such effect. Any substitution pursuant to this Section 11.01 shall be subject to the preconditions that: (a) an indenture is executed or some other form of undertaking is given by the Substituted Person to the Indenture Trustee, the Issuer and the Insurer in a form satisfactory to the Indenture Trustee, the Issuer and the Insurer to be bound by the terms hereof and by the provisions of the Notes and the other Transaction Documents to which the Issuer is a party (with any consequential amendments which may be appropriate) as fully as if the Substituted Person had been a party to this Indenture and the other Transaction Documents to which the Issuer is a party and named herein and in the Notes as the debtor in respect of the Notes in place of the Issuer (or such previously Substituted Person as aforesaid); (b) the Substituted Person acquires the Issuer's rights to the Collateral, acknowledges the security interest created in respect thereof pursuant to this Indenture and takes all such action as the Indenture Trustee or the Insurer may require so that the Collateral is subject to a security interest in all respects corresponding to the security interest created by the Issuer hereunder; (c) (without prejudice to the generality of the foregoing provisions of this Section) if the Substituted Person is incorporated, domiciled or resident in a jurisdiction or jurisdictions other than Delaware, an undertaking or covenant shall be given in terms corresponding to the provisions of Section 2.11 hereof; (d) the purposes and powers of the Substituted Person will be comparably limited to those of the Issuer; (e) the Indenture Trustee and the Insurer shall be satisfied that (A) all governmental and regulatory approvals and consents necessary for or in connection with the assumption by the Substituted Person of the obligations hereunder and under the Notes and the other Transaction Documents to which the Issuer is a party in place of the Issuer (or such previously Substituted Person as aforesaid) and for the Policy to continue to be in all respects in full force and effect have been obtained and (B) such approvals and consents are at the time of substitution in full force and effect; and (f) the Issuer (or any previously Substituted Person under this Section) and/or the Controlling Party and the Substituted Person shall (A) execute such other deeds, documents and instruments (if any) as the Indenture Trustee or the Insurer may reasonably require in order that such substitution be fully effective and that the Policy remain in full force and effect following such substitution, and (B) comply with such other requirements in the interests of the Noteholders and the Insurer as the Indenture Trustee or the Insurer may reasonably direct. SECTION 11.02 No Regard to Consequences for Individual Holders. In the case of any substitution in accordance with Section 11.01, the Indenture Trustee may in its absolute discretion agree with the Issuer and the Insurer, without the consent of the Noteholders, as to a change in the law expressed to govern this Indenture and the Notes; provided that such change would not in the opinion of the Indenture Trustee be materially prejudicial to the interests of the Noteholders, including the maintenance of the then applicable ratings on the Notes or to the interests of the Indenture Trustee (based upon, if requested by the Indenture Trustee, an Officer's Certificate and an Opinion of Counsel satisfactory to the Indenture Trustee). In connection with any proposed substitution as aforesaid, the Indenture Trustee shall not have regard to the consequences of such substitution for individual Noteholders resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular state, country or territory. No Noteholder shall, in connection with any such substitution, be entitled to claim from the Issuer, the Indenture Trustee, or the Insurer any indemnification or payment in respect of any tax consequences of any such substitution upon individual Noteholders, except to the extent provided for in subsection (c) of Section 11.01. SECTION 11.03 Effect of Substitution. Upon the execution of the documents and compliance with the requirements set forth in Sections 11.01 and 11.02, the Substituted Person shall be deemed to be named in this Indenture, in the Notes and in the other Transaction Documents to which the Issuer is a party as the debtor in place of the Issuer (or any previously Substituted Person under this Article), and this Indenture and the Notes shall thereupon be deemed to be amended in such manner as shall be necessary to give effect to such substitution. Compliance with the requirements of Sections 11.01 and 11.02 shall operate to release the Issuer (or such previously Substituted Person as aforesaid) from all of its obligations as debtor in respect of the Notes hereunder but without prejudice to the obligations of the Insurer under the Policy. Not later than 10 days after the execution of any such undertaking and such other documents and instruments as aforesaid and compliance with the said requirements of the Indenture Trustee, the Issuer shall, unless the Indenture Trustee agrees otherwise, give notice thereof to the Noteholders in accordance with Section 12.04. ARTICLE TWELVE MISCELLANEOUS SECTION 12.01 Form of Documents Delivered to Indenture Trustee. (a) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. (b) Any Officer's Certificate may be based, insofar as it relates to legal matters, upon an Opinion of Counsel or a certificate of or representations by such legal counsel, unless such Authorized Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer of the Issuer or Opinion of Counsel or certificate of or representations by such legal counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, the Issuer or any other Person, stating that the information with respect to such factual matters is in the possession of the Issuer or such other Person, unless such Authorized Officer of the Issuer or counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may also be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Authorized Officer of the Issuer, stating that the information with respect to such matters is in the possession of the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. (c) Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 12.02 Governing Law. This Indenture and each Note shall be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflict of laws. SECTION 12.03 Notices, Etc. to Indenture Trustee, Issuer, Insurer, the Ratings Agencies and the Servicers. Unless otherwise expressly provided for herein, any request, demand, authorization, direction, notice, consent or waiver of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (a) the Indenture Trustee by the Insurer or any Noteholder, or by the Issuer shall be sufficient for every purpose hereunder if in writing and if made, given, or sent by courier of international reputation to the Indenture Trustee addressed to it at its Corporate Trust Office, or at any other address furnished in writing to the Issuer, the Insurer or Noteholder by the Indenture Trustee, or, as among the Issuer, the Insurer and the Indenture Trustee, if sent via telecopier and confirmed via overnight courier; (b) the Issuer by the Indenture Trustee, the Insurer or by any Noteholder shall be sufficient for every purpose hereunder if in writing and sent by courier of international reputation to the Issuer, 1000 Corporate Drive, Fort Lauderdale, Florida 33334-3651, Attention: General Counsel, Telecopy No.: (954) 351-5619, with a copy to Triarc Companies, Inc., 280 Park Avenue, New York, New York 10017, Attention: General Counsel, Telecopy No.: (212) 451-3216, or at any other address previously furnished in writing to the Indenture Trustee and the Insurer, or, as among the Issuer, the Insurer and the Indenture Trustee, if sent via telecopier and confirmed via overnight courier; (c) the Insurer by the Indenture Trustee, the Issuer or by any Noteholder shall be sufficient for every purpose hereunder if in writing and sent by courier of international reputation to the Insurer at One State Street Plaza, New York, New York 10004, Attention: Risk Management Structured Finance and Credit Derivatives, Arby's Franchise Trust 7.44% Fixed Rate Insured Notes due December 20, 2020, Telecopy No.: (212) 797-5725, provided that, in each case in which notice or other communication to the Insurer refers to an Event of Default, a claim on the Policy or with respect to which failure on the part of the Insurer to respond shall be deemed to constitute consent or acceptance, then a copy of such notice or other communication should also be sent to the same address listed above but to the attention of the General Counsel, or at any other address previously furnished in writing to the Indenture Trustee and the Issuer, or as among the Insurer, the Issuer and the Indenture Trustee, if sent via telecopier and confirmed via overnight courier; (d) the Rating Agencies by the Indenture Trustee if in writing and mailed first-class postage prepaid to Moody's Investors Service, Attention: Structured Finance Group, 99 Church Street, New York, New York 10007, and Standard & Poor's Rating Services, Attention: Structured Finance Ratings, 55 Water Street, New York, New York 10041-0003; (e) the American Servicer by the Issuer, the Insurer or the Indenture Trustee shall be sufficient for every purpose hereunder if sent via telecopier and confirmed via overnight courier to 1000 Corporate Drive, Fort Lauderdale, Florida 33334-3651, Attention: General Counsel, Telecopy No.: (954) 351-5619, with a copy to Triarc Companies, Inc. 280 Park Avenue, New York, New York 10017, Attention: General Counsel, Telecopy No.: (212) 451-3216; and (f) the Canadian Servicer by the Issuer, the Insurer or the Indenture Trustee shall be sufficient for every purpose hereunder if sent via telecopier and confirmed via overnight courier to 1000 Corporate Drive, Fort Lauderdale, Florida 33334-3651, Attention: General Counsel, Telecopy No.: (954) 351-5619, with a copy to Triarc Companies, Inc., 280 Park Avenue, New York, New York 10017, Attention: General Counsel, Telecopy No.: (212) 451-3216. SECTION 12.04 Notices and Reports to Noteholders; Waiver of Notice. (a) Notices Regarding the Global Notes. So long as Notes are represented by a Global Note and such Global Note is held on behalf of a Clearance System, notices to Noteholders may be given by delivery of the relevant notice to that Clearance System for communication by it to entitled accountholders in substitution for publication. (b) Notices Regarding the Registered Notes. Notices to the holders of the Registered Notes shall be given by first class mail, postage prepaid, to the registered Holders of such Registered Notes at their address appearing in the Note Register. SECTION 12.05 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the interpretation or construction of any provision hereof. SECTION 12.06 Successors and Assigns. All covenants and agreements in this Indenture by the Issuer shall bind its respective successors and assigns, whether so expressed or not. SECTION 12.07 Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 12.08 Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, the Servicers or the Secured Parties (if not a party hereto) and their successors hereunder and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 12.09 Counterparts. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 12.10 Submission to Jurisdiction. The Issuer hereby irrevocably submits to the nonexclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan in The City of New York in any action or Proceeding arising out of or relating to the Notes or this Indenture, and the Issuer hereby irrevocably agrees that all claims in respect of such action or Proceeding may be heard and determined in such New York State or federal court. The Issuer hereby irrevocably waives, to the fullest extent it may legally do so, the defense of an inconvenient forum to the maintenance of such action or Proceeding and the right to trial by jury. The Issuer agrees that a final judgment in any such action or Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Issuer hereby irrevocably designates and appoints Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019, as the agent of the Issuer to receive on its behalf service of all process brought against it with respect to any such Proceeding in any such court in the State of New York, such service being hereby acknowledged by the Issuer to be effective and binding on it in every respect. If for any reason such agent shall cease to be available to act as such, then the Issuer shall promptly designate a new agent in the City of New York. SECTION 12.11 Resignation or Removal of a Servicer. Upon any resignation or removal of the Servicer pursuant to the terms of each Servicing Agreement, the Issuer shall appoint an institution which (i) has demonstrated an ability to professionally and completely perform duties similar to those imposed upon such Servicer, (ii) is legally qualified and has the capacity to act as a Servicer and (iii) is approved by the Controlling Party. SECTION 12.12 Calculations. Any calculations performed in connection with the financial covenants set forth in Section 3.16 hereof, shall be made, to the fifth decimal point, without giving effect to any rounding. SECTION 12.13 Prescription. Claims for payment of principal and interest in respect of any Note will not be enforceable unless such Note is presented for payment within a period of ten years from the payment dates relating thereto. SECTION 12.14 No Petition. By virtue of their acceptance of their rights hereunder, none of the Secured Parties may petition or cause the Issuer to petition for bankruptcy or winding up. IN WITNESS WHEREOF, each of the undersigned has caused this Indenture to be executed as a deed (in the case of the Issuer) by it or on its behalf as of the year and date first above written. Executed as a deed by: ARBY'S FRANCHISE TRUST, as Issuer By: Wilmington Trust Company, not in its individual capacity but solely as Issuer Trustee By: W. CHRIS SPONENBERG ------------------------------------ Name: W. Chris Sponenberg Title: Assistant Vice President Witness: AS AMBAC ASSURANCE CORPORATION, as Insurer By: JENNIFER F. WILLIAMS ----------------------------------- Name: Jennifer F. Williams Title: Vice President Witness: AR BNY MIDWEST TRUST COMPANY, A BANK OF NEW YORK COMPANY, not in its individual capacity but solely as Indenture Trustee By: MEGAN CARMODY ----------------------------------- Name: Megan Carmody Title: Assistant Vice President Witness: AS EX-10.1 5 defplan.txt DEFERRAL PLAN Exhibit 10.1 Deferral Plan for Senior Executive Officers of Triarc Companies, Inc. Effective December 14, 2000 TABLE OF CONTENTS Page ARTICLE I Definitions.............................................. ARTICLE II Deferred Bonus Accounts.................................. ARTICLE III Payment of Deferred Bonus Accounts....................... ARTICLE IV Vesting.................................................. ARTICLE V Funding; ERISA Status.................................... ARTICLE VI Administration........................................... ARTICLE VII Amendment; Termination; Mandatory Distribution........... ARTICLE VIII General Provisions....................................... ARTICLE I Definitions 1.1. As used in the Plan, the following terms shall have the meanings hereinafter set forth: "Approved Investment" means any financial instrument which (i) is susceptible to reasonably ascertainable periodic valuations without the necessity of the Company hiring a valuation expert for such purpose, (ii) is available for purchase by the Trust contemporaneously with the decision by a Participant or an investment manager to deem a Deferred Bonus Account to be invested in such financial instrument pursuant to Section 2.2, and (iii) may be liquidated by the Trust for an amount approximating its current stated valuation in a reasonable time or title of which is assignable no less often than once per month at the option of the Committee to an applicable Participant; provided, however, that clauses (ii) and (iii) shall not apply in the case of any Deferred Bonus Account which is not intended by the Company to be replicated in the Trust. The Committee shall have the authority to deny Approved Investment status to any particular financial instrument, at its sole discretion. "Beneficiary" means any person(s) or legal entity(ies) designated by a Participant, or otherwise determined to be a Participant's Beneficiary, in accordance with Section 8.6. "Bonus" means the Initial Bonuses, and any other bonus awarded to a Participant and designated by the Committee to be a Bonus for purposes of the Plan. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Committee" means the Compensation Committee of the Board of Directors of the Company. "Company" means Triarc Companies, Inc., and its successors and assigns. "Deferred Bonus Account" means one or more bookkeeping accounts established and maintained by the Company to reflect Bonuses deferred under the Plan, as adjusted from time to time for earnings and investment gains and losses. A separate Deferred Bonus Account shall be maintained for each Bonus deferred hereunder. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Financial Hardship" means severe financial hardship to a Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute a Financial Hardship will depend upon the facts of each case and will be determined by the Committee in its sole discretion. "Initial May Bonus" means the deferred bonus awarded to Participant Peter May on December 14, 2000 by action of the Committee. "Initial Peltz Bonus" means the deferred bonus awarded to Participant Nelson Peltz on December 14, 2000 by action of the Committee. "Participant" means Nelson Peltz, Peter May and any other senior executive officer of the Company designated by the Committee as a Participant in the Plan. A person shall cease to be a Participant when all the benefits to which he is due have been paid in accordance with the terms of the Plan. "Plan" means this Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., as embodied herein and as amended from time to time. "Separation from Service" means a determination by the Committee that a Participant's employment with the Company and all members of its consolidated Federal income tax filing group has terminated for any reason. "Trust" means any so-called "rabbi trust" established by the Company with the intention of satisfying the Company's obligations in respect of one or more Deferred Bonus Accounts. Wherever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form, they shall be construed as though they were also used in the plural form in all cases where they would so apply. ARTICLE II Deferred Bonus Accounts 2.1. The Committee shall establish and maintain a Deferred Bonus Account for each Bonus deferred under the Plan. 2.2. The Deferred Bonus Account of each Participant shall be deemed invested in any combination of (i) to the extent a Participant requests, Approved Investments selected by an investment manager chosen by the Company and reasonably acceptable to the Participant, and (ii) to the extent a Participant does not request the appointment of an investment manager, Approved Investments selected by the Participant. The Participant or the investment manager, as the case may be, may elect to change his or its investment election as to the relevant portion of a particular Deferred Bonus Account at any time and from time to time without limitation. In the case of any Deferred Bonus Account intended by the Company to be replicated in a Trust, any change in deemed investments shall not be effective until such Trust has replicated such change through the actual purchase and sale of Approved Investments. The value of a Deferred Bonus Account shall be adjusted from time to time to reflect the investment earnings, gains, losses and any applicable costs and expenses of the applicable Approved Investments, as if the Deferred Bonus Account were actually invested therein. In the case of any Deferred Bonus Account intended to be replicated in a Trust, it is the intention of the Company that the value of such Deferred Bonus Account on the books of the Company be equal to the value of the actual Approved Investments related thereto in such Trust. Notwithstanding the above, each of the Initial May Bonus and the Initial Peltz Bonus shall be deemed uninvested (with no investment earnings, gains, losses, costs or expenses) from December 14, 2000 through January 22, 2001. ARTICLE III Payment of Deferred Bonus Accounts 3.1 (a) Subject to Section 3.1(b), each Participant shall receive a payment in cash or Approved Investments, or any combination thereof, from the Company equal to the value of each of his Deferred Bonus Accounts upon the earliest of (i) as to any particular Deferred Bonus Account, the first business day in January of the fourth calendar year following the calendar year in which the Bonus to which such Deferred Bonus Account relates is awarded to the Participant; (ii) no later than five business days following the Participant's Separation from Service (including on account of death, in which case payment will be made to the Participant's Beneficiary); and (iii) such time as the Committee determines that such payment would be deductible by the Company for Federal income tax purposes without regard to the limitation of Code ss.162(m). (b) A Participant may, on or before the June 30 preceding the payment date specified in clause (i) of Section 3.1(a), elect to defer such date from one to three additional whole years, and such elected date shall thereafter constitute the applicable date for purposes of such clause (i). This Section 3.1(b) may be utilized by a Participant more than one time. No election under this Section 3.1(b) shall affect the timing of payment of the amount in a Deferred Bonus Account pursuant to clauses (ii) or (iii) of Section 3.1(a). Any election made under this Section 3.1(b) must be communicated to the Committee in writing prior to the applicable deadline. 3.2 Payments under the Plan shall be considered compensation to a Participant when paid, subject to all applicable federal, state and local income taxes, withholding and reporting. 3.3 Notwithstanding anything herein to the contrary, a Participant may request and receive a hardship distribution of all or a portion of the amount credited to his Deferred Bonus Accounts if the Participant demonstrates, to the satisfaction of the Committee, that he has suffered a Financial Hardship. A hardship distribution request must be made on the form provided by the Committee and shall be subject to any rules established by the Committee governing hardship distributions. The amount distributed to a Participant pursuant to this Section 3.3 cannot exceed the lesser of (a) the aggregate balance in all of the Participant's Deferred Bonus Accounts, or (b) the amount necessary to satisfy the Participant's Financial Hardship. Distributions may not be made pursuant to this Section 3.3 to the extent that the Participant's Financial Hardship is or may be relieved (i) through reimbursement or compensation by insurance or otherwise or (ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. No distribution under this Section 3.3 may be made prior to the time the Committee approves the distribution. 3.4 Any payment made to a Participant or his Beneficiary pursuant to the terms of the Plan shall reduce by a corresponding amount the balance in the applicable Deferred Bonus Account, and shall constitute a complete discharge of the obligations of the Company and the Committee with respect thereto. 3.5 Any payment made to a Participant or his Beneficiary pursuant to the terms of the Plan shall be in cash or Approved Investments, or any combination thereof, which have been held by the Company or in a Trust for purposes of replicating the Deferred Bonus Account to which such payment relates, as selected by the Committee in its sole discretion. ARTICLE IV Vesting 4.1 A Participant shall at all times be fully vested in his Deferred Bonus Accounts. ARTICLE V Funding; ERISA Status 5.1 All amounts credited under the Plan shall be payable solely from the general assets of the Company (which shall include, for this purpose, the assets of each Trust created pursuant to Section 5.3). The Participants shall have the status of general unsecured creditors of the Company with respect to the Company's obligation to make payments under the Plan. 5.2 All amounts credited to Participants' Deferred Bonus Accounts shall, at all times, be subject to the risk of the Company's business and may be deposited in an account or accounts in the Company's name in any bank or trust company. 5.3 The Company is not required to fund or otherwise segregate assets for payment of the benefits hereunder. Notwithstanding the preceding sentence, it is hereby acknowledged that the Company may create one or more Trusts to hold assets which may be used for the discharge of its obligations under the Plan. Such assets shall be available solely to (i) discharge the Company's obligations under the Plan and (ii) satisfy any claims of the Company's creditors in the event of the Company's insolvency or bankruptcy, under the terms and conditions described in the trust agreement establishing any such Trust. It is further acknowledged that (i) funds in an amount not less than $7.5 million have been contributed to a Trust, and that the Company intends that such Trust use such funds to replicate the Deferred Bonus Account relating to the Initial May Bonus, and (ii) funds in an amount of not less than $15.0 million have been contributed to another Trust, and that the Company intends that such other Trust use such funds to replicate the Deferred Bonus Account relating to the Initial Peltz Bonus. Each Trust is intended to be a "grantor trust" within the meaning of Code ss.ss.671-679, and is intended to be structured so that no Participant will recognize any income for Federal income tax purposes on account of any such Trust unless and until such Participant receives a distribution of benefits under the Plan. 5.4 The Plan is not intended to be subject to ERISA. If the Plan is determined by the Committee, upon the advice of counsel, to be subject to ERISA, then the Plan is intended to be unfunded and maintained primarily to provide deferred compensation benefits for "a select group of management or highly compensated employees" within the meaning of Sections 201, 301 and 401 of ERISA, and therefore to be exempt from Parts 2, 3, and 4 of Title I of ERISA. 5.5 If and only if it is determined by the Committee that the Plan is subject to ERISA, this Section 5.5 shall apply. Upon the submission of a claim for benefits under the Plan by a Participant, the Committee shall make a determination as to the merits of the claim. The Committee must give written notice to the Participant of the approval or denial of the claim within 90 days after the claim is filed with the Committee (180 days if special circumstances exist, with written notice to the Participant of the delay). In the event of a denial, such notice must set forth (i) the specific reason or reasons for the denial, (ii) the specific Plan provisions on which the denial is based, (iii) any additional material or information necessary for the Participant to perfect the claim and an explanation of why such material or information is necessary, and (iv) an explanation of the Plan's claim review procedure. Following the receipt of such denial, the Participant may (i) request a review of the denial by filing a written application for review with the Committee within 60 days after receipt of such denial, (ii) request a review of documents considered by the Committee pertinent to the claim at such reasonable time and location as shall be mutually agreeable to the Participant and the Committee, and (iii) submit issues and comments in writing to the Committee relating to the Committee's review of the denial. After consideration of the request for review, the Committee shall make a determination and render a final written decision to the Participant by registered mail within 60 days after receipt of the request for review of the denial (except that such period may be extended to 120 days if special circumstances exist, with written notice to the Participant of the delay). Such final decision must contain the specific reasons for the decision and references to the pertinent provisions of the Plan. ARTICLE VI Administration 6.1 The complete authority to control and manage the operation and administration of the Plan and the responsibility for carrying out its provisions belongs to the Committee. The Committee is authorized to interpret the Plan, to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan, to make all other determinations necessary or advisable for the administration of the Plan and to correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent that the Committee deems desirable to carry the Plan into effect. The powers and duties of the Committee shall include: a. Determining the amount of benefits payable to Participants and authorizing and directing the Company with respect to the payment of benefits under the Plan; b. Construing and interpreting the Plan whenever necessary to carry out its intention and purpose and making and publishing such rules for the regulation of the Plan as are not inconsistent with the terms of the Plan; and c. Compiling and maintaining all records it determines to be necessary, appropriate or convenient in connection with the administration of the Plan. 6.2 Any act which the Plan authorizes or requires the Committee to do may be done by a majority of its members. The action of such majority, expressed by a vote at a meeting or in writing without a meeting, shall constitute the action of the Committee and shall have the same effect for all purposes as if assented to by all members of the Committee. 6.3 The members of the Committee may authorize one or more of their number to execute or deliver any instrument, make any payment or perform any other act which the Plan authorizes or requires the Committee to do. 6.4 The Committee may employ counsel and other agents and may procure such clerical, accounting, and other services as they may require in carrying out the provisions of the Plan. 6.5 No member of the Committee shall receive any compensation for his services as such. All expenses of administering the Plan, including but not limited to, fees of accountants and counsel, and all expenses relating to any Trust, shall be paid by the Company. 6.6 The Company shall indemnify and save harmless each member of the Committee against all expenses and liabilities arising out of membership on the Committee in respect of any actions taken or not taken in connection with the Plan, excepting only expenses and liabilities arising from his own gross negligence or willful misconduct, as determined by the Board of Directors of the Company (excluding for this purpose any member of the Committee as to which such determination relates, and excluding any Participant). Notwithstanding the above, this Section 6.7 is not intended to limit any right of indemnification which any member of the Committee may have under the Certificate of Incorporation or By-Laws of the Company or otherwise. ARTICLE VII Amendment; Termination; Mandatory Distribution 7.1 The Company, by action of the Committee, may at any time or from time to time modify or amend any or all of the provisions of the Plan or may at any time terminate the Plan; provided, however, that no action taken shall adversely affect the rights of any Participant hereunder to amounts due and payable to such Participant at the time such action is taken, unless the Participant otherwise consents thereto. 7.2 Notwithstanding anything contained herein to the contrary, the Company shall immediately pay to a Participant any portion of any of the Participant's Deferred Bonus Accounts (i) which has been determined by the Internal Revenue Service or a taxing authority of another jurisdiction, in a manner which cannot be appealed or as to which the time to appeal has expired, to be currently taxable to the Participant or to have been taxable to the Participant in a prior taxable year or (ii) as to which the Committee has been presented an opinion of counsel reasonably acceptable to the Committee that such portion is more likely than not then currently taxable to the Participant or was taxable to the Participant in a prior taxable year. ARTICLE VIII General Provisions 8.1 No Participant, Beneficiary or employee of the Company or any of its affiliates shall have any right to any payment or benefit hereunder except to the extent herein provided. 8.2 The employment rights of any Participant shall not be enlarged, guaranteed or affected by reason of any of the provisions of the Plan. 8.3 Except as otherwise provided in the Plan, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such right or benefit shall be void. No such right or benefit shall in any manner be liable for or subject to the debts, liabilities or torts of a Participant. 8.4 If the Committee determines that any person to whom a payment is due hereunder is a minor or incompetent by reason of physical or mental disability, the Committee shall have the power to cause the payments then due to such person to be made to another for the benefit of the minor or incompetent, without responsibility of the Company or the Committee to see to the application of such payment, unless claim prior to such payment is made therefor by a duly appointed legal representative. Payments made pursuant to such power shall operate as a complete discharge of the Company and the Committee as to the amount so paid. 8.5 The validity of the Plan or any of its provisions shall be determined under, and it shall be construed and administered according to, the laws of the state of New York, unless preempted by ERISA. 8.6 Each Participant may designate, in writing and in the form of Exhibit I hereto, any person(s) or legal entity(ies), including his estate, as his Beneficiary under the Plan. A Participant may at any time revoke his designation of a Beneficiary or change his Beneficiary at any time prior to his death by filing with the Committee the appropriate beneficiary designation form. If no person or legal entity shall be designated by a Participant as his Beneficiary or if no designated Beneficiary survives him, his Beneficiary shall be his estate. To be effective, any designation or revocation of Beneficiary must be on the appropriate form provided by the Committee and on file with the Committee prior to the date of the Participant's death. The provisions of the Plan shall be binding on the Participant, the Company, and their respective heirs, executors, administrators, successors and assigns. 8.7 The Plan shall become effective as of December 14, 2000 and shall continue in effect thereafter until terminated in accordance with its terms. As authorized pursuant to a resolution of the Compensation Committee of the Board of Directors of Triarc Companies, Inc. at a meeting held on December 14, 2000. By:/s/ Brian L. Schorr --------------------------------- Name: Brian L. Schorr Title: Executive Vice President Exhibit I Form of Beneficiary Designation Pursuant to Section 8.6 of the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc. (the "Plan"), I hereby designate _____________ as my "Beneficiary" (as defined in the Plan) for purposes of the Plan. This designation shall supersede and replace any prior Beneficiary designation I have made for purposes of the Plan. Signature: ----------------------- Name: Dated: -------------------------- EX-10.2 6 may.txt TRUST AGT. - MAY Exhibit 10.2 EXECUTION COPY TRUST AGREEMENT FOR THE DEFERRAL PLAN FOR SENIOR EXECUTIVE OFFICERS OF TRIARC COMPANIES, INC. Triarc Companies, Inc., a Delaware corporation (the "Company"), and Wilmington Trust Company, a Delaware bank and trust company ("Trustee"), have as of January 23, 2001 (the "Effective Date") entered into this grantor trust agreement ("Trust Agreement"), established under the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., a copy of which is attached hereto, as amended, supplemented or restated from time to time (the "Plan"), as herein set forth. WHEREAS, Company has adopted the Plan; WHEREAS, Company has incurred or expects to incur liability under the terms of the Plan with respect to Peter May (the "Participant") who is an individual participating in the Plan; WHEREAS, Company wishes to establish a trust, which shall be known as the "Triarc Companies, Inc. Deferral Plan Trust" (the "Trust"), and to contribute to the Trust assets that shall be held therein, subject to the claims of Company's creditors in the event of Company's "Insolvency," as herein defined, until paid to the Participant or his beneficiary(ies), as the case may be, in such manner and at such times as specified in the Plan; WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and, if the Plan is determined to be subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), that this Trust shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of ERISA; WHEREAS, it is the intention of Company to make contributions to the Trust to provide the Trust with a source of funds to assist it in the meeting of its liabilities under the Plan; NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows: Section 1. Establishment of Trust (a) Company hereby deposits with Trustee in trust $7.5 million, which shall become the principal of the Trust to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. (b) The Trust hereby established shall be irrevocable. (c) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon (the "Trust Fund") shall be held separate and apart from the Company's other funds and shall be used exclusively for the uses and purposes of the Participant and Company's general creditors as herein set forth. The Participant and his beneficiary(ies) shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of the Participant and his beneficiary(ies) against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event the Company is Insolvent, as defined in Section 3(a) herein. (e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. Neither the Trustee nor the Participant and his beneficiary(ies) shall have any right or duty to compel such additional deposits or determine the sufficiency thereof. (f) If the Plan is determined to be subject to ERISA, the Company shall use reasonable commercial efforts at all times to cause the Plan and this Trust to have characteristics supporting a determination that it is an arrangement constituting an unfunded Plan maintained for the purpose of providing deferred compensation to a select group of management or highly compensated employees for purposes of Title I of ERISA. Section 2. Payments to Participant and His Beneficiary(ies). (a) Company shall deliver to the Trustee a schedule (the "Payment Schedule") that (i) indicates the amounts payable in respect of the Participant and his beneficiary(ies), and (ii) provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. The Trustee acknowledges that the information described in clause (ii) of the preceding sentence is directly or indirectly (through actions of the Committee provided for under the Plan document) contained in such Plan document, as it may be amended from time to time, which shall constitute the Payment Schedule for this purpose; provided, however, that the Company (directly or through the Committee) shall be responsible for promptly notifying the Trustee in writing of any event, including, without limitation, any Participant election or Committee action or exercise of discretion, affecting the timing, amount or composition of any payment to the Participant and his beneficiary(ies) under the Plan. Except as otherwise provided herein, Trustee shall make payments to the Participant and his beneficiary(ies) in accordance with the Payment Schedule. The Company shall provide in writing to the Trustee any and all information the Trustee reasonably believes necessary for the Trustee or its agent to make any determination as to payments to the Participant and his beneficiary(ies), tax reporting, tax withholding or otherwise not less than thirty (30) calendar days prior to the time the payments must be made, or as soon as practicable thereafter if the event causing the payment obligation was not reasonably foreseeable by the Company prior to such 30-day period. The Trustee or its agent shall not be required to make any such determination for which the Company has not provided information requested by the Trustee. (b) The Trustee shall make provision for the reporting and withholding of any federal taxes that may be required to be withheld with respect to the payment of benefits from the Trust Fund pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company. The Trustee shall make provision for the reporting and withholding of any state or local taxes that may be required with respect to the payment of benefits only as directed by the Company. (c) The Company shall from time to time pay taxes of any and all kinds whatsoever that at any time are lawfully levied or assessed upon or become payable in respect of the Trust Fund, the income or any property forming a part thereof or any security transaction pertaining thereto. To the extent that any taxes lawfully levied or assessed upon the Trust Fund are not paid by the Company, the Trustee shall have the power to pay such taxes out of the Trust Fund and shall seek reimbursement from the Company. Prior to making any payment, the Trustee may require such releases or other documents from any lawful taxing authority, as it shall deem necessary. The Trustee shall contest the validity of taxes in any manner deemed appropriate by the Company or its counsel, but at the Company's expense, and only if it has received an indemnity bond or other security satisfactory to it to pay any such expenses. The Trustee shall not be liable for any non-payment of tax when it distributes an interest hereunder on directions from the Company. (d) In the case of any dispute as to the payment of benefits from the Trust Fund pursuant to the terms of the Plan, the entitlement of the Participant or his beneficiary(ies) to benefits under the Plan shall be determined by the Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. Any such determination by the Company or such party shall be provided to the Trustee in writing not less than five (5) business days (or as soon thereafter as practicable) prior to the time by which the Trustee must act thereupon. The Trustee or its agent shall not be required to make any such determination. (e) The Company may make payment of benefits directly to the Participant or his beneficiary(ies) as they become due under the terms of the Plan. The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, the Company shall make the balance of each such payment as it falls due. At least five (5) business days prior to any scheduled payment, the Trustee shall notify the Company, in writing, where principal and earnings are not sufficient to make scheduled payment. Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company is Insolvent. (a) The Trustee shall cease payment of benefits to the Participant and his beneficiary(ies) if the Company is "Insolvent." The Company shall be considered "Insolvent" for purposes of this Trust Agreement (i) if the Company is unable to pay its debts as they become due, or (ii) while the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below. (1) The Company's Board of Directors acting in such capacity, and any Executive Vice President who is not a Plan participant or, if none, any Senior Vice President who is not a Plan participant or, if none, any Vice President who is not a Plan participant (the "Ranking Officer"), shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company notifies the Trustee that the Company has become Insolvent, the Trustee shall provide the Board of Directors with a copy of such writing and absent the Company's provision of an independent expert's opinion reasonably satisfactory to the Trustee that the Company is not Insolvent, the Trustee shall discontinue payment of benefits to the Participant or his beneficiary(ies). (2) Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from a member of the Company's Board of Directors or the Ranking Officer or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. (3) If at any time the Trustee has received a written notice containing information or allegations described in Section 3(b)(1) that ` the Company is Insolvent, the Trustee shall discontinue payments to the Participant or his beneficiary(ies) and shall hold the assets of the Trust for the benefit of the Company's general creditors (including the Participant or His beneficiary(ies)) until such time as it is determined that the Company is not Insolvent as provided in 3(b)(1) above. Nothing in this Trust Agreement shall in any way diminish any rights of the Participant or his beneficiary(ies) to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise. (4) The Trustee shall resume the payment of benefits to the Participant or his beneficiary(ies) in accordance with Section 2 of this Trust Agreement only after it has been demonstrated to the Trustee's reasonable satisfaction that the Company is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to the Participant or his beneficiary(ies) under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Participant or his beneficiary(ies) by the Company in lieu of (but not in addition to) the payments provided for hereunder during any such period of discontinuance. Section 4. Payments to the Company. Except as provided in Section 3 hereof, the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before all payments of benefits have been made to the Participant and his beneficiary(ies) pursuant to the terms of the Plan. Section 5. Investment Authority. The Trustee shall have, without exclusion, all powers conferred on the Trustee by applicable law, unless expressly provided otherwise herein, and all rights associated with assets of the Trust shall be exercised by the Trustee, and shall in no event be exercisable by or rest with the Participant. The Trustee shall have full power and authority to invest and reinvest the Trust Fund in any investment permitted by law, exercising the judgment and care that persons of prudence, discretion and intelligence would exercise under the circumstances then prevailing considering the probable income and safety of their capital, including, without limiting the generality of the foregoing, the power: (a) To invest and reinvest the Trust Fund, together with the income therefrom, in common stock, membership or partnership interests, preferred stock, mutual or hedge funds, bonds, mortgages, notes, time certificates of deposit, commercial paper and other evidences of indebtedness (including those issued by the Trustee or any of its affiliates), other securities, policies of life insurance, annuity contracts, options to buy or sell securities or other assets, and other property of any kind (personal, real or mixed, and tangible or intangible); (b) To deposit or invest all or any part of the assets of the Trust Fund in savings accounts or certificates of deposit or other deposits which bear a reasonable interest rate in a bank, including the commercial department of the Trustee, if such bank is supervised by the United States or any state; (c) To hold, manage, improve and control all property, real or personal, forming part of the Trust Fund and to sell, convey, transfer, exchange, partition, lease for any term, even extending beyond the duration of this Trust, and otherwise dispose of the same from time to time in such manner, for such consideration and upon such terms and conditions as the Trustee shall determine; (d) To have, respecting securities, all the rights, powers and privileges of an owner, including the power to give proxies, pay assessments and other sums deemed by the Trustee to be necessary for the protection of the Trust Fund, to vote any corporate stock either in person or by proxy, with or without power of substitution for any purpose. To participate in voting trusts, pooling agreements, foreclosures, reorganizations, consolidations, mergers and liquidations and, in connection therewith, to deposit securities with and transfer title to any protective or other committee under such terms as the Trustee may deem advisable; to exercise or sell stock subscriptions or conversion rights; and regardless of any limitation elsewhere in this document relative to investment by the Trustee, to accept and retain as an investment any securities or other property received through the exercise of any of the foregoing powers; (e) To hold in cash, without liability for interest, such portion of the Trust Fund which, in its discretion, shall be reasonable under the circumstances, pending investments or payments of expenses, or the distribution of benefits; (f) To take such actions as may be necessary or desirable to protect the Trust Fund from loss due to the default on mortgages held in the Trust including the appointment of agents or trustees in such other jurisdictions as may seem desirable, to transfer property to such agents or trustees, to grant such powers as are necessary or desirable to protect the Trust or its assets, to direct such agents or trustees, or to delegate such power to direct and to remove such agents or trustees; (g) To employ such agents, including investment advisors, custodians, sub-custodians and counsel as may be reasonably necessary and to pay them reasonable compensation; to settle, compromise or abandon all claims and demands in favor of or against the Trust assets; (h) To cause title to property of the Trust to be issued, held or registered in the individual name of the Trustee or in the name of its nominee(s) or agents, or in such form that title will pass by delivery; (i) To exercise all of the further rights, powers, options and privileges granted, provided for or vested in trustees generally under the laws of the State of New York, so that powers conferred upon the Trustee herein shall not be in limitation of any authority conferred by law, but shall be in addition thereto; (j) To borrow money from any source (including the Trustee) and to execute promissory notes, mortgages, or other obligations and to pledge or mortgage any Trust assets as security; (k) To lend certificates representing stocks, bonds, or other securities to any brokerage or other firm selected by the Trustee; (l) To use securities, depositories or custodians and to allow such securities as may be held by a depository or custodian to be registered in the name of such depository or its nominee or in the name of such custodian or its nominee; (m) To invest the Trust Fund from time to time in one or more investment funds, which funds shall be registered under the Investment Company Act of 1940 (including companies with respect to which the Trustee or an affiliate is the investment adviser or provides other services for which it is compensated by the funds, and which compensation shall be in addition to the compensation of the Trustee hereunder); (n) To invest in securities (including stock or rights to acquire stock) or obligations issued by Company; and (o) To do all other acts necessary or desirable for the proper administration of the Trust Fund, as if the Trustee were the absolute owner thereof. However, nothing in this section shall be construed to mean the Trustee assumes any responsibility for the performance of any investment made by the Trustee in its capacity as trustee under this Trust Agreement. Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code. All rights associated with assets of the Trust Fund shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with the Participant. The Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. Notwithstanding anything in the foregoing provisions of this Section 5 to the contrary, the Trustee shall invest the assets of the Trust Fund and take all investment-related actions, including, without limitation, all actions pursuant to clause (d) above, as directed in writing by (i) an investment manager appointed by the Company pursuant to Section 2.2 of the Plan, or (ii) as to any assets of the Trust Fund as to which no such investment manager has been appointed, the Company. The Trustee shall not be responsible for (i) determining the appropriateness of any direction set forth in clause (i) or (ii) of the preceding sentence or (ii) failing to act with respect to the investment of the assets of the Trust Fund in the absence of direction from the Company or an investment manager appointed by the Company pursuant to Section 2.2 of the Plan; provided, however, that, except as otherwise directed by the Company or an investment manager appointed by the Company pursuant to Section 2.2 of the Plan, the Trustee may invest idle cash in a readily liquid short-term investment, including, without limitation, in any money market mutual fund described in Section 5(m) above within the Wilmington family of mutual funds. The Trustee and the Company acknowledge that the intent of the parties is that the investment of the assets of the Trust match the deemed investments of the "Deferred Bonus Account" (as defined in the Plan) on the books and records of the Company attributable thereto. Section 6. Disposition of Income. During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. Section 7. Accounting by the Trustee. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within 60 days following the close of each calendar year and such other times as the Company may request (but not more frequently than once per calendar month) and within 60 days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. Section 8. Responsibility of the Trustee. (a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company or its Board of Directors which is contemplated by, and in conformity with, the terms of the Plan or this Trust Agreement and is given in writing by the Company or its Board of Directors. In the event of a dispute between the Company and a party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute. (b) If the Trustee undertakes or defends any administrative, adversarial or other litigation or proceeding or enforcement action arising in connection with this Trust, including, without limitation, any successful action against the Company to enforce the indemnification provisions of this Trust Agreement, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including without limitation, reasonable attorney's fees and expenses) relating thereto and the Company shall be primarily liable for such payments. Moreover, the Company shall indemnify and hold the Trustee harmless from and against all loss or liability (including expenses and reasonable attorneys' fees), to which it may be subject by reason of its execution of its duties under this Trust Agreement, or by reason of any acts taken in good faith in accordance with any directions, or acts omitted in good faith due to absence of directions, from the Company or the Committee unless, and only to the extent, such loss or liability is due to the Trustee's gross negligence or willful misconduct. The Company will, upon notice, pay monthly in arrears to or on behalf of the Trustee, all reasonable attorneys' fees and expenses incurred by the Trustee. If the Company does not pay such costs, expenses and liabilities in a reasonably timely manner, the Trustee may obtain payment from the Trust without notice to any party. If the Trustee receives notice of the assertion of any claim or of the commencement of any action or proceeding against the Trustee by any person other than the Company or an affiliate of the Company (a "Third Party Claim"), the Trustee will give the Company reasonable prompt written notice thereof. The Company will have the right to participate in or, by giving written notice to the Trustee, to elect to assume the defense of any litigation or proceeding at the Company's expense and by the Company's counsel (provided such counsel is reasonably satisfactory to the Trustee), and the Trustee will cooperate in good faith in such defense. If within ten calendar days after giving notice of a Third Party Claim to the Company, the Trustee receives written notice from the Company that the Company has elected to assume the defense of the Third Party Claim, the Company will not be liable for any legal expenses subsequently incurred by the Trustee in connection with the defense thereof; provided, however, that if the Trustee is advised in writing by its counsel that it needs separate counsel based on a conflict of interest, the Trustee may assume its own defense, and the Company will be liable for all reasonable legal fees, costs and expenses paid or incurred in connection therewith in accordance with the terms of this Agreement. Without the prior written consent of the Trustee which will not be unreasonably withheld or delayed, the Company will not enter into any settlement of any Third Party Claim which would lead to liability or create any financial or other obligation on the part of the Trustee for which the Trustee is not entitled to indemnification hereunder. Without the prior written consent of the Company which will not be unreasonably withheld or delayed, the Trustee will not enter into any settlement of any Third Party Claim which would create any financial or other liability on the part of the Company or the Participant. (c) Subject to Section 8(b) above, the Trustee may consult with legal counsel (who may also, but need not, be counsel for Company) generally with respect to any of its duties or obligations hereunder at Company's expense which, should it remain unpaid, may be paid from the Trust without prior notice to any party (but the Trustee shall give notice of such action within three (3) business days thereof). The Trustee shall incur no liability to any person for acting or refraining from acting in accordance with the advice of such counsel. (d) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals (other than legal counsel, the Trustee's right to which is described in Section 8(b) and (c) above) to assist it in performing any of its duties or obligations hereunder at the Company's expense which, should it remain unpaid, may be paid from the Trust without prior notice to any party (but the Trustee shall give notice of such action within three (3) business days thereof). The Trustee shall incur no liability to any person for acting or refraining from acting in accordance with the advice of such agents, accountants, actuaries, investment advisors, financial consultants or other professionals. (e) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein; provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. The Trustee shall not be liable for the failure or inability of an insurance company to pay the proceeds of any policy when due, and in no event shall the Trustee have any responsibility or liability with respect to the selection or monitoring of any insurance policies held in the Trust or the insurers issuing such policies or the payment of premiums with respect to such policies. (f) The Company has represented to the Trustee that the Plan either (i) is not subject to ERISA, or (ii) is a "top-hat" plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, which is exempt from the provisions of Part 4 of Title I of ERISA. The Trustee is entering into this Agreement in reliance upon the Company's representation. Accordingly, in the event that the Plan is subject to ERISA and fails to qualify as a top-hat plan exempt from ERISA, then notwithstanding any other provision of this Agreement to the contrary, the Company will indemnify and hold the Trustee harmless from all liabilities, damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) that the Trustee incurs as a result of a breach of fiduciary duty under ERISA arising from any action taken, or omitted to be taken, by the Trustee in good faith in accordance with this Agreement. In such event, the Company will, upon notice, pay monthly in arrears to or on behalf of the Trustee, all reasonable attorneys' fees and expenses incurred by the Trustee. In the event that the Trustee is determined to have incurred any liability as a result of the Trustee's gross negligence or willful misconduct, the Trustee will promptly reimburse the Company for all legal fees and expenses paid by the Company to or on behalf of the Trustee. (g) In the event that the Trustee is named in a lawsuit or proceeding involving the Plan or the Trust Fund, the Trustee shall be entitled to receive payments on a current basis pursuant to the indemnity provisions provided for in this Section; provided, however, that if the final judgment entered in the lawsuit or proceeding holds that Trustee is guilty of gross negligence or willful misconduct with respect to the Trust Fund, the Trustee shall be required to refund the indemnity payments that it has received. (h) All releases and indemnities provided in this Trust Agreement shall survive the termination of this Trust Agreement. The Company shall indemnify and hold harmless the Trustees for any actions of a prior Trustee. (i) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. (j) Upon the expiration of ninety (90) days from the date of any Trustee account statement, the Trustee shall be forever released and discharged from all liability and further accountability to the Company or any other person with respect to the accuracy of such account statement and all acts and failures to act of the Trustee reflected thereon, except to the extent that the Company, within such 90-day period, shall file with the Trustee specific, written objections to the account statement and, in any event, except to the extent that such accuracy, acts and failures to act are not readily discernible from a reasonable review of such account statement. To the extent not excepted pursuant to the preceding sentence, neither the Company, the Participant nor any other person shall be entitled to any additional or different accounting by the Trustee, and the Trustee shall not be compelled by the Company to file in any court any additional or different accounting. For purposes of regulations promulgated by Federal banking authorities, the Trustee's account statements shall be sufficient information concerning securities transactions effected for the Trust, provided that so long as the Trustee is directed with respect to the investment of the Trust, the Company or the investment manager, as the case may be, shall have the right, upon written request, to receive at no additional cost written confirmations of such securities transactions, which shall be mailed or otherwise furnished by the Trustee within the timeframe required by applicable regulations. Section 9. Compensation and Expenses of Trustee. (a) The Trustee shall be entitled to reasonable compensation for its services as agreed upon between the Trustee and the Company and as set forth from time to time in Schedule I attached hereto and incorporated herein by this reference. If the Trustee and the Company fail to agree upon a compensation agreement, the Trustee shall be entitled to compensation at a rate equal to the rate charged by the Trustee for similar services rendered by it during the current fiscal year for other trusts similar to this Trust. The Trustee's compensation and expenses shall be paid by the Company. The Trustee is authorized to withdraw such amounts from the Trust Fund if the Company fails to pay them within sixty (60) days of presentation of a statement of the amounts due and the Trustee shall notify the Company of any such action within three (3) business days thereof. (b) The Trustee is authorized to incur reasonable expenses in connection with the administration of the Trust including but not limited to, fees and expenses incurred pursuant to Section 8(c) and Section 8(d). Such expenses shall be paid by the Company. The Trustee is authorized to pay such amounts from the Trust Fund if the Company fails to pay them within sixty (60) days of presentation of a statement of the amounts due and the Trustee shall notify the Company of any such action within three (3) business days thereof. Section 10. Resignation and Removal of Trustee. (a) The Trustee may resign at any time by written notice to the Company, which shall be effective 30 days after receipt of such notice unless the Company and the Trustee agree otherwise. (b) The Trustee may be removed by the Company on 30 days written notice or upon shorter written notice accepted by the Trustee. (c) Upon resignation or removal of the Trustee and appointment of a successor Trustee, all Trust Fund assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 45 days after receipt of notice of successor trustee's acceptance of appointment or such longer period as the Company may designate in writing. (d) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph (a) or (b) of this section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. For purposes of this section, any successor Trustee may not be an affiliate of the Company. An affiliate of the Company includes any person directly or indirectly through on or more intermediaries controlling, controlled by or under common control with the Company. Section 11. Appointment of Successor. (a) If the Trustee resigns (or is removed) in accordance with Section 10(a) or (b) hereof, the Company may appoint any third party, such as a bank trust department, that may be granted corporate trustee powers under federal or state law, as a successor to replace the Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former trustee, including ownership rights in the Trust assets upon transfer of same to the new trustee. The former trustee shall execute any instrument necessary or reasonably requested by the Company or the successor trustee to evidence the transfer. (b) Any successor trustee appointed by a court pursuant to the second sentence of Section 10(d) hereof shall be any third party, such as a bank trust department, that may be granted corporate trustee powers under federal or state law. The appointment of a successor trustee shall be effective when accepted in writing by the new trustee. The new trustee shall have all the rights and powers of the former trustee, including ownership rights in Trust assets upon transfer of same to the new trustee. The former trustee shall execute any instrument necessary or reasonably requested by the successor trustee to evidence the transfer. (c) The successor trustee need not examine the records and acts of any prior trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor trustee shall not be responsible for, and the Company shall indemnify and defend the successor trustee from, any claim or liability resulting from any action or inaction of any prior trustee or from any other past event, or any condition existing at the time it becomes successor trustee. Section 12. Amendment or Termination. (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof. (b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company. Such remaining assets shall be paid by the Trustee to the Company in such amounts and in the manner instructed by the Company, whereupon the Trustee shall be released and discharged from all obligations hereunder. From and after the date of termination, and until final distribution of the Trust Fund, the Trustee shall continue to have all of the powers provided herein as are necessary or expedient for the orderly liquidation and distribution of the Trust Fund. Section 13. Legal Defense Fund; Claims Against the Trustee or the Trust. (a) If so instructed, in writing, by the Company in its sole discretion, the Trustee shall establish within the Trust Fund a separate fund, hereinafter referred to as a "Legal Defense Fund." The Legal Defense Fund shall consist of such portions of the Company's contributions to the Trust as the Company shall specify in writing at the time of contribution, together with all income, gains and losses and proceeds from the investment, reinvestment and sale thereof, less all payments therefrom and expenses charged thereto in accordance with the provisions of this Agreement. Subject to Section 3, the Legal Defense Fund shall be held and administered by the Trustee for the purpose of defraying the costs and expenses incurred by the Participant and his beneficiary(ies) associated with the enforcement of their rights under the Plan by litigation or other legal action and by the Trustee in performing its duties under this Section. (b) The Legal Defense Fund, if any, shall be maintained and administered as a separate segregated account; provided, however, that the assets of the Legal Defense Fund may be commingled with all other assets of the Trust, and with the assets of any other Trust, solely for investment purposes. (c) If legal proceedings are brought against the Trustee by the Company or another party seeking to invalidate any of the provisions of this Agreement or the Trust, or seeking to enjoin the Trustee from paying any amounts from the Trust or from taking any other action otherwise required or permitted to be taken by the Trustee under this Agreement, the Trustee shall take all steps that may be necessary in such proceeding to uphold the validity and enforceability of the provisions of this Agreement. The Trustee shall be empowered to retain counsel and other appropriate experts, including actuaries and accountants, to assist it in making any determination under this Section 13. All costs and expenses incurred by the Trustee in connection with any such proceeding (including, without limitation, the payment of reasonable fees, costs and disbursements of any counsel, actuaries, accountants or other experts retained by the Trustee in connection with such proceeding) shall be charged to and paid from the Legal Defense Fund, if any. To the extent the Trustee's legal fees and expenses exceed the amount available in the Legal Defense Fund, if any, such fees and expenses shall be paid by the Trustee from the assets of the Trust Fund unless promptly paid by the Company. (d) If the Participant or his beneficiary(ies) notifies the Trustee in writing that the Company has refused to pay a claim asserted by the Participant or his beneficiary(ies) under the Plan, the Participant or such beneficiary(ies) ("Claimant") may demand payment from the Legal Defense Fund, if any, with respect to expenses incurred in connection with the initiation or defense of any litigation or other legal action by or against the Company or any director, officer, stockholder or other person affiliated with the Company. Such demand shall be made in writing by delivering to the Trustee within 90 days following the date the Claimant incurs such expenses (i) a certification signed by the Claimant that the Company is in default in paying its obligations under the Plan, and (ii) itemizing in reasonable detail in a form acceptable to the Trustee the expenses payable by the Legal Defense Fund, if any. (e) In the event that on the date a Claimant's expenses are to be paid from the Legal Defense Fund other expenses have been claimed but not yet paid and the aggregate amount of all claims exceeds the amount available in the Legal Defense Fund, the Company shall be obligated to make an additional contribution to the Legal Defense Fund. In the event the Company fails to make such additional contribution, the Trustee shall promptly advise the Claimant and shall only pay that portion of the amount of the claim to each Claimant determined by multiplying such Claimant's expenses by a fraction the numerator of which is the amount held in the Legal Defense Fund and the denominator or which is the aggregate expenses claimed by all Claimants. This Section 13(e) shall apply only on and following the time that the Company instructs the Trustee to establish the Legal Defense Fund in accordance with Section 13(a). (f) Notwithstanding any provision herein to the contrary, the Trustee shall be required to act under this Section 13 (other than in respect of Section 13(c)) only to the extent there are sufficient amounts available in the Legal Defense Fund to defray the costs and expenses the Trustee reasonably anticipates will be incurred in connection with such action. (g) The Legal Defense Fund, if any, shall continue to be held and administered by the Trustee for the purposes described in Section 13 until such time as all benefits to which the Participant and his beneficiary(ies) are entitled under the Plan shall have been paid in full to the Participant or his beneficiary(ies). Any balance then remaining in the Legal Defense Fund shall be distributed to the Company. Section 14. Miscellaneous. (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to the Participant and his beneficiary(ies) under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of New York, to the extent not preempted by ERISA. (d) This Trust Agreement shall be binding on, and the powers granted to the Company and the Trustee, respectively, shall be exercisable by the respective successors and assigns of the Company and the Trustee. Any corporation that succeeds to substantially all of the business of the Trustee by merger, consolidation, purchase or otherwise shall upon succession and without appointment or other action by the Company be and become successor Trustee hereunder. (e) Any communication to the Trustee, including any notice, direction, designation, certification, order, instruction or objection shall be in writing and signed by the person authorized under the Plan or the Trust Agreement to govern same. The Trustee shall be fully protected and indemnified by the Company in acting in accordance with such written communications. Any notice required or permitted to be given hereunder shall be deemed given if written and hand delivered, mailed, postage prepaid, certified mail, return receipt requested or transmitted by facsimile to the Company or the Trustee at the following address or such other address as a party may specify, provided that notices to the Trustee shall be deemed effective only upon receipt: (i) if to the Company: Triarc Companies, Inc. 280 Park Avenue New York, New York 10017 Facsimile No.: (212) 451-3216 Attention: General Counsel (ii) If to the Trustee: Wilmington Trust Company, as Trustee 1100 North Market Street Wilmington, Delaware 19890 Facsimile No.: (302) 651-1312 Attention: Corporate Retirement and Custody Services Division (f) Any obligation of the Company and/or the Trust to pay the Trustee amounts pursuant to any provision of this Trust Agreement shall survive any amendment or termination hereof or the Trustee's resignation or removal. IN WITNESS WHEREOF the Company and the Trustee have signed this Trust Agreement as of the date first written above. TRIARC COMPANIES, INC. By: /s/ Brian L. Schorr ------------------- Name: Brian L. Schorr Title: Executive Vice President WILMINGTON TRUST COMPANY By: /s/ Nazareno J. Regalbuto ------------------------- Name: Nazareno J. Regalbuto Title: Vice President Schedule I Trustee's Fees The Trustee's compensation shall be equal to 10 basis points (.0010) per annum of the aggregate market value of the assets of the Trust, payable quarterly in arrears with a minimum annual fee of $5,000. This fee arrangement shall be in effect through January 1, 2004. Thereafter, the Trustee may increase its annual compensation but such increase shall not exceed the lesser of: (i) 15%; and (ii) 50% of the Trustee's posted fee schedule for comparable accounts then in effect. Any such increase shall remain in effect until January 1, 2006 and thereafter until another fee arrangement is agreed upon by the Trustee and the Company. Notwithstanding the foregoing, in the event of a material change in the custodial services of the Trustee under the Trust Agreement or if the Trustee is required to perform material services in addition to the Trustee's custodial responsibilities and responsibilities pursuant to the investment directions given to the Trustee by the Company or any investment manager appointed by the Company pursuant to Section 2.2 of the Plan, the Trustee reserves the right to receive additional reasonable compensation as agreed upon with the Company. In the event the Trustee is engaged to provide investment management services (other than cash management services as provided in Section 5 of the Trust Agreement), the Trustee will be entitled to receive additional reasonable compensation as agreed upon with the Company. EX-10.3 7 npeltz.txt TRUST AGT. - PELTZ Exhibit 10.3 EXECUTION COPY TRUST AGREEMENT FOR THE DEFERRAL PLAN FOR SENIOR EXECUTIVE OFFICERS OF TRIARC COMPANIES, INC. Triarc Companies, Inc., a Delaware corporation (the "Company"), and Wilmington Trust Company, a Delaware bank and trust company ("Trustee"), have as of January 23, 2001 (the "Effective Date") entered into this grantor trust agreement ("Trust Agreement"), established under the Deferral Plan for Senior Executive Officers of Triarc Companies, Inc., a copy of which is attached hereto, as amended, supplemented or restated from time to time (the "Plan"), as herein set forth. WHEREAS, Company has adopted the Plan; WHEREAS, Company has incurred or expects to incur liability under the terms of the Plan with respect to Nelson Peltz (the "Participant") who is an individual participating in the Plan; WHEREAS, Company wishes to establish a trust, which shall be known as the "Triarc Companies, Inc. Deferral Plan Trust" (the "Trust"), and to contribute to the Trust assets that shall be held therein, subject to the claims of Company's creditors in the event of Company's "Insolvency," as herein defined, until paid to the Participant or his beneficiary(ies), as the case may be, in such manner and at such times as specified in the Plan; WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and, if the Plan is determined to be subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), that this Trust shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of ERISA; WHEREAS, it is the intention of Company to make contributions to the Trust to provide the Trust with a source of funds to assist it in the meeting of its liabilities under the Plan; NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows: Section 1. Establishment of Trust (a) Company hereby deposits with Trustee in trust $15.0 million, which shall become the principal of the Trust to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. (b) The Trust hereby established shall be irrevocable. (c) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon (the "Trust Fund") shall be held separate and apart from the Company's other funds and shall be used exclusively for the uses and purposes of the Participant and Company's general creditors as herein set forth. The Participant and his beneficiary(ies) shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of the Participant and his beneficiary(ies) against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event the Company is Insolvent, as defined in Section 3(a) herein. (e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. Neither the Trustee nor the Participant and his beneficiary(ies) shall have any right or duty to compel such additional deposits or determine the sufficiency thereof. (f) If the Plan is determined to be subject to ERISA, the Company shall use reasonable commercial efforts at all times to cause the Plan and this Trust to have characteristics supporting a determination that it is an arrangement constituting an unfunded Plan maintained for the purpose of providing deferred compensation to a select group of management or highly compensated employees for purposes of Title I of ERISA. Section 2. Payments to Participant and His Beneficiary(ies). (a) Company shall deliver to the Trustee a schedule (the "Payment Schedule") that (i) indicates the amounts payable in respect of the Participant and his beneficiary(ies), and (ii) provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. The Trustee acknowledges that the information described in clause (ii) of the preceding sentence is directly or indirectly (through actions of the Committee provided for under the Plan document) contained in such Plan document, as it may be amended from time to time, which shall constitute the Payment Schedule for this purpose; provided, however, that the Company (directly or through the Committee) shall be responsible for promptly notifying the Trustee in writing of any event, including, without limitation, any Participant election or Committee action or exercise of discretion, affecting the timing, amount or composition of any payment to the Participant and his beneficiary(ies) under the Plan. Except as otherwise provided herein, Trustee shall make payments to the Participant and his beneficiary(ies) in accordance with the Payment Schedule. The Company shall provide in writing to the Trustee any and all information the Trustee reasonably believes necessary for the Trustee or its agent to make any determination as to payments to the Participant and his beneficiary(ies), tax reporting, tax withholding or otherwise not less than thirty (30) calendar days prior to the time the payments must be made, or as soon as practicable thereafter if the event causing the payment obligation was not reasonably foreseeable by the Company prior to such 30-day period. The Trustee or its agent shall not be required to make any such determination for which the Company has not provided information requested by the Trustee. (b) The Trustee shall make provision for the reporting and withholding of any federal taxes that may be required to be withheld with respect to the payment of benefits from the Trust Fund pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company. The Trustee shall make provision for the reporting and withholding of any state or local taxes that may be required with respect to the payment of benefits only as directed by the Company. (c) The Company shall from time to time pay taxes of any and all kinds whatsoever that at any time are lawfully levied or assessed upon or become payable in respect of the Trust Fund, the income or any property forming a part thereof or any security transaction pertaining thereto. To the extent that any taxes lawfully levied or assessed upon the Trust Fund are not paid by the Company, the Trustee shall have the power to pay such taxes out of the Trust Fund and shall seek reimbursement from the Company. Prior to making any payment, the Trustee may require such releases or other documents from any lawful taxing authority, as it shall deem necessary. The Trustee shall contest the validity of taxes in any manner deemed appropriate by the Company or its counsel, but at the Company's expense, and only if it has received an indemnity bond or other security satisfactory to it to pay any such expenses. The Trustee shall not be liable for any non-payment of tax when it distributes an interest hereunder on directions from the Company. (d) In the case of any dispute as to the payment of benefits from the Trust Fund pursuant to the terms of the Plan, the entitlement of the Participant or his beneficiary(ies) to benefits under the Plan shall be determined by the Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. Any such determination by the Company or such party shall be provided to the Trustee in writing not less than five (5) business days (or as soon thereafter as practicable) prior to the time by which the Trustee must act thereupon. The Trustee or its agent shall not be required to make any such determination. (e) The Company may make payment of benefits directly to the Participant or his beneficiary(ies) as they become due under the terms of the Plan. The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, the Company shall make the balance of each such payment as it falls due. At least five (5) business days prior to any scheduled payment, the Trustee shall notify the Company, in writing, where principal and earnings are not sufficient to make scheduled payment. Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company is Insolvent. (a) The Trustee shall cease payment of benefits to the Participant and his beneficiary(ies) if the Company is "Insolvent." The Company shall be considered "Insolvent" for purposes of this Trust Agreement (i) if the Company is unable to pay its debts as they become due, or (ii) while the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below. (1) The Company's Board of Directors acting in such capacity, and any Executive Vice President who is not a Plan participant or, if none, any Senior Vice President who is not a Plan participant or, if none, any Vice President who is not a Plan participant (the "Ranking Officer"), shall have the duty to inform the Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company notifies the Trustee that the Company has become Insolvent, the Trustee shall provide the Board of Directors with a copy of such writing and absent the Company's provision of an independent expert's opinion reasonably satisfactory to the Trustee that the Company is not Insolvent, the Trustee shall discontinue payment of benefits to the Participant or his beneficiary(ies). (2) Unless the Trustee has actual knowledge of the Company's Insolvency, or has received notice from a member of the Company's Board of Directors or the Ranking Officer or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. (3) If at any time the Trustee has received a written notice containing information or allegations described in Section 3(b)(1) that the Company is Insolvent, the Trustee shall discontinue payments to the Participant or his beneficiary(ies) and shall hold the assets of the Trust for the benefit of the Company's general creditors (including the Participant or his beneficiary(ies)) until such time as it is determined that the Company is not Insolvent as provided in 3(b)(1) above. Nothing in this Trust Agreement shall in any way diminish any rights of the Participant or his beneficiary(ies) to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise. (4) The Trustee shall resume the payment of benefits to the Participant or his beneficiary(ies) in accordance with Section 2 of this Trust Agreement only after it has been demonstrated to the Trustee's reasonable satisfaction that the Company is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to the Participant or his beneficiary(ies) under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Participant or his beneficiary(ies) by the Company in lieu of (but not in addition to) the payments provided for hereunder during any such period of discontinuance. Section 4. Payments to the Company. Except as provided in Section 3 hereof, the Company shall have no right or power to direct the Trustee to return to the Company or to divert to others any of the Trust assets before all payments of benefits have been made to the Participant and his beneficiary(ies) pursuant to the terms of the Plan. Section 5. Investment Authority. The Trustee shall have, without exclusion, all powers conferred on the Trustee by applicable law, unless expressly provided otherwise herein, and all rights associated with assets of the Trust shall be exercised by the Trustee, and shall in no event be exercisable by or rest with the Participant. The Trustee shall have full power and authority to invest and reinvest the Trust Fund in any investment permitted by law, exercising the judgment and care that persons of prudence, discretion and intelligence would exercise under the circumstances then prevailing considering the probable income and safety of their capital, including, without limiting the generality of the foregoing, the power: (a) To invest and reinvest the Trust Fund, together with the income therefrom, in common stock, membership or partnership interests, preferred stock, mutual or hedge funds, bonds, mortgages, notes, time certificates of deposit, commercial paper and other evidences of indebtedness (including those issued by the Trustee or any of its affiliates), other securities, policies of life insurance, annuity contracts, options to buy or sell securities or other assets, and other property of any kind (personal, real or mixed, and tangible or intangible); (b) To deposit or invest all or any part of the assets of the Trust Fund in savings accounts or certificates of deposit or other deposits which bear a reasonable interest rate in a bank, including the commercial department of the Trustee, if such bank is supervised by the United States or any state; (c) To hold, manage, improve and control all property, real or personal, forming part of the Trust Fund and to sell, convey, transfer, exchange, partition, lease for any term, even extending beyond the duration of this Trust, and otherwise dispose of the same from time to time in such manner, for such consideration and upon such terms and conditions as the Trustee shall determine; (d) To have, respecting securities, all the rights, powers and privileges of an owner, including the power to give proxies, pay assessments and other sums deemed by the Trustee to be necessary for the protection of the Trust Fund, to vote any corporate stock either in person or by proxy, with or without power of substitution for any purpose. To participate in voting trusts, pooling agreements, foreclosures, reorganizations, consolidations, mergers and liquidations and, in connection therewith, to deposit securities with and transfer title to any protective or other committee under such terms as the Trustee may deem advisable; to exercise or sell stock subscriptions or conversion rights; and regardless of any limitation elsewhere in this document relative to investment by the Trustee, to accept and retain as an investment any securities or other property received through the exercise of any of the foregoing powers; (e) To hold in cash, without liability for interest, such portion of the Trust Fund which, in its discretion, shall be reasonable under the circumstances, pending investments or payments of expenses, or the distribution of benefits; (f) To take such actions as may be necessary or desirable to protect the Trust Fund from loss due to the default on mortgages held in the Trust including the appointment of agents or trustees in such other jurisdictions as may seem desirable, to transfer property to such agents or trustees, to grant such powers as are necessary or desirable to protect the Trust or its assets, to direct such agents or trustees, or to delegate such power to direct and to remove such agents or trustees; (g) To employ such agents, including investment advisors, custodians, sub-custodians and counsel as may be reasonably necessary and to pay them reasonable compensation; to settle, compromise or abandon all claims and demands in favor of or against the Trust assets; (h) To cause title to property of the Trust to be issued, held or registered in the individual name of the Trustee or in the name of its nominee(s) or agents, or in such form that title will pass by delivery; (i) To exercise all of the further rights, powers, options and privileges granted, provided for or vested in trustees generally under the laws of the State of New York, so that powers conferred upon the Trustee herein shall not be in limitation of any authority conferred by law, but shall be in addition thereto; (j) To borrow money from any source (including the Trustee) and to execute promissory notes, mortgages, or other obligations and to pledge or mortgage any Trust assets as security; (k) To lend certificates representing stocks, bonds, or other securities to any brokerage or other firm selected by the Trustee; (l) To use securities, depositories or custodians and to allow such securities as may be held by a depository or custodian to be registered in the name of such depository or its nominee or in the name of such custodian or its nominee; (m) To invest the Trust Fund from time to time in one or more investment funds, which funds shall be registered under the Investment Company Act of 1940 (including companies with respect to which the Trustee or an affiliate is the investment adviser or provides other services for which it is compensated by the funds, and which compensation shall be in addition to the compensation of the Trustee hereunder); (n) To invest in securities (including stock or rights to acquire stock) or obligations issued by Company; and (o) To do all other acts necessary or desirable for the proper administration of the Trust Fund, as if the Trustee were the absolute owner thereof. However, nothing in this section shall be construed to mean the Trustee assumes any responsibility for the performance of any investment made by the Trustee in its capacity as trustee under this Trust Agreement. Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code. All rights associated with assets of the Trust Fund shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with the Participant. The Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. Notwithstanding anything in the foregoing provisions of this Section 5 to the contrary, the Trustee shall invest the assets of the Trust Fund and take all investment-related actions, including, without limitation, all actions pursuant to clause (d) above, as directed in writing by (i) an investment manager appointed by the Company pursuant to Section 2.2 of the Plan, or (ii) as to any assets of the Trust Fund as to which no such investment manager has been appointed, the Company. The Trustee shall not be responsible for (i) determining the appropriateness of any direction set forth in clause (i) or (ii) of the preceding sentence or (ii) failing to act with respect to the investment of the assets of the Trust Fund in the absence of direction from the Company or an investment manager appointed by the Company pursuant to Section 2.2 of the Plan; provided, however, that, except as otherwise directed by the Company or an investment manager appointed by the Company pursuant to Section 2.2 of the Plan, the Trustee may invest idle cash in a readily liquid short-term investment, including, without limitation, in any money market mutual fund described in Section 5(m) above within the Wilmington family of mutual funds. The Trustee and the Company acknowledge that the intent of the parties is that the investment of the assets of the Trust match the deemed investments of the "Deferred Bonus Account" (as defined in the Plan) on the books and records of the Company attributable thereto. Section 6. Disposition of Income. During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. Section 7. Accounting by the Trustee. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within 60 days following the close of each calendar year and such other times as the Company may request (but not more frequently than once per calendar month) and within 60 days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. Section 8. Responsibility of the Trustee. (a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company or its Board of Directors which is contemplated by, and in conformity with, the terms of the Plan or this Trust Agreement and is given in writing by the Company or its Board of Directors. In the event of a dispute between the Company and a party, the Trustee may apply to a court of competent jurisdiction to resolve the dispute. (b) If the Trustee undertakes or defends any administrative, adversarial or other litigation or proceeding or enforcement action arising in connection with this Trust, including, without limitation, any successful action against the Company to enforce the indemnification provisions of this Trust Agreement, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including without limitation, reasonable attorney's fees and expenses) relating thereto and the Company shall be primarily liable for such payments. Moreover, the Company shall indemnify and hold the Trustee harmless from and against all loss or liability (including expenses and reasonable attorneys' fees), to which it may be subject by reason of its execution of its duties under this Trust Agreement, or by reason of any acts taken in good faith in accordance with any directions, or acts omitted in good faith due to absence of directions, from the Company or the Committee unless, and only to the extent, such loss or liability is due to the Trustee's gross negligence or willful misconduct. The Company will, upon notice, pay monthly in arrears to or on behalf of the Trustee, all reasonable attorneys' fees and expenses incurred by the Trustee. If the Company does not pay such costs, expenses and liabilities in a reasonably timely manner, the Trustee may obtain payment from the Trust without notice to any party. If the Trustee receives notice of the assertion of any claim or of the commencement of any action or proceeding against the Trustee by any person other than the Company or an affiliate of the Company (a "Third Party Claim"), the Trustee will give the Company reasonable prompt written notice thereof. The Company will have the right to participate in or, by giving written notice to the Trustee, to elect to assume the defense of any litigation or proceeding at the Company's expense and by the Company's counsel (provided such counsel is reasonably satisfactory to the Trustee), and the Trustee will cooperate in good faith in such defense. If within ten calendar days after giving notice of a Third Party Claim to the Company, the Trustee receives written notice from the Company that the Company has elected to assume the defense of the Third Party Claim, the Company will not be liable for any legal expenses subsequently incurred by the Trustee in connection with the defense thereof; provided, however, that if the Trustee is advised in writing by its counsel that it needs separate counsel based on a conflict of interest, the Trustee may assume its own defense, and the Company will be liable for all reasonable legal fees, costs and expenses paid or incurred in connection therewith in accordance with the terms of this Agreement. Without the prior written consent of the Trustee which will not be unreasonably withheld or delayed, the Company will not enter into any settlement of any Third Party Claim which would lead to liability or create any financial or other obligation on the part of the Trustee for which the Trustee is not entitled to indemnification hereunder. Without the prior written consent of the Company which will not be unreasonably withheld or delayed, the Trustee will not enter into any settlement of any Third Party Claim which would create any financial or other liability on the part of the Company or the Participant. (c) Subject to Section 8(b) above, the Trustee may consult with legal counsel (who may also, but need not, be counsel for Company) generally with respect to any of its duties or obligations hereunder at Company's expense which, should it remain unpaid, may be paid from the Trust without prior notice to any party (but the Trustee shall give notice of such action within three (3) business days thereof). The Trustee shall incur no liability to any person for acting or refraining from acting in accordance with the advice of such counsel. (d) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals (other than legal counsel, the Trustee's right to which is described in Section 8(b) and (c) above) to assist it in performing any of its duties or obligations hereunder at the Company's expense which, should it remain unpaid, may be paid from the Trust without prior notice to any party (but the Trustee shall give notice of such action within three (3) business days thereof). The Trustee shall incur no liability to any person for acting or refraining from acting in accordance with the advice of such agents, accountants, actuaries, investment advisors, financial consultants or other professionals. (e) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein; provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. The Trustee shall not be liable for the failure or inability of an insurance company to pay the proceeds of any policy when due, and in no event shall the Trustee have any responsibility or liability with respect to the selection or monitoring of any insurance policies held in the Trust or the insurers issuing such policies or the payment of premiums with respect to such policies. (f) The Company has represented to the Trustee that the Plan either (i) is not subject to ERISA, or (ii) is a "top-hat" plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, which is exempt from the provisions of Part 4 of Title I of ERISA. The Trustee is entering into this Agreement in reliance upon the Company's representation. Accordingly, in the event that the Plan is subject to ERISA and fails to qualify as a top-hat plan exempt from ERISA, then notwithstanding any other provision of this Agreement to the contrary, the Company will indemnify and hold the Trustee harmless from all liabilities, damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) that the Trustee incurs as a result of a breach of fiduciary duty under ERISA arising from any action taken, or omitted to be taken, by the Trustee in good faith in accordance with this Agreement. In such event, the Company will, upon notice, pay monthly in arrears to or on behalf of the Trustee, all reasonable attorneys' fees and expenses incurred by the Trustee. In the event that the Trustee is determined to have incurred any liability as a result of the Trustee's gross negligence or willful misconduct, the Trustee will promptly reimburse the Company for all legal fees and expenses paid by the Company to or on behalf of the Trustee. (g) In the event that the Trustee is named in a lawsuit or proceeding involving the Plan or the Trust Fund, the Trustee shall be entitled to receive payments on a current basis pursuant to the indemnity provisions provided for in this Section; provided, however, that if the final judgment entered in the lawsuit or proceeding holds that Trustee is guilty of gross negligence or willful misconduct with respect to the Trust Fund, the Trustee shall be required to refund the indemnity payments that it has received. (h) All releases and indemnities provided in this Trust Agreement shall survive the termination of this Trust Agreement. The Company shall indemnify and hold harmless the Trustees for any actions of a prior Trustee. (i) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. (j) Upon the expiration of ninety (90) days from the date of any Trustee account statement, the Trustee shall be forever released and discharged from all liability and further accountability to the Company or any other person with respect to the accuracy of such account statement and all acts and failures to act of the Trustee reflected thereon, except to the extent that the Company, within such 90-day period, shall file with the Trustee specific, written objections to the account statement and, in any event, except to the extent that such accuracy, acts and failures to act are not readily discernible from a reasonable review of such account statement. To the extent not excepted pursuant to the preceding sentence, neither the Company, the Participant nor any other person shall be entitled to any additional or different accounting by the Trustee, and the Trustee shall not be compelled by the Company to file in any court any additional or different accounting. For purposes of regulations promulgated by Federal banking authorities, the Trustee's account statements shall be sufficient information concerning securities transactions effected for the Trust, provided that so long as the Trustee is directed with respect to the investment of the Trust, the Company or the investment manager, as the case may be, shall have the right, upon written request, to receive at no additional cost written confirmations of such securities transactions, which shall be mailed or otherwise furnished by the Trustee within the timeframe required by applicable regulations. Section 9. Compensation and Expenses of Trustee. (a) The Trustee shall be entitled to reasonable compensation for its services as agreed upon between the Trustee and the Company and as set forth from time to time in Schedule I attached hereto and incorporated herein by this reference. If the Trustee and the Company fail to agree upon a compensation agreement, the Trustee shall be entitled to compensation at a rate equal to the rate charged by the Trustee for similar services rendered by it during the current fiscal year for other trusts similar to this Trust. The Trustee's compensation and expenses shall be paid by the Company. The Trustee is authorized to withdraw such amounts from the Trust Fund if the Company fails to pay them within sixty (60) days of presentation of a statement of the amounts due and the Trustee shall notify the Company of any such action within three (3) business days thereof. (b) The Trustee is authorized to incur reasonable expenses in connection with the administration of the Trust including but not limited to, fees and expenses incurred pursuant to Section 8(c) and Section 8(d). Such expenses shall be paid by the Company. The Trustee is authorized to pay such amounts from the Trust Fund if the Company fails to pay them within sixty (60) days of presentation of a statement of the amounts due and the Trustee shall notify the Company of any such action within three (3) business days thereof. Section 10. Resignation and Removal of Trustee. (a) The Trustee may resign at any time by written notice to the Company, which shall be effective 30 days after receipt of such notice unless the Company and the Trustee agree otherwise. (b) The Trustee may be removed by the Company on 30 days written notice or upon shorter written notice accepted by the Trustee. (c) Upon resignation or removal of the Trustee and appointment of a successor Trustee, all Trust Fund assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 45 days after receipt of notice of successor trustee's acceptance of appointment or such longer period as the Company may designate in writing. (d) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph (a) or (b) of this section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. For purposes of this section, any successor Trustee may not be an affiliate of the Company. An affiliate of the Company includes any person directly or indirectly through on or more intermediaries controlling, controlled by or under common control with the Company. Section 11. Appointment of Successor. (a) If the Trustee resigns (or is removed) in accordance with Section 10(a) or (b) hereof, the Company may appoint any third party, such as a bank trust department, that may be granted corporate trustee powers under federal or state law, as a successor to replace the Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former trustee, including ownership rights in the Trust assets upon transfer of same to the new trustee. The former trustee shall execute any instrument necessary or reasonably requested by the Company or the successor trustee to evidence the transfer. (b) Any successor trustee appointed by a court pursuant to the second sentence of Section 10(d) hereof shall be any third party, such as a bank trust department, that may be granted corporate trustee powers under federal or state law. The appointment of a successor trustee shall be effective when accepted in writing by the new trustee. The new trustee shall have all the rights and powers of the former trustee, including ownership rights in Trust assets upon transfer of same to the new trustee. The former trustee shall execute any instrument necessary or reasonably requested by the successor trustee to evidence the transfer. (c) The successor trustee need not examine the records and acts of any prior trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor trustee shall not be responsible for, and the Company shall indemnify and defend the successor trustee from, any claim or liability resulting from any action or inaction of any prior trustee or from any other past event, or any condition existing at the time it becomes successor trustee. Section 12. Amendment or Termination. (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof. (b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets remaining in the Trust shall be returned to the Company. Such remaining assets shall be paid by the Trustee to the Company in such amounts and in the manner instructed by the Company, whereupon the Trustee shall be released and discharged from all obligations hereunder. From and after the date of termination, and until final distribution of the Trust Fund, the Trustee shall continue to have all of the powers provided herein as are necessary or expedient for the orderly liquidation and distribution of the Trust Fund. Section 13. Legal Defense Fund; Claims Against the Trustee or the Trust. (a) If so instructed, in writing, by the Company in its sole discretion, the Trustee shall establish within the Trust Fund a separate fund, hereinafter referred to as a "Legal Defense Fund." The Legal Defense Fund shall consist of such portions of the Company's contributions to the Trust as the Company shall specify in writing at the time of contribution, together with all income, gains and losses and proceeds from the investment, reinvestment and sale thereof, less all payments therefrom and expenses charged thereto in accordance with the provisions of this Agreement. Subject to Section 3, the Legal Defense Fund shall be held and administered by the Trustee for the purpose of defraying the costs and expenses incurred by the Participant and his beneficiary(ies) associated with the enforcement of their rights under the Plan by litigation or other legal action and by the Trustee in performing its duties under this Section. (b) The Legal Defense Fund, if any, shall be maintained and administered as a separate segregated account; provided, however, that the assets of the Legal Defense Fund may be commingled with all other assets of the Trust, and with the assets of any other Trust, solely for investment purposes. (c) If legal proceedings are brought against the Trustee by the Company or another party seeking to invalidate any of the provisions of this Agreement or the Trust, or seeking to enjoin the Trustee from paying any amounts from the Trust or from taking any other action otherwise required or permitted to be taken by the Trustee under this Agreement, the Trustee shall take all steps that may be necessary in such proceeding to uphold the validity and enforceability of the provisions of this Agreement. The Trustee shall be empowered to retain counsel and other appropriate experts, including actuaries and accountants, to assist it in making any determination under this Section 13. All costs and expenses incurred by the Trustee in connection with any such proceeding (including, without limitation, the payment of reasonable fees, costs and disbursements of any counsel, actuaries, accountants or other experts retained by the Trustee in connection with such proceeding) shall be charged to and paid from the Legal Defense Fund, if any. To the extent the Trustee's legal fees and expenses exceed the amount available in the Legal Defense Fund, if any, such fees and expenses shall be paid by the Trustee from the assets of the Trust Fund unless promptly paid by the Company. (d) If the Participant or his beneficiary(ies) notifies the Trustee in writing that the Company has refused to pay a claim asserted by the Participant or his beneficiary(ies) under the Plan, the Participant or such beneficiary(ies) ("Claimant") may demand payment from the Legal Defense Fund, if any, with respect to expenses incurred in connection with the initiation or defense of any litigation or other legal action by or against the Company or any director, officer, stockholder or other person affiliated with the Company. Such demand shall be made in writing by delivering to the Trustee within 90 days following the date the Claimant incurs such expenses (i) a certification signed by the Claimant that the Company is in default in paying its obligations under the Plan, and (ii) itemizing in reasonable detail in a form acceptable to the Trustee the expenses payable by the Legal Defense Fund, if any. (e) In the event that on the date a Claimant's expenses are to be paid from the Legal Defense Fund other expenses have been claimed but not yet paid and the aggregate amount of all claims exceeds the amount available in the Legal Defense Fund, the Company shall be obligated to make an additional contribution to the Legal Defense Fund. In the event the Company fails to make such additional contribution, the Trustee shall promptly advise the Claimant and shall only pay that portion of the amount of the claim to each Claimant determined by multiplying such Claimant's expenses by a fraction the numerator of which is the amount held in the Legal Defense Fund and the denominator or which is the aggregate expenses claimed by all Claimants. This Section 13(e) shall apply only on and following the time that the Company instructs the Trustee to establish the Legal Defense Fund in accordance with Section 13(a). (f) Notwithstanding any provision herein to the contrary, the Trustee shall be required to act under this Section 13 (other than in respect of Section 13(c)) only to the extent there are sufficient amounts available in the Legal Defense Fund to defray the costs and expenses the Trustee reasonably anticipates will be incurred in connection with such action. (g) The Legal Defense Fund, if any, shall continue to be held and administered by the Trustee for the purposes described in Section 13 until such time as all benefits to which the Participant and his beneficiary(ies) are entitled under the Plan shall have been paid in full to the Participant or his beneficiary(ies). Any balance then remaining in the Legal Defense Fund shall be distributed to the Company. Section 14. Miscellaneous. (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to the Participant and his beneficiary(ies) under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of New York, to the extent not preempted by ERISA. (d) This Trust Agreement shall be binding on, and the powers granted to the Company and the Trustee, respectively, shall be exercisable by the respective successors and assigns of the Company and the Trustee. Any corporation that succeeds to substantially all of the business of the Trustee by merger, consolidation, purchase or otherwise shall upon succession and without appointment or other action by the Company be and become successor Trustee hereunder. (e) Any communication to the Trustee, including any notice, direction, designation, certification, order, instruction or objection shall be in writing and signed by the person authorized under the Plan or the Trust Agreement to govern same. The Trustee shall be fully protected and indemnified by the Company in acting in accordance with such written communications. Any notice required or permitted to be given hereunder shall be deemed given if written and hand delivered, mailed, postage prepaid, certified mail, return receipt requested or transmitted by facsimile to the Company or the Trustee at the following address or such other address as a party may specify, provided that notices to the Trustee shall be deemed effective only upon receipt: (i) if to the Company: Triarc Companies, Inc. 280 Park Avenue New York, New York 10017 Facsimile No.: (212) 451-3216 Attention: General Counsel (ii) If to the Trustee: Wilmington Trust Company, as Trustee 1100 North Market Street Wilmington, Delaware 19890 Facsimile No.: (302) 651-1312 Attention: Corporate Retirement and Custody Services Division (f) Any obligation of the Company and/or the Trust to pay the Trustee amounts pursuant to any provision of this Trust Agreement shall survive any amendment or termination hereof or the Trustee's resignation or removal. IN WITNESS WHEREOF the Company and the Trustee have signed this Trust Agreement as of the date first written above. TRIARC COMPANIES, INC. By: /s/ Brian L. Schorr ------------------- Name: Brian L. Schorr Title: Executive Vice President WILMINGTON TRUST COMPANY By: /s/ Nazareno J. Regalbuto ------------------------- Name: Nazareno J. Regalbuto Title: Vice President Schedule I Trustee's Fees The Trustee's compensation shall be equal to 10 basis points (.0010) per annum of the aggregate market value of the assets of the Trust, payable quarterly in arrears with a minimum annual fee of $5,000. This fee arrangement shall be in effect through January 1, 2004. Thereafter, the Trustee may increase its annual compensation but such increase shall not exceed the lesser of: (i) 15%; and (ii) 50% of the Trustee's posted fee schedule for comparable accounts then in effect. Any such increase shall remain in effect until January 1, 2006 and thereafter until another fee arrangement is agreed upon by the Trustee and the Company. Notwithstanding the foregoing, in the event of a material change in the custodial services of the Trustee under the Trust Agreement or if the Trustee is required to perform material services in addition to the Trustee's custodial responsibilities and responsibilities pursuant to the investment directions given to the Trustee by the Company or any investment manager appointed by the Company pursuant to Section 2.2 of the Plan, the Trustee reserves the right to receive additional reasonable compensation as agreed upon with the Company. In the event the Trustee is engaged to provide investment management services (other than cash management services as provided in Section 5 of the Trust Agreement), the Trustee will be entitled to receive additional reasonable compensation as agreed upon with the Company. EX-10.4 8 servagt.txt SERVICE AGT. Exhibit 10.4 SERVICING AGREEMENT Dated as of November 21, 2000 among ARBY'S FRANCHISE TRUST, as Issuer ARBY'S, INC., as the Servicer and BNY MIDWEST TRUST COMPANY, A BANK OF NEW YORK COMPANY, as Indenture Trustee TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS............................................. SECTION 1.1 Certain Definitions........................ SECTION 1.2 Other Defined Terms........................ SECTION 1.3 Other Terms................................ SECTION 1.4 Computation of Time Periods................ ARTICLE 2 ADMINISTRATION AND SERVICING OF FRANCHISE ASSETS. SECTION 2.1 The Servicer to Act as the Servicer........ SECTION 2.2 Collection of Franchisee Payments and Remittances; Lock-Box Accounts; Collection Account.................................... SECTION 2.3 Records.................................... SECTION 2.4 Administrative Duties of Servicer.......... SECTION 2.5 No Offset.................................. SECTION 2.6 Servicing Compensation..................... SECTION 2.7 Indemnification............................ SECTION 2.8 Nonpetition Covenant....................... SECTION 2.9 Consent of Franchisor and Consent to Assignment................................. ARTICLE 3 STATEMENTS AND REPORTS.................................. SECTION 3.1 Reporting by the Servicer.................. SECTION 3.2 Appointment of Independent Accountant...... SECTION 3.3 Annual Accountants' Reports................ SECTION 3.4 Available Information...................... ARTICLE 4 THE SERVICER............................................ SECTION 4.1 Representations and Warranties Concerning the Servicer............................... SECTION 4.2 Existence; Status as the Servicer.......... SECTION 4.3 Performance of Obligations................. SECTION 4.4 Merger; Resignation and Assignment......... SECTION 4.5 Certain Covenants of the Servicer.......... ARTICLE 5 DEFAULT................................................. SECTION 5.1 Servicer Termination Events................. SECTION 5.2 No Effect on Other Parties.................. SECTION 5.3 Rights Cumulative........................... ARTICLE 6 MISCELLANEOUS PROVISIONS................................. SECTION 6.1 Termination of Agreement.................... SECTION 6.2 Amendment................................... SECTION 6.3 Governing Law............................... SECTION 6.4 Notices..................................... SECTION 6.5 Severability of Provisions.................. SECTION 6.6 Delivery Dates.............................. SECTION 6.7 Binding Effect; Limited Rights of Others.... SECTION 6.8 Limitation of Liability of Wilmington Trust Company and the Certificateholder........... SECTION 6.9 Article and Section Headings................. SECTION 6.10 Concerning the Indenture Trustee............. SECTION 6.11 Counterparts................................. EXHIBIT A - Duties of the Servicer EXHIBIT B - Monthly Servicer's Certificate EXHIBIT C - Quarterly Servicer's Certificate SERVICING AGREEMENT, dated as of November 21, 2000 (the "Agreement"), by and among ARBY'S FRANCHISE TRUST, a Delaware statutory business trust (herein, together with its successors and assigns, called the "Issuer"), ARBY'S, INC., a Delaware corporation (herein, together with its successors and assigns, collectively called "Arby's" or the "Servicer"), and BNY Midwest Trust Company, a Bank of New York Company, an Illinois banking corporation, as indenture trustee (the "Indenture Trustee"). PRELIMINARY STATEMENT WHEREAS, the Issuer has entered into an Indenture (the "Indenture"), dated as of the date of this Agreement, with the Indenture Trustee and Ambac Assurance Corporation, a Wisconsin stock insurance corporation (the "Insurer"), pursuant to which the Issuer has issued its Notes (the "Notes"), on the terms and in the amounts described therein. Pursuant to the Indenture, as security for the indebtedness represented by the Notes, the Issuer is and will be Granting to the Indenture Trustee on behalf of the Noteholders, a security interest in the Collateral, which includes, among other things, the Franchise Assets, the Issuer's rights under this Agreement, the Collection Account and all proceeds of the foregoing. WHEREAS, pursuant to the Amended and Restated Trust Agreement, dated as of November 21, 2000 (the "Trust Agreement"), between Wilmington Trust Company, a Delaware banking corporation (the "Issuer Trustee"), and Arby's Finance, LLC, a special purpose Delaware limited liability company (the "Certificateholder"), the Issuer has issued a Certificate (the "Certificate") to the Certificateholder evidencing the beneficial interests in the Issuer. WHEREAS, the parties desire to enter into this Agreement to provide, among other things, for the servicing of the Franchise Assets by the Servicer. NOW THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS SECTION 1.1 Certain Definitions. For all purposes of this Agreement, capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. In addition, the following terms shall have the following meanings: "Account Control Agreement" means the account control agreement among the Servicer, the Indenture Trustee, the Insurer, the Issuer and the Lock Box Bank. "Agreement" has the meaning set forth in the preamble. "American Lock-Box Accounts" means Account # 65546 (Charlotte) and # 840074 (Dallas) at the Lock-Box Bank held in the name of the Issuer, and pledged to the Indenture Trustee. "American Lock-Box Bank" means Bank of America, N.A. or such other bank designated by the Issuer and consented to by the Controlling Party. "American Servicer" means Arby's. "Arby's" has the meaning set forth in the preamble. "Canadian Lock-Box Account" means Account # 00002-1293349 at the Canadian Lock-Box Bank held in the name of Arby's of Canada, Inc. which has been assigned to the Issuer, and pledged to the Indenture Trustee. "Canadian Lock-Box Bank" means Royal Bank of Canada or such other bank designated by the Issuer and consented to by the Controlling Party. "Canadian Servicer" means Arby's of Canada, Inc., an Ontario corporation. "Capital Stock" means, with respect to any Person, (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate or capital stock, including, without limitation, shares of preferred or preference stock of such Person, (ii) all partnership interests (whether general or limited) in such Person, (iii) all membership interests or limited liability company or partnership interests in such Person, and (iv) all other equity ownership interests in such Person of any other type. "Closing Date" means November 21, 2000. "Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "Controlled Group" means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with the Servicer, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA. "Delinquent Franchisee" means a Franchisee who has not made its Franchisee Payments by the end of the Collection Period in which such Franchisee Payments were due. "Environmental Laws" has the meaning set forth in Section 4.1(k) hereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections. "Franchise Agreement" means a franchise agreement with the Franchisor pursuant to which a Franchisee is licensed to operate an Arby's(R) branded restaurant in the United States subject to the terms and conditions contained therein. "Franchise Assets" has the meaning specified in the Indenture, provided, however, as used herein (other than in Section 4.5(b) hereof or where the term "Franchise Assets" is preceded by the word "Canadian"), "Franchise Asset" shall only refer to "Franchise Assets" located in the United States. "Franchise Document" means each Franchise Agreement, LOA and MDA. "Franchisee" means the Person identified as franchisee pursuant to a Franchise Agreement. "Franchisor" means, prior to the date hereof, Arby's, Inc., a Delaware corporation, and subsequent to the date hereof, the Issuer. "Independent Accountants" has the meaning set forth in Section 3.2 hereof. "Insurance Policy" means any insurance policy or policies maintained by a Franchisee in accordance with the requirements of its Franchise Agreement. "Insurance Proceeds" means any amounts received upon settlement of a claim field under an Insurance Policy, net of direct fees, costs (exclusive of overhead) and disbursements incurred in connection with the collection thereof. "LOA" means a License Option Agreement between the Franchisor and an optionee which gives the optionee the right to become a Franchisee with respect to an Arby's(R) branded restaurant located on a specified site within the United States in accordance with the terms and conditions contained therein. "Material Adverse Effect" shall mean, (i) with respect to the Servicer, a material adverse effect on (x) its condition, financial or otherwise, (y) its earnings or business affairs, or (z) its ability to own its properties or to conduct its business or to enter into or perform its obligations under the Servicing Agreement, and (ii) with respect to the Trust Estate, a material adverse effect with respect to (A) any material Arby's IP individually or with respect to the Arby's IP taken as a whole, the enforceability of the terms thereof, the likelihood of the payment of the amounts required with respect thereto in accordance with the terms thereof, the value thereof, the transferability or the transfer thereof to the Issuer or the ownership thereof and the security interest in the rights thereto Granted under the License Agreement by the IP Holder or Granted under the terms of the Indenture by the Issuer and (B) the existing and reasonably anticipated future Franchise Assets taken as a whole, the enforceability of the terms thereof, the likelihood of the payment of the amounts required with respect thereto in accordance with the terms thereof, the value thereof, the transferability or the transfer thereof to the Issuer or the ownership thereof and the security interest in the rights thereto Granted under the Indenture by the Issuer. For avoidance of doubt, the fact that the Debt Service Coverage Ratio is then, or would remain, at 1.2x or greater shall not, solely in and of itself, preclude or negate the determination of a Material Adverse Effect in any instance. "MDA" means a Market Development Agreement between the Franchisor and a prospective Franchisee pursuant to which the prospective Franchisee commits to build two or more Arby's(R) branded restaurants within a specified territory in the United States. "Monthly Servicer's Certificate" means the certificate prepared by the Servicer in the form of Exhibit B hereto. "Pension Plan" means a "pension plan," as such term is defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multi- employer plan as defined in section 4001(a)(3) of ERISA), and to which the Servicer or any of its subsidiaries or any corporation, trade or business that is, along with the Servicer or any of its subsidiaries, a member of a trade or business that is, along with the Servicer or any of its subsidiaries, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA. "Permitted Encumbrances" has the meaning specified in the Indenture. "Principal Reinsurer" has the meaning specified in the Indenture. "Quarterly Servicer's Certificate" means the certificate prepared by the Servicer in the form of Exhibit C hereto. "Servicing Fee" has the meaning specified in the Indenture. "Servicing Standard" shall mean standards maintained by the Servicer that are at least equal to the standards in place on the Closing Date ("Current Practices") and are conducted in a manner which shall be normal and usual in its Current Practices and to the extent of changed circumstances, practices and technologies, the procedures which the Servicer would use if the Franchise Assets were owned by the Servicer. "Stock Option Plan" means a stock option plan that may be adopted by the Servicer providing for the granting of options to acquire the voting Capital Stock of the Servicer, as amended, supplemented, amended and restated or otherwise modified from time to time. "Subsidiary" means, with respect to the Servicer, a direct or indirect subsidiary of the Servicer, including any corporation, limited liability company or business trust. "System" means the system of restaurants located in the United States and Canada operated under the Arby's(R) brand concept franchised by Arby's, prior to the Closing Date, and by the Issuer, subsequent to the Closing Date. "Welfare Plan" means a "welfare plan," as such term is defined in section 3(1) of ERISA (other than a multi-employer plan as defined in Section 4001(a)(3) of ERISA). SECTION 1.2 Other Defined Terms. (a) Each term defined in the singular form in Section 1.1 or elsewhere in this Agreement shall mean the plural thereof when the plural form of such term is used in this Agreement and each term defined in the plural form in Section 1.1 shall mean the singular thereof when the singular form of such term is used herein. (b) The words "hereof," "herein," "hereunder" and similar terms when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, subsection, schedule and exhibit references herein are references to articles, sections, subsections, schedules and exhibits to this Agreement unless otherwise specified. SECTION 1.3 Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9. SECTION 1.4 Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding." ARTICLE 2 ADMINISTRATION AND SERVICING OF FRANCHISE ASSETS SECTION 2.1 The Servicer to Act as the Servicer. (a) Engagement of the Servicer. The Servicer is hereby authorized to and shall service and administer the Franchise Assets in accordance with the terms of this Agreement (including Exhibit A hereto) and each related Franchise Document. The Servicer shall have full power and authority, acting alone and subject only to the specific requirements and prohibitions of this Agreement and the Indenture, to do and take any and all actions, or to refrain from taking any such actions, and to do any and all things in connection with such servicing and administration which it may deem necessary or desirable, including, without limitation, calculating and compiling information required in connection with any report to be delivered pursuant to this Agreement, and the performance of certain duties related to the Franchise Assets, as contemplated by Exhibit A hereto. Without limiting the generality of the foregoing, but subject to the provisions of the Indenture and this Agreement, including, without limitation, Section 2.9 hereof, the Servicer is hereby authorized and empowered to execute and deliver, in the Servicer's own name or in the name of the Issuer, on behalf of the Issuer and Indenture Trustee, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Franchise Assets, including, without limitation, consents to sales, transfers or encumbrances of the Franchise Documents by a Franchisee or assignments and assumptions of the Franchise Assets in accordance with the terms thereof. The Servicer agrees that its servicing of the Franchise Assets shall be carried out as provided in accordance with the Servicing Standard. Additionally, the Servicer agrees to perform its duties and obligations under the Indenture, if any. (b) Actions to Perfect Security Interests. The Servicer shall take all actions that are necessary or desirable to maintain continuous perfection and priority (subject to Permitted Encumbrances) of the Issuer's interest in the Franchise Assets. Without limiting the foregoing, the Servicer shall file or cause to be filed the financing statements on Form UCC-1 and assignments of financing statements on Form UCC-3 required to be filed in connection with each Contribution Agreement relating to the Franchise Assets, the Indenture and the transactions contemplated thereby. (c) Franchisee Insurance. The Servicer acknowledges that to the extent that it is named as a "loss payee" or "additional insured" under any Insurance Policies, it is so named in its capacity as the Servicer, and the Servicer, in accordance with procedures contemplated by Exhibit A, shall promptly remit to the Indenture Trustee for deposit in the Collection Account any Insurance Proceeds received by the Servicer under the Insurance Policies. The Servicer shall use its commercially reasonable efforts to cause the Issuer to be named as "loss payee" under all Insurance Policies at the time of renewal or replacement. (d) Servicer's Insurance. The Servicer agrees to use commercially reasonable efforts to maintain adequate insurance with reputable insurers, to the extent available, including casualty, public liability, fiduciary liability, workers compensation and employment practices liability policies, in at least such forms and amounts and against such risks as were maintained by the Servicer on the Closing Date. Such insurance will cover the Issuer as an additional insured. SECTION 2.2 Collection of Franchisee Payments and Remittances; Lock-Box Accounts; Collection Account. (a) Collection of Payments. The Servicer shall cause the collection of all payments called for under the terms and provisions of each Franchise Document with parties in both the United States and Canada in accordance with the Servicing Standard. The Servicer shall cause all collections to be deposited in the American Lock-Box Accounts or the Canadian Lock-Box Account, as applicable, which, pursuant to the Account Control Agreements or other direction to the American Lock-Box Bank and/or Canadian Lock-Box Bank, shall be swept daily to the Collection Account. In addition to any other customary services which the Servicer may perform, including those set forth in Exhibit A hereto, the Servicer shall perform the following servicing and collection supervision activities: (1) perform, or cause to be performed, standard accounting services, and perform general recordkeeping services, with respect to the Franchise Agreements; (2) respond to any telephone or written inquiries of Franchisees concerning the Franchise Agreements; (3) keep Franchisees informed of the proper place and method for making payments with respect to the Franchise Agreements; (4) contact Franchisees to effect collection and to discourage delinquencies in the payment of monies due under the Franchise Agreements, doing so by any lawful means, including, but not limited to, the following: (i) transmittal of routine past due notices; (ii) preparing and mailing collection letters; (iii) contacting delinquent Franchisees by telephone to encourage payment; (iv) transmittal of reminder notices to delinquent Franchisees; and (v) initiating and pursuing termination or enforcement actions deemed necessary by the Servicer; (5) report to Franchisees such tax information, if any, as may be required by law; (6) provide written notice to the Indenture Trustee and Controlling Party with respect to any increase in the percentage limit for Advertising Fees and Canadian Advertising Fees as specified in the definitions thereof, and, if requested by either the Controlling Party or the Indenture Trustee, documentation evidencing such increase as may be reasonably requested by the Indenture Trustee or the Controlling Party; and (7) take such other action as may, in the reasonable discretion of the Servicer, be necessary or appropriate to carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this Section 2.2. (b) Deposit of Misdirected Funds; No commingling; Excluded Fees. The Servicer shall promptly remit to the Indenture Trustee for deposit in the Lock-Box Account by the third Business Day immediately following receipt thereof by the Servicer and in the form received, all payments received by the Servicer in respect of the Franchise Assets incorrectly sent to the Servicer by, or on behalf of, a Franchisee. The Servicer shall not commingle with its own assets and shall keep separate, segregated and appropriately marked and identified all Franchise Assets or any property comprising any part of the Trust Estate, and for such time, if any, as such Franchise Assets or property are in the possession or control of the Servicer, the Servicer shall hold the same in trust for the benefit of the Indenture Trustee, the Noteholders (or, following termination of the Indenture, the Issuer and the Certificateholder) and the Insurer. Additionally, the Servicer shall notify the Indenture Trustee in writing of any Misdirected Payments or Excluded Fees deposited into the Collection Account, and arrange for the prompt remittance by the Indenture Trustee of such funds from the Collection Account to the Servicer. SECTION 2.3 Records. The Servicer shall retain all data (including, without limitation, computerized records) relating directly to, or maintained in connection with, the servicing of the Franchise Assets at the address of the Servicer set forth in Section 6.4 or, upon 30 days' notice to the Issuer, the Indenture Trustee and the Insurer, at such other place where the servicing offices of the Servicer are located, and shall give the Indenture Trustee and the Insurer access to all such data at all reasonable times upon reasonable notice, and, while a Servicer Termination Event shall be continuing, the Servicer shall, on demand of the Indenture Trustee, deliver to the Indenture Trustee all data in its possession or under its control (including, without limitation, computerized records) necessary for the servicing of the Franchise Assets. If the rights of the Servicer shall have been terminated in accordance with Section 5.1 or if this Agreement shall have been terminated pursuant to clause (ii) of Section 6.1, the Servicer shall, upon demand of the Indenture Trustee or the Insurer, in the case of a termination pursuant to Section 5.1, or of the Issuer pursuant to clause (ii) of Section 6.1, deliver to the demanding party all data in its possession or under its control (including, without limitation, computerized records) necessary for the servicing of the Franchise Assets. In addition to delivering such data, the Servicer shall, at its expense (or at the expense of the Issuer in the event of termination under clause (ii) of Section 6.1), use its commercially reasonable efforts to effect the orderly and efficient transfer of the servicing of the Franchise Assets to the party that will be assuming responsibility for such servicing, including, without limitation, directing Franchisees to remit Franchisee Payments and all other payments in respect of the Franchise Assets to an account or address designated by such new servicer. The provisions of this Section 2.3 shall not require the Servicer to transfer any proprietary material or computer programs unrelated to the servicing of the Franchise Assets. SECTION 2.4 Administrative Duties of Servicer. (a) Duties with Respect to the Transaction Documents. The Servicer shall perform the duties of the Issuer and the Issuer Trustee under the Transaction Documents except for those duties that are (i) to be explicitly performed by the Issuer Trustee under the Trust Agreement and (ii) those duties that are required to be performed by a Delaware trustee pursuant to Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. ss. 3801 et seq. In furtherance of the foregoing, the Servicer shall consult with the Issuer Trustee as the Servicer deems appropriate regarding the duties of the Issuer and the Issuer Trustee under the Transaction Documents. The Servicer shall monitor the performance of the Issuer and the Issuer Trustee and shall advise the Issuer Trustee when action is necessary to comply with the Issuer's or the Issuer Trustee's duties under the Transaction Documents. The Servicer shall prepare for execution by the Issuer Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or the Issuer Trustee to prepare, file or deliver pursuant to the Transaction Documents. (b) Duties with Respect to the Issuer. (i) In addition to the duties of the Servicer set forth in this Agreement or any of the Transaction Documents, the Servicer shall perform such calculations and shall prepare for execution by the Issuer or the Issuer Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to state and federal securities laws. In accordance with the directions of the Issuer or the Issuer Trustee, the Servicer shall administer, perform or supervise the performance of such other activities in connection with the Issuer as are not covered by any of the foregoing provisions and as are expressly requested by the Issuer or the Issuer Trustee and are reasonably within the capability of the Servicer. (ii) Notwithstanding anything in this Agreement or any of the Transaction Documents to the contrary, the Servicer shall be responsible for promptly notifying the Issuer Trustee and the Indenture Trustee in the event that the Servicer has knowledge that any withholding tax is imposed on the Issuer's payments (or allocations of income) to a Certificateholder. Any such notice shall be in writing and specify the amount of any withholding tax required to be withheld by the Issuer Trustee or the Indenture Trustee pursuant to such provision. (c) Tax Matters. The Servicer shall prepare and file, on behalf of the Issuer, all tax returns, tax elections, financial statements and such annual or other reports of the Issuer as are necessary for the preparation of tax reports as required by the Indenture. All tax returns will be signed by the Servicer on behalf of the Issuer. (d) Records. The Servicer shall maintain appropriate books of account and records relating to services performed under this Agreement, which books of account and records shall be accessible for inspection by the Issuer Trustee during normal business hours and upon reasonable Notice. (e) Additional Information to be Furnished to the Issuer. The Servicer shall furnish to the Issuer Trustee from time to time such additional information regarding the Issuer or the Transaction Documents as the Issuer Trustee shall reasonably request. SECTION 2.5 No Offset. The obligations of the Servicer under this Agreement shall not be subject to, and the Servicer hereby waives, any defense, counterclaim or right of offset which the Servicer has or may have against the Issuer, the Indenture Trustee or the Insurer, whether in respect of this Agreement, any Franchise Asset or otherwise. SECTION 2.6 Servicing Compensation. As compensation for the performance of its obligations under this Agreement, the Servicer shall be entitled to receive the Servicing Fee from the Issuer on each Payment Date out of amounts released by the Indenture Trustee from the Collection Account on such Payment Date pursuant to Section 10.03 of the Indenture. SECTION 2.7 Indemnification. (a) The Servicer agrees to indemnify and hold the Issuer, the Insurer, the Principal Reinsurer and the Indenture Trustee (and their respective officers, directors, employees and agents) (each an "Indemnitee") harmless against all claims, losses, penalties, fines, forfeitures, legal fees, and related costs and judgments and other costs, fees and reasonable expenses (collectively, "Liabilities") that any of them may incur because of the failure of the Servicer to perform its duties to service and administer the Franchise Assets in compliance with this Agreement as a result of the Servicer's negligence or willful misconduct. Any Indemnitee which proposes to assert the right to be indemnified under this Section 2.7 will promptly, after receipt of notice of the commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against the Servicer under this Section 2.7, notify the Servicer of the commencement of such action, suit or proceeding, enclosing a copy of all papers served. In the event that any action, suit or proceeding shall be brought against any Indemnitee and it shall notify the Servicer of the commencement thereof, the Servicer shall be entitled to participate in, and to the extent that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee, and after notice from the Servicer to such Indemnitee of its election to assume the defense thereof, the Servicer shall not be liable to such Indemnitee for any legal expenses subsequently incurred by such Indemnitee in connection with the defense thereof except as set forth in the next sentence. The Indemnitee shall have the right to employ its own counsel in any such action the defense of which is assumed by the Servicer in accordance with this subsection (a), but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless the employment of counsel by such Indemnitee has been specifically authorized by the Servicer, or unless there is a conflict of interest with other counsel; provided, that the Insurer and the Principal Reinsurer shall utilize one joint counsel to represent them both in the event that such counsel fees are, pursuant to this sentence, to be paid by the Servicer; provided, further, that in the event that either the Insurer or the Principal Reinsurer determines that the utilization of joint counsel is unacceptable, the Insurer and the Principal Reinsurer may utilize separate counsel and the Principal Reinsurer shall bear the expense of separate counsel that it may choose to retain in connection with such action. An Indemnitee shall not settle or compromise any claim covered pursuant to this Section 2.7 without the prior written consent of the Servicer. The payment obligations of the Servicer under this Section shall survive the termination of this Agreement or the earlier resignation or removal of any party hereto. (b) Notwithstanding the foregoing Section 2.7(a), the Servicer shall not be obligated to make any payments to the Principal Reinsurer (or any of its officers, directors, employees or agents) pursuant to Section 2.7(a) if and to the extent such payments (i) would be in respect of Liabilities incurred by the Insurer and/or the Principal Reinsurer as a result of a payment made under or in respect of the Policy and the reimbursement or recovery thereof to or by the Insurer and/or the Principal Reinsurer, or (ii) would be in respect of Liabilities incurred by the Insurer and the Principal Reinsurer on either a joint or joint and several basis, and such indemnification payments would exceed, by reason of duplication, the amount which the Servicer would be obligated to pay to the Insurer or its officers, directors, employees and agents, without giving effect to any indemnification obligation otherwise owed to the Principal Reinsurer (or any of its officers, directors, employees or agents) pursuant to Section 2.7(a). SECTION 2.8 Nonpetition Covenant. The Servicer shall not, prior to the date that is one year and one day after the payment in full of the Outstanding Principal Amount of the Notes, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against the Issuer under any Insolvency Law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. SECTION 2.9 Consent of Franchisor and Consent to Assignment. Subject to the Servicing Standard, the Servicer shall have the authority to grant consents of the Franchisor required under the Franchise Assets; provided that the Servicer may only consent to the assignment, renewal, modification or termination of any Franchise Asset and the release of the existing Franchisee if such consent and release is not in conflict with the Servicing Standard. ARTICLE 3 STATEMENTS AND REPORTS SECTION 3.1 Reporting by the Servicer. (a) Monthly Servicer's Certificate. Not later than 3:00 p.m. on each Accounting Date, the Servicer shall transmit the Monthly Servicer's Certificate to the Issuer, the Certificateholder, the Indenture Trustee and the Insurer. (b) Quarterly Servicer's Certificate. Not later than 3:00 p.m. on the fiftieth (50th) day after the end of each of the Servicer's fiscal quarters, the Servicer shall transmit the Quarterly Servicer's Certificate to the Issuer, the Certificateholder, the Indenture Trustee and the Insurer. (c) Termination Notices. The Servicer shall send the Indenture Trustee a copy of any notices of termination sent by the Servicer to any Franchisee. (d) Additional Information. The Servicer shall send to the Indenture Trustee and the Insurer such other information concerning the Franchise Assets as the Indenture Trustee or the Insurer shall reasonably request from time to time as necessary to perform the Indenture Trustee's obligations under the Indenture or the Insurer's obligations under the Insurance Policy. SECTION 3.2 Appointment of Independent Accountant. Within sixty (60) days of the Closing Date, the Issuer shall appoint a firm of independent accountants of recognized national reputation and reasonably acceptable to the Indenture Trustee and the Insurer to serve as the independent accountants ("Independent Accountants") for purposes of preparing and delivering the reports required by Section 3.3. It is hereby acknowledged that the accounting firm of Deloitte & Touche LLP is acceptable for purposes of serving as Independent Accountants. The Issuer may not remove the Independent Accountants without first giving 90 days prior written notice to the Independent Accountants, with a copy of such notice also given concurrently to the Indenture Trustee, the Insurer and the Servicer. Upon any resignation by such firm or removal of such firm, the Issuer shall promptly appoint, by Issuer order delivered to the Indenture Trustee, a successor thereto that shall also be a firm of independent accountants of recognized national reputation to serve as the Independent Accountants hereunder. If the Issuer shall fail to appoint a successor to a firm of Independent Accountants which has resigned or been removed within 30 days after the effective date of such resignation or removal, the Controlling Party shall promptly appoint a successor firm of independent accountants of recognized national reputation reasonably satisfactory to the Indenture Trustee to serve as the Independent Accountants hereunder. The fees of such Independent Accountants and its successor shall be payable by the Servicer, and any fees not so paid by the Servicer shall be paid by the Indenture Trustee on behalf of the Servicer, subject to the Indenture Trustee's right of reimbursement therefor pursuant to the Indenture. SECTION 3.3 Annual Accountants' Reports. On or before 120 days after (A) for each fiscal year from the Closing Date through and including fiscal year 2003, each of (i) the end of each fiscal June and (ii) the end of each fiscal year, and (B) for each fiscal year thereafter, the end of each fiscal year, the Servicer shall deliver to the Issuer, the Indenture Trustee, the Insurer and the Rating Agencies a separate report, prepared by the Independent Accountants, to the effect that their examination (i) was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as they considered necessary in the circumstances and (ii) included, if applicable, certain agreed-upon procedures in accordance with standards established by the American Institute of Certified Public Accountants, relating to the servicing of the Franchise Assets based on procedures determined by the Insurer, and if the Insurer is no longer the Controlling Party, the Indenture Trustee, to assist the Controlling Party in determining that such servicing has been conducted in compliance with this Agreement. The nature, scope and design of the procedures, will not constitute an audit made in accordance with generally accepted auditing standards, the objective of which is the issuance of an opinion. SECTION 3.4 Available Information. The Servicer shall make available on behalf of the Issuer the information requested by prospective purchasers necessary to satisfy the requirements of Rule 144A under the 1933 Act and the Investment Company Act of 1940, as amended. For as long as the Notes are outstanding, copies of the following items shall be available to holders and prospective purchasers of Notes upon request to the Servicer: (a) all Monthly Servicer's Certificates and Quarterly Servicer's Certificates delivered to the Indenture Trustee since the initial issuance of the Notes; and (b) All accountants' reports delivered or caused to be delivered by the Servicer to the Indenture Trustee pursuant to this Agreement since the initial issuance of the Notes. Upon request, the Servicer shall make available, upon reasonable advance notice and at the expense of the requesting party, copies of the above items to any direct or beneficial holder of Notes and to prospective transferees of Notes; provided that the Servicer shall require (a) in the case of a direct or beneficial holder of Notes, a confirmation executed by the requesting party generally to the effect that such party is a direct or beneficial holder of Notes, as applicable, is requesting the information solely for use in evaluating such party's investment in the Notes and will otherwise keep such information confidential and (b) in the case of a prospective transferee, the designation of the requesting party as a prospective transferee by a Noteholder and a confirmation executed by the requesting party generally to the effect that such party is a prospective transferee of Notes, is requesting the information solely for use in evaluating a possible investment in Notes, will otherwise keep such information confidential and that such party is eligible to purchase the Notes based on the transfer restrictions set forth in Section 2.05 of the Indenture. ARTICLE 4 THE SERVICER SECTION 4.1 Representations and Warranties Concerning the Servicer. The Servicer represents and warrants to the Issuer and the Indenture Trustee, effective as of the Closing Date, as follows: (a) Organization and Good Standing. The Servicer has been duly organized and is validly existing and in good standing under the laws of the state of its formation and organization, has qualified to do business and is in good standing in each jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary and where failure to so qualify would have a material and adverse effect on its ability to perform its obligations hereunder, and has full power, authority and legal right to own its property, to carry on its business as presently conducted, and to enter into and perform its obligations under this Agreement. (b) Power and Authority; No Conflicts. The execution and delivery by the Servicer of this Agreement and its performance of, and compliance with, the terms hereof are within the power of the Servicer and have been duly authorized by all necessary corporate action on the part of the Servicer. Neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated to be consummated by the Servicer, nor compliance with the provisions hereof, will conflict with or result in a material breach of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Servicer or its properties or the charter or bylaws or other organizational documents and agreements of the Servicer, or any of the provisions of any indenture, mortgage, leases, contract or other instrument to which the Servicer is a party or by which it or its property is bound or result in the creation or imposition of any material lien, charge or encumbrance upon any of its property pursuant to the terms of any such indenture, mortgage, leases, contract or other instrument. (c) Consents. Except for registrations as a franchise broker or franchise sales agent as may be required under state franchise statutes and regulations, the Servicer is not required to obtain the consent of any other party or the consent, license, approval or authorization, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery or performance by the Servicer of this Agreement, or the validity or enforceability of this Agreement against the Servicer. (d) Due Execution and Delivery. This Agreement has been duly executed and delivered by the Servicer and constitutes a legal, valid and binding instrument enforceable against the Servicer in accordance with its terms (subject to applicable Insolvency Laws and to general principles of equity). (e) No Litigation. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Servicer, threatened against or affecting the Servicer, before or by any court, administrative agency, arbitrator or governmental body with respect to the Servicer or any of the transactions contemplated by this Agreement or the Indenture (i) asserting the illegality, invalidity or unenforceability, or seeking any determination or ruling that would affect the legality, binding effect, validity or enforceability of this Agreement or (ii) which could reasonably be expected to materially and adversely affect it or its business, assets, operations or condition, financial or otherwise, or the Servicer's ability to perform its obligations under this Agreement. The Servicer is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the consummation of the transactions or performance by the Servicer contemplated by this Agreement or the Indenture. (f) Due Qualification. Except for registrations as a franchise broker or franchise sales agent as may be required under state franchise statutes and regulations, the Servicer has obtained or made all material licenses, registrations, consents, approvals, waivers and notifications of creditors, lessors and other persons, in each case, in connection with the execution and delivery of this Agreement by the Servicer, and the consummation by the Servicer of all the transactions herein contemplated to be consummated by the Servicer and the performance of its obligations hereunder. (g) No Default. The Servicer is not in default under any agreement, contract, instrument or indenture to which the Servicer is a party or by which it or its properties is or are bound, or with respect to any order of any court, administrative agency, arbitrator or governmental body, which would have a material adverse effect on the transactions contemplated hereunder; and no event has occurred which with notice or lapse of time or both would constitute such a material default with respect to any such agreement, contract, instrument or indenture, or with respect to any such order of any court, administrative agency, arbitrator or governmental body. (h) Taxes. The Servicer has filed or caused to be filed all material tax returns which, to its knowledge, are required to be filed. The Servicer has paid or made adequate provisions for the payment of all taxes shown as due on such returns, and all assessments made against it or any of its property (other than any amount of tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Servicer). The charges, accruals and reserves on the Servicer's books in respect of taxes are, in the Servicer's opinion, adequate. (i) Accuracy of Information. The information contained in the Offering Circular regarding (i) the American Servicer, (ii) the servicing of the Franchise Assets by the American Servicer and (iii) the description of this Agreement therein does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Pension and Welfare Plans. During the twelve- consecutive-month period prior to the date of the execution and delivery of this Agreement, no steps have been taken by the Servicer to terminate any Pension Plan of the Servicer, and no contribution failure has occurred with respect to any such Pension Plan sufficient to give rise to a lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Servicer or any member of the Controlled Group of any liability, fine or penalty which could reasonably be expected to have a material adverse effect on the Servicer's ability to perform its obligations hereunder. Neither the Servicer nor any member of the Controlled Group has any contingent liability with respect to any post-retirement medical benefits under a Welfare Plan, other than (i) liability for continuation coverage described in Part 6 of Subtitle B of Title I of ERISA or other applicable continuation of coverage laws or (ii) liabilities for unfunded medical and death benefits for a limited number of retired employees which could not reasonably be expected to have a material adverse effect on the Servicer's ability to perform its obligations under this Agreement. (k) Environmental Matters. (i) As of the date hereof, the Servicer (A) is in compliance with any and all applicable foreign, federal, state and local laws and regulations, and directives of any Governmental Authority relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (B) has received and will have in full force and effect all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct its businesses and (C) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect on the Servicer. (ii) As of the date hereof there are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a Material Adverse Effect on the Servicer. SECTION 4.2 Existence; Status as the Servicer. The Servicer shall keep in full effect its existence, rights and franchises under the laws of the state of its formation and organization, and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability by the Servicer of the Franchise Assets and this Agreement or to perform its obligations hereunder. SECTION 4.3 Performance of Obligations. (a) Performance of Obligations. The Servicer shall punctually perform and observe all of its obligations and agreements contained in this Agreement in accordance with the terms hereof and as contemplated by the Servicing Standard. (b) Limitations of Responsibility of the Servicer. The Servicer will have no responsibility under this Agreement other than to render the services called for hereunder in good faith and consistent with the Servicing Standard. The Servicer, its affiliates, its directors, officers, shareholders and employees will not be liable to the Issuer, the Insurer, the Issuer Trustee, the Indenture Trustee, the Noteholders or others, except by reason of acts constituting willful misconduct or negligence in the performance of its duties hereunder. (c) Right to Receive Instructions. In the event that the Servicer is unable to decide between alternative courses of action, or is unsure as to the application of any provision of this Agreement or any Transaction Document, or any such provision is, in the good faith judgment of the Servicer, ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement or any Transaction Document permits any determination by the Servicer or is silent or is incomplete as to the course of action which the Servicer is required to take with respect to a particular set of facts, the Servicer may give notice (in such form as shall be appropriate under the circumstances) to the Indenture Trustee and the Issuer Trustee requesting instructions in accordance with the Indenture and Trust Agreement and, to the extent that the Servicer shall have acted or refrained from acting in good faith in accordance with any such instructions received from the Indenture Trustee and the Issuer Trustee (except where the Servicer is acting for the Issuer Trustee pursuant to Section 2.4 or the Issuer Trustee is acting at the direction of an Affiliate of the Servicer), the Servicer shall not be liable on account of such action or inaction to any Person. Subject to the Servicing Standard, if the Servicer shall not have received appropriate instructions from both the Indenture Trustee and the Issuer Trustee within ten days of such notice (or within such shorter period of time as may be specified in such notice) the Servicer may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Transaction Documents, as the Servicer shall deem to be in the best interests of the Indenture Trustee and the Issuer, and the Servicer shall have no liability to any Person for such action or inaction except for the Servicer's own willful misconduct or negligence. (d) No Duties Except as Specified in this Agreement or in Instructions. The Servicer shall not have any duty or obligation to manage, make any payment in respect of, register, record, sell, reinvest, dispose of, create, perfect or maintain title to or any security interest in, or otherwise deal with the Trust Estate, to prepare or file any report or other document, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Servicer is a party, except as expressly provided by the terms of this Agreement and consistent with the Servicing Standard, and no implied duties or obligations shall be read into this Agreement against the Servicer. The Servicer nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any valid liens on any part of the Trust Estate which result from valid claims against the Servicer personally that are not related to the ownership or the administration of the Trust Estate (as defined in the Trust Agreement) or the transactions contemplated by the Transaction Documents. (e) No Action Except Under Specified Documents or Instructions. The Servicer shall not manage, control, use, sell, reinvest, dispose of or otherwise deal with any part of the Trust Estate except (1) in accordance with the powers granted to, and the authority conferred upon, the Servicer pursuant to this Agreement, or (2) in accordance with instructions delivered to the Servicer pursuant hereto. (f) Limitations on the Servicer Liability. Subject to the Servicing Standard, and except for the Servicer's own willful misconduct or negligence, the Servicer shall not be personally liable under any circumstances, including, without limitation: (1) for any error of judgment made in the absence of negligence; (2) for any action taken or omitted to be taken by the Servicer in good faith in accordance with the instructions of the Indenture Trustee and Issuer Trustee (except where the Servicer is acting for the Issuer Trustee pursuant to Section 2.4 or the Issuer Trustee is acting at the direction of an Affiliate of the Servicer) made in accordance herewith; (3) for any representation, warranty, covenant, agreement or indebtedness of the Issuer under the Notes or any Transaction Document (other than for the performance by the Servicer of the Issuer's duties pursuant to Section 2.4 of this Agreement), or for any other liability or obligation of the Issuer; (4) for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by any party hereto other than the Servicer, or for the form, character, genuineness, sufficiency, value or validity of any part of the Trust Estate, or for or in respect of the validity or sufficiency of the Transaction Documents; and (5) for any action or inaction of the Indenture Trustee or the performance of, or the supervision of the performance of, any obligation under this Agreement or any Transaction Document that is required to be performed by the Indenture Trustee or the Issuer Trustee (except as performed by the Servicer pursuant to Section 2.4 hereof) under any Transaction Document. (g) No provision of this Agreement (other than the last sentence of paragraph (d) above) shall require the Servicer to expend or risk its personal funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder, if the Servicer shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it. Notwithstanding the foregoing, the Servicer shall be obligated to perform its obligations hereunder, consistent with the Servicing Standard, notwithstanding the fact that the Servicer may not be entitled to be reimbursed for all of its expenses incurred in connection with its obligations hereunder as a result of the application of any limit on amounts payable pursuant to the definition of Servicing Fee. (h) Reliance. The Servicer may conclusively rely on, and shall be protected in acting or refraining from acting when doing so, in each case in accordance with any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Servicer may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the manner or ascertainment of which is not specifically prescribed herein, the Servicer may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or any assistant treasurer or the secretary or any assistant secretary of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Servicer for any action taken or omitted to be taken by it in good faith in reliance thereon. (i) Consultations with Third Parties; Advice of Counsel. In the exercise and performance of its duties and obligations hereunder or under any of the Transaction Documents, the Servicer (i) may act directly or through agents (in compliance with Section 4.4(b) and any other requirement hereunder) or attorneys pursuant to agreements entered into with any of them and (ii) may, at the expense of the Servicer, consult with counsel, accountants and other professionals or experts selected and monitored by the Servicer in the absence of negligence, and the Servicer shall not be liable 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 professionals or experts. (j) Independent Contractor. In performing its obligations as servicer hereunder the Servicer acts solely as an independent contractor of the Issuer. Nothing in this Agreement shall, or shall be deemed to, create or constitute any joint venture, partnership, employment, or any other relationship between the Issuer on the one hand, and the Servicer on the other hand, other than the independent contractor contractual relationship established hereby. The Servicer shall not be and shall not be deemed to be liable for any acts or obligations of the Issuer (except as performed or required to be performed by the Servicer pursuant to Section 2.4 hereof), the Insurer or the Indenture Trustee and, without limiting the foregoing, the Servicer shall not be liable under or in connection with the Notes. The Servicer shall not be responsible for any amounts required to be paid by the Indenture Trustee under or pursuant to the Indenture. SECTION 4.4 Merger; Resignation and Assignment. (a) Preservation of Existence. The Servicer may not merge into any corporation or convey, transfer or lease substantially all of its assets, unless and until (i) the Servicer's successor or a new servicer is willing to service the Franchise Assets and enter into a servicing agreement with the Issuer and Indenture Trustee in form and substance substantially similar to this Agreement; (ii) the Controlling Party has consented to such successor in its reasonable discretion and (iii) the Rating Agencies confirm that the selection of such successor or new servicer, in and of itself, will not result in the downgrading of any rating assigned to the Notes by the Rating Agencies. Notwithstanding anything to the contrary contained in this Section 4.4(a), the Servicer shall be permitted to reorganize its corporate form from a corporation to a limited liability company without having to satisfy any of the requirements of the preceding sentence. (b) Resignation; Subservicing. The Servicer may resign or engage any other Person as subservicer to perform the Servicer 's duties hereunder, or assign this Agreement to any other Person; provided that no subservicing arrangement, assignment or resignation shall be effective unless and until (i) it receives the consent of the Controlling Party in its reasonable discretion; (ii) a subservicer or successor servicer selected by the Controlling Party executes and delivers an agreement to perform and observe, or in the case of an assignment, an assumption by such successor entity of the due and punctual performance and observance of, each covenant and condition to be performed or observed by the Servicer under this Agreement; and (iii) the Rating Agencies confirm that such servicing or subservicing agreement, or assignment and assumption by such new servicer, in and of itself, will not result in the downgrading of any rating assigned to the Notes. From and after such effectiveness, the subservicer or successor servicer shall be, to the extent of the subservicing arrangement or assignment, "the Servicer" hereunder. Except as provided in the first sentence of this Section 4.4(b), the Servicer may not assign this Agreement or any of its rights, powers, duties or obligations hereunder. (c) Term of Agreement. Except as provided in Sections 4.4(a) and (b), the duties and obligations of the Servicer under this Agreement shall continue until this Agreement shall have been terminated as provided in Section 6.1, and shall survive the exercise by the Issuer or the Indenture Trustee of any right or remedy under this Agreement, or the enforcement by the Issuer, the Indenture Trustee, or any Noteholder of any provision of the Indenture, the Notes or this Agreement. SECTION 4.5 Certain Covenants of the Servicer. (a) Indebtedness. The Servicer shall not incur Indebtedness (including guaranties or pledges of its property) other than (i) trade debt incurred in the ordinary course of business, (ii) debt and contingent liabilities, in existence on the date hereof, (iii) additional debt for working capital or capital improvements and debt incurred in connection with amounts owed to holders of stock options issued pursuant to the Stock Option Plan, in all cases not in excess of $10,000,000 in the aggregate outstanding at any time, (iv) debt incurred by the Servicer from an Affiliate or a third party in connection with any loans or capital contributions made directly or indirectly to the Issuer to refinance or discharge the Notes in whole or, with respect to any discharge or refinancing of the Notes in part, on a subordinated basis to any debt outstanding to third parties having an enforceable claim against the Servicer (the terms of which subordination shall include an express acknowledgment and agreement that (A) such debt shall not constitute a claim against the Servicer while the assets of the Servicer, available for application to the satisfaction thereof after satisfaction of such other debt to third parties, are insufficient, (B) to the extent such debt does not constitute such a claim, such Affiliate or third party, as the case may be, shall not exercise any legal right or remedy against the Servicer in seeking repayment or recovery of any such amount, and (C) such Affiliate or third party, as the case may be, for so long as the Indenture shall not have been satisfied and discharged, shall not commence, or join any other Person in commencing, any bankruptcy or other insolvency-related proceeding against the Servicer, and (v) debt incurred in connection with any indemnification obligations of the Servicer. (b) Business Operations. The Servicer shall not to engage in any business other than (i) the performance of its obligations under this Agreement, (ii) the ownership and/or licensing of Arby's non-United States and non-Canadian intellectual property to existing and future Affiliates and franchisees, (iii) the ownership of existing non-United States and non-Canadian Franchise Assets for a period not exceeding 60 days after the date hereof or the assignment thereof to Arby's Brands, LLC, (iv) the ownership of Arby's Holdings, LLC, (v) the performance of services for future and existing Affiliates (each a "Serviced Affiliate"), pursuant to a written servicing or management services agreement, on an arms-length basis reasonably customary in the restaurant industry; provided that the costs to the Servicer in providing such services, including without limitation, overhead, administrative and employee-related expenses, shall be fairly and reasonably allocated among all such Serviced Affiliates, (vi) the ownership of certain parcels of real property and acting as a landlord in connection therewith as of the date hereof, (vii) the performance of certain back-office support services to the Canadian Servicer in connection with the Canadian Servicer's servicing of the Issuer's Franchise Assets located in Canada and (viii) acting as "subfranchisor" of the Issuer in the State of California. (c) Maintenance of Separateness. Arby's covenants that: (i) the books and records of each Subsidiary and Serviced Affiliate will be maintained separately from those of Arby's and its Subsidiaries; (ii) all financial statements of Arby's and its other Affiliates that are consolidated to include any Subsidiary or Arby's and any Serviced Affiliate will contain detailed notes clearly stating that (A) all of such Subsidiary's or Serviced Affiliate's respective assets are owned by such Subsidiary or Serviced Affiliate, as the case may be, and (B) such Subsidiary and any Serviced Affiliate is a separate entity and, if applicable, that the respective assets of such Subsidiary or Serviced Affiliate is subject to the claims of its respective creditors; (iii) Arby's will observe (and shall cause each of its Subsidiaries to observe) corporate formalities in dealing with each Subsidiary and Serviced Affiliate; (iv) Arby's shall not (and shall not permit any of its Subsidiaries to) commingle its funds with any funds of any Subsidiary or Serviced Affiliate; provided, that the foregoing shall not prohibit Arby's or the Canadian Servicer from holding funds of a Subsidiary or Serviced Affiliate in their respective capacity as Servicer or Canadian Servicer for such entity in a segregated account identified for such purpose; (v) Arby's will (and shall cause each of its Subsidiaries to) maintain arm's length relationships with each Subsidiary and Serviced Affiliate, and Arby's and each of its Subsidiaries will be compensated at market rates for any services it renders or otherwise furnishes to any Subsidiary or Serviced Affiliate, provided that the foregoing shall not apply to dealings solely as among any Subsidiaries other than Holdings, the Certificateholder, the Issuer and IP Holder and any Serviced Affiliates which do not involve any of Arby's, Holdings, the Certificateholder, the Issuer or IP Holder; (vi) Arby's will not be, and will not hold itself out to be, responsible for the debts of any Subsidiary or Serviced Affiliate or the decisions or actions in respect of the daily business and affairs of any Subsidiary or Serviced Affiliate (other than (i) in its capacity as Servicer, licensor or servicer to a Serviced Affiliate, including, in each case, without limitation, any indemnification obligation in connection therewith and (ii) any indemnification obligation related to or in connection with the Transaction Documents); and Arby's will not knowingly permit any Subsidiary or Serviced Affiliate to hold Arby's out as responsible for the debts of any Subsidiary or Serviced Affiliate or the decisions or actions in respect of the daily business and affairs of any Subsidiary or Serviced Affiliate (other than, in its capacity as Servicer, licensor or servicer to a Serviced Affiliate, including, in each case, without limitation, any indemnification obligation in connection therewith and (ii) any indemnification obligation related to or in connection with the Transaction Documents); and (vii) Upon an Authorized Officer obtaining actual knowledge that any of the foregoing provisions in this Section 4.5(c) have been breached or violated in any material respect, Arby's will take such actions as may be reasonable and appropriate under the circumstances to correct and remedy such breach or violation as soon as reasonably practicable under such circumstances. ARTICLE 5 DEFAULT SECTION 5.1 Servicer Termination Events. (a) Servicer Termination Events. Any of the following acts or occurrences shall constitute a Servicer Termination Event by the Servicer under this Agreement, the assertion as to the occurrence of which may be made, and notice of which may be given, by any of the Issuer, the Indenture Trustee or the Controlling Party (other than in the case of clause (xi) below, the assertion of which may only be made by the Controlling Party), provided that in the case of any such assertion made and/or notice given by either the Indenture Trustee or the Controlling Party as to the existence of a Servicer Termination Event (or the assertion and/or notice of an act or occurrence which, with the lapse of any time period specified below would constitute a Servicer Termination Event), any waiver or consent, or purported waiver or consent, given by the Issuer to the Servicer (whether before or after any such assertion made and/or notice given by either the Indenture Trustee or the Controlling Party) with respect to such Servicer Termination Event (or with respect to any provision of this Agreement or the underlying factual circumstances relating thereto) shall be of no force or effect: (i) any failure by the Servicer to remit to the Lock-Box Accounts, within three Business Days of the receipt thereof, any payments received by it in respect of the Franchise Assets; (ii) any failure by the Servicer to provide to the Indenture Trustee a Monthly Servicer's Certificate or a Quarterly Servicer's Certificate within two Business Days of its due date, or with respect to any other required report, within 30 days of its due date; (iii) a default by the Servicer in the due observance of the provisions of the Servicing Agreement regarding preservation of the Servicer's existence; (iv) the default by the Servicer in the due performance and observance of any other provision of the Servicing Agreement and the continuation of such default uncured for a period of 30 days after it has been notified by the Indenture Trustee of, or otherwise obtained knowledge of, such default, provided, however, as long as the Servicer is diligently attempting to cure such default, such cure period shall be extended by an additional period as may be required to cure such default but in no event by more than an additional 30 days; (v) any representation, warranty or statement of the Servicer made in the Servicing Agreement or by the Servicer in its capacity as Servicer in any certificate, report or other writing delivered pursuant thereto will prove to be incorrect in any material respect as of the time when the same will have been made or deemed to have been made or as of any other date specified in this Agreement ("breach"), provided, that if any such breach is capable of being remedied within 30 days of the Servicer's knowledge of such breach or receipt of notice thereof, then a Servicer Termination Event shall occur under this clause (v) as a result of such breach if it is not cured in all material respects by the end of such 30-day period; (vi) the Servicer makes an assignment for the benefit of creditors or generally fails to pay its debts as such debts become due; (vii) the Servicer's petition or application to any tribunal for, or its consent to, the appointment of, or taking possession by, a trustee, receiver, custodian, liquidator or similar official of the Servicer, or of any substantial part of the assets of the Servicer, or the Servicer's commencement of a voluntary case under the Insolvency Law of the United States or any proceedings relating to the Servicer under the Insolvency Law of any other jurisdiction; (viii) any petition or application referred to in clause (vi) is filed, or any proceedings referred to in clause (vi) are commenced, against the Servicer and the Servicer by any act indicates its approval thereof, consent thereto or acquiescence therein, or any order, judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator or similar official, or approving the petition in any such proceedings and such order, judgment or decree remains unstayed and in effect for more than 60 days; (ix) any final, non-appealable order, judgment or decree is entered in any proceedings against the Servicer by a court of competent jurisdiction decreeing the dissolution of the Servicer and such order, judgment or decree remains unstayed and in effect for more than ten days; (x) a final non-appealable judgment for an amount in excess of $10,000,000 (exclusive of any portion thereof which is insured) is rendered against the Servicer by a court of competent jurisdiction and is not paid or discharged within ten days; (xi) (a) the Servicer shall fail to comply with the Servicing Standard in the judgment of the Controlling Party, exercised in a reasonable manner and (b) such failure could reasonably be expected to have a Material Adverse Effect on the Trust Estate (not taking into account the benefits of the Policy), as determined in good faith by the Controlling Party; (xii) the Debt Service Coverage Ratio is less than or equal to 1.10x; and (xiii) an Event of Default under the Indenture has been declared and is continuing. (b) Remedies. Upon the occurrence and continuance of any Servicer Termination Event, the Controlling Party may, or the Issuer or the Indenture Trustee may, with the consent, or at the direction, of the Controlling Party, by notice given to the Servicer (with copies to whichever of the Controlling Party, the Issuer or the Indenture Trustee has not given notice to the Servicer), terminate all of the rights and powers of the Servicer under this Agreement, including without limitation all rights of the Servicer to receive the servicing compensation provided for in Section 2.5 or any expense reimbursement hereunder, other than to the extent accrued prior to such termination and not previously paid. Upon any termination or the giving of the notice referred to in the preceding sentences, all rights, powers, duties and responsibilities of the Servicer under this Agreement, whether with respect to the related Franchise Documents, Collection Account, any Servicing Fee or otherwise shall vest in and be assumed by a new servicer as provided in Section 13.11 of the Indenture. From and during the continuation of a Servicer Termination Event, the Controlling Party is hereby irrevocably authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments (including any notices to Franchisees deemed necessary or advisable by the Controlling Party), and to do or accomplish all other acts or things necessary or appropriate, to effect such vesting and assumption. (c) Notice of Servicer Termination Event. Promptly after the Indenture Trustee shall have notice of the occurrence of any Servicer Termination Event, the Indenture Trustee shall transmit by mail to all Noteholders, the Certificateholder, the Insurer and the Rating Agencies notice of such Servicer Termination Event. SECTION 5.2 No Effect on Other Parties. Upon any termination of the rights and powers of the Servicer from time to time pursuant to Section 5.1 or upon any appointment of a successor to the Servicer, all the rights, powers, duties and obligations of the Issuer or the Indenture Trustee under this Agreement or under the Indenture shall remain unaffected by such termination or appointment and shall remain in full force and effect thereafter, except as otherwise expressly provided in this Agreement or in the Indenture. SECTION 5.3 Rights Cumulative. All rights and remedies from time to time conferred upon or reserved to the Issuer, the Indenture Trustee, the Insurer, Certificateholder or the Noteholders or to any or all of the foregoing are cumulative, and none is intended to be exclusive of another or any other right or remedy which they may have at law or in equity. Except as otherwise expressly provided herein, no delay or omission in insisting upon the strict observance or performance of any provision of this Agreement, or in exercising any right or remedy, shall be construed as a waiver or relinquishment of such provision, nor shall it impair such right or remedy. Every right and remedy may be exercised from time to time and as often as deemed expedient. ARTICLE 6 MISCELLANEOUS PROVISIONS SECTION 6.1 Termination of Agreement. The respective duties and obligations of the Servicer and the Issuer created by this Agreement shall terminate upon the earliest to occur of (i) a Servicer Termination Event and (ii) the latest to occur of (x) the final payment or other liquidation of the last outstanding Franchise Asset included in the Trust Estate and (y) the satisfaction and discharge of the Indenture pursuant to Article Four of the Indenture. Upon termination of this Agreement pursuant to this Section 6.1, the Servicer shall pay over to the Issuer or any other Person entitled thereto all monies received from Franchisees and held by the Servicer. The provisions of Section 2.7 shall survive the termination of this Agreement. SECTION 6.2 Amendment. (a) This Agreement may only be amended from time to time in writing by the Issuer, the Servicer and the Indenture Trustee. (b) Promptly after the execution of any amendment, the Servicer shall send to the Indenture Trustee and the Insurer a conformed copy of such amendment, but the failure to do so will not impair or affect its validity. (c) Any amendment or modification effected contrary to the provisions of this Section 6.2 shall be void. SECTION 6.3 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without regard to the conflict of law provisions thereof. In executing and delivering any amendment or modification to this Servicing Agreement, the Indenture Trustee shall be entitled to an opinion of counsel stating that: (i) such amendment is authorized pursuant to the Servicing Agreement and complies therewith; (ii) such amendment shall not adversely affect the interests of the Noteholders in any material respect; and (iii) all conditions precedent to the execution, delivery and performance of such amendment shall have been satisfied in full. The Indenture Trustee may, but shall have no obligation to, execute and deliver any amendment or modification which would affect its duties, powers, rights, immunities or indemnities hereunder. SECTION 6.4 Notices. All notices, requests or other communications desired or required to be given under this Agreement shall be in writing and shall be sent by (a) certified or registered mail, return receipt requested, postage prepaid, (b) national prepaid overnight delivery service, (c) telecopy or other facsimile transmission (following with hard copies to be sent by national prepaid overnight delivery service) or (d) personal delivery with receipt acknowledged in writing, as follows: (1) if to the Servicer: Arby's, Inc. 1000 Corporate Drive Ft. Lauderdale, Florida 33334-3651 Attention: General Counsel Facsimile: (954) 351-5619; copy to: Triarc Companies, Inc. 280 Park Avenue New York, New York 10017 Attention: General Counsel Facsimile: (212) 451-3216 (2) if to the Issuer: Arby's Franchise Trust 1000 Corporate Drive Ft. Lauderdale, Florida 33334-3651 Attention: General Counsel Facsimile: (954) 351-5619; (3) if to the Indenture Trustee; BNY Midwest Trust Company, a Bank of New York Company 2 North LaSalle, Suite 1020 Chicago, Illinois 60602 Attention: Indenture Trust Administration; and (4) if to the Insurer: Ambac Assurance Corporation One State Street Plaza New York, New York 10004 Attention: Risk Management Structured Finance and Credit Derivatives Arby's Franchise Trust 7.44% Fixed Rate Insured Notes due December 20, 2020 Facsimile: (212) 797-5725 Any of the persons in subclauses (1) through (4) above may change its address for notices hereunder by giving notice of such change to the other persons. Any change of address of a Noteholder shown on a Note Register shall, after the date of such change, be effective to change the address for such Noteholder hereunder. All notices and demands shall be deemed to have been given either at the time of the delivery thereof to any officer or manager of the Person entitled to receive such notices and demands at the address of such person for notices hereunder, or on the third day after the mailing thereof to such address, as the case may be. SECTION 6.5 Severability of Provisions. If one or more of the provisions of this Agreement shall be for any reason whatever held invalid or unenforceable, such provisions shall be deemed severable from the remaining covenants, agreements and provisions of this Agreement and such invalidity or unenforceability shall in no way affect the validity or enforceability of such remaining provisions, the rights of any parties hereto. To the extent permitted by law, the parties hereto waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. SECTION 6.6 Delivery Dates. If the due date of any notice, certificate or report required to be delivered by the Servicer hereunder falls on a day that is not a Business Day, the due date for such notice, certificate or report shall be automatically extended to the next succeeding day that is a Business Day. SECTION 6.7 Binding Effect; Limited Rights of Others. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto, provided, however, the provisions of this Agreement that inure directly or indirectly to the benefit of the Insurer and the Indenture Trustee shall be expressly limited to Sections 2.5, 2.7, 5.1 and 5.3 hereof and the provision of this Agreement that inures to the benefit of the Principal Reinsurer shall be expressly limited to Section 2.7 hereof, and the right of the Indenture Trustee or the Insurer, as the case may be, to receive any notice or provide or withhold any consent specifically intended by this Agreement for the benefit of each such party. Except as provided in the preceding sentence, nothing in this Agreement expressed or implied, shall be construed to give any Person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenants, agreements, representations or provisions contained herein. SECTION 6.8 Limitation of Liability of Wilmington Trust Company and the Certificateholder. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by the Issuer, a special purpose Delaware business trust created under the Trust Agreement, in the exercise of the powers and authority conferred on, and vested in, it (b) the representations, undertakings and agreements herein made on the part of the Issuer are made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company or the Certificateholder but are made and intended for the purpose of binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, or the Certificateholder, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto, and (d) under no circumstances shall Wilmington Trust Company or the Certificateholder be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement. SECTION 6.9 Article and Section Headings. The Article and Section headings herein are for convenience of reference only, and shall not limit or otherwise affect the meaning hereof. SECTION 6.10 Concerning the Indenture Trustee. In acting under this Agreement, the Indenture Trustee shall be afforded the rights, privileges, immunities and indemnities set forth in the Indenture as if fully set forth herein. SECTION 6.11 Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. [Remainder of this page intentionally left blank.] IN WITNESS WHEREOF, the parties hereto have caused this Servicing Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written. ARBY'S FRANCHISE TRUST By: Wilmington Trust Company, not in its individual capacity but solely as Issuer Trustee By: W. CHRIS SPONENBERG ------------------------------------ Name: W. Chris Sponenberg Title: Assistant Vice President ARBY'S, INC. By: CURTIS S. GIMSON ---------------------------------- Name: Curtis S. Gimson Title: Senior Vice President BNY MIDWEST TRUST COMPANY, A BANK OF NEW YORK COMPANY, not in its individual capacity but solely as Indenture Trustee By: MEGAN CARMODY --------------------------------- Name: Megan Carmody Title: Assistant Vice President EXHIBIT A DUTIES OF THE SERVICER Pre-Opening Services. Prior to the opening of an Arby's(R) branded Restaurant located in the United States, the Servicer will: (A) (i) Designate a geographical area in which the prospective Franchisee may select a proposed Restaurant location for approval; (ii) Offer counseling and advice in Restaurant site selection; (iii) Review and accept or reject the proposed site; (iv) Provide a brief overview of the System and the administrative and corporate support provided by the Servicer; and (v) Provide an operational training program conducted at a certified training location. (B) with respect to Arby's(R) branded Restaurants located in the United States and Canada: (i) Provide generic plans for the approved building, including specifications for equipment, fixtures, furnishings and signs, and review for approval or rejection the proposed building and equipment plans; (ii) On behalf of the Issuer, arrange for the Issuer to execute and deliver a Franchise Agreement to the proposed Franchisee upon payment of all required fees and performance of all required obligations by the proposed Franchisee; (iii) Provide specifications and names of approved suppliers for opening inventory, supplies and related materials; Post-Opening Services. Following the opening of an Arby's(R) branded Restaurant located in the United States by a Franchisee, the Servicer will provide to such Franchisee a copy of the Arby's Operating Standards Manual and supplementary materials, as issued and revised from time to time by the Servicer. The Servicer also will consider for approval new specifications and suppliers as requested by Franchisees from time to time. Other Functions To Be Performed by the Franchisor Under the Servicing Agreement. The Servicer has agreed to perform the following services, subject to the Servicing Standard, that are not required by the Franchise Agreements, but that are essential functions for any company engaged in operating a franchise business. These functions include: (A) With respect to Franchise Agreements related to Arby's(R) branded Restaurants located in the United States and Canada: (i) Fulfilling the obligations of the Issuer in its capacity as Licensee under the License Agreement. (ii) Preparation and filing of Franchise Offering Circulars to comply with applicable federal and state laws; (iii) Preparation of Franchise Agreements and appropriate documentation of franchise transfers, terminations, renewals, site relocations and ownership changes; (iv) Providing legal services with respect to the enforcement of the Franchise Agreements, MDAs and LOAs of the Issuer; (v) Providing accounting and financial reporting services; (vi) Providing quality control services with respect to the promulgation and maintenance of standards for food, equipment, suppliers and distributors; (vii) Providing legal services with respect to the protection of trademarks used by the Issuer in its franchise business; (viii) Assisting the Issuer in complying with franchise industry-specific government regulation and applicable laws; and (ix) Providing notice as specified in Sections 7 and 12 of the License Agreement, on behalf of the Issuer in its capacity as Licensee under the License Agreement, to the IP Holder, in its capacity as Licensor under the License Agreement, upon obtaining actual knowledge of a breach by the IP Holder of its obligations under Sections 7 and 12 of the License Agreement. (B) With respect to Franchise Agreements related to Arby's(R) branded Restaurants located in the United States: (i) Monitoring industry conditions; (ii) Formulating a strategy for the System and utilizing commercially reasonable efforts to implement such strategy; (iii) Supporting the development of new products and increased brand awareness; and (iv) Using commercially reasonable efforts to expand the System on a profitable basis. EX-10.5 9 promnote.txt PROMISSORY NOTE Exhibit 10.5 PROMISSORY NOTE $5,000,000 April 1, 2000 New York, New York FOR VALUE RECEIVED, Nelson Peltz and Peter W. May, c/o Triarc Companies, Inc., 280 Park Avenue, New York, NY 10017 (the "Makers"), jointly and severally promise to pay to Triarc Companies, Inc., a Delaware corporation (the "Payee"), the principal sum of Five Million Dollars ($5,000,000), with interest thereon from time to time as provided herein on the unpaid balance hereof until paid or until default, both principal and interest payable in lawful money of the United States of America, at the office of the Payee, or at such other place as the Payee may designate in writing. The obligations evidenced hereunder are with full recourse to the Makers. Payment Schedule. The principal and interest shall be due and payable as follows: (a) The principal shall be payable in three equal installments as follows: (i) one-third of the principal amount shall be paid on March 31, 2001; (ii) one-third of the principal amount shall be paid on March 31, 2002; and (iii) one-third of the principal amount shall be paid on March 31, 2003. (b) Interest shall be payable annually, in arrears, on March 31 of each year (each an "Interest Payment Date") or, if such date shall not be a business day, on the next succeeding business day, commencing on the first Interest Payment Date following the Effective Date. The Effective Date shall be the day after the parties to Consolidated Civil Action No. 15746-NC in Re Triarc Companies, Inc. jointly move the Delaware Court of Chancery for the entry of the Order and Final Judgment (the "Final Judgment") and the Final Judgment becomes final. For purposes of this Promissory Note, the Final Judgment shall be deemed to become final upon the latest to occur of (a) the passage of thirty (30) days after entry of the Final Judgment without any notice of appeal having been filed; or (b) if there is an appeal of the Final Judgment, the date on which any subsequent affirmation thereof is no longer subject to further appellate review. Prepayments. (a) The principal balance of this Note may be prepaid in full or in part, together with accrued and unpaid interest thereon, at any time without penalty or premium. (b) The principal balance of this Note must be prepaid in full, together with accrued and unpaid interest thereon, 30 days after the occurrence of a "change of control" of the Payee (as defined in the Payee's 98 Equity Participation plan). Interest Rate. The Makers promise to pay interest on the unpaid principal amount of this Note at an initial rate of 6% per annum, such interest rate to be adjusted on each Interest Payment Date, upward or downward, with respect to the succeeding year, based upon the changes, if any, between one-month LIBOR on March 30, 2000 (on such date one-month LIBOR was 6.1325%) and on the Interest Payment Date (the "Interest Rate"). Default. In the event (each, an "Event of Default") (a) of a default in the repayment of principal as the same becomes due which is not cured within 20 business days from the due date or (b) a default in payment of any interest payable hereunder for two consecutive Interest Payment Dates, then in any such event the Payee may, without further notice, declare the unpaid principal balance hereof, together with all interest accrued and unpaid thereon, immediately due and payable. Failure to exercise such option shall not constitute a waiver of the right to exercise the same at any other time. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, each Maker has hereunto set his hand and executed this Note as of the date first above written. Makers: /s/ NELSON PELTZ ------------------------------------ Nelson Peltz /s/ PETER W. MAY ------------------------------------ Peter W. May EX-10.6 10 stipagt8k.txt STIPULATION AGT. Exhibit 10.6 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - - - - - - - - - - - - - - - - - - - - - IN RE TRIARC COMPANIES, INC. CLASS AND DERIVATIVE LITIGATION Consolidated Civil Action No. 15746-NC - - - - - - - - - - - - - - - - - - - - - STIPULATION AND AGREEMENT OF COMPROMISE, SETTLEMENT AND RELEASE The parties to this action, by and through their undersigned attorneys, have entered into the following Stipulation and Agreement of Compromise, Settlement and Release (the "Stipulation" or the "Settlement"), subject to the approval of the Delaware Court of Chancery (the "Court"): WHEREAS: A. Triarc Companies, Inc. ("Triarc" or the "Company") is a Delaware corporation with its principal executive offices located New York, New York. Triarc is a holding company that operates in the premium beverage, restaurant franchising, and soft drink concentrates businesses. B. In the Company's September 27, 1993 Proxy Statement, the Triarc Board of Directors (the "Board") recommended that shareholders approve the Equity Participation Plan (the "Plan"). The Triarc shareholders approved the Plan at the 1993 Annual Meeting of Shareholders. C. In Triarc's 1994 Proxy Statement, shareholders were asked to approve amendments to the Plan which, inter alia, increased the number of stock options subject to grant. The Proxy Statement disclosed that, in April 1994, the Company's Compensation Committee had approved the grant of "Performance Stock Options" in the aggregate amount of 3.5 million shares of Class A common stock, consisting of 2.1 million shares of Class A common stock to Nelson Peltz and 1.4 million shares to Peter May (the "Compensation Grant"), subject to approval by shareholders of the proposed amendments to the Plan. The Triarc shareholders approved the proposed amendments to the Plan at the Company's June 4, 1994 Annual Meeting of Shareholders. The Litigation D. On June 19, 1997, June 24, 1997 and August 28, 1997, three derivative and class actions were filed in the Court purportedly on behalf of Triarc and its shareholders, captioned Malekan, et al. v. Peltz, et al., Civil Action No. 15746, Trum v. Peltz, et al., Civil Action No. 15775, and Feder, et al. v. Peltz, et al., Civil Action No. 15900. Named as defendants in the Malekan and Trum actions were Triarc directors Nelson Peltz, Peter W. May, Hugh L. Carey, Clive Chajet, Stanley R. Jaffe, Joseph A. Levato, David E. Schwab II, Raymond S. Troubh and Gerald Tsai, Jr. (the "Defendant Directors"), and Triarc was named as a nominal defendant. Additional defendants were named in the Feder complaint. The complaints in these actions alleged, in substance, that the Defendant Directors breached their fiduciary duties in connection with awards of compensation made to Peltz and May subsequent to the Compensation Grant, and violated alleged representations made to Triarc's shareholders in the 1994 Proxy Statement and alleged undertakings of the Board to refrain from awarding certain types of compensation to Peltz and May for the six years commencing April 1993. E. On November 7, 1997, plaintiffs in the Feder action moved to voluntarily dismiss that action, stating that they wished to prosecute a related pending action that had been filed on August 13, 1997 in federal court in New York. The Court granted the Feder plaintiffs' motion by order dated November 12, 1997. On the same day, it ordered the consolidation of the Malekan and Trum cases (hereinafter, the "Action"). F. On December 15, 1997, plaintiffs moved for leave to file their Consolidated and Amended Class Action and Derivative Complaint ("Amended Complaint") which, inter alia, asserted additional claims based upon alleged misrepresentations in the 1994 Proxy Statement and added defendants Richard M. Kerger, H. Douglas Kingsmore, William Pallot, Thomas A. Prendergast, Martin Rosen, Stephen S. Weisglass, Harold E. Kelley, Daniel R. McCarthy, Leon Kalvaria, and M.L. Lowenstein (the "Former Director Defendants"; Triarc, the Director Defendants, and the Former Director Defendants are referred to herein as "Defendants"). The Amended Complaint purported to assert claims (i) derivatively on behalf of Triarc; and (ii) on behalf of a putative class of all persons who held shares of Triarc stock on April 25, 1994, the record date for voting on the matters to be voted on at Triarc's 1994 Annual Meeting, and their successors in interest and transferees (except defendants, members of their immediate families and any entity in which a defendant has a controlling interest). Plaintiffs' motion for leave to file the Amended Complaint was granted on December 29, 1997. G. On January 13, 1998, defendants Harold E. Kelley, Richard M. Kerger and Daniel R. McCarthy filed a Notice of Removal in the United States District Court for the District of Delaware. On January 20, 1998 and January 27, 1998, all defendants (except Kelly, Kerger and McCarthy, who were voluntarily dismissed by plaintiffs on January 23, 1998) answered the Amended Complaint. On February 11, 1998, plaintiffs moved to remand the Action to the Chancery Court. Defendants Pallot and Prendergast thereafter filed a brief in opposition to plaintiffs' remand motion, to which plaintiffs replied on March 5, 1998. On March 10, 1998, defendants Pallot and Prendergast moved the Delaware federal court to transfer the Action to the federal court in New York. That motion was fully briefed. Following the April 1, 1998 oral argument on the motion for remand and supplemental briefing thereon, the Delaware federal court issued an order on September 30, 1998 granting plaintiffs' motion to remand to the Delaware Chancery Court and denying the motion to transfer to the New York federal court. H. On September 28, 1999, plaintiffs voluntarily dismissed their claims against defendants Pallot and Prendergast without prejudice. Discovery I. Plaintiffs, through their counsel, represent that they have made a thorough investigation of the facts and circumstances relevant to the Action, and have conducted discovery and investigation during the prosecution of the Action, including, inter alia, (i) serving document requests upon all defendants, and a subpoena upon third party Towers Perrin; (ii) reviewing and analyzing thousands of pages of documents obtained during discovery and from plaintiffs' investigation; (iii) deposing defendants Peltz, May, Jaffe, Chajet, Tsai and Schwab, as well as Messrs. Pallot and Kerger; (iv) retaining a financial consultant to assist plaintiffs in evaluating the value of the stock options granted by Triarc to Peltz and May; (v) preparing a motion for summary judgment which was about to be filed when the parties agreed to settle the Action; (vi) researching the facts and law pertaining to the claims asserted in the Action; and (vii) engaging in extensive arm's-length negotiations with defendants regarding settlement of the Action. J. Having made factual and legal investigations, including those described above, plaintiffs and their counsel have concluded that the terms of the Stipulation are fair, reasonable, adequate and in the best interests of Triarc and the Class. For purposes of this settlement, the "Class" shall be deemed to include all persons who owned shares of Triarc common stock on any of the following dates, which are the record dates for voting on matters to be voted upon at Triarc's Annual Meetings for the years 1994 through 1999 inclusive: April 25, 1994; April 25, 1995; April 23, 1996; April 21, 1997; March 25, 1998; and August 11, 1999. K. Plaintiffs agreed to the terms of the Settlement after consultation with their financial expert and after considering: (1) the benefits provided by the settlement to the Company and the Class; (2) the attendant risks of litigation; (3) the chances of success on the merits of the allegations contained in the Amended Complaint; (4) the uncertainty relating to the proof of the allegations; (5) the defenses asserted by and available to defendants; (6) the substantial expense and length of time necessary to prosecute the Action through trial; and (7) the fact that resolution of the Action, if this Court found in plaintiffs' favor, would likely be submitted for appellate review, as a consequence of which it could be many years before there would be a final adjudication of the Action. L. Defendants have at all times vigorously denied, and continue to deny, all liability with respect to the Action; deny that they breached any fiduciary duties; deny that they have committed, or have threatened to commit, any wrongful act or violation of law of any nature whatsoever in connection with any of the matters alleged, or which could have been alleged, in the Action; deny that they acted improperly in any way, and deny liability of any kind to the Class, the shareholders of the Company, or the Company. Defendants, however, consider it desirable that the Action be settled and dismissed on the merits and with prejudice because the Settlement will (1) provide substantial monetary and other benefits to the Company and its shareholders; (2) terminate the substantial expense, inconvenience and distraction of burdensome and protracted litigation; (3) finally resolve the Action; (4) dispel any uncertainty that may exist as a result of such litigation; and (5) permit the continued operation of Triarc's affairs unhindered by expensive litigation, and by the diversion of the personnel of Triarc, and believe that it is in the best interest of the Company to accomplish the foregoing. NOW, THEREFORE, IT IS STIPULATED AND AGREED, subject to the approval of the Court, pursuant to Rule 23 and 23.1 of the Court of Chancery Rules, that any and all individual, class and derivative claims, rights, demands, suits, matters, issues, actions, or causes of action, by or on behalf of the plaintiffs, the Class, Triarc and its shareholders (collectively, the "Releasors") against the Defendants and any of their respective present or former officers, directors, stockholders, employees, agents, attorneys, representatives, advisors, financial advisors, lenders, insurers, affiliates, parents, subsidiaries, heirs, personal representatives, estates, administrators, predecessors, successors, and assigns (collectively, the "Releasees"), whether known or unknown, under state, federal or other law, including but not limited to the federal securities laws, that were asserted or could have been asserted in the Action, arising out of or relating to the subject matter of the Action, including, without limitation, allegations of breaches of fiduciary duty or misrepresentation and/or omissions in connection with (i) Triarc's 1994 Proxy Statement circulated, among other things, to obtain shareholder approval of amendments to the Equity Participation Plan, and (ii) approving subsequent grants of options and other compensation to Peltz and May in addition to the Performance Options (including but not limited to cash bonuses awarded in August 1996) and disclosure or nondisclosure relating thereto (the "Released Claims") are hereby compromised, settled, released, discharged, and dismissed with prejudice upon and subject to the following terms and conditions: The Settlement In full and final settlement of the Action, within three (3) days after Effective Date (as defined below), defendants agree as follows: 1. (a) Peltz and May shall, jointly and severally, sign and deliver to Triarc a Promissory Note (the "Note") in the principal amount of Five Million Dollars ($5,000,000), dated as of April 1, 2000, payable March 31, 2003. The Note shall bear interest at the rate of 6% per annum, payable annually on March 31 of each year (an "Interest Payment Date") or, if any such date shall not be a business day, on the next succeeding business day, beginning on the first Interest Payment Date subsequent to the Effective Date. The interest rate on the Note will be adjusted on each Interest Payment Date, upward or downward, with respect to the succeeding year, based upon the changes, if any, between LIBOR on April 1, 2000 and on the Interest Payment Date. There shall be two mandatory prepayments of the Note: one-third of the principal amount of the Note shall be prepaid on March 31, 2001, and one-third of the principal amount of the Note shall be prepaid on March 31, 2002. Peltz and May may, at their option, prepay all or any portion of the unpaid amount of the Note, at any time or times, by paying an amount equal to the outstanding principal amount of the Note which they wish to prepay, together with interest accrued and unpaid thereon, without penalty or premium. The entire unpaid principal amount of the Note, plus accrued interest pro rata, shall become due and payable 30 days after the occurrence of a "change of control." For purposes of this Stipulation, a "change of control" shall have the meaning set forth in the 1998 Equity Participation Plan of Triarc. (b) Peltz and May shall agree to the cancellation, in the aggregate, of (and Triarc will accept the cancellation of) 775,000 of the Performance Options that were issued by Triarc to Peltz and May, individually, dated June 9, 1994. (c) Peltz and May represent that the provisions of paragraphs 1(a) and 1(b) above represent reimbursement to Triarc by Peltz and May of amounts received and included in income by them during the periods in question here. (d) Defendants shall pay, or cause to be paid, plaintiffs' counsel's fees and expenses, to the extent allowed by the Court, as set forth below, but in no event in excess of $2,500,000. Release of Claims 2. On the Effective Date, the Released Claims shall be completely and finally compromised, settled, released, and forever discharged, and the Action shall be dismissed with prejudice and without costs except as provided in paragraphs 8-9 herein. 3. The release contemplated by this Stipulation extends to claims that plaintiffs, on behalf of the Releasors, do not know or suspect to exist at the time of the Stipulation, which, if known, might have affected the decision to enter into this Stipulation. Each of the named plaintiffs and each Releasor knowingly, voluntarily, and expressly waives and relinquishes any and all provisions, rights and benefits conferred by any law of the United States or any state or territory of the United States, or principle of common law, which governs or limits a person's release of unknown claims, including, but not limited to, Section 1542 of the California Civil Code. Plaintiffs, on behalf of the Releasors, acknowledge that Releasors may discover facts in addition to or different from those that they now know or believe to be true with respect to the subject matter of this release, but that it is their intention, on behalf of the Releasors, to fully, finally and forever settle and release any and all Released Claims, known or unknown, suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery or existence of such additional or different facts. Submission and Application to the Court 4. As soon as practicable after this Stipulation has been executed, the parties shall jointly move the Court for approval of the Settlement and for entry by the Court of an order, substantially in the form attached hereto as Exhibit A (the "Scheduling Order"). Notice and Settlement Administrative Costs 5. Triarc shall assume the administrative responsibility and costs of preparing and disseminating the notice (the "Notice") in substantially the form attached hereto as Exhibit B and in the manner provided for in the Scheduling Order to shareholders of record of Triarc and to all members of the Class at their last known address. In addition, Triarc, or its agents, shall provide additional copies of the Notice to all such record shareholders requesting the same for purposes of distribution to beneficial shareholders of Triarc. Prior to or at the hearing on the Settlement, counsel for defendants shall file with the Court an appropriate affidavit with respect to preparing and mailing the Notice. Plaintiffs shall not bear any responsibility for the dissemination of the Notice and shall not be liable for the cost thereof. Order and Final Judgment 6. If this Stipulation and the Settlement contemplated herein shall be preliminarily approved by the Court, at or following a hearing, the parties hereto shall jointly move the Court for the entry of the Order and Final Judgment (or orders, if the Court determines the matters specified below in more than one order) (the "Final Judgment") in substantially the form attached hereto as Exhibit C, pursuant to which, among other things, the Action shall be dismissed with prejudice. Effective Date of the Settlement 7. The "Effective Date" of the Settlement shall be the day after the day on which the Final Judgment becomes final. For purposes of this Stipulation, the Final Judgment shall be deemed to become final upon the latest to occur of (a) the passage of thirty (30) days after entry of the Final Judgment without any notice of appeal having been filed; or (b) if there is an appeal of the Final Judgment, the date on which any subsequent affirmation thereof is no longer subject to further appellate review. An appeal solely from the Court's award of attorneys' fees or expenses shall not affect the finality of the Settlement or the occurrence of the Effective Date. Attorneys' Fees 8. At, or subsequent to, the settlement hearing, plaintiffs' counsel in the Action shall jointly apply to the Court for an award of attorneys' fees in an amount not to exceed $2,500,000, which amount shall be inclusive of the reasonable costs and expenses (including expert fees and expenses) incurred in prosecuting this litigation. Defendants will not oppose such application. Any such attorneys' fees and expenses that the Court may award to plaintiffs' counsel up to $2,500,000 shall be paid solely and exclusively by defendants or their insurers. No part of the counsel fees or expenses awarded by the Court shall be paid by Triarc. Neither defendants nor their insurers shall be liable for any portion of any payment in excess of $2,500,000 in fees and expenses in any action, including this Action, asserting any Released Claims. Defendants agree not to consent to any award of fees and expenses in any other action which would result in an aggregate fee and expense award, in all actions asserting Released Claims, of more than $2,500,000. 9. Defendants shall pay or cause to be paid to plaintiffs' counsel such fees, costs and expenses up to $2,500,000 as the Court actually awards as a result of the application for fees, costs and expenses described in paragraph 8 above, on the later of (i) the Effective Date of this Settlement; and (ii) thirty days after the order awarding such fees, costs, or expense shall be final and no longer subject to further appellate review. 10. The fairness, reasonableness and adequacy of the Settlement may be considered and ruled upon by the Court independently of any award of fees or expenses requested by plaintiffs' counsel. 11. Except as provided in this Stipulation, Defendants and any Releasees shall bear no expenses, costs, damages, or fees incurred by any plaintiff or any member of the Class, or by any attorney, expert, adviser, agent, or representative of any of the foregoing. 12. The administration of the Settlement and final decision as to all disputed questions of law and fact with respect thereto and this Stipulation shall be under the jurisdiction of the Court (subject to any party's right to seek appellate review). Stipulation Not an Admission 13. This Stipulation and all negotiations, statements, proceedings and documents related to it are not, and shall not be construed to be, an admission by any of the parties respecting the validity or the invalidity of any of the claims asserted in the Action, or of the liability of any party with respect to any such claims or any alleged wrongdoing whatsoever, and shall not be offered by any party or person for any evidentiary purpose, including as an admission of any fact or of any such liability or wrongdoing or of the validity or invalidity of any of the claims in the Action or any other action. Defendants have denied and continue to deny each and all of the claims in the Action. 14. If (a) the Court declines, in any respect, to enter the Final Judgment in the form annexed hereto as Exhibit C and any of the parties fails to consent to the entry of another form of order in lieu thereof; or (b) the Court disapproves the Settlement proposed herein, including any amendments thereto agreed upon by all of the parties; or (c) the Court approves the Settlement proposed herein, including any amendment thereto approved by all of the parties, but such approval is reversed or modified on appeal or petition for writ of certiorari and such reversal or modification becomes final by a lapse of time or otherwise, then, in any such event, this Stipulation, including any amendment thereof, shall be of no further force or effect and this Stipulation and any amendment thereof and the Settlement proposed herein shall be null and void without prejudice to any party hereto and may not be introduced as evidence or referred to in any proceedings, nor be a basis for any application for attorneys' fees or expenses, and each party shall be restored to his, her or its respective position as it existed prior to the execution of this Stipulation, except that Triarc shall not be entitled to reimbursement of costs of providing the Notice pursuant to paragraph 5 above. Governing Law 15. This Stipulation shall be interpreted and enforced in accordance with the laws of the State of Delaware. 16. In the event of any dispute or disagreement with respect to the meaning, effect, or interpretation of the Stipulation or an attached exhibit, or in the event of a claimed breach of the Stipulation or an attached exhibit, the parties hereto agree that such dispute will be adjudicated only in the Court. 17. The Stipulation, together with any exhibits, shall be deemed to have been mutually prepared by the settling parties and shall not be construed against any of them by reason of authorship. Extensions 18. Without further order of the Court, the parties may (but shall not be obligated to) agree in writing to reasonable extensions of time to carry out any of the provisions of this Stipulation unless and until the Court orders dates for certain acts or events hereunder. Entire Agreement 19. The exhibits to the Stipulation are incorporated in, and constitute an integral part of, the Stipulation. 20. This Stipulation, and the form of the Scheduling Order, Notice and the Final Judgment agreed to by the parties in connection with the Settlement, constitute the entire agreement of the parties with respect to the subject matter hereof and may not be amended, or any of its provisions waived, except by a writing executed by or on behalf of all of the parties hereto. Counterparts 21. This Stipulation may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when such counterparts have been signed by counsel for each of the parties and delivered to counsel for the other parties. Representations 22. (a) All counsel and any other person executing this Stipulation and any of the exhibits hereto or any related settlement documents warrant and represent that they have the full authority to do so. (b) Plaintiffs and their counsel represent and warrant that none of the plaintiffs' claims or causes of action asserted in the Action or this Stipulation has been assigned, encumbered or in any manner transferred in whole or in part. 23. The parties each acknowledge that, in entering into this Stipulation, such party has not relied on any oral or written representation other than those expressly set forth in this Stipulation. Best Efforts 24. The parties hereto and their attorneys agree to cooperate fully with one another in seeking Court approval of this Stipulation and the Settlement and to use their best efforts to effect, as promptly as practicable, the consummation of this Stipulation and the Settlement provided for hereunder. 25. This Stipulation shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and upon any corporation or other entity with which any party hereto may merge or consolidate. 26. All discovery conducted in this Action shall remain confidential and shall be used only for purposes of the Action. Upon the Effective Date, all such discovery shall be destroyed and a sworn certification of such destruction shall be provided to the producing party. Counsel for the parties may, however, retain for their files a copy of any document filed with the Court. 27. Without affecting the finality of the Settlement or the Final Judgment to be entered approving the Settlement, the parties to this Stipulation agree to use their best efforts to cause LeWinter et ano v. Peltz, et al., 97 Civ. 601 (TPG) (S.D.N.Y.) to be dismissed with prejudice, and to use their best efforts to have any collateral attack on this Settlement promptly dismissed based upon, among other things, the res judicata effect of this Settlement and the release provided for herein. Dated: August 17, 2000 - ------------------------------- /s/ Lawrence C. Ashby --------------------------- Joseph Rosenthal, Esq. Lawrence C. Ashby, Esq. Rosenthal Monhait Gross & Ashby & Geddes Goddess, P.A. One Rodney Square 919 North Market Street Suite 302 Suite 1401 Wilmington, Delaware 19899 Wilmington, Delaware 19899 (302) 654-1888 (302) 656-4433 -and- /s/ Jill S. Abrams /s/ Jonathan H. Hurwitz - ------------------------------- --------------------------- Jill S. Abrams, Esq. Gerard Harper, Esq. Abbey Gardy & Squitieri, LLP Jonathan H. Hurwitz, Esq. 212 East 39th Street Paul, Weiss, Rifkind, Wharton & Garrison New York, New York 10016 1285 Avenue of the Americas (212) 889-3700 New York, New York 10019-6064 (212) 373-3000 Attorneys for Defendants Nelson Peltz and Peter May /s/ Robert M. Kornreich /s/ Martin Tully - ------------------------------ -------------------------- Robert M. Kornreich, Esq. Martin Tully, Esq. Wolf Popper, LLP Morris, Nichols, Arsht & Tunnell 845 Third Avenue 1201 North Market Street New York, New York 10022 Wilmington, Delaware 19899 (212) 759-4600 (302)658-9200 Attorneys for Plaintiffs Attorneys for Defendants Hugh L. Carey, Clive Chajet, Stanley R. Jaffe, Joseph A. Levato, David E. Schwab II, Raymond S. Troubh and Gerald Tsai, Jr. and nominal defendant Triarc Companies, Inc. Exhibit A IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - --------------------------------------x IN RE TRIARC COMPANIES, INC. Consolidated Civil Action No. 15746-NC CLASS AND DERIVATIVE LITIGATION - --------------------------------------x SCHEDULING ORDER The parties having made application, pursuant to Rules 23 and 23.1 of the Rules of the Court of Chancery, for an Order approving the settlement (the "Settlement") of the above-captioned action (the "Action") in accordance with a Stipulation of Settlement dated August ___, 2000 (the "Stipulation"), which, together with the accompanying documents, sets forth the terms and conditions for the proposed settlement of this Action and for a judgment dismissing this Action with prejudice upon the terms and conditions set forth therein; and the Court having read and considered the Stipulation and the accompanying documents; and all parties having consented to the entry of this Order; IT IS HEREBY ORDERED this ___ day of _____________ 2000 that: 1. A hearing (the "Settlement Hearing") pursuant to Rules 23 and 23.1 shall be held on _______________, 2000 at _ _.m., to: a. determine whether due and adequate notice of the proceedings and the Settlement has been given, with a full opportunity to be heard, such that members of the Class (as hereinafter defined), Triarc Companies, Inc. ("Triarc"), and Triarc's shareholders should be bound by the Order and Final Judgment (as defined in the Stipulation); b. determine whether the Action should be maintained as a class action; c. determine whether the Court should approve the Stipulation and the Settlement that it contemplates as fair, reasonable, adequate and in the best interests of Triarc, its shareholders and the Class (as hereinafter defined); d. determine whether the Order and Final Judgment dismissing the Action with prejudice and releasing the Released Claims (as defined in the Stipulation) should be entered; e. consider the application of plaintiffs' counsel for an award of attorneys' fees and reimbursement of costs and expenses; and f. consider such other matters as the Court may deem appropriate. 2. Pursuant to Rule 23(b)(1) and (b)(2), and for the purposes of the proposed Settlement only, the Action is preliminarily certified as a class action on behalf of a class (the "Class") consisting of all persons who owned shares of Triarc common stock on any of the following dates, which are the record dates for voting on matters to be voted upon at Triarc's Annual Meetings for the years 1994 through 1999, inclusive: April 25, 1994; April 25, 1995; April 23, 1996; April 21, 1997; March 25, 1998; and August 11, 1999. Excluded from the Class are the individual defendants (including, but not limited to, persons previously named as defendants) and members of their immediate families, and any entity in which a defendant has a controlling interest. 3. The Court preliminarily finds, for the purposes of the proposed Settlement only, that the prerequisites to class certification under Rule 23(a) have been satisfied in that: (a) the number of Class members is so numerous that joinder of all members thereof is impracticable; (b) there are questions of law and fact common to the Class; (c) the claims of the named representatives are typical of the claims of the Class they seek to represent; and (d) the plaintiffs will fairly and adequately represent the interests of the Class. 4. Pursuant to Rule 23, and for purposes of the proposed Settlement only, plaintiffs Kamram Malekan, Rose Trum, and Jay Frechter, are certified as Class Representatives and plaintiffs' counsel are certified as class counsel. 5. The Court reserves the right to adjourn the Settlement Hearing or any adjournment thereof, including consideration of any application for attorneys' fees and expenses, without further notice of any kind other than oral announcement at the Settlement Hearing or any adjournment thereof. 6. The Court reserves the right to approve the Settlement and the Stipulation at or after the Settlement Hearing with such modifications as may be consented to by the parties to the Stipulation and without any further notice to the shareholders of Triarc or the Class. 7. The Court approves the form of Notice of Proposed Settlement of Class Action and Derivative Action (the "Notice") annexed to the Stipulation as Exhibit B, and finds that first-class mailing of the Notice, provided in the manner described in paragraph 8 hereof, satisfies the requirements of Rules 23 and 23.1 and due process, is the best notice practicable under the circumstances, and will constitute due and sufficient notice to all persons entitled thereto. On or before the date of the Settlement Hearing, counsel for Triarc shall file proof of mailing of the Notice. 8. Triarc shall cause the Notice to be mailed at least forty-five (45) days before the Settlement Hearing, by first-class mail, postage prepaid, substantially in the form attached as Exhibit B to the Stipulation, to all persons and entities shown on the stock records maintained by or on behalf of Triarc to be holders of record of the common stock of Triarc on April 25, 1994, April 25, 1995, April 23, 1996, April 21, 1997, March 25, 1998, August 11, 1999, and August 4, 2000. Triarc shall use reasonable efforts to give notice to beneficial owners of such securities by making additional copies of such Notice available to any recordholder requesting the same prior to the Settlement Hearing for the purpose of distribution to beneficial owners. All costs associated with providing Notice shall be borne by Triarc. 9. The Court directs that all record holders of Triarc's common stock send the Notice to all beneficial owners of such stock immediately after receipt of the Notice, or provide the names and addresses of such beneficial owners to an agent, to be named by Triarc, promptly after receipt of the Notice, and such agent will cause the Notice to be sent promptly to those beneficial owners. 10. Any Class member who objects to the class certification, and any Class member or current Triarc stockholder who objects to the Stipulation, the Settlement, the judgment and release to be entered in the Action, or the application for attorneys' fees and expenses, or who otherwise wishes to be heard, may appear in person or by counsel at the Settlement Hearing and present any evidence or argument that may be proper and relevant, provided that, not later than 10 business days prior to the Settlement Hearing, unless otherwise ordered by the Court, such class member or Triarc stockholder files with the Register in Chancery: (i) a written statement containing his or her name, address, telephone number, the number of shares of Triarc's common stock he or she owns or owned and a detailed statement of his or her specific objections or comments on the proposed Settlement or any other matter before the Court, and (ii) the grounds for his or her objection or the reasons that he or she desires to appear and be heard (including all documents or writings which such person desires the Court to consider). On or before the same date such class member must also serve such written statement and supporting papers, by overnight delivery or hand, on the following counsel: Joseph A. Rosenthal, Esq. Rosenthal Monhait Gross & Goddess, P.A. 919 North Market Street Suite 1401 Mellon Bank Center Wilmington, Delaware 19801 (302) 656-4433 Counsel for Plaintiffs Jonathan Hurwitz, Esq. Paul Weiss Rifkind Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019 (212) 373-3000 Counsel for Defendants Nelson Peltz and Peter May Martin Tully, Esq. Morris, Nichols, Arsht & Tunnell 1201 North Market Street 18th Floor Wilmington, Delaware 19899-1347 (302) 658-9200 Counsel for Defendants Hugh L. Carey, Clive Chajet, Stanley R. Jaffe, Joseph A. Levato, David E. Schwab, II, Raymond S. Troubh and Gerald Tsai, Jr., and nominal defendant Triarc Companies, Inc. 11. Any person who fails to object in the manner prescribed above shall be deemed to have waived such objection and shall be forever barred from raising such objection or any other objection to the fairness, adequacy or reasonableness of the Settlement or the fee application in these or any other actions or proceedings. 12. Pending final approval of this Settlement, plaintiffs, all current shareholders of Triarc, and all members of the Class are enjoined from commencing or prosecuting this action or any other action asserting claims, either directly or in any other capacity, against any defendant herein that have been or could have been asserted, or that arise from or relate to any of the matters or transactions referred to in the Action. 13. All discovery and all other pretrial proceedings in the Action, except for such proceedings ordered by the Court with respect to approval of the Settlement, are stayed and suspended until further order of the Court. 14. If the Settlement provided for in the Stipulation shall be approved by the Court following the Settlement Hearing, an Order and Final Judgment shall be entered substantially in the form attached as Exhibit C to the Stipulation. 15. If (a) the Court declines, in any respect, to enter the Order and Final Judgment in substantially the form provided for in the Stipulation and any of the parties fails to consent to the entry of another form of order in lieu thereof, or (b) the Court disapproves the Settlement proposed in the Stipulation, in any material respect, including any amendments thereto agreed upon by all of the parties; or (c) the Court approves the Settlement proposed in the Stipulation, including any amendment thereto approved by all the parties, but such approval is reversed, in any material respect, on appeal or petition for writ of certiorari and such reversal becomes final by a lapse of time or otherwise; the Stipulation, including any amendment thereof, shall be of no further force and effect and the Stipulation and any amendment thereof and the Settlement proposed therein shall be null and void without prejudice to any party thereto and may not be introduced as evidence or referred to in any proceedings, and each party shall be restored to his, her or its respective position as it existed prior to the execution of the Stipulation. 16. The Stipulation and all negotiations, statements, proceedings and documents related to it are not, and shall not be construed to be, an admission by any of the parties respecting the validity or the invalidity of any of the claims asserted in the Action, or of the liability of any party with respect to any such claims or any alleged wrongdoing whatsoever, and shall not be offered by any party or person for any evidentiary purpose, including as an admission of any such liability or wrongdoing or for the validity or invalidity of any of the claims in the Action or any other action. Dated: ____________ ___, 2000 ------------------------- Vice Chancellor Exhibit B IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - -------------------------------------x IN RE TRIARC COMPANIES, INC. Consolidated Civil Action No. 15746-NC CLASS AND DERIVATIVE LITIGATION - -------------------------------------x NOTICE OF PENDENCY OF CLASS AND DERIVATIVE ACTION, PROPOSED CLASS ACTION DETERMINATION, PROPOSED SETTLEMENT OF CLASS AND DERIVATIVE ACTION, SETTLEMENT HEARING AND RIGHT TO APPEAR TO: ALL PERSONS WHO HELD SHARES OF TRIARC COMPANIES, INC. ("TRIARC") COMMON STOCK ON APRIL 25, 1994, APRIL 25, 1995, APRIL 23, 1996, APRIL 21, 1997, MARCH 25, 1998, OR AUGUST 11, 1999, OR WHO ARE CURRENT TRIARC SHAREHOLDERS SETTLEMENT HEARING This Notice is to inform you of the proposed settlement (the "Settlement") of the above-captioned class and derivative action and of the hearing (the "Settlement Hearing") to be held on _____, __ 2000, at ____ __.m., before The Honorable Stephen P. Lamb, Vice Chancellor, of the Delaware Court of Chancery (the "Court"), Daniel L. Herrmann Courthouse, 1020 North King Street, Wilmington, Delaware 19801. The purpose of the Settlement Hearing is to (i) determine whether this Notice constitutes the best notice practicable under the circumstances in compliance with Rules 23(c)(2) and 23.1 of this Court; (ii) determine whether the Action should be maintained as a Class Action pursuant to Rules 23(a) and 23(b) of this Court; (iii) determine whether the Court should approve the proposed Settlement as being fair, reasonable and adequate and enter a judgment that will, among other things, dismiss the Action with prejudice and release the Released Claims (as defined below); (iv) consider the application of plaintiffs' counsel for an award of attorneys' fees and reimbursement of costs and expenses; and (v) consider such other matters as the Court may deem appropriate. THE FOLLOWING RECITATION DOES NOT CONSTITUTE THE FINDINGS OF THE COURT OF CHANCERY. IT IS BASED ON THE STATEMENTS OF THE PARTIES AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES BACKGROUND In Triarc's Proxy Statement dated May 9, 1994 for its 1994 annual meeting of shareholders, Triarc's shareholders as of the record date of April 25, 1994 were asked to approve amendments to Triarc's Equity Participation Plan which, among other things, increased the number of stock options then subject to grant. The 1994 Proxy Statement further disclosed that, in April 1994, the Company's Compensation Committee had approved the grant of "Performance Stock Options" in the aggregate amount of 3.5 million shares of Class A common stock, consisting of 2.1 million shares to defendant Nelson Peltz and 1.4 million shares to defendant Peter May (the "Compensation Grant"), subject to approval by shareholders of the proposed amendments to the Plan. Peltz and May were, at the time, members of Triarc's Board of Directors, and its principal executive officers, and together controlled approximately 25% of Triarc's outstanding common shares. The Triarc shareholders approved the proposed amendments to the Plan at the Company's June 4, 1994 Annual Meeting of Shareholders. On June 19, 1997, June 24, 1997 and August 28, 1997, three derivative and class actions were filed in the Delaware Court of Chancery. The complaints alleged, in substance, that Triarc's directors named as defendants had breached their fiduciary duties in connection with awards of compensation made to Peltz and May subsequent to the Compensation Grant, and violated alleged representations made to Triarc's shareholders in the 1994 Proxy Statement and alleged undertakings of the Board to refrain from awarding certain types of compensation to Peltz and May for the six years commencing April 1993. Plaintiffs later voluntarily dismissed their claims against defendants Pallot, Prendergast, Kelley, Kerger and McCarthy. The plaintiff in one of the three Delaware actions dismissed that action voluntarily to pursue a pending federal court case in the District Court for the Southern District of New York. That action has been held in abeyance pending the outcome of this case. The defendants will seek to have that case dismissed if this settlement is approved. The two remaining Delaware cases were then consolidated (the "Action") and a Consolidated Amended Class Action and Derivative Complaint (the "Amended Complaint") was filed, asserting additional claims based upon alleged misrepresentations in the 1994 Proxy Statement. The Amended Complaint purported to assert claims derivatively on behalf of Triarc, and on behalf of a putative class of all persons who held shares of Triarc common stock on April 25, 1994, the record date for voting on the matters to be voted on at Triarc's 1994 Annual Meeting, and their successors in interest and transferees (except defendants, members of their immediate families and any entity in which a defendant has a controlling interest). In Count I of the Amended Complaint, plaintiffs asserted derivative claims in connection with alleged improper awards of compensation, in excess of the Compensation Grant, that the directors of Triarc caused Triarc to grant to defendants Peltz and May, which plaintiffs claim were contrary to explicit representations made to Triarc's shareholders in the 1994 Proxy Statement. In Count II of the Amended Complaint, plaintiffs asserted, alternatively, derivative and class claims against the directors of Triarc for allegedly disseminating materially false and deceptive statements with regard to the Compensation Grant and for allegedly failing to disclose certain material information in the 1994 Proxy Statement with respect to the compensation of defendants Peltz and May, which plaintiffs contend rendered invalid all matters approved by the shareholders at Triarc's 1994 Annual Meeting relating to the Compensation Grant. Plaintiffs have reviewed and analyzed thousands of pages of documents obtained during discovery from defendants and third party Towers Perrin, Triarc's consultant with respect to the Compensation Grant. They also conducted the depositions of defendants Peltz, May, Jaffe, Chajet, Tsai and Schwab, as well as Messrs. Pallot and Kerger. Plaintiffs were preparing their motion for summary judgment when, after extensive discussions regarding the possibility of settlement, on March 20, 2000, the parties entered into a Memorandum of Understanding for the settlement of the Action. THE SETTLEMENT If the Court approves the Settlement: 1. a. Peltz and May shall, jointly and severally, sign and deliver to Triarc a Promissory Note (the "Note") in the principal amount of Five Million Dollars ($5,000,000.00), dated as of April 1, 2000, payable March 31, 2003. The Note shall bear interest at the rate of 6% per annum, payable annually on March 31 of each year (an "Interest Payment Date") or, if any such date shall not be a business day, on the next succeeding business day, beginning on the first Interest Payment Date subsequent to the Effective Date (including payment in arrears, if applicable). The interest rate on the Note will be adjusted on each Interest Payment Date, upward or downward, with respect to the succeeding year, based upon the changes, if any, between LIBOR on April 1, 2000 and on the Interest Payment Date. There shall be two mandatory prepayments of the Note: one-third of the principal amount of the Note shall be prepaid on March 31, 2001 and one-third of the principal amount of the Note shall be prepaid on March 31, 2002. Peltz and May may, at their option, prepay all or any portion of the unpaid amount of the Note, at any time or times, by paying an amount equal to the outstanding principal amount of the Note which they wish to prepay, together with interest accrued and unpaid thereon, without penalty or premium. The entire unpaid principal amount of the Note, plus accrued interest pro rata, shall become due and payable 30 days after the occurrence of a so-called "change of control" transaction. For purposes of this Note, a "change of control" shall have the meaning set forth in the 1998 Equity Participation Plan of Triarc; b. Peltz and May shall agree to (and Triarc will accept) the cancellation, in the aggregate, of 775,000 of the Performance Options that Triarc issued to Peltz and May, individually, dated June 9, 1994; and c. Defendants (and not Triarc) shall pay, or cause to be paid, plaintiffs' counsel's fees and reimbursement of costs and expenses, to the extent allowed by the Court, as set forth in the Settlement Agreement, but in no event in excess of $2,500,000. REASONS FOR THE SETTLEMENT Plaintiffs, through their counsel, have made a thorough investigation of the facts and circumstances relevant to the Action, and have conducted discovery and investigation of the law and the facts during the prosecution of the Action, including, inter alia: (i) serving document requests upon all defendants; (ii) reviewing and analyzing thousands of pages of documents obtained during discovery and from plaintiffs' investigation; (iii) conducting several depositions as described above; (iv) researching the facts and law pertaining to the claims asserted in the Action; and (v) retaining a financial consultant to assist plaintiffs in evaluating the claims asserted in the Action. While plaintiffs believe that the claims asserted in the Action have merit, they also believe that the Settlement is fair and reasonable because it provides substantial benefits to Triarc and its shareholders and avoids the continued risk of litigation. Plaintiffs have considered the expense and length of time necessary to prosecute the Action through trial, the attendant risks of litigation, the defenses asserted by and available to defendants, the uncertainties of the outcome of the Action and the fact that resolution of the Action, even if favorable to plaintiffs, would likely be submitted for appellate review, as a consequence of which it would be many years before there would be a final adjudication of the Action. In light of these considerations, the plaintiffs, through their counsel, have engaged in arm's-length negotiations with counsel for defendants in an attempt to achieve the certainty of a positive outcome of the Action and have determined that it is in the best interests of Triarc and the Class to settle the Action on the terms set forth in the Stipulation. Each of the defendants has at all times vigorously denied, and continues to deny, that they have breached any fiduciary duties, or that they have committed, or have threatened to commit, any wrongful act or violation of law of any nature whatsoever in connection with any of the matters alleged, or which could have been alleged, in the Action and any matter relating to the Plan or stock options granted thereunder. The defendants, however, consider it desirable that the Action be settled and dismissed on the merits and with prejudice because the Settlement will: provide monetary and other substantial benefits to Triarc and, indirectly, to its shareholders; terminate the substantial expense, inconvenience and distraction of burdensome and protracted litigation; finally resolve the Action; dispel any uncertainty that may exist as a result of such litigation; and permit the continued operation of Triarc's affairs unhindered by expensive litigation and by diversion of the personnel of Triarc. Defendants believe that it is in the best interest of Triarc to accomplish these goals. PLAINTIFFS' APPLICATION FOR ATTORNEYS' FEES At or before the Settlement Hearing, plaintiffs' counsel of record in the Action will apply to the Court for an award of attorneys' fees and reimbursement of costs and expenses (including expert fees and expenses) not to exceed $2,500,000. Defendants have agreed that they will not oppose such application for attorneys' fees and expenses. Any such attorneys' fees and expenses awarded by the Court up to $2,500,000 shall be paid solely and exclusively by defendants or their insurers. No part of the fees or expenses awarded by the Court shall be paid by Triarc. DISMISSAL OF THE ACTION AND RELEASE OF CLAIMS The parties jointly will move the Court to enter an Order and Final Judgment: (a) determine that this Notice complies with Rules 23 and 23.1 of this Court; (b) certifying the Action as a class action; (c) approving the Settlement as being fair, reasonable and adequate and directing consummation of the Settlement, in accordance with the terms and conditions of the Stipulation; (d) dismissing the Action with prejudice on the merits, without costs except as provided in the Stipulation, and releasing the Released Claims (as defined herein and in the Stipulation), such dismissal and release to be subject only to compliance by the parties with the terms and conditions of the Stipulation and any order of the Court with reference to the Settlement; (e) permanently barring and enjoining Triarc, members of the Class, and stockholders of Triarc from commencing or prosecuting any action asserting any of the Released Claims, whether directly, derivatively, individually, as a representative, or in any other capacity. (f) awarding the plaintiffs' counsel such fees and reimbursement of costs and expenses as the Court deems appropriate; and (g) reserving jurisdiction over all matters related to the administration and consummation of the Settlement. As of the Effective Date (defined below) all individual, class and derivative claims, rights, demands, suits, matters, issues, actions, or causes of action, by or on behalf of the plaintiffs, the Class, Triarc and any of its shareholders (collectively, the "Releasors") against the defendants (including all persons formerly named as defendants) and any of their respective present or former officers, directors, stockholders, employees, agents, attorneys, representatives, advisors, financial advisors, lenders, insurers, affiliates, parents, subsidiaries, heirs, personal representatives, estates, administrators, predecessors, successors, and assigns (collectively, the "Releasees"), whether known or unknown, under state, federal or other law, including but not limited to the federal securities laws, that were asserted or could have been asserted in the Action, arising out of or relating to the subject matter of the Action, including, without limitation, allegations of breaches of fiduciary duty or misrepresentations and/or omissions in connection with (i) Triarc's 1994 Proxy Statement circulated, among other things, to obtain shareholder approval of amendments to the Equity Participation Plan, and (ii) approving subsequent grants of options and other compensation to Nelson Peltz and Peter May in addition to the Performance Options (including but not limited to cash bonuses awarded in August 1996) and disclosure or non-disclosure relating thereto (the "Released Claims") will be compromised, settled, released, discharged, and dismissed with prejudice. By Order of the Court, pending final determination of whether the Settlement should be approved, all Class members and shareholders of Triarc are enjoined from commencing or prosecuting this or any other Action asserting claims, either directly, individually, derivatively, representatively, or in any other capacity, against Triarc or any Defendant herein which have been or could have been asserted, arise from or relate to any of the matters or transactions referred to in the Amended Complaint in this Action. On the Effective Date (defined below), the Released Claims shall be completely and finally compromised, settled, released, discharged, and the Action shall be dismissed with prejudice. EFFECTIVE DATE OF THE SETTLEMENT The "Effective Date" of the Settlement shall be the day after the day on which the Final Judgment become final. The Final Judgment shall be deemed to become final upon the latest to occur of the passage of thirty (30) days after entry of the Final Judgment without any notice of appeal having been filed, or, if there is an appeal of the Final Judgment, the date on which any subsequent affirmation thereof is no longer subject to further appellate review. CLASS CERTIFICATION Pursuant to the Settlement Agreement, the parties will jointly move the Court, pursuant to Chancery Court Rules 23(a) and 23(b), to certify, for settlement purposes only, a class (the "Class") consisting of all persons who owned shares of Triarc common stock on any of the following dates, which are the record dates for voting on matters to be voted upon at Triarc's Annual Meetings for the years 1994 through 1999, inclusive: April 25, 1994, April 25, 1995; April 23, 1996; April 21, 1997; March 25, 1998; and August 11, 1999. Excluded from the class are the individual defendants, including persons previously named as defendants in the Action, and members of their immediate families, and any entity in which a defendant has a controlling interest. SETTLEMENT HEARING A Settlement Hearing has been scheduled before The Honorable Stephen P. Lamb, Vice Chancellor, of the Delaware Court of Chancery, in the Daniel L. Herrmann Courthouse, 1020 North King Street, Wilmington, Delaware 19801, on __________, 2000 at _______ a.m., to determine whether: (i) this Notice complies with the requirements of Chancery Court Rules 23 and 23.1; (ii) the Action shall be maintained as a Class Action; (iii) the Stipulation and Settlement it contemplates is fair, reasonable and adequate and in the best interests of Triarc and its shareholders and the Class and should be approved by the Court; (iv) an Order and Final Judgment should be entered dismissing the Action with prejudice as to all defendants on the merits; and (iv) the application by plaintiffs for an award of attorneys' fees and expenses should be approved. The Court has the right to approve the Settlement with modifications and without further notice to the Class or to current Triarc stockholders. The Court may also adjourn the Settlement Hearing or any adjournment thereof without further notice other than by announcement at the Settlement Hearing or any adjournment thereof. Any Class member who objects to the class certification, and any Class member or current Triarc stockholder who objects to the Stipulation, the Settlement, the judgment and release to be entered in the Action, or the application for attorneys' fees and expenses, or who otherwise wishes to be heard, may appear in person or by counsel at the Settlement Hearing and present any evidence or argument that may be proper and relevant. To do so, however, you must, not later than 10 business days prior to the Settlement Hearing, unless the Court, in its discretion, otherwise directs, file with the Register in Chancery: (i) a written statement containing your name, address, telephone number, the number of shares of Triarc's common stock you own or owned and a detailed statement of your specific objections or comments on the proposed Settlement or any other matter before the Court, and (ii) the grounds for your objection or the reasons that you desire to appear and be heard (including all documents or writings which you want the Court to consider). On or before the same date you must also serve by overnight delivery or hand such written statement and supporting papers on the following counsel: Joseph A. Rosenthal, Esq. Rosenthal Monhait Gross & Goddess, P.A. 919 North Market Street Suite 1401 Mellon Bank Center Wilmington, Delaware 19801 (302) 656-4433 Counsel for Plaintiffs Jonathan Hurwitz, Esq. Paul Weiss Rifkind Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019 (212) 373-3000 Counsel for Defendants Nelson Peltz and Peter May Martin Tully, Esq. Morris, Nichols, Arsht & Tunnell 1201 North Market Street 18th Floor Wilmington, Delaware 19899-1347 (302) 658-9200 Counsel for Defendants Hugh L. Carey, Clive Chajet, Stanley R. Jaffe, Joseph A. Levato, David E. Schwab, II, Raymond S. Troubh and Gerald Tsai, Jr. and nominal defendant Triarc Companies, Inc. Unless the Court otherwise directs, no person shall be entitled to object to the class certification, the Settlement, the judgment and release to be entered thereunder, or the award of attorneys' fees and expenses to plaintiffs' counsel, or otherwise be heard, except by serving and filing written objections as described above. Any person who fails to object in the manner prescribed above shall be deemed to have waived such objection and shall be forever barred from raising such objection or any other objection to the class certification, the fairness, adequacy or reasonableness of the Settlement, or the fee and expense application in these or any other actions or proceedings. BANKS, BROKERS AND NOMINEES Persons who wish to obtain additional copies of this Notice should address a written request to: TO BE FILLED IN BY DEFENDANTS EXAMINATION OF PAPERS This notice merely summarizes the terms of the Stipulation and proceedings which have occurred in this Action. For a more detailed statement of the above, you are referred to the Stipulation and to the other papers on file in this litigation which may be inspected during regular business hours of each business day at the offices of the Register in Chancery, 1020 North King Street, Wilmington, Delaware 19801. Dated: _____________, 2000 BY ORDER OF THE COURT: ------------------------- Dianne M. Kempski Register in Chancery Exhibit C IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN AND FOR NEW CASTLE COUNTY - --------------------------------------x IN RE TRIARC COMPANIES, INC. Consolidated Civil Action No. 15746-NC CLASS AND DERIVATIVE LITIGATION - --------------------------------------x ORDER AND FINAL JUDGMENT The Stipulation of Settlement dated August ___, 2000 (the "Stipulation") in the above-captioned action (the "Action"), and the terms and conditions of the settlement contemplated thereby (the "Settlement"), having been presented at the Settlement Hearing on _________, 2000, pursuant to this Court's Order dated ___________, 2000 (the "Scheduling Order"), which Stipulation (along with the defined terms therein) is incorporated herein by reference, and it appearing that due notice of said hearing was given in accordance with the aforesaid Scheduling Order; the respective parties [and objectors] having appeared by their attorneys of record; the Court having heard and considered evidence in support of [and in opposition to] the proposed Settlement; the attorneys for the respective parties having been heard; and an opportunity to be heard having been given to all other persons requesting to be heard in accordance with the aforesaid Scheduling Order; the Court having determined that the Notice of proposed class and derivative settlement was adequate and sufficient; and the entire matter of the proposed Settlement having been heard and considered by the Court, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows: 1. The Notice of Pendency of Class Action, Proposed Class Action Determination, Proposed Settlement of Class and Derivative Action, Settlement Hearing and Right to Appear (the "Notice") which was mailed on August , 2000 to all members of the Class (as defined below) and all current shareholders of Triarc Companies Inc. ("Triarc") is hereby determined to be the best practicable notice under the circumstances and in full compliance with Rule 23 and Rule 23.1 of the Court of Chancery and the requirements of due process. 2. Due and adequate notice of the proceedings and of the settlement having been given with a full opportunity to be heard, it is hereby determined that the Class (defined below), Triarc, and all shareholders of Triarc and their successors in interest are bound by the Order and Final Judgment entered herein. 3. This case is certified and approved as a class action pursuant to Rules 23(a) and 23(b) of the Court of Chancery on behalf of all persons who owned shares of Triarc common stock at the close of business on any of the following dates, which are the record dates for voting on matters to be voted upon at Triarc's Annual Meetings for the years 1994 through 1999, inclusive: April 25, 1994, April 25, 1995, April 23, 1996, April 21, 1997, March 25, 1998, and August 11, 1999 (except defendants, including, but not limited to persons previously named as defendants in the Action, members of their immediate families and any entity in which a defendant has a controlling interest) (the "Class"). 4. The Settlement is hereby approved and confirmed as being fair, reasonable and adequate to Triarc, its shareholders, and the Class. The parties to the Settlement are directed to consummate the Settlement in accordance with the terms and conditions set forth in the Stipulation, and the Register in Chancery is directed to enter and docket this Order and Final Judgment. 5. This Order and Final Judgment shall not constitute any evidence or admission by any party herein that any acts of wrongdoing have been committed by any of the parties to the Action and shall not be deemed to create any inference that there is any liability therefor. 6. The Action is hereby dismissed on the merits with prejudice as to all defendants (including defendants previously dismissed without prejudice) and against plaintiffs, Triarc, its shareholders, and members of the Class, with all parties to bear their own costs except as provided herein. 7. All individual, class and derivative claims, rights, demands, suits, matters, issues, actions, or causes of action, by or on behalf of the plaintiffs, the Class, Triarc and any of its shareholders (collectively, the "Releasors") against the defendants (including all persons formerly named as defendants) and any of their respective present or former officers, directors, stockholders, employees, agents, attorneys, representatives, advisors, financial advisors, lenders, insurers, affiliates, parents, subsidiaries, heirs, personal representatives, estates, administrators, predecessors, successors, and assigns (collectively, the "Releasees"), whether known or unknown, under state, federal or other law, including but not limited to the federal securities laws, that were asserted or could have been asserted in the Action, arising out of or relating to the subject matter of the Action, including, without limitation, allegations of breaches of fiduciary duty or misrepresentation and/or omissions in connection with (i) Triarc's 1994 Proxy Statement circulated, among other things, to obtain shareholder approval of amendments to the Equity Participation Plan, and (ii) approving subsequent grants of options and other compensation to Nelson Peltz and Peter May in addition to the Performance Options (including but not limited to cash bonuses awarded in August 1996) and disclosure or nondisclosure relating thereto (the "Released Claims") are hereby compromised, settled, released, discharged, and dismissed with prejudice. 8. Triarc, members of the Class, and all shareholders of Triarc are hereby forever enjoined from commencing or prosecuting any action asserting any of the Released Claims, whether directly, derivatively, individually, as a representative, or in any other capacity. 9. This Judgment shall be final and conclusive with respect to the Released Claims. 10. Attorneys' fees in the aggregate amount of _______ and reimbursement of costs and expenses in the aggregate amount of $___________ are awarded to counsel for plaintiffs in the Action payable to Wolf Popper LLP on behalf of all plaintiffs in accordance with the terms of the Stipulation, which sums the Court finds to be fair and reasonable. ----------------------------- Vice Chancellor Dated: ___________, 2000 -----END PRIVACY-ENHANCED MESSAGE-----