Wendy's Co – ‘8-K’ for 6/27/95 – EX-22.1

As of:  Wednesday, 6/28/95   ·   For:  6/27/95   ·   Accession #:  30697-95-18   ·   File #:  1-02207

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Mistic                                                 3     11K 
 2: EX-22.1     Ltr of Intent (Mistic)                                12±    48K 
 3: EX-99.1     Press Release (Mistic)                                 2±     8K 

EX-22.1   —   Ltr of Intent (Mistic)
Exhibit Table of Contents

EX-22.1
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                                           Exhibit 2.1

Triarc Companies, Inc.              
900 Third Avenue              
New York, NY 10022              

   June 27, 1995

Joseph Umbach                                                                   
Joseph Victori Wines, Inc.                                                      
Best Flavors, Inc.                                                              
Nature's Own Beverage Company                                                   
2525 Palmer Avenue                                                              
New Rochelle, NY  10801                                                         

Gentlemen:                                                                      

The purpose of this letter (the "Letter of Intent") is to             
set forth the understanding of Triarc Companies, Inc., a                        
Delaware corporation ("Triarc"), on the one hand, and Joseph                    
Victori Wines, Inc., a New York corporation ("JVWNY"), Best                     
Flavors, Inc., a Nevada corporation ("Best Flavors"), Nature's                  
Own Beverage Company, a Delaware corporation ("Natures Own" and,                
together with JVWNY and Best Flavors, collectively, the                         
"Companies") and Joseph Umbach ("Umbach" and, together with the                 
Companies, collectively, the "Sellers"), on the other hand,                     
regarding the proposed acquisition (the "Acquisition") by Triarc                
or, at Triarc's option, one or more affiliates or designees of                  
Triarc (Triarc or such affiliates or designees, the "Buyer") of                 
all of the tangible and intangible assets and operations                        
(including, without limitation, cash, accounts receivable,                      
inventory, prepaid expenses, property, equipment, automobiles,                  
trademarks and tradenames (including, without limitation, the                   
Royal Mistic, Mistic, Grand Sunesta, Sunesta, Arctic Frost,                     
Fruitfest, Grape Escape, Jumpin' Gems, La Frost, Mango Mania,                   
Pitcher Perfect, Strawberry Bash, Royal Mist, Sports Cap, Sun                   
Valley Squeeze and Mitaca trademarks and tradenames) and good                   
will) of the Companies, as the same shall exist at the Closing                  
(as hereinafter defined), other than the assets and operations                  
of the Companies relating to their alcoholic wine business (the                 
"Acquired Assets").                                                             

The Sellers have informed Triarc that Mistic Beverage,                
Inc., a Delaware corporation and Joseph Victori Wines, Inc., a                  
California corporation, were merged into JVWNY, and LVJ Sales                   
Company, a Connecticut general partnership, has been dissolved                  
and its assets have been distributed to the Companies, and all                  
of the nonalcoholic beverage business of the Sellers and their                  
affiliates are conducted by the Companies.  From and after the                  
closing (the "Closing"), the Sellers and their affiliates will                  
agree not to use in any trademark, corporate name or tradename                  
any references to "Mistic," "Sunesta," and any of the Companies'                
other trademarks and tradenames included among the Acquired                     
Assets and any derivations thereof.  Any Acquired Assets in the                 
possession of Umbach or any affiliates or family members shall                  
be returned to the Companies immediately prior to the Closing                   
or, with Buyer's written consent, purchased by such parties from                
the Companies at fair market value.                                             

The purchase price (the "Purchase Price") for the           
Acquired Assets will consist of (i) $93 million, subject to a                   
post-closing adjustment as described herein, payable at the                     
Closing by wire transfer of immediately available funds to an                   
account specified in writing by the Sellers and (ii) the                        
assumption by the Buyer of the Assumed Liabilities (as                          
hereinafter defined).  In addition, in consideration for the                    
non-compete agreements referred to below, Buyer will pay the                    
Sellers in the aggregate $3 million of deferred payments (the                   
"Non-Compete Payments") payable in the amount of $900,000 in                    
cash on each of the first through third anniversary, and                        
$300,000 in cash four months after the third anniversary, of the                
later of (a) the Closing, or (b) the date on which the                          
settlement of or judgment in the Arkansas Litigation (as                        
hereinafter defined) becomes final and is not subject to further                
appeal.                                                                         

Triarc and the Sellers agree that the Companies                       
collectively shall be entitled to make combined cash                            
distributions (the "Cash Distributions") to their shareholders                  
from January 1, 1995 through July 31, 1995 in an amount not to                  
exceed $4,750,000, in the aggregate. If the Closing occurs after                
July 31, 1995, the Purchase Price will be (i) increased by an                   
amount equal to 45% of the Companies' combined "Net Income,"                    
determined in accordance with generally accepted accounting                     
principles consistently applied ("GAAP"), earned from August 1,                 
1995 through the Closing (the "Stub Period") and (ii) decreased                 
by an amount equal to 45% of the Companies' combined "Net                       
Losses," determined in accordance with GAAP, incurred during the                
Stub Period.  Such adjustment to the Purchase Price to reflect                  
the foregoing will be made after completion of an audit by                      
Buyer's independent certified public accountants of the                         
Companies' results of operations from January 1, 1995 through                   
the end of the Stub Period, subject to customary dispute                        
mechanism provisions to be negotiated.                                          

Buyer will assume or repay up to $7.0 million of                      
outstanding bank borrowings under the Companies' Revolving                      
Credit Agreement (the "Credit Agreement") with The Bank of New                  
York (the "Bank Debt") and assume all other liabilities (the                    
Bank Debt and such other assumed liabilities, collectively, the                 
"Assumed Liabilities") existing at the Closing relating to the                  
Acquired Assets, excluding the following:  liabilities of the                   
Companies to their shareholders or any affiliates or family                     
members of such shareholders (all such liabilities shall be                     
canceled at or prior to the Closing), liabilities for taxes of                  
any kind (including ERISA liabilities relating to businesses                    
other than the non-alcoholic beverage business) distributor                     
termination expenses (judgments, settlement payments, legal                     
expenses, etc., except as provided in the next paragraph) for                   
distributors terminated prior to the Closing, brokers fees (for                 
brokers or investment bankers retained by the Companies), legal                 
fees and expenses relating to previous proposed Business                        
Combinations (as hereinafter defined) or public offerings                       
involving the Companies or their subsidiaries or predecessors                   
and such other excluded liabilities as provided for in the                      
Definitive Agreements (as hereinafter defined).  The Sellers                    
will jointly and severally indemnify Buyer against any                          
liabilities other than Assumed Liabilities.                                     

Triarc agrees to pay, or cause Buyer to pay, 50% (up to a             
maximum amount of  $2,250,000) (the "Buyer Arkansas Payment") of                
any judgment or settlement amount and legal expenses (the                       
"Arkansas Litigation Costs") of the litigation Raleigh Spring                   
Water d/b/a Clear Mountain Spring Water v. Joseph Victori Wines,                
Inc. (the "Arkansas Litigation").  The Sellers agree to pay the                 
balance of all Arkansas Litigation Costs and the Arkansas                       
Litigation Costs, other than the Buyer Arkansas Payment, will                   
not be an Assumed Liability.  The Sellers and the Buyer will                    
negotiate in good faith the substitution and allocation of costs                
of a letter of credit to substitute for the letter of credit                    
issued under the Credit Agreement in connection with the                        
Arkansas Litigation.  Notwithstanding the foregoing, if for any                 
reason, the Buyer becomes obligated to pay more than the Buyer                  
Arkansas Payment, at the Buyer's option the Buyer may set-off                   
such amounts in excess of the Buyer Arkansas Payment against                    
future  Non-Compete Payments and Royalty Payments (as                           
hereinafter defined).  To the extent such amounts exceed the                    
amount of the  Non-Compete Payments and Royalty Payments, any                   
excess will be payable by the Sellers, in cash by wire transfer                 
of immediately available funds.  Any amounts paid by Buyer in                   
excess of the Buyer Arkansas Payment and not immediately repaid                 
by the Sellers will bear interest at the rate of 9% per annum.                  

The Sellers agree that the Companies will not until the               
earlier of the execution of the Definitive Agreements or the                    
Termination Date (as hereinafter defined) (i)  without the prior                
written consent of Triarc pledge, transfer, or otherwise dispose                
of any Acquired Assets or any assets that would constitute                      
Acquired Assets nor will they assume any Assumed Liabilities or                 
liabilities that would constitute Assumed Liabilities to (x) pay                
any liabilities other than Assumed Liabilities or (y) purchase                  
any assets other than Acquired Assets; (ii) incur or commit to                  
incur any sales, marketing or promotional allowances outside of                 
the ordinary course of business to distributors or co-packers or                
enter into any agreements or change the terms of any existing                   
agreements with distributors or co-packers without giving                       
advance written notice to the Buyer; (iii) manage their                         
operations outside the ordinary course of business without the                  
prior written consent of the Buyer; (iv) enter into any                         
agreements requiring any payment to be made or incurred as a                    
result of any change of control; (v) incur advertising and                      
promotional expenses or other financial commitments in excess of                
historical, ordinary or current plan levels; and (vi) increase                  
the compensation of any employee or consultant, other than                      
annual raises consistent with historical practice.  In addition,                
the Sellers agree to consult with Triarc on critical and/or                     
significant commitments and maintain an operating relationship                  
with Triarc.                                                                    

Consummation of the Acquisition is subject to (1) the                 
negotiation and execution of mutually acceptable definitive                     
agreements relating to the Acquisition ("Definitive Agreements")                
setting forth the terms and conditions of the Acquisition,                      
(2) the completion of a due diligence investigation in all                      
respects satisfactory to Triarc and (3) the availability to                     
Triarc of financing necessary to pay the Purchase Price and                     
repay or refinance the Bank Debt on terms that are satisfactory                 
to it in its sole discretion.  Triarc is prepared to draft and                  
negotiate the Definitive Agreements and to commence its due                     
diligence investigation immediately.  The Definitive Agreements                 
will contain customary terms and conditions for an acquisition                  
of this nature, including, without limitation, (i) represen-                    
tations and warranties from the Sellers with respect to (a) the                 
ownership of the capital stock of the Companies, (b) the                        
ownership of the Acquired Assets, (c) the power and authority to                
convey the Acquired Assets free and clear of any liens (other                   
than liens relating to Assumed Liabilities), (d) the Companies'                 
ability to consummate the Acquisition, (e) compliance with laws                 
(including, without limitation, bulk sales laws, if applicable),                
(f) the Companies' financial statements and the financial                       
statements relating to the Acquired Assets, (g) the business,                   
condition (financial or otherwise), results of operations,                      
assets, liabilities, properties and prospects of the Companies                  
and the absence of any material adverse changes with respect to                 
any of the foregoing since the date of the last regularly                       
prepared audited financial statements of the Companies, (h)                     
environmental issues, (i) tax issues (including ERISA), (j)                     
related party liabilities, (k) no-brokers, and (l) no                           
undisclosed non-alcoholic beverage non-ordinary course business                 
liabilities; (ii) covenants with respect to the operation of the                
business of the Companies between the time of the execution of                  
the Definitive Agreements and the Closing; (iii) conditions to                  
the parties' obligations to close, including, without                           
limitation, (a) continued accuracy of representations and                       
warranties, (b) compliance with covenants, (c) receipt by all                   
parties of all corporate, regulatory and other third party                      
approvals and authorizations (including, without limitation, the                
termination or expiration of the waiting period under the Hart-                 
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the                
"HSR Act"), and such consents as may be required under all                      
material agreements with the Companies' co-packers and                          
distributors) necessary to consummate the Acquisition,                          
(d) execution and delivery by the Sellers and their affiliates                  
of three year non-compete agreements (the "Non-Compete                          
Agreements") preventing them from competing, directly or                        
indirectly, in the non-alcoholic beverage business,                             
(e) execution and delivery by Umbach of a six-month consulting                  
agreement (the "Consulting Agreement") satisfactory in form and                 
substance to Triarc pursuant to which Umbach agrees not to                      
accept other full-time employment and agrees to remain available                
to advise the Buyer as the Buyer shall request during normal                    
business hours, (f) an arrangement whereby at the Closing all                   
employees of the non-alcoholic beverage business of the                         
Companies, other than those employees agreed to by the Buyer,                   
shall become employees of the Buyer and shall cease to be                       
employees of the Companies and (g) an agreement by the Buyer to                 
adopt a severance policy in the form of Exhibit A hereto for any                
employee terminated for reasons other than "cause" during the                   
first twelve months after the Closing, and (iv) indemnities from                
the Sellers with respect to breaches of representations,                        
warranties, covenants and agreements contained in the Definitive                
Agreements.  The Consulting Agreement or the Non-Compete                        
Agreements will contain royalty arrangements for Sellers, the                   
principal terms, including the royalty payments (the "Royalty                   
Payments"), of which are set forth on Exhibit B attached hereto.                

Pursuant to the Definitive Agreements, the Sellers will be            
jointly and severally liable for any Losses (as defined in the                  
Definitive Agreements) in excess of $750,000 (the "Basket") that                
are incurred by Buyer and its affiliates as a result of breaches                
of representations and warranties made by the Sellers, subject                  
to a maximum liability of $15,000,000 (the "Cap").  The Sellers'                
representations and warranties will generally survive for a two-                
year period after the Closing.  Notwithstanding the foregoing,                  
the Basket, Cap and/or survival periods referred to above shall                 
not apply to a limited number of customary representations and                  
warranties including, without limitation, title to the Acquired                 
Assets, power and authority to convey the Acquired Assets,                      
enforceability of the Definitive Agreements, environmental                      
issues, tax (including ERISA relating to the non-alcoholic                      
beverage business) issues, related party liabilities, no brokers                
and no undisclosed non-alcoholic beverage non-ordinary course                   
business liabilities (including indebtedness for borrowed money                 
other than the working capital line) (which applicable basket,                  
cap and survival period will be negotiated by the parties);                     
provided, however, that with respect to the representations and                 
warranties relating to (x) no undisclosed non-alcoholic beverage                
non-ordinary course business liabilities (i) there will be no                   
basket, (ii) the cap will be the Purchase Price and (iii) the                   
survival period will be five years from the date of the Closing                 
and (y) taxes (including ERISA to the extent it relates to                      
businesses other than the non-alcoholic beverage business)                      
(i) there will be no basket, (ii) the cap will be the Purchase                  
Price and (iii) the survival period will be until 6 months after                
the expiration of the applicable statute of limitations.   Non-                 
Compete Payments and Royalty Payments may be set-off, at the                    
Buyer's option, to satisfy the Sellers' indemnification                         
obligations and any downward adjustment to the Purchase Price.                  

As soon as practicable after the date hereof, the Sellers             
and Triarc shall file or cause to be filed notification and                     
report forms in compliance with the HSR Act.                                    

Promptly following your execution and delivery of this                
Letter of Intent in the manner provided below and until the                     
Termination Date (as hereinafter defined), the Sellers will                     
provide Triarc and its affiliates and any person or organization                
who is considering providing financing to Triarc in connection                  
with the Acquisition and their respective officers, directors,                  
employees, agents, counsel, accountants, financial advisors,                    
consultants and other representatives (collectively, the                        
"Representatives") with full access, upon reasonable prior                      
notice, to all officers, employees and accountants of the                       
Companies and to their assets, properties, contracts, books,                    
records, customers, suppliers and all such other information and                
data concerning the business and operations of the Companies as                 
Triarc or any of such other persons reasonably may request in                   
connection with such investigation.  Triarc acknowledges that it                
has entered into a confidentiality agreement dated August 4,                    
1994 (the "Confidentiality Agreement") with you and agrees that                 
its due diligence will be conducted in accordance with and                      
governed by the terms thereof.                                                  

In consideration of the substantial expenditure of time,              
effort and expense to be undertaken by Triarc and its                           
Representatives immediately upon your execution and delivery of                 
this Letter of Intent, the Sellers and Triarc hereby undertake                  
and agree to negotiate in good faith the terms of the Definitive                
Agreements until the earlier of the execution of the Definitive                 
Agreements or the Termination Date.  In addition, the Sellers                   
agree that until the Termination Date, the Sellers will not, nor                
will the Sellers permit any of their affiliates (or authorize or                
permit any of their respective Representatives) to take,                        
directly or indirectly, any action to initiate, assist, solicit,                
negotiate, encourage or accept any offer or inquiry from any                    
person (a) to engage in any Business Combination, (b) to reach                  
any agreement or understanding (whether or not such agreement or                
understanding is absolute, revocable, contingent or conditional)                
for, or otherwise attempt to consummate, any Business                           
Combination or (c) to furnish or cause to be furnished any                      
information with respect to the Companies to any person (other                  
than as contemplated by this Letter of Intent) who the Sellers                  
or any affiliate or Representative knows or has reason to                       
believe is in the process of considering any Business                           
Combination.  For purposes of this Letter of Intent,                            
(x) "Termination Date" shall mean the earliest of the following:                
(i) 21 days from the date hereof unless Buyer has delivered to                  
Sellers a draft of the Definitive Agreements prior thereto and                  
(ii) 45 days from the date hereof, unless a Definitive                          
Agreements have been executed on or prior thereto, and                          
(y) "Business Combination" shall mean any merger, consolidation                 
or combination to which any of the Sellers is a party, any sale,                
dividend, split, recapitalization or other disposition of                       
capital stock or other equity interest of any of the Companies                  
or any sale, dividend or other disposition of all or                            
substantially all of the assets and properties of any of the                    
Companies or any significant financing or refinancing by any of                 
the Companies.  If any Seller or any such affiliate or                          
Representative receives from any person any offer, inquiry or                   
informational request referred to above, except for inadvertent                 
or immaterial oral offers, requests or inquiries, such Seller                   
will promptly advise such person, by written notice, of the                     
terms of this paragraph and will promptly, orally and in                        
writing, advise Triarc of such offer, inquiry or request and                    
deliver a copy of the foregoing notice to Triarc.  The Sellers                  
agree that the Definitive Agreements will contain a                             
substantially identical agreement (without the exception for                    
inadvertent or immaterial oral offers, requests or inquiries) by                
the Sellers with respect the period commencing on the date of                   
execution of such Definitive Agreements and terminating on the                  
earlier of the Closing or the termination of such Definitive                    
Agreements in accordance with their respective terms.                           

This Letter of Intent is intended to be a summary                     
evidencing the current intentions of the parties with respect to                
the Acquisition as reflected in discussions between our                         
Representatives to date, and it is expressly understood and                     
agreed that (1) this Letter of Intent is not intended to, and                   
does not, constitute an agreement to consummate the Acquisition                 
or to enter into the Definitive Agreements and (2) the parties                  
hereto will have no rights or obligations of any kind whatsoever                
relating to the Acquisition by virtue of (i) this Letter of                     
Intent, (ii) any past, present or future approvals by or conduct                
of the management or board of directors of any party to the                     
Acquisition (or any affiliate thereof), (iii) any other past,                   
present or future written or oral indications of assent, or                     
indications of results of negotiations or agreement to some or                  
all matters then under discussion, or (iv) any other written or                 
oral expression by our respective Representatives unless and                    
until the Definitive Agreements are executed and delivered;                     
provided that the respective obligations of the Sellers and                     
Triarc contained in the seventh paragraph, the preceding two                    
paragraphs and in the following three paragraphs will be binding                
on the Sellers and Triarc, as the case may be, when the Sellers                 
and Triarc each have signed a copy of this Letter of Intent in                  
the manner provided below.                                                      

Each of the parties hereto hereby represents and warrants             
that it is free to enter into this Letter of Intent and to                      
consummate the Acquisition or any part thereof and that none of                 
them has induced the other to breach any agreements or                          
understandings with, or obligation to, any third party in                       
respect of the Acquisition or any other part thereof.  Each of                  
the parties hereto hereby further represents and warrants that,                 
other than by virtue of this Letter of Intent:  (a) it is not                   
under any obligation with respect to the Acquisition or any part                
thereof; (b) no offer, commitment, undertaking, estoppel,                       
agreement or obligation  of any nature whatsoever relating to                   
the Acquisition or any part thereof exists or may be implied in                 
fact, law, or equity; and (c) the execution and delivery by such                
party of this Letter of Intent and the consummation of the                      
Acquisition or any part thereof will not violate the rights of                  
any third party (other than customer and supply contracts) or                   
give rise to any right or liability on the part of such party                   
based upon, or arising out of, or in respect of a violation of,                 
or interference with, the rights of any such third party.                       

Without the prior written consent of the other, except to             
the extent required by applicable law or the rules and                          
regulations of any applicable stock exchange, neither the                       
Sellers nor Triarc will, and the Sellers and Triarc will cause                  
their respective Representatives not to, make any release to the                
press or other public disclosure or make any statement to any                   
competitor, customer, client or supplier of any of the Companies                
or any other person, with respect to either the fact that                       
discussions or negotiations are taking place concerning Triarc's                
possible acquisition of the Companies or the existence or                       
contents of this Letter of Intent.                                              

Whether or not the transactions contemplated hereby are               
consummated, each of the Companies, Umbach and Triarc will pay                  
its or his own costs and expenses (including, without                           
limitation, brokers fees) incurred in connection with the                       
preparation and negotiation of this Letter of Intent and the                    
Definitive Agreements and Triarc's due diligence investigation.                 

This Letter of Intent shall be governed by and construed in           
accordance with the laws of the State of New York, made and to                  
be performed entirely within such State.                                        

This Letter of Intent and the Confidentiality Agreement set           
forth the entire understanding and agreement of the parties                     
hereto and their affiliates with regard to the subject matter of                
this Letter of Intent and supersede all prior and                               
contemporaneous agreements, arrangements or understandings                      
relating thereto, including, without limitation, the Summary of                 
Terms and Conditions dated June 6, 1995 and the draft Letter of                 
Intent executed by the Sellers on June 15, 1995.                                

This Letter of Intent may be modified or amended, and the             
terms hereof may be waived, only by a written agreement executed                
and delivered by each of the parties hereto.  This Letter of                    
Intent may be executed in one or more counterparts, each                        
counterpart being deemed an original instrument and all such                    
counterparts together constituting the same agreement.                          

If you are in agreement with the foregoing, please so                 
indicate by signing two copies of this Letter of Intent in the                  
space set forth below and returning one of such signed copies to                
the undersigned, whereupon this letter shall constitute our                     
binding agreement in accordance with the terms and provisions                   
set forth above.                                                                

       Very truly yours,

            TRIARC COMPANIES, INC.

       By: LEON KALVARIA
                      --------------------------
                Name:  Leon Kalvaria
                Title: Vice Chairman

Accepted and agreed to:                                                         

JOSEPH UMBACH                                                                   
------------------------                                                        
JOSEPH UMBACH                                                                   

JOSEPH VICTORI WINES, INC.                                                      

By: JOSEPH UMBACH                                                               
------------------------------                                            
Name:  Joseph Umbach                                                      
Title: President                                                          

BEST FLAVORS, INC.                                                              

By: JOSEPH UMBACH                                                               
--------------------------------                                          
Name:   Joseph Umbach                                                     
Title:  President                                                         

NATURE'S OWN BEVERAGE COMPANY                                                   

By:  JOSEPH UMBACH                                                              
--------------------------------                                          
Name:  Joseph Umbach                                                      
Title: President                                                          

EX-22.1
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                                             Exhibit A

SEVERANCE PAYMENT SCHEDULE FOR              
EMPLOYEES TERMINATED BY BUYER WITHOUT CAUSE               
WITHIN 12 MONTHS FROM CLOSING             

Group I                                                                         

Vice Presidents, Directors and Sales and Brand Managers                         
reporting directly to the President (10 people) :                               

Less than one (1) year of service (2 people):                     

- four (4) weeks severance pay                            

Over one (1) year of service (8 people):                          

- eight (8) weeks severance pay plus                      

- two (2) weeks severance pay for                         
each year of service* and,                            

- if after twelve (12) weeks                              
employee does not have employment,                    
severance pay will continue until                     
employment is found up to a                           
maximum of an additional twelve                       
(12) weeks provided employee has                      
displayed a good faith effort to                      
seek employment.                                      

Group II                                                                        

All other employees (138 people):                                               

Less than one (1) year of service:                                

- two (2) weeks severance pay                             

Over one (1) year of service:                                     

- two (2) weeks severance pay plus                        

- two (2) weeks severance pay for                         
each year of service<F1>.                             

<FN1>1 week for each completed 6 months of service.                             
</FN1>                                                                          

EX-22.1
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                                             Exhibit B

Royalty Arrangements              

1)   $.25 case;                                                                 

2)   Have a threshold by product line (from Closing) before a                   
royalty is paid (goes back to case #1); e.g.:                         

Sports Cap (sports drink products<F2> not packaging):  must           
sell 300,000 cases per year before a royalty is paid.                 

Sunesta:  must sell 750,000 yr.1/1 mil yr 2/1 mil yr 3                
before a royalty is paid (look at each year separately).              

Sun Valley Squeeze:  must sell 250,000 cases per year                 
before a royalty is paid.                                             

Other:  number of cases to be negotiated before a royalty             
is paid.                                                                        

Any product line extension must be approved by Buyer.                 

3)   Royalty payments will cover shipping of qualified products,                
regardless of introduction date, through the third                    
anniversary date from closing date (i.e., 3 years).                   

4) To qualify for a royalty payment (beyond current 3                           
identified product lines):                                                

A proposal must be submitted in writing by Sellers that         
would include the specifics for formulation, packaging,         
labeling, trademark, positioning and rationale.                 
Specifically, Sellers cannot submit a raw listing of            
ideas to Buyer and claim proprietary rights;                    

Sellers must recognize that Buyer or Royal Crown                
Company, Inc. ("RC") or one of their affiliates may be          
working on similar ideas and the submission of a                
proposal will not obligate the Buyer to either introduce        
the product or pay a royalty if the new product ideas           
was previously thought of by Buyer, RC or one of their          
affiliates.                                                     

Product flavor extensions under the Royal Mistic product        
line would be excluded from any royalty payment to              
Sellers.                                                        

Buyer will maintain the right to refuse to distribute           
new products developed or proposed by Sellers.  Sellers         
would still be subject to three-year non-compete even if        
product rejected.                                               

<FN2>Clear (sports) flavors:  Lemonade-Lime; Orange Mango; Fruit                
Punch; Raspberry Strawberry; Color (standard) flavors:  Lemon                   
Tea; Fruit Punch; Kiwi-Strawberry (plus in each case line                       
extensions but excluding any new group of products with a Sports                
Cap).                                                                           

</FN2>                                                                          

5) The use by Sellers of Buyer's R&D resources (staff and                       
facilities) must be approved in advance by Buyer and shall                
remain under the control of the Buyer.  Any products or                   
product enhancements initiated, developed or discovered                   
during the first three years from the Closing which are not               
shipped by the end of this three-year period will belong to               
Buyer and the Sellers will execute all appropriate                        
documentation requested by Buyer to evidence the Buyer's                  
ownership of such products or enhancements.  Sellers will                 
advise Buyer in advance of all costs of raw materials, as                 
well as development costs of packaging material, designs                  
and concepts (bottle, label, caps, etc.), which will only                 
be borne by Buyer if approved by it in writing in advance                 
of any costs being incurred by Sellers.                                   

6) Any royalty payments due Sellers will be paid quarterly in                   
arrears by Buyer and will be subject to setoff for any                    
amounts owed to Buyer under the Definitive Agreements.                    

7) At Sellers' option, the Buyer will provide Sellers with                      
office space at the Companies' New Rochelle offices which                 
shall be rented by Sellers at Buyer's cost.  Sellers will                 
provide and pay for their own secretarial services, word                  
processing equipment, phone, fax and other support                        
services.  The Buyer may terminate such rental arrangement                
upon 60 days' notice with no further obligation to continue               
or renew.                                                                 

Dates Referenced Herein

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		8/1/95		1					None on these Dates
		7/31/95		1
Filed on:		6/28/95
For Period End:		6/27/95		1
		6/15/95		1
		6/6/95		1
		1/1/95		1
		8/4/94		1
									List all Filings