-----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, GL+ZgRJx3jDGaNBAuPPalHf6EDf4M/CaOg+NCuCjqJ3GLtGNGaHKNCRq2cMoCB6Q lsTzT6bt0OQUbfPG68vGpA== 0000950142-04-002258.txt : 20040628 0000950142-04-002258.hdr.sgml : 20040628 20040628171114 ACCESSION NUMBER: 0000950142-04-002258 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040626 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIARC COMPANIES INC CENTRAL INDEX KEY: 0000030697 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING & DRINKING PLACES [5810] IRS NUMBER: 380471180 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02207 FILM NUMBER: 04886007 BUSINESS ADDRESS: STREET 1: 280 PARK AVENUE STREET 2: 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 212-451-3000 MAIL ADDRESS: STREET 1: 280 PARK AVENUE STREET 2: 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: DWG CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DEISEL WEMMER GILBERT CORP DATE OF NAME CHANGE: 19680820 FORMER COMPANY: FORMER CONFORMED NAME: DWG CIGAR CORP DATE OF NAME CHANGE: 19680820 8-K 1 form8k_062804.txt CURRENT REPORT 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) June 26, 2004 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) 280 Park Avenue New York, NY 10017 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 451-3000 N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events and Regulation FD Disclosure. On June 26, 2004, Triarc Companies, Inc. ("Triarc") entered into a definitive agreement to acquire a majority interest in Deerfield & Company LLC ("Deerfield"), a Chicago-based investment manager, representing as of the date hereof approximately 64% of the outstanding membership interests and in excess of 90% of the outstanding voting power, for a cash purchase price of approximately $86.5 million, subject to adjustment as provided in the definitive purchase agreement. The remainder of the economic and voting interests in Deerfield will be retained or owned by senior management of Deerfield. Upon consummation of the acquisition, Triarc will be entitled to designate a majority of the members of the board of directors of Deerfield and Deerfield's current senior management, including its Chairman and Chief Executive Officer Gregory H. Sachs, its President Scott Roberts and its Chief Investment Officer Jonathan Trutter, and portfolio management teams will remain intact and will continue to oversee Deerfield's day-to-day operations. As further described in the definitive agreements, commencing on the fifth anniversary of the closing of the transaction, Triarc will have certain rights to acquire the membership interests of Deerfield owned by Mr. Sachs (the "Sachs Interest") and Mr. Roberts (the "Roberts Interest"), which represent in the aggregate as of the date hereof approximately 35% of the outstanding membership interests. In addition, commencing on the third anniversary of the closing of the transaction, Messrs. Sachs and Roberts will have certain rights to require Triarc to acquire the Sachs Interest and the Roberts Interest. In each case, the rights are exercisable at a price equal to the then current fair market value of the Sachs Interest or the Roberts Interest (subject to certain exceptions in the case of the Sachs Interest). Triarc's right to acquire the Sachs Interest and the Roberts Interest, and Messrs. Sachs' and Roberts' rights to require Triarc to acquire such interests, may be accelerated in full upon the occurrence of certain specified events. In connection with the acquisition, Triarc has also committed to invest $100 million to seed a new multi-strategy hedge fund to be managed by Deerfield. The transaction, which is currently expected to be consummated in the 2004 third quarter, is subject to customary closing conditions for transactions of this type, including, without limitation, the receipt by Deerfield of certain third party consents and other conditions set forth in the definitive agreement. Deerfield offers a diverse range of alternative fixed income strategies to institutional investors. As of April 1, 2004, Deerfield, through its operating subsidiary, had over $8 billion in assets under management. Deerfield generated revenues of approximately $36.9 million for the 12 months ended December 31, 2003. A copy of the press release announcing the transaction and certain definitive agreements relating to the transaction are being filed as exhibits hereto and are incorporated herein by reference. Item 7. Financial Statements and Exhibits. Filed herewith are certain agreements and documents entered into by, or otherwise relating to, the Registrant. (c) Exhibits. 2 2.1 - Purchase Agreement, dated as of June 26, 2004, by and among Triarc Companies, Inc., Sachs Capital Management LLC, Deerfield Partners Fund II LLC, Scott A. Roberts, Marvin Shrear and Gregory H. Sachs. 10.4 - Fourth Amended and Restated Operating Agreement of Deerfield & Company LLC, dated as of June 26, 2004. 10.5 - Commitment Agreement, dated as of June 26, 2004, by and among Triarc Companies, Inc., Sachs Capital Management LLC, Scott A. Roberts and Deerfield Capital Management LLC. 99.1 - Press release dated June 28, 2004. 3 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TRIARC COMPANIES, INC. By: /s/ Stuart Rosen ------------------------------ Name: Stuart Rosen Title: Senior Vice President and Secretary Date: June 28, 2004 4 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - --- ----------- 2.1 - Purchase Agreement, dated as of June 26, 2004, by and among Triarc Companies, Inc., Sachs Capital Management LLC, Deerfield Partners Fund II LLC, Scott A. Roberts, Marvin Shrear and Gregory H. Sachs. 10.4 - Fourth Amended and Restated Operating Agreement of Deerfield & Company LLC, dated as of June 26, 2004. 10.5 - Commitment Agreement, dated as of June 26, 2004, by and among Triarc Companies, Inc., Sachs Capital Management LLC, Scott A. Roberts and Deerfield Capital Management LLC. 99.1 - Press release dated June 28, 2004. 5 EX-2 2 ex2-1form8k_062804.txt EXHIBIT 2.1 EXHIBIT 2.1 ----------- EXECUTION COPY ================================================================================ PURCHASE AGREEMENT by and among TRIARC COMPANIES, INC., SACHS CAPITAL MANAGEMENT LLC, and THE OTHER PARTIES NAMED HEREIN related to the purchase of certain interests in DEERFIELD & COMPANY LLC ----------------------------------- DATED AS OF JUNE 26, 2004 ----------------------------------- ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I PURCHASE AND SALE OF PURCHASED INTERESTS.............................2 1.1 Purchase and Sale of the Purchased Interests...............2 1.2 Consideration..............................................3 1.3 the Closing................................................3 1.4 Further Assurances.........................................4 1.5 Post-Closing Adjustment....................................4 1.6 Allocation of Purchase Price...............................7 ARTICLE II SELLERS' REPRESENTATIVE.............................................7 2.1 Sellers' Representative....................................7 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS REGARDING THE COMPANY........................................................8 3.1 Organization and Qualification of the Company and Its Subsidiaries...........................................8 3.2 Authorization; No Contravention............................8 3.3 Governmental Authorization; Third Party Consents...........9 3.4 Litigation.................................................9 3.5 Compliance With Laws......................................10 3.6 Capitalization............................................12 3.7 Subsidiaries; Investments.................................12 3.8 Real Property.............................................12 3.9 Assets Under Management; Strategic Financing Agreements...13 3.10 No Default or Breach; Contractual Obligations.............18 3.11 Financial Statements......................................20 3.12 Taxes.....................................................21 3.13 Contingent Revenue........................................24 3.14 Absence of Certain Changes................................24 3.15 Ordinary Course...........................................24 3.16 Banking and Brokerage Relations...........................25 3.17 Intellectual Property.....................................25 3.18 Title to Assets...........................................27 3.19 Liabilities...............................................27 3.20 Business; Registrations...................................28 3.21 Insurance.................................................29 3.22 Finder's Fee..............................................29 3.23 Books and Records.........................................29 3.24 Transactions With Interested Persons......................30 3.25 Employee Benefit Plans....................................31 3.26 Employees; Labor Matters..................................33 3.27 Outstanding Borrowing.....................................33 3.28 Environmental Matters.....................................33 3.29 Trading Activities........................................34 i 3.30 Code of Ethics Policy.....................................34 3.31 Proxy Voting Policies.....................................34 3.32 Anti-Money Laundering Policy..............................34 3.33 Exclusivity of Representations............................34 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS......................35 4.1 Title to the Purchased Interests..........................35 4.2 Organization; Authority of the Sellers....................35 4.3 Governmental Authorization; Third Party Consents..........36 4.4 Litigation................................................36 4.5 Finder's Fee..............................................36 4.6 Investment Advisory Representation........................37 ARTICLE V COVENANTS OF THE SELLERS............................................37 5.1 Consents of Clients, New Clients and Cdo Consent Parties..37 5.2 Advisers Act Authorizations...............................40 5.3 Efforts and Actions to Cause Closing to Occur.............40 5.4 Conduct of Business.......................................40 5.5 Financial Statements......................................44 5.6 Preservation of Business and Assets.......................45 5.7 Access; Investigation.....................................45 5.8 Books and Records.........................................46 5.9 No Solicitation of Other Offers...........................46 5.10 Confidentiality...........................................47 5.11 Compliance Procedures and Practices.......................47 5.12 Section 754 Election......................................47 5.13 Key-Man Insurance.........................................48 5.14 Sarbanes-oxley Compliance.................................48 5.15 Keep Plan.................................................48 5.16 Other Actions.............................................48 5.17 Sla Purchase Agreement; Sumitomo Letter...................48 5.18 2004 Bonuses..............................................49 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................49 6.1 Organization..............................................49 6.2 Authority.................................................49 6.3 Governmental Authorization; Third Party Consents..........50 6.4 Litigation................................................50 6.5 Sufficiency of Funds......................................50 6.6 Acquisition for Investment................................50 6.7 Finder's Fee..............................................50 6.8 Exclusivity of Representations............................51 ARTICLE VII COVENANTS OF THE PURCHASER........................................51 7.1 Efforts and Actions to Cause Closing to Occur.............51 7.2 Confidentiality...........................................51 ii 7.3 Directors' and Officers' Indemnification and Insurance....52 7.4 Employees.................................................52 7.5 Contact With Investors, Clients and Other Persons.........52 7.6 Books and Records.........................................53 7.7 Post-Closing Restrictions On Distributions................53 7.8 Sachs Additional Bonus....................................53 ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER...................54 8.1 Litigation; No Opposition.................................54 8.2 Representations and Warranties............................54 8.3 Performance of Obligations................................54 8.4 Sellers' Certificate......................................55 8.5 Client Consents...........................................55 8.6 Other Approvals...........................................56 8.7 Restated Operating Agreement..............................56 8.8 Commitment Agreement......................................56 8.9 Sla Purchase Agreement....................................56 8.10 Sumitomo Letter...........................................56 8.11 Employment Agreements.....................................56 8.12 Corporate Services Agreement..............................57 8.13 Delivery..................................................57 8.14 Keep Plan.................................................57 8.15 [Intentionally Omitted]...................................57 8.16 Related Party Agreements..................................57 8.17 Trutter Waiver............................................57 8.18 Accounts Receivable and Payable...........................57 8.19 Opinion...................................................58 8.20 Good Standing.............................................58 8.21 Firpta Certificates.......................................58 8.22 Strategic Financing Agreements............................58 8.23 Termination...............................................58 ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE SELLERS...........................59 9.1 No Litigation; No Opposition..............................59 9.2 Representations and Warranties............................59 9.3 Performance of Obligations................................59 9.4 Purchaser's Certificate...................................59 9.5 Governmental Approvals....................................59 9.6 Restated Operating Agreement..............................60 9.7 Commitment Agreement......................................60 9.8 Sla Purchase Agreement....................................60 9.9 Opinion...................................................60 9.10 Good Standing.............................................60 9.11 Voting Agreement..........................................60 9.12 Termination...............................................60 iii ARTICLE X TERMINATION OF AGREEMENT; RIGHTS TO PROCEED.........................60 10.1 Termination...............................................60 10.2 Effect of Termination.....................................61 ARTICLE XI SURVIVAL; GENERAL INDEMNIFICATION..................................61 11.1 Survival..................................................61 11.2 Obligation of the Sellers to Indemnify....................62 11.3 Limitations On Indemnification by the Sellers.............64 11.4 Obligation of the Purchaser to Indemnify..................65 11.5 Limitations On Indemnification by the Purchaser...........66 11.6 Procedure for Indemnification.............................66 11.7 Sole and Exclusive Remedy.................................69 11.8 Treatment of Indemnification Payments.....................69 11.9 Right of Off-Set/Set-off..................................69 ARTICLE XII GUARANTY OF SCM AND DPF OBLIGATIONS...............................69 12.1 Guaranty of Scm and Dpf Obligations.......................69 12.2 Representations and Warranties of the Guarantor...........71 ARTICLE XIII DEFINITIONS......................................................72 13.1 Definitions...............................................72 ARTICLE XIV MISCELLANEOUS.....................................................85 14.1 Fees and Expenses.........................................85 14.2 Entire Agreement..........................................85 14.3 Severability..............................................85 14.4 Amendment; Waiver.........................................86 14.5 Notices...................................................86 14.6 Parties in Interest.......................................87 14.7 Assignment................................................87 14.8 Governing Law.............................................88 14.9 Consent to Jurisdiction...................................88 14.10 Waiver of Jury Trial......................................89 14.11 Specific Enforcement......................................89 14.12 No Waiver.................................................89 14.13 Negotiation of Agreement..................................89 14.14 Headings..................................................89 14.15 Counterparts..............................................89 14.16 Usage.....................................................90 iv ANNEXES Annex A SLA Purchase Agreement Annex B Purchased Interests Annex C Employment Agreements Annex D Restated Operating Agreement Annex E Sumitomo Letter Annex F Commitment Agreement Annex G Trutter Waiver Annex H-1 Assumed Indebtedness Annex H-2 Excluded Indebtedness Annex I Annex Assets Annex J-1 Form of Client Consent Annex J-2 CDO Consent Parties Annex J-3 Form of CDO Consent Letter Annex J-4 Form of Hedge Fund Consent Annex K Form of KEEP Plan Termination Release Annex L Forms of Opinions of Sellers' Counsel Annex M Forms of Opinions of Purchaser's Counsel Annex N Corporate Services Agreement v PURCHASE AGREEMENT This PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of June 26, 2004, by and among Triarc Companies, Inc., a Delaware corporation (the "PURCHASER"), Sachs Capital Management LLC, a Delaware limited liability company ("SCM"), Deerfield Partners Fund II LLC, a Delaware limited liability company ("DPF"), Scott A. Roberts ("ROBERTS") and Marvin Shrear ("SHREAR," and together with SCM, DPF and Roberts, the "SELLERS") and Gregory H. Sachs ("SACHS"). W I T N E S S E T H: WHEREAS, certain of the Sellers hold Class A Membership Interests (the "CLASS A INTERESTS") and others of the Sellers hold Class B Capital Interest Membership Interests or Class B Profits Only Membership Interests (the "CLASS B INTERESTS") in Deerfield & Company LLC, an Illinois limited liability company (the "COMPANY"); WHEREAS, Deerfield Capital Management LLC, a Delaware limited liability company ("DCM") is engaged in the business of providing Investment Management Services (as defined below), and is a wholly owned subsidiary of the Company; WHEREAS, as a condition precedent to the Purchaser's willingness to enter into this Agreement and consummate the transactions contemplated hereby, DPF has entered into on the date hereof a Purchase Agreement with SLA Investments, Inc., a Delaware corporation ("SLA"), a copy of which is attached hereto as Annex A (the "SLA PURCHASE AGREEMENT"), pursuant to which DPF has agreed to acquire immediately prior, but subject, to the Closing the 18.843% Class A Interests owned by SLA (the "SLA INTEREST"), on the terms and conditions set forth in the SLA Purchase Agreement; WHEREAS, upon the terms and conditions set forth in this Agreement, each of the Sellers proposes to sell to the Purchaser, and the Purchaser desires to purchase from each of the Sellers, the aggregate number of Class A Interests and Class B Interests set forth opposite the name of such Seller on ANNEX B hereto (collectively, the "PURCHASED INTERESTS") for the aggregate purchase price set forth herein; WHEREAS, as a condition precedent to the Purchaser's willingness to enter into this Agreement and consummate the transactions contemplated hereby, certain employees of the Company and its Subsidiaries have entered into Employment Agreements with the Company and/or DCM in the forms attached hereto as ANNEX C (collectively, the "EMPLOYMENT AGREEMENTS"), in each case dated as of the date hereof and to become effective as of (and subject to) the Closing; WHEREAS, as a condition precedent to the Purchaser's willingness to enter into this Agreement and consummate the transactions contemplated hereby, each of the Purchaser, the Sellers (other than Shrear), Deerfield Partners Fund III LLC, a Delaware limited liability company, Jonathan W. Trutter ("TRUTTER") and the Company has executed and delivered a Fourth Amended and Restated Operating Agreement of the Company in the form attached hereto as ANNEX D (the "RESTATED OPERATING AGREEMENT"), dated as of the date hereof and to become effective as of (and subject to) the Closing; WHEREAS, as a condition precedent to the Purchaser's willingness to enter into this Agreement and consummate the transactions contemplated hereby, each of LIBOR Enhanced Arbitrage Portfolio Ltd., a Bahamas company ("LEAP"), DPF, DCM and Sumitomo Life Insurance Company ("SUMITOMO Life") has entered into a letter agreement in the form attached hereto as ANNEX E (the "SUMITOMO Letter"), dated and effective as of the date hereof; WHEREAS, as a condition precedent to the willingness of the Sellers to enter into this Agreement and consummate the transactions contemplated hereby, simultaneously with the execution and delivery of this Agreement, each of DCM, the Purchaser, SCM and Roberts has entered into a Commitment Agreement, in the form attached hereto as ANNEX F (the "COMMITMENT AGREEMENT"), dated as of the date hereof and to become effective as of (and subject to) the Closing, whereby the Purchaser has agreed, on the terms and subject to the conditions set forth therein, to invest on the Closing Date $100 million, and each of SCM and Roberts has agreed, on the terms and subject to the conditions set forth therein, to invest on the Closing Date 10% of the after-tax portion of the Estimated Purchase Price (as defined herein) to be received by SCM and Roberts, respectively, pursuant to this Agreement; WHEREAS, as a condition precedent to the Purchaser's willingness to enter into this Agreement and consummate the transactions contemplated hereby, each of the Company, DCM and Trutter has executed and delivered a waiver of any "tag-along" rights under his existing employment agreement or otherwise with respect to any equity or profits interests in the Company held by him to participate in the sale of the Purchased Interests contemplated by this Agreement, in the form attached hereto as ANNEX G (the "TRUTTER WAIVER"), dated as of the date hereof and to become effective as of (and subject to) the Closing; and WHEREAS, to induce the other parties to enter into this Agreement, each of the parties has agreed to make certain representations, warranties and covenants as set forth herein. NOW, THEREFORE, in order to consummate the transactions contemplated hereby, and in consideration of the mutual agreements set forth herein and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I PURCHASE AND SALE OF PURCHASED INTERESTS 1.1 PURCHASE AND SALE OF THE PURCHASED INTERESTS. Subject to the terms and conditions set forth herein, and in reliance on the representations, warranties and covenants set forth herein, at the Closing, each of the Sellers agrees to sell to the 2 Purchaser, and the Purchaser agrees to purchase from each of the Sellers, the Purchased Interests of such Seller. 1.2 CONSIDERATION. (a) Subject to adjustment under Sections 1.2(b) and 1.5, the aggregate consideration to be paid at the Closing by the Purchaser to the Sellers for all of the Purchased Interests shall be cash in an amount (as adjusted pursuant to Sections 1.2(b), and 1.5, the "PURCHASE PRICE") equal to the product of (x) the excess of (i) $145,000,000 OVER (ii) the aggregate principal amount of, together with all accrued and unpaid interest, premiums, penalties and other fees and charges payable on, the consolidated Indebtedness of the Company and its Subsidiaries outstanding as of the close of business on the Closing Date, including the items of such Indebtedness listed on ANNEX H-1 (the "ASSUMED INDEBTEDNESS AMOUNT"), excluding the aggregate principal amount of, together with all accrued and unpaid interest, premiums, penalties and other fees and charges payable on, the items of Indebtedness listed on ANNEX H-2 (the "EXCLUDED INDEBTEDNESS") and (y) 63.60%. The amount of the Estimated Purchase Price to be paid at the Closing by the Purchaser to each Seller shall be equal to the amount directed in writing by the Sellers' Representative prior to the Closing Date. (b) Not less than two Business Days prior to the Closing Date, the Sellers' Representative shall cause to be prepared and delivered to the Purchaser a certificate signed by the Sellers' Representative setting forth in reasonable detail the estimated Purchase Price payable at the Closing (the "ESTIMATED PURCHASE PRICE") based on (i) an estimate of the Assumed Indebtedness Amount and (ii) an estimate of the Closing Cash Amount (as defined in Section 1.5), in each case, determined in accordance with Section 1.5(a) as if such amounts were the final amounts, but based on the Sellers' Representative's review of the financial information then reasonably available to the Sellers' Representative and inquiries of personnel responsible for the preparation of the financial information of the Company and its Subsidiaries in the ordinary course. The determination of the Estimated Purchase Price shall be subject to the approval of the Purchaser at least one Business Day prior to the Closing Date, which approval shall not be unreasonably withheld or delayed. 1.3 THE CLOSING. Subject to the terms and conditions of this Agreement (including the provisions of Articles VIII and IX hereof), the closing of the transactions contemplated by this Agreement and the Ancillary Agreements (the "CLOSING") shall be held at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, on July 16, 2004 or, if all of the conditions to the Closing set forth in Articles VIII and IX have not been satisfied or waived in writing by the applicable party on such date, the third Business Day following such satisfaction or at such other place, time or date as the Sellers' Representative and the Purchaser may mutually agree upon in writing (the "CLOSING DATE"). The Closing shall take place at 10:00 a.m. local time on the Closing Date. Subject to the terms and conditions of this Agreement, at the Closing the following transactions will take place: 3 (a) the Sellers will deliver to the Purchaser all of the Purchased Interests, in each case including any certificates representing such Purchased Interests duly endorsed for transfer to the Purchaser, or if there are no such certificates, other customary written evidence of transfer, in either case in form and substance reasonably satisfactory to the Purchaser; (b) the Purchaser will deliver to each Seller such Seller's portion of the Estimated Purchase Price (as directed in writing by the Sellers' Representative as of the date hereof) by wire transfer of immediately available funds to an account specified by such Seller at least two Business Days prior to the Closing; and (c) each party will deliver to the other such certificates and other documents as are contemplated by this Agreement and the Ancillary Agreements or as may reasonably be requested by the other party to evidence compliance with the terms hereof. 1.4 FURTHER ASSURANCES. The Sellers shall, from time to time after the Closing, at the reasonable request of the Purchaser and without further consideration, execute and deliver further customary instruments of transfer and assignment and take such other customary actions as the Purchaser may reasonably request to fully transfer, sell and deliver to the Purchaser good and valid title to the Purchased Interests. 1.5 POST-CLOSING ADJUSTMENT. (a) (i) As soon as practicable and in any event no later than 60 days following the Closing Date, the Purchaser shall prepare and deliver to the Sellers' Representative, and shall cause Deloitte & Touche LLP to audit, at the Purchaser's cost and expense, a statement (the "CLOSING STATEMENT") setting forth in reasonable detail the determination of (i) the amount of Cash as of the close of business on the Closing Date (the "CLOSING CASH AMOUNT") and (ii) the Assumed Indebtedness Amount. The Closing Statement shall be prepared in accordance with GAAP, consistently applied, except to the extent GAAP would be inconsistent with the defined terms "Closing Cash Amount" and "Assumed Indebtedness Amount". The Closing Statement shall be final and binding on the Purchaser and the Sellers, subject to the process of objection provided in this Section 1.5. (ii) If the Closing occurs after July 16, 2004, as soon as practicable and in any event no later than 60 days following the later of February 28, 2005 or the Closing Date, the Purchaser shall prepare and deliver to the Sellers' Representative a statement (the "SUPPLEMENTAL CASH STATEMENT") setting forth in reasonable detail the amount of Cash as of the close of business on July 16, 2004 (the "JULY 16 CASH AMOUNT") and the amount of Cash as of the close of business on February 28, 2005 (in the case of February 28, 2005, after giving effect to the payment in full of the 2004 Bonuses) (the "FEBRUARY 28 CASH AMOUNT"). The Supplemental Cash Statement shall have been reviewed by Deloitte & Touche, at the Purchaser's cost and expense, in accordance with "agreed upon procedures" to be mutually agreed upon by the Purchaser and the Sellers' Representative, each acting reasonably, and shall be prepared 4 in accordance with GAAP, consistently applied, except to the extent GAAP would be inconsistent with the defined term "July 16 Cash Amount" or "February 28 Cash Amount." The Supplemental Cash Statement shall be final and binding on the Purchaser and the Sellers, subject to the process of objection provided in this Section 1.5. (b) The Sellers' Representative may dispute the amounts reflected on the Closing Statement or the Supplemental Cash Statement, as applicable, but only on the basis that (i) the Closing Statement or the Supplemental Cash Statement, as applicable, has not been prepared in accordance with the provisions of Section 1.5(a) or (ii) there has been an error in the calculation relating to the Closing Statement or the Supplemental Cash Statement, as applicable,. If the Sellers' Representative so disputes the amounts reflected on the Closing Statement or the Supplemental Cash Statement, as applicable, the Sellers' Representative shall notify the Purchaser, in writing, within 20 Business Days after receipt of the Closing Statement or the Supplemental Cash Statement, as applicable, of any such disagreement (an "OBJECTION NOTICE"), setting forth the Sellers' Representative's calculation of the Closing Cash Amount and/or Assumed Indebtedness Amount and/or February 28 Cash Amount and/or July 16 Cash Amount, as applicable, and specifying, in reasonable detail, the reasons for such disagreement. During such 20 Business Day period, the Purchaser shall provide the Sellers' Representative with such access, during normal business hours and upon reasonable prior notice, to the books and records relevant to (including using its commercially reasonable efforts to provide access to relevant work papers), and the personnel responsible for, the preparation of the Closing Statement or the Supplemental Cash Statement, as applicable, as the Sellers' Representative may reasonably request. If prior to the conclusion of such 20 Business Day period the Sellers' Representative notifies the Purchaser in writing that it will not provide any Objection Notice or if the Sellers' Representative does not deliver an Objection Notice within such 20 Business Day period, then the Closing Statement or the Supplemental Cash Statement, as applicable, shall be deemed final and conclusive and binding upon each of the parties hereto for the purposes of determining the dollar amounts therein. The Sellers' Representative and the Purchaser shall use commercially reasonable efforts to resolve any such objection and to agree upon the Closing Statement or the Supplemental Cash Statement, as applicable. If within 10 Business Days after the Purchaser receives an Objection Notice, the Purchaser and the Sellers' Representative have not resolved such objections and agreed upon the Closing Statement or the Supplemental Cash Statement, as applicable, the Purchaser and the Sellers' Representative shall select a mutually acceptable accounting firm to resolve any remaining objections (the "FIRST CHOICE FIRM"). If the Purchaser and the Sellers' Representative are unable to agree on the choice of the First Choice Firm, they will select by lot a nationally recognized accounting firm (after excluding the Purchaser's, each Seller's and their respective Affiliates' regular accounting firms) (such firm, the "SECOND CHOICE FIRM"). The Purchaser and the Sellers' Representative shall have the opportunity to present their position with respect to such remaining objections to the First Choice Firm or the Second Choice Firm, as the case may be, and shall use commercially reasonable efforts to cause the First Choice Firm or the Second Choice Firm, as the case may be, within 15 Business Days after its selection, to resolve such disagreement and to prepare the Closing Statement or the Supplemental Cash Statement, as applicable, in 5 accordance with the requirements of Section 1.5(a), which resolution and final Closing Statement or final Supplemental Cash Statement, as applicable, will be conclusive and binding upon the parties hereto. Such final Closing Statement or final Supplemental Cash Statement, as applicable, shall not reflect any difference from the amounts set forth on the Closing Statement or the Supplemental Cash Statement, as applicable, other than differences required to reflect the resolution of such remaining objections by the First Choice Firm or the Second Choice Firm, as the case may be. The fees and disbursements of the First Choice Firm or the Second Choice Firm, as the case may be, shall be allocated between the Purchaser, on the one hand, and the Sellers (jointly and severally), on the other hand, such that the Sellers' share of such fees and disbursements shall be equal to the Purchaser's share of such fees and disbursements. Each of the Sellers and the Purchaser shall execute a reasonably acceptable engagement letter, if requested to do so by the First Choice Firm or the Second Choice Firm, as the case may be, and shall provide reasonable access to their respective employees who are responsible for financial matters and to the books and records of the Company and its Subsidiaries. (c) Upon the final determination of the Assumed Indebtedness Amount, (i) the Sellers shall pay to the Purchaser, pro rata based on their respective Purchase Price Percentages, as a reduction in Purchase Price, an amount equal to 63.60% of the amount, if any, by which the Assumed Indebtedness Amount so determined exceeds the amount thereof included in the computation of the Estimated Purchase Price or (ii) the Purchaser shall pay to the Sellers, pro rata based on their respective Purchase Price Percentages, as an increase in the Purchase Price, an amount equal to 63.60% of the amount, if any, by which the Assumed Indebtedness Amount so determined is less than the amount thereof included in the computation of the Estimated Purchase Price. (d) If the Closing occurs on July 16, 2004, upon the final determination of the Closing Cash Amount, (i) the Sellers shall pay to the Purchaser, pro rata based on their respective Purchase Price Percentages, as a reduction in Purchase Price an amount equal to the amount, if any, by which the Closing Cash Amount so determined is less than the Minimum Cash Amount and (ii) the Purchaser shall cause the Company to make a distribution in cash to the members of the Company as of immediately prior to the Closing, pro rata in proportion to their membership interests in the Company as of immediately prior to the Closing as directed by the Sellers' Representative, in an amount equal to the amount, if any, by which the Closing Cash Amount so determined exceeds the Minimum Cash Amount. (e) If the Closing occurs after July 16, 2004, upon the final determination of the February 28 Cash Amount, the July 16 Cash Amount and the Closing Cash Amount, (i) the Purchaser shall cause the Company to make a distribution in cash to the members of the Company as of immediately prior to the Closing, pro rata in proportion to their membership interests in the Company as of immediately prior to the Closing, as directed by the Sellers' Representative, in an amount equal to the lesser of (x) the amount, if any, by which the February 28 Cash Amount exceeds the Minimum Cash Amount and (y) the amount, if any, by which the Closing Cash Amount exceeds the Minimum Cash Amount and/or (ii) the Sellers shall pay to the Purchasers, pro rata based on their respective Purchase Price Percentages, as a reduction in Purchase Price an 6 amount equal to the amount, if any, by which the July 16 Cash Amount is less than the Minimum Cash Amount. (f) All net payments in respect of the adjustments required to be made pursuant to this Section 1.5 shall be made by the payor in cash by wire transfer in immediately available funds to an account or accounts specified by the recipient, in writing, within five Business Days after the final determination of the Closing Statement or the Supplemental Cash Statement, as applicable. 1.6 ALLOCATION OF PURCHASE PRICE. To the extent required for any Tax purpose with respect to the Sellers, the Purchaser, the Company or any of its Subsidiaries, the Purchase Price shall be allocated among the Company's assets, the assets of any of its Subsidiaries and the non-compete and other restrictive covenants set forth in Section 11.2 of the Restated Operating Agreement (the "NON-COMPETE"), in a manner to be determined by the Purchaser. The Sellers and the Purchaser agree, and the Sellers agree to cause the Company and its Subsidiaries, to use the allocations determined pursuant to this Section 1.6 for all Tax purposes, to file all Tax Returns in a manner consistent with such allocations and take no position contrary thereto unless required to do so by a change in applicable Tax laws or a good faith resolution of a contest; PROVIDED, HOWEVER, that the provisions of this Section 1.6 shall not apply with respect to allocations to fiscal year 2004 incentive fees under the Advisory Contracts with respect to Hedge Funds ("2004 HEDGE FUND FEES"); PROVIDED, FURTHER, that in the event the Purchaser determines that the amount to be so allocated to any Company asset, asset of any of its Subsidiaries or Non-Compete that is set forth on ANNEX I (an "ANNEX ASSET") is in excess of the amount set forth opposite such Annex Asset on ANNEX I under the heading "Annex Value" (as adjusted pursuant to the last sentence of this Section 1.6), the provisions of this Section 1.6 shall not apply with respect to allocations to such Annex Asset to the extent of such excess amount; and, in the event the Purchaser determines that the amount to be so allocated to any Company assets or asset of any of its Subsidiaries that is an intangible asset other than an Annex Asset or 2004 Hedge Fund Fees in the aggregate increases by more than $6,000,000.00 the amount of ordinary income recognized by the Sellers, the provisions of this Section 1.6 shall not apply with respect to such allocations to such intangible assets to the extent of such excess amount. The parties agree that the amounts set forth opposite each Annex Asset on ANNEX I under the heading "Annex Value" as of the date hereof shall be adjusted as of the Closing Date in a manner reasonably determined by Triarc to be consistent with the methods and procedures used in the determination of Annex Value as of the date hereof. ARTICLE II SELLERS' REPRESENTATIVE 2.1 SELLERS' REPRESENTATIVE. Each Seller irrevocably appoints Sachs to act as such Seller's attorney-in-fact and representative (in such capacity, the "SELLERS' REPRESENTATIVE"), to do any and all things and to execute any and all documents, other than the Ancillary Agreements in such Seller's name, place and stead, in any way which such Seller could do if personally present, in connection with this Agreement and the 7 transactions contemplated hereby, including to accept on such Seller's behalf any amount payable to such Seller under this Agreement or to amend, cancel or extend, or waive the terms of, this Agreement; PROVIDED, HOWEVER, that the Sellers' Representative shall in no event agree to any change in the amount or form of the Purchase Price or to any amendment to Articles XI or XII hereof. The Purchaser shall be entitled to rely, as being binding upon each Seller, upon any document or other paper believed by the Purchaser to be genuine and correct and to have been signed by the Sellers' Representative, and the Purchaser shall not be liable to any Seller for any action taken or omitted to be taken by the Purchaser in such reliance. The Sellers' Representative shall not be liable to any of the Sellers for any act or omission performed or omitted by or on behalf of the Sellers' Representative; PROVIDED, that the Sellers' Representative was not guilty of gross negligence or intentional misconduct with respect to such act or omission. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS REGARDING THE COMPANY As a material inducement to the Purchaser to enter into this Agreement and the Ancillary Agreements to which it is a party and consummate the transactions contemplated hereby and thereby, except as set forth in the disclosure letter delivered by the Sellers to the Purchaser simultaneously with the execution and delivery of this Agreement (the "DISCLOSURE LETTER") (PROVIDED, that unless otherwise specified, no information contained in any particular numbered section of the Disclosure Letter shall be deemed to be contained in any other numbered section of the Disclosure Letter unless it is reasonably apparent on its face that it should be included therein) or except as results directly from the Purchaser's failure to consent to any action requiring its consent under Section 5.4, each Seller, severally but not jointly, hereby makes to the Purchaser the following representations and warranties: 3.1 ORGANIZATION AND QUALIFICATION OF THE COMPANY AND ITS SUBSIDIARIES. Each of the Company and its Subsidiaries (a) is a limited liability company or corporation, as applicable, duly organized, validly existing and in good standing under the laws of its respective jurisdiction of formation or incorporation; (b) has all requisite corporate or limited liability company power and authority, as applicable, to own and operate its property, to lease its property it operates as lessee and to conduct the business in which it is currently engaged; and (c) is duly qualified as a foreign limited liability company or corporation, as applicable, licensed and in good standing under the laws of each jurisdiction in which its ownership, lease or operation of property or the conduct of its business requires such qualification except where the failure to be so qualified or licensed has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. 3.2 AUTHORIZATION; NO CONTRAVENTION. Each of the Company and its Subsidiaries has the full corporate or limited liability company right, authority and power to enter into each Ancillary Agreement to which it is party and to carry out the 8 transactions contemplated hereby and thereby. The execution, delivery and performance by each of the Company and its Subsidiaries of each such Ancillary Agreement have been duly authorized by all necessary action on the part of the Company or such Subsidiary, and no other action on the part of the Company or such Subsidiary is required in connection therewith. Each such Ancillary Agreement has been duly executed and delivered by the Company and such Subsidiary. Each Ancillary Agreement to which the Company or any of its Subsidiaries is a party, assuming due and valid authorization, execution and delivery thereof by the other parties thereto, constitutes a valid and binding obligation of the Company or its Subsidiaries, as applicable, enforceable against the Company, or its Subsidiaries, as applicable, in accordance with its respective terms, except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. The execution, delivery and performance of this Agreement and each such Ancillary Agreement and the consummation of the transactions contemplated hereby and thereby: (a) do not contravene the terms of the certificate of formation of the Company, the Existing Operating Agreement or any comparable organizational or governing instruments of any of its Subsidiaries; (b) assuming the Company Consents and the Sellers Consents are obtained or made, do not materially violate, result in any material breach or material default of (and with due notice or lapse of time or both would not result in any material breach or material default of), accelerate any material obligation or impose any additional material obligation under, give rise to a right of termination of or result in the creation of any material Lien under, any Material Contract or material IP License to which the Company or any of its Subsidiaries is a party or by which any of their assets are bound; and (c) assuming the Company Consents and the Sellers Consents are obtained or made, do not violate in any material respect any Requirement of Law or judgment, injunction, writ, award, decree or order of any nature (collectively, "ORDERS") of any Governmental Authority applicable to the Company or any of its Subsidiaries or by which any of their assets are bound. 3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. Except as set forth in Section 3.3 of the Disclosure Letter (collectively, the "COMPANY CONSENTS") or as contemplated by Section 5.1 (the "CLIENT CONSENTS"), no material approval, consent, exemption or authorization by, notice to or filing with, any Governmental Authority or any other Person, is necessary or required to be made or obtained by the Company or any of its Subsidiaries in connection with the execution, delivery or performance of this Agreement or the Ancillary Agreements by the Company or any such Subsidiary or the transactions contemplated hereby and thereby. 3.4 LITIGATION. Except as set forth in Section 3.4 of the Disclosure Letter, there are no actions, suits, proceedings, claims, arbitrations, examinations, audits or investigations (collectively, "CLAIMS") pending or, to the Knowledge of such Seller, threatened, at law, in equity, in arbitration or before any Governmental Authority, and no Order has been issued by any Governmental Authority against or involving (a) the 9 Company or any of its Subsidiaries, (b) such Seller or, to the Knowledge of such Seller, any officer, director, stockholder, member (other than such Seller) or employee of the Company or any of its Subsidiaries in connection with and relating to the business, affairs, properties or assets of the Company or any of its Subsidiaries, (c) to the Knowledge of such Seller, any CDO or Hedge Fund or any officer, director or trustee of any CDO or Hedge Fund in connection with and relating to the business, affairs, properties or assets of such CDO or Hedge Fund, or (d) the Company or any of its Subsidiaries purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any of the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby, which in the case of clauses (a), (b) and (c) above, if adversely determined would be material to the Company and its Subsidiaries, taken as a whole. Section 3.4 of the Disclosure Letter also sets forth all actions, suits, proceedings, arbitrations, examinations, audits or investigations that are or were pending at any time during the past five years prior to the date of this Agreement, at law, in equity, in arbitration or before any Governmental Authority, or to the Knowledge of such Seller, otherwise commenced during such period, and all Orders issued by any Governmental Authority during such period, in each case, of the type described in clauses (a), (b), (c) or (d) above, whether or not currently pending or outstanding. 3.5 COMPLIANCE WITH LAWS. (a) Except as set forth in Section 3.5(a) of the Disclosure Letter, each of such Seller, the Company and each of its Subsidiaries and, to the Knowledge of such Seller, each of the officers, directors, stockholders, members (other than such Seller) and employees of the Company and each of its Subsidiaries is, and at all times has been, in compliance in all material respects with (i) all Requirements of Law applicable to the Company or any of its Subsidiaries or any of the properties, assets or businesses of the Company or any of its Subsidiaries, including any applicable requirements of the Advisers Act, the Commodity Exchange Act, the Exchange Act, the Investment Company Act, the Securities Act and the regulations promulgated under each of the foregoing, and (ii) all Orders issued by any court or other Governmental Authority against the Company or any of its Subsidiaries. To the Knowledge of such Seller, as of the date hereof, there is no existing or proposed Requirement of Law which would reasonably be expected to prohibit or restrict in any material respect the Company or its Subsidiaries in conducting their respective businesses as currently conducted in any jurisdiction in which they now conduct their businesses, or otherwise materially adversely affect the Company and its Subsidiaries, taken as a whole. (b) (i) Each of the Company, its Subsidiaries, and each of their respective employees so required, has all material licenses, permits, registrations, franchises, certifications and approvals of any Governmental Authority (collectively, "MATERIAL PERMITS") that are necessary for the conduct of the business of the Company and its Subsidiaries as currently conducted; (ii) such Material Permits are in full force and effect; and (iii) no material violations are or have been recorded in respect of any such Material Permit. 10 (c) Since January 1, 1999, the Company and its Subsidiaries have timely filed all material Regulatory Documents and have paid all fees and assessments due and payable in connection therewith, except where the consequences of the failure to pay such fees would not be material to the Company and its Subsidiaries, taken as a whole. As of their respective dates, the Regulatory Documents of the Company and its Subsidiaries, complied in all material respects with the applicable Requirements of Law. The Sellers have previously delivered or made available to the Purchaser a true and complete copy of each such material Regulatory Document filed after January 1, 1999 and prior to the date of this Agreement, and will deliver or make available to the Purchaser promptly after the filing thereof a true and complete copy of each material Regulatory Document filed by the Company and its Subsidiaries after the date of this Agreement and prior to the Closing Date. DCM maintains on file Part II of its Form ADV (including all amendments thereto). Except as set forth in Section 3.5(c) of the Disclosure Letter, DCM has delivered or offered to deliver at least annually to each Client Part II of its Form ADV, as amended, or a brochure in lieu of its Form ADV, as required under the Advisers Act. (d) The Company and its Subsidiaries have complied in all material respects with the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "PATRIOT ACT") and the regulations promulgated thereunder, and the rules and regulations administered by the U.S. Treasury Department's Office of Foreign Assets Control ("OFAC"), to the extent such Laws are applicable to them. None of such Seller, nor any direct or indirect owner of such Seller, nor the Company nor any of its Subsidiaries is included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered under the laws of, (i) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns or (ii) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur. (e) DCM does not have "custody" of any Client assets for purposes of the Advisers Act. (f) Except as set forth in Section 3.5(f) of the Disclosure Letter, each of the Company and its Subsidiaries to which the Advisers Act is applicable is in compliance in all material respects with Rule 206(4)-7 under the Advisers Act (assuming for purposes of this Agreement that the Rule is effective as of the date of this Agreement). 11 3.6 CAPITALIZATION. (a) As of the date hereof, all of the Class A Interests, the Class B Interests and all other equity or profits interests in the Company are owned of record by the Persons listed in Section 3.6(a) of the Disclosure Letter in the respective amounts set forth thereon. Except as set forth in Section 3.6(a) of the Disclosure Letter, there are no outstanding options, warrants, rights, commitments, conversion rights, preemptive rights or agreements of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound which would obligate any of them to issue, deliver, purchase or sell any additional Class A Interests, Class B Interests or other equity or profits interests of any kind in the Company. To the Knowledge of such Seller, other than the holders of the Class A Interests listed in Section 3.6(a) of the Disclosure Letter, no other Person has any rights with respect to voting on matters to be voted on by members of the Company. All of the Class A Interests, the Class B Interests and any other equity or profits interests in the Company are duly authorized, validly issued, fully paid and nonassessable, and were issued in compliance in all material respects with all applicable federal, state and foreign Requirements of Law. (b) The Purchased Interests to be purchased by the Purchaser hereunder represents, in the aggregate, as of the date hereof, not less than 67.73% of the outstanding Class A Interests, not less than 67.73% of the fully diluted Class A Interests, not less than 42.38% of the outstanding Class B Interests, not less than 42.38% of the fully diluted Class B Interests, not less than 66.70% of the outstanding voting power of the Company and not less than 66.70% of the fully diluted voting power of the Company. 3.7 SUBSIDIARIES; INVESTMENTS. Section 3.7 of the Disclosure Letter sets forth a true and complete list of each of the current Subsidiaries of the Company. The Company owns all of the issued and outstanding limited liability company interests of its Subsidiaries, free and clear of all Liens, other than restrictions imposed by applicable federal or state securities laws. All of such limited liability company interests are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance in all material respects with all applicable federal, state and foreign Requirements of Law. There are no outstanding options, warrants, rights, commitments, conversion rights, preemptive rights or agreements of any kind to which the Company, any of its Subsidiaries or any of the Sellers is a party or by which any of them is bound which would obligate any of them to issue, deliver, purchase or sell any additional shares of capital stock, units, membership, or other equity or profit interests of any kind in any of the Subsidiaries of the Company. Except as set forth in Section 3.7 of the Disclosure Letter, neither the Company nor any of its Subsidiaries owns any Investment, or has a right to acquire any Investment, in any Person that is not a Subsidiary listed in Section 3.7 of the Disclosure Letter, and the Company or its Subsidiaries, as applicable, has good and valid title to, free and clear of any Lien, any such Investment or right to acquire any Investment set forth in Section 3.7 of the Disclosure Letter. 3.8 REAL PROPERTY. None of the Company or any of its Subsidiaries owns any real property. All of the real property leased or subleased by the Company or any of its Subsidiaries is identified in Section 3.8 of the Disclosure Letter (collectively, 12 the "REAL PROPERTY"). All leases, subleases and other agreements under which the Company or any of its Subsidiaries uses or occupies or has the right to use or occupy, now or in the future, any Real Property (the "REAL PROPERTY LEASES") are identified on Section 3.8 of the Disclosure Letter and true and complete copies thereof (including all modifications, amendments and supplements thereto) have been made available to the Purchaser. None of the Company, any of its Subsidiaries or any of the Sellers or any of their Affiliates has any ownership, financial or other interest in the landlord under any such Real Property Lease. 3.9 ASSETS UNDER MANAGEMENT; STRATEGIC FINANCING AGREEMENTS. (a) The aggregate assets under management by DCM, (x) for each Client other than a Client that is a CDO, as of the most recent practicable date prior to the date hereof as calculated by DCM consistent with past practice, (y) for each Client that is a CDO (other than any CDO for which no trustee report is available prior to the date hereof), as of the date set forth in the most recently available trustee report for such CDO prior to the date hereof and (z) for each Client that is a CDO for which no trustee report is available prior to the date hereof, as of the date on which the closing occurs for such Client (each applicable date in (x), (y) and (z) above with respect to such Client, the "BASE DATE") are accurately set forth in Section 3.9(a) of the Disclosure Letter (the "BASE DATE AUM"). Set forth in Section 3.9(a) of the Disclosure Letter is a list as of the date hereof of all Advisory Contracts and Strategic Financing Agreements, setting forth with respect to each such Advisory Contract and Strategic Financing Agreement, as applicable: (i) the name of the Client under such Advisory Contract, indicating (A) any such Client that is the Company, its Subsidiaries, a Seller, an Affiliate of the Company or a Seller, or a stockholder, partner, member, director, officer, employee or Immediate Family member of any of the foregoing and (B) in the case of any Client that is a pooled investment vehicle, any of the foregoing Persons described in clause (A) that had an Investment in such Client as of the Base Date (indicating the amount of such investment); (ii) the state (or, if such Client is not a U.S. citizen, the country) of which such Client is a citizen or resident (in the case of individuals) or domiciled (in the case of entities); (iii) the amount of assets under management pursuant to such Advisory Contract at the Base Date, and the nature of the Investment Management Services provided (i.e., discretionary or non-discretionary); (iv) with respect to each Client that is a Hedge Fund (other than SPhinX), the name of each investor in such Hedge Fund and the amount of such investor's investment in such Hedge Fund as of the Base Date (and, in the case of LEAP, the net asset value of LEAP and the value in Japanese yen of 286,817 shares of LEAP in each case, as of the most recent practicable date, such date to be no earlier than 13 May 31, 2004, prior to the date hereto as calculated by DCM consistent with past practices); (v) the fee schedule in effect with respect to such Advisory Contract (including identification of any applicable sub-components of such fees, e.g., investment management fees, performance fees, fees for any other fiduciary services, etc., as applicable), and a description of any fees payable by the underlying Client in connection with Investment Management Services (or other services) provided by the Company or any of its other Subsidiaries other than pursuant to such Advisory Contract; (vi) as of the applicable date specified in this Section 3.9(a)(vi) and not as of the date hereof, (x) for each Client other than a Client that is a CDO, as of the most recent practicable date prior to the Closing Date as calculated by DCM consistent with past practice, (y) for each Client that is a CDO (other than any CDO for which no trustee report is available prior to the Closing Date), as of the date set forth in the most recently available trustee report for such CDO prior to the Closing Date and (z) for each Client that is a CDO for which no trustee report is available prior to the Closing Date, as of the date on which the closing occurs for such Client (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.9(a)(vi) of the Disclosure Letter solely for purposes of making the representation and warranty specified in this Section 3.9(a)(vi) as of the applicable dates specified in this Section 3.9(a)(vi)), (A) a description of any material fee changes (including any caps, waivers, offsets or reimbursements) under such Advisory Contract or Strategic Financing Agreement and (B) a description of any material changes in the amount of assets in any Client's account as a result of deposits (including reinvestments of dividends and distributions) or withdrawals, or redemptions or repayments, made by such Client or defaults (as defined under the applicable indentures relating to the assets) in assets owned by such Client, in each case from the Base Date to (x) for each Client other than a Client that is a CDO, as of the most recent practicable date prior to the Closing Date as calculated by DCM consistent with past practice, (y) for each Client that is a CDO (other than any CDO for which no trustee report is available prior to the Closing Date), as of the date set forth in the most recently available trustee report for such CDO prior to the Closing Date and (z) for each Client that is a CDO for which no trustee report is available prior to the Closing Date, as of the date on which the closing occurs for such Client, and a description of any such changes proposed or otherwise expected to be instituted as of such date (it being understood and agreed that, solely for purposes of this clause (vi), net deposits or withdrawals, or redemptions or repayments, with respect to any one Client account or defaults (as defined under the applicable indentures relating to the assets) in assets owned by such Client in the aggregate in excess of $250,000 shall be deemed material); and (vii) the manner of consent required for the "assignment" (or deemed assignment) under applicable Requirements of Law, including the Advisers Act and relevant state law, by the Company or its Subsidiaries, as applicable, of such Advisory Contract in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, for those Advisory Contracts which will be assigned (or 14 deemed assigned) in connection with such transactions (which contracts are so identified), in each case so that any such consent or approval (as applicable) will be duly and validly obtained in accordance with all applicable Requirements of Law and the terms of any contracts, agreements and other instruments relating thereto. (b) Except as set forth in Section 3.9(b) of the Disclosure Letter and expressly described thereon, there are no Contractual Obligations pursuant to which either the Company or any of its Subsidiaries has undertaken or agreed to cap, waive, offset, reimburse or otherwise reduce any or all fees or charges payable by or with respect to any of the Clients set forth in Section 3.9(a) of the Disclosure Letter or pursuant to any of the contracts set forth in Section 3.9(a) of the Disclosure Letter (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.9(b) of the Disclosure Letter to reflect any such understanding or agreement after the date hereof and prior to the Closing Date entered into in compliance with this Agreement). To the Knowledge of such Seller, as of the date hereof, except as set forth in Section 3.9(b) of the Disclosure Letter, (i) since the date that is one year prior to the date hereof, (x) no Client of the Company or any of its Subsidiaries (or, in the case of any Clients that are pooled investment vehicles (other than any CDOs), underlying investors therein, as applicable) has stated to the Company or any of its Subsidiaries an intention to terminate or reduce its investment relationship with the Company or any of its Subsidiaries, or make an adjustment to the fee schedule with respect to any contract in a manner which would reduce the fees to the Company or any of its Subsidiaries (including after giving effect to the Closing) in connection with such Client relationship, and (y) no investor in any CDO has stated to the Company or any of its Subsidiaries an intention to cause, either individually or collectively with others, an optional redemption of any securities issued by such CDO, and (ii) (x) no Client of the Company or any of its Subsidiaries (or, in the case of any Clients that are pooled investment vehicles (other than any CDOs), underlying investors therein, as applicable) has stated to the Company or any of its Subsidiaries such an intention described in clause (i)(x) of this Section 3.9(b) prior to the date that is one year prior to the date hereof that is expected to become effective on or prior to the date that is one year after the date hereof, and (y) no investor in any CDO has stated to the Company or any of its Subsidiaries an intention to cause, either individually or collectively with others, an optional redemption of any securities issued by such CDO. (c) Except as set forth in Section 3.9(c) of the Disclosure Letter, neither the Company nor any of its Subsidiaries has any Clients with respect to which fees payable to the Company or any Subsidiary are based on performance or otherwise provide for compensation on the basis of a share of capital gains upon or capital appreciation of the funds (or any portion thereof) of any Client (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.9(c) of the Disclosure Letter to reflect any such Clients that become Clients after the date hereof and prior to the Closing Date in compliance with this Agreement). Any such performance fees arrangements have been entered into in compliance with the Advisers Act. 15 (d) Section 3.9(d) of the Disclosure Letter identifies, with an appropriate footnote, each Client to which the Company or any of its Subsidiaries provides Investment Management Services that is, to the Knowledge of such Seller, (i) an employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to Title I of ERISA; (ii) a person acting on behalf of such a plan; or (iii) an entity whose assets include the assets of such a plan, within the meaning of ERISA and applicable regulations (hereinafter referred to as an "ERISA CLIENT"). To the Knowledge of such Seller, the Company and its Subsidiaries have complied in all material respects with ERISA, Section 4975 of the Code and the regulations promulgated under either ERISA or Section 4975 of the Code in connection with the provision of Investment Management Services to any ERISA Client. The assets of any partnership, trust, or investment fund managed by the Company or any of its Subsidiaries, or of which the Company or any of its Subsidiaries is the general partner or managing member, that are not intended to constitute "plan assets" under 29 C.F.R. 2510.3-101 (the "PLAN ASSET REGULATION") are, to the Knowledge of such Seller, not reasonably likely to be determined to be "plan assets" for purposes of the Plan Asset Regulation. Neither the Company nor any of its Subsidiaries is disqualified from acting as a qualified professional asset manager (as such term is used in Prohibited Transaction Class Exemption 84-14) under any applicable Requirement of Law. (e) Neither the Company nor any of its Subsidiaries provides Investment Management Services to (i) any issuer or other Person that is required to be registered as an investment company (within the meaning of the Investment Company Act) under the Investment Company Act, or (ii) any issuer or other Person that is or is required to be registered under the laws of the appropriate securities regulatory authority in the jurisdiction in which the issuer is domiciled, which is or holds itself out as engaged primarily in the business of investing, reinvesting or trading in securities; PROVIDED, that this representation and warranty shall be made to the Knowledge of such Seller with respect to SPhinX. Neither the Company nor any of its Subsidiaries is required to be registered as an investment company (within the meaning of the Investment Company Act) under the Investment Company Act. (f) Except as set forth in Section 3.9(f) of the Disclosure Letter, no exemptive orders, "no-action" letters or similar exemptions or regulatory relief have been obtained, nor are any requests pending therefor, by or with respect to either of the Company or its Subsidiaries, any Seller or any employee of any such Person in connection with the business of the Company and its Subsidiaries, or to the Knowledge of such Seller, by any Client of the Company and its Subsidiaries in connection with the provision of Investment Management Services to such Client by the Company and its Subsidiaries. (g) Section 3.9(g) of the Disclosure Letter sets forth a true, correct and complete list of (i) the Hedge Fund Documents (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.9(g) of the Disclosure Letter to reflect the entering into, or amendment, supplement or other modification of, any Hedge Fund Document after the date hereof and prior to the Closing Date in compliance with this Agreement), (ii) the CDO Documents (it being understood 16 that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.9(g) of the Disclosure Letter to reflect the entering into, or amendment, supplement or other modification of, any CDO Document after the date hereof and prior to the Closing Date in compliance with this Agreement), (iii) the ratings as of the date hereof of each security issued in connection with each CDO by each applicable Rating Agency and (iv) all downgrades in the ratings of any securities issued in connection with each CDO since the date that is one year prior to the date hereof. The Sellers have provided the Purchaser with true and correct copies of all CDO Documents and Hedge Fund Documents as of the date hereof (and as of the Closing will have provided true and correct copies of any CDO Documents and/or Hedge Fund Documents entered into after the date hereof and prior to the Closing Date in compliance with this Agreement), and the offering circulars or memoranda included in such CDO Documents and Hedge Fund Documents did not at the time such CDO or Hedge Fund issued any securities related to such CDO Documents and Hedge Fund Documents contain any untrue statement of a material fact concerning the Company or any of its Subsidiaries or, to the Knowledge of such Seller, any other Person, or omit to state a material fact concerning the Company or any of its Subsidiaries or, to the Knowledge of such Seller, any other Person, necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. Each of the CDO Documents and the Hedge Fund Documents, to the extent applicable, is in full force and effect and binding upon the Company or its Subsidiary party thereto and, to the Knowledge of such Seller, the other parties thereto, except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. None of the Company or any of its Subsidiaries is in material default under any CDO Document or Hedge Fund Document to which it is a party, nor, to the Knowledge of such Seller, has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to such a material default. Except as set forth in Section 3.9(g) of the Disclosure Letter, to the Knowledge of such Seller, none of the other parties to any CDO Document or Hedge Fund Document is in material default under, or in breach of or noncompliance with any overcollateralization or coverage test contained in, any such CDO Document or Hedge Fund Document, nor has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to such a material default or breach or noncompliance. (h) Any information that is supplied, sent or given, or included in any document supplied, sent or given, by DCM, including DCM's Form ADV, as amended, to any Client, New Client, CDO Consent Party or New CDO Consent Party for the purposes of obtaining the consent of such Client, New Client, CDO Consent Party or New CDO Consent Party will be true, complete and accurate in all material respects and, at the time such information is sent or given, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. 17 (i) Any information that is provided, supplied, sent or given by such Seller, the Company or DCM in connection with the preparation of an amendment to DCM's Form ADV as a result of the transactions contemplated by this Agreement will be true, complete and accurate in all material respects at the time such information is so provided, supplied, sent or given and at the time such amendment is filed with the SEC. (j) Each of the Consents obtained from Clients in accordance with Section 5.1 (including each of the Consents included in the determination of whether the condition contained in Section 8.5 has been satisfied) will, as of the Closing Date, have been duly obtained under all applicable Requirements of Law and the requirements of the applicable Advisory Contract. 3.10 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS. Except for those contracts, commitments, plans, agreements and licenses set forth in Section 3.10 of the Disclosure Letter (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.10 of the Disclosure Letter to reflect the entering into, or amendment, supplement or other modification of, any Material Contract after the date hereof and prior to the Closing Date in compliance with this Agreement), the Advisory Contracts and Strategic Financing Agreements described in Section 3.9 of the Disclosure Letter and the Real Property Leases described in Section 3.8 of the Disclosure Letter (true and complete copies of which (including all modifications, amendments and supplements thereto) have been made available to the Purchaser) (collectively, the "MATERIAL CONTRACTS"), neither the Company nor any Subsidiary is a party to or subject to (or otherwise bound by) any of the following: (a) any Advisory Contract or other Contractual Obligation for the provision of Investment Management Services; (b) any Contractual Obligation for the provision of services other than Investment Management Services to Clients of either of the Company or any of its Subsidiaries pursuant to which the Company or such Subsidiary receives in excess of $100,000 annually; (c) any Contractual Obligation related to any directed brokerage, revenue sharing or related arrangements; (d) any Contractual Obligation related to any "soft dollar" or similar arrangement; (e) any Contractual Obligation (other than existing Benefit Plans, which are covered by Section 3.25) with any current or former director, officer, shareholder, member or employee of the Company or any of its Subsidiaries or with any of the respective Affiliates or Immediate Family members of any such Persons; (f) any Contractual Obligation for the purchase of any data, assets, material or equipment in an amount exceeding $200,000 annually; 18 (g) any other Contractual Obligation creating any obligations of either the Company or any of its Subsidiaries to pay amounts in excess of $200,000 annually, with respect to any such Contractual Obligation not specifically disclosed elsewhere under this Agreement; (h) any Contractual Obligation for the sale of all or any material portion of the assets of the Company or any Subsidiary or any Contractual Obligation for the purchase of all or any material portion of the assets of any other Person requiring payment of an amount in excess of $200,000, other than goods and services (not exceeding $200,000 in the aggregate) in the ordinary course of business consistent with past practice; (i) any Contractual Obligation relating to the acquisition by the Company or any of its Subsidiaries of any operating business or a material portion of the capital stock or other ownership interests of any other Person, to the extent the Company or any of its Subsidiaries has any remaining obligations thereunder; (j) any partnership or joint venture agreement or other similar Contractual Obligations; (k) any Contractual Obligation containing an obligation of the Company or any of its Subsidiaries to indemnify any other Person (other than indemnification obligations contained in Contractual Obligations entered into in the ordinary course of business with vendors, suppliers or providers of office equipment and office services); (l) any Contractual Obligation with any investment or research consultant, solicitor or sales agent, or otherwise with respect to the referral of business to either of the Company or any of its Subsidiaries (including any agreement with respect to solicitation of prospective investors in any CDOs or Hedge Funds); PROVIDED, that any such Contractual Obligations with respect to SPhinX shall only be set forth to the extent such Seller has Knowledge of such Contractual Obligation); (m) any Contractual Obligation containing covenants limiting the freedom of either of the Company or any of its Subsidiaries to engage in any line of business or with any Person; (n) any Contractual Obligation providing for the borrowing or lending of money in excess of $100,000; (o) any Contractual Obligation with SLA, Sumitomo Life or any of their controlled Affiliates; (p) any Contractual Obligation relating to the warehousing of securities in connection with any CDO; 19 (q) any Contractual Obligation relating to the engagement of any financial institution (other than with any rating agency, trustee or routine service provider) in connection with the formation or offering of any securities of any CDO; (r) any Contractual Obligation relating to the settlement of any Claim pursuant to which the Company or any of its Subsidiaries is obligated to make or is entitled to receive payments in excess of $100,000 or is the subject of injunctive relief or other equitable remedies; or (s) any other material Contractual Obligation relating to the business of either of the Company or any Subsidiary to which either the Company or any Subsidiary is a party or otherwise bound. Each of the Material Contracts is in full force and effect and binding upon the Company or its Subsidiary party thereto and, to the Knowledge of such Seller, the other parties thereto, except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. None of the Company or any of its Subsidiaries is in material default under any Material Contract, nor, to the Knowledge of such Seller, has any event occurred which, with the giving of notice or the passage of time, or both, would give rise to such a material default. To the Knowledge of such Seller, each other party to each Material Contract is not in material default under any Material Contract and no event has occurred which, with the giving of notice or the passage of time, or both, would give rise to such a material default. Each of the Company and each Subsidiary has complied in all material respects with and is in compliance in all material respects with the Client's guidelines and restrictions applicable to the Company or any of its Subsidiaries set forth in any Advisory Contract or applicable prospectus, offering memorandum or, to the Knowledge of such Seller, any written marketing material for any collective investment vehicle or other governing documents for any Client. 3.11 FINANCIAL STATEMENTS. The Sellers have delivered or made available to the Purchaser the audited consolidated balance sheet of the Company and its Subsidiaries as of, and the related audited consolidated statements of operations, cash flow and members' equity of the Company and its Subsidiaries for the fiscal years ended, December 31, 2003 (the "BALANCE SHEET DATE"), 2002, and 2001, including the accompanying notes thereto, together with the unqualified report of Ernst & Young LLP as of, and for the fiscal years ended, December 31, 2003 and 2002, and Arthur Andersen LLP as of, and for the fiscal year ended, December 31, 2001 (the "AUDITED FINANCIAL STATEMENTS") and the unaudited consolidated balance sheet of the Company and its Subsidiaries as of, and the unaudited consolidated statements of operations, cash flow and members' equity of the Company and its Subsidiaries for the fiscal period ended, March 31, 2004 and 2003 (the "UNAUDITED FINANCIAL STATEMENTS" and, together with the Audited Financial Statements, the "FINANCIAL STATEMENTS"). Except for the absence of 20 footnotes to the Unaudited Financial Statements and except as set forth in Section 3.11 of the Disclosure Letter, (a) each of the consolidated balance sheets included in the Financial Statements and the quarterly financial statements, if any, required to be delivered under Section 5.5 present (or when delivered will present, as the case may be) fairly, in all material respects, the respective financial position of the Company and its Subsidiaries as of the date of such balance sheet; (b) the other related statements included in the Financial Statements and the quarterly financial statements, if any, required to be delivered under Section 5.5 present (or when delivered will present, as the case may be) fairly, in all material respects, the results of operations and cash flows of the Company and its Subsidiaries for the fiscal period covered by such other related statements; (c) each of the consolidated balance sheets and statements of operations, cash flow and members' equity of the Company and its Subsidiaries included in the Audited Financial Statements have been prepared in accordance with GAAP, applied on a consistent basis during the periods involved; (d) as of the date hereof, the unaudited consolidated balance sheet as of, and the unaudited statements of operations, cash flow and members' equity of the Company and its Subsidiaries for the fiscal period ended, March 31, 2004 have been, in all material respects, prepared in accordance with GAAP, applied on a consistent basis during the periods involved; (e) the unaudited consolidated balance sheet as of, and the unaudited statements of operations, cash flow and members' equity of the Company and its Subsidiaries for the fiscal period ended, March 31, 2004, delivered in accordance with Section 5.5 will have been, when delivered, prepared in accordance with GAAP, applied on a consistent basis during the periods involved; and (f) each of the quarterly financial statements, if any, required to be delivered under Section 5.5 will have been, when delivered, prepared in accordance with GAAP, applied on a consistent basis during the periods involved. 3.12 TAXES. (a) Each of the Company and its Subsidiaries has timely filed or caused to be timely filed all Tax Returns required to be filed by them, all such Tax Returns are true, complete and correct in all material respects, and all Taxes shown as due thereon have been timely and fully paid, except for Taxes which are being contested in good faith, for which adequate provision has been made and which are set forth on Schedule 3.12(a) of the Disclosure Letter. Each of the Company and its Subsidiaries has timely and fully paid all Taxes for which they are liable (whether or not shown on any Tax Return), except for Taxes which are being contested in good faith, for which adequate provision has been made and which are set forth on Schedule 3.12(a) of the Disclosure Letter, and has made adequate provision for any Taxes that are not yet due and payable, for all taxable periods, or portions thereof, ending on or before the Closing Date. (b) No assessments for Taxes of the Company or any of its Subsidiaries are outstanding, and no unassessed Tax deficiency or other claim for Taxes has been proposed or threatened in writing against the Company or any of its Subsidiaries. 21 (c) No audit of any Tax Return, or other proceeding with respect to a Tax Return, or with respect to Taxes, of the Company or any of its Subsidiaries has been proposed, threatened in writing, or is in progress, nor has any audit, or other proceeding, been conducted with respect to any Tax Return or Taxes relating to any of the previous three (3) taxable years of the Company or any of its Subsidiaries. (d) Except as set forth in Section 3.12(d) of the Disclosure Letter, no extension of time with respect to any date on which any Tax Return was or is to be filed with respect to the Company or any of its Subsidiaries is in force, and no waiver or agreement by the Company or any of its Subsidiaries is in force for the extension of time for the assessment or payment of any Tax, and no request for any such extension or waiver is currently pending. (e) No Liens for Taxes exist with respect to any asset or property of the Company or any of its Subsidiaries, except statutory Liens for Taxes not yet due and payable. (f) Each of the Company and its Subsidiaries has withheld and timely paid all Taxes and other amounts required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, partner, member or other third party in compliance with all Tax withholding and remitting provisions of applicable Requirements of Law (the "WITHHOLDING REQUIREMENTS") and have each complied in all respects with all Tax information reporting provisions of all applicable Requirements of Law (the "TAX REPORTING REQUIREMENTS"), except that, with respect to state and local Taxes, such Withholding Requirements and Tax Reporting Requirements have been complied with in all material respects. (g) Except as set forth in Section 3.12(g) of the Disclosure Letter, since the formation of each of the Company and its Subsidiaries, no jurisdiction in which the Company or any of its Subsidiaries files Tax Returns treats the Company or such Subsidiary as an entity other than a partnership, disregarded entity or branch, or as being subject to entity-level Tax, for federal, state, local and foreign income and franchise Tax purposes. No Claim has ever been made by a Tax authority in a jurisdiction where the Company or any of its Subsidiaries does not file Tax Returns with respect to a particular type of Tax that the Company or such Subsidiary is or may be subject to, or liable for, that particular type of Tax in that jurisdiction. (h) Neither the Company nor any its Subsidiaries is a party to any Tax indemnification, allocation or sharing agreement or similar arrangement, and neither the Company nor any of its Subsidiaries has any liability for the Taxes of any Person as a transferee or successor, by contract or otherwise. Except as set forth in Section 3.12(h) of the Disclosure Letter, neither the Company nor any of its Subsidiaries has filed, or been required to file, a consolidated, combined or unitary Tax Return with any other Person. 22 (i) Neither the Company nor any of its Subsidiaries has made an election to be excluded from the provisions of Subchapter K of the Code, is (or ever has been) subject to the taxable mortgage pool rules under Section 7701(i) of the Code, or is (or ever has been) classified as an association taxable as a corporation or a publicly traded partnership taxable as a corporation under Section 7704 of the Code. Section 3.12(i) of the Disclosure Letter sets forth a description of each election, and revocation of such election, if any, made by the Company or any of its Subsidiaries under Section 754 of the Code (and any comparable provision of state, local or foreign Requirements of Law). (j) None of the Company's or any of its Subsidiaries' payroll, property, or receipts, or other factors used in a particular state's apportionment or allocation formula results in an apportionment or allocation of business income to any state or other jurisdiction other than Illinois, and neither the Company nor any of its Subsidiaries has non-business income that is allocated, apportioned or otherwise sourced to any state or other jurisdiction other than Illinois. (k) The Sellers, the Company and each of its Subsidiaries have given or otherwise made available to the Purchaser true, correct and complete copies of all examination reports and statements of deficiencies for taxable periods, or transactions consummated, and all material Tax Returns, for which the applicable statutory periods of limitations have not expired. (l) None of the Company or any of its Subsidiaries has agreed, or is required to make, any adjustment under Section 481(a) of the Code (or any similar provision of state, local or foreign Requirements of Law), and no Governmental Authority has proposed any such adjustment or change in accounting method. (m) Neither the Company nor any of its Subsidiaries has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of state, local or foreign Requirements of Law, and neither the Company nor any of its Subsidiaries is subject to any private letter ruling of the IRS or comparable ruling of any other Governmental Authority. (n) No power of attorney has been granted by the Company or any of its Subsidiaries with respect to any matter relating to Taxes, which power of attorney is currently in force. (o) Neither the Company nor any of its Subsidiaries has entered into a transaction that is being accounted for under the installment method of Section 453 of the Code or similar provision of state, local or foreign Requirements of Law. (p) Neither the Company nor any of its Subsidiaries is a direct or indirect beneficiary of a guarantee of Tax benefits or any other arrangement that has the economic effect of providing a guarantee of Tax benefits (including a Tax indemnity from a seller or lessee of property, or insurance protection with respect to Tax treatment) 23 with respect to any transaction, or Tax opinion relating to the Company or any of its Subsidiaries. (q) Neither the Company nor any of its Subsidiaries has participated in, or otherwise made a filing with respect to, any "reportable transaction" within the meaning of Treas. Reg. ss. 1.6011-4(b). (r) No audit of any Tax Return, or other proceeding with respect to a Tax Return, or with respect to Taxes, of any Affiliate Fund or, to the Knowledge of such Seller, an Independent Fund, has been proposed, threatened, or is in progress, nor has any audit, or other proceeding, been conducted with respect to any Tax Return or Taxes relating to any of the previous three (3) taxable years of an Affiliate Fund, or the Knowledge of such Seller, an Independent Fund. None of the Affiliate Funds, or to the Knowledge of such Seller, the Independent Funds, has ever been "engaged in trade or business within the United States" (within the meaning of Section 882 of the Code). None of the Affiliate Funds, or to the Knowledge of such Seller, the Independent Funds, has ever participated in, or otherwise made a filing with respect to, any "reportable transaction" within the meaning of Treas. Reg. ss. 1.6011-4(b). (s) Each of the Company and its Subsidiaries has complied with, and is in compliance with, all provisions related to Tax matters set forth in any Advisory Contract. 3.13 CONTINGENT REVENUE. Section 3.13 of the Disclosure Letter sets forth the Company's good faith estimate (based on reasonable assumptions) of the amounts of all contingent revenue of the Company and its Subsidiaries existing as of the date hereof. All such contingent revenue has arisen from bona fide transactions entered into by the Company and/or one or more of its Subsidiaries in the ordinary course of business consistent with past practice and represents, subject to the satisfaction of the contingencies set forth in the applicable Contractual Obligations set forth in Section 3.13 of the Disclosure Letter, a valid right of the Company or any of its Subsidiaries to receive such amounts; PROVIDED, that the foregoing representation and warranty shall not be deemed to constitute a guaranty of collectibility of any such contingent revenue or any assurance that such contingencies shall be satisfied. 3.14 ABSENCE OF CERTAIN CHANGES. Except as (a) disclosed in Section 3.14 of the Disclosure Letter or (b) disclosed in the Financial Statements, since the Balance Sheet Date, neither the Company nor any of its Subsidiaries has suffered any condition, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Change. 3.15 ORDINARY COURSE. Since the Balance Sheet Date, each of the Company and its Subsidiaries has conducted its business only in the ordinary course and consistently with its prior practices (except for actions taken in connection with the transactions contemplated hereby). 24 3.16 BANKING AND BROKERAGE RELATIONS. The Sellers have previously delivered or made available to the Purchaser a true and complete list of all of the arrangements which either the Company or any of its Subsidiaries has with banking institutions and brokerage firms, indicating with respect to each of such arrangements the type of arrangement maintained (such as checking account, borrowing arrangements, etc.) and the person or persons authorized as signatories or otherwise to take action in respect thereof. 3.17 INTELLECTUAL PROPERTY. (a) Except as set forth in Section 3.17(a) of the Disclosure Letter, either the Company or its Subsidiaries owns, or otherwise has a valid right to use, to the Knowledge of such Seller, without any infringement, the Intellectual Property used in connection with the business of the Company and/or any of its Subsidiaries as presently conducted or contemplated (the "COMPANY INTELLECTUAL PROPERTY"), free and clear of all Liens, except for Liens specifically described in the notes to the Financial Statements and Permitted Liens. (b) Section 3.17(b) of the Disclosure Letter sets forth a true and complete list of all current registrations and issuances and currently pending filings and applications for any Intellectual Property filed by the Company, any of its Subsidiaries or any of their respective predecessors. To the Knowledge of such Seller, all of the rights of the Company and any of its Subsidiaries in the Intellectual Property are valid and enforceable. The Company and its Subsidiaries have taken all commercially reasonable actions to maintain and protect the Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries. The Company and its Subsidiaries have taken all commercially reasonable precautions to protect the secrecy, confidentiality, and value of its Trade Secrets and the proprietary nature and value of the Company Intellectual Property owned or purported to be owned by the Company or any of its Subsidiaries. (c) Section 3.17(c) of the Disclosure Letter sets forth a true and complete list of all material IP Licenses to which the Company or any of its Subsidiaries is a party. To the Knowledge of such Seller, all of the material IP Licenses are valid, subsisting, in full force and effect and binding upon the Company and/or one or more of its Subsidiaries, as the case may be, and the other parties thereto in accordance with their terms. To the Knowledge of such Seller, each party to any such material IP License has been in full compliance with all applicable terms and requirements of and under such material IP License and no event has occurred or condition or set of circumstances exists that (with or without notice or lapse of time or both), directly or indirectly, may constitute a material default under any such material IP License. The Company includes its geographic location (Chicago) in its metatags, as required under its agreement with Deerfield Partners, L.P., Deerfield International Fund, Ltd. and Deerfield Management Co., L.P. (d) Each employee, director, officer or consultant of the Company or any of its Subsidiaries or any other Person who developed any part of any 25 product of the Company or any of its Subsidiaries or any Intellectual Property that is or is contemplated to be used by the Company or any of its Subsidiaries has executed a valid and enforceable agreement with the Company or the applicable Subsidiary that conveys any and all right, title and interest in and to all Intellectual Property developed by such Person in connection with such Person's employment or contract to the Company or any of its Subsidiaries, and establishes that to the extent such Person is an author of a copyrighted work created in connection with such Person's employment or contract, such work is a "work made for hire," to the extent possible under applicable Requirements of Law. To the Knowledge of such Seller, it is not necessary for the business of the Company or any of its Subsidiaries to use any Intellectual Property owned by any present or past director, officer, employee or consultant of the Company or any of its Subsidiaries (or persons the Company or any of its Subsidiaries presently intends to hire). (e) To the Knowledge of such Seller, none of the Intellectual Property, products or services owned, used, developed, provided, sold, licensed, imported or otherwise exploited by the Company or any of its Subsidiaries, or made for, used or sold by or licensed to the Company or any of its Subsidiaries by any Person infringes upon or otherwise violates any Intellectual Property rights of others. (f) To the Knowledge of such Seller, no Person is infringing upon or otherwise violating the Intellectual Property rights of the Company or any of its Subsidiaries. (g) There are no Claims pending or, to the Knowledge of such Seller, threatened, (i) contesting the right of the Company or any of its Subsidiaries to use any of the Company's or any of its Subsidiaries' products or services currently or previously used by the Company or such Subsidiary or (ii) opposing or attempting to cancel any rights of the Company or any of its Subsidiaries in or to any Intellectual Property. (h) Except as set forth in Section 3.17(h) of the Disclosure Letter, neither the Company nor any of its Subsidiaries is a party to or bound by any IP License requiring the payment by the Company or any of its Subsidiaries of any future royalty or license payment. (i) Section 3.17(i) of the Disclosure Letter sets forth a true and complete list of all material Software used by the Company and/or any of its Subsidiaries. To the Knowledge of such Seller, all Software performs in conformance with its documentation and its continued use following the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements does not require the consent of any Person, and the scheduled Software is free from any material software defect and does not contain any self-help mechanism, virus, trojan horse, worm or other software routines or hardware components designed to permit unauthorized access or designed to disable a computer program automatically with the passage of time or under the positive control of a Person other than an authorized licensee or owner of the software program. 26 (j) Except for the IP Licenses (which are covered by Section 3.2), after the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, the Company and/or its Subsidiaries will continue to own all right, title, and interest in and to or have a valid written license to use all Company Intellectual Property on identical terms and conditions as each of the Company and any of its Subsidiaries enjoyed immediately prior to such transactions. (k) The Company and each of its Subsidiaries which gather information from website visitors has a privacy policy (each, a "PRIVACY POLICY") regarding the collection and use of information from such website visitors ("CUSTOMER INFORMATION"), copies of which have been provided to the Purchaser. Neither the Company nor any of its Subsidiaries has collected any Customer Information in an unlawful manner or in violation of its applicable Privacy Policy or uses any of the Customer Information it receives through its website or otherwise in an unlawful manner or in a manner that in any way violates its applicable Privacy Policy or the privacy rights of its customers, the consequence of which would be material to the Company and its Subsidiaries, taken as a whole. Each of the Company and its Subsidiaries has posted its Privacy Policy, if any, in a clear and conspicuous location on its applicable website. Each of the Company and its Subsidiaries has reasonable security measures in place to protect the Customer Information it receives through its website and that it stores in its computer systems from illegal use by third parties or use by third parties in a manner violative of the rights of privacy of its customers. The consummation of the transactions contemplated by this Agreement and the Ancillary Agreements will not violate the applicable Privacy Policy of the Company or any of its Subsidiaries as it currently exists or as such Privacy Policy existed at any time during which any of the Customer Information was collected or obtained. (l) Except as otherwise expressly provided in this Agreement, the representations and warranties contained in this Section 3.17 are the only representations and warranties of the Sellers concerning the Intellectual Property. 3.18 TITLE TO ASSETS. Except as set forth in Section 3.18 of the Disclosure Letter, each of the Company and its Subsidiaries owns and has good, valid, and marketable title to all of their respective properties and assets (other than the Company Intellectual Property, which are covered in Section 3.17) that it purports to own and which are reflected on the unaudited consolidated balance sheet of the Company and its Subsidiaries as of March 31, 2004 or acquired by the Company or any of its Subsidiaries since such date (collectively, the "ASSETS"), in each case free and clear of all Liens, except for Liens specifically described in the notes to the Financial Statements and Permitted Liens. 3.19 LIABILITIES. Except as set forth in Section 3.19 of the Disclosure Letter, the Company and its Subsidiaries do not have any material direct or indirect obligation or liability (including under any Strategic Financing Agreement), whether known or unknown, fixed or unfixed, choate or inchoate, secured or unsecured, accrued, absolute, contingent or otherwise, whether or not of a kind required by GAAP to be set forth on a financial statement or in the accompanying notes (the "LIABILITIES") other than 27 (a) Liabilities fully and adequately reflected or reserved against on the Financial Statements; (b) Liabilities incurred since March 31, 2004 in the ordinary course of business consistent with past practice; (c) Liabilities incurred in connection with the transactions contemplated by this Agreement and the Ancillary Agreements; and (d) Liabilities that are the subject of any other representation or warranty contained in this Article III and are disclosed pursuant to such other representation or warranty or are not required to be disclosed because such other representation or warranty is limited or qualified with respect to time, dollar amount, Knowledge of such Seller, materiality, Material Adverse Effect or any similar qualification. 3.20 BUSINESS; REGISTRATIONS. (a) DCM has at all times since its inception been engaged solely in the business of providing Investment Management Services, and neither the Company nor any of its other Subsidiaries is or has been engaged in such business or activities requiring it to register as an investment advisor under applicable Requirements of Law, including the Advisers Act. (b) DCM has at all times since January 28, 1997 and at all times that it has been required to do so, been duly registered as an investment adviser under any applicable Requirements of Law, including the Advisers Act. Each such federal and state registration is and at all times has been in full force and effect. DCM is duly registered, licensed and qualified in all jurisdictions where such registration, licensing or qualification is required in order to conduct, and is material to, its business. The Sellers have delivered to the Purchaser true and complete copies of DCM's most recent Form ADV, as amended to date, and all of DCM's other material foreign and domestic registration forms or notice filings, likewise as amended to date. The information contained in such forms was true and complete in all material respects at the time of filing and DCM and its Affiliates have made all material amendments to such forms as they are required to make under applicable Requirements of Law. DCM and each of its investment adviser representatives (as such term is defined in Rule 203A-3(a) under the Advisers Act) have, and immediately after the Closing, DCM and its investment adviser representatives will have, all Material Permits required from any Governmental Authority in order for them to conduct the businesses presently conducted by DCM and such representatives in the manner presently conducted. DCM is duly registered as a commodity trading adviser, a commodity pool operator and a futures commission merchant under the Commodity Exchange Act and under applicable state statutes, in each case to the extent required under applicable Requirements of Law. The Sellers have made available to the Purchaser true and complete copies of all material documents related to DCM's registration, if any, as a commodity trading adviser, a commodity pool operator and a futures commission merchant. Neither DCM nor any of its representatives is subject to any material limitation imposed in connection with one or more of the Material Permits. DCM has not been a "broker" or "dealer" within the meaning of the Exchange Act at any time since its inception. Neither DCM nor any of its directors, officers or employees is registered or required to be registered as a broker or dealer, an introducing broker, a registered representative or associated person, a counseling officer, an insurance agent, a sales person or in any similar capacity with the 28 SEC, the NASD or the securities commission of any state or any self-regulatory body. Except as set forth in Section 3.20(b) of the Disclosure Letter, no Person other than DCM renders Investment Management Services to Clients of DCM or, on DCM's behalf, solicits Clients with respect to the provision of Investment Management Services by DCM. (c) To the Knowledge of such Seller, no person "associated" (as defined under the Advisers Act) with DCM has been convicted of any crime or is or has engaged in any conduct that would be a basis for (i) denial, suspension or revocation of registration of an investment adviser under Section 203(e) of the Advisers Act or Rule 206(4)-4(b) thereunder, or ineligibility to serve as an associated person of an investment adviser, (ii) being ineligible to serve as an investment adviser (or in any other capacity contemplated by the Investment Company Act) to a registered investment company pursuant to Section 9(a) or 9(b) of the Investment Company Act or (iii) being ineligible to serve as a broker-dealer or an associated person of a broker-dealer pursuant to Section 15(b) of the Exchange Act, and to the Knowledge of such Seller, there is no Claim that is reasonably likely to become the basis for any such ineligibility, disqualification, denial, suspension or revocation. 3.21 INSURANCE. The Company and each of its Subsidiaries has in full force and effect such insurance as is reasonable and customarily maintained by firms of similar size in the same or a similar business, with respect to its businesses, properties and assets, and all bonds required by ERISA and by any Contractual Obligation to which either of the Company or any of its Subsidiaries is a party, all as listed in Section 3.21 of the Disclosure Letter. None of the Company or any of its Subsidiaries is in default under any such insurance policy in a manner that could result in the cancellation of such policy or a reduction in the coverage thereunder or an increase in the premiums payable thereunder. After giving effect to the Closing, each such insurance policy or equivalent policies will be in full force and effect. To the Knowledge of such Seller, no circumstances exist which would cause any such insurance policy to fail to be renewed on terms materially identical to those currently in effect. 3.22 FINDER'S FEE. Other than fees and expenses payable to Putnam Lovell NBF Securities, Inc. pursuant to a written agreement previously provided to the Purchaser (which will be paid by the Sellers concurrently with the Closing), neither the Company nor any of its Subsidiaries has incurred, become liable for or otherwise entered into any Contractual Obligation with respect to any broker's commission, finder's fee or similar payment relating to or in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. 3.23 BOOKS AND RECORDS. The Sellers have heretofore made available to the Purchaser a true, complete and correct copy of the organizational documents (certificates of incorporation, certificates of formation, by-laws and operating agreements, as applicable) for each of the Company and its Subsidiaries, including the Existing Operating Agreement, all as in effect on the date of this Agreement. The minute books (or comparable records) of each of the Company and its Subsidiaries have heretofore been made available to the Purchaser, have been maintained in the ordinary 29 course of business consistent with past practice, and accurately reflect in all material respects all transactions and actions referred to in such minutes and consents in lieu of meetings. The Sellers have heretofore made available to the Purchaser a true, complete and correct copy of any disclosure (or, if unwritten, a summary thereof) by any Representative of the Company or its Subsidiaries to the Company's independent auditors relating to (a) any significant deficiencies in the design or operation of internal controls which could adversely affect the ability of the Company or any of its Subsidiaries to record, process, summarize and report financial data and any material weaknesses in internal controls and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of the Company or any of its Subsidiaries. 3.24 TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth in Section 3.24 of the Disclosure Letter (the "RELATED PARTY AGREEMENTS"), and except for existing employment agreements with the Company or any of its Subsidiaries or existing Benefit Plans, none of the Sellers, directors or managing directors of either of the Company or any of its Subsidiaries or, to the actual knowledge of such Seller (without any duty of inquiry), any of the respective Affiliates or Immediate Family members of any such Persons is (i) a party to any Contractual Obligation with the Company or any of its Subsidiaries; (ii) owns (of record or as a beneficial owner), directly or indirectly, any interest in (excepting less than one percent (1%) stock holdings for investment purposes in securities of publicly held and traded companies), or is an officer or director of, any Person which is, or is engaged in business as, a competitor, lessor, lessee, broker, sales agent, service provider or Client of, or lender to or borrower from, the Company or any of its Subsidiaries; (iii) owns, directly or indirectly, in whole or in part, any tangible or intangible property (other than DE MINIMIS property) that the Company or any of its Subsidiaries has used, or that the Company or any of its Subsidiaries will use, in the conduct of business; or (iv) has any cause of action or other claim whatsoever against, or owes or has advanced any amount to, the Company or any of its Subsidiaries, except for claims in the ordinary course of business such as for accrued vacation pay, accrued benefits under the Benefit Plans and the like. Section 3.24 of the Disclosure Letter also sets forth a true and complete list of all outstanding loans or extensions of credit that the Company or any of its Subsidiaries has made directly or indirectly to Sachs or Roberts and all outstanding loans or extensions of credit individually or in the aggregate in excess of $10,000 that the Company or any of its Subsidiaries has made directly or indirectly to any other director, officer or employee of either the Company or any of its Subsidiaries. The Sellers have previously delivered or made available to the Purchaser all of the Contractual Obligations and other documents and instruments related to such loans or extensions of credit. As of the Closing Date, each Related Party Agreement and each such loan or extension of credit set forth in Section 3.24 of the Disclosure Letter shall have been terminated and all amounts due or owed thereunder shall have been paid or otherwise settled in full. 30 3.25 EMPLOYEE BENEFIT PLANS. (a) Except as disclosed in Section 3.25(a) of the Disclosure Letter, the Company does not maintain or contribute to or have any obligation to maintain or contribute to, or have any direct or indirect liability, whether contingent or otherwise, with respect to any plan, program, arrangement or agreement that is a pension, profit-sharing, savings, retirement, employment, consulting, severance pay, termination, executive compensation, incentive compensation, deferred compensation, bonus, stock purchase, stock option, phantom stock or other equity-based compensation, change-in-control, retention, salary continuation, vacation, sick leave, disability, death benefit, group insurance, hospitalization, medical, dental, life (including all individual life insurance policies as to which the Company is the owner, the beneficiary, or both), Code Section 125 "cafeteria" or "flexible" benefit, employee loan, educational assistance or fringe benefit plan, whether written or oral, including, without limitation, any (i) "employee benefit plan" within the meaning of Section 3(3) of ERISA, or (ii) other employee benefit plan, agreement, program, policy or arrangement, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise) under which any employee or former employee of the Company has any present or future right to benefits (individually, a "BENEFIT PLAN", and collectively, the "BENEFIT PLANS"). The Company does not maintain or contribute to, or have any obligation to maintain or contribute to, and during the past six (6) years has not maintained or contributed to, or had any obligation to maintain or contribute to, any employee benefit plan subject to Title IV or ERISA. All references to the "Company" in this Section 3.25 shall refer to the Company and its Subsidiaries and any employer that would be considered a single employer with the Company under Sections 414(b), (c), (m) or (o) of the Code. (b) Except as disclosed in Section 3.25(b) of the Disclosure Letter: (i) each Benefit Plan has been established and administered in all material respects in accordance with its terms and in compliance in all material respects with the applicable provisions of ERISA, the Code and all other applicable Requirements of Law; (ii) with respect to each Benefit Plan, all reports, returns, notices and other documentation that are required to have been filed with or furnished to any Governmental Authority, or to the participants or beneficiaries of such Benefit Plan, have been filed or furnished on a timely basis; (iii) each Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that the Benefit Plan satisfies the requirements of Section 401(a) of the Code and that its related trust is exempt from taxation under Section 501(a) of the Code and, to the Knowledge of such Seller, there are no facts or circumstances that could reasonably be expected to cause the loss of such qualification; (iv) with respect to any Benefit Plan, other than routine claims for benefits, no Liens, Claims or complaints to or by any person or Governmental Authority have been filed or made against such Benefit Plan or the Company or, to the Knowledge of such Seller, against any other Person and, to the Knowledge of such Seller, no such Liens, Claims or complaints are contemplated or threatened; and (v) to the Knowledge of such Seller, there are no audits or proceedings initiated pursuant to the Employee Plans Compliance Resolution System or similar proceedings pending with the IRS or the United States Department of Labor with respect 31 to any Benefit Plan. Neither the Company nor, to the Knowledge of such Seller, any other "party in interest" or "disqualified person" with respect to any Benefit Plan has engaged in a non-exempt "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975 of the Code involving such Benefit Plan. (c) All Liabilities of the Company in respect of any Benefit Plan (including workers' compensation) which have not been paid, have been properly accrued on the Company's Financial Statements in compliance with GAAP. All required contributions (including all employer contributions and employee salary reduction contributions) or premium payments have been timely made. (d) The Company has no obligation to provide or make available post-employment welfare benefits or welfare benefit coverage for any employee or former employee, except as may be required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), or benefits the expense of which is solely borne by the employee or former employee. (e) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event) (i) result in any payment becoming due, or increase the amount of any compensation due, to any current or former employee of the Company under any Benefit Plan; (ii) increase any benefits otherwise payable under any Benefit Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; (iv) result in the payment of any amount that could, individually or in combination with any other such payment, constitute an "excess parachute payment," as defined in Section 280G(b)(1) of the Code; or (v) result in the triggering or imposition of any restrictions or limitations on the rights of the Company to amend or terminate any Benefit Plan. (f) The Company has no plan, Contractual Obligation or other commitment, whether legally binding or not, to create any additional employee benefit or compensation plans, policies or arrangements or, except as may be required by any Requirement of Law, to modify any Benefit Plan. (g) The Company has no Liabilities with respect to any misclassification of any Person as an independent contractor rather than as an employee, or with respect to any employee leased from another employer. (h) The Company has not incurred any Liability or obligation under the Worker Adjustment and Retraining Notification Act, and the regulations promulgated thereunder, or any similar state or local law that remains unsatisfied. (i) The Sellers have made available to the Purchaser with respect to each Benefit Plan, a true, correct and complete copy (or, to the extent no such copy exists, an accurate description) thereof and, to the extent applicable: (i) the most recent documents constituting the Benefit Plan and all amendments thereto, (ii) any related trust agreement or other funding instrument; (iii) the most recent IRS 32 determination letter; (iv) the most recent summary plan description, summary of material modifications and any other written communication (or a description of any oral communications) by the Company to its employees concerning the extent of the benefits provided under a Benefit Plan; (v) the three most recent (A) Forms 5500 and attached schedules, (B) audited financial statements, and (C) actuarial valuation reports; and (vi) for the last plan year, all material correspondence with the IRS, the United States Department of Labor, and any other governmental authority regarding the operation or the administration of any Benefit Plan. (j) Section 3.25(j) of the Disclosure Letter sets forth as of the date hereof a list of each participant in the Springfield & Company L.L.C. Key Employee Plan (the "KEEP PLAN"),who has been awarded share appreciation rights as that term is defined in the KEEP Plan ("SARs") thereunder, the number of SARs so awarded to each such participant and the applicable strike price. 3.26 EMPLOYEES; LABOR MATTERS. (a) Neither the Company nor any of its Subsidiaries is party to any collective bargaining or other labor contract. There is no pending or, to the Knowledge of such Seller, threatened labor dispute, strike, or work stoppage against the Company or any of its Subsidiaries. (b) The Sellers have previously delivered to the Purchaser a true and complete list of all employees of the Company and each of its Subsidiaries, including each such employees date of hire, location of employment, employment status, base salary or wages, bonus and commissions. 3.27 OUTSTANDING BORROWING. Section 3.27 of the Disclosure Letter sets forth the amount of all Indebtedness of the Company and its Subsidiaries, the Liens that relate to such Indebtedness and that encumber the Assets and the name of each lender thereof (it being understood that the Sellers shall be permitted to provide the Purchaser with a supplement to Section 3.27 of the Disclosure Letter to reflect the incurrence of any such Indebtedness or the creation of any such Liens after the date hereof and prior to the Closing Date in accordance with this Agreement). No Indebtedness is entitled to any voting rights in any matters voted upon by the holders of the equity interests in the Company or its Subsidiaries. 3.28 ENVIRONMENTAL MATTERS. Except as set forth in Section 3.28 of the Disclosure Letter, the Company and its Subsidiaries are in compliance in all material respects with all applicable Environmental Laws. There are no civil, criminal or administrative Claims, notices of violation or notice or demand letters pending or, to the Knowledge of such Seller, threatened against the Company or any of its Subsidiaries pursuant to Environmental Laws. 33 3.29 TRADING ACTIVITIES. (a) Except as set forth on Schedule 3.29(a) of the Disclosure Letter, neither the Company nor any of its Subsidiaries has caused any CDO to engage in any sale and related purchase of debt securities by such CDO with the intention of increasing the aggregate principal amount of collateral held by such CDO unless such sale and related purchase of debt securities (i) were effected for valid economic reasons in the best interests of such CDO in the reasonable judgment of the Company or such Subsidiary and (ii) were not in violation of any CDO Document. (b) Neither the Company nor any of its Subsidiaries has (i) engaged in any arbitrage activity involving the frequent buying and selling of shares of investment companies registered with the SEC under the Investment Company Act to take advantage of a potential lag between the change in the value of such an investment company's portfolio securities and the reflection of that change in the investment company's share price or other trading practices commonly known as "market timing," (ii) entered into any special arrangements, whether written or oral, to accommodate or facilitate such activity, or (iii) entered into any arrangements, whether written or oral, to accommodate or facilitate late trading. 3.30 CODE OF ETHICS POLICY. DCM has adopted a written code of ethics (the "CODE OF ETHICS") which complies in all material respects with all applicable provisions of the Advisers Act (including without limitation Section 204A thereof), a true and complete copy of which has been delivered or made available to the Purchaser prior to the date hereof. All employees of DCM have executed acknowledgments that they are bound by the provisions of such Code of Ethics. To the Knowledge of such Seller, during the past five years, there have been no material violations or allegations of material violations of such Code of Ethics. 3.31 PROXY VOTING POLICIES. To the extent required by applicable Requirements of Law, DCM has adopted a written policy regarding its proxy voting procedures that complies in all material respects with all applicable Requirements of Law, a copy of which has been delivered or made available to the Purchaser prior to the date of this Agreement. Except as set forth in Section 3.31 of the Disclosure Letter, since the adoption of policy regarding its proxy voting procedures, DCM has voted all proxies in accordance with the terms of its policy. 3.32 ANTI-MONEY LAUNDERING POLICY. DCM has adopted a written policy regarding its anti-money laundering procedures, a true and complete copy of which has been delivered or made available to the Purchaser prior to the date hereof. DCM and each of its employees is, and at all times has been, in compliance in all material respects with such policy. 3.33 EXCLUSIVITY OF REPRESENTATIONS. Except for the representations and warranties specifically set forth in this Agreement or any certificate to be executed and delivered by or on behalf of such Seller pursuant to, or as contemplated by, Sections 8.4, 8.5, 8.13 (other than any such certificate delivered in connection with any Ancillary 34 Agreement), 8.18 or 8.21, such Seller makes no representation, warranty or guaranty, express or implied, with respect to the matters contained in this Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS As a material inducement to the Purchaser to enter into this Agreement and the Ancillary Agreements to which it is a party and consummate the transactions contemplated hereby and thereby, each of the Sellers hereby severally, but not jointly, makes to the Purchaser, the following representations and warranties solely with respect to such Seller: 4.1 TITLE TO THE PURCHASED INTERESTS. Such Seller (other than DPF) owns of record and beneficially, and has good and valid title to, free and clear of any Liens, other than restrictions imposed by federal or state securities laws, the Class A Interests and Class B Interests (including with respect to capital account balance and profits interest) set forth opposite such Seller's name on ANNEX B attached hereto. In the case of DPF, as of the date hereof, DPF has the right to acquire pursuant to the SLA Purchase Agreement, and as of the Closing will own of record and beneficially, and will have good and valid title to, free and clear of any Liens, other than restrictions imposed by federal or state securities laws, the Class A Interests (including with respect to capital account balance) set forth opposite DPF's name on ANNEX B attached hereto. In the case of SCM, Sachs owns of record and beneficially, and has good and valid title to, free and clear of any Lien, other than restrictions imposed by federal or state securities laws, all of the membership interests in SCM. Such Seller has, and in the case of DPF, DPF will have upon consummation of the purchase and sale of the SLA Interest in accordance with the SLA Purchase Agreement, full power and authority to transfer, sell and deliver its Purchased Interests to the Purchaser pursuant to this Agreement and, on the terms and subject to the conditions hereof, at the Closing will transfer, sell and deliver to the Purchaser good and valid title to the Purchased Interests set forth opposite such Seller's name on ANNEX B attached hereto, free and clear of any Liens other than (i) Liens created by the Purchaser and (ii) restrictions imposed by federal or state securities laws. Other than the Existing Operating Agreement, there are no voting trusts, voting agreements, proxies or other agreements, instruments or undertakings with respect to the management or control of the Company to which such Seller is a party. 4.2 ORGANIZATION; AUTHORITY OF THE SELLERS. In the case of SCM and DPF, such Seller is a limited liability company duly organized, validly existing and in good standing under the laws of its respective jurisdiction of formation and has all requisite limited liability company power and authority to own and operate its property, to lease its property it operates as lessee and to conduct the business in which it is currently engaged. Such Seller has full right, authority, power and legal capacity to enter into this Agreement and each Ancillary Agreement to which it is party and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by such Seller of this Agreement and each such Ancillary Agreement have 35 been duly authorized by all necessary action on the part of such Seller, and no other action on the part of such Seller is required in connection therewith. This Agreement and each such Ancillary Agreement have been duly executed and delivered by such Seller. This Agreement and each such Ancillary Agreement, assuming due and valid authorization, execution and delivery thereof by the other parties thereto, constitutes a valid and binding obligation of such Seller, enforceable against such Seller in accordance with its respective terms, except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. The execution, delivery and performance of this Agreement and each such Ancillary Agreement by such Seller and the consummation of the transactions contemplated hereby and thereby: (a) do not contravene the terms of the certificate of formation, certificate of incorporation, bylaws or any comparable organizational or governing instruments of any Seller; (b) assuming the Sellers Consents are obtained or made, do not materially violate, result in any material breach or material default of (and with due notice or lapse of time or both would not result in any material breach or material default of), accelerate any material obligation or impose any additional material obligation under, give rise to a right of termination of or result in the creation of any material Lien under, any material Contractual Obligation to which such Seller is a party or by which any of its assets are bound; and (c) assuming the Sellers Consents are obtained or made, do not violate in any material respect any Requirement of Law or Order of any Governmental Authority applicable to such Seller or by which its assets are bound. No representation is made with respect to the enforceability of any non-compete, confidentiality and non-solicitation provisions of the Employment Agreements. 4.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. Except as set forth in this Agreement (collectively as to all of the Sellers, the "SELLERS CONSENTS"), no material approval, consent, exemption or authorization by, notice to or filing with, any Governmental Authority or any other Person is necessary or required to be made or obtained by such Seller in connection with the execution, delivery or performance of this Agreement or the Ancillary Agreements to which it is a party or the transactions contemplated hereby and thereby. 4.4 LITIGATION. There are no Claims pending or, to the Knowledge of such Seller, threatened against such Seller, at law or in equity, in arbitration or before any Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any of the Ancillary Agreements by such Seller or the consummation by such Seller of the transactions contemplated hereby or thereby. 4.5 FINDER'S FEE. Other than fees and expenses payable to Putnam Lovell NBF Securities, Inc. pursuant to a written agreement previously provided to the Purchaser (which will be paid by the Sellers concurrently with the Closing), such Seller has not incurred, become liable for or otherwise entered into any contract or agreement 36 with respect to any broker's commission, finder's fee or similar payment relating to or in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. 4.6 INVESTMENT ADVISORY REPRESENTATION. Except for such Seller's own account and advice given to such Seller's spouse, children, grandchildren, parents and siblings and which such Seller is managing without a fee or any other remuneration, such Seller does not provide investment advisory or Investment Management Services to any person or entity, other than on behalf of the Company or its Subsidiaries pursuant to an investment advisory or management agreement between the Company or any of its Subsidiaries and a Client thereof. ARTICLE V COVENANTS OF THE SELLERS Each Seller, severally but not jointly, hereby makes the following covenants and agreements (PROVIDED, that the covenants and agreements of each Seller other than SCM to cause the Company or any of its Subsidiaries to take or refrain from taking any action as provided in this Article V shall be limited to the obligation of such Seller to use its reasonable best efforts to cause the Company and each of its Subsidiaries to take or refrain from taking any such action hereunder): 5.1 CONSENTS OF CLIENTS, NEW CLIENTS AND CDO CONSENT PARTIES. (a) As soon as practicable after the date hereof, but in any event on or prior to five Business Days after the date hereof, such Seller shall cause DCM to send (i) to each Client (other than a CDO or a Hedge Fund) that is a party to an Advisory Contract as of the date of this Agreement, a letter substantially in the form of ANNEX J-1 attached hereto (such letter, an "INITIAL CLIENT CONSENT REQUEST LETTER"), (ii) in the case of each Client who is party to an Advisory Contract as of the date of this Agreement that is a CDO, to each Person identified on ANNEX J-2 (collectively, the "CDO CONSENT PARTIES") or to the trustee with respect to such CDO for distribution by such trustee to such CDO Consent Parties, a letter substantially in the form of ANNEX J-3 attached hereto (such letter, an "INITIAL CDO CONSENT REQUEST LETTER), and (iii) to each Client that is a party to an Advisory Contract as of the date of this Agreement that is a Hedge Fund (and in addition, to PlusFunds Group, Inc. with respect to SPhinX, and to ZCM Matched Funding Corp., with respect to Asset Protection Trust II), a written or oral communication requesting that the board of directors or any other authorized Person of such Hedge Fund adopt written resolutions substantially in the form of the applicable resolutions set forth in ANNEX J-4 (such communication the "INITIAL HEDGE FUND CONSENT REQUEST", and such resolutions, the "HEDGE FUND RESOLUTIONS") in each case, notifying such Client and such CDO Consent Parties of the transactions contemplated by this Agreement and the Ancillary Agreements and the "assignment" (or deemed assignment) of such Advisory Contract resulting from such transactions, and requesting the written consent of such Client and such CDO Consent Parties to such assignment (or deemed assignment) of such Advisory Contract. On or prior to the 30th day after the Initial Client Consent Request Letter, the Initial CDO Consent Party Request Letter or the Initial 37 Hedge Fund Consent Request, as applicable, has been sent by DCM, such Seller shall cause DCM to send (x) to each Client who was sent, but who has not by such date returned, an Initial Client Consent Request Letter countersigned or otherwise duly executed indicating such Client's consent to the assignment (or deemed assignment) of the applicable Advisory Contract resulting from the transactions contemplated by this Agreement and the Ancillary Agreements, a second letter in form and substance reasonably acceptable to the Purchaser (each, a "FOLLOW-UP CLIENT CONSENT REQUEST LETTER"), (y) to each CDO Consent Party or each trustee, as the case may be, who was sent, but who has not by such date returned, an Initial CDO Consent Request Letter countersigned indicating such CDO Consent Party's consent to the assignment (or deemed assignment) of the applicable Advisory Contract resulting from the transactions contemplated by this Agreement and the Ancillary Agreements, a second letter in form and substance reasonably acceptable to the Purchaser (each, a "FOLLOW-UP CDO CONSENT REQUEST LETTER") and (z) to each Client (or other entity specifically listed in (iii) above) who was sent, but has not by such date returned, documents or other materials evidencing that the Hedge Fund Resolutions have been duly adopted by a majority of the members of the board of directors or any other authorized Person with respect to such Hedge Fund, a second communication in form and substance reasonably acceptable to the Purchaser (each, a "FOLLOW-UP HEDGE FUND CONSENT REQUEST"). (b) With respect to any Advisory Contract (other than Advisory Contracts with Hedge Funds or New Clients) that does not, by its terms or under applicable Requirements of Law, require the "written" or "express" consent of the Client party thereto or specified CDO Consent Parties (as specified in ANNEX J-2), as applicable, to an assignment (or deemed assignment) of such Advisory Contract, such consent shall be deemed given for purposes of Section 8.5(a) (notwithstanding the fact that such Client or such CDO Consent Parties, as applicable, shall have failed to return an Initial Client Consent Request Letter or a Follow-Up Client Consent Request Letter, or an Initial CDO Consent Request Letter or a Follow-Up CDO Consent Request Letter, as applicable, countersigned indicating the consent of such Client or such CDO Consent Party, as applicable, to the assignment (or deemed assignment) of such Advisory Contract resulting from the transactions contemplated by this Agreement and the Ancillary Agreements) 15 days after the date on which such Follow-Up Client Consent Request Letter or Follow-Up CDO Consent Letter, as applicable, was sent to such Client, such CDO Consent Party or such trustee, as applicable, if such Client or such CDO Consent Party, as applicable, has not objected to the assignment or deemed assignment of such Advisory Contract resulting from the transactions contemplated by this Agreement and the Ancillary Agreements and has continued to accept Investment Management Services from DCM for such 15 day period; except that such Consent shall not be deemed given if Section 5.1(b) of the Disclosure Letter shall be applicable. With respect to any Advisory Contract (other than Advisory Contracts with Hedge Funds or New Clients) that, by its terms or under applicable Requirements of Law, requires the "written" or "express" consent of the Client party thereto or specified CDO Consent Parties (as specified in ANNEX J-2), as applicable, to an assignment (or deemed assignment) of such Advisory Contract and with respect to any Advisory Contract with a Hedge Fund, such consent shall be deemed given for purposes of Section 8.5 solely in the event that such Client or such CDO Consent Party, as applicable, has returned to DCM an executed Initial Client 38 Consent Request Letter or a Follow-Up Client Consent Request Letter, or an executed Initial CDO Consent Request Letter or a Follow-Up CDO Consent Request Letter, or documents or other materials evidencing the due adoption by a majority of the members of the board of directors or by any other authorized Person of such Hedge Fund or other entity specifically identified in Section 5.1(a)(iii) of the Hedge Fund Resolutions (and such Hedge Fund Resolutions have not been subsequently withdrawn), as applicable, countersigned indicating the consent of such Client or such CDO Consent Party, as applicable, to the assignment (or deemed assignment) of such Advisory Contract resulting from the transactions contemplated by this Agreement and the Ancillary Agreements; PROVIDED, that in the case of any CDO Consent Party that is a CDO, such Initial CDO Consent Request Letter or Follow-Up CDO Consent Request Letter shall be countersigned or otherwise duly executed by a majority of the members of the board of directors of such CDO or by an authorized signatory on their behalf. (c) With respect to any Advisory Contract entered into after the date of this Agreement and prior to the Closing, such Seller shall cause DCM to notify (i) the Client (each, a "NEW CLIENT") party to such Advisory Contract (other than a CDO) and (ii) in the case of each New Client that is a CDO, each Person whose consent is required to an assignment of such Advisory Contract related to such CDO (each a "NEW CDO CONSENT PARTY") or the trustee with respect to such CDO for distribution by such trustee to such New CDO Consent Parties, of the transactions contemplated by this Agreement and the Ancillary Agreements and the "assignment" (or deemed assignment) of such Advisory Contract resulting from such transactions, and shall obtain the written consent of such New Client and, in the case of any New Client that is a CDO, each of the New CDO Consent Parties required under such Advisory Contract to consent to an assignment of such Advisory Contract to such assignment (or deemed assignment) of such Advisory Contract at the time such Advisory Contract is entered into, either by means of a notification and written consent substantially similar to the Initial Client Consent Request Letter, the Initial CDO Consent Request Letter or written evidence of the due adoption by a majority of the members of the board of directors of such Hedge Fund or by any other authorized Person of the Hedge Fund Resolutions, as applicable, or by other reasonable means which shall be comparably effective in form and substance to confirm the consent of such New Client or New CDO Consent Party, as the case may be. (d) Such Seller shall cause each of the Company and its Subsidiaries to use its reasonable best efforts to obtain the consents from the Clients, the New Clients, the CDO Consent Parties and the New CDO Consent Parties in the manner contemplated by this Section 5.1 and, in the case of any Client or New Client that is a CDO, to satisfy such other conditions to an assignment (or deemed assignment) of the applicable Advisory Contract that are identified on ANNEX J-2 or in such Advisory Contract, as applicable. Except in accordance with the provisions of Section 7.5, prior to the Closing, the Purchaser agrees that it will not (and it will not cause or permit any of its Affiliates to) contact, in writing or otherwise, any Client or New Client of the Company or any of its Subsidiaries (or any Person who acts as an adviser or "gatekeeper" for any such Client or New Client) or any CDO Consent Party or New CDO Consent Party in connection with the transactions contemplated by this Agreement and the Ancillary Agreements without the prior approval of the Sellers' Representative. 39 5.2 ADVISERS ACT AUTHORIZATIONS. Prior to the Closing, such Seller shall, and shall cause DCM and its Representatives and Affiliates to, cooperate in good faith with the Purchaser, as and to the extent reasonably requested by the Purchaser or the Purchaser's Representatives, to prepare and, promptly after the Closing, to file an amendment to DCM's Form ADV to reflect to the extent necessary or required the transactions contemplated by this Agreement and the Ancillary Agreements. 5.3 EFFORTS AND ACTIONS TO CAUSE CLOSING TO OCCUR. Prior to the Closing, upon the terms and subject to the conditions of this Agreement, such Seller shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and cooperate with the Purchaser in order to do, all things necessary, proper or advisable (subject to any applicable Requirements of Law) to consummate the Closing and the taking of such actions as are necessary to obtain the Company Consents, the Sellers' Consents and the Client Consents. In addition, such Seller shall not take any action after the date hereof for the purpose of preventing or materially delaying the satisfaction or obtaining of any of the conditions to Closing set forth in Article VIII, any approval, consent, exemption or authorization from any Governmental Authority or Person required to be obtained prior to Closing. Nothing contained in this Agreement shall require such Seller to pay any consideration to any other Person from whom any such approvals, authorizations, consents, Orders, licenses, permits, qualifications, exemptions or waiver is requested. In addition, prior to the Closing, such Seller shall, and shall cause the Company and its Subsidiaries and the Representatives and Affiliates of each of the foregoing to, cooperate, as and to the extent requested by the Purchaser or the Purchaser's Representatives, in connection with any Claims arising in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, other than any such Claims brought by the Purchaser or any of its Affiliates or any of their respective shareholders, directors, officers or employees against any of the Sellers. 5.4 CONDUCT OF BUSINESS. Between the date of this Agreement and the Closing, except as described in Section 5.4 of the Disclosure Letter or except as expressly contemplated by this Agreement or any Ancillary Agreement or in connection with the transactions contemplated hereby or thereby, unless the prior written consent of the Purchaser is given otherwise (which consent shall not be unreasonably withheld or delayed): (a) Such Seller shall cause the Company and its Subsidiaries to conduct (and they will use their reasonable best efforts to cause each CDO and Hedge Fund to conduct) their business only in the ordinary course of business consistent with past practices; (b) Such Seller shall cause each of the Company and its Subsidiaries not to (i) make (or incur any obligation to make) any purchase, acquisition, sale, disposition, grant, transfer or lease of any assets or property (including the purchase of securities for its own account outside of the ordinary course of business consistent with past practice, or any purchase of a business as a going concern), or merge or consolidate with any other Person, in each case in this subparagraph (i) other than in the ordinary course of business consistent with past practices and other than sales of worn-out or 40 obsolete property or equipment, (ii) consensually subject to any Lien, other than to the extent currently existing and Permitted Liens, any of its material properties or material Assets, nor permit any of the foregoing to exist, or (iii) cause the release of any cash pledged as collateral against any standby letter of credit issued in connection with any Real Property Lease; (c) Such Seller shall cause each of the Company and its Subsidiaries not to (i) incur or assume Indebtedness in an amount exceeding $250,000 individually and $500,000 in the aggregate (it being understood that any such Indebtedness outstanding as of the Closing Date shall constitute Assumed Indebtedness for purposes of calculating the Purchase Price), (ii) make any Investments in any other Person other than in the ordinary course of business consistent with past practice and in amounts not to exceed $250,000 individually or $500,000 in the aggregate other than investments in commercial paper having at the date of investment the highest credit rating obtainable from Standard & Poor's Rating Service (or its successor) or Moody's Investors Service (or its successor), or (iii) form or otherwise establish any Subsidiary or new Affiliate of the Company, or otherwise conduct business through any other Person, other than in connection with the initial public offering of Triarc Deerfield Investment Corporation; (d) Such Seller shall cause each of the Company and its Subsidiaries not to enter into, issue, incur or assume (i) any obligations to pay the deferred purchase price of property or services, except trade accounts payable and accrued commercial or trade liabilities arising in the ordinary course of business and not past due, (ii) any interest rate or currency swap, cap, collar or similar agreement or hedging device under which the Company or any of its Subsidiaries is obligated to make payments, whether periodically or upon the happening of a contingency, (iii) any indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by the Company or any of its Subsidiaries (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (iv) any obligations under leases which have been or should be, in accordance with GAAP, recorded as capital leases or (v) any class or series of capital stock or other equity or profits interests of the Company or any of its Subsidiaries that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event or otherwise is required to be redeemed, redeemable at the option of the holder of such class or series at any time or convertible into or exchangeable for such class or series at any time, other than pursuant to the Existing Operating Agreement, except, in each case, in the ordinary course of business consistent with past practice and in amounts not to exceed $100,000 individually or $250,000 in the aggregate; (e) Such Seller shall cause each of the Company and its Subsidiaries not to make or incur any obligation to make a change in their certificate of incorporation, by-laws, operating agreements or other organizational documents, as applicable, including the Existing Operating Agreement; PROVIDED, that the Company shall amend the Existing Operating Agreement as contemplated hereby; 41 (f) (A) During the period ending July 16, 2004, such Seller shall cause each of the Company and its Subsidiaries not to declare, set aside or pay any dividend or distribution (whether in cash or in property), make (or incur an obligation to make) any other distribution in respect of its capital stock or interests or make (or incur an obligation to make) any direct or indirect redemption, purchase or other acquisition of its stock or interests (or any other equity or ownership interest therein), other than distributions of cash to holders of equity or profits interests in the Company that after giving effect thereto, would not in the Sellers' reasonable good faith judgment leave the Company and its Subsidiaries with Cash as of the close of business on July 16, 2004 of less than the Minimum Cash Amount; and (B) during the period after July 16, 2004 until (and including) the Closing Date, such Seller shall cause each of the Company and its Subsidiaries not to declare, set aside or pay any dividend or distribution in respect of its capital stock or interests or make (or incur an obligation to make) any direct or indirect redemption, purchase or other acquisition of its stock or interests (or any other equity or ownership interest therein), other than distributions in an aggregate amount equal to the Tax Liability (as defined in the Existing Operating Agreement and computed consistent with past practices) of the members of the Company immediately prior to the Closing computed only with respect to Taxable Income (as defined in the Existing Operating Agreement) of the Company arising during the period beginning on July 17, 2004 and ending on the Closing Date, but excluding all items of gain or gross income attributable to Redemption Fees payable by Sumitomo Life under the Sumitomo Letter; (g) Such Seller shall not sell, assign, pledge, subject to a Lien or otherwise transfer or restrict such Seller's interest in (or in the case of DPF, DPF's right to acquire the SLA Interest pursuant to the SLA Purchase Agreement), and shall cause each of the Company and its Subsidiaries not to issue or sell, or to register on their respective books and records any transfer of, any equity or profit interests of the Company or any of its Subsidiaries or any security or obligation which by its terms is convertible into or exchangeable for, or any option, warrant, call or preemptive, subscription or purchase right of any kind to purchase or otherwise acquire, any equity or profits interests of the Company or any of its Subsidiaries; (h) Such Seller shall cause each of the Company and its Subsidiaries not to, except as required by any Requirement of Law or pursuant to any Contractual Obligation set forth in Schedule 3.25(a) of the Disclosure Letter, (i) make any change in the compensation or fringe benefits payable or to become payable to, or make any termination or severance payment to, any of their present or former directors, officers, members, stockholders or employees, PROVIDED that the foregoing shall not prohibit changes in compensation or fringe benefits in the ordinary course consistent with past practice, the payment of bonus compensation in a manner consistent with past practices or the making of any termination or severance payment in the ordinary course of business or pursuant to the requirement of any Benefit Plan existing on the date hereof, (ii) enter into, amend, terminate or otherwise modify any Benefit Plan (other than any "at will" employment contract which would not require the consent of the Purchaser), except for any changes that would not increase the Company's obligations under any such Benefit Plan by more than $100,000 individually or $250,000 in the aggregate; PROVIDED, that the foregoing shall not be construed to permit the Company or any of its Subsidiaries 42 to enter into, amend, terminate or otherwise modify any employment, severance pay, change in control or termination plan or agreement that will obligate the Company or any of its Subsidiaries after the Closing without the prior written consent of the Purchaser, (iii) other than with respect to termination of the Related Party Agreements required by this Agreement, enter into, amend or otherwise modify any Contractual Obligation with any of the members of the Company, members of their Immediate Families or their respective Affiliates or (iv) terminate or constructively terminate the employment of any employee who is a party to the Employment Agreements contemplated hereby other than for Cause (as such term is defined in such employee's Employment Agreement); (i) Such Seller shall cause each of the Company and its Subsidiaries not to (i) except in connection with the termination of any of the Related Party Agreements as contemplated by this Agreement, prepay any loans or otherwise satisfy material payment obligations before they become due, waive or cancel any rights of material value or terminate or elect not to renew any of the Material Contracts or any IP License (other than any of the Material Contracts or IP Licenses, the failure to elect to renew of which would not be material to the Company and its Subsidiaries, taken as a whole); PROVIDED, HOWEVER, that such Seller shall cause each of the Company and its Subsidiaries to pay prior to the Closing all accrued bonuses in respect of fiscal year 2003 payable to their employees and agents, or (ii) enter into any Contractual Obligation that, had it been entered into on or prior to the date hereof, would constitute a Material Contract, or except in connection with the termination of any of the Related Party Agreements as contemplated by this Agreement, materially amend, supplement or otherwise modify any Material Contract or any such Contractual Obligation; (j) Such Seller shall cause each of the Company and its Subsidiaries not to make any change in its accounting methods or practices unless required by GAAP or applicable Requirements of Law; (k) Such Seller shall cause each of the Company and its Subsidiaries not to (i) accelerate or cause the acceleration of the collection of its accounts receivable or contingent revenue, (ii) delay or cause the delay in the payment of its accounts payable, in each case of clauses (i) and (ii), other than when due in the ordinary course of business consistent with past practices, or (iii) fail to make bi-weekly payroll payments to their employees consistent with past payroll practice; (l) Such Seller shall cause each of the Company and its Subsidiaries to use commercially reasonable efforts to have in effect and maintain at all times all insurance in all material respects of the kind, in the amount and with the insurers set forth in Section 3.21 of the Disclosure Letter hereto or substantially equivalent insurance with any substitute insurers approved in writing by the Purchaser; (m) Such Seller shall cause each of the Company and its Subsidiaries not to (i) settle or compromise any material Claim in excess of $100,000 or (ii) write up, write down or write off the book value of any Assets in the aggregate in excess of $100,000 (except for any such write ups, write downs or write offs made in accordance with GAAP consistently applied); 43 (n) Such Seller shall cause each of the Company and its Subsidiaries not to terminate its existence or voluntarily file for or otherwise commence proceedings with respect to bankruptcy, reorganization, receivership or similar status; (o) Such Seller shall cause each of the Company and its Subsidiaries not to make or change any Tax election, change any Tax accounting method, waive or extend the statute of limitations in respect of Taxes, amend any Tax Return, enter into any closing agreement with respect to any Tax, settle any Tax claim or assessment or surrender any right to a claim for a Tax refund, in each case except to the extent any of the foregoing actions described in this clause 5.4(o) (A) relate solely to a Tax period ending on or prior to the Closing and (B) would not have an adverse effect on the Company, or any of its members (including the Purchaser) or Subsidiaries, for a Tax period ending after the Closing. Such Seller shall cause the Company and each of its Subsidiaries to file all Tax Returns required to be filed by them on or before the Closing Date, in the ordinary course of business and consistent with past practice, and fully and timely pay all Taxes due and payable prior to the Closing Date. Such Seller shall promptly notify the Purchaser of any federal, state, local or foreign income or franchise suit, claim, action, investigation, proceeding or audit pending against or with respect to the Company or any of its Subsidiaries in respect of any Tax matter; (p) Such Seller shall cause each of the Company and its Subsidiaries not to enter into any Strategic Financing Agreement in connection with the issuance or sale of any securities of any CDO; (q) Such Seller shall cause each of the Company and its Subsidiaries not to incur capital expenditures other than in the ordinary course of business consistent with past practice and in amounts not to exceed $250,000 individually or $500,000 in the aggregate; and (r) Such Seller shall not, and shall cause each of the Company and its Subsidiaries not to agree in writing to do, or otherwise to take any action inconsistent with, any of the foregoing. 5.5 FINANCIAL STATEMENTS. Commencing with the month ending June 30, 2004 and until the Closing, such Seller will cause the Company to furnish to the Purchaser, within 20 Business Days after each month end for each month, and each quarter end for each quarter, ending more than 20 Business Days prior to the Closing, with complete and correct copies of (a) unaudited consolidated monthly balance sheets, statements of income and retained earnings and statements of cash flows of the Company and its Subsidiaries, certified by the chief financial officer of the Company, (b) unaudited consolidated quarterly balance sheets, statements of income and retained earnings, statements of cash flows and statements of members' equity of the Company and its Subsidiaries as of, and for the fiscal period ended on, such quarter end and the comparable period in the preceding year, certified by the chief financial officer of the Company, which quarterly financial statements shall have been reviewed by Ernst & Young LLP in accordance with the procedures set forth in Statement on Auditing Standards No. 71, (c) information regarding the aggregate assets under management by the Company 44 and its Subsidiaries as of such month end, and (d) such other information regarding the Company's and its Subsidiaries' assets under management and management fees received or earned as of such month end, broken out by category of Client, asset class and/or similar types of information, in each case of (a), (c) and (d) above, as and to the extent prepared by the Company or its Subsidiaries for internal use. In addition, such Seller will cause the Company to furnish to the Purchaser as soon as reasonably practicable after the date hereof and no less than ten Business Days prior to the Closing complete and correct copies of the unaudited consolidated balance sheet of the Company and its Subsidiaries as of, and the unaudited consolidated statements of operations, cash flows and members' equity of the Company and its Subsidiaries for the fiscal period ended, March 31, 2004 which shall have been reviewed by Ernst & Young LLP in accordance with the procedures set forth in Statement on Auditing Standards No. 71. Notwithstanding the foregoing, if financial statements of the Company are amended and restated as a result of the procedures included in Section 5.16 of the Disclosure Letter, then the procedures in Section 5.16 of the Disclosure Letter regarding the timing of, and the procedures for, the delivery of such amended and restated financial statements covered by Section 5.16 of the Disclosure Letter shall control. 5.6 PRESERVATION OF BUSINESS AND ASSETS. Until the Closing, such Seller shall cause each of the Company and its Subsidiaries to use its commercially reasonable efforts to: (a) preserve the current business of the Company and its Subsidiaries, (b) maintain the present Clients of the Company and its Subsidiaries on terms that are at least as favorable as the terms of the agreement(s) between the Company or any of its Subsidiaries, as the case may be, and the relevant Client as in effect on the date hereof, (c) preserve the goodwill of the Company and its Subsidiaries, and (d) preserve any Material Permits required for, or useful in connection with, the business of the Company and its Subsidiaries (including all investment adviser and investment adviser representative registrations). 5.7 ACCESS; INVESTIGATION. Except as otherwise provided in this Section 5.7 and Section 7.5, from the date of this Agreement through the Closing Date, such Seller agrees that the Purchaser shall be entitled, through any director, officer, employee, accountant, legal counsel, financial and other advisor, consultant, broker, finder, agent or any other authorized representative (collectively, the "REPRESENTATIVES") of the Purchaser, to make such investigation of the properties, assets, businesses, operations and personnel of the Company and each of its Subsidiaries, and such examination of the books, records and financial condition of or relating to the Company and each of its Subsidiaries, as the Purchaser deems appropriate. Any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances, and such Seller shall, and shall cause the Company, each of its Subsidiaries and their respective Representatives to, cooperate in any such investigation. No investigation by the Purchaser shall diminish or obviate any of the representations, warranties, covenants or agreements of any of the Sellers or the Guarantor contained in this Agreement or in any of the Ancillary Agreements. In order that the Purchaser may have full opportunity to make such examination or investigation as it deems appropriate of the business and affairs of the Company and each of its Subsidiaries, such Seller 45 (i) shall furnish and shall cause the Company and each of its Subsidiaries to furnish the Purchaser's Representatives during such period with all such information and copies of all such documents concerning the business and affairs of the Company and each of its Subsidiaries as the Purchaser's Representatives may reasonably request, (ii) shall make available and shall cause the Company and each of its Subsidiaries to make available such Representatives of the Company, any of its Subsidiaries or such Seller as the Purchaser's Representatives may reasonably request, (iii) shall use its reasonable best efforts to make available and shall cause the Company and each of its Subsidiaries to use their respective reasonable best efforts to make available such Clients, investors in any CDO or Hedge Fund and Persons that provide services to any CDO (such as indenture trustees, insurers and the like) as the Purchaser's Representatives may reasonably request, (iv) shall permit and shall cause the Company, each of the Company's Subsidiaries and each of their respective Representatives to permit the Purchaser's Representatives access to the properties of the Company and each of its Subsidiaries and all parts of such properties as the Purchaser's Representatives may reasonably request and (v) shall cause the Representatives of such Seller, and shall cause the Company and each of its Subsidiaries to cause the Representatives of the Company or any of its Subsidiaries, to cooperate with the Purchaser's Representatives in connection with such examination or investigation; PROVIDED, HOWEVER, that any such investigation and examination shall be conducted at the Purchaser's expense, at a reasonable time and in accordance with the terms of the Confidentiality Agreement (as defined below) and not to unreasonably interfere with the normal operation of the business of any of the Sellers, the Company or any of its Subsidiaries. 5.8 BOOKS AND RECORDS. Such Seller shall, and shall cooperate with the Purchaser to, preserve until the seventh anniversary of the Closing Date or such longer period as may be required under the Advisers Act or other applicable Requirements of Law, all records possessed or to be possessed by such party relating to the business of the Company and any of its Subsidiaries prior to the Closing Date, including the books and records necessary to substantiate the performance history of the Company or any of its Subsidiaries. 5.9 NO SOLICITATION OF OTHER OFFERS. Until the earlier of the termination of this Agreement pursuant to Section 10.1 or the occurrence of the Closing, such Seller shall not, and shall cause the Company, its Subsidiaries, and their respective Representatives not to, directly or indirectly, (a) solicit, initiate or encourage any inquiries, discussions or proposals regarding, (b) continue, propose or enter into negotiations or discussions with respect to or (c) enter into any agreement, letter of intent, agreement in principle or other understanding providing for, any Alternative Transaction; nor shall any of such Persons provide or permit the provision of any information regarding, or afford any access to the properties, books or records of, the Company to any other Person (other than the Purchaser and its Representatives) for the purpose of making, evaluating or determining whether to make or pursue any inquiries or proposals with respect to, any Alternative Transaction. 46 5.10 CONFIDENTIALITY. (a) From and after the Closing, SCM and DPF shall comply with all confidentiality obligations contained in Sachs' Employment Agreement as though it were a party thereto. (b) Such Seller shall not make, and shall cause the Company and its Subsidiaries not to make, any press release or similar public announcement or communication concerning this Agreement or any of the Ancillary Agreements or the transactions contemplated hereby or thereby without advance approval thereof by the Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed. (c) No provision of this Section 5.10 shall be construed to prohibit (i) disclosures by such Seller to appropriate authorities of such information as may be legally required for federal securities, Tax, accounting or other reporting purposes; (ii) disclosures by such Seller to Clients, suppliers, customers, agents and independent contractors of the Company or its Subsidiaries to the extent reasonably necessary, in the judgment of the Sellers' Representative in consultation with the Purchaser, to preserve the business of the Company or any of its Subsidiaries or to facilitate the transactions contemplated by this Agreement and the Ancillary Agreements; (iii) confidential disclosures by such Seller to any of its Representatives; (iv) confidential disclosures by such Seller to any of its Affiliates; (v) disclosures by such Seller pursuant to the terms of an Order of a Governmental Authority of competent jurisdiction; (vi) disclosures by such Seller required in connection with legal proceedings; or (vii) disclosures by such Seller of matters of which there is public knowledge other than as a result of disclosures made in breach hereof. 5.11 COMPLIANCE PROCEDURES AND PRACTICES. Prior to the Closing, such Seller shall cause the Company and its Subsidiaries and their Representatives to take all actions reasonably requested by the Purchaser to enable the Company and its Subsidiaries, following the Closing, to satisfy the requirements of Rule 206(4)-7 under the Advisers Act with respect to the Company and its Subsidiaries, including adopting and implementing written procedures reasonably designed to prevent violations under the Advisers Act (the "COMPLIANCE POLICIES AND PROCEDURES"). Such Seller shall cause the Company and its Subsidiaries to cooperate with and assist in such compliance audits and regulatory reviews as may reasonably be requested by the Purchaser prior to the Closing. 5.12 SECTION 754 ELECTION. At the Purchaser's written request, such Seller shall cause the Company and any of its Subsidiaries to make an election under Section 754 of the Code (and any similar state, local or foreign Law), or ensure that such an election is in effect, for the taxable year in which the transfers of partnership interests contemplated by this Agreement occur and any subsequent taxable year, and such Seller shall cooperate with the Company in the Company's preparation and filing of IRS Form 1065 (including, for the taxable year ending on the Closing Date by reason of the Company's or any Subsidiary's termination under Section 708 of the Code) and any other forms required in connection with making such an election, including the execution of these forms where required. 47 5.13 KEY-MAN INSURANCE. If requested by the Purchaser, each of Sachs, SCM and Roberts shall, and shall use their commercially reasonable efforts to cause Trutter to, cooperate with the Purchaser at the Purchaser's expense in its efforts to obtain prior to the Closing Date both key-man life insurance and disability insurance policies for each of Sachs, Roberts and Trutter. 5.14 SARBANES-OXLEY COMPLIANCE. Prior to the Closing, such Seller shall, and shall cause the Company and its Subsidiaries and their Representatives to, permit the Purchaser, at the Purchaser's expense (which expenses shall be reimbursed in full by the Company and its Subsidiaries immediately after the Closing if the Closing occurs), to take all actions that the Purchaser may deem necessary or appropriate, and to cooperate and to cause the Representatives of such Seller, the Company and its Subsidiaries to cooperate in the taking of such actions, to enable the Purchaser, following the Closing, to satisfy the applicable obligations under Sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated by the SEC pursuant thereto (as amended from time to time, the "SOA") and the other requirements of the SOA with respect to the Company and its Subsidiaries, including establishing and maintaining adequate disclosure controls and procedures and internal controls over financial reporting as such terms are defined in the SOA. Such Seller shall, and shall cause the Company and its Subsidiaries, for all income tax purposes, to treat any amounts reimbursed by the Company and its Subsidiaries pursuant to this Section 5.14 as an expense of the Company and its Subsidiaries for the taxable year beginning on the day after the Closing Date. 5.15 KEEP PLAN. Such Seller shall cause the board of directors of the Company to terminate the KEEP Plan pursuant to Article VII of the KEEP Plan, effective as of immediately prior to the Closing. In addition, such Seller shall cause the Company to take all necessary actions to cancel immediately prior to the Closing each SAR outstanding as of immediately prior to the Closing, including obtaining any required consents from participants in the KEEP Plan. In addition, such Seller shall cause each SAR held by a participant who has entered into an employment agreement with the Company or any of its Subsidiaries as of the date hereof or prior to the Closing Date to be cancelled without further consideration and each SAR held by a participant who has not so entered into such an employment agreement to be cancelled in return for a payment made by the Company immediately prior to the Closing equal to $1.00 for each SAR. 5.16 OTHER ACTIONS. Promptly after the date hereof and prior to the Closing, the Sellers shall cause the Company and its Subsidiaries to, and the Purchaser shall, take the actions described in Section 5.16 of the Disclosure Letter. 5.17 SLA PURCHASE AGREEMENT; SUMITOMO LETTER. Prior to Closing, (a) DPF shall comply in all material respects with its obligations under the SLA Purchase Agreement, (b) subject to the satisfaction of the conditions set forth therein, DPF shall consummate the transactions contemplated by the SLA Purchase Agreement, (c) neither DPF nor DCM shall amend or modify or waive any of its rights under or fail to enforce the SLA Purchase Agreement or the Sumitomo Letter without prior written consent of the 48 Purchaser (not to be unreasonably withheld or delayed) and (d) SCM and DPF shall contribute or cause to be contributed to the Company all Redemption Fees (as defined in the Sumitomo Letter) paid by Sumitomo prior to the Closing; PROVIDED, HOWEVER, that DPF shall not be required to consummate the transactions contemplated by the SLA Purchase Agreement unless the Purchaser shall have acknowledged in writing that, based in part on the certificates delivered to the Purchaser under Article VIII (and without prejudice or waiver of Purchaser's right to contest after the Closing whether such certificates were true and correct or properly given), that the conditions to the Purchaser's obligations to close under Article VIII have been satisfied or waived (subject only to the consummation of the transactions contemplated by the SLA Purchase Agreement). 5.18 2004 BONUSES. If the Closing has not occurred prior to February 28, 2005, the Sellers shall cause the Company or its Subsidiaries to pay all 2004 Bonuses on or prior to February 28, 2005. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER As a material inducement to the Sellers to enter into this Agreement and the Ancillary Agreements to which they are a party and consummate the transactions contemplated hereby and thereby, the Purchaser hereby makes to each of the Sellers the following representations and warranties: 6.1 ORGANIZATION. The Purchaser is a Delaware corporation, duly organized, validly existing and in good standing under the laws of Delaware with all requisite corporate power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged. 6.2 AUTHORITY. The Purchaser has full corporate right, authority and power to enter into this Agreement and each Ancillary Agreement to which it is a party and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by the Purchaser of this Agreement and each such Ancillary Agreement have been duly authorized by all necessary action on the part of the Purchaser, and no other action on the part of the Purchaser is required in connection therewith. This Agreement and each such Ancillary Agreement have been duly executed and delivered by the Purchaser. This Agreement and each such Ancillary Agreement, assuming due and valid authorization, execution and delivery thereof by the other parties thereto, constitutes a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its respective terms except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. The execution, delivery and performance by the Purchaser of this Agreement and each such Ancillary Agreement and the consummation of the transactions contemplated hereby and 49 thereby: (a) do not contravene the terms of the certificate of incorporation or bylaws of the Purchaser; (b) do not materially violate, result in any material breach or material default of (and with due notice or lapse of time or both would not result in any material breach or material default of), accelerate any material obligation or impose any additional material obligation under, give rise to a right of termination of, or result in the creation of any material Lien under, any material Contractual Obligation to which the Purchaser is a party or by which any of its assets are bound; and (c) assuming the Company Consents and the Sellers Consents have been obtained or made, do not violate in any material respect any Requirement of Law or Order of any Governmental Authority applicable to the Purchaser or by which its assets are bound. 6.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. Except as set forth in this Agreement, no material approval, consent, exemption or authorization by, notice to or filing with, any Governmental Authority or any other Person is necessary or required to be obtained by the Purchaser in connection with the execution, delivery or performance by the Purchaser of this Agreement or the Ancillary Agreements or the transactions contemplated hereby and thereby. 6.4 LITIGATION. There are no Claims pending or, to the Knowledge of the Purchaser, threatened against the Purchaser, at law or in equity, in arbitration or before any Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any of the Ancillary Agreements by the Purchaser or the consummation by the Purchaser of the transactions contemplated hereby or thereby. 6.5 SUFFICIENCY OF FUNDS. The Purchaser has sufficient immediately available funds to pay the full amount of the Purchase Price at the Closing and to consummate the transactions contemplated by the Commitment Agreement. 6.6 ACQUISITION FOR INVESTMENT. The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its purchase of the Purchased Interests. The Purchaser represents and warrants that it is an "accredited investor" within the meaning of Rule 501 under the Securities Act. The Purchaser is acquiring the Purchased Interests for its own account as principal for investment and not with a view toward resale or distribution thereof, and the Purchaser has no present intent, agreement or understanding to sell, pledge or otherwise dispose of any Purchased Interests to any other Person. The Purchaser understands that the Purchased Interests have not been registered under the Securities Act or applicable state securities laws, and therefore the Purchased Interests may not be sold or otherwise transferred unless they are registered under the Securities Act and any applicable state securities laws or unless an exemption from such registration is available. 6.7 FINDER'S FEE. Other than fees and expenses payable to Goldman, Sachs & Co. (which will be paid by the Purchaser), the Purchaser has not incurred, become liable for or otherwise entered into any contract or agreement with respect to any broker's commission, finder's fee or similar payment relating to or in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. 50 6.8 EXCLUSIVITY OF REPRESENTATIONS. Except for the representations and warranties specifically set forth in this Agreement or any certificate to be executed and delivered by or on behalf of the Purchaser pursuant to, or as contemplated by, Article IX, the Purchaser makes no representation, warranty or guaranty, express or implied, with respect to the matters contained in this Agreement. ARTICLE VII COVENANTS OF THE PURCHASER 7.1 EFFORTS AND ACTIONS TO CAUSE CLOSING TO OCCUR. Prior to the Closing, upon the terms and subject to the conditions of this Agreement, the Purchaser shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and cooperate with the Sellers in order to do, all things necessary, proper or advisable (subject to any applicable Requirements of Law) to consummate the Closing and the taking of such actions as are necessary to obtain the Company Consents, the Sellers' Consents and the Client Consents. In addition, the Purchaser shall not take any action after the date hereof for the purpose of preventing or materially delaying the satisfaction or obtaining of any of the conditions to Closing set forth in Article IX, any approval, consent, exemption or authorization from any Governmental Authority or Person required to be obtained prior to Closing. Nothing contained in this Agreement shall require the Purchaser to pay any consideration to any other Person from whom any such approvals, authorizations, consents, Orders, licenses, permits, qualifications, exemptions or waiver is requested. In addition, prior to the Closing, the Purchaser shall cooperate, as and to the extent requested by the Sellers or the Representatives of the Sellers, in connection with any Claims arising in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, other than any such Claims brought by any of the Sellers or any of their Affiliates or any of their respective shareholders, officers or employees against the Purchaser. 7.2 CONFIDENTIALITY. The terms of the Confidentiality Agreement, dated as of February 20, 2004, between Putnam Lovell NBF Securities, Inc., on behalf of itself and the Company, and the Purchaser (the "CONFIDENTIALITY AGREEMENT") are hereby incorporated herein by reference. Upon the Closing, the Confidentiality Agreement shall terminate and be of no further force and effect and the Sellers shall use commercially reasonable efforts to cause Putnam Lovell NBF Securities, Inc. to execute and deliver to the Purchaser a written agreement to such effect. No press release or similar public announcement or communication concerning this Agreement or any of the Ancillary Agreements or the transactions contemplated hereby or thereby shall be made by the Purchaser prior to the Closing without advance approval thereof by the Sellers' Representative, which approval shall not be unreasonably withheld, conditioned or delayed, except as may be required to comply with applicable Requirements of Law, in which case the Purchaser shall, to the extent practicable, consult in good faith with the Sellers' Representative before issuing any such press release or making any such public announcement. 51 7.3 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. (a) The Purchaser agrees that, for a period of six years after the Closing, it shall not cause the Restated Operating Agreement to be amended, supplemented or modified in a manner that materially adversely affects the rights of the directors and officers of the Company as of the date hereof to indemnification and advancement of expenses provided in the Restated Operating Agreement for acts or omissions of such directors and officers occurring prior to the Closing. (b) The Purchaser agrees that it shall cause the Company to obtain, for a period of six years after the Closing, extended reporting or tail coverage on, or a substitute directors' and officers' liability insurance policy for, the directors' and officers' liability insurance policy maintained by the Company as of the date hereof for the benefit of those persons who are covered by such policy immediately prior to the Closing, in each case, on terms and conditions that are, in the aggregate, no less favorable to the insured with respect to claims arising from acts or omissions arising prior to and including the Closing than are currently in effect; PROVIDED, that such extended reporting or tail coverage or substitute policy can be obtained and maintained on commercially reasonable terms and at a cost to the Company not greater than 115 percent of the aggregate annual premium for the directors' and officers' liability insurance policy maintained by the Company on the date hereof. 7.4 EMPLOYEES. With respect to any employee benefits that are provided to any person who was an employee of the Company or any of its Subsidiaries immediately prior to the Closing (each such person, a "COMPANY EMPLOYEE" and collectively, the "COMPANY EMPLOYEES") under the Purchaser's employee benefit plans (the "PURCHASER PLANS") that are similar to those employee benefits provided under the Benefit Plans, service accrued by Company Employees during employment with the Company or any of its Subsidiaries prior to the Closing Date shall be recognized for all purposes to the same extent recognized by the Company and its Subsidiaries prior to the Closing Date, except to the extent necessary to prevent duplication of benefits. To the extent permitted by each applicable Purchaser Plan and as required by applicable law, with respect to any medical, dental or other welfare benefits that are provided at any time to Company Employees under Purchaser Plans, any applicable pre-existing condition exclusions and waiting periods (except to the extent such exclusions and waiting periods are already in effect with respect to such employees and have not been satisfied under the comparable Benefit Plan immediately prior to the Closing Date) shall be waived, and each Company Employee shall be provided with credit for any co-payments and deductibles paid in the plan year in which the Closing Date occurs in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans of the Purchaser in which such employees are eligible to participate in after the Closing Date. 7.5 CONTACT WITH INVESTORS, CLIENTS AND OTHER PERSONS. Without the prior consent of any of Sachs, Roberts or Shrear (which consent shall not be unreasonably withheld or delayed), the Purchaser shall not, and shall cause each of its Representatives not to, contact or communicate prior to the Closing with any Person who, to the Knowledge of the Purchaser or the Purchaser's Representatives, is an investor in 52 any CDO or Hedge Fund, Client or other Person who provide services to any CDO in connection with the transactions contemplated by this Agreement and the Ancillary Agreements unless an authorized Representative of the Company or any of its Subsidiaries is present at any such meeting or conference. 7.6 BOOKS AND RECORDS. (a) For a period of seven years after the Closing Date, the Purchaser shall preserve and retain, or cause the Company and its Subsidiaries to preserve and retain, in accordance with the Purchaser's or the Company's or such Subsidiary's normal documentation retention practices, all corporate, accounting, Tax, legal, auditing or other books and records of the Company and its Subsidiaries (including any documents relating to any Claims) relating to the conduct of business and operations of the Company and its Subsidiaries prior to the Closing Date. (b) After the Closing Date, the Purchaser shall cause the Company and its Subsidiaries to permit the Sellers and their authorized Representatives to have reasonable access to, and to inspect, all materials referred to in Section 7.6(a) and to meet with officers and employees of the Purchaser and the Company and its Subsidiaries on a mutually convenient basis in order to obtain explanations with respect to such materials and to obtain additional information, which access, inspection, copying and meetings may be conditioned upon the applicable Seller and its authorized Representative executing a confidentiality agreement in a form reasonably acceptable to the Purchaser; PROVIDED, HOWEVER, that any such access, inspection and meeting shall be conducted at the applicable Seller's expense, at a reasonable time and in such a manner as to maintain the confidentiality of this Agreement and the transactions contemplated hereby and not to unreasonably interfere with the normal operation of the business of the Purchaser, the Company or any of its Subsidiaries. Notwithstanding anything contained in this Agreement or any other agreement between any of the Sellers and the Purchaser, none of the Purchaser, the Company or any of its Subsidiaries shall have any obligation to disclose any information to any of the Sellers if such disclosure would (i) cause significant competitive harm to the Company or any of its Subsidiaries, (ii) jeopardize any attorney-client or other legal privilege; or (iii) violate any applicable laws, fiduciary duty or the provisions of any agreement to which the Purchaser or the Company or any of its Subsidiaries is a party. 7.7 POST-CLOSING RESTRICTIONS ON DISTRIBUTIONS. If the Closing occurs after July 16, 2004 and on or prior to February 28, 2005, until March 1, 2005, the Purchaser shall cause each of the Company and its Subsidiaries not to declare, set aside or pay any dividend or distribution (whether in cash or in property), make (or incur an obligation to make) any other distribution in respect of its capital stock or interests or make (or incur an obligation to make) any direct or indirect redemption, purchase or other acquisition of its stock or interests (or any other equity or ownership interest therein). 7.8 SACHS ADDITIONAL BONUS. To the extent that Section 162(m) of the Code may be applicable to the Additional Bonus (as such term is defined in the Sachs 53 Employment Agreement), Purchaser shall (i) submit the Additional Bonus to a vote of the stockholders of Purchaser at the earlier to occur of the next annual or special meeting (if any) of the stockholders of Purchaser and (ii) recommend for approval of the stockholders of Purchaser the Additional Bonus at such meeting and retain a proxy solicitation firm to solicit proxies in favor of such approval. ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER The obligation of the Purchaser to consummate the transactions contemplated by this Agreement and the Ancillary Agreements is subject to the fulfillment (or waiver by the Purchaser), prior to or at the Closing, of the following conditions: 8.1 LITIGATION; NO OPPOSITION. No Order enjoining or prohibiting the Sellers or the Purchaser or the parties to any Ancillary Agreement or any of the agreements, documents and instruments contemplated hereby from consummating the transactions contemplated hereby or thereby shall have been entered, and no Claim shall have been initiated or threatened by any Governmental Authority at any time prior to the Closing seeking to restrain or prohibit, or seeking damages or other relief in connection with, the execution and delivery of this Agreement or the Ancillary Agreements, or the consummation of the transactions contemplated hereby or thereby. 8.2 REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of the Sellers and the Guarantor set forth in this Agreement and in any certificate delivered pursuant to Article VIII (other than the representations and warranties of the Sellers or the Guarantor, as applicable, set forth in Sections 3.1, 3.2, 3.6, 3.7 (other than the last sentence thereof), 3.14, 4.1, 4.2 and 12.2(a)) shall be true and correct in all respects (but without regard to any limitation or qualification as to materiality or Material Adverse Effect (or similar concept) set forth therein) on and as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for any such representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date), unless the failure or failures of such representations and warranties to be true and correct in all respects have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Each of the representations and warranties of the Sellers or the Guarantor, as applicable, set forth in Sections 3.1, 3.2, 3.6, 3.7 (other than the last sentence thereof), 3.14, 4.1, 4.2 and 12.2(a) shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for any such representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date). 8.3 PERFORMANCE OF OBLIGATIONS. Each of the Sellers shall have performed and complied in all material respects with all covenants and agreements 54 required by this Agreement and the Ancillary Agreements to be performed or complied with by it at or prior to the Closing Date. 8.4 SELLERS' CERTIFICATE. The Sellers' Representative shall have delivered to the Purchaser a certificate signed on behalf of each Seller that is an entity by the chief executive officer or chief financial officer of such Seller and by each Seller and Guarantor that is an individual to the effect that each of the conditions specified above in Sections 8.2, 8.3, 8.13, 8.14 and 8.15 are satisfied. 8.5 CLIENT CONSENTS. (a) The Sellers shall have obtained, or shall have caused the Company and its Subsidiaries to obtain, prior to the Closing (x) Consents with respect to the transactions contemplated by this Agreement and the Ancillary Agreements from CDOs existing as of the date hereof that constituted in the aggregate at least eighty percent (80%) of the Base Date AUM of all such CDOs and (y) Consents with respect to the transactions contemplated by this Agreement and the Ancillary Agreements from each CDO the first closing of which occurs after the date hereof and on or prior to the Closing Date in compliance with the terms of this Agreement. Notwithstanding anything to the contrary set forth in this Agreement, the failure of the specified CDO Consent Parties (as specified in ANNEX J-2) in respect of any Client that is a CDO to provide its Consent in accordance with Section 5.1 shall result in the exclusion from the Base Date AUM calculation in clause (x) above of 100% of the Base Date AUM of the CDO in question. For purposes of this Agreement: "CONSENT" shall mean: (i) With respect to a Client that is a CDO whose Advisory Contract is in effect as of the date of this Agreement, that DCM shall have obtained the requisite consent of such Client and satisfied the requisite conditions to the assignment (or deemed assignment) of such Advisory Contract in accordance with Section 5.1 to the continuation of such Advisory Contract following the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and such Advisory Contract will remain in full force and effect between DCM and such Client (and will not have been breached) after giving effect to the Closing; and (ii) With respect to a New Client that is a CDO whose Advisory Contract is entered into after the date of this Agreement, that DCM shall have obtained the written consent of such New Client and satisfied the requisite conditions to the assignment (or deemed assignment) of such Advisory Contract in accordance with Section 5.1 to the continuation of such Advisory Contract following the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and such Advisory Contract will remain in full force and effect between DCM and such New Client (and will not have been breached) after giving effect to the Closing. In the event that DCM has agreed or entered into an understanding to cap, reduce, waive, reimburse or otherwise modify the fees payable by a Client with respect to 55 one or more of its Advisory Contracts in connection with obtaining such Client's Consent to the transactions contemplated by this Agreement and the Ancillary Agreements, the Sellers shall promptly disclose that fact to the Purchaser and such Client shall be deemed not to have given its Consent for any purpose under this Agreement. (b) At the Closing, the Sellers shall deliver a certificate to the Purchaser certifying as to compliance with the conditions set forth in this Section 8.5, which certificate shall include the calculation of the applicable Base Date AUM in reasonable detail and shall attach thereto evidence of Consents reasonably satisfactory to the Purchaser. 8.6 OTHER APPROVALS. All Company Consents (other than those marked with an asterisk in Section 3.3 of the Disclosure Letter) and Sellers Consents and all other material approvals, consents, exemptions and authorizations by, notices to and filings with, any Governmental Authority or any other Person that, but for the fact that they are not set forth in the Disclosure Letter, would constitute a Company Consent or a Sellers Consent shall have been made, received or taken. 8.7 RESTATED OPERATING AGREEMENT. The Restated Operating Agreement shall be in full force and effect upon the Closing. 8.8 COMMITMENT AGREEMENT. The Commitment Agreement shall be in full force and effect and each of SCM and Roberts shall have made, subject to the terms and conditions set forth therein, the investment required to be made by them pursuant thereto at or prior to the Closing. 8.9 SLA PURCHASE AGREEMENT. The purchase and sale of the SLA Interest shall have been consummated in accordance with the terms of the SLA Purchase Agreement. 8.10 SUMITOMO LETTER. The Sumitomo Letter shall be in full force and effect and either (a) Sumitomo Life shall own not less than 286,817 shares of LEAP or (b) Sumitomo Life shall own less than 286,817 shares of LEAP solely as a result of a redemption under Section 4(a) of the Sumitomo Letter and Sumitomo Life shall have paid the Redemption Fees (as defined in the Sumitomo Letter) required under Section 4 (a) of the Sumitomo Letter in respect of all such redemptions (other than redemptions where after giving effect thereto, Sumitomo owns not less than 286,817 shares of LEAP) and the Company shall have received prior to the Closing an amount in cash equal to the full amount of such Redemption Fees. 8.11 EMPLOYMENT AGREEMENTS. (a) Each of the Employment Agreements for Sachs, Roberts and Trutter shall be in full force and effect and (b) each of Sachs, Roberts and Trutter shall remain employed by the Company and/or its Subsidiaries as of the Closing on a full-time basis and shall not have been incapacitated. 56 8.12 CORPORATE SERVICES AGREEMENT. The Company shall not have disavowed the Corporate Services Agreement or taken any other action to challenge the effectiveness thereof. 8.13 DELIVERY. Each of the Sellers shall have executed (where applicable) and delivered to the Purchaser (or shall have caused to be executed and delivered to the Purchaser by the appropriate Person) the following: (a) certified copies of resolutions of the board of directors and stockholders or similar governing bodies for each of the Sellers, authorizing the execution of this Agreement, the Ancillary Agreements to which it is a party and each of the other agreements, documents and instruments contemplated hereby and thereby, to which such Seller is a party; (b) true and complete copies of each of the agreements, documents and instruments required to be delivered by the terms of this Agreement and the Ancillary Agreements and all agreements, documents, instruments and certificates delivered or to be delivered in connection therewith; (c) a certificate of the secretary of each of the Sellers that is an entity certifying that the resolutions of such Seller and the documents specified in paragraph (a) are in full force and effect and have not been amended or modified, and that the officers of such entity are those persons named in the certificate; and (d) such other certificates and documents as are required hereby or are customary and reasonably requested by the Purchaser. 8.14 KEEP PLAN. The KEEP Plan shall have been terminated and be of no further force or effect and each participant in the KEEP Plan who has not entered into an employment agreement with the Company or any of its Subsidiaries as of the date hereof or prior to the Closing Date shall have delivered a release and waiver of any claims for payment or otherwise related to or in connection with the KEEP Plan, such release and waiver to be in the form attached hereto as ANNEX K. 8.15 [Intentionally Omitted] 8.16 RELATED PARTY AGREEMENTS. The Purchaser shall have received reasonably satisfactory evidence of the termination, cancellation and repayment or settlement in full prior to the Closing of each Related Party Agreement. 8.17 TRUTTER WAIVER. The Trutter Waiver shall be in full force and effect. 8.18 ACCOUNTS RECEIVABLE AND PAYABLE. The Sellers shall have delivered to the Purchaser on the Closing Date (i) a true and complete list, certified by the chief financial officer of the Company, of all accounts receivable prepared in accordance with GAAP, consistently applied, as of the close of business two Business Days prior to 57 the Closing Date setting forth the amount, the account debtor, and the date of payment of each such account receivable collected from the date hereof through the date ending two Business Days prior to the Closing Date, including the aging of each such account receivable as of the date of such payment, (ii) a true and complete list, certified by the chief financial officer of the Company, of all accounts payable prepared in accordance with GAAP, consistently applied, as of the close of business two Business Days prior to the Closing Date including an aging report which shows the time elapsed since the invoice date for all accounts payable as of the date of such report and (iii) a true and complete list, certified by the chief financial officer of the Company, of the Company's good faith estimate (based on reasonable assumptions) of the amounts of all contingent revenue of the Company and its Subsidiaries existing as of the close of business two Business Days prior to the Closing Date. 8.19 OPINION. The Purchaser shall have received an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Company, DCM, SCM, DPF and Sachs, in the form attached hereto as ANNEX L-1, and an opinion of Gardner, Carton & Douglas LLP, counsel to Roberts, in the form attached hereto as ANNEX L-2. 8.20 GOOD STANDING. The Purchaser shall have received a certificate issued by the appropriate Governmental Authority of the jurisdiction of formation or incorporation of the Company, each of its Subsidiaries and each Seller that is an entity, certifying that such Person is validly existing and in good standing in such jurisdiction as of the most recent practicable date prior to the Closing Date. 8.21 FIRPTA CERTIFICATES. Sachs and each Seller other than SCM shall have furnished Purchaser with a certificate stating that such Seller is not a "foreign" person within the meaning of Section 1445 of the Code, which certificate shall set forth all information required by, and otherwise be executed in accordance with, Treasury Regulation ss. 1.1445-2(b); and the Company shall have issued to Purchaser a certificate signed by Sachs stating that fifty percent or more of the value of the Company's gross assets does not consist of "U.S. real property interests," or that ninety percent or more of the value of the Company's gross assets does not consist of "U.S. real property interests" plus cash or cash equivalents, which certificate shall set forth all information required by, and otherwise be executed in accordance with, Treasury Regulation ss. 1.1445-11T(d)(2). 8.22 STRATEGIC FINANCING AGREEMENTS. The applicable accounting treatment of the Strategic Financing Agreements shall have been determined in accordance with the procedures set forth in Section 5.16 of the Disclosure Letter and the Sellers shall have performed in all material respects the actions required to be taken by them as set forth therein and the Purchaser shall have received all financial statements and other items required to be delivered thereunder in the form and substance provided therein. 8.23 TERMINATION. This Agreement shall not have been terminated in accordance with the terms of this Agreement. 58 ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE SELLERS The obligation of each of the Sellers to consummate the transactions contemplated by this Agreement and the Ancillary Agreements is subject to the fulfillment (or waiver by the Sellers' Representative), prior to or at the Closing, of the following conditions: 9.1 NO LITIGATION; NO OPPOSITION. No Order enjoining or prohibiting the Sellers or the Purchaser or the other parties to the Ancillary Agreements or any of the agreements, documents and instruments contemplated hereby or thereby, from consummating the transactions contemplated hereby or thereby, shall have been entered, and no Claim shall have been initiated or threatened by any Governmental Authority prior to the Closing seeking to restrain or prohibit the execution and delivery of this Agreement or the Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby. 9.2 REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of the Purchaser set forth in this Agreement and in any certificate delivered pursuant to Article IX shall be true and correct in all respects (but without regard to any limitation or qualification as to materiality or Material Adverse Effect (or similar concept) set forth therein) on and as of the date of this Agreement and on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (except for any such representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date), unless the failure or failures of such representations and warranties to be true and correct in all respects have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or a material adverse effect on the ability of the Purchaser to perform its obligations under this Agreement or the Ancillary Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby. 9.3 PERFORMANCE OF OBLIGATIONS. The Purchaser shall have performed and complied in all material respects with all covenants and agreements required by this Agreement and the Ancillary Agreements to be performed or complied with by it at or prior to the Closing Date. 9.4 PURCHASER'S CERTIFICATE. The Purchaser shall have delivered to the Sellers a certificate signed on behalf of the Purchaser by the chief executive officer or chief financial officer of the Purchaser to the effect that each of the conditions specified above in Sections 9.2 and 9.3 are satisfied. 9.5 GOVERNMENTAL APPROVALS. All approvals, consents, exemptions and authorizations of notices to, and filings with any Governmental Authority included in the Company Consents and the Sellers Consents shall have been made, received or taken. 59 9.6 RESTATED OPERATING AGREEMENT. The Restated Operating Agreement shall be in full force and effect upon the Closing. 9.7 COMMITMENT AGREEMENT. The Commitment Agreement shall be in full force and effect, and the Purchaser shall have made, subject to the terms and conditions set forth therein, the investment required to be made by it pursuant thereto at or prior to the Closing. 9.8 SLA PURCHASE AGREEMENT. The purchase and sale of the SLA Interest shall have been consummated in accordance with the terms of the SLA Purchase Agreement. 9.9 OPINION. The Sellers shall have received an opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Purchaser, in the form attached hereto as ANNEX M-1, and an opinion of Sonnenschein Nath & Rosenthal LLP, Illinois counsel to the Purchaser, in the form attached hereto as ANNEX M-2. 9.10 GOOD STANDING. The Sellers shall have received a certificate issued by the Secretary of State of the State of Delaware certifying that the Purchaser is validly existing and in good standing in the State of Delaware as of the most recent practicable date. 9.11 VOTING AGREEMENT. The Voting Agreement, dated as of the date hereof, among Nelson Peltz, Peter W. May and Gregory H. Sachs shall be in full force and effect. 9.12 TERMINATION. This Agreement shall not have been terminated in accordance with the terms of this Agreement. ARTICLE X TERMINATION OF AGREEMENT; RIGHTS TO PROCEED 10.1 TERMINATION. The parties may not terminate this Agreement other than as follows: (a) The Purchaser and the Sellers' Representative may terminate this Agreement by mutual written consent at any time prior to the Closing. (b) The Purchaser may terminate this Agreement by giving written notice to the Sellers at any time prior to the Closing (i) in the event at any time after the date hereof any of the Sellers have breached any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement which would give rise to a failure of the conditions to Closing set forth in Sections 8.2 or 8.3 of this Agreement to be satisfied if the Closing were to be held at such time, the Purchaser has notified the Sellers in writing of such failure, and the breaching party or parties have not effected a remedy to such failure within ten days following the receipt by the Sellers 60 of such notice, (ii) if any of the conditions set forth in Article VIII is not capable of being satisfied prior to the Expiration Date, PROVIDED that the Purchaser is not then in breach of any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement to which it is a party that would give rise to the failure of a condition set forth in Sections 9.2 or 9.3 or (iii) if the Closing shall not have occurred on or before December 31, 2004 (the "EXPIRATION DATE") by reason of the failure of any condition precedent under Article VIII (unless the failure results primarily from the Purchaser itself willfully or intentionally breaching any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement to which it is a party); PROVIDED, that the Expiration Date shall be subject to extension to no later than March 31, 2005 as provided in Section 5.16 of the Disclosure Letter. (c) The Sellers' Representative may terminate this Agreement by giving written notice to the Purchaser at any time prior to the Closing (i) in the event at any time after the date hereof the Purchaser has breached any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement which would give rise to a failure of the conditions to Closing set forth in Sections 9.2 or 9.3 of this Agreement to be satisfied if the Closing were to be held at such time, the Sellers have notified the Purchaser in writing of such failure, and the Purchaser has not effected a remedy to such failure within ten days following the receipt by the Purchaser of such notice, (ii) if any of the conditions set forth in Article IX is not capable of being satisfied prior to the Expiration Date, PROVIDED that none of the Sellers is then in breach of any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement to which it is a party that would give rise to the failure of a condition set forth in Sections 8.2 or 8.3, or (iii) if the Closing shall not have occurred on or before the Expiration Date by reason of the failure of any condition precedent under Article IX (unless the failure results primarily from any of the Sellers themselves willfully or intentionally breaching any representation, warranty, covenant or agreement contained in this Agreement or any Ancillary Agreement to which it is a party). 10.2 EFFECT OF TERMINATION. If any party terminates this Agreement pursuant to Section 10.1 above, all rights and obligations of the parties hereunder shall terminate without any liability of any party to any other party, except that (a) the rights and obligations of the parties under Sections 5.10, 7.2 and 10.2 and Article XIV shall survive such termination, and (b) nothing herein shall relieve any party from liability for any willful or intentional breach hereof occurring prior to termination. The Confidentiality Agreement shall survive the termination of this Agreement as set forth therein. ARTICLE XI SURVIVAL; GENERAL INDEMNIFICATION 11.1 SURVIVAL. Notwithstanding any knowledge of facts determined or determinable by the Purchaser pursuant to any investigation or right of investigation, the Purchaser has the right to rely fully upon the representations, warranties, covenants and agreements of the Sellers and the Guarantor contained in this Agreement. All such 61 representations, warranties, covenants and agreements shall survive the execution and delivery of this Agreement and the Closing. All representations and warranties contained in this Agreement shall terminate and expire on April 30, 2005 (subject to extension to April 30, 2006 as provided in Section 5.16 of the Disclosure Letter); PROVIDED, HOWEVER, that Claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to such date shall not thereafter be barred by the expiration of the relevant representation or warranty to the extent that it relates to such Claims; PROVIDED, FURTHER, that the representations and warranties of the Sellers and the Guarantor, as applicable, contained in (a) Sections 3.1, 3.2, 3.6, 3.7 (other than the last sentence thereof), 4.1, 4.2 and 12.2(a) shall survive without limitation, and (b) Section 3.12 shall terminate and expire on the date which is 90 days after the date upon which the liability to which any claim based upon, arising out of or otherwise in respect of any inaccuracy or breach of any such representation or warranty may relate is barred by all applicable statutes of limitations (including all periods of extension, whether automatic or permissive). Except as otherwise expressly provided in this Agreement, the covenants and agreements contained in this Agreement shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 11.2 OBLIGATION OF THE SELLERS TO INDEMNIFY. (a) Subject to the limitations contained in this Article XI, each Seller, severally but not jointly, agrees to indemnify, defend and hold harmless the Purchaser and its directors, officers, employees, stockholders, Affiliates (other than the Company or its Subsidiaries), successors and assigns (collectively, the "INDEMNIFIED PURCHASER PARTIES") from and against the greater (but not both) of (x) any and all Losses suffered or incurred by any of them or (y) 63.60% of any and all Losses suffered or incurred by the Company or any of its Subsidiaries, in each case, based upon, arising from or relating to: (i) any breach of any representation or warranty made by the Sellers in Article III or any representation or warranty concerning the Company or any of its Subsidiaries made by the Sellers in any certificate delivered by or on behalf of one or more of the Sellers pursuant to Sections 8.4, 8.5, 8.13 (other than any such certificate delivered in connection with any Ancillary Agreement), 8.18 or 8.21, as of the date such representation or warranty was made or as if such representation or warranty were made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date); (ii) any breach of any representation or warranty made by such Seller in Article IV or any representation or warranty concerning such Seller in any certificate delivered by or on behalf of such Seller pursuant to Sections 8.4, 8.5, 8.13 (other than any such certificate delivered in connection with any Ancillary Agreement), 8.18 or 8.21, as of the date such representation and warranty was made or as if such representation and warranty were made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date); 62 (iii) in the case of SCM, any breach of any representation or warranty made by the Guarantor in Article XII or any representation or warranty concerning the Guarantor in any certificate delivered by or on behalf of SCM pursuant to Sections 8.4, 8.5, 8.13 (other than any such certificate delivered in connection with any Ancillary Agreement), 8.18 or 8.21, as of the date such representation and warranty was made or as if such representation and warranty were made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date); (iv) any breach of any covenant or agreement of such Seller contained in this Agreement; (v) any liability or obligation based upon, arising from or related to the Settlement Agreement, dated as of January 23, 2003, by and among the Company, Deutsche Investment Management Americas Inc. (f/k/a Scudder Kemper Investments and Zurich Kemper Investments), Farhan Sharaff, Edmond Villani, DCM, Roberts and Trutter; (vi) any liability or obligation of the Company or any of its Subsidiaries in excess of $5 million in respect of, or arising out of, that certain promissory note, dated December 28, 2001 issued by DCM to Imagine Insurance Company Limited in connection with the Castle Harbor CDO, except to the extent that any such liability or obligation results from an election by DCM after the Closing Date to increase the principal amount outstanding under such promissory note; and (vii) enforcing the indemnification provided for under this Agreement, but only if a court of competent jurisdiction determines in a final, non-appealable judgment that such Indemnified Purchaser Party is entitled to indemnification under Sections 11.2(a)(i), (ii), (iii), (iv), (v) or (vi), as applicable. (b) Indemnification payments made by the Sellers under Sections 11.2(a)(i), (v), (vi) or (vii) (to the extent relating in the case of clause (vii) to indemnification under Sections 11.2(a)(i), (v) or (vi)) shall be made by each Seller pro rata in accordance with his or its Indemnification Percentage. Indemnification payments made by a Seller under Section 11.2(a)(ii) (for Losses based upon, arising from or relating to the breach by such Seller of a representation and warranty made by such Seller), Section 11.2(a)(iii) (for Losses based upon, arising from or relating to the breach by the Guarantor of a representation or warranty made by the Guarantor), Section 11.2(a)(iv) (for Losses based upon, arising from or relating to the breach by such Seller of a covenant or agreement of such Seller) or Section 11.2(a)(vii) (to the extent relating in the case of clause (vii) to indemnification under Section 11.2(a)(ii) (for Losses based upon, arising from or relating to the breach by such Seller of a representation and warranty made by such Seller), Section 11.2(a)(iii) (for Losses based upon, arising from or relating to the breach by the Guarantor of a representation or warranty made by the Guarantor) or Section 11.2(a)(iv) (for Losses based upon, arising from or relating to the 63 breach by such Seller of a covenant or agreement of such Seller)) shall be made by such Seller. 11.3 LIMITATIONS ON INDEMNIFICATION BY THE SELLERS. The indemnification provided for in Section 11.2 shall be subject to the following limitations: (a) The Sellers shall not be obligated to pay any amounts for indemnification under Sections 11.2(a)(i), (ii) or (iii), except those based upon, arising from or otherwise relating to Sections 3.1, 3.2, 3.6, 3.7 (other than the last sentence thereof), 3.12, 4.1, 4.2 and 12.2(a) (the "SELLER BASKET EXCLUSIONS"), or under Section 11.2(a)(vi) until the aggregate amounts for indemnification under such Sections, exclusive of those based on the Seller Basket Exclusions, equals $4,000,000 (the "BASKET AMOUNT"), after the occurrence of which the Sellers shall be obligated to pay in full all such amounts for such indemnification in excess of the Basket Amount. (b) The Sellers shall be obligated to pay any amounts for indemnification based on the Seller Basket Exclusions (in accordance with their liability as set forth in Section 11.2) without regard to the individual or aggregate amounts thereof and without regard to whether all other indemnification payments shall have exceeded, in the aggregate, the Basket Amount. (c) The maximum amount of indemnification payments under Sections 11.2(a)(i), (ii), (iii), (vi) and (vii) (in the case of clause (vii), to the extent relating to indemnification under Sections 11.2(a)(i), (ii), (iii) or (vi)) to which the Indemnified Purchaser Parties shall be entitled to receive indemnification (excluding indemnification in connection with any of the Seller Basket Exclusions), shall not exceed, with respect to each Seller (other than SCM), an amount equal to 30% of the portion of the Purchase Price actually received by such Seller and, with respect to SCM, an amount equal to 30% of the portion of the Purchase Price actually received by SCM minus $2,000,000. (d) The maximum amount of indemnification payments under Section 11.2 to which the Indemnified Purchaser Parties shall be entitled to receive indemnification (including indemnification in connection with any of the Seller Basket Exclusions) shall not exceed, with respect to each Seller (other than SCM), an amount equal to 100% of the portion of the Purchase Price actually received by such Seller and, with respect to SCM, an amount equal to 100% of the portion of the Purchase Price actually received by SCM minus $2,000,000. (e) For purposes of determining the amount of any Loss under Section 11.2 and this Section 11.3 (but not for purposes of determining whether a breach has occurred, which in each case shall include such limitations and qualifications), each representation and warranty of any Seller or the Guarantor referred to therein shall be considered without regard to any limitation or qualification as to materiality or Material Adverse Effect (or similar concept) set forth in such representation or warranty. For purposes of determining whether a breach of the Sellers' representations and warranties 64 contained in Section 3.19 has occurred, such representations and warranties shall be read without regard to any limitation or qualification as to materiality set forth therein. (f) Indemnification of an Indemnified Purchaser Party by the Sellers shall be limited to the amount of any Loss that remains after deducting therefrom (and the cumulative amount of all Losses for purposes of determining the Basket Amount shall be reduced by the amount of) any insurance proceeds or any indemnity, contribution or other similar payment recovered (net of out-of-pocket costs incurred in connection with such recovery) by an Indemnified Purchaser Party or the Company or any of its Subsidiaries from any third party with respect thereto, and each such Indemnified Purchaser Party shall use its commercially reasonable efforts to seek any such recovery, it being understood that nothing in this Agreement or the Ancillary Agreements shall be construed to require any Indemnified Purchaser Party to first seek any such recovery with respect to such Losses prior to seeking indemnification hereunder; PROVIDED, that if such Indemnified Purchaser Party or the Company or any of its Subsidiaries obtains any such recovery in respect of any Loss after such Indemnified Purchaser Party has received an indemnification payment in respect of such Loss from any of the Sellers, such Indemnified Purchaser Party shall promptly pay to the applicable Sellers an amount equal to the amount so recovered (net of out-of-pocket costs incurred in connection with such recovery or incurred by such Indemnified Purchaser Party) not to exceed the amount of the indemnification payment so received. (g) None of the Indemnified Purchaser Parties shall be entitled to recover any Losses relating to any matter arising under one provision of this Agreement to the extent that such Indemnified Purchaser Party has already recovered the full amount of such Indemnified Purchaser's Losses with respect to such matter pursuant to other provisions of this Agreement. In no event shall any Indemnified Purchaser Party be entitled to be indemnified for or make a claim against any Seller for lost profits or other consequential, incidental, special or punitive damages resulting hereunder (other than such damages payable to a Governmental Authority or other Person in respect of a third party claim as to which such damages were assessed). 11.4 OBLIGATION OF THE PURCHASER TO INDEMNIFY. Subject to the limitations contained in this Article XI, the Purchaser agrees to indemnify, defend and hold harmless the Sellers and their respective directors, officers, employees, shareholders, Affiliates (other than, to the extent applicable, the Company or any of its Subsidiaries), successors and assigns (collectively, the "INDEMNIFIED SELLER PARTIES") from and against all Losses based upon, arising from or relating to: (a) any breach of any representation, warranty, covenant or agreement of the Purchaser contained in this Agreement or in any certificate delivered by the Purchaser pursuant to Article IX, as of the date such representation or warranty was made or as if such representation or warranty were made on and as of the Closing Date (except for representations and warranties that expressly relate to a specified date, the breach of which will be determined with reference to such specified date); 65 (b) any breach of any covenant or agreement of the Purchaser contained in this Agreement; or (c) enforcing the indemnification provided for in this Section 11.4, but only if a court of competent jurisdiction determines in a final, non-appealable judgment that such Indemnified Seller Party is entitled to indemnification under Sections 11.4(a), (b) or (c), as applicable. 11.5 LIMITATIONS ON INDEMNIFICATION BY THE PURCHASER. The indemnification provided for in Section 11.4 shall be subject to the following limitations: (a) For purposes of determining the amount of any Loss under Section 11.4(a) and this Section 11.5 (but not for purposes of determining whether a breach has occurred), each representation and warranty of the Purchaser referred to therein shall be considered without regard to any limitation or qualification as to materiality or Material Adverse Effect (or similar concept) set forth in such representation or warranty. (b) Indemnification of an Indemnified Seller Party by the Purchaser shall be limited to the amount of any Loss that remains after deducting therefrom any insurance proceeds or any indemnity, contribution or other similar payment recovered (net of out-of-pocket costs incurred in connection with such recovery) by an Indemnified Seller Party from any third party with respect thereto, and each such Indemnified Seller Party shall use its commercially reasonable efforts to seek any such recovery, it being understood that nothing in this Agreement or the Ancillary Agreements shall be construed to require any Indemnified Seller Party to first seek any such recovery with respect to such Losses prior to seeking indemnification hereunder; PROVIDED, that if such Indemnified Seller Party obtains any such recovery in respect of any Loss after receiving an indemnification payment in respect of such Loss from the Purchaser, such Indemnified Seller Party shall promptly pay to the Purchaser an amount equal to the amount so recovered (net of out-of-pocket costs incurred in connection with such recovery) not to exceed the amount of the indemnification payment so received. (c) None of the Indemnified Seller Parties shall be entitled to recover any Losses relating to any matter arising under one provision of this Agreement to the extent that such Indemnified Seller Party has already recovered the full amount of such Indemnified Seller Party's Losses with respect to such matter pursuant to other provisions of this Agreement. In no event shall any Indemnified Seller Party be entitled to be indemnified for or make a claim against the Purchaser for lost profits or other consequential, incidental, special or punitive damages resulting hereunder (other than such damages payable to a Governmental Authority or other Person in respect of a third party claim as to which such damages were assessed). 11.6 PROCEDURE FOR INDEMNIFICATION. The party making a claim under this Article XI is referred to as the "INDEMNIFIED PARTY," and the party against whom such claims are asserted under this Article XI is referred to as the "INDEMNIFYING PARTY." All 66 claims by any Indemnified Party under this Article XI shall be asserted and resolved as follows: (a) NOTICE OF ASSERTED LIABILITY. Promptly after receipt by the Indemnified Party of notice of the commencement of any action or proceeding, the assertion of any claim by a third party, the imposition of any penalty or assessment or a claim not involving a third party for which the Indemnified Party seeks to be indemnified that may result in a Loss (each, an "ASSERTED LIABILITY"), the Indemnified Party shall give written notice of such Asserted Liability (the "CLAIMS NOTICE") to the Indemnifying Party. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure or actually incurs an incremental out-of-pocket expense by reason of such failure. The Claims Notice shall describe the Asserted Liability in reasonable detail, including (i) the representation and warranty or covenant or agreement that is alleged to have been inaccurate or to have been breached, (ii) the basis for such allegation, including the provision of supporting documentation and (iii) if known, the aggregate amount of the Losses for which a claim is being made under this Article XI or, to the extent that such Losses are not known or have not been incurred at the time such claim is made, an estimate, to be prepared in good faith and accompanied by supporting documentation, of the aggregate potential amount of such Losses. Notwithstanding the foregoing, the Purchaser shall not be required to give a Claims Notice for an Asserted Liability that relates to a claim or demand from a third party commenced prior to the Closing Date. (b) NON-THIRD PARTY CLAIMS. If the Claims Notice from the Indemnified Party pertains to an Asserted Liability other than a claim or demand from a third party, then the Indemnifying Party shall have thirty (30) days following receipt of the Claims Notice to make such investigation at the expense of the Indemnifying Party of the Asserted Liability as the Indemnifying Party deems necessary or desirable. For the purposes of such investigation, the Indemnified Party agrees to make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Asserted Liability. If the Indemnified Party and the Indemnifying Party agree at or prior to the expiration of said thirty (30) day period (or any mutually agreed upon extension thereof) on the validity and amount of such Asserted Liability, the Indemnifying Party shall promptly pay to the Indemnified Party the full amount of the claim by wire transfer of immediately available funds to an account designated by the Indemnified Party. If the Indemnified Party and the Indemnifying Party do not agree at or prior to the expiration of said thirty (30) day period (as such period may be extended by mutual agreement) on the validity and amount of such Asserted Liability, then each of the Indemnified Party and the Indemnifying Party may pursue the remedies available under this Agreement. (c) OPPORTUNITY TO DEFEND THIRD PARTY CLAIMS. (i) If the Claims Notice pertains to an Asserted Liability that relates to a claim or demand from a third party or if the Asserted Liability relates to a claim or demand from a third party for which the Purchaser is not required to 67 give a Claims Notice under Section 11.6(a), the Indemnifying Party may elect to compromise or defend, at its own expense and by its own counsel, such Asserted Liability; PROVIDED, that the Indemnifying Party shall not have the right to defend or direct the defense of any such Asserted Liability that is asserted directly or indirectly by or on behalf of a Person that is a former, current or prospective Client (or an investor therein). (ii) If the Indemnifying Party elects to compromise or defend such Asserted Liability, it shall promptly notify the Indemnified Party and any other Indemnifying Parties in writing of its intent to do so, and the Indemnified Party, at the expense of the applicable Indemnifying Party or Indemnifying Parties, shall cooperate in the compromise of, or defense against, such Asserted Liability. (iii) If the Indemnifying Party elects not to compromise or defend such Asserted Liability, fails to promptly notify the Indemnified Party in writing of its election as provided in this Agreement, or otherwise abandons the defense of such Asserted Liability, the Indemnified Party may pay, compromise or defend such Asserted Liability and seek indemnification for any and all Losses based upon, arising from or relating to such Asserted Liability. Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnified Party shall settle or compromise any Asserted Liability without the prior written consent of the other (which consent shall not be unreasonably withheld, conditioned or delayed); (iv) The Indemnified Party shall have the right to participate in the defense of any Asserted Liability with counsel selected by it subject to the Indemnifying Party's right to control the defense. The fees and disbursements of such counsel shall be at the expense of the Indemnified Party; PROVIDED, that if in the reasonable opinion of counsel to the Indemnified Party, (I) there are legal defenses available to an Indemnified Party that are different from or additional to those available to the Indemnifying Party or (II) there exists a conflict of interest between the Indemnifying Party and the Indemnified Party, the Indemnifying Party shall be liable for the reasonable legal fees and expenses of one separate counsel to all of the applicable Indemnified Parties (in addition to one local counsel in each jurisdiction that may be necessary or appropriate; PROVIDED, that the Indemnified Parties shall use commercially reasonable efforts (to the extent the Indemnified Parties reasonably believe it appropriate to do so) to retain a nationally recognized national law firm with offices in the required jurisdictions instead of retaining local counsel and to minimize the need for local counsel by retaining such national law firm. If the Indemnifying Party chooses to defend any Asserted Liability, the Indemnified Party shall make available to the Indemnifying Party any personnel, books, records or other documents within its control that are necessary or appropriate for such defense. (v) The rights of the Sellers under this Section 11.6(c) with respect to any Asserted Liability for which all of the Sellers are Indemnifying Parties may be exercised solely by the Sellers' Representative, and, if the Sellers' Representative elects to defend such Asserted Liability, the Sellers' Representative shall have sole and exclusive control over such defense as between the other Sellers. 68 11.7 SOLE AND EXCLUSIVE REMEDY. Except as otherwise provided in Section 14.11, from and after the Closing, the remedies provided in this Article XI shall be the sole recourse of all parties hereto for all Losses based upon, arising from or relating to any breach of any representation, warranty or covenant contained in this Agreement or in any certificate delivered pursuant to Articles VIII or IX. Nothing in this Section 11.7 shall limit any Person's right to seek and obtain any equitable relief to which any Person shall be entitled or to seek any remedy on account of any Person's fraud. 11.8 TREATMENT OF INDEMNIFICATION PAYMENTS. It is the intention of the parties to treat any indemnification payment made under this Agreement as an adjustment to the Purchase Price for all Tax purposes, and the parties agree, and Sellers agree to cause Company and its Subsidiaries, to file their Tax Returns in a manner consistent with this treatment and take no position contrary thereto unless otherwise required by a change in applicable Tax laws or a good faith resolution of a contest. 11.9 RIGHT OF OFF-SET/SET-OFF. The Purchaser and each of the Sellers shall have the right to off-set or set-off (x) any payment due to such party by another party pursuant to a judgment or award entered by a court of competent jurisdiction, arbitrator or other tribunal with respect to an Asserted Liability under this Article XI, or with respect to any indemnification payment owed under Article XI in respect of any Asserted Liability that such other party has notified such party that it does not intend to contest, against (y) any other payment to be made to such other party pursuant to this Agreement or the Restated Operating Agreement (a "SET-OFF PAYMENT"); PROVIDED, HOWEVER, that in the case of a judgment or award that is not final and is subject to appeal and such other party has indicated in writing to such party that it intends to pursue an appeal (a "PRELIMINARY JUDGMENT"), such Set-off Payment shall be deposited into an account designated by an escrow agent to be mutually agreed upon by the Purchaser and the Sellers' Representative (each acting reasonably) and on customary terms and conditions mutually acceptable to the Purchaser and the Sellers' Representative (each acting reasonably). Upon entry of a final, non-appealable judgment or award by a court of competent jurisdiction, arbitrator or other tribunal with respect to such Preliminary Judgment (a "FINAL JUDGMENT"), any Set-off Payment deposited into such an account shall be either paid to the party who deposited it or to the party to whom it was to be made in accordance with such Final Judgment. ARTICLE XII GUARANTY OF SCM AND DPF OBLIGATIONS 12.1 GUARANTY OF SCM AND DPF OBLIGATIONS. (a) Sachs (in such capacity, the "GUARANTOR") hereby unconditionally and irrevocably guarantees, as a primary obligor and not merely as a surety, the due and punctual performance of all covenants, agreements, obligations and liabilities of its Affiliated Members contained in this Agreement, including all monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, indirect, contingent, fixed or otherwise, of its Affiliated Members (collectively, 69 the "OBLIGATIONS"). The Guarantor further agrees that the Obligations of its Affiliated Members may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation of its Affiliated Members. (b) The guaranty pursuant to this Section 12.1 is a guaranty of payment, and not of collection, (i) is absolute and unconditional and shall not be impaired, discharged or terminated by any amendment to this Agreement to which either Affiliated Member of the Guarantor is a party (except to the extent such amendment reduces or eliminates the Obligations of such Affiliated Member) or any other act or omission by the Affiliated Members that may, in accordance with applicable Requirements of Law, affect the enforceability of a guaranty, and (ii) shall not be affected by the bankruptcy, insolvency or inability to pay of such Affiliated Member or of any other party. (c) The Guarantor in its capacity as a guarantor of the obligations of its Affiliated Members set forth in this Section 12.1, hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Purchaser exhaust any right, power or remedy or proceed against either Affiliated Member of the Guarantor or against any other Person under any other guarantee of, or security for, any of such Affiliated Member's obligations guaranteed hereby. The Guarantor also acknowledges and agrees that its obligations under this Agreement shall not be affected by any rescission, waiver or modification of, or any release from any of the terms or provisions of this Agreement, the Ancillary Agreements to which either Affiliated Member is a party or any other agreement, including with respect to any other guarantor of the Obligations of such Affiliated Member (except to the extent the Obligations of such Affiliated Member are reduced, waived or eliminated thereby). (d) If the Guarantor makes a payment or performs an action under the guarantee contained in this Section 12.1 in satisfaction of any Obligation of either Affiliated Member, such satisfaction shall be deemed to be a satisfaction of such Obligation by such Affiliated Member for purposes of this Agreement. (e) The obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than, with respect to either of its Affiliated Members, the satisfaction in full of each of the Obligations of such Affiliated Member), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations of such Affiliated Member, except to the extent the Obligations of such Affiliated Member are reduced, waived or eliminated by means of any of the foregoing. Without limiting the generality of the foregoing, the obligations of the Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of any Person to assert any claim or demand or to enforce any remedy under this Agreement or any other agreement, by any default, failure or delay, willful or otherwise, in the performance of the Obligations of either Affiliated Member, or by any other act or omission that may or might in any manner or to any extent vary the risk of the Guarantor or that would otherwise operate as a discharge of the 70 Guarantor as a matter of law or equity (other than, with respect to either of its Affiliated Members, the satisfaction in full of each of the Obligations of such Affiliated Member) (except to the extent the Obligations of such Affiliated Member are reduced, waived or eliminated thereby). (f) The Guarantor assumes all responsibility for being and keeping itself informed of its Affiliated Members' financial condition and assets, and of all other circumstances bearing upon the risk of non-payment or non-performance of the Obligations of its Affiliated Members and the nature, scope and extent of the risks that the Guarantor assumes and incurs hereunder, and agrees that no other Person will have any duty to advise the Guarantor of information known to it or any of them regarding such circumstances or risks. (g) Notwithstanding anything to the contrary contained in this Section 12.1, the Guarantor's liability under this Article XII shall not exceed (i) the liability of its Affiliated Members under Article XI plus (ii) the reasonable costs and expenses of enforcing or collecting the applicable guaranty. 12.2 REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR. As a material inducement to the Purchaser to enter into this Agreement and the Ancillary Agreements to which it is a party and consummate the transactions contemplated hereby and thereby, the Guarantor hereby makes to the Purchaser, the following representations and warranties: (a) AUTHORITY OF THE GUARANTOR. The Guarantor has full right, authority, power and legal capacity to enter into this Agreement and to carry out the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Guarantor. This Agreement, assuming due and valid authorization, execution and delivery thereof by the other parties thereto, constitutes a valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, except as (i) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. The execution, delivery and performance of this Agreement by the Guarantor and the consummation of the transactions contemplated hereby and thereby: (A) do not materially violate, result in any material breach or material default of (and with due notice or lapse of time or both would not result in any material breach or material default of), accelerate any material obligation or impose any additional material obligation under, give rise to a right of termination of or result in the creation of any material Lien under, any material Contractual Obligation to which the Guarantor is a party or by which any of its assets are bound; and (B) do not violate in any material respect any Requirement of Law or Order of any Governmental Authority applicable to the Guarantor or by which his assets are bound. 71 (b) GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No material approval, consent, exemption or authorization by, notice to or filing with, any Governmental Authority or any other Person is necessary or required to be made or obtained by the Guarantor in connection with the execution, delivery or performance of this Agreement or the transactions contemplated hereby. (c) LITIGATION. There are no Claims pending or, to the Knowledge of the Guarantor, threatened against the Guarantor, at law or in equity, in arbitration or before any Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement by the Guarantor or the consummation by the Guarantor of the transactions contemplated hereby. ARTICLE XIII DEFINITIONS 13.1 DEFINITIONS. For purposes of this Agreement and the Disclosure Letter, the following terms shall have the respective meanings set forth in this Section 13.1: "ADVISERS ACT" shall mean the Investment Advisers Act of 1940, and the rules and regulations promulgated under such Act, as the same may be amended from time to time, and any successor to such Act. "ADVISORY CONTRACT" shall mean any investment management, advisory or sub-advisory contract, or any other written contract, agreement, arrangement or understanding (whether written or oral), pursuant to which each of the Company or its Subsidiaries provides Investment Management Services as of any date of determination. "AFFILIATE" shall mean any Person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. "AFFILIATE FUNDS" shall mean each Hedge Fund that is not an Independent Fund. "AFFILIATED MEMBER" shall mean, in the case of the Guarantor, SCM and DPF. "AGREEMENT" shall have the meaning specified in the preamble. "ALTERNATIVE TRANSACTION" shall mean, whether in a single or multi-step transaction or a series of related transactions, (i) any direct or indirect acquisition or purchase of a material portion of the membership interests of, or other equity interests in, the Company or any of its subsidiaries, (ii) any joint venture involving the Company or any of its Subsidiaries or sale or transfer of a material portion of the assets of the Company or any of its subsidiaries (in each case other than in the ordinary course of 72 business consistent with past practice), or (iii) any merger, consolidation or recapitalization involving the Company or any of its Subsidiaries. "ANCILLARY AGREEMENTS" shall mean the Restated Operating Agreement, each of the Employment Agreements, the Sumitomo Letter, the Commitment Agreement, the Corporate Services Agreement and the SLA Purchase Agreement. "ANNEX ASSET" shall have the meaning specified in Section 1.6. "ASSERTED LIABILITY" shall have the meaning specified in Section 11.6(a). "ASSETS" shall have the meaning specified in Section 3.18. "ASSUMED INDEBTEDNESS AMOUNT" shall have the meaning specified in Section 1.2(a). "AUDITED FINANCIAL STATEMENTS" shall have the meaning specified in Section 3.11. "BALANCE SHEET DATE" shall have the meaning specified in Section 3.11. "BASE DATE" shall have the meaning specified in Section 3.9(a). "BASE DATE AUM" shall have the meaning specified in Section 3.9(a). "BASKET AMOUNT" shall have the meaning specified in Section 11.3(a). "BENEFIT PLAN" shall have the meaning specified in Section 3.25(a). "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by law or executive order to close. "CASH" shall mean, as of any date of determination, the excess of (a) the aggregate amount of unrestricted cash held as of 5:00 p.m. (New York City time) in the bank accounts, including money market accounts, of the Company and its Subsidiaries, and any checks deposited to or wire transfers initiated to such accounts as of 5:00 p.m. (New York City time) (to the extent actually received prior to the date of the Closing Statement) MINUS (b) the sum of (i) the aggregate balance of all outstanding checks written against, withdrawals from and other debits to, such accounts as of 5:00 p.m. (New York City time) and (ii) the amount (if any) by which any such account is overdrawn as of 5:00 p.m. (New York City time). For the avoidance of doubt, the amount of any cash pledged as collateral against any standby letter of credit issued in connection with any Real Property Lease shall not be deemed to be "unrestricted cash", notwithstanding any characterization to the contrary in the Financial Statements or the Closing Statement. 73 "CDO" shall mean each of the issuers of collateralized debt obligations to which the Company or its Subsidiaries provides Investment Management Services, including those CDOs listed on Section 3.9(a) of the Disclosure Letter. "CDO CONSENT PARTIES" shall have the meaning specified in Section 5.1(a). "CDO DOCUMENTS" shall mean each offering memorandum, indenture, supplemental indenture, trust agreement, insurance agreement, swap agreement and collateral administration agreement entered into or used in connection with a CDO. "CFTC" shall mean the Commodity Futures Trading Commission. "CLAIMS" shall have the meaning specified in Section 3.4. "CLAIMS NOTICE" shall have the meaning specified in Section 11.6(a). "CLASS A INTERESTS" shall have the meaning specified in the recitals. "CLASS B INTERESTS" shall have the meaning specified in the recitals. "CLIENT" shall mean any Person to whom the Company or any of its Subsidiaries provides Investment Management Services, including any Hedge Fund, CDO or managed account. "CLIENT CONSENTS" shall have the meaning specified in Section 3.3. "CLOSING" shall have the meaning specified in Section 1.3. "CLOSING CASH AMOUNT" shall have the meaning specified in Section 1.5(a). "CLOSING DATE" shall have the meaning specified in Section 1.3. "CLOSING STATEMENT" shall have the meaning specified in Section 1.5(a). "COBRA" shall have the meaning specified in Section 3.25(d). "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor code thereto. For purposes of this Agreement, all references to the Sections of the Code shall include any predecessor provisions to such Sections. "CODE OF ETHICS" shall have the meaning specified in Section 3.30. "COMMITMENT AGREEMENT" shall have the meaning specified in the recitals. 74 "COMMODITY EXCHANGE ACT" shall mean Title 7, Section 1 Et Seq. of the United States Code as the same may be amended, modified, succeeded or replaced, from time to time. "COMPANY" shall have the meaning specified in the recitals. "COMPANY CONSENTS" shall have the meaning specified in Section 3.3. "COMPANY EMPLOYEES" shall have the meaning specified in Section 7.4. "COMPANY INTELLECTUAL PROPERTY" shall have the meaning specified in Section 3.17(a). "COMPLIANCE POLICIES AND PROCEDURES" shall have the meaning specified in Section 5.11. "CONFIDENTIALITY AGREEMENT" shall have the meaning specified in Section 7.2. "CONSENT" shall have the meaning specified in Section 8.5(a). "CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, in each case, whether written or oral, to which such Person is a party or by which it or any of its property is bound. "COPYRIGHTS" shall mean, as they exist anywhere in the world, copyrights and mask works, including all renewals and extensions thereof, copyright registrations and applications for registration thereof, and non-registered copyrights. "CORPORATE SERVICES AGREEMENT" shall mean the Corporate Services Agreement, dated as of the date hereof, by and between the Purchaser and the Company, in the form attached hereto as ANNEX N, as amended, supplemented or otherwise modified from time to time. "CUSTOMER INFORMATION" shall have the meaning specified in Section 3.17(k). "DCM" shall have the meaning specified in the recitals. "DISCLOSURE LETTER" shall have the meaning specified in Article III. "DPF" shall have the meaning specified in the preamble. "EMPLOYMENT AGREEMENTS" shall have the meaning specified in the recitals. 75 "ENVIRONMENTAL LAWS" shall mean federal, state, local and foreign laws, principles of common laws, civil laws, regulations and codes, as well as orders, decrees, judgments or injunctions, issued, promulgated, approved or entered thereunder relating to pollution, protection of the environment or public health and safety. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor to such Act. "ERISA CLIENT" shall have the meaning specified in Section 3.9(d). "ESTIMATED PURCHASE PRICE" shall have the meaning specified in Section 1.2(b). "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, and the rules and regulations promulgated under such Act, as amended from time to time, and any successor to such Act. "EXCLUDED INDEBTEDNESS" shall have the meaning specified in Section 1.2(a). "EXISTING OPERATING AGREEMENT" shall mean the Company's Third Amended and Restated Operating Agreement, dated as of October 12, 1999, as amended through and including the Sixth Amendment, dated as of May 1, 2003. "EXPIRATION DATE" shall have the meaning specified in Section 10.1(b). "FEBRUARY 28 CASH AMOUNT" shall have the meaning specified in Section 1.5(a). "FINAL JUDGMENT" shall have the meaning specified in Section 11.9. "FINANCIAL STATEMENTS" shall have the meaning specified in Section 3.11. "FIRST CHOICE FIRM" shall have the meaning specified in Section 1.5(b). "FOLLOW-UP CDO CONSENT REQUEST LETTER" shall have the meaning specified in Section 5.1(a). "FOLLOW-UP CLIENT CONSENT REQUEST LETTER" shall have the meaning specified in Section 5.1(a). "FOLLOW-UP HEDGE FUND CONSENT REQUEST" shall have the meaning specified in Section 5.1(a). "FORM ADV" shall mean a uniform application for investment adviser registration under Form ADV to register as an investment adviser under the Advisers Act. 76 "GAAP" shall mean United States generally accepted accounting principles as in effect from time to time. "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or other political subdivision thereof, any authority or agency exercising executive, legislative, judicial, regulatory or administrative functions of government, including applicable self-regulatory organizations (including the CFTC, NYSE and NASD) and the SEC. "GUARANTOR" shall have the meaning specified in Section 12.1(a). "HEDGE FUND DOCUMENTS" shall mean each offering memorandum, organizational document, and side letters with investors entered into or used in connection with a Hedge Fund. "HEDGE FUND RESOLUTIONS" shall have the meaning specified in Section 5.1(a). "HEDGE FUNDS" shall mean each of the hedge funds to which the Company or its Subsidiaries provides Investment Management Services, including those listed on Section 3.9(a) of the Disclosure Letter. "IMMEDIATE FAMILY" shall mean, with respect to any natural person, (a) such person's spouse, parents, grandparents, children, grandchildren and siblings, (b) such person's former spouse(s) and current spouses of such person's children, grandchildren and siblings and (c) estates, trusts, partnerships and other entities of which substantially all of the interest is held directly or indirectly by the foregoing. "INDEBTEDNESS" shall mean as to any Person, without duplication (a) all obligations of such Person for borrowed money, including trading liabilities in respect of any CDO, and (b) all guarantees of such Person in respect of any obligations of any other Person for borrowed money; for the avoidance of doubt, an obligation of a Person which is accounted for as a guarantee in accordance with GAAP shall only be deemed "Indebtedness" if it is in respect of any obligations of any other Person for borrowed money. "INDEMNIFICATION PERCENTAGE" as to each Seller, shall mean the percentage obtained by dividing (x) the portion of the Purchase Price actually received by such Seller by (y) the aggregate Purchase Price actually received by all of the Sellers. "INDEMNIFIED PARTY" shall have the meaning specified in Section 11.6. "INDEMNIFIED PURCHASER PARTIES" shall have the meaning specified in Section 11.2(a). "INDEMNIFIED SELLER PARTIES" shall have the meaning specified in Section 11.4. 77 "INDEMNIFYING PARTY" shall have the meaning specified in Section 11.6. "INDEPENDENT FUNDS" shall mean each CDO and SPhinX. "INITIAL CDO CONSENT REQUEST LETTER" shall have the meaning specified in Section 5.1. "INITIAL CLIENT CONSENT REQUEST LETTER" shall have the meaning specified in Section 5.1(a). "INITIAL HEDGE FUND CONSENT REQUEST" shall have the meaning specified in Section 5.1(a). "INTELLECTUAL PROPERTY" shall mean all Copyrights, Internet Assets, Patents, Software, Trade Secrets, Trademarks and IP Licenses. "INTERNET ASSETS" shall mean, as they exist anywhere in the world, domain names, Internet addresses and other computer identifiers, web sites, web pages and similar rights and items. "INVESTMENT" shall mean any direct or indirect advance, loan or other extension of credit to, any capital contribution to (by means of any transfer of cash or other property or any payment for property or services for the account or use of), or any purchase or acquisition of capital stock, equity or profits interests, bonds, notes, debentures or similar instruments issued by, any Person. "INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940, and the rules and regulations promulgated under such Act, as the same may be amended from time to time, and any successor to such Act. "INVESTMENT MANAGEMENT SERVICES" shall mean any services (including sub-advisory services) which involve (a) the management of an investment account or fund (or portions thereof or a group of investment accounts or funds) for compensation, including a CDO or Hedge Fund, (b) the giving of advice with respect to the investment and/or reinvestment of assets or funds (or any group of assets or funds) for compensation or (c) otherwise acting as an "investment adviser" within the meaning of the Advisers Act, and performing activities related or incidental thereto. "IP LICENSES" shall mean all licenses, sublicenses, distributor agreements or permissions, including the right to receive royalties or any other consideration relating to Copyrights, Internet Assets, Patents, Software, Trade Secrets and Trademarks. "IRS" shall mean the Internal Revenue Service. "JULY 16 CASH AMOUNT" shall have the meaning specified in Section 1.5(a). "KEEP PLAN" shall have the meaning set forth in Section 3.25(j). 78 "KNOWLEDGE" shall mean, with respect to any Person other than the Sellers, the actual (and not constructive or imputed) knowledge of such Person and, with respect to any of the Sellers, the actual (and not constructive or imputed) knowledge of such Seller and any of the individuals listed in Section 13.1 of the Disclosure Letter. "LEAP" shall have the meaning specified in the recitals. "LIABILITIES" shall have the meaning specified in Section 3.19. "LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or other security interest of any kind or nature whatsoever. "LOSSES" shall mean any and all losses, liabilities, judgments, damages, deficiencies, awards, fines, penalties, Taxes, diminutions in value, expenses, fees, costs, or amounts paid in settlement (including interest and reasonable costs or expenses (including reasonable attorneys' fees and costs)), arising out of any incident, event, circumstance or proceeding asserted or initiated or otherwise occurring or existing in respect of any matter. "MATERIAL ADVERSE CHANGE" shall mean a material adverse change in the condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of the Company and its Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that the effects of changes that are generally applicable to (a) the industries and markets in which the Company and its Subsidiaries operate, (b) the United States or global economy or (c) the commencement or escalation of a war, terrorist attack or armed hostilities or other national or international calamity directly or indirectly involving the United States that would reasonably be expected to have a material adverse effect on the United States financial markets, shall be excluded from any determination as to the occurrence of a Material Adverse Change; and PROVIDED, FURTHER, that any adverse change on the Company or any of its Subsidiaries resulting from (A) the execution of this Agreement and the announcement of this Agreement or the transactions contemplated by this Agreement, including the announcement made on April 19, 2004, (B) the failure of Triarc Deerfield Investment Corporation to complete an initial public offering, (C) the failure of the Purchaser to consent to any of the actions proscribed by Section 5.4 or (D) any failure of any Client or CDO Consent Party to consent to the transactions contemplated by this Agreement or (E) any redemption by Sumitomo Life of any shares of LEAP, shall also be excluded from any determination as to the occurrence of a Material Adverse Change. "MATERIAL ADVERSE EFFECT" shall mean, with respect to a Person, a material adverse effect on (i) the condition (financial or otherwise), properties, assets, liabilities, business, operations or results of operations of such Person and its Subsidiaries, taken as a whole; or (ii) the ability of such Person to perform its obligation under this Agreement or the Ancillary Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby; PROVIDED, HOWEVER, that any adverse effect on the Company or any of its Subsidiaries resulting from the failure of (A) the Purchaser 79 to consent to any of the actions proscribed by Section 5.4 or (B) any redemption by Sumitomo Life of any shares of LEAP, shall be excluded from any determination as to the occurrence of a Material Adverse Effect on the Company. "MATERIAL CONTRACTS" shall have the meaning specified in Section 3.10. "MATERIAL PERMITS" shall have the meaning specified in Section 3.5(b). "MINIMUM CASH AMOUNT" shall mean an amount equal to $1.0 million, plus the amount, if any, of any Redemption Fees (as defined in the Sumitomo Letter) payable pursuant to the terms of the Sumitomo Letter as a result of any redemptions of LEAP shares by Sumitomo Life (other than redemptions where after giving effect thereto Sumitomo Life owns not less than 286,817 shares of LEAP); provided, that, with respect to a computation under Section 1.5(e)(i)(x), Minimum Cash Amount shall be increased by an amount equal to the aggregate Tax Liability (as defined in the Restated Operating Agreement) computed for the Members (as defined in the Restated Operating Agreement) with respect to the period beginning the day after the Closing Date and ending February 28, 2005. "NASD" shall mean the National Association of Securities Dealers, Inc. "NEW CDO CONSENT PARTY" shall have the meaning specified in Section 5.1(c). "NEW CLIENTS" shall have the meaning specified in Section 5.1(c). "NON-COMPETE" shall have the meaning specified in Section 1.6. "NYSE" shall mean the New York Stock Exchange. "OBJECTION NOTICE" shall have the meaning specified in Section 1.5(b). "OBLIGATIONS" shall have the meaning specified in Section 12.1(a). "OFAC" shall have the meaning specified in Section 3.5(d). "ORDERS" shall have the meaning specified in Section 3.2. "PATENTS" shall mean, as they exist anywhere in the world, patents, patent applications and inventions, designs and improvements described and claimed therein, patentable inventions and other patent rights (including any divisions, continuations, continuations-in-part, reissues, reexaminations, or interferences thereof, whether or not patents are issued on any such applications and whether or not any such applications are modified, withdrawn or resubmitted). "PATRIOT ACT" shall have the meaning specified in Section 3.5(d). 80 "PERMITTED LIENS" shall mean (i) zoning laws and other land use restrictions that do not materially impair the present or anticipated use or occupancy of the property subject thereto; (ii) any Liens for Taxes, assessments and other governmental charges not yet due and payable or due but not delinquent or due and being contested in good faith so long as such contest does not involve any substantial danger of the sale, forfeiture or loss of any assets and where adequate reserves are established and maintained in accordance with GAAP; and (iii) any inchoate mechanics', workmen's, warehousemen's, repairmen's, carriers' and similar Liens arising or incurred in the ordinary course of business that, except to the extent reserved against on the Closing Statement, secure amounts that are either (x) not past due and payable or (y) are being contested in good faith. "PERSON" shall mean any individual, partnership (general or limited), corporation, limited liability company, limited liability partnership, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof, as well as any syndicate or group that would be deemed a Person under Section 13(d)(3) of the Exchange Act. "PLAN ASSET REGULATION" shall have the meaning specified in Section 3.9(d). "PRELIMINARY JUDGMENT" shall have the meaning specified in Section 11.9. "PRIVACY POLICY" shall have the meaning specified in Section 3.17(k). "PURCHASE PRICE" shall have the meaning specified in Section 1.2(a). "PURCHASE PRICE PERCENTAGE" as to each Seller, shall mean the Purchase Price Percentage specified to Purchaser in writing by the Sellers' Representative prior to the Closing Date as to such Seller. "PURCHASED INTERESTS" shall have the meaning specified in the recitals. "PURCHASER" shall have the meaning set forth in the preamble. "PURCHASER PLANS" shall have the meaning specified in Section 7.4. "RATING AGENCY" shall mean each of Moody's, Standard & Poor's or Fitch, Inc. or any other Person providing ratings to any securities issued in connection with any CDO to which the Company or any of its Subsidiaries provides Investment Management Services. "REAL PROPERTY" shall have the meaning specified in Section 3.8. "REAL PROPERTY LEASES" shall have the meaning specified in Section 3.8. "REGULATORY DOCUMENTS" shall mean, with respect to a Person, all forms, reports, registration statements, schedules and other documents, as applicable, filed, or 81 required to be filed, by such Person with any Governmental Authority pursuant to any applicable Requirements of Law and all correspondence with any Governmental Authority. "RELATED PARTY AGREEMENTS" shall have the meaning specified in Section 3.24. "REPRESENTATIVE" shall have the meaning specified in Section 5.7. "REQUIREMENTS OF LAW" shall mean, as to any Person, any statute, law, ordinance, rule, regulation, order, writ, injunction, judgment or decree of all United States federal, state, local, foreign governments and agencies thereof, including any self-regulatory agency or organization (including the NYSE and NASD) and the SEC and the CFTC, applicable to the Purchaser, the Sellers, the Company or any of its Subsidiaries or any of their respective properties, assets or businesses. "RESTATED OPERATING AGREEMENT" shall have the meaning specified in the recitals. "ROBERTS" shall have the meaning specified in the preamble. "SACHS" shall have the meaning specified in the preamble. "SACHS EMPLOYMENT AGREEMENT" shall mean the Employment Agreement entered into by and among Sachs, the Company and DCM in the form attached hereto as Annex C, dated as of the date hereof and to become effective as of (and subject to) the Closing. "SAR" shall have the meaning set forth in Section 3.25(j). "SCM" shall have the meaning specified in the preamble. "SEC" shall mean the Securities and Exchange Commission, or any successor agency thereto. "SECOND CHOICE FIRM" shall have the meaning specified in Section 1.5(b). "SECURITIES ACT" shall mean the Securities Act of 1933, and the rules and regulations promulgated under that Act, as the same may be amended from time to time, and any successor to such Act. "SELLER BASKET EXCLUSIONS" shall have the meaning specified in Section 11.3(a). "SELLERS" shall have the meaning specified in the preamble. "SELLERS CONSENTS" shall have the meaning specified in Section 4.3. 82 "SELLERS' REPRESENTATIVE" shall have the meaning specified in Section 2.1. "SET-OFF PAYMENT" shall have the meaning specified in Section 11.9. "SHREAR" shall have the meaning specified in the preamble. "SLA" shall have the meaning specified in the recitals. "SLA INTEREST" shall have the meaning specified in the recitals. "SLA PURCHASE AGREEMENT" shall have the meaning specified in the recitals. "SOA" shall have the meaning specified in Section 5.14. "SOFTWARE" shall mean, as they exist anywhere in the world, computer software programs, including all source code, object code, specifications, designs and documentation related to such programs. "SPHINX" shall mean SPhinX Fixed Income Arbitrage Fund SPC. "STRATEGIC FINANCING AGREEMENTS" shall mean any side letter agreement, trust agreement, confirmation, pledge agreement, guaranty or any other agreement and/or instrument pursuant to which the Company and/or its Subsidiaries is obligated to pay, pledge, subordinate or, in any other manner, relinquish its rights to receive compensation (whether in the form of management fees, incentive fees, equity dividends or otherwise) under any Advisory Contract in respect of any Investment. "SUBSIDIARIES" shall mean, as of the relevant date of determination, with respect to any Person, a corporation or other Person of which 50% or more of the voting power of the outstanding voting equity securities or 50% or more of the outstanding economic equity interest is held, directly or indirectly, by such Person; PROVIDED, for the avoidance of doubt, that no CDO or Hedge Fund shall be deemed to be a Subsidiary of the Company or any of its Subsidiaries (except, for purposes of the representation and warranty contained in Section 3.11 if such CDO or Hedge Fund would be treated under GAAP as a Subsidiary of the Company). Unless otherwise qualified, or the context otherwise requires, all references to a "SUBSIDIARY" or to "SUBSIDIARIES" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company, including DCM and Badger Protection Services, Ltd. "SUMITOMO LETTER" shall have the meaning specified in the recitals. "SUMITOMO LIFE" shall have the meaning specified in the recitals. "SUPPLEMENTAL CASH STATEMENT" shall have the meaning specified in Section 1.5(a). 83 "TAX" or "TAXES" shall mean (i) any and all federal, state, provincial, local, foreign and other taxes, levies, fees, imposts, duties, and similar governmental charges (including any interest, fines, assessments, penalties or additions to tax imposed in connection therewith or with respect thereto) including taxes imposed on, or measured by, income, franchise, profits or gross receipts, ad valorem, value added, capital gains, sales, goods and services, use, real or personal property, capital stock, license, branch, payroll, estimated withholding, withholding, employment, social security (or similar), unemployment, compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes, and customs duties, and (ii) any transferee liability in respect of any items described in clause (i) above. "TAX REPORTING REQUIREMENTS" shall have the meaning specified in Section 3.12(f). "TAX RETURNS" shall mean all returns, declarations, reports, forms, estimates, information returns and statements required to be filed or filed in respect of any Taxes or required to be supplied or supplied to a taxing authority in connection with any Taxes, including any schedule or attachment thereto or amendment thereof. "TRADE SECRETS" shall mean, as they exist anywhere in the world, trade secrets, know-how, inventions, processes, procedures, databases, confidential business information and other proprietary information and rights (whether or not patentable or subject to copyright, mask work, or trade secret protection). "TRADEMARKS" shall mean, as they exist anywhere in the world, trademarks, service marks, trade dress, trade names, brand names, designs, logos, or corporate names, whether registered or unregistered, and all registrations and applications for registration thereof, and all goodwill related thereto. "TRUTTER" shall have the meaning specified in the recitals. "TRUTTER WAIVER" shall have the meaning specified in the recitals. "2004 BONUSES" shall mean bonuses paid by the Company or any of its Subsidiaries in the calendar year 2005 to employees of the Company or any Subsidiary in respect of employment during the calendar year 2004. "2004 HEDGE FUND FEES" shall have the meaning specified in Section 1.6. "UNAUDITED FINANCIAL STATEMENTS" shall have the meaning specified in Section 3.11. "WITHHOLDING REQUIREMENTS" shall have the meaning specified in Section 3.12(f). 84 ARTICLE XIV MISCELLANEOUS 14.1 FEES AND EXPENSES. The rights and obligations of the parties hereto with respect to fees and expenses are as follows: (a) The Purchaser shall pay its own expenses incident to the negotiation and consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and the agreements, instruments and documents contemplated hereby and thereby, including any sales, use, transfer, stock transfer, stamp or similar fees or taxes arising out of or in connection with the transactions contemplated by this Agreement and the Ancillary Agreement and, if the transactions contemplated by this Agreement and the Ancillary Agreements are consummated, up to $1 million of the reasonable out-of-pocket expenses actually incurred by SCM (and not reimbursed to SCM by SLA) incident to the negotiation and consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and the agreements, instruments and documents contemplated hereby and thereby, PROVIDED, that SCM shall have delivered to the Purchaser invoices for any such expenses that specify in reasonable detail the nature of the services performed and the disbursements related thereto. (b) Except as provided in Section 14.1(a), the Sellers shall pay their own expenses and the expenses of the Company and its Subsidiaries incident to the negotiation and consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and the agreements, instruments and documents contemplated hereby and thereby. In addition, the Sellers shall be liable for, and shall pay, any and all real property, gains, goods and services, conveyance, recording or any other similar fees or taxes, imposed on any Seller, the Company, any Subsidiary of the Company or the Purchaser, arising out of or related to the transactions contemplated by this Agreement and the Ancillary Agreements. 14.2 ENTIRE AGREEMENT. This Agreement (including the Annexes, the Disclosure Letter, the Ancillary Agreements and the agreements, certificates and other documents contemplated hereby or thereby or required to be delivered hereunder or thereunder) sets forth the entire agreement and understanding between the parties relating to the subject matter hereof and supersedes any prior agreement or understanding (other than the Confidentiality Agreement, the terms and conditions of which the parties hereto expressly reaffirm), whether oral or written, relating to the subject matter of this Agreement. 14.3 SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or under public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement 85 so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. 14.4 AMENDMENT; WAIVER. This Agreement may be amended, modified or supplemented by the parties hereto at any time, but only by an instrument in writing executed by each of the Purchaser and the Sellers' Representative. The terms of this Agreement may be waived by any party hereto at any time, but only by an instrument in writing executed by the party waiving compliance, and no such waiver will be applicable except in the specific instance for which it is given. 14.5 NOTICES. Any notice, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given if delivered or sent by facsimile transmission, upon receipt, or if sent by registered or certified mail, upon the sooner of the date on which receipt is acknowledged or the expiration of three (3) days after deposit in United States post office facilities properly addressed with postage prepaid. All notices to a party will be sent to the addresses set forth below or to such other address or person as such party may designate by notice to each other party hereunder: TO THE PURCHASER: Triarc Companies, Inc. 280 Park Avenue New York, New York 10017 Attn: Brian L. Schorr, Esq. Facsimile No.: (212) 451-3216 With a copy to: Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019 Attn: Paul D. Ginsberg, Esq. Facsimile No.: (212) 757-3990 TO SCM, DPF or SACHS: Deerfield & Company LLC 8700 West Bryn Mawr Avenue 12th Floor Chicago, IL 60631 Attn: Gregory H. Sachs Facsimile No.: (773) 380-1631 With a copy to: 86 Skadden, Arps, Slate, Meagher & Flom LLP 333 West Wacker Drive Chicago, IL 60606 Attn: Rodd M. Schreiber, Esq. Facsimile No.: (312) 407-0411 TO ROBERTS: Scott A. Roberts 1680 S. Lowell Lane Lake Forest, IL 60045 With a copy to: Gardner Carton & Douglas LLP 191 North Wacker Drive Suite 3700 Chicago, IL 60606 Attn: Joseph H. Greenberg Facsimile No.: (312) 569-3000 TO SHREAR: Marvin Shrear 206 Winnetka Avenue Kenilworth, IL 60043 14.6 PARTIES IN INTEREST. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person (other than the Indemnified Parties) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, including, without limitation, by way of subrogation. Nothing in this Agreement, express or implied, is intended to or shall confer any rights upon any Client, New Client, CDO Consent Party or New CDO Consent Party, or shall be an acknowledgment or admission by any Seller, the Company or DCM that the consent of any of such parties to the transactions contemplated by this Agreement is required. 14.7 ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and permissible assigns of the Sellers and the Purchaser. This Agreement and any rights and obligations hereunder shall not be assigned, hypothecated or otherwise transferred by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto, except that, the Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any of its direct or indirect Subsidiaries; PROVIDED, THAT, no such assignment shall relieve the Purchaser of its obligations under this Agreement. 87 14.8 GOVERNING LAW. This Agreement, and all claims arising under, related to, or in connection therewith shall be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. 14.9 CONSENT TO JURISDICTION. Each party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the NON-exclusive jurisdiction of the state courts of THE STATE OF ILLINOIS, COOK COUNTY OR the State of New York, New York County or the United States District Court located in THE STATE OF ILLINOIS, COOK COUNTY OR the State of New York, New York County for the purpose of any and all actions, suits or proceedings arising in whole or in part out of, related to, based upon or in connection with this Agreement or the subject matter hereof, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court, and (c) hereby agrees not to commence any such action other than before one of the above-named courts nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action to any court other than one of the above-named courts whether on the grounds of inconvenient forum or otherwise. Each party hereby (x) consents to service of process in any such action in any manner permitted by New York law; (y) agrees that service of process made in accordance with clause (x) or made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 14.5, shall constitute good and valid service of process in any such action; and (z) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such action any claim that service of process made in accordance with clause (x) or (y) does not constitute good and valid service of process. 88 14.10 WAIVER OF JURY TRIAL. To the extent not prohibited by applicable law that cannot be waived, each party hereby waives, and covenants that it will not assert (whether as plaintiff, defendant or otherwise), any right to trial by jury in any forum in respect of any issue, claim, demand, action or cause of action arising in whole or in part under, related to, based on or in connection with this Agreement or the subject matter hereof, whether now existing or hereafter arising and whether sounding in tort or contract or otherwise. Any party hereto may file an original counterpart or a copy of this Section 14.10 with any court as written evidence of the consent of each such party to the waiver of its right to trial by jury. 14.11 SPECIFIC ENFORCEMENT. Each party acknowledges and agrees that the other party would be irreparably damaged in the event that this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction (without having to post bond or undertake any similar action) to specifically enforce the terms of this Agreement, in addition to any other remedy to which such party may be entitled hereunder, at law or in equity. 14.12 NO WAIVER. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right. 14.13 NEGOTIATION OF AGREEMENT. Each of the parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement. Each party and its counsel cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto shall be deemed the work product of the parties and may not be construed against any party by reason of its preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the party that drafted it is of no application and is hereby expressly waived. 14.14 HEADINGS. The headings contained in this Agreement are inserted only for reference as a matter of convenience and in no way define, limit, or describe the scope or intent of this Agreement, and shall not affect in any way the meaning or interpretation of this Agreement. 14.15 COUNTERPARTS. This Agreement may be executed in any number of counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed an original for all purposes and all of which together shall constitute one and the same instrument. 89 14.16 USAGE. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. All terms defined in this Agreement in their singular or plural forms have correlative meanings when used in this Agreement in their plural or singular forms, respectively. Unless otherwise expressly provided, the words "include," "includes" and "including" do not limit the preceding words or terms and shall be deemed to be followed by the words "without limitation." [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 90 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed as of the date set forth above by their duly authorized representatives. TRIARC COMPANIES, INC. By: /s/ Edward P. Garden ------------------------------------ Name: Edward P. Garden Title: Executive Vice President SACHS CAPITAL MANAGEMENT LLC By: /s/ Gregory H. Sachs ------------------------------------ Name: Gregory H. Sachs, as Trustee of the Gregory H. Sachs Revocable Trust Title: Member DEERFIELD PARTNERS FUND II LLC By: /s/ Marvin Shrear ----------------------------------- Name: Marvin Shrear for Redleaf Management Company, LLC Title: Manager By: /s/ William Pauly ----------------------------------- Name: William Pauly for Redleaf Management Company, LLC Title: Manager /s/ Scott A. Roberts ---------------------------------------- Scott A. Roberts /s/ Marvin Shrear ---------------------------------------- Marvin Shrear /s/ Gregory H. Sachs ---------------------------------------- Gregory H. Sachs EX-10 3 ex10-4form8k_062804.txt EXHIBIT 10.4 EXHIBIT 10.4 ------------ ================================================================================ FOURTH AMENDED AND RESTATED OPERATING AGREEMENT OF DEERFIELD & COMPANY LLC DATED AS OF JUNE 26, 2004 ================================================================================ TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS..........................................................2 ARTICLE II ORGANIZATION.......................................................21 2.1 Organization and Continuation of the Company....................21 2.2 Name; Business Conducted in the Name of the Company.............22 2.3 Registered Office; Registered Agent; Principal Office in the United States; Other Offices.............................22 2.4 Purpose and Powers..............................................22 2.5 Foreign Qualification Governmental Filings......................22 2.6 Term............................................................23 2.7 No State-Law Partnership........................................23 ARTICLE III MEMBERS AND MEMBERSHIP INTERESTS..................................23 3.1 Members.........................................................23 3.2 Compliance with Securities Laws and Other Laws and Obligations.....................................................24 3.3 Issuance of Additional Membership Interests.....................25 3.4 Withdrawal of Members...........................................25 3.5 Liability to Third Parties......................................25 3.6 Powers..........................................................26 3.7 Bank Accounts...................................................26 3.8 Actions by the Members; Meetings; Quorum; Majority..............26 3.9 Action by Written Consent.......................................26 3.10 Telephonic Meetings.............................................26 3.11 Place of Meetings of Members....................................27 3.12 Notice of Annual Meetings.......................................27 3.13 Special Meetings................................................27 3.14 Waiver of Notice................................................27 3.15 Organization....................................................27 3.16 Adjourned Meetings and Notice Thereof...........................27 3.17 Authority.......................................................28 ARTICLE IV CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS.........................28 4.1 Capital Accounts................................................28 4.2 Contributions...................................................29 ARTICLE V DISTRIBUTIONS.......................................................29 5.1 Distribution of Company Funds...................................29 5.2 Distribution of Assets in Kind..................................31 5.3 Allocations of Net Income and Net Loss..........................32 i 5.4 Special Allocations.............................................32 5.5 Certain Tax Matters.............................................34 ARTICLE VI CONFLICTS OF INTEREST; COMPANY OPPORTUNITIES.......................36 6.1 Transactions with Interested Persons............................36 6.2 Company Opportunities...........................................37 ARTICLE VII BOARD OF DIRECTORS; MANAGEMENT....................................39 7.1 Directors.......................................................39 7.2 Powers of the Directors.........................................42 7.3 Resignation of Director.........................................43 7.4 Expenses........................................................43 7.5 Committees of the Board of Directors............................43 7.6 Delegation to Management........................................44 7.7 Triarc Related Party Transactions...............................47 7.8 Bonus Pools.....................................................49 7.9 Termination Upon Qualified IPO or Company Sale..................49 ARTICLE VIII OFFICERS.........................................................50 8.1 Number; Titles; Election; Term; Qualification...................50 8.2 Resignation.....................................................50 8.3 Removal.........................................................50 8.4 Vacancies.......................................................50 8.5 Authority.......................................................50 8.6 Compensation....................................................50 8.7 Voting Securities Owned by the Company..........................50 8.8 Chairman........................................................51 8.9 Chief Executive Officer.........................................51 8.10 President.......................................................51 8.11 Other Officers..................................................51 8.12 Contracts, Checks and Deposits..................................51 8.13 Expenses........................................................52 8.14 Limitation of Liability.........................................52 8.15 Indemnification.................................................52 8.16 Key Person and Directors and Officers Insurance.................53 ARTICLE IX TRANSFER OF MEMBERS' INTERESTS.....................................53 9.1 Limitation on Transfer..........................................53 9.2 Permitted Transfers.............................................54 9.3 Permitted Transfer Procedures...................................54 9.4 Transfers in Compliance with Law................................54 9.5 Substitution of Transferees; Transferee's Capital Account and Membership Interest.........................................55 9.6 Transfers During a Fiscal Year..................................55 9.7 Tag-Along Rights................................................55 ii 9.8 Drag Along Rights...............................................57 9.9 Preemptive Rights...............................................58 9.10 Call Options....................................................60 9.11 Put Rights......................................................63 9.12 Other Withdrawals...............................................67 9.13 Certain Matters Relating to Transfers...........................69 9.14 Termination Upon Qualified IPO or Company Sale..................69 ARTICLE X DISSOLUTION, CONTINUANCE, AND WINDING UP............................69 10.1 Events of Dissolution...........................................69 10.2 Winding Up......................................................69 10.3 Distribution Upon Liquidation...................................70 10.4 Return of Capital Contributions.................................70 10.5 No Dissolution..................................................71 ARTICLE XI MISCELLANEOUS......................................................71 11.1 Confidential Information........................................71 11.2 Non-Compete and Other Restrictive Covenants.....................71 11.3 Financial Information...........................................73 11.4 Inspection......................................................73 11.5 Legend on Membership Interest Certificates......................74 11.6 Conversion or Migration of Company..............................74 11.7 Tax, Accounting and Other Financial Matters with respect to Funds........................................................76 11.8 Counterparts....................................................77 11.9 Notices.........................................................77 11.10 Entire Agreement................................................77 11.11 Effect of Waiver or Consent.....................................77 11.12 Amendment or Modification.......................................78 11.13 Binding Effect; Third Party Beneficiaries.......................78 11.14 Severability....................................................78 11.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; DISPUTE RESOLUTION..................................78 11.16 Specific Enforcement............................................80 11.17 Usage...........................................................80 11.18 Headings........................................................80 11.19 Further Assurances..............................................80 11.20 Election Under the Act..........................................80 11.21 Priority of Agreement...........................................80 11.22 Effectiveness; Termination......................................80 iii EXHIBITS Exhibit A Members and Membership Interests Exhibit B Closing Capital Account Balances and Capital Contributions Exhibit C Form of Transferee Agreement Exhibit D-1 Specified Accounting and Other Financial Matters Exhibit D-2 Specified Tax, Accounting and Other Financial Matters iv FOURTH AMENDED AND RESTATED OPERATING AGREEMENT OF DEERFIELD & COMPANY LLC THIS FOURTH AMENDED AND RESTATED OPERATING AGREEMENT (the "AGREEMENT") is entered into as of June 26, 2004, by and among the Members (as defined below) of DEERFIELD & COMPANY LLC, an Illinois limited liability company (the "COMPANY") and the Company to become effective as of (and subject to) the closing of the transactions contemplated under the Purchase Agreement referred to below. Terms used herein but not defined will have the meanings given to them in Article I of this Agreement. WHEREAS, the Company has heretofore been formed as a limited liability company in accordance with the Act pursuant to the Articles of Organization filed in the office of the Secretary of State of the State of Illinois on February 24, 1997; WHEREAS, upon the terms and subject to the conditions set forth in the Purchase Agreement, dated as of the date hereof, by and between Deerfield Partners Fund II LLC, a Delaware limited liability company ("DPF"), and SLA Investments, Inc., a Delaware corporation ("SLA"), DPF has agreed to purchase immediately prior, but subject to, the Closing the 18.843% Class A Interests owned by SLA; WHEREAS, upon the terms and subject to the conditions set forth in the Purchase Agreement, dated as of the date hereof (the "PURCHASE AGREEMENT"), by and among Triarc Companies, Inc., a Delaware corporation ("TRIARC"), Sachs Capital Management LLC, a Delaware limited liability company ("SCM"), DPF, Scott A. Roberts ("ROBERTS"), Marvin Shrear ("SHREAR"), and Gregory H. Sachs ("SACHS"), Triarc has agreed to purchase, and the Sellers (as defined in the Purchase Agreement) have agreed to sell, assign and transfer, the Purchased Interests (as defined in the Purchase Agreement); and WHEREAS, in connection with the execution and delivery of the Purchase Agreement, the Members desire to amend and restate the Third Amended Operating Agreement, dated as of October 12, 1999, as amended by the First Amendment, dated as of February 7, 2000, the Second Amendment, dated as of December 28, 2000, the Third Amendment, dated as of May 18, 2001, the Fourth Amendment, dated as of January 1, 2002, the Fifth Amendment, dated as of March 31, 2003, and the Sixth Amendment, dated as of May 1, 2003 (as so amended, the "THIRD AMENDED OPERATING AGREEMENT"), as set forth herein, to become effective as of (and subject to) the Closing; NOW, THEREFORE, and in consideration of the mutual covenants, rights, and obligations set forth in this Agreement, the benefits to be derived therefrom, and other good and valuable consideration, the receipt and the sufficiency of which each Member acknowledges, the Members consent to amend and restate the Third Amended Operating Agreement as follows: 2 ARTICLE I DEFINITIONS Any term not defined in this Agreement has the meaning ascribed to it in the Act. As used in this Agreement, the following terms have the following meanings: "ACCEPTANCE NOTICE" has the meaning specified in Section 6.2(a). "ACT" means the Illinois Limited Liability Company Act, 805 Illinois Compiled Statutes ss.ss.180/1-1 ET seq., as such act may from time to time be amended, including any successor statute. "ADDITIONAL PROFITS INTERESTS" has the meaning specified in Section 3.3(a). "AFFILIATE" means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with that first Person. For purposes of this definition, "control" of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract, or otherwise. "AGREEMENT" has the meaning specified in the preamble. "ANNUAL BUDGET" has the meaning specified in Section 7.2(c). "ARTICLES OF ORGANIZATION" means the Articles of Organization, originally filed in the office of the Secretary of State of the State of Illinois on February 24, 1997 pursuant to which the Company was organized, as the same may be amended from time to time hereafter. "AUTHORIZED SACHS DIRECTOR" means Sachs during such time as he is a Sachs Director and at all other times any Sachs Director. "AVAILABLE MARCH 1, 2005 CASH" shall mean the aggregate amount of unrestricted cash held by the Company and its Subsidiaries at the opening of business on March 1, 2005 that in the determination of the Board of Directors acting in good faith is in excess of the amount sufficient to sustain the day-to-day operations of the Company and its Subsidiaries in accordance with the ordinary course working capital requirements of the Company and its Subsidiaries. "AVAILABLE NET CASH" means, for any fiscal year (or portion thereof), the Permitted Investments made by the Company during such period that continue to be held by the Company at the end of such period PLUS the aggregate amount of consolidated unrestricted cash of the Company and its Subsidiaries at the end of such period (excluding the proceeds from financings, issuances by the Company of Membership Interests and other extraordinary transactions), and MINUS a reasonable reserve established by the Board of Directors for future interest and principal payments, 3 distributions with respect to outstanding Preferred Membership Interests under Section 5.1(a), distributions under Section 5.1(b), capital expenditures, other working capital requirements and liabilities, contingent or otherwise. "BANKRUPTCY" means with respect to any Person: (a) having an order entered for relief with respect to that Person under the U.S. Federal Bankruptcy Code or under the law of any other jurisdiction relating to bankruptcy, insolvency, or reorganization or relief of debtors ("OTHER BANKRUPTCY LAW"); (b) not paying, or admitting in writing that Person's inability to pay, that Person's debts generally as they become due; (c) making an assignment for the benefit of creditors; (d) applying for, seeking, consenting to, or acquiescing in the appointment of a receiver, custodian, trustee, examiner, liquidator, or similar official for that Person or any substantial part of that Person's property or failing to cause the discharge of the same within 60 days of such appointment; (e) instituting any proceeding seeking the entry of any order for relief under the U.S. Federal Bankruptcy Code or Other Bankruptcy Law to adjudicate that Person a bankrupt or insolvent, or failing to cause dismissal of such proceeding within 60 days of the institution thereof, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment, or composition of that Person or that Person's debts, under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or failing to file an answer or other pleading denying the material allegations of any such proceeding filed against that Person; or (f) taking any action to authorize or effect any of the foregoing actions or failing to contest in good faith the appointment of a receiver, trustee, examiner, liquidator, or similar official for that Person or any substantial part of that Person's property. "BOARD OF DIRECTORS" means the board appointed to manage the business and affairs of the Company pursuant to Article VII and each "DIRECTOR" is an individual appointed by the Member(s) to act as a "Manager" (as that term is used in the Act) and shall serve on the Board of Directors pursuant to the terms of this Agreement. "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which commercial banks in the State of New York and the State of Illinois are authorized or required by law or executive order to close. "CALL OPTION" means the right of Triarc to purchase the Membership Interests of any Call Option Seller under Section 9.10. "CALL OPTION NOTICE" has the meaning specified in Section 9.10(d). 4 "CALL OPTION PRICE" means the Guaranteed Price or the Standard Price, as the case may be. "CALL OPTION PRICE DETERMINATION DATE" has the meaning specified in Section 9.10(d). "CALL OPTION SELLERS" has the meaning specified in Section 9.10(d). "CAPITAL ACCOUNT" has the meaning set forth in Section 4.1. "CAPITAL CONTRIBUTIONS" has the meaning specified in Section 4.2. "CAPITAL RETURN AMOUNT" means an amount equal to the aggregate distributions to the Members with respect to Class A Interests and Class B Interests under Section 5.1(c) to the extent attributable to the Profits Interest Limitation. "CARRYING VALUE" means, with respect to any Company asset, the asset's adjusted net basis for United States federal income tax purposes, except that the Carrying Values of all Company assets may, at the discretion of the Board of Directors, be adjusted to equal their respective fair market values (as reasonably determined in good faith by the Board of Directors), in accordance with the rules set forth in Regulation section 1.704-1(b)(2)(iv)(f), as provided for in Section 5.4(h). In connection with the transactions contemplated by the Purchase Agreement and the issuance of the Class C Profits Only Interests on the Closing Date, the Carrying Values of all Company assets on the Closing Date shall be adjusted to equal the Closing Date Value (in a manner reasonably determined in good faith by the Board of Directors in accordance with Regulation section 1.704-1(b)(2)(iv)(f), taking into account the purchase price allocations made under Section 1.6 of the Purchase Agreement). In the case of any Company asset that has a Carrying Value that differs from its adjusted tax basis, Carrying Value shall be adjusted by the amount of depreciation, depletion and amortization calculated for purposes of the definitions of "Net Income" and "Net Loss" rather than the amount of depreciation, depletion and amortization determined for United States federal income tax purposes. "CAUSE" with respect to any Person employed pursuant to an employment agreement with the Company or any of its Subsidiaries, has the meaning specified in such Person's employment agreement. "CLAIM" has the meaning specified in Section 8.15. "CLASS A INTERESTS" means the Class A-1 Interests and the Class A-2 Interests. "CLASS A-1 INTERESTS" means the Class A-1 Interests issued by the Company as set forth on EXHIBIT A, which are voting interests. 5 "CLASS A-2 INTERESTS" means the Class A-2 Interests issued by the Company as set forth on EXHIBIT A, which are voting interests. "CLASS B INTERESTS" means the Class B Interests issued by the Company as set forth on EXHIBIT A, which are non-voting interests. "CLASS B MEMBER" means a Member who holds solely Class B Interests or solely Class B Interests and Class C Profits Only Interests. "CLASS C MEMBER" means a Member who holds solely Class C Profits Only Interests. "CLASS C PROFITS ONLY INTERESTS" means the Class C Profits Only Interests issued by the Company as set forth on EXHIBIT A, which are voting interests. The Class C Profits Only Interests shall be subject to vesting conditions as described in the applicable agreement pursuant to which such interests were granted. "CLASS OF INTERESTS" means each separate class of Membership Interests as set forth on EXHIBIT A. Initially, the Classes of Interests shall be the Class A-1 Interests, the Class A-2 Interests, the Class B Interests and the Class C Profits Only Interests. "CLOSING" means the closing of the transactions contemplated by the Purchase Agreement. "CLOSING DATE" means the date on which the Closing occurs. "CLOSING DATE VALUE" means an amount equal to the product of (x) the sum of (i) the "Purchase Price" as defined in the Purchase Agreement (and adjusted pursuant to Section 1.5 of the Purchase Agreement), (ii) an amount equal to the expenses incurred by Triarc in connection with the transactions contemplated by the Purchase Agreement, and (iii) the amount of any payment by Triarc of expenses of SCM pursuant to Section 14.1(a) of the Purchase Agreement; and (y) a fraction, the numerator of which is 1.0 and the denominator of which is 0.6360. "CODE" means the U.S. Internal Revenue Code of 1986, as amended, and any successor thereto. "COMMITMENT AGREEMENT" has the meaning specified in the Purchase Agreement. "COMMON MEMBERSHIP INTERESTS" means all Membership Interests other than Preferred Membership Interests. "COMPANY" means Deerfield & Company LLC, the Illinois limited liability company created by the Articles of Organization originally filed on February 24, 1997, and its successors (including pursuant to Section 11.6) and permitted assigns. 6 "COMPANY MINIMUM GAIN" has the meaning specified for "partnership minimum gain" in Regulation section 1.704-2(b)(2) and 1.704-2(d). "COMPANY OPPORTUNITY" means any investment or business opportunity involving (i) the provision of any Investment Management Services or (ii) the acquisition of any Person (whether pursuant to (A) the acquisition of the direct or indirect beneficial ownership of at least 20% of the Voting Stock of, after giving effect to which no "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) would be the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of a greater percentage of such Voting Stock or have the ability to elect (by contract or otherwise) a greater number of directors (or the equivalent) of such Person than would be enjoyed, directly or indirectly, by Triarc and its controlled Affiliates, (B) the acquisition of the ability (whether by ownership of Voting Stock or by contract) to elect a majority of the board of directors (or the equivalent) of, (C) the acquisition of all or a substantial part of the assets of, or (D) a merger, consolidation or other business combination involving, such Person) that is primarily engaged in providing Investment Management Services. "COMPANY SALE" means (A)(i) the Transfer (in a single transaction or a series of related transactions), directly or indirectly, of either (x) a majority of the Common Membership Interests or (y) a majority in interest of the Voting Membership Interests on a fully diluted basis, (ii) the sale, lease or exchange (in a single transaction or a series of related transactions), directly or indirectly, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, or (iii) the merger, consolidation or combination of the Company with or into any other Person, or of any other Person with or into the Company, pursuant to which the outstanding Membership Interests are reclassified into or exchanged for cash, securities or other property, other than any such transaction in the case of clauses (ii) and (iii) where the holders of the Membership Interests immediately prior to such transaction own, directly or indirectly, a majority of the outstanding equity and Voting Stock of the surviving or transferee Person immediately after such transaction or (B) any transaction not covered by (A) which has given rise to the delivery of a Drag-Along Notice under Section 9.8 (subject to completion of such transaction giving rise to the Drag-Along Notice). "COMPETING BUSINESS" means a business which engages or to the knowledge of the applicable Subject Member (after due inquiry) intends to engage, in whole or in part, in the performance, marketing and sale of Investment Management Services, which are competitive with, and are similar to, may be used as substitutes for, or may detract from any services of the Company or any of its Subsidiaries during the Restricted Period, whether such services were performed by the Company or any of its Subsidiaries or by another Person on behalf of the Company or any of its Subsidiaries; the services provided by a Competing Business and subject to the restrictive covenants contained in Section 11.2 being herein referred to as "COMPETING SERVICES." "COMPLIANCE PERIOD" has the meaning specified in Section 11.7. "CONTEST" has the meaning specified in Section 5.5(a). 7 "CONVERSION TRANSACTION" has the meaning specified in Section 11.6(a). "CORPORATE SERVICES AGREEMENT" has the meaning specified in the Purchase Agreement. "COVERED PERSON" has the meaning specified in Section 8.14. "DCM" means Deerfield Capital Management LLC, a Subsidiary of the Company, together with its successors and permitted assigns. "DEERFIELD INVESTMENT SECURITIES" means any debt or equity security issued by any fund, investment vehicle, trust or similar entity to which the Company or any of its Subsidiaries provides Investment Management Services. "DISABILITY" with respect to any Person employed pursuant to an employment agreement with the Company or any of its Subsidiaries, has the meaning specified in such Person's employment agreement. "DLLCA" means the Delaware Limited Liability Company Act, as such act may from time to time be amended, including any successor statute. "DPF" has the meaning specified in the recitals. "DRAG-ALONG MEMBERSHIP INTERESTS" has the meaning specified in Section 9.8. "DRAG-ALONG NOTICE" has the meaning specified in Section 9.8. "DRAG-ALONG RIGHTHOLDER" has the meaning specified in Section 9.8. "DRAG-ALONG SELLERS" has the meaning specified in Section 9.8. "EARNINGS PAY-OUT VALUE" means, with respect to a withdrawing Class B Member or Class C Member under Section 9.12 at any date of determination, an amount equal to the Fair Market Value of the Class B Interests or vested Class C Profits Only Interests, as applicable, held by such withdrawing Class B Member or Class C Member as of such date. "EMERGENCY FUNDING PARTICIPANTS" has the meaning specified in Section 9.9(e). "EXCHANGE ACT" means the Securities Exchange Act of 1934 and any successor to such Act, and the rules and regulations promulgated thereunder, as any of them may be amended from time to time. "EXCLUDED PREEMPTIVE RIGHTHOLDERS" has the meaning specified in Section 9.9(e). 8 "EXCLUDED SECURITIES" means (i) Securities issued or to be issued to employees, officers or directors of, or consultants or advisors to, the Company or any of its Subsidiaries, pursuant to equity purchase or equity option plans or other arrangements that are approved by the Board of Directors, (ii) Securities issued in respect of or in exchange for Membership Interests by way of a dividend, split or similar transaction, (iii) Securities issued upon exercise, conversion or exchange of any Securities either previously issued or issued in accordance with the terms of this Agreement, (iv) Securities issued to a third party financial institution in connection with a debt financing of the Company and/or any of its Subsidiaries approved by the Board of Directors, (v) Securities issued to the third party seller or sellers of a business (provided such seller or sellers are not Affiliates of the Company) in connection with the Company's (or its Affiliate's) acquisition of such third party seller's or sellers' business approved by the Board of Directors, whether such acquisition is in the form of a merger, consolidation, asset purchase or other similar business combination and (vi) Securities issued in connection with any recapitalization, merger, consolidation or reorganization by the Company approved by the Board of Directors. "EXTRAORDINARY MATTER" has the meaning specified in Section 7.2(d). "FAIR MARKET VALUE" means, with respect to any Membership Interests, as of the date of determination, the price at which, in the reasonable good faith determination of the Board of Directors, such Membership Interests would likely be sold in an arm's length transaction between a willing and able buyer and a willing and able seller, neither of which is an Affiliate of the other and neither of which is under compulsion to enter into such transaction, based on then prevailing market conditions and taking into account all circumstances determined to be relevant to the establishment of such price at such time (including any Tax Advances that have been made with respect to such Membership Interests and not recovered by reduction of distributions or proceeds of liquidation pursuant to the penultimate sentence of Section 5.1(b)), without any minority or illiquidity discounts or any discount based on the difference in voting or other rights conferred as a result of the provisions of this Agreement. For the avoidance of doubt, all Class A Interests shall be treated as having the same Fair Market Value. "Fair Market Value" shall be determined as of the date of the event giving rise to the need to determine "Fair Market Value." "FINAL JUDGMENT" has the meaning specified in Section 5.1(c). "FINAL NOTICE" has the meaning specified in Section 6.2(a). "FUND" has the meaning specified in Section 11.7(a). "GAAP" means generally accepted accounting principles of the United States of America. "GOOD REASON" with respect to any Person employed pursuant to an employment agreement with the Company or any of its Subsidiaries, has the meaning specified in such Person's employment agreement and, in the case of Sachs and Roberts, 9 shall also mean the primary business of the Company and its Subsidiaries having ceased to be the provision of Investment Management Services over the written objection of each of the Sachs Directors. "GUARANTEED PRICE" means, with respect to a Call Option Seller or Put Right Seller at any date of determination, an amount equal to the greater of (i) $23,839,000 (subject to (x) proration to the extent that any Sachs Affiliated Party Transfers (other than to a Permitted Transferee) any Membership Interests held by SCM as of the Closing Date and (y) equitable reduction for distributions of proceeds from a leveraged recapitalization or from one or more sales of portions of the business of the Company and its Subsidiaries, and (ii) the Put/Call Fair Market Value, as of such date of determination, of the Membership Interests held by SCM as of the Closing Date being called from such Call Option Seller or put by such Put Right Seller, as applicable. "HIGHEST CLASS A/B DISTRIBUTIVE SHARE AMOUNT" means, with respect to any Taxable Year or portion thereof commencing on or after the date immediately following the Closing Date, an amount equal to the highest amount determined by computing, separately in the case of each Class A Interest and Class B Interest of each Member, the product of (x) the excess, if any, of (A) the distributive share of the taxable net income of the Company allocated to such Class of Interests held by such Member for such Taxable Year or portion thereof (computed without regard to any adjustments under Section 743 of the Code), over (B) the amount of net operating loss or capital loss, as the case may be, allocated to such Class of Interests held by such Member for a prior Taxable Year commencing on or after the date immediately following the Closing Date or for a prior portion of the current Taxable Year (to the extent not previously utilized in computing Tax Liability (taking into account the character of items composing such taxable net income)); and (y) a fraction, the numerator of which is one percent (1.0%), and the denominator of which is the Percentage Interest for such Class of Interest held by such Member. "IMMEDIATE FAMILY" means, with respect to any individual, such individual's spouse; the descendants (natural or adoptive, of the whole or half blood) of such individual, such individual's spouse and the parents (natural or adoptive) of such individual or such individual's spouse; and the grandparents and parents (natural or adoptive) of such individual or such individual's spouse. "INDEBTEDNESS" of any Person means (a) all obligations of such Person for borrowed money and (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments. "INVESTMENT BANKING FIRM" means any nationally recognized investment banking or valuation firm with prior experience valuing companies in the same industry as the Company that has not, within the 24 months prior to its selection hereunder, performed any material services for, or received any fees (other than de minimis amounts) from or on behalf of, either selecting party or any of its Affiliates. 10 "INVESTMENT MANAGEMENT SERVICES" means any services (including sub-advisory services) which involve (a) the management of an investment account or fund (or portions thereof or a group of investment accounts or funds) of any third party for compensation, and performing activities related or incidental thereto, or (b) the rendering of advice with respect to the investment and reinvestment of assets or funds (or any group of assets or funds) of any third party (including any "business development company" under the Investment Company Act of 1940, as amended) for compensation, and performing activities related or incidental thereto. "IPO" means the closing of the initial underwritten public offering of equity securities of the Company pursuant to an effective registration statement filed pursuant to the Securities Act pursuant to which such securities are listed on a national securities exchange or quoted on the Nasdaq National Market or any successor market. "LIBOR" means, in relation to any relevant sum and any relevant period: (i) the rate shown on Bloomberg page "BBAM1" of the Bloomberg Screen as being the rate per annum at which Dollar deposits are offered for a period equal or comparable to such period at or about 11:00 a.m. (London time) on the second Business Day in London before the first day of such period; for this purpose "Bloomberg Screen" means the display page so designated on the Bloomberg service; or (ii) if at or about such time on the relevant day no such rate appears on the Bloomberg Screen, the rate shown on the Telerate Monitor Screen as being the rate per annum at which U.S. dollar deposits are offered for a period equal or comparable to such period at or about 11:00 a.m. (London time) on the second Business Day in London before the first day of such period; for this purpose "Telerate Monitor Screen" means the display designated as page "3750" on the Telerate Monitor system or such other page as may replace page "3750" on that system for the purpose of displaying offered rates for U.S. dollar deposits; or (iii) if at or about such time on the relevant day no such rate appears on the Telerate Monitor Screen, the rate per annum at which U.S. dollar deposits in an amount comparable to such sum are offered to Citibank, N.A. for such period by prime banks in the London interbank market at or about l1:00 a.m. (London time) on the second Business Day in London before the first day of such period, as determined by the Board of Directors. "LIEN" means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference, priority, right or other security interest or preferential arrangement of any kind or nature whatsoever (excluding preferred stock and equity related preferences). "LIQUID ASSETS" means (i) direct obligations of, or obligations the principal of and interest on are unconditionally guaranteed by, the United States of America or by any agency thereof; (ii) investments in commercial paper maturing within a time period that would enable the Company, in the reasonable judgment of the Board of 11 Directors, taking into account its actual cash on hand reflected on its balance sheet, to make distributions in accordance with Section 5.1(b) and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's Ratings Service (or its successor) or from Moody's Investors Service, Inc. (or its successor); (iii) investments in certificates of deposit, banker's acceptances and time deposits maturing within a time period that would enable the Company, in the reasonable judgment of the Board of Directors, taking into account its actual cash on hand reflected on its balance sheet, to make distributions in accordance with Section 5.1(b), issued or guaranteed by or placed with, and money market deposits issued or offered by, any commercial bank that is a member of the Federal Reserve System and that has a combined capital and surplus and undivided profits of not less than $500,000,000 (or the foreign currency equivalent thereof); (iv) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (i), (ii) or (iii) above and entered into with a financial institution satisfying the criteria of clause (iii) above; (v) investments in "money market funds" within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (i) through (iv) above; and (vi) investments in securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "AA" by Standard & Poor's Rating Services (or its successor) or "Aa" by Moody's Investors Services, Inc. (or its successor). "MATERIAL COMPANY OPERATING AGREEMENT BREACH EVENT" means a breach by any Triarc Affiliated Party, the Company or any of its Subsidiaries of any covenant or agreement contained in this Agreement, which breach has had or reasonably could be expected to have a material adverse effect on any Sachs Affiliated Party; PROVIDED, that a Material Company Operating Agreement Breach Event shall not be deemed to have occurred with respect to any such breach that is capable of being cured unless and until a Sachs Affiliated Party shall have provided written notice thereof to the Company and the Company shall have failed promptly (and in any event within five Business Days) thereafter to cure such breach. MATERIAL ROBERTS OPERATING AGREEMENT BREACH EVENT" means (i) a willful and material breach by any of the Roberts Affiliated Parties of any covenant or agreement contained in Section 11.2 or (ii) a breach by any of the Roberts Affiliated Parties of any other covenant or agreement contained in this Agreement, which breach described in this clause (ii) has had or reasonably could be expected to have a material adverse effect on any Triarc Affiliated Party, the Company or any of its Subsidiaries; PROVIDED, that a Material Roberts Operating Agreement Breach Event shall not be deemed to have occurred with respect to any such breach that is capable of being cured unless and until a Triarc Affiliated Party or the Company shall have provided written notice thereof to such Roberts Affiliated Party and such Roberts Affiliated Party shall have failed promptly (and in any event within five Business Days) thereafter to cure such breach. 12 "MATERIAL SACHS OPERATING AGREEMENT BREACH EVENT" means (i) a willful and material breach by any of the Sachs Affiliated Parties of any covenant or agreement contained in Section 11.2 or (ii) a breach by any of the Sachs Affiliated Parties of any other covenant or agreement contained in this Agreement, which breach described in this clause (ii) has had or reasonably could be expected to have a material adverse effect on any Triarc Affiliated Party, the Company or any of its Subsidiaries; PROVIDED, that a Material Sachs Operating Agreement Breach Event shall not be deemed to have occurred with respect to any such breach that is capable of being cured unless and until a Triarc Affiliated Party or the Company shall have provided written notice thereof to such Sachs Affiliated Party and such Sachs Affiliated Party shall have failed promptly (and in any event within five Business Days) thereafter to cure such breach. "MEMBERS" or "MEMBER" means the Persons (or each of them) listed on EXHIBIT A from time to time as holders of Membership Interests and such other Persons who have been duly admitted as Members pursuant to Section 3.3 and reflected on EXHIBIT A, who have not ceased to be Members (i) pursuant to Section 3.4 or any other Section hereof or (ii) as a result of the Transfer of all of their Membership Interests to another Person. "MEMBER NONRECOURSE DEBT MINIMUM GAIN" means, with respect to each Member nonrecourse debt (which has the same meaning as "partner recourse debt" in Regulation section 1.704-2(b)(4)), an amount equal to the Company Minimum Gain that would result if such Member nonrecourse debt were treated as a nonrecourse liability (as defined in Regulation section 1.752-1(a)(2)) determined in accordance with Regulation section 1.704-2(i)(3). "MEMBER NONRECOURSE DEDUCTIONS" has the meaning specified for "partner nonrecourse deductions" in Regulation section 1.704-2(i)(2). "MEMBERSHIP INTERESTS" means the interests in the Company held by the Members set forth on EXHIBIT A hereto, as EXHIBIT A may be amended, supplemented and modified from time to time by the Board of Directors. The Membership Interests shall be further designated as specified Classes of Interests, with the rights and obligations as set forth herein. "MIGRATION TRANSACTION" has the meaning specified in Section 11.6(b). "NET INCOME" and "NET LOSS" means, for each fiscal year or other period, the taxable income or loss of the Company, or particular items thereof, determined in accordance with the accounting method used by the Company for United States federal income tax purposes with the following adjustments: (a) all items of income, gain, loss, or deduction allocated pursuant to Section 5.4 (other than Section 5.4(h)) shall not be taken into account in computing such taxable income or loss; (b) any income of the Company that is exempt from United States federal income taxation and not otherwise taken into account in computing Net Income and Net Loss shall be added to such taxable income or loss; (c) if the Carrying Value of any asset is adjusted pursuant to the definition of Carrying Value, or an adjustment is made to the Capital Accounts under 13 Section 5.4(h) with respect to a distribution of property, the amount of such adjustment shall be taken into account, immediately prior to the event giving rise to such adjustment, as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss; (d) if the Carrying Value of any asset differs from its adjusted tax basis for United States federal income tax purposes, any gain or loss resulting from a disposition of such asset shall be calculated with reference to such Carrying Value; (e) if the Carrying Value of any asset differs from its adjusted tax basis for United States federal income tax purposes the amount of depreciation, amortization or cost recovery deductions with respect to such asset shall for purposes of determining Net Income and Net Loss be an amount which bears the same ratio to such Carrying Value as the United States federal income tax depreciation, amortization or other cost recovery deductions bears to such adjusted tax basis (PROVIDED, that if the United States federal income tax depreciation, amortization or other cost recovery deduction is zero, the Board of Directors may use any reasonable method for purposes of determining depreciation, amortization or other cost recovery deductions in calculating Net Income and Net Loss); and (f) any expenditures of the Company that are described in Section 705(a)(2)(B) of the Code or are treated as described in Section 705(a)(2)(B) of the Code pursuant to Regulation section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Net Income and Net Loss shall be treated as deductible items. "NEW MEMBERSHIP INTERESTS" means all Securities of the Company other than Excluded Securities. "OFFERED INTERESTS" has the meaning specified in Section 9.7(a). "OFFERING NOTICE" has the meaning specified in Section 9.7(a). "OTHER OPPORTUNITY" has the meaning specified in Section 6.2(d). "PARTICIPATING TAG-ALONG RIGHTHOLDER" has the meaning specified in Section 9.7(b). "PERCENTAGE INTEREST" means, with respect to each Class of Interests held by a Member, the percentage set forth on EXHIBIT A. "PERMITTED HOLDER" means, collectively, Nelson Peltz, Peter W. May, DWG Acquisition Group, L.P. ("DWG") (while it continues to be an Affiliate of Nelson Peltz or Peter W. May) and/or their respective Affiliates (including Affiliates of DWG while DWG continues to be an Affiliate of Nelson Peltz or Peter W. May), including members of their Immediate Families, and any trusts and estates of which any of them are primary beneficiaries and any entities of which any of them hold a majority of the equity securities. "PERMITTED INVESTMENTS" means Liquid Assets, Deerfield Investment Securities and any other investments which have been approved in accordance with Section 7.2(d)(i). 14 "PERMITTED TRANSFEREE" has the meaning specified in Section 9.2. "PERSON" OR "PERSONS" means any individual, corporation, partnership, joint venture, association, joint-stock company, business trust, limited liability company, trust, unincorporated organization or government or a political subdivision, agency or instrumentally thereof or other entity or organization of any kind. "POST-CONVERSION CORPORATION" has the meaning specified in Section 11.6. "PRE-CLOSING TAX PERIOD" has the meaning specified in Section 5.5(a). "PREEMPTIVE RIGHTHOLDER" has the meaning specified in Section 9.9(a). "PREEMPTIVE RIGHTS OFFER" has the meaning specified in Section 9.9(a). "PREEMPTIVE RIGHTS PERIOD" has the meaning specified in Section 9.9(a). "PREFERRED CONTRIBUTIONS" means, with respect to any Member, the Capital Contributions made by such Member to purchase or subscribe for Preferred Membership Interests. "PREFERRED MEMBERSHIP INTERESTS" means any Membership Interests authorized by the Board of Directors from time to time as preferred interests having separate rights, preferences (including in right of payment with respect to distributions and/or upon liquidation), powers or duties as may be designated by the Board of Directors. "PREFERRED RETURN" means, with respect to a Preferred Membership Interest, a preferred return computed on the daily balance of the sum of Unreturned Preferred Contributions and Unpaid Preferred Return at the rate specified by the terms of the Preferred Membership Interests. "PRELIMINARY JUDGMENT" has the meaning specified in Section 5.1(c). "PROFITS INTEREST LIMITATION" has the meaning specified in Section 5.1(c). "PROFITS INTERESTS" means the Class C Profits Only Interests and any Additional Profits Interests. "PRO RATA PERCENTAGE" means, with respect to any Member, the quotient obtained by dividing (i) the Percentage Interest of vested Membership Interests held by such Member by (ii) the aggregate Percentage Interest of vested and unvested Membership Interests held by all Members (assuming the exercise of all options to purchase or rights to subscribe for Membership Interests). "PURCHASE AGREEMENT" has the meaning specified in the recitals and shall include all amendments, modifications and supplements thereto. 15 "PURCHASE NOTICE" has the meaning specified in Section 9.9(b). "PUT/CALL FAIR MARKET VALUE" means, with respect to any Membership Interests being called pursuant to Section 9.10 or put pursuant to Section 9.11 at any time, the price at which, in the opinion of the Investment Banking Firm selected in accordance with the Selection Procedures, such Membership Interests would be likely to be sold in an arm's length transaction between a willing and able buyer and a willing and able seller, neither of which is an Affiliate of the other and neither of which is under compulsion to enter into such transaction, based on then prevailing market conditions and taking into account all circumstances determined by such Investment Banking Firm to be relevant to the establishment of such price at such time (including any Tax Advances that have been made with respect to such Membership Interests and not recovered by reduction of distributions or proceeds of liquidation pursuant to the penultimate sentence of Section 5.1(b)), without any minority or illiquidity discounts or any discount based on the difference in voting or other rights conferred as a result of the provisions of this Agreement. For the avoidance of doubt, all Class A Interests shall be treated as having the same Fair Market Value. In determining the Put/Call Fair Market Value, such Investment Banking Firm shall make such determination after giving effect to the distributions, if any, to be made in respect of such Membership Interests under Sections 9.10(e) or 9.11(g), as applicable. "Put/Call Fair Market Value" shall be determined (i) in the case of a party exercising a Call Option or Put Right, as applicable, pursuant to Section 9.10(c) or 9.11(e), as of the date of the event giving rise to the Call Option pursuant to Section 9.10(c) or the Put Right pursuant to Section 9.11(e), and (ii) in the case of a party otherwise exercising a Call Option or a Put Right, as applicable, as of the date on which the Call Option Notice or the Put Right Notice, as the case may be, is delivered in respect of any other Call Option pursuant to Section 9.10 or Put Right pursuant to Section 9.11. "PUT RIGHT" means the right of any Put Right Seller to require Triarc to purchase the Membership Interests of any such Put Right Seller under Section 9.11. "PUT RIGHT NOTICE" has the meaning specified in Section 9.11(f). "PUT RIGHT PRICE" means the Guaranteed Price or the Standard Price, as the case may be. "PUT RIGHT PRICE DETERMINATION DATE" has the meaning specified in Section 9.11(f). "PUT RIGHT SELLERS" has the meaning specified in Section 9.11(f). "QUALIFIED IPO" means an IPO of common equity securities of the Company (or a successor thereto) which yields not less than $75,000,000 in cash proceeds net of all taxes payable by the Company directly as a result of such IPO and customary fees, commissions, costs and the other expenses incurred by the Company in connection therewith. 16 "REGULATIONS" means the temporary and final regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "REGULATORY ALLOCATIONS" has the meaning specified in Section 5.4(g). "REJECTION NOTICE" has the meaning specified in Section 6.2(a). "RESTRICTED PERIOD" means, (i) with respect to any Person employed pursuant to an employment agreement with the Company or any of its Subsidiaries, the term of such Person's employment thereunder and the period following the termination of such Person's employment specified therein during which such Person is restricted from taking any actions similar to those specified in Section 11.2, (ii) with respect to any Person that is not so employed, the period beginning with such Person's employment with the Company or any of its Subsidiaries and ending 60 months after the end of such employment and (iii) with respect to the holder of the Sachs Interest, the term of Sachs's employment under the Sachs Employment Agreement and the period following the termination of Sachs's employment specified therein during which Sachs is restricted from taking any actions similar to those specified in Section 11.2. "ROBERTS" has the meaning specified in the recitals and shall include his successors and permitted assigns. "ROBERTS AFFILIATED PARTIES" means Roberts and each of his Permitted Transferees, together with their successors and permitted assigns, to the extent any of the foregoing holds a Membership Interest. "ROBERTS EMPLOYMENT AGREEMENT" means the employment agreement, dated as of the date hereof, by and among the Company, DCM and Roberts, as amended, supplemented or otherwise modified from time to time. "SACHS" has the meaning specified in the recitals and shall include his successors and permitted assigns. "SACHS AFFILIATED PARTIES" means SCM and each of its Permitted Transferees, together with their successors and permitted assigns, to the extent any of the foregoing holds a Membership Interest. "SACHS DIRECTOR" has the meaning specified in Section 7.1(a). "SACHS EMPLOYMENT AGREEMENT" means the employment agreement, dated as of the date hereof, by and among the Company, DCM and Sachs, as amended, supplemented or otherwise modified from time to time. "SACHS INTEREST" means the Class A Interest held from time to time by each of the Sachs Affiliated Parties. 17 "SCM" has the meaning specified in the recitals and shall include its successors and permitted assigns. "SEC" has the meaning specified in Section 11.7(a). "SECURITIES" means, with respect to any Person, all equity interests of such Person, all securities convertible into or exchangeable for equity interests of such Person, and all options, warrants, and other rights to purchase or otherwise acquire from such Person equity interests, including any equity appreciation or similar rights, contractual or otherwise. "SECURITIES ACT" means the Securities Act of 1933 and any successor to such Act, and the rules and regulations promulgated thereunder, as any of them may be amended from time to time. "SELECTION PROCEDURES" means, with respect to the determination of the Fair Market Value or the Put/Call Fair Market Value to be made by an Investment Banking Firm hereunder, the selection of such Investment Banking Firm by two other Investment Banking Firms, one selected by Triarc and one selected (a) in connection with the exercise of any Call Option or Put Right, jointly by the holders of a majority of the Membership Interests held by the Call Option Sellers whose Membership Interests are being called at such time or the holders of a majority of the Membership Interests held by the Put Right Sellers whose Membership Interests are being put at such time, as applicable, (b) in connection with any such determination that may be required by Section 9.13, jointly by the objecting Directors, (c) in connection with the exercise by Sachs of his right to request a customary "fairness opinion" with respect to a Triarc Related Party Transaction in accordance with Section 7.7, by Sachs or (d) in connection with any such determination that may be required by Section 11.6(a), jointly by the Sachs Affiliated Parties (each, a "selecting party"); PROVIDED, that each selecting party shall instruct the Investment Banking Firm so selected by it to select the third Investment Banking Firm within five Business Days following the date on which the second Investment Banking Firm is selected; PROVIDED, HOWEVER, that if either selecting party fails to notify the other of its selection of an Investment Banking Firm within seven Business Days after receipt of notice from the other selecting party of its selection, the determination shall be rendered by the Investment Banking Firm named by such other selecting party in such notice. "SELLING MEMBER" has the meaning specified in Section 9.7(a). "SET-OFF MEMBER" has the meaning specified in Section 5.1(c). "SET-OFF PAYMENT" has the meaning specified in Section 5.1(c). "SHREAR" has the meaning specified in the recitals. "SLA" has the meaning specified in the recitals. 18 "SOA" has the meaning specified in Section 7.6(b)(ii). "STANDARD PRICE" means, with respect to a Call Option Seller or Put Right Seller at any date of determination, an amount equal to the Put/Call Fair Market Value of the Membership Interests being called from such Call Option Seller or being put by such Put Right Seller, as applicable. "STRATEGIC PLAN" has the meaning specified in Section 7.2(c). "SUBJECT MEMBER" means (i) a Class B Member, (ii) a Class C Member, (iii) a holder of an Additional Profits Interest or (iv) a holder of the Sachs Interest. "SUBSIDIARY" means, with respect to any Person, any other Person of which 50% or more of the total voting power of the Voting Stock is owned or controlled, directly or indirectly, by such Person, or such Person and one or more Subsidiaries of such Person, or one or more Subsidiaries of such Person. "SUMITOMO LETTER" has the meaning specified in the Purchase Agreement. "TAG-ALONG NOTICE" has the meaning specified in Section 9.7(b). "TAG-ALONG PRO RATA PORTION" means, with respect to any Participating Tag-Along Rightholder at any date of determination, the quotient obtained by dividing (i) the aggregate Fair Market Value of such Tag-Along Rightholder's qualifying Membership Interests determined in accordance with Section 9.13 by (ii) the Fair Market Value of all qualifying Membership Interests as determined in accordance with Section 9.13. "TAG-ALONG RIGHTHOLDER" has the meaning specified in Section 9.7(a). "TAX ADVANCES" has the meaning specified in Section 5.1(c). "TAX LIABILITY" means, with respect to any Taxable Year or portion thereof commencing on or after the date immediately following the Closing Date, computed separately with respect to each Class of Interests held by a Member, (1) in the case of a Class A Interest or Class B Interest, the product of (x) the Highest Class A/B Distributive Share Amount for such Taxable Year or portion thereof; and (y) a fraction, the numerator of which is the Percentage Interest for such Class of Interests held by such Member, and the denominator of which is one percent (1.0%); and (z) the Tax Rate; and (2) in the case of any other Class of Interest, the product of (x) the excess, if any, of (A) the distributive share of the taxable net income of the Company allocated to such Class of Interests held by such Member for such Taxable Year or portion thereof (computed without regard to any adjustments under Section 743 of the Code), over (B) the amount of net operating loss or capital loss, as the case may be, 19 allocated to such Class of Interests held by such Member for a prior Taxable Year commencing on or after the date immediately following the Closing Date or for a prior portion of the current Taxable Year (to the extent not previously utilized in computing Tax Liability (taking into account the character of items composing such taxable net income)); and (y) the Tax Rate; PROVIDED, that, with respect to any Preferred Membership Interest, Tax Liability shall not include any allocations of taxable net income or loss of the Company attributable to distributions under Section 5.1(a). For purposes of clarification, the Members agree and acknowledge that the Tax Liability for any Class of Interest with respect to any Taxable Year or portion thereof ending on or before the Closing Date shall be zero (0). "TAX MATTERS PARTNER" has the meaning specified in Section 5.5(a). "TAX RATE" means an assumed effective tax rate equal to the sum of the maximum federal income tax rate set forth in Section 1 of the Code plus the maximum Illinois income tax rate, in each case as then applicable to individuals and with consideration to any differential tax rate applicable to capital gains or qualified dividends, but without consideration of the effect of deductions, offsets or credits available to the relevant Member or its direct or indirect beneficial owners from other sources. "TAXABLE YEAR" means the calendar year or such other fiscal period as may be required by the Code or the Regulations. "THIRD AMENDED OPERATING AGREEMENT" has the meaning specified in the recitals. "THIRD PARTY" means any Person other than Triarc or any of its directors, officers, employees 5% or greater stockholders or controlled Affiliates or, to the knowledge of Triarc, any Immediate Family member or controlled Affiliate of any of the foregoing. "THIRD PARTY PURCHASER" has the meaning specified in Section 9.7(a). "TRANSFER" means, as to any security or asset (the "SUBJECT PROPERTY"), to sell, directly or indirectly, or in any other way, directly or indirectly transfer, assign, gift, pledge, grant a security interest in, distribute, encumber or otherwise dispose of (including the foreclosure or other acquisition by any lender with respect to the Subject Property pledged to such lender by the holder of the Subject Property), whether directly or indirectly (including by means of a Transfer of any Security issued by a Person that holds, directly or indirectly, an interest in the Subject Property), such Subject Property, either voluntarily or involuntarily and with or without consideration. For the avoidance of doubt, changes in ownership of any direct or indirect holder of Membership Interests (other than changes in ownership in Triarc, which shall be deemed not to constitute a Transfer of Membership Interests) shall be deemed to be a Transfer of Membership Interests. 20 "TRANSFEREE" means any Permitted Transferee or any Person to whom Triarc transfers its Membership Interests. "TRANSFEROR" has the meaning specified in Section 9.2. "TRIARC" has the meaning specified in the recitals, or any Affiliate of Triarc to which Triarc has assigned its rights, interests and obligations under the Purchase Agreement, together with its successors and assigns. "TRIARC AFFILIATED PARTIES" means Triarc and its Affiliates, together with their successors and permitted assigns, to the extent any of the foregoing holds a Membership Interest. "TRIARC CHANGE IN CONTROL" means (i) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than one or more Permitted Holders, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of Triarc, and the Permitted Holders collectively are not the beneficial owners of a greater percentage of the total voting power of the Voting Stock of Triarc than such person or group, (ii) the sale, lease or exchange (in a single or series of related transactions), directly or indirectly, of all or substantially all of the assets of Triarc and its Subsidiaries, taken as a whole (other than a disposition of such assets as an entirety or virtually as an entirety to a Person that is directly or indirectly controlled by one or more Permitted Holders), (iii) the merger, consolidation or combination of Triarc with or into any other Person (other than a Person that is directly or indirectly controlled by one or more Permitted Holders), or of any other Person (other than a Person directly or indirectly controlled by one or more Permitted Holders) with or into Triarc, pursuant to which the outstanding Voting Stock of Triarc is reclassified into or exchanged for cash, securities or other property, other than any such transaction where (A) the outstanding Voting Stock of Triarc is reclassified into or exchanged for Voting Stock of the surviving corporation and (B) the holders of the Voting Stock of Triarc immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Stock of the surviving corporation immediately after such transaction, (iv) individuals who on the Closing Date constituted the board of directors of Triarc (together with any new directors whose election by the board of directors of Triarc or whose nomination by the board of directors of Triarc for election by Triarc's stockholders was approved by a vote of at least a majority of the members of the board of directors of Triarc then in office who either were members of the board of directors of Triarc on the Closing Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the board of directors of Triarc then in office, or (v) the approval by the stockholders of Triarc of a plan of liquidation or dissolution of Triarc. "TRIARC DIRECTOR" has the meaning specified in Section 7.1(a). "TRIARC INTEREST" means the Membership Interests held from time to time by Triarc. 21 "TRIARC KEY PERSON EVENT" shall occur if none of Nelson Peltz, Peter W. May or Edward P. Garden is a director or executive officer of Triarc or a director of the Company. "TRIARC RELATED PARTY TRANSACTION" has the meaning specified in Section 7.7. "UNPAID PREFERRED RETURN" means, with respect to any Member as of any date, the excess of (x) an amount equal to accrued Preferred Return through such date, over (y) distributions to such Member under Section 5.1(a) in respect of Unpaid Preferred Return Amounts through such date. "UNRETURNED PREFERRED CONTRIBUTIONS" means, with respect to any Member as of any date, the excess of (x) an amount equal to Preferred Contributions made by such Member, over (y) distributions to such Member under Section 5.1(a) in respect of Unreturned Preferred Contributions through such date. "VALUATION DATE" has the meaning specified in Section 9.12(a)(i). "VESTED INTERESTS" has the meaning specified in Section 9.12(a)(i). "VOTING MEMBERSHIP INTERESTS" means Class A-1 Interests, the Class A-2 Interests, the Class C Profits Only Interests and such other Classes of Interests that may hereafter be issued pursuant to and in accordance with this Agreement that have a right to vote on all matters submitted to Members. "VOTING STOCK" means, with respect to any Person, the capital stock or other equity or profits interests of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person. For the avoidance of doubt, the Voting Membership Interests shall constitute all of the Voting Stock of the Company. "WITHHOLDING ADVANCES" has the meaning specified in Section 5.5(e). "2004 SHORT YEAR" has the meaning specified in Section 5.5(c). ARTICLE II ORGANIZATION 2.1 ORGANIZATION AND CONTINUATION OF THE COMPANY. The Company has been organized as an Illinois limited liability company by the filing of the Articles of Organization in the office of the Secretary of State of the State of Illinois. Beginning on the effective date of this Agreement, the Company shall continue as a limited liability company under the Act and this Agreement. Upon the effectiveness of this Agreement as provided in Section 11.22, any previous Agreement for the formation, organization and governance of the Company is hereby superseded and amended by substituting this 22 Agreement therefor in its entirety. This Agreement shall not terminate the existence of the Company as a legal entity organized under the Act. 2.2 NAME; BUSINESS CONDUCTED IN THE NAME OF THE COMPANY. The name of the Company shall be "Deerfield & Company LLC" or such other name or names as may be selected by the Board of Directors from time to time. All business of the Company shall be conducted in the name of the Company or such other names that comply with applicable law as the Board of Directors may select from time to time. Title to all assets of the Company shall be taken and held only in the name of the Company. 2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE IN THE UNITED STATES; OTHER OFFICES. The registered office of the Company in the State of Illinois shall be the initial registered office designated in the Articles of Organization or such other office (which need not be a place of business of the Company) as the Board of Directors may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Illinois shall be the initial registered agent designated in the Articles of Organization or such other Person(s) as the Board of Directors may designate from time to time in the manner provided by law. The principal office of the Company in the United States shall be at 8700 West Bryn Mawr, 12th Floor, Chicago, Illinois 60631 or such other place(s) as the Board of Directors may designate from time to time, which need not be in the State of Illinois. The Company may have such other offices as the Board of Directors may designate from time to time. 2.4 PURPOSE AND POWERS. The purpose of the Company is to (a) act as a holding company for its Subsidiaries now or hereafter established that will provide investment advisory and/or Investment Management Services, (b) provide financing and other financial services to its Subsidiaries, and (c) engage in any other lawful business, purpose or activity permitted by the Act; PROVIDED, that in the case of clause (c), so long as Sachs is the Chairman and Chief Executive Officer of the Company and its Subsidiaries, any such business, purpose or activity shall be related to subparagraphs (a) and (b) or resulting from an acquisition by the Company of any Company Opportunity in accordance with Section 6.2; and it shall possess and may exercise all of the powers and privileges granted by the Act or which may be exercised by any Person, together with any powers incidental thereto, to the extent such powers or privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company (including the power and privilege to cease its activities and cancel its Articles of Organization). 2.5 FOREIGN QUALIFICATION GOVERNMENTAL FILINGS. Prior to the Company's conducting business in any jurisdiction other than the State of Illinois, the Company shall comply, to the extent procedures are available, with all requirements necessary to qualify the Company as a foreign limited liability company in each such jurisdiction where foreign qualification is either necessary or appropriate. Each Member shall execute, acknowledge, swear to and deliver all certificates and other instruments conforming to this Agreement that are necessary or appropriate to qualify, or, as appropriate, to continue or terminate such qualification of, the Company as a foreign 23 limited liability company in all such jurisdictions in which the Company may conduct business. 2.6 TERM. The Company's existence commenced on February 24, 1997, the date specified as such in the Articles of Organization; the Company shall continue in existence until terminated in accordance with the provisions of this Agreement or the Act. 2.7 NO STATE-LAW PARTNERSHIP. The Members intend that the Company not be a partnership, limited partnership, or joint venture, and that no Member or Director be a partner or joint venturer of any other Member or Director, for any purposes other than foreign and domestic federal, state, provincial and local income tax purposes, and this Agreement shall not be construed to suggest otherwise. ARTICLE III MEMBERS AND MEMBERSHIP INTERESTS 3.1 MEMBERS. (a) The Members of the Company and their addresses shall be listed on EXHIBIT A, which shall be amended, supplemented or modified from time to time by the Board of Directors to reflect the withdrawal of Members or the admission of additional Members (it being understood that any amendment, supplement or modification to EXHIBIT A shall not be deemed an amendment, supplement or modification to this Agreement). The Members shall constitute a single class or group of members of the Company for all purposes of the Act, except with respect to voting rights (which shall be enjoyed solely by holders of Voting Membership Interests) and as otherwise explicitly provided herein. The Board of Directors shall notify the Members of changes in EXHIBIT A, which shall constitute the record list of the Members for all purposes of this Agreement. (b) Initially, there shall be four Classes of Interests: (i) Class A-1 Interests, (ii) Class A-2 Interests, (iii) Class B Interests and (iv) Class C Profits Only Interests. There shall be such other classes and series of Membership Interests, including the Preferred Membership Interests and Additional Profits Interests, as the Board of Directors may from time to time designate in accordance with the terms of this Agreement. (c) Each Member shall be entitled (i) to participate in the management of the Company to the extent set forth in and in accordance with the terms of this Agreement and the type of Membership Interest held and (ii) to share in distributions and the allocations of profits and losses of the Company in accordance with and to the extent provided by the terms of this Agreement. (d) Members holding Class A-1 Interests, Class A-2 Interests and Class C Profits Only Interests and any other Classes of Interests that constitute 24 Voting Membership Interests shall be entitled to vote, together as a single class, on matters coming before the Members in accordance with the terms of this Agreement. The Class A-1 Interests shall be entitled to a number of votes equal to ten (10) multiplied by the Percentage Interest represented thereby, and the Class A-2 Interests and Class C Profits Only Interests each shall be entitled to a number of votes equal to one (1) multiplied by the Percentage Interest represented thereby. Except as required by non-waivable provisions of the Act or as otherwise expressly provided in this Agreement, no Class of Interests shall have the right to vote as a separate class on any matter. Matters referred to in Sections 15-1(c)(2), (8), (9), (10) and (11) of the Act may be approved by the holders of a majority of the Voting Membership Interests and matters referred to in Section 15-1(c)(1) of the Act may be approved in accordance with Sections 7.2(d) and 11.12. The Class B Interests and any other Classes of Interests that are not Voting Membership Interests shall have no voting rights on any matter except as required by non-waivable provisions of the Act. Class A-1 Interests shall be exchangeable for Class A-2 Interests (on a Percentage Interest for Percentage Interest basis) at any time by the holder thereof, and shall automatically be exchanged for Class A-2 interests if such interests are transferred to a Person other than a Triarc Affiliated Party. 3.2 COMPLIANCE WITH SECURITIES LAWS AND OTHER LAWS AND OBLIGATIONS. Each Member hereby represents and warrants to the Company and acknowledges that (a) (i) it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto, (ii) it is able to bear the economic and financial risk of an investment in the Company for an indefinite period of time, (iii) it is acquiring an interest in the Company for investment only and not with a view to, or for resale in connection with, any distribution to the public any public offering thereof, (iv) it understands that the equity interests in the Company have not been registered under the securities laws of any jurisdiction and cannot be disposed of unless they are subsequently registered and/or qualified under applicable securities laws or an exemption available from registration and the provisions of this Agreement have been complied with and (v) it has full right, authority, power and legal capacity to enter into this Agreement, and (b) except with respect to SCM, Roberts and Triarc, (i) the execution, delivery and performance of this Agreement have been duly authorized by such Member (in the case of a Member that is not a natural person) and do not require it to obtain any consent or approval that has not been obtained and do not contravene or result in a default under any provision of any existing law or regulation applicable to it, any provision of its charter, by-laws or other governing documents (if applicable) or any agreement or instrument to which it is a party or by which it is bound and (ii) this Agreement has been duly executed and delivered by such Member, and constitutes a valid and binding obligation of such Member enforceable against such Member in accordance with its terms, except as (A) limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (B) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought. 25 3.3 ISSUANCE OF ADDITIONAL MEMBERSHIP INTERESTS. (a) Subject to Section 9.9 and the other provisions of this Agreement, the Company may issue new or additional Membership Interests, including any Preferred Membership Interests to any Person and any Membership Interests that would be characterized as "profits interests" for U.S. federal income tax purposes to Company employees or others who provide services to or on behalf of the Company (such profits interests, "ADDITIONAL PROFITS INTERESTS"), with such obligations to make Capital Contributions and such special rights and preferences as to distributions, voting and other matters, and in such separate classes and series, as may be approved by the Board of Directors, and EXHIBIT A and this Agreement shall be amended appropriately to reflect the same (without requiring the consent of any Member). The issuance of new or additional Membership Interests that have corresponding Percentage Interests shall dilute on a PRO RATA basis the aggregate Percentage Interest of the Membership Interests outstanding immediately prior to such issuance. The issuance of new or additional Voting Membership Interests shall dilute on a PRO RATA basis the voting power of the Voting Membership Interests outstanding immediately prior to such issuance. (b) The Company shall not recognize any potential new Member unless and until (i) such Person shall have executed and delivered a counterpart of this Agreement (as modified or amended from time to time), (ii) such Person shall have executed and delivered a document setting forth its notice address and such other instruments as the Board of Directors, in its discretion, may deem necessary to confirm the undertaking of such Person to be bound by all the terms and provisions of this Agreement and (iii) such Person has made payment in full for its Membership Interests. (c) Only the Persons named in EXHIBIT A of this Agreement or subsequently admitted to the Company as Members as provided in this Section 3.3 shall be considered Members, and the Company need deal only with the Members so named and so admitted. The Company shall not be required to deal with any other Person by reason of a Transfer by a Member, except as otherwise provided in this Agreement. 3.4 WITHDRAWAL OF MEMBERS. Except as expressly provided in Sections 9.10, 9.11 and 9.12 or in connection with a Transfer of all of the Membership Interests held by any Member that is not prohibited by this Agreement, no Member shall have the right to withdraw from the Company except with the consent of the Board of Directors and upon such terms and conditions as may be specifically agreed upon between the withdrawing Member and a majority of the Board of Directors (which majority, if the withdrawing Member is a Triarc Affiliated Party, must include at least one Authorized Sachs Director unless there are no Sachs Directors at such time). The provisions hereof with respect to distributions upon withdrawal are exclusive, and no Member shall be entitled to claim any further or different distribution upon withdrawal under Sections 35-60 or 35-65 of the Act or otherwise. 3.5 LIABILITY TO THIRD PARTIES. No Member or Director shall have any personal obligation for any obligations, losses, debts, claims, expenses or encumbrances (collectively, "liabilities") of or against the Company or its assets, whether such liabilities 26 arise in contract, tort, or otherwise, except to the extent that any such liabilities are expressly assumed in writing by such Member or Director or as otherwise provided in this Agreement. 3.6 POWERS. The Board of Directors shall be responsible for the management of the business and affairs of the Company, except as such matters are expressly reserved to the Members herein or by non-waivable provisions of the Act. 3.7 BANK ACCOUNTS. From time to time, the Board of Directors may designate a Person or Persons, whether or not such Persons be Members, to open and maintain one or more bank accounts; rent safety deposit boxes or vaults; sign checks, written directions, or other instruments to withdraw all or any part of the funds belonging to the Company and on deposit in any savings account or checking account; negotiate and purchase certificates of deposit; obtain access to the Company safety deposit box or boxes; and generally sign such forms on behalf of the Company as may be required to conduct the banking activities of the Company. 3.8 ACTIONS BY THE MEMBERS; MEETINGS; QUORUM; MAJORITY. (a) All actions of the Members having a right to vote shall be taken by a vote of such Members, and each Member having a right to vote shall have a vote in proportion to its respective Voting Membership Interests percentage at the time of the action taken. For all purposes of this Agreement and the Articles of Organization, a Member having the right to vote must vote its entire Voting Membership Interests in the same manner and may not split votes. The Members may vote, approve a matter or take any action by the vote of Members at a meeting, in person or by proxy. No provision of this Section 3.8(a) shall be read or understood to grant voting rights to holders of Class B Interests or any other Members that do not hold Voting Membership Interests. (b) For any meeting of any class of Members, the presence in person or by proxy of Members holding a majority of the Voting Membership Interests held by such class at the time of the action taken constitutes a quorum for the transaction of business. Except (i) as otherwise required by law and (ii) as otherwise expressly provided in this Agreement, any action required to be approved by the Members shall be deemed approved if such action receives the affirmative vote of Members holding a majority in interest of the Voting Membership Interests. 3.9 ACTION BY WRITTEN CONSENT. Any action may be taken by the Members without a meeting if authorized by the written consent of Members holding the requisite percentage of Voting Membership Interests required by this Agreement to approve the action. 3.10 TELEPHONIC MEETINGS. Meetings, if called, may be held by conference telephone call, in person, or in person with any number of Members entitled to vote participating by conference telephone call. 27 3.11 PLACE OF MEETINGS OF MEMBERS. Any annual or special meetings of the Members holding Voting Membership Interests shall be held at any place designated by a majority of the Directors then in office, or, if no such place is designated, then at the principal executive office of the Company. 3.12 NOTICE OF ANNUAL MEETINGS. Written notice of any annual meeting, signed by a majority of the Directors then in office, or by such other Person or Persons as the Board of Directors shall designate, shall be given to each Member entitled to vote at the meeting, either personally, by mail or by other means of written communication, charges prepaid, addressed to each Member at its address appearing on the books of the Company or disclosed to the Company for the purpose of notice. All such notices shall be sent to each Member entitled thereto not less than ten days nor more than 60 days before such annual meeting, and shall specify the place, the day and the hour of such meeting. 3.13 SPECIAL MEETINGS. Special meetings of the Members, for any purpose or purposes, may be called at any time by a majority of the Directors then in office or by Members holding a majority in interest of the Voting Membership Interests. Except as expressly provided by statute, notice of such special meetings shall be given to each Member entitled to vote at the meeting not less than ten days nor more than 30 days before such meeting, and otherwise in the same manner as for annual meetings of Members. Notices of any special meetings shall specify, in addition to the place, day and hour of such meetings, the purpose or purposes for which the meeting is called. 3.14 WAIVER OF NOTICE. The actions taken at any meeting of the Members without notice shall be as valid as though taken at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the Members entitled to vote and not present signs a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the records or made a part of the minutes of the meeting. 3.15 ORGANIZATION. At each meeting of Members, the chairman, or if there is no chairman or if there be one and the chairman is absent, a Director designated by a majority of the Directors then in office, shall act as chairman of the meeting. The secretary, or if there is no secretary or if there be one and the secretary is absent, any person chosen by the presiding chairman of the meeting, shall act as secretary of the meeting. 3.16 ADJOURNED MEETINGS AND NOTICE THEREOF. Any Members' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the Members present in person or represented by proxy and entitled to vote thereat, but in the absence of a quorum no other business may be transacted at any such meeting. Other than by announcement at the meeting at which such adjournment is taken, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at any adjourned meeting. However, when any Members' meeting, either 28 annual or special, is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. 3.17 AUTHORITY. No Member shall have authority to act for and on behalf of or to bind the Company solely by virtue of being a Member of the Company and in the absence of a resolution of the Board of Directors expressly authorizing the same, a Member, in its capacity as such, shall not execute any agreement or enter into any understanding, oral or written, in the name of, on behalf or otherwise binding the Company. A Member who breaches this provision shall be liable to the Company and the other Members for such breach. ARTICLE IV CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS 4.1 CAPITAL ACCOUNTS. (a) A separate capital account (a "CAPITAL ACCOUNT") shall be maintained for each Member in accordance with Regulation section 1.704-1(b)(2)(iv), and this Section 4.1 shall be interpreted and applied in a manner consistent therewith. Each Member's Capital Account shall be increased by the amount of: (A) such Member's cash contributions, and fair market value (as reasonably determined in good faith by the Board of Directors) of property contributions, to the capital of the Company pursuant to Section 4.2; (B) any Net Income or other item of income or gain allocated to such Member pursuant to Sections 5.3 or 5.4; and (C) Company liabilities, if any, assumed by such Member or secured, in whole or in part, by any Company assets that are distributed to such Member. Each Member's Capital Account shall be decreased by the amount of: (A) cash and the fair market value (as reasonably determined in good faith by the Board of Directors) on the date of distribution of any other Company property distributed to such Member pursuant to Sections 5.1 and 5.2 and Article X; (B) any Net Loss or other item of loss or deduction allocated to such Member pursuant to Sections 5.3 or 5.4; and (C) liabilities, if any, of such Member assumed by the Company or secured, in whole or in part, by any assets contributed to the Company by such Member. The Company shall also maintain a separate sub-Capital Account with respect to each Member's Classes of Interests, which shall be maintained in accordance with the principles governing the Members' Capital Accounts. (b) As of the Closing Date, the Capital Account balance of each Member with respect to Class A Interests and Class B Interests shall be an amount, determined separately with respect to each such Class of Interest, equal to the product of (A) the Closing Date Value, and (B) a fraction, the numerator of which is the Percentage Interest with respect to such Class of Interest, and the denominator of which is the aggregate Percentage Interests with respect to all Class A Interests and Class B Interests of the Members. As of the Closing Date, the Capital Account balance of each Member with respect to Class C Profits Only Interests shall be zero (0). The Capital Account balances determined pursuant to this Section 4.1(b) shall be set forth on EXHIBIT B (as amended from time to time to take into account adjustments to the Closing Date Value). 29 (c) Notwithstanding any provision contained herein to the contrary, no Member shall be required to restore any negative balance in its Capital Account. 4.2 CONTRIBUTIONS. The amount of contributions to the capital of the Company that have been made in respect of the outstanding Membership Interests through the date hereof (herein "CAPITAL CONTRIBUTIONS") are as specified on EXHIBIT A. The amount of all cash and fair market value (as reasonably determined in good faith by the Board of Directors) of non-cash Capital Contributions made by Members shall be set forth on EXHIBIT A. Additional Capital Contributions to the Company shall be made in accordance with Section 3.3 and subject to the other provisions of this Agreement. No Member holding Class A Interests, Class B Interests or Class C Profits Only Interests shall at any time be required to make any additional Capital Contributions to the Company with respect to such Membership Interests. Notwithstanding anything to the contrary herein, as of the Closing Date, Triarc shall succeed to the amount of Capital Contributions associated with the Purchased Interests as set forth on EXHIBIT A. No Member shall be entitled to any interest or compensation with respect to its Capital Contribution or any services rendered on behalf of the Company except as specifically provided in this Agreement or approved by the Board of Directors. No Member shall have any liability for the repayment of the Capital Contribution of any other Member and each Member shall look only to the assets to the Company for return of its Capital Contribution. ARTICLE V DISTRIBUTIONS 5.1 DISTRIBUTION OF COMPANY FUNDS. (a) Subject to Section 10.3, the Company shall make distributions to the Members holding Preferred Membership Interests in respect of Unpaid Preferred Return amounts and Unreturned Preferred Contribution amounts as required by the terms of their Preferred Membership Interests. (b) Subject to Sections 5.1(a) and 10.3, on a quarterly basis the Company shall distribute an amount to the Members computed separately with respect to each Class of Interests held by a Member PRO RATA in proportion to the excess, if any, of (x) Tax Liability with respect to each Class of Interests for the Taxable Year (or portion thereof) that includes such quarter, over (y) the aggregate amount distributed to each such Member with respect to such Class of Interests for the Taxable Year that includes such quarter pursuant to this Section 5.1 (other than Section 5.1(a)) ("TAX ADVANCES"); PROVIDED, HOWEVER, that, if the Closing Date occurs after July 16, 2004, no Tax Advances shall be made by the Company during the period commencing on the Closing Date and ending on March 1, 2005; PROVIDED, FURTHER that if the Closing Date occurs after July 16, 2004 but before January 1, 2005, then on March 1, 2005, the Company shall, to the extent of Available March 1, 2005 Cash, distribute an amount to the Members computed separately with respect to each Class of Interests held by a Member in proportion to, and 30 to the extent of, the Tax Liability with respect to each Class of Interests for the tax period beginning on the date immediately following the Closing Date and ending on December 31, 2004, and such distributed amounts shall be treated as Tax Advances for all purposes of this Agreement. All Tax Advances made on behalf of a Member with respect to such Class of Interests shall reduce the amount of the next succeeding distribution or distributions which would otherwise have been made to such Member with respect to such Class of Interests (including any distributions made pursuant to Sections 9.10(e) and 9.11(g) but excluding distributions under Section 5.1(a)) or, if such distributions are not sufficient for that purpose, shall reduce the proceeds of liquidation otherwise distributable under Sections 10.3(e) and 10.3(f) with respect to such Class of Interests to such Member. To the extent that an amount otherwise distributable to a Member is so applied, it shall be treated for all purposes hereof as if such amount had actually been distributed to such Member with respect to such Class of Interests pursuant to Sections 5.1(c), 9.10(e), 9.11(g), 10.3(e) or 10.3(f), as the case may be. (c) Subject to Sections 5.1(a), 5.1(b) and 10.3 and subject to any limitations or restrictions contained in any financing arrangements of the Company or any of its Subsidiaries (which limitations or restrictions the Board of Directors shall instruct management of the Company and its Subsidiaries to use commercially reasonable efforts to attempt to limit in connection with entering into any such financing arrangements) or applicable law (including the Act): (i) During such time as a Sachs Affiliated Party is a Member, within 90 days after the end of each fiscal year of the Company, the Company shall distribute, PRO RATA to the Members with respect to each Class of Interests in proportion to their Percentage Interests, 100% of the Available Net Cash of the Company for the fiscal year most recently completed; PROVIDED, that to the extent any portion of such Available Net Cash was invested by the Company or any of its Subsidiaries in Permitted Investments, the Company instead shall distribute to the Members with respect to each Class of Interests (to the extent such Member is permitted under applicable law to receive such in-kind distribution) such Member's PRO RATA portion of such Permitted Investments (PRO RATA among all classes and types of such Permitted Investments) with respect to such Class of Interests in proportion to their Percentage Interests and, if such Member is not permitted under applicable law to receive such in-kind distribution or if it would be more practicable for the Company to liquidate any such Permitted Investments prior to such distribution, the Company shall seek to liquidate the Permitted Investments that would have been distributed to such Member and promptly thereafter distribute to such Member the net proceeds therefrom; and (ii) the Company may make further distributions to the Members in such amounts and at such times as determined by the Board of Directors PRO RATA to the Members with respect to each Class of Interests in proportion to their Percentage Interests. 31 Distributions under this Section 5.1(c) to Members that hold Profits Interests shall be limited as reasonably determined in good faith by the Board of Directors (including by limiting such distributions to the Company's net profits earned subsequent to the issuance of such Profits Interest) so that in the reasonable, good faith judgment of the Board of Directors such Profits Interest qualifies as a "profits interest" for U.S. federal tax purposes (and any amounts that would have been distributed with respect to such Profits Interest but for this sentence shall instead be distributed to the Members with respect to each Class of Interests in proportion to their Percentage Interests, subject to the limitation provided in this sentence) ("PROFITS INTEREST LIMITATION"). Notwithstanding anything to the contrary set forth in this Agreement, if at or prior to the time a distribution to a Member (the "SET-OFF MEMBER") under Sections 5.1(c)(i) or 5.1(c)(ii) is to be made, Triarc has notified the Board of Directors and such Member in writing that such Member owes a payment to an Indemnified Purchaser Party (as defined in the Purchase Agreement) in respect of such Member's indemnification obligations under the Purchase Agreement and the provisions of Section 11.9 of the Purchase Agreement are applicable to such payment, the Company, in lieu of making such distribution to such Member, shall instead make such distribution to Triarc or to such other Person as directed in writing by Triarc to the extent of the amount of such payment then due and owing (a "SET-OFF PAYMENT"); PROVIDED, however, that in the case of a judgment or award that is not final and is subject to appeal and such Member has indicated in writing to the Board of Directors that it intends to pursue an appeal (a "PRELIMINARY JUDGMENT"), such Set-Off Payment shall be deposited into an account designated by an escrow agent to be mutually reasonably agreed upon by such Member or, if the indemnification amount is owed by more than one Seller (as defined in the Purchase Agreement), the Sellers Representative (as defined in the Purchase Agreement), and Triarc and on customary terms and conditions mutually reasonably acceptable to such Member or, if the indemnification amount is owed by more than one Seller (as defined in the Purchase Agreement), the Sellers Representative, and Triarc. Upon entry of a final non-appealable judgment or award by a court of competent jurisdiction, arbitrator or other tribunal with respect to such Preliminary Judgment (a "FINAL JUDGMENT"), any Set-Off Payment deposited into such an account shall be either paid to such Member or to Triarc in accordance with such Final Judgment. The Members agree and acknowledge that any Set-Off Payment shall be treated as a distribution to the Set-Off Member for all purposes of this Agreement, and shall not reduce Triarc's Capital Account balance. (d) No Member shall be entitled to any distribution or payment with respect to its interest in the Company upon the resignation or withdrawal of such Member except as otherwise provided in this Agreement. No Member shall be entitled to any distribution under this Agreement with respect to a Profits Interest to the extent such distribution would create, or increase, a deficit in such Member's sub-Capital Account balance with respect to such Profits Interest. Distributions may be limited and repayable as provided in the Act or other applicable law. 5.2 DISTRIBUTION OF ASSETS IN KIND. Except as provided in Sections 5.1(c)(i), 9.10(e) or 9.11(g), no Member shall have the right to require any distribution of any assets of the Company to be made in whole or in part in-kind. No Member may be compelled to accept from the Company a distribution of any asset in-kind in lieu of a 31 proportionate distribution of cash being made to the other Members. If the Board of Directors determines to distribute assets of the Company in-kind, such assets shall be distributed on the basis of their respective fair market values as reasonably determined in good faith by the Board of Directors. Any Member entitled to any interest in such assets shall, unless otherwise determined by the Board of Directors, receive separate assets of the Company, and not an interest as tenant-in-common with other Members so entitled in each asset being distributed. Except as provided in Sections 5.1(c)(i), 9.10(e) or 9.11(g), distributions in-kind need not be made on a PRO RATA basis but may be made on any basis which the Board of Directors determines in good faith to be reasonable under the circumstances. 5.3 ALLOCATIONS OF NET INCOME AND NET LOSS. (a) NET INCOME AND NET LOSS. Except as otherwise provided in this Agreement, Net Income and Net Loss (and, to the extent necessary, individual items of income, gain, loss, deduction or credit) of the Company shall be allocated among the Members in a manner such that, after giving effect to the special allocations set forth in Section 5.4, the Capital Account of each Member, immediately after making such allocation, is, as nearly as possible, equal (proportionately) to (i) the distributions that would be made to such Members pursuant to Section 10.3 if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value, all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Carrying Value of the assets securing such liability), and the net assets of the Company were distributed in accordance with Section 10.3 to the Members immediately after making such allocation, MINUS (ii) such Member's share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets. (b) For United States federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Members in accordance with the allocations of the corresponding items for Capital Account purposes under Sections 5.3(a) and 5.4, except that items with respect to which there is a difference between adjusted tax basis and Carrying Value will be allocated in accordance with Section 704(c) of the Code, the Regulations thereunder and Regulation section 1.704-1(b)(4)(i) in a manner determined by the Board of Directors. 5.4 SPECIAL ALLOCATIONS. (a) MINIMUM GAIN CHARGEBACK. Notwithstanding any other provision of Section 5.3, if there is a net decrease in Company Minimum Gain or Member Nonrecourse Debt Minimum Gain (determined in accordance with the principles of Regulation sections 1.704-2(d) and 1.704-2(i)) during any Company Taxable Year, the Members shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to their respective shares of such net decrease during such year, determined pursuant to Regulation sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Regulation section 1.704-2(f). This Section 5.4(a) is intended to comply with the 33 minimum gain chargeback requirements in such Regulation sections and shall be interpreted consistently therewith; including that no chargeback shall be required to the extent of the exceptions provided in Regulation sections 1.704-2(f) and 1.704-2(i)(4). (b) QUALIFIED INCOME OFFSET. In the event any Member unexpectedly received any adjustments, allocations or distributions described in Regulation section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit balance in its Capital Account created by such adjustments, allocations or distributions as promptly as possible. This Section 5.4(b) is intended to comply with the "qualified income offset" requirement in such Regulation section and shall be interpreted consistently therewith. (c) GROSS INCOME ALLOCATIONS. In the event any Member has a deficit Capital Account at the end of any fiscal year which is in excess of the sum of (i) the amount such Member is obligated to restore, if any, pursuant to any provision of this Agreement, and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Regulation sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; PROVIDED, that an allocation pursuant to this Section 5.4(c) shall be made only if and to the extent that a Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in Section 5.3 and this Section 5.4 have been tentatively made as if Section 5.4(b) and this Section 5.4(c) were not in this Agreement. (d) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions shall be allocated to the Members in proportion to their Percentage Interests. (e) MEMBER NONRECOURSE DEDUCTIONS. Member Nonrecourse Deductions for any taxable period shall be allocated to the Member who bears the economic risk of loss with respect to the liability to which such Member Nonrecourse Deductions are attributable in accordance with Regulation section 1.704-2(j). (f) REGULATORY COMPLIANCE. The provisions of Sections 4.1, 5.2 and 5.3 and this Section 5.4 and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulation section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Regulation. The Board of Directors shall be authorized to make appropriate amendments to the allocations of items pursuant to Section 5.3 if necessary in order to comply with Section 704 of the Code or applicable Regulations thereunder; PROVIDED, that no such change shall have an adverse effect upon the amount distributable to any Member pursuant to this Agreement. (g) CURATIVE ALLOCATIONS. The allocations set forth in Sections 5.4(a), 5.4(b), 5.4(c), 5.4(d) and 5.4(e) (the "REGULATORY ALLOCATIONS") are intended to comply with certain requirements of the Regulations. The Board of Directors is authorized to offset all Regulatory Allocations either with other Regulatory Allocations 34 or with special allocations of income, gain, loss or deductions pursuant to this Section 5.4(g) in whatever manner it reasonably and in good faith determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of this Agreement and all items of income, gain, loss or deduction were allocated pursuant to Section 5.3. In exercising its discretion under this Section 5.4(g), the Board of Directors shall take into account future Regulatory Allocations under Section 5.4(a) that, although not yet made, are likely to offset other Regulatory Allocations made under Sections 5.4(d) and 5.4(e). (h) ADJUSTMENTS OF CAPITAL ACCOUNTS. The Capital Accounts of the Members may at the discretion of, and in the manner reasonably determined in good faith by, the Board of Directors, be adjusted in accordance with Regulation section 1.704-1(b)(2)(iv)(f), and thereafter maintained in accordance with Regulation section 1.704-1(b)(2)(iv)(g), to reflect the fair market value of Company property as reasonably determined in good faith by the Board of Directors whenever an interest in the Company is relinquished to the Company, upon the issuance of a new or additional interest for more than a de minimis capital contribution to the Company, upon the issuance of any Profits Interests, or upon a liquidation of the Company, and shall be adjusted in accordance with Regulation section 1.704-1(b)(2)(iv)(e) in the case of a distribution of more than a de minimis amount of property (other than cash). 5.5 CERTAIN TAX MATTERS.(a) The Members agree and acknowledge that the "tax matters partner" of the Company within the meaning of Section 6231(a)(7) of the Code (the "TAX MATTERS PARTNER") shall be Triarc for all taxable years of the Company that end after the close of the 2004 Short Year, and that Sachs (as the sole grantor of the Gregory H. Sachs Revocable Trust under Declaration of Trust dated April 24, 1998, which trust is the sole member of SCM, a disregarded entity for United States federal tax purposes) has been, and shall be, the Tax Matters Partner of the Company for all taxable years of the Company that end on or before the close of the 2004 Short Year (such taxable years, "PRE-CLOSING TAX PERIOD"). The Tax Matters Partner shall have the authority to represent the Company in connection with any audit, claim for refund or administrative or judicial proceeding involving any asserted tax liability or refund with respect to the Company or the Members in their capacity as such (any such audit, claim for refund, or proceeding relating to an asserted tax liability or refund referred to herein as a "CONTEST"); PROVIDED, that, with respect to any Contest related to a Pre-Closing Tax Period, Triarc shall have the right to participate in such Contest at its own expense, and Sachs shall not be able to settle, compromise and/or concede any portion of such Contest that is reasonably likely to give rise to gain or gross income (or loss of deduction or adverse effect on any tax attribute), including any timing differences, with respect to Triarc, or of the Company for any taxable year that ends after the close of the 2004 Short Year in excess of $500,000, without the consent of Triarc, which consent shall not be unreasonably withheld or delayed; PROVIDED, further, that with respect to any Contest related to any taxable year of the Company that begins after the close of the 2004 Short Year, Triarc shall consult with Sachs regarding the settlement, compromise and/or concession any portion of such Contest that is reasonably likely to have a material effect on the tax liability of any Sachs Affiliated Party or any Roberts Affiliated Party. Triarc 35 shall be entitled to be reimbursed by the Company for all costs and expenses incurred by it as the Tax Matters Partner in connection with any administrative or judicial proceeding affecting tax matters of the Company and the Members in their capacity as such and to be indemnified by the Company (solely out of Company assets) with respect to any action brought against it in connection with any judgment in or settlement of any such proceeding. Sachs shall not be entitled to be reimbursed by the Company for any costs or expenses incurred by him as the Tax Matters Partner in connection with any administrative or judicial proceeding affecting tax matters of the Company and the Members in their capacity as such, or to be indemnified by the Company with respect to any action brought against him in connection with any judgment in or settlement of any such proceeding. Any Member who enters into a settlement agreement with respect to any Company item shall notify the Tax Matters Partner of such settlement agreement and its terms within 30 days after the date of settlement. This provision shall survive any termination of this Agreement. (b) Within 45 days after the end of each Taxable Year, or as soon as reasonably practicable thereafter, the Company shall furnish to each Member such information (including completed schedule K-1s) regarding the amount of such Member's share in the Company's taxable income or loss for such year, in sufficient detail to enable such Member to prepare its United States federal, state and other tax returns. In addition, the Company shall timely furnish to each Member sufficient information as is reasonably requested to enable such Member to comply with any estimated income tax payment requirements. (c) The Members agree and acknowledge that the Company's 2004 Taxable Year for U.S. federal income tax purposes shall close on the date of Triarc's purchase of the Purchased Interests under Section 708 of the Code ("2004 SHORT YEAR"). The Company shall cause an election under Section 754 of the Code (and any comparable provision of state, local or foreign law) to be in effect with respect to the 2004 Short Year, and neither the Company nor any Member shall take any position inconsistent therewith for any tax purposes, unless otherwise required by a change in law or a final determination in a judicial proceeding. (d) Sachs shall prepare and file all income tax returns and all amended income tax returns (including IRS Form 1065 and related schedules) for all Taxable Years that end on or before the close of the 2004 Short Year in the ordinary course of business and consistent with past practice, unless otherwise approved by the Board of Directors; PROVIDED, that in doing so, Sachs shall not be permitted to take any position in any such income tax return or amended income tax return which could affect the consequences of the Company's election under Section 754 of the Code with respect to Triarc's Purchased Interests, without the consent of Triarc, which consent shall not be unreasonably withheld or delayed; PROVIDED FURTHER, that in doing so, Sachs shall not be permitted to amend any income tax return if such amendment is reasonably likely to affect the tax liability of Triarc, or of the Company, for any taxable year that ends after the close of the 2004 Short Year, without the consent of Triarc, which consent shall not be unreasonably withheld or delayed. 36 (e) TAX WITHHOLDING. To the extent the Company is required by applicable law to withhold or to make tax payments on behalf of or with respect to any Member (E.G., backup withholding) ("WITHHOLDING ADVANCES"), the Company may withhold such amounts and make such tax payments as so required. All Withholding Advances made on behalf of a Member, plus interest thereon at a rate equal to the prime rate, as announced by Citibank, N.A., plus 2%, shall (i) be paid on demand by the Member on whose behalf such Withholding Advances were made (it being understood that no such payment shall increase such Member's Capital Contributions or Capital Account balance), or (ii) with the consent of the Board of Directors, in its sole discretion, be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Member or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Member. If repayment of a Withholding Advance is made by a Member pursuant to clause (ii), such Member shall not be required to pay any interest thereon. Notwithstanding the foregoing, whenever repayment of a Withholding Advance by a Member is made as described in clause (ii), for all other purposes of this Agreement such Member shall be treated as having received all distributions unreduced by the amount of such Withholding Advance. Each Member hereby agrees to fund, and otherwise reimburse the Company for any liability with respect to Withholding Advances (including interest thereon) required or made on behalf of or with respect to such Member (including penalties imposed with respect thereto) (it being understood that no such funding or reimbursement shall increase such Member's Capital Contributions or Capital Account balance). ARTICLE VI CONFLICTS OF INTEREST; COMPANY OPPORTUNITIES 6.1 TRANSACTIONS WITH INTERESTED PERSONS. Except as otherwise provided in this Agreement and subject to Section 6.2 and Section 7.7, (i) no contract or transaction between the Company or any of its Subsidiaries and one or more of its Members or Directors, or between the Company or any of its Subsidiaries and any other Person in which one or more of its Members or Directors have a financial interest or are directors, partners, managers, advisers, Directors, officers, shareholders or members, shall be prohibited or deemed to be void or voidable solely because of the financial interest of the Member(s) or Director(s) in such contract or transaction and (ii) the fact that a Director, a Member, or any Affiliate of either of them directly or indirectly owns an interest in, has any right to receive any payment with respect to, or is otherwise connected with any Person with which the Company or any of its Subsidiaries has dealings, shall not preclude such dealings or make them void or voidable; PROVIDED, HOWEVER, that such interest shall be disclosed to the Company and each of the other Directors. Neither the Company or any of its Subsidiaries nor any Member shall have any rights in or to such dealings or any payments or profits derived therefrom. Except as provided in Sections 6.2 and 11.2, no Director or Member or any of their respective Affiliates shall be obligated to present any particular investment or business opportunity to the Company even if it is of a character which, if presented, could be taken by the 37 Company, and each of them shall have the right to take for its own account or to recommend to other individuals or entities any such particular investment or business opportunity. 6.2 COMPANY OPPORTUNITIES. (a) In the event that Triarc or any of its controlled Affiliates desires to pursue a Company Opportunity, Triarc shall, prior to engaging in, or entering into any agreement in principle with respect to the material terms and conditions relating to, such Company Opportunity, deliver a written notice to the Company and Sachs presenting such Company Opportunity to the Company. Such written notice shall include a reasonably detailed summary of the Company Opportunity, including (i) the material terms and conditions of the Company Opportunity and (ii) the estimated capital required to pursue such Company Opportunity and the proposed financing plan related thereto, in each case, as is known by Triarc at such time. Triarc shall promptly deliver to the Company and Sachs all term sheets or summaries of the material terms of such Company Opportunity exchanged by the parties to such Company Opportunity. Triarc shall notify the Company and Sachs from time to time of any subsequent material developments with respect to such Company Opportunity, including any changes to the material terms and conditions thereof and the proposed financing plan therefor. Triarc shall provide the Company and Sachs with written notice of the anticipated date on which Triarc expects to commence engaging in such Company Opportunity or execute and deliver the definitive agreements related to such Company Opportunity no earlier than ten Business Days prior to such anticipated date (the "FINAL NOTICE"). The Company shall have the right to pursue or decline such Company Opportunity, together with the proposed financing plan related thereto (whether in the form of the incurrence by the Company or any of its Subsidiaries of any Indebtedness or the issuance by the Company or any of its Subsidiaries of any Securities), exercisable by Sachs on behalf of the Company, by delivering written notice of acceptance thereof (the "ACCEPTANCE NOTICE") or a written notice of rejection thereof (the "REJECTION NOTICE"), as the case may be, to Triarc at any time prior to five Business Days after receipt of the Final Notice. Notwithstanding anything to the contrary set forth in this Agreement, Triarc shall be free to pursue such Company Opportunity outside of the Company, and to enter into definitive agreements related to such Company Opportunity, on terms and conditions taken as a whole that are not materially more favorable to Triarc than those set forth or described in the Final Notice if: (i) Sachs fails to deliver an Acceptance Notice or delivers a Rejection Notice, in either case in accordance with Section 6.2(a); or (ii) at any time after Sachs delivers an Acceptance Notice in accordance with Section 6.2(a) and prior to five Business Days after receipt of the Final Notice, Sachs delivers a Rejection Notice. (b) In the event that Triarc or any of its controlled Affiliates consummates an acquisition of any Person (whether pursuant to (A) the acquisition of the direct or indirect beneficial ownership of at least 20% of the Voting Stock of, after giving 38 effect to which no "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) would be the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of a greater percentage of such Voting Stock or have the ability to elect (by contract or otherwise) a greater number of directors (or the equivalent) of such Person than would be enjoyed, directly or indirectly, by Triarc and its controlled Affiliates, (B) the acquisition of the ability (whether by ownership of Voting Stock or by contract) to elect a majority of the board of directors (or the equivalent) of, (C) the acquisition (in one transaction or a series of related transactions) of all or a substantial part of the assets of, or (D) a merger, consolidation or other business combination with, such Person) that is, but is not primarily, engaged in the provision of Investment Management Services, Triarc shall deliver a written notice to the Company and Sachs offering the Company the right to negotiate to acquire the Investment Management Services business of such Person on such terms and conditions as may be mutually agreed upon by Triarc and Sachs (on behalf of the Company) to the extent Triarc or its controlled Affiliate is able to cause such Person to do so. Within five Business Days after delivery of such notice, Sachs (on behalf of the Company) shall deliver a written notice to Triarc indicating whether or not the Company is interested in acquiring such business. If the Company is so interested, Triarc and Sachs (on behalf of the Company) shall negotiate in good faith the terms and conditions of the acquisition of such business by the Company for a period of 45 days, which period may be mutually extended for a reasonable period at the request of Sachs, if Triarc and Sachs (on behalf of the Company) continue to negotiate in good faith at the end of such period. Triarc and its controlled Affiliates shall have no further obligations under this Section 6.2(b) if Triarc and Sachs (on behalf of the Company) are not able to mutually agree on such terms and conditions prior to the end of such 45 day period (as may be extended). (c) Triarc's obligations pursuant to Sections 6.2(a) and 6.2(b) shall cease upon the earliest to occur of (i) a Triarc Change in Control, (ii) a Triarc Key Person Event, (iii) the Sachs Directors ceasing to have the separate right to approve any Extraordinary Matter under Section 7.2(d) and (iv) Sachs ceasing to be the Chairman and Chief Executive Officer of the Company and its Subsidiaries. If after Triarc's obligations pursuant to Sections 6.2(a) and 6.2(b) terminate, Triarc (or any officer, employee, director, agent, stockholder, member, partner or other Affiliate of Triarc) acquires knowledge of a Company Opportunity, the Company shall have no interest in such Company Opportunity and no expectancy that such Company Opportunity be offered to the Company, any such interest or expectancy being hereby renounced, so that, as a result of such renunciation, and for the avoidance of doubt, such Person (i) shall have no duty to communicate or present such Company Opportunity to the Company, (ii) shall have the right to hold any such Company Opportunity for its (and/or its officers', directors', agents', stockholders', members', partners' or Affiliates') own account or to recommend, sell, assign or transfer such Company Opportunity to Persons other than the Company, and (iii) shall not breach any fiduciary duty to the Company, in such Person's capacity as a Member, manager, Director or officer of the Company, by reason of the fact that such Person pursues or acquires such Company Opportunity for itself, directs, sells, assigns or transfers such Company Opportunity to another Person, does not communicate information regarding such Company Opportunity to the Company, or operates, engages in or is otherwise involved with such Company Opportunity. 39 (d) If Triarc (or any officer, employee, director, agent, stockholder, member, partner or other Affiliate of Triarc) acquires knowledge of a potential transaction, investment or matter other than a Company Opportunity (each, an "OTHER OPPORTUNITY"), the Company shall have no interest in such Other Opportunity and no expectancy that such Other Opportunity be offered to the Company, any such interest or expectancy being hereby renounced, so that, as a result of such renunciation, and for the avoidance of doubt, such Person (i) shall have no duty to communicate or present such Other Opportunity to the Company, (ii) shall have the right to hold any such Other Opportunity for its (and/or its officers', directors', agents', stockholders', members', partners' or Affiliates') own account or to recommend, sell, assign or transfer such Other Opportunity to Persons other than the Company, and (iii) shall not breach any fiduciary duty to the Company, in such Person's capacity as a Member, manager, Director or officer of the Company, by reason of the fact that such Person pursues or acquires such Other Opportunity for itself, directs, sells, assigns or transfers such Other Opportunity to another Person, does not communicate information regarding such Other Opportunity to the Company, or operates, engages in or is otherwise involved with such Other Opportunity. ARTICLE VII BOARD OF DIRECTORS; MANAGEMENT 7.1 DIRECTORS. (a) Except as otherwise provided in this Agreement, including the delegations of power and authority set forth in Section 7.6, or by non-waivable provisions of the Act, the management of the Company's business shall be vested exclusively in a Board of Directors, composed of five Directors, and in such committees as the Board of Directors may from time to time establish. The Directors of the Company shall be the Company's "MANAGERS" as that term is used in the Act and shall have authority with respect to, among other things, the matters referred to in Sections 15-1(c)(3), (4), (5), (6) and (7) or if the consent of the Members is required under the Act, such consent may be given by the holders of a majority in interest of the Voting Membership Interests. The Company and the holders of the Voting Membership Interests shall take all actions as may be required to ensure that the Board of Directors be comprised of the Directors designated as follows: (i) the holders of a majority in interest of the Voting Membership Interests included in the Sachs Interest (or Sachs, if there are no such holders at such time) shall be entitled to designate two Directors, each of whom shall be an individual actively involved in the day-to-day operations of the Company or one of its Subsidiaries (each, a "SACHS DIRECTOR"); PROVIDED, that the right of such holders (or Sachs, if there are no such holders at such time) to designate such Sachs Directors shall terminate if the Sachs Affiliated Parties have collectively Transferred (other than to Permitted Transferees) in excess of 50% of the Membership Interests held by SCM as of the Closing Date, including Transfers pursuant to Sections 9.10 or 9.11, and Sachs is no longer the Chairman and Chief Executive Officer of the Company, and (ii) the holders of a majority in interest of the Voting Membership Interests included in the Triarc Interest shall be entitled to designate the remaining Directors (each, a "TRIARC DIRECTOR"). The 40 holders of a majority in interest of the Voting Membership Interests may determine to increase the number of Directors on the Board of Directors to reflect the Voting Membership Interests of any new or additional Membership Interests or for any other reason and may designate additional Directors; PROVIDED, that during such time as there are Sachs Directors, following any such increase, the Triarc Directors and the Sachs Directors shall comprise a majority of the Directors on the Board of Directors. (b) Each Director shall hold office until his successor is chosen and shall have qualified, or until his earlier death, resignation or removal. A Director may be removed at any time, with or without cause, by resolution of the holders of a majority in interest of the Voting Membership Interests or with cause by resolution of a majority of the members of the Board of Directors; PROVIDED, HOWEVER, that (i) a Triarc Director may be removed at any time, without cause, only by resolution of the holders of a majority in interest of the Voting Membership Interests included in the Triarc Interest, (ii) during such time as the holders of the Voting Membership Interests included in the Sachs Interest (or Sachs, if there are no such holders at such time) are entitled to designate the Sachs Directors, a Sachs Director may be removed at any time, without cause, only by resolution of the holders of a majority in interest of the Voting Membership Interests included in the Sachs Interest (or by Sachs, if there are no such holders at such time) and (iii) during such time as the holders of the Voting Membership Interests included in the Sachs Interest (or Sachs, if there are no such holders at such time) are entitled to designate the Sachs Directors, Sachs may be removed as a Sachs Directors at any time, with Cause, only if simultaneously therewith or prior thereto the Company has notified Sachs that it is terminating or has terminated for Cause Sachs' employment with the Company and its Subsidiaries. A vacancy in a position because of death, resignation, removal or other cause may be filled by the act of the holders of a majority in interest of the Voting Membership Interests; PROVIDED, HOWEVER, that (x) during such time as the holders of the Voting Membership Interests included in the Sachs Interest (or Sachs, if there are no such holders at such time) are entitled to designate the Sachs Directors, the vacancy in a Sachs Director position may only be filled by the holders of a majority in interest of the Voting Membership Interests included in the Sachs Interest (or by Sachs, if there are no such holders at such time) and (y) the vacancy in a Triarc Director position may only be filled by the holders of a majority in interest of the Voting Membership Interests included in the Triarc Interest. If a Director other than a Triarc Director ceases to be actively involved in the day-to-day operations of the Company or one of its Subsidiaries, then such Director shall immediately be deemed to have been removed as a Director of the Company and its Subsidiaries, without further action by the holders of the Voting Membership Interests. (c) Each Director shall be entitled to cast one vote at any meeting of Directors, and shall be counted as one vote with respect to any action, consent or resolution of the Directors taken without a meeting. (d) The Board of Directors shall meet at least four times per year. The non-management Directors shall be obliged to devote only as much of their time to the Company's business as shall be reasonably required in light of the Company's business and objectives. A Director shall perform his duties as a Director and exercise 14 any rights consistent with the obligations of good faith and fair dealing and, until such time as no Sachs Affiliated Party is a Member, in a manner he reasonably believes to be in the best interests of the Company and all of its Members, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. (e) Except as otherwise specifically provided by this Agreement, an action, proposal or resolution shall be approved and adopted by the Board of Directors only if it has received an affirmative vote from a majority of the Directors then holding office. (f) Any action may be taken by the Board of Directors without a meeting if authorized by a written consent of the Directors satisfying the requirements of subsection (e) above. (g) The Board of Directors may hold meetings, both regular and special, either within or without the State of Illinois. Regular meetings of the Board of Directors may be held with notice at such time and at such place as may from time to time be reasonably determined in good faith by the Board of Directors. Special meetings of the Board of Directors may be called by any Director then in office. Notice of regular and special meetings stating the place, date and hour of the meeting shall be given to each Director either by mail, e-mail, telephone or telegram not less than five Business Days before the date of the meeting. (h) Whenever the giving of any notice to a Director is required by statute, the Articles of Organization or this Agreement, a waiver thereof, in writing, signed by the Director or Directors entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Directors need be specified in any written waiver of notice unless so required by statute, the Articles of Organization or this Agreement. (i) At all meetings of the Board of Directors, a majority of the total number of Directors then serving on the Board of Directors shall constitute a quorum for the transaction of business. (j) Members of the Board of Directors may participate in a meeting of the Board of Directors by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection (j) shall constitute presence in person at such meeting. (k) At each meeting of the Board of Directors, a chairman chosen by a majority of the Directors present shall preside. The secretary, or if there is 42 no secretary or if there be one and the secretary is absent, any person chosen by the presiding chairman of the meeting, shall act as secretary at each meeting of the Board of Directors. (l) A majority of the Directors present at any meeting of the Board of Directors, including an adjourned meeting, whether or not a quorum is present, may adjourn such meeting to another time and place. At least one day's notice of any adjourned meeting of the Board of Directors shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 7.1(g) other than by mail, or at least three days' notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called. 7.2 POWERS OF THE DIRECTORS. (a) The Board of Directors shall have the right and authority to take all actions which the Directors in good faith deem necessary, useful or appropriate for the management and conduct of the Company's business, including the right and authority to select, retain and compensate any accountants, counsel, advisors or consultants on behalf of the Company, any of its Subsidiaries, the Board of Directors or any committee of the Board of Directors, and the Board of Directors shall authorize one or more officers to act or refrain from acting on behalf of the Company and to enter into contracts and transactions on behalf of the Company. (b) Except as otherwise specifically provided by this Agreement, the Directors acting by majority approval may exercise all powers of the Company and do all such lawful acts and things as are not by the Act, the Articles of Organization or this Agreement directed or required to be exercised, approved, or done by the Members. (c) Prior to the beginning of each fiscal year of the Company and its Subsidiaries, the Board of Directors at a duly called meeting of the Board of Directors shall approve an operating budget of the Company and its Subsidiaries (the "ANNUAL BUDGET") for such fiscal year and a strategic operating plan of the Company and its Subsidiaries for such fiscal year (the "STRATEGIC PLAN"). (d) Notwithstanding any other provision of this Agreement, unless authorized by a majority of the Directors at a duly called meeting of the Board of Directors (which majority shall be required to include an Authorized Sachs Director) until the Sachs Affiliated Parties having collectively Transferred (other than to Permitted Transferees) in excess of 50% of the Membership Interests held by SCM as of the Closing Date, including Transfers pursuant to Sections 9.10 or 9.11), neither the Company nor any of its Subsidiaries shall be authorized to take, and shall not take, any action with respect to (i) the investment by the Company of Available Net Cash in any investment other than a Permitted Investment, (ii) the amendment of or modification to this Section 7.2(d) or Sections 2.4, 5.1(b), 5.1(c)(i), 6.2, 7.1(a), 7.1(b), 7.1(d), 7.6(a), 7.7, 7.9, 8.14, 8.15, Article IX (but only if such amendment or modification adversely affects 43 the Sachs Affiliated Parties), 10.3 or 11.2 or of any of the defined terms used therein, (iii) the amendment of or modification to any other provision of this Agreement that materially adversely affects the Sachs Affiliated Parties in their capacity as Members in a manner different than the other Members or that adversely affects the substantive economic rights in their capacity as Members of the Sachs Affiliated Parties in a manner different than the other Members or (iv) any issuance of Membership Interests that results in economic or voting dilution to any Sachs Affiliated Party that is disproportionate to the economic or voting dilution to any Triarc Affiliated Party, except for any such disproportionate result that arises by the fact that a Triarc Affiliated Party is acquiring Membership Interests in such issuance and such Sachs Affiliated Party failed to exercise its rights under Section 9.9 to participate in such issuance (each, an "EXTRAORDINARY MATTER"). Notwithstanding the foregoing, if an Authorized Sachs Director has not approved in the manner provided above any Extraordinary Matter submitted for authorization and Triarc has delivered a Call Option Notice irrevocably exercising its Call Option with respect to 100% of the Membership Interests held by the Sachs Affiliated Parties at such time pursuant to Section 9.10(c)(iv), then the Company and the Board of Directors shall be authorized to take any and all actions with respect to such Extraordinary Matter notwithstanding that such approval has not been obtained. 7.3 RESIGNATION OF DIRECTOR. A Director may resign from his position as a Director at any time by notice to the Members. Such resignation shall be effective as set forth in such notice. 7.4 EXPENSES. The Company shall reimburse the Directors for expenses reasonably incurred in carrying out their duties. 7.5 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors may, by resolution passed by a vote of a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one or more of the Directors, a majority of which members shall be Triarc Directors, and for each committee other than the audit committee or compensation committee, one of which members shall be a Sachs Director (unless there are no Sachs Directors at such time). The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors passed as aforesaid, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Company to the extent provided in this Agreement, including the limitations on Extraordinary Matters in Section 7.2(d). Unless otherwise specified in the resolution of the Board of Directors designating a committee, at all meetings of such committee a majority of the total number of members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the 44 committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article VII. 7.6 DELEGATION TO MANAGEMENT. (a) Subject to the oversight of the Board of Directors, during such time as Sachs is the Chairman and Chief Executive Officer of the Company and its Subsidiaries, the officers of the Company shall be delegated the power and authority to manage the ordinary course of business operations, and oversee the "day-to-day" management, of the Company and its Subsidiaries in accordance with the Annual Budget and the Strategic Plan, including the right to enter into agreements on behalf of or otherwise bind the Company or any of its Subsidiaries in accordance with this Agreement (including Article VIII) in their capacity as officers and not as Members. Notwithstanding the foregoing delegation of authority, the officers of the Company shall not have any authority over the following matters, unless such matters have received the requisite authorization of the Board of Directors and then only to the extent as authorized and directed in a resolution of the Board of Directors with respect to thereto: (i) any consolidation or merger of the Company or any of its Subsidiaries with or into any other Person or any recapitalization, reorganization or conversion (including, without limitation, any Conversion Transaction or Migration Transaction); (ii) any sale, lease, transfer or conveyance of the assets of the Company or any of its Subsidiaries, in a single or series of related transactions, involving aggregate consideration in excess of $500,000, other than cash used to fund investments made in the ordinary course of business consistent with past practice (subject to Section 7.6(a)(vi)); (iii) the acquisition of any business, assets or property by the Company or any of its Subsidiaries, in a single or series of related transactions, involving aggregate consideration in excess of $1,000,000; (iv) the making of any voluntary filing in respect of the dissolution or liquidation of the Company or any of its Subsidiaries; (v) any incurrence of debt or issuance of equity by, or other capital raising transactions for, the Company or any of its Subsidiaries (other than the incurrence of any such debt having a principal amount of not greater than $500,000 in the aggregate in any fiscal year); (vi) any investments by the Company or any of its Subsidiaries (other than in Liquid Assets as part of customary cash management 45 in the ordinary course of business) in excess of $1,000,000 individually, or $5,000,000 in the aggregate in any 12 month period; (vii) the entering into, or material amendment or termination of, any investment management, advisory or sub-advisory contract, or any other contract, agreement, arrangement or understanding (whether written or oral), pursuant to which each of the Company or its Subsidiaries provides or will provide Investment Management Services, or determining the terms of any securities offered or issued by, or the terms of any investment by any investors in, any Fund, including, without limitation, the Sumitomo Letter; (viii) the entering into, or material amendment or termination of, any side letter agreement, trust agreement, confirmation pledge agreement, guaranty or any other agreement and/or instrument pursuant to which the Company or any of its Subsidiaries is obligated to pay, pledge, subordinate, or in any other manner, relinquish its rights to receive compensation (whether in the form of management fees, incentive fees, equity or otherwise) under any management or advisory agreement; (ix) the material amendment of any presently existing or future debt agreements or instruments under which the Company or any of its Subsidiaries is a party; (x) the declaration of any dividend or making of any distribution on, or repurchase or redemption of, any Membership Interest, by the Company or any of its Subsidiaries; (xi) the hiring, firing, or compensation of any employee of the Company or any of its Subsidiaries whose annual compensation is in excess of $500,000; (xii) the approval, amendment or termination of any employee benefit plan of the Company or any of its direct or indirect Subsidiaries (including permitting any employee (or any Affiliate or Immediate Family member of such employee) to have a direct or indirect economic interest in any collective investment vehicle or other product sponsored or managed by the Company or any of its Subsidiaries (other than as a result of an economic interest in the Company)); (xiii) the making of any loans or advances to any Person, other than advances of business expenses in the ordinary course of business consistent with past practice; (xiv) the entering into, or amendment or termination of, any "off-balance sheet arrangements" (as defined in Item 303 of Regulation S-K under the Securities Act); 46 (xv) the entering into, or amendment or termination of, any contract pursuant to which the Company or any of its Subsidiaries may be expected to receive goods or services, or perform services (other than Investment Management Services, which are covered by clause (vii) above) or deliver goods, in excess of $250,000 individually or $2,000,000 in the aggregate in any fiscal year; (xvi) any matter related to any contract or transaction between the Company and one or more of its Members or Directors, or between the Company and any other Person in which one or more of its Members or Directors have a financial interest or are directors, partners, managers, advisers, Directors, officers, shareholder or members, other than the entering into, or amendment or termination of, any employment agreement excluded from Section 7.6(a)(xi); (xvii) the entering into any line of business other than the provision of Investment Management Services; (xviii) any amendment to this Agreement; (xix) the approval of any capital expenditure to the extent such capital expenditure (together with all other capital expenditures during such fiscal year) would exceed the amount provided for in the Annual Budget in any fiscal year by an amount in excess of $100,000; (xx) any change in the accounting methods or practices of the Company or any of its Subsidiaries or the termination of any independent auditor selected by Triarc in accordance with Section 11.3; (xxi) the preparation, filing, or amendment, of any income tax return (including any IRS Form 1065 and related schedules), the making or revocation of any material tax election (including any election under Section 754 of the Code (or similar provision under foreign, state or local law)) or entering into any transaction (or series of transactions) or arrangement reasonably expected to result in a deferral of tax or a book-tax difference of more than $500,000 (determined on a gross basis), in each case with respect to a taxable year that ends after the close of the 2004 Short Year; (xxii) any matter related to any governmental inquiries, other than a governmental inquiry of a routine nature; (xxiii) any matter related to litigation seeking relief in excess of $100,000 or seeking equitable relief; and (xxiv) any matter required by the Act to be taken by the entire Board of Directors. 47 (b) Notwithstanding any of the provisions of this Agreement to the contrary, all accounting, financial reporting and bookkeeping policies and procedures and legal, compliance and regulatory matters of the Company and any of its Subsidiaries shall be established in conjunction with policies and procedures as may be required by Triarc and under the general supervision of the Board of Directors. Without limiting the generality of the foregoing, for so long as any Triarc Affiliated Party owns any Triarc Interest, the Company shall, and shall cause its Subsidiaries to: (i) establish a disclosure control committee and risk management committee comprised of the officers of the Company and its Subsidiaries; (ii) establish and implement promptly such policies and procedures as Triarc shall request to enable Triarc to satisfy its accounting, financial reporting, bookkeeping and other obligations under applicable laws, rules and regulations (including those of any stock exchange or other self-regulatory organization), including its obligation under Sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated by the Securities and Exchange Commission pursuant thereto (as amended from time to time, the "SOA"), and the other requirements of the SOA with respect to the Company and its Subsidiaries, including establishing and maintaining adequate disclosure controls and procedures and internal controls over financial reporting as such terms are defined in the SOA and taking the actions specified on EXHIBIT D-1 in such form and manner and within the time period determined in each case by Triarc in its sole discretion; (iii) require the directors, officers, employees, agents, consultants and representatives of the Company and its Subsidiaries to comply with such policies and procedures and to cooperate with and report to the appropriate directors, officers, employees, agents, consultants and representatives of Triarc; and (iv) provide in a timely manner all tax, accounting, financial and other information concerning the business and affairs of the Company and its Subsidiaries, and access to the properties, books, records and personnel of the Company and its Subsidiaries, in such form and manner and within the time period determined in each case by Triarc in its sole discretion. (c) The officers of the Company shall report to the Board of Directors on a regular basis. 7.7 TRIARC RELATED PARTY TRANSACTIONS. During such time as a Sachs Affiliated Party is a Member, the Company and its Subsidiaries, on the one hand, and Triarc, any of Triarc's controlled Affiliates (other than the Company or any of its Subsidiaries), any of Triarc's directors or officers or, to the actual knowledge of Triarc, any Immediate Family member of any of Triarc's directors or officers or any of their respective controlled Affiliates, on the other hand, shall not enter into any agreement or 48 transaction (each, a "TRIARC RELATED PARTY TRANSACTION") except any Triarc Related Party Transactions that are reasonably determined in good faith by the Board of Directors to be (a) on terms, taken as a whole, not materially less favorable to the Company or such Subsidiary than could be obtained in a comparable arm's length transaction between the Company or such Subsidiary and a Person that is not an Affiliate of the Company or any of its Subsidiaries and (b) entered into for a valid business purpose; PROVIDED, that if any such Triarc Related Party Transaction, together with all other Triarc Related Party Transactions after the Closing Date, involves an amount in excess of $10.0 million, until such time as no Sachs Affiliated Party is a Member, (x) Sachs may request a customary "fairness opinion," at the Company's expense, from an Investment Banking Firm selected in accordance with the Selection Procedures to determine whether such Triarc Related Party Transaction is fair, from a financial point of view, to (i) the Company and its Subsidiaries, taken as a whole, and its Members other than the Triarc Affiliated Parties (such determination of fairness to the Members to be made without regard to the fact that a Triarc Affiliated Party may receive in such transaction benefits that are not available to other Members in such transaction) or (ii) the Company and its Subsidiaries, taken as a whole (if such Investment Banking Firm will not deliver such an opinion with respect to the fairness from a financial point of view to the Company's Members other than the Triarc Affiliated Parties) and (y) such Triarc Related Party Transaction shall not be completed unless such a fairness opinion (as described in clause (i) or (ii)) is obtained. Notwithstanding anything to the contrary contained in this Section 7.7, none of the following shall constitute a Triarc Related Party Transaction: (i) the exercise or enjoyment by any Person of its rights as a Member under this Agreement, including (by way of example and not limitation), the voting of its Voting Membership Interests, the receipt of distributions or other payments made in accordance with Article V or Article X, the appointment, removal or replacement of Directors, the exercise of preemptive rights under Section 9.9, the use of Confidential Information in accordance with Section 11.1 (Confidential Information), and actions taken in accordance with Sections 11.3 (Financial Information) or 11.6 (Conversion or Migration of the Company); (ii) the exercise or enjoyment by Triarc of its rights as Tax Matters Partner under this Agreement; (iii) the exercise or enjoyment by a Triarc Director of its rights under this Agreement, including (by way of example and not limitation), the making of decisions with respect to the management and policies of the Company and its Subsidiaries, the receipt of reimbursement of expenses under Section 7.4, and the receipt by any Covered Person of indemnification payments under Section 8.15; PROVIDED, that this exception shall not cause any agreement or transaction that independently would be a Triarc Related Party Transaction not to so be a Triarc Related Party Transaction (it being understood that this clause (iii) is not intended to modify the fiduciary duties of any Triarc Director as provided in this Agreement); 49 (iv) the exercise or enjoyment by Triarc of its rights to set-off or off-set under Section 5.1(c); (v) any transaction in compliance with Section 6.2; (vi) actions taken in connection with Sections 7.6(b) or 11.7; (vii) (A) actions taken by the Company or any of its Subsidiaries with respect to any Fund in which any Person described in the first sentence of this Section 7.7 is a securityholder or investor if such actions affect such Fund generally and are not intended to benefit such Person disproportionately or (B) the exercise or enjoyment by any Person described in the first sentence of this Section 7.7 of its rights as a securityholder or investor in any Fund or (C) the investment in, or acquisition of securities of, any Fund, by any Person described in the first sentence of this Section 7.7 on terms generally available to other investors that have been determined by the officers of the Company or any of its Subsidiaries pursuant to the delegation of power under Section 7.6 (it being understood that this clause (vii) is not intended to modify the fiduciary duties of any Triarc Director as provided in this Agreement); (viii) transactions, payments and the like in accordance with the terms of the Corporate Services Agreement, the Purchase Agreement or the Commitment Agreement, as in effect on the Closing Date or amended or modified with the consent of an Authorized Sachs Director, unless there are no Sachs Directors at such time; and (ix) any transaction or agreement that would constitute a Triarc Related Party Transaction that has been approved by a majority of the Board of Directors (which majority must include at least one Authorized Sachs Director, unless there are no Sachs Directors at such time). 7.8 BONUS POOLS. For purposes of bonuses payable in respect of the 2004 fiscal year, the methodologies used by the Company and its Subsidiaries as of the date of this Agreement to determine bonus pools and the terms and conditions of such bonus pools shall not be changed without the consent of a majority of the Board of Directors (which majority must include at least one Authorized Sachs Director, unless there are no Sachs Directors at such time). 7.9 TERMINATION UPON QUALIFIED IPO OR COMPANY SALE. The provisions of this Article VII shall terminate and be of no further force and effect upon the consummation of the earlier to occur of a Qualified IPO or a Company Sale, except to the extent otherwise determined by holders of a majority in interest of the Triarc Interest. 50 ARTICLE VIII OFFICERS 8.1 NUMBER; TITLES; ELECTION; TERM; QUALIFICATION. The officers of the Company shall be a Chief Executive Officer, a President, one or more vice presidents (and, in the case of each vice president, with such descriptive title, if any, as the Board of Directors shall determine), a treasurer and a secretary. The Company may also have a chairman, one or more assistant treasurers, one or more assistant secretaries, and such other officers as the Board of Directors may determine from time to time. Each officer shall hold office for the term for which he is elected or appointed and until his successor has been elected or appointed and qualified or until his earlier resignation or removal in accordance with this Agreement. Any two or more offices may be held by the same person. Officers need not be Members. 8.2 RESIGNATION. Any officer may resign at any time upon written notice to the Company. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective. The resignation of an officer shall be without prejudice to the contract rights of the Company, if any. 8.3 REMOVAL. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors in their sole discretion. Election or appointment of any officer shall not of itself create contract rights. 8.4 VACANCIES. Any vacancy occurring in the Presidency or any other officership of the Company may be filled by the Board of Directors. 8.5 AUTHORITY. Officers shall have such authority and perform such duties in the management of the Company as are provided in this Agreement or as may be determined by resolution of the Directors. 8.6 COMPENSATION. The compensation, if any, of officers or employees of the Company and its Subsidiaries which are described in Section 7.6(a)(xi) shall be fixed from time to time by the Board of Directors subject to any applicable employment or other agreement between the Company or any of its Subsidiaries and such officer or employee. 8.7 VOTING SECURITIES OWNED BY THE COMPANY. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Company may be executed in the name of and on behalf of the Company by a duly authorized (by the Board of Directors) officer of the Company and such officer may, in the name of and on behalf of the Company, take all such action as he may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Company may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such 51 securities and which, as the owner thereof, the Company might have exercised and possessed if present. 8.8 CHAIRMAN. The Chairman, if one shall have been appointed, shall be a Director and shall preside at all meetings of the Board of Directors and shall exercise such powers and perform such other duties as shall be determined from time to time by the Board of Directors. 8.9 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the senior most executive officer of the Company and shall in general supervise and manage the ordinary course of business and operations, and oversee the "day to day" management, of the Company and its Subsidiaries in accordance with the Annual Budget and the Strategic Plan, subject to the direction and control of the Board of Directors. 8.10 PRESIDENT. The President shall engage in the active management of the Company under the general supervision of the Chief Executive Officer and, in the absence of a Chief Executive Officer, shall be the Chief Executive Officer of the Company. 8.11 OTHER OFFICERS. Any other officers appointed shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. 8.12 CONTRACTS, CHECKS AND DEPOSITS. (a) The Board of Directors may authorize any officer or officers to enter into any contract or execute and deliver any instrument in the name and on behalf of the Company, and such authority may be general, limited as to the amount involved, or confined to specific instances. (b) No loans shall be contracted on behalf of the Company or any of its Subsidiaries by any officer or Director; PROVIDED, that the Chairman, the Chief Executive Officer or the President may contract for loans on behalf of any of the Company or its Subsidiaries to the extent authorized by the Board of Directors. Such authority may be general, limited as to the amount involved, or confined to specific instances. (c) All checks, drafts, or other orders for payment of money, notes, or other evidences of indebtedness issued in the name of the Company shall be signed by such officer or officers of the Company and in such manner as shall from time to time be reasonably determined by resolution of the Board of Directors. (d) All funds of the Company not otherwise employed shall be deposited from time to time to the credit of the Company in such banks, trust companies, or other depositories as the Board of Directors may select. 52 8.13 EXPENSES. The Company shall reimburse the officers for expenses reasonably incurred in carrying out their duties. 8.14 LIMITATION OF LIABILITY. No Director, officer, Member, Affiliate of any Member or shareholder, partner, member, employee, representative or agent of any Member or their respective Affiliates (each a "COVERED PERSON") shall be liable to the Company or to any other Covered Person for any act or omission (including the breach of any duty to the Company) performed or omitted by or on behalf of such Covered Person in a manner consistent with (i) the duty of good faith and fair dealing, (ii) acting in good faith reliance on the provisions of this Agreement and (iii) the duty of good faith that any contracting party owes to each other party to the contract (which the parties hereto agree extends as between the Members and between the Company and each Member, but does not extend to any Person other than the Company and the Members); PROVIDED, that such Covered Person was not guilty of gross negligence, intentional misconduct, theft or fraud with respect to such act or omission, or, if such act or omission is alleged to be criminal in nature, did not have reasonable cause to believe his conduct was unlawful. The duties of the Company and any Covered Person shall be limited to those set forth in this Agreement (including this Section 8.14), unless other duties are imposed by non-waivable provisions of the Act. Without limiting the generality of the foregoing, no Covered Person shall be liable to the Company or to any other Covered Person as a result of any error of judgment or of any grossly negligent act, error, mistake or omission, or as a result of the gross negligence, whether of omission or commission, dishonesty, or bad faith of any employee or agent of the Company. Each Director shall be subject to the duty of loyalty and the duty of care (until such time as no Sachs Affiliated Party is a Member) and shall be entitled to the benefit of the business judgment rule for all acts, omissions and determinations in his capacity as a Director hereunder, to the same extent as the directors of a solvent Delaware corporation are so entitled with respect to acts, omissions and determinations in their capacities as directors. Each Covered Person may consult with legal counsel selected by them and shall be fully protected, and shall incur no liability to the Company or to any other Covered Person, in acting or refraining from acting in good faith in reliance upon the opinion or advice of such counsel. 8.15 INDEMNIFICATION. The Company shall defend, indemnify, and save harmless each Covered Person (other than a Member holding only Class C Profits Only Interests) who was or is a party or is threatened to be made a party to any threatened, pending or completed demand, action, suit or proceeding (each a "CLAIM") brought by or against the Company or otherwise, whether civil, criminal, administrative or investigative, including an action by or in the right of the Company to procure a judgment in its favor, by reason of the fact that such Covered Person is or was a Member, officer, employee or agent of the Company, or that such Covered Person is or was serving at the request of the Company as a partner, member, director, officer, trustee, employee or agent of another Person, from all loss, liability, damage, judgment, fine, amount paid in settlement, cost or expense (including reasonable attorneys' fees and disbursements) actually and reasonably incurred in connection with such Claim, except for such loss, liability, damage, judgment, fine, amount paid in settlement, cost, or expense as arises out of the theft, fraud, intentional misconduct or gross negligence by such Covered Person as 53 determined in a judgment or other final adjudication adverse to such Covered Person. Expenses incurred in defending any Claim to which indemnification is provided for under this Section 8.15 shall be paid by the Company in advance of the final disposition of such Claim, and not less often than monthly upon receipt of an undertaking by and on behalf of such Covered Person to repay such amount if it shall be ultimately determined that he or she is not entitled to be indemnified by the Company. The indemnification provided by this Section 8.15 shall not be deemed exclusive of any other rights to indemnification to which such Covered Person may be entitled under any agreement, determination of the Members or otherwise. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this Section 8.15 shall continue for a Person who has ceased to be a Covered Person and inures to the benefit of the heirs, executors and administrators of such Person. The provisions of this Section 8.15 shall be a contract between the Company, on the one hand, and each Covered Person (other than a Member holding Class C Profits Only Interests) who served in such capacity at any time while this Section 8.15 is in effect, on the other hand, pursuant to which the Company and each such Covered Person intend to be legally bound. No repeal or modification of this Section 8.15 shall affect any rights or obligations with respect to any state of facts then or theretofore existing or thereafter arising or any proceeding theretofore or thereafter brought or threatened based in whole or in part upon such state of facts. 8.16 KEY PERSON AND DIRECTORS AND OFFICERS INSURANCE. The Company will maintain (i) key person life and disability insurance on such individuals, payable to (A) Triarc, (B) Sachs or any of his Affiliates or (C) the Company as beneficiary, as applicable and, in the case of any such insurance payable to the Company or Sachs or any of his Affiliates as beneficiary, in such amounts as reasonably determined by the Board of Directors from time to time and, in the case of any such insurance payable to Triarc as the beneficiary, in such amounts as are determined by Triarc; provided, the premiums therefor shall be paid by (x) Triarc, (y) Sachs or any of his Affiliates or (z) the Company, as applicable, to the extent that Triarc, Sachs or any of his Affiliates or the Company, as applicable, is the named beneficiary thereof, and (ii) directors and officers insurance in such amounts as reasonably determined by the Board of Directors from time to time and payable to the Company as beneficiary. ARTICLE IX TRANSFER OF MEMBERS' INTERESTS 9.1 LIMITATION ON TRANSFER. No Member (other than any Triarc Affiliated Party) shall Transfer any Membership Interests or any right, title or interest therein or thereto, except for Transfers permitted under Section 9.2, 9.7, 9.8, 9.10, 9.11 or 9.12 and otherwise in accordance with the provisions of this Agreement, including Sections 9.3 and 9.4. Transfers by any Triarc Affiliated Party of any Membership Interests or any right, title or interest therein or thereto shall comply with the provisions of Section 9.4 and, to the extent applicable, Section 9.7. Any attempt to Transfer any Membership Interests or any rights, title or interests therein or thereto in violation of this Section 9.1 shall be null and void AB INITIO. 54 9.2 PERMITTED TRANSFERS. Notwithstanding anything to the contrary contained in this Agreement, but subject to Sections 9.1, 9.3 and 9.4, at any time, (a) each Member who is an individual may Transfer all or a portion of its Membership Interests (for no value or consideration) to (i) an individual who is a member of such Member's Immediate Family, (ii) the heirs or legal representatives of any such deceased Member, (iii) a trust, corporation, partnership or limited liability company, all of the beneficial interests in which shall be held by such Member or such Member's Immediate Family members or such deceased Member's heirs or legal representatives; PROVIDED, HOWEVER, that during the period that any such trust, corporation, partnership or limited liability company holds any right, title or interest in any Membership Interests, no Person other than such Member or such Member's Immediate Family members or such deceased Member's heirs or legal representatives may be or may become trustees, beneficiaries, stockholders, partners or members thereof or (iv) any Triarc Affiliated Party, and (b) each Member that is not an individual may Transfer all or a portion of its Membership Interests (for no value or consideration received directly or indirectly in connection with such Transfer, including as a result of any Transfer of any interests in such Affiliate) to (i) any of its Affiliates or (ii) any Triarc Affiliated Party; PROVIDED that SCM shall be permitted to Transfer all or a portion of its Membership Interests to any Person Sachs could Transfer such Membership Interests if he were a Member under clause (a) (the Persons referred to in the preceding clauses (a)(i), (ii) and (iii) and (b)(i) are each referred to hereinafter as a "PERMITTED TRANSFEREE"). A Permitted Transferee of Membership Interests pursuant to this Section 9.2 may Transfer its Membership Interests pursuant to this Section 9.2 only to the Transferring Member (the "TRANSFEROR") or to a Person that is a Permitted Transferee of such Transferor. 9.3 PERMITTED TRANSFER PROCEDURES. If any Member wishes to Transfer its Membership Interests to a Permitted Transferee under Section 9.2, such Member shall give notice to the Company of its intention to make such a Transfer not less than ten days (other than in the case of the death of such Member) prior to effecting such Transfer, which notice shall state the name and address of each Permitted Transferee to whom such Transfer is proposed, the relationship of such Permitted Transferee to such Member, and the number of Membership Interests proposed to be Transferred to such Permitted Transferee. 9.4 TRANSFERS IN COMPLIANCE WITH LAW. Notwithstanding any other provision of this Agreement, no Transfer may be made pursuant to this Article IX unless (a) the Transferee (if not already a Member) has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument substantially in the form attached hereto as EXHIBIT C, (b) the Transfer complies in all respects with the applicable provisions of this Agreement, (c) the Transfer complies in all respects with applicable federal, state and foreign securities laws, including the Securities Act, and (d) the Board of Directors shall have reasonably determined in good faith that such proposed Transfer, alone or together with other Transfers, will not cause the Company to be treated as a publicly traded partnership taxable as a corporation for United States federal income tax purposes. If requested by the Board of Directors, an opinion of counsel to such Transferring Member shall be supplied to the Company, at such 55 Transferring Member's expense, to the effect that such Transfer complies with the conditions set forth in this Section 9.4. The Board of Directors may also request officer certificates and representations and warranties from the Transferee and the Transferring Member as to the matters set forth above and such other factual matters as the Board of Directors may reasonably request. 9.5 SUBSTITUTION OF TRANSFEREES; TRANSFEREE'S CAPITAL ACCOUNT AND MEMBERSHIP INTEREST. Upon becoming a party to this Agreement, the Transferee of a Member shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the Transferring Member hereunder with respect to and to the extent of the Membership Interests Transferred to such Transferee, and such Transferee's Capital Account (including any sub-Capital Account) and Membership Interest for purposes of this Agreement shall be the Capital Account (including any sub-Capital Account) and Membership Interest of the Transferring Member, with respect to and to the extent of the Membership Interests Transferred to such Transferee. Notwithstanding anything to the contrary set forth in this Agreement, (a) (i) the right of the holders of the Voting Membership Interests included in the Sachs Interest (or Sachs, if there are no such holders at such time) to appoint, remove or replace the Sachs Directors under Section 7.1 and the approval and other rights of such Sachs Directors contained in this Agreement (including Sections 3.4, 7.2(d), 7.5, 7.7 and 7.8) and (ii) each of the Put Rights, may not be assigned to any other Person (other than to a Permitted Transferee of such Person) that acquires from them any of such Person's Membership Interests or otherwise and (b) the right of Sachs to accept or reject any Company Opportunity in accordance with Sections 6.2(a) and 6.2(b) and to request a customary "fairness opinion" in accordance with Section 7.7 shall be personal to Sachs and shall not be assignable to any other Person that acquires from Sachs any of the Sachs Interest or otherwise. 9.6 TRANSFERS DURING A FISCAL YEAR. If any Transfer of a Member's Membership Interests shall occur at any time other than the end of the Company's fiscal year, the distributive shares of the various items of Company income, gain, loss, and expense as computed for tax purposes and the related cash distributions shall be allocated between the Transferee and the Transferring Member on such proper basis as the Transferee and the Transferring Member shall agree consistent with applicable requirements under Section 706 of the Code; PROVIDED, that no such allocation shall be effective unless (a) the Transferee and the Transferring Member shall have given the Company written notice, prior to the effective date of such Transfer, stating their agreement that such allocation shall be made on such proper basis, (b) the Board of Directors, in its discretion, shall have consented to such allocation and (c) the Transferring Member and the Transferee shall have agreed to reimburse the Company for any incremental accounting fees and other expenses incurred by the Company in making such allocation. 9.7 TAG-ALONG RIGHTS. (a) If any Triarc Affiliated Party (the "SELLING MEMBER") proposes to Transfer all or a portion of its Membership Interests (the "OFFERED INTERESTS") 56 to any Third Party (a "THIRD PARTY PURCHASER"), each Member other than the Triarc Affiliated Parties (each, a "TAG-ALONG RIGHTHOLDER") shall have the right to Transfer to such Third Party Purchaser, upon the terms set forth in the Offering Notice described in Section 9.7(b), that portion of such Tag-Along Rightholder's Membership Interests of the same Class of Interests (it being understood that all Classes of Common Membership Interests shall be deemed to be of the same Class for these purposes) being Transferred by the Selling Member (excluding any Membership Interests that at such time are not, and will not become as a result of the contemplated Transfer, fully vested) as hereinafter provided. (b) The Selling Member shall deliver a written notice (the "OFFERING NOTICE") to each Tag-Along Rightholder of each proposed Transfer by it of Offered Interests which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 9.7, at least 15 Business Days prior to the proposed consummation of such Transfer, setting forth (i) the amount and class of Offered Interests, (ii) the name and address of the proposed Third Party Purchaser, and (iii) the proposed amount and form of consideration and terms and conditions of payment offered by such Third Party Purchaser. A Tag-Along Rightholder shall have the right, exercisable by written notice delivered to the Selling Member within ten Business Days following receipt of the Offering Notice, (a "TAG-ALONG NOTICE"), to participate in such proposed Transfer upon the terms and conditions set forth in the Offering Notice, which Tag-Along Notice shall specify the amount and type of qualifying Membership Interests the Tag-Along Rightholder desires to include in such proposed Transfer. If a Tag-Along Rightholder gives the Selling Member a timely Tag-Along Notice, then such Tag-Along Rightholder shall be entitled to participate in such proposed Transfer as provided in this Section 9.7(b) (each, a "PARTICIPATING TAG-ALONG RIGHTHOLDER"). A Tag-Along Rightholder may waive its rights under this Section 9.7 prior to the expiration of such ten-Business Day period by giving written notice to the Selling Member, with a copy to the Company. In addition, the failure of a Tag-Along Rightholder to respond within such ten-Business Day period shall be deemed to be a waiver of such Tag-Along Rightholder's rights under this Section 9.7. If no Tag-Along Rightholder provides timely notice with respect to the Transfer described in the Offering Notice, the Selling Member may Transfer all or any part of the Offered Interests subject to such Offering Notice at any time within the 120-day period immediately following the date of the Offering Notice on terms and conditions and at a price no more favorable to the Selling Member than those proposed in the Offering Notice. Offered Interests not so Transferred by the Selling Member to the Third Party Purchaser during such 120-day period will again be subject to the provisions of this Section 9.7 upon subsequent Transfer. The Selling Member shall request the Third Party Purchaser to agree to acquire all qualifying Membership Interests identified in all Tag-Along Notices duly given by the Participating Tag-Along Rightholders. If the Third Party Purchaser is unwilling or unable to acquire all of such qualifying Membership Interests, then each Participating Tag-Along Rightholder shall have the right to include in such Transfer an amount of Membership Interests (up to the full amount included in the Tag-Along Notice) valued in accordance with Section 9.13 that would result in it receiving an amount not to exceed its Tag-Along Pro Rata Portion of the aggregate consideration offered to be paid by the Third Party Purchaser for the Offered Interests. The Classes of Interests held by such Participating Tag-Along Rightholder to 57 be included in such Transfer shall be determined in the following order of priority: (x) first, such Participating Tag-Along Rightholder shall include its Membership Interests that are of the same Classes of Interests as the Offered Interests (or, if the Offered Interests consist of more than one Class of Interests, Membership Interests of the same Classes of Interests and in the same proportion as the Offered Interests to the maximum extent possible); and (y) second, such other Classes of Interests as may be designated by such Participating Tag-Along Rightholder. The Transfer by the Selling Member and each Participating Tag-Along Rightholder shall be on the same terms and conditions (other than price, to the extent provided herein), including payment of its PRO RATA share of all reasonable costs associated with such transaction, to the extent such costs are incurred for the benefit of the Selling Member and all Participating Tag-Along Rightholders participating in the Transfer. If a Transfer of Membership Interests by the Selling Member and the Participating Tag-Along Rightholders is not completed during the 120-day period immediately following the date of the Offering Notice, the Selling Member's Offered Interests will again be subject to the provisions of this Section 9.7 upon subsequent Transfer. It shall be a condition to participate that each Participating Tag-Along Rightholder shall execute and deliver such definitive documentation and take such other actions in connection with such Transfer as shall be reasonably requested by the Third Party Purchaser to effect the sale and that are being executed and performed by the Selling Member. If a Third Party Purchaser fails to purchase Membership Interests from any Tag-Along Rightholder that has properly exercised its tag-along rights pursuant to this Section 9.7(b), then the Selling Member shall not be permitted to consummate the proposed Transfer of the Offered Interests, and any such attempted sale shall be null and void AB INITIO. Notwithstanding the foregoing, if the Sachs Affiliated Parties validly deliver a Put Right Notice exercising their Put Right with respect to 100% of their Membership Interests held by them at such time pursuant to Section 9.11(e)(iv) in respect thereof, then no Tag-Along Rightholder shall be required to exercise any of its rights pursuant to this Section 9.7 until the applicable Put Right Price has been determined in accordance with this Agreement (and the 120-day period referred to above shall be "tolled" pending such determination), and no Transfer by the Selling Member may be completed until Triarc shall have satisfied its obligations under Section 9.11. 9.8 DRAG ALONG RIGHTS. In the event a Triarc Affiliated Party (the "DRAG-ALONG RIGHTHOLDER") desires to Transfer to a Third Party Purchaser, all or a portion of its Membership Interests (including pursuant to a merger, consolidation or business combination or a sale of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole), in a transaction that would result in a Third Party Purchaser having at least 80% of the Drag-Along Rightholder's Membership Interests after giving effect to the transaction, the Drag-Along Rightholder may send written notice (the "DRAG-ALONG NOTICE") to the Company and the Members other than the Triarc Affiliated Parties (each a "DRAG-ALONG SELLER") notifying them they will be required to Transfer the same percentage of their Membership Interests held by the Drag-Along Sellers as is equal to the percentage of the Membership Interests of the Drag-Along Seller being Transferred to the Third Party Purchaser (the "DRAG-ALONG MEMBERSHIP INTERESTS") (or, in the case of a merger, consolidation, business combination or an asset sale, vote in favor of such sale). Upon receipt of a Drag-Along Notice, each Drag-Along Seller 58 receiving such notice shall be obligated to (a) Transfer all of its Drag-Along Membership Interests in such transaction on the same terms and conditions (other than price, to the extent provided below) as the Drag-Along Sellers (including payment of its PRO RATA share of all reasonable costs associated with such transaction, to the extent such costs are incurred for the benefit of the Drag-Along Rightholder and the Drag-Along Seller participating in the Transfer) and (b) otherwise take all necessary action under this Agreement to cause the consummation of such transaction, including voting its Membership Interests in favor of such transaction and not exercising any appraisal rights in connection therewith. If a Transfer of Membership Interests by the Drag-Along Rightholder and the participating Drag-Along Sellers is not completed during the 120-day period immediately following the date of the Drag-Along Notice, the Drag-Along Rightholder must deliver new Drag-Along Notices in accordance with this Section 9.8. Each Drag-Along Seller further agrees to execute and deliver such definitive documentation and take such other actions in connection with such Transfer as shall be reasonably requested by the Third Party Purchaser and that are being executed and performed by the Drag-Along Rightholder. The aggregate consideration received by the Drag-Along Rightholder and its Affiliates and the Drag-Along Sellers shall be allocated among them in accordance with Section 9.13. Notwithstanding the foregoing, if the Sachs Affiliated Parties validly deliver a Put Option Notice exercising their Put Option with respect to 100% of their Membership Interests held by them at such time pursuant to Section 9.11(e)(iv) in respect thereof, then no Drag-Along Rightholder may exercise any of its rights pursuant to this Section 9.8 until the applicable Put Right Price has been determined in accordance with this Agreement (and the 120-day period referred to above shall be "tolled" pending such determination), and no Transfer by the Drag-Along Rightholder may be completed until Triarc shall have satisfied its obligations under Section 9.11. 9.9 PREEMPTIVE RIGHTS. (a) If the Company proposes to offer New Membership Interests to any Person, the Company shall, prior to issuing such New Membership Interests, deliver to each holder of Class A Interests and each Class B Member, in each case, holding in excess of 5% of the Membership Interests then outstanding and each of the Roberts Affiliated Parties (each, a "PREEMPTIVE RIGHTHOLDER") a written offer (the "PREEMPTIVE RIGHTS OFFER") to issue to the Preemptive Rightholders such New Membership Interests at a price, in cash, per New Membership Interest equal to the amount paid or proposed to be paid by such Person per New Membership Interest and otherwise upon the terms and conditions set forth in this Section 9.9. The Preemptive Rights Offer shall state that the Company proposes to issue New Membership Interests and specify the percentage, class and terms for each New Membership Interest (including the purchase price, which shall equal the amount paid or proposed to be paid by such Person per New Membership Interest). The Preemptive Rights Offer shall remain open and irrevocable for a period of 20 Business Days (the "PREEMPTIVE RIGHTS PERIOD") from the date of its delivery. 59 (b) Each Preemptive Rightholder may accept the Preemptive Rights Offer by delivering to the Company a written notice (the "PURCHASE NOTICE") within the Preemptive Rights Period. The Purchase Notice shall state the amount of New Membership Interests such Preemptive Rightholder desires to purchase. If the sum of all such interests specified in such Purchase Notices exceeds the amount of New Membership Interests that the Company proposes to issue, the New Membership Interests shall be allocated among the Preemptive Rightholders that delivered a Purchase Notice in accordance with their respective Pro Rata Percentages (based on the aggregate amount of Class A Interests, Class B Interests and vested Class C Interests held by all such participating Preemptive Rightholders). (c) The issuance of New Membership Interests (against receipt of payment in cash therefor) to the Preemptive Rightholders who delivered a Purchase Notice shall be made on a Business Day, as designated by the Company, not less than ten and not more than 30 days after expiration of the Preemptive Rights Period on terms and conditions of the Preemptive Rights Offer consistent with this Section 9.9. At the closing of the issuance of the New Membership Interests to such Preemptive Rightholders, the Company shall deliver certificates or other instruments evidencing such New Membership Interests against payment in cash of the purchase price therefor, and such New Membership Interests shall be issued free and clear of all Liens (other than those arising hereunder and those attributable to actions by the purchasers thereof). At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise reasonably necessary or appropriate. (d) If the amount of New Membership Interests included in the Preemptive Rights Offer exceeds the sum of all such interests specified in such Purchase Notices, the Company may issue (against receipt of payment therefor) such excess or any portion thereof on the terms and conditions of the Preemptive Rights Offer to any Person within 60 days after expiration of the Preemptive Rights Period. If such issuance is not made within such 60-day period, the restrictions provided for in this Section 9.9 shall again become effective. (e) If the Board of Directors reasonably determines in good faith that the delay occasioned by complying with the procedures contemplated by this Section 9.9 would be prejudicial to the Company or its financial condition or business and operations, then the Company may issue and sell the New Membership Interests without first offering the New Membership Interests to the Preemptive Rightholders in compliance with Section 9.9. If the Company so elects to issue New Membership Interests under this Section 9.9(e), then the Company shall deliver the Preemptive Offer to each Preemptive Rightholder to which it has not so issued or sold New Membership Interests (the "EXCLUDED PREEMPTIVE RIGHTHOLDERS") no later than three Business Days after the date on which such New Membership Interests were issued and sold. If an Excluded Preemptive Rightholder delivers a Purchase Notice within 20 Business Days after receipt of the Preemptive Offer and (i) the Company has issued or sold the subject New Membership Interests to any Person but not to any Preemptive Rightholder, then the Company shall issue and sell to each electing Excluded Preemptive Rightholder such number of New Membership Interests as such Excluded Preemptive Rightholder would 60 have been entitled had the Preemptive Rights Offer been made and accepted by such Excluded Preemptive Rightholder in accordance with Sections 9.9(a) through (d) as promptly as practicable, but in no event later than five Business Days following the date of delivery of the Purchase Notice, at the same price, and on the same terms and conditions as the issuance and sale occurred or (ii) the Company has issued and sold the subject New Membership Interests to one or more of the Preemptive Rightholders (the "EMERGENCY FUNDING PARTICIPANTS"), then the New Membership Interests as to which such Excluded Preemptive Rightholders have exercised preemptive rights under this Section 9.9(e) shall be sold by the Emergency Funding Participants to such Excluded Preemptive Rightholders as promptly as practicable, but in no event later than five Business Days following the date of delivery of the Purchase Notice, in such amount as will most closely replicate the outcome if such Excluded Preemptive Rightholders had timely delivered a Purchase Notice in accordance with Section 9.9(b) and the sale shall occur at a price per new Membership Interest equal to the price paid by the Emergency Funding Participants therefor, plus interest on such amount from the date of purchase by the Emergency Funding Participants through the date of sale to such Excluded Members, at a rate per annum equal to the then effective prime rate, as announced by Citibank N.A.. At the closing of any such sale by the Emergency Funding Participants, such Emergency Funding Participants shall deliver to such Excluded Preemptive Rightholders certificates representing the New Membership Interests to be conveyed, duly endorsed or accompanied by stock powers or other appropriate instruments of transfer duly executed in blank, free and clear of all Liens (other than those created by this Agreement and those attributable to actions by the purchasers thereof), against payment of the purchase price therefor calculated hereunder. 9.10 CALL OPTIONS. (a) At any time and from time to time on or after the fifth anniversary of the Closing Date and prior to the sixth anniversary of the Closing Date, Triarc shall have the right (but not the obligation) to purchase, at the Standard Price, (i) up to the greater of (x) 50% of the Membership Interests held by the Sachs Affiliated Parties at such time and (y) 50% of the Membership Interests held by the Sachs Affiliated Parties on the Closing Date and (ii) up to the greater of (x) 50% of the Membership Interests held by the Roberts Affiliated Parties at such time and (y) 50% of the Membership Interests held by the Roberts Affiliated Parties on the Closing Date. (b) At any time and from time to time on or after the sixth anniversary of the Closing Date, Triarc shall have the right (but not the obligation) to purchase, at the Standard Price, (i) up to 100% of the Membership Interests held by any or all of the Sachs Affiliated Parties and (ii) up to 100% of the Membership Interests held by any or all of the Roberts Affiliated Parties. (c) Notwithstanding anything to the contrary set forth in paragraphs (a) and (b) above: (i) if a Triarc Key Person Event occurs, then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable 61 within 90 days after the occurrence of such event, at the Guaranteed Price, all (but not less than all) of the Membership Interests held by SCM as of the Closing Date, and at the Standard Price, all (but not less than all) of the other Membership Interests held by the Sachs Affiliated Parties; (ii) if (A) Sachs ceases to be employed by the Company or any of its Subsidiaries due to his death or Disability, (B) a Triarc Change in Control occurs or (C) Sachs requests the delivery of a fairness opinion in accordance with Section 7.7, then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable within 90 days after the occurrence of such event, at the Standard Price, all (but not less than all) of the Membership Interests held by the Sachs Affiliated Parties; (iii) if (A) Sachs is terminated by the Company or any of its Subsidiaries for Cause, (B) Sachs ceases to be employed by the Company or any of its Subsidiaries (other than as a result of a termination by the Company or any of its Subsidiaries without Cause, resignation for Good Reason or due to his death or Disability) or (C) a Material Sachs Operating Agreement Breach Event occurs, then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable within one year after the occurrence of such event, at the Standard Price, all (but not less than all) of the Membership Interests held by the Sachs Affiliated Parties; (iv) if an Authorized Sachs Director fails to approve any Extraordinary Matter submitted to him or her for authorization under Section 7.2(d), then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable within 20 Business Days after the occurrence of such event, at the Standard Price, all (but not less than all) of the Membership Interests held by the Sachs Affiliated Parties; (v) if (A) Roberts ceases to be employed by the Company or any of its Subsidiaries due to his death or Disability or (B) a Triarc Change in Control occurs, then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable within 90 days after the occurrence of such event, at the Standard Price, all (but not less than all) of the Membership Interests held by the Roberts Affiliated Parties; and (vi) if (A) Roberts is terminated by the Company or any of its Subsidiaries for Cause, (B) Roberts ceases to be employed by the Company or any of its Subsidiaries (other than as a result of a termination by the Company or any of its Subsidiaries without Cause, resignation for Good Reason or due to his death or Disability) or (C) a Material Roberts Operating Agreement Breach Event occurs, then Triarc thereafter shall have the right (but not the obligation) to purchase, exercisable within one year after the occurrence of such event, at the Standard Price, all (but not less than all) of the Membership Interests held by the Roberts Affiliated Parties. 62 (d) Any Call Option shall be exercisable upon delivery of a written notice (the "CALL OPTION NOTICE") by Triarc to the applicable Sachs Affiliated Parties and/or Roberts Affiliated Parties (the "CALL OPTION SELLERS") and the Company. The Call Option Notice once delivered shall be irrevocable. The Call Option Notice shall include the amount of Membership Interests of the applicable Sachs Affiliated Party or Roberts Affiliated Party that Triarc has exercised its right to purchase pursuant to this Section 9.10. The date when the Call Option Price is determined by the Investment Banking Firm selected in accordance with the Selection Procedures shall be the "CALL OPTION PRICE DETERMINATION DATE". (e) Prior to the Call Option Price Determination Date, subject to any limitations or restrictions contained in any financing arrangements of the Company or any of its Subsidiaries or applicable law (including the Act), the Company shall distribute to each Call Option Seller an amount equal to the sum of (i) the amount as of such date of the unrecovered Capital Contributions, if any, made by such Call Option Seller subsequent to the Closing Date in respect of its Membership Interests being called and (ii) the Available Net Cash and Permitted Investments that such Call Option Seller would have received pursuant to a distribution made under Section 5.1(c)(i) for the then current fiscal year had such amounts been determined and such distribution been made as of the end of the most recently completed fiscal quarter. (f) The purchase of the Membership Interests that Triarc has exercised its right to purchase pursuant to this Section 9.10 shall occur no later than the 30th day (or if such day is not a Business Day, the first Business Day thereafter) following the Call Option Price Determination Date; PROVIDED, that in connection with any Call Option exercised pursuant to clauses (ii)(A) or (iv) of Section 9.10(c), if the applicable Call Option Price is less than $50 million, such purchase shall occur no later than the 90th day (or if such day is not a Business Day, the first Business Day thereafter) after the Call Option Price Determination Date and, if the applicable Call Option Price is $50 million or greater, such purchase shall occur no later than the 270th day (or if such day is not a Business Day, the first Business Day thereafter) after the Call Option Price Determination Date, in which case interest shall accrue on the unpaid portion of the Call Option Price at the rate per annum of LIBOR plus 450 basis points from the Call Option Price Determination Date to, but excluding, the date paid. Delivery of certificates or other instruments evidencing the Membership Interests that Triarc has exercised its right to purchase pursuant to this Section 9.10, duly endorsed for transfer and free and clear of all Liens, shall be made on such date against payment in cash of the applicable Call Option Price. At the closing, all the parties to the transaction shall execute such additional documents and take such further actions as are otherwise reasonably necessary or appropriate to effect the purchase and sale of such Membership Interests. The fees, costs and expenses of the Investment Banking Firm selected in accordance with the Selection Procedures to determine the applicable Call Option Price shall be paid by the Company. (g) If, within one year after the exercise of any Call Option (other than any Call Option under clause (iii), (iv) or (vi) of Section 9.10(c)), a Triarc Affiliated Party enters into a definitive agreement with respect to the Transfer to a Third 63 Party (other than in connection with a Company Sale) of Membership Interests of the same Class of Interests that were subject to such Call Option in a transaction not covered by Section 9.10(h) pursuant to which the Call Option Sellers would have received a greater purchase price for the Membership Interests subject to such Call Option than the applicable Call Option Price, then Triarc shall pay such Call Option Sellers, simultaneously with the consummation of such Transfer, an amount equal to such greater amount that such Call Option Sellers would have received in such Transfer less the applicable Call Option Price actually paid to such Call Option Sellers, payable at Triarc's option in cash or in the form of consideration that Triarc is entitled to receive in such Transfer (such non-cash consideration to be valued at the same value applicable in such Transfer). (h) If, within two years after the exercise of any Call Option (other than any Call Option under clause (iii), (iv) or (vi) of Section 9.10(c)), a definitive agreement with respect to a Company Sale to a Third Party is entered into pursuant to which the Call Option Sellers would have received a greater purchase price for the Membership Interests subject to such Call Option than the applicable Call Option Price, then Triarc shall pay such Call Option Sellers, simultaneously with the consummation of such Company Sale, an amount equal to such greater amount that such Call Option Sellers would have received in such Company Sale less the applicable Call Option Price actually paid to such Call Option Sellers, payable at Triarc's option in cash or in the form of consideration that Triarc is entitled to receive in such Company Sale (such non-cash consideration to be valued at the same value applicable in such Company Sale). 9.11 PUT RIGHTS. (a) At any time and from time to time on or after the third anniversary of the Closing Date, the Sachs Affiliated Parties shall have the right (but not the obligation) to require Triarc to purchase, at the Standard Price, up to 100% of the Membership Interests held by the Sachs Affiliated Parties at such time; PROVIDED, that so long as Sachs is employed by the Company or any of its Subsidiaries at such time, the Sachs Affiliated Parties may not require Triarc to purchase an amount of Membership Interests that would result in the Sachs Affiliated Parties holding less than the lesser of (A) one-third of the Membership Interests held by the Sachs Affiliated Parties at such time and (B) one-third of the Membership Interests held by SCM as of the Closing Date. (b) At any time and from time to time on or after the third anniversary of the Closing Date and prior to the fourth anniversary of the Closing Date, the Roberts Affiliated Parties shall have the right (but not the obligation) to require Triarc to purchase, at the Standard Price, an amount of their Membership Interests not to exceed in the aggregate up to the greater of (A) one-third of the Membership Interests held by the Roberts Affiliated Parties at such time or (B) one-third of the Membership Interests held by Roberts as of the Closing Date. (c) At any time and from time to time on or after the fourth anniversary of the Closing Date and prior to the fifth anniversary of the Closing Date, each of the Roberts Affiliated Parties shall have the right (but not the obligation) to 64 require Triarc to purchase, at the Standard Price, an amount of their Membership Interests not to exceed in the aggregate the lesser of (i) the greater of (A) two-thirds of the Membership Interests held by the Roberts Affiliated Parties at such time and (B) two-thirds of the Membership Interests held by Roberts as of the Closing Date less the amount of Membership Interests that the Roberts Affiliated Parties sold to Triarc pursuant to Section 9.11(b) and (ii) the greater of (A) 50% of the Membership Interests held by the Roberts Affiliated Parties at such time and (B) 50% of the Membership Interests held by Roberts as of the Closing Date. (d) At any time and from time to time on or after the fifth anniversary of the Closing Date, each of the Roberts Affiliated Parties shall have the right (but not the obligation) to require Triarc to purchase, at the Standard Price, an amount of their Membership Interests not to exceed in the aggregate during any one calendar year the lowest of (i) 100% of the Membership Interests held by the Roberts Affiliated Parties at such time, (ii) 50% of the Membership Interests held by Roberts as of the Closing Date; PROVIDED, that so long as Roberts is employed by the Company or its Subsidiaries at such time, the Roberts Affiliated Parties may not require Triarc to purchase more than an amount of Membership Interests that would result in the Roberts Affiliated Parties holding less than the lesser of (A) one-third of the Membership Interests held by the Roberts Affiliated Parties at such time and (B) one-third of the Membership Interests held by Roberts as of the Closing Date. (e) Notwithstanding anything to the contrary set forth in paragraphs (a), (b), (c) and (d) above: (i) if Sachs is terminated by the Company and its Subsidiaries without Cause (other than due to his death or Disability), then the Sachs Affiliated Parties shall have the right (but not the obligation), exercisable within one year after the occurrence of such event, to require Triarc to purchase, at the Guaranteed Price, all (but not less than all) of the Membership Interests held by SCM as of the Closing Date, and at the Standard Price, all (but not less than all) of their other Membership Interests; (ii) if a Triarc Key Person Event occurs, then the Sachs Affiliated Parties shall have the right (but not the obligation), exercisable within 90 days after the occurrence of such event, to require Triarc to purchase, at the Guaranteed Price, all (but not less than all) of the Membership Interests held by SCM as of the Closing Date, and at the Standard Price, all (but not less than all) of their other Membership Interests; PROVIDED, HOWEVER, that unless Sachs has ceased to be employed by the Company and its Subsidiaries concurrently with or prior to the time of such exercise, the Sachs Affiliated Parties shall not be permitted to exercise such right in respect of an amount of their Membership Interests that would result in the Sachs Affiliated Parties holding less than the lesser of (x) one-third of the Membership Interests held by the Sachs Affiliated Parties at such time and (y) one-third of the Membership Interests held by SCM as of the Closing Date; 65 (iii) if (A) Sachs ceases to be employed by the Company and its Subsidiaries due to his death or Disability, (B) a Triarc Change in Control occurs or (C) Sachs is entitled to, and does, request delivery of a fairness opinion under Section 7.7, then the Sachs Affiliated Parties shall have the right (but not the obligation), exercisable within 90 days after the occurrence of such event, to require Triarc to purchase, at the Standard Price, all (but not less than all) of their Membership Interests; PROVIDED, HOWEVER, that in the case of clause (B), unless Sachs has ceased to be employed by the Company and its Subsidiaries concurrently with or prior to the time of such exercise, the Sachs Affiliated Parties shall not be permitted to exercise such right in respect of an amount of their Membership Interests that would result in the Sachs Affiliated Parties holding less than the lesser of (x) one-third of the Membership Interests held by the Sachs Affiliated Parties at such time and (y) one-third of the Membership Interests held by SCM as of the Closing Date; (iv) if any Triarc Affiliated Party or the Company proposes to enter into a definitive agreement in respect of a Company Sale to a Third Party, such Person shall promptly notify the Sachs Affiliated Parties in writing (it being understood that an Offering Notice or Drag-Along Notice shall satisfy this requirement), and the Sachs Affiliated Parties shall have the right (but not the obligation), exercisable within 20 Business Days after the occurrence of such event, to require Triarc to purchase (concurrently with and subject to the closing of such Company Sale), at the Standard Price, all (but not less than all) of their Membership Interests; PROVIDED, however, that unless Sachs has ceased to be employed by the Company and its Subsidiaries concurrently with or prior to the time of such exercise (or has tendered an irrevocable resignation to become effective upon completion of such Company Sale), the Sachs Affiliated Parties shall not be permitted to exercise such right in respect of an amount of their Membership Interests that would result in the Sachs Affiliated Parties holding less than the lesser of (x) one-third of the Membership Interests held by the Sachs Affiliated Parties at such time and (y) one-third of the Membership Interests held by SCM as of the Closing Date; (v) if (A) a Material Company Operating Agreement Breach Event occurs or (B) Sachs resigns from his employment with the Company and its Subsidiaries for Good Reason in accordance with the provisions of the Sachs Employment Agreement governing resignation for Good Reason, then the Sachs Affiliated Parties shall have the right (but not the obligation), exercisable within one year after the occurrence of such event, to require Triarc to purchase, at the Standard Price, all (but not less than all) of their Membership Interests; PROVIDED, HOWEVER, that in the case of clause (A), unless Sachs has ceased to be employed by the Company and its Subsidiaries concurrently with or prior to the time of such exercise, the Sachs Affiliated Parties shall not be permitted to exercise such right in respect of an amount of their Membership Interests that would result in the Sachs Affiliated Parties holding less than the lesser of (x) one-third of the Membership Interests held by the Sachs Affiliated 66 Parties at such time and (y) one-third of the Membership Interests held by SCM as of the Closing Date; (vi) if (A) Roberts ceases to be employed by the Company and its Subsidiaries due to his death or Disability or (B) a Triarc Change in Control occurs, then the Roberts Affiliated Parties shall have the right (but not the obligation), exercisable within 90 days after the occurrence of such event, to require Triarc to purchase, at the Standard Price, all (but not less than all) of their Membership Interests; PROVIDED, HOWEVER, that in the case of clause (B), unless Roberts has ceased to be employed by the Company and its Subsidiaries concurrently with or prior to the time of such exercise, the Roberts Affiliated Parties shall not be permitted to exercise such right in respect of an amount of their Membership Interests that would result in the Roberts Affiliated Parties holding less than the lesser of (x) one-third of the Membership Interests held by the Roberts Affiliated Parties at such time and (y) one-third of the Membership Interests held by Roberts as of the Closing Date; and (vii) if (A) Roberts is terminated by the Company and its Subsidiaries without Cause (other than due to his death or Disability) or (B) Roberts resigns from his employment with the Company and its Subsidiaries for Good Reason in accordance with the provisions of the Roberts Employment Agreement governing resignation for Good Reason, then the Roberts Affiliated Parties shall have the right (but not the obligation), exercisable within one year after the occurrence of such event, to require Triarc to purchase, at the Standard Price, all (but not less than all) of their Membership Interests. (f) Any Put Right shall be exercisable upon delivery of a written notice (the "PUT RIGHT NOTICE") by the applicable Sachs Affiliated Parties and/or Roberts Affiliated Parties (the "PUT RIGHT SELLERS") to Triarc and the Company. The Put Right Notice once delivered shall be irrevocable. The Put Right Notice shall include the amount of Membership Interests that the applicable Put Right Sellers have exercised their right to sell to Triarc pursuant to this Section 9.11. The date when the Put Option Price is determined by the Investment Banking Firm selected in accordance with the Selection Procedures shall be the "PUT OPTION PRICE DETERMINATION DATE". (g) Prior to the Put Option Price Determination Date, subject to any limitations or restrictions contained in any financing arrangements of the Company or any of its Subsidiaries or applicable law (including the Act), the Company shall distribute to each Put Right Seller an amount equal to the sum of (i) the amount as of such date of the unrecovered Capital Contributions, if any, made by such Put Right Seller subsequent to the Closing Date in respect of its Membership Interests being put and (ii) the Available Net Cash and Permitted Investments that such Put Right Seller would have received pursuant to a distribution made under Section 5.1(c)(i) for the then current fiscal year had such amounts been determined and such distribution been made as of the end of the most recently completed fiscal quarter. 67 (h) The purchase of the Membership Interests that Triarc is required to purchase pursuant to this Section 9.11 shall occur no later than the 90th day (or if such day is not a Business Day, the first Business Day thereafter), following the Put Right Price Determination Date as described above; PROVIDED, that if in connection with the exercise of any Put Right, the aggregate applicable Put Right Price to be paid to the Put Right Sellers is $50 million or greater, then such purchase shall occur no later than the 270th day (or if such day is not a Business Day, the first Business Day thereafter) after the Put Right Price Determination Date. Notwithstanding the foregoing, such purchase in respect of the exercise of any Put Right pursuant to Section 9.11(e)(iv) shall occur at, and be subject to, the closing of the Company Sale to a Third Party. Interest shall accrue on the unpaid portion of the Put Right Price at the rate per annum of LIBOR plus 450 basis points from the Put Right Price Determination Date to, but excluding, the date of payment. Delivery of certificates or other instruments evidencing the Membership Interests that Triarc is required to purchase pursuant to this Section 9.11, duly endorsed for transfer and free and clear of all Liens, shall be made on such date against payment in cash of the applicable Put Right Price. At the closing, all the parties to the transaction shall execute such additional documents and take such further actions as are otherwise reasonably necessary or appropriate to effect the purchase and sale of such Members Interests. The fees, costs and expenses of the Investment Banking Firm selected in accordance with the Selection Procedures to determine the applicable Put Right Price shall be paid by the Company. 9.12 OTHER WITHDRAWALS. (a) A Class B Member (other than any Roberts Affiliated Party or Triarc Affiliated Party) and a Class C Member may withdraw (in full and not in part) at any time, upon three Business Days' prior written notice to the Board of Directors, and the Company by Members holding a majority of the Voting Membership Interests may require any such Class B Member or Class C Member who ceases to be an employee of the Company or any of its Subsidiaries to withdraw (in full and not in part) at any time, upon three Business Days' prior written notice to such Class B Member or Class C Member. (i) With respect to any such withdrawing Class B Member or Class C Member, the Company may, at the sole discretion of the Board of Directors, pay such withdrawing Class B Member or Class C Member in respect of his, her or its Class B Interests and/or Class C Profits Only Interests that are vested at such time (the "VESTED INTERESTS"), the Earnings Payout Value (or such larger amount as the Board of Directors determines in its sole discretion) as of (x) the date of such withdrawal (with respect to Vested Interests other than those referred to in clause (y)) or (y) with respect to any Vested Interest that vested within six months prior to the date of such withdrawal, the date that is six months and one day after such vesting date (such applicable date as to any Vested Interest being the "VALUATION DATE"), which payment shall be made in accordance with Section 9.12(b). If the Board of Directors does not elect to so pay the Earnings Payout Value in respect of such Vested Interests to such withdrawing Class B Member or Class 68 C Member, such withdrawing Class B Member or Class C Member shall be entitled at his, her or its election either to continue to receive distributions and allocations of profits and losses under Article V in respect of the Vested Interests or receive payment in an amount equal to the value of his, her or its Capital Account, which payment shall be made in accordance with Section 9.12(b) below; PROVIDED, HOWEVER, that if such withdrawing Class B Member or Class C Member elects to continue to receive distributions and allocations of profits and losses in respect of the Vested Interests, the Company may, at any time thereafter, elect to purchase the Vested Interests for the Earnings Payout Value as of the date of such election for such Vested Interest minus any distribution received since the notice of withdrawal, such payment to be made in accordance with Section 9.12(b). Class C Profits Only Interests shall vest in accordance with the terms set forth in the applicable agreement pursuant to which such interests were granted or as otherwise determined by the Board of Directors in its sole discretion. Class B Interests shall vest on the earliest of the fifth anniversary of the date such interests were issued, the death of the Member to whom they were originally issued, the termination of employment in accordance with the applicable employment agreement of the employment with the Company or any of its Subsidiaries of the Member to whom they were originally issued without Cause, or by resignation for Good Reason or on account of the Disability of such Member. (ii) Any unvested Class B Interests or unvested Class C Profits Only Interests held by a withdrawing Class B Member or Class C Member shall be forfeited upon withdrawal unless otherwise determined by the Board of Directors in its sole discretion. (b) Subject to any limitations or restrictions under applicable law or contained in any financing arrangements applicable to the Company or any of its Subsidiaries, each withdrawing Member under this Section 9.12 shall be entitled to receive the payments of its Capital Account or Earnings Payout Value as provided for under Section 9.12(a) in respect of his, her or its Vested Interests in three equal annual installments, the first of which shall be paid on the later of (x) the last Business Day of the year in which the withdrawal was made and (y) 120 days after the date of withdrawal; PROVIDED, HOWEVER, that at the discretion of the Board of Directors, such payment may be made in a lump sum payment to be paid within 30 days of the third anniversary of the last Business Day of the year during which the withdrawal was made. Interest shall accrue on unpaid amounts from the date of withdrawal to the date of payment at a rate of interest per annum equal to the rate (determined by the Board of Directors in its sole discretion) at which the Company is at such time able to borrow senior unsecured obligations of a like tenor. Any damages to the Company or any of its Subsidiaries resulting from the withdrawal of such Class B Member or Class C Member from the Company in breach of this Agreement and any other amounts owed by such Member to the Company or any of its Subsidiaries shall be offset against any payment or payments owed such Member under this Section 9.12. Further, any payments pursuant to this Section 9.12 may be accelerated at the sole discretion of the Board of Directors. In no event shall the withdrawal of any such Class B Member or Class C Member, and the payment of his, her 69 or its withdrawal proceeds as contemplated in this Agreement, cause the Company to dissolve or trigger an event of dissolution under Section 10.1. 9.13 CERTAIN MATTERS RELATING TO TRANSFERS. Upon any Transfer (other than any such Transfer made pursuant to Sections 9.10, 9.11 or 9.12) of Membership Interests that includes more than one Class of Interests and/or Profits Interests that would not be entitled to receive the same amount per Percentage Interest at such time if the Company were liquidated in accordance with Section 10.3, the Board of Directors shall reasonably determine in good faith, by the unanimous consent of the Board of Directors, the Fair Market Value of each Member's Membership Interests (based upon a hypothetical liquidation of the Company at such time in accordance with Section 10.3) and the Fair Market Value of all Membership Interests, and the Members agree to share the proceeds related to such Transfer in proportion to the respective Fair Market Values as so determined; PROVIDED, HOWEVER, that in the case of a tag-along Transfer under Section 9.7 or a drag-along Transfer under Section 9.8, the Board of Directors shall determine such Fair Market Values by reference to the price to be paid to the Triarc Affiliated Party or Parties for the Membership Interests being Transferred by them. Notwithstanding the foregoing, if any Director objects in writing to any such determination within 30 days of such determination, the matter shall be submitted to the Investment Banking Firm selected in accordance with the Selection Procedures, and such Investment Banking Firm's determination of the Fair Market Value of each such Class of Interests shall be final, binding and conclusive on the parties; PROVIDED, HOWEVER, that in the case of a tag-along Transfer under Section 9.7 or a drag-along Transfer under Section 9.8, such Investment Banking Firm shall determine such Fair Market Values by reference to the price to be paid to the Triarc Affiliated Party or Parties for the Membership Interests being Transferred by them. The fees, costs and expenses of such Investment Banking Firm shall be paid by the Company. 9.14 TERMINATION UPON QUALIFIED IPO OR COMPANY SALE. The provisions of this Article IX shall terminate and be of no further force and effect upon consummation of the earlier to occur of a Qualified IPO or a Company Sale. ARTICLE X DISSOLUTION, CONTINUANCE, AND WINDING UP 10.1 EVENTS OF DISSOLUTION. The Company shall be dissolved and its affairs shall be wound up only upon the occurrence of the earlier of the following events of dissolution: (a) upon written consent of all of the Members holding Class A Interests; or (b) the entry of a decree of judicial dissolution under the Act. 10.2 WINDING UP. Upon the dissolution under Section 11.11, the Company shall conduct no further business, except for taking such action as shall be 70 necessary for the winding up of the affairs of the Company and the liquidation and the distribution of its assets to the Members and the legal representative or successor in interest to a former Member's Membership Interest pursuant to the provisions of this Agreement. 10.3 DISTRIBUTION UPON LIQUIDATION. Upon dissolution of the Company, the Directors may appoint one or more Directors or Members as liquidating trustee. The liquidating trustee shall proceed diligently to liquidate the Company and wind up its affairs and shall dispose of the assets of the Company as follows: (a) First, to the payment of all debts and liabilities of the Company, including expenses of its liquidation. (b) Second, to the setting up of any reserves which the liquidating trustee may deem necessary for any contingent or unforeseen liabilities or obligations of the Company or of the Members arising out of or in connection with the Company. (c) Third, distribute to the Members that hold Preferred Membership Interests an amount equal to their Unpaid Preferred Returns, in proportion to Unpaid Preferred Returns. (d) Fourth, distribute to the Members that hold Preferred Membership Interests an amount equal to their Unreturned Preferred Contributions, in proportion to Unreturned Preferred Contributions. (e) Fifth, distribute to the Members that hold the Class A Interests and Class B Interests, PRO RATA based on Percentage Interests in effect on the Closing Date with respect to each such Class of Interest, an amount equal to the excess, if any, of (1) the Closing Date Value, over (2) aggregate Capital Return Amounts. (f) Last, distribute the balance to the Members, PRO RATA based on Percentage Interests with respect to each Class of Interests. Until final distribution, the liquidating trustee may continue to operate the business and properties of the Company with all of the power and authority of the Director. As promptly as possible after dissolution and again after final liquidation, the liquidating trustee shall cause an accounting by a firm of independent public accountants of the Company's assets, liabilities, operations and liquidating distributions to be given to the Members. 10.4 RETURN OF CAPITAL CONTRIBUTIONS. The Members and former Members shall look solely to the assets of the Company for the return of their Capital Contributions, and if the Company's assets remaining after the payment or discharge of the debts, obligations, and liabilities of the Company are insufficient to return their Capital Contributions, they shall have no recourse against the remaining Members or the Board of Directors. 71 10.5 NO DISSOLUTION. The Company shall not be dissolved by any admission of additional Members or substitute Members, or by the death, retirement, withdrawal, resignation, removal or Bankruptcy of any Member from the Company. ARTICLE XI MISCELLANEOUS 11.1 CONFIDENTIAL INFORMATION. Except as otherwise provided below, each Member shall, and shall use its best efforts to cause each of its Affiliates to, keep confidential all information concerning the Company's operations and shall not disclose or use in any manner any such confidential information. The foregoing confidentiality requirements shall be subject to each Member's (a) obligation to disclose any such confidential information as required by applicable laws or regulations, pursuant to a request or order under applicable laws and regulations (including those of any stock exchange or other self-regulatory organization), or pursuant to a subpoena or other legal process, it being understood that Triarc is a company subject to reporting obligations under the Exchange Act and an issuer with common stock listed on the New York Stock Exchange, (b) right to disclose any confidential information to its own employees, officers, directors, auditors, counsel and other professional advisors to the extent they agree to be bound by the provisions of this Section 11.1 and (c) right to disclose any confidential information to prospective lenders or investors of the Company (and in the case of Triarc, to prospective lenders and investors of Triarc or any of its Affiliates and prospective Transferees of Membership Interests held by any Triarc Affiliated Party). Each of the parties hereto agrees to notify the other parties hereto promptly after receipt of any subpoena or other formal process requiring the disclosure or use of any confidential information unless the party subject to such subpoena or other formal process believes in good faith and upon advice of counsel that it is under an obligation not to make such notification. Notwithstanding the foregoing provisions, the obligation of confidentiality contained in this Section 11.1 shall not apply to any such confidential information which is or becomes generally known to the public other than by a breach of this Section 11.1. 11.2 NON-COMPETE AND OTHER RESTRICTIVE COVENANTS. As further inducement for each of the parties to enter into this Agreement and as an inducement for Triarc to enter into the Purchase Agreement and to consummate the transactions thereunder, as additional consideration to or for the benefit of each of the Members, and as consideration for the payment of the amounts set forth in Sections 9.10, 9.11 and 9.12, as the case may be, each Subject Member acknowledges and agrees that (i) through the Subject Member's association with the Company, the Subject Member has and will continue to learn valuable trade secrets and other confidential, proprietary information, including the Company's trading program and techniques, information relating to trading counterparties, clients and potential client lists, relating to the business of the Company, (ii) the Subject Member's skills, knowledge and services to the Company are unique in nature, (iii) the Company's business is international in scope and (iv) the Company would be irreparably damaged if the Subject Member or an Affiliate of the Subject Member 72 (including Sachs, with respect to the holder of the Sachs Interest regardless of whether he is an Affiliate of a Permitted Transferee of such holder) were to provide services to any Person in violation of the restrictions contained in this Agreement. Accordingly, as a condition of and inducement to the other parties hereto to enter into this Agreement, the Subject Member agrees that during the Restricted Period, and without limiting any similar restriction in such Subject Member's employment agreement with the Company or any of its Subsidiaries, neither the Subject Member nor any Affiliate of the Subject Member (or, in the case of the holder of the Sachs Interest, Sachs, regardless of whether he is an Affiliate of a Permitted Transferee of such holder) shall, directly or indirectly, without the prior written consent of the Board of Directors which consent may (or may not) be provided at the sole discretion of the Board of Directors: (a) engage or participate in (including as an employee, owner, partner, member, shareholder, officer, director, advisor, employee, consultant, agent, financing source or otherwise), or render services for, any person or entity engaged in a Competing Business; PROVIDED, HOWEVER, that nothing in this Agreement shall prevent the Subject Member from acquiring or owning, as a passive investment, up to five percent (5%) of the outstanding voting securities of an entity engaged in a Competing Business which is publicly traded on any recognized national securities market; (b) take any action with the intention of diverting from the Company or any controlled Affiliate of the Company any funds or investment accounts with respect to which the Company or any controlled Affiliate of the Company is providing Investment Management Services; provided, however that this clause (b) shall not be applicable to Persons who are also members of the Immediate Family of the Subject Member (or in the case of a holder of the Sachs Interest, an Immediate Family member of Sachs); (c) solicit or attempt to solicit any Person to utilize Competing Services who, to the knowledge (whether actual knowledge or knowledge that the Subject Member reasonably should have possessed under the circumstances) of such Subject Member, (i) is or has been a customer of the Company at any time during the Restricted Period or (ii) if the Subject Member's employment with the Company has terminated (or, in the case of a holder of the Sachs Interest, Sachs's employment with the Company has terminated) is a Person to whom the Company or any of its controlled Affiliates has, during the one year period preceding such Subject Member's termination of employment with the Company and its Subsidiaries (or, in the case of a holder of the Sachs Interest, Sachs's employment), offered to provide Investment Management Services but who is not on the date of such Subject Member's termination of employment with the Company and its Subsidiaries, receiving Investment Management Services from the Company or any of its controlled Affiliates ("Potential Client Offers"); provided, however, that such Potential Client Offers shall not include (i) advertising, if any, through mass media in which the offer, if any, is available to the general public, such as magazines, newspapers and sponsorships of public events and (ii) "cold calls" and mass-mailing form letters, in each case to the extent not directed towards any particular Person and not resulting in an indication of interest or a request for further information; provided further, that this clause (c) shall not be applicable to Persons who are also members of the 73 Immediate Family of the Subject Member (or in the case of a holder of the Sachs Interest, an Immediate Family member of Sachs); (d) solicit or attempt to solicit any Person to cease doing business with the Company who, to the knowledge (whether actual knowledge or knowledge that the Subject Member reasonably should have possessed under the circumstances) of such Subject Member, is or has been a customer, supplier, licensor, licensee or other business relation of the Company at any time (A) up to the date hereof or (B) during the Restricted Period; provided, however that this clause (d) shall not be applicable to Persons who are also members of the Immediate Family of the Subject Member (or in the case of a holder of the Sachs Interest, an Immediate Family member of Sachs); or (e) induce, hire, employ, attempt to hire or employ or solicit any person employed by or providing consulting services to the Company or any of its controlled Affiliates or any person who was employed by or providing consulting services to the Company or any of its controlled Affiliates during the 18 months preceding such hiring or employment or attempted hiring or employment, in order to accept employment or association with himself or herself, or any other person, firm, corporation or entity whatsoever; approach any such person for any such purpose, or authorize or knowingly cooperate with the taking of any such action by any other person, firm, corporation or entity (excluding for all purposes of this Section 11.2(e), secretaries, drivers and persons holding similar positions). If any court determines that any of the covenants set forth in this Section 11.2, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall have the power to reduce the duration or scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable. 11.3 FINANCIAL INFORMATION. Unless the Board of Directors unanimously determines otherwise, the Company shall annually engage independent auditors (which auditors shall be selected by Triarc so long as any Triarc Affiliated Party holds any of the Triarc Interest) who will be requested to complete its review of each of the quarterly consolidated financial statements of the Company and its Subsidiaries (which quarterly consolidated financial statements shall be prepared by the Company in accordance with GAAP) in accordance with the procedures set forth in Statement on Auditing Standards No. 71 and to audit each of the annual consolidated financial statements of the Company and its Subsidiaries (which annual financial statements shall be prepared by the Company in accordance with GAAP). The Company shall furnish to each Member such annual financial statements within such period following the Company's fiscal year end as Triarc shall specify from time to time to permit Triarc to comply with its public reporting obligations under the Exchange Act and shall furnish to Triarc such other information as Triarc may request from time to time. 11.4 INSPECTION. The Company shall permit representatives of the Members to visit and inspect any of its properties, to examine its corporate, financial and 74 operating records and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with their respective directors, officers and independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably requested upon reasonable advance notice to the Company. 11.5 LEGEND ON MEMBERSHIP INTEREST CERTIFICATES. If the Membership Interests are certificated, each certificate representing Membership Interests shall bear legends substantially in the following form: "THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO A FOURTH AMENDED AND RESTATED OPERATING AGREEMENT DATED AS OF JUNE 26, 2004, AMONG DEERFIELD & COMPANY LLC AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF DEERFIELD & COMPANY LLC." "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS." The Company shall make a notation regarding the above restriction in its books, and no Membership Interests shall be Transferred on the books of the Company except in accordance with this Agreement and the above restrictions. 11.6 CONVERSION OR MIGRATION OF COMPANY. (a) If the Board of Directors shall approve a recapitalization of the Company and/or its Subsidiaries to be effected immediately prior to the consummation of a Qualified IPO, the Company and each Member shall take all necessary or desirable actions (including to vote its Voting Membership Interests (and its other Membership Interests to the extent entitled under the Act to vote) in favor thereof) as the Board of Directors may reasonably request to convert the Company to a corporate form (whether by merger, conversion or otherwise) or otherwise combine its Subsidiaries with, and/or cause them to be owned (directly or indirectly) by, a single corporation (any such corporation, a "POST-CONVERSION CORPORATION" and such transaction, the "CONVERSION TRANSACTION"). Any such Conversion Transaction shall, to the extent reasonably practicable, minimize the federal, state, local or foreign income tax liabilities of the Company and the Members as a result thereof. In the Conversion Transaction, the Members shall receive in respect of their Common Membership Interests shares of common stock of the Post-Conversion Corporation (valued at the price at which shares of 75 common stock are sold to the public in such Qualified IPO) equal to the Fair Market Value of the Common Membership Interests being so exchanged determined by the Investment Banking Firm selected in accordance with the Selection Procedures, and in respect of their Preferred Membership Interests shares of preferred stock in such amount and having such terms and provisions as are substantially identical to such Preferred Membership Interests being exchanged; PROVIDED THAT the Triarc Affiliated Parties shall be entitled to receive in such Conversion Transaction shares of a class of common stock of the Post-Conversion Corporation that are entitled to ten (10) votes per share, and each other Member shall be entitled to receive in such Conversion Transaction shares of a class of common stock of the Post-Conversion Corporation that are entitled to one (1) vote per share. In connection with such Conversion Transaction, the organizational documents of the Post-Conversion Corporation and/or a shareholders' or other agreement to be entered into by the Post-Conversion Corporation and the Members shall afford the Members with the rights, privileges and obligations of Members provided for under this Agreement in all material respects and to the extent applicable to such new corporation, and the Company shall negotiate in good faith an agreement with the Members pursuant to which the Triarc Affiliated Parties and the Sachs Affiliated Parties are granted customary demand registration rights (which demand registration rights shall be granted consistent with the amount of Membership Interests that the Triarc Affiliated Parties and the Sachs Affiliated Parties hold at such time) and piggyback registration rights and other Members are granted customary piggyback registration rights. Each Member further agrees that automatically upon consummation of the Conversion Transaction, this Agreement (other than Sections 11.1 and 11.2) shall terminate and be without further force and effect; PROVIDED, such termination shall not relieve a party from liability for prior breach hereof. The fees, costs and expenses of the Investment Banking Firm selected in accordance with the Selection Procedures to determine the Fair Market Value of the Common Membership Interests being exchanged in the Conversion Transaction shall be paid by the Company. (b) The Board of Directors shall be permitted to determine that the Company shall migrate at any time to a Delaware limited liability company, including by means of a merger, conversion or reorganization or otherwise (the "MIGRATION TRANSACTION"), in which case each of the Members hereby agrees that it will vote its Voting Membership Interests (and its other Membership Interests to the extent entitled under the Act to vote) to approve such Migration Transaction and the limited liability company agreement of such new Delaware limited liability company and take such other actions as shall be necessary to effect such Migration Transaction; PROVIDED, that the Board of Directors shall have reasonably determined in good faith that such Migration Transaction would not adversely affect (i) the Members' respective tax liabilities (other than any such effect resulting from an entity-level tax on the Company arising from such Migration Transaction), (ii) the Members' Capital Accounts or other substantive economic rights and (iii) the Company's classification as a partnership for United States federal income tax purposes. In connection with any such Migration Transaction, the limited liability company agreement of such new Delaware limited liability company will be such that the Members will continue to enjoy the rights, privileges and obligations of Members provided for under this Agreement in all respects (except for any differences arising by application of Delaware law) and to the extent applicable to such new 76 Delaware limited liability company; PROVIDED, that such limited liability company agreement shall provide that the affirmative vote of holders of a majority in interest of the Voting Membership Interests, voting together as a single class, shall be required to approve the following actions with respect to such new Delaware limited liability company: (i) a transfer or continuance in accordance with Section 18-213 of the DLLCA; (ii) a conversion in accordance with Section 18-216 of the DLLCA; (iii) the admission of a Person as a member in accordance with Section 18-301 of the DLLCA; and (iv) the assignment of a limited liability company interest in accordance with Section 18-702 of the DLLCA. Each Member further agrees that automatically upon consummation of the Migration Transaction, this Agreement shall terminate and be without further force and effect; PROVIDED, such termination shall not relieve a party from liability for prior breach hereof. (c) It is understood and agreed by all Members that the power, authority and discretion of the Board of Directors to effect the Conversion Transaction or Migration Transaction may result in benefits to one or more Members (or their Affiliates) that may not be enjoyed by all Members and may result in disadvantageous consequences to one or more Members that are not suffered by all Members. Nonetheless, no Member shall have any cause of action against, or right to receive any compensation from, the Company or any affiliate thereof as a result or in respect of any Conversion Transaction or Migration Transaction or the disparate effects thereof on any one or more Members or the Board of Directors' failure to effect any Conversion Transaction or Migration Transaction. 11.7 TAX, ACCOUNTING AND OTHER FINANCIAL MATTERS WITH RESPECT TO FUNDS. (a) As long as Triarc is required to consolidate the financial position, results of operations and cash flows of any pooled investment vehicle to which the Company or any of its Subsidiaries provides Investment Management Services (each, a "FUND") or report its investment in such Fund on the equity method in accordance with GAAP (such period, the "COMPLIANCE PERIOD"), the Company shall cause such Fund to establish and implement all accounting, financial reporting and bookkeeping policies and procedures, and to prepare and deliver all tax, accounting, financial and other information, at the Company's expense, in such form and manner and at such times as Triarc may request in its sole discretion to enable Triarc to satisfy its tax, accounting, financial reporting, bookkeeping and other obligations under applicable laws, rules and regulations (including those of the Securities and Exchange Commission (the "SEC"), any stock exchange or other self-regulatory organization) and its obligations under the SOA. Without limiting the generality of the foregoing, during the Compliance Period, the Company shall take, or shall cause such Fund to take, the actions specified on EXHIBIT D-2 in such form and manner and within the time period determined in each case by Triarc in its sole discretion. (b) The Company shall, or shall cause each Fund to, retain independent auditors selected by Triarc in its sole discretion. Upon the request of Triarc, the Company shall, or shall cause such Fund to, (i) use its best efforts to cause its 77 independent auditors to deliver to the SEC any auditor's consent that is required to be included in any filing with the SEC that includes or incorporates by reference the financial statements of such Fund and (ii) to the extent Triarc or any of its Affiliates conducts or intends to conduct an offering of securities (and if the registration statement, prospectus or offering memorandum for such offering includes or incorporates by reference the financial statements relating to such Fund), use its best efforts to cause its independent auditors to deliver a letter containing statements and information of the type ordinarily included in accountant `s "comfort letters" with respect to the financial statements and financial information relating to such Fund contained or incorporated by reference in any such document relating to any such offering, in the case of each of (i) and (ii) above, within the time period reasonably requested by Triarc or any of its Affiliates. In addition, in connection with any SEC filing required to be made by Triarc or any of its Affiliates (or any SEC review of such filing), the Company shall, or shall cause such Fund to, permit Triarc and its authorized representatives to have reasonable access, during normal business hours and upon reasonable advance notice, to the properties, books and records of such Fund, the Company or any of their respective Affiliates relating to such Fund solely for the purpose of preparing any such SEC filing or responding to SEC questions, comments or requests on such SEC filing, and to cause such Fund and such Fund's representatives to cooperate fully in such preparation or response. 11.8 COUNTERPARTS. This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument. 11.9 NOTICES. All notices, requests, or consents provided for or permitted to be given under this Agreement must be in writing in the United States or other foreign national mail, addressed to the recipient, postage paid, and registered or certified with return receipt requested or by delivering that writing to the recipient in person or by courier. A notice, request, or consent given under this Agreement is effective upon receipt by the Person who is intended to receive it, or if mailed, on the third Business Day after deposit in the mail. All notices, requests, and consents to be sent to a Member must be sent to or made at the address given for that Member on EXHIBIT A or such other address as that Member may specify by notice to the other Directors. 11.10 ENTIRE AGREEMENT. This Agreement and its exhibits constitute the entire agreement of the Members relating to the Company. 11.11 EFFECT OF WAIVER OR CONSENT. A waiver or consent, express or implied, of or to any breach or default by any Person in the performance by that Person of its obligations with respect to the Company is not a waiver or consent of or to any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect to the Company. No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right. 78 11.12 AMENDMENT OR MODIFICATION. Subject to Section 7.2(d), this Agreement may be amended or modified from time to time only by a written instrument executed by the Company and Members holding a majority of Voting Membership Interests; PROVIDED, HOWEVER, that no amendment that materially adversely affects any Member (in his, her or its capacity as a Member) in a manner different than the other Members may be made without the consent of such Member. 11.13 BINDING EFFECT; THIRD PARTY BENEFICIARIES. Subject to the restrictions on Transfers set forth in this Agreement, this Agreement is binding on and inures to the benefit of the Members and their respective heirs, legal representatives, successors, and assigns. Except as provided in Section 8.13, none of the provisions in this Agreement shall be for the benefit of or enforceable by any Person other than the parties to this Agreement and their respective successors and assigns. 11.14 SEVERABILITY. If any provision of this Agreement or its application to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of that provision to other Persons or circumstances shall not be affected, and that provision shall be enforced to the greatest extent permitted by law. 11.15 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; DISPUTE RESOLUTION. (a) THIS AGREEMENT, AND ALL CLAIMS ARISING UNDER, RELATED TO, OR IN CONNECTION THEREWITH, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC SUBSTANTIVE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. (b) EACH PARTY TO THIS AGREEMENT, BY ITS EXECUTION HEREOF, (A) HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE OF ILLINOIS, COOK COUNTY OR THE STATE OF NEW YORK, NEW YORK COUNTY OR THE UNITED STATES DISTRICT COURT LOCATED IN THE STATE OF ILLINOIS, COOK COUNTY OR THE STATE OF NEW YORK, NEW YORK COUNTY FOR THE PURPOSE OF ANY AND ALL ACTIONS, SUITS OR PROCEEDINGS ARISING IN WHOLE OR IN PART OUT OF, RELATED TO, BASED UPON OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, (B) HEREBY WAIVES TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY SUCH ACTION BROUGHT IN ONE OF THE ABOVE-NAMED COURTS SHOULD BE DISMISSED ON GROUNDS OF FORUM NON CONVENIENS, SHOULD BE 79 TRANSFERRED TO ANY COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS, OR SHOULD BE STAYED BY REASON OF THE PENDENCY OF SOME OTHER PROCEEDING IN ANY OTHER COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS, OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY AGREES NOT TO COMMENCE ANY SUCH ACTION OTHER THAN BEFORE ONE OF THE ABOVE-NAMED COURTS NOR TO MAKE ANY MOTION OR TAKE ANY OTHER ACTION SEEKING OR INTENDING TO CAUSE THE TRANSFER OR REMOVAL OF ANY SUCH ACTION TO ANY COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS WHETHER ON THE GROUNDS OF INCONVENIENT FORUM OR OTHERWISE. EACH PARTY HEREBY (X) CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION IN ANY MANNER PERMITTED BY ILLINOIS LAW; (Y) AGREES THAT SERVICE OF PROCESS MADE IN ACCORDANCE WITH CLAUSE (X) OR MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.9, SHALL CONSTITUTE GOOD AND VALID SERVICE OF PROCESS IN ANY SUCH ACTION; AND (Z) WAIVES AND AGREES NOT TO ASSERT (BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE) IN ANY SUCH ACTION ANY CLAIM THAT SERVICE OF PROCESS MADE IN ACCORDANCE WITH CLAUSE (X) OR (Y) DOES NOT CONSTITUTE GOOD AND VALID SERVICE OF PROCESS. (c) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 11.15(C) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. (d) All disputes arising in connection with this Agreement shall first be settled through discussions and good faith negotiation. If any dispute cannot be settled through such discussions and negotiation, the parties agree to attempt in good faith to settle such dispute by non-binding mediation, before resorting to litigation. The parties agree to evenly split the costs for such mediation and to keep the dispute confidential during the mediation process. The parties shall mutually agree upon a mediator and, in the event the parties cannot so agree, a mediator will be selected by, and the mediation shall be administered by, JAMS (or any successor thereto). Any such dispute that has not been resolved within thirty (30) days of the initiation of the mediation procedure may be thereafter litigated. Oral and written communications between the parties in connection with such mediation proceedings may not be used as evidence in any subsequent 80 litigation between the parties. The mediation proceedings will occur in Cook County, Illinois or Borough of Manhattan, New York, as determined by JAMS (or any successor thereto). The language of the mediation shall be in English. 11.16 SPECIFIC ENFORCEMENT. Each party acknowledges and agrees that the other party would be irreparably damaged in the event that this Agreement were not performed in accordance with its specific terms or were otherwise breached. It is accordingly agreed that each party hereto shall be entitled to an injunction (without having to post bond or undertake any similar action) to specifically enforce the terms of this Agreement, in addition to any other remedy to which such party may be entitled hereunder, at law or in equity. 11.17 USAGE. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. All terms defined in this Agreement in their singular or plural forms have correlative meanings when used in this Agreement in their plural or singular forms, respectively. Unless otherwise expressly provided, the words "include," "includes" and "including" do not limit the preceding words or terms and shall be deemed to be followed by the words "without limitation." 11.18 HEADINGS. The headings contained in this Agreement are inserted only for reference as a matter of convenience and in no way define, limit, or describe the scope or intent of this Agreement, and shall not affect in any way the meaning or interpretation of this Agreement. 11.19 FURTHER ASSURANCES. In connection with this Agreement and the transactions contemplated by it, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement. 11.20 ELECTION UNDER THE ACT. The Members of the Company hereby agree that the Company and its Members shall be governed by the revised provisions of the Act, as in effect in January 1, 1998. The Members of the Company hereby agree that, pursuant to Section 15-5 of the Act, this Agreement shall be deemed to modify any provisions of the Act to the extent inconsistent with the terms of this Agreement. 11.21 PRIORITY OF AGREEMENT. This Agreement shall control in the event of any conflict between the Agreement and any employment agreement entered into between the Company or DCM and an employee. 11.22 EFFECTIVENESS; TERMINATION. Notwithstanding anything to contrary herein, this Agreement shall not become effective until the Closing has occurred. Upon a termination of the Purchase Agreement pursuant to Article X of the Purchase Agreement, this Agreement shall automatically be terminated and be of no force or effect without any Person being required to take any action. 81 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. The Company: DEERFIELD & COMPANY LLC. By: /s/ Gregory H. Sachs ------------------------------------ Name: Gregory H. Sachs Title: Chairman & Chief Executive Officer and Director Class A Members: TRIARC COMPANIES, INC. By: /s/ Brian L. Schorr ------------------------------------ Name: Brian L. Schorr Title: Executive Vice President and General Counsel SACHS CAPITAL MANAGEMENT LLC By: /s/ Gregory H. Sachs ------------------------------------ Name: Gregory H. Sachs, as Trustee of the Gregory H. Sachs Revocable Trust Title: Member DEERFIELD PARTNERS FUND III LLC By: /s/ Marvin Shrear ------------------------------------ Name: Marvin Shrear for Redleaf Management Company, LLC Title: Manager By: /s/ William Pauly ------------------------------------ Name: William Pauly for Redleaf Management Company, LLC Title: Manager Class B Members: /s/ Scott A. Roberts ----------------------------------------- SCOTT A. ROBERTS /s/ Jonathan W. Trutter ----------------------------------------- JONATHAN W. TRUTTER TRIARC COMPANIES, INC. By: /s/ Brian L. Schorr ------------------------------------ Title: Executive Vice President and General Counsel 82 Class C Members: ----------------------------------------- [NAME] EX-10 4 ex10-5form8k_062804.txt EXHIBIT 10.5 EXHIBIT 10.5 ------------ EXECUTION COPY COMMITMENT AGREEMENT This COMMITMENT AGREEMENT (this "AGREEMENT") is entered into as of June 26, 2004, by and among Triarc Companies, Inc., a Delaware corporation ("TRIARC"), Sachs Capital Management LLC, a Delaware limited liability company ("SCM"), Scott A. Roberts ("ROBERTS") and Deerfield Capital Management LLC, a Delaware limited liability company ("DCM"). RECITALS WHEREAS, Triarc, SCM, Deerfield Partners Fund II LLC, Roberts, Marvin Shrear and Gregory H. Sachs are parties to the Purchase Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the "PURCHASE AGREEMENT"), relating to the sale of certain membership interests in Deerfield & Company LLC ("D&C") to Triarc; WHEREAS, each of Triarc, SCM, Roberts, Jonathan Trutter and the other Members party thereto will execute and deliver, simultaneously herewith, a Fourth Amended and Restated Operating Agreement of D&C, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time, the "OPERATING AGREEMENT"); and WHEREAS, it is a condition precedent to the execution and delivery of the Purchase Agreement and the consummation of the transactions contemplated thereby that each of the parties hereto enter into this Agreement; NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. INVESTMENT BY TRIARC IN THE FUND. Upon the terms and subject to the conditions set forth herein, Triarc or an Affiliate thereof hereby agrees to invest, at the Closing (as defined in the Purchase Agreement), $100,000,000 (the "TRIARC COMMITMENT") in Deerfield Strategy-Select Fund, LLC, a multi-strategy hedge fund to be managed by DCM, which will conduct its business in accordance with the business plan attached as EXHIBIT A hereto (collectively with its offshore feeder equivalent, Deerfield-Strategy Select Fund Ltd., the "FUND"); PROVIDED, HOWEVER, that if as of the Closing the Fund is not, to the satisfaction of Triarc, in its sole discretion, able to comply with the obligations set forth in Section 11.7 of the Operating Agreement in all material respects, to the extent applicable, Triarc shall instead deposit at the Closing the Triarc Commitment in a managed account (the "Managed Account") to be managed by DCM that will invest exclusively in any direct obligations of, or obligations the principal of and interest on are unconditionally guaranteed by, the United States of America until such time as the Fund is, to the satisfaction of Triarc, in its sole discretion, able to comply with such obligations in all material respects, to the extent applicable, at which time the Triarc Commitment shall be invested in the Fund. Notwithstanding anything to the contrary contained herein, Triarc's obligation to invest all or any portion of the Triarc 2 Commitment shall be subject to the execution of definitive agreements related to the organization and management of the Fund on customary market terms for such funds and otherwise reasonably satisfactory in form and substance to Triarc (the "FUND Documents"). If the Triarc Commitment has not been invested in the Fund, but is still invested in the Managed Account as of the nine month anniversary of the Closing, Triarc shall have the right to withdraw the Triarc Commitment, in whole or in part, in one or more transactions upon five business days notice to DCM. Furthermore, following Triarc's initial investment in the Fund, Triarc's obligation to invest, and to maintain the investment of, all or any portion of the Triarc Commitment shall be subject to Triarc's satisfaction in its sole discretion on the date of such initial investment and during the Compliance Period (as defined in the Operating Agreement) that the Fund will be able to comply, and remains in compliance, with Section 11.7 of the Operating Agreement in all material respects, to the extent applicable. 2. INVESTMENT BY SCM AND ROBERTS. Upon the terms and subject to the conditions set forth herein, each of SCM and Roberts hereby agrees to invest in the Fund at the Closing, an amount equal to ten percent (10%) of the after-tax portion of the Estimated Purchase Price (as defined in the Purchase Agreement) received by SCM and Roberts, respectively, pursuant to the Purchase Agreement (each, the "MANAGEMENT COMMITMENT"); PROVIDED, HOWEVER, that if as of the Closing the Fund is not, to the satisfaction of Triarc, in its sole discretion, able to comply with the obligations set forth in Section 11.7 of the Operating Agreement in all material respects, to the extent applicable, each of SCM and Roberts shall instead deposit at the Closing the Management Commitment in a Managed Account to be managed by DCM that will invest exclusively in any direct obligations of, or obligations the principal of and interest on are unconditionally guaranteed by, the United States of America until such time as the Fund is, to the satisfaction of Triarc, in its sole discretion, able to comply with such obligations in all material respects, to the extent applicable, at which time the Management Commitment shall be invested in the Fund. If the Management Commitment has not been invested in the Fund, but is still invested in the Managed Account as of the nine month anniversary of the Closing, each of Sachs and Roberts shall have the right to withdraw their respective portions of the Management Commitment, in whole or in part, in one or more transactions upon five business days notice to DCM. 3. LOCK-UP. Subject to Section 1 above and Section 4 below, each of Triarc, SCM and Roberts may not make a full or partial redemption or withdrawal, as the case may be, of its capital account in the Fund or from its Managed Account pending investment in the Fund, for a period of two years (the "LOCK-UP PERIOD") from the date of its initial investment in the Fund (as to each of Triarc, SCM and Roberts, together with any subsequent investments in the Fund, its "INVESTMENT"). 4. REDEMPTIONS/WITHDRAWALS. (a) Notwithstanding anything herein to the contrary: 3 (i) Triarc may redeem or withdraw in accordance with the provisions governing redemptions by investors in the Fund set forth in the applicable Fund Documents all or a portion of its Investment in the Fund if Triarc's Investment constitutes 20% or less of the aggregate net asset value of the Fund; and (ii) if there is (a) a material adverse change in the business, operations or condition (financial or otherwise) of the Fund, (b) a decline as of the end of any calendar month of more than twenty-five percent (25%) of the Fund's net asset value from the date of Triarc's initial investment in the Fund (excluding any additions to, redemptions by or distributions to investors in the Fund from the capital of the Fund), (c) a failure by DCM or the Fund to hold all necessary registrations, licenses, consents or approvals to carry out its business, or (d) unless Triarc provides its prior written approval to such change, a fundamental change in the investment strategy of the Fund from that described in the Confidential Private Placement Memorandum of the Fund (the "OFFERING MEMORANDUM"), Triarc may redeem or withdraw all or a portion of its Investment upon 10 days prior written notice to DCM; and (iii) SCM and Roberts, as applicable, may redeem or withdraw all or a portion of its Investment in the Fund at any time after (A) the exercise by the Sachs Affiliated Parties (as defined in the Operating Agreement) or the Roberts Affiliated Parties (as defined in the Operating Agreement), as applicable, of their Put Rights (as defined in the Operating Agreement) with respect to all of their remaining Membership Interests (as defined in the Operating Agreement) pursuant to the Operating Agreement or (B) the exercise by Triarc of its Call Option (as defined in the Operating Agreement) with respect to all of the Membership Interests of the Sachs Affiliated Parties or the Roberts Affiliated Parties, as applicable, pursuant to the Operating Agreement. (b) Notwithstanding anything herein to the contrary, if Triarc elects to redeem or withdraw all or a portion of its Investment in the Fund pursuant to this Agreement, each of SCM and Roberts may redeem or withdraw upon the same terms and conditions applicable to Triarc on such redemption or withdrawal by Triarc a portion of its Investment in the Fund equal to an amount no greater than the percentage that the amount that Triarc has so elected to redeem or withdraw bears to the amount of Triarc's Investment at such time. (c) Any partial redemption or withdrawal, as the case may be, by Triarc from the Fund or the Managed Account that is permitted under this Agreement may be made in any amount of not less than $250,000 so long as Triarc's remaining capital account balance in the Fund is at least $1,000,000. (d) If the Fund limits the total amount of redemptions in any quarter, Triarc, SCM and Roberts will be treated on a PRO RATA basis with other investors in the Fund. (e) Each of Triarc, SCM and Roberts will not be charged or obligated to pay any subscription, disposition fees, redemption fees or other similar fees 4 in connection with the acquisition or disposition of such entity's shares or interests, including in the event that such entity's shares or interests are compulsorily redeemed. 5. DISTRIBUTIONS. (a) Distributions from the Fund, in satisfaction of a full redemption or withdrawal, as the case may be, will be made, such that Triarc, SCM or Roberts, as the case may be, receives, within three business days of the effective redemption or withdrawal date, cash in an amount equal to at least 95% of the estimated net asset value of the such entity's capital account or shares in the Fund, as the case may be, on the effective redemption or withdrawal date. (b) The Fund will pay Triarc, SCM or Roberts, as the case may be, interest on the balance of such entity's redemption or withdrawal, as the case may be, from the effective redemption or withdrawal date to the date such balance is actually paid, at a rate per annum equal to the average (calculated weekly) annual 91 day Treasury Bill rate. The Fund will pay the balance (subject to audit adjustments) and all of the accrued interest in cash within five business days after completion of the Fund's monthly books. (c) Distributions from the Fund in satisfaction of a partial redemption or withdrawal, as the case may be, will be made such that Triarc, SCM or Roberts, as the case may be, receives, within three business days of the effective redemption or withdrawal date, cash in an amount equal to 100% of the amount requested to be redeemed or withdrawn. 6. FEES. Notwithstanding the constituent documents of the Fund (the "FUND AGREEMENT"), the management fee borne by each of Triarc, SCM and Roberts on an annual basis shall be equal to 1.5% of such entity's capital account balance in the Fund; PROVIDED, HOWEVER, that the management fee borne by each of Triarc, SCM and Roberts for any amounts deposited in the Managed Account on an annual basis shall be equal to 0.5% of such person's or entity's account balance in the Managed Account. 7. RIGHT OF FIRST REFUSAL. Each of Triarc, SCM and Roberts may have a right of first refusal on additional shares or interests offered by the Fund. Any offering of shares or other interests in a vehicle (other than the Fund) managed by DCM or an affiliate thereof with investment objectives and guidelines substantially similar to those of the Fund will be deemed to be an offering of the Fund. 8. ASSIGNMENT. Each of Triarc, SCM and Roberts may assign its interests in the Fund to any affiliates without the consent of the Fund or DCM. Triarc, SCM and Roberts, as the case may be, will have no obligation to pay any redemption or withdrawal fee or penalty in connection with any such assignment. For purposes of this Agreement, (a) affiliates of any entity (including SCM) shall include any person who is an "affiliate" as defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended from time to time, (b) affiliates of an individual shall include (i) members of such individual's Immediate Family (as defined in the Operating Agreement), (ii) the heirs or legal representatives of any such deceased 5 individual, and (iii) a trust, corporation, partnership or limited liability company, all of the beneficial interests in which shall be held by such individual or such individual's Immediate Family members or such deceased individual's heirs or legal representatives, and (c) affiliates of SCM shall also include any person who would be an affiliate of Gregory H. Sachs if he were a party to this Agreement. 9. NOTICE. DCM will provide written notice to each of Triarc, SCM and Roberts upon the occurrence of: (a) any material amendment or modification to the Fund Agreement; (b) to the knowledge of DCM or any of its representatives, the commencement with respect to the Fund of any tax audit, or other investigations or proceedings with respect to taxes; (c) a termination of the Fund's investment management, administration or custodian agreements or a change in, or termination of, the Fund's legal counsel, administrator, prime broker or auditor; (d) to the knowledge of DCM or any of its representatives, any investigation of the Fund, DCM or their principals by a federal, state or regulatory body with authority over the Fund, DCM or their principals; (e) to the knowledge of DCM or any of its representatives, any administrative, civil or criminal legal actions in which the Fund, DCM or any of their principals are named a party or material witness, or which may limit the Fund's ability to perform its duties; (f) any material changes to investment strategies of the Fund, any material changes to valuation policies relating to the Fund or any material changes relating to soft dollar arrangements; (g) any reduction of aggregate investments in the Fund by any of the members, employees and principals of DCM by twenty percent (20%) or more of their value as of the end of any calendar month; (h) any substantial reduction from the date of the first closing of the Fund of the time commitment of any of Gregory H. Sachs, Scott A. Roberts or Jonathan W. Trutter to the investments, business and operation of the Fund; or (i) any of the events specified in clause (ii) of Section 4(a) above. If such notice is not provided to any of Triarc, SCM or Roberts within 30 days, any redemption or withdrawal fees or penalties with respect to such Person will be waived by the Fund. 6 10. MOST FAVORED NATIONS. DCM hereby confirms and agrees that none of the Fund, DCM or any of their respective affiliates has entered into any side letter or similar agreement or arrangement with any other investor or prospective investor in the Fund on or prior to the date hereof. If the Fund, DCM or any of their respective affiliates shall in the future enter into any side letter or similar agreement or arrangement with a proposed or existing investor in the Fund (collectively, "SIDE Letters"), Triarc, SCM and Roberts shall be promptly furnished with a copy of such Side Letters. DCM, on behalf of the Fund, hereby agrees that Triarc, SCM and Roberts shall have the benefit of any provision in any Side Letter with any investor in the Fund. 11. TAX REPORTING. DCM shall cause the Fund to be treated as a partnership for U.S., state and local tax purposes and to prepare IRS. Form 1065 and Schedules K-1 (and related state and local filings) within 90 days of year end. 12. SUBSEQUENT INVESTMENTS. The terms of the Investment by each of Triarc, SCM and Roberts will also apply to any subsequent investments by Triarc, SCM or Roberts, as the case may be, in the Fund. 13. INSURANCE. DCM shall cause the Fund to maintain with financially sound and reputable insurers, insurance in amounts and against such risks as are customarily maintained by reputable companies under similar circumstances and shall furnish copies of such insurance upon written request by Triarc, SCM or Roberts. 14. AMENDMENT; WAIVER. Any amendment, supplement or modification of this Agreement or any waiver of the terms and conditions hereof shall not be binding upon any party, unless approved in writing by each of the parties hereto. Each party agrees that no failure or delay by another party to this Agreement in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. 15. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to applicable principles of conflict of laws (if as a result the governing law of another jurisdiction would apply). 16. COUNTERPARTS. This Agreement may be executed in counterparts, which, taken together, shall constitute a single original document. 17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO, ON BEHALF OF ITSELF AND EACH OF ITS AFFILIATES, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 18. THIRD PARTY BENEFICIARIES; ASSIGNMENT. This Agreement is not intended to and does not confer upon any person other than the parties hereto any rights, claims or remedies hereunder. Without the written consent of each other party hereto, 7 none of the parties hereto may assign any of its rights or delegate any of its obligations under this Agreement, except that each of Triarc, SCM and Roberts may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any of its affiliates; PROVIDED, that, no such assignment shall relieve Triarc, SCM and Roberts, as the case may be, of any of its obligations under this Agreement. Any purported assignment or delegation in violation of this provision shall be void. 19. ENTIRE AGREEMENT. This Agreement (including the Exhibits), together with the Purchase Agreement, the Operating Agreement and the definitive agreements related to the organization and management of the Fund, sets forth the entire agreement and understanding among the parties relating to the subject matter hereof and supersedes any prior agreement or understanding, whether written or oral, relating to the subject matter hereof. 20. EFFECTIVENESS; TERMINATION. This Agreement shall not become effective until the Closing has occurred. Upon a termination of the Purchase Agreement pursuant to Article X of the Purchase Agreement, this Agreement shall automatically be terminated and be of no force or effect without any of the parties hereto being required to take any action. [Remainder of Page Intentionally Left Blank] 8 IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hereby, have caused this Agreement to be executed as of the date first above written. TRIARC COMPANIES, INC. By: /s/ Edward P. Garden -------------------------------------- Name: Edward P. Garden Title: Executive Vice President DEERFIELD CAPITAL MANAGEMENT LLC By: /s/ Gregory H. Sachs -------------------------------------- Name: Gregory H. Sachs Title: Chairman & Chief Executive Officer and Director SACHS CAPITAL MANAGEMENT, LLC By: /s/ Gregory H. Sachs -------------------------------------- Name: Gregory H. Sachs, as Trustee of the Gregory H. Sachs Revocable Trust Title: Member /s/ Scott A. Roberts ------------------------------------------ SCOTT A. ROBERTS EX-99 5 ex99-1form8k_062804.txt EXHIBIT 99.1 EXHIBIT 99.1 ------------ [GRAPHIC OMITTED - LOGO] [GRAPHIC OMITTED - LOGO] Triarc Companies, Inc. Deerfield & Company LLC 280 Park Avenue 8700 West Bryn Mawr, 12 Floor New York, NY 10017 Chicago, IL 60631 Tel 212-451-3000 Tel 773-380-1600 FOR IMMEDIATE RELEASE CONTACT: ANNE A. TARBELL TRIARC COMPANIES, INC. (212) 451-3030 www.triarc.com -------------- TRIARC TO ACQUIRE A CONTROLLING INTEREST IN DEERFIELD & COMPANY LLC FOR APPROXIMATELY $86.5 MILLION o $100 MILLION CAPITAL COMMITMENT TO SEED NEW DEERFIELD MULTI-STRATEGY HEDGE FUND IS PLANNED o DEERFIELD SENIOR TEAM TO REMAIN IN CURRENT ROLES NEW YORK, NY, AND CHICAGO, IL, JUNE 28, 2004 - Triarc Companies, Inc. (NYSE: TRY; TRY.B) and Deerfield & Company LLC ("Deerfield") announced today that Triarc has entered into a definitive agreement with certain owners of Deerfield concerning the acquisition by Triarc of a majority interest in Deerfield for a cash purchase price of approximately $86.5 million. The purchase price reflects an enterprise value for Deerfield of approximately $145 million. Under the terms of the definitive agreement, Deerfield's senior management, including its Chairman and Chief Executive Officer, Gregory Sachs, its President, Scott Roberts, and its Chief Investment Officer, Jonathan Trutter, will remain in their current roles, and Deerfield's portfolio management teams will remain intact. Deerfield currently has approximately 75 employees, including over 30 investment professionals. Triarc will purchase an approximate 64% economic interest in Deerfield, representing in excess of 90% of the outstanding voting interests. The remainder of the economic and voting interests in Deerfield will be retained or owned by senior management of Deerfield. In connection with the acquisition, Triarc has also committed to invest an additional $100 million at closing to seed a new multi-strategy hedge fund to be managed by Deerfield. The transaction with Deerfield is subject to customary closing conditions for transactions of this type, including, without limitation, the receipt by Deerfield of certain third party consents and other conditions set forth in the definitive agreement. The transaction is expected to close in the 2004 third quarter. Deerfield, a Chicago-based investment manager, offers a diverse range of alternative fixed income strategies to institutional investors. Founded in 1993, Deerfield specializes through its subsidiary, Deerfield Capital Management LLC ("DCM"), in managing government securities, investment grade debt, asset-backed securities, bank loan portfolios and other fixed income asset classes. DCM manages these assets in the form of collateralized debt obligations ("CDOs"), single strategy hedge funds and separate managed accounts. The CDOs invest in bank loans, investment grade corporate bonds, and asset-backed securities. The hedge funds engage in relative value trading of fixed income securities and related instruments. The separate accounts utilize core fixed-income and duration management strategies. As of April 1, 2004, DCM had over $8 billion in assets under management composed of approximately $7.2 billion in CDOs and approximately $0.9 billion in fixed income hedge funds and separate managed accounts. For the 12 months 2 ended December 31, 2003, Deerfield generated revenues of approximately $36.9 million. Triarc and Deerfield have jointly formed an investment adviser to manage the assets of Triarc Deerfield Investment Corporation ("Triarc Deerfield"), a newly-formed business development company that, as previously announced, filed a registration statement with the Securities and Exchange Commission relating to a proposed $500 million initial public offering of its common stock. Upon the consummation of the acquisition of Deerfield by Triarc, Triarc Deerfield will be a wholly-owned subsidiary of Deerfield and an indirect subsidiary of Triarc. Commenting on the Deerfield transaction, Triarc's Chairman and Chief Executive Officer, Nelson Peltz, said: "Immediately accretive to Triarc stockholders, Deerfield is a unique opportunity to establish a platform in the investment advisory business, which we believe has significant future growth potential. Deerfield has a strong management team led by Gregory Sachs, Scott Roberts and Jonathan Trutter, a scalable operational structure, a history of successful innovation, a broad range of fixed income management capabilities, a leading position in the growing CDO market, a strong risk management culture and strong performance across market cycles. We believe that, together with the Deerfield senior team, we can grow Deerfield both organically and through extensions of its existing platform." Deerfield's Chairman and Chief Executive Officer, Gregory Sachs, added: "Deerfield has a proud ten year plus history of innovation in the fixed income markets. Triarc provides not only investment capital to seed new products but also other strategic resources that will allow us to expand our existing platform. I and the entire Deerfield team are very excited about becoming part of the Triarc 3 family of companies that we believe values, and will continue to foster, our entrepreneurial culture." Triarc is a holding company and, through its subsidiaries, the franchisor of the Arby's(R) restaurant system and the operator of approximately 235 restaurants located in the United States. Deerfield Capital Management LLC is a Chicago-based investment manager offering a diverse range of alternative fixed income strategies to institutional investors. # # # Notes To Follow 4 NOTES TO PRESS RELEASE o There can be no assurance that the Deerfield acquisition will be completed, or that we will be able to successfully integrate Deerfield into our existing operations. The description of the acquisition contained herein is only a summary and is qualified in its entirety by reference to the definitive agreements relating to the acquisition, copies of which will be filed by us with the Securities and Exchange Commission as exhibits to a Current Report on Form 8-K. o There can be no assurance that the initial public offering of common stock of Triarc Deerfield will be completed or, if completed, that the terms of such offering will not change from those described in the Registration Statement previously filed with the Securities and Exchange Commission. o A registration statement relating to the securities to be issued by Triarc Deerfield Investment Corporation has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release is not an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Investors should consider the investment objectives, risks, charges and expenses of Triarc Deerfield carefully before investing. This and other information about Triarc Deerfield will be contained in a preliminary prospectus, which may be obtained, once available, from Triarc Deerfield. The preliminary prospectus should be read carefully before investing. The information in the registration statement filed with the Securities and Exchange Commission, in any preliminary prospectus and in this press release is not complete and may be changed. o There can be no assurance that we or Deerfield will be able to identify appropriate future acquisition targets or that we or Deerfield will be able to successfully integrate any future acquisitions into our or Deerfield's existing operations. o The statements in this press release that are not historical facts, including, most importantly, information concerning possible or assumed future results of operations of Triarc Companies, Inc. and its subsidiaries (collectively, "Triarc" or the "Company") and statements preceded by, followed by, or that include the words "may," "believes," "expects," "anticipates" or the negation thereof, or similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). All statements that address operating performance, events or developments that are expected or anticipated to occur in the future, including statements relating to revenue growth, earnings per share growth or statements expressing general optimism about future operating results, are forward-looking statements within the meaning of the Reform Act. These 5 forward-looking statements are based on our current expectations, speak only as of the date of this press release and are susceptible to a number of risks, uncertainties and other factors. Our actual results, performance and achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Reform Act. Many important factors could affect our future results and could cause those results to differ materially from those expressed in the forward-looking statements contained herein. Such factors include, but are not limited to, those risks and uncertainties affecting the Company detailed in the Company's Form 10-K for the fiscal year ended December 28, 2003 (see especially "Item 1. Business-Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations") and in our other current and periodic filings with the Securities and Exchange Commission, all of which are difficult or impossible to predict accurately and many of which are beyond our control. We will not undertake and specifically decline any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. In addition, it is our policy generally not to make any specific projections as to future earnings, and we do not endorse any projections regarding future performance that may be made by third parties. 6 -----END PRIVACY-ENHANCED MESSAGE-----